Chairman CALVERT. Well, I just was curious because I notice that there is additional sums of money here for various things: fuel cell award projects

Mr. REICHER. Well, let me say on that

Chairman CALVERT (continuing]. Receiving National Renewable Energy Laboratory funding. I am just curious that you are certain that there is no implication that this is a totally unbiased report when it is evaluating the benefits of DOE programs?

Mr. REICHER. I am quite confident about it because we have heard very positive things from a variety of people on the outside who have looked at it, including the Energy Information Administration. I would also have to say that most of the dollars that we supply to private industry, in a cost-shared fashion, are supplied on a competitive basis, and those prophecies, I think, ensure a second level of independence in who we select and how we do our work. So I don't, in fact, Mr. Chairman, have major concerns about the independence of this work.

Chairman CALVERT. My time has expired.

Mr. Costello.

Mr. COSTELLO. Thank you, Mr. Chairman.

ECONOMIC VIABILITY OF ADVANCED COAL PLANTS

Dr. Hakes, you indicate that advanced coal plants become economical after 2010, I believe. What factors determine the economic viability of these plants in this timeframe?

Dr. HAKES. Well, basically, for new electric plant construction, you have a competition between coal plants and natural gas plants. Generally, coal is a cheaper fuel than natural gas, but the capital cost to construct a natural gas plant is less, and the operating costs of a natural gas plant are less. So it is anticipated, I think, by most analysts and us, that through the periods that we forecast that, generally, the gas plants will be the plant of choice, simply for economic reasons.

There will still be a substantial amount of coal burned. In fact, in the baseline case, the use of coal goes up because we do have unutilized coal capacity at our existing plants. So there will be more coal burned in the baseline case, but it is more from the greater utilization of existing plants than the building of many new plants.

TAX INCENTIVES FOR ENERGY TECHNOLOGIES

Mr. COSTELLO. You talk a lot in your testimony about-your written testimony-and you mentioned today about tax incentives and effective ways to partner between Government and industry to develop new energy technologies. And you suggest that we, in the Congress, include incentives for building, transportation, more energy-efficient housing, and so on.

You may recall that back prior to the clean air debate and when the Congress passed the Clean Air Act, that some of us wanted to provide tax incentives to utilities in order to provide and build scrubbers to invest in other technologies as well so that we could use the abundance of coal that we have in this country and burn it cleanly and efficiently.

In your opinion, why has the Department of Energy not pursued tax incentives in order to accomplish these goals?

Dr. HAKES. Well, I want to make clear that EIA is an independent part of the Department of Energy that does not advocate specific policies or tax increases. We are simply available to the Committee or to the Administration to analyze the likely impacts of these.

I think that what was adopted in the Clean Air Act of 1990 was a system in which low-sulfur coal and scrubbers would sort of compete economically. And we do believe, that with the next round of sulfur reduction requirements, that scrubbers will become a more popular option, but I can't oppose or advocate any particular tax system.

There may be others who would be willing to do that.

Mr. COSTELLO. But it is safe to assume, I think, that if we provided tax incentives for utilities to install scrubbers and to use scrubbers on an annual basis, that that would provide an incentive for them to, in fact, install scrubbers and use the abundance of coal that we have.

Is that not

Dr. HAKES. Yes, assuming that the incentives were large enough to create the incentive.

Mr. REICHER. Mr. Costello, if I could, I just want to point out there is one important element of our tax incentive proposal that deals with coal-fired power plants and that is the co-firing incentive. This is an incentive to utilities that burn coal to mix that coal with our abundant stocks of biomass and, thereby, allow the generation of electricity from this mixed fuel and cut both traditional pollutants and global warming gases as a result of that use. And we do provide in the proposed incentive a tax credit for that activity.

Mr. COSTELLO. I have a few other questions but we have other members here.

Let me give, Doctor-our Administrator Gardiner, the opportunity to respond to a point that you wanted to make to Dr. Hakes.

EPA CRITICISM OF EIA

Mr. GARDINER. Thank you, Mr. Costello.

The point that I wanted to make was fairly simple, that I think our criticism is simply that ELA has looked very narrowly at the Administration's initiative on climate change and looked only at the tax portion.

And if you were to ask me this morning whether I ate a healthy breakfast this morning, and I only talked to you about the cereal I ate and its nutritional value, and I didn't tell you about the nutritional value of the milk that I put on the cereal, or the banana that I ate with it, and the orange juice that I also drank, you wouldn't be getting a complete picture.

And I just want to be clear for the Committee that I think, given EIA's analysis, that you are really only looking at a piece of the Administration's package. You are not going to have a complete picture either, and that is the simple point that I wanted to make. Mr. COSTELLO. Very good.

Mr. GARDINER. Thank you.

t

Mr. COSTELLO. Thank you, Mr. Chairman.
Chairman CALVERT. Mr. Ehlers.

Mr. EHLERS. Thank you, Mr. Chairman.

Very interesting discussion, but I want to raise a number of questions. I wonder, in all our discussion here, if we are not missing a major point. When we are talking just about the CO2 production, we are ignoring the fact that we are burning up an incredible amount of resources very quickly. And the implication that has for our Nation-particularly with the end of cheap oil in a decade or less-that has major economic implications for our country. And that may be a better reason for improving our energy efficiency than the rather indeterminant effect of CO2 upon our climate. And I would certainly encourage DOE, at the very least, to put more emphasis on that issue, especially with the popularity of SUV's, and they go in the wrong direction.

Even the power companies are going in the direction of burning more natural gas, and I wonder-I recognize it is a marvelous fuel, clean burning and so forth, but to tell the truth, in the long-term view, natural gas is really too good to burn. It is a stock for a petrochemical industry. It is irreplaceable. It may be a lot easier and less expensive for our Nation, overall, if you look at the long-term view to be putting more emphasis on coal and nuclear at this point and preserving even perhaps by an additional charge on natural gas-preserving natural gas for feedstock for the petroleum industry. And these are some of the questions I think should be addressed.

Something else that concerns me is the differences of opinion within the scientific community on the CO2 issue and the result of the increase of CO2. I get approached by a lot of scientists on these issues, and, although the preponderant view is that we are likely to have some global climate change-there is very little unanimity on global warming by the way. I never even talk about global warming. I think the evidence is so slim on that. With global climate change, there is more evidence. But even there, there is some very good scientists who say that the research is really wrong; we are going in the wrong direction; we are not taking the right view, and so forth.

FUNDING OF CLIMATE CHANGE SKEPTICS

One concern that has been expressed is that the difficulty of getting grants to do research, if you are expressing views that CO2 is not having the impact that is politically popular to discuss. And I would certainly appreciate some assurance from everyone here, particularly Dr. Lane, that there is no bias in the awarding of research grants if someone comes in with a proposal that-and they have a history of saying there is not much of a problem here.

I do have a specific scientific question, and I will address Dr. Lane, and he can respond to my previous comment as well, and maybe others will want to come in on that. One of the scientific questions is-which I have not been able to condone I just can't get a straight answer from the researchers in the field, and perhaps they don't know.

IMPACT OF INCREASING CO2 ON RADIATION ABSORPTIVITY

But my understanding is that the atmosphere is essentially opaque already with carbon dioxide. There is enough CO2 up there that it is opaque to re-radiation of most of the energy being emitted by the Earth, and that what we are doing when we increase CO2 is we are not getting a linear increase-in other words, as we increase CO2, we are not getting a linear increase in the amount of energy retained, but it is rather logarithmic because we are simply broadening the curve, and you are talking about increasing the wings of the absorption curve rather than increasing the impact of the top.

So, Dr. Lane, you can start off in responding to that scientific question, which I think is a very important one, and, also, my pre

vious comments.

Dr. LANE. Mr. Ehlers, I appreciated your questions very much. None of these scientific questions on our global environment are easy, I think.

One point I would make is that the models-and there are many models that are used to try to best understand the mechanisms that are at work in the environment and the extent to which global change is occurring. Those models do take into account the absorptivity of not just CO2, but the other greenhouse gases and their concentrations at various heights in the atmosphere. And as I know you know, it is not a simple system with a single layer of CO2 sitting up there. It is a distributed system, and there is absorption of radiation going on at various stages at various heights. And, ultimately, some of the infrared that is emitted by these molecules that have absorbed from lower elevations is radiated in all directions, and some of those directions are upward.

And, in fact, it is that mechanism that helps us understand why one impact of the greenhouse effect is that the lower atmosphere indeed warms; the upper atmosphere cools. It is the same physical mechanism that has to do with the distribution of radiation.

So the models do take these things into account, and there are some things on which the models agree. And I think this basic mechanism is one of them.

The second thing I would say is that among the scientific skeptics—it is, of course, valuable to have skepticism in science. That is what allows us to advance our understanding. There need to be people there who ask difficult questions, and, in fact, I think any good scientist is going to ask the other scientist, "How do you know? Are you sure of this?" Or, “Didn't you leave this out?" As you know, that is the way science advances, so that is healthy.

Some of the skepticism that is out there that is advertised as being science is really a bit misleading and I think confuses, in the public mind, what we know about-what we know with a high-level of confidence about the impact of greenhouse effect on the climate of the Earth.

With regard to

Mr. EHLERS. May I just

Dr. LANE. Yes, sir.

Mr. EHLERS [continuing]. Interject there? I agree there is some of that. I call that political "science," with "science" in quotation marks. [Laughter.]

And it is not the study of politics. [Laughter.]

It is "politicized science," perhaps. But I am talking about serious capable scientists who are having some honest disagreements about this. And I am particularly concerned about the reports that it is difficult to get funding.

Dr. LANE. And that, I think, is the most important-all your questions are important, but that is the one that I want to be absolutely sure that I respond to.

I was at the National Science Foundation 4.5 years and certainly enjoyed that. It was an extraordinary experience, and I had the opportunity to interact with a very large number of scientists in all fields of research. During that period, I had a number of researchers complain to me about the peer review process--that it was too conservative. It wasn't really willing to reach out and take the risks that we need to take in science if we are really going to push the frontier. I had anecdotal complaints from people who just had submitted 12 proposals or 20 proposals and didn't get funded, and they were unhappy. But there was no clear rationale for it. I never had anyone come to me and say that I believed my proposal in this field was rejected because of bias against my beliefs on what the science says.

It is not to say there aren't people who feel that way, but I simply wanted to indicate that I have heard from unhappy researchers about their proposals and about the system, and I have had researchers tell me they thought the reviewers were biased against them. I just have not had any in this particular area.

Mr. EHLERS. Yes.

Dr. LANE. And so I

Mr. EHLERS. I recognize the Science-the National Science Foundation as the least likely to have a problem with this. I am more concerned about the EPA, DOE, and so forth. And now in your new role, you have something to say about all of that, and perhaps NOAA might be in that camp.

Dr. LANE. And let me just make one quick comment and then ask my colleagues to respond.

I have worked with the Department of Energy for a very long time through their extramural programs, but also the intramural programs. I have a very high regard for the quality of the research that they support. And, in fact, my research over many, many period of time a long period of time was supported by the Basic Energy Sciences of the Department of Energy. And I could not tell the difference between the way in which the Department of Energy ran its peer review program and the way the NSF did.

With regard to EPA, I know EPA has been strengthening steadily their use of peer review to ensure objectivity in the selection of the research that they support.

Mr. EHLERS. Thank you. I realize the time is up for my-Mr. Chairman, I suspect I shouldn't turn to any of the others for responses to this.