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April 8, 2013

DOE: Questions for Energy Secretary Nominee Ernest Moniz

April 8, 2013
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This week, President Obama’s nominee to succeed energy secretary Steven Chu will face questions before the Senate Committee on Energy and Natural Resources in which senators are expected to pose a number of questions to Dr. Ernest Moniz about his prior work at the department, his position on natural gas exports, the state of America’s current nuclear resources, carbon taxes and taxpayer support for renewables. The Institute for Energy Research has compiled the following series of questions at the request of policy makers to help frame the issues for Dr. Moniz’s confirmation.

General Administration

The Secretary of Energy is responsible for setting policy regarding energy programs in the U.S. government, but DOE has none of the lands or waters that make up the federal estate with energy resources under them. That federal mineral estate totals more than 2.4 billion acres, making it larger than the land mass of of the United States, and second only to Russia and Canada’s land size.  Currently, the Department of Interior has only leased about 3% of that land.

Additionally, the Interior Department has announced the most anemic 5 year plan in the history for offshore drilling, reduced onshore leasing significantly. Meanwhile, the administration has put in place an oil shale development plan that runs counter to the intent of the 2005 EPACT bill which called for expeditious commercial leasing of oil shale properties which used to belong to DOE and which DOE estimates hold almost 1 trillion barrels of technically recoverable oil.

The EPA is engaged in the most massive regulatory assault on power plants in our nation’s history, with a particular vendetta for coal, and the agency is aggressively pushing regulations that will raise the price of gasoline for consumers, including increasing the amount of ethanol in fuel which lowers miles per gallon for vehicles in the U.S.

These are but two of many agencies that seem to have much more say over energy policy in the U.S. than the Department of Energy.  It also appears that none of these issues affecting DOE’s mission ever involved input from your predecessor.

It looks like your job, if confirmed, involves responsibility for everything related to energy with no control over anything, at least as practiced by your predecessor. 

How do you intend to change this if confirmed as Secretary?  Will you weigh in with the impacts on energy prices if another agency takes actions to make them skyrocket?  Will you argue in the Cabinet for affordable energy being made available on federal lands even if the Secretary of Interior thinks 97% of the lands and waters should not be used for energy?

Free Markets in Natural Gas

In your July 2011 testimony before the Senate Energy and Natural Resources Committee on the future of natural gas, you stated, “For economic and geo-political reasons we [the MIT Energy Initiative] recommend support for the development of a global market, and that would entail, for example, erecting no barriers to either the export or import of LNG.”[1] Given your prior support for free trade, do you approve of the current slow permitting of the LNG export terminals? As Energy Secretary, would you approve all export terminals for liquefied natural gas?

Canada recently increased its capacity to export natural gas to more than double the capacity permitted in the U.S.[2] Given this growing gap, as Energy Secretary what actions would you take to remove barriers to natural gas exports?

Because you support a global market in natural gas, do you also support a global market in coal? Do you support coal exports like you have supported natural gas exports?  

The United States is an energy rich country with 100 years of natural gas, over 200 years of oil, and 500 years of coal at the current rate of use.[3] Much of these resources are on taxpayer-owned federal lands. But under Interior Secretary Ken Salazar, 100 percent of the increase in oil and natural gas production has occurred on private and state lands. As Energy Secretary, will you fight for greater energy abundance by urging the Interior Department to lease more than 3 percent of federal lands for oil and natural gas production?

Hydraulic Fracturing

Hydraulic fracturing was first used in 1949 after being introduced by Stanolind Oil.[4] There has not been a single confirmed case of direct groundwater well contamination due to hydraulic fracturing in over 60 years of usage.[5] In your July 2011 testimony before the Senate Energy and Natural Resources Committee, you stated, “The MIT study recommends that in order to minimize environmental impacts, current best practice and regulation and oversight should be applied uniformly to all shales.”[6] Given the states’ exemplary track record regulating hydraulic fracturing, what are the grounds for overriding the states’ regulations with a federal regulatory regime? 

In the previously referenced testimony, you stated, “Natural gas can indeed play an important role over the next couple of decades (together with demand management) in economically advancing a clean energy system.”[7] To what extent would imposing federal constraints on natural gas jeopardize the pursuit of a economically advanced energy system?

At the same hearing, you hailed natural gas as a “’bridge’ to a low-carbon future.” In what ways would subjecting natural gas to federal regulation instead of the current state-led regulation risk burning this bridge?

Green Energy Cronyism

Since 2009, more than 20 renewable energy companies that received federal subsidies from the Department of Energy either filed for bankruptcy or are in severe financial distress.[8]  According to government documents, the DOE and Department of Treasury doled out more than $1.2 billion in cash payments for renewable energy projects since January 2013.[9] Given current budgetary constraints, how can DOE justify even more cash payments to wind, solar, and other renewable projects when the federal government has such a poor track record of picking winners in the energy market?

In an article titled “Why we still need nuclear power,” you stated, “Wind and solar power are becoming increasingly widespread, but their intermittent and variable supply make them poorly suited for large-scale use…”[10] Since wind and solar are poorly suited for large-scale use, why should DOE continue to throw good money after bad by subsidizing these inefficient and ineffective forms of electricity production?

Some of the bankrupt companies, such as Solyndra, have connections to the Obama administration.[11] As Energy Secretary, how do you plan to combat cronyism at the Department of Energy?

A recent study by the Institute for Energy Research estimates that opening federal lands to oil and gas development will lead to a $450 billion increase in GDP annually in the next thirty years, along with almost 2 million jobs and $2.7 trillion in federal tax revenue over thirty seven years.[12] As Energy Secretary, will you work to make sure the Interior Department allows more energy production on taxpayer-owned public lands?

Carbon Tax

In 2007 testimony for the Senate Energy and Natural Resources Committee, you predicted that “absent substantial reductions in CO2 emissions,” the U.S. will be forced to contend with the “high economic cost and social disruption of adapting to climate change.”[13] Testifying in 2011, you suggested a carbon tax would be the “simplest policy approach” to curb carbon emissions.[14] But a carbon tax would drive up costs for affordable energy sources like oil, natural gas, and coal. This would have a disproportionate impact on lower-income families, who spend a larger share their income on energy.[15] Why do you support making energy more expensive for America’s most vulnerable citizens?

In your March 2007 testimony on the future of coal before the Senate Environment and Natural Resource Committee,[16] you referred matter-of-factly to “the increase in electricity prices that will accompany a carbon control regime.”  Because a carbon control regime will increase electricity prices, do you support such a regime?  Is this position consistent with President Obama’s 2008 statement that “under my plan, electricity prices will necessarily skyrocket? “Do you have any estimates of the size of this impact for proposed policies?

In that same testimony, you estimated “The EPPA model and our engineering analysis of alternative coal technologies suggests that a carbon charge of approximately $30/tonne-CO2 is needed” to ensure an adequate implementation of carbon capture and sequestration from coal-fired power plants, that would stabilize CO2 emissions. Do you think a penalty on carbon emissions should be set in light of the need to induce a desired outcome in the coal sector, or in light of the overall estimates of the “social cost of carbon” from the point of view of actual impacts on human welfare?

In 2010 the White House formed a working group to estimate the social cost of carbon for use in policymaking purposes. The Working Group concluded that using a 5 percent discount rate, the social cost of carbon in 2011 was $5/ton (in 2007 dollars).[17] Do you have any reason to doubt the findings of the White House’s Working Group?

William Nordhaus, one of the world’s experts on the economics of climate change and a leading proponent of carbon taxes, estimated in a 2011 NBER paper that the social cost of carbon was $12/ton of CO2.[18] Do you have any reason to doubt Nordhaus’ model?

Do you agree that if either the President’s Working Group or William Nordhaus’ estimates of the social cost of carbon are accurate, it would be very inefficient for the federal government to impose carbon capture and sequestration mandates on coal-fired power plants?

In 2011 testimony before the Senate Energy and Natural Resources Committee, you predicted that “at some point we are going to have a carbon dioxide emission mitigation strategy” and that the U.S. should “prepare the options that we will need for meeting carbon restrictions.” Because lower-income families are more vulnerable to energy costs because energy consumes a higher proportion of their income, does it make sense to increase the cost of energy for carbon considerations?

In July 2011 testimony for the Senate Energy and Natural Resources Committee, you said that “with increasingly stringent carbon dioxide emissions reductions, natural gas would eventually become too carbon intensive.” [19] When do you predict that EPA will move to ban new natural gas power plants like the proposed EPA regulation does for new coal-fired power plants?  

Many would like EPA to limit carbon dioxide emissions from existing power plants. According to a recent study from Barclays bank, “The cost could be as much as 60-90 GW of incremental coal plant shutdown beyond the 42 GW we forecast for compliance with the MATs standard.”[20] Do you support the EPA’s costly efforts to accomplish by regulatory fiat what could not pass democratically in the United States Congress?

Keystone XL

Even though two-thirds of Americans support the Keystone XL,[21] President Obama has delayed a decision on the pipeline for more than four years. The latest (and every other) Environmental Impact Statement found the pipeline will have negligible effects on the environment.[22]  As Secretary of Energy, will you support more energy from Canada?

Do you believe it is in America’s “national interest” to get more oil from Canada instead of overseas?

As Secretary of Energy, will you fight for freer oil and natural gas trade between Canada and the United States? 

Transparency

President Obama promised to make his administration the most transparent in history.[23] However, former EPA administrator Lisa Jackson used an alias email address to conduct official agency business, and other government officials have been caught using their personal emails for inappropriate purposes.[24]  Now, questions are being raised about other means by which officials there deliberately sought methods to hide their communications, including instant messaging. What are your thoughts on Administrator Jackson and other public officials using unofficial email accounts for official purposes?

After the email scandal was revealed last spring, the EPA’s Inspector General launched an investigation to “determine whether EPA follows applicable laws and regulations when using private and alias email accounts to conduct official business.”[25] Additionally, the House Science Committee and Energy and Commerce Committee wrote letters to EPA questioning the use of the secret accounts.[26]

In response to these investigations and official FOIA requests, EPA missed multiple deadlines[27] before eventually releasing heavily redacted documents in January 2013.[28] To what extent are the EPA’s stall and stonewall tactics consistent with President Obama’s promise to make his administration the most transparent in history? If confirmed as Energy Secretary, what actions will you take to ensure FOIA requests and congressional questions are answered in a timely manner?


[1] Hearing before the Senate Committee on Energy and Natural Resources, The Future of Natural Gas, July 19, 2011, http://www.gpo.gov/fdsys/pkg/CHRG-112shrg71211/html/CHRG-112shrg71211.htm.

[2] Canada seen beating U.S. in $150 billion Asia LNG race

http://fuelfix.com/blog/2013/04/03/canada-seen-beating-u-s-in-150-billion-asia-lng-race/

[3] Institute for Energy Research, North American Energy Inventory, Dec. 2011, www.energyforamerica.org/inventory.

[4] Hydraulic Fracturing: History of an Enduring Technology

http://www.spe.org/jpt/print/archives/2010/12/10Hydraulic.pdf

[5] Energy In Depth, Gasland Fact Sheet,

http://www.energyindepth.org/wp-content/uploads/2010/06/Gasland-Fact-Sheet-FINAL-062110.pdf

[6] Testimony of Ernest Moniz, MIT Study on the Future of Natural Gas, US Senate Committee on Energy and Natural Resources

http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=42c2523f-b096-189b-6a12-925e1f9d1481

[7] Testimony of Ernest Moniz, MIT Study on the Future of Natural Gas, US Senate Committee on Energy and Natural Resources

http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=42c2523f-b096-189b-6a12-925e1f9d1481

[8] Institute for Energy Research, Another Obama-Funded Company Files for Bankruptcy: A123 Systems, October 2012, http://instituteforenergyresearch.org/2012/10/19/another-obama-funded-company-files-for-bankruptcy-a123-systems/

[9] $1.2 Billion in Cash Goes to Energy Projects, Despite Sequestration

http://blog.heritage.org/2013/04/03/doe-treasury-give-1-2-billion-in-cash-to-energy-projects-despite-sequestration/

[10] Why We Still Need Nuclear Power

http://mitei.mit.edu/news/mitei-news/why-we-still-need-nuclear-power

[11] George Kaiser, Obama Donor, Discussed Solyndra Loan with White House

http://www.huffingtonpost.com/2011/11/09/george-kaiser-solyndra_n_1084568.html

[12] Beyond the Congressional Budget Office: The Additional Economic Effects of Immediately Opening Federal Lands to Oil and Gas Leasing

http://instituteforenergyresearch.org/wp-content/uploads/2013/02/IER_Mason_Report_NoEMB.pdf

[13] Testimony of Ernest Moniz, The Future of Coal: Options for a Carbon-Constrained World, US Senate Committee on Energy and Natural Resources, March 2007.

[14] Testimony of Ernest Moniz, MIT Study on the Future of Natural Gas, US Senate Committee on Energy and Natural Resources, July 2011.

http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=42c2523f-b096-189b-6a12-925e1f9d1481

[15] American Coalition for Clean Coal Electricity, Energy Cost Impacts on American Families, February 2012, http://www.americaspower.org/sites/default/files/Energy_Cost_Impacts_2012_FINAL.pdf

[16] http://www.energy.senate.gov/public/index.cfm/hearings-and-business-meetings?Id=e3603815-3fdb-45b2-b14e-e859c6fc2ff3&Statement_id=f2391b08-e1d4-4e40-ad0a-61ff787522df

[17] Quoted from Economic Report of the President 2013, as shown here:

http://instituteforenergyresearch.org/2013/03/22/administrations-half-truths-on-carbon-policy/

[18] http://www.nber.org/papers/w17540

[19] Testimony of Ernest Moniz, MIT Study on the Future of Natural Gas, US Senate Committee on Energy and Natural Resources, July 2011

http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=42c2523f-b096-189b-6a12-925e1f9d1481

[20] Barclays, Power & Utilities: CO2 Reductions Ahead, Jan. 28, 2013.

[21] USA Today, Americans back Keystone pipeline in new poll, April 2013, http://www.usatoday.com/story/news/nation/2013/04/02/poll-keystone-support-arkansas-spill-bp-gulf-coast/2047053/

[22] Draft Supplemental Environmental Impact Statement – Keystone XL Project

http://keystonepipeline-xl.state.gov/documents/organization/205617.pdf

[23] The White House, Memorandum for the Heads of Executive Departments and Agencies, accessed April 2013, http://www.whitehouse.gov/the_press_office/TransparencyandOpenGovernment

[24] The Daily Caller, EPA admin’s alleged secret email account found in previously released emails, November 2012, http://dailycaller.com/2012/11/19/epa-admins-alleged-secret-email-account-found-in-previously-released-emails/

[25] Letter to EPA Administrator Lisa Jackson, EPA Office of the Inspector General, December 2012, http://www.epa.gov/oig/reports/notificationMemos/newStarts_12-13-2012_Audit_of_Records_Managements_Practices.pdf

[26] Letter to EPA Administrator Lisa Jackson, House Committee on Science, Space, and Technology, November 2012, http://science.house.gov/letter/letters-questioning-administration-officials%E2%80%99-use-secret-email-accounts, Letter to EPA Administrator Lisa Jackson, House Committee on Energy and Commerce, December 2012, http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/letters/20121213EPA.pdf

[27] Competitive Enterprise Institute, The EPA’s “Richard Windsor” Email Scandal, accessed April 2013, http://cei.org/richard-windsor

[28] Competitive Enterprise Institute, EPA Email Release “Gravely Compounded Unlawful Activity We Have Exposed”, January 2013, http://cei.org/news-releases/epa-email-release-“gravely-compounded-unlawful-activity-we-have-exposed”

 


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