Hill Heat

Dingell also questioned the “aggressive nature of the renewable electrical standard,” but he and Gene Green (D-Texas) were more focused on aid for industries, particularly the U.S. automakers and refiners.

Green, worried about job losses in the Houston ship channel area that he represents, urged the committee to provide ample free emissions allowances from the trading program for energy-intensive industries, as well as financial support for consumers facing higher electricity prices.

“We must protect our energy–intensive industries, including refineries, so we do not simply export those jobs abroad to nation without carbon controls and lax environmental regulations,” Green told the committee.

Dingell called for doubling the incentives for the Department of Energy’s advanced technology vehicle incentives programs to help the auto industry in his home state. He added:

“Of course, the question of auction versus allocation still lies before us, and that is a very serious question. Some might say ‘deal breaker’ for many members.”

The auction details from the cap-and-trade portion of the bill have yet to hammered out, which has created an easy target for fiscal fear mongering among opponents. Without knowing how the money from cap-and-trade auctions would be distributed, the Congressional Budget Office can’t accurately gauge the bill’s financial impact.

Jackson offered the committee the EPA’s newly released cost assessment: The energy bill for an average family would rise between $98 and $140 per year.

However, the EPA’s analysis looked only at the cap-and-trade portion of the bill, and with so many details yet to be determined by the committee, the EPA had to make assumptions about the price of carbon ($13-17 per ton in 2015) and the percentage of revenue that would be returned to consumers (40 percent).

The 40 percent rebate for consumers, a number recommended by the bill’s authors, did offer more insight into how Waxman and Markey might propose divvying up the revenues, but it was still only an estimate.

The committee’s 23 Republican members asked Waxman in a letter this week for more hearings to flesh out the details before the committee begins marking up the legislation for a vote.

“Your discussion draft lacks any decision on permit allocations versus auctions,” they wrote. “The manner in which you will address this issue is the cornerstone of the legislation; without it the bill is simply not finished and not ripe to be marked up or accurately discussed in the context of a hearing.”

In the absence of stronger data, some opponents have resorted to inventing their own numbers.

Two of the most outspoken opponents of the bill – Reps. John Shimkus (R-Ill.) and Joe Barton (R-Texas) – suggested that the lack of details was a conspiracy to prevent the committee from knowing the true cost. They repeated the GOP’s manipulation of a recent MIT study, saying the increase would be $3,100, a number the study’s own author says is 10 times too high.

It was a fellow Republican, LaHood, who spoke up today about the continued abuse of the MIT study.

LaHood held up a letter from the study’s author correcting the GOP’s use of his numbers. But when he asked to enter the letter into the committee record, Shimkus objected. If the MIT letter was submitted, then Shimkus wanted to submit a story written by the Weekly Standard, too. Waxman agreed to both.

Shimkus was clearly playing to the cameras this morning. He vowed that “those of us who want jobs are going to try to defeat this bill” and went on to declare cap-and-trade a greater danger than terrorism:

“I see this as the largest assault on democracy and freedom in this country as I’ve ever experienced. I’ve lived through some tough times in Congress. I’ve seen two wars, terrorist attacks. I fear this more than all of the above.”

Like it or not, economics will be the issue for members of Congress. Their re-election campaigns are built on numbers – how many jobs they created, how much federal bacon they brought home – and their campaigns are always on.

Bingaman: The development of this massive economic recovery bill. The expectation is that it will contain tens of billions of dollars for grid modernization, energy efficiency. There’s been a lot of frustration in this committee for the time it’s taken to implement what we’ve already enacted. For example, the loan guarantee program in the Energy Policy Act of 2005.

Chu: I share your concerns. During my tenure at Lawrence Berkeley I spent 3/4 of my time in operations. We have to move rapidly.

Bingaman: The new org charts. The new White House coordinator for climate and energy policy. How does this affect your role? Will you be able to be a strong voice on climate and energy issues?

Chu: The President-elect, when he chose to establish this office it shows how important he sees this issue. The country’s energy and climate change future is very important. I look forward to working closely with Ms. Browner. She has a very difficult task ahead of her. I’m looking forward to working with her. I think it will be a collaborative and close cooperation.

10:33 Murkowski: I particularly appreciate the words about the importance of education. I also think that within the Department of Education (sic) is how we educate the rest of the nation. I hope you appreciate that is a big challenge. Domestic oil and gas production. Last year the President removed the presidential moratorium and then Congress let a similar ban expire. I agree that we should focus on conservation and renewable energy sources. Will you join us in opposing the reinstatement of the bans?

Chu: Responsible production is part of a larger energy policy. Reserves of the United States are perhaps 3% of world’s reserves. While it is important to fold in production, we have to keep in mind these numbers. More efficient use is the main thing we can do to reduce our dependence on foreign oil.

Murkowski: You support continued nuclear development. Nuclear is a very key component in reducing our emissions. The DOE has an unconditional obligation to take and dispose nuclear waste. What do you propose to do?

Chu: These are very thorny questions. The President-elect has stated his position on Yucca Mountain very clearly, but the DOE has an obligation. I am supportive that the nuclear industry has to be part of our energy mix. There’s a lot of new science coming to the floor. It will occupy a significant part of my time and energy.

Murkowski: Recycling?

Chu: Yes. The processes we have are not ideal. There’s an urge to reduce the proliferation resistance of recycling. There’s an economic feasibility issue. This is in my mind is a research problem.

10:40 Johnson: High-power renewable energy transmission.

Chu: Some of the greatest renewable energy resources lie in areas like the Dakotas and the southwest United States. How do we construct these very expensive lines across state boundaries, over states that don’t benefit much from them, frankly, to population centers that do benefit? We have to think nationally. There are two obstacles: siting is one. We have the technologies.

Johnson: Biofuel production. What policies need to be in place to reach production targets?

Chu: This is partly a technical question. I frankly don’t know whether one can safely go to E15 and E20 and higher with automotive engines.

Johnson: Deep Underground Science and Engineering Laboratory in South Dakota.

Chu: I visited the DUSEL laboratory. It’s a very exciting project. Going forward, I’m going to have to remove myself from decisions with that specific project, but with regard to cooperation with the DOE, this is squarely in the sights with what they plan to do in FermiLab. Cooperation between NSF and DOE is essential.

10:46 Burr: I hope we can expeditiously take care of your nomination. Do you support FERC having expanded transmission authority?

Chu: Let’s just say I know the bottlenecks and there’s been a lot of frustration. DOE has authority to designate critical corridors. There are two designated corridors. We’re now mired in lawsuits. What you really want to do is make these things happen as quickly as possible. If one just expands the authority my feeling is the states and local people might react. We should start with a softer approach but we do have to move quickly.

Burr: Nuclear loans. Authorized at $18.5 billion. Not sufficient but a good start. Will you make the loan guarantee program more useful?

Chu: I think it is something that is very important. It’s a mixture of the loan guarantee program and the local regulatory authorities. The point here is that nuclear power is going to be an important part of our energy mix. I will do my best to put together a leadership and management team to do this in a more timely manner.

Burr: Technology transfer.

Chu: What we need to do is get to the place where we need to go as rapidly as possible. International cooperation is often the best way.

Dorgan: I will be chairing the subcommittee that funds you. I’m happy to vote for you. While I’m a strong supporter of renewables and efficiency, I want to talk to you about coal. 50% of electricity we use is coal. I don’t think anybody believes that in the next decade we won’t use our most abundant resource. Your notion about promoting clean coal technologies, continuing to invest in CCS. Your statements about coal as your worst nightmare. If we continue to use in the whole world using coal without controls I would consider that a nightmare as well.

Chu: Thanks for giving me a chance to expand on that comment that’s been ricocheting around the Internet. In China for example they have not even begun to capture NOX, SOX, mercury. Coal is an abundant resource in world. US, India, China, and Russia have 2/3 of the world’s coal. They will not turn their back on coal. I’m optimistic we will develop CCS. I will work very hard to extensively develop these technologies. There are some people in the United States that believe we should turn off coal. But even if we do, China, India, and Russia will continue to use coal.

Dorgan: We have to do everything well. The price of oil went to $147 a barrel, then went way down. That should not in any way diminish our appetite to develop renewables, conservation, but also more production.

10:58 Barrasso: There are tradeoffs when energy costs go up. 32 years ago when Jimmy Carter came into the Senate he charged a small group of energy planners to come up with a plan in 90 days. They wanted tax incentives for companies to switch from oil and natural gas to coal. I read an article in one of the Wyoming papers when Obama said the dangers of dependence on foreign oil are eclipsed by the long-term threat of climate change. Biden said, “No coal plants here in America.” I’d like to have your comments on that. I know you met with Illinois delegation on FutureGen.

Chu: The coal resources in the United States are immense. I am hopeful and optimistic we can use those resources in a clean way. It’s really a question of technology. I’m very hopeful this will occur and I think we will be using that great natural resource.

Barrasso: Coal is the most affordable, available, and reliable source of energy.

Chu: I would take your question to a slightly different place. As we build new power plants, energy efficiency is a great investment of intellectual thinking because it allows power companies to build fewer power plants. It’s ROI. The biggest thing we can do is slow the building of new power plants and that’s very important. We in DOE would be working very hard to bring these new technologies as quickly as possible. Energy efficiency remains the lowest hanging fruit in the next decade or two.

11:03 Sanders: We’ve talked nuclear and coal, but we haven’t talked about solar. The southwest is the Saudi Arabia of solar energy. Because of the credit crisis, many solar thermal plants are not moving forward. Would you be willing to sit down with the solar industry and myself?

Chu: I would definitely be willing to do that. I share your enthusiasm.

Sanders: Federal policy for PV units on rooftops?

Chu: It would foolish for me to say the rest of the United States cannot learn something from California.

11:09 Sessions: I would like the opportunity to meet with you. I think you’re on the road to a successful confirmation. The nuclear loan program really needs to move forward. Let’s talk about nuclear power. If you accept that CO2 is a global warming problem, isn’t it important we accelerate the use of this clean source of energy?

Chu: Yes. We have to do the work necessary to see if recycling is feasible.

Sessions: It reduces the quantity and toxicity of waste to 600 years from 100,000 years. Carter’s decision was one of the more colossal disasters of energy policy. Are you committed to making a breakthrough here?

Chu: Again, I’m not an expert in recycling technologies. It’s a technology that was invented in the United States.

Sessions: We need to make a decision rapidly.

Chu: There are two questions. Do we build generation 3 reactors? Plans are underway. The recycling issue is one we don’t need a solution today or even ten years from today. It doesn’t mean that you stop everything today. We will be building some coal plants. One doesn’t have a hard moratorium on that while we study CCS.

Sessions: The real crisis economically is not electricity but foreign oil.

11:15 Landrieu: I appreciate the meeting in our office. With so much off limits in the past, I would urge you to be careful about the comment of 4% of known reserves. The importance of developing the right kinds of technology can never be underestimated. We don’t have pirates in the Gulf of Mexico but there are pirates all over the world. Oil and gas industries can’t practice their craft safely in many parts of the world. We do the world a great service if industries can work here. What can you do to move forward on nuclear?

Chu: We need to move forward on the nuclear loan guarantee. I agree we’ve got to get going. We need to develop a plan for the long-range disposal of the waste. There’s research that has to be done on reprocessing.

Landrieu: Sugar is a great base for biofuels.

11:21 Corker: I enjoyed our phone conversation. Would it make sense to have Browner in for testimony? You mean to pursue nuclear now despite issues with waste. We probably need 300 plants.

Chu: I’m confident we can find a solution with the waste problem. This is a complicated economic decision that utility companies have to make.

Corker: You advocate putting a price on carbon. Tax or cap and trade?

Chu: The president-elect is clear in supporting cap and trade. I support his decision. The simpler the cap and trade system is the happier I will be.

Corker: Stakeholders want loopholes. Cap and trade systems have all kinds of free allocations and offsets and you’re not achieving anything.

Chu: Countries around the world are in cap-and-trade systems and we have to integrate with the rest of the world. Again, philosophically, I have not studied these bills that have been advanced, but the simpler it is, the better it is. There are stakeholders.

Corker: Coal is part of our energy base. Without some huge dimunition in our standard of living it’s going to be a part for a long time. I’m just a junior senator from Tennessee. I have trouble seeing how CCS works on a commercial base. Unfortunately Tennessee’s extensive use of coal has been noted in the press recently.

Chu: From the geophysicists I’ve talked with, it’s a possibility but a significant challenge. There are many geological sites we have to test. We have to accelerate the testing.

Corker: A lot of people think that will happen when donkeys will fly.

11:28 Lincoln: I appreciate having the opportunity to visit with you. Cellulosic biofuels.

Chu: We’ve worked on technologies that convert cellulosic material into fuel. In the first six months we’ve trained bacteria and yeast to take simple sugars to produce gasoline/diesel substitutes. The scientists are dedicated to making this commercially feasible.

Lincoln: I just want to make sure it’s something I grow.

Chu: We’re looking at the entire list of possibilities. How do you break plants down. Algae. I’m optimistic real progress can be made.

Lincoln: Do you agree that biofuels have a significant role in addressing our nation’s carbon footprint? Geographic distribution of wind energy leaves out the southeast.

Chu: We have to be very diverse. Solutions have to come from every sector. Biofuels is very important to get off our dependence on foreign oil.

11:35 DeMint: I appreciate your visit to my office. We agree on the importance of moving away from fossil fuels, but also the reality of our near-term use of coal and nuclear. We talked about carbon taxes which concern me in the context of penalizing fossil energy now. The rational way to do that is to create incentives. But carbon taxes or penalties should not take place until we give the time for utilities and industry to convert.

Chu: Coal and nuclear and gas form the baseload generation of electricity today. We have to evolve. We need all the solutions as quickly as possible.

DeMint: It’s been reported that you’ve said, “We should do to raise the price of gasoline to the price in Europe.” Do we really want to add a tax to living and businesses?

Chu: Gasoline taxes are off the table. That comment was made in the context of reducing our use of foreign oil. Energy efficiency is the key. Weatherization of homes. More efficient cars. They’re beneficial in two ways. It reduces costs and reduces demand. Demand went down because of a recession, lowering prices. We do not want to see ever rising costs. This will do exactly that.

DeMint: Nuclear is obviously important. States like South Carolina have received a lot of nuclear waste in temporary storage.

11:42 Cantwell: I look forward to working with you. I’d love to talk about smart grid legislation in the future. Your DOE budget is about $25 billion. About 10 percent of that is the Hanford Washington cleanup. Do you support the tri-party agreement that 99% of the waste should be cleaned up?

Chu: The DOE has a legal and moral obligation to clean up these sites. I will do everything I can to use the funds more effectively and rapidly. I am committed to cleaning up these sites.

Cantwell: The last administration planned to expedite the cleanup by leaving more waste behind. Would you support increasing the Hanford funding? The state has identified a plume of groundwater contamination.

Chu: I’m not sure of the exact number, but I did argue in discussions about the stimulus package for funds for this cleanup. It would be very bad if the contaminants get to the Columbia River.

Cantwell: Some contaminants are already there. A concern is Bonneville Power Authority’s ability to expand transmission lines for renewable energy.

Chu: I support that.

11:48 Menendez: I regret we didn’t have an opportunity to speak before. A national grid is in the national interest. But the entire state of NJ has been designated as a national interest corridor. On the West Coast the DOE produced a transmission line by transmission line study. As the DOE updates their congestion studies, will they be accurate on a line by line study? Would you be willing to narrow the Northeast transmission corridor?

Chu: I recognize that New Jersey is a bigger state than some people think. I would be willing to narrow the corridor based on reviews. I don’t know the details but will review that.

Menendez: We are the second-largest producer of solar equipment. A big challenge is net metering and interconnection standards. Do you support legislation?

Chu: Yes. I’m on the NAS panel, on the transmission and distribution subpanel. The smart grid is a very important part of our strategy to a sustainable energy future.

Menendez: Sen. Sanders and I authored the efficiency block grant program. I hope you will look at that.

11:53 Wyden: I look forward to supporting you as our secretary. The nuclear blueprint greenlights more plants without dealing with the waste.

Chu: I’m willing to work with you, but I believe nuclear power will be part of our future. Nuclear power is 70% of our carbon-free production today.

Wyden: The ballgame on climate change is bringing in China and India into a global agreement.

Chu: Currently we’re in a standoff position. Our position is we won’t go forward without China. China’s position is that the richer countries that have put all the historical emissions up have the responsibility. I think all countries have to be a part but we need to lead. We need to start working with China and India to work concurrently developing technology, particularly efficiency. For example, building energy-efficient buildings.

Wyden: I think you’ll be an excellent secretary.

11:58 Udall (D-Colo.): There’s a belief that a renewed emphasis on science will serve Colorado, this nation, and the world well. I look forward to supporting your nomination. The Rocky Flats Environmental Technology Site. We’ve closed that site. But we have ongoing issues. Cleanup, worker health.

Chu: I will certainly look into this.

Udall: The National Renewable Energy Laboratory.

Chu: I think NREL will play a key role going forward. You have my assurance that NREL is certainly on my radar screen and has to play a vital role.

Udall: The national renewable electricity standard. Would you work with us on developing one?

Chu: I would be working with you on that. Renewable electricity is something we have to develop as quickly as possible.

12:04 Bayh (D-Ind.): I enjoyed our phone conversation yesterday. Coal and clean coal technology is very important. I think it’s critical to involve China and India in any CO2 treaty. You said we have to lead and hope China will follow. I don’t think that will pass Congress. Simply trusting China to follow won’t work.

Chu: I agree with that absolutely. I was the author of a international report, Lighting the Way. We said that all the countries have to be part of the solution. This is a touchy diplomatic, international problem.

Bayh: We have to make sure it’s going to work. I’m a little skeptical if they’ll ever get there. Our first hearing was on energy security. I view this as one of our defining challenges of our time.

Chu: First is to move to the electrical grid. We have to improve batteries. These first electric hybrid cars don’t have the battery lifetime we need.

12:11 Shaheen (D-N.H.): As we discussed when we visited, New Hampshire is doing interesting work with biofuels.

Chu: You accelerate first-generation work in many ways. You challenge scientists to keep their eye on the ball. This is not a ten or twenty year program. We’ve had national emergencies. The good news is because of energy security, climate change threats, some of the best and brightest students in the country want to work on this. We should support retraining of postdoctorates. Working with national labs and industry. We don’t know where the solutions will come from, but they will come from the best and brightest. The fraction of our fuel going to something other than petroleum. A low carbon standard. These are excellent draws.

12:15 Bingaman: We wish you well in your new position and the hearing is adjourned.