[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
KYOTO GLOBAL WARMING TREATY'S IMPACT ON OHIO'S COAL-DEPENDENT
COMMUNITIES
=======================================================================
OVERSIGHT FIELD HEARING
before the
COMMITTEE ON RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
Tuesday, May 13, 2003 in St. Clairsville, Ohio
__________
Serial No. 108-19
__________
Printed for the use of the Committee on Resources
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
or
Committee address: http://resourcescommittee.house.gov
______
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COMMITTEE ON RESOURCES
RICHARD W. POMBO, California, Chairman
NICK J. RAHALL II, West Virginia, Ranking Democrat Member
Don Young, Alaska Dale E. Kildee, Michigan
W.J. ``Billy'' Tauzin, Louisiana Eni F.H. Faleomavaega, American
Jim Saxton, New Jersey Samoa
Elton Gallegly, California Neil Abercrombie, Hawaii
John J. Duncan, Jr., Tennessee Solomon P. Ortiz, Texas
Wayne T. Gilchrest, Maryland Frank Pallone, Jr., New Jersey
Ken Calvert, California Calvin M. Dooley, California
Scott McInnis, Colorado Donna M. Christensen, Virgin
Barbara Cubin, Wyoming Islands
George Radanovich, California Ron Kind, Wisconsin
Walter B. Jones, Jr., North Jay Inslee, Washington
Carolina Grace F. Napolitano, California
Chris Cannon, Utah Tom Udall, New Mexico
John E. Peterson, Pennsylvania Mark Udall, Colorado
Jim Gibbons, Nevada, Anibal Acevedo-Vila, Puerto Rico
Vice Chairman Brad Carson, Oklahoma
Mark E. Souder, Indiana Raul M. Grijalva, Arizona
Greg Walden, Oregon Dennis A. Cardoza, California
Thomas G. Tancredo, Colorado Madeleine Z. Bordallo, Guam
J.D. Hayworth, Arizona George Miller, California
Tom Osborne, Nebraska Edward J. Markey, Massachusetts
Jeff Flake, Arizona Ruben Hinojosa, Texas
Dennis R. Rehberg, Montana Ciro D. Rodriguez, Texas
Rick Renzi, Arizona Joe Baca, California
Tom Cole, Oklahoma Betty McCollum, Minnesota
Stevan Pearce, New Mexico
Rob Bishop, Utah
Devin Nunes, California
VACANCY
Steven J. Ding, Chief of Staff
Lisa Pittman, Chief Counsel
James H. Zoia, Democrat Staff Director
Jeffrey P. Petrich, Democrat Chief Counsel
------
C O N T E N T S
----------
Page
Hearing held on May 13, 2003..................................... 1
Statement of Members:
Ney, Hon. Robert W., a Representative in Congress from the
State of Ohio.............................................. 3
Prepared statement of.................................... 6
Pombo, Hon. Richard W., a Representative in Congress from the
State of California........................................ 2
Prepared statement of.................................... 3
Statement of Witnesses:
Christy, Dr. John R., Alabama State Climatologist,
Huntsville, Alabama........................................ 48
Prepared statement of.................................... 50
Letter submitted for the record.......................... 54
Erdos, Babe, International Executive Board Member, United
Mine Workers of America, District 6, Shadyside, Ohio....... 21
Prepared statement of.................................... 22
Grisham, John C., President, Buckeye Industrial Mining Co.,
Lisbon, Ohio............................................... 14
Prepared statement of.................................... 16
Homrighausen, Hon. Richard, Mayor, City of Dover, Ohio....... 32
Prepared statement of.................................... 35
Kosowski, James A., Director of Corporate Communications,
Wheeling-Pittsburgh Steel Corporation, Wheeling, West
Virginia................................................... 23
Prepared statement of.................................... 25
Murray, Robert E., President and Chief Executive Officer,
Murray Energy Corporation, and The Ohio Valley Coal Company 8
Prepared statement of.................................... 11
Obloy, Gary, Executive Director, Community Action Commission
of Belmont County, St. Clairsville, Ohio................... 37
Prepared statement of.................................... 38
Letter submitted for the record.......................... 42
Trisko, Eugene M., Attorney at Law, Testifying on behalf of
the United Mine Workers of America, Berkeley Springs, West
Virginia................................................... 42
Prepared statement of.................................... 44
Ungurean, Charles C., President, Ohio Coal Association, and
President and CEO, Oxford Mining Company, Coshocton, Ohio.. 18
Prepared statement of.................................... 20
OVERSIGHT FIELD HEARING ON THE ``KYOTO GLOBAL WARMING TREATY'S IMPACT
ON OHIO'S COAL-DEPENDENT COMMUNITIES''
----------
Tuesday, May 13, 2003
U.S. House of Representatives
Committee on Resources
St. Clairsville, Ohio
----------
The Committee met, pursuant to call, at 9:39 a.m., in
Horizon Hall, Belmont Technical College, St. Clairsville, Ohio;
Hon. Richard Pombo (Chairman of the Committee) presiding.
Present: Representatives Pombo and Ney.
The Chairman. I will call this hearing to order.
I, at this point, would like to recognize Congressman Bob
Ney.
Mr. Ney. Thank you, Chairman Pombo, for coming to the 18th
District, to Belmont County. This will be a hearing of the
House Resources Committee.
The process today will be we will begin with the invocation
by Reverend Incas of the Friends Church of St. Clairsville;
then from the VFW, we have Shorty Wier of the Veterans of
Foreign Wars, St. Clairsville Post 5356; John Monroe, Veterans
of Foreign Wars, Bethesda Post 9712. We also have the Scout
Troop, Boy Scouts of America, Troop Number 23. The troop leader
is David McCloud. The scouts are Zack Pupery and Robert
Clayson.
I also want to thank Union Local High School juniors, for
coming here today to be part of witnessing the hearing on a
very important issue to our area and to the United States. I
also want to thank our staff, J.P. Dutton and also Chairman
Pombo will be introducing his staff with the House Resources
Committee; Belmont Technical College for putting this together;
Belmont Technical Security and also the Belmont County
Sheriff's Office for the security they provided.
And with that, we will begin with the invocation by
Reverend Incas.
[Invocation.]
Mr. Ney. And with that, if you could stand for the colors
and the pledge of allegiance.
[Colors presentation and pledge of allegiance.]
STATEMENT OF RICHARD W. POMBO, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
The Chairman. Thank you very much. Ladies and gentlemen, I
am Richard Pombo and my family is involved in ranching, farming
and trucking in California's Central Valley. I am here today at
the request of my good friend Bob Ney, who wanted me to see
first-hand how working men and women in the Ohio Valley are
affected by the proposed Kyoto Treaty. It is refreshing to
travel outside the Washington Beltway to hear from straight-
talking folks about this important issue.
The Committee on Resources' jurisdiction includes all
aspects of coal mining regulation and reclamation of mined
lands. The United States' known coal reserves will last us
centuries at current rates of consumption. Coal and steel
produced in the Ohio Valley played a vital role in America's
victories in two World Wars and Korea. Your smokestacks helped
produce our Arsenal of Democracy that provides our servicemen
and women with the tools they need to defend our nation and our
way of life.
Working men and women in this audience produce a commodity
that generates over 50 percent of America's electricity.
Regrettably, this staple of America's energy supply faces
formidable foreign and domestic challenges.
In 1997, the Clinton Administration signed the Kyoto Treaty
that forces nations with the most advanced pollution control
technologies like the United States, to drastically reduce
their carbon dioxide emissions while countries with primitive
pollution control technologies like China and India are
exempted. China already burns more coal than the United States.
At a time when people in this room have personally
experienced the pain and trauma of massive plant closings in
recent years, the Kyoto Treaty would add further insult to
injury. In short, Kyoto means pink slips in French.
Happily, Congress listened to the people in this room and
took steps to stop the treaty. Several years ago, the U.S.
Senate passed the Byrd-Hagel resolution 95-0, that expresses
opposition to the Kyoto Treaty. Moreover, President Bush said
he will not implement this treaty that would cost the Nation an
estimated $350 billion a year. Moreover, he pointed out the
scientific community is divided on the effect of carbon dioxide
in the global warming equation--a view shared by several of
today's witnesses.
However, this week, the U.S. Senate will vote on measures
to regulate and tax carbon dioxide.
Although Washington is often characterized by partisan
politics and wrangling, today's witnesses are above that. It is
refreshing that owners of coal companies, the United Mine
Workers of America and the Steelworkers are united today in
protecting America from the far-reaching treaty. Moreover, a
local social service agency will explain how higher energy
prices will affect the neediest people in our community.
Finally, a scientist and a local elected official will explain
how good science and sound economics are vital to sensible
regulations.
Mr. Ney.
[The prepared statement of Mr. Pombo follows:]
Statement of The Honorable Richard Pombo, Chairman,
Committee on Resources
The House Committee on Resources will come to order Ladies and
Gentlemen, I am Richard Pombo and my family is involved in ranching,
farming and trucking in California's Central Valley. I am here today at
the request of my good friend, Bob Ney, who wanted me to see first-hand
how working men and women in the Ohio Valley are affected by the
proposed Kyoto treaty. It is refreshing to travel outside the
Washington Beltway to hear from straight-talking folks about this
important issue.
The Committee on Resources' jurisdiction includes all aspects of
coal mining regulation and reclamation of mined lands. The United
States' known coal reserves will last us centuries at current rates of
consumption. Coal and steel produced in the Ohio Valley played a vital
role in America's victories in two World Wars and Korea. Your
smokestacks helped produce our Arsenal of Democracy that provides our
servicemen and women with the tools they need to defend our Nation and
our way of life.
Working men and women in this audience produce a commodity that
generates over 50 percent of America's electricity. Regrettably, this
staple of America's energy supply faces formidable foreign and domestic
challenges.
In 1997, the Clinton Administration signed the Kyoto Treaty that
forces nations with the most advanced pollution control technologies
like the United States to drastically reduce their carbon dioxide
emissions while countries with primitive pollution control technologies
like China and India are exempted. China already burns more coal than
the U.S.
At a time when people in this room have personally experienced the
pain and trauma of massive plant closings in recent years, the Kyoto
Treaty would add further insult to injury. In short, Kyoto means pink
slip in French.
Happily, Congress listened to the people in this room and took
steps to stop the treaty. Several years ago the U.S. Senate passed the
Byrd-Hagel resolution 95-0 that expresses opposition to the Kyoto
Treaty. Moreover, President Bush has said he will not implement this
treaty that would cost the nation an estimated $350 billion per year.
Moreover, he pointed out the scientific community is divided on the
effect of carbon dioxide in the global warming equation--a view shared
by several of today's witnesses.
However, this week the U.S. Senate will vote on measures to
regulate and tax carbon dioxide.
Although Washington is often characterized by partisan politics and
wrangling, today's witnesses are above that. It is refreshing that
owners of coal companies, the United Mineworkers of America and the
Steelworkers are united today in protecting America from this far-
reaching treaty. Moreover, a local social service agency will explain
how higher energy prices will affect the neediest people in your
community. Finally, a scientist and a local elected official will
explain how good science and sound economics are vital to sensible
regulation.
______
STATEMENT OF THE HON. ROBERT NEY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF OHIO
Mr. Ney. Thank you, Chairman Pombo, and I want to thank you
for taking your time out of your busy schedule to come all the
way from California to hear in particular eastern Ohio and more
particular Belmont County.
Also I want to thank the witnesses that are going to be
assembled here today, a great group of witnesses that are
important to the process of this hearing.
As many of you know, I grew up in Blair and I live in St.
Clairsville, so for a long time, I have known the importance of
coal mining to our economy and also for the jobs for people to
be able to feed their families and help their community.
The mining industry provides excellent paying jobs to many
individuals in our part of the state. Because of the hard work
of those individuals, our state and our nation enjoys a
reliable energy source at low cost. Nationwide, more than half
of the electricity consumed in our nation comes from coal,
which is the cheapest source of energy. In our state, the State
of Ohio, coal accounts for nearly 90 percent of our energy
needs. So not only does the mining industry create jobs, but it
sustains good quality jobs.
In addition, the industry has a direct impact on many other
sectors of our economy. There are a number of small businesses
in our area that heavily rely on mining companies as major
customers of their products and services. So there are
thousands of spin-off jobs to the jobs that coal miners provide
directly. Rail line operators, heavy equipment manufacturers,
repair shop owners, barge owners are just a few of the
occupations that in one way or another are dependent on the
coal industry and its jobs.
That being said, Mr. Chairman, I greatly appreciate this
opportunity to express my strong opposition to the Kyoto
Protocol in a time of change, which I have done for many years,
both in the state legislature and in Congress as a member of
the House.
As I stated in the past, the Kyoto Protocol is a severely
flawed agreement. Simply put, the Kyoto Protocol poses
significant risk to the future of our national economy, while
at the same time excluding some of the world's largest
polluters. This agreement is particularly unfair to American
workers. While our workforce strives for increased efficiency,
Brazil, India, Mexico and China are given a free pass. To date,
the Kyoto Protocol has been ratified by 108 countries, but
thanks to President Bush, the United States is not included on
this list.
Mr. Chairman, I have been to Kyoto, I went over to argue
our point of view, I flew over to Kyoto to express our strong
opposition. When the Japanese have arrived in the Congress, I
again went to those meetings to also express our strong
opposition. I have spoken to officials that were directly
involved with this treaty, I have conveyed to them many of
these same concerns that I raise here before you today.
The Kyoto Protocol would devastate our country's economy,
particularly the coal industry, by requiring a reduction in
energy usage of more than 40 percent. Coal consumption would
decline sharply as electric utilities switched to fossil fuels
with lower emissions such as natural gas. Immediately after the
Protocol was concluded, analysis showed that coal production
would drop to a low of 150 million tons by 2020 if this
agreement was enacted. In order to meet the Kyoto target, coal
prices would decline along with demand. Consequently, revenues
for coal producers would be reduced. To the extent possible,
coal companies would lower their production costs by reducing
labor or investment in productivity. Either way, it would spell
a disaster, not only for our area, but for our country, Mr.
Chairman.
The Kyoto Protocol, beyond any question, will eliminate
thousands of jobs across the country. Jobs will be lost
throughout the industry in all coal producing states and many
other regions in our country. In Ohio, almost all of the 3500
coal mining jobs will be threatened. This is in addition to
approximately 20,000 direct coal mining jobs already lost under
the Clean Air Act, and for those workers that remain employed,
wages and benefits will be reduced, plus the spinoff workers I
mentioned earlier.
The effects of the decline in coal use will extend far
beyond the industry itself because, as I stated previously,
coal accounts for over half of the electricity generated in
this country today. This low-cost electricity is the basis for
our strong economy and position in the world market. Removing
this resource from our industrial base will have effects that
will be felt throughout the Nation in terms of lower economic
potential, higher prices, diminished ability to compete in
world markets and overall employment losses. The price of
energy will be sharply higher, consumer costs will escalate.
But these losses are only the beginning. Millions of jobs
will be lost in America with the elimination of low-cost energy
due to the Kyoto Protocol. Now some in Washington do not agree
with this and they do not understand the importance of the
mining industry. We are going to make them understand that
importance through hearings like this and through the force of
the citizens that will lobby this issue to save our jobs.
Some people feel that coal should not continue to be a
stable source of energy for our nation's economy. Thankfully,
President Bush is not among this group. Since taking office,
the President has shown a strong dedication to the future use
of coal. In fact, during his first few months in office, the
President invited U.S. coal industry leaders and government
officials to the White House. I was at that meeting with both
union and company, in order to stress the importance of coal
for his proposed national energy policy. Since that meeting,
President Bush has committed $2 billion over the next 10 years
for the development of clean coal technology.
In addition, the President set up a project to build a
zero-emission coal-fired power plant. With an administration
committed to the future of clean coal and an industry focused
on increased efficiency, coal will continue as a reliable
resource of energy, while reducing this environmental impacts.
I just want to say in closing, Mr. Chairman, as I
mentioned, we are thankful that you are here. But also, I serve
with the Chairman in the U.S. House of Representatives. He is
somebody that will listen. And what he has done today is
brought Washington, D.C. to our area. As the Chairman of the
Committee, he is going to be involved in critical decisions
that are going to affect many people's future in this country.
But I am glad that we have a common sense Chairman. Since I
have arrived in Congress, I have watched my colleague as he
rose to the ranks of Chair this year, so he is a brand new
Chair of the Resources Committee. But I have watched him
operate with the workers in mind. He has not ever forgotten his
roots, the common roots that our Chair comes from. He is
sensitive and listening to our concerns about what is good and
fair and balanced for the average working person in this
country.
You know, we have gone through a great trauma in the last 2
years in the United States, a trauma of the likes we have not
seen in a long time in this country. And we have to stop for a
second today--we can serve today in the U.S. House of
Representatives and we will go cast votes later on today in the
U.S. House and we have people elected at all levels in this
country. And the reason we are able to do that is because of
the veterans, the veterans that came in here and presented
these colors, the veterans that this very day are fighting for
us in all parts of the world, to make sure that we have a
democracy because a lot of people are envious of that
democracy.
But I have got to tell you, the talk all the time is about
our independence. And so we appreciate the support of the
veterans but also I think we should pay respect to the veterans
that started this country in the revolution against England by
standing up for ourselves and by having independence. If you
want to talk about independence from foreign oil, Mideast oil
and OPEC oil, we have got to have our reserves and we have got
to develop our coal and be able to have that stand as our
source of independence.
So a lot of people in this valley have struggled for a
long, long time and have fought the U.S. EPA and unfair
environmental regulations and have fought for our steel and a
lot of our jobs. People down here dream the dream and they have
paid the sacrifice to make that dream come true. Many of you in
this audience have done it. Being here today is part of the
process of again fighting for our future and fighting for our
jobs.
So I thank the veterans that we are able to serve in the
U.S. House, I thank all of you that we are able to keep our
jobs and our economy going.
With that, once again, we here in the 18th District, Mr.
Chairman, so appreciate your time that you are spending with
us. Thank you.
[Applause.]
[The prepared statement of Mr. Ney follows:]
Statement of The Honorable Bob Ney, a Representative in Congress from
the State of Ohio
Thank you Mr. Chairman. I appreciate your taking the time out of
your busy schedule to visit Eastern Ohio, in particular Belmont County.
I would also like to thank our witnesses for their participation in
this important hearing today.
As many of you know, I grew up in Bellaire and live in St
Clairsville. I have long known the importance of coal mining to our
local economies here in Eastern Ohio. The mining industry provides
excellent paying jobs to many individuals in our part of the state.
Because of the hard work of these individuals, our State and our Nation
enjoys a reliable energy source at a low cost. Nationwide more than
half of the electricity consumed in our nation, comes from coal, which
is the cheapest source of energy. In our State of Ohio, coal accounts
for nearly 90 percent of our energy needs.
Not only does the mining industry create, but it sustains quality
jobs. In addition, the industry has a direct impact on many other
sectors of our economy. There are a number of small businesses in our
area that heavily rely on mining companies as major customers of their
products and services. Rail line operators, heavy equipment
manufacturers, repair shop owners, and barge operators are just a few
of the occupations that are in some way dependent on the coal industry.
That being said, Mr. Chairman, I greatly appreciate this
opportunity to express my strong opposition to the Kyoto Protocol on
Climate Change. As I have stated in the past, the Kyoto Protocol is a
severely flawed agreement. Simply put, the Kyoto Protocol poses a
significant risk to the future of our National economy while at the
same time excluding some of the world's largest polluters. This
agreement is particularly unfair to the American worker. While our
workforce strives for increased efficiency, Brazil, India, Mexico and
China are given a free pass. To date, the Kyoto Protocol has been
ratified by 108 countries, but thanks to President Bush, the United
States is not included on this list.
Mr Chairman, I have been to Kyoto, Japan. I have spoken to
officials that were directly involved with this treaty and I conveyed
many of the same concerns that I raise today. The Kyoto Protocol would
devastate our country's economy, particularly the coal industry, by
requiring a reduction in energy usage of more than 40 percent. Coal
consumption would decline sharply as electric utilities switch to
fossil fuels with lower emissions, such as natural gas. Immediately
after the protocol was concluded, analysis showed that coal production
could drop to as low as 150 million tons by 2020 if this agreement is
enacted. In order to meet the Kyoto target, coal prices would decline
along with demand. Consequently, revenues for coal producers will be
reduced. To the extent possible, coal companies would lower their
production costs by reducing labor or investment in productivity. The
Kyoto Protocol, beyond any question, will eliminate thousands of jobs
across the country. Jobs would be lost throughout the industry in all
coal producing states and many other regions of the country. In Ohio,
almost all of the 3,500 coal mining jobs would be threatened. This is
in addition to the approximately 20,000 direct coal mining jobs already
lost under the Clean Air Act. And for those workers that remain
employed, wages and benefits would be reduced.
The effects of this forced decline in coal use will extend far
beyond the industry itself, because as I stated previously, coal
accounts for over half of all electricity generated in our country
today. This low cost electricity is the basis for our strong economy
and position in the world market. Removing this resource from our
industrial base will have effects that will be felt throughout the
Nation, in terms of lower economic potential, higher prices, diminished
ability to compete in world markets and overall employment losses. The
price of energy would be sharply higher and consumer costs would
escalate. But, these losses are only the beginning. Millions of jobs
will be lost in America with the elimination of low cost energy, due to
the Kyoto Protocol.
Now some in Washington do not understand the importance of the
mining industry. They feel that coal should not continue to be a stable
source of energy for our Nation's economy. Thankfully, President Bush
is not among this group. Since taking office, the President has shown a
strong dedication to the future use of coal. In fact, during his first
few months in office, the President invited U.S. coal industry leaders
and government officials to the White House in order to stress the
importance of coal for his proposed national energy policy. Since that
meeting, President Bush has committed two billion dollars over the next
ten years for the development of clean coal technology. In addition,
the President has set up a project to build a zero-emissions coal fired
power plant. With an Administration committed to the future of clean
coal and an industry focused on increased efficiency, coal will
continue as a reliable source of energy while reducing its
environmental impacts.
Again, Mr. Chairman, thank you for holding this hearing. I look
forward to the upcoming testimony.
______
The Chairman. Thank you. Thank you very much.
I am going to invite our first panel of witnesses, and
ahead of time, I will apologize if I mess up any of your names.
Mr Robert Murray, Mr. John Grisham, Mr. Charles Ungurean, Mr.
Babe Erdos and Mr. James Kosowski, if you could join us at the
witness table, please.
Thank you all for joining us today. Just a little
housekeeping note. Your entire written testimonies will be
included in the record. We request the oral testimony be
limited to 5 minutes or as close to that as you can do. We have
the lights up here. The green light comes on at 5 minutes, the
yellow light comes on when there is a minute left and then the
red light comes on to wrap things up. So if you could try to
stay within the 5 minutes, that will help us stay within our
time limit for the hearing.
And before you get too comfortable, it is customary on the
Resources Committee that all witnesses are sworn in, so I would
ask you to stand and raise your right hand.
[Witnesses sworn.]
The Chairman. Thank you. Let the record show that they all
answered in the affirmative.
Thank you very much for agreeing to be part of our hearing
today. I am going to begin with Mr. Murray and let him begin
his testimony.
STATEMENT OF ROBERT E. MURRAY, DIRECTOR, OHIO VALLEY COAL
COMPANY AND THE AMERICAN ENERGY CORP.
Mr. Murray. Chairman Pombo, Congressman Ney, thank you for
coming to eastern Ohio for this hearing. Congressman Ney for
inviting him.
My name is Robert E. Murray and I am President and Chief
Executive Officer of Murray Energy Corporation, which employs
about 2500 persons in the most economically depressed areas of
the United States. Our subsidiaries, American Energy
Corporation, which is the Century Mine; Maple Creek Mining,
Inc. and the Ohio Valley Coal Company, employ about 1400
persons in the tri-state Ohio River Valley area and nearly 1000
people here in Belmont County.
Studies by the Pennsylvania State University have shown
that up to 11 secondary jobs are created for each of the coal
industry positions that we provide, thus making our companies
responsible for almost 17,000 jobs in the tri-state area and
nearly 12,000 positions here in eastern Ohio.
But this is not where our tremendous beneficial impact on
the area stops. Our mining employees typically earn twice the
average household wage in Ohio and two and a half times the
median wage for this area. American Energy's Century Mine here
in Belmont County is the largest single economic development in
Ohio in recent years, representing over a $300 million
investment in this area.
The subject of the Kyoto Global Warming Treaty is a human
issue to me, not an environmental matter, Chairman Pombo and
Congressman Ney. You see, I know the names of many of the
people whose jobs, standards of living and lives would be
destroyed in this area if the United Nations' Kyoto Global
Warming Treaty were ever adopted by the United States.
This region is desperate for good paying and well benefited
jobs, our people just want to earn a reasonable living with
honor and dignity. Our young people want to stay in the area
and have good employment. Many times, grown men and women have
broken down and cried in my office when I told them that we had
a job for them. They know that, with the high pay and excellent
benefits provided by coal mining, they can build the lives of
their dreams, be with their families and retire with dignity.
But this region came close to being economically
devastated, as the Administration of Bill Clinton and Albert
Gore signed the United Nations' Kyoto Protocol on so-call
global warming and for years urged its passage by the U.S.
Senate. Wisely, the Senate would not ratify their Draconian
treaty. Passage of the Kyoto Protocol would have eventually
eliminated the U.S. coal industry and the 17,000 primary and
secondary jobs for which our companies are responsible in this
tri-state area. Indeed, the Clinton/Gore administration had a
motto that they were going to ''dial out coal.``
Fortunately, President Bush condemned the United Nation's
Kyoto Protocol soon after he took office and announced that our
country would no longer be a part of this flawed agreement. On
March 13, 2001, he said:
''As you know, I oppose the Kyoto Protocol because it
exempts 80 percent of the world, including major population
centers, such as China and India, from compliance, and would
cause serious harm to the U.S. economy.``
President Bush has chosen an entirely different way to
address the climate issue, one based on research, technology
and voluntary action. This path will encourage economic growth,
not stifle it. It will allow greater use of our nation's most
abundant and lowest cost energy source--coal--rather than
devastate the industry and this area.
The President has received much pressure from radical
environmentalists and no-growth advocates in the U.S., as well
as the international community, to reverse his decision. But
even the most ardent supporters of the Protocol, the members of
the European Community, who are really using this issue to gain
economic advantages over the United States for their products
in the global marketplace, are having difficulty achieving the
mandatory carbon dioxide emissions reductions that they set for
themselves. And it is important to point out that the Kyoto
Protocol has not yet gone into force.
Very importantly, there is no scientific consensus that so-
called global warming is even occurring. Moreover, there is no
scientific evidence that human activities are responsibile.
As an engineer, I have followed this issue for nearly two
decades. The best analysis that I ever read is that prepared by
Professor Bjorn Lomborg, an academic who was a former member of
Greenpeace and a devoted environmentalist. Dr. Lomborg has
compared the projected changes in the world's temperatures for
the next 100 years, both with the Kyoto Treaty and without the
Treaty. Dr. Lomborg has concluded that:
If we observe the Kyoto Treaty by enforcing all of its
provisions, by the year 2100, 97 years from now, the
temperature is expected on earth to rise 1.92 degrees Celsius.
Now that is with the Kyoto Treaty.
Without it, that temperature will be reached in 2094, 6
years sooner.
In 2010, compliance with the Kyoto Protocol will cost $350
billion per year, increasing to nearly one trillion dollars
annually by 2050. To put this into perspective, Professor
Lomborg calculates that, for $200 billion, every human being on
earth could have clean drinking water and sanitation, saving
two million lives a year.
Remember, this is from work of an avid environmentalist.
Mandatory restrictions on carbon dioxide emissions, whether
imposed by the United Nations' Kyoto Protocol or by
restrictions such as those that are currently proffered by some
U.S. Senators, would have a devastating effect on the
communities in the tri-state area. The Kyoto Treaty would
require a reduction of greenhouse emissions to 7 percent below
1990 levels by 2008, notwithstanding that there is no
scientific evidence that proves that such reductions are
beneficial or necessary. Our nation would have to reduce
emissions by close to 40 percent from current levels in just 5
years to meet the Draconian Kyoto Treaty goals. We applaud
President Bush for recognizing the Kyoto Treaty for what it is,
a political agreement pushed by a previous administration with
no regard to America's economy or citizens, and particularly
those people in this area.
Regarding the economic devastation of the ill-conceived
Kyoto Treaty, the most recent study by the Heartland Institute
showed that if emissions had to be reduced to 1990 levels--and
that is not as low as the Kyoto Protocol requires--the Ohio
State government would lose a minimum of $1.2 billion of
revenue annually and consumers and businesses in our state
would pay $3.2 billion and $32 billion respectively more for
Federal and state programs to reduce carbon dioxide emissions.
To put this in perspective, that would be $8000 per year
for every household in Ohio--just to get to the earlier level,
which is 1990 and not before--and to comply with the Kyoto
Protocol would cost every household in this state $14,000 per
year--$14,000 per year for every household in Ohio! Clearly
these numbers prove the folly of even thinking about agreeing
to mandatory carbon dioxide controls in any form.
As for coal, there is very little production of this fuel
in the United States, there will be practically none. The
Energy Information Administration of the U.S. Department of
Energy analyzed the effects of the Kyoto Protocol and
determined that it would cause a 67 percent reduction in
national coal production levels by 2010, and a 90 percent drop
by 2020, even a little worse, Congressman, than you mention.
And this is from the Department of Energy.
In short, by 2020, there would be no coal industry in Ohio,
from which 87 percent of the state's electricity is generated.
Furthermore, coal-fired electricity costs about one-third the
cost of electricity from natural gas and it is even more
economic than that compared to nuclear power.
A better way to address the climate issue is by the plan
outlined by the President in February 2002, which as I stated
before, is based on science, research, technology, efficiency
and voluntary action. Such a proposal will determine whether
carbon dioxide reductions are really beneficial, or not. If
carbon dioxide reductions are proven to be necessary, we will
then be on our way. If not, we will be moving forward with
advanced clean coal technologies.
There currently are several initiatives in Washington that
will directly keep coal in the energy mix. On the Congressional
front, the U.S. House of Representatives just passed--and I
congratulate you for it--H.R. 4, the Energy Policy Act of 2003.
This legislation includes two important provisions that we
need--to get advanced technologies into coal-fired electricity
generating plants, existing plants, and to build new ones. H.R.
4 also includes the authorization for basic coal research for
the President's $2 billion clean coal power initiative, which
will demonstrate advanced clean coal technologies.
The aforementioned two provisions are also included in the
Senate Bill, S. 14, that is now being debated on the Senate
Floor. But S. 14 includes a third important element that was
left out of the House legislation. The Senate bill will include
the very important production and investment tax credits for a
limited number of plants, to encourage rapid use of advanced
new clean coal technologies. It is important, Congressmen, that
you support these provisions in the Conference, which I know
you will.
Not only is the coal industry opposed to mandatory
reductions of carbon dioxide emissions, we are also opposed to
a program that would require mandatory reporting on emissions
as well as the schemes that would lead to carbon dioxide
emissions trading. The voluntary approach that the industry is
supporting will be the best way to preserve Ohio and tri-state
area jobs and hold down electric rates for households and
factories that must compete in the global marketplace.
The coal industry in the United States at this time is
being economically devastated. Practically all the major
eastern U.S. coal producers are currently unprofitable or
currently in bankruptcy. This is largely the result of the
depressed economy, huge amount of construction of new natural
gas-fired electric generating units during the Clinton/Gore
years, and the importation of cheap coal from South America.
This is the worst possible time for some in Congress to be
advocating any mandatory requirements regarding carbon dioxide
emissions measuring, reductions or trading.
Mr. Chairman, Congressman Ney, we commend you for holding
this field hearing on the devastating effects that any attempt
to put restrictions on carbon dioxide emissions would have on
the people and communities of this tri-state area of the Ohio
River Valley. As I stated previously, the Kyoto Protocol and
proposed carbon dioxide emission reductions is a human issue to
me, rather than environmental, as I know the names of many of
the individuals in this area whose jobs, lives and quality of
life would be destroyed under the Kyoto Treaty or any other
program for mandatory reductions in carbon dioxide emissions.
Thank you very much.
[The prepared statement of Mr. Murray follows:]
Statement of Robert E. Murray, President and Chief Executive Officer,
Murray Energy Corporation
Chairman Pombo and Congressman Ney, my name is Robert E. Murray,
and I am President and Chief Executive Officer of Murray Energy
Corporation (``Murray Energy''), which employees about 2,500 persons in
the most economically depressed areas of the United States. Our
Subsidiaries, American Energy Corporation, Maple Creek Mining, Inc.,
and The Ohio Valley Coal Company, employ about 1,400 persons in the
tri-State Ohio River Valley area, and nearly 1,000 people here in
Belmont County.
Studies at The Pennsylvania State University have shown that up to
eleven (11) secondary jobs are created for each coal industry position
that we provide, thus making our Companies responsible for almost
17,000 jobs in this tri-State area, and nearly 12,000 positions in
Eastern Ohio.
But, this is not where our tremendous beneficial impact on this
region stops. Our mining employees typically earn twice the average
household wage in Ohio and two-and-one-half times the median wage for
this area. American Energy Corporation's Century Mine here in Belmont
County is the largest single economic development in Ohio in recent
years, representing an over $300 million investment in our area.
The subject of the ``Kyoto Global Warming Treaty'' is a human
issue, not an environmental matter, to me, Chairman Pombo and
Congressman Ney. You see, I know the names of many of the people whose
jobs, standards of living, and lives would be destroyed in this area if
the United Nations' ``Kyoto Global Warming Treaty'' were ever adopted
by the United States.
This region is desperate for good paying and well-benefitted jobs.
Our people just want to earn a reasonable living with honor and
dignity. Our young people want to stay in the area and have good
employment. Many times grown men and women have broken down and cried
in my office when I told them that we had a job for them. They know
that, with the high pay and excellent benefits provided by coal mining,
they can build the lives of their dreams, be with their families, and
retire with dignity.
But, this region came close to being economically devastated, as
the Administration of Bill Clinton and Albert Gore signed the United
Nations' Kyoto Protocol on so-called global warming and for years urged
its passage by the United States Senate. Wisely, the Senate would not
ratify their draconian treaty. Passage of the United Nations Kyoto
Protocol would have eventually eliminated the U.S. coal industry and
the 17,000 primary and secondary jobs for which my Companies are
responsible in this tri-State area. Indeed, the Clinton/Gore
Administration had a motto that they were going to ``dial out coal.''
Fortunately, President George W. Bush condemned the United Nations'
Kyoto Protocol soon after he took office and announced that our Country
would no longer be a part of this flawed agreement. On March 13, 2001,
President Bush said:
``As you know, I oppose the Kyoto Protocol because it exempts
eighty (80) percent of the world, including major population
centers, such as China and India, from compliance, and would
cause serious harm to the U.S. economy.'' 1
---------------------------------------------------------------------------
\1\ Letter from President Bush to Senator Chuck Hagel, March 13,
2001.
---------------------------------------------------------------------------
President Bush has chosen an entirely different way to address the
climate issue, one based on research, technology, and voluntary action.
This path will encourage economic growth, not stifle it. It will allow
greater use of our Nation's most abundant and lowest cost energy
source, coal, rather than devastate the industry and this area.
The President has received much pressure from radical
environmentalists and no-growth advocates in the U.S., as well as the
international community, to reverse his decision. But, even the most
ardent of supporters of the Protocol, the members of the European
Community, who are using this issue to gain economic advantages over
the U.S. for their products in the global marketplace, are having
difficulty achieving the mandatory carbon dioxide emissions reductions
that they set for themselves. And, it is important to point out that
the Kyoto Treaty has yet to go into force.
Very importantly, there is no scientific consensus that so-called
global warming is even occurring. Moreover, there is no scientific
evidence that human activities are responsible.
As an engineer, I have followed the so-called global warming matter
for more than two decades. The best analysis that I have read is that
prepared by Professor Bjorn Lomborg, an academic who is a former
Greenpeace member and devoted environmentalist. Dr. Lomborg has
compared the projected changes in the world's temperatures for the next
one hundred years--both with the Kyoto Treaty and without. Dr. Lomborg
has concluded that:
LIf we observe the Kyoto Treaty by enforcing all of its
provisions, by the year 2100 (when our new granddaughter will be 97
years old), the temperature is expected to increase by 1.92 degrees
Celsius.
LWithout implementation of the Kyoto Treaty, the
temperature will reach that level by 2094 (when our granddaughter will
be 91 years old), six (6) years sooner than with the Protocol.
LIn 2010, compliance with the Kyoto Treaty will cost $350
billion per year, increasing to nearly one trillion dollars annually by
2050. To put this into perspective, Professor Lomborg calculates that,
for $200 billion per year, every human being on Earth could have clean
drinking water and sanitation, saving two million lives each year.
Mandatory restrictions on carbon dioxide emissions, whether imposed
by the United Nations' Kyoto Protocol or by restrictions such as those
currently being proffered by some Senators, would have a devastating
effect on the communities in this tri-State area. The Kyoto Treaty
would require a reduction of greenhouse emissions to seven percent (7%)
below 1990 levels by 2008, notwithstanding that there is no scientific
evidence that proves that such reductions are beneficial or necessary.
Our Nation would have to reduce emissions by close to forty percent
(40%) from current levels in just five (5) years to meet the draconian
Kyoto Treaty goals. We applaud President Bush for recognizing the Kyoto
Treaty for what it is, a political agreement pushed by the Clinton/Gore
Administration with no regard for America's economy or citizens, and
particularly those in this area.
Regarding the economic devastation of the ill-conceived Kyoto
Treaty, the most recent study by the Heartland Institute 2
showed that if emissions had to be reduced to 1990 levels--and that is
not as low as the Kyoto Treaty would have required--the Ohio state
government would lose a minimum of $1.2 billion in revenue annually,
and consumers and businesses in our State would pay $3.2 billion and
$32 billion, respectively, more for Federal and state programs to
reduce carbon dioxide emissions.
---------------------------------------------------------------------------
\2\ Blast, J. L., Taylor, J. M., Lehr, J. (2003). State Greenhouse
Gas Programs: An Economic and Scientific Analysis. The Heartland
Institute. Policy Study 101.
---------------------------------------------------------------------------
Furthermore, based on the Heartland Institute study, each household
in Ohio would pay over $8,000 per year for just the reduction to 1990
levels, and reaching the Kyoto Treaty targets would cost every Ohio
household $14,000 annually. Clearly, these numbers prove the folly of
even thinking about agreeing to mandatory carbon dioxide controls in
any form.
As for coal, there would be very little production of this fuel in
the United States under a Kyoto type regime. The Energy Information
Administration of the U.S. Department of Energy, analyzed the affects
of a Kyoto Treaty on the energy markets and determined that it would
cause a sixty-seven (67%) reduction in National coal production levels
by 2010, and a 90% drop by 2020. 3
---------------------------------------------------------------------------
\3\ Energy Information Administration (1998). Impacts of the Kyoto
Protocol on U.S. Energy Markets and Economic Activity. U.S. Department
of Energy. SR/OIAF/98-03.
---------------------------------------------------------------------------
In short, by 2020 there would be no coal industry in Ohio, from
which eighty-seven percent (87%) of the State's electricity is
generated. Furthermore, coal fired electricity costs about one-third
(1/3) that from natural gas fired generation, and is even more
economical than this over nuclear generated electricity.
A better way to address the climate issue is by the plan outlined
by President Bush in February, 2002, which, as I have stated before, is
based on science, research, technology, efficiency, and voluntary
actions. Such an approach will determine whether carbon dioxide
emission reductions are beneficial or necessary, or not. If carbon
dioxide reductions are proven to be necessary, we will be on our way.
If they are not, we will still be moving well down the road to the more
efficient use of coal with new technologies.
There currently are several initiatives in Washington that will
directly keep coal in the energy mix. On the Congressional front, the
U.S. House of Representatives has just passed H.R. 6, the Energy Policy
Act of 2003. This legislation includes two important provisions that we
need to get advanced clean coal technologies into existing coal fired
electricity generating plants and to build new ones. H.R. 6 also
includes authorization for basic coal research and for the President's
$2 billion Clean Coal Power Initiative, which will demonstrate advanced
clean coal technologies.
The aforementioned two provisions are also included in the Senate
Bill, S. 14, that is now being debated on the Senate floor. But, S. 14
includes a third important element that was left out of the House
passed legislation. The Senate Bill will include very important
production and investment tax credits for a limited number of plants to
encourage rapid use of new advanced clean coal technologies. It is
important, Mr. Chairman and Congressman Ney, that you support the
inclusion of these tax provisions in the final bill that goes to the
President's desk.
Another important initiative that the Administration has announced
is the FutureGen Program, which is a $1 billion, ten (10) year,
demonstration project to create the World's first coal-based, zero
emissions, electricity and hydrogen power plant. The plant will capture
carbon dioxide emissions and will be coupled with carbon sequestration
so that it is literally a zero emissions plant. Over the long term,
coal can be the major source for hydrogen energy for our Country.
Mr. Chairman, not only is the coal industry opposed to mandatory
reductions of carbon dioxide emissions, we are also opposed to programs
that would require mandatory reporting on emissions, as well as schemes
that would lead to carbon dioxide emissions trading. The voluntary
approach that the industry is supporting will be the best way to
preserve Ohio and tri-State area jobs and hold down electric rates for
our households and our factories that must compete in the global
marketplace.
The coal industry in the United States, at this time, is being
economically devastated. Practically all of the major eastern U.S. coal
producers are unprofitable or are currently in bankruptcy. This is
largely the result of the depressed economy, huge amount of
construction of new natural gas fired electricity generating units
during the Clinton/Gore years, and importation of cheap coal from South
America. This is the worst possible time for some in Congress to be
advocating any mandatory requirements regarding carbon dioxide emission
measuring, reductions, or trading.
Mr. Chairman and Congressman Ney, we commend you for holding this
field hearing on the devastating effects that any attempt to put
restrictions on carbon dioxide emissions would have on the people and
communities in this tri-State area of the Ohio River Valley. As I
stated previously, the Kyoto Treaty and proposed carbon dioxide
emission reductions is a human issue with me, rather than
environmental, as I know the names of many of the individuals in this
area whose jobs, lives, and quality of life would be destroyed under
the Kyoto Treaty or any other program for mandatory reductions in
carbon dioxide emissions.
Thank you.
______
The Chairman. Thank you. Mr. Grisham.
STATEMENT OF JOHN GRISHAM, PRESIDENT,
BUCKEYE INDUSTRIAL MINING CO.
Mr. Grisham. Mr. Chairman, Congressman Ney, ladies and
gentlemen, my name is John Grisham. I am the President of
Buckeye Industrial Mining Company, a small, northern
Appalachian coal company with a large multi-county employment
impact. I am honored to be included in the distinguished group
from whom you will hear testimony today, and I thank you for
coming to Ohio to hear from Ohioans, among others, on the
critically important issue of the economic impact of climate
change policy.
As I look at the testimonial subject before the Committee,
I know that today you will hear about large numbers of miners
whose livelihood is threatened by the policy initiatives being
considered under the umbrella of the Kyoto Global Warming
Treaty. You will hear about the employment multiplier of mining
jobs which ranges from seven to ten to one, depending upon the
source. You will hear about the scarcity of employment
alternatives in the regions where coal is mined and the lack of
opportunity which even approaches the compensation levels found
in the mining industry. You will hear that as the mining
industries, so goes the regional economy.
Of course, we have all heard it said that these are
colloquial concerns and as such do not deserve consideration in
the context of a global issue like climate change and its
myriad catastrophic implications. I believe that this is the
logical flaw in the debate, as the social and economic
consequences of the Kyoto Treaty in our coal fields are a
microcosm of the consequences to the American economy and
society in general. I am sure that the members of this
Committee have heard this same argument before, probably many
times. It is the fact that there are those among our national
leaders who continue to flirt with global regulation of CO2,
carbon taxes, et cetera, while the science is so widely debated
and disputed that it gives many of us pause. Do they understand
the consequences? And if so, why are they willing to act so
precipitously with the future of our nation's economy at stake.
I would be remiss not to digress to the point that I
consider my association with coal miners to be one of the most
gratifying parts of my professional experience, the experience
which began with a few years as a line officer among the proud
professionals of the U.S. Army. Coal miners are very much like
soldiers, as they too are justifiably proud professionals. They
are among the most productive workers anywhere. Every time the
bar is raised to do more, they meet the challenge with
determination and grit and a bring-it-on attitude which has
consistently met the energy challenge of America. They do their
work with the intense pride and professionalism that come only
from the confident knowledge that they are doing a very
difficult and very important job, very well.
Having said all that, we must broaden our vision to include
all of Ohio. We must look up the Ohio River at the remnants of
the beleaguered Ohio Valley steel industry, which as we all
know is scrambling for any slight advantage in the global
marketplace. We can look across the state to see of the steel,
automotive, chemical and petrochemical, light and heavy
manufacturing, et cetera companies which combine to make Ohio
one of the most significant industrial states in our country.
Low-cost electricity has been the foundation of keeping and/or
attracting industry to Ohio.
It is appropriate to expand this vision once more to
include all of the industrial base of this country and to
evaluate its dependence upon readily available, reliable, low-
cost electricity. Let us face it, coal-fired electricity is
alone in its ability to satisfy all of these requirements
simultaneously. We cannot dismiss the value of competing fuels
in the total energy mix or even in the generation of
electricity, nor can we dismiss the environmental
considerations associated with the different sources of
electric power. But we certainly cannot put them on equal
footing with coal when it comes to meeting the requirements of
the electricity consuming industries of America. And of course,
these industries are the employers of many millions of
Americans across our nation.
Meeting these energy requirements with reliable, readily
available and low cost is not a choice in the marketplace of
employment. And Americans must not be misled when it comes to
the competitive importance of electricity in the global
economy. They cannot be lured into believing that the costs of
environmental policy can always be defined as a few cents on
your household electric bill.
We must carefully contemplate our national interest as
separated from the stated goals of the world community as
enumerated by the United Nations. In the Iraqi war, Americans
have been jolted by the positions of the United Nations and our
presumed allies like the French and Germans. We have discovered
that their perspectives are dramatically and primarily
influenced by self-interest as it relates to the war.
So it is with the Kyoto Treaty. Simply stated, many see the
overwhelming strength of the United States as an impediment to
development in other countries and as an obstacle to a future
world government as envisioned by some at the United Nations
and elsewhere. David Wojick of the Electricity Daily commented
in Insight Magazine, March 12, 2001 that the U.N.'s
Intergovernmental Panel on Climate Change message is
``painfully simple. What the IPCC is doing is not science. It
is politics--specifically the politics of global governance.''
Part of the American advantage is the availability,
reliability and cost of energy in general and electricity in
particular. Many observers believe the Kyoto Treaty has coal in
its cross hairs for the very reason of its significance to the
U.S. economy. We must ask that our political leaders not allow
the disguise of political and economic objective as a
legitimate environmental one. We must guard against what Dr.
Thomas Hopkins of the Rochester Institute of Technology
described as ``good intentions gone awry''. He went further to
describe air policy in this country as the ``coupling of noble
intentions with tunnel vision.''. That Americans embrace
protection of the environment is a good thing, that they run
the risk of being cynically abused for their good intentions is
a bad thing. Indeed, Wifred Beckerman of Oxford University has
produced a new book which says it all. It is aptly titled A
Poverty of Reason, Sustainable Development and Economic Growth,
and strongly suggests that we risk doing great harm to the
biosphere by taking precipitous action to protect it.
Implementation of the Kyoto Treaty will involve a cap and
trade scheme which has been rightfully described as nothing
less than a monumental wealth transfer, primarily from the
United States and primarily to those countries which have
generated credits since the base year and to the developing
countries which are exempt from the caps anyway. One can
envision large amounts of money going to, for example, Germany
with a large number of credits created by the absorption of
former East Germany with its major original pollution problems.
The distinguished economist, Dr. Murray Weidenbaum, now at
Washington University in St. Louis and formerly Chair of the
White House Council of Economic Advisors, made a typically to
the point presentation to the Committee on New American
Realities of the National Policy Association in the fall of
1997. Called ``An Agnostic Examination of the Case for Action
on Global Warming,'' it is an eloquent presentation of the case
against taking action against global warming, specifically
because of the real and potential economic consequences. One of
the issues which Dr. Weidenbaum takes up is the comparison of
the global cap and trade scheme with the domestic SO2 program
under the Clean Air Act Amendments of 1990. He says, ``Here is
one time, however, that consideration should be given to the
distributional aspects of the proposal; that is, who benefits
and who bears the costs. Such analysis shows the unexpected
result that emissions trading among nations is, in effect, a
massive shift of income and wealth....I do not see any support
among Americans for that type of stealthy cross-border
philanthropy.''
I was not invited to comment on the science of Global
Climate Change, and noting that Dr. Christy will testify, I
certainly do not feel so compelled, much less qualified. I
believe that prominent climatologists, astrophysicists and
other atmospheric scientists are the only persons qualified to
guide us in the debate over the science of global climate
change.
In conclusion, we should hope that we have the patience and
determination to allow adequately funded scientific research to
progress without interference from those who seek to manipulate
the subject for political or economic gain.
Thank you very much.
[The prepared statement of Mr. Grisham follows:]
Statement of John Grisham, President,
Buckeye Industrial Mining Company
Mr. Chairman, Members of the Committee, Ladies and Gentlemen, my
name is John Grisham. I am the President of Buckeye Industrial Mining
Co, a small northern Appalachian coal company with a large, multi-
county, employment impact. I am honored to be included in the
distinguished group from whom you will hear testimony today, and I
thank you for coming to Ohio to hear from Ohioans, among others, on the
critically important issue of the economic impact of climate change
policy.
As I look at the testimonial subject before the Committee, I know
that today you will hear about large numbers of miners whose livelihood
is threatened by the policy initiatives being considered under the
umbrella of the Kyoto Global Warming Treaty. You will hear about the
employment multiplier of mining jobs which ranges from 7:1 to 10:1 in
Appalachia, depending upon the source. You will hear about the scarcity
of employment alternatives in the regions where coal is mined, and the
lack of opportunity which even approaches the compensation levels found
in the mining industry. You will hear that as the mining industry goes,
so goes the regional economy. Of course, we have all heard it said that
these are colloquial concerns and as such do not deserve consideration
in the context of a global issue like climate change with its myriad
catastrophic implications. I believe this is the logical flaw in the
debate, as the social and economic consequences of the Kyoto Treaty in
our coal fields are a microcosm of the consequences to the American
economy and society in general. I'm sure that the members of this
Committee have heard this same argument before, probably many times. It
is the fact that there are those among our national leaders who
continue to flirt with global regulation of CO2, carbon taxes, etc.,
while the science is so widely debated and disputed by professionals in
the science of climate change, that gives so many of us pause. Do they
understand the consequences, and if so, why are they willing to act so
precipitously with the future of our nation's economy at stake? I would
be remiss not to digress to the point that I consider my association
with coal miners to be one of the most gratifying parts of my
professional experience, experience which began with a few years as a
line officer among the proud professionals of the U.S. Army. Coal
miners are very much like soldiers as they, too, are justifiably proud
professionals. They are among the most productive workers anywhere.
Every time the bar is raised to do more, they meet the challenge with
determination and grit and a ``bring it on'' attitude which has
consistently met the energy challenge of America. They do their work
with the intense pride and professionalism that come only from the
confident knowledge that they are doing a very difficult and very
important job very well.
Having said all of that, we must broaden our vision to include all
of Ohio. We can look up the Ohio River at the remnants of the
beleaguered Ohio Valley steel industry which, as we all know, is
scrambling for any slight advantage in its global marketplace. We can
look across the state to see more of the steel, automotive, chemical
and petrochemical, light and heavy manufacturing, etc., companies,
which combine to make Ohio one of the most significant industrial
states in our country. Low-cost electricity has been at the foundation
of keeping and/or attracting industry to Ohio.
It is appropriate to expand this vision once more to include all of
the industrial base of this country, and to evaluate its dependence
upon readily available, reliable, low-cost electricity. Let's face it,
coal-fired electricity is alone in its ability to satisfy all of these
requirements simultaneously. We cannot dismiss the value of competing
fuels in the total energy mix or even in the generation of electricity,
nor can we dismiss the environmental considerations associated with the
different sources of electric power. But we certainly cannot put them
on equal footing with coal when it comes to meeting the requirements of
the electricity-consuming industries of America. And, of course, these
industries are the employers of many millions of Americans across our
nation. Meeting these energy requirements- reliable, readily available
and low cost- is not a ``choice'' in this marketplace of employment,
and Americans must not be misled when it comes to the competitive
importance of electricity in the global economy. They cannot be lured
into believing that the cost of environmental policy can always be
defined as a ``few cents on your household electric bill''.
We must carefully contemplate our national interests as separate
from the stated goals of the world community as enumerated by the
United Nations. In the Iraqi War Americans have been jolted by the
positions of the UN and of presumed allies like the French and Germans.
We have discovered that their perspectives are dramatically and
primarily influenced by self-interest as it relates to the war. So it
is with the Kyoto Treaty. Simply stated, many see the overwhelming
strength of the U.S. as an impediment to development in other
countries, and as an obstacle to a future world government as
envisioned by some at the UN and elsewhere. David Wojick of Electricity
Daily commented in Insight (March 12, 2001) that the UN's
Intergovernmental Panel on Climate Change (IPCC) message ``is painfully
simple. What the IPCC is doing is not science. It is politics-
specifically, the politics of global governance.'' Part of the American
advantage is the availability, reliability and cost of energy in
general, and electricity in particular. Many observers believe that The
Kyoto Treaty has coal in its crosshairs for the very reason of its
significance to the U.S. economy. We must ask that our political
leaders not allow the disguise of a political and economic objective as
a legitimate environmental one. We must guard against what Dr. Thomas
D. Hopkins of the Rochester Institute of Technology described as ``good
intentions gone awry''. He went further to describe air policy in this
country as the ``coupling of noble intentions with tunnel vision''.
That Americans embrace protection of the environment is a good thing,
that they run the risk of being cynically abused for their good
intentions is a bad thing. Indeed, Wilfred Beckerman of Oxford
University has produced a new book which says it all. It is aptly
titled A Poverty Of Reason, Sustainable Development and Economic
Growth, and strongly suggest that we risk doing great harm to the
biosphere by taking precipitous action to protect it.
Implementation of the Kyoto Treaty will involve a cap and trade
scheme which has rightly been described as nothing less than a
monumental wealth transfer, primarily from the US, and primarily to
those countries which have generated credits since the base year, and
to the developing countries which are exempt from the caps anyway. One
can envision large amounts of money going to, for example, Germany with
a large number of credits (created by the absorption of former East
Germany with its major air pollution problems). The distinguished
economist, Dr. Murray Weidenbaum, now at Washington University in St.
Louis and formerly Chair of the White House Council of Economic
Advisors, made a typically to the point presentation to the Committee
on New American Realities of the National Policy Association in the
fall of 1997. Called ``An Agnostic Examination of the Case for Action
on Global Warming'',it is an eloquent presentation of the case against
taking action against global warming, specifically because of the real
and potential economic consequences. One of the issues which Dr.
Weidenbaum takes up is the comparison of the global cap and trade
scheme with the domestic SO2 trading program under the Clean Air Act
Amendments of 1990. He says, ``Here is one time, however, that
consideration should be given to the `distributional' aspects of the
proposal, that is, who benefits and who bears the costs. Such analysis
shows the unexpected result that emissions trading among nations is, in
effect, a massive shift of income and wealth...I do not see any support
among Americans for that type of stealthy cross-border philanthropy.''
I was not invited to comment on the science of ``Global Climate
Change'', and noting that Dr. Christy will testify, I certainly do not
feel so compelled, much less qualified. I believe that prominent
climatologists, astrophysicists, and other atmospheric scientists are
the only persons qualified to guide us in the debate over the science
of global climate. In conclusion, we should hope that we have the
patience and determination to allow adequately funded scientific
research to progress without interference from those who seek to
manipulate the subject for political or economic gain.
______
The Chairman. Thank you very much. Mr. Ungurean.
STATEMENT OF CHARLES UNGUREAN, PRESIDENT,
OXFORD MINING COMPANY
Mr. Ungurean. Good morning. My name is Charles Ungurean.
Chairman Pombo, Congressman Ney, I thank you for the
opportunity to be here today to testify before the Committee on
Resources.
I am President and CEO of Oxford Mining Company, the
largest producer of surface mined coal in Ohio.
Oxford currently employs more than 300 employees. We have
operations in nine strategically located Ohio counties,
producing coal from six different coal seams. With our current
coal reserves, we can maintain these production rates for the
next 25 years, as long as Ohio utilities continue to burn Ohio
coal.
I also serve as Chairman of the Ohio Coal Association. The
Ohio Coal Association represents producers, brokers and other
related industry members with the aim of advancing the
development and utilization of Ohio coal as an abundant and
environmentally sound energy source. The association exists in
large part because we employ more than 2600 Ohioans, and
because Ohio coal producers know there is a 400-year reserve of
affordable and increasingly clean Ohio waiting to be used to
generate electricity.
Our association commissioned a study in late 2002 of the
economic benefits of Ohio's coal industry to the state. The
study found that Ohio's coal industry provided a total economic
benefit of $3 billion to the state. More than $450 million of
that is in direct benefits, such as payroll taxes and salaries.
Despite the significant benefits of coal for Ohio, and for
our nation, there are proposals that threaten to negatively
impact our industry and jeopardize the high-wage coal industry
jobs that are of paramount importance in Appalachian Ohio. One
of those proposals is the Kyoto Protocol, also known as the
United Nations Treaty on Global Climate Change.
Implementation of the Kyoto Protocol would devastate the
coal-based electricity industry in Ohio and the nation. In
1998, the U.S. Energy Information Agency, which is the U.S.
Department of Energy's forecasting arm, found that coal would
fuel less than 10 percent of all electricity generation in the
U.S. under the greenhouse gas reductions called for by the
Kyoto Treaty. That would mean about an 80 percent reduction in
coal's electric-generation market share. The resulting impact
on Ohio's coal industry would be crippling--mine closings, job
loss and severe economic fallout.
President Bush made the right decision to reject the Kyoto
Protocol in March of 2001, refocusing the debate instead on
policy based on technological innovation and economic
incentives. History shows us that this will result in greater
emissions reductions with lower economic costs to U.S.
consumers and businesses.
Today, coal provides the fuel for nearly 90 percent of
Ohio's electricity and is a major reason Ohioans enjoy
affordable energy. On average, coal is available at about half
the cost of other fossil fuels, and the state's abundant
reserves can ensure that Ohioans will have a ready, reliable
supply of affordable energy close at hand for generations to
come. Coal plays an important role in keeping electric power
costs competitive, which is critical to the survival of Ohio's
strong manufacturing sector. Directly and indirectly,
manufacturing provides more than half of all jobs in the state.
While affordable energy is good news, coal's opponents
continue to challenge the viability of coal as an energy
resource due to air quality concerns. However, the data
suggests that this is an extreme point of view.
Ohio has made significant environmental progress since the
Clean Air Act became law in the 1970's. The Ohio Environmental
Protection Agency recently released its new 30-year air quality
trend report and found that Ohio's air quality has improved
substantially during the last 30 years. The report analyzed
air-monitoring data collected in Ohio between 1972 and 2001 for
six pollutants for which national air-quality standards have
been established. During a period when the use of coal to
generate electricity has tripled nationally, the levels of six
major air pollutants regulated by the Clean Air Act declined
dramatically in Ohio.
One major reason for our improved air quality is the
development and deployment of clean coal technologies--an area
where Ohio has established itself as a national leader. These
technologies are being developed and refined at places like
Ohio University and they are in use at several coal plants
across the state.
America's electric utilities have invested more than $50
billion in clean-coal technologies, and millions of dollars of
state and Federal monies have been leveraged to maximize the
benefits of clean-coal technologies. With additional
investments in clean coal technologies by both the public and
private sector, we can reasonably look forward to a future
where coal can continue to provide economic benefits as a low-
cost source of energy and our air quality can continue to
improve through enhanced environmental efficiencies.
Again, thank you for the opportunity to testify here today.
[The prepared statement of Mr. Ungurean follows:]
Statement of Charles C. Ungurean, President, Ohio Coal Association,
President and CEO, Oxford Mining Company
Good morning. My name is Charles Ungurean. Chairman Pombo,
Congressman Ney--I thank you for the opportunity to be here today to
testify before the Committee on Resources.
I am President and CEO of Oxford Mining Company, the largest
producer of surface mined coal in Ohio. In 2002, our sales exceeded 3.1
million tons and we expect that production will reach 3.5 million tons
by the end of 2003. About 80 percent of this coal goes to American
Electric Power generating stations in Ohio.
Oxford currently employs more than 300 employees. We have nine
operations strategically located in seven counties producing coal from
six different coal seams. We have taken advantage of changes in the
Ohio coal market to dramatically increase production. Between 1996 and
2003, production rose from 500,000 tons to 3.5 million annually,
resulting in a market share jump from 2 to 16 percent. With our current
coal reserves, we can maintain these production rates for the next 25
years, as long as Ohio utilities continue to burn Ohio coal.
I also serve as chairman of the Ohio Coal Association. The Ohio
Coal Association represents producers, brokers and other related
industry members with the aim of advancing the development and
utilization of Ohio coal as an abundant and environmentally sound
energy source. The association exists in large part because we employ
more than 2,600 Ohioans, and because Ohio coal producers know there is
a 400-year reserve of affordable and increasingly clean Ohio coal
waiting to be used to generate electricity.
Our association commissioned a study in late 2002 of the economic
benefits of Ohio's coal industry to the state. The study found that
Ohio's coal industry provided a total economic benefit of three billion
dollars to the state. More than 450 million dollars of that is in
direct benefits, such as payroll taxes and salaries.
Despite the significant benefits of coal for Ohio--and for our
nation--there are proposals that threaten to negatively impact our
industry and jeopardize the high-wage coal industry jobs that are of
paramount importance in Appalachian Ohio. One of those proposals is the
Kyoto Protocol, also known as the United Nations Treaty on Global
Climate Change.
Implementation of the Kyoto Protocol would devastate the coal-based
electricity industry in Ohio and the nation. In 1998, the U.S. Energy
Information Agency, which is the U.S. Department of Energy's
forecasting arm, found that coal would fuel less than 10 percent of all
electricity generation in the U.S. under the greenhouse gas reductions
called for by the Kyoto Treaty. That would mean about an 80 percent
reduction in coal's electric-generation market share. The resulting
impact on Ohio's coal industry would be crippling--mine closings, job
loss and severe economic fallout.
President Bush made the right decision to reject the Kyoto Protocol
in March 2001, refocusing the debate instead on policy based on
technological innovation and economic incentives. History shows us that
this will result in greater emissions reductions with lower economic
costs to U.S. consumers and businesses.
Today, coal provides the fuel for nearly 90 percent of Ohio's
electricity and is a major reason Ohioans enjoy affordable energy. On
average, coal is available at about half the cost of other fossil
fuels, and the state's abundant reserves can ensure that Ohioans will
have a ready, reliable supply of affordable energy close at hand for
generations to come. Coal plays an important role in keeping keep
electric power costs competitive, which is critical to the survival of
Ohio's strong manufacturing sector. Directly and indirectly,
manufacturing provides more than half of all jobs in the state.
While affordable energy is good news, coal's opponents continue to
challenge the viability of coal as an energy resource due to air
quality concerns. However, the data suggests that this is an extreme
point of view.
Ohio has made significant environmental progress since the Clean
Air Act became law in the 1970s. The Ohio Environmental Protection
Agency recently released its new 30-year air quality trend report and
found that Ohio's air quality has improved substantially during the
last 30 years. The report analyzed air-monitoring data collected in
Ohio between 1972 and 2001 for six pollutants for which national air-
quality standards have been established. During a period when the use
of coal to generate electricity tripled nationally, the levels of six
major air pollutants regulated by the Clean Air Act declined
dramatically in Ohio.
One major reason for our improved air quality is the development
and deployment of clean coal technologies--an area where Ohio has
established itself as a national leader. These technologies are being
developed and refined at places like Ohio University, and they are in
use at several coal plants across the state.
America's electric utilities have invested more than $50 billion in
clean-coal technologies, and millions of dollars of state and Federal
monies have been leveraged to maximize the benefits of clean-coal
technologies. With additional investments in clean coal technologies by
both the public and private sector, we can reasonably look forward to a
future where coal can continue to provide economic benefits as a low-
cost source of energy--and our air quality can continue to improve
through enhanced environmental efficiencies.
Again, thank you for the opportunity to testify today. I will be
pleased to answer any questions you have.
______
The Chairman. Thank you. Mr. Erdos.
STATEMENT OF BABE ERDOS, INTERNATIONAL EXECUTIVE BOARD MEMBER,
UNITED MINE WORKERS OF AMERICA,
DISTRICT 6
Mr. Erdos. Mr. Chairman and Congressman Ney, before I begin
my comments, I would like to thank you, Mr. Chairman, for
bringing your Committee hearing here to eastern Ohio and in the
heart of Ohio's coal country. I want to especially thank
Congressman Ney for all the hard work and dedication that he
has shown in representing Ohio's workers in trying to preserve
the jobs of the workers and trying to preserve industry in our
area.
I am Babe Erdos, an International Union Executive Board
Member of the United Mine Workers of America District 6. In
District 6, we have jurisdiction in all of Ohio and the
northern panhandle of West Virginia. Our union represents the
organized coal miners in District 6 and throughout the nation.
I personally have worked in the underground mines of eastern
Ohio, I had 8 years underground and for the past 21 years, I
have had the privilege of representing our members here in
District 6.
I address your Committee today as a member and
representative of an energy producing union. As an energy
producing union, we have a keen interest in any environmental
issues that may impact upon our members. As you will see from
the following figures, history has proven us to be right in our
concerns.
In 1970, the year the Clean Air Act was enacted, our union
represented over 10,000 workers. By the mid-1970's, due to some
contractual improvement with the coal operators, we actually
grew and had over 16,000 working members here in District 6. In
the early 1980's, District 6 had fallen to about 11,000
members, mostly due to the restrictions of the Clean Air Act.
By 1990, working membership had declined to about 4000. Today,
it is less than half of the 1990 levels. As you can see, nearly
90 percent of our members have lost their jobs in the coal
fields since our peak of the 1970's. Although I do not have
figures, we believe the non-organized sector of Ohio's coal
fields suffered a similar decline in their employment. The
northern panhandle of West Virginia also suffered a similar
fate during this timeframe.
Ohio's coal production has suffered greatly as well. In
1970, Ohio produced over 55 million tons of coal. In the last 4
years, Ohio's coal production has ranged between 20 and 25
million tons. This is in a state that has tremendous amounts of
coal reserves and a state that produces nearly 90 percent of
its electricity from coal.
With the uncertainty of future coal markets, it is
difficult for mining companies and owners to make large
investments in developing future operations. And I would say
that Mr. Murray--many of our members are at his mine--has been
one of the few operators that has been able to keep his head
above water due to his own tenacity in conducting his business,
and we appreciate that. But what happens to the other remaining
coal miners? What will happen to their families and communities
if our nation's policies were to dictate that the product they
produce is no longer acceptable to generate electricity? Coal
mining is a unique industry and profession. To many, it is more
of a culture than a profession. More often than not, mining is
located in the rural areas of our country. It is no different
in Ohio. There is little hope of acquiring another good paying
job with any benefits in these small rural communities. In
rural Ohio, many of these communities are based on one
industry. When coal mining, steel or other basic manufacturing
jobs are gone, it is difficult for these communities to
survive.
We all know that the workforce in Ohio's coal industry is
also growing older. Most of our coal miner members are third
and fourth generation miners. What happens to all of these
retirees who depend on coal production for their health care
coverage? Our union's health care funds spent over $25 million
in Ohio alone in 1995. That is the last year I had the figures.
And this does not reflect the costs of health care provided by
the employers, like these gentlemen to my right.
I have seen a study estimating a worse case scenario of
between 58,000 and 86,000 jobs lost in Ohio if the Kyoto
Protocol were implemented as it is proposed. Most of these jobs
will be lost in the manufacturing sector. It is estimated
another 38 percent of Ohio's coal jobs would be lost. As
Congressman Ney stated in his opening remarks, with over 3500
individuals working in the coal industry in Ohio today, another
more than 1200 would be losing their jobs. We in the UMWA
believe because of the uniqueness of the coal industry and the
rural settings of our miles and communities, the burdens of
Kyoto would fall unevenly on our region and on our industry.
Ohio is recognized as having one of the best Clean Coal
Technology programs in the country. In District 6, we believe
that environmental regulations and restrictions should be
achieved through the implementation of clean coal technologies.
This would protect jobs and protect rural communities.
Thank you.
[The prepared statement of Mr. Erdos follows:]
Statement of Babe Erdos, International Executive Board Member,
United Mine Workers of America--District Six
Mister Chairman and members of the Committee:
I am Babe Erdos, an International Union Executive Board Member of
the United Mine Workers of America (UMWA) District Six. District Six
has jurisdiction in all of Ohio and the northern panhandle of West
Virginia. Our union represents the organized coal-miners in District
Six and throughout our nation. I have worked in the underground coal
mines of eastern Ohio and for the past twenty one years, I have had the
privilege of representing our members here in District Six.
Mr. Chairman before I begin my comments I want to thank you for
bringing your Committee hearing to eastern Ohio and the heart of Ohio's
coal country. I want to especially thank Congressman Ney and
Congressman Strickland for their dedication and hard work in
representing Ohio's workers and industry.
I address your Committee today as a member and representative of an
energy producing union. As an energy producing union, we have a keen
interest in any environmental issues that may impact our members. As
you will see from the following figures, history has proven us right in
our concerns.
In 1970, the year the ``Clean Air Act'' was enacted, our union
represented over ten thousand (10000) workers. In the mid 1970's, we
had over sixteen thousand (16000) working members. In the early 1980's,
District Six still had about eleven thousand (11000) members working.
By the year 1990, working membership had declined to about four
thousand (4000). Today it is less than half of the 1990 levels. As you
can see, nearly ninety-percent (90%) of our members have lost their
jobs in the coal-fields since our peak of the 1970's level. Although I
do not have figures, the non-organized sector of Ohio's coal-fields
suffered a similar decline in employment.
The northern panhandle of West Virginia has suffered a similar fate
during this same time frame.
Ohio's coal production has suffered greatly as well. In 1970, Ohio
produced over fifty five million (55,000,000) tons of coal. In the last
four years, Ohio's coal production has ranged between twenty and twenty
five million (25,000,000) tons. This is in a state that has tremendous
amounts of coal reserves and a state that produces nearly ninety
percent (90%) of its electricity from coal.
With the uncertainty of future coal markets, it is difficult for
mining companies and owners to make large investments in developing
future operations. So what happens to our remaining coal miners? What
will happen to their families and communities if our nation's policies
were to dictate that the product they produce is no longer acceptable
to generate electricity? Coal mining is a unique industry and
profession. To many, it is more of a culture than a profession. More
often than not, mining is located in rural areas of our country. It is
no different in Ohio. There is usually little hope of acquiring another
good paying job with any benefits in these small rural communities. In
rural Ohio, many of these communities are based on ``one industry''.
When coal mining, steel or other basic manufacturing jobs are gone, it
is difficult for these communities to survive.
We all know the workforce in Ohio's coal industry is growing older.
Most of us are third and fourth generation coal miners. What happens to
all the retirees who depend on coal production for their health care
coverage? Our union's health care funds spent over twenty five million
dollars ($25,000,000) in Ohio alone in 1995. This doesn't reflect costs
of health care provided by employers.
I have seen a study estimating a worst case scenario of between
58,000 and 86,000 jobs lost in Ohio if the Kyoto Protocol were
implemented as it is proposed. Most of these jobs would be lost in the
manufacturing sector. It was estimated another thirty eight percent
(38%) of Ohio's coal jobs would be lost. We in the UMWA believe because
of the uniqueness of the coal industry and the rural settings of our
mines and communities the burdens of Kyoto would fall unevenly on our
region and industries.
Ohio is recognized as having one of the best Clean Coal Technology
Programs in the country. In District Six, we believe environmental
restrictions should be achieved through the implementation of clean
coal technologies. This would preserve jobs and protect rural
communities.
Thank you.
______
The Chairman. Thank you. Mr. Kosowski.
STATEMENT OF JAMES A. KOSOWSKI, DIRECTOR OF CORPORATE
COMMUNICATIONS, WHEELING-PITTSBURGH STEEL CORP.
Mr. Kosowski. Thank you, Chairman Pombo and Congressman
Ney, it is a privilege to be here today and to represent the
business community and the manufacturing community, to talk
about the effects that the Kyoto Agreement would have on the
businesses downstream of the coal industry.
As a representative of the business community, I can tell
you that there is clear evidence that the Kyoto Agreement, if
it is ever ratified and put into place in the United States,
would have huge costs to the United States economy and would
devastate the economy of the Ohio Valley. The Kyoto Agreement
would act as a smart bomb designed to eliminate manufacturing
in the United States while leaving behind unemployed workers.
The Ohio Valley not only produces coal, the Ohio Valley
burns coal to produce electricity and the Ohio Valley uses coal
to produce coke for the steel industry and it uses massive
amounts of electricity to make steel. Wheeling-Pittsburgh
Steel, for example, uses more than a million and a half tons of
coal a year to produce coke for its steel-making operations.
Increases in the cost of coal and the cost of electricity,
would have to be added to the cost of steel. The prices we pay
for cars, for food, for clothing produced in the United States
would all go up. The Energy Information Agency forecasts a loss
to the U.S. Gross Domestic Product at over $300 billion per
year because of any mandated emission cuts stemming from the
Kyoto Agreement. We are talking about a $300 billion tax
increase to U.S. consumers.
But those increases would not be equal throughout the
world. Jobs that would be eliminated in the United States would
pop up overseas in countries like China, India and Mexico,
which are exempt from making reductions in emissions.
Wheeling-Pittsburgh Steel is already spending more than $50
million every year to operate and maintain its pollution
control equipment, something that the steel industries in
developing countries like China and India do not do.
Should the United States regulate pollution emissions and
enforce those laws? Absolutely. Because pollution control is
demonstrated to have clear benefits to people's health and the
country's economy.
Should the United States agree to the Kyoto Agreement or
anything that would limit energy use in the United States while
exempting competing countries like China, India and Mexico?
Absolutely not. In fact, many people contend that the Kyoto
Agreement is not about the environment, it is about the
economy. It is about increasing the cost of manufacturing and
business in the United States, the world's most dynamic
economy, the world's largest economy and the world's most
efficient user of energy for manufacturing and business.
Wheeling-Pittsburgh Steel and its 3800 employees have
worked hard to reduce costs and increase the efficiency with
which they make steel. They have sacrificed through pay
reductions and the loss of jobs in order to increase their
competitiveness in the world market. It would be a serious
injustice to throw away those sacrifices to satisfy a global
agreement that clearly benefits this country's competitors at
the expense of the United States and its workers. I do not
believe there is any way that the U.S. steel industry could
compete in the world against countries that do not have to
conform to the Kyoto Agreement.
But it is not just Americans who oppose the Kyoto Agreement
who are saying that this is an economic issue. To quote Margot
Wallstrom, the European Union's Commissioner for the
Environment, global warming ``is not a simple environmental
issue where you can say it is an issue where scientists are not
unanimous. This is about international relations, this is about
the economy, about trying to create a level playing field for
big businesses throughout the world. You have to understand
what is at stake and that is why it is serious.''
I would like to say that we understand what is at stake.
What is at stake is Ohio Valley jobs, Ohio Valley
manufacturing, mining and energy businesses and our very
standard of living.
Thank you.
[The prepared statement of Mr. Kosowski follows:]
Statement of James A. Kosowski, Director of Corporate Communications,
Wheeling-Pittsburgh Steel Corporation, Wheeling, West Virginia
Kyoto Agreement Would Devastate the Ohio Valley
As most everyone knows, the Kyoto Agreement is designed to reduce
carbon dioxide emissions, thereby reducing so-called ``Greenhouse
Gases.'' The Kyoto Agreement says this is necessary to reverse a trend
of global warming that Kyoto Agreement backers say will have a
devastating impact on the world's environment. These conclusions are
drawn from computer models in which scientists input certain
assumptions and the computer generates conclusions.
The global warming conclusions, however, are by no means unanimous.
Scientists from major universities and study groups have come to
different conclusions about whether global warming is an actual trend.
Still others have convincingly pointed out that flaws in the
assumptions of the computer models make the conclusions about global
warming suspect.
I am not a scientist. All I know about the scientific discussions
regarding Greenhouse Gases is that there is disagreement among the
scientific community.
As a representative of the business community, I can tell you that
there is clear evidence that the Kyoto Agreement, if it is ever
ratified and put into place in the United States, would have huge costs
to the United States economy and would devastate the economy of the
Ohio Valley. The Kyoto Agreement would act as a ``smart bomb'' designed
to eliminate manufacturing in the United States, while leaving behind
unemployed workers.
Here is what the this agreement would do. The Kyoto Agreement would
reduce ``Greenhouse Emissions to a level that is 7 percent below their
1990 levels by 2012. Because the United States has experience
significant economic growth during much of that time that means
emissions would need to be reduced by 30%. The only way to reduce those
emissions by 30 percent is to reduce energy use. How much would 30
percent equal? That would be equivalent to the TOTAL amount of energy
used for transportation in 1996. So reducing energy use to meet the
accord would be tantamount to permanently stopping all highway, rail,
water and air traffic.
The Ohio Valley produces coal. The Ohio Valley burns coal to
produce electricity. The Ohio Valley burns coal and uses electricity to
make steel. Increases in the costs of coal and the cost of electricity
would have to be added to the cost of steel. The prices we pay for
cars, for food, for clothing produced in the United States would all go
up. The Energy Information Agency forecasts a loss of U.S. Gross
Domestic Product of roughly $300 billion per year because of any
mandated emission cuts stemming from the Kyoto Agreement. We are
talking about a $300 billion tax increase on U.S. consumers.
But these increases would not be equal throughout the world. Jobs
that would be eliminated in the United States would pop up overseas in
countries like China, India and Mexico--which are exempt from making
reductions in emissions.
Wheeling-Pittsburgh Steel is already spending more than $50 million
every year to operate and maintain its pollution control equipment--
something that the steel industries in developing countries like China
and India do not do.
Should the United States regulate pollution emissions and enforce
those laws? Absolutely! Because pollution control is demonstrated to
have clear benefits to people's health and the country's economy.
Should the United States agree to the Kyoto Agreement or anything
that would limit energy use in the United States while exempting
competing countries like China, India and Mexico? Absolutely not?
In fact, many people contend that the Kyoto Agreement is not about
the environment it is about the economy. It is about increasing the
costs of manufacturing and business in the United States--the worlds
most dynamic economy; the worlds largest economy; and the world's most
efficient user of energy for manufacturing and business.
Wheeling-Pittsburgh Steel and its 3,800 employees have worked hard
to reduce costs and increase the efficiency with which they make steel.
They have sacrificed through pay reductions and the loss of jobs in
order to increase their competitiveness in the world market. It would
be a serious injustice to throw away those sacrifices to satisfy an
global agreement that clearly benefits this country's competitors at
the expense of the United States and its workers.
And it is not just American's who oppose the Kyoto Agreement who
are saying this. To quote Margot Wallstrom, the European Union's
commissioner for the environment: global warming ``is not a simple
environmental issue where you can say it is an issue where scientists
are not unanimous. This is about international relations, this is about
economy, about trying to create a level playing field for big
businesses throughout the world. You have to understand what is at
stake and that is why it is serious.''
We understand what is at stake. What is at stake is Ohio Valley
jobs,. Ohio Valley manufacturing, mining and energy businesses and our
very standard of living.
______
The Chairman. Thank you.
You know, when the Kyoto Treaty was reached, I happened to
be in Australia on an Agriculture Committee trade trip. And
obviously we were--the Members of Congress that were on that
trip, were paying close attention to what was going on and had
some real concerns about it. I remember Al Gore flew in and
supposedly nailed down the deal.
The next day, the papers in Australia, headline above the
fold was trumpeting the agreement and how great it was going to
be for their economy that this was going in. And if you go back
and read those articles, nowhere in there did they talk about
the environment. They talked about what a benefit it would be
to their economy for this agreement to go into place. And
throughout the time that we were there, we were meeting with
all of their trade officials and they were absolutely giddy
with joy at the U.S. supposedly agreeing to this treaty and the
impact that it would have on them.
All of you have impacts from foreign competition in one way
or another, and that is the reality of the world that we live
in today. But I really do believe that by playing on a level
playing field, we can compete and agreements like the Kyoto
Treaty--and I agree with you--are more about the economy and
more about creating an unlevel playing field than they are
anything else.
We also have a somewhat different problem and that is that
when you are dealing with environmental issues, that is
something that we all care deeply about. None of us wants dirty
air, dirty water, none of us want species to become extinct,
and that is something that is a basic value that Americans hold
close. It is something we all care about, so it is also
something that it is easy to deceive people on.
I believe that agreements such as the Kyoto Treaty present
a false choice and that false choice is a clean environment or
a healthy economy. I do not believe we have to make that
choice. I believe that we can have a clean environment, that it
is possible to have a healthy, growing, vibrant economy in a
place like the Ohio Valley and have a clean environment. You
gentlemen talked about what you have done over the years to
improve clean coal technology and how much you have spent and
how fast we have improved on that. But there are those that we
have to deal with all the time that want to make the argument
that you cannot do that, that the only way to have a clean
environment is to shut down our industry.
I would like to ask Mr. Ungurean, to start with, when we
are dealing with that competition, that foreign competition
that is coming in and the impact it is having, are you at all
familiar with the environmental regulations, health and safety
regulations that your foreign competitors have and how that
compares to what we are doing here?
Mr. Ungurean. Just from what I read, you know, China is a
very good example. Basically they have practically no
environmental or safety standards for their coal mining
industry. I think it is widely reported that just reported
deaths in mining in China is over 25,000 a year.
The Chairman. Wait a minute, back up. The reported deaths
are 25,000 a year?
Mr. Ungurean. Yes.
The Chairman. Wow.
Mr. Ungurean. And, you know, they have little or no
regulations, both on safety and the environment. As was noted
by Mr. Murray, they--or someone here--they burn more coal than
we do. And for them to be exempt is just beyond my imagination
how that could happen.
The Chairman. Well--and I would like to give Mr. Grisham
and Mr. Murray a chance to answer that as well, but you know,
in the amount of time that I have been in the House, I have had
the opportunity to travel to a few of these different places
and look at what they are doing. And just in my experience,
most of these businesses would be shut down if they existed
here.
Mr. Grisham.
Mr. Grisham. Last week in the Wall Street Journal, there
was an article by John Fialco, no great friend of industry, who
was commenting basically on the phenomenon of a particulate
cloud which had been identified off the shore of Asia. And the
furor that came out of that was that this was--this particular
cloud had something to do with perhaps some global climate
trends and more than say CO2 accumulation or gas. It was an
interesting article because those who felt that the issue of
CO2 is critically important in propelling their particular
environmental arguments did not like to hear this other
opinion.
I would just like to say that I know that we all know that
pollution is a huge problem in the developing world, as is
poverty, and many of us believe that electrification is
critical to the elimination of poverty, which is the worst
enemy of the environment. And that what we should be doing is
developing the technologies in this country and maintaining the
economic strength to assist the rest of the world in this
evolutionary process. Their populations are not going to
diminish over the next 50 years, in fact they are going to grow
and they are having a difficult time coping now.
I happened to have specialized in international studies as
an undergraduate in Latin America, and I believe that the Latin
Americans in particular need a great deal of help from North
America, the United States in particular, in moving their
economies forward. And I do not believe that chopping away at
the strength of our own economy is going to do them any good at
all. Thank you.
The Chairman. Mr. Murray.
Mr. Murray. As you very well said, Mr. Chairman, this is
all about trying to maintain a level playing field in the
global marketplace for the products of the United States of
America and for the jobs of the people in our country.
I have been in the Chinese mines, I know that there is no
safety in those mines. I was a guest invited by the Ministry of
Mines of the People's Republic when it was Communist, to go
over and help them modernize their industry. And I would not
know where to start because the rules under which they operate,
both environmentally and safety-wise are so different--there is
no value on human life there.
Right now, our greatest threat is coal from Colombia and
Venezuela. I mentioned that in my remarks. They have no
reclamation requirements there--modest reclamation
requirements. And again, safety is not an issue. It is
devastating our coal industry in that this coal is now coming
into this country. So we are not playing on a level playing
field.
The Kyoto Protocol is not an environmental issue, to me it
is a human issue, as I said, but it is really, as you said,
sir, an economic issue. It is an issue where they would like to
see the United States wounded in our ability to produce
products competitively and see our electric rates go up.
The reason the Europeans, who are pushing this, want this
is because they have already done away with their coal industry
and replaced it with nuclear power, so basically under to Kyoto
Protocol of the United Nations, they do not have to do anything
and that has not been brought out here, but I know you know.
Under the Kyoto Protocol, they do nothing--the Brazilians, the
Chinese, the Indians and all the other developing countries
that burn most of the coal in the world are exempted.
So it is a target with the United States of America and the
jobs of eastern Ohio in the cross hairs. That is what the Kyoto
agreement is all about. You said it, sir, you know it very
well. Thank you.
The Chairman. Mr. Erdos, obviously in an area such as this
where unenployment has historically been high, with the
downturn in the economy, it gets that much worse. With an
industry like coal under attack, that has a serious impact on
you and the people that you represent. One of the things the
previous administration talked about, and I dealt with it out
in my area with timber workers and hard rock mining, was the
Administration at that time said we will replace these jobs
with other jobs and we will retrain the workers.
How successful has that been with your membership so far,
with retraining the workers and getting them into other
industries?
Mr. Erdos. Yes, Mr. Chairman. There are several programs
for dislocated workers. In fact, the United Mine Workers has a
program of their own called the UMWA Career Center, which has
actually had some success. I think the problem is, as I
mentioned in my remarks, that most coal miners are third and
fourth generation. I mean it is part of their culture, it is
part of their history. That is the job they wanted to join.
The other thing is in most of these rural areas, a lot of
times once they take the retraining, they have got to move away
because there is just limited amounts of job opportunities in
that field. So they have just got to move away.
As you know, getting back, Mr. Chairman, to the Kyoto
Treaty, I once heard our international president make a remark,
which I think was appropriate and along the lines you said,
this treaty certainly is, as the other gentlemen have said, is
not an environmental treaty. Our international president made
the comment, if you and I were neighbors and had a creek
running between us and I dumped battery acid in that creek for
5 years, now we say we want to clean it up but I say hey, I
dumped it in there 5 years, so in order for you to catch up, we
are going to let you dump battery acid in that creek for 5
years. Now what does that do for the environment? And that is a
little bit what this is about. We do not want to allow these
other Third World countries or whomever to pollute the
atmosphere. It is going to do very little for the environment.
I think President Bush is right on that.
The Chairman. I think that analogy is pretty accurate and I
am going to give Mr. Kosowski a chance to respond to that,
because the jobs that we lose here, the industry that we lose
here, is going to be replaced somewhere else. The steel that is
not produced here will be produced. It just will not be
produced here. The coal that is not mined here will still be
mined. It will just be mined somewhere else.
And when we are talking about foreign competition, right
now--so far, everything you gentlemen are talking about--the
health, safety, environment--those are all regulations that
exist right now. What the Kyoto Treaty tells you is that we are
not just going to make it more expensive for you to mine your
product or produce your product. What the Kyoto Treaty tells
you is we are going to make it so you cannot use your product.
So it goes beyond just the cost of production. It says you are
not using it any more.
Mr. Kosowski.
Mr. Kosowski. I think you are absolutely right. The steel
industry has been fighting for the last five or 6 years dealing
with illegally dumped steel imports into this country. As that
process has been going on, the steel industry has been
responding by reducing its costs, by improving its
efficiencies. We probably make--we make definitely more steel
today than we ever have as a company and we do it with probably
half as many employees as we had 12 or 13 years ago. So we have
made very difficult decisions and taken very difficult actions
to improve our efficiency. But there is no way that the steel
industry could continue to operate when the electricity costs
go up by significant amounts in the United States and do not
budge in developing countries. And we have found that
developing countries like the steel industry not only for what
it does to their own country, provides a lot of employment, it
provides the infrastructure that we know develops around a
steel mill. But they do it because they can export their steel
products to the United States. We do not produce all the steel
that we need in this country.
And when you put a handicap on the steel industry of
significantly higher electricity costs, significantly higher
coal costs because of producing coke, it would just have--it
would be an insurmountable of handicap on this industry. And I
do not believe that when the steel industry disappears in the
United States, that you are going to be able to find cheap
foreign alternatives.
The Chairman. Thank you. Mr. Ney.
Mr. Ney. Thank you, Mr. Chairman.
A generic question I would have for anyone to answer,
besides obviously defeating the Kyoto Treaty, which we need to
do or we are not going to be in existence, what else can we do
at the Federal level since coal is at the lowest demand in
years. Besides defeating Kyoto, which is the purpose of getting
people on the record and doing what people are doing across the
country, what we are doing today, giving testimony, what else
could we do?
Mr. Murray. Mr. Chairman, you have got a good start on H.R.
4 that you have passed out of the House over to the Senate. We
need to give electric utilities in the United States incentives
to install clean coal technologies. Coal can be burned cleanly
and coal-fired electricity is less than half the cost of
natural gas-fired electricity, and we can burn coal as cleanly
as natural gas. We need to add the clean coal incentives, both
the production tax credits and the incentive tax credits in the
Senate, in the conference of the bill that you have with the
Senate now. That is one thing we need to do.
The President's Clear Skies Initiative is another. This
will provide certainty for electric utilities as to what the
rules are in America. It has been a moving target under the
past administration. While the Clear Skies Initiative provides
for more severe cuts in sulfur dioxide, nitrous oxides, mercury
emissions, it will provide certainty and it will also be an
incentive for clean coal technology.
Right now, we have a national energy policy of putting coal
that is 20 percent water out of Wyoming and Montana, hauling it
clear across the United States 3400 miles in locomotives
burning Arab oil and then those trains go back to Wyoming and
Montana, all the way from Ohio empty. That is our national
energy policy.
What we need is the Clear Skies Initiative combined with
the incentives to install clean coal technology and then the
domestic coal industry here in eastern Ohio and the panhandle
of West Virginia, and western Pennsylvania, will come back. We
will not be spending all of this money for coal transportation
and for Arab oil to fuel those locomotives. We will burn the
local product and we will create jobs here in the tri-state
area.
So the combination of H.R. 4 plus incentives, both
production incentives and tax credit type incentives, plus the
Clear Skies Initiative, which will provide certainty as to what
the rules are for SO2, NOx and mercury. The combination of
those two things, I think will result in a revitalization of
the coal industry in this part of the country, where we could
actually create the jobs here. And the people in this area are
paying the electric bills. They should get the jobs here too
for the electric bills they pay, rather than exporting those
jobs to Wyoming, Montana, Colombia, Venezuela, China and so
forth. Thank you.
Mr. Ney. Mr. Chairman, another question on that that I
have, if anybody would like to answer, in the western states,
there are a lot of plants located in the mouth of the mine. Why
do we not do that back east as much?
Mr. Murray. I was involved in a number of those projects,
perhaps someone else should answer it, but in North Dakota and
Texas. I built a number of mines at power plants. Actually that
is the way to go, in my opinion, for future power generation.
We were working with four electric utility companies, I
cannot say where, to accomplish just that a year and a half
ago. But then all this natural gas-fired generation--you have
got to remember, during the Clinton/Gore years, they made it
very difficult for coal, they wanted to ``dial out coal'' in
their words. All the incentives went to natural gas.
So 150,000 megawatts of natural gas generation was built in
the United States. These plants are under warranty and they
have to run them, whether they are competitive with coal or
not, which they are not. The electric utilities are just
passing it on to their ratepayers to pay for the more expensive
electricity from natural gas than coal.
I think, Congressman Ney, you are going to see exactly what
you are talking about come back, because what you need for a
mine mouth plant are the following: coal--it is here; a place
to dispose of the waste from the plant--it can go right where
the mine wastes go, same place. We have unlimited supplies of
water in the Ohio River and there are large power lines in this
area, 765 kV power lines. So we have all the ingredients for a
mine mouth plant, and that would be the greatest boom to
eastern Ohio, and Congressman, if you can get that done, I
think you will be doing one of the greatest things for this
district that anybody has ever done. There should be mine mouth
power plants built right here.
Mr. Erdos. If I might, Congressman--and I do not disagree
with what Mr. Murray said, but I guess in Ohio, the closest
thing we had to that was in Meigs County and I think--and I am
glad to hear Mr. Murray say that he has been somewhat involved
or has been involved, because I think there would have to be
some restrictions because I think one of the things we got into
there was a lot of high cost coal, selling the coal to yourself
made it very difficult for many of the coal producers in the
State of Ohio to get into that market.
So I do not disagree with it, I think that is a great idea,
but I think how it is set up and what-not needs to be looked
into.
Mr. Ney. If I could interject here, we did a bill years ago
trying to save that, specifically.
One other thing I wanted to just comment on while we are on
the issue of, you know, scrubbers and mines. Years ago, I
believe that--just take the Samas Power Plant, for example,
that used to be Ohio Edison, and they were asked what they had
to do, and if you have ever driven up there toward Toronto,
East Liverpool, up above there, there is a bridge that is
actually an environmental device. They were told you would have
to do A, B, C and D and it was going to cost like $200 million.
They did that. Things changed at EPA because a new bureaucrat
came in and they said well that is not good enough now. Now you
have to do E, F, G and H. They spend another $250 million, if I
remember my figures right--$450 million years ago went into
that.
Now I think if the sound science had been used years ago
and we all knew that this is what you did to build a scrubber
or this is what--you know, bring everybody on board, I think it
probably would have been invested in. So many people have been
taught a lesson over the years, no matter what you do, when you
deal with the U.S. EPA in particular, you go to do something
and you ask them what do I have to do, they will tell you what
you have to do and then they will change the whole ballgame
within a year. It becomes almost impossible to set a course to
do things.
So I think years ago, if we could have gotten that
straightened out probably we would have had more ability.
Also one thing I wanted to comment on was the fact of the
dislocated workers. I know Larry, we have worked with the State
and union and companies in support of that for a long time. And
we did it in order to bring people to the point that they could
at least feed their families. Which you are right, a lot of
people had to leave here. That would be my question too, what
the opportunities are around here for that people. And some
people were able to come back. For example, we got some jobs
that were a little better paying. But still had to work on
those and trade readjustment, something always to work on.
Every time you all call, we have to respond to that, the
companies call, the unions call. And worker deserve that, to
get that help.
I just wanted to make it clear, I see these bills over a
period of years that will come out of Ohio and mainly
Washington that say do not worry, when you vote for the WTO, we
will give you trade readjustment. Well, that is just telling
you that you are not going to have a job. Yes, you have to have
it; we always will help with the workers when you call us, but
people want a job versus being told well--it is a roundabout
way to take care of you on the unemployment line.
The Chairman. Thank you. I want to thank the panel for your
testimony and for answering all the questions. I am going to
dismiss this panel but thank you very much.
I would like to call up our second panel--Mr. Richard
Homrighausen, Mr. Gary Obloy, Mr. Eugene Trisko and Dr. John
Christy.
Thank you very much. If you will raise your right hand.
[Witnesses sworn.]
The Chairman. Thank you. Let the record show they all
answered in the affirmative. I welcome you to your hearing
today. It is a pleasure to have you all. And Mr. Mayor, we are
going to begin with you.
STATEMENT OF THE HONORABLE RICHARD HOMRIGHAUSEN, MAYOR, DOVER,
OHIO
Mayor Homrighausen. Thank you. Good morning, Chairman
Pombo, Congressman Ney. My name is Richard P. Homrighausen and
I am the Mayor of the city of Dover, Ohio.
The Chairman. Could you pull the mike just a little closer
to you?
Mayor Homrighausen. As mayor from a small industrial
community located approximately 60 miles to the northwest of
our hearing site, I am honored to have the opportunity to
testify before you today.
As a small town mayor, the local municipal utility operator
of a small coal-fired power plant, one of six municipal
utilities that still generate a portion of our own electricity,
an active participant in electric generation projects, both
fossil--we are currently exploring the possibility of doing a
750 megawatt power plant, and mine mouth is also part of that
exploration process, to our wholesale power supplier AMP-Ohio--
and we are also using renewable energy in the form of landfill
gas projects, also through AMP-Ohio, and as the President of
the Municipal Electric Association of Ohio. I know both the
value that citizens have received from the passage of the Clean
Air Act and its amendments as well as the hardships imposed by
inflexible regulation. Although the discussion of the Clean Air
Act does not fall under the jurisdiction of this Committee, I
see far too many similarities between the Clean Air Act and the
Kyoto Global Warming Treaty, which is the topic of today's
hearing. Because of these similarities, and the drastic effect
the enactment of this treaty would have on the industrial
Midwest, I sincerely appreciate this opportunity to provide our
perspective at this time.
Under the Clean Air Act, tremendous improvement has been
made in air quality. As a local official, I must emphasize that
these accomplishments were realized largely through the efforts
of state and local governments through innovative development
and implementation of the State Implementation Plan program.
However, in the middle of the game, not only were the rules
changed, but the EPA took its ball and moved the field of play
to another stadium. Its proposals on the enactment of new ozone
and PM2.5 standards were not, and are not, based upon sound
science. The lack of sound science in the regulation of these
aspects of the Clean Air Act mirrors the flawed scientific
premises underpinning the Kyoto Protocol.
If we as a nation are to safeguard the future of our world
and the environment we live in, steps must be taken to ensure
we are heading in the right direction. It is imperative that
all decisions regarding the enactment of standards to regulate
air--specifically tropospheric ozone, particulate matter,
carbon monoxide and dioxide, methane, nitrogen oxides, mercury,
sulfur dioxides and chlorofluorocarbons--be based on sound
science. Federal laws and regulations that are not based upon
sound science may do little or nothing to stabilize the
atmosphere, but could have drastic impacts on our economy.
Based on what I have read and understand, I am concerned
that if the United States were to ratify the Kyoto Protocol,
the resultant negative economic impacts associated with our
compliance would ripple across the Nation in the form of
increased electric rates, increased prices for consumer goods
and services, and lost jobs. I find this even more alarming
since Kyoto Protocol may not result in less greenhouse gas
emissions worldwide. What will be gained if all of the so-
called industrialized nations are mandated to reduce their
greenhouse gases by 30 percent, while at the same time some 130
developing nations are given exemptions? A prime example is
Mexico. Under the Kyoto Protocol, Mexico is exempted. How soon
we forget the mass exodus of U.S. industrial jobs to Mexico.
Does anyone truly believe that these industrial processes and
the jobs associated to them are being performed without
emissions? And I do not remember Mexico in Iraq either.
As previously mentioned, it is important to assess the
potential impacts of the Kyoto Protocol in the U.S. in the
context of the current Clean Air Act requirements. Such a
review raises serious concerns.
Costs are already increasing. We have seen electricity
costs in the wholesale market rise in recent years. Although a
portion of this increase is attributed to transmission costs,
environmental compliance issues and fuel costs are also
important factors. Many Ohio electric generating plants have
attempted to mitigate the cost of meeting emission reduction
requirements by switching to the use of out-of-state low sulfur
coal. The move to low sulfur coal, which must be transported to
Ohio facilities, has impacted our economy in two ways--
increased fuel costs and reduced demand for Ohio coal. I can
only believe that the ratification of the Kyoto Protocol would
exacerbate this situation. I might add that to date, the city
of Dover has been able to maintain our burning of Ohio coal.
Increased electricity rates impact customers. Customers
bear the brunt of increased electric costs, both in the cost of
power and in what they pay for consumer goods and services. For
instance, water and sewer plants rely on electricity for their
operation--therefore, increased electric costs would increase
what consumers pay for their water and sewer. This is just one
example of the trickle down impacts of increased energy costs.
In addition to implementing sound scientific practices,
Congress must implement an economic impact study to determine
the projected cost of the implementation of the Kyoto Treaty.
Natural gas is not a viable alternative. Over the past
several years, the cost of natural gas has become increasingly
volatile. A combination of factors, including colder-than-
normal winters, governmental restrictions on drilling and
market manipulation by natural gas suppliers, the largest of
which I do not believe is in business any more, resulted in the
depleted gas reserves. As such, we have seen the cost of
natural gas skyrocket at critical usage times, thereby limiting
natural gas as a viable alternative to coal generation.
Current Clean Air Act regulation and the Kyoto Protocol
seriously threaten Ohio's economy. Affordable electricity
generated in the State of Ohio is reliant upon the use of low-
cost high sulfur coal. New clean coal technology has and is
being developed which will reduce the emissions from Ohio coal,
and we look forward to the day that such technologies are
commercially proven and affordable. Clearly the future
viability of Ohio's coal resources is important to our state's
economy. As such, we question what the outlook would be for
Ohio's coal industry if the impact of the Kyoto Protocol were
combined with the challenges already confronting the industry
under current Clean Air Act regulations. Will an entire economy
fade away and die? How many jobs will be lost over what has
already been lost due to the closing of Ohio coal mines? How
many more workers will move out of the state in an effort to
support their families? How many industries will leave Ohio due
to increased utility costs?
Add to the previous four concerns the fact that the stock
market has performed poorly for several years. That many of our
senior citizens' retirement plans have deteriorated to the
point of no return and some are even looking to re-enter the
job market to provide for daily necessities. That Ohio's method
of school funding has been ruled unconstitutional. That school
levies are failing across the state and even the wealthiest
school districts are experiencing budgetary shortfalls. That
prescription drugs and basic health care costs are
skyrocketing. The cost of consumer goods seem to rise on a
daily basis. And that the Federal Government enacts unfunded
mandates to be passed on to the states, which in turn passes
them on to the local level.
We cannot afford yet another level of government imposed
increases, which will increase the American public's cost of
living, which in turn will diminish our quality of life.
I believe the ratification of the Kyoto Protocol would have
a disastrous impact on the economy of my city, the state of
Ohio and the entire country. I urge this Congress and the
Administration to oppose all efforts toward ratification of the
Kyoto Protocol or any legislation that seeks to implement the
basic tenets of the Protocol, including mandatory caps on CO2
emissions.
Again, I want to thank you for this opportunity to voice my
opinion and my concerns regarding the Kyoto Protocol, and I
look forward to answering any questions you might have.
Thank you.
[The prepared statement of Mayor Homrighausen follows:]
Statement of The Honorable Richard P. Homrighausen, Mayor,
City of Dover, Ohio
Good morning, Chairman Pombo, Congressman Ney and members of the
Committee, my name is Richard P. Homrighausen, and I am the Mayor of
the City of Dover, Ohio. As a mayor from a small industrial community
located approximately 60 miles northwest of this hearing site. in the
heart of the industrial Midwest, I am honored to have the opportunity
to testify before you today.
As a small-town mayor, the local municipal utility operator of a
small coal-fired power plant, an active participant in electric
generation projects, both fossil fuel and renewable energy in the form
of a Landfill Gas Project, through AMP-Ohio, and as President of the
Ohio Municipal Electric Association, I know both the value that
citizens have received from the passage of the Clean Air Act and its
amendments, as well as the hardships imposed by inflexible regulation.
Although the discussion of the Clean Air Act does not fall under the
jurisdiction of this Committee, I see far too many similarities between
the Clean Air Act and the Kyoto Global Warming Treaty, which is the
topic of today's hearing. Because of these similarities, and the
drastic effect the enactment of this treaty would have on the
industrial Midwest, I sincerely appreciate this opportunity to provide
our perspective on this issue.
Under the Clean Air Act, tremendous improvement has been made in
air quality. As a local official, I must emphasize that these
accomplishments were realized largely through the efforts of state and
local governments through innovative development and implementation of
the SIP (State Implementation Plan) program. However, in the middle of
the game, not only were the rules changed, but the EPA took its ball
and moved the field of play to another stadium. Its proposals on the
enactment of new Ozone and PM 2.5 standards were not, and are not,
based upon sound science. The lack of sound science in the regulation
of these aspects of the Clean Air Act mirrors the flawed scientific
premises underpinning the Kyoto Protocol.
If we, as a nation, are to safeguard the future of our world and
the environment we live in, steps must be taken to insure we are
heading in the right direction. It is imperative that all decisions
regarding the enactment of standards to regulate air--specifically
tropospheric ozone, particulate matter, carbon monoxide, carbon
dioxide, methane, nitrogen oxides, mercury, sulfur dioxides and
chlorofluorocarbons--be based on sound science. Federal laws and
regulations that are not based upon sound science may do little or
nothing to stabilize the atmosphere, but could have drastic impacts on
our economy.
Based on what I've read and heard, I am concerned that if the
United States were to ratify the Kyoto Protocol, the resultant negative
economic impacts associated with our compliance would ripple across the
nation in the form of increased electric rates, increased prices for
consumer goods and services, and lost jobs. I find this even more
alarming since Kyoto Protocol may not result in less greenhouse gas
emissions worldwide. What will be gained if all of the so-called
industrialized nations are mandated to reduce their greenhouse gases by
30 percent, while at the same time some 130 developing nations are
given exemptions? A prime example is Mexico. Under the Kyoto Protocol,
Mexico is exempted. How soon we forget the mass exodus of U.S.
industrial jobs to Mexico. Does anyone believe these industrial
processes and the jobs associated to them are being performed without
emissions?
As previously mentioned, it's important to assess the potential
impacts of the Kyoto Protocol in the U.S. in the context of the current
Clean Air Act requirements. Such a review raises serious concerns.
POINT 1: Costs are already increasing
We have seen electricity costs in the wholesale market rise in
recent years. Although a portion of this increase can be attributed to
transmission costs, environmental compliance issues and fuel costs are
also important factors. Many Ohio electric generating plants have
attempted to mitigate the cost of meeting emission reduction
requirements by switching to the use of out-of-state low sulfur coal.
The move to low sulfur coal, which must be transported to Ohio
facilities, has impacted our economy in two ways--increased fuel costs
and reduced demand for Ohio coal. I can only believe that ratification
of the Kyoto Protocol would exacerbate this situation.
POINT 2: Increased electricity rates impact customers
Customers bear the brunt of increased electric rates both in the
cost of power and in what they pay for consumer goods and services. For
instance, water and sewer plants rely on electricity for their
operation--therefore, increased electric costs would increase what
consumers pay for their water and sewer service. This is just one
example of the trickle down impacts of increased energy costs.
POINT 3: Natural gas is not a viable alternative
Over the past several years the cost of natural gas has become
increasingly volatile. A combination of factors, including colder-than-
normal winters, governmental restrictions on drilling and market
manipulation by natural gas suppliers has resulted in depleted gas
reserves. As such, we have seen the cost of natural gas skyrocket at
critical usage times, thereby limiting natural gas as a viable
alternative to coal generation.
POINT 4: Current Clean Air Act Regulation and the Kyoto Protocol
seriously threaten Ohio's economy
Affordable electricity generated in the State of Ohio is reliant
upon the use of low-cost high sulfur coal. New clean coal technology
has and is being developed which will reduce the emissions from Ohio
coal and we look forward to the day that such technologies are
commercially proven and affordable. Clearly, the future viability of
Ohio's coal resources is important to our state's economy. As such, we
question what the outlook would be for Ohio's coal industry if the
impact of the Kyoto Protocol were combined with the challenges already
confronting the industry under current Clean Air Act regulations. Will
an entire economy wither away and die? How many jobs will be lost due
to the closing of Ohio coal mines? How many workers will move out of
state in an effort to support their families? How many industries will
leave Ohio due to increased utility costs?
SUMMATION:
Add to the previous four concerns the fact that the stock market
has performed poorly for several years. That many of our senior
citizens' retirement plans have deteriorated to the point of no return
and some are looking to re-enter the job market to provide for daily
necessities. That Ohio's method of school funding has been ruled
unconstitutional. That school levies are failing across the state and
even the wealthiest school districts are experiencing budgetary
shortfalls. That prescription drugs and basic health care costs are
skyrocketing. The cost of consumer goods seems to rise on a daily
basis. And, that the Federal Government enacts unfunded mandates to be
passed on to the states, which in turn passes them on to the local
level.
I believe that ratification of the Kyoto Protocol would have a
disastrous impact on the economy of my city, the state of Ohio and the
entire country. I urge this Congress and the Administration to oppose
all efforts towards ratification of the Kyoto Protocol or any
legislation that seeks to implement the basic tenets of the Protocol,
including mandatory caps on CO2 emissions.
Again I want to thank you for this opportunity to voice my opinion
and my concerns regarding the Kyoto Protocol. I look forward to
answering any questions you might have.
______
The Chairman. Thank you. Mr. Obloy.
STATEMENT OF GARY OBLOY, EXECUTIVE DIRECTOR, COMMUNITY ACTION
COMMISSION OF BELMONT COUNTY
Mr. Obloy. Good morning and thank you for the opportunity
to testify today. Chairman Pombo, Congressman Ney, my name is
Gary Obloy. I am the Executive Director of the Community Action
Commission of Belmont County. The Community Action Commission,
much like its 900 sister agencies from across this country, is
a private non-profit organization whose mission is to combat
poverty, its causes and consequences. To that end, the
Community Action Commission administers over 20 Federal, state
and privately funded programs targeted to low-income residents
of our county. Specific programs include: The Home
Weatherization Assistance Program, Head Start, emergency
assistance provided under the Federal Emergency Management
Agency and the Low-Income Home Energy Assistance Program.
My testimony this morning is based on my belief that the
employment situation in a particular area or region has an
effect on the demand for services provided by agencies such as
the Community Action Commission. Decreases in employment result
in increased call for services, particularly those which are
designed to help ease the financial burden families face during
periods of financial distress.
To illustrate, I would like to compare and contrast the
Emergency Assistance in the 2002 and 2003 Low-Income Home
Energy Assistance Program or LIHEAP, and unemployment
statistics for that same period for Belmont County.
During the winter of 2002, 1635 households received
assistance under LIHEAP.
March 2002 marked the end of the 2001-2002 LIHEAP program
year. At that time, Belmont County's unemployment rate was 5.9
percent.
By March 2003, the unemployment rate increased to 7
percent. In the course of 1 year, 400 persons lost their jobs
in the county that has less than half its population in the
civilian work force. We are a county of approximately 71,000
people.
During winter of 2003, LIHEAP assisted 1901 households,
representing an increase of 16 percent or 266 families.
LIHEAP has also established 150 percent of the poverty
level as the income eligibility determinant. As part of our
reporting requirements for the program, households that receive
assistance are broken down into more specific income
categories:
Less than 75 percent of the poverty level;
75 to 100 percent of the poverty level;
101 to 125 percent; and
126 to 150 percent.
Further examination of the program shows significant
increases in the number of households that fall into the lowest
income categories for assistance.
In 2002, 568 households receiving assistance had incomes of
less than 75 percent of the poverty level, 230 were in the 75
to 100 percent, 183 in the 101 to 126 category and 654 were in
the 126 percent to 150 percent category.
In 2003, 1061 households had incomes of less than 75
percent of the poverty level. That is a near doubling of the
number from the previous year. 373 were in the 75 to 100
percent category, 262 in the 101 to 126 and 205 were in the 126
to 150 percent category. These numbers represent the number of
households. In total, the number of persons affected would be
multiplied by a typical family of four; therefore, increasing
the overall need for assistance.
Expenditures on heating assistance for the program
increased from $286,000 in 2002 to $343,000 in 2003, which
represents a 20 percent increase. If we refer back to the
increase in unemployment rate between March 2002 and 2003, the
1.1 percent increase in unemployment can be contrasted to a 20
percent increase in expenditures on heating assistance.
This is only one program that includes offering assistance
to unemployed workers. The effect on other safety net services
would be similarly increased. As stated before, our agency
alone offers more than 20 programs that could be accessed by
individuals and families that are affected by the loss of
income. Other social service agencies would also have an
increased demand for assistance in meeting basic needs. Belmont
County is part of the Appalachian region in Ohio and already
has high poverty and unemployment rates above the average for
the state and the nation.
Social service programs play a vital role in an economy
where unemployment is on the rise. With the loss of income to
the family or individual, financial resources to pay for basic
needs such as a mortgage, utilities and food diminishes.
I understand the desires for a clean environment. I
personally want to live in and want my children to live in a
healthy environment that will enhance the quality of life. When
making decisions regarding such issues as the Kyoto accords, we
need to weigh all factors and try to reach conclusions which
best serve the interest of our citizens. And one of the primary
factors is jobs.
Thank you for the opportunity to be here today and I would
be pleased to answer any questions you might have.
[The prepared statement of Mr. Obloy follows:]
Statement of Gary Obloy, Executive Director,
Community Action Commission of Belmont County
Good Morning. Chairman Pombo, members of the Committee on
Resources, my name is Gary Obloy. I am the Executive Director of the
Community Action Commission of Belmont County. The Community Action
Commission, much like its 900 sister agencies from across this country,
is a private non-profit organization whose mission it to combat
poverty, its causes, and consequences. To that end, the Community
Action Commission administers over twenty Federal, state, and privately
funded programs targeted to low-income residents of our county.
Specific programs include: the Home Weatherization Assistance Program,
Head Start, the Emergency Food and Shelter Program funded by FEMA, and
the Low-Income Home Energy Assistance Program.
My testimony this morning is based on the premise, and my belief,
that the employment situation in a particular area or region has an
effect on the demand for services provided by agencies such as the
Community Action Commission. Decreases in employment result in
increased calls for services, particular those, which are designed to
help ease the financial burden families face during periods of
financial distress.
Impact to Social Services
To illustrate, let us compare and contrast the 2002 and 2003 Low-
Income Home Energy Assistance Program (LIHEAP) and unemployment
statistics for the same period.
During the winter of 2002, 1,635 households received assistance.
March 2002 marked the end of the 2001-2002 LIHEAP Program Year. At
that time Belmont County's unemployment rate was 5.9%.
In March 2003, the unemployment rate increased to 7%. In the course
of one year, four hundred persons lost their jobs in a county that has
less than half of its population in the civilian work force.
During the winter of 2003, LIHEAP assisted 1,901 households,
representing an increase of 16% or 266 families.
LIHEAP has established 150% of the poverty level as the income
eligibility determinant. As part of our reporting requirements for the
program, households that receive assistance are broken down into more
specific income categories:
Less than 75% of the poverty level;
75% to 100%;
101% to 125%; and
126% to 150%.
Further examination of the program shows significant increases in
the number of households that fall into the lowest income categories
for assistance.
In 2002, 568 of the households receiving assistance had incomes of
less than 75% of the poverty level. 230 were in the 75% to 100%
category. 183 were in the 101% to 126% category. 654 were in the 126%
to 150% category
In 2003, 1,061 households had incomes of less than 75% of the
poverty level (a near doubling of the number from the previous year).
373 were in the 75% to 100% category. 262 were in the 101% to 126%
category, and 205 were in the 126% to 150% category. These numbers
represent the number of households. In total, the number of persons
effected would by multiplied by a typical family of 4 therefore
increasing the overall need for assistance.
Expenditures on heating assistance for the program increased from
$286,942 in 2002 to $343,296 in 2003, which represents 20% increase.
During this period the unemployment rate increased by only 1%, a 20 to
1 ratio.
This is only one program that includes offering assistance to
unemployed workers. The effect on other ``safety net'' services would
be similarly increased. As stated before, our agency alone offers more
than 20 programs that could be accessed by individuals and families
that are affected by the loss of income. Other social service agencies
would also have an increased demand for assistance in meeting basic
needs. Belmont County is part of the Appalachian region in Ohio and
already has high poverty1 and unemployment rates above average for the
state and nation2.
Social service programs play a vital role in an economy where
unemployment is on the rise. With the loss of income to the family or
individual, financial resources to pay for basic needs such as a
mortgage, utilities and food diminishes.
I understand the desires for a clean environment. I personally want
to live in, and I want my children to live in a healthy environment
that will enhance the quality of life. When making decisions regarding
issues such as the Kyoto accords, we need to weigh all factors and try
to reach conclusion which best serve the interest of our citizens.
Thank you for the opportunity to be here today and I would be
pleased to answer any questions you might have.
1 U.S. Census Bureau, 2000 Census Data
2 Ohio Department of Job and Family Services. Office of Research,
Assessment and Accountability, March 2003
______
[Attachments to Mr. Obloy's statement follow:]
[GRAPHIC] [TIFF OMITTED] T7018.001
[GRAPHIC] [TIFF OMITTED] T7018.002
[A letter submitted for the record by Mr. Obloy follows:]
[GRAPHIC] [TIFF OMITTED] T7018.004
The Chairman. Thank you. Mr. Trisko.
STATEMENT OF EUGENE M. TRISKO, ATTORNEY,
UNITED MINE WORKERS OF AMERICA
Mr. Trisko. Thank you, Mr. Chairman. Chairman Pombo,
Chairman Ney, I am Gene Trisko, I am an attorney, I am here on
behalf of the International Union of the United Mine Workers of
America.
UMWA represents the nation's organized coal miners and it
applauds the Committee's interest in examining the impacts of
the Kyoto agreement on coal dependent communities.
No other labor group in this country stands to be affected
more adversely by this agreement. The UMWA led efforts to
engage other labor unions in this issue, culminating in the
adoption of three resolutions by the Executive Council of the
AFL-CIO opposing adoption and implementation of the Kyoto
Protocol.
The UMWA worked with the Senate in the development of the
Byrd-Hagel Resolution, adopted by a vote of 95-0 in July 1997.
That resolution advised the Clinton Administration not to
negotiate a legally binding agreement in Kyoto that failed to
involve commitments by developing nations, or that posed the
risk of significant economic harm to the U.S. economy. The
agreement negotiated in Kyoto failed both of the tests set
forth by Senate Resolution Number 98.
Your hearing today is timely, because proposals are now
being considered before Congress to amend the Clean Air Act to
include carbon dioxide limitations. The UMWA supports new
emission control legislation for sulfur dioxide, nitrogen
oxides and mercury, provided that coal mining jobs are
protected, but opposes the addition of carbon dioxide controls
to new Clean Air legislation.
The basis for this position is straight-forward: there are
available emission control technologies for reducing emissions
of SO2, NOx and mercury in a manner that can improve the
environment while protecting and even increasing job
opportunities. But there are no commercially available means
for reducing carbon emissions from coal-based power plants.
Requirements to reduce electric utility CO2 emissions would
be met principally by switching from coal to natural gas. Mines
would close, coal miners would lose their jobs and coal
communities would be economically devastated. Industries
relying on low-cost electric energy would reduce their output
and workforce, with effects felt across the Midwest economy.
Since 1990, the Mine Workers have lost thousands of coal
mining jobs as a consequence of fuel switching in response to
the acid rain provisions of the 1990 Clean Air Amendments. We
know what the stakes are here. Coal production in major eastern
coal producing states declined by more than 113 million annual
tons between 1990 and 2000, while more than 30,000 coal mining
jobs were lost.
Here in Ohio, coal production was 35 million tons in 1990
and the state's coal mines employed 5900 mine workers. By 2000,
output had declined to 22 million tons and employment had
dropped to 2700 mine workers. That is a 37 percent drop in
production and a 54 percent decline in coal mining jobs.
Similar job losses have occurred in northern West Virginia,
western Kentucky, Alabama, Virginia and Illinois.
Kyoto poses unacceptable risks to coal-dependent
communities. Numerous government and academic studies show that
the national impacts would be measured in hundreds of billions
of dollars of reduced annual economic output, millions of job
losses and billions of dollars of household income that would
not be available for food, housing, medical care and other
essentials of life.
Ohio depended on coal for 87 percent of its electric
generation in the year 2000, compared to a national average of
about 55 percent. The loss of high-paying coal mining and other
industrial jobs resulting from switching from coal to higher
cost forms of electric generation would send shock waves across
the Ohio economy. These jobs are the engine of local economies
across the Midwest, generating spinoff jobs in government,
service and many other support industries.
The DRI study cited in my testimony estimates that Kyoto
would cause Ohio to lose 70,000 jobs by 2005 and $4.6 billion
in real disposable personal income by 2010. These impacts would
be largest in the manufacturing and service sectors, reflecting
their dominant importance to the overall Ohio economy.
Even larger potential impacts from the loss of coal
production and coal-based electric generation are suggested by
a recent Penn State study. An 80 percent reduction of coal
production and use in Ohio could cause the loss of $29 billion
of state economic output, $9.3 billion of household earnings
and 261,000 jobs. An 80 percent reduction of coal use is
consistent with upper-end estimates of the amount of fuel
switching needed to comply with the Kyoto Protocol, as other
witnesses today have testified.
Meanwhile, global greenhouse gas concentrations are
projected to increase into the foreseeable future, driven by
the economic growth of developing nations exempt from the Kyoto
Protocol.
Developing nations have simply refused to discuss any
longer-term emission limitation programs. The Vice Minister for
Economic Development of China appeared three times before U.N.
climate negotiations, delivering the same message: China will
not be prepared to discuss greenhouse gas limits until it
reaches the status of a medium-size industrial economy--in 50
years.
In a word, the climate change process before the United
Nations is broken. Nothing that we do in this country can
meaningfully affect future greenhouse gas concentrations.
When all parties to the Rio climate treaty are prepared to
discuss future emission limitation commitments, the stage will
be set for a global agreement that may meet the tests of Senate
Resolution Number 98. In the meantime, the United States should
continue research and development of clean coal technologies
that will enable us to use our vast coal resources in an
environmentally efficient manner. These technologies are the
key to the preservation of jobs and communities across the
country, as well as the means for clean growth among developing
nations.
Thank you.
[The prepared statement of Mr. Trisko follows:]
Statement of Eugene M. Trisko, Attorney at Law, Berkeley Springs,
West Virginia, on behalf of United Mine Workers of America
Mr. Chairman and members of the Committee:
I am Eugene M. Trisko, an attorney in the District of Columbia. I
am pleased to be here today to testify on behalf of the United Mine
Workers of America (UMWA), the labor union representing the nation's
organized coal miners. I have worked with the UMWA for some 20 years on
issues related to the Clean Air Act and global climate change,
including the development and implementation of the Clean Air Act
Amendments of 1990, the Byrd-Hagel climate resolution, and the proposed
Clear Skies Act.
The UMWA has played a lead role among American labor unions in its
involvement with the negotiation of the Kyoto Protocol. No other labor
group in this country stands to be affected more directly--or more
adversely--by this agreement. Since 1994, the UMWA has participated as
an NGO in every major negotiating session of the United Nations
Framework Convention on Climate Change, including the First Conference
of the Parties in Berlin, Germany, and the 1997 negotiations in Kyoto,
Japan. The UMWA led efforts to engage other labor unions in this issue,
culminating in the adoption of three resolutions by the Executive
Council of the AFL-CIO opposing adoption and implementation of the
Kyoto Protocol.
The UMWA worked closely with the Senate in the development and
passage of the Byrd-Hagel Climate Resolution, adopted by a vote of 95-0
in July 1997. That resolution advised the Clinton Administration not to
negotiate a legally binding agreement in Kyoto that failed to involve
commitments by developing nations, or that posed the risk of
significant economic harm to the U.S. economy. In retrospect, the
agreement negotiated in Kyoto failed both of the tests set forth by
Senate Resolution No. 98.
The UMWA applauds the Committee's interest in examining the impacts
of the Kyoto agreement on coal-dependent communities. The UMWA's
interests in protecting its members' jobs from the effects of a one-
sided, inequitable treaty extend to the protection of the hundreds of
coal-dependent communities that risk virtual extinction if the Kyoto
Protocol were implemented.
UMWA Positions on Clean Air and Climate
The UMWA supports the enactment of new emission control legislation
for sulfur dioxide, nitrogen oxides and mercury, provided that coal
mining jobs are protected, but opposes the addition of carbon dioxide
controls to such legislation in the absence of an equitable, truly
global international agreement on greenhouse gas control.
The basis for this position is straight-forward: there are
available emission control technologies for reducing emissions of SO2,
NOx and mercury in a manner that can improve the environment while
protecting and even increasing job opportunities. But there are no
commercially available means for reducing carbon emissions from coal-
based power plants.
Requirements to reduce electric utility CO2 emissions would be met
principally by switching from coal to natural gas or to other low-
carbon or no-carbon options. Coal mines would close, coal miners would
lose their jobs, and coal communities would be economically devastated.
The higher costs of generating electricity would ensure substantial
electric rate increases for utility customers, particularly affecting
lower- and fixed-income customers. Energy-intensive industries would
feel increased pressure to locate their facilities offshore, in low-
wage developing countries exempt from Kyoto.
Carbon dioxide, the principal greenhouse gas, is not regulated
under the Clean Air Act, and is not associated with any known adverse
health effects. The Clean Air Act is well suited for regulating
emissions contributing to acid rain, ozone, and other harmful air
pollutants. But the Clean Air Act does not give us jurisdiction over
emissions in China, India and other countries that will play a critical
role in determining future global concentrations of greenhouse gases.
Even if fully implemented, the Kyoto agreement would do next to
nothing to protect the global environment because developing nations
will be the major source of future growth of greenhouse gas emissions.
Until a global climate agreement is reached among developed and
developing nations alike, the UMWA will oppose policies that would lead
to the unilateral loss of U.S. jobs.
Coal-Switching Experience under the Clean Air Act
The Mine Workers know first hand the impacts that government
policies can have on coal miners and coal-dependent communities. Since
1990, the UMWA has lost thousands of coal mining jobs as a consequence
of fuel-switching in response to the Phase I acid rain provisions of
the 1990 Clean Air Act Amendments. Coal production in major eastern
coal producing states declined by more than 113 million annual tons
between 1990 and 2000, while more than 30,000 coal mining jobs were
lost.
Most of these eastern production and job losses were the result of
switching from higher- to lower-sulfur coals to meet the emission
reductions required by Title IV. Dozens of mining communities have
suffered catastrophic job losses across economically-depressed
Appalachia and the rural Midwest. Nearly 60% of the SO2 reductions
achieved in Phase I were accomplished through fuel switching and only
about 28% were accomplished through installation of scrubbers. This
coal switching was devastating for high-sulfur coal mining communities.
Let me cite a few examples:
LIn Ohio, coal production was 35.3 million tons in 1990
and the state's coal mines employed 5,866 mine workers. By 2000, output
had declined to 22.3 million tons and employment had dropped to 2,688
mine workers, a 36.8% drop in coal production and 54.2% decline in coal
mining jobs.
LIn 1990, mines in northern West Virginia produced 56.6
million tons and employed 10,053 coal miners. In 2000, production had
fallen to 37.6 million tons and employment had declined to 3,712
miners, a 33.6% drop in production and a 63.1% decline in employment.
LIn Illinois, coal production was 60.4 million tons in
1990 and 10,018 coal miners were working. By 2000, production dropped
to 33.4 million tons (a 44.6% reduction) and only 3,454 coal miners
were working (a decline of 65.5%).
LIn western Kentucky, 5,586 coal miners produced 44.9
million tons in 1990; by 2000, only 2,510 coal miners were employed (a
drop of 55.1%) and production had declined to 25.8 million tons (a drop
of 42.6%).
Given this experience, the union is understandably sensitive to the
risk of additional job losses resulting from global climate change
initiatives, or through new multi-emission legislation pending before
Congress. Coal communities across Appalachia and the Midwest already
have been hard hit by the effects of fuel-switching. In most instances,
the loss of high-paying mining and other industrial jobs is not made up
by new jobs in these communities. Alternative employment, where it is
available at all, tends to be in the lower-wage service sector, without
comparable health or retirement benefits.
Economic Impacts of Kyoto
We know well the risks that Kyoto poses to coal-dependent
communities. A wealth of studies prepared prior to and subsequent to
Kyoto show that implementation of that agreement could devastate coal-
dependent communities in Ohio and across all coal-producing states. The
national impacts would be measured in hundreds of billions of dollars
of reduced annual economic output, millions of job losses, and billions
of dollars of household income that would not be available for food,
housing, medical care and other essentials of life.
These concerns are most acute in Ohio, which in 2000 depended on
coal for 87 percent of its electric generation, compared to a national
average of about 55 percent. The loss of high-paying coal mining and
other industrial jobs resulting from switching from coal to other forms
of electric generation would send shock waves across the Ohio economy.
These jobs are the engine of local economies across the Midwest,
generating spin-off jobs in government, service and many other support
industries.
The table below summarizes the employment and household impact
estimates of five major studies focused on the impacts of reducing
utility carbon emissions, including the Kyoto Protocol and a multi-
emission Clean Air Act scenario. References to these studies are
provided at the end of my statement.
[GRAPHIC] [TIFF OMITTED] T7018.003
The DRI study commissioned in 1998 by the UMWA and the Bituminous
Coal Operators Association estimated that Kyoto would cause Ohio to
lose 70,000 jobs by 2005 and $4.6 billion in real disposable personal
income by 2010. Impacts would be largest in the manufacturing and
services sectors, reflecting their dominant importance to the overall
Ohio economy.
These DRI Ohio estimates are for Case 2, which assumed that only
58% of Kyoto reduction requirements would be met through domestic
measures. If international emissions trading markets did not function
effectively, the impacts could be much greater.
Larger potential impacts from the loss of coal production and coal-
based electric generation are suggested by the Penn State study (2002).
An assumed 80% reduction of coal production and use in Ohio could cause
the loss of $29 billion of state economic output, $9.3 billion of
household earnings, and 261,100 jobs. These estimates represent the
average findings of four input-output scenarios for Ohio. An 80%
reduction of coal utilization is consistent with upper-end estimates of
the amount of fuel-switching needed to comply with the Kyoto Protocol.
Other indirect effects, such as the reduction of tax revenues when
coal mines or factories close, with a resulting loss of funding for
local public schools and other government services, are generally not
quantified in economic studies of the Kyoto agreement. These impacts--
and the devastating human and social consequences of unemployment,
including increased mortality, divorce, crime and suicide--may well
generate larger losses to society at large than those quantified by
macroeconomic models (Brenner, 1984).
Coming to Grips with Climate
Global greenhouse gas concentrations are projected to increase into
the foreseeable future, driven predominately by the economic growth of
developing nations exempt from the Kyoto Protocol. Russia recently
signaled that it is not prepared to ratify Kyoto, compounding
uncertainties about eventual implementation of the agreement. Last
October, Russia startled the Eighth Conference of the Parties to the
FCCC by linking ratification to forgiveness of its foreign debt. As it
stands, Russia could reap billions of dollars of profits from the sale
of its ``hot air'' carbon credits resulting from the collapse of its
economy in the early 1990s. Without Russian (or U.S.) ratification, the
Protocol cannot enter into force.
Developing nations have steadfastly refused to discuss any longer-
term emission limitation programs. The Vice Minister for Economic
Development of the Peoples Republic of China appeared three times
before meetings of the FCCC, delivering the same message: China will
not be prepared to discuss greenhouse gas limitations until it reaches
the status of a medium-size industrial economy--in fifty years.
A U.S. proposal on ``evolution'' of commitments introduced in Kyoto
provoked a five-hour filibuster led by China, India and other members
of the ``Group of 77'' developing countries. The topic of ``evolution''
was subsequently stricken from official FCCC agendas. It is forbidden
even to discuss the issue of developing country commitments. In a word,
the climate change process before the United Nations is broken.
The deficiencies of the Kyoto Protocol and the UN FCCC process
should be resolved through multilateral negotiations involving
developed and developing countries, potentially leading to a new global
agreement on greenhouse gases that recognizes the ``common but
differentiated'' responsibilities of parties to the FCCC, with an
equitable apportionment of emission limitation targets among all
parties.
When all parties to the FCCC are prepared to discuss future
emission reduction and limitation commitments, the stage will be set
for a global agreement that may meet the tests of Senate Resolution No.
98. In the meantime, the U.S. should continue research and development
of advanced clean coal technologies that will enable us to use our vast
coal resources in an environmentally-efficient manner. These
technologies are the key to the preservation of jobs and communities
across the country, as well as the means for clean growth among
developing nations.
Thank you.
References
U.S. Department of Energy, Energy Information Administration,
Impacts of the Kyoto Protocol on U.S. Energy Markets and Economic
Activity (DOE/EIA Rep. No. SR/OIAF/98-03, 1998).
U.S. Department of Energy, Energy Information Administration,
Analysis of Strategies for Reducing Multiple Emissions from Electric
Power Plants: Sulfur Dioxide, Nitrogen Oxides, Carbon Dioxide, and
Mercury and a Renewable Portfolio Standard (DOE/EIA Rep. No. SR/OIAF/
2001-03, 2001).
Standard & Poor's DRI, The Impact of Meeting the Kyoto Protocol on
Energy Markets and the Economy (for United Mine Workers of America and
Bituminous Coal Operators Association, 1998).
A. Rose and B. Yang, The Economic Impact of Coal Utilization in the
Continental United States, 2010 (Pennsylvania State University,
Department of Energy, Environmental, and Mineral Economics, 2002).
Wharton Econometric Forecasting Associates, Inc., Global Warming:
The Economic Cost of Early Action (WEFA, Inc., 1997).
M. Harvey Brenner, Estimating the Effects of Economic Change on
National Health and Social Well-Being (prepared for the use of the
Joint Economic Committee, 98th Cong. 2nd Sess., S. Prt. 98-198, 1984).
______
The Chairman. Thank you very much. Dr. Christy.
STATEMENT OF DR. JOHN R. CHRISTY,
ALABAMA STATE CLIMATOLOGIST
Mr. Christy. Thank you, Chairman Pombo and Congressman Nay.
I am John Christy, Professor of Atmospheric Science and
Director of the Earth System Science Center at the University
of Alabama at Huntsville. I am also Alabama's State
Climatologist and I recently served as a Lead Author of the
2001 Report of the United Nations' Intergovernmental Panel on
Climate Change.
I am pleased to speak to you today about the Kyoto
Protocol.
First, there seems to be a misconception that carbon
dioxide is a dangerous pollutant. Life on earth depends on
three things--sunlight, water and carbon dioxide. The plant
world and all life that depends on it would end without carbon
dioxide. In fact, millions of years ago, in concentrations
several times higher than today, carbon dioxide promoted
development of the biosphere which now surrounds us. Carbon
dioxide simply is not a pollutant.
Now based on out put from climate models, the Kyoto
Protocol assumes that increasing CO2 will cause dangerous
climate change. Real data, however, suggests otherwise.
A common feature in climate model forecasts is that carbon
dioxide increases will cause global surface temperatures to
rise rapidly, along with the atmosphere above, from the surface
to about 30,000 feet. That part is called the troposphere. That
warming of the troposphere would further promote more warming
in the surface temperature models.
Over the past 24-plus years, various calculations of
surface temperature do indeed show a rise of about .7 degree
Fahrenheit. This is roughly half of what has occurred since the
end of the 19th century. In the troposphere, however, various
data, including the satellite data set that Dr. Roy Spencer of
UAH and I produce, show much less warming, about .3 degree or
less than half the warming observed at the surface. Models
predict more warming in the atmosphere, the real world shows
less.
A new version of microwave satellite data has been produced
but not yet published, by Remote Sensing Systems or RSS of
California. Ten days ago, with great fanfare, the results of a
curious comparison of our data against this RSS data appeared
in Science Magazine's electronic edition. The article's authors
observed that climate models agree more closely with the RSS
data set. The article's strong implication was that since the
RSS data had more closely matched the model output, it is
likely more accurate than ours.
Well, that same week, my paper came out in the Journal of
Atmospheric and Oceanic Technology, which is not exactly coffee
table material for folks around here, but instead of using
forecasts and projections from mathematical models, I performed
rigorous tests based on real observations, balloon datasets
created by independent organizations. Our satellite data and
the balloon data corroborate each other with remarkable
consistency, showing only a slow warming of the bulk
atmosphere. Climate models that forecast significant warming of
the troposphere apparently just do not match the real world.
Now the IPCC's 2001 conclusion that human induced global
warming is clearly evident was based partly on a depiction of
temperatures of the northern hemisphere over the past 1000
years. This depiction showed little temperature change until
about 1850, followed by a sharp upward rise, suggesting that
recent warming was dramatic and linked to human effects. Since
2001, however, two important research projects have shown
something very different. Using a wider range of information
from new sources, these studies indicate large temperature
swings have been common over the past 1000 years and that
temperatures warmer than today's were common in 50-year periods
about 1000 years ago. These studies suggest that the climate we
see today is not unusual at all.
But even so, some people still think something should be
done about CO2 as soon as possible.
There have been many proposals to limit energy use. A
fundament alternatives point that our nation needs to
understand is that if any of these proposals, including the
Kyoto Protocol, are implemented, they will have an effect on
the climate so small that it cannot be detected. It is my
business to monitor the climate with the highest precision
possible, so I can say with confidence that none of these
proposals will change what the climate is going to do enough to
notice.
Raising the cost of energy without any perceivable benefit
is what Kyoto amounts to. The U.S. is often criticized for
producing 25 percent of the world's anthropogenic CO2, we are
rarely applauded for producing with that CO2, 31 percent of
what the world wants and needs, its food, its technology,
medical advances, defense of freedom and so on. Carbon dioxide
is not a pollutant and the energy that comes from carbon-based
fuels allows people to live better lives.
In the mid-1970's, I was a missionary in Africa and I agree
with the Chairman when he made the comment that if you want to
see environmental degradation, go to a poor country. I lived
with people who did not have access to energy. During the Arab
oil embargo in the 1970's, I saw clearly that the people
affected most by rising energy costs were the poor, both in the
country I was in in Africa, as well as those back here,
especially in my state of Alabama.
In closing, let me note that at other hearings such as
this, I have often been asked, if you were Congressman for a
day, what would you do on this issue? I would do three things--
first, I would do no harm. I would not artificially force up
energy prices, thereby hurting the poor. I would not undo the
good things that have been done to clean the air and water. I
noted earlier that CO2 is not a pollutant, that other emissions
such as sulfur oxides, nitrogen oxides and mercury mentioned
earlier are potentially harmful, and the apparent absence of
global warming should not be used as an excuse to overlook
other types of pollution.
Second, I would help America do what the innovative people
of this nation do best--I would help scientists and engineers
discover new sources of low carbon energy.
And three, I would work to enhance our national
infrastructure to be more resilient to floods, drought,
tornadoes, hurricanes and other weather events that we know are
going to continue whether the climate changes or not.
Thank you, Mr. Chairman, I will be glad to answer any
questions at the appropriate time.
[The prepared statement of Dr. Christy follows:]
Statement of John R. Christy, Professor of Atmospheric Science and
Director of the Earth System Science Center, University of Alabama,
Huntsville, Alabama
I am John Christy, Professor of Atmospheric Science and Director of
the Earth System Science Center at the University of Alabama in
Huntsville or UAH. I am also Alabama's State Climatologist and recently
served as a Lead Author of the U.N.'s Intergovernmental Panel on
Climate Change.
CARBON DIOXIDE
The concentration of carbon dioxide (CO2) is increasing in the
atmosphere due primarily to the combustion of fossil fuels. Fortunately
(because we produce so much of it) CO2 is not a pollutant. In simple
terms, CO2 is the lifeblood of the planet. The vegetation we see around
us would disappear if not for atmospheric CO2. This green world largely
evolved during a period when the atmospheric CO2 concentration was many
times what it is today. Indeed, numerous studies indicate the present
biosphere is being invigorated by the human-induced rise of CO2. In and
of itself, therefore, the increasing concentration of CO2 does not pose
a toxic risk to the planet. In other words, carbon dioxide means life
itself. CO2 is not a pollutant.
As an aside, it is clear that other emissions may be called
pollutants, e.g. sulfur oxides, nitrogen oxides and mercury.
Controlling these is a completely separate issue from controlling
emissions of CO2 and so will not be discussed here.
It is the secondary impact of increasing CO2 that may present
challenges to human life in the future. It has been proposed that CO2
increases could cause climate change of a magnitude beyond what
naturally occurs in the climate system so that costly adaptation or
significant ecological stress might occur. For example, enhanced sea
level rise and/or reduced rainfall would be two possible effects likely
to be costly to those regions so affected. Data from the past and
projections from climate models are employed to provide insight on
these concerns.
CLIMATE MODELS
Will increases in CO2 affect the climate significantly? Are
significant changes occurring now? Climate models suggest the answer is
yes, real data suggests otherwise.
Climate models attempt to describe the ocean/atmospheric system
with equations which approximate the processes of nature. No model is
perfect because the natural system is incredibly complex. One modest
goal of model simulations is to describe and predict the evolution of
the ocean/atmospheric system in a way that is useful to discover
possible environmental hazards which lie ahead. The goal is not to
achieve a perfect forecast for every type of weather in every unique
geographic region, but to provide information on changes in large-scale
features. If in testing models one finds conflict with even the
observed large scale features, this would suggest that at least some
fundamental processes, for example heat transfer, are not adequately
described in the models.
A common feature of climate model projections with CO2 increases is
a rise in the global surface temperature as well as an even more rapid
rise in the layer up to 30,000 feet called the troposphere.
Over the past 24+ years various calculations of surface temperature
indeed show a rise of about 0.7 F. This is roughly half of the total
rise observed since the 19th century. In the lower troposphere,
however, various estimates which include the satellite data Dr. Roy
Spencer of UAH and I produce, show much less warming, about 0.3 F--an
amount less than half that observed at the surface. The real world
shows less warming in the atmosphere, not more as models predict. Are
these data reliable?
A new version of the microwave satellite data has been produced,
but not yet published, by Remote Sensing Systems or RSS of California.
Two weeks ago a paper was published in Science magazine'' electronic
edition which used a curious means of testing our UAH version against
RSS. 1 The paper cited climate model results which agreed
more with RSS, because RSS data showed about 0.4 F more warming than
UAH's data for this same layer called the mid-troposphere. UAH's total
warming for this layer was about 0.05 F. (This layer is higher in the
atmosphere than the lower troposphere mentioned earlier with its 0.3 F
warming.) The strong implication of the paper was that since RSS was
more consistent with the model output, it was likely a more accurate
dataset than ours.
---------------------------------------------------------------------------
\1\ Santer, B., et al., 2003. Influence of Satellite Data
Uncertainties on the Detection of Externally-Forced Climate Change.
ScienceExpress, 10.1126/science.1082393
---------------------------------------------------------------------------
That same week, with much less fanfare, my latest paper appeared in
the Journal of Atmospheric and Oceanic Technology. 2 Unlike
the paper in Science magazine, I performed several rigorous tests to
estimate the potential error of our UAH satellite data. I used real
observations from balloon datasets created by independent
organizations, some with data from as many as 400 different balloon
stations. Our UAH satellite data and the balloon data corroborated each
other with remarkable consistency, showing only a slow warming of the
bulk of the atmosphere. This evidence indicates that the projected
warming of the climate model had little consistency with the real
world. This is important because the quantity examined here, lower
tropospheric temperature, is not a minor aspect of the climate system.
This represents most of the bulk mass of the atmosphere, and hence the
climate system. The inability of climate models to achieve consistency
on this scale is a serious shortcoming and suggests projections from
such models be viewed with great skepticism.
---------------------------------------------------------------------------
\2\ Christy, J.R. et al., 2003. Error estimates of Version 5.0 of
MSU-AMSU bulk atmospheric temperatures. Journal of Atmospheric and
Oceanic Technology, 20:613-629.
---------------------------------------------------------------------------
Changes in surface temperature have also been a topic of
controversy. The conclusion in IPCC 2001 that human induced global
warming was clearly evident was partly based on a depiction of the
Northern Hemisphere temperature since 1000 A.D. This depiction showed
little change until about 1850, then contains a sharp upward rise,
suggesting that recent warming was dramatic and linked to human
effects. 3 Since IPCC 2001, two important papers have shown
something else. 4 Using a wider range of information from
new sources these studies now indicate large temperature swings have
been common in the past 1000 years and that temperatures warmer than
today's were common in 50-year periods about 1000 years ago. These
studies suggest that the climate we see today is not unusual at all.
---------------------------------------------------------------------------
\3\ Mann, M.E., R.S. Bradley, and M.K. Hughes, 1999: Northern
Hemisphere temperatures during the past millennium: Inferences,
uncertainties, and limitations. Geophys. Res. Lett., 26, 759-762.
\4\ Soon, W. and S. Baliunas, 2003: Proxy climatic and
environmental changes of the past 1000 years. Clim. Res., 23, 89-110.
Esper, J. E.R. Cook, F.H. Schweingruber, 2002: Low-frequency signals in
long tree-ring chronologies for reconstructing past temperature
variability. Science 295, 2250-2253.
---------------------------------------------------------------------------
WEATHER EXTREMES AND CLIMATE CHANGE
I want to encourage the Committee to be suspicious of media reports
in which weather extremes are given as proof of human-induced climate
change. Weather extremes occur somewhere all the time. For example, in
the year 2000 the 48 conterminous states, the U.S. experienced the
coldest combined November and December in 106 years. We've just again
witnessed a colder than average winter in the Eastern U.S. with some
record snowfalls here and there, while the California mountains had one
of the coldest and snowiest April's ever. However, looking at these
events does not prove the country is experiencing global cooling any
more than a hot July represents global warming.
Has hot weather occurred before in the US? In my region of Alabama,
the 19 hottest summers of the past 108 years occurred prior to 1955. In
the Midwest, of the 10 worst heatwaves, only two have occurred since
1970, and they placed 7th and 8th. Hot weather has happened before and
will happen again. Such events do not prove climate change is
occurring.
Similar findings appear from an examination of destructive weather
events. The intensity and frequency of hurricanes have not increased.
The intensity and frequency of tornadoes have not increased. The same
is true for thunderstorms and hail. (Let me quickly add that we now
have more people and much more wealth in the paths of these destructive
events so that the losses have certainly risen, but that is not due to
climate change but to progress.) Droughts and wet spells have not
statistically increased or decreased. In a paper published last year I
demonstrated from a rigorously constructed temperature dataset for
North Alabama that summer temperatures there have actually declined
since the 19th century. 5 Similar results have been found
within states from California to Georgia.
---------------------------------------------------------------------------
\5\ Christy, J.R., 2002: When was the hottest summer? A State
Climatologist struggles for an answer. Bull. Amer. Meteor. Soc. 83,
723-734.
---------------------------------------------------------------------------
One century is a relatively short time in terms of climate time
scales. When looking at proxy records of the last 2000 years for
drought in the Southwest, the record suggests the worst droughts
occurred prior to 1600. The dust bowl of the 1930's appears as a minor
event on such a time scale. This should be a warning that with or
without any human influence on climate we should be prepared for a
significant, multi-year drought. (Low cost energy would help mitigate
the costs of transporting water to the stricken areas.)
When considering information such as indicated above, one finds it
difficult to conclude the climate change is occurring in the U.S. and
that it is exceedingly difficult to conclude that part of that change
might have been caused by human factors.
In the past 150 years, sea level has risen at a rate of 6 in.
4 in. (15 cm 10 cm) per century and is
apparently not accelerating. Sea level also rose in the 17th and 18th
centuries, obviously due to natural causes, but not as much. Sea level
has been rising naturally for thousands of years (about 2 in. per
century in the past 6,000 years). If we look at ice volumes of past
interglacial periods and realize how slow ice responds to climate, we
know that in the current interglacial period (which began about 11,000
years ago) there is still more land ice available for melting, implying
continued sea level rise with or without climate change.
One of my duties in the office of the State Climatologist is to
inform developers and industries of the potential climate risks and
rewards in Alabama. I am very frank in pointing out the dangers of
beach front property along the Gulf Coast. A sea level rise of 6 in.
over 100 years, or even 50 years is minuscule compared with the storm
surge of a powerful hurricane like Fredrick or Camille. Coastal areas
threatened today will be threatened in the future. The sea level rise,
which will continue, will be very slow and thus give decades of
opportunity for adaptation, if one is able to survive the storms.
The main point I stress to state and local agencies as well as
industries is that they invest today in infrastructure that can
withstand the severe weather events that we know are going to continue.
These investments include extending flood way easements, improvements
in storm water drainage systems and avoiding hurricane-prone coastal
development, among other actions. There are ways to reduce our
vulnerabilities (i.e. enhancing our resilience) by increasing the
investment today in the proper infrastructure or by avoiding future
disasters with common sense building regulations. Our economy is
affected much more by these extreme events which arrive every few years
or decades versus whatever slow changes may occur due to human-induced
climate change. The economic payoff would be tangible for such
investments. The payoff for restricting energy use and economic
activity for an unknown (and likely unknowable) future based on climate
change scenarios is much less profitable for all concerned.
KYOTO'S IMPACT ON CLIMATE AND ECONOMY
One week ago today, the BBC published a report noting that the
European Union has again exceeded their annual carbon dioxide targets
under the Kyoto agreement. So in countries with apparently strong
motivation for reducing carbon dioxide the treaty is failing. But that
really is not a problem. (Under the Kyoto Treaty the U.S. was asked to
reduced CO2 emissions 7% below 1990 levels.)
There have been many proposals to reduce CO2 emissions, some in
this country, both more and less harsh than the Kyoto Protocol. In one
way or another, each proposal seeks to limit energy usage through
direct or indirect increases of the cost over market prices. A
fundamental fact that our nation needs to understand is that any of
these proposals if implemented, will have an effect on the climate so
small that we would not be able to detect it. This is something I can
speak to as my work focuses on precise measures of climate quantities.
The evidence convinces me that none of these proposals would change to
a noticeable degree whatever the climate is going to do. Raising the
cost of energy with no detectable result generally falls into the
category of a waste of American income.
I am decidedly an optimist about this situation. Our country is
often criticized for producing 25% of the world's anthropogenic CO2.
However, we are rarely recognized and applauded for producing, with
that same CO2, 31% of what the world wants and needs; it's food,
technology, medical advances, defense of freedom, and so on.
6 Today this is done primarily with the burning of carbon,
but in the future will come from other inexpensive and efficient
sources. For example, the U.S. produces a unit of GDP using about 55%
of the energy required to produce the same unit in 1970. The U.S. is
decarbonizing its economy and this will continue. Even though carbon
dioxide is not a pollutant, and energy from carbon allows people to
live better lives, we can look forward to new sources of energy as the
genius of America works on the next source of inexpensive energy.
---------------------------------------------------------------------------
\6\ World Development Indicators, World Bank 2001 (for year 2000),
U.S. is $9,388B, World is $31,337B.
---------------------------------------------------------------------------
I often mention that early in my career I served as a missionary in
Africa. I lived upcountry with people who did not have access to useful
energy. Put simply, access to energy means life, it means a longer and
better life. I watched as women walked in the early morning to the
forest edge, often several miles away, to chop wet green wood for fuel.
They became beasts of burden as they carried the wood on their backs on
the return trip home. Wood and dung are terrible sources of energy,
with low useful output while creating high pollution levels. Burning
wood and dung inside the homes for cooking and heat created a
dangerously polluted indoor atmosphere for the family. I always thought
that if each home could be fitted with an electric light bulb and a
microwave oven electrified by a coal-fired power plant, several good
things would happen. The women would be freed to work on other more
productive pursuits, the indoor air would be much cleaner so health
would improve, food could be prepared more safely, there would be light
for reading and advancement, information through television or radio
would be received, and the forest with its beautiful ecosystem could be
saved. Access to inexpensive, efficient energy would enhance the lives
of the Africans while at the same time enhance the environment.
There are parallels in this country. Any of the proposals to reduce
energy consumption by mandate (promoted in the state legislatures and
the congress) would do nothing measurable to reduce the climate impacts
of CO2. However, they would cause increases in energy costs (i.e.
taxes). These additional taxes would fall disproportionately on the
poor, who buy gasoline and home-heating at the same rate as everyone
else. Their lives would be made more precarious as a result.
In Hearings such as this we are often asked at the close, ``If you
were a congressman for a day, what would you do on this issue?--My
answer is two fold. First, I would do no harm, I would not force energy
prices up and thereby hurt the U.S. economy in general and the poor in
particular. 7 Second, I would help America do what the
innovative people of this nation do the best, help scientists and
engineers discover the next source of low carbon energy, while building
up our resilience to weather events, like floods, droughts, tornadoes,
hurricanes that we know are going to continue, climate change or not.
---------------------------------------------------------------------------
\7\ Energy Information Administration, Impacts of the Kyoto
Protocol on U.S. Energy and Economic Activity (Washington D.C.: U.S.
Department of Energy), http://www.eia.doe.gov/neic/press/press109.html.
Costs estimated for a reduction of CO2 by 3 % (not Kyoto's 7 %) below
1990 emissions are between $125 and $280 billion per year of an economy
of $9,425 billion, or about 1 to 3 %.
---------------------------------------------------------------------------
______
[A letter submitted for the record by Mr. Christy follows:]
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The Chairman. Thank you. I thank the entire panel for their
testimony.
Dr. Christy, I believe it was last week there was a news
report about a new study that had come out about a new round of
global cooling that we were entering into. Are you familiar
with that? Have you had a chance to see that yet?
Mr. Christy. There are several aspects of studies that have
come out dealing with the North Atlantic anomaly and other
types of circulation shifts in the northern hemisphere that
point to a shift toward cooler northern hemispheric weather,
principally to affect eastern North America and Europe.
We are pretty bad at predicting the climate in the future--
think of a weather forecast a week from now. So there is some
support that we were in a warm phase in the past 20-25 years
and now we are going to a cooler phase, but I would not bet too
much on that.
The Chairman. One of the reasons that I asked you that
question is that for the last 20 years, we have heard about
global warming and it seems like in the last year or year and a
half, that has changed to global climate change, and now we
talk about global climate change because everything seems to be
a result of the global climate change. In the west, we have
gone through a drought and a lot on the extreme side of this
debate are saying well, that is because of this global climate
change, we are going through a drought.
I remember the worse drought in my memory in the west was
during the mid-1970's and nobody said it was because of global
climate change then, it was the weather. But now we are blaming
everything on that.
Could you elaborate a little bit on your experiences in
Africa. I know that you had that in your written testimony and
I am interested in what your perspective is on that.
Mr. Christy. Actually I lived in Marin County in 1976,
1975, during those years of tremendous drought.
The Chairman. When you guys were putting water in your
bathtub and using it to save.
Mr. Christy. That is right.
When I lived in Africa, I think one of the things that
really struck me about energy was to see in the crack of dawn
hundreds of women from the village leave their homes, walk to
the edge of the forest, chop down the forest, take these
bundles of green wet wood back to their homes to burn for fuel.
If you ever want to see the most inefficient fuel in the world,
burn wet green wood.
In their homes, in these mud huts, the air quality was
tremendously poor. They had tuberculosis, everything like that.
And it really took women away from a lot less burdensome
activities in the economy. So I always thought--and one of the
reporters took this line and vilified me with it--that if you
put a series of coal-fired power plants in Africa, you would
solve a lot of environmental problems. You would preserve the
forest, you would put people to better work, put a light bulb
and a microwave oven in an African home, you would increase
their air quality, their productivity and so on.
So I think the point we agree on is that if you want to see
environmental degradation, go to the Third World.
The Chairman. I agree with you completely on that. I had
the opportunity to spend quite a bit of time in a number of
African countries and when you go inside a mud hut with the
fire in the middle of the floor that they use for cooking and
warmth and everything else, it is a humbling experience to see
what they do in their daily life.
Another thing that you said was that the effects of the
Kyoto Treaty were so small on the environment as a whole, and
our previous panel talked about--I believe it was Mr. Murray
said that--if I get this right--that we would have less than a
.2 degree Celsius increase in temperature over the next 100
years with Kyoto and without Kyoto, it would take 96 years to
reach that point.
That seems to be the consensus. If you look at the models
that they are using, everybody seems to agree that using their
own models, that that is where we are going to end up. Well,
when you talk about the job loss, the impacts on the economy,
for what truly is a dubious advantage to entering into this,
the Kyoto Treaty really does not achieve even what they want it
to achieve.
Mr. Christy. I could go in a lot of directions on that one,
depends on what the Kyoto Treaty really wants to achieve.
The Chairman. Well, what they say they want.
Mr. Christy. OK. You are right. Climate models can give you
numbers that go out to 20 decimal places, they can show you
that if you do Kyoto or you do not do Kyoto, whatever decimal
place you want, you might determine. In the real world, where
we use satellites and instruments on the ground and so on like
that to try to determine exactly what the climate is doing, we
do not get that kind of precision. So this just becomes noise
in the signal, whatever Kyoto might do, we could not even
detect it.
By calling it climate change, then the extreme
environmentalists can look at hurricanes or flood or drought
and identify that, as you said, as caused by humans rather than
looking at the history of the world and saying these droughts
have happened before, these hurricanes have happened before.
And on the IPCC, as Lead Author, we nailed that point very
hard, that hurricanes are not increasing, tornadoes are not
increasing, floods and droughts are not increasing. None of
that stuff is happening, storms are not increasing. And we know
that because we can count those things and they just are not
increasing.
The Chairman. Well, thank you. I am going to recognize Mr.
Ney now.
Mr. Ney. Thank you, Mr. Chairman.
One of the questions I had of Mr. Trisko, a lot of times we
are told do not worry, when one industry goes down, something
will take its place. For example, we heard when the
manufacturing industry was starting to go down, you know, the
computer companies will take over. We all saw what happened to
dot.coms, how many people were unemployed.
So the question I have is for those who say do not worry
about this because if Kyoto is implemented here, there will be
environmental companies that will come into being and they will
employ people. Do you have any comment on that?
Mr. Trisko. Congressman Ney, for all the studies that have
been done prior to Kyoto and subsequent to Kyoto, that have
examined the impacts of the agreement on the U.S. economy and
on employment, all of the employment data that are cited, for
example, in my testimony, and I cite half a dozen studies, and
generally the job impacts range north of a million jobs, on the
order of between one and two and a half million jobs. Those are
net job impacts, those are net job losses in the economy.
So there is a much larger gross displacement of employment
in the areas of the country that would be particularly
affected. And we meet here today in the epicenter of the region
that would feel the most profound impact. Because the Midwest
overall is responsible for 70 percent of electric generation
from coal, the impact of Kyoto in this region will be far
greater than in any other region of the country. So for this
region, it is reasonable to expect that there will be a
significant large net employment change.
The most recent study that I cited in my testimony is the
Penn State study that assumed an 80 percent displacement of
Ohio coal and the replacement of that coal with natural gas
generation and natural gas assumed cost of $5.00 per million
BTU, which now looks fairly conservative as an assumption. That
study estimated a net loss of 260,000 jobs for the Ohio
economy. So while there may be some jobs created, there will be
a much larger number of jobs displaced.
Just by way of information, within the labor community,
there has been a segment representing some of the higher tech
or service industries that see that there may be some potential
for job creation and they have touted a school of thought
called ''Just Transition`` that we should make a just
transition from the way our economy operates now to some kind
of future higher tech economy. For the traditional
manufacturing unions and production unions of the AFL-CIO, the
term for just transition is just unemployment.
Mr. Ney. I note that it would hit very hard the
manufacturing jobs, but it would hit small business as well.
That is why we have also on the panel a local mayor and Gary
Obloy who works with the poor. People are already having
trouble. I just think it filters through, it is going to hit
extremely hard and that is just going to filter all the way
down. It will affect white collar, blue collar, I think in
particular it will just really devastate the amount of jobs we
have left, especially in the blue collar area.
One other question I had for Mr. Christy, and I have talked
to scientists in the past on this, and I have been to China.
You ask them what do you do with your toxic waste. It is easier
to get an answer out of Saddam Hussein than it is out of the
Chinese government where they put their toxic waste.
If you look at the entire situation of trying to clean up
the world, you have all these countries--India and China and
Mexico--all in the plan, it would probably be easier to justify
in a sense how this would work, looking at it from that point
of view. But I have talked to a lot of scientists and I have
asked them the question, you know, if you exempt those
countries and they still pollute, which they do, and I have
physically seen it in those countries, how on earth does that
clean up the environment. And some of the answers you get will
not have sound science, it is an answer that is--somebody will
tend to be just over-zealous in an environmental cause, they
cannot give you a scientific rationale.
My question is, of the scientists--I do not know if you can
answer this, but of the scientists on earth, to a great
portion, are they in one direction on this issue or is it split
in half? Do you have any idea?
Mr. Christy. Well, I can say this, actually in terms of
people who study climate, who are true climatologists, there
are not that many, and they are by and large persuaded by the
observed data that we have that do not show that there is a
significant problem with the climate. It is just not going in a
dangerous direction at all.
And back to your earlier comment, I would make it clear
that there is a big difference between the toxic waste and
stuff that you see in these other countries and carbon dioxide
in the atmosphere. One is kind of pretty good and the others
are bad. So if you could think of it this way, if you increase
energy access in those countries, you could trade good carbon
dioxide for cleaning up bad toxic waste.
Mr. Ney. If people have not traveled outside the United
States, especially to certain countries, they do not have rules
and regulations--China works the average worker with 1 day off
a month, 15 cents an hour. When the average woman turns 28
years old, she is dismissed from her job because she is worn
out. They do not have regulations and labor departments. They
do not follow the rules, they don't follow the human side of
the rules, they do not follow certainly the environmental side.
You will not get a lot of answers where they are going to dump
toxic waste. And that is in a lot of countries that we deal
with.
So when we talk about cleaning up the environment, we have
this other massive amount of violations of the environmental
laws and we would never catch up. The statement was made
earlier, you know, about the battery acid you are cleaning up
while the neighbor is dumping more in.
You can appreciate people's point of view from a sound
science, if they approach it that way it is a little bit easier
to understand. That is why I wondered how the scientific
community weighed in on this.
Mr. Chairman, I would just like, from my end of it, I would
just like to encourage everyone in the audience to take copies
of today's testimony which is over here to my right on the
table. Also, Mr. Chairman, I would like to recognize Kurt
Christensen and Jack Belcher from your staff and J.P. Dutton
from our staff who have worked on these issues. Also in the
back of the room I see Jerry Kapisky, who has sat through many,
many hearings in the Ohio House with me. We appreciate seeing
Jerry here in the audience.
Mr. Chairman, just to conclude from my end of it, I want to
thank again everybody for being involved. I want to thank you
for your willingness to come here, your willingness to listen
to us and your sincere desire to be fair when it comes to this
issue which is so important. Thank you.
The Chairman. Thank you.
I just had a couple more questions before we adjourn the
hearing. Mr. Obloy, could you give me the economic and social
profile of the average LIHEAP recipient in your community?
Mr. Obloy. I would like to answer that in a twofold answer.
I testified earlier that we had some additional applicants this
year. Approximately half of those applicants had lost their job
during the previous year, the other half came in because of
increased utility costs, which leads me to say that really the
typical applicant we would see with the home energy assistance
program, I am going to call her Jackie, that is not her real
name, for protection of confidentiality. Jackie is a 73 year
old widow. She has an income of $711 a month Social Security.
She spends $350 for rent, probably another $185 or so for
utilities, gas, electric, water, sewerage, telephone. She
receives $71 a month in food stamps, spends that money and an
additional $100 for more food and other required items. She
continues to pay $32 a month for life insurance. She is covered
by Medicare, has no prescription coverage, has to rely on
Wheeling Health Right to provide medicine that she needs.
She is left with--so her total expenses for the month are
about $668. That leaves her about $43 a month for disposable
income. Any increase, any increase whatsoever, in a cost of
energy for people like Jackie is going to have a devastating
and tremendous effect on her, her ability to just survive and
make decisions as to what she is going to use her money for--is
it going to be medicine, is it going to be food, is it going to
be to keep her house warm.
And it is people like Jackie that we need to keep in mind
when we make decisions that are going to affect energy, the
cost of energy and the people that we have an obligation to
care for. Thank you.
The Chairman. Thank you.
Mr. Mayor, I appreciate your testimony. You look at the
testimony we have had here today and, you know, to start off
with, the companies that are looking at things on a global
scale and a big scale, the workers who obviously are concerned
about their jobs and their future, for Mr. Obloy about those
that have a real tough time in dealing with all of this, but a
lot of what you have to deal with is that small business owner
who may not be directly related to this industry, but if this
industry is gone, so is he. And that impact on your community.
It has to be an ongoing problem for you to deal with.
Mayor Homrighausen. Most definitely. You know, as a
municipal electric community, we have to watch our costs. That
is why the majority of business and industry that is in Dover
is located in Dover, and any increase we incur affects them
drastically. We just lost A.K. Steel 2 years ago, been
fortunate to put two other concerns back into the plant, but
you know, any impact that the Kyoto Treaty would have on the
coal industry has a direct impact on the city of Dover because
we use coal to generate electricity or a portion of our
electric.
The EPA, here again, with a PM2.5 and the ozone, to my
knowledge, I do not believe that there is technology available
yet that will measure PM2.5. I do not believe that there is any
technology available that will measure the mercury reductions
that they are looking for. And if my memory serves me correct,
as we were--we just met in Washington in February on this issue
with the EPA--mercury reductions, I believe it is going to be
50 pounds emissions that you are allowed to emit per year and a
scrubber that would affect some of the, and remove some of the
mercury would cost the city of Dover $4 million to put a
scrubber in. And we would have to put a scrubber in. However,
the scrubber would do absolutely no good, because we only
emitted 5.5 pounds last year. So you would have to add that to
our electric bill, and anything else that is required.
We appreciate, Congressman Ney and you, Chairman Pombo, for
giving us an opportunity to speak.
The Chairman. Well, thank you. I thank the panel for their
testimony and answering the questions. One thing that is very
important to me is that we get Members of Congress outside of
Washington. I talked to Bob about doing this, coming out here
and having real people have the opportunity to tell their side
of it, and what the impacts are. Getting this on the
Congressional Record, making this part of the decisionmaking
process is important, because a lot of times back in
Washington, you get isolated, you get isolated inside the
debate that exists there and it is important that we move
outside of that, that we listen to real people, that we do as
much as we can in terms of bringing Congress back to the people
where it belongs. So this is an effort that I am making.
Congressman Ney has been very helpful in helping us to do this.
As Chairman of House Administration, he has made it possible
for my Committee to do these field hearings and to come out and
listen to people. So I thank him for doing that and for
welcoming me into this community.
All of you, thank you very much for attending the hearing.
The Resources Committee welcomes any written comments that
those in the audience wish to submit. These comments will be
made part of the official hearing record that will be published
by the Government Printing Office. These comments should be
mailed within the next 2 weeks to the House Committee on
Resources and the address is 1324 Longworth House Office
Building, Washington, D.C. 20515.
So thank you all very much. I thank the panel and the
previous panel for your testimony. It was productive. Thank
you.
[Whereupon at 11:55 a.m., the Committee was adjourned.]
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