[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
LEGISLATIVE HEARING TO STRENGTHEN ENERGY
INFRASTRUCTURE, EFFICIENCY, AND FINANCING
=======================================================================
HYBRID HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
JUNE 22, 2022
__________
Serial No. 117-89
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Published for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
61-992 PDF WASHINGTON : 2026
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COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois CATHY McMORRIS RODGERS, Washington
ANNA G. ESHOO, California Ranking Member
DIANA DeGETTE, Colorado FRED UPTON, Michigan
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California BRETT GUTHRIE, Kentucky
KATHY CASTOR, Florida DAVID B. McKINLEY, West Virginia
JOHN P. SARBANES, Maryland ADAM KINZINGER, Illinois
JERRY McNERNEY, California H. MORGAN GRIFFITH, Virginia
PETER WELCH, Vermont GUS M. BILIRAKIS, Florida
PAUL TONKO, New York BILL JOHNSON, Ohio
YVETTE D. CLARKE, New York BILLY LONG, Missouri
KURT SCHRADER, Oregon LARRY BUCSHON, Indiana
TONY CARDENAS, California MARKWAYNE MULLIN, Oklahoma
RAUL RUIZ, California RICHARD HUDSON, North Carolina
SCOTT H. PETERS, California TIM WALBERG, Michigan
DEBBIE DINGELL, Michigan EARL L. ``BUDDY'' CARTER, Georgia
MARC A. VEASEY, Texas JEFF DUNCAN, South Carolina
ANN M. KUSTER, New Hampshire GARY J. PALMER, Alabama
ROBIN L. KELLY, Illinois, Vice NEAL P. DUNN, Florida
Chair JOHN R. CURTIS, Utah
NANETTE DIAZ BARRAGAN, California DEBBIE LESKO, Arizona
A. DONALD McEACHIN, Virginia GREG PENCE, Indiana
LISA BLUNT ROCHESTER, Delaware DAN CRENSHAW, Texas
DARREN SOTO, Florida JOHN JOYCE, Pennsylvania
TOM O'HALLERAN, Arizona KELLY ARMSTRONG, North Dakota
KATHLEEN M. RICE, New York
ANGIE CRAIG, Minnesota
KIM SCHRIER, Washington
LORI TRAHAN, Massachusetts
LIZZIE FLETCHER, Texas
------
Professional Staff
TIFFANY GUARASCIO, Staff Director
WAVERLY GORDON, Deputy Staff Director
NATE HODSON, Minority Staff Director
Subcommittee on Energy
BOBBY L. RUSH, Illinois
Chairman
SCOTT H. PETERS, California FRED UPTON, Michigan
MIKE DOYLE, Pennsylvania Ranking Member
JERRY McNERNEY, California, Vice MICHAEL C. BURGESS, Texas
Chair ROBERT E. LATTA, Ohio
PAUL TONKO, New York DAVID B. McKINLEY, West Virginia
MARC A. VEASEY, Texas ADAM KINZINGER, Illinois
KIM SCHRIER, Washington H. MORGAN GRIFFITH, Virginia
DIANA DeGETTE, Colorado BILL JOHNSON, Ohio
G. K. BUTTERFIELD, North Carolina LARRY BUCSHON, Indiana
DORIS O. MATSUI, California TIM WALBERG, Michigan
KATHY CASTOR, Florida JEFF DUNCAN, South Carolina
PETER WELCH, Vermont GARY J. PALMER, Alabama
KURT SCHRADER, Oregon DEBBIE LESKO, Arizona
ANN M. KUSTER, New Hampshire GREG PENCE, Indiana
NANETTE DIAZ BARRAGAN, California KELLY ARMSTRONG, North Dakota
A. DONALD McEACHIN, Virginia CATHY McMORRIS RODGERS, Washington
LISA BLUNT ROCHESTER, Delaware (ex officio)
TOM O'HALLERAN, Arizona
FRANK PALLONE, Jr., New Jersey (ex
officio)
C O N T E N T S
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Page
Hon. Jerry McNerney, a Representative in Congress from the State
of California, opening statement............................... 2
Prepared statement........................................... 5
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 7
Prepared statement........................................... 9
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 13
Prepared statement........................................... 15
Hon. Cathy McMorris Rodgers, a Representative in Congress from
the State of Washington, opening statement..................... 17
Prepared statement........................................... 19
Witnesses
Richard Frias, Executive Director, Native American Finance
Officers Association........................................... 25
Prepared statement........................................... 27
Andrew DeLaski, Executive Director, Appliance Standards Awareness
Project........................................................ 30
Prepared statement........................................... 33
Dustin Mulvaney, Ph.D., Professor, Environmental Studies, San
Jose State University.......................................... 43
Prepared statement........................................... 45
Joshua C. Greene, Esq., Corporate Vice President, Government and
Industry Affairs, A.O. Smith Corporation....................... 48
Prepared statement........................................... 50
Answer to submitted questions................................ 135
Lucian Pugliaresi, President, Energy Policy Research Foundation,
Inc............................................................ 54
Prepared statement........................................... 56
Ben Lieberman, Senior Fellow, Energy and Environment Competitive
Enterprise Institute........................................... 72
Prepared statement........................................... 74
Answer to submitted questions................................ 140
Submitted Material
H.R. 1599, the Securing America's Critical Minerals Supply Act
\1\
H.R. 5292, the Energy Accountability Act \1\
H.R. 7947, the Weatherization Enhancement and Readiness Act of
2022 \1\
H.R. 7962, To amend the Energy Policy and Conservation Act to
modify the definition of water heater under energy conservation
standards, and for other purposes \1\
H.R. 8053, the Guaranteeing Resilient Installations for Defense
Act \1\
H.R. 8068, the Tribal Energy Investment Act of 2022 \1\
Letter of June 21, 2022, by Stephen R. Yurek, et al., the Air-
Conditioning, Heating, and Refrigeration Institute, to Joe
Manchin, et al., submitted by Mr. McNerney..................... 119
Letter of June 21, 2022, from David Bradley, CEO, National
Community Action Foundation, to Mr. Rush and Mr. Upton,
submitted by Mr. McNerney...................................... 122
----------
\1\ The legislation has been retained in committee files and is
available at https://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=114932.
Letter of June 22, 2022, from Dr. Ali Nouri, Assistant Secretary
for Congressional and Intergovernmental Affairs, U.S.
Department of Energy, to Mr. Rush and Mr. Upton, submitted by
Mr. McNerney................................................... 126
Letter of June 22, 2022, from Rich Nolan, National Mining
Association, to Mr. Pallone, et al., submitted by Mr. McNerney. 130
Letter of October 14, 2021, from Rep. Don Young, to Ms. Pelosi
and Mr. McCarthy, submitted by Mr. Upton....................... 132
Letter of June 21, 2022, from Joint Associations, to Mr. Rush and
Mr. Upton, submitted by Mr. McNerney........................... 133
LEGISLATIVE HEARING TO STRENGTHEN ENERGY INFRASTRUCTURE, EFFICIENCY,
AND FINANCING
----------
WEDNESDAY, JUNE 22, 2022
House of Representatives,
Subcommittee on Energy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:33 a.m. in
the John D. Dingell Room, 2123 Rayburn House Office Building,
and remotely via Cisco Webex online video conferencing, Hon.
Jerry McNerney (member of the subcommittee), presiding.
Present: Representatives McNerney, Peters, Doyle, Tonko,
Schrier, Matsui, Castor, Welch, Schrader, Kuster, Barragan,
McEachin, Blunt Rochester, O'Halleran, Pallone (ex officio);
Upton, Burgess (subcommittee ranking member), Latta, McKinley,
Griffith, Johnson, Bucshon, Walberg, Duncan, Palmer, Lesko,
Pence, and Rodgers (ex officio).
Staff present: Waverly Gordon, Deputy Staff Director and
General Counsel; Jessica Grandberry, Staff Assistant; Tiffany
Guarascio, Staff Director; Perry Hamilton, Clerk; Zach Kahan,
Deputy Director Outreach and Member Service; Rick Kessler,
Senior Advisor and Staff Director, Energy and Environment;
Mackenzie Kuhl, Digital Assistant; Tyler O'Connor, Energy
Counsel; Lino Pena-Martinez, Policy Analyst; Kaitlyn Peel,
Digital Director; Kris Pittard, Policy Coordinator; Medha
Surampudy, Professional Staff Member; Caroline Wood, Research
Assistant; Tuley Wright, Senior Energy and Environment Policy
Advisor; Sarah Burke, Minority Deputy Staff Director; Nate
Hodson, Minority Staff Director; Noah Jackson, Minority Staff
Assistant; Peter Kielty, Minority General Counsel; Emily King,
Minority Member Services Director; Bijan Koohmaraie, Minority
Chief Counsel, Oversight and Investigations Chief Counsel; Tim
Kurth, Minority Chief Counsel, CPC; Mary Martin, Minority Chief
Counsel, Energy and Environment; Brandon Mooney, Minority
Deputy Chief Counsel for Energy; Clare Paoletta, Minority
Policy Analyst, Health; Peter Spencer, Minority Senior
Professional Staff Member, Energy; and Michael Taggart,
Minority Policy Director.
Mr. McNerney [presiding]. will now come to order.
Today's subcommittee is holding hearing entitled,
``Legislative Hearing to Strengthen Energy Infrastructure,
Efficiency, and Financing.''
Due to the COVID-19 public health emergency, members can
participate in today's hearing either in person or remotely,
via online video conferencing.
In accordance with the updated guidance issued by the
attending physician, members, staff, and members of the press
present in the hearing room are not required to wear a mask.
For members participating remotely, your microphones will
be set on mute for the purpose of eliminated--eliminating
inadvertent background noise. Members participating remotely
will need to unmute your microphone each time you wish to
speak. Please note that, once you unmute your microphone,
anything that is in Webex will be heard over the loudspeakers
in the committee room, and subject to being heard by livestream
and C-SPAN.
Given that members are participating from different
locations at today's hearing, all recognition of members, such
as for questions, will be in the order of subcommittee
seniority.
Documents for the record can be sent to Lino Pena-Martinez
at the email address we provided to staff. All documents will
be entered into the record at conclusion of the hearing.
The Chair now recognizes himself for an opening statement.
STATEMENT OF HON. JERRY McNERNEY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
I would like to welcome our witnesses for today's hearing:
Andrew DeLaski, executive director of Appliance Standards
Awareness Project; Richard Rico Frias, pronounced--executive
director, Native American Finance Officers Association--thank
you for coming; Dustin Mulvaney, Ph.D., professor,
environmental studies, San Jose State University; Joshua C.
Greene, corporate vice president, government and industry
affairs, A.O. Smith Corporation; Lucian Pugliaresi, president,
Energy Policy Research Foundation; Ben Lieberman, senior
fellow, Competitive Enterprise Institute.
Thank you for joining us today. We look forward to your
testimony.
OK, now for my opening statement.
Good morning. Today we will be holding a legislative
hearing on six bills authored by members from both sides of the
aisle focused on updates and upgrades to our Nation's energy
infrastructure.
As the U.S. and the rest of the world undergoes the energy
transition necessary to avoid the worst impacts of climate
change, it is crucial that our existing system be able to adapt
to meeting our evolving needs. The six bills present modest
changes to Federal programs to make operations smoother and
better able to meet the needs of energy consumers and
developers.
Two of today's bills focus on increasing energy efficiency
of homes and appliances, which will be essential for decreasing
our energy demand and lowering energy--monthly energy costs for
Americans.
Another two of the bills make reforms to the way Federal
Government finances energy infrastructure, which would improve
accessibility and accountability of Federal loan programs.
And two of the bills address the reliability of our energy
systems, which continues to be imperiled by climate disasters,
supply chain issues, cyber and physical vulnerabilities, and
aging assets.
These bills represent a common-sense approach to reforming
our energy laws, and I look forward to hearing what our
witnesses have to say about them.
First up is H.R. 1599, Securing America's Critical Minerals
Supply Act, authored by our ranking member, Mr. Upton. Critical
minerals are essential to the growth of renewable energy
resources, and onshoring the supply chain will both increase
the availability of components and support domestic jobs. This
bill draws attention to that need as energy transition evolves.
We will also discuss H.R. 8053, a bipartisan bill from
Congressmen Crow, Peters, and Bacon. This bill allows the
Department of Energy to enter into contracts or agreements to
improve our resilience of portions of our electrical
infrastructure that are critical to our national defense, and
to reduce the vulnerability of this infrastructure. In my
opinion, this should be a non-controversial bill which will
allow us to enhance our national security by making long-term
commitments to energy reliability, serving our military
installations without over-burdening nearby tax ratepayers.
Next up we have two bills focused on energy efficiency.
H.R. 7947 from the Environment and Climate Change
Subcommittee's Chairman Paul Tonko; this subcommittee's
chairman, Bobby Rush; and the chairwoman of the Energy and
Water Appropriations Subcommittee, Marcy Kaptur; and H.R. 7962,
offered by Congresswoman Debbie Dingell.
Mr. Tonko's Weatherization Enhancement and Readiness Act
would strengthen the Weatherization assistance program by
raising the cap that limits how much assistance households can
receive to account for increasing in the prices of building
materials, and by ensuring that the households that could most
benefit from Weatherization programs are able to participate.
This program has provided important services for our low-income
households for decades, and the proposed changes can assure
that the program continues to be accessible for years to come.
Mrs. Dingell's bipartisan bill touches on the water energy
nexus by harmonizing energy efficiency standards for commercial
and residential water heaters by improving the resilience of
our grid, by creating a demand response program for residential
water heaters. It would also require the Department of Energy
to issue a rule by the end of 2024 requiring that electric
water heaters have demand response capabilities as long as that
requirement is technologically feasible and economically
justified. In considering this bill, I hope that we take note
of one of the many ways in which energy and water are
intertwined, and how energy use is embedded in the water-
related appliances in our homes.
These bills are two great ideas that will help reduce the
strain on our grid, while delivering electricity to our homes
and appliances.
Finally, we have two bills that would make common-sense
tweaks to our loan program office within the Department of
Energy.
The first is the bill from our late colleague, Don Young of
Alaska, H.R. 5292, the Energy Accountability Act. If enacted,
it would mandate that any borrower that has previously
defaulted on a Title 17 loan be barred from receiving any other
loan guarantees under the program.
Second, H.R. 8068, a bipartisan bill from Ms. Leger
Fernandez and this subcommittee's own Mr. O'Halleran, improves
the Tribal Energy Loan Guarantee Program by allowing the
Department of Energy to issue loans directly revitalizing a
program that has not been able to issue a single loan in 17
years.
I want to thank the authors of the bills we are discussing
today and their staffs for their hard work and the hard work
yet to come. This is the start of a journey on these bills, not
the end, and I look forward to the feedback that our witnesses
are able to provide today.
[The prepared statement of Mr. McNerney follows:]
Prepared Statement of Hon. Jerry McNerney
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. McNerney. I have a letter here from Dr. Ali Nouri,
assistant secretary of congressional intergovernmental affairs
of the Department of Energy. I request unanimous consent to
enter the following letter from the Department of Energy into
the record.
Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. McNerney. And with that I yield to the ranking member,
Mr. Upton, for a 5-minute opening statement.
STATEMENT OF THE HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF MICHIGAN
Mr. Upton. Well, thank you, my friend, Mr. Chairman, and
thanks to our witnesses for appearing before us to provide
their testimony.
Mr. Pallone, the U.S. is plunging deeper and deeper into an
energy crisis driven by roaring inflation, anti-fossil fuel
policies, demand shocks across the country.
Our constituents are rightly concerned about the lack of
leadership. The annual inflation rate in May, as we know, was
8.6 percent, the highest level since 1981. Gasoline is
averaging five bucks, with drivers in California and other
states paying over six, getting close to seven. More than half
of the Nation is going to be at elevated risk for power outages
this summer, even perhaps this weekend, as reliable baseload
power generation is retired in favor of weather-dependent green
alternatives like wind and solar. God help us when the wind
doesn't blow and the sun doesn't shine.
The bills before us today are not going to alleviate the
pain that Americans are feeling at the pump or reduce the risk
of blackouts. And while this is supposed to be a legislative
hearing, the DoE is not here to provide their testimony.
Republicans on this side of the aisle have been sounding
the alarm since day one. Energy prices surged following the
President's cancellation of Keystone XL pipeline on day one and
the moratorium on Federal leasing. Gas prices went up even
further, as the EPA and FERC began to tighten the screws on
infrastructure permitting.
But instead of addressing the energy crisis head on, the
President is traveling to Saudi Arabia to ask OPEC and Russia
for more oil. Members of this committee should hear from energy
producers on what it will take to produce more oil here at
home.
I am concerned by what appears to be a naive understanding
of the scope and scale of the energy crisis and what is
required to address it; contrary to the rhetoric from the White
House and DoE, high gas prices will not encourage Americans to
buy more expensive electric vehicles.
Residential electricity prices are also increasing at
record pace, and China is consolidating its control over more
than 90 percent of critical minerals used in batteries and
solar panels. If we don't reinvigorate our domestic mining
industry, we are going to see more spikes in raw materials like
lithium that is going to drive up costs even more for
consumers.
I was pleased to see my bill, H.R. 1599, Securing America's
Critical Minerals Supply Act, included in today's legislative
hearing. This bill is going to build on DoE's energy security
mission by providing tools for DoE to secure a reliable
domestic supply of critical energy resources, including
critical materials. We can't trade away the energy security
America has achieved through the domestic production of coal,
oil, or natural gas for Chinese batteries and solar panels. It
is a national security imperative that we produce the energy
that we need right here at home. It is really simple.
Turning to the other bills on the docket, I am supportive,
certainly, of H.R. 5292, the Energy Accountable--Accountability
Act, introduced by our best buddy, Don Young of Alaska. The
legislation is a good government bill that will disqualify
companies like Solyndra, who defaulted on a loan, from
participating in DoE's loan guarantee program. And I would ask
unanimous consent that his fine letter be entered into the
record in support of that bill.
Some of these bills will need more work, an additional
hearing with DoE before they are ready to be marked up. I have
questions about H.R. 8053, the GRID Act, which appears to build
on DoE's program to protect critical defense infrastructure.
Members of the committee should have the ability to
question DoE on H.R. 7947 and H.R. 8053, which are bills that
will modify DoE's Weatherization program and appliance
standards. It appears that both bills include new language that
could have broad and far-reaching implications for taxpayers
and consumers. And at the end of the day, they may not be
terribly happy.
For example, H.R. 8053 includes a new concept that would
allow DoE to mandate demand response, which is capability that
allows a grid operator to remotely monitor and control
residential appliances to reduce electricity demand. I believe
that that raises serious privacy concerns that, again, I don't
think are going to go over very well with consumers.
Each of the bills before us today deserves careful
consideration from this subcommittee. I look forward to working
with the majority to ensure regular order.
[The prepared statement of Mr. Upton follows:]
Prepared Statement of Hon. Fred Upton
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Upton. With that, thanks again. I yield back the
balance of my time.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes Mr. Pallone, chair of the full committee, for 5
minutes for his opening statement.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairman McNerney. Today we are
going to discuss legislation on a range of topics that affect
our energy sectors, including energy supply chains, energy
efficiency, weatherization, the Department of Energy's loan
programs office, and critical infrastructure.
So first the subcommittee will review two bills that
improve energy efficiency and reduce energy costs for
consumers.
H.R. 7962, introduced by Representative Dingell, makes
important changes to water heater efficiency standards and
creates a new demand response program for residential water
heaters. This legislation could have a significant impact on
energy consumption, help consumers save on the energy bills,
and help utilities reduce demand during peak times. It also
contains common-sense fixes that harmonize standards for
residential and commercial water heaters.
Then there is H.R. 7947, the Weatherization Enhancement and
Readiness Act, introduced by Representatives Tonko, Rush, and
Kaptur. It establishes an important new weatherization
readiness program, makes other practical changes to the
Department of Energy's weatherization assistance program.
President Biden's Bipartisan Infrastructure Law built on
the bipartisan work we did in the Energy Act of 2020, investing
a historic $3.5 billion in the weatherization assistance
program, and reducing energy costs for over 700,000 low-income
households. Still, many households are not able to receive
weatherization improvements due to underlying structural and
electrical issues. So this new weatherization readiness program
will ensure low-income families can make the upgrades necessary
to enable them to qualify for weatherization measures, reduce
their energy consumption, and save money on their bills.
Then we have H.R. 1599, Securing America's Critical
Minerals Supply Act, introduced by Ranking Member Upton. That
requires DoE to conduct assessments and secure energy resources
that have vulnerable supply chains. As we work to secure a
resilient and clean energy sector, we have to make sure we are
responsibly procuring critical minerals here in the U.S. And
the BIF took important steps to support clean energy supply
chains, and I am eager to learn how this bill can advance our
work toward a resilient, clean energy economy.
We are also considering two bills to reform DoE's loan
programs.
H.R. 8068, the Tribal Energy Investment Act, which was
introduced by Representatives Leger Fernandez, O'Halleran, and
Cole, and this bill seeks to improve the Tribal Energy Loan
Guarantee Program, which permits DoE to provide loan guarantees
to support energy development projects on tribal lands. But
despite our best intentions in establishing that program in
2005, it has not financed a single project in the program's 17-
year history, and that needs to change, obviously.
So I look forward to hearing from the Native American
Finance Officers Association about how the Tribal Energy
Investment Act builds on the recent bipartisan effort included
in the Fiscal Year 2022 appropriations package to unlock the
promise of this essential program.
Also, I look forward to discussing H.R. 5292, the Energy
Accountability Act, sponsored by our late colleague,
Representative Don Young. It would prohibit DoE from
guaranteeing a loan for any entity that previously defaulted on
an obligation guaranteed under Title 17 of the Energy Policy
Act of 2005.
And finally, we have H.R. 8053, a bipartisan bill from
Representatives Crow, Peters, and Bacon that amends the Federal
Power Act to provide the Secretary of Energy authority to
address vulnerabilities to the resilience of defense-critical
electrical infrastructure. And this bill seeks to ensure that
homes and businesses surrounding military installations do not
bear the cost of electrical upgrades necessary for the security
of those military bases.
So I think these are all important bills that will help
strengthen our domestic energy sector.
[The prepared statement of Mr. Pallone follows:]
Prepared Statement of Hon. Frank Pallone, Jr.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pallone. And I yield back, Mr. Chairman.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes Mrs. Rodgers, ranking member of the full committee,
for 5 minutes for her opening statement.
OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON
Mrs. Rodgers. Thank you, Mr. Chairman.
The need for President Biden to abandon his war on American
energy is becoming more urgent by the day. People can't afford
to fill up their gas tanks. Natural gas prices are surging
because energy is foundational to every part of our lives.
Everything is more expensive, especially food.
We must flip the switch on American energy, produce more,
and make life affordable again. This is clear to every American
family as they confront record inflation and energy prices,
declining electric reliability, blackout threats, and looming
energy security threats from Russia's war on Ukraine. It is
clear to domestic energy producers, manufacturers, and
innovators as they struggle to attract capital to build and
overcome permitting challenges, regulatory uncertainty, and
China-controlled supply chains.
To lower costs, President Biden must focus on removing the
barriers to an American energy and economic resurgence. Tapping
the SPR hasn't worked. A gas tax holiday will be ineffective,
and would undermine funding to infrastructure projects for road
safety. More government spending has fueled the inflation
crisis. And asking foreign dictators for more oil, like in
Saudi Arabia, further weakens our security and prosperity.
To secure our energy dominance and lower prices, the
President must abandon this agenda that has led to his
worsening energy crisis since day one. He must embrace policies
that encourage investments in durable American energy, and fuel
a supply of goods and services into our economy. It means
growing our tremendous energy systems, not dismantling them
with rush-to-green policies that stifle innovation, undermine
security, and raise energy costs. This should guide how we
evaluate proposals concerning energy efficiency, energy
infrastructure, and energy security.
Today's hearing considers six bills on different policy
topics. The common connection among them is the Department of
Energy. Unfortunately, DoE is not here, and we will not be able
to question DoE officials on these bills and the programs they
address. I hope we have the chance soon. In the meantime, I
welcome the opportunity for members to ask questions to
stakeholders and other experts here.
I am pleased to see included Fred Upton's H.R. 1599,
Securing America's Energy--or Critical Minerals Supply Act,
which is part of our Securing a Cleaner American Energy Agenda.
This bill establishes a cabinet-level focus on identifying the
critical energy resources necessary to develop and supply
energy in America. This includes an assessment of supply chains
across all energy systems in the United States: a critical way
to identify and reform policies that would otherwise drive
dependency on China. While much needs to be done to strengthen
energy security, establishing this function at DoE makes sense.
It updates the Department's historic role to assure reliable
supplies of energy to enable energy security.
Regarding the other bills before us today, H.R. 8053
expands coverage of DoE's work to secure critical defense
electric infrastructure to all 50 states. This sounds like a
positive path, but the bill goes farther with additional
contracting authorities for DoE. And more needs to be
understood on that front.
With this and some of the other bills we have questions
about implementation that we are pursuing today. There are
expansions of Federal programs that seem unrelated to the
needed reset on energy policies. For example, H.R. 7947 would
create a new $450 million DoE program to prepare homes for
weatherization on top of existing programs. Yet a
weatherization program was just reauthorized on a bipartisan
basis just two years ago.
What is more, through the infrastructure law Congress just
appropriated 3.5 billion in additional spending on this
program, far above what was authorized in 2020. So now it
appears DoE can't spend the money appropriated, and needs a
new, duplicative program and more funding. This deserves
scrutiny. With record high inflation, should the Federal
Government be paying to essentially flip houses on the
taxpayers' dime?
We are also concerned with mandates in H.R. 7962. This bill
addresses water heater energy efficiency standards, but also
requires DoE to examine demand-side management mandates. This
is far reaching, and may place control of your water heater in
the hands of utilities or other third parties. There are huge
implications of this, and we must answer those questions.
Overall, I look forward to our witnesses' testimony today.
Welcome to Ben Lieberman, former committee staffer, and Lou
Pugliaresi back to the committee. I look forward to your
insights, and what is needed to reset our economic and energy
policy, and ensure energy and economic resurgence in the great
United States of America.
[The prepared statement of Mrs. Rodgers follows:]
Prepared Statement of Hon. Cathy McMorris Rodgers
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mrs. Rodgers. I yield back. Thank you.
Mr. McNerney. The gentlewoman yields back.
The Chair would like to remind members that, pursuant to
committee rules, all Members' written opening statements shall
be made a part of the record.
I have already introduced the witnesses, and I thank you
again for joining us today. At this time the Chair will
recognize each witness for 5 minutes to provide their opening
statement.
Before I begin, I would like to explain the lighting
system. In the front of the witnesses is a series of lights.
The light will initially be green. The light will turn yellow
when you have one minute left. Please begin to wrap up your
statement at that time. The light will turn red when your time
expires.
Mr. DeLaski, thank you for coming. You are recognized for 5
minutes.
Mr. DeLaski. Thank you. Thank you very much.
Mr. Pugliaresi. Thank you, Mr. Chairman.
Mr. DeLaski. Thank you for the opportunity to testify
today----
Mr. Pugliaresi. I think we have some slides. Chairman----
Mr. McNerney. Mr. DeLaski is recognized first.
Mr. Pugliaresi. Oh, I am sorry.
Mr. McNerney. Remotely. Sorry.
Mr. DeLaski. OK. Thank you. Thank you again for the
opportunity to testify on two very important bills. These are
pragmatic bills that address real problems that face people
across the United States.
Mr. McNerney. Mr. DeLaski, you are not being--your audio is
not sufficient. Could you turn it up?
Mr. DeLaski. How is that working now?
Mr. McNerney. It is better.
Mr. DeLaski. And is it working better now?
Mr. McNerney. Not--it is not sufficient yet. OK, we are
going to turn it up here, if you will wait for a moment.
Mr. DeLaski. How is my audio now?
Mr. McNerney. OK. Please try again.
Mr. DeLaski. OK, I will start again. Is it OK now?
Mr. McNerney. Not really.
Voice. Why don't we start with Mr. Frias?
Mr. McNerney. OK. We will skip this witness initially, and
start with Mr. Frias.
Mr. Frias, would you give us your opening statement?
STATEMENT OF RICHARD FRIAS, EXECUTIVE DIRECTOR, NATIVE AMERICAN
FINANCE OFFICERS ASSOCIATION; ANDREW DeLaski, EXECUTIVE
DIRECTOR, APPLIANCE STANDARDS AWARENESS PROJECT; DUSTIN
MULVANEY, PH.D., PROFESSOR, ENVIRONMENTAL STUDIES, SAN JOSE
STATE UNIVERSITY; JOSHUA C. GREENE, ESQ., CORPORATE VICE
PRESIDENT, GOVERNMENT AND INDUSTRY AFFAIRS, A.O. SMITH
CORPORATION; LUCIAN PUGLIARESI, PRESIDENT, ENERGY POLICY
RESEARCH FOUNDATION, INC. (EPRINC); AND BEN LIEBERMAN, SENIOR
FELLOW, COMPETITIVE ENTERPRISE INSTITUTE
STATEMENT OF RICHARD FRIAS
Mr. Frias. Greetings, Chairman McNerney, Ranking Member
Upton, Chairman Pallone, and Ranking Member Rodgers. My name is
Rico Frias. I am the executive director of the--of NAFOA, and a
citizen of the Chihene Nde Nation. Thank you all for your time
today, as well as the opportunity to talk about talk--talk in
support of H.R. 8068, the Tribal Energy Investment Act of 2022.
As anyone who has filled their gas tank in the past few
weeks knows, the energy industry touches every part of our
economy and of our daily lives. We have seen how energy
development can transform communities, how it can pull entire
regions out of poverty, and how it can shape world events. At
NAFOA we know that tribal governments are excited to unlock the
energy potential of Indian country, and we believe that H.R.
8068, which permanently changes the ability of the loan
programs office to offer direct nation-to-nation loans, is an
important step to helping us get there.
Indian tribes hold a unique place in our country. They also
face challenges that traditional energy development
organizations do not face. For example, the status of tribal
trust land creates barriers that non-tribal energy developers
would not encounter. The change from loan guarantees to direct
loans from the Department of Energy removes the impediment of
finding a lender willing to fund the project. The lack of
access to capital is a longstanding problem, as many
institutions have largely shown an unwillingness to work in and
with Indian country.
Direct loans are also more consistent with the nation-to-
nation relationship that tribes share with the U.S. Federal
Government. The treaties are the basis for the trust
responsibility the U.S. has with tribes. Permanently
authorizing the loan program's office to do direct loans
strengthens the nation-to-nation relationship, and takes
another step in fulfilling the promises the United States has
made to tribes.
By permanently authorizing LPO to offer direct loans to
tribal governments, we are addressing two critical topics for
Indian country: energy and economic development. By offering
direct loans, we are removing an unnecessary component from an
already complex process, and addressing the lack of access to
capital that tribes and tribal members face.
For the future of tribes it is crucially important that
quality, high-paying, and, perhaps most importantly, long-term
jobs are on or close to traditional tribal lands. This helps
solve several of the issues tribal governments face, such as
creating jobs that encourage tribal members to stay within
their communities, and to ensure that employment remains
diversified so that a downturn in one industry, which we have
seen due to COVID recently, would not cause outsized economic
harm to the tribal economy.
Direct loan authority also addresses the lack of access to
capital within Indian country. Banks and other financial
institutions have for many years failed to work in Indian
country. This is why the change from loan guarantees to direct
lending is so important. While we encourage financial
institutions to work in Indian country, the recent joint notice
of proposed rulemaking on the Community Reinvestment Act shows
how difficult it really is to bring capital into tribal
communities and other under-served communities.
One of the major benefits we feel of the LPO direct loan
program is that the program, like NAFOA, is technology
agnostic. We know the benefit of a clean, balanced, and stable
climate, as well as the need for energy transition over the
coming years. However, while tribes and their members are
excited to participate in the new energy industry, they should
not be required or asked to bear the economic burden of the
energy transition that the broader economy is still
economically benefiting from.
Additionally, renewable energy products--projects require a
tax equity partner, which adds another layer of complexity for
tribes to overcome.
It is also crucial for the unique nation-to-nation
relationship and for tribal self-determination that individual
tribes be allowed to decide which energy sources meet their
community's unique needs and economic circumstances.
When tribes are given a level playing field, they are able
to compete with and even surpass the competition. Permanent
authorization of the LPO loan program is another step toward
unlocking the Indian country's potential for not just energy,
but economic development overall. Removing uncertainty around
the LPO's authority to offer direct loans will help tribes
across the country to compete in the energy industry, and
ensure that our economy works for everyone.
Again, I thank you very much for your time today, and for
allowing me to testify. I am available for any questions.
[Speaking native language.] Thank you.
[The prepared statement of Mr. Frias follows:]
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Mr. McNerney. Thank you. The gentleman yields. We would
like to try again to recognize Mr. DeLaski, and hope that this
time we can follow through.
Mr. DeLaski, you are recognized.
STATEMENT OF ANDREW DeLASKI
Mr. DeLaski. Thank you. I appreciate the opportunity to
testify today, and thank the committee for this opportunity.
I am here today to testify in favor of two very important
bills: H.R. 7947, the Weatherization Enhancement and Readiness
Act; and H.R. 7962, a bill to amend the Energy Policy and
Conservation Act with respect to water heaters.
I would like to thank Representatives Tonko and Dingell,
respectively, for the introduction to these bills, and all the
cosponsors for their support.
I am here today on behalf of two organizations, the
Appliance Standards Awareness Project, of which I am the
Executive Director; and the American Council for an Energy
Efficient Economy. ACEEE is a non-profit, 501(c)(3)
organization that acts as a catalyst to advance energy
efficiency policies, programs, technologies, investments, and
behaviors so that all households experience equitable benefits
from energy efficiency improvements. ASAP is a coalition
project housed at ACEEE that works to advance and defend new
appliance equipment and lighting standards that cut emissions
that contribute to climate change, and other environmental and
public health harms, save water, and reduce economic and
environmental burdens for low and moderate-income households.
I also want to recognize organizations that were involved
in the development of the Weatherization Enhancement and
Readiness Act and helped us prepare this testimony: the
National Association of State Community Services Programs, the
National Community Action Foundation, and the National Consumer
Law Center. We are grateful for their longstanding leadership
on this program, and their work to support this bill's
development.
With respect to the water heater bill, I would like to
recognize the contributions of the Air Conditioning, Heating,
and Refrigeration Institute; the National Rural Electric
Cooperative Association; the Solar Energy Industries
Association; and the Natural Resources Defense Council. We
worked in collaboration with each of these organizations during
the bill's development. And we also consulted with State
governments, other efficiency organizations, and individual
utility companies. Of course, any errors in this testimony of
commission or omission are my responsibility alone.
These bills will improve two of the most important Federal
programs for easing the burdens of high energy bills on low-
income families, and delivering large energy savings that
protect our environment, improve power system reliability, and
improve energy security.
The first, the Weatherization Enhancement and Readiness
Act, would add needed flexibility to the Federal weatherization
assistance program, which helps low-income families by making
energy efficiency improvements to their homes. The reforms
contained in this bill would, first, raise the maximum amount
that the program can invest in any one home, a critical need
with wages rising, also particularly important for rural
households that can be more expensive to serve.
It would also--the bill would, second, increase the amount
available to make essential repairs to homes which are
necessary for safe, effective, and durable weatherization
improvements.
Third, it would raise the cap on solar energy investments
for a home allowed under the program.
And fourth, it would remove bureaucratic barriers to
weatherization improvements.
With energy prices on the rise through the war in Ukraine
and severe weather events that can threaten health and safety
happening more frequently, such as the severe heat waves of
last week, people across the country need Congress to act on
this bill.
Today, as many as one in five eligible households is not
able to benefit from this program, due to structural problems
with their home: a hole in a roof, a mold problem. This bill
would create more opportunities, more flexibility to address
these problems so homes can be weatherized.
Reforms in this bill are urgently needed in 2022 to make
sure that the lowest-income households--many of them rural,
many people of color, many elderly--that have the greatest need
of assistance can fully benefit from the weatherization
assistance program.
The second bill would amend the National Appliance Energy
Conservation Act, a cornerstone of U.S. energy policy that
covers about 60 product categories. The average U.S. household
today is spending about $500 less per year on their utility
bills because of existing standards enacted under this program.
It is one of the most successful programs for reducing utility
bills for consumers, saving energy.
Standards have also resulted in an enormous reduction in
climate change emissions and other pollutants. This bill would
amend the law with respect to water heaters, one of the largest
energy-using products in our homes and businesses. It would
update definitions to clarify the line between consumer and
commercial water heaters, it would add a new definition for
solar thermal water heaters. And third, it would authorize the
development of demand response requirements for water heaters.
[Audio malfunction.]
Mr. DeLaski [continuing]. This third element. It is a
package of amendments, but I will focus on the third.
Demand response is a well-established technique for
shifting electricity use away from times of peak demand to
times when cheap, clean power is available, thus reducing costs
and improving reliability. By heating water when power is cheap
and clean, it is possible to save money, reduce demand peaks
that can threaten grid reliability, and cut emissions from
fossil generation.
Historically, some utilities have retrofitted water heaters
with demand response capabilities for customers at or after the
time of installation. But the capability could be more cost-
effectively added to products at the time of manufacture.
Several states have now established or authorized such
manufacturing requirements.
This bill would authorize the development of a national
demand response requirement that could improve business
certainty for manufacturers and for utilities, facilitate
broader access to this important technology, and strengthen
grid flexibility and reliability. To ensure--it could ensure a
common communications protocol, easing the pathway to large-
scale demand response and significant cost savings for
consumers. A national requirement would preempt additional
states from setting their own requirements, helping to promote
a consistent national marketplace for water heaters.
Both these goals are urgently needed to approval.
Mr. McNerney. Yes, would you please wrap up your testimony?
Mr. DeLaski. I am finished. Thank you very much.
[The prepared statement of Mr. DeLaski follows:]
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Mr. McNerney. Thank you.
The Chair now recognizes Mr. Mulvaney for 5 minutes.
STATEMENT OF DUSTIN MULVANEY
Dr. Mulvaney. Good morning, and thank you for this
opportunity to discuss an important topic to our environment
and economy. My name is Dustin Mulvaney. I am a professor at
San Jose State in the environmental studies department, and a
fellow at the Payne Institute for Public Policy at the Colorado
School of Mines.
My area of expertise is lifecycle impacts, environmental
justice impacts of clean and renewable energy technologies and
infrastructures, with a particular emphasis on photovoltaics
and lithium ion batteries. I have a Ph.D. in environmental
studies, and a master's in environmental policy, and a
bachelor's in chemical engineering. I have been an expert
witness at the California Public Utilities Commission for over
a decade, and I currently serve on the technical committee for
ultra low carbon standard for photovoltaics under development
with the Green Electronics Council.
We are in the midst of a low-carbon energy transition, one
that is outpacing even the expectations of professional
analysts. A growth in photovoltaics, wind turbines, lithium ion
batteries, electrolyzers for hydrogen, heat pumps, fuel cells
are all poised for dramatic growth in the coming decades.
However, many of these same technologies that support rapid
decarbonization depend on metals, minerals, and materials that
are fraught with supply chain issues, from accusations of
forced labor, child labor, geographic concentration,
disruptions with logistics, environmental impacts from mining,
and feedstock processing, and material bottlenecks. Demand for
some of these materials often outstrip supply, and that causes
price increases and price volatility for key inputs such as
lithium, nickel, cobalt, polysilicon, and many others, making
the case that the United States would benefit from growing
domestic manufacturing and supply chains and lessen dependance
on imports.
There is a tremendous opportunity to grow domestic
industries and reshore supply chains. The United States used to
be a major producer of polysilicon, a major producer of rare
earth elements. However, while it is critical to develop these
resources for clean and renewable energy devices and
infrastructures through responsible mining, the only way to do
that is to--is first by updating our 150-year-old mining law
that has allowed a toxic legacy on public lands to continue to
this day.
We also need to ensure that we are utilizing waste streams
and considering alternative materials. These could be strategic
opportunities to mitigate impacts of mining through improved
collection and recycling of equipment and devices that contain
and could augment supplies of these critical metals, materials,
and minerals.
So it is notable to see language in bill H.R. 1599 that
emphasizes improving technology that reuses and recycles to
recapture the end-of-life waste flows that would otherwise be
landfilled or disposed of as hazardous waste. There is much
room for improvement in recycling in recovery rates for lithium
ion batteries, for example, which are not just for the electric
grid and vehicles, but also in, you know, personal electronics,
consumer electronics, cell phones, power tools, and computers.
And there are significant carbon emission savings from
recovering materials from some of these used batteries, as
well. Yet most of lithium ion batteries go uncollected. In
fact, lithium ion batteries that are unsorted is a leading
cause of fires at material recovery facilities, often causing
local governments millions of dollars in damages.
It is also fundamentally important to emphasize incentives
in policy that develop substitutes and alternatives to critical
minerals as sustainable ways to secure domestic supplies. This
would help mitigate extensive impacts from extractive
industries, which can be thinly regulated and environmentally
damaging. We are already seeing companies move away from
cobalt, nickel, and manganese in the next generation lithium
ion batteries, and someday we may see batteries that all
together avoid graphite and lithium.
There are a few specific items in H.R. 59
[sic], as written, that raised concerns in my read.
First, section 3 says the Department of Energy will need to
increase domestic production, separation, and processing. This
is concerning because it suggests DoE would be in charge of
mining permitting and oversight, activities which should
continue to be in the domains of the Department of the Interior
and Environmental Protection Agency. These latter two Federal
agencies have the expertise and mandate to minimize impacts to
lands, waters, and communities. The DoE, for example, has no
expertise with government-to-government tribal consultation
processes with indigenous communities, and it is hard to
imagine DoE developing the policies and in-house expertise to
do this work.
Second, the language of the bill is very vague, with
general references to energy and energy systems throughout. The
text is not exclusive to critical minerals, and makes no
mention of low carbon or decarbonization as a goal that could
be applied to development of any mineral resources such as
natural gas, petroleum, and coal. Failure to be specific here
would be sending mixed messages to the markets, and undermine
efforts to grow domestic low-carbon manufacturing and supply
chains.
Third, I hope that public policies that encourage domestic
industries can avoid undermining tribal consultation, cultural
resource review, and bedrock environmental laws that have
benefited all Americans simply to expedite mining.
And finally and importantly, it is key to realize that,
without ensuring the entire supply chain is domestic, supply
chains can still be vulnerable to disruption. Domestic mining
that requires overseas smelting or chemical processing before
returning to domestic manufacturing is still supply chain
vulnerable to disruption.
In summary, we need to be strategic and thoughtful about
how to grow domestic industries to build a low-carbon economy.
Failure to do so will undermine the benefits an energy
transition will bring, and risk leaving vulnerable and
historically marginalized communities behind.
Thank you again for the committee, and I look--for hosting
this discussion, and I look forward to any questions from the
committee.
[The prepared statement of Dr. Mulvaney follows:]
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Mr. McNerney. Thank you.
Mr. Greene, you are now recognized for 5 minutes for your
opening statement.
STATEMENT OF JOSHUA C. GREENE
Mr. Greene. Thank you, Mr. Chairman. Chairman McNerney and
Ranking Member Upton, members of the subcommittee, my name is
Josh Greene. I serve as corporate vice president of government
and industry affairs of A.O. Smith Corporation. And I would
like to thank you for the opportunity to testify today on
behalf of the water heating industry, as well as our umbrella
organization, the Air Conditioning Heating Refrigeration
Institute.
By way of very brief background, A.O. Smith is one of the
world's largest manufacturers of residential and commercial
water heaters, boilers, and pool heaters, and a leading global
manufacturer of water treatment and filtration products. We are
publicly traded on the New York Stock Exchange, and a member of
the S&P 500. And we are globally headquartered in Milwaukee,
Wisconsin since 1874. We employ approximately 14,000 people
around the world at 36 facilities, and do business in over 60
countries.
Now, as it relates to H.R. 7962, as the committee knows,
this is bipartisan legislation that will provide important
updates and clarifications to the definitions of water heating
products under the Energy Policy and Conservation Act, or EPCA,
and the legislation also responds to technology evolutions in
the water heating industry, and--which will also provide
business certainty for manufacturers, their consumers, and
customers. And this is obviously important to us, as an
industry that--and our customers that use our equipment on a
daily basis.
As the committee knows, Congress established the first
national standards for commercial water heaters as part of the
Energy Policy Act of 1992. And those statutory definitions are
now 30 years old. And though DoE--the Department of Energy,
excuse me--periodically updates the regulatory definitions,
either by direction from Congress or relying on its delegated
authority, subject to notice and comment.
Unfortunately, sometimes the regulatory process has its
limits. Without periodic updates to the statute to ensure EPCA
remains up to date with technology, there is a necessary
component to updating the statute. And one of the criteria as
it relates to the statute is the binary criteria that is
currently in law that distinguishes residential and commercial
water heating equipment. And those are really just based on the
sole energy input of the water heating equipment,
notwithstanding that there are various characteristics that
distinguish residential and commercial water heating equipment,
such as amperage and voltage, and the end use applications, the
outlet water temperature, amongst other things. And we
highlighted that in our written testimony.
One of the things that DoE did in 2016, in response to some
other issues, is amend--or really, slightly altered their
regulatory definitions of water heating equipment, and
specifically commercial water heating equipment. And what ended
up happening is that manufacturers were then faced with a
decision to transition commercial water heating equipment that
heretofore, for decades before, had been treated as commercial
and having to meet commercial standards, to potentially
dramatically shift them to meet residential standards. And that
would have otherwise created a vacuum in the marketplace, and
for some manufacturers to stop producing certain commercial
water heaters all together. And these are products that
commercial customers had been relying on for decades.
Thus, manufacturers had to transition very quickly, and
that caused some uncertainty in the marketplace. And what ended
up happening from there in 2017 is that the Department of
Energy, along with manufacturers, came together and decided
that the best course forward would be to amend the statutes so
we don't have the ebb and flow and kind of the regulatory
uncertainty relating to these issues.
So that put us in a tight position. But over the last
several years we have been working in earnest with a broad set
of stakeholders, including with counsel from the Department.
And H.R. 7962 is the end result of those efforts.
Now, my written testimony addresses some of the more
specific updates afforded in the bill, and I am happy to answer
questions on those. But the core components of that legislation
are important, and it is really to clarify this definitional
line between residential and commercial water heating
equipment, taking into consideration the key characteristics
the commercial water heating equipment has that is more than
just the sole energy input.
The other issue in 7962 includes one refinement that was
not addressed in previous iterations of the bill, but one in
which manufacturers support, and that is language--excuse me--
that would otherwise authorize the Department to issue a final
rule by December 31st, 2024 that will require certain
residential electric storage water heaters to have the
capability to participate in utility demand response programs,
but only if that requirement is technologically feasible and
economically justified.
This provision represents an opportunity to establish a
national standard for a narrow product class of innovative
water heating technology that heretofore is subject to--and
increasingly by--state-by-State regulation. And that,
unfortunately, presents some compliance obligations and a
quagmire for manufacturers. And having a national standard and
the benefits of the preemption that is embedded in EPCA as a
threshold matter is better for manufacturers, not only for
business certainty, but it allows us to have one standard, as
opposed to multiple standards moving forward.
So I will close with the following. Technology and
innovation in our industry have outpaced statutory definitions
for the most part, and these definitions are no longer up to
date when it applies to commercial water heating equipment. And
more broadly, H.R. 7962 offers a bipartisan and broad
stakeholder solution to update the EPCA.
Once again, on behalf of A.O. Smith and the water heating
industry, I appreciate the opportunity to testify on this
important bipartisan bill, and I appreciate Congresswoman
Dingell and Mr. Walberg for their leadership in this regard.
Thank you.
[The prepared statement of Mr. Greene follows:]
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Mr. McNerney. Thank you.
Mr. Pugliaresi, you are now recognized for 5 minutes.
STATEMENT OF LUCIAN PUGLIARESI
Mr. Pugliaresi. Chairman Pallone, Chairman McNerney,
Ranking Member Upton, Ranking Member Rodgers, members of the
subcommittee, I want to thank you for the opportunity to
testify on this proposed legislative--these proposed
legislative initiatives.
We are now in the midst of an energy crisis that may last
for years to come. A mix of forces have led to this crisis,
including accelerated demand as the world economies rebound
from the pandemic lockdowns, sustained under-investment in
fossil fuels, and a fundamental misunderstanding of the impact
of government policies on energy markets. Clearly, Ukraine war
has exacerbated this crisis, but these disruptions to our
energy systems were well underway before the war began.
If I could have the first slide, please.
[Slide]
Mr. Pugliaresi. Thank you. As you can see here, rising
prices are especially harmful to low-income households: 40
percent of these households are seeing very rapid increases
between 2021 and--2020 and 2021; 2022 is a nightmare.
Next slide, please.
[Slide]
Mr. Pugliaresi. Look, we have put an enormous amount of
effort at EPRINC in understanding the scale challenges of
moving to net zero. But this graphic shows you that, in the
absence of large supplies of natural gas, we would only have
enough fertilizer to feed about three billion of the planet's
eight billion people. Large supplies of low-cost natural gas
are critical to food security.
I would like to also point out that four pillars of modern
civilization--cement, plastics, ammonia, and steel--have no
cost-effective substitute.
Next slide.
[Slide]
Mr. Pugliaresi. You can see here the rising fertilizer
prices are also spiking food costs, and they are also
increasing--you know, the increase in natural gas with ammonia
prices and corn. So we have a kind of perfect storm of rising
prices from higher fossil fuel prices.
Next slide.
[Slide]
Mr. Pugliaresi. OK. We need a massive amount of critical
minerals in order to engage in a rapid transition to the fuels
and energy sources of the future. As noted in my written
testimony, most of these minerals and materials for the energy
system have been sourced outside of the OECD. In this regard,
H.R. 1599 appropriately recognizes that the energy transition
offers the potential to somewhat insulate us from volatility
and supply chain disruptions associated with oil and gas
production. But it will introduce a new set of supply risks.
It is appropriate that these critical minerals and
materials be fully incorporated into the Department of Energy's
ongoing responsibilities to bolster supply--you know, to
bolster U.S. energy security.
Next slide.
[Slide]
Mr. Pugliaresi. Yes. Any of us who thought that, by moving
to the these fuels of the future, these energy sources of the
future, that we would eliminate risk for volatility can just
look at what is happening now.
In fact, we issued a chart of the week today that looked at
nearly a doubling in the cost of the Tesla battery. And you can
see that price indices for key electric vehicle battery metals
have been just skyrocketing in cost. It is not going to relieve
our problems with the volatility and supply risks.
Next slide.
[Slide]
Mr. Pugliaresi. One way to get down gasoline prices is to
build out the infrastructure and the capacity of the North
American oil and gas production platform.
As you can see here, between 2010 and 2020, the United
States--the United States alone--provided over 80 percent of
world incremental demand for petroleum. And it was in that
period that we had extremely low gasoline prices. The North
American Petroleum Platform is an instrument--sort of, if you
like, a strategic asset for the United States. It is
essentially the arsenal of energy security.
Next slide.
[Slide]
Mr. Pugliaresi. The U.S. is also a major supplier of
natural gas, not just to our industry, but to the world market.
Right now--if you see the sort of negative sign, there is
actually a plus for exports. We are exporting ten billion cubic
feet a day. This is roughly equivalent to 40 percent of
European requirements for their import needs for natural gas.
And I will find--one last slide, next slide.
[Slide]
Mr. Pugliaresi. I know that we are looking for ways to
reduce gasoline prices, and probably you are tired of hearing
from us on this. But one way that we could take 30 percent--
$0.30 off the price of gasoline, much more than a gasoline tax,
would be to make a small adjustment in the renewable fuel
standard, to take it down to close to the market-based level,
which would be about ten percent. This will take back some of
the high compliance costs and other factors in the market that
are driving up gasoline prices.
And with that, Mr. Chairman, I conclude my remarks.
[The prepared statement of Mr. Pugliaresi follows:]
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Mr. McNerney. I think the witness.
Mr. Lieberman, you are now recognized for 5 minutes.
STATEMENT OF BEN LIEBERMAN
Mr. Lieberman. Chairman Rush, Mr. McNerney, Ranking Member
Upton, and members of the subcommittee, thank you for the
opportunity to testify today. My name is Ben Lieberman, and I
am a senior fellow at the Competitive Enterprise Institute, a
non-profit, non-partisan public policy institute committed to
advancing the principles of free markets and limited
government.
Before that, I had the privilege of serving on this
committee from 2011 to 2018, where I worked on several DoE
issues under Chairman Upton, and for a shorter time under
Chairman Walden. And to all of you who are retiring, best
wishes in your well-earned retirements.
I would like to use my time to just three of the DoE
programs that are the subject of some of the bills being
discussed today: appliance efficiency standards, weatherization
assistance, and loans and loan guarantees.
If there is a common theme, it is that these programs were
created to address market failures that have proven to be
considerably overstated, and thus the benefits from government
involvement are minor and not worth the burdens to consumers
and taxpayers. I would like to start by making a few general
points about DoE's appliance efficiency programs, which have
been around since the 1970's.
It is important to recognize that, for virtually every
regulated appliance, there already are numerous models on the
market that go above and beyond the current Federal standards
and there are the Federal Trade Commission energy use labels
and the Energy Star program that make it easy for consumers who
want ultra-efficient appliances to identify and choose them.
But new standards only serve to force that choice on everyone,
whether the extra cost makes sense for them or not.
One size does not fit all, and we all know our own
individual circumstances and preferences better than any DoE
regulator could. Not every homeowner comes out ahead with
efficiency standards. We have seen that standards have raised
the purchase price of appliances, in some cases more than
consumers can expect to earn back in the form of energy and
water savings. In addition, some standards have compromised
product performance, such as those that led to dishwashers
taking multiple hours to finish a load. And at this point, most
major home appliances have been subjected to two, three, four,
five rounds of successively tighter standards.
So the risk of diminishing marginal returns, even negative
margin returns, is greater than ever. I am particularly
concerned that these DoE efficiency programs are now being
hijacked in pursuit of climate agenda, with potentially adverse
consequences for consumers. As we see with the recently
proposed residential furnace rule, which might be the subject
of a future hearing, social cost of carbon is now being used as
a thumb on the scale in favor of new rounds of more stringent
standards that threaten higher costs and shift the focus toward
environmental goals, rather than what is best for consumers.
Especially troubling--and again, something we see in the
proposed furnace rule--is the effort to use these standards to
eliminate the option of natural gas appliances, even though
they are the best choice for many consumers since natural gas
is generally cheaper than electricity.
Simply put, it is not the role of government to dictate
choices and tell homeowners what they can and cannot have in
their homes.
By the same token, I would oppose provisions in H.R. 7962
mandating demand response capability in water heaters when many
homeowners do not want this feature and, in fact, some would
strongly object to it. We need to respect consumer choice, and
this measure does not.
Demand response is also something that moves us away from
the original purpose of the Appliance Standards Program, and is
yet another example of mission creep toward climate policy.
With regard to other DoE programs that are the subject of
today's legislative hearing, weatherization and loan programs,
I just don't believe we are getting very much bang for the
buck. In particular, the weatherization program is one in which
economists and others have questioned whether the expenditures
exceed the benefits. As it turns out, most homeowners, even
many low-income ones, take reasonable steps on their own to
prevent wasting energy, and thus the marginal benefit of
government programs is limited.
In addition, with so much money already being allocated to
weatherization programs, I think we are already overspending on
weatherization. And therefore, H.R. 7947 is difficult to
justify.
I would like to conclude by emphasizing what I think is an
obvious point, and that is that the best thing Congress can do
right now to save consumers money on their energy bills is not
demand response to water heater mandates, or free weather
stripping, or more DoE loans, it is to get these damn prices
down.
Now, I was working on this committee during a really
tremendous transition, where we went from very real concerns
about America running out of oil and natural gas to this
incredible shale revolution. But now we are seeing that
revolution neutralized by Federal policies blocking domestic
energy production and infrastructure. It is time to put energy
affordability first, and that can be done by once again
unleashing American energy.
To the extent that we do want to make changes to DoE
programs, the focus should be on reining in the regulatory
reach and strengthening the consumer and taxpayer protections
in the law. Thank you.
[The prepared statement of Mr. Lieberman follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. McNerney. I thank the witness. The Chair--we have
concluded our opening statements. We will now move to member
questions.
Each member will have 5 minutes to ask questions of our
witnesses. I will start by recognizing myself for 5 minutes.
As we move toward achieving a national zero emissions
energy system, securing a domestic supply of critical materials
needed for solar cells, wind turbines, batteries, and other
renewable components will be a significant challenge.
Dr. Mulvaney, what safeguards are needed to ensure that the
domestic production of critical materials is done responsibly?
And what role, if any, do you think the Department of
Energy should have in that mission?
Dr. Mulvaney. I think, as I stated in my testimony, you
know, it is a very difficult challenge, I think, to balance
these, you know, our climate objectives and land use impacts of
domestic mining. And I think we just really need to make sure
that we tighten up a very old law.
I mean, the 1872 mining law, you know, is very unclear on,
for example, reclamation or legacy mine tailings. And the EPA,
you know, is cleaning up many, you know, legacy tailings piles
across the American West from, you know, historic mining of
public lands. So I think that is really important.
And I am also hearing in the public discourse a lot of
conversation about how the National Environmental Policy Act is
holding up much of mining efforts. And I just don't see that as
a valid--not supported by the empirical record. It is, you
know, protecting the National Environmental Policy Act, and it
is the policies that are--that emerge out of that, the Clean
Water Act, and some of the Endangered Species Act and the
National Historic Preservation Act. I think these are really
important policies, and they have done very well for the
American public to date.
So now, as far as the Department of Energy's role, you
know, the Department of Energy could help perhaps finance some
of these mining efforts if we find that some of these sites,
which, you know, could be justified, sustainable mining
practices and things like that, perhaps there are vehicles that
the Department of Energy could use, like the loan program, for
example, to help develop some of these resources.
But, you know, I think we are also missing a big piece of
this, which is the recycling and materials recovery part. There
seems to be in this conversation about securing critical
minerals, metals, and materials, just more production and more
extraction, when we are really letting a lot of these resources
slip through the cracks, and they are getting landfilled and
sent to----
Mr. McNerney. OK, thank you for answering that question.
I have long advocated for policies to address the energy
water nexus, which, among many other things, relates to the
energy required to heat water in a home. Mr. DeLaski, and your
testimony is focused on the electricity savings that could be
achieved by increasing the energy efficiency of water heaters.
But can you speak to how increasing the water efficiency of
appliances and fixtures in a home or building could also lead
to energy savings?
Mr. DeLaski. Absolutely. Setting water efficiency standards
for a range of products can also drive enormous energy savings,
because we use a lot of energy in this country to heat water
for our homes and for our businesses.
Your State, California, of course, has led work there. The
dry West is facing historic drought, and the opportunity to
save water is important not just for energy savings, but also
for ensuring that we have water resources to meet the needs of
the dry West. And standards set by both the Department of
Energy and by individual states like--such as California,
Colorado, Arizona, and others are driving considerable water
savings today for a range of water-using devices.
Mr. McNerney. Well, could you address the alternatives to
reducing water waste while people are waiting for the water at
the tap to heat up?
Mr. DeLaski. The alternative--I am sorry, could you reState
the question, please?
Mr. McNerney. Well, when you turn on your hot water, you
got to wait for a minute or two for the water to heat up,
unless you have a demand--on-demand water heating. What are the
alternatives to eliminate that waste?
Mr. DeLaski. Right. Well, one of the alternatives is to--as
you said, on-demand water heaters are an option for that.
Another alternative is using recirculation techniques to
reduce--you know, to reduce water waste. But those are two
options that I am familiar with.
Mr. McNerney. Well, my time is expired. The Chair will now
recognize Mr. Upton, subcommittee ranking member, for 5 minutes
to ask his questions.
Mr. Upton. Thanks, Mr. Chairman. It is always good to be
with you.
Mr. Lieberman, welcome back. It is good to see you, that is
for sure.
As you know, NERC is reporting that we are at increased
risk of blackouts this summer--perhaps, as I said, even this
weekend, as our electric grid becomes more unstable. Baseload
power plants like coal, nuclear, and natural gas are being
forced into early retirement, with weather-dependent wind,
solar batteries taking their place, we hope.
Some believe that we ought to stabilize the electric grid
with demand response, as we know, which gives the grid
operators the ability to remotely monitor and control our home
appliances to balance supply and demand. What do you expect the
consumer protection and privacy concerns associated with demand
response are going to be?
Mr. Lieberman. [Inaudible.]
Mr. Upton. I mean, you got to use your--you should know
best of all.
Mr. Lieberman. I should know this by now.
Mr. Upton. Push the button.
Mr. Lieberman. A man's home is his castle. A woman's home
is her castle. These should always be decisions made by the
homeowner, and never the government. It is really as simple as
that. And sure, we can save energy if utilities can shut the
appliances on and off. But that is not what consumers want.
And I should add I am not opposed to demand response
capability. I am only opposed to mandating it. Let consumers
who want this feature, who think that they can save money with
it, let them go ahead with it. But I can tell you, as a
homeowner myself, this is--I wouldn't want to be a guinea pig
in this experiment.
Mr. Upton. It reminds me of the saying, ``If Mama ain't
happy, nobody's happy.'`
Do you think it ought to be mandated by the Federal
Government, or should it be a choice, then?
Mr. Lieberman. I think that is the problem. It shouldn't be
mandated by the Federal Government. There is very real privacy
issues here.
Also, when I hear about this scheme, it strikes me as very
convoluted. I really question whether it can work as well as
some are hoping. It absolutely has to be voluntary.
And to me, I think there is almost a philosophical divide
here. There are people here that argue this is such a great
idea we need to mandate it. But I am the one who is saying, if
it needs to be mandated, it is probably not a great idea.
Mr. Upton. Mr. Pugliaresi, I want to give you the
opportunity to address the energy crisis that we are facing
today. We use fossil fuels for everything in our economy, from
plastics and fertilizer--your graphs were terrific. What are
some of the near-term solutions to record-setting energy prices
that we ought to be looking at and focused on?
We know about Keystone, and we know about permitting
infrastructure needs with NEPA reforms sending the right
signal, but what are some of--what are some basic things that
we ought to be focused on, and what might you suggest that we
do?
Mr. Pugliaresi. Yes. So first we need to send the right
signals to the marketplace. We need to restore the leasing
program. We need to give confidence that the North American
Production Platform can have an expansive, cost-efficient
expansion over time. And the government is heavily involved in
affecting that outcome.
We need to permit a lot more natural gas pipelines. The
Marcellus, West Virginia, Pennsylvania, Ohio, these are
enormous gas reserves. They have production levels that look
like Saudi Arabia if they were oil. We can double or triple
U.S. natural gas production in the United States. We can keep
our prices low, and we can supply the world.
We are, as I said, an arsenal of energy security. But we
have to change the policies. We need to give assurance in these
constantly interventions--I mean, I know you are quite familiar
with the Line 5. These constant regulatory and political
attacks on Line 5, they create risk in the marketplace. People
start to wonder what is next?
Mr. Upton. Well, can you imagine--for the folks that don't
know about Line 5, this is a line that connects the upper
peninsula with the lower peninsula of Michigan. And if--and
that line needs to be replaced, there is no question about
that. It was built in the late 1950's, I think it was, 60-some
years ago. But I can't imagine the impact on gas prices in the
Midwest if that line was simply cutoff, and not replaced, in
terms of the impact at that marathon refinery in southeast
Michigan.
Mr. Pugliaresi. Independent estimates show shutting down
that line would increase consumer costs by $58 billion.
Mr. Upton. Yes, it is something else.
Mr. Pugliaresi. We can do more for the fuel supply. We
should try to get a more national standard for fuel specs.
Mr. Upton. Let me ask you one more question in my remaining
15 seconds or so.
Microchips. You know, we have got legislation that passed
the Senate big time more than a year ago. Does this have an
impact on energy? Are you able to get something like this back
through so we can actually build it ourselves versus relying on
China?
Mr. Pugliaresi. Absolutely. A reliable supply of microchips
adds a lot to the efficiency of the--of our entire production
process: all the inputs into petroleum production, all the
inputs into industrial production. So it is a very important
supply chain issue.
Mr. Upton. I yield back. Thank you, Mr. Chairman.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes Mr. Pallone, full committee chair, for 5 minutes to
ask questions.
Mr. Pallone. Thank you, Chairman McNerney. I wanted to
start with Mr. DeLaski, and I have got three separate questions
here, so maybe a minute or so for each of you to respond, if
possible.
So, Mr. DeLaski, Representative Dingell's bill, H.R. 7962,
contains provisions for water heater demand response
requirements. Demand response, as I understand, is an important
tool to lower consumer bills, fight climate change, and address
grid resilience and reliability. So could you talk to us about
a minute about the importance of demand response, and
especially as we face more frequent weather events, extreme
weather events that place a lot of stress on the grid? How can
demand response help with emergency events and ensure grid
stability?
[Pause.]
Mr. Pallone. I don't know if he heard me.
Mr. DeLaski. Demand response is an incredibly important
resource for ensuring grid stability.
As we--as the peak--as peak demand goes up and that
happening as--on a hot weather event, that strains the power
grid. It can lead to outages as we faced risk of this summer
[inaudible] during this hearing. It also drives up costs
enormously. That is the most expensive power, is the marginal
power, however it is generated.
Demand response allows market to move that demand to
another time. And water heaters are a natural battery. Why not
use that battery to charge up that water heater with hot water
when power is cheap, and when it is produced by clean
resources? That is what demand response programs can do.
This bill would make those programs more possible. It
doesn't require them. It doesn't mandate them. It simply makes
them more possible by allowing for the Department to consider
setting demand response requirements for water heaters, as are
manufactured by companies such as A.O. Smith.
Mr. Pallone. Well, thank you. Let me go to Mr. Frias.
The Tribal Energy Loan Guarantee Program, while well-
intentioned, has not guaranteed a single loan in its 17-year
history. We know that. So can you describe for us again in
about a minute or so the potential importance of this program,
why it hasn't delivered on the promise, and whether you think
the changes proposed in the Tribal Energy Investment Act will
ensure that tribes finally have access to energy project
financing?
[Pause.]
Voice. Microphone.
Mr. Frias. Apologies. Thank you for the question, Chairman
Pallone. And it is a fair question.
Looking back at the history of the tribal program, though,
it was authorized in 2005, but it was not appropriated for
until 2017. And the first solicitation did not go out until
2018. It was making good progress in Indian country, and then
the pandemic hits.
You know, and by comparison, I would say that the NIGC took
three or four years, National Indian Gaming Commission, to have
regulations and be set up and to be going and working to
regulate Indian gaming. So a year for them to get going, once
they had staff and funds, is a pretty good turnaround.
With many tribes working remotely or shifting funds to
address the impacts of the pandemic, it is understandable that
the program has faced delays in the past several years.
I can tell you that, since I came on as executive director
of NAFOA in July of last year, that we have seen strong
interest from tribes about this program, interest in meeting
with DoE, LPO, the Office of Indian Energy, specifically at our
conferences, where they are speaking on panels, specifically
our spring conference in Seattle, to talk about energy
programs. There is interest in energy programs in Indian
country.
And one of the great things about this program is that it
is technology agnostic, right? Whether it is extraction,
whether it is renewable, the program will work to find it. And
it addresses a critical problem in Indian country, not just for
energy development, but for economic development across the
board, and that is access to capital.
And so this program is important to Indian Country. You
know, without the pandemic, I think we wouldn't see the history
you are addressing there.
Mr. Pallone. Just quickly, Dr. Mulvaney--I am talking now
about H.R. 1599, the Securing America's Critical Minerals
Supply Act--does that meet the standards that we want to see
for supporting domestic critical minerals supply chains?
Are there any changes to the bill that--so it does not
inadvertently contribute to harmful mining practices?
And what changes do you think must be made to guarantee the
bill truly supports clean energy production, if you will?
Dr. Mulvaney. I think there could be more specificity
about--around what energy, minerals, or critical minerals are
being supported. I think there are, you know, ones that need
more attention than others.
There also could be more language around decarbonization
and low carbon energy systems that help define that, as well.
Mr. Pallone. Thank you, Mr. Chairman.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes Mrs. Rodgers for--full committee ranking member, for
5 minutes to ask questions.
Mrs. Rodgers. Thank you, Mr. Chairman.
First and foremost, I am a mom. We recently remodeled my
kitchen, our kitchen. And I didn't like my choices of
dishwashers. And today, because of what was available, we wash
most of our dishes by hand. But I want to get back to some of
my questions that I think are really important for energy
reliability and affordability.
Mr. Pugliaresi, I wanted to thank you for being--returning
to the committee. I appreciate your testimony. Last year you
testified in front of our committee, and you warned--you said
that it was important for us to look to the example of Germany
and their approach in imposing various top-down policy
dictates, shutting down certain energy sources, and the result
of being more dependent upon Russia. You noted that spiking
energy costs there and elsewhere were a warning for us, as U.S.
policymakers, and that was months before Russia invaded
Ukraine.
Americans now see the risk and the--and we see the impact
on reliability and affordability. In the United States there
has been an unrelenting drive to shut down fossil energy with
weather-dependent wind and solar. Do you think the policy
debate over this rush-to-green movement would benefit from
authoritative information on what is necessary to secure energy
resources, including critical minerals?
Mr. Pugliaresi. Absolutely. We need a much better
understanding of the risks.
By the way, Germany has now fired up its major coal plants.
And from the folks we talk to there, their climate program is
delayed by at least a decade.
Mrs. Rodgers. So in the late 1970's, the Department of
Energy was organized as a cabinet agency to oversee national
energy policy, and specifically address energy supply
emergencies. H.R. 1599 provides a new function in the
Department's core statute to evaluate energy resource
vulnerabilities, both for critical materials of renewables and
for traditional energy.
How do you think that this might be useful in putting
energy security back at the center of our debate?
Mr. Pugliaresi. Right. If we move to a set of systems where
we are reliant on these critical materials and minerals, we are
particularly reliant on foreign sources that are not
necessarily friendly, actually might be quite hostile to the
United States. We need a careful assessment of what that means
to our energy security and the reliability of our energy
complex.
Mrs. Rodgers. Thank you. So--and we hear from our
colleagues on the other side of the aisle and the
Administration that a move to renewable energy will reduce
energy price volatility, which we are all experiencing at the
gas pump these days. Is the answer to record high gas prices to
increase dependance on critical minerals and materials for
renewable energy?
Mr. Pugliaresi. It is very difficult to hide from the
volatility of any commodity. The way we--on our traditional
energy complex is--we had a large strategic petroleum reserve.
We had an expansive program to expand U.S. oil and gas
production, diversified production, not just around the North
America, but around the world. These are the features that add
to your energy security.
Mrs. Rodgers. Thank you, thank you.
Mr. Lieberman, I appreciate your testimony. One of the
questions I have about the legislation amending the
weatherization program concerns taxpayer stewardship. When
Congress reauthorized the program in 2020, it allowed for a
limited program to help ready homes for weatherization with a
sunset and safeguards, such as a minimum investment to savings
ratios. We have not had enough time to evaluate the program yet
in the bill before us today.
But the sunset is eliminated. Minimum investment to savings
ratios is eliminated, and the whole--a new program is added. Do
you think this reflects careful spending of taxpayer dollars?
Mr. Lieberman. When I look at this new bill, to me it looks
like they are clutching at straws, looking for rationales, for
more money that don't really make a lot of sense to me, that we
have to spend money now on houses to get them ready for
spending more money later on. This seems kind of a reach. And
the weatherization program is already very heavily funded.
I think it makes a lot of sense to see what we are getting
for the money that has already been allocated before we throw
more that way.
Mrs. Rodgers. Thank you. Mr. Pugliaresi noted that behind
these drives to fund electrification programs, it actually
increases high--increases electricity rates, and it increases
the burden on the poor than--it disproportionately impacts the
poor. Do you think Congress should evaluate risk of expanding
Federal programs that will raise electricity on low-income
families and workers?
And I have expired my time.
Mr. Pugliaresi. I think energy poverty should always be a
front burner issue whenever energy policy, climate policy is
being discussed.
Mrs. Rodgers. Yes. Thank----
Mr. Pugliaresi. We are already seeing energy price
increases more than expected.
Mrs. Rodgers. OK, thank you. Thank you. Let's stay focused
on reliability and affordability.
I yield back.
Mr. McNerney. The gentlelady yields back. The Chair now
recognizes the gentleman from California, Mr. Peters, for 5
minutes to ask questions.
Mr. Peters. Thank you, Mr. Chairman, and thank you, Ranking
Member Upton.
First I would like to discuss one of the bills before us
today, H.R. 8053, the Guaranteeing Resilient Installations for
Defense Act, or GRID Act. I am happy to be discussing that
today. I worked on--pretty hard on that over the last two
years, and I want to thank the committee leadership and staff
for working with my office to find a path forward on this
important piece of legislation.
As many of you know, my district in San Diego is host--is
proud to host one of the largest military footprints in the
country. One facility in my district, Marine Corps Air Station
Miramar, is pioneering the Department of Defense's investments
in the adoption of renewable energy and resilient energy
infrastructure.
Miramar's collaboration with relevant stakeholders and
staff has culminated in the design of one of the most
innovative microgrids in the Department of Defense. The project
constructed a power plant with both diesel and natural gas
generation to supplement existing landfill gas and solar power.
Also, the station built an energy and water operations
center to manage the microgrid and other utility control
systems at Miramar.
These capabilities have already demonstrated their value to
the local community, as well. In the summer of 2020 the
microgrid was used to assist local communities by preventing
rolling blackouts during a heat wave, proving its utility on a
larger scale. I am confident this experience informed the
written testimony provided by the Department of Energy today
when it stated that this bill would, ``address the significant
security disadvantages for facilities located throughout the
United States.'`
The microgrid at MCAS Miramar enables the installation to
use onsite renewable resources and power generation to supply
its critical base loads when utility power is not available.
And when the microgrid system is grid-connected and utility
services are available, the system reduces costs for the base.
The air station's success incorporating renewable energy
solutions into its electric grid provides proof of concept for
the problem the GRID Act solves. It provides the Secretary of
Energy, in coordination with the Department of Defense, to
enter into contracts and agreements to improve the resilience
of defense critical electric infrastructure, and reduce the
vulnerability of critical defense facilities to the disruption
of the supply of electric energy to those facilities.
I wanted to ask Dr. Mulvaney. In your testimony you note
how the GRID Act enhances national security. Can you elaborate
on how you believe investments in the resilience of defense
critical infrastructure and possible investments in local
electricity infrastructure improves national security?
Dr. Mulvaney. Yes. You know, I spent time looking at issues
related to ratepayer, and I am very sensitive to cost issues.
So, you know, it was nice to see in that bill that the--as
proposed, that the Department of--or at least the Federal
Government could potentially be investing in local communities
to enhance grid resilience.
We have quite--you know, thinking particularly from the
California perspective, we have quite big challenges on our
plate in the State, with wildfires and moving power to where it
needs to be on certain days because of those wildfires.
So I think making those investments and making sure that
the lights stay on as consistently as possible are really key
to national security. And they help the rural communities that
also live in and around these bases also keep the lights on,
which is, I think, critically important for national security
and human well-being.
Mr. Peters. Maybe the benefits to an average household from
that kind of strategy.
Dr. Mulvaney. I am sorry. Could you repeat one more time?
Mr. Peters. Elaborate a little bit more on the benefits to
an average household of that kind of strategy.
Dr. Mulvaney. Well, electricity costs are--you know, in
California--are some of the highest in the country. And having
investments not be rate-based by the utility, but instead
coming from outside will, I think, help lower those bills, or
keep them where they are at, keep them from increasing, which--
you know, electricity infrastructure is expensive. And we have
a very old electricity system that we have connected all of us
together with, and have, you know, given us so much benefit.
But it is time for us to start upgrading it, and modernizing
it, and giving us the ability to, you know, isolate parts of
the electric grid, for example, where these power outages are.
So that would be another benefit to these communities, is
that they actually are able to go through these hot days we
just had. For example, in the Santa Cruz mountains, where--near
where I live, we had--the whole Stanford campus was down on
power. It was 100 degrees yesterday, and it was because of a
relatively small wildfire going right in and around the
transmission lines. So, you know, we got to reinvest here.
Mr. Peters. Thank you, Dr. Mulvaney. I appreciate it.
And I yield back. Thank you.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes the gentleman from Texas, Dr. Burgess, for 5 minutes
for his questions.
Mr. Burgess. Thank you, Chairman.
And Mr. Pugliaresi, let me just ask you a couple of
questions. We are doing a hearing today. We are kind of in the
middle of an energy crisis. A lot of people don't understand
why we are in the middle of an energy crisis. Two years ago
this was not a problem. Today it is a serious problem. It is
hard to tell from the bills that we have in front of us that we
are taking this seriously, and we don't have--as has been
pointed out by Ranking Member Upton--we don't have the
Department of Energy here, which is really a shame, because we
should be able to ask them questions.
But what is your opinion of the bills that we are
considering today? Are they going to be able to address this
emergent crisis that we have in energy in this country?
Mr. Pugliaresi. Many of these bills, particularly--well, I
guess, 1599 can be very helpful in addressing problems that
will emerge over time. But this is not the critical problem
facing the country. We are not going to move through a
transition as many people expect.
Fossil fuels are embedded in the U.S. and the world
economy. They come with a lot of favorable characteristics,
particularly the density and the cost effectiveness of their
use. And so there will be--it will be very difficult to do a
rapid transition. These fuels are going to be with us for
years. Just how they end up costing us as a country is going to
depend a lot on government policy. And if we have a policy that
seems to think that we can stop the production of oil and gas
before the alternatives are cost effectively ready, we are
going to be in a lot of hurt.
Mr. Burgess. Well, I think we are seeing that, as being
evidence, as you pointed out, I think, on your slide, that some
of us are inconvenienced, but some people are devastated by the
economic effects of this ill-considered rapid transition. It is
almost as if, rather than scientific thinking, it was magical
thinking. We can now get our energy from different sources
without doing the hard work and making the investments along
the way.
Mr. Pugliaresi. I couldn't agree more. I mean, we just did
some work the other day on biogas, just biogas for electric
generation. In order to meet the goals of 2050 under net zero,
we are going to have to take what we now dedicate, which is
about, in terms of land mass for bioenergy, for power, the land
mass of France, and add to it the land mass of Mexico.
These kinds of requirements are just enormous, and they are
going to take decades and decades to figure out the best way to
proceed. The notion that we can do this quickly, in my view, is
not just aspirational. It is somewhat delusional.
Mr. Burgess. Well, and I wasn't going to go here, but since
you brought up the word ``delusional,'` it is delusional to
think that you can turn everything off in an industry as
complex as the traditional energy markets and then say, oh,
gosh, I made a mistake, just kidding, turn it all back on. It
doesn't work like that. These investments take time. They are
capital intensive. And right now you don't have the economic
climate that is willing to make these long-term investments
when the Federal Government has acted in the way it has.
Mr. Pugliaresi. It is a serious problem, and we are going
to have to rethink it.
Mr. Burgess. Mr. Lieberman, I was so grateful you mentioned
the point at which, on this committee, the consideration was we
are running out of natural gas. The Energy Policy Act of 2005
was predicated on the fact that we have to import natural gas
from the North Sea, because we didn't have enough, we were
running out of feedstock for fertilizer, and how policies that
really were developed in this committee--so we are capable of
that type of deep thinking--policies developed in this
committee actually led to an abundance of natural gas after the
fracking and the shale revolution.
So it is disconcerting to see people willing to absolutely
discount what had worked when we knew we were getting into
trouble, as you pointed out earlier, in the last decade, and
then to completely undo it with no thought from where we
backfill this supply.
Mr. Lieberman. Absolutely. The transition when I was on
this committee was incredible. There was bipartisan concern
that America was running out of oil and natural gas. Along
comes the shale revolution, and some of the changes in the 2005
energy bill facilitated that to an unexpected abundance. Now we
are seeing that abundance under threat.
One thing that Mr. Pugliaresi mentioned was the tremendous
amount of natural gas bottled up in Appalachia, just a couple
of states away from states like New York and into New England
that desperately need it. But the infrastructure isn't there.
Most of the bills today deal with giving the Department of
Energy more regulatory authority and more spending authority.
That is not what we need. We need BTUs being made in America
and being shipped to consumers.
Mr. Burgess. I couldn't agree more. So they don't have to
buy them from Russia, absolutely.
Thank you, Mr. Chairman. I will yield back.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes the gentleman from Pennsylvania, Mr. Doyle, for 5
minutes to ask questions.
Mr. Doyle. Well, thank you, Chair, and also to Ranking
Member Upton for holding this important hearing.
Reliable and affordable energy is critical to both families
and businesses, and the key to ensuring that we have reliable,
stable, and affordable energy is to invest in domestic, clean
energy production, domestic supply chains, advancing new
technologies, and making our grid, businesses, and homes more
efficient.
I am also pleased that we are talking today about critical
minerals and their supply chains today. It is vitally important
that we proactively work to establish a domestic supply chain
for critical minerals. If we are to build a cleaner energy
future, and wish to be truly energy independent, we must ensure
that the entire lifecycle of critical infrastructure is made
here in the United States.
With that said, Dr. Mulvaney, can you expand on how we
could design a system at the Federal level, or incentivize
better recycling of critical materials?
Dr. Mulvaney. Well, I think, in general, with a lot of
these electronic products, they are not prohibited from going--
entering into landfills, for example. We don't have national
electronics recycling policy. We have hazardous waste policy.
But I think if we were to have a comprehensive program like
some states do in recovering all electronic products, or trying
to do what they can with that, I think that that could go a
long way to augmenting the supplies that we are going to need.
Mr. Doyle. You know, a second important piece of this
puzzle will be developing new materials to replace rare,
critical materials. Can you talk about how we can help
companies who have innovative technologies get into the market?
Dr. Mulvaney. That is a great question, and I am not sure I
have the full set of solutions there. But I think that we need
to reward companies that are being more material use efficient.
So for example, solar panel over the last ten years uses
ten times less silver in it than it did a decade ago. And that
is because silver is expensive. So companies have that internal
motivation. But imagine what the savings would be if we started
having a system where we recognized that, you know, companies
that could avoid silver all together, for example, would be
rewarded in the marketplace. And I am not sure what the
specifics of that would be, but that, I think, is the general
concept there, is to reward the most materials innovative
companies that are making new products.
Mr. Doyle. Thank you. You know, weatherization can have a
large impact for individual families, both in the short and
long term, and in the city of Pittsburgh that I represent we
have a lot of older homes, and the utility bills for families
can end up taking a large percentage of their income through no
fault of their own, but because they have a leaky house.
So, Mr. DeLaski, can you expand on the importance of the
Weatherization Readiness Fund?
Mr. DeLaski. Absolutely. Based on data from programs around
the country, local programs like the program in Pittsburgh and
others, and cities and rural areas around the country, about
one in five households, the weatherization professionals go
into the home, and they can't do their work because the home is
in such disrepair that if they were to do insulation or
ceiling, it could be damaged right away. Say you have a hole in
the roof, say there is rotting floorboards. So one in five
homes has--are in that State of disrepair, where you can't
provide this service. And, of course, these are the homes
occupied by the lowest income residents of these areas.
Just to tell, you know, one story that we came up with--
this is from Aberdeen, Washington--this is a home where a
partially disabled man, an elderly--a senior citizen, was
deferred from weatherization because of extensive rot in the
floor. And the State program helped him repair these issues in
his floor, and then the contractor, the weatherization
contractor, could then come in and do the weatherization job.
And as a result, his annual heating bill was reduced to $700 a
year. This is a home built in 1912.
This happens time and time again for the program, so it is
really critical that programs be able to do the basic repairs
so they--you can go ahead and insulate. You can go ahead and do
the weatherization that still has to be cost-effective. It
still has to be cost effective to deliver those services. So it
is really important to be able to do the repairs.
Mr. Doyle. Thank you.
Mr. Chairman, I yield back.
Mr. McNerney. The gentleman yields. The Chair now
recognizes the gentleman from Ohio, Mr. Latta, for 5 minutes
for questions.
Mr. Latta. Well, I thank my friend and the chairman for
yielding, and I also thank our witnesses for being with us
today.
Mr. Pugliaresi, if I could start questions with you--and I
have got so many questions and so little time. You know, the
first chart--or one of the charts you showed us--figure two,
which was world production depends on fossil-based fertilizers.
And this is kind of an interesting chart, because my mom was
raised on a farm, my wife was raised on a family farm. And back
in 1965 on this chart is showing about--just a little over one
billion people being able to be fed, and where we are today. I
look at that as interesting, because in 1965 my grandfather was
65, and he was--and so it is interesting to see where we have
gone in that short period of time.
And, you know, my concern is, when you look at these
numbers that you showed us, that three billion people, you
know, are dependent on--we are--you know, where we are, that if
we don't have that fertilizer, depending on the eight billion
with the mixed diets, you know, what is going to happen if we
don't have these fertilizers out there in the future?
Because, again, this is absolutely critical for survival of
the population.
Mr. Pugliaresi. Yes, we are just going to--we are going to
have starvation and spiked prices. So I just don't think it is
going to happen. I don't think the--you know, the--particularly
the developing world, they are not going to move to a system in
which they don't use ammonia or, you know, fossil fuels to make
fertilizer.
Now, the question is maybe you could do some of this with
carbon capture and things like this, but the rising cost of
this is likely going to see resistance. These countries will--
you know, I don't think the political leadership is going to
permit them to not grow food.
Mr. Latta. Well, and again, because--you know, what we are
seeing with Ukraine this year with--they are not bringing out
the maybe 60, 65 percent of their crop, and then they got to
get it out to market.
But then, in another--your figure three shows the rising
prices because, again, that is going to affect everybody, not
only in this country, but around the world what the price is
going to be, because a lot of people are saying, well, prices
are up for farmers this year, but the problem is going to be
the cost of production is so much higher than it was last year.
Mr. Pugliaresi. Right, right, right.
Mr. Latta. So, you know, it is--I think it is critical.
You know, again, another figure that you have was on--you
know, and it was brought up just a little bit by Mr. Doyle. But
when you are looking at, you know, rare earth minerals--this is
your figure four.
Mr. Pugliaresi. Yes.
Mr. Latta. And, you know, when we need these minerals, and
when you are thinking about especially where communist China is
in supplying rare earth minerals across the globe today, you
know, we are--but, you know, we talk about being able to
recycle batteries and things like that, but we have got to have
these things today.
So where do you see, in the near term--because, again, it
is--you know, we had testimony here. It might take ten years to
get a mine open in this country.
Mr. Pugliaresi. At least.
Mr. Latta. To be able to get these, if we could get the
mine open.
Mr. Pugliaresi. Yes, right.
Mr. Latta. So what is your projection, when you look at
these numbers across your figures here, what is going to happen
in the near term?
Mr. Pugliaresi. So I think the risk--one of the risks that
we have to understand that we face is that, if we try to
transition too quickly to these alternative technologies, we
are going to substitute an energy security situation in which
we are actually relatively secure if we take the right
measures, to a set of circumstances in which we will be
relatively insecure. Because some of these folks making these
critical materials, unless we have supplies here at home, are
not friendly to the United States.
Mr. Latta. Well, thank you.
Mr. Lieberman, you know, I introduced legislation a while
back that--you know, the discrepancies between energy standards
based on when a furnace, central air conditioner and heat pump
is installed versus when these appliances are manufactured. Can
you talk about the problem of stranded inventory, and how
regulations can better be tailored to avoid this problem?
Mr. Lieberman. Yes. Some of the standards have the
regulatory deadline as the point at which the product must be
installed, rather than a drop dead deadline, after which you
can't manufacture a certain product. And when the installation
date is the deadline, that means some legally manufactured air
conditioners or other equipment can no longer be installed. And
that means that, if it is at a warehouse, if it is at a
retailer, it is no longer legal, and so you have stranded
inventory.
So I do like the idea of moving away from using the
installation date as the deadline. Again, many of these
wholesalers, retailers are small businesses. They are
struggling with supply chain issues, as well. We want to make
sure they are not stuck with inventory that they cannot sell.
I would point out that we need to be more broad about this
because DoE regulations are just part of the story. There is
EPA regulations, as well, that can create the risk of stranded
inventory. So I am familiar with your bill, we just--we need to
make sure that it is comprehensive.
I would make one point that one of the reasons for using
the installation date is to prevent a run on the older models
before the new models take over, which is sort of an indication
that consumers wanted the older models. And that is worth
keeping in mind. We want DoE standards that don't deprive
consumers of what they want.
Mr. Latta. Well, thank you very much.
And Mr. Chairman, my time has expired, and I yield back.
Mr. McNerney. The gentleman yields. The Chair now
recognizes the gentleman from New York, Mr. Tonko, for 5
minutes to ask questions.
Mr. Tonko. Thank you, Mr. Chair. I thank you for holding
this hearing and including H.R. 7947, the Weatherization
Enhancement and Readiness Act. I also thank you for your
commitment to protect and strengthen DoE's Weatherization
Assistance Program.
This program is essential to supporting low-income
households, especially during a time of increased energy
prices. But we know even before these recent energy increases,
many Americans were struggling to pay their bills, and low-
income families have a disproportionate energy burden, a higher
percentage of their income being used to pay their energy
bills. As many as one in five Americans reported reducing or
foregoing necessities such as food or medicine to pay an energy
bill. That is unacceptable.
So the Weatherization Assistance Program plays a critical
role in helping these families, and it works. Homes receiving
assistance save an average of $372 every year. But despite this
great work, we know the program can be improved.
I want to focus on two important provisions of H.R. 7947.
First, the bill would raise the average cost per dwelling
unit from $8,000 for Fiscal Year 2022 to $12,000. This is the
limit on how much assistance a home can receive. The ACPU has
not been adjusted at a rate to keep up with recent increases in
the cost of building materials, restricting the services
households receive, and putting pressure on WAP crews' wages,
which are included in the ACPU calculation.
So Mr. DeLaski, can you help us understand why at this
moment an increase in the average cost per unit is indeed
appropriate for this program?
Mr. DeLaski. It is urgently needed for this program. With
the increase in wages that we are seeing across the economy,
this is affecting the programs and their ability to be able to
retain--to hire and to retain workers to deliver weatherization
services. These are skilled people who can move on to other
jobs if there is not--they are being paid adequately to do
weatherization services. So the rise in wages is one factor.
Another is the cost of materials. I think this committee is
familiar with--that the cost of materials are going up, and the
construction industry--of lumber. These costs and other inputs,
these costs are going up. And the program hasn't kept pace with
those--with the changes in costs to deliver these services.
In addition, I would add that the homes that are in the
worst--have the greatest needs, programs aren't able to provide
necessary services with the caps that exist today. So this
doesn't--increasing the cap is absolutely essential to being
able to provide services to homes.
I would also add that rural homes can be expensive to
serve, as well, because the technicians, the service providers,
have to travel further to provide those services. So for, you
know, substandard housing in the rural parts of the country,
rural districts, it is super important to increase this cap.
Mr. Tonko. I thank you, sir. And second, many Americans
who--would benefit from the program, but most are unable to
receive assistance due to their homes, as you indicated, being
in such poor conditions. These homes are passed over by the
program. In some areas, this might be as many as 20 percent of
eligible homes. So, Mr. DeLaski, do you believe it undermines
the goals of the Weatherization Assistance Program that
families are living in the worst conditions have the greatest
difficulties accessing the assistance?
Mr. DeLaski. Yes, it is ironic, and it is--it undercuts the
very purpose of the program, that people who most need the
services can access it.
The program provides tremendous benefits to the homes that
are able to be--to those families. But for the one in five, who
they--they come into the home, they want to provide the
service, they assess that there is the need, but then, because
of problems like a hole in the roof, or because of rot, or
because of mold, they can't do the insulation, they can't do
the ceiling. And these are the people who most need those
services, because they live in the most substandard housing.
And those are homes in urban
[inaudible], that are homes in rural areas. There are homes
throughout the country, and these are the families who we most
need to be able to serve with the Weatherization Program. And
the way the program is structured today, these houses are
deferred. In other words, they are not served. And that is a
huge problem.
Mr. Tonko. While the dedicated readiness funding, which may
support structural improvements like bad roofs, and addressing
environmental hazards like mold, and help lead to better
outcomes, certainly for the traditional weatherization
program--and provide hope for those households that have been
passed by. So I appreciate your comments.
And with that, Mr. Chair, I yield back.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes the gentleman from West Virginia, Mr. McKinley, for
5 minutes to ask questions.
Mr. McKinley. Thank you, Mr. Chairman. Well, here we go
again. After spending a year and a half on partisan messaging
bills like the Clean Future Act and Build Back Better, Pelosi
seems to be trying to avoid losses in this fall's general
election by trying to appear bipartisan.
Look, as Chairman Upton said a minute ago, inflation is at
a 40-year high. Gas prices are over $6 a gallon. The opioid
crisis continues to grow exponentially, and frustrated
Americans are increasingly turning to violence. So instead of
actually working on those matters, this majority is nibbling
around the edges.
And last night the President announced his support for a
three-month moratorium on the Federal gas tax. Really? There
is--this is nothing but a politically motivated gesture. Does
anyone really expect the trucking companies to pass on those
savings to the consumers? And with this suspension, a typical
motorist will probably only save 7 to $10, 7 to $15 a month.
That is about the price of a pack of cigarettes, or a couple of
gallons of milk.
But let's return to today's hearing, because that is what
they want to talk about.
These bills are well intended. I understand that. But, Mr.
Chairman, these bills will not increase our domestic
infrastructure, energy infrastructure, and its production, and
lowering prices. This committee should be talking about issues
that matter to Americans now.
So, Mr. Pugliaresi, if I could ask you a couple of
questions, if you were his adviser, would you tell the
President or would you be advising the President to suspend the
gas tax for three months?
Mr. Pugliaresi. No. I think, as President Obama said, it is
a gimmick.
[Laughter.]
Mr. McKinley. Thank you. And according to Reuters,
countries around the world are increasingly using--reverting
back to use of coal, as you mentioned in your remarks, for
power generation because it is cost effective and avoids rising
gas prices, natural gas prices. So if other nations are doing
this, continuing to use coal--and let's call it clean coal--
would energy reliability in the United States benefit by our
using clean coal technology?
Mr. Pugliaresi. Absolutely. We should have a very robust
and diversified energy source for generating power and other
uses for energy throughout the national economy.
Mr. McKinley. Thank you.
And Mr. Lieberman, if you could just do--if you could just
pass the magic wand that did one thing to lower gas prices at
the pump, what would that be?
Mr. Lieberman. I would try to travel back in time, and try
to get candidate Joe Biden to not say he wants to kill off the
domestic oil industry. I mean, talk about a chilling effect.
And we have seen that ever since.
One can complain that the oil industry, the refiners aren't
investing enough. But can you really blame them, when the
commander in chief is using that kind of extinction rhetoric,
or at least was until prices got too high?
Plus, as we know, the President has made good on those
promises, starting from day one.
One point I would also make is that, sure, Keystone XL
pipeline, drilling in ANWR these would take time to come
online. But a number of economists believe that expectations of
future supplies has a beneficial effect on current prices. And
then the alternative expectations of future supplies being
cracked down upon because of Federal policy has an adverse
effect on current prices.
So I think there is a lot we could have done that would
have lowered gas prices much more than the 18.4 cents per
gallon Federal tax.
Mr. McKinley. Thank you.
Back to you, Mr. Pugliaresi. What would you do if you could
just pass one thing? What would be the top priority to lower
gasoline prices?
Mr. Pugliaresi. Well, in the near term I would take the
renewable fuel standard down to ten percent. I could get $0.30
right there. I would ask the Administration to take emergency
procedures to give us a national RVP standard for gasoline. I
would probably also repeal the Jones Act, at least temporarily,
so crude oil and products can move at low cost to--from where
they are produced to where they are needed within the United
States.
These are all very difficult things to do. I fully
understand that.
Mr. McKinley. Thank you.
Mr. Chairman, I yield back the balance of my time.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes the gentlewoman from Washington State, Ms. Schrier,
for her questions.
Ms. Schrier. Thank you, Mr. Chairman. Mr.--and thank you to
our witnesses.
Mr. Frias, under the current statute, the Tribal Energy
Loan Guarantee Program permits the Department of Energy to
guarantee up to 90 percent of a private sector loan. And I
wanted to dive into that a little bit.
The first question is just has the private sector been
willing to finance tribal energy projects?
Mr. Frias. Thank you. You know, in Indian country we
experience difficulty accessing capital across the board. It
is--as I mentioned in my comments, you know, the joint NPR
about the Community Reinvestment Act addresses some of the
difficulties we have in bringing institutions--bringing capital
into Indian country. I believe one of the members talked about
how capital-intensive energy programs are. And so it is
difficult for us to get capital in Indian country. Increasing
it is a constant struggle.
And, you know, studies have shown that institutions are
reluctant to lend for economic development programs where they
don't have a pre-existing relationship. The tribes that will
have those pre-existing relationships are tribes that perhaps
have built gaming institutions or other forms of economic
development. But the reality is the tribes that are most in
need of economic development are those that don't have it now,
and perhaps are not well situated to be involved in the gaming
industry.
Ms. Schrier. And do you have any sense of what sorts of
energy projects tribes of--various tribes were looking to
finance? Just for some examples.
Mr. Frias. You know, again, as I said in my testimony, we
are agnostic about the technology at NAFOA, and I think you
will find tribes that are on all sides. You will find tribes
that are very interested in renewable energy. You will find
tribes that are very interested in doing extraction. And that
is one of the strengths, I think, of this program, is that it
is technology agnostic. It doesn't favor one over the other,
but allows tribes to have that authority in their own sovereign
hands, tribal leaders to be able to make the decision for what
works best for their community.
And so we hear interest in a broad array of different
projects. I think, but for the pandemic and the effect that it
had, you know, not just in Indian country, but in the country
as a whole, we would have seen further progress.
Ms. Schrier. And are these energy production, or can this
also be energy distribution projects? Because the ones you are
talking about sound like they are really highly capital-
intensive, if they are energy production.
Mr. Frias. You know, I believe it is in favor of energy
production.
Ms. Schrier. OK.
Mr. Frias. But I will have to go back and take another look
and make sure. If I can get back to you with a----
Ms. Schrier. That is OK.
Mr. Frias [continuing]. With a firm answer on that.
Ms. Schrier. Thank you. No, I am trying to work through,
you know, why this loan program is--has really failed Indian
country to date. And it sounds like that is the reason that
having this new system, where we don't have just a loan
guarantee, but direct loans from the Department of Energy will
make such a difference for Indian country.
And then can--I think that may be the end of my question. I
just--I mostly wanted to kind of get you to point out what the
failing was with the prior system, and how this could make
things better. And I think you have explained that this will
allow for money to flow to tribes more easily.
Is there anything else that you wanted to add to that?
Mr. Frias. Yes. If I could reemphasize, Congresswoman, you
know, funds weren't appropriated for this program until 2017.
So while on paper it appears that the program has been around
for a long time, it was around without funds. And so the first
solicitation didn't go out until 2018. And then 2020, the
pandemic hits, and we have this reallocation of funds in Indian
country.
We are all looking at different things. Indian country was
hit, I think, in some ways harder than other parts of America,
due to multi-generational families and--multi-generational
homes, I mean, and other factors. And so, but for the impact of
the pandemic, I think we would have seen further progress.
I think this change is really important, because it takes
out a really complicated extra step that we don't necessarily
need.
Ms. Schrier. Thank you, and I yield back.
Mr. McNerney. The gentlewoman yields back. The Chair now
recognizes the gentleman from Virginia, Mr. Griffith, for 5
minutes to ask questions.
Mr. Griffith. Thank you very much, Mr. Chairman.
Mr. Lieberman, Mr. Pugliaresi, thank you for your responses
to my colleague, Mr. McKinley, in regard to what we could
actually do to lower the price of gasoline for consumers.
And I would have to agree that a number of those would
work, particularly the expectations, as you said, Mr.
Lieberman. When you have the President of the United States,
first as a candidate and then on day one saying we are not
going to have any more drilling, we are not going to do the
Keystone XL pipeline, how can you then expect those folks who
normally would do the exploration, the drilling, the investment
in new equipment, new refineries?
As I understand it--and tell me if you have heard this, as
well--our refineries are actually operating at about 93 and 94
percent, which is about as good as you can get. Is that your
understanding, too, Mr. Lieberman?
Mr. Lieberman. Yes, it is. And one of the things refineries
are struggling with is CAFE greenhouse gas standards for
vehicles that will essentially require electric vehicles. So
there is regulations that would constrain the amount of
gasoline that can be used in the future effectively, and that
raises questions about whether investing now in more capacity
would be worth it.
Mr. Griffith. Yes. And somebody used the term
``delusional'` earlier, and I would concur with that, as well.
All right, that--let me switch gears, and let me go to
something different. Let's talk about the weatherization.
Now, Mr. Lieberman, I like weatherization a little bit
better than you do, based on your earlier comments. But I am
concerned about this repair or reconstruction of a home before
you get there. And I know that the bill has on page four a
limit average for average cost per unit basis. But in some
parts of the country--and that may include parts of my
district--if the home is in disrepair, you might hit that
average cost, based on prices in more expensive areas of the
country. The average cost might actually mean that you invest
more money in the home than the home is actually worth, even
after repairs.
Can you comment on that? Should we have something in there,
if we are going to do it--and I know you don't like the program
that much, but if we are going to do it, shouldn't we have
something in there that says that it should be a percentage of
what you expect the home would be worth after you have done all
this work on it?
Mr. Lieberman. Yes, I think that would be a good safeguard
to improve the bill.
I will say generally about the weatherization program--and
this is just anecdotal evidence--there is a fair amount of
waste that goes on. I think something less than 100 cents on
the dollar has been spent wisely. A lot has been spent on the
program. One would think that that much more wouldn't be need
needed to be spent if the previous amounts were allocated more
wisely.
I don't know the specifics of your particular question.
Mr. Griffith. Right.
Mr. Lieberman. But again, I think, with the tremendous
amount of funds that weatherization is already getting, I think
there ought to be increased oversight.
Mr. Griffith. Right. I agree with that.
H.R. 5292 on the agenda today is a common-sense bill. I
support that. It deals with making sure that, if somebody has
gotten a DoE loan in the past, that they--and they have
defaulted, they can't get another one.
Do you think we should also say that for not only--Mr.
Lieberman, not only for DoE loans, but for loans of any type
from the Federal Government, that if somebody has defaulted in
the past they shouldn't be eligible for a new DoE loan? Yes or
no?
Mr. Lieberman. Yes.
Mr. Griffith. OK. And then I want to move on to something
that I think is significant, and that is I think we probably
also ought to have civil penalties for Federal employees who
knowingly and willfully violate the law, because that is what I
believe happened in the Solyndra situation. Everybody heard
about the $527 million that was spent in Solyndra. That isn't
what got my goat. My goat was the 95 million that was given to
Solyndra subsequent to their default on December 1st of 2010.
And when the code specifically says--I am reading right now
from the code--``the obligation'`--that would be the DoE loan--
``shall be subject to the condition that the obligation is not
subordinate to other financing.'` And in that case, I believe
that some parties at DoE decided to subrogate the law, and
disregard it because the law clearly said after default there
weren't supposed to be any more moneys.
They then came up with this plan to subordinate 75 million,
which cost the government, or cost the people 95 million to
outsiders. They did so with a series of emails back and forth.
And one of the requirements on default was that you talk to the
Treasury and the Department of Justice. When this scheme came
forward and they mentioned it to Treasury, Treasury actually
sent an email back at the time that said, ``Hey, we don't think
you could do this. Maybe you should check with the Department
of Justice.'` But they never checked with the Department of
Justice. I suspect that is because they didn't want to find out
they weren't allowed to do it, and have somebody from Justice
saying that.
Don't you think a civil penalty added in there if somebody
willfully and knowingly violates the Federal law passed by
Congress, don't you think that would help improve the DoE
program, as well?
Mr. Lieberman. That would make for a better program than
without it.
Mr. Griffith. Thank you, Mr. Chairman. I yield back.
Thank you, Mr. Lieberman and others.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes the gentlewoman from California, Ms. Matsui, for 5
minutes to ask questions.
Ms. Matsui. Thank you very much, Mr. Chairman. I want to
thank the witnesses for appearing today.
The Weatherization Enhancement and Readiness Act would also
make crucial improvements to the Weatherization Assistance
Program, helping more families lower their energy costs, while
making their homes more energy efficient.
In addition to the benefits that consumers will see on
their bills, weatherization and energy efficiency play an
important part in our fight and our efforts to fight climate
change.
Mr. DeLaski, can you please elaborate on the climate
benefits of the Weatherization Enhancement and Readiness Act?
Mr. DeLaski?
Mr. DeLaski. Thank you for that question. Absolutely. You
know, saving energy in homes, whether it be through the
weatherization program or other programs such as the Appliance
Standards Program and others, are effective policies for
reducing energy use, and that helps to lower consumers' utility
bills. And where power is being generated by--from fossil
generation sources, that helps to reduce climate change
emissions.
Ms. Matsui. OK.
Mr. DeLaski. The----
Ms. Matsui. Can you please talk about how the
Weatherization Readiness Program proposed in the Weatherization
Enhancement and Readiness Act complements the Weatherization
Assistance Program? What gaps does this bill address?
Mr. DeLaski. Right. It addresses four important gaps.
One gap is that it raises the average cost per unit to
$12,000, so that you could actually do the projects that
otherwise would be outside the scope of that cap.
The second thing it does is that it allows the program
administrators, the weatherization--the local Weatherization
Assistance Programs to do basic repairs to homes that allow the
weatherization work to be done. Absent those basic repairs,
often the weatherization can't even be done.
Ms. Matsui. OK.
Mr. DeLaski. Those are two of the ways that it improves it.
Ms. Matsui. Sure. One of the bills before us today takes
important steps to modernize standards that govern water
heaters, which are one of the most--one of the largest energy
uses in our homes and businesses. By making simple updates, we
can encourage more efficient and responsive technology, saving
consumers money and reducing our energy consumption. But we
know other outdated or inefficient consumer technology
throughout our homes is not keeping pace.
Mr. DeLaski, can you talk about the relationship between
household appliances and consumer technology and our energy
consumption?
Moving forward, what options do we have to ensure our
standards are keeping up with technological advancements?
Mr. DeLaski. One of the most important ways to make sure
that our--is for us to update the appliance standards
administered by the Department of Energy. The Department has a
legal obligation to review standards periodically to keep pace
with technological change.
And it is--the typical new refrigerator sold today uses 25
percent as much as it did 20 years ago. It is huge
technological progress, and that progress is driven in large
measure by increasing standards.
Ms. Matsui. Sure.
Mr. DeLaski. That ensures all consumers, whether they buy
an entry-level unit or whether they are buying a deluxe unit,
get a level of performance that lowers their energy bill, and
lowers the emissions that result from using that appliance.
Ms. Matsui. OK, thank you.
I have long believed that the investments we make in
critical infrastructure not only supports our economy, but
enhances our national security. This is especially true for the
infrastructure within this committee's jurisdiction. Dr.
Mulvaney, can you discuss the relationship between local
electricity infrastructures and national defense?
And how can we balance the need for needed upgrades with a
cost burden on ratepayers?
[Pause.]
Ms. Matsui. Dr. Mulvaney?
Dr. Mulvaney. Would you mind repeating that one more time?
I am sorry.
Ms. Matsui. Oh. Can you discuss the relationship between
local electricity infrastructures and national defense?
And how can we balance the need for needed upgrades with
the cost burden on ratepayers?
Dr. Mulvaney. Yes. So a lot of our military infrastructures
and installations are, obviously, around--in rural communities,
and these are often--sometimes they could be co-ops, and not
even major parts of our major utilities in the State, and they
can often be burdened with very high bills.
And it sounds like, from the context for the bill, that
these infrastructure upgrades are needed for national security,
to make sure that, you know, these critical infrastructures are
up to speed, in terms of the most secure facilities, and that
they have the latest gear in there, and all that stuff. But
that is expensive. And when a co-op or a--even a utility has to
build those infrastructures, the ratepayers have to pay for
that.
Ms. Matsui. Right.
Dr. Mulvaney. So in terms of--so there is a couple of ways
to protect low-income customers. One is you have outside
investment help that, and that could be supported by the
government. But you could also have programs to protect low-
income ratepayers. Like, California has a law--has the
California----
Ms. Matsui. Thank you very much.
Dr. Mulvaney. --[inaudible] program that allows them to----
Ms. Matsui. Dr. Mulvaney, I have run out of time.
Ms. Snyder. Sorry.
Ms. Matsui. Thank you, I yield back.
Ms. Castor [presiding]. The gentlewoman yields back.
Next up, Mr. Johnson, you are recognized for 5 minutes.
Mr. Johnson. Well, thank you, Madam Chairwoman. Well, here
we are, right in the middle of this preventable, in my opinion,
intentional energy crisis.
Five-dollar-a-gallon gasoline in rural Appalachian Ohio for
my constituents means having to choose between food, medicine,
getting to your job, taking the kids to school, or driving to
take an elderly loved one for some hospital care. And what does
President Biden and his Administration have to say? Well, they
say just go out and buy an electric car, and join us in this--
and I quote--incredible transition to green energy.
I mean, our Treasury Secretary actually agrees. She
recently said--and I quote--``The critical thing is that we
become more dependent on the wind and the sun that are not
subject to geopolitical influences.'` How ridiculous. Excuse
me, Madam Secretary.
Mr. Pugliaresi, I can't believe we need to clarify this,
but can you please explain how critical minerals and metals for
solar panels and batteries and the rare earths to make
specialized magnets for wind power generation and electric
motors are very much subject to geopolitical influences, not to
mention subject to the whims of our geopolitical adversaries?
Mr. Pugliaresi. Well, until we develop domestic or more
secure supplies from reliable trading partners, we are going to
find that some of these--many of these critical materials and
minerals are sourced out of China, the Congo in Africa, and
very, very unreliable sources, which would be in a position to
not only generate a great deal of revenue from the sale of
these products to the United States, but also to withhold them
or to extract wealth from us by charging prices well above
market levels.
Mr. Johnson. So basically, we are going to be making
ourselves more dependent on some of the worst people in the
world.
Mr. Pugliaresi. I believe, without the proper measures, we
could end up taking a position of relative energy security to
one of energy insecurity.
Mr. Johnson. Well, let me pivot for a moment to this water
heater legislation regarding so-called demand response
technology, which I think is better described as the capability
to remotely control the American people technology.
I don't know about you all, but my constituents would be
extremely concerned if an outside entity--say the power
company, or the EPA, or the Department of Energy--at the push
of a button tells them, ``Sorry, you have got to take cold
showers today because the grid is overloaded.'`
Friends, the solution here is to make policies and
implement policies that make electricity generation more
affordable, more reliable, and more abundant, not look at ways
to micro manage household energy use.
So, Mr. Lieberman, you mentioned it briefly in your
testimony. Can you describe to us the concept of--I quote--
``forced demand response'`?
And can you explain why, without effective guardrails--I
mean, could you see this expanding beyond water heaters to
other home appliances, and perhaps even electric vehicles?
Mr. Lieberman. Well, yes. There are some very legitimate
concerns about privacy here.
What this program would do--essentially, it strikes me as
trying to make up for the intermittency of wind power by
allowing extra wind to be used to heat your water when it is
available, or extra solar. And that would require turning on
the water heater at that time. What strikes me is it is really
getting away from the consumer focus of the Energy Policy and
Conservation Act, which is supposed to save consumers money,
and do so in a way that doesn't compromise any product
performance features, reliability, choice.
The more I learn about this program, the more--maybe
cockamamie is too strong a word, but at least convoluted. I
just don't believe that it could ever happen in a way that
wouldn't be a lot of problems for consumers. And in any event,
if any homeowner wants to go along with this, more power to
them. But we need to prevent this from being mandated.
And, you know, in response to maybe the argument, well,
this doesn't mandate it, it gives DoE the option of mandating
it, well, you know, maybe I would be impressed with that if
this was my first week in Washington. But we know that
regulatory agencies always take every opportunity to expand
their power. And so this will mandate the demand response
capability.
Mr. Johnson. Yes. Well, I thank you for your comments.
Madam Chair, I yield back. It is mind boggling to me that
we are even talking about something like this.
Mr. McNerney [presiding]. The gentleman yields back?
Mr. Johnson. I yield back.
Mr. McNerney. Thanks for the gender promotion.
Mr. Johnson. Sorry, I thought my colleague from Florida was
still----
Mr. Upton. It is that new haircut.
Mr. Johnson. I didn't even look over there.
Mr. Upton. It was that new haircut. It was that new haircut
of his.
[Laughter.]
Mr. Johnson. That is all right.
Mr. McNerney. The Chair now recognize the gentlewoman from
Florida, Ms. Castor, for 5 minutes to ask questions.
Ms. Castor. Well, thank you, Mr. Chairman, and thank you to
our witnesses for being here.
This is a very timely hearing, because we know that our
neighbors are really grappling right now with the higher cost
of energy, driven by Putin's unprovoked war in Ukraine, the
squeeze put on by oil and gas companies because of America's
continued addiction to oil. So we have got to invest in our
energy infrastructure to lower costs for families, and at the
same time tackle the climate crisis and protect our communities
from the costly impacts of climate change that we can no longer
avoid.
So we are making progress. Many of the bills we are
discussing today will help advance clean energy and lower cost
to energy efficiency, from equitable access for weatherization
to expanding the use of distributed energy sources for demand
response for a more flexible, innovative grid to ensuring the
resilience of our military installations.
I want to thank Representative Peters, especially, for the
GRID Act that is focused on innovation at DoD. You know, think
about how our national security is reliant on consistent
energy, but to fulfill those critical defense and strategic
missions we have got to ensure that energy supply to those
bases is continuous and reliable. I have a base in Tampa,
MacDill Air Force Base, and we are very concerned about, over
time, the resilience of that base and energy supply.
But let's talk about a flexible grid with more renewable
energy, because more efficient electric space and water heaters
will save Americans money on their electric bills. We have the
technology to do this. I--some of these arguments are, like,
from 20 years ago, we can't do this in America. We can do this.
We have the innovative technologies to do it.
So, Mr. DeLaski, help us understand how water heaters with
demand response could help facilitate a more flexible electric
grid. What is demand response? You have heard it criticized
here today. And why are water heaters well suited for it?
Mr. DeLaski. Thank you for the question. Water heaters are
very well suited for providing demand response services
because, in essence, they act as a battery. All of us--or most
of us--have a water heater in our home that has got 40 or 50
gallons of water in it. We aren't using that water on a
continual basis. We can heat it up when power is cheap, and we
can reduce our bills tremendously if we have that capability in
our water heaters.
One thing I want to point out is that it is much cheaper to
add that capability at the point of manufacture than to
retrofit it once that water heater has been installed. For a
utility to send a truck out to someone's home to retrofit a
water heater is hundreds of dollars. Doing it in a factory so
that it comes equipped, so that customer has the choice--they
don't have to join a demand response program, but we want them
to have the choice.
This bill gives the consumer the choice, if acted on by the
Department, if the Department takes advantage of the authority,
it would give consumers the choice to be able to participate in
demand response programs, if offered by their utility.
Ms. Castor. Mr. Greene, what do you think?
Mr. Greene. Thank you, Congresswoman. To be very short and
efficient and candid here from a manufacturer's standpoint, we
have been involved in both pilots, as well as DR programs with
water heating equipment for the better part of a decade. And
while these programs are nascent, they are all voluntary.
What we are really asking for, as manufacturers, as relates
to technology innovation, is standards that we all can meet.
And just having the water heater have the capability, and
therefore giving a consumer that may want to enter into a DR
program the ability to do so, for us it is all about business
certainty and manufacturing to a national standard versus
bespoke standards that may be coming into the future.
Ms. Castor. So innovation, lower energy bills for
consumers, this makes enormous sense. And I am a little
confused to why our GOP colleagues are criticizing this today,
because still on their website today they are highlighting our
bipartisan work in 2015 to ensure energy saving, grid-enabled
water heaters continue to be manufactured and sold, a solution
to facilitate greater cooperation and save money. So we need to
move these bipartisan efforts forward, and focus on real
solutions to lowering consumers' energy bills. I know we can do
it.
And I will yield back my time, thanks.
Mr. McNerney. The gentlelady from Florida yields. The
gentleman from Indiana, Mr. Bucshon, is recognized for 5
minutes for questions.
Mr. Bucshon. Thank you, Mr. Chair. I am pleased we are
coming together today to discuss concrete actions we can take
to help bolster our energy infrastructure and deliver reliable,
affordable, and clean energy to our constituents. However, I
must emphasize my disappointment in the majority's
unwillingness to discuss some of the most pressing issues
facing my constituents and our constituents on the energy
front.
Last week gasoline prices climbed over $5 a gallon
nationwide. In my home State of Indiana, Hoosiers are paying,
on average, $5.11 per gallon for regular gasoline and over $6
per gallon for diesel.
My constituents are also facing the potential risk of
rolling blackouts this summer due to insufficient grid resource
capacity. And this isn't my opinion. This is according to MISO,
the Midcontinent Independent System Operator, and also some
utilities in the region.
Our constituents are hurting from the Biden
Administration's ideologically motivated energy agenda that
puts the goals of the radical environmental groups above the
needs of the American families. As has been said many times in
this committee by my colleagues and I, this is a dangerous
approach that will significantly hamper our ability to reliably
and affordably meet our energy needs moving forward.
Some countries around the world are already experiencing
dramatic reckonings resulting from such an approach that is
being proposed by the Administration, and are being forced to
take drastic action, literally, as we speak. For example,
Germany, the Netherlands, Italy, and Austria recently announced
intentions to bring back some coal-fired power plant generation
due to their inability to meet energy needs with intermittent
renewables without Russian gas. Who would have thunk that the
Russian gas would go away?
You have to have capacity yourself. This may put them back
at the starting gate when it comes to decreasing their carbon
emissions and their climate goals over time. In fact, some
politicians in Germany are now discussing openly, publicly the
possibility of overturning the country's 2017 ban on hydraulic
fracturing, or fracking, to increase the domestic supply of
gas. Wow, what an idea. We should think about that in some of
our states here, in America.
Why would America, with our own vast resources, follow down
the pathway we are witnessing in Europe? We are not trying to
reinvent the wheel here.
So Mr. Pugliaresi, when I questioned you before a joint
hearing of the Environmental and Energy Subcommittees last
fall, you said that we could affect prices if we ensure that
our domestic oil and gas industry remains efficient and produce
at capacity. So prices are continuing to rise. What are we
missing out on here?
Mr. Pugliaresi. I think part of the problem, of course, was
that the lockdowns, in my view, were excessive. And they
resulted in a lot of our supply chains being disrupted. So we
had a real problem coming out of the lockdowns.
But we also have a real problem on expectations, as Ben had
spoken about previously.
I would like to point out one thing. Recently, President
Biden visited Japan. And the two----
Mr. Bucshon. And I was just there, too, myself.
Mr. Pugliaresi. Yes. Prime Minister Kishida and the
President issued a lot of joint statements. But when it came
time to make a joint statement on the importance of LNG exports
and the importance of more investment in U.S. oil and gas, only
Prime Minister Kishida was on that statement. President Biden
refused to join him in calling for more investment in U.S. oil
and gas.
We need to kind of change the dialog. These investments in
oil and gas production and infrastructure, they are long-term.
They require regulatory certainty, and they require investment
certainty. And we don't have that right now.
Mr. Bucshon. Yes. I mean, on my recent trip to Japan with
some other members, bipartisan, the prime minister told us--and
his people told us the same thing--you know, when we were
talking energy policy, they want to be partners, and they are
completely dependent on imported energy, as you probably know.
And they want to be partners with us on LNG and other sources
of energy. They are desperate to work with us on these issues.
Mr. Pugliaresi. Absolutely.
Mr. Bucshon. So the rolling blackouts looming in Indiana
and elsewhere across the country are there. I mean, it is also
for you.
How can we increase grid resource capacity to minimize the
possibilities of power outages? How do we minimize that? I
mean----
Mr. Pugliaresi. We have not invested enough in the grid,
and we have not invested enough in systems that can back up and
provide reliability for intermittent power. And, you know,
there are a lot of ways to address this.
I have always--I--some time ago I spoke to Chairman
Chatterjee, when he was chairman of FERC. And I said, ``Why
don't we have everybody bid firm power? Let the solar folks,
the wind folks come to the table with 24-hour power, and at
least we would have some price discovery.'` We don't really
know what the cost of intermittent power is, because it is not
the same as baseload power. It is a different product.
Mr. Bucshon. Understood. I yield back. Thank you very much.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes the gentleman from Arizona, Mr. Schrader, for 5
minutes for questions.
Mr. Schrader. Well, Oregon is a good State, too.
Mr. DeLaski, my question pertains to Congresswoman
Dingell's bill to create a new demand response system for
residential water heaters. Do you envision that the provisions
regarding demand response capability for hot water heaters
could rely on the internet, as opposed to in person only?
Mr. DeLaski. So some programs that exist today in states
such as Oregon and Washington and others do rely on being able
to control, being able to--consumers can opt into programs
where they can gather information, for example, for a water
heater to respond to a price signal so that the water heater
knows that, when prices are low, it is a good time to charge
up. And then, when prices are high, it is a good time for that
element not to be activated. So, yes, that information would
travel over the internet, and the--to know what is happening
with prices in real time.
So yes, technology has advanced tremendously, and being
able to use the ability of real-time knowledge to make the
water heater decide when it is going to operate is a benefit
that could be achieved through a smart, well-designed program
created by a utility.
Mr. Schrader. That could be a win-win, and save money for
the consumer, as well as the utility and rates overall.
Do you expect such demand response technology to be open
standard or proprietary?
Mr. DeLaski. So there are three states now, or a number of
states that have set standards on manufacturing, and they are
generally requiring an open standard. And that would be part of
what would make sense, as the Department considers doing a
national standard.
One of the benefits that we see in having standards is that
they--open standards that would allow any number of market
participants to participate in that market to provide demand
response services, so that it is not proprietary, and not
controlled by anyone--so that we get competition in the market.
That is the objective of an open standard.
Mr. Schrader. Yes. Because otherwise, it could be extremely
costly to the utilities, the ratepayers, and kind of confusion
in the marketplace for the consumer that thinks they can hook
up and have that demand response that you alluded to earlier.
The Department of Energy is supposed to determine the
economic viability and technological feasibility of these
demand response technologies. Do you expect such technology to
be put in place here in the short term, next year or so?
Mr. DeLaski. Well, as I mentioned earlier, there are a
number of states that have requirements today, including up and
down the West Coast, and then a number of states have authority
for that
[inaudible] for standards to be required, as well. So that
is already starting to shift the markets and creating a range
of requirements on manufacturers that are coming in the
[inaudible] at different times, different
[inaudible].
The technology is there today. I think the question is, do
we try to normalize this and have a national approach? Or do we
let it go State by state?
Mr. Schrader. Very good, very good. Yes. No, it seems like
the sooner we move to some uniformity in that area, the better
off we will all be.
With that I yield back, Mr. Chair.
Mr. McNerney. Well, the gentleman from Oregon yields back.
The Chair now recognizes the gentleman from Michigan, Mr.
Walberg, for 5 minutes.
Mr. Walberg. Thank you, Mr. Chairman, and thanks to the
panel for being here. While I am glad we are discussing some of
the bills today, I know our time could be better served by
addressing the energy crisis happening across the country.
Today it has been reported to me the average price of
gasoline in Michigan is $5.13 a gallon. In Washtenaw County, in
my district, where University of Michigan is, the situation is
even worse, with prices hitting nearly $5.23 a gallon, which is
$0.30 higher than the national average.
My constituents are struggling. And as members of the
Energy Committee in the House, we need to be doing more to
address this issue because it is, as some of my colleagues have
said already, is impacting people's lives, literally, with
choices that they shouldn't have to make that are really life-
changing choices.
There are some good bills before us today, as I said, but
the scope of the challenge calls for much more. It is
unfortunate that the Republican legislation that would help
alleviate high prices at the pump, like the American Energy
Independence from Russia Act, the Strategic Production Response
Act, and My PIPES Act are not up for discussion.
That being the case, Mr. Pugliaresi, in your testimony you
outline that there is a fundamental misunderstanding of the
impact of government policies on energy markets. Can you talk
about that misunderstanding, and how it has led to higher
energy prices?
And how can we transition back to a more realistic approach
to energy policy?
Mr. Pugliaresi. Right. I think one misunderstanding is the
scope and the scale of the energy transition. It is much, much
harder than most of our analysts and our--much of which the
government believes. This is a worldwide problem. Even if the
U.S. were to go to net zero, and all our OECDs were to go--all
our member countries in the OECD were to go to net zero, in the
absence of a transformation through Asia Pacific and the rest
of the world, the reduction in greenhouse gas emissions in 2050
would probably be about 20 percent less.
So the real issue here is that economic growth and
prosperity, human development is going to take a massive
commitment of continued production of fossil fuels.
And the United States is blessed with extensive resources
of oil and gas. But we have made a lot of mistakes. We have not
provided the infrastructure, the regulatory programs to allow
the infrastructure to build these resources out and to make
energy more affordable for the American people.
Mr. Walberg. Yes, yes. And hearing comments that Americans
are addicted to oil and fossil fuels--we are addicted to
success. We are addicted to a good standard of living. We are
addicted to future opportunities. And I don't think most of us
mind doing away with fossil fuels if we have something better.
What we want to have is our continued lifestyle in the United
States, which benefits the world.
Turning now to the legislation before us, last Congress I
was a cosponsor of an earlier version of H.R. 7962, which aims
to fix an Obama-era regulation and modify the definition of
water heater under the energy conservation standards. This has
been a long process, and I commend the stakeholders for
continuing to work together to come to an agreement. I am also
a cosponsor of the current iteration. However, there are still
some questions that remain which may impact my continued
cosponsorship.
Mr. Greene, the current version of the legislation has some
new language involving demand response, as we have talked
about, for residential hot water heaters. Why was this
provision necessary, and how does your company and the broader
industry feel about its inclusion?
Mr. Greene. Thank you, Mr. Walberg. The industry does
support the language as a threshold matter, No. 1.
No. 2, the language was inserted, based upon stakeholder
input from the prior iteration of the bill, and working with
one particular stakeholder, the National Rural Electric
Cooperative Association, and deriving language that would help
maintain the ability of consumer choice for electric storage
water heaters.
The DR language, the demand response language, is more
about manufacturers coming together and having the Department
have one national standard on the capabilities that the water
heater would have to have. Not that there is mandatory
enrollment in DR programs, but just so we, as manufacturers,
have one standard to manufacture two, rather than bespoke
standards around the country.
Mr. Walberg. OK. Well, thank you. My time is expired, and I
have other questions that I will submit for the record.
[The information appears at the conclusion of the hearing.]
Mr. Walberg. But thank you, and I yield back.
Mr. McNerney. The gentleman yields back. The Chair now
recognizes the gentleman from Alabama, Mr. Palmer, for 5
minutes to ask questions.
Mr. Palmer. Thank you, Mr. Chairman. I have got so much
that I want to run by, I need 30 minutes. But I will do the
best I can.
I just want to point out some things. And for the record, I
am tired of the Biden Administration trying to put blame on
others for the energy price increases. I want to say for the
record that price increases are not the result of the pandemic.
They are not the result of Putin. They are not the result of
profits. They are the result of policies. And until the
Administration adopts policies that will change the situation,
we are going to continue to see energy prices go up. And they
are going to have a devastating impact on low-income households
and households on fixed incomes.
We see it played out day after day. We have seen it in
Europe, with their mad dash to convert to renewables. We have
seen it manifest itself in some ways that a lot of people don't
think about.
There is numerous reports out about excess winter deaths,
excess winter deaths as a result of low-income individuals,
people on fixed incomes not being able to afford the price of
heating their homes adequately. This is not freezing to death.
This is people with cardiovascular respiratory illnesses, and
we are talking about 20,000 to 30,000 now being reported in
England and Scotland and Wales and places like that, and all
around Europe.
So there are consequences for these actions. It is not just
economic consequences. It is across the board. And I am really,
frankly, tired of listening to this Administration try to blame
the pandemic or Putin or energy company profits for a problem
that they have themselves created.
And Mr. Pugliaresi, I have really appreciated the graphs
that you put up. I would like to see those graphs, but you laid
out a visual for where we are, in terms of our energy policy.
The other thing that I want to point out is--and I think
both you and Mr. Lieberman have commented on this--is the
importance of the natural gas reserves that we hold. We will
never run out of natural gas. I mean, just a few years ago they
were predicting that we were going to run out of everything.
But we will never run out of natural gas. We will never run out
of oil.
And the thing that I want to point out in this, again, this
push toward renewables, if you build a natural gas facility to
generate electric power, it will have a generating life cycle
of about 60 to 65 years. You build a next gen nuclear facility,
which can use spent fuel rods that retain 90 percent of their
energy, and that facility will operate for 100 years. I mean,
you can only imagine the technological advances that will occur
in that 60 to 100-year period. But you build--if you rely on
solar or wind power, those facilities have a life cycle of 25
to 30 years. And on the wind power, the turbines start losing
generating capacity after ten years.
And I want to add one other thing. To get the same power
generation from a--that you can get from one next gen nuclear
that can be sited on 640 acres, it would take 70,000 acres for
a wind power facility.
So people need to understand what is going on here. And we
can come in here and we can ask questions. You start talking
about the materials that we are going to need, and a lot of
times we start talking about rare earth elements, but we are
talking about iron, we are talking about copper, and others
that are not rare earths. And you have got the Biden
Administration wanting to utilize the Defense Production Act to
increase the mining and production of these metals. But at the
same time, the Administration is using regulations to block it.
I mean, this is what we have got in this Administration,
and the policies that we are getting from the Democrats who
have the majorities in both Houses of Congress, policies that
are going to drive our economy into the ditch, policies that
are going to result in more excess winter deaths, policies that
are going to increase the number of Americans living in poverty
because inflation is off the rails and will continue to go up,
and no policies, no sensible policies, no sane policies that
will get us going in the right direction.
Now, I know I am supposed to come in here and ask you some
questions. I will send you some in writing.
[The information appears at the conclusion of the hearing.]
Mr. Palmer. But I just think that we need to have clarity
in this discussion, and I am going to repeat it for the third
time: this is not the pandemic, it is not Putin, it is not
profits; it is the Biden Administration policies.
With that, Mr. Chairman, I yield back.
Mr. McNerney. The gentleman from Alabama yields back. The
Chair now recognizes the gentleman from Arizona, Mr.
O'Halleran, for his 5 minutes.
Mr. O'Halleran. Thank you, Mr. Chairman, and Ranking
Member, for holding his meeting today.
In the Fiscal Year 2022 omnibus Congress authorized the DoE
to provide direct loans through tribal energy loan guarantee
programs. My bipartisan bill, the Tribal Energy Investment Act,
would extend current law, ensuring tribes have access to
capital to invest in energy products--projects vital to our
communities which create good-paying jobs, and renewable energy
to the grid, and encourage resiliency.
Mr. Frias, can you describe what barriers tribes and tribal
organizations face when financing energy projects?
How does the Tribal Energy Loan Program play a role in
lowering those barriers?
Mr. Frias. Thank you, Mr. O'Halleran, for your question.
You know, tribal communities face difficulty getting access
to capital across the board in all forms of economic
development. By removing--and these--let me step back for a
second.
You know, these projects are complex, and there is a number
of components to it. By removing the need for finding a
financial institution to fund this project, and allowing for
direct loans, you simplify the process and make it easier for
tribes to invest in energy development and create, as you have
mentioned, jobs: high-paying, quality, long-term jobs in Indian
country.
Overall, there is difficulty getting financial institutions
to work in Indian country. The difficulty was in access--
accessing capital in Indian country, something that we work on
quite a bit at NAFOA, and it is why we have made so many
comments on the original NPR for the Community Reinvestment
Act, and why we are looking at the joint NPR, the Community
Reinvestment Act, because getting capital into Indian country
is harder than I believe it should be.
Mr. O'Halleran. Thank you, Mr. Frias. In your testimony you
note that the energy development can transform communities. We
have certainly seen that go both ways.
In Northern Arizona, in 2019, the closure of the Navajo
Generating Station cost hundreds of Arizonans, mostly members
of the Navajo and Hopi tribe, to lose their jobs. But other
energy projects like hydrogen, hydropower, solar, wind, natural
gas present opportunity--present opportunities for significant
economic development.
I look forward to working with my colleagues to ensure this
fix is made permanent, and tribes have access to the resources
they need to thrive in the 21st century energy economy, and
also that we take into consideration, as these plants close,
the families and the jobs that are going to go with them, to
make sure these areas in rural America stay as part of the
permanent structure of our landscape.
In my remaining time I would like to focus on what America
can do to secure our critical minerals supply chain. I was
disappointed to read yesterday that mining companies taking a
page from the playbook of big oil are prioritizing stock buy
backs over investment in projects essential to securing
America's clean energy supply chain. We need a diversified,
critical minerals supply chain, but some seem to present a
false choice, pitting our transition to renewable energy
against American commitments to clean water, protecting our
lands, and respecting tribal sovereignty.
We don't need to compromise American values to build a
strong, critical minerals supply chain. We need to understand
the makeup of that supply chain in the world, and become
dominant in those areas that are--where we are now weak. We
need to identify clearly how we are going to strengthen those
supply chains and, if possible, bring a lot of that back to
America, where it belongs.
I am committed to working across the aisle to find common-
sense solutions to ensure we aren't trading with--which
authoritarian regimes plague us into an energy crisis, and
instead invest in a future where America is truly energy
independent
[sic].
Article after article after article has clearly
identified--and studies--that we are not in the right place
when it comes to the resources that we need to both address the
challenges our society is facing, and to address the needs of a
cleaner climate and less carbon future.
And with that, Mr. Chairman, I yield.
Mr. McNerney. The gentleman from Arizona yields. The
gentlewoman from Arizona is now recognized for 5 minutes to ask
questions.
Mrs. Lesko. Thank you, Mr. Chair. It is Arizona time, I
think.
I want to make a statement first before I ask a couple of
questions. I really think, on H.R. 7962, we need to remove the
demand response system program. I understand that you want a
national standard, but from a consumer point of view, I can
tell you that my constituents are going to go epileptic if they
think the utility companies are going to shut off their water
heater in the middle of a shower. And so I think that that is a
problematic part of it.
I have a question for Mr. Pugliaresi. In Arizona we have a
lot of mining. And so we have--we produce about 65 percent of
America's entire copper production.
There is also another mine in Superior, Arizona owned by
Rio Tinto, where they have invested $2.3 billion. And under the
Trump Administration, it was given the green light. But two
months into the Biden Administration it was--pulled the plug.
And it could produce about 25 percent of all the copper that is
needed or consumed in the United States.
We also have a--large lithium deposits in Arizona.
So my question is, how do you think H.R. 1599, which is
Representative Upton's bill, would help produce and encourage
mining in the United States, which, of course, is needed if we
are going to move to, you know, send--wind and solar and EVs?
Mr. Pugliaresi. So I think the bill would permit DoE to
identify the importance of these materials. It is not going to
fix the Interior Department, right? I presume these mines are
on public lands, and particularly in Arizona, and they are--
unfortunately, we are going to eventually have to reform NEPA.
I am not sure why the Administration pulled the plug on
those mines, or whether they were acting on a court case. But
we are going to have to find a way to develop resources in this
country that is--meets environmental standards, but can go
through a regular approval process, rather than endless delays
and fighting over a very uncertain set of standards. So in that
sense, it is a much more serious reform problem we need to
undertake.
Mrs. Lesko. And I agree with you. We need to promote not
only mining, U.S. mining production, but U.S. oil and gas
production to solve some of our problems and be less reliant on
China, quite frankly.
My next question is for Mr. Lieberman. H.R. 7947, the
Weatherization Enhancement and Readiness Act of 2022, creates a
new weatherization readiness program to provide grants to State
and tribal organizations for low-income residents. I have been
a supporter of the Low-Income Home Energy Assistance Program,
LIHEAP, which provides Federal funded assistance in managing
costs associated with home energy bills.
My question is, do you think this bill, this new program
established by this bill, would be duplicative of LIHEAP?
Mr. Lieberman. It could be. LIHEAP helps pay the energy
bills after they have been incurred. Weatherization, if it
works right, prevents the energy from being used in the first
place.
Again, I think the problem with the weatherization program,
how much bang for the buck are we getting, how many cents on
the dollar are being spent wisely, I think that we are doling
out more money after more money after more money without taking
a look at what past money has succeeded at and failed at.
And in terms of the larger issues, I think if a low-income
household had a choice between a completely unweatherized home
and the energy bills of the recent past, or a heavily
weatherized home but today's energy prices, I think most would
go with the unweatherized home. It would probably be cheaper
for them. So we really need to get those energy costs down
through more production. That is job one.
Mrs. Lesko. Great. Well, I thank all of you for being here,
and those online and testifying. And let's work together and
help America.
And with that, I yield back.
Mr. McNerney. The gentlelady yields back. I understand that
there are members that wish to come back after recess for
questions.
So at this point we are going to be calling recess until
immediately after votes.
[Recess.]
Mr. McNerney. I call the subcommittee back to order.
The gentlewoman from Delaware, Ms. Blunt Rochester, is now
recognized for 5 minutes for questions.
Ms. Blunt Rochester. Thank you, Mr. Chairman, for calling
this hearing, and thank you to all of the witnesses for your
testimony today.
Even though summer officially began yesterday, we are
already entering the third week of excessive heat and humidity
across the continental United States. These record high
temperatures and extreme weather events will continue to put
pressure on the country's energy sector, which is why it is
more important than ever to work together on legislation that
makes our energy infrastructure more efficient, more resilient,
and more affordable.
Electricity is a necessity to our everyday life, from the
heating and cooling of our homes and buildings to the use of
important medical technologies. The public health and safety of
our constituents requires reliable access to electricity. The
demand for electricity only continues to grow. We need to
invest and upgrade our energy infrastructure in ways that will
help optimize energy and help our country combat the ongoing
impacts of climate change. And it is critical that we work
together on this legislation, so that we can help expand and
modernize our Nation's energy infrastructure, making it
cleaner, safer, and more dependable, and more affordable for
all Americans.
Dr. Mulvaney, the renewable energy transition is a key
component of addressing climate change by lowering harmful
emissions and providing more Americans with clean energy. Many
of these low-carbon technologies, however, still rely on
critical minerals that need to be mined from the Earth. And
like many renewable technologies, the solar panel supply chain
is quite complex. Environmental technology standards are
becoming more common, such as the ``ultra-low carbon'` standard
that you are advising through the Green Electronics Council.
What would ultra-low carbon technology mean, not only for
emissions, but also for environmental justice communities,
where residents are already overburdened by mineral processing
and recycling facilities?
Dr. Mulvaney. Thank you for that wonderful question. There
are a few ways.
First of all, I think, to your second point, recycling
processes--you know, here I am talking about advocating for
recycling technologies. They are often located in low-income
communities, and have their own environmental justice
consequences. So recycling is a partial solution to this, but
we have to be cognizant of these particular--you know,
particularly heavy metal issues. I am thinking of Southern
California and the Exide facility that left a really bad
legacy, and the communities there who are still dealing with
that cleanup. So we have to be very, very careful about how we
site new recycling facilities, and where we put these, and
ensure that the communities and stakeholders are there.
And I will just add one other potential source I think that
is missing from the conversation so far is mining--industrial
residues. So mining waste. A lot of these critical metals are
actually onsite at existing mines already in tailings piles. I
am thinking of coal ash as a potential source for rare earth
elements. I mean, that stuff would be pretty easy to permit,
and you could start processing that right away.
And another example here, Rio Tinto, you know, a major
mining company, just expanded their copper mining processing
facility to also recover tellurium. Now, tellurium is about
1,000 times more rare than rare earth elements, and it is a
critical ingredient to the semiconductor technology that the
major--largest manufacturer of solar panels in the United
States, First Solar, is using. And they did that by not adding
new greenfield mines, but by strategically investing in certain
pieces of equipment on their own sites.
So I hope I answered all of your questions.
Ms. Blunt Rochester. You did--very, very comprehensive.
I guess my next question to you is that many of my
colleagues have already noted that H.R. 8053, the GRID Act,
would address national security threats. Can you talk about how
energy efficiency upgrades to critical defense facilities help
to combat national security threats?
Dr. Mulvaney. Well, I think that there are a lot of
probably inefficient uses, historically, of energy on military
facilities.
So one, I think there is--just upgrading that equipment is
going to benefit, generally, the national security, even just
kind of, you know, new wires, new transformers. Things like
that, I think, are really key there.
But also the power of procurement, I think, a little bit,
too. I think, you know, when you think about using the
Department of Defense or government--Federal investments to
kind of spur new industries, I think that that could also be a
side effect of these investments.
Ms. Blunt Rochester. Great, thank you. And my next question
is for Mr. Greene. And I only have 20 seconds, so I might have
to submit this to the record.
So I will give you some food for thought. We were talking
specifically earlier about H.R. 7962, of which I am a proud
cosponsor. And my question, which I will ask you for the
record, is how can legislation that focuses specifically on
residential energy efficiency, such as this bill, help
alleviate the growing cost to Americans, and help combat
climate change?
We will ask you on the record.
[The information appears at the conclusion of the hearing.]
Ms. Blunt Rochester. And thank you so much, Mr. Chairman,
and I yield back the time.
Mr. McNerney. The gentlelady yields back. The Chair now
recognizes the gentleman from Virginia, Mr. McEachin.
Mr. McEachin. Well, thank you, Mr. Chairman, and thank you
for pulling this meeting together, and to our witnesses. I
extend you greetings, and thank you for your testimony today.
Mr. DeLaski, your organization works to advance standards
that reduce emissions, and that contribute to climate change
and public health harms. Whether through weatherization or
through better appliance standards, what type of financial
savings can be realized by reducing energy use, particularly
for those of low to moderate income?
And what might--what impacts might these savings have, sir?
Mr. DeLaski. Thank you for the question. I will start with
the weatherization program.
The weatherization program is a proven successful program
for lowering energy bills for low-income households. The
typical savings, or the average savings for a participant--
participating household is $372. That is real money. That is
real money that matters for households that are making
decisions between, you know, how do I pay for my medicine, how
do I pay for my medicine versus utility bills versus food. This
is an incredibly important amount of savings that makes a real
difference.
I also want to point out that the program is very cost-
effective. The data that we have, and that I think is well
documented, is that for every dollar invested in the
weatherization program, $1.72 is generated in energy saving
benefits. Those are direct benefits.
And while those energy saving benefits are important, those
same investments are resulting in an additional $2.78 in non-
energy benefits that are perhaps even more important for
vulnerable communities. This is like lower asthma rates,
reduced respiratory illness, money to pay for medications. This
is, you know, better home comfort. So the benefits aren't just
energy savings. They are making the homes more safe for the
people who live there who are the lowest income households.
The Appliance Standards Program also delivers very large
savings for average households. The typical U.S. household is
spending $500 less this year on their utility bills than they
would be spending if we never had appliance standards. The
program works because it has a proven track record of success,
and it is delivering savings today. Those savings can be
increased by improving our standards over time to keep pace
with technological change in a cost-effective way.
Mr. McEachin. Thank you for that. Sir, you have spoken
today in support of H.R. 7962. And while this bill would do a
great deal, one particular piece I am interested in is around
the creation of a new demand response program for residential
water heaters. As we move to electrify as much as possible and
decarbonize our grid, demand response will be key.
Can you discuss the benefits of demand response as it
relates to water heaters, but also what this program, should it
be signed into law, could demonstrate about how consumer demand
response programs and technologies may work on a day-to-day
basis?
Mr. DeLaski. Yes. Thank you for that question.
We have a bit of a chicken-and-egg problem with demand
response. The chicken-and-egg problem is that, for this program
to work for the average consumer, most demand response programs
today are directed at large commercial and industrial
customers. They are the ones who get the benefit of being able
to shift their demand in response to price signals from the
utility companies, and to save money to reduce their energy
bills. It is--can be very hard for households to choose to
participate in these programs, because they aren't designed for
them and, in part, because they don't provide the scale.
So to achieve scale, to be able to get significant demand
response benefits, it is important that the technology be
deployed in a lot of homes. Consumers may or may not choose to
take advantage of it, but we need to ensure--what this bill
would do is create the possibility for the Department to set
requirements that would enable large numbers of water heaters
deployed in people's homes to give them the choice of
participating in demand response programs that can let them opt
in to lower utility rates.
Absent this kind of national requirement, it is a onesie/
twosie type of approach to achieving the scale that is needed
to be able to let the average consumer take advantage of demand
response and take advantage of the lower rates that are
available at certain times a day. And those power resources are
often the cleanest power resources that are being under-
utilized during parts of the day when we could be charging up
our water heaters.
Mr. McEachin. Thank you, sir.
Mr. Mulvaney, the text of H.R. 1599 is language that says--
or directs the Department of Energy to improve technology that
reuses and recycles critical energy resources. And you have in
your testimony noted that, at least with regards to lithium ion
batteries, we could do much better. Can you talk a little bit
about that?
And what would it look like for the Department of Energy to
take the direction in this legislation, and what would be the
benefits of so doing?
And you have all of 20 seconds. I apologize to----
Dr. Mulvaney. No, that is OK.
I think either--some Federal electronic waste law could
benefit collection. It spurred collection of this stuff in
Europe. Or, if the private sector adopted probably industry-
wide extended producer responsibility that made sure the
polluter paid for the end of life of their product.
Mr. McEachin. [Inaudible.]
Mr. McNerney. The gentleman yields. That concludes the
member questions.
I would like to thank our witnesses for participating in
today's hearings. I remind members that, pursuant to committee
rules, they have ten business days to submit additional
questions for the record to be answered by the witnesses who
have appeared. I ask the secretary to respond promptly to any
questions you may receive.
Before we adjourn, I receive unanimous consent to enter the
following questions--records into the testimony for the record.
[Pause.]
Mr. McNerney. OK. I am going to backtrack a little bit. We
have one more member for questions.
Mr. Joyce from Pennsylvania, you are recognized for 5
minutes.
Mr. Joyce. Thank you very much. First, I want to thank the
chairman and the Ranking Member Upton for allowing me to waive
on to this important subcommittee hearing. And thank you to the
witnesses for appearing with us here today.
As we have heard from many of my colleagues, America is in
the midst of an energy crisis, a crisis that was created by the
Biden Administration. Each and every day I hear from
constituents who are shocked by the skyrocketing gas and
electricity prices that they face each month. What America
needs right now is more affordable, reliable, and clean
baseload power.
Our nation has the ingenuity and the capability to lead the
world in this transition. By investing in innovative
technologies like carbon capture and hydrogen storage, we can
take advantage of the energy reserves beneath the feet of my
constituents, and keep our coal and our natural gas power
plants online.
On Sunday the Financial Times reported that Germany would
reopen several shuttered coal plants in order to avert the
potential natural gas shortage for the upcoming winter months.
Germany will fire up these coal plants, despite the fact that
the country has committed to phasing out coal by 2030.
Meanwhile, its three remaining active nuclear plants are
scheduled to go offline later this year, and the government has
no plans to extend them.
Here in the U.S. we are facing a similar sort of energy
crisis because we are not adequately taking advantage of the
resources that are under our feet, whether it is coal, natural
gas, or nuclear energy.
My first question is for Mr. Pugliaresi.
Mr. Pugliaresi, what steps can we take in order to learn
from Germany's errors, so that we can smartly transition to
clean, reliable baseload power, while at the same time
regaining our energy dominance?
Mr. Pugliaresi. I think at first we have to have a
realistic view about--that some of the alternative fuels we are
trying to promote now have limitations that are not fully
appreciated, particularly by both government policymakers and
the public.
And in the case of Germany, it is quite clear, when you
choose a very narrow set of fuels--in this case they had a high
reliance upon gas and wind--solar in Germany is pretty
limited--and it might seem stable, it might be--it might make a
lot of sense in the beginning, but it is like an investment
portfolio. The--you face a lot of risks when you make too
narrow a choice. So we need a widely diverse set of very
productive fuels to power our economy.
Mr. Joyce. Mr. Pugliaresi, I agree with you. I think that
you have elicited that we need reliable and resilient and
diversified power sources to maintain the power grid. And it is
more important than ever, as we see an evolving market forces.
As more intermittent resources--such as you mentioned, wind
and solar--get brought online, and more EVs are placed on the
road, the grid must accommodate demands in ways that it was
never designed to do so. How can we encourage the collaboration
with grid operators and utilities so as to better plan for the
future, and to preserve and promote the resiliency that we need
to see in the grid?
Mr. Pugliaresi. So I think we have under-invested in our
grid for a lot of reasons. It has been kind of an afterthought.
And the time has come now where utility systems and the
regional--you know, the transmission organizations, we are
going to have to put a lot more money into the grid, and a lot
more effort in upgrading it and modernizing it so that it can
undertake a wide range of fuel sources and generating power.
Mr. Joyce. My final question is for Mr. Lieberman.
Your testimony touches on reining in government spending
and strengthening consumer and taxpayer protections.
Unfortunately, this Administration seems focused on expanding
Federal agencies on the taxpayers' dime, while using regulation
to prevent unlocking the resources that would actually provide
the consumer with some necessary relief. Permitting is a big
part of this.
Could you speak to the energy infrastructure permitting
reforms that might allow the U.S. to unlock its energy
potential and bring down the prices, the prices that the
average American is facing right now?
Mr. Lieberman. I remember when President Biden mentioned
that there were 9,000 permits that weren't being acted upon,
oil and gas permits. And I looked into it, and others looked
into it. And of those 9,000, there is a number of other ways
that the government can actually stop the actual process of
drilling, even for permitted projects. There is just so much
going on. There is so many different ways to block production,
and they are all being aggressively used right now.
One thing I would mention is the National Environmental
Policy Act, or NEPA. The previous Administration made some
modest but useful reforms to that that I think have been--that
have been largely reversed by this Administration. That is
heading in the wrong direction. We need to have a much more
streamlined permitting process, or the same mines we are
talking about today we will be talking about them five or ten
years from now.
Mr. Joyce. The streamlining of the permitting process is
absolutely necessary.
Mr. Chairman, thank you. I appreciate you allowing me to
waive on to this important hearing.
And I thank all the witnesses for your participation.
Mr. McNerney. The gentleman yields.
At this time I request unanimous consent to enter the
following documents into the record: No. 1, a June 21st, 2020
letter from the Air Conditioning, Heating, and Refrigeration
Institute to the Committee on Energy and Commerce in support of
H.R. 7962; a June 22nd--June 21st, 2022 letter from the
National Community Action Foundation in support of H.R. 7947;
No. 3, a June 22d, 2022 letter from the U.S. Department of
Energy on the underlying legislation of today's hearing; No. 4,
a June 22d, 2022 letter from the National Mining Association in
support of H.R. 1599; No. 5, an October 14th, 2021 letter from
Representative Don Young on H.R. 5292; and last, No. 6, a June
21st, 2022 letter from the Joint Associations in support of
H.R. 7962.
Without objection, so ordered.
Mr. McNerney. At this time the subcommittee is adjourned.
[Whereupon, at 2:22 p.m., the subcommittee was adjourned.]
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