Senate Hearing, 110TH Congress - Energy Security: An American Imperative

S. Hrg.
1101023
ENERGY SECURITY: AN AMERICAN IMPERATIVE
HEARING
BEFORE THE
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
JULY 22, 2008
Available via http://www.gpoaccess.gov/congress/index.html

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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii
TED STEVENS, Alaska
THOMAS R. CARPER, Delaware
GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas
NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana
TOM COBURN, Oklahoma
BARACK OBAMA, Illinois
PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri
JOHN WARNER, Virginia
JON TESTER, Montana
JOHN E. SUNUNU, New Hampshire
MICHAEL L. ALEXANDER, Staff Director
DAVID MCINTOSH, Legislative Assistant, Office of Senator Lieberman
BRANDON L. MILHORN, Minority Staff Director and Chief Counsel
AMY B. CARROLL, Minority Professional Staff Member
TRINA DRIESSNACK TYRER, Chief Clerk
PATRICIA R. HOGAN, Publications Clerk and GPO Detailee
LAURA W. KILBRIDE, Hearing Clerk
(II)
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CONTENTS
Opening statements:
Senator Lieberman ...........................................................................................
Senator Collins .................................................................................................
Senator Voinovich .............................................................................................
Senator Domenici .............................................................................................
Page
1
2
11
13
WITNESSES
TUESDAY, JULY 22, 2008
T. Boone Pickens, Founder and Chief Executive Officer, BP Capital Management ......................................................................................................................
Gal Luft, Ph.D., Executive Director, Institute for the Analysis of Global Security, and Co-Founder, Set America Free Coalition ............................................
Geoffrey Anderson, President and Chief Executive Officer, Smart Growth
America .................................................................................................................
Habib J. Dagher, Ph.D., Director, Advanced Structures and Composites Laboratory, University of Maine ...............................................................................
ALPHABETICAL LIST
OF
4
25
28
31
WITNESSES
Anderson, Geoffrey:
Testimony ..........................................................................................................
Prepared statement ..........................................................................................
Dagher, Habib J., Ph.D.:
Testimony ..........................................................................................................
Luft, Gal, Ph.D.:
Testimony ..........................................................................................................
Pickens, T. Boone:
Testimony ..........................................................................................................
Prepared statement with attachments ...........................................................
28
64
31
71
25
58
4
41
APPENDIX
Deutsche Banks Report titled From Shale to Shining Shale, submitted
by Mr. Pickens ......................................................................................................
125
(III)
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ENERGY SECURITY: AN AMERICAN

IMPERATIVE
TUESDAY, JULY 22, 2008
U.S. SENATE,
ON HOMELAND SECURITY
AND GOVERNMENTAL AFFAIRS,
COMMITTEE
Washington, DC.
The Committee met, pursuant to notice, at 9:35 a.m., in room
SD106, Dirksen Senate Office Building, Hon. Joseph I. Lieberman, Chairman of the Committee, presiding.
Present: Senators Lieberman, Carper, Collins, Voinovich, and
Domenici.
OPENING STATEMENT OF CHAIRMAN LIEBERMAN
Chairman LIEBERMAN. The hearing will come to order. Thank

you very much for being here. Good morning and welcome to this
hearing, which is entitled Energy Security: An American Imperative.
The high price of gasoline today is literally wounding American
families, businesses, and farmers, and it is causing the American
economy to stagger. It threatens to impose terrible hardship this
winter on families in places like New England that rely heavily on
home heating oil.
The near total dependence of our economy, the energy sector of
itand particularly the transportation sectoron oil is weakening
our Nations position in the world while enriching and strengthening a lot of countries in the rest of the world, many of them volatile and some of them just plain hostile to the United States of
America.
For well over a generation, Americas leaders have seen this
growing dependence on foreign oil but essentially sat back and
watched passively as trillions of dollars of our American, hardearned wealth has been used to buy that oil and thereby go to
countries abroad. And during that more than a generation, Americas leaders have done little or nothing about that problem. Apparently, it took $4-a-gallon gasoline to wake up the American people
and their leaders here in Washington, to make all of us angry and
anxious enough to get serious about breaking our national dependency on foreign oil.
And at this moment of crisis and opportunity in America, T.
Boone Pickens comes on to the national stage with a classically
American message of honesty, determination, and can-do optimism.
He said some things in that advertisement on television that I
think are going to be long remembered and that have aroused a lot
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of Americans, who, like him, are sick of talk and want some action.
I, for one, as a Senator who has been here for a while, have been
very pleased with what T. Boone Pickens has done. And he is not
just talk. He has offered us a planthe Pickens Planwhich has
been described, accurately, I believe, as a sweeping and innovative
action program to loosen the grip that oil has on America.
The Pickens Plan has attracted attention, in part, because the
author of the strategy to cut our reliance on oil is himself a legendary oil man. It has also attracted attention because T. Boone
Pickens has invested a large amount of his own money to educate
the public about the crisis and his proposed response to it. But,
most important, I think, the plan has attracted attention because
it is bold.
I am very pleased to have Mr. Pickens here as a witness today.
Frankly, I am pleased because I hope his boldness will infect a lot
of other people here in Washington with the power to do something
about it so that we will be motivated to come together, forget our
political differences, and do what is right for our country by getting
something big done to break our dependence on foreign oil.
We have taken incremental steps over the years, and I have supported them. But the fact is they are woefully inadequate to the
crisis that America faces. I, for one, am spoiling for some bold T.
Boone Pickens-type action, and I know I am not alone.
We have a second panel that will testify todaythree witnesses
who, like Mr. Pickens, are well positioned to recommend strong
steps that can enhance U.S. energy security and lift an economic
burden from American families, farmers, and businesses.
Immediately after this hearing, Senator Collins and I are going
to join Senators Brownback and Salazar in taking one such bipartisan step. We are going to introduce a bill called the Open Fuel
Standard Act. One of our witnesses, Dr. Luft, has helped craft that
bill, and I would not be surprised if he discusses it this morning.
For me, this mornings hearing provides an important opportunity
to listen, learn, and then, together, act.
Senator Collins.
OPENING STATEMENT OF SENATOR COLLINS
Senator COLLINS. Thank you, Mr. Chairman.

First, let me thank you for holding this hearing this morning.
You and I have worked on a lot of important issues together, and
I believe that our undertaking this hearing is one of the most important, for the fact is that our Nation faces an energy crisis.
The soaring price of oil is causing great harm to our economy,
from the major industries that move our Nation to the small businesses that are the backbone of our communities. As I travel
throughout Maine, I hear time and again of the hardship the skyrocketing cost of gasoline and home heating oil is causing families.
Although it is still summer, Mainers are deeply worried about
how they will stay warm this winter. One woman told me that
every month, half of her Social Security check goes to meeting the
budget plan for her home heating oil. She is literally choosing between keeping warm and eating well, a choice that no American
should ever have to make.
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Beyond the impact on countless families struggling with high
costs, our growing dependence on foreign oil is a threat to our national and economic security. One of our witnesses, Mr. Pickens,
has vividly illustrated our ever-increasing dependence on foreign
sources of oil in the Middle East and Venezuela. We are impoverishing ourselves while enriching regimes that are in many cases
hostile to America. Ending our dependence on foreign oil and securing our own energy future is an American imperative.
Our Nation must embrace a comprehensive strategy to reduce,
and ultimately eliminate, our reliance on Middle East oil. We must
expand and diversify American energy resources, and while doing
so, improve our environment.
To understand how we can meet the challenge of energy security,
we can look back a half-century ago to another time when our Nation faced a great test. On October 4, 1957, America was in shock.
We were stunned by an object the size of a beach ball, weighing
just 184 pounds. That object was the Soviet satellite called Sputnik.
We responded not by giving up, but with our own satellite
launches and later an energetic commitment to land a man on the
Moon. A strong partnership of government, research institutions,
universities, and the private sector formed to support a bold new
initiative in scientific advancement. And, as a result, in 1969, an
American flag flew on the Moon.
The most remarkable aspect of that story is not that America
met a challenge by developing superior technology, but that we embarked on that journey confident that the American spirit and
know-how would triumph.
By contrast, our Nation missed an enormous opportunity on another October day 35 years ago. On October 17, 1973, the Organization of Arab Petroleum Exporting Countries, the predecessor of
the Organization of Petroleum Exporting Countries (OPEC), hit the
United States with an oil embargo.
The immediate results were soaring gasoline prices, fuel shortages, lines at filling stations, and an economic recession.
Unfortunately, after the immediate crisis passed, the long-term
result was a steady increase in oil imports and a dependence that
worsens each day. The 1973 embargo was a wake-up call that we
failed to heed. The current crisis is a fire alarm that we must not
ignore.
Meeting this challenge requires the skills and commitment that
we see in our line-up of witnesses todaythe entrepreneurial spirit
of the private sector, an understanding of the specific economic and
environmental issues at stake, and a commitment to the research
and development of new technologies in all regions of our country.
It also requires action by government. From establishing a
timeline for energy security to undertaking critical investments to
stimulate research in alternatives to expanding the production and
conservation tax credits, government has a critical role to play.
Above all, we must follow through. Let me give my colleagues
one example of the lack of resolve that has been all too common
for all too long.
The easternmost city in the United States is Eastport, Maine.
Visit this pretty little city, and you will find the remnants of a tidal
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power project initiated in the 1930s by President Franklin Roosevelt, who grew up observing the incredible tidal range there from
his familys summer home on Campobello Island, across the bay in
New Brunswick. Causeways to impound the water to turn the generators were built, as was housing for thousands of construction
workers. Then, after just 2 years of preliminary work, Congress
pulled the plug and canceled the project.
Why? Because Congress decided that it would be cheaper and
easier to rely on conventional, fossil fuel generation closer to the
population centers of southern New England. The challenges of
building a transmission system to connect this rural region of
Maine to the cities were deemed not worth the effort. Federal and
State authorities failed to cooperate. The project was abandoned.
The technology of generators to tap tidal power has advanced
greatly since the 1930s. Regrettably, the need for government to be
more farsighted has not.
I have called for American energy independence by the year
2020, the same 12-year time frame that elapsed between Sputnik
and Apollo 11. Some experts believe that such a goal is too ambitious, but I know that no goal is ever reached without first being
set. Just as the America of a half-century ago boldly stated its intentions to reach the moon, we must now declare our intention to
achieve energy independence and energy security.
Today, we will hear four proposals for improving Americas energy security. I welcome Mr. Pickens to his first appearance on
Capitol Hill since he unveiled his comprehensive plan to bolster
Americas energy security. Dr. Luft and Mr. Anderson will discuss
transportation and community planning. And I am particularly
pleased to welcome an engineering professor with whom I have
worked closely, Dr. Habib Dagher of the University of Maine. I
know that the Committee will be very interested in his presentation on harnessing the power of winds offshore and geothermal
energy underground. Our witnesses will provide invaluable perspective on how we can progress toward a goal that is truly the
new American imperative.
Thank you, Mr. Chairman.
Chairman LIEBERMAN. Thank you, Senator Collins, for that excellent statement and, if I may say so, for your own bold plan and
proposal.
Mr. Pickens, thanks very much for being here. Thanks for this
extraordinary act of leadership, I would say patriotism. The Committee looks forward to hearing your testimony now.
TESTIMONY OF T. BOONE PICKENS,1 FOUNDER AND CHIEF
EXECUTIVE OFFICER, BP CAPITAL MANAGEMENT
Mr. PICKENS. Chairman Lieberman, Ranking Member Collins,

and Members of the Committee, thank you for having me here
today. We are more fragile today from a national security standpoint than we have been since World War II. The danger stems
from our overwhelming $700 billion dependency on foreign oil annually.
1 The
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In 1945, we were exporting oil to our allies. By 1970, we were
importing 24 percent of our oil. By the 1980s, it was 37 percent.
And in 1991, during the Gulf War, it was 42 percent. Today, we
are approaching 70 percent.
Much of our dependency is on oil from countries that are not
friendly, and some would even like to see us fail as a democracy
and as the leader of the free world. I am convinced we are paying
for both sides of the Iraq war. We are giving them tools to accomplish their mission without ever having to do anything but sell us
oil.
This is more than a disturbing trend line. It is a recipe for national disaster. It has gone on for 40 years now. This is a crisis
that cannot be left to the next generation to solve, and it is a
shame if we do not do something about it. And we can, without
bringing our economy and way of life to a halt.
I have been traveling the country with a simple message. Our
country is in a deep hole, and it is time to stop digging. I have a
plan to do just that. The response from the American people has
been overwhelmingly positive, and I have talked to a lot of people.
The Pickens Plan starts with harnessing wind and building solar
capabilities. We are blessed with some of the best wind and solar
resources in the world. The Department of Energy estimates that
we can produce 22 percent of our countrys electrical energy needs
just by utilizing the wind resources in the Great Plains. And, actually, if you wanted to go beyond 22 percent, you could go to 40, 60,
80, whatever you want. That resource is unlimited. The plan substitutes electricity generated by natural gas-fired plants with windgenerated electricity. Natural gas-fired is 22 percent; the wind is
going to replace that 22 percent.
The natural gas freed up is directed to transportation needs of
the country. The natural gas is cheaper, cleaner than gasoline, and
its supply is plentiful. And, most of all, it is American.
The Deutsche Bank today released a 50-page report,1 which is
called From Shale to Shining Shale. What they are telling us is
that there is a huge amount of shale gas available to us in the
United States. Dont confuse this with the oil shale that is on the
western slope of the Rocky Mountains. It is not the same geological
situation.
The result would be a reduction of our dependency on imported
oil by 38 percent. This plan is based on proven, existing technologies. It is simple, and it is doable. It provides a significant
bridgebridge underlinedto the future that gives us time to develop the next generation of alternative fuels, including electric or
hydrogen vehicles. It results in revitalizing much of rural America;
$1 trillion of private investment would go into the Great Plains of
this country. Instead of enriching other nations, we would actually
recover our rural areas. It can be accomplished with private investment, but it cannot be achieved unless our national government
clears the way for action.
Government should move immediately to build the east-west
transmission corridor to ensure wind power gets to market. This
would include transmission rights-of-way. I envision this could be
1 The
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like in the Eisenhower Administration when they declared an
emergency and built the interstate highway system. The way I recall itand I have been around for a long time, so I should be able
to recall itthere was an emergency because of the Cold War, and
it was a way to move, if we had to move rapidly, our military.
But I also feel that this is an emergency, too, and believe maybe
that could be the approach as it has to be done quickly because we
are pressed by not only the 70 percent we are dependent on foreign
oil, but the $700 billion a year that we are pouring out. And I am
convinced that $700 billion is a minimum number because I think
the price of oil is going to go up. I would project out for 10 years
it is going to cost usif we continue on the same route that we are
on now, we will have bought $10 trillion worth of oil from foreign
producers. Government must extend for at least 10 years the production tax credits (PTCs). The cost pales in comparison to the cost
of foreign oil.
Let me quickly address what I call the five Pickens principles
that should be used to assess any of the energy plans brought before you.
First, the plan has to slash our dependence on foreign oil by at
least 30 percent in 10 years.
Second, the plan needs to rely on 100 percent North American
resources.
Third, the plan needs to utilize existing and proven alternatives
to foreign oil.
Fourth, the plan needs to call on private enterprise to execute
quickly.
Finally, the plan requires the Federal Government to clear the
path for implementation.
We have walked into a trap, and we have got to get out of it.
We are the ones that put ourselves there. Nobody else. I am not
pointing the finger at anybody. It is not going to help. But we have
to work together and solve this national security crisis together.
Thank you.
Chairman LIEBERMAN. Thank you, sir. That was an excellent beginning.
We will do 6-minute rounds so we can get as many Senators involved as possible.
Focus in, if you will, on exactly what you would like to see the
Federal Government do to play its part in the implementation of
the Pickens Plan. In other words, what are the kinds of tax credits,
for instance, that you would like to see us adopt?
Mr. PICKENS. OK, let me identifyI will answer all questions.
You know that. But I would like to comment that our problem and
the reason why we have not done the things that we should have
done to protect ourselves is because of cheap oil. And we sat here
and really said, Send us the oil. Never mind the price.
Chairman LIEBERMAN. Right.
Mr. PICKENS. Then the price went vertical, and when it did, everybody said, I cant stand it. I didnt know I was signing up for
this.
And so here we are, and we can expect that price to remain
vertical. It will maybe plateau and go again, but I promise you, the
people that have the oil are going to get the best price they can
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for it. I do not care what they say. I do not believe them. I do not
believe when they say we want to stabilize prices. When Russia,
the largest producer with Saudi Arabia, both about 9 million barrels a day, are having meetings to stabilize the price, I do not think
that is what they are talking about.
Chairman LIEBERMAN. I think you are right.
Mr. PICKENS. And here we are, we are the odd man out in the
deal.
The PTCs for 200,000 megawatts of power, the PTCs for that
would be $15 billion a year, and that would start it moving. Now,
I know you are struggling with the PTCs now, and it expires in December, and you extend it one year at a time. To stabilize the opportunity, to cause the money to come into it, you should give a 10year extension of the PTCs. But when you look at $700 billion
going out of the country every year for the purchase of oil, a $15
billion PTCs is somewhat insignificant.
Mr. PICKENS. I am not saying throw money away. You know
that. But the $700 billion is so overpowering. But, anyway, 10
years with the PTCs
Chairman LIEBERMAN. Would you change it at all from the way
it is structured now to incentivize, for instance, wind and solar?
Mr. PICKENS. I am sorry. I cannot answer that. I am not that familiar with what the
Chairman LIEBERMAN. Good enough. So you are saying lock in
the production tax credit for a 10-year period so people can count
on it.
Mr. PICKENS. Yes.
Chairman LIEBERMAN. And be prepared to put in $15 billion into
that a year.
Mr. PICKENS. Right. And what will happen, I believeand I have
heard this, too, from some of the manufacturing companies that
would like to be involved in developing some of this. They say if
we could have PTCs for 10 years, we can move into the area, and
we can develop this.
Now, let me give you an example. I am doing the largest wind
farm in the world at Pampa, Texas. It is 4,000 megawatts. That is
about the equivalent of two and a half nuclear plants. We will have
manufacturing there. We had an economic study, and it would create 1,500 jobs for that area. And it amounts to $380 million a year
in economic benefit to that.
And you can just see, I mean, the model town for this is Sweetwater, Texas. The towns population was 12,000, and it went below
10,000. Now it is above 12,000. Over 20 percent of the jobs there
are related to wind energy. And you can see, I mean, it is a model
thatit is not something that we studied and believed would happen. We know it will happen.
Chairman LIEBERMAN. In other words, it is real.
Mr. PICKENS. It is real.
Chairman LIEBERMAN. Some people are still coming around to
the point that they think wind energy, and even solar, is a little
bit flaky or a vision. But I have never associated the word flaky
with you, now that I think about it. [Laughter.]
But we know it works.
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Mr. PICKENS. We know it works. And, if you look at the most
wind energy per size of country, it is Germany. And Germany does
not even have good wind. We have fabulous wind. I would like to
ask you to look at the map on the right.1
Chairman LIEBERMAN. Yes. We have copies of that up here.
Mr. PICKENS. Yes, you have it in front of you there.
Chairman LIEBERMAN. Yes, we do.
Mr. PICKENS. But that is a fabulous resource for this country,
and you have it all along the coast, too. I mean, that is available
if the people want it.
Now, I do not want it mandated that we have to develop for
wind. I am telling you, the people in that central part of the United
States call me. I have leased 300,000 acres to put wind turbines
on.
The other day we were in Sweetwater, Texas, and we were with
an ABC crew. And the ABC people were asking questions, and they
said to one of the locals there in Sweetwater, Are people unhappy
with the development of the wind turbines? He said, No. The only
people here that are unhappy are the ones that dont have the turbines.
Chairman LIEBERMAN. Got it.
Mr. PICKENS. They want them because it is income to them, and
they need the income.
Chairman LIEBERMAN. Last week, former Vice President Gore
made a proposal, another bold plan, which is to try to get America
to produce within 10 years 100 percent of its electricity from renewables. Is that doable, do you think?
Mr. PICKENS. I do not know. Mr. Gore and I talked the other
dayhis concern is global warming.
Mr. PICKENS. And global warming for me is page 2. Page 1 for
me is national security because of the 70 percent that we are importing. And also the $700 billion that is flowing out of the country.
And I told Mr. Gore, I said, Al, I will get to page 2 after I clean
up page 1. So mine is a different approach. And he said, Well,
you are for outer continental shelf (OCS) drilling. I said, I am for
everything that is American. Everything. Am I opposed to the
electric car? Absolutely not. Plug-in electric, lets do it.
Chairman LIEBERMAN. Flex fuel? Anything that works.
Mr. PICKENS. Anything that is American. I only have one enemy,
and that is foreign oil. That is what I want to get rid of. And if
you look at it, my plan will reduce our dependency on foreign oil
by 38 percent. And it was not designed this way. It just happened
to be. It is a coincidence, maybe. But we have plenty of natural gas
to do what we need to do, and if we could use natural gas for transportation fuel as a bridge fuel to hydrogen, electric, or whatever,
by 2050 we have to be off of hydrocarbons. We will still have hydrocarbons in the country, I hope, but that will not be our primary
transportation fuel. But if you look at our imports, 38 percent of
our imports come from the Mideast and Africa, the two most unstable areas.
Chairman LIEBERMAN. Interesting.
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Mr. PICKENS. We can replace 38 percent of the transportation
fuel with natural gas.
Chairman LIEBERMAN. Excellent. My time is up. Thank you. Senator Collins.
Senator COLLINS. Thank you.
Mr. Pickens, your plan focuses on land-based windmills in the
Midwest, and it has the advantage of helping to supply the electricity needs of a lot of the populated areas of the Midwest. I am
obviously not from the Midwest. I am from New England, which
has a huge reliance on natural gas for electricity. It is about double
the national average, and that is something that I agree we need
to change.
What do you think that we should do in the Northeast, and New
England in particular, to help reduce our reliance on imported oil?
Eighty percent of the households in my State of Maine use heating
oil, so this is truly a crisis in our State. Do you have any suggestions for broadening your plan to help the coastal areas of our
country?
Mr. PICKENS. I will use a broad brush sometimes, OK? And if it
is too much, well, pin me down. But heating oilthat is foreign.
Assume it is foreign because we are importing almost 70 percent.
Some of it may come domestic, but, anyway, that is foreign. Get
that over to natural gas, is what we should do, and the Northeast
should get off of heating oil.
As far as your using natural gas for power generation, dont
worry about it. Keep doing it. What will happen is the power generation, the natural gas will move out of that sector as it moves
into transportation fuel. So we do not have to shut down all of our
natural gas power generation. It will just happen naturally. But
what we have to do is we have to mandate the use. For instance,
all government vehicles purchased in the future would be natural
gas. That will send a message to General Motors, Ford, Chrysler,
and all the othersI never recognize any manufacturers in the
United States except those. Pardon me for that, but that comes
with age. I just know three car manufacturers. I say that and I
own a Honda GX natural gas car because I cannot get an American
natural gas car.
But GM makes 19 vehicles in the world today for natural gas.
None are made in the United States. They are made in South
America and Europe. So I know they know how to make them. So
if the government mandated that all vehicles at some point would
go to natural gas on new cars, they would get them. They would
make them, and it would be a revitalization of the auto manufacturers in the United States. And God knows they need it, too. They
need the help. They need all of it.
This has great economic benefits for rural America, car manufacturers, and all kinds of different areas that we could help our economy with it. But it will happen if the leadership will say lets do
this. Then let it unfold, and it will take place. Private industry will
build the grid if you will give private industry the corridors that
they can build in. That is what you have to do for us.
And if the government wants to build the grid, that is good, too.
But I think we should start to look at the future for energy for
America, and that is that we have a national grid, that we can put
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this together and get the foreign oil dependency out of the way. We
can do it. We have not been tasked, the American people have not
been tasked to do what has to be done.
For instance, people told me at breakfast this morning, Well,
wind is only 40 percent of the time. That is OK. Use the 40 percent. Baseload it with something, peak it with something. I am not
an authority on power generation. That is not my field. I am a geologist. I know about the oil business. But I do know that we have
not been charged with the responsibility to do it. Go do it, and everybody in this country will join together. The people will follow if
we have the leadership, thats what it takes. And you are going to
have to tell them thatexplain to them first. They dont know. I
promise you, the American people do not understand what we are
up against. I know that from polling. I know it because I have been
in the field; I have talked to people; I have looked at the focus
groups. I have done everything. I think I am prepared to respond,
and I know I would have never committed the $58 million to telling
this story had I not felt like the people did not understand.
I will tell you what they do understand. They know it is something very bad about energy. They do not think they are being told
the truth about energy. And it is confusing to them. I think when
we come out of this, by the time we getI want to elevate this into
the presidential debate, and it is not there yet. OK. Elevate it
there. By the time we get the elections over, whoever wins, the
American people are going to demand they know the truth about
energy, they know what they are up against, and they will respond.
We will see the energy use go down dramatically when they see
what it is going to cost. They can see that it does not have anything to do with Exxon or Chevron or anybody else running up the
price. It does not have anything to do with some speculator on Wall
Street. That is not what we are faced with. We are faced with 85
million barrels a day of production in the world, and we are using
25 percent of it, with 4 percent of the population, and we only have
3 percent of the reserves. In the United States, we have nothing
to do with the price of oil. We only have 3 percent of the reserves.
And so you tell me that a guy in China is buying a barrel of oil
for $140 that he thinks it is somebodys fault in the United States.
He does not think that. He understands. They know what it is. It
is a global price for oil. You look at Brent crude, sold on the London
exchange every day, and it is very close to West Texas Intermediate (WTI) crude.
So, anyway, I have drifted off the question, but I really do get
somewhat carried away with this subject.
Senator COLLINS. Just a quick follow-up, if I may, Mr. Chairman.
Chairman LIEBERMAN. Go ahead.
Senator COLLINS. When we look at your map, in addition to the
wind corridor up through the Midwest, from Texas to the Canadian
border, the other areas that have a lot of wind are offshore, for example, offshore of Maines coast, the Great Lakes region. Do you
see potential in offshore wind to also be part of the answer?
Mr. PICKENS. Sure. I see everything American is goodoffshore
wind, central part of the country wind, electric car. Everything
American is good. I am for that. Offshore, OCS drilling, Arctic Na-
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tional Wildlife Rescue (ANWR) drilling, yes, all of it. I want to see
all of it. I want to get off of foreign oil. Yes, all that.
If I could put up the map of the world there, and you have that
in front of you, I believe.
Senator COLLINS. Yes.
Chairman LIEBERMAN. Yes, we do.
Mr. PICKENS. But here, if you will notice, the United States has
the best wind energy in the world. Now, you can see some areas
over in Europe and around different places, but on landmass alone,
we have the best wind energy. And we are going to use it. There
is no question we are going to use it. And it can be melded with
baseload peak and wind. Solar comes into play. Solar and wind
work very well together. But we have not been pushed against
we are against the wall now, but we have not been charged with
getting ourselves straightened out in America. And the reason is
because the oil is so cheap. That is it. We sat around and just kind
of lazied it, and here we are.
Chairman LIEBERMAN. Thank you, Senator Collins. Senator
Voinovich.
OPENING STATEMENT OF SENATOR VOINOVICH
Senator VOINOVICH. Thank you, Mr. Chairman.

What you have had to say is music to my ear. I have been on
this Committee now 10 years, and we have had an environmental
policyyou are talking about cheap oil, but we have had an environmental policy around here that ignores our national security,
our economy, our energy needs, and the chickens have come home
to roost. And now we are trying to figure out how we are going to
get out from under this.
Many of us feel that we ought to go after every drop of oil that
is available to us, can be taken out environmentally. Many of us
also believe that we need to have an Apollo type program as we
didPresident Kennedy said we were going to put a man on the
moon in 10 years, and by golly, we did. There is no reason why we
cannot figure out how we can get off of our appetite for oil.
But one of the things that I never gave any consideration to, Mr.
Pickens, was natural gas, and the reasonI have looked at renewables, plug-ins, hybrids, you name it. But I did not look at natural
gas for the simple reason that the cost of the natural gas in this
country has skyrocketed to the point where in my city of Cleveland,
Ohio, my State, we were paying about $3 a Mcf back in 2000; now
we are paying about $10 a Mcf, and the people in the gas association here in Washington say we may go up to $14 or $15 a Mcf.
And part of the reason why, as you know, we went to natural gas
is we made it easy for energy companies to use natural gas because
it was cleaner and did not have as much emissions as, say, coal or
something else.
So I would like you to respond to the issue of how can we do this
when natural gas has skyrocketed, and I think you probably know
that in 1998 and 1999, we were exporting about $19 billion worth
of chemicals. Today, we are a net exporter, and the reason why is
because natural gas is a feedstock of the chemical industry, urea.
So that is one question.
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The other one is the issue of wind in that currently wind produces about 1.5 percent of our energy in this country. I think renewables are aboutlets see, about 9 percent, most of it is hydroelectric. How can you ramp that up over a quick period of time?
And, second of all, as you know, down in Texas you have had some
times when the wind just kind of stopped and you have had some
reliability problems. And if you are going to use wind, you know
that if you are going to have reliability, you are going to have to
back up that wind with some ordinary baseload energy generation.
So those two questions. How do we do this with the high cost of
natural gas as it is? And, second of all, the whole issue of the reliability of wind in terms of a baseload provider of energy in this
country.
Mr. PICKENS. Senator, on the expense of it, one Mcf of natural
gas equals 8 gallons of gasoline in energy. OK. They will do the
same job, one Mcf and 8 gallons. Today, natural gas is selling for
$12 per Mcf. If you had 8 gallons of gasoline at $4, it would be $32.
So natural gas is the cheapest of the fuels now. Natural gas is selling at 40 percent of heating oil. In the winter, heating oil and natural gas trade at parity. In the summer, not so, and we are in the
summer now. So natural gasI almost hate to tell you thisis
cheap compared to the other fuels. When you look at oil at $140
per barrel, natural gas, at $12 or $15 per Mcf, is cheap.
Senator VOINOVICH. Where do we get the natural gas? In other
words, what we have done in a way is we have increased the demand for natural gas, but the supply of natural gas is down and,
therefore, the price is up. And how do you reconcile that in terms
of what you are talking about?
Mr. PICKENS. Supply is up. We are up year over year. We have
increased the reserves of natural gas in the United States. We have
doubled them in 5 years.
Senator VOINOVICH. How come, then, we are going to be paying
$15 an Mcf in Ohio for natural gas? And I think around the country they are predictingthey are coming to Congress right now and
asking for more Low Income Home Energy Assistance Program
(LIHEAP) money because of the fact that the natural gas costs are
going to be skyrocketing.
Mr. PICKENS. It is because your energy costs are higher, is what
it is. I mean, it is not a case that somebody is gouging you. Natural
gas is selling at 40 percent of the cost of heating oil. Heating oil,
you can call it foreign. So you are beingI mean, it is all swinging
off of the price of oil, is where you are coming from. And when natural gas gets cheap enough that it will do a job that coalI mean,
it can compete with coal at times, it will get that cheap. It did a
year ago. We were down to $6. Now it is up to $12. If not, it is
$10. But it has been up to $12 this summer.
But you are dealing with a market. I am going to send you this
report that came out today on how we have developed in this country. In 5 years, we have doubled our gas reserves. This is huge.
And as a geologist, if you had told me this would have happened
10 years ago, I would have not given you one chance in 10,000.
Senator DOMENICI. What is it you have, Mr. Pickens? What is it
you are going to give us?
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Mr. PICKENS. Oh, I am going to send you this report from
Deutschebank today. It is called From Shale to Shining Shale.
Senator DOMENICI. OK.
Mr. PICKENS. It is about the technology and how much gas has
been discovered in the United States and how much we can have
in the future. But this is nothing more than a bridge to the next
fuel because when you get to 2050, we are pretty well maxed out
on hydrocarbons as a transportation fuel. And 70 percent of the oil
is used for transportation. When a barrel of oil comes to the United
States today, it will be moved to a refinery, refined, then go into
marketing, then go into our cars, and in 4 months it is gone. It is
gone. We burn it up. It is out of here. And so we have to get a hold
of this situation and realize that we cannot controlone thing,
though, that I will say, we have plenty of natural gas to do what
I am talking about, and we can do it for 20 or 30 years.
Senator VOINOVICH. If the price is way up and it seems that the
supply must not be up, as much up in terms of the demand, you
are telling us that we have the natural gas available, we just have
to go after it. Is that what you are saying?
Mr. PICKENS. Sure. We have to develop the natural
Senator VOINOVICH. And you cant do this program without going
after more natural gas in this country?
Mr. PICKENS. But dont get the idea that you are going to have
natural gas cheap. All energy is more expensive. The cheapest that
you are going to find is wind and solar. The rest of them are going
to be expensive.
Chairman LIEBERMAN. Thanks, Senator Voinovich.
Senator Domenici, welcome. I know that Mr. Pickens knows, but
Senator Domenici was the long-time chair of the Energy Committee
and is now the Ranking Member. We are glad to have you here this
morning.
OPENING STATEMENT OF SENATOR DOMENICI
Senator DOMENICI. Thank you. Mr. Chairman, he knows me from

a lot longer ago than you know me.
Mr. PICKENS. Senator Domenici and I have had business for 40
years.
Senator DOMENICI. And I am most amazed to see him at his age
take this new business venture, and I am very pleased with the expertise that you are applying to it.
I want to suggest a couple of things. You are so right that we
must get the people to understand; that the United States is sending so much of our resources to foreign countries just to acquire
crude oil; that it should be doubtful in the minds of intelligent people as to whether America can continue this kind of exportation of
our assets, of our resources to foreign countries for 5 or 10 years.
I actually do not believe we can. I believe we will become poorer
and poorer and poorer as we send $500 to $700 billion a year overseas for crude oil. We are in a real mess.
Some people tell me what you are for, and they confuse me, and
so I want to ask you so we will get it here on the record. We have
a bill coming up on the floor of the U.S. Senate that is supposed
to create an energy debate. Even though it is the end of the year,
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we are supposed to have some time to discuss some of our energy
woes and do something positive about them.
You are not against us opening more of the offshore assets of the
United States where there are 85 percent that are locked up in a
moratorium of one type or another and you cannot drill even if you
wanted to. Are you on the side of those who say lift those and start
drilling in an appropriate
Mr. PICKENS. I am saying do everything you can do to get off of
foreign oil, is what I am saying.
Senator DOMENICI. And that is one.
Mr. PICKENS. That is one. It is not going to do it.
Senator DOMENICI. Oh, no. Of course not.
Mr. PICKENS. It is not big enough. You do not have enough reserves in the offshore to do it. It will just be a piece of our problem.
Senator DOMENICI. Right.
Mr. PICKENS. And that is it.
Senator DOMENICI. From the standpoint of the United States and
paying what we are paying for oil, if we can get a reserve that is
anywhere from 14 to 30 billion barrels, that is a pretty good addition to the world availability of oil that we are going to be committing to the pool if we take off those moratoria and say it is available.
Mr. PICKENS. If you did 13 billion, added 13 billion, you would
add another Prudhoe Bay. Prudhoe Bay was the largest field ever
found in the United States. If you added 13 billion, you would
addour reserves today are about 20 billion. So you would have 60
percent more than what we have now.
Senator DOMENICI. It is commonly understood that without even
using modern techniques for evaluating the asset value resource
because we have not applied modern techniques. We have not
wanted to spend money, if you would believe it, to do a seismic
evaluation of these assets because for 27 years we have locked
them up with moratoria. That is a nice way to treat an American
asset for 27 years, lock it up and then say we do not know what
it is worth because we have not inventoried it.
Mr. PICKENS. Lets look at what we are talking about in the east
and west coast, not ANWR.
Senator DOMENICI. Yes.
Mr. PICKENS. The U.S. Geological Survey (USGS), I think, says
you have 85 billion barrels. Now, know that is an in-place figure.
That is not a recoverable all figure.
Senator DOMENICI. Correct.
Mr. PICKENS. When they talk about the 90 billion off the coast
of Brazil, that is an in-place figure again, not a recoverable. And
I have seen some that have compared those two, that the Brazilians have 90 billion barrels, and we have about the same. Their 90
billion is not a proven number, and it is thrown around pretty
loosely. But go to the facts and the biggest basin that we have
where we have recovered the most oil in America is the Gulf of
Mexico. So look at South Louisiana, Gulf of Mexico, and what have
you recovered there? You have recovered 40 billion barrels, and it
is by far the preferred place to look for oil instead of off the west
coast or the east cost of the United States.
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Senator DOMENICI. Twenty-five percent of Americas oil comes
from just where you said.
Mr. PICKENS. That is right. And so it isI am not a big believerI think you are going to get a rude awakening as to value
of the east and west coast when it is opened up and when it is put
up for sale. When those tracts are put up for sale, I think you are
going to be surprised at the price you get for the tracts.
Senator DOMENICI. We will see. But, in any event, it is certainly
worth it for the United States, for our people to understand that
this is an asset of theirs and we ought to see what we have got
and see how we can use it. And I just want to make sure that
Mr. PICKENS. I agree.
Senator DOMENICI [continuing]. You said that was so.
Let me talk a minute with you about turbines that run the wind
generation. I understand that the United States does not manufacture these turbines. Is that correct?
Mr. PICKENS. No. I bought them from GE, $2 billion worth of
them, to do a thousand megawatts on our first step of our 4,000megawatt project. And they are manufactured in the United States
by General Electric.
Senator DOMENICI. It is generally understood by those of us who
have been briefed that most of the turbine production is in Germany, not in the United States. Now, maybe GE produces
Mr. PICKENS. Well, Siemens is in Germany and Vesta is in the
Netherlands, and Mitsubishi is in the game, too. But we can get
all that business into the United States.
Senator DOMENICI. That is the point.
Mr. PICKENS. Yes. We can get it all here.
Senator DOMENICI. If, in fact, we are on a stable path of multiple-year use, we can get them to move here.
Mr. PICKENS. If they know that we are committed to doing it, is
where we are coming from.
Senator DOMENICI. It seems to me it is kind of strange that all
of a sudden we have come back to natural gas in cars. About 10
years ago, we were pretty much hitting hard on lets get gas in
fleets, lets have police fleets, lets have bus fleets. And then we
sort of let it all pale off. And now there is a big push to get natural
gas automobiles. Am I correct?
Mr. PICKENS. Yes, you are. And, actually, it was further back
than 10 years ago. I was in Albuquerque, and because of the air
quality there, they were interested in natural gas to replace gasoline and diesel. That was about 15 years ago.
Senator DOMENICI. All right.
Mr. PICKENS. And Las Vegas has the same problem. And, of
course, Los Angeles does. But if you look at the largest bus fleet
in the world today, it is in Beijingall natural gas. I was there in
July of last year, and they have over 4,000 buses. The second largest bus fleet is Los Angeles MTA. And when you look at the Port
of Los Angeles, which is switching over now from 22,000 18-wheelers, it is switching over to natural gas. And I think the first
tranche was 8,000 18-wheelers there.
But look at what happened last week, Senator. Gazprom announced they are building natural gas fueling stations all over Europe.
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Mr. PICKENS. They are switching over, too. But here we are, we
still drift. There are 8 million natural gas vehicles in the world
today8 millionand that has gone from 5 to 8 million in 2 years.
Senator DOMENICI. And where are we?
Mr. PICKENS. One hundred and forty-two thousand.
Senator DOMENICI. Right.
Mr. PICKENS. Out of 8 million. We have done absolutely nothing.
Senator DOMENICI. Well, we are not promoting it. We have not
yet decided thatyour testimony here today, where you say there
is an abundance of natural gas, we as a Nation have not yet decided that is true because we have had such pressure from the
chemical industry and others that use it as feedstock to make it
available to them so they can keep jobs here, that we have not focused on automobile engines to be fed by natural gas.
I believe we are on the track right now, with electric automobiles, if we could add a bigger incentive for natural gas cars and
trucksif we could get that going, it seems to me that we would
have taken a giant stride in the right direction toward minimizing
our use of crude oil from overseas because automobiles and transportation drive our dependence.
Mr. PICKENS. If you take 22 percent of our power generation and
make it with wind and take the 22 percent of natural gas that is
doing power generation to transportation fuel, you will reduce our
dependency by 38 percent. And what you will do is you will bring
down the price of gasoline. I promise you that you will do that. And
we will do it with our own fuel. It will not be some othernow,
one thingand Senator Voinovich mentioned that he is concerned
about the price of natural gas.
Mr. PICKENS. But what happens is that we are not protecting the
chemical industry with cheap anything. It is not our job to provide
it cheap to the chemical industry. I mean, they are going to have
to compete globally. Well, you think natural gas is cheap in Europe? Natural gas is $18. If you want a load of liquified natural gas
(LNG) spot on the market day, you will pay $18 for it. And so we
are in a global market, and the price of energy can be graded every
day all around the world.
Senator DOMENICI. Well, the report that you are going to give us
on natural gas is coupled with some new reports that are saying
that we have new finds of natural gas that you did not even dream
of when you were a gas man. They are all over the country, and
it is shale gas, and it is 5,000 to 6,000 feet deep, and it is in States
like Ohio, States where we never did develop any natural gas, we
are developing it. But that has not reached us yet in terms of information.
Mr. PICKENS. Let me say that the largest gas field in the United
States, believe it or notI can see it out the window of my office.
If somebody had told me in the Fort Worth basin that Barnett
shale would become the largest gas field in America, I would have
bet you $100,000 to a cup of coffee and figured I would start drinking the coffee right away. [Laughter.]
But what you have is the largest gas field, and that happened
in 5 years. Now, the Hainesville, which is in northern Louisiana
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and East Texas, the Hainesville is five to six times the size of the
Barnett. And then you have the Marcellus in Appalachia, and it is
twice as large as the Barnett. And, you go to Fayetteville, you go
to Woodford, you go to these different shale basins, there are 21 of
them now, and the technology was developed by usnot me, but
America. We did it here. We developed the technology to extract
natural gas in large quantities. But on the price of that, though the
cost to develop that, you are talking about $7 an Mcf. Everything
is more expensive, is what it is. The big frac jobs go into that, but
we have that resource here.
I almost think it is divine intervention to have the gas show up
at such a critical time for this country, and to be able to use it as
a bridge to the next fuel in the next 20 or 30 years.
Chairman LIEBERMAN. Thanks, Senator Domenici.
Senator DOMENICI. Thank you, Mr. Chairman.
Chairman LIEBERMAN. How do you take your coffee? [Laughter.]
We will do a second round of 6 minutes.
I want to come to the price effect here. You mentioned it briefly
in response to one of Senator Domenicis questions, and I understand if we implemented the Pickens Plan and we moved to wind
and solar and natural gas, moved over and took over part of the
transportation sector, that we would achieve for America and for
our economy a significant reduction in the transfer of our wealth
abroad. That is a major accomplishment.
But let me come back to the consumer side of it because in a
way, what has finally, as I said in my opening statement, sounded
the alarm, Paul Revere-like, for the American people and even
their leaders in Washington is that the price of gasoline has gone
over $4 a gallon. I know it is hard to say this with any certainty,
but if the Pickens Plan were implemented totally, in 10 years what
do you imagine the effectI am not asking you for an exact penny
prediction here, but what would be the effect on the price of both
electricity and energy to power our transportation sector? Do you
think it would, generally speaking, go down a little, a lot, go up,
stay the same?
Mr. PICKENS. We are 10 years out now?
Chairman LIEBERMAN. Yes.
Mr. PICKENS. There is no question that if I am right on the peak
oil at 85 million barrels, in 10 years we are going to have less than
85 million barrels available to the world. Now, the question is:
What is the demand?
Mr. PICKENS. I have to think in 10 years the demand for oil
because the price now is going up. In 10 years, you are going to
have $300 a barrel oil. Maybe higher, I dont know. But this is reallyit is a tough question to look out 10 years on this one. But I
can tell you this: In 10 years, if we continue to drift like we are
drifting, you are going to be importing 80 percent of your oil. And
I promise you, it will be over $300 a barrel.
Chairman LIEBERMAN. I am just imagining the movement on the
commodity exchanges right now in response to what you just said.
Mr. PICKENS. Imagine the pain that you are going to
Chairman LIEBERMAN. Yes, but I presume that what you are saying is, if we adopted your plan, the prices, generally speaking, for
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the consumer of electricity and transportation would be less than
they would be if we do nothing.
Mr. PICKENS. They would be less if we do nothing?
Chairman LIEBERMAN. Than if we do nothing.
Mr. PICKENS. If we do nothing
Chairman LIEBERMAN. Go with the status quo.
Mr. PICKENS [continuing]. It is going to be over the top.
Mr. PICKENS. Say you go with my plan and we do get on wind
and we end up with, say, 400,000 megawatts in the central part
of the countrylets talk about everything now. You have revitalized rural America at this point. You have helped the economy at
this point. Now, what is the cost of your energy? I am guessing in
10 years you are going to be a long way down the track to an electric vehicle. But, remember, an electric vehicle does not do heavy
duty. So you are going to have to continue to use natural gas will
do heavy duty.
Chairman LIEBERMAN. Heavy duty, you mean the longer trips?
Mr. PICKENS. No. I am talking about 18-wheelers.
Chairman LIEBERMAN. Bigger vehicles, got you.
Mr. PICKENS. Heavy-duty vehicles.
Mr. PICKENS. So you have to look at the whole thing. I think that
your power costs in 10 years, you couldI am not sure you could
get them down. You could get them stabilized maybe. But at that
pointand you mentioned that there was only 1.5 percent on wind
now.
Mr. PICKENS. And that people are skeptical, you are not going to
get too much on there. And then it is intermittent. But all these
things are going to be solved. You are going to be able to store electricity. That is not too far in the future that we can store it. So
I would say cheaper.
Chairman LIEBERMAN. Cheaper is good enough. It certainly is
going to be a lot cheaper than it would otherwise be if we stuck
with the status quo.
Mr. PICKENS. If you stick with the status quoit will be much
cheaper than that.
Chairman LIEBERMAN. Much cheaper.
Mr. PICKENS. Yes.
Chairman LIEBERMAN. Let me draw a few observations from
what you have said this morning. The first point is an obvious one,
but around here it is worth saying the obvious. You gave an example of what happens to a barrel of oil after a few months. We import it, it is refined, and it is gone. And then we have to go out
and find another barrel.
The great thingI know you know this; that is why you are recommending itabout wind and solar is that they are always there,
the good Lord willing. So it is literally a renewable source. You
have already put the whole thing on a different plane.
The other thing I want to say is that I appreciate the extent to
which you have sketched a larger time horizon here. The Pickens
Plan, as you have described it generally publicly so far, is a 10-year
plan. Fair enough. And it is bold. And during that time, you have
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said develop any energy you possibly can here in North America,
stop importing oil. But you have now taken at least me this morning to a longer time horizon and a higher vision, and you have basically said that we need bridges to take us out to 2050 and maybe
beyond because we are moving to a time when we are going to have
just about a non-hydrocarbon-based energy system. It is going to be
all the renewables, electric, biofuel, and all the rest.
Am I hearing you right? Because I think that is an important vision, and maybe it will be helpful to some people, for instance,
right now who are concerned about offshore drilling. That is one
way to have a bridge to somewhere better for our economy and our
environment, getting to page 2.
Mr. PICKENS. Well, oil is the key to the conversation here as I
see it, and oil iswe had produced 1 trillion barrels of oil at the
turn of the century. It is kind of interesting because if you look at
King Hubberts extension, peak oil, and what would happen, the
guy was great, in my estimation. I am a disciple. I dont think
there are 2 trillion barrels of oil as I see it right now. Now, then
you say take the oil shale on the western slope and you take this
and that and everything. You can add up a bunch of stuff. When
you add it up, it is going to be very expensive oil. But in looking
at conventional oilI live and you live and everybody in this room
lives in the hydrocarbon era, and that era started with the automobile in 1900. Half of the oil that I see out there had been produced by the year 2000.
Now, we have another trillion barrels, and you say, well, that is
another hundred years. No. You started slow, ramped up, and now
the next trillion is going to go out of the system here within the
next 50 years.
So you are going to be forced to abandon the hydrocarbon era.
Can you imagine researchers 500 years out that come back and
look at us? They are going to say, That was a strange crowd. They
lived on oil as a fuel. And that is not going to even be used at that
point. Oil will be used and oil will still be around, but it will be
used for other purposes and will be very special and very expensive; that is the way it is going to turn out.
But, yes, we are going to have to make it to the next fuel. But
what is going to happen, if I am right on what I am trying to do,
I am going to awaken the American people, and they are going to
see what they are up against. When they walk out of a room, they
will turn off the lights. They do not do that now.
Chairman LIEBERMAN. That all helps, doesnt it?
Mr. PICKENS. It helps. Every bit of it helps. I grew up in a home
with a very frugal grandmother, and she said, Sonny, if you dont
turn the lights out, you are going to get the bill next month. And
I turned off the lights. It made sense to me. Why not? If I am going
to leave them on, I should pay for it.
So as it unfolds, we are going to become much more sensitive to
energy in this country, and that is good. We are going to conserve.
That is a big item. We are going to use different light bulbs. All
these things count. Every bit of it counts. And so, as you unfold
with this in mind, but if everybody understands, it is a lot easier
to accomplish.
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Chairman LIEBERMAN. Well, you have helped everybody understand. Incidentally, I had a very similar grandmother. [Laughter.]
Mr. PICKENS. Everybody must have.
Chairman LIEBERMAN. We are getting back to Grandmas wisdom
now.
Mr. PICKENS. Yes.
Chairman LIEBERMAN. Thank you. Senator Collins.
Mr. Pickens, you have made a very important point this morning
when you stated that the cost of implementing your plan pales by
comparison to continuing to export $700 billion year after year
after year, in some cases to countries that do not wish us well. But
do you have an estimate of what your plan would cost for achieving
20 percent of our electricity from wind?
Mr. PICKENS. I think I can give you a number. Let me see. You
can go from my 4,000 megawatts to get to the number, and 4,000
megawatts ramped up to 200,000 megawatts, which would be 20
percent, would costit would cost about $500 billion.
Now, you say, well, wait a minute, that does not include the
let me have that other map that was up there.
Senator COLLINS. Does that include the transmission line?
Mr. PICKENS. It does not, but I am going to give you that number
right here. If you can see the green lines on there, that is the Department of Energys grid. And that grid, I believe they projected
$70 to $100 billion. So now you are talking about a production tax
credit of $15 billion; you are talking about the cost of the 200,000
megawatts is $500 billion; and you are talking about a grid of $100
billion. It is interesting. You are starting to approach 1 years supply of oil that you are buying. But dont get the idea this replaces
that oil. It does not. It will only replace 38 percent.
So it is a beautiful payout if that was it, and we would all love
it if you said, OK, Boone, do it, and I come back in here in 3
years, and you said, Did you do it? So we got it. We did it, and
it is appreciated so much, you opening corridors. We did do it, and
we have reduced it by 38 percent. That would be beautiful.
I am not sure I am that good, but I have confidence, and I know
it has to be done.
Senator COLLINS. And you have talked about the importance of
the production tax credit. It seems to me that it is critical that
Congress stop letting the production tax credit expire. There is too
much uncertainty about when it is going to be extended. Do we
need a long-term commitment to the production tax credit to bring
your plan about?
Mr. PICKENS. That would, I think, solve the PTCs. Yes, the long
term would help. It would bring the manufacturers in because they
would see you are committed, and it would bring in the money to
develop. I have kind of broken new ground here, which I have credit doing that several times. Sometimes it did not make people very
happy, but, anyway, I have gone out and committed to the 4,000
megawatts, and Shell Oil Company has done 3,000 megawatts.
They are building a hundred miles southwest of me. So this is unfolding. And I think the biggest producer of wind energy now is
Warren Buffett with his operation in the Midwest.
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So, I mean, people believe in this. They know it will work. And
if you do give an extension of the production tax credit, I think it
would just accelerate the whole thing.
Senator COLLINS. And just to clarify the cost issue, obviously the
production tax credit is critical for this investment to take place.
But you are largely talking about private investment, correct?
Mr. PICKENS. I am talking about private investment. But if the
government wanted to build a grid, I mean, do it. But if they dont
want to do it, I think the money is there to do it privately. And
so it is kind of like either do it or get out of the way, but give us
the corridors to put it in, and it will be done.
You could put this on a very fast track if you wanted it to be on,
and we have got to do it. There is no question we have got to do
it. Are we going to do it fast, or is it going to be done over a long
period of time?
Senator COLLINS. You were just talking with Senator Lieberman,
quoting your grandmother on turning off the lights. How much of
the solution also should encompass energy conservation?
Mr. PICKENS. Oh, it has got to be on page 1, of course. We have
got to conserve. There is no question about that. We have been
very wasteful. But in our defense, we had cheap oil. We had cheap
oil. And as long as we had cheap oilI dont know whether you
have seen this guyI think it is Jim Kunstler. But his last name
is Kunstler, and it is not the guy that was the lawyer back years
ago that was in the Chicago 7 or whatever it was. It is not that
guy. But it is another person. I went over to Southern Methodist
University (SMU) and heard him the other night. He is worth
hearing. He is a generalist, but he tells us where we made the mistakes. We did not develop our rail system.
You look at the world today, we go places and we want to ride
on a 200-mile-an-hour train. We have to go to a foreign country to
do that. We dont have that. Why dont we have it? Because we had
cheap oil. It didnt make sense for us to. It was expensive. We were
going to subsidize it. And, it just didnt make sense for us. And he
has gotwe built too far away from our work. He says you are
going to move to your work now because of the cost of energy. And
it was really interesting because this was 2 years ago and the guy
nailed it. I listened to what he had to say. I watched what has happened, and he was right on.
Chairman LIEBERMAN. Thanks, Senator Collins. Senator Voinovich.
Senator VOINOVICH. Well, things have changed. We are in a global marketplace, and there are a lot of people who want what we
have, and so we are paying more for it.
We do rely on foreign oil too much, about 60 percent of our oil
coming from overseas. But one of the thingsand maybe you are
aware of thisis that we do send that money overseas, but some
of the same countries that we are buying oil from are also investing
in our debt. As a matter of fact, since 2001, 70 percent of the new
debt has been picked up by China, Japan, and the OPEC nations.
And I dont know about you, but I am worried about being at the
mercy of people for our oil, and then before you know it, we are
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at their mercy in terms of our debt. And if they try to put the
squeeze on us, we are in pretty bad shape.
Mr. PICKENS. I agree.
Senator VOINOVICH. I went to some war games at the National
Defense University, and they talked about the vulnerability that
we have. And some folks out at Stanford said that in the next 10
years there is a 80-percent chance that the cut-off of oil will bring
our economy to its knees. So we have a certain urgency that we
have right now to get on with this.
Mr. Pickens, from a public policy point of view, as I mentioned
to you, I did not have natural gas in the alternatives to oil. I had
biofuels, ethanol, we have got to get cellulosic, electric hybrids, we
are working on the batteries, fuel cellswe need hydrogen for the
fuel cellsand natural gas. And some have contended that in
terms of where we should put our money is in the area of electric
hybrids for the simple reason that you do not need to build an infrastructure for them. In other words, if you go to natural gas, you
have got to have places where people can get it. If you go to fuel
cells, you have got to go someplace where you can get the hydrogen. And if we go to the plug-ins, you just go home at night and
plug it into your electric socket.
What is your attitude towards that in terms of the infrastructure
necessary to get us to that alternative so we do not have to rely
so much on foreign oil?
Mr. PICKENS. This is the way I envision natural gas as a transportation fuel. We have 142,000 natural gas vehicles. There are 8
million in the world today. And you mandate the government
fleets. Other fleets are mandated also to do the same thing. You
have the Port of Los Angeles going to it very quickly now. All that
can be done withoutyou dont have to subsidize that. That can be
done between user and seller on that.
As far as your plugging in at home, of course, I thinklisten, I
am not knocking anything that happens in America. But the electric vehicle is not going to have very much range. But natural gas,
you can plug in at home, too. In fact, my car, my Honda GX, I can
plug in and my cost of fuel is $1.50 a gallon. I just buy the natural
gas right off of my gas line that fuels my home and heats my home
and cooks my food. So it is the same natural gas. I just have a
small compressor. It is called a fill and it fills my car.
So these things I think are minor. One that is pretty interesting
is Aubrey McClendon, CEO of Chesapeake Energy, and they are
the biggest, I think, natural gas producer now in the United States.
And Aubrey says, look, dont tax the oil companies, windfall profits
tax, but also tell them that we will sidestep the tax, but you build
the stations and take 25,000 filling stations and put an island for
natural gas in it. Four hundred thousand dollars is what it costs,
so $400,000 times 25,000 stations is $10 billion. And 25,000 stations, that will pretty well do it. But everything you
Senator VOINOVICH. You think that they would be more likely to
do that. We have tried to encourage these depots for ethanol, for
example, and there are a few more of them, but not a whole lot.
We have got all these E85 cars out there that cant go someplace
and get it. So you are thinking that you are going to be able to get
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the infrastructure to support natural gas a lot better than you
would for ethanol?
Mr. PICKENS. Well, the point on that is ethanol is a light-duty
fuel. Ethanol cannot work for heavy duty. But natural gas can. So
I am approaching it from natural gas would be heavy duty, first
and all, but when it comes to a passenger car, let it be up to the
individual on a passenger car. If they want natural gas, if they
want electric, if they want E80whatever they want, they have.
Dont mandate anything for them. Let them do it. They will the
cheapest way is what will probably happen. But just let that unfold
however it goes. But mandate to the fleets that they have got to
go to natural gas and American fuel. The movement of goods in
America, back to the same number again, 38 percent38 percent
of the fuel used in America is used to move goods. And that is with
trucks. So you have 38 percent comes from the wrong foreign countries. You have got 38 percent we get with natural gas, and that
moves the goods.
I think it works. If you said, can you assure me that it does, I
know some part of it does. Enough of it does that we will be helped.
Senator VOINOVICH. I have a theoryand I dont know whether
it is a good one or not, but I believe that if this Congress, hopefully
working with the next President or maybe even before that, would
make it clear to the world that we are going after every drop of
oil that is available to us, that we are going to do everything we
can, as I just mentioned, to have some type of a pilot project that
we are going to become less reliant on oil, and that includes your
proposal and a bunch of other proposals, that would send a real
message throughout the world that the United States finally is
dead serious about dealing with our energy and oil problem, and
that would have some impact on the price of oil that we are paying
for right now and in the future.
Mr. PICKENS. I was in the Middle East last year, and they dont
understand why we dont develop our resources, and they dont understand why we keep telling them to produce more. I mean, it is
a little bit confusing, the message that we send.
But think with me just a second. Lets say that had we developed
ANWR 20 years ago and it went on production 10 years ago, it
would have been halfway depleted now. So one thing about it, what
we have not done we still have. And so I think that is interesting.
Had we done it 20 years ago, the oil price would have been $15 a
barrel. Today it is close to $150 a barrel. So the asset that we have
not developed is worth 10 times as much as it was 20 years ago.
So that is pretty sobering, too, and I said I am ready to open it
up, get everything we can. I think we would look a lot better to the
world to develop our own resources than to say we are off limits
but you are not. I think that is a hard sell, and it is not received
well in the Middle East.
So, again, I know you are finishing up on me here. I think maybe
you have some timer. But what we have got to do is we have got
to do everything American. Whatever it is, we have got to do it and
get off the foreign oil.
Chairman LIEBERMAN. Thank you. Mr. Pickens, that is a good
note to end on. I really thank you for being here. You have been
not only educational but I think motivational, which is what we
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need to do. You are effectively putting a lifetime of experience in
this field to work for your country in some ways that I suppose
have surprised people. But you are not approaching it as an oil
manmaybe in some ways you are because of that experience. You
know the reality of the fact that we only have a limited amount
of oil potential left in the world. Your recommendations areactually, though they are visionary in one sense, they seem to me to
be very practical in another sense and very balanced. And I not
only thank you for this service to our country, but I hope you will
stick with it. Knowing you, I know you will stick with it because
I think in the end you have touched not only the nerve of a problem here, but also, if I may continue the anatomical metaphor, you
have touched an American muscle, which is the muscle that when
we see a problem, we have the ability, if we will it, to solve the
problem to our benefit. That is the spirit you bring to the table,
and may it reach the highest levels of our government and enable
us to get something done really soon. Thank you.
Mr. PICKENS. I appreciate very much your time and your interest
in what I have to say. But know this: I am first an American and
second an oil man.
Chairman LIEBERMAN. Amen. And you know what? If everybody
up here on Capitol Hill and elsewhere in Washington and in our
government approaches it that way, I am first an American and everything else I amDemocrat, Republican, whatever else I amis
behind that because this problem is an American problem, and we
can together devise an American solution. That is the road that you
have shown us here this morning.
Mr. PICKENS. And, I have announced I am nonpartisan in this
race. This issue is way above Democrat or Republican, and we need
to approach it that way. I think we will approach it that way. I
want to get it in this debate, and I want the American people to
know.
Chairman LIEBERMAN. Thank you, sir. God bless you and good
luck.
Mr. PICKENS. Thank you.
Chairman LIEBERMAN. We will now call the second panel of witnesses: Dr. Gal Luft, Geoffrey Anderson, and Dr. Habib Dagher.
Gentlemen, welcome to the table, and thank you for being here.
That is a tough act to follow, but you have all been active and leaders in this area. As I said at the outset, I think you each have
made some proposals that are bold as well and can inform what we
hope to do here in Washington. So we welcome you. We thank you
for being here. And, Dr. Luft, please proceed with your testimony.
TESTIMONY OF GAL LUFT, PH.D.,1 EXECUTIVE DIRECTOR, INSTITUTE FOR THE ANALYSIS OF GLOBAL SECURITY, AND
CO-FOUNDER, SET AMERICA FREE COALITION
Mr. LUFT. Thank you, Mr. Chairman, Senator Collins, and Senator Voinovich. I was not planning on responding to the Pickens
Plan, but I am afraid that in light of what I have heard today, I
would like to make some comments on the plan because I think
1 The
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prepared statement of Mr. Luft appears in the Appendix on page 58.
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that there are some serious mischaracterizations that we heard
here today.
The most important one is that when we talk about national security, we need to realize that 63 percent of the worlds natural gas
reserves are in the hands of Russia, Iran, Qatar, Saudi Arabia, and
United Arab Emirates. These countries are now in the process of
developing and discussing the establishment of a natural gas cartel. So shifting our transportation sector from oil to natural gas is
like jumping from the frying pan into the fire. This is a spectacularly bad idea for us to shift our transportation sector from one resource that we do not have to another that we do not have. And
we only have 3 percent of the world reserves of natural gas. The
situation is very similar to our situation with regards to oil. So we
do not want to give at this point in time a gift to Iran.
Second, one good thing that happened after the 1973 embargo is
that we weaned the power sector from oil. We no longer produce
electricity from oil, unless you live in Hawaii; and, therefore, solar,
wind, nuclear, all these sources of energy have nothing to do with
our oil dependence. Unless we have serious deployment of electric
cars, these sources of energy are irrelevant.
Now, Mr. Pickens says that we take 20 percent of our natural
gas and replace it with wind. I am sorry, but our energy system
is not a Lego. You do not take one cube and replace it with another. If we increase wind production, which is an excellent idea
excellent idea, we should do itnothing guarantees that it will displace natural gas. It could displace coal. It could displace solar. It
could displace geothermal. How do you control what the wind will
displace.
Just food for thought, and I want to move into the things I really
want to talk about and start by agreeing with Mr. Pickens that we
have a serious problem. Just to remind the Committee that 10
years ago, Osama bin Laden predicted that oil would be $144 a
barrel. Everybody laughed at him. Oil was only $12 a barrel at the
time. He was right, and as a result, we are exporting hundreds of
billions of dollars. This is the first year that we actually are going
to pay foreign countries more than we pay our own military to protect us.
So in order to understand what should be the road to energy security, we must first understand why we are where we are. There
are many reasons why we have the oil crisis now. Of course, strong
demand in developing Asia, speculation, geological decline, geopolitical risk, all of them have contributed their share. But, in my
view, by far the main culprit is OPECs reluctance to ramp up production. This cartel owns 78 percent of the worlds proven reserves,
and it produces about 40 percent of its oil production.
If you refer to page 2 of my testimony, you will see that in 1973,
OPEC produced 30 million barrels of oil every day. Today, OPEC
produces 32 million barrels of oil every day. In other words, OPEC
today produces almost as much oil as it did 35 years ago. Even
though the world economy almost doubled, non-OPEC production
almost doubled, OPEC included last year two new membersAngola and Ecuadorand they still produce almost the same amount
of oil as they did 35 years ago. This is a scandalous practice, and
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we are stepping on our toes not telling OPEC that they are the
main culprit behind everything that is happening now.
Clearly, it is not in OPECs interest to provide relief to the struggling global economy. The cartel enjoys a vertical monopoly of the
world vehicle fuel supply, and it is currently at the receiving end
of the biggest transfer of wealth in human history.
Our energy security problem stems from the fact that our transportation sector is dominated by petroleum. And while being in a
hole, we continue to dig. We put on the road annually 16 million
new cars, almost all of them gasoline only, each with an average
street life of 16.8 years. A Senator elected in 2008 will witness the
introduction of 102 million gasoline-only cars during his or her 6year term.
The source of our predicament is that we have a cartel married
to a monopoly, and if we want to solve our energy security problem,
we must break both the cartel and oils monopoly in the transportation sector. This means that neither efforts to expand petroleum
supply nor those to crimp petroleum demand through increased
Corporate Average Economy Fuel (CAFE) standards will be enough
to reduce Americas strategic vulnerability. Such non-transformational policies at best buy us a few more years of complacency, while ensuring a much worse dependence down the road
when Americas conventional oil reserves are even more depleted.
To those who believe that increased domestic drilling is the solution, I propose to take a look at page 4 of my testimony, where you
see OPECs graph that clearly shows that when we drill more, they
drill less. That is the history of the past 35 years.
Rather than focusing on solutions that perpetuate the petroleum
standard, we should invest in transformational policies that aim to
diminish the strategic importance of oil by breaking its monopoly
in transportation. We should do to oil what was once done to salt.
Throughout history, salt was used to preserve food, enabling armies to march across continents. Those who owned the precious
mineral acquired wealth and international prestige. Those who did
not had to either pay for it or fight for it, just like with oil today.
Salt-rich domains like Orissa, Tortuga, Boavista, and Turk Island
enjoyed great strategic importance equivalent to that enjoyed today
by city states like Dubai and Abu Dhabi. All this ended with the
invention of canning and refrigeration. Salt is no longer a strategic
commodity shaping global trends. It is just another commodity.
The first thing we must do is to turn oil into salt and to ensure
that the cars rolling onto Americas roads are platforms on which
fuels can compete. For the cost of $100 extra, automakers can
make virtually any car a flex-fuel vehicle, capable of running on
any combination of gasoline and a variety of alcohols such as ethanol and methanol, made from a variety of feedstocks.
Now, we are all familiar with ethanol, and everybody has an
opinion about it. But I would like to talk here about another alcohol that China is actually deploying at the moment, and that is
methanol. Methanol today is Chinas alternative fuel of choice. Several provinces in China are already blending their gasoline with
methanol, and scores of methanol plants are currently under construction there. The Chinese auto industry has already begun producing flex-fuel models that can run on methanol. Methanol packs
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less energy per gallon and is more corrosive than ethanol. But it
is cheaper and far easier to produce in bulk. While ethanol can be
made only from agricultural products and biomass, such as corn
and sugar cane, methanol can be made from agricultural waste,
coal, industrial garbage, natural gas, and even carbon dioxide. Yes,
in my view, this is perhaps the most promising way of dealing with
our carbon dioxide problem, is turning it into methanol.
Electricity is key to the solution. As I said before, we do not
produce electricity from oil, but if we shift to electricity as a transportation fuel through massive deployment of electric cars and
plug-in hybrids, that will make a huge difference. A plug-in hybrid
car does about 100 miles per gallon of gasoline. If this plug-in hybrid is also a flex-fuel car, you add the $100 feature, and you get
500 miles per gallon of gasoline. Not 500 miles per gallon, but 500
miles per gallon of gasoline. A nationwide deployment of flex-fuel
cars, plug-in hybrids, and other alternative fuels can take place
within two decades. But such a transformation will not occur by
itself.
On the grounds of national security, Congress should take swift
action to require that new vehicles sold in the United States are
flex-fuel vehicles through an Open Fuel Standard. Such an Open
Fuel Standard would level the playing field and promote free competition among diverse energy suppliers. I am delighted that shortly after this hearing, Open Fuel Standard legislation will be introduced by a bipartisan group of Senators, which includes both the
Chairman and the Ranking Member. This is an important piece of
legislation and, in my view, the best way, the best mechanism to
break OPECs monopoly in the transportation sector. By making
America a flex-fuel vehicle market, we will effectively make flexfuel the international standard as all foreign automakers would be
impelled to convert their lines over as well.
Around the world gasoline would be forced to compete at the
pump against alcohol fuels made from any number of sources, including not only commercial crops like corn and sugar, but also biomass, coal, natural gas, and recycled urban trash.
I realize that many are opposed to any government interference
in the market, even if it only means adding $100 to the cost of a
new car. Indeed, in a perfect world, government would not have to
do things like that and intervene in the energy market, but in a
time of war, the United States is taking an unacceptable risk by
leaving the problem to be solved by the invisible hand. Choosing
not to embrace an Open Fuel Standard is choosing to preserve oils
monopoly in the transportation sector and, with it, OPECs growing
stranglehold over the global economy and in essence guaranteeing
continuous economic and strategic decline.
Chairman LIEBERMAN. Thanks, Dr. Luft. A lot for us to think
about and do.
Geoffrey Anderson is President and Chief Executive Officer of
Smart Growth America. It is good to see you again. We welcome
your testimony now.
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TESTIMONY OF GEOFFREY ANDERSON,1 PRESIDENT AND
CHIEF EXECUTIVE OFFICER, SMART GROWTH AMERICA
Mr. ANDERSON. Thank you, Mr. Chairman, Senator Collins, and

Senator Voinovich, for having a hearing on such an important
topic.
I think a lot of the focus to this point has rightly been on the
transportation sector and on what we can do with respect to supply. But I think we need to think about this charge in a broader
sense, and it is really about reducing dependence on oil, reducing
climate emissions, ensuring that we actually help consumers to
save money at the pump, and helping the economy at the same
time. And so I think when we start to think about that, we also
need to think about the demand side and some of the conservation
things that T. Boone Pickens began to talk about. And that is
where Smart Growth comes in.
I think the real opportunity out there right now is to allow people to drive less and to be able to do more. And we can do that by
essentially building more walkable and more complete communities. A lot of the growth in oil use has been as a result of spreadout, driveable landscapes that really do not give you any options
besides driving. And there is a real move now to create more
walkable communities where homes are closer to jobs, shops are
closer to work, and all of these things can be reached either on foot,
by bike, with transit, or by shorter car trips.
I want to talk a little bit about a project called Atlantic Station
because I think it does a lot to illustrate what we are talking about
here, and the potential. It is a $4 billion redevelopment of a
brownfield site in midtown Atlanta, basically done entirely for economic reasons. The developer wanted to make money. He thought
there was a market out there and put in basically 10 million
square feet of commercial, retail, office, 3,000 to 5,000 units of
housing very close to transit, all in a walkable neighborhood. When
the EPA calculated what the emissions impacts would be, the calculations were that residents would drive approximately 27 miles
a day compared to the average Atlantan who drives around 34
miles. Recent studies of that neighborhood, in fact, show that people are now driving about 9 miles per day just because their car
trips are shorter, the places they want to go are in closer proximity
to the places they live, and it also obviously has climate implications as well.
The total savings on a yearly basis run in the neighborhood of
around 50 million miles of travel every year just from that development compared to what the driving characteristics would have
been in the event that it was built in a more normal Atlanta pattern.
If you look at what that might translate into over a period of
time or over a larger scale, we can expectand this is from a publication done by the Urban Land Institute called Growing Cooler
that each increment of more compact, walkable development leads
to about a 20- to 40-percent reduction in vehicle miles of travel. If
you project that out over the time frame to 2030, if you shift a significant share of new growth to compact patterns, you can actually
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save 85 million metric tons of carbon dioxide in 2030. It is equal
to about a 28-percent increase in CAFE standards and roughly half
the savings of the Senates 35-mile-per-gallon CAFE bill. So it can
be significant.
The cost savings were calculated in the $24 billion range for consumers in the year 2030 or cumulative savings of around $250 billion. And by 2050, you could expect a 7 to 10 percent total reduction in carbon dioxide emissions accompanying driving and oil consumption really as a result of shifting some portion of our new
growth over the smarter development patterns.
A Natural Resources Defense Council (NRDC) analysis looked at
just what would happen if you looked at a 10-percent shift of new
growth to more walkable patterns and found that you could save
around 4.95 billion gallons of gasoline, 118 million barrels of oil,
and roughly $220 billion worth of household expenses. That was,
of course, calculated in 2004, so I think the household expense
number would be a little higher today.
If those savings are available at scale, what is the likelihood of
getting there, and does the market want to go there? And what our
research indicates and research from others in the real estate field
indicates is that about a third of the market is interested in having
more walkable communities, more compact communities. The fact
is that for the last 50 years, we have essentially built drive-only
communities, so the two-thirds of the market that really is interested in that product is well provided for. An analysis by Chris
Nelson at Metropolitan Institute at Virginia Tech indicates that, in
fact, from the perspective of market supply, we probably already
have the demand met that will occur in 2025 for large-lot singlefamily houses. The unmet demand is really in the area of smaller
single-family houses on smaller lots, condominiums, apartments,
and so forth. And there are a couple trends driving this. One is
what they call in Minnesotaor at least that is where I heard it
the silver tsunami, the changing demographics where households
are very different than they were even 20 or 30 years ago.
In 1960, roughly half of American households had children. In
2025, that is expected to be around 28 percent, with around 28 percent of households being single individuals. So the market is definitely changing, and that is why some of the market demands are
changing and why the supply is so out of balance right now with
the demand and the projected demand.
It is true also in the retail sector that commercial products are
changing as well. We have seen a vast drop-off in the big-box mall
out in the middle of a parking lot, and a great increase of basically
walkable, more town-center-style retail. So the market is really
moving in this direction, and there is a big opportunity for the Federal Government to basically enable some of this. It is important
for two reasons. One, with the market moving in this direction, I
think there is opportunity for the private sector to really take advantage of that market demand and build the communities that
will help consumers to be able to drive less and accomplish their
daily needs. But it is often the hardest thing to do from a market
perspective. The Atlantic Station development took years and years
to get through regulatory barriers, to get through brownfield barriers, to address market institutional barriers of finance. And so
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from the development perspective, it is often the hardest product
to build. It is zoning regulations at the local level. It is how we
fund infrastructure at the State and national level, and a variety
of other things.
So the Federal Government has the opportunity essentially now
to promote what the market is asking for in a way that will help
to reduce the vehicle miles of travel that result from those developments. And I think there are a couple of actions that have been
helpful in the past. The brownfields law, the clean-up programs,
and the tax incentives for brownfields redevelopment have had a
big impact, and I think a lot more could be done there. The historic
preservation tax credits help to drive development to more infield
locations where the market demand wants to move. The investments in transit, biking, and walking facilities are important public
sector investments where the private sector responds to those by
building communities that match those kinds of investments.
In terms of the existing Federal legislation right now, I think obviously the climate legislation included some measures for funding
transit and walkable communities, but I think that can be greatly
increased. The new transportation bill that the Congress will be
visiting probably in 2009 or 2010 is going to have real opportunities to invest in world-class transit, pedestrian, and bicycle infrastructure to make better connections between land use and to
incentivize the building of more walkable neighborhoods that give
people choices about how they get around, give them the opportunity to avoid high gas prices, and the opportunity to reinvest in
our existing communities and infrastructure, and then to connect
those communities, many of which are connected by short plane
flights or by long-distance auto commutes, instead connecting them
by rail and maintaining the economic synergies that currently exist
between those places.
I will wrap up there, and thank you for the opportunity to speak
with you today.
Chairman LIEBERMAN. Thanks very much, Mr. Anderson. Very
interesting testimony, and I look forward to asking you a few questions.
Dr. Dagher, it is a pleasure to have you here. Dr. Dagher is a
professor of civil and structural engineering at the University of
Maine, which we on this Committee know as one of Americas great
public universities, and director of the universitys Advanced Structures and Composites Laboratory.
We thank you for being here and invite your testimony now.
TESTIMONY OF HABIB J. DAGHER, PH.D.,1 DIRECTOR, ADVANCED STRUCTURES AND COMPOSITES LABORATORY, UNIVERSITY OF MAINE
Mr. DAGHER. Thank you, Chairman Lieberman and Ranking

Member Collins. Thanks for inviting me, Senator Collins, to be
here today.
I would like to start this testimony by acknowledging the inspiring role as a system architect, my colleague, George Hart, as well
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as Matt Simmons, who is well known for alerting our country to
peak oil and peak oil issues.
You have heard about the financial, geopolitical, and security dimensions of our energy crisis. I would like to put a human face on
this crisis. Maine will likely be the first State to experience a heating state of emergency. I say that with confidence because we are
living it right now, and Senator Collins has been very concerned
about our future.
Some statistics about Maine. Eighty percent of Maine families
use heating oil to heat our homes, and heating oil costs are tracking those of crude. Next winters heating oil costs will be $5 a gallon if you try to lock it today. That means the average Maine family will pay $5,000 a year just to heat their home next winter. In
2020, if we do not do anything, if we do not do the Pickens Plan
or any other plan, those numbers will be $10,000 a year just to
heat our homes.
If you look at Chart 4 in the testimony, it shows you in red how
much of the Maine family budget actually goes to energy. Ten
years ago, less than 5 percent of the Maine family budget went to
energy. Today, close to 25 percent, a quarter of the Maine family
budget, goes to paying for energy. That is transportation, that is
heating, that is electrical power. In 10 years, if we do not make any
changes, about half of the Maine family budget would go to energy.
Clearly, this is not sustainable. The State of Maine pays close to
$5 billion a year in energy costs, and we only have a little over a
million people.
So what is the solution? You have heard about T. Boone Pickens
wonderful plan, but we sit in the corner of the country, and we are
not very close to the wind belt that runs up and down from Kansas
to Texas. So what do we do? And we have actually been working
very hard on solutions for our State.
If you look at page 4 of the testimony, according to the National
Renewable Energy Lab (NREL), the offshore wind potential, the
offshore wind energy, the energy that blows over the oceans, if you
wish, is a tremendous natural resource, a resource we did not really understand until recently. The offshore wind is about equal to
the U.S. electric production today.
If you look at other ocean energy resources, we have heard about
tidal energy. Tidal energy and wave energy are actually a fraction,
a very small fraction of the offshore wind resource.
If you take a look at the second sketch on the right-hand side,
it shows another very powerful point about the offshore wind resource. It sits very close where the need is. If you look at the U.S.
population densities shown in dark red, and if you look at the offshore wind resource, it is where the people are. So we dont need
to build a large transportation infrastructure to get the wind energy to the people where they need it. That is one major advantage
of that resource.
Maine, of course, has a tremendous offshore wind resource. The
Gulf of Maine has been called the Saudi Arabia of wind in many
ways. There is over 100 gigawatts of wind power in the Gulf of
Maine. That is about 10 percent of the total U.S. electric power
production.
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So how do we go get it? One major advantage of that resource,
it is also a seasonal resource. It is actually high when we need it.
We need to heat ourselves in the State of Maine and in the Northeast, and the heating costs are our biggest issues. But in the wintertime, the wind blows twice as fast as it does in the summertime,
and the power generated from the wind is the cube of the wind
speed. So in the wintertime, per month, we can generate 8 times
as much power as we do in the summertime. You can think of wind
off the coast of Maine as a seasonal crop right now that can help
us heat the State of Maine.
I would like to talk more about what we are proposing for the
Gulf of Maine and how it fits in with T. Boone Pickens vision. Actually, it fits in very well with his vision. If you look at the lefthand drawing here that we have, Mr. Pickens essentially is talking
about the U.S. wind corridor you see up and down from Kansas
down to Texas. That is a wonderful resource that can generate 200
to 400 gigawatts, depending on how much of it you think you could
use. We are talking about adding three more wind regions to the
Pickens Plan, and the three wind regions are the Atlantic Ocean
wind region that can generate between 120 and 240 gigawatts, and
then we have the Pacific Ocean wind corridor that can generate 75
to 150 gigawatts, and then the Great Lakes corridor that generates
110 to 220 gigawatts. So rather than go to 20 percent, as Mr. Pickens is saying, maybe we can go to 40 percent with this additional
resource, and it is very close to where people actually need it.
The other major advantage of having this distributed corridor is
the fact that the geography allows averaging of the uncertainty of
the winds and the intermittency of the winds, so you have less
intermittency as the weather moves from the west to the east.
There is always some bad weather somewhere. You are always
going to pick up some wind. And that reduces the uncertainty, if
you wish, in the wind profiles.
But it is more than just generating wind. It is how to use the
wind, how to actually take that wind and make the best use out
of that electricity. We are proposing very efficient ways to store and
utilize this electricity that have profound effects on efficiencies. We
are talking about efficiencies on the order of two to four that could
be achieved by using essentially heat pumpsheat pumps, whether
they are ground loop heat pumpsas you know, the temperature
below the Earth, 10 feet below the Earth stays close to 45 degrees
Fahrenheit. It is a wonderful place to go get some calories and
bring them into the house. You do not have to generate those calories. They are there. And that is what we are trying to do here.
We are trying to use the electricity we generate from wind and
bring it into the house, shift it into the house, rather than generate
it using electricity. And that can get you, depending on the time
of the year and the temperature outside two to four times the benefits.
Another major advantage is storage. If you look at plug-in electric vehicleswe have all been talking about them, but one thing
we have not talked about is that the majority of our energy usage
actually is in transportation. Fifty percent of the energy budget for
the family in Maine is in transportation; 40 percent is in heating.
So if we can cut that transportation part out by using electric plug-
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in vehicles, and use them as a distributed battery that can store
energy at nightwhen you go at night and you plug in your car,
the wind can be high, it can be low, you can still charge your car.
And then you can use it the next day. So it is a wonderful distributed battery that could be used to even out the intermittency of the
wind.
Are we the only ones who are doing this? Well, if we look across
the Atlantic, unfortunately the Europeans are way ahead of us.
Again, they have been scratching their heads long before we have.
They have been paying $7, $8 a gallon long before we have. So they
are looking at solutions.
In Europe, there are plans by 2030 to generate 150 gigawatts of
offshore wind capacity for Europe150 gigawatts, that is number
16 on the chart. They are calling wind energy and offshore wind
the Third Industrial Revolution. They have created over 300,000
jobs in Europe in wind and wind-related businesses. We can do the
same. We can do the same by driving in the direction of renewables
as well.
What is it going to take to go offshore? And if you look at going
offshore, it is almost like the reverse Darwinian motion here. We
are actually going from land with wind technology over to offshore.
And what is it going to require? It is going to require developing
floating platforms because the Continental Shelf in the United
States drops off very quickly. Ninety percent of that wonderful
wind resource sits far offshore and in deep water. So we need to
develop these tension-leg platform type solutions, and you can see
some of these structures on page 6.
So we need a research and developement (R&D) program to be
able to transfer some of that technology from Europe to the United
States and also transfer decades of deepwater offshore drilling experience into the wind energy market.
We have a detailed $100 million R&D plan that we are proposing
that is in your sheets, but I would like to summarize here very
quickly. Offshore wind is a wonderful U.S. natural resource. It sits
closer to where people need it. If you look at where the population
centers are, it is very close to them. We do not need to build large
transmissions to get to those locations.
We need your support to create a national Offshore Wind Energy
Initiative, a Manhattan Project for offshore wind energy that can
double the Pickens Plan. We are ready to lead that in the State of
Maine because, you know what? We are in the eye of the heating
hurricane. That is where Maine is right now. We are prepared to
lead the Nation already if a national program is created.
The other thing we would like your help on is to develop the financial incentives, the PTCs, make sure those stay in place, and
also develop a policy framework to allow the offshore wind developments to take place. Thank you very much.
Chairman LIEBERMAN. Thanks very much, Dr. Dagher. That was
actually very exciting testimony. I appreciate it very much.
We will do a 6-minute round. There is a vote that has gone off
on the Senate floor. I think Senator Collins will go first and then
hopefully be back before long, and then we will go from there.
Dr. Luft, let me take advantage of your presence here to just ask
you to say a bit more about the Open Fuel Standard Actwhich
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Senator Collins and I, with Senator Brownback and Senator Salazar, are going to announce the introduction of at noon todayand
explain specifically how its provisions would promote the fuel diversity that you and I and others believe is necessary to break the
stranglehold that oil has on our economy.
Mr. LUFT. Basically what the bill does, it requires that 50 percent of new cars soldnot produced, soldin the United States
must be flex fuel by 2012. That is the first benchmark. And the 50percent figure actually comes from the auto industry itself. In multiple meetings of the Big Three with both congressional leadership
and the President, they themselves said that they are willing to
make 50 percent of new cars flex fuel by 2012. So the bill basically
takes their numbers and codifies it, makes it into a law.
It has a second benchmark of 80 percent by 2015, but the important thing is that we have the 50-percent commitment today and
that the fuel flexibility is not only for ethanol, but we have also
methanol and other alcohols that can play a role in the transportation sector, and today they are excluded.
Now, let me explain. An E85 car, the one that is made today by
Detroit, can only run on ethanol. It cannot run on methanol because methanol is slightly more corrosive. If the cars are what we
call GEM flex fuelgasoline, ethanol, methanolthat includes all
of the alcohols, and that means that you have much more fuel
choice, and also you can introduce other feedstocks that can go into
alcohol production, like coal, natural gas, garbage, and carbon dioxide, as I said before. So you have a much more scalable solution,
and that is a good way to introduce fuel choice in the transportation sector because today we do not have choice. It is gasoline,
gasoline, and gasoline. That is all that plays.
We also believe that within 3 years of the introduction of the
Open Fuel Standard, we will have almost 50 million flex-fuel cars
on the road. At this point it makes perfect sense for the distribution system to follow because today gas station owners dont want
to convert their pumps because there are not enough cars on the
road. But once every fourth or fifth car on the road is a flex-fuel
and we have continuously high oil prices, it makes perfect sense for
them to do it.
Chairman LIEBERMAN. Where does electricity fit in then, electricity-driven cars?
Mr. LUFT. On the electricity front, the energy bill that was
passed in 2007 had some terrific provisions for plug-in hybrids. The
only thing that is missing now are the tax incentives, and that is
part of the tax package that hopefully will be resolved one way or
another. But I think that we have made significant progress on
electrification of transportation, and now what we need to do is to
deal with the liquid fuel market by introducing this Open Fuel
Standard.
Chairman LIEBERMAN. Just for the record, can a car be both flexfuel and have the option of being powered by a battery?
Mr. LUFT. It should. Once you have a plug-in hybrid car, making
it also flex-fuel just means adding $100 to the car. All you need is
a different fuel line of corrosion-resistant materials that enable the
car to run also on alcohols. It is not one or the other. It should be
both.
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Chairman LIEBERMAN. Should our aim be to get to 100 percent
by a date certain?
Mr. LUFT. Well, I think that it would be nice if we had 100 percent. I think 100 percent could be difficult. But I think if we have
the 50 percent going to 80 percent, then you certainly create a market, and that will move the whole system forward.
Chairman LIEBERMAN. OK. Dr. Dagher, you mentioned that Europe is ahead of us in the development of offshore wind energy. Tell
the Committee a little bit more about how you would characterize
the maturity of offshore wind here in the United States. How much
electricity is now being produced by offshore wind?
Mr. DAGHER. In the U.S.
Chairman LIEBERMAN. Yes, that is what I meant.
Mr. DAGHER [continuing]. At this particular time, there is no production of electricity.
Chairman LIEBERMAN. Really it is zero.
Mr. DAGHER. It is zero at this point.
Chairman LIEBERMAN. So the notorious wind farm off of Nantucket, was it, that nevernothing has happened there.
Mr. DAGHER. Certainly it has not materialized yet. There are
hopes that it would materialize.
Senator CARPER. Would the Chairman yield?
Chairman LIEBERMAN. Please.
Senator CARPER. Twelve miles off the coast of Rehoboth Beach,
Delaware, the wind farm is coming.
Chairman LIEBERMAN. It is coming?
Senator CARPER. Yes, we have worked it out.
Chairman LIEBERMAN. Really?
Senator CARPER. And we are inviting Maryland and maybe New
Jersey to consider joining us.
Chairman LIEBERMAN. That is great.
Senator CARPER. We are excited.
Chairman LIEBERMAN. Thank you, Senator Carper. Good news.
Mr. DAGHER. Yes.
Chairman LIEBERMAN. What is the state of the technology? In
other words, is there a lot of R&D that still has to be done to make
this work, particularly further offshore?
Mr. DAGHER. That is correct. If you look at further offshore right
now, there are no commercial installations of further offshore wind
energy, even though 90 percent, if you wish, of the U.S. offshore
wind energy is in deep water. So, yes, there are major R&D efforts
needed. There are currently a number of companies worldwide that
are pursuing the effort. StatoilHydro has recently invested $80 million in their first demonstration structure.
What needs to be done? There needs to be a public-private effort,
government and industry working together to go in that direction.
However, we believe in the next 5 years to 7 years, if the R&D dollars are in place, we should be able to go deep offshore.
Chairman LIEBERMAN. Thanks. My time is up, and also my time
will be up over there if I do not move. So I am going to temporarily
recess the hearing. Dont go very far because I expect Senator Collins will come back, and she will begin again and then I will return.
Thank you.
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[Recess.]
Senator COLLINS [presiding]. The Committee will come back to
order. In the Chairmans absence, I am going to proceed with his
permission to my questioning, and, Dr. Dagher, we will start with
you.
First let me say to the entire panel that your testimony is very
helpful to us. When I look at all the testimony we have heard
today, I cannot help but think that all of the above are part of the
answer, that it is not just one piece. We have to have a very comprehensive approach.
Dr. Dagher, as you know, it has been difficult to do siting of wind
energy, both on land and in the case of Massachusetts, offshore as
well. Therefore, I want to clarify a point about the plan that you
have presented.
As I understand it, these turbines would not be visible from the
shore. Is that accurate?
Mr. DAGHER. That is accurate, Senator Collins, yes.
Senator COLLINS. So how far offshore are you talking about locating these turbines?
Mr. DAGHER. We are looking at 20-miles-plus offshore, which because of the curvature of the Earth, would make these invisible,
and specifically to address the issues that you have been concerned
about is how do we get over the Nantucket problem. It is really
what we call out of sight, out of mind turbines, in many ways.
A lot of people do not want to look at these turbines from their
land onshore, and by getting them out where they are 20 miles off,
we avoid some of these issues. But also we pick up the wonderful
wind resource that happens to be at that distance.
Senator COLLINS. I am very excited about T. Boone Pickens plan,
but I do not think it is the whole answer. It seems to me that the
plan that you have outlined using offshore wind and geothermal
are really complementary to his plan. Is that your assessment?
Mr. DAGHER. That is correct, Senator Collins, yes. T. Boone Pickens plan utilizes the wind corridor from the Dakotas down to
Texas to generate anywhere from 200 to 400 gigawatts, depending
on how much you want to generate. But that leaves us out, if you
wish, on the east coast and on the west coast unless we build very
expensive transmission systems. The majority of the U.S. population, actually close to 28 States, utilize more than 70 percent of
the Earths electricity around the coasts of the United States. So
the major demand for electricity is around the perimeter of the
country.
Senator COLLINS. So, actually, your plan helps to provide increased access to renewable electricity closer to the population centers. The Pickens Plan goes through the very center of the United
States, but as I understand it, electricity losesthere are line
losses the further away from the source of electricity. Is that accurate?
Mr. DAGHER. That is accurate.
Senator COLLINS. You are the engineer here.
Mr. DAGHER. That is correct. Yes, there are line losses that take
place, and, of course, there are transmission costs as well that go
along with that. And building transmission lines in heavily populated areas is very expensive as well from a permitting viewpoint
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and so forth. And if you look at the population centers on the east
coast, for example, the Midatlantic States and up in the New England area, it would be very costly to build transmission lines in
those areas. Therefore, siting some of this renewable resource offshore allows us to get directly to where the population centers are
and avoid the congestion.
Dr. Luft, I want to go to your point about the transportation sector because, clearly, converting cars has to be an essential component of our energy security policy. And I would be interested in
your concerns about Mr. Pickens plan to use natural gas. What
would you think of the Federal Government having a mandate on
itself to say that the Federal fleet has to be comprised of flex-fuel
cars, plug-in hybrids, as well as natural gas-fueled cars by a certain date? Let me tell you why I am asking you this question.
Mr. Pickens made the point that in the United States we have
only a very small percentage of our vehicles using natural gas.
Well, you could go beyond natural gas and say we have a very
small percentage of our vehicles that are not dependent on gasoline
more broadly. If the Federal Government helped to lead the way,
would it help spur the infrastructure that we need to fuel these alternative vehicles? And would it help encourage manufacturers to
also meet this demand?
Mr. LUFT. Well, first of all, the Federal Government has already
committed itself years ago, and the problem today is with compliance rather than commitment. So lets first of all focus on compliance of rules and regulations that have already been introduced
years ago and make sure that Federal agencies are actually in full
compliance.
I think that there are certain limitations to certain Federal agencies realistically that need access to the fuel if they do not have infrastructure, which is why I think the lowest-hanging fruit is the
flex-fuel because a flex-fuel mandate only adds a small feature to
the car. It is very cheap. It should be, across the board, not only
added to the Federal fleet but to every car sold in America.
Quite frankly, one of the reasons, I think, that methanol should
be in the picture, if Mr. Pickens is so interested in natural gas, you
should know that almost all of our methanol today is produced
from natural gas. So that is a good way to use indirectly natural
gas in flex-fuel cars by using methanol, which can be made from
other things but also from natural gas. And that is, again, this
$100 feature that makes the car capable of running on those fuels.
That is the very low-hanging fruit, and thank you for being part
of it.
Senator COLLINS. In your testimony, you had a wonderful comparison that the Federal Government is subsidizing converter
boxes so that people do not lose the signal on their television sets
come next year when the conversion to digital takes place. It is
ironic that we do not do more to help people convert their automobiles to flex-fuels when an investment of just $100 per vehicle
could make such a difference in the energy consumption of our
country. You did not use that analogy in your oral presentation
today, so I just wanted to bring it up for the record since, arguably,
helping to reduce our dependence on foreign oil is more important
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than helping to ensure that people can still watch televisionor
some would argue, anyway. So I thought that was a good point.
Mr. Anderson, your emphasis on community planning and the
design of our housing and our downtowns is very interesting, and
I also think it is part of the solution. However, if you come from
a large rural State like mine, it seems somewhat less relevant than
it would to a more congested urban area.
What can a large rural State learn from your findings?
Mr. ANDERSON. I think actually there is a lot of application. Before this position, I was at the Environmental Protection Agency
actually running the Smart Growth Program there, and a lot of the
technical assistance we did there was in more rural locationsLaconia, New Hampshire; Pamlico, North Carolina; Cheyenne, Wyoming; Victor and Driggs, Idaho. A lot of small towns really are
looking at how they are growing and asking the questionI mean,
in many ways it is the suburban and rural areas that are most vulnerable to rising gas prices because of the lack of options from
being able to drive. And the most significant change we have seen,
I think, in the short term has been increases in transit ridership.
We are seeing transit at 50-year high. We have seen actual drops
in vehicle miles of travel over the last year. So people are changing
their behavior, and it is happening in the places you would expect,
with a lot of transportation choices and a lot of public transportation. But it is also happening in smaller towns and rural areas.
And the kinds of transit options, the kinds of public transportation
options you would want to look at for smaller rural towns and
areas are different, but they are out there, and the models exist for
systems that would be applicable to those places.
And so I think also looking at not only the work trip but the nonwork trip, there tends to be a great deal of focus on the energy and
the oil and the gas associated with getting to and from work. But
when you look at the trip profile, that tends to be, depending on
how you want to count, only 25 to 35 percent of all the trips a
household takes.
So just making more complete communities where kids can walk
to school, where schools are the centers of the community, where
you can do some of your daily errands with a short car trip rather
than a long one can make a big difference. If you look, for instance,
back in 1960, about 50 percent of kids walked to school. That number is now down to about 11 percent. So just the basic way that
we are building and shaping our communities is, in fact, locking us
into one transportation option and essentially locking in oil dependence in the transportation sector.
Dr. Dagher, you made a very interesting point that your plan
could not only help to reduce our dependence of foreign oil and
bring some stability and lower prices to the citizens of our State
who are really struggling with the high cost of heating oil, but it
also could be an economic benefit. Could you talk a bit more for the
Committee about the possibility of what some have been referring
to as green jobs?
Mr. DAGHER. Yes, indeed. You are absolutely correct, Senator
Collins. By solving the heating crisis that we have in the State of
Maine and the energy crisis, we can also create a lot of renewable
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energy jobs. Now, Europe is a perfect example here. We do not
need to really look into the future. We just need to look across the
Atlantic.
Europe has created over 300,000 jobs over the last 10 years in
wind and wind-related energies because 70 percent of all wind turbines in the world are now produced in Europe. We can do the
same. But they have put together a policy system that allows industry to invest. They have the tax credits in place; they are very
stable. So putting together the policy framework that would allow
for these renewables to move forward is critical.
Numbers, in terms of how many jobs are created per gigawatt installed, vary quite a bit, but those numbers are anywhere from
1,000 jobs to 5,000 jobs per gigawatt of wind energy installed.
Senator COLLINS. Those jobs would be welcome indeed.
Senator Lieberman, before you came in, I started my questioning
by saying that I think we need all elements of the plans that we
have heard today, and that, in fact, T. Boone Pickens plan for wind
energy in the middle of the country fits in very well with Dr.
Daghers plan to tap offshore wind, which in turn we also need to
supplement by Dr. Lufts proposals for the transportation sector
and Mr. Andersons suggestion for better planning of communities.
This is going to take the ingenuity and the innovation of everyone to achieve the goal of energy security for this country, and I
for one am very appreciative of the testimony we have heard today.
I told them if this were a multiple choice test, I would be checking
all of the above. And I just want to thank you, Mr. Chairman,
for holding this very important hearing today.
Chairman LIEBERMAN [presiding]. Thanks very much, Senator
Collins. Thanks for your inspiration which brought the hearing
about. And I agree with you, this is not a problem that will be
solved with a single bullet. I was impressed by that in T. Boone
Pickens testimony. He may have some favorites here, as you commented on, in terms of natural gas, but I thought in the end he
was open to the various ways in which we would deal with this,
if I may say so, so long as they were Americanin other words,
as long as they broke our dependence on foreign oil and created
bridges to the zero hydrocarbon future. And then the three of you
have really presented us with a series of, I think, very visionary
but also practical options, which I appreciate.
I do not have any further questions.
Senator COLLINS. I just have one final comment for Dr. Dagher,
and that is, give us a sense of how far away we are in your view
from the technology that would make your plan feasible from an
economic standpoint.
Mr. DAGHER. We are looking at about 5 to 7 years from becoming
a reality in the United States. I would also like along the same
lines to really recognize before we go my dear colleague, Dr. George
Hart, who is sitting here. If you dont mind, George, stand up. Dr.
Hart is really at the heart of developing all of these concepts, so
thank you, Dr. Hart.
Senator COLLINS. Thank you. Thank you, Mr. Chairman.
Chairman LIEBERMAN. Thanks, Senator Collins, and we thank
our witnesses.
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We are going to leave the record of the hearing open for 15 days
if Members of the Committee want to submit questions to you in
writing or if you would like to add to your testimony in any way.
But we thank you very much for the work you are doing and for
the testimony that you offered today.
The hearing is adjourned.
[Whereupon, at 12:06 p.m., the Committee was adjourned.]
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Senate Hearing, 110TH Congress - Energy Security: An American Imperative

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Senate Hearing, 110TH Congress - Energy Security: An American Imperative

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S. Hrg.

ENERGY SECURITY: AN AMERICAN IMPERATIVE

JULY 22, 2008

Available via http://www.gpoaccess.gov/congress/index.html

For sale by the Superintendent of Documents, U.S. Government Printing Office

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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

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ENERGY SECURITY: AN AMERICAN

Chairman LIEBERMAN. The hearing will come to order. Thank

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Senator COLLINS. Thank you, Mr. Chairman.

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Mr. PICKENS. Chairman Lieberman, Ranking Member Collins,

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prepared statement of Mr. Pickens appears in the Appendix on page 41.

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posters referenced by Mr. Pickens appear in the Appendix on page 53.

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Senator VOINOVICH. Thank you, Mr. Chairman.

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Senator DOMENICI. Thank you. Mr. Chairman, he knows me from

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