The Honorable David McIntosh May 21, 1998 Fuel cell technology also holds tremendous promise as a clean, decentralized energy source for both buildings and transportation. The Spokane Intercollegiate Research and Technology Institute and the Washington Water Power Company have formed a partnership to develop this technology for widespread commercial application. Washington is also a potential leader in the technology for developing lighter, more efficient forms of transportation. As the home to Boeing (airplane manufacturing) and Paccar (truck manufacturing) and the largest aluminum-producing region in the nation, we already have much of the crucial industrial and technological infrastructure to develop light vehicles. Washington is also the most trade-oriented state in the nation. With uniquely favorable access to the world's fastest growing markets, we see a tremendous opportunity to market our energy efficiency and renewable energy technologies and skills throughout the Pacific Rim. On average over the next thirty years, annual energy sector investment by developing and transition countries is projected to top $125 billion, more than twice the expected investment from OECD countries. Decentralized renewable energy technologies may be especially attractive in these countries, many of which have little existing utility infrastructure or high-voltage transmission capacity. In Washington, we like to think we're well positioned to be a front-runner in the race to develop and market low-carbon and carbon-free energy technologies. But the truth is, virtually every state in the union has some advantages that will help it prosper during and after the transition. Every state has substantial opportunities to capture wasted energy for less than it costs to develop new energy sources. Virtually every state has abundant solar and other renewable resources. And most states have industries, knowledge, and entrepreneurial skills that will allow them to capitalize on the enormous economic activity implied by a global energy transition. Many nations and industries – including the fossil fuel industry itself - have begun to focus on these opportunities. To cite a few examples: · British Petroleum has made substantial new investments in solar electric technology and expects revenues from those investments to top $1 billion in ten years. · Shell is planning to invest $500 million in renewable energy technologies. Ford, Daimler-Benz, and Ballard Power Systems recently joined in a $715 million venture to produce fuel cell-powered automobiles. Toyota is marketing a hybrid gas and electric vehicle in Japan and General Motors intends to follow suit within three years. After Japan announced it would spend $130 billion to install solar electric capability on 10,000 homes, Sharp, Sanyo, Canon, and Mitsubishi announced major expansions in their solar manufacturing. Mitsubishi Electric is building a new factory that will produce $315 million worth of photovoltaic arrays per year by 2000. ⚫ The international insurance industry, racked by escalating claims from weather-related disasters, is beginning to focus its investment portfolio on technologies that will help stabilize the climate. The Honorable David McIntosh May 21, 1998 The race to supply the rapidly growing worldwide market for low-carbon and carbon-free energy sources has begun. Like so many technological revolutions in the past, this one will spur intense competition. Carbon-intensive technologies will, more or less gradually, be replaced by more efficient, cleaner technologies. The economy as a whole will benefit from increased innovation, enhanced efficiencies, and from reductions in the substantial costs of cleaning up after climate-related disasters. While the scientific community debates the timing, magnitude, and local impacts of climate change, the basic trend and the underlying chemistry are difficult to dispute. Fortunately, we do not need certainty on the details in order to act productively. The economic and other benefits associated with renewable energy and energy efficiency are sufficiently compelling that we would be inclined to accelerate their development even if climate change was not an issue. With the global challenge of stabilizing the climate now upon us, we have an even more powerful incentive to innovate, adapt, and prosper from the transition to a cleaner and more efficient energy system. Thank you very much for considering our views. Sincerely, Tim Douglas Tim Douglas Director cc: The Honorable John Tierney, Ranking Minority Member KDVActive Policy\KCG139Ltrs.doc THE KYOTO PROTOCOL: IS THE CLINTONADMINISTRATION SELLING GORE AMERICANS? PART IV OUT WEDNESDAY, JUNE 24, 1998 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, Washington, DC. The subcommittee met, pursuant to notice, at 10:16 a.m., in room 2154, Rayburn House Office Building, Hon. David McIntosh (chairman of the subcommittee) presiding. Present: Representatives Snowbarger, Tierney, and Kucinich. McIntosh, Sununu, LaTourette, Staff present: Mildred Webber, staff director; Keith Ausbrook and Larisa Dobriansky, senior counsels; Sean Cunningham, counsel; Barbara Kahlow, professional staff member; Andrew Wilder, clerk; Elizabeth Mundinger, minority counsel; and Alys Campaigne, minority professional staff member. Mr. MCINTOSH. The Subcommittee on National National Economic Growth, Natural Resources, and Regulatory Affairs will come to order. Today's hearing is another in a series of hearings the subcommittee is conducting on the Kyoto Protocol and its potential impact on American citizens, American business and labor, the U.S. economy, and the U.S. energy markets. At prior hearings, we heard from citizens, elected officials from State and local governments, and economic experts who believe that this treaty, which the Clinton-Gore administration negotiated in December 1997, could potentially have very serious impacts and consequences for the American public. The Kyoto Protocol commenced the United States to reducing greenhouse gas emissions 7 percent below the 1990 levels within the timeframe of 2008 to 2012. Now to meet this target, experts have projected that we will have to decrease our energy use by 40 percent or more in order to meet that target 2008 to 2012 timeframe. Moreover, while the treaty imposes onerous requirements on the United States and the other industrialized countries, it exempts outright the developing nations from any new commitments. This is regardless of their economic development or the quantity of greenhouse gases they emit. Huge emissions producers such as China, India, South Korea, Brazil, and Mexico are totally excluded from the Kyoto Protocol. (687) Now, at our hearing on May 19, 1998, Dr. Janet Yellen, President Clinton's Principal Economic Adviser, told my subcommittee that the cost to Americans to comply with the Kyoto Protocol would be "modest." According to the administration's calculations, it would only cost one-tenth of 1 percent of projected gross domestic product in the year 2010 with an emissions price in the range of $14 to $23 per ton of carbon. Now, at the household level, this administration estimate translates into $70 to $110 per year per American family. Of course, Dr. Yellen is assuming that the administration will be able to convince other countries, including the developing nations who are exempt from the treaty, to agree to an unrestricted global emissions trading system that they now firmly oppose. And the system will work as effectively and efficiently as the New York Stock Exchange. Now by contrast, at our April 23 hearing, WEFA Inc. Economist Dr. Mary Novak testified that the Kyoto Treaty would cause the United States significant increases in energy prices. Dr. Novak predicted that the protocol would result in a loss of gross domestic product of about 3.2 percent or $300 billion in the 2010 timeframe. In addition, the United States would lose 4.2 million jobs, gasoline prices would rise 65 cents per gallon, and industrial gas and electric prices would double. This translates into an increase of about $2,700 more per family each in energy and other products that are energy-intensive. So we see a range from the administration of about $100 to outside economists saying it's more like $2,700 of the cost of additional energy prices for American families. This hearing will examine what all of this will mean for the coal and electric utility industries, and the workers in those industries if the Clinton-Gore administration proceeds with signing this treaty. According to the Resources Data International, RDI, well over a third of the current U.S. coal-fire generation may need to be eliminated eliminated to meet the Kyoto target. The utility sector accounts for about 37 percent of total U.S. CO2 emissions and coalfired units account for 82 percent of electricity sector emissions. However, if coal-fired generation is drastically reduced, our Nation will not be able to meet its projected power demand in the year 2010. RDI estimates that there will be a 19 percent gap in available electric generation. Even if wind and solar generation, which are the administration's favorite sources for energy, alternative energy increased by almost 500 percent and natural gas increases by 170 percent from the 1997 levels, we still have that 19 percent gap. In addition, at this time, the only real substitute for coal is natural gas, but replacing more than half of our electricity output with natural gas raises significant questions about the price increases and supply. The Department of Energy's Information Administration recently estimated that in 2010 the cost of natural gas will be about 2.6 times the cost of coal in that same year. Moreover, the present gas pipeline network is not adequate to meet such increased demand. In short, a massive reduction in coalfired generation and conversion to natural gas would put the reliability of our Nation's electric supply at significant risk. Moreover, because our economic growth is tied to the availability of elec tricity, this would have a very adverse effect on the U.S. economy at large. As you will hear today, both industry and labor are in complete agreement that the Kyoto Protocol spells "all pain and no gain" for the coal industry and for our utility industry. Despite the enormous price the United States would have to pay in complying, the treaty would accomplish almost nothing environmentally because of the fact that the undeveloped nations are not included and the questions as to whether controlling human emission can have an affect on global warming altogether. Therefore, it would be nothing short of reckless for this administration to proceed with signing this treaty. Signing the agreement would not only violate Senate Resolution 98, it would make clear that President Clinton and Vice President Gore are putting a political agenda ahead of the welfare and interest of the American people, our children, and future generations. Finally, we have to make sure that the administration does not jump the gun on Congress and implement the Kyoto Protocol through the back door. Now while Under Secretary of State Eizenstat has repeatedly disavowed any intention of the administration to implement the treaty without it first being ratified, these protests of innocence frankly don't square with the administration's actions. Appropriations restrictions have now been proposed in both the House and the Senate to put the brakes on this backdoor implementation. We have to pass these measures and say to Vice President Gore and Carol Browner: We have a U.S. Constitution and we will not allow you to make an end-run around fundamental Democratic process to advance this radical agenda. I appreciate the witnesses coming today. Let me turn now to Mr. Tierney, ranking member, for any opening statement. Mr. TIERNEY. Thank you, Mr. Chairman. Mr. Chairman, these hearings on global warming are certainly within the purview of this subcommittee and we're, obviously, obliged to participate, although I'd respectfully suggest a different focus, as I'll discuss further on in these remarks. I was not pleased, however, and I want to note this on the side, to learn that you're asking Chairman Burton to subpoena globalwarming documents from the administration. At last week's hearing, we spent considerable time learning that your numerous and broad requests to more than 20 agencies, along with the numerous requests made by other committees, have gotten caught up and created a bottleneck in the administration's review process because so many requests have been made at the same time. Nevertheless, most of the agencies have given you interrogatory responses and documents while the rest of the information is making its way through the review process. The agencies' spirit of cooperation stands in stark contrast to the behavior exhibited by previous administrations. You'll recall that even when you were the Council on Competitiveness' Executive Director, the Council refused to provide Congress with basic information about its activities. I assume then that you have some appreciation for the effort that is involved in responding, yet you're now trying to use extreme tactics, like subpoena power, to get similar information. |