WASHINGTON, DC – House Majority Leader Steny H. Hoyer (MD) spoke to the U.S. Chamber of Commerce Institute for 21st Century Energy this morning on the steps Congress is currently taking to enact comprehensive energy reform. Below are his remarks as prepared for delivery:
“Thank you for inviting me to speak to you in the midst of a transformative time for America’s energy policy. This morning, I’d like to talk about what I think that transformation ought to look like. But before I do, I want to emphasize that it’s just as important that we hear what you think it ought to look like.
“The Chamber of Commerce and the business community have a valuable role to play in shaping the outcome of the energy debate. I know how much the Institute for 21st Century Energy has already contributed, and I’m glad that your former President, General Jones, is now in a position to bring these issues directly to President Obama. So my most important message to you is a simple one: we need you to stay engaged. Major energy legislation is coming, and regulation combating global warming is coming, as well. If the Chamber, and all of its members, want to influence these changes, now is the time to claim a seat at the table.
“I said that this is a transformative time for energy policy. That’s not because the problems are new—in fact, they date back decades, decades during which we ignored the carbon content of our energy sources. We have put our environment at risk and deepened our dependence on foreign fuel sources. What makes this moment transformative is a window of political opportunity. We have seen the dangers of global warming, and the dangers of dependence on foreign sources of energy, acknowledged by both the private sector and the public sector, and by leaders on both sides of the political aisle.
“Toward the end of his second term, President Bush recognized the need for action on climate change. ‘We acknowledge there is a problem,’ he said, ‘[and] we commit ourselves do doing something about it. We share a common responsibility: to reduce greenhouse gas emissions while keeping our economies growing.’
“Business leaders have echoed that call. The U.S. Climate Action Partnership, a business coalition dedicated to fighting climate change, has argued strongly that ‘the way we produce and use energy must fundamentally change, both nationally and globally’—and that this coming change represents an excellent opportunity for economic growth.
“This shared recognition of a problem does not mean that we all agree on solutions. But it does mean that significant action on energy is more likely this year than at any time in recent memory. So I’d like to discuss some of the most promising energy policies we hope to enact in the months to come. In my opinion, the best energy strategy is one that embraces balance: from renewables to coal with carbon capture and sequestration; from nuclear power to domestic drilling to investments in energy efficiency. Some of our most significant investments in a balanced energy strategy came in the Recovery Act and the budget. The Recovery Act included $39 billion in funding and $20 billion in tax incentives for projects including renewable energy generation, efficiency enhancement, a modernized electric grid, and clean energy jobs. And the budget also increased funding for energy programs by 10%, with a focus on cutting-edge research and development. That R&D represents America’s chance to become the world’s leader in the most important emerging economic sector—energy technology. In the years to come, I hope that America will be selling clean technology to China and India—and not the other way around.
“Of course, the centerpiece of our energy policy is the legislation that Chairmen Waxman and Markey intend to report out of committee by Memorial Day. The energy bill, with its cap-and-trade provisions, would be America’s first serious effort to account for the costs of carbon emissions, which endanger all of us through the prospect of global warming. It is an accounting that is long overdue. In June 2008, the economic research firm McKinsey Global Institute said that the ‘carbon revolution’ must be achieved in one-third of the time that economic transformation took in the Industrial Revolution if we are to maintain current growth levels while keeping CO2 levels low enough to prevent significant risks to the climate.
“Many in Congress have been focused on the question of the costs, specifically the cost of a carbon constraint on consumers and businesses. For those here concerned about the costs, the Energy and Commerce Committee has already made significant changes: a lower mid-term target for CO2 emissions reduction of 17 percent from 2005 levels by 2020, a commitment to allocate the majority of emissions allowances, and a renewable electricity standard of 15% by 2020, which allows up to 5% of the standard to be met with energy efficiency, with flexibility for governors to lower the standard further.
“But two other costs are equally important: first, the cost of inaction; second, the cost to U.S. business of not fully capturing the growing global interest in technologies that improve energy efficiency and more effectively generate renewable and conventional energy. The Congressional Budget Office has estimated that warming of at least 7 degrees by 2100 will cost us 3 percent of America’s real projected GDP. The longer we wait to act on emissions, the more painful—and expensive—the consequences will be. Cap-and-trade legislation will also send a strong price signal to the private sector, spurring innovation in renewable energy technology and the creation of clean energy jobs.
“But that is not all that government can do to promote alternative energy. One idea offered by the Chamber is the creation of an independent Energy Bank, modeled on the Overseas Private Investment Corporation and the Export-Import Bank, which would fund promising energy projects across America. Committees on both sides of Congress are now considering an Energy Bank, and it is an idea worthy of discussion—but it should not be created at the expense of existing programs. After years of delay, the Obama Administration is speeding up action on the Title 17 loan guarantees. So even as we pursue an Energy Bank, it would be wrong to disrupt those who have been waiting patiently in line.
“Cap-and-trade and clean energy loans can be expected to pay valuable dividends. But I’d like to call your attention to one cost-effective way to combat global warming immediately: allowing companies to offset some of their emissions by becoming stewards of the world’s forests. As a conservationist, I found it shocking to learn that forests in countries like Brazil or Indonesia are being destroyed at a rate of one football field per second. And for all of the talk about burning fossil fuels, you might be surprised to learn that the destruction of the world’s forests is responsible for nearly 20% of global greenhouse gas emissions—more than all cars, trucks, buses, and planes put together.
“We have a chance to use energy legislation not simply to curb emissions here at home, but to keep those trees standing. The Waxman-Markey draft includes both direct investments in stopping global deforestation and provisions that allow companies to claim credit for reducing emissions by funding the conservation of forests, in America and throughout the world. By getting developing countries to cap their forestry sectors, the legislation would provide an important way for the developing world to buy into a system of emissions reduction. And it would allow American businesses a less expensive and more flexible way to curb emissions.
“I understand that this proposal raises some serious concerns amongst those who want to make sure that our emissions reductions are real and verifiable. For one, we can’t let companies take these offsets indefinitely and avoid curbing their own emissions at all. And we also have to verify that the acres of forest are actually being protected—and that they are protected permanently. But I believe that new tools like satellite technology will help us verify that the offsets are working as promised.
“Finally, we cannot afford to forget the nuts-and-bolts issues that connect clean energy to our own daily lives, our own homes and businesses. Because the cheapest kilowatt of clean energy is the kilowatt we conserve, we must also focus our efforts on building an energy grid that delivers power more efficiently and cheaply.
“I’m especially excited about the prospect of a ‘smart grid,’ a system that would allow us to combine energy transmission with real-time communication. A smart grid would let utilities pinpoint the sources of outages and get the lights on faster—and it would help them select the best times to use clean power sources, meaning a smaller carbon footprint. A smart grid would also allow homes and businesses to track the price of power from second to second and even sell electricity back to the grid. For families, it would mean savings of hundreds of dollars a year on power bills; and for our country, it would mean a more efficient output from fewer power plants. That’s why it’s so encouraging that the Recovery Act set aside $4.5 billion to match utilities’ investments in grid upgrades. Given the savings in energy and money that we can expect, I hope you will join me in pushing for continued support of smart grid innovations.
“It’s also important that America develop the most advanced transmission lines in the world. I’ve just introduced legislation to direct loan guarantee funds toward the expansion of U.S. facilities that make superconducting electrical cable, and to expand the production and distribution of advanced wires.
“High-tech transmission will benefit us in a number of ways. For one, we will have a more reliable, secure grid: the latest cables can adjust rapidly and automatically to disruptions, whether weather-related or willful. Advanced cables also have clear environmental benefits: they go underground and carry the same amount of power as overhead wires, meaning a dramatically reduced footprint and less land use. Most importantly, just like investments in smart grid technology, advanced cables mean savings in energy and money.
“Those, in my view, are some of the most important elements of our energy agenda. I know how ambitious it sounds, and I know that it will have to find its place beside equally ambitious items, from healthcare reform to our work to end this recession. I understand, as well, that it can be hard to look this far ahead, when so many Americans are struggling just to pay the bills. But as President Obama reminded us, our biggest leaps sometimes come out of our darkest moments: ‘In the midst of civil war, we laid railroad tracks from one coast to another ….And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.’ Work on energy gives us a prime opportunity to add our own chapter to that story of achievement out of adversity. I hope you will join us in writing it.”