I want to welcome all the witnesses today, particularly Paul Cicio, Executive Director of the Industrial Energy Consumers of America, and David Montgomery of Charles River Associates. I look forward to your testimony.
Today’s hearing is about “green jobs” and “trade”, though I suspect we will hear some discussion of a “clean energy standard.” This concept has a long pedigree, and it is now considered, at least by some, as the compromise approach in the wake of cap-and-trade legislation’s demise. Some have asked me whether I support a clean energy standard. Of course, I readily respond by asking, among other things, “How do you define ‘clean’?” and “What do you mean by ‘standard’?”
Also, what is the motivation behind a national clean energy standard? Is it to reduce carbon emissions? If so, then, if you have a clean energy standard, what is the need for EPA’s greenhouse gas regulatory regime under the Clean Air Act? For that matter, what is the need for each and every component of EPA’s aggressive regulatory regime designed to shut down coal-fired power plants? It would seem to me that one couldn’t begin to have a rational discussion of a clean energy standard unless all of these regulations are “on the table,” so to speak.
When “standard” is mentioned, I think first of “mandate.” Is that what proponents of a clean energy standard mean? I, for one, question the need for a new federal energy mandate. If there is a mandate, what are the targets, what are the timetables? From what I’ve seen thus far, the targets and timetables proposed would bring about the same result as cap-and-trade: higher energy costs, fewer jobs, and lower productivity.
Now on to what is “clean.” Wind, solar, and geothermal are generally considered clean. But I also believe, for example, that ultra-supercritical coal plants are clean: these plants can reduce sulfur dioxide and nitrogen oxides considerably relative to a traditional coal plant; and if you’re concerned about CO2, they emit almost 40 percent less. But we can’t build these plants in good measure because activist groups are blocking their construction.
These are the same groups that call for clean energy, yet in the same breath ridicule clean coal as an oxy-moron; denounce hydropower because of dam construction; oppose emissions-free nuclear because of waste issues; worry that tidal energy harms marshes and mud flats; stop solar power because of concerns over endangered species; and block offshore wind farms because they are aesthetically distasteful. They also claim to support clean-burning natural gas, but want to stop domestic gas production.
In short, they have a rather cramped definition of “clean”. What I am thinking of includes clean coal—and here I’m not talking about coal with carbon capture and sequestration, or CCS, a technology whose commercialization depends on the construction of a massive infrastructure of storage sites and pipelines that is orders of magnitude larger than what supports oil and gas production. Activist groups, through lawsuits and other forms of obstruction, will never allow it to be built.
Along with new modern coal plants, I want nuclear, natural gas, as well as the array of existing technologies that make up the rest of our energy economy. This ensemble is reasonable and also far broader and more congenial to energy security, jobs, a growing economy, and the environment than what we will hear about today.
Today we will hear about “green jobs” defined as those largely in the business of supporting wind and solar power industries. These jobs are part of the so-called “clean energy economy” envisioned by the Obama Administration, in which government will supposedly transform the energy market by taxing the energy we use and then subsidizing technologies that can’t stand on their own. This bureaucratic-driven energy market will, so the logic goes, reinvigorate America’s global leadership in technological innovation.
But this is faulty logic, impaled on the sharp edge of experience. Consider Evergreen Solar, which at one time was all the rage in Massachusetts. Evergreen Solar was making the breakthrough technology that would supposedly transform the energy economy. State officials were so smitten that they forked over $60 million in taxpayer funds to build a plant in Devens, Massachusetts. But the plan, and the plant, failed. Michael El-Hillow, Evergreen Solar’s chief executive, explained the plant’s demise in stark terms: “While the United States and other Western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint.” [Emphasis added]
What he means is that Evergreen’s operating costs in the state were simply too high, even with the $60 million hand out. Evergreen Solar has shuttered the plant, has fired 800 workers, and is now moving the operation to China. As Massachusetts State Sen. Jamie Eldridge asked, “Should Massachusetts state government offer massive subsidies to large corporations as part of its economic development strategy to create jobs for residents?”
I think we know the answer. But this is exactly what the Obama Administration is proposing on a grander scale. Massive subsidies, more taxes, and more regulations—all imposed on the economy, on taxpayers, and all based on the fanciful notion that new jobs and industries will follow. Surely some will, but as David Montgomery, one of the nation’s foremost energy economists explained in his testimony, the Administration forgets or ignores the other side of the equation: those taxes, mandates, and subsidies will destroy jobs in other industries, raise energy prices, reduce wages, lower productivity, and displace investment. In short, we are worse off than when we started. Put another way, the Administration’s “green economy” entails a net loss for America.
Regulations now being imposed by this Administration are making businesses here—including solar and wind manufacturing businesses—less competitive, unable to compete with those operating in China and India. Just take EPA’s Boiler MACT rule, which affects thousands of industrial boilers. It puts nearly 800,000 jobs at risk in this country. According to the United Steel Workers Union, whose president is testifying today, “Tens of thousands of these jobs will be imperiled. In addition, many more tens of thousands of jobs in the supply chains and in the communities where these plants are located also will be at risk.”
This is no way to make energy and environmental policy, let alone run a country. Let’s put aside talk of “transformation”—the green economy as defined by the Administration is a failure. It’s time to get back to basics: supporting and encouraging domestic energy production, onshore and offshore; removing tax and regulatory barriers to innovative clean energy technologies; and allowing all forms of clean energy to power the American economy. By the same token, we need to balance our regulatory policies so they protect the environment without sacrificing the jobs and businesses that make our economy grow and expand.
These are the essentials and we know they work; without them, America will lose ground to other nations, and the promise of a brighter future will be in doubt. It’s time to turn the ship, and return course back to growth, production, innovation, and leadership.