THE WHITE HOUSE WASHINGTON Neal F. Lane Assistant to the President for Science and Technology Dr. Neal F. Lane, Assistant to the President for Science and Technology, was swom in as Director of the White House Office of Science and Technology Policy in August 1998. Prior to moving to the Executive Office of the President, Dr. Lane was Director of the National Science Foundation (NSF) from October 1993 and served on the National Science Board. Before becoming NSF Director, Dr. Lane was Provost and Professor of Physics at Rice University in Houston, Texas, a position he held since 1986. His tenure at Rice began in 1966, when he joined the Department of Physics as an assistant professor. In 1972, he became Professor of Physics and Space Physics and Astronomy. He left Rice from mid-1984 to 1986 to serve as Chancellor of the University of Colorado at Colorado Springs. In addition, while on leave from Rice from 1979 to 1980, he worked for the National Science Foundation as the Director of the Division of Physics. Widely regarded as a distinguished scientist and educator, Dr. Lane has published numerous papers on atomic and molecular physics, and has delivered many lectures on science and public policy. Early in his career, he received an NSF Post-doctoral Fellowship and an Alfred P. Sloan Foundation Fellowship. He earned Phi Beta Kappa honors in 1960 and was inducted into Sigma Xi National Research Society in 1964, serving as its president in 1993. While a Professor at Rice, he was a two-time recipient of the University's George R. Brown Prize for Superior Teaching. Dr. Lane has also received honorary degrees from several institutions of higher education. Through his work with scientific and professional organizations and his participation on review and advisory committees for various Federal and state agencies, Dr. Lane has contributed to public service throughout his career. He is a fellow of the American Physical Society, the American Academy of Arts and Sciences, the American Association for Advancement of Science, and a member of the American Association of Physics Teachers. Born in Oklahoma City in 1938, Dr. Lane earned his B.S., M.S., and Ph.D. degrees in physics from the University of Oklahoma. He and his wife, Joni Sue, have two children and Chairman CALVERT. Thank you, Doctor. Mr. Reicher. TESTIMONY OF THE HONORABLE DAN W. REICHER, ASSISTANT SECRETARY FOR ENERGY EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF ENERGY Mr. REICHER. Chairman Calvert-Chairman Calvert, Mr. Costello, members of the Subcommittee, I appreciate the opportunity to testify on the Department of Energy's Climate Change Technology Initiative activities. The Climate Change Technology Initiative is the cornerstone of the Administration's efforts to stimulate the development and use of clean energy technologies and energy efficient technologies that will help reduce greenhouse gas emissions. The CCTI is designed to pursue cost-effective technologies that reduce greenhouse gas emissions while also meeting other energy, environmental, and economic challenges of the early 21st century. Over the next few years, we will witness the complete restructuring of U.S. electricity markets; we will confront the challenge of global climate change; we will see sweeping new federal and state clean air requirements; and we will encounter an increasingly volatile global energy market. In the face of these challenges, our goal is to develop a diverse portfolio of affordable energy sources and use them efficiently and wisely. The Energy Information Administration has prepared an analysis of the Climate Change Technology Initiative. While the report may appear to be an in-depth treatment of this subject, in fact, it is quite limited in both scope and analysis. As a result, its estimates of the potential of the CCTI to reduce greenhouse gas emissions are inappropriately low, and it is of limited usefulness in any objective evaluation of the initiative or the budgets which support it. I will briefly critique the analysis and describe the critical work supported by our CCTI budgets. In fairness to EIA, numerous caveats in the report underscore the limited scope of its work, but the implications of these shortcomings must be highlighted in this hearing. First, the analysis is quite incomplete. The study only attempts to quantify the potential benefits of the tax incentives component of the CCTI. The EIA does not quantify the benefits of the technology RD&D programs within the CCTI; however, these RD&D benefits have been estimated by the Department and independently peer-reviewed. The potential climate benefits of the DOE CCTI programs in 2010, alone, exceed 112 million metric tons of carbon per year. This conclusion is summarized in a report by Arthur D. Little that we are releasing today. [The information is contained in Appendix 1.] Mr. REICHER. This lack of EIA estimates is a severe shortcoming because the various components of the CCTI-tax incentives, technology, R&D, and deployment programs are designed to work together synergistically. Second, the analysis only considers one of the nine components of the President's climate strategy. Other components of the strategy such as credit for early action, federal procurement, and elec tricity restructuring are designed to interact with the tax incentives and R&D initiatives to further reduce emissions. The components of the President's strategy are designed to be a mutually reinforcing package, and, thus, analysis of the individual elements will likely yield an inaccurately low estimate. Third, the EIA analysis of the selected CCTI actions is largely limited to changing cost assumptions. This view of CCTI potential again results in inappropriately low estimates. The study presumes that purchasing behavior is largely driven by only one factor-cost. In fact, the entire purpose of the many elements of the CCTI is to address non-cost factors through removal of market barriers to new technologies, better information for consumers, increased industry experience with these technologies, and other actions. EIA does not generally consider these factors. Finally, the analysis acknowledges, but does not attempt to quantify, the potentially high substantial additional benefits of these programs-for example, reduced air emissions and lower oil imports. In addition, it does not even suggest that there could be substantial cost to our Nation-environmental, competitive, and energy security-of not pursuing such a robust technology strategy. The Fiscal Year 2000 DOE budget request for the CCTI calls for increases to support additional research, development, and deployment of a diverse portfolio of advanced energy efficiency and clean energy technologies. Mr. Chairman, this is not a new set of programs created only to address the threat of global warming, but rather an expansion of long-existing programs with solid track records that can most costeffectively reduce greenhouse gas emissions while producing other substantial benefits for our Nation. In fact, Mr. Chairman, if there had never been concern about greenhouse gas emissions or if Kyoto had never entered the environmental lexicon, we would still be advocating the budget we do today to cut our Nation's energy bill, to fight air pollution, to enhance national security, and to improve U.S. competitiveness. The Fiscal Year 2000 budget for DOE programs within the CCTI is $1.124 $1,124 million-up $222 million over Fiscal Year 1999. The budget is carefully designed to seize major opportunities and confront serious challenges by helping the U.S. steel industry compete against foreign imports by radically reducing energy costs; by helping the U.S. oil industry confront historically low prices by cutting energy use and costs in oil production and refining; by helping U.S. agriculture, which is in crisis in many parts of the Nation, to find new outlets for its crops and waste to produce power, fuels, and chemicals; by helping the U.S. forest products industry, which is facing crippling foreign competition, to turn its waste into clean energy to power its mills and sell the excess to the electricity grid; by helping the U.S. automobile industry and its workers lead the world in the production of high-efficiency, low-emission cars, trucks, mini vans, and sport utility vehicles; by helping the construction industry, which is facing "boom times" in parts of our Nation, to build millions of energy-efficient homes and businesses that cost no more up front and save big dollars to operate; by helping U.S. appliance and equipment companies build more efficient, consumer-friendly products to further reduce building energy use; by helping American taxpayers save billions of dollars in the operation of federal buildings; by helping the natural gas industry find new uses for this clean and abundant energy source in buildings, industry, and transportation; by helping the U.S. renewable energy industry drive down the cost and increase the market share of wind, biomass solar, and geothermal energy here and abroad; by helping the U.S. coal industry dramatically increase the efficiency and decrease the pollution from coal-fired electricity generation; by helping the U.S. nuclear industry develop technologies that can better ensure the viability and safety of our existing nuclear power plants; and, finally, by helping to develop critical technologies to capture and put out of harm's way carbon from fossil fuel use. In conclusion, Mr. Chairman, and members of the Subcommittee, I believe the Climate Change Technology Initiative is a wise investment for the Nation-one that will substantially help the United States meet the energy and environmental challenges of the next century. This carefully designed technology portfolio will reduce greenhouse gas emissions, cut oil imports, help to resolve local air pollution problems, and save businesses and consumers billions of dollars each year. For the sake of our Nation's future, it should be well funded and broadly supported. Thank you. [The statement and biography of Mr. Reicher follow:] Statement of Dan Reicher Assistant Secretary for Energy Efficiency and Renewable Energy Department of Energy House Committee on Science Subcommittee on Energy and Environment April 14, 1999 INTRODUCTION The Climate Change Technology Initiative (CCTI) is the cornerstone of the Administration's efforts to stimulate the development and use of clean energy technologies and energy efficient technologies that will help reduce greenhouse gas emissions. The FY 2000 Administration's budget request proposes $1,368 million in spending for CCTI, an increase of $347 million over the FY 1999 enacted level. Led by the Department of Energy (DOE) and the Environmental Protection Agency (EPA), the effort also includes the Department of Agriculture, the Department of Housing and Urban Development, and the National Institute of Standards and Technology. The FY 2000 budget request also includes $383 million as the first year increment of a proposed five year, $3,600 million package of tax incentives to stimulate the adoption of energy efficient technologies in buildings, industrial processes, vehicles, and power generation. These incentives are designed to accelerate the use of key technologies and help to transform markets in these areas. Technology research, development and deployment are key drivers of long-term economic development. In fact, the ability to innovate, develop and deploy new technologies in a wide range of fields has been a key reason for the remarkable success of the U.S. economy in the last fifty years and will likely continue to drive our economic development over the next fifty years. The CCTI is designed to pursue cost-effective technologies that reduce greenhouse gas emissions while also meeting other energy and environmental challenges of the early 21" century. Over the next few years, we will witness the complete restructuring of U.S. electricity markets; we will confront the challenge of global climate change; we anticipate sweeping new federal and state clean air requirements; and we will encounter an increasingly volatile global energy market. In the face of these challenges, our goal is to develop a diverse portfolio of affordable energy sources and use them efficiently and wisely. Sustained commitment to R&D in both private industry and the public sector has produced remarkable results in energy technologies. Without a substantial federal energy |