Let me move right to my bottom line: when it comes to meeting our energy and environmental needs, we face an enormous wealth of opportunities. Yet, instead of fostering and tirelessly promoting these opportunities, leadership in Washington today seems bent on creating a climate of "crisis" and fear.
The hyperbole being thrown around bears little resemblance to reality. So, what is going on? Sadly, One can only surmise that events of the day are being seized upon opportunistically to promote narrow special interests, and sacrifice the broader public interest in the process.
A glaring example in the energy and environmental area is the effort of the Bush administration to use the California energy situation as an excuse finally to sacrifice the arctic national wildlife refuge to the short-term interests of a few oil companies. This effort is objectionable on many grounds. But, the reasoning of the Bush administration is particularly objectionable. Less than 1% of California's electricity comes from oil. But even if more of it came from oil, the refuge likely holds only a very limited amount of economically extractable oil, and we know that it will take 10-15 years to bring that even that oil on line. In short, sacrificing the refuge will do nothing to help California's near-term problem. Yet Americans nonetheless are being asked to sacrifice this priceless, irreplaceable resource.
And, with all due respect, I suspect that this hearing is part of a similar strategy-namely, to seize upon current energy issues to push through policies that roll back critical environment and public health protections. It is no secret that this has been a top goal of the leadership on Capitol Hill at least since Mr. Gingrich's '94 "Contract with America". Over the last 6 years, citizens groups, doctors, teachers, religious leaders, workers, and yes--a vast array of responsible business leaders--and others, joined committed leaders in the Congress and a determined Clinton/Gore White House to foil most of these special interest drives. But, with the change of administration, special interests are seeing opportunity anew and, I believe, are grasping at any and all developments to justify their self-interested campaigns.
Let's just take on the implicit premise of this hearing-did the federal Clean Air Act cause the energy problems being experienced in California?
Answer: no. And, you don't have to go to the Sierra Club for that answer. Just ask some of the major electricity generators operating there. In response to assertions by the White House and others that environmental regulations are holding back output, generators have repeatedly said: "absolutely false."
What are the main drivers? They are economic and they have to do with best guesses about markets. And, we need look no further than recent stock market performance to know that even the experts don't always guess right about how the markets will behave.
Power plants were not built in California in the early '90's because there was an excess of power. Then came-not new regulation, but deregulation in the mid '90's, and with it some market uncertainty that further dampened interest in plant construction. Indeed, the California policy of prohibiting long-term supply contracts is evidence of a widespread anticipation that there would continue to be excess capacity and decreasing prices.
But, the unanticipated then happened: stronger economic growth than had been anticipated; stronger growth in electronic-based commerce than had been anticipated; and the weather hit new extremes of hot and cold. The result-instead of excess supply, there was not enough supply.
And let's look nationally. Is the federal Clean Air Act-even including the strong new requirements put in place by the Clinton/Gore Administration-preventing increases in generation?
Again, absolutely not. In fact, experts say that some 190,000 Megawatts of new capacity is in the pipeline-roughly a 25% increase in the nation's generating capacity. And, some 22,000 megawatts of the new capacity projected by EIA to come on line by 2020 is coal fired. In fact, Wall Street will tell you that investments in energy generation are some of the hottest investments out there now, and that environmental issues are a pull for those new investments, not an obstacle to them.
Are environmental concerns completely irrelevant to the California story? No. But to the extent they play a role, they are largely local concerns related primarily to the siting of plants, pipelines and transmission lines. Now, since "local control" and "states rights" are professed as articles of faith by the White House and many on Capitol Hill, it would seem inconsistent at best for there to be a federal effort to interfere in these areas of local prerogative. I assume therefore that no such thing is intended in this hearing.
To me, this whole debate is a tremendous tragedy. Why? Because, quite simply, our country is better than this. Americans are smarter than this. And, with ingenuity and inventiveness, we have moved beyond the tired old rhetoric of "it's the environment vs. the economy. Its jobs or the environment." We know that we can and we must have both-or we will have neither.
This principle was proved repeatedly during the Clinton/Gore administration. While some of the most demanding environmental protections ever were put in place, the nation experienced unsurpassed economic performance as well.
Let's look at the energy area in particular. It has been charged that the Clinton/Gore administration neglected energy policy and/or that environmental policies were in conflict with energy goals. Absolutely not so. The record proves the opposite:
According to numbers compiled by the minerals management service, in '92, the last year of the last Bush administration, domestic oil and gas drilling activity was at the lowest level since World War II. By contrast, under Clinton/Gore, natural gas production on fed lands onshore increased 60%. Oil production offshore, particularly in the Gulf of Mexico was increased 65% over 1992 levels, and natural gas production in deep waters in this area increased 80% in just the last 2 years of the Clinton/Gore administration. Moreover, coal production on fed lands was substantially higher under Clinton/Gore than under either Bush or Reagan.
And, all of that was accomplished while more lands were protected and preserved than in any administration since that of Teddy Roosevelt.
The Clinton/Gore Administration also pushed for and secured new investments in drilling technologies that will enable the production of millions of additional barrels of oil and some additional 6 trillion cubic feet of natural gas domestically every year. And, these increases will be realized without increasing the environmental footprint of current oil and gas extraction activities.
But, while shoring up these conventional sources of energy, the Clinton/Gore administration also moved aggressively to achieve better balance in our sources of energy. Contrary to the statements of the Bush administration and the Congressional leadership, when nearly 80% of our electricity is derived from fossil fuels, you cannot achieve better balance (and therefore security) by just aiming further to increase supplies of fossil fuels. That just makes a dangerous situation worse. To reduce risk, you have to diversify your portfolio. And that is what we worked to do in the Clinton/Gore administration. And in doing so, we advanced policies that enhanced our energy security, were a boost to our economy and helped clean up the air. We did not pit these vital interests against each other as is being done today.
Wind: we invested in new turbines and now wind is the fastest growing source of energy in the world. It is a clean source of energy and it is now working to boost even depressed economies like those that have been experienced in rural America and in the farming sector.
Geothermal: investments have reduced the cost of this technology by one-third.
Photovoltaic: sales and shipments of this key technology have tripled.
Efficiency: investments in just 5 key technologies have already saved consumers some $15 billion; new appliance efficiency standards will save consumers $40 billion by 2010; and the intensity of federal energy use has decreased by 12%, saving taxpayers some 600million/year.
While impressive, our gains in these areas should be even larger. Why? Because while the Clinton/Gore administration achieved nearly a 40% increase in efficiency investments and more than a 50% increase in renewables investments, those increases only represented some 12 cents on the dollar of overall increases the Clinton/Gore administration requested of the Congress. If we are serious about achieving a better balance in energy, these investments must be increased substantially. And it is particularly troubling in this regard to learn that the White House apparently proposes to go in exactly the opposite direction. Estimates are that the Bush budget will slash efficiency and renewables by some 30-40%. This kind of policy simply cannot be squared with any sincere effort to improve balance and security in energy in this country.
Perhaps the most compelling example of bringing the environment and the economy together in the energy area is the multipollutant approach to cleaning up power plants. When former Vice President Gore first publicly announced his support for this kind of approach in April of 2000-after having worked on it since 1996--his statement was endorsed by everyone from the sierra club to some of the nation's largest coal fired power generators like American Electric Power, WEPCO, and others. Indeed, the consensus was so broad that even candidate Bush endorsed the plan.
Why? Because so many realize that good energy policy is good environmental policy, and good environmental policy is good economic policy.
And, they realize that we need a comprehensive policy that protects the environment while giving power generators the certainty they need to plan investments. And that, in turn, means that the climate issue simply must be accounted for in a comprehensive approach. To fail to include climate as the White House now proposes is irresponsible; it virtually guarantees that current supply problems will be repeated in the future since it ignores one of the most important drivers on the energy horizon. It is a threat to reliability.
And that is why the Bush reversal on this issue seems so inexplicable. Why would such a broadly supported and smart policy be so cavalierly thrown overboard? Sadly, again, one has to assume that the broad consensus was sacrificed to some narrow, short-term special interest.
My hope is that this committee will chart a different course. That this committee will see that Americans have come together as never before-leaders in business and the environmental community working with a common vision and pursuing a shared interest in economic and environmental vitality. The opportunities are enormous for technological leadership; for substantial economic advance; and for a healthy and whole environment.
True leadership requires that strategies-like those being advanced by the Bush administration and many in Congress--calling for Americans to sacrifice their quality of life and values they hold dear--must be rejected. True leadership consists in supporting the common interest over the narrow special interest. True leadership today consists in nurturing the wonderful and promising consensus that has emerged among Americans-business and environmental leaders alike-and seizing the wealth of opportunities with which we are blessed.