Senate EPW Committee Questions Chu, Salazar, LaHood, Jackson, and Wellinghoff on Climate Bill

As it happened:

Senator Boxer (D, CA) opens the Q & A session with a request to Secretary Salazar to discuss the urgency of the bill. Secretary Salazar responds with anecdotes on the effect on public lands and national parks, including the almost certain prospect that there will be no glaciers left in Glacier National Park by 2020. Turning to Administrator Jackson, Senator Boxer asks about whether cap and trade is new. Catching the softball, Administrator Jackson describes the salutary effects of the cap and trade method of decreasing SO2 in prior programs under the Clean Air Act (CAA). Boxer then asks Secretary Chu about how important the certainty of incentives is to ensuring investments in renewable energy. Secretary Chu responds that, given the long-term investments required in the energy industry in any technology, the decision makers need to know that their investments will reap rewards for five or six decades into the future.

Senator Inhofe (R, OK), the very grumpy former chairman of the committee, starts by referring to the outrage of the teabaggers. (!) That they are worried about health care, and this "energy tax." He uses his questioning time to, instead of asking questions, refute points in Senator Kerry's presentation made at the beginning of the hearings--including refuting the science behind climate change. "The science is not settled," he says. "Everyone knows its not settled."

Finally turning to Administrator Jackson, he asks unspecified questions about acid rain, the endangerment finding for polar bears, and presumably its consequences. He then asks that each of the presenters address his assertion that the United States gas, oil and coal reserves are now the largest in the world, and what they plan to do to exploit that. He asks that the questions be answered in writing, however, and Senator Boxer asks the presenters that they make those available by COB tomorrow.

Senator Klobuchar (D, MN) takes the mic, asking Secretary Chu to talk about the signal that the bill will send to the private sector for energy investment--which is clearly the overwhelming point Secretary Chu is here to make. He talks about opportunities lost--that Germany has had more success than we have with wind turbines, because they provided sustained funding for the industry. And he talks about "brilliant ideas" popping up in various pilot programs, and Senator Klobuchar finishes his thought for him, that if we don't provided sustained signals for these entrepreneurs, then we will lose their poitential.

Senator Klobuchar also presses Secretary Chu for details on nuclear incentives. Secretary Chu describes this as "the beginning of the start of a new nuclear industry." As for the timeframe for getting a new nuclear power plant up and running, Secretary Chu can only answer "that depends," averting to the role of the Nuclear Energy Regulatory Commission (NERC). "Ideally," he says, "it could be between five and ten years."

Senator Voinovich (R, OH) is up, and this should be good, because he earlier decried EPA's lack of thoroughness in its analysis. Brushing past the fact that the Senate and House bills are extremely similar, and EPA analyzed the differences, Senator Voinovich intones that, nonetheless, "[t]he fact is that you have not done a full analysis, is that correct?" Administrator Jackson admits that it is true, and that it would take four to five weeks to run full models on the Senate bill. The Senator also talks about preemption, noting that, on his read, this legislation would not preempt the use of the CAA to regulate GHGs. Administrator Jackson says that she still believes that there would be no preemption--that the CAA can still be used to mitigate the harm of some GHG emissions, but that what is really needed is economy-wide action through a bill like this.

Turning to Secretary Chu, Senator Voinovich states his concern that we will not have the technology in place to meet the cap and trade goals. Seemingly wanting to meet them through carbon capture and sequestration (CCS) of emissions from coal plants, he notes that it is urgent that we have CCS in place by 2020, especially if we are going to continue to compete with China (which he notes, as many did in the Senators' preliminary statements, is building one or two coal-fired power plants per week.) Senator Chu responds that energy conservation--if "we really think hard about it"--is the most cost-effective way of reducing carbon, that solar and wind power is very promising, and that we need to press hard and act aggressively, but that we can meet the goals.

Next, Senator Specter (D, PA) addresses Administrator Jackson. He notes that a big selling point for people who don't like climate legislation is the idea that the EPA would no longer be able to come in and use the CAA to regulate CO2 or other GHG emissions. Apparently believing that Administrator Jackson is not familiar with basic strategic concepts, he asks whether she would be able to make concessions in this area. Administrator Jackson responds that, despite the benefits of a cap and trade bill, the EPA will still need the authority to, e.g., address localized pollution sinks that may remain (which is a bit confounding, since we are talking about GHGs, which have a global effect.). Senator Specter says, nonetheless, that he would like to see this bill given preemptive force over the CAA in the area of GHG regulation, and that "if there are other things that you want [to see in the bill], let us know about them," because there is a lot of value in certainty. He explains that "we don't want to buy a pig in a poke." Finally, turning to FERC Chairman Wellinghoff, Senator Specter notes that his constituents are very concerned about transmission lines and pipelines, and asks that he come out and hold hearings before making siting decisions.

Senator Sanders (D, VT), averting to Vermont's strides in energy efficiency, asks Secretary Chu about the benefits of a Smart Grid--specifically the cost savings that we can achieve through peak shifting. Secretary Chu responds that *just* peak shifting would achieve $100 billion in savings a year. Senator Sanders then presents a chart to Secretary Chu showing that the most cost-effective way to go forward is through wind and solar--and that nuclear is the most expensive form of new energy. Secretary Chu, seeking good marks but not wanting to just parrot Sanders, responds that energy efficiency is the cheapest way of going about this. Senator Sanders, not satisfied, makes his own point for himself--that wind, solar, and geothermal are the cheapest form of new energy, but complains that everyone on the committee seems only to be talking about nuclear and coal.

Senator Sanders asks Secretary of Transportation LaHood why we don't have the same type of rail systems seen in Europe and Asia. The Secretary responds, promptly and boisterously, that its "lack of investment." That had Truman made the investment in railroads that he did in highways, we would have those rail systems. But "instead we have a state of the art interstate highway system." Then, Senator Sanders rounds out his questioning by playing to his constituency, extracting statements from the Secretary of his intent to invest in transportation links for rural America.

Senator Udall (D, CO) takes the mic, and ask FERC Chairman Wellinghoff about renewable energy. The Chairman replies that it is important that we have a national standard, and that this bill does that. Turning to Secretary Chu, the Senator asks about the importance of natural gas in future energy plans. Secretary Chu notes that they are funding pilot programs for fueling cars with natural gas, and talks about recovering natural gas from shale as a lower carbon option than some of our current fuel sources. (An answer that should dismay environmentalists aware of the devastating effects of oil shale extraction.) Finally, Senator Udall asks about the costs of wind and solar. Secretary Chu says he is optimistic that solar and wind costs are continuing to drop. Finally, he asks Secretary LaHood about the benefits of investing in passenger rail. Secretary LaHood replies, boisterous again, that it would "[t]ake a lot of cars off the road, take a lot of CO2 [out] of the air. .... When someone gets on a train, they're out of their automobile, and the benefits will be enormous." Underscoring his point, he reprises that "I want to be clear on this, we haven't made the investments in America in passenger rail."

Senator Lautenberg (D, NJ) seeks another assurance from Secretary Chu on the achievability of a 20% reduction in GHG emissions, asking if it can't be achieved through energy efficiency alone. Secretary Chu replies that it can be achieved, but that it will involve looking in every corner, and counting carbon offsets such as reforestation. Turning to Secretary LaHood, Senator Lautenberg asks for more specifics about the effects of increased train service on CO2 emissions, and Secretary LaHood promises a more detailed answer on the exact effects in writing. Senator Lautenberg averts, in the end, to the "cost of doing nothing."

Senator Merkley (D, OR) takes his turn, again talking about the extraordinary benefits of energy efficiency, referring to a McKinsey report issued last year. He notes that it is the cheapest way of providing for new energy needs by far, and will actually reduce household bills. So he asks, "Are we underinvesting in energy efficiency in this bill? Do we need to be going further, and actually have a separate standard?" (I can hear the cheering from ACEEE from where I sit.) Secretary Chu answers, point blank, "Yes." But "there are some barriers at work here. ... What we call market failures. Many people don't know what to do, its inconvenient, there's inertia, and there are also finance barriers. Energy efficiency, you can't just say make it happen. You have to be very proactive, because of these market barriers." Senator Merkley says that he would like to work further with the Department of Energy to help break down the barriers, saying that he would really like to see us achieve the 20% reduction by 2020 through energy efficiency alone, a technology "that pays us back." Secretary Chu replies that the Department will be trying to pilot programs over the next year to see if it can bring down costs--presumably, including barriers.

Finally Senator Merkley asks if we should really be pushing electric cars as a way to reduce CO2 emissions. Secretary LaHood cheers for the GM Volt, but none address whether electric cars would really result in net emissions reductions.

Senator Whitehouse (D, RI) takes over, and notes "the fact that every single one of our Republican colleagues has departed ... shows how difficult" the process is going to be. Turning to a specific issue, he urges that "as you look at the nuclear component of our energy portfolio, that you look aggressively at the nuclear waste" and see about converting it into fuel. "One day, we should be burning this nuclear waste as fuel." Secretary Chu says that the Department has started a detailed look at this. He notes that only 1% of the energy content of the uranium dug out of the ground is actually used.

Senator Whitehouse asks Chairman Wellinghoff about dispatch orders for when power plants are turned on and off. "It is my understanding that these dispatch rules do not take the environmental effects into account whatsoever," and says he would like to work with FERC to make sure that those environmental effects are taken into account in the dispatch rule. Finally, turning to Administrator Jackson, Senator Whitehouse states that "the perspective that I have on this is that for many years, corporate polluters have been ducking and dodging on their responsibilities under the CAA" by building smokestacks. "Right now, in Rhode Island, on a bright summer day, the radio today could easily announce that today is a bad air day ... because of what is being rained down on us by these [out-of-state] power plants. . . . As we look at the CAA ... I very strongly believe that it is time that these power plants are held to account ... So I hope that you will stand firm on the CAA."

Senator Cardin (D, MD), bringing up the rear, thanks the panelists for their public service. He seeks to "underscore two points," about energy policy and investment. Transportation represents 30% of our GHGs, and 60-70% of our oil use. He notes that he would like to get public transportation going far beyond passenger rail, and thanks the Chairwoman for doing that with the bill. He then turns to how the panelists use their existing authority--and thanks Administrator Jackson for putting the environment back on the EPA's priority list. Again playing the good cheerleader, he says "We need to get this done. .... [But] be aggressive with the tools that are already available."

A great note on which to end today's hearings.