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So we are working pretty hard to see if some of these institutional barriers are removed, because this is really a resource, it should not be a cost.

Mr. HARRIS. Our mines are hot. That is the expression that you use for very gassy. It is interesting. Jim Walters is in my district, as a matter of fact, and it is the deepest coal mine in North America. But they go in ahead of their mining and take out as much of the methane as they can. It makes it safer for the miners, and, as you said, it is also putting it in the stream. That is good. You read that just like I gave it to you.

Just kidding. We appreciate the plug. Thank you, Mr. Chairman. Mr. SHARP. I thank the gentleman. Mr. Reinstein, in our legislation we have several provisions which most of us do not think are extraordinary in their requirements but are useful, and they really go to the question you were asked about trees in which Mr. Synar was just trying to determine how many trees are being planted, and while we don't want to send you out of here to count a bunch of trees all around the country, nonetheless, you know and we know that, for a variety of purposes, long before global warming the U.S. Government has been promoting tree planting, and I assume the Department of Agriculture or the Forest Service could tell us, if we ultimately ask them, roughly what is happening on tree planting around this country, both private and public.

But my real point here is flushing out of a very complex Government system the real picture of what we are really doing, and we have two different kinds of requirements in our global warming section. One is to get at what Mr. Cooper is talking about, trying to get as good assessments and many studies have already been done and many more are under way-as to what are the alternative ways we may approach this and the alternative costs.

But the other question we ask is: What are we, real world, doing? You are here advocating that the U.S. Government should take a bottomup approach. Some of us are sort of intellectually inclined to believe that is a smarter approach but only if-only if there is a bottom on which something is being built up. We are having great difficulty assessing whether we are dealing here with lots of rhetoric and lots of things and whether or not we are dealing withrather suspicious that in both the private bureaucracies in this country and the public bureaucracy, or at least at the top—that the goal is not one of identifying what we are doing—because the fear is that will show what we are not doing—but, rather, keeping it relatively obscure as to what is happening.

Now obscurity automatically comes from the enormous amount of actions and data that are under way, or it comes from deliberate policy. We are requesting of you a 1-year-I think it is a 1-yearout-analysis of what progress is made under all the National Academy of Sciences' recommendations, and what we are trying to get on the record and in a centralized fashion is, what actions are we taking? For example, very simply—are more trees being planted this year than last year? And if we are doing that, it serves your folks and your administration extremely well to be able to articulate that straight forward, Yes, we are planting so many more million trees.

Now it makes me and others suspicious, when that is not articulated, that there is a reason that is not being articulated, because that might mean that more money might have to be spent on tree planting, or it might mean that we might have to take some real world decisions and change our behavior.

So we are going to be pursuing that, and while some of our critics think we haven't done anything on global warming in our bill — and I admit it is not a lot in terms of the direct title of global warming; I think Mr. Cooper's provisions are going to be very important I am determined—I don't know whether collectively the Congress will be determined—that we are able to get a far better assessment as to what we are doing, and also these alternative costs.

I am not an advocate of the high cost strategies at the moment; I want to be more firm in the science and more firm in the option. In fact, we have this rather extraordinary, I think, reversal of scientific view about the role of CFC's and global warming. Indeed, in one way it supports the administration's notion that we need to know more. In the other way, it totally undermines the administration's negotiating position last year, “Look what we are doing on CFC's; we're solving the problem in global warming; therefore,

you ought to love us and be satisfied,” and, indeed, it turns out that that is not the philosophy this year.

So we plan to pursue this, and I want to compliment you folks on taking a step forward in trying to lay on the table more specifics.

I believe that in the long run, over the next two, three, or four years—maybe just next January when we may or may not have a new President—the issue of whether there are specifics on the table will determine whether or not the drive for totally shifting strategy to targets and timetables will be victorious. That argument may be totally irrelevant and will be made irrelevant if there is real world action. If there is not a clear presentation and clear indication of real actions and the cost effective things that can be done, then I think that many of us will have to drive to find political techniques to press our own Government, not to mention other governments.

Let me recognize the gentleman from Tennessee, Mr. Cooper.

Mr. COOPER. Thank you, Mr. Chairman. I just had one more question for Mr. Reinstein.

It is my understanding—and please correct me if I'm wrong on this—that the Europeans are basically opposing two different ways that we could participate in some sort of scheme to reduce global warming gases. One is the Norwegian approach of bilateral discussions, cooperation, trading. The other is more the multilateral approach, and I understand that most all of Europe now is fitting under one bubble for purposes of global warming gases, and I was just wondering if we are thinking kindly of either or both of those approaches. Do we want bilateral agreements with industrialized nations? Do we want to try to fit under the European bubble?

It is my understanding that with certain changes in Eastern Europe the European bubble concept will be of great benefit to the more industrialized nations there. For example, as heavily pollut

ing East German plants are shut down, West German industries will look very good by being able to appropriate those reductions. What comment would you

make on those ideas? Mr. REINSTEIN. Well, it is a very complicated situation. The 12 countries of the European Community have proposed a common bubble for those countries. Now when we turn outside the European Community to the east, we find significant reductions projected to occur, I think in some cases exceeding 40 percent reductions from late 1988–90 levels.

Mr. COOPER. In Eastern Europe?

Mr. REINSTEIN. In Eastern Europe, because of the economic situation there. Now that is not something to celebrate. Although it has a global climate benefit, the causes of it are of great concern, I think, to all of us.

There is some concern on the part of some countries that, if you combine Eastern Europe and Western Europe and you take the 40 percent reductions that are being caused not by Government actions but by the condition of the economies there, it basically lets everybody else off the hook in Western Europe. So there are a lot of arguments that are going on along those lines within the negotiating context.

The Norwegian proposal is still evolving. It basically stems from the fact that Norway has done estimates of the cost of achieving a target within its own borders and found that those costs are flatly unacceptable. They are much too high; they do not have the flexibility to achieve the target within their own borders at any acceptable cost. I could go into the details of why that is so, but it presents them with a problem that they either have to retreat from the target or find some way of achieving reductions outside their borders. They are seeking that kind of flexibility within the negotiating framework.

Mr. COOPER. Doesn't that pose great opportunities for us to have a known high cost area that is desperately searching for low cost offsets which we may well be able to provide in our own country?

Mr. REINSTEIN. Well, I'm not sure, given the relative sizes of our economy and the Norwegian economy, whether there is a match there, but I think the concept certainly is one that is helpful to pursue. I must say, I would like to applaud the spirit in which you made your proposal, on which we are prepared to work with you. I think it is the appropriate kind of approach, promoting these kind of voluntary actions, trying to find the least cost solutions.

In the negotiating context, it is unclear what will be agreed to. There are some other countries who are opposing this kind of flexibility, so it is not generally agreed that there will be flexibility in the agreement if there is to be a quantified approach to emissions. This is one of the reasons we have opposed the quantified approach, because it is not clear what the ground rules will be and whether they will be workable for everybody.

Mr. COOPER. I thank the chair.

Mr. SHARP. Thank you. We appreciate your time and attention to this matter, and we look forward to working with you as we proceed. Thank you very much.

We now welcome our second panel of witnesses. We have Mr. John Rowe, the president and chief executive officer of the New England Electric System; Dr. Daniel Lashof, the senior scientist with the Natural Resources Defense Council; and Mr. Michael E. Baroody, senior vice president for policy and communications with the National Association of Manufacturers; he is representing the Global Climate Coalition.

Gentlemen, we are happy to have you with us. I think you are familiar with our processes. We will make your written statement a part of our record and any documents you wish to submit, and we would be happy to hear your oral summary at this point.

Mr. Rowe, we would be happy to hear from you.



Mr. Rowe. Thank you, Mr. Chairman and members of the committee. I am pleased to be here and to describe for you some of the steps that the New England Electric System is taking to deal with the issues of global greenhouse gas emissions and other air contaminants.

We are particularly concerned about these issues because coal represents a significant factor in maintaining our costs among the lowest of utilities in New England, and because of the importance of coal to us, we have been compelled to take these issues very seriously indeed.

During 1990, we went through one of those periodic episodes in self-examination which one does currently under the guise of quality process, and in that process we decided that a commitment to continuous reduction in pollution and environmental impacts was as important to our long-run business as our commitment to constantly improving service and managing costs.

In that spirit, last year we launched our latest resource development plan, NEESPLAN 3. It sets three goals. To implement continuous reduction of environmental impacts, we propose to reduce the net weighted air pollution from our facilities by an estimated 45 percent. We propose to continue the Nation's leading energy conservation program and, following the spirit of bills presented by Congressman Cooper, Congressman Synar, and others, to begin purchasing emissions offsets as well as renewable energy sources.

For various reasons, we believe we can do this while keeping our rates among the lowest in the region and the lowest among major utilities in each of the three States we serve. We also intend to do this while diversifying our resource base both in terms of ownership and in terms of fuel source.

To do this, we intend to work with regional environmental groups, consumer groups, and industrial customers so that we have the broadest base of support possible for our efforts.

Our plans include a 53 percent reduction in sulfur dioxide emissions from our operations, about a 50 percent reduction in the emissions of nitrogen oxides, and a 20 percent reduction in greenhouse gas impacts which will include the effects of offset purchases and, if our plans go well, include greenhouse gases emitted by our energy suppliers as well as our own facilities.

Part of the base for this, as I said, will be renewable resources. We have experience in New England with a substantial base of hydroelectric power, which is renewable. We intend to conduct further experiments in applying advanced wind technology, upgraded biomass technology, and my own personal favorite, landfill methane technology, in securing additional energy in the most benign possible way.

Our plans for offset experiments include forest management and tree planting, the recycling of refrigerators with CFC's, which is now under way; methane recovery at coal mines, the use of coal ash in cement, where we hope to be able to combine a contribution to carbon dioxide control with solid waste management; and perhaps some study of marine algae fertilization.

Most of these efforts are beginning; some are well advanced, particularly the conversion of facilities to natural gas and our energy conservation programs. I can say today that we are moving along very well to replace an old oil-fired facility in Providence, RI, with a modern, state-of-the-art combined cycle gas facility which will have three times the capacity while producing less of most air pollutants.

In addition, our conservation programs are again proving remarkably successful this year. Last year, our $100 million, which, in proportion to size, is the largest in the country, was oversubscribed with a 100 percent subsidy. This year, we reduced the subsidy to 70 percent and were oversubscribed on the first day. The result, I expect, will be a bidding for future programs, and that means even more conservation programs for the same dollars.

These experiences have given us several thoughts on greenhouse gas control programs that may prove useful to this committee. First, it is essential to look at greenhouse gas control in conjunction with other economic and national policy objectives. We believe this can be done. In our case, it means looking at diversity of energy supply, the cost of the energy supply, and the environmental impacts together. In the case of other matters before this committee, the agenda may be broader. But we think only looking at objectives as a package enables one to get the job done.

Second, we strongly support the provisions of title 11 of H.R. 776, including the inventorying of opportunities to expand the efficiency of energy production, the study of potential use of electro-technologies where the whole electricity fuel cycle may be more environmentally efficient, the assessment of policies for reducing greenhouse gas emissions, and an accounting system for voluntary reductions.

We believe the landmark efforts of the Clean Air Act amendments to introduce market mechanisms wherever possible will be even more important in the greenhouse gas area. Again, we compliment Congressman Cooper and Congressman Synar for their work in studying the potential use of caps and offsets in this area.

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