Volume 144, No. 3 covering the 2nd Session of the 105th Congress (1997 - 1998) was published by the Congressional Record.
The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“REMARKS OF GOVERNOR CECIL H. UNDERWOOD ON THE SIGNIFICANCE OF ENERGY RESEARCH AND DEVELOPMENT” mentioning the Environmental Protection Agency was published in the Senate section on pages S206-S208 on Jan. 29, 1998.
The publication is reproduced in full below:
REMARKS OF GOVERNOR CECIL H. UNDERWOOD ON THE SIGNIFICANCE OF ENERGY
RESEARCH AND DEVELOPMENT
Mr. BYRD. Mr. President, on yesterday, Wednesday, January 28, the Governor of the State of West Virginia, Cecil H. Underwood, appeared before the Interior Subcommittee of the House Appropriations Committee to testify about the significance of energy and research development. I ask unanimous consent that the text of Governor Underwood's remarks be printed in the Record.
There being no objection, the text of the remarks was ordered to be printed in the Record, as follows:
Testimony of Cecil H. Underwood, Governor of the State of West
Virginia, to the Interior Subcommittee of the House of Appropriations
Committee, January 28, 1998
Thank you, Mr. Chairman, for the opportunity to testify today about the importance of energy research and development
(R&D). I bring to your deliberations the perspective of a governor of an energy-producing state, which also relies on energy-intensive industries for its economic foundation. I also come before you with a regional perspective as the chairman of the Southern States Energy Board.
By way of further introduction, as governor, I have become a leading advocate of the use of technology in moving our state forward. As I have said many times throughout West Virginia, technology is the vehicle that will drive our state into the 21st century. Applications of technology are opening new avenues for meeting the energy needs of our people, our businesses and our industries. Energy R&D will be crucial in the creation and application of the technologies that will fuel our economic engine in the years to come.
Our collective transition into a new century and millennium makes us more cognizant of other economic transitions that are underway. We are moving toward a more global economy, toward a technology-driven and information intensive economy, toward boundless applications of new technology and toward economic diversification that builds upon our industrial foundation.
As we move toward the exciting opportunities of the new times, our nation must be careful that it does not move away from energy-intensive industries that still are economically vibrant and vital or from energy sources that can help meet the growing needs of the future. As with all real progress, though, our success in economic transition depends on our abilities to explore new ways to address traditional challenges.
Our preparation for the future is complicated also by new proposals that seek to improve our physical environment but that may have a devastating impact on the economic environment in many parts of the country, including West Virginia and the chairman's home state of Ohio. The environmental restrictions that may be imposed and the resulting economic impact on many areas make the need for energy research and development that much more urgent.
As governor of an energy-producing state, I sense that urgency more acutely, especially as such R&D would be critical to efforts in three main areas: helping our domestic energy producers meet the challenges of new regulations and an economy in transition; exploring ways that energy producing companies and traditional industries, which use significant amounts of energy, can become environmentally responsible while maintaining economic vitality; and developing new markets for traditional energy resources and new applications to meet changing market opportunities.
Energy-related R&D is a crucial investment in the future of my state and our country. It is critical to preparing the industries of our region for the challenges and opportunities of the new times ahead in the 21st century.
energy issues of the future for west virginia
The best way to determine an appropriate course of action is to determine first the goal or destination sought. So I begin my evaluation with what my state and our nation must do with a description of where I want us to be in 12 years.
A Vision for the Year 2010
Our vision for the year 2010 is that West Virginia will be a showcase state for efficient power generation and efficient industrial energy usage. There will be several state-of-the-art, highly efficient, environmentally compliant fossil fuel power generation plants in the state. Coal-based generation plants in West Virginia will be in compliance with all clean air regulations, demonstrating technologies developed in the U.S. Department of Energy (DOE) Clean Coal Technology program. West Virginia's manufacturing plants will be highly productive and energy efficient with virtually all waste heat and waste materials reused and recycled.
Power generation markets in West Virginia will be competitive, deregulated, and electricity rates in West Virginia will be among the lowest in the nation. Residential, commercial and industrial customers, both in and out of the state, will be able to obtain power from the most efficient sources. The power transmission system will have excess capacity, enabling export of additional power from the state; West Virginia generators will have access to the transmission grid at rates that reflect the actual cost of transmission. We believe that in 2010, as is the case today, about 75 percent of the power generated in West Virginia will be sold in competitive markets out of state and that growth in demand for power generated in West Virginia will average about 2 percent per year.
Our vision for 2010 is that West Virginia will have a significant involvement in the development and demonstration of environment technologies that enable domestic fossil fuels to remain the country's dominant fuel for generation of electricity. For example, West Virginia projects will demonstrate technologies, which reduce the amount of CO2 introduced into the atmosphere during extraction and use of fossil fuels. Technologies to capture CO2 and sequester it in deep underground coal mines and gas reservoirs will be developed and demonstrated in the state.
Furthermore, West Virginia will be a major technology innovator for non-CO2 producing uses of coal. For example, there will be a growing industry in the state for production of chemicals and advanced carbon materials made from coal-based feedstocks.
In 12 years, the West Virginia coal mining industry will continue to be highly efficient and use state-of-the-art technologies that minimize environmental and social impacts of mining. Current and past mine sites will be reclaimed and waterways will be protected from acid mine drainage.
For our basic industries such as aluminum, steel, glass, chemicals, wood products and mining to remain globally competitive in the year 2010, we believe it will be necessary for them to continually improve their productivity by participating in programs such as the U.S. DOE's Industries of the Future (IOF) program. For that reason, West Virginia is working with the Office of Industrial Technologies to develop a state-level IOF program to promote industry, government and academic cooperative projects to improve industrial productivity through energy efficiency, waste minimization and use of new technologies.
In our vision of 2010, West Virginia's coal and natural gas companies will work together with utilities and high technology companies on collaborative projects to help West Virginia manufacturing industries remain globally competitive.
For the year 2010, we envision at least 25 percent of West Virginia's fleet and commuter vehicles being powered by alternate fuels, such as natural gas, electric, hybrid electric or coal-based diesel. Natural gas refueling stations and recharging facilities will be conveniently located across the state. Furthermore, we anticipate that West Virginia will be participating in a consortium of mid-Atlantic states developing a high-speed, intercity light-rail transportation system.
West Virginia will continue to be the largest producer of natural gas east of the Mississippi River, as well as a major storage and transfer area for interstate natural gas transmission systems. West Virginia is becoming a major producer of coalbed methane, and by 2010, no coalbed methane will be flared or vented to the atmosphere. It will be recovered and used for production of heat and power.
In addition to coal and natural gas, West Virginia will have by 2010 a diversified portfolio of energy sources including coalbed methane, wood residues, waste coal, wind and biomass.
potential barriers to achieving the vision
There are several potential barriers to West Virginia achieving its vision for 2010 relative to power generation and industrial energy efficiency. We have serious concerns with the Environmental Protection Agency's emissions standards for NOx, as proposed on November 7, 1997. Likewise, our state is also concerned about how, as a result of the Kyoto Conference, new restrictions on greenhouse gases--in particular CO2--could have a devastating impact on the cost of energy production and the economy of our state.
EPA's proposal prescribes an overall NOx reduction of 44 percent from West Virginia sources. This would require power plants in the state to reduce their NOx emissions by as much as 85 percent from 1990 levels and other industrial/manufacturing sectors by 25 percent to 70 percent. The impact on the state could be severe, jeopardizing up to 11,000 jobs in the manufacturing and power generation industries--more than 12 percent of West Virginia's industrial work force.
There is growing concern around the world about global climate change due in part to burning fossil fuels. West Virginia expects to do its part to prevent global climate change, but we strongly believe that greenhouse gas emissions standards should be equitable worldwide and based on science. Allowing developing nations to have an unfair advantage over developed nations on the amount of emissions allowed puts the United States--and more specifically states, such as West Virginia--at a competitive disadvantage. Consideration must be given to potential economic impacts of precipitous CO2 reductions and R&D programs developed to ensure the energy security of the country.
As a competitive electricity industry evolves and various federal and state-level legislative restructuring bills are considered, it is important that West Virginia be able to export power. There should be no barriers to the sale of low-cost West Virginia electricity to customers in other states. The cost of transmitting electricity should reflect the actual marginal costs of transmission. Flat rate (postage stamp) pricing schemes for transmission would weaken West Virginia's advantage of being a low-cost electricity producer located near the major East Coast load centers.
Exporting West Virginia power to out-of-state customers requires adequate transmission capacity and fair transmission pricing policies. West Virginia should be included in the dialogue on formation of regional transmission groups and procedures for operating the transmission system.
Formulation of sound energy policy requires a thorough knowledge of the relative costs of producing and consuming power from various fuels and with various technologies. For example, the true environmental costs of renewable energy sources such as wind, hydro and photovoltaic need to be understood better. Furthermore, the cost of externalities such as a military force to guarantee access to offshore sources of crude oil is not reflected in the domestic price of petroleum products.
research and development needed to achieve the vision
Research must be conducted on cost-effective technologies to minimize emissions of greenhouse gases, NOX, particulates and other pollutants associated with the use of fossil fuels. Such research could be conducted through cooperative university, industry and government agreements, but the R&D priorities must be determined by industry. An excellent model for developing industry-led research agendas is the U.S. DOE's Industries of the future program run by the Office of Industrial Technologies. The U.S. DOE Clean Coal Technology program is also a model of industry/government cost-shared research that encourages commercial implementation of new technologies to improve efficiency and ameliorate environmental impacts of coal-based power generation. Such technologies are important to the energy security of the country in the event crude oil supplies are interrupted or the price of natural gas increases sharply.
Research and Development Related to Power Generation and Transmission
Several fields present compelling opportunities to explore strategies and new approaches that would: increase efficiency and reduce the costs of producing electricity with new technologies such as low NOX burners, fuel cells, coal gasification combined cycle, cofiring with biomass or natural gas, etc.; improve efficiencies on retrofit technologies, reduce pollution emissions and extend the life of existing power plants; continue investment in certain clean coal technologies to further reduce costs, improve efficiency and reliability and minimize emissions; optimize all aspects of power plant operation toward increased efficiencies; and explore ``in-situ'' utilization of existing coal reserves.
Develop technologies for eliminating NOX emissions from diesel engines; explore technologies for capturing, utilizing and sequestering CO2; design pollution permit trading systems that treat fixed and mobile sources equitably; improve and validate mathematical models of pollution transport and global climate change phenomenon; increase the reliability and capacity of existing transmission line right-of-ways with use of improved power electronics, high-temperature super conductors, voltage control, protection against sudden voltage collapse, improved system stability and real-time monitoring of line temperatures; reduce further the cost of high-voltage DC transmission lines; improve understanding of how electric power markets work. (Studies to determine the actual costs of transmitting power so economically efficient, i.e., marginal cost, transmission-pricing schemes can be devised); and assess economic and scientific impacts of rule making.
Research and Development Related to Industrial Energy Efficiency
West Virginia is working through the national industries of the Future program to implement an IOF-WV program to identify and conduct multidisciplinary projects, which will be of real benefit to West Virginia's aluminum, steel, glass, chemical and wood products industries. At a recent IOF-WV Symposium in Charleston, the five industry groups were asked to brainstorm the question, ``What specific projects should be undertaken to increase productivity and reduce costs through improved energy efficiency, reduced waste, use of new technologies, better inventory and management systems, etc.?'' There were 33 project ideas from the aluminum industry group, 21 from the steel industry group, 15 from the glass industry group, 26 from the chemical industry group and 16 from the wood/forest products group. Over the next year, the IOF-WV program will expand to include metal casting and mining.
Their suggestions for the fields of R&D include: strategies to reduce the cost of power for West Virginia's energy intensive manufacturing industries, e.g., better energy demand management systems; new systems for improved on-line process monitoring and improved sensors and controls; development of better waste minimization and recycle strategies, e.g., industrial wastewater treatment technologies; product designs for recycling materials and wastes; more effective recovery and use of industrial waste heat; better strategies for cross industry use of waste and by-product from one process or company as feedstock for another; streamlined environmental permitting processes; and evaluation of proposed mining sites in terms of potential acid water production, subsidence and impacts on roads, bridges and scenic areas.
funding for energy and industrial efficiency R&D
Deregulation and competition in the electricity industry could lead to reduced spending by the private sector on long-range energy related R&D. The federal government must provide leadership with incentive programs to co-fund development and implementation of a spectrum of energy technologies. The DOE and the states will need to develop cooperative R&D programs appropriate to the needs and resources of individual states.
All stakeholders must make investments in energy R&D. Although generation is being deregulated, transmission and distribution of electricity will remain regulated. State and federal laws on restructuring of the electricity industry can authorize wire charges or other fees to develop a pool of funding for energy R&D projects. The energy industries in West Virginia must play leading roles in developing resources to support R&D on environmentally compliant technologies for fossil-based power generation. Investment in implementing these technologies also will be required.
To retain the interest and involvement of West Virginia companies in the Industries of the Future program, it is necessary that we make rapid progress toward funding for joint projects, which will benefit their future survivability and competitiveness. We are currently working with five industry sectors (aluminum, steel, glass, chemicals and wood/forest products) and plan to add metal casting and mining. A budget of about $1,750,000 per year would be required to run a meaningful state-level IOF program.
State and federal incentive programs that encourage companies to invest in new technologies that save energy and minimize emissions should be expanded. The U.S. DOE's existing program in National Industrial Competitiveness through Energy, Environment, Economics (NICE-3) Is an effective mechanism to encourage private-sector Investment in new energy efficient technologies.
The U.S. DOE's State Energy Program provides funding directly to the states, permitting them the flexibility to support energy initiatives that are uniquely Important to their situations. In West Virginia, a cornerstone of the State Energy Program is our work with industry to identify process modernization opportunities. These industrial projects yield meaningful cost-savings and environmental benefits that are key to the long-term health of our nation's industries. International trade treaties require that our industries become more competitive. West Virginia became the first state to institute a state level Industry of the Future program.
Another Important component of our energy program is the promotion of alternative fuels. Through the State Energy Program, we are supporting alternate fuels training programs, as well as development of a compressed natural gas fueling infrastructure. West Virginia was one of the first states to Initiate a statewide Clean Cities program. The overall goal of the State Energy Program is to enhance our nation's energy security.
Summary
In summary, production and utilization of fossil fuels, generation and transmission of electricity and energy intensive manufacturing industries dominate the economy of West Virginia. We envision our low-cost electricity and manufacturerd goods as being critical to the energy security and industrial competitiveness of the nation throughout the next century. The energy research needs and agenda outlined in this paper are of great Importance to our state. We are committed to participating in partnerships and coalitions to develop resources and to carry out the R&D program. West Virginia wishes to participate fully in the energy/environment/economic policy debates. We very much appreciate the opportunity to present our thoughts to the Interior Subcommittee of the U.S. House of Representatives Appropriations Committee and look forward to further discussions and actions.
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