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HEARING 

BEFORE THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JANUARY 15, 2009 

Serial No. 111–1 

( 

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THE U.S. CLIMATE ACTION PARTNERSHIP 

HEARING 

BEFORE THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JANUARY 15, 2009 

Serial No. 111–1 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California 

Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MIKE F. DOYLE, Pennsylvania 

JANE HARMAN, California 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 1 

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

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

of Kentucky, opening statement ......................................................................... 6 

Hon. Lois Capps, a Representative in Congress from the State of California, 

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

Hon. John Shimkus, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 7 

Hon. Jane Harman, a Representative in Congress from the State of California, opening statement .................................................................................... 8 

Hon. John B. Shadegg, a Representative in Congress from the State of Arizona, opening statement ...................................................................................... 9 

Hon. Doris O. Matsui, a Representative in Congress from the State of California, opening statement .................................................................................... 11 

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

opening statement ................................................................................................ 12 

Hon. Donna M. Christensen, a Representative in Congress from the Virgin 

Islands, opening statement ................................................................................. 13 

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

Tennessee, opening statement ............................................................................ 14 

Hon. Zachary T. Space, a Representative in Congress from the State of 

Ohio, opening statement ...................................................................................... 15 

Hon. Phil Gingrey, a Representative in Congress from the State of Georgia, 

opening statement ................................................................................................ 16 

Hon. Betty Sutton, a Representative in Congress from the State of Ohio, 

opening statement ................................................................................................ 17 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 18 

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

opening statement ................................................................................................ 18 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 19 

Hon. Gene Green, a Representative in Congress from the State of Texas, 

prepared statement .............................................................................................. 20 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 21 

Hon. John P. Sarbanes, a Representative in Congress from the State of 

Maryland, opening statement ............................................................................. 22 

Hon. Roy Blunt, a Representative in Congress from the State of Missouri, 

opening statement ................................................................................................ 23 

Hon. G.K. Butterfield, a Representative in Congress from the State of North 

Carolina, opening statement ............................................................................... 25 

Hon. Tim Murphy, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 25 

Hon. Henry Waxman, a Representative in Congress from the State of California, opening statement .................................................................................... 27 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 28 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 30 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 31 

Page

IV 

WITNESSES

Jeffrey R. Immelt, Chairman and Chief Executive Officer, General Electric ..... 34 

Prepared statement .......................................................................................... 36 

Answers to submitted questions 1 ...................................................................

Jim Rogers, Chairman, President, and Chief Executive Officer, Duke Energy . 42 

Prepared statement .......................................................................................... 43 

Answers to submitted questions ...................................................................... 146 

Frances Beinecke, President, Natural Resources Defense Council ..................... 52 

Prepared statement .......................................................................................... 54 

Answers to submitted questions ...................................................................... 154 

Fred Krupp, President, Environmental Defense Fund ......................................... 57 

Prepared statement .......................................................................................... 58 

Answers to submitted questions ...................................................................... 172 

Eileen Claussen, President, Pew Center on Global Climate Change .................. 61 

Prepared statement .......................................................................................... 62 

Answers to submitted questions 1 ...................................................................

Peter A. Darbee, Chairman, Chief Executive Officer, and President, PG&E 

Corporation ........................................................................................................... 67 

Prepared statement .......................................................................................... 68 

Answers to submitted questions ...................................................................... 183 

Preston Chiaro, Chief Executive Officer, Rio Tinto .............................................. 72 

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

Answers to submitted questions ...................................................................... 192 

James Mulva, Chairman and Chief Executive Officer, Conoco-Phillips ............. 79 

Prepared statement .......................................................................................... 80 

Answers to submitted questions ...................................................................... 206 

Jonathan Lash, President, World Resources Institute 2 .......................................

Prepared statement .......................................................................................... 85 

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

George Nolen, President and Chief Executive Officer, Siemens Corporation 2 ..

Prepared statement .......................................................................................... 91 

Answers to submitted questions ...................................................................... 239 

John Rowe, President and Chief Executive Officer, Exelon Corporation 2 .........

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

Answers to submitted questions ...................................................................... 252 

David Crane, President and Chief Executive Officer, NRG Energy, Inc. 2 .........

Prepared statement .......................................................................................... 96 

Answers to submitted questions ...................................................................... 266 

Mark Tercek, President and Chief Executive Officer, The Nature Conservancy 2 ...................................................................................................................

Prepared statement .......................................................................................... 100 

Answers to submitted questions ...................................................................... 278 

Jeffry E. Sterba, Chairman of the Board and Chief Executive Officer, PNM 

Resources 2 ............................................................................................................

Prepared statement .......................................................................................... 106 

Answers to submitted questions ...................................................................... 290 

SUBMITTED MATERIAL

Letter of February 19, 2009, from United States Climate Action Partnership, 

to Hon. Henry Waxman and Hon. John Dingell ............................................... 306 

1 Mr. Immelt and Ms. Claussen did not respond to submitted questions 

for the record. 2 Messrs. Lash, Nolen, Rowe, Crane, Tercek, and Sterba did not present 

oral statements at the hearing. 3 Mr. Rowe did not submit a prepared statement for the record. 

(1) 

THE U.S. CLIMATE ACTION PARTNERSHIP 

THURSDAY, JANUARY 15, 2009 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The committee met, pursuant to call, at 9:15 a.m., in room 2123, 

Rayburn House Office Building, Hon. Henry Waxman (chairman of 

the committee) presiding. 

Present: Representatives Waxman, Dingell, Markey, Pallone, 

Rush, Eshoo, Stupak, Green, DeGette, Capps, Doyle, Harman, 

Schakowsky, Gonzalez, Inslee, Baldwin, Matheson, Butterfield, 

Melancon, Barrow, Hill, Matsui, Christensen, Castor, Sarbanes, 

Murphy of Connecticut, Space, McNerney, Sutton, Braley, Welch, 

Barton, Hall, Upton, Whitfield, Shimkus, Shadegg, Blunt, Pitts, 

Bono, Walden, Terry, Rogers, Murphy of Pennsylvania, Burgess, 

Blackburn, and Gingrey. 

Staff Present: Phil Barnett, Staff Director; Kristin Amerling, 

Chief Counsel; Karen Lightfoot, Communications Director and Senior Policy Advisor; Greg Dotson, Chief Counsel, Energy and Environment; Alexandra Teitz, Senior Counsel; Lorie Schmidt, Senior 

Counsel; Earley Green, Chief Clerk; Caren Auchman, Communications Associate; Zhongrui ‘‘JR’’ Deng, Chief Information Officer; 

Rob Cobbs, Policy Analyst; Matt Weiner, Special Assistant; Alex 

Barron, Professional Staff; Melissa Bez, Professional Staff; Carla 

Hultberg, Deputy Clerk for Technology and Communication; 

Caitlin Haberman, Staff Assistant; and Matt Eisenberg, Staff Assistant; Amanda Mertens Campbell, Minority Counsel; Andrea 

Spring, Minority Professional Staff; Jerry Couri, Minority Professional Staff; Peter Spencer, Minority Professional Staff; and Garrett Golding, Minority Legislative Analyst. 

Mr. WAXMAN. The meeting of the Committee will please come to 

order. We are here today for a hearing. And before we even call our 

witnesses in the room, we are going to recognize members for opening statements. 

Mr. Pallone, are you prepared for your opening statement? 

Mr. PALLONE. Sure. 

Mr. WAXMAN. The gentleman is recognized for 5 minutes. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman. 

I want to first thank you all for—I was going to say thank all 

the panel, but they are not here yet, so I will forego that. 

2 

The U.S. Climate Action Partnership, USCAP, has called for 

leadership in calling for national legislation to slow, stop, and reverse the growth in greenhouse gas emissions. It is encouraging to 

see such a broad coalition of leaders from the energy industry, financial services, and the environmental community working together to reduce carbon emissions. Everyone here understands the 

serious threat global climate change represents to the world. 

The Fourth Assessment Report of the Intergovernmental Panel 

on Climate Change predicted serious risks and damages to species, 

ecosystems, and human infrastructure if action is not taken to reduce emissions. It is time for Congress to pass legislation that will 

set the necessary emission reduction targets and will ensure we 

meet those targets in the short and long term. We cannot afford 

to wait another year to act. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Pallone follows:] 

3 


63514.001
4 


63514.002
5 


63514.003
6 

Mr. WAXMAN. Thank you very much, Mr. Pallone. 

The gentleman from Kentucky. 

Mr. WHITFIELD. Thank you, Mr. Chairman. It is my understanding that we have 1-minute opening statements? 

Mr. WAXMAN. No, we are giving members 5 minutes. 

Mr. WHITFIELD. Oh, 5 minutes. OK. Thank you, Mr. Chairman. 

Mr. WAXMAN. You don’t have to take 5 minutes. 

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

Mr. WHITFIELD. OK. I want to thank the chairman for having 

this hearing today with testimony from the United States Climate 

Action Partnership. 

I might note that last night I was looking at the Web site of the 

partnership, and I noticed that, a few months ago, they conducted 

a poll in 46 swing congressional districts. And in that poll, they 

asked the question of whether or not stringent climate change enforcement efforts should be taken in the United States even though 

action would not be taken in China and in India. And that raised 

an interesting question in my own mind, because with the economy 

being what it is today, not only in the U.S. but around the world, 

I think if there is ever a time that we have to be cognizant and 

aware of additional costs to produce electricity, to produce energy, 

and particularly so if other countries are not taking the necessary 

steps to address this issue as well. 

So I would also point out that I was reading an article in the 

New York Times just recently, and it was talking about the capand-trade system in Europe. And it points out that in Europe, 

which created the world’s largest greenhouse gas market 3 years 

ago, early evidence suggests the whole approach could fail. It specifically says that, this week, the European Environment Agency 

reported that emissions from factories and plants that trade pollution permits rose in 2006 over the previous year, and it also rose 

the first 2 years of the operation of the cap-and-trade system. 

So while the U.S. Climate Action Partnership is a strong advocate for some of these programs, I think at this particular time in 

the history of our country, with the economy being what it is, we 

have to move cautiously to reflect upon the additional costs that 

anything we might do will bear on production of energy. And if the 

U.S. has an undue amount of that cost, then it certainly will place 

us at an economic disadvantage with other developing economies 

around the world. So, with that, I yield back the balance of my 

time. 

Mr. WAXMAN. Thank the gentleman for his opening statement. 

Ms. Capps? 

OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. CAPPS. Thank you, Mr. Chairman, for holding this hearing 

with the U.S. Climate Action Partnership. 

My remarks will be limited to a minute. But I do want to thank 

these companies and organizations for their blueprint for legislaVerDate Nov 24 2008 15:26 May 20, 2011 Jkt 037690 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 111\111TH RESEARCH\111-1 CHRIS
7 

tive action, and to let them know that it makes an important contribution to helping solve the global warming problem. 

Our witnesses agree that now is the time for action. They agree 

on the creation of a mandatory economic-wide program to address 

global warming. They also agree on a more aggressive emission reduction schedule with significantly narrowed ranges. What is more, 

the companies and groups before us today also make clear that by 

acting now, we can help, and not hurt, the economy. 

Through global warming legislation we can drive the development of new technologies. We can create new American jobs, and 

we can support workers in the transition to a green economy. It 

will be a challenge to enact meaningful legislation, but it can be 

done. 

And I join you, Mr. Chairman, in supporting that notion. 

We must face the challenge of global warming now. It is one of 

the great challenges of our generation. And with the help of groups 

and businesses like those in the Climate Action Partnership, this 

is a challenge we can and we will meet. I look forward to the testimony of our witnesses, and to passing the strongest global warming bill that we can. 

Thank you, and I yield back. 

Mr. WAXMAN. Thank you, Ms. Capps. 

Mr. Shimkus? 

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

A terrible start to hopefully a better year. It started yesterday. 

Now we are faced with a preparation time of 1 minute, now granting 5. My complaint yesterday was that it is important for USCAP 

to hear our comments. Of course, they are not here. And I understand they are doing a press conference. So it is more important 

for USCAP to do a press conference, probably with the vast majority of my colleagues on the other side of the aisle, versus hearing 

the concerns of over 670,000 people in my congressional district 

about how global climate change will cost jobs. 

I am going to hold the fossil fuel Democrats accountable. If there 

is any place you are going to be held accountable in this Congress, 

it is going to be in this committee. So if you are from a coal-producing State or a petroleum-producing State, you better get prepared to defend your votes, as global climate change will destroy 

the fossil fuel industry. 

So I am just giving you notice. If, on the floor, we can’t get these 

amendments on the floor, you will be held accountable in this committee, if we proceed through regular order, on the movement that 

will destroy coal in this country. It will destroy crude oil production 

in this country. So be prepared for a battle. 

I can’t address USCAP; they are not here. It is interesting in 

their first release of their report, guess what they have? It is not 

in the new one. We only got this—this was released an hour and 

15 minutes ago. In their first release, what do they have as a picture in their portfolio? They have a trading floor. A trading floor. 

My question is, why is that trading floor no longer in this report? 

8 

You know why? Because we are bailing out Wall Street because of 

traders who abused the system. 

Let’s develop, this is a great idea, let’s develop a trading floor for 

U.S. emissions, and let’s let the big money folks at Goldman Sachs 

control it. Is that a great idea in this environment? That is what 

is being proposed. 

I have talked in this committee numerous times about a carbon 

tax. At least it is honest. Because climate change does a simple 

premise: It monetizes carbon. It puts a value to carbon. And someone is going to pay that cost. Now, the cap-and-trade system is a 

shell game to hide the cost from the ultimate person who is going 

to pay. And who is that person who is going to pay? The person 

who is going to pay is the individual consumer, because industry 

is going to pass those costs on. Great idea in a struggling economy. 

The best thing we can do to help the economy move forward is increase the cost of energy when we can only be competitive in a 

worldwide environment if we have low-cost fuel. 

We saw, part of this recession is because we don’t have a diversified fuel portfolio. We have been sending signals to the fossil fuel 

industry that, we do not want to use your low-cost fuel. And what 

has happened? The supply-and-demand curve increased the cost. 

Now we have low-cost fuel. Why? The economy is in a recession. 

Do we want to continue to move in that direction? This, my 

friends, guarantees, guarantees rural America, coal-producing 

States more job loss. How do I know this? It has happened. Go 

back to the Clean Air Act. Go back to my congressional district. Go 

back to the numerous coal mines. I have a picture being produced, 

sent to me in Kincaid, Illinois. Great picture. All these miners, all 

this equipment, all these facilities, no longer there. Closed. And I 

know those folks who are from coal-producing States understand. 

And again, I appreciate this extra time, Mr. Chairman. I fear 

that giving USCAP the opportunity to roll this out in a press conference instead of hearing the concerns from the people in my congressional district is a terrible, terrible, bad start on a very important issue that will take bipartisan activity. And I will again just 

put my fossil-fuel Democrats on record. They know the work we did 

in the last Congress of raising the issue of coal on the floor of the 

House. With new rules, we may not get that chance. I can guarantee you, I can guarantee you, coal, you will get a chance to vote 

in support of coal as this legislation moves forward. 

I yield back. 

Mr. WAXMAN. Thank you very much. 

Ms. Harman? 

OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. HARMAN. Thank you, Mr. Chairman. 

I want to say to you that I appreciate the opportunity to give a 

brief opening statement. I think it will afford especially our new 

members a chance to put their views out. And I know, based on 

your history, that you will conduct this committee in a way that 

does give the newest members an opportunity to be heard. So as 

a fairly old member, I want to thank you on their behalf. 

9 

One of my children’s favorite books was called, ‘‘It is a Terrible, 

Terrible, Very Bad Day,’’ by Judith Viorst, a wonderful Washington 

writer. Unlike Mr. Shimkus, I don’t think it is a terrible, terrible, 

very bad day. I actually think it is a pretty terrific first hearing for 

this committee. And I look forward to being back when our witnesses will testify and to putting a few views forward. 

USCAP is a partnership between public policy, nonprofits, and 

the private sector. And I want to say that, in my view, public-private partnerships can work, and the model is an excellent one for 

us to use as the basis for legislation, critical legislation, that we are 

going to be embarked on in the energy area. 

This committee, for example, helped broker a public-private partnership on a range of energy-efficiency issues in our 2007 Energy 

Independence and Security Act. Congressman Upton and I were extremely active on one of those partnerships regarding energy-efficient light bulbs. We worked with leading environmental groups, 

like the NRDC and the lighting industry, including Philips and Mr. 

Immelt’s General Electric. It wasn’t an easy process. The parties 

started negotiations very far apart. But with lots of work and the 

willingness of all sides and both sides of the aisle on this committee to listen respectfully to each other, we managed to craft 

groundbreaking legislation. We banned the 100-watt incandescent 

light bulb and required all lighting sold in the United States to be 

30 to 40 percent more efficient than it is today by 2014 and 300 

percent more efficient by 2020. We laid the groundwork for bringing lighting manufacturing back to the U.S. and to overcoming concerns about mercury, which is in some of the existing light bulbs 

presently produced. 

I think that our public-private partnership can be a model for future legislation, including legislation on the subject of climate 

change. And I think that USCAP will help us craft legislation that 

is both far-reaching and driven by consensus. I hope this committee 

and our witnesses will use the public-private partnership model as 

we move forward. 

And again I thank you for the opportunity to put my views out 

there. 

Mr. WAXMAN. Thank you very much. 

Mr. Shadegg? 

OPENING STATEMENT OF HON. JOHN B. SHADEGG, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA 

Mr. SHADEGG. Thank you, Mr. Chairman. 

I would begin by expressing my support for the comments made 

by my colleagues Mr. Whitfield and Mr. Shimkus. 

I think we ought to talk about the procedure for this hearing, because I am deeply troubled by it. And I won’t make a judgment call 

as to whether it is fair or appropriate. I will let the public and the 

people in this room make that judgment call. 

To my knowledge, this is the first time that in a routine hearing 

before this committee, members have been compelled to give their 

opening statement without the witnesses present. That is one of 

the opportunities where we as a member of the committee get an 

opportunity to express ourselves to the full panel about an issue. 

It was a concern expressed in yesterday’s debate about the denial 

10 

of opening statements to the members of the panel. But today I 

don’t get the chance to make my concerns about this issue apparent to the members of the panel during an opening statement. 

Instead, as Mr. Shimkus noted, they are holding a press conference, I understand, over in the Cannon Building, where they 

can’t hear me express either my concerns or the concerns of my 

constituents about the issue, point one. 

Point two, the minority was told that it could not have a minority witness on this panel. If it wanted a minority witness or a minority panel, it had to have it on a separate panel, and they had 

to be prepared to talk about this report, which was issued only, as 

my colleague Mr. Shimkus noted, an hour and 15 minutes ago. 

Pretty difficult to ask a witness to come before a United States congressional committee and be prepared to answer questions about a 

report that they have for only an hour and 15 minutes. And so the 

minority declined to have any witnesses. I think that is a stifling 

of the minority’s rights. 

Next we were told that these witnesses will have a very limited 

time, indeed that the distinguished CEOs who will be here—the 

Chairman of ConocoPhillips; the Chairman of Duke Energy; the 

President and CEO of Exelon; the Chairman and CEO of General 

Electric; the President and CEO of NRG; the Chairman and President of PG&E; the Chief Executive of the Energy Rio Tinto; the 

President and CEO of Siemens—all are on a very limited time period, and they can arrive here at 10 or 10:30 but will have to leave 

by 12:30. 

So therefore, Congressman Shadegg, it is highly unlikely you will 

get to ask them any questions, but certainly Mr. Gingrey at the 

bottom of this dais will not get to ask them any questions. Again, 

a repression of the ability of the minority to express its views, forget majority-minority, just of congressmen to express their views to 

the members of the panel. I am deeply troubled by that. 

I share Mr. Shimkus’s concerns about the effect of carbon cap 

and trade on this economy. I worry about its impact on jobs. 

I would like to, on the substance of this hearing, make the point 

that I believe we need to act prudently. There are many things that 

we can do right now to reduce greenhouse gases that will have two 

benefits, not just one. There are other things that we could do right 

now to reduce greenhouse gases that will have only one benefit and 

will have a significant cost. Let me explain that. If we as a Congress were to require dramatically more efficient buildings in this 

country, buildings that were built by landlords who didn’t care 

about how efficient they were to make them more efficient, that 

would both reduce greenhouse gases and reduce our consumption 

of energy in general and reduce our consumption of foreign oil. 

Good policy, two benefits. If we were to do the same with homes, 

two benefits: reduce greenhouse gases and reduce our consumption 

of energy and our consumption of foreign oil. Same with more efficient automobiles, alternate vehicles, alternate fuels, wind, fuel, 

solar. There are a lot of things we can do that will have two benefits: It will reduce greenhouse gases and also reduce our use of energy in general and reduce our reliance on foreign countries, some 

of whom are not our friends, for energy, period. 

11 

But we don’t get to discuss that today because we are only discussing cap and trade. Cap and trade, I would suggest to you, is 

a single-benefit strategy. It will not reduce our consumption of energy. It will not reduce our consumption of foreign oil. But I don’t 

get to tell the executives who are coming here any of that because 

I don’t get that chance. I want them and their lobbyists to know 

that I intend to submit questions in writing in them to find out if 

those CEOs came here by corporate aircraft, if they have calculated 

the carbon footprint of their corporate aircraft, if they know how 

much it will cost their company to buy the carbon credits to keep 

all of their corporate aircraft in the air, and if they are willing to 

report that cost to their stockholders in their annual report so that, 

as Mr. Shimkus points out, the cost of buying these cap-and-trade 

permits, which is going to be borne by the American public and is 

going to cost us jobs, is known. 

I agree with Mr. Shimkus, a straightforward carbon tax would 

tell the American people what this costs. A cap-and-trade system 

is designed to hide that from the American consumers. And the 

American consumers deserve the truth. 

I thank you, and I yield back. 

Mr. WAXMAN. Thank the gentleman. 

Just for the record, members should know the following. The purpose of a hearing is to hear what the witnesses have to say, not 

to tell the witnesses just what we have to say. But we will have 

an opportunity to ask questions of the witnesses or their designees 

if some of the CEOs cannot stay. So members are not going to be 

denied the opportunity to be questioned—members are not going to 

be denied the opportunity to question or make statements to the 

people from USCAP. 

Mr. SHIMKUS. Would the chairman yield? 

Mr. WAXMAN. Let me just finish this other point. We did not set 

any criteria for minority witnesses that they had to say this or they 

had to say that. We had no requests for minority witnesses. This 

is not the last hearing on the issue. And we certainly are going to 

have many witnesses with many points of view. 

Who asked me to yield? 

Mr. SHIMKUS. Mr. Chairman, but it is true that many of these 

titans of industry are leaving at 12:30. So the individual CEOs who 

we may want to ask questions of will not be there. 

Mr. WAXMAN. That is correct. And that was an understanding we 

had with Mr. Barton, because they are not going to stay, each of 

them, for the whole hearing. But there will be their designees to 

answer questions who are very familiar with their proposals. 

Mr. SHIMKUS. And with all due respect, I don’t want to talk to 

the designee; I want to talk to the CEOs. I yield back. 

Mr. WAXMAN. Let’s see. The gentlewoman from California, Ms. 

Matsui. 

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. MATSUI. Thank you, Mr. Chairman. 

And I thank you very much for calling today’s hearing. I applaud 

your leadership and vision on this critical and pressing issue. 

12 

I also would like to commend Chairman Markey on his tireless 

work focusing our attention on the problem of climate change. I am 

eager to work with both of you and with all my colleagues on this 

committee and on the Energy and Environment Subcommittee. 

In my hometown of Sacramento, we live at the confluence of two 

great beautiful rivers. The constant threat of flooding makes it 

even more urgent than ever that we address the issue of climate 

change. Unless we take action now, our way of life in Sacramento, 

in California, and across this Nation will be changed forever. I look 

forward to hearing from each of today’s witnesses about how we 

can advance solutions that are effective, innovative and efficient. 

I, again, thank you for your leadership on this issue, Mr. Chairman. 

I yield back the balance of my time. 

Mr. WAXMAN. Thank you very much. 

The gentleman from Oregon. 

OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

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

And I want to cover a couple of points. I had the opportunity, as 

did several of my colleagues last summer, to spend an evening with 

some of these CEOs talking about their ideas and their proposal for 

cap and trade. And I remember asking the CEO of General Electric 

at this dinner, and the others, I said, now, in order for a cap-andtrade system to work, you have to price energy higher than it is 

today. 

And they all agreed with that. 

I said, well, you have some of the smartest financial people in 

the world working for your companies; how much more does energy 

have to be priced at to create a trading market? And they hemmed 

and hawed a bit, and I threw out the idea of like $20 to $25 a ton 

of carbon, which I think is what it trades for in Europe. And they 

didn’t disagree with that. 

I said, so the price of energy will naturally be higher once you 

assume you have to have a higher price to create a market to trade 

in. And they agreed. 

I said, so if the price of energy is higher as a result of the policy 

that Congress adopts, and I am supposed to go home and sell to 

my constituents, it is good for them and for the country and the 

globe, then would each of you, and I would ask them this today if 

I get a chance, commit in your companies not to chase cheaper energy elsewhere in the world for your manufacturing? I think that 

is a pretty simple request. 

None of them would commit to that, and said so. So it strikes me 

as odd that, at a time when our country is facing unprecedented 

economic problems, that we have these CEOs asking for higher energy costs but unwilling to commit not to chase cheaper energy 

elsewhere in the world for manufacturing. That bothered me a lot. 

Now, I am not sure what they are about, to tell you the truth. 

I do know, as I look at the people who are involved, they are very 

respected people and companies. But I also recognize some names 

that, frankly, the taxpayers are having to bail out right now, like 

AIG. And many of these companies, I think, seek—would benefit 

13 

from whatever happens in a cap-and-trade proposal, especially if 

you are a trader. 

And in meetings I have had overseas with some of the European 

leaders and all, it seemed to me, over time, the people most aggressively advocating a cap-and-trade system were those who were 

going to be trading in it. And it bothers me, because when we look 

at what we are going through right now because of the way debt 

was traded and derivatives and all of those new instruments we 

are learning about, and the utter collapse of our economy as a result, it perplexes me that we are going to create in theory a new 

system of cap and trade by driving energy costs higher with no 

guarantee jobs won’t go overseas. 

Now, having said that, I am proud to come from the State of Oregon. I am probably the only member of my congressional delegation that drives a hybrid in Washington and one in my home district. And I believe in conservation and recycling. It is part of our 

heritage as Oregonians. And I think we have done a lot in the last 

9 years or so on improving the environment. Renewable fuels, for 

example, since 2001, it is a 500 percent increase by 2022. Vehicle 

fuel economy, a 40 percent increase will occur by 2020. Lighting efficiency, many on this committee have supported the bipartisan effort to improve lighting, 25 to 30 percent lighting efficiency improvement by 2012 to 2014, and 70 percent by 2020. Appliance efficiency standards up 45 percent since 2001. Federal Government operations, bigger than most countries, by the way, just what operates in the Federal Government, we have already put in place a 30 

percent efficiency and 20 percent renewable fuel use by 2015. Renewable power, 26 States now have that requirement, and it is a 

500 percent increase to date. Building codes, we have already said, 

Federal Government promoting new 30 percent model code. 

There are many things that we are doing that I think we can be 

proud of as this country in reducing our carbon emissions and improving our efficiency, reducing our use of energy. 

But the thing that remains here is, there is no viable cap and 

trade—or I am sorry, no viable carbon capture and storage technology readily available in the commercial market today. I will get 

into that more later on I hope. 

But before we create new standards and requirements, we better 

make sure we understand what is going to happen to our economy 

and what technology is available. 

Thank you, Mr. Chairman. 

Mr. WAXMAN. Thank you, Mr. Walden. 

Ms. Christensen. 

OPENING STATEMENT OF HON. DONNA M. CHRISTENSEN, A 

REPRESENTATIVE IN CONGRESS FROM THE VIRGIN ISLANDS 

Ms. CHRISTENSEN. Good morning. 

Thank you, Chairman Waxman, and let me take this opportunity 

at our first official hearing to say what an honor it is to have been 

elected to serve on Energy and Commerce, and I look forward to 

a productive tenure on this committee working with you and my 

colleagues to address issues that come under our jurisdiction that 

are some of the most challenging in our Nation. And climate 

14 

change is one of these, and perhaps considered the greatest, challenge facing the world today. 

In my district, the U.S. Virgin Islands and the entire Caribbean 

region, we are very concerned, of course, about its impact on sea 

levels, changing weather patterns and, most importantly right now, 

the bleaching and loss of our coral reefs, the coral reefs that are 

so important to our food, the health of our sea resources, the livelihood of some of my constituents, and our tourism-based economy. 

As a physician, a member of the Health Subcommittee, and someone who has worked for a long time on national health care issues, 

the predicted impacts of climate change on health are also frightening, especially because the troubling trends have already started, 

and we have not as a Nation taken any meaningful steps to reduce 

greenhouse gases and global warming. 

So I look forward to the testimony of the partnership and the 

members who are going to be here with us today. Not surprisingly, 

cap and trade is a cornerstone of their recommended strategy. I 

would be very interested, though, in our panelists’ comments and 

opinions on another proposal that I have recently learned about 

and which I find very I intriguing, cap and dividends. And so I applaud the diversity of the partnership and the hard work that I 

know it must have taken to reach consensus on their call for action, and I look forward to their testimony and working with them 

and you on these important issues. 

Mr. WAXMAN. Thank you very much, Ms. Christensen. 

Mr. Terry? 

Mr. TERRY. I will waive. 

Mr. WAXMAN. Who is next? Does it go—yes. The gentlelady 

from—— 

Ms. BLACKBURN. From Tennessee, Mr. Chairman. 

Mr. WAXMAN. Yes. 

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE 

Ms. BLACKBURN. Yes. Thank you so much. I want to thank you 

for the hearing today. 

And I will be pleased that the witnesses are here to visit with 

us today. 

I join my colleagues in wishing that they would be able to stay 

and answer some of the questions that we have that are specific 

to the issue and specific to how their industries are planning to address this issue. 

Just a couple of thoughts. Number one, I am one of the ones on 

this committee that still has very serious reservations about the 

plans that we are hearing from the new President, what he is contemplating to stop the growth of greenhouse gases. I think that we 

have to look at some of the data that is coming in that addresses 

the issue of climate change and also, certainly, of cooling. 

I found it very interesting that England, for example, recently 

has experienced temperatures 2 degrees Celsius colder than Antarctica and that they have had an average temperature in 2008 

that was 1 degree Celsius less than 2007. So when we hear the 

talk of global warming and we experience what we have experiVerDate Nov 24 2008 15:26 May 20, 2011 Jkt 037690 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 111\111TH RESEARCH\111-1 CHRIS
15 

enced in my home State in Tennessee with colder temperatures 

and we hear data such as this, it does cause us to question the 

global warming science. 

Secondly, the mandatory reduction in emissions on greenhouse 

gases through the cap-and-trade system. I think that the more we 

talk to those in business and industry, the more we see the impact 

that this is going to have and the negative impact that this is going 

to bring to our economy, the transfer of wealth from industries and 

consumers to companies that are promoting inefficient and inadequate technologies, essentially picking winners and losers in the 

free market. 

The European emissions trading system, when you look at that 

trading scheme as they call it, and Mr. Chairman, I find that very 

appropriate, using the word, the trading scheme, it provides in my 

opinion ample evidence of how companies game the system for 

their benefit. But even if the weaknesses of a cap-and-trade system 

are addressed, it will still reduce the availability of energy and 

drive up the cost of economic development, which is something we 

are actually trying to reduce right now. So this is not only counterintuitive, it appears that it will be counterproductive in many 

ways. 

I also have concerns, and I know we are not addressing this specifically in this hearing, but it is a related issue, about the EPA 

regulating and moving to regulate greenhouse gases and the monster of a bureaucracy that that would require and the need to get 

permits for everything from cows to schools to churches for greenhouse emissions and the economic slowdown that this would cause 

if we were all sitting around waiting for the EPA to issue a $175 

tax per cow or $20 tax per hog. For our agricultural interests in 

our States, this just seems like a very cumbersome and counterproductive bureaucracy. 

So we have plenty on our plate today, Mr. Chairman. I thank you 

for the hearing. I hope that it is a robust discussion of issues, and 

I yield the balance of my time. 

Mr. WAXMAN. Thank you very much, Ms. Blackburn. 

Next would be the gentleman from Ohio. 

OPENING STATEMENT OF HON. ZACHARY T. SPACE, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Mr. SPACE. Thank you, Mr. Chairman. 

If I could just express what an honor it is to serve on this committee that deals with so many seminal issues at this crossroads 

in history. I would like to begin by offering my thanks to Chairman 

Waxman for holding this hearing today. I am excited to have an 

opportunity to work with the members of this committee and organizations like USCAP to address the issues of climate change. Climate change is a very real and very pressing issue facing this 

country. And we as Members of Congress have a responsibility to 

address it. 

What remains is the question of how to answer the call to action 

in a responsible fashion that both lowers our Nation’s damaging 

emissions and protects the ability of our economy to grow. I believe 

that it is a goal that all of the members of this committee share 

and one we can work together to achieve. 

16 

I am greatly encouraged by the work of USCAP in assembling 

some of the foremost energy producers and strongest advocates for 

environmental protection in the Nation to proactively address this 

crucial challenge. I look forward to the testimony today and applaud the participating members of USCAP for the progressive, cooperative, and aggressive approach to this critical issue. 

I yield back my time. 

Mr. WAXMAN. Thank you very much, Mr. Space. 

Mr. Gingrey? 

OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA 

Mr. GINGREY. Mr. Chairman, thank you. 

And I join my new member colleagues in expressing my gratitude 

and excitement about serving on the committee and this being the 

first opportunity to utter any words on the committee. I hope they 

won’t come across as sounding too negative, because certainly that 

is not my intent. But I do have some concerns, both in regarding 

process and policy. 

And I would like to voice my strong concerns, first off, about the 

process by which today’s hearing has been conducted by the majority. The mission statement of the United States Climate Action 

Partnership pledges that the organization will work with Congress 

on these critical environmental issues. I am deeply troubled that, 

despite this pledge, the majority has elected to give the members 

of this committee almost no time to digest the recommendations 

made by USCAP on climate change. 

Although I firmly believe that the committee should not be 

dismissive, and certainly I am not, of their report, Mr. Chairman, 

I believe that we would be better served by the information given 

to members and staff less than 90 minutes ago if we were to hold 

this hearing on a future date. With more time, members could 

properly analyze and scrutinize the important work of USCAP so 

we could have a more engaging and productive hearing. 

Unfortunately, due to what seems to me like the political expediency of this organization for the majority, we will not have that opportunity for the American people. So much of my concerns then 

for the process. 

In regarding policy, you know, this cap and trade, which is going 

to be the focus of the hearing, and we heard Mr. Whitfield earlier 

explaining the lack of really meaningful progress in the European 

Nations over a 2- or 3-year period regarding cap and trade, where 

greenhouse gases have not been reduced, and I would hate to see 

cap and trade go the way of wetlands mitigation, community service in lieu of jail time, and some of these other things that sound 

so great on paper that really don’t work out in the long run. 

You know, in the report that we just got, I see in the prologue, 

it says, in January 2007 we issued our call for action, in which we 

joined together to call for prompt enactment of national legislation 

in the United States to slow, stop, and reverse the growth of greenhouse gases emissions over the shortest time reasonably possible. 

Now, that was in January 2007. I was a member of the Science 

Committee at that time. Our first hearing of the year was the Honorable Nancy Pelosi. Our second hearing of the year, and it was a 

17 

joint hearing with this committee, was former Vice President Al 

Gore. Our economy was far different in January of 2007 than it is 

today. 

But U.S. Cap goes on in this report to say today, U.S. leadership 

is essential for establishing an equitable and effective international 

policy framework for robust action by all major emitting countries. 

For this reason, action by the United States should not, should not, 

be contingent on simultaneous action by other countries, i.e., China 

and India. I say to my colleagues, and I will wrap it up with that, 

Mr. Chairman, that there are no Pacific Island Nations in immediate danger of being underwater because of global warming and 

the rise in the sea level, but there are many economies, many companies, General Motors, Chrysler, et cetera, who are under water 

today. And I think we have a real crisis in our economy. And this 

may not be the time for the United States to take that kind of a 

chance. Let’s take this slow, and let’s listen to what these folks 

have to say today, but let’s don’t jump to action too quickly, maybe 

like we did in the $800 billion bailout. 

And I yield back the balance of my time. 

Mr. WAXMAN. I thank the gentleman. 

The gentlelady from Ohio, Ms. Sutton. 

OPENING STATEMENT OF HON. BETTY SUTTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Ms. SUTTON. Thank you, Mr. Chairman. 

Before I begin, I would like to thank you for holding this hearing 

and for getting us off to a quick start on an incredibly critical issue 

before this country and, frankly, the world at large. 

I am truly honored to be a part of this body, where we are going 

to seek solutions for these complex issues that face us as a Nation 

and, certainly as a representative from Ohio, that face my constituents. 

This is critically important to have these folks here today so that 

we can learn more about the members from the U.S. Climate Action Partnership and about how they think we can best advance 

our Nation’s energy policy. USCAP’s alliance, which includes major 

industrial and energy companies and environmental groups, demonstrates that business interests and environmental interests can 

work together to pursue policies that will meet the multidimensional challenge before us. 

I am encouraged by USCAP’s efforts to work together as we discuss policies that will both protect our environment and spur the 

development of advanced technologies and jobs. Make no mistake, 

it is critical that we find ways to effectively address global warming. And I am looking forward to finding the right solutions that 

will concurrently preserve and create jobs for today and tomorrow. 

Thank you. 

Mr. WAXMAN. Thank you very much, Ms. Sutton. 

The Chair wishes to recognize the chairman emeritus of the committee, Mr. Dingell. 

18 

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. DINGELL. Mr. Chairman, thank you. 

I commend you for this hearing. 

It is a remarkable event when we find that we have the large 

number of both NGO heads and the heads of American businesses 

coming together. I would like to point out also that the directors 

of Edison Electric Institute endorsed a set of points of agreement 

on climate change last week. All of this points to one fact: Climate 

change is recognized as being the most critical climate issue facing 

us by everybody involved. 

When the USCAP’s call to action was released, it made news, as 

well it should. For the first time, a diverse group of entities, who 

oftentimes are at odds on environmental matters, agreed on the 

critical need for action on climate change. The call to action calls 

for Federal climate change legislation to follow six key principles. 

However, for the most part, it does not get into the level of detail 

necessary for a complicated legislative resolution to the problem. 

Today USCAP released a more detailed set of recommendations. 

While we have not yet had the opportunity to delve into these recommendations, I do look forward to hearing more about them when 

our witnesses appear today. 

As earlier stated, Mr. Chairman, climate change is the most critical environmental issue facing us. Last Congress we held a number of hearings, issued a number of white papers on the subject of 

climate change, and in fact, Mr. Boucher and I put forward draft 

legislation that was written specifically to address the six goals in 

the call to action. All of this was intended to set us up for prompt 

action this year. 

This hearing builds upon that record. I look forward to working 

with you and all my colleagues to address climate change in the 

manner which achieves reduction amounts that scientists agree is 

necessary while protecting domestic jobs. 

Thank you, Mr. Chairman. 

Mr. WAXMAN. Thank you, Mr. Dingell. 

Mr. Rush? 

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

Mr. RUSH. Thank you, Mr. Chairman. 

And I, too, want to commend you for holding this hearing, thus 

quick starting our activities of this committee on this very, very important issue. 

Mr. Chairman, I think that we are going to be well served by the 

esteemed panel that you have assembled for today. And I also do 

want to thank each and every one of them for making such an appearance before this committee. 

Among those who will be testifying today is my good friend Mr. 

John Rowe, who is the President and the CEO of Exelon. I have 

worked with Mr. Rowe on many energy-related issues, and I find 

him to be a very hardworking and innovative and forward-thinking 

individual. I look forward to hearing his remarks regarding the innovative and very, very excellent practices that Exelon has adopted 

19 

in becoming an industry leader in the production and distribution 

of clean and renewable energy sources. 

I would also like to say that I look forward to hearing from all 

of our distinguished panelists as they seek to rally the Congress as 

well as the other industries to move us all forward in developing 

cleaner energy policies and technologies that we sorely need for the 

continuing success of our economy and of our future as a Nation 

and, indeed, of the world’s population. I look forward to hearing 

them outline the steps that their own companies have enacted in 

order to move this Nation forward in that direction. 

And Mr. Chairman, in conclusion, I just want to again thank you 

for gathering us together so that we can have a great beginning as 

we initiate this 111th Congress. 

I yield back the balance of my time. 

Mr. WAXMAN. Thank you, Mr. Rush. 

Mr. Burgess? 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. Thank you, Mr. Chairman, and thank you for holding this hearing, briefing, that we are having this morning, an unusual mix of stakeholders who will come before our committee 

today, and I am interested to see the recommendations that this 

group will offer us. 

From what I understand, it is a consensus blueprint to help 

guide future action on climate change legislation for this committee. And the vagueness of the report is an example of the nuances that exist in crafting policy to control consumer energy use 

without further damaging our economy, which is already under 

some strain. 

One of the leaders in the energy industry today who is unfortunately not going to be with us, Rex Tillerson from ExxonMobil, was 

in Washington last week. Mr. Tillerson suggested that a carbon tax 

would be the fair and equitable way to transparently control carbon 

emissions. I think our former Chairman in the last session, the last 

Congress, Mr. Dingell also had a similar recommendation. 

When you have an industry leader asking for an additional tax 

burden to simply provide a better environment for his long-term investments and business planning, you begin to appreciate some of 

the pressure that the CEOs are under to continue to increase revenue in such a strained economic environment. They need transparency. They need clarification to compensate for the unexpected 

volatility in their marketplace. 

Unfortunately, clarity is not part of this 30-page report released 

from embargo by USCAP this morning. Somewhat vague on implementation, it is very complex in plan and would require new and 

integrated systems development. And that costs money and increases the number of variables in the regime. As we have seen in 

the financial industry, sophistication, complexity, and increased 

variables add distortions and volatility to the market; not to mention, variables in complexity add the opportunity for manipulation, 

and would require a strong Federal regulator. That is an additional 

burden on the U.S. taxpayers and further strain on our Federal 

budget. 

20 

If I had the opportunity, I would ask these individuals here today 

the following questions: Would a carbon tax provide a clearer signal that industry is asking for, and is it a comparable alternative 

to what has been outlined in this report? Secondly, do you think 

the implementation of this report will help turn profits and increase domestic economic activity? And are you willing to step 

down from your position if it does not? Has the economic downturn 

already slowed, stopped, and reduced carbon emissions, which 

makes the recommendations in this report unnecessary? 

Thank you, Mr. Chairman, and I will yield back the balance of 

my time. 

Mr. WAXMAN. Thank you, Mr. Burgess. 

Mr. Green? 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman. 

Let me begin by saying I look forward to working with you as 

our new chair of the Energy and Commerce Committee. Over the 

years I have known you to be a tireless defender of public health 

and environment, qualities that will serve our committee well as 

we begin to tackle the many critical issues facing our Nation. 

It is timely that our first full committee hearing in this Congress 

focuses on the U.S. Climate Action Partnership, especially since the 

blueprint for the legislative action was just released this morning. 

President-elect Barack Obama has signaled that his administration will ‘‘help lead the world toward a new era of global cooperation on climate change.’’ 

To be truly successful, any efforts to reduce greenhouse gas emissions must be global in nature and must result from an extensive 

buy-in in a range of diverse U.S. stakeholders, from our industrial 

base to the consumers who pay the bills. That is what makes the 

efforts of USCAP so important. 

USCAP members—from utilities and environmental groups— 

came together to form a call to action to reverse greenhouse gas 

emissions, and today I hope to learn specifics about the USCAP 

new ‘‘Blueprint for Legislative Action.’’ And I commend them for attempting the difficult task of compromise on such a complex issue. 

And I look forward to the testimony. 

Following up on my colleague from Texas, I also read the statement last week by the CEO of Exxon, and I guess our committee 

and the Congress has a tough decision, because I have some concerns about cap and trade, because if you do just have a carbon 

tax, people know how much it is, the industry can produce using 

that, and as consumers, we know. Whereas with a cap and trade, 

it is always changing. And I have to admit, with our most recent 

economic crisis with mortgage trading and slicing and dicing 

things, how much money was taken out of the market, I am a little 

concerned about a cap and trade. And I hope the panel will talk 

about that, as compared to just a straight up carbon tax that again 

it is tough to get the votes for in Congress, but it is also—probably 

also the cleanest and most transparent thing that Congress can do 

and just put a tax on what we should be putting in our atmosphere. 

21 

So, Mr. Chairman, thank you again for holding our first hearing 

on this issue. 

Mr. WAXMAN. Thank you, Mr. Green. 

Ms. Schakowsky? 

OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you so much, Mr. Chairman. 

The science is clear: global climate change is real and poses an 

immediate threat to our planet and our way of life. The 2007 report 

of the Intergovernmental Panel on Climate Change unequivocally 

found that our climate is warming and that the primary cause of 

this warming is due to human activities. And in some ways, it is 

a relief to have arrived at this point, where there is such a great 

consensus in the scientific community, and now as we move forward in the policymaking community to address this problem. 

I think for years we have squandered the time by arguing over 

whether this is real or not real and how we should move. Humancaused pollution has already caused drastic changes to the world’s 

ecosystem. If emissions continue unabated, our Nation and the 

world will continue to experience unprecedented weather patterns, 

resulting in heat waves, droughts, wildfires, floods, public health 

threats, and the extinction of thousands of plant and animal species. This crisis warrants immediate policy response. 

I heard some of my colleagues talk about moving slowly, moving 

carefully. I don’t think those are the same things. I think we definitely need to move carefully, but I also think we need to move 

swiftly and boldly. The longer we wait, the harder and more costly 

it will be to limit climate change, and therefore I think, Mr. Chairman, it sends an excellent message that our first committee hearing of the year is on this important topic. 

And I am very grateful that the panel is here today. I hope we 

do have a robust discussion of their recommendations. 

I for one am a bit concerned about the pace that is recommended 

here. When they have a little chart about emission reduction targets, it looks like what they are saying is, the way it reads is that 

there would be an 80 percent reduction of 2005 levels of emissions 

by 2050. I think that is inadequate. I think we have to be talking 

more like an 80 percent reduction of 1990 levels and that we are 

going to have to move more swiftly to address these problems. 

Others of my colleagues have said things like, government 

shouldn’t pick winners and losers in the energy arena. Well, that 

is exactly what we have done for generations, is pick winners and 

losers; the winners being the big oil companies, the nuclear industry. Government has always made decisions about the most judicious way to achieve our policy goals in terms of helping industry. 

And now, I think, it will be our obligation to make sure that we 

create systems that will encourage the most efficient ways to reduce pollution and save our planet be available in the marketplace. 

In the weeks and months ahead, we must continue to work together with the players that are going to be here on this panel and 

with all the different interests within our own Congress to put forward the most aggressive proposal possible to solve this imminent 

crisis. 

22 

So, again, Mr. Chairman, I thank you so much for holding this 

hearing and look forward to working with you. 

I yield back the balance of my time. 

Mr. WAXMAN. Thank you, Ms. Schakowsky. 

Mr. Sarbanes? 

OPENING STATEMENT OF HON. JOHN P. SARBANES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MARYLAND 

Mr. SARBANES. Thank you, Mr. Chairman. I appreciate your 

holding this hearing. I am looking forward to serving on the committee and serving under your leadership with respect to this and 

many other issues. 

This is the most pressing issue of our time, really of any time. 

And it is fitting that we are having the hearing so early in the session. I look forward to hearing from these witnesses from USCAP. 

I wanted to just cite some statistics about what could happen to 

the Chesapeake Bay. I hail from Maryland, and the Chesapeake 

Bay is clearly a treasure for our State and the region, but also a 

national treasure. And to recount some of the projections of what 

would happen if we don’t take the steps we need to with respect 

to global warming as it would affect the Chesapeake Bay, I think 

really bringing this home: according to a report by the National 

Wildlife Federation, if we continue on our current course and fail 

to reduce carbon emissions, and this assumes an increase in 3 degrees Fahrenheit by the end of this century, global warming would 

cause the loss of, with respect to the Chesapeake Bay, more than 

167,000 acres of undeveloped dry land; 58 percent of the beaches 

along the ocean coasts; 69 percent of estuarine beaches along the 

bay, more than half of the region’s tidal swamps and wetland habitats would be replaced by more than 266,000 acres of open water, 

which is equal to about 415 square miles. This would be cataclysmic. And this is just one example of the effects of not addressing global warming. 

What I am curious to learn more about from this report, from the 

panel’s discussion today and from other hearings we will have on 

the topic is whether the targets for reducing emissions which are 

being set forth according to certain time frames actually correlate 

to the degree to which we have to slow, stop, and then reverse the 

global warming trend overall, because we can become seduced by 

the targets for reducing carbon emissions without necessarily linking them to the pace at which we actually have to stop global 

warming and reverse global warming. And it may be that the targets set are not aggressive enough, as the congresswoman just indicated. 

Bringing the market into this enterprise, which is what the recommendation here is of USCAP, is obviously critical. That alone 

can’t do it. I think we are going to have to have a hybrid approach 

in order to achieve the levels of reduction that we seek and that 

are going to make a real difference. So there needs to be a multipronged approach. But more than anything, what should come 

from this hearing and others that we have on the topic is the urgency with which we need to move with respect to reducing global 

warming and reducing our carbon emissions. We really don’t have 

23 

any time to wait. And humans are, of course, very capable of delaying on all fronts. And so we have to move quickly. We have to move 

quickly as policymakers. 

I know this committee is going to be critical to doing that. And 

I thank you for holding the hearing today. 

Mr. WAXMAN. Thank you, Mr. Sarbanes. 

Mr. Blunt? 

OPENING STATEMENT OF HON. ROY BLUNT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSOURI 

Mr. BLUNT. Thank you, Mr. Chairman. 

As it relates to this hearing today, clearly this is going to be a 

topic that this committee will deal with during this Congress and 

spend a lot of time on. 

I do wish we could have had more time to look at the partnership 

proposal before we had a hearing on the proposal. Certainly as we 

look at energy this year, my view has been and will continue to be 

that we need to find more of it, to find more American energy, to 

use less of it and to invest in the future. One of my concerns as 

we approach this topic of climate change is that we want to be sure 

that we’re investing in the future in a way that doesn’t cost jobs 

and opportunity and creates new jobs and new opportunities at the 

same time. 

Even if we knew, Mr. Chairman, where we were going to be in 

terms of the best way to power the economy 25 years from now, 

I’m not sure—as a matter of fact, I’m absolutely confident it would 

not be wise to try to get there in 5 years. To see the transition in 

the economy that could occur in a way that cost American jobs and 

cost American opportunity would be a huge mistake. We’re all concerned about passing along a strong economy and a strong environment. I know that we have many different views on this committee 

as to whether or not we’re in global warming caused by human activity or we’re in the climate change activities that have happened 

throughout the history of the planet. 

Clearly there’s always been climate change. There’s a rush to determine that somehow the current climate changes are caused by 

things that we can impact in a significant way by immediate action. There’s less debate about whether they’re all immediate actions would create lost jobs and lost economic opportunity. This 

needs to be dealt with in the most thoughtful possible way. I don’t 

disagree at all with previous comments that what we can do quickly we need to do quickly. But I do disagree that everything should 

be done in the quickest possible time frame. Everything should be 

done in a time frame that makes sense for American families, for 

the American environment but also for the American top competitive position in the world. And those are some of the topics that 

I’m sure we’ll cover. 

In this hearing today, obviously we have lots of name plates in 

front of us. So if everybody who’s going to be testifying gives a 5- 

minute opening statement, everybody that would like to ask questions of this panel today won’t be able to ask all the questions we’d 

like to ask. But clearly this is the launching point for what will be 

an important debate in this committee, an important debate in this 

24 

country, and will have massive impact on the future of American 

opportunity if we make the wrong decisions. 

And so Mr. Chairman, again, let me thank you for the way you 

got the committee started yesterday. I look forward to working 

with you personally. I know that this topic of environment and energy is one that our ranking member Mr. Barton has spent an incredible amount of time on, as I have and others have, and we are 

eager for the right opportunity—for opportunities to discuss what 

the future should look like for the American environment and 

American energy. And I yield back. 

Mr. WAXMAN. Thank you very much, Mr. Blunt. I’ve asked Mr. 

Barton and Mr. Markey and Mr. Upton to hold off on their opening 

statements, along with my opening statement, before we hear immediately from the witnesses. But I want to ask if any member 

wishes to make, other than the four I mentioned, wishes to make 

an opening statement at this time? 

Mr. BARTON. Mr. Chairman, did you ask for unanimous consent? 

Mr. WAXMAN. No. I was asking if any Member wishes to make 

an opening statement. If not, I would ask unanimous consent that 

we—when we reconvene at 10:30 that opening statements—the 

only opening statements we will have will come from the chairman, 

the ranking member of the full committee, the chairman and the 

ranking member of the Energy and Environment Subcommittee. 

Mr. BARTON. Reserving the right to object. 

Mr. WAXMAN. The gentleman is recognized for his reservation. 

Mr. BARTON. First, let me say that you have just had one of your 

Members come in so we may want to give him a right to make an 

opening statement. 

Mr. WAXMAN. We certainly will. 

Mr. BARTON. I will not object to the unanimous consent request. 

But I want to make the point that in discussions about this proceeding, I encouraged you to begin early so that members that 

wished to make opening statements could. And you were agreeable 

to that. I think we have shown this morning that opening statements are a positive part of a hearing record. And I hope that in 

the future, although we’ve changed the rules so that opening statements and hearings are now at the discretion of the Chair, that 

you will continue to work with me and others so that we give members that wish to an opportunity to make an opening statement, because I do think it’s important that we have members that are allowed to do that. 

And this committee, although it may be one of the few committees that still allows it, has always allowed every member on both 

sides of the aisle the opportunity to give some sort of an opening 

statement, maybe a 1-minute or a 3-minute before we begin the 

hearing process. So I want to thank you, even though it’s now discretionary because of our rule change, that you did use your discretion to start the hearing early so that we could have opening statements. And I hope we continue that discretion. 

Mr. WAXMAN. If the gentleman would yield, you have certainly 

made this point very clear to me. And I’m open to it and we’ll try 

to work together. 

Mr. BARTON. OK. 

25 

Mr. WAXMAN. I have a unanimous consent request pending. I 

would like to revise it by saying that if the two members who have 

just joined us wish to make opening statements they are able to 

do so at this time. 

Mr. Butterfield. 

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH 

CAROLINA 

Mr. BUTTERFIELD. Mr. Chairman, I certainly apologize for being 

late. I figured out a lot of things from being in Washington, but one 

I haven’t figured out is how to be in two places at one time. So 

thank you very much for recognizing me. Mr. Chairman, Ranking 

Member Barton, we certainly have a historic opportunity in this 

Congress and in this committee to revolutionize our energy and environmental policy. Accomplishing the monumental task of passing 

and implementing energy reform demands and bipartisanship in 

this body in cooperation between the actors involved and the 

crafting of the policy, which certainly includes our witnesses today 

from USCAP. 

Transformation of our attitude to one of cooperation and recognition of a common problem is sorely needed not only to combat the 

climate change crisis but to mobilize every sector of our society to 

participate in the process to make us more economically and environmentally secure. It is certainly our responsibility to confront 

these issues aggressively but prudently, recognizing that in our policy, there will be winners, there will be losers. The poorest among 

us, those who are least responsible for greenhouse gas emissions, 

will be the losers in nearly any iteration of policy that puts a price 

on carbon. When crafting our policy, Mr. Chairman, to curb emissions, we must mitigate the rising cost of energy on Americans poor 

who contributed the least to the problem and can least afford to 

bear the weight of a costly solution. So I thank the witnesses today 

for their efforts to find consensus among diverse actors and eagerly 

anticipate the opportunity we have in the coming months to effect 

change. Thank you. I yield back. 

Mr. WAXMAN. Thank you very much, Mr. Butterfield. Mr. Murphy, do you wish to make an opening statement? 

Mr. MURPHY OF PENNSYLVANIA. Yes. Thank you, Mr. Chairman. 

How much time? 

Mr. WAXMAN. Five minutes. 

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA 

Mr. MURPHY OF PENNSYLVANIA. Thank you. I thank you not only 

for the opportunity to make an opening statement but also to recognize the importance of members speaking to these issues. 

Early this morning I had a chance to go over to the Senate Hart 

Building and listen to some of the presentations of the United 

States Climate Action Partnership and had a preview of some of 

the important things that they’ll be saying today. As we look at 

this, as Members of Congress, I hope that this committee can add 

some other elements to this. Certainly we all want clean air and 

26 

clean water and clean land for coming generations. Even if there 

are still disputes about climate change, we need to join our hands 

together when it comes to making sure we keep this planet clean 

for following generations. But it is important as we look at these 

issues, we’re also addressing them from the standpoint of how we 

do this on a global perspective and not just a local perspective. 

United States has lost hundreds of thousands, perhaps millions of 

jobs in manufacturing over the years, some of it is technologies 

have changed, but some of it also has come from jobs moving overseas where there are not the same pollution controls or expectations, where products can be made cheaper because they pay lower 

wages and don’t have legacy costs or health or other elements 

there. 

But in the area of producing energy in clean and efficient ways, 

it is ones we have to look at in a global perspective. I look at my 

area of Pittsburgh as an example. Pittsburgh in the 1800s was referred to by Charles Dickens as hell with the lid off. It continued 

to be a highly polluting area where people understood if they went 

to work, even white collar workers, they brought a couple shirts to 

work, and they would change them a couple times during the day 

because of the soot that was left on their clothes. 

Health problems and that sort of dirtiness were seen as part of 

life, yet Pittsburgh underwent amazing transitions where now it is 

really a model of a city as how things have cleaned up. We have 

bass fishing tournaments now in rivers that were once ones where 

nothing seemed to live. We also have to understand however that 

part of the cause of that came because steel left Pittsburgh. We 

have a great team called the Steelers. But quite frankly, I don’t 

think steel is made anywhere within the city limits of Pittsburgh 

anymore. We’ve replaced it with other things. There are great companies that are headquartered such as U.S. Steel and other steel 

manufacturers. But they make that steel throughout the world 

now. We also are known in that U.S. steel made a tremendous investment in its cleratin coke works by investing over $1 billion to 

make sure that coke—you can make steel without coal, but to make 

sure that that pollution is reduced there too. We applaud them for 

that. 

But what happens with other countries with regard to how they 

make steel, how they make manufactured products and how they 

make their energy to make those products is of concern. Developing 

countries like China and India emit an estimated 2.5 to 5.0 metric 

carbons of CO2 emissions per metric ton of crude steel. The United 

States averages 1.2 metric tons of CO2 emissions per metric ton of 

crude steel. Cutting emissions in the U.S. has been done. But carbon emissions in other countries is two to four times that amount. 

That being the case, if we simply say that a cap and trade program 

in this country will be looked at and companies are allowed to or 

will continue to move their factories overseas to make their raw 

goods and their parts where cap and trade does not apply, we have 

done nothing to clean up this planet. Nothing. 

In fact we’ve just played this massive shell game by saying, we’ll 

make these heavy industry parts in other countries, ship them 

back over here, put them together and say we’ve cleaned up our 

area. We have done no such thing. We have to make sure that 

27 

whatever we do for carbon emissions and other pollution areas that 

we do this on a global perspective if we’re going to do this at all. 

I’m tired of seeing our jobs go over to China. I’m tired of continuing 

to fund both sides of the War on Terror when we are sending 

things over to the Mideast when we can do so much here with our 

rich talent. 

So I hope that we all as colleagues join together then in seeing 

what we can do with the United States being a leader in bringing 

other nations to the table on this. We have to have solutions. We 

cannot afford to not the have solutions. We cannot afford to ignore 

this and we cannot afford to simply shuffle the jobs off to other 

countries and turn away and pretend we did something meaningful. With that, I yield back. Thank you very much, Mr. Chairman. 

Mr. WAXMAN. Thank you, Mr. Murphy. Mr. Welch. 

Mr. WELCH. Thank you, Mr. Chairman and ranking member. My 

opening statement is, I’m glad to be here, and I look forward to 

working with the committee. Thank you. 

Mr. WAXMAN. Thank you, Mr. Welch. Seeing no other members 

that wish to be recognized at this time for an opening statement, 

other than the four I mentioned earlier, the unanimous consent request before us is to recess until 10:30, at which point we will hear 

from the chairman and ranking member of the full committee, 

chairman and ranking member of the subcommittee, and the witnesses that are before us. Without objection that will be the order. 

We’ll recess for another 5 or 6 minutes. 

[Recess.] 

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

Mr. WAXMAN. The meeting of the committee will please come to 

order. I am pleased to welcome you all here today to the first hearing of the Energy and Commerce Committee in the 111th Congress. 

We’re holding this hearing on one of the most important issues 

Congress will face. It concerns our children’s future, our economic 

future, and our security as a Nation. It is also about responding to 

the economic crisis we face. 

Today we’re going to hear from some of our Nation’s most prominent leaders in business and environmental community. These diverse leaders have come together in the U.S. Climate Action Partnership to call for legislation to reduce the threat of global warming. They recognize that the key to a revitalized economy and our 

long-term prosperity as a Nation lies in addressing climate change 

and transitioning to a clean energy economy. 

We are struggling with a grave economic crisis. Many Americans 

have already lost their jobs, their homes, their retirement savings. 

Many more are worried about their economic future. As Congress 

acts to address the immediate crisis, we must also lay the foundation for sustained long-term economic growth and security. 

Our environment and our economy depend on congressional action to confront the threat of climate change and secure our energy 

independence. U.S. industries want to invest in a clean energy future, but uncertainty about whether, when, and how greenhouse 

gas emissions will be reduced is deterring these vital investments. 

28 

Companies are caught in a dilemma. They are reluctant to invest 

in old polluting technologies because they know that tougher regulations are inevitable but they can’t invest in new cleaner technologies until they know what Congress is going to require. 

Our job is to extend to these industries a way to end the regulatory limbo and set our Nation on a responsible path for reducing 

climate change and achieving energy independence. Our committee 

will be acting quickly and decisively to reduce global warming and 

end our dependence on foreign oil. My goal as Chairman is to pass 

a comprehensive climate and energy legislation in the committee 

before the Memorial Day recess. 

That’s an ambitious schedule, but it’s an achievable one. We cannot afford another year of delay. As of today’s hearing, we will 

show through the testimony a consensus is developing that our Nation needs climate legislation. Our job is to transform this consensus into effective legislation. The legislation must be based on 

the science and meet the very serious threats we face. We are fortunate that Ed Markey, one of the most experienced legislators in 

Congress, will be chairing the Energy and Environment Subcommittee. We’re also fortunate that we have so many skilled and 

knowledgeable members on both sides of the aisle on this committee. 

Finding a consensus is not always easy, but I know that with the 

leadership that we will be able to have in our subcommittee from 

other members, we can succeed. Climate change, energy independence, and health care are going to be the committee’s highest priorities. Passage of the children’s health bill yesterday was a down 

payment on health reform. Today’s hearing starts our work on climate change and energy independence. We’ll be working on both 

issues at the same time. I welcome our distinguished witnesses and 

look forward to their testimony. But first we’re going to hear from 

the Ranking member of the full committee, the Chairman and the 

ranking member of the subcommittee. Mr. Barton. 

Mr. BARTON. Thank you, Mr. Chairman. Before I give my statement I want to make sure that we have on the record, members 

will be allowed, time permitting, to ask questions of the witnesses 

and if time does not permit, we will be able to give written questions and the answers will be submitted for the record. 

Mr. WAXMAN. Without objection, that will be a unanimous consent request that will be adopted. Any objections? Hearing none, 

that will be the order. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Mr. Chairman, I’m very willing to work with you 

and others on the Committee to try to accomplish the goal that you 

just announced. I think it’s good for the new chairman to have 

goals and that’s certainly a worthy goal. Having said that, I want 

to make a couple of comments that are cautionary. First, several 

of our members, in their opening statements earlier before the 

panel got here, indicated that the science is settled on climate 

change. The science is not settled. This is not a hearing to debate 

the science, so I won’t do that. I would point out though until 

Christopher Columbus discovered America in 1492 the science was 

29 

settled that the earth was flat. I will also point out that until the 

mid-1800s, the science was settled that if somebody was sick, you 

bled them, and as late as the mid-1940s the science was that airplanes couldn’t exceed the speed of sound. 

Science has a way of being settled status quo that turns out not 

to be. What I will say is that science is settled that CO2 concentrations are increasing in the atmosphere. That’s a true statement. I 

will also stipulate that in some parts of the globe, temperatures are 

going up. I’m still not sure what average world temperature means. 

To me, what’s more important is what’s the temperature in Arlington, Texas, at a time certain in a place certain. But having said 

that, until you show me one of these U.N. models that can predict 

the past with at least 50 percent accuracy, much less the future, 

I’m not going to stipulate that the science is settled. 

Having said that, we’re here today because we’ve got a distinguished list of panelists who have joined together to come up with 

a matrix on how to help our environmental and our economic 

issues. And they are distinguished. I know at least 2⁄3 of them personally. And I will stipulate that they’re all men and women of 

honor and integrity. One of the things that they say in their statement of principles is that they want a plan that’s economically viable. Let me just read the stock prices of the witnesses today that 

are before us. We have the CEO of Conoco-Phillips. His stock price 

a year ago was $75.15 a share. It closed yesterday at $48.82. That’s 

a 35 percent reduction. Duke Energy, Mr. Rogers is with us. His 

stock price a year ago was $20.05. It closed yesterday at $14.89. 

That’s a decline of 26 percent. Mr. John Rowe, who represents 

Exelon, his stock price a year ago was $77.49. It closed yesterday 

at $52.84. That’s a decrease of 32 percent. Mr. Crane, who represents NRG, $40.99, $23.17 yesterday, minus 43 percent. General 

Electric, one of the bedrocks of American industry, $35.27 a year 

ago, $13.87. That’s a decline of 61 percent. Unfortunately I own 

some of that stock. 

So I want my G.E. folks to get with the program here. Rio Tinto, 

$402.09, closed yesterday at $81.52. A decline of 80 percent. Siemens closed yesterday 61 percent off. PNM, Mr. Sterba, who has 

got a new hairdo I see. 

Mr. STERBA. Yes, sir. 

Mr. BARTON. $20.09 a year ago, $10.31 yesterday, a decline of 49 

percent. And the winner, in terms of least decline is Pacific Gas 

and Electric, Mr. Darbee. Their stock a year ago was $44.22. Yesterday it was $36.52 which is a decline of only 17 percent. It must 

be something about the California economy, Mr. Chairman, it is 

helping or maybe Mr. Darbee is just an unbelievably excellent leader. My point is, there’s not one CEO here today whose stock price 

is even close to what it was a year ago. We’re in a very serious economic recession. And you cannot tell me that if we adopt one of 

their principles of a mandatory, mandatory cap and trade program 

on CO2 emissions for our economy that it’s going to help their stock 

prices. 

Now stock price is an inelegant value of the whole economy. I understand that. But we should be about protecting jobs, creating 

jobs. If we can do things, Mr. Chairman, that improve energy efficiency, if we get more energy or we get more output for less energy, 

30 

and there’s an environmental benefit consequently because of that, 

that’s a good thing. But if we say we have to do things to lessen 

CO2 regardless of the economic consequences, in my opinion, that’s 

a bad thing. 

So I think we should start with solutions that work. Mr. Boucher 

has a bill that is an R&D program for CO2 carbon capture, conversion and sequestration. There’s consensus on both sides of the aisle 

that that bill is a good first step. We should move that bill, Mr. 

Chairman. Then let’s look at the experience in Europe of their cap 

and trade program, which is not working. Which is not working. 

And go from there. And last thing, we don’t have the CEO of 

ExxonMobil here. I don’t know if they’re a part of USCAP. But 

their CEO has come out and said, if we have to do something about 

carbon, let’s have a carbon tax. 

Now I’m not an advocate of a carbon tax. But I do believe that 

if you really, really, really want to reduce CO2, a carbon tax is the 

most efficient way to do it. And we should get with our friends at 

Ways and Means and give that some serious consideration. With 

that, Mr. Chairman, I’ll yield back. I do appreciate the witnesses 

being here. I’ve read the synopsis of their program. And I do agree 

with their conclusion that we want to do things that are sustainable, that protect the economy and show that America can be a 

world leader. I do agree with that. 

Mr. WAXMAN. Thank you Mr. Barton. Mr. Markey. 

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF MASSACHUSETTS 

Mr. MARKEY. Thank you, Mr. Chairman, very much. The coalition of American businesses and environmental groups before us 

today represents the evolution that has occurred on the issue of 

global warming. We have emerged from the last decade primordial 

ooze of discord and delay on global warming action. We have now 

arrived on terra firma where hard emissions reductions targets 

must supplant voluntary measures that aren’t up to the job. And 

instead of struggling to stay afloat in a mire of skepticism, we’re 

now poised to march forward with a new climate-friendly Obama 

administration and congressional leadership. But evolution will 

only take us so far on this issue. What we now need is legislative 

intelligent design. 

Now the hard task of enacting global warming legislation is before us. The witnesses here today, their shareholders and members 

and a growing majority of Americans know that the key to our economic growth, national security, and planetary survival is to pass 

energy and climate legislation that will finally unleash the clean 

energy revolution that has been building for years. The CEOs that 

are testifying before us today are not here to harm shareholder 

value. They are here to help lay out a plan, which will enhance 

shareholder value in the years ahead. To target where the economic growth opportunities are for our country and to create the 

jobs that will employ Americans for this generation and generations to come. That is why they are here. They understand the 

problems better than any that our country is faced with today economically. 

31 

Our country has been hit by an economic tsunami. At the same 

time, we are feeling the early effects of a climate storm that is 

growing stronger and approaching faster than predicted just a few 

years ago. Comprehensive clean energy and climate legislation is 

the solution to both of these problems. And it is a solution for the 

whole country. High tech hubs like Massachusetts and sunny California will benefit. But so will steelworkers in Pennsylvania and 

former Maytag manufacturing workers in Iowa who are building 

blades for wind turbines. And ranchers in Texas and South Dakota 

are seeing their relentless winds turned into revenue with every 

turn of the wind turbine sprouting on their lands. Last year I introduced iCAP, the Investing in Climate Action and Protection Act, as 

my contribution to the climate policy discussion. Many of the core 

ideas of iCAP are reflected in the discussion draft put forward by 

Chairman Dingell and Chairman Boucher this past October. And 

many are consistent with the blueprint issued by the U.S. Climate 

Action Partnership today. Those developments bode well for the 

work before us. And I look forward to working with you, Chairman 

Waxman, chosen newly as the chairman because you have shown 

such tremendous leadership on this issue. I look forward to working with the other members of the committee, the administration 

and the American people to enact climate legislation that will save 

our economy and protect the planet. 

As the new chairman of the Energy and Environment Subcommittee, I am committed to moving a bill as quickly as possible 

in partnership with Chairman Waxman and all of the members, bipartisan, Democrat and Republican so that we can as quickly as 

possible deal with this issue because the urgency of the problem 

demands swift action. So I thank you, Mr. Chairman. I think it’s 

very appropriate that you made this the first hearing and the quality of this first panel represents the magnitude of this issue. And 

I yield back the balance of my time. 

Mr. WAXMAN. Thank you very much, Mr. Markey. Mr. Upton. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Well, thank you, Mr. Chairman. I just hope that this 

hearing is not necessarily a sign of things to come. I can remember 

when Republicans took the majority in the 1990s and I can remember sage advice given by my friend, Mr. Markey, who said that we 

ought to have the subcommittee chairman of Oversight and Intel, 

his advice was that we not have more than one panel and not more 

than six or seven witnesses and always allow the minority to have 

an equal say in terms of the folks on that panel. And admittedly, 

we have one panel today, but we have far more than six or seven. 

And I’m not sure that the minority was afforded the opportunity 

to, in fact, insist on a couple different witnesses. I also wish that 

we had received this blueprint earlier than this morning. 

Clearly it was printed before today. It would have been nice to 

at least have taken it home last night to be able to digest some of 

the summaries and the information rather than get it thrust at us 

literally at 9:00 this morning over in the Cannon Building. 

But I would confess that climate change is real. I recognize that 

we have a problem, and in fact, we do need to take action. I have 

32 

never been a fan of cap and trade. We’re fortunate to look at the 

EU’s failure and their inability to reduce global gas emissions. Climate change policy must adhere to a number of different commonsense principles. It must provide a tangible environmental benefit 

to the American people. It has to advance technology and provide 

the opportunity for export. It has to protect American jobs. It has 

to strengthen U.S. energy security. And it does require global participation. I’ll support legislation—I won’t support legislation that 

doesn’t meet those standards. 

In my State of Michigan, things are really, really tough. Our governor told us last week that our unemployment offices across the 

state are fielding 100,000 calls an hour. By design, a cap and trade 

approach works by increasing energy costs and slowing down economic growth. We can’t afford that in Michigan. As a former member of this committee from the other side of the aisle, Sherrod 

Brown, now a Senator from the State of Ohio during the Senate 

cap and trade debate last year, sent a letter to Majority Leader 

Reid who said, and I am quoting directly from his letter, that cap 

and trade programs developed in the Lieberman-Warner bill have 

the potential to raise over $7 trillion. 

Much of those funds will be indirectly paid for by consumers 

through increased energy prices. I think he had it right. The only 

consensus achieved during that Senate debate was that the cap 

and trade approach was not appropriate. Rather than making energy more expensive, hurting our fragile economy and sending 

American jobs overseas, we need to be pursuing an approach that 

promotes and encourages clean energy, builds economic strength 

through exporting American technology and thus creates jobs rather than exporting them. And I propose instead of setting an arbitrary cap that isn’t linked to tangible global greenhouse gas reductions or recognizable drop in global temperatures that we should 

begin working on a clean energy policy that spurs investments in 

that technology and American jobs. More nuclear. 

We need to invest in clean coal technologies like carbon capture. 

We need to invest more in wind and solar and other renewables 

like hydro and we need more conservation. We must take a sectorby-sector approach that cultivates innovations in technology and efficiency rather than arbitrary government mandates. And we must 

meet our ever increasing energy demands as our economy begins 

to move forward and recover from this recession that we’ve been 

in, particularly in Michigan, for a long, long time. And you can’t 

exclude China or India. 

Mr. Chairman, I look forward to the presentation and the questions that we’ll be able to afford ourselves, both in person as well 

as in writing. I yield back the balance of my time. 

Mr. WAXMAN. Thank you Mr. Upton. Today we’re honored to 

have with us 14 chief executive officers and presidents of a broad 

range of businesses and leading environmental organizations, all of 

whom are here as members of the U.S. Climate Action Partnership 

or USCAP. USCAP is a coalition of over 30 businesses and leading 

environmental groups with the common purpose of urging Congress 

to enact climate change legislation promptly. And I would note that 

two other members, Alcoa and Deere and Company had been invited to testify and ultimately were unable to do so. This is a truly 

33 

a distinguished panel. And I can spend a great deal of time discussing their accomplishments and their portfolios and their stock 

prices. But I think that since the purpose of this hearing is to hear 

from them and time is short, I’ll forgo a full introduction. 

Joining us today are Jonathan Lash, President, World Resources 

Institute. James Mulva, Chairman and Chief Executive Officer of 

Conoco-Phillips. George Nolen, President and Chief Executive Officer of Siemens Corporation. Fred Krupp, President of Environmental Defense Fund. John Rowe, President and Chief Executive 

Officer of Exelon Corporation. David Crane, President and Chief 

Executive Officer of NRG Energy. Preston Chiaro, Chief Executive 

Officer of Rio Tinto. Jeffrey Immelt, Chairman and Chief Executive 

Officer of General Electric. Frances Beinecke, President of Natural 

Resources Defense Council. Jim Rogers, Chairman and President, 

Chief Executive Officer of Duke Energy. Peter Darbee, Chairman, 

CEO and President of PG&E Corporation. Eileen Claussen, President of the Pew Center on Global Climate Change. Mark Tercek, 

President and Chief Executive Officer, The Nature Conservancy. 

And Jeffry Sterba, Chairman, CEO and President of PNM Resources. 

STATEMENTS OF JEFFREY IMMELT, CHAIRMAN AND CHIEF 

EXECUTIVE OFFICER, GENERAL ELECTRIC; JIM ROGERS, 

CHAIRMAN AND PRESIDENT, CHIEF EXECUTIVE OFFICER, 

DUKE ENERGY; FRANCES BEINECKE, PRESIDENT, NATURAL 

RESOURCES DEFENSE COUNCIL; FRED KRUPP, PRESIDENT, 

ENVIRONMENTAL DEFENSE FUND;EILEEN CLAUSSEN, 

PRESIDENT, PEW CENTER ON GLOBAL CLIMATE CHANGE; 

PETER DARBEE, CHAIRMAN, CEO AND PRESIDENT, PG&E 

CORPORATION; PRESTON CHIARO, CHIEF EXECUTIVE OFFICER, RIO TINTO; AND JAMES MULVA, CHAIRMAN AND CHIEF 

EXECUTIVE OFFICER, CONOCO-PHILLIPS. 

Mr. WAXMAN. As I understand it, we’re going to hear from six 

witnesses—no, in agreement with the witnesses, six witnesses will 

waive their opening statement. And we thank them for their understanding. For the remainder, we’ll hear 2-minute oral statements 

from each, and we have written statements from all of the witnesses, which we will enter into the record. 

I would like to also forewarn members, which I have mentioned 

this before, that some members of the panel will have to meet prior 

engagements this afternoon with the incoming administration. And 

as Mr. Barton and I have discussed, when this group of witnesses 

needs to leave, they will leave behind a group of designated replacements and will stay until we have finished with all our questions from all of the members who wish to ask questions. 

We’re going to start a new policy in this committee that all witnesses that testify before us do so under oath. So I’d like to ask 

you if you would now that you are comfortably seated to please 

stand and raise your right hands. 

[Witnesses sworn.] 

Mr. WAXMAN. The record will indicate each of the witnesses answered in the affirmative. We’ll turn to our first witness for a 

statement, Mr. Immelt from General Electric. 

34 

STATEMENT OF JEFFREY IMMELT 

Mr. IMMELT. Good morning, Mr. Chairman. Thank you and 

Ranking Member Barton, members of the committee, good morning, and it’s an honor to be here this morning. Thank you for this 

opportunity. I’m Jeff Immelt, chairman of G.E. I understand we 

might have gotten off on the wrong foot this morning. I want to 

apologize for any process difficulties or misunderstandings we had. 

But we are honored to be here and we look to being responsive. 

We’ve been briefed on what the opening comments were. And 

please know directly from all of us that there is no intention to be 

disrespectful in any manner. We are here to be helpful in this process. So let me say that from the outset. We’ve launched a clean energy initiative in G.E. about 5 years ago. Here’s what we’ve learned 

so far. We’ve reduced our own carbon footprint from where we were 

in 2004 by 8 percent between now and then. That represents about 

$100 million savings per year. 

So in an industrial setting, we’ve taken it on internally to great results. We’ve invested approximately $3 billion in clean energy 

R&D each year over that time period. That has generated $17 billion in 2008 revenue, 20 percent annual growth. Ranking member 

Barton, if this was our only business, our stock price would be 

doing much better right now. This is actually a great place to invest. And we’ve created competitiveness. 20 percent of our jobs inside G.E. are tied to green products. And that pulls with it another 

60,000 supplier jobs. 

We are a net exporter of these products. So we view this as being 

a core of our global competitiveness. That’s just a background of 

how I have come here. 

I represent, and we’ve all come together as the members of U.S. 

Climate Action Partnership, each one will go through some of the 

aspects of the blueprint that we’ve introduced today. But I would 

just make maybe four points at a very high level. One is that we 

really have gathered together a very diverse group of leaders. We 

represent industrial customers, utilities, car companies, oil companies. We really have tried to put together a representative segment 

of the industrial complex in the United States as well as having 

some of the leading NGOs in this field and experts over a long period of time. 

The second point I’d make is that what we try to do is a balanced 

and integrated approach with the understanding that economics 

are important, that solving the environmental issues are important, and we’ve tried to link in the proposal—the right trade-offs 

you know that can be—should be considered as we go forward with 

this kind of legislation. I’d say the third thing that we try to do 

is represent in cap and trade a market-based approach for pricing 

carbon that we think over the long term will stimulate technology 

and make that a tremendous source of great strength as we go forward. The last comment that I would make is that we’ve always 

viewed U.S. Climate Action Partnership as a catalyst for change. 

We don’t think we have all the answers. We think this is a starting 

point that can be built on and please accept that in the spirit with 

which it’s given. We are people trying to solve what we view as a 

problem, trying to turn that into an opportunity and trying to do 

that in the context of being good citizens and being constructive in 

35 

this dialogue. So thank you very much. And I’ll turn this over to 

Jim Rogers. 

Mr. WAXMAN. Thank you, Mr. Immelt. 

[The prepared statement of Mr. Immelt follows:] 

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Mr. WAXMAN. Mr. Rogers. 

STATEMENT OF JIM ROGERS 

Mr. ROGERS. I’m Jim Rogers. I’m the CEO of Duke Energy. We 

serve a population of more than 11 million people in the in five 

States in the Midwest and in the Carolinas. On their behalf, I want 

to thank you for holding this hearing on USCAP’s blueprint for legislative action. The song lyrics ‘‘You can’t always get what you 

want, but if you try some time, you might find you get what you 

need’’ is not only a great line from a classic Rolling Stones song, 

but I suspect it is a feeling each of us have had as we created this 

blueprint for legislative action. We develop legislative proposals to 

be considered as a package, ones that seek to carefully balance the 

oftentimes conflicting demands of protecting our environment, our 

economy and our consumers. Decarbonizing our economy by 80 percent between now and 2050 would be a historic undertaking. It will 

not be cheap. And it will not be easy. 

The sooner we pass climate change legislation, the better off our 

economy and the world’s environment will be. If we go about it in 

the right way, we cannot only avoid unnecessary economic harm 

and dislocation, but we can also ignite a lower carbon green revolution and more rapidly put this recession in our rear view mirror. 

It’s my judgment that if we can couple a short-term stimulus package with this longer-term climate plan, we have the ability to stimulate greater confidence from consumers, entrepreneurs and corporations and we all know recessions are put in the rear view mirror when you have the capability to build confidence in the future 

and make investments. 

And let me quickly say, for our company, we plan to invest $25 

billion in infrastructure over the next 5 years. It is critical we know 

the rules of the road of climate change as soon as possible to make 

sure that we are making the right investments. Regulatory uncertainty is postponing investments and renewables in other green 

technologies. It’s postponing the creation of jobs from apprentices 

to engineers to Ph.Ds. Our one fear—and I will leave this with 

you—is that many in Congress will look for reasons to postpone action on climate legislation this year. As a former consumer advocate who fought rate increases of utility companies in the 1970s, 

I believe by starting now we have a better chance to smooth out 

and minimize the inevitable cost increases that will be imposed on 

U.S. consumers. We have important provisions in this blueprint 

that mitigate the cost impact on electric consumers by achieving 

president-elect Obama’s stated objective to reduce carbon emissions 

by 2020. Thank you, Chairman Waxman and the committee. I appreciate the opportunity to be here today. 

Mr. WAXMAN. Thank you Mr. Rogers. 

[The prepared statement of Mr. Rogers follows:] 

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Mr. WAXMAN. Ms. Beinecke. 

STATEMENT OF FRANCES BEINECKE 

Mr. BEINECKE. Thank you very much, Mr. Chairman, and all 

members of the committee for being here today and hearing the 

recommendations of USCAP. I am Frances Beinecke, President of 

the Natural Resource’s Defense Council, and I want to congratulate 

you for devoting the first hearing, Chairman Waxman, of your 

chairmanship to addressing global warming. You are demonstrating that you share our understanding of the urgency of enacting comprehensive legislation to cut global warming pollution. 

The scientific basis for prompt action has become even more compelling in the 2 years since USCAP issued its call for action. The 

Nobel Prize-winning Intergovernmental Panel on Climate Change 

issued its most definitive report and even more recent findings 

show that global warming is occurring at a pace that equals or exceeds the upper bounds of earlier predictions. We see this in higher 

global temperatures, in the shrinking Arctic ice sheet in the increasing acidification of the oceans and increasing sea level rise. 

Global warming is no longer a distant threat, but a present danger 

to public health to national security, to biodiversity to the planet. 

Some will suggest that the current economic crisis is a reason to 

delay comprehensive climate legislation. I believe that the opposite 

is true. The work this committee has already started on economic 

stimulus legislation can jump-start investments in clean energy infrastructure and help get our economy back on track. These public 

investments will leverage much more private spending and will be 

far more effective if Congress follows the economic stimulus bill by 

promptly enacting legislation that establishes a clear roadmap for 

achieving the 80 percent reduction in global warming pollution 

that’s needed by mid century. 

The targets during the first decade of the program are among the 

most important and most challenging of a bill’s design features. 

Since the U.S. is late in cutting emissions, we need to make up for 

lost time, but some stakeholders are concerned about the cost and 

feasibility of meeting deep emission reduction targets, particularly 

in the early years. This tension has led to a range of views on the 

appropriate near-term targets. In the blueprint, USCAP recommends emission limits for cap sources and for total U.S. emissions that would be equivalent to an 80 percent reduction by 2050, 

nearly 50 percent reduction by 2030 and a range of 14 to 20 percent reduction by 2020. It’s important to stress that these targets 

are tightly linked to the other recommendations included in the 

blueprint as will be described by my colleagues. 

I’d also like to be clear that NRDC believes the science justifies 

a reduction of at least 20 percent by 2020. We joined request the 

USCAP consensus because we believe it is critical to enact climate 

legislation this year, and we believe that the blueprint shows a way 

to marshal the support from diverse constituencies needed to 

achieve that goal. 

Mr. Chairman and all members of the committee, we have a 

short window of opportunity to enact effective global warming legislation and secure our physical economic and environmental fuVerDate Nov 24 2008 15:26 May 20, 2011 Jkt 037690 PO 00000 Frm 00058 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 111\111TH RESEARCH\111-1 CHRIS
53 

ture. We look forward to working with all of you to achieve that 

in the coming year. Thank you. 

[The prepared statement of Ms. Beinecke follows:] 

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Mr. WAXMAN. Thank you very much, Ms. Beinecke. 

Mr. Krupp. 

STATEMENT OF FRED KRUPP 

Mr. KRUPP. Thank you, Mr. Chairman. I am honored to be here. 

This blueprint for climate security is a blueprint because it has a 

cap that protects the atmosphere. The cap is the legal guarantee 

that pollution actually goes down. But the cap does a lot more than 

that. The cap creates customers. And if America has ever needed 

customers at home and abroad both for new and existing technologies, now is that time. And thank you, Mr. Chairman, for your 

commitment to move legislation out of this committee by the Memorial Day recess. For the sake of our atmosphere and our economy, we really need Congress to enact this legislation this year. My 

role is to talk about cost control measures, the most powerful of 

which is the cap and trade program itself. Cap and trade creates 

competition that will drive costs down while amplifying the effect 

of any stimulus package that you’ve passed. These measures— 

other measures will also be needed. 

And these measures should protect the economy, drive investment and energy efficiency and maintain the environmental integrity of the overall emissions budget. Emissions offset, that is activities that reduce greenhouse gas emissions that are not included in 

sectors that are not part of the cap, are a critical cost control measure recommended in the USCAP blueprint. Since USCAP is recommending stringent emissions targets, we also recommend the generous use of offsets to help moderate the compliance costs. USCAP 

recommends that Congress establish a board to set an overall annual upper limit for offsets starting at 2 billion metric tons with 

the authority to increase offsets up to 3 billion metric tons. Since 

the quality of offsets is an important—as important as the quantity, we also recommend that Congress direct EPA to establish a 

rigorous and transparent process for ensuring that all our offsets 

represent real and additional reductions. 

In addition, the board should oversee system-wide strategic offset 

and allowance pool, a carbon board which includes a reserve pool 

with additional offsets and as a measure of last resort the ability 

to borrow from future compliance periods that could be released 

into the market to prevent undue economic harm if necessary. 

Quality as far as carbon tons created by reducing tropical deforestation, would be eligible both for the international offset portion 

and for this strategic offset reserve. Thank you. 

[The prepared statement of Mr. Krupp follows:] 

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Mr. WAXMAN. Thank you, Mr. Krupp. 

Ms. Claussen. 

STATEMENT OF EILEEN CLAUSSEN 

Ms. CLAUSSEN. Chairman Waxman, Ranking Member Barton, 

and members of the committee, my name is Eileen Claussen and 

I’m the president of the Pew Center on Global Climate Change. I 

am going to say a few words about USCAP’s recommendations regarding the allocation of allowance value. Greenhouse gas emission 

allowances in an economy-wide cap and trade system will represent 

trillions of dollars in value over the life of the program. USCAP believes the distribution of allowance value should facilitate the transition to a low-carbon economy for consumers and businesses, provide capital to support new low and zero greenhouse gas-emitting 

technologies and address the need for humans and the environment to adapt to climate change. 

USCAP recommends that a significant portion of allowances 

should be initially distributed free to capped entities and economic 

sectors particularly disadvantaged by the secondary price effects of 

a cap and that free distribution of allowances be phased out over 

time. The USCAP blueprint identifies principles to guide the fair 

and equitable allocation of allowances to end use consumers of electricity, natural gas and transportation fuels, low-income consumers 

and workers in transition, energy intensive industries that face 

international competition, trade exposed commodity products, competitive power generators and other nonutility large stationary 

sources, programs to achieve technology transformation and adaptation needs of vulnerable people and ecosystems at home and 

abroad. 

One of our main objectives is to dampen the price impact of climate policy on the customers of electricity and natural gas, particularly in the early years of the emissions constraint. And therefore, 

we believe that a significant portion of emission allowance value 

should also be allocated to electric and natural gas local distribution companies which are cost regulated and where the prices—the 

price alleviation would be passed on to consumers. Thank you. 

[The prepared statement of Ms. Claussen follows:] 

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Mr. WAXMAN. Thank you, Ms. Claussen. Our next witness to testify is Mr. Darbee from PG&E. 

STATEMENT OF PETER A. DARBEE 

Mr. DARBEE. Mr. Chairman, Ranking member Barton, other 

members of the committee, thank you for the opportunity to be 

here this morning. I’m going to address the issue of energy efficiency, one of my favorites. From virtually every angle, be it cost 

or technology or the size and value of the benefits, one of the best 

strategies to attack the climate problem is improving our energy efficiency. It, as Time Magazine said in a recent cover story, it’s perfectly clean, remarkably cheap, surprisingly abundant and immediately available. Its cost is about 2 or 3 cents a kilowatt hour, 

which is I think as cheap or cheaper than any alternative energy 

source. USCAP hardly seconds the appraisal of Time magazine. 

Fortunately for 30 years, PG&E has designed and run some of the 

world’s most effective energy efficiency initiatives. This success is 

just one of the many indicators pointing to the enormous benefits 

available naturally in this field. In USCAP’s view, these include 

not only lower energy emissions, but also economic investment, jobs 

and not the least savings for our customers. The key lies in the 

right mix of policies, programs and incentives. With that as the 

goal, USCAP’s specific recommendations are the following: Setting 

or updating codes and standards for buildings and end use technologies at the Federal and State levels, including improving efficiency in Federal buildings. Expanding tax credits, incentives and 

rebates for buildings that outperform energy efficiency codes. Fully 

funding energy efficiency outreach in education. Providing incentives to manufacturers and retailers who embrace highly efficient 

equipment and appliances, using tax and regulatory policies to 

drive consumers and manufacturers towards more energy efficiency 

product and processes. Developing a generally accepted approach 

for measuring and tracking energy reductions and corresponding 

emissions benefits. Encouraging State regulators to align policies 

so that utilities are incentivized to put a high priority on energy 

efficiency and demand management. A prime example of this is 

revenue decoupling which eliminates the incentives for utilities to 

sell more energy as they are currently motivated to do today. 

Tracking and reporting State progress on energy efficiency potentially rewarding the leaders with additional energy efficiency funding, and finally, labelling buildings to provide information on the 

value of energy savings and requiring that information be factored 

into loan applications and underwriting. 

Together we believe these steps would jump start major progress 

towards boosting the overall energy efficiency of the U.S. economy. 

Thank you for this opportunity to speak before you. 

[The prepared statement of Mr. Darbee follows:] 

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Mr. WAXMAN. Thank you, Mr. Darbee. 

Now we’ll hear from Mr. Chiaro from Rio Tinto. There’s a button 

on the base. 

STATEMENT OF PRESTON CHIARO 

Mr. CHIARO. Chairman Waxman, Ranking member Barton, and 

distinguished members, members of the committee, thank you for 

agreeing to listen to our views this morning. I am Preston Chiaro, 

chief executive energy and minerals for Rio Tinto. We are a major 

minerals and metals producer with operations and markets worldwide. Here in the U.S., we’re the second largest coal producer and 

we are also the world’s second largest producer of uranium for nuclear power generation. Our coal and uranium together provide the 

fuel for about 9 percent of the Nation’s electricity generation. Our 

U.S. businesses employ over 15,000 people in 31 States with major 

operations in California, Kentucky, Utah, and Wyoming. 

I want to talk this morning about technology, many low greenhouse gas emitting technologies already exist. And these technologies will be important for near-term reductions. But we must 

also develop the long-term critical path solutions that will allow us 

to meet aggressive reduction targets over time. Critical path technologies such as carbon dioxide capture and storage or CCS need 

stable predictable funding sources not subject to annual appropriations in order to compress and accelerate the technology deployment and commercialization time frames. CCS really is a key, enabling technology to unlock an environmentally friendly future for 

fossil fuels. 

The proposals outlined in the blueprint are intended to promote 

CCS technologies to levels above and beyond what a CO2 market 

price signal alone will yield. Our specific recommendations include 

first by 2010, a comprehensive national strategy for implementing 

all necessary rules and removing legal barriers for CCS deployment. Second, funding for five gigawatts of projects to demonstrate 

full integration and viability of CCS with power production and 

other industrial processes. 

Demonstration projects must be underway even before a cap and 

trade program is in place. Third, direct funding of CCS projects for 

sequestered CO2 from coal and other fossil fuels made on a first 

come first serve basis. Funding levels must be adequate to cover 

the incremental costs of capturing and storing CO2 instead of emitting it into the atmosphere, and sufficient to encourage deployment 

on the order of about 72 gigawatts. We believe this will keep coal 

in the overall generation mix and avoid a costly dash to gas within 

the power sector. 

Once an adequate regulatory framework and financial incentives 

are in place and CCS technology has been successfully deployed in 

commercial settings, we recommend that all new coal plants meet 

a reasonable performance standard. We believe that these policy 

recommendations will go far in ensuring that coal remains a cornerstone of electricity generation in the future while responding to 

the imperative to reduce man-made greenhouse gases. Thank you. 

[The prepared statement of Mr. Chiaro follows:] 

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Mr. WAXMAN. Thank you very much, Mr. Chiaro. 

And finally we’ll hear from Mr. Mulva from Conoco-Phillips. 

STATEMENT OF JAMES MULVA 

Mr. MULVA. Good Morning, Mr. Chairman and committee members. As chairman of Conoco-Phillips, the third largest, U.S.-based 

integrated energy company, we support the integrated set of recommendations included in USCAP’s blueprint for legislative action. 

Greenhouse gas emissions from transportation fuel represent nearly 1⁄3 of U.S. total. Clearly, this sector must be covered by any comprehensive national policy. However, reducing these end use emissions is going to be complicated. It would require a systematic approach that involves fuel providers, vehicle and equipment manufacturers, consumers, public officials and policymakers. Now the 

blueprint offers several key recommendations specific to transportation. 

First, emissions from transportation should be included in an 

economy-wide cap. Second, fuel providers should be responsible for 

securing allowances for the resulting consumer emissions. And 

third, coordinated performance measures should be established for 

all factors involved and that is vehicles, fuels and consumers. Including transportation within the cap will provide the environmental certainty that’s needed. It will encourage efficiency, technological progress and more energy conscious consumer practices. 

Recommended performance measures include one, a greenhouse 

gas-based fuel performance standard that’s challenging but it’s also 

economically and technically feasible. Two, improve vehicle emission standards. And three, strong policies that would reduce emissions from travel, stimulate investments in efficiency and encourage less carbon intensive infrastructure development. These measures should be periodically reviewed and updated for their effectiveness. Our company and other USCAP members are committed 

to working with Congress and the new administration. We urge 

you to enact legislation that effectively protects the climate while 

also assuring the safe, secure and affordable energy supplies that 

sustain our economy and standard of living. Thank you. 

[The prepared statement of Mr. Mulva follows:] 

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Mr. WAXMAN. Thank you very much for your testimony. 

I note that these are the members of your group selected to give 

oral statements, but we have written statements from the rest of 

you, and those will certainly be in the record. 

[The statements of Jonathan Lash, George Nolen, David Crane, 

Mark Tercek, and Jeffry Sterba follow:] 

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Mr. WAXMAN. I want to start off the questioning by yielding to 

Mr. Markey. 

Mr. MARKEY. Thank you, Mr. Chairman, very much. This is a 

question to the CEOs. You’ve heard the concern that adopting the 

kind of proposals that you’re putting before us today could harm 

your companies. I’m going to ask each one of the CEOs, do you 

agree with that suggestion or do you disagree? Mr. Mulva, I just 

need a yes or no because I have several questions. 

Mr. Mulva. 

Mr. MULVA. No, I don’t believe what we are proposing will harm 

our company and its long-term prospects for opportunities in investment. 

Mr. MARKEY. Thank you. Mr. Nolen. 

Mr. NOLEN. I also don’t believe it will hurt our company and will 

make it better in the long term. 

Mr. MARKEY. Mr. Rowe. 

Mr. ROWE. No, sir. 

Mr. MARKEY. Mr. Crane. 

Mr. CRANE. No. 

Mr. MARKEY. Mr. Chiaro. 

Mr. CHIARO. No, sir. 

Mr. MARKEY. Mr. Rogers. 

Mr. ROGERS. No, with respect to our company as well—— 

Mr. MARKEY. I am coming back to you with another question. 

Thank you. Mr. Darbee. 

Mr. DARBEE. No, sir. 

Mr. MARKEY. Mr. Sterba—Mr. Tercek. I’m sorry. 

Mr. TERCEK. I’m with the Nature Conservancy. 

Mr. MARKEY. Mr. Sterba. 

Mr. STERBA. No, I don’t. It’s inappropriate. 

Mr. MARKEY. Let me go to you now, Mr. Rogers. You say that 

the current economic downturn actually provides Congress with its 

best opportunity to pass meaningful and sustainable climate legislation. Can you briefly expand on that? 

Mr. ROGERS. Sure. Because as I study many of the proposals for 

the economic stimulus and I look at sort of the green stimulus 

that’s embedded in that, if that is passed and we have climate legislation pass this year where the economic impact won’t be immediate because of the way the plan works, I think the combination 

of the two together provides the kind of roadmap that will allow 

companies like ours to start making the decision. 

And let me also be very blunt about this. I don’t think it’s going 

to be cheap or easy to achieve the objectives in the blueprint. And 

the sooner we get started, the better. And quite frankly, I believe 

having a debate about this in the middle of the recession is the 

right time to do debate it because economic considerations will be 

carefully taken into account. 

Mr. MARKEY. Thank you Mr. Rogers. Mr. Chiaro, you represent 

the second largest coal producer in the United States. And yet in 

your testimony, you say that legislation could encourage innovation, enhance America’s energy security, foster economic growth 

and improve our balance of trade. Could you briefly expand on 

that? 

111 

Mr. CHIARO. Coal has some fundamental characteristics that I 

believe make it a viable and in fact essential fuel for the future. 

Like every other fuel source, it has environmental aspects that 

must be controlled. We have done a good job controlling particulate 

emissions from coal, sulfur dioxide emissions from coal, other aspects of coal mining and so on. And this is just simply the step in 

that procession of technology development to produce technology 

carbon capture and storage that can address the C02 emissions 

from coal-fired generation. 

Mr. MARKEY. Thank you Mr. Chiaro. 

Mr. Crane, you say in your testimony that addressing the climate 

legislation is the paramount challenge facing our generation and 

that it is a moral imperative that we act without any further delay. 

Please expand. 

Mr. CRANE. Well, I think just from our perspective, our role as 

business leaders is to target our companies as to the social and economic dynamics in which we live. And this is the most compelling 

one. As a major carbon emitter and someone who stands ready 

with capital to invest in green technologies, what we really need 

is to work hand in hand with yourselves to provide clarity so we 

know where to invest. 

Mr. MARKEY. Thank you. 

Mr. Immelt, you testified that your wind turbine business has 

grown from $300 million to $6 billion in just 6 years. And you also 

state that GE’s clean-tech ecomagination business is growing at 20 

percent a year and will soon reach $25 billion and create tens of 

thousands of jobs. So you see this as a great economic opportunity 

for GE, huh? 

Mr. IMMELT. Sir, I believe not just in the United States, but globally, the interest in clean technology is high. We see demand for 

these products on a global basis, and most importantly we are a 

net exporter of all these products out of the United States. So I 

think that investing in clean technology and innovation, clean technology is a great business proposition for many companies in this 

country. 

Mr. MARKEY. Thank you. 

Ms. Beinecke, you say that the cost of inaction is very high for 

our economy and our country. Could you please expand? 

Ms. BEINECKE. Well, the evidence, the scientific evidence of what 

the consequences of global warming are, are just mounting very, 

very rapidly as I indicated. And so there will be not only severe ecological consequences, but severe humanitarian consequences as a 

result of that. And so every day that we delay in enacting climate 

legislation and getting on the path reducing our carbon emissions, 

puts not only all of our ecological systems at risk but puts literally 

hundreds of millions of people around the world at risk for not 

being able to have secure futures. 

Mr. MARKEY. Chairman Waxman and I are committed to acting 

to deal with this urgent problem and to do so in a fashion that represents the urgency of the problem. 

Thank you all for being here today. 

Mr. WAXMAN. Thank you, Mr. Markey. Mr. Blunt. 

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Mr. BLUNT. Thank you, Mr. Chairman. If—as we put this or 

other things into legislation, we will of course have to come up always with cost estimates, with economic impact estimates. 

Ms. Claussen, are there those estimates in the report? 

Ms. CLAUSSEN. No, we do not have them in the blueprint. We 

have done some economic modeling and we have looked carefully 

at the economic modeling that’s been done over the last year over 

pieces of legislation like the Lieberman-Warner bill. 

It is our conclusion that you cannot derive point estimates that 

are meaningful here, but you can get a lot of insights. And we took 

those insights into account when we developed the blueprint. For 

example—— 

Mr. BLUNT. Let me ask a couple of questions about that. They 

are not here yet, we will need to look for them. Lieberman-Warner 

was the plan that was discussed last year and the estimates from 

the Energy Information Administration, from EPA, from the National Association of Manufacturers, they all had estimates that 

showed significant gross domestic product reductions by 2030. I 

know in my State alone, in Missouri, the estimate of one of those 

reports was that we would lose—have a net loss of 57,000 to 76,000 

jobs, obviously not a loss that we would want to have at any time 

and particularly not at this time. 

I’m wondering, Mr. Darbee, as you looked at this topic, how 

much of that is offset by new jobs, and what’s in this report that 

doesn’t create 140 percent increase in gas prices by 2050, for instance, that Warner-Lieberman was purported to increase. Mr. 

Darbee? 

Mr. DARBEE. Well, Congressman, let me say that there were a 

lot of concerns when we started on the energy efficiency route 30 

years ago in California, along the same lines. And people felt that 

really working hard on energy efficiency as well as choosing the 

route on renewables that we did would hurt the economy. And yet 

the California economy has grown better than average in the 

United States over that 30-year period. So as we look at it, there 

are tremendous opportunities with respect to investments in energy efficiency, in investments in renewable technology. You’ve 

heard from the CEO of GE about the opportunities there. So I 

think there will be many puts and takes. Some estimates have indicated that the cost would be below 1 percent of GNP. Those costs 

are not insubstantial. But when one thinks about the consequences 

of inaction, just for example in water in the West or hurricane 

damage in the East, they more than swamp the costs associated 

with dealing with climate change. And what we’ve learned from 

business is the sooner you start working on a major problem, the 

more degrees of freedom you have in solving that, and the solutions 

are cheaper. So the cost will not be inconsequential, but they will 

be less than the cost of inaction. 

Mr. BLUNT. Where are we? I’m interested in the argument that 

Mr. Rogers I thought made effectively, that the sooner you start, 

the more you average out the ultimate cost that these things may 

have to have. Is that in the report somewhere? The averaging out, 

the goals, have we—has goals been designed in a way that we are 

really thinking about the incremental cost and the impact that 

has? 

113 

I’ll let you, Mr. Darbee, answer that too, if you want. 

Mr. DARBEE. I don’t believe that we have that in the report, although if my colleagues can identify something that I’ve missed, I 

don’t think it is there. Supporting that, we have done, as Ms. 

Claussen indicated, a fair amount of economic analysis, as have 

others like McKenzie, that suggest that the costs are manageable 

and less than the costs of inaction. 

Mr. BLUNT. Yes. I think Ms. Claussen used the—we talked some 

in the hearing already in your testimony about the 2020 figure. I 

guess I will just go down the line, the same line that my friend Mr. 

Markey went down. And my question would be: Are you confident 

that this doesn’t have negative economic impact on your companies 

in terms of job loss or other costs in the first decade? 

And, Mr. Mulva, I think you got to lead off last. It is really just 

a yes or no question, is the first decade as opposed to between now 

and 2050. 

Mr. MULVA. Addressing climate change will increase our cost 

structure providing energy. 

Mr. NOLEN. No, it will not, as a provider of the technology. 

Mr. BLUNT. Mr. Rowe? 

Mr. ROWE. It will not have negative effects on my company, but 

if we aren’t very careful to use the market mechanisms of cap and 

trade to limit the costs of what we do, it would have negative effects on our customers. That’s why we think that cap and trade is 

so important. 

Mr. BLUNT. Mr. Crane. 

Mr. CRANE. In the near term, taken in its totality, would not impact us in the near term. In the long term it would hurt us if we 

don’t adapt our technology, change the way we make electricity, 

which is part of the plan. 

Mr. CHIARO. On balance we believe the opportunities will outweigh the risks and costs. 

Mr. BLUNT. In the first 10 years? 

Mr. CHIARO. In the first 10 years. 

Mr. BLUNT. Mr. Immelt. 

Mr. IMMELT. Congressman, I would agree with my colleagues. 

Mr. BLUNT. Mr. Rogers. 

Mr. ROGERS. In the first 10 years, if the allocation method is 

done appropriately, it will minimize the cost impact, but there will 

be cost impact on our consumers. We are the third-largest consumer of coal in the country, over 70 percent of our electricity coming from coal. And for the 25 States with more than 50 percent of 

their electricity from coal, it will also—if the allocation of allowances is not designed right, could result in significant increases in 

prices in each of those States. 

Mr. BLUNT. And just very quickly, I’m over my time, Mr. Darbee 

and Mr. Tercek. 

Mr. DARBEE. The answer is no. 

Mr. TERCEK. Like Mr. Rogers, there will be cost increases that 

our customers will bear. But if it’s not appropriately as we’ve laid 

out, we can minimize what those cost increases are. 

Mr. BLUNT. Thank you. And thank you, Mr. Chairman. 

Mr. WAXMAN. Thank you, Mr. Blunt. 

114 

The Chair would like to now recognize the Chairman Emeritus 

of the committee, Mr. Dingell, for his questions. 

Mr. DINGELL. I thank you for your courtesy. This question to 

Dow and Dupont, I believe Mr. Green and Mr. Sterba are present 

here. 

I have a great concern about designing the climate change program so as not to put our own American industries at a competitive 

disadvantage and driving jobs overseas. I am particularly concerned about USCAP’s views on one issue and that is chemical 

companies such as Dow and Dupont. And that is about the possibility of massive fuel switching occurring from coal to natural gas. 

I have fears that this could create significant increases in the cost 

of natural gas, which is used both as a process and as a feedstock. 

Could Mr. Green or Mr. Sterba comment on that and tell me 

whether this issue was discussed at USCAP? Gentlemen, don’t be 

shy, the clock is running. 

Ms. CLAUSSEN. They are not here. 

Mr. DINGELL. Oh, they are not here. 

Ms. CLAUSSEN. They are not present. 

Mr. DINGELL. Could anyone, then, answer that? 

Ms. CLAUSSEN. Maybe I can reassure you that we spent a great 

deal of time with our concerns about trying to avoid the dash for 

gas which would put Dupont and Dow at a disadvantage. That is 

why we have the cost containment mechanisms that we’ve put in 

here. And that is why we think it is important when you consider 

allocation that you do so to companies that could be adversely affected. 

Mr. DINGELL. Would anyone else like to make a comment? 

Mr. TERCEK. I would add, Mr. Dingell, the dash to gas is something, as has been said, is something we are very, very focused on. 

And we must try to avoid near-term price spikes in cost of carbon 

and that’s why the—all of the mitigating mechanisms, from allocations to the Carbon Board administering a reserve fund, to the use 

of offsets, are a critical component of this. Otherwise we would run 

the risk of moving on to natural gas to the detriment not just of 

our chemical companies, but all consumers who use natural gas to 

heat their homes. 

Mr. DINGELL. All right. Ladies and gentlemen, last year you will 

recall that Mr. Boucher and I released a discussion draft, which 

was our suggestions as to what the committee should consider as 

we proceed about this business. 

I would like to have each of you give me some comments, or 

those of you who seem—who would prefer to do so, to tell us about 

the blueprint release today and how it meshes with that draft or 

how it would work, because I believe that this is going to be a very 

important tool for this committee to use to begin to arrive at a consensus. Who would like to respond? 

Ms. BEINECKE. Thank you very much for the question. In our 

analysis, there are many elements of the discussion draft that you 

and Chairman Boucher prepared that is very consistent with what 

is in the blueprint. And I think we could answer specifically and 

do an analysis for you going forward. But a lot of the issues, the 

targets, the cost containment mechanisms, the various incentives 

to drive technology, I think are quite compatible in both, I think 

115 

provide a blueprint for the committee to begin their deliberations 

this year on how to enact climate legislation quickly. 

Mr. DINGELL. Would each of you who is disposed give us some 

comments on the question just asked? In other words, do this 

please for the record. And I ask, Mr. Chairman, that the record remain open so that we may have those responses included into the 

record on this matter. 

Mr. WAXMAN. Without objection, that will be the order. 

Mr. DINGELL. Mr. Chairman, I thank you. Ladies and gentlemen, 

thank you. 

Mr. WAXMAN. Thank you, Mr. Dingell. Mr. Upton. 

Mr. UPTON. Thank you, Mr. Chairman. 

I think many of you know that our electricity demands in this 

country are expected to grow by about 50 percent by the year 2030. 

Your plan as you submitted this morning will reduce—will have a 

reduction in emissions by 40 percent by that same year and 80 percent by the year 2050. I wonder if any of you know when the last 

time our country—at what year did our country actually achieve 

the emissions that are mandated in this legislation or proposed by 

2050? In other words, an 80 percent reduction. Any of you know? 

Mr. Krupp. 

Mr. KRUPP. Well, I would have to—— 

Mr. UPTON. I’m told it is about 100 years ago; that our emissions 

by 2050 in essence would equal what was in the early 1900s. 

Mr. KRUPP. Excellent question, Mr. Upton. The historical experiences that we have in regulating emissions really most clearly is 

illustrated by the 1990 Clean Air Act, which called for a 50 percent 

reduction not in 22 years as we are calling for here, but a 50 percent reduction in only 10 years. That was achieved ahead of schedule for sulfur dioxide. And in fact under the current administration, the Bush administration, the President has ordered an additional 70 percent cut in less than another decade. So combined, the 

two cuts in sulfur emissions that have been ordered are greater 

than 80 percent, in a much shorter time frame, and have been 

achieved at a fraction of the cost predicted by the opponents. 

Mr. UPTON. Well, this, of course, will be carbon emission reductions. 

Mr. KRUPP. That’s absolutely true. I think that the sulfur is very 

instructive experience. With carbon, the opportunities for reducing, 

especially when you consider offsets, are much broader than with 

sulfur. With sulfur you really needed end-of-the-pipe technology. 

With carbon, energy efficiency reducing the input from—by using 

offsets from farmers who can contribute to reductions opens up a 

wider array of possibilities. So I think there’s more reason to be optimistic here. 

Mr. UPTON. OK. Mr. Rogers, you indicated that unless we perfected the CCS process by—certainly by the year 2015, that it 

would be very difficult to achieve the proposed reductions by 2020 

as well as 2030 and 2050. You know that Mr. Boucher and I introduced legislation in the last Congress that proposed a path to get 

that. We appreciated the industry support for sure. But that legislation languished, it did not move out of this committee. The Chairman has indicated he would like to pass this, the overall legislation, in the next 4 months. You have indicated that it would be at 

116 

least 5 years before we’d see whether this is perfected or not. Can 

you achieve these reductions without CCS? 

Mr. ROGERS. It would be my judgment that—one, I was very supportive of that legislation. 

Mr. UPTON. I know that. 

Mr. ROGERS. I think it is critical. It would be my judgment that 

without that legislation, our comparable effort, that we would be in 

a place where we can achieve the targets. But I would say one 

other thing that I think is very important for this committee to appreciate. These targets can be met only if we have aggressive energy efficiency. These targets can only be met if we have renewables and renewables that we can actually get to market, which 

means eminent domain. Because renewables, without eminent domain, will not get to market given the ability to build and to build 

transmission. 

Thirdly, in every study, and I would refer you to the EPRI study, 

a key component to being able to achieve these levels and to supply 

electricity to our economy has required significant buildout of nuclear units going forward. And if you take any of these off the 

table, take coal off the table or if you take nuclear off the table, 

our ability to hit these targets, just not a mission that can be 

achieved. 

Mr. UPTON. Mr. Darbee, would you agree with that? 

Mr. DARBEE. I agree that we need all of the different technologies 

that have been identified. The one thing I would say is that with 

a cost put on carbon, there are all sorts of new technologies that 

we haven’t identified yet that may be available in 2020, and that 

they may substitute to the extent that we have—— 

Mr. UPTON. I want to get my last question in. I appreciate it. 

Mr. Krupp and Ms. Beinecke, did you support—did you all take 

a stand on the CCS legislation in the last Congress? 

Mr. KRUPP. We did not. 

Ms. BEINECKE. Yes, we did and we supported that legislation. 

Mr. UPTON. You did support it. 

Ms. BEINECKE. And the CCS provisions, because we think getting 

CCS going rapidly is absolutely critical to solving the problem. 

Mr. UPTON. My time has expired. Thank you, Mr. Chairman. 

Mr. WAXMAN. Thank you, Mr. Upton. 

Now recognizing members on the rules in the order in which 

they appeared at the committee today, Ms. Capps you would be 

next. 

Mrs. CAPPS. Thank you, Mr. Chairman. Part of the reason we’re 

here today is that year after year our understanding of climate 

change science has grown: computer models that predicted increase 

in temperature, changes in ocean heat content, and decreases in 

Arctic sea ice, then strongly supported by subsequent observation. 

As this committee takes up legislation to address climate change, 

we need to stay apprised of the latest climate science. We also need 

to think through the economic effects of our actions. If history is 

a guide, there will be some who will argue that it is simply too expensive to take action. Each time Congress has considered adopting 

environmental protections in the past, we’ve heard the same story. 

Now, Mr. Krupp, I would like to build on the interaction you just 

had with my colleague, Mr. Upton. And you and I have had a workVerDate Nov 24 2008 15:26 May 20, 2011 Jkt 037690 PO 00000 Frm 00122 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 111\111TH RESEARCH\111-1 CHRIS
117 

ing relationship in my congressional district on the central coast. 

In a little fishing village called Morrow Bay, you helped us demonstrate that we could save that village by protect—and that protecting the environment could actually ensure business growth for 

those fisherman. 

I know that the Environmental Defense Fund employs Ph.D. 

Economists, and I would like to ask you about the predictive powers of this discipline. Could you talk about the history of cost predictions for previous environmental legislation? In particular, I 

would like to hear some background on the accuracy of predictions 

about the 1990 acid rain program, part of the Clean Air Act’s cap 

and trade system. 

Mr. KRUPP. Thank you. It is an excellent question and it turns 

out that it is very hard for the economic models to predict the impact of a dynamic incentive to come up with new technologies. And 

these economic models historically have always underestimated the 

innovation factor. 

Specifically, you ask about the Clean Air Act of 1990. Costs for 

removing a ton of sulfur dioxide were estimated anywhere between 

$800 a ton and over $2,000 a ton. In the first phase of the program, 

costs turned out to be—which is what the estimates were for—less 

than $100 a ton. So the estimates were wrong by up to a factor of 

10-fold. And the reason is that the cap and trade creates buyers for 

the lowest-cost tech technology. It creates a hunt, it creates incentives to innovate. And that basically grinds down the cost. 

And that would be my comment. Historically, economists have always overestimated the cost, without exception. 

Mrs. CAPPS. Well, given our apparent difficulties in predicting 

how the economy would change, it is still a very vitally important 

topic. Do you have any advice on how policymakers could best 

make use of economic predictions about climate and energy policy? 

Mr. KRUPP. Well, I think the models still are useful because they 

do tell us that the design of the program by your committee will 

be extremely important in terms of cost. They tell us that—I don’t 

think they can give us a number of what the costs will be, but they 

say there are some things that you can do that will make a big difference, and they show us relatively they will more or less expensive. 

For example, allowing the use of offsets will drive the cost down 

substantially. And all the models from MIT and Harvard do show 

that. And I do think those qualitative conclusions are correct. They 

show that the more trading you allow, the more flexibility between 

gases and between sectors that you allow, the more you will drive 

the cost down of the program. 

Mrs. CAPPS. Let me just ask—this, I believe, is an important 

topic—if any of the rest of you, particularly those of you who represent an industry, would have some advice along this line, for example—— 

Mr. ROWE. Congresswoman Capps, I basically agree with what 

Mr. Krupp said. I think we should extrapolate from sulfur—which 

is something you didn’t want to burn in the first place—to carbon, 

which is something you are burning by intent rather carefully. So 

I don’t think we can be confident of that level of difference between 

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our hopes and our fears. But I strongly agree with Mr. Krupp on 

the importance of the trading system. 

This is why other measures are not adequate. We know the new 

President will propose a stimulus package. We are all looking forward to it in hopes. We know this Congress will consider renewable 

portfolio standards anew. But you know, my company has tried 

very hard to analyze the different costs of low-carbon energy and 

put it in a common frame of dollars per ton of CO2. And we know 

that some energy efficiency is as good as free. We just don’t know 

how much, because nobody can do a good curve. Reducing carbon 

through natural gas consumption is somewhere on the order of $10 

a ton per CO2. We think nuclear is something like 40, and today’s 

wind something like 80. Whereas solar is still above 100, and probably around 3. But solar is evolving technologically. If you do this 

all with a relatively crude tool like RPS, you will tend to get the 

more expensive solutions. Whereas if you have the cap and trade 

system, as Mr. Krupp has said, in the long run you will get the 

lower-cost solutions. 

Mrs. CAPPS. Thank you very much, Mr. Chairman. 

Mr. WAXMAN. Thank you, Ms. Capps. Mr. Whitfield. 

Mr. WHITFIELD. Thank you, Mr. Chairman. I also would like to 

thank all of you for taking time from your busy schedules to be 

with us today as we explore options and issues related to this serious subject matter. 

I notice that Mr. Markey in his questions to you, Mr. Chiaro, announced that you operate the second-largest coal producer in the 

U.S. It was my understanding that you all recently announced your 

plans to divest that coal operation in the U.S. That would lead me 

to believe that since you are part of an organization that wants to 

put a cap on carbon and you’ve made a decision to sell the coalproducing part of your company, that you’re not optimistic about 

the possibility of operating a coal company in the U.S. Is that true 

or not? 

Mr. CHIARO. I thank you for the question. The impetus behind 

putting a number of our assets around the world for sale was really 

the acquisition of a company called Alcan, major aluminum producer. And the principal reason that we bought Alcan is because 

they have a large proportion of the power that is required to 

produce aluminum, is produced by hydro, a low-carbon emitting 

form of energy. So only in that sense was the decision to sell a 

range of assets, including some of our coal assets here in the U.S., 

related to climate change. When we looked at the assets that we 

would sell, and the criteria that we used to distinguish those that 

we would put up for sale versus those that we would keep, climate 

change was indeed on the list, but it was very far down the list. 

It wasn’t even in the top five criteria. 

The principal reason for deciding to sell some of our coal assets 

in the U.S., by the way not all of them, really was related to profitability. And I must say the Bureau of Land Management does a 

good job of extracting value for the taxpayers out of the coal deposits in the Powder River Basin, so I congratulate them. 

Mr. WHITFIELD. Do you all operate any coal facilities outside the 

U.S.? 

119 

Mr. CHIARO. Indeed we do. We are the largest coal producers in 

Australia and we have very active exploration programs underway 

to find more coal around the rest of the world. 

Mr. WHITFIELD. What about China? 

Mr. CHIARO. We do not have any activities underway in China 

right now. We don’t mine coal in China. In fact we sell very little 

coal—of our coal into China. China, as you’re aware, is the largest 

producer of coal in the world right now. 

Mr. WHITFIELD. You know what, Mr. Immelt, when I go to the 

Rotary Club down in my district, the people oftentimes complain 

that on environmental issues that the U.S.—they’re advocates that 

we should lead the way. And your organization is saying that we 

should lead the way on the cap and trade, for example. And yet in 

China they are bringing on two new coal-powered—one new coalpowered plant every 2 weeks. In fact, I read that last year just 

electricity produced by coal in China exceeded all electricity produced by every measure in Great Britain last year. Just the new. 

And I know that your company is certainly selling a lot of equipment to build some of those new coal-powered plants in China. 

What about this criticism that we take a lead on this, that China 

is not following us at all, and the detrimental impact it will have 

on our economy, the detrimental impact it will have on—because 

our electricity costs will be higher—what about that argument? 

Mr. IMMELT. Congressman, we spent a lot of time just trying to 

frame the globalization debate. You’ll see an an entire section as 

part of the blueprint where we talk about the ability to drive competitiveness so that our industries aren’t—aren’t disadvantaged 

versus China and India. And clearly if you think about Dow, Dupont, GE, Alcoa, the people that are up here, we need to run—you 

know, kind of globally competitive footprint. And so we think about 

that. 

The other counter I would make, sir, is that, you know, we are 

a net exporter of clean products, you know. And so I really believe 

that there is an export opportunity here if we lead and innovate 

in the area of high-efficiency engines, in the area of super-light materials and some of the entrepreneurial structure that exists. 

Mr. WHITFIELD. Did you all actually sell $600 billion worth of 

windpower equipment last year? 

Mr. IMMELT. Not $600 billion, no. I wish. 

Mr. WHITFIELD. Well, Mr. Markey said that they went from $300 

million—— 

Mr. IMMELT. About $6 billion last year. 

Mr. WHITFIELD. How much? 

Mr. IMMELT. About $6 billion. 

Mr. WHITFIELD. Oh, OK. One final comment I would just make, 

I was reading this article in the New York Times basically a few 

moments ago, that said that in Europe, which created the world’s 

largest greenhouse gas market 31⁄2 years ago, early evidence suggested the whole approach could fail because emissions are going 

up. GAO came out in December 2008 on a study of European 

Union’s emission and trading system. And they basically had said 

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120 

nology, growth in the economy or any of the things that you all are 

saying will—can flow from a cap and trade system. 

I say that simply as we move forward—obviously we’re going to 

get into this—all of us I think have the right goals in mind. We 

want to be fair-minded and don’t want to put the U.S. at a disadvantage economically. So I look forward to working with all of 

you and the other committee members as we move forward. 

Mr. MARKEY [presiding]. The gentleman’s time has expired. The 

Chair recognizes the gentlelady from California, Ms. Harman. 

Ms. HARMAN. Thank you, Mr. Chairman. Not only is it huge, but 

it reflects the gamut of interest in this issue from fossil fuel producers to environmental advocates. And I suggest, as I did in opening remarks about an hour ago before the panel was physically in 

front of us, that this is the model to solve these problems. My guess 

is that some of you voted for the incoming administration, some of 

you didn’t. But that doesn’t matter, what all of you are doing is trying to help both I think the administration and this diverse committee solve a tough problem. And I don’t think it should matter 

on this committee whether we supported the next administration 

or we didn’t. I personally did. But I also think that having all of 

you buy into a solution is the way that solution will work. And I’m 

looking at nodding heads so I’m very happy to see that. 

I talked earlier about what I called the public-private model and 

how we used it to solve one little tiny energy efficiency issue, and 

that is light bulbs. Mr. Immelt, you were part of our conspiracy 

and so was the NRDC, and it was hard to figure out a program 

that would really get us to much more efficient light bulbs by 2020. 

But guess what? We did. And we got almost unanimous support in 

this committee and in the Congress for what we came up with. So 

I just put it out that this, what I call the public-private model, is 

the best to solve these problems. 

Now, all of the solutions will depend on something we really 

haven’t talked about this morning and that’s what I want to ask 

a question about and invite any of you to comment on, and that 

is a smart grid. If we don’t have a smart grid, certainly the efficiency pieces of this solution won’t work. 

I just learned that in our new stimulus package there will be 

about $10 billion for investments in smart-grid development. But 

I would like to invite you to talk about, any of you—maybe, Mr. 

Immelt, we should start with you—the smart grid and why it is a 

critical piece of the solution. 

Mr. IMMELT. Congresswoman, I believe that—I would talk about 

both a grid that is smarter and bigger. Maybe start with bigger 

first. It was mentioned earlier that if we’re going to increase the 

penetration of renewables in the country we’re going to need a bigger pipe to push the renewables through from a storage and efficiency standpoint. So there needs to be some accommodation there. 

And as far as a smart grid—and my colleagues that run utilities 

here are probably even more expert than we are—there is such a 

huge advantage in efficiency and empowerment to consumers. And 

we view this as both a conservation advantage and also a tremendous advantage to reduce global warming. So I think the technology actually exists today. It is just how it gets deployed through 

the utility structure, you know, what consumer incentives. But the 

121 

technology exists really to empower consumers to make substantial—and industrial customers to make substantial decreases in 

their use of energy. 

Ms. HARMAN. Thank you. Before recognizing anyone else, let me 

just ask if anyone disagrees that the smart grid is a critical part 

of the solution? OK, who else would like to comment? 

Mr. DARBEE. If I can comment. My colleague to my right from 

Duke Energy was struggling to get the microphone, but in answer 

to your question—— 

Ms. HARMAN. I’m sure we can accommodate him too. 

Mr. DARBEE. We are in the midst of PG&E deploying 10 million 

smart meters, and this is the enabling strategy for tremendous energy efficiency, demand management, and frankly one of the things 

that will solve this country’s energy security issues the best. It enables the electric car that is coming down the road that we will see 

between 2010 and 2020. So it is critically important, we are moving 

on it. 

It also provides the opportunity for smart appliances within the 

home. What we envision is people pulling up their computer on 

their home page, understanding how much power they are currently using, and noting if there are any deviations—if power is 

being used at an unusually high level in the cellar, in the bedrooms, in the attic, wherever—so they can call home and say, 

something’s wrong here and we’ve got a problem, we ought to turn 

off the tower. 

Ms. HARMAN. We only have time for one more comment but I 

would invite—Mr. Chairman, may I request that others can submit 

their answers for the record? 

Mr. MARKEY. No objection, they would be welcome. 

Ms. HARMAN. Before we call on our friend from Duke Energy, I 

would just observe too that a smart grid needs to be resilient to 

withstand a cyber attack or other hacking. Let’s just hear one more 

comment. 

Mr. ROGERS. We support smart grid. In fact in our 5-year capital 

plan, we are going to spend $1.5 billion making our grid smart. But 

smart grid means different things to different people. What it 

means to us is it means taking our analog and making it digital. 

At the end of the day, that will reduce line losses and will save energy. 

The second thing it means to us, it means putting smart meters 

in. Smart meters will really allow us—and we’re deploying them 

today to have a more sophisticated energy efficiency approach, as 

Peter Darbee was talking about. 

Many people think of the smart grid as simply transmission 

lines, but the reality of that is, that is really not technically the 

smart grid, it is more in the distribution part of the system. 

Ms. HARMAN. Thank you, Mr. Chairman. 

Mr. MARKEY. The gentlelady’s time has expired. 

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

Mr. WALDEN. Thank you, Mr. Chairman. I want to touch on a 

couple points. I represent a very rural district. We have 10 or 11 

national forests within that district and I have been real active on 

forest management policy. 

122 

Catastrophic wildfires account for vast amounts of greenhouse 

gas emissions every year. With a hotter and drier climate projected 

for the west and for the northern end of our country, this situation 

will only be exacerbated. Depending on the fire severity and forest 

type, up to 100 tons of carbon per acre can be released. And in 

2007 alone, 10 million acres of forests burned. Now, by conservative estimates, that means that 60 million tons of carbon dioxide 

was spewed into the atmosphere, not to mention all the other 

greenhouse gasses and pollutants. That is roughly the equivalent 

of 12 million vehicle emissions for 1 year. 

According to the EPA, 562.3 million metric tons of carbon were 

unleashed upon the atmosphere by forest fires between 2000 and 

2005. Now there is a study out on national forests in eastern Washington that showed that those forests, left alone, will become net 

emitters of carbon rather than carbon sinks by the late century, 

due to emissions of catastrophic fire. The forest would likely burn 

at a rate of 1.7 percent per year, meaning the entire forest would 

burn in less than 100 years. Actively managed forests could lead 

to at least a 50 to 60 percent reduction at the current level of acreage burned, due to wildfire. 

So my question to you is—and we have an obligation as stewards 

of these great Federal forests to better manage them. And I would 

like to know if anybody objects to changing Federal law to be able 

to more actively manage these forests along the lines of what this 

Congress passed several years ago with the Healthy Forests Restoration Act. 

Does anybody object to moving forward over the condition class 

2 and 3 lands, to give the Forest Service the authority to do what 

they do around our communities? 

Mr. TERCEK. I’ll address that. 

Mr. WALDEN. Please 

Mr. TERCEK. I’ll address it from the Nature Conservancy. 

Mr. WALDEN. Yes, sir. 

Mr. TERCEK. Fire protection is not part of the scope of our blueprint, but the Nature Conservancy, certainly as a conservation organization, strongly supports those type of initiatives. 

Mr. WALDEN. I appreciate that. 

Mr. TERCEK. On the broad topic of forests, I would like to note 

that we do call for forest offset in this document, both domestically 

and international. Not only is it an important source of cost containment, but it is an important opportunity to protect our forests 

for a whole range of benefits. And we also note that the U.S. has 

an opportunity to be a real leader here. 

Mr. WALDEN. I’m going to have to cut you off, because I only 

have a couple of minutes. I’m sorry, but I appreciate that and I appreciate the work. And I’ve toured some of your sites out in my district where you have done a terrific job doing what needs to be 

done. 

Mr. Rowe. 

Mr. ROWE. Congressman, I would point out not only do we not 

object, but the offset provisions in the USCAP recommendations 

would create an incentive for folks like us to invest in better forest 

management. 

Mr. WALDEN. On Federal lands? 

123 

Mr. ROWE. Either way. That’s the way the offset provisions 

would work. 

Mr. WALDEN. All right. Then I want to move on to wind, because 

my district probably has as much wind as many others—not many 

other others in the country. And in fact the Bonneville grid will 

have up to 30 percent of its power from wind energy within the 

next 2 years, which I think is the highest percentage of any grid 

in the country. 

The point I raise is that in order to smooth that load, they are 

now being faced with having to put gas peaking plants in place. So 

you all recognize the fact that there are limitations to some of 

these alternatives, correct? 

Does anybody want to comment on that? Mr. Nolen. 

Mr. NOLEN. I mean, certainly there are a couple of issues with 

wind. First of all, you have to move the wind to where the people 

are. You mentioned that your district did not have the numbers of 

people so—— 

Mr. WALDEN. Transmission. 

Mr. NOLEN [continuing]. The grid comes in, a very important 

point with the grid. We need to do more in storage technologies of 

how do you store. But the facts are at the present time, wind is 

not a peak load source and so you need some sources behind it. 

Mr. WALDEN. To firm it up. 

Mr. NOLEN. To firm it up. 

Mr. WALDEN. Absolutely. And in the Northwest, of course, we use 

hydro. And one of the issues that we have in the Northwest is what 

sort of credit allocation would there be in a cap and trade system 

for a system that has traditionally relied on hydro? And who picks 

the date that decides the water flowing through a dam is renewable and producing energy is renewable and the water flowing 

through a more modern dam isn’t renewable or vice versa? How do 

you account for hydropower as a renewable energy source if it has 

been in place since Franklin Roosevelt was President? Do you include that as a renewable or not? And, if not, why? 

Mr. KRUPP. Well, the beauty of the cap and trade system, Congressman, is that hydropower would not require any permits, so 

there would be no cost imposed on it. So although we’re not proposing an RPS, so that definition is not directly relevant here, 

all—— 

Mr. WALDEN. But it would be under an RPS. 

Mr. KRUPP. It would be, but that’s not what we are here to propose. 

Mr. WALDEN. It all melds together. 

Mr. KRUPP. In the cap and trade system all hydro is advantaged. 

Mr. WALDEN. So it’s credited? 

Mr. KRUPP. It doesn’t need a—— 

Mr. WALDEN. New hydro is credited? 

Mr. KRUPP. Old and new hydro, all generating electricity has no 

carbon output. Yes. 

Mr. WALDEN. Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time expired. The Chair recognizes the gentlelady from the Virgin Islands, Ms. Christensen. 

Ms. CHRISTENSEN. Thank you, Mr. Chairman. And thank all of 

the panelists for being here and for the blueprint. I said in my 

124 

opening statement that given the diversity of the group, I really appreciate the fact that you are able to come up with a consensus 

document. 

I have a couple of, I think, brief questions. But one of the six key 

principals in the call for action is to be fair to all economic sectors, 

geographic regions and economic groups that may be disproportionately impacted. And some of the more disproportionately impacted 

communities in our country would be poor and minority or—and 

sometimes they are the same. So were there any special considerations—I haven’t had a chance to go through the entire report for 

low-income minority—disadvantaged populations? 

Mr. DARBEE. If I might address that, what is provided for is that 

in the case of local distribution companies, that the benefits of allocations be passed through to customers. And what we are proposing is that they be passed to the local distribution companies, 

and those companies are required to pass those on to the consumers. And in the case of regulated electric utilities what we are 

proposing is the local utility commissions would undertake that 

program. 

Specific to your question, in California the approach that we’ve 

taken is that we have a REACH program, and so those people who 

don’t have the economic resources to pay for their bills in full, we 

provide economic support for them. We also have a program on energy efficiency where, for low-income individuals, they can contact 

our company. We will send people out, do an energy audit, and 

then the utility will pay for the improvements to their home to 

make it more energy efficient. So that was the way that we were 

thinking about addressing the particular question you raise. 

Ms. CHRISTENSEN. OK, I will take one more answer, then move 

to my next question. 

Mr. TERCEK. We also have provisions for funding for what we call 

adaptations to climate change, inevitable climate change, including 

overseas, including island countries that we can—— 

Ms. CHRISTENSEN. Because that was my next question, because 

I obviously live in the Caribbean, and we are small economies, 

fragile economies, and I was wondering. So if you would just expand on maybe what you were going to say about the Caribbean. 

Mr. TERCEK. The Conservancy, our scientists advise us that 

there’s great opportunity to invest in natural ecosystems that provide very important adaptation benefits to vulnerable people. And 

in our blueprint we recommend that funding be made available 

from the sale of allowances to pay for these programs, both overseas and in the U.S. 

Ms. CHRISTENSEN. Thanks. At a retreat I attended last week, I 

came across a new concept that I also mentioned in my opening 

statement, which is cap and dividends as an alternative to cap and 

trade. And I wonder if anyone would like to comment on the differences—or the advantages of one over the other, cap and dividends? 

Ms. BEINECKE. Well, that’s a topic that’s gotten increased interest over the last year. And one of the things that we envision is 

first allocations and then move it into an auction system, and that 

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125 

ment, but the bulk of the resources over time would go back to the 

consumer, and that is the dividend concept. 

So I think that the question for the committee to consider in 

drafting legislation is sort of what the time frame is for returning 

that very significant resource to the consumer. 

Ms. CHRISTENSEN. So it doesn’t have to be an either/or, it can be 

a—— 

Ms. BEINECKE. We envision a system that actually moves from 

one to the other over time. I think that those proponents proposing 

the cap and dividend system do envision going totally in one direction, but USCAP’s blueprint actually envisions first an allocation 

and then moving to auction over time. 

Mr. ROGERS. Let me say a cap and dividend has the potential of 

creating huge subsidies where most of the money would come from 

States that are heavily dependent on coal, like Indiana, Ohio, 

Pennsylvania, Michigan. And that, for instance, you would take 

$100 out of a State like Ohio and only send $40 back, d the money 

would go someplace else. So there is some equity issues associated 

with a proposed cap and dividend approach. 

Ms. CHRISTENSEN. Thank you. I don’t have any further questions, 

Mr. Chairman. 

Mr. MARKEY. The gentlelady’s time has expired. 

The Chair recognizes the gentleman from Illinois, Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Chairman. I appreciate the panel 

being here. I wish I would have been here for a lot of the opening 

statements. I did find the benefit of the opening statement, though, 

Mr. Chairman, as I had to go do other business, had Steering Committee meetings. And since many of the members are leaving at 

12:30, it was my luck that I got back in time to get around to questions. If we don’t have opening statements, then we don’t have a 

chance to talk to you. 

One of the arguments I made yesterday is one of importance for 

you all. You are doing what you think is important for your association or your shareholders. And we have the burden of doing 

what is critically important to our constituents, and they are not 

minor. Each of us represent 660,000 voters. I was interested—one 

of the things I said in my opening statement was the interest in 

your first release, which had the trading floor as part of the debate 

on how a cap and trade through the trading floor could be helpful. 

I was very curious that in this new one, no trading floor, no picture. And I would ask for a reason. I would argue because in this 

cap and trade debate, which we like to liken to the Clean Air Act 

and the NOx and SOx, there are distinct differences. One is technology was available then, it’s still not available now. 

What is being proposed in the cap and trade under this venue 

is bringing in the huge money managers, the Goldman Sachs of the 

world into this debate, to incentivize. The other thing about cap 

and trade that we need to continue to talk about is the loss of 

value that has happened in the stock exchange in the past couple 

months. 

Now, I want to be clear, you all know—we have met, had dinner, 

a lot of friends—I am opposed. But if we want to be clear to my 

voters, we enact a carbon tax. They know exactly what the cost is 

going to be to them, the consumers that are going to have to pay 

126 

for this move. Any other process, I will argue unless you can convince me, is a shell game meant to hide the cost from the consumer. And I will—we’ll have a chance. 

It is interesting on the association, too, and I know Rio Tinto has 

some mining operations, but no one else. Where is the coal mine 

operators? 

And the other thing about the association is where is the members of organized labor? Where is the United Mine Workers? I’m 

a Republican, and they a lot of times don’t like me, just by definition, but I have a great relationship with the operating engineers. 

I have a great relationship with the boilermakers. I have a great 

relationship, again, with the operating engineers. I have an interesting relationship with the United Mine Workers. I have a good 

relationship with those who build the next generation of power 

plants today and tomorrow. Where are they to weigh in on what 

this is going to effect to the membership. Because I can tell you, 

as I did in my opening statement, I’m going to go to them, and I 

am going to want them to be on board. So when there is job loss, 

which I predict will happen. We can talk about green jobs, but the 

proportional ratio of building a coal-fired power plant and putting 

up windmills, which are being built in my district too, there is no 

comparable ratio about the jobs and operating a major nuclear 

power plant or a coal-fired plant as a window. We can talk green 

jobs all we want, real jobs or in real manufacturing. I’m going to 

hold—as I talk to my friends on the other side, I’m going to hold 

that issue. 

Mr. Rowe is a good friend. Illinois is a big power State: coal, marginal oil, now wind, nuclear power. Nuclear power has to be part 

of this debate. How can we move to nuclear power expansion, Mr. 

Rowe, if we did not move aggressively on the high-level nuclear 

waste in Yucca Mountain? 

Mr. ROWE. Congressman Shimkus, you are indeed a good friend, 

and as you know I respect you immensely, both when we agree and 

on those rare occasions when we disagree. One of the things we 

share is a commitment to the importance of transparency so the 

public knows what it’s getting. 

I have, as several members of this panel have in the past, supported the carbon tax to deal with this problem for the transparency reason, but it never seemed to catch on. Resources for the 

Future did a study and found most Americans want to deal with 

the carbon issues. Most Americans don’t like a carbon tax because 

they know it costs them money. They are pretty suspicious of a cap 

and trade system because they rightly think it will cost them 

money. But they think renewable portfolio standards will be free. 

As I indicated, while you were called away to something else, we 

have at Exelon tried to study the cost of all sorts of low-carbon solutions; energy efficiency, which is free for a while, but not forever; 

gas, which is low cost but an awful lot to bet on one thing; nuclear, 

that we think costs around $40 a ton; and various forms of renewables which tend to be much higher. I believe we need nuclear in 

this puzzle—— 

Ms. DEGETTE [presiding]. Mr. Rowe, if you could finish up 

please, the gentleman’s time has expired. 

Mr. ROWE. Sorry, I took too much of your time. 

127 

Mr. SHIMKUS. Yucca Mountain? 

Ms. DEGETTE. I’m sorry, the gentleman’s time has expired. 

Mr. SHIMKUS. So he can’t answer the question on Yucca Mountain? Just yes or no? 

Ms. DEGETTE. The gentleman would certainly—— 

Mr. SHIMKUS. That was the question. 

Ms. DEGETTE. The gentleman would certainly be happy—— 

Mr. SHIMKUS. Mr. Rowe, if I provided for your response a question in writing? 

Ms. DEGETTE. The gentleman from Ohio, Mr. Space. 

Mr. SPACE. I come from one of those so-called coal districts that 

Mr. Shimkus identified earlier in his opening. Apart from that, it 

is a district that has been suffering from higher-than-average unemployment rates in a State that suffers higher-than-average nationwide. Our poverty rate exceeds 20, sometimes 30 percent in 

some of my counties. The jobs that we do have aren’t paying 

enough to get many people out of poverty. Tens of thousands of 

people are working in poverty. 

Mr. Shimkus has posed a rhetorical question about labor. Where 

is labor? What about organized labor? I think that raises a larger 

question that I’d be curious, Mr. Rogers, if you could respond. What 

effect would this rather sweeping measure have on the creation of 

jobs? 

Mr. ROGERS. First, I appreciate this because, as you know, we 

serve Ohio also and we have many—we have over 11 million people 

that we serve, including many in Ohio. When I look at this legislation, this blueprint, several places where I see jobs that work in 

your part of the world. One is if we can successfully achieve carbon 

capture and sequestration, we can deploy it. That keeps coal in the 

mix in a low-carbon world and that means jobs. It also means jobs 

in terms of actually the building of coal gasification facilities in lieu 

of traditional coal plants. It means building jobs with respect to 

building the carbon capture sequestration going forward. I think 

it’s going to mean new nuclear plants, and there will be significant 

jobs that come from that. I believe in terms of energy efficiency 

there will be jobs. 

So as I look at this, I believe not just in the short term, but in 

the longer term, jobs will be created as we fundamentally transform our energy infrastructure. 

Mr. SPACE. And has thought been given—and I apologize for not 

having been able to read the entire report as of yet—but has 

thought been given to the educational and training process and national policies that could be implemented that would help develop 

a workforce in a comprehensive and practical fashion to fill these 

potential jobs of the future? 

Mr. ROGERS. We have not addressed that specific aspect of it. 

But I do believe, as we look at new technologies, whether they are 

clean tech, renewables, advanced technologies in nuclear, advanced 

coal technologies, advanced gas, I think in all these areas it is 

going to take a significant number of new engineers and technicians in order for this to happen. 

So I fundamentally believe this is going to happen. I, personally, 

believe it is going to happen anyway, because I look at our fleet, 

and by 2050 every power plant we have today will be retired. So 

128 

if I know what the rules are with respect to carbon, it allows us 

to make investments consistent with achieving a low carbon footprint but, at the same time, of retiring and replacing. And that 

process alone will create significant jobs over the future period. 

Mr. LASH. Jim, could I briefly correct you? 

Actually, the blueprint specifically addresses, Congressman, the 

issue you raised and the need for training. It is one of the goals 

we set out for the allocation system, to provide for the training of 

the workforce needed to facilitate these wide-scale transitions. 

Mr. SPACE. And are specific national policies suggested on how 

best to implement those goals? 

Mr. LASH. Not in detail, sir. 

Mr. SPACE. Thank you. 

Mr. STERBA. Mr. Space? 

Mr. SPACE. Yes, sir. 

Mr. STERBA. Two of you have asked the question regarding labor 

unions. And I would just like to mention that—and it was not on 

the House side, but a year, year and a half ago, I stood with Senator Bingaman, Chairman Bingaman, with the IBEW and, I believe, the AFL-CIO—I need to verify that that was the second 

union—that endorsed a bill that was put forward on the Senate 

side, which was a cap-and-trade bill by Senator Bingaman, Senator 

Murkowski, and a number of others. 

Mr. SPACE. Has organized labor been involved in any respect 

with regard to this USCAP finding? 

Mr. STERBA. No. 

Mr. SPACE. All right. Thank you. 

I yield back. 

Ms. DEGETTE. The Chair recognizes the gentleman from Georgia, 

Mr. Gingrey. 

Mr. GINGREY. Thank you, Madam Chairman. 

And thank all of you for being here and bringing us the blueprint. 

I want to read from the summary overview in your final—your 

commitment, the last paragraph. ‘‘We, the members of the U.S. Climate Action Partnership, pledge to work with the President, the 

Congress, and all other stakeholders to enact an environmentally 

effective, economically sustainable, and fair climate change program consistent with our principles at the earliest practical date.’’ 

And I heard either one of the witnesses or maybe a member of 

the committee say earlier that the goal was to have legislation to 

the President before the Memorial Day break. So that is coming up 

pretty darn soon. 

You know, we are obviously in a pretty tough economic environment. In this last year, what, 2.5 million jobs lost. Right now we 

are on the floor about to vote on a bill, the second tranche, the 

$350 billion of the rescue package, to try to do something about 

this economy, to get it back on track. 

And yet what I am hearing from you, from USCAP, is that you 

are recommending something whose cornerstone is cap and trade, 

a mandatory cap-and-trade regime, and that it needs to be done 

with all due haste. 

My question to you—and any of you can respond—is this: Are 

you willing to sacrifice more American jobs to achieve the goals of 

129 

your report? Are you, at this crucial time in our Nation’s history, 

willing to push forward with all due haste, maybe by Memorial 

Day weekend, with legislation calling for mandatory cap and trade 

as its cornerstone, and at the risk of losing additional jobs? 

Anyone? 

Mr. CRANE. Congressman, it is a great question. And I think it 

speaks to an important point, which is the timing question. 

If climate change legislation is passed that has to be implemented with a cap and trade in several years’ time, I believe, and 

certainly speaking on behalf of my company, the first thing it will 

do is it will unleash additional investment by us in various technologies designed to prepare for the cap-and-trade system that is 

coming. 

So, you know, this may be counterintuitive, but I think quite the 

contrary, in the near term it will actually unleash investment and 

create jobs. And we and many of the companies that sit here, we 

have very substantial capital. I think my company and Jeff’s are 

the two smallest at this panel. We sit with $1.5 billion in investment capital ready to invest, but we need to know in what direction. 

Mr. NOLEN. I would make one comment to say we have talked 

a lot this morning about cost. I think, as a group, and I know for 

myself that we are much better at driving costs down than we are 

with uncertainty. And this is what we have tried to do, is bring 

some certainty to our program so that we then can plan. My personal belief is that the uncertainty has caused a lot more of our 

stock prices and employment loss than the cost. 

Mr. GINGREY. Well, I want to make sure you understand my 

question before we get another response. It is really a value question, a value judgment. Even if you would respond and say, well, 

no, you believe we won’t lose more jobs, we will create jobs, but I 

want you to respond to me in regard to that value judgment of if, 

in fact, jobs will be lost. 

It is a question, I guess, of collateral damage. We ask those questions all the time of our military: Is it worth the sacrifice wherever 

we are engaged? And so that is my question now. 

And it is all about the timing and how important is it. Is this 

something that, in 2007, in January, was clearly appropriate to say 

‘‘with all due haste,’’ when everything looked kind of rosy out 

there? But right now, when things look pretty grim, is ‘‘with all 

due haste’’ really appropriate in regard to mandatory cap and 

trade, or is it something that might not be put too much on the 

back burner but could wait a couple years? 

Mr. ROWE. Congressman, in your job there are no no-risk votes. 

In my job there are no no-risk energy supply options. We both 

labor as best we can to make decisions or recommendations that 

try to minimize risk. 

In my judgment, the economic efficiency of a cap-and-trade system radically reduces the risk of dealing with climate change, 

which we must do. In my judgment, starting soon, with appropriate 

cost constraints, protects the economy better than putting off a solution and then perhaps doing something more drastic or more disingenuous. It is all a matter of trying, in our frail way, to handle 

risk as best we can. 

130 

Mr. WAXMAN [presiding]. Thank you, Mr. Gingrey. 

Mr. McNerney? 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

Sitting here with this panel in front of me is like a child in a 

candy store. So, unfortunately, I only have 5 minutes. 

I would like to start with Mr. Darbee. I have a long relationship 

with PG&E as a customer and as a business partner, and I have 

always found PG&E to be a good business partner to deal with. 

Now, my question for you is, you are embarking on a very aggressive program for efficiency and bringing in other technology to 

generate new power. Could you explain briefly how that benefits 

your bottom line? 

Mr. DARBEE. Well, with energy efficiency we have collaborated 

with the State of California. And what occurs there is that the cost 

of new energy efficiency to our customers is about 3 cents. 

What we have entered into is a framework in California of 

where, if demand for energy goes up, our revenues go down. It is 

called decoupling. So we are indifferent to the amount of power we 

sell. And if we create savings for our customers, what happens is 

that we share some of the savings, a small fraction of the savings. 

So on energy efficiency, which is one way that we meet increased 

power needs, we make money that way. 

If we build new power plants—and most of the power plants are 

built by others—if others build new power plants and we procure 

that power, we make zero money. It costs X, we pay X for it, we 

make no money. About a third of the new power plants that we 

build, if we build them we earn a return on the investment, the equity investment that we have in it. 

Is that responsive to your question? 

Mr. MCNERNEY. It is. Thank you. 

My next question will be for Mr. Immelt. GE is a leader in producing new energy technology, renewable energy technology. And 

I have to say, some of the work I did in the earlier life benefited 

the technology that you are using. 

Do you see this as a growing part of your bottom line? And will 

cap-and-trade legislation help that bottom line grow as a part of 

your business model? 

Mr. IMMELT. I think, Congressman, we are already maybe a $40 billion or $45 billion company just in energy. And we invest heavily 

in R&D as part of that. And so we have products that do coal, gas, 

wind, solar, nuclear. We are really almost agnostic, as to technology. We do it on a global basis. And so, even without a cap-andtrade program, we would have a prosperous energy business, because we are really technically agnostic. 

What I would say as a businessman and as an American businessman is that the energy sector has been chronically underinvested for a generation, in terms of new innovation in technology. 

If you just look at a pie chart of where the aggregate R&D dollars 

have gone in this country since World War II, it is hard to find energy on that segment. 

I like solving problems with technology. That is what GE does as 

a company. So anything that makes technology come to the fore is 

going to be good for GE over time. And what I believe is that a 

price for carbon will allow many of these technologies that have 

131 

been around for a generation—coal gasification has been around for 

a generation. Nuclear has been around for a generation. Elements 

of the smart grid have been around for a generation. We just 

haven’t commercialized them and taken down the cost curve to 

make them as competitive as they can be. 

You know, we all come at this with a different perspective. I view 

it at its core as a price for carbon is going to bring energy technology into the 21st century and give the United States a chance 

to lead. 

Mr. MCNERNEY. Thank you. 

Many of my colleagues on the other side of the aisle have decried 

the failure of the European cap-and-trade system. Now, when I 

hear Mr. Krupp and Ms. Claussen talk about offsets, I get nervous, 

because I am thinking about grandfathering, which, in my opinion, 

is largely responsible for whatever problems the European cap-andtrade system has had. 

So would you be clear about whether you are including 

grandfathering on offsets, Mr. Krupp? 

Mr. KRUPP. Well, first of all, I want to acknowledge the concerns 

of the members of the minority about the European ETS system. 

It got off to a rough start. Since then, they have corrected many 

of the earlier problems. 

The principal problem in Europe is that they didn’t have good inventory numbers for the baseline, which, in this country, thanks to 

legislation passed out of this committee in 1990 in part of the 

Clean Air Act amendments of 1990, we have long had excellent 

baseline information about the emissions of CO2 from power plants. 

I don’t think we will repeat that mistake. 

In Europe, one of the mistakes, I believe, is that they have not 

allowed agricultural offsets in the system. And we do recommend 

that EPA start a process that could lead to verified, scientifically 

valid offsets from the agricultural sector to be part of the system. 

Mr. WAXMAN. Thank you, Mr. McNerney. 

Ms. Sutton? 

Ms. SUTTON. Thank you, Mr. Chairman. 

Thank you all for being here. I appreciate that you are coming 

together to try and create a solution. 

In fact, Mr. Immelt, I noted in your testimony you said, on the 

final page near the end, ‘‘Our commitment as a group now is to 

work with Congress, both Houses, both parties, the new administration, and other stakeholders to enact this year, if possible, climate legislation consistent with the principles underlying the call 

for action and the blueprint, namely. That legislation must be fair, 

environmentally protective, and economically sustainable for our 

country.’’ 

And I would just add a couple of words as a Representative from 

Ohio, that after the word ‘‘country’’ we say, ‘‘including Ohio.’’ OK? 

So, from now on when you guys are looking at that statement I 

want in the back of your minds to be ‘‘including Ohio.’’ And I am 

sure that that is what is intended. 

As a new member to the committee, I do have a question; we 

have heard some discussion about who is at the table and who is 

not at the table. Could somebody just briefly explain to me how you 

all came to be and whether or not there is a place at the table for 

132 

organized labor, or are they welcome at the table? Could someone 

answer that for me? 

Mr. IMMELT. Well, I would say that, you know, we have been 

doing this for maybe 21⁄2 or 3 years, and the idea was to try to get 

a representative sample, you know, of different industry sectors 

and NGOs to come together. In that sense, probably most of us 

have reviewed a lot of the elements of this with our own unions, 

our own teams inside the company. There was never a desire to exclude anyone from the table. 

But I can tell you, with 31 people, it has been hard enough to 

get to this point, from a standpoint of how far we have gotten. And 

we look forward to further dialogue, under your leadership, to 

make sure everybody is represented. But there was always a sense 

that the more people we have in, the better. 

Ms. SUTTON. I appreciate that and also, as a Member of Congress, the ability to work in a large group. 

So a couple of you—manufacturing obviously is important to me 

and the considerations of manufacturing as we foster this solution 

that I believe can be attained. Several of you, Mr. Immelt and Mr. 

Nolen in particular, have talked about the timing of what we are 

doing—or I think, Mr. Nolen, you more specifically—and the need 

to pass this climate legislation quickly for several reasons: one, you 

said, to send the right signal to get the investment going. 

Do you also have concern about the delay resulting in what 

would be even steeper requirements to be achieved more quickly in 

the future? And tell me how that would impact your organizations. 

Mr. NOLEN. I think that Jeff put it correctly first, is that, just 

like his company, our company is in all of these spaces. We also 

have limited capital as to where we need to go and to make those 

investments. In order for me to meet Mr. Rogers’ time frame to do 

more with sequestration and other things, we need to put more 

capital into that, and we need to have more certainty on the return 

on our investment in those areas. 

We have choices as to where we put it. Do we put more in gas, 

do we put more in wind, do we put more in these areas? And these 

are all decisions that we must make. And that is why we need to 

speed it up, in order to make the end of the line really happen. Because it starts, really, with Jeff and ourselves and other large companies who put the capital in to build the innovation into these 

products. 

Mr. IMMELT. Certainty in the investment world is critical to success. And what we lack today is certainty in terms of what is going 

to happen and when it is going to happen. 

I would argue that, today, we have almost the worst of all 

worlds. We have 17 States that are developing their own programs. 

We have RPS in some areas, not in others. The fact is that the last 

40-plus coal plants haven’t been permitted. You know, so we have 

an energy policy, it is just that nobody knows what it is. And it 

shows up in terms of those consequences. 

So, look, I am not—I say this with great respect to my colleagues—I didn’t come to this as an environmentalist. I come to it 

as an industrialist. I am a capitalist, pure, plain and simple. And 

I just think the system we have today is untenable over the long 

term, insofar as, you know, the science is so compelling on global 

133 

warming. Something is going to happen. The more certainty you 

can give us, the better we can respond and be efficient on behalf 

of our shareholders. 

Ms. SUTTON. Mr. Rogers, did you have a comment? 

Mr. ROGERS. I see this from the perspective of 700,000 customers 

just in Ohio and the families and businesses behind them. And I 

am making decisions today about what to build and to get prepared. And the sooner we get started, I think the better off we will 

be, because Ohio is very dependent on coal. And if we can smooth 

out—and that was what was appealing about the compromise that 

was reached here. There was a recognition that we had to buffer 

during the transition period on the consumers of Ohio and all the 

consumers. 

So, in a sense, as a CEO of a regulated utility, I am here really 

standing in the shoes of my consumers, saying let’s do this in a 

way that minimizes cost increases and cost impacts, because there 

will be increased costs, and let’s smooth it out. If we delay this 3 

years or 5 years, it is only going to translate, I believe, in a steeper 

cost curve and a more draconian outcome for consumers. 

Mr. WAXMAN. Thank you, Ms. Sutton. 

Ms. DeGette? 

Ms. DEGETTE. Thank you, Mr. Chairman. 

Several of the witnesses today have mentioned the renewable 

portfolio standard. And I think it was Mr. Rowe who said that, as 

a tool for change, it is sort of a blunt instrument and that he would 

prefer to see a cap-and-trade system that might be more flexible. 

And I was kind of struck, too, by what Mr. Immelt just said, 

which is that we have this patchwork of energy policies right now, 

different renewable portfolio standards in many of the States, nothing in some States, different standards in other States. 

But I have always felt that giving people some kind of a goal for 

reduction is a good idea. The devil is always in the details, as to 

what would that standard look like. And, as many of you probably 

know, last year we were actually able to pass an RPS through the 

House, and it narrowly failed in the Senate. 

So I guess I would like to ask you whether you feel that a national renewable portfolio standard could be developed that would 

be part of the overall framework and that would be workable at 

helping to set goals. 

Mr. IMMELT. I would start, but then have my colleagues. I would 

say that that is an area where you will see different opinions on 

the panel. Some are in favor of it; some aren’t in favor of it. 

Ms. DEGETTE. Well, let’s hear from somebody who is not in favor 

of it. 

Mr. ROGERS. I would raise a question about it that hasn’t been 

resolved. For instance, we are in the wind business. We have over 

500 megawatts under operation, 5,000 under development in 

Texas, Oklahoma, and Colorado, because that is where the wind is. 

But we are not developing wind in North and South Carolina because there is no wind. We are not building it in southern Ohio or 

Kentucky or southern Indiana because there is no wind. 

If you look across the country and you put a wind map on the 

country and then you put a solar map on the country, what you 

134 

see, certain regions are very attractive for making investments in 

either wind or solar, but it is not uniform across the country. 

Ms. DEGETTE. Well, sure, and you are absolutely right about 

that. But, on the other hand, those other States—nobody is going 

to do RPS that says you have to get a certain amount of your energy from wind or a certain amount of your energy from solar. 

And, in truth, as someone who has worked on these issues for 

a long time, I will tell you, every region of the country has some 

kind of renewable energy. The trick is to set the standard at a level 

that would be a workable level for everybody. 

Mr. ROGERS. And I think you are absolutely right about that, in 

terms of getting the right renewable level. But what I find that has 

been the most difficult, I talk to people who want wind, because I 

am in that business, but the same people that support ITC and 

supporting wind are also the same people that oppose eminent domain so I can build a transmission line and get it to the customer. 

So, until there is some consensus, it is unrealistic to hope for wind 

without passing eminent domain legislation. 

Ms. DEGETTE. I understand. 

Let’s hear briefly from somebody who supports a national RPS 

standard. 

Mr. STERBA. Ms. DeGette, I happen to be one of those rare, 

maybe, utility folks who does support a national standard. And, 

frankly, the reason is I have seen in the West what happens when 

States create their own individual standards and they take the 

view that it is not renewable unless it is in my State. And that disadvantages renewables. 

Ms. DEGETTE. Right. Right. 

Mr. STERBA. Because it creates the least effective resources being 

built, as opposed to the most effective. 

So we need to develop this system. And I 100 percent agree with 

Jim that, along with this, we have to address the issue of transmission, transmission access and siting. And it just doesn’t make 

sense for natural gas pipelines to be built under one set of rules 

and electric transmission lines to be built under another set of 

rules, where we cannot get this infrastructure that is necessary. 

Ms. DEGETTE. I would just say that, in Colorado, we passed, as 

most of you know, we passed an RPS several years ago as part of 

a voter initiative because all of the utilities opposed it. And within 

about 1 year, we had exceeded that standard. The legislature 

adopted a new standard that was a much more stringent standard 

that they worked with the utility companies to agree to. 

So I hear what you are saying about some of the eminent domain 

issues, but I think we could arrive at something, a fairly low 

threshold, and then build from that. 

Mr. ROGERS. I don’t want to leave you with the wrong impression. While I might not support a national renewable portfolio 

standard, I have supported a renewable portfolio standard that was 

approved in North Carolina, as well as one that was approved in 

Ohio. 

So I have actually, within the States, approved it because the 

local law was written in a way to reflect what the opportunities 

were for renewables there, rather than trying to have a national 

standard where one size fits all. 

135 

Ms. DEGETTE. I think, though, you could take into account the 

regional differences. 

Thank you, Mr. Chairman. 

Mr. WAXMAN. Thank you, Ms. DeGette. 

The next would be Mr. Sarbanes. 

Mr. SARBANES. Thank you, Mr. Chairman. 

I wanted to go back to the consumer question for a minute, because that is the one that could create the kind of political blowback that would make all of this just an academic exercise. 

So I assume you built some models along with these projections. 

And I was curious, if you take the 2020 target, which was to get 

to 80 percent, to 86 percent of 2005 levels, if you went forward over 

this next period and up to that year without the kind of buffering 

that you have suggested needs to happen—and I confess I don’t 

quite understand how the buffering would work—but without it, 

you know, give me an average rate payer and tell me what the percentage increase would be in their bill if you didn’t have the accommodations in place. And then tell me what you think you could 

achieve if you did do the buffering that you mentioned. 

Mr. ROGERS. We did a lot of modeling in the Lieberman-Warner 

bill and all the various aspects of it, so I am going to kind of recall 

a lot of those studies. It won’t be precise, but it will give you a zip 

code. 

If you go—and it depends, really, on the State—if you are in a 

State like Ohio, where 86 percent is coal, versus a State like Indiana where it is 94 percent, versus a state like South Carolina 

which is 24, it produces different answers. And I think, in Maryland, I think it is pretty close to 50 percent of the electricity comes 

from coal in Maryland. But under scenarios like that, you are looking at 20 and 40 percent increases in the price of electricity without—without—any ability to mitigate cost. 

And that is why it became so critical in this blueprint that we 

had provisions in there that allowed for the mitigation of cost. Because, absent that, I agree with your observation that, if we could 

pass legislation and if it translates into 20 to 40 percent increases 

in the price of electricity, the backlash to that could be devastating 

to our ability to address climate change long-term. 

And that is why it is so critical and why this group came together around allowances and came together around the recognition that 40 percent of the allowances should go to the utility sector, where 40 percent of the emissions come from, and that a significant portion of those should be used to mitigate cost increases 

during the transition period. 

Mr. SARBANES. With the goal of getting them to what kind of 

level against the 20 to 40 that you—— 

Mr. ROGERS. We didn’t agree to the specifics of that. But we all 

recognized, by using the words ‘‘significant portion,’’ that we had to 

make sure it didn’t translate into a draconian increase in prices 

during this interim period. 

Ms. CLAUSSEN. If I could just add one thing to that, this blueprint stands as a whole. Everything is linked. Our ability to meet 

the kinds of targets that we put here, which are quite aggressive, 

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136 

nies. It is based on the cost containment measures that we have 

in here, including the use of verified real offsets. 

So we sort of view this as a way, as a whole, to protect the environment and have a sustainable economy and not increase prices 

hugely to consumers. 

Mr. IMMELT. Congressman, I would just add one other thing, is 

that, you know, the way to think about what we proposed, there 

is probably an 80 or 90 percent overlap with an energy policy and 

really taking control over technologies that are going to give us 

long-term control over energy costs. 

Our electricity bills did go up by 40 percent a year ago as the 

spike in oil and other natural resources took place. And I think, 

when we execute on this plan, we are going to have, over the long 

term, a set of technologies that I believe are going to allow us to 

have more control over time and more security over time about how 

to think about energy technologies and productivity. 

Mr. SARBANES. Did the projections of what the, sort of, 

unbuffered scenario would be accounted for what you hoped the 

new technologies will produce in terms of efficiency, or they did 

not? 

Mr. ROGERS. It did. We did take into account the availability of 

the technologies, how long it would take us to bring a nuclear unit 

on and shut down coal units so we would reduce our CO2 footprint, 

and what the cost implications would be. We looked at the prospect 

of bringing on carbon capture and sequestration with respect to existing facilities. We looked at energy efficiency and did scenarios on 

really aggressive energy efficiency and succeeding there. And we 

actually looked at different scenarios on renewables, in terms of the 

cost implications as well as the availability on a 24-7 basis and 

that implication. 

Mr. SARBANES. My time is up. I would just say, all the more reason to be as aggressive on the energy technology as you are trying 

to be. I am troubled that so much of that technology is being purchased overseas, because I think we have lagged far behind. 

Mr. WAXMAN. Thank you, Mr. Sarbanes. 

Before I recognize other members for questioning, I know that a 

number of you have to leave, and I want to express my appreciation. I know you were going to leave at 12:30, and you have extended your time to be with us. And this has been very helpful. I 

have listened to your responses to the questions, very important 

and legitimate questions from the members. And I think it has 

been very helpful in clarifying the matter. 

You do represent a remarkably diverse panel, a cross-section of 

American industry and environmental advocates. And your call to 

us is to adopt comprehensive, environmentally protective, economically sustainable, and fair legislation to address global climate 

change. And the economic crisis, as I have heard you all say, is not 

a reason to not move forward, but is a real reason why we should 

move forward at this time. 

So I thank you so much for being here, and I appreciate all the 

work you have done as a panel in developing the proposals you 

have sent to us. 

I am looking forward to working with Members of the Congress 

on our committee, both sides of the aisle, from various regions, 

137 

with the various stakeholders, with the new President, with Members of the House and the Senate in leadership positions on both 

sides of the aisle, as well, in seeing if we can accomplish this goal 

this year. It is a very aggressive timetable. 

So I am going to excuse those who have to leave, but I know we 

have others that will stay behind to answer further questions from 

the members of the committee. Thank you so much. 

In fact, it probably isn’t a bad idea—if any of the witnesses that 

are going to be testifying want to take a quick break, we can do 

that. 

No, no, we have a whole new group that is coming in from 

USCAP that are prepared to answer the questions. They are not 

the CEOs, but they are people who have been very involved in the 

issues. 

We are going to pick up questions where we left off, but I want 

to introduce a new set of witnesses. We have Elizabeth Thompson, 

the Legislative Director of the Environmental Defense Fund; Betsy 

Moler, Executive Vice President of Government and Environment 

Affairs for Exelon Corporation; Ann Renee Klee, Vice President for 

Corporate Environmental Programs for General Electric; Daniel 

Lashof, Ph.D., the Director of the NRDC Climate Center for NRDC; 

Steven B. Corneli, Senior Vice President, Market and Climate Policy for NRG Energy; Janet Peace, Vice President for Markets and 

Business Strategy for the Pew Center on Global Climate Change; 

Steve Kline, Vice President of Corporate Environmental and Federal Affairs for PG&E Corporation; and Robert L. Bendick, Jr., Director of U.S. Government Relations for The Nature Conservancy. 

We are delighted that you are all here to further answer questions from members of the committee. 

As I indicated, it is going to be the practice of our committee that 

all witnesses testify under oath. So before you sit down and get too 

comfortable, I would like to ask if you would stand and raise your 

right hand. 

[Witnesses sworn.] 

Mr. WAXMAN. The record will indicate that each of the witnesses 

answered in the affirmative. 

Mr. Rogers, you would be next in asking questions. Do you wish 

to be recognized? 

Mr. ROGERS OF MICHIGAN. No. 

Mr. WAXMAN. Ms. Schakowsky was next. She is not in the room 

at the moment. 

Mr. Welch, you are next. 

Mr. WELCH. Thank you, Mr. Chairman. 

I want to go back to a line of questioning that was asked by Mr. 

Markey. There are two things. One, this committee, with Chairman 

Waxman and Chairman Markey, are intent on having a significant 

climate change bill by Memorial Day. It is very ambitious. 

Second, Mr. Rowe, an earlier witness, pointed out the obvious, 

and that is: all of us have to make decisions that minimize risk. 

And there is a debate, and there will be an intense debate among 

members of this committee and in Congress as to what will be the 

economic consequences of the action that we take. 

138 

But the question I have for each of you—and I just want to go 

down—is this. And I would just like to get a yes or no answer, because this is really a threshold issue for us. 

Does doing nothing to address climate change—in other words, 

us getting unable to resolve the debate about the consequences of 

action—does doing nothing to address climate change, inaction, 

threaten our economy, in your view, yes or no? 

Mr. PERSHING. Jonathan Pershing with the World Resources Institute. Yes, it does. 

Mr. WELCH. OK. 

Mr. Kline? 

Mr. KLINE. It does, sir. 

Ms. MOLER. Yes, sir, it does. 

Mr. WELCH. OK. 

Mr. CORNELI. Yes, it does. 

Mr. LASHOF. Yes, it does. 

Ms. KLEE. Yes, sir. 

Ms. PEACE. Yes, sir. 

Ms. THOMPSON. Yes, absolutely. 

Mr. BENDICK. Yes, sir. 

Mr. WAXMAN. There are buttons on the base of the mikes, so be 

sure you press them. 

Mr. WELCH. Well, I want to thank everyone, because the threshold question is whether we have to act. And one of the debates we 

are going to have is whether the risk of acting is greater than the 

risk of not acting. And it is that elemental. 

And, as you have heard from listening to the questions of the 

members of the committee, there is a division of opinion, less about 

whether global warming is a threat, but a very lively debate about 

whether action will be worse than inaction. And I find it very 

heartening that leaders of the advocacy community and the industrial and energy community are united on urging Congress to be 

a partner in acting. 

Let me ask—is it Ms. Klee from General Electric? 

Ms. KLEE. Yes. 

Mr. WELCH. Mr. Immelt was here, and your company is a pretty 

good size, as I understand it. What are the consequences of inaction economically, as you see it, to General Electric and the work 

that you do? 

Ms. KLEE. I think you heard the CEOs identify some of the risks 

this morning. There is the lack of investment that will be made, 

because there is uncertainty as to where to put limited investment 

dollars. 

There is also the fundamental fact that there will be regulation. 

EPA will move forward, but it may not move forward in the most 

cost-effective way. So we may have a lost opportunity by not pursuing legislation. 

And there will be the additional cost that we believe will be incurred if we have to act more quickly later. 

Mr. WELCH. I see. 

Ms. KLEE. So those three things, I think, combine to make it a 

very costly decision one way or another. 

139 

Mr. WELCH. So I if understand what you are saying, it is not 

only important to act, it is important to act sooner rather than 

later. 

Ms. KLEE. That is our belief. And it is important to act smartly. 

Mr. WELCH. OK. Well, you are asking a lot for that. But I am 

glad you have—hope springs eternal. 

Mr. Kline, how about you? 

Mr. KLINE. I think one of the things that we see is that both in 

terms of protecting our customers from the kind of increases that 

the first panel talked about in terms of their electricity rates, we 

also see an incredible lost opportunity if we don’t act now. 

Mr. WELCH. That being? 

Mr. KLINE. That is that there are these amazing, developing new 

technology centers across the United States, and we see those jobs 

going overseas and that technology superiority going overseas. And 

so, in terms of our service territory, where Silicon Valley is putting 

a lot of time and energy into these technologies, we are going to 

lose that if we don’t act now. 

Mr. WELCH. OK. 

Ms. Moler, a lot of the critics who raise legitimate questions 

about cap and trade point to the experience in Europe that they 

cite as a failure. Your view on the European experience and how 

that should inform us about a cap-and-trade approach? 

Ms. MOLER. We do not have substantial operations in Europe or 

any significant ones at all. However, as a student of climate 

change, I think we have learned a lot of lessons from the European 

experience. We need a robust cap-and-trade system. We need to 

deal with cost containment, as we call it. We have, in the mechanics of our proposal on cost containment, we have applied some of 

the lessons learned from Europe. 

I would also say that, ultimately, we hope there will be a worldwide program, that it will not be just the United States and just 

the EUTS trading system. And so we need a program that is ultimately going to work on a multilateral basis. And we hope that, 

by starting here, we will get it developed. 

Mr. WELCH. OK, thank you. 

Ms. Peace, could you comment on that? 

Mr. WAXMAN. Mr. Welch, your time has expired. 

Mr. WELCH. Oh. Thank you, Mr. Chairman. 

Mr. WAXMAN. Thank you. 

Ms. Castor? 

Ms. CASTOR. Thank you, Mr. Chairman. 

And I would like to thank Chairman Waxman and Chairman 

Markey for starting us off less than 1 week after the Congress was 

sworn in, starting us off on climate change. 

And thank you to the panel for your participation. 

Can you all chronicle the current research efforts in carbon sequestration, various research efforts that are showing some promise at all? Who is conducting that research? What is being done 

right now? 

Mr. CORNELI. Well, Congresswoman Castor, Mr. Chair, that is a 

great question. And we actually tend to think that there are several phases on the continuum from research to deployment that are 

involved with all of the promising technologies. 

140 

With respect to carbon capture and sequestration, one of the exciting things is some of the technologies are very close to commercial deployment. You heard Mr. Nolen from Siemens earlier talk 

about part of the need of this program is to get competition and 

market customers established for the major developers of the technology and, with coal gasification, the technology to actually scrub 

the carbon out, compress it. 

Ms. CASTOR. But who is conducting that research? 

Mr. CORNELI. Well,that is not even research anymore. That is 

being done by private companies who are ready to do it. 

Ms. CASTOR. OK. What is that private company? 

Mr. CORNELI. Well, private companies like GE, like Mitsubishi, 

like Siemens, like—we can get you more information. 

Ms. CASTOR. Yes, because there was a utility in my neck of the 

words, in Florida, that was held up very early as one of the prototypes for carbon sequestration, and they have abandoned their research project for many different reasons. So I am trying to now 

get a little more detail on who is conducting the research. 

Mr.CORNELI. One of our views as a coalition is that we need 

these complementary measures that were described earlier to 

jump-start things like carbon capture and sequestration. Because, 

right now, all the technology can be put together. It hasn’t gone 

down the cost curves, like Mr. Immelt said. It is not cheap enough 

or widely available enough to use everywhere. And we think creating more demand and more supply will help make those things 

happen quickly. 

Ms. CASTOR. Can anyone else shed some light? 

Mr. BENDICK. I am Bob Bendick from The Nature Conservancy. 

My name tag is somewhere here. 

Of course there is a great deal of very specific evidence on sequestration by trees and by other natural systems. And I think we 

know pretty precisely what different forest types sequester, how 

quickly, both in the U.S. and outside the U.S. 

And that is why, sort of, forest carbon issues are part of the blueprint, because we know what those are. It is a very old technology 

and one we can count on in very specific ways if the regulations 

surrounding keeping those trees in place are good ones. And that 

is what we advocate. 

Ms. KLEE. If I could just add, we are working with our customers 

and have a project with Duke in Indiana for an IGCC coal plant 

with carbon capture and storage and other facilities to be CCSready. And our customers have been very receptive to that. 

And we also have a lot of experience, and other companies do as 

well, with CO2 injection as part of enhanced oil recovery. 

So the technologies are there. It is a question of getting them to 

be economically feasible. And the research for large-scale projects 

is very, very resource-intensive, cost-intensive. And that is why—— 

Ms. CASTOR. So it is mostly going on in the private sector, not 

at universities. Or is it? 

Ms. KLEE. It is going on at both, but it is very cost-intensive. And 

that is why getting funding is important, to ensure that we can 

take it to that next level. 

Mr. LASHOF. I just want to say, in terms of universities, there 

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141 

tory has done work characterizing the underground geology. Mr. 

Chu, nominated to be Energy Secretary, has been involved in overseeing that work. 

There is a lot of work at Stanford University and elsewhere in 

the academic community and in the Department of Energy National Labs, Battelle and other National Labs, as well as Berkeley. 

Ms. MOLER. There is also a great deal of collaborative research 

being done by the Electric Power Research Institute in our industry. And then Harvard has a major coal research project under 

way, as well. 

Ms. CASTOR. Do you all—go ahead. 

Ms. PEACE. I would just add that a lot of folks talk about CCS 

as being a new type of technology. And they have been using CO2

for enhanced oil recovery for 30 years in the Permian Basin. Granted, it is a little bit different if you want to sink it in to a brine aquifer, and it requires a lot larger cost, because you are not getting 

the revenue back from the oil. 

Mr. WAXMAN. Thank you, Ms. Castor. 

Ms. Eshoo? 

Ms. ESHOO. Thank you, Mr. Chairman. And thank you for making the very first hearing in the 111th Congress of Energy and 

Commerce on this issue in your new chairmanship. I think that 

that bodes very well for the country. 

And I want to compliment the USCAP team for the work that 

you have done. This has been a very interesting morning, to listen 

to all of the testimony. 

Our colleague, Mr. Markey, has a saying, and that is that there 

is no place to take a sick planet to, no hospital to treat a sick planet. So I think that, as we talk about the internals of a national policy of how we clean up and move on in a new way to not only protect our resources but also to move on economically and everything 

that comes with it, that we will be making a contribution to the 

world community, as well. I can’t think of anything more important 

for all of us to be working on. 

I am a member of the House Intelligence Committee, as well as 

this one. And back, I think, 2 years ago, there was a CNA report 

that was issued, and it was written by admirals and generals that 

found that global climate change posed a significant threat to 

America’s national security. So this isn’t only an issue covering the 

items that you all have spoken about this morning and members 

have asked questions about. This is an issue that does and will 

continue to have an impact on America’s national security. 

And to that end, both myself and Mr. Markey, chairing the Select 

Committee on Global Climate Change, and myself as a subcommittee Chair at the Intelligence Committee, held an open hearing, a public hearing, last year on this very issue. 

Here are my questions. I would like to know if any of you can 

tell us about where the gaps in R&D are, as to the major research 

and development that needs to take place on these issues. And if 

you have any recommendations to us about what role specifically 

the Federal Government should play in these investments that 

won’t overlap with what currently is taking place with private-sector R&D that should be considered or are under way. 

142 

That is my first question. I have been here for a long time, so 

I am going to get all my questions in first. 

I would like to know how you are all measuring your successes. 

There are many successes that have been mentioned this morning. 

And I hope you had the benefit of hearing what your forebears at 

the table spoke about. I would like to know about that. 

And thirdly, given where we are in our country with what has 

happened in the private sector and the rip-offs that have taken 

place, I would like some of you to comment on what recommendations you would have to us on how we don’t end up in the traps 

of not having enough oversight. 

I know that Mr. Tercek, before he joined The Nature Conservancy, was with Goldman Sachs. And I think we still have someone 

from The Nature Conservancy here, whether you can address this 

or not. 

So I guess my question is, do you believe that oversight of the 

market is really an issue in this whole debate, and what Congress 

can and should do and address as it designs climate legislation. 

I think without effective oversight of the Congress that, most 

frankly—and it is not a pretty depiction of what goes on—is that 

there are companies and corporations, private-sector people that 

end up chewing their limbs off of their own corporate body in order 

to get a leg up. And it hurts everyone and everything. I don’t think 

anyone wants to see a repeat of what we are experiencing now and 

the huge toll, the damage that it has taken on our national economy, not to speak of individuals and families and communities. 

So those are my three questions. And I thank you for the work 

that you have done. 

Mr. WAXMAN. Well, the gentlelady’s time has almost expired. But 

I do think it is fair to have her questions responded to, so I would 

like to have any of you on the panel volunteer to answer some of 

those questions. 

Ms. THOMPSON. Well, I will start with the response on the market oversight. I am speaking for Environmental Defense Fund, who 

believes a lot in cap and trade. 

Market oversight is fundamental. That is part of what makes it 

work. Transparency, accountability—I think you have already 

heard those things throughout the day. 

Now, the blueprint does not go into detail on that, in part because we did not have the experts on that. But I think that is a 

serious issue and one that we hope to work with Congress on. 

Ms. KLEE. We would support that entirely. I mean, we feel very 

strongly that transparency is key to the success of this program 

and a strong oversight role is appropriate. 

I would like to quickly address how we, from a company perspective, define success. And Mr. Immelt mentioned it this morning, 

but it is really our Ecomagination program. That is what has 

shown us that reducing greenhouse gas emissions and increasing 

energy efficiency is good from a business perspective. 

We save over a hundred million dollars a year through what we 

do internally as a company. And from a product placement, product 

perspective, we are increasing our revenues. And we set targets for 

that. We will hit $20 billion in revenues next year and have a goal 

of hitting $25 billion by 2012. 

143 

And those are technologies that increase energy efficiency and reduce greenhouse gas emissions. So these are key measures of success for us. 

Mr. CORNELI. Another measure of success I think that is important to us as a coalition as oppose to as individual companies would 

be measured in the things that you all measure and produce so 

well, and that’s votes. We really are serious that we want to see 

this legislation pass as quickly as possible. We really want to work 

with you. We want to sort of provide a stimulus or a push to Congress, and we want to be pushed back by members on all sides so 

there can be an effective good debate and a very good policy that 

will be good for our environmental colleagues, good for our corporate colleagues, good for the country. 

And that’s how we will measure success as a coalition. In terms 

of the gaps, you know, of R&D, we do think there’s a lot of resource—a lot of technologies ready to go now that can step into the 

gap and that can go down that cost curve. We think there’s a whole 

bunch of new ones that we have not yet even really been invented 

yet that with the right price signal and the right kind of R&D support, we can drastically lower the cost of powering our economy, 

building buildings, creating building materials and information 

management, food, fiber without emitting carbon. And we would 

like to see the United States be the leader in that. That’s fundamental research as well as strong assistance for continuous deployment of technologies. 

Mr. WAXMAN. We have very little time left and we have two 

members who want to ask questions. As you think about the questions that Ms. Eshoo and other members have asked, we would like 

to invite to you submit additional comments for the record. Mr. 

Rogers. 

Mr. ROGERS OF MICHIGAN. I know that Mr. Inslee has a quick 

question, so if I could just yield just a minute of my time to him, 

and then I will take the remaining time, Mr. Chairman. 

Mr. INSLEE. Thank you, Mr. Rogers. Just quickly, I want to ask 

this issue about how the permits should be allocated for a cap and 

trade system. Europe had an experience where they gave them 

away instead of auctioning them, instead of using a market-based 

system, they just gave them away. And they found that very suboptimal because it did not create a price on carbon, citizens felt 

abused because an asset they own, which is the atmosphere, was 

just given away for free and simply reduced the effectiveness of the 

program. Many of us think that we ought to start with a mixture, 

heavily weighted to an auction with perhaps some accommodation 

for energy intensive industries to ameliorate some of these issues 

as a preferable way to do this. I’d appreciate any of your suggestions, particularly those who sort of agree with me. 

Mr. LASHOF. Mr. Inslee, that is an excellent question. It is a very 

important and consequential decision that this committee and the 

Congress has to make about how the allocations are made. We do 

I think in the blueprint take notice of the experience in Europe and 

make recommendations to avoid it in several ways. First of all, we 

do recommend following the approach that you proposed with respect to energy intensive industries. So that’s one area where we 

believe an allocation is warranted as opposed to an auction. Also 

144 

phasing out is those things—as those competitive distortions are 

addressed. With respect to allocations for the electric industry, 

rather than give allocations primarily to generators, most of the allocations that we’re proposing would go to regulated local distribution companies, specifically on behalf of their customers. And we 

specifically talk about the need to avoid windfall profits as part of 

that. 

And finally, with respect to merchant generators, such as NRG, 

we do propose some allocations. But they’re limited to the net compliance cost that those companies have. 

Mr. INSLEE. Thank you. And I want to thank Mr. Rogers for his 

assistance. 

Mr. WAXMAN. Mr. Rogers. 

Mr. ROGERS OF MICHIGAN. Thank you, and time is short, so I will 

be quick if I can. Ann from General Electric, is your company still 

in the appliance business? You build appliances? 

Ms. KLEE. Yes, sir, it is. 

Mr. ROGERS OF MICHIGAN. What percentage of those appliances 

by component is built outside of the United States? 

Ms. KLEE. I don’t have that information, but I can get it for you. 

Mr. ROGERS OF MICHIGAN. It is pretty significant though, isn’t it? 

You over time have moved quite a bit of the manufacturing, at 

least components? 

Ms. KLEE. We have significant manufacturing in the United 

States. 

Mr. ROGERS OF MICHIGAN. Sure. But you have also moved significant manufacturing outside of the United States? 

Ms. KLEE. We have manufacturing and partnerships and 

sourcing outside as well. 

Mr. ROGERS OF MICHIGAN. Did the Federal Government tell you 

that you needed to go into Ecomagination? 

Ms. KLEE. No, sir. 

Mr. ROGERS OF MICHIGAN. You did that entirely on your own. 

Ms. KLEE. That was an entirely voluntary effort. 

Mr. ROGERS OF MICHIGAN. Great program. My point here being 

that congratulations. I think the market is showing that you can 

do this on your own. And is it not true that General Electric would 

benefit significantly financially from their business model if we 

passed a cap and trade bill? 

Ms. KLEE. I think what Mr. Immelt said this morning is our energy business is strong right now, and we will do well with it regardless. 

Mr. ROGERS OF MICHIGAN. He’s also reported as saying, and I 

quote—well, he has made it clear that he would be getting rid of— 

this is not a quote—made it clear that they would be getting rid 

of lower margin businesses. Manufacturing in today’s day and age 

is a low-margin business. 

Ms. KLEE. I did not see that quote but I am quite certain that 

he was not referring to the energy business in the United States. 

Mr. WAXMAN. Mr. Rogers, will you yield to me just to point out 

to you that there is 2 minutes and 40 seconds left in the vote on 

the floor. I will let you go ahead and continue with your questions. 

Mr. ROGERS OF MICHIGAN. I won’t go on too much. My point here 

being, Mr. Chairman, I think climate change is incredibly imporVerDate Nov 24 2008 15:26 May 20, 2011 Jkt 037690 PO 00000 Frm 00150 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 111\111TH RESEARCH\111-1 CHRIS
145 

tant as well. But there are some great industries that are voluntarily getting into the economics of the environment, which is fantastic. We all win when that happens. And I think we need to be 

very careful about our witness panels who are basically saying— 

especially a company like General Electric who has already skirted 

rules and regulations in the United States to make money overseas 

perfectly legal. If we make it more difficult to manufacture 

things—and that’s what we do in the State of Michigan—you are 

going to kill a State like Michigan. And it worries me a lot that 

there is maybe a better approach to this rather than this very complicated cap and trade system that has brought corruption to Europe. And I think you addressed that through your transparency 

question, which is great. But the reason that we don’t—you don’t 

have it in your blueprint is because nobody knows how to do it, 

that you don’t run into these corruption problems. I just hope that 

we take our time, we do this right, if maybe not at all, or build in 

an incentive for businesses to adopt what General Electric has 

done and is excited about in their environmental sector of business. 

And if we don’t do that, I think we are all certainly going to regret it. From a State that still likes to build stuff in America and 

build the middle class in America that is slowly eroding away because we can’t build things anymore, we’d better, we’d better understand what that means for the average person who gets up and 

still builds things in this country. So I appreciate the opportunity, 

and the chairman was very gracious to let me go. And now I’m 

going to introduce a rule change package here in the House. Thank 

you very much. I appreciate your time. I am adjourning the hearing. This may be the only time I get to do this in 2 years. Hearing 

adjourned. 

[Whereupon, at 1:30 p.m., the committee was adjourned.] 

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