Skip to main content

tv   Hearing on the Economic Impact of Climate Change  CSPAN  August 14, 2022 2:24am-4:05am EDT

2:24 am
2:25 am
climate legislation.
2:26 am
>> all right. the committee on banking, housing and urban affairs will come to order. welcome to the three witnesses in person and our fourth witness online and thank you for that. climate change is here. the country knows it. it's here for ohio teachers and students forced to work in schools without air conditioning in 90 plus degree heat for more and more days at both ends of the school year. it's here for ohio cities and towns. like the one mr. florida comes from that draw their drinking water from lake erie and face higher and higher costs from harmful algae blooms. it's here for ohio farmers, many of whom lost an entire growing season in 2019 because of extreme rain. who will soon be forced to grow crops, forced to learn to grow crops that used to be better suited to arkansas than ohio. it's here for our neighbors in kentucky who watched their homes and communities wash away in the devastating floods this week.
2:27 am
the kind that scientists warn are becoming more common. we have seen these pictures, pretty much all of us in the room. the flooding could be in many of our states. ask mayors, ask school stupor superintendence, and county commissioners about the increasing cost they deal with already because of climate change costs. we know will only get worse and we know who will be forced to pay for these costs. it's not the oil companies that make record profits, $8.5 billion last quarter for bp. that's only three months. $12 billion for chevron. that is $4 billion in profits a month. $12 billion for shell. $1 billion in profits per week. $18 billion for exxon mobil. that is $200 million in profits a day. it is not these corporations that pay the bills local , taxpayers, the likely impact of climate change could cost people in my state $6 billion a year. these corporations and their executives have been getting
2:28 am
rich by price gouging consumers and polluting our communities for decades. taxpayers in ohio and around the country will be left to pick up the pieces. taxpayers are always left to pick up the pieces. that's why we have to act now to grow the renewable energy economy to make our communities more resilient to climate disasters. if we delay, it gets only more expensive to fix. in previous hearings, we've examined the threat of climate change to our financial system, the economic opportunities for good paying jobs in the low carbon economy, the role of insurance and protecting the economy from the coming impact , and how we can reduce carbon emissions as we improve our housing. in each hearing too many have , treated the looming catastrophe of climate change is just kind of a non-, or something so far out in the future that there's no need to spend time on it in this committee. that just makes no sense. as the committee tasked with overseeing the stability of our financial system that's what , we're doing. we have a responsibility to do all we can to prevent obvious risk from wrecking our local
2:29 am
communities and our financial stability. no one in this committee questions the need to prevent cyber crimes by asking how many banks have failed because of it. we don't dismiss financial scams because they don't pose a systemic risk to the financial system. at the moment. our towns are taxpayers can't afford for us to treat climate risk any differently, not when the effects in the economy are so clear. we have had almost the entire country under excessive heat, warnings, with floods, wildfires, and droughts and extreme storms threatening americans, lives and livelihoods. we know that communities in every state are about to be hit with massive bills, bills that many of them just won't see coming. we know there's tremendous economic opportunity if we address these threats in the right way. ohio, pennsylvania, and south carolina can create good paying jobs in the industries of the future. and if we don't lead, we know china will be all too happy to lead. this morning we'll hear from , four witnesses, including the executive director of one of the ohio groups that published a report called the bill is coming due.
2:30 am
it features eye opening figures detailing costs that will be borne by ohio towns and cities , and as a result, ohio taxpayers, because of climate change. what i hope to hear from witnesses that there is a recognition of the risk to our communities to the lives and livelihoods of our fellow citizens from these real and present and looming and growing threats. i hope we'll hear honestessments -- honest assessments of the state of the world we are in, and constructive suggestions of how we make it better. i hope will come away from this hearing thinking about how we can help towns and cities in ohio and rhode island and north dakota and pennsylvania that are living on frankly on borough time and how they can prepare for what is coming. let's create jobs for the 21st century. let's make sure the workers, and i hope the union jobs the , workers who will drive the 21st century economy can still live in the towns and cities were sent here to represent . senator toomey.
2:31 am
sen. toomey: thank you, mr. chairman and thank you to the witnesses here today especially , those who traveled a long way to be with us. i appreciate your taking the time and going through the effort to join us. every month seems to bring more bad news about energy. gas prices still remained near record highs despite modest declines in the last month, the cpi energy index was up over 41% in the past year as of june. this includes gasoline, fuel, oil, electricity and utilities. prices are rising across the economy and paychecks certainly are not keeping up. after adjusting for inflation, wages have declined 5% since president biden took office. in fact, unless you got a 12% raise in the last 18 months, you have effectively gotten a pay cut. working americans are becoming poorer every day. our democratic colleagues' wasteful spending coupled with a decade of ultra easy monetary policy caused a 40 year high
2:32 am
inflation and now the contraction in our economy. you know it is the last thing americans need? policies that are explicitly designed to reduce amenity -- american energy production and make the cost of energy even more expensive under the guise of addressing climate change but that's what the administration and many of my congressional allies have been doing. they have been eager to find any culprit other than themselves to explain the rising cost of energy. they tried supply chains, vladimir putin, and my personal favorite corporate greed. how , dear businesses be motivated by profit. my colleagues on the other side of the aisle really should be doing a little bit of self reflection, but instead they're trying to jam through a 700 page tax and spend bill that will through fuel, presumably of the carbon neutral kind, on this fire. $385 billion in corporate welfare for politically favored green energy, including $9 billion in generous subsidies for wealthy people to buy tesla s, when billion dollars to fund
2:33 am
electric garbage trucks and school busses, even though the infrastructure bill provided $5 billion for this purpose, $1.5 billion for state and local government tree planting. even though we sent state and local governments $500 billion in funding over the last two years while they were having record high tax revenue collections. then there is $1 billion to install solar panels in government assisted housing while we're in the middle of a housing affordability crisis. and how do our democratic colleagues propose to pay for all these? by raising by $326 billion on employers with half of that burden falling on us u.s. manufacturing companies, all of which will be passed on to workers, shareholders and consumers in the form of still higher prices. this pay for will exacerbate a recession that we're very likely already in. the massive tax and spending spree is really just the tip of the iceberg for the biden administration's costly energy policy.
2:34 am
excuse me. in less than two years, they've halted the keystone xl pipeline, erected onerous regulatory barriers to natural gas pipeline construction, mandated the highest ethanol blending requirement in the history of the renewable fuel standard , issued a moratorion oil and gas drilling on federal lands and offshore, and nominated for critical federal positions individuals who are openly hostile to the oil and gas industry. in our committee's jurisdiction, the sec has reached far outside its statutory authority to get in on the action. in march, the sec proposed a rule that would require all public companies to report every ghc greenhouse gas emissions in , their entire supply chain and among their customers, even though this data has nothing to do with the company's financial performance and is likely irrelevant to investors. in addition to hijacking the democratic process with its breathtaking scope, the sec proposal would impose enormous costs on public companies.
2:35 am
the sec itself estimated that the compliance costs the paperwork burden to these public companies will be an extra $6.4 billion annually for this rule alone. and that amount dwarfs the current annual compliance paperwork burden from all other sec regulations combined, which is about $3.8 billion. obviously the cost of the policies i've described so far are quite high. businesses which will shrink jobs that will be lost, less energy produced. but there are second order effects as well, higher prices for consumers, failures on the electrical grid, and less economic growth and a lower standard of living. the great irony of all this is that even for their extraordinarily high costs none of these policies is going to make a dent in slowing climate change. i'm not denying global warming, it's undoubtedly real. what i'm denying is that these policies will have any meaningful effect. think of this, if tomorrow the united states of america, the second largest carbon emitter in
2:36 am
the world, went completely carbon neutral. in other words, from a carbon point of view would be equivalent to america ceasing to exist. then global temperatures 80 years from now will have been reduced by 3/10 of one degree fahrenheit relative to what they would otherwise be. and this is not my analysis. this is according to the u. n. climate model. so feel free to estimate the impact of a few more rich people buying teslas. i know my democratic colleagues sincerely want to reduce greenhouse gas emissions anyway. well there's a way we can do that. there's one thing that has made a dramatic reduction in the u.s. greenhouse gas admissions already. it's american energy production . between 2005 and 2019, the u.s. led the world in emission reductions largely due to transitioning from coal to natural gas. david butterworth is worth is with us today. he's a business manager for the pipe liners local union 7 98
2:37 am
representing 6400 union pipeline workers. he's been a member of the union for 25 years. mr. butterworth will testify to the importance of traditional energy for grid reliability as well as the direct challenges his members face from hostility towards their chosen industry and profession. dan eberhart is with us today. he's the ceo of canary, an oil field services company employing roughly 400 people from new mexico to pennsylvania. mr eberhart will testify to the consequence of consistent under investment in traditional energy including policies that chill investment like the sec climate proposed rule. i hope my colleagues on both sides of the aisle listen to what they have to share today. i thank here
2:38 am
in washington with the bosch foundation in germany and in ohio he earned a bachelor's in political science from ohio state. welcome, mr. florida. mr. dan ever heard. ceo of canary and oil fields field services company. under his leadership, canary has become one of the largest corporations in that sector. frequent commentator and energy policy on various media outlets. he's a georgia native as is my mother, a laude graduate of vanderbilt and has a law degree from tulane. mr. david butterworth is a northeast regional business agent for pipe liners. local union 798 associated with ua< with the plumbers and pipefitters. he's a veteran of the u.s. army and worked his first pipeline
2:39 am
job as a welder helper a year after he was discharged. he's been business agent for six years while working as a welder here in the bs in journalism like my wife, from west virginia university. i look forward to your testimony. i hope you will also discuss how the infrastructure bill and the chips act and the inflation reduction act that we're about to pass will create thousands of good paying jobs for union workers. an emphasis on this side of the aisle, on union workers. dr. selina vasella, the founder and ceo of refocused partners. she joins us remotely from the west coast. she's the ceo of refocused partners which develops sustainability solutions for municipal and private sector clients around the world. she was educated at carnegie mellon in the rank members home -- the ranking member's home state, western pennsylvania, before assuming her current role has been a visiting professor, environmental policy at johns hopkins, an official in the obama administration, the epa and cpq. welcome. mr. joe flarida, you may
2:40 am
proceed. thank you for joining us. >> chairman brown, ranking member to me and members of the committee. thank you for the opportunity to testify on this most pressing issue. the economic costs of climate change. my name is joe flarida and i serve as the executive director of power of clean future, ohio. in a moment i'll share more , about our work and our incredible partners in ohio. i want to start today with two brief observations on the topic. first, i want to recognize that climate change is not a math problem. the impacts we will face as human beings are far more complex than we can put into simple economic or financial terms. the most vulnerable in communities in my home state of ohio and around the world will experience the most harm on the shortest timeline as a result of severe climate impacts. health consequences already impacting vulnerable populations will get worse. access to clean air, clean water , and healthy green space will become more scarce. and despite the false narrative, we hear often stable good paying
2:41 am
jobs for workers will be sacrificed if we ignore the environmental challenges in front of us. secondly, year in and year out, local governments are burdened with the most challenging public problems we face. they are the eyes that see these problems first, the voices that raise the alarm when we reach a tipping point and the hands that are asked to implement the solutions we identify. today, i am here to lift up ohio's elected local elected leaders and their tireless staff that are indeed raising the alarm on the financial costs of climate change. they both see these costs coming and in some cases are experiencing them now. in the face of a complex challenge, and one way to wrap our heads around it, it is a look at the numbers and how much it will cost us to act, and how much it will cost us to do nothing. my main point today is that we cannot afford not to act. we must act now.
2:42 am
clean future ohio was launched in february 2020 by an incredible group of policy experts advocates and local government leaders. we built this organization to do one thing, provide direct support to ohio's local governments to help them identify and adopt clean energy solutions. we support them in pursuing carbon reduction plans in big ways and small ways. we have learned that the right solution is the one that works best for that community, be it economically, environmentally, culturally, or even yes, politically. power clean future ohio, the ohio environmental council and our technical partner soda analysis recently issued a report titled "the bill is coming due, calculating the financial cost of climate change to ohio's local governments." this report assessed key climate impacts for local governments in ohio. for just 10 of these impacts, we estimate that local governments in the state of ohio will need to increase municipal spending between $1.8 billion and $5.9 billion per year by mid century
2:43 am
. for context, a 5.9 billion dollar increase will equate to an 82% increase over local 2019 government spending levels for environment and housing programs in ohio. not one of the local government power clean future ohio works with knows how they will pay for the increased costs, whether they are on the low end or the high end. there are the traditional approaches of increased taxes, bonds and government grants all financed by taxpayers. alternatively, cities, states and the federal government could hold accountable the corporations that caused this problem to start with. so what are the specifics of these costs? by 2050, ohio cities could see spending increases of over $2.2 billion to contend with harmful algal blooms and drinking water treatment. $1.7 billion to elevate roads that will be flooded due to change of precipitation and severe storms. $1 billion for road repair due
2:44 am
to damage as a result of increased freeze-thaw cycles. and 500 million $2 million -- $590 million to establish and operate new cooling centers during the summer months. our analysis provides a conservative estimate of additional costs that municipalities can expect. we know in most cases, these costs are already starting to accumulate and will steadily increase until they reach their mid century targets. the monetized amounts in our report represent only 10 of the 50 different impacts identified . had we accounted for all 50 impacts or additional impacts beyond that, the total increase in annual spending by municipal governments due to climate change is certainly higher. while this report seems to be full of bad news, all hope is not lost. we are very likely to incur considerable costs due to climate change the worst of this , crisis can be averted. local governments are leading the way and transitioning to clean energy.
2:45 am
they're adopting carbon reduction goals and putting into place bold climate action plans, but they need your support. our recommendation of congress is to one elevate this issue in every aspect of what you do and to further invest in local governments. there is no doubt that the costs and impacts we face are daunting, but i firmly believe that if we can do it locally we can solve it globally. thank you for the opportunity and i look forward to your question. thank you. mr. eberhardt, you're recognized for five minutes. thank you for joining us. >> chairman brown, ranking member toomey, and members of the committee. thank you for inviting me to testify today on the economic costs of climate change. climate change is one of the most significant issues of our time and i'm proud of the continuing role of the energy sector in reducing the carbon intensity of the energy.
2:46 am
americans rely on every day to power their communities and their lives. as ceo of canary, one of the largest privately held oil service companies in the united states i'm very familiar with , the positive impact business can have on communities providing good paying jobs and benefits to the hundreds of workers who are proud to call us their employer. we have about 400 employees. these are folks who proudly come to work every day, committed to building our reputation of trust, quality, service and commitment to excellence as well as safety today. . today, however, we are increasingly challenged by the mountains of red tape imposed by regulators, both local and federal, which is disproportionately impacted our industry, which is already one of the most heavily regulated in the country. as ceo, i also understand the important role of business in addressing the environmental impacts of energy production and helping to mitigate climate change. canary is already required to operate in a manner that protects the environment and human health responsibilities.
2:47 am
both of which are responsibilities we take very seriously. we are one of the nation's most innovative industries with billions of dollars invested industrywide in research and development in improving our efficiency and in trying to mitigate our impact on the climate, to develop technologies that allow us to produce the abundant and affordable energy that americans have come to depend on every day. i firmly believe the oil and gas industry can be our nation's most formidable ally in the fight against climate change. this view may be controversial, but we are what can provide the transition to a cleaner and brighter future but to do so we need the government as a partner, not as an adversary in this process. that is why i'm concerned that the u.s. securities and exchange commission's proposal, mandating public companies report their emissions and exposure to climate risk is a major move in the wrong direction. the proponents argue the sec proposed rule on the enhancement and standardization of climate related disclosures for investors will provide investors
2:48 am
with useful information on a company's exposure to climate risk, but the practical effect, as senator toomey mentioned, his opening statement, is to drive capital away from badly needed conventional energy and from infrastructure projects. this makes energy more expensive and denies america of a natural competitive advantage against other countries and will drive up costs for consumers, thereby making their lives their everyday lives more difficult. in a parallel trend in the capital markets, the growing popularity of environmental, social governance investment funds, esg's, are steadily strangling domestic oil production, which now sits at 11.6 million barrels a day, compared to the peak of 2019 of 13 million barrels a day when the economy wasn't as strong as it is today and the price of oil was lower than it is today. a report from last year from the international energy regulatory
2:49 am
forum estimates that 2021 oil and gas production remained 23% below the pre pandemic level of $525 billion while investment slumped by more than 30% in the industry in 2020. the report identified esg as one of the three principal drivers of this underinvestment. that is a predictable result of the nearly $2.7 trillion in esg funds that restrict investment and conventional energy producing companies. as committee members are undoubtedly aware, our economy faces a historic energy supply challenge right now. we're in an energy energy crisis and energy costs are too high. after a decade of under investment in the oil and gas sector, particularly since covid , current domestic output sits well below, pre pandemic levels while demand continues to return and and even climb. unfortunately, much of the shortage is driven by domestic energy policy, not economics , that has frozen new federal leasing and prohibited pipeline construction, discouraging the investment necessary to explore,
2:50 am
develop and produce the energy america needs to prosper. in fact, our energy that we purchased from overseas has gone from 0% in 2019 on a net basis to about 25% in 2022. you know, i would argue that we would rather spend that money on domestic energy production, not on buying it from sending dollars overseas to the middle east and elsewhere. our industry requires capital. it's very capital intensive and investor confidence to thrive. investor confidence follows from reasonable and predictable regulation. without these prerequisites, companies will not risk the capital needed to ensure we have a secure supply of energy. we're already starting to see the results of that. and this is partially why the energy costs have spiked this year. decapitalizing the oil and gas industry in the fight against climate change is the wrong approach. this will increase energy prices even more than than it already has, restrict innovation and
2:51 am
-- structural underinvestment has hampered capital-intensive industries upstream -- across the upstream and downstream sectors of our industry. today, there are barely 500. while the sec rule and adjacent policies undermine u.s. energy security and destabilizes the economy, the administration has done it'll do nothing to address consumer demand for the products. as an industry, we are responsible to the market, shareholders and our stakeholders and projected increases in demand. by comparison, the mixed signals coming out of the biden administration are discouraging investment and acting as a chilling effect on growing production which is what we need to do to lower prices to help consumers. regulatory burdens carry real cost that affect everyday americans. as prices rise across energy
2:52 am
categories, i strongly urge the committee to reconsider its current reliance on regulations and especially duplicate of ones and instead pursue a viable and durable path on climate policy that allows a reasonable transition time as well as protecting the environment, consumers, the economy and our national security. thank you. sen. brown: mr. butterworth, you are recognized for five minutes. mr. butterworth: thank you for the opportunity to testify today about climate change. i name is david butterworth. i am employed as a business agent for pipeline union 798. i represent approximately 6400 but -- my jurisdiction extends from virginia to maine and 904 of our members live throughout the northeast. i welded and worked on pipelines from 1998 until 2015 and was hired my current position in
2:53 am
january 2016. i am here today to talk about how climate change and energy policies affect the country, our towns and my membership. local 798 has attended and spoken at just about every federal and state pipeline hearing that has taken place in the northeast from 2016 until today. some of these pipelines are the atlantic sunrise, the atlantic coast, mariner east, mountain air express, mountain valley, northern access, just to name a few. we attended and spoke at each of these hearings because we know the massive work opportunities these projects provide our membership. our job prospects have dwindled significantly since the summer of 118 when weepy at 8300 members due to mountain valley pipeline and atlantic coast being in full swing. when completed the mountain pipeline will provide a backup generator system to a hospital
2:54 am
in roanoke, virginia and will also lead to increased manufacturing and jobs in the south. i come from a town in west virginia where good paying jobs are intertwined with the fossil fuel industry. i father and others helped build the alaska pipeline. local 798 is made up -- local -- towns like mifflin town, pennsylvania, oak grove, louisiana our towns you probably never heard of but if you travel to them you stand a good chance of meeting a pipeliner. we were once fortunate enough to be out of the national spotlight. unfortunately for us, those days are over and we find ourselves thrust and a national politics. this is not where we want to be. we are in the middle. middle-class workers are feeling the squeeze. i find myself asking questions like -- do the policymakers and those against fossil fuels truly believe we can shut down all
2:55 am
fossil fuels tomorrow and not fall into utter chaos. i ask this because during the texas trees we were shown a snapshot of the disorder that accompanies a broken grade. i also witnessed the gas hoarding that began to happen at my local gas station when the colonial pipeline was hacked. american citizens were filling large containers with gasoline without thinking about how this would affect the next person who simply wanted to fill up their tank. this brings me to my next point. a report published by the columbia university center on global energy policy shows a future continued use of natural gas for at least the next 30 years and there is no quick replacement for gas in the u.s. energy mix. switching from coal to natural gas power generation has dropped. according to the administration from 2005 until 2017, u.s. natural gas production increased by 51 percent and co2 emissions
2:56 am
decreased. the pipeline system guarantees a safe, efficient and clean energy transition. i support efforts to curb climate change but i do not support curbing climate change when the cost is grid reliability. we can achieve climate goals using common sense and american ingenuity while using carbon capture and other methods. both methods use the existing system and will bring climate change levels down. these new techniques will be protested and this committee along with the rest of congress has the power to support agendas that keep my members working, provide grid reliability and aligned with new strategies that address the current climate situation. i asked you tuned out the 10% of american citizens that protest literally everything and instead listen to a person who has played a part in building the power grid. we have the energy here and we need to use it so we do not end
2:57 am
up like germany who citizens will be introduced to warming houses and natural gas rationing this winter. please consider the plight of the grid builder stuck in the middle. we might have a better idea on how to conquer our dilemma. this problem can be solved through hard work that benefits the whole rather than the far right and far left fringes that continue to divide us. i would be happy to answer any questions you may have. sen. brown: thank you, mr. butterworth. dr. vajjhala. you are recognized. dr. vajjhala: thank you, chairman brown, ranking member to me and members of the community. i am pleased with the opportunity to testify today. are you him an architect and an engineer specializing in resilience structure solution. my firm, refocus partners has been working across the united states to develop projects to address physical and financial
2:58 am
risks of climate change. these issues have grown more urgent over the last decade. the cost of climate change -- the costs of climate change are already being felt across the country. this is not in the future. the effects of drought and storms are visible today. climate change will impact all parts of our economy. counterintuitively, the cost of most climate-related events are site specific and not economy wide. a hurricane or a wildfire does not hit a whole country at once. at the end of the day, the physical and financial impacts of disasters will be felt first and worst at the community level. recent omb estimates put the federal fiscal impacts of climate in action at up to $2 trillion per year. this is staggering. having a better understanding of the total economic cost is a central but we also need better ways of disaggregating these cost by region to motivate local
2:59 am
action to protect against the worst overall outcome. three areas where this committee can help break down the problem into more actionable pieces is by looking more closely at three types of cash. local revenue losses, reduction of assets lifetime and maintenance. revenue loss due to climate change cuts across all sectors. public utilities are already experiencing disruptions and losses due to climate-related events. the eia estimates that drought conditions in california could reduce -- by 40% this year. recent heat waves have resulted in operating restrictions and losses for passenger real systems nationwide and costly structural damages including derailments due to buckling tracks and melting our cables in places with typically mild climates like portland, oregon. in the water sector, there is a risk of saltwater intrusion that has costly implications for
3:00 am
coastal agriculture and drinking water from rhode island to alabama with financial risks that spread into the health care sector. these stresses have resulted in losses with the potential for municipal bond downgrades and defaults. i want to be clear, this is not all bad news. focusing on where we are losing money today offers an entry point for identifying her losses and liabilities are likely to increase. this also opens the door to new ways of financing, cost-saving and infrastructure investment such as coastal protection projects. they can be funded through direct savings, reduced insurance costs and --. climate impacts are already reducing infrastructure lifetime. these have longer-term financial consequences. the impacts of flash floods and wildfires can result in damage to infrastructure system. this places a major -- this
3:01 am
presents major budgeting problems. becoming unusable in half the time. in the worst cases, this can result in the collapse of private insurance markets and specific -- in specific sectors and regions. the r-arizona department of transportation offers a national model for risk management. maintenance backlogs can also highlight where to intervene to prevent cascading failures. the devastating toll of winter and summer grid failures highlight the need for infrastructure upgrades. investing hundreds of millions of dollars now can prevent billions in losses in the future. these investments must be well coordinated. the naval bases in norfolk and san diego offer excellent examples of how military installations can better protect
3:02 am
against the rise of storm surge. at the same time, these facilities show where resilience measures can be undermined if adjacent roads and bridges are not also upgraded so essential personnel can reach high priority sites. better information about critical infrastructure weak links can help identify where short-term local trade-offs like prioritizing emergency repairs over more robust upgrades can have long-term national costs and consequences. no single individual family or region is concerned with the total economic cost of climate change. everyone is concerned with their own security. we need better frameworks to translate the big picture costs of climate in action into levers for avoiding losses and reducing suffering. the infrastructure investment jobs act holds tremendous promise for addressing these challenges as does the inflation reduction act. physical protection and financial production for the
3:03 am
worst economic impacts of climate change must go hand in hand. breaking down the total economic cost can help identify opportunities to shape the next generation of infrastructure and make sure we move quickly to build what we need and not just what we had. thank you and i look forward your questions. sen. brown: thank you. i start mr. flarida, with you. every american has watched in horror as floods and wildfires have devastated communities across our country. as we witness this devastation, we are moved to help the victims and we worry also that our communities could be next. what are the costs if you can delineate them that ohio communities should anticipate due to climate change? mr. flarida: chairman brown, the costs that we named in our report are conservative. what we are seeing is anywhere between a 1.8 billion and $5.9
3:04 am
billion estimate by 2050 and that is on an annual basis. the 10 impacts that we identified are cash we also see significant investment to elevate roads due to increased precipitation and flooding here there is also cost outside of that that are not recognized in the numbers. these are days missed from school for children because we are having severe heat events. sen. brown: listening to what mr. flarida said about one state , a large state but one state only, would you expect more costs from communities across the country -- would you expect similar kinds of problems and costs in communities that you work with and serve? dr. vajjhala: absolutely. we are seeing many of the sink challenges -- roads being washed away, water systems being degraded and the costs are worse
3:05 am
in places where infrastructure has been at least maintained. the places that are furthest behind are those that are likely to suffer most. sen. brown: give me a couple of examples. dr. vajjhala: i think deferred maintenance of water systems in michigan, for example. we have seen the case in flint where water systems are overmi lked. to absorb the impact of climate impact where they are overburdened with their current infrastructure and do not have the budget and the resources to replace it with something that is more appropriate. and also in the south. sen. brown: those communities that already struggle with their budgets that are not able to keep up with costs, communities that generally have a weaker or a lesser tax base are the ones that are hit the hardest and
3:06 am
will perhaps never catch up. mr. flarida, when local budgets are strained, communities have few options. they can cut essential services or raise taxes or in some cases do both. share some examples of how local governments in ohio are already seeing climate change affect their budgets. mr. flarida: one notable example we have seen in cincinnati is the columbia project. i was in cincinnati last week speaking with the mayor. it was enlightening to see as cincinnati has experienced an increase in rainfall in recent years, it is a hilly city. as a result, this is destabilizing roads and hills and so they have had to invest $18 million in this project which was taken out of their operating budget. the mayor said out of the blue and $18 million investment and for a city our size, this is a
3:07 am
massive hit to our operating budget. they had to take money out of a police station from district five to put towards this project. it is a perfect example of a central city services that they had to redirect to account for the damage due to climate change. sen. brown: and that is ohio's third largest city and the hilly is of the three. back to you, dr. vajjhala. your testimony highlighted issues -- how does taking action to reduce the cost of climate change also help these communities address historic inequities in infrastructure investment? dr. vajjhala: many of the communities that have faced the greatest environmental harms have either been decided by infrastructure, been underserved by infrastructure and being able to make investments and bringing the infrastructure to a state of good repair aching sure it meets
3:08 am
current needs can help us reach folks that are often the last in line for infrastructure dollars and investment and help us deal with climate challenges. in the city of hoboken, an excellent example, the city was able to move to create a six acre urban park that is also a flood protection measure that repurposed a major contaminated site. sen. brown: thank you. >> thank you, mr. chairman. as many of us probably remember, an incident from 2018 when demand for natural gas in new england during a cold snap ended with a russian lng tanker docked in boston harbor supplying gas. and the irony is incredible to me because this happened despite the fact that my state of pennsylvania is sitting on in norma's -- enormous reserves of natural gas. we have a tremendous amount of
3:09 am
natural gas we don't take out of the ground because we have nowhere to put it. the u.s. is now the world's leading lng supporter but we have not been able to complete a single pipeline to take this huge lot of gas we have in pennsylvania and bring it to new england. and we can't because new york and new jersey will not let us build the pipelines. the last new intrastate pipeline completed from pennsylvania into new york was in 2011. the shale boom had barely begun. we start with esther butterworth, does it make sense to you that we leave gas in the ground in pennsylvania instead of typing it to new england and as a result new england occasionally has to buy large quantities from countries like russia? mr. butterworth: the constitution pipeline was supposed to take gas from pennsylvania to the new england states. when i got this job in 2016, we were meeting with contractors to
3:10 am
pre-job the constitution. it got scrapped. i go to public hearings where i have been to some in new york and buffalo where a lady got up there and said -- we don't want your pennsylvania frack gas. that is the type of stuff we are dealing with. also, the nessie, which was going to take 1.8 million people off heating order in brooklyn, it never got through because they said -- aoc sent a rep there and said if you approve this project, the city will be underwater in 10 years. >> if it were possible to build these pipelines, among other things, would it likely result in more work for your members? mr. butterworth: heck, yes. >> mr. eberhart, it is my understanding that american energy extraction, oil and gas
3:11 am
extraction, is generally held to a higher standard of environmental quality than many other places in the world including russia. so substituting russian gas for american gas or gas from other places not only accomplishes nothing in terms of reducing gas consumption but it is worse for the economy because it is a lower standard. is that your understanding? mr. eberhart: i will tell you that the only country remotely close to us in terms of specifications for drilling on shore would be canada. no one else is even close in terms of opec, the middle east, russia to the environmental standards that we have. in terms of the condition we leave the ground in after a completion of a job come in terms of the carbon emitted during the drilling process, in terms of the natural gas from russia and the middle east would
3:12 am
have to be transported so there is carbon emitted from it being transported. it is much more efficient in transported by pipeline. the conclusion is that harvesting the gas in america and transporting it in america is vastly better for the environment. our standards -- it is a no-brainer to me if you are concerned about the carbon emitted during the drilling process or transportation. >> let me go back to mr. butterworth, there is a popular notion among some that the job losses from traditional energy projects like the keystone pipeline or others, they will be made up for with good, clean energy jobs. case and point at the white house press conference this last january, john kerry famously said that laid-off pipeline workers "can be the people that go to work to make the solar
3:13 am
panels." what do you think about that? can your guys that can't find work making pipelines, can they pack up and make solar panels? >> every welder that comes to a pipeline project has to take a test. these are highly skilled jobs that take years to develop the skills. i don't know and i am an all of the above guy but i don't know where the skill would be in building solar -- i don't think you can compare them on the skill level. >> it is not that easily transferable. >> and i have never been contacted by anyone wanting to put my folks on these types of jobs. >> you have never gotten a job offer from a solar power -- solar panel company. sen. brown: senator reed from ne -- from rhode island is recognized. senator reed: rhode island is the first state in the country
3:14 am
with offshore wind farms. the labor unions are involved -- were involved in that process from the very beginning. just five turbines, a small project, creates 300 jobs. the administration said nearly 80,000 similar jobs and they do involve welding and sheet-metal work and the other traditional traits. in one of the biggest wind developers and the northeast, they have already signed a pla with the building of all future windfarms. alternate energy is not the end of good paying jobs. it is the beginning and it also satisfies the demands of climate change. there has been a lot of discussion about the shift in the market from coal to natural gas and it is wonderful. that is not shared by the united
3:15 am
mine workers. let's be realistic. we have to deal with this climate change issue and we have to deal with good, solid jobs and we can do both if we determine to do that rather than just talking. dr. vajjhala, how would the economic benefits of the sec's climate disclosure rule --? dr. vajjhala: i think what you're hearing from me and a number of the witnesses is the importance of investing in the infrastructure and the jobs that provide the connective tissue to keep our economy strong. i think the sec's requirements particularly on risk management and strategy offer us a window into being able to see where these risks have implications for failures. outside of a single business. and where public investments can help strengthen the economy. sen. reed: it is the premise of
3:16 am
those that object to this rule that most companies or all companies do not have any material risks to climate change? how accurate without assumption be? dr. vajjhala: i don't personally believe that is an accurate assumption. i believe information in this case well used could be tremendously valuable. sen. reed: and should be made available to investors, shareholders and bondholders? sen. cruz: correct. --dr. vajjhala: correct. sen. reed: you mentioned coastal property values. a foundation reported that between 2005 and 2017 rhode island will have lost $44.7 million in property value due to the impact of sea level rise. and it will only continue and even accelerate. can you talk about what climate
3:17 am
change means to the future of the coastal real estate market? dr. vajjhala: this is an enor mous problems and it is one where there are not obvious solutions and we need better information on how to help communities protect themselves and where we can take measures to ensure there are smooth transitions for areas that are at the greatest risk and to make sure that we do not leave people behind. many, many people, especially older homeowners, the majority of their wealth is locked up in their homes. and in the absence of solutions that address both the physical and the financial risks, we are going to leave individual communities to suffer. i think this is an area for incredible innovation around infrastructure but also work with the insurance industry to make sure we are dealing with both the physical and financial risks. sen. reed: once again, for major insurance companies that have
3:18 am
extensive coverage of oceanfront properties, this financial risk is obvious right now and should be acknowledged and disclosed by the companies? would that be appropriate? dr. vajjhala: yes it should. sen. brown: senator cramer from north dakota is recognized. senator cramer: thank you to all of our witnesses. i have been writing a lot of notes and the first thing i want to say in response to the question earlier about the emissions of ships bringing natural gas from russia to the northeast rather than piping ed from pennsylvania, let me just tell you, this gets to the heart of one of your issues, mr. eberhart and that is, let's produce more american natural gas and american energy because according to the national energy
3:19 am
technology labs at the department of energy, according to their data, vladimir putin's natural gas emits about 50% more greenhouse gas emissions than american natural gas. if we did nothing but displaced russia's natural gas with american gas we would be doing a lot for workers and our country and for reducing greenhouse gas emissions. secondly, i want to get to this real issue at the moment -- of the moment and that is the cost of climate change over the -- overreaction. which i think leads or stems from the first point. chairman brown talked about the awful ceos of american companies that are making record profits. if the pricing is coming from the administration and from liberals in charge of this place were different, if they were different, wouldn't those profits instead be investments in creating jobs and cleaner
3:20 am
energy in the united states, mr. eberhart? mr. eberhart: absolutely, senator. your first point about the russian natural gas, i would like to add that the carbon intensity of oil from venezuela is twice what it is from american oil and there are various other countries like that. the carbon intensity from u.s. oil is lower than nearly anywhere else in the world. again, in addition to the environmental costs and the transportation costs, the carbon intensity as a lower so if the -- if the ultimate goal is to reduce carbon intensity and we are going to have the energy demand anyway and will not affect supply, or we will not affect energy but supply -- and to your second point, we want more investment in america and more jobs in america and we do it better, cleaner, safer and it is closer. the logic to meet would dictate that we focus on doing the best
3:21 am
we can with the natural resources we have in america and trying to do it in the cleanest way possible. sen. cramer: let me follow up with this question. because chairman brown also referenced if america does not lead, china will, to which i say, exactly. if we do not lead or if we lead with sec regulations that further burden american energy, are we to assume that china will also increase their regulatory scheme or will russia increase its regulatory scheme so they can follow the lead of the united states of america? mr. eberhart: absolutely not and to think that would be naïve. all of the esg investments -- we are handicapping the international competitiveness of american companies. the companies in charge do not have an esg score that will
3:22 am
negatively impact their banking relationship or their relationship with the government . china, saudi arabia, venezuela, these countries care about profits and they care about bringing in hard currency. they do not care about the environmental impact of what they are doing nor do they care about what it does to their local consumers. we have higher standards in america and we have a better outlook on balancing the environmental damage and the environmental cost with the jobs and the economy. the only country even close to the same standards as us is canada. the places you mentioned have no incentive to focus on the environment while extracting natural resources. sen. cramer: since we are talking about discrepancy of standards, you think workers in china or in russia are treated as well as workers in the united states? mr. butterworth: i would have to
3:23 am
look at their agreements. [laughter] really. i cannot answer that. i know we follow agreements that --and our folks are treated well. sen. cramer: the labor standards in russia and in china are not as good as those in the united states of america. so, i am for an america first. not in america only. but in america first agenda that takes care of workers and the environment. sen. brown: thank you for taking notes from my opening statement. that is a whole new concept. the senator from new jersey is recognized. >> i just want to say the suggestion that those of us who are concerned about climate change is an overreaction well, look at the wildfires in the
3:24 am
west. how many acres have to go up in smoke? look at the flooding in kentucky -- how many lives have to be lost? look at the droughts in the midwest where farmers are producing a fraction of the crop that they normally would produce. our colleague senator tester was saying on his farm he cannot produce as much as he used to because of climate change. look at the cattle ranchers that are selling their cattle prematurely because they don't know if they can keep them alive. and look at the northeaster's that we get on the east coast and i could go on and on. these are tectonic shifts affecting our very lives and livelihoods. and that is an overreaction? i think mother nature is not overreacting but sending us a message. flooding is one of the most expensive and frequent national
3:25 am
-- natural disasters in the united states and climate change will only intensify these events and it is critical these -- our communities are prepared for the challenges ahead. in new jersey we are leveraging federal resources to build state-of-the-art resilient infrastructure like hoboken's rebuild by design. this mitigation initiative which i help secure funding for will help alleviate repetitive flooding and protect against damage from storm surges. and for every dollar we invest in mitigation, the federal government saves six dollars in disaster relief spending. so, dr. r charla, shouldn't -- dr., shouldn't the government be investing more in flood resilience projects like the rebuild by design and in general on mitigation to reduce damages for costly disaster aid that subsequently comes forth? dr. vajjhala: absolutely,
3:26 am
senator. the costs of inaction far outweigh the cost of any overreaction. and the hoboken example is an excellent one. the work in hoboken to reinforce the coast, the water system and to build public infrastructure beautiful new parks is also going to protect the local hospital at was under many feet of water after hurricane sandy. and so i think we are failing to make the connection to where the positive benefits spread through the rest of society in reducing costs and the health care system, for example. sen. menendez: i appreciate that. i would be willing to make investments that give me a 6-1 rate of return and that is what mitigation does and that is why i introduced the bipartisan legislation that supercharges millions of dollars for
3:27 am
mitigation and the resilience of the nation's most flood prone areas. i hope we can get to that. that will not only save us money and save lives, it will also create a lot of jobs along the way. i have long been a vocal advocate for mass transit in my home state of new jersey and across the country and i am proud of the work of the committee to advance federal investments in our transit systems including the historic bipartisan bill signed into law. as a former mayor, i have seen firsthand the transformational effect that access to transit can have on a community. but it goes beyond just economics. every transit dollar we spend is also in my view a climate dollar. what role do you see transit playing in our community as we de-carbonized our economy? mr. flarida: transit systems can be the lifeblood of a city. we can be more connected, give
3:28 am
workers access to jobs and bring together economies. as we work with ohio communities, one of the key recommendations we have is to invest in mass transit. as transit, every investment we make there is a climate dollar. mass transit is a far less carbon intensive way of transportation than single occupancy vehicles. we also know transportation is of the largest emitter of greenhouse gases. sen. menendez: taking off of that, how will creating more livable, walkable communities help to lower greenhouse gas emissions and promote sustainability but also reduce cost for consumers and promote affordability? this is the essence of what i call the livable communities act.
3:29 am
we try to look at the housing needs that exist, we had a hearing the other day, in our country and create linkages to existing transit and access to jobs --what is your view on that? mr. flarida: we work with ohio communities to make their communities more livable and walkabout which means central planning helps to ensure we are preserving public health and give access to green space. i want to point to your example on reducing costs. the technology and the economics have aligned where we have an opportunity to invest in technology that will reduce emissions and save consumers money but it is not as easy as it sounds. we are fighting against incumbent industries that have been at it for generations and to do that we have to make sure they have the board -- the
3:30 am
barrier to entry lowered so they can get into the market. it is important that you are investing in this. sen. brown: senator warren for massachusetts is recognized. senator warren: with the inflation reduction act, democrats have announced a historic down payment in the fight against the climate crisis. this bill will cut our carbon emissions by 40% in just eight years. it is also going to cut immediate and long-term costs of energy, create american jobs, raise american wages and most importantly, save american lives. today, i want to talk about how the inflation reduction act would tackle two other major costs that fossil fuels inflict on american families and on the federal budget. first the cost of public health and second the cost of natural disasters. let me start with the public health cost. burning fossil fuels pollutes our air with low income
3:31 am
communities and communities of color being hit the hardest. none of the bigger causes -- one of the biggest causes is d cell. you are an expert on climate and environmental issues. if these vehicles, buses and trains, ran on electricity rather than on fossil fuels, what impact would that have on public health? mr. flarida: one of the major benefits -- every day we have cars, trucks, buses driving up and down our streets and through our neighborhoods taking our kids back and forth to school and they are emitting pollutants every time they drive on our roads. one important point, and a recent assessment shows this, as a result of transitioning the entire fleet, if we took our entire bus fleet and railroad fleet, we would see 4200 fewer
3:32 am
deaths annually, many of which are from children and elderly who are susceptible to ambient air pollution. sen. warren: 4200 deaths and others that would not get as sick but do not die. thank you. this is the reason why congressman lennon and i introduced the bills green act and by green -- build green act and buy green act. fortunately, parts of our bill were included in the infrastructure bill and now in the inflation reduction act which puts $4 billion towards electrifying our federal fleet as well as school and transit buses. this will help with public health and help reduce public health costs and advance environmental justice by ensuring our most vulnerable americans are breathing cleaner air. in fact, estimates suggest the
3:33 am
ira will result in as many as 3900 fewer premature deaths due to pollution in 2030. in addition to making us sicker, fossil fuels are exacerbating extreme other events as senator menendez just noted. they harm local communities, they harm communities around the world. a storm surge of 40 inches in south boston could displace more than 35,000 people and recovery would be massively expensive. dr., your organization works on issues such as addressing the sealevel rise and fire risk. with the climate investments and the inflation reduction act lower the cost of disaster relief for the federal government? dr. vajjhala: thank you, senator warren. the answer is 100% absolutely yes. investing in prevention is far
3:34 am
more cost-effective than relief and recovery. the recent omb study that highlighted climate change could lead to an annual revenue loss of close to $2 trillion a year noted it could also cost the government up to 128 billion dollars more per year just for dealing with coastal disaster relief, flood insurance, crop insurance, health care and wildfire suppression and flooding of federal facilities. there is no doubt that the inflation reduction act would help address these costs. sen. warren: tackling climate change is a bargain compared to the alternatives. according to the national institute of building sciences, every dollar spent on mitigating natural hazards saves society about $13 in expenses we don't incur. the inflation reduction act will help us avoid the cost in both dollars and in lives.
3:35 am
lives lost from pollution and from climate change and it is essential that congress pass this legislation immediately. thank you, mr. chairman. sen. brown: senator smith from minnesota is recognized from her office. senator smith: thank you and thank you to our panelists. i want to take a look at this from the perspective of local governments. i used to be the chief of staff and i know firsthand the challenges that the cities have trying to balance their budgets. from the perspective of where we are with the inflation reduction act, this bill will go a long way towards cleaning up our electric power grid, helping us to make everything we do as energy efficient as possible, and electrify as much as we can. all of that as senator warren said will result in significant emissions reduction, will result
3:36 am
in job growth and it will help americans everywhere especially in communities that have been most impacted by fossil fuel pollution, poor communities and communities of color. if you think about what this means in terms of local governments trying to run cities in the midst of the incredible expense of the climate crisis, that is what i want to dive into. we know that local communities are already taking action around climate -- you talked about what that looks like in ohio and in minnesota, many of our communities are doing the same thing. there was a story in the new york times about a town in minnesota and what they are doing. could you talk to us about how the things we are accomplishing in the inflation reduction act -- cleaning up the grid, improving energy efficiency and helping people to electrify home
3:37 am
appliances and other things like that, could you talk to us about how that will help local governments as they try to figure out how to balance their budgets? mr. flarida: thank you for the question. when we did this report to assess the cost of climate change to local governments, we estimated it is 6.9 billion dollars by 2050. one important point is that all of these costs do not reflect the private sector and the cost that will fall on everyday citizens, homeowners, renters and the need to contend with the changing costs due to climate change. the inflation reduction act is a great example of how we can invest and ease that burden on everyday americans that will feel these impacts. they will feel the heat in their cities and have to contend with that. they will have to install new air conditioning systems. they will have to find ways to adapt to a climate -- a changing climate that they are not used
3:38 am
to. sen. smith: thank you. i could not agree more. let me follow up on the question -- as we think about who ends up experiencing the worst impact of the climate crisis, it is often poor communities and communities of color, those that do not have the resources to make the investments they need and then are bearing the health cost of fossil fuel pollution. can you talk about how that will help communities, those with older housing stock, less efficient homes and people that don't have thousands of dollars in their checking account to make the improvements in energy efficiency and the electrification that will make a big difference to their bottom line and save the money? dr. vajjhala: the inflation
3:39 am
reduction act coupled with the inflation -- coupled with the jobs act has the opportunity to be transformational for communities that are already suffering and who will suffer more. when i think of transit systems and heat, who suffers most when our transit systems fail? it is the elderly, transit dependent workers left out waiting for the train that is not coming. and they are faced with being outside more often and for longer on the hottest days of the year. these same communities are also majority renters and they don't have the luxury of making upgrades to home buildings. the types of energy investment opportunities in the inflation reduction act have the potential to be transformational for household budgets where energy costs are a wildly increasing
3:40 am
portion of the total budget. i think this is a way of splitting the problem to not just look at who loses money when we don't address climate change but to put in front, who suffers and make sure we don't let that individual suffering translate to an economy wide health and employment impact. sen. smith: when we pass this legislation, it means we are saving money for people who live in communities across the country. rewiring america estimates this will save americans that can take advantage of the tax incentives, it will change -- it will save them $1800 a year in terms of their energy costs. that is going to make a very big difference. looks like a good deal to me. sen. brown: thank you, senator smith. the senator from nevada is recognized from her office. >> thank you, mr. chair.
3:41 am
i want to address this idea that there is an overreaction to the climate crisis and i want to invite my colleagues that believe that to come to nevada. everyone i talked to in my state and in the western state are dealing with some form of extreme weather because of the climate crisis. i know we are in a drought mode. we have a historic declaration made by the bureau of acclamation along the colorado river restricting water usage to nevada and arizona. please note that 90% of the water comes from the colorado river. you have to come to understand
3:42 am
that people take it very seriously and we should also. there is a way to focus on addressing the climate and putting smart policies in place. let me talk a little bit about smart policies because i am very proud in southern nevada where we have done a good job on ensuring that we are not only preserving or conserving our water recognizing the population continues to grow as well. let me ask you this -- how can the best practices of cities like las vegas help inform other cities on how they can improve water usage? in nevada in the early 2000s, we pay people to pick up their yard. the grass watering is where we
3:43 am
lose water do do have operation and it does not go back into the drains where we can recycle it. we paid people to take up the majority of the grass. so much so that if we put it in a line, there would be a ring around the earth. and there are still restrictions for putting it in place. best practices --can we learn from one another? are there things we should be thinking about when it comes to focusing on extreme weather and the climate crisis that is challenging to our water usage on the drought we are seeing? dr. vajjhala:from san diego wheo rely on water from the colorado river. we depend on the best practices of the community -- on the communities upstream from us. what las vegas and other towns have done to reward and create incentive programs for avoiding
3:44 am
lock in to behaviors that could lead to worse outcomes. small things at the individual level but when you add them up you end up with a systemwide problem when it comes to water efficiency and water use. i think best practices are going to be tremendously important in making sure that we follow what flows from the infrastructure investment and jobs act at the ground level in cities. i am interested in where maintenance and emergency repair best practices can help translate to cost savings for local governments and help with budget stabilization. in a lot of cases when we do this work well, success is from something that does not happen. the flash flood hits but the community road did not get washed out. we have to be following and monitoring the best practices to know what we prevented and what the value of that is. las vegas is an excellent model for that. sen. cortez masto: talking about
3:45 am
the bipartisan infrastructure package that we passed, this is $800 billion. i know that personally because i thought for some of that money so we could build large-scale water recycling projects. a cooperation relationship for the colorado river which will have a positive impact on our homeowners. we have to think outside the box but we also need the federal government working with the local governments and private partners. everyone should be working on this and not rely on just one government agency or another or one corporation. you talked about local governments. let me touch on one thing. across the country municipalities are working hard. some have highlighted the difficulties of raising of
3:46 am
capital due to climate change since credit rating agencies are unsure of the long-term fiscal stability of communities. can you speak on the issue of -- can you speak on the issue facing the bond market? dr. vajjhala: this is a tremendous challenge and one that requires more work. the implications for the municipal bond market are varied . communities that have been leveled by wildfires are still holding debt they have to pay back and that is obstructing their ability to rebuild better. so for those communities, you have to think about solutions that enable doubtful -- thoughtful --. for protecting the bond market itself, the investments we are discussing make bonds more secure. it makes communities more reliably able to pay back a debt they are already holding and
3:47 am
ensure the investments last as long as they are intended. that we don't pay for a road for 20 years that only lasts 10. sen. brown: we are going to change things a little. senator toomey will have a question and i will have one question. and we think senator van hollen will come back. sen. toomey: thank you, mr. chairman. this is going to be for mr. eberhart. we know that we have, mistakenly in my view, we have given so much discretion and power to financial regulators that we don't actually have to pass a law and often they don't have to pass a rulemaking to be able to affect the outcome they want with respect to the institutions they regulate such as their power over these institutions.
3:48 am
i wonder if you would comment on whether or not, and if so to what extent, you have seen a decline in the availability of credit, specifically capital in general for the oil services, for exploration and development of oil and gas? and if there is a decline in the availability and access to capital for these purposes, for whatever reason, has that contributed to the decline in energy reduction that you referenced in your opening comments? has that contributed to higher prices for consumers? mr. eberhart: i have a couple different points. first of all and speaking about canary specifically, i would say since the biden administration has come into office there has been a chilling effect on access to capital for us. folks we have had long-term relationships with have said -- these are big banks, banks that
3:49 am
people would know. we are under orders to shrink our energy portfolio and not make new energy loans to the oil and gas base and to reallocate to renewable energy. i would say that is a theme. i have not heard it once but maybe four times. that is on canary specifically. with respect to the larger industry, it is for joe your to me, i have been doing this for 20 years, and when you have a spike like this, i see a lot of startups from private equity finance start ups in this space and i am seeing zero of that with the elevated price level. i attribute that to the green green cloak on oil and gas and vesting with a five-year timeline will be replaced with renewables. that is the pointy end of this
3:50 am
beer appeared the more general conclusion is the medium and larger companies are reducing their investments in this space and that is why you see reduced drilling, and you are seeing less bond offerings unless ipos all as a result of this sense that oil and gas investing is reaching or will reach a terminal point. sen. toomey: in your view, does that translate to higher costs for consumers? mr. eberhart: less investment means less competition which means higher costs for the oil companies to complete the job. and if there is less access to capital and capital costs are higher they will do less drilling and this all leads to less production which leads to higher energy costs for consumers. sen. toomey: thank you. sen. brown: a question -- my last one for mr. flarida. the fossil fuel industry new decades ago that we would need
3:51 am
to transition to cleaner energy sources to avoid what they called globally catastrophic effects but instead of leading that transition they misled the public and they the energy workers deserve support as the industry changes. not more lies not more empty promises from from executives. that's why i introduced the american energy worker opportunity act and uh that last year to provide wage supplements and education and training and other benefits to workers who are impacted by the energy transition. so, talk about that the next step there, if that if we can do that, how will supporting energy workers in our state in ohio help communities address the cost of climate change? >> there are over 100,000 workers in the clean energy sector in ohio alone and today, now 3.5 times the number of americans work in the clean
3:52 am
energy sector than fossil fuels. some of the handwringing around access to capital, while they are record profits for that will and gas industry, i think it is frustrating to hear especially when oil and gas complete have known for decades about the problem they were creating and chose not to disclose that to the public. for our own health, well-being and economic futures, we have an opportunity to invest in clean energy and see good paying jobs, and i think we are seeing that in ohio. we have a lot of good news, with ford investing in ev manufacturing, battery manufacturing in ohio, intel will be investing in a semiconductor factory. these are clean energy technologies we need. we have soon to be the largest solar manufacturer in the country. there are incredible opportunities for clean energy jobs in ohio. my dad has been a member of a
3:53 am
union in ohio for years and i am proud to see him support and grow and build an incredible life for himself and my siblings. part of that is we are seeing incredible investments in that space. as i talk to him, he sees more and work -- more and more were coming. it's not necessarily something we should think about as a major challenge but as a major opportunity. >> thank you. senator van hollen from maryland is recognized. >> thank you. that is a great place to kick off from my question. i have a question about the costs and harm of doing nothing in terms of accelerating climate change but also related to the opportunities and to accelerate
3:54 am
our transition to a clean energy economy. on the costs and harm side, since 1982, about a 40 year period, we've had 69 what we call billion-dollar climate disasters impacting the state of maryland. nearly half of those 69 have occurred in the last decade, with 19 occurring in the last five years. noaa estimates those events will cost up to $20 billion in damages to maryland. are these estimates consistent with the kind of impacts you are seeing in other parts of the country, including acceleration of these impacts? and what would you say with respect to the likelihood of these costs increasing in an accelerating way in years to come? >> thank you for the question.
3:55 am
without a doubt, we will see costs increase as temperatures increase. we often think about climate change on the coast and we are trying to raise this issue in the state of ohio to say this will impact us in ohio. often times you think about this with hurricanes and wildfires, but every, ohioans are also experiencing this on a day-to-day basis, and certainly the floods in kentucky are a notable example of late. we will see costs increase, they will go up. an important number to thing about is the savings opportunity if we are able to keep global warming low 1.5 degrees celsius, which will result in a $25 trillion increase in global gdp. >> thank you for putting a big number on it, that is a big number, that is the cost of doing nothing. they're also the benefits in terms of gdp and jobs and good paying jobs of doing something
3:56 am
to accelerate the clean energy economy. that's what the legislation we will be voting on i hope soon, the inflation reduction act, will do, with respect to accelerating the reduction of emissions of greenhouse gases as well as helping to play more clean energy that will make it cheaper to hear holmes and cool your homes. -- heat your homes and cool your homes. in maryland, we are fortunate to have a buddy in offshore wind energy. two companies have projected together they will create 10,000 jobs in the state of maryland. we had an announcement yesterday from the deputy secretary of congress in maryland about an apprenticeship program that will go hand-in-hand with that to make sure we have the workforce to do the job.
3:57 am
obviously big benefits. you spoke about ohio. dr., can you expand on some of the estimates of job opportunities if we accelerate to a clean energy economy? >> absolutely. thank you for the question. i would like to highlight the job opportunities in the energy sector just -- not just for offshore wind but grid month -- grid monetization, building out the connective tissue. the infrastructure and jobs act will enable high-quality jobs where we know how to do this well. we are not doing it in places like texas. those are transferable skills, is not taking something from one sector and trying to put it over into another. these types of jobs i think are not limited to the energy sector
3:58 am
and there is a model in maryland i would like to highlight that i think could help create cross sector innovation, and that's the clean water partnership for managing stormwater and costs of disasters. it is designed to deal with stormwater in the chesapeake bay. the way the partnership was structured, it was specifically designed to train local workers, and the county resident utilization of the project is 78%. that is massive compared to many of these projects that often bring in outside employers and employees. i think this is an opportunity for place-based investment in high-quality jobs and retaining those jobs. >> i appreciate your raising that maryland example. those are important stories in maryland and around the country. i should underscore the fact that the 10,000 jobs i mentioned
3:59 am
associated with offshore wind in maryland will be good paying union jobs. both companies have signed agreements with respect to the nature of the jobs. i do see a lot of opportunity here and i just want to make sure that as we talk about the cost of doing nothing, we also talk about the benefits of action. thank you, mr. chairman. >> just a statement and then we will close. mr. butterworth talked about pipelines we have not seen built, i appreciate that he mentioned a couple specifically pewter i wanted -- specifically. i wanted to mention that the act will include a pipeline and i'm committed to working on that and with senator toomey if he uses. we would rather have energy produced here rather than the rest of the world. i think the panel made that clear.
4:00 am
we are not trying to get off of oil and gas cold turkey. i share the fears of unreliability, disorder and unstable work in the sector and i appreciate the good paid hourly wages in that sector. if we don't invest, no one will invest in energy, period. thank you you to the witnesses today. for senators who wish to submit questions, they are due one week from today, august 11. two witnesses, per committee rules, we ask you respond to any question we send within 45 days of receipt. with that, the hearing is adjourned.
4:01 am
[indistinct conversations]
4:02 am
4:03 am
4:04 am


info Stream Only

Uploaded by TV Archive on