Energy & Power QER Hearing

Executive Summary for the Energy and Commerce Committee Subcommittee on Energy
and Power, Hearing on the QER
June 2, 2015

Witnesses – Panel 1

Secretary Ernest Moniz, Department of Energy (DOE)

Witnesses – Panel 2

Dr. Rudolf Dolzer (General Director of the Chancellor’s Office, Germany)

Mr. Jason Grumet (President, Bipartisan Policy Center)

Mr. Scott F. Martin (Commissioner, Lancaster County, PA)

Mr. Gerald Kepes (Partner, PFC Energy)

Ms. Alison Cassady (Domestic Energy Policy Director, Center for American Progress)

Ms. Emily Hammond (Professor of Law, George Washington University School of Law)

Summary

On June 2, 2015, the Energy and Commerce Committee Subcommittee on Energy and Power held a hearing on the first installment of the three-part Quadrennial Energy Review (QER). The QER, a product of President Obama’s Climate Action Plan, focuses on energy infrastructure and identifies the threats, risks, and opportunities for U.S. energy and climate security. Its stated objective is to enable the federal government to translate the findings into
bipartisan action. In particular, the first installment of the QER examines how to modernize the current energy infrastructure and is focused on energy transmission, storage, and distribution (TS&D) via pipelines, wires, storage, waterways, and railroads.

The hearing consisted of two panels of witnesses. Secretary Moniz was the sole witness on the first panel. Generally, the Members present were supportive of the QER and its findings. During opening remarks, Chairman Whitfield (R-KY) stated that there is enough common ground to move forward with a bipartisan energy bill; however, the biggest issue that needs to be addressed is infrastructure. Secretary Moniz provided five points that Congress should consider when addressing pending legislation: energy security, the role of the states as “test beds” for federal legislation, shared transport, coordinated efforts for job training, and the critical federal role on emphasizing infrastructure investments.

Several reoccurring points arose during questioning. Some Members, including Representative Castor (D-FL) and Representative Pallone (D-NJ), expressed concerns regarding the impacts of climate change. They emphasized the need for the “inseparability of the environment and energy” when developing legislation. In particular, Congressman Pallone pointed to the devastating impact Hurricane Sandy had on areas within his district, and he questioned whether the DOE had plans to ensure proposed infrastructure could withstand such impact. Secretary Moniz responded by calling for the “hardening of infrastructures” and recommended a competitive grant program for individual states as an incentive to harden existing infrastructures.

Additionally, several Members pressed Secretary Moniz on the decline of the coal industry and the detrimental effects it has on coal miners, including job loss. For example, Representative McKinley (R-WV) questioned Secretary Moniz on what should be done about the 45% of West Virginian coal miners who have lost their jobs in the last three years due to this decline. While Secretary Moniz could not provide an answer that directly satisfied Representative McKinely, he did emphasize that programs are available to re-train coal miners for comparable jobs in other industries.

Many Members from the majority also questioned Secretary Moniz on the export of crude oil and why the embargo on domestic oil exports is not repealed. Representative Barton (R-TX) contented that allowing the export of domestic oil would be good for the global economy by preventing oil prices from rising. Several other Members echoed similar contentions. Secretary Moniz insisted that the exports would not stimulate an appreciable effect on the global price because the U.S. still imports so much oil. Further, he insisted that allowing exports would not lead to an increase in a domestic production of oil, and thus, is not necessary.

Finally, Representative Pompeo (R-KS) appeared to be the strongest opponent of the QER and the DOE’s efforts. In a vehement exchange between Representative Pompeo and the Secretary, Representative Pompeo revealed that he believes the research on carbon capture technologies was a waste of money and that the QER has limited use once a new president is elected. Secretary Moniz also did not directly respond to whether he thinks an international agreement on climate change requires the approval of Congress.

The second panel consisted of six witnesses and focused on the Energy Diplomacy Draft, a discussion draft released by the Subcommittee. The draft legislation seeks to advance energy diplomacy by providing coordination and planning and removing barriers to trade among U.S. allies and partners. In particular, the draft legislation would establish an interagency task force to identify ways to improve federal interagency coordination for permitting major energy projects, modernize the review process for cross-border energy infrastructure projects, and reform the DOE’s approval process for liquefied natural gas (LNG) exports to eliminate unnecessary delays.

While the second panel was cut short due to a call for votes, several key points were made by a few witnesses. Dr. Dolzer promoted a transatlantic energy agenda with more and better exchange between the U.S. and Europe. Mr. Grumet insisted upon increasing cooperation in North America, and in particular, increasing cooperation with Mexico. Mr. Martin endorsed the use of pipelines for the transport of LNG, and testified to the effectiveness of pipelines in his county in Pennsylvania. Mr. Kepes supported the cross-border transfer of energy, but only if competiveness – i.e., cost and efficiency – exists.

Conversely, Ms. Cassady and Ms. Hammond were not as enthusiastic about the legislation as drafted. Specifically, Ms. Cassady took issue with removing the presidential permit requirement. She contended the state-by-state nature of the agency approval process would prevent a critical examination of the whole project. She also insisted that the burden to prove the project is in the best interest of the public should fall upon those promoting the project. As written, the draft legislation places the burden on those opposing the project. Ms. Hammond contended that the draft legislation did not consider the administrative procedural ramifications.

For more information please contact James Voyles at jvoyles@hbwresources.com.