S. HRG. 111–1217 

LEGISLATIVE HEARING ON S. 1733, CLEAN 

ENERGY JOBS AND AMERICAN POWER ACT 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

OCTOBER 29, 2009 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
LEGISLATIVE HEARING ON S. 1733, CLEAN ENERGY JOBS 

AND AMERICAN POWER ACT 
U.S. GOVERNMENT PUBLISHING OFFICE

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20–183 PDF 2016

S. HRG. 111–1217 

LEGISLATIVE HEARING ON S. 1733, CLEAN 

ENERGY JOBS AND AMERICAN POWER ACT 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

OCTOBER 29, 2009 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

AMY KLOBUCHAR, Minnesota 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

ARLEN SPECTER, Pennsylvania 

JAMES M. INHOFE, Oklahoma 

GEORGE V. VOINOVICH, Ohio 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

MIKE CRAPO, Idaho 

CHRISTOPHER S. BOND, Missouri 

LAMAR ALEXANDER, Tennessee 

BETTINA POIRIER, Staff Director 

RUTH VAN MARK, Minority Staff Director 
(III) 

C O N T E N T S 

Page 

OCTOBER 29, 2009 

OPENING STATEMENTS 

Specter, Hon. Arlen, U.S. Senator from the State of Pennsylvania .................... 1 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 2 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 3 

Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee ................... 3 

Lautenberg, Hon. Frank R., U.S. Senator from the State of New Jersey ........... 4 

Bond, Hon. Christopher S., U.S. Senator from the State of Missouri ................. 5 

Klobuchar, Hon. Amy, U.S. Senator from the State of Minnesota ...................... 9 

Voinovich, Hon. George V., U.S. Senator from the State of Ohio ........................ 9 

Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode Island ......... 12 

Barrasso, Hon. John, U.S. Senator from the State of Wyoming .......................... 12 

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 13 

Udall, Hon. Tom, U.S. Senator from the State of New Mexico ............................ 14 

Baucus, Hon. Max, U.S. Senator from the State of Montana .............................. 60 

WITNESSES 

Chiaro, Preston, Chief Executive Officer, Energy Product Group, Rio Tinto ..... 15 

Prepared statement .......................................................................................... 17 

Rowe, John, Chairman, President, and Chief Executive Officer, Exelon Corporation ................................................................................................................. 21 

Prepared statement .......................................................................................... 23 

Response to an additional question from Senator Sanders .......................... 33 

Responses to additional questions from Senator Vitter ................................ 35 

Kempton, Willett, Professor, Marine Policy, University of Delaware ................. 44 

Prepared statement .......................................................................................... 46 

Winger, Bob, President, International Brotherhood of Boilermakers, Local 

11 ........................................................................................................................... 61 

Prepared statement .......................................................................................... 64 

Krupp, Fred, President, Environmental Defense Fund ........................................ 71 

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

Carey, Mike, President, Ohio Coal Association ..................................................... 101 

Prepared statement .......................................................................................... 103 

Responses to additional questions from: 

Senator Inhofe ........................................................................................... 184 

Senator Voinovich ..................................................................................... 188 

Stallman, Bob, President, American Farm Bureau Federation ........................... 190 

Prepared statement .......................................................................................... 192 

Response to an additional question from Senator Voinovich ........................ 204 

Boehlert, Hon. Sherwood, Co-Chair, Bipartisan Policy Center’s National 

Transportation Policy Project .............................................................................. 225 

Prepared statement .......................................................................................... 228 

Response to an additional question from Senator Boxer .............................. 348 

Responses to additional questions from: 

Senator Sanders ........................................................................................ 349 

Senator Inhofe ........................................................................................... 350 

Millar, William, President, American Public Transportation Association .......... 352 

Prepared statement .......................................................................................... 354 

Response to an additional question from Senator Boxer .............................. 361 

Responses to additional questions from: 

Senator Cardin .......................................................................................... 362 
Page

IV 

Millar, William, President, American Public Transportation Association—Continued 

—Continued 

Senator Inhofe ........................................................................................... 364 

McKeever, Mike, Executive Director, Sacramento Area Council of Governments ..................................................................................................................... 366 

Prepared statement .......................................................................................... 368 

Responses to additional questions from Senator Inhofe ............................... 388 

Windsor, Barbara J., President and Chief Executive Officer, Hahn Transportation, Inc. ............................................................................................................. 389 

Prepared statement .......................................................................................... 391 

Responses to additional questions from Senator Inhofe ............................... 404 

Podesta, John, President and Chief Executive Officer, Center for American 

Progress Action Fund ........................................................................................... 423 

Prepared statement .......................................................................................... 425 

Responses to additional questions from: 

Senator Sanders ........................................................................................ 451 

Senator Voinovich ..................................................................................... 455 

Helme, Ned, President, Center for Clean Air Policy ............................................ 460 

Prepared statement .......................................................................................... 463 

Lash, Jonathan, President, World Resources Institute ........................................ 480 

Prepared statement .......................................................................................... 482 

Response to an additional question from: 

Senator Sanders ........................................................................................ 492 

Senator Voinovich ..................................................................................... 492 

Murray, Iain, Vice President for Strategy, Competitive Enterprise Institute .... 494 

Prepared statement .......................................................................................... 496 

Adams, Hon. Linda, Secretary, California Environmental Protection Agency ... 559 

Prepared statement .......................................................................................... 561 

Responses to additional questions from Senator Boxer ................................ 573 

Johnson, Dave, Organizing Director, Laborers’ Union Eastern Region, Laborers’ International Union of North America ........................................................ 577 

Prepared statement .......................................................................................... 579 

Response to an additional question from: 

Senator Sanders ........................................................................................ 584 

Senator Voinovich ..................................................................................... 585 

Dolezalek, J. Stephan, Managing Director, VantagePoint Venture Partners .... 587 

Prepared statement .......................................................................................... 589 

Response to an additional question from Senator Sanders .......................... 595 

Hawkins, David, Director, Climate Center, Natural Resources Defense Council ........................................................................................................................... 596 

Prepared statement .......................................................................................... 598 

Response to an additional question from Senator Sanders .......................... 652 

Responses to additional questions from Senator Whitehouse ...................... 653 

Response to an additional question from Senator Inhofe ............................. 656 

Responses to additional questions from Senator Vitter ................................ 657 

Trisko, Eugene, Attorney at Law, on behalf of the United Mine Workers 

of America ............................................................................................................. 661 

Prepared statement .......................................................................................... 663 

Smorch, Matt, Vice President, Strategic Planning, CountryMark ...................... 695 

Prepared statement .......................................................................................... 698 

Responses to additional questions from Senator Inhofe ............................... 706 

Cicio, Paul, President, Industrial Energy Consumers of America ....................... 708 

Prepared statement .......................................................................................... 710 

Responses to additional questions from 

Senator Whitehouse .................................................................................. 726 

Senator Voinovich ..................................................................................... 727 

ADDITIONAL MATERIAL 

Letter to Senator Boxer and Senator Inhofe from the American Automobile 

Association et al., October 28, 2009 .................................................................... 769 

Letter to Senator Boxer and Senator Inhofe from the National Association 

of Regulatory Utility Commissioners, October 28, 2009 ................................... 771 

Executive Summary from the CNA Corporation, National Security and the 

Threat of Climate Change ................................................................................... 774 

Statement of the Family Farm Alliance, October 28, 2009 .................................. 777 
(1) 

LEGISLATIVE HEARING ON S. 1733, CLEAN 

ENERGY JOBS AND AMERICAN POWER ACT 

THURSDAY, OCTOBER 29, 2009 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

Washington, DC. 

The full committee met, pursuant to notice, at 9:30 a.m. in room 

406, Dirksen Senate Office Building, Hon. Barbara Boxer (chairman of the full committee) presiding. 

Present: Senators Boxer, Inhofe, Alexander, Barrasso, Baucus, 

Bond, Cardin, Carper, Crapo, Gillibrand, Klobuchar, Lautenberg, 

Merkley, Sanders, Specter, Udall, Vitter, Voinovich, and 

Whitehouse. 

Senator BOXER. The committee will come to order. 

We are very pleased to have these distinguished panels. We actually have four distinguished panels, and so we are going to get 

right to it. I am going to waive my opening statement, and if I have 

to, make one at the end, and call on, therefore, Senator Specter for 

his 2-minute opening statement. 

OPENING STATEMENT OF HON. ARLEN SPECTER, 

U.S. SENATOR FROM THE STATE OF PENNSYLVANIA 

Senator SPECTER. Thank you, Madam Chairwoman. 

I want to thank this distinguished panel of witnesses for coming 

in today. This is our third day of hearings, and we are examining 

the very complex issues involved in this legislation. It would be my 

hope that our committee would hold its fire until we have heard 

all of the witnesses and examined the key issues as to how we deal 

with global warming, climate change; how we protect the jobs that 

are at stake; how we deal with the electrical rates; and how we 

deal with the critical issue of freeing ourselves from dependence on 

foreign oil. 

It is hard to avoid the heavy note of partisanship which has been 

present in these hearings. It would be my hope that we would look 

at the facts, be fact oriented. We all want what is best for America 

and reach a public policy decision. 

I want to welcome especially John Rowe, who is the head of 

Philadelphia Electric Company. He is also the head of Exelon, I 

might add, which Philadelphia Electric is a part of. 

Thank you, Madam Chairwoman. 

Senator BOXER. Senator Inhofe. 
2 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you, Madam Chairman. 

I think we need to get on record here because we have talked 

about this before, and before we go into a markup, the Republicans 

on the committee think it is reasonable to get three things: the 

Chairman’s mark of the bill, which we have and we thank you for 

providing that; a score of the Kerry-Boxer bill by the CBO; and a 

full economic analysis of your bill by the EPA. 

Now, that is the thing that to me is the most significant because 

I think, you know, the people are entitled to know what it is that 

we have in this massive bill. 

So we don’t have the full economic analysis. This isn’t just my 

view, but on Tuesday, Lisa Jackson, the EPA Administrator, when 

asked whether the EPA had conducted a full analysis, she clearly 

said no. So that is what we are going to have to have in this, and 

it is my understanding that you would tolerate three. You would 

prefer 2 minutes, so I will give the rest of my time to Senator 

Bond. 

[The prepared statement of Senator Inhofe follows:] 

STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA

Today marks the third—and mercifully last—marathon session on the KerryBoxer bill. Before I address what we’ve learned about the Kerry-Boxer bill over the 

last 2 days, I want to talk about the next steps in the legislative process. 

Chairman Boxer, before you move to a markup, the Republicans on this committee think it’s reasonable that we get three things: (1) a chairman’s mark of the 

bill, which we have—and we thank you for providing it; (2) a score of Kerry-Boxer 

by the Congressional Budget Office; and (3) a full economic analysis of your bill by 

the Environmental Protection Agency. Let me focus for a minute on the EPA analysis. 

Madam Chairman, we don’t have a full economic analysis. This isn’t just my view. 

On Tuesday, Lisa Jackson, the EPA Administrator, when asked whether EPA had 

conducted a full analysis, she said, very clearly, ‘‘No.’’ 

Madam Chairman, I’ll cut to the chase: let’s work together and with the EPA to 

get the full analysis as well as the CBO score. Once we get them, we can proceed 

to a markup and take it from there. I know Senator Voinovich wanted to address 

these issues, so I’ll move on. 

Some in this room—well, maybe everyone in this room—will be surprised to hear 

that I’ve been eagerly awaiting this hearing. We’ve got an excellent lineup of witnesses. The Ohio Coal Association, the American Farm Bureau, and the American 

Trucking Association will explain why Kerry-Boxer threatens jobs and affordable, 

reliable energy, particularly in rural America. And we’ll hear why the cap-and-trade 

system in Europe has been a failure. 

I know my time is short, so I just want to emphasize the three important things 

we’ve learned about Kerry-Boxer over the last 2 days: It will undermine the global 

competitiveness of America’s manufacturers, it will weaken America’s national security, and it’s an energy tax that will be paid for by the Heartland. 

So I look forward to hearing from today’s witnesses so we can learn even more 

about this bill. 

Thank you, Madam Chairman. 

Senator BOXER. OK. We will do that after we hear from Senator 

Cardin, and I believe Senator Alexander will follow. 

Senator Cardin. 
3 

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND 

Senator CARDIN. Well, Madam Chair, thank you. This is, as Senator Specter pointed out, this is our third day of hearings. Yesterday, we started at 9:30. We finished a little before 6, and I thought 

the four panels were extremely helpful. 

Today, we have four additional panels that I think will be helpful 

to us in understanding the importance of getting this bill passed, 

dealing with a new energy policy for America, for our security, for 

our economy, and for our environment. 

I just want to talk about one aspect of the bill, and that is transportation. I have talked about transportation before, but I think 

transportation is a critically important part of the bill. Thirty percent of our greenhouse gas emissions come from transportation. 

Transportation consumes 60 percent to 70 percent of our oil. 

This legislation recognizes the importance of transforming our 

transportation system by investing in clean fuel so that we can develop new types of liquid fuel such as ethanol from algae. I mention 

that because work is being done on that in Baltimore, and we are 

proud of the work that is being done in regards to clean fuels. 

The legislation also invests in clean vehicles. I was pleased to see 

this week Senator Carper and Vice President Biden talking about 

electric cars in Delaware. I am proud of the people of Maryland 

that are going to help build those cars. The General Motors hybrid 

buses being done in White Marsh, Maryland, the Mack hybrid 

trucks in Hagerstown, Maryland—these are all examples of clean 

vehicles that I think will be part of our solution for our energy policy in America. 

The bill also invests in CLEAN-TEA or transit. We live in the 

second most congested area in the Nation, Washington, DC. It is 

estimated that on average, a person spends 62 hours and 42 gallons of gasoline a year stuck in congestion here in Washington. If 

we double the transit ridership of this Nation, we can reduce our 

imported oil by 40 percent. 

As Secretary LaHood said before this committee, it is about 

where we invest for America’s future. This bill invests in clean energy, clean technology, to build our economy, to make us more secure, and to be the right stewards of our environment. 

I look forward to hearing from the witnesses. 

Senator BOXER. Thank you. 

Senator Alexander. 

OPENING STATEMENT OF HON. LAMAR ALEXANDER, 

U.S. SENATOR FROM THE STATE OF TENNESSEE 

Senator ALEXANDER. Thanks, Madam Chairman. 

I, too, look forward to the panel, and I thank you for coming. 

We have a difference of opinion about how to address climate 

change, just speaking for myself. I don’t have any problem with the 

problem. I think it is real. I have a problem with the solution. I 

think the economy-wide cap and trade is taxes, mandates, surprises and unnecessary. The costs will drive jobs overseas looking 

for cheap electricity. Applying an economy-wide cap and trade 

doesn’t work because it raises the price but doesn’t reduce the carbon by much. Manufacturing doesn’t need this burden. 
4 

And if we are going to encourage different kinds of energy, instead of having a national windmill policy, we ought to have a national carbon-free energy policy and have parity among the different forms of energy. 

So instead, all 40 Republicans, and I believe many Democrats, 

would agree to the following four points as a way to reach our climate change goals by 2030. One, create an environment in which 

we can build 100 new nuclear power plants, just as we did between 

1970 and 1990. Nuclear produces 70 percent of our carbon-free 

electricity. 

No. 2, electrify half our cars and trucks in the next 20 years. We 

could do that without building one new power plant, according to 

the Brookings Institution and the Obama administration. Plug 

them in at night. 

No. 3, explore offshore for low carbon natural gas, as well as our 

own oil. 

And No. 4, four mini-Manhattan Projects to carbon recapture, 

make solar costs competitive, make electric batteries better, and recycling nuclear fuel so we don’t isolate plutonium. 

If we did that, we wouldn’t need a national energy tax. We 

wouldn’t need to raise the price of gasoline. We wouldn’t need to 

run jobs overseas, and we wouldn’t need to have 170 billion taxpayer dollars subsidizing wind developers to build 186,000 50-story 

wind turbines in an area the size of West Virginia over the next 

20 years. 

Thank you, Madam Chairman. 

Senator BOXER. Well, let us know what you really think about 

that. 

[Laughter.] 

Senator ALEXANDER. If you would give me more than 2 minutes, 

I would. 

Senator BOXER. Well, any time. 

[Laughter.] 

Senator BOXER. Let’s see—Senator Lautenberg. 

OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, 

U.S. SENATOR FROM THE STATE OF NEW JERSEY 

Senator LAUTENBERG. Yes. Thanks, Madam Chairman, and welcome everybody. 

The hard roadwork is underway, as you see. And one thing that 

I look for in the different differing views here is what is it that our 

mission is? How serious is the mission? And I think we have to 

look for ways to figure out how we get there. 

But not once have I heard here about the importance of getting 

a bill underway, about the importance of reducing carbon exposure, 

of how we can work together, instead of these dilatory things that 

always find a way to impede progress, and that is what we are 

hearing now, for another review by the CBO. 

And I look to my State, New Jersey, the most densely populated 

State in the Union. We had the Chairman of our big utility, Public 

Service Electric and Gas, here. And we now can attribute job availability having improved by 28,000 jobs. We don’t want people to 

lose jobs. That is not the mission. 
5 

And no matter how they try to color it on the opposition to getting something done, it doesn’t play the game. It doesn’t get near 

what our mission is, a sacred mission to say to our kids that we 

are going to work hard that you are healthy in years ahead, and 

let that be the guiding light, and work under that umbrella and 

say, OK, now we have got to have a solution to the problem. 

And I would love to hear our colleagues from the other side, I 

know they love their kids just as much as we love our kids. It is 

just that I don’t think they realize the urgency of the problem or 

are unwilling to accept it. 

Thank you. 

Senator BOXER. Thank you, Senator Lautenberg. 

Senator Bond. 

OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, 

U.S. SENATOR FROM THE STATE OF MISSOURI 

Senator BOND. Thank you, Madam Chair. 

Yesterday, we talked about how Kerry-Boxer offers $133 billion 

less than Waxman-Markey to protect against higher power bills. A 

closer look reveals many other ways Kerry-Boxer fails to protect 

consumers. 

This chart shows how Kerry-Boxer fails to protect electricity consumers from higher power bills. While Kerry-Boxer provides consumer protection early in the program, funding shown here in blue 

declines quickly over the years and runs out completely less than 

halfway through the bill. Consumers are left exposed, while cap 

and trade drives electricity rates higher, the red line here, up to 

42 percent higher in Missouri by 2020 and 48 percent higher across 

the country by 2050. 

This chart here shows how Kerry-Boxer fails to protect workers. 

Again, there is a rebate program for energy intensive, trade exposed workers, shown here in blue. What workers need is shown 

here in the red line. However, Kerry-Boxer quickly cuts worker 

protection funding and eliminates it entirely by 2034. 

So after a few years of Kerry-Boxer, worker protection is not 

enough, and for half of the bill, Kerry-Boxer leaves workers totally 

exposed to losing jobs. That will also fail to protect farmers. Fertilizer producers are relying on this program, but its failure will 

force energy production overseas to cheaper countries like Russia. 

Do we really want to make U.S. farmers dependent on Russian fertilizer? 

Some also reference the so-called price collar to protect against 

rising energy prices. However, what Kerry-Boxer sponsors do not 

admit is that while they start the price control at a modest $28 per 

ton, they have a formula in the bill that sends the price skyrocketing. 

Every year, Kerry-Boxer adds 5 percent to 7 percent plus inflation to the price collar so that by 2020, it is at $50 per ton, over 

$100 per ton by 2030, and $200 per ton by 2035. The red line here, 

showing the collar going through the roof. The blue line below is 

the estimated price of cap and trade. So since price control is actually higher than the projected price, in no year will it actually help 

control prices. 
6 

Finally, cap and trade represents a giant $3.6 trillion gas tax on 

America’s drivers, farmers, truckers and small business. Senator 

Hutchison and I recently put out a report documenting this gas 

tax, and Barbara Windsor, head of a local regional trucking company, joined us when we released this report and will testify later 

today on how the cap and trade tax will hurt truckers. 

Our analysis is simple: multiply the price per gallon from cap 

and trade times the amount of fuel America is expected to use. As 

the chart shows, cap and trade will impose what feels like a $3.6 

trillion gas tax on gasoline, jet and diesel fuel. And I will submit 

the rest of my statement for the record. 

[The prepared statement of Senator Bond was not received at 

time of print.] 

Senator BOXER. Thank you. 

I ask unanimous consent to place into the record a letter from 

AARP, National Consumer Law Center, Public Citizen, and Consumer Union: ‘‘Dear Senator Boxer, we are writing to commend you 

for your leadership on protecting residential consumers in S. 1733,’’ 

and put the letter in the record. 

[The referenced information follows:] 
7 
8 
9 

Senator BOXER. And I want to say now that Senator Klobuchar 

is going to speak; she has been taking the lead, and we are going 

to continue to work on this as we move forward. 

Senator Klobuchar. 

OPENING STATEMENT OF HON. AMY KLOBUCHAR, 

U.S. SENATOR FROM THE STATE OF MINNESOTA 

Senator KLOBUCHAR. Thank you very much. 

And thank you to the witnesses. 

I just wanted to thank you, again, Madam Chair, for convening 

these long hearings with eight panels and 50 witnesses. I just 

wanted, with Bob Stallman here, to acknowledge the agriculture 

work that is still going on with this bill. You know, the agriculture 

Senators are going to work on this outside of this committee and 

bring forward some ideas to the floor. 

But I will say in this bill—we did increase the proportion of domestic offsets in the bill from 50 percent in the House bill to 75 

percent in this bill. This is good for our agriculture and forestry 

sectors because it will result in more opportunities for our farmers, 

who are also able to increase allocation of the allowances from .2 

percent in the House to 2 percent for the first 2 years, and [unclear] percent for the entire life of the bill. 

So we are working very hard on the agriculture issues, seeing 

farming as part of the solution here. Farmers grow things. That is 

good for the environment. We want to do it the right way. 

So I am looking forward to hearing from the panelists. 

Thank you very much. 

Senator BOXER. Senator Voinovich. 

OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, 

U.S. SENATOR FROM THE STATE OF OHIO 

Senator VOINOVICH. Thank you, Madam Chairman. 

Serious problems deserve serious solutions. This bill lacks analytical support and open dialogue. Even much less significant or 

costly bills are subject to EIA and EPA analysis well in advance 

of the final committee actions. Lesser bills are subject to legislative 

hearings; not so here. Lesser bills are designed to meet somewhat 

realistic assumptions about the real state of technology. Not so 

here. 

I would like to put in the record an editorial from the Post referencing Senator Cardin, called The Public Fisker: Washington 

Can Help Build Plug-in Hybrids, But Who Will Buy Them? At the 

end of the article, it says, ‘‘Such are the risks of the Obama administration policy which seems to be fertilize the fields of green technology and hope at the end at least some of it sells.’’ 

This may be the single most significant piece of legislation that 

has come before the committee, touching every sector of the economy and having immense energy, economic, environmental and national security consequences. At this point, we do not fully understand how this legislation will impact on the price, supply and reliability of electricity, gasoline and other commodities which millions 

of Americans depend on every day. 

Once more, we don’t know if the bill will have an appreciable impact on climate change. On Tuesday, Administrator Jackson admit-
10 

ted that they had not done a complete analysis of this bill. We are 

talking about a bill that is going to go to 2050. You would think 

that we would wait for that data. 

Madam Chairman, I have a Washington Post article, Economics 

of Climate Change at the Forefront. I will submit that, which talks 

about the argument over estimates. 

[The referenced information was not received at time of print.] 

Senator VOINOVICH. The best information that we have right now 

is an analysis by the American Council for Capital Formation, 

which says this bill is an economic disaster. The fact of the matter 

is if you look at this bill, for examples, States like Ohio are going 

to get 70 percent of our allowances taken care of, and your State 

of California is going to get 140 percent. That means a shifting of 

$385 million from some States to other States around the country. 

And I have a poster here, a chart. If you see the votes in the 

House, folks, these are the people who voted against the bill in the 

House. Here are the States of the people who voted for it in the 

House. And you can see the regional differences in the United 

States. Here we are. I am in the Midwest, the manufacturing sector of this country, and we have problems with it. But those over 

here, they think it is OK. California is going to make out like a 

bandit with this legislation. 

So Madam Chairman, I think it is time that we—I am going to 

finish up. 

Senator BOXER. You can ask unanimous consent for a minute if 

you want. 

Senator VOINOVICH. All right. I think that we need a sense of bipartisanship in this committee, and I don’t think we have it. You 

complained the other day that Senator Warner is no longer on the 

committee. 

Senator BOXER. I did. 

Senator VOINOVICH. I ask, does your definition of bi-partisanship 

mean someone that agrees with you? I mean, this is a big bill. We 

need to really get at it. I am willing to work with the people on 

the other side of the aisle, but to jam this thing through here is 

not going to be good, and America is going to be very, very upset 

about it. 

And I will tell you one thing, the people in Ohio will be very 

upset about it. 

Senator BOXER. I will take my 2 minutes now. 

If you had asked for unanimous consent, I would have been 

happy to grant it. 

Now, here is my definition of bi-partisanship: working together 

like we do on the highway bill, like we do on the water bills. We 

know how to work together. Senator Inhofe and I are working together right now, along with other colleagues. We would have had 

an extension of the highway bill, Senator Voinovich. You were the 

only one on this committee to object to it. 

Now, here is the situation. I think the speech you just made is 

flat wrong, and I want to explain why. I have the EPA analysis, 

and they say there are barely any regional differences whatsoever. 

Senator VOINOVICH. It is not a complete analysis, and the head 

of the Department said it is not a complete analysis. 

Senator BOXER. I did not interrupt you, Senator. 
11 

Senator VOINOVICH. Well, you are editorializing on my comments 

as you do everybody else’s comments here. 

Senator BOXER. Senator, I am taking my time because I didn’t 

take my 2 minutes in the beginning. I am taking it now. 

Senator VOINOVICH. Thank you. 

Senator BOXER. Thank you very much. 

I will ask unanimous consent to place into the record the EPA 

analysis, which says there are barely any regional differences, as 

well as put into the record the amount of extra costs for consumers 

which we are trying to offset. 

[The referenced information was not received at time of print.] 

Senator BOXER. Now, I hear what you are saying, all of you, on 

the other side. I have done everything possible to get some of you 

on the other side to work with us. I praised the meetings I had 

with Senator Voinovich in my opening statement. He said he wanted to meet, and we met. We have notes from that. He asked us for 

an analysis. We made it just for him. So to say that we haven’t 

reached out is ridiculous. 

Now, we are having an unprecedented number of legislative 

hearings. All of these witnesses, we have asked them to read the 

bill in its entirety. We have asked every witness to do so, and they 

are prepared to speak about the bill either for or against the bill. 

And we have an analysis that I would say is one of the most 

thorough ever done, and this is the reason why. Five weeks to do 

the Markey bill, 2 weeks to do the tweaks that we did. Most of our 

bill is very similar to theirs. So it is a 7-week process. 

And as far as the CBO, we have been working hand in glove with 

them to make sure that our bill is in fact deficit-neutral and maybe 

even has a surplus. It is the tradition of this committee that the 

CBO score is done after the mark, before the bill is on the floor. 

That is what this committee did under Republican leadership and 

Democratic leadership. And that is what we will do. 

I hope we don’t see a boycott of the markup of a landmark bill. 

That would be tragic, in my mind. We are ready to look at your 

amendments. We are ready to work with you on your amendments. 

We are ready to accept them if we feel they are good, and have 

votes on them, and you know, who knows how the votes will turn 

out? 

But all of this aggressive kind of argument I just think is misplaced. If you go back, and I have, to the history of this committee 

under Republican leadership and Democratic leadership, we are 

doing a tremendously thorough job, and I am very proud of the 

work that has come out of this committee. 

And all of the charges I hear from the other side just don’t hold 

up in the light of day. There is just fear mongering going on, and 

the fact is we are going to look at a bright new future if we move 

forward. 

So let’s just continue, and we will go now to Senator—— 

Senator INHOFE. Let me respond, if I could. I will take my second 

minute that I didn’t use. 

Senator BOXER. You have a minute left over. 

Senator INHOFE. Thank you very much, Madam Chairman. 

Let me just say this, in terms of the analysis and the time, let’s 

be realistic about it. When we had the Clear Skies legislation, we 
12 

started our first hearing in April 2003. We had them in May, June, 

July, all the way through the rest of that year, into February 2005. 

Finally, we ended up having a markup on March 2005. 

We had 2 years of analysis. We had 10,000 pages of analysis. 

And all of a sudden, it is outrageous for us to ask for even 2 

months of the same thing. 

So I think we need to look back to what we did when we were 

a majority on very similar type of legislation, Clear Skies, and it 

took 2 years before we could even have a markup. 

Senator BOXER. Senator, I so respect what you said, but we will 

have this. When we start our markup, we will put on the table the 

50 different modeling efforts that went into this, the 3 years of 

hearings, the panels of which we have three more today. 

Senator Whitehouse. 

OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, 

U.S. SENATOR FROM THE STATE OF RHODE ISLAND 

Senator WHITEHOUSE. Thank you, Chairman. 

Well, gentlemen, you see what we are up against. 

I will stand by my earlier opening statement. I do want to particularly welcome Fred Krupp, who has done such good work for so 

many years in this area, and my old colleague, John Rowe, who 

was the head of the New England Electric System in New England 

back when I was doing my public utility work years ago. It is a 

pleasure to see you here. 

We do look forward to working with any and every colleague who 

wants to work with us in good faith to solve problems that may be 

associated with this bill. The one thing I will say is that the pursuit of bi-partisanship should not and cannot lead us beyond the 

realm of reason, beyond the scope of science, and outside of the 

arena of good faith. But other than that, I think we are very open 

to discussion and to compromise. 

And I look forward to this. We are at the very beginning of a long 

and continuing process, and I think it is a vitally important one 

that we succeed at. 

Thank you, Madam Chair. 

Senator BOXER. Thank you, Senator. 

Senator Barrasso. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM THE STATE OF WYOMING 

Senator BARRASSO. Thank you, Madam Chairman. 

I would like to bring the committee’s attention to an article that 

ran in the British newspaper, The Telegraph, entitled Britain 

Faces Blackouts for the First Time Since the 1970s. The article 

stated that demand for power for homes and businesses will exceed 

supply from the national grid. That day is coming. It states that 

the gap between Britain’s energy needs and demand throws fresh 

doubt on the government’s assertion that renewable energy can 

make up for dwindling nuclear and coal capabilities. 

That could be the same result here in the United States if this 

House and Senate pass the Boxer-Kerry energy tax bill. 

The ideas that we are looking at say we need to eliminate our 

baseload power, power that runs 24 hours a day, 7 days a week, 
13 

meaning coal and natural gas and nuclear and hydropower. Some 

want to replace that power with intermittent wind and solar power, 

power that runs some of the time, but not all of the time. When 

the sun doesn’t shine or the wind doesn’t blow, the lights will not 

turn on. 

Someone on this committee just yesterday stated that a massive 

energy tax will unleash the American economy. History shows it 

will unplug it. An Investor Business Daily article entitled, Nuts to 

Copenhagen, highlighted the current unemployment in Spain. The 

article says Spain has been the green jobs success story, the example of what a green economy should look like. Well, the article then 

quotes someone from the U.K. Telegraph as saying, ‘‘Spain is sliding into a full blown economic depression, with unemployment approaching levels not seen since the Second Republic of the 1930s.’’ 

According to the CBO Budget Director, the results of the U.S. 

adopting these policies will be millions of jobs lost. Dr. Elmendorf 

has stated that the fossil fuels sector would mirror the massive job 

losses experienced by manufacturing industry beginning in the 

1970s. The Rust Belt experience will be repeated in communities 

across America if this bill becomes law. 

Dr. Elmendorf’s forecast for the U.S. is echoed in the Wall Street 

Journal editorial. 

I ask, as you said, we can go an extra minute. I ask unanimous 

consent for one additional minute. I could do it in 30 seconds. 

The editorial stated, ‘‘Cap-and-tax, this is a cap-and-tax delay,’’ 

written in the Wall Street Journal, ‘‘cap-and-tax will most hurt the 

rural and Midwest States that rely on coal-fired power and heavy 

manufacturing.’’ The editorial went on to state that ‘‘This energy 

tax bill is a huge new tax on carbon energy whose revenue will 

largely flow to the wealthier East and West Coast. Delaying the 

bill would be a major victory for the U.S. economy.’’ That is a quote 

from the editorial. 

We need to unleash the American economy, not unplug it. 

Thank you, Madam Chairman. 

[The referenced information was not received at time of print.] 

Senator BOXER. Thank you very much, Senator Barrasso. 

Senator Udall, I believe. 

Oh, Senator Carper, and then after Senator Carper speaks, he is 

going to speak again later when he introduces Dr. Kempton. 

OPENING STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE 

Senator CARPER. Thanks, thanks very much. 

To our panel, welcome. It is always interesting here. It is not always this exciting, and we are glad you could join us. 

I just want to respond briefly, make my opening comments to say 

some of my colleagues will be pleased to hear that the last quarter’s growth of GDP was 3.5 percent. And so I am very pleased to 

see what the Wall Street Journal reported on September 2nd. It 

will be interesting to see what they report today and tomorrow. 

To one of my colleagues who discussed the prospects for success 

for a new plug-in hybrid vehicle, I would just ask you to wait until 

you see it. And the idea to have a vehicle that looks that good that 
14 

gets 100 miles per gallon, I think they will sell just fine. And we 

are very hopeful that they will. 

Climate change is the challenge of a generation, my generation, 

our generation. We need to take bold action. The actions we will 

take now will impact generations to come. 

The best way I believe to bring jobs and prosperity back to our 

country is also the best way to end our dependence on foreign oil, 

clean up our air, protect the Earth for our children and for their 

children. By providing a technology-neutral cap on carbon, which is 

what Senator Kerry’s and Senator Boxer’s bills do, will harness the 

greatest source of power that we have in this country, that is 

American ingenuity. 

Giving a clean energy market signal will drive the production of 

offshore wind turbines, solar panels, plug-in hybrids and nuclear 

power plants components right here in America. 

Today, we will hear about some of the ingenuity. It is happening 

in Delaware regarding offshore wind, which can be replicated 

throughout our eastern and western shorelines, the Great Lakes, 

and the Gulf of Mexico. 

Today, we will also be talking about the gains that flow from 

changing our transportation sector. As many of you know, I feel 

passionately that an economy-wide effort to reduce greenhouse gas 

emissions cannot be successful without significant reductions in 

transportation emissions. I want to applaud the Chair for including 

our CLEAN-TEA legislation in her bill and for providing up to 3 

percent of allowances for clean transportation projects. 

While I believe—in fact I would ask unanimous consent for another 30 seconds. 

Senator BOXER. Yes. 

Senator CARPER. While I believe transportation deserves more allowances, 3 percent is a significant down payment. For a sector of 

our economy, transportation, which produces 30 percent of the CO2

emissions, it makes sense to me that we have a reasonable corollary in terms of allowances, and we are getting closer, so we are 

grateful for that. 

But it is clear that the Chair understands the role that public 

transportation, commuter rail, Amtrak, freight rail and smart 

growth can play in climate solutions. 

And with that having been said, I thank you for the extra 30 seconds and look forward to introducing a childhood friend of Tom 

Udall. 

Senator BOXER. Is that right? 

[Laughter.] 

Senator BOXER. Senator Udall. 

OPENING STATEMENT OF HON. TOM UDALL, 

U.S. SENATOR FROM THE STATE OF NEW MEXICO 

Senator UDALL. Thank you, Madam Chair. It is great to be here 

today, and it looks like we have a very well educated, wonderful 

panel before us. 

I am a little bit dismayed with the fear mongering we hear from 

the other side, talk about blackouts and those kinds of things. And 

it seems to me that what we should be looking at is what do—we 
15 

face if we don’t do anything. And those prospects, I think, should 

bring us all together as Democrats and Republicans. 

You know, if we don’t do anything and our economy starts grow- ing again, we are probably looking at $4-plus gasoline again. And 

it will probably go higher. Nobody wants it to go there, but that 

is probably where we are headed. We are definitely headed in the 

direction of dependence on foreign oil and greater dependence. We 

are approaching 70 percent. 

And so all of these things, and the road that we are headed down 

right now, have a big impact on our environment, a big impact on 

our economy, and as our panel showed us yesterday, and this is 

paramount, a huge impact on our national security being over-dependent on foreign oil. 

So I would hope that we would step back from a little bit of the 

fear mongering that is going on and try to be deliberative. We 

know the Senate is this great deliberative body. We settle back and 

deliberate and try to come together as Democrats and Republicans, 

and we have a great panel, I think, to make some suggestions to 

us today on how to move forward. 

So with that, I would yield back so that we can get to the panel. 

Senator BOXER. So we are going to get to our panel. And we will 

start off with Preston Chiaro, Chief Executive Officer, Energy Product Group, Rio Tinto. 

STATEMENT OF PRESTON CHIARO, CHIEF EXECUTIVE 

OFFICER, ENERGY PRODUCT GROUP, RIO TINTO 

Mr. CHIARO. Madam Chairman, members of the committee, I appreciate the opportunity to appear here today. 

As you said, I am Preston Chiaro, Chief Executive of Energy and 

Minerals for Rio Tinto. Rio Tinto is the largest diversified mining 

company in the U.S., with over 15,000 employees in this country. 

Our U.S. assets include coal operations in Colorado, Wyoming and 

Montana; copper in Utah; copper projects in Michigan and Arizona; 

borax in your home State, Madam Chairman, in California; talc in 

Montana and Vermont; and an aluminum smelter in Kentucky. 

The energy intensity and the very long lives of our operations expose the mining and metals sector both to the effects of climate 

change, as well as climate change policies. Unmanaged climate 

change is a threat to our assets, our shareholders and our employees, and also to civil society and political institutions. 

Rio Tinto is supportive of a strong global climate agreement for 

the investment certainty that it will bring. That will allow us to 

deliver value to our shareholders, products to our customers, and 

jobs for our employees. 

Our corporate climate position asks us to engage with governments in the development of climate policy in all the jurisdictions 

where we operate, to reduce our own energy use and greenhouse 

gas emissions, and to find low emissions pathways for our products. 

We engage both individually and through stakeholder groups, 

such as the U.S. Climate Action Partnership, which leverage our 

views and speak to the political center that is essential for a workable policy solution. 

We focus on three features when discussing climate policy. One 

is accelerating the development and deployment of low emissions 
16 

technology, including carbon capture and storage, also known as 

CCS. No. 2, minimizing the cost of climate policy. And No. 3, avoiding carbon leakage or the migration of emissions, jobs and industry 

from countries with regulations to those without. 

So let me say a few words about each of these. On technology, 

the accelerated development and deployment of low emissions technologies can lower the cost of meeting future emissions goals. Coal 

currently provides one half of U.S. electricity, and CCS technology 

can transform coal into a low emissions fuel. But this effort requires support for CCS demonstrations, a regulatory framework for 

carbon sequestration, financial incentives for deploying up to 72 

gigawatts of CCS, and a phased in performance standard which 

mandates CCS retrofits for all coal plants built from this point forward. 

We would like to commend Senator Carper and his Coal Working 

Group for their continued efforts to accelerate CCS. Our own commitment to CCS is demonstrated by our investment in the Hydrogen Energy California project in Kern County, a commercial scale 

hydrogen-powered electric generating facility that, when it is fully 

operational in 2016, will sequester most of its CO2 emissions. 

And while I am talking about technology, I should point out Rio 

Tinto was the world’s largest uranium producer last year. Nuclear 

power generates around 16 percent of the Nation’s electricity, and 

it is a proven low emission energy source which we fully support. 

Turning to costs, we believe integrated markets are unparalleled 

in their ability to leverage private sector investment and minimize 

the cost of emissions reduction. The Kerry-Boxer bill includes many 

key cost containment features, such as a broad, inclusive cap, 

banking and borrowing provisions, and widespread access to high 

quality domestic and international offsets. A continent-wide compliance market, starting with the United States and Canada, would 

be a great start in this direction. 

Finally, carbon leakage is the threat from the migration of emissions, jobs and industry from countries with climate legislation to 

countries without. We support the Kerry-Boxer use of output-based 

rebates to prevent leakage, and ask the committee for a sufficient 

transition for energy intensive and trade exposed industries. The 

outlook for a strong global policy framework is dim if it jeopardizes 

our industrial competitiveness. 

So in summary, we urge you to retain and support the features 

of support for low emissions technologies, cost minimization, and 

avoidance of leakage in any legislation as it works its way through 

the Senate. 

Thank you. 

[The prepared statement of Mr. Chiaro follows:] 
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Senator BOXER. Thank you so very much. 

And second, we turn to John Rowe, Chairman, President, and 

Chief Executive Officer of Exelon Corporation. 

Welcome. 

STATEMENT OF JOHN ROWE, CHAIRMAN, PRESIDENT, AND 

CHIEF EXECUTIVE OFFICER, EXELON CORPORATION 

Mr. ROWE. Thank you, Madam Chairman, members of the committee. 

I am Chairman of Exelon, which operates retail companies serving 12 million people in Northern Illinois and Eastern Pennsylvania with electricity. We also operate one of the Nation’s largest 

generating companies, which includes 17 nuclear units, by far the 

Nation’s largest fleet, and we are very proud of that. We produced 

Exelon 2020, to the best of my knowledge the only plan in the industry to reduce, offset or otherwise neutralize our carbon footprint 

by 2020. 

Exelon is a member of USCAP. I have served as a co-chair of the 

National Commission on Energy Policy, and I am a past Chairman 

of both the Edison Electric Institute and the Nuclear Energy Institute. I am proud to say that each of these organizations has supported in concept a cap and trade system to meet the challenge of 

climate change, although my testimony today is only on behalf of 

Exelon. 

We believe we need an economy-wide bill with realistic targets 

and timetables. We believe that because we think it will be the 

lowest cost solution to the climate challenge. We think we need an 

effective cost containment mechanism and allocation mechanisms 

that give allowances to local distribution companies to minimize 

the early cost to consumers. 

Exelon submits that the bill proposed by Chairman Boxer and 

Senator Kerry, as well as the Waxman-Markey legislation, each 

constitute a very good beginning, although we hope certain alterations will be made. 

From our standpoint, the most critical thing is the cap and trade 

system, and with the greatest respect for those colleagues who support nuclear and also those people here who support renewables, 

we have spent a great deal of time looking at the cost of various 

ways to reduce carbon. 

In Exelon 2020, and the key data is in our written submission, 

we attempted to the best of our ability to analyze the cost of each 

major way of reducing carbon emissions. The low cost ones are 

clear. They are energy efficiency. They are upgrades in existing nuclear plants. And they are more electric generation with natural 

gas. That is simply clear at the present time. The higher cost ones 

are renewables, my own favorite, more nuclear energy, and coal 

with carbon sequestration. 

Ladies and gentlemen of the Senate, we very respectfully submit 

that this problem must be dealt with, and we must deal with it 

with a mechanism that uses the market to hunt for the lowest cost 

solutions. This economy cannot afford to do everything the high 

cost way. 

Now, we believe that there are firm safeguards that can help address some of the objections that have been raised to cap and trade. 
22 

We support the allocation of 40 percent of the allowance to local 

distribution companies. We do that entirely because it benefits our 

customers. We support a definitive price collar on allowances. 

Again, we don’t want the economy to be speculating about how 

much this will cost in the early years. We need to know. While we 

would like to see it made more firm, we applaud the Chairman for 

endorsing a price collar in the bill. 

And with that, I thank the committee and the Senate for taking 

this whole issue seriously. Energy is important. Climate is important. And we can deal with this in a way the Nation can afford. 

[The prepared statement of Mr. Rowe follows:] 
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Senator BOXER. Thank you so much, Mr. Rowe. 

I am going to ask Senator Carper to introduce our next witness. 

Senator CARPER. Thank you. 

I am going to ask Senator Udall maybe to join me in this introduction because he has known Dr. Kempton for even longer than 

I have, and he has some great stories I am sure he could tell, but 

maybe he won’t. But I am just delighted that Dr. Kempton can be 

here today. 

He is a Professor in the University of Delaware, used to be the 

College of Marine Studies. It is marine policy at our university. 

And he was really among the very, maybe the first person that I 

ever talked to at the College of Marine Studies who shared with 

me the potential for generating an enormous amount of electricity 

off of the coast of our country in ways that will provide economic 

opportunity, creating jobs for the deployment, preparation and the 

manufacturing of the equipment, and the deployment of that equipment, to maintain that equipment, but also producing electricity in 

a very cost effective way that creates no carbon dioxide, no sulfur 

dioxide, no nitrogen oxide, no mercury, and is compatible with the 

environment. 

So we are grateful for the great work that you have done and the 

enthusiasm and encouragement you have provided for me and for 

others. 

Let me just yield briefly to Tom Udall for a word or two about 

his childhood friend, Dr. Willett Kempton. 

Senator UDALL. Well, I am not, Senator, I am not going to 

tell—— 

Senator CARPER. I have asked him to give the PG version, the 

PG version. 

Senator UDALL. The main thing I want to say is that Professor 

Kempton got here on his own merit. It had nothing to do with me, 

and I think you have learned, and I think the panel will end up 

learning, that he has much to say as to how we move forward on 

alternative forms of energy, which is a great resource off your coast 

and the whole Northeast coast. 

So thank you for the opportunity, but I will certainly ask him 

some questions and draw out his great expertise that he has in this 

area. 

Thank you. 

Senator CARPER. And Madam Chair, if I could just add in conclusion that several years from now, when people come to Rehoboth 

Beach, Delaware, and they look out to the east, they will see something sticking up above the horizon about half the size of my 

thumbnail, and it will be a windmill farm generating enough electricity for about 100,000 homes, and we hope to be joined in that 

effort by States from like Maryland and New Jersey as well. 

Thank you. 

Senator BOXER. Thank you. 

So with that fantastic introduction, Dr. Kempton, I hope you are 

not too nervous now, but please proceed. 
44 

STATEMENT OF WILLETT KEMPTON, PROFESSOR, 

MARINE POLICY, UNIVERSITY OF DELAWARE 

Mr. KEMPTON. It is hard to follow that introduction, but I very 

much appreciate it. 

So, Madam Chairman and members of the committee, I very 

much appreciate the opportunity to testify today. 

Senate bill 1733 aims to create incentives to lead the development of new technologies for power with less or no release of CO2. 

Other witnesses will speak to nuclear, carbon capture and storage 

and so forth. I will concentrate on new technologies that are carbon-free, very large, and near cost competitive today. 

These provide an important regional balance on power and offer 

substantial economic development employment opportunities, as 

Senator Carper mentioned. As we know, the Great Plains have 

abundant wind resources. The Southwest has concentrating solar, 

both large and near cost effective. What is available for the U.S. 

coastal regions, which many members of this panel represent, of 

course? 

My written testimony, which has been submitted, cites Federal 

energy studies comparing offshore resources adjacent to the East 

Coast, Great Lakes, Gulf and Pacific Coasts. Those studies show 

that offshore wind is a very large resource. It is actually larger 

than other ocean renewable power that you hear about, waves and 

so forth. It is also over twice the power resource of all U.S. offshore 

oil. It is a very large resource. 

Now, our group has made a more detailed estimate of the total 

offshore wind resource adjacent to the mid-Atlantic coastal States 

from North Carolina through Massachusetts. That is attached as a 

submitted supporting testimony. 

The conclusion of this is that the practical, as we looked at real 

technologies that exist, water depths, bird flyways, and so forth, 

the practical offshore wind resource of the mid-Atlantic is enough 

to power all electricity of that region, all gasoline for automobiles, 

and all building heating fuels for the region. Those together use 

just half the resource. 

And if we were to do that, this is a paper and pencil study. I am 

not saying that we would build all that out and not use other 

sources, but if we were to do that, that would reduce the region’s 

CO2 emissions by 68 percent. 

I calculate also the industrialization employment impacts of producing enough gigawatts to do this at 100 percent of electricity 

plus 100 percent of vehicles electrified in the mid-Atlantic, so it 

would require 54,000 offshore wind turbines, each with a capacity 

of five megawatts, average production of two megawatts. 

To do this within 15 years, a challenging target, requires 10 factory complexes, each employing perhaps 500 people, plus suppliers, 

support jobs and so forth. This calculation, spelled out in my written testimony, shows that very substantial reductions in CO2 are 

possible in short timeframes like 15 years by redeploying some of 

our existing and rusting industrial infrastructure. 

This concrete calculation for one U.S. region supposedly lacking 

in renewable resources also suggests that carbon reductions of S. 

1733 are achievable. 
45 

I briefly review how a regional cap and trade regime, the regional greenhouse gas initiative, like the one before this committee, 

has helped to lead to the first U.S. power contract for offshore 

wind. In Delaware, we face a choice among power plants, and three 

commercial bids were submitted, natural gas, offshore wind, and 

IGCC coal. Costs were compared by the State Commission over the 

lifetime of each generator, which means they could take the carbon 

costs estimated under RGGI and incorporate that into the calculation of total cost, as I believe companies will be able to do with this 

bill, especially if there is a collar. 

Ultimately, the offshore wind bid was selected by the Delaware 

Public Service Commission. It was more price stable than natural 

gas, although not necessarily lower cost, and it was less expensive 

on a per megawatt hour basis than IGCC coal. 

As a result, the State has a head start on new technology, as 

well as immediately creating 500 jobs during construction, 70 O&M 

jobs persisting over the 25 years of operation. 

There are a couple of examples I draw from that. One is even 

modest fees, because the RGGI fees are quite a bit smaller, even 

modest fees as a result of a cap and trade system can tip the balance when you have near cost competitive new technologies, in addition to other policies that were in place, of course. And also, the RGGI carbon fees, estimated at a level of about $10 

a ton over the life of the project, were too small to make carbon 

sequestration cost effective, but it was enough to motivate a plant 

which could have that added later. 

Senator BOXER. Please wrap up now. 

Mr. KEMPTON. I have a summary. 

Each region in the U.S. has at least one source of carbon-free 

power that is larger than that region’s needs. It is being produced 

commercially at utility scale and is near cost competitive. A new 

one is wind along the East Coast. As I said, it is sufficient to run 

the East Coast. 

Based on regional experience, a carbon pricing system like S. 

1773, in combination with other policies, can tip the economic balance toward new technologies which are important for the Nation’s 

economic growth. 

Thank you. 

[The prepared statement of Mr. Kempton follows:] 
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Senator BOXER. That was a good summary. Thank you. 

Our next witness will be introduced by Senator Max Baucus. 

OPENING STATEMENT OF HON. MAX BAUCUS, 

U.S. SENATOR FROM THE STATE OF MONTANA 

Senator BAUCUS. Thank you very much, Madam Chairman. 

I would like to introduce Bob Winger. Bob is President of Local 

11 Boilermakers in the State of Montana. He travels all over the 

country, frankly, all the ways from Billings, and travels all over installing boilers, which is helping lots of different technologies 

around the country. 

He is also an avid outdoorsman. All of us in Montana are; we 

hunt and fish. And as Bob knows, we are right in the middle of 

hunting season. I am sure, although he very much appreciates 

being here, he also would like to be back home. 

[Laughter.] 

Senator BAUCUS. And I think he will probably head home pretty 

quickly. But he is a terrific guy, I have known him for a while. And 

I am very glad, Bob, that you are here. 

So I just ask that the rest of the panel just join me in welcoming 

Bob Winger. He is a very good man. 

I might say, Madam Chairman, that we are here, and the interest we Montanans have is pretty deep, especially as we transition 

to a clean energy economy, and we are concerned about transportation and also international actions. 

Our State has a lot to gain and a lot to potentially lose from this 

transition if it is not properly structured. The Department of Energy estimates that Montana’s wind energy, and it was very interesting to hear about offshore, Dr. Kempton, but Montana’s wind 

energy potential ranges from good to excellent to superb, but it 

lacks some of the transmission infrastructure required to carry that 

renewable resource to market. And the thought occurred to me as 

I listened to you, Dr. Kempton, my gosh, with all those windmills 

offshore, is how are we going to get that power onshore. 

Our State’s vast coal reserves have been the lifeblood of our Nation’s electricity generation system for decades. In fact, our Governor is fond of saying that we have more BTU in Montana coal 

than there is in the Middle East. There is a lot of energy locked 

up in Montana coal. 

We provide low sulfur coal that allows coal-fired utilities to meet 

tough sulfur dioxide standards. Our BTU content might not be 

quite like our water content. We have low sulfur coal, which we 

deeply are very proud of. Our coal is plentiful, and it is low cost. 

It is low cost input for generating electricity, but unless we take 

steps to develop clean coal technology we run the risk of excluding 

coal from our energy mix the next century, which is clearly a risk 

we can’t afford. 

I am very pleased that the Chairman’s mark advances the development of clean coal technology. Specifically, the package provides 

for advance payment of bonus allowances to a greater number of 

carbon capture and storage projects than does the House package. 

And I want to thank Senator Carper for helping to negotiate, and 

Senator Udall helping to negotiate that package. 
61 

This will speed the commercial development of this technology 

and reduce investment risk. 

The coal package in the Chairman’s mark also makes some 

changes to the performance standard for new coal-fired power 

plants by delaying the early trigger, but accelerating the backstop 

for this standard to take effect. I think those are two important 

provisions. 

There were compromises on both sides in this package, and I am 

proud to lend my support for those provisions. And I know that 

each of my Democratic colleagues share that view. 

The coal provisions in this bill are one example of where the middle lies on climate legislation, and I hope that we can mirror our 

success in this section in other parts of the bill as we move forward. 

So thank you, Madam Chairman. I am glad you got what I am 

saying. 

Senator BOXER. I sure did. 

Senator BAUCUS. I look forward to hearing from our witnesses 

today. 

Senator BOXER. I did, Senator, absolutely. And we have some 

new information we are going to share with your staff, which may 

make you very happy in terms of what the reduction is in the bill. 

But we will talk more about that. I so appreciate your being here. 

Mr. Winger, it took a little while, but I think it was important 

to hear from Senator Baucus, so please go ahead. 

STATEMENT OF BOB WINGER, PRESIDENT, INTERNATIONAL 

BROTHERHOOD OF BOILERMAKERS, LOCAL 11 

Mr. WINGER. My name is Bob Winger. I am President of the 

International Brotherhood of Boilermakers, Iron Ship Builders, 

Blacksmiths, Forgers and Helpers, Local 11, located in East Helena, Montana. 

On behalf of the members of my Local and our unions International President Newton B. Jones, I want to thank Chairwoman 

Boxer, Senator Baucus and the members of the committee for the 

opportunity to testify at this important hearing. 

I have been a boilermaker for 28 years. Boilermakers are a highly skilled, highly paid trade: welding, rigging, fitting steel in heavy 

industry. I have worked in over 20 States, building and maintaining power plants, refineries and paper mills. 

It is a career that has allowed me to be solidly in the middle 

class with good health insurance, a fixed pension, annuity, and 

above average wages, enabling me to help two daughters through 

college, and the youngest is in her third year. Good blue collar 

work. 

Opportunities for Americans to get and hold these types of jobs 

have disappeared. These are the types of jobs that can flourish 

with the passing of this legislation. Coal-powered generation is 

clean, cheap, dependable and job intensive. Over the years, the coal 

industry has met the challenges of cleaning up emissions: SO2 with 

scrubbers, NOx with SCRs, particulates with bag houses, and in 

some States, including Montana, mercury reduction units. 

As emissions were identified and regulations enacted, solutions 

were created. Those solutions are the jobs this country desperately 
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needs. I will take scrubbers as an example. As soon as the rules 

identifying levels of SO2 that must be met and a reasonable timeframe was set, American ingenuity kicked in. General equipment 

and methods are designed. The equipment is engineered to fit specific power plants. Blueprints are drawn up. These are good white 

collar jobs for our college graduates. 

Steel is made in steel mills then sent to shops where it is fabricated into parts, which are shipped to the plants, where they are 

put together. The new unit is then put online, reducing the targeted emissions, very job intensive through the blue collar sector. 

As scrubbers were built, they became cheaper and more efficient 

through lessons learned. Once these add-ons to existing plants are 

built, they must be operated and maintained, making more jobs. 

This same process will work for carbon capture and storage. 

There are over 600 coal-fired plants in the U.S. Think of the millions of man years of work to build, operate and maintain carbon 

capture and storage units on these plants. 

Happily, this legislation addresses the need to help our main 

baseload power generation source, coal, to clean up. Any legislation 

to reduce greenhouse gases that does not recognize the reality that 

coal is, will and should be our primary fuel for power generation 

is misleading. 

We need to take the lead in developing the technology and building the carbon capture and storage units. As leaders, we can sell 

our technology to the developing countries, resulting in actual global reduction of CO2. This legislation sets the ground rules, thereby 

removing the uncertainties. In Montana, we had the Highwood 

Generating Station, a 250-megawatt fluidized bed coal-fired power 

plant forced to be canceled by lawsuit after lawsuit in an uncertain 

regulatory environment. This plant would have been one of the 

cleanest in the Nation for the pollutants already regulated by the 

EPA. 

In addition, I was assured by the developers, Southern Montana 

Electric, that they would install CCS when it became commercially 

available. The developer cited the aura of uncertainty surrounding 

U.S. regulations of CO2 as a key factor in their decision to cancel 

the project. Building this plant would have employed boilermakers 

for about 4 years, peaking at about 160. Its replacement? A natural 

gas peaking unit that will employ four boilermakers for about 3 

weeks. 

I have been talking in job numbers relating to boilermakers. 

That same 250-megawatt power plant would have required hundreds of electricians, pipefitters, iron workers, operators, carpenters, millwrights, sheet metal workers, and laborers. Add to the 

secondary jobs in the communities where the construction takes 

place, and we are taking jobs recovery. 

Our International has recognized the need to train and recruit 

workers. In cooperation with PP&L Montana, we are building a 

training center in Colstrip, Montana. This borders the Northern 

Cheyenne and Crow Reservations. We plan to train applicants in 

pre-apprentice programs, basic welding and other skills necessary 

for a career in our craft. 

I am not an expert on this or any legislation. I rely on my Government Affairs Department for that expertise. I am an expert on 
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being employed providing energy to our country, as well as the satisfaction of meeting environmental challenges during my career. 

Please get this legislation moving with rules and deadlines to remove the uncertainties. Get the investments going. Supply the incentives to jump start the technology through pilot projects. Keep 

the wages even and fair, utilizing prevailing wages through the 

consistent application of the Davis-Bacon Act. Protect our manufacturers by preventing carbon leakage at the border. Don’t forget our 

smaller refineries as we divvy up the allowances. 

Again, I want to thank you for this opportunity. 

[The prepared statement of Mr. Winger follows:] 
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Senator BOXER. Thank you for that excellent testimony. 

Our next speaker is Fred Krupp, President, Environmental Defense Fund. I want to note that he has headed EDF for 24 years, 

and we welcome you. 

STATEMENT OF FRED KRUPP, PRESIDENT, 

ENVIRONMENTAL DEFENSE FUND 

Mr. KRUPP. Thank you, Madam Chairman and Senators. I am 

honored to be here today as you take one more step toward passing 

U.S. climate change legislation. 

In my testimony before you in August, I focused on three major 

points. We can achieve strong emissions targets for 2020. We can 

meet those at low cost with technologies that are already available. 

And we can grow the U.S. economy at the same time. 

Today, I want to add more evidence that capping pollution will 

sustain growth in our clean energy sector and help put the U.S. 

back in the driver’s seat of our global economy. 

Earlier this year, EDF launched LessCarbonMoreJobs.org, a 

snapshot of clean energy companies across the country. To date, we 

have mapped out thousands of companies in 22 States that are 

poised to prosper under a Federal cap on carbon. I encourage you 

to explore the site. You will see that many of the traditional American manufacturers are finding new life for their products in the 

burgeoning market for low carbon energy. 

In addition, EDF engaged a respected market research firm to 

survey growth in this sector for the past few years. The results are 

astounding. Here is what we found. In 2008, 42 percent of companies responding said that their sales had grown during the past 2 

years. Another 42 percent were holding steady, and only 16 percent 

had seen a decrease. 

Today, the numbers are even better. In August 2009, more than 

half said that their sales had increased. Another third were holding 

stead, and only 14 percent had seen a decrease. Many of those reporting growth planned to hire more workers, and this is during 

the greatest economic upheaval the United States has seen in decades. 

Clean energy is a bright spark in our economy, but we need to 

do more to make it an engine of sustainable economic growth in 

America and help our companies out beyond our borders. The U.S. 

historically has been a leader in the world economy because of our 

ability to innovate, to get there first. But the race no longer ends 

with a patent. You have to produce the product to capture market 

share. 

We have always been a leader in intellectual property. U.S. inventors hold half of all clean energy patents for much of this decade. Japan was second, with 29 percent, and Germany third with 

only 9 percent. Yet our leadership in intellectual property today is 

not translating into leadership in manufacturing. Here is an example. We hold more than 40 percent of the patents for solar energy 

technology. China holds less than 5 percent. Market share used to 

track that trend line. The United States had 28 percent of the global market share for solar sales in 2001, and China owned only 1 

percent. By 2008, though, the market share had flipped. The U.S. 

held only 6 percent, while China grew to 29 percent. 
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Winning the patent race is not enough. We must convert that intellectual capital into market share. We need to create the internal 

demand that will give U.S. companies the customers they need to 

grow, and we can do that right now by capping carbon emissions. 

The stakes are high. The annual clean energy market could reach $500 billion in 2020 with a global effort to curb carbon emissions. The race to gain advantage has begun, and we need a U.S. 

cap to win that race. 

I have led EDF now, Madam Chairman, this month for 25 years, 

and over that time, I have become a strong believer in the power 

of American entrepreneurs when given a clear goal to meet and the 

flexibility to determine how to get there. 

S. 1733 sets a strong target for reducing pollution. It rewards 

companies who can achieve the goal. It holds accountable those 

who don’t. It is the same formula that tackled acid rain under the 

Clean Air Act, faster and at lower cost than anyone predicted. 

We know from rigorous analysis that we can meet our climate 

goals with existing technologies at low cost. We know that we can 

build those technologies here in the U.S. and sell them throughout 

the world. 

Solving problems, as Bob just said so eloquently, is how we create new industries. It is how we create jobs. Let’s roll up our 

sleeves and do it. 

Thank you. 

[The prepared statement of Mr. Krupp follows:] 
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Senator BOXER. Thank you very much, Mr. Krupp. 

Our next two witnesses, we welcome them. They were invited by 

the minority. Mike Carey, President of the Ohio Coal Association, 

a trade association that represents stakeholders involved in Ohio’s 

underground and surface coal mining production. I don’t know if 

Senator Voinovich wanted to introduce you, but let me assure you 

that you are welcomed here, and please proceed. 

Senator Voinovich, would you like to give a further introduction 

to Mr. Carey? 

He doesn’t want to give you and introduction, so we welcome you 

and please go right ahead. 

STATEMENT OF MIKE CAREY, PRESIDENT, 

OHIO COAL ASSOCIATION 

Mr. CAREY. Madam Chairman, Ranking Member Inhofe, members of the committee, my name is Mike Carey. I am President of 

the Ohio Coal Association. I also serve as the Technical Vice Chairman of the Ohio Coal Development Technical Office, and I sit on 

the National Coal Council, though I am not speaking on their behalf today. 

I want to thank you for inviting me for the opportunity to speak. 

The points I will make are presented in greater detail in my written testimony. 

I represent the coal industry, its companies, its workers, as well 

as the communities across Appalachia that depend on coal for their 

livelihoods. According to the Pennsylvania State University, each 

coal miner supports up to 11 jobs in their community, from truckers to mechanics to railroad employees to small business owners. These coal miners in Ohio average about $64,000 a year in in- come. That is $25,000 higher than our State’s average. These high 

paying jobs fuel our local economies, our police forces, and our public works projects. We believe that the Kerry-Boxer bill will kill our 

jobs, devastate our communities, and bankrupt our region, and consequently threaten the rest of this Nation. 

Coal supplies 52 percent of America’s electricity. It is our most 

abundant and least expensive domestic energy resource. No one 

can predict the potential energy and economic disruptions that will 

ensue when you take coal off the table in such a rapid and drastic 

fashion. 

We are told not to worry. The green jobs are on the way to rescue 

us. But a recent study of green jobs from scholars at four universities have included that they tend to be low paying, clerical, bureaucratic, administrative positions that do not produce economy 

enhancing goods or services. 

Let me tell you what a coal mining job does. It provides a steady 

above average wage, benefits, a sense of community, as mines last 

many decades in their regions. While we applaud the efforts of this 

legislation to include provisions that aid the future and transition 

of coal, in a carbon constrained economy, the bottom line is that 

this bill does kill the coal industry. 

Bill proponents tout carbon capture and storage as coal’s future. 

However, simply throwing billions of dollars at CCS does not ensure that the technology will be available prior to 2020 or 2030. 

And according to this bill, it is the sense of the Senate that the 
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CCS needs to be fully developed by 2030. Unfortunately, that 

comes 18 years too late since the reductions begin by 2012, so utilities will have already begun to fuel switch. 

CCS technology is still in its infancy and has not been commercially deployed. Importantly, this bill does not roll back the emission caps if CCS does not work. 

Furthermore, I am not here to argue the science of coal CO2

emissions, but I would like to point out that this bill ignores two 

other sciences: math and economics. Shutting down the entire U.S. 

coal industry for 100 years only changes the CO2 atmospheric levels by 3 percent, which is roughly the same difference between 

today and CO2 levels of 5 or 6 years ago, according to the U.S. 

EPA. 

In response to a question from Senator Inhofe at an earlier Senate hearing, EPA Administrator Lisa Jackson admitted that curbing U.S. CO2 emissions would have no significant impact on atmospheric CO2 levels. Moreover, Kerry-Boxer doesn’t require the developing countries like China, India, Mexico to do anything to curb 

their CO2. So as U.S. companies continue to outsource their jobs to the developing world and avoid expensive emission caps, they will also 

outsource their emissions. Therefore, Kerry-Boxer would not reduce 

emissions as much as it would merely displace them. 

Even NASA’s Jim Hansen, perhaps the most outspoken of those 

concerned about CO2, labeled the Waxman-Markey bill a ‘‘counterfeit climate bill.’’ And he said, ‘‘It is no more fit to rescue our climate than a V–2 rocket was to land a man on the moon.’’ 

An analysis of the EPA prepared for Senator Feingold, for example, shows that California would receive a windfall at the expense 

of Midwestern States like Wisconsin and that of my own Ohio. 

Finally, we urge this committee to acknowledge that the threat 

of the looming EPA regulation of CO2 is a canard. EPA CO2 regulation is an optional policy decision being driven solely by the Administration. The Supreme Court only ruled in Massachusetts v. EPA 

that the EPA may regulate carbon dioxide. It did not rule that it 

must, and the Administration can decide not to act. If Congress is 

truly frightened about the prospect of the EPA regulating CO2, then it should simply amend the Clean Air Act to prohibit it. 

Finally, what sorts of energy and environmental policy should 

Congress explore instead of cap and trade? We believe to promote 

all forms of domestic energy, encourage energy efficiency, avoid 

policies that favor one over another, reduce energy costs to the consumers, and protect existing jobs. 

Madam Chairman, I thank you for the opportunity to speak, and 

I look forward to the questions. 

[The prepared statement of Mr. Carey follows:] 
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Senator BOXER. We appreciate it. 

Mr. Stallman, you are next. Let me give you a proper introduction. Bob Stallman is the President of the American Farm Bureau, 

a federation, and he is a rice and cattle producer from Columbus, 

Texas. 

Welcome, sir. 

STATEMENT OF BOB STALLMAN, PRESIDENT, 

AMERICAN FARM BUREAU FEDERATION 

Mr. STALLMAN. Thank you, Madam Chairwoman, Ranking Member Inhofe, members of the committee. It is my pleasure to be here 

to testify on behalf of the American Farm Bureau Federation, the 

Nation’s largest general farm organization. 

Earlier this year, I testified before this committee to outline our 

concerns with cap and trade proposals. The Farm Bureau actively 

opposed legislation that came before the House of Representatives 

in June. We have similar concerns about S. 1733 and are opposed 

to that legislation as well. 

We have a number of fundamental concerns about cap and trade 

and the way such a program is laid out in the House and Senate 

bills. The costs of cap and trade are significant. Farmers and 

ranchers will pay higher fuel, feed and fertilizer costs. Families will 

be hit hard with energy costs alone growing by as much as $1,870 

per household. Adding in higher food prices could mean costs of 

nearly $200 billion a year to our citizens. 

Both the House bill and the Senate counterpart have the effect 

of creating an energy deficit by restricting the use of fossil fuels 

and not laying out any effective program for replacing those fuels. 

Nowhere in the bills is there a pathway to reinvigorating the Nation’s civilian nuclear energy sector to the extent assumed in the 

EPA projections. 

These bills also seem to be predicated on an overly optimistic scenario for the deployment of carbon capture and storage. It should 

be pointed out that the last nuclear power plant built in the United 

States started construction in 1977; that there are no current commercially available viable carbon capture systems in place for coalfired plants; nor is there international trading in carbon offsets of 

the scale and magnitude contemplated by the bill in existence 

today. 

Advocates for cap and trade are strident in their objections to 

coal and the use of other fossil fuels. Clearly, they are entitled to 

their opinions. But it is not enough simply to be against something. 

You must be for something as well. A mandatory cap and trade 

program will effectively create a hole in our energy supply. It is 

Congress’ job to plug that hole, not simply create it, by passing legislation that is realistic, straightforward, and that sets out a cost 

effective, pragmatic path for our economy and our energy future. 

Unfortunately, S. 1733 fails to do that. Under virtually any scenario, the U.S. agricultural sector will shrink, either through payments to landowners to take land out of growing crops and to grow 

trees instead, or through producers going out of business because 

they cannot compete in the new cost structure imposed on the sector. 
191 

Let me be clear. It is the sharp movement of land out of crop production into forestry that provide the revenue effects for agriculture the Administration has been discussing relative to this legislation. Those effects are in the EPA analysis. That also means a 

downsizing of American agriculture’s capability to produce food. 

That outcome will inevitably mean higher food costs for consumers. 

An additional problem is that, at least for the present and unlike 

the House bill, S. 1733 does not specifically provide a place for agriculture and forestry in its offset program. Instead, the bill places 

the entire offsets program at the complete discretion of the President, with no sector being assured that any of the offset opportunities this might provide will even be eligible to participate in the 

program. In this, S. 1733 takes a step backward from the House 

bill. 

As U.S. agricultural production declines, world dependence on 

the U.S. food safety net will be compromised. This is especially disturbing because estimates are that we will need to produce more 

food, not less, to feed a growing world population. U.S. agricultural 

producers facing a cost structure that is higher than our overseas 

competitors will see some of our markets disappear. 

The irony of this is that U.S. producers are among the most efficient in the world. Per unit of product, our greenhouse gas emissions are among the world’s lowest. Yet, we will be reducing that 

production while other production that is less efficient will increase, with some of that production being outsourced to Brazil, 

Russia, China, India and other developing countries, we would 

even see an increase in worldwide greenhouse gas emissions from 

food production. 

The Farm Bureau is not opposed to a revitalized American energy policy. We want to see expanded use of renewable fuels, in 

particular biofuels, to help make our Nation cleaner, more secure, 

and more energy independent. But there is a better way than a 

mandatory cap and trade program that imposes large new energy 

costs on agriculture and the rest of America’s economy. 

Madam Chairwoman, the Farm Bureau stands ready to work 

with you and members from both sides of the aisle on these legitimate issues. If members insist, however, in imposing restrictive 

costly programs that will harm U.S. agriculture now and in the future, we will continue to voice our strong opposition to such an approach. 

Thank you for the opportunity to testify. 

[The prepared statement of Mr. Stallman follows:] 
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Senator BOXER. Thank you so much, Mr. Stallman, and we look 

forward to working with you and with Senator Lincoln as her committee takes a look at some ways we can do even more for agriculture because we have done quite a bit, but we are open. 

And as you know, this bill is going to—once it gets out of this 

committee, and we hope that it does, we will then be working on 

the floor with all Members from every State in the Union to make 

this a stronger bill. 

I wanted to mention that there is an article in the West Virginia 

paper today that says, ‘‘Climate bill adds more sweeteners for coal 

industry,’’ and Senator Baucus mentioned Senator Carper, I just 

want to say again how grateful we are to you, and Senator Baucus, 

to your staff, to Senator Specter’s staff, Senator Udall’s staff. 

If I leave anybody out, of course, my own staff and Senator 

Cardin’s staff, everybody really worked together, whether they 

were for the sweeteners or not for the sweeteners, I have to say it 

is a delicate balance, and that is why, you know, Senator Baucus 

talks about in many ways the sweet spot, and there is as sweet 

spot for this committee. There is a sweet spot for the floor. There 

is as sweet spot for conference. It is a long road. 

Let me say, Mr. Carey, you made a very eloquent case for, you 

know, not really changing much, and I understand that. You are 

very eloquent on the point. But let me tell you the problem with 

that. I just want to try to reach you. You point out the court didn’t 

say that you had to act. It said if there is a danger, you have to 

act. 

And the EPA, under the Bush administration, we found the documentation where there was an endangerment finding made by the 

Bush administration, by the scientists there. It was blocked from 

getting out, and now we got it, we found out what it is, and it is 

very close to the endangerment finding they are making today with 

the Obama administration. 

There is not a difference between the Bush administration and 

the Obama administration scientists on the dangers facing America 

if we do nothing. 

Now, here is the thing, Mr. Carey and others, I am going to ask 

a few of you about from the business community. It isn’t as if nothing is happening. So much is happening on this subject. You know, 

the one-thousandth Mayor signed on to climate initiatives for their 

cities, meaning that the cities all over the country are acting already to reduce carbon. We have 34 States that are acting—States, 

you’d be surprised to hear if I read them all off to you. Every single 

region, many of them already, 21 participating in cap and trade 

systems. 

So we are sitting here as if we are the be-all and the end-all. I 

don’t believe we are at all. We are following an amazing move. And 

these States are Washington, Oregon, California, Montana, Utah, 

New Mexico, Arizona, Illinois, Iowa, Kansas, Michigan, Minnesota, 

Wisconsin, Delaware, Connecticut, Maine, New Hampshire, New 

Jersey, Nevada, Vermont, Rhode Island, and that is just a few. And 

they are beginning cap and trade system. 

So my question to, I am just going to just say the first two witnesses we heard from a long time ago, Mr. Chiaro from Rio Tinto 

and Mr. Rowe from Exelon. Would you tell us, I don’t want to make 
207 

this such a softball, but I am going to try to say this. Would you 

agree that we are already addressing these in a State by State and 

in a regional way? And would it be more helpful for you to have 

a national law with certainty in it? 

And when you answer the question, if you could tell us how 

many employees you have, again, in how many States. I would appreciate hearing that. 

Mr. Chiaro. 

Mr. CHIARO. Thank you, Madam Chairman. 

We have 15,000 employees spread across the U.S., mostly concentrated in the West, but a significant number in the East as well. 

In terms of the cap and trade system, we certainly support a strong 

cap and trade bill. Something that is global is even better for us 

as a global company. 

But the worst of all possible worlds for us would be one where 

there is a fragmented approach, where certain States adopt one 

form of cap and trade, other States adopt another form of cap and 

trade. Then we have to deal with multiple systems across our company. That just adds costs and complexity. 

We prefer to see certainly a national system, but even better if 

we could work toward a global system, that is what would work 

best for us. 

Senator BOXER. And Mr. Rowe. 

Mr. ROWE. Madam Chairman, my company has 17,000 employees, most of which are in Illinois and Pennsylvania, some in Texas 

and a small number in New England. 

Nearly every State in which we do business has adopted some 

measure for dealing with climate, in most cases renewable energy 

standards. And the renewable energy standards we see being 

adopted in States involve a mix of technologies which cost somewhere between $40 and the maximum I have heard is $150 a ton 

in your own State of California. This compares to the $28 cap you 

are adopting in your bill. We think $28 is a lot better than $50 or 

$150. 

Senator BOXER. And now that Senator Specter—I just wanted to 

know, how many employees do you have in Pennsylvania approximately? 

Mr. ROWE. I believe it is on the order of 5,000. 

Senator BOXER. And are you in the nuclear business? 

Mr. ROWE. We are the Nation’s largest nuclear power producer. 

Senator BOXER. And how many plants are you running, nuclear 

power plants? 

Mr. ROWE. We operate 17 of the Nation’s 103 nuclear power 

plants. 

Senator BOXER. OK. Senator Alexander is such a strong advocate 

of nuclear power, as are many on this committee and off this committee. And I guess my last question to you is, because he has a 

very thought out plan about building 100 nuclear power plants. 

But in that plan, there would be no allowances going. 

In our bill, we have, as I understand it, a half-billion dollars of 

allowances going to nuclear plants to help train workers and deal 

with safety questions. So is that not a benefit to the nuclear power 

industry that we have now a nuclear title to this bill, and there are 

others who want to make it even stronger? 
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Mr. ROWE. Yes, Madam Chairman. And as you know, Senator 

Kerry and Senator Graham are in fact discussing ways of making 

the nuclear title stronger. 

You know, we in my company are deeply indebted to Senator Alexander, Senator Inhofe, Senator Voinovich, Senator Carper, virtually everyone on this panel for things that they have done to support nuclear. And we, too, believe that a large number of nuclear 

plants will be needed in future decades to support a low carbon energy economy. 

The thing that makes us a small voice rather than a shrill voice 

is our own numbers say that at the present time, it is something 

like $75 per ton of carbon dioxide to use nuclear as the only solution. We think we need a market-based portfolio, and that is why 

we support cap and trade. 

Senator BOXER. Thank you very much. 

Senator Inhofe. 

Senator INHOFE. Thank you, Madam Chairman. 

Let me first of all say, Mr. Rowe, you are right. We do support 

nuclear and we look across the sea and see what France is doing 

and other countries, and wonder why we are not there. But hopefully we will be someday. However, our concern is what do we do 

today, tomorrow and the next 5, 6, 7 years? 

And let me say this to Mr. Rowe. We had a USCAP hearing 

where we had several corporations coming in, and they testified. 

And clearly, Government is picking winners and losers. You are a 

winner. And you know, I have often said that if I were on your 

board of directors, I would probably be sitting down there agreeing 

with you right now. 

The Wall Street firm Bernstein Research said, ‘‘If passed, John 

Rowe calculates that the bill would add $700 million to $750 million to Exelon’s annual revenues for every $10 a metric ton.’’ I 

would be right there in there with you. 

Mr. Carey, you know, we keep hearing that this bill takes care 

of coal. That is the phrase they use. Now, if it takes care of coal, 

and you have just heard about the more sweeteners on its way so 

it is going to take better care of coal, why are you opposed to it? 

Mr. CAREY. Madam Chairman, Senator Inhofe, when you look at 

this bill, I think there are a number of issues with CCS that are 

yet to be addressed. Let’s not talk about where CCS currently is, 

but let’s look at the issues. And if you look at page 5 of my written 

testimony, it is addressed to the second paragraph, which essentially that CCS is something that we need to continue to study, but 

to base CCS on a cap and trade scenario is the wrong answer. 

We continue to need to explore this, but we also need to look at 

the implementation of a national pipeline, including a regulatory 

framework, property rights issues, general liability concerns, the 

impact of other environmental statutes such as the Clean Air Act, 

the Superfund, hazardous waste laws, and Safe Drinking Water 

Act. 

All of these issues have been enumerated in many reports, including previously mentioned GAO and CRS reports. Those issues 

are not addressed in this bill. 
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Senator INHOFE. Yes, and I understand that, and I only have 7 

and a half minutes, so let me just go on and ask you one other 

question. 

They have said several times before and in two of the opening 

statements they talk about the fact that this legislation would preempt the Clean Air Act and trying to accomplish the same thing 

through regulations. And is that your understanding, that if we 

were to pass this, we would not be concerned with the EPA using 

the Clean Air Act for their regulations to accomplish some things 

that could be even worse? 

Mr. CAREY. Madam Chairman, Senator Inhofe, I would say that 

you have two train wrecks. And just because one is going to happen, why have the other? They are both going to happen if this bill 

passes. 

Senator INHOFE. Yes, what I am saying is, it does not preempt, 

otherwise you would have two after you as opposed to just one. 

Mr. Stallman, I have had a lot of conversations with your people 

in Oklahoma, and I think they are really up in arms more, I guess, 

than we hear here in Washington. But let me just approach this 

maybe a little different way. 

Senator Kerry said that this only affects 2 percent of the 

emitters. In other words, it is going to exempt the farmers. It is 

going to exempt all these people. And 2 percent of the emitters are 

responsible for 75 percent of the emissions of CO2, which I don’t 

agree with. I don’t think that is the case. 

But assuming that he is right, and assuming that you are exempt, why would your people and my farmers in Oklahoma oppose 

this bill? 

Mr. STALLMAN. Well, Senator, it is accurate that we are exempt 

as a capped industry under the bill. That is completely right. We 

are not exempt from the effects of this bill. 

Senator INHOFE. Very good. 

Mr. STALLMAN. And fundamentally, that is what I talked about 

in my oral statement and what we include in our written statement 

of the very serious effects in terms of cost increases, and frankly, 

the very serious effect of downsizing American agriculture. 

The EPA analysis to get to the benefits that they attribute to 

American agriculture have in the model an assumption that we reduce cropland acres, put it into forestry, have less crop acres, and 

produce less food and have higher prices. That is how they do it. 

Senator INHOFE. And I think that is very significant to bring out 

because there is somehow, and we noticed this yesterday and the 

day before in these hearings, this assumption that if you are exempt, you don’t have any problems. But what about the cost of gasoline, the cost of diesel, the cost of fertilizer? How much has fertilizer gone up in the last 5 years, roughly? 

Mr. STALLMAN. Oh, I couldn’t give you the percent, but based on 

my farm, I know I write a lot bigger checks than I used to. 

Senator INHOFE. Yes, and of course, the main ingredient there is 

natural gas. This is going to cause that to go up. Chemicals, the 

cost of everything for doing business is going to go dramatically up. 

So even if you were exempt, those costs would continue, and you 

would like to be able to say that all those could be passed on. Some 

will be passed on, so the general public, my wife going to the gro-
210 

cery store, my 20 kids and grandkids that are eating meals, are 

going to be paying more, but the farmers also are going to be paying more and getting less out. 

Mr. STALLMAN. Absolutely. Twenty percent of our input costs in 

agriculture on average are energy related. 

Senator INHOFE. Thank you, Mr. Stallman. 

Senator BOXER. I am going to call on Senator Specter. But before 

you start, please, I failed to mention the role that Senator Specter 

played in the soft collar that we have in the bill. I wanted to recognize his hard work and that of his staff. 

Senator. 

Senator SPECTER. Thank you, Madam Chair. 

Mr. Winger, I have noted your testimony of when a major project 

was canceled in Montana because of the aura of uncertainty surrounding the regulation of carbon dioxide. On Monday of this week, 

I met with Building Trades in Philadelphia, including Boilermakers, expressing concerns about refineries there. You mentioned 

refineries in your testimony. 

Do you think that in order to have the aura of certainty that we 

have to know from the legislation what the standards will be for 

carbon dioxide, as opposed to continuing the regulatory authority 

by EPA to regulate carbon dioxide? 

I made the point earlier in these hearings that we really cannot 

leave it up to EPA to continue to have regulatory authority if we 

are to have the certainty, and that we really have to deal with the 

legislation. EPA Administrator Jackson testified that there were 

other considerations, and I said, well, present those to the committee. If we have got to deal with legislation to provide the certainty, then let us do it legislatively, as opposed to leaving EPA 

with regulatory authority. 

Would you agree with that? 

Mr. WINGER. Yes, I agree with that. The legislation will give the 

incentives. It will lay out the ground rules. I believe it is very important to have the legislature legislate. 

Senator SPECTER. Mr. Rowe, we are concerned about many, 

many values here: the future of the climate, global warming. Let 

me focus on two, questioning you on jobs and the cost of electricity. 

You have talked about two key factors here, local distribution, 

which you would like to have with the allowances of 40 percent. 

The House bill has 35 percent and so does the Senate draft bill. 

You also talked about the price collar, which as the Chair has 

pointed out, my staff and I have been working on. This is a carryover from Bingaman-Specter on the so-called safety valve. Now, 

when you talk about the price collar, you say you don’t like 5 percent over inflation, but you would like to have a fixed price. 

Now, in concern for the cost of electricity, I know this is hard to 

quantify because there are so many moving parts, but you serve a 

big part of my constituency, as noted. If you end up with 35 percent of the local allowances instead of 40 percent, part A, what will 

that impact be on the cost of electricity? If we end up with 5 percent plus inflation on the price collar, what will that be contrasted 

with a fixed price on the price collar? 

You see what I am driving at? I want to know what the cost is 

going to be on the electricity. 
211 

Mr. ROWE. Senator Specter, first, I am grateful for your now 5 

or 6 years of work on both getting cap and trade to work and also 

having—— 

Senator SPECTER. I need 6 more. 

[Laughter.] 

Mr. ROWE. We estimate that with the Waxman-Markey provisions, which we have been able to more fully analyze, the increase 

for a Philadelphia customer would be on the order of 5 percent. 

And we are already putting half of that into rates just for Pennsylvania renewable standards. 

So it illustrates how important the combination of a price control 

mechanism and the allocations to the local distribution companies 

are. 

To answer your question precisely, I will have to file it in writing, but I will do that promptly and send it to you. But the answer 

is very clear, a firm price collar plus allocations to local distribution 

companies like PECO do a great deal. They cut the cost of this bill 

for Pennsylvania and Illinois consumers in something like half. It 

is very important to your constituents and my customers. 

Senator SPECTER. Madam Chair, I have one brief question for 

Mr. Krupp, if I may? 

Senator BOXER. Yes. 

Senator SPECTER. Mr. Krupp, as President of the Environmental 

Defense Fund, I note your support for Waxman-Markey and our favoring cap and trade. And you have heard my inquiry about having 

a fixed determination so that we know what the cost will be for 

carbon capture. Would you agree from your perspective that the desirable course for this bill is to fix it legislatively? 

In the context of getting the votes here, when you have certainty, 

I think you will have more appeal to Senators like myself. There 

are a lot of considerations on my agenda, but the coal industry is 

one. And I think there will be a lot more support if EPA does not 

retain the regulatory authority to deal with this issue. Would you 

agree that that is the preferable course? 

Mr. KRUPP. Senator Specter, you raise a couple of issues. Let me 

try concisely to deal with them. 

I think these are very important concerns, and I completely 

agree with you that the cost issue is important, and the bill needs 

to grind down costs. I think this bill does a very good job of doing 

exactly that. 

I think it is very important that this bill fix the ceiling of how 

much pollution we are going to have so we control carbon and reduce it. And I think that a price collar properly structured can give 

people assurances that there won’t be tremendous volatility in the 

price. Properly structured means that, you know, there is a strategic reserve of carbon tons that is opened up if a price goes above 

a certain point. 

So I think we can do both. We can keep the integrity of the cap 

and the carbon control, which is the main purpose of the bill, and 

answer the legitimate concern on costs. I think this bill as it is 

structured now does that very well. I think there are other ways 

that could also work. 
212 

And your second question about EPA regulatory control, I think 

the tighter the tap and the more the reductions, you know, the 

more that cap and trade can be the primary driver. 

Senator SPECTER. Well, that doesn’t quite answer the question. 

Primary is not sufficient. 

Mr. KRUPP. I think for conventional pollutants, there are regulatory structures that will continue to important to protecting—— 

Senator SPECTER. I am just asking about carbon dioxide. That is 

all. 

Mr. KRUPP. For carbon dioxide, yes, a cap and trade should be 

the primary driver. That will give industry the flexibility. 

Senator SPECTER. You are still on primary. That isn’t sufficient 

if there is some secondary regulatory authority. 

Mr. KRUPP. If the cap is sufficiently tight, and if offsets have integrity to them so we are only allowing real reductions into the system, cap and trade will do the job. 

Senator SPECTER. I take that as a qualified yes. 

Senator BOXER. All right. 

Senator Alexander. 

Senator ALEXANDER. Thanks, Madam Chairman. 

I am going to say this again because whenever I do, it seems that 

my Democratic friends don’t hear it. Forty Republican Senators, 

and we believe many Democrats, believe there is another approach 

to reaching our climate change goals by 2030, even though we have 

a wide variety of views about climate change. 

One is 100 new nuclear power plants—create the environment 

for that in the next 20 years. Two is the environment for electrifying half our cars and trucks. We can do that without building one 

new power plant. Three is offshore exploration for low carbon natural gas, as well as oil. And four is four mini-Manhattan Projects 

to make solar costs competitive, to recapture carbon, to make electric batteries betters, and to recycle used nuclear fuel so it doesn’t 

isolate plutonium. 

And we can do all those things without a national energy tax 

that is ineffective in any event on fuel, that raises costs, and that 

runs off manufacturing jobs. 

Now, let me shift to what Mr. Rowe said was his favorite option, 

and I am not going to try to get you in the middle here between 

Senator Boxer and me. I am just going to acknowledge that under 

an economy-wide cap and trade like she has proposed, a company 

like yours, which is the largest operator of nuclear plants, is going 

to—well, that is an award for good behavior some people might say. 

I want to look toward the future and think about your testimony 

and that of many others, and even this bill, which envisions that 

to come close to meeting any sort of ambitious climate change goal, 

we would have to have large amounts of new nuclear power plants. 

And the concern I have is that a recent paper by the Nature Conservancy suggested that any climate change legislation be flexible 

enough to include nuclear power. Yet, when this legislation is combined, Senator Carper described this as a technology-neutral cap, 

but when it is combined with the renewable electricity standards 

and the other policies of the Federal Government, we suddenly see 

that we are not technology-neutral anymore; that our goal is not 
213 

carbon, it is specific types of other production facilities, usually not 

including nuclear. 

For example, the renewable electricity standard that you mention in your testimony and that is coming out of the Energy Committee doesn’t count nuclear power, municipal solid waste or landfill gas as renewable. Seventy-five percent of the so-called renewable electricity subsidies enacted since 1978 have gone to wind developers, not to carbon-free developers. 

So we have a production tax credit. Now, nuclear does have a 

limited production tax credit of up to 6,000 megawatts, but the way 

I figure it, if you build 20 percent of our power from wind, it would 

take about 180,000 wind turbines. That would cost about $170 billion in production tax credits. There is no cap on it for wind. There 

is a cap for nuclear. And if nuclear used all of its production tax 

credit, it would be $6.8 billion. I think my figures are about right. 

So it is about $170 billion to $6.8 billion. 

So my question is, wouldn’t it be better going forward with a production tax credit, with loan guarantees, and with the renewable 

electricity standard, that we had a carbon-free renewable electricity 

standard or a carbon-free loan guarantee with all forms of production eligible to apply, or a carbon-free production tax credit so that 

we allowed nuclear, you mentioned the up-rates, the 8,000 

megawatts of up-rates which would come on, which by themselves 

about equal the total wind production we have in the United 

States. By up-rates, I mean just adding capacity to the existing 103 

plants we have today. 

So my question is, shouldn’t we have a carbon-free goal for all 

the subsidies and tax credits, just as is proposed here, a technology-neutral cap? 

Mr. ROWE. Senator, I strongly agree with you that a carbon-free 

goal or a carbon-free set of subsidies would be preferable to renewable-only subsidies. I think even when you level the subsidy playing field like that, you still need the cap and trade system to sort. 

But I ardently support including nuclear in the carbon-free package. 

Senator ALEXANDER. Thank you, Madam Chairman. 

Senator BOXER. OK. Let’s see. Senator Cardin is next. Next after 

that was Klobuchar and after that is Lautenberg. 

Senator LAUTENBERG. Neither one of them are on stage. 

Senator BOXER. They are coming. They are coming after, correct. 

Senator LAUTENBERG. OK. Thanks very much. 

And I am sorry that another hearing took time because this is 

an excellent panel, Madam Chairman. But I am sure that there are 

questions that we will be able to read answers through the record. 

Mr. Krupp, the Environmental Defense Fund, founding member, 

U.S. Climate Action Partnership, including major employers from 

a wide range of industries. If acting to reduce emissions would 

cause the kind of, forgive me, interruptions from outer space, if acting to reduce emissions would cause the kind of economic damage 

that our opponents claim, what do you think companies like DuPont and Ford and BP, why would they support it if it is so wrong 

in terms of its impact on our society? 

Mr. KRUPP. Senator, I don’t think there is any chance that they 

would support it if they believed that. Their analysis is quite dif-
214 

ferent from some of the testimony that we have heard today. And 

in the joint statements that we have signed onto with them, their 

statements are that they believe on the contrary that this legislation will yield a real economic growth in this country. 

And you know, if you look back at the Clean Air Act, the sulfur 

amendments, and many other pieces of environmental legislation 

where there were similar scare stories and fear mongering, there 

wasn’t business support for them to the degree that there is today 

for this. And even so, the legislation turned out to be very cost effective. 

Here, we have an unprecedented level of business that is supporting this legislation because they think it is good for the American economy. 

Senator LAUTENBERG. Many companies that are part of the U.S. 

Climate Action Partnership, they were able to grow quickly over 

the past decades despite reducing their emissions dramatically. 

Dow Chemical, for example, reduced its emissions by 22 percent 

below 1990 levels. 

Do you believe other companies across the economy might be 

able to achieve significant growth with the improving efficiency? 

Mr. KRUPP. I absolutely agree. And the part of the story, Senator, that I think is worth mentioning is that Dow and DuPont 

saved billions of dollars while growing and reducing emissions, because in reducing emissions, they found dramatic cost savings as 

well. 

Senator LAUTENBERG. For Mr. Kempton, there is a great deal of 

energy potential off our shores, but not all energy is created equal. 

What is a better option for creating jobs, reducing pollution, protecting existing fishing and tourism, with offshore wind energy or 

offshore drilling? Which of these? 

Mr. KEMPTON. I haven’t personally done an analysis of jobs in 

those two industries. But generally, you have a good deal more energy coming out of a single installation, which I think would lead 

to fewer number of jobs. Of course, there are no issues with pollution affecting fishing and so forth from wind. There are very few 

liquids and oils in there, mostly mineral oil. So I think the oil industry has got a pretty good record recently, but there is a possibility of spills that would affect fisheries. 

Senator LAUTENBERG. And Mr. Krupp, clean energy jobs aren’t 

limited to manufacturing and installation positions. But we need 

engineers to design products, train operators, truckers that ship 

materials to the factory, to the market, and many other jobs that 

support industry. 

What kinds of jobs might you describe that are created in the 

supply chain when clean energy companies are created? What kind 

of jobs should ensue? 

Mr. KRUPP. The word I would use, Senator, is American jobs, because they are not green jobs. They are not exotic jobs in the spacecraft industry. They are people in machine shops who used to make 

automobile parts are now being hired in Indiana and Ohio to make 

wind turbines and other bolts, nuts, fasteners. These are not some 

different types of jobs. These are American jobs at American 

plants. And these companies very much want this legislation to 

pass. 
215 

Senator LAUTENBERG. Confirming that view, an Italian company 

just opened up, just broke ground in New Jersey to build solar panels. It will employ 300 people coming from other countries to create 

jobs in our country on behalf of—sorry, thanks. 

Senator BOXER. Thank you very much, Senator. 

Senator Bond isn’t here, so Senator Voinovich is next. 

Senator VOINOVICH. I was interested in hearing, Mr. Winger, 

your testimony and then Mr. Carey’s testimony. One of the things 

that we have to recognize is that many of the people that are supporting this legislation are opposed to fossil fuel. And the Sierra 

Club brags about the number of plants, coal plants they have 

closed, even though their integrated gas combined cycle, as you 

know, they are the best plants that you can get, but they are shutting them down. They are fighting one right now in the State of 

Ohio. 

So they are pushing very, very hard, and so are a lot of other 

people, so that we are going toward wind and solar, failing to mention to the American people that wind and solar in terms of providing our energy is about 1.4 percent, maybe 1 and a half percent, 

and that they are not baseload generation. But the feeling is somehow through solar and wind, we are going to replace coal. We are 

going to replace gas and other things. 

And I think the problem, one of the worries that you have is that 

the technology available for CCS is not around the corner. I wish 

it was. And what people should realize is that the CCS technology, 

if we don’t jump start it, we are in big trouble because China is 

putting on two coal-fired plants a week. And so this idea is that 

somehow we will all switch to wind and solar, the rest of the world 

is not doing that. 

And I would like you to comment about the fact that your concern about this, and as the allowances disappear, the fact that 

many of these companies are going to switch to natural gas, which 

in itself has about half the emissions as coal. 

Would you like to comment on that? 

Mr. CAREY. Madam Chairman, Senator Voinovich, yes, I would 

love to comment on that. And the answer is you are right, and also 

thank you for your years of service in Ohio. We definitely have a 

friend, and we appreciate your years of service. 

But as far as the coal industry goes in Ohio, you know, we are 

looking at 3,500 jobs, and we are talking about American jobs. We 

are talking about well paying jobs, $65,000 a year. According to 

EIA, 80 percent of those are gone by 2030. I think that is a real 

hit to the Appalachian economy. There are 7,500 coal miners in the 

State of Pennsylvania, the multiplier 11 that is, you know, 77,000 

jobs that would be immediately hit; 80 percent of those gone by 

2030. The State of West Virginia, there is close to 20,000 coal miners. 

This bill is bad. China and India and the developing world want 

us to pass this legislation because they know that we cannot have 

baseload generation and growing baseload generation—— 

Senator VOINOVICH. Can I interrupt a minute? Also, I want to 

clarify something. 

Mr. Winger, you have been in the business for a while. When we 

passed the acid rain provisions of the Clean Air Act, there had 
216 

been about 15 years of research on NOx, SOx and mercury reduction. And some allege that what we have today is, you know, we 

are going to be able to take care of the greenhouse emissions just 

like we did the acid rain provisions of the Clean Air Act. 

Would you like to comment about where the state of technology 

is compared to greenhouse gases as it was to NOx, SOx and mercury many years when we put that provision in? 

Mr. WINGER. I believe that the technology is not there yet. I believe that without this bill, without the subsidies or the incentives 

to move forward on carbon capture, that without requiring something to be done, then we will never get there. And the reality of 

it is coal has to be part of our energy mix. 

Senator VOINOVICH. Right. And what you are saying is that there 

has to be a lot of money in here to jump start the clean coal technology so that we can continue to burn coal and your boilermakers 

can continue to have work. Right? 

Mr. WINGER. Yes. Right now, we are at a standstill. If you want 

to talk about loss of jobs, we are not building any power plants 

right now because of the uncertainty. 

Senator VOINOVICH. And the lobbying by the Sierra Club and 

others that don’t want fossil fuel. 

Mr. Rowe, nuclear, you and I had a talk about nuclear, and the 

feasibility of nuclear coming on to the degree that is anticipated in 

this bill in 2020 and 2030. What is the possibility of having that 

number of nuclear power plants? 

And last but not least, what do you think of the natural gas title 

that is in this bill that encourages the use of natural gas? My feeling is that what it will do is take the pressure off going forward 

with nuclear and getting the carbon capture technology that we 

need for coal. 

Mr. ROWE. Senator Voinovich, as I said in your office, I believe 

that the six or eight units that are supported by the existing Federal loan guarantee program will go forward and be in operation 

by 2020. I do not think there will be a significantly larger number 

than that. 

If those units are successful, I believe there will be more online 

by 2030, but as I told you in your office, I doubt that it will be 

many tens, let alone a hundred. And as your question implies, the 

economics of new nuclear at the present time are haunted by the 

fact that natural gas is and appears likely to be for the next decade 

at very low prices. 

And so the low cost solution for the next decade is often natural 

gas, and that takes, as you say, pressure off to work on either new 

nuclear or the more advanced forms of renewables that others like. 

Senator BOXER. Thank you very much. 

Our next Senator is Senator Klobuchar. 

Senator KLOBUCHAR. Thank you very much, Madam Chairman. 

Thank you to all our witnesses. I know it has been a long morning. 

I just wanted to first comment, when I had to go to another hearing with the NTSB, when I left, and I know it has been continuing. 

For our C-SPAN viewers, I want them to know that despite legitimate concerns from everyone about changes they want to see to 
217 

this bill, that there is some growing bi-partisan support in this 

country to do something about climate change. 

And I just thought for a refreshing moment, I would read a few 

paragraphs before I ask my questions, from the recent opinion 

piece written by Senator Lindsey Graham, a Republican, well 

known Republican of South Carolina, a Senator, and Senator John 

Kerry. 

And in their piece, they said, ‘‘We refuse to accept the argument 

that the United States cannot lead in the world in addressing global climate change. We are also convinced that we have found both 

a framework for climate legislation to pass Congress and the blueprint for a clean energy future that will revitalize our economy. 

Our partnership represents a fresh attempt to find consensus that 

adheres to our core principles that leads to both a climate change 

solution and energy independence. It begins now, not months from 

now, with the road to 60 votes in the Senate.’’ 

And they then conclude, ‘‘The message to those who have stalled 

for years is clear: killing a Senate bill is not success. Indeed, given 

the threat of agency regulation, those who have been content to 

make the legislative process grind to a halt would later come running to Congress in a panic to secure the kind of incentives and 

investments we can pass today. Industry needs a certainty that 

comes with congressional action.’’ 

So I just thought that was an interesting thing to put on the 

record, Madam Chair, and to remember that there is some bi-partisan work going on here. And again, this bill, whatever bill we 

pass through the committee as you all know will not be the end. 

There is going to be significant work going on with many on both 

the Republican and Democratic side. And I think there are some 

people like Senator Graham who truly want to get something done 

here. 

So my first question, actually to follow up on Senator Voinovich, 

one of the assumptions in this bill is that there will be more nuclear reactors. I personally believe that nuclear is part of the solution here, as are more short term solutions like energy efficiency 

and solar and wind. 

And I will toss it open to whoever wants to answer this, but what 

do you believe are the incentives that we need to have in here to 

get the 115 or so nuclear plants up and running in the coming decades? 

Mr. Rowe. 

Mr. ROWE. Senator, I think there are a group of things that are 

necessary. First, supporting at least uprates, or better yet, as Senator Alexander suggested, new nuclear plants as part of a low carbon energy package would have a positive impact. 

A legislative finding that onsite storage or surface storage of 

spent nuclear fuel is an acceptable long term solution to the nuclear waste issue would be an important step. Obviously, increasing amounts of loan guarantees would be valuable. 

The challenge for someone like me who deeply believes in markets is how to suggest subsidies without looking like you are trying 

to have it both ways, which one usually is. And to me, the only answer is we have to look at some long-term things like solar, like 

a next generation of nuclear, as things we want to get jump start-
218 

ed, but we don’t want to go too far so the market ultimately makes 

the choice. 

As many people here have suggested, what we are ultimately 

looking for is to include the cost of climate protection into the marketplace, and then let the marketplace make choices from decade 

to decades that none of us are wise enough to make today. 

But those would be the principal things I would suggest we look 

at to make certain that nuclear has a chance to participate in those 

solutions. 

Senator KLOBUCHAR. Thank you. 

Mr. Krupp, my last question for you is that just looking at how 

we can get people energized and be part of the beneficiaries of this 

bill I think is key. I know in our State, we were able to pass one 

of the most regressive, aggressive renewable electricity standards 

in the country, agreed to by Xcel, our biggest energy company, 25 

percent by 2025; 30 percent for Xcel. 

And part of that I think passed nearly unanimously in our legislature, signed into law by a Republican Governor. And I think part 

of that was that people felt that they could have a piece of the action, whether it was farmers with the biofuels, which was, of 

course, a separate bill, but incredibly helpful for jobs in our State; 

or whether it was some of the small towns that could see some benefit of small wind. 

Could you just briefly address what you see as some of the advantages of moving forward to get that kind of grassroots support 

and how we can do that with this bill? 

Mr. KRUPP. The amazing thing about the carbon issue, Senator, 

is that there are so many opportunities for people to contribute to 

the solution that cap and trade system, a market system gives 

them those opportunities and engages them. So for instance, you 

mentioned farmers. Farmers can move to no-till agriculture, earn 

offset credits. They can capture animal waste and capture methane 

and pay for the costs of that capture. They can generate electricity 

from methane that they capture. 

There are so many things. Farmers can reduce nitrogen loading 

to more precisely control what the plants need and get an offset 

from that potentially under a bill like this, you know, once the 

process, whatever regulatory process is established. 

So there are lots of opportunities for people to benefit. 

Senator BOXER. Thank you so much, Senator Klobuchar. 

Senator Barrasso. 

Senator BARRASSO. Thank you, Madam Chair. 

Mr. Stallman from the American Farm Bureau, you just heard 

an answer there. Is that something that you would agree with from 

the standpoint of agriculture? 

Mr. STALLMAN. Well, absolutely, and we worked very hard to get 

the amendment put into the House bill that set up a structured agriculture offset program run by the USDA, with specificity as to 

what would constitute offsets and other rules in place that gave us 

some certainty. That is why I said we still really need to do this 

in this bill. 

It does give farmers opportunities. We are very low emitters as 

an industry, 6 to 7 percent of carbon. We have the ability to se-
219 

quester up to 20 percent of the carbon that we emit in the United 

States, and that is positive. 

The fundamental question, though, is are the benefits that farmers achieve, the sequestration, and through selling these offsets, if 

you will, is that going to offset the additional costs? And then the 

corollary to that is: Are forestry offsets going to downsize American 

agriculture in terms of taking crop land out of production? 

Senator BARRASSO. I hear from my farmers and ranchers in Wyoming and they have concerns about higher energy costs, fertilizer 

costs facing the agriculture community. So I want you to spend a 

little bit of time, if you could, just talking about some of the problems that our farmers and ranchers are facing and what we should 

really do about it. 

Mr. STALLMAN. Well, it is clear that energy is important to us as 

an input cost. Roughly 20 percent of our input costs are energy-related. As energy costs go up, that puts a very high burden on us. 

Farmers cannot pass through those costs in terms of the price for 

the commodities they get. So that, in and of itself, is going to put 

a real cost price squeeze on farmers. 

In fact, you know, over time it will probably cause a adjustments 

in production because you have to be economically sustainable to 

remain in production. And so one of our biggest concerns is this energy gap that we keep talking about, and how are we legitimately 

going to fill this hole in energy, and then specifically, you know, 

what happens with natural gas, because that is so important to our 

fertilizer costs specifically. 

Senator BARRASSO. Mr. Carey, you talked about different areas 

of the country. California, the West Coast, the Northeast is doing 

well under the cap and trade regime, or regimen. Most States and 

regions do not. And so I look about what is happening in coal producing areas, Ohio, West Virginia, Kentucky, Wyoming. Where do 

those folks go, and what do they do if some of these jobs are eliminated? And you yourself have said these are very good paying jobs. 

Mr. CAREY. Madam Chairman, Senator Barrasso, you know, the 

question is a good one. Where do they go? And quite frankly, if you 

are looking in Appalachia, Ohio or West Virginia or Western Pennsylvania, they simply have nowhere else to go. 

One of the things that I say in my written testimony, as well as 

my oral, is the fact that one of the things that coal mining families 

own is their home. And who is going to buy that home if the jobs 

aren’t going to come into Eastern Ohio, Western Pennsylvania and 

West Virginia? 

Senator BARRASSO. I think you stated that some of the coal mining jobs were paying $25,000 a year higher than the average income in Ohio. 

Mr. CAREY. Again, Senator, yes. That is exactly right, and when 

you look at the region, as Senator Voinovich knows, when you look 

at the region of Ohio where those coal mining jobs are located, 

these are higher, way above the 25 percent higher that it is in the 

State average. It is much higher than that. These jobs in Appalachia, in Kentucky, West Virginia, your home State of Wyoming, 

Ohio—they are some of the best paying jobs in their region, period. 

Senator BARRASSO. And it is not just the specific income dollars. 

You are talking about health benefits, retirement, long term. I 
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mean, what I see is the number of people who want to get their 

sons and daughters into these jobs as well because it is a good way 

to be able to raise a family, put bread on the table, and clothing 

on their back, get good educations for the kids, and opportunities. 

Mr. CAREY. That is right, Senator. 

Senator BARRASSO. All right, thank you. 

Thank you, Madam Chairman. 

Senator BOXER. Senator Carper. 

Senator CARPER. Thank you, Madam Chairwoman. 

Some of our witnesses have talked today about predictability. 

Some of our colleagues have spoken about predictability as well. 

And I want to direct a question, if I could, to Dr. Kempton, with 

a little twist on predictability, if I might. But as we know when we 

are interested in harnessing the energy of the sun, the sun doesn’t 

always shine. Wind doesn’t always blow. 

My recollection, though, is that when it comes to offshore wind, 

there is actually better predictability. It is more consistent, more 

predictable than onshore wind. And want to ask you, is that correct? And second, if it is, do you know some ways that we can store 

some of the energy that we are harnessing or prepared to harness 

off of our shores? 

Mr. KEMPTON. Yes, Senator Carper. We have studied 20 years of 

NOAA buoy data, which gives us wind resource data from Maine, 

really, to Florida, and looking at that whole system. The wind 

blows enough to produce electric power 85 percent of the time. 

There are a couple of comments about wind not going all the 

time. And if it is on 85 percent of the time, it is off 15 percent. But 

every power plant is like that. There is nothing different about 

wind other than the numbers and the amount. A typical coal plant 

has an unscheduled outage rate at about 5 percent. So the electric 

grid is set up for power plants which are sometimes off and they 

are sometimes off when you don’t expect them to be. 

So one way of dealing with the predictability is larger grids, larger electric grids. In particular, for offshore wind, we have modeled 

an electric grid running along the continental shelf. It is not on 

anybody’s property. It can just be reeled down by a cable-laying 

vessel. And there are companies that are interested in doing this. 

It would be part of the whole infrastructure. 

When you do that, the wind stays at a medium value most of the 

time. So it is actually highly predictable and that is because on the 

East Coast, storm fronts tend to move north to south. So you put 

a north-south cable in, you have the wind blowing somewhere all 

the time. In 5 years, the wind never stopped blowing, literally. So 

it is not really an intermittent resource when you do that. 

Now, storage you referred to as another way of dealing with fluctuations in wind. That will be important. I think ultimately it will 

be sometimes long wind, low wind period or high load periods you 

may want to burn fossil. But long before you get to that point, the 

electric vehicle fleet, which I think most automakers have shown 

they believe is coming by the models that they have announced for 

the next 2 years, is a very large storage resource. 

So in Delaware, for example, that one big wind farm, 400 

megawatts, that could be leveled out by 5 percent of the vehicle 

fleet being electric, with the ability to draw in power when there 
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is excess wind, and put it back out when there is not, so-called vehicle-to-grid technology developed at the University of Delaware. 

Senator CARPER. I have heard of that. I can say for the audience 

and for my colleagues, the most fun I have ever had driving a car. 

Was it a Scion? A Scion that had been retrofitted to be an electric 

vehicle, and I took Congressman Mike Castle for a ride and we almost never wanted to come home. It was more fun than you can 

imagine. 

All right. I have another question in terms of jobs, and we talked 

earlier about the jobs that will be coming for plug-in electric vehicles in a former GM plant in Wilmington, Delaware. But just talk, 

if you will, about the kind of jobs that might flow from a project, 

a wind project off of our shores. You talked about the potential of 

ships laying cable, you have folks that are going to be building 

components for windmills, for windmill farms. Can you talk a little 

bit about the kind of jobs and the number of jobs that might be created for a project like this? And could something like that be, say, 

replicated up and down the coast or maybe even in the Great 

Lakes? 

Mr. KEMPTON. Yes. Senator, the kind of easiest quick wind resources using existing technology are off of the East Coast, really 

the whole East Coast, and parts of the Great Lakes. A little bit of 

California, but we will need deeper water platforms for the middle 

of the Great Lakes and for most of California, or the West Coast. 

Jobs, as I mentioned, for that one wind farm in Delaware, it is 

500 construction jobs, about 75 long term operations and maintenance jobs which include three boat operators or three boats’ mechanics, power traders and so forth. 

Now, if we built out the whole resource that I mentioned, we 

have estimated about 20,000 direct jobs in manufacturing, plus the 

installation jobs. And then four times multiplier for indirect jobs. 

So it really would be a very large industry. 

Senator CARPER. My time is about to expire. I want to ask one 

quick question, if I could, of Mr. Chiaro. 

Madam Chair, could I ask unanimous consent for one additional 

minute please? 

Senator BOXER. Yes, but I just want to announce on the next 

panel, we are going to have to keep our questions to 4 minutes. Go 

ahead. 

Senator CARPER. Mr. Chiaro, and thank you, Dr. Kempton, for 

those responses. 

Do you believe, and answer this just briefly, do you believe the 

bonus allowances for coal, with CCS, in the Chairman’s mark 

would make coal more competitive when the price of carbon is low? 

I will say that again. Do you believe that the bonus allowance 

for coal, with CCS, and it is in the Chairman’s mark, would make 

coal more competitive when the price on carbon is low, say under 

$20? 

Mr. CHIARO. Yes, absolutely. In fact, I think it is essential, particularly when the price of carbon is low. 

Senator CARPER. All right. Thanks so much. 

Thank you, Madam Chair. 

Senator BOXER. Thank you. 

Then we will go to Senator Udall. 
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Senator UDALL. Thank you, Madam Chair. 

There have been several things that have been mentioned about 

agriculture, and I would like to talk a little bit about, Mr. 

Stallman, agriculture in the West and the Southwest. You know, 

we plan to continue improving this bill for agriculture. We have increased allowances for rural electric co-ops, agricultural programs. 

We have increased domestic offsets in this bill. 

And I believe that preventing severe global warming is critical to 

protect agriculture in New Mexico and the Southwest. Basically, 

the science says if we don’t act, our climate will shift 300 miles to 

the south. And if you know the geography out in the West, 300 

miles to the south for New Mexico puts us in the middle of the 

Chihuahuan Desert. 

And so here we are, this is just conservative business as usual 

in the middle of the Chihuahuan Desert in 2050. So you can imagine, no snow pack, less water, bad conditions for agriculture. I 

mean, this really doesn’t help agriculture. 

So I really see the way forward for agriculture is being aggressive, is putting in place this pollution reduction bill, and moving 

forward with climate change legislation along the lines, and that 

is why I want to turn to Professor Kempton now, where we are developing these other resources. 

You know, you have done, Professor Kempton, significant work 

on the potential for offshore wind energy to provide significant energy to coast areas. How much of this vast resource is it realistic 

to achieve in the near term and long term with or without national 

legislation to put a price on carbon emissions? 

Mr. KEMPTON. I think without some kind of legislation that introduces a price like that, it would be limited to develop. There are 

some other policies that help. Delaware did have a local carbon 

emissions law and renewable portfolio standards, which you have 

advocated, of course, Senator Udall, and the protection tax credit 

which applies to both wind and nuclear right now. 

These are all things that help. But I think we are going to see 

a fairly limited amount. We have about 1.2 gigawatts now announced. That is 1,200 megawatts. That is already operating in Europe. Europe is looking at scale-up with under construction 4,000 

megawatts, and then a plan for 2015 of 36,000 megawatts. So that 

is exponential growth in that industry, and they are training tens 

of thousands of workers to do that, building installation vessels and 

so forth. That cannot happen without this kind of law to introduce 

some kind of incentive. 

Senator UDALL. So, Professor Kempton, really what you are telling us is without a strong, and I think Fred Krupp and others have 

said this, without a strong price signal, we are not going to move 

into these areas aggressively and develop these kinds of resources. 

Mr. Chiaro, your company is a large energy intensive mining 

company with vast assets around the world, including a minority 

interest in an active copper and gold mine in Southwest New Mexico. With that perspective, I believe our panel should listen closely 

to your testimony as a company that welcomes Federal climate legislation. 

Could you describe how your company makes investment decisions about whether to invest in one country or another? And why 
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you don’t see this legislation as a negative for your investments in 

New Mexico or elsewhere in the United States? 

Mr. CHIARO. Thank you, Senator, for the question. 

We make investments over the very long term. Many of our operations last 30, 40, 50 years. We have operations in Utah, for example, that have been running for more than 100 years. So we have 

to take a long term view. 

And for us, investment certainty is key in our decisionmaking 

process. Having multiple systems or systems that aren’t settled is, 

as I said earlier, the worst possible world for us. We need to know 

what the rules of the road are because we make investments that 

amount to billions of dollars when we set up a large operation. And 

knowing what, you know, sort of the field of play in advance is essential to making good investment decisions. They are always 

based on NPV, on net present value. That is what we look for is 

value for our shareholders. Stability in terms of government regulation is vital for us wherever we invest around the world. 

So that is one of the principal reasons why we are asking for a 

broad based market based cap and trade system. Market-based systems are things we work in all the time. Commodity prices fluctuate all over the place. We know how to deal with that sort of volatility. We can certainly manage that with a cap and trade system 

with carbon as well, but it is a system that we are quite familiar 

in working with. 

Senator UDALL. Thank you very much, and thank you to the entire panel. I think this has been a very helpful panel today, Madam 

Chair. 

Senator BOXER. OK. Well, I think what we are going to do, since 

Senator Whitehouse said he was not going to ask any questions, is 

go to our final questioner, and that is Senator Merkley. And then 

after that—I just want to say in advance, because I won’t say it 

later, thank you, each and every one, for this amazing education 

you really gave to all of us. And I think we are all the better for 

it, all of us, regardless of where we come out. 

So I want to thank you in advance. The reason I am doing that 

is when Senator Merkley finishes, if you could go out quickly because it is quarter to 12. We have another panel waiting, and we 

want to get to hear them as well. 

So this has been fabulous. And Senator Merkley, you are a good 

one to end the questions. 

Senator MERKLEY. Thank you very much, Madam Chair. I will 

dive right in. 

Mr. Stallman, you made reference in your written testimony that 

the Senate bill is missing the list of offset practices for farming and 

forestry. And there is a list, but I wanted to clarify whether you 

saw that list. It is a 3-page list, page 534 to 536. Can you explain 

a little bit what the difference is that you see between the list in 

the Senate bill and the list in the House bill? 

Mr. STALLMAN. Well, certainly, and it is not just in the list that 

I was referring to. It is in the program itself. The House bill has 

a very much more structured program with USDA authority to implement it. And this bill is much vaguer, leaves the implementation 

of offsets, frankly, up to the President through an advisory committee. We think that creates too much uncertainty. 
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What we are saying is the list is necessary. Who runs the program? You know, the requirement to run the program and provide 

those agricultural offsets is very important, and that is what we 

say is missing. 

Senator MERKLEY. Great. Thank you. That is helpful, and if after 

the hearing you all have any suggestions for how this list needs to 

be amplified, I certainly would be interested. As I read through it, 

it was like, well, that covers everything I could think of, but I am 

not a farmer. And so any feedback would be very helpful, and I appreciate your comment. 

And then Mr. Krupp, I wanted to turn to the broad structure 

here. We are already about 8 and a half percent below the 2005 

levels in carbon dioxide. So would it be fair if we are zeroing in, 

if you will, on 9 percent, is it reasonable for me to characterize the 

goal embedded in this bill of 11 percent additional reduction over 

the next 11 years by 2020 is really a 1 percent per year goal, that 

that is about what we are aiming for here? 

Mr. KRUPP. Yes, I think that is a reasonable characterization, 

Senator. 

Senator MERKLEY. Well, I think of it that way, and then I look 

at the McKinsey study that you cite in your testimony that says 

that we could close this entire gap, the 2020 goal, with just energy 

efficiency. I look at that and then realize that in addition to energy 

efficiency, we have renewable energy in this bill. We have offsets 

in this bill. We have international offsets in this bill. It starts to 

look like a fairly easy target to meet. 

And I don’t want to characterize your testimony, but it sounded 

like that was the gist of the point you are making, that this is a 

reasonable, easily reached; this is not something that lifts up the 

American economy and kind of shakes it by the shoulders. 

Mr. KRUPP. Senator, my belief is this is a very modest target. It 

is ambitious but easily achievable because there are an abundance 

of alternatives. My own personal belief is that if we get going, the 

price of carbon will be much lower, and the scientific need will continue to develop, and you will be here in a few years’ time with the 

confidence on a bi-partisan basis to lower the cap, just as George 

W. Bush did with acid rain. He implemented the CAIR regulation 

and lowered the sulfur cap by 70 percent. 

Senator MERKLEY. One of the things that keeps coming up where 

I feel like they are ships passing in the night is some folks refer 

to the standards set in this bill as an economy-wide cap, and others 

note that it affects only a modest number of entities in the United 

States. 

Senator Kerry has referred to 7,500 entities, including not just 

manufacturers, but energy producers and so forth. The Duke University study that is in your testimony says only 1.3 percent of 

manufacturers are affected. That is 4,500 out of 350,000, and that 

is because of the 25,000 tons per year per facility standard. 

So how do we reconcile these ships passing in the night and try 

to get us all on the same vision of what is actually in this bill? Is 

it economy-wide, or is it really affecting only a small percentage of 

producers of carbon dioxide? 

Mr. KRUPP. The good news, Senator, is that because such a small 

number of producers produce the bulk of the economy’s emissions, 
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it can be both something that addresses the vast majority, over 80 

percent of the economy’s emissions, but be very selective on only 

a relatively small number of producers. 

Senator MERKLEY. Thank you. 

And finally, I am 13 seconds, one reason why it makes sense not 

just to use the McKinsey study and invest in efficiencies, but do to 

cap and trade, is to unleash the creativity of the ideas that will attack carbon dioxide and other global warming gases from every direction. And can you just close on your thoughts on that point? 

Mr. KRUPP. When we create the right incentives, American entrepreneurs, American ingenuity will explode at this problem from 

every direction, and things just like in acid rain that we haven’t 

even imagined yet. Right now, those incentives are all misaligned. 

So just watch what happens when we have the faith to give American capitalism a crack at this problem. 

Senator MERKLEY. Thank you very much. 

And thank you, Madam Chair. 

Senator BOXER. Thank you so much. 

And you said American capitalism—there is someone in the audience named Brook Byers. I would ask him to stand for a second. 

He is with one of the most respected venture capital firms in Silicon Valley that funded Amazon and Google. And he is just here 

to watch us in our work, which is a little bit more convoluted than 

his making a decision of, yes, I think this is a good idea; let’s invest 

in it. We have to go through a little more of a process than that, 

but we are very happy that you are here with us. 

So thank you, thank you, panelists. We cannot say thank you 

enough, and we ask the next panel to come forward on transportation. The first panel to leave as quickly as you can. You have 

been generous. And if anyone needs to talk to the first panelists, 

I am sure they will be willing to talk with you outside the door. 

Thank you, ladies and gentlemen. Now, where is Hon. Sherwood 

Boehlert? Senator Inhofe and I were just discussing how happy we 

are that you are here. And we have William Millar. And we are 

going to start with Hon. Sherwood Boehlert. I will wait until everybody settles in. 

STATEMENT OF HON. SHERWOOD BOEHLERT, CO-CHAIR, THE 

BIPARTISAN POLICY CENTER’S NATIONAL TRANSPORTATION POLICY PROJECT 

Mr. BOEHLERT. Thank you, Chairman Boxer. 

Senator BOXER. Why don’t you wait one more minute until we 

are really cleared of the people in the room who are leaving. 

And now everyone, this is a very important panel on transportation and the impact of this bill on transportation. So please, you 

have 5 minutes, Congressman Boehlert. Please go ahead. 

Mr. BOEHLERT. Thank you, Chairman Boxer and Ranking Member Inhofe, two friends of long standing. 

First of all, I would like to submit—oh, and Senator Carper, a 

classmate. 

Senator CARPER. Three from the class of 1982 right here. 

Senator BOXER. How about Senator Lautenberg? 

Mr. BOEHLERT. And Senator Lautenberg. It is nice to be among 

friends. 
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I am here on behalf of the Bipartisan Policy Center, which was 

founded by four former Senate majority leaders: Tom Daschle, Bob 

Dole, Howard Baker and George Mitchell. BPC’s mission is to develop and promote sound policy solutions that can attract public 

support and political momentum to achieve real progress: two 

Democrats, two Republicans on opposite sides of the political divide 

working in common cause. I think the American people are hungry 

for more of that. 

I am one of four co-chairs of the Bipartisan Policy Center’s National Transportation Policy Project. The others are your former 

colleagues Slade Gorton, former Congressman Martin Sabo, and 

former Detroit Mayor Dennis Archer. 

Let me start by commending you, Madam Chair, for the introduction of S. 1733, which will ensure that the Senate addresses an 

issue that some would rather ignore. Although we have witnessed 

opposition to it, a cap and trade approach, while not a perfect policy, represents the best option for achieving necessary reductions of 

greenhouse gases in a timely and a cost effective manner. 

A climate bill must have elements of both price and emissions 

certainty. As a co-chair of the NTPP, I strongly applaud efforts undertaken in this bill that emphasize investment in the transportation sector and situated as both central to the reduction of greenhouse gas emissions and to improvements in energy security. 

Our report lays a framework for Federal transportation policies 

that are performance driven, linked to a set of clearly articulated 

goals, and held accountable for results. This committee has the 

unique ability to bring transportation, energy and environmental 

issues together as has been done in this legislation. And I hope this 

integration continues with the upcoming transportation authorization bill. 

Let me highlight some of the transportation elements of this bill 

that are directly in line with the recommendations of the NTPP. 

Setting aside funds from a cap and trade scheme for investment in 

transportation, as this legislation does, is critical. However, revenues set aside for transportation in this bill are below the portion 

the sector should receive based on its contributions to climate 

change. Given that the transportation sector contributes approximately one-third of greenhouse gas emissions nationally, it should 

bear an appropriate burden and receive a commensurate portion of 

carbon revenues. 

Second, the bill addresses both the environmental protection and 

energy security aspects of transportation simultaneously, thus integrating what have historically been thought of and addressed as 

separate policies. 

Third, by devoting a portion of transportation grants to investments that will reduce greenhouse gas emissions, this legislation 

establishes an over-arching and specific national objective for 

transportation investments with climate revenue. This concept of a 

national vision and goals, but local planning and strategies, is exactly how we should be approaching Federal transportation investments. 

Competitive grant programs are essential for encouraging innovation as well as flexibility at the State and local level. NTPP recommends two competitive grant programs, and we note that the 
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CLEAN-TEA competitive grant program embedded in this legislation is a competitive program focused on reducing greenhouse gas 

emissions. 

It is a step in the right direction that this bill thoughtfully calls 

for collaboration among Federal agencies in updating and regulating the collection of data. With few exceptions, the transportation planning processes that currently exist at the State and metropolitan levels do not support a strategic performance based and 

accountable approach to decisionmaking. These planning processes 

must be refined. 

Let me wrap up by offering some suggestions. Transportation 

funding should not be awarded for demonstrating reduction in 

greenhouse gas emissions alone. Investments must also demonstrate progress toward mutually beneficial goals. Although we 

want to reduce emissions with these investments, at the end of the 

day, they are investments in transportation. 

We are convinced that mode neutral funding leads to greater system efficiencies and innovation. While some may be convinced of 

the relative promise of particular transport options or strategies, no 

particular mode represents the best solution to all problems in all 

situations. 

Madam Chair, I see my time has expired. I ask permission to include several reports in my testimony. 

Thank you so much. 

[The prepared statement of Mr. Boehlert follows:] 
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Senator BOXER. Absolutely, without objection, and we really appreciate your being here. 

Our next witness is—I want to say it right, William Millar, 

President of the American Public Transportation Association. And 

we are very honored that you are here with us. 

STATEMENT OF WILLIAM MILLAR, PRESIDENT, 

AMERICAN PUBLIC TRANSPORTATION ASSOCIATION 

Mr. MILLAR. Thank you very much, Madam Chairman and Mr. 

Inhofe. We appreciate the invitation to be with you today. 

The Clean Energy Jobs and American Power Act embodied in S. 

1733 makes a strong commitment to reducing emissions from the 

transportation sector, but emission reductions is just one of the 

benefits. The legislation can help reinvigorate our transportation 

system while reducing its environmental footprint and expanding 

much needed employment in America. 

As explained by several earlier speakers, including Congressman 

Boehlert just before me, the transportation sector is a major contributor to greenhouse gas emissions, and we simply have to deal 

with the transportation sector if we are serious about dealing with 

this issue. 

Now, what do we know about how to tackle transportation emissions issues? We know that we have to improve the mileage of cars. 

We know we have to improve the mix of fuels. Some Federal legislation has already been handled in those areas, but those alone are 

not enough. Simply doing those things, as important as they are, 

will be outdone by population growth and increasing need to travel 

as America’s economy grows in the future. 

So we must do other things as well. We must take a systems approach if we are going to achieve the rest of what the transportation sector needs to do. Certainly, investment in public transportation, but also incentives that would coordinate land use, that 

would improve planning, that would allow innovation in parking in 

road pricing, all these things together are going to be necessary to 

make the improvements that we need to do. 

Now, this legislation sets reduction targets which are good, and 

those should then be reflected in the transportation sector. Next, 

with the assistance provided in this bill, the States and the large 

metropolitan areas will be required to produce greenhouse gas reduction plans. They can do that as part and parcel of their existing 

transportation planning process. Smaller metropolitan areas can 

also do the additional planning if they wish or rely on the States 

in which they reside. 

These are important steps, but planning is not enough. We need 

implementation of good strategy and good projects that that planning process will result in. So we strongly endorse the bill’s allowances that are dedicated to expanding public transportation 

throughout the system. 

Now, we know that public transportation is a proven strategy. 

We know already from previous studies that over 4.2 billion gallons 

of fuel, some 37 million metric tons of CO2, doesn’t go into the air 

each year because of what transit does. In the process, we know 

transit supports about 1.7 million jobs and apropos of what you 
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heard from the earlier panel, these are the kind of jobs that all of 

us need to have our economy revitalized. 

By the way, the 37 million tons that are saved, imagine if you 

will if the cities of New York City, Washington, DC, Atlanta, Denver and Los Angeles could somehow do without electricity. That is 

the amount of carbon we are already saving from going in the air, 

and we could certainly do much more. 

Now, this bill will build on that success record and expand it. We 

know from Census Bureau work that only about half of all American households even have the choice to use any public transportation. So we are pleased that this bill would allow energy efficient 

and environmentally efficient transportation options to expand to 

more places in the country so more Americans would have the 

choice to use transit if they chose to do so. 

We also endorse the bill’s competitive grant program for multimodal investments. As Congressman Boehlert said, you know, no 

one mode is going to be the only answer here. So including, as you 

have, provisions that would allow that planning process to produce 

a variety of strategies, and then assist in funding those strategies, 

is very important indeed. 

And these strategies I think are far ranging, beyond public transportation, bicycle, pedestrian facilities, intelligent transportation 

applications, and of course, inner city and high speed rail solutions 

as well. 

So I think that this legislation is poised to help us. We look forward to working with the committee and working with the Senate. 

I do have one caution in this legislation, though, and that is this 

cannot be a substitute for the existing highway and public transit 

assistance programs. If we were to put a little money in the right 

hand pocket and then take the money out with the left hand pocket, we have not helped anybody, and we certainly look forward to 

working with this committee, the Banking Committee and others 

in getting a good, long range surface transportation bill. 

Thank you very much, Madam Chairman. 

[The prepared statement of Mr. Millar follows:] 
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Senator BOXER. Well, let me assure you this is not a substitute 

for anything. 

I am so pleased to introduce Mike McKeever because he is the 

Executive Director of the Sacramento Area Council of Governments, and that particular organization is near and dear to my 

heart. They are real leaders in transportation planning and combining this with land use, sensible, common sense ideas that have 

gone a long way to shape our planning efforts in California. 

Just for the record, his region includes the following counties: El 

Dorado, Placer, Sacramento, Sutter, Yolo, and Yuba and 22 cities. 

So we are very honored that you could be with us today, Mike. 

Please go ahead. 

STATEMENT OF MIKE MCKEEVER, EXECUTIVE DIRECTOR, 

SACRAMENTO AREA COUNCIL OF GOVERNMENTS 

Mr. MCKEEVER. Thank you, Madam Chairman and Senator 

Inhofe, for the invitation. 

We also cover about 2.3 million people in the SACOG region, and 

we have been a pretty good test run for many of the transportation 

planning concepts that are in this bill over the last few years. In 

many ways, I think we are a pretty good microcosm of the country. 

Our demographics are similar. We have healthy amounts of rural, 

suburban and urban development. We have a very strong agricultural economy. We are at the crossroads of major east-west and 

north-south running freight corridors. And we have a transit system that needs help and more care and attention. And we also 

have very diverse politics. 

And particularly in light of your morning discussion, I do want 

you to know that the detailed and innovative regional planning 

process information in my written testimony is supported by a very 

broad bi-partisan coalition of people, both on my board and within 

our stakeholder community. 

I think that the bill, the transportation planning portions of the 

bill, will help our region to achieve the goals that we have set for 

ourselves. I think the bill is relatively simple to understand, at 

least in these portions. First, I understand the Federal Government 

will set a national greenhouse gas emissions target for the transportation sector. Second, the States and regions will have to meet 

certain standards for quality of data and modeling and scenario 

analysis. And then we will set our own targets in that area. And 

third, then the Federal Government will provide guidance, technical assistance and financial incentives to help us succeed. It is a 

good construct. 

I do want to acknowledge and thank Congresswoman Matsui 

from Sacramento, who was instrumental in the Waxman-Markey 

bill in these particular provisions that are similar. But I want you 

to know that over the last several years we have engaged literally 

thousands of citizens in this process, given them good information 

and listened carefully to what they had to say to us. 

And what they had to say was that we needed to make fundamental changes in the way we were growing and the way we were 

funding our transportation priorities. There are three quick summaries, and it is common sense. One, they told us we need more 

housing choices. This was based on market research, as well as de-
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mographic trends. We need town homes, row houses, small lot single family, condominiums and apartments to go with our abundance of large lot single family products. 

Second, we need more transportation choices. We need viable 

choices in the transit field, pedestrian and bicycle field. We need 

more streets, but different types that are really designed for all 

users, not just the automobile. And we need targeted capacity improvements in our freeway and highway system for both goods 

movement as well as the farm to market, reinvesting in our farm 

to market system. 

And finally, in brief summary of what we are doing, we are going 

back to old school community design, building neighborhoods and 

cities the way we used to where homes and shops and jobs and 

schools and parks are all located close together, very popular in our 

region. We have many wonderful examples of that built all around 

this country. People love them, and now we are starting to build 

them again. 

In this capital region, you see mixed use developments going up 

around the metro system. We see suburban developments built to 

smart growth around our region, and we also see revitalization 

going on in rural towns. So this is something where everybody participates. It is not just a part of the area. 

Now, there are many other benefits to greenhouse gas reduction 

planning as one of my panelists indicated. You have less congestion. You have less time in traffic, whether you are a trucker or a 

family member. You have lower water use, lower energy use in 

your buildings. You save more farmland and open space, and you 

reduce health costs from air pollution problems. And so there are 

multiple benefits. 

We do have an innovative new law in California that I refer to 

in my written testimony, Senate Bill 375, that links together these 

different planning disciplines. I do want to say that I think the 

Federal Government has a legitimate financial and policy interest 

in this issue. But we do appreciate that this bill is structured to 

leave the actual writing and implementation of the plans to the 

States and the regions. We think that is the right partnership. We 

think it will promote cost efficient cooperation and competitive innovation amongst and between the regions and the States, and 

that is a good model, and we appreciate it. 

I do want to thank you again, and thank you in particular, 

Madam Chairman, for your leadership in this area. 

[The prepared statement of Mr. McKeever follows:] 
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Senator BOXER. Thank you so much. 

And we hear from our minority witness, Barbara Windsor, President and Chief Executive Office of Hahn Transportation, Inc. And 

we welcome you. 

And I am going to hand the gavel to Senator Carper. Senator 

Carper, I am going to hand you the gavel because I have a call to 

return, and I will be right back. 

And then for our first question, I promised Senator Inhofe he 

could go first, and I will go last between the rest of us. 

STATEMENT OF BARBARA J. WINDSOR, PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, HAHN TRANSPORTATION, INC. 

Ms. WINDSOR. Thank you, Madam Chair and members of the 

committee. 

I would like to thank you for this opportunity to testify on the 

Clean Energy Jobs and American Power Act. Yes, my name is Barbara Windsor. I am President and CEO of Hahn Transportation. 

We are a trucking company headquartered in New Market, Maryland. 

My family built and grew the business for the past 75 years, and 

today we operate 100 trucks and employ over 150 individuals. Our 

business is very dependent on the plentiful supply of affordable diesel fuel. My company purchases approximately 2,600 gallons of diesel every day. I am also representing the American Trucking Associations as ATA’s First Vice Chair. 

Trucking delivers virtually all the consumer goods in the U.S. 

Clothing, food, medicine, appliances and fuel are transported by 

trucks. As the industry’s costs increase, the price of all these essential products must also rise. Our industry has made great strides 

to improve air quality. Efforts have resulted in near zero emissions 

for both nitrogen oxide and particulate matter. 

Unfortunately, addressing these emissions has reduced our fuel 

economy as much as 8 to 12 percent, thereby increasing our carbon 

emissions by requiring us to burn more fuel. If we can reverse this 

trend and increase fuel economy, greenhouse gas emissions will be 

reduced. 

The technology used to reduce NOx and PM emissions is very expensive. Compliance with the 2002 EPA emissions standards added 

$3,000 to $5,000 per truck. The introduction of the ultra-low sulfur 

fuel added about 5 cents per gallon to the price of our fuel. EPA’s 

2007 diesel engine standards added an additional $8,000 to $10,000 

per truck. And the standards set to take effect in 2010 will further 

increase new engine costs by approximately $9,000. 

While, ATA strongly supports these environmental improvements, we note that these gains come at a substantial cost to our 

fleets. Congestion mitigation offers one of the most viable strategies 

for reducing carbon emissions, with the potential to eliminate 314 

million tons of carbon and save 32 billion gallons of fuel over the 

next 10 years. 

ATA supports legislation to reauthorize the Highway Program. 

We believe that reauthorization should have programs specifically 

aimed at addressing congestion and freight bottlenecks. And we 

support increasing the fuel tax to achieve these goals. 
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However, the trucking industry’s ability to fund that fuel tax increase could be jeopardized by carbon control mechanisms that will 

increase the price of our fuel without dedicating this revenue to 

highway infrastructure improvements. 

Trucking is responsible for less than 16 percent of the U.S. carbon emissions. ATA strongly supports the efforts to reduce greenhouse gas emissions and make this country more energy independent. However, the proposed cap and trade system simply will 

increase the cost of diesel fuel, while failing to reduce carbon emissions from the trucking industry. 

As refineries are forced to purchase carbon allowances to cover 

the emissions of the downstream products they sell, the cost of 

these allowances will be passed on to consumers. Cap and trade 

will also increase the volatility of the diesel fuel prices that are 

fluctuating carbon prices added on to the already volatile pride of 

our fuel. Volatile fuel prices make it very difficult for the trucking 

companies to accurately predict their future expense as we sign 

freight delivery contracts. 

The reason that cap and trade will not significantly reduce carbon emissions from the trucking industry is rooted in the fact that 

trucking is not a discretionary consumer of fuel. Proponents of the 

cap and trade system believe by increasing the price of fuel, consumers will reduce the consumption of gasoline. This rationale does 

not translate into the trucking industry, which is a non-discretionary consumer of diesel fuel without viable alternatives. 

Even if the price of diesel fuel is dramatically increased by cap 

and trade, the trucking industry must continue to use fossil fuel. 

While various proponents of alternative fuels cite natural gas and 

biodiesel as potential alternatives to diesel, our written testimony 

shows that these fuels are currently not viable for our trucking industry. 

As you move forward with the cap and trade legislation, refinery 

carbon caps should not apply to downstream combustion of the 

transportation fuels. 

Thank you for this opportunity to testify. I look forward to answering any of your questions. 

[The prepared statement of Ms. Windsor follows:] 
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Senator INHOFE. Thank you very much. 

And Ms. Windsor, I had not read your statement that you had 

submitted, but I heard you say a few things here that I would like 

quantified a little bit differently. And I don’t mean right now, but 

for the record, it would be helpful to me if you would take these 

things—you mentioned three things that have happened, mandates, I would say, that have come from the EPA or from us. I 

would like to see how that translates into fuel costs. 

You said that, you know, you don’t object to increasing the 

money that would go into the Highway Trust Fund, the cost of fuel. 

But these other things, I would like to have just for my own information how that compares to what maybe a 10 cent increase would 

be. In other words, give me something to show how many cents a 

gallon of diesel these things mean to you, how that would translate. So if you would look into that and see if you can do it. 

Well, we keep hearing that this is a bill that is going to create 

jobs. You have made it very clear that you have had a reduction 

in jobs, and you have had problems in your industry. And I would 

only say that we get testimony after testimony, everyone is supposed to be creating all these jobs, but it never happens in the industries that are in front of us. 

So have you estimated anything in terms of how many jobs 

would be destroyed in the trucking industry? 

Ms. WINDSOR. Currently, the freight market is very soft, so obviously our jobs are at a reduced part. If in fact, we have to add additional costs for diesel fuel, I think we would have a decline in jobs 

versus an increase in positions. 

Senator INHOFE. OK, let me ask it a little bit differently then. 

Senator Bond issued a report that the Waxman-Markey bill, and 

this would be about the same, we think, would have the effect of 

a $3.6 trillion gas tax increase. Now, we all know that most of 

these taxes are going to be passed on. Would you say that in terms 

of the consumers out there depend on trucks to deliver goods all 

over the country, as to how much of that $3.6 trillion do you think 

would ultimately have to be passed on to the ultimate consumer? 

Ms. WINDSOR. It would be very difficult to estimate at this time. 

I can get back with you on that. But ultimately, the consumer does 

pay for any increases. We are currently not able to pass on all our 

additional fuel costs to our consumers, though, especially with the 

soft freight market at this time. 

Senator INHOFE. And you have heard me say this before. One of 

the things that I find most offensive about the debate that has 

been going on. People are concerned about our reliance upon foreign countries for our oil and gas. And yet, while we have the 

greatest reserves of any country right here in the United States, 

83 percent cannot be developed because of the bureaucracy. And 

that is an area that I think would benefit you equally if we were 

able to go out and just exploit our own resources. 

Sherry, you said something in your statement here, talking about 

cap and trade is far preferable to the command and control approach of the EPA. Well, we are concerned about that. We are concerned about the Clean Air Act and how the EPA could impose 

these things. And yet there is not a preemption in this bill. In 

other words, you are supporting the bill, but if you are successful 
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and you had your way and we passed a bill, you would have that 

to operate under, but also you would still have the EPA. There is 

no preemption. 

Are you going to try to encourage a preemption if we get to the 

point where we are looking at—— 

Mr. BOEHLERT. Senator, if I were running the show, and I could 

have my druthers, I would pass this retroactively. I think you need 

a partnership between the executive and the legislative branch, but 

I think it is far preferable to have the legislative branch address 

this problem in a meaningful way. And that is why I applaud these 

hearings. 

The worst possible scenario is inaction, no one doing anything. 

Global climate change is so serious, and it is so negatively impacting each and every American of all persuasions that it would be 

sinful to do nothing. 

Senator INHOFE. OK. That is not the question. The question is, 

do you support preemption? 

Mr. BOEHLERT. No. Oh, do I support preemption? 

Senator INHOFE. Yes. 

Mr. BOEHLERT. You mean, the Feds? 

Senator INHOFE. Yes. If we were to pass something here, do you 

want that to preempt the EPA’s regulations doing essentially the 

same thing or something that could be worse? 

Mr. BOEHLERT. Yes. The answer would be yes to that. 

Senator INHOFE. OK. Very good. Thank you very much. 

Thank you, Madam Chairman, for letting me go first. 

Senator BOXER. Thank you so very much. 

Senator Lautenberg goes first, and Senator Carper will go next. 

Go ahead, Senator Lautenberg. 

Senator LAUTENBERG. I yield to Senator Carper. 

Senator BOXER. Senator Carper will go first, then Lautenberg. 

Senator CARPER. No, I don’t want to go first. 

[Laughter.] 

Senator CARPER. No, I do. I am delighted to go first, and I thank 

my colleague for letting me go first. 

Congressman Boehlert, Sherry, it is just great to see you, and to 

each of our other witnesses, thank you so much. Some of you are 

from a long way, and we are delighted that you are here. And 

thank you for excellent testimony, actually. 

I will start off, if I could, with Congressman Boehlert. And say 

how pleased we are to say that you have spent some time in our 

State, and I think your daughter is there, and it is just great to 

see you here as well. 

The existing funding for our Nation’s transportation system is 

largely through stovepipes, and you know, we focus on building 

separate types of projects such as highways. We focus on transit 

systems, but we are really not focused much on national outcomes. 

And at my request, and a number of my colleagues’, the KerryBoxer bill includes a mode neutral grant program—several of you 

have commented on that today—at the Department of Transportation that is designed to reward States, to reward regions that 

strive for the greatest reductions in transportation emissions. 

Let me just ask, if I could to start with, do you believe this grant 

program will foster innovation? And second, do you believe it pro-
410 

vides local communities with the flexibility that they need to accomplish national goals of reducing transportation emissions? 

Mr. BOEHLERT. The answer is yes and yes, and the creative genius of America welcomes incentives. And when the incentives are 

there, as this bill provides, Katie bar the door. It is unlimited in 

what you can get from that. So I think it is extremely important. 

Second, I think it is extremely important that we allow State and 

local governments flexibility. We have established broad national 

goals, objectives that we want to achieve, but we shouldn’t mandate every step of the way what State and local government should 

bring to the table because each and every situation is different. But 

as long as they develop plans going forward, working across jurisdictional lines, that advance toward the objectives and goals of the 

overall bill, we are all the beneficiaries. 

Senator CARPER. Good. Thank you. Let me just have a follow up 

question. 

I want to thank our Chair for including in the mark the 3 percent allowance to go to transportation strategies, to reduce our 

greenhouse gas emissions. And I thank you especially for scheduling this panel to be before us today. 

But the allowances, I think, will generate up to $3 billion annually, split evenly, I believe, between transit funding and mode neutral grant programs. And I would just ask, do you believe this level 

of investment is sufficient to address transportation’s contributions 

to greenhouse gas emissions? Do you believe it is sufficient by 

itself? 

Mr. BOEHLERT. It is an important step forward, and I applaud 

when you take that first step toward a goal. Obviously, we would 

like more; 33 percent and 3 percent, there is a big gap there. But 

it is an important first step, and I applaud that, and we will be 

glad to work with you to accomplish even more. 

Senator CARPER. All right. Thank you. 

Mr. Millar, a follow up question to that. How important are the 

allowances that are provided in the Chair’s mark to reduce transportation emissions? And what role, if any, do you think that inner 

city passenger rail could play in these efforts? 

Mr. MILLAR. We believe the allowances are essential. The benefit 

of remissions reduction that public transportation provides is when 

people use public transportation. If, as the economic analysis 

shows, some of the cost of fuel—we believe it will be a modest cost 

increase, but still a cost increase of fuel that will occur, that is expenses that the transit systems have to absorb. If they have to 

raise fares, if they have to reduce service, then the benefits of having people choose to use public transit will be greatly lessened. So 

we think these are essential that these allotments go toward transit. 

With regard to improvements to our rail transportation system 

and network across the country, we think that that is something 

that out of the planning programs, States can determine what are 

the efficient investments there. We think the competitive grant 

program is the right place to get some of that. But we think that 

in all likelihood the size of those investments will require additional funding to really make them pay off. But as Congressman 
411 

Boehlert just said, that first step is the most important and we appreciate the work in this bill. 

Senator CARPER. Thank you. 

And in conclusion, a quick question for Mr. McKeever. Again, 

congratulations on the great work you are doing out there and for 

your leadership, but you have State and local funding restraints. 

Could Sacramento have completed the kind of integrated planning 

process that you have described without Federal funds? 

Mr. MCKEEVER. Well, we did use our traditional Federal funding 

to fund a portion of that project, but we also had specialized funding both locally and from the State. 

Senator CARPER. And do you believe the allowance revenue that 

is dedicated to transportation under the Kerry-Boxer bill is sufficient for all regions to complete a similar planning process? 

Mr. MCKEEVER. Well, again, I think on the planning side, I think 

it is a very important step in the right direction. I think we are 

going to have to get some good treatment on the transportation bill 

side in order to pull it all together. 

Senator CARPER. All right. Thanks. 

Ms. Windsor, I don’t have time to ask you my question, but I am 

delighted you are here. We thank you very, very much for your testimony. 

Senator BOXER. And Senator, if you wish to include it in the 

record, then she can answer it in the next 24 hours. 

Also, I just have to say, Senator Carper is thanking me. It was 

Senator Carper, Senator Lautenberg, Senator Cardin, Senator 

Specter. It was just a tremendous number of people who worked to 

make sure we did the most we could. It is very difficult, because 

it is a zero sum game. You take allowances and put them in one 

place, you have to take them from another place. And believe me 

when I say Senator Carper would have liked it a little higher. 

Senator Lautenberg. 

Senator LAUTENBERG. Thanks, Madam Chairman. 

I defer to Senator Carper because he has worked so diligently on 

this section of the bill. And we have common views in terms of 

transportation. Our States are neighbors, and we get a lot more 

traffic than the number of people just living in our States, that is 

for sure. 

Mr. Boehlert, if we can move more freight movement to rail, 

there are all kinds of benefits that ensue. 

And Ms. Windsor, don’t be afraid. I am not going to say take 

trucks off the road alongside. 

But how would that help us? What do you see as the principal 

values of moving more of the freight by rail? 

Mr. BOEHLERT. First of all, I have long appreciated both modes 

of transportation. I want you to know that. But rail is more environmentally friendly, less emissions, obviously. And it is more energy efficient in many respects, lessening our dependence on foreign oil. 

But the key point this overall report of the Bipartisan Commission makes is that we should not go in with any prejudices. It is 

not what I like or you like or the next person likes. It should be 

mode neutral. So you have these broad national objectives and 

goals you are trying to achieve, and each one of them should be ad-
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dressed individually as you determine where you are going to make 

the investments in our transportation infrastructure for the future. 

Senator LAUTENBERG. Mr. Millar, Amtrak, for instance, which is 

a major focus of mine, not to prejudice your thinking, I promise, 

but it is a lot more efficient than airplanes, 24 percent more efficient than automobiles. 

So it sounds like we are delinquent in the investments that we 

have made in rail service. And what I am looking for is your view 

and confirmation of what we have seen. We had the opportunity in 

the last couple of days to talk to people from the E.U., members 

of the Parliament, and we discussed their investments, for instance, Germany, France, Italy, Spain, they make us look like a 

third world country. So what do we do about the national investment in passenger rail service? And I fought like the devil, and we got $13 billion over the next 5 years reauthorized for investments in Amtrak. We got an $8 billion program for high speed rail investments throughout the country. Where do you think we ought to go to get even more invested 

in passenger rail service than we have? 

Mr. MILLAR. First, sir, let me thank you for your leadership over 

many, many years on this issue and on public transportation 

issues. We admire your expertise and appreciate your fortitude in 

moving forward. 

There is no doubt about it. The U.S. is a third world country, 

maybe even a fourth world country, if that is possible, when it 

comes to passenger rail. We simply have refused to make the kind 

of investments that our competitors and our future competitors 

have been and are making at the moment. The President’s support 

in the stimulus package and the concurrence of the Congress was 

an important first step, but a very tiny first step. 

Most Americans don’t really know what good train service is anymore, unless they have traveled to Japan or some other country. 

And I think what is going to happen here, it is going to be a little 

like good roads were in the 1930s and 1940s. We built a few of 

them, and people said, hey, we need more and better roads, and 

surely we did. And we built the world’s greatest road system. I 

think the same thing has to happen with intercity rail, and particularly high speed rail. I think Americans, when they get a sample of something that is that good and that useful and that efficient, they will demand more. 

As to the funding package, it is going to take a solid effort by 

the Congress to figure that one out. And whether it is bits and 

pieces that are all put together to make enough, or whether we can 

come up with a genius approach such as was done with the interstate highway system, I don’t know. But we stand ready to work 

with the Congress on that. We need to make that commitment. 

Senator LAUTENBERG. Thank you. I thought I had a coup d’etat 

here and the Chair was empty, so I will just continue for a moment 

or more. 

[Laughter.] 

Senator BOXER. You have that right. 

Senator LAUTENBERG. That is very kind. 

Senator BOXER. After all you have done for transportation in this 

Nation, they even named a train station after you, for God’s sake. 
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[Laughter.] 

Senator LAUTENBERG. We don’t talk about that. 

[Laughter.] 

Senator BOXER. Take me to Lautenberg Station. 

Senator LAUTENBERG. I had to leave the Senate. You know, it is 

bad form to have things named for you while you are a sitting 

Member of the Senate or a sitting Member. So I left for 2 years. 

I got a railroad station, a courthouse and a vocational school. And 

then I said, OK, back. 

[Laughter.] 

Senator LAUTENBERG. So here we are. It was a nice tribute that 

the people of New Jersey gave me. 

Ms. Windsor, one of the things, and I admire the fact that you 

are here representing a family established company. 

Ms. WINDSOR. Thank you. 

Senator LAUTENBERG. And I had the privilege in my lifetime of 

establishing a company, but not family. And so every year, we see 

5,000 people killed in crashes involving large trucks. But in your 

testimony, you call for larger trucks, increasing the size and weight 

of large trucks. What is the justification? I mean, it takes longer 

to stop these vehicles. There is a question about wear and tear on 

the roads, the infrastructure that we built for traffic, and had no 

concept of what the volume of this traffic might be, nor the kinds 

of opportunities there were for moving goods and people. 

So what do we do with more large trucks? I have not been a 

friend of increasing truck size, as you may know. It doesn’t mean 

we are not friends. 

Ms. WINDSOR. Right. 

Senator LAUTENBERG. But could you give us an explanation of 

the validity of doing that? 

Ms. WINDSOR. Well, obviously, one of the issues is productivity 

of the equipment that we currently have without adding additional 

tractors and trailers on the highways. Many of our units that we 

run now are not fully loaded because of weight restrictions. 

As we see the next generation of safety items that have become 

available to us, and our tractors that we now have with all the 

emission devices, the equipment is now becoming heavier and 

heavier. Our fuels are heavier. Our tractors are heavier. And again, 

if we add additional safety devices that we all would like to have 

on our equipment, we are increasing the weight of the equipment. 

By giving us a tolerance above our 80,000 pounds, then we know 

that we will not have as many tractors and trailers on the highway. 

Senator LAUTENBERG. Fifty-three feet? 

Ms. WINDSOR. Yes, we do run 53. 

Senator LAUTENBERG. Are you advocating triples? 

Ms. WINDSOR. In the areas where they can be run. Obviously, not 

around the capital beltway. 

Senator LAUTENBERG. All right. We run into opposition here on 

this because I think we have to resort to what is the safest, best 

way to do it. And there are lots of places where trucks and trucks 

only can carry it, and we have to provide investments there as 

well. So thank you very much. 
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Senator BOXER. Well, transportation safety is something that, 

Senator, you are my leader on that. 

If I could just ask unanimous consent to place into the record a 

statement by the American Bus Association, and we thank them 

for giving us their insight. 

Again to this panel, we thank you. I am not going to burden you 

with questions. If I have a burning question, I will put it in writing 

and ask that you get it back to us ASAP. Your testimony is very, 

very helpful, and very clear. 

And you know, I just think it is a patriotic duty that you performed really well today, coming all the way from places near and 

far. Thank you very much. 

We stand adjourned. We will be back at 2:15 sharp to start the 

third panel, and we are going to continue on until the evening until 

we are done with these hearings. 

Thank you very much. See you later. 

[Recess.] 

[The referenced statement follows:] 
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Senator BOXER. The committee will come to order. We are back 

for our third panel of very distinguished speakers all, and we are 

very grateful to you for taking the time out of your hectic lives to 

be here with us. 

We are not going to make any opening statements here, which 

should be good news to you since it usually takes a long time. We 

are going to right ahead, and we are going to start. 

This panel deals with actions in other countries, and we are 

going to hear from those folks who are really involved in this and 

who know it, to share your wisdom with us. 

We will start with John Podesta, who is President and Chief Executive Officer of the Center for American Progress. It is a think 

tank he formed in 2003, and of course, prior to that he served as 

White House Chief of Staff to President Clinton. He has a number 

of very interesting parts of his bio that I don’t have time to share, 

but will you proceed, Mr. Podesta? 

STATEMENT OF JOHN PODESTA, PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, CENTER FOR AMERICAN 

PROGRESS ACTION FUND 

Mr. PODESTA. Thank you, Madam Chairman and Senator Inhofe. 

Thank you for inviting me to testify before you. I know you have 

a lot of witnesses. I have a long written statement that you have 

included in the record. So let me just make a few points. 

First, in my view, we are losing valuable ground to our competitors every day that we do not take action. Our economic competitors are embracing the future, investing in new economic, energy 

and environmental opportunities to capture the clean energy technology edge, grow their domestic clean energy markets, expand 

new employment opportunities, and increase production of secure 

domestic renewable energy. 

The real threat to U.S. competitiveness is not in embracing the 

future, but being stuck in the 20th century energy systems. For example, China is spending 34 percent of its stimulus dollars, $586 

billion it is spending on stimulus on clean energy and clean energy 

infrastructure, nearly twice what the United States is spending, 

second only in percentage terms to South Korea. 

Between now and 2011, they are investing $300 billion in the 

largest railway expansion in the world. I recently traveled from 

Beijing to Tianjin, going 250 miles an hour on their new intercity 

high speed rail service. They own 40 percent of the solar PV production market, almost the same share the U.S. had in 1995. Now, 

we are under 10 percent. 

Germany has the world’s largest installed capacity of solar photovoltaic panels and second largest amount of wind power. The renewable energy sector now employs 280,000 people. It is estimated 

to grow to 500,000 by 2020. 

Spain is conquering the intermittency problem associated with 

renewable energy and generates about a quarter of its electricity 

through renewable resources, about 8 times more than the United 

States. It is on track to generate 40 percent of its electricity from 

renewables by 2020 by investing in a state of the art national 

smart grid. 
424 

And even India is investing $20 billion to expand their solar capacity to 20 gigawatts by 2020, 4 gigawatts more than the total 

worldwide solar capacity installed today. 

Passing the Clean Energy Jobs Act would signal to the world 

that the United States will seize the defining economic opportunity 

of the 21st century. This bill can unleash a tidal wave of innovation 

here at home and draw on America’s proven ingenuity and entrepreneurial spirit to build new businesses and to lead the world in 

clean energy technologies and practices, just as we have in info 

tech and telecommunications, but we must take action now. 

My second point is that the Clean Energy Jobs Act would put 

people back to work. Reputable, sophisticated economic models all 

show that comprehensive clean energy legislation is the pathway to 

creating millions of new jobs at a time when we need them the 

most. My colleague, Kate Gordon, testified before you yesterday, so 

I won’t go into detail but only note that a study we commissioned 

from the Political Economic Research Institute at the University of 

Massachusetts used economic modeling to determine that the clean 

energy job creation impact of the House version of this legislation 

plus the stimulus bill that was passed earlier this year would generate $150 billion per year in new clean energy investments in the 

United States over the next decade, most of that dominated by private sector investments, and would generate 1.7 million jobs. 

Finally, I would just like to underscore the need to include several key elements in any future package to create a green economy 

and put the U.S. on track for long-term sustainable economic 

growth. I would urge the inclusion of a Clean Energy Deployment 

Administration, a so-called green bank, to open credit markets and 

motivate businesses to invest in clean energy technologies that 

could create some new financing tools to stimulate private sector 

investment. We have seen Germany and Canada take that step to 

good effect. Senator Bingaman has that feature in his legislation, 

and I urge its inclusion in a final package. 

I would also urge more emphasis on efficiency and retrofitting 

building stocks. I think this bill takes a giant step down that path, 

but we, along with the Energy Future Coalition, released a report 

arguing that 40 percent of U.S. building stock could be retrofitted 

at great savings for consumers and commercial building owners 

and create 600,000 jobs in the process. And we have some ideas 

about how to get that done. 

I applaud the inclusion of strong tropical deforestation provisions 

in this bill. I recently completed a bi-partisan study with your 

former colleague, Senator Linc Chafee, and we put forward some 

ideas about how to strengthen and build that program out. Most 

of those are probably applicable to implementation on the executive 

branch side, but we urge you to consider those. 

And finally, the clean energy bill has provisions that would expand the use of natural gas. We think more could be done. My testimony goes into that in some detail, but I would definitely urge 

the inclusion of the Nat Gas Act, which uses natural gas to power 

particularly heavy duty trucks and fleet vehicles. 

Thank you. 

[The prepared statement of Mr. Podesta follows:] 
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Senator BOXER. Thank you. You got a lot in there, John. That 

was very well done. 

Our next speaker is Ned Helme, President, Center for Clean Air 

Policy. Mr. Helme is the Founder and President of the Center for 

Clean Air Policy, with 25 years of experience in climate and air policy. And I understand you worked on the Clean Air Act amendments. 

Mr. HELME. That is right. 

Senator BOXER. A big success for us, a bi-partisan success. So 

please go ahead, Mr. Helme. 

STATEMENT OF NED HELME, PRESIDENT, 

CENTER FOR CLEAN AIR POLICY 

Mr. HELME. Thank you very much, Madam Chairman. 

It is really a pleasure to be here. As you know, I am Ned Helme, 

President of the Center for Clean Air Policy. We are an environmental think tank based here in Washington. We also have offices 

in Brussels and Paris and New York and San Francisco and Beijing. We do a lot of work with a number of developing countries on 

the ground, China, Brazil, Mexico, Indonesia, et cetera. And we 

bring together the negotiators from the 30 key countries several 

times a year for off the record discussions helping to feed into the 

process that is going on this week in Barcelona and on into Copenhagen. 

I want to make four points this afternoon. First, I think the myth 

of developing country inaction has finally been set aside. I can say 

with confidence the announcements we have seen from several 

countries in the last few weeks, the actions we have seen by China, 

Brazil, Mexico and others are quite substantial. We no longer have 

a question about whether developing countries are going to act or 

are their partners, trading partners going to act. They clearly are. 

The second point I want to make is that Copenhagen is not 

Kyoto. We are in a different world. Kyoto was all about developing 

countries didn’t have to take any action. Whatever action they did 

was really to help Annex I developed countries meet their targets 

by creating credits under the clean development mechanism. This 

new structure is going to create a shared responsibility. All the 

countries are going to be in the same boat. We are going to move 

forward together, a very significant change from where we were a 

decade ago. 

The third point I want to make: competition for our key industries, the key piece of your legislation, S. 1733, I think it is critical 

in the transition period while we are getting China and Brazil and 

company up to speed, to protect our cement, steel, aluminum, the 

key industries that are highly internationally competitive, protect 

them in the interim while that transition is happening. And then 

once we have the transition, we can move forward in a complete 

program. 

Finally, I want to say that it is very important that we do something on monitoring, reporting and verification. If we are going to 

make sure we are successful in protecting our companies, we need 

to know what is going on in every country. So we, as the U.S., need 

to support international standards to measure, report and verify 

what is going on in every country, not simply in Annex I countries. 
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Let me turn to the specifics. I have a table over here you can see, 

and it gives you a sense—you see the red column shows you China, 

Brazil and Mexico, three key developing countries. This is the net 

of reduction below business as usual they will achieve by 2010. So 

as you see, Madam Chairman, that number is nearly—it is larger 

than what we will do in Kerry-Boxer in 2015, and it is almost 

equivalent to what we will do with Kerry-Boxer in 2020. So that 

is action today on the ground, not for the clean development mechanism, action done by China, Brazil, Mexico, China doing a lot of 

things in terms of energy efficiency, in terms of renewables, in 

terms of vehicle standards, a very aggressive program; Mexico, 

some aggressive programs as well. 

So I think this tells a story graphically. You can see the one on 

the far right, the blue is Europe and shows you that comparable, 

the action of those three countries by 2010 in terms of total tons, 

is quite comparable. 

Senator BOXER. Do you have some charts that you can give us? 

Mr. HELME. Yes, I can give you more detail. 

Senator BOXER. If you would. And BAU stands for? 

Mr. HELME. Business as usual, so the projected level they will be 

reaching. 

Senator BOXER. Thank you. 

Mr. HELME. Of course, you have to remember, Europe is under 

the Kyoto caps. 

Senator BOXER. I do know. Yes. 

Mr. HELME. That is different than us. 

Senator BOXER. But I really need that, if you could get that. 

Mr. HELME. I will be happy to do that, happy to do that. 

OK, let me turn to my point about Copenhagen not being Kyoto. 

What we are seeing here is a shift where developing countries in 

the Bali Action Plan have agreed to take nationally appropriate 

mitigation actions, NAMAs, that will be monitorable, reportable 

and verifiable, specific actions across sectors, not just individual 

projects like they did in the CDM, but full scale programs in the 

cement industry and the steel industry and the electricity industry. 

And that will be monitorable, reportable and verifiable. And Annex 

I countries, the developed nations, are asked to help with some of 

the financing, the incremental costs to make that happen. 

It is a new paradigm, very promising, looks like it has a good 

chance of being a part of what we get out of Copenhagen. I want 

to say, your legislation, S. 1733, is a perfect fit with this context 

because it provides the financing. By setting aside 7 percent of the 

allowances for R&D and for new technology and for adaptation, you 

are creating the financing part of this deal, which is really critical. 

And you are doing something significant, as you see here, in terms 

of the size of the reductions. 

So the two things that really matter in Copenhagen are: Do we 

have a real target that is substantial? And are we helping developing countries move forward? I think the answer is yes. I would 

urge movement on this legislation as soon as possible. 

Let me say a word about competitiveness. As I mentioned, I 

think it is key here that we protect our key internationally competitive industries. Your bill does that. It provides free allowances 

to cement, steel, aluminum, all the industries that are at risk. I 
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think that is key. And I think what we will see from the Finance 

Committee will offer some border tax adjustments. So if after 2020, 

one country is dragging its feet, let’s say India, we can stick that 

on that one country for that sector. So it is a much more targeted 

approach. I think that combination ensures the competitiveness, 

and that is critical. 

My final point on monitoring, reporting and verification, if we 

are going to be careful, we are going to be sure that what we are 

doing is matched by others. We need international standards for 

monitoring, reporting and verification. We know in the U.S., EPA, 

our Government, will monitor, report and verify in this country. 

What we want to be sure of everybody else is doing that. And that 

requires that our delegation to the international negotiations supports international standards for monitoring, reporting and 

verification. That needs to happen, so that is a very key piece. 

So let me close with one last point. 

Senator BOXER. You need to close, yes. 

Mr. HELME. Yes, one last point. 

We have talked a lot about protecting existing industry. As John 

said, we also need to look at the industries of the future. China and 

Korea are eating our lunch today in these new industries. Your bill 

moves us in that direction. I think the single best thing we could 

do to move the legislation, move the Copenhagen situation, is to 

move the legislation here. So I commend you. 

[The prepared statement of Mr. Helme follows:] 
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Senator BOXER. Thank you so much, Mr. Helme. 

And next speaker is Jonathan Lash, the President of the World 

Resources Institute. Mr. Lash has been President of the Institute 

since 1993, and we are very pleased to have you here. 

STATEMENT OF JONATHAN LASH, PRESIDENT, 

WORLD RESOURCES INSTITUTE 

Mr. LASH. Thank you, Senator Boxer, Senator Inhofe, Senator 

Klobuchar. I have appeared before you a few times before as a representative of the United States Climate Action Partnership, but 

today I am here on behalf of the World Resources Institute, not 

USCAP. 

If we are to achieve the goal that was agreed to last summer by 

the U.S. and other major economies of limiting warming to 2 degrees, then the U.S. needs to act immediately to reduce its own 

greenhouse gas emissions, and it must negotiate a global agreement that commits other nations to do so. 

Senate passage of S. 1733, or legislation like it, would represent 

a crucial step toward both goals. It would lay out an ambitious 

road map for U.S. emissions reductions. It would catalyze innovation and create jobs. But it would also enable us to take advantage 

of significant new actions and commitments by other countries to 

control their emissions. 

Locking in those commitments by other countries would be in our 

economic, security and environmental self-interest. Almost every 

country which is a significant source of greenhouse gas emissions, 

developed and developing, has in recent months taken actions or 

made significant proposals for emissions reductions. Mexico 

pledged to reduce emissions by 50 percent by 2050 using a cap and 

trade system. 

Brazil pledged to reduce deforestation, which is responsible for 

most of its emissions, by 70 percent. South Africa has offered a detailed plan of policies to peak and begin to reduce its emissions by 

2020, astonishing for a poor nation. Japan proposed to reduce emissions 25 percent below 1990 levels by 2020 if other nations act. 

And as you know, President Hu Jintao of China in the first 

speech by a Chinese head of state to the United Nations, pledged 

to reduce China’s carbon intensity over the coming years by a notable margin in addition to the 20 percent improvement in energy intensity that they will have achieved by 2010. 

Nations that had for years insisted that reducing emissions was 

solely the responsibility of industrialized countries are now signaling, in the words of Environment Minister Ramesh of India, 

‘‘We may not have caused the problem, but we have to be part of 

the solution.’’ 

But how much do these commitments mean? In my written testimony, I provided a detailed summary of actions and commitments 

by other countries. But can we count on them to do what they say 

they will do? Can we verify that they are doing what they say? I 

would like to focus on that point and why I believe the answer is 

yes. 

Twenty years ago when President Reagan negotiated nuclear 

arms reductions with Russia, he quoted the Russian proverb 

‘‘Trust, but verify,’’ not because he trusted Russia, but because he 
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didn’t. The treaty he signed provided the means for verification, the 

issue that Mr. Helme was referring to. 

Whether or not we start with trust of other nations, multiple redundant tools are available to verify action and outcomes. 

Verification is feasible, and provided it is included in the agreement, that agreement can be the basis for trust. We have broad experience with both developed and developing nations in international verification. Examples include the Montreal Protocol, the 

Nuclear Nonproliferation Treaty, the WTO, IMF. None is perfect. 

They all have flaws. But each of them provides a basis for the 

United States to assert its interests and monitor the actions of 

other countries. 

U.S. Governments are on the ground working on energy and environmental policy implementation and reporting in most of the 

countries of concern. We can reap benefits by taking advantage of 

this capacity. U.S. EPA, for example, has worked in China on successful efforts to improve control of SO2 and is beginning to work 

on greenhouse gas emissions, a program that we are involved with. 

There are multiple outside sources for cross-checking national 

energy and emissions data, including not only U.S. Government experts, but those of Europe and Australia and a broad array of academic institutions that have specialized in that area. 

And finally, the capabilities of satellite systems are extraordinary. My own organization has a decade of experience tracking 

deforestation around the world using satellite data. We can show 

you an individual tree being illegally harvested in the Congo basin. 

Verification is feasible, but it depends on completion of an international agreement. We can collaborate with rapidly growing developing countries to reduce global emissions, create new markets for 

low carbon technologies and services, and guarantee that the competition for those markets takes place on a level playing field. But 

international progress depends on U.S. domestic progress on pending legislation. 

U.S. commitment is a pre-condition for international agreement, 

and international agreement will make U.S. action both more effective and more secure—the two reinforce each other. The United 

States has led the world through great economic and social 

changes. It has thrived by doing so. This is an occasion for leadership once more. 

Thank you. 

[The prepared statement of Mr. Lash follows:] 
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Senator BOXER. Thank you so much, Mr. Lash. 

And our next witness is a minority witness, Iain Murray, Vice 

President for Strategy, Competitive Enterprise Institute. 

Welcome. 

STATEMENT OF IAIN MURRAY, VICE PRESIDENT FOR 

STRATEGY, COMPETITIVE ENTERPRISE INSTITUTE 

Mr. MURRAY. Chairman Boxer, Ranking Member Inhofe, thank 

you for inviting me to testify today and for the opportunity to participate in such an outstanding panel. 

Despite our deep disagreements over policy, I very much respect 

those who have preceded me and their commitment to their ideals. 

Only by maintaining a civil discourse where all views are heard 

can we ensure that our democracy reaches the right policy decisions. So I am glad to be able to present a different argument here 

today opposing passage of the Clean Energy Jobs and American 

Power Act. 

Let me start by reading you three headlines from this week’s edition of a weekly European environmental newsletter: ‘‘Britain set 

to miss 2020 carbon reduction target,’’ ‘‘Revised E.U. energy efficiency plan faces delay,’’ and ‘‘E.U. fails to agree to strategy for 

surplus carbon credits.’’ On top of that is a further headline: ‘‘U.N. 

confirms upward trend in rich nations’ emissions.’’ 

These headlines confirm something that is important to recognize. Even those nations that have taken on emissions reductions 

targets are not finding it easy even in a general financial climate 

that is conducive to emissions reduction. It comes as no wonder 

that the Hadley Centre in the United Kingdom is advising that the 

only way to reduce emissions as much as it wants is via a planned 

recession. 

As you will see in my written testimony, my own United Kingdom, probably the best placed member of the E.U. to meet reductions from 1990 levels, owing to its change from coal- to gas-fired 

electricity in the early 1990s, will almost certainly not meet its own 

reduction targets. 

Germany is beginning to realize that its 20-year experiment with 

feed-in tariffs and other subsidies to promote renewable energy has 

been a failure. Only a negligible 0.6 percent of its electricity production comes from solar power, despite $73 billion worth of subsidy this decade. 

Spain has decided to cut its subsidies to renewable energy, having realized that it has created a green energy bubble. And those 

countries that have invested in green jobs are learning that most 

of them are transitory at best. 

On top of that, the European Union’s mission trading scheme has 

been an expensive failure. It has notably failed to cut emissions at 

all, but at extreme costs to E.U. taxpayers. My colleagues at the 

TaxPayers’ Alliance in London are today releasing a study that 

finds the total cost of the ETS to European citizens amounts to as 

much as $171 billion, all for no reduction in emissions. 

Indeed, as Matthew Sinclair of the TPA told me, current climate 

change policies, the renewable obligation, E.U. emissions trading 

scheme and the carbon emission reduction target make up around 

14 percent of average British domestic electricity bills. On the in-
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dustrial side, for an average medium size consumer, the renewables obligation, E.U. ETS and climate change levy, together contribute around 21 percent to industrial electricity bills. So much for 

the industrialized world. 

I think, however, it is more important to recognize that meeting 

a global target of 50 percent reduction in emissions by 2050 will 

require significant reductions, even on a per capita basis, of emissions in the developing world. This is unconscionable. 

Increased access to affordable energy represents the single best 

way to lift billions out of poverty. While unchecked global warming 

could do significant damage to developing countries, the effect of 

leaving people in poverty now and forever, to use Lord Stone’s 

phrase, would be even worse. That is exactly why Indian Environment Minister Jairam Ramesh said just last week, ‘‘India will 

never accept internationally legally binding emission reduction targets or commitments as part of any agreement or deal or outcome.’’ 

The developing world needs to develop. If we cannot accept the 

comparative advantage that developing will give other countries, 

while we constrain our emissions, then keeping people mired in 

poverty is not a moral or acceptable solution. 

Let me finish on a personal note about something else we can 

learn from the United Kingdom. My grandfather was a coal miner 

and union official in the industrial northeast of England. I grew up 

in coal mining country. I know first hand how wonderful the people 

of coal mining communities are and how tight knit their society is. 

Unfortunately, decades of socialist government in the U.K. kept 

many mines alive when they could have been closed down organically with little disruption. And so the Conservative government 

had to close them down at once. This imposed significant hardship. 

Just as surely, the bill before this house will close down the 

American coal industry in one fell swoop, but while it is still an 

economic benefit to the Nation. The devastation this will cause to 

coal mining communities will be difficult to observe, just as it was 

in England. These communities are located where they are because 

of the pit, as we called it. They have no way to attract new industries like Senator Kerry’s fabled wind companies. 

If you pass this bill, communities will die, and ordinary working 

class people’s lives will be affected massively for the worse. Near 

where I grew up is a colliery town of Easington. It has a population 

of 5,000; 1,500 of them were employed in coal mining, and all lost 

their jobs at once when the mine closed. 

Today, 30 years later, Easington is the fourth most economically 

deprived place in England and has the highest childhood obesity 

rate in the Nation. That is what you will do to coal mining communities if you pass this bill. 

Senator Kerry said on Tuesday that the effects of climate change 

would be worse for Senator Inhofe’s constituents than the economic 

costs. Tell that to the people of Easington. Every day is a bad climate day for them. 

[The prepared statement of Mr. Murray follows:] 
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Senator BOXER. Thank you, sir. 

You know, I don’t know much about these towns in England, although I know you do. But I do know about my own State. So I 

want to put in the record the Pew Charitable Trust information. 

[The referenced information follows:] 
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Senator BOXER. You said these jobs are transitory. False. We 

show the last 10 years of growth, the big star has been the clean 

energy jobs. And that is why, and it doesn’t even count the last 

year. This is just to 2008. We have had $6 billion plus of venture 

capital funds. We have had 1,400 patents. That doesn’t even count 

this year. And in 2007, so it doesn’t even count the last 2 years, 

125,000 jobs and 10,200 businesses. 

What I am trying to tell you is—I could say this. I would say this 

about the coal industry. All of us on this committee are trying to 

make sure that we can, in fact, use the coal we have. We want to. 

We think it is important that everybody play a part in this. Without this legislation, and the—I forget, $100 billion we are going to pump into clean coal; $100 billion from these allowances. 

The chances are the coal industry’s future, not good. And here is 

the reason. We have laws in this country. One of them is the Clean 

Air Act. We now know that greenhouse gas emissions are covered 

under that Clean Air Act. We know an endangerment finding was 

put together by the Bush administration, but it was deep sixed and 

never came to light. We now know what it said, and it is what our 

Administration said. 

So our point of view is that we are working with our coal Senators, and I was very pleased that Senator Byrd’s comment, which 

is he is pleased with the improvements we are making in the bill 

to help coal country. They want to do a lot more, and I am sure 

you are going to see a lot more. 

But I just wanted to put in the record, as we will put in definitely your eloquent testimony and your heartfelt testimony. In my 

State, these jobs have been the leaders. 

Now, I brought this over here, reductions from business as usual. 

I wanted to share it with Senator Klobuchar and Senator Cardin 

and Senator Inhofe, where we could see it a little bit better because 

this counters what Mr. Murray said about the rest of the world. 

Would you go through that chart again, Mr. Helme, and tell us 

what it shows, and where you got your documentation? 

Mr. HELME. Happy to. 

Senator BOXER. Do you want to stand up and go over there? 

Mr. HELME. Oh, sure. 

Senator BOXER. You won’t have a mic, but that is OK. 

Mr. HELME. There is probably not room. Probably easier to do it 

from here. 

Senator BOXER. OK. Can you see it? 

Mr. HELME. Yes, I can see it fine from here. 

Senator BOXER. OK. 

Mr. HELME. So this is a comparison of what three key developing 

countries have done with laws that are on the books today that are 

being implemented and that are not for generating credits to be 

sold under the clean development mechanism. So these are unilateral reductions by Brazil, Mexico and China. 

And you can see the total there is almost 2 billion tons. You 

know, our national emissions are about 6 billion, so it is a third 

of our emissions today. But just to give you a sense, and that is 

made up of about 1.5 billion from China, this energy intensity program and some of the other things they have done where they are 

cutting their energy intensity by 20 percent in every sector of the 
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economy. And they have been measuring this each year. They are 

already well over 12 percent on the way to that 20 percent. It will 

be complete in 2010. 

For Brazil, it is the last 2 years of significant reductions in deforestation, several hundred million tons. And for Mexico, it is the 

new Mexican program that my colleague Jonathan Lash alluded to, 

where they are going to get about 50 million tons by 2012. So that 

is the combination of how we get those tons. 

The gray on the far left is the first phase of Kerry-Boxer by 2015. 

Remember, everything isn’t kicking in 2015, so that is why it is 

quite a bit smaller. And the green is Kerry-Boxer, the first part of 

the graph, the lighter green, is the cap itself on U.S. sources. And 

the upper piece, the supplemental red, is your provisions to take 

5 percent of the allowances, set them aside, invest them in Brazil 

and Indonesia and so on, and get reductions, not offsets, reductions 

in those countries in addition. 

So you can see sort of what the total is. In thinking about that, 

you can see that in terms of our cap compared to what China, 

Brazil and Mexico are doing, they are actually doing more. When 

you add the additional effort your bill suggests, then it is a bigger 

effort in terms of Kerry-Boxer. 

And then the final one is the E.U., and it shows you where the 

E.U. would be a minus 30. Now, the E.U. has said they will do 

minus 30 if everybody else steps up. If not, they will only do minus 

20. If they did minus 20, obviously they would be smaller than 

China, Brazil and Mexico. 

So the point here is this myth that developing countries are not 

moving and that they are only doing stuff that we pay for is flatly 

a myth, and this shows you that. 

Senator BOXER. OK. 

Mr. Podesta, I know from listening to you that you believe we 

have to take strong action now. Why is it important, if you could 

expand, because you said it very clearly. Why is it important to act 

quickly to maintain our competitive edge? And if we fail to do it, 

you know, what price do our workers pay, do our businesses pay, 

do our people pay? 

Mr. PODESTA. I tried to highlight what other people are doing investing in these technologies of the future. It is clear that in the 

21st century, we are going to turn over our energy platform, if you 

will, from the one that Mr. Murray described, which is really one 

of the late 19th century perhaps, rather than even the 20th century, to a cleaner, newer, greener energy future. 

And I will repeat one statistic I gave. In 1995, the United States 

had 45 percent of the photovoltaic market. Today, we have less 

than 10 percent. China, in contrast, has 40 percent. There are still 

strong American solar companies importing cells from China, manufacturing them here, putting them on buildings here. If we want 

to create an engine of innovation, of growth, if you look at where 

venture capital is going in the United States, it is in these clean 

energy industries. 

But they need policy signals. They need the support that is being 

provided by this bill both to push renewable energy, energy efficiency, but ultimately to put a price on carbon so that we begin 

that path toward a clean future. 
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Senator BOXER. OK. 

Senator Inhofe, I will give you an extra minute and a half. 

Senator INHOFE. Oh, that is—— 

Senator BOXER. No, no. We will give you an extra—— 

Senator INHOFE. Well, thank you, Madam Chairman. 

First of all, I say to my friend, Mr. Podesta, you have always 

been one of my most respected adversaries, and I appreciate very 

much the comment you made about natural gas. Because as you 

know, and I think everyone knows, the successes in using it as a 

fuel in liquefied natural gas, now compressed natural gas. 

But there are bureaucratic problems with that. I have a bill, the 

Fueling America Act, and I have Democrats and Republicans on 

that, to accomplish what you want. So I would like to have you 

take some time to look at it, and maybe want to publicly endorse 

it. I think you probably would. 

The comments that were made, Mr. Helme, by you and Mr. Podesta, about China. You have to keep in mind, China is still cranking 

out two a week of the coal-fired plants. Now, things are going well 

in China now. I imagine they are going to continue to go well if 

they keep that up, because as our manufacturing base seeks the 

energy necessary to operate, that is like where they would go. 

Mr. Murray, I want to get some more details on the cap and 

trade and how it is working in Europe. As you know, it is interesting that the European Environment Agency, Madam Chairman, 

the EEA, reported in August that Europe is now likely to meet its 

Kyoto targets. And they go on to elaborate, this is the EEA, the 

reason emissions reductions ‘‘reflect the effects of global economic 

recession which began in 2008, which resulted in reduced industrial output and reduced energy consumption by industry and correspondingly reduced freight transportation.’’ So Europe is on track 

primarily because of the recession. 

So Mr. Murray, this is pretty relevant as to what is happening. 

It is because there is a view in the Senate that the Kerry-Boxer 

20 percent target reductions by 2020 is not that big of a leap because, get this, America is in a recession and emissions have 

dropped. Well, what has happened over there is happening over 

here now. This is, in fact, a global recession, which you have taken 

into consideration as you look at this chart over here. 

So anyway, give me a sense, Mr. Murray, of what our economy 

would have to look like, let’s say in 2030 when the Kerry-Boxer target of 42 percent, more than double the 2020 target; how many jobs 

would we have to lose? How many businesses would we have to 

shut down to meet the targets of this bill? Any idea? 

Mr. MURRAY. Well, Senator, one thing that we do know is that 

certainly over here, obviously business conditions and in Europe 

and business conditions here are not directly comparable. But we 

do know that from the latest data on CO2 emissions from 2008 for 

the United States, that CO2 emissions dropped about 2.8 percent. 

Job losses from December, 2007 to 2008 were 3 million, just over 

3 million. So that is about just over 1 million jobs for the percentage cut in CO2. Of course, this ratio might not hold true for international cuts, but that is about the level that we are looking at. 
543 

To get to the sort of 20 percent level of reduction, then we would 

be looking at at least 20 million jobs lost, I would imagine, quite 

possibly rather more. 

Senator INHOFE. I see. And I am going to be attending, at least 

I am planning to, the Copenhagen conference. I am interested in 

your view as to what we should expect. I guess now that President 

Bush is out of office that they will reach an international agreement, and everyone will be happy. Is that what you think is going 

to happen? 

Before you answer the question, let me tell you what I think, 

what Evan DeVore, what is his title? He is the top climate change 

official for the U.N. He made the statement, ‘‘A fully fledged new 

international treaty under the framework, I don’t think it is going 

to happen. If you look at the limited amount of time remaining and 

where we are today, it is clear.’’ 

Do you agree with him on that? 

Mr. MURRAY. Well, I think I can tell you what I think the press 

reports will be like. I think that at the last minute an historic 

agreement will be reached, tears will be shed, champagne corks 

popped. The USA, I think, will still be blamed for the near failure 

to reach agreement. But in the cold light of day, the agreement is 

simply going to be an agreement to talk again. 

The developing world, as Minister Ramesh of India has said, will 

not accept mandatory emissions reductions. The developed world 

will accept some non-binding targets for the medium term and may 

promise some funding for the developing world. But I think that 

next year the clamor will simply begin again for a comprehensive 

treaty to be negotiated at the COP meeting next December, and the 

same accusations will be hurled between developing and developed 

nations as we have seen this year. 

I think this cycle is going to continue as long as emissions reductions are the focus of lobbying efforts and not adaptation, building 

resilience, and research into new technology. 

Senator INHOFE. OK, thank you. 

Mr. Helme and Mr. Lash, you heard what Mr. Podesta said in 

terms of natural gas. I would like to ask you if you agree with his 

comments. And then for the three of you, including you, Mr. Podesta, your thoughts about China’s increasing or the continued use 

and development of coal-fired generating plants. 

First on natural gas, do you agree with him on his comments? 

Mr. LASH. I do, Senator. I favor anything that reduces CO2 emissions, nuclear power, natural gas, energy efficiency, all of it. We 

need it all. 

Senator INHOFE. I agree we need it all. 

Mr. LASH. Second, on China, a significant part of what China has 

been doing has been replacing old, inefficient, small power plants 

with larger, much more hypercritical power plants. So their coal 

fleet is now more efficient than the U.S. coal fleet. The Chinese understand exactly what was implied by President Hu’s commitment 

to make a quantitative reduction in their CO2 intensity, and I believe they are going to implement it. 

Senator INHOFE. Thank you. 

Mr. HELME. I would agree with Jonathan. I think natural gas is 

a very promising option. With the development of shale gas in this 
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country, gas prices have separated from oil prices. So we see that 

as a very attractive near term option for reducing CO2 emissions. 

Senator INHOFE. Well, I think that is right. When it came out 

last week and said that we were number on in terms of reserves, 

that wasn’t even counting shale. So there is huge potential there. 

And I also agree when you talk about all of the above, that is 

what we have been saying all along. We need oil, gas, coal, nuclear 

and renewables. 

Mr. HELME. And I agree with Jonathan on the question about 

China. They are, in fact, retiring a lot of small coal plants aggressively. They also have the most aggressive wind and renewable energy program in the world. They were No. 1 in investment last 

year, $10 billion, of any country in the world. And they have met 

their targets. Every time they set a target in a 5-year plan, they 

have actually beaten those targets, and they plan to do that. They 

see this, as Mr. Podesta indicated, a huge opportunity. 

Also, one that you will be interested in, nuclear, they originally 

had nuclear not as part of their strategy, nine gigawatts out of 

their whole thing. They are going to go to 70 gigawatts. 

So they are looking at a number of options that are promising 

in terms of the climate picture. 

Senator INHOFE. Thank you. 

Senator BOXER. Yes, finish up if you can. 

Mr. PODESTA. Just very briefly, I think that, to put some numbers on this, just since 2006, they have closed down more than 34, 

maybe as much as 50 gigawatts of power in China from small boilers. They have made a pledge to close 30 gigawatts more in the 

next 3 years. 

And I think that with respect to these investments that China 

is making, Ned said that they are eating our lunch. I suggested to 

my staff a bit ago, a different body part that begins with kicking, 

but they told me I couldn’t use that in the committee hearing. 

But I think that their investments are just astronomical. I would 

suggest that the committee might take the time—you might want 

to go over and review that. 

With respect to gas, Senator, I made the point that I think that 

replacing, particularly backing out oil, which has CO2 benefits, but 

it also has profound energy security benefits, to try to reduce our 

dependence on imported foreign oil, and move that base, particularly for heavy duty trucks, to domestically produced natural gas 

is now available to us because we can exploit these vast unconventional sources, particularly the oil shales. 

Senator INHOFE. Thank you. 

Senator BOXER. I am going to call on Senator Klobuchar. 

I just want to point out, Mr. Chairman, we have a natural gas 

title in our bill which was not in the House bill. We are moving 

forward. A lot of us agree with your point of view there. And we 

also have a nuclear title. And I think, you know, my Republican 

friends, I know where they are coming from on this. But I think 

there is room for us to work together, I hope. 

And the last point I would make, I don’t know where you come 

up with 20 million jobs lost. You kind of got that off the top of your 

head. So I just want to make sure that you know that the studies 

that we have looked at from the Center for American Progress to 
545 

the Pew Charitable Trust to the EPA analysis all predict job 

growth in America of about 2 million jobs. 

So I just needed to say we will put your testimony in, as well 

as those studies. 

Senator INHOFE. Well, let me say—— 

Senator BOXER. Yes? 

Senator INHOFE. On the nuclear and the addressing natural gas, 

it needs to be a lot stronger, and perhaps you will be working in 

that direction. 

Senator BOXER. We will be working on the floor, absolutely. And 

we hope that you will work with us. 

Senator Klobuchar, the floor is yours. 

Senator KLOBUCHAR. Thank you. 

I just wanted to follow up with some of the last questions that 

were asked about China. I know that the Wall Street Journal reported that this summer for the first time that investment worldwide in renewable energy outpaced traditional energy, and that 

China accounted for 10 percent of the world’s total, and that the 

Chinese government will invest $462 billion, that is nearly a halftrillion, in renewable. 

I know that, Mr. Podesta, you kind of let out, dangled out there 

where they are investing. Could you elaborate a little bit more 

about what they are doing and what repercussions this could have 

for our country, which oftentimes developed a lot of this technology 

but now has been leapfrogged by these other countries? 

Mr. PODESTA. Yes. They are making major investments in wind. 

They are already the largest producer of photovoltaic cells. A lot of 

that is for the export market. They have now recently created the 

right kinds of investments so that a lot of that production is going 

to being installed in China. 

A major investment on the transportation sector. I referenced the $300 billion they are spending on building out the rail and high 

speed rail. They intend to by 2011 produce 14,000 kilometers of 

high speed rail. I know that the stimulus bill put $8 billion into 

that. I wonder how many miles you think the United States will 

actually have built by 2011 of high speed rail going 200 miles an 

hour in intercity transportation, which has both reduced congestion 

and really reduced their air traffic between their cities. They are 

making major investments in building efficiency and in new technologies. 

They are using—this is one place where American companies 

have been invited into the Chinese market. I think Secretary Locke 

is over there arguing that we need to have more access to the Chinese market for American companies. One place where we have 

had some access is on building controls in particular, where the 

United States leads the world. 

But particularly, our wind manufacturers and others have been 

locked out of the Chinese market or blocked out because of their 

procurement rules there. So I know that Secretary Locke is pressing ahead to open up access particularly for American companies. 

Senator KLOBUCHAR. I just had a hearing back in Minnesota on 

exports and small businesses. And you know, there are these little 

solar companies there, places that are just dying to get into this 

market. And again, part of it is that we haven’t sent, what you 
546 

pointed out, the kind of market signals to make it easier. It feels 

to me sometimes that these little companies are way steps ahead 

of this town in terms of understanding of the demand out there. 

The other thing that we talked about at this hearing we had is 

just that the dollar is weak. There are some excellent—as bad as 

it can be for other reasons, there are some very good possibilities 

for us to actually export. And when you look at—maybe you want 

to comment on how we are doing vis-a`-vis Europe, because if you 

just say, oh, it is labor costs, I mean, they have similar labor costs 

to ours. And yet they have taken a lot of this solar market and 

they have also accounted for 82 percent of meeting world demand 

in 2008. Spain was the No. 1, followed by Germany. 

You know, what are our prospects for moving ahead in terms of 

this energy race? We won the space race in the 1960s, and that 

was because we put a singular focus of this Nation in getting 

ahead. What do you see as our prospects of moving up in the ranks 

here? Mr. Helme. 

Mr. HELME. Well, I think it is critical. And I think the bill that 

you have before you will help in that regard. 

I just wanted to add on this China question, you know, we often 

think of the Chinese 5-year plans. Oh, this is the plan, and they 

are not really going to make it. Look at renewables. They had a 

target of 30 gigawatts of wind by 2010. They have upped that to 

100 because they passed the 30 gigawatts in 2006. Same thing in 

solar. They were at 1.8 gigawatts. They moved that up to 10 because they beat the solar target. 

Senator KLOBUCHAR. So are they going to have their own renewable electricity standard? 

Mr. HELME. Yes, they do. They have an RPS like you do in Minnesota. It is 15 percent. And I think very likely, President Hu will 

announce as part of the Copenhagen scene that they are going to 

step that up even further. I think we can expect a significant move 

there and similarly on hydro. 

And I think the other thing that is interesting, I understand the 

discussions with the U.S. on this bilateral agreement on technology, we would have thought CCS would be the top of the list. 

Apparently, some of the ball bearings that are in these windmills 

are the kinds of technologies China is saying we really want collaboration with the United States on these technologies. 

So it is a very serious business, and you know, it is a sign that 

we are seeing real movements. And I think for us, as Mr. Podesta 

said, you know, we need some real incentives to help those companies because these guys are out there, and they are fast, and they 

want our technology, and they want to manufacture it in China. 

Senator KLOBUCHAR. Yes, I have been actually frustrated with 

the renewable standard we have right now. It is not coming 

through this committee, but the bill in the House and the one in 

the Senate Energy Committee is arguably about where we are. It 

is not aggressive enough. And I know that Senator Udall has been 

working on this as well. We have a bill that is similar to the Minnesota standard because we have just seen this growth in the 

green jobs in our State while the rest of it has been—we haven’t 

seen that kind of growth. 
547 

And it was again a bi-partisan Republican Governor signed it; 

nearly unanimous support from our legislature, Democrat and Republican. And people believe in it, and we are seeing that kind of 

job growth. 

And so when I have seen that in our State and seen the buy-in 

from people because they can get a piece of the benefits, I just don’t 

understand the kind of resistance that we are seeing to an electricity standard when you see what has happened in these other 

countries. 

Mr. HELME. And it makes a huge difference on the CO2 front, because once you have built those plants, we have done the modeling 

in a number of States, once they are built, you run them, and that 

is what we are seeing in China. China is saying, you know, I 

showed you that chart with 1.5 billion tons with their energy efficiency. There is another 1.2 billion tons in the renewables available, huge. 

Senator KLOBUCHAR. Right. 

Mr. HELME. So once you have done it, and I think it makes sense 

that both cap and trade and the renewables standard, not just cap 

and trade, because you don’t necessarily build the renewables if 

you just have cap and trade. If you build the renewables first, then 

the cap and trade pushes you to run them harder, which is great. 

Senator KLOBUCHAR. All right. Thank you. 

Senator CARDIN. Let me proceed, if I might. Let me first start in 

asking my question to acknowledge that I strongly support the 

United States moving forward. I think it is in our economic interest 

to do that regardless of what happens internationally. 

But I do believe the international community is responding. And 

your testimonies here today certainly give us chapter and verse of 

what is happening in the major countries of the world and where 

the United States, if we want to be competitive, we are going to 

have to move, or otherwise we are going to lose jobs. So it is important that we take action. 

And I also just really want to respond to some of the concerns 

Mr. Murray has raised. If we are successful in Copenhagen, and I 

certainly hope we are successful in Copenhagen, it is going to be 

a first step. We have a lot of work to do after Copenhagen. 

I mean, in Copenhagen we hope that we have commitments to 

move toward targets, and we have a mechanism to get us to those 

goals and that there is an adequate financing mechanism to deal 

with the legitimate concerns of the developing world. 

And I want to see in Copenhagen also a commitment to move forward on an issue that you raised, and I think several have raised 

during the course of the last 3 day, and that is the concern of leakage and the concern of enforcement. 

So what I hope will happen, and we know that in the Housepassed bill there was a provision for what is basically a border adjustment in the event that the United States moves forward and 

other countries do now, that their products would be subject to a 

border adjustment for the cost of the carbon reductions that are not 

reflected in that product. 

And what I have been urging is that we would be much better 

off doing this in Copenhagen under the framework of a global climate agreement than under the WTO being challenged where it is 
548 

unclear as to whether that is an adequate mechanism to deal with 

this issue. 

If we were successful in getting that type of negotiations in a climate agreement, then you really are saying that you have an international responsibility to meet your international targets, not what 

one country says you need to meet, but what the international community has said that you meet. 

And by the way, the adjustments could go to international funds. 

It doesn’t have to go to a particular country, so they really are 

achieving the goal set out in climate change legislation. 

Now, I have been told this is going to be difficult. It is going to 

be difficult to get China or India or other countries to agree on this. 

Everything is difficult. Nothing is easy in the international community. 

But I do think that the concern of individual countries action, 

which is a red flag internationally, as well as the political concern 

that the United States may very well act, and if India and China 

do not, does that mean that we are not going to achieve our international targets, can be answered through an enforcement mechanism that speaks to each country having to meet its international 

responsibilities. 

John Podesta is one of my heroes on these issues. I welcome your 

thoughts, Mr. Helme. I welcome your thoughts, Mr. Lash, Mr. Murray, as to whether this mechanism makes sense. 

Mr. PODESTA. Well, Senator, I think that there is a timing question. I think the bill basically proceeds in the right direction, which 

is to take the trade sensitive and energy sensitive industries and 

provide extra allocation to them so that they are buffeted from any 

increase in their cost in the near term while we work out the border adjustment assistance procedures. 

I think in my own view that needs to happen, but chances of that 

happening between now and Copenhagen I think are relatively 

small. And I think the one thing that I think all of us would probably agree with is that, and I certainly agree with what Mr. Helme 

said, we are going into, Copenhagen is not Kyoto. We are going into 

a different framework. 

And I think it is really critical that the national commitments 

that we have talked about here today, from the Chinas, from the 

Indias, from the Brazils, from the Indonesias, from the South Koreas, Mexico be worked into and bound to in an international 

agreement so that we can see the overall picture. 

Senator CARDIN. With enforcement? 

Mr. PODESTA. And people take on internationally binding commitments. That is my hope. 

Senator CARDIN. With enforcement? 

Mr. PODESTA. With enforcement. I think that goes to the question of being verifiable, measurable, and having a mechanism that 

you really have integrity in the system, which again Mr. Helme 

discussed. But I think that is the first step. 

And as we are doing that, we need to work out these border adjustment questions, but I think they are best worked out in the 

way the Chairman’s mark does it, which is to provide those allocations in the near term. 
549 

Senator CARDIN. With the Chairman’s permission, I would like 

Mr. Helme to respond. 

I would just urge you all to just get stronger international interest on dealing with the enforcement issue. I mean, I think it is a 

critically important issue for us to resolve in America, to get our 

bill done. But it is also important to reach the international targets. It is going to be an issue in every country. 

Mr. Helme, if the Chairman—— 

Mr. HELME. I agree completely with Mr. Podesta’s thoughts on 

this question of the border tax adjustment. In fact, India and China 

have talked about putting a provision in the treaty that says you 

cannot have border tax adjustments. So I think it would be a very 

tough sell, but I think your question about enforcement is critical, 

and we do need to go there. 

This is one place where I have been happy with where our delegation has come forward. They basically suggested that we use a 

model where each country would do national communication with 

all of its data, its inventories, every 2 years. Currently, developing 

countries can do it when they please. They don’t have to do it every 

year. 

I think they are agreeable to it. I sat down with the Indians. 

They were willing to go for this route. Every 2 years, you have a 

monitoring, and you have reporting. You set it up like the WTO, 

and I am not a WTO lawyer, but my understanding of the way the 

WTO works is you put your stuff on the record, your performance. 

You are open to question from all the other parties, the other countries in the U.N. process, and there is a name and shame sort of 

process here to really focus the light of day on what we are and 

what we are doing. So I think that is a doable way to get there. 

The other piece that is critical, though, Senator, I think is that 

we also have to look at what our compatriots in Annex I, the developed countries, are doing. We can’t argue that, oh, we can’t have 

these international standards. There is a real fear on the part of 

our delegation of what the Senate thinks, and they, oh, we 

shouldn’t have international standards because we shouldn’t have 

anything more than China is doing. 

And my sense is, in fact we desperately need those international 

standards so that it is transparent, so we can all see it, and in that 

kind of WTO process it is very public what is going on because that 

is the heart of how we get this done. 

Senator BOXER. Thank you. 

Senator Udall. 

Senator UDALL. Thank you, Madam Chair. 

And thank you to the panel. It is great having you all here today. 

Mr. Lash, you testified that the Chinese government knows its 

energy use is unsustainable, which is in contrast to some members 

of this committee that believe that China will never take action to 

reduce emissions. What makes you believe China is changing? Are 

there statements by its leaders or facts on the ground? I mean, 

what is happening? I am going to expand it out to the panel after 

you speak on this subject. 

Mr. LASH. So, all three of the indicators that you mentioned are 

present. The Chinese signed on to the commitment this summer 

that we should limit emissions in order to achieve no more than 
550 

a 2 degree warming. They understand that that is impossible to 

achieve if their emissions continue to grow at the current rate. 

President Hu Jintao explicitly and unequivocally committed 

China to reduce their carbon intensity in coming years, and they 

have done that rapidly over the last 4 years, and will, as we have 

said often, by next year have done a 20 percent. 

We have talked about the whole set of policies they are implementing to reduce their energy growth. But what is much more important is that they are acutely aware that they will have to commit to a date at which their emissions peak and start down. The 

world can’t do this without both the U.S. and China committing to 

that process. 

And they understand that by buying the 2 degree target and by 

buying into a Copenhagen agreement, they are accepting that they 

will have to start their emissions down. 

I spent last week in China. I met mostly not with government 

officials but with business leaders of non-state owned enterprises. 

And President Hu’s speech had a profound impact on them. They 

all accept that they will be operating in a low carbon market, that 

the incentives are all going to be for this new economy, not the old 

economy. They are going there. 

Senator UDALL. Mr. Helme or Mr. Podesta. 

Mr. HELME. Yes, I would agree with Jon and couldn’t say it better than the way Jonathan said it. And I think this last point is 

critical. Up until that speech in New York a month ago, it was all 

about energy efficiency. It was all about things that were win-win, 

that made sense. You know, they have big oil imports just like we 

do. That is why they did the car standards. 

This is a shift. When he said we are going to have carbon intensive standard, that is a major shift. And as we have seen with 

these 5-year plans, these things get implemented. They follow 

them. That is what a command and control economy is about. 

And so I think we are going to see a big shift, and I am hopeful 

we will see that announced at Copenhagen. 

Mr. PODESTA. You know, we have gone through some of the commitments they have put on the table. I think the one question you 

might ask is why. And I think actually there are two answers to 

that, or maybe three. 

One is they get why creating a platform that creates greater energy efficiency creates a stronger growth model as a first matter. 

Second, they sense that the new industries of the future, as we 

suggested, all of us I think on the panel, are in these clean energy 

technologies. And they want to be leaders and first in those technologies, so they are putting enormous amounts of resources into 

them. 

They want to be the leader in electric cars. They want to be the 

leader in high speed rail. I mean, you could go down the list, and 

they are making tremendous investments. 

But third, and I would say this is probably of equal stature to 

the others, is they are very vulnerable to climate change, very vulnerable to crop loss in the north. They are engaged in very large 

projects to move water from the south to the north. Their coastal 

regions where so much of their economic development has been is 

highly subject to storm surge and sea level rise. The loss of the 
551 

water resource in the Tibetan Plateau has enormous implications 

for their stability going forward. 

So I think, you know, they get it. I guess it helps to have a government that is filled with engineers, but they are a bunch of engineers. And I think they get it, and they made the turn, and they 

are moving into this clean energy future. 

Senator UDALL. Thank you. Thank you very much. Great panel. 

Thank you. 

Senator BOXER. Thank you so much, Senator. 

Senator Merkley, followed by Senator Lautenberg. 

Senator MERKLEY. Thank you very much, Madam Chair. 

We have been hearing in various testimony and comments different stories about Chinese strategy for the future of coal. We 

have heard that they are building two to three plants a week and 

planning to do so forever. We have heard that they are building 

new plants to replace older plants, and the newer plants are much 

more efficient. And we have heard that they are considering changing dramatically coal and its future in the Chinese energy economy. 

I was wondering if you all can bring your expertise to bear and 

kind of give us a sense of where is China really headed on coal. 

Mr. LASH. Senator Merkley, I would emphasize two points. They 

are, like the United States, heavily dependent on coal now, and 

they understand that they cannot change that in a few months or 

a few years. But they are taking measures to substitute much more 

efficient and therefore lower pollution plants for old inefficient 

plants at a tremendous rate. 

I would repeat what I said. Their coal fleet is now more efficient 

than the U.S. coal fleet because they have had this high turnover. 

But they completely understand that they cannot go on growing on 

the basis of coal-fired power over the next 20 years and still meet 

the targets that they are setting for themselves in terms of reduced 

carbon intensity, ultimately having their emissions peak, and 

achieving no more than a 2 degree warming. 

So if you work with all of their semi-official think tanks, which 

all of us do, they are all heavily modeling when can they peak 

emissions and start down; where do they have to invest; how quickly can they do it; and what can they offer the United States. They 

are frankly mystified that we haven’t offered them anything. 

Senator MERKLEY. So in terms of simple points for public dialogue, would it be accurate to say that, yes, they are building two 

per week, but they are replacing two per week with more efficient 

coal plants? 

Mr. LASH. I actually think that figure is no longer true. I don’t 

think they are building them that fast. But yes, they are building 

new coal-fired power plants, and most of that is now going to replacing inefficient plants because the growth in energy demand 

was slowed by their commitment to improve energy efficiency. 

Senator MERKLEY. Have they reached a point within the coal energy economy where total carbon dioxide production has actually 

leveled off? 

Mr. LASH. No. If they would commit to do that sometime before 

2030, it would be a huge achievement. It would signal that we are 

really going to move forward. 

Senator MERKLEY. OK. Thank you. 
552 

Mr. Podesta, I appreciate your support for the Clean Energy Deployment Administration proposed by the Energy Committee. I 

have proposed creating within that organization a program to provide low cost financing to do energy efficiency retrofits up front. 

And I was wondering if you were familiar with that, and of course 

the concept is folks would make the loan payments out of the value 

of the energy savings but would get the work done earlier, create 

jobs and save a lot more. 

Mr. PODESTA. Senator, I would heartily endorse that idea. I think 

there is generally a financing problem with respect to, particularly 

right now, with respect to getting money flowing and moving. And 

I think that as we have seen with the Canadian bank, the German 

bank, providing some loan guarantees, some loan benefits, credit 

enhancement can really be effective at low cost and return money 

back to the Treasury by creating a revolving fund that produces 

this, you know, the flow of capital into clean energy in general. 

But this building efficiency problem is a particularly vexing issue 

because generally the builder, the real part in interest, et cetera, 

at the front end is not the person who is paying the energy bills 

at the back end. And I think that the more we can build models 

that create the right financing mechanisms, build them in. 

We put out a paper with the Energy Future Coalition that suggested both providing more financing in that sector, but also ways 

of essentially converting mortgage-backed instruments to capture 

the value of the reduced energy payments going forward. I think 

that would be tremendously helpful, and I think it has proved to 

be vexing particularly in the single family or multiple unit housing 

sector to get what really was promised, I think, by the recovery 

bill, really rocking and rolling, if you will. 

Senator MERKLEY. Thank you very much. 

Thank you, Madam Chair. 

Mr. HELME. Can I respond? 

Senator MERKLEY. I am out of time. 

Senator BOXER. We need to move on. 

Senator Alexander. 

Senator ALEXANDER. Thanks, Madam Chairman. 

Thank you all for coming. 

I just had a couple of questions I wanted to think about in terms 

of our position in the world. 

Mr. Podesta, I know you worked on this pretty hard. We have 

talked about it, as a matter of fact, before. Looking down the road, 

do you think it would be a good idea in our country as we think 

about trying to encourage carbon-free forms of energy, and I am 

not talking so much about the cap and trade, which I have expressed my—I have a different suggestion—but I am talking about 

the part of the bill that is likely to be added to this bill in terms 

of encouraging renewable energy and other forms of carbon-free energy. 

Do you think it would be a good idea for that to be technologyneutral? I mean, in other words, should the production tax credit, 

should the renewable energy standard be a standard that includes 

all forms of carbon-free energy production? 

Mr. PODESTA. Well, I would like to see a lot more carbon-free energy production, and I think that the question is whether there 
553 

could be, I would suggest to you, Senator, that what might make 

sense is to add on top of the renewable electricity provisions, some 

additional benefits for carbon-free energy. If you are specifically 

talking about nuclear, I think that is probably the way to go. 

Maybe I answered your question. 

Senator ALEXANDER. Well, yes, but—— 

Mr. PODESTA. I think that the targets in the bill would be insufficient if you are talking about a blended program. 

Senator ALEXANDER. Why would we encourage, why would we 

have a subsidy, why should 75 percent of the renewable energy 

subsidies go to wind power? 

Mr. PODESTA. Well, there is a heck of a lot of subsidies that already go to nuclear power, and I think we are talking about adding 

some more. And I think there are externalities. I am not, you 

know, Senator, I just—— 

Senator ALEXANDER. No, let’s be specific about it. I mean the 

Obama administration says we want to make 20 percent of our energy from wind, the way I compute it, with a production tax credit 

with no cap on it, that is $170 billion over 10 years. There is a 

6,000 megawatt production tax credit for nuclear. That is the way 

I compute it. That is $6.8 billion over 8 years. 

So whether it is solar or whether it is wind or whether it is geothermal, why—— 

Mr. PODESTA. But there are loan guarantees, there is Price-Anderson. I think you have to do a full accounting, and I think 

that—— 

Senator ALEXANDER. In terms of loan guarantees, wouldn’t it be 

better to say let’s have $100 billion of loan guarantees for all carbon-free technologies, including wind and including solar and including geothermal? Wouldn’t it better to have a production tax 

credit for all carbon-free technologies? I mean, why should we be 

picking? If I were picking, I would pick nuclear and leave wind 

alone. Someone else might pick wind and leave nuclear alone. But 

why would we exclude nuclear? It is 70 percent of our carbon-free 

electricity. 

Mr. PODESTA. I think, Senator, if you are looking at a full cost 

accounting, including storage, you know, I think that you would 

have to look at are you providing additional benefits to those technologies. In the past, it is clear that the U.S. subsidy policy to date 

has favored nuclear, not these renewables. 

Senator ALEXANDER. No, sir. That is absolutely wrong. The EIA 

has done a study on that at the request of several Senators, and 

wind is far and away the big winner. I mean, wind got 31 times 

more subsidies per kilowatt hour than all other renewable forms of 

energy, not including nuclear. 

Let me ask one other question while we—— 

Mr. PODESTA. Let me put my numbers in for the record, then, 

Senator. 

Senator ALEXANDER. OK, sure. I would love to have them, but 

the EIA says it is 31 times other renewables, and if you add up, 

all I am saying is looking forward, shouldn’t the production tax 

credit, the renewable energy standard, all those be carbon-free 

standards, rather than picking and choosing winners. 
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Mr. PODESTA. It depends on where you want to place the number 

for. Of you want to take the carbon-free number up a good deal, 

then I think you and I might—— 

Senator ALEXANDER. Here is my last one, we have 30 seconds. 

Mr. PODESTA. I don’t know what the Chairman would do, but you 

and I might have something to talk about. 

Senator ALEXANDER. I have 30—oh, I do. You know I do want to 

take it up, and number. My question is, the President said at a 

town hall meeting in New Orleans we would be stupid, in his 

words, not to use nuclear power because Japan and France are 

doing it. I was delighted to hear him say that. He went to the U.N. 

and made a speech about climate change and didn’t mention it, 

even though China is starting a new nuclear plant every 2 or 3 

years. Japan is—you know the story. France is 80 percent nuclear. 

What can we do to get the Obama administration as interested 

in nuclear power, which produces 70 percent of our carbon-free 

electricity, as they are in building windmills? 

Mr. PODESTA. Well, Senator, I don’t speak for them. I think that 

you ought to talk to the President directly about that. 

Senator ALEXANDER. I would be glad to. I would be glad to. 

Senator BOXER. I think, Senator, if you did speak with the President, and you have spoken with Steven Chu, they are very interested. And I am going to reiterate this again, because this is an ongoing discussion. 

The modeling shows that under the Kerry-Boxer bill, we will 

have more than 150 nuclear power plants built in this country. 

Under the Senator from Tennessee’s plan, it is 100 plants. There 

are more plants being built because when you put a price on carbon, that is what happens. 

In addition, I don’t know why the Senator is so hostile to the bill. 

We are giving half a billion dollars over the life of the bill to nuclear power plant people in order to train workers, which they 

would have to do on their own for safety. And that number may 

well go up because Senator Graham is working with Senator Kerry. 

I wish the Senator from Tennessee would join your little group and 

let’s talk. 

Senator ALEXANDER. I have tried to say to the Senator repeatedly 

what my views are. I think the economy-wide cap and trade doesn’t 

work with fuel. I think it adds costs, and I have a list of things 

that I think would help produce more nuclear power. We have had 

that discussion before. 

Senator BOXER. We will, and we will continue. 

Senator Lautenberg. 

Senator LAUTENBERG. Thank, Madam Chairman. 

And thanks to you for being here to express your views. They are 

critical in what we are doing. As we all know, our goal long term, 

83 percent by 2050, has to be met in order for us to do what our 

responsibilities demand that we do. In order to get there, we have 

to be on a glide slope that says by 2020 that we have to be reduced 

by 20 percent. 

And so I ask—John Podesta, good to see you. The E.U. has set 

even stronger emission reduction targets, as have Japan and other 

economies. Don’t we risk falling behind other countries in the race 
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to lead the world in clean energy technology if we don’t stick with 

our strong short-term target? 

Mr. PODESTA. Well, Senator, absolutely. I think that, again, as 

my testimony indicates, I think that the world is rushing ahead of 

us, and if we don’t set the right policy framework for these new investments, we are going to be left behind. Business is going to go 

over there. Production is going to go over there. And they are going 

to service those markets. 

So it is I think critical to get this bill passed, and get it passed 

soon. 

Mr. HELME. I would agree on that point. I just want to add one 

thing that is very important in your bill, and that is this idea of 

a supplemental goal. You have the minus 20 and then you have the 

investment in R&D and you also have the investment in clean 

technology. And this is a critical piece for the international negotiations. It is a critical opportunity for developing our players, our 

companies making investments in these key emerging economies. 

So it is a brilliant piece you have in that bill, and I hope you keep 

it in. 

Senator LAUTENBERG. And you know, involved in this is a benefit 

that we didn’t plan for and haven’t paid for, and that is America 

has gained respectability from its poor behavior about environment 

in the past. So at least now other countries believe that we mean 

what we say, and we are going to hold to our mark. So that is a 

real jump up from where we were. 

The European Union invests nearly 20 percent of its climate related spending on clean energy research and development. And 

while we thank our Chairman for increasing funding for R&D 

above the levels in the House bill, I think that we are still falling 

behind other countries. 

And will they gain a competitive advantage if we lack the commitment to invest in R&D for the next generation of energy technology? Anyone? 

Mr. LASH. We earlier, Senator, all talked about the extent to 

which that is already happening. In country after country, those industries are developing rapidly because they are making an assumption about tomorrow’s markets that we haven’t yet grasped. 

Senator LAUTENBERG. We saw an interesting thing in New Jersey last week. There was a groundbreaking ceremony for an Italian 

company that wants to build solar panels here. They are really 

good at it. The panels apparently, as we heard, are really high producing, very effective panels. 

But they are coming to New Jersey to build the plant. That 

means other countries will bring their technology to us so that we 

can perhaps be in the race, although I— Mr. Helme, what is the 

single biggest thing we can do in our committee here to send a 

positive signal as we go into the international conference in Copenhagen? 

Mr. HELME. There are two pieces of your bill that are critical. 

Passing your bill is No. 1. That is the most important thing. 

The two things that are critical are—— 

Senator LAUTENBERG. Even they agree. 

[Laughter.] 
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Mr. HELME [continuing]. The target, the minus 20, plus this supplemental piece, and the fact that the supplemental piece says we 

are serious about putting some money on the table to assist developing countries in this new architecture. 

Those two elements are critical. That is the test of our stance in 

Copenhagen. Are we on the line for real reductions? And are we on 

the line to help others make that move? 

Mr. LASH. Senator, could I add one word to that? 

Senator LAUTENBERG. Sure. 

Mr. LASH. It is essential that the legislation that you pass include provision for international adaptation, not for all countries, 

but for the poorest countries. We have ratified the framework convention on climate change which explicitly commits us to that. It 

is a part of the negotiations that is essential. It won’t be expensive, 

but it is necessary. 

Senator LAUTENBERG. Well, the one last thing, Mr. Lash. Both 

Europe and Asia have made substantial investments in passenger 

rail. It built sophisticated high speed networks, and perhaps you 

know, a thing of mine has been Amtrak and high speed rail. 

Might some money, more money spent there help improve the 

quality and the reach of our passenger rail system, with all of the 

benefits that come, not the least of which is better use of energy 

and, of course, all of the other advantages that go with that? 

Mr. LASH. As we impose limitations on carbon, the necessity of 

having high speed rail to replace short haul aircraft is going to be 

obvious. And it seems a terrible shame that we are not making 

that investment now, and we are rather waiting until it is an emergency later. 

Senator LAUTENBERG. Thank you. 

And thanks very much, Madam Chairman. Thanks. 

Senator BOXER. Thank you so much, Senator Lautenberg. 

Senator Specter. 

Senator SPECTER. Thank you, Madam Chair. 

Mr. Podesta, picking up on your statement looking for more energy sources, more carbon-free energy production, in my State that 

may pit natural gas versus coal. And that is one of the factors that 

a Pennsylvania Senator has to balance in looking at this bill. 

What do you think the future of coal will be now that there has 

been this enormous discovery of natural gas on the Marcellus 

Shale? 

Mr. PODESTA. Well, I think there is enormous opportunity on the 

natural gas side, and it is obviously about 50 percent of the CO2

production of the use of coal. And I think switching in the short 

term, in the near term switching particularly the oldest coal-fired 

power plants over to natural gas is it would be positive step from 

a climate perspective. And I think there is plenty of production capacity in the United States to do that economically. 

In the long term, both sources really require the investments 

that this bill is making in turning those sources of energy into carbon-neutral sources, but through carbon capture and sequestration. 

Senator SPECTER. So you think coal can survive, flourish with 

the direction that this bill will take the whole energy field? 

Mr. PODESTA. I think this bill gives the lifeline to coal to become 

an energy source in the future, not just here, but in China where 
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there is, you know, the other places we are talking about. But we 

have to find a way to manage the carbon load that is coming from 

coal, and that requires much more investment in development of 

the technology, testing it, demonstrating it, creating a regulatory 

regime for carbon capture and sequestration. And again, I think 

the bill has very strong provisions in it for that. 

Senator SPECTER. Mr. John Rowe this morning, on behalf of 

Exelon, testified that the renewables are more expensive. In the 

stimulus package, we have allocated some $70 billion, some estimates as high as $80 billion, to renewables, solar, wind and hydro 

power. 

Mr. Helme, let me ask you, to what extent will that enormous 

investment speed up the process where the renewables will be on 

the market and bring the price down so that they can be competitive with other energy sources? 

Mr. HELME. I think we have some good track record on that. In 

terms of my colleague at the end of the panel here said that he 

thought the German feed-in tariff had been a failure. I don’t have 

the slide with me, but I can show you that the price of renewable 

wind power and so on dramatically cut, more than 50 percent cut 

in costs per kilowatt hour in a 10-year period with that feed-in tariff. 

So I think you are exactly right. When you start building these 

and there is a market, they will come, and they will drive down the 

price. 

Senator SPECTER. Do you think the 10-year period will do it? 

Mr. HELME. I think the 10-year period will really help. I think 

it would be good to have a little more certainty beyond that, but 

I think it would help. 

I want to go back to your question, if I can, Senator, on the gas 

versus coal. This new development on shale gas, it is a commercial 

operation where you are punching a whole series of holes. It takes 

a lot of workers. It has a very good economic development potential 

for a State like Pennsylvania in terms of jobs. 

You know, we think of gas, oh, it is not much employment. In 

fact, the shale gas is quite a bit of employment, good jobs in the 

same places where the coal is. So we don’t have to necessarily say 

it is one versus the other. This is an economic development engine, 

and it goes beyond the Appalachia region. It extends to Michigan. 

It extends to New York State, and of course for Pennsylvania. It 

is a very bright future and a very competitive price that could help 

on this jobs question. 

So from an economic development perspective, a push with this 

carbon bill could really help Pennsylvania in terms of the net jobs 

over time. 

Senator SPECTER. Mr. Lash, when we talk about China, reducing 

its emissions, the thought crosses my mind as to what impact that 

may have on their steel industry. That is another issue which is 

very important in my State, but really important nationally on an 

industrial base, and having steel if the necessity arises in terms of 

national defense. 

And we have enormous problems with steel imports, and have 

very little relief from the International Trade Commission. The rulings have been reversed by the President under our law. 
558 

My question to you is, with China reducing its emissions, do you 

think there is any possibility that would lead them to cut back on 

their steel production to be less aggressive on subsidized and 

dumped steel taking jobs away from the United States in violation 

of the international trade laws? 

Mr. LASH. May I respond briefly? 

Senator BOXER. Yes. 

Mr. LASH. The strongest pressure on China to reduce steel exports is the increased demand within China. They aren’t producing 

enough for their own purposes. As they reduce CO2 emissions, they 

will be forced to modernize parts of their steel industry that are 

still quite primitive in high emissions. 

In this bill, you have included a provision that provides impact 

assistance to carbon-intensive industries. Steel is at the top of everyone’s list. And it is not just Chinese competition. Of course, it 

is Indian competition as well that they are thinking of. 

Mr. PODESTA. Fixing the current problem would help too, Senator. 

Senator SPECTER. What? 

Mr. PODESTA. I said fixing the currency problem would help as 

well. 

Mr. HELME. And one quick point, on steel, China actually has 

new export tariffs to cut down the steel for exactly the reason Jonathan said. Similarly on coke, they have had significant export tariffs to discourage this, to improve their ability to meet their carbon 

target and other things. 

So you are actually seeing some very positive moves. 

Senator SPECTER. Thank you, Madam Chair. 

Senator BOXER. Thank you very much, Senator Specter. 

We want to thank this panel. You are all so smart and know a 

lot, and we appreciate it. And we would ask you to go home knowing that you really did give us a lot of information. And I am looking forward to getting that chart. 

Now, there may be some questions coming to you from panelists. 

We would urge you, please, we need them in as soon as possible, 

by tomorrow close of business. 

Thank you very, very much, and we look forward to getting the 

chart from you, Mr. Helme. 

OK. We would ask our next panel to come up: Hon. Linda 

Adams, Dave Johnson, Stephan Dolezalek, David Hawkins, Eugene 

Trisko, Charlie Smith, Paul Cicio. 

We are going to ask our panelists to come as quickly as they can 

because it has been a long day for you and for us. 

So, hi, David. 

Linda Adams, are you here? Where is she? Where are all our 

panelists? Do we know where our panelists are, Bettina? OK. 

We are asking our panelists to please take their seats. We welcome you all. We are very honored at your presence. We look forward to your wisdom as we grapple with this issue. 

I am going to introduce Hon. Linda Adams because we are so 

proud, I am so proud. She is the Secretary of the California Environmental Protection Agency, and Governor Schwarzenegger appointed Secretary Adams to this position in 2006. She oversees the 

California Air Resources Board, which is responsible for imple-
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menting A.B. 32, which is California’s market-based climate legislation. 

California EPA has undertaken a variety of studies on the impacts of climate change on our natural heritage and economy. 

So it looks like all of our panelists are here. 

So Ms. Adams, will you begin? And again, welcome. 

STATEMENT OF HON. LINDA ADAMS, SECRETARY, 

CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY 

Ms. ADAMS. Thank you very much, Senator, for that kind introduction. I am Linda Adams, Secretary of the California Environmental Protection Agency, and I very much would like to commend 

this committee for considering this very critical legislation. 

Combating climate change is no small task, and it will require 

strong political leadership. I am thankful to Chairman Boxer and 

Senator Kerry for their leadership in introducing the Clean Energy 

Jobs and American Power Act. We look forward to working with 

you to pass effective legislation during this Congress. 

California has a long history of environmental leadership, and I 

believe we can provide some on the ground experiences that may 

be useful in the development of our Nation’s energy and climate 

strategy. 

In California, we recognize the threat of climate change to our 

environment and our economy. Continued global warming will 

harm California’s health, reduce drinking water supplies, threaten 

our $30 billion agriculture industry, put our 1,200 miles of coastline at risk, and intensify deadly and devastating wildfires. 

But we believe this challenge also presents a critical opportunity 

to transition our economy to one that promotes clean energy. California has experienced tremendous economic success with the implementation of cutting edge environmental and clean energy policies. Last year alone, venture capital investment in California 

clean technology companies was $3.3 billion, over 50 percent of all 

U.S. venture capital investment, creating 125,000 new jobs. 

We also know first hand that the status quo is harmful to our 

economy. We have seen the economic consequences of our dependence on foreign oil, and a national climate policy will help us win 

our energy independence, grow a green economy, and combat climate change. 

The demand for renewable and low carbon energy, energy efficiency technologies, and sequestration technologies is likely to create significant growth industries in the coming decade. By leading 

the way, we can capitalize on the $6 trillion international energy 

market. An aggressive long-term Federal policy on climate change 

is needed now, one that recognizes and builds on the important and 

valuable role of the States. 

States are the laboratories for innovation. We are on the front 

line of promoting clean energy and combating climate change. For 

years, well crafted State policy adapted to local conditions has been 

the most dynamic driver of clean energy technology, and it serves 

as a key component of our economic development strategy. 

Existing State authority to implement clean energy and climate 

policy must be preserved. Without State authority to address climate change, the significant advances we have already made in 
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combating climate change would not have been possible. And it is 

these important advances that should be financially supported by 

Federal climate policy. 

A significant portion of allowance value under a national cap and 

trade program should come back to States to be reinvested into 

successful homegrown clean energy programs that directly improve 

people’s lives and State economies. 

The last point I would like to make, Senator, and you and I recently shared an award by Oxfam International—I am putting on 

a different hat. I am an ambassador for Oxfam America’s Sisters 

on the Planet Program. This important initiative highlights the impact of climate change on the world’s most vulnerable people, especially women. 

So I encourage you to adequately address the consequences of climate change for those with the least capacity to adapt to severe 

weather events and water scarcity. 

Madam Chairman and members of the committee, now is the 

time for action. It is time to forge the framework for energy independence and plant the seeds for our green energy future. I urge 

you to vote to free the U.S. from its addiction to foreign oil, unleash 

American ingenuity and competitiveness, and be a leader in the 

21st century global economy. 

Thank you for the opportunity to speak today. 

[The prepared statement of Ms. Adams follows:] 
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Senator BOXER. Thank you so much. You speak for me with your 

statement. 

Next, we hear from Dave Johnson, Organizing Director, Laborers’ Union Eastern Region, Laborers’ International Union of North 

America, a 12-year member. And Mr. Johnson is responsible for coordinating and overseeing organizing activity for the five boroughs 

of New York City, Long Island, New Jersey, and Delaware. 

It is a union of construction workers and public service employees, and we are very pleased you are here. 

STATEMENT OF DAVE JOHNSON, ORGANIZING DIRECTOR, 

LABORERS’ UNION EASTERN REGION, LABORERS’ INTERNATIONAL UNION OF NORTH AMERICA 

Mr. JOHNSON. Thank you, Chairwoman Boxer and members of 

the Environment and Public Works Committee. Thank you for having me here today. 

My name is Dave Johnson, and I am the Eastern Region Organizing Director for the Laborers’ International Union of North 

America, LIUNA for short. LIUNA is a proud union of 500,000 construction workers who do the hard work of building America’s infrastructure. I have had the pleasure of working with Laborers’ 

Local 10 and 55, Locals set up for our members who weatherize 

homes in New York City, Long Island, New Jersey and Delaware. 

LIUNA supports the extraordinary work being done by both 

Chairwoman Boxer and Senator Kerry and this committee and by 

the Energy and Natural Resources Committee. We support cap and 

trade as an effective way to force reductions in greenhouse gas 

emissions. A strong climate change bill will also put millions of 

Americans back to work. 

Since 2003, LIUNA has been working with contractors in 17 

States to help build wind farms. In addition, LIUNA members are 

prepared to expand the building of solar farms and to help modernize our inefficient and outdated electrical grid. The Laborers’ 

also call on Congress to invest in new technologies such as carbon 

capture and sequestration techniques, natural gas technologies, 

and the use of nuclear power as a necessary way to meet carbon 

emission reductions. 

I would like to take a moment to tell the members of this committee about the Laborers’ success in working with community 

groups, community action programs, State governments, and our 

union’s training fund to put Laborers’ into weatherizing homes. 

When the Obama administration made weatherization a priority by 

injecting stimulus money into its Weatherization Assistance Program, Laborers’ Local 55 in Newark was already working with the 

Garden State Alliance for a New Economy to provide weatherization training for unemployed Local residents. 

In January 2009, a crew of 22 LIUNA members performed energy audits, sealed air leaks with caulking, applied weather stripping around doors, wrapped pipes and hot water heaters, and installed fiberglass insulation in 30 homes to demonstrate the program’s potential to create jobs and deliver energy savings to homeowners. Three months later, 23 Newark residents graduated from 

LIUNA’s Pilot Training Program. 
578 

Since then, the Newark model has caught fire in our region. 

State officials in Delaware and New Jersey have established new 

weatherization training standards and career pipelines and have 

asked LIUNA to help contractors meet the new requirements. The 

largest provider in New York City, Community Environmental 

Center, has signed with LIUNA to train and represent its weatherization work force. 

Nearly 80 low income community residents in New Jersey have 

been trained as LIUNA installers, and hundreds more have come 

to informational meetings seeking to participate in the program. 

We will be able to deliver. 

Our training center recently won a bid to train 600 workers for 

the New Jersey Department of Labor over 18 months, and the 

State hopes to place 90 percent of the trainees in jobs. Demand for 

the program is high because all LIUNA weatherization workers 

earn family supporting wages and receive employer-paid family 

health care. 

Building on its success in the eastern region, LIUNA has 

launched a breakthrough nationwide program. LIUNA’s more than 

70 training centers around the country are equipped to provide 

local unemployed workers with training as well as access to a network of future employment connections. 

Outside the eastern region, programs have been launched in Colorado, Mississippi, Nevada, Oregon, Washington State and the District of Columbia, with many more coming online soon. Our goal is 

to train and represent at least 50,000 weatherization workers nationwide within 5 years, increasing production by nearly a million 

homes a year. 

LIUNA has also developed a market building approach. Along 

with the Sierra Club and entrepreneurs from the Clean Economy 

Network, LIUNA and the Change To Win Labor Federation have 

sponsored a national retrofit road show that is bringing together 

local and State stakeholders. 

Finally, as part of our commitment to support the emerging industry, LIUNA supports the development of national standards for 

all residential energy efficiency programs. Such standards are in 

line with the recently released Recovery Through Retrofit White 

House report that identifies a skilled and certified work force as 

one of three barriers to a successful national energy efficiency 

ramp-up. 

LIUNA applauds your bill, the Clean Energy Jobs and American 

Power Act, as a strong step forward in this legislative process. 

LIUNA, along with our partners in the environmental community, 

want to help Congress and the Administration put America on a 

path to preserve a livable climate and create a clean energy economy. 

Thank you for the opportunity to testify before this committee. 

[The prepared statement of Mr. Johnson follows:] 
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Senator BOXER. Thank you so much. 

And I want to make sure that our next guest gets his name pronounced correctly. Is it Dolezalek? You tell me. 

Mr. DOLEZALEK. Dolezalek. 

Senator BOXER. Dolezalek. Stephan Dolezalek, Managing Director of VantagePoint Venture Partners. And you are from my home 

State, is that correct? 

Mr. DOLEZALEK. That is correct. 

Senator BOXER. We are very proud of that. He joined the firm in 

1999, and he served as head of co-head of the firm’s Software and 

Life Sciences Group. Prior to creating the firm’s clean tech platform 

in 2002, he spent 23 years in Silicon Valley working with technology driven companies. And VantagePoint has established a leading practice to meet the large and rapidly growing opportunities in 

clean technology. 

So welcome, sir. 

Mr. DOLEZALEK. Thank you. 

STATEMENT OF J. STEPHAN DOLEZALEK, MANAGING 

DIRECTOR, VANTAGEPOINT VENTURE PARTNERS 

Mr. DOLEZALEK. Chairwoman Boxer, Ranking Member Inhofe 

and members of the committee, I am Stephan Dolezalek, Managing 

Director and CleanTech Group Leader at VantagePoint Venture 

Partners. Thank you for the opportunity to be with you to share 

my perspective on the need for action on this very important topic. 

Today, VantagePoint has the largest clean energy position in the venture capital industry with just over $1 billion committed. We 

are the largest stockholder in leading companies in the solar, vehicle electrification, biofuels, LED lighting, power storage, and smart 

grid industries. 

The issues that we face today in resource scarcity, energy security, climate change, and particularly in competition for global economic leadership represent a challenge and an opportunity greater 

than any that we have previously witnessed. 

The United States’ global competitors understand the transformative potential of clean energy. They are aggressively seeking 

to establish dominant positions in key markets. They are using incentives that include direct capital investments, consumer and 

business tax incentives, and market making regulatory mandates. 

China is an important example. The Chinese are currently investing far more in clean energy than the United States as a percentage of their GDP. Are they doing it to address their levels of 

pollution in CO2? Of course they are. But they are also doing it in 

large part because they believe that it will lead to greater levels 

of national wealth and global competitiveness. 

Europe has long taken a strong position with respect to carbon 

emissions, but Europe is also focused on developing industrial leadership in the new clean energy industries, whether that be solar in 

Germany and Spain, or wind in Denmark and the U.K. Even that 

global bastion of fossil fuels, the Middle East, is putting a great 

deal of capital to work in luring leading clean technology companies to locate their businesses in the developing Masdar City. 

The percentage of global capital being attracted into the clean 

energy industries is rising. However, the danger is that instead of 
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flowing into the United States, as it has historically done to support our leadership in information technology and in biotech, it will 

increasingly flow into those countries that have most clearly established their support for clean energy industries. If we fail to act, 

we will lose our technological edge. We will lose the jobs associated 

with these companies, and ultimately we will pay others to import 

their clean energy technologies the way that we today pay others 

to import their oil. 

Simply put, we can’t win if we don’t play. The Kerry-Boxer bill 

is the way to ensure that the United States is in the game. Acting 

now signals that we intend to lead not only in building new clean 

energy generation, distribution and storage technologies, but also 

that we intend to lead in developing the technologies that will 

make our existing strengths in coal, oil and natural gas more competitive. 

Our Nation is built on the notion of change and the ability to 

question the status quo. In energy more so than in any other aspect of our lives, we have drifted into a state of reliance on others. 

The sooner we get on with the task of building our energy infrastructure for the future, the greater the likelihood that when the 

rest of the world builds its clean energy infrastructure, it will look 

to U.S. companies to build and export those technologies. 

I should also note that the clean energy industries of the 21st 

century are being built all across this country. As we have already 

seen with wind and solar, next generation lighting, advanced power 

storage, and electric transport will create manufacturing jobs that 

can be located almost anywhere in the continental United States. 

The Kerry-Boxer bill has several powerful components that will 

demonstrate that the United States is serious. First, Senate bill 

1733 will be an essential step in stabilizing the boom and bust 

cycle of investing in promising new technologies by setting a price 

on carbon. A growing percentage of the Fortune 500 community 

has signaled that establishing price certainty with respect to carbon is far better for business than continued uncertainty, given 

growing certainty elsewhere around the globe. We need this certainty even more for the emerging companies that we represent. 

Second, I am pleased to see that Senate bill 1733 sets more robust targets for near term emissions. Even small increases in the 

2020 target send an important signal that we need to start making 

changes now. 

The legislation needs to be about economics and America’s 

growth potential. We have too frequently been misled into thinking 

that this is a choice between the environment and prosperity. Quite 

to the contrary, those that win the battle for clean energy jobs and 

technologies will have the prosperity to afford whatever level of environmental commitment they choose. 

Thank you again, Chairwoman Boxer, Ranking Member Inhofe 

and members of the committee, for your time. 

[The prepared statement of Mr. Dolezalek follows:] 
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Senator BOXER. Thank you so much for very good testimony. 

And now it is David Hawkins, Director, Climate Center, Natural 

Resources Defense Council. He has worked for NRDC for more 

than 30 years, except he took time out to work in the Carter administration. And he is, as most of us know, NRDC is a member 

of USCAP. And I just want to say how helpful, Mr. Hawkins, you 

have been in just helping us get to the facts, and NRDC to be there 

as a resource, it has been very helpful to all of us who work on this 

bill. 

Welcome. 

STATEMENT OF DAVID HAWKINS, DIRECTOR, CLIMATE 

CENTER, NATURAL RESOURCES DEFENSE COUNCIL 

Mr. HAWKINS. Thank you, Madam Chairman. And thank you for 

having me before the committee again. 

I would like to start with two broad points. First, protecting the 

climate is an opportunity that is disguised as a challenge. The billions of dollars that we spend to cut greenhouse gas emissions are 

going to be spent on good things. They are going to be spent delivering new industries, delivering new jobs and delivering a stronger, 

more secure energy future for us. 

The second thing is that action now is going to help, not hurt, 

total economic growth. Why do I say this? Well, left unchecked, climate disruption is also going to disrupt the economy. That is something that is easy to miss because all the economic analyses that 

we look at have a business as usual forecast for economic growth 

that assumes that climate is going to have no effect whatsoever on 

economic growth. 

We know that is wrong. We know there will be disruption of the 

economy. So any analyses that you see that suggests that there is 

a cost to doing this are ignoring the fact that the baseline economic 

growth with a disrupted economy is going to be a lot lower than 

the one you are being told about. 

Next, I would like to talk about some key design principles for 

the legislation. First, a good target for 2020 is critical. The KerryBoxer bill aims for 20 percent cut in 2020. We should keep that 

target. It is feasible without adverse economic impact. Because of 

banking, borrowing, cost controls, we can set a 2020 target with 

minimal added program costs. EPA estimates maybe a 1 percent 

additional impact. 

We need at least this reduction to put us on a path to the deeper 

reductions that we need later. And we need this reduction to support the level of ambition that we require from other countries. The 

rest of the world is anxious to match U.S. leadership, but we have 

to provide it. 

Second, cost containment must protect emission reduction targets 

and not bust the cap. The bill’s strategic reserve will provide price 

protection. We need to work within that framework and not adopt 

approaches that would increase allowable emissions. 

Third, effective offset regulation is critical. Offset compliance instruments, no less than modern financial instruments, require 

careful oversight. We have seen what divided regulatory authority 

has done in the financial markets. We must not permit that to happen in offset markets. EPA should be given primary oversight au-
597 

thority with broad consultation with expert agencies like the Department of Agriculture. 

Fourth, we need to use performance standards to complement 

the cap. A broad cap is a core tool, but performance standards for 

key sectors can help us make progress at the speed we need. Vehicles, vehicle fuels, power generation, buildings, appliance, all are 

key contributors to total emissions, and new investments in these 

sectors should be guided by effective minimum performance standards in this bill, and by retaining Clean Air Act authorities. This 

bill and current law can work effectively together and we strongly 

support retention of current Clean Air Act performance standards 

authorities. 

Fifth, the power of efficiency. Efficiency investments work. When 

we spend less money on fuel, we free up money to create jobs. Over 

the past 30 years, California has saved $56 billion through efficiency and created one and a half million more jobs. With the 

changes we recommend, the Kerry-Boxer bill can do an even better 

job of producing efficiency. We recommend that State regulators be 

directed to put at least a third of allowances given to the local distribution companies into cost effective energy efficiency investments. 

Sixth, a sound bio-energy framework is critical. Greater reliance 

on bio-energy can have great benefits, but only if it is done right. 

That means we need to calculate greenhouse gas emissions fully 

and not assume that all bio-energy has zero net emissions. 

Second, we need to remember that bio-energy on the landscape 

can be in tension with other core values, including protection of 

biodiversity, habitats, and water resources. We must maintain safeguards to assure the growing bio-energy industry does not threaten 

these values. 

To wrap up, I recently read Senator Everett Dirksen’s speech to 

the Senate from 45 years ago pleading for an end to the filibuster 

on the great Civil Rights Act of 1964. He said, ‘‘Stronger than all 

the armies is an idea whose time has come.’’ He continued, ‘‘There 

is another reason why we dare not temporize with the issue which 

is before us. It is essentially moral in character. It must be resolved. It will not go away. Its time has come. Nor is it the first 

time in our history that an issue with moral connotations and implications has swept away the resistance, the fulminations, the legalistic speeches, the ardent but dubious arguments, the lamentations and the thought patterns of an earlier generation, and we 

pushed forward to fruition.’’ 

Thank you for the opportunity to testify. 

[The prepared statement of Mr. Hawkins follows:] 
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Senator BOXER. Thank you for those words. That was wonderful. 

Our next speaker is Eugene Trisko, Attorney at Law, on behalf 

of the United Mine Workers of America. The United Mine Workers 

is a union with a membership that includes coal miners, clean coal 

technicians, health care workers, truck drivers, manufacturing 

workers and public employees throughout the United States and 

Canada. 

We are very pleased you could be here with us, Mr. Trisko. 

STATEMENT OF EUGENE TRISKO, ATTORNEY AT LAW, 

ON BEHALF OF THE UNITED MINE WORKERS OF AMERICA 

Mr. TRISKO. Thank you, Madam Chair, Ranking Member Inhofe 

and other distinguished members of the committee. We appreciate 

the opportunity to be here today to testify on behalf of the Mine 

Workers. 

Because the Chairman’s mark may be expanded with the addition of energy and other proposals or otherwise revised, the union 

does not take any position on the bill at this time. 

The UMWA has sought technological solutions to the environmental challenges facing coal use for decades. The union prefers 

balanced national climate legislation to U.S. EPA regulation of 

greenhouse gas emissions or piecemeal regional climate programs. 

The union recognizes that national legislation is the best means 

to balance competing energy, economic and environmental interests, while assuring incentives for the deployment of carbon capture and storage technology. These technologies are essential for 

meeting any global carbon reduction goals over the next century. 

The UMWA greatly appreciates the work of the Senate Coal 

Group, much of which is reflected in the Chairman’s mark. The 

union remains concerned, however, about several aspects of the 

bill. S. 1733 would impact virtually every aspect of energy supply 

and demand in this country. We look forward to complete EIA and 

EPA analyses of the legislation. 

We endorse the adoption in section 125 of non-budget support for 

the early demonstration of CCS technologies. Appropriated funds 

cannot provide the security for financial planning that developers 

of these projects require. 

We also agree generally with the bill’s allocation approach for the 

electric sector. At the same time, however, we note that allocations 

based in part on electricity sales can penalize coal dependent 

States and benefit States with lower carbon emissions. The union 

prefers the use of an emissions based formula to reduce economic 

impacts of the bill on coal States. 

Let me highlight a few of the areas of real concern to the union 

as it considers this legislation. First, the 20 percent reduction target by 2020 is certain to lead to massive switching from coal to natural gas because CCS technologies will not be widely deployed by 

that time. The bill recognizes the commercial use of CCS by 2020 

will likely be limited to a handful of early mover plants. Reducing 

our greenhouse gas emissions 20 percent below 2005 levels is 

equivalent to removing 218 million passenger cars, trucks and 

SUVs from the road by 2020, virtually the entire fleet, or eliminating all energy related emissions from 92 percent of U.S. homes. 

And this calculation assumes no growth of emissions. 
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EIA’s August, 2009 analysis of the House bill shows that coal use 

in the basic case is 47 percent below projected 2030 reference case 

levels. Moreover, if EIA’s assumptions about tripling nuclear power 

by 2030 are optimistic, utilities would have little choice but to 

switch from coal to natural gas on an unprecedented scale. We 

therefore urge moderation in the choice of the 2020 target. 

Second, CCS bonus allowances received approximately 4.6 percent of the House allowance pool, compared to an 8 percent allocation in the 2007 Bingaman-Specter bill, a bill we supported along 

with the AFL–CIO. With a smaller Senate allowance pool, a larger 

percentage allocation is needed to match the number of allowances 

provided by the House bill. The bill also needs to resolve long-term 

liability issues for early mover demonstration plants. 

Third, we need strong border adjustment provisions. I will leave 

it at that, based on the testimony of the previous panels. 

EIA’s analysis shows that offsets are critical in moderating the 

economic impact of climate legislation. We believe additional improvements to the bill are warranted on the international side 

independent of the outcome of the negotiations in Copenhagen, and 

we are working with Senate staff on this front. 

Our statement offers a few observations on the prospects for 

longer term international progress on climate change targets and 

mitigation and cautions against a unilateral approach to reaching 

targets that have not yet been adopted by the U.N. framework convention process. 

We welcome questions on all of these issues and appreciate this 

opportunity. Thank you, Madam Chair. 

[The prepared statement of Mr. Trisko follows:] 
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Senator BOXER. Thank you so very much. 

We want to thank very much our next panelist because he 

stepped in for Charlie Smith, who was the President and Chief Executive Officer of CountryMark, one of our minority witnesses. And 

Mr. Smorch is also associated with that company. He is the Vice 

President—right? Is that correct?—of Strategic Planning for 

CountryMark, and he was a former Refinery Manager. And we are 

very pleased that you stepped up to the plate. 

How is Mr. Smith doing? He has the flu, I understand. 

Mr. SMORCH. He feels better today. 

Senator BOXER. Good. Send him our regards. 

STATEMENT OF MATT SMORCH, VICE PRESIDENT, 

STRATEGIC PLANNING, COUNTRYMARK 

Mr. SMORCH. Good afternoon, Chairman Boxer and Senator 

Inhofe. My name is Matt Smorch, and I am Vice President of Strategic Planning for CountryMark Cooperative. 

I appreciate the opportunity to represent CountryMark, our employees and our farmer-owners in today’s hearing. Today, I will 

share the CountryMark story and our perspective on the Clean Energy Jobs and American Power Act. 

CountryMark’s history started in the 1920s when local Indian 

farmer-owned cooperatives joined together to collectively purchase 

lubricating oils for their farm equipment. With the discovery of oil 

in the Illinois basin in the late 1930s, the regional farmer cooperative decided to construct a refinery. 

Since then, this regional energy cooperative has grown from the 

ground up based on the hard work and ingenuity that is found in 

the American Midwest. Today, CountryMark owns and operates 

over 400 miles of crude gathering pipelines, a 27,000-barrel-per-day 

petroleum refinery in Mount Vernon, Indiana, a 238-mile product 

pipeline that spans the State of Indiana, and five product terminals 

located throughout Indiana and Kentucky. 

CountryMark is Indiana’s only American-owned oil refining and 

marketing company, and it is a true success story in the American 

energy business. Today, CountryMark employs 350 people, has assets near $600 million, average annual profits of $37 million, and 

in 2008 we had annual sales of $1.3 billion. 

Most of our employees live in rural Indiana and Illinois. In Posey 

County, Indiana, alone, nearly $27 million in wages and benefits 

are provided every year. These wages are paid mostly to hourly 

workers with little opportunity to find equivalent employment in 

the area. 

CountryMark refines 100 percent American crude that is produced in the Illinois basin, which is located in Southern Illinois and 

Indiana and western Kentucky. In 2008, we purchased more than 

9 million barrels of oil, representing $800 million that went into 

the Midwest economy. This money provides revenue to over 40,000 

people and supports employment of 20,000 people in the tri-State 

area. 

Unlike most other refiners, CountryMark is owned and controlled 

by its local member cooperatives that are in turn owned and controlled by 100,000 individual farmers in Indiana, Michigan and 

Ohio. This investment by CountryMark’s farmer-owners represents 
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a time honored business model of joining resources for the common 

purpose of purchasing vital goods and services. 

In addition to having a secure source of quality products, ownership provides an opportunity to share profits through the cooperative system. Over the past 5 years, CountryMark has returned over 

$90 million in cash to member cooperatives. CountryMark fuel and 

lubricants are delivered daily throughout Indiana and neighboring 

States of Michigan, Ohio and Illinois. CountryMark’s fuels power 

approximately 75 percent of Indiana’s production agriculture industry and about half of the public school buses that deliver Indiana 

children to school each day. 

CountryMark has taken a leadership position in the growth and 

adoption of renewable fuels. The majority of CountryMark gasoline 

contains ethanol, and CountryMark is Indiana’s leader in offering 

biodiesel. It is estimated that 85 percent of the biodiesel sold in Indiana in 2008 came from one of CountryMark’s petroleum terminals. 

Even though CountryMark only represents 0.15 percent of the 

domestic refining industry, by focusing on the integration of American source petroleum and biofuels we have emerged as a recognized leader within the Indiana energy industry. As one of the 

country’s smallest refineries, CountryMark has built a durable operation by providing value added goods and services to our farmercustomers. Our decision to actively promote renewable fuels was 

not inspired by a Government mandate, but was a prudent business decision. In our view the future market for renewable fuels is 

strong, and CountryMark is evaluating ways to increase the distribution and production of these fuels. 

The reality of a viable renewable fuels industry is that it will be 

regional in nature. To keep the cost of biofuels low to consumers, 

production facilities will need to be close to both the feed source 

and the product distribution network. CountryMark and our cooperative members are well positioned to participate in a renewable 

fuels industry. 

Cap and trade legislation will force CountryMark to rethink 

these plans because of its extraordinary cost. Even after distribution of no-cost allowances, the cost of carbon taxes on CountryMark 

are estimated to exceed $100 million per year compared to our average annual net income for the past 5 years of $37 million, this 

burden clearly indicates the magnitude of current legislation’s impact on our economic sustainability. 

As a minimum, by requiring CountryMark to purchase allowances exceeding $100 million per year, our finite capital is diverted 

to the Government, which prevents us from making additional investments that promote renewable fuels. However, a financial 

strain of this magnitude could also render CountryMark insolvent. 

The end of CountryMark as a business could deprive our Midwest 

economy of the investments previously described and trigger a cascade of financial doubt through the farmer cooperative system. 

In essence, the high cost of cap and trade legislation has the potential to destroy all American companies like CountryMark and 

the farmer cooperative system who will be valuable partners in developing and distributing renewable fuels. CountryMark urges Congress to reject cap and trade and rethink the important strategies 
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needed for this Nation to reduce its carbon emissions, develop viable renewable gasoline and diesel fuels, and avoid destruction of 

critical aspects of our economy in the process. 

This legislation as currently drafted does not achieve these goals. 

However, the goals are achievable through a transparent and practical dialog with small business refiners such as CountryMark. 

Thank you. 

[The prepared statement of Mr. Smorch follows:] 
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Senator BOXER. Thank you. I am going to talk to you more about 

that small business situation, Mr. Smorch, because I think we are 

trying to work on that. 

Now, Mr. Cicio. That is easy. Let me tell a little bit about you, 

sir. Paul Cicio is the President of Industrial Energy Consumers of 

America. He has been invited by the minority, but we welcome you. 

Mr. CICIO. Thank you. 

Senator BOXER. He has been President of the Industrial Energy 

Consumers of America. He was appointed to a number of Federal 

commissions and other bodies during the Bush administration, including the Energy Markets Advisory Committee, the U.S. Department of Interior Outer Continental Shelf Advisory Committee, and 

the National Coal Council. 

We welcome you. 

STATEMENT OF PAUL CICIO, PRESIDENT, 

INDUSTRIAL ENERGY CONSUMERS OF AMERICA 

Mr. CICIO. Thank you. Thank you, Chairman Boxer, Ranking 

Member Inhofe, and members of the committee. My name is Paul 

Cicio, and I am the President of the organization. We are unique 

organization in that all member companies are manufacturers and 

we are all energy intensive, and they come from all segments of the 

economy. 

IECA supports cost effective action so long as it does not impair 

our competitiveness. A long list of policy recommendations is included in our written testimony. 

Unfortunately, S. 1733 would impact our competitiveness. It 

would increase the price of natural gas, electricity, and transportation fuel costs substantially. Increased job losses, it will lower 

capital investment in manufacturing. It will impede increased production of manufactured goods, impede exports, and increase imports. 

Madam Chairman, the U.S. manufacturing sector has lost 5.4 

million manufacturing jobs over the last 10 years. That is 43 percent of all manufacturing jobs. Of the members of the committee, 

I am going to just list from your States the top five job losses in 

manufacturing. California, unfortunately, is at the top of the list 

with the loss of 475,000 jobs in 10 years; Ohio, 370,000 jobs lost; 

New York, 265,000 jobs; Pennsylvania, 262,000; Tennessee, 

168,000; and New Jersey, 146,000. The average job loss on a percentage basis of this committee, looking at all of your States, is a 

loss of 26 percent of all your manufacturing jobs in 10 years. 

Manufacturing output and investment per GDP has fallen consistently, and imports have risen sharply. Approximately 40,000 

manufacturing plants have been closed in the last 7 years. We have 

lost 11 industries that we were once dominant in, and by the end 

of last year we were dealing with trade imports that exceeded exports. 

S. 1733 includes provisions that provide declining allowances for 

energy intensive and trade exposed manufacturing sectors. This is 

a good thing. It is helpful. But this will not preserve the competitiveness of these companies, and unfortunately it will impair 

growth. These industries will be fully exposed to higher energy 

costs that could be substantial. Major questions exist about how 
709 

many of these companies and industries will receive free allowances and what those will mean in terms of cost abatement. 

Given the costs of S. 1733, it will be necessary that a border adjustment provision be included, and they need to take place at the 

beginning of the compliance period. However, IECA wants the Congress to know that border adjustments at large are not acceptable 

policy, and they will not work effectively. They will not stop imports of energy intensive products, and they will cause reciprocity 

of our trading partners, and they will distort trade. And this is not 

inconsequential. This issue by itself is reason not to use cap and 

trade that impose costs on the manufacturing sector. 

A simple example of why border adjustments will not be effective 

is illustrated with aluminum, a very electricity intensive product. 

A Chinese producer of aluminum when confronted with the threat 

of paying a border adjustment carbon fee will simply start producing the product that uses the aluminum and import that. So 

they will be importing instead of the bulk aluminum, it will be the 

aluminum wheels. It will be the aluminum auto parts. It will be 

the aluminum aircraft parts, and so on and so forth. And that description applies to all energy intensive products. 

Last, IECA is deeply concerned that S. 1733 will immediately 

drive up the price of natural gas. We talk to a lot of the electric 

utilities. We consistently come up with a number that the utilities 

will be short some 400 million metric tons of carbon starting in 

2012. And there is no way in those 2 years to use carbon capture 

and sequestration to offset that or nuclear. There is not scale 

enough in 2 years for renewable energy and for energy efficiency. 

So the only option that the utilities are going to have is natural 

gas. 

Converting all 400 million metric tons would amount to a little 

over 4 trillion cubic feet of gas. It is a significant increase. The 

highest increase in natural gas production that the U.S. producers 

have been able to provide is a .5 trillion cubic feet per year increase. So it is question of scale. 

When prices of natural gas goes up, it also drives the price of 

electricity up as well. 

Thank you. 

[The prepared statement of Mr. Cicio follows:] 
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Senator BOXER. Thank you, Mr. Cicio. 

I am going to start off. I want to agree with what you said that 

this bill will have an impact on our competitiveness. It is going to 

make us competitive. It is going to make us the leader of the world. 

I would suggest you read Thomas Friedman’s book, Hot, Flat and 

Crowded. Very important work, I think. He went to China and just 

saw, and he basically said to them, he was at a meeting. He testified here. It is a great story. 

And he said to the leaders there, well, are you ready to help us 

get rid of the carbon? And they said, well, why should we do that? 

We want to grow like you grow. And he says, OK, fine, you just 

continue to grow the old way. We’ll do it the new way, and you are 

going to lose the edge, and we are going to just clean your clock. 

At which point they sat up and said, oh, wait a minute. Let’s talk 

about it. And we know that the country that does this is going to 

be the leader. 

I also agree with you that the last 7 years were devastating during those Bush years. It was devastating for manufacturing. There 

is no question about it. You put it on the record. 

Now, we know, finally we found out that as a result of a lot of 

efforts of our President and some of us here, a lot of us here, it 

looks like we have turned the corner in this recession. We can’t be 

sure, but today we learned there is 3.5 percent GDP growth. We 

are very worried about unemployment because it is still a lagging 

indicator. 

But I could tell you we also have deficits and debt, and we don’t 

want to keep on thinking that we can cure all the problems. We 

need the money that Mr. Dolezalek is going to pour into these companies, the John Doerrs, the Brook Byers, the Silicon Valley, who 

came here and told us they are going to put, Mr. Cicio, twice the 

money they put into high tech and biotech combined into these 

clean energy companies. 

So I agree with the way you laid your case, but I think your conclusion is completely the wrong one, which is status quo. Status 

quo is why we are losing all these jobs. Status quo is why we had 

the recession. Status quo is why we are losing our competitive 

edge. 

In terms of our border adjustment, it is going to be WTO-compliant. Senator Baucus will see to that, that it will be WTO-compliant. And Senator Cardin is working to see if we can’t work with 

our parliaments throughout the world to make sure there is one 

simple way to adjust for this. 

So I just feel you laid the whole scenario out, but your conclusion 

is don’t do this. And I say the status quo is killing us, and let’s 

make this jump because if we do it, it is going to be the best thing. 

Now, I think the other thing that is interesting is Mr. Smorch’s 

testimony. Very important. That is why we work with colleagues 

to make sure that the small refiners got a huge break in this. They 

are going to get half—it is in the Chairman’s mark—the bill dedicates almost half of the $1.6 billion per year reserve for refineries 

to small businesses like yours. We want to sit down with you. We 

want to show it to you. Also, small business refiners are delayed 

until 2015. The rest of the refineries come under the cap a year 

earlier. 
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So I would love to just get the chance to work with you on this 

because we have made a very strong distinction between the smaller refineries and the larger ones, and this is one that I have been 

involved in since I started to sit down and write the bill. 

I have a question for I think it is Mr. Trisko. Do you believe the 

status quo will provide a sustainable future for coal dependent industries? Or will additional certainty be necessary to ensure a role 

for coal in America’s future? In other words, I know you have some 

issues with the bill, and I respect that very much. And we are 

going to be working with you, believe me, as we get this bill 

through the floor. 

But the status quo is trouble because the Clean Air Act is going 

to have to be implemented. And we think this gives so much more 

flexibility to everyone, and gives some help. So could you talk to 

me about that? 

Mr. TRISKO. Madam Chair, that is a great question, and really 

describes concisely the quandary in which we are in. The United 

Mine Workers was one of the first labor unions to support national 

climate change legislation. We endorsed the recommendations of 

the National Commission on Energy Policy in 2005. And we worked 

with Senators Bingaman and Specter in the design of their legislation in 2007, and that was supported by all the entire labor community, Edison Electric Institute, and so forth. 

Since that time, we have been struggling with the details of cap 

and trade legislation and the specific impact that specific legislation would have on coal miners. It usually comes down for us to 

a fundamental question of how much and how soon relative to the 

availability of the technology. And it is unlike the acid rain debate, 

where my colleague David Hawkins and I fought for years—— 

Mr. HAWKINS. In a friendly way. 

Mr. TRISKO. In a friendly way, in a mutual effort to encourage 

the use of scrubber technologies by power plants, because my workers recognized that that was the way to retain employment in eastern coal fields. We got a little bit in the form of some bonus allowances in the 1990 amendments, but we didn’t get nearly enough to 

protect our interests. 

Senator BOXER. So let me sum it up because I have run out of 

time for sure. What you are saying is you supported the BingamanSpecter bill, and you are looking to make this bill look more like 

that. Is that a good sum up? 

Mr. TRISKO. I think that is a good summary. 

Senator BOXER. Is that a fair way to sum it up? 

Mr. TRISKO. Madam Chair, and we are also trying, as we emphasized in our preliminary discussions with committee staff, we have 

always sought to play a constructive role in this debate. 

Senator BOXER. You have. 

Mr. TRISKO. And one of the issues that we are pursuing, and as 

far as we know are one of the few groups doing it, is there is a lot 

of concern about the availability of international offsets. There was 

testimony last month to the effect that the CDM program before 

the United Nations has been in effect for 7 years. It has generated 

only 300 million tons of CO2 offsets throughout the life of the program. And yet this bill is so critically dependent upon the avail-
731 

ability of both domestic and international offsets in terms of moderating the economic impacts of the bill. 

If you have all the offsets that you promised to deliver, the reduction of industrial shipments, and I am citing EIA’s analysis of 

the House bill, the reduction of industrial shipments is about 2 percent in the year 2030. I think that is a number that a lot of people 

could live with. But if the offsets aren’t there, if they are not available in the quantities promised—— 

Senator BOXER. Right. Well, that is why we increased the numbers of domestic offsets. But my time is over. 

Mr. TRISKO. OK. 

Senator BOXER. We will work with you. We will continue to work 

with you. We appreciate your being here. 

Senator Inhofe, we will give you an added couple of minutes on 

to your time. 

Senator INHOFE. Well, thank you very much, Madam Chairman. 

Mr. Cicio, for a minute let’s leave these euphoric utopian visions 

and get down to reality. If you are really concerned about unilateral action, stopping and realizing that your manufacturers we are 

talking about that you visited are going to have to go someplace 

for energy. If the third world countries, if China and India and 

Mexico and other places are not going to join in this thing, then 

they are going to have the access to the energy. And I quote now, 

I could quote, if there were time, from all these countries, but India’s Environmental Minister said, ‘‘India will not accept any emission reduction targets, period.’’ This is a non-negotiable stand. So 

I assume they are not going to do it. 

Now, you combine that statement with the very honest response 

that the Director of the EPA, Lisa Jackson, said, and that is that 

if we unilaterally do something in this country, it will not have a 

reduction in CO2 emissions. 

So kind of explain to me, you know, what your feeling is about 

that. It goes back to something we seem to have forgotten about. 

It is called supply and demand. Where are we going to get our energy? 

Mr. CICIO. Thank you, Senator. Manufacturers are a unique sector of the economy, and each CEO of these companies have, most 

of them have a global perspective, and they have a responsibility 

to their shareholders to protect shareholder value. And for companies who use a lot of energy to make their products, they have to 

go where the energy is affordable on a relative basis. 

I make this point because it is important. If energy went up in 

price around the globe to deal with climate change, we would not 

be damaged. But if energy cost goes up in the United States and 

does not go up in places where we compete—China and India, all 

these other places—— 

Senator INHOFE. To be competitive, they have to go where the energy is competitive. 

Mr. CICIO. They will move. And they have moved and unfortunately they are going to continue to move. And the promise of higher prices is greatly concerning to their competitiveness. 

Senator INHOFE. I appreciate that, Mr. Cicio. 

And Mr. Smorch, when you were talking about small refineries, 

we in my State of Oklahoma, we have the Wynnewood Refinery, 
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the Ponca City Refinery. We have small refiners throughout our 

State, and the Chairman made some statements about all of the relief that is there for small refineries. I read the language and I 

think it may have the effect of delaying your execution, but what 

is your feeling about what is going to happen, insofar as after you 

have heard the expressions from the Chairman, of the small refineries? 

I am very concerned about this because that is a major thing in 

my State of Oklahoma. 

Mr. SMORCH. Well, from CountryMark’s perspective, as I talked 

about, even after looking at no cost allowances that are even proposed in the current legislation, we look at our costs will exceed 

over $100 million per year. And when you compare that to our average annual income of only $35 million a year, we don’t see how 

that adds up. So from CountryMark’s perspective, I don’t believe 

that it goes far enough at this time. 

Now, as far as small business refiners and small refiners as a 

group, I am not the spokesman for all small refiners. 

Senator INHOFE. Yes, but you are the closest thing on this panel. 

Mr. SMORCH. That is true. And I can’t talk for everybody because 

everybody is different configurations and everything like that, but 

in my opinion, I think most small refiners are in the same boat 

that CountryMark is in, and it is going to be a huge cost that we 

just do not have the money for. 

Senator INHOFE. Yes. 

And Mr. Hawkins, we have been getting a lot of mixed feelings 

in discussions and references to coal. NRDC, on your Web site you 

have defined coal: coal is dirty; coal is dangerous; coal is the single 

greatest threat to civilization and all life on our planet. 

Do you agree with these statements? 

Mr. HAWKINS. I think that all of those statements are referring 

to the way coal is used today. We have many statements on our 

Web site, and in my testimony before this committee on numerous 

occasions and in the work we have been doing on this bill and the 

House bill, supporting a pathway for coal so that it doesn’t continue to be used the way it is today. That is why we support the 

billions of dollars in allowances for carbon capture and storage deployment. 

So NRDC’s position on coal is not to be against coal. It is to be 

against the abuse of the way coal is used today. 

Senator INHOFE. Do you think the way they are doing it now in 

the new plants, the new coal fired generating plants in China is 

something that is acceptable and that you would encourage in the 

United States? 

Mr. HAWKINS. The first thing to do with a coal plant, of course, 

is to improve its efficiency, and China is building more efficient 

plants, and any coal plants built in the United States should be efficient as well. But we believe that any coal plants built in the 

United States should deploy carbon capture and storage. 

Senator INHOFE. Which China does not. 

Mr. HAWKINS. That is right. And we are working in China to persuade them that this is a sensible thing to do, and every time we 

talk to them about it, they say, what is the United States doing? 
733 

So I hope to be able to come back with a stronger argument the 

next time I visit. 

Senator INHOFE. Mr. Trisko, do you think that coal is dirty and 

dangerous and is the single greatest threat to civilization and all 

life on our planet? 

Mr. TRISKO. No, Senator, I disagree with that statement. I think 

that coal has historically provided tremendous benefits to our society and to our industrial economy. Coal is a 2 cent energy commodity, basically, and what we are talking about in terms of a 

transition to a cleaner renewable energy economy is an 8 cent or 

a 10 cent form of energy. 

So when you make a transition from a 2 cent per kilowatt hour 

fuel to an 8 or a 10 cent, that transition is going to have some costs 

associated with it. 

But that being said, we know well, and EPA’s reports document 

clearly, that the utility sector has achieved a very solid record of 

progress in reducing its emissions of criteria pollutants like SO2

and NOx over the years and will continue to do so under the Clean 

Air Act. 

Senator INHOFE. Well, I hope you will take back to some of your 

people my experience in an area I was privileged to go to in Ohio, 

right on the West Virginia border, and meeting with a lot of the 

coal people and the terminology they used as to, we are talking 

about fourth and fifth generation people who have lived their lives 

for coal. And here we are dependent upon coal for 53 percent of our 

ability to run this machine called America. You can tell them there 

are several of us up here who want to help them. 

Mr. TRISKO. Thank you, Senator. 

Senator BOXER. And the bill is very much dedicated to clean coal. 

Most of this bill is dedicated to clean coal. 

Senator Merkley. 

Senator MERKLEY. Thank you very much, Madam Chair. 

And I am going to mispronounce your name, but Mr. Dolezalek, 

it sounds from your testimony that from an economic and business 

perspective, you could do more than a 20 percent reduction in 2020. 

A greater education could mean a greater investment in clean energy technologies, creating more jobs. Is that the way you frame it, 

or do you think from a business perspective the 20 percent target 

is something we can achieve? 

Mr. DOLEZALEK. Our experience has been that on a lot of these 

things, we underestimate what people as individuals can do. Obviously, as a venture fund, we tend to invest in individual entrepreneurs and small businesses. Much of what we hear in these 

committee meetings, whether it goes all the way back to the problem about Y2K, about the switch to unleaded gasoline, about the 

switch to digital television, tends to focus on how difficult it is for 

corporations, for large organizations to make those moves. 

Our experience has been that when we look at those same things 

after the fact, we actually make far more progress because we unleash the innovation, the dedication, the creativity of the American 

public. We think we will do the same thing here. But at the same 

time, obviously, there is a difficult balancing of interest. And I 

think what this bill has done a very, very good job with is to recognize that change is a hard thing to do. 
734 

We are fairly comfortable that we will actually do far better than 

these targets. But at the same time, there are those who need to 

be convinced of that, and the balancing of those interests is a delicate process. 

Senator MERKLEY. If indeed through, we had testimony earlier 

about just energy efficiency could close the gap between where we 

are now, which is closing in on 9 percent below 2005 and the target 

of 20 percent below 2005, so that is basically a 1 percent reduction 

per year over the next 11 years. 

We had testimony earlier that just energy efficiency could close 

that gap. If indeed energy efficiency is pursued aggressively, does 

that imply then that that is really going to keep a downward pressure on the cost of the allocations? 

Mr. DOLEZALEK. I think it will. The reality, again, is that a lot 

of these technologies have moved far further than even we thought. 

We have seen, for example, that the pricing of LED lighting has 

dropped precipitously just in the last year. That obviously has a 

huge impact. Lighting is roughly 22 percent of the building energy 

use. If you can suddenly take a big chunk of that cost out and save 

the energy, it has very, very immediate impacts. 

So what I think, again, we tend to focus on wind. We focus on 

solar. We focus on sort of the bigger measures. What I think we 

are going to continue to see is the surprises in this. We have seen 

it in electric automobiles which went from impossible to suddenly 

every major manufacturer in the world is announcing their electric 

automobiles. Those surprises will do a lot to keep these prices 

down. 

Senator MERKLEY. One of the efficiency issues that I am very 

conscious of because I go around before my house before I go to bed 

is all the vampire electronics, the copier, my son’s video game operation, the computers that are sitting on that look like they are 

turned off, but they are not. 

And I believe that I read that Europe has been much more aggressive about how they structure consumer electronics in terms of 

this vampire issue. And I was wondering if you or other members 

of the panel could comment on that and how we might be more aggressive on that here in America? 

Mr. DOLEZALEK. What is interesting is our telecommunications 

industry is doing an awful lot in terms of transitioning to address 

just this. And surprisingly, it is doing it even before sort of regulation forces it to happen because what we are seeing is the same devices that you use to create wireless connectivity in your house can 

start measuring what your refrigerator does, measuring when you 

are home, when you are not home, and start controlling automatically the power load in the house to be appropriate to your presence. Those technologies, again, are moving much, much more rapidly because they rely on what we have done for the last 30 years 

and they are simply reapplying them to the grid from where they 

were applied in the telecom field. 

Senator MERKLEY. I have 10 seconds left. Would you like to comment on that, Mr. Hawkins? 

Mr. HAWKINS. Yes. The opportunity to save energy consumption 

in these appliances and other ubiquitous things like the soda vending machines is enormous. And we at NRDC have been working 
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with the designers of these technologies, and there is a long list of 

ideas to improve their performance. And if they cost a few pennies 

more for the initial cost, there is a barrier however. And we can 

overcome that barrier with smart policy that rewards efficiency. 

Senator MERKLEY. Thank you very much. 

Thank you, Mr. Chair. 

Senator INHOFE. And before going to Senator Voinovich, I have 

a couple of documents I am going to ask for unanimous consent to 

be a part of the record. One is the study from the TaxPayers’ Alliance. It comes to the conclusion that of how much the British consumers are having to spend, some $3 billion in 2008, as a result 

of their efforts, along with several letters. I would like to submit 

those for the record. 

Hearing no objection, so ordered. 

[The referenced information follows:] 
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Senator INHOFE. I am not. 

Senator Voinovich. 

[Laughter.] 

Senator BOXER. Thank you. 

Sorry. Senator Voinovich. 

Senator INHOFE. It felt kind of good to take over for a minute. 

Senator BOXER. Oh, did you enjoy that? Did you put the letters 

in the record? 

Senator VOINOVICH. That is 4 minutes of my time gone. 

[Laughter.] 

Senator VOINOVICH. Mr. Trisko, you and Mr. Hawkins are sitting 

next to each other. Have you ever talked to Mr. Hawkins about the 

number of coal fired plants that the NRDC and the Sierra Club 

have fought and closed down in many States throughout the 

United States? 

Second of all, would you agree that if they are not going to burn 

coal, that they are probably going to go to burning natural gas? 

Mr. Cicio, you talked about loss of jobs. People just don’t understand that environmental policy has a real impact on jobs. And 

back in 1997 and 1998 we exported $19 billion worth of chemical 

products. Today, we import those products. In other words, the cost 

of natural gas has had a tremendous impact on our economy. 

At the beginning of the recession in the State of Ohio, the acid 

rain provisions that everybody keeps making reference to—the fact 

of the matter is that when they went into being, and you still probably had a debate at the time, I was there in Ohio when AEP built 

a scrubber, $650 million. We subsidized coal a dollar a ton so that 

could make that happen. And I would like all of you to comment. 

By the way, I want to mention, too, I am glad that you asked 

this committee to have a complete analysis of this legislation, 

which we do not have today. And we are going to insist on that, 

Mr. Trisko, I can assure you. We want a complete analysis of this 

legislation. 

But let’s face it, if coal has got a problem in terms of greenhouse 

emissions, we need the CCS technology. We know that they say it 

is 10 years away. So what do we do in the meantime? 

Second of all, Mr. Rowe was here this morning, who runs Exelon, 

and he said to me in my office, I asked him what is the future of 

nuclear. And today he testified that maybe we will get six or seven 

plants by 2020. He said that with the financial condition that we 

have in the country today, having the nuclear necessary to get the 

job done is not going to be there. 

So let’s say if we can’t burn coal, if we can’t do nuclear, where 

in the world does this country get the energy, the baseload energy 

that we need to fuel this economy that we hope will grow? Where 

is it coming from? 

And we have people here at this table and others that have come 

in here and said, it is wind, and it is solar. I want to ask all of 

you: Where are we going to get the energy? If coal is bad, nuclear 

is not going to come on board the way we say it is. And by the way, 

we don’t even give nuclear a chance in terms of renewables. We 

haven’t included nuclear. Where are we going to get the energy to 

supply the baseload energy for this country during the next number of years if this cap and trade legislation goes into being? 
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Mr. Cicio. 

Mr. CICIO. Yes, thank you, Senator. This is a very important 

question. I mean, if the country does plan to address climate like 

it is through this bill and others, the key is having an abundant 

supply of low cost carbon energy. OK? That is the only real solution. 

We don’t have that. And as I said in my comments, particularly 

in the short term, there is no solution other than natural gas. We 

have a lot of natural gas in the reserves, but what I am concerned 

about in my testimony is there are 400 million metric tons of carbon that the utilities are going to be short for 2012. Carbon capture 

is not available. Nuclear is not available. Scale from renewable is 

not renewable. You can’t scale energy efficiency in that time period. 

The only thing available is natural gas. There is 550,000 

megawatts of natural gas fired power capacity out there. It is being 

used for peaking. All it takes is for them to say we are going to 

burn more gas. The capacity is there, and it could use 4.5 trillion 

cubic feet of gas in the period of the next couple of years. 

Senator VOINOVICH. Mr. Rowe said to me that if you let the market control the situation, that we will shift to natural gas to 

produce the energy that we need for this country. And the point he 

made is that natural gas emits about half of what coal emits, and 

once you have built those, and they are in place, then when do you 

get rid of them in terms of their producing energy in this country? 

Mr. Trisko, would you like to comment on that? 

Mr. TRISKO. Senator, you started this line of questioning with a 

reference to a conversation that Mr. Hawkins and I may or may 

not have had about the environmental community’s opposition to 

the construction of new well controlled coal fired power plants 

around the country. 

Senator VOINOVICH. NOx, SOx, mercury, the best in the world, 

and they won’t let them come in. 

Mr. HAWKINS. Exactly, and the environmental community was 

highly successful in that campaign. And the irony, misfortune of 

the success of that campaign is that it prevented the retirement of 

some of the older, less efficient and dirtier plants that would go offline inevitably when new highly efficient plants are brought online. 

You can deal with the carbon emission issue from the new plants 

through relatively simple design measures so that the plant will be 

subsequently capable of removing its carbon and storing it underground when we have that technology in place. 

But in my judgment, our society has lost an opportunity to replace that aging fleet of power plants as a consequence of the success of that movement. 

Could I comment on your gas question? 

Senator BOXER. I am sorry. We have gone over a minute and a 

half right now. 

Senator VOINOVICH. I thank the Chair. 

Senator BOXER. So we are going to stop. 

I just want to be clear on something, which is the modeling, since 

a line is being drawn in the sand by Senator Voinovich. Well, here 

are the facts. The facts are that our bill, 90 percent of our bill in 

terms of the modeling section is taken from Waxman-Markey. They 
763 

had a 5-week study. We had 10 percent difference. It took another 

2 weeks. This is the longest study there is. 

Now, I assume when you talked about modeling, you were talking about once we get this bill to the floor and once it is changed 

again, because it will have to be remodeled at that stage. 

We are not going to waste taxpayer money because somebody 

drew a line in the sand. We spent 5 weeks at EPA studying Waxman-Markey, 2 weeks studying Kerry-Boxer that is 90 percent the 

same as the other bill. And we are going to stand on that. The EPA 

stands on it. The Obama administration stands on it. 

Senator VOINOVICH. Can I have equal time, Madam Chair? 

Senator BOXER. No, just a minute. Yes. 

Senator VOINOVICH. You are editorializing again, and I think I 

have an opportunity to share my opinion also. 

Senator BOXER. If you wouldn’t mind letting the Chairman finish 

her remarks. 

Senator VOINOVICH. Well, the Chairman sometimes editorializes 

and doesn’t let us even speak up. 

Senator BOXER. I am happy to give you equal time. 

I am not making an editorial comment. I am giving you my view 

and the view of the majority. 

Now, you may not agree with it, but this Chairman is not going 

to waste taxpayer money to delay a bill that doesn’t have to be delayed because of some reason that doesn’t hold up since we have 

had 7 weeks of study. 

And Senator Voinovich, you have been very clear, and I wanted 

to make sure because I respect you that you knew that the view 

of the majority is that we have a very important study from EPA 

that is complete. And I just wanted you to know that because I 

don’t want you to come here next week and say, I told you I wasn’t 

going to do anything unless you had a full study. 

I want you to know that we stand by the study, and I am happy 

to give you equal time to respond. 

Senator VOINOVICH. Thank you very much. 

Senator BOXER. Of course. 

Senator VOINOVICH. The fact of the matter is that I have a hold 

on an individual at the Environmental Protection Agency because 

we never have received a full analysis of Waxman-Markey. I said 

to the head of the EPA, Lisa Jackson, look, forget that right now. 

Let’s go to the Boxer-Kerry bill, and let’s do a full analysis. I asked 

her on Tuesday. She said, ‘‘We have not run a full economic modeling.’’ 

And all I would like to have before we mark up the bill would 

be the same kind of analysis that was done after the fact last year 

when we had Warner-Lieberman, and then it came out afterwards. 

If we are going to intelligently deal with this issue, we need to 

have the modeling by the Environmental Protection Agency. I need 

to have it. My citizens in Ohio would expect me to have it before 

we would go forward with it. 

And, you know, the fact is it is not there, and it is absolutely certain that we need to have it if we are going to deal with this intelligently. 
764 

Senator BOXER. OK. So to be continued. I don’t think I am going 

to convince you, and you are not going to convince me. So let’s not 

go there today, but we will obviously be revisiting this. 

Senator Whitehouse. 

Senator WHITEHOUSE. Thank you, Chairman. 

Secretary Adams, in your testimony you described the Clean Air 

Act as a complementary regulatory structure to the comprehensive 

program outlined in the legislation before us and described it as a 

hugely successful and adaptable bedrock of American environmental policy. 

Could you give me your reaction to efforts to strip Clean Air Act 

requirements as a part of this bill? And efforts to add what are 

around here referred to as 3–P, the other three pollutants into a 

cap and trade regime and out of the Clean Air Act regulatory 

model as a part of this legislation? 

Ms. ADAMS. I think the Clean Air Act obviously is a very important tool. There may be some tailoring of the Clean Air Act, some 

common sense change to perhaps raise the permitting threshold to 

exempt greenhouse gas emissions from national ambient air quality standards. But other technology accelerating standards we 

think should be retained. 

We think the Clean Air Act has been very successful and needs 

to be retained as a tool. We believe that carbon dioxide should be 

expressly excluded from title I and not be defined with a national 

ambient air quality standard. And the threshold for requiring a 

permit should be raised to exclude all but major new sources. 

Senator WHITEHOUSE. Thank you. 

Mr. Dolezalek, in your testimony you say if we fail to act, we will 

lose our technological edge. We will lose the jobs associated with 

these companies, and ultimately we will pay others to import their 

clean energy technologies the way we today pay others to import 

their oil. 

What is it about the present circumstance that requires this legislation to get us there? Why won’t the market get us there on its 

own? 

Mr. DOLEZALEK. We have been investing in these technologies 

since 2002. At the time, most of these were very small, young companies, and the venture community was perfectly capable of providing the funding needed. 

We have now reached the stage where more and more of them 

are coming to commercial scale and building factories. Building factories for energy generation, for automobiles, for very large lighting 

is much, much more capital intensive than the venture industry 

has historically had to fund. 

We have come to that time period at a point in time when the 

global funding sources that would normally have stepped in and 

provided a lot of that funding have shifted. So a lot of the money 

that would have gone into funding capital development for U.S. 

new energy companies has gone to Europe. It stayed in the Middle 

East. It is staying in China. The longer we wait from a signaling 

standpoint, the longer that capital stays where it has gone to. 

Senator WHITEHOUSE. In addition to the capital availability question, is there also a market distortion question related to the implicit subsidy that the polluting coal and other industries have re-
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ceived for so many years by having all of us bear the costs of their 

pollution, rather than having the emitters bear the costs of the pollution? 

Mr. DOLEZALEK. We have long said all we really need is a level 

playing field, and we will do the rest. We still are a long, long ways 

from a level playing field. I am not at all certain that we even get 

close to a level playing field even if we adopted this bill in its fullest extent, but we get a lot closer, and it makes us a lot more competitive. And a choice between not being competitive and at least 

being more competitive, we clearly choose to be more competitive. 

Senator WHITEHOUSE. And if I could ask, my time is running out 

so this will probably be a question for the record for Mr. Cicio, but 

I would be interested to know, the record of your member companies of off-shoring jobs during the last 10 years. 

To put that in context, my take on this is that for many managements, off-shoring jobs from America to other locations where lower 

wages, poorer working conditions and the ability to evade environmental responsibility allowed more return to management and 

shareholders has been a fairly prominent goal of CEOs and big corporations in this country for the last decade or so. 

And given that, I take with a little bit of a grain of salt management expressed concerns about the loss of jobs, when the people 

whose jobs were off-shored, the folks that represent them, the labor 

unions, are here speaking in favor of this legislation. In that context, it would be useful to me to know what the off-shoring record 

is of your membership companies. 

And my time has expired. 

Senator BOXER. OK. 

Oh, Senator Carper is here. OK, Senator, we were just about to 

close down and we welcome you in the nick of time. 

Senator CARPER. Thanks, Madam Chair. 

I apologize to our panel. I have been working on cybersecurity, 

and given the luncheon conversation we had with one of our former 

colleagues, we understand how important that is. 

It is a good issue. It is a bad issue, but it is a good one to try 

to be on top of. 

Mr. Trisko, is it Gene Trisko? 

Mr. TRISKO. Yes. 

Senator CARPER. Also known as Eugene Trisko. 

Mr. TRISKO. As you prefer, Senator. 

Senator CARPER. All right, Mr. Trisko. Thank you for being here. 

Thank you all for coming today. Some of you we have had before 

this committee any number of times before, so welcome. And for 

those of you who are for the first time, we welcome you, too. 

A question, if I could, for you, Mr. Trisko. Do you believe that 

there are uncertainties for using coal to create electricity, but uncertainties other than those relating to carbon dioxide, that may be 

preventing coal plants either from being built or from continuing 

to be utilized in this country? 

Mr. TRISKO. Certainly, Senator, I suspect we are leading to a 3– 

P discussion here. Prominent among the uncertainties facing the 

power generation sector today are what EPA plans to do in terms 

of the replacement of the CAIR rule for the control of SO2 and NOx
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emissions. We expect a proposal next spring, followed by a final 

rule the year after that. 

And of equal and perhaps greater importance, what the agency 

intends to do concerning the regulation of mercury and other hazardous air pollutants pursuant to the Court of Appeals decision on 

that, and the recent consent decree that was agreed to. It is out 

for comment now. 

Those two rulemakings together constitute a significant source of 

uncertainty for the industry in its planning. And there is a case to 

be made, just as there was as this body was considering the Clear 

Skies legislation several years ago, as it has considered the Clean 

Air Planning Act that you, Senator, have been championing for a 

number of years. 

Senator CARPER. Which I nicknamed at the time ‘‘Really Clear 

Skies.’’ 

Mr. TRISKO. Right. There is a real case to be made that a legislative solution to the criteria and now hazardous air pollutant issues 

facing the industry is desirable. As always, the devil is in the details, and my understanding is that some of the issues that are surrounding the current legislative proposals on 3–P are basically on 

the numbers side and the years side. It always comes down to that. 

And from our perspective, we have looked at the legislation. We 

have similar concerns about the impact of your bill on the industry 

as we do in climate, and that is that if the caps are set too tight 

and they occur too soon, that that will lead a number of power generators to take offline the smaller and older inefficient generating 

facilities that perhaps could have been replaced by new plants if 

that scenario had occurred, and shut them down or put them in cycling mode and replace them with the combined cycle generation, 

natural gas generation. 

So we have six of one and half a dozen of the other. But there 

is a benefit in achieving legislative certainty with regard to the 

timetables and levels of control to be required by the power generation sector, no question about that. 

Senator CARPER. All right, thanks for that response. I would just 

note that there are a number of States—one of our targets for reduction is mercury. We call for reducing mercury emissions by 90 

percent in our legislation, not a cap and trade approach, just a directive to reduce it for those who haven’t already addressed mercury. 

And I remember sitting literally in the same room 6—5 or 6 

years ago at a hearing on mercury and to what extent we were able 

to actually reduce mercury emissions. And for the most part, everybody said at the panel, except maybe one person who represented 

the industry that tried to develop ways to reduce mercury emissions. Everybody said there is no way we can get to 90 percent reduction by 2015. And as it turns out, the technology is there, and 

it has been implemented not throughout the country but in a lot 

of places. So I think we have seen just in a few years how far we 

have come. 

Sometimes I think there is value in saying, all right, this is our 

target; this is where we need to be, provide a reasonable amount 

of time to get there, and to sort of like get out of the way of the 
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innovations and say go to work, and they will get it done. So we 

will see. 

I have one more quick question, if I could, for you. This is actually for David Hawkins. Let me just talk, if I could, very briefly 

about the LDC allowances, the local distribution companies. I believe that now we just asked the public utility commissions to designate how the LDCs can use that money to help consumers. Is 

that correct? Is that your understanding? 

Mr. HAWKINS. There is a general directive that says that the allocation value should be used to benefit consumers, and we are recommending more specific direction. 

Senator CARPER. All right. I was going to ask you, do you have 

any recommendations for changing the current language, and it 

sounds like you might? 

Mr. HAWKINS. Yes, we think consumers would be much better 

protected if we have a presumption that a certain fraction of this 

allowance value be used for energy efficiency investments. The 

record is clear, energy efficiency works. There are many barriers in 

the existing regulatory system to full and fair consideration of efficiency. What we are asking is that that be where the process 

starts. 

And if a demonstration is made that all of the cost effective opportunities for energy efficiency have been pursued, then that presumption goes away. But we think that is where it needs to start. 

You take a hard look at efficiency because efficiency saves money. 

People care about their electricity bills much more than they care 

about their electricity rates. And efficiency can bring those bills 

down. 

Senator CARPER. Good. Thank you so much. 

And Madam Chair, thank you for giving me that extra minute. 

Senator BOXER. Thank you so much. And could you stay around, 

Senator, I want to talk to you after. 

Senator CARPER. I would be pleased to. 

Senator BOXER. Thank you. 

I just want to place in the record before we thank you and let 

you go on your way, this is interesting. It is a press release from 

April 10th, 2009, about a Chinese—I can’t pronounce it—HUAENG 

Group inks clean coal technology export agreement with a U.S. 

company in Pennsylvania. I don’t know whether you are aware of 

this. A two-stage pulverized coal pressure gasification technology, 

and they are going to apply it to a 150-megawatt IGCC power 

plant, and it says in order to reduce the carbon dioxide. So it is interesting that we are now working with Chinese companies to come 

in and clean up our coal fired plants. 

We can’t continue this way. We need to take the lead in all of 

this. So that is the purpose of our bill. Our purpose of our bill is 

to keep coal in the mix big time. We are very smart. We know 

there is 200 years’ worth of coal, and we want that to be there. We 

want it to be clean. And the point is, the status quo is the worst 

thing for coal because it is going to mean at the end of the day that 

EPA comes in, and there is no way to offset, and there is no way 

to get allowances. 

So we are excited about this approach, and we know that we are 

gaining ground, but it is, as we heard from Stephan, since I am not 
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going to butcher your last name again, Stephan said it well. This 

is all a balance. It is very difficult. Some people think we are this 

way, we are tilting; some people think we are that way. And we 

are trying to reach for this. 

Well, we want to thank you all so much for being here. Every one 

of you was wonderful. And we may have some questions that are 

coming in to us for you, and we need them back within 24 hours. 

I know that is difficult, but we know you are such experts that you 

will have those answers at the top of your brains, and you will get 

those out. 

So thank you. 

We stand adjourned. 

[Whereupon, at 5:10 p.m., the committee was adjourned.] 

[The referenced press release was not received at time of print.] 

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