we try to tackle those issues that have high potential leverage; high public payoff; that don't meet the hurdle rate for industry's with their pressures on near-term futures. Then we try to leverage it with partnerships with those industries.

Mr. CALVERT. Reclaiming my time, again, as you know, I'm in favor of fundamental research and believe that that should be done. I think that industry has a more important role as far as its application in the marketplace and that the market, in fact will make a determination whether one particular energy source is more practical than the other. What I have said that we know what works today and we can meet meaningful goals quicker by being practical about this in our policy if in fact we're going to move to tax incentives and whether we have the money to do that to give incentives to allow a turnover in the diesel trucks that we have in the fleet today in this country which is a big number, but that would have a big impact on, particularly, on particulates and other types of pollution or moving toward compressed natural gas on medium trucks. That would have a real impact very quickly and would help meet the goals that we would all like to get to cleaner air. Thank you.

Chairman SENSENBRENNER. The gentleman's time has expired. The gentlewoman from Texas, Ms. Johnson.

COSTS AND BENEFITS OF PROPOSED PROGRAM

Mr. JOHNSON. Thank you, Mr. Chairman, and thank you for continuing this hearing. I have some rather basic questions. When we move to the new technologies and offer the tax incentives for persons who might be able to purchase these vehicles it seems to me that we will have a greater demand on natural gas and, perhaps, less demand on imported gas which helps us to be less dependent worldwide. How, then, are we going to calculate that cost and that savings and the protection of that environment with not doing anything and allowing El Niño to continue and we have these natural disasters continue?

Dr. GIBBONS. I'm not sure I've caught your question, but let me see if I can respond as I understand it. That is, how can we take the change of fuel that go into the energy system, take fullest advantage of it? Fuels change all the time. We used to depend on whale oil and then wood and then coal and petroleum and now these other areas. What is going to happen is with the efficiencies we can put into these energy using systems, like automobiles, we can cut by a major amount the total amount of energy required to deliver those goods and services. It's a bottom line savings to us not only in terms of our resources but the cost of operating these automobiles. When we develop fuel sales that will enable us to, in the coming century, to disseminate our energy production system more broadly, we'll have a more resilient electricity production system. We'll save money and we'll have a more diversified source for our electricity. These are all enormous public savings. Savings in dollars, savings in resiliency of the system, and also will improve our economy because it's new markets not only here, but overseas. So our calculus is based on what can we do with technology to enable these things to happen and push us in that direction?

Ms. JOHNSON. Okay, the second part of my question is if we the biggest outcry I've heard against any kind of change is cost to the industry and the cost to bring themselves into compliance. But if we do not come into compliance, it appears to me that what we continue to do is force ourselves into more uncertain conditions that take place within this environment, when we do nothing to change some of the dynamics in the environment.

And I still hear people, leaders of States and areas calling on the Federal Government and FEMA to assist when these natural disasters come, and as far as we can determine, they are being influenced by the environmental conditions we're in.

Dr. GIBBONS. Climate change will undoubtedly exacerbate some of the stresses that are already out there on the system. We now have a cost of about a billion dollars a week of natural disasters for the United States.

The insurance industry is extremely concerned about these rising costs. And climate change takes us in the direction of rapidly increasing those costs.

Ms. JOHNSON. Climate change without improvement, or just climate change, period?

Dr. GIBBONS. Climate change without action.

Ms. JOHNSON. Okay. Thank you. Did someone else want to comment, or is that complete?

Dr. MONIZ. Well, I was going to comment on your first question, if I might. Energy security clearly is a major goal and a major federal responsibility. I would just amplify what Jack said.

For example, on natural gas, as I said earlier, we are developing technologies, for example, to be able to bring natural gas from more remote locations and therefore, whether it's in gas or liquid form, and therefore add it to our domestic supply.

We estimate, for example, our membrane technology may provide a billion gallons of barrels of liquid just from North Slope gas alone.

Mr. GARDINER. The only thing that I was going to add was simply on your point about the costs of dealing with this issue, that what we're finding in the programs that we already have on climate change is that there are thousands of businesses and other institutions across the country that are signing up for the programs that we have today because it saves them money, not because it costs them money.

And so our view is that there are extremely cost-effective, in some cases, opportunities to reduce greenhouse gas emissions and save people money-very substantial opportunities over the course of the decade-and ones that can begin with existing technologies today and which will only get better as we develop even newer and better technologies over time.

Chairman SENSENBRENNER. The gentlewoman's time has expired.

Ms. JOHNSON. Thank you, Mr. Chairman.

Chairman SENSENBRENNER. The Chair would observe that I have seen no scientific evidence that greenhouse gases or global warming causes El Niño. Perhaps we can have a hearing on whether that happens later on.

U.S. CAPABILITY OF MEETING KYOTO PROTOCOL EMISSIONS

TARGET

Mrs. MORELLA. I want to thank you, Mr. Chairman, for this second hearing, and thank those panelists who are here testifying.

I guess what I really want to ask you is about the verity of this whole program. I note that $3.6 billion in tax credits, $2.7 billion in research. It appears from what I have read and heard that the United States is on track to produce 33 percent more greenhouse gases in 2010 than in 1990.

Therefore, if our President has promised that we would emit seven percent less by 1990, what's happening there? There's something wrong with that figuring. And will this achieve it?

I'd like to ask all of you, for whatever your expertise comments are on it. It just doesn't seem to figure out.

Dr. GIBBONS. Let me see if I can straighten the numbers. The numbers you quoted, I think are correct, except if you look at the bookkeeping of the things that happened in Kyoto, rather than a 7 percent decrease under the 1990, it's more like a 3 percent number because of the way the different gases are taken into account and some other matters-and the sinks of carbon.

But the fact is that our strong economic growth and our very low cost energy has caused us to increase our energy production and consumption quite rapidly, and we kind of hope that that economic growth will continue right straight on through the first part of the next decade.

This is very much unlike most of the other countries of the world, especially the industrial world. It's easy for Russia or some of the Western European countries to make these goals because their economies haven't been strong and robust. So it's good news and bad news for us.

At the same time, a change of that dimension of the order of 30 percent over a decade period, or a decade and a half, is a manageable one if we put our minds to it. The technology for doing most of that is already in hand, and the economics of it, in turn, I believe are very attractive if you look at it carefully.

And I went through this in the 1970's when we talked about energy efficiency changes. We've seen a 30 percent improvement in energy efficiency over that period of time, at the same time, energy prices were going down.

Mr. GARDINER. I would just add, Congresswoman, that in terms of the existing program, not the proposal that the President has made now, but the existing Climate Change Programs that we have, we have estimated that if we were to continue those through the period that you described, in essence the next decade, that they would eliminate about 20 percent or so of that gap that you identify.

Clearly, the President's initiatives will do more. The major factor that influences how much more they do-we'd like to have them do a lot-really depends on how businesses and others respond to the opportunities to invest in these technologies over the course of the next decade or so.

We, obviously, are hopeful that we can dramatically increase not only the rate of innovation, but the rate of investment in these

more efficient and less polluting technologies in the short term stretching out over that decade. So we'd like to see that number not be 20 percent, but a much larger number.

But we're not sure of that; we can't guarantee it. But our hope is that by launching initiatives like this, we can eliminate much more of that gap that you identify by the time we get toward that period, and in essence, reduce what we need to do with other mechanisms beyond these research and technology programs that we're proposing now.

Dr. MONIZ. If I may quote a Chinese proverb, if you don't change direction, you will end up where you were headed. And I think the program, in terms of technology development and incentives, as they have both said, is in fact, to at least provide the options for a changed direction.

How much can one change in the time period of, say, 15 years? Well, Jack quoted previous experience in terms of improved efficiency. I noted earlier that we are 50 percent more energy intensive than other industrialized countries. There is room.

So, in the near term, efficiency is where the biggest gains would come from technology, and then later on, renewables. And then perhaps later on, even things like sequestration for use of fossil fuels.

Mrs. MORELLA. There's no doubt, I think, the direction is important, and I think the tax credits, I don't know how much they are really going to help as you measure it, but I think it's a good direction. I think all of us should begin to look at that-what's happening, we save buildings. I applaud NIST.

Of course, Mr. Bachula, under your direction also, for the work that's being done and what you articulated in this. I just think that what we're doing is using new math.

Chairman SENSENBRENNER. The gentlewoman's time has expired.

Mrs. MORELLA. What we've got to do is establish a culture that deals with this. Thank you.

Chairman SENSENBRENNER. Thank you. And last, but certainly not least, the gentlewoman from Michigan, Ms. Stabenow.

Ms. STABENOW. Thank you, Mr. Chairman. I appreciate the hearing and your tenacity in keeping us on track, so I have the opportunity to be

Chairman SENSENBRENNER. The bell will ring in about three minutes, that's why.

CREATION OF MARKETS FOR ALTERNATIVE VEHICLES

Ms. STABENOw. Yes, I will be quick. Back to the issue on emissions also representing Michigan, and my colleague from Michigan also spoke to the issue, certainly of jobs in the auto industry, first a comment.

We have seen very directly where the partnerships between the Federal Government and the Big Three automakers has made a difference in the Partnership for Next Generation Vehicles, the Advance Technology Project, the Auto Body Consortium, which has been one of the best ATP programs in terms of creating more effi

I think the industry should be applauded for its aggressiveness at this point, and that there is a critical role. We are now making electric cars in my District in Lansing, in part as a result of the ATP partnership that created the ability for new materials, as it relates to the ability to build electric cars.

My question relates to creating markets for these vehicles. I've had the opportunity to drive a natural gas vehicle. Certainly, there's much promise as it relates to emissions, the electric car, and so on.

My concern is that, first of all, are the tax credits enough? And second, what about infrastructure? If we are going to make this consumer-friendly, then the service station has to be more than a petroleum service station. We have a natural gas vehicle that could be on the market today, very, very important as it relates to the environment and emissions. We don't have the infrastructure.

If we're going to create the markets, how do we do that, number one. What are we doing? And secondly, I know that there has been a Presidential directive that relates to government fleets and encouraging alternative fuel vehicles as part of our fleets.

It seems to me we have a very critical leadership role to play in creating the markets by ourselves in government, purchasing these vehicles, and giving the automakers the confidence that, in fact, if they build them, people will come. So I would like your comments.

Mr. BACHULA. The ultimate question of whether or not there will be fleets of these new advanced cars on the road is posed by all of the issues that you raised. One is the cost to manufacturer. Is it a competitive price?

The concept cars that Chrysler showed, for example, at the auto show a month ago, they claimed would get about 73 miles per gallon; not quite with all of the PNGV kinds of goals in it, but they said there's about a $15,000 premium on manufacturing it right now, compared to an equivalent Intrepid.

But they brought that down from a $60,000 premium just two years ago, so with advanced work, we hope that these cars are going to be comparable in price to cars that people are familiar with today. And that's one part of the problem.

Whether a tax incentive can help make that even more attractive and reduce risk, whether first purchases of the first 50,000 such cars by the Federal Government might help, all of that might contribute down the line as these cars become available.

Ms. STABENOW. If I might just interrupt, we know that in general in the marketplace, the more volume, the price goes down, whether it's computers, whether it's cars or so on.

Mr. BACHULA. That's exactly right, and as you go through the curve, basically you can bring price down through experience. The question of infrastructure is an important one. The Partnership for a New Generation of Vehicles is peer-reviewed by the National Academy of Engineering each year, and they have raised the issue of infrastructure and whether it will be there when these kinds of cars are ready.

And we are in the process in the Administration of talking to the fuels industry, talking to others who may have to adjust their mix