Witnesses:
Mark McCullough
Executive Vice President – Generation, American Electric Power
Eugene Trisko
Attorney at Law, United Mine Workers of America
Robert Hilton
Vice President, Power Technologies for Government Affairs, Alstom
John Voyles, Jr.
Vice President, Transmission & Generation Services, PPL Corporation
John Christy
Professor and Director, Earth System Science Center, National Space Science Technology Center, University of Alabama in Huntsville
Dan Lashof
Program Director, Climate & Clean Air, Natural Resources Defense Council
John Thompson
Director, Fossil Transition Project, Clean Air Task Force

 

Subcommittee Members Present:
Edward Whitfield, Chairman (R-KY)
Bobby Rush, Ranking Member (D-IL)
John Shimkus (R-IL)
Lee Terry (R-NE)
Michael Burgess (R-TX)
Pete Olson (R-TX)
David McKinley (R-WV)
Cory Gardner (R-CO)
Mike Pompeo, (R-KS)
Morgan Griffith (R-VA)
Joe Barton (R-TX)
Edward Markey (D-MA)
Gene Green (D-TX)
Lois Capps (D-CA)
Mike Doyle (D-PA)

 

Full Committee Members Present:
Fred Upton, Chairman (R-MI) 
Henry Waxman, Ranking Member (D-CA)

 

On September 20, 2012, the House Committee on Energy and Commerce Subcommittee on Energy and Power, held the 29th day of a series of hearings titled “The American Energy Initiative” to discuss H.R. 6172, a bill that prohibits the Environmental Protection Agency (EPA) from finalizing any standards of performance under section 111 of the Clean Air Act (42 U.S.C. 7411) for carbon dioxide emissions from existing or new fossil fuel-fired power plants unless or until carbon capture and sequestration (CCS) is found to be technologically and economically feasible. This bill rejects the proposed EPA rule to combine both coal-fired and natural gas-fired power plants into a single newly created source category, and set a single carbon dioxide standard, at a level that has been met by new natural gas combined cycle power plants, of 1,000 pounds of carbon dioxide per megawatt hour. In addition, coal-fired plants must capture and store 50 percent of their carbon emissions.  This rule also specifies that a utility will comply if their average emissions over the next 30 years are within the standards. The proposed rule was first issued in March 2012.

 

In his opening statement, Subcommittee Chairman Edward Whitfield (R-KY) stated, “It is now clear to everyone that the Obama Administration intends to limit or eliminate the use of coal for electricity generation.” He continued explaining that while the Obama Administration “denies” this bias against coal, this denial has “become even more far-fetched in light of EPA’s proposed New Source Performance Standard for greenhouse gases from fossil fuel-fired electric generating units.” Coal plants would almost certainly have to install CCS technology to comply with the standards. Whitfield describes this technology as “a very long way from widespread use” and the new EPA regulation as “nothing less than an outright ban on new coal-fired power plants, and one that could later be extended to existing plants as well.” Whitfield yielded to John Shimkus (R-IL). Shimkus referred to the proposed EPA regulation as an “assault” on “our cheapest form of energy.” He referred to the loss of coal production jobs as an “untold” story of the loss of taxpayers.

 

Ranking Member Bobby Rush (D-IL) began his opening statement by saying H.R. 6172 is an attempt to “roll back progress” in “trying to make our air, land and water cleaner for the American people.” Rush said H.R. 6172 would prevent coal plants from becoming cleaner and sends a clear message that “if we don’t succeed once, twice, ten, twenty or in this instance 29 times, we will try and try and try again to show the industry that we are with them.” Rush continued saying we are Congress is showing the industry that they are “standing shoulder to shoulder with them, not to be divided by the plight or affairs of Americans’ publics health.”  Rush concluded wondering, “Whatever happened to bipartisan legislation?”

 

In his opening statement, Full Committee Chairman Fred Upton (R-MI) expressed his concern about the impact of the proposed EPA regulation on “the future of affordable coal-fired power generation in America,” since he said CCS is not yet available on a commercial scale. Upton stated, “Clearly, there is a “war on coal” being waged by this administration.” Upton then yielded the remainder of his time to Representative David McKinley (R-WV). McKinley described the proposed regulation as “hurting our nation” and “close-minded.” He urged that the regulation is driven by ideology and “should not pass.” 

 

Representative Henry Waxman (D-CA) stated that coal workers are not “victims” of the government. He pointed out that “it is not the government’s fault if a utility decides it is cheaper to use natural gas than coal.” Waxman explained, “That’s what we call economics.” He stated that while we do not have CCS technology available on a commercial scale, “it is a technology we should all want to have” and the industry has no incentive to implement CCS because “that would just be an extra expense.” He outlined two ways to achieve the commercialization of CCS; tax electricity from coal and allocate these funds for research and development, or set standards that provide an incentive for industries to implement CCS.  Waxman concluded his opening statement by chiding the chairman for not holding a hearing on new developments in climate science even though the Democrats have sent 17 letters requesting one.

 

Mark McCullough, Executive Vice President of Generation for American Electric Power (AEP), opened his testimony by saying “AEP has a long history of proactive involvement in environmental stewardship, particularly with regard to reducing its net carbon emissions” and as an example he highlighted “the successful completion of a validation-scale demonstration of the world’s first fully integrated carbon capture and sequestration project.” However, McCullough stated that “based on AEP’s experience and EPA’s own admission, this technology is neither commercially demonstrated nor economically viable for coal-fired electric generation.”  H.R. 6172 “ensures a balanced energy portfolio in which coal is in the mix as a fuel for the future,” McCullough concluded.

 

In his testimony, Eugene Trisko, Attorney at Law on behalf of the United Mine Workers of America, stated that, “H.R. 6172 eliminates the threat to advanced new coal generation posed by EPA’s proposed Carbon Pollution Standards Rule.” The Carbon Pollution Standard for New Power Plants, currently under public comment, is biased, Trisko argues, because “natural gas combined-cycle units could comply without CCS” and the rule is “lumping together these two very different sources of electric generation.” Funding through the Department of Energy (DOE) has not been “adequate to support successful large-scale demonstration of CCS technologies.” Trisko concluded by saying. “Our recoverable coal reserves hold the energy equivalent of the world’s proven oil reserves. The U.S. should pursue policies that will accelerate – not stymie – the full range of advanced coal technologies.”

 

Robert Hilton, Vice President of Power Technologies for Government Affairs for Alstom, testified that CCS technology is not yet commercially available. He introduced Congress to Alstom as “a leader in the field of CCS having completed work on four pilot or validation scale plants and with 10 pilots, validation, and commercial scale demonstration plants in operation, design, or construction worldwide.” He then said, “To date, no CCS technologies have been deployed at commercial scale demonstration size.” There are no suppliers globally that “are willing to make a normal commercial contract for CCS at commercial scale,” but “the technologies being developed by Alstom and others work successfully.” Hilton explained that the regulations proposed by the EPA would be a financial burden and impede a “plant’s ability to compete in the market or even generate electricity.” Hilton concluded, “We know that carbon capture technology works. We need time and support to reach the point of commercial offerings.” 

 

In his testimony, John Voyles, Vice President, Transmission & Generation Services at PPL Corporation, stated PPL Corporation “supports the principles embodied in H.R. 6172.” He explained that while the company is invested in CCS, they do not “believe it is ready for deployment at a scale necessary.” Voyles made the subcommittee that the proposed EPA regulation would cost coal industries to implement as well as decrease profits and that these “penalties” to the coal industry should be considered.  Futhermore, “Carbon storage implications, both technical and legal, are yet to be fully understood and debated to ensure it will be deployable on a commercial scale.”

 

In his testimony, John Christy, Professor and Director at the Earth System Science Center at the University of Alabama in Huntsville, stated that “events, like the recent U.S. drought, will continue to occur, with or without human causation.” He recommended policy be based on observations instead of model results. Christy said, “Widely publicized consensus reports by thousands of scientists rarely represent the range of scientific opinion that attends our murky field of climate research.” Christy recommended that the full range of scientific views be used for policy instead of a consensus. Christy stated that, based on his own datasets, modern warming is not caused by greenhouse gases. He presented figures to support these claims which can be found in the testimony. He suggests that increased carbon dioxide could be beneficial in increasing food production since plants consume it. Christy concluded that we are not “addicted to oil” but “addicted” to the “long-life” that our carbon-based fuels provide.

 

Dan Lashof, Program Director of Climate and Clean Air at the Natural Resources Defense Council (NRDC), opened his testimony by saying, the “NRDC strongly opposes H.R. 6172 because it would prevent EPA from establishing life-saving standards to reduce carbon dioxide emissions from power plants, the largest source of this dangerous pollutant in the United States.” Lashof stated, “January through August, 2012 was the warmest such period ever in the U.S.” He showed a newly released National Aeronautics and Space Administration (NASA) image of the Arctic sea ice at a record low and urged that “what happens in the Arctic doesn’t stay in the Arctic.” As to the claim that the EPA is overreaching in their power to regulate carbon emissions, “two Supreme Court decisions, Massachusetts v. EPA and American Electric Power v. Connecticut¸ confirm that it is EPA’s job under the Clean Air Act as Congress enacted it to protect the American people from carbon pollution from both cars and power plants.”

 

He pointed out that such EPA regulations are meant to regulate pollution and not to favor certain technologies and coal plants should not be an exception. Lashof explained that, “The panel may never be able to make the finding that CCS is economically competitive because the marketplace is already providing cleaner and more competitive alternatives.” Lashof said, “Analysts from government, the power industry, and the financial world all forecast that we will meet electricity needs over the next two decades without constructing new coal-fired plants.” He pointed out that Canada has already passed more stringent carbon emission regulations. In addition, “more than 60 percent of Americans support EPA’s setting carbon pollution standards according to a recent bipartisan poll conducted for the American Lung Association.” Without incentives, Lashof stated, CCS will never be implemented. Lashof addressed the claim that the new regulation would close-down existing plants, “It is just plain false to claim that existing coal plants will be required to meet the new plant standard.” Lashof continued, “The criteria and procedures for new and existing plants are different.” Lashog concluded, “We owe it to our children to act now.”

 

John Thompson, Director of the Fossil Transition Project of the Clean Air Task Force, said in his testimony, “Several coal plants, either under construction or in advanced development, would meet the EPA’s proposed carbon dioxide emission limits using CCS.”  As to setting performance standards, “Carbon dioxide performance standards are needed to gain state public service commission approval for coal CCS projects that would be added to utility’s rate base.” Thompson addressed the feasibility of commercial CCS by saying the “EPA considered technical feasibility and cost of CCS in its draft rule.” He elaborated saying the EPA “addressed the cost in the proposed rule by establishing reasonable emission limits, providing flexibility in how standards could be met by new plants, and by allowing extended compliance deadlines.” Thompson said H.R. 6172 would be detrimental to the coal industry by “creating additional uncertainty about future regulations.” In addition H.R. 6172 is detrimental to domestic oil production because the carbon dioxide could be used to increase enhanced oil recovery (EOR) production since carbon dioxide can be used for EOR. 

 

Representative Whitfield began the question and answer session by asking Voyles if modifying an existing plant will reclassify the plant as new and if so, would the plant be required to comply with the proposed regulations. Voyles answered that they would be reclassified as new. Representative Rush asked the same question to Trisko, who answered that the EPA was “explicit” in stating that the proposed regulations would not apply to modified plants.

 

Rush commented that “coal does not have to harm human health” and asked Thompson to comment on advances in CCS. Thompson replied that much has been accomplished simply by new CCS plants “breaking ground,” but Congress could do more to provide incentives for EOR using carbon dioxide from coal plants. Rush then asked Hilton what the most important things Congress could do to promote CCS are.  He replied, “We need financial support” and “grants do not go far enough” because the price of electricity from CCS coal plants is more expensive. He continued, “Carbon sequestration is not going to happen until we resolve the issue of financial liability.” Lashof commented that the NRDC has supported CCS and reiterated that there are applications and a market “around the world” for CCS and there is “a real need for the U.S. to be a leader in this technology.”

 

Whitfield asked Christy if he participated in the Intergovernmental Panel on Climate Change (IPCC) and if he agrees with the IPCC findings. Christy replied that he has been an author but does not agree with the IPCC findings. Whitfield asked if it is true that “thousands of scientists” all agree “the world is going to hell because of carbon dioxide,” and “how many scientists are there like you?” Christy replied, “It depends on how you define ‘climate scientist.’” Christy continued, “There aren’t very many of us.” Christy said, “Other people like to use the term, you know, have some bleak relationship to how climate might impact something.” Whitfield asked if it is not conclusive that “man-made carbon dioxide is the primary contributor to global warming.” Christy did not answer this question, but referred Whitfield to his figures from his written testimony.  Christy mentioned that a recent Nature article concludes that climate models are insufficient to accurately model the future but did not provide the author.

 

Whitfield asked Voyles what the expense is for most economic CCS technology currently available today for commercialization. Voyles answered that the recent unit they installed in 2011, which received a tax credit, and has been operating for two years is in the $30 to $40 per megawatt range. Representative Gene Green (D-TX) asked Thompson how coal plants plan to comply with the proposed standards. Thompson answered that some states are actually trying to regulate carbon emissions from coal plants and promote CCS, but in states like Illinois it is unlikely they will succeed because of the low price of natural gas. Green then asked how to provide incentives for EOR. Thompson replied, “To use a portion of the tax revenue from new oil development and put that back into subsidizing some of the cost for CCS.” Thompson pointed out that the EPA regulations allow 30 years to comply.

 

Representative Lee Terry (R-NE) asked the panel to comment on the discrepancy between Hilton’s testimony that CCS is “still in progress” and Thompson’s testimony that “they are already building them,” referring to CCS equipped plants. Hilton reiterated that it is currently technologically available and could be commercially available with funding. Hilton said that a coal plant in Kemper County, Mississippi, will utilize CCS but only because they received sufficient funding. Thompson pointed out that the Kemper plant and the Texas Clean Energy Project, which is a facility that is a commercial clean coal power plant, both use pre-combustion capture technology, which has “been around for 30 years—commercially available.” Thompson continued that what Hilton “is talking about is post-combustion capture” and agrees that this type of CCS technology is not available yet. Terry asked Hilton to elaborate on the liability issues which are associated with CCS. Hilton replied there is “liability associated with storing carbon in a reservoir and issues with land ownership where the carbon is stored in the ground. 

 

Representative Mike Doyle (D-PA) asked Hilton how CCS projects are being funded around the world. Hilton answered that the UK government is funding CCS projects. Doyle asked the panel what they thought “would be the best driver for the commercialization of affordable CCS technology.” Doyle continued, “Would it be EPA regulation, a carbon tax, cap-and-trade or something else?” Trisko answered “a wire’s charge approach,” which involves charging power suppliers to fund subsidies, as this would generate $10 billion as a “non-budget” approach. McCullough and Hilton supported Trisko’s suggestion. Voyles agreed and pointed out that the industry is already investing in CCS without regulations and should continue. Thompson recommended implementing standards, subsidizing and incentivizing EOR. Lashof recommended implementing standards as well as supporting CCS development.

 

Doyle brought up the fact that in 2009, Democrats passed a stimulus bill which provided $3.4 billion to CCS and was “49 percent of all the energy funding in the stimulus bill” which republicans “smeared, denigrated and misaligned.” Doyle continued, “Also in 2009 we took up a cap-and-trade bill which had $60 billion for CCS funding as well as the $10 billion in wire charges that Mr. Trisko referred to in his testimony.” Doyle went on, “That bill was smeared, denigrated and misaligned on this House floor.” Doyle expressed his frustration that the same people who are arguing that the technology is not commercially available are the same people who voted against funding CCS technologies.

 

Representative David McKinley (R-WV) pointed out that Democrats have voted to cut EOR funding. In addition, he suggested that oil companies pay for CCS technology since “they will be the ones that benefit” from EOR. McKinley asked Lashof if he was aware that carbon dioxide emissions have reached a 20-year low. Lashof responded that he was and pointed out that carbon dioxide levels in the atmosphere are still climbing. Lashof continued, “The U.S needs to provide leadership” in stabilizing the atmospheric carbon dioxide. McKinley responded, “I think you said that was the main culprit of global warming.” Lashof agreed, “Carbon dioxide traps heat in the atmosphere. It would be remarkable if it wasn’t causing warming.” McKinley asked if he disagreed with the statement that “this is the greatest pseudo-science fraud perpetrated on America.” Lashof said he did. McKinley pointed out that other scientists think global warming is being used for “other purposes.”

 

McKinley asked if Lashof is aware that Milutin Milankovitch predicted the current recent trend of warming would be occurring right now. Lashof replied that he was aware of Milankovitch cycles, but that carbon dioxide has become “a much bigger factor influencing climate than Milankovitch cycles.” Lashof said, “If we predicated policy on unanimity among scientists on any issue we would never do anything.” McKinley pointed out that this statement admits that the climate science is “still up in the air.” Lashof replied that it does not and explained, “There is not unanimity among scientists and there won’t be.” Lashof continued, “The National Academy of Sciences has said that ‘the idea that carbon dioxide is contributing to climate change is as well proven as gravity.’” Lashof concluded that that is “a strong basis for making policy.”

 

Representative Ed Markey (D-MA) quoted the American Geophysical Union’s 2003 statement on climate change, “Scientific evidence strongly indicates that natural influences cannot explain the rapid increase in global near-surface temperatures observed during the second half of the 21st century." Representative Morgan Griffith (R-VA) pointed out that even if the U.S. decreased emissions, this decrease would be negligible given the increases in emissions as other countries such as India or China develop. He argued that while decreasing emissions in the U.S. would be negligible, increasing utilities bills for the people of America would not, and the EPA regulations would be effectively “taking our economy and throwing it in the trash can.”

 

Opening statements, witness testimonies and an archived webcast of the hearing can be found on the House Committee on Energy and Commerce web site.