[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
CLIMATE CHANGE: PREPARING FOR THE ENERGY TRANSITION
=======================================================================
OVERSIGHT HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
OF THE
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
Tuesday, February 12, 2019
__________
Serial No. 116-3
__________
Printed for the use of the Committee on Natural Resources
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Committee address: http://naturalresources.house.gov
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COMMITTEE ON NATURAL RESOURCES
RAUL M. GRIJALVA, AZ, Chair
DEBRA A. HAALAND, NM, Vice Chair
GREGORIO KILILI CAMACHO SABLAN, CNMI, Vice Chair, Insular Affairs
ROB BISHOP, UT, Ranking Republican Member
Grace F. Napolitano, CA Don Young, AK
Jim Costa, CA Louie Gohmert, TX
Gregorio Kilili Camacho Sablan, Doug Lamborn, CO
CNMI Robert J. Wittman, VA
Jared Huffman, CA Tom McClintock, CA
Alan S. Lowenthal, CA Paul A. Gosar, AZ
Ruben Gallego, AZ Paul Cook, CA
TJ Cox, CA Bruce Westerman, AR
Joe Neguse, CO Garret Graves, LA
Mike Levin, CA Jody B. Hice, GA
Debra A. Haaland, NM Aumua Amata Coleman Radewagen, AS
Jefferson Van Drew, NJ Daniel Webster, FL
Joe Cunningham, SC Liz Cheney, WY
Nydia M. Velazquez, NY Mike Johnson, LA
Diana DeGette, CO Jenniffer Gonzalez-Colon, PR
Wm. Lacy Clay, MO John R. Curtis, UT
Debbie Dingell, MI Kevin Hern, OK
Anthony G. Brown, MD Russ Fulcher, ID
A. Donald McEachin, VA
Darren Soto, FL
Ed Case, HI
Steven Horsford, NV
Michael F. Q. San Nicolas, GU
Vacancy
Vacancy
Vacancy
David Watkins, Chief of Staff
Sarah Lim, Chief Counsel
Parish Braden, Republican Staff Director
http://naturalresources.house.gov
------
SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
ALAN S. LOWENTHAL, CA, Chair
PAUL A. GOSAR, AZ, Ranking Republican Member
Mike Levin, CA Doug Lamborn, CO
Joe Cunningham, SC Bruce Westerman, AR
A. Donald McEachin, VA Garret Graves, LA
Diana DeGette, CO Liz Cheney, WY
Anthony G. Brown, MD Kevin Hern, OK
Jared Huffman, CA Rob Bishop, UT, ex officio
Vacancy
Raul M. Grijalva, AZ, ex officio
----------
CONTENTS
----------
Page
Hearing held on Tuesday, February 12, 2019....................... 1
Statement of Members:
Cunningham, Hon. Joe, a Representative in Congress from the
State of South Carolina, prepared statement of............. 74
Gosar, Hon. Paul A., a Representative in Congress from the
State of Arizona........................................... 5
Lowenthal, Hon. Alan S., a Representative in Congress from
the State of California.................................... 1
Prepared statement of.................................... 4
Statement of Witnesses:
Bissett, Bill, President and CEO, Huntington Regional Chamber
of Commerce, Huntington, West Virginia..................... 19
Prepared statement of.................................... 20
Dennison, Brandon, Founder and CEO, Coalfield Development,
Huntington, West Virginia.................................. 31
Prepared statement of.................................... 32
Farley, Chandra, Director, Just Energy, Partnership for
Southern Equity, Atlanta, Georgia.......................... 8
Prepared statement of.................................... 10
Hille, Peter, President, MACED, The Mountain Association for
Community Economic Development, Berea, Kentucky............ 22
Prepared statement of.................................... 23
Mason, Joseph, Professor, Department of Finance, Louisiana
State University, Baton Rouge, Louisiana................... 38
Prepared statement of.................................... 40
Shrader, Sarah, Owner and Co-Founder, Bonsai Design;
President, Outdoor Recreation Coalition of the Grand
Valley, Grand Junction, Colorado........................... 14
Prepared statement of.................................... 15
Additional Materials Submitted for the Record:
List of documents submitted for the record retained in the
Committee's official files................................. 83
Submission for the Record by Rep. Cheney
Overview and FAQs, Green New Deal........................ 62
Submissions for the Record by Mr. Dennison
Forbes article, ``Solar Employs More People In U.S.
Electricity Generation Than Oil and Gas Combined,'' by
Niall McCarthy, January 25, 2017....................... 82
Statement in Response to Dr. Mason....................... 83
Submissions for the Record by Rep. Gosar
Financial Times article, ``China's demand for electric
vehicles charges copper,'' February 12, 2019........... 75
Financial Times article, ``Australia hopes to cash in on
new cobalt rush,'' February 12, 2019................... 76
Submission for the Record by Rep. Graves
January 2019 Electricity Prices by State................. 58
Submission for the Record by Rep. Lowenthal
Energy Jobs--Current Employment Statistics from the
Bureau of Labor Statistics, February 13, 2019.......... 80
OVERSIGHT HEARING ON CLIMATE CHANGE: PREPARING FOR THE ENERGY
TRANSITION
----------
Tuesday, February 12, 2019
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources
Committee on Natural Resources
Washington, DC
----------
The Subcommittee met, pursuant to notice, at 10:03 a.m., in
room 1324, Longworth House Office Building, Hon. Alan S.
Lowenthal, [Chairman of the Subcommittee] presiding.
Present: Representatives Lowenthal, Levin, Cunningham,
Brown, Huffman, Gosar, Lamborn, Westerman, Graves, Cheney, and
Hern.
Also present: Representatives Case and Neguse.
Dr. Lowenthal. Welcome, everybody. We are now in the first
Energy and Mineral Resources Subcommittee in the 116th
Congress. I want to welcome everyone. I am really looking
forward to all of us working together.
The Subcommittee is meeting today to hear testimony on
climate change and preparing for the transition to a clean
energy economy. This is where we are starting from today.
Under Committee Rule 4(f), any oral opening statements at
hearings are limited to myself as the Chairperson and the
Ranking Minority Member, or my dear friend, Mr. Gosar.
I ask unanimous consent that all other Members' opening
statements be made part of the hearing record if they are
submitted to the Subcommittee Clerk by 5 p.m. today.
Hearing no objection, so ordered.
STATEMENT OF THE HON. ALAN S. LOWENTHAL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Dr. Lowenthal. To begin with, I would like to thank my
partner and congratulate Ranking Member Gosar on his
Subcommittee leadership position. We have developed a good
relationship. I served as the Ranking Member with Mr. Gosar
previously, and I found it very positive. I think we work very
well together--not always agreeing on things, but we work
together well on things. We also have mutual likes--tamales,
coffee--as I just took some, as well as opportunities to work
together on this Subcommittee. I look forward to sharing with
the members of this Committee ways on how we can work together.
I am going to mention one of those things in the statement.
I think--I haven't checked with anyone in the Capitol, the
historians, but I think this is the only Subcommittee with both
the Chair and the Ranking Member who are doctorates but don't
have a doctorate in juris prudence. You know, we are a
psychologist and a dentist. Exactly what the Congress needs at
this moment is a psychologist.
Before I turn to the topic of today's hearing, I want to
emphasize that, even though we are not going to have any
shortage of policy disagreements on this Subcommittee, it is my
intention to run it in ways that keep discussions thoughtful
and respectful, based upon facts, not putting people down, and
with an eye to wherever we can find agreement, let's go for it.
If we can't find agreement, let's respect each other and
understand that.
This Subcommittee is going to have a tremendously important
role in our country's debate over energy and climate. I know it
is doubted by some of my colleagues. I think that is their
position where they are starting, not all, who say we have no
jurisdiction over climate change and no reason to discuss it.
Well, I totally disagree with that point of view, and I think
that is just not right.
In addition to the tremendous impacts from climate change
that are affecting our public lands, these lands are
responsible for nearly one-quarter of the Nation's greenhouse
gas emissions, which we have jurisdiction over. They are also
home to some of the best renewable resources in the country, if
not on this planet, which we have jurisdiction over. We are
talking about geothermal. We are talking about large-scale
solar. We are talking about major offshore wind which is
beginning to become a reality.
Managing our Nation's vast energy resources, addressing the
health and the environmental impacts of energy production, and
understanding the role of public lands in mitigating climate
change are just some of the issues we will discuss.
I want this Subcommittee to be a forum where we can discuss
these issues and develop solutions that have the buy-in from
the communities across the country, because we are really
talking about beginning to embark on an adventure where we will
not solve it all here. We have to have buy-in from our
communities.
In the coming weeks, I look forward to meeting with
individuals on this Subcommittee to get to know them, to
discuss your goals and priorities. But I have also talked to my
Ranking Member about maybe periodic--maybe once a quarter--
having an off-the-record, informal, no press, no public
prepared statements way of getting to know each other, whether
they are round tables we could find someplace, where we can
really hear each other's story. What are you passionate about?
What do you want to do? Why are you here?
The more you know each other's story, the more difficult it
is to dehumanize in this situation. We have enough differences
that we don't need to dehumanize each other in that process. We
need to hear and respect where people are coming from. Plus, it
makes it the most enjoyable parts of a committee if we kind of
know the other members and why they are here and what they--it
makes the formal aspects, which we will be focusing on, more
interesting to do and more fun.
So, when I meet with you individually, I want to ask about
some--we are not going to do a lot of them. We are going to do
some where it is off the record, folks. You come when you want
to come. You don't prepare anything. You want to share who you
are and who you are in relationship to some of these issues
that are important to you and your community, not to the
committee or to anybody else.
I really look forward to that. And plus, Paul said he is
going to help us with making sure we have the tamales and
coffee. So, we are going to work on that.
I would also like to give a warm welcome to our witnesses
and thank them for testifying this morning. This month, in the
entire Natural Resources Committee, we are discussing the
impacts of climate change, whether it is tribes we are talking
about, oceans, national parks, forests, wildlife. All of these
are seeing huge consequences, and I think from most people's
perspective, the worst is yet to come.
There must be changes in how we produce and use energy in
this country. And there is no doubt that a transition away from
fossil fuels to zero-emission energy sources is essential if we
are to leave a recognizable world for our grandchildren and
great-grandchildren. They are usually not at the table. But
these are issues that they have to be considered at the table
from now on, that anything that we do has to understand how it
is going to have that impact.
I think this transition has to happen quickly. My
colleagues on the other side of the aisle may not feel the same
urgency. That is why we have different--not that they are any
different, but they may not feel the same urgency. They may not
worry or they may have different concerns about the disruption
of jobs and what this means for the economy or that their local
economies will be greatly affected or it doesn't really impact
them as much.
I hope in using science and listening to each other, that
we grow more, that we come closer in looking at we don't have a
lot of time. Time is not on our side, and we need to figure out
what we can work together on and how we can move forward.
One of the things I think we all are going to agree upon is
the need to help the people that are most impacted by that
transition, that there are different parts of the country that
are going to be impacted the most. And we don't want to leave
people out of that transition, and what is happening is not
new. We have already gone through--in 1943, we had over half a
million coal miners in the country; 130,000 in West Virginia
alone. And for decades, Appalachia and workers and families
that call this region home supplied the United States with coal
that kept the lights on, powered the world's largest economy,
and were instrumental in winning World War II and protecting
democracy. So, we are talking about something that is part of
the Nation's fabric.
But today, there are barely one-tenth as many coal mining
jobs. It has not been due to government policies. It is because
of the sense of the economics that is going on, automation that
is going on and other alternatives. But the cause of it is
irrelevant. What is really relevant, I think right now, not
that it is all irrelevant in the causes because it is not. But
the real thing is the effect that there are out-of-work coal
miners. Their families are unsure of what they are going to do
for a living. Whole communities are practically vanishing, and
if we use as the mantra the solution is to provide false hope
that there is going to be a resurrection of coal, we are not
doing our responsibility. We are not acting responsibly.
The solution is going to be to provide new opportunities
for these workers and new options for towns to grow and thrive.
As we move toward clean energy, other regions of the country
are going to be impacted in a different way, and we are going
to have to understand how we are going to deal with that. Some
areas are already preparing for this.
Wyoming, a major coal-producing state in the Nation, just
recently released an ambitious 20-year plan to diversify their
economy and to reduce the state's over-reliance on coal. We do
have doubters and those that think we should be doubling down
now on fossil fuel. I think personally that is a recipe for
even more hardship if we double down, whether it is because of
climate change, resource depletion, or normal boom-or-bust
cycles of fuel prices. Putting all your chips on fossil fuels I
think now is a bad bet, and we need to at least address those
issues. We need to support American communities and workers
with the same effort and urgencies that we need to confront
climate change. And I think that there is one sense that we are
hearing is there is an urgency to what we do, and we have to
deal with that.
Thank you. And I will assure you in the future I will not
talk this long.
[The prepared statement of Mr. Lowenthal follows:]
Prepared Statement of the Hon. Alan S. Lowenthal, Chairman,
Subcommittee on Energy and Mineral Resources
The Subcommittee on Energy and Mineral Resources will come to
order. Good morning, and welcome to the first Energy and Mineral
Resources Subcommittee hearing in the 116th Congress.
The Subcommittee is meeting today to hear testimony on climate
change and preparing for the transition to a clean-energy economy.
To begin, I'd like to congratulate Ranking Member Gosar on his
Subcommittee leadership position. We've developed a good working
relationship over the past few years, in Congress and on this
Subcommittee. We have already sat down together to discuss our mutual
love for tamales, coffee, as well as opportunities to work together on
this Committee. I look forward to talking to you more on our shared
priorities and ways we can work together moving forward.
I haven't actually checked this, but I believe this is the only
committee or subcommittee in the House with a Chair and Ranking Member
with Doctorates other than a JD. I don't know about you, but I think
what the country needs now is a psychologist and a dentist.
Before I turn to the topic of today's hearing, I want to emphasize
that even though we will have no shortage of policy disagreements on
this Subcommittee, it's my intention as Chairman to run this
Subcommittee in a way that keeps the discussion thoughtful and
respectful, based on facts, and with an eye toward finding agreement
whenever possible.
We have moved a number of bills through this Subcommittee on a
bipartisan basis in the last two Congresses, and I want to thank
Ranking Member Gosar for working with our side on many of those bills,
and I intend to continue and build on that cooperation in this
Congress.
This Subcommittee has a tremendously important role in our
country's debate over energy and climate. I know this is doubted by
some of my colleagues on the other side, who say we have no
jurisdiction over climate change and no reason to discuss it. That is
flat-out wrong.
In addition to the tremendous impacts from climate change that are
affecting our public lands, those lands are responsible for nearly one-
quarter of this country's greenhouse gas emissions. They also are home
to some of the best renewable resources in this country, from
geothermal to large-scale solar to offshore wind.
Managing our Nation's vast energy resources, addressing the health
and environmental impacts of energy production, and understanding the
role of public lands in mitigating climate change are just a few of the
critical issues we will discuss.
I want this Subcommittee to be a forum where we discuss these
issues and develop legislative solutions that have the buy-in from
communities across the country.
In the coming weeks I look forward to sitting down individually
with each member of this Subcommittee, from both parties, to get to
know them and discuss their own goals and priorities in Congress and in
this Subcommittee.
I would also like to hold periodical, off-the-record, roundtables
with the members of the Subcommittee to help foster frank and honest
conversation to help all of us understand each other's approach,
interest, and, priorities.
Finally, I want to give a warm welcome to our witnesses and thank
them for testifying this morning.
This month in the Natural Resources Committee we are discussing the
impacts of climate change. Tribes, oceans, national parks, forests, and
wildlife are already seeing huge consequences, and unfortunately worse
is yet to come.
There must also be changes in how we produce and use energy in this
country.
There is no doubt that a transition away from fossil fuels to zero-
emission energy sources is essential if we are to leave a recognizable
world for our grandchildren, our great-grandchildren, and beyond.
I believe this transition must happen quickly. My colleagues on the
other side may not feel the same urgency. Whether this is because of
the worries over disruption of jobs and their local economies or
something else entirely, I hope the scientists, and storms, and floods,
and climate refugees convince them there is no time to waste. I assure
you--we can push for a zero-carbon energy future and have economic
growth.
One thing we certainly agree on is the need to help people who may
be left behind or left out as this transition occurs.
This is not new. In 1941, there were nearly 550,000 coal miners in
this country, with roughly 130,000 in West Virginia alone.
For decades, Appalachia and the workers and families that call this
region home supplied the United States with the coal that kept the
lights on and powered the world's largest economy. Appalachian coal
miners were instrumental in winning World War II.
Today, there are barely one-tenth as many coal mining jobs. This
hasn't been due to any government policy. It was because of economics
and automation. But the cause is irrelevant. The effect is thousands of
out-of-work coal miners, families unsure what their children will do
for a living, and whole communities practically vanishing.
The solution to this is not to provide false hope that there will
be a resurrection of coal. The solution is to provide new opportunities
for workers and new options for towns to grow and thrive.
As we make the necessary transition to clean energy, other regions
and other workers will face some of the same challenges. We cannot
simply sit back and watch. We must take actions to help those who may
be hurt.
Some areas are already preparing. Wyoming recently released an
ambitious 20-year plan to diversify their economy and reduce the
state's over-reliance on coal.
Some, however, believe they should double down on fossil fuels and
hope for the best. This is a recipe for even more hardship. Whether
it's because of climate change, resource depletion, or just the normal
boom-and-bust cycle of fuel prices, putting all your chips on black
gold is a losing bet.
We need to support American communities and workers with the same
effort and urgency that we need to confront climate change.
______
Dr. Lowenthal. I now recognize Mr. Gosar for his opening
statement.
STATEMENT OF THE HON. PAUL A. GOSAR, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Dr. Gosar. I thank the gentleman.
And, yes, my good friend Dr. Lowenthal brings a smile every
morning. And as a recovering dentist, I will tell you: A smile
tells me everything I need to know. A smile tells me you are
happy with yourself; you are willing to engage. If you are
willing to engage, you are willing to communicate. If you are
willing to communicate, you can solve a problem. So, if you
want to solve a problem, smile.
So, thank you again, and thank the witnesses for being
here.
Before I get into my opening statement, Mr. Chairman, I
would like to reflect on the Majority's non-compliance with
Committee Rule 4(c) by failing to provide a public memo on the
scope of today's hearing. Without a memo, the public is kept in
the dark and members of this Committee are unable to prepare
for an informed debate. I ask my Democratic colleagues to
please return to a transparent process so that we can do the
deliberative work of this body in a more effective manner.
I think my colleagues on both sides of the aisle would
agree that legislating shouldn't be done in the dark.
Now, for the matter at hand. The title of this hearing,
``Climate Change: Preparing for the Energy Transition,''
implies our country is on the cusp of a sweeping transformation
into a green economy and that communities with vibrant energy
economies today should be planning accordingly. This
implication is manifested by the dramatic socialist resolution
that was introduced last week, the Green New Deal. This
proposal calls for net-zero emissions in the next 10 years
through Federal mandates, 100 percent clean and renewable
energy, a phaseout of plane travel. And according to the bills
accidentally uploaded frequently asked questions, guaranteed
economic security for all those unable or unwilling to work.
This is just what it sounds like: a socialist fairytale
right up there with ``if you like your healthcare plan, you can
keep it.''
Let me be clear. Though the Green New Deal may not be our
primary topic today, the Majority will see this hearing to
bolster the case for why and how we can replace 6-figure energy
jobs with bioenergetic hemp farms and wind-powered coffee shops
through a Federal takeover of the country.
Indeed, many members of this Committee have co-sponsored
this radical resolution, including the Chairman of the
Committee, Mr. Grijalva, as well as my friend and Chairman of
this Subcommittee, Mr. Lowenthal, and fellow Subcommittee
members, Mr. Huffman and Mr. Neguse.
We will hear testimony today from several witnesses
regarding their efforts to create jobs in the Appalachia and
the Mountain West outside of the fossil fuel industry. I
appreciate their efforts and their commitment to getting
Americans back to work, particularly after so many Americans
were laid off from their high-paying energy jobs after the
regulatory assault of the previous administration.
I do believe there are wonderful opportunities that can
help regions that are dependent on traditional sources to
diversify their economies and to prevent devastation afflicting
regions like Appalachia due to failed Federal mandates.
Despite what the Majority's intent with this hearing, I
want to assure the American people about our energy economy and
its importance for the foreseeable future. From the 10.3
million jobs in the United States supported by the oil and gas
economy to the geopolitical certainty we can provide our
European, Asian, and other allies, and to continued domestic
investments, such as ExxonMobil's announcement last week of a
$10 billion LNG export facility in Texas, conventional energy
sources have played an overwhelmingly positive role in defining
our country. Innovation in these fields has reduced emissions.
At the same time, production has increased. Moreover, energy
demand in the United States and around the world is strong. The
void left by America would be filled by opportunistic countries
with far worse environmental standards if the United States
exited the conventional energy market. Even saying that, these
words feel ridiculous, but these are strange times.
Let's take a moment to talk about what a green economy
really means. If I may borrow a term, an inconvenient truth
about renewable energy is a need for vast amounts of critical
minerals and rare earth elements to make them work. For
example, wind power requires neodymium and dysprosium, and
demand for these minerals is expected to go up by 700 percent
to 2,600 percent, while solar panels rely almost solely on
minerals the United States currently imports from countries
like China, despite being a Nation blessed with many of the
resources that can be mined here.
In the last several years, America has experienced an
energy renaissance. U.S. natural gas, oil production and
exports are at record levels. In 2017, the United States also
led the world in carbon emissions reductions. This occurred
because of American ingenuity and in spite of anti-energy
policies of the previous administration and seemingly the
agenda of the new House Majority.
Delusional Federal mandates proposed in the Green New Deal
will only topple America's dominance in the energy economy,
creating unemployment, high energy costs, and weakening our
position globally. It would be a mass tax and a mass
displacement of the poorest among us.
My Democratic colleagues in the past have claimed to
support an all-the-above energy strategy. It turns out this was
just an election year talking point as many now wage war on
nuclear energy, natural gas, and even hydropower.
The irony with the Green New Deal's facts page proposing an
end to the use of nuclear energy is nuclear energy is one of
the cleanest and most reliable sources in America.
I am glad we are able to highlight the good work our
witnesses are doing back in Appalachia and across the country.
But we should be discussing ways to remove red tape, empower
job creators, pursue innovative technologies that bolster our
strong status as the leader in emissions reductions. If the
Majority has their way and the policies of the green dream
somehow are magically enacted, then the economic plight of
Appalachia will be a microcosm of the rest of our great Nation.
And, with that, Mr. Chairman, I yield back.
Dr. Lowenthal. Thank you. And I take it you won't be a co-
sponsor.
Dr. Gosar. No, I don't think so. You can probably take that
to the bank.
Dr. Lowenthal. Thank you, Paul.
Now, I would like to introduce today's witnesses.
But first I would like to ask unanimous consent for
Congressman Case and Congressman Neguse to sit on the dais and
participate in this morning's hearing.
Hearing no objections, so ordered.
I am going to introduce our first witness. First, we have
Chandra Farley. Ms. Farley is the director of Just Energy, the
Just Energy program for the Partnership for Southern Equity.
Our second panelist is Sarah Shrader. Ms. Shrader is the
owner and co-founder of Bonsai Design and the president of the
Outdoor Recreation Coalition of the Grand Valley.
Next, we have Dr. Bill Bissett. Dr. Bissett is the
president and the CEO of the Huntington Regional Chamber of
Commerce.
Our fourth witness is Peter Hille. Mr. Hille is the
president of the Mountain Association for Community Economic
Development.
Our fifth witness is Brandon Dennison. Mr. Dennison is the
founder and the CEO of Coalfield Development Corporation.
And, finally, we have Dr. Joseph Mason. Dr. Mason is a
professor in the Department of Finance at the Louisiana State
University.
Let me remind our witnesses that, under our Committee
Rules, they must limit their oral statements to 5 minutes but
that their entire statement will appear in the hearing record.
When you begin, the lights on the witness table in front will
turn green. And then, after 4 minutes, the yellow light will
come on. Your time will then have expired after 1 more minute
when the red light comes on, and I will ask you to please
complete your statement.
I am also going to allow the entire panel to testify before
Members up here on the dais begin questioning.
I will now recognize Ms. Farley to testify. Welcome.
STATEMENT OF CHANDRA FARLEY, DIRECTOR, JUST ENERGY, PARTNERSHIP
FOR SOUTHERN EQUITY, ATLANTA, GEORGIA
Ms. Farley. Thank you.
Honorable Chairman Lowenthal, Ranking Member Gosar, and
members of the House Subcommittee on Energy and Mineral
Resources, thank you for inviting me here today.
My name is Chandra Farley, and I am the Just Energy
director at the Partnership for Southern Equity based in
Atlanta, Georgia. I am honored to provide this testimony in
support of a just and equitable transition to the clean energy
economy.
We know with data-informed certainty that systematically
disenfranchised under-resourced communities and communities of
color in the South bear a disproportion burden of the negative
impacts of the changing climate and carbon-based energy
production. Three of the top five biggest carbon polluters are
in the South. This is compounded by the fact that four southern
cities, Memphis, Birmingham, Atlanta, and New Orleans, hold the
greatest energy burdens for low-income households but face the
greatest barriers to weatherization assistance and energy
efficiency programs that can reduce these high burdens.
Also, the Southeast region serves as home to 84 percent of
all U.S. counties that experience persistent poverty. This is
defined as a county in which at least 20 percent of the
population experiences poverty for three decades or more. Pile
on the fact that the South experiences a higher frequency of
billion dollar weather and climate disaster events than any
other region, we can begin to contextualize the constant
struggle and mounting barriers that historically marginalized
communities face in this era of changing climate and rapid
energy transition.
Despite bearing an inequitable portion of negative impacts
due to climate change and carbon-based energy production,
disenfranchised communities are virtually unrepresented in the
energy planning and decision-making processes that drive
inequitable outcomes in energy regulation, distribution, and
policy.
While unfamiliar to many citizens, these policies
significantly impact household economic stability and impinge
upon the overall quality of our air, water, and other natural
resources that affect our health and well-being.
Directly related to the health and well-being stressors of
carbon-based energy production is the rising cost of energy.
The resulting energy burden or percentage of household income
spent on energy bills is a crippling financial burden for
working families. According to the American Council for Energy-
Efficient Economy, the energy burden on African American and
Latino households with lower incomes is up to three times as
high as others.
When you consider that the median energy burden in the
ACEEE sample was 3.5 percent, we can see the paralyzing effects
of increasing energy costs on many families' ability to thrive.
With eliminated funding for weatherization assistance programs
and financial barriers to cost-saving energy efficiency
upgrades, the mounting cost of energy bills translate to
unimaginable choices for our working families and senior
citizens. Do you pay the light bill and go without your
medicine, or do you buy groceries or heat your home?
Collectively, these conditions stem from the underlying
forces of structural and institutional racism that are embedded
in our land use policies and energy systems. From the siting of
carbon-based energy production facilities and the resulting
negative health impacts to the disproportionate burden of
rising energy costs on low-wealth communities, these societal
barriers have hampered the opportunity for marginalized
communities to lend their perspective to the shaping of their
clean energy future and fully benefit from rapidly expanding
clean energy markets. For instance, only 7 percent of solar
workers in 2017 were African American while the percentage of
solar workers in the United States grew 168 percent since 2010
according to The Solar Foundation.
Against the backdrop of global climate change, these
disparities have driven equity and justice to the forefront of
the energy transition conversation and made Just Energy a top
priority. When utilized as a framework for mobilizing advocacy
around energy equity issues, Just Energy represents an equity
ecosystem of frontline communities, subject-matter experts,
houses of worship, youth movements, and academia organizing
together to ensure that the benefits of a clean energy economy
include fair prices, freedom from negative health impacts, and
access to thriving wage employment. We believe that this
approach is central to the energy equity movement and that the
future of our communities is dependent upon collective action
toward an equitable inclusive just energy future for all.
Thank you.
[The prepared statement of Ms. Farley follows:]
Prepared Statement of Chandra Farley, Just Energy Director, Partnership
for Southern Equity
We know with data-informed certainty that systematically
disenfranchised, under-resourced communities and communities of color
in the South bear a disproportionate burden of the negative impacts of
the changing climate and carbon-based energy production. Three of the
top five biggest carbon polluters in the power sector are in the South
where investments in consumer-directed clean energy continue to lag.
This is compounded by the fact that four southern cities--Memphis,
Birmingham, Atlanta and New Orleans, hold the greatest energy burdens
for low-income households but face many barriers to the energy
efficiency programs that can reduce these high burdens. Also, the
Southeast regions serve as home to 84 percent of all U.S. counties that
experience persistent poverty (defined as a county in which at least 20
percent of the population experiences poverty for three decades or
more). Pile on the fact that the South experiences a higher frequency
of billion-dollar weather and climate disaster events than any other
region, we begin to contextualize the constant struggle and mounting
barriers that historically under-resourced and marginalized communities
face in this era of changing climate and energy transition.
Despite bearing an inequitable proportion of negative impacts due
to climate change and carbon-based energy production, disenfranchised
communities are virtually unrepresented in the energy planning and
decision-making processes that drive inequitable outcomes in energy
regulation, distribution and policy. While unfamiliar to many citizens,
these policies significantly impact household economic stability and
impinge upon the overall quality of our air, water and other natural
resources that affect our health and well-being. This is evidenced by a
report from the NAACP noting that 68 percent of African-Americans live
within 30 miles of a coal-fired power plant. In addition to lower
property values, proximity to these coal plants carries health risks
such as increased infant death, heart disease, lung disease, asthma
attacks and asthma associated deaths. Plus, the disproportionate
impacts reach the healthcare and education sectors as emergency room
visits, hospitalizations and missed school days (that leads to missed
work and job insecurity for parents) all increase due to these harmful,
life-threatening emissions.
Adding to the worsening impacts of climate change is carbon-based
energy production. Climate change pressures on the energy system result
in increased demand for electricity as heatwaves worsen, power failures
caused by storms and flooding increase and system failures and
inefficiencies caused by extreme heat mount. These shocks and stressors
are exacerbated by the destruction of local economies due to short-
sighted, extractive practices by the coal, oil and gas industries. With
fossil fuels still supplying nearly two-thirds of the United States'
electricity, the increased demand will increase the carbon emissions
that disproportionately impact marginalized communities.
Directly related to the health and well-being stressors of carbon-
based energy production is the rising cost of energy. The resulting
``energy burden,'' or percentage of household income spent on energy
bills, is a crippling financial burden for families with lower incomes.
According to the American Council for an Energy-Efficient Economy
(ACEEE), the energy burden on African-American and Latino households
with lower incomes is up to three times as high as other homes. In my
home state of Georgia, nearly 300,000 households with incomes of below
50 percent of the Federal Poverty Level pay 41 percent of their annual
income for their home energy costs. When you consider that the median
U.S. energy burden across the cities in the ACEEE sample was 3.5
percent, we can see the paralyzing effects of increasing energy costs
on family's ability to thrive. With limited funding for weatherization
assistance programs and financial barriers to cost-saving energy
efficiency upgrades, the mounting costs of energy bills translate to
unimaginable choices for working families and senior citizens. Do you
pay the light bill and go without your medicine? Do you buy groceries
or heat your home?
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Figure 1: City of Atlanta energy burden. Source: Farley, C.,
Garret, C., & O'Neil, M. (2018). Atlanta: Equity and Policy Overview.
Presentation, New York, New York.
Collectively, these conditions stem from the underlying forces of
structural and institutional racism that are embedded in our land-use
policies and energy systems--from the siting of carbon-based energy
production and the resulting negative health impacts, to the
disproportionate burden of rising energy costs on under-resourced
communities and communities of color. Against the backdrop of global
climate change, a reckoning with the South's history of racial
inequality is driving equity and justice to the forefront of the energy
transition narrative.
In order to frame the intersection of race and energy and act on
the resulting inequitable impacts, the Partnership for Southern Equity
(PSE) created the Just Energy Initiative to focus on energy equity.
Founded in 2008, PSE was established to advance policies and
institutional actions that promote racial equity and shared prosperity
for all in the growth of metropolitan Atlanta and the American South--a
region riven by racial, economic and class disparities. While equal
rights under the law, or equality, have afforded many opportunities to
those previously denied ``certain unalienable rights,'' an equity
agenda works to combat these disparities and advance just and equitable
outcomes that are sensitive to the needs and circumstances of
disenfranchised populations. As one of four strategic focus areas
including equitable development, economic inclusion and health, PSE
defines ``energy equity,'' or Just Energy, as the fair distribution of
the benefits and burdens from energy production and consumption.
Utilized as a framework for mobilizing advocacy around energy equity
issues, individuals, businesses and organizations representing
frontline communities, subject-matter experts, houses of worship, youth
movements and academia are working together and organizing to forge
collective action toward a more equitable, inclusive, clean energy
future for all.
Certainly, advocacy for energy equity and climate justice issues
focused on the South are gaining an increasing amount of attention in
the public, private and philanthropic sectors. However, our frontline
communities must quickly learn to advocate on their own behalf as many
traditional environmental conservation institutions struggle to make
inroads because they often lack the cultural competency to
authentically confront the South's history of racial supremacy and
exploitation. Centuries of oppressive power structures have stifled
even modest attempts by communities of color to organize, generating an
inherent mistrust of anyone seeking to do so even within communities
much in need of advocacy. These societal barriers have hampered the
opportunity for marginalized communities to lend their perspective to
the shaping of their clean energy future and fully benefit from rapidly
expanding clean energy markets. For instance, only 7 percent of solar
workers in 2017 were African-American while the percentage of solar
workers in the United States grew 168 percent since 2010 according to
The Solar Foundation. On the deployment of solar technology itself, a
report published in the Nature Sustainability journal found that census
areas with over 50 percent African-American or Hispanic populations
have close to 40 percent less solar panel installations than white-
majority census tracts, even when controlling for household income.
These examples further demonstrate the impact of societal barriers on
the ability of marginalized Americans to access clean energy benefits
such as lower bills, more jobs and cleaner air.
By highlighting the inequities present across the energy sector and
connecting the dots between energy, racial injustice, economic
disinvestment, health disparities and other associated equity
challenges, PSE has been able to organize with community to channel
their civic power for energy equity advocacy. Strengthened by the deep
relationships resulting from the organizing as well as education and
engagement, coalition building and leadership development offerings,
PSE is building a ``Southern Equity Ecosystem'' positioned to connect,
educate, and build power with all who support a just and equitable
transformation of the energy sector. A sector that no longer depends on
the extreme extraction of human, natural and economic resources from
distressed communities, but one that supports a regenerative, clean
energy economy rooted in shared principles of social, environmental,
economic and racial justice.
To advance this reality, the Just Energy Circle (JEC) anchored by
PSE was created in 2013. The mission of the JEC is to build power with
communities and encourage participation in developing clean energy
solutions that benefit everyone. The JEC also seeks to inspire new,
diverse, authentic leadership that is recognized in prominent decision-
making positions in both civic and private sectors. We aim to establish
structures that ensure clean energy opportunities are available to all,
including low-income protections, fair prices, freedom from negative
health impacts and access to thriving wage employment. We represent an
equity ecosystem of diverse business, political, and community
representation and interests. We believe that this approach is central
to the energy equity movement and that the future of our communities is
dependent upon ``Just Energy'' for all.
Building upon this vision, the JEC is guided by the following
principles:
We believe that community partnerships are vital for the
equitable progression toward self-sufficient people and
neighborhoods.
We believe in access to high-quality energy at a fair
price for all.
We believe in transformational relationships and
sustainable solutions for ever-pressing issues in the
American South.
We believe in transparency and accountability for energy
providers and policy makers.
We believe that equity is the superior growth model for
the American South.
We believe in honoring the idea that all people must have
a part to play in our emerging clean energy economy.
We believe in utilizing and leveraging a combination of
the best field and scientific research to find the best
energy solutions.
Amplifying the knowledge shared amongst our partners, we work
collaboratively to build political and community capital to champion
the racial, social, environmental and economic benefits that clean
energy investments can produce when centered in equity. Many
organizations committed to advancing more equitable outcomes have
fought hard for national, state and local level climate and energy
policies designed to lower energy costs, strengthen local economies and
build healthier, more resilient communities. However, first and most
impacted communities remain the least likely to benefit from the clean
energy advancements and energy efficiency policies and programs that
can reduce the burden of rising energy costs and offset the harmful
effects of climate change and carbon-based energy production.
As demonstrated by the generational consequences and
disproportionate burdens of energy policy decisions, the South is
undoubtedly on the frontlines of struggles for climate justice,
economic justice, racial justice, and inclusive democratic
participation. Nevertheless, communities spanning from the Gulf Coast
to Appalachia continue to advance equity and opportunity through
education and engagement on energy, climate and environmental justice.
As the subject-matter knowledge base grows across the region, so does
the number of well-informed, first-person advocates prepared to
mobilize for expanded investment in clean energy, energy efficiency and
other renewable energy strategies that support economic development for
low-wealth communities.
Without a doubt, preparing for the energy transition must also
address the harmful, disproportionate impacts of climate change and
carbon-based energy production. Especially in the Southeast, which is
at significant risk to four particular climate change-related hazards:
drought, flooding, hurricane force winds, and sea-level rise. But what
about the energy system itself? How will we truly be able to confront
the systemic disenfranchisement and under-resourcing of communities of
color without addressing the underpinnings of the energy system as a
whole?
Any equity-centered climate solutions strategy must include the
democratization of our energy systems. Energy democracy is a
foundational component of a just and equitable transition from a
carbon-based energy economy to a regenerative, clean energy economy
grounded in racial, economic and social justice. Energy Democracy is
centered on the premise that you can't build a new energy economy on an
old energy model. As discussed in the book, Energy Democracy: Advancing
Equity for Clean Energy Solutions, we must not only champion the
technological strategies that will decarbonize the energy system, but
we must also transform the system itself. Nathaniel Smith, the founder
and Chief Equity of Officer of PSE defines true equity as a way, not a
what. In this vein, we understand that clean energy for all is but one
step on the journey toward a decentralized energy system built upon the
principals of cooperative economics and community-based decision making
for resource allocation. Ultimately, this community-determined, energy
equity ecosystem will strengthen household economic stability and build
healthier, wealthier communities.
Now more than ever, it is time for an intentional expansion of the
South's civic engagement infrastructure to ensure authentic inclusion
at all points of the energy transition. Historically disenfranchised,
under-resourced communities and communities of color are increasingly
hungry to speak and act; not only for transition, but transformation of
the energy system. We stand ready to wield our civic power in demand of
equitable access to the benefits of the clean energy economy. The
future of our communities is dependent upon ``Just Energy'' for all.
resources
2017 Greenhouse Gas (GHG) Emissions from Large Facilities. Retrieved
from https://ghgdata.epa.gov/ghgp/main.do.
ACEEE. (2016). Data Gauge Impact of Energy Costs on Low-Income,
African-American, Latino, and Renter Residents; Low-Income Households
in Memphis, Birmingham, Atlanta, New Orleans, Providence, Pittsburgh,
Dallas, Philadelphia, Kansas City, and Cleveland Suffer Heaviest
``Energy Burden''. Retrieved from https://aceee.org/press/2016/04/
report-energy-burden-low-income.
Billion-Dollar Weather and Climate Disasters: Mapping. Retrieved from
https://www.ncdc.noaa.gov/billions/mapping.
Drehobl, A., & Ross, L. (2016). Lifting the High Energy Burden in
America's Largest Cities: How Energy Efficiency Can Improve Low Income
and Underserved Communities. Retrieved from https://aceee.org/sites/
default/files/publications/researchreports/u1602.pdf.
Fairchild, D., & Weinrub, A. (2017). Energy Democracy: Advancing Equity
in Clean Energy Solutions. Island Press.
FSC's HEAG--Affordability Gap Data. (2017). Retrieved from http://
www.homeenergyaffordabilitygap.com/03a_affordabilityData.html.
National Solar Jobs Census--The Solar Foundation. Retrieved from
https://www.thesolarfoundation.org/national.
Sunter, D., Castellanos, S., & Kammen, D. (2019). Disparities in
rooftop photovoltaics deployment in the United States by race and
ethnicity. Nature Sustainability, 2(1). doi: 10.1038/s41893-018-0204-z.
Oxfam America. (2009). Exposed social vulnerability and climate change
in the US Southeast. Retrieved from https://policy-
practice.oxfamamerica.org/static/oa3/files/Exposed-Social-
Vulnerability-and-Climate-Change-in-the-US-Southeast.pdf.
What is U.S. electricity generation by energy source?--FAQ--U.S. Energy
Information Administration (EIA). Retrieved from https://www.eia.gov/
tools/faqs/faq.php?id=427&t=3.
Wilson, A. (2012). Coal Blooded Putting Profits Before People.
Retrieved from http://www.naacp.org/wp-content/uploads/2016/04/
CoalBlooded.pdf.
Zach, E. (2018). How Persistent Poverty Masks the Reality of Many Rural
Poor. Retrieved from https://caseygrants.org/evn/how-persistent-
poverty-masks-reality-of-many-rural-poor/.
______
Dr. Lowenthal. Thank you very much.
Our second panelist is, as I mentioned, Sarah Shrader. Ms.
Shrader is the owner and co-founder of Bonsai Design and the
President of the Outdoor Recreation Coalition of the Grand
Valley.
Welcome to the Committee.
STATEMENT OF SARAH SHRADER, OWNER AND CO-FOUNDER, BONSAI
DESIGN; PRESIDENT, OUTDOOR RECREATION COALITION OF THE GRAND
VALLEY, GRAND JUNCTION, COLORADO
Ms. Shrader. Chairman Lowenthal, Ranking Member Gosar, and
distinguished members of the Subcommittee, thank you so much
for the opportunity to discuss rural economic change in western
Colorado today.
I live in a town called Grand Junction on the western slope
of the Rocky Mountains. Our community is 74 percent public
lands and is named after the junction of two mighty rivers, the
Gunnison and the Colorado, that flow through the center of our
town. Our valley has been on the leading edge of change that is
playing out in rural communities across the United States.
Like many other rural communities in America, our area has
had a volatile economic history driven largely by the fossil
fuels industry, oil, gas, coal, shale, and uranium. Each wave
of extraction has provided jobs and prosperity only to be
followed by the inevitable bust when commodity prices fall or
policies change.
This boom-and-bust cycle of extraction takes a toll on the
economy and the psyche of our community. It creates a sense of
hopelessness that persists even into new boom cycles because we
are trained to believe that economic prosperity is fleeting and
temporary.
The results over time have been devastating. Our county's
medium household income is $13,000 below the state average and
56 percent of jobs where I live pay less than $17.50 an hour. A
full 22 percent of children live in poverty compared to 15
percent in the state.
An extraction-based economy also inadvertently diminishes
the importance of a college education. The number of kids
graduating high school who obtain any kind of post-secondary
education is 20 percent below the national average. At a time
when companies chase skilled and educated work force, we are at
a significant competitive disadvantage. Yet, the economic
reliance on extraction industries has been changing in Grand
Junction in the past few years. A new trend is emerging as our
community shifts toward diversified employment, an outdoor-
centric identity, a growing university, and an economy that has
the potential to break this insidious cycle of poverty.
In 2004, my family relocated to Grand Junction, and shortly
after, we started our company, Bonsai Design, out of our
basement deploying a small crew to build aerial adventures from
ziplines to challenge courses, aerial playgrounds, and canopy
tours all over North America. Now we are a turnkey operation
with over 50 employees that provides everything from concept
design to engineering, installation, training, inspections and
maintenance, and we even manufacture our own components.
Like many other outdoor rec manufacturers in our community,
we are proud to work with local fabricators, machinists, and
employees that have historically worked for the oil and gas
industry. Our employees and subcontractors have grit, tenacity,
and a strong work ethic, and they love creating outdoor
adventure experiences for people to enjoy for years to come.
Bonsai also works in similar communities which, like ours,
have been long dependent on extraction and are now
diversifying. Our clients are, for example, the Boy Scouts of
America jamboree site in Mount Hope, West Virginia, where we
built 26 Bonsai courses between 2011 and 2013. Our company is
currently working with several municipalities, including the
city of Rocklin, California, in an old quarry, and the city of
Farmington, New Mexico, as well as Pipestem State Park in West
Virginia. These communities are rebranding themselves as
outdoor adventure hubs.
The outdoor recreation industry is a powerhouse economic
force in America at almost 3 percent of the GDP. In Colorado,
it is a $62.5 billion industry employing over 500,000
Coloradans. In our community alone, the outdoor rec industry
contributes over $300 million annually and thousands of jobs.
And rural communities all over the country are realizing the
important role that the outdoor recreation industry could play
in helping their economies thrive.
In addition to providing jobs, the outdoor recreation
industry in Grand Junction is leading efforts to redevelop and
ignite our riverfront on the Colorado River.
Long neglected, the riverfront was populated with
junkyards, old tires and appliances, and an old uranium mill.
We are turning a barren stretch of land into a business park
surrounded by green space, a river recreation area, and an
amphitheater with miles of trails around, a place where
businesses can thrive and residents and visitors can enjoy the
outdoors right in the heart of town.
The irony in a community like ours is that we have focused
below the surface of the land to find economic prosperity, yet
the absolute best part of western Colorado is the access to
public lands and wild spaces for recreation on the surface. In
our community, you can hunt, fish, paddle the rivers, mountain
bike, ski, rock climb and hike within minutes of your front
door. Our community is now looking at outdoor recreation, a
sustainable use for our lands, to drive the economy. The
outdoor recreation industry brings pride and opportunities back
to a community that has struggled for decades.
Essential to this transition is that we protect our public
lands and act swiftly to combat climate change as the economy
in these areas depends on it.
Thank you.
[The prepared statement of Ms. Shrader follows:]
Prepared Statement of Sarah Shrader, Owner and Co-Founder, Bonsai
Design; President, Outdoor Recreation Coalition of the Grand Valley
Chairman Lowenthal, Ranking Member Gosar, and distinguished members
of the Subcommittee, thank you for the opportunity to appear before you
to discuss rural economic change in western Colorado. I live in Grand
Junction, which is the largest community between Denver and Salt Lake
City. This ``Grand Valley,'' in Mesa County, Colorado--with Palisade to
the east and Fruita to the west--is defined by vast red rocks and high
desert vistas, an 11,000-foot snow-capped mesa home to 300 natural
lakes, with the mighty Colorado and Gunnison Rivers flowing through its
heart. The Grand Valley has been on the leading edge of a change that
is playing out in rural communities across the western United States.
economic history on the western slope
Like many other western communities, our area has had an unsteady
economic history throughout the 20th century, driven largely by the
extractive fossil fuels industry. Historically, this industry has been
the core economic driver in our community. This sector of economic
activity has included oil, gas, shale development, coal mining, and the
mining and milling of uranium and vanadium. Each of these waves of
extractive development has provided jobs and prosperity when commodity
prices have been high. Each period of prosperity has been followed by
the inevitable bust when commodity prices fall or policies change. The
damage in lost jobs, income, and associated social problems puts a
tremendous strain on the community. This boom-and-bust cycle of
extraction has taken a toll on not only the economy, but also the
psychology of our community. Bust cycles create a sense of hopelessness
that persists even into boom cycles, because it trains us to believe
that economic prosperity is temporary. Furthermore, the pollution and
other impacts to public land from the extraction industry threaten the
quality of life and environmental attributes that are so closely
connected to our region's emerging economic success as a center for
outdoor recreation and magnet for new industries such as tech or
advanced manufacturing.
The results over time have been devastating. Mesa County's median
household income is $13,000 below the state average. Fifty-six percent
of jobs here pay less than $17.50 per hour. A full 22 percent of
children here live in poverty, compared to 15 percent for the state.
And the cycle is very hard to break. Without quality work force, it's
hard to grow the economy, which makes it hard to improve schools, which
makes it harder to improve the work force. Furthermore, an inadvertent
consequence of dependence on an extraction economy is that it
temporarily diminishes the importance of diverse skill sets and a post-
secondary education. Over time, communities like these end up with
significantly less of the work force having a higher education.
Locally, the number of kids graduating high school who obtain any kind
of post-secondary education is 20 percent below the national average.
In a time when companies chase a skilled and educated work force, we
are at a significant competitive disadvantage.
Like many states in the United States, Colorado's rural areas are
struggling. Rural economies often depend on one industry. If that
industry suffers economically, the entire community is left without a
contingency plan. Sustainable economic success comes from a diversified
economy, and many rural communities across the United States have not
had these opportunities. Businesses are incentivized to grow and
relocate to urban and suburban areas where there is a better work force
and more infrastructure and commerce. But this has left large swathes
of our country, mostly in rural areas, behind.
The economic reliance on extraction industries--and the inevitable
boom-and-bust cycle accompanying it--has been changing here in the past
few years. A new trend is emerging as the Grand Valley shifts toward an
outdoor-centric identity and economy that has potential to break the
insidious cycle of poverty described above.
bonsai design
In 2004, my family relocated to Grand Junction when my husband was
offered a job as an airline captain with a regional airline. Shortly
after, we started Bonsai out of our basement, deploying a small crew in
the field to build aerial adventures, from ziplines to challenge
courses, playgrounds, and canopy tours all over North America. To date,
we've installed more than 500 ziplines, drawing tens of thousands of
adventure seekers each year. We are a turnkey operation, providing
everything from concept design to engineering, installation, training,
inspections and maintenance, and component manufacturing.
As our company grew and the North American aerial adventure
industry flourished, we began innovating, testing, and manufacturing
our own components like braking systems, trolleys, and other equipment.
We also have been a part of developing and creating regulations for
safety and participant experiences in the United States. Our company
continues to grow, designing and constructing projects across the
country, and becoming a leader in creating standards and efficiencies
within the industry. Our notable projects include the Boy Scouts of
America Jamboree site at the Summit Bechtel Reserve in Mt. Hope, West
Virginia, where we built 26 courses between 2011-2013. To this day,
that property has the most ziplines in one place in the world. We also
have built our courses in ski areas all over the country. Currently, we
are working with several municipalities, including the city of Rocklin,
California and the city of Farmington, New Mexico, as they work to
rebrand their communities as outdoor adventure hubs in their regions.
These communities, too, have long been dependent on extraction and are
now diversifying.
Bonsai currently has over 50 people on the payroll, with 24 based
at our headquarters in Grand Junction. Most of our employees are hired
locally, with a talent pool emerging from outdoor enthusiasts as well
as energy and construction workers. We are also proud to work with
local fabricators, machinists, and engineers to create inspiring
adventures for participants. Many highly skilled vendors,
subcontractors, and workers who have historically worked for the oil
and gas industry are now working with Bonsai.
And we are not alone in building an emerging growth company in the
Grand Valley. From manufacturers like Leitner-Poma and MRP, to
agritourism businesses like Rooted Gypsy Farms and Carlson Vineyards,
to service providers like Powderhorn Mountain Resort--the outdoor
recreation industry is a growing force in western Colorado. In the
Grand Valley alone, the outdoor industry contributes more than $300
million annually to the local economy, providing thousands of jobs.
the outdoor recreation industry in colorado
The outdoor recreation industry is a $62.5 billion dollar industry
in Colorado alone, employing about 511,000 Coloradoans.\1\ Meanwhile,
the entire energy sector generates about $14.9 billion and creates jobs
for about 274,000 people.\2\ In Mesa County, the oil, gas, and mining
sector currently accounts for only about 3 to 4 percent of local
employment.\3\ There has been a statewide effort to develop our outdoor
recreation economy, and Colorado was one of the first states in the
Nation to establish an Office of Outdoor Recreation to nurture the
industry. Now there are over 10 similar offices in other states, and
they are working together nationally to develop best practices in
helping states and communities diversify their economies with outdoor
recreation. Parks and protected public lands form a critical
infrastructure for this emergent sector.
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\1\ https://cpw.state.co.us/Documents/Trails/SCORP/Final-Plan/
SCORP-AppendixF-Economic Contributions.pdf.
\2\ https://www.colorado.gov/pacific/energyoffice/energy-colorado.
\3\ https://www.coloradomesa.edu/business/documents/mesa-county-
economic-newsletter-q4-2018.pdf.
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In cooperation with and complementary to these statewide efforts,
we developed a local Outdoor Recreation Coalition (ORC) to encourage
and educate local elected leadership to the important role that the
outdoor recreation industry could play in diversifying our economy and
improving health and wellness. The ORC is a grassroots organization
that represents a voice for not only outdoor recreation manufacturers,
service and event providers, and retailers, but also for those who
envision our valley developing into a thriving and vibrant economy for
young families and growing businesses to relocate. Our mission is to
expand and enhance the economy of the Grand Valley through
collaborative support and promotion of outdoor recreation businesses
and resources.
During the ORC's first year, we worked on recreational development
along the Colorado River and efforts to increase world-class mountain
bike trails, as well as the recruitment of new businesses into the
area. We were the first coalition of this kind in the state, and almost
immediately accrued statewide recognition. When we connected with Luis
Benitez, Director of Colorado's Outdoor Recreation Industry Office, the
ORC became an example of what we could do across the state in rural
communities to promote the outdoor recreation industry and help rural
economies grow and thrive. We have built relationships with then-
Governor John Hickenlooper, Senators Michael Bennet and Cory Gardner,
and current Governor Jared Polis, who have encouraged the promotion of
the outdoor recreation industry and rural economic development.
A business climate analysis in 2015 \4\ found that Mesa County
possesses qualities unique to its location that are hard to duplicate
and highly valued by local businesses. These include a strong sense of
place; unique physical region; and outdoor activities such as river
sports, skiing, climbing, hiking, camping, road biking, and mountain
biking. Further, 74 percent of the county is public land. The nearby
opportunities for outdoor activities not only bring people and
companies to the area, but also make Mesa County a unique place to
live. Our public lands have fueled growth in the outdoor recreation
sector, and the access that we enjoy to the outdoors will continue to
make our area a desirable place to live.
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\4\ https://www.gjcity.org/contentassets/
b29a975bdf804d5aa8ad258be6eb5b36/northstarreport. pdf.
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Outdoor recreation is not only a robust sector, but a growing one.
Since 2014, total economic output and tax revenue from outdoor
recreation in Colorado nearly doubled, and jobs increased by almost
200,000. Outdoor recreation is ingrained in Colorado's culture,
landscape, and quality of life, as well as its economic stability.\5\
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\5\ https://cpw.state.co.us/Documents/Trails/SCORP/Final-Plan/
SCORP-Executive-Summary.pdf.
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The irony in Grand Junction is that we have focused below the
surface of the land to find economic prosperity. It has given some,
yes; but as we have learned, it was a Faustian bargain. With a pivot to
outdoor recreation, we are now looking at a sustainable use of our
lands to drive the economy--without the punishing boom-and-bust
vagaries of an extraction economy.
Parks and protected public lands form a critical infrastructure for
this emergent sector. And the threat of climate change poses an
existential risk to the outdoor recreation industry, with our winter
recreation sports already significantly impacted, losing an estimated
$154 million in lost revenue and 1,900 fewer jobs statewide in low
snowfall years.\6\
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\6\ https://protectourwinters.org/take-action/pow-colorado/.
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This growth in the local outdoor recreation industry occurred in
tandem with development in our local higher education opportunities.
Our community is home to one of the Nation's fastest growing
institutions of higher learning, Colorado Mesa University, which now
serves over 11,000 students each year. Naturally, a thriving university
plays a critical role in diversifying our economy, enhancing the
vibrancy of our town, and helping employers like Bonsai have access to
top-notch talent across a variety of academic programs. It's not a
coincidence that students from all over the country choose CMU so they
can paddle the river and bike our trails. Recreation has become
increasingly important to such students, and our incoming work force in
general. Doctors, executives, software developers, and business owners
are now choosing communities with wild spaces ripe for recreation over
higher paying jobs in urban areas. The quality of life an outdoor-
centric community provides is compelling for the emerging work force.
a different path: riverfront development
In addition to providing local jobs, the outdoor recreation
industry is leading efforts to redevelop and ignite Grand Junction's
riverfront on the Colorado River. Long neglected and blighted, the
riverfront was populated with junkyards, abandoned equipment, and an
old uranium mill and Superfund Site. The community has worked hard to
redevelop the riverfront, establishing a Riverfront Trail and
encouraging parks and redevelopment.
A central piece of the transition for our river has been the
Riverfront at Las Colonias Business Park. With the city of Grand
Junction, Bonsai is working to turn a barren stretch of land that was
once home to literally tons of uranium mill tailings into a 15-acre
business park featuring outdoor industry businesses like Bonsai Design,
along with an amphitheater, green space, river recreation area, and
boat ramp. Soon, it will also have a zipline over the Colorado River.
This public-private partnership will attract other outdoor businesses
and provide a space for residents and visitors alike to come together
and enjoy the outdoors right in the heart of town.
summary
Our community understands that the key to wealth is diversifying
our economic base. Energy, tech, health care, and manufacturing jobs
are crucial to economic vibrancy on the Western Slope. And these
industries have a work force that demands access to recreation and the
outdoors--both of which the Grand Valley has in abundance. We will
continue building connections to our outdoor amenities and protecting
the public lands that surround us in order to invest in our economy and
the next generation. The outdoor recreation industry brings pride and
opportunities back to a community that has struggled for decades. Even
at a time when legacy industries, such as coal, are in decline, we are
optimistic about what our future will look like.
Thank you for your time today.
______
Dr. Lowenthal. The Chair now recognizes Mr. Bissett.
STATEMENT OF BILL BISSETT, PRESIDENT AND CEO, HUNTINGTON
REGIONAL CHAMBER OF COMMERCE, HUNTINGTON, WEST VIRGINIA
Dr. Bissett. Mr. Chairman, Ranking Member Gosar, members of
the Committee, my name is Dr. Bill Bissett. I am the president
and CEO of the Huntington Regional Chamber of Commerce. Please
know that my chamber represents more than 550 businesses and
more than 30,000 employees in our region.
It is also important to remember that West Virginia is the
only state completely contained within Appalachia. And as an
Appalachian, we like to think that where I am from is a gateway
to a wonderful place that we call Appalachia.
Economically, I bring you good news today from West
Virginia. Since my return home to my home state more than 2
years ago, we have gone from catastrophic job losses and
declining state revenues to job growth in a state that is now
stable and growing financially. Much of this previous economic
downturn related to a severe decrease in the production of
fossil fuels. But we are now witnessing a rebirth in both coal
and natural gas production.
With coal, we continue to be concerned with our Nation's
inability to build new coal-fired power plants. Until this fact
changes, the domestic market for steam coal, coal used to
create electricity, will continue to decrease as coal plants
are retired.
However, the story is not often told that, in the southern
coal fields of West Virginia, the economy is doing well due to
metallurgical coal, or coal that makes steel, which is also
known as met coal. This coal, which sells at a higher price and
burns much hotter, is in great demand both in the United States
and around the world.
As we Americans discuss not only new infrastructure but
also the maintenance of roads, bridges, and other large
structures, large amounts steel will be needed, and I would
hope that that steel would be made in the United States. And to
make that steel, I would want us to use met coal from West
Virginia.
To the north in West Virginia, we see an expansion of
natural gas production and tremendous investments in our
state's future. From new wells to new pipelines, the jobs
revenue and additional economic development related to this
production of natural gas has spiked optimism and opportunity
in our state.
While I bring you good news economically from West
Virginia, it comes with a caveat. As I talk to business leaders
and job providers back home, many of them are thrilled to see
this uptick, but they also find it fragile. In West Virginia,
in the heart of Appalachia, we worry that, as a global issue
like climate change is addressed, we worry that it will damage
our economy in West Virginia far greater than any other state.
My chamber is located outside the coal fields in West
Virginia, but we are all too familiar what a downturn to coal
production does to our regional. At a time when our country and
the world needs steel and electric, met and steam coal
production provides high-paying jobs not just for coal miners
but engineers, lawyers, accountants, machinery workers, and
numerous other service jobs that are dependent on the mining of
coal for their existence.
While we have witnessed the last downturn, we worry that
actions here in Washington will damage West Virginia's
rebounding economy, job growth, and long-term economic
development.
I believe and would suggest that many of my fellow West
Virginians believe that we can produce coal and natural gas
while also creating new economic opportunities for our
citizens. We simply do not have to sacrifice one industry to
create new opportunities.
Some final thoughts. As a person fascinated with how we
electrify this country every day in a reliable, low-cost way, I
would suggest to you that what works for one state might not
work well for other states. What works for Arizona and its
economy probably doesn't work well for West Virginia. We are
very different places.
When the wind doesn't blow and the sun doesn't shine, we
still need to power our homes and businesses, and fossil fuels,
especially through combine cycle plants using both coal and
natural gas, can provide this critical backbone of that
electricity production.
In my opinion, we need all forms of energy production. To
make windmills and solar panels, you are going to need a lot of
materials that come from underground, and that involves
extraction of minerals and the use of land. As a senior
engineer told me early in my career, every form of energy
production has an economic and environmental cost to it.
I think everyone in this room and on this panel would agree
that no one wants to create poverty and hopelessness by their
actions. As many of us Appalachians try to tell our stories
beyond our borders, we worry that the future of our region and
how impediments to our ability to produce natural resources
will return us to what was a very dark period in my home state
and in Appalachia.
As climate change is a global issue, we must consider its
impact in a global way and with a global solution. Sacrificing
the economic future of West Virginia and Appalachia will have
little impact on global man-made carbon, but you will succeed
in creating more poverty, more hopelessness, and an uncertain
future for those of us lucky enough to call West Virginia home.
Thank you again for allowing me to share my thoughts with
you today. It has been an honor.
[The prepared statement of Dr. Bissett follows:]
Prepared Statement of Dr. Bill Bissett, President & CEO, Huntington
Regional Chamber of Commerce
Mr. Chairman, members of the House Natural Resources Committee--my
name is Doctor Bill Bissett and I am the President and C.E.O. of the
Huntington Regional Chamber of Commerce in my hometown of Huntington,
West Virginia.
Please know that my Chamber represents more than 550 businesses and
30 thousand employees in our region. It is also important to remember
that West Virginia is the only state completely contained within
Appalachia, and, as an Appalachian, we like to think that where I'm
from is the gateway to this wonderful place we call Appalachia.
Economically, I bring you good news from West Virginia. Since my
return to my home state more than 2 years ago, we have gone from
catastrophic job loses and declining state revenues to job growth and a
state that is now stable and growing financially. Much of this previous
economic downturn related to a severe decrease in the production of
fossil fuels, but we are now witnessing a rebirth in both coal and
natural gas production.
With coal, we continue to be concerned with our Nation's inability
to build new coal-fired power plants. Until this fact changes, the
domestic market for steam coal--coal used to create electricity--will
continue to decrease as coal plants are retired. However, the story
that is not often told is that, in the southern coalfields of West
Virginia, the economy is doing well due to metallurgical coal, or coal
that makes steel, which is also known as met coal. This coal, which
sells at a higher price and burns much hotter, is in great demand both
in the United States and around the world. As we Americans discuss not
only new infrastructure but also the maintenance of roads, bridges and
other large structures, large amounts of steel will be needed, and I
would hope that we would use steel made in the United States. And to
make that steel, I would want us to use met coal from West Virginia.
To the north in West Virginia, we see the expansion of natural gas
production and tremendous investments in our state's future. From new
wells to new pipelines, the jobs, revenue and additional economic
development related to the production of natural gas have spiked
optimism and opportunity in our state. While I bring good news to you
economically from West Virginia, it comes with a caveat. As I talk to
business leaders and job providers back home, many of them are thrilled
to see this uptick, but they also find it fragile. In West Virginia, in
the heart of Appalachia, we worry that, as a global issue like Climate
Change is addressed, it will damage the economy of West Virginia far
greater than any other state.
My Chamber is located outside of the coalfields in West Virginia,
but we are all too familiar with what a downturn in coal production
does to our region. At a time when our country and the world needs
steel and electricity, met and steam coal production provides high-
paying jobs, not just for coal miners, but engineers, lawyers,
accountants, machinery workers, and numerous other service jobs that
are dependent on the mining of coal for their existence. While we have
withstood the last downturn, we worry that actions here in Washington
will damage West Virginia's rebounding economy, job growth, and long-
term economic development.
I believe, and would suggest that many of my fellow West Virginians
believe, that we can produce coal and natural gas while also creating
new economic opportunities for our citizens. We simply do not have to
sacrifice one industry to create new opportunities.
Some final thoughts.
As a person fascinated with how we electrify this country
every day in a reliable and low-cost way, I would suggest
to you that what works for one state might not work for
other states. What works for Arizona and its economy
probably doesn't work well for West Virginia. We are very
different places. When the wind doesn't blow and sun
doesn't shine, we still need to power our homes and
businesses, and fossil fuels, especially through combined
cycle plants using both coal and natural gas, can provide
this critical backbone of electricity production.
In my opinion, we need all forms of energy production. To
make windmills and solar panels, you're going to need a lot
of materials that come from underground. And that involves
the extraction of minerals and the use of land. As a senior
engineer told me early in my career, every form of energy
production has an economic and environmental cost to it.
I think everyone in this room and on this panel can agree
that no one wants to create poverty and hopelessness by
their actions. As many of us Appalachians try to tell our
story beyond our borders, we worry about the future of our
region and how impediments to our ability to produce
natural resources will return us to what was a very dark
time in my home state and in Appalachia. As Climate Change
is a global issue, we must consider its impact in a global
way, and with a global solution. Sacrificing the economic
future of West Virginia and Appalachia will have little
impact on global man-made carbon, but you will succeed in
creating more poverty, more hopelessness, and an uncertain
future for those of us lucky enough to call West Virginia
home.
Thanks you again for allowing me to share my thoughts with you
today. It has been an honor.
______
Dr. Lowenthal. The Chair now recognizes Mr. Hille.
STATEMENT OF PETER HILLE, PRESIDENT, MACED, THE MOUNTAIN
ASSOCIATION FOR COMMUNITY ECONOMIC DEVELOPMENT, BEREA, KENTUCKY
Mr. Hille. Mr. Chairman, Mr. Ranking Member, members of the
Subcommittee, my name is Peter Hille. I am the president of
MACED, and I am glad to be talking with you today about a just
transition to a new economy for coal-impacted communities.
This is a map of Appalachia showing the economically
distressed counties in red. They fall into the bottom 10
percent of all the counties in the Nation. And this map has
remained largely unchanged for decades. The long history of
coal mining in Appalachia did not create prosperous communities
because, in the early days, these were not jobs that paid well.
You load 16 tons, and what do you get? Another day older and
deeper in debt. That is why Lyndon Johnson declared war on
poverty from a front porch in eastern Kentucky.
By the end of World War II, we had 75,000 coal mining jobs
in Kentucky. But in the 1950s, the jobs began to be mechanized.
Over the next several decades, coal production went up and
down, and mostly up. But as the jobs became more technical,
they paid better. But with bigger machines, more coal could be
produced with fewer workers.
On this chart, the upper line shows production. The lower
line shows jobs declining. Then, in 2012, something
unprecedented happened. For the first time, natural gas per BTU
became cheaper than coal. When these lines crossed, the coal
industry collapsed. Suddenly we lost 10,000 jobs, half the
remaining jobs of mining in our state. This has been a very
real tragedy for the miners, their families, their communities,
and all the other businesses that relied on those earnings.
But this is a tragedy that sits on top of a disaster. The
disaster is the fact that, even before we lost those 10,000
jobs, this region had been economically distressed for
generations.
So, the question is not how do we replace those 10,000
mining jobs and get back to where we were; the question is, how
do we go forward? How do we build a new economy for Appalachia,
an economy that is more diverse, resilient, sustainable, and
equitable, because the old economy was none of those things.
We call this just transition. And the justice we call for
in this transition is based on the reality that these
communities and communities like ours literally fueled the
growth of this great Nation. And they sacrificed lives,
families, health, water, prosperity, even as they gave us the
timber that built our towns, the coal that fired our
industries, and the steel that made our cars.
They are owed a debt, and we can repay that debt with the
new investments that are needed to grow the new economy. We
must reinvest in our communities, many of which have lost more
than half of their population to out-migration. We must make
them places where the young people growing up there want to
stay, where those who went off to college or their first job
want to come back, where people who left to find work and had
successful careers somewhere else might come back to retire,
and where the tourist who comes to visit decides they would
like to stay.
All of the amenities and resources needed to revitalize
these communities are themselves economic drivers, creating
jobs and livelihoods: the local food restaurant, the coffee
shop, the farmers market, the craft brewery, housing, health
care, and the quality of life that many people are looking for
today.
So, we envision an economic transition driven by
entrepreneurs whose businesses create goods and services to
drive diverse local economies and focus on sectors that not
only generate economic activity but also generate benefits for
the community.
For example, at the nexus of food and energy, Gwen Christon
owns a grocery store at a crossroads in Letcher County,
Kentucky. She invested half a million dollars in energy
efficiency and now saves $40,000 a year in utility costs. The
store looks so much better that her sales are up 7 percent, and
she has hired two more full-time workers.
Here is Scott Shoupe. Scott is a fourth-generation coal
miner. But after 22 years in the mines, he is now participating
in our new energy interns program, which is funded by an ARC
power grant. Scott is learning to do energy audits and
retrofits and plans to start his own energy efficiency
business.
This is Tim Robinson. He started a drug treatment program
that now has facilities across eastern Kentucky. We financed
one of those centers and also implemented energy efficiency
measures that resulted in enough savings for them to buy a new
van.
There are many more examples to share, but the important
thing is this: There is hope in these communities, and there
are people who are digging in hard to create a brighter future.
Investments like the Appalachian Regional Commission's power
grants, the AML pilot program, and the proposed RECLAIM Act
represent important investments that can support these
grassroots efforts.
And as we build this new economy, we need to ensure that it
creates a future with opportunities for all, meeting diversity
with equity, and that we attend to the sustainability that is
needed for our children and our grandchildren to thrive and for
our planet to survive.
Thank you.
[The prepared statement of Mr. Hille follows:]
Prepared Statement of Peter Hille, President, MACED, The Mountain
Association for Community Economic Development, Berea, Kentucky
Mr. Chairman, Mr. Ranking Member, members of the Subcommittee,
thank you for the opportunity to present this testimony about our work
and the conditions in coal impacted communities. MACED is a Community
Development Financial Institution certified by the CDFI Fund of the
U.S. Treasury. We manage a loan portfolio of nearly $20 million
invested in small business across Appalachian Kentucky. We are deeply
engaged in a range of initiatives to advance a Just Transition to a new
economy for coal impacted communities in Appalachia and beyond.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
This is a map of Appalachia showing the economically distressed
counties in red. They fall into the bottom 10 percent of all the
counties in the Nation as measured by per capita income, poverty rate
and 3-year average unemployment. Despite this map has remained largely
unchanged for decades. That doesn't negate the value of vast
investments that have been made--there have been many improvements and
much work has been done. The Appalachian Regional Commission has been a
key player ever since it was created and recent increases to its budget
through the POWER Initiative have helped a lot. But we still have a
long way to go.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The long history of coal mining in Appalachia did not create
prosperous communities partly because in the early days these were not
jobs that paid well--``You load 16 tons and what do you get, another
day older and deeper in debt.'' That's why Lyndon Johnson launched the
War on Poverty from a front porch in eastern Kentucky.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
At the end of WWII, we had 75,000 coal mining jobs in Kentucky.
But in the 1950s the UMWA signed an agreement with the mine operators
for the mines to be mechanized. Over the next several decades coal
production went up and down, overall increasing significantly until
recent years (blue line above). And as the jobs became more technical,
they paid better, a high school graduate could make $60,000 to $80,000
per year, making these some of the best-paying jobs in the region. But
with long-wall mining machines underground, then the advent of strip
mining and finally mountaintop removal mining, more coal could be
produced with fewer workers. On the chart above, lower line shows how
jobs continued to drop relative to production. By 2011 we were down to
fewer than 20,000 jobs.
Meanwhile, the dominance of coal largely displaced other large
scale approaches to economic development that would have created a more
diverse and resilient economy. Through decades of boom and bust in the
coal industry, it was too easy to believe, with each downturn, that
coal would come back. There was little effort put into developing other
sectors of the economy, not enough major investment in education,
health care, child care, housing and civic infrastructure. To the
extent we did see progress, it was often the result of relatively small
local efforts or the work of regional non-profits supported largely by
private philanthropy.
We also saw significant retrenchment on the part of both private
philanthropy and the Federal Government in rural America in general and
Appalachia in particular as attention and resources were redirected to
pressing problems in urban areas. Disparities in essential new economy
assets like broadband and cell service compounded the other problems
cited above. All these factors contributed to a growing sense among
rural people that they were being left behind.
Almost 20 years ago, then-Governor Paul Patton, himself a former
coal operator, made this observation: ``As much as coal has meant to
us, it still has not built for us a self-sustaining economy. It's got
to be more varied--got to be more broad. In the early 1970s we had an
economic developer's dream come true. We had more high tech jobs than
we could ever imagine in the coal industry, and it still didn't solve
the chronic problems of the region. So we have to build that basic
economic foundation.'' But we didn't do that, and it set the scene for
what came next.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
In 2012, something unprecedented happened. For the first time,
natural gas, became cheaper than coal as a result of the boom in
fracking. The graph above shows the prices for coal and natural gas in
MMBTUs. When these lines crossed, the coal industry collapsed. Suddenly
we lost 10,000 jobs, half of the remaining coal mining jobs in our
state. Bankruptcies of several major coal companies followed as natural
gas took on an increasing share of electrical generation.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The collapse of the coal industry has been a very real tragedy
for the miners, their families, their communities and all the other
businesses that relied on those earnings, from grocery stores to car
dealers to home builders. It has also devastated local government
budgets, as they saw reduced local tax revenues compounded by a sharp
decline in coal severance taxes which they had come to rely upon as a
significant source of revenue for local services.
The collapse of the coal industry is a tragedy, but it is a tragedy
that sits on top of a disaster. That disaster is the fact that even
before we lost those 10,000 jobs, this region had been economically
distressed for generations. These economic realities have predictable
correlates in other areas as well--low educational attainment, among
the worst health statistics in the Nation, and demographic shifts due
to outmigration because of a lack of good paying jobs, resulting in a
population that is disproportionately made up of the very old, the very
young, and many who are unable to participate in the labor force. We
also face the same opioid epidemic that plagues many other rural areas.
All of that was true before the collapse of the coal industry.
So the question is not how do we replace those 10,000 or more jobs,
and get back to where we were. The question is how do we go forward,
how do we build a new economy for Appalachia and for other coal
impacted communities--an economy that is more diverse, resilient,
sustainable and equitable. Because the old economy was none of those
things.
A diverse economy will rely on many small businesses in different
sectors. These provide the goods and services needed in the community
and keep more money circulating in the local economy.
A resilient economy will be less reliant on a large single industry
so we are not vulnerable to sudden shifts in that sector as we have
been in the past.
A sustainable economy will be built on balance rather than
unchecked growth, respecting the natural ecologies of place--air, land,
water, people and culture.
An equitable economy will provide opportunities for all and,
perhaps even more importantly, the benefits of the economy will be more
widely shared. We need to address all the ways that people have been
marginalized, including race, age, gender and gender identity,
ethnicity and socio-economic status.
We call this Just Transition. And the justice we call for in this
transition is based on the reality that our communities, and
communities like ours, literally fueled the growth of this great
Nation. And they sacrificed--lives, families, health, water,
prosperity--even as they gave us the timber that built our towns, the
coal that fired our industries, the steel that made our cars.
These communities are now bearing the brunt of global changes in
the energy economy. They are owed a debt for the sacrifices they have
made, and we can repay that debt with the new investments that are
needed to grow the new economy. We must reinvest in our communities,
many of which have lost more than half of their population to
outmigration. We must make them places where the young people growing
up want to stay; where those who went off to college or their first job
want to come back; where people who left to find work and had
successful careers elsewhere might come back to retire; and where the
tourist who comes to visit decides they'd like to stay.
All of the amenities and resources needed to revitalize these
communities and make them attractive and livable places are themselves
economic drivers creating jobs and livelihoods--the farmers market, the
local foods restaurant, the coffee shop, the music venue, the craft
brewery, the retirement community, housing, healthcare, and recreation
all contribute to a quality of life that many people are looking for
today.
So we envision an economic transition driven by entrepreneurs whose
businesses create goods and services to drive diverse local economies,
and focus on sectors that not only generate economic activity but also
generate benefits for the community.
The dynamic relationship between entrepreneurial ecosystems,
enterprises, market sectors and community benefits are captured in
MACED's Economic Transition Model (following page). This model
recognizes that investment in key sectors cannot only generate economic
activity but also results in additional benefits to the community and
the people who live there. For example, local healthcare facilities
provide jobs, but also make care more accessible if residents don't
have to travel to get the care they need--and the dollars spent on
health care remain in the community. Similarly, retrofits to increase
energy efficiency create jobs for the installers while also making
homes healthier, safer and more comfortable and make businesses more
profitable. The reduction in carbon output benefits all of us. Similar
multiple benefits apply to the other market sectors identified in the
model.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The five gears in this model represent the dynamic relationship
between the entrepreneurial ecosystem, enterprises and markets. The
entrepreneurial ecosystem supports new entrepreneurs, who in turn
create enterprises that produce goods and services, which feed into
markets.
The small arrows pushing the gears represent active measures that
can be implemented to accelerate the process and magnify the impacts.
At the right-hand side of the model are promising market sectors that
MACED has identified and the additional community.
A functioning entrepreneurial ecosystem generates new entrepreneurs
and also builds models for success in communities, which raises local
capacity. Enterprises create goods and services that feed into markets,
but also produce jobs and local spending power that help support local
markets.
The five arrows at the bottom (increased community capacity,
livelihoods for families, sustainable local economies, diverse regional
economy and stronger communities) are all results of the various
Examples
There are many examples of exemplary work that illustrate the
potential to grow a new economy:
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
At the nexus of local food and energy, Gwen Christon owns a
grocery store at a rural crossroads in Letcher County, Kentucky. She
invested half a million dollars in energy efficiency and now saves
$40,000 a year in utility costs. The upgrade was financed with a
$100,000 USDA REAP grant and $400,000 in financing from MACED. The
energy savings cover the debt service. The store looks so much better
that her sales are up 7 percent and she has hired two more full-time
workers.
The energy savings have also helped her cut some of her prices
which also contributes to the increased sales. The next nearest grocery
store is 10 miles away, so without this store the surrounding area
would be a food desert. By including more local produce in her store,
Gwen is also helping to support local growers, keeping more money
circulating in the local economy.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Scott Shoupe is a fourth generation coal miner. After 22 years
in the mines he is now participating in MACED's New Energy Interns
program, funded by a 2016 ARC POWER grant. Scott is learning to do
energy audits and retrofits, and plans to start his own energy
efficiency business. Commercial energy retrofits can pay for
themselves, often rapidly, by reducing both the energy usage and the
demand charges on the utility bills. One grocery warehouse in Kentucky
is now saving $100,000 per year after investing $200,000 in a lighting
retrofit.
MACED'S New Energy Interns were recently featured in a video by Fortune
Magazine:
https://maced.org/energy/new-economy-work-featured-by-fortune-
magazine/
New Energy Interns in Yes! Magazine:
https://www.yesmagazine.org/planet/energy-conservation-jobs-come-
to-coal-country -20181005
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
This is Tim Robinson, pictured here with Congressman Hal
Rogers. Tim started a drug treatment program that now has facilities
across eastern Kentucky. MACED financed one of those centers and also
implemented energy efficiency measures that resulted in enough savings
for them to buy a new van.
https://www.arccenters.com/
https://www.youtube.com/watch?v=hkiWwO3TFFY
MACED Program Innovations
How$martKY is a MACED program that provides residential on-bill
financing for energy efficiency retrofits. The customer pays nothing
upfront, the utility pays the contractor, and places a charge on the
customer's bill to recover the investment, plus interest. The annual
savings are greater than the charge on the bill, so the customer comes
out ahead and the utility benefits from the demand reduction.
Contractors get jobs and the customer gets a healthier and more
comfortable home. Everybody wins.
Energy Efficient Enterprises (E3) provides energy efficiency for
commercial enterprises as well as the financing needed to implement the
measures. Payback for commercial efficiency is often much faster than
residential retrofits due to reduction in demand charges alongside of
the reduction in kWh usage. Currently MACED is developing a new
financing tool to support solar installations for small commercial
enterprises. Rising electric rates are increasing the interest in solar
for these businesses in our region.
Creative application of capital is needed to support economic
transition in economically distressed regions. MACED has been
pioneering several tools designed to allow us to finance start-ups and
business. We have created a Venture Capital Loan Fund that can make
higher risk investments and offer flexible repayments so as not to
cash-starve the enterprise in the early stages. We have also created a
collateral support fund as a donor-advised fund at a regional community
foundation. Another innovation is our crowd-match loan through which we
can match crowd-sourced capital (from platforms like Kiva or
Kickstarter) one-to-one up to $10,000 with a loan that doesn't require
credit score or collateral. We use the ability to crowd source the
other funds as a proxy for the credit-worthiness of the enterprise. The
CDFI Fund and the ARC POWER fund have provided important support for
these innovations.
New Federal Investment
The Appalachian Regional Commission's POWER Initiative, the AML
Pilot Grants and the proposed RECLAIM Act are important examples of how
new Federal investment can support work on the ground in these
communities. POWER has added capacity to organizations large and small
across the coalfields of Appalachia and spurred new and expanded
programs to support entrepreneurship and a range of innovative
approaches to economic transition. A recently announced AML Pilot Grant
for the town of Benham in Harlan County will upgrade and expand
facilities there related to coal heritage tourism. We appreciate the
fact that programs like this have gotten, and continue to get, support
from both sides of the aisle.
There are many more examples to share, but the important thing is
this--there is hope in these communities, and there are people who are
digging in hard to create a brighter future.
Investments like the ARC POWER grants, the AML Pilot Program and
the RECLAIM Act represent important investment that can support these
grassroots efforts. And as we build this new economy, we need to ensure
that it creates a future with opportunities for all, meeting diversity
with equity, and that we attend to the sustainability that is needed
for our children and grandchildren to thrive, and for our planet to
survive.
Links for more information
Information about MACED programs
https://maced.org/
ACED Five-year Impact Report:
https://maced.org/wp-content/uploads/MACED-
ImpactReport_Nov2018_final_ sm.pdf
Fortune Magazine video featuring MACED's New Energy
Interns:
https://maced.org/energy/new-economy-work-featured-by-fortune-
magazine/
Strategies for Just Transition:
https://maced.org/wp-content/uploads/2018/05/
MACED_strategy_briefs_ web.pdf
Appalachian Regional Commission reports
Distressed Counties maps FY2002-FY2019:
https://www.arc.gov/research/MapsofAppalachia.asp
Appalachian Coal Industry Ecosystem:
https://www.arc.gov/assets/research_reports/CIESummary-
AppalachianCoal IndustryEcosystemAnalysis.pdf
Entrepreneurial Ecosystems:
https://www.arc.gov/research/
researchreportdetails.asp?REPORT_ID=147
Additional reports:
https://www.arc.gov/research/ResearchReports.asp
Appalachia Funders Network
https://www.appalachiafunders.org/
Kentucky Coal Data from the Kentucky Energy and Environment Cabinet
http://energy.ky.gov/Pages/CoalFacts.aspx
______
Dr. Lowenthal. Thanks.
The Chair now recognizes Mr. Dennison to testify.
STATEMENT OF BRANDON DENNISON, FOUNDER AND CEO, COALFIELD
DEVELOPMENT, HUNTINGTON, WEST VIRGINIA
Mr. Dennison. Thank you, Mr. Chairman, Ranking Member,
Committee members.
Investing in the economic revitalization of the communities
that have been extraction-based, that have sacrificed the most
to fuel, this country must be front and center in the shaping
of policy addressing climate change. Doing so cannot be an
afterthought.
As I think about this issue, I think about Wilburn. Wilburn
is an on-the-job trainee with Coalfield Development. He was a
miner for 17 years in Mingo County, West Virginia. And like so
many other miners, in 2015, he was laid off when his mine shut
down. He had to go on public assistance, something he would
tell you he hated to do but had to do to feed his family.
Coalfield Development was able to put Wilburn back to work
through a sustainable agriculture business that we incubated.
This business converted a former mountaintop removal mine site
into a sustainable farm where we sell fresh food products
throughout the region.
Wilburn and his fellow crew members work by what we call
our 33-6-3 model: 33 hours a week of paid work, just like you
would for any other business; but 6 hours a week of higher
education classroom time working toward an associate's degree;
and 3 hours a week of personal life skill development.
At the end of their 2.5 year contract, crew members
transition from being unemployed and in need of public
assistance to being trained workers with an associate's degree.
We have started new businesses in biobased manufacturing,
solar, construction, arts and culture in retail sectors. We
have helped start over 50 new businesses and retrained over 800
formerly unemployed people.
The farm where Wilburn works sits next to an active
mountaintop removal site. And one morning, without trying to be
profound, Wilburn was feeding the hens and the hogs. And you
could see the active mountaintop removal happening just a
couple acres away. And this is a process of huge equipment,
equipment the size of a building moving just massive amounts of
earth, what is called overburden. And the overburden tumbles
down these steep ledges, and massive dust clouds go up.
And Wilburn looked up and watched this happening. And he
said: Well, I reckon that there is the past, and this here is
the future.
The coal industry will never again be the dominant industry
it once was. And this fact creates deep pain for those of us
living in Appalachia, especially our miners. The transition
away from coal, which is already underway, by the way, isn't
just creating an economic crisis. It is a social crisis
directly related to the opioid epidemic. And it is an
environmental crisis leaving massive scars on our landscape
that have to be dealt with.
But the fact that coal isn't coming back doesn't mean that
Appalachia has no future. The void left by coal's collapse is
actually making room for new entrepreneurial spurts to grow up.
And Appalachia can be a vital contributor in the fight against
climate change. And Appalachia is no more guilty of
contributing to climate change than most people in this country
who have had to flip on their lights at night.
With smart Federal policy and investment, our country can
accelerate these new sprouts of entrepreneurship. We need a
national just transition task force to give focus. We need to
create a national program to support coal communities in
transition. The power program is a great start. We can grow
from there. And we need to pass Federal legislation, exactly
what Peter mentioned, that improves conditions for former coal
workers and distressed Appalachian communities especially
relating to the black lung crisis.
If we don't pay attention to the economic hurt of
extraction communities and invest in solutions that show there
is a viable path forward, we will only deepen the division in
our country. We in Appalachia need to know we are valued, and
the country needs to know we have more to offer than just coal.
Too often, when discussing economic transitions, policy makers
announce: ``Well, we can just retrain those people.''
And I do need to say that that is always way easier said
than done.
There are thousands of laid-off miners who have
participated in Federal training programs. They got a new
certificate. But it doesn't matter because there aren't
businesses left to take that certificate and get employed in.
So, at Coalfield Development, we have had to be much more
holistic. We have to create new businesses at the same time as
training new employees to staff those businesses and have a
modern work force. We need maximum flexibility at the ground
level to pull this off.
Wilburn is one of thousands of miners whose life was rocked
by the shutdown of his mine. But at age 45, he is about to
become a college graduate. He has helped us start an entire new
business that sells food products throughout the region.
Wilburn has transformed a moment of crisis into a
transformational opportunity for himself and his family. With
your support, an entire region can do the same.
[The prepared statement of Mr. Dennison follows:]
Prepared Statement of Brandon Dennison, CEO, Coalfield Development
Corporation
Chairman, Ranking Member, and distinguished members of the
Subcommittee, thank you for the opportunity to talk with you today.
My name is Brandon Dennison. I am the founder and CEO of Coalfield
Development Corporation, As a non-profit, Coalfield serves as an
umbrella for a family of social enterprises in southern West Virginia.
Coalfield is working to rebuild the Appalachian economy from the ground
up, trying to show what a healthier and more diversified economy can
look like in a place long, long dominated by the coal industry.
The transition from coal is happening. And it has to happen. For
economic, environmental, and social reasons, our communities must make
this transition. But while there's lots of talk about ``greening our
economy'' and ``transitioning off coal,'' there's much less
understanding about how hard this really is. Today, I want to provide
concrete examples of what a just transition can and should look like.
the view from appalachia
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Wilburn is an on-the-job trainee, a crew member with Coalfield
Development. Wilburn worked for 17 years as a coal miner in Mingo
County, West Virginia. Like so many other coal miners, Wilburn was laid
off in 2015 and had to be placed on public assistance.
Coalfield was able to put Wilburn back to work on a sustainable
agriculture project, which converted a former mountaintop removal mine
into an active farm. Today, local farmers sell fresh and healthy food
products from this site throughout West Virginia. Wilburn and his
fellow crew members work by our 33-6-3 model each week: 33 hours of
paid work, 6 hours of higher education, and 3 hours of life-skills
development.
At the end of their 2.5 year contract, crew members transition from
being unemployed and in need of public assistance, to trained workers
with an Associate's Degree. Many have even developed business plans for
new start-ups. This model has been proven to work. It's been used to
start new businesses in the bio-based manufacturing, solar,
construction, arts and culture, and retail sectors. Coalfield
Development has helped start over 50 new businesses and created 190 new
jobs. We've retrained over 800 formerly unemployed people.
The farm where Wilburn worked sits next to an active mountaintop
removal mine. As we fed hogs and chickens each morning, equipment the
size of buildings moved massive amounts of dirt (called over-burden)
off of high, steep ledges, as dust clouds ballooned up into the sky.
One morning as he worked, without meaning to be profound, Wilburn
watched as this over-burden tumbled down. He then looked over at new
crops growing up on our site and said, ``I reckon that there is the
past, and this here is the future.''
the decline of coal
I'm here today as a young man born and raised in West Virginia. My
wife and I are raising our 2-year-old son in West Virginia, and we're
expecting another boy in a matter of weeks. Coalfield Development was
born out of much love by West Virginians for West Virginians. And my
view from the ground--deep in coal country--is this: Coal is not coming
back.
The coal industry will never be the dominant industry in Appalachia
that it was for generations. This fact creates deep pain for those of
us living in Appalachia, especially for our miners. The transition away
from coal is creating an economic crisis, causing high unemployment and
low labor participation. It's creating a social crisis, leading to an
addiction epidemic. And it's creating an environmental crisis, as
closed coal mines leave scarred and polluted landscapes in their wake.
We know the coal industry is shrinking, and institutions from the
government's own Energy Information Administration to Standard and
Poors--and more--all agree:
1. The U.S. coal-mining industry is in a permanent structural
decline. The industry is facing a new market order, and it
can't compete with less expensive and more flexible rival
fuel sources. For these reasons, it won't likely regain its
once-predominant market position. This shift in markets is
occurring because the economics of coal-fired generation no
longer make the same sense they once did. A decade and a
half ago, coal provided more than 50 percent of all fuel
for U.S. power generation. Today that share is less than 30
percent. Renewables have taken a bite out of coal's
traditional hold on power markets. In an outlook published
just last month,\1\ the Energy Information Administration
sees 24 gigawatts of new, renewable generation capacity
coming on-line this year, 46 percent from wind, 18 percent
from solar, the rest from natural gas--and none from coal.
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\1\ https://platform.mi.spglobal.com/web/client?auth=inherit#news/
article?id=49528076&key productlinktype=2.
2. Initiatives to reverse coal's decline are unlikely to succeed.
The structural changes in the U.S. domestic coal market
have caused the industry to scramble to regain its footing
by promoting expansion of exports and by embracing the
potential of ``clean coal,'' or carbon capture and
sequestration (CCS) projects. Neither the export nor the
CCS initiatives have a very good chance of succeeding. In
addition, hoped-for regulatory relief in the guise of
Federal policy reversals has been realized only
theoretically. While the Trump administration has moved to
ease emissions restrictions on power plants and
environmental rules on mining, neither activity has slowed
the decline of coal. There are still far fewer coal-mining
jobs today than there used to be--the overall trend is
toward fewer and fewer--and coal-fired power generation is
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less competitive than it was 2 years ago.
3. More plants and mines will close as the economics of coal-fired
power generation no longer make sense. According to
research from the Institute for Energy Economics and
Financial Analysis, a leading energy markets think tank, at
least 36.7GW of coal-fired capacity stand to be retired
from 2018 through 2024--117 units in total--and that is a
highly conservative estimate.\2\ Announced retirements will
cut coal-fired capacity by at least 15 percent through
2024, a figure that very likely understates the trend.
Fully two-thirds of 2018's retirements were only announced
in 2017, a clear indication that utilities have shortened
their lead time on closures.
---------------------------------------------------------------------------
\2\ http://ieefa.org/ieefa-report-u-s-likely to-end-2018-with-
record-decline-in-coal-fired-capacity/.
4. A resurgence in coal mining is unlikely. Further restructuring of
the coal mining industry appears inevitable in the face of
a shrinking customer base, fleet overcapacity, and intense
competition--mainly from natural gas and renewables. The
structural decline of the coal industry will drive more
coal-fired power plants out of business. A resurgence in
coal production--regionally or nationally--is unlikely.
Domestic demand for coal will continue to drop, export
strategies will not save producers, carbon capture and
storage schemes meant to sustain the industry are not
viable, and regulatory relief will continue to prove
ineffective. Without a robust customer base of the type it
has historically had, the U.S. coal industry will continue
to contract and consolidate. As demand for coal continues
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to shrink, so too will production.
an action agenda for congress
But hidden in the pain and fear is opportunity and renewal. Like
Wilburn converting a former surface mine into a sustainable farm, we
can find the solutions to our problems within these very problems
themselves. The national attention on Appalachia--and the plight of
former coal workers and the economic hurt of coal communities--presents
an opportunity. Congress should immediately act to:
1. Create a national just transition task force. A smart, just, and
fair transition away from coal will be difficult, and the
transition will affect the entire country, in places where
coal mining and coal plants are closing. While Appalachia
has been first and hardest hit, other regions aren't far
behind. We could and should learn from other countries,
like Canada and Germany, and create a national just
transition task force, which could comprehensively assess
this energy and economic transition, and work with leading
public and private sector partners to identify relevant
regional solutions. This effort should put grassroots
organizations and for-profit innovators in leadership
positions.
2. Create a national program to support coal communities in
transition. In 2015, President Obama introduced his POWER +
program, a portion of which made economic and work force
development grants available to help support coal
communities in transition. POWER focused on economic
development and diversification; the effort wasn't just
about creating new jobs, but it focused on diversifying and
strengthening local economies, so they could more
resilient. While pieces of this original program still
exist, total funding allocations are small. Congress could
immediately put resources to work, and build off of the
excellent work of the Appalachian Regional Commission,
which has awarded more than $120M since 2015 to innovative
strategies, like Coalfield, that have the potential to
scale and be replicated.
The Appalachian Regional Commission is a particularly effective
Federal agency and represents the kind of ``place-based''
policies that can have an out-sized impact.\3\ Regional
entities such as Appalachian Regional Commission are more
in touch with the on-the-ground complexities and nuances in
ways national agencies just can't be.
---------------------------------------------------------------------------
\3\ https://www.brookings.edu/bpea-articles/saving-the-heartland-
place-based-policies-in-21st-century-america/.
POWER funding created opportunities that allowed people to
stay--being Appalachian is our culture and our identity. We
just have to make sure that jobs exist for the miners and
affected community members that have been trained. That's
why Coalfield Development has worked closely with a solar
company, Solar Holler, which has recently hired eight of
the workers we've trained. These programs work if the
private sector (and other potential job creators) are
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engaged from the beginning.
In places like West Virginia, we put all our eggs into one
basket--ironically made of coal. When the bottom fell out,
we were stuck in black slurry. Now, many ask, ``What's the
next big thing? What can replace coal?'' But I believe this
is the wrong question. Relying too heavily on one industry
is how we ended up with some of the highest poverty rates
in the country. The right solution isn't to find one new
industry, but to support entrepreneurs and new businesses
in a diversified number of financially, environmentally,
and socially sustainable fields. At Coalfield Development,
we're pioneering what these diversified sectors can look
like. Federal investment in solutions and communities like
ours can help us scale create solutions to our economic
challenges.
3. Pass Federal legislation that improves the conditions of former
coal workers and distressed Appalachian communities. The
most important efforts focus on helping miners suffering
from black lung disease, promoting reclamation by
stimulating economic development, and connecting rural and
urban areas by improving broadband access.
Black Lung
There is another issue related to addressing the legacy cost of
coal mining as we work through this economic transition. Rates of black
lung disease have hit a 25 year high in Appalachian coal mining
states.\4\ One in five veteran working coal miners in Central
Appalachia now has this fatal and incurable disease. Since 2000, the
rate of black lung disease has doubled across the United States. The
Black Lung Disability Trust Fund pays for benefits to coal miners
disabled by black lung and their surviving spouses in cases where the
miners' employer has gone bankrupt or not been found responsible. But
because of congressional inaction, this Trust Fund is in jeopardy. The
Trust Fund is supported by a small excise tax paid on coal sold
domestically, at a rate that was unchanged for more than three decades.
But Congress failed to extend the tax rate before the end of 2018, and
it has now been cut by more than half. This will create a long-term
financial crisis for the Black Lung Disability Trust Fund unless it's
corrected. A May 2018 Government Accountability Office report projected
that, if the tax rate were to be slashed, the Trust Fund's revenue
would be unable to cover beneficiary payments and administrative costs
as soon as 2020 and Trust Fund debt would balloon to over $15 billion
by 2050.\5\ I urge members of this Committee to work toward extending
the black lung excise tax immediately.
---------------------------------------------------------------------------
\4\ https://www.npr.org/2018/07/19/630470150/black-lung-rate-hits-
25-year-high-in-appalachian-coal-mining-states.
\5\ https://www.gao.gov/products/GAO-18-351.
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The RECLAIM Act
We must restore the lands degraded and polluted by the coal mining
industry. As we've found at Coalfield, there's economic opportunity in
reclamation. The RECLAIM Act, which would open up $1B for reclamation,
has the potential to create thousands of new jobs, and stimulate
millions more in local economic development activity across the
country. According to the Department of the Interior's Office of
Surface Mining Reclamation and Enforcement, the RECLAIM Act could
create 4,600 direct jobs in areas hard hit by losses in the coal
industry. Reclamation of abandoned mine lands generate thousands of
other jobs in agriculture, recreation, tourism, renewable energy, and
retail. The RECLAIM Act doesn't use a cent of taxpayer money. It
imposes no new fees or taxes.
Miners can be put back to work restoring the land they love. As
Wilburn's fellow crew member, himself a former surface miner, remarked
one day: ``I just blow the mountains up, and now I'm putting them back
together.'' And importantly, these sites, if properly restored, can
help mitigate climate change by capturing carbon and connecting diverse
ecosystems. Indeed, over 1,200 miles of streambed have been permanently
destroyed by mountaintop removal mining in Appalachia alone. More than
1 million acres of mountaintop have been blown up. Enough mountaintop
has been removed in West Virginia alone to bury all of Manhattan.\6\
---------------------------------------------------------------------------
\6\ https://pubs.acs.org/doi/abs/10.1021/acs.est.5b04532.
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The RECLAIM Act uses existing funds to create jobs and clean up
dangerous mines. The RECLAIM Act was originally introduced in February
2016, then again introduced last Congress as H.R. 1731 and reported out
of the House Natural Resources Committee in October 2017. Still,
largely because of industry opposition, it has not progressed despite
its bipartisan support in both chambers. The AML Fund has an explicit
purpose to clean up dangerous and polluting mines that were left behind
by coal operators over 40 years ago and continue to burden surrounding
communities. The RECLAIM Act simply releases these funds so that long
overdue cleanup can happen now.
I'd like to extend my thanks to the House Natural Resources
Committee for passing the bipartisan RECLAIM Act in the 115th Congress.
Chairman Lowenthal, I know you were a co-sponsor of that legislation,
as were a number of other members of this Subcommittee. RECLAIM would
also catalyze longer term economic growth in coal communities by
helping to lay a foundation for the building new industries in parts of
the country that badly need a broader economic base.
AML Pilot Program
The flexibility and innovation aspired to by RECLAIM has been tried
out through the AML Pilot program, launched in 2015. This program chose
six states in which AML funds were allowed to be used on projects
having a ``nexus'' between mine-cleanup and economic development. For
example, in West Virginia we've been able to kick-start an aquaponics
facility, solar installations, and quality housing development on
former minelands.
Coalfield Development recently worked with partners throughout
Central Appalachia to identify and develop 20 development projects in
communities plagued by abandoned mine lands.\7\ Projects would cost
over $38 million; however, if these projects were funded, total
economic output from project spending would be valued at nearly $84
million. These projects would provide over $22 million in wages to
employees, support nearly 543 full- and part-time jobs across the
region, and improve regional GDP (value-added) by over $44 million.
Further, most projects plan for direct/on-site employment after
construction/development. See the Reclaiming Appalachia report for more
info.
---------------------------------------------------------------------------
\7\ http://appvoices.org/resources/AML-RAC/
AML_RAC_report_Many_Voices_Many_Solutions-11-13-18-lo-res.pdf.
These proposals (as well as projects that have already been funded)
demonstrate the potential for jobs and broader community benefits
through innovative mine reclamation. Importantly, restoring these lands
can contribute significantly to reductions in greenhouse gases. The
---------------------------------------------------------------------------
Nature Conservancy reports:
A study by The Nature Conservancy and others showed that
``natural climate solutions''--such as growing taller trees,
improving soil health, protecting grasslands and restoring
coastal wetlands--can amount to 37 percent of the removal of
carbon dioxide from the atmosphere needed in the next few
decades.
In West Virginia, the third most forested state in the United
States, there is massive potential to contribute to these
natural climate solutions. And the Central Appalachians is one
of the most critical landscapes in the country for this
important work.
In 2012, The Nature Conservancy completed a study of all the
forests on the East Coast, identifying the areas predicted to
withstand the growing impacts of climate change and help ensure
nature's survival. Among the most resilient landscapes were
highland forests in West Virginia.\8\
---------------------------------------------------------------------------
\8\ https://www.nature.org/en-us/about-us/where-we-work/united-
states/west-virginia/stories-in-west_virginia/natural-climate-
solutions-in-west-virginia/.
While AML Pilot and other Federal programs have been helpful, there
is a need for improvement in execution. In many places, implementation
of the program should increase public awareness and outreach, increase
transparency in application criteria, review, and decision making, and
increase emphasis on projects including a mine reclamation component.
It's important that Federal dollars not be allowed to go to
politician's pet projects, but rather engage community members and
advance truly worthy projects that actually have that key ``nexus''
mentioned above.
National Rural Broadband
Finally, we must connect our communities. Integral to stimulating
economic development, particularly in rural places, is access to
broadband. While the F.C.C. and Rural Utilities Service provide
broadband subsidies, and private sector companies like Microsoft are
rolling out programs, a coordinated, national broadband plan could go a
long way in helping creating new opportunities in economically
distressed areas like Appalachia.
A group in West Virginia called Generation West Virginia has
launched an important new program called NewForce. NewForce is a
tuition-free, in-person, team-based intensive tech training program in
Huntington, West Virginia.\9\ It was created by employers, community
colleges, and non-profits to ensure West Virginians have the right tech
skills for companies who are ready to hire in the Mountain State.
Through the intensive 6-month curriculum, NewForce students work
together, receive mentorship, and graduate with in-demand software
development skills and direct connections to jobs. The program finishes
with a Job Interview Day where the program's employer partners
interview NewForce graduates for open positions. But a robust broadband
infrastructure is needed for this to really take off. A coordinated,
national broadband initiative targeted at rural areas could jump start
economic development. Congress can make that happen.
---------------------------------------------------------------------------
\9\ https://globenewswire.com/news-release/2018/10/16/1622190/0/en/
Generation-West-Virginia-Mountwest-Jobcase-Partners-Launch-Training-
Program-to-Build-Tech-Talent-Pipeline.html.
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the need for a new way of doing economic development
You must understand just how deep and real the pain and hardship is
that has been caused by the coal industry's decline. Usually, when
discussing economic transitions, policy makers announce: ``Well, we can
just retrain those people.'' The reality is this is so much easier said
than done. There are hundreds of laid-off miners who got certified in
new trades, but it doesn't matter because there are not many businesses
outside the coal industry and therefore not many jobs to be entered
with that new certification. Some ask, ``Why can't those people just
move away?'' Well, for one that questions totally ignores that value of
community and culture and identity. But that question also ignores the
economic realities of ``land-poor'' homeowners and the unaffordability
of relocating to high-cost urban areas.
The right question isn't, ``How do we retrain those people?'' The
right question is, ``How we strengthen these places which have given
our country so much and have so much more to give?'' There are smart
and much-needed government investments that we'll need to answer this
question, but we aren't asking for handouts. Ultimately, we need
market-driven solutions that are financially sustainable. We haven't
lost sight of this, and it's why creating new businesses is central to
our strategy.
A question that drives me crazy is, ``Why do those people vote
against their own interests?'' By ``own interests'' the questioner
usually means government programs. Well, we don't want to have to
depend on government programs to feed our families. We are proud to
have powered this country's development for generations, and we want to
keep doing so.
The problem has never been our work ethic. The problem is that we
put all our eggs in to one basket made of coal, and when the bottom of
that basket fell out we found ourselves stuck. Now, many ask, ``What's
the next big thing? What can replace coal?'' This is the wrong
question. Relying on one industry too heavily is how we got some of the
highest poverty rates in the country. So, the solution is not to find
one new industry, but to support entrepreneurs and new businesses in a
diversified array of sustainable fields. By sustainable, I mean
financially sustainable, environmentally sustainable, and social
sustainable. At Coalfield Development, we're pioneering what these
diversified sectors can look like. We and our partner organizations are
not asking for charity. We're pitching an investment opportunity.
Poverty in our region is complex. Even when coal was booming, we
were still one of the poorest regions in North America.\10\ Such socio-
economic challenges are wrapped up in issues of power, equity, and
fairness. For example, huge swaths of West Virginia land is owned by
corporate land holding companies.\11\ It's very difficult for fresh
investment and redevelopment to occur when this is the case. Strategies
for our region can't just be about one industry at one point in time.
Strategies for our region have to be about justice and opportunity.
---------------------------------------------------------------------------
\10\ For a thorough analysis poverty in Appalachia and the Federal
Government's role in it, read Uneven Ground: Appalachia Since 1945 by
Ronald D. Eller (2008) University of Kentucky Press.
\11\ https://www.wvgazettemail.com/news/special_reports/w-va-still-
owned-by-absentee-companies-report_says/article_f3dd4a64-19a1-59b7-
bc6d-ee2b49d6bd9b.html.
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Simply using government dollars to ``retrain'' people is not
enough. There has to be a broader place-based strategy which
simultaneously creates new businesses and provides the wrap-around
support needed by workers to overcome poverty.
In developing such programs, much flexibility will be needed for
local innovation to flourish. By local I do not mean state governments,
I mean place-based, grassroots organizations. Program income
requirements should be loosened. More general operating funds should be
granted to organizations trying to survive in extremely distressed
economic environments. Public/private partnerships should be
encouraged, not discouraged. In many ways, this work is more like early
phase, basic research and development. This is economic research and
development to test what is possible and what isn't in this complex
places. Put more directly, those of on the ground trying to improve
conditions for our place need to be allowed to be as innovative and
entrepreneurial as is necessary for real opportunity to flourish.
summary
While I'm here to say that coal is not coming back, I'm also here
to say that doesn't mean Appalachia has no future. In fact, the void
left by coal's collapse has made room for new sprouts of
entrepreneurship and innovation. While the short-term prognosis is a
painful transition off coal, if we can approach this transition smartly
and fairly, the long-term outlook is really bright.
Appalachia has important assets the rest of the country needs:
large swaths of forests that are carbon sinks, a dedicated and creative
work force, a unique and distinctive culture, and a good quality of
life within driving distance of a significant portion of the country's
population. We can realize our bright future, albeit with a little help
and outside investment. But our leaders hold us back from realizing our
bright future when they promise coal will return. This only dampens the
latent entrepreneurial spirit that lies dormant among our hills and
hollers. But that spirit is there.
Wilburn is one of thousands of former miners whose life was rocked
by the shut down of his mine. But at age 45 he's about to become a
college graduate. He's helping us start a sustainable business called
Refresh Appalachia, which is selling fresh, healthy produce throughout
the region. Wilburn has transformed a moment of crisis in his life into
a transformational opportunity.
Now you have the opportunity to do the same.
Please don't ignore the economic hurt in Appalachia--or in any
other coal communities across the country. To ignore us would only mean
deepening the fissures that are breaking our country apart.
I hope you'll consider Wilburn, as you consider my suggestions.
Thank you for your time.
______
Dr. Lowenthal. Thank you.
And now the Chair recognizes Dr. Mason to testify.
STATEMENT OF JOSEPH MASON, PROFESSOR, DEPARTMENT OF FINANCE,
LOUISIANA STATE UNIVERSITY, BATON ROUGE, LOUISIANA
Dr. Mason. Good morning.
Thank you, Chairman Lowenthal, Ranking Member Gosar, and
members of the Committee for holding this hearing to discuss
this very crucial transition.
The Green New Deal resolution seeks, among other things, to
achieve net-zero greenhouse gas emissions through a fair and
just transition for all communities and workers while ensuring
clean air and water, a sustainable environment, and justice and
equity. While laudable, those objectives conflict in dimensions
that just can't be reconciled.
In recent years, wind turbine and transmission line sites
located far from population centers have largely been
developed. Further development will require working with
communities and citizens to ensure a fair and just balance of
access and resource generation closer to cities and homes.
Such a process takes time, and jobs will not be created
until that process comes to a conclusion. A fair and just
process will take many years. There will be jobs dealing with
batteries and generation technology, but those will be
environmentally dirty in different ways. Rechargeable
batteries, including lead acid, nickel, metal hydride, nickel
cadmium and lithium ion batteries, all contain toxic materials
that are hazardous to human health and the environment if
disposed of inappropriately.
Wind turbines use considerable amounts of rare earth
elements to build permanent magnets and electric generators;
solar photovoltaic installations use similar ingredients. All
of those are either valuable, in short supply, or both.
Rather than mining those from conflict areas of the world
like the Democratic Republic of the Congo, they can be obtained
through recycling. But jobs and industries related to that
recycling will require handling concentrated quantities of
heavy metals and other carcinogenic and mutagenic materials
risking humans lives as well as soil and groundwater
contamination.
Without occupational safety rules, we risk exposing workers
in those new jobs to both new and known safety hazards like we
did when exposing miners to black lung disease, construction
workers to asbestos exposure, and workers and residents of
nearby neighborhoods to birth defects and cancer arising from
chemical and heavy metals.
Residential solar contracts already involve terms similar
to those that caused the recent real estate bubble, bust, and
recession. Without consumer protection from rampant
development, mandating green energy without protecting
consumers violates the notion of a just and fair transition.
While the green bond sector is booming, there is no
assurance that investments funded in the sector are really
green in any meaningful sense. Bonds and funds selling on the
popularity of the green moniker usually underperform their
benchmarks and charge high investor fees. Like the tech bubble
glamour stocks in the 1990s, a green investment bubble could
arise that, when popped, could devastate the sector and
forestall needed development, hurting both jobs and the
environment.
If the proposed mandate of carbon neutrality cannot be met
with production cuts, then achieving that goal will have to
rely upon offsets. But offsets aren't locally green and
sometimes arise from poor policy making and fraud. It is not
clear that the United States should accept other countries'
offsets, but there is currently no mechanism by which to accept
or reject their fiat permits. Diplomacy will be necessary to
establish eligibility requirement, and that will take time.
The proposed mandate will alter international patterns of
trade and strategic resources and disrupt global supply chains.
As markets adapt to the new patterns of energy resource trade,
market failures will occur. Because energy affects every
consumer and business in the Nation, such failures may be even
more disruptive than the recent credit crisis. Even without
market failures, the mandate will impose widely varying effects
upon states and their citizens as some states pay more of the
price for the adjustment than others.
Because those costs are a complex function of existing
fossil fuel use as well as energy imports from other states,
the sponsors of this resolution cannot today say which states
will suffer worse losses and which others will not. And they
cannot, therefore, guarantee the social or distributional
justice that they claim, or even the basis by which such
justice will be meted out.
The New Deal created jobs in an economy with more than 20
percent unemployment. We don't have 20 percent unemployment.
According to Federal Reserve Chairman Jerome Powell,
unemployment is low, and prices are near 2 percent inflation.
We are in a good place.
The proposed resolution is not a New Deal, nor do we
necessarily need a New Deal. A better historical roadmap might
be the National Monetary Commission. Following the financial
panic of 1907, Congress convened the Commission to study in
depth best central banking practices around the world in order
to make recommendations for meaningful reform. The result of
that investigation, the Federal Reserve System, still stands as
a major innovation that is one of the leading central banks in
the world in terms of both effectiveness and stability. Our
environment deserves the same thought and consideration.
In closing, I would like to note I was first included in
the congressional greenhouse gas debate almost 10 years ago
now. I agree that the issue is more important 10 years on,
absolutely. I applaud Chairman Lowenthal's remarks about the
need to begin a meaningful discussion here to lead this process
forward.
Thank you.
[The prepared statement of Dr. Mason follows:]
Prepared Statement of Dr. Joseph R. Mason, Louisiana State University
and the University of Pennsylvania
Economics is built upon comparative statics. Statics is the
comparison of one economic equilibrium with another. While it is easy
to say that one equilibrium is better than another, the question of how
we make the transition is important. Thus, I want to acknowledge that
this hearing is crucial to the Nation's economic well-being.
According to the proposed resolution, the Green New Deal seeks:
(A) to achieve net-zero greenhouse gas emissions through a fair and
just transition for all communities and workers;
(B) to create millions of good, high-wage jobs and ensure prosperity
and economic security for all people of the United States;
(C) to invest in the infrastructure and industry of the United
States to sustainably meet the challenges of the 21st
century;
(D) to secure for all people of the United States for generations to
come----
(i) clean air and water;
(ii) climate and community resiliency;
(iii) healthy food;
(iv) access to nature; and
(v) a sustainable environment; and
(E) to promote justice and equity by stopping current, preventing
future, and repairing historic oppression of indigenous
communities, communities of color, migrant communities,
deindustrialized communities, depopulated rural
communities, the poor, low-income workers, women, the
elderly, the unhoused, people with disabilities, and youth
(referred to in this resolution as ``frontline and
vulnerable communities'')
Mandating ``net-zero greenhouse gas emissions'' over a 10-year
period alone, however, will not ensure a smooth transition. Mandates
will not curtail CO2 emissions and encourage the push to
renewables. Often, in fact, mandates instead produce perverse
incentives.
The proposed mandate also runs counter to the other resolution
goals regarding fairness and equality. The tension arises because the
only way to achieve the mandate in such a short period of time will be
to take rights and property from some citizens and reallocate that to
others.
I. Green Jobs Will Take a Long Time to Develop and Will Involve
Handling Toxic Metals That Are the Dirty Foundation of Green
Energy
A. Rapid Development and Planning for Wind Turbines, Solar Farms, and
High-Voltage Lines Will Alienate Local Citizens and Violate
Distributional Justice
Jobs related to green technologies will take a long time to
develop. For instance, jobs related to wind turbine installations and
high-voltage electrical infrastructure can only be made available after
a long planning process.
A 30-year old research agenda regarding opposition to wind projects
by local citizens yields interesting insights into citizens' thinking.
A recent academic paper summarizing such research suggests that while,
``North American support for wind has been consistently high,'' the
strict interpretation of opposition cannot be tied solely to NIMBY
behavior by local residents or lack of concern for the environment.\1\
Distance from turbines obviously matters, but its effect is unclear,
and sound and visual impacts are tied to annoyance and opposition.
---------------------------------------------------------------------------
\1\ Rand, Joseph and Hoen, Ben. ``Thirty years of North American
wind energy acceptance research: What have we learned?'' Energy
Research & Social Science 29 (2017), 135-148.
---------------------------------------------------------------------------
Less obvious, however, are conclusions that suggest that the
strongest influences on successful placements relate to the process by
which wind turbine sites are selected. Sound and visual impacts can be
overcome if those aspects are not ignored, but are acknowledged.
``Issues of fairness, participation, and trust during the development
process influence acceptance,'' and ``[v]iewing opposition as something
to be overcome prevents meaningful understandings and implementation of
best practices.'' \2\
---------------------------------------------------------------------------
\2\ Id.
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All that said, however, the authors note that ``[i]mplementation of
research findings into practice has been limited.'' \3\ Similar
research finds nearly identical intricacies to citing high-voltage
transmission lines required for green energy installations.\4\
---------------------------------------------------------------------------
\3\ Id.
\4\ Cain, Nicholas L. and Nelson, Hal T. ``What drives opposition
to high-voltage transmission lines?'' Land Use Policy 33 (2013), 204-
213.
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Those points are important because, ``the `low hanging fruit' wind
sites (those that have good wind resources and are close to loads and
transmission, yet far from communities) have largely been developed,
implying that future wind development likely will happen increasingly
near communities.'' \5\
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\5\ Rand and Hoen (2017). For a more complete review of constraints
to wind power development, see the U.S. Department of Energy, Wind
Vision: A new era for wind power in the United States. 2015.
---------------------------------------------------------------------------
Up to now, considerations regarding reactions of local citizens to
wind turbine placements and high-voltage infrastructure have not been a
significant concern. The Green New Deal 10-year mandate, therefore,
means that wind turbine installations and needed transmission towers
will be coming to residents' neighborhoods soon, regardless of local
concerns. The proposed policy is almost designed to alienate local
citizens in the name of unfunded federalism. The costs of such
policies--like those incurred by locals in the Camp Fire--will be borne
by locals while the benefits will be enjoyed elsewhere. Such dispersion
violates concerns of distributional justice and fairness, counter to
the bill's own stated goals.
B. Green Energy Curtails CO2 , but Increases Concentrations
of Other Pollutants That Damage Soil and Water
While it is obvious that wind turbines don't produce when the wind
doesn't blow and solar doesn't produce when the sun doesn't shine and
many have suggested batteries as a solution, few have thought about
where the batteries come from or the batteries' own impact on the
environment.
Batteries pollute. Rechargeable batteries, including lead-acid,
nickel-metal hydride, nickel-cadmium, and lithium-ion batteries, all
contain toxic materials. ``Spent rechargeable batteries contain heavy
metal elements, including nickel (Ni), cobalt (Co), and [lead] Pb,
which are hazardous to human health and the environment if disposed of
inappropriately. . . . Ni, Co, and Pb are all classified as
carcinogenic and mutagenic materials. In addition to heavy metals, the
organic and strong acid/alkaline electrolytes of rechargeable batteries
are also polluting.'' \6\
---------------------------------------------------------------------------
\6\ Renjie Chen et al. ``Toward sustainable and systematic
recycling of spent rechargeable batteries.'' Chemical Society Reviews,
47 (2018), 7239-7302.
---------------------------------------------------------------------------
So, while the Green New Deal promises clean air, little attention
is being paid to increased concentration of other pollutants in the
quest to decrease CO2.
C. Resources Needed for Green Energy Will Require Transportation and
Handling of Toxic Materials in High Concentrations in Trade
With Conflict Nations Worldwide
Large-scale battery production also consumes other scarce
resources. Among the above-mentioned elements, ``Co is considered
strategically important because it is widely used in industry and by
the military.'' \7\ Yet, Co, in particular, is in short supply and some
two-thirds of that comes from one of the poorest countries in the
world, the Democratic Republic of Congo, under contract to Glencore.
Illustrating the Democratic Republic of Congo's global influence, the
Financial Times reported last week that Co prices ``hit their lowest
level in 2 years after a supply surge from the Democratic Republic of
Congo,'' after falling some 40 percent since November 2018.\8\ The
Democratic Republic of Congo's uncertain political environment,
demanding increased royalties and taxes on international mining
companies, has led mining companies such as Glencore to reduce their
exposure to the sector.\9\
---------------------------------------------------------------------------
\7\ Id.
\8\ Sanderson, Henry. ``Cobalt hits 2-year low as DRC ramps up
supply.'' Financial Times, February 5, 2019.
\9\ Sanderson, Henry and Hume, Neil. ``Glencore to cut workers at
key DR Congo copper and cobalt mine.'' Financial Times, February 8,
2019.
---------------------------------------------------------------------------
Resource pressures have led to increased concerns about materials
recycling. Yet U.S. battery recycling programs are lax in comparison
with those in the EU and China.\10\
---------------------------------------------------------------------------
\10\ Renjie Chen et al. (2018).
---------------------------------------------------------------------------
It is important to recognize further that such recycling concerns
are not only about the environment. The needs span all manner of green
technologies not just batteries. ``Wind power demands important amounts
of rare earth elements (REE) like neodymium and dysprosium to build
permanent magnets for electric generators and some studies have shown
that demand of both elements might increase by 700 percent and 2600
percent, respectively, in the next decades. Additionally, solar
photovoltaic demands high quantities of silver for electrical
connections, and other materials like cadmium, tellurium, or indium are
used for manufacturing p-n junctions in solar thin film technologies
like CIGS or CdTe. Solar thermal power (STP) also requires silver for
manufacturing reflectors or nickel and molybdenum for manufacturing
high strength steel alloys needed in structures.'' \11\
---------------------------------------------------------------------------
\11\ Valeroa, Alicia; Valerob, Antonio; Calvob, Guiomar; and
Ortegoa, Abel. ``Material bottlenecks in the future development of
green technologies.'' Renewable and Sustainable Energy Reviews 93
(2018), 178-200. (Citations omitted.)
---------------------------------------------------------------------------
All of those are in short supply, but little of those are recycled.
``[C]urrent recycling rates of some of these materials are almost
negligible because more often than not the specific required recycling
processes do not pay off. [Even where recycling is profitable], current
recycling rates are still very low. For instance, less than 3 percent
of the lithium contained in a battery is currently recycled. . . .
[Still] only 42 percent of the total battery waste mass can be recycled
with current available technology. . . . As a result, the concern
regarding the impact of green technologies on raw material availability
is becoming an important issue for countries aiming at guaranteeing
their sustainability and for the development of green technologies.''
\12\
---------------------------------------------------------------------------
\12\ Valeroa et al. (2018). (Citations omitted.)
---------------------------------------------------------------------------
There will be jobs. But these will be no better (and arguably,
worse) than those in the existing fossil fuels sector. Those jobs will
deal with the new pollutants from green energy sources. Even recycling
programs--to the extent that those are mandated--will require handling
concentrated quantities of heavy metals and other carcinogenic and
mutagenic materials, risking human lives and soil and groundwater
contamination. It would only make sense to put in place occupational
safety rules to deal with new environmental hazards before mandating
energy goals. Otherwise, we may repeat prior problems like those
arising from black lung disease, asbestos exposure, birth defects and
cancer arising from chemical and heavy metals disposal, and the failed
remediation efforts of the EPA's Superfund, all in the name of
CO2 reduction.
II. The Green Brand Is Already Being Co-Opted
The Green New Deal sets as a goal ``net-zero greenhouse gas
emissions,'' but does not define what that means. Green is already a
marketing tool in many sectors and even where the term is defined, it
leads people to charge high fees and do bad things in the name of
``green.''
A. Solar Installations Face a Complex Web of Laws and Regulations That
Are Not Being Taken Into Account in the Mandate
Take, for instance, the residential solar industry. Many homes have
installed solar panels. But a large number of those have been bad deals
for consumers and investors alike.
Solar contracts are causing a variety of frictions in the real
estate industry, some of which may turn out to be systemic. For
instance, the contractual arrangements surrounding the installations--
often in the form of loans or leases and contracts to provide energy to
the grid via net metering arrangements--may not transfer with the home
because they are technically independent of the property upon sale.
Ancillary negotiations can be necessary to effectuate such transfer,
but those negotiations can delay closing and raise the costs of real
estate transactions.
Consumer and business solar installation contracts are sold and
securitized just like subprime mortgages, with the cash-flows ``sliced
and diced'' and sold to investors so that the company can sell more
solar installations. In 2017, solar securitizations topped $1.5 billion
and in 2018, they topped $2 billion.\13\ The sector continues to grow
rapidly.
---------------------------------------------------------------------------
\13\ Mendelsohn, Mike. ``Raising capital in very large chunks: The
rise of solar securitization.'' PV Magazine, November 16, 2018.
---------------------------------------------------------------------------
In January 2019, Mosaic--which has over $1 billion in
securitizations outstanding--completed its largest solar securitization
to date. Mosaic's consumer loans are regulated by, ``CFPB, FTC and
various state agencies. Loans originated by Mosaic must comply with
applicable Federal and State law including (but not limited to): Truth
in Lending Act (``TILA''); Truth in Advertising; Fair Credit Reporting
Act (``FCRA''); Fair Debt Collection Practices Act (``FDCPA''); Equal
Credit Opportunity; [and] Privacy and Data Security Laws.'' \14\ While
securitization is not in and of itself bad, one of the key risk factors
noted in Mosaic's securitization is that the loans and leases can
contain unique features like payments that rise over time, which ``may
potentially invite the scrutiny of consumer protection regulators.''
\15\
---------------------------------------------------------------------------
\14\ ABS New Issue Report, ``Mosaic Solar Loan Trust 2019-1,''
Kroll Bond Rating Agency, February 6, 2019.
\15\ Id.
---------------------------------------------------------------------------
Green energy installations, therefore, intertwine with consumer
protections and energy transmission regulations in a web of Federal and
state combinations whose interaction will be affected by the proposed
mandate. Mandating green energy without protecting consumers in those
sectors, therefore, violates the notion of a ``just and fair
transition.''
B. Green Bond Funds Sell at a Premium and Charge High Fees for the
Brand
Although there is no established formal criteria for the
qualification of a green bond, the development of the International
Capital Market Association ``green bond principles'' has promoted a
modicum of agreement in the sector.\16\ Those principles, while
voluntary, have formed a process around transparency and disclosure
with four specific components, namely Use of Proceeds, Process for
Project Evaluation and Selection, Management of Proceeds, and
Reporting.
---------------------------------------------------------------------------
\16\ https://www.icmagroup.org/green-social-and-sustainability-
bonds/green-bond-principles-gbp/.
---------------------------------------------------------------------------
While green investment funds have proved popular with special
interests they ignore simple marketing realities: when something is
more popular it can be sold for a higher price. Existing fossil-free
funds' demonstrated performance history shows that the funds usually
underperform even their own chosen benchmarks and charge high fees to
investors. Like the tech bubble ``glamour stocks'' in the 1990s, a
green investment bubble could arise that--when popped--could devastate
the sector and forestall needed development of green technologies.
Despite such concerns, green bond issuance is growing rapidly. The
World Bank reported that green bond issuance grew from almost nothing
in 2012 to over $150 billion in 2017.\17\ After being initially led by
supra-nationals like the World Bank and International Monetary Fund,
volumes have shifted to ``a wide range of issuers including corporates,
banks and local authorities. While 50 percent of supply has come in
Euro-denominated format, other bonds have been issued in USD, GBP, SEK,
CAD, AUD and others including PEN'' (Malaysia).\18\ Issue currency is
dominated in some regions by USD because the United States is the
largest investor country worldwide. For instance, over 85 percent of
Latin American green bonds issued since the inception of the green bond
market were denominated in USD.\19\
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\17\ The World Bank at https://www.ifc.org/wps/wcm/connect/
news_ext_content/ifc_external_ corporate_site/news+and+events/news/
perspectives/perspectives-i1c2.
\18\ Reichelt, Heike and Keenan, Colleen. The Green Bond Market: 10
years later and looking ahead. Washington, DC: The World Bank, December
2017.
\19\ Mullin, Keith. `` LatAm green bonds--Building Momentum.''
Environmental Finance (supported by the World Bank and the Swiss
Federation).
C. Green Power Isn't Always Green: Offsets Cannot be Relied Upon to
---------------------------------------------------------------------------
Decrease Global CO2 Emissions
The troubling aspect of the USD concentration is that the United
States is the key market for many of the green products produced by
some nations. One of those products is CO2 offsets.
If the proposed mandate of carbon neutrality cannot be met with
production cuts, then achieving that goal will have to rely upon
offsets. But offsets, at best, aren't locally green (merely reflecting
somebody else's green achievements) and, at worst, merely reflect
unjust enrichment and outright fraud.
For instance, in February 2016, the New York State Public Service
Commission issued its ``Order Resetting Retail Energy Markets and
Establishing Further Process,'' which, in part, required that companies
selling renewable energy packages to consumers actually obtain such
energy from such sources rather than just using offsets purchased from
the market.\20\ While the issue remains unsettled, the point is that
green energy should actually come from green energy sources, not just
offsets purchased from somewhere else.
---------------------------------------------------------------------------
\20\ Giannasca, N. ``New York Public Service Commission's ESCO
order set for preliminary injunction hearing.'' Energy and
Environmental Law Blog. May 4, 2016. ``. . .to ensure that these
products contribute to greater renewable energy achievement . . .
energy labels are based on the environmental attributes of the energy
purchased by the load serving entity and are not affected by the
separate purchase of Renewable Energy Certificates (``RECs'').
Currently, to meet this requirement the ESCO must guarantee that at
least 30 percent of the energy provided to the customer will be
generated by deliverable renewable energy resources, including biomass,
biogas, hydropower, solar energy, and wind energy, and will include
renewable attributes.'' [Emphasis added.]
---------------------------------------------------------------------------
The reasoning behind the requirement is sound, because it is often
not clear where the offsets come from or whether they are meaningful.
For instance, EU Clean Development Mechanism (``CDM'') projects are
granted carbon credits based on the extent to which the project is
expected to result in fewer emissions than would otherwise have
occurred. ``Companies, therefore, have an incentive to either inflate
the estimate of emissions that would have occurred without the project
or claim that the project will reduce emissions by more than it
actually does.'' \21\
---------------------------------------------------------------------------
\21\ Mason, Joseph R. ``Financial regulation and fraud in CO2
markets.'' Research Handbook of Investing in the Triple Bottom Line,
Sabri Boubaker, Douglas Cummings and Doc Nguyen, eds., Cheltenham:
Edward Elgar, 2018, 9-28.
---------------------------------------------------------------------------
According to Mason (2018):
In order to constrain firms from mischaracterizing their
projects, the CDM mechanism requires third-party validation and
verification before a project receives carbon credits. Third-
party verification is carried out by Designated Operation
Entities (``DOEs'') certified by the CDM Executive Board. Even
independent third-party auditors, however, may be susceptible
to bribes or collusion to manipulate the results.
In 2008 and 2009, respectively, the U.N. temporarily suspended
two independent organizations--Norwegian company Det Norske
Veritas and Swiss firm SGS--after `spot checks found flaws in
their methodologies'. At the time, these two companies were
dominating the validation/verification market (see Szabo,
2008). Investigations showed that both companies had approved
projects without sufficient review.
The U.N. inspection found one company had a flawed review
process, inadequate preparation and training of their auditing
staff, and an overall failure to assign auditors with the
proper technical skills. The other was suspended after an
inspection raised concerns about staff qualifications and the
quality of its internal reviews.
In a follow-up review in 2009, the five largest DOEs'
validation processes were scored on an A-to-F scale. None
received a score higher than a D. \22\
---------------------------------------------------------------------------
\22\ Id. (Citations omitted.)
Even when they are valid, offsets are usually issued as part of a
political process to spur economic development. Using offsets judged as
a valid tradeoff for development in one country as a basis for
achieving carbon neutrality in another runs the risk of ``robbing Peter
---------------------------------------------------------------------------
to pay Paul,'' with no net decrease in global emissions.
III. Energy Is Provided in a Complex International Marketplace
The point of the above is that setting a mandate before setting the
rules of the game--or even some of the rules of the game--is a recipe
for disaster. That disaster will relate to highly complex markets that
supply inputs to every home and business in America and the world. Such
a disruption could have far larger effects on economic growth and green
development than even the recent credit crisis. Sound rules, therefore,
are more important than a blanket mandate.
The production and delivery of energy takes place within a complex
system of three interacting layers: (1) the physical layer consisting
of the hard assets used for production, transportation, and storage of
primary energy sources, and for the transformation of one form of
energy into another; (2) markets for energy that consist of interacting
spot, forward, option and long-term structured transactions; and, (3)
the system of national laws, regulations, and international treaties.
Federal energy policy, market policy, and infrastructure policy,
therefore, go hand in hand so that policies in one area affect the
others.
A. Infrastructure Policy Will Involve Not Just Local, But Global,
Decisions
Changes to Federal policy will affect not just local, but global
energy infrastructure. Energy markets have evolved through history into
a highly integrated, global system. In any such system, shocks such as
the proposed energy mandate propagate across different geographic
locations and specific commodity markets through very complicated and
constantly evolving channels of transmission.
[GRAPHIC] [TIFF OMITTED] T5198.012
.epsFor instance, the graph above shows global oil and natural gas
trade routes in 2017. If the United States uses less oil, those trade
routes will change as other countries use the oil we produce as well as
that which we choose not to import. Nearly every country views energy
as a strategic resource. As a result, global treaties and trade
relationships will affect such flows, necessitating negotiations and
international diplomacy regarding such changes.
B. Market Trading Will Require Policy, Too
Energy products are actively traded, in which the market
transactions can be financial or physical. Financial transactions are
settled in cash, while physical contracts are settled in delivery of
the related commodity. Infrastructure is crucially related to delivery,
in that delivery cannot occur without scheduling necessary
infrastructure well in advance. Thus, there exists a fundamental inter-
relationship between infrastructure and markets.
In addition, there exist several market layers of derivatives
products, including futures, options, and swaps that may be combined
with each other in a wide variety of combinations. Those often trade in
conjunction with a wide variety of weather derivatives that are
associated with resource demand.
Such products are traded on organized markets around the world.
Many such markets have consolidated in recent years, providing
financial market efficiency by virtue of centralized trading that can
more efficiently drive out price anomalies.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Such consolidation, however, does not prevent market failures.
Electricity markets, for instance, use complex arrays of products to
trade around probable shortfalls in production and infrastructure.
Sometimes traders and markets get things wrong. For instance, last
fall a trader on NASDAQ's Nordpool electricity market left the exchange
holding over =100 million in trading losses.\23\
---------------------------------------------------------------------------
\23\ Stafford, Philip and Sheppard, David. ``Trader blows =100m
hole in Nasdaq's Nordic power market,'' Financial Times. September 13,
2018.
Nasdaq said the size of his positions blew through several
layers of safeguards designed to protect the clearing house
---------------------------------------------------------------------------
from hefty losses.
The catalyst for the trading loss was a series of backfiring
bets on the price difference between German and Nordic power
markets, according to multiple sources in the industry. Mr
Aas's trades were positioned for the gap between the two to
narrow, but instead it widened sharply to a level 17 times
larger than normal.
That move was triggered, in part, by a jump in the price of
carbon allowances in Europe that have been the best performing
commodity so far this year and a source of bumper profits for
hedge funds and investment banks. Rising carbon prices, which
are trading at a decade high, have dragged up natural gas and
electricity markets in continental Europe.
At the same time, a forecast of wetter than previously
anticipated weather in the Nordic region, where hydropower is a
big contributor to electricity supplies, pushed prices on the
so-called Nordpool market far lower. \24\
---------------------------------------------------------------------------
\24\ Id.
There will be high-stakes trading in energy around the transition.
Policy uncertainties, weather uncertainties, and market risks will
commingle to create risky conditions in the very energy markets that
U.S. consumers and businesses rely upon every day for their energy
needs. A disruption to those markets can devastatingly cripple U.S.
prosperity and economic security, two of the main goals of the
---------------------------------------------------------------------------
resolution.
C. Different States Will Be Affected Differently
Disruptions to trade and costs will also be felt differently across
the United States. The mandate will require states to reduce fossil
fuel use by 55 percent to 150 percent of their current consumption (see
below). Such wide differentials will have varying effects upon states
and their citizens, with states facing costlier transitions paying more
of the price than others.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The costs imposed upon individual states in the transition are
a complex function of fossil fuel production, fossil fuel reliance, and
infrastructure that supports the transition in any chosen geographical
region. Any one state should not be penalized if sufficient regional
infrastructure does not exist to support its own transition.
Because those costs are a complex function of local fossil fuel use
as well as energy imports from other states, the sponsors of this
resolution cannot, today, say which states will suffer worse losses
than others and cannot, therefore, guaranty social or distributional
justice (or even the basis by which such justice will be meted out).
IV. Summary and Conclusion
The New Deal created jobs that left a lasting imprint on American
infrastructure, such as the San Francisco Bay Bridge, the Lincoln
Tunnel, and the Hoover Dam. Those projects provided jobs in an
environment of more than 20 percent unemployment, nationally. We don't
have 20 percent unemployment today. According to Fed Vice Chairman
Jerome Powell, ``The U.S. economy is now in a good place. At the
moment, unemployment is low, prices are near 2 percent inflation, so
we' re in a good place now.'' \25\
---------------------------------------------------------------------------
\25\ Condon, Christopher; Oguh, Chibuike; and Boesler, Matthew.
``Fed's Powell Says Economy in `Good Place' With Low Unemployment,''
Bloomberg, February 6, 2019.
---------------------------------------------------------------------------
While unemployment may be high in some areas, those areas are not
necessarily where any new jobs will be. Moreover, the skills required
for any new jobs are not guaranteed to be associated with any skills
possessed by workers displaced in the transition. Even assuming enough
new jobs are created to make up for the old jobs, new jobs requiring
different skills will render workers in the old sectors obsolete and
leave a ``lost generation'' behind.
The proposed mandate is no foundation for a New Deal. The funding
and aid provided in the real New Deal took place in a very different
institutional environment.
The RFC--created by President Hoover as the main means of New Deal
funding--was a flexible mechanism that ultimately allocated more than
$50 billion in stimulus money (about $900 billion in 2017 dollars using
a CPI-based inflator, $2.1 trillion using the value of a consumer
bundle, or $13.2 trillion using the relative share of GDP \26\).
---------------------------------------------------------------------------
\26\ The change in the value of the dollar is measured from 1935 to
the most recent year available, 2017. See https://
www.measuringworth.com/calculators/uscompare/result.php?year_source
=1935&amount=1&year_result=2018.
---------------------------------------------------------------------------
Such flexibility was crucial for success in a time of economic
emergency. The flexibility was achieved by making the RFC part of the
Executive branch of the U.S. Government so that changes in the scale or
scope of RFC powers could be enacted by Executive Order.
The ``operation was too large to fund directly out of Federal
budget allocations, so the RFC was founded as a government-owned
corporation with an initial appropriation from Congress and the right
to borrow more money from the public at large.'' \27\ Because it was
not part of the government, it was not required to adhere to Civil
Service regulations for hiring and promotion and was not subject to
congressional General Accounting Office audits.\28\
---------------------------------------------------------------------------
\27\ Id.
\28\ Mason, Joseph R. ``Reconstruction Finance Corporation
Assistance to Financial Institutions and Commercial & Industrial
Enterprise in the U.S. Great Depression, 1932-1937.'' Resolution of
Financial Distress, Stijn Claessens, Simeon Djankov, and Ashoka Mody,
eds., Washington: World Bank Press, 2001, 167-204.
---------------------------------------------------------------------------
RFC decisions were largely made at local levels. Field office
managers had authority to approve loans up to $100,000 (about $1.8
million in 2017 dollars using a CPI-based inflator, $4.3 million using
the value of a consumer bundle, or $26 million using the relative share
of GDP \29\). In practice, each field office was almost completely
independent and only major problems were taken up with Washington.''
\30\
---------------------------------------------------------------------------
\29\ The change in the value of the dollar is measured from 1935 to
the most recent year available, 2017. See https://
www.measuringworth.com/calculators/uscompare/result.php?year_source
=1935&amount=1&year_result=2018.
\30\ Mason (2001).
---------------------------------------------------------------------------
Like a private equity firm, there were, two guiding principles.
First, RFC programs only gave credit or other assistance to
``reasonably sound institutions.'' \31\ Second, successful RFC programs
often ``took a measure of control over institutions to calm junior
creditors and nurse firms to profitability and recovery over the long
run. . . . If a field office showed a profit, everything was fine; if
not, someone would be detailed from Washington to see what was the
matter, and possibly a new field office manager would be appointed.''
\32\
---------------------------------------------------------------------------
\31\ Id.
\32\ Id.
---------------------------------------------------------------------------
The government didn't just give money away in the New Deal. It made
money.
Maybe, if we give the environment the attention that the President
and Congress gave the New Deal back in the 1930s, we could come to a
more meaningful solution. The current mandate does not show sufficient
depth of thought to set a foundation upon which to move forward.
In order to establish such a foundation, a better historical
analogy might be the National Monetary Commission. Following the
Financial Panic of 1907, Congress convened the Commission to study best
central banking practices around the world in depth in order to make
recommendations for meaningful reform. The result of that
investigation, the Federal Reserve System, still stands as a major
innovation that is one of the leading central banks in the world in
terms of both effectiveness and stability.
Our environment deserves the same thought and consideration.
______
Dr. Lowenthal. Thank you very much.
And I want to thank the panel for their testimony. I remind
the members of the Committee, as a Committee Rule, we impose a
5-minute limit on questions.
I am going to now begin to recognize Members for any
questions they may wish to ask.
I am going to defer my questions and begin with Congressman
Levin for the first set of questions.
Mr. Levin. Thank you, Chair Lowenthal. I appreciate you
holding today's hearing. And I am pleased that our Committee
continues to discuss the broad impacts of climate change.
This month so far, we have held hearings highlighting both
the incredibly important science that underpins our
understanding of climate change as well as the way our
communities have been directly affected by the changing
climate.
Dealing with climate change in a bold and aggressive way is
no fairytale. Doing nothing and expecting this problem to take
care of itself is the real fairytale. Our discussions have
clarified the urgent need to accelerate the country's clean
energy production in order to reduce greenhouse gas intensive
fossil few use. I would also add that the carbon footprint of
renewables is negligible when compared to fossil fuels. As an
example, the carbon emissions per unit of PV electricity is
one-tenth or less of even the most efficient natural gas power
plant.
A change to renewables is absolutely essential. However, we
must account for the way that this change will affect
communities across the Nation and ensure a just transition.
Clean energy production is an incredible economic opportunity
that should be shared by all, especially those that have been
dependent on fossil fuel production.
Further, we need to account for communities of color, rural
communities, and others who haven't historically been afforded
equal economic opportunities. In California, our economy has
grown because of the clean energy revolution.
I look forward to working with my colleagues and friends on
this Committee to ensure as many communities as possible can
share these benefits.
With that, I do have a couple of questions for Mr. Dennison
and Mr. Hille. And I would be interested to get both of your
perspective on this.
Mr. Dennison and Mr. Hille, in his written testimony, Dr.
Mason says, and I quote, ``Even assuming enough new jobs are
created to make up for the old jobs, new jobs requiring
different skills will render workers in the old sectors
obsolete and leave a `lost generation' behind.''
Mr. Dennison and Mr. Hille, what is wrong with this
mentality? Should we, as a society, just write off coal miners
or oil and gas workers as a ``lost generation''?
Mr. Dennison. No. The solar energy already employs more
than the oil industry and the coal industry combined in our
country. That is a key point. At Coalfield Development, we
incubated the first solar installation company in southern West
Virginia. Our first crew chief was a former underground miner
whose skills parlayed actually quite well. He was already a
licensed electrician. Because of the nature of the equipment
that he worked in, it only took 2 months to get him trained up.
And the work ethic is phenomenal. Work ethic is not our
problem. And because we can be adaptive and creative and we
have that gumption and grit, I don't think the current work
force has to be obsolete, no.
Mr. Hille. I would add that, because of the technical
nature of these jobs, as Brandon said, there is a very fast
adoption curve. There is also a lot of work in addition to the
work in renewables in energy efficiency, and that can also be
picked up very quickly.
The former miners that we have been working with in our new
energy interns program go through 6 months of training at the
end of which they are certified by the Business Professionals
Institute, BPI certified, in order to do this same work. Some
of them have been placed with housing organizations working on
some of the deficient housing stock that we have in Appalachia.
And also, some of them are interested in starting their own new
businesses, which, as you know, is the path to prosperity and
the great American Dream.
I will just mention too that this is an investment that
pays for itself. When you do energy efficiency, particularly
commercial energy efficiency, that can pay for itself very
quickly, because commercial energy meters charge both a demand
rate and a usage rate. And when you implement efficiency
measures, you reduce both of those. Often the demand rate is
half of a commercial energy bill.
As an example, we helped a grocery warehouse in London,
Kentucky, do a lighting retrofit. It was a $200,000 investment.
They are saving $100,000 a year on their utility costs. It paid
for itself in 2 years, and they are now seeing that as a direct
add to their bottom line.
A lot of this new investment can pay for itself.
Mr. Levin. Mr. Hille and Mr. Dennison, I thank you both
very much for your work to accelerate our transition to a
sustainable economy and for your work on a just transition.
With that, Mr. Chair, I will yield my time.
Dr. Lowenthal. Thank you.
I now recognize the Ranking Member, Mr. Gosar, for 5
minutes.
Dr. Gosar. Thanks, Mr. Chairman.
First of all, I would like to enter into the record two
articles from the Financial Times, ironically today, ``China's
demand for electric vehicles charges copper.'' That is always
great for my state because we are known as the Copper State,
one the five C's. And ``Australia hopes to cash in on new
cobalt rush.''
I would like to have those entered in the record.
By the way, for everybody that is wondering why I have this
up there, anybody want to gather what that is? That is a nodule
of rare earth that comes from the Mojave Desert in my district.
It is particularly high in nvidium, by the way. OK.
Mr. Dennison, you made some comments, that we need to
correct the record. You said that there were by far more solar
jobs in the country. That is not correct. The oil and gas
natural industry supports 10.3 million U.S. jobs and nearly 8
percent of the U.S. economy. As of 2017, 250,271 American
workers worked in the solar industry. This is 9,000 jobs fewer
than in 2016. AWEA has or this wind area has 105,000. So, be
careful with the facts.
And, by the way, this is from the Solar Foundation, so
these are facts from yours.
And I am really glad that you brought up the overburden
area because it is very pertinent to these things, these rare
earths, because overburden has been found to have lots of rare
earths that are attainable here.
I mean, repurposing miners for the new advent of that
mining industry is very, very important to me, particularly
when we are so dependent on these.
Dr. Mason, you mentioned in your testimony that renewable
technology, such as wind farms and solar panels, require
various critical minerals and rare earth elements to function.
The Green New Deal calls for the United States to run
exclusively on clean and renewable energy in 10 years.
Can you remark how the global market for critical minerals
may respond to a surge in demand of this magnitude? And, also,
talk to me about who controls the marketplace for these rare
earths.
Dr. Mason. Well, the article in the Financial Times this
morning was very, very interesting in that regard. It named
zero American companies involved in the Democratic Republic of
Congo. If you are familiar with the results of their elections
that were kind of muscled through last week, you will note they
are not democratic at all.
It also focused on the artisanal mining, people just
digging in the ground to get this valuable cobalt to sell it to
make more money than they can make from anywhere else. You can
call that small business if you want and entrepreneurial, but
it is tremendously dirty. There are no safety regulations. We
have children working in these artisanal mines, just as we had
in West Virginia many, many years ago, and tried to regulate
out the United States and did so ultimately successfully with
safety regulations.
These metals are extremely valuable. They are in demand
throughout the world. China is beating us to the rush, as are
European mining conglomerates operating in these countries with
virtually no safety regulations or environmental protections,
and those need to be calculated in to the overall environmental
footprint, not just carbon footprint, of these technologies.
And I would also like to note, even with regard to the
carbon footprint of solar, that doesn't factor in what is
called the rejected energy, as long as we keep wasting energy
and having it go out in the form of unused heat, which is where
66 percent of energy goes, according to the Lawrence Livermore
National Laboratory. We are going to be in the same problem for
a long time.
Dr. Gosar. Well, in fact, you bring it up, that we are
going to be 100 percent dictated. I mean, China has this
policy, One Belt, One Road, and they are actually extorting
much of the discipline and oversight and control of these rare
critical minerals. You bring up the causticness of particularly
smeltering these rare earths. They are bound, so current
technology uses high concentrations of sulfuric acid, in which
China is very lackadaisical. The United States is much more
disciplined within it.
In fact, a good friend of mine right now is experimenting
with high concentrations of citric acid in order to extract it.
So, we do these better than anybody else in the world, and if
new technology is so predicated upon it, we ought to be
investing in this. And overburden is one of those areas, if I
am not mistaken. Am I not correct, Dr. Mason?
Dr. Mason. Yes, absolutely. All energy is dirty. We need to
conserve energy.
Dr. Gosar. I am running out of time, but I have always been
one of those that believes in all of the above. In fact, my
good friend actually has a power company in north Scottsdale
that runs on solar during the day and gas at night, utilizing
that baseload principle. Not all energy is the same. You have
to be able to have a continual output, wattage, along those
lines, to make sure that everybody--when they flip the switch,
they can actually have power.
With that, I will yield back and wait for a second round.
Dr. Lowenthal. Thank you, Mr. Gosar.
Before I recognize Mr. Brown, I would like to say, my staff
has just supplied me--at the risk of just taking it to another
level, this discussion between Mr. Dennison and Mr. Gosar, in
terms of exactly the jobs that are impacted--and my
understanding, if we are talking about direct jobs, that is,
jobs where people are hired in or by the oil and gas industry,
versus direct jobs in solar, there are approximately 150,000,
at this moment, direct jobs where people are hired by the
industry in oil and gas, and 50,000 direct jobs where they are
hired by the industry in coal, which is still less than the
242,000 which are directly hired by solar at this moment.
But there is a discussion, and I think it is a reasonable
one, in terms of the impact and those are the direct jobs.
Dr. Gosar. If the gentleman would yield.
Dr. Lowenthal. Certainly.
Dr. Gosar. A lot of those jobs are for the construction of
solar fields, so they are temporary. They are not long lasting.
Dr. Lowenthal. I appreciate that. It is important that we
kind of clarify and we realize how complex these issues really
are.
Representative Brown, you have 5 minutes.
Mr. Brown. Thank you, Mr. Chairman. In the spirit of
Representative Bishop who is not here today, I am not going to
read my statement, yes, indeed. Although I may make reference
to it, or refer to it, I should say.
So, for the record, this hearing is not about the Green New
Deal. This hearing is about what are some of the things we need
to do to account for, make adjustments--as the energy sector
continues a kind of conversion or transition to renewable
energy sources and whether we are on the same pace that we are
on or whether we, through legislation and policy changes,
accelerate that pace. It is important for us to ask and answer
the questions, what does it mean for the labor force; what does
it mean for poor and communities of color; and how does
everyone benefit from this conversion, regardless of the rate
in which it occurs.
My question, which I think almost anyone can speak to--but,
Mr. Dennison, I certainly would like to hear your thoughts; Ms.
Farley, yours; and Ms. Shrader, yours--what are some specific,
and, Mr. Dennison, you mentioned the 33-6-3 model. What are
some specific Federal authorizations or appropriations, whether
in higher education, work force development, or Federal
procurement, that can assist the development of that work force
as we convert from carbon-based to renewable energy sources, or
that assist the creation of businesses, that might replace a
coal industry in a particular community? What are some of the
specific Federal authorizations and appropriations that we
might consider?
Thank you.
Mr. Dennison. I would be happy to answer that. For the
record, I am quoting a Forbes article from January 25, 2017,
with my figures. It is specific to electricity generation,
specific to that process, but also a lot of pipeline jobs, a
lot of gas jobs----
Mr. Brown. Mr. Dennison, are you responding to----
Mr. Dennison. Yes, sir.
Mr. Brown. Not on my time, please.
Mr. Dennison. The 33-6-3, the Appalachian Regional
Commission has been indispensable. It is an example of a place-
based Federal policy that I think is really important to this
transition, rather than broad policies that treat every region
the same. I will also say the RECLAIM Act is a really important
piece of legislation for our region, and so is the
reauthorization of the Abandoned Mine Lands Program in the
first place.
Something that happened a few years back was the AML Pilot
Program for my lands, which allowed for much more local
flexibility, to be innovative and to help start some new
businesses. I think that level of flexibility really is
critical.
Mr. Brown. Thank you.
Ms. Farley. Thank you. I would also offer--we talked a lot
about energy efficiency today, and just like reduce, reuse, and
recycle, that first R is reduce. I think when we have
conversations about the energy transition, we must remember the
importance of energy efficiency and the role energy efficiency
plays in reducing our demand and consumption for energy first.
And there are many opportunities on the national, state,
and local level to support energy policies, specifically
focused on increasing energy efficiency programs, as well as
weatherization assistance programs that have often suffered
from reduced Federal funding. These programs are specifically
tied to increased job opportunities in the energy efficiency
sector. As we have heard a couple of times today from Mr.
Dennison and Mr. Hille, energy efficiency can reduce high-
energy burdens on working families, which, in turn, supports
community wealth-building.
Energy efficiency improves economic stability by increasing
entrepreneurship and thriving wage/job opportunities. Energy
efficiency also increases health by reducing harmful carbon
emissions that pollute our air. And also again, energy
efficiency promotes economic development and community wealth-
building----
Mr. Brown. Thank you, Ms. Farley. I am sorry for
interrupting, but I do want to hear from Ms. Shrader. These 5
minutes go real fast.
Ms. Farley. Sure thing.
Ms. Shrader. The outdoor recreation economy is really
important in this piece, because I think a lot of rural
communities can transition to this outdoor recreation economy
and then build a diversified economy with manufacturing
companies and tech companies and health care right in their
communities, in these rural places. So, one of the things that
is really important to us is to take a lead on protecting
public lands.
The reauthorization of the Land and Water Conservation
Fund, and the public lands package, and also the CORE Act that
was just introduced by Congressman Neguse and Senator Bennet,
is really important in making sure that we have a diversified
economy that is going to be a great place for families to
thrive.
Mr. Brown. Thank you, Mr. Chairman.
Dr. Lowenthal. Thank you. And next, Mr. Westerman.
Mr. Westerman. Thank you, Mr. Chairman. Thank you to the
witnesses for being here today.
As the gentleman said, this isn't about the Green New Deal,
but obviously everything about energy would play into this idea
of a Green New Deal. So, I have been trying to look at the
scope of what we are talking about. If we truly are trying to
replace all fossil fuels in 10 years, and if we are looking at
world energy production or world energy use, the data that I
found shows--and this was 2006 data, so it is a little bit
old--but the world used 471 quads of energy--a quad is 1 with
15 zeros after it--a quadrillion BTUs of energy, and the world
use is projected in 2020 to use 500 quads of energy.
Of those 471 quads, 408 of it were produced from fossil
fuels, and only 63 quads of the energy consumed in the world
came from renewables. So, if you look globally, that is quite a
challenge to replace 408 quads--actually, more than that now--
of fossil fuels in a 10-year time frame.
But if we look at it just here in the United States--in
2017, the United States used 98 quads of energy. And of that,
77 percent of it, or 76 quads, came from fossil fuels. And the
highest rate was from natural gas, about 32 percent; petroleum,
about 28 percent; and coal, about 18 percent. So, here in the
United States, we still only have a little over 20 percent of
our energy that comes from renewables, and that includes
nuclear.
And I know a lot of people don't like to include nuclear in
it. If you take the nuclear out, it is only less than 13
percent of all of our energy comes from renewables right now.
So, we are talking about a huge transition to go to 100
percent renewables, no fossil fuels in 10 years, especially if
we don't like nuclear, which is a very clean form of energy as
well.
But I was interested in what Mr. Dennison said about the
number of jobs in solar versus coal and petroleum. He contends
that there are more jobs in solar now than coal and petroleum
combined, which creates a bit of a conundrum, because we are
trying to figure out what to do with displaced coal workers.
And since solar is only a tiny fraction of the renewables that
are out there now, yet there are more people in that field than
in coal and petroleum combined, it seems like there would be a
huge demand and jobs available for these displaced coworkers,
if you just train them to be in the solar field.
Can any of our panelists tell me why there is not a huge
demand for workers in the solar field and why we are having to
come up with tourism and other forms of employment to help
these displaced workers?
Mr. Dennison. There is demand. We just certified 20 of them
last year, and although renewables still make up a small piece
of the pie, renewables have been the fastest growing piece of
the pie. There is lots of innovation and investment in
renewables.
Mr. Westerman. Dr. Mason, can you address, from an economic
standpoint, the manpower per million BTUs it takes to do
renewable energy versus fossil fuel energy? And would there be
a lot more workers required in the renewable field?
Dr. Mason. Now you are getting into math that makes more
sense. From an economic perspective, it is not just number of
jobs, it is the value of those jobs, whether denominated in
dollars or denominated in energy production, as you just did
with your mathematics.
The examples quoted here, one required 6 months of
additional training. It is wonderful that that is provided. I
come originally from Gary, Indiana, and have faced a severe
transition in that region of the country through the 1980s and
1990s. Retraining is absolutely crucial. We can overcome some
of these humps, but currently, none of the legislation plans
for that. We have programs in place in small places of the
country. We do need to expand those to make this a meaningful
transition.
Mr. Westerman. If it takes more workers per unit of output,
won't that drive the price extremely high?
Dr. Mason. Well, either the price has to be high or the
payment to workers has to be low, but we are not neutral with
respect to price.
Mr. Westerman. I am out of time.
Dr. Lowenthal. Representative Case, you have 5 minutes.
Mr. Case. Thank you, Mr. Chair, and thank you for the
courtesy of letting me join you today.
Dr. Bissett--did I say that right?
Dr. Bissett. Yes, sir.
Mr. Case. OK. Thank you. My questions to you have two big
assumptions built into them, that I am asking you to get beyond
for a little bit. Number 1, climate change is real; Number 2,
energy transition is inescapable, it is just when and how we do
it. That is my working assumption. You may not agree with what
I just put forward, but I want to focus on, if I am correct,
and if Congress as a result, a majority of Congress, enacts
policies that are purposely designed to move us to renewable
energy at the expense of coal, and if there is, therefore, a
tremendous consequence to the businesses and communities that
you represent, how do we best transition those communities?
That is my critical question. I am not asking you whether
we have to transition or not. I am just asking you, for now,
how do we do it? How do we best do it?
And as a prelude, just tell me a little bit more about your
chamber. You have 550 businesses. How many of those businesses
are directly or indirectly dependent on coal?
Dr. Bissett. When I took the job, Congressman, I didn't
think many were, and I quickly learned I was wrong. Again, my
chamber is outside of the coalfields and a great many are. And
again the lawyers, engineers, and accountants like I talked
about, land holding company, barges, all those things kind of,
not the coal mining jobs, but the indirect jobs.
As to your question, my big concern would be that you can't
just look at those direct jobs that direct impact, you have to
look beyond that.
Mr. Case. OK.
Dr. Bissett. Because when the downturn occurred,
Congressman, it really affected us there, and we don't really
mine coal where my chamber is located.
Mr. Case. I see. So, has your chamber institutionally
considered the best form of transition for a post-coal energy
world? Have you actually undertaken the worst-case scenario
discussion, from your perspective, of how do we best
transition?
Mr. Dennison, in his testimony, had three bullets. His
bullets were: (1) create a national just transition task force;
(2) create a national program to support coal communities to
include the POWER Act; and (3) pass Federal legislation to
improve the conditions of former coal workers in distressed
communities, to include the RECLAIM Act. Is that a good
program, from your perspective? Do you think that will get the
job done? How do we plan for a transition in a way that will
best assist other communities that will be negatively impacted
if we don't get ahead of the transition now?
Dr. Bissett. It is a great question. It will take time to
do that. Coalfield Development is a dues paying member of my
chamber. Brandon is a board member of my chamber, and we
support a lot of his work force development programs and
recently adopted a resolution in support of it.
We may disagree on the position we are in, and I am not
trying to move away from your assumptions, but Appalachia needs
more educational team and Appalachia needs livelihoods. And
that goes back to my concern. When we saw the downturn
previously, we were wondering when it would stop. Seeing it
return now, our concern again is that there are going to be
votes made here that will put us back in that jeopardy.
It is a very tenuous time, a fragile time, like I was
talking about. But, no, we are supportive of other economic
development. I think we can do both, Congressman. I think we
can mine coal, I think we can have a new economy. I think we
can do it all. Because that new economy will benefit from low-
cost, reliable electricity generated by natural gas and coal.
Mr. Case. I am not sure I agree with your assumption over
the long term. I think you are taking a bit of a short- to mid-
term view of it. I am looking out not 10, but 20-plus years. If
you had the time to plan for some kind of a transition where
coal would be not acceptable anymore in any major scale, how do
we get ahead of that? That is really my question, how do we
together plan the best possible transition here? Going back to
one question, you haven't undertaken that scenario within the
chamber or anything like that, like, how do we actually move
beyond this?
Dr. Bissett. We haven't currently, because right now, there
has been this expansion, this growth, especially in the
southern coalfields. Northern coalfields have not been that way
in West Virginia, but they have had the natural gas----
Mr. Case. Has anybody in the coal industry done this
transition thinking and planning in the coal communities? Has
anybody actually come together for a larger picture, how do we
transition out of this, if, in fact, we do have to have an
energy transition away from fossil fuel----
Dr. Bissett. I am sure as they look at long-term
investments in their coal mines and wells, I am sure there is
concern about that. But at the same time, the market is
currently there and they are feeding that market. If they don't
feed it in the United States, they are going to feed it
internationally.
Mr. Case. No, I understand that. That is currently.
Dr. Bissett. Yes, sir.
Mr. Case. And I am trying to think out into the future for
the most orderly way of doing this as opposed to having
circumstances thrusted upon you, which is not a very good time
to do emergency transition planning.
Dr. Lowenthal. Thank you.
And now we turn to Representative Graves for your 5 minutes
of questions.
Mr. Graves. Thank you, Mr. Chairman. I appreciate you
holding this hearing, and I appreciate all of your testimony
and appreciate you being here today.
Ms. Farley, I represent south Louisiana, and I was looking
at your testimony where you made mention that Birmingham,
Atlanta, New Orleans, and Memphis hold the greatest--and I am
quoting your testimony--hold the greatest energy burdens for
low-income households.
I pulled some data that we had used last week in a hearing
showing the different energy prices per kilowatt hours in the
states. Alabama, for example, is 12.41 per kilowatt hour;
Georgia is 12.26; Tennessee is 10.79; and Louisiana, coming in
at the lowest cost in the Nation, is 9.37. Whereas other
states--we had the governor of Massachusetts here last week who
was here advocating for renewable policies. The state of
Massachusetts is 21.11 cents per kilowatt hour, more than
double that of Louisiana and nearly double that of the other
states.
Other states that are fun to pick on sometimes, Mr. Huffman
and Mr. Lowenthal, just for fun, 19.9 cents per kilowatt hour.
So, I guess I am just trying to understand, it seems like lower
prices would----
Mr. Huffman. Would the gentleman yield for a correction?
Mr. Graves. Can I get an answer first?
Mr. Huffman. On California? Well, we will get back to that.
Mr. Graves. All right. Does that make sense? It seems like
lower prices would be helpful versus the higher prices that
other states have. I just wonder if you could respond to that.
Ms. Farley. Yes, absolutely. Rates alone do not equal
bills. When we are talking about energy burden, we are talking
about the fully burdened cost of a bill to households and
ratepayers. So, yes, there are some states in the South that do
boast lower rates, but that does not make a bill.
Mr. Graves. It doesn't, but so if we had Massachusetts
rates more than doubled, do you think that would make it easier
to afford?
Ms. Farley. I am not familiar with the numbers of
Massachusetts. I do applaud their efforts in their shift to
renewable energy and saw that testimony last week. But in the
South, again, while many states and investor-owned utilities
boast lower than average national rates, rates alone do not
equal utility bills. There are many fees and sometimes punitive
in regards to solar across many states in the South that do
equal higher bills and, ultimately, higher burdens on lower
income households.
Mr. Graves. Mr. Chairman, I would ask to submit for the
record the documents showing the various rates. I am not sure
that I understand how energy efficiency would be the burden of,
how actions of a state could prevent an individual from
pursuing energy efficiency improvements in their own homes, but
again----
Dr. Lowenthal. That will be accepted without objection.
[The information follows:]
Submission for the Record by Rep. Graves
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Trends & Observations from State Data
From this data, we can see the state with the lowest electric rates is
Louisiana. On average, homes in Louisiana pay 9.53 cents per kWh.
Residential customers in Texas, the country's largest deregulated
market for electricity, pay a relatively low price for electricity as
well of 11.68 cents per kWh.
The state that saw the great increase in prices for electricity is
Rhode Island. Rhode Island customers are paying nearly 20% more for
electricity in 2018.
______
Mr. Graves. Thank you. And secondly, Mr. Chairman, I would
ask, while I am doing UCs for fun, this is a document, May
2018, from the National Association of State Energy Officials,
showing that the jobs from coal, natural gas, oil, as compared
to solar, aren't even kind of close. As a matter of fact, when
you add them up quickly, it looks like you are about three
times more jobs in those fields than in the solar market.
Dr. Lowenthal. Without objection.
Mr. Graves. Thank you.
Last, Dr. Mason, I understand you have worked for the
Office of the Comptroller of the Currency, Federal Reserve,
European Union, and other impressive places and, of course,
also professor at LSU. So, thank you very much for being here.
I just want to quickly ask you to comment on the Green New Deal
or other concepts where the United States unilaterally takes
aggressive actions to reduce emissions, just comparatively
talking about the low kilowatt hour in Louisiana that largely
is a natural gas fuel source for electricity generation. What
happens globally when you squeeze the United States in terms of
emissions, what happens globally when you do something like
that?
Dr. Mason. Well, these are strategic resources recognized
worldwide, and just socioeconomically, when you start
redistributing strategic resources around the world, countries
will fight for strategic resources. They will fight through
negotiating processes, through international relations
processes, and sometimes even physically fight for those
resources.
So, when we start moving around the distribution of those
resources, we really put the world at risk in a lot of
different ways. I am not saying that that should prevent us
from doing so.
Mr. Graves. Sure.
Dr. Mason. I am merely saying that we need to look at this
problem in a holistic, multi-dimensional way to even try to
understand the multiple tentacles that reach out.
I want to point out that the jobs issue, for instance, is
really not just an energy jobs issue. It is relating to the
hollowing out of the middle of America, and that hollowing out
is occurring fundamentally through access to education, which
isn't equally attainable in the middle of the country right
now. We need to develop this country overall, and this is a
much larger problem than energy, although it kind of starts
with energy, because if we have efficient energy from a variety
of sources, we can better develop.
So, these things are what we call endogenous process. There
are various feedback loops involved with them. It is very
complex. There are sciences dealing with analyzing these. And I
think, Chairman Lowenthal, please begin those discussions,
respectful discussions, so that we can work out some of these
feedback mechanisms and put in place meaningful policies to not
just help coalfields, but expand some of these programs
nationwide to the core of America, and think about how much
that is going to take, where the money is going to come from,
and let's get moving.
Mr. Graves. I yield back. Thank you.
Dr. Lowenthal. Thank you.
Now, Representative Huffman.
Mr. Huffman. Thanks.
And, Mr. Graves, the witness gave part of my correction
that I wanted to send your way, but we have to look at energy
bills and not just rates. That is super important when you look
at a state like California that has invested tremendously in
energy efficiency. Because of those investments, bills have
come way down, even though if you look at the unit cost of
energy in rates, it would appear to be higher. So, I would
really urge you to take a look at that and then let's see where
the states compare with each other.
Mr. Graves. Thank you. And we will also take your moderate
temperatures.
Mr. Huffman. Right. We can do all kinds of interesting
cultural exchanges. I want some of your gumbo.
I was interested in the discussion that I just caught
involving Mr. Bissett. And, Mr. Hille, I noticed you shaking
your head a little bit during some of the testimony regarding
this coal renaissance that I would argue is kind of a temporary
thing. The Trump administration has gone out of its way,
engaged in herculean efforts to breathe life into what I think
most other objective observers would say is a dying industry,
coal.
One of the many indications of this huge effort across the
aisle to prop up coal against all of the other forces that are
causing it to be a declining industry involves the zombie coal
earmark that Mr. McClintock and I even worked on in prior
years. There was actually this earmark from the height of the
cold war that required U.S. military bases in Germany to buy a
specific type of coal from Pennsylvania, and it was not
efficient. It was absolutely corporate cronyism of the worst
order, and Mr. McClintock and I worked together to eliminate
that from the Defense budget.
It is back in this year. And once again, American military
bases in Germany are buying Pennsylvania coal because Congress
says they have to and the Trump administration says they have
to. So, there is an incredible effort to prop up coal for a
little while longer. I would argue it is a little bit like
these warm days in February we have here in Washington. The
cherry blossoms will kind of start to come out, but it is not
really spring.
I want to hear your thoughts, Mr. Hille, because you were
shaking your head.
Mr. Hille. I think what is important to understand about
what has been a fairly small uptick in coal production is that
it is largely in metallurgical coal. And I think Bill would
agree with me on that. And it is important to understand,
metallurgical coal is geologically a different type of coal
that doesn't exist everywhere. There is some in southern West
Virginia. There is some in Virginia. There is a very narrow
band of it in far eastern Kentucky, but most of Kentucky's coal
is thermal coal or steam coal, which is used to generate
electricity, and that has simply not come back.
We had a minor increase in 2017 of about 30 jobs in
Kentucky, and then in 2018, we lost another 200. So, the
thermal coal is not coming back in Appalachia. And to the
extent that it will continue to be a part of our energy mix--
and it will for some time--it is not going to come from
Appalachia, because our coal is harder to get. It is more
expensive to mine. The good accessible seams have been mined
out, and it is not cost effective to blow off the top of a
mountain when you can go somewhere else and scoop it off the
surface of the ground.
So, Appalachia is not going to be competitive, and that is
why this work of creating a just transition for these
communities is critical, and we have the means and the
processes to do that.
Mr. Huffman. And to not do that long-term transition
planning just because there appears to still be a market right
now, how would you characterize that?
Mr. Hille. I think short-sighted would be a good way to
describe it. And, in fact, there are a lot of significant
efforts going on. Congressman Rogers and then Governor Beshear
in Kentucky created the SOAR initiative, which has been a large
planning process, recognizing that thermal coal wasn't going to
come back, that Kentucky coal wasn't going to come back.
We have the largest concentration of distressed counties in
Appalachia, and there is broad recognition that we need to do
this. And the plan that SOAR has put together is a broad plan
and it has a strong emphasis on entrepreneurship, as does the
Appalachian Regional Commission.
Mr. Huffman. All right, so while I have you, I know you
have been a huge supporter of solar deployment in Appalachia.
Do you see a future for broader adoption of solar in the
region, and can you describe some of the ways the Federal
Government can help with solar deployment in the region?
Mr. Hille. We are actually seeing an interesting uptick in
demand for solar in small commercial enterprises. MACED is a
CDFI. We are a small business lender. We work with our clients
to do energy efficiency first because that is the low-hanging
fruit, but many of them are now coming to us first saying, no,
I want solar. We say, OK, but if you do the efficiency, you
don't have to put as much solar on your roof. But they see it
as part of marketing. They also see it as a way to respond to
rising energy bills. I think there are probably a lot of things
the Federal Government could do to support and encourage that.
Mr. Huffman. Thank you very much. I yield back.
Dr. Lowenthal. Thank you.
I now recognize Ms. Cheney for 5 minutes of questions.
Ms. Cheney. Thank you very much, Mr. Chairman.
Mr. Chairman, I would like to ask unanimous consent to
enter a document into the record that is titled, ``Overview and
Frequently Asked Questions'' that initially appeared on
Congresswoman Ocasio-Cortez's website and was submitted to NPR.
Dr. Lowenthal. Without objection.
[The information follows:]
LAUNCH: Thursday, February 7, at 8:30 AM.
Overview
We will begin work immediately on Green New Deal bills to put the nuts
and bolts on the plan described in this resolution (important to say so
someone else can't claim this mantle).
This is a massive transformation of our society with clear goals and a
timeline.
The Green New Deal resolution a 10-year plan to
mobilize every aspect of American society at a scale not seen
since World War 2 to achieve net-zero greenhouse gas emissions
and create economic prosperity for all. It will:
Move America to 100% clean and renewable
energy
Create millions of family supporting-wage,
union jobs
Ensure a just transition for all
communities and workers to ensure economic security for
people and communities that have historically relied on
fossil fuel industries
Ensure justice and equity for frontline
communities by prioritizing investment, training,
climate and community resiliency, economic and
environmental benefits in these communities
Build on FDR's second bill of rights by
guaranteeing:
A job with a family sustaining wage,
family and medical leave, vacations, and retirement
security
High-quality education, including
higher education and trade schools
Clean air and water and access to
nature
Healthy food
High-quality health care
Safe, affordable, adequate housing
Economic environment free of monopolies
Economic security for all who are
unable or unwilling to work
There is no time to waste.
IPCC Report said global emissions must be cut by
by 40-60% by 2030. US is 20% of total emissions. We must get to
0 by 2030 and lead the world in a global Green New Deal.
Americans love a challenge. This is our moonshot.
When JFK said we'd go to the by the end of the
decade, people said impossible.
If Eisenhower wanted to build the interstate
highway system today, people would ask how we'd pay for it.
When FDR called on America to build 185,000 planes
to fight World War 2, every business leader, CEO, and general
laughed at him. At the time, the U.S. had produced 3,000 planes
in the last year. By the end of the war, we produced 300,000
planes. That's what we are capable of if we have real
leadership.
This is massive investment in our economy and society, not expenditure.
We invested 40-50% of GDP into our economy during
World War 2 and created the greatest middle class the US has
seen.
The interstate highway system has returned more
than $6 in economic productivity for every $1 it cost.
This is massively expanding existing and building
new industries at a rapid pace--growing our economy.
The Green New Deal has momentum.
92 percent of Democrats and 64 percent of
Republicans support the Green New Deal.
Nearly every major Democratic Presidential
contender say they back the Green New deal including: Elizabeth
Warren, Cory Booker, Kamala Harris, Jeff Merkeley, Julian
Castro, Kirsten Gillibrand, Bernie Sanders, Tulsi Gabbard, and
Jay Inslee.
45 House Reps and 330+ groups backed the original
resolution for a select committee.
Over 300 local and state politicians have called
for a federal Green New Deal.
New Resolution has 20 co-sponsors, about 30 groups
(numbers will change by Thursday).
FAQs
Why 100% clean and renewable and not just 100% renewable? Are you
saying we won't transition off fossil fuels?
Yes, we are calling for a full transition off fossil fuels and zero
greenhouse gases. Anyone who has read the resolution sees that we spell
this out through a plan that calls for eliminating greenhouse gas
emissions from every sector of the economy. Simply banning fossil fuels
immediately won't build the new economy to replace it--this is the plan
to build that new economy and spells out how to do it technically. We
do this through a huge mobilization to create the renewable energy
economy as fast as possible. We set a goal to get to net-zero, rather
than zero emissions, in 10 years because we aren't sure that we'll be
able to fully get rid of farting cows and airplanes that fast, but we
think we can ramp up renewable manufacturing and power production,
retrofit every building in America, build the smart grid, overhaul
transportation and agriculture, plant lots of trees and restore our
ecosystem to get to net-zero.
Is nuclear a part of this?
A Green New Deal is a massive investment in renewable energy
production and would not include creating new nuclear plants. It's
unclear if we will be able to decommission every nuclear plant within
10 years, but the plan is to transition off of nuclear and all fossil
fuels as soon as possible. No one has put the full 10-year plan
together yet, and if it is possible to get to fully 100 percent
renewable in 10 years, we will do that.
Does this include a carbon tax?
The Green New Deal is a massive investment in the production of
renewable energy industries and infrastructure. We cannot simply tax
gas and expect workers to figure out another way to get to work unless
we've first created a better, more affordable option. So we're not
ruling a carbon tax out, but a carbon tax would be a tiny part of a
Green New Deal in the face of the gigantic expansion of our productive
economy and would have to be preceded by first creating the solutions
necessary so that workers and working class communities are not
affected. While a carbon tax may be a part of the Green New Deal, it
misses the point and would be off the table unless we create the clean,
affordable options first.
Does this include cap and trade?
The Green New Deal is about creating the renewable energy economy
through a massive investment in our society and economy. Cap and trade
assumes the existing market will solve this problem for us, and that's
simply not true. While cap and trade may be a tiny part of the larger
Green New Deal plan to mobilize our economy, any cap and trade
legislation will pale in comparison to the size of the mobilization and
must recognize that existing legislation can incentivize companies to
create toxic hotspots in frontline communities, so anything here must
ensure that frontline communities are prioritized.
Does a GND ban all new fossil fuel infrastructure or nuclear power
plants?
The Green New Deal makes new fossil fuel infrastructure or nuclear
plants unnecessary. This is a massive mobilization of all our resources
into renewable energies. It would simply not make sense to build new
fossil fuel infrastructure because we will be creating a plan to
reorient our entire economy to work off renewable energy. Simply
banning fossil fuels and nuclear plants immediately won't build the new
economy to replace it--this is the plan to build that new economy and
spells out how to do it technically.
Are you for CCUS?
We believe the right way to capture carbon is to plant trees and
restore our natural ecosystems. CCUS technology to date has not proven
effective.
How will you pay for it?
The same way we paid for the New Deal, the 2008 bank bailout and
extended quantitative easing programs. The same way we paid for World
War II and all our current wars. The Federal Reserve can extend credit
to power these projects and investments and new public banks can be
created to extend credit. There is also space for the government to
take an equity stake in projects to get a return on investment. At the
end of the day, this is an investment in our economy that should grow
our wealth as a nation, so the question isn't how will we pay for it,
but what will we do with our new shared prosperity.
Why do we need a sweeping Green New Deal investment program? Why can't
we just rely on regulations and taxes and the private sector to invest
alone such as a carbon tax or a ban on fossil fuels?
The level of investment required is massive. Even if every
billionaire and company came together and were willing to
pour all the resources at their disposal into this
investment, the aggregate value of the investments they
could make would not be sufficient.
The speed of investment required will be massive. Even if
all the billionaires and companies could make the
investments required, they would not be able to pull
together a coordinated response in the narrow window of
time required to jump-start major new projects and major
new economic sectors. Also, private companies are wary of
making massive investments in unproven research and
technologies; the government, however, has the time horizon
to be able to patiently make investments in new tech and
R&D, without necessarily having a commercial outcome or
application in mind at the time the investment is made.
Major examples of government investments in ``new'' tech
that subsequently spurred a boom in the private section
include DARPA-projects, the creation of the internet--and,
perhaps most recently, the government's investment in
Tesla.
Simply put, we don't need to just stop doing some things
we are doing (like using fossil fuels for energy needs); we
also need to start doing new things (like overhauling whole
industries or retrofitting all buildings to be energy
efficient). Starting to do new things requires some upfront
investment. In the same way that a company that is trying
to change how it does business may need to make big upfront
capital investments today in order to reap future benefits
(for e.g., building a new factory to increase production or
buying new hardware and software to totally modernize its
IT system), a country that is trying to change how its
economy works will need to make big investments today to
jump-start and develop new projects and sectors to power
the new economy.
Merely incentivizing the private sector doesn't work--e.g.
the tax incentives and subsidies given to wind and solar
projects have been a valuable spur to growth in the US
renewables industry but, even with such investment-
promotion subsidies, the present level of such projects is
simply inadequate to transition to a fully greenhouse gas
neutral economy as quickly as needed.
Once again, we're not saying that there isn't a role for
private sector investments; we're just saying that the
level of investment required will need every actor to pitch
in and that the government is best placed to be the prime
driver.
Resolution Summary
Created in consultation with multiple groups from environmental
community, environmental justice community, and labor community
5 goals in 10 years:
Net-zero greenhouse gas emissions through a fair and just
transition for all communities and workers
Create millions of high-wage jobs and ensure prosperity
and economic security for all
Invest in infrastructure and industry to sustainably meet
the challenges of the 21st century
Clean air and water, climate and community resiliency,
healthy food, access to nature, and a sustainable
environment for all
Promote justice and equity by stopping current, preventing
future, and repairing historic oppression of frontline and
vulnerable communities
National mobilization our economy through 14 infrastructure and
industrial projects. Every project strives to remove greenhouse gas
emissions and pollution from every sector of our economy:
Build infrastructure to create resiliency against climate
change-related disasters
Repair and upgrade U.S. infrastructure. ASCE estimates
this is $4.6 trillion at minimum
Meet 100% of power demand through clean and renewable
energy sources
Build energy-efficient, distributed smart grids and ensure
affordable access to electricity
Upgrade or replace every building in US for state-of-the-
art energy efficiency
Massively expand clean manufacturing (like solar panel
factories, wind turbine factories, battery and storage
manufacturing, energy efficient manufacturing components)
and remove pollution and greenhouse gas emissions from
manufacturing
Work with farmers and ranchers to create a sustainable,
pollution and greenhouse gas free, food system that ensures
universal access to healthy food and expands independent
family farming
Totally overhaul transportation by massively expanding
electric vehicle manufacturing, build charging stations
everywhere, build out high-speed rail at a scale where air
travel stops becoming necessary, create affordable public
transit available to all, with goal to replace every
combustion-engine vehicle
Mitigate long-term health effects of climate change and
pollution
Remove greenhouse gases from our atmosphere and pollution
through afforestation, preservation, and other methods of
restoring our natural ecosystems
Restore all our damaged and threatened ecosystems
Clean up all the existing hazardous waste sites and
abandoned sites
Identify new emission sources and create solutions to
eliminate those emissions
Make the US the leader in addressing climate change and
share our technology, expertise and products with the rest
of the world to bring about a global Green New Deal
Social and economic justice and security through 15 requirements:
Massive federal investments and assistance to
organizations and businesses participating in the green new
deal and ensuring the public gets a return on that
investment
Ensure the environmental and social costs of emissions are
taken into account
Provide job training and education to all
Invest in R&D of new clean and renewable energy
technologies
Doing direct investments in frontline and deindustrialized
communities that would otherwise be hurt by the transition
to prioritize economic benefits there
Use democratic and participatory processes led by
frontline and vulnerable communities to implement GND
projects locally
Ensure that all GND jobs are union jobs that pay
prevailing wages and hire local
Guarantee a job with family sustaining wages
Protect right of all workers to unionize and organize
Strengthen and enforce labor, workplace health and safety,
antidiscrimination, and wage and hour standards
Enact and enforce trade rules to stop the transfer of jobs
and pollution overseas and grow domestic manufacturing
Ensure public lands, waters, and oceans are protected and
eminent domain is not abused
Obtain free, prior, and informed consent of Indigenous
peoples
Ensure an economic environment free of monopolies and
unfair competition
Provide high-quality health care, housing, economic
security, and clean air, clean water, healthy food, and
nature to all
______
Ms. Cheney. Thank you very much, Mr. Chairman.
Mr. Chairman, I appreciate very much the opportunity to
discuss this issue today of how we transition our communities
to a so-called green economy. My state of Wyoming, as I am sure
our witnesses know, is the Nation's largest coal-producing
state, and we also know in Wyoming that coal is going to
continue to be a crucially important source of baseload power
for the Nation, that the reliability is something that simply
cannot be replaced, and it is a national security issue in
addition to an economic issue.
My constituents are obviously very concerned about this
notion that we are somehow going to transition over the course
of 10 years here to an economy that is entirely run on green
energy. And certainly, they have concerns about the fossil fuel
aspect of that, but I have to say, one of the issues that
people are particularly concerned about is the extent to which
we are no longer going to have air travel, apparently,
according to some of the frequently asked question answers we
have seen.
So, I guess I would like to start by asking each witness to
tell me exactly how they arrived in Washington, DC, for this
hearing. And it is just a one-word answer, and I will start
with you, Ms. Farley.
Ms. Farley. On a plane.
Ms. Shrader. On a plane.
Dr. Bissett. A big white pick-up truck.
Mr. Hille. A truck.
Mr. Dennison. Plane.
Dr. Mason. Air and Metro.
Ms. Cheney. Thank you very much. I would assume that each
of the witnesses who believes that we should, in fact, move
toward net zero emissions, would say that we ought to do so
gradually, not suddenly. So, I would ask--and again I will
start with you, Ms. Farley--if you could describe for me,
perhaps, exactly how we will do that gradually? I would assume
we are not just going to wait 10 years and then all of a sudden
tell people they can't fly, but that we will be in a situation
where, over the course of 10 years, we would somehow gradually
work our way out of air travel. And I would also have to guess
that that would involve some sort of prioritization.
I assume even my colleagues on the other side of the aisle
who support the Green New Deal and perhaps the witnesses who
support the Green New Deal wouldn't advocate, for example, that
we cancel things like life flights. They wouldn't advocate that
we immediately move away from being able to transport people
who have life-threatening illnesses by plane, but that there
would be some other prioritization there.
So, Ms. Farley, could you tell me exactly how the
government should prioritize air travel and the gradual move
away from all air travel?
Ms. Farley. I would depend on the FAA and other Federal
agencies that focus on air travel to tackle that question. The
Green New Deal is a sweeping collection of recommendations and
policies----
Ms. Cheney. Thank you very much, Ms. Farley.
So, the FAA then, I would assume, I guess we are going to
set up a situation where the FAA then can tell individual
citizens which of their air travel is worthy and important and
which isn't? And it would seem to me, I guess we would then
have a situation where the FAA could say, for example, you know
what, vacation travel, that is not essential. We have to make
sure that we can do the air travel for the people that really
need it, so no vacation travel.
Would you say we are going to have some sort of a vacation
commissar set up in the government to determine what kind of
air travel makes sense and what kind doesn't? Ms. Shrader,
maybe I will go to you on that question.
Ms. Shrader. With all due respect, I came here to talk
about my community and how we have transitioned----
Ms. Cheney. So, you don't support the Green New Deal then?
Ms. Shrader. I haven't, I am not an expert on the Green New
Deal.
Ms. Cheney. OK.
Mr. Huffman. Will the gentlelady yield for a correction on
how she is badly mischaracterizing the resolution on the Green
New Deal?
Ms. Cheney. No, I won't yield, Mr. Huffman. Mr. Huffman,
you had plenty of time----
Mr. Huffman. This is fiction. This entire line of
questioning is fiction.
Ms. Cheney. I would like to have my time restored, please,
Mr. Chairman.
Let me ask you then, are there any other witnesses on the
panel who do support the Green New Deal?
Nobody supports the Green New Deal on this panel?
Interesting.
Ms. Farley. I support many of the policies and
recommendations in the Green New Deal, specifically the support
to make sure that any climate solution strategy is centered in
equity. I do not see anything about----
Ms. Cheney. Thank you very much. I appreciate that.
Reclaiming my time, I would just say that I think it is
going to be crucially important for us to recognize and
understand, when we outlaw plane travel, we outlaw gasoline, we
outlaw cars, I think actually probably the entire U.S. military
because of the Green New Deal, that we are able to explain to
our constituents and to people all across this country what
that really means. And even when it comes down to something
like air travel, which the frequently asked questions say they
want to eliminate within the next 10 years, that means that the
government is going to be telling people where they can fly to
and where they can't. And I would assume I guess that means our
colleagues from California are going to be riding their
bicycles back home to their constituents.
Thank you very much. I yield back.
Dr. Lowenthal. Thank you. I am going to yield the first 1
minute of my 5 minutes to Representative Huffman.
Mr. Huffman. Thank you. It is not really enough time to
fully fact check what we just heard, which was an entire line
of questioning based on absolute hooey. I am co-sponsor of the
Green New Deal resolution, and you have to read the resolution,
OK? Not take extrapolations from some unofficial FAQs that
actually were taken off an individual Congress Member's
website, because they do not reflect what is actually in the
resolution. But the notion that any of us who are supporting
the actual resolution, which you need to read, that we want to
ban all air travel, that is crazy. That is absolutely crazy.
None of us want to do that.
I was just listening as the gentlelady said that we want to
outlaw cars and get rid of the military. There comes a point
where this type of questioning is so disingenuous and so
completely disconnected from anything factual that there ought
to be a mechanism to strike it from the record.
So, with that, I yield back.
Dr. Lowenthal. Thank you. And I will resume the rest of my
time.
My first question is for Ms. Farley. I am trying to
understand or for you to help us reconcile some differences. In
your written testimony, you talked about, and I will just read
the first sentence: ``We know that with data-informed certainty
that systemically disenfranchised, under-resourced communities
and communities of color in the South bear a disproportionate
burden of the negative impacts of climate change and carbon-
based energy production.''
How do you reconcile that statement with a statement that
we heard in last week's presentation, which you indicated you
also listened to, where this Committee heard testimony from a
witness who argued that the increased use of fossil fuels is
the best way to address high-energy costs in low-income African
American communities? This is completely at odds. Can you kind
of help us reconcile that difference?
Ms. Farley. Yes, absolutely. I agree that is completely at
odds. And similar to the rates versus bills question, I believe
that it is imperative that we understand that costs of energy
are not just about the energy costs. The disproportionate
burdens that people in the South and communities of color bear
when located within 30 miles of coal-fired power plants--
approximately 68 percent, actually, of African Americans live
within 30 miles of a coal-fired power plant--suffer from low
property values, increased accounts of lung disease, asthma,
and asthma-associated attacks.
These asthma-associated attacks also impact the healthcare
and education sectors as emergency room visits,
hospitalizations, and missed school days from children lead to
missed work and job insecurity for their parents. All of these
things are increased due to the harmful, life-threatening
emissions of fossil fuel-based energy production.
So, that is where I would say there is no reconciliation
between the ability of fossil fuels to provide benefit to
under-resourced communities or communities of color.
Dr. Lowenthal. Thank you.
Ms. Shrader, you mentioned in your testimony, how economies
that are dependent upon commodities such as oil and gas and
coal are highly vulnerable, repeated cycles of boom or bust.
Not the image that we hear today, but that has really been what
the history has been. And then you offer to us another
alternative--outdoor recreation and others, in terms of
protection of public lands, how to use public lands. Does
outdoor recreation have the similar boom-or-bust cycles? Or can
you talk to us about that? Because you are offering a different
view of the economy year to year also. If you can explain that
to us.
Ms. Shrader. Yes, that is a great question. We have not
seen a boom-bust cycle on outdoor recreation because it is an
industry that is so important, engrained in the quality of
life. So, what we are seeing in a community like Grand Junction
is that we are attracting manufacturing, aviation, tech
businesses, to relocate to our community because they want the
quality of life and the investments we have made in outdoor
recreation, and so it is sort of this broad scope.
The other thing that I heard at the beginning was that
these outdoor recreation jobs are underpaid and we are just
coffee shop workers. I would tell you that my company pays 130
percent of the Mesa County average salary, and there are other
outdoor recreation companies like this, like Leitner-Poma, like
Mountain Racing Products, I mean, product companies,
manufacturers, that do the same. So, we are not seeing that
boom-bust cycle that is so decimating and devastating for a
community in oil and gas. And this has been happening for 70
years in Mesa County, so it is really important to transition
to this sustainable, diversified economy.
Dr. Lowenthal. Thank you.
Now I ask Representative Kevin Hern from Oklahoma, you have
5 minutes to ask questions. And thank you for being so patient.
Mr. Hern. Thank you, Mr. Chairman. This is great.
Thank you all for your testimony today, and your honesty,
how you got here, is good.
As an engineer and a business person, I strongly believe in
data and budgets, and I wish we all did. At some point in time,
we have to pay for this. I am also a member of the Budget
Committee, by request, because I want to know where all the
money goes. Currently we are at $22 trillion in debt, and it is
forecast, the next 10 years, if we don't do anything, we are
going to be at $35 trillion. And U.S. small business people
appreciate the fact that I am concerned about our national
debt, which I think is a travesty. We don't have to have much
science to look at that.
Bloomberg--since we are talking about New Green Deal,
Bloomberg estimates it is going to cost roughly a trillion
dollars a year over the next 10 years, the implementation of
the New Green Deal. But I am a person, as you all are, that
believes that in business, nothing operates in a silo onto
itself. Whatever you do affects other things. It affects our
ability to take money and help other issues, whether it is our
needy, our poor.
So, we have a real opportunity here to try to figure out
how we are going to pay for this. One of the things that is
interesting, I also talked to the OMB Director the other day,
we had a hearing, and asked him how much it cost to pay for
this. And it would be almost doubling of the income tax on
every individual in America to pay for the initiatives that my
friends across the aisle want to implement.
The other thing is, I don't look at static numbers, and I
am sure you don't either. You look at trends. And when you look
at the trends, the population is growing in this country, the
GDP is growing, and our emissions per GDP and per capita are
declining, which is the direction we want them to go, in a
national free market way, which is a great sign that my
colleagues across the aisle should love that we are going. All
of our debate is causing free market ideas, and demands for
renewables is being met with free enterprise, development
supply without exacerbating our national debt issue.
So, that should be something that we all like in here and
we all should be applauding, we all stand up and all just
leave, that we are all accomplishing our mission.
Ms. Farley, you did say something, and my colleague from
California mentioned this a minute ago, which was from my
colleague, Mr. Graves, about that a bill is more than just a
cost per kilowatt hour. And we talked about Massachusetts, who
was pushing renewables, that their costs are going up.
And, Mr. Huffman, I think you said that there are a lot of
energy efficient things that are driving up costs. I find that
a little bit ironic, and I would ask you to quote on this, how
when we are driving efficiency it is costing the individual
more. How does that work, how do the American people get
excited about that?
Ms. Farley. Thank you. I don't think I understand the
question.
Mr. Hern. Well, Mr. Chairman, it goes back to Mr.
Lowenthal's question of how we reconcile what Mr. Hollie said
last week, that renewables actually cost Americans more, not
less. I grew up very poor. When I was young, I grew up with
food stamps, so you have to make a decision, do I feed my
family or pay my electric bill.
So, how do you reconcile when you get more efficient that
it costs you more to have energy?
Ms. Farley. I don't believe that the more efficient you are
that it costs you more. The whole point of efficiency is to
reduce your utility bills.
Mr. Hern. Well, I was just mentioning what Mr. Huffman
said, the more efficient we got----
Mr. Huffman. Will the gentleman yield for 5 seconds?
Mr. Hern. Sure.
Mr. Huffman. It is the difference between unit cost and
out-of-pocket cost to the consumer on their bill. The unit cost
may go up, but the bill itself does not go up and in some cases
can go down.
Mr. Hern. But somebody is paying for that, correct? I mean,
it is not free.
Mr. Mason, can I ask you a question? In your testimony, you
state the concerns we have is energy curtails CO2,
it increases the concentration of other pollutants, such as, if
you have no wind, you can't have wind energy; if you have no
sun, you have no sun energy, so in those times you have to
store it by batteries, or issues of that. Would you agree that
we need to have some analysis on the impact of an environment
before we just take off down this road?
Dr. Mason. Absolutely, though analysis will not get us
there. There are going to be substantial uncertainties with
regard to the environment and substantial uncertainties with
regard to the interaction of different energy products with
regard to that environment.
A point in case that I made in my written testimony was
that a trader that posed the electricity exchange in Northern
Europe with a hundred million euro loss in September 2018,
because while Europe was experiencing a drought, Northern
Europe, who is based primarily on hydro, experienced excess
rainfall.
So, you can't understand, no matter how much analysis you
do, a meteorologist won't tell you what the----
Mr. Hern. Dr. Mason, if you don't mind. We tried to get
into the rules so that we had not had an analysis of impact--
economic impact on anything that we did related to the
transition, and that rule was struck down, was not allowed to
enter into the rules of this Congress or this Committee.
I appreciate everyone being here. It has been a long day, a
lot longer than you thought. Thank you for your witness.
I yield back, Mr. Chairman.
Dr. Lowenthal. Yes, I would like to kind of bring the
hearing to a close, but I would like to follow up on something
that Mr. Gosar, when he was the chair of the Subcommittee and I
was the Ranking Member, he used to, at the end of the hearing,
ask all the panelists if there is one question they would have
liked to have been asked and what their answer would be. Now
this is very brief. I am not asking for another 5 minutes--just
what question would you like to have been asked or we should
have, and how would you quickly and simply answer that
question.
Let's begin again across with the first witness, Ms.
Farley. What would you like to have been asked? And if you
don't have anything, if you think you have been asked
everything, Ms. Farley, that is fine too.
Ms. Farley. I would have liked to have been asked how we
ensure that the same business model used in the fossil fuel
industry, which hurts communities, doesn't simply get placed by
the same system that will be used to run the renewable energy
industry. And I believe, as many do, and have access to data
that proves it, that any solution meant to mitigate the impacts
of climate change on lower income under-resourced communities
must be centered in equity and must be centered in a reckoning
with the reasons that these disparities exist.
Dr. Lowenthal. Thank you.
Ms. Shrader, what question?
Ms. Shrader. The question I would have liked to have been
asked is, how can Grand Junction be sort of a template for
other rural communities in the United States that have
diversified to outdoor recreation? And I would say that we in
the Grand Valley, we have built a lot of partnerships. The oil
and gas industry has supported so much of our trail
infrastructure. Our government leaders, from the commissioners
in the county, to the city officials, to our state
representatives, have really focused on rebuilding and
rebranding our community. And this has been a community that
has been really long entrenched in oil and gas, and that
culture change has created a lot of pride and excitement for
the community and for the state. And we are becoming sort of
this template for other communities in Colorado, but also in
the rural West that have really suffered economically.
And bringing that kind of prosperity back to a community is
extremely gratifying, and I hope we can do that across the
United States.
Dr. Lowenthal. Thank you.
Dr. Bissett?
Dr. Bissett. Mr. Chairman, it would be very simple. We talk
a lot about cost of energy production, but we rarely talk about
reliability, or more importantly, scope. And I think the
question of scope has to be in there, because when you look at
what a hundred coal miners can do, or a hundred people that are
installing solar panels or windmills, you have to look at that
energy produced. And I think a lot of times that is the last
thing we talk about. Thank you.
Dr. Lowenthal. Thank you.
Mr. Hille?
Mr. Hille. Mr. Chair, first I need to clarify my response
to Ms. Cheney's question. I did arrive here by car this
morning. I flew to DC. I wanted to be transparent about that. I
wasn't intentionally misleading, but that was going pretty
fast.
The question that I wish had been asked is, what is the
role of the electric utilities in this transition? And the
electric utilities can play a transformative, positive role as
they have when we have partnered with them for an on-bill
financing program for residential energy efficiency so that the
customer pays nothing upfront. The utility pays for the
retrofit and recovers that investment, plus interest, from a
charge on the customer's bill.
They can also play a negative role when they try to reverse
statutes that support things like our solar net metering
statute in Kentucky.
So, the role of the utilities is really important. They do
have a monopoly on the service, and they need to be held
accountable for their role in the transition.
Dr. Lowenthal. Thank you.
Mr. Dennison?
Mr. Dennison. I wish there was more time on the how. The
transition is already happening. We have seen the trend in coal
employment since the 1970s. We need to be into detailed
problem-solving and have focus on creating opportunity for
people in Appalachia and elsewhere. I wish I had time to
provide other examples.
There is a honey business that is also helping to pollinate
reforestation on mine lands, how reforestation of mine lands
can contribute to climate change mitigation and create
thousands of jobs.
And the role of the market, that was a great discussion we
almost got to there at the end. Fantastic market innovation,
for-profit entrepreneurs with social and environmental triple
bottom line really leading the way.
Dr. Lowenthal. Thank you.
And, finally, Dr. Mason?
Dr. Mason. I think the question would be, do we all believe
that all green is clean? Because the answer is no. There are a
lot of green albatross players out there. A good example is
mining young, or cutting down young growth cypress in
Louisiana, forests that were devastated years ago, in order to
pelletize it and send it on ships over to Europe to burn it as
environmentally friendly biofuel over there, encouraged by
subsidies. That is just wrong. And there are many other
examples.
I think if we can drop the notion that all green is clean,
and we need to define our terms to begin with, we can start
with that meaningful conversation that you started with today.
Dr. Lowenthal. Thank you. Thank you to all the panelists
for your valuable testimony, Members for their questions, and
for the climate that we created. I think people felt like they
were listened to and at least got their chance. I mean, we are
just beginning, and I think it was a great beginning.
If members of this Committee have additional questions for
the witnesses, we will ask you to respond to these in writing.
Under Committee Rule 3(o), members of the Committee must submit
witness questions within 3 business days following the hearing,
and then the hearing record will be open for 10 business days
for these responses.
If there is no further business, without objection, this
Committee stands adjourned.
[Whereupon, at 11:59 a.m., the Committee was adjourned.]
[ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]
Prepared Statement of the Hon. Joe Cunningham, a Representative in
Congress from the State of South Carolina
Thank you, Chairman Lowenthal, for holding this hearing today, to
discuss an issue that's been on the minds of my constituents and is
near and dear to my heart.
South Carolina's 1st District is home to most of the state's nearly
3,000 miles of serpentine coastline and barrier islands. Having lived
near the coast, I've witnessed the impacts of rising sea levels
firsthand. Folks in my district aren't even able to get across town to
get to work when it's high tide and the city is flooded. So this is
clearly something that affects the Low Country, which is why on my
fourth day on the job, I introduced my bipartisan bill--H.R. 291, the
Coastal Economies Protection Act, which would place a 10-year
moratorium on oil and gas preleasing, leasing, and related activities
on the Outer Continental Shelf in the North Atlantic, Mid-Atlantic,
South Atlantic, and Straits of Florida planning areas and in the
Eastern Gulf of Mexico. I've made protecting the coast of South
Carolina from the risk of offshore drilling my highest priority, and I
intend to continue advocating on behalf of this issue.
In addition to the environmental impacts (sea level rise, coastal
erosion, ocean acidification), the energy transition that the country
needs to make to address climate change will impact certain communities
that have relied on fossil fuel jobs.
And with that, I want to turn to some questions.
1. Mr. Dennison or Mr. Hille, what advice would you give to leaders
in coal-reliant communities in western states that are only
now beginning to confront the recent downturn in coal
production?
2. Ms. Shrader, a lot of people argue that recreation and tourism
jobs pay a lot less than oil and gas, so they're not nearly
adequate replacements. How do you respond to that?
3. Mr. Dennison and Mr. Hille, we've heard testimony that jobs
produced by the clean energy transition will be more
harmful to worker health and the environment than jobs in
fossil fuel industries. Do you agree with this conclusion?
______
Submissions for the Record by Rep. Gosar
China's demand for electric vehicles charges copper,
Financial Times, February 12, 2019 by Henry Sanderson
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Copper is a very ordinary building material that has become
entwined in every facet of our lives, from the wires in our homes to
our smartphones and, critically, electric cars, which use three times
the amount of the metal as those in a conventional vehicle.
The start of a long-term demand trend is occurring in China, where
copper in electric cars is set to offset a sharp fall associated with
sales of petrol cars this year, according to analysts at Citigroup.
The number of petrol cars made in China this year is expected to drop
by 9 per cent, according to Citi, while electric car production is set
to rise by 53 per cent. That results in net copper demand growth of 0.3
per cent for the sector.
``[For copper] it's an EV story into the 2020s and we're just getting a
really early taste of that now,'' said Oliver Nugent, of Citi. ``Thanks
to the higher intensity of copper in EVs we're going to sail through
that very weak auto demand number this year.''
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Over the longer term, the bank said copper for electric cars would
make up two-thirds of demand growth for the metal between 2018 and
2030.
Copper prices have rallied by 5 per cent this year to trade at $6,139 a
tonne, suggesting that investors have become less fearful of the impact
of a slowdown in China, the world's largest consumer.
Citi expects copper prices to hit $6,700 in 2019 driven by an overall 2
per cent growth in Chinese demand and a resolution to the trade dispute
between the US and China.
______
Australia hopes to cash in on new cobalt rush,
Financial Times, February 12, 2019 by Jamie Smyth and Henry
Sanderson
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
It is one of Australia's oldest mining towns that has built its
wealth from a huge deposit of silver, lead and zinc. Now, Broken Hill
is aiming to tap into the fast growing electric vehicle market by
becoming a vital source of cobalt.
Mining groups in the outback town, 1,000km from Sydney, are lured by
forecasts that demand for cobalt--the main power source for mobile
devices and electric vehicles (EVs)--will quadruple by 2029.
Supply concerns have further stoked their interest as two-thirds of the
world's cobalt is mined in the Democratic Republic of Congo, a poor
country that suffers from political instability and corruption and
which has been criticised for the use of child labour in its artisanal
mines.
``No one can predict politics in the DRC, the country presents
logistical challenges and there is a question mark over the efficacy of
the 10 to 15 per cent of cobalt produced there from artisanal
sources,'' said Joe Kaderavek, chief executive of Cobalt Blue, an ASX-
listed miner with an operation in Broken Hill.
``Increasingly, Asian battery makers are looking for the stability that
Australian sources of cobalt can offer.''
Cobalt Blue is one of dozens of small miners in Australia, Canada and
elsewhere that are rushing to explore cobalt deposits and raise funds
to develop new mines and processing plants to produce the blue-grey
metal.
Last year Kinshasa's dominance over the cobalt supply chain rose above
70 per cent as Chinese-owned mines in the DRC and new entrant Eurasian
Resources Group, a Luxembourg-based miner, ramped up production. It is
expected to hit 75 per cent this year, according to Darton Commodities.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
``The DRC is to the cobalt world what Saudi Arabia is to oil when
it comes to availability of supply, there's nowhere else where you can
get large volumes like you can in the Congo,'' said George Heppel, an
analyst at consultancy CRU.
This leaves battery makers, electric vehicle manufacturers and western
miners exposed to sudden shifts in DRC government policy and consumer
boycotts focused on child exploitation. Last year a new mining code
imposed a series of taxes on western miners and Glencore was forced to
write off $5.6bn in debt to safeguard its joint venture with Gecamines,
the DRC's state mining company.
The London-listed miner is embroiled in a separate dispute with the DRC
government over plans to build a new plant to remove uranium from its
cobalt ore. This month Katanga Mining, a subsidiary of Glencore which
owns a large cobalt and copper mine in the DRC, warned it may not be
able to sell any cobalt until 2020 due to governmental concerns.
Analysts at Darton Commodities recently warned that increased resource
nationalism in the DRC continued to present a significant supply risk.
``Continued stability in the DRC will therefore be of vital importance,
ensuring a secure and transparent cobalt supply chain which in turn is
critical for the global transition to EVs to materialise,'' they added.
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Due to these concerns, Asian battery makers are now building
alliances with miners in Australia.
Last year LG International, the investment arm of the South Korean
battery maker, bought a 6 per cent stake in Cobalt Blue. Shanghai
Pengxin, a Chinese conglomerate, paid A$81m ($57m) for a 16 per cent
stake in Clean TeQ, an ASX-listed company also aiming to develop a
nickel-cobalt-scandium mine about 350km west of Sydney.
``International NGOs are focused on the issue of child labour in DRC
and they are likely to single out multinational companies, the battery
makers and the car companies, to clean up their act,'' said Sam
Riggall, Clean TeQ's chief executive. ``Australia will play an
important role in the diversification of the cobalt supply chain,'' he
said.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
However, there are currently no large new cobalt mines in the
pipeline outside of the DRC.
Canadian-listed First Cobalt aims to build a North American supply of
cobalt by developing a mine in Idaho and processing the metal at a
refinery it has reopened in Ontario.
Trent Mell, chief executive of First Cobalt, said the publication by US
president Donald Trump of a ``critical minerals'' list last year had
helped the company gain political support for US-based cobalt supply.
``With the US putting cobalt on the critical minerals list, we have a
lot of friends in Washington,'' Mr Mell said. ``If you picture a boxing
ring, you've got Glencore in one corner and China in the other; it's a
small market, it's a tight market. I don't think cobalt prices really
reflect the structural outlook that many of us see.''
Another country that could be a source of cobalt is Kazakhstan. Kenes
Rakishev, a Kazakh businessman and entrepreneur, is aiming to mine
cobalt and nickel in eastern Kazakhstan, using low-cost leaching
techniques already used to mine uranium in the country. The company,
KazCobalt, aims to eventually list on the stock market.
``If this technology can work for nickel and cobalt, it will be the
lowest cost in the world,'' Mr Rakishev said. ``You need to just dig--
that's it.''
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Cobalt is mined alongside copper in the DRC, while outside the
country it is mostly a byproduct of nickel mining. Brazilian miner Vale
is spending $2bn on an underground expansion of its mine at Voisey's
Bay, Canada , which will also produce cobalt.
``There will be no shortage of cobalt but we're going to have better
cobalt and nickel prices to get the mines [outside the DRC] built,''
said Anthony Milewski, chief executive of Cobalt 27, which has acquired
the right to buy future cobalt production from the Vale mine.
FT Archive
Echoing this view, Gavin Montgomery, an analyst at Wood Mackenzie, said
companies outside of the DRC would struggle to raise finance in the
face of falling cobalt prices, which are down more than 40 per cent
since mid-November.
Prices are likely to fall further given there was a ``tsunami'' of new
cobalt supply coming online in the DRC over the next few years, Mr
Montgomery said.
``In the medium-term it is all DRC,'' Mr Montgomery added. ``There's no
shortage of supply.''
Outside of the DRC the most promising project is a giant $700m nickel-
processing project being built in Indonesia by a consortium of
investors including Chinese stainless steel giant Tsingshan and China
's largest battery maker CATL.
As well as nickel, the Indonesian project hopes to produce about 20,000
tonnes of cobalt sulphate for batteries a year and has already secured
financing.
``We're probably more bullish about Indonesia becoming the new frontier
for cobalt and nickel supply than Ontario or Zambia or Australia,'' Mr
Montgomery said.
______
Submission for the Record by Rep. Lowenthal
Energy Jobs--Bureau of Labor Statistics, February 13, 2019
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Submissions for the Record by Mr. Dennison
Solar Employs More People In U.S. Electricity Generation Than Oil, Coal
And Gas Combined
Niall McCarthy, Contributor, Data journalist covering technological,
societal and media topics
Forbes--January 25, 2017
In the United States, more people were employed in solar power last
year than in generating electricity through coal, gas and oil energy
combined. According to a new report from the U.S. Department of Energy,
solar power employed 43 percent of the Electric Power Generation
sector's work force in 2016, while fossil fuels combined accounted for
just 22 percent. It's a welcome statistic for those seeking to refute
Donald Trump's assertion that green energy projects are bad news for
the American economy.
Just under 374,000 people were employed in solar energy, according to
the report, while coal, gas and oil power generation combined had a
work force of slightly more than 187,000. The boom in the country's
solar work force can be attributed to construction work associated with
expanding generation capacity. The gulf in employment is growing with
net generation from coal falling 53 percent over the last decade.
During the same period, electricity generation from natural gas
increased 33 percent while solar expanded 5,000 percent.
Fuel production and electricity generation together directly employed
1.9 million workers last year, according to the report; with 55%, or
1.1 million, working with fossil fuels. The DoE identifies another 2.3
million jobs associated with energy transmission, distribution and
storage.
Solar energy added 73,615 new jobs to the U.S. economy over the past
year while wind added a further 24,650.
(charted by Statista)
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Statement by Mr. Dennison in Response to Dr. Mason
I also want to note, responding to Mr. Mason: while the entire country
is not facing Depression era unemployment, many extraction communities
are. We have an employment crisis. High unemployment is a problem, say
in Mingo County, WV, but the even more concerning stats are in labor
force participation . . . these are people who have permanently left
the work force and given up looking.
WVU economists John Deskins has published work on these troubling
economic stats.
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[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S
OFFICIAL FILES]
Submission for the Record by Rep. Graves
--U.S. Energy and Employment Report from the National
Association of State Energy Officials, May 2018
Submissions for the Record Mr. Dennison
--The Nature Conservancy Report--Natural Climate Solutions in
West Virginia
--``Many Voices, Many Solutions: Innovative Mine Reclamation
in Central Appalachia''--Report
[all]