[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
THE BUSINESS CASE FOR CLIMATE SOLUTIONS
=======================================================================
(117-7)
REMOTE HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
MARCH 17, 2021
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
__________
U.S. GOVERNMENT PUBLISHING OFFICE
44-617 PDF WASHINGTON : 2021
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri ELEANOR HOLMES NORTON,
DON YOUNG, Alaska District of Columbia
ERIC A. ``RICK'' CRAWFORD, Arkansas EDDIE BERNICE JOHNSON, Texas
BOB GIBBS, Ohio RICK LARSEN, Washington
DANIEL WEBSTER, Florida GRACE F. NAPOLITANO, California
THOMAS MASSIE, Kentucky STEVE COHEN, Tennessee
SCOTT PERRY, Pennsylvania ALBIO SIRES, New Jersey
RODNEY DAVIS, Illinois JOHN GARAMENDI, California
JOHN KATKO, New York HENRY C. ``HANK'' JOHNSON, Jr.,
BRIAN BABIN, Texas Georgia
GARRET GRAVES, Louisiana ANDRE CARSON, Indiana
DAVID ROUZER, North Carolina DINA TITUS, Nevada
MIKE BOST, Illinois SEAN PATRICK MALONEY, New York
RANDY K. WEBER, Sr., Texas JARED HUFFMAN, California
DOUG LaMALFA, California JULIA BROWNLEY, California
BRUCE WESTERMAN, Arkansas FREDERICA S. WILSON, Florida
BRIAN J. MAST, Florida DONALD M. PAYNE, Jr., New Jersey
MIKE GALLAGHER, Wisconsin ALAN S. LOWENTHAL, California
BRIAN K. FITZPATRICK, Pennsylvania MARK DeSAULNIER, California
JENNIFFER GONZALEZ-COLON, STEPHEN F. LYNCH, Massachusetts
Puerto Rico SALUD O. CARBAJAL, California
TROY BALDERSON, Ohio ANTHONY G. BROWN, Maryland
PETE STAUBER, Minnesota TOM MALINOWSKI, New Jersey
TIM BURCHETT, Tennessee GREG STANTON, Arizona
DUSTY JOHNSON, South Dakota COLIN Z. ALLRED, Texas
JEFFERSON VAN DREW, New Jersey SHARICE DAVIDS, Kansas, Vice Chair
MICHAEL GUEST, Mississippi JESUS G. ``CHUY'' GARCIA, Illinois
TROY E. NEHLS, Texas ANTONIO DELGADO, New York
NANCY MACE, South Carolina CHRIS PAPPAS, New Hampshire
NICOLE MALLIOTAKIS, New York CONOR LAMB, Pennsylvania
BETH VAN DUYNE, Texas SETH MOULTON, Massachusetts
CARLOS A. GIMENEZ, Florida JAKE AUCHINCLOSS, Massachusetts
MICHELLE STEEL, California CAROLYN BOURDEAUX, Georgia
KAIALI`I KAHELE, Hawaii
MARILYN STRICKLAND, Washington
NIKEMA WILLIAMS, Georgia
MARIE NEWMAN, Illinois
Vacancy
CONTENTS
Page
Summary of Subject Matter........................................ vii
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. Peter A. DeFazio, a Representative in Congress from the
State of Oregon, and Chair, Committee on Transportation and
Infrastructure:
Opening statement............................................ 1
Prepared statement........................................... 6
Hon. Sam Graves, a Representative in Congress from the State of
Missouri, and Ranking Member, Committee on Transportation and
Infrastructure:
Opening statement............................................ 7
Prepared statement........................................... 8
Hon. Garret Graves, a Representative in Congress from the State
of Louisiana, opening statement................................ 9
Hon. Eddie Bernice Johnson, a Representative in Congress from the
State of Texas, prepared statement............................. 133
WITNESSES
Jack Allen, Chief Executive Officer and Chairman, Proterra, Inc.:
Oral statement............................................... 14
Prepared statement........................................... 16
Shameek Konar, Chief Executive Officer, Pilot Flying J, on behalf
of the National Association of Truckstop Operators:
Oral statement............................................... 23
Prepared statement........................................... 25
Troy Rudd, Chief Executive Officer, AECOM:
Oral statement............................................... 32
Prepared statement........................................... 34
Rafael Santana, President and Chief Executive Officer, Wabtec
Corporation:
Oral statement............................................... 38
Prepared statement........................................... 40
Frederick W. Smith, Chairman and Chief Executive Officer, FedEx
Corporation:
Oral statement............................................... 45
Prepared statement........................................... 46
Laurie M. Giammona, Senior Vice President for Customer Care,
Pacific Gas and Electric Company:
Oral statement............................................... 50
Prepared statement........................................... 52
Tom Lewis, P.E., J.D., National Business Line Executive for
Climate, Resilience, and Sustainability, WSP USA:
Oral statement............................................... 56
Prepared statement........................................... 58
Charles Hernick, Vice President of Policy and Advocacy, Citizens
for Responsible Energy Solutions:
Oral statement............................................... 67
Prepared statement........................................... 69
SUBMISSIONS FOR THE RECORD
Submissions for the Record by Hon. Peter A. DeFazio:
Statement of Ed Mortimer, Vice President, Transportation and
Infrastructure, U.S. Chamber of Commerce................... 3
Letter of March 17, 2021, from Cathy Bennett, Sr. Vice
President for Public Policy, Greater Kansas City Chamber of
Commerce et al............................................. 134
Statement of the Carnegie Mellon University.................. 135
Letter of February 7, 2021, from Joy Ditto, President & CEO,
American Public Power Association; Tom Kuhn, President,
Edison Electric Institute; and Jim Matheson, CEO, National
Rural Electric Cooperative Association..................... 136
Letter of March 15, 2021, from Joe Britton, Executive
Director, Zero Emission Transportation Association......... 138
Amazon and Global Optimism Co-founded The Climate Pledge..... 139
Submissions for the Record by Hon. Sam Graves of Missouri:
Letter of March 17, 2021, from Sean O'Neill, Senior Vice
President of Government Affairs, Portland Cement
Association................................................ 10
Letter of March 17, 2021, from Dave Schryver, President and
CEO, American Public Gas Association....................... 12
Statement of Nicholas Guida, Chairman and Chief Executive
Officer, Tamarack Aerospace Group Corporation.............. 141
Letter of March 17, 2021, from the National Association of
Convenience Stores and the Society of Independent Gasoline
Marketers of America, Submitted for the Record by Hon. Tim
Burchett....................................................... 22
Submissions for the Record by Hon. Bruce Westerman:
Article entitled, ``Buildings as a Global Carbon Sink,'' by
Alan Organschi and Galina Churkina, Scientist, Potsdam
Institute for Climate Impact Research, Springer Nature
Sustainability Community, February 5, 2020................. 120
Article entitled, ``Buildings as a Global Carbon Sink,'' by
G. Churkina, A. Organschi, C.P.O. Reyer, et al., Nature
Sustainability, Vol. 3, April 2020......................... 123
Submissions for the Record by Hon. Conor Lamb:
Letter of March 17, 2021, from Matt Smith, President, Greater
Pittsburgh Chamber of Commerce............................. 127
Letter of March 16, 2021, from Rich Fitzgerald, County
Executive, Allegheny County, PA............................ 128
Letter of March 22, 2021, from William Peduto, Mayor, City of
Pittsburgh, PA............................................. 145
Letter of March 22, 2021, from Sam Williamson, Board Chair
and Greg Flisram, Executive Director, Urban Redevelopment
Authority of Pittsburgh.................................... 146
Letter of March 29, 2021, from Frederick W. Smith, Chairman of
the Board and Chief Executive Officer, FedEx Corporation,
Submitted for the Record by Hon. Steve Cohen................... 144
APPENDIX
Questions to Jack Allen, Chief Executive Officer and Chairman,
Proterra, Inc., from:
Hon. Peter A. DeFazio........................................ 147
Hon. Julia Brownley.......................................... 148
Hon. Michael Guest........................................... 150
Hon. Scott Perry............................................. 150
Questions to Shameek Konar, Chief Executive Officer, Pilot Flying
J, on behalf of the National Association of Truckstop
Operators, from:
Hon. Peter A. DeFazio........................................ 152
Hon. Michael Guest........................................... 153
Hon. Scott Perry............................................. 154
Questions to Troy Rudd, Chief Executive Officer, AECOM, from:
Hon. Peter A. DeFazio........................................ 155
Hon. Michael Guest........................................... 156
Hon. Scott Perry............................................. 157
Questions to Rafael Santana, President and Chief Executive
Officer, Wabtec Corporation, from:
Hon. Michael Guest........................................... 159
Hon. Scott Perry............................................. 159
Questions to Frederick W. Smith, Chairman and Chief Executive
Officer, FedEx Corporation, from:
Hon. Jared Huffman........................................... 160
Hon. Michael Guest........................................... 161
Hon. Scott Perry............................................. 162
Questions to Laurie M. Giammona, Senior Vice President for
Customer Care, Pacific Gas and Electric Company, from:
Hon. Peter A. DeFazio........................................ 163
Hon. Michael Guest........................................... 164
Hon. Greg Stanton............................................ 165
Hon. Nikema Williams......................................... 165
Hon. Scott Perry............................................. 167
Questions to Tom Lewis, P.E., J.D., National Business Line
Executive for Climate, Resilience, and Sustainability, WSP USA,
from:
Hon. Peter A. DeFazio........................................ 169
Hon. Nikema Williams......................................... 171
Hon. Michael Guest........................................... 172
Hon. Scott Perry............................................. 173
Question to Charles Hernick, Vice President of Policy and
Advocacy, Citizens for Responsible Energy Solutions, from:
Hon. Peter A. DeFazio........................................ 174
Hon. Michael Guest........................................... 174
Hon. Scott Perry............................................. 175
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March 12, 2021
SUMMARY OF SUBJECT MATTER
TO: LMembers, Committee on Transportation and
Infrastructure
FROM: LStaff, Committee on Transportation and
Infrastructure
RE: LFull Committee Hearing on ``The Business Case for
Climate Solutions''
_______________________________________________________________________
PURPOSE
The Committee on Transportation and Infrastructure will
meet on Wednesday, March 17, 2021, at 11:00 a.m. EDT in 2167
Rayburn House Office Building and via Cisco Webex to hold a
hearing titled ``The Business Case for Climate Solutions.'' The
hearing will explore private sector actions to develop and
implement solutions to climate change, with an emphasis on the
surface transportation sector. The Committee will hear
testimony from Proterra, Inc; Pacific Gas and Electric Company
(PG&E); Pilot Flying J; WSP USA; AECOM; Wabtec Corporation;
FedEx Corporation; and Citizens for Responsible Energy
Solutions (CRES).
BACKGROUND
CLIMATE CHANGE AND THE TRANSPORTATION SECTOR
Global use of carbon has resulted in corresponding
greenhouse gas emissions (GHGs), which is the dominant cause of
climate change.\1\ According to the Environmental Protection
Agency (EPA), the transportation sector is the largest source
of U.S. GHGs, at 28 percent of U.S. emissions.\2\ Electric
power and industry (iron, steel, chemical, and cement
production) follow with 27 percent and 22 percent of emissions,
respectively.\3\ Within the transportation sector, light-duty
vehicles and medium- and heavy-duty trucks account for 82
percent of those emissions, with aircraft accounting for 9
percent, rail accounting for 2 percent, ships and boats
accounting for 2 percent and other forms of transportation--
including buses and motorcycles--making up the remainder.\4\
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\1\ National Aeronautics and Space Administration. ``The Causes of
Climate Change.'' Accessed March 8, 2021.
\2\ EPA. ``Fast Facts on Transportation Greenhouse Gas Emissions,''
https://www.epa.gov/greenvehicles/fast-facts-transportation-greenhouse-
gas-emissions. Accessed March 5, 2021.
\3\ Id.
\4\ Id.
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The U.S. transportation sector has been the largest
consumer of petroleum products since at least 1949, the first
year for which the Energy Information Administration has
data.\5\ In 2018, the U.S. transportation sector consumed
approximately 14 million barrels per day of petroleum
products,\6\ out of a total of 20.5 million barrels per day
consumed in all sectors domestically.\7\
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\5\ Energy Information Administration. ``In the United States, most
petroleum is consumed in transportation,'' https://www.eia.gov/
todayinenergy/detail.php?id=40752. Accessed March 5, 2021.
\6\ Id.
\7\ Id.; see also Energy Information Administration. ``Petroleum
and other liquids,'' https://www.eia.gov/petroleum/. Accessed March 5,
2021.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: EPA, https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P100ZK4P.pdf
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: Energy Information Administration https://www.eia.gov/
todayinenergy/detail.php?id=40752.
The impacts of climate change can pose risks to our
infrastructure, the economy, and communities nationwide. At the
same time, transitioning to a more sustainable surface
transportation system may bring the opportunity for new
domestic jobs and a more competitive position in the global
economy.\8\
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\8\ E2. Clean Jobs America 2020. https://e2.org/wp-content/uploads/
2020/04/E2-Clean-Jobs-America-2020.pdf. Accessed March 11, 2021.
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CLIMATE CHANGE MITIGATION AND RESILIENCE
As of 2019, the U.S. was leading the world in energy-
related emissions reduction due to the expanding role of
renewable energy sources and switching from coal to natural
gas.\9\ The COVID-19 pandemic led to a further drop in
emissions, estimated at 7 percent in 2020.\10\ U.S. GHG
emissions are now below 1990 levels.\11\
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\9\ IEA. ``Global CO2 Emissions in 2019.'' https://www.iea.org/
articles/global-co2-emissions-in-2019. Accessed March 9, 2021.
\10\ Global Carbon Project: Coronavirus causes `record fall' in
fossil-fuel emissions in 2020. https://www.carbonbrief.org/global-
carbon-project-coronavirus-causes-record-fall-in-fossil-fuel-
emissions-in-2020.
\11\ Rhodium Group. ``Preliminary US Greenhouse Gas Emissions
Estimates for 2020.'' https://rhg.com/research/preliminary-us-
emissions-2020/. Accessed March 9, 2021.
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However, between 1990 and 2018, GHG emissions in the
transportation sector increased 24 percent, more than any other
sector.\12\ According to EPA, the increase is driven by
increased demand for travel with vehicle miles traveled by
light-duty motor vehicles increasing by 46.1 percent.\13\ EPA
attributes this increase to a confluence of factors including
population growth, economic growth, urban sprawl, and periods
of low fuel prices.\14\ Without changes in carbon use,
emissions will likely rise in tandem with increased economic
activity as the U.S. recovers from the COVID-19 pandemic.\15\
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\12\ EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks.
https://www.epa.gov/sites/production/files/2020-04/documents/us-ghg-
inventory-2020-chapter-executive-summary.pdf. Accessed March 10, 2021.
\13\ Id.
\14\ Id.
\15\ Rhodium Group. ``Preliminary US Greenhouse Gas Emissions
Estimates for 2020.'' https://rhg.com/research/preliminary-us-
emissions-2020/. Accessed March 11, 2021.
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Total carbon emissions have declined by nearly 11 percent
since 2010.\16\ Energy innovations have allowed the U.S. to
decrease dependence on foreign energy with more net exports
than imports since 2019.\17\ As a result, public and private
sector entities have a range of options by which to reduce the
emissions generated by the transportation sector and to improve
the resilience of the sector against the already-occurring
impacts of climate change.
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\16\ IEA. ``CO2 Emissions by Energy Source, United States 1990-
2018.'' https://www.iea.org/countries/united-states. Accessed March 9,
2021.
\17\ IEA. ``Net Energy Imports, United States 1990-2019.'' https://
www.iea.org/countries/united-states. Accessed March 9, 2021.
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Mitigation of transportation related GHGs may be achieved
through a variety of means. These can include: conversion of
individual vehicles and fleets of vehicles to low- and zero-
emission forms of power; provision of alternative charging and
fueling infrastructure; provision of low- and zero-emission
forms of transportation including transit, rail, walking, and
biking; increased fuel economy standards that reduce the use of
fossil fuels and associated operating costs for vehicle users;
\18\ improved operational practices to reduce idling and
traffic congestion; shifting freight and passenger movements to
more efficient modes; and innovations within the construction
sector to reduce or trap emissions produced throughout the
lifecycle of transportation projects. These types of
interventions have the ability to reduce the transportation
sector's GHGs.\19\
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\18\ Consumer Reports. ``Electric Vehicle Ownership Costs: Today's
Electric Vehicles Offer Big Savings for Consumers.'' 2020. https://
advocacy.consumerreports.org/wp-content/uploads/2020/10/
EV-Ownership-Cost-Final-Report-1.pdf. Accessed March 8, 2021.
\19\ EPA. ``Sources of Greenhouse Gas Emissions: Transportation
Sector Emissions.'' https://www.epa.gov/ghgemissions/sources-
greenhouse-gas-emissions. Accessed March 10, 2020.
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Because air pollution and greenhouse gases are often
released from the same sources, reducing GHGs in an effort to
slow climate change also reduces air pollutants, such as fine
particulate matter (PM2.5).\20\ Reducing these co-emitted air
pollutants improves air quality and benefits human health.\21\
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\20\ West, J., Smith, S., Silva, R. et al. ``Co-benefits of
mitigating global greenhouse gas emissions for future air quality and
human health.'' Nature Climate Change 3, 885-889 (2013). https://
www.niehs.nih.gov/research/programs/geh/geh_newsletter/2013/12/
spotlight/reducing_
greenhouse_gas_emissions_can_improve_air_quality_and_save_lives_.cfm#: :
text=
Because%20air%20pollution%20and%20greenhouse,quality%20and%20benefits%20
human
%20health. Accessed March 8, 2021.
\21\ Id.
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Resiliency, or strengthening the ability to anticipate,
withstand, and recover from natural disasters and extreme
weather, is also a central element of the U.S. response to the
ongoing impacts of climate change. Resilient infrastructure
pays off by saving at least $2 on average for every $1
spent.\22\ Options to improve the resilience of the
transportation system include: assessing vulnerability and
identifying critical infrastructure; raising roadways and
improving drainage; upgrading evacuation routes; relocating
assets to higher ground or less flood-prone areas; using
natural infrastructure to provide protection against extreme
weather; stabilizing or strengthening facilities to protect
against erosion and landslides; seeking distributed sources of
power to maintain transportation services in the event of a
disruption to the grid; and diversifying transportation options
to ensure continuity of service following a natural
disaster.\23\
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\22\ Engineering News-Record. ``Resilient Infrastructure Could Save
$4.2 Trillion.'' https://www.enr.com/articles/47135-resilient-
infrastructure-could-save-42-trillion. Accessed March 9, 2021.
\23\ Federal Highway Administration. ``Vulnerability Assessment and
Adaption Framework, 3rd Ed.'' (2017) https://www.fhwa.dot.gov/
environment/sustainability/resilience/adaptation_
framework/chap00.cfm. Accessed March 10, 2021; Federal Highway
Administration. ``Synthesis of Approaches for Addressing Resilience in
Project Development.'' (2017).
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PRIVATE SECTOR ACTIONS TO ADDRESS CLIMATE CHANGE
A growing number of corporations have set targets to reduce
GHGs, and goals to achieve carbon neutrality by a certain date,
some as early as 2030.\24\ In the United States, 209 companies
have joined the Science-Based Targets Initiative to set and
disclose targets.\25\ Worldwide, more than 1,200 companies have
taken such action.\26\ These voluntary actions by corporations
demonstrate businesses' steps in reducing emissions.
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\24\ In January 2020, Microsoft announced it would be carbon
negative by 2030. https://news.microsoft.com/climate/#january-carbon-
announcement. Accessed March 7, 2021.
\25\ Science-Based Targets. ``Companies Taking Action.'' https://
sciencebasedtargets.org/companies-taking-action. Accessed March 7,
2021.
\26\ Id.
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Many corporations are formally calling for public policy
solutions, in addition to setting their own targets, to achieve
a higher scale of emissions reductions. On January 20, 2021,
the U.S. re-started the process to join to the Paris Agreement
and on February 19, 2021, officially rejoined.\27\ Under the
agreement, the U.S. promises to reduce its emissions by about
25 percent from 2005 levels by 2025.\28\ The U.S. was already
on track to reduce emissions by about 17 percent.\29\ Broader
policy changes and innovations may help achieve the emissions
reductions necessary for the U.S. to meet its commitments under
the Paris agreement.
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\27\ Press Release, U.S. State Department, The United States
Officially Rejoins the Paris Agreement, Feb. 19, 2021, available at
https://www.state.gov/the-united-states-officially-rejoins-the-paris-
agreement/; The Paris Agreement is a multi-lateral treaty, negotiated
in 2015, in which developed countries commit to making the individual
GHG reduction, contributions necessary to halt the overall rate of
temperature increase. See: https://unfccc.int/process-andmeetings/the-
paris-agreement/the-paris-agreement; https://www.aar.org/wp-content/
uploads/2021/02/AAR
Climate-Change-Report.pdf.
\28\ OBP. ``U.S. Officially Rejoins Paris Agreement on Climate
Change.'' Feb. 19, 2021. https://www.opb.org/article/2021/02/19/u-s-
officially-rejoins-paris-agreement-on-climate-change/.
\29\ Id.
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The CEO Climate Dialogue, which includes 22 major U.S.
corporations among its members, states in its guiding
principles: ``It is urgent that the President and Congress put
in place a long-term federal policy as soon as possible to
protect against the worst impacts of climate change.'' \30\ In
December 2020, 47 leading U.S. companies issued a statement
letter urging ``President-elect Joe Biden and the new Congress
to work together to enact ambitious, durable, and bipartisan
climate solutions.'' \31\
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\30\ CEO Climate Dialogue. ``Guiding Principles for Federal Action
on Climate.'' https://www.ceoclimatedialogue.org/guiding-principles.
Accessed March 7, 2021.
\31\ Center for Climate and Energy Solution. ``Top Companies Call
for Ambitious U.S. Climate Policy.'' https://www.c2es.org/content/top-
companies-call-for-ambitious-us-climate-policy/. Accessed March 7,
2021.
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The U.S. Chamber of Commerce updated its position on
climate change in January 2021 to include support for ``a
market-based approach to accelerate GHG emissions reductions
across the U.S. economy.'' \32\ In September 2020, the Business
Roundtable issued new principles on climate change, calling for
market-based solutions and a ``complementary suite of policies
to drive innovation, significantly reduce greenhouse gas
emissions and limit global temperature rise.'' \33\ On March 1,
2021, the Association of American Railroads (AAR) released a
report stating ``the rail industry recognize(s) that the
climate is changing. If action is not taken, climate change
will have significant repercussions for the planet, our
economies, our society, and even day-to-day railroad
operations.'' \34\
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\32\ U.S. Chamber of Commerce. ``Our Approach to Climate Change.''
https://www.uschamber.com/climate-change-position. Accessed March 7,
2021.
\33\ Business Roundtable. ``Addressing Climate Change.'' https://
www.businessroundtable.org/climate. Accessed March 7, 2021.
\34\ American Assn. of Railroads. ``Freight Railroads & Climate
Change.'' https://www.aar.org/wp-content/uploads/2021/02/AAR-Climate-
Change-Report.pdf. Accessed March 7, 2021.
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CLIMATE-RELATED TRANSPORTATION LEGISLATION FROM THE 116TH CONGRESS
H.R. 2, THE MOVING FORWARD ACT
On July 1, 2020, the House of Representatives passed with a
bipartisan vote of 233-188 the Majority's H.R. 2, the Moving
Forward Act, which included a surface transportation
reauthorization proposal titled the Investing in a New Vision
for the Environment and Surface Transportation in America
(INVEST in America) Act. The INVEST in America Act proposed
several provisions related to climate change mitigation and
resilience. The bill proposed investments in:
LA new carbon pollution reduction apportionment
program to fund highway, transit, and rail projects that would
reduce greenhouse gases.\35\
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\35\ Division B, title I, section 1213.
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LA new resilience-focused pre-disaster mitigation
program to help States prepare for and reduce the impacts of
climate change and extreme weather.\36\
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\36\ Division B, title I, section 1202.
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LTransit, rail, pedestrian, and bicycle funding to
provide more transportation options.\37\
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\37\ Divisions B and D.
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LAlternative charging and fueling infrastructure
to support Americans in shifting to lower-emission
vehicles.\38\
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\38\ Division B, title I, section 1303.
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LA locally-driven climate discretionary grant
program, allowing communities to advance innovative solutions
to reducing carbon pollution.\39\
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\39\ Division B, title I, section 1302.
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LDeployment of technologies that would reduce
greenhouse gas emissions from the surface transportation
system.\40\
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\40\ Divisions B and D.
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LLower-emission multimodal freight projects.\41\
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\41\ See, e.g., division B, title I, section 1212.
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LZero-emission buses to reduce greenhouse gases
and other air pollutants.\42\
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\42\ Division B, title II, sections 2101 and 2403.
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LA new sustainable highway materials research,
development, and deployment program to reduce or sequester
greenhouse gases generated during production and
construction.\43\
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\43\ Division B, title I, section 5302.
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LA new gridlock reduction program focused on
operational improvements, travel demand management, and multi-
modal solutions to traffic congestion.\44\
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\44\ Division B, title I, section 1306.
The bill also proposed policy changes to support climate
change mitigation and resilience by:
LClarifying that the Federal Highway
Administration's (FHWA) Emergency Relief Program may be used
for resilience betterments.\45\
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\45\ Division B, title I, section 1203.
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LReforming the largest highway construction
program to ensure that States also consider operational
improvements and transit when proposing additional highway
capacity.\46\
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\46\ Division B, title I, section 1201.
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LEstablishing a new greenhouse gas performance
measure to track States' progress in reducing carbon pollution
from our highway system.\47\
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\47\ Division B, title I, section 1403.
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LCreating new incentives for transit-oriented
development to provide more Americans access to walkable and
transit-supportive communities.\48\
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\48\ Division B, title II, subtitle G.
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LEnsuring consideration of climate mitigation and
resilience through the planning process to encourage
sustainable building for the future.\49\
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\49\ Division B, title I, sections 1202, 1401, and 1402.
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LModifying federal design standards to support
context-sensitive street design and support the use of low- and
zero-emission modes.\50\
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\50\ Division B, title I, section 1107.
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LRequiring a National Academies of Science
assessment of the potential impacts of climate change on the
national rail network.\51\
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\51\ Division D, title I, section 9106.
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LSpurring Amtrak to improve passenger rail service
to encourage a shift towards passenger rail which produces less
greenhouse gas emissions.\52\
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\52\ Division D, title II.
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H.R. 7248, THE STARTER ACT
On June 18, 2020, Ranking Member Sam Graves introduced H.R.
7248, the Surface Transportation Advanced through Reform,
Technology, and Efficient Review (STARTER) Act, a five-year
surface transportation reauthorization bill.
The bill proposed policy changes to support climate change
mitigation and resiliency by:
LEstablishing the Promoting Resilient Operations
for Transformative, Efficient, and Cost-saving Transportation
(PROTECT) grant program to fund highway projects that reduce
the cost and risk related to natural disasters (Sec. 7001).
LModifying the purpose of the National Highway
Performance Program (NHPP) to incorporate resiliency measures
to diminish the impacts of natural disasters (Sec. 7002).
LAllowing States to use up to 15 percent of NHPP
funds for protective features to improve the resiliency of a
Federal-aid highway or bridge off the National Highway System
(Sec. 7002).
LEstablishing that funding under the Federal
Transit Administration's (FTA) Emergency Relief Program for
mitigation activities will support projects that are cost
beneficial and will reduce actual risk (Sec. 7003).
LClarifying that FHWA's Emergency Relief Program
may be used for projects related to wildfires and sea level
rise (Sec. 7004).
LPermitting funding under the FHWA's Emergency
Relief Program to be used for mitigation projects that are
demonstrated to mitigate against and reduce the risk of
recurring damage from extreme weather events, flood, and other
disasters (Sec. 7004).
LAuthorizing an increase in the Federal cost share
in highway funding for activities that are designed and
demonstrated to reduce cost and risk associated with extreme
weather (Sec. 7005).
LExtending University Transportation Centers'
research focus to mitigation and resiliency (Sec. 7009).
LEstablishing a five-year pre-disaster mitigation
pilot program under the FHWA with funding to support projects
that substantially reduce the risk of or increase the
resilience to future damage from weather events (Sec. 7010).
This Congress the Committee will continue work on a surface
transportation reauthorization ahead of the expiration of the
current surface transportation programs on September 30, 2021.
WITNESS LIST
LMr. Jack Allen, Chief Executive Officer,
Proterra, Inc.
LMs. Laurie Giammona, Senior Vice President for
Customer Care, Pacific Gas and Electric Corporation
LMr. Charles Hernick, Vice President of Policy and
Advocacy, Citizens for Responsible Energy Solutions
LMr. Shameek Konar, Chief Executive Officer, Pilot
Flying J, on behalf of the National Association of Truckstop
Operators
LMr. Tom Lewis, National Business Line Executive
for Climate, Resilience, and Sustainability, WSP USA
LMr. Troy Rudd, Chief Executive Officer, AECOM
LMr. Rafael Santana, President and Chief Executive
Officer, Wabtec Corporation
LMr. Frederick W. Smith, Chairman and Chief
Executive Officer, FedEx Corporation
THE BUSINESS CASE FOR CLIMATE SOLUTIONS
----------
WEDNESDAY, MARCH 17, 2021
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The committee met, pursuant to call, at 11:03 a.m., in 2167
Rayburn House Office Building and via Cisco Webex, Hon. Peter
A. DeFazio (Chair of the committee) presiding.
Present in person: Mr. DeFazio, Mr. Larsen, Mr. Cohen, Mr.
Carbajal, Mr. Stanton, Ms. Newman, Mr. Graves of Missouri, Mr.
Crawford, Mr. Webster, Mr. Massie, Mr. Perry, Mr. Rodney Davis,
Dr. Babin, Mr. Graves of Louisiana, Mr. Rouzer, Mr. Bost, Mr.
Westerman, Mr. Mast, Mr. Stauber, Mr. Burchett, Mr. Guest, Mr.
Nehls, Ms. Mace, and Mrs. Steel.
Present remotely: Ms. Norton, Mrs. Napolitano, Mr. Sires,
Mr. Johnson of Georgia, Ms. Titus, Mr. Huffman, Ms. Brownley,
Mr. Payne, Mr. Lowenthal, Mr. DeSaulnier, Mr. Malinowski, Ms.
Davids, Mr. Garcia of Illinois, Mr. Delgado, Mr. Pappas, Mr.
Lamb, Mr. Auchincloss, Ms. Bourdeaux, Ms. Strickland, Ms.
Williams of Georgia, Mr. Gibbs, Mr. LaMalfa, Mr. Fitzpatrick,
Mr. Johnson of South Dakota, Mr. Van Drew, and Ms. Van Duyne.
Mr. DeFazio. The hearing of the Committee on Transportation
and Infrastructure will come to order.
I ask unanimous consent that the chair be authorized to
declare a recess at any time during today's hearing.
Without objection, so ordered.
For Members participating remotely, if Members experience
any connectivity issues--do I really have to keep reading this
stuff? Do people not know this? It has been shortened. Good.
For Members experiencing connectivity issues or other
technical problems, please inform the committee staff as soon
as possible so you can receive assistance.
As chair of today's hearing, I will make a good-faith
effort to provide every Member experiencing connectivity issues
an opportunity to participate fully in the proceedings. It is
the responsibility of each Member seeking recognition to unmute
their microphone prior to speaking. Keep the microphone on mute
when not speaking and avoid inadvertent background noise.
Should I hear any inadvertent background noise, I will yell
at you. And finally, to insert a document into the record,
please have your staff email it to [email protected].
Wow, you did shorten it. That is good. Thank you.
So today's hearing is an important step on the path to a
more sustainable transportation future. The depth of interest
in this hearing which resulted in eight witnesses today
demonstrates the willingness and readiness of corporate America
to be active partners in solving the monumental challenges we
face regarding infrastructure and climate change.
As we will hear today, both private-sector action and sound
public policy are necessary to meaningfully address climate
change. This is not about whether we need either private
voluntary reductions or Government measures. We need both.
We will need commitment at all levels of Government and
from the private sector to achieve significant reduction in
carbon pollution in the transportation sector, to transition to
large-scale decarbonization, and to invest in the
infrastructure upgrades to make our assets and facilities
resilient to extreme weather events and sea level rise.
Failure to protect assets and invest in emission reductions
will have real financial consequences for business and
transportation agencies both now and in the long run.
So we will hear those messages loud and clear today. In
2021, we have thankfully moved beyond the polarizing discussion
of whether we need to act, which has stalled progress on an
existential threat to our planet and our citizens for far too
long.
If any are here today to make that argument, I urge you to
review the prepared remarks of our panel. Every one of the
business leaders here today can affirm the denial of this
reality is a bad business decision.
But these decisions are about more than just the bottom
line. We will hear from our panel today that the transportation
sector, in particular, holds tremendous promise for new norms
that will move the needle on climate change.
To quote from Mr. Smith's written testimony, ``we believe
that a connected world is a better world . . . and we recognize
that with the privilege of connecting the world also comes the
responsibility of being good stewards of the planet.''
While some sectors have begun to move in the right
direction on climate, the same is not true in the majority of
the transportation sector, which is the largest contributor of
greenhouse gas emissions in the United States.
Over the last three decades, those emissions have risen 24
percent, more than any other sector. Passenger and freight
vehicles account for 82 percent of transportation sector
emissions, which is why so much of this hearing will focus on
surface transportation policy. The contribution to the carbon
pollution problem from the way we currently move people and
goods is clear.
The available solutions are equally plentiful and
promising. Conversion of personal vehicles, transit buses,
trucks, and locomotives to low- and zero-emission forms of
power and providing alternative charging and fueling
infrastructure is a rapidly expanding area that several
witnesses will discuss today. Support of this transition
through robust Federal investment was a key element of the bill
this committee approved in the last Congress as part of H.R. 2.
Boosting investment in low- and zero-emission, and more
efficient modes of transportation, including transit, freight
and passenger rail, walking, and biking, is an equally
important mitigation strategy, and we have several witnesses
who actively work on projects to expand mode choice.
H.R. 2 substantially increased investment in each of these
modes while enhancing the safety of these options.
Improved operational practices to reduce idling and traffic
congestion will also help make better use of the infrastructure
we have. That is the smart use of our infrastructure where we
get more throughput without having to add lane-miles.
And innovation within the construction sector to reduce or
trap emissions produced through the life cycle of
transportation projects holds significant promise. H.R. 2
focuses heavily on the development and implementation of these
technologies and practices.
Each of these ideas taken together can add up to a
substantial difference in mitigating the effects of climate
change. Yet we know that we need to adapt. It is very real
right now.
Strengthening the ability to anticipate, withstand, and
recover from natural disasters and extreme weather is a major
portion of the U.S. response to the ongoing impacts of climate
change.
We will hear case examples from witnesses today about how
these investments are no longer optional but a necessity, and
that this reality is impacting the way we build and rebuild
transportation assets.
Climate is changing rapidly. Time is not on our side. This
committee intends to take bold steps again this Congress to
support significant emissions reductions from the
transportation sector, and support for action among the
business community is growing.
The U.S. Chamber of Commerce recently issued updated policy
that states, ``durable climate policy must be made by
Congress.''
At this time, I will insert into the record a statement
from the U.S. Chamber of Commerce, submitted for this hearing
in support of addressing climate change.
Without objection, so ordered.
[The information follows:]
Statement of Ed Mortimer, Vice President, Transportation and
Infrastructure, U.S. Chamber of Commerce, Submitted for the Record by
Hon. Peter A. DeFazio
The U.S. Chamber of Commerce (the Chamber) is the world's largest
business federation representing the interests of more than 3 million
businesses of all sizes, sectors, and regions, as well as state and
local chambers and industry associations. The Chamber is dedicated to
promoting, protecting, and defending America's free enterprise system.
More than 96% of Chamber member companies have fewer than 100
employees, and many of the nation's largest companies are also active
members. We are therefore cognizant not only of the challenges facing
smaller businesses, but also those facing the business community at
large.
Besides representing a cross-section of the American business
community with respect to the number of employees, major
classifications of American business--e.g., manufacturing, retailing,
services, construction, wholesalers, and finance--are represented; the
Chamber has membership in all 50 states.
The Chamber's international reach is substantial as well. We
believe that global interdependence provides opportunities, not
threats. In addition to the American Chambers of Commerce abroad, an
increasing number of our members engage in the export and import of
both goods and services and have ongoing investment activities. The
Chamber favors strengthened international competitiveness and opposes
artificial U.S. and foreign barriers to international business.
Introduction
Chairman DeFazio, Ranking Member Graves, and members of the
Committee, thank you for the opportunity to provide this statement for
the record concerning the urgent need for bipartisan congressional
action to modernize America's infrastructure that can bring innovation
and technology to address climate issues. My name is Ed Mortimer and I
serve as the Vice President of Transportation and Infrastructure at the
U.S. Chamber of Commerce.
Need for Action
The Chamber has been a long-time advocate for modernizing America's
infrastructure. A central component of that modernization should be
policies designed to advance a cleaner, stronger transportation
system--not just the roads, bridges, and transit systems that are the
foundation of America's infrastructure, but the enabling systems that
are necessary to modernize transportation in America.
The most recent Infrastructure Report Card from the American
Society of Civil Engineers highlights the lack of infrastructure
investment and the need to not just fix existing infrastructure but to
modernize the aging network using the latest private sector ingenuity
to build infrastructure that is durable and resilient to changing
climate conditions.
The Chamber believes that effectively addressing climate change
will require citizens, government, and business to work together. The
American business community is central to this effort, not only through
its leadership in developing and investing in innovative solutions and
deploying low-carbon technologies, but also as a partner in the
development of sound policies to guide this transition.
The Chamber has outlined a set of principles (attached) that shapes
our advocacy and policy development as we engage with policymakers at
both ends of Pennsylvania Avenue. This includes leveraging the power of
business, maintaining U.S. leadership in climate science, embracing
technology and innovation, aggressively pursuing energy efficiency,
promoting resilient climate infrastructure, supporting trade in U.S.
technologies and products, and encouraging international cooperation.
Our principles also reflect the overall consensus of the Chamber's
membership that Congress should pursue market-based solutions to
accelerate emissions reductions, and that the Chamber will continue its
engagement to pursue meaningful, achievable progress to address the
challenge of climate change.
Overall, our message remains clear: inaction is not an option.
Two areas the Chamber believes can bring bipartisan support as this
Committee formulates a surface transportation bill include increased
investment in electric vehicle (EV) charging stations and promoting the
design and construction of modern, resilient infrastructure.
Incentives to Promote Building Alternative Vehicle Infrastructure
As this Committee looks to formulate policy to modernize the
nation's infrastructure, providing flexibility and investment
opportunities for state and local governments to make investments in
electric charging stations are a good start.
The private sector continues its efforts to diversify the energy
sources of new vehicles entering the fleet over the next 20 years.
Several automakers and trucking industry companies have publicly stated
their intent, without government mandate, to move toward lower emission
vehicles. Building upon these efforts to encourage more private sector
actions is an area many Democrats and Republicans support.
With many automakers expressing their intent to significantly
increase production of electric vehicles and other alternatives, any
infrastructure bill should include adequate investments to allow states
flexibility to make such investments as we look to modernize the
network.
To build on strong bipartisan support for the concept that users of
our infrastructure must help fund the roads, bridges and transit they
depend on, we must also ensure that electric and other alternative fuel
vehicles contribute to this critical investment.
More than 30 states have instituted an EV fee that approximates
their use of the surface transportation network, and we believe such an
approach must be included in any federal legislation. Ensuring EVs and
other alternative fuel vehicles invest in a modern transportation
network will broaden support for this important effort from Congress
and the stakeholder community.
Building Modern, Resilient Infrastructure
The Chamber believes there is broad agreement on both sides of the
aisle and among experts across our nation that advancing resilience is
a win-win for the environment and the economy, in particular to
responding to climate risks to companies and communities.
The U.S. Chamber supports building modern, resilient
infrastructure, and pre-disaster mitigation promotes projects that
harden infrastructure to prepare, in advance, for future crises.
An example of what bipartisan solutions can be made includes
enactment of the Safeguarding Tomorrow through Ongoing Risk Mitigation
Act (STORM) of 2020. We were pleased to work with the American Society
of Civil Engineers, the Mississippi River Cities and Towns Initiative,
and other stakeholders on this important legislation that will
capitalize state revolving loan funds that provide low-interest loans
for pre-disaster mitigation. We appreciate Congress' thoughtful
leadership in passing this legislation.
Enactment of this important legislation is just one tool among many
that are needed. More must be done.
The U.S. Chamber has outlined our resilience policy principles
(attached). Below are a few practical suggestions we believe could
advance smart, bipartisan policy reforms:
Elevate resilience as a national priority by establishing
a chief resilience officer reporting directly to the President and
developing a national resilience strategy, leveraging current
interagency coordination under the Federal Emergency Management Agency
(FEMA).
Urge FEMA to provide the full 6% funding for the Building
Resilient Infrastructure and Communities program.
Set aside a small portion of infrastructure funding to
create a resilience pre-development fund to assist small disadvantaged
communities in the planning and preparing for pre-disaster mitigation
projects.
Broaden the focus on pre-disaster mitigation as the
infrastructure debate proceeds across the federal family of agencies
and programs (e.g., highway and Community Development Block Grant
programs).
Encourage coordination among relevant federal and state
agencies to align actions, avoid duplication, and optimize resources.
Convene state lifeline infrastructure leaders to share
experiences across program areas and identify federal policy
implementation and funding needs.
Incentivize and institutionalize resilience by providing
additional funding, technical assistance, and other benefits to states
and communities that are most active in implementing pre-disaster
mitigation, such as green infrastructure and other nature-based
solutions.
Pilot small business planning grants to catalyze
strategic, contingency planning among small businesses ahead of the
next disaster that may reduce possible future losses and improve
resilience.
Ensure that projects reduce risks and are cost effective
by funding actions where the benefits outweigh the costs.
Chamber Works to Broaden Stakeholder Support for Action
To build upon our efforts to promote infrastructure modernization,
the U.S. Chamber of Commerce announced in January with the Bipartisan
Policy Center an important new campaign--``Build by the Fourth of
July,'' (BB4J) which, as the name implies, calls on Congress to pass
comprehensive infrastructure legislation into law by July 4, 2021. This
effort includes more than 300 organizations, including major voices
from business, labor, and environmental groups. While these
organizations will not agree on every issue, we hope that this unified
message will provide critical momentum to finally pass a historic
infrastructure bill that the country sorely needs.
In our view, a successful ``BB4J'' effort must be comprehensive,
addressing not only crumbling roads, bridges, and transit, but many
other components of U.S. infrastructure, and do so in a manner that
stimulates our economic recovery, improves federal project approvals,
and accelerates environmental progress of recent decades. As the pledge
states, ``As a nation we must be able to build big things promptly to
accelerate the economic recovery and build the resilient low-carbon
economy of the future. We need a durable commitment and clear
strategy.''
Our coalition recently sent a letter to every member of Congress
(attached) urging their support for these priorities.
Conclusion
The time to make important infrastructure investments that address
climate is NOW. Delaying action only makes the decisions more difficult
and projects more costly. From the business community's perspective,
the question is not if we need to make these decisions, but when.
Infrastructure investment has traditionally enjoyed broad
bipartisan support, and we believe the Administration, House, and
Senate must act to address the critical needs of a system that was
built 60-150 years ago. We must plan to provide every American a 21st
Century infrastructure system that addresses climate issues and
provides multimodal mobility solutions. This critical effort starts
with a timely surface transportation authorization.
The Chamber has also provided lawmakers with a variety of funding
and financing options to pay for infrastructure improvements. For
surface transportation, we continue to believe adjusting the federal
motor fuel tax, then transitioning to a vehicle miles traveled
mechanism must be considered.
Bottom line, we believe there is much common ground on which all
sides of this discussion could come together to address the important
climate issues the Committee is discussing today with policies that are
practical, flexible, predictable, and durable. As this debate evolves
with Congress and the Administration, we pledge to work constructively
with this committee to engage on and evaluate specific policy
approaches. Thank you for considering our views.
attachments:
https://www.uschamber.com/climate-change-position
https://www.uschamber.com/series/above-the-fold/resilience-good-public-
policy#:
:text=According%20to%20a%20Metlife%20and,the%20environment%20and%20the
%20economy.
Mr. DeFazio. I thank each of our witnesses for being here
today and persevering through what I know may be a long
hearing. I know your time is valuable. The committee is
grateful for your participation, and the time we invest in
discussion today is nothing compared to the time we stand to
preserve if we get this right.
[Mr. DeFazio's prepared statement follows:]
Prepared Statement of Hon. Peter A. DeFazio, a Representative in
Congress from the State of Oregon, and Chair, Committee on
Transportation and Infrastructure
Today's hearing marks an important step on the path to a more
sustainable transportation future. The depth of interest in this
hearing--which resulted in eight witnesses today--demonstrates the
willingness and the readiness of corporate America to be active
partners in solving the monumental challenge we face.
As we will hear today, both private sector action and sound public
policy are necessary to meaningfully address climate change. This is
not about whether we need either private voluntary reductions or
government measures. This is an all-hands-on-deck situation.
We will need commitment at all levels of government, and from the
private sector, to achieve significant reductions in carbon pollution
in the transportation sector, to transition to large-scale
decarbonization, and to invest in the infrastructure upgrades to make
our assets and facilities resilient to extreme weather events. Failure
to protect assets and to invest in emissions reductions will have real
financial consequences to businesses and transportation agencies both
now and in the long run. And we will hear these messages loud and clear
today.
In 2021, we have thankfully moved beyond the polarizing discussion
of whether we need to act, which has stalled progress on an existential
threat to our planet and our citizens for far too long. If any of my
colleagues are here today to take that line of argument, I urge you to
review the prepared remarks of our panel. Every one of the business
leaders here today can affirm that denial of reality is a bad business
decision.
But these decisions are about more than just the bottom line. We
will hear from our panel today that the transportation sector in
particular holds tremendous promise for new norms that will move the
needle on climate change. To quote from Mr. Smith's written testimony:
``We believe that a connected world is a better world . . . and we
recognize that with the privilege of connecting the world also comes
the responsibility of being good stewards of the planet.''
While some sectors have begun to move in the right direction on
climate, the same is not true of the transportation sector, which is
the largest contributor to greenhouse gas (GHG) emissions in the United
States. Over the last three decades, those emissions have risen 24
percent, more than any other sector. Passenger and freight vehicles
account for 82 percent of transportation sector emissions, which is why
much of this hearing will focus on surface transportation policy. The
contribution to the carbon pollution problem from the way we currently
move people and goods is clear.
The available solutions in the transportation sector are equally
plentiful and promising. Conversion of personal vehicles, transit
buses, trucks, and locomotives to low- and zero-emission forms of power
and providing alternative charging and fueling infrastructure is a
rapidly expanding area that several witnesses will discuss today.
Support of this transition through robust Federal investment was a key
element of the bill this Committee approved last Congress, H.R. 2.
Boosting investment in low- and zero-emission, and more efficient,
modes of transportation including transit, freight and passenger rail,
walking, and biking is an equally important mitigation strategy, and we
have several witnesses who actively work on projects to expand mode
choice. H.R. 2 substantially increased investment in each of these
modes, while enhancing the safety of these options.
Improved operational practices to reduce idling and traffic
congestion will also help make better use of the infrastructure we
have. And innovation within the construction sector to reduce or trap
emissions produced throughout the lifecycle of transportation projects
holds significant promise. H.R. 2 focuses heavily on the development
and implementation of these technologies and practices.
Each of these ideas, taken together, can add up to a substantial
difference in mitigating the effects of climate change. Yet we know
that the need to adapt is very real, right now. Strengthening the
ability to anticipate, withstand, and recover from natural disasters
and extreme weather is a major portion of the U.S. response to the
ongoing impacts of climate change. We will hear case examples from
witnesses today about how these investments are no longer optional, but
a necessity, and that this reality is impacting the way we build and
rebuild transportation assets.
The climate is changing rapidly. Time is not on our side. This
Committee intends to take bold steps again this Congress to support
significant emissions reductions from the transportation sector. And
support for action among the business community is growing. The U.S.
Chamber of Commerce recently issued updated policy that states
``durable climate policy must be made by Congress.'' At this time, I'll
insert into the record a letter from Chamber President Suzanne Clark
submitted for this hearing in support of addressing climate change.
Without objection, so ordered.
Thank you to each of our witnesses for being here today and
persevering through what may be a long hearing. I know your time is
valuable and this Committee is grateful for your participation. The
time we invest in the discussion today, however, is nothing compared to
the time on earth we stand to preserve if we get this right.
Mr. DeFazio. So, again, thanks to all, and I will note that
Mr. Smith has noted that he can only be here for 2 hours. I
hope that the other witnesses can stay. I expect we may go a
little bit longer than that.
With that I yield to the ranking member, Mr. Graves.
Mr. Graves of Missouri. Thank you, Mr. Chairman.
I think we can all agree that we want clean air and clean
water for our communities, and that we have to prepare for the
challenges that are posed by severe weather events. And those
are happening with greater frequency and intensity.
While climate change is often considered to be a loaded
issue that sends us all to our respective opposing partisan
corners, I can tell you that protecting the environment is very
much a bipartisan issue.
We have leaders on this committee who have been working
hard to address the issue, and this committee has a bipartisan
track record of addressing issues like resiliency and
mitigation, which prepares our infrastructure to withstand the
impacts of climate change.
We are willing to work with our Democratic colleagues on
goals of reducing emissions in transportation. However, my
colleagues must also understand that people are not going to
stop driving cars or flying on airplanes.
While dramatically increasing funding for transit and
passenger rail as proposed in last year's H.R. 2 is going to
take some cars off of the road in urban centers, it is often
inefficient and very much unjustified in rural America.
Meanwhile, there are a couple of key points that help keep
things in perspective. America is the world leader in reducing
emissions, and according to the International Energy Agency,
U.S. emissions reductions in the last 10 years have been the
largest in world history. Plus, goods manufactured in the U.S.
now are 80 percent more carbon-efficient than the world
average.
There are a lot of innovative American companies that are
coming up with some great solutions to reduce our emissions,
and it is important as we hear from our witnesses today about
the solutions that they have developed on their own so that
Congress does not trample on the progress that they are making.
What works for larger companies may not work for smaller
companies. Larger companies have the resources to be able to
deploy.
The way to lead the world to becoming greener and more
resilient is not through unachievable, one-size-fits-all
policies or spending trillions on a patchwork of pilot
programs. Heavy-handed mandates are only going to waste money
and constrain innovation and put many of our job creators out
of business.
Instead, incentives that spur American innovation and
accelerate what is already being done are the key to achieving
our climate goals without taking down the economy and
regulating jobs simply out of existence.
I look forward to hearing from the witnesses today on the
unique ways in which each of them is working to find a viable,
long-term solution to reducing carbon use and growing American
businesses.
[Mr. Graves of Missouri's prepared statement follows:]
Prepared Statement of Hon. Sam Graves, a Representative in Congress
from the State of Missouri, and Ranking Member, Committee on
Transportation and Infrastructure
Thank you, Chair DeFazio. We can all agree that we want clean air
and clean water for our communities, and that we must prepare for the
challenges posed by severe weather events that are happening with
greater frequency and intensity.
While ``climate change'' is often considered to be a loaded issue
that sends us all to our respective partisan corners, I can tell you
that protecting the environment has bipartisan interest. We have
leaders on this Committee who have been working hard to address this
issue. And this committee has a bipartisan track record of addressing
issues like resiliency and mitigation, which prepares our
infrastructure to withstand the impacts of climate change.
Having said that, you will not find bipartisan support for heavy-
handed government mandates, one-size-fits-all policies, or the complete
upending of our traditional infrastructure programs to enact excessive
climate goals that look more like the liberal agenda outlined in the
Green New Deal.
We are willing to work with our Democratic colleagues on the goal
of reducing emissions in transportation. However, my colleagues must
also understand that people are not going to stop driving cars or
flying on airplanes.
While dramatically increasing funding for transit and passenger
rail--as proposed in last year's H.R. 2--may take some cars off the
road in urban centers, it is often inefficient and unjustifiable in
rural America. Additionally, COVID has completely disrupted our
transportation network, and it's important to see how the system
rebalances itself and what our new reality will look like.
Meanwhile, I think there are a couple of key points that help keep
things in perspective.
America is the world leader in reducing emissions. According to the
International Energy Agency, U.S. emissions reductions in the last 10
years have been the largest in world history. Plus, goods manufactured
in the U.S. now are 80 percent more carbon-efficient than the world
average.
There are a lot of innovative American companies coming up with
solutions to reduce our emissions. It's important, as we hear from our
witnesses about the solutions they have developed on their own, that
Congress doesn't trample on the progress they are making.
We must also keep in perspective that while many of these
businesses testifying today are great American companies, they have the
resources and manpower to change and adapt more quickly. What works for
larger companies may not work for the smaller operators.
The way to lead the world in becoming greener and more resilient is
not through unachievable, one-size-fits-all policies or spending
trillions on a patchwork of pilot programs. Heavy-handed mandates will
only waste money, constrain innovation, and put many of our job-
creators out of business.
Instead, incentives that spur American innovation and accelerate
what is already being done are the key to achieving our climate goals
without taking down the economy and regulating jobs out of existence.
I look forward to hearing from our witnesses today on the unique
ways in which each of them is working to find a viable, long-term
solution to reducing carbon use and growing American business.
Mr. Graves of Missouri. And with that, I would like to
yield my remaining time to the ranking member on the Select
Committee on the Climate Crisis, Mr. Graves.
Mr. Graves of Louisiana. Thank you, Ranking Member Graves,
for the yield.
Mr. Chairman, I just want to follow up quickly on the
conversation that the ranking member noted and also on your
comments.
Mr. Chairman, as we move forward, we have got to keep in
mind that, number one, this committee has jurisdiction over
transportation infrastructure and that, like the following up
on the successful work of the FAST Act and other bills we have
done in the past, we need to continue to advance our
transportation solutions, and we need to do it in an efficient
way because there is no question that we are decades behind
where we need to be in regard to infrastructure progress, and
it is impacting our economy. It is squeezing our economy.
Mr. Chairman, as we move forward, we also need to keep in
mind that the United States has reduced emissions more than the
next 12 emissions-reducing countries combined in regard to
emission reductions in the energy sector. We are the global
leader today in reducing emissions.
And we have done that not through regulation, not through
requirements, not through picking winners and losers in
technology, but by letting the markets do what they do.
As a matter of fact, when President Obama put the Clean
Power Plan together, his objective was to reduce emissions by
32 percent, by 32 percent off of a 2005 baseline, and the goal
that President Obama set was to do that by 2030, and, Mr.
Chairman, without the impact of regulations, without the impact
of mandates, without the impact of picking winners and losers,
we actually hit that target nearly 11 years earlier under
President Trump.
And we hit it in 2019, proving once again that we can move
forward with affordable solutions, with clean solutions, with
solutions that are based on U.S. resources and U.S. technology
that are exportable as opposed to picking winners and losers
and moving in the direction where we subject ourselves to the
manufacturing and production capabilities of China and other
countries that do not share our objectives.
So, Mr. Chairman, I look forward to working with everyone
on this committee to build upon the successes and the lessons
learned that we have had in the energy sector in reducing
emissions and to make sure that we have a transportation bill
with some clean energy solutions, not a climate change bill
with transportation afterthoughts.
I yield back.
Mr. Graves of Missouri. Mr. Chairman, if you do not mind, I
have got two letters from the Portland Cement Association and
the American Public Gas Association. Could I have unanimous
consent to insert them in the record?
Mr. DeFazio. Without objection, so ordered.
[The information follows:]
Letter of March 17, 2021, from Sean O'Neill, Senior Vice President of
Government Affairs, Portland Cement Association, Submitted for the
Record by Hon. Sam Graves of Missouri
March 17, 2021.
Hon. Peter DeFazio,
Chairman,
Transportation and Infrastructure Committee, 2165 Rayburn House Office
Building, Washington, DC.
Hon. Sam Graves,
Ranking Member,
Transportation and Infrastructure Committee, 2164 Rayburn House Office
Building, Washington, DC.
Dear Chairman DeFazio and Ranking Member Graves:
The Portland Cement Association (PCA), which represents cement
manufacturers across the country, appreciates the opportunity to submit
comments for the Transportation and Infrastructure Committee's ``The
Business Case for Climate Solutions'' hearing. We believe it is
important to take steps to combat climate change and believe cement is
critical to building infrastructure to better withstand the climate
crisis.
As you may know, PCA is a premier policy, research, education, and
market intelligence organization serving America's cement
manufacturers. PCA's members represent 93 percent of the U.S. cement
production capacity and have facilities in all 50 states. Our members
manufacture portland cement, the primary ingredient in concrete, an
essential construction material and a basic component of our nation's
infrastructure. Portland cement is used in the construction of
highways, bridges, tunnels, mass transit systems, airports, runways,
locks, dams, and wastewater infrastructure. Cement and concrete product
manufacturing, directly and indirectly, employs approximately 600,000
people across the United States, and our collective industries
contribute over $100 billion to our economy.
The cement industry commends the attention being placed by the
Committee on combatting climate change. PCA and our members are
committed to working with Congress to ensure our industry continues
playing our part in building our nation's resilient infrastructure and
lowering our industry's carbon footprint. Recently, PCA announced our
ambition to reach carbon neutrality 2050 through the entire concrete
value chain. We are in the process of drafting our industry's roadmap
to carbon neutrality and look forward to sharing the roadmap with you
upon its completion.
From an infrastructure perspective, there is an opportunity to
advance policy that reduces carbon emissions associated with the use
phase of an infrastructure asset and considers the carbon sink
opportunity associated with carbonization. According to the
Environmental Protection Agency, the transportation sector makes up 28
percent of the United States' total emissions. Critical to reducing
these emissions is designing and building transportation assets with
elements to address the impacts of climate change. It is important to
recognize that from an infrastructure perspective, this means not only
building projects that will reduce transportation-related emissions but
also improving the resiliency of our nation's infrastructure. Concrete
construction plays as important role in both reducing transportation
related emissions and improving the resiliency and sustainability of
transportation assets.
Part of reducing transportation-related emissions is accounting for
emissions reductions during the use of a transportation asset. A
critical part of reducing use phase emissions is the design and
construction of roadways that reduce excess fuel consumption. Whether
gasoline, diesel, or electric, all vehicles use energy to move, but
some of that energy is wasted. Pavement vehicle interaction (PVI) is
the relationship between a vehicle's tires and a road's surface, such
as roughness, texture, and deflection. PVI can lead to excess fuel
consumption and greenhouse gas emissions. Research by the Massachusetts
Institute of Technology's (MIT) Concrete Sustainability Hub of
Virginia's interstate highway system identified 1 million tons of
carbon dioxide emissions associated with excess fuel consumption over a
seven-year period.\1\ MIT's Concrete Sustainability Hub research also
shows that 1.3 percent of Virginia's interstate roadways are
responsible for 10 percent of its total greenhouse gas emissions.
Improving PVI is especially important on our nation's freight
corridors. Research has shown that lessening the impacts of deflection
of 40-ton trucks could generate up to four percent in fuel savings.
Building and maintaining stiffer pavements is important to reducing
transportation related greenhouse gas emissions. Policies seeking to
reduce transportation related emissions should seek to advance road
construction using materials that translate to stiffer pavements.
---------------------------------------------------------------------------
\1\ http://cshub.mit.edu/sites/default/files/documents/
CSHub_PVI_v4_final_print.pdf
---------------------------------------------------------------------------
Additionally, as steps are taken to combat climate change, it is
important to recognize that certain infrastructure building materials
can absorb more carbon than is released as carbon dioxide, therefore
serving as a carbon sink. Specifically, a chemical reaction called
carbonation occurs in concrete roadways, which forms calcium carbonate.
Calcium carbonate forms when carbon dioxide from the air reacts with
the water in concrete pores, and then with calcium compounds in
concrete. As a result, the concrete roadway serves as a concrete sink.
Research by MIT's Concrete Sustainability Hub demonstrates that the
carbonation process could offset five percent of the carbon dioxide
emissions generated from the cement used in U.S. pavements.\2\ MIT's
research also shows that 5.8 million tons of carbon dioxide could be
sequestered, with 2.8 million tons from the use phase and 3 million
tons coming from the end of life. This research demonstrates that
policy seeking to reduce transportation related emissions consider the
full life cycle of a project.
---------------------------------------------------------------------------
\2\ https://cshub.mit.edu/sites/default/files/images/
0120%20Carbon%20Uptake%20Brief.pdf
---------------------------------------------------------------------------
The federal government's 2019 National Climate Assessment, compiled
by 13 agencies, highlights that extreme weather events will
increasingly disrupt and damage critical infrastructure in communities
across the country due to an increase in heavy precipitation, coastal
flooding, heat, and wildfires with regional differences. PCA encourages
the Committee to prioritize combatting climate change by investing in
projects to improve resiliency and adaption, enabling the nation's
infrastructure to withstand a disaster better and return to operation
quickly. Concrete is a durable and resilient building material critical
to building infrastructure that can withstand the increase in extreme
weather events. The cement industry recognizes that both gray
infrastructure and natural and nature-based features (NNBF) are used to
improve the resiliency of infrastructure assets. Many times, both
features are used in concert with each other to improve the resiliency
of infrastructure. It is important that policy seeking to improve the
resiliency of infrastructure provides engineers the discretion to
choose the best features on a project-by-project basis. To do this, it
is important to consider the costs and benefits of project features
over the life cycle of the project. Doing so will ensure the best and
most cost-effective project alternative over the long-term are used in
each instance.
PCA appreciates the opportunity to share our perspective on climate
solutions as it relates to transportation and infrastructure. If you
have any further questions, please feel free to contact Sean O'Neill,
PCA's Senior Vice President of Government Affairs.
Sincerely,
Sean O'Neill,
Senior Vice President of Government Affairs, Portland Cement
Association.
Letter of March 17, 2021, from Dave Schryver, President and CEO,
American Public Gas Association, Submitted for the Record by Hon. Sam
Graves of Missouri
March 17, 2021.
Hon. Peter A. DeFazio,
Chairman,
House Committee on Transportation and Infrastructure, 2165 Rayburn
House Office Building, Washington, DC.
Hon. Sam Graves,
Ranking Member,
House Committee on Transportation and Infrastructure, 2164 Rayburn
House Office Building, Washington, DC.
Re: March 17, 2021 Full Committee Hearing on ``The Business Case for
Climate Solutions''
Dear Chairman DeFazio and Ranking Member Graves,
APGA represents roughly 1,000 retail natural gas distribution
entities owned by, and accountable to, the citizens they serve. They
include municipal gas distribution systems, public utility districts,
county districts, and other public agencies that own and operate
natural gas distribution infrastructure in their communities. Their
primary focus is on providing safe, reliable, affordable, efficient,
and clean natural gas service to their customers and communities. APGA
members deliver natural gas to be used for residential space and water
heating, cooking, and clothes drying, as well as for various commercial
and industrial applications. In regard to the March 17th full
Transportation and Infrastructure Committee hearing on ``The Business
Case for Climate Solutions,'' several public natural gas utilities also
supply fuel for natural gas vehicle (NGV) fueling stations, and many
maintain and manage fueling operations for their own fleets or for
vehicles within their community.
APGA was very appreciative of the discussion on transportation
technologies, and the importance of low and no-emission vehicles in
America's pursuit of a clean energy future. Public natural gas
utilities continue to play a role in reducing greenhouse gas (GHG)
emissions in all sectors. Our members are good stewards of their
systems and the environment; they also take seriously their role in
providing affordable and reliable energy. In addition to the
residential and industrial uses most are more familiar with, natural
gas is used for transportation. NGVs have significantly less emissions
and given the price of natural gas, offer relative price stability,
which makes them an attractive option for urban fleets, long-haul
shipping, and municipal or local vehicles. APGA knows that natural gas
and the infrastructure and workforce that get it to America's homes and
businesses, as well as NGV fueling stations, are essential in the US
furthering all aspects of clean energy policy, while still ensuring a
resilient and economical energy source. The following further details
how NGVs can play a critical role in achieving America's transportation
decarbonization goals. APGA suggests that the Committee consider this
input, as it develops clean energy legislation, recognizing complete
electrification of our nation's transportation is bad policy.
Many APGA members are heavily invested in natural gas
transportation fuels, mostly via compressed natural gas (CNG). This
fuel has proven to be safe, clean, abundant, and affordable, and our
members are proud to distribute. NGVs increase fuel diversity, spurring
economic growth and potential for expanded application across the
country. NGVs also provide two specific benefits that other fuels
cannot: unmatched fuel delivery reliability and the ability for
communities to reach attainment status under the National Ambient Air
Quality Standards (NAAQS), as set forth in the Clean Air Act.\1\
Municipalities take advantage of these characteristics by running and
maintaining their own natural gas fleets, including maintenance and
utility trucks.
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\1\ ``Clean Air Act'' Sections, P.L. 91-604, Sec. 109.
---------------------------------------------------------------------------
CNG is resilient. Its delivery is only dependent on the
availability of the natural gas via underground pipelines. Gasoline and
electricity, on the other hand, can only be used so long as gasoline
supply remains uninterrupted, and the electricity infrastructure
remains functional. However, these are often disrupted in severe
weather events. For example, the 2017 hurricane season resulted in
widespread power outages and major gasoline shortages. Fortunately,
natural gas was fully functional through it all. NGVs proved resilient
for two reasons. One, the supply could be delivered relatively
uninterrupted. Natural gas pipelines, being underground, were mostly
protected from debris, wind, and storm surges. Second, CNG can be
pumped without the use of electricity. The fueling stations are run on
generators that are fueled by natural gas. With no need for
electricity, the pumps were able to flow CNG to stations reliably.
There is an environmental benefit to NGVs, too. They offer the
fastest path to reducing heavy-duty vehicle emissions.\2\ As an
example, California has the most rigorous emission standards for
nitrogen oxides (NOx), but the Cummins Westport 8.9-liter ISL G NZ
engine is certified to meet the California Air Resource Board (CARB)
standard. As well, this same manufacturer has an engine with near-zero
NOx emissions. Generally speaking, these innovations from Cummins
Westport are 90% cleaner than what the current EPA standard
requires.\3\ Everyone is discussing electricity as the next
transportation fuel, but why dismiss natural gas so quickly? Even in
states like California, Oregon, and Washington that have the cleanest
electrical grids in the nation, the NOx emitted through emissions is
much worse than the direct use of natural gas in a heavy-duty vehicle
with a natural gas engine.\4\
---------------------------------------------------------------------------
\2\ ``Environment,'' NGV America, Accessed March 15, 2021, https://
www.ngvamerica.org/environment/.
\3\ ``Report Overview One Sheet,'' NGV America, Accessed March 15,
2021, https://cdn.ngvgamechanger.com/pdfs/game-changer-graphic-
onesheet.pdf.
\4\ Ibid.
---------------------------------------------------------------------------
The US may soon face challenges of how to properly dispose of spent
vehicle batteries. If electric vehicles are to be the future of
transportation, the grid will likely need significant upgrades.
Research by the Smart Electric Power Alliance (SEPA), shows that 75
percent of all electric utilities in the United States are not prepared
to meet expected future demand in terms of grid capacity and
distribution needs.\5\ As proponents of full-fuel-cycle metrics, APGA
also wants to highlight that the Union of Concerned Scientists has
provided it takes so much energy to make batteries that electric
vehicles with a 250-mile range have a carbon footprint 68 percent
higher due to manufacturing.\6\
---------------------------------------------------------------------------
\5\ ``Utilities and Electric Vehicles: Evolving to Unlock Grid
Value,'' Smart Electric Power Alliance, Accessed March 15, 2021,
https://sepapower.org/resource/utilities-electric-vehicles-evolving-
unlock-grid-value/.
\6\ ``Cleaner Cars from Cradle to Grave,'' Union of Concerned
Scientists, Published Oct 29, 2015, https://www.ucsusa.org/resources/
cleaner-cars-cradle-grave.
---------------------------------------------------------------------------
There are additional emissions reductions opportunities if
renewable natural gas (RNG) is utilized in the transportation fuel
market. Both APGA members, as well as private companies, are investing
in this technology. The United Parcel Service (UPS) is making
significant investments in RNG and CNG transportation initiatives. They
recently announced plans to purchase more than 6,000 natural gas-
powered trucks between 2020 and 2022, a commitment representing a $450
million investment in the company's alternative fuel program to reduce
emissions and a complement to its current RNG commitments.\7\ Also,
buses used by cities for transit can take advantage of RNG to lower
emissions in their locales. Fueling with natural gas can lower GHG
emissions about 12 percent, when compared to diesel. However, in
research led by CARB, buses fueled with RNG can yield a carbon-negative
lifecycle emissions result. Additionally, this CARB data shows RNG
holds the lowest carbon intensity of any on-road vehicle fuel,
including fully renewable electric.\8\ APGA and its members support RNG
technologies in the transportation sector and all others. RNG is
derived from the breakdown of organic wastes and processed for use in
existing natural gas infrastructure, interchangeable with geologic
natural gas in homes, businesses, vehicles, manufacturing, and
industrial applications. RNG, a low-carbon pathway, takes an existing
carbon-emitting waste stream, either from waste or agriculture, and
recycles into a usable product. APGA members' support for RNG
demonstrates their investment in balanced energy solutions as it
lessens environmental impacts. The Committee should consider federal
support for this valuable technology.
---------------------------------------------------------------------------
\7\ ``UPS adding 6,000 NGVs,'' Shale Directories, Accessed March
15, 2021, https://www.shaledirectories.com/blog/ups-adding-6000-ngvs/.
\8\ ``Maximize Clean Transit Investment: Natural Gas Outperforms
Electric,'' Accessed March 15, 2021, https://ngvamerica.org/wp-content/
uploads/2021/02/NGVA-Transit-Full-Study-December-2020.pdf
---------------------------------------------------------------------------
APGA's members agree that action is needed to further clean
transportation policy and are grateful for the full Committee holding
this hearing, but APGA urges pursuit of equitable energy policy through
a balanced solution. Do not pursue only electric vehicles. This drastic
approach misses the mark discarding the value natural gas
infrastructure and NGVs has delivered through decreased emissions now
and will continue to deliver well into the future through innovations
around increased use of RNG. APGA hopes the Committee will pursue
policies that allow for multiple fuels, with a focus on environmental
benefits balanced with reliability and affordability for all Americans.
Thank you again for the opportunity to submit this input. APGA stands
ready to work together in this effort.
Dave Schryver,
President & CEO, American Public Gas Association.
Mr. DeFazio. We will now proceed to our witnesses.
Mr. Jack Allen, chief executive officer and chairman,
Proterra, Inc.
Mr. Shameek Konar, chief executive officer, Pilot Flying J,
on behalf of the National Association of Truckstop Operators.
Mr. Troy Rudd, chief executive officer, AECOM.
Mr. Rafael Santana, president and chief executive officer
of Wabtec.
Mr. Frederick Smith, chairman and chief executive officer
of the Federal Express Corporation.
Ms. Laurie Giammona, senior vice president for customer
care, Pacific Gas and Electric Company.
Mr. Tom Lewis, national business line executive for
climate, resilience, and sustainability at WSP USA.
And Mr. Charles Hernick, vice president of policy and
advocacy, Citizens for Responsible Energy Solutions.
As I said, this is a long witness list, but I appreciate
you all being here. We have your written remarks, so if you
would all summarize in a 5-minute statement, that would be most
desirable.
With that, Mr. Allen.
TESTIMONY OF JACK ALLEN, CHIEF EXECUTIVE OFFICER AND CHAIRMAN,
PROTERRA, INC.; SHAMEEK KONAR, CHIEF EXECUTIVE OFFICER, PILOT
FLYING J, ON BEHALF OF THE NATIONAL ASSOCIATION OF TRUCKSTOP
OPERATORS; TROY RUDD, CHIEF EXECUTIVE OFFICER, AECOM; RAFAEL
SANTANA, PRESIDENT AND CHIEF EXECUTIVE OFFICER, WABTEC
CORPORATION; FREDERICK W. SMITH, CHAIRMAN AND CHIEF EXECUTIVE
OFFICER, FEDEX CORPORATION; LAURIE M. GIAMMONA, SENIOR VICE
PRESIDENT FOR CUSTOMER CARE, PACIFIC GAS AND ELECTRIC COMPANY;
TOM LEWIS, P.E., J.D., NATIONAL BUSINESS LINE EXECUTIVE FOR
CLIMATE, RESILIENCE, AND SUSTAINABILITY, WSP USA; AND CHARLES
HERNICK, VICE PRESIDENT OF POLICY AND ADVOCACY, CITIZENS FOR
RESPONSIBLE ENERGY SOLUTIONS
Mr. Allen. Thank you, and good morning, Chairman DeFazio,
Ranking Member Graves, and the members of the committee.
I thank you for the opportunity to testify at today's
hearing on the business case for climate solutions.
Mr. Chairman, I want to thank you and this committee for
driving the Federal surface transportation policies and funding
levels that will position America to compete and lead the
future of transportation globally.
The investments and overarching focus on reducing emissions
through H.R. 2 are exactly the bold steps that climate change
and the opportunity for jobs and new industries demand.
I am here today representing Proterra, Inc., an American
electric vehicle technology company. Proterra has been
delivering battery-electric transit buses to U.S. transit
agencies since 2010. Our buses have delivered over 17 million
miles of service, and we serve communities in over 40 States
and the District of Columbia.
We have over 130 customers, including municipal transit
agencies, airports, universities, and commercial businesses.
Proterra is also a leader in the design and manufacturing
of battery systems and electric drivetrains for commercial
vehicles, and we provide charging infrastructure solutions for
agencies and fleets.
Our charging solutions enable bidirectional vehicle-to-grid
applications, allowing electric vehicles to be strategic assets
to the power grid.
We provide our products and our services to other vehicle
manufacturers, and our technology will be powering coachbuses,
schoolbuses, delivery trucks, low-floor shuttles, and
construction equipment in the United States and globally, in
collaboration with some of the biggest names in the industry.
Most importantly, we are an American company, an American
technology leader. Our products are designed, engineered, and
manufactured in our factories in the United States.
We hold over 70 patents. We employ over 600 people across
the Nation, and we operate 3 U.S. factories. Our products
comply with Made in America policies, and our businesses
support hundreds of other U.S. businesses, including small
businesses.
Over 75 percent of the components in Proterra vehicles are
sourced from American companies in more than 30 States,
including Illinois, Minnesota, North Carolina, Ohio,
Pennsylvania, Tennessee, and Texas.
As battery costs continue to decline and vehicle ranges
increase, transitioning to zero-emission electric vehicles is
not just the right thing to do for public health and to lower
emissions, it is the smart thing to do for businesses.
Compared to just 4 miles per gallon in diesel vehicles,
Proterra vehicles have a fuel economy of 25 miles per gallon
equivalent and a low total cost of ownership compared to diesel
or natural gas vehicles.
In addition to heavy-duty electric vehicle battery systems
like Proterra's, we create economies and business opportunities
well beyond transportation of goods and services. We have
designed our battery systems to serve the development of
multiple industries and applications.
Our battery systems are built to last. They carry 6- to 12-
year warranties, and after that they still have the capacity
for second-life applications, such as stationary energy
storage, and beyond that, our batteries are designed for easy
separation of components and are recyclable.
The United States is positioned to lead the world in this
emerging market for clean energy and clean mobility. This
opportunity for U.S. leadership and manufacturing expansion is
worthy of strong support from the Federal Government.
The Federal Government, including the work of this
committee, has already played a critical role in the early
adoption of electric vehicle technology, and we ask that you
continue to do so.
Public transit funding through the FAST Act's Low or No
Emission Vehicle program, for example, has accelerated our
technology development to support the demand from U.S. transit
agencies' investments in battery-electric buses.
By driving greater investment into the market, the Federal
Government can send a strong signal to the industry and to the
supply chains that the United States is committed to
electrification, strengthening domestic supply chains for
manufacturing and materials that will lower cost through
economies of scale while creating even more American jobs in
this rapidly growing global market.
Thank you for the opportunity to testify before you today,
and I look forward to answering your questions.
Thank you.
[Mr. Allen's prepared statement follows:]
Prepared Statement of Jack Allen, Chief Executive Officer and Chairman,
Proterra, Inc.
Chairman DeFazio, Ranking Member Graves, and Members of the
Committee, thank you for the opportunity to testify at today's hearing
on ``The Business Case for Climate Solutions.''
My name is Jack Allen, and I am the CEO of Proterra.
I am honored to appear before you today to discuss the opportunity
for American industry to drive the next wave of innovation and economic
growth and provide solutions to reduce greenhouse gas emissions through
electric vehicle technology.
Proterra is a leader in the design and manufacture of battery
systems and electric drivetrains for commercial vehicles, charging
infrastructure solutions for commercial vehicle fleets, and zero-
emission, battery-electric transit buses. Our mission is to advance
electric vehicle technology to deliver the world's best performing
commercial vehicles.
Proterra is an American company and an American technology leader.
Our products are designed, engineered, and manufactured at our
factories in the United States. We employ over 600 people across the
nation, with most of those employees located at our bus production
plant in Greenville, South Carolina, our battery and bus production
plant in City of Industry, California, and our battery production and
powertrain testing lab in Burlingame, California.
Our sole focus is battery-electric vehicles. We are not hampered by
investments in legacy technologies. While the internal combustion
engine has had a good run, the future is electric. Market demand for
electric vehicles is rising because battery electric vehicles can meet
the demands of customers at a lower cost of ownership than diesel
vehicles. At the same time, electric vehicles impose fewer costs on our
communities and advance our climate goals.
Mr. Chairman, I want to thank you and this Committee for driving
federal surface transportation policies and funding levels that will
position America to compete and lead the future of transportation
globally. The investments and overarching focus on reducing emissions
throughout H.R. 2 are the bold steps that climate change and the
opportunity for jobs and new industries demand.
Federal policy supporting the development of alternative fuel
technologies and investments in zero emission vehicles has been
critical to U.S. competitiveness in these new industries and to
advancing U.S. technology leadership. In turn, those policy signals
have been followed by significant private investment in companies such
as Proterra that have created new jobs. These jobs are full time, high
paying, skilled jobs in manufacturing, engineering, and related support
functions. While the Bureau of Labor Statistics stopped measuring
employment in industries that produce goods or provide services that
benefit the environment in 2013, in 2011 more than 3.4 million
Americans were employed in the green sector, including over 500,000 in
manufacturing jobs.\1\ In March 2020, The Institute for Applied
Economics at the Los Angeles County Economic Development Corporation
reported that the electric vehicle industry in California alone has
provided over $9.6 billion in labor income and thousands of well-paying
jobs. California's EV industry provided over 275,600 jobs with average
annual wages of $91,300 in 2018 alone.\2\
---------------------------------------------------------------------------
\1\ U.S. Bureau of Labor Statistics, https://www.bls.gov/green/
home.htm, last accessed on March 13, 2021.
\2\ https://laedc.org/2020/03/01/laedc-ev-industry-report/, last
accessed on March 13, 2021.
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Expanding the electric vehicle industry and investing in supporting
infrastructure, and commercial electric vehicles, will continue to
create new job opportunities. Such efforts will ensure that American
companies become global leaders in research, development and
manufacturing of zero emission vehicles.
Proterra is one of those leaders.
We delivered our first battery electric bus to Foothill Transit in
San Gabriel Valley over ten years ago. Since then, we have delivered
over 550 battery electric transit buses throughout North America. We've
sold more than a thousand electric transit buses; however, battery
electric buses still only represent approximately 1% of the overall
transit bus market.
Through deploying those transit buses, we have learned what it
takes to design and manufacture a commercial, heavy-duty, all-electric
vehicle. We have just launched our fifth-generation battery electric
bus, the ZX5, in 2020, and our battery technology has been proven
through over 17 million miles of revenue service. There is much to be
done to transition the U.S. transportation system to zero emission
fleets, and American companies, like Proterra, can meet this
opportunity.
We have developed intellectual property and hold over 70 patents on
our innovative solutions. In addition, we have taken our expertise in
transit vehicles and built a business providing electric powertrain
systems to other commercial OEMs. Our battery systems--also designed
and manufactured in the United States--will power other transit buses,
coach buses, school buses, delivery trucks, low-floor shuttles, and
construction equipment in the United States, and other countries.
Critical to transportation electrification is charging
infrastructure. In fact, recent news headlines are pressing this point
to policymakers as well as the public. To date, Proterra has deployed
an industry-leading 54 megawatts of charging systems for our customers
through 45 projects in North America. Proterra is a full-service
provider of charging solutions including the software to manage fleet
charging and the expertise to plan large-scale, cost-effective charging
solutions for vehicle fleets. We recently completed our largest
charging installation for the City of Edmonton, Canada, with 40
Proterra electric buses and a first-of-its-kind overhead charging
solution for a bus depot in North America.\3\ Our new charging hardware
manufacturer, Power Electronics, is investing in a manufacturing
facility in Arizona to support Proterra's Energy business.
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\3\ https://www.thefourth-revolution.com/buses/edmonton-transit-
agency-becomes-first-in-north-
america-to-deploy-overhead-in-depot-charging-for-electric-buses/
---------------------------------------------------------------------------
Proterra's business supports hundreds of suppliers, including US
small businesses and disadvantaged business enterprises, women-owned
businesses, and veteran-owned companies. Over 75 percent of the
components in Proterra vehicles are sourced from American companies in
more than 30 states including Illinois, Minnesota, North Carolina,
Ohio, Pennsylvania, Tennessee, and Texas.
The road to building the future of zero emission transportation in
the U.S. begins with public transit. I would like to thank the Members
of this Committee for your leadership in advancing the American Rescue
Plan and previous COVID-19 emergency relief legislation which have
provided necessary funding to public transit agencies in both urban and
rural areas of the nation that provided a lifeline during the pandemic.
In 2019, Americans took 9.9 billion trips on public transportation.
Public transportation brings Americans to work. Over 71% of public
transit riders are employed.\4\ During the COVID-19 pandemic, our
essential workers depended on public transportation and your actions
helped transit agencies meet that need.
---------------------------------------------------------------------------
\4\ https://www.apta.com/news-publications/public-transportation-
facts/, last accessed on March 14, 2021.
---------------------------------------------------------------------------
Congress also took the historic step in the FAST Act to fund the
Federal Transit Administration's Low and No Program from the Highway
Trust Fund. Stable funding from the authorization act buttressed by
supplemental funding through the annual appropriations process for the
past 4 fiscal years has provided approximately $500 million in
investments for this program which has supported over 200 separate
awards to help communities electrify. As a result of this modest
federal investment, more than 2700 zero emission buses are running in
revenue service or soon will be deployed.\5\ Just as importantly, the
program has demonstrated a federal commitment to electric vehicle
deployment and the growing level of funding has sent a signal of
support for accelerating electric vehicle adoption for public
transportation.
---------------------------------------------------------------------------
\5\ https://calstart.org/wp-content/uploads/2021/01/
Zeroing_In_on_ZEBs_FINALREPORT_
1262021.pdf
---------------------------------------------------------------------------
Driven by technological and cost advancements, electrifying
transportation increasingly offers a winning formula to cities, states,
companies, and other fleet operators.
Over the past decade, battery costs have declined substantially.
According to Bloomberg New Energy Finance, since 2010, lithium-ion
battery pack prices have fallen 89 percent.\6\ At Proterra, we have
lowered our battery pack cost by 86 percent since 2017.
---------------------------------------------------------------------------
\6\ https://about.bnef.com/blog/battery-pack-prices-cited-below-
100-kwh-for-the-first-time-in-2020-
while-market-average-sits-at-137-kwh/
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Over our five generations of bus development, we have routinely
increased range and drive performance. Our newest model of electric
bus, the 40-foot Proterra ZX5, can be equipped with 675 kilowatt hours
of energy storage on board to deliver up to 329 miles of drive range,
which represents the most energy storage and longest drive range of any
40-foot electric bus available in the market today.
Going electric does not mean compromising on vehicle performance. A
Proterra electric transit bus can accelerate 1.5 times faster than a
standard diesel bus, with nearly twice the horsepower, giving it the
ability to tackle steep hills with grades up to 27 percent.
Battery-electric transit buses offer a low total cost of ownership
and less volatile fuel costs when compared to internal combustion
engine vehicles. Proterra's drivetrain and propulsion system enables
fuel economies of up to 25 MPGe, a substantial improvement over
conventional combustion engines fueled by CNG or diesel. Further
because electric buses have fewer parts, require no oil changes or
emissions tests, and place less wear on braking systems, operating and
maintenance expenses are substantially lower compared to diesel and CNG
alternatives.
Simply put, transitioning to zero-emission, electric vehicles is no
longer just the right thing to do for public health reasons and to
address climate change, it is the smart thing to do for businesses.
That's why private business along with cities, states, schools,
airports, and others are advancing bold initiatives to switch entirely
to zero-emission vehicle fleets.
Last summer, for example, 15 states and Washington D.C. signaled
their intent to transition to 100% zero-emission trucks and buses by
2050.\7\ California has continued its embrace of electric vehicles
through meaningful standards advanced last year to transition
commercial trucks like delivery vans, school buses and other large
vehicles to zero-emission technology by 2035.\8\
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\7\ https://ww2.arb.ca.gov/news/15-states-and-district-columbia-
join-forces-accelerate-bus-and-truck-electrification
\8\ https://www.gov.ca.gov/2020/09/23/governor-newsom-announces-
california-will-phase-out-
gasoline-powered-cars-drastically-reduce-demand-for-fossil-fuel-in-
californias-fight-against-
climate-change/
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Major automakers including GM and Ford along with truck
manufacturers like Daimler are driving significant investment into
accelerating their conversion to electric vehicles.\9\
---------------------------------------------------------------------------
\9\ https://www.nytimes.com/2021/01/28/business/gm-zero-emission-
vehicles.html
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Also, leading delivery and e-commerce companies including FedEx,
UPS, and Amazon are on a path to electrifying their fleets in the
coming years.\10\
---------------------------------------------------------------------------
\10\ https://www.nytimes.com/2020/08/27/business/electric-delivery-
vehicles-ups-fedex-amazon.html
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Now, as demand for transportation electrification accelerates,
electric vehicle technology is an opportunity for the United States to
be at the leading edge of the innovations that will create good
American jobs, modernize our nation's infrastructure, and help build a
more just and resilient economy.
Last summer, this Committee spearheaded HR2: The Moving Forward Act
which provided for bold investments in our future and decisive action
to create US leadership globally in zero emission transportation. The
competition in these markets is formidable. In China, there are 450,000
EV buses on the road and China has made massive investments in EV
technology.
We believe the technologies we need to meet the global demand for
zero-emission transportation, can and must be built right here in the
United States. We've experienced this first-hand at Proterra.
In December 2020, Proterra marked the opening of a new battery
production line in Los Angeles County. This facility will expand our
production capacity to manufacture our industry-leading battery
technology systems that power our fleet of transit buses as well as
commercial vehicles, such as school buses and delivery vans. With the
opening of our new battery production line, we are hiring over 30
employees in Los Angeles County--providing much needed jobs during the
pandemic--and these new jobs will include more than two dozen union
represented positions.
The new battery production facility is also the first to be co-
located within a vehicle manufacturing plant--showcasing our ability to
bring state-of-the-art battery production directly to vehicle
manufacturers.
Successfully building an advanced manufacturing workforce requires
investing in training and development. That's why, along with the
United Steelworkers Local 675, our community partners, and Los Angeles
County, we launched a first of its kind training program for job
applicants interested in electric vehicle manufacturing and celebrated
the first graduating class in January.
This training program was developed to advance diversity, equity,
inclusion in the EV manufacturing sector by targeting historically
underrepresented groups with barriers to employment, including women,
people of color, aging foster youth, veterans, and the formerly
incarcerated.
As the transportation industry transitions from fossil fuels, we,
along with our partners at USW Local 675, are modeling how American
manufacturing companies and workers can come together to create the
manufacturing jobs of the 21st century.
The benefits of electric vehicle technology extend far beyond how
we move people and deliver goods throughout our communities, too.
Proterra has designed our battery systems to serve the development of
multiple industries and applications.
The recent widespread power outages in Texas have demonstrated the
need for grid resilience, and electric vehicles can play an important
role. We can create a more resilient energy and transportation system
that works for everyone including cities and states operating electric
vehicle fleets as well as the utilities and regulators that manage the
grid.
Electrifying school bus fleets provides an excellent opportunity.
In 2018, Proterra and our partner Thomas Built Buses unveiled a
Proterra powered electric school bus. The all-electric Saf-T-Liner C2
Jouley is powered by Proterra's electric vehicle technology and built
on the Thomas Built Buses school bus platform--all manufactured here in
the United States, in California and North Carolina respectively.
The Jouley electric school bus is capable of supplying power back
to the electricity grid using bidirectional charging and vehicle-to-
grid technology. This means we can send stored power back to the
electricity grid at times when it's needed most or even to provide
back-up power to critical facilities like schools during a power
outage, as the electric utility DTE Energy will be testing with their
recent acceptance of six electric school buses to serve students in
Michigan.\11\
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\11\ https://www.michigan.gov/mienvironment/0,9349,7-385-93394-
551135--,00.html
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Just last month, the Montgomery County, Maryland Board of Education
approved a project with Highland Electric Transportation, to convert
its school bus fleet to all-electric, starting with 326 school buses
over the next four years. This project represents the largest single
procurement of electric school buses in North America. In addition to
delivering health and climate benefits by reducing diesel pollution,
these Proterra Powered electric school buses will lend their batteries
to deliver stored power to the local electricity markets, helping the
community integrate renewable energy and support grid resiliency.\12\
---------------------------------------------------------------------------
\12\ https://www.proterra.com/press-release/montgomery-county-
approves-largest-electric-school-bus-order/
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Utilities are focused on ensuring the right-sized charging
infrastructure is in place to meet the needs for electric vehicles.
These initial deployments show promise and policymakers should support
additional opportunities to explore how charging infrastructure
projects can lighten demand and deliver power back to the electricity
grid.
Accelerating the switch to clean transportation will require
partnership and coordination, and we are excited to work with electric
utilities across the country, including PG&E, which is represented on
this panel, to advance creative solutions to meet our energy demands.
Beyond transportation, there are further business opportunities for
U.S. innovation and job creation.
Proterra batteries come with up to 12 year warranties, depending on
the application. When Proterra batteries have met their useful life in
a vehicle, these batteries still retain a significant amount of energy
that can be used in second-life applications such as stationary energy
storage. In fact, our batteries are designed with second life
applications in mind.
When batteries are no longer suited for those applications, there
is an entire industry to be built in the U.S. to recycle components for
reuse. Proterra battery packs are designed for easy separation of
components for recycling purposes, allowing for 100% of aluminum used
in the battery pack to be recycled. We also work with top-tier
recycling companies such as Redwood Materials in Carson City, Nevada
that specialize in extracting and repurposing materials inside lithium-
ion automotive batteries.
This regenerative cycle of use and reuse can support the creation
of new jobs, help the United States maintain a competitive economic
advantage by spurring new domestic industries, and strengthen our
national security by reducing reliance on foreign industries for
minerals and mining for critical raw materials.
The United States is positioned to lead the world in this emerging
market for clean energy and clean mobility. This opportunity for U.S.
leadership and manufacturing expansion is worthy of strong support of
the federal government. The federal government has played a meaningful
role in the early adoption of electric vehicle technology, and we
strongly urge you to continue to do so at a scale and with a sense of
urgency that the climate crisis demands. Through meaningful measures to
expand support for this emerging industry through policies that promote
manufacturing, a domestic supply chain, and workforce training, we can
bring the next wave of innovation directly to communities across the
United States.
For your consideration, Proterra recommends the following measures
to accelerate the adoption of zero emission vehicles:
Increase funding for zero emission buses and related
infrastructure. The Low or No Emission Vehicle Program (Low No) has
been responsible for funding thousands of electric transit buses, and
we urge you to reauthorize the program and apply significantly greater
resources to it to meet growing demand. The INVEST in America Act,
which later became the Moving America Forward Act, included bold
investments that dedicate significant resources for zero emission buses
through the ``zero-emission bus grants'' program as well ``Bus facility
and fleet expansion competitive grants'' program. As the Congress and
this Committee begin the surface transportation reauthorization process
again, we support reforming the Low No Program as a zero emission bus
grant program and endorse funding at the levels called for in the HR 2
or Congresswoman Brownley's Green Bus Act.
Incentivize domestic manufacturing and supply chain. We
urge Congress to modify the eligibility of the existing Advanced
Technology Vehicle Manufacturing (ATVM) loan program to include heavy
duty vehicle and suppliers to heavy duty original equipment
manufacturers (OEMs). Access to low cost capital through this program
would allow companies to invest in state-of-the-art manufacturing and
build the supply chain for domestic components that will allow us to
compete against aggressive foreign competition. It will also entice
foreign battery cell manufacturers that are the market leaders to open
manufacturing facilities in the United States and to import
considerable intellectual property and create new American jobs.
Support deployment of electric vehicles for other public
fleets. We recommend that Congress establish grant programs that are
modeled on previous successful efforts like the Low or No Emission
Vehicle Program that would support the electrification for other heavy
duty vehicle fleets such as school buses and municipal fleets.
Electrification of Federal Vehicles. Proterra applauds
the Administration's goal to electrify the federal fleet of vehicles,
which boost electric vehicle manufacturing domestically. While
opportunities for light duty vehicles garner much of the attention, we
believe that deploying zero emission buses at national parks, military
facilities, and other federal installations would bring immediate
environmental and public health benefits while also reducing operating
costs for these agencies over time.
Through these policies, the federal government can send a strong
signal to the industry and supply chains that the United States is
committed to electrification and will drive greater private investment
into the market, thereby creating even more American jobs in this
rapidly growing market.
Thank you for the opportunity to testify before you today. I look
forward to answering any questions that you may have.
Mr. DeFazio. Representative Burchett would like to briefly
introduce the next witness.
Mr. Burchett. I caught that ``briefly,'' Mr. Chairman.
Thank you.
Mr. Chairman, today I have the honor of introducing Shameek
Konar from Pilot Flying J. He is the chief executive officer,
and I note that Congressman Cohen has someone from Tennessee as
well, Mr. Smith, and I remember meeting him at Jimmy Kelly's in
Nashville, Tennessee, with then-Senator Cohen. So I am
interested to hear his testimony as well.
But today I am honored to welcome Mr. Konar to our hearing.
Since 2017, Mr. Konar has been instrumental in growing Pilot's
energy business. Founded in 1958 by Jim Haslam in Knoxville,
Tennessee, Pilot Flying J is now the 10th largest privately
held company in the United States.
And on a personal note, Mr. Haslam has been a good friend
to me. I saw him Saturday at our little coffee club we have at
one of his Pilots, and we were practicing social distancing if
anybody is listening to this.
But Mr. Haslam has always been very benevolent to the
community, literally giving millions and millions of dollars to
the community. I saw just in today's press that his family had
given another $1 million to the University of Tennessee.
But on a personal note, when I was a young State
legislator, I went back to my elementary school, and I asked
the principal if there is anything any of the kids needed, and
she said, yeah, there was one kid that needed a jacket and he
was poor.
I was pulling down about $16,500 a year, and I figured I
could afford about half of that jacket. So I called Big Jim
Haslam on the phone, and he said--he calls me Timmy because
he's known me since I was a little boy--``Timmy, just come on
by and pick up the check.''
We went half on that jacket, I remember, and the kid got to
go home that day warm. And I remembered one thing he said. He
said, ``Just don't tell anybody, Timmy. Just keep it
anonymous.''
And I have honored that until this point right now, but it
has been several years. So I feel it is important that we point
out that these folks have a very huge impact on our local
community.
But back to Pilot, it is also the largest operator of
travel centers in North America with over 900 retail and
fueling locations in 44 States, employing more than 28,000 team
members. Pilot's success is emblematic of the American energy
sector.
Pilot and other businesses like it have chosen to make
great strides on environmental issues. Because of private-
sector innovation, the United States is working towards
significant emissions reduction, and I hope Pilot Flying J
continues its good work.
And I will note Mr. Haslam has his autobiography out now,
and it was started basically in one little station across the
border in, I believe, Bristol, Virginia, and now its impact is
literally nationwide.
Mr. Chairman, I ask unanimous consent to submit for the
record a letter in support of this testimony from the National
Association of Convenience Stores and the Society of
Independent Gasoline Marketers of America.
Mr. DeFazio. Without objection, so ordered.
[The information follows:]
Letter of March 17, 2021, from the National Association of Convenience
Stores and the Society of Independent Gasoline Marketers of America,
Submitted for the Record by Hon. Tim Burchett
March 17, 2021.
Hon. Peter DeFazio,
Chairman,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC.
Hon. Sam Graves,
Ranking Member,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC.
Dear Chairman DeFazio and Ranking Member Graves:
The National Association of Convenience Stores (``NACS'') and the
Society of Independent Gasoline Marketers of America (``SIGMA'')
(collectively the ``Associations'') write to support the testimony of
Mr. Shameek Konar of Pilot Flying J Travel Centers LLC at the hearing
on ``The Business Case for Climate Solutions.'' \1\
---------------------------------------------------------------------------
\1\ U.S. House Committee on Transportation and Infrastructure,
``Hearing on The Business Case for Climate Solutions,'' (Mar. 17,
2021).
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Fuel retailers in the United States are well positioned to play an
important role in the development of infrastructure to offer American
motorists not only traditional liquid motor fuels but also a range of
alternatives, including electricity to power their vehicles.
Overview of the Associations and the Retail Fuels Marketplace
Collectively, the Associations represent approximately 80% of
retail sales of motor fuel in the United States. The fuel wholesaling
and convenience industry employed about 2.46 million workers and
generated more than $647.8 billion in total sales in 2019, representing
approximately 3 percent of U.S. gross domestic product. Of those sales,
approximately $395.9 billion came from fuel sales alone.\2\
---------------------------------------------------------------------------
\2\ Data from the National Association of Convenience Stores, State
of the Industry Report (2019).
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The retail fuels market is the most transparent, competitive
commodities market in the United States. Retailers post fuel prices on
large exterior signs, which consumers use to shop for the best
prices.\3\ Many consumers drive out of their way to save a few cents
per gallon. The Associations' members operate on tiny margins--
generally several cents per gallon of fuel sold.
---------------------------------------------------------------------------
\3\ In addition to price signs seen from the road, consumers also
frequently use applications, such as Gas Buddy, to compare fuel prices.
According to a 2019 NACS survey, 59% of consumers say price is the most
important factor in determining where they buy fuel. See NACS. (2019).
Consumer Behavior at the Pump. Retrieved from https://
www.convenience.org/Topics/Fuels/Documents/How-Consumers-React-to-Gas-
Prices.pdf.
---------------------------------------------------------------------------
The competitive nature of the retail fuels market compels retailers
to pass through cost savings to consumers in order to maintain and
increase their market share. It is in retailers' interests to increase
the amount of fuel they sell to consumers. This is not only because
those sales drive profit opportunity in and of themselves, but also
because such sales drive in-store traffic, which is another source of
profit for the retailer. These dynamics can be harnessed to create a
growing market for alternative transportation energy sources.
Electric Utilities, Fuel Retailers, and EV Charging Infrastructure
The Biden Administration has committed to adding 500,000 electric
vehicle (EV) charging stations over the next decade. The most
efficient, cost-effective path to achieving this goal is a partnership
between utilities and fuel retailers, with support from federal
policymakers.
Federal policy should incentivize and leverage private investment
in bringing electricity as an alternative fuel to market. By the same
token, federal policies should not undercut incentives for retailers to
invest in EV charging infrastructure.
The biggest impediment currently to fuel retailers investing in EV
charging is the practice of utilities charging all of their electricity
customers more in order to pay for their investments in EV charging
infrastructure. Where this occurs, utilities are able to compete with
private sector groups without risking a single dollar of their own.
This tilts the cost for electric charging infrastructure in favor of
utilities such that the private market cannot compete, placing existing
and new market participants at a competitive disadvantage which they
cannot overcome. The predictable result is that the private market will
not risk capital investment in EV infrastructure when it knows it
cannot make a return on that investment due to the unfair competition
from utilities.
Furthermore, some states classify businesses that sell electricity
for the purpose of charging EVs as utilities, effectively prohibiting
such sales from anyone other than utilities. Federal policy preempting
these state regulations should be established, allowing non-utilities
such as fuel retailers to resell electricity commercially.
Finally, federal policy should maintain the ban on commercialized
Interstate rest areas, including disallowing EV charging within federal
Interstate rights of way. This will ensure that off-highway businesses
are not discouraged from investing in EV charging. Our industry has
supported the ban on commercial activity and electric charging should
be treated no different from any other commercial service. If EV
charging is opened up at Interstate rest areas, it will undercut
private sector investments in that infrastructure at Interstate exits.
That will mean fewer, not more, EV chargers.
Conclusion
The Associations' members' sole objective is to sell legal
products, in a lawful way, to customers who want to buy them. As new
fuels enter the market, our members want to be able to sell those fuels
lawfully and with minimal volatility and risk. While the Associations'
members are agnostic to the type of fuel sold to satisfy consumer
demand, it is best for the American consumer to have a reliable source
of fuel at competitive and stable prices.
As such, the Associations believe that EV charging should be an
open, competitive market. Convenience and fuel retailers should be able
to sell electricity in a competitive market on equal footing with other
market actors. Allowing private sector competition will spur efficient
investment in and development of electric charging infrastructure. And,
it is the best way to ensure that vehicle owners continue to get the
best prices and experience as electricity is introduced into the fuels
market.
This Committee, utilities, and fuel retailers all have vital roles
to play in building the nation's first EV charging network, together.
Our industry is eager to work with the Committee to help it achieve
this objective.
Sincerely,
National Association of Convenience Stores.
Society of Independent Gasoline Marketers of America.
Mr. DeFazio. Mr. Konar, you are recognized for 5 minutes.
Mr. Konar. Thanks for that very, very generous
introduction.
Chairman DeFazio, Ranking Member Graves, and members of the
committee, thank you for inviting me to testify today.
My name is Shameek Konar. I am the chief executive officer
for Pilot Flying J, which is the largest travel center network
in the United States.
I am testifying on behalf of NATSO, the National
Association of Truckstop Operators.
Today I hope to demonstrate to you that travel center
companies and the broader retail fuel industry are invaluable
partners as you seek to minimize the transportation sector's
carbon footprint.
Our industry has demonstrated that we are prepared to
invest in any transportation fueling technology that our
customers desire.
We are eager to continue playing this important role as we
transition to the next generation of transportation energy.
The Biden administration wants to add 500,000 EV charging
stations over the next decade. My testimony will focus on the
most efficient, economical way to accomplish this objective and
lower the carbon footprint of transportation fuel.
We will need a partnership. We need a partnership between
utilities and fuel retailers with support from the Federal
Government to achieve this. In order to develop policies that
facilitate this partnership, there are fundamentally two
buckets of activities that we need to pursue.
First, the power grid needs to be restructured. As EV
charging stations are installed, generation, transmission, and
distribution networks will need to be expanded to meet this new
demand.
Drivers must be assured that they will be able to refuel as
reliably as they do today in order to expedite adoption of EVs.
Second, the market dynamics that govern our industry today
should be replicated to accommodate EVs. This will ensure that
customers have multiple recharging options that are competing
for their business on price, on speed of service, and on
quality of service.
As it relates to reducing range anxiety, one of the primary
impediments to EV adoption is a nationwide network of fast
charging stations.
We believe that this is achievable, but there must be a
policy framework to harness our core competencies of the
utilities, as well as the retail fuel sectors to make this
work.
The utility sector is best suited to perform the
generation, development, and power grid restructuring work that
will be essential to facilitate this network.
The fuel retailers, on the other hand, like us are best
positioned to own and operate EV charging stations and provide
transportation energy to customers, along with services, in the
manner that they are accustomed to today.
Until the number of EVs on the road reaches a critical
mass, however, there is an important role for Federal policy to
bridge this gap and make private investments more viable while
providing long-term consumer benefits and a reduction in the
carbon emission footprint of the sector.
These policies should encourage utilities and fuel
retailers to focus activities where we are the most productive.
At the same time, policies that may appear to be quick and
easy solutions often undermine our objective, either utilities'
incentives to restructure the power grid or the retailers'
incentive to invest in charging infrastructure.
For example, some electric utilities have had to increase
cost to all ratepayers to underwrite their investment in EV
charging stations and electricity that powers EVs.
Businesses like mine cannot do this, and we cannot compete
in this environment with those who do. But this would make it
very difficult for us to invest and actually hamper our goal of
reducing the carbon footprint.
Some advocates are also interested in allowing EV charging
at interstate rest areas. This will discourage, again,
companies like mine and other retailers in this industry from
investing in charging infrastructure. It will also signal to
prospective drivers that when they recharge, they will not have
access to all of the amenities and the security they have come
to expect from this sector.
Approaches like these would undermine the business case for
companies like Pilot and other fuel retailers to leverage our
existing investment--and we have tens of billions of dollars
invested in the sector--to develop EV charging infrastructure.
As I have said, there is a very strong business case for us
to be actively engaged in this space.
It is our sincere hope that we can continue working with
you, your staff, and my fellow witnesses to do just that.
On behalf of NATSO and Pilot, I thank you for inviting me
to testify here today, and I am happy to answer any questions
that you or the committee may have.
[Mr. Konar's statement follows:]
Prepared Statement of Shameek Konar, Chief Executive Officer, Pilot
Flying J, on behalf of the National Association of Truckstop Operators
I. Summary of Testimony
The National Association of Truckstop Operators (NATSO)
is the premier national trade association representing off-highway fuel
retailers, from multi-billion dollar travel center and convenience
store chains to small, single-store operators. Pilot Flying J (Pilot)
is the largest travel center chain in the United States, with more than
28,000 employees helping operate a nationwide network of more than 900
retail and fueling locations providing travelers with convenient stops
that offer a variety amenities and products to make road travel easier.
NATSO supports policies that incentivize fuel retailers
to invest in alternative fuels, and reward businesses that make those
investments. Because fuel retailers are fuel agnostic, we are
invaluable partners for policymakers whose objectives include
increasing consumption of alternative fuels. With the right alignment
of policy incentives, fuel retailers are best equipped to facilitate a
faster, more widespread and cost-effective transition to alternatives--
including electricity--in the coming years. The optimal way to lower
transportation fuels' carbon footprint is through policies that (i)
encourage businesses such as Pilot to offer more alternatives, and (ii)
make those alternatives more economically attractive to consumers.
As customers utilize electric vehicle (EV) charging
stations, they will expect a seamless and predictable experience not
unlike their current refueling experience, grounded in safe, accessible
amenities and affordable, competitive pricing. The market dynamics that
govern today's liquid fuel retail sector should be replicated to
facilitate greater EV adoption.
Achieving the Biden Administration's goal of adding
500,000 EV charging stations over the next decade will require a
partnership between utilities and fuel retailers, with support from
federal policymakers. If designed and implemented properly, such a
partnership would benefit all three stakeholder groups and ultimately
achieve environmental policy goals.
There are two components to this partnership: Power grid
restructuring to accommodate the significant demands that an EV
refueling network (and electrification of various other sectors such as
home heating) will place on the grid as the world transitions away from
fossil fuel; and the consumer fueling experience to provide customers a
safe, ubiquitous, reliable, affordable and competitive market for
recharging activities.
Federal incentive policies should harness the core
competencies of the utility and retail fuel sectors. Neither sector can
create a sustainable, nationwide EV charging network without the other,
especially in an expeditious, efficient and economical way. The utility
sector is best suited to perform the requisite generation development
and power grid restructuring work. Fuel retailers are best positioned
to own and operate EV charging stations (especially along Interstate
highway locations) and provide transportation energy--including
electricity--to consumers. Grant programs or other federal policies
designed to encourage investment in EV charging infrastructure and
supply equipment should be designed in a manner that is consistent with
each sector's respective area of expertise.
II. Introduction
Chairman DeFazio, Ranking Member Graves and distinguished members
of the House Transportation and Infrastructure Committee--Thank you for
the opportunity to testify at this important hearing examining the
business case for climate solutions. On behalf of the National
Association of Truckstop Operators (NATSO) and Pilot Flying J (Pilot)
where I am Chief Executive Officer, we are eager to work with you--and
with my fellow witnesses--to improve the environmental characteristics
of transportation energy in the United States.\1\
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\1\ In addition to NATSO, Pilot is also an active member of the
National Association of Convenience Stores (NACS) and the Society of
Independent Gasoline Marketers of America (SIGMA). Pilot and NATSO both
support NACS and SIGMA's joint submission to the Committee to be
inserted into the hearing record.
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The most expeditious, efficient and economical way to achieve
environmental advancements in transportation energy technology is
through market-oriented, consumer-focused policies that encourage
businesses such as Pilot to offer more alternatives and our customers
to purchase those alternatives. Fuel retailers are in the business of
providing competitively priced fuel and services to our customers.
Unlike refiners, power generators, and biofuels producers, fuel
retailers are agnostic to what the form of fuel is; our goal is to
provide customers ``what they want, when they want it, and at a price
they are willing to pay.'' Fuel retailers have demonstrated in recent
years that we are prepared to invest in any transportation fueling
technology that our customers desire.\2\ With the right alignment of
policy incentives, fuel retailers are well equipped to facilitate a
faster, more widespread and cost-effective transition to alternatives--
including electricity--in the coming years.
---------------------------------------------------------------------------
\2\ The amount of biofuels that Pilot sells today in response to
the Renewable Fuel Standard, and Pilot's and NATSO's aggressive support
of enhanced biofuel incentives demonstrates this.
---------------------------------------------------------------------------
Over the past decade, companies such as Pilot have invested
significant amounts of money to bring alternative fuels to market.
While we invested capital and took business risk, the transparent
framework laid out by policymakers such as yourselves essentially gave
us a framework and a line of sight on how we would generate a return on
our investment. As a result, we responded to your policy signals and
engaged in behavior that you have determined is beneficial for society
at large. We are eager to continue playing this important role as we
transition to the next generation of transportation energy.
I encourage the Committee to learn from the successes of the last
twenty years, and apply those lessons to any incentive programs that
you create for the next twenty years. Once an incentive and regulatory
regime is in place that enables travel center companies and other fuel
retailers to gain customers and market share by investing in electric
vehicle (EV) charging (or any other technology), the private sector
will bring those fuels to market more effectively and efficiently than
the government or any government-sponsored monopoly, because this is
our core-competency.
I discuss these issues in more detail below.
III. Background
A. NATSO and the Travel Center Industry
I am testifying today on behalf of NATSO, which is the premier
trade association representing travel centers, truckstops, and off-
highway fuel retailers. NATSO represents approximately 300 companies
that operate nearly 7,000 travel centers, as well as tens of thousands
of convenience stores. Our membership is comprised of both large,
multi-billion dollar travel center and convenience store chains, as
well as small, single-store operators. Given the breadth of its
membership, NATSO represents a substantial majority of retail sales of
diesel fuel in the United States.
The travel center and truckstop industry is a diverse,
sophisticated and evolving industry. These locations effectively
function as ``hotels'' for the over-the-road transportation industry--
because the number of hours that a driver can drive is limited, drivers
stop at our facilities to fuel, eat, shower, sleep, shop, cash checks,
etc. Almost every travel center location is in close proximity to an
Interstate highway and includes multiple profit centers, from motor
fuel sales and auto-repair and supply shops, to hotels, sit-down
restaurants, quick-service restaurants, food courts, and convenience
stores. Although the industry was once tailored solely to truck
drivers, it now caters to the entire interstate traveling public, as
well as the local population that lives in close proximity to a travel
center location. These travel centers are often located in relatively
remote areas and can at times be one of the only sources of food,
convenience and fueling for local residents.
Fuel retailers' sole objective is to sell legal products, in a
lawful way, to customers who want to buy them. As new fuels enter the
market, retailers want to be able to sell those fuels lawfully and with
minimal volatility, risk, and inconvenience for our customers. Our
industry is agnostic as to which fuels we sell to satisfy consumer
demand. Our bias is simply that we believe it is best for the American
consumer--and America's industrial position in the world marketplace--
to have reasonably low- and stable-priced energy.
All of NATSO's members, large and small, believe it is imperative
that policies designed to encourage investment in alternative fuels
must account for the fact that a majority of fuel retailers are small
businesses. Any approach to setting policy that does not ensure these
businesses are able to continue growing and creating jobs in the 21st
Century will be less successful than policies that enable the entire
retail fuels industry--large companies and small companies--to
participate.
In 2020, NATSO launched the National Highway Charging Collaborative
with ChargePoint, the world's largest EV charging network. The
collaborative has committed to leveraging $1 billion in capital to
deploy charging at more than 4,000 travel plazas and fuel stops that
serve highway travelers and rural communities. NATSO and ChargePoint
continue to work together to identify public and private funding
sources that may be available to support the expansion of EV charging
at strategically determined locations.
B. Pilot Flying J
Pilot started in 1958 with a single gas station in Gate City,
Virginia. Our founder, James A. Haslam II, wanted to build a business
to support his growing family and to provide people with the gas and
conveniences they need while on the road. In 1981, with 100 convenience
stores, Pilot opened its first full-size travel center in Corbin,
Kentucky.
Today, Pilot has more than 28,000 employees helping operate a vast,
nationwide network of more than 900 retail and fueling locations
providing travelers with convenient stops that offer an incredible
variety of amenities and products to make road travel easier. The Pilot
Flying J travel center network includes locations in 44 states and six
Canadian provinces with more than 630 restaurants and 35 Truck Care
service centers. Our One9 Fuel Network connects smaller fleets and
professional drivers to the services they need at a variety of fueling
locations.
We supply more than 11 billion gallons of fuel per year, including
approximately one billion gallons of biofuel (such as biodiesel,
renewable diesel, and ethanol). The carbon reduction from our biofuel
portfolio is equivalent to taking approximately one million cars ``off
the road'' each year. Our sourcing infrastructure, strong market
presence and expertise in energy and logistics optimizes the
distribution of not only diesel fuel and gasoline, but also biofuels
and diesel exhaust fluid (DEF). Over the last 10 years, Pilot has
significantly increased the amount of biofuels that we supply to our
customers based on the policy incentives of the Renewable Fuel Standard
(RFS) and other state policies such as California's Low-Carbon Fuel
Standard. Today, Pilot is one of the largest sellers of biofuels in the
country.
IV. Fuel Retailers Are Fuel-Agnostic
A. Competition and Retail Fuel Prices
The retail fuels market is the most transparent, competitive
commodities market in the United States. As every American knows,
customers can see gasoline retailers' price signs from blocks away, or
compare prices on cell phone applications. These signs represent more
than just pricing information; they are a value proposition to
potential customers, not only with respect to fuel but also food and
other convenience items and amenities that we offer at our facilities.
While the gasoline market is extraordinarily competitive--consumers
will often change where they buy gas to save just a few cents per
gallon--the retail diesel market is even more competitive and
transparent. Many travel centers' customers--truck drivers and trucking
fleets--are more savvy and price-conscious than typical American
motorists (fuel generally amounts to 20-30% of a motor carrier's
overall costs). Truck drivers are often aware of retail fuel prices
when they are 100 miles away from potential refueling sites, and fleet
managers use this information to direct drivers to specific retail
locations in order to purchase the lowest-priced fuel available. Every
time a truck refuels, it is on average 100 gallons, so even a penny
difference in the price of diesel per gallon amounts to a dollar. Given
the number of trucks that visit our stores every day, pennies add up
quickly. This imposes strong downward pressure on retail diesel prices.
The competitive nature of retail fuel markets compels retailers to
pass through cost savings to consumers in order to maintain and
increase their market share. It is in retailers' interests to increase
the amount of fuel that we sell to consumers. This is not only because
those sales directly drive profit opportunity, but also because such
sales drive in-store traffic, which is a source of profit for the
retailer.
Given the transparency and competitiveness of fuel pricing,
retailers are generally ``price takers'' for fuel, where the market
essentially sets the price. This means that we must compete on prices
of other items we sell, speed, and quality of service to retain our
customers and potentially gain market share. In addition, the
transparency of fuel markets exerts a constant downward pressure on
retail fuel prices, which benefits customers and forces successful
retailers to run efficient and cost competitive business platforms.
Notwithstanding these challenging dynamics, gas stations and travel
centers are located in every community and at highway exits throughout
the United States. One would be hard-pressed to identify any other
industry where there are multiple retailers selling the same, fungible
product on the same street corner. Yet, as we all know, that
circumstance is not uncommon in the retail fuel industry.
The American consumer is the ultimate beneficiary of this dynamic.
Policymakers and proponents of enhanced EV charging infrastructure
investment should be mindful of this, and harness the consumer-
oriented, efficient and innovative retail fuel industry to convert
environmental aspirations into consumer-accepted realities.
B. Retailers Respond to Consumer Demand; We Do Not Create It
Offering a product for sale does not guarantee consumers will
purchase it. Retailers cannot force consumers to buy a particular
product. Rather, retailers sell what consumers demand. In fact, the
primary trait of any successful retailer is an ability to identify what
his or her customers want to buy and then sell that product at a price
that is both attractive to the consumer while enabling the retailer to
earn a profit. In this respect, fuel retailers are quite effective
surrogates for consumers.
This is even more relevant when it comes to adoption of EVs or
other alternative fuels vehicles. In the world of liquid fueling it
takes a four-wheel customer two to three minutes to complete a fueling
experience (average fueling for cars and light commercial vehicles is
approximately 10 gallons at a time). In the world of EVs, however, this
will expand to 20 to 40 minutes for a charge, depending on the vehicle
and the type of charger available. This will place a lot of emphasis on
the type of experience that the consumer has at the retail fueling
station, because instead of a five minute ``stop,'' this will be a 30-
minute ``experience.''
Consumer satisfaction with this experience is essential to
widespread adoption of EVs. The retail fueling industry is focused on
competing on speed, customer service, and amenities. We will have every
incentive to make this customer experience the best it can be. The most
successful travel centers today have already embraced a changing
culture, shifting profit centers to food and beverage options, as well
as offering Wi-Fi, convenience shopping, and security. We are prepared
to continue to evolve with our customers. As new, faster charging
technologies come to market, for example, retailers will be forced to
invest in those technologies in order to compete.
If Congress wants to incentivize increased investment in and
consumption of more environmentally friendly alternative fuels, it must
keep in mind this fundamental market reality: motorists and truck
drivers do not purchase products because fuel retailers sell them; fuel
retailers sell products and services because our customers purchase
them.
C. Fuel Retailers are Eager to be Collaborative Partners in Bringing
Alternative Fuels to Market
NATSO strongly supports policies that incentivize fuel retailers to
invest in bringing alternative fuels that customers want to market, and
reward businesses that make those investments.
Because fuel retailers are fuel agnostic, we are invaluable
partners for policymakers whose objectives include increasing
consumption of alternative fuels. The market is extraordinarily capable
of efficiently and expeditiously bringing the lowest-cost fuels to the
end user. Fifteen years ago, Pilot blended and sold a nominal amount of
biofuel. In response to a variety of federal and state programs, today
we sell more than one billion gallons of biofuels each year (with ample
room for growth). The impact of our biofuels program is equivalent to
taking one million cars ``off the road'' every year from a carbon
emissions perspective.
Our experience at Pilot is similar to that of dozens of other
retail fuel companies throughout the United States. As an industry, we
have adapted in response to tax and other incentives to sell lower
carbon intensity alternatives to gasoline and diesel. The companies
that have done this successfully generally have been more profitable
than the companies that have not done this successfully. Although the
fuels of the future will be different than the fuels of the past, we
have made transitions before and we can do it again. Congress has at
its disposal a nimble, sophisticated industry that is able to adapt to
clear policy signals and provide customers the fuels that they want.
V. Utilities, Fuel Retailers, and EV Charging Infrastructure
The Biden Administration has established a goal of adding 500,000
EV charging stations over the next decade. This Committee has an
important role to play in making this goal a reality. The most
efficient, cost-effective path to achieving this is a partnership
between utilities and fuel retailers, with support from federal
policymakers. If designed and implemented properly, such a partnership
would benefit both utilities and fuel retailers and ultimately achieve
environmental policy goals while benefitting the American consumer.
A. Adoption of EVs
In order for the American consumer to transition to EVs, three
conditions need to be met:
(1) Vehicle Affordability--The vehicles need to be affordable (for
consumers and businesses), including maintenance costs and other
operating economics over the life of the vehicle.
(2) Vehicle Functionality and Reliability--The vehicles need to be
functionally capable for the relevant use cases and as reliable at
serving consumer needs as internal combustion engine vehicles.
(3) Refueling Network--There needs to be a robust network of
fueling stations so that vehicles are not limited in their use and
consumers feel comfortable and safe traveling throughout the nation
(much as they feel with the existing liquid refueling marketplace), and
eliminating the ``range anxiety'' concern associated with EVs.
Light-duty passenger EVs are on their way to satisfying the first
two criteria. The biggest impediment to more widespread adoption is the
lack of a robust nationwide refueling network, and the services and
amenities that consumers have come to expect alongside such a network
(e.g., foodservice facilities, restrooms, security, etc.). The ultimate
solution for heavy-duty vehicles (i.e., long-distance freight carriers)
is less clear, with various technologies from hydrogen fuel cells to
EVs competing to satisfy the conditions referred to above. A recent
survey found that the primary concerns potential EV customers had (with
over a 40% positive response) were vehicle costs, range and an
inadequate charging network.\3\
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\3\ See Utilities: The Unintended Bottleneck to MASS EV
Penetration, Stephen C. Byrd, Adam Jones et al, Morgan Stanley Research
(Oct. 28, 2020).
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The current shortfall with respect to a nationwide refueling
network on the light duty side can be overcome through a coordinated
partnership between utilities and fuel retailers with support from the
federal government.
B. Infrastructure Needs and Market Reforms Necessary for an EV
Refueling Network
Before addressing what the partnership between utilities and fuel
retailers should look like, one must understand the various changes
that need to be made to existing electricity infrastructure and EV
charging markets in order to provide a sufficient refueling network.
1. Power Grid Restructuring--An EV refueling network will place
significant demands on the electric grid as well as the generation
fleet. This will be in addition to pressures that the utility sector
faces from:
a. The fact that significant portions of the electricity system
are more than 50 years old and need replacement;
b. As the power sector transitions to zero carbon emissions for
the existing demand, they will have to build significant amounts of
renewable generation and work on grid reliability and storage issues;
c. Transitioning of activities currently fueled by fossil fuels
(such as home heating and industrial processes (boilers, etc.)) to
green power.
In addition to these demands on the utilities, achieving greater EV
adoption requires fundamental restructuring of and enhancements to the
nation's power grid and generation fleets. We will have to build more
renewable generation and storage assets. As charging stations are
installed throughout the country, generation, transmission and
distribution networks will need to be expanded in order to serve the
new network of charging stations.
2. Customer Fueling Experience--As customers utilize EV charging
stations, they will expect a seamless and predictable experience not
unlike their current refueling experience; one that is grounded in
safe, accessible amenities and affordable, competitive pricing. In
essence, the current market dynamics that govern the liquid fuel retail
sector should be replicated to facilitate a future where most consumers
drive vehicles that run on electricity. Although we anticipate constant
innovation and improvements, recharging an EV simply takes a lot longer
than refueling a car with gasoline (20-40 minutes versus a two to three
minute gasoline fill). This underscores the need for safety, services,
and other amenities at EV fueling locations. Failing to fulfill
consumers' expectations with respect to their refueling experience will
inevitably hinder their desire to shift to EVs.
C. Necessary Partnership Between Utilities and Fuel Retailers
A nationwide network of EV charging stations is well within our
grasp. All it takes is coherent framework of national policies that
harness the core competencies of the utility and retail fuel sectors.
Neither sector can create a sustainable, nationwide EV charging network
without the other; however, both sectors require substantial federal
incentives and unambiguous policy signals in order to justify the
necessary investments. The structure and implementation of these
policies is the key to creating a nationwide EV charging network.
i. Utility Sector
The utility sector is best suited to perform the requisite
generation development and power grid restructuring work given its
expertise in the infrastructure and its regulated monopoly structure.
Utilities that function under a ratebased framework can generally
afford to expand existing infrastructure to accommodate EV charging
stations. Utilities are well equipped to partner with charging station
owners and site hosts to (i) effectuate necessary generation and
transmission capacity upgrades and (ii) develop pricing structures to
accommodate the nascent market for retail sales of electricity as a
motor fuel. This plays to their core strengths of deploying long-term
capital and developing, operating and maintaining critical
infrastructure.
ii. Retail Fuel Sector
Fuel retailers are best positioned to own and operate EV charging
stations and provide transportation energy--including electricity--to
consumers.
Retailers are strategically located throughout the country where
refueling demand is greatest, operating in the most transparent,
competitive markets in the world and competing with one another on
price. It is not uncommon to see multiple fuel retailers at the same
intersection or exit on a highway competing on price, leading to price
transparency and lower prices for customers.
Due to the price transparency and fungibility of the commodities
they sell, fuel retailers are forced to compete on other non-price
attributes such as quality of service, cleanliness, security,
amenities, food, loyalty programs, and speed. As a result, they have a
keen understanding of consumer preferences and tendencies and have to
use this knowledge to make the customer fueling experience positive in
order to compete.
The retail fuel industry has a history of being very nimble and has
repeatedly responded to policy incentives for alternative fuels and
shifting customer preferences. This is a service-based, fuel agnostic
industry; we recognize that EV charging is the likely next step in the
evolution of what our customers want. We are best positioned to provide
EV charging services faster and cheaper than anyone else.
iii. Policy and Regulatory Environment
Until the number of EVs on the road reaches a critical mass, there
is an important role for federal policy to ``bridge the gap'' and make
private investments more viable while providing long-term consumer
benefits.\4\ This would be comparable to the experience from the power
generation sector, where numerous programs including investment tax
credits, portfolio standards, cap and trade systems, and grants have
fostered the development of renewable generation--especially wind and
solar--to get those technologies to a point of scale and economic
parity. The transportation sector needs to follow a similar path to
foster the development and the adoption of EVs by the customer.
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\4\ The current utilization of publicly available DC Fast charging
infrastructure remains low, at less than two hours per day per charger.
At these levels, the investment economics in the infrastructure lead to
negative returns. This is the classic ``chicken or egg'' problem, where
EV infrastructure will get built if there is sufficient demand; but
until then ``bridging'' is required, where government incentive
programs can facilitate the development of infrastructure until stand-
alone economics allow for private investment.
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These policies should be developed keeping three key principles in
mind:
Capital Efficiency--Leveraging core-competencies of the
constituencies in the value chain and incentivizing them to accelerate
development of the necessary infrastructure.
Speed to Market--Given the urgency of climate change,
speed is more important than perfection in market structure, hence
policy should incent those who can solve the problem most
expeditiously.
Alignment--Incentivizing existing fuel retailers to
adapt, and co-investing with them, will lead to a better outcome. If
companies are encouraged to put capital at risk, it will enable the
sector to champion the adoption of EV charging stations (as has
occurred with respect to biofuel incentives) as opposed to fighting it.
The federal government should develop policies to ensure a level
playing field, including incentives to incubate and foster development
that will provide long-term consumer benefits. Policy mechanisms worth
considering include:
Direct Investment and Tax Credits--Targeted grant and
rebate programs that improve the economics associated with power grid
restructuring (for the utility sector) and the installation of EV
charging stations and sale of electricity to EV users (for the retail
fuel sector) can expedite investments in a space where sufficient
consumer demand remains many years away. Similarly targeted tax credits
can complement direct federal investment.
Low Carbon Fuel Programs--Low carbon fuel programs can
make electricity more cost-competitive with other transportation fuels.
This has been very successful in the development of biodiesel and
renewable diesel through the RFS program. Critical to the development
of any such program will be science-based lifecycle analyses of
greenhouse gas emissions associated with different fuel technologies.
Reselling Electricity--Governments should permit all EV
charging station owners to generate a profit by selling electricity to
EV owners without being subject to regulation as a utility. This
allowance is essential if fuel retailers are to have any incentive to
invest in EV charging technology.
Uniform Pricing--There should be uniform pricing
measurements (e.g., dollars per kilowatt-hour) and requirements for
consumer-friendly price disclosures.
Conversely, policies that at first blush appear to be quick and
easy solutions may have the unintended consequence of undermining
either utilities' incentives to restructure the power grid or
retailers' incentive to invest in EV charging infrastructure. Examples
of these counterproductive policies include:
Forcing ratepayers to underwrite utilities' investment in
EV charging stations or to subsidize the retail cost of electricity
that charges electric vehicles--Where this occurs, the utilities are
operating in a guaranteed rate of return environment without putting
capital at risk. Retailers cannot compete with electric utilities in
this environment. While there is good reason for ratepayers to help
underwrite the cost of restructuring the power grid to accommodate EV
charging, there is no public policy rationale why utilities should be
given a leg up over private actors who wish to enter the market for
chargers that consumers use to power their vehicles. Utilities' pursuit
of this uncompetitive arrangement is the single greatest deterrent
today to fuel retailers' investing in EV charging infrastructure. It
also results in an extraordinarily regressive transfer of wealth from
all ratepayers (regardless of income) to utilities and EV drivers.\5\
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\5\ By way of background, investor owned utilities are granted a
monopoly by state regulatory commissions to provide utility service.
They are granted a monopoly over the provision of electricity, for
example, because it is economically inefficient for multiple companies
to build overlapping infrastructure in order to serve the same end-
users. In exchange for this loss of market freedom, the ``monopoly
compact'' provides the utility a guaranteed rate of return on
commission-approved investments. It further provides for the collection
of revenue to cover the utility's costs through approved rates.
As a general matter, utilities try to keep the cost of recovery of
capital investments within the ``rate class,'' meaning they attempt to
assign the cost to those that will benefit from the investment. From
time to time, utilities seek to go beyond this practice to accomplish
goals outside of the utility's basic mission. Most economists frown
upon such ``cost-shifting.'' When utilities utilize their monopoly
powers to insert themselves into the consumer-facing refueling space,
it is an example of ``cost-shifting.''
Rate based investments made by utilities are not subject to market
risk. Once approved by the state public utility commissions, these
investments provide a guaranteed rate of return for utility
shareholders. The return is independent of how the investment performs,
whether it becomes obsolete or not, or even if it is ever used. The
rate of return is guaranteed. Private companies competing for the same
customer have very little chance of effectively competing for business
against a utility that has no risk on capital deployed, and no
incentive to ensure superior performance.
Utilities deploy their capital investments for customers through
approved ``tariffs,'' which outline the terms and conditions to the
customer. By design, utility tariffs are ``one size fits all.'' This
keeps it simple when managing many customers, but it is also very
restrictive: once you're in, you're in. There is no getting out, and
they are very difficult to change after the fact.
By contrast, private market solutions are flexible and responsive
to customer needs. They have to be or a business will lose a customer.
Utilities do not have this concern. There is no competition, and there
is nowhere else for a customer to go. What's more, because tariffs do
not allow for changes to the base investment, they are effectively
static. In a rapidly developing and evolving marketplace, such as that
for EV charging infrastructure, using regulated tariffs to deploy
solutions virtually ensures the investment will be obsolete shortly
after it is deployed. There is no mechanism to upgrade the investment
to keep pace with the technology. It is comparable to buying a brand
new iPhone for every American in 2010, and then not enabling them to
buy a new one for at least a decade.
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Allowing EV charging infrastructure at Interstate rest
areas--Not only would this discourage off-highway fuel retailers from
investing in charging infrastructure, but it will signal to prospective
EV drivers that if they purchase an EV they will need to refuel at
often remote, poorly maintained state-run rest areas rather than the
off-highway travel centers and fuel retailers with all of the
amenities, security and services that drivers have come to expect.
Carving out an exception for EV charging to the longstanding ban on
commercial activities at rest areas is a simplistic, shortsighted and
counter-productive attempt to overcome a complex but eminently solvable
problem.
Permitting utilities that own EV charging stations to
charge other EV station owners higher rates for power than the internal
transfer price they charge their own operations--A prohibition on such
practices is the only way to provide a level playing field and ensure
competitive pricing for individual consumers.
The framework discussed above significantly enhances the
disciplined, expeditious and economic adoption of EVs with the utility
sector and retail fuel sector focusing on their core competencies to
deliver the solution. For maximum impact, grant programs or other
federal investment designed to encourage investment in EV charging
infrastructure and supply equipment should be dispersed in a manner
that is consistent with the principles and guardrails outlined above.
VI. Conclusion
As discussed in the foregoing testimony, it is clear to us that
there is an elegant and effective solution available to accelerate the
transition to electric vehicles and materially impact the level of
greenhouse gas emissions through a partnership between fuel retailers
and the utility sector (with assistance from the government) where:
Retailers focus on servicing customers, are aligned with
the adoption of EVs (as they will displace liquid fuels for many four-
wheel customers) and provide the incremental amenities required in
light of the 10- to 20-fold increase in fueling times. Retailer
participation is necessary for a seamless transition to EVs.
Utilities focus on the development of low carbon
generation and the development of transmission and distribution
infrastructure that makes clean electricity reliably available to the
retailers and other charging station owners to sell fuel to the end-use
customers.
Government should provide a ``bridge'' through incentive
mechanisms in the early states when the stand-alone economics do not
warrant investment; government should also provide a policy framework
that supports the provision of electricity and a level playing field
for the retailers to compete with one another for consumers.
Thank you for the opportunity to present testimony before you
today. On behalf of NATSO, I look forward to continuing to work with
Congress on these issues, and am happy to answer any questions you may
have.
Mr. DeFazio. Thank you, Mr. Konar.
Mr. Troy Rudd.
Mr. Rudd. Good morning, Chairman DeFazio, Ranking Member
Graves, and distinguished members of the committee.
Thank you for the opportunity to testify today.
My name is Troy Rudd. I am the chief executive officer of
AECOM. Our 47,000 professionals, including 19,000 U.S.
employees, deliver vital infrastructure projects worldwide that
are designed to uplift our communities, advance economic
growth, and improve health, safety, and overall quality of
life.
We are ranked number one globally for transportation
engineering and design and environmental services. By drawing
on our experience working on all continents and as proud
partner with the Federal Government, State and local government
agencies, and the private sector in the U.S., we hope to be a
resource to the committee on these topics, and we thank you for
the important work that you are doing.
The business case for climate solutions in transportation
is predicated on delivering the following outcomes, we believe,
for all Americans:
Creating jobs and, more importantly, lasting careers;
Accelerating innovation and mobility to meet the needs of
the future;
Enhancing the quality of life and the environment by
reducing emissions;
Ensuring infrastructure resiliency;
And stimulating economic growth that drives continued
prosperity.
In my testimony, I would like to focus on three areas where
Government leadership can help achieve the outcomes I have
described.
First is advancing electrification. AECOM has guided more
than 20 public agencies and many private-sector clients with
early adoption of electrification. In Los Angeles for their
Department of Transportation, we are delivering infrastructure
to support full fleet conversion to battery-electric buses.
In other cities, we have studied the impacts of
electrification on the grid, how transit agencies can best
convert to electric, and how they can leverage battery storage
of EVs even during grid outages.
These projects have demonstrated numerous benefits in terms
of emission reductions, especially in areas of vulnerable
populations; job creation, and resiliency.
We believe the Federal Government can play an important
leadership role in accelerating electrification efforts by
supporting the deployment of a reliable, accessible national
electric charging network in four ways:
Working with the private sector in setting design standards
to encourage interoperability of charging infrastructure;
Prioritizing pilot projects to convert large State,
municipal, and private-sector fleets;
Investing in other charging innovations, including dynamic
charging imbedded in roads and freeways;
And advancing the use of electric vehicles by electrifying
the U.S. Postal Service fleet and deploying regional and rural
charging infrastructure.
Second is building resilient infrastructure. Assuring more
resilient infrastructure is an important area of concern for
our clients and where Government can make a significant impact.
In 2020 alone, the U.S. faced 22 natural disaster events
with losses exceeding $1 billion each, the highest number ever
in a single year and the 6th consecutive with 10 or more
billion-dollar events.
We have conducted transportation climate risk analysis for
clients like BNSF Railway, the San Francisco Bay area
Metropolitan Transportation Commission, the New York City
Economic Development Corporation, and many more, all looking at
risk reduction strategies for climate events.
These analyses find that potential losses due to natural
disaster disruption can be offset by smaller adaptation
investments today.
AECOM supports reauthorization reforms that incentivize
project investments that take into account environmental,
social, and safety benefits beyond traditional life-cycle
costs, and criteria that prioritizes new investment decisions
with long-term preservation and performance of the assets in
mind.
Third is unlocking innovation. We also need Government to
act boldly in support of new modes of mobility. In our recent
fiscal year, AECOM worked on more than 29,000 projects for
transportation clients in the United States.
We found that projects which include more innovation are
often delayed by rigid commercial models, dated standards, and
jurisdictional conflicts. Visionary ideas in mobility, such as
high-speed rail, hyperloop, and more recently electric vertical
takeoff and landing vehicles or flying taxis, can all play a
role in improved mobility, congestion management, emissions
reduction, and new economic output.
For us, the bottom line is this: To promote innovative
modes of transportation, we need to remove some of the
obstacles that prevent investment in thinking beyond the status
quo.
In summary, pursuing climate solutions that advance
electrification, build a resilient infrastructure, and unlock
innovation can yield significant benefits. And what is more, it
plays to American ingenuity and a bipartisan spirit in
supporting transportation infrastructure; it keeps our country
moving forward.
I thank you again for the opportunity to speak to you today
and look forward to your questions.
[Mr. Rudd's prepared statement follows:]
Prepared Statement of Troy Rudd, Chief Executive Officer, AECOM
AECOM Introduction
Good morning Chairman DeFazio, Ranking Member Graves and
distinguished members of the committee.
Thank you for the opportunity to testify today on this important
issue. My name is Troy Rudd and I am the Chief Executive Officer of
AECOM.
Our 47,000 professionals--including 19,000 US-based employees--are
engineers, architects, scientists, software programmers, urban and
transportation planners, program and construction managers, and
economists who plan, design and deliver infrastructure.
Globally, we are consistently ranked No. 1 in transportation
engineering and design, and we are the No. 1 provider of environmental
services.\1\
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\1\ ``Engineering News--Record Top Lists.'' Engineering News Record
RSS, 2020, www.enr.com/toplists.
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AECOM has earned a reputation as an industry leader through the
critical and essential support we provide our clients, and because the
work and infrastructure solutions we deliver uplift communities,
advance economic growth and improve health, safety and overall quality
of life.
Today, our clients are focused on emerging challenges. At the
center of this is ESG, or environmental, social and governance
concerns. Our clients are acutely aware of the need to address and
prepare for change, whether it is electrification of transit systems,
creating access to mass transit for all, or preparing for natural
disasters that disrupt commerce and our way of living.
At AECOM, we are leading by example through our own practices,
including setting approved science-based targets in alignment with the
Paris Agreement. We are already exceeding our 2025 targets in reducing
Scope 1 and 2 emissions and are committed to being net-zero for Scopes
1, 2 and 3 by 2030.
We are a proud partner to the federal government, state and
municipal agencies, and the private sector, working together in both
urban centers and rural communities across America.
Drawing from our global experience working on every continent, we
hope to be a resource for this Committee as it seeks to consider
climate responsive and resilient solutions for new and rehabilitated
infrastructure and to unlock the full economic, environmental and
mobility benefits of a modern transportation system.
The work of this Committee is essential to keeping our nation
moving forward, and I thank all of the members of the Committee for
your efforts.
Focus of Testimony
Transportation is crucial in ensuring prosperity and well-being
today, tomorrow and long into the future.
As the Committee considers the right approach to create lasting
benefits, the business case for climate solutions in transportation is
predicated on delivering the following outcomes for all Americans:
Creating jobs and more importantly, lasting careers.
Accelerating innovation and giving rise to fresh thinking
in transportation so that our systems of mobility meet the needs of the
future.
Enhancing quality of life through the health benefits of
reduced emissions and social benefits through equitable access,
improved mobility and public safety.
Ensuring infrastructure resiliency, continuity and
extended lifecycles against both natural and human-made impacts.
Stimulating economic growth that drives prosperity.
Additionally, we believe we all share the goal of ensuring that the
benefits of a modern US transportation system elevate all communities,
especially disadvantaged and vulnerable populations and areas that have
been underserved in the past.
In my testimony today, I want to focus on three areas where
government leadership can help achieve the outcomes I have described.
Advancing Electrification
Building Resilient Infrastructure
Unlocking Innovation
Advancing Electrification
AECOM has guided more than 20 public-sector agencies and many
private-sector clients with early adoption of transportation
electrification.
In Los Angeles, AECOM is helping the city's Department of
Transportation convert their existing bus facilities to support a full
fleet conversion to battery electric buses. This fleet is anticipated
to be one of the earliest fully converted electric bus fleets in the
nation.
In Fresno, a primarily rural county in California, AECOM recently
completed a study on the impacts of electrification on the grid and how
the rural transit agencies can best convert to and leverage electric
vehicles to support resilience during events like grid outages.
For the Washington Metropolitan Area Transit Authority (WMATA) in
Washington, D.C., AECOM developed the strategy for an initial bus pilot
with a path forward to electrify the full fleet over two decades.
In partnership with our clients, we have identified numerous
potential benefits of advancing electrification, including emissions
reductions in disadvantaged communities, creation of new high-quality
jobs and careers, innovation and resiliency.
Based on real world examples, AECOM believes that significant
opportunities exist to revisit and strengthen existing federal
Department of Transportation (USDOT) programs that advance strategic
national deployment of a reliable and accessible national electric
charging network.
We also believe that such a charging network could provide a
potential future revenue stream to replace or supplement current user
fees that fund the maintenance and operation of roads and transit,
while fostering continuing investment in community priorities.
With nearly 30% of emissions in the US arising from the
transportation sector \2\, the connection between infrastructure and
public health, equity and justice are more urgent today than they have
ever been. The transportation sector is the greatest contributor to
these air pollutants and therefore presents the greatest opportunity to
deliver impactful solutions.
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\2\ ``Fast Facts on Transportation Greenhouse Gas Emissions.'' EPA,
Environmental Protection Agency, 29 July 2020, www.epa.gov/
greenvehicles/fast-facts-transportation-greenhouse-gas-emissions.
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AECOM is taking an active role in changing our transportation
infrastructure and how we use it to reduce emissions that have an
adverse impact on human health. Low-income communities are
disproportionately impacted given their increased exposure to
environmental hazards, particularly related to our highways and other
transportation facilities that reduce local air quality in those
communities.
A widespread transition to zero-emissions transportation
technologies could produce emissions reductions that by 2050, could
total up to $72 billion in avoided health harms including 6,300
premature deaths, 93,000 asthma attacks, and 416,000 lost workdays
annually. In addition, the benefits to our environment in the form of
avoided climate change impacts could surpass $113 billion in 2050 as
the transportation systems combust far less fuel and our power system
comes to rely on cleaner, non-combustion renewable energy.\3\
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\3\ ``Road to Clean Air--Electric Vehicle Report.'' Road to Clean
Air--Electric Vehicle Report / American Lung Association, American Lung
Association, www.lung.org/clean-air/electric-vehicle-report.
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Shifting to zero emissions vehicles can also create jobs--and even
new careers. In California, a 2020 study showed that transportation
electrification has created more than 275,000 direct EV industry jobs,
and that number is expected to rise. These jobs are typically higher
paying, with a salary average of over $91,000, which is well above the
state average of $68,500.\4\
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\4\ ``LAEDC Report: California and SoCal EV Industry Is Growing,
Giving Region Global Competitive Advantage.'' Los Angeles County
Economic Development Corporation, 8 Mar. 2020, laedc.org/2020/03/01/
laedc-ev-industry-report/.
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This Committee's work on the FAST Act, which created corridors with
alternative fueling and charging infrastructure, has directly
contributed to significant reduction in harmful mobile source emission
pollutants. It has also created an exciting new landscape in which our
public agency clients routinely engage our expertise in designing
systemwide EV charging infrastructure for new projects.
Recommendations:
To foster a more integrated and resilient approach to
transportation electrification, we encourage the Committee to consider
the following:
1. Working with the private sector in setting design standards to
encourage interoperability of charging infrastructure and advancing the
use of electric vehicles.
2. Prioritizing pilot projects to convert large state/municipal
and private sector fleets (as a precursor to broader community
transition).
3. Investing in charging innovations, including dynamic charging
embedded in roads and freeways.
4. Positioning the federal government as a leader in advancing the
use of electric vehicles by electrifying the US Postal Service fleet
and deploying regional and rural charging infrastructure.
Additionally, we suggest that deployment of new electrification
corridors could be enhanced by exploring new rules that facilitate the
use, transfer and disposition of under-optimized transportation rights-
of-way for EV charging transmission, broadband and telematics.
Building Resilient Infrastructure
Pursuing infrastructure improvements to minimize disruption risks,
and to extend the performance, safety and longevity of their transport
infrastructure are prevailing--and immediate--concerns of our public-
and private-sector clients.
This leads to the second area where government can accelerate the
benefits of climate solutions in transportation: building resilient
infrastructure.
Presently, AECOM is developing a flood mitigation study for BNSF
Railway to understand the potential of flood impacts with more
specificity, as well as a cost-benefit analysis of risk reduction
strategies. The intent of the project with BNSF Railway is to minimize
annual damage repairs and losses from out-of-service delays by
developing a flood risk prioritization tool and impact assessment.
In the San Francisco Bay area, AECOM carried out a resilience study
for the region's Metropolitan Transportation Commission to address
future flood impacts on the Bay Bridge touch down area and adjacent
disadvantaged communities.
As lead consultant for the Lower Manhattan Coastal Resiliency
Study, AECOM's comprehensive climate risk analysis of Lower Manhattan
included an economic analysis that accounted for potential
transportation disruption. Similar analyses, including a regional
economic assessment for Southeast Florida investment in resilience, all
share the same conclusions: that billions of dollars in potential
losses due to disruption posed by natural or man-made events can be
offset by smaller investments today.
In the case of Southeast Florida, daily tidal inundation under 2070
conditions could affect over 100 miles of major roadways, expose $53.6
billion worth of property value, affect 17,800 jobs, and cause $384
million in fiscal losses in a single year (2019 dollars).
Investing in regional adaptation solutions would have positive
returns on investment and provide job opportunities. The analysis
showed that every $1 invested in community-level adaptation would drive
$2 in economic benefits. Overall, community-level adaptation investment
could support 85,000 job-years (a job year is one year of work for one
person).\5\
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\5\ ``The Business Case for Resilience in Southeast Florida.'' ULI
Knowledge Platform, knowledge.uli.org/reports/research-reports/2020/
the-business-case-for-resilience-in-southeast-florida.
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In 2020, the United States experienced 22 natural disaster events
with losses exceeding $1 billion each--the most ever. It was also the
sixth consecutive year in which 10 or more billion-dollar disaster
events occurred in the US.\6\ Factoring in the human toll as well, we
believe the business case for investing in prioritizing and mitigating
the impacts on transportation is profound.
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\6\ Hurricane Costs, coast.noaa.gov/states/fast-facts/hurricane-
costs.html.
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Recommendations:
1. AECOM is supportive of reauthorization reforms that incorporate
methodologies that better incentivize investments in projects by taking
into account economic, environmental, social and safety benefits, in
addition to traditional life-cycle cost assessments.
2. A grant pilot program that offsets the additional cost of new
resilient infrastructure in a market that prioritizes low bids, would
incentivize and capitalize on the opportunity to build truly resilient
and long-lasting infrastructure, and realize a range of associated
benefits.
Unlocking Innovation
In our most recent fiscal year, AECOM worked on more than 29,000
projects for transportation clients in the United States.
Many innovative solutions do ultimately advance to project delivery
and operation. However, in some instances, the ability to advance
innovation is stymied as a result of commercial models, dated
standards, jurisdictional conflicts and more.
Advances in new modes of mobility can play a critical role in
congestion management, emissions reduction, economic output and
innovation.
AECOM has been supporting clients to explore visionary, new forms
of mobility ranging from High Speed Rail to Hyperloop, and more
recently Electric Vertical Take-Off and Landing (eVTOL).
AECOM led the environmental process to support federal decision
making for the high-speed rail project between Dallas and Houston.
The project would create direct employment and earnings of $14.5
billion during construction; direct and indirect annual employment and
earnings of $232 million for the State of Texas during operations; and
at full operations, reduce vehicles miles traveled by 1.35 billion.
AECOM has also conducted preliminary studies of hyperloop systems
to understand the economic and social benefits for both industry and
citizens. We have found opportunity to increase intermodal
connectivity, reduce vehicles miles traveled and provide environmental
benefits.
In addition to new modes of mobility, AECOM sees merit in
encouraging greater use of innovative mobility options to address first
mile and last mile needs and expand access to existing systems.
This is aligned with the growing equitable interest in supporting
populations across the country that cannot drive. These vulnerable
populations may be elderly, disabled or low-income workers that can
benefit significantly from intermodal solutions that may encompass ride
sharing for the last section of their trip.
Bronzeville, a neighborhood on the southside of Chicago, is a
perfect example of integrated planning and innovation.
AECOM is working with Commonwealth Edison and the Chicago Housing
Authority to address transportation, electrification and broader
community benefits such as jobs and education. AECOM is developing the
first renewable powered microgrid for the utility in this underserved
community. At the same time, energy saving programs are helping
residents and businesses reduce their utility bills. Additional
initiatives focus on job creation, technical training in support of
clean energy jobs leading to expertise that is transferable to projects
around the country and preparing low-income high school students for
STEM careers. My hope is this would change the beliefs and
opportunities for the future families of these students for
generations.
A first- and last-mile EV shuttle service is being provided to
three senior centers providing connection to Chicago Transit Authority
train and bus stops with the intent of adding similar shuttles to the
local academic community in partnership with the Illinois Institute of
Technology. Additionally, shared electric vehicles are being piloted in
the community.
Among other innovations, there are advances in construction
strategies and materials that can deliver real benefits to
sustainability, costs and resilience. Examples include low noise
asphalt (resulting in reduction of noise abatement structures), low
carbon concrete (emissions), cost effective use of artificial
intelligence to detect wildlife hazards rural areas and innovative use
of energy storage and stormwater management. A more adaptive regulatory
environment would help firms like AECOM to specify these solutions in
the design and accelerate their deployment.
Recommendations:
1. We believe opportunities exist to address these challenges
through changes to USDOT programs, revisions to contracting rules and
greater flexibility in standards to accelerate the adoption of
innovation in transportation.
2. We believe the fundamental goal should be to encourage agencies
at the state and local level to adopt alternative investment
methodologies that foster innovation and engagement of the private
sector.
Summary and Close
AECOM stands ready to assist this Committee and our public and
private clients throughout the US to adopt and operationalize a
paradigm shift in infrastructure.
To build projects that will last for generations, this Committee
has an excellent opportunity to alter the project investment paradigm,
one that that will foster incubation at all levels of government,
champion new design and performance methodologies that harness cutting-
edge technologies, and inspire and incentivize our clients to build
next generation, long-lasting infrastructure.
Historically, the infrastructure industry has been a powerful jobs
creator. It has also helped soften the impact of the coronavirus
pandemic by engineering solutions to social distancing and virus
detection, aid policymakers in planning for the future, and designing
for a more equitable and resilient tomorrow.
The incorporation of climate solutions that help (i) Advance
Electrification, (ii) Build Resilient Infrastructure and (iii) Unlock
Innovation will yield significant benefits across America.
As I noted in my introduction, the business case for these climate
solutions is strong in terms of (1) creating jobs and lasting careers,
(2) accelerating innovation, (3) enhancing quality of life, (4)
ensuring resiliency in our infrastructure for future generations, and
(5) stimulating economic growth that drives prosperity.
Thank you again for the opportunity to testify.
I look forward to your questions and to working with the Committee
to craft solutions to these pressing challenges.
Mr. DeFazio. Thank you, Mr. Rudd.
Mr. Rafael Santana.
Mr. Santana. Chairman DeFazio, Ranking Member Graves, and
committee members, I appreciate the opportunity to testify on
the business case for climate solutions. This is an important
topic for the future of the rail industry and the future of our
Nation.
My name is Rafael Santana. I am the president and CEO of
Wabtec Corporation, a global leader in rail technologies for
over 150 years.
We are based in Pittsburgh. Wabtec has over 27,000
employees in more than 50 countries. We are the largest freight
locomotive manufacturer.
We move more than 20 percent of the world's freight, and we
are a proud American company at the forefront of freight rail
innovation.
Wabtec embraces Congress' commitment to clean energy and
the creation of jobs. We believe the freight rail sector is in
a unique position to accelerate these efforts, and Wabtec is
prepared to contribute its resources to help meet the clean
energy challenge.
In that regard, I want to introduce you to a bold vision
for transforming the future of freight rail known as Freight
2030. This is a public-private partnership that will accelerate
our Nation towards a better and a cleaner tomorrow.
Joining Wabtec in this vision, we have Carnegie Mellon
University, the Nation's leading university in artificial
intelligence and robotics, and we have Genesee & Wyoming, the
Nation's largest short line and regional freight railroad.
Rail is, without question, the most sustainable, the
safest, and the most efficient way to move both people and
goods over land. But we cannot stop there.
At Wabtec, we innovate. We help our customers leverage rail
to increase efficiency, to reduce costs, and to reduce their
carbon footprint.
A great example is Trip Optimizer. This is a cruise control
technology for trains that has saved over 400 million gallons
of fuel and has reduced CO2 by half a million tons per year.
Wabtec is also leading the way toward clean freight with
the world's first heavy-haul, 100 percent battery-electric
locomotive. This is called FLXdrive. This locomotive is being
tested in California with BNSF and with the California Air
Resources Board.
We are also leading the way in rail utilization and safety,
having implemented Positive Train Control systems with both
Class I railroads and also with short lines. This is a safety
overlay that covers all mainline tracks in the U.S.
Wabtec strongly believes that by increasing capacity and
better utilizing our world-class freight rail network, coupled
with developing zero-emission locomotives, we can reduce
greenhouse gas emissions by up to 120 million tons per year.
We can also create up to 250,000 jobs.
For context, 120 million tons of greenhouse gases is the
equivalent of 26 million passenger cars.
The time for rail is now, and Freight 2030 is the critical
path to our Nation's continued success. At the heart of Freight
2030, we have three core principles.
The first one is decarbonization, and we are going to get
there through zero-emission battery and hydrogen hybrid
locomotives.
The second piece is technology. We are going to use
technology that will increase freight rail utilization and will
improve safety.
Third is the creation of direct, indirect, and induced
jobs, roughly 80 percent of which will be blue-collar jobs.
This vision would also enable better data sharing and
increased visibility to the movement of goods from ports to
rail to yards.
We propose to create the Freight Rail Innovation Institute
at Carnegie Mellon, the first of its kind, to drive action
towards significantly increasing freight rail utilization and
decarbonization, while spurring jobs and economic growth.
This institute will allow the U.S. to lead ahead of others,
including China, including Europe, in zero-emission solutions
for rail, as well as become an exporter for the world.
Wabtec and our partners, we are prepared to invest in the
Freight Rail Innovation Institute alongside the U.S.
Government, and ask for your support in creating a clean energy
future.
Thank you for the opportunity to testify, and I welcome any
questions you may have.
[Mr. Santana's prepared statement follows:]
Prepared Statement of Rafael Santana, President and Chief Executive
Officer, Wabtec Corporation
Introduction
Chairman DeFazio, Ranking Member Graves, and members of the
Committee, I appreciate the opportunity to testify on the critical
topic of transportation and climate change. My name is Rafael Santana,
and I am the President and CEO of Wabtec Corporation--a global leader
in rail technologies for over 150 years.
President Biden and Congress have pledged to build a clean energy
economy. The ``Build Back Better'' plan is committed to address climate
change, significantly reduce carbon emissions and spur job growth. The
transportation sector is a critical piece of building back better.
Across the globe, transportation accounts for nearly one quarter of all
greenhouse gas (GHG) emissions.\1\ Current trends indicate that freight
and passenger rail activity will more than double by 2050.\2\
Therefore, the United States will require even cleaner and more energy-
efficient transportation solutions if it is to continue being a leader
in addressing climate change.
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\1\ The World Resources Institute
\2\ IEA (2019), The Future of Rail: Opportunities for energy and
the environment, IEA, Paris, https://doi.org/10.1787/9789264312821-en.
The freight rail sector, in addition to being the most sustainable
way to move people and goods over land, is in a unique position to
contribute to this endeavor. By increasing utilization of our world-
class freight rail network and developing zero-emission locomotives;
together, we can reduce emissions by up to 120 million tons of GHG per
year.\3\ This is the equivalent of removing 26 million cars from the
road or planting nearly 2 billion trees.\4\ By pursuing increased rail
utilization and zero-emission locomotives, we can create up to 250,000
jobs, all while increasing safety.
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\3\ Wabtec Internal Documents
\4\ https://www.epa.gov/energy/greenhouse-gas-equivalencies-
calculator
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With this mind, I'm delighted to have the opportunity to introduce
you to the ``Freight 2030'' vision for transforming the rail industry.
Within the next nine years, we are committed to developing the
technology to enable the expansion of freight rail utilization,
accelerating the reduction of GHG emissions with battery and hydrogen-
powered locomotives, and enabling safer trains through a public-private
partnership between industry, academia, and the federal government.
Partnering on the ``Freight 2030'' vision for the future are
Carnegie Mellon University (CMU), the nation's leading university in
artificial intelligence and robotics, Genesee & Wyoming (G&W), the
nation's largest short line and regional freight railroad, and Wabtec.
By working together, we can establish a research institute committed to
developing and deploying advanced rail propulsion, logistics, and
safety technologies.
Wabtec Corporation
Wabtec was founded in 1869 by George Westinghouse and, today, is a
leader in freight rail, manufacturing advanced locomotives, freight
rail parts and components, as well as advanced network logistics and
digital solutions. In addition to our freight rail division, we also
develop transit products and have components or parts on virtually
every transit train globally.
Based in Pittsburgh, Wabtec is a proud American company at the
forefront of freight rail innovation with over 27,000 employees in more
than 50 countries. The company is the largest freight locomotive
manufacturer, moving more than 20% of the world's freight.
At Wabtec, we innovate and help our customers leverage rail to
increase efficiency, reduce costs, and their carbon footprint. We are
currently leading the way in developing battery-electric locomotives
and other low-to-zero emissions technologies. BSNF Railway and
California Air Resources Board are testing our newly developed FLXdrive
locomotive in revenue service today on track between Barstow and
Stockton, California. The FLXdrive is the world's first heavy-haul,
100-percent battery-electric locomotive (BEL).\5\ The locomotive
features an overall train energy management system powering
approximately 20,000 battery cells and delivering 2.4 MWhrs of energy.
To date, FLXdrive has run over 10,000 miles and delivered an average of
10% reduction in fuel consumption across the train. This is the
equivalent of 5,000 gallons of diesel fuel saved and approximately 50
tons of CO2 emissions reduced. At 6 MWhrs, we have an opportunity to
further reduce fuel consumption and emissions by up to 30%.\6\
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\5\ https://www.wabteccorp.com/sustainability-report
\6\ https://www.wabteccorp.com/sustainability-report
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Wabtec also leads the way in rail utilization, safety and logistics
optimization technology. In 2008, Congress passed the Rail Safety
Improvement Act, which mandated the implementation of Positive Train
Control (PTC) systems on most of America's railroads.\7\ PTC systems
are designed to prevent train-to-train collisions, over-speed
derailments, unauthorized movements into established work zones, and
accidents that occur if trains are routed down an incorrect track.
Since 2008, Wabtec has supplied over 24,000 locomotives with PTC
computers and software.\8\ Over the past decade, PTC technology has
revolutionized rail safety in the US and helped make the rail sector
more efficient and effective. Wabtec is currently developing advanced
PTC systems that will enable virtual and moving block signaling instead
of the traditional fixed block signaling used today.
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\7\ https://railroads.dot.gov/train-control/ptc/positive-train-
control-ptc
\8\ https://www.wabteccorp.com/about-wabtec
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These new, advanced PTC systems will significantly increase the
efficiency of our railways by reducing headways between trains while
maintaining stringent safety standards. Similarly, our Trip Optimizer
and Movement Planner solutions optimize both locomotive fuel efficiency
and real-time network planning, respectively. This enables freight to
move more efficiently using existing rail networks, thereby reducing
energy use, emissions, and waste. As a reference, our Trip Optimizer
solution is already installed on over 11,000 locomotives globally,
saving 400 million gallons of fuel.\9\ It also reduced carbon emissions
by over 500,000 tons per year--the equivalent of removing 100,000 cars
from the road.
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\9\ https://www.wabteccorp.com/sustainability-report
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Following the great American tradition of leadership in innovation
and industry, Wabtec is on the cutting edge of freight rail technology.
We have the experience and know-how to lead rail's charge into a
cleaner and more sustainable future.
Freight Rail's Role in the Clean Energy Economy
The United States has the most extensive freight rail
infrastructure network in the world. Our 140,000 miles of track are
unparalleled--long enough to stretch around the globe over five
times.\10\ This allows quick and efficient shipment of goods across our
nation.
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\10\ https://www.aar.org/wp-content/uploads/2020/08/AAR-Railroad-
101-Freight-Railroads-Fact-Sheet.pdf
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Freight rail is a critical component of today's clean energy
economy. Rail can more efficiently and cleanly deliver goods than any
other mode of transportation.
While freight rail leads the transportation sector in reducing
emissions today, there are many more opportunities before us. For
example, current trends indicate that freight activity in America will
more than double in the next thirty years, with freight tonnage
increasing significantly.\11\ The U.S. will require cleaner, more
energy-efficient transportation solutions. Technology adoption across
rail will be an indispensable driver for the modernization of the
entire transportation system, making it cleaner, safer, and more
efficient, and reliable.
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\11\ https://data.bts.gov/stories/s/Moving-Goods-in-the-United-
States/bcyt-rqmu
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Trucking is an essential component of the freight shipping network,
and rail must work hand-in-hand with our nation's truckers to reduce
emissions, increase efficiency and safety, and more economically move
goods from coast-to-coast. The U.S. will always rely on trucking to
move goods, especially in first-and-last mile situations where goods
are moved to warehouses, businesses, or homes. However, when moving
goods longer distances, trucking is less efficient than freight rail.
Compared to trucking, rail produces five times less carbon emissions
per ton-mile.\12\
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\12\ Average from AAR Climate Change Report and EDF Green Freight
Handbook
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Weight of Shipments by Transportation Mode
Tons (millions)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
With climate change as one of our nation's greatest challenges, the
time to shift to rail is now. For example, if we increased utilization
of rail by 50% for the movement of freight over 500 miles, we can
reduce 60 million tons of GHG emissions per year.\13\ That is like
taking 13 million cars off the road.\14\ If the U.S. wants to lead the
world in decarbonizing the transportation sector, it should look no
further than freight rail technologies and innovation.
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\13\ Estimated based on AAR Report: The Positive Environmental
Effects of Increased Freight by Rail Movements in America, at https://
www.aar.org/data/the-positive-environmental-effects-of-increased-
freight-by-rail-movements-in-america/aar-positive-environmental-
effects-of-freight-rail-white-paper-62020/
\14\ https://www.epa.gov/energy/greenhouse-gas-equivalencies-
calculator
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Freight 2030
Our plan to accelerate the future of freight rail, the ``Freight
2030'' vision, is to expand freight rail utilization, accelerate the
reduction of GHG emissions, reduce road congestion and traffic, and
make transportation in the U.S. safer for everyone. The ``Freight
2030'' vision seeks to reinvent U.S. freight rail by developing the
technology to accelerate:
Decarbonization through the creation of zero-emission
locomotives.
Technology that enables a 50% increase in freight rail
utilization and up to 50% reduction in safety incidents, while at the
same time making rail faster and more efficient.
Job creation that enables 250,000 direct, indirect and
induced jobs spurred by the transportation and manufacturing sectors.
Wabtec's goal is to develop the next generation of zero-emission
locomotives. Wabtec has a clear path to power new locomotives--and
repower existing locomotives--with batteries, hydrogen internal
combustion engines, and hydrogen fuel cells. As discussed earlier, we
are testing and deploying our battery-electric locomotive and plan to
commercialize it in the near future. We are currently researching
applicability of battery-hybrid and hydrogen combustion engines and
hope to begin development and testing of those technologies quickly.
These new technologies need to be retrofittable to the current fleet of
locomotives. Each diesel-powered locomotive converted to alternative
energy sources can save up to 3,000 tons of CO2 per year.\15\
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\15\ Based on 300k gallons of fuel consumed per locomotive per year
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Increasing rail utilization will reduce emissions across the board.
Studies have highlighted that while improvement to infrastructure is
important, there is significant opportunity to extract more useful
capacity from the existing network.\16\ Advancements to current
signaling systems and other utilization technologies can increase
network capacity by 50%. Through next-gen technology such as dynamic
network and on-demand logistics planning, we can optimize heavy haul
operations, increase yard capacity and cargo visibility, and grow
``first & last'' mile operations.
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\16\ ``National Rail Freight Infrastructure Capacity and Investment
Study. Presented to Railroad Energy Transportation Advisory Committee''
by Cambridge Systematics; Sept 2008; U.S. Freight System Modernization
Necessary to Reduce Bottlenecks, Improve Security; RAND Corporation.
Jun 2009.
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As a key partner to the railroad industry, safety is at the core of
all that we do at Wabtec and will be the number one focus of our
``Freight 2030'' vision. Already, rail is safer than other modes of
transport. For instance, there are 22 times fewer deaths and injuries
per year in rail than trucking.\17\ We estimate an increase in freight
rail utilization will result in 14,000 fewer injuries or deaths per
year.\18\
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\17\ Wabtec calculation based on: Bts.gov, injuryfacts.nsc.org,
nhtsa.dot.gov
\18\ Wabtec calculation based on: Federal Motor Carrier Safety
Administration--Large Truck and Bus Crash Facts 2018 and Bureau of
Transportation Statistics
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Finally, ``Freight 2030'' is a bold vision for job creation. Within
the next three years, we estimate this initiative will create over
30,000 new jobs. In the longer term, the initiative will create 250,000
new jobs. By increasing the amount of freight trains on the railroad,
we increase the need for yard, maintenance and manufacturing workers.
Therefore, we believe 80% of the jobs created through our program will
be blue collar jobs. This is alongside the jobs created to construct a
research institute, as well as build and maintain hydrogen fueling
pipelines and stations around the country.
The Freight Rail Innovation Institute
To accelerate the future of rail within the next decade and at
scale, we ask Congress to collaborate with Wabtec, CMU and G&W to
create, coordinate, and co-fund the Freight Rail Innovation Institute
(FRII). This will send a message to the entire transportation industry
that together, the private and public sectors can help achieve the
nation's vision of a competitive and sustainable American freight
transportation network.
Moreover, this collaboration will create and fund technology
research, demonstration, and commercialization initiatives that drive
measurable action toward significantly increasing freight rail
utilization and decarbonization of the rail network, while spurring
hundreds of thousands of jobs. To that end, Wabtec proposes
establishing centers of excellence in Green Power, Advanced Network
Logistics, and Capacity at the FRII to bring rail into a new age of
optimization and lead the world in freight rail innovation.
A public-private partnership will create new manufacturing
capabilities to supply ``Made in America'' technologies, such as zero
emission locomotives powered by battery and hydrogen fuel cells, as
well as on-site hydrogen generation solutions. In addition, it will
further develop research priorities, conduct research, development, and
testing, and foster collaboration and action between stakeholders to
ensure the U.S. maintains its competitive edge and global leadership in
creating the freight rail network of the future.
Conclusion
Maximizing the freight rail network and shifting to clean power
requires upfront intellectual firepower and capital investment. Wabtec
and our partners are prepared to invest in the Freight Rail Innovation
Institute alongside the U.S. government and ask for your support in
creating a clean energy future together. Let's start building America's
freight rail of tomorrow today.
I greatly appreciate the Committee's attention on this matter.
Thank you again for the opportunity to testify, and I look forward to
answering any questions members may have.
Mr. DeFazio. Thank you, Mr. Santana.
I now recognize Representative Cohen, who would like to
briefly introduce our next witness.
Mr. Cohen. Thank you, Mr. Chairman.
Memphis is kind of a one-name town. There is Elvis, there
is Cybill, and there is Fred. He has been responsible for so
much in Memphis, and it would not be the great 21st-century
city without him.
And his employees have done a great job in delivering the
vaccine to America and making it safer from this pandemic.
FedEx has been the number one carrier, along with UPS--I
guess it may be a tie there--for helping get that vaccine to
people around the country.
There is not a cultural institution or athletic group that
does not have a FedEx employee involved in a major way.
Employees of FedEx contribute to our communities in a
phenomenal fashion.
And FedEx is ahead of the game in every single area. Just
as it was ahead of the game in bringing aircargo business as it
has to the world, it has been ahead in climate and innovative
activities with electric vehicles and forward thinking.
Just this past week, FedEx became one of 50 countries to
sign the climate challenge to reduce and have zero net carbon
emissions by 2040, 10 years ahead of the Paris Accords.
It is my honor to represent the city, and FedEx has made a
great city in America.
Mr. Fred Smith.
Mr. Smith. Chairman DeFazio, Ranking Member Graves, and
members of the committee, thank you for inviting me to testify
today on the business case for climate solutions.
I would like to also thank Congressman Cohen for that kind
introduction. He represents Tennessee's Ninth Congressional
District, home of FedEx's headquarters where we have over
30,000 team members employed.
Addressing climate change is bigger than one business, and
this committee recognizes for the United States to remain a
global economic leader, we must work together on sound policy
and innovative solutions for our planet. The health of our
planet is at stake.
FedEx has a long history of keeping sustainability at the
center of our business, and we know the future of our
operations is tied to the future of our environment.
Building on that longstanding commitment, earlier this
month, as Congressman Cohen mentioned, FedEx announced an
enterprisewide ambitious new goal to achieve carbon-neutral
operations by 2040.
As part of this mission, we will accelerate progress
already underway in the following areas:
Electrification of our global parcel pickup and delivery
vehicle fleet;
Sustainable customer solutions;
Sustainable fuels;
Modernization of our aircraft;
And continuing fuel conservation endeavors.
Alongside the many key steps outlined in my written
testimony, by 2040 the entire FedEx parcel pickup and delivery
fleet will be zero-emissions electric vehicles.
FedEx has also announced substantial support to help
establish the Yale Center for Natural Carbon Capture, to
accelerate research into methods of carbon sequestration and
scale.
The center's first focus will be helping to develop
strategies that offset greenhouse gas emissions equivalent to
current emissions produced by aircraft. From there, the Yale
Center will address additional global sources of emissions,
publishing its findings so other businesses, industries, and
governments can benefit.
In addition to our work with Yale, FedEx has a number of
other future-focused sustainability strategies underway. Roxo,
the all-electric same-day bot, and our drone delivery pilot
program operated by Wing Aviation, are just two of the
innovative, environmentally friendly, same-day, last-mile
delivery solutions we are working on.
As seen during the pandemic, the U.S. trucking industry is
a critical link in maintaining supply chains, yet remains stuck
with aging infrastructure and dated Federal equipment standards
for twin 28-foot trailers, unchanged since 1982.
One step with immediate environmental benefits would be a
modest 5-foot increase to twin 28-foot trailers, which would
reduce annual fuel use by 225 million gallons per year at no
cost to road safety or to the taxpayers.
Last year, this committee and this Chamber drafted an
infrastructure package that incorporated important climate
solutions. This included incentivizing commercial electric
vehicles and zero-emission vehicle charging infrastructure, as
well as advancing research into low emissions and alternative
aviation fuel.
There was also significant work done to modernize the
electric grid for more renewable energy and prepare it for the
large-scale deployment of electric vehicles.
This is a good start, indeed, but more needs to be done,
including modernizing our air traffic control system and
updating air traffic management policies and guidance.
Our ambitious agenda at FedEx shows that businesses can and
will lead in creating a sustainable future for us all. Our
company has been at this for a very long time, however, and we
cannot do it alone.
Government, industry stakeholders, and academia must
continue to work together on policies and regulations to help
ensure the U.S. maintains its status as a global leader in
climate change policy, while also stimulating economic growth
and job development.
These are just a few of the priorities we must focus on to
address our global climate challenges. I look forward to
discussing those shared goals with you today.
Thank you for inviting me.
[Mr. Smith's prepared statement follows:]
Prepared Statement of Frederick W. Smith, Chairman and Chief Executive
Officer, FedEx Corporation
Chairman DeFazio, Ranking Member Graves and members of the
committee, thank you for inviting me to testify before the committee
today on ``The Business Case for Climate Solutions.'' Addressing
climate change is bigger than one business, and this committee
recognizes for the United States to remain a global economic leader we
must work together on responsible policy and innovative solutions for
the health of our planet.
For FedEx, sustainability is a relatively simple concept: to
connect the world responsibly and resourcefully. FedEx has a long
history of keeping sustainability at the center of our business, and we
know the future of our operations is tied to the future of our
environment. Building on that longstanding commitment, earlier this
month FedEx announced an enterprise-wide ambitious new goal to achieve
carbon-neutral operations globally by 2040, which I look forward to
discussing in detail today.
FedEx Corporation
FedEx has grown tremendously since its first night of operations in
April of 1973. FedEx Corporation now consists of six independent
operating companies that work collaboratively to provide our customers
and communities we serve with innovative business solutions to meet
their emerging needs. We have a fleet of over 680 aircraft including
the new Boeing 777 freighter model, one of the most efficient freighter
aircraft in the world. We serve over 650 airports in the U.S. and
abroad. On the ground, we operate 200,000 motorized vehicles. Across
all FedEx operating companies, we cover over 2.5 billion highway miles
per year. Our fleet also includes the latest in all-electric and hybrid
trucks, some of which traverse the streets of Washington, D.C., each
day. Together, our 600,000 team members operate one of the largest
logistics and transportation companies in the world, serving more than
220 countries and territories.
Our global FedEx Express integrated air-ground network
offers time-definite air express shipping for parcels and freight
shipping and links the American economy to more than 99 percent of the
world's GDP. As one illustration of the power of this network, since
January 2020, FedEx Express has transported nearly 80 kilotons of
personal protective equipment--including more than 2 billion masks--
around the world as part of our response to the COVID-19 pandemic. We
are now shipping approved COVID-19 vaccines, related ingredients, and
supplies throughout the U.S., Canada, and to more than 20 other
countries around the world. We are prepared to ship vaccines to more
than 220 countries and territories for as long as necessary to help
eradicate COVID-19.
Our FedEx Ground and FedEx Freight networks use both road
and rail to transport products from business-to-business as well as
business-to-consumer services, which have proven to be essential
services as communities work to combat the spread of COVID-19.
Our FedEx Logistics business provides a suite of supply
chain solutions, including heavy air and ocean cargo services, customs
brokerage, and trade management tools and data.
Connecting people with goods, services, ideas, and technologies
creates opportunities that fuel innovation, energize businesses and
lift communities to higher standards of living. At FedEx, we believe
that a connected world is a better world, and that belief guides
everything we do. And we recognize that with the privilege of
connecting the world also comes the responsibility of being good
stewards of the planet.
Reduce, Replace, Revolutionize
The topic of today's hearing, climate solutions, has been a central
focus at FedEx for a very long time. For example, nearly 20 years ago,
FedEx was the first delivery company to use hybrid vehicles for pickup
and delivery. In 2006, I joined with General P.X. Kelley (Ret.), 28th
Commandant of the U.S. Marine Corps, and a group of business and former
military leaders to form the Energy Security Leadership Council. Later
that year, we released a plan to improve U.S. energy security as well
as crucial follow-up reports and policy briefs. The council continues
to support mitigating oil dependence through fuel efficiency standards,
increased domestic oil production, and deployment of alternatives in
transportation through technologies such as electric vehicles. That
plan was instrumental in advancing the FedEx sustainability strategy:
Reduce, Replace, Revolutionize.
This three-pronged approach has the following goals:
Specific to Reduce, this includes minimizing or
eliminating the effects of our activities and operations.
For Replace, we apply the right solutions in the right
applications across our business.
And within Revolutionize, we are continuously discovering
and adopting cutting-edge technologies and solutions to drive impact.
Since 2012, this strategy has helped us save 1.43 billion gallons
of jet fuel and avoid over 13.5 million metric tons of CO2. In fiscal
year 2019, we avoided more than 3 million metric tons of CO2 emissions
as a result of our enterprise-wide fuel and energy saving initiatives.
That's equivalent to the carbon sequestered by more than 4 million
acres of U.S. forests in one year. Over a 10-year period from 2009 to
2019 these efforts contributed to an approximately 40% reduction in CO2
emissions intensity on a revenue basis across the enterprise while
package volume increased 99%.
Building on this longstanding commitment to sustainability, as I
mentioned, earlier this month, we set a goal to achieve carbon
neutrality for our global operations by 2040. To get there, we will
invest in solutions and make necessary changes across our enterprise--
from our packaging to our fleet and more--to deliver lasting benefits
for our industry and our planet.
Carbon Neutral by 2040
To help us achieve this goal, FedEx is designating more than $2
billion of initial investment in three key areas: vehicle
electrification, sustainable energy, and carbon sequestration, as
outlined below.
Vehicle Electrification: By 2040, the entire FedEx parcel
pickup and delivery (PUD) fleet will be zero-emission electric
vehicles. This will be accomplished through phased programs to replace
existing vehicles. For example, by 2025, 50% of FedEx Express global
PUD vehicle purchases will be electric, rising to 100% of all purchases
by 2030. Our work with General Motors will be key in helping us achieve
this objective. As the first customer of their new commercial electric
vehicle brand, BrightDrop, we look forward to taking delivery of 500
vehicles this year alone.
Sustainable Customer Solutions: FedEx will work with
customers to offer end-to-end sustainability options for their supply
chains through carbon-neutral shipping offerings and sustainable
packaging solutions.
Sustainable Fuels (SAFs): FedEx will continue to work
with industry, government agencies, academia, and alternative fuel
suppliers to seek development and invest in cost-effective alternative
fuels to reduce aircraft and vehicle emissions. These investments build
on our work in 2018 with Boeing, when FedEx supplied a B777 to Boeing
for the 2018 ecoDemonstrator program, testing 35 separate technologies,
some of which focused on achieving greater fuel savings. In addition,
the aircraft flew on 100 percent biofuel. More investment and
development are needed if we are to see the benefits of SAFs. Given the
consumption rate of conventional aviation fuel as demonstrated in the
attached chart, more investment and development are needed if we are to
see the true benefits of SAFs.
Fuel Conservation and Aircraft Modernization: FedEx will
build on its successful FedEx Fuel Sense initiatives designed to reduce
fuel consumption in its aircraft and continue to invest in new
aircraft. For example, by the end of 2022, we plan to retire our fleet
of MD-10s while continuing to acquire cleaner and more fuel efficient
aircraft. We also will continue working with the U.S. Federal Aviation
Administration to advance and modernize the National Airspace System.
Facilities: FedEx will continue efforts to make its more
than 5,000 facilities worldwide more sustainable through continued
investments in efficient facilities, renewable energy, and other energy
management programs. Across our FedEx Ground network, we have solar
installations in service at 16 facilities and a number of projects in
progress or in the planning phase at additional U.S. locations.
Significant efforts are already underway as well to modernize major
Express hubs in Memphis, Tenn., and Indianapolis, Ind.
Natural Carbon Sequestration: FedEx will commit $100M
over five years to help establish the Yale Center for Natural Carbon
Capture to support applied research into natural carbon sequestration
solutions.
The path toward sustainability requires new strategies for removing
and storing Earth's excess carbon. The Yale Center for Natural Carbon
Capture will catalyze interdisciplinary research across the natural
sciences and engineering to accelerate this work.
Center researchers will develop methods that build on natural
carbon storage systems, including biological ecosystems and the
geological carbon cycle, improving, where possible, how quickly carbon
can be absorbed, how much can be contained, and how long it can be
stored. The center's first focus will be helping to develop strategies
that offset greenhouse gas emissions equivalent to current emissions
produced by aircraft. This effort is critical as we look forward and
plan for the growth of this dynamic industry.
The growth of aviation is essential to our collective future.
Airplanes enable humanity's innate historical desire to travel and
trade and have uniquely helped create a more connected, prosperous
world. It was only 118 years ago that the Wright brothers took flight
in their homemade machine. Today, global air services now comprise an
industry with nearly 88 million jobs \1\. In 2019, airplanes
transported over 4.5 billion passengers around the world \2\ and were
responsible for over 30% of the value of all international trade \3\.
And while COVID-19 has temporarily disrupted passenger travel,
international air cargo services have proven essential to helping the
world combat this crisis, by keeping critical supply chains open to
ensure the timely delivery of much needed supplies and goods.
---------------------------------------------------------------------------
\1\ International Air Transport Association
\2\ International Civil Aviation Organization
\3\ Bernstein research
---------------------------------------------------------------------------
Unlike other transport activities that can be powered by batteries
or other low-carbon fuels, achieving true sustainability in aviation
has proven to be an intractable problem as there are few viable
alternatives on the horizon to replace carbon-based jet fuels. Along
with investing in the modernization of aircraft, the aviation industry
will continue research and development of sustainable plant and waste-
based biofuels, synthetic carbon-based fuels, ``electrofuels,'' and
``green hydrogen.'' However, the massive costs of new sustainable
aircraft fuels, suitable new aircraft designs to use them, and
associated infrastructure make the prospects for carbon-neutral
aviation challenging. As Bill Gates documents in his new book ``How to
Avoid a Climate Disaster,'' absent scientific breakthroughs in
chemistry, flying would necessarily revert to a ``premium'' mode of
transport--significantly decelerating future global prosperity and
improvements in health.
Developing a portfolio of natural solutions for carbon
sequestration is an ambitious but realistic approach to this problem.
Building upon initial successes in the aviation sector, the Yale center
will broaden its scope to address additional global sources of
emissions--publishing and sharing its findings so that other
businesses, industries, and governments can benefit from work that will
accelerate the adoption and implementation of natural carbon capture
strategies around the world.
Future-focused strategies
This partnership with Yale University is only one of many future-
focused sustainability strategies underway at FedEx. As we maintain a
market-leading portfolio for e-commerce--the fastest growing segment of
our business--we do so with a sharp focus on customer needs and the
environment as we explore and develop emerging technologies that will
help create a safer, efficient, and sustainable operation for the
future. RoxoTM, the FedEx SameDay Bot holds promise for
deliveries in congested or difficult delivery locations and is all
electric--using only batteries that produce zero localized emissions.
In 2019, FedEx launched its participation in a small package, small
drone delivery pilot program operated by Wing Aviation LLC, a
subsidiary of Alphabet Inc. The pilot program is being conducted in
Christiansburg, Va., as part of the U.S. Department of Transportation's
Unmanned Aircraft Systems Integration Pilot Program. Working to meet
customer needs in an ever-changing marketplace, the collaboration was
designed to evaluate enhancing last-mile delivery for same-day delivery
of urgent shipments and other exceptional delivery needs.
Regarding surface transportation, we must focus on creating sound
and efficient trucking policies while also investing in infrastructure.
As seen during the COVID-19 pandemic, the U.S. trucking industry is a
critical link in maintaining supply chains, accommodating rapid growth
in e-commerce and meeting fast changing consumer demands. Yet the
industry remains stuck with aging infrastructure and dated federal
equipment standards for twin 28-foot trailers that have not been
changed since 1982. We must continue to advocate for common sense,
environmentally friendly solutions to maximize trucking efficiency and
increase environmental gains. One such common sense approach with
immediate environmental benefits would be a modest 5-foot increase to
twin 28, trailers--not an increase to the weight limits. This increased
capacity in our nation's transportation system could reduce annual fuel
use by 225 million gallons per year and reduce carbon emissions by 3
million tons per year, all at no cost to road safety or taxpayers.
Last year, this committee and this chamber did important work in
drafting an infrastructure package that incorporated climate solutions.
This included incentivizing commercial electric vehicles, promoting the
building of zero emission vehicle charging infrastructure, and
advancing research into low-emission and alternative aviation fuels.
There was also significant work done to modernize the electric grid to
accommodate more renewable energy and prepare the grid for the
largescale deployment of electric vehicles. This is a good start, but
there is more that needs to be done. As noted earlier, if we want to
see the full benefit of SAFs, we need to invest in a manner that will
facilitate development and create a sufficient supply of SAFs that can
meet and adjust to operator demand. We also need to prioritize
modernizing our air traffic control system. Beyond technology updates
and staffing, we need to focus on updating air traffic management
policies and guidance in a way that balances sustainability and
efficiency objectives, with community impact.
Our ambitious agenda at FedEx shows that businesses can and will
lead in the effort to create a sustainable future for us all. However,
we cannot do this alone. Government, industry stakeholders, and
academia must continue to work together to adopt policies and
regulations that help create a performance-based path that will foster
and promote innovation in this field, ensuring that the U.S. maintains
its status as a global leader in climate change policy, while also
stimulating economic growth and job development.
These are just a few of the priorities we must focus on as we work
together to drive innovation and develop solutions to address our
climate crisis. I look forward to discussing those shared goals with
you today.
attachment
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. DeFazio. Thank you, Mr. Smith.
We now move to Ms. Laurie Giammona.
Ms. Giammona. Good morning, and thank you, Chairman DeFazio
and Ranking Member Graves, for the opportunity to testify.
I am Laurie Giammona, senior vice president of customer
care for Pacific Gas and Electric Company in California. I
appreciate the committee's interest in how business plays a
role in addressing climate change and commend the committee for
examining ways that Federal policy can complement this
activity.
PG&E's commitment to mitigating and adapting to climate
change in a way that leaves no one behind is as strong as ever
and fundamental to delivering on the triple bottom line:
people, planet, and prosperity, underscored by strong
operational performance.
California has some of the Nation's most ambitious climate
and clean energy goals, including reaching carbon neutrality by
2045. PG&E is proud to be a committed partner in implementation
of the State's vision.
We provide some of the cleanest energy in the Nation with
88 percent of electricity delivered from carbon-free sources.
We are focused on meeting our customers' desires to adopt clean
energy solutions, including energy efficiency, rooftop solar,
battery storage, and electric vehicles or EVs.
At the same time, California is experiencing the impact of
climate change, from record wildfires to yearslong drought and
unprecedented heat waves. As infrastructure operators and
planners, PG&E is doing everything we can to adapt to this
reality and increase the resilience of our energy system.
Our industry is at a remarkable crossroads. For PG&E, we
see electric transportation as a vital opportunity to make more
efficient use and resilient use of our electric grid, keep
costs affordable for all customers, and enable emissions
reductions in the transportation sector, which in California
accounts for 40 percent of emissions and is a major contributor
to poor air quality.
It is hard to understate the benefits of electric vehicles.
EVs powered by PG&E's low-emission electricity will lower
transportation emissions.
Since EVs produce no tailpipe pollutants, air quality will
also improve, ideally, for those disproportionally impacted
living near highways, ports, and rail yards.
EVs provide direct benefits to consumers in terms of lower,
more predictable fuel and maintenance costs. For a PG&E
residential customer, an equivalent gallon of gasoline costs
just $1.60. Annually, an electric vehicle driver in PG&E
service territory can save $1,200 in fuel and maintenance
costs.
Declining costs and increased variety of vehicle models has
accelerated EV adoption in California, and already one in five
EVs in the Nation plugs into PG&E's grid.
It is not just EV adopters benefitting from lower costs. As
EVs add more demand to the grid, the fixed cost of maintaining
and operating the grid are spread amongst more kilowatthours,
leading to lower electricity costs for all.
Our grid will see other benefits and greater EV adoption
since this load is flexible and geographically distributed.
Utilities can optimize their grid benefits in using EVs to soak
up excess solar power and exploring ways to use EVs as
resilient assets.
Of note, PG&E has more than $400 million in approved EV
infrastructure programs to support fleet electrification for
medium- and heavy-duty vehicles, public fast charging, and
light-duty charging at workplaces and residential complexes.
These programs include incentives for and deployment targets in
disadvantaged communities, helping to ensure everyone can
equitably access the benefits of EVs.
PG&E also offers low and simplified EV charging rates and
rebates to help lower the cost of ownership.
Finally, through research and pilot programs, we are
optimizing charging infrastructure siting and usage to maximize
grid benefits and support customer affordability.
We believe Federal policies can complement actions at the
State level and help provide benefits to all customers.
Specifically, we support Federal investment in policies to
accelerate deployment of charging infrastructure, particularly
in ways that will address range anxiety and deployment in
disadvantaged communities.
We further support Federal investment to encourage fleet
electrification by transit agencies; Federal, State, and local
governments; Tribes, and school districts.
For other customers, incentives such as expanded tax
credits can help accelerate adoption and drive down overall
costs.
Finally, increased Federal research and development in
technology innovations can help reduce costs of EVs and ensure
their successful integration to the grid.
We appreciate the opportunity to testify, and we look
forward to continuing to partner with the Federal Government to
realize the benefit of EVs.
Thank you.
[Ms. Giammona's prepared statement follows:]
Prepared Statement of Laurie M. Giammona, Senior Vice President for
Customer Care, Pacific Gas and Electric Company
Chairman DeFazio, Ranking Member Graves, and members of the
Committee, thank you for inviting me to testify today. My name is
Laurie Giammona, and I am the Senior Vice President for Customer Care
at Pacific Gas and Electric Company (PG&E). PG&E is California's
largest energy provider, with more than 23,000 employees providing gas
and electric service to an area that is home to 16 million people.
PG&E's Climate Vision
PG&E's commitment to mitigating and adapting to climate change, in
a way that leaves no one behind, is as strong as ever, and it is what
our customers expect and deserve. California's climate and clean energy
goals are some of the most ambitious in the nation, with a goal to
reach economy-wide carbon neutrality in the state by 2045. Clean
electricity plays a foundational role in decarbonizing our economy,
which is consistent with science-based reduction targets to avoid the
worst effects of climate change. As such, PG&E's mission and vision are
aligned with California's commitment to climate policy leadership, and
we remain a committed partner in implementing the state's climate
policies.
In California, the electricity sector accounts for just 15 percent
of greenhouse gas (GHG) emissions and state legislation requires us to
have 100 percent of retail electricity sales from renewable and zero-
carbon resources by 2045.\1\ Part of California's comprehensive program
to reduce carbon emissions is its Renewables Portfolio Standard (RPS),
one of the most progressive clean energy mandates in the country,
requiring 60% of energy delivered to retail customers to be from
qualifying renewable resources by 2030. As a result, PG&E has one of
the cleanest electricity portfolios in the nation, with 35% of our
delivered energy from qualified renewable resources in 2020, and 88% of
electricity we deliver is carbon-free.\2\ Given the low emissions
profile of electricity in the state, electrification of other sectors,
particularly transportation, will be key to decarbonizing California's
economy. PG&E is well positioned to enable this transition.
---------------------------------------------------------------------------
\1\ California Air Resources Board, ``Current California GHG
Emission Inventory Data,'' https://ww2.arb.ca.gov/ghg-inventory-data.
\2\ Pacific Gas and Electric Company, ``PG&E Surpasses California's
2020 Renewable Energy Goal; Electricity Among Cleanest in Nation''
(March 2021), https://www.pgecurrents.com/2021/
03/09/pg-electricity-delivered-to-customers-is-more-than-88-greenhouse-
gas-free-and-
among-the-cleanest-in-the-nation/.
---------------------------------------------------------------------------
PG&E customers are also embracing clean energy solutions. We are
working closely with our customers to provide options that allow them
to have more control over the energy that powers their lives. Of note,
PG&E has more than 535,000 interconnected rooftop solar system
customers--more than any other utility in the U.S.; we provide
incentives to customers adopting battery storage systems; we offer a
wide range of programs to help customers reduce their energy use and
save money; and we provide some of the nation's leading programs to
encourage electric vehicle (EV) adoption for both residential and
commercial customers. Today, approximately one in five EVs in the
United States plugs into PG&E's grid.\3\
---------------------------------------------------------------------------
\3\ Pacific Gas and Electric Company, ``2020 Annual Corporate
Responsibility and Sustainability Report'' (August 2020), https://
www.pgecorp.com/corp/responsibility-sustainability/corporate-
responsibility-sustainability.page
---------------------------------------------------------------------------
At the same time, California is already experiencing the impacts of
climate change, and we are doing everything we can to adapt to that
reality. Through our Community Wildfire Safety Program, we are
bolstering wildfire prevention and emergency response efforts, putting
in place new and enhanced safety measures, and doing more over the long
term to harden our electric system to help reduce wildfire risks and
keep our customers safe.
We're also integrating climate science into key company functions
and creating tools to support planning and decision-making that
considers the physical risks that extreme weather and climate change
pose for our infrastructure. And, because resilience requires a
community-wide approach, we're supporting climate resilience efforts at
the state and local levels including through PG&E's Better Together
Resilient Communities grants program.
For PG&E, corporate sustainability and addressing climate change
isn't just a nice-to-have; it's a core part of our business strategy to
meet the triple bottom line of people, planet and prosperity of
California, underscored by strong operational performance. Our
customers and communities rely on PG&E to deliver safe, reliable,
affordable and clean energy, and we must meet their needs today in a
way that creates a better tomorrow. It's what our customers, investors,
regulators, community leaders and employees want and deserve.
Benefits of Transportation Electrification
Electrification of the transportation sector will provide
tremendous benefits for our environment, our economy and our energy
system. In California, transportation is the largest single contributor
of GHG emissions, accounting for 41% of GHG emissions--higher than the
national average of 28% for the sector, while electricity accounts for
just 15% of statewide GHG emissions.\4\ Nationally, emissions from the
power sector are at their lowest level since 1987,\5\ while
transportation is now the leading source of GHG emissions.\6\ As the
electricity sector continues to reduce its GHG footprint in California
and across the nation, electrifying transportation presents one of the
greatest opportunities to address climate change.
---------------------------------------------------------------------------
\4\ California Air Resources Board, ``Current California GHG
Emission Inventory Data,'' https://ww2.arb.ca.gov/ghg-inventory-data.
\5\ U.S. Energy Information Administration, ``Carbon dioxide
emission from the U.S. power sector have declined 28% since 2005''
(October 2018), https://www.eia.gov/todayinenergy/detail.php?
id=37392#: :text=EIA%20has%20calculated%20that%20CO2,the%20lowest%20leve
l%20since
%201987.
\6\ U.S. Environmental Protection Agency, ``Sources of Greenhouse
Gas Emissions,'' https://www.epa.gov/ghgemissions/sources-greenhouse-
gas-emissions.
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Transportation electrification will also improve air quality and
public health as EVs do not produce any tailpipe emissions. In
California, motorists drive more than a billion miles each day,
producing 1,000 tons of smog-forming pollutants.\7\ High levels of air
pollution can lead to asthma and other respiratory illnesses that
especially affect children and seniors, and those living in communities
adjacent to highways, ports and rail yards can suffer disproportionate
effects. In California's San Joaquin Valley, for instance, communities
suffer from some of the nation's worst air quality, due to the area's
topography, local industries and heavy traffic. Communities in the
region are promoting clean vehicles to help reduce pollution and
improve public health. In fact, a recent study showed that a shift to
electric trucks and buses in urban areas could prevent more than 57,000
premature deaths by 2050.\8\
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\7\ California Air Resources Board, ``Drive Clean CA.Gov,'' https:/
/driveclean.ca.gov/why-drive-clean.
\8\ Environmental Defense Fund, ``Clean Trucks, Clean Air, American
Jobs'' (March 2021), https://www.edf.org/sites/default/files/2021-03/
HD_ZEV_White_Paper.pdf.
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The transition to electric vehicles isn't just an environmental
priority, it's also a generational and transformational opportunity for
the United States to generate new jobs and drive economic output. As
our nation seeks to recover from the COVID-19 pandemic and economic
downturn, EV manufacturing and charging infrastructure buildout could
create thousands of domestic jobs, adding to the more than 266,000
American jobs already supported by the alternative fuel vehicle
industry.\9\ For PG&E, installing charging infrastructure and preparing
the grid for greater electrification creates new job opportunities for
our workers. For instance, PG&E has partnered with IBEW Local 1245,
which represents about 12,000 PG&E employees, to build out charging
ports, and we look forward to continuing to partner with IBEW 1245 as
we seek opportunities to upgrade the grid and expand charging
infrastructure.
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\9\ National Association of State Energy Officials and Energy
Futures Initiative, ``2020 U.S. Energy & Employment Report,'' https://
www.usenergyjobs.org/.
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Overall affordability is also driving greater EV adoption in our
service area. Increased variety and number of vehicle models, improved
battery capacity and declining costs have made EVs more attractive to
consumers. EVs are less expensive to operate than gasoline-powered
vehicles, primarily due to fuel cost savings because electricity is
less expensive than gasoline on an equivalent cost basis. Customers
using one of PG&E's residential EV rate plans pay as low as $1.60 per
gasoline gallon equivalent--nearly 60% less than today's average price
of $3.84 per gallon of gasoline in California.\10\ These are fuel
prices Californians haven't seen since in decades. For the typical
Californian who drives about 14,000 miles a year in a car that averages
35 miles per gallon, this represents a savings of about $900
annually.\11\ EV owners also benefit from lower annual maintenance
costs, averaging $330 less per year than gas-powered cars.\12\
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\10\ AAA, ``California Average Gas Prices: March 11, 2021,''
https://gasprices.aaa.com/?state=CA.
\11\ Car and Driver, ``What is the Average Mileage Per Year,''
https://www.caranddriver.com/
research/a32880477/average-mileage-per-year/
#: :text=The%20residents%20of%20both%20states,
Florida%3A%2011%2C836%20miles.
\12\ AAA, ``Owning an Electric Vehicle is the Cure for Most
Consumer Concerns'' (January 2020), https://newsroom.aaa.com/2020/01/
aaa-owning-an-electric-vehicle-is-the-cure-for-most-
consumer-concerns/.
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EVs will even provide economic benefit to our customers who do not
choose to adopt them--namely through more affordable electric rates. As
additional demand is added to our grid, the fixed costs of upgrading
and maintaining the grid will be spread over more kilowatt hours, which
will help lower costs for all customers. This is particularly true when
EV users are incentivized to charge during off-peak periods. Even with
the modest load that EVs have added to PG&E's grid to date, we're
seeing benefits for all customers. A recent study by Synapse Energy
examined the contribution of EV charging to PG&E revenues from 2012-
2018 in comparison to the investments PG&E made in distribution
upgrades and PG&E programs. The study found that EVs contributed around
$350 million more than the cost of upgrades and incentives--a number
likely to grow as adoption increases in future years.\13\
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\13\ Synapse Energy Economics, Inc, ``EV Rate Impacts in
California'' (June 2019), https://www.synapse-energy.com/sites/default/
files/EV-Impacts-June-2019-18-122.pdf.
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Greater EV adoption will provide us more flexibility to manage the
grid in a way that promotes better resilience and reliability. In our
service area, there is an increasing penetration of solar resources
available in the morning hours--when demand is lower--and an increase
in electricity demand in the afternoon and evening hours when the sun
is down. Smart charging and incentives to EV owners to recharge during
those peak solar hours will allow us to utilize more renewable energy
and shift demand in a way that benefits all grid users. For example,
electric companies can send price signals to encourage customers to
charge their EVs at certain times of day. PG&E's electric rates for EV
owners send price signals encouraging residential and commercial EV
customers to charge their vehicles overnight or during the sunny
morning hours. And PG&E has proposed a dynamic electric rate for
commercial customers that would encourage customers to charge at the
lowest cost times of day by providing a day-ahead, hourly price signal.
Beyond rates, PG&E has piloted various incentives to encourage
customers to flexibly charge. Notably, we are completing a pilot with
Pittsburg Unified School District that tested the ability of school
buses to charge during the middle of the day, when there is excess
solar generation on the grid.
Supporting Customer Adoption of Electric Vehicles
For all these reasons, PG&E supports California's efforts to build
a low-carbon and clean energy future through the adoption of zero-
emission vehicles, and we believe the utility sector can play an
important role in advancing clean transportation options for our
customers.
The role played by electric utilities is only one of many in the
broader transportation electrification ecosystem. This ecosystem
includes entities such as policy makers, automakers, EV charging
companies, battery and component manufacturers, technology providers,
and utilities. None of these entities can work in isolation and they
all rely upon one another. But primarily, they all rely upon customers
to purchase electric vehicles and install charging infrastructure. As
part of this ecosystem, PG&E focuses on four areas in which we leverage
our core competencies to thoughtfully expand transportation
electrification, generate economically beneficial load growth and
support hard-to-serve segments: 1) expand access to charging
infrastructure; 2) reduce the total cost of ownership; 3) engage and
educate our customers about the benefits of electric vehicles; and 4)
optimize use of the electric grid.
On charging infrastructure, PG&E is actively collaborating with
automakers, charging equipment providers and state agencies to support
the large-scale electric infrastructure needed to incorporate EV
charging systems into the energy grid. These investments total more
than $400 million in approved infrastructure investments through 2025--
one of the largest utility-EV investments in the nation--which includes
these programs:
EV Charge Network: $130 million to install 4,500+ level-2
charging ports to support light-duty vehicle charging at workplaces and
multi-unit dwellings;
EV Fleet: $236 million to help 700+ organizations
including school districts, transit agencies and small businesses
electrify their fleet operations by supporting infrastructure for 6,500
medium- and heavy-duty EVs;
EV Fast Charge: $22 million to install infrastructure to
support public Direct Current Fast Charging (DCFC); and
EV Schools and Parks: $12 million in charging
infrastructure at schools and state parks.
Charging programs include incentives for and deployment targets in
disadvantaged communities, helping to ensure customers can equitably
access the benefits of EVs, and PG&E seeks to install up to 2,000
level-1 and level-2 home chargers for low-income customers by 2023. For
example, Madera Unified School District, located in a disadvantaged
community in California's Central Valley, received support from PG&E's
EV Fleet Program in the form of rebates, infrastructure, and technical
assistance which enabled them to install 10 EV charging stations,
electrify five electric busses in 2020, and support their plans for
additional electric busses in the coming years. School districts across
the state have begun to embrace electrification to reduce vehicle
emissions that are especially harmful to children and are often more
pronounced in disadvantaged communities. In addition, fleet
electrification can reduce major expenses such as maintenance and
fueling costs, especially for fleets with fixed routes and charging
locations. For its EV Charge Network and EV Fast Charge programs, PG&E
has received applications that far exceed resources available,
demonstrating the strong demand from our customers for EV charging and
the continued need for utility support. PG&E is working now on the next
generation of programs, including a 10-year strategic plan on electric
transportation investments that we will file with the California Public
Utilities Commission (CPUC) in 2022.
For our customers, PG&E is also working to reduce the total cost of
EV ownership through rebates and specialized electric rates that ensure
owning and operating an EV can be cheaper than a gasoline-fueled
alternative. In addition to federal tax credits, Californians are
eligible for a point-of-sale price reduction of up to $1,500 for the
purchase or lease of a new EV through the California Clean Fuel Reward
program. PG&E also offers residential and commercial EV charging rates,
that provide predictable, simplified and affordable rates for
customers. To help customers estimate the full costs of EV ownership,
PG&E offers an online EV Savings Calculator for both residential and
fleet customers where customers can browse EV models, discover
incentives, compare rate plans, and locate charging stations.
Finally, through research and pilot programs, PG&E is optimizing
charging infrastructure siting and usage to maximize grid benefits and
support customer affordability. For example, PG&E is testing how smart
charging and battery storage can lower operating costs and maximize
efficiencies for San Joaquin Regional Transit District. PG&E is
testing, analyzing, and comparing the economics for charging at various
times of the day using different models with and without battery
storage. As part of the pilot, PG&E funded five new electric bus
chargers and a battery energy storage system and funded and built the
infrastructure from the electric grid to the chargers and storage
system.
Federal Policy Can Complement and Accelerate Progress
Like the current pandemic, climate change is a global challenge
that requires urgent and decisive action, including leadership by the
federal government to provide businesses clear, durable policies and
market-based incentives to act. PG&E believes federal policies can
complement actions at the state level and help provide benefits to all
customers who wish to electrify their transportation.
As we have witnessed through our own experience, customers are
eager to adopt EVs and enjoy their benefits, but much more is needed to
build out charging infrastructure, drive down the upfront costs of
electric vehicles, particularly for disadvantaged communities,
encourage fleet conversion, and promote the research and innovation
needed to make further progress. While PG&E has made significant
investments to accelerate EV adoption, our customers cannot alone
shoulder all costs needed to advance transportation electrification.
Given the economy-wide benefits of EVs, we believe there are key roles
the federal government should play to support this transition,
including:
Infrastructure Deployment:
Provide grant funding for public EV and other clean fuel
infrastructure, including for deployment along the national highway
system and in disadvantaged communities, and ensure electric utilities
are eligible to partner with grant recipients given their critical role
in infrastructure deployment.
Provide rebates for EV charging infrastructure in
workplaces and multi-unit dwellings, and ensure electric utilities are
eligible to partner with grant recipients given their critical role in
infrastructure deployment.
Update and extend the federal tax credit for alternative
fuel infrastructure to encourage commercial and consumer investments in
charging infrastructure.
Customer Adoption:
Modernize existing federal transportation programs to
encourage investments in electric transportation and charging
infrastructure.
Expand funding for zero- and low-emission school buses.
Provide grants and other incentives for electrification
at ports, airports and rail yards and for public transit agencies and
state, local and tribal governments to electrify their fleets.
Provide incentives for adoption of light-duty EVs through
extension of the EV tax credit and examine opportunities to provide
point-of-sale rebates and used EV incentives to promote greater equity
and lower the upfront cost for all customers including those with
limited tax liability.
Accelerate electrification of medium- and heavy-duty
vehicles by providing tax incentives for manufacturing and adoption of
these vehicle classes.
Expand federal procurement of electric vehicles.
Research, Development & Demonstration:
Expand federal funding for research, development, and
demonstration efforts to accelerate innovations necessary to continue
reducing costs of light-, medium- and heavy-duty EVs and ensure
successful integration with the electric grid.
Essential Partners in America's Transportation Future
The nation's energy sector is in the midst of a profound
transformation. PG&E is continuing to make investments in smarter, more
resilient energy infrastructure, providing even cleaner energy, and
expanding the choices and energy solutions available to meet the
changing needs of our customers. Electrifying the transportation sector
is the gateway to a sustainable, clean energy future and an opportunity
to collectively make progress to achieve extraordinary benefits for all
Americans in the decades ahead.
PG&E is fully committed to working together with policymakers,
customers and all stakeholders to make this opportunity a reality.
Thank you again for having me here today. I look forward to your
questions.
Mr. DeFazio. Thank you, Ms. Giammona.
Mr. Tom Lewis.
Mr. Lewis. Mr. Chairman and committee members, thank you
for your time today.
My name is Tom Lewis, and I am a licensed civil engineer, a
founding board member of the International Coalition for
Sustainable Infrastructure, and the executive leader of the
climate, resilience, and sustainability business at WSP USA.
WSP USA is one of the largest engineering consultancies in
the Nation. We have more than 11,000 employees in roughly 140
offices across the United States. We deliver infrastructure
solutions for hundreds of communities, including many in your
own congressional districts.
At WSP USA, we understand that our country and our planet
are at a critical moment that demands focused and effective
climate solutions. Based on our work across all types of
infrastructure and all phases of its life cycle, we embrace our
role as a force multiplier for positive change and believe that
the business case for climate-oriented infrastructure solutions
is very clear.
The business case is reinforced every day as we provide
services to reduce the depletion of natural resources, limit
life-cycle greenhouse gas emissions, and make infrastructure
more resilient to disaster.
This work includes the increased use of nature-based
solutions, renewable energy, transportation system
electrification, and equitable community engagement.
Climate solutions for infrastructure need to be rooted in
the quantification and consideration of future risk on a
project-by-project basis. Unfortunately, proactive investment
in risk mitigation has been absent from the vast majority of
infrastructure programs and project selections across the
country.
As my fellow witness Troy Rudd mentioned, and according to
the National Oceanic and Atmospheric Administration, 2020 saw
an all-time record of 22 weather-related disasters that yielded
economic losses in excess of $1 billion, in addition to the
tragic loss of 262 human lives.
This effectively highlights the extremely disruptive,
expensive, and dangerous consequences of not funding and
building smartly so that we are protecting against the risk of
infrastructure failures, casualties, and loss of community
lifelines and other essential services.
Experience has taught us that increasing project capital
costs by just a few percentage points to better future-proof
our Nation's infrastructure is a very wise investment. In fact,
FEMA statistics show that each dollar spent on pre-disaster
mitigation measures saved an average of $4 over an
infrastructure element's lifespan.
This noteworthy return on investment is especially
compelling when you consider that capital construction and
long-term budget planning almost always underestimates the cost
and national resource impacts of long-term operation,
maintenance, and repeated post-disaster repairs.
Smart investment in life-cycle resilience and
sustainability must be prioritized to build better
infrastructure going forward that, in turn, lowers life-cycle
greenhouse gas emissions.
The good news is that WSP USA has recently supported
emerging project success stories in multiple States where
sustainability, resilience, and risk considerations were
central to infrastructure planning, engineering, and investment
decisions on a project-by-project basis.
These include projects in Massachusetts, using a
resilience-centric approach; in Florida and New York, using
nature-based solutions for coastal protection; and in
California, using a sustainability-centric approach for urban
transit and for high-speed rail.
Projects like these use a risk-based framework for
assessing and protecting assets, natural resources, vulnerable
communities, and the climate. This is the essence of applying a
sustainability approach toward infrastructure and makes real
the goal of achieving a favorable economic, environmental, and
social equity triple bottom line.
More frequent extreme weather events continue to endanger
and impact vulnerable and underresourced communities more than
any others in both rural and urban areas.
Therefore, in addition to creating physical resilience,
climate solutions for infrastructure must establish increased
economic opportunity and stakeholder buy-in through strategic
engagement and meeting vulnerable communities where they are.
To achieve equitable outcomes and maximize stakeholder buy-
in, Federal policies and funding decisions around
infrastructure need to place the perspectives of all impacted
communities at the center of the process.
In closing, we believe that case-by-case, climate-based
infrastructure solutions can and will meet this critical moment
for our Nation and our planet if the following business case
performance objectives are promoted through good legislation,
funding decisions, and policymaking.
First, incentivize the selection, design, and construction
of infrastructure projects that draw from and impact fewer
natural resources, including the increased use of nature-based
solutions, renewable energy, and transportation system
electrification.
Second, reduce life-cycle greenhouse gas emissions and
adverse climate and biodiversity impacts.
Third, require that infrastructure be more resilient to
future extreme weather events and climate.
And fourth, prioritize the protection of the most
vulnerable and disadvantaged communities.
Thank you for the opportunity to give this testimony.
[Mr. Lewis' prepared statement follows:]
Prepared Statement of Tom Lewis, P.E., J.D., National Business Line
Executive for Climate, Resilience, and Sustainability, WSP USA
Introduction: Meeting the Moment and Being a Positive Force Multiplier
Mr. Chairman and Committee Members, my name is Tom Lewis and I am a
licensed civil engineer and the Climate, Resilience and Sustainability
(CRS) Executive Leader for WSP USA. My position at WSP USA was recently
created to meet this critical moment in history by coalescing our many
like-minded, multidisciplinary climate, resilience and sustainability
professionals.
The primary objective of the new business line is to enable WSP USA
to be a force multiplier for positive organizational and infrastructure
systems change. Our team recognizes that our country and planet are at
a critical inflection point that demands focused and effective climate
impact mitigation and adaptation. I enthusiastically accepted the
opportunity to transition out of my role as WSP USA Federal Programs
sector president to lead our CRS team, because the role builds on my
personal passions, and benefits from my career-long advocacy for
infrastructure sustainability, resilience and environmental
stewardship, and my leadership on multiple industry boards. The vision
and mission of CRS directly aligns with the goals of this hearing.
WSP USA is the U.S. operating company of WSP Global, one of the
world's leading engineering and professional services firms with more
50,000 employees worldwide. Dedicated to serving communities,
governments and the commercial sector, the firm comprises engineers,
planners, environmental specialists, strategic advisors, project and
program managers, and construction and operations management
professionals. With more 10,000 employees across the country, WSP USA
provides solutions in the transportation, buildings, energy, water and
environment markets. The CRS business line is the ideal platform to
support climate action and resilient infrastructure in communities
nationwide.
The Question at Hand
The foundational question being discussed in the hearing today is
the appropriateness of incorporating considerations of climate change
into investment decisions, or the business case for such action. Do
investments in sustainability, emissions reductions and resilience make
sense, and how should they be considered by this body? Stated simply,
the business case from my perspective is:
Designing, operating and maintaining infrastructure that
draws fewer natural resources is an efficiency measure, and more
reliance on sustainable energy sources extends the natural resources of
the U.S. to future generations.
Requiring construction of infrastructure that is
resilient to current and future events ensures:
the federal government won't have to go back into
communities to provide duplicative repair on impacted assets after an
event; and
the long-term maintenance and repair of the system once
turned over to state and local agencies won't place a heavier burden on
them, as state budgets are stretched to the extreme.
Communities and businesses can more quickly be brought
back online after a disaster event with energy, water and
transportation systems operating to facilitate recovery.
A Value-Added Holistic Perspective: Infrastructure for the Future
At WSP USA, we assess, plan, design and manage Future ReadyTM
infrastructure for our U.S. clients and partners that more effectively
anticipates forthcoming needs and conditions, and therefore provides a
high level of sustainable and environmentally sound service for many
generations.\1\
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\1\ https://www.wsp.com/en-CA/who-we-are/future-ready
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During the lifespan of infrastructure, technologies and societal
needs will radically change. Likewise, the climate will continue to
change, bringing more extreme weather and the inevitable phase-down of
fossil fuels. We recognize that design codes and standards are often
slow to change, and in many cases do not consider current and future
conditions, which are materially different than the existing conditions
at the time of the asset's development. For example, in many cases we
have found the design of infrastructure still reflects design
parameters based on outdated relationships between asset performance,
user demands, climatological trends, environmental influences, and
other conditions that could affect the useful life and the level of
performance of that asset.
As a firm that works across all types of infrastructure and all
phases of its lifecycle for government and non-government clients, WSP
USA has a clear view on the state of infrastructure and a unique multi-
dimensional perspective on the business case for climate solutions in
infrastructure development. We provide services that support both
climate mitigation through greenhouse gas (GHG) reduction and climate
adaptation through infrastructure resilience and nature-based
solutions. From that educated perspective, it seems clear that we as a
society need to make the case for justifying funding and investment
decisions on the technical and benefit-cost merits that result in our
infrastructure being more adaptive, sustainable and resilient to future
climatological, environmental, technological and societal trends.
WSP USA has worked on many of our country's largest and most
important government and public-private-partnership (P3) infrastructure
projects supporting road, bridge and tunnel improvements, rail and
transit expansion, airport upgrades, renewal of ports, and water and
power network modernization in a way that makes a positive impact on
communities and the environment. These projects often include
considering multiple aspects of potential climate disruptions,
including preparing for resilience, improving efficiency and
sustainability, and ensuring social justice in new designs and
development.
At the same time, WSP USA also works for some of the most
innovative and climate-focused private companies in the U.S. and
worldwide. These companies include investors funding highly progressive
projects and technologies, airlines looking to fly using biofuels today
and hydrogen tomorrow, information technology providers finding new
ways to store data in ways that reduce demands for water and cooling,
and financial institutions looking to make their portfolios more
reflective of the ``green transition'' and with due consideration of
the social cost of carbon. Often, the solutions developed for and
employed by these innovative private clients can be, and are, adapted
for use by our government clients.
Credibility: Walking the Talk as a Company
As an example of how a more adaptive and flexible approach to
future climate conditions can be formalized as part of engineering
decision-making, WSP USA trains all its hires in its Future Ready
program to inspire and empower our employees to design for future
resilience, adaptability and sustainability. By considering current,
emerging and anticipated trends in future climatological and
environmental conditions, the Future Ready approach helps our employees
develop infrastructure solutions and organizational improvements for
the benefit of the communities in which they live, work and serve.
To show how this can be done for greenhouse gas emissions
reductions, WSP USA became carbon neutral across our operations in
2019. As a result of this and other progressive improvements within our
organization, we were recognized by World Finance Magazine as the most
sustainable company in the engineering industry for both 2019 and 2020.
Further, in February 2020 WSP became the first professional services
firm to sign onto a recently created sustainability-linked credit
facility in the Americas. The agreement applies to a $1.2 billion
credit facility and includes three key performance metrics to document
our ongoing commitment to be a sustainable leader in the infrastructure
industry and society more broadly, including:
Reduction in operational greenhouse emissions between
2018 and 2021;
The percentage of our services having a positive effect
on the environment; and
The percentage of women in management positions.
As further described in the following section, in 2020 WSP USA--in
collaboration with the American Society of Civil Engineers (ASCE) and
others--launched the International Coalition for Sustainable
Infrastructure (ICSI). The company is also a founding organizer of
www.pledgetonetzero.org, a program designed to galvanize our consulting
industry to take on climate action even more directly, while we guide
our clients on their own net zero carbon progress. Pledge to net zero
is now one of the United Nation's (UN) Race To Zero partners ahead of
the pivotal 26th UN Climate Change Conference of the Parties (COP26),
scheduled for November 1-12, 2021 in Glasgow Scotland. Pledge to net
zero requires three commitments:
1. Commit to at least a `well below 2+ Celsius' science-based
target under the SBTi (Science Based Targets initiative--a non-profit
facilitated collaboration involving the UN Global Compact, World
Resources Institute (WRI) and the World-Wide Fund for Nature (WWF),
2. Publicly report emissions; and
3. Publish at least one piece of thought leadership each year.
A Coalition of Engineering Organizations: Bridging the Gaps With
Practical Action
For thousands of years, civil engineers have been imagining,
designing and building infrastructure that has allowed humans to
congregate and interact, explore and thrive. Their ingenuity propelled
the growth of human civilization and paved the way to the present. Yet
advancement has come at a high cost, economically and environmentally.
In order to fuel our modern lifestyles, we are unsustainably
expending the resources of our natural environment. The rate of non-
renewable natural resource extraction such as minerals, precious metals
and fossil fuels, as well as post-extraction manufacturing and
combustion, have led to unprecedented impacts on the world's climate
and ecosystems. Based on the latest global scientific consensus from
the Intergovernmental Panel on Climate Change (IPCC), the world's
global average temperature has risen 1.1o Celsius since the industrial
revolution. This trend will have major ramifications for our nation's
and the world's infrastructure under any scenario, but if left
unchecked it could be catastrophic to civilization and natural habitats
as we know them.
Transportation is the lifeblood of our economies and is also the
leading contributor to greenhouse gas emissions in the U.S., accounting
for approximately 30 percent of the nation's total emissions including
cars, trucks, airplanes and other transit modes. Our national approach
to repairing and maintaining roads, bridges and other transportation
infrastructure must urgently consider new assumptions to accelerate how
we design, measure, manage and invest in infrastructure to achieve both
resilient and adapted standards and the transition to a low or net zero
carbon economy that fully considers the physical and social impacts of
carbon and other GHG emissions.
Given this urgency, I along with Seth Schultz (currently the
Executive Director of The Resilience Shift), envisaged a ``Future World
Vision Leadership Summit'' hosted in late 2019 by the ASCE and its non-
profit ASCE Foundation. The idea was realized in November 2019 as a
highly successful summit attended by leadership from WSP USA, the
Resilience Shift, ASCE and more than 35 other infrastructure
stakeholders from around the U.S. and the world--five other major
engineering firms and two major infrastructure construction firms, two
major transportation/transit agencies, six major municipal/county
infrastructure agencies, the U.S. Army Corps of Engineers, three top
universities and three leading non-governmental organizations (NGOs).
As a direct outcome of the leadership summit, more than 100
individuals from dozens of organizations signed an open letter of
commitment to action that in turn led to the 2020 launching of ICSI,
with the letter of commitment stating:
``The global population will face unprecedented challenges
over the next 50 years, from rising seas to more frequent
extreme weather events, all of which will happen against a
backdrop of significant demographic changes and technology
advances. These global trends are already posing well-
documented challenges,
Practical solutions are needed in order to adapt our
infrastructure, close the resilience gap and breakdown barriers
to action. While there has been some progress in developing
favorable environmental, economic and social policy to lessen
the impacts of the changing climate, we need a larger scale
commitment among all stakeholders, especially engineers, to:
Identify, prioritize and better understand the gaps
and barriers for the planning, designing, building, maintaining
and operating sustainable and resilient infrastructure now and
in the future;
Cultivate and unlock the full potential of untapped
partnerships and funding investments designed to reduce the
impacts of extreme weather events, create sustainable and
resilient infrastructure, and effect social change; and
Understand and identify practical plans of action
and resources for implementing strategies that influence
realistic short-term goals and have measured, long-term
effects.
We the undersigned commit to unite forces and bring our
relevant expertise and resources to a Coalition for Sustainable
Infrastructure.''
I am extremely proud to be one of the five founding board members
for ICSI as WSP USA's representative, along with representatives from
the ASCE and its Foundation (Chair), the Resilience Shift (Host), the
Global Covenant of Mayors for Climate and Energy (GCoM), and the
Institute for Civil Engineers (ICE). ICSI's vision (``Engineering a
more sustainable, just and resilient future'') and mission
(``Mobilizing an engineering-led coalition to make resilience and
sustainability a cornerstone of every decision in the infrastructure
lifecycle in every community around the globe'') and is perfectly on
topic for this hearing, and so I am happy to add the ICSI perspective
into my further testimony below.
Making the Business Case for Climate-Focused Infrastructure Solutions
If we are serious as a society about future proofing our essential
structures and infrastructure systems, we must employ a risk-based and
community-engaged framework, while considering both the public and
private sectors as partners providing integrated and complementary
solutions. Much of the risk that private entities face from climate-
related events is the result of dependencies on public infrastructure
that support community functions, such as transportation systems, parks
and water supply. Likewise, many governmental functions depend on the
reliable and consistent provision of primarily privately provided
networks such as the electrical grid, fuel supply, mobile
communications networks and internet fiber.
Meanwhile, the evidence in the U.S. from FEMA, and globally from
the UN, is very clear and compelling that a dollar spent proactively on
infrastructure risk mitigation and better climate adaptation pays
itself back four or more times over in the form of greatly reduced, or
even wholly avoided, response and recovery costs retroactively spent in
the wake of future extreme weather disasters and chronic sea level
rise.
We are all interconnected and are likewise at risk of interrupted
service. In resilience parlance, there are potential cascading effects
of weather-related disruptions to service. Disruptions of the power
grid, for example, cause disruptions to electrified systems (e.g.,
traffic signals) that in turn negatively impact the orderly movement of
people and vehicles on the road network that then negatively impacts
public health, safety, and well-being. This interdependency was
recently illustrated with the extreme cold weather event in Texas that
caused the gas supply networks and electrical grid to largely fail,
resulting in serious water shortages and other negative public service
impacts (including the shut-down of COVID-19 testing and vaccine sites)
throughout the State.
I consider ``making the case'' for climate solutions as the most
important and pressing challenge of our time for infrastructure-related
industries. Considering future uncertainty and risks have been part of
investment decision-making for decades, but now it needs to be taken
even further.
Engineers, for example, have developed methodologies and technical
approaches that reflect uncertain futures with respect to the physical
forces that assets might face in the future. The concept of future year
conditions, e.g., the 100-year flood, have been an important input for
infrastructure design for generations. However, never has there been
such high levels of risk to uncertain environmental futures. Over the
past 15 years, we have seen unprecedented and evermore frequent extreme
weather events that have significantly affected our nation's
infrastructure and the use of this infrastructure, and credible
projections of future climate and weather conditions suggest that such
events will be more and more common.
The ability for the economy in general and our infrastructure
budgets in particular to recover from major disasters (including the
ongoing pandemic) is increasingly strained. According to the National
Oceanic and Atmospheric Administration (NOAA), 2020 saw 22 weather/
climate disasters that yielded economic losses in excess of $1 billion.
This is the highest number of such events recorded over the last 41
years and resulted in total costs in excess of $100 billion and the
tragic deaths of some 262 people. The National Flood Insurance Program
and other private insurance products have been further strained and are
ill-equipped to handle all these disruptions.
In fact, the world's largest reinsurance company (Swiss Re)
believes that economic and insured losses resulting from severe weather
events pose a major threat to global resilience. They state that the
insurability of weather risks could ultimately be jeopardized,
particularly in the most vulnerable, high-exposure accumulation areas.
The resultant cost of near-term disaster response and long-term
recovery to taxpayers continues to rise as we repeatedly repair damages
and often rebuild to past design standards that are shown to be
inadequate.
The engineering community has learned many lessons from the
aftermath of these weather events, and how one can better ``climate
proof'' future designs through lower carbon ``gray infrastructure''
(e.g., roads, bridges, tunnels, ports, airports) and with more use of
``green infrastructure'' (nature-based solutions and other cost-
effective, resilient approaches to provide functional, climatological
and community benefits). However, as is common in infrastructure
decision-making, many trade-offs are considered within funding
decisions tied to design options. In the context of future-proofing
built assets, we have often found that the additional costs are traded
off against focusing investment on today's needs. One of the important
messages from my testimony is that this trade-off does not have to be
and should not be mutually exclusive.
Our experience is that in many cases an added increment to a
project budget for future proofing will provide protection against
possible disruptions due to extreme weather events. There are many
examples of where this has been done for a variety of reasons in
infrastructure engineering. For example, the Oregon Department of
Transportation (ODOT) in the early years of seismic retrofits for
bridges (before Federal funds were available to support such projects)
allocated additional funds for bridge rehabilitation projects in order
to make incremental design changes that would provide better protection
against an earthquake. A State-funded study had shown that a major
earthquake in Oregon would likely damage many State highway bridges to
such an extent that supply and recovery efforts via highways would be
severely constrained, resulting potentially in additional lives lost
and substantial costs to the State's economy. For an average of about
five percent of the original project cost, incremental design changes
were made to add more protection against such a possibility. In other
words, ODOT officials had successfully made the business case through
tangible benefits for this type of incremental investment.
Other public agencies and programs are adopting a similar approach
to create infrastructure with the vision that it will provide a greater
public good now and for future generations and in order to preserve
existing assets against changing future conditions. The Massachusetts
Department of Transportation is creating inland and coastal flood
modeling that incorporates future climate change and changing
precipitation patterns into a predictive physical risk model that will
enable better planning and design for decades to come. Miami-Dade
County is planning a major capital program to address changing
conditions, including installing pumps to deal with street flooding,
and working to remove septic tanks which are being made ineffective by
rising groundwater. North Carolina DOT has developed a rainfall warning
system that predicts areas of flooding and washouts so that they can
have advanced coordination with state police on road closures due to
safety concerns. Communities in coastal Louisiana and Alaska have
started planning for inland migration away from flooding that is
occurring more and more regularly and damaging communities. These
agencies and others are expanding their planning and decision-making to
consider future changes in order to provide long-term and
transformative benefits for their residents.
I recognize that the title of this hearing is ``The Business Case
for Climate Solutions.'' We have shown in our work that such a business
case can be made where the financial benefits over the long run of
protecting assets exceeds the near-term costs of adaptive designs.
However, in the public sector, other non-monetary benefits or societal
costs are often part of the decision. For example, technical studies of
the potential disruptions to the road network assign dollar estimates
to the replacement costs of the disrupted asset, the cost of additional
travel time and vehicle operations for detours around the blockage, and
the cost of associated fatalities and injuries. A broader perspective
has sometimes been used to more fully understand the economic costs to
surrounding communities of loss of connectivity or to the delays in
supply chains dependent on the road that cannot in the short term after
a disaster event handle trucks delivering goods. An even broader
perspective would include non-monetary considerations relating to loss
in quality of life, public health and social impacts, and concerns
relating to providing equitable governmental response to the
disruption.
This broader perspective is at its core a key sustainability
concept, which fundamentally views today's decisions in the context of
how they affect the quality of life of future generations.
Sustainability does not rely on a cost-centered, design for capital
projects and budgets process. Instead, it views such decisions from the
holistic, life-cycle perspective in consideration of both monetary and
non-monetary factors. Sustainability is not only applicable to public
decisions; many corporations that WSP USA advises have adopted it as a
central principle in their business model and our government
institutions and agencies can learn from and leverage the positive
experiences and approaches from such corporations.
More Future Focused Codes, Standards, Tools and Decision-Making
The future will continue to bring stark new realities when it comes
to climate change and impacts on our Nation's infrastructure. The
engineering community that WSP USA is a part of is critical for
developing practical solutions as part of a path forward that
recognizes future uncertainty. Engineers are critical for creating and
employing more fitting and forward-looking codes, standards and tools,
which in turn will help establish more modern and effective frameworks
for achieving better funding and project selection decisions that
ensure projects are not just ``shovel ready'' but are also ``shovel
worthy.'' Specifically, these codes, standards and tools relate to the
capacities, locations, design, construction and operation of roads,
bridges, tunnels, water treatment plants, power plants, ports,
airports, railways, transit and other community infrastructure systems.
In the U.S., an excellent example of this is the evolution and ever-
expanding use of a tool like Envision from the Institute for
Sustainable Infrastructure (ISI) that WSP USA employs. ISI is an
educational nonprofit that was established in 2010 by ASCE, the
American Public Works Association (APWA), and the American Council of
Engineering Companies (ACEC), who collaborated with the Zofnass Program
for Sustainable Infrastructure at the Harvard University Graduate
School of Design (ZPH) to develop Envision (also noting that I am an
active, long-time Advisory Board member for ZPH). Envision provides a
consistent, consensus-based framework for assessing sustainability and
resilience in infrastructure. Envision:
Sets the standard for what constitutes sustainable
infrastructure;
Incentivizes higher performance goals beyond minimum
requirements;
Gives recognition to projects that make significant
contributions to sustainability; and
Provides a common language for collaboration and clear
communication both internally and externally.
Fundamentally, Envision is about supporting higher performance
through more sustainable and resilient project choices and designs so
that we ``build the right projects'' in addition to ``building projects
right.''
An excellent example of a project that fully incorporates the
policies and perspectives of sustainability/resilience nationally is
the California High Speed Rail project, a project that WSP USA is
supporting and just received a Platinum rating through Envision. This
project can serve as a national example to other agencies working to
make better decisions around infrastructure investing. Specifically,
this project:
Creates a rail/transportation system powered by
electricity, generated primarily by renewable energy.
Weaves consideration of effective use of natural
resources into all policies--planning, design, construction,
maintained, etc.--and has developed practices which analyze energy
expenditures for the lifecycle of construction--from the extraction of
base material (aggregate, etc.), to transport, to use in construction
efforts.
Considers future weather risks (wildfires, flooding and
temperature) in design to ensure that the facility is built to
withstand those events in the future and can be returned to service
more efficiently.
Better links the state's rural areas more effectively and
efficiently to the state's economic engines through a faster and more
efficient travel option, a capability that does not exist today.
Envision is just one such tool that we and others in the
engineering and consulting business utilize. Regardless of which one is
used, these types of sustainability and resilience tools allow our
decisions to be more informed by future-focused science, demographics,
socioeconomics, and best management practices--specifically including
the risk-based frameworks that we have developed to not only plan and
execute infrastructure projects better, but also to pick the better
projects to pursue. This ``better'' project selection should be based
on a holistic, life-cycle, long-term impact perspective versus a short-
term capital cost assessment. The first perspective specifically takes
into account the negative impacts of emitted and embodied carbon as
well as the positive physical and social benefits of climate adaptation
and infrastructure resilience. Most of these decisions are currently
driven by upfront costs, operational expediency, and worrying about the
next quarterly report, election, or budgeting cycle. This in turn leads
to a false narrative where infrastructure capital improvement budget-
making is based on what money is available after ``locked-in''
operations and maintenance budget items are accounted for.
Incorporating Equity and Social Justice Realities
Equity and social justice, which have been increasingly highlighted
over the past year, are critically important considerations from the
sustainability perspective. In the context of a changing climate,
studies have indicated that disasters and critical events
disproportionally impact underserved and frontline populations--a
notable ongoing example being the COVID-19 pandemic, which is
underscored by our past experiences with extreme natural disasters such
as major hurricanes, droughts and earthquakes. Frontline round-the-
clock workers (including in essential transportation and infrastructure
services) are disproportionately women, representing two-thirds of the
frontline worker population, and minority populations, including Black,
Hispanic, and Asian-American/Pacific Islanders.\2\ Over the long term,
climate change will thus affect some groups more than others.
Transportation infrastructure, including how transportation is powered
and where transportation and transit systems are accessible, underscore
these challenges. Equity and improved economic opportunity need to be
central tenants of Federal climate action, especially as it relates to
transportation and infrastructure.
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\2\ A Basic Demographic Profile of Workers in Frontline Industries.
April 2020. Center for Economic and Policy Research. https://cepr.net/
wp-content/uploads/2020/04/2020-04-Frontline-Workers.pdf
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The current and future impacts of climate change, including sea
level rise and other flood risk hazards, higher temperature, and
wildfires have time-and-time-again placed an uneven burden on our less
protected frontline communities--whether they be urban or rural.
Further, each event comes with long-term economic and social costs.
There are immediate effects to livelihood following events, such as
disrupted and suspended transit service following Hurricane Sandy,
limiting mobility for transit-dependent populations. There are also
long-term effects due to these events, including social and financial
insecurity for populations that were already socially vulnerable.
Resilient infrastructure is at the heart of limiting the effects of
these events and enabling agencies and communities to rebound more
quickly to continue to provide needed services to their communities.
Amidst this social backdrop, climate change poses both an
opportunity to expand upon the role of infrastructure to provide social
benefits and opportunities for our communities and simultaneously poses
a challenge to ensure that infrastructure is resilient to future
conditions. In order to ensure that our communities are prosperous and
equitable now and into the future, we need to expeditiously address
both of these challenges. To inform Federal policies, frontline
communities will need to be engaged where they are and truly listened
to in order to gain their buy-in and achieve equitable outcomes. WSP
works hand-in-hand with these communities and populations, working to
hear and address their challenges at the local scale by providing the
analytics and data needed to inform equitable decisions and the
engineering solutions needed to holistically address climate change.
Especially as it relates to infrastructure and the built
environment as it supports communities, we have an opportunity to make
positive changes through an equity lens in helping people imagine and
realize their own futures. In our business, we strive to create more
dialogue, inclusion, and empowerment to increase trust in our work.
WSP's own ``walk the talk'' performance measures provide an
illustration of how this can be incorporated into the business ethic of
a major company, which in many cases can also apply to governmental
institutions and agencies. WSP USA's equity lens for our three key
performance metrics specifically looks at:
1. Reduction in operational GHG emissions between 2018 and 2021
a. Acknowledge the documented frequency and impacts of racism in
America along with the disparate impacts of air quality and climate
change issues.
b. Engage and listen to communities and their accounts and
experiences of inequity and harm caused by environmental and racial
injustices and group outcomes.
c. Provide feedback to stakeholders and focus on programmatic
reform ideas.
d. Take action to address climate change with regard to equity,
social justice, and economic outcomes.
2. The percentage of our services having a positive effect on the
environment
a. Develop a process to measure Green Revenue.
b. Focus on how this impacts our shareholders, employees,
partners, environments, and the communities we serve.
c. Educate communities on implementing solutions to reduce
energy use, water consumption, GHG emissions, supply chain disruptions,
enhance Green Revenue, and to minimize impacts to underserved
communities.
3. The percentage of women in management positions
a. Ask all leaders to be role-models for our commitment to
inclusion, diversity, equity, and social justice.
b. Actively sponsor rising women.
c. Ensure the infrastructure is in place to support a more
inclusive and flexible workplace.
With this type of mindset, investment in transportation and
infrastructure today has the potential to use our abundance of
available data, best practices from across the globe, and American
ingenuity to tailor technical solutions to the needs and priorities
from constituents on the ground-level to ensure our most vulnerable
realize benefits of infrastructure upgrades while society at large
continues to benefit from the additional positive externalities from
design excellence in infrastructure.
Better Strategies for Both Urban and Rural Areas
Sustainability and resilience considerations make sense everywhere
in the country--in urban and rural areas. Specific to rural
communities, these practices make sense for all investments--
particularly regarding resilience, where periods of loss of service can
be devastating in these communities. There are plenty of examples over
the past years where impacts were very impactful in rural areas,
including recent power loss in Texas and the Gulf Coast from both
winter and coastal storm events, loss of water treatment facilities
requiring residents to boil water throughout the southeast, and in road
washouts and landslides in Vermont, North Carolina, Colorado, Michigan
and Puerto Rico which severed access to communities for extended
periods, or required lengthy and costly detours to reach services.
Often recovery times in rural areas can be extended as the systems span
larger geographies and resources may be limited. These past examples
underscore the need to build more resilient systems to minimize
potential weather-related impacts in rural as well as urban areas.
Leading the Way Through Example as an Industry
The engineering community needs to lead, and has in many cases
taken the lead, in changing the way we think about infrastructure
investments and decisions. Of course, in the consulting industry,
companies such as mine work with and on behalf of government and
private sector clients. Many of these clients have made extraordinary
commitments to address the cause of and respond to climate change. The
field has been transforming itself over the past few years in ways that
I personally have not seen before. Specifically, we have recently seen:
Major companies take on the role of continually refining
business operations so as to reduce the emissions impact of their
operations, supply chains, and product life cycles while enhancing the
resilience and equity of their business.
Communities adopting policies that enable traditionally
underrepresented communities to understand and develop strategies for
targeted investments aimed at reducing climate change-related impacts
on their citizens.
Agencies overseeing major construction projects analyzing
all of the processes and procedures from point of source origin to the
point of construction and end of useful life to reduce to the extent
possible GHG emissions.
Government leaders (for example, in Hawaii, California,
Colorado, Minnesota, New York, Michigan and Massachusetts) among others
requiring the consideration of future environmental conditions (not
past conditions) as an element of major capital expenditures (in some
cases, including such a consideration in State environmental laws).
Ongoing dialogue among risk professionals who are
starting to recognize that the unquantifiable factors of equity,
environment quality, and community resilience need to carry a new, and
heavier, weight in decision-making.
Public bonding firms requiring a risk assessment on
potential bond-funded actions as it relates to climate change.
Recommendations
Moving forward we have an opportunity to make further progress and
take steps to ensure that the Nation's built environment and critical
infrastructure is more resilient and secure as conditions continue to
change. There are many recommendations for action that would help to
secure a more adaptive future. Some of the more important ones include:
Elevate climate change and extreme weather impacts on
resilient infrastructure as a National concern. Federally-supported
infrastructure programs such as that for transportation often include
as an enabling statement that certain factors or issues are of National
concern. For example, transportation legislation requires the
consideration of numerous planning factors in the development of
transportation plans, including transportation system resilience. All
Federally-funded infrastructure programs should be reviewed from the
perspective of how extreme weather and climate change considerations
factor into planning and decision-making.
Encourage and enable communities and agencies to define
and quantify the risks they face with respect to climate change. It is
critical that the technical approaches be available for making the case
on the rationale for reducing GHG emissions and enhancing
infrastructure resilience. This can only be done through methods which
include quantitative consideration of risks. One of the major
advancements in engineering decision-making occurred decades ago when
the U.S. Army Corps of Engineers developed a benefit/cost methodology
in response to Federal water resources legislation. The benefit/cost
methodology has been a mainstay of engineering analysis since. A
similar introduction of risk-based assessment approaches is now
warranted. This assessment needs to compare real dollar costs to
associated weighted risks of future damages and loss of service from
climate change and extreme weather.
Include in this assessment approach the use of a life
cycle perspective that considers all possible points of future failure.
Unfortunately, this is very seldom considered in today's life cycle
assessments. The assessment should recognize that some of the data and
tools used today as part of engineering decision-making are very
limited (such as 100-year flood plain maps).
Support the consideration of equity and social justice in
climate change and adaptation decisions. This should result in a shift
from traditional measures of disproportionate impacts like those
outlined in the National Environmental Policy Act (NEPA) to ones that
instead seek to overcome inequities in the distribution of
infrastructure benefits and negative environmental impacts (e.g.,
degraded air and water quality).
Provide incentives (for example, grants or tax
incentives) for incorporating future proofing actions and social equity
into project designs. Such incentives could motivate innovation and
creativity in the development of adaptation strategies. This would
include the provision of funding as part of Federally-mandated planning
processes to consider climate change as part of the planning process
(for example, U.S. Code Title 23 for transportation planning).
Encourage a multi-jurisdictional, multi-sectoral, and
multi-disciplinary structure for assessing climate change-related risks
among States and communities. Such a structure would facilitate efforts
to combine the interests of communities, businesses, infrastructure and
environmental stakeholder agencies who all recognize the concern, but
have no guide for how to address policies that assume conditions will
not change. This would also include the dissemination and sharing of
information on the institutional structures and program components that
permit such collaboration.
Adopt policies that encourage the rebuilding of extreme
weather- or climate change-related failed or disrupted infrastructure
that ensures the causes of such failures are understood and future
protections are incorporated into new designs. Similar policies should
continue to be adopted that reduce GHG emissions as our understanding
of the contribution of such emissions to climate change and degraded
air quality.
Develop performance metrics that allow agencies to
monitor changes in underlying conditions or contributing factors to
climate change. The Federal government has encouraged the use of
performance-based planning and programming for Federally-funded
investments. Our experience is that traditional measures such as impact
on road congestion or emissions have been the most-used metrics.
Measures relating to the outcomes of public policies, for example,
those relating to public health and system resilience, have in contrast
been sparse. Illustrative measures for such types of outcomes should be
developed and disseminated among the agencies responsible for
infrastructure. This could include metrics relating to the social cost
of carbon and the risks to infrastructure and communities resulting
from a continuing growth in GHG emissions.
Support research on the continuing and evolving science
and technology phenomena that exacerbate climate change impacts or that
conversely can help mitigate and/or adapt to such changes. Climate
science has made major strides over the past decade as improved data
and analysis techniques have provided the tools for advancing our
understanding of climate/Earth relationships. By the very nature of the
uncertainty associated with future environmental conditions, continuing
to collect data and revise our understandings based on the new evidence
will be fundamental to an effective National resilience and adaptation
strategy.
Closing
As a company, WSP is committed to its responsibilities for helping
to lead the way by reducing its own emissions footprint and
facilitating more resilient and sustainable infrastructure in a way
that also advances equity. The clients we advise and serve have
challenged us to develop and implement more future focused, sustainable
and resilient strategies for them as well. This makes sense from a
business perspective; from a good governance perspective; and from a
sustainability perspective. I have no doubt that this is the future of
infrastructure development in our Nation. National policies that
encourage the development of this approach to infrastructure
development would provide a catalyst for reaching this future sooner.
Thank you for the opportunity to provide you this testimony.
Mr. DeFazio. Thank you, Mr. Lewis.
And the final witness, Mr. Charles Hernick.
Mr. Hernick. Thank you, Chairman DeFazio, Ranking Member
Graves, and members of the committee.
My name is Charles Hernick. I am the vice president for
policy and advocacy with an organization called Citizens for
Responsible Energy Solutions.
We are a 501(c)(4) nonprofit that engages policy makers and
the public about responsible, conservative solutions to address
our Nation's energy, economic, and environmental security,
while also increasing America's competitive edge.
My hope is that you will take away three things from my
testimony today:
First, that Federal policy must harness the power of free
markets;
Second, to make strategic investments in research and
development and infrastructure;
And third, and perhaps most importantly, reduce or
eliminate barriers to infrastructure deployment.
We live in unprecedented times, and 2020 was remarkable for
a lot of different reasons, but specifically in terms of
business and climate, 2020 was a record-breaking year for the
number of companies that made voluntary pledges to reduce their
greenhouse gas emissions and get to carbon neutrality by mid-
century; a record year for the number of power purchase
agreements that were made by companies to reduce their
emissions through the power that they are purchasing; a record
year for the deployment of solar and wind.
During 2020, under the most extreme economic headwinds that
I have ever seen in my lifetime, that we have seen in many
generations, solar and wind grew at 11 percent--11 percent
growth during an economic recession, and that is because demand
for clean energy is at unprecedented heights.
The free market can deliver the solutions that we are
looking for and are needed.
The types of companies that are making these voluntary
commitments and pledges are in finance. They are some of the
biggest banks that we can recognize. They are in
transportation.
I appreciate the comments and the goals set by FedEx. It is
important to see that kind of leadership.
But also in retail, from the folks that are selling us
products, whether that be Amazon, Walmart, Target, other
companies that are looking to reduce the environmental
footprint of their products and their supply chains.
The Federal Government can do more to help normalize this
race to the top in terms of environmental performance.
Mechanisms for transparency and accountability for these
voluntary actions would be popular.
A recent poll, and my organization does a lot of different
types of polling, but a recent poll in January showed that 70
percent of voters of all political stripes would support these
types of mechanisms to help assure that the voluntary
commitments that companies are making are followed through
upon, and I think that that is a reasonable course of action.
When it comes to making strategic investments in research
and development and infrastructure, it is paramount that
Congress pursues an all-of-the-above approach. That includes
efficiency, new fuels, and electric vehicles.
For a long time, fuel efficiency has focused on how we
squeeze more miles per gallon out of a car, but a new era of
carbon capture utilization and storage technologies and
deployment make it possible and make the proclamations that oil
and gas companies have been making to achieve net zero
emissions and their Scope 1, Scope 2, and Scope 3 categories a
reality. It is important to look at that.
It is also important to look at the new fuels that are
coming onto the horizon. Looking at the hydrogen economies is
important, as has been mentioned already, but also electric
vehicles.
Electric vehicles are a small but rapidly growing part of
the American fleet, and it is something that Congress should
include in its all-of-the-above portfolio.
Finally, in terms of reducing or eliminating barriers to
infrastructure deployment, too many of the big types of
projects that we need to reduce greenhouse gas emissions and
improve our environment take up to 7 years or over a decade to
permit. Congress should act immediately to codify One Federal
Decision and reduce the timeline to 2 years so that we can put
online all of the types of infrastructure in transportation, in
clean energy writ large, to reduce greenhouse gas emissions at
the pace that we need to achieve the voluntary goals that
companies have set and the goals that we know we need to
achieve globally.
Finally, that type of action would be popular, too.
Seventy-three percent of voters, again, of all political
stripes, want to see reductions in redtape and limits to
regulation that slow down unnecessary project delays.
With that I will thank you, and I look forward to
questions.
[Mr. Hernick's prepared statement follows:]
Prepared Statement of Charles Hernick, Vice President of Policy and
Advocacy, Citizens for Responsible Energy Solutions
Chairman DeFazio, Ranking Member Graves, and Members of the
Committee, thank you for the opportunity to testify today on ``The
Business Case for Climate Solutions.''
My name is Charles Hernick, and I am the Vice President of Policy
and Advocacy for Citizens for Responsible Energy Solution (CRES). We
are a 501(c)(4) non-profit that engages policymakers and the public
about responsible, conservative solutions to address our nation's
energy, economic, and environmental security while increasing America's
competitive edge.
I hope you will remember three approaches for how to reduce
emissions from my testimony:
1. So there is no confusion, it is worth stating that the time for
additional climate action is now. I say additional because the federal
government is not the only entity interested or capable of tackling the
climate challenge. Indeed, many companies, states, and municipalities
have been hard at work for decades. And Congress must remember that we
live in an era where even in the depths of a pandemic, companies large
and small have voluntarily committed to carbon neutrality by definitive
dates. Therefore, the federal policy playbook should first and foremost
harness the power of free markets--by encouraging transparency and
accountability--and empower companies to achieve their self-set goals,
not pursue heavy-handed, top-down mandates that drive up costs or
reduce options.
2. There is a meaningful role for the federal government in
reducing greenhouse gas emissions from the transportation sector. But
rather than picking winners and losers, federal policy is better
positioned to make strategic investments in research and development
(R&D) and infrastructure that serves an all-of-the-above approach
including fuel efficiency, new clean fuels like hydrogen, and
electrification (i.e., electric vehicles). The federal government
should focus on backbone infrastructure for the economy and leave room
for states to innovate on policies that are locally appropriate.
3. Finally, and perhaps most importantly, if we are to tackle the
climate challenge quickly, Congress will need to reduce or eliminate
barriers to infrastructure development. It should take two years, not
ten years, to permit infrastructure projects. Red tape is not the price
of good government; it is the enemy of good government. America could
modernize its infrastructure, reduce costs, while dramatically
enhancing environmental benefits, with a two-year approval process for
large construction projects. Among other regulatory reforms, a single
permitting timetable and timely environmental reviews and authorization
decisions must be a first-order priority, specifically codifying One
Federal Decision. The public agrees. Our polling shows that a
significant percent of voters (73 percent) support streamlining and
reforming government regulations that hamper the transition to clean
energy.\1\
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\1\ Citizens for Responsible Energy Solutions (CRES). Poll:
Republican, Democratic Voters Support Commonsense, ``All-of-the-Above''
Climate Solutions. https://citizensfor.com/pressreleases/
poll-republican-democratic-voters-support-commonsense-all-of-the-above-
climate-solutions/.
The Surface Transportation Advanced through Reform, Technology &
Efficient Review Act, or STARTER Act, introduced in the 116th Congress,
was an important effort towards reducing barriers and making targeted
investments. Thank you, Ranking Member Graves, for your leadership to
ensure state flexibility by preserving state decision-making and
rejecting new federal mandates that would dictate funding priorities
regardless of actual local needs. My hope is that Congress can build on
your effort and pass bipartisan infrastructure legislation to put
transportation sector emissions on the right trajectory.
Framing: Big Government Is Not a Pre-Requisite for Successful Climate
Policy
Before we can develop an actionable business case for climate
solutions, we must first determine how success will be defined.
Another multi-trillion dollar bill out of Congress will not be a
sign of success. Capital markets--driven by large investors and common
stockholders alike--are trained on delivering a low-carbon future.
Investors like Wells Fargo, Goldman Sachs, Bank of America, HSBC,
Morgan Stanley, and Barclays have all committed to net-zero portfolios
by mid-century.\2\ More investors are factoring climate change into
their portfolios, and it is easier than ever for Americans to align
their 401(k) plans with a carbon-free future. There is no shortage of
finance for mature clean energy technologies. Trillions in scattershot
federal spending could crowd-out private sector investment. First and
foremost, we should measure the success of our climate policy based on
how well it encourages, not competes, with investment from America's
financial industry.
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\2\ American University. Carbon Removal Corporate Action Tracker.
https://docs.google.com/
spreadsheets/d/1vf--uXsf6fo7MuNpPya2Kz82Dxte0hHgtOXimgpRA3c/edit#gid=0.
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Second, we know that low-cost, low-emissions technologies and goods
will be critical to successful climate policy.\3\ Anything short of
widespread adoption will fail to address this global issue, and
American innovation will be the key driver. Inexpensive climate
solutions are needed for global uptake in developing countries in
Africa, Latin America, and Asia, where too many people still lack basic
services. Our geopolitical adversaries are willing to undercut American
interests no matter what the implications are for climate change. That
is why the bipartisan Energy Act of 2020 was such an important down
payment on energy innovation. Affordability also matters here at home.
The impacts of the pandemic-induced recession have not been evenly
distributed across America, nor are historic environmental burdens or
the likely economic and health impacts of effects of climate change.
Price increases make life even harder for these Americans. We can
measure the success of our climate policy based on the availability of
new energy innovations and whether they are priced for easy and
widespread adoption.
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\3\ See more about CRES Forum's Climate Policy Directives at:
https://cresforum.org/climate-policy-directives/.
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Third, effective climate policy will rely on the power of free
markets. Big government mandates favor incumbent technologies and large
companies and are blind to what the free market can do. Additional
bureaucracy is disproportionately threatening to small businesses and
start-ups. Appetite for clean energy--by people and companies--has been
growing steadily for decades and as a result, the private sector and
effective state-level policies have achieved the goals of President
Obama's Clean Power Plan carbon reductions 10 years ahead of time.\4\
Indeed, it is a favorable American business environment that gives
space for a record number of companies to put themselves on a path to
net zero and differentiate themselves on ``clean.'' Congress should
encourage more of that race to the top, and successful climate policy
can be measured based on whether the free market is incentivizing
behavior and activities that support our climate goals.
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\4\ Bloomberg NEF and Business Council for Sustainable Energy
(BCSE). Sustainable Energy in America 2021 Factbook. https://bcse.org/
factbook/.
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And finally, America's interests and American jobs should be our
number one priority when developing a clean transportation
infrastructure for the next century. The U.S. is more energy
independent than we have been in decades and we should not lose that in
the race to reduce emissions. This means that we need to address the
entire supply chain of materials and technologies. Domestically sourced
critical minerals and metals utilized by domestic manufacturing
facilities could supply the development of a clean transportation
sector at home and abroad. It is encouraging that new battery plants
are being built in the U.S. to align vehicle supply chains with the
domestic market. After a generation of hemorrhaging industrial jobs
overseas, this realignment will take some time. We can directly measure
the effectiveness of our climate policy in our job numbers,
manufacturing metrics, the security of our supply chain, and our Gross
Domestic Product.
1. Harness the Power of Free Markets
When history books are written about how we solved the climate
problem, these years of the global COVID-19 pandemic will be a
surprising turning point.
At the close of 2020, the COVID relief and year-end omnibus also
included a broad modernization of our nation's energy policies. The
Energy Act of 2020 was the culmination of many years of significant
bipartisan effort and marks the first comprehensive energy legislation
passed in over a decade. It combined bipartisan provisions from the
Senate (S. 2657 American Energy Innovation Act) and House (H.R. 4447
Clean Energy Jobs and Innovation Act) bills and reflects the priorities
of many members of Congress to accelerate the development of
technologies needed to meet our environmental and economic challenges.
The Act provides a timely and critical investment in the advancements
in energy efficiency, energy storage, advanced nuclear, carbon capture,
carbon removal, renewable energy, and other approaches needed to
decarbonize our economy. Importantly, it brought bipartisan compromise
on the phaseout of hydrofluorocarbons, which are greenhouse gases with
extremely high warming potential.
The $900-billion package could inject at least $34 billion in low-
carbon spending into the country's economy over the next decade.\5\ It
contains more than $19 billion in the form of new authorizations on
clean energy research, development, and demonstration by the Department
of Energy, including $6.8 billion for nuclear, $5.3 billion for carbon
capture, use and storage, and $1 billion for energy storage. Congress
should fully appropriate these funds. The package also added an
estimated $15 billion over 10 years in new federal tax credit
enhancements on top of existing credits.
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\5\ Bloomberg NEF and Business Council for Sustainable Energy
(BCSE). Sustainable Energy in America 2021 Factbook. https://bcse.org/
factbook/.
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As COVID-19 is brought more under control over the course of 2021,
the economy will further rebound. The case for additional stimulus is
limited, and overspending risks overheating the economy.
Leading businesses are making important commitments and strides to
reduce emissions: there is a new, encouraging baseline.
There are three basic ways to reduce emissions from the
transportation sector: increase (fuel) efficiency, better utilize low-
or zero-emissions fuels, and pursue electric vehicles. Companies across
the U.S. economy voluntarily committed to renewable energy, as
evidenced by more than 10.6 GW of corporate renewable energy purchases
occurring in 2020, according to the Renewable Energy Buyers
Alliance.\6\ Companies across retail, big tech, and hospitality, among
other sectors, have stepped up and made voluntary commitments to
decarbonize their operations, and that is also translating to a
transportation or fleet electrification strategy.
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\6\ Ben German. ``Ranking 2020's corporate clean energy deals.''
Axios, February 11, 2020. https://www.axios.com/renewable-energy-
companies-amazon-google-18db639c-e1e5-416f-8887-
848e601131c6.html.
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Traditionally, fuel economy has focused on increasing the miles per
gallon (mpg) of the internal combustion engine. Internal combustion
engines will always emit carbon emissions as a product of the
combustion process. But with current technologies, it is possible to
reduce, and perhaps someday fully decarbonize, the sector. Oil and gas
companies are focused on reducing upstream emissions, as well as
sequestering and offsetting carbon. Despite incredible economic
challenges this past year, oil and gas majors Total and Royal Dutch
Shell announced ambitious plans to reach net zero greenhouse gas
emissions by 2050, echoing similar announcements made by BP and Repsol
in 2019. Total, for example, aims to achieve net-zero Scope 1 and 2
emissions by 2050 and it is targeting carbon neutrality for all its
Scope 3 production and energy products sold in Europe by 2050.\7\ Oxy
Low Carbon Ventures, a subsidiary of Houston based Occidental
Petroleum, delivered its first batch of ``carbon-neutral oil'' this
past January.\8\ Fueling up with carbon-neutral gasoline can only be
part of the future through an all-of-the-above approach that is open to
innovation in all sectors.
---------------------------------------------------------------------------
\7\ Francois De Beaupuy. ``Oil Giant Total Targets Carbon
Neutrality in 2050.'' Bloomberg Green, May 5, 2020. https://
www.bloomberg.com/news/articles/2020-05-05/total-targets-
carbon-neutrality-in-2050-as-profit-plunges-
35?cmpid=BBD051220_GREENDAILY&utm_
medium=email&utm_source=newsletter&utm_term=200512&utm_campaign=greendai
ly
\8\ Eklavya Gupte and Paula VanLaningham. ``US' Occidental supplies
first cargo of `carbon-neutral crude' to India's Reliance.'' S&P
Global, January 29, 2021. https://www.spglobal.com/
platts/en/market-insights/latest-news/oil/012921-us-occidental-
supplies-first-cargo-of-carbon-
neutral-crude-to-indias-reliance.
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Government does not need to mandate this behavior; companies are
adopting it themselves to meet consumer demand. Zero-emission fossil
fuels can be an important tool for climate policy as we transition to
cleaner energy sources, but only if we make it possible for oil and gas
companies to deliver on those promises. Government can do that by
removing barriers that currently inhibit transparency, certainty, and
trust in carbon offset markets--no mandate is required.
Another cost-efficient way to significantly reduce emissions in
vehicle fleets is by switching to low-emissions fuels such as natural
gas or propane. Propane is a promising alternative fuel in the
transportation sector for a number of reasons:
Cost savings. While the energy content of propane is
lower than that of gasoline or diesel,\9\ propane has a lower fuel cost
per mile, given its lower cost of the fuel itself and the lower
maintenance costs for propane-fueled vehicles.\10\ The Propane Research
and Education Council estimates that propane vehicle fleets can
represent between 30 and 50 percent in cost savings, compared with
their gasoline and diesel counterparts.\11\ For example, when the Oak
Harbor Public School District in Washington state replaced its diesel
and gasoline school buses in 2010 with a propane fleet, it achieved an
estimated annual savings of $35,000 in fuel costs and an additional
$700 in reduced vehicle maintenance and service time.\12\
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\9\ 84,250 Btu/gal for propane, versus 112,114-116,090 Btu/gal for
gasoline and 128,488 Btu/gal for diesel. Alternative Fuels Data Center.
``Fuel Properties Comparison.'' Department of Energy, January 2021.
https://afdc.energy.gov/files/u/publication/fuel_comparison_chart.pdf.
\10\ Propane Research and Education Council. ``Driving down
costs.'' 2020. https://propane.com/
wp-content/uploads/2020/08/Superior-Plus-Propane-Case-Study.pdf. See
also National Propane Gas Association. ``Today's Propane.'' 2020.
https://www.npga.org/wp-content/uploads/2020/12/NPGA-Todays-Propane-
2019.pdf.
\11\ Propane Research and Education Council. ``Top 10 Facts About
Propane Autogas for Fleet Managers.'' September 16, 2018. https://
propane.com/2018/09/16/top-10-facts-about-propane-
autogas-for-fleet-managers/.
\12\ Alternative Fuels Data Center. ``Washington School District
Cuts Costs and Improves Air Quality with Propane Buses.'' April 09,
2019. https://afdc.energy.gov/case/3075.
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Emissions reductions. In 2019, a study from West Virginia
University found that propane school buses reduce emissions of nitrogen
oxide by 96 percent, and of carbon dioxide by 13 percent, compared to
diesel-fueled buses.\13\
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\13\ Propane Research and Education Council. ``West Virginia
University study finds propane school buses dramatically decrease
harmful emissions.'' August 5, 2019. https://propane.com/
environment/stories/west-virginia-university-study-finds-propane-
school-buses-dramatically-
decrease-harmful-emissions/.
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Energy security. Around 90 percent of the propane and
natural gas used in the United States is produced domestically,\14\ so
it is a fuel source that does not imply dependence on foreign nations.
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\14\ Propane Research and Education Council. ``Top 10 Facts About
Propane Autogas for Fleet Managers.'' September 16, 2018. https://
propane.com/2018/09/16/top-10-facts-about-propane-
autogas-for-fleet-managers/. See also U.S. Energy Information
Administration. ``In 2018, 90% of the natural gas used in the United
States was produced domestically.'' July 09, 2019. https://www.eia.gov/
todayinenergy/detail.php?id=40052.
Outside of fossil fuels, electric vehicles make more sense than
ever before and continue to be key to a cost-effective, consumer-driven
approach to reducing emissions from transportation. Even though they
are still a small percentage of cars on U.S. roads, widespread adoption
may not be far off thanks to heightened innovation and more favorable
federal and state policies. Costs for electric vehicles are coming down
each year, charging at home is less expensive, recharging options and
locations are growing, and limited lifetime maintenance costs are
appealing. Many drivers are already saving money in the long run, with
approximately $800-$1,000 in savings per year on fuel alone.\15\ The
best role for government is to simply allow the market to match
transportation options with consumer needs. Steady federal policy,
innovative state programs and more choices for consumers will keep
pressure on lowering prices while also lowering emissions.
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\15\ Benjamin Preston. ``EVs Offer Big Savings Over Traditional
Gas-Powered Cars.'' Consumer Reports, October 08, 2020. https://
www.consumerreports.org/hybrids-evs/evs-offer-big-savings-
over-traditional-gas-powered-cars/
#: :text=Fuel%20savings%3A%20The%20study%20shows,an
%20equivalent%20gasoline%2Dpowered%20car.
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There are lessons to learn from the electric power sector for
transportation: the clean energy business is unstoppable.
For over a decade, electric power sector emissions have steadily
decreased. This is not the case for the transportation sector, which
has been the largest source of U.S. greenhouse gas emissions since
2016. Except for 2020, due to the pandemic, transportation emissions
have been steadily rising. So as attention focuses on decarbonizing
transportation, we should consider lessons learned from the power
sector.
In 2020, the U.S. renewable energy sector grew 11 percent and added
27.8 gigawatts of capacity to meet this surging demand for clean
energy.\16\ Solar and wind power had record years, respectively, and
now Americans receive 20 percent of their electricity from renewable
sources, including hydropower. These remarkable trends are due to
abundant options for low-cost, low- or zero-emissions power generation
available to the private sector. And they are the result of decades-
long federal support for innovation and early-stage deployment, tax
incentives for nascent industries, and complementary state policy.
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\16\ Bloomberg NEF and Business Council for Sustainable Energy
(BCSE). Sustainable Energy in America 2021 Factbook. https://bcse.org/
factbook/.
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As targeted federal investments continue to pay off in
transportation, we should expect free-market forces to continue to
drive transformation in the sector. Americans are interested in low-
carbon solutions and empowering them to make those decisions would be
popular. A recent CRES poll found that over 60 percent of Americans--
including nearly half of Republicans--support a federal consumer-
oriented system that would help make transparent which companies have
followed through on their commitments to report and reduce
emissions.\17\
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\17\ Citizens for Responsible Energy Solutions (CRES). Poll:
Republican, Democratic Voters Support Commonsense, ``All-of-the-Above''
Climate Solutions. https://citizensfor.com/pressreleases/
poll-republican-democratic-voters-support-commonsense-all-of-the-above-
climate-solutions/.
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Normalizing transparency and reporting for sustainability markets such
as voluntary carbon trading will help drive competition and
investment.
America's private and public sectors have made great strides in
deploying clean energy and reducing emissions, but there is currently
no way for these accomplishments to be documented and organized so that
their collective impact can be better understood by investors and
consumers.
Normalizing systems for carbon reporting will increase transparency
and accountability, increase investment in clean energy and offsets,
and further decrease U.S. greenhouse gas emissions without imposing
unnecessary mandates, costs, or bureaucracy.
This type of limited federal effort could help protect investors
and maintain fair and orderly functioning of voluntary carbon markets.
State compliance markets would still need their own enforcement
mechanisms. But for private actors in the voluntary carbon space,
following federal transparency and reporting guidance could crowd-in
investment the way that Energy Star mainstreamed energy efficiency in
the early 1990s through a voluntary program. Perhaps most importantly,
government can facilitate certainty and trust in voluntary, industry-
established greenhouse gas emissions registries and bring greater
definition to tradable carbon offsets without inventing a new federal
system that attempts to supersede state progress.
In addition to helping industry meet climate change goals, this
framework for carbon transparency would help U.S. companies outcompete
foreign rivals, particularly Chinese companies that depend on high-
carbon sources of energy for industry. Indeed, our polling shows that
72 percent of all voters, and 61 percent of Republicans, support
requiring both foreign and domestic companies to label their products
based on the type of energy used in production, and equal numbers
support requiring government contractors to disclose carbon emissions
in the production of their goods and materials.\18\ Consumers want to
know that their hard-earned dollars support companies that do not harm
the planet. Providing easy access to that information will drive
business back to American industry, boosting American jobs, our
economy, and our national security.
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\18\ Citizens for Responsible Energy Solutions (CRES). Poll:
Republican, Democratic Voters Support Commonsense, ``All-of-the-Above''
Climate Solutions. https://citizensfor.com/pressreleases/
poll-republican-democratic-voters-support-commonsense-all-of-the-above-
climate-solutions/.
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2. Make Strategic Investments
Transportation infrastructure is central to our economy, our way of
life, and our standard of living. However, much of our nation's
infrastructure is in disrepair and in need of massive re-investment.
Modernizing America's infrastructure should include investments in more
efficient technologies, smart and reliable ``clean energy-ready'' power
grids, and cleaner, more efficient transportation systems. When
planning infrastructure investments, the federal government should help
accelerate emissions reductions by prioritizing clean energy projects,
including those that reduce highway-related emissions, and promoting
public-private partnerships to build out alternative fuel
infrastructure. Notable legislation that accomplishes these goals
includes but is not limited to:
Provisions on cost-effective deployment of resilient
infrastructure and mitigation strategies (Title VII) and accelerated
project delivery (Title I--Subtitle B), included in the Surface
Transportation Advanced through Reform, Technology & Efficient Review
Act, or STARTER Act (H.R. 7248).
Promoting Resilient Operations for Transformative,
Efficient, and Cost-saving Transportation (PROTECT) Grant Program (Sec.
7001 of H.R. 7248 STARTER Act; Sec. 1407 of S. 2302 ATIA) that would
allow states to make resiliency improvements and help protect roads and
bridges from natural disasters such as wildfires, hurricanes, floods,
and mudslides.
Electric Vehicle Mobility Area Planning Act (EV MAP Act).
The EV MAP Act would create a grant program to map optimal locations
for electric vehicle charging stations, giving private developers and
consumers the information necessary to strategically invest in new
charging infrastructure.
Other Emissions Reduction Provisions (S. 2302 ATIA
Subtitle D--Climate Change, Sec. 1404, 1402, 1406 & 1408). Supports the
development of a suite of options to reduce emissions across the
transportation sector. These multifaceted solutions can include the
authorization of a new program to help states reduce truck idling at
ports (ATIA Sec. 1402; H.R. 2 Sec. 33191), the creation of a grant to
support innovative, multimodal solutions to congestion relief (ATIA
Sec. 1404), and the reauthorization of the Diesel Emissions Reduction
Program (ATIA Sec. 1408; H.R. 2 Sec. 33301).
Competitive Grants for Alternative Fuel Infrastructure
(Sec. 1303 of H.R. 2; Sec. 1401 of S. 2302 ATIA) would help states and
localities to build hydrogen, natural gas, and electric vehicle fueling
infrastructure along designated highway corridors, which lack such
infrastructure.
Carbon Reduction Incentive Programs (Sec. 1213 of H.R. 2;
Sec. 1403 of S. 2302 ATIA) would distribute funds to states for
projects that will yield significant reductions in greenhouse gas
emissions from surface transportation and will help states meet
emissions reductions goals.
3. Streamline Regulation and the Permitting Process
Minimizing administrative burdens and duplicative regulations
promotes better environmental decision-making in a much more cost- and
time-efficient manner. The complexity of current U.S. permitting
processes leaves substantial opportunities for improvement that would
increase predictability, shorten the time to project delivery, and
reduce costs while still providing for robust consideration of public
and environmental concerns. Historically, there has been strong
bipartisan support for incremental and common-sense improvements to the
environmental review and permitting process, and we encourage the
following initiatives to promote better environmental policy decision-
making. The permitting process must be reformed to ensure effective
stewardship of taxpayer resources--to scale clean energy rapidly and to
create good-paying American jobs.
As introduced by Representative Davis, codifying the ``One Federal
Decision'' (Executive Order 13807) through the One Federal Decision Act
would consolidate permitting decisions for major infrastructure
projects into a single environmental document, completed within two
years, with a review schedule set by the federal lead agency. The
National Environmental Policy Act (NEPA) could be further modernized
through proposals such as the Building U.S. Infrastructure through
Limited Delays & Efficient Reviews (BUILDER) Act (H.R. 8333) (Rep.
Graves (R-LA)). This legislation's overriding goal is to provide better
environmental decisions in a cost- and time-efficient manner. Codifying
this careful NEPA modernization will bring a higher level of certainty
to critical infrastructure projects, enabling planned clean energy
construction to move forward while continuing to adhere to important
environmental standards.
Additionally, legislative proposals such as Rep. Kelly Armstrong
and Sen. Portman's Federal Permitting Reform and Jobs Act should be
included in any infrastructure proposal.
Fast 41 is a model of how permitting should be done, scheduled to
expire in December 2022.
As an example of how a voluntary mechanism for streamlining the
federal permitting process can yield promising results, I will briefly
mention Title 41 of the Fixing America's Surface Transportation Act
(FAST-41) of 2015, or FAST-41. It created the Federal Permitting
Improvement Steering Council (FPISC), to provide a one-stop shop in the
federal government and coordinate a single schedule for projects across
permitting agencies. As stated in the Permitting Council's FY2020
Report to Congress: \19\
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\19\ Federal Permitting Improvement Steering Council. Annual Report
to Congress. Fiscal Year 2020. https://www.permits.performance.gov/
sites/permits.dot.gov/files/2021-01/FY%2020
20%20FPISC%20Annual%20Report%20to%20Congress.pdf.
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The four voluntary, large-scale projects \20\ that
completed the federal permitting process in FY 2020 and that
voluntarily applied for FAST-41 coverage represent an average of more
than 10 years in time savings, 20,000 permanent and temporary jobs in
construction, and more than $45 billion in economic investment.
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\20\ The four projects are the Alaska LNG pipeline, Borderlands
Wind, Cardinal-Hickory Creek Transmission Line, and Gemini Solar.
Gemini Solar and Alaska LNG are some of the largest of their kind in
the country.
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For one of these projects, Gemini Solar, the cost of the
Environmental Impact Statement (EIS) alone ($6.2 million), represented
an estimated cost savings of $12.6 million from these time savings.
The average completion time of an EIS between 2010 and
2018 was 4.5 years. Projects that voluntarily applied for FAST-41 and
that completed the NEPA process during FY 2020 finalized an EIS in only
2.5 years--a 45 percent time reduction.
For the Cardinal-Hickory Creek 345 kV Transmission Line
Project, 50 percent of the federal reviews and authorizations were
completed ahead of schedule and the NEPA process was completed in 3.3
years, or 27 percent faster than the Council on Environmental Quality
(CEQ) average timeline for projects.
Conclusion
Over the past decade, America has reduced its carbon emissions more
than any other country. This was achieved through an all-of-the-above
energy policy combined with public and private sector investments in
American innovation. There is no need to reinvent this wheel.
Fortunately, the business case for climate solutions also
illustrates the best business practices for climate solutions. Future
climate policy, including modernizing the transportation sector to
further reduce U.S. emissions, can build upon our past success by
harnessing instead of hampering the power of free markets; maintaining
American leadership through strategic R&D and infrastructure
investments, and prioritizing reforms to reduce or eliminate regulatory
barriers--particularly those that inhibit infrastructure development,
domestic manufacturing, and American jobs.
Mr. DeFazio. I thank the gentleman.
That concludes the testimony. We will now proceed to
questions.
Mr. Konar, in your testimony you said that in order to
achieve the Biden administration's goal of adding 500,000 new
EV charging stations over the next 10 years--and I don't even
know if that is enough--that the Federal Government should be
the bridge.
And then, Mr. Rudd, you also mentioned the importance of
interoperability of charging infrastructure. As we all know,
Tesla is proprietary, and has a great network, but no one else
can charge there. And I think it is essential that we have an
interoperable charging network.
So could the two of you address the appropriate role for
the Government in these areas, quickly?
Mr. Konar. Sure. Go ahead, Mr. Rudd.
Mr. Rudd. Yes, as I said in my prepared comments, we
believe that, ultimately, charging infrastructure needs to be
universally available throughout the country, and especially in
rural areas.
At the same time, we also believe that there needs to be an
investment in innovation, in terms of defining those standards
and allowing for various forms of charging. So not necessarily
charging stations, but perhaps things like dynamic charging. So
as you are driving over large freeways or highways that are
frequently used, you have the ability to charge your vehicles
as you move.
Those standards will lead to the opportunity for innovation
and, at the same time, will create the opportunity for forward
thinking, like smaller batteries in vehicles, if you have
things like dynamic charging. So we think, before we embark on
this journey and significant investment is made, that we spend
some time to think about defining those standards so that we
can all work together to achieve a common outcome, whether it
is private, or whether it is public agencies.
Mr. DeFazio. OK. Mr. Konar?
Mr. Konar. Congressman DeFazio, the two points I would like
to make is, first, that we have done this before, right? So I
feel very comfortable that the retail sector in this industry
can actually respond to bring chargers in.
When you look at renewable fuels and biofuels, which 10
years ago nobody wanted to use, with the right Government
policy, which was some tax credits and incentive structures for
people like us to adopt this, we have been able to bring
biofuels in a big way into the transportation infrastructure
and significantly reduce the carbon footprint. Just the amount
of biofuels Pilot sells, we have taken the equivalent of 1
million cars off the road. So I think this is possible with
good Government policy.
But we need to be bridged. At this point in time, the
economics of standalone chargers and investing in chargers is
very challenging, just because there is so much range anxiety,
and not enough people are using electric vehicles. So what
would be very helpful, from a policy perspective, is if the
Government allows us to bridge, through help either from tax
credits like we have done on wind and solar energy, or through
grants in developing chargers, so that companies like us can go
out and provide a ubiquitous network throughout the country so
that there is adoption of EVs.
Mr. DeFazio. OK.
Mr. Konar. And if you do that over some period of time, we
will get to a good solution. Thank you.
Mr. DeFazio. Great, thank you.
Mr. Smith, it is a very ambitious goal to be carbon neutral
by 2040. Is this purely a business decision, or is your
objective also centered around concern about and a need to
reduce carbon pollution?
Mr. Smith. Well, it is some of both, Mr. Chairman. Our
customers are increasingly focused on this issue. They want to
do business with transportation providers who are
environmentally responsible.
But we also, as a commercial enterprise, have to produce
for our shareholders. And we are convinced--in the vehicle
sector we have about 200,000 vehicles in operation. Three-
quarters of them are pickup and delivery vehicles. A little
less than one-quarter of them are over-the-road tractors, which
drive, in this country, 2.5 billion miles per day.
So battery-powered vehicles for pickup and delivery, which
we began to pioneer over 10 years ago--and I strongly advocated
the Government support for the acquisition of electric
vehicles--have now reached the point where the positive profit
accretion from about 24 or 25, you will get both the
environmental benefits, and you will get better economics.
The operating cost of an electric pickup and delivery
vehicle, like the new BrightDrop, electric pickup and delivery
vehicles that General Motors just introduced, will have an
operating cost that is about 44 percent of what an internal
combustion-powered equivalent vehicle would be. So it is really
just the acquisition cost, and that is coming down because of
battery production efficiencies, and then the charging
infrastructure. So we think there will be a positive return on
that.
Over-the-road vehicles, that is harder, but electric
vehicles are on the way. We have some on order.
In aviation, that is the most intractable problem because
of the difficulty and scaling up sustainable aircraft fuels.
And that is why we made this big push to come up with scalable
carbon sequestration methodologies led by the premier
environmental university establishment in the world, the Yale
School of the Environment.
Mr. DeFazio. OK, thank you, Mr. Smith. My time has expired.
Mr. Graves? No, sorry. I had a list.
Mr. Crawford?
Mr. Crawford. Thank you, Mr. Chairman.
Mr. DeFazio. You are recognized for 5 minutes.
Mr. Crawford. I appreciate that. Thank you to the witnesses
for being here. I just got a couple of quick questions. I will
start with Mr. Hernick.
America's greenhouse gas emissions are now below 1990
levels. How do we ensure that our good work here isn't
sabotaged by China's increased use of polluting materials and
activities?
Mr. Hernick. Congressman Crawford, I appreciate the
question, and it is a very important one for us to think about.
China is the number-one greenhouse gas emitter in the
world, and we have no reason to believe that they will be
honest or transparent about their carbon emissions and what
they are doing to reduce their emissions, if they do anything.
Transparency is their enemy. And we know that China will do
anything to undercut us, from an economic standpoint.
So I think that what we need to be able to do is to pursue
an all-of-the-above approach that focuses on cost reduction, so
that American solutions that are clean are among the least
expensive in the world. The climate challenge is a global one,
and we need folks to be able to uptake American-made solutions
in parts of the developing world, including Africa and Latin
America, where folks are still looking to turn on the light
switch, or get their first car.
And so that is why focus on cost reduction for customers,
instead of heavy-handed Government approaches is going to be
the way to go.
Mr. Crawford. Thank you, Mr. Hernick. I have a question for
Mr. Allen.
China heavily subsidizes its national industry. Sometimes
they even own the companies that are building their
infrastructure. How do cheaper prices abroad affect your
business model?
Mr. Allen. Thank you, Congressman. That is a great
question. And clearly, there are numerous published reports now
about foreign state-owned enterprises and foreign governments,
and the way they provide subsidies to lower prices. That is
absolutely happening every day in America right now on the
battery system front.
I agree with Charles' comment. The way around this is to
produce these products in the United States. We could use
Federal help on the investment side for Buy America.
But today most of the actual battery cells are not produced
in the United States. They are produced in China, Korea, Japan.
Now, this is something that I hope the committee addresses
quickly, by providing incentives to bring that technology to
the United States that would bring intellectual property here,
and create numerous wonderful manufacturing jobs if we could
produce the actual cells here, in the United States.
Mr. Crawford. Thank you for the response.
Mr. Chairman, I will yield back the balance of my time.
Mr. DeFazio. Thank you, Mr. Crawford.
Ms. Norton?
Ms. Norton. Thank you, Mr. Chairman, and I really
appreciate this hearing. I regard climate change as the most
important issue facing our country and, for that matter, the
entire world. My questions first are for Mr. Allen and Mr.
Rudd.
The Washington Metropolitan Area Transit Authority, if it
closes down, the concourse closes down. They are prepared to
move, apparently, on electric buses, but they're finding issues
with the manufacturing industry's ability to meet demand for
battery-electric buses. And I am concerned and wonder what you
believe could be done to support the scaling up of
manufacturing to meet what is now a growing demand.
And at the same time I want to ask Mr. Rudd--because you
also mentioned the Washington Metropolitan Area Transit
Authority, and that you were beginning on a strategy for an
initial bus pilot.
So I would ask you, as well, what are the biggest
challenges to electrification, and how do you think the process
could be sped up to meet the urgency of climate change?
So first, Mr. Allen of Proterra?
Mr. Allen. Yes, we do have Proterra buses running in
Washington, DC, right now. We are very grateful for that.
I think the way to continue the acceleration of this is
really on two fronts. One is for the Government to continue the
funding for zero-emission buses and for charging. This is done
today through the FAST Act Low or No Emission Vehicle program.
That program was funded last year at $130 million, this year
$180 million. We would love to see this program enhanced, and
further investment in here. This allows agencies to really
kickstart their adoption of electrification in their transit
business.
The second is really around incentivizing the domestic
supply chain. A little bit about my comments earlier about the
battery cells, but if the--as the Federal Government makes a
commitment that they are behind electrification, and it is not
going away, and this is the trend of the future, this will
provide comfort to the supply base to be able to make the
investments necessary to ramp up production in a much faster
manner.
Ms. Norton. Thank you.
Mr. Rudd?
Mr. Rudd. Yes.
Ms. Norton. Go ahead.
Mr. Rudd. Yes, thank you, Congresswoman. With respect to
the pilot program, I think what a lot of agencies are running
into is recognizing how much capital is actually required for
the transition, because it is not necessarily the acquisition
of the vehicles or the electric buses, it really is delivering
the power and the infrastructure to support those buses that is
capital intensive.
So, in terms of the pilot, part of this is understanding
how we can most effectively deliver power, whether it is using
a portfolio of opportunities through natural gas, the normal
power grid, or through green sources of electricity. And in
facing the challenges of bringing capital to those projects, we
see that there is an opportunity for a private-public
partnership.
Certainly, there is private capital in the world that would
be willing to invest in the future of America and in the future
of electrification. And as you have heard, is that there is an
economic efficiency through electrification compared to
combustion. So I believe that there is an opportunity for
private capital to get involved, to fund some of the
significant expenditures that it takes to get these
electrification projects off the ground and running in these
larger communities.
Ms. Norton. One last question for Mr. Santana.
Mr. Santana, in your testimony you focused on zero-emission
freight trains. Now, in my district, here in the Nation's
Capital, we have one of the biggest rail hubs in the country,
leading to the Northeast and the Southeast. Is your company
looking to apply that technology to passenger railroads, as
well?
That is Mr. Santana.
Mr. Santana. If you could----
Mr. DeFazio. Respond briefly, the gentlelady has run out of
time. Just respond briefly.
Mr. Santana. This technology is very much applicable to
passenger trains, as well. The reason we have really focused on
freight is just the impact and the amount of, really, emissions
that we could eliminate by doing so.
Ms. Norton. Thank you, Mr. Chairman.
Mr. DeFazio. Mr. Gibbs?
Mr. Gibbs. Thank you----
Mr. DeFazio. You are----
Mr. Gibbs. Pardon? Oh, yes, OK, thank you. I just want to
reiterate the progress we are making in this country. The U.S.
has already reduced emissions from 2005 by 17 percent, and we
are on track to reduce our emissions from the 2005 levels by 25
percent in the next 4 years, so that is good to know. And also
I hear from companies that are working to do their part.
One of my biggest concerns I have is that, Government, we
don't pick winners or losers by our policy [inaudible] the
market function. And with technology changing as fast as it is
changing, and new technology coming on, you never know what is
going to be next. And that is why I think the role of
policymakers is maybe to have incentives, tax incentives, and
let the private sector make the determination what technology
to adopt and use.
And to go on, we talked about in this hearing the business
case for climate solutions. I would hope that this committee
would push policymakers to adopt those kind of----
[Audio malfunction.]
Mr. Gibbs [continuing]. To make sure that we don't have
regulatory hurdles and redtape and bureaucracy that stifles the
innovation and technology, because we are in an area here where
it is so important to have the R&D and adopt technologies, as--
economically at work.
And with that thought in mind, there has been a little bit
of mention about hydrogen----
[Audio malfunction.]
Mr. Gibbs [continuing]. And fuel cells. And I would like to
have someone--whoever wants to, chip in on that.
We all know--or should know--that fuel cell technology, I
think, is improving pretty fast, and that it creates two
products. One is electricity to run those electric motors in
our vehicles, and the other is actual H2O, or water, that is
actually drinkable water. And so if anybody wants to comment on
where they see what is happening in the hydrogen fuel cell
technology.
I would also say that anything we do, policywise, we should
include everything that is on the table, and not prioritize a
certain sector of energy.
So if anybody wants to chip in, like Mr. Allen on the
buses, what is going on there with their fuel cells----
Mr. Allen. Certainly. Certainly, thank you, Congressman.
So Proterra today is exclusively focused on battery-
electric vehicles. We have studied hydrogen, but today we make
a transit bus that provides over 300 miles of range within 1
day. And we find that that matches up with over 95 percent of
all the routes in North America today. So we believe that, as
energy costs come down and as the range goes up, we believe
that, at least in the transit bus world, the need for a
hydrogen infrastructure won't be necessary. The battery-
electric vehicles could handle that.
I don't think the same is true, as Mr. Smith said, for
over-the-road class A vehicles. I think today that is probably
the best application for hydrogen. But I think time will tell,
as batteries themselves get lighter and have greater range,
whether they will be able to satisfy the needs of the over-the-
road truck, along with dynamic charging for the infrastructure.
Mr. Gibbs. Let me ask you a question on the current
lifespan of batteries, what is that?
And then, do we have an issue with disposing used
batteries? How big of an issue is that?
Mr. Allen. Yes, that is a great question. So today the
Federal Transportation Authority requires our buses to last 12
years. So our battery system that we put on there will last 12
years, and will have a state of health acceptable at the end of
that, as required to be able to sell. So at the end of that
period of time, or during that period of time, we will swap out
batteries into those vehicles.
Then the batteries still have 70 percent of their life
left, state of health. So we will put them into secondary
storage. This is a fleet battery system that can provide backup
energy to the fleets and to the grid.
And then, ultimately, the batteries that we use are able to
be taken apart. The components are able to be recycled.
Mr. Gibbs. Thank you. I just got 40 seconds. I don't know
if anyone else wants to chip in on my hydrogen question.
Comments?
Mr. Konar. Congressman Gibbs, if I may, this is Shameek
Konar from Pilot.
We have been looking at hydrogen quite a bit. And there
have been a number of OEMs that are focused on hydrogen. The
real question becomes for our over-the-road customers that are
coming from, you know, L.A. to Jacksonville, the EV--the range
associated with batteries and the energy density doesn't seem
to do it.
So there definitely seems to be a lot of traction on the
hydrogen side, especially for over-the-road vehicles, where
your weight you carry has to do with how much you get paid. And
we do see a lot of interest on that. And we have been exploring
alternatives to provide hydrogen at our sites, if this does
move forward.
Mr. Gibbs. OK, thank you. I am out of time. I yield back.
Mr. DeFazio. I thank the gentleman. I will just comment. I
have looked into hydrogen. We have got a number of very
difficult problems.
You can't put hydrogen in existing pipelines. It causes
brittlization and failure. So you would have to have a totally
new distribution network for hydrogen.
And secondly, of course, the question is green hydrogen.
And at the moment, producing non-fossil-fuel hydrogen is not
particularly cost effective, given the cost of the electrolysis
and the hydrolyzers. But they are working on that technology.
With that I would recognize Mr. Larsen.
Mr. Larsen. Thank you, Mr. Chairman. My first question is
for Mr. Smith, and it is with regards to airframe or airplane
modernization.
You have got two OEMs available to you. How do you consider
the life cycle of an airframe, versus getting the fuel
efficiency from a new airframe when you make a calculation
about purchases?
And do you get caught up at some point during the life
cycle of that airframe, where you are not getting the savings
out of it any longer?
Mr. Smith. Well, we have been in the midst of a major
aircraft fleet modernization program for over a decade, and we
have bought--I believe I am correct--187 Boeing 767s and Boeing
777s. And they were justified on the basis of substantially
improved economics and operational capability. And we are
confident in the aviation sector we will be able to continue to
do that, where we justify new airplanes based on their life-
cycle cost or their improved operating capabilities for our
customers.
What we can't do, though, is to make those airplanes zero-
emissions the way we can with our pickup and delivery fleet,
with electrification or some of the other technologies we have
been discussing for over-the-road, including electrification.
So that is why we have focused a lot on both sustainable
aviation fuels and natural carbon sequestration.
Mr. Larsen. Yes, can you talk--as well, have you done any
estimated fuel savings looking at the last-mile drone delivery,
and is that scalable?
Mr. Smith. The drone delivery, both vehicular and aviation,
really only makes sense for same-day deliveries. The vast
majority of parcels delivered in the United States--and that
market, by 2023, we estimate will be about 130 million per
day--the vast majority of them are moved overnight, and then
delivered in a loop route during the day. So drones really only
make sense for same-day delivery.
And we have an extensive effort, as I mentioned in my
testimony, on a same-day surface delivery bot, which we call
Roxo. You can look it up on the internet.
Mr. Larsen. Yes, I will do that.
Mr. Rudd from AECOM, can you tell me a little bit more
about the role you play in eVTOL and, specifically with regards
to the subject matter today, about how eVTOL could play in
congestion reduction or fuel emission reduction?
Mr. Rudd. Certainly, thank you for the question. So the
work that we are doing today is working on piloting some of the
programs around electric aviation. But again, these are for
short haul, or what you might describe as last-mile. And the
work that we are doing at the moment is looking at the
infrastructure that would be necessary to build out and support
a system, and then looking at the implications on the
environment, the social networks, and our communities around
that.
So it is really a broader study and a pilot to see how that
infrastructure could be built to serve a smaller community in
southern Florida.
Mr. Larsen. All right, yes, thank you. I may follow up with
you a little bit more on that.
For the gentleman from Proterra, are you making the case
that, at least for bus--for transit and for schoolbuses, to
leapfrog to electric and sort of skip propane and natural gas
as a fuel?
Mr. Allen. Yes, we are. We believe that propane and natural
gas are really just a bridge to electrification. Certainly,
both of those technologies provide environmental improvements
over diesel. But the Holy Grail is zero-emission vehicles that
we get with electrification. And we believe that the technology
is there today for transit agencies and school districts to
move to 100 percent electrification.
Mr. Larsen. Yes, yes. Thank you, Mr. Chair, I yield back.
Mr. DeFazio. I thank the gentleman. Mr. Perry is scheduled
to be next. He is not back yet, so we will go to Mr. Babin.
Dr. Babin. Thank you, Mr. Chairman, I appreciate it, and
Ranking Member Graves. I want to say thank you to our witnesses
for giving us your time today.
When we debate about carbon emissions of greenhouse gases,
we must consider the issue from a global perspective. In order
to actually decrease worldwide pollution, countries like China
and India have got to be held accountable for their emissions,
especially when regulations become so burdensome here in the
United States that our companies are forced to outsource
production to these major offenders because they have very
little regulatory oversight.
So I would like to address my question to Mr. Hernick. How
do we make sure that overly burdensome regulations are not
forcing our domestic businesses abroad to other countries that
are not playing by the same rules as we are?
And if you would answer that, I have a couple more for you.
Mr. Hernick. Sure thing, Congressman Babin, I appreciate
the question. And I think that the most important takeaway is
that it is a robust and positive business environment that is
attractive for American companies, and robust competition that
makes possible the types of emissions reductions that we have
seen, and that we need to see in the near future to be able to
achieve our goals, but also maintain a competitive economy
against other global interests that don't have our same
interests in mind.
Very specifically, Congressman Graves, at the onset of this
hearing, mentioned how the free market was able to reduce
carbon emissions in the electric power sector faster than the
Obama Clean Power Plan. We should remember that for the
transportation sector, and assure that we are not drowning in
redtape. And that is why, in the written testimony focusing on
One Federal Decision, to allow businesses to get a firm up or
down on whether or not their project is able to proceed, and
not get caught up in years of reviews.
I spent almost 6 years doing environmental and social
impact assessments. There are a lot of good people in the
field. And these are experts that, given a timeline, can meet
it. And we should expect that, American businesses should
expect that, and the U.S. Government should be able to deliver.
Dr. Babin. Well, we just want to ensure--and how would we--
that our reduced emissions here do not just simply transfer to
increased emissions around the globe to other countries that
don't live by these same rules.
And do you think countries like China would implement or
retrofit their industries with newer, more costly technology?
Mr. Hernick. I can't speak for what China will or won't do.
I know that the example that we had at the last Olympic Games
that were in China was that they needed to turn off industry to
meet the standards that athletes required, and that they were
willing to lie to the globe about what their emissions were
until the U.S. Embassy put air monitors on the Embassy.
So we should remember that when dealing with China. That is
why we do need to focus on low-cost and a competitive
environment, and we need to not foreclose on any of the
options. Natural gas is a vital one.
Russia is the number-four emitter of greenhouse gases. And
to the extent that we walk away from an international oil and
natural gas market, that is a direct transfer of power to our
geopolitical adversaries in Russia. And we should not--that
shouldn't be part--we should focus on that as a part of the
strategy to figure out how to deal with these foreign threats.
Dr. Babin. Absolutely. I think in my remaining time--time
and again we see the ingenuity and technological innovations
that come from our private sector. I have the privilege of
representing southeast Texas, which includes the Johnson Space
Center in Houston. It is here that we have seen so much success
in leading the global pursuit of space by teaming up with the
private sector. It is critical that we continue to pursue
public-private partnerships, and let our competitive market
work to identify and solve solutions to our challenges.
Are there any suggestions you have on how we can modernize
our infrastructure so that we could be spending our taxpayer
dollars more wisely?
Mr. Hernick. Well, sure. I think that the STARTER Act that
was proposed by Republicans in this committee last year is a
fantastic foundation for that discussion, focusing on strategic
investments, where the Federal Government works in partnership
with States so that decisions aren't being made out of
Washington, DC, but are being made at the most local level
possible on how folks actually get around.
This is a big country, and the transportation differences
between where I am in Annapolis to your home district and how
folks get around in DC varies a lot. And that is something that
is important for Congress to understand. And so pursuing an
approach where Federal dollars move to States, or where Federal
public-private partnerships are possible is absolutely a
necessary part of the equation.
Dr. Babin. OK, thank you for that answer. My time has
expired, and I will yield back, Mr. Chairman.
Mr. DeFazio. Thank you, Mr. Babin.
Just in response to Mr. Babin's--these are good questions
about China. And the best way that I know of to respond to that
would be through trade policy, where we establish standards, we
meet the standards; they don't meet the standards, they pay a
penalty on any goods they want to import that don't meet those
standards. That is the best solution I have heard.
Mrs. Napolitano?
Mrs. Napolitano. Thank you, Mr. Chairman, for holding this
very important hearing to discuss innovative policies that
address the climate change.
And I was particularly appreciative of the quote you made
following your meeting on infrastructure with President Biden.
You said, and I quote, ``We are still living off the legacy of
President Eisenhower to the detriment of our safety, our
economy, our communities, and our environment. It is time to
get out of the 1950s and move forward on a transformational
infrastructure bill that puts millions of people to work
building the infrastructure of the 21st century and beyond, all
while putting our country on a path toward zero pollution.''
Thank you for working with me last Congress on a provision
that I have been fighting for since the last FAST Act that
would allow electric vehicle charging stations at park-and-ride
rest areas.
My district is home to the largest transit station on the
west coast, called the El Monte Transit Center. Because FHWA
has determined the transit center is on the highway, the 2,000
parking spaces are not allowed to have electric vehicle
charging stations. This is a problem throughout the country,
including the Greenbelt Metro park-and-ride station 3 miles
north of the Capital.
The question is for Ms. Giammona. The State of California
has major plans to work with PG&E and other utilities to
implement electric vehicle charging stations. But the
prohibition on EV charging at many park-and-rides and rest
areas has been a major challenge. Should Congress allow EV
charging at park-and-ride and rest areas?
And would this help expand EV charging deployment and
reduce range anxiety?
Ms. Giammona. Congresswoman, thank you for your question.
We have been working with the State of California to implement
charging at State parks, at community centers, at schools, and
within Tribes. We believe that Federal policy and enablement of
charging infrastructure where consumers and customers actually
want it will be beneficial for all of the Nation's consumers
that will help to eliminate range anxiety.
But we believe it----
Mrs. Napolitano. What have you----
Ms. Giammona. We believe it is in partnership.
Mrs. Napolitano. OK, thank you very much.
Mr. Allen of Proterra, I have visited the factory in the
City of Industry. You are in my area.
Mr. Allen. Yes.
Mrs. Napolitano. Thank you for testifying. I was very proud
to have you and the company in my district. And some of your
fast-charging buses are already in Foothill Transit, which is
in my area.
What have been the challenges to EV bus deployment?
Are there additional challenges working with local bus
operators on this new technology, and how do you address those
challenges?
Mr. Allen. Great, thank you for the question,
Congresswoman. And we are very proud of our relationship with
Foothill Transit. They were the very first deployment of
electric buses in this country with Proterra, back in 2010. So
they are certainly on the absolute leading edge of this
technology.
The challenges, I would say, are no more different than the
challenges of any new technology. It just takes patience, and
it takes time, and it takes a collaboration between the
manufacturing and the supply base, the infrastructure people,
and the agency. But we continue to progress with Foothill
Transit and with other transit agencies around the country.
Mrs. Napolitano. But what are you going to do about the
challenges of working with the local bus operators on the new
technology?
Mr. Allen. Well, training is certainly paramount. We have a
relationship today within our facilities with the United
Steelworkers, where we provide training in partnership with the
Government. We focus on people of color, women, and formerly
incarcerated people, to become employees within our facility.
And we are very proud of that program in a public-private
partnership.
Mrs. Napolitano. That is wonderful. There are many things
that I would like to see changed, and that would take a long
time to try to get to them. But I think that training of
employees, getting people to buy more electric cars--but if
they don't have a place to charge them, they are not going to
buy them.
Mr. Allen. Right.
Mrs. Napolitano. So we have to work in tandem with that
policy, plus all the other aspects of it.
Mr. Allen. We agree 100 percent, and we are happy to follow
up afterwards with you and your staff on more things we can do
together.
Mrs. Napolitano. Thank you very much.
Thank you, Mr. Chair, I yield back.
Mr. Konar. Mr. Chairman, if I----
Mr. DeFazio. I thank the----
Mr. Konar. If I could just add a comment to the
Congresswoman's question?
Mr. DeFazio. Very briefly.
Mr. Konar. Yes, sir.
Mr. DeFazio. Very brief.
Mr. Konar. I think charging at park-and-rides makes a lot
of sense.
I think one thing I would request the committee to consider
is, as we go into EVs, the whole charging experience changes.
You have gone from 2 minutes to fuel a car to 40 minutes or 30
minutes to charge your car. And when we look at public rest
areas, those 40 minutes, if you can keep people more engaged,
give them more things they can do like you get at our travel
centers, or that you get at the retail stops, where you can
eat, you can shower, you can do other things, I think it will
only help adoption of EVs. And I think we have got to keep that
in mind, because if you are stuck for 40 minutes in some place,
and it is not very well trafficked, it doesn't have----
Mr. DeFazio. OK----
Mr. Konar [continuing]. Amenities, it will be a challenge.
Mr. DeFazio. Yes, OK. I thank the----
Mr. Konar. Thank you.
Mr. DeFazio. I thank the gentleman. Yes, I was just
commenting with Mr. Larsen. Our rest areas in Oregon are pretty
ratty, and people aren't going to want to hang around there.
They are going to want to go someplace where there is a
restaurant or something else for 25 or 30 minutes to recharge.
California is pushing that hard. We will see how we deal with
it in the bill.
So now we are back--Mr. Perry is still not here, so Mr.
Graves from Louisiana.
Mr. Graves of Louisiana. Thank you, Mr. Chairman. Mr.
Chairman, the first question I would like to ask is for Mr.
Lewis and Mr. Rudd.
In 2018 we made extraordinary progress on a bipartisan
basis to advance resiliency measures to make investments in the
resiliency of our communities, by ensuring that disasters are
rebuilt in a way that builds in a standard looking toward the
future and more resilient infrastructure, more resilient
communities.
You both have advocated for more resilient infrastructure,
but can you talk about some of the regulatory challenges or
obstacles that prevent us from doing that, or perhaps even
tailoring a regulatory structure such as NEPA to the type of
investments we are making, like green infrastructure
investments that actually benefit the environment?
Mr. Lewis. Yes, I can certainly start.
The first one, on the issue of the resilience measures and
mitigation, we basically have to be able to look at future
conditions that are going to be very different than the
conditions that were around when we wrote the current
regulations, the current standards, building codes, and even
some of the tools that we use, technically. They have all
changed. So we need to be able to project ourselves into the
future, understand not just the physical conditions, but even
the users of the future, how they might change.
We see things changing, for example, in the vehicle usage
in the sense of automated vehicles that will change even the
use of parking garages and things like that. So first we need
more flexibility in our regulations and in our codes and
standards that allows for that kind of future look, and for
more agility and adaptability.
I think, in terms of regulations like NEPA, the problem is
the open-ended timeframes. The private sector, in particular,
and especially the innovators, tend to be most frustrated, and
sometimes even put out of business by the open-endedness of
some of the timeframes that occur.
So if the legislation and rulemaking and policies can all
build some more hard deadlines and timeframes into the process,
or give incentives, find ways to make it more predictable,
because that is what is really holding back a lot of the
deployment of new and innovative ideas and technologies,
because----
Mr. Graves of Louisiana. Thank you, thank you. I want to
make sure we have time for Mr. Rudd to answer the question, as
well, please.
Mr. Rudd. Yes. So building on what my colleague said, one
of the things that we look at when we look at the construction
of infrastructure is we look at cost. So usually, the elements
of a bid for infrastructure are pre-defined, and our bid models
that we use look at cost.
What they don't look at is they don't look at sort of the
probability-weighted cost. Even though a climate event may be a
low probability, the impact of it is very significant. So we
need to think more holistically about the cost model, and how
we actually rate or include resiliency, and the--some low-
probability outcomes in that.
My suggestion would be to allow for nonconforming bids,
moving forward for infrastructure, so that people can include
innovation, and they can include resiliency and build a
business case for it that may go beyond the current standards
that we have for bidding projects and infrastructure.
Mr. Graves of Louisiana. Thank you, Mr. Rudd.
Mr. Smith, I would like to ask you a quick question. You
talked about how your company is voluntarily setting a standard
for 2040. I just want to be clear. Is there any Government
mandate or anything that you are being coerced to do this, or
is this just a decision by the company?
Mr. Smith. The latter.
Mr. Graves of Louisiana. OK, thank you. And the next
question is, if we are operating, obviously, in a global
environment--as Mr. Crawford mentioned earlier, for every 1 ton
of emissions we produce in the United States, China has
increased by four. They have increased by four, resulting in a
net increase in global emissions. And including under the Paris
Accords, this is allowed.
How do we, from an economic perspective, move forward on
this?
How do we establish a social cost of carbon whenever other
countries' actions we have no control over, and they are being
irresponsible?
So how do we value that, as we look to a free market
solution, moving forward?
Mr. Smith. Well, I think one of the most promising areas is
what Chairman DeFazio mentioned that you might consider, a
border adjustment taxation, where, if goods come into the
United States that have not improved their carbon footprint,
there is a tariff on them.
And on the other side of the coin, we should have some sort
of adjustment on our exports out from the United States when we
have improved. The border adjustment tax is something that was
carefully considered a few years ago. But if you combine it
with carbon emissions, you could probably achieve the goal that
you want, which is to incentivize foreign folks to do the same
thing that we are doing.
Mr. Graves of Louisiana. Thank you, Mr. Chairman. I do want
to make a note, with a border adjustment tax you are
disincentivizing or making the U.S. economy less competitive.
It would need to be globally adopted. And I don't support
that----
Mr. Smith. Mr. Graves, I don't agree with that, and I
supported the TIACJ, and I think the biggest impediment we have
to being export competitive is that we compete with people who
have a value-added tax. And because of the historical trade
agreements, we can't deduct our corporate income tax, and they
can deduct their VAT. The VAT, adjusted on the outbound, would
help our exports.
I would be glad to sit and talk to you about this, but I
think it is a positive for U.S. exports.
Mr. DeFazio. I thank the gentleman for his question, and I
thank Mr. Smith. I have raised that issue about the fact we
can't give an adjustment for our income tax, and they have the
VAT. And we agreed to that in the 1950s, when we made
everything in the world. We don't care what they do. Who cares?
They are going to buy it from us, anyway.
This is a different era. And I have talked to every trade
representative about that. And they go, ``Oh, yes, I hadn't
thought about that.''
I said, ``well, you have got to change that, or we are
going to continue to lose market share.''
With that, Mr. Cohen.
Mr. Cohen. Thank you, Chairman DeFazio.
Mr. Smith, you were talking in your introduction about the
length of trucks, and how maybe that could help with safety and
with fuel economy. Would you go into more detail on that?
Mr. Smith. Well, there are about 3\1/4\ million trailers in
the United States. The vast majority of them are 53-foot
trailers. They are the type that are operated by the truckload
carriers, where you pay by the mile: Swift, Schneider, J.B.
Hunt, and so forth. There are about 300,000-odd so-called twin
trailers, where they are 2 trailers together, articulated. They
are used by parcel and LTL, or less than truckload carriers.
There are only about 300,000 of them in the country.
So if you extended the length to 33 feet, we would save
about 225 million gallons of fuel, reducing emissions, take
lots of vehicles off the road. They are safer. We operate them
every day in many parts of the country. We have been operating
them for years. For instance, in Florida they are more stable,
and so we would advocate for that, and have been for years.
Mr. Cohen. The issue that people bring up when they talk
against it is safety. Florida is pretty flat. You can go
straight down from Tallahassee to Miami, and there is no
mountain, there is no turn. Do you all have experience with
these around mountainous areas, like east Tennessee, or some
other places?
Mr. Smith. Well, I don't think that the inherent safety of
the 33-footers versus the 28-footers changes, based on the
topology that we deal with. I would just say, Congressman,
every meeting at FedEx begins with safety, above all. It is the
centerpiece of our corporate strategy and our corporate
philosophy. So we would not be advocating these if we did not
believe that they were safer--not as safe--but safer. They are
more stable, and they take thousands and thousands of trucks
off the road, which improves safety by reducing the absolute
number of accidents.
Mr. Cohen. Now I am going to ask you about two other
futuristic things FedEx is looking at. One of them is the
drones, and you all have worked with the FAA and the Memphis
International Airport on some drone research.
How do you see drones, and then Roxo, which is the little
robots, and--you know, I would have probably given you a
failing grade on [inaudible] on FedEx, because I don't see the
future as well as you do. How do you see Roxo and drones really
integrating into the daily lives of people?
I mean, are you going to put a Roxo out at Oak Hall, and
let them take delivery at East Memphis? Or how is that going to
work?
Mr. Smith. Well, as I mentioned a moment ago, the biggest
parcel market is the parcel market where people order something
off the internet and get delivery overnight. And in 2 days
those items are transported overnight, and then they are put on
route delivery networks during the day. That is what we do with
150,000 vehicles around the world.
There is no way that an aerial drone or a drone like Roxo
can compete with a truck and an efficient driver doing that.
But for same-day, let's just say a pizza, which we all get from
time to time, when you order a pizza you have a driver that is
driving a 2,500- to 3,000-pound car, delivering a 2-pound
pizza. That is something that Roxo can do at a fraction of the
emissions, and a fraction of the cost. So it is the same-day
market for aviation drones and surface drones that have huge
environmental and safety implications.
Mr. Cohen. Well, my question is--and I am just missing
this--how does Roxo get to Pete & Sam's? Does FedEx have to
take Roxo out there and drop it off, and then it goes around
Park Avenue and the----
Mr. Smith. No, Roxo is so cheap. Think about it like the
parking lot at Target, where you walk outside with your
shopping basket. So Target would have the Roxos there. And when
you order something from Target, a prescription, the Target
people simply put it in Roxo, it goes to your house, you take
it out, it goes back, and then is reused again over and over
during the day.
Mr. Cohen. So Roxos are all going to be out there in the
field. They are not going to be out there at a central FedEx
location. They are going to be more where the retail is.
Mr. Smith. Exactly. They will be located at the origin of
the demand. And then, when you order something, within a few
minutes, Roxo, with virtually no fuel expended--certainly no
traffic in your neighborhood of a 3,000-pound car delivering a
prescription or a pizza--will come, and you will take it out of
the device, and it will go back to its point of origin. Its
average delivery radius will be probably about 3 miles.
Mr. Cohen. In 2006, you joined a group of----
Mr. DeFazio. Steve?
Mr. Cohen. Is my time up?
Mr. DeFazio. Yes, sorry.
Mr. Cohen. With that, I would yield, and go Falcons.
Mr. DeFazio. Mr. Bost?
Mr. Bost. Thank you, Mr. Chairman.
Mr. Konar, in your testimony, you talked about the fuel
retailer's perspective on offering EV charging. It has been the
private sector who has led the way in the electric vehicle
innovation.
You mentioned that the fuel retailers are agnostic about
the type of fuel they offer. Can you please expand on how
companies like Pilot and smaller independent fuel retailers can
help with providing the EV with making it economically viable?
Mr. Konar. Thank you, Congressman Bost. So let me start by
first saying the fuel retailers' goal was really to serve what
our customer wants. Right? So we are highly focused on
providing the service that our customer is looking for. And I
will give you a great example, and then I will talk about how
it could work in this case.
About 10 years ago, biodiesel and biofuels were definitely
not something that were economic and were available in the
market. And, you know, our customers didn't want it. Through
the correct market incentives and public policy, what the
Federal Government enabled us to do was actually provide
cheaper biofuels to our customers, which has led to significant
adoption of biofuels.
So, for example, Pilot next year or this year should
probably sell about 11 billion gallons of fuel. And we are
going to sell 1 billion gallons of biofuels, which is a
combination of ethanol and biodiesel and renewable diesel and
so on, which has a significantly smaller carbon footprint, and
does something about it now at scale, right, which is
equivalent to taking 1 million cars off the road.
So the way we think about it is we have to get our customer
comfortable with going into the EV market. And there are three
legs to that.
One is the cars should be cost competitive, and we are
getting there. We are getting there very rapidly with the
amount of focus there has been on batteries and the EVs.
The second is the functional experience should work. As Mr.
Smith talked about the longer trailers, the functional
experience from the car should work, and I think they do.
So the third part we need to solve expediently is basically
how to deal with range anxiety, and provide a fueling
experience that is safe and has additional attractions for our
customers, and does not force them to change habits. And we are
able to do that, and we are fully willing to do that. But today
the economics, just like in the adoption of biodiesel in the
beginning, or in the adoption of solar power or wind
generation, are very challenging for us to invest and be able
to do that effectively.
So I think the way we can really enable this is get some
support from the Government, not just for us, but also for the
utility sector, who has to provide the green power. Because if
you are burning coal to sell to charge EVs, we are kind of
destroying the whole objective of this.
But, really, support the utility sector and support us, so
that we can provide the right customer experience, and they can
provide us the power. And then we can kind of eliminate that
third issue we are dealing with, which is range anxiety.
Hopefully I answered your question.
Mr. Bost. Yes, you did. Thank you.
Ms. Giammona, are there any technologies or R&D that is
needed to reduce the cost of EVs, or to ensure that the grid
can manage the new load?
[Pause.]
Mr. Bost. That is for Ms. Giammona.
Voice. PG&E.
Ms. Giammona. Thank you. Congressman, thank you for the
question.
Yes, we do believe and support R&D to really help support
the grid, nationwide. We are now having to operate the grid in
a bidirectional fashion. So we think there are opportunities,
both from an R&D perspective to support the grid, as well as
support and enhance vehicle adoption and support for what
consumers need.
We think there is an opportunity for the vehicle, as my
colleague from Proterra mentioned, to become a battery storage.
And we have been in trials with BMW and others to look at the
second-generation batteries and what they might do to help grid
stability and operate as a battery.
We also think there is an opportunity for electric vehicles
to play a role in household resiliency in times of natural
disasters, and that is vehicles with inverters. And we think
that R&D at a Federal level could really help to accelerate the
development in these areas.
Mr. Bost. Thank you----
Ms. Giammona. Thank you for the question.
Mr. Bost. And just one real quick question for Mr. Smith,
now that I am down to a few seconds. Is that the Eagle, Globe,
and Anchor on your tie?
Mr. Smith. It is, indeed. I served in the Marine Corps in
1966 to 1970.
Mr. Bost. Semper Fi.
Mr. Smith. Semper Fi.
Mr. Bost. Thank you, and I yield back, Mr. Chairman.
Mr. DeFazio. I thank the gentleman.
Mr. Sires?
Perhaps he had to step out.
Voice. He is on.
Mr. DeFazio. Oh, is he?
Mr. Sires. I am.
Mr. DeFazio. All right, go for it.
Mr. Sires. Can you hear me?
Mr. DeFazio. Yes. Speak up.
Mr. Sires. Mr. Lewis--well, first of all, Chairman, thank
you for this hearing. It is very interesting, very informative.
And all the witnesses, thank you very much for taking the time
to be with us and informing us.
Mr. Lewis, in your testimony you note data showing that
each dollar spent on infrastructure risk mitigation and climate
adoptions makes itself back at least four times over. Can you
speak to the impact----
[Audio malfunction.]
Mr. Sires [continuing]. Current and future?
And here is what I am talking about. I see all these
tornadoes in the Midwest destroying everything, and they seem
to rebuild them the same way that they were built before, not
as resilient as it could be for the future weather. I know the
Obama administration tried to do something about it. But, you
know, I just don't get it.
The other issue I will tell you is in New Jersey, we had
this Sandy storm which caused about $30 billion in economic
losses and damages. Basically, all along the beach, all along
the shore. Yet people still want to build right next to it, and
build the same way. So can you talk about how we change that
attitude?
Mr. Lewis. Yes, thank you for the question.
On your first question, the problem really stems from the
Stafford Act, which has been around for decades. When FEMA
responds to a Presidentially declared disaster, it is written
in that the Public Assistance funding cannot be used to change
what was there before. It basically incentivizes building the
same thing back again, despite the fact that it is now proven
that that element of infrastructure is susceptible to failure
and damage when a disaster occurs.
So legislation needs to be created, either by just
modifying the Stafford Act, or by overriding it in new
legislation that allows for the evolution of the building back
after a disaster to include these ideas that will make
something better. By just an incremental 2-percent increase in
the cost, you can then make it so that the next time the same
disaster comes, it won't have the same disastrous impact.
As far as your question on building back in places that are
proven to be susceptible, like the Jersey Shore, which, by the
way, I lived at the Jersey Shore for over 10 years----
Mr. Sires. People want to live on the water. They want to
live----
Mr. Lewis. Yes, exactly, exactly. And I think there are
only two answers to that. Either you need to incentivize people
to go elsewhere, which is very difficult, in this country in
particular, but there are some programs that do that by paying
a fair price to properties that are in vulnerable areas where
people may be sick of having to rebuild after multiple floods.
Or you need to build resilience.
And there are nature-based solutions, putting natural reefs
or other breakwaters, using smart biodiversity-type solutions,
like we are doing off of Staten Island, for example, which was
a Sandy-funded mitigation. And these are good ways to protect
from the storm surge that occurs. So there are solutions that
make places safer if you can't, in fact, relocate people.
Mr. Sires. Thank you.
I was just wondering about electric locomotives and
hydrogen fuel cells, locomotives. Can somebody talk to me about
that?
I know some of the railroad companies are looking into a
lot of these electric locomotives. Can anybody talk a little
bit about that?
[No response.]
Mr. Sires. Anyone, take a shot.
[No response.]
Mr. Sires. No takers? Is it good, or is it bad?
Mr. Konar?
Mr. Konar. Sir, I live in the world of trucks, but I will
attempt to answer your question.
Mr. Sires. Oh, OK, well, somebody----
Mr. Konar. I do think, subject to what the chairman said,
provision of hydrogen through non-fossil-fuel-based hydrogen
becomes a challenge. But I think in locomotives you actually
have the ability of doing that, because you are more
centralized in where you fuel, as opposed to trucks, where you
are fueling all over the country.
So I think it is a problem that is solvable, but I will be
honest, I have not looked at the economics on the locomotive
side, and the power--and the hauling side, as I have looked on
the trucking side of it.
Mr. Sires. All right. Well, I don't have any more----
Mr. Santana. Can you repeat your question, please? It is
breaking up.
Mr. Sires. Yes, I was just wondering about hydrogen fuel
locomotives----
Mr. Santana. Representative, can you please repeat your
question?
Mr. Sires. Yes, I am--you can't hear me?
Mr. Santana. Representative, can you please repeat your
question?
Mr. DeFazio. Albio, you are out of time, I am sorry. OK.
Mr. Sires. OK.
Mr. DeFazio. Mrs. Steel?
Mrs. Steel. Thank you very much, Mr. Chairman, and thank
you for all the witnesses coming out today. We have----
Mr. Santana. Representative, can you please repeat your
question?
Mr. DeFazio. Your microphone is on. Please shut off your
microphone.
Mrs. Steel?
Mrs. Steel. We have heard from many experts today that
market-based innovation is working successfully.
In Orange County I have many local, small, mid-sized, and
large companies voluntarily achieve carbon-neutral status.
California companies are proactively investing in plans to cut
carbon emissions without additional regulations being enforced
by Government by any level.
We must be careful when we talk about creating new taxes or
shifting our tax code. We have said many times that heavy-
handed mandates only cause more confusion and burdens. The
Government is not good at picking winners and losers. The
Federal Government must allow for flexibility, and we must
eliminate barriers to major infrastructure projects by
streamlining permit and modernizing the environmental review
process.
Voice. Hopefully you can hear me, Mr. Representative.
Mr. DeFazio. Hold on. She is making a statement. I don't
know who is talking. It is her time.
Mrs. Steel. I want to ask Mr. Lewis the question, what
hurdles have you encountered as project manager for the
California high-speed rail project?
Have California's environmental regulations been easy to
abide by, since California has much harder regulations than any
other State?
Mr. Lewis. Yes, we have been able to work with the
California High-Speed Rail Authority in a case-by-case basis to
evaluate the different opportunities for sustainability and
resilience elements within the program. And each one can have
its different challenges, especially with regard to anything
that has air emissions associated with it, because of the very
stringent rules on air emissions in the State of California. So
that is where you see the biggest challenges.
But luckily, a lot of the sustainability and resilience
elements that we are building into the program don't involve
the emissions. And so the regulatory hurdles are easier to deal
with. But it really is a case-by-case basis. And you have to be
willing to think outside the box, and really address each of
the challenges with their own set of requirements and
timeframes.
Mrs. Steel. As you may know, the California high-speed rail
project had its Federal funding terminated in 2019 for failure
to comply with the grant terms, and failure to meet deadlines.
Do you believe it is right for taxpayers to continue to fund
the California high-speed rail project?
If so, what is the WSP's plan to fix this project, going
forward?
What has changed about the project in 2 years to warrant
more Federal funding?
Mr. Lewis?
Mr. Lewis. I apologize. For some reason I couldn't hear you
until the last 5 seconds there. Can you repeat the question?
Mrs. Steel. Do you believe it is right for taxpayers to
continue to fund the California high-speed rail project?
If so, what is the WSP's plan to fix this project, going
forward?
What has changed about the project in 2 years to warrant
more Federal funding?
Mr. Lewis. Well, we are working through all of the
different elements of the program, which is broken into
different sections, of course. And each one has its own issues
and challenges. So we are taking them in partnership with the
California High-Speed Rail Authority, piece by piece, issue by
issue. And we are coming up with solutions that absolutely
justify the project going forward, in our opinion.
Mrs. Steel. But it has been already failed for all the
deadlines and all the agreements. So you think that moving
forward you are going to meet other deadlines, and will you
need another Federal funding?
Mr. Lewis. Well, yes, again, each issue has its own path to
solution and timeframe. There have been some challenges that
have been taken on, and have been evaluated, and coming up with
the solutions in partnership with the High-Speed Rail
Authority. So, yes, we feel like we can move forward in a very
effective way.
Mrs. Steel. Mr. Chairman, I yield back.
Ms. Davids [presiding]. Thank you. The gentlelady yields.
We will go to Mr. Johnson next.
[Pause.]
Ms. Davids. OK, it looks like Mr. Johnson might be voting.
We will go to Ms. Titus.
Ms. Titus. Thank you very much. Yes, I represent the Las
Vegas Valley, and we're thought of as lots of neon signs and
glitz and glamour. You don't think of us necessarily as being
out front when it comes to climate change, but that is really
not accurate. We have a lot of LEED standard gold buildings.
MGM Resorts has said they want to slash their carbon emissions
in half by 2030. Big developments of solar power throughout the
Las Vegas Valley. Steve Sisolak, our Governor, is trying to
have the State meet the Paris Agreement standards.
And also, we have a State senator, Chris Brooks, who has
introduced a bill that would require a $100 million investment
in EV charging infrastructure. And an interesting part of it is
that 40 percent of that infrastructure has to be built in
historically underserved communities. So I would like to go
back to that EV infrastructure issue a little bit, and ask Mr.
Konar to talk about this.
I support President Biden's efforts to invest in this, and
his goal of a half a million new charging stations. We need
this infrastructure available along I-15 that connects us to
California. You have a couple of service stations and
facilities along that road. If I-11 is built between Las Vegas
and Phoenix, that would be another perfect place for this. I
wonder if you could talk some more about the public-private
relationship for establishing these stations, and also what we
can do to be sure that they are built in some underserved
communities, not just in more affluent neighborhoods.
Mr. Konar. Thank you. Thank you very much for the question,
Congresswoman Titus.
So I would like to kind of answer this in two parts. One is
your point about building infrastructure on highways. From my
perspective--and that is what I am way more qualified to speak
on, because that is what we do--our focus there is reducing
range anxiety. At Pilot right now, we have 58 charging
stations, some of them actually in Arizona and in west Texas
and up in Washington.
And as we looked at the data from these charging stations,
what we have been seeing is that our utilization rates at these
charging stations are way less than 1 percent. So, if you build
a piece of infrastructure and it is being used less than 1
percent, as a fiduciary to your shareholders, it is very
challenging to make that case.
So I think the Federal Government coming in and assisting
us, especially during these early days, where I don't doubt if
you were talking 10 years from now, that utilization number
would be very different. But we need to incent the customer to
drive and to charge. So we want to put that out there, because
it is the chicken and the egg problem that we are suffering
from. If there are no charging stations, people don't buy EVs
and people don't go ahead and travel.
So we really--both us and the utility sector, I think,
could benefit from getting help from the Federal Government in
these early days, so that we get adoption and we get to
critical mass.
To your second question, as it relates to inside the
cities, that is a little bit of a different kind of issue. And
maybe the lady from Pacific Gas and Electric could give you a
better view on that. But in terms of highways, I think we can
definitely make this work, and we definitely need some help
from the Federal Government, as do the utilities, to get the
infrastructure to us.
Ms. Titus. Well, thank you. And I will ask her, but I would
think there would be a demand for it along those--I-15 is just
such a busy corridor. And then all our hotels welcome so many
driving travelers from California, you would think there would
be some incentive to put them there.
Mr. Konar. We are exploring everywhere. We are exploring
partnerships with people. And I have been just as surprised by
the data as you are right now. In fact, in preparation for the
hearing, I pulled data from our stations, as well as one of our
partners out in Utah, and we are both at less than 1 percent.
And it makes the economics very challenging right now.
But I do think range anxiety--I will just cite a study done
by Morgan Stanley. They polled a lot of EV owners, and range
anxiety--almost 50 percent of the people who would potentially
buy an EV said they wouldn't buy them because of range anxiety.
So we do need to solve that.
Ms. Titus. Thank you. Anybody else want to comment?
Ms. Giammona. Congresswoman, I really appreciate the
question. I would offer that, in California, what has really
helped the California utilities, in partnership with our
commission and State regulators, we have focused goals on
disadvantaged communities. So our programs and incentives are
focused on meeting specific targets to ensure we have charging
infrastructure built in----
Ms. Davids. Ms. Giammona? Ms. Giammona?
Ms. Giammona. Yes?
Ms. Davids. Do you mind if we maybe come back to the
remainder of the question? The gentlelady's time has expired.
Ms. Titus. Well, thank you. Maybe we can be in touch, and I
can learn more about it.
Ms. Giammona. That is great. I am happy to follow up with
you.
Ms. Titus. Thank you.
Ms. Davids. Mr. Stauber is recognized for 5 minutes.
[Pause.]
Mr. Stauber. There you go. Now it is on. Thank you, Madam
Chair, and I appreciate the witnesses. A few questions.
Mr. Allen, for your electric vehicles, what country are the
minerals like copper, nickel, and cobalt used in your batteries
and computer systems sourced from?
Mr. Allen. The battery cells that we get today are from
Korea. Nickel, cobalt, and magnesium are the main ingredients.
But I am afraid I don't have the information with me about
where our supplier sources them.
I do know that all of the suppliers that we deal with are
in compliance with the OECD due diligence requirement around
conflict minerals. So we--you know, we do have----
Mr. Stauber. Yes, Mr. Allen, I would like to inform you
that most of the minerals come from the Congo and China. And
does the Congo, Mr. Allen, does the Congo and China have better
or worse labor and environmental standards than the United
States?
Mr. Allen. I think an obvious answer to that question is
that they don't, sir. But, as I was saying, we do work with the
suppliers that we have to ensure that they pass the due
diligence guidelines, that they are not buying products that
violate human rights in our supply chain.
Mr. Stauber. And again, the Congo and China do not have the
environmental and labor standards the United States does.
My next question, Mr. Hernick, what are some of the global
environmental benefits to mining and sourcing critical minerals
in the United States, as opposed to foreign countries with
little to no environmental standards?
Mr. Hernick. Well, Congressman, this is a values question.
This is what do we stand for, as Americans, and for Americans,
we stand for pride in our work, and human rights, freedom of
speech, freedom of expression, freedom of assembly. And these
are rights that we have that a lot of the countries that you
are talking about--China and DRC, in particular--they don't
have.
So when we are doing business with these countries and
sourcing materials from them, we are supporting regimes that
undermine American interests, very specifically. And----
Mr. Stauber. Mr. Hernick, would you agree that, if we
purchase critical minerals mined in the Congo and China,
especially in the Congo, there is child labor, forced child
labor, to mine, for instance, the cobalt?
Mr. Hernick. We know that. And, as the father of four
daughters, that makes me very uncomfortable, and it is one
where we need to be open to all-of-the-above approaches to
solving the climate problem, and sourcing minerals, and looking
in our own backyard, and not being afraid of fulfilling our
high environmental and labor safeguards, and utilizing the
resources that we have in our own country here.
Mr. Stauber. And I think that all the witnesses and members
of the T&I Committee know that, in northeastern Minnesota, we
have the largest copper nickel find in North America. At least
one company is in its 19th year of permitting and fighting
court battles. We have the best environmental and the best
labor standards in the world. The northeast Minnesota corridor,
the Iron Range hosts the Duluth complex of this copper nickel
find. We do it best. And I would suggest that we put a lot of
effort into mining manufacturing be brought back to the United
States.
Mr. Chair, it is clear that the committee has heard today
that we have found the climate solution that also has a great
business case. We can mine our critical minerals in the United
States, we can refine these minerals in the United States, we
can extract and transport our fuels in the United States, and
bring back building and manufacturing items of importance into
the United States using the best labor standards and the best
environmental standards.
Nobody does it better than the United States. And the best
part of all this is that we are following our labor and
environmental standards. We emit the least amount of carbon
when we environmentally source it right here, in our country.
And northern Minnesota and the Iron Range stand ready to source
these materials in an economically pristine and friendly way.
Ms. Davids. The gentleman's time has expired.
Mr. Stauber. I yield back.
Ms. Davids. Mr. Huffman is recognized for 5 minutes.
Mr. Huffman. Thank you. I want to thank the chair for a
great hearing.
It has been suggested by some, though, that just because we
have begun to reduce emissions over the past decade, that we
are doing just fine, and we should just pat ourselves on the
back and continue business as usual. I wish that were so. But
the truth is we are not doing great. We are on track to lose
this climate fight if we don't dramatically change course.
And just because we are finally starting to reduce
emissions doesn't mean that we didn't put most of those
greenhouse gases up there over the past century. And we are
still one of the world's biggest greenhouse gas polluters.
So the truth is we are playing catch-up here. We are
running out of time. And we can't indulge fantasies or
invitations to slow down, or rest on our laurels, or otherwise
continue fossil fuel business as usual.
Let's also not pretend that we have to be in some race to
the bottom competition with Russia for sales of fossil fuels.
Nothing threatens Russia's geopolitical influence like changing
the paradigm to clean energy, where they can't compete with us
or anyone else.
So with that, I want to ask a question to Mr. Smith from
FedEx.
I very much appreciate your commitment to a zero-emission
fleet by 2040. And you are doing this without waiting for
Congress to pay for your infrastructure or your fleet
transition. As a businessman, you have looked at total cost of
ownership and efficiency, and you have concluded, from a
business perspective, that a rapid transition to electric
vehicles is the smartest move.
So fast forward----
[Audio malfunction.]
Ms. Davids. The gentleman shall suspend. It seems as though
we might be having some technical difficulties, Mr. Huffman. We
are having a hard time hearing you.
And Mr. Smith has left the hearing, and won't be returning.
[Pause.]
Mr. Huffman. Madam Chair, if I could get a little credit on
time, and maybe come back to Mr. Smith, I will move on to my
other question.
Mr. DeFazio [presiding]. Jared, unfortunately, I announced
at the beginning he would have to leave in 2 hours, and he
stayed longer than that, so he is no longer available.
Mr. Huffman. Well, darn. I thought I had a pretty good
question for him. Let's go to PG&E, Ms. Giammona, and I hope I
will get a little break on time, since I missed out on Mr.
Smith.
But California is, obviously, on its way to a 100-percent
clean electricity portfolio. That is exciting. We are leading
the way on vehicle electrification. And so the move to EVs
won't just reduce tailpipe emissions. It is going to be clean,
all the way around.
But we are also struggling to have a grid that avoids
rolling blackouts, that doesn't spark wildfires. We are not
alone. Clearly, Texas has huge problems. It will need to make a
bunch of investments in its grid. Obviously, today, in many
parts of the country, our grid is not ready for millions of new
EVs adding all of that load. But we are planning for the
future.
And I want to ask you, will the grid be ready?
What gives you confidence that our grid will be able to
handle all these EVs in the next decade or two?
And what Federal policies would maximize your confidence
that we can get there?
Ms. Giammona. Congressman, thank you for the question. As
you know, we are making significant investments in California
in PG&E's grid with our system hardening, our undergrounding
projects, and, really, in an attempt to modernize the grid to
withstand the climate changes that we are experiencing in
California, but, more importantly, be ready to adapt for new
and cleaner technology that customers want and need for the
future.
So I feel very confident in California. We are working very
closely with our regulators, our policy makers, and I really
see this as a concerted effort. It is not one utility, it is
the utilities in partnership with good policy and strong
regulators in the State.
As we think about it more nationally, we are working in
partnership with all of the utilities through Electric Edison
Institute and EPRI to really ensure that we are taking
advantage of the best technology R&D resources out there to
modernize the grids.
But we are an infrastructure company. We planned that
infrastructure. And I think working with third-party markets,
working with customers, and really understanding what the
future of energy is going to look like, coupled with strong
policy, strong R&D, and strong support from the Federal
Government, we are going to be ready for this.
Mr. Huffman. Thank you, I yield back.
Mr. DeFazio. I thank the gentleman.
Mr. Burchett?
Mr. Burchett. Thank you, Mr. Chairman, and I appreciate you
bringing these folks to us.
Mr. Konar, many folks think of Pilot Flying J as just a gas
station company. Can you talk a little bit about some of the
other parts of Pilot's business, particularly the biofuels
program and the low-carbon fuels?
Mr. Konar. Yes, sir. Thank you. Thank you very much for the
question.
What I would say is, I would say Pilot Flying J is a
customer service company. Our goal is to provide the on-highway
drivers who have just been amazing heroes through the pandemic,
as they continue delivering goods and services, and today
vaccines, as Mr. Smith talked about FedEx. Our goal is to
support them in whatever way we can.
And in addition to that now, Pilot Flying J has also become
a center for the four-wheel customer, the gas customer that is
driving on the road.
So our goal, as Pilot, is to be a customer service-oriented
company and deliver to the customer what they want to buy,
where they want to buy it, and at a price that they are willing
to pay.
So, when we talk about renewable fuels, and when we talk
about reducing carbon footprint, I think the public-private
partnerships that we have talked about during this hearing, as
well as partnerships between Pilot Flying J and the utilities,
would be a great solution to go ahead and reduce carbon
footprint for the transportation sector. Because the utilities
need money today in order to help their infrastructure.
As we discussed, it is not just the EV pressure that is
going to hit the utilities infrastructure. Remember, we are
trying to green the whole country. And the utilities are the
ones that provide power. We change industrial processes, we
change boilers, we change everything. The utilities have to get
the green generation and deliver the power to us. So they need
help. We need help in order to get us going, because at Pilot
Flying J, we are in 44 States, we have got 1,000 locations
around the country.
So we can actually step in there and say--and our retail
dealers work with us--``You can drive an EV from L.A. to
Jacksonville and not have to worry because every 100 miles I
can get you food, I can get you Wi-Fi, I can get you fuel, I
can get you a shower, I can get you an ATM machine, whatever
you need.''
And I think this kind of gets lost in the mix when we talk
about things like rest areas, and when we talk about trying to
develop new infrastructure. Our goal, as a country and as a
community, should be to leverage what is already in place, make
it attractive for the customers so that they step in and start
demonstrating the behaviors we want them to, and then use all
our public funds to basically bridge us to the point where this
is economic and it has taken up enough scale that we can do it
with private investment.
To me, that would be the perfect solution. I know it was a
mix of what does Pilot Flying J do, but really, I mean, my goal
here is to try to reduce the carbon footprint and use all the
efforts from this committee as effectively as possible so that
the right people get the right amount of support, and we can
move forward.
Mr. Burchett. Yes, sir. And I know you all started as a
single gas station, but what prompted the company to change its
business model and grow over time?
Was it because of Government mandates or private market
decisions?
Mr. Konar. It was completely because of private market
decisions, because we saw a need for truckstops. Because, as
you know, trucks can't fuel at gas stations because of their
size and because a truck needs to fuel at 14, 15 gallons a
minute. Otherwise, the driver is going to be sitting there
forever, which is a problem we have to solve on the EV side. So
completely on market incentives.
Mr. Burchett. I figured that, knowing Mr. Haslam.
I would guess that Pilot is the largest employer and
taxpayer in many of the communities where your truckstops are
located. How many employees do you generally have at your
locations?
And what do these travel centers mean for those
communities?
Mr. Konar. Well, it is a great question, because a lot of
our travel centers are in very remote communities around the
country, where there aren't jobs. And we often end up being the
only source of fuel or food or amenities for a lot of the local
communities.
A travel center, on average, has, depending on the size,
between 60 to 80 people that we hire in local communities.
Pilot employs about 28,000 people around the country. And a lot
of them live in very rural environments. But, the interstate
business and keeping America moving is a way for them to get a
livelihood. So we are very appreciative of that.
Mr. Burchett. Thank you so much.
Mr. Chairman, I yield back the remainder of my time. And I
wish, Mr. Chairman, if you could, express to leadership that we
need to schedule better. This is a very important committee,
and the Members are not--I don't think we are being served when
we have to rush out and vote. Dadgummit, if we need to vote, we
ought to vote until midnight or later. We are here to work, and
this is very aggravating, and I don't think it is fair to the
committee----
Mr. DeFazio. Well----
Mr. Burchett [continuing]. For us to continue our important
work.
Mr. DeFazio. Well, I share the gentleman's frustration. But
in part, we are having this many votes because some Members on
his side of the aisle are insisting on votes on
noncontroversial legislation.
Mr. Burchett. I understand that, Mr. Chairman, but this
problem preceded all of that. So thank you.
Mr. DeFazio. Ms. Brownley?
Ms. Brownley. Yes, thank you, Mr. Chairman. And thanks for
holding this meeting. And I am going to have to be brief,
because I do have to go and vote. But I wanted to ask a
question of Mr. Allen.
And Mr. Allen, I thank you for your testimony. And I think,
in your written testimony, you mentioned my bill, the Green Bus
Act. And this is a bill, as you know, that would set a national
goal for zero-emission buses, and it would require that,
beginning in 2029, all new buses that are purchased using
Federal funds be zero-emission buses.
I know you are helping California meet its goal, because
this bill is modeled after what California is doing. So my
question is, how can you and, I presume, other bus
manufacturers, help transit agencies across the United States
to meet this goal?
Mr. Allen. Yes. Thank you very much for the question. In my
mind, there are a number of areas that the committee and the
Federal Government could help that.
The first is to increase the funding for zero-emission
buses through the Low or No Emission Vehicle program, and
reauthorize that program, and step up the funding.
The second would be to incentivize domestic supply chain.
There is an existing program called ATVM. And that program,
unfortunately, is only allowed to be used for automotive and
light-duty vehicles. We would love to see that program enhanced
for heavy-duty vehicle suppliers and heavy-duty original
equipment manufacturers. And this would allow companies to
invest in state-of-the-art manufacturing and build the domestic
supply chain that many of the discussions today have been
about, that will allow us to compete against aggressive foreign
competition. And this will also entice foreign battery cell
manufacturers to come to the U.S. with their intellectual
property and create jobs here, in America.
And then the last area, I would say, is around supporting
programs for fleet electrification beyond the Low-No program.
And that, specifically, is around schoolbuses and municipal
fleets. Today, schoolbuses are not funded at all by the Federal
Government. They are funded State and locally. And I believe a
program to--the Federal Government help electrify schoolbuses
would go a long way towards our challenges on climate.
Ms. Brownley. Thank you so much for that, and, actually,
thanks for mentioning the ATVM program, because Congresswoman
Dingell and I have a bill to do exactly what you have
suggested, to expand that program to medium and heavy-duty
vehicles. So thank you for the plug.
The last question, quickly, is I think a green economy is
going to create lots of good jobs. And again, Mr. Allen, can
you talk a little bit about the wages and benefits that your
company offers, because I think we are looking for good-paying
jobs. And I think, in your company, there are good-paying jobs
to be had.
Mr. Allen. Yes, there are. This is not what I would
describe as just everyday manual labor. This is advanced
manufacturing. We train our employees to be able to do very
technical positions. They don't require anything more than a
high school education to do that. We do the training for them,
in conjunction with some of the programs we have with the local
community colleges. And these people come to work, and they
make a really decent wage in both South Carolina, Los Angeles,
and in northern California.
We provide our employees 401(k) matching, and we also
provide every single employee at Proterra stock options for
when we ultimately go public. Every single employee will
benefit from that.
Ms. Brownley. Thank you so much, and I yield back, Mr.
Chairman.
Mr. Stanton [presiding]. Thank you very much. Next up is
Congress Member Mast.
[Pause.]
Mr. Stanton. Congress Member Mast, is he still on? We can
come back to him, certainly.
OK, then how about Congress Member Johnson?
Mr. Johnson of South Dakota. Thank you, Mr. Chairman. My
first line of questioning will be for Ms. Giammona with Pacific
Gas and Electric.
And, ma'am, I spent 6 years as a utility regulator in South
Dakota, a member of the South Dakota Public Utilities
Commission. And I like that you called out in your testimony,
ma'am, the importance of balancing safety, reliability,
affordability, and sustainability. I don't think many
ratepayers understand the importance of balancing those
sometimes competing interests for an investor-owned utility.
Of course, we have been talking today about Government
intervention, and how it can expedite some of this progress
that my colleagues are looking for. So I guess my question
would be, from your perspective, ma'am, to what extent have
regulations, requirements, mandates from the California PUC or
from the State legislature hindered your ability, your
company's ability to properly balance those four critical
stakeholder interests?
And maybe rate that from 1 to 10, 1 being no intervention
or constraint, and 10 being the regulators have made all the
decisions for you.
Ms. Giammona. Congressman, thank you for the question. My
opinion is it is a partnership. And our regulators in
California are very focused on and have the same interests that
we do, and that is providing safe, reliable, affordable, and
clean energy to the consumers in California.
And as such, we have not only aggressive policy and
aggressive goals, but we have been really far ahead on program
design in the areas of energy efficiency, our solar incentives,
demand response, community choice aggregation. We have run the
gamut of energy programs, and that has really been in
partnership with our regulators.
Mr. Johnson of South Dakota. Ms. Giammona, yes, thank you.
And I do understand the suite of offerings that you all have
offered and deployed, some of them in South Dakota in my time
as a regulator. I mean, it sounds as though you do view this as
a partnership, and that you largely or maybe completely endorse
the regulations and requirements within California. I mean,
giving that a rating on a scale from 1 to 10, I mean, how do
you feel like PG&E has been able to balance safety,
reliability, affordability, and sustainability?
Ms. Giammona. I would love to rate us as a 10.
I think the challenges that we have faced are our climate
changes. So what we have experienced is the climate is changing
and our conditions are changing rapidly. As you know, utilities
have major infrastructure, with large cycles of depreciation,
and we are finding ourselves having to be much more nimble to
respond to what is now a new climate in California.
So we are really working closely with our regulators to
ensure that policy moves quickly so that we can act upon that
policy and really act to support the climate in California.
Mr. Johnson of South Dakota. Well, and I would just say
this. I mean, clearly, I think it should be important to all of
us on either side of the dais here. This issue we are talking
about, I mean, clearly, we need to build systems that are
increasingly environmentally friendly, that provide some
sustainability.
I would push back on your characterization that PG&E in
California should get a 10 on balancing these interests. And I
would just perhaps call out my State of South Dakota again. I
have got some pride, having been a regulator there. But you
bragged--and I think understandably so--about how green your
fleet of generation is. I think South Dakota has a lot to brag
about, as well. Seventy percent of our electrical generation in
the State comes from renewable sources.
But I am concerned there has not been a proper balancing of
ratepayer interests--the affordability issue--when you all have
made decisions. And when you look at the residential price per
kilowatthour--in South Dakota it is $.12, and in California it
is $.22. Now, that is an overly simplistic way to look at it, I
admit. But that is 86 percent higher. And we are 70 percent
renewable; you say you all are 88 percent, and that is a great
number.
But if we are going to hold up--if we are going to say,
ma'am, that California is a 10, that PG&E gets a 10 on
balancing affordability and sustainability, then I think we
just need to acknowledge that you are willing to pay an 86-
percent premium at the rate level to be able to secure that 10.
And I just don't know that that is the proper way to balance.
And with that, Mr. Chairman, I would yield back. Thank you.
Mr. Stanton. Thank you very much. Next up will be Congress
Member Payne.
[Pause.]
Mr. Stanton. All right.
OK, please unmute, Congress Member.
Mr. Payne. Good afternoon. Can you hear me?
Mr. Stanton. Yes.
Mr. Payne. OK, thank you.
Let's see, Mr. Santana, as chairman of the Subcommittee on
Railroads, Pipelines, and Hazardous Materials, I care a great
deal about the effects of rail transportation on the
environment.
New technologies have the potential to significantly reduce
the railroad sector's carbon footprint. Other countries have
recently put trains into service that are powered by hydrogen
fuel cells. The United States should take advantage of
opportunities that integrate innovative technologies that could
provide efficient rail service, while reducing carbon
emissions.
Can you explain the potential benefits of hydrogen-powered
trains, and how quickly the United States could get to a
position to take advantage of this technology?
Mr. Santana. Representative, hydrogen will play a role in
terms of decarbonizing rail.
To your point with seeing other countries taking steps in
that direction, like China, for instance, like Europe, and we
should take the lead here. When we think about the roadmap to
decarbonize, we could very much, as you think about batteries,
where we are applying it now in effective ways into rail, you
will get to that same point on hydrogen. And what you are going
to be seeing is a number of these technologies permeating
different industries, getting to economies of scale that will
allow this to be efficient, to be competitive. So we need to
take the lead there.
Mr. Payne. Thank you. Mr. Rudd, 9 years ago, Hurricane
Sandy provided a stark reminder of how climate change can
result in more extreme weather and greater harm to our
infrastructure. Along the Northeast Corridor this means that
any infrastructure project needs to consider the increasing
number of hurricanes and other significant weather events.
Can you explain the cost of failing to make substantial
investments in the resilient infrastructure now?
Mr. Rudd. Yes, and building off something one of our
colleagues said a little earlier was, when we look at the
economic cost, it really has a four-to-one relationship. So
underinvesting in resiliency today, although it is a
generalization, it comes with a very heavy cost, without making
those initial investments.
And with respect to some of the things you are talking
about, it gets back to the point about thinking about our
procurement model, and building into the procurement models for
future infrastructure the opportunity to build in innovation,
and to build in the cost of resiliency, and evaluating that in
the low-cost models that are currently used to make those
infrastructure decisions.
Mr. Payne. Thank you.
Mr. Rudd. Thank you.
Mr. Payne. Also, Mr. Rudd, it goes without question that
the public and private sector must work together to
meaningfully address the pressing issues around climate change.
How do you envision the roles for the public and private
sectors in creating a climate-forward model of infrastructure
investment and construction?
Mr. Rudd. Well, again, when we look at the infrastructure
investments required, one of the largest challenges is going to
be the funding itself, and the capital improvements.
And so, as we look forward, there are economic
opportunities to improve that infrastructure that the private
sector would be willing to participate in, and willing to fund.
And my suggestion would be that, as part of the infrastructure
bill, you look for opportunities to de-risk those private-
sector investments, and to lower the cost of capital for those
fundings, effectively creating an opportunity for a higher
return, or an appropriate market return for that private
investment.
There is so much capital that is required for this. I think
the only way that we can move forward successfully at the right
pace is to provide an incentive so that there is public capital
and private capital coming into these infrastructure
investments.
Mr. Payne. Thank you, Mr. Rudd. I appreciate that outlook.
And with that, Mr. Chairman, I yield back.
Mr. Stanton. Thank you very much. Next up is Congress
Member Nehls.
Mr. Nehls. Thank you, Chair. The U.S. has led the world in
reducing emissions for 2 years now, and this largely has been
due to the wider adoption of natural gas. Refrigerated methane,
more commonly known as liquid natural gas, has the potential to
continue the American energy revolution, reduce dependence on
foreign energy sources, and continue to help our environment.
I have two questions, and my first is for Ms. Giammona from
PG&E. In February, in my home State of Texas, we saw the tragic
consequences of becoming overly reliant on certain energy
sources. What role does fuel diversity play in ensuring that we
have a reliable and resilient grid?
Ms. Giammona. Congressman, thank you for the question. It
was really difficult to watch what was happening in your State
during the crisis in February, and know that our hearts are
with the families and customers that were impacted by those
extreme weather conditions.
We have been really focused on diversification of our fleet
for a number of years, leveraging renewable power sources, but
also leveraging our natural grid infrastructure. And I think,
going forward, each State is going to look a bit different on
how they plan to diversify their fleet in order to support that
customer demand of new technologies, but, in addition, provide
reliable power sources for customers as we are managing through
a changing climate.
Mr. Nehls. Thank you. My second question is for the rest of
the panel.
We have seen a number of Northeastern States either limit
or outright ban pipelines carrying American natural gas through
their States. This has led to other States in the region having
to look outside the U.S. for their natural gas supply,
including to places like Russia. This not only harms our energy
independence, but is also more harmful to the environment,
given that our environmental standards far exceeds Russia.
How can we better spur American infrastructure development
and enhance U.S. geopolitical strength?
Thank you, and then I will yield back.
Mr. Hernick. Congressman, this is Charles Hernick with
Citizens for Responsible Energy Solutions. I would like to jump
in on that. I think that your point underscores the highlight--
the need for an all-of-the-above approach to energy. That
includes oil and natural gas. And it includes some of the other
technologies that we have talked about here.
Very specifically, as it relates to--we need to create
opportunities for fuel switching. One of the easiest ways to do
that that has not been mentioned--we have spent a lot of time
talking about switching to electric vehicles--but emissions can
be reduced quickly, and at a cost savings to school districts,
municipalities by switching from diesel to propane, just for
example.
So there are very important areas where we can reduce
emissions now, create cost savings now. It doesn't need to be
always a tradeoff between reducing emissions and a high
economic cost. There are ways to do this in a way that create
options for customers, create options for States and
municipalities, and reduce emissions quickly, and really
improve livelihoods for people, instead of waiting for that
more expensive option that may still be a little further down
the road.
Mr. Konar. Congressman Nehls--this is Shameek Konar--if I
may just add to that this is a great point.
The renewable fuel standard, which has been in place, which
has been enhancing the use of biodiesel and all the biofuels,
is something that works today. And, as we think about policy
for reducing our carbon footprint, we should look at everything
that we have at our disposal, which is a great point Mr.
Hernick makes, which is that we can still bridge our way to EVs
being adopted, hydrogen coming in, going from 1 percent
utilization to 30 percent utilization by continuing to push the
things that work today.
To your point about natural gas, we can be doing that
today, while we wait for our future, because just waiting for
the big bang costs us time. And all of these things will take a
substantial amount of investment, and that takes time.
Mr. Allen. If I may just offer a contrarian view that,
today, schoolbuses don't require a truckstop in order to be
refueled. They go back home every day to their own spot. The
total cost of ownership for schoolbuses to be all electric is
there today. There is really, in my mind, no need to make an
interim stop at propane. The economics for electric schoolbuses
is viable today.
Mr. Konar. No, that is a--it is a fair point.
Mr. Stanton. Thank you very much. We are out of time for
that 5-minute period, so we will move on to the next Member to
ask questions.
Mr. Konar. Thank you.
Mr. Nehls. Thank you, gentlemen. I yield back.
Mr. Stanton. The next questioner will be Congress Member
Lowenthal.
Mr. Lowenthal. Thank you, Mr. Chairman, and thank all our
panelists. I found this discussion fascinating, both in terms
of what can be done in the short term, and also, really, maybe
looking at more long-term solutions. But I want to focus on a
specific challenge that we have.
It has been mentioned, but I really want to dig a little
deeper, and that is heavy-duty vehicle electrification, which
is a critical priority for reducing freight emissions. I
represent the Port of Long Beach. And within the port complex,
Long Beach and the Port of L.A. together, there is a huge
number of truck traffic in and out of those ports. We are
talking about 30,000 to 40,000 trips a day, at least. And we
are talking about having--and I have seen over the years the
ports have done a great deal, in terms of reducing the impacts
upon those communities around the ports, which tend to be lower
income communities, which suffer greatly from asthma and other
types--not all due to trucks, obviously. We have ships and
trains, too.
But I want to talk about now--and what is interesting is
during this pandemic, while there was a drop in volumes through
the ports, there has been a tremendous explosion, in terms of
growth in ports, which we were already doing. So we have other
issues going on now of congestion, and problems of moving goods
out, because there is so much demand out there in the Nation
for goods that are coming from outside of the country, which is
another issue. But I am not going to deal with that.
So the issue is dealing with how we move forward in
changing this fleet. How do we improve the public health,
address environmental justice issues by reducing diesel
emissions from this tremendously important, as a thing--we are
talking about, as I say, a major part of the U.S. economy. We
are not going to stop this. We need to enhance it.
And so I want to ask first Mr. Allen, then anyone else on
the panel, how do we move forward with heavy-duty vehicle
electrification more quickly? I know we are moving.
What is the research and investment that may be needed, if
that is so?
What are the kinds of Federal support you see as possibly--
to be a partner in this venture?
Because I am just focused on those heavy-duty trucks
carrying 40-foot containers. We are talking about--and I am not
downgrading the role of diesel. It has helped this Nation. We
wouldn't be where we are today without it. So I want to know,
how do we move forward?
Mr. Allen. Sure, Congressman. I think help is on the way
for you. I believe that, with the right Government funding here
in just the next couple of years, there will be vehicles that
can go 250 miles--granted, they are not over-the-road, but they
can go 250 miles, which will take a vehicle----
Mr. Lowenthal. But these vehicles frequently are going a
lot more than 250 miles, as we know----
Mr. Allen. Right, the----
Mr. Lowenthal [continuing]. Where they--after 350 miles or
so, they say good night.
Mr. Allen. Right.
Mr. Lowenthal. These are, you know----
Mr. Allen. So that is the first one. But also, there is
help coming to terminal tractors that are used at the port, as
well as the heavy-duty forklifts. We are working with companies
like them today to help.
But I believe the best thing that the Federal Government
can do would be to expand the funding. So today there is the
Low or No Emission Vehicle program that is for transit
vehicles. That should be expanded for areas of high-emissions
focus, like the ports, to be able to incent both the
manufacturers and the users to convert those vehicles quickly.
Mr. Santana. Representative Lowenthal, if I may, Rafael
Santana.
I think that is one of the key roles that rail can play
here, being the most sustainable way of moving freight over
land. And what we see here is the opportunity to actually
accelerate decarbonization at the same time you increase the
utilization in rail.
And one of the things that we seek through the Freight 2030
vision is to also allow the creation standards of the
information. So it allows you to understand how freight is
coming to the ports and allowing a more, really, efficient way
of moving tanks from point A to point B. And this has to solve,
not just for speed, but it has to solve for efficiency, but
also the [inaudible] carbon emission type of transportation.
Mr. Lowenthal. Thank you, Mr. Santana. I agree with you,
and I think the ports agree with you. In the Nation, the role
of rail is vitally important, getting more and more important.
The major investments now in our ports are in rail
infrastructure.
Mr. Stanton. Thank you, Congressman.
Mr. Lowenthal. But it is not just--there has got to be kind
of a multimodal approach. And I am just concerned we are not
going to get rid of trucks.
Mr. Stanton. Thank you very much, Congress Member
Lowenthal, we have got to move on.
Mr. Lowenthal. I yield back. I yield back, thank you.
Mr. Stanton. Thank you, sir. Next up is Congress Member
LaMalfa.
Is Congress Member LaMalfa still on?
OK. How about Congress Member Carbajal?
Mr. Carbajal. Thank you. My question is to Ms. Giammona. We
know the transportation sector is a large emitter of harmful
greenhouse gas emissions, and searching for fossil fuels has
led to significant environmental damage to our communities.
I happen to represent the central coast of California. And
in Santa Barbara County, our community has seen firsthand the
devastation oil drilling inflicts to our environment and local
economy. Not only did the 2015 Plains All American oilspill
harm wildlife in the region, it cost us over $90 million to
clean up the area, not to mention the negative impact to our
local economy.
How does electrification of our transportation sector help
protect our environment?
And can you also walk us through the economic benefits and
jobs associated with moving towards electric vehicles?
Ms. Giammona. Congressman, thank you so much. Thank you for
your question. As I stated in my opening statement, our
domestic-produced clean energy is 88 percent GHG free. So, we
have really focused on, as we are using more renewables, really
moving to cleaner technology to really reduce greenhouse gas
emissions.
As it relates to the economics of EVs, this has an
opportunity to create many jobs, and many jobs across the
Nation, both from an infrastructure standpoint, from a
technology standpoint, and certainly at the vehicle level.
So in California, what we have seen is a tremendous
opportunity for growth of employment to support this new
technology. And in particular, at PG&E, we have partnered very
closely with the IBEW, and ensured that we are using our great
labor force that supports our current infrastructure to really
support this new technology and growth within California.
Mr. Carbajal. Thank you very much.
Mr. Allen, expanding access to electric vehicles also
requires an expansion of our charging stations and hydrogen
fueling infrastructure. H.R. 2, the Moving Forward Act that I
and my colleagues on this committee helped write, under the
leadership of Chairman DeFazio, included several provisions to
build infrastructure for the 21st century that includes
electric charging stations and hydrogen fueling infrastructure.
In building up this infrastructure, how are we ensuring all
Americans are benefitting from this, especially communities
that have been traditionally left behind?
Mr. Allen. Thank you, Congressman. As we got into the
electric vehicle and transit bus business over the past number
of years, the biggest impediment for agencies to put more
electric transit buses into service was the infrastructure. So
we have focused our company on being able to provide charging
and infrastructure solutions so that agencies can move forward
faster.
These charging stations are open source. So not just can
they be used by a transit agency for their buses, but they
could also be used for municipal fleet vehicles, and even,
depending on how they are located, could be used for the
general public. And we believe that that is a big enabler to be
able to provide charging and infrastructure in all communities,
but especially ones that are typically not served by
infrastructure.
Mr. Carbajal. Thank you.
Mr. Konar, what is the importance of leveraging the private
sector to achieve the electric vehicle charging goals that
President Biden laid out?
And how can companies like Pilot Flying J and other fuel
retailers be part of the solution?
Mr. Konar. Thank you for the question, Congressman. I would
say the private sector has already invested a substantial
amount of money. For example, if you look at Pilot, we have
over $10 billion invested in creating an infrastructure where
people currently fuel today. So leveraging that infrastructure
gets you to the answer a lot faster than trying to replicate
that infrastructure.
So I think what the Federal Government should do, and I
think will be helpful in reducing our carbon footprint, is
allowing us to bridge our way from where the uptake of this
technology is today--as I mentioned before, less than 1 percent
usage on our interstate chargers--to a point where it is
economically feasible to do it.
But everything else works. We have the locations, we have
the investment. We just have to offer them a different fuel.
And we are fuel agnostic. We are a customer service company. So
we need to make sure that our customers are getting the service
they need so that they buy more of that fuel. And it is a self-
fulfilling prophecy.
Mr. Stanton. Thank you so much.
Mr. Carbajal. Thank you very much.
Mr. Chair, I yield back.
Mr. Stanton. Thank you very much. Next up will be Congress
Member Malinowski.
Mr. Malinowski. Thank you so much, Mr. Chairman, and thanks
to the witnesses for very, very interesting presentations.
Let me just start by laying out the proposition that the
transition from fossil fuels to clean energy is possibly the
most significant, predictable economic transformation the world
has ever seen. It is something that should happen, in my view.
But, just as important, it is happening, and it will happen.
And therefore, it is in our economic interest, as a country,
from a competitiveness standpoint, to get ahead of it and to
lead it.
Let me maybe start with you, Mr. Allen. Is that general
statement something you would agree with?
Mr. Allen. I absolutely agree with that. I think that the
policies of the Government here are an important factor in
shaping the carbon emissions reductions in this country.
Mr. Malinowski. Now you mentioned in your written testimony
that there are just over 2,700 zero-emission transit buses on
the road in the United States. But in China you noted there are
150,000 EV buses. As I hope all of us know, China is, by far,
the largest producer of solar and wind energy. It holds three-
fourths of the world's manufacturing capacity for lithium ion
battery cells.
In 2013, we, the United States, had five times as many
electrical vehicles as China. Today China has twice as many as
the United States. Why is this happening? Is it because the
Politburo of the Chinese Communist Party had a meeting, and
decided that they liked trees more than jobs? Are they, you
know, all tree-hugger, Green New Deal? Is that what is going
on? Or are they trying to win a race to the future?
Mr. Allen. I believe that, in my opinion, they are trying
to win a race. I believe they have incentivized, or they have
driven this through a combination of incentives and mandates.
And they want to be the world's largest producer of electric
vehicle technology.
And that is why we believe that we have the prime
opportunity right now to incentivize the supply chain to be
here in the United States through a combination of investments
and domestic content requirements that can put the U.S. in the
right place to lead, and be not just sufficient for ourselves,
but be an exporter of this technology.
Mr. Malinowski. Well, fantastic, and I am glad that your
company is leading the way, in terms of manufacturing battery
systems and other critical components of this in the United
States. And thank you for encouraging us to do what we need to
do to make sure the United States wins that race. That is my
interest.
Mr. Allen. It is mine, also. Thank you, sir.
Mr. Malinowski. Thank you.
In the same spirit, I will move to Mr. Smith, as well. I am
very, very pleased to see that FedEx made this commitment to be
carbon neutral by 2040. When I meet with corporate executives
back home, increasingly I find there is a recognition that we
need market-driven policies to encourage that sort of change,
including a growing recognition that putting a price on carbon
is an efficient, market-driven way to bring down global
emissions.
The U.S. Chamber of Commerce just updated its position on
climate change to include support for what it calls a market-
based approach to accelerate reductions in emissions across the
U.S. economy. The Business Roundtable has adopted a similar
position. I just wanted to ask whether FedEx agrees, and
whether you believe we need to move, nationally, to a carbon
pricing system.
Mr. Stanton. Congress Member, I believe the representative
from FedEx, unfortunately, had to leave the meeting early.
Mr. Malinowski. Oh, I am sorry. Would anyone else be
interested in taking that question, then?
Mr. Konar. I can take a quick shot at it--I am definitely
not speaking for FedEx--but I believe a national carbon pricing
system--it is a global problem, it is a national problem that
we face--would actually be helpful.
And, you know, kind of the provision of market-based
incentives, which have worked in the renewable fuels standard,
and I go back to that because that is a good blueprint on how
this has worked before--is something that, you know, we should
think about in this respect.
Mr. Malinowski. Well, thank you. Well, I will say to you
all, and I would certainly have said to FedEx if they were
still here, it is very encouraging to hear corporate CEOs say
that, and to take those positions, just as it is encouraging to
hear them say we should rejoin the Paris Climate Accords.
I am hopeful that our private-sector Chamber of Commerce,
in particular, will really make this a priority, in terms of
their advocacy on Capitol Hill, because sometimes they say
these things, and they come to----
Mr. Stanton. Thank you.
Mr. Malinowski [continuing]. With us, and it is not
necessarily one of their top three issues. And that has got to
change to make progress.
Thank you, I yield back.
Mr. Stanton. Thank you very much. Next up will be the vice
chair of the committee, Vice Chair Davids.
Ms. Davids. Thank you, Chairman. And thank you to our panel
of witnesses for taking time to join us today.
I represent the Kansas Third Congressional District, which,
thanks to its central location, is one of the busiest
intermodal hubs in the country, where rail, trucking, aircargo,
maritime, and others meet. But, because of our geographic
location, we are right up against the confluence of the Kansas
and Missouri Rivers. We also have the second largest Federal
levees, only behind New Orleans.
The Weather Channel Climate Disruption Index has ranked
Kansas City as the 5th of 25 cities to be most impacted by the
effects of climate change in the coming years. Thanks in large
part to the urban heat index effect, we are going to see 20
days per year above 90 degrees. That is as compared to our
rural Kansas communities. And then we also have increased
chances of drought in the coming years. And as storms and
weather patterns become more severe, they are going to put a
lot of stress on our transportation systems and public
infrastructure.
And I think that we have heard a lot about how we can
address all of these things here today. And during the 2 years
I served on this committee I have been fortunate to see the
ways that the folks here today in your sectors are responding
to this existential threat. And I think that we have seen that
we are going to need a true partnership to tackle these. And I
think I am going to start with Mr. Lewis.
Your testimony recognizes the benefits of using a life-
cycle funding cost perspective in infrastructure investment,
and that there are very--``limited tools'' is what you said. I
was hoping you could expand on those tools, and whether or not
Congress can help increase the access to those tools.
Mr. Lewis. Yes, thank you for your question. Yes, there are
tools, actually. Unfortunately, there is not a single set of
consensus tools and standards to be applied. So, from a Federal
standpoint, there could be at least guidelines that would
commit to what an acceptable tool and an acceptable standard
would need to include. And you wouldn't have this problem of
multiple different sources and organizations putting out
different performance metrics and approaches.
The American Society of Civil Engineers is currently
working on a standard for sustainable infrastructure that
should come out at the end of this year, which will be an ANSI
standard. That will help.
There is a tool called Envision at the Institute of
Sustainable Infrastructure that was developed, and basically
takes a life-cycle approach that includes both sustainability
and resilience. So it goes even beyond what LEED does for
buildings. This does it for all types of infrastructure, and
really looks at not just how to build something sustainably and
in a resilient way, but also how you pick projects and how you
prioritize which projects should get the funding, and even what
locations are best for projects.
So there are tools out there, but there needs to be
incentives, or extra points, if you will, in Federal funding
for projects that use these tools, and deploy them, and score
higher on, for example, the Envision rating system that is in
existence. Because right now it is really just the honor system
in terms of organizations wanting to use these tools.
Ms. Davids. Thank you. And I think that is a great segue to
Mr. Rudd.
I would like to hear a little bit about the--you mentioned
probability weight of cost, and having cost models that rate
probability cost as we start looking at projects. And I am
curious if you could maybe expand on that, and, as we talk
about what tools are available, how you envision that being
used.
Mr. Rudd. Certainly. And, really, this is building off what
Mr. Lewis explained, which is, when you are looking at the
models that are used to ultimately determine or choose the
projects that will be invested in, in terms of infrastructure,
we typically look at what is the lowest cost model to find
around a certain set of parameters for that infrastructure.
And as Mr. Lewis pointed out, what we want to do is we want
to actually change that scoring system so in that procurement
process we are not simply looking at cost, we are also looking
at the measurable outcomes of resiliency, the measurable impact
on the environment or the emissions, the measurable impact on
the community itself, in terms of the health and safety of the
community. So it is, effectively, expanding that scoring system
to not just look at the lowest cost option.
And included in that is also looking at innovation. A lot
of times in these models innovation is ignored. I will give you
an example. There was a large tollway project that was being
evaluated. And in terms of noise reduction for the communities
around it, they had to look at retaining walls to do that, a
traditional way of insulating this noise. The alternative was
to use low-noise asphalt. It would have reduced the cost by 30
percent of the project. But ultimately, it was not within the
bounds of the standards of that procurement. And so it was not
part of any submission that was made.
So it is really opening up the standards so that you can
consider these other alternatives, other than cost.
Ms. Davids. Thank you, Mr. Rudd.
And Chairman, I yield back.
Mr. DeFazio [presiding]. I thank the gentlelady.
Mr. Mast? Brian?
Mr. Mast. Thank you.
Mr. DeFazio. Are you available?
Mr. Mast. Yes, thank you--can you hear me, Mr. Chairman?
Mr. DeFazio. Yes, yes, go ahead.
Mr. Mast. All right. Look, I think there has been a lot of
ambitious talking today about electrification, and I am not
saying that in a negative way. Probably all of us, as parents,
if we are parents, none of us would encourage our kids to
strive for anything other than something ambitious. That is,
hopefully, what defines us as Americans, is that we look to be
ambitious about the things that we do.
But I want to ask some specific numbers, because this
relates to everybody, as we are looking at the source of
electrification, which is having the power to--whether it be a
UPS or a FedEx truck, or some other delivery vehicle, or
somebody's home. And so the questions are going to be geared
towards you, Ms. Giammona.
As we look at some of those costs, obviously, we can see
variations in when we look at fuel costs, based upon global
geopolitics and what is going on. We can see fluctuations. But
as we look around domestically, we also see various
fluctuations in the cost for electricity, just domestically.
And obviously, wind is better in some places, sun is better in
other places. Different forms, you know, nuclear power in other
places, and other things. But could you speak to how do we work
to ambitiously get our average cost per kilowatthour down?
What is the best form of electrification in some places
that we are not looking at?
Do we need to look at more nuclear, whereas you have seen
the prices skyrocket in countries like Germany, because of
their move away from nuclear? I don't have a bend on that, I am
using that as an example.
I look at some of the averages, and I would be lying if I
said I knew all of the inputs that the Communist Party has put
into subsidizing their electricity costs. But Russia, being an
average of $.06 per kilowatthour, China listed as an average of
$.08 per kilowatthour, the U.S. on the average of somewhere
around $.13, $.14 per kilowatthour, California being up in the
20s, Florida being down around $.10 or $.11 per kilowatthour.
How do we ambitiously get to being at $.05, $.06 a
kilowatthour?
Ms. Giammona. Congressman, thank you for your question.
[Audio malfunction.]
Mr. DeFazio. Your internet is down.
Ms. Giammona. I am sorry, can you hear me now?
Mr. DeFazio. Yes, just start over again, Laurie. We
couldn't hear your answer to his question.
Ms. Giammona. OK.
Mr. DeFazio. Perhaps you need to--your video----
Ms. Giammona. OK, can you hear me now?
Mr. DeFazio. Yes.
Mr. Mast. Yes, ma'am.
Ms. Giammona. Great. Congressman, thank----
Voice. She is on mute.
Mr. DeFazio. Well, is she--are you muted?
We heard her for a second. I think it is the internet,
isn't it?
OK. Have we figured out what it is? Is it on her end, or is
it the----
[Pause.]
Mr. DeFazio. OK, Brian, why don't you try a question on
someone else who has better connectivity, and let's see if it
is the overall system or her connectivity.
Mr. Mast. Thank you, Mr. Chairman. Listen, I will yield
back to you. Maybe if you could just agree to, when her
internet gets back up, let her answer my question. It is really
the crux of my question, since Mr. Smith has moved on, as well.
So maybe, if you could just make that agreement, I would be
happy to yield back.
Mr. DeFazio. Sure. I would be happy to do that.
Mr. Mast. Thank you, Mr. Chairman.
Mr. DeFazio. Ms. Mace?
Ms. Mace. Thank you, Mr. Chairman. And first of all, I want
to thank everyone, all of our witnesses this afternoon, for
being on this panel and sticking around and spending much of
your day and answering our questions.
Being a freshman on the Transportation and Infrastructure
Committee, I have learned a lot today, and a lot leading up to
the testimony.
First, I want to thank Mr. Konar for his testimony. I am
pleased to learn that, as an industry, that you all have
adapted, and largely in response to tax incentives, and
utilizing those to sell lower carbon-intensive alternatives to
gasoline and diesel, and being innovative. And we have many
innovators who are on our panel today.
And this also echoes the comments we heard earlier today by
Mr. Hernick, who said that the Federal policy playbook should,
first and foremost, really harness the power of free markets.
And you really were speaking my language.
I want to turn to Mr. Allen, who is on here today, and I
wanted to turn to you next. I am really excited to see the
innovation of Proterra and what you are doing, not only in the
State of South Carolina. My understanding is that your location
in Greenville is expanding, you are looking to hire employees,
particularly during a really challenging time for many
businesses and industries.
In my hometown of Charleston, South Carolina, we have 6
electric buses, and our goal is to have 32 by the year 2022.
And I learned today that it is not just Tesla that is creating
batteries for electric vehicles and battery technology, but
Proterra also is being very innovative. And I appreciate and
commend your leadership and your company's leadership on that
technology.
Oftentimes the Government, when we are looking to be
innovative, can inhibit innovation through heavy-handed
regulation, and picking winners and losers through different
types of programs or funding mechanisms. Are there some areas
that you could talk to where the Government could potentially
get out of the way, or where we might be holding up growth and
development for the industry, going forward, so that we can
create better next-gen technologies, and a need for batteries,
for vehicles, buses, and the like?
Mr. Allen. Thank you very much, Congresswoman. We have been
in South Carolina--Greenville, specifically--since 2010. We
love being there. We love our workforce. They are just
incredibly dedicated, hard-working people. And I enjoy spending
my time there as much as I can, also.
And in addition, those are our buses, with our battery
technology that you are experiencing in Charleston right now,
so we are very proud of that also.
In terms of how we can work with the Government, I would
say from a manufacturing and development standpoint, the
Government doesn't get in the way of what we are trying to do.
We have a number of training programs in concert with
Government agencies and local community colleges to get our
people trained. And we are very proud of where that is.
I think the biggest thing that could help to accelerate
this industry, really, is on the demand side, as I have stated
earlier, and have the Government help agencies begin the
transformation. There are about 400 transit agencies in North
America today, and I believe less than 200 of those have their
first electric vehicle.
So I think it would be great for the Government to continue
to help agencies move towards electrification; and then again,
to incentivize the domestic supply chain, and provide
incentives through the ATVM program that would apply to our
industry would be great; and then the third would be support
fleet electrification. And primarily, this is on municipal
fleets and schoolbus transformation to electrification. I think
those three areas the Government supports today, and I think a
continued focus there and an acceleration would be wonderful
for our country. Thank you.
Ms. Mace. Thank you. And my last questions--I only have
about 1 minute left--really would go to anybody on the panel
today.
And learning more about electric vehicles across the board,
obviously, there is the cart before the horse. To develop
electric vehicles you have got to then have charging stations
all around. And there seems to be some disparity in terms of
what it costs, maybe, to put an electric charging station in a
residence, like at somebody's home, in your driveway, or in
your garage, versus maybe get a C store or a gas station or a
restaurant, or some other commercial location. I don't know if
there is anyone, with the few moments we have left, that could
kind of talk to that a little bit for those who might be
watching.
Mr. Konar. Congresswoman Mace, if I may answer that, at
least a little bit, there is a substantial difference between
charging inside communities, as opposed to charging on the
highway. When you have time, the cost of the charging stations,
which are level 2 chargers, is not very much. But when you are
looking to charge things in 20, 30, 40 minutes, then the cost
and the infrastructure needs to expand substantially. It could
be as much as 10-plus times when you are putting in these fast
chargers.
So that is just to give you a little bit of perspective.
But we are happy to follow up with that later, if you wish.
Ms. Mace. Thank you.
Thank you, Mr. Chairman.
Mr. DeFazio. Thank you.
We believe that Ms. Giammona is back online, and could now
answer Representative Mast's question.
Ms. Giammona?
Mr. Mast. I'm listening.
Mr. DeFazio. Yes, I know. We are waiting, we were told when
she was back online.
Ms. Giammona. Thank you, can you hear me now?
Mr. DeFazio. Yes.
That is all we ever get, though. She says that, and then it
goes down.
OK, sorry. We will try again in a minute.
Ms. Giammona. OK, can you hear me now?
Mr. DeFazio. Yes, we hear you say that every time, and then
it goes away. So keep talking.
Ms. Giammona. OK, all right. Well, thank you very much for
the question.
We believe that rates determined by commissions are really
what are going to help the issue of affordability.
We are collaborating with our commission in California,
focusing on addressing affordability, overall. And
specifically, we believe that EVs, coupled with time-of-use
rates, present opportunities to bring down rates overall, by
getting more throughput during times where there is excess
capacity on the grid.
Mr. DeFazio. OK. Brian, you have a little more time.
Mr. Mast. Thank you, Mr. Chairman.
Ma'am, if you could just expand a little bit on rates
determined by a commission, are you looking at both price
floors and price ceilings?
As we are all probably familiar with what we see on
electric bills for high-usage surcharges, is there going to be
an increase in seeing that, that you are not necessarily
accounting for if you have to now account for putting however
many kilowatthours into charging multiple vehicles of a home?
Just maybe elaborate a little bit on that for us. I would
appreciate it.
Ms. Giammona. Sure, thanks for the question.
California is moving to time-of-use rates for all
residential customers. We have had high-use rate charges. We
are starting to level those out. But the combination of time-
of-use rates, not just for your general residential customer,
but also for businesses, as well as programmatically for EV
charging, allow us to flatten out grid usage, allow us to
flatten out consumption, and which, ultimately, will bring
rates down overall in the State.
Mr. Mast. And if I have 1 more second, let me just ask
this, pointedly: Can we get to a U.S. average of $.08 per
kilowatthour, $.06 per kilowatthour? Can you get us there?
I know there are many out there that do electricity, but
let's hear your opinion.
Ms. Giammona. Well, you know, as you noted, in California
we are much higher than that, but it would be our hope. Our
focus, along with our State commissions and our regulators and
our policymakers, is really focused on reducing rates overall
in California.
But, like we heard from the Congressman from South Dakota,
rate structures are different, and fuel mix is different across
the country. So I think it is really a State-by-State
opportunity, if you will.
Mr. Mast. Thank you, Mr. Chairman.
Mr. DeFazio. Thank you.
Mr. Lamb?
Conor?
Mr. Auchincloss?
Ms. Bourdeaux?
Mr. DeSaulnier?
OK, Mr. Johnson?
Mr. Johnson of Georgia. Thank you, Mr. Chairman, for
holding this very important hearing, and I want to thank the
witnesses for sticking it out with us. It has been a long
hearing with some interruptions, but we appreciate you all very
much for your testimony.
Mr. Lewis, in your written testimony you highlight the
importance of incorporating equity into our climate and transit
solutions. A solution to climate change is inextricably linked
to the idea of transit. It is hard to separate the two, as
lower income communities and communities of color seek
environmental justice and transit justice.
Like the disparities laid bare by the effects of COVID-19
on health, death, and economic outcomes on people of color, the
climate crisis disproportionately impacts people of color. What
is your opinion on the issue of climate solutions being race
conscious?
Mr. Lewis. Yes, I think, absolutely, there is a connection.
It has been shown, whether it be COVID or it be other urban
challenges, in particular, that there is a disparate impact on
the more disadvantaged communities, which tend to be populated
by people of color. These are also communities that tend to
have more industrialization around them, happen to be usually
more in the flood-prone areas, closer to the waterfronts and
coastal.
So there are several factors that all work against these
highly vulnerable communities. And so that is why, when I
talked in my testimony about meeting these communities where
they are, you need to understand what they are dealing with,
their physical issues, their environmental issues, their social
issues. You need to reckon with the past that they have had to
deal with, their realities, before you can get their buy-in on
the solutions, whether they be transit solutions or they be
other solutions, like distributed energy, solar in their
neighborhoods, things like that, so that you can understand how
they are viewing things, and then work their ideas and their
perspectives into your solutions.
But transit is a great example, especially in urban
environments, of a way you can do that and get better mobility
for these communities, which gives them more opportunity, gives
them more access to jobs, and is a virtuous cycle.
Mr. Johnson of Georgia. Thank you.
Ms. Giammona, in your testimony you discuss the integration
of climate science into your company's practices and functions.
Please elaborate on how PG&E is responding to the climate
crisis.
Ms. Giammona?
[Pause.]
Mr. Johnson of Georgia. Well, I tell you, let me--OK, go
ahead, Ms. Giammona.
Well, let me move to Mr. Santana.
Mr. Santana, last week the Railroads, Pipelines, and
Hazardous Materials Subcommittee discussed the climate
solutions that a robust freight rail network presents to us.
What commitments are your companies making to ensure that
worker protections are central to climate goals?
Mr. Santana. Sir, we are very committed. We invest about
$200 million every year to solutions that are very much focused
along the lines of fuel efficiency and carbon reduction.
In addition to that, we look at ways to drive more
utilization of rail, as this is the most sustainable way of
moving freight along the way. And when we think about the
Freight 2030 vision, this will greatly enable growth in rail,
and that would help with all the goals you just mentioned.
Mr. Johnson of Georgia. Yes, there are many energy sector
jobs that are not considered worker-friendly, and that is the
reason why I asked you that question. Any particular thing that
your companies are doing to create worker protections that are
in keeping with other industries?
Mr. Santana. Absolutely. And last year we issued our
sustainability report, as a company, where we make a commitment
directly to reduce emissions ourselves, reduce water usage, but
at the same time a commitment to make sure that we are helping
the communities that we operate in, and really offering jobs
and opportunities here, whether it is for minorities, people of
color, and female representation. This is very much part of the
framework we have, and we have specific goals that we are
committed to meet.
Mr. Johnson of Georgia. Thank you, and my time is expired,
and I yield back.
Mr. DeFazio. I thank the gentleman.
Mr. Westerman?
Mr. Westerman. It is not coming on, Mr. Chair. Oh, I guess
it is. The light is not working.
Thank you, Mr. Chairman, and thank you to the witnesses for
your testimonies today.
Mr. Smith mentioned FedEx's investment in the Yale Center
for Natural Carbon Capture, which partners with the Yale School
of the Environment, where I attended long ago. From the front
page of the center's website, it states that ``emissions
reductions are crucial, but alone are not enough.''
I couldn't agree more, and that is why I have proposed
proactive natural solutions like the Trillion Trees Act that
would restore our forest, promote reforestation, promote
innovation, and promote market-based solutions for wood
products.
Mass timber construction is a relatively new innovation
that has many environmental benefits, and benefits for rural
economies. In my home State of Arkansas, the University of
Arkansas has constructed the country's largest mass timber
project, with two five-story dormitories. That project is soon
to be dwarfed by Walmart's new 15,000-employee corporate
headquarters that will also be constructed with mass timbers.
Now, Yale School of the Environment researchers recently
published a paper in the journal Nature Sustainability titled,
``Buildings as a Global Carbon Sink,'' and I ask unanimous
consent to submit that to the record, Mr. Chairman.
[No audible verbal response.]
[The information follows:]
Article entitled, ``Buildings as a Global Carbon Sink,'' by Alan
Organschi and Galina Churkina, Scientist, Potsdam Institute for Climate
Impact Research, Springer Nature Sustainability Community, February 5,
2020, Submitted for the Record by Hon. Bruce Westerman
Buildings as a Global Carbon Sink
by Alan Organschi and Galina Churkina, scientist, Potsdam Institute for
Climate Impact Research
Springer Nature Sustainability Community, February 5, 2020
https://sustainabilitycommunity.springernature.com/posts/59221-
buildings-as-a-global-carbon-sink
For decades, as anthropogenic greenhouse gas emissions and
corresponding atmospheric carbon concentrations have risen at an
alarming rate, scientists have investigated the capacity of forests,
soils, and oceans to act as carbon sinks, vast ecological systems that
might absorb, store, and offset the enormous release of carbon dioxide
associated with the combustion of fossil fuels. Some scientists have
raised concerns about the future durability of such natural carbon
sinks given that climate change itself has caused such significant
disturbance to those ecosystems.
The creation of human-made carbon sinks has only recently emerged
as a potential supplement to natural carbon uptake and storage domains.
Although there have been technological proposals and experiments in the
field of carbon capture--giant machines designed to draw CO2 from the
atmosphere--costs for both the hardware and the durable disposal of the
solidified carbon that results from these processes remain
prohibitively high relative to the current market value of carbon
offsets.
The growth and urbanization of global populations anticipated over
the next several decades will create an enormous demand for buildings
and infrastructure. As cities expand in size and density, the
manufacturing of materials required for constructing mid and high-rise
urban buildings will create a significant spike in greenhouse gas
emissions, a discharge that takes place at the beginning of each
building life cycle. This production stage carbon debt could take
precious decades to offset through operational energy efficiencies
alone.
Steel and reinforced concrete, the conventional structural
materials of the mid- and high-rise cityscape have high production
stage emissions and little or no capacity to store carbon. Their
inherent advantages of strength and stiffness come at a significant
environmental cost. New and emerging material technologies and building
assemblies in engineered timber combine significant structural
performance with carbon storage capacity and have been adopted by
various national building codes. These adaptations have enabled so-
called ``mass timber'' to challenge the dominance of mineral based
structural materials in the construction of larger and taller urban
buildings.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Construction of Brock Commons student residence using massive timber in
Vancouver, Canada. Foto credit: naturallywood.com. Photographer: KK
Law.
A small international and interdisciplinary team of architects,
forest and industrial ecologists, social scientists and climate change
researchers gathered to consider the possibility of exploiting an
anticipated global building boom as a means to mitigate rather than
exacerbate climate change. Could the use of bio-based, carbon-storing
materials such as timber, bamboo, and other forms of plant cellulose to
construct dense urban building landscapes serve as a technique to
offset most of the production stage emissions produced by the
extraction and manufacture of building components? Could the very
material that gives form and structure to those new cityscapes, which
we will have to build for 2.3 billion people by 2050, also act as a
storage bank for photosynthesized carbon? How much wood would the world
need to harvest to meet that demand and what would be the impact to the
health of forest ecosystems around the world?
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Construction of ARBORA complex with 435 residential units using massive
timber in Montreal, Canada. Foto credit: Nordic Structures.
As a consensus among the authors grew, they focused on concerns
about the feasibility of sustainable forest harvest at the global scale
and weighed a variety of potential mechanisms for the transfer of woody
plant material into urban building structures; no options were ignored.
(One scientist suggested that building log houses with very low
manufacturing CO2 emissions might serve to produce the fewest impacts
and the greatest material efficiencies, a proposition quickly vetoed by
the architects who argued that log-building would fail to meet both the
performance requirements and the construction practicalities of
contemporary mid-rise urban building, not to mention that it was
unlikely to have cultural appeal for today's city dwellers.) Debates
ebbed and flowed. After months of robust conversation and the exchange
of dozens of drafts, the team arrived at the design of a study that
would assess--succinctly but as comprehensively as possible within the
limits of a single technical paper--the relative potential of major
structural materials to either accelerate or mitigate climate change,
an approach described in a newly published Nature Sustainability
``Perspective''.
The broad-based substitution of engineered timber for steel and
concrete in mid-rise urban building offers the opportunity to transform
cityscapes from their current status as net sources of greenhouse gas
emissions into large scale, human-made carbon sinks. The sheer volume
of urban buildings projected for the remainder of the first half of the
21st century suggests that such a scenario could become a powerful tool
to mitigate climate change. Construction of timber buildings for more
than two billion new urban dwellers from 2020 to 2050 could store 0.01-
0.68 GtC per year depending on the scenario and the average floor area
per capita. Over a period of thirty years, wood-based construction can
accumulate 0.25-20 GtC and reduce cumulative emissions of carbon from 4
(7-20) GtC to 2 (0.3-10) GtC.
Such a transition to bio-based building materials, implemented
through the adoption of engineered structural timber products and
assemblies by the urban building sector, will succeed as a climate
mitigation strategy only under two conditions. First, designated
``working'' forests must be managed and harvested sustainably using
techniques appropriate to each forest at the stand level in order to
avoid scenarios of forest degradation and soil depletion. Second, the
wood from existing and future buildings (the latter specifically
designed for ease of disassembly) must be recovered and reused as a raw
material resource for consumer product manufacture or the next
generation of buildings. In this way, the city and the forest,
historically antagonistic landscapes, may begin to work in synergy to
help stabilize a climate in crisis.
Article entitled, ``Buildings as a Global Carbon Sink,'' by G.
Churkina, A. Organschi, C.P.O. Reyer, et al., Nature Sustainability,
Vol. 3, April 2020, Submitted for the Record by Hon. Bruce Westerman
[An abstract of the article appears below. The article is retained in
committee files.]
Churkina, G., Organschi, A., Reyer, C.P.O. et al. Buildings as a global
carbon sink. Nat Sustain 3, 269-276 (2020). https://doi.org/10.1038/
s41893-019-0462-4
Abstract--The anticipated growth and urbanization of the global
population over the next several decades will create a vast demand for
the construction of new housing, commercial buildings and accompanying
infrastructure. The production of cement, steel and other building
materials associated with this wave of construction will become a major
source of greenhouse gas emissions. Might it be possible to transform
this potential threat to the global climate system into a powerful
means to mitigate climate change? To answer this provocative question,
we explore the potential of mid-rise urban buildings designed with
engineered timber to provide long-term storage of carbon and to avoid
the carbon-intensive production of mineral-based construction
materials.
Mr. Westerman. Thank you.
We know that forests are the largest scale, most efficient
system to pull carbon out of the atmosphere, and wood products
like we see here on this dais are 40 to 50 percent, by weight,
stored carbon. Except for in some Western States, where we are
burning up forests faster than we are growing them, U.S.
forests are continuing to add carbon storage volume each year.
From the Yale study, the authors stated that mass timber
construction has the potential to create a vast bank vault that
could store up to 68 million tons of carbon, annually. They
added that a city using mass timber construction will become a
carbon sink versus a carbon source. They also concluded the
overwhelming climate benefit of mass timber is something that
every city planner should consider.
Mr. Rudd, I know your company is a large, global company.
And I have seen on your website that you have done some work
with mass timber. I have two questions.
The first one is what are the barriers for more mass timber
construction in buildings?
Mr. Rudd. Thank you for the question.
First of all, most of the projects that we are involved
with obviously are driven by the desires and the economic
benefits to our customers and to our clients.
And so, first of all, today, when we look at the--again, I
am repeating this--the models that are used to evaluate these
types of projects is focused on cost. It is not focused on
elements beyond simply the cost of the project. So, for
example, like promoting the investment in timber construction,
which effectively is creating a carbon sink, promoting
decarbonization of our environments.
So, again, my suggestion again is, when we look at these
types of projects, some encouragement in terms of the
legislation to promote thinking beyond just simply the lowest
cost model of construction would allow us to move in the
direction of promoting timber construction, large timber
construction, and promoting the creation and investment in
carbon sinks.
Mr. Westerman. Are you facing any regulations or building
codes that prohibit using mass timber construction?
Mr. Rudd. I will have to have somebody research that, and
get back to you with the answer. I don't know the answer to
that question.
Mr. Westerman. The U.S. Forest Service lab has also done
studies that show that using mass timbers in bridge
construction can produce structures that last up to 50 years.
What do you think about engineering firms, architecture firms
using mass timber in rural bridge construction?
Mr. Rudd. Well, again, when we look at our projects around
the world, we see a combination of mass timber construction,
steel bridge construction, and concrete bridge construction. As
far as I can tell, there is no regulation that is preventing
the adoption of it. I think we have to change that direction,
and look at not mandates, but look at ways of encouraging use
towards mass timber construction.
Mr. Westerman. And with what little time I have got, Mr.
Chairman, I would just add a plug that we have got to produce
more of our rare earth minerals here, in the United States, to
fuel our green economy. And I yield back.
Mr. DeFazio. I thank the gentleman.
Mr. Stanton?
Mr. Stanton. Thank you very much, Mr. Chair. Under your
leadership, this committee will soon take up a transformative
infrastructure investment bill. I can't wait. And it is so
important that we make the case that this hearing is making,
that when we make that investment, not only will it do right by
the American economy, and job creation, and pay for itself many
times over, but it is also going to help, when we do it right,
reestablish American leadership on the issue of climate change.
So thank you for hosting this important hearing.
I know that, as a former mayor of one of the largest cities
in America, that when we made smart investments in fighting
climate change and climate adaptation, it helped the city's
bottom line. It certainly helped when the various credit rating
agencies, the bond agencies, would rate the city of Phoenix,
which had the highest bond rating of any of the largest cities
in America. The fact that we made smart investments to fight
climate change at the municipal level was an advantage.
Arizona, of course, is getting hit harder, as hard or even
harder than almost any other State in the country, with extreme
heat and the drought conditions that we are facing, as well as
forest fires. So these investments are important, and they are
very real to our community.
On the private-sector side, by the way, corporations,
publicly traded corporations, are being judged whether or not
they are making the right investments in their future in
fighting climate change. So at the global level, at the
national level, at the State level, on the private level, this
is really good for business.
Mr. Allen, my question is for you. Your testimony states
that the Federal surface transportation policy supporting the
development of alternative fuel technologies and investments in
zero-emission vehicles can help ensure the United States
becomes the global leader that it should be in research,
development, and manufacturing of electric vehicles. I want you
to elaborate a little bit more on that. And what can this
committee, this important committee, do to help ensure that the
U.S. competitiveness stays in the global electric vehicle
market?
Mr. Allen. Thank you, sir, for the question. I think the
biggest area that this committee can help with, and the biggest
thing that we can do in the United States is support domestic
supply chain.
Today, the cells that all of us use come from a foreign
country. Many of them are from China, Korea, Japan. There is no
reason, with the increasing demand in the United States, that
we can't have cell manufacturing here in the United States, and
in partnership with the companies that are currently making
them. This will help mining in North America. This will reduce
supply chain costs, overall cost. It will create phenomenal
manufacturing jobs in the United States. So I encourage this
committee, through both incentives and Buy America
requirements, to move forward and help the supply chain make
these investments in North America.
As the gentleman from Pilot Flying J has said, it is very
difficult for companies to do this because of a little bit of
the chicken and the egg. So to have Government get out ahead,
and help these companies when volumes are low to be able to
provide the opportunity to scale up, is really an important
factor that I think can be a great public-private partnership,
going forward.
Mr. Stanton. Thank you so much for that answer.
Mr. Chair, I have some additional questions. I will submit
them for the record in the interest of time, and I will yield
back.
Mr. DeFazio. I thank the gentleman.
Mr. Lamb?
Mr. Lamb. Thank you----
Mr. DeFazio. Mr. Garcia?
Mr. Lamb [continuing]. Mr. Chairman.
Mr. DeFazio. What?
Mr. Lamb. Thank you, Mr. Chairman. And I----
Mr. DeFazio. Sorry, wait a minute, wait a minute. It was a
Republican turn.
Mr. Guest?
Sorry.
Mr. Guest. Thank you, Mr. Chairman. To all of our
distinguished panel, I want to thank you for being with us
today. I want to start off.
Mr. Hernick, in reading your testimony that you provided to
the committee, on page 2 you talk about ``Congress will need to
reduce or eliminate barriers to infrastructure development. It
should take 2 years, not 10 years, to permit infrastructure
projects. Redtape is not the price of good Government; it is
the enemy of good Government. America could modernize its
infrastructure, reduce costs, while dramatically enhancing
environmental benefits, with a 2-year approval process for
large construction projects.''
You go on to say that polling shows a significant
percentage, roughly 73 percent, support streamlining and
reforming Government regulations. I know that this is something
that I hear about routinely when I am back home in the
district, meeting with governmental officials. And I would just
ask you if you could please just expand on that for just a few
moments.
Mr. Hernick. Yes, absolutely, Congressman, I appreciate the
opportunity to go into a little more detail.
The truth is that what Americans want from their Government
is responsiveness. They are interested in seeing private-sector
solutions to meet their needs on a daily basis. And there is a
role for Government to safeguard the environment, safeguard the
people working on projects, and to safeguard national monuments
and the things that make this country great.
But really, Americans are looking for a firm thumbs up or
thumbs down on whether or not a project or a business can
proceed at pace. And when we are talking about creating jobs,
when we are talking about the economic transformation and
benefits that we are going to see from moving to a cleaner and
cleaner grid, and moving to a cleaner and cleaner national
transportation infrastructure, we want to make sure that that
can be done on a timely basis.
And I think that the FAST-41--the FAST Act--demonstrated
that these types of projects can be done upholding all of the
social and environmental safeguards that we need, that if we
hold Government bureaucrats accountable to a timeline, the same
way that the private sector is, the same way that I am, as an
employee, and that if we hold Government to those same
standards, Government can perform on a timeline. And I think
that is not too much to ask.
Mr. Guest. And you go on on page 8, and you talk about the
fact that there is another cost-efficient way to significantly
reduce emissions in the vehicle fleet. And you talk about
switching to low-emission fuel, such as natural gas or propane.
And I have also had the opportunity, when I am home in the
district visiting some of my propane suppliers, to talk about
or to hear about the benefits of propane vehicles, whether it
be automobiles, forklifts, riding lawn mowers--normally
vehicles which would burn either gas or diesel--being converted
to natural gas or propane.
You talked about cost savings, emission reduction, and
energy security. Again, could you just expand on that very
briefly, about the benefits of vehicles which would use natural
gas or propane, instead of gasoline or diesel?
Mr. Hernick. Absolutely. The bottom line, Congressman, is
that we need an all-of-the-above approach.
Mr. Allen spoke about the price point for electric
schoolbuses being there now. But there is still an upfront
cost. And some school districts, some municipalities just don't
have the cash on hand, especially in these tough economic
times, to make those kinds of investments.
It is going to be more appropriate to switch to propane in
some cases. And, you know, for moms and kids and dads standing
at the bus stop, those types of air quality emissions benefits
that we can see within the next year or two, well, that matters
a lot more than waiting for a complete transition to electric
vehicles. And that is not to say that electric vehicles aren't
a part of the future, they certainly are. But I think that what
we want is, from Government, an all-of-the-above approach to be
able to allow States and municipalities to utilize the most
locally appropriate approach.
Mr. Guest. And would you agree that we currently have the
technology, the ability on many of our vehicles to go ahead and
transition them over right now to propane or natural gas?
Mr. Hernick. It is happening right now. I live in Maryland,
and it is one where Governor Hogan has taken the issue very
seriously. He wants to reduce emissions. And so it has been
great to see his administration be able to make those switches,
and make that investment. They are improving air quality and
reducing emissions in a very cost-effective way, and I think
that is something that the Federal Government can look at, too.
Mr. Guest. Thank you, Mr. Chairman, I yield back.
Mr. DeFazio. I thank the gentleman.
Mr. Lamb?
Mr. Lamb. Thank you, Mr. Chairman. I wanted to start out by
just emphasizing the great local support that Wabtec's Freight
2030 vision has already obtained in Pittsburgh.
And if I could ask unanimous consent to insert two letters
into the record from the Greater Pittsburgh Chamber of Commerce
and the Allegheny County Executive regarding the Freight 2030
vision.
Mr. DeFazio. Without objection.
[The information follows:]
Letter of March 17, 2021, from Matt Smith, President, Greater
Pittsburgh Chamber of Commerce, Submitted for the Record by Hon. Conor
Lamb
March 17, 2021.
Hon. Peter DeFazio,
Chairman,
Transportation and Infrastructure Committee, U.S. House of
Representatives, 2134 Rayburn Office Building, Washington, DC.
Hon. Sam Graves,
Ranking Member,
Transportation and Infrastructure Committee, U.S. House of
Representatives, 1135 Longworth House Office Building,
Washington, DC.
Dear Chair DeFazio and Congressman Graves:
On behalf of the Greater Pittsburgh Chamber of Commerce, the
advocacy affiliate of the Allegheny Conference on Community
Development, I write to express our support for the public-private
partnership proposed by Wabtec Corporation, Genesee & Wyoming, and
Carnegie Mellon University to establish a Freight Rail Innovation
Institute. This partnership presents a unique opportunity to positively
impact our environment, improve the economic future of the Pittsburgh
region while also increasing the competitiveness of the nation's
infrastructure by providing the equipment and technology to move
freight more efficiently, effectively, and cleanly.
The Pittsburgh region is an established testbed and proving ground
for world shaping technologies and innovations like the ones that this
partnership is designed to yield. The region's world-class educational
institutions, including two Tier 1 universities that anchor a robust
innovation ecosystem, coupled with a long history of effective public-
private collaboration, make it exceptionally positioned to serve as
home to this institute.
Furthermore, this project is consistent with the sustainability
principles adopted unanimously by the Allegheny Conference's Board of
Directors in January 2019. These principles guide the Conference's work
as it seeks to balance a healthy environment and a healthy economy. The
proposed Freight Rail Innovation Institute aligns with these principles
given its efforts to expand the use of rail freight, accelerate the
reduction of national greenhouse gas emissions, extend the life of our
roadway networks, and make transportation safer for the benefit of all
our communities.
We recognize and welcome investments in sustainable energy and the
efforts to achieve a low carbon future. Achieving this objective will
require unwavering commitment to and investment in research and
development initiatives; the proposed Freight Rail Innovation Institute
will catalyze these efforts.
With freight volumes forecasted to grow approximately 30 percent
from 2018 to 2040 according to the U.S. Department of Transportation,
the proposed institute possesses a unique opportunity to drive a more
sustainable future that also increases economic growth. With over
140,000 miles of track across the U.S. freight network, investment in
the future of rail benefits the entire country and invests in the
network that moves our goods to market and makes modern life possible.
Investment in this private-public partnership will accelerate the
commercialization of technologies dedicated to sustainable energy,
autonomous deployments, and advanced network logistics, and strengthen
the ecosystem of rail supply companies and contractors that employ
thousands of well-paying freight-related careers. Support of the vision
championed by Wabtec Corporation, Genesee & Wyoming, and Carnegie
Mellon University will take this vision to a reality from which we can
all benefit.
Pittsburgh is an innovative hub for tangible outcomes changing the
world. As such, we feel there is no better place for this Institute to
thrive. I urge your strong consideration and support of the Freight
2030 vision and investment in our shared economic future. Please feel
free to contact me with any questions or if you need further
information.
Sincerely,
Matt Smith,
President, Greater Pittsburgh Chamber of Commerce.
Letter of March 16, 2021, from Rich Fitzgerald, County Executive,
Allegheny County, PA, Submitted for the Record by Hon. Conor Lamb
March 16, 2021.
Hon. Peter DeFazio,
Chair,
Transportation and Infrastructure Committee, U.S. House of
Representatives, 2134 Rayburn Office Building, Washington, DC.
Hon. Sam Graves,
Ranking Member,
Transportation and Infrastructure Committee, U.S. House of
Representatives, 1135 Longworth House Office Building,
Washington, DC.
Chair DeFazio and Congressman Graves:
I write today to convey my support for the public-private
partnership being proposed by Wabtec Corporation, Genesee & Wyoming,
and Carnegie Mellon University to create a Freight Rail Innovation
Institute. This initiative will assist in Congressional goals of
building a clean energy economy and creating jobs while also curbing
the effects of climate change. Its location in the Pittsburgh region
would also allow for all parties involved to take advantage of the
education and research occurring here.
Our region is not the Pittsburgh of 30 years ago, but it is a
community that welcomes, embraces and invests in green energy and
sustainability. We also recognize that there is a bridge that moves all
of us from reliance on fossil fuels to sustainable energy. That shift
in our energy requires investment and commitment, as well as a vision,
that is clearly evident in the proposed Freight Rail Innovation
Institute. Efforts to expand the use of freight rail, accelerate the
reduction of national GHG emissions, reduce road congestion, and make
transportation safer is a benefit for all of our communities.
As you are likely aware, this region has a long relationship with
rail and has continued to invest in its development and expansion. With
over 140,000 miles of track across the U.S. freight network, investment
in the future of rail benefits the entire country. A single freight
train can move a ton of freight 472 miles on one gallon of fuel. Rail
moves 40% of freight and accounts for less than 1% of total U.S. GHG
emissions. Imagine the our domestic policy. With investment in this
partnership, technology research moves forward more quickly with a
vision and there are dedicated efforts to focus on best practices as it
relates to green energy and advanced network logistics. Support of this
effort takes this vision to a reality from which we can all benefit.
I urge your strong consideration and support of the Freight 2030
vision and investment in the future of freight. I stand ready to answer
any questions you may have of me, or to provide additional information
as needed.
Sincerely,
Rich Fitzgerald,
County Executive, Allegheny County, PA.
Mr. Lamb. Thank you, Mr. Chairman. This vision really
builds on what, in western Pennsylvania, has been a successful
model of collaboration between our universities--in particular,
Carnegie Mellon--and these great heritage companies that we
have, like Wabtec, which is related to the original
Westinghouse set of endeavors, that has given us things over
the years like nuclear energy, and a number of defense
technologies, and important technologies for freight rail. And
this is really the next generation.
And so, Mr. Santana, I'm hoping that you are still on here
remotely, I was hoping that you could go into a little bit more
detail for the committee about the sort of public-private
balance of the project that you guys are proposing here. Our
understanding is you already have a locomotive running on a
battery, essentially, out in some very harsh terrain out in
California. But there are further leaps that need to be made,
further scientifically--in particular, bringing hydrogen into
the equation, and all of the manufacturing and engineering that
would go into actually making those fuel cells for the future.
If you could, talk a little bit about how that demand for
further research and knowledge would be met in a mix of
investment by your company privately, a university like
Carnegie Mellon, and the Federal Government, as well.
Mr. Santana. Representative Lamb, we are seeking your
approval for this public-private partnership, so we can really
bring and start working with the Department of Energy, the
Department of Transportation, and making sure that we
ultimately are really executing on the vision we laid out,
which starts with decarbonization.
There is significant steps here that would evolve with the
next generation of battery-electric locomotives. But getting to
fuel cells and getting to hydrogen, it is a roadmap that
provides, I think, critical milestones to continue to
decarbonize solutions for rail at the same time it de-risks as
we go there.
On the other front, we have the opportunity here to
increase rail utilization. This partnership with CMU, we bring
the best of the country, and certainly the best of Pittsburgh,
when it comes to both artificial intelligence and robotics.
This is about, really, creating more efficiency as you move
things from point A to point B, which ultimately translates to
more competitive logistics for the country. And it comes down
to creating standards. It comes down to really connecting a
multitude of stakeholders to this process.
And so----
Mr. Lamb. Thank you and I think the competitiveness----
Mr. Santana [continuing]. Down the----
Mr. Lamb. If I could, yes, just get in before we run out of
time, I think the competitiveness point is a key one, because
we are not the only ones in the world who are interested in
improving our freight and logistics.
And we certainly are not the only ones in the world who are
interested in hydrogen. Europe and China have both already
openly published national hydrogen strategies. This is a new
technology that they intend to dominate and not allow the
United States to be the world leader in the way that we were
world leaders in oil exploration, and natural gas exploration,
and nuclear energy, and all the rest.
And so, for those considering what is the role of public
investment in public and private partnerships like this, one
important role is simply to win the race, to speed up the pace
of our development and advancements, because we are going
against state-backed enterprises from China, and similar
dynamics from the EU, as well.
So I think your proposal is a great one. I hope that the
committee can continue to work with Wabtec and CMU, and all of
those interested in this, not just for the good of western
Pennsylvania, which is very close to my heart, but I think it
is part of our overall national transportation and
competitiveness strategy.
And with that, Mr. Chairman, I yield back.
Mr. DeFazio. I thank the gentleman.
Mr. Fitzpatrick?
Mr. Fitzpatrick. Thank you very much, Mr. Chairman. I have
two questions for Mr. Henrick.
And I will ask both of them, and I will allow you to
respond.
The Federal Government just spent close to $7 trillion over
the last year in response to the pandemic. My first question
is, how do you think Congress should pay for the country's
much-needed infrastructure, going forward, what revenue
mechanism?
And second, you had mentioned FAST-41 in your opening
testimony. It is viewed as a tremendously successful model for
ensuring infrastructure projects stay on track. So I was just
wondering, secondarily, if you could outline some of the
successes from this program, and explain why you think this
bipartisan initiative should be extended.
Mr. Hernick. Well, thank you for your questions,
Congressman Fitzpatrick.
There has been a lot of stimulus, and a lot of money that
Congress has passed just recently. I do want to underscore that
$34 billion of that was for clean energy, as a part of the
Energy Act of 2020. And I do want to thank, again, the Members
who voted in a bipartisan manner to support that Energy Act of
2020. It included very important price signals for the market
in terms of tax incentives, and also included important updates
for the Department of Energy, in particular, to be able to get
us to that next generation of clean energy.
I think that is important to underline, that we have
already done a lot, and I think it is important to see how that
affects the economy. I mentioned earlier that I have four
daughters. In terms of how to pay, I would rather that we
figure out how the folks on this screen here can pay for any
additional spending on transportation and infrastructure, and
not those girls. I think it is important to be able to look at
a balanced budget approach, and make sure that we are not
overdoing it. There is a lot of stimulus in the pipeline.
There is no shortage of private-sector capital that is
aimed at clean energy. Very specifically, some of the biggest
investors on Wall Street have climate considerations that they
are putting in on a voluntary basis to help guide their funding
towards clean energy. So if you have got a clean energy
project, and it can pencil out, you have got an investor. There
is no question about that.
In terms of FAST-41, I think that it is also important to
note that there are the types of projects that we need to make
this transition to a clean transportation and a clean energy
future in there: wind power on public land, and then a couple
of different transmission lines that are going to be needed to
assure that we have the reliability built into our grid to
diversify, maintain an all-of-the-above approach to generating
power, and then ensure that folks can keep the lights on, no
matter what Mother Nature brings or has in store for us.
So there is a major opportunity to reauthorize FAST-41.
That is kind of a first step, in my mind. I think that looking
to One Federal Decision and codifying that, as well, would be a
second and also a beneficial step.
Mr. Fitzpatrick. Thank you, Mr. Henrick, and thank you to
your organization for being very objective, very policy
focused, working in a bipartisan manner. There is a huge need
out there. You guys do a really good job in working with
Democrats and Republicans to advance responsible solutions. So
I thank you for that, sir.
I yield back, Mr. Chairman.
Mr. Hernick. Thank you.
Mr. DeFazio. Thank you.
Mr. Garcia?
[Pause.]
Mr. DeFazio. What? All right.
Well, I want to thank our witnesses for hanging in through
a long hearing. I appreciate all your contributions to this
topic, and you have proved to be a valuable resource.
So, since there are no further questions from the
committee, I ask unanimous consent that the record of today's
hearing remain open until such a time as our witnesses have
provided answers to any questions that may be submitted to them
in writing.
I also ask unanimous consent the record remain open for 15
days for any additional comments and information submitted by
Members or witnesses to be included in the record of today's
hearing.
Without objection, so ordered.
The committee stands adjourned.
[Whereupon, at 3:02 p.m., the committee was adjourned.]
Submissions for the Record
----------
Prepared Statement of Hon. Eddie Bernice Johnson, a Representative in
Congress from the State of Texas
Mr. Chairman, the work of the Full Committee on climate change and
our ability to impact change is critical to the health and wellbeing of
people in our country. Climate impacts everyone and everything. The
transportation industry is one of the largest contributors to
greenhouse gas emissions because of the number of trucks and cars on
the road.
This hearing, focusing on the business case for climate solutions,
gives us the opportunity to understand how private sector innovation,
along with meaningful government investments, will help the U.S. become
a leader in the clean energy economy. We cannot allow this industry to
be dominated by foreign companies. We must bring these jobs home.
President Biden's goal of adding 500,000 EV charging stations over
the next decade requires a strong partnership between the federal
government and the private sector. I would like to see American
companies building and maintaining the clean energy sector in the
United States. We must be self-reliant and build resilient and
affordable clean energy solutions. There is no doubt that expanding the
electric vehicle industry will provide more well paid jobs here in the
U.S. I understand that in California, electric vehicles provided over
275,600 jobs with an average annual wage of $91,300 in 2018.
According to the Dallas-Fort Worth Clean Cities, direct jobs are
created through increased production by firms that make plug-in
electric vehicles (PEVs), PEV components, and PEV infrastructure.
Indirect jobs are those tied to firms that supply to these direct
producers. Further, higher employment in direct and indirect jobs leads
to more spending in the broader economy. These create induced jobs in
industries like food, clothing, and entertainment.
According to Plug in America, the increased use of domestic
electricity in the transportation sector promotes national security by
reducing our dependence on imported oil. These vehicles keep the U.S.
competitive with China and the European Union, which are both moving
aggressively towards full deployment of the vehicles and nationwide
charging systems. There are currently over 19,281 PEVs on Texas roads
today, with the market ready to expand as new vehicle makes and models
become available in Texas. These vehicles are a win-win for Texas and
consumers want more of them.
In the public transportation sector, research shows that in 2019,
over 9.9 billion trips were taken by Americans on public
transportation. Over 71% of those public transit riders are employed.
Public transit takes people to work and back home and it leads the way
to a cleaner climate and thus healthier lives for everyone.
It is my hope that the fuel operators and the electric vehicle
charging network will be able to work together to establish a safe,
affordable and reliable network to keep our country moving forward. I
look forward to the testimony of each of the witnesses today. Thank
you, Mr. Chairman.
Letter of March 17, 2021, from Cathy Bennett, Sr. Vice President for
Public Policy, Greater Kansas City Chamber of Commerce et al.,
Submitted for the Record by Hon. Peter A. DeFazio
March 17, 2021.
Hon. Peter DeFazio,
Chair,
Committee on Transportation and Infrastructure, 2134 Rayburn House
Office Building, Washington, DC.
Hon. Sam Graves,
Ranking Member,
Committee on Transportation and Infrastructure, 1135 Longworth House
Office Building, Washington, DC.
Dear Chair DeFazio and Ranking Member Graves:
Our business organizations urge your committee to update the
federal transportation program to measure success by access to
destinations--not vehicle speed--to support public transit, connected
communities, businesses, and our climate.
Communities with strong transit, walking, and bike access to jobs
and services produce lower greenhouse gas emissions, while also serving
as great environments for vibrant economic activity and more equitable
opportunity. Yet the federal transportation program does not support
the development of these communities.
Instead, the federal transportation program increases vehicle miles
traveled--and thus greenhouse gas emissions--by design, solidifying
transportation as the largest source of greenhouse gas emissions in the
United States. This is because for decades, the federal program has
used vehicle speed as a flawed proxy to measure how well people can
access jobs and services like healthcare, education, and grocery
stores.
As a result, our states and communities have built more roads and
spread out destinations, often requiring longer car trips while making
walking, bicycling, and accessing public transit stations unsafe,
unpleasant, or impossible. This has put the United States on a path of
endlessly-increasing vehicle miles traveled and greenhouse gas
emissions. It has also made our communities less convenient and limited
economic growth by increasing costs and travel times for
transportation.
Fortunately, technology exists to measure success by what actually
matters to Americans and our businesses: the ease of arriving at your
destination--not vehicle speed. Instead of prioritizing investments in
road widenings and expansions that fail to improve access to jobs and
services and increase our carbon emissions, we can invest in the most
impactful and cost efficient infrastructure, which may be highways,
public transit, passenger rail, or safe pedestrian and cyclist
infrastructure. Providing more transportation choices and more
connected communities creates more opportunities for business while
also reducing emissions from transportation.
To do this, the federal transportation program should require the
U.S. Department of Transportation to determine how well the
transportation system connects people to jobs and services, and
prioritize projects that will improve those connections. USDOT must
collect the data necessary to develop a national assessment of access
to jobs and services and set national goals for improvement. With this
data, state departments of transportation and planning organizations
can ensure that federal investments effectively connect people to
economic opportunity. Funding should go to projects that will improve
these connections, regardless of mode. State departments of
transportation (DOTs) and metropolitan planning organizations (MPOs)
should be held accountable by evaluating how well their investments
help connect people to destinations.
We are tired of spending over $40 billion in federal tax dollars on
transportation every year that fails to bring us the connected,
transit, biking and walking friendly neighborhoods that businesses and
customers desire. We urge your committee to align transportation
funding with the outcomes our businesses need: getting people to jobs
and services sustainably, equitably, affordably, and conveniently--by
any mode. This approach will benefit the bottom line and the climate.
Sincerely,
Cathy Bennett,
Sr. Vice President for Public Policy, Greater KC Chamber of
Commerce,
Kansas City, MO.
Mark Fisher,
Chief Policy Officer, Indy Chamber, Indianapolis, IN.
Nicholas Glover,
Vice President, Advocacy, Tampa Bay Chamber, Tampa, FL.
Chip Hallock,
President & CEO, Newark Regional Business Partnership, Newark, NJ.
Ashley Henry,
Executive Director, Business for a Better Portland, Portland, OR.
Paul Oh,
Manager, Public Policy, Gwinnett Chamber of Commerce, Duluth, GA.
William Schroeer,
Executive Director, East Metro Strong, Saint Paul, MN.
Ann Silver,
Chief Executive Officer, Reno + Sparks Chamber of Commerce, Reno,
AZ.
Jonathan Weinhagen,
President & CEO, Minneapolis Regional Chamber of Commerce,
Minneapolis, MN.
Statement of the Carnegie Mellon University, Submitted for the Record
by Hon. Peter A. DeFazio
Introduction
Carnegie Mellon University commends Chairman DeFazio, Ranking
Member Graves and the Members of the Committee for pursuing an
aggressive hearing agenda at the start of the 117th Congress to examine
the critical challenges facing the United States--from economic
recovery to climate change, environmental equity, global
competitiveness, and optimizing US supply chain and manufacturing, and
how central investments in the transportation sector are to addressing
them.
In particular, we are pleased to submit the following statement for
the record following the Committee's March 17, 2021 hearing on the
Business Case for Climate Solutions, which examined the potential of US
industry, including the rail industry, to mitigate climate change. This
hearing highlighted the role that a bold agenda for the decarbonization
of freight rail can play in achieving climate objectives, strengthening
U.S. manufacturing and enabling a more robust and resilient
manufacturing supply chain.
Freight 2030--Ensuring U.S. Leadership in Clean Energy Rail Freight
Technologies and Improving Rail Safety
As Mr. Rafael Santana, President and CEO of Wabtec testified at the
hearing, Freight 2030 is a bold plan to accelerate the development of
near zero emissions freight rail. Developed in collaboration with
Carnegie Mellon and Genesee and Wyoming Railroad, Freight 2030 offers a
vision to ensure that the U.S. wins the race for global leadership in
Zero Emission rail. It is an industry-driven strategy to rapidly
combine breakthrough research with applied development, prototyping and
scalable commercialization. It also requires a creative and
comprehensive workforce strategy to support training and education for
workers across the transportation and manufacturing industries.
The goals of this initiative are ambitious and transformative: To
transition the freight rail system to zero or near-zero-emission
battery and hydrogen hybrid locomotives, with a target reduction of 120
million metric tons of CO2 per year in the US; enable a 50% reduction
in safety incidents through intelligent systems and sensing; enable a
50% increase in freight rail utilization; and generate up to 250,000
new jobs, of which half would be direct job creation in transportation
and manufacturing.
Freight 2030 envisions the creation of a new advanced clean energy
rail technology and logistics ecosystem. Achieving H2 substitution in
engine operations and railway grade fuel cells demands advances in new
materials and advances in batteries and storage, combined with the
intelligent systems engineering needed to deploy these capabilities. In
turn, advances in artificial intelligence will be needed to support
expanded rail capacity. AI will enable the enhanced signaling and
network traffic systems to ensure increased safety and increased rail
utilization and seamlessly connect the railroad system to intelligent
ports. AI and autonomous systems technologies will be vital to break
the last mile bottleneck that will enable realization of enhanced
multi-modal innovation.
Carnegie Mellon has a rich history of engagement in initiatives
advancing innovation in energy and artificial intelligence to transform
industries and foster innovation led job creation. The focus on
integrating research deployment Freight 2030 has the potential to
catalyze job growth across the nation and strengthen leadership in both
clean energy and logistics industries.
This is a global race. This initiative will match similar
investments that global competitors are advancing. Support for Freight
2030 will help ensure that the U.S. wins the race to global leadership
in Zero Emission rail.
Building the Tools to Support Workforce Development and Engaging
Directly with Workers
Freight 2030 is at its essence a jobs initiative. It seeks to
create jobs throughout a new clean energy rail industry--from clean
fuel locomotive production to systems operations to rail yard
management across the nation.
These jobs will require new skills, understanding of new data
driven technology applications, and increased worker teaming with
intelligent systems.
Freight 2030 will include the development of workforce training
initiatives from the start. This effort will include collaborations
with training organizations supporting both manufacturing and rail
operations workers.
Conclusion
This Committee continues to demonstrate transformative leadership
to accelerate innovation in American transportation industries. It was
the work of this Committee that helped catalyze U.S. leadership in
autonomous vehicle technologies, which has contributed to the creation
of over three thousand jobs in just the Pittsburgh region alone. The
Committee's unwavering commitment to innovation initiatives in the
Department of Transportation has also helped shape collaborative
university/industry initiatives in areas such as smart city
technologies that are reshaping transportation, mobility and the
sustainability of urban and rural communities.
Freight 2030 can add yet another chapter to this record of
innovation by advancing a new generation of U.S. leadership in freight
rail manufacturing and technologies.
Letter of February 7, 2021, from Joy Ditto, President & CEO, American
Public Power Association; Tom Kuhn, President, Edison Electric
Institute; and Jim Matheson, CEO, National Rural Electric Cooperative
Association, Submitted for the Record by Hon. Peter A. DeFazio
February 7, 2021.
Hon. Pete Buttigieg,
Secretary,
U.S. Department of Transportation, 1200 New Jersey Ave., SE,
Washington, DC.
Hon. Michael Regan,
Administrator-designate,
U.S. Environmental Protection Agency, 1200 Pennsylvania Ave., NW,
Washington, DC.
Hon. Jennifer Granholm,
Secretary-designate,
U.S. Department of Energy, 1000 Independence Ave., SW, Washington, DC.
Hon. Gina McCarthy,
National Climate Advisor,
Executive Office of the President, 1650 Pennsylvania Ave., NW,
Washington, DC.
Dear Secretary Buttigieg, Secretary-designate Granholm,
Administrator-designate Regan, and Climate Advisor McCarthy:
The nation's investor-owned electric companies, public power
utilities, and electric cooperatives--which our organizations proudly
represent--look forward to working with you and to leveraging the
investments our members are making to help meet your Administration's
goal of deploying electric vehicle charging stations across the
country.
Our members provide safe, reliable, and affordable energy to more
than 300 million Americans. The electric power industry supports more
than 7 million American jobs and contributes $880 billion annually to
U.S. gross domestic product, about 5 percent of the total. Each year,
our industry invests more than $110 billion to make the energy grid
stronger, smarter, cleaner, more dynamic, and more secure. These
investments enable us to integrate more clean energy and new
technologies into our electric systems, including electric vehicles
(EVs), to benefit customers.
Our members are proud of the progress that has been made in
deploying clean energy resources. As the Administration turns to
electrifying transportation, we are committed to working with you to
leverage our industry's investments to deploy electric vehicle charging
infrastructure and to accelerate electric transportation adoption that
will grow the economy and benefit the environment.
To get more EVs on U.S. roads, it is important that we invest in
and deploy more charging infrastructure. Building this infrastructure
will require public-private partnerships, and our members are critical
to that effort, in part because they employ a highly skilled workforce
that builds and maintains the energy grid. A collaboration between the
federal government and our sector will help to create additional jobs
and will help spur economic recovery.
Charging stations are one piece of a vast system with implications
for the grid. Our members are a crucial partner in building and
maintaining the infrastructure to deploy EV charging stations at all
the locations where EVs charge. These investments are structured to
best serve communities and customers.
Our members already own and operate EV charging stations in a
variety of locations and for all types of customers. These arrangements
are particularly beneficial to consumers who prefer not to procure and
maintain charging infrastructure and seek a turnkey solution. Some of
our members install the ``make-ready'' infrastructure that connects to
the charging equipment, leaving it to the consumer to own and maintain
the charging station. And other members offer rebate programs to offset
the costs to install charging infrastructure.
Regardless of the approach, each of these solutions is critical to
building charging infrastructure that helps to spur the EV market and
benefit communities. This is particularly true in regions where private
investment in EV charging stations historically has been difficult.
It is important that all communities have access to the benefits of
EVs, and our members are investing in underserved communities, in
electrifying car-sharing and public transportation systems that serve
those who do not own vehicles, in electrifying commercial vehicles such
as delivery trucks that operate within neighborhoods, and assuring that
Americans can charge their vehicles coast-to-coast in urban, suburban,
and rural communities. Each community may have a different model that
works best. Providing flexibility will ensure that more communities can
participate in charging programs, leading to more EV charging stations
across the country.
Local decision-making will help ensure charging stations meet the
needs of each community. Our members continue to work with local
stakeholders and are best-positioned to understand and to maximize the
value of different technologies and systems that can help optimize the
operation of the grid, integrate EVs, and recover more quickly from
natural disasters.
However, the federal government is a key partner in the research
and development related to EVs and the associated charging
infrastructure, and technical and financial assistance can help
accelerate deployment. Existing programs across federal agencies have
been effective in deploying alternative-fuel vehicles and
infrastructure, while other programs should be updated to reflect
current advancements in technology.
Today, nearly 40 percent of the nation's electricity comes from
carbon-free sources, and carbon emissions from the U.S. power sector
are at their lowest level in more than 30 years--and continue to fall.
The electric power sector's significant leadership in reducing carbon
emissions can help drive carbon reductions in other sectors, especially
transportation, through increased electrification.
We look forward to working with you and to our continued
partnership in advancing clean energy technologies and electric vehicle
infrastructure.
Sincerely,
Joy Ditto,
President & CEO, American Public Power Association.
Tom Kuhn,
President, Edison Electric Institute.
Jim Matheson,
CEO, National Rural Electric Cooperative Association.
Letter of March 15, 2021, from Joe Britton, Executive Director, Zero
Emission Transportation Association, Submitted for the Record by Hon.
Peter A. DeFazio
March 15, 2021.
Hon. Peter DeFazio,
Chairman,
House Committee on Transportation and Infrastructure, United States
House of Representatives, 2134 Rayburn House Office Building,
Washington, DC.
Dear Chairman DeFazio,
Electrifying transportation is critical to helping the United
States compete for investment, advance technological innovation, grow
our economy and address climate change. We have the opportunity--if we
make the right policy decisions today--to cultivate an advanced vehicle
industry that drives decarbonization, creates jobs, and once again
makes us the envy of the automotive world.
Electric vehicles (EVs) support over 300,000 American jobs with new
EV manufacturing and infrastructure poised to create hundreds of
thousands of new jobs in the years to come. EV growth is projected to
accelerate worldwide, whether manufactured in the U.S. or elsewhere.
Other countries know this and are moving aggressively to seize the
generational opportunity. We must lead this race or we'll cede this
economic opportunity to foreign competitors.
In particular, China and the EU have risen to dominance in the
critical supply chain and EV sector over the past 15 years. China's
moves to control critical material supply chains are not only a threat
to EVs but also consumer electronics and national security
infrastructure. While some raw materials are sourced in other parts of
the world, China controls a full 70-90% of the processing and
production. The U.S. has an opportunity to counter this threat, and
secure our own economy, by responsibly expanding our ability to source
these materials from within our own borders. Not only will domestic
sourcing bolster job creation, but it will also ensure high standards
for our environment and workforce.
Despite the gains made by other nations, the United States is still
strongly positioned to outcompete even the most advanced EV leaders
around the globe. In fact, the most sought-after EV technologies are
homegrown in the United States. Dozens of aspiring U.S. companies are
producing EVs that will alter the landscape in the years ahead.
As you know, transportation is the largest carbon-emitting sector
in the economy, responsible for 28% of emissions. Electrification of
the transportation sector will significantly reduce emissions and
address both climate change and public health effects throughout the
country. While any manufacturing process includes some carbon impacts,
EVs are cleaner than gasoline-powered cars, and will only get cleaner
as we decarbonize the grid.\1\ When we evaluate the entire process of
manufacturing an EV and sourcing the electricity, EVs generate up to
67% fewer emissions over their lifetime than their gas-powered
counterparts.\2\
---------------------------------------------------------------------------
\1\ bloomberg.com/news/articles/2019-01-15/electric-cars-seen-
getting-cleaner-even-where-grids-rely-on-coal
\2\ woodmac.com/press-releases/evs-up-to-67-less-emissions-
intensive-than-ice-cars/
---------------------------------------------------------------------------
EVs are not just good for reducing emissions--consumers also
benefit from direct fuel and maintenance savings. EV owners can save
over $700 a year in fuel and $330 in annual maintenance costs.
Meanwhile, the retail price of EVs continues to decline as
manufacturing scales up. And we are set to manufacture vehicles with
400-500 miles of range and battery packs costing as little as $60/-per-
kwh, two developments that will allow EVs to outperform internal
combustion engine vehicles on both range and price. Consumers can now
drive zero-emission vehicles without sacrificing on cost or features
they have become accustomed to, and federal, state, and local
incentives have the ability to drive greater consumer benefits and EV
adoption.
For these and other reasons, we must grow and expand consumer
incentives for light-, medium- and heavy-duty vehicles, invest in an
extensive charging infrastructure network, and send a market signal
that electrification is the future by setting strong fuel economy
standards. The choices we make now will determine our course for
decades to come. We can either embrace the economic and domestic
manufacturing opportunities we now face, or risk relying on foreign
imports for years to come.
For this reason, the Zero Emission Transportation Association is
urging policymakers to act now and invest wisely to help the United
States realize the economic potential of an electrified domestic
transportation sector. We look forward to working with you as you
continue to tackle these difficult decisions and support local
economies across the United States.
Sincerely,
Joe Britton,
Executive Director, Zero Emission Transportation Association.
Amazon and Global Optimism Co-founded The Climate Pledge, Submitted for
the Record by Hon. Peter A. DeFazio
[Editor's note: The following PDF has been modified from its original
version. It has been formatted to fit this publication.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Statement of Nicholas Guida, Chairman and Chief Executive Officer,
Tamarack Aerospace Group Corporation, Submitted for the Record by Hon.
Sam Graves of Missouri
Chairman DeFazio, Ranking Member Graves and Members of the
Committee, thank you for accepting my testimony to the committee on
``The Business Case for Climate Solutions.'' I am Nick Guida and I'm
the founder and CEO of Tamarack Aerospace Group Corporation.
Climate change is of course one of the most significant challenges
currently facing human civilization. Despite aviation being a
relatively small contributor of overall global carbon dioxide emissions
at 2-3%, aviation's statistical position is often cited in the media
and that trend will no doubt continue as aviation continues to grow.
(Graver, Zhang, & Rutherford, 2019). As a result, the environmental
impact of flying is consistently breaking into the consciousness of
passengers and the public alike, influencing their perception of
aviation.
Aviation must leverage all legacy and especially new technologies
to constantly strengthen a perception that the industry proactively
supports sustainability and science that will mitigate the negative
outcomes of climate change.
America and the world need to aggressively use all available
current technologies to reduce the metastasizing carbon footprint and
not ignore any pending technologies--including pending solutions like
bio-fuels, electric and hydrogen propulsion--as they become commonly
available over time. America needs to open its eyes to all current
possibilities, especially those that are not widely known but can be
so-called game-changers, game-changers that also make good business
sense.
One such new, and game-changing technology available right now and
gaining notice by the aviation industry and regulators, is Active
WingletsTM, developed by Tamarack Aerospace Group. Tamarack
is based in Sandpoint, Idaho--we are a growing American company built
on invention.
Active Winglets look very much like the curved-upward passive
winglets you see on the ends of many commercial aircraft wings, except
Active Winglets have an extension and an autonomous sensing system that
in a fraction of a second mechanically adjusts the wing tips to any
amount of turbulence and, in so doing, allows for the most efficient,
fuel-saving and flight smoothing capabilities available today.
Patented Active Winglet innovation delivers a CO2 and fuel burn
reduction of up to 33% as compared to an approximate 4% fuel savings
from different types of traditional winglets seen on many current
commercial, business and military aircraft. Active Winglets increase
the number of fuel efficient and safer non-stop flights, and reduce the
amount of maintenance needed for all aircraft. Active Winglet
technology stands out in many ways amongst other sustainability
initiatives as a sustainability supporting immediate solution for
reducing aviation's carbon footprint to meet industry goals (Forbes
Magazine, Tamarack Aerospace Group, 2020 and former aeronautical
professor and commercial pilot, NASA astronaut Byron Lichtenberg, 2021,
to cite just a few of the multiple sources).
There are several steps that aircraft operators can put in place to
significantly reduce emissions. The science and market demands are
dictating that we need to act now. Technology such as Sustainable
Aviation Fuels are absolutely viable solutions but face significant
scalability obstacles, carbon sequestration and offsetting would be
required on a vast scale to have a significant impact and the
introduction of newer, more fuel-efficient aircraft which emit less
CO2, will not be sufficient on its own to offset the growth in the
number of air transport movements.
Active Winglets are a proven technology that has been installed on
more than one-hundred-and-twenty Cessna Jets, has been certified by the
Federal Aviation Administration (FAA) and European Union Aviation
Safety Agency (EASA), and can be retrofitted onto several current
aircraft variants, including larger single-aisle commercial, cargo and
military aircraft . . . even drones. Active Winglets are cost-effective
and can be rapidly retrofitted to the existing fleet as well as future
designs to improve safety, mitigate turbulence, reduce noise and other
pollution associated with aviation and reduce the downtime and need for
aircraft maintenance.
The Active Winglet technology is economically viable, paying the
investment for the modification back to the aircraft operator in a
short period and can have a significant benefit for the existing as
well as future fleets of aircraft. Of course, if business and
government can't make an economic argument for adopting specific
actions, those actions will naturally fail. Conservative estimates on
narrow bodied and specific military aircraft, demonstrate that
Tamarack's Active Winglets can reduce fuel burn by 14-20%, while there
is proven fuel savings for many business airframes of up to 33%,
providing significant cost savings and having a meaningful impact now
on aviation's carbon crisis.
A case study conducted by Tamarack estimates, for instance, that if
Active Winglets were to be fitted onto the commercial jet narrow-bodied
fleet (Airbus A320 / Boeing 737 variants) alone, 1.6 billion tons of
CO2 would be saved by 2040, reducing the emissions gap by approximately
20%. Tamarack's technology offers a greater reduction in fuel burn and
carbon emissions for existing aircraft than any other retrofittable
solution available at present and certainly will make a demonstrable
fuel savings and carbon footprint reduction as part of a new aircraft
build.
More context about winglet technology. Winglets are small aerofoils
applied vertically to the wing tips and are a positive addition to
aircraft as they reduce drag and increase efficiency. They work by
reducing the aerodynamic drag associated with vortices. Vortices form
due to the pressure differentiation between the low-pressure upper wing
surface and the high-pressure lower wing surface. At the wing tip, air
is free to move from the regions of high pressure to the regions of low
pressure forming a circular movement of air which trails from the wing
tip (Anderson, 2017). The creation of vortices causes a redistribution
of the surface pressure over the wing termed induced drag (Anderson,
Introduction to Flight, 2016). The advantages of Active Winglets are
significant and address the vortices and fuel usage challenges more
than other winglet technologies; they are retrofittable and therefore
can improve today's aircraft, as well as those coming off the
production line; they are largely cost effective to implement; and are
a `win, win' as they pay back economically and environmentally.
The Active Winglet uses the combination of a wing extension to
significantly increase aspect ratio with the most optimal winglet to
reduce induced drag. Traditionally, the most optimal winglet design is
associated with more structural reinforcement, but the Active Winglet
doesn't need the structural reinforcement that common passive winglets
do.
Active Winglets reap maximum fuel efficiency benefits without
subtracting the inefficiencies that occur due to additional structural
requirements. This is achieved using load alleviation at the wing tip.
Additionally, Active Winglet modified aircraft need shorter runways
for landing and takeoff and get higher faster than aircraft without the
modification. For instance, it can take a Cessna Jet with Active
Winglets to reach 41,000 feet in less than 30 minutes, while a similar
unmodified business jet will have to reach higher altitudes after
climbing in steps and may never reach 41,000 feet at all, depending on
flight conditions and the time of the trip (AOPA reporting Active
Winglet flight, 2021). As mentioned, once an aircraft gets to higher
altitudes faster, the carbon footprint is greatly reduced.
Tamarack commends the committee on its backing of current U.S.
government programs to encourage innovation in aviation and we hope
that kind of assistance increases. This committee, for instance, is
well aware of government grants for emissions innovative companies. For
example, the Federal Aviation Administration (FAA) Continuous Lower
Energy, Emissions and Noise (CLEEN) program has already contributed
$225 million through phases I and II of CLEEN, and the industry has
contributed $388 million. The 2020 grants under CLEEN III are to be
issued soon (FAA, 2020). Tamarack will be applying for the next tranche
of grants in order to go through the certification process for
additional airframes. Meanwhile, we hope the committee will continue to
encourage all technologies and efforts to embrace business cases for
climate solutions.
Part of the reason that aviation is gaining so much attention
relative to reducing the carbon footprint is an immediate need, like so
many other industries, to reduce its dependence on fossil fuels in the
face of expected continued rapid growth (UNFCCC, 2014). Active Winglets
and other technologies available now or soon warrant additional focus
by regulators and the entire aviation community.
The coronavirus pandemic has shrunk the world fleet because of
airlines going out of business and older, less efficient aircraft being
retired early. From 2020 onwards, this will unquestionably deliver
reduced CO2 emissions lower than previously projected. However, this is
not the solution to aviation's carbon emission challenges. Although
passenger numbers dropped by 2690 million (60%) in 2020 compared to
2019, passenger numbers are predicted to recover to 2019 levels within
the next 3-5 years (ICAO, 2021). Furthermore, in 2020 compared to 2019,
approximately USD $370 billion of gross passenger operating revenues of
airlines were lost (ICAO, 2021). This unprecedented event could present
a major opportunity for operators to reset their thinking on emissions
targets and implement sustainable practices in every aspect of their
new, reshaped organizations.
Aircraft are reliant on fossil fuels and with no clear path or
timeframe to a zero-emission alternative, ICAO predicts a large gap in
the emissions targets set for the period of 2020 to 2040. There are
several steps that aircraft operators can put in place to significantly
reduce emissions. The science and market demands are dictating that we
need to act now. Technology such as Sustainable Aviation Fuels are
absolutely viable solutions but face significant scalability obstacles,
carbon sequestration and offsetting would be required on a vast scale
to have a significant impact and the introduction of newer, more fuel-
efficient aircraft which emit less CO2, will not be sufficient on its
own to offset the growth in the number of air transport movements.
Active Winglet technology is economically viable, paying the
investment back in a short period and can have a significant benefit
for the existing as well as future fleets of aircraft. Of course, if
business and government can't make an economic argument for adopting
specific actions, those actions will naturally fail. Conservative
estimates on narrow bodied aircraft, demonstrate that Tamarack's Active
Winglets can reduce fuel burn by 14-20%, providing significant cost
savings and having a meaningful impact on aviation's carbon crisis.
As availability of Sustainable Aviation Fuels increases and
technology advances, the aviation sector will see substantial
reductions in carbon emissions until zero emissions aircraft can be
developed. However, where a near-term solution is needed, fitting
Active Winglets would be a significant step forward for operators
looking to obtain carbon neutral operations, particularly when combined
with a host of other sustainable initiatives. Tamarack hopes this
committee considers all emission reducing options including Active
Winglet technology that stands out as an exciting prospect which can
reduce the emissions gap by over 1.6 billion tons (-20%), it is
available now and is scalable.
As mentioned, Tamarack is growing. We have additional primary
service and installation centers in South Carolina and England and
other support facilities in more than twenty other locations across the
United States and world-wide. We have been growing our facilities,
staff, and customer base, despite the pandemic because our current and
prospective customers want the innovative capabilities only Tamarack
Active Winglets can provide to business, commercial and military
aviation.
Tamarack is currently working with U.S. and international aviation
regulators, along with aviation associations like NBAA and GAMA, noted
academia representatives and getting constant feedback from existing
and future customers, including the U.S. military. We are confident
that U.S. innovation tempered by prudent government regulation will
meet or possibly exceed carbon footprint reduction goals specifically
outlined for the aviation industry. Those ambitious goals will only be
achieved through cooperation and teamwork involving all stakeholders
and by climbing the very steep education curve that recognizes and
adopts the most pragmatic innovations addressing our climate crisis.
Tamarack thinks of itself as a good corporate citizen for America
and also the world and believes news about its sustainability-
supporting technology, and other avenues for aviation to reduce carbon
emissions, will be recognized by this committee as a current way to
quickly provide a solution to help the growing aviation industry reach
its carbon footprint reducing goals.
Tamarack looks forward to providing details and science-based
information alluded to in these comments and will eagerly cooperate
with this committee to embrace solutions that bolster the reputation of
aviation as we achieve the climate-saving goals we all want.
Letter of March 29, 2021, from Frederick W. Smith, Chairman of the
Board and Chief Executive Officer, FedEx Corporation, Submitted for the
Record by Hon. Steve Cohen
FedEx Corporation,
942 South Shady Grove Road,
Memphis, TN 38120, March 29, 2021.
Hon. Steve Cohen,
U.S. House of Representatives,
2104 Rayburn HOB, Washington, DC.
Dear Congressman Cohen,
Thank you for the kind introduction and the opportunity to testify
on March 17, 2021 at the House Transportation and Infrastructure
Committee hearing on ``The Business Case for Climate Solutions''. I
wanted to follow up regarding your question about the safety of the
twin 33, trailer configuration.
At FedEx, ``Safety Above All'' is the centerpiece of our corporate
strategy and our corporate philosophy, and public safety is the real
story when it comes to the adoption of twin 33, trailers. Studies have
shown twin 33, trailers are more dynamically stable at highway speeds
and are more stable during abrupt evasive maneuvers and less likely to
roll over than twin 28, trailers. FedEx Ground has been operating twin
33, trailers on the Florida Turnpike since 2010 with no accidents and
our drivers have told us repeatedly they find them more stable to
operate.
Additionally, the adoption of twin 33, trailers would take trucks
off the road by reducing trips and miles driven through efficiency
gains, resulting in 4,500 accidents avoided annually. The proposal we
support also calls for twin 33s to operate with a suite of modern
safety enhancing technologies: collision avoidance with automatic
braking, electronic stability control, lane departure, speed limiters
and other advanced safety features.
Longer combination vehicles (LCVs) already safely operate in 22
states, 20 of which allow operation of twin 33, trailers. These LCVs
include even longer trailer combinations like the ``Turnpike Double''
configuration of twin 48, trailers, triple 28, trailers and the ``Rocky
Mountain Double'' configuration of a 48, trailer and 28, trailer.
There are also significant efficiency and environmental benefits
from removing trucks from the road. The adoption of twin 33, trailers
equates to 274 million fewer gallons of fuel, 3.12 million fewer tons
of CO2 emissions and 3.36 billion fewer vehicle miles traveled with
transportation efficiencies. Furthermore, studies have shown that twin
33, trailers can move the same amount of freight with 18 percent fewer
truck trips, reducing congestion by 57.2 million hours, decreasing wear
and tear on roads and bridges, and allowing consumers and businesses to
realize $2.8 billion annually in lower shipping costs with quicker
delivery times. These safety, environmental and efficiency benefits
come at no cost to taxpayers and without any change to the 80,000-pound
federal gross vehicle weight (GVW) limit or the federal bridge formula.
In 2016, the Department of Transportation projected that freight
volumes would increase by 40% by 2045. The trucking industry has been a
vital lifeline to the U.S. economy during the COVID-19 pandemic by
supporting the rapid increase of ecommerce and movement of essential
goods across the country. The adoption of twin 33, trailers would
provide much needed capacity while benefiting our nation's consumers,
businesses, environment and overall safety.
I urge you and your colleagues to consider modernizing trucking
regulations to include these trailers that have proven to be safe and
efficient by corporate leaders in transportation and logistics.
Thank you for your consideration of this important issue.
Sincerely,
Frederick W. Smith,
Chairman of the Board and Chief Executive Officer.
Letter of March 22, 2021, from William Peduto, Mayor, City of
Pittsburgh, PA, Submitted for the Record by Hon. Conor Lamb
March 22, 2021.
Hon. Peter DeFazio,
Chair,
Transportation and Infrastructure Committee, United States House of
Representatives, 2134 Rayburn Office Building, Washington, DC.
Hon. Sam Graves,
Ranking Member,
Transportation and Infrastructure Committee, United States House of
Representatives, 1135 Longworth House Office Building,
Washington, DC.
Dear Chairman DeFazio and Ranking Member Graves,
I am writing in full support of the Freight Rail Innovation
Institute, a proposed public-private partnership led by Wabtec
Corporation, Genesee and Wyoming, Inc., and Carnegie Mellon University.
Collaborations across levels of government and economic sectors have
helped Pittsburgh shed its industrial past and become a 21st century
hub for sustainability and green energy. The Institute would represent
yet another Pittsburgh-based initiative designed to harness the power
of innovation, research, and technology, combat climate change, create
family-sustaining jobs, and build a clean-energy future for our nation.
Over 140,000 miles of railway play an integral role in moving
people and products across the continental United States, and
currently, trains transport 40% of our nation's freight. The proposed
Freight Rail Innovation Institute presents a prime opportunity to
invest in a cleaner future for freight rail that will benefit the
entire country. The Institute will research and develop the
groundbreaking technology needed to move toward carbon-free rail. By
investing in this vision for the future of freight transportation, we
can reduce our nation's Greenhouse Gas emissions, improve safety and
limit congestion on our highways, and create the jobs of the future. By
empowering Wabtec, Genesee and Wyoming, and Carnegie Mellon University
to advance this technology, we can develop trains that can more
efficiently and safely move goods across the country without polluting
our air and our planet.
As you are developing the plan to rebuild our nation's
infrastructure, I respectfully urge you to consider investing in the
Freight Rail Innovation Institute. Thank you in advance for your
consideration. Should you need additional information, please do not
hesitate to contact me.
Sincerely,
William Peduto,
Mayor of Pittsburgh.
Letter of March 22, 2021, from Sam Williamson, Board Chair and Greg
Flisram, Executive Director, Urban Redevelopment Authority of
Pittsburgh, Submitted for the Record by Hon. Conor Lamb
March 22, 2021.
Hon. Peter DeFazio,
Chair,
Transportation and Infrastructure Committee, U.S. House of
Representatives, 2134 Rayburn Office Building, Washington, DC.
Hon. Sam Graves,
Ranking Member,
Transportation and Infrastructure Committee, U.S. House of
Representatives, 1135 Longworth House Office Building,
Washington, DC.
RE: Letter of Support--Freight Rail Innovation Institute
Dear Chair DeFazio and Congressman Graves:
We are writing in support of the public-private partnership being
proposed by Wabtec Corporation, Genesee & Wyoming, and Carnegie Mellon
University to create a Freight Rail Innovation Institute. This
initiative will assist in the Congressional goals of building a clean
energy economy and creating jobs as well as reducing the effects of
climate change. Its location in the Pittsburgh region would allow for
all parties involved to take advantage of the education and innovative
research occurring here.
Pittsburgh is a city that welcomes, embraces, and invests in green
energy and sustainability. As the North American representative to the
Global Covenant of Mayors for Climate and Energy, Pittsburgh's Mayor
William Peduto has been a leading international voice on the power of
local government to fight climate change. Our city serves as an example
of best practices on dealing with the effects of climate change and the
impact mayors are having on protecting the environment for future
generations and was recently honored with first place in the U.S.
Conference of Mayors (USCM) 14th Annual Climate Protection Awards. The
Urban Redevelopment Authority of Pittsburgh (URA) is proud to partner
with the Mayor and City of Pittsburgh on these critical sustainability
efforts.
We recognize that the shift from the reliance on fossil fuels to
sustainable energy requires investment and commitment, and that is
clearly evident in the proposed Freight Rail Innovation Institute.
Efforts to expand the use of freight rail, accelerate the reduction of
national GHG emissions, reduce road congestion, and make transportation
safer is a benefit for all of our communities.
This region has a long relationship with rail and has continued to
invest in its development and expansion. With over 140,000 miles of
track across the U.S. freight network, investment in the future of rail
benefits the entire country. A single freight train can move a ton of
freight 472 miles on one gallon of fuel. Rail moves 40% of freight and
accounts for less than 1% of total U.S. GHG emissions. Imagine the
possibilities of zero emission locomotives. With investment in the
partnership, technology research moves forward more quickly with a
vision and there are dedicated efforts to focus on best practices as it
relates to green energy and advanced network logistics. Support of this
effort takes this vision to a reality, benefiting all.
For these reasons, we hope that you favorably consider and support
the Freight Rail Innovation Institute, an important endeavor for the
Pittsburgh region.
Sincerely,
Sam Williamson,
Board Chair, Urban Redevelopment Authority of Pittsburgh.
Greg Flisram,
Executive Director, Urban Redevelopment Authority of Pittsburgh.
Appendix
----------
Questions from Hon. Peter A. DeFazio to Jack Allen, Chief Executive
Officer and Chairman, Proterra, Inc.
Question 1. Mr. Allen, you mentioned the difficulty of sourcing
domestic minerals for electric batteries. Cobalt in particular is
difficult to find domestically, even if we expand domestic mining.
Are there any promising developments in domestic battery cell
manufacturing capacity?
Answer. Progress is being made but the U.S. is currently behind
other markets in building capacity. This Committee and the Federal
government can play an important role in accelerating US leadership in
alternative fuel technologies for zero emission vehicles that are
critical to our economic future as the world addresses global warming
and the need to cut carbon emissions.
Today, we lag other technology centers in developing domestic
capacity for battery production. For example, today, there are no
domestic manufacturers of small format cylindrical cells that are
available to Proterra for use in battery packs for transit buses or
other medium or heavy duty commercial vehicles.
According to a recent Wall Street Journal report, ``China today has
93 `gigafactories' that manufacture lithium-ion battery cells . . . If
current trends continue, China is projected to have 140 gigafactories,
by 2030, while Europe will have 17 and the United States, just 10.''
\1\
---------------------------------------------------------------------------
\1\ https://www.washingtonpost.com/technology/2021/02/11/us-
battery-production-china-europe/
---------------------------------------------------------------------------
China and Europe also lead the United States as the largest
electric car markets internationally, according to the International
Energy Association.\2\ ``China (at 4.9%) and Europe (at 3.5%) achieved
new records in electric vehicle market share in 2019.'' The United
States trails at 2.1% market share for electric vehicles in 2019.\3\
---------------------------------------------------------------------------
\2\ https://www.iea.org/news/electric-car-sales-this-year-resist-
covid-19-s-blow-to-global-car-market
\3\ https://www.iea.org/reports/global-ev-outlook-2020
---------------------------------------------------------------------------
Increasing demand domestically for zero emission technology will
spur growth of the supply chain and attract private investment in
domestic cell production to meet the market demand for electric
vehicles. Investments in US technology and manufacturing leadership
will serve our domestic needs and allow the US to become a world leader
in this important shift away from fossil fuel dependency in
transportation.
Legislation like H.R. 2 (Moving Forward Act) as well as President
Biden's American Jobs Plan contain meaningful investments to accelerate
growth in medium and heavy-duty electric vehicles, including battery
electric transit buses, school buses and delivery vehicles.
Question 2. What steps has Proterra taken to recycle batteries that
are past their useful life for transit buses, and how can this
committee help to support this work?
Answer. Proterra has designed its battery systems with the full
life cycle in mind. Our batteries are designed for easy extraction of
rare minerals and for recycling and reuse of key components, including
our heavy duty aluminum pack enclosures. Importantly, once a battery
pack has reached its end of life, the minerals can be extracted and
reused, reducing the need to mine for new sources.\4\
---------------------------------------------------------------------------
\4\ https://www.nrel.gov/news/program/2021/pathways-to-achieve-new-
circular-vision-for-lithium
-ion-batteries.html
---------------------------------------------------------------------------
The United States has an opportunity to build industry and good
paying jobs from building batteries to recycling components. Proterra
has partnered with Redwood Materials in Carson City, Nevada to recycle
batteries at the end of their useful life. Proterra has already sent
roughly 26,000 pounds of battery material to Redwood for recycling.
In addition, Proterra batteries are designed with second-life
applications in mind. When Proterra batteries have met their useful
life in a vehicle, they still retain a significant amount of energy
that can be used in applications such as stationary storage, to reduce
electricity demand charges, and to charge electric vehicles with
renewable solar energy stored throughout the day. Our charging systems
are also capable of sending stored energy from the vehicles back to the
power grid, becoming a strategic asset for grid stability and
resilience.\5\ Other second life battery applications could include
backup power, grid services such as frequency regulation, and utility
scale storage.
---------------------------------------------------------------------------
\5\ https://www.proterra.com/press-release/city-of-beverly-selects-
electric-school-bus-powered-
by-proterra/
Question 3. What other steps can this committee and the Federal
government take to help anchor the battery supply chain domestically?
Answer. There are many steps that Congress and the Federal
government can take to help anchor the battery supply chain
domestically. The Department of Energy's Advanced Technology Vehicle
Manufacturing (ATVM) program can be revived in support of its goals of
strengthening US vehicle manufacturing and promoting US energy
independence and competitiveness by: 1) expanding eligibility to US-
based medium- and heavy-duty vehicles manufacturers and component
suppliers, specifically including battery cells manufacturers; and 2)
revising the financial viability requirements for loan applicants to
more closely align with the Department of Energy's Title XVII loan
guarantee program. Congress could also consider making appropriations
for the grant program that was authorized in the ATVM program but have
not been funded. Proterra supports the Advanced Technology Vehicle
Manufacturing (ATVM) Future Act introduced by Congresswomen Julia
Brownley and Congresswoman Debbie Dingell as well as reforms to the
program made by section 33342 of last year's HR 2, Moving Forward Act.
Restoring the Section 48C tax credit or launching a new investment
tax credit (ITC) would also support the development of the battery
supply chain in the United States. Proterra supports the ``American
Jobs in Energy Manufacturing Act of 2021,'' which was introduced by
Senators Debbie Stabenow and Joe Manchin, to reauthorize Section 48C
and explicitly allow the 30% ITC to be used for EV battery
manufacturing, assembly lines, and facility buildout and retooling.
The battery electric transit bus market also benefits from broader
Federal incentives for the electrification of other medium and heavy
duty vehicle types, including school buses and delivery vehicles for
the United State Postal Service and the federal fleet, such as the
Environmental Protection Agency's (EPA) Diesel Emissions Reduction Act
(DERA) program.
Questions from Hon. Julia Brownley to Jack Allen, Chief Executive
Officer and Chairman, Proterra, Inc.
Question 4. You mentioned in your testimony that in addition to
Proterra's electric transit buses, you also provide the battery systems
for electric school buses.
Can you please elaborate on the technology readiness, are electric
school buses able to handle the workload that is currently delivered by
diesel school buses?
Answer. An electric school bus is more than capable of handling the
workload of a diesel school bus. According to a 2014 study by the
National Renewable Energy Laboratory (NREL), the average school bus
travels approximately 31 miles per cycle, with a maximum of 127
miles.\6\
---------------------------------------------------------------------------
\6\ https://www.nrel.gov/docs/fy14osti/60068.pdf
---------------------------------------------------------------------------
In 2018, Thomas Built Buses (TTB) and Proterra unveiled the high-
performance Jouley electric school bus. The Saf-T-Liner C2 Jouley
couples 226 kWh of total energy capacity from Proterra's battery
technology with an electric drivetrain to offer up to 135 miles of
drive range to meet the needs of school bus fleets.\7\
---------------------------------------------------------------------------
\7\ https://thomasbuiltbuses.com/powertrains/
electric?gclid=Cj0KCQjwvr6EBhDOARIsAPpq
UPES35MxMphGMdxI383oAckhRf8PUQHaj_hKDj6D3C4aLU5eZX4rQrYaAiDaEALw_
,%20pwcB
---------------------------------------------------------------------------
As of May 5, 2021, we, along with our partner Thomas Built Buses,
have delivered 50 electric school buses that are in operation today to
meet the school transportation needs of communities across the United
States.
In Virginia, TBB and Sonny Merryman Inc. were selected as
the exclusive provider of 50 electric school buses to 15 public school
districts for the first phase of Dominion Energy's electric school bus
program. The first of these buses, which represent the first battery-
electric buses in Virginia, were delivered in November of 2020.\8\
---------------------------------------------------------------------------
\8\ https://www.proterra.com/press-release/virginias-electric-
school-buses/
---------------------------------------------------------------------------
In Michigan, Ann Arbor and Roseville Public Schools are
operating six Jouley school buses in partnership with DTE Energy. DTE
Energy will also initiate a Vehicle to Grid (V2G) study to obtain data
regarding the energy efficiency and environmental benefits of electric
vehicles and develop programs that benefit the schools based vehicle
capabilities.\9\
---------------------------------------------------------------------------
\9\ https://www.michigan.gov/mienvironment/0,9349,7-385-90161-
551135--,00.html
---------------------------------------------------------------------------
In Massachusetts, the City of Beverly and Beverly Public
Schools recently unveiled its first Jouley school bus in partnership
with Highland Electric Transportation, a solutions provider for
electric school buses based in Hamilton, Mass. The bus will further
participate in a V2G strategy deployed by Highland Electric
Transportation and utility provider, National Grid.\10\
---------------------------------------------------------------------------
\10\ https://www.prnewswire.com/news-releases/city-of-beverly-and-
highland-electric-
transportation-select-electric-school-bus-from-thomas-built-buses-
powered-by-proterra-ev-
technology-301014159.html
---------------------------------------------------------------------------
In Alaska, Tok Transportation is operating the first
battery-electric school bus in the state, a Jouley school bus, in
partnership with the Alaskan Energy Authority.\11\
---------------------------------------------------------------------------
\11\ https://www.alaskasnewssource.com/2020/10/08/alaskas-first-
electric-school-bus-heading-
to-tok/
---------------------------------------------------------------------------
In Indiana, Monroe County Community Schools and Delphi
Community Schools both recently received their first Thomas Built
electric school buses.
Question 5. What are the total lifecycle cost benefits to cities
and school districts of switching to electric school buses?
Answer. Over 90 percent of the school bus fleet in the United
States is fueled by diesel.\12\ Burning diesel for fuel is associated
with emissions known to harm human health such as particulate matter
and nitrogen oxide.\13\ Children may be particularly vulnerable to
emissions exposure from diesel-fueled school buses.\14\
---------------------------------------------------------------------------
\12\ https://uspirg.org/sites/pirg/files/reports/
US_EL%20buses%202021%20scrn.pdf
\13\ https://www.lung.org/clean-air/outdoors/what-makes-air-
unhealthy/transportation
\14\ https://www.ehhi.org/reports/diesel/dieselintro.pdf
---------------------------------------------------------------------------
In addition to the clear environmental and health benefits of
switching to zero-emission, electric school buses, electric school
buses contain fewer parts than diesel buses, which can generate
operational and maintenance savings for school districts.\15\ The
Thomas Built Buses Saf-T-Liner C2 Jouley school bus, for instance,
enables fuel economies of up to 24.6 MPGe, an improvement over the
average 6.2 MPG fuel economy for school buses.\16\ \17\
---------------------------------------------------------------------------
\15\ https://thomasbuiltbuses.com/bus-advisor/articles/top-6-
benefits-of-electric-school-buses/
\16\ https://afdc.energy.gov/data/10310
\17\ https://thomasbuiltbuses.com/content/uploads/2020/08/brochure-
C2-Jouley-and-Proterra-
summer-2020.pdf
---------------------------------------------------------------------------
While electric school buses today cost more upfront than a diesel
school bus, some studies have shown that the operational and
maintenance savings afforded by switching to electric can save schools
nearly $2,000 annually in fuel costs and $4,400 in maintenance costs.
Further, electric school buses can save more than $31,000 in
operational costs over its vehicle lifetime.\18\
---------------------------------------------------------------------------
\18\ https://www.clintonfoundation.org/clinton-global-initiative/
commitments/launching-
market-electric-school-buses
---------------------------------------------------------------------------
In addition, new financing models are reducing the upfront cost to
school districts of acquiring electric school buses.\19\
---------------------------------------------------------------------------
\19\ https://www.greentechmedia.com/articles/read/on-heels-of-253m-
raise-highland-electric-
lands-biggest-electric-school-bus-contract-in-the-u.s
---------------------------------------------------------------------------
Potential vehicle-to-grid applications provide opportunities to
lower cost barriers to school districts while increasing savings over
time by leveraging the electric school bus as a grid resource.
Question 6. What other opportunities do electric school buses
provide to schools, such as V2G and emergency power backup?
Answer. Electric school buses can strengthen the electricity grid
and provide resilience to local communities. Cities and utilities are
exploring different ways to unlock the full potential of electric buses
and heavy-duty vehicles.
According to WRI, `` . . . electrifying the entire school bus fleet
can unlock 72 GW-hours of energy storage for utilities via vehicle-to-
grid technologies, enabling new opportunities to expand businesses and
integrate clean energy.'' \20\
---------------------------------------------------------------------------
\20\ https://www.wri.org/research/financing-electric-and-hybrid-
electric-buses
---------------------------------------------------------------------------
In 2018, Thomas Built Buses and Proterra unveiled the high-
performance Jouley electric school bus, which is capable of supplying
power back to the electric grid using vehicle-to-grid (``V2G'')
technology. Proterra's bi-directional bus/truck charging infrastructure
system means that customers can send stored power back to the
electricity grid at times when its needed most or even to provide back-
up power to critical facilities like schools.
Because school buses are on the road for only certain hours during
the day and otherwise idle, especially during the weekends and summer
months, battery-electric school buses present an optimal use case for
V2G applications.
In Virginia, Thomas Built Buses was selected as the provider of 50
electric school buses for the first phase of Dominion Energy's electric
school bus program. Under the program, participating school districts
will pay about the price of a traditional diesel bus while Dominion
Energy covers the difference.\21\ Virginia school districts could save
$700 per month or $8,400 per year in operating costs, according to
Dominion Energy.\22\ The initiative aims to add 1,000 electric school
buses by 2025 and replace all diesel buses with zero-emission, electric
school buses in the school districts serviced within Dominion's
territory by 2030. Adding 1,000 electric school buses would store
enough energy to power 10,000 homes.\23\
---------------------------------------------------------------------------
\21\ https://www.eesi.org/articles/view/electrifying-virginias-
school-bus-fleet
\22\ https://www.axios.com/electric-school-buses-vehicle-to-grid-
power-19f7b6b1-662b-4501-a96e-
dcf3fd57a886.html
\23\ https://www.eesi.org/articles/view/electrifying-virginias-
school-bus-fleet
---------------------------------------------------------------------------
In Massachusetts, Thomas Built Buses recently delivered the first
Proterra Powered all-electric school bus in New England, supported by
VW Settlement funding. Highland Electric Transportation and National
Grid, the local utility, are also working together to deploy a vehicle-
to-grid strategy with these electric school buses.
In Michigan, we recently deployed six Proterra Powered battery-
electric school buses to Ann Arbor and Roseville public schools for a
five-year pilot program that also includes a vehicle-to-grid study.
This includes the ability for the bus battery to provide energy to the
school during a power outage.\24\
---------------------------------------------------------------------------
\24\ https://www.michigan.gov/mienvironment/0,9349,7-385-90161-
551135--,00.html
---------------------------------------------------------------------------
Questions from Hon. Michael Guest to Jack Allen, Chief Executive
Officer and Chairman, Proterra, Inc.
Question 7. Research has shown that the demand for travel has grown
due to urban sprawl and low fuel costs that have allowed individuals to
work in urban centers but commute long distances to town. We have
discussed expanding transit systems and more efficient pedestrian
travel to account for that. But as we know, there are also rural
communities that require travel to get to school or work in their rural
communities. We have discussed a proposed Vehicle Miles Travelled (VMT)
Tax to promote more efficient collection of highway users in fees.
Rural citizens are going to be the most against this and
disproportionately affected in the short run.
Would you be able to discuss how a VMT may be beneficial to rural
Americans?
Answer. As a commercial electric vehicle and battery manufacturer,
Proterra does not have a position on approaches to user fees, such as a
VMT tax, for surface transportation funding. Proterra transit vehicles
are designed to serve rural and urban communities alike and our buses
are currently serving rural communities.
Question 8. Across much of rural America, there are closed roads
and bridges that are creating longer trips and commutes for families,
drivers, and delivery systems. The longer these trips are, especially
compounded by something like a heavy logging area that is running
trucks constantly in and out of that area, or daily parcel services, or
school buses, the more emissions occur.
How would long-term and robust investment in our roads and bridges
across rural America best address emissions in rural America?
Answer. Modernizing our transportation infrastructure is critical
to addressing emissions reduction in rural America. Ensuring the
nation's roads and bridges are in a state of good repair can reduce the
amount of time vehicles are spent idling or traversing poor
infrastructure, both of which can result in increased vehicle
emissions.\25\ Our battery electric transit buses are designed to serve
rural communities and our zero emission buses are serving rural
communities across the United States today.
---------------------------------------------------------------------------
\25\ https://deq.nc.gov/about/divisions/air-quality/motor-vehicles-
air-quality/idle-reduction/why-
idling-harmful
---------------------------------------------------------------------------
Questions from Hon. Scott Perry to Jack Allen, Chief Executive Officer
and Chairman, Proterra, Inc.
Question 9. I sincerely hope this hearing serves as a wakeup call
to the American people about the degree to which our Nation's political
and corporate elites are marching in lockstep behind President Biden's
Green New Deal--and promise to electrify the transportation sector
against the will of the American consumer.
If this cooperative effort is to succeed, it will cause great harm
to America's prosperity and security.
While it appears nearly everyone testifying before the Committee
today--and much of the broader corporate community--has accepted and
embraced the radical, whole-sale approach to rapidly electrify our
transportation sector, historical and recent consumption trends
indicate that your consumers--and our constituents--don't share this
warm embrace.
These concerns will grow to disdain as the costs of all consumer
goods continues to skyrocket.
The near universal acceptance that electrification is inevitable
must be met with the proper historical context--the electric vehicle is
NOT some emerging technology that will breakthrough if enough taxpayer
money is spent.
As a matter of fact, electric vehicles are as old as motorized
vehicles themselves.
In 1896--yes, eighteen-ninety-six--Thomas Edison wrote to Henry
Ford admitting the electric vehicle had been rendered obsolete by the
cheaper, superior alternative, the internal combustion engine:
``Electric cars must keep near to power stations. The storage
battery is too heavy . . . Your car is self-contained--carries
its own power plant--no fire, no boiler, no smoke and no steam.
You have the thing. Keep at it.''
125 years after this exchange, EVs are still plagued by largely the
same deficiencies relative to ICEs--a lack of range, higher costs, and
a lack of battery capacity per pound.
More recent concerns about battery life-span, the diminished range
of aging batteries, and the propensity for aging batteries to erupt in
flames add to consumer weariness.
Until these fundamental issues are resolved, American consumers
will not adopt electric vehicles voluntarily as demonstrated by EV's
anemic market share and the continual failure to meet projected sales
figures.
At the height of the Obama administration's taxpayer handouts for
EV companies, he predicted there would be 1 million EVs on the road by
2015--a figure that wasn't reached until the end of 2018.
Over the past decade, the EV industry received $43 billion in
federal subsidies and tax incentives to manufacturers and consumers--
plus state and local incentives--and electric vehicle sales made up
only 1.9 percent of US retail car sales in 2020.
Throwing helicopter money at charging infrastructure fails to
rectify these underlying issues and thus will not spur widespread
voluntary adoption by consumers.
Can anyone please explain to my constituents:
How this is a responsible use of their tax dollars; or
Question 10. What is so unique about the EV sector that fosters the
unfounded belief that central planning will work this time when every
previous attempt has failed?
Answer to questions 9 & 10. Proterra has been serving our customers
for over a decade with battery electric vehicles. Customers across the
nation are adopting battery electric vehicles because of the low total
cost of ownership in addition to the environmental benefits of cleaner
air and less noise pollution. Our transit bus and fleet charging
customers include transit agencies, airports, universities and
commercial establishments. Our electric powertrain customers include
school bus, coach bus, delivery truck and construction equipment
manufacturers. Recent polling also shows that Americans support the
transition to electric vehicles for the broader benefits of health of
Americans, air pollution, and reducing asthma \26\. Overall, the poll
found that 63% of Americans support U.S. automakers transitioning to
zero-emission vehicles.
---------------------------------------------------------------------------
\26\ https://www.edf.org/sites/default/files/u76/
210219_EDF_GMEV%20Memo_D3_EH.pdf
---------------------------------------------------------------------------
A 2019 poll of prospective car buyers, conducted by Consumer
Reports and the Union of Concerned Scientists found that 63 percent of
prospective car buyers in the US have some interest in electric
vehicles including 31% that would consider one for their next purchase,
27% that would consider one at some point down the road, and 5% that
say they are definitely planning on buying or leasing one for their
next vehicle \27\.
---------------------------------------------------------------------------
\27\ https://www.ucsusa.org/resources/surveying-consumers-electric-
vehicles
---------------------------------------------------------------------------
The industries that will support the clean economy globally should
be built in the United States and those jobs should be American
manufacturing and American technology jobs. The federal government has
provided important support and market signals to build the clean
technology industry here. Proterra delivered our first battery electric
transit bus to Foothill Transit in the San Gabriel Valley over ten
years ago. Foothill Transit was the first public transit agency in the
United States to operate a battery-electric transit bus in revenue
service. This initial deployment was supported by federal grant funding
from the Recovery Act in 2009.
Building on these early deployments, the federal government has
increased support for zero-emission, electric transportation through
programs like the Federal Transit Administration's Low or No Emission
Vehicle Program (``Low No''). It has been responsible for funding
electric buses that are being deployed nationwide in urban and rural
communities in over 40 states.
Since our initial deployment to Foothill Transit, Proterra has
grown into a leading manufacturer of electric transit buses in North
America. We've sold more than 1,000 electric buses with 600 that are on
the road today. Our battery technology has been proven over 18 million
miles of revenue service driven by our fleet of transit buses. This
success has resulted in over 600 direct good-paying American jobs
nationwide at Proterra, as well as jobs at component vendor companies
in over 40 other states.
The federal government's role in spurring demand for
electrification through programs like Low No has established a strong
foundation that companies like Proterra have been able to build upon.
Battery costs have also declined approximately 85% since 2010 \28\
and the value proposition that electric vehicles offer to private
enterprise has grown. With lower operating costs, including maintenance
and energy costs that are significantly lower than internal combustion
engine vehicles, electric vehicles now offer a compelling economic
proposition.
---------------------------------------------------------------------------
\28\ BloombergNEF ``Battery Pack Prices Fall As Market Ramps Up
With Market Average At $156/kWh In 2019'' (December 2019)
---------------------------------------------------------------------------
As a result, companies that operate some of the world's largest
vehicle fleets like FedEx, UPS, and Amazon are advancing aggressive
electrification targets.\29\
---------------------------------------------------------------------------
\29\ https://www.npr.org/2021/03/17/976152350/from-amazon-to-fedex-
the-delivery-truck-is-going-
electric
---------------------------------------------------------------------------
It is in this backdrop of technological innovation that our company
has transformed into a diversified provider of electric vehicle
technology.
Increasing federal support for electrification can help drive the
next wave of innovation and job creation that will position the United
States well against foreign competition in this emerging market.
Questions from Hon. Peter A. DeFazio to Shameek Konar, Chief Executive
Officer, Pilot Flying J, on behalf of the National Association of
Truckstop Operators
Question 1. Mr. Konar, during the hearing, you mentioned that Pilot
Flying J has deployed 58 charging stations, and the Federal government
has a critical role to play to help fill the gap and get to mass-
adoption of EV charging infrastructure in the retail fuel sector.
How much money have NATSO members invested in EV charging
infrastructure nationwide, and how many DC Fast charging stations are
located at NATSO members' facilities?
Answer. In February of 2020, NATSO launched the National Highway
Charging Collaborative with ChargePoint, the world's largest EV
charging network. The Collaborative aims to leverage $1 billion in
capital to deploy charging at more than 4,000 travel plazas and fuel
stops by 2030, enabling long distance electric travel along major
routes and providing access to charging in rural communities. The
Collaborative also advocates for public policies that are designed to
create a business case for off-highway fuel retailers to invest in EV
charging infrastructure.
The Collaborative announced in March 2021 that it has successfully
generated more than 150 DC fast charging stations. This is number is
underinclusive of chargers available at NATSO members' facilities
because it does not include: (1) members that have not informed NATSO
of the investments they have made in EV charging stations at their
facilities and (2) EV charging stations that are owned and operated by
regulated utilities or other third-parties (eg, Tesla). Although those
charging stations may be present now, they are not a long-term solution
and therefore are not included in this data.
Questions from Hon. Michael Guest to Shameek Konar, Chief Executive
Officer, Pilot Flying J, on behalf of the National Association of
Truckstop Operators
Question 2. The U.S. has been leading in emission reductions for
decades. Energy and climate solutions have been driven by the U.S.
These solutions have been adopted by our allies and we've outpaced the
Clean Power Plan by ten years. I am thankful for industry leaders who
have led this charge, including many of you who testified before us.
These same industry leaders use roads, bridges, rails, airports, and
ports that they support through various fees and taxes, which allow
these industries to compete in the market. These industries pay for the
very programs that some would like to pull to address goals we are well
on the way to meeting through the market.
Some are pushing expensive programs that would put small businesses
and rural America out of pace with major corporations and major urban
centers through costly mandates and disadvantaged retooling. Even if
grant programs and tax incentives are there, the quick implementation
turnarounds on many of these programs stifle growth for our smallest
businesses if they have to change their business models without proper
lead time.
Mississippi is home to over 5,000 small trucking companies, many
mom and pop operations or small agriculture operations hauling
livestock across the country.
How much of your business is servicing small trucking or delivery
service companies or owner-operators?
Answer. Approximately 27-30% of our volume comes from what we would
define as small fleets, though this number ebbs and flows throughout
the year.
Question 3. As we've discussed, larger corporations and
transportation system manufacturers are moving towards more efficient
systems. In my opinion, this allows larger companies to sell more
efficient used equipment to smaller operations or allow prices to be
more affordable for small businesses while also not setting burdensome
mandates or requirements for compliance by the federal government. We
know this works because Americans moved to using more fuel-efficient
cars when automakers worked to produce them. That's why our Highway
Trust Fund is depleted.
What do you see as the impact on small businesses in your
industries if mandated emission standards were put in place vs.
allowing the market to work through this process we just discussed?
Answer. The most expeditious, efficient and economical way to
achieve environmental advancements in transportation energy technology
is through market-oriented, consumer-focused policies that encourage
all businesses to offer more alternatives and our customers to purchase
those alternatives. Fuel retailers are in the business of providing
competitively priced fuel and services to our customers and have
demonstrated in recent years that we are prepared to invest in any
transportation fueling technology that our customers desire. With the
right alignment of policy incentives, fuel retailers are well equipped
to facilitate a faster, more widespread and cost-effective transition
to alternatives--including electricity--in the coming years.
Question 4. Research has shown that the demand for travel has grown
due to urban sprawl and low fuel costs that have allowed individuals to
work in urban centers but commute long distances to town. We have
discussed expanding transit systems and more efficient pedestrian
travel to account for that. But as we know, there are also rural
communities that require travel to get to school or work in their rural
communities. We have discussed a proposed Vehicle Miles Travelled (VMT)
Tax to promote more efficient collection of highway users in fees.
Rural citizens are going to be the most against this and
disproportionately affected in the short run.
Would you be able to discuss how a VMT may be beneficial to rural
Americans?
Answer. NATSO has adopted principles it believes lawmakers should
follow when considering ways to fund highway programs. Funding
mechanisms should be:
Simple--It should be efficient and inexpensive to collect
highway funds.
Difficult to Evade--It should be difficult for taxpayers
to evade paying the tax / fee for infrastructure investment.
User-Based--The primary stream of funding for
infrastructure projects should be user-based.
Energy Source-Neutral--All energy sources must be subject
to the same fee on a gallon / energy equivalent basis.
Transparent--Users must be able to understand the amount
they are being charged.
Dedicated to Infrastructure--Funds raised in the name of
improving surface transportation infrastructure should be dedicated to
surface transportation infrastructure for the benefit of the payer.
Reallocating such funds for other purposes should be prohibited.
Long-Term--The revenue generated by the funding solution
should not significantly diminish over time. As a means of guarding
against future shortfalls, the funding solution should contain
automatic adjustments to mitigate trends that decrease the revenue it
generates, such as fuel efficiency.
Question 5. Across much of rural America, there are closed roads
and bridges that are creating longer trips and commutes for families,
drivers, and delivery systems. The longer these trips are, especially
compounded by something like a heavy logging area that is running
trucks constantly in and out of that area, or daily parcel services, or
school buses, the more emissions occur.
How would long-term and robust investment in our roads and bridges
across rural America best address emissions in rural America?
Answer. NATSO has long supported robust investment in the nation's
roads and bridges for a variety of reasons, including the improvements
those investments would have on emissions.
Questions from Hon. Scott Perry to Shameek Konar, Chief Executive
Officer, Pilot Flying J, on behalf of the National Association of
Truckstop Operators
Question 6. I sincerely hope this hearing serves as a wakeup call
to the American people about the degree to which our Nation's political
and corporate elites are marching in lockstep behind President Biden's
Green New Deal--and promise to electrify the transportation sector
against the will of the American consumer.
If this cooperative effort is to succeed, it will cause great harm
to America's prosperity and security.
While it appears nearly everyone testifying before the Committee
today--and much of the broader corporate community--has accepted and
embraced the radical, whole-sale approach to rapidly electrify our
transportation sector, historical and recent consumption trends
indicate that your consumers--and our constituents--don't share this
warm embrace.
These concerns will grow to disdain as the costs of all consumer
goods continues to skyrocket.
The near universal acceptance that electrification is inevitable
must be met with the proper historical context--the electric vehicle is
NOT some emerging technology that will breakthrough if enough taxpayer
money is spent.
As a matter of fact, electric vehicles are as old as motorized
vehicles themselves.
In 1896--yes, eighteen-ninety-six--Thomas Edison wrote to Henry
Ford admitting the electric vehicle had been rendered obsolete by the
cheaper, superior alternative, the internal combustion engine:
``Electric cars must keep near to power stations. The storage
battery is too heavy . . . Your car is self-contained--carries
its own power plant--no fire, no boiler, no smoke and no steam.
You have the thing. Keep at it.''
125 years after this exchange, EVs are still plagued by largely the
same deficiencies relative to ICEs--a lack of range, higher costs, and
a lack of battery capacity per pound.
More recent concerns about battery life-span, the diminished range
of aging batteries, and the propensity for aging batteries to erupt in
flames add to consumer weariness.
Until these fundamental issues are resolved, American consumers
will not adopt electric vehicles voluntarily as demonstrated by EV's
anemic market share and the continual failure to meet projected sales
figures.
At the height of the Obama administration's taxpayer handouts for
EV companies, he predicted there would be 1 million EVs on the road by
2015--a figure that wasn't reached until the end of 2018.
Over the past decade, the EV industry received $43 billion in
federal subsidies and tax incentives to manufacturers and consumers--
plus state and local incentives--and electric vehicle sales made up
only 1.9 percent of US retail car sales in 2020.
Throwing helicopter money at charging infrastructure fails to
rectify these underlying issues and thus will not spur widespread
voluntary adoption by consumers.
Can anyone please explain to my constituents:
How this is a responsible use of their tax dollars; or
Question 7. What is so unique about the EV sector that fosters the
unfounded belief that central planning will work this time when every
previous attempt has failed?
Answer to questions 6 & 7. Until the number of EVs on the road
reaches a critical mass, there is an important role for federal policy
to ``bridge the gap'' and make private investments more viable while
providing long-term consumer benefits. This would be comparable to the
experience from the power generation sector, where numerous programs
including investment tax credits, portfolio standards, cap and trade
systems, and grants have fostered the development of renewable
generation--especially wind and solar--to get those technologies to a
point of scale and economic parity. The transportation sector needs to
follow a similar path to foster the disciplined, expeditious and
economic adoption of EVs, with the utility sector and retail fuel
sector focusing on their core competencies to deliver the solution to
consumers.
For maximum impact, grant programs or other federal investment
designed to encourage investment in EV charging infrastructure and
supply equipment should be dispersed in a manner that includes certain
guardrails to ensure a level playing field, including incentives to
incubate and foster development that will provide long-term consumer
benefits. Policy mechanisms worth considering include: (1) direct
investment and tax credits; (2) low carbon fuel programs; (3) reselling
electricity; and (4) uniform pricing.
Conversely, policies that at first blush appear to be quick and
easy solutions may have the unintended consequence of undermining
either utilities' incentives to restructure the power grid or
retailers' incentive to invest in EV charging infrastructure. Examples
of these counterproductive policies include: (1) forcing ratepayers to
underwrite utilities' investment in EV charging stations or to
subsidize the retail cost of electricity that charges electric
vehicles; (2) allowing EV charging infrastructure at interstate rest
areas; and (3) permitting utilities that own EV charging stations to
charge other EV station owners higher rates for power than the internal
transfer price they charge their own operations.
Questions from Hon. Peter A. DeFazio to Troy Rudd, Chief Executive
Officer, AECOM
Question 1. Mr. Rudd, one of the former Administration's proposed
changes to the environmental review process is intended limit the
consideration of cumulative effects, such as climate change, in the
environmental review process.
Given the cost of climate change to the government and the economy,
do you believe it is appropriate that a NEPA analysis consider the
impact of a proposed project on the climate?
Answer. The short answer is, yes. As we work collectively to
advance our national focus toward addressing climate change, we see an
opportunity to further this effort under the National Environmental
Policy Act (NEPA) process. NEPA can analyze, in a meaningful way, the
potential effects of Federal proposed actions on climate change
considerations.
AECOM, in accordance with CEQ's current guidance to address
greenhouse gases pursuant to EO 13990 (see: https://ceq.doe.gov/
guidance/ceq_guidance_nepa-ghg.html), has developed and is implementing
an innovative process to assess climate change in NEPA documents
addressing cumulative impacts through demonstration of the interplay of
climate change with other environmental resources. Specifically, we
couple: (1) a traditional evaluation of greenhouse gases as a component
of the Air Quality analysis (i.e., effects of the project on climate
change) with (2) a resource-specific climate change effects analysis
for each resource area evaluated in the EIS (i.e., effects of climate
change on the ROI, project, or program). The integration of climate
change considerations into resource-specific effects analyses provides
an opportunity to demonstrate the interplay of climate change
considerations both across and within the context of specific resources
analyzed, drawing on the expertise of all resource disciplines. With
renewed interest in the climate change ``crisis'' under the Biden
administration, we believe an efficient and streamlined process to
assess climate impacts transversally across resources/disciplines is
key to their meaningful inclusion in NEPA documents. We have found that
this approach does not slow the process down (as demonstrated in recent
Federal NEPA actions) but can actually speed up project implementation
and reduce delays due to holistic and comprehensive planning, thereby
maximizing return on investment (ROI).
Question 2. Mr. Rudd, your testimony noted that you helped
primarily rural Fresno County, CA assess how rural transit agencies can
benefit from vehicle electrification to improve resilience. Too often,
transit is thought of as an urban-only solution.
What role can rural transit play in providing climate solutions?
Answer. Often, exurban and rural communities depend on long-
distance bus services that rural transit operators provide for both
commuter access to the nearest employment centers. These same
communities may also rely on commuter rail, and even intercity
passenger rail for access to jobs, healthcare or higher education. Both
rail and bus options, in addition to providing mobility access,
contribute to climate and air-quality benefits by reducing long-
distance single-occupancy vehicle (SOV) trips and thereby reducing VMT.
In some cases, rural commuter service into urban centers can be
substantial, providing the benefits of those reduced (SOV) trips and
congestion improvements on the corridor served. While this type of
access may not be available everywhere, the potential for climate
friendly transportation service that also addresses cleaner air for
rural communities and access to education opportunities, healthcare,
and economic and employment centers is certainly worthwhile.
Climate change is having an impact in rural, suburban and urban
communities, and transportation is the single largest contributor of
carbon pollution. The steps we take to address the resiliency of our
infrastructure, but also to provide cleaner transportation options, are
appropriate in all communities.
Rural regions of the country will likely transition slower to zero
emissions vehicles, as density will be less and public charging
infrastructure will likely be reduced in low density areas, including
rural areas. By creating a focus on rural transit, efforts to electrify
bus fleets in these rural areas can accelerate availability of shared
public charging infrastructure, catalyze the modernization of grid
infrastructure to support future electric vehicles, and also provide
the benefits of zero emissions vehicles to regions that may be slower
to transition.
Questions from Hon. Michael Guest to Troy Rudd, Chief Executive
Officer, AECOM
Question 1. Research has shown that the demand for travel has grown
due to urban sprawl and low fuel costs that have allowed individuals to
work in urban centers but commute long distances to town. We have
discussed expanding transit systems and more efficient pedestrian
travel to account for that. But as we know, there are also rural
communities that require travel to get to school or work in their rural
communities. We have discussed a proposed Vehicle Miles Travelled (VMT)
Tax to promote more efficient collection of highway users in fees.
Rural citizens are going to be the most against this and
disproportionately affected in the short run.
Would you be able to discuss how a VMT may be beneficial to rural
Americans?
Answer. Vehicle Miles Traveled (VMT) proposals [or Mileage Based
User Fees (MBUFs) or Road User Charges (RUCs)] are being looked at as
options to address the projected decline in purchasing power of the
federal gas tax, which is currently the central use-oriented revenue
source for highway, bridge, and transit investments. Currently, the
more a person drives on the road, the more gas they use and federal and
state motor fuel taxes they pay. It may be imperfect, but it has served
as the best user-oriented revenue source we have had to date. However,
while the gas tax currently raises a very sizable stream of revenue,
many experts see its role in the long term as a declining revenue
source, especially as we move toward more fuel efficient and
electrified fleets. A VMT-oriented approach is currently seen as the
best alternative to the gas tax that would maintain the connection
between use of our surface transportation system and the revenues
needed to support the spending to repair and replace them.
While many believe that a direct user pay model is also the fairest
approach to charge those using the roads to help pay for them, there
are certainly concerns among those in rural communities about how the
approach will impact them. When considering the concerns of rural
communities, it is important to understand that VMT (MBUF/RUC)
approaches can be developed that recognize and adjust for rural equity
concerns.
The Road User Charge (RUC) is increasingly being viewed as
potentially the fairest method to charge for the use of infrastructure.
The RUC would replace the amount paid for gas taxes with a fee for road
use. While the current gas tax may be seen as disproportionately
impacting rural drivers as they drive more miles and often drive less
fuel-efficient vehicles, a RUC can be designed to be a more progressive
charge allowing for initiatives such as rebates, discounts, and even
charging different amounts per mile by vehicle, time of day, or
roadway. To be fair, all vehicles including electric vehicles, should
contribute to pay for the use of our roadway system.
The Eastern Corridor Coalition found that after participating in
their RUC pilot, 83 percent of participants said RUC was as fair or
fairer than the gas tax. The RUC can be a more equitable or fair method
of collection than the gas tax because with RUC, all drivers using the
roadway, including highly fuel-efficient and alternative-fuel vehicles,
pay to maintain and operate the roadway network.
In 2017, a report was issued on the RUC West Consortium entitled
``Financial Impacts of Road User Charges on Urban and Rural
Households.'' This report provided an analysis of the financial impacts
of a revenue-neutral RUC for drivers in urban and rural counties for
eight states in the RUC West Consortium--Arizona, California, Idaho,
Montana, Oregon, Texas, Utah, and Washington. The report's analysis
showed that households in rural census tracts will generally pay less
under a road user charge than they are currently paying in gasoline
taxes. In most states, households in mixed census tracts will also pay
less under a RUC. Households in urban areas in all eight states could
see a slight increase in payments.
The National Surface Transportation Infrastructure Financing
Commission (established by Congress as part of the SAFETEA-LU
Authorizing legislation) studied the range of funding options and
concluded that: ``a federal funding system based on more direct forms
of ``user pay'' charges in the form of a charge for each mile driven
(commonly referred to as a vehicle miles traveled or VMT fee system),
has emerged as the consensus choice for the future.''
We share the following links as resources to consider as this issue
progresses:
https://www.rucwest.org/wp-content/uploads/2018/07/
RUC_RuralDrivers_
folio_final-LTR.pdf
http://www.mbufa.org/myth.html
https://financecommission.dot.gov/Documents/
NSTIF_Commission_
Final_Report_Exec_Summary_Feb09.pdf
https://tetcoalitionmbuf.org/states-are-exploring-new-
ways-to-pay-for-
transportation-our-latest-research-shows-addressing-public-opinion-
will-be-key/?subscribe=success#wp-widget-blog_subscription
https://tetcoalitionmbuf.org/wp-content/uploads/2020/07/
Coalition-MBUF-Equity-
_-Fairness-Tech-Memo_2019.pdf
https://itif.org/publications/2019/04/22/policymakers-
guide-road-user-charges
Question 2. Across much of rural America, there are closed roads
and bridges that are creating longer trips and commutes for families,
drivers, and delivery systems. The longer these trips are, especially
compounded by something like a heavy logging area that is running
trucks constantly in and out of that area, or daily parcel services, or
school buses, the more emissions occur.
How would long-term and robust investment in our roads and bridges
across rural America best address emissions in rural America?
Answer. Investments in transportation that make the system more
efficient and reduce congestion have the added benefit of opportunity
to also reduce emissions. Improvements that address major deficiencies
in infrastructure quality that result in reduced trip length, travel
time, congestion and idling of commercial vehicles may have benefits on
air quality, but the specifics of those improvements would be
determining factors in how much improvement in air quality would
result. There are also advances being made in materials that are
showing promise for carbon emission reductions.
Additionally, often exurban and rural communities depend on long-
distance bus services that rural transit operators provide for both
commuter access to the nearest employment centers. Those options, in
addition to providing mobility access, also provide climate and air-
quality benefits by reducing long-distance single-occupancy vehicle
(SOV) trips. In some cases, rural commuter service into urban centers
can be substantial, providing the benefits of those reduced (SOV) trips
and congestion improvements on the corridor served. While this type of
access may not be available everywhere, the potential for climate
friendly transportation service that also address access to economic
and employment centers is certainly worthwhile.
Climate change is having an impact in rural, suburban and urban
communities, and transportation is the single largest contributor of
carbon pollution. The steps we take to address the resiliency of our
infrastructure, but also to provide cleaner transportation options are
appropriate in all communities.
Questions from Hon. Scott Perry to Troy Rudd, Chief Executive Officer,
AECOM
Question 3. I sincerely hope this hearing serves as a wakeup call
to the American people about the degree to which our Nation's political
and corporate elites are marching in lockstep behind President Biden's
Green New Deal--and promise to electrify the transportation sector
against the will of the American consumer.
If this cooperative effort is to succeed, it will cause great harm
to America's prosperity and security.
While it appears nearly everyone testifying before the Committee
today--and much of the broader corporate community--has accepted and
embraced the radical, whole-sale approach to rapidly electrify our
transportation sector, historical and recent consumption trends
indicate that your consumers--and our constituents--don't share this
warm embrace.
These concerns will grow to disdain as the costs of all consumer
goods continues to skyrocket.
The near universal acceptance that electrification is inevitable
must be met with the proper historical context--the electric vehicle is
NOT some emerging technology that will breakthrough if enough taxpayer
money is spent.
As a matter of fact, electric vehicles are as old as motorized
vehicles themselves.
In 1896--yes, eighteen-ninety-six--Thomas Edison wrote to Henry
Ford admitting the electric vehicle had been rendered obsolete by the
cheaper, superior alternative, the internal combustion engine:
``Electric cars must keep near to power stations. The storage
battery is too heavy . . . Your car is self-contained--carries
its own power plant--no fire, no boiler, no smoke and no steam.
You have the thing. Keep at it.''
125 years after this exchange, EVs are still plagued by largely the
same deficiencies relative to ICEs--a lack of range, higher costs, and
a lack of battery capacity per pound.
More recent concerns about battery life-span, the diminished range
of aging batteries, and the propensity for aging batteries to erupt in
flames add to consumer weariness.
Until these fundamental issues are resolved, American consumers
will not adopt electric vehicles voluntarily as demonstrated by EV's
anemic market share and the continual failure to meet projected sales
figures.
At the height of the Obama administration's taxpayer handouts for
EV companies, he predicted there would be 1 million EVs on the road by
2015--a figure that wasn't reached until the end of 2018.
Over the past decade, the EV industry received $43 billion in
federal subsidies and tax incentives to manufacturers and consumers--
plus state and local incentives--and electric vehicle sales made up
only 1.9 percent of US retail car sales in 2020.
Throwing helicopter money at charging infrastructure fails to
rectify these underlying issues and thus will not spur widespread
voluntary adoption by consumers.
Can anyone please explain to my constituents:
How this is a responsible use of their tax dollars; or
Question 4. What is so unique about the EV sector that fosters the
unfounded belief that central planning will work this time when every
previous attempt has failed?
Answer to questions 3 & 4. We see electrification of the
transportation sector as a solution to a problem that our clients are
raising with us, and one that is thoroughly achievable.
We know that fossil fuels are contributing to greenhouse gas
emissions. We also know that the transportation sector is currently the
economic sector that is currently contributing the greatest amount to
our carbon emissions total, making it the sector that has the most
opportunity for reductions. A move towards electrification now will
enable significant reductions in carbon emissions, and when coupled
with decarbonization of the power sector, these changes hold great
promise to help us achieve goals for reduced greenhouse gas emissions
in the near and long term. A study by the American Lung Association
found that with a nationwide transition to EVs by 2050, the U.S. could
avoid 6,300 premature deaths, 93,000 asthma attacks, and 416,000 lost
workdays each year. Over that time, it would add up to $72 billion in
health benefits and $113 in climate-related benefits. Further, this
transition would result in a 94% cut in greenhouse gas emissions,
particularly for millions of Americans who live in counties where there
are unhealthy levels of ozone and particle pollution.
Technology advances over the last decade have driven prices down
significantly, with battery pack prices falling 89 percent and many
automakers stating they believe electric vehicles will cost the same
price as comparable internal combustion engines by 2023. Electric
vehicles are also less expensive to maintain, and this means cost
savings for governments and businesses that operate and maintain large
fleets. These governments and businesses are beginning to recognize
that the technology has reached a point of maturity where fleet
conversion is not only possible but is practical and makes financial
sense due to cost savings derived from both power and maintenance. We
regularly support government and commercial clients in their dual goals
to reduce costs (saving taxpayers or clients money) and reduce
emissions through energy efficiency and operations improvements. We
think this makes good government sense, and good business sense.
AECOM is working with clients to develop holistic approaches to
transportation electrification that combine fleet conversion and
charging infrastructure with grid enhancements (microgrids and
distributed energy), energy efficiency improvements, and renewable
energy applications. When combined together, the savings achieved and
the energy applied have enormous potential to reshape our
transportation systems for the better.
Questions from Hon. Michael Guest to Rafael Santana, President and
Chief Executive Officer, Wabtec Corporation
Question 1. Research has shown that the demand for travel has grown
due to urban sprawl and low fuel costs that have allowed individuals to
work in urban centers but commute long distances to town. We have
discussed expanding transit systems and more efficient pedestrian
travel to account for that. But as we know, there are also rural
communities that require travel to get to school or work in their rural
communities. We have discussed a proposed Vehicle Miles Travelled (VMT)
Tax to promote more efficient collection of highway users in fees.
Rural citizens are going to be the most against this and
disproportionately affected in the short run.
Would you be able to discuss how a VMT may be beneficial to rural
Americans?
Answer. Wabtec Corporation does not have a position on the Vehicle
Miles Tax and its benefits for rural Americans. That issue is outside
the scope of Wabtec's business which is freight rail locomotives and
freight and transit rail components.
Question 2. Across much of rural America, there are closed roads
and bridges that are creating longer trips and commutes for families,
drivers, and delivery systems. The longer these trips are, especially
compounded by something like a heavy logging area that is running
trucks constantly in and out of that area, or daily parcel services, or
school buses, the more emissions occur.
How would long-term and robust investment in our roads and bridges
across rural America best address emissions in rural America?
Answer. Wabtec Corporation generally supports increased investment
in various infrastructure projects that might reduce emissions in rural
America. As I discussed in my testimony, Wabtec believes that
increasing freight rail utilization, capacity, and developing hydrogen
locomotives will further reduce emissions in across America, including
rural America where thousands of freight railroad lines connect cities
and towns. Wabtec believes that increasing freight rail utilization by
50% and deploying hydrogen freight rail locomotives by 2030 will
eliminate 100 million tons of carbon dioxide in the United States every
year.
Questions from Hon. Scott Perry to Rafael Santana, President and Chief
Executive Officer, Wabtec Corporation
Question 3. I sincerely hope this hearing serves as a wakeup call
to the American people about the degree to which our Nation's political
and corporate elites are marching in lockstep behind President Biden's
Green New Deal--and promise to electrify the transportation sector
against the will of the American consumer.
If this cooperative effort is to succeed, it will cause great harm
to America's prosperity and security.
While it appears nearly everyone testifying before the Committee
today--and much of the broader corporate community--has accepted and
embraced the radical, whole-sale approach to rapidly electrify our
transportation sector, historical and recent consumption trends
indicate that your consumers--and our constituents--don't share this
warm embrace.
These concerns will grow to disdain as the costs of all consumer
goods continues to skyrocket.
The near universal acceptance that electrification is inevitable
must be met with the proper historical context--the electric vehicle is
NOT some emerging technology that will breakthrough if enough taxpayer
money is spent.
As a matter of fact, electric vehicles are as old as motorized
vehicles themselves.
In 1896--yes, eighteen-ninety-six--Thomas Edison wrote to Henry
Ford admitting the electric vehicle had been rendered obsolete by the
cheaper, superior alternative, the internal combustion engine:
``Electric cars must keep near to power stations. The storage
battery is too heavy . . . Your car is self-contained--carries
its own power plant--no fire, no boiler, no smoke and no steam.
You have the thing. Keep at it.''
125 years after this exchange, EVs are still plagued by largely the
same deficiencies relative to ICEs--a lack of range, higher costs, and
a lack of battery capacity per pound.
More recent concerns about battery life-span, the diminished range
of aging batteries, and the propensity for aging batteries to erupt in
flames add to consumer weariness.
Until these fundamental issues are resolved, American consumers
will not adopt electric vehicles voluntarily as demonstrated by EV's
anemic market share and the continual failure to meet projected sales
figures.
At the height of the Obama administration's taxpayer handouts for
EV companies, he predicted there would be 1 million EVs on the road by
2015--a figure that wasn't reached until the end of 2018.
Over the past decade, the EV industry received $43 billion in
federal subsidies and tax incentives to manufacturers and consumers--
plus state and local incentives--and electric vehicle sales made up
only 1.9 percent of US retail car sales in 2020.
Throwing helicopter money at charging infrastructure fails to
rectify these underlying issues and thus will not spur widespread
voluntary adoption by consumers.
Can anyone please explain to my constituents:
How this is a responsible use of their tax dollars; or
Question 4. What is so unique about the EV sector that fosters the
unfounded belief that central planning will work this time when every
previous attempt has failed?
Answer to questions 3 & 4. Wabtec is a locomotive manufacturer and
does not have a position on tax credits for electric vehicles.
Questions from Hon. Jared Huffman to Frederick W. Smith, Chairman and
Chief Executive Officer, FedEx Corporation
Question 1. Mr. Smith, FedEx has made the business decision to have
an entire fleet of zero vehicles (ZEV) by 2040. While this will have
the environmental benefit of reduced emissions reduction, as a business
you are first and foremost focused on your bottom line and the laser
focus on total cost of ownership.
Why did you conclude from a business perspective that rapid
transition to ZEV's was the smartest move?
Answer. As we announced on March 3, 2021, the transition to ZEV's
will be via a phased approach that will occur over the next 19 years.
We also announced interim goals for the FedEx Express pick-up and
delivery (PUD) vehicle fleet, of which we expect 50% of our global PUD
vehicle purchases to be ZEV by 2025 and 100% by 2030. These goals do
not apply to our long-haul trucking fleet since the technological path
to electrification for this class of vehicles is lagging light and
medium-duty vehicles.
In addition to being the right thing to do for the well-being of
the communities where we operate, there are economic considerations in
transitioning away from internal combustion engines in our PUD fleet.
On average, FedEx anticipates that the savings achieved from
electric vehicle use compared to continued use of internal combustion
engine vehicles could be in a range of approximately 50% of current
operating costs. We recognize that actual savings as a result of this
transition will depend on external factors, such as changes in fuel
costs over the 19-year transition, fluctuation in manufacturing and
production costs, as well as capital expenditures to construct the
supporting ground infrastructure needed for EVs.
Question 2. Fast forward to 2040, when FedEx and other business
competitors will have all or significant ZEV fleets.
How much will FedEx save by 2040 with an all ZEV fleet?
Answer. As noted above, we expect the savings from this transition
to be in a range of approximately 50% of today's current vehicle
operating costs. This estimate will likely change based on other
external factors, such as future fuel costs over the course of the 19-
year transition, fluctuation in EV manufacturing and production, as
well as capital expenditures to replace and electrify our network and
pickup and delivery fleet. Much, if not all of this investment, will be
recovered over time. Beyond the economic incentives for our company,
this is an investment in the continued well-being of the communities we
serve.
Question 3. Do you think any major business focused on delivery of
goods at your scale could compete in 2040 without a nearly all ZEV
fleet, instead depending on outdated gas-guzzling technology?
Answer. While I am not able to opine on the business decisions of
FedEx's competitors, I think we will continue to see a transition away
from ICE vehicles and toward EVs due to the clear and compelling
economic and societal benefits, as well as consumer demand.
Questions from Hon. Michael Guest to Frederick W. Smith, Chairman and
Chief Executive Officer, FedEx Corporation
Question 4. As we've discussed, larger corporations and
transportation system manufacturers are moving towards more efficient
systems. In my opinion, this allows larger companies to sell more
efficient used equipment to smaller operations or allow prices to be
more affordable for small businesses while also not setting burdensome
mandates or requirements for compliance by the federal government. We
know this works because Americans moved to using more fuel-efficient
cars when automakers worked to produce them. That's why our Highway
Trust Fund is depleted.
What do you see as the impact on small businesses in your
industries if mandated emission standards were put in place vs.
allowing the market to work through this process we just discussed?
Answer. Emissions standards are currently regulated by the U.S.
Environmental Protection Agency, and for the transportation industry,
those standards are enforced by the relevant component agencies of the
U.S. Department of Transportation. These standards are developed via
the federal rulemaking process, which affords opportunity for public
comment to allow the agency to fully consider the impact of these
policy decisions on the affected stakeholders, including the
consideration of alternatives that achieve the same objective yet
minimize the burden on small businesses. When such policy changes are
under consideration, we work closely with our independent service
providers to assess the impact on our operation, as well as evaluate
the rate of technology development and internal and external
infrastructure modification and development that would be needed to
support these changes to ensure these factors are considered by the
relevant agencies.
Question 5. Research has shown that the demand for travel has grown
due to urban sprawl and low fuel costs that have allowed individuals to
work in urban centers but commute long distances to town. We have
discussed expanding transit systems and more efficient pedestrian
travel to account for that. But as we know, there are also rural
communities that require travel to get to school or work in their rural
communities. We have discussed a proposed Vehicle Miles Travelled (VMT)
Tax to promote more efficient collection of highway users in fees.
Rural citizens are going to be the most against this and
disproportionately affected in the short run.
Would you be able to discuss how a VMT may be beneficial to rural
Americans?
Answer. As Americans continue to purchase and drive electric and
hybrid passenger vehicles, receipts from motor fuel taxes paid into the
Highway Trust Fund will continue to decline, thus further reducing
resources needed to maintain the Federal highway system. An equitable
and well-designed Vehicle Miles Traveled (VMT) tax could be implemented
that builds on the existing user fee model for highways, while also
balancing the needs of Americans living in rural areas. FedEx
recognizes that such a policy shift is of interest to all who use the
federal highway system and looks forward to working with Congress and
the U.S. Department of Transportation in developing a system that
builds upon the productivity of the nation's highways.
Question 6. How might a VMT change parcel service business models,
both large and small?
Answer. Creating a stable source of funding to modernize and invest
in infrastructure will increase safety and efficiency across our
country's aging transportation system for all users--both passenger and
commercial. The long-term benefits of this investment will be shared
across the transportation companies, large and small, who move nearly
70% of all U.S. freight tonnage by trucks.
Question 7. Across much of rural America, there are closed roads
and bridges that are creating longer trips and commutes for families,
drivers, and delivery systems. The longer these trips are, especially
compounded by something like a heavy logging area that is running
trucks constantly in and out of that area, or daily parcel services, or
school buses, the more emissions occur.
How would long-term and robust investment in our roads and bridges
across rural America best address emissions in rural America?
Answer. Infrastructure is not limited to being a rural or urban
issue. Our interstate system is over 60 years old, and many of our
roads and bridges are dangerously deteriorated, as regularly reported
by the U.S. Department of Transportation (DOT). In smaller, rural
communities, when a bridge is not safe to cross, operators are often
forced to drive miles out of their way to safely get to their
destination, which only serves to increase vehicle emissions.
Improvements in our infrastructure are necessary not only for reduction
in emissions, but to keep our system safe for all users, and ensure the
system is capable of sustaining and advancing the anticipated economic
growth of all industries who rely on this system.
Question 8. As widespread use of commercial parcel delivery by
Unmanned Aerial Systems becomes more of a reality, how can UAS be best
used to address emissions and traffic issues across the country?
Mississippi State University in my district houses the FAA Center of
Excellence for UAS and would be glad to help address that need.
Answer. Continued investment in research and development of new
technologies, including small unmanned aircraft systems, will result in
safety and efficiency advancements for our team members and operations.
As we have noted previously, it will take a portfolio of solutions to
address the challenges of the anticipated growth in the e-commerce
market. More research and development is needed to fully understand the
impact and various use cases for small unmanned aircraft systems, which
is why we continue to work with the U.S. Federal Aviation
Administration via the agency's Beyond program to build on the findings
of the U.S. Department of Transportation's Small Unmanned Aircraft
System (UAS) Integration Pilot Program (IPP).
Questions from Hon. Scott Perry to Frederick W. Smith, Chairman and
Chief Executive Officer, FedEx Corporation
Question 9. I sincerely hope this hearing serves as a wakeup call
to the American people about the degree to which our Nation's political
and corporate elites are marching in lockstep behind President Biden's
Green New Deal--and promise to electrify the transportation sector
against the will of the American consumer.
If this cooperative effort is to succeed, it will cause great harm
to America's prosperity and security.
While it appears nearly everyone testifying before the Committee
today--and much of the broader corporate community--has accepted and
embraced the radical, whole-sale approach to rapidly electrify our
transportation sector, historical and recent consumption trends
indicate that your consumers--and our constituents--don't share this
warm embrace.
These concerns will grow to disdain as the costs of all consumer
goods continues to skyrocket.
The near universal acceptance that electrification is inevitable
must be met with the proper historical context--the electric vehicle is
NOT some emerging technology that will breakthrough if enough taxpayer
money is spent.
As a matter of fact, electric vehicles are as old as motorized
vehicles themselves.
In 1896--yes, eighteen-ninety-six--Thomas Edison wrote to Henry
Ford admitting the electric vehicle had been rendered obsolete by the
cheaper, superior alternative, the internal combustion engine:
``Electric cars must keep near to power stations. The storage
battery is too heavy . . . Your car is self-contained--carries
its own power plant--no fire, no boiler, no smoke and no steam.
You have the thing. Keep at it.''
125 years after this exchange, EVs are still plagued by largely the
same deficiencies relative to ICEs--a lack of range, higher costs, and
a lack of battery capacity per pound.
More recent concerns about battery life-span, the diminished range
of aging batteries, and the propensity for aging batteries to erupt in
flames add to consumer weariness.
Until these fundamental issues are resolved, American consumers
will not adopt electric vehicles voluntarily as demonstrated by EV's
anemic market share and the continual failure to meet projected sales
figures.
At the height of the Obama administration's taxpayer handouts for
EV companies, he predicted there would be 1 million EVs on the road by
2015--a figure that wasn't reached until the end of 2018.
Over the past decade, the EV industry received $43 billion in
federal subsidies and tax incentives to manufacturers and consumers--
plus state and local incentives--and electric vehicle sales made up
only 1.9 percent of US retail car sales in 2020.
Throwing helicopter money at charging infrastructure fails to
rectify these underlying issues and thus will not spur widespread
voluntary adoption by consumers.
Can anyone please explain to my constituents:
How this is a responsible use of their tax dollars; or
Question 10. What is so unique about the EV sector that fosters the
unfounded belief that central planning will work this time when every
previous attempt has failed?
Answer to question 10. As evidenced by our long-standing history of
leadership in sustainability, including our announcement on March 3,
2021, businesses can and will lead in this effort. To do so, however,
we need supportive policies that help advance innovation. Those
policies can only come by working together to ensure alignment on
investment and research and development priorities.
We have to modernize our country's infrastructure to accommodate
new and more sustainable technologies. Widespread deployment of
electric vehicles, not just by FedEx but other large fleets, small
businesses, municipalities, and individuals will have a profound impact
on the power grid. We support public policy that strengthens this
infrastructure and ensures that the electricity being generated comes
from a diverse set of low and zero emission sources and is of
sufficient supply to meet the demand of all users.
I can't speak to the supply chains of individual EV manufacturers
here in the U.S., but recent studies have shown that by shifting 50
percent of all vehicles produced to electric would result in a global
net total of ten million new jobs across all sectors of the economy.
Incentives intended to speed the adoption of and transition to EVs or
stimulate manufacturing of EVs would stimulate both job growth and the
economy.
Questions from Hon. Peter A. DeFazio to Laurie M. Giammona, Senior Vice
President for Customer Care, Pacific Gas and Electric Company
Question 1. Ms. Giammona, does PG&E support a change in Federal law
to allow EV charging at park-and-ride facilities and rest areas? Would
this help expand EV charging deployment and reduce range anxiety?
Answer. PG&E is dedicated to working with our customers,
communities, regulators and policymakers to advance solutions that
increase access to electric vehicle (EV) charging and reduce range
anxiety. Range anxiety is one of the key barriers customers cite to EV
adoption. While newer models of light-duty EVs provide increased range
comparable with internal combustion engine vehicles, access to charging
including along the interstate highway system is needed to provide EV
drivers convenient, dependable recharging options for longer trips. If
the Federal government decides EV charging should be allowed at park-
and-ride facilities and rest areas, PG&E will be ready and willing to
work with our customers to provide utility services needed to deploy
charging at these locations.
Question 2. Do you have any examples of partnerships with the
retail fuel sector to provide EV charging?
Answer. The role played by electric utilities is only one of many
in the broader transportation electrification ecosystem. This ecosystem
includes entities such as policy makers, automakers, EV charging
companies, battery and component manufacturers, technology providers,
utilities, and host sites for EV charging, including traditional fuel
retailers. EV drivers will need multiple options for charging, and fuel
retailers can play an important role in this space.
Through PG&E's EV Fast Charge program, we are partnering with fuel
retailers, including 7-Eleven, to install public EV fast charging at
retailer locations. PG&E's EV Fast Charge program is investing $22
million from 2020 to 2025 to install infrastructure that supports
Direct Current Fast Charging (DCFC) that is publicly accessible 24
hours a day, seven days a week. In February 2021, PG&E announced that
the first public EV fast chargers installed through this program are
now open at a 7-Eleven location in West Sacramento, and the companies
are examining opportunities to install fast chargers at other 7-Eleven
locations.\1\
---------------------------------------------------------------------------
\1\ Pacific Gas and Electric Company, ``PG&E Launches EV Fast
Charge Program to Help Accelerate Electric Vehicle Adoption in
California'' (February 18, 2021), https://www.pgecurrents.com/2021/02/
18/pge-launches-ev-fast-charge-program-to-help-accelerate-electric-
vehicle-adoption-in-california/.
Question 3. Ms. Giammona, can you expand on some of PG&Es efforts
to ensure that EV charging infrastructure reaches all communities.
How much has PG&E, and the electric utility sector, invested in
helping communities deploy EV charging infrastructure?
Answer. As part of our normal course of business, PG&E invests in
upgrading and maintaining our electric distribution grid to accommodate
all new loads, including the growing loads for EV charging. In
addition, PG&E is making supplemental capital investments that total
more than $400 million in approved infrastructure programs through
2025--one of the largest utility-EV investments in the nation. These
investments include:
EV Charge Network: $130 million to install 4,000 to 5,000
level-2 charging ports to support light-duty vehicle charging at
workplaces and multi-unit dwellings. Through March 2021, 4,504 level-2
charging ports have been installed at 184 sites.
EV Fleet: $236 million to help 700+ organizations
including school districts, transit agencies and small businesses
electrify their fleet operations by supporting infrastructure for 6,500
medium- and heavy-duty EVs. Through March 2021, EV charging
infrastructure has been installed at 22 sites to support 237 electric
fleet vehicles.
EV Fast Charge: $22 million to install infrastructure to
support public Direct Current Fast Charging (DCFC). Through March 2021,
four DCFC ports have been installed at one site.
EV Schools and Parks: $12 million in charging
infrastructure at schools and state parks. As of April 2021, PG&E is
currently accepting and reviewing applications from potential program
participants.
These charging programs include incentives for, and deployment
targets in, disadvantaged communities, helping to ensure all customers
can equitably access the benefits of EVs, and PG&E seeks to install up
to 2,000 level-1 and level-2 home chargers for low-income customers by
2023.
While PG&E will continue to play a critical role deploying EV
charging infrastructure in our service area, particularly in
underserved communities, PG&E's investments alone will not meet the
significant demand for EV charging in our service area. A recent EV
charging infrastructure assessment performed by the California Energy
Commission found that through September 2020 there were approximately
67,000 shared public and private chargers in California.\2\ The
assessment concluded the State would need nearly 1.5 million chargers
by 2030 to support the number of vehicles envisaged by Governor Gavin
Newsom's Executive Order setting a goal of phasing out sales of light-
duty internal combustion engine vehicles by 2035.\3\ The significant
amount of charging infrastructure required demonstrates the need for
support from EV markets and a multitude of stakeholders.
---------------------------------------------------------------------------
\2\ California Energy Commission, ``Electric Vehicle Charging
Infrastructure Assessment--AB 2127,'' https://www.energy.ca.gov/
programs-and-topics/programs/electric-vehicle-charging-
infrastructure-assessment-ab-2127.
\3\ Office of Governor Gavin Newsom, ``Executive Order N-79-20''
(September 23, 2020), https://www.gov.ca.gov/wp-content/uploads/2020/
09/9.23.20-EO-N-79-20-text.pdf
---------------------------------------------------------------------------
Industry-wide, the Edison Electric Institute (EEI), which
represents all U.S. investor-owned electric companies, reports that as
of the end of January 2021, 52 electric companies had received
regulatory approval in 31 states for electric transportation
filings.\4\ As a result, these electric companies are investing nearly
$3 billion in customer programs to deploy charging infrastructure and
accelerate electric transportation.
---------------------------------------------------------------------------
\4\ Edison Electric Institute, ``Electric Transportation Biannual
State Regulatory Update'' (February 2021), https://www.eei.org/
issuesandpolicy/electrictransportation/Documents/FINAL_
ET%20Biannual%20State%20Regulatory%20Update_February2021.pdf.
---------------------------------------------------------------------------
Questions from Hon. Michael Guest to Laurie M. Giammona, Senior Vice
President for Customer Care, Pacific Gas and Electric Company
Question 4. Research has shown that the demand for travel has grown
due to urban sprawl and low fuel costs that have allowed individuals to
work in urban centers but commute long distances to town. We have
discussed expanding transit systems and more efficient pedestrian
travel to account for that. But as we know, there are also rural
communities that require travel to get to school or work in their rural
communities. We have discussed a proposed Vehicle Miles Travelled (VMT)
Tax to promote more efficient collection of highway users in fees.
Rural citizens are going to be the most against this and
disproportionately affected in the short run.
Would you be able to discuss how a VMT may be beneficial to rural
Americans?
Answer. While PG&E does not have a position on federal vehicle
miles traveled (VMT) proposals, we believe all drivers, including EV
owners, should contribute to the Highway Trust Fund and support the
infrastructure they utilize. Any proposal should recognize the
environmental benefits and efficiency of EVs while also considering the
equity implications proposals may have on some drivers, including those
who have longer commutes with limited public transit options.
Question 5. Across much of rural America, there are closed roads
and bridges that are creating longer trips and commutes for families,
drivers, and delivery systems. The longer these trips are, especially
compounded by something like a heavy logging area that is running
trucks constantly in and out of that area, or daily parcel services, or
school buses, the more emissions occur.
How would long-term and robust investment in our roads and bridges
across rural America best address emissions in rural America?
Answer. According to research sponsored by the National Science
Foundation, traffic congestion increases vehicle emissions and degrades
air quality, which leads to excess morbidity and mortality for drivers,
commuters and individuals living near major roadways.\5\ Traffic
congestion can be caused by various factors, including accidents,
weather, work zones, poorly managed traffic controls, and physical
bottlenecks due to insufficient or deteriorated infrastructure that
cannot efficiently accommodate the volume of travelers.
---------------------------------------------------------------------------
\5\ Zhang, Kai and Batterman, Stuart, ``Air pollution and health
risks due to vehicle traffic'' (November 2014), https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC4243514/#: :text=Traffic
%20congestion%20increases%20vehicle%20emissions,on%20roads%20is%20very%2
0limited.
---------------------------------------------------------------------------
Improved infrastructure could help reduce traffic congestion and as
result help lower transportation emissions. Further, greater deployment
of EVs, which emit no tailpipe emissions, will further reduce
transportation pollution in all communities.
Questions from Hon. Greg Stanton to Laurie M. Giammona, Senior Vice
President for Customer Care, Pacific Gas and Electric Company
Question 6. Ms. Giammona, in your testimony, you described the
importance of a partnership among public sector, private sector, and
regulated utilities to facilitate electrification of the light duty
vehicle fleet.
What role has PG&E played in providing publicly available EV supply
equipment, and how can utilities like PG&E partner with the public and
private sector to advance the adoption of EVs?
Answer. PG&E is actively collaborating with automakers, charging
equipment providers, state agencies, customers, and communities to
support the large-scale electric infrastructure needed to incorporate
EV charging systems into the energy grid. Additionally, PG&E is making
investments totaling more than $400 million in approved infrastructure
programs through 2025--one of the largest utility-EV investments in the
nation. These investments include $22 million to install infrastructure
to support public Direct Current Fast Charging (DCFC) and $12 million
in charging infrastructure at schools and state parks. All DCFC
installed through PG&E's Fast Charge program will be accessible to the
public 24 hours a day, seven days a week while charging infrastructure
installed at certain schools and parks will also be available for
public use. Other PG&E charging programs target infrastructure
investments in medium- and heavy-duty fleet electrification and level-2
charging at workplaces and multi-unit dwellings, which are not
necessarily publicly accessible but will aid in efforts for fleets and
individuals to transition to electric transportation.
To help advance the adoption of EVs in Northern and Central
California, PG&E partners with both the private and public sectors to
overcome common barriers to adoption. PG&E provides vital assistance to
help our customers overcome these barriers by expanding access to
charging infrastructure, reducing the total cost of ownership of EVs,
and engaging and educating customers about the benefits of EVs. PG&E is
also working to optimize charging infrastructure siting and usage to
maximize grid benefits and support customer affordability. To ensure a
smooth transition to widespread EV adoption, PG&E strongly encourages
our customers, policymakers, and regulators seeking to support EV
charging in our service area to communicate early with PG&E so we can
ensure the distribution grid is best prepared to meet these new demands
in an efficient, timely manner. Utilities across the United States can
take similar steps to aid public and private sector customers'
transition to electrified transportation.
Questions from Hon. Nikema Williams to Laurie M. Giammona, Senior Vice
President for Customer Care, Pacific Gas and Electric Company
Question 7. There is rising pressure to find sustainable solutions
to combat climate change and protect our resources for the future
generations to come.
Ms. Giammona, in your testimony you suggested grant funding for
public EVs and other forms of clean fuel infrastructure for deployment
in disadvantaged communities.
How can we ensure benefits of EVs are also available to
disadvantaged communities and low-income customers? As we move to
upgrade the grid and charging infrastructures in low-income
communities, what obstacles do you see in terms of making it equitably
available and what should Congress do to combat these?
Answer. PG&E supports incentives and policies that ensure
disadvantaged communities and low-income customers can benefit from
EVs, including reducing the upfront costs of EVs, ensuring charging
options are available in these communities, and working with schools,
local transit agencies and fleet operators to electrify medium- and
heavy-duty vehicles. California and PG&E have enacted policies and
programs that specifically strive to ensure that disadvantaged
communities are not left behind in the transition to EVs, and we
believe federal policy can complement these activities and accelerate
opportunities for these communities to realize the benefits of EVs.
Of note, federal policies that provide point-of-sale rebates and
used EV incentives will help lower the upfront cost of light-duty EVs
for all customers, including those with limited tax liability. PG&E is
working to reduce the overall cost of EV ownership through rebates and
specialized electric rates that ensure owning and operating an EV can
be cheaper than a gasoline-fueled alternative. In addition to federal
tax credits, Californians are eligible for a point-of-sale price
reduction of up to $1,500 for the purchase or lease of a new EV through
the California Clean Fuel Reward program.\6\ PG&E also offers
residential and commercial EV charging rates, that provide predictable,
simplified and affordable rates for customers.
---------------------------------------------------------------------------
\6\ California Clean Fuel Reward, https://cleanfuelreward.com/
---------------------------------------------------------------------------
Federal policy can also provide incentives such as grants to ensure
charging infrastructure is deployed in disadvantaged communities. At
PG&E, we are investing more than $400 million through 2025 in
infrastructure investments to expand EV charging, including level-2
charging at workplaces and multi-unit dwellings, public fast charging,
charging at schools and parks, and charging for medium- and heavy-duty
fleets such as transit agencies and school districts. These charging
programs include incentives for, and deployment targets in,
disadvantaged communities, helping to ensure customers can equitably
access the benefits of EVs. PG&E additionally seeks to install up to
2,000 level-1 and level-2 home chargers for low-income customers by
2023 as part of its Empower EV program.
Finally, disadvantaged and environmentally burdened communities
often suffer from poor air quality due to proximity to major
transportation corridors (e.g., highways) or industrial areas that see
a large flow of fleet vehicles (e.g., ports, railyards, etc.) and can
benefit from improved air quality with greater deployment of EVs,
particularly electrification of transit buses, school buses, and other
fleet vehicles which produce a larger share of air pollution. Federal
programs that provide grants and incentives can help advance the
development and deployment of medium- and heavy-duty EVs and necessary
charging infrastructure in these communities.
The greatest barrier to EV adoption and charging deployment in
disadvantaged communities remains the upfront cost of the vehicle and
customer charging stations. For some EV charging providers, building
charging in disadvantaged communities where EV adoption remains low may
not provide a necessary return on investment. A recent study by the
California Energy Commission on the distribution of EV chargers found
that low-income census tracts have the fewest chargers per capita while
high income census tracts have the most.\7\ For potential EV owners in
these communities, the lack of accessible charging infrastructure--
combined with the higher upfront cost of some EV models--can discourage
adoption.
---------------------------------------------------------------------------
\7\ California Energy Commission, ``SB 1000 Electric Vehicle
Charging Infrastructure Deployment Assessment'' (December 21, 2020),
https://efiling.energy.ca.gov/GetDocument.aspx?
tn=236075&DocumentContentId=69078.
---------------------------------------------------------------------------
To overcome these barriers, Congress should examine opportunities
to provide grant funding and other incentives to deploy charging
infrastructure in disadvantaged communities. Furthermore, opportunities
to reduce the upfront cost of EVs, including point-of-sale rebates and
used EV incentives, will help lower the upfront cost of light-duty EVs
for all drivers, including low-income drivers who may have limited tax
liability.
Question 8. I'm proud to represent the Atlanta region, which is
serviced by the public transportation system, MARTA. In 2019 the
company announced that it would start to replace several diesel buses
with zero-emission battery operated models. A shift that I would love
to see with both public and private transportation systems across the
country. However, I recognize that there are challenges to electrifying
buses.
What are some of the barriers to customers who want to electrify
their medium and heavy-duty fleets and what is PG&E doing to support?
Answer. The principal barriers to electrifying medium- and heavy-
duty vehicles are the capital and debt costs and availability of
electric models in these vehicle classes; understanding and planning
for a new refueling paradigm; and the cost and work associated with
installation of charging infrastructure.
Increasing federal and state policy certainty regarding a
transition to cleaner vehicles as well as technology cost reductions
have encouraged more vehicle manufacturers to produce electric versions
of fleet vehicles needed for various medium- and heavy-duty purposes.
PG&E encourages the Federal government to further this policy certainty
and provide incentives for both manufacturers and consumers of these
vehicles to help accelerate their financing, production and adoption.
While direct financial support to lower the upfront costs of
medium- or heavy-duty electric vehicles is outside of PG&E's supportive
scope, PG&E does assist its medium- and heavy-duty fleet customers who
are interested in transitioning to electric vehicles by providing
education to demystify transportation electrification and learn about
available models and purchase incentives. PG&E and electric utilities
act as trusted energy advisors that customers seek to learn from, and
we very much see this as an opportunity to help our customers
transition to cleaner forms of transportation.
PG&E further assists medium- and heavy-duty fleet customers with
the installation of charging infrastructure necessary to transition to
electric vehicles. Through PG&E's EV Fleet program, PG&E is investing
$236 million through 2024 to help 700+ organizations including school
districts, transit agencies and small businesses electrify their fleet
operations by supporting infrastructure for 6,500 medium- and heavy-
duty EVs. Customers participating in the EV Fleet program can see the
upfront costs of electrifying their fleet reduced significantly.
Another concern for fleet operators has been the affordability and
predictability of refueling costs. PG&E has developed an innovative
business EV rate that replaces demand charges with monthly subscription
charges that allow for greater price certainty. This rate provides
business customers a rate of $1.77 per gallon equivalent, which is
about 55 percent lower than current gasoline prices in California.\8\
---------------------------------------------------------------------------
\8\ AAA, ``State Gas Price Averages'' (April 23, 2021), https://
gasprices.aaa.com/state-gas-price-averages/.
---------------------------------------------------------------------------
Finally, customers seeking to expand their medium- or heavy-duty
fleets should coordinate early with their utility to ensure the grid
can effectively meet their charging needs. Large loads associated with
medium- and heavy-duty charging can create a capacity gap on parts of
PG&E's distribution system. If these capacity gaps exist, PG&E makes
upgrades to effectively serve the increased load. To prevent timing
issues, early coordination is key. PG&E is also seeking to expand its
coordination with large customers, regulators and other knowledgeable
parties to identify areas where we could see large influx of vehicle
electrification and proactively upgrade those areas of the distribution
grid to ensure capacity is available once customers are ready to
electrify.
Questions from Hon. Scott Perry to Laurie M. Giammona, Senior Vice
President for Customer Care, Pacific Gas and Electric Company
Question 1. I sincerely hope this hearing serves as a wakeup call
to the American people about the degree to which our Nation's political
and corporate elites are marching in lockstep behind President Biden's
Green New Deal--and promise to electrify the transportation sector
against the will of the American consumer.
If this cooperative effort is to succeed, it will cause great harm
to America's prosperity and security.
While it appears nearly everyone testifying before the Committee
today--and much of the broader corporate community--has accepted and
embraced the radical, whole-sale approach to rapidly electrify our
transportation sector, historical and recent consumption trends
indicate that your consumers--and our constituents--don't share this
warm embrace.
These concerns will grow to disdain as the costs of all consumer
goods continues to skyrocket.
The near universal acceptance that electrification is inevitable
must be met with the proper historical context--the electric vehicle is
NOT some emerging technology that will breakthrough if enough taxpayer
money is spent.
As a matter of fact, electric vehicles are as old as motorized
vehicles themselves.
In 1896--yes, eighteen-ninety-six--Thomas Edison wrote to Henry
Ford admitting the electric vehicle had been rendered obsolete by the
cheaper, superior alternative, the internal combustion engine:
``Electric cars must keep near to power stations. The storage
battery is too heavy . . . Your car is self-contained--carries
its own power plant--no fire, no boiler, no smoke and no steam.
You have the thing. Keep at it.''
125 years after this exchange, EVs are still plagued by largely the
same deficiencies relative to ICEs--a lack of range, higher costs, and
a lack of battery capacity per pound.
More recent concerns about battery life-span, the diminished range
of aging batteries, and the propensity for aging batteries to erupt in
flames add to consumer weariness.
Until these fundamental issues are resolved, American consumers
will not adopt electric vehicles voluntarily as demonstrated by EV's
anemic market share and the continual failure to meet projected sales
figures.
At the height of the Obama administration's taxpayer handouts for
EV companies, he predicted there would be 1 million EVs on the road by
2015--a figure that wasn't reached until the end of 2018.
Over the past decade, the EV industry received $43 billion in
federal subsidies and tax incentives to manufacturers and consumers--
plus state and local incentives--and electric vehicle sales made up
only 1.9 percent of US retail car sales in 2020.
Throwing helicopter money at charging infrastructure fails to
rectify these underlying issues and thus will not spur widespread
voluntary adoption by consumers.
Can anyone please explain to my constituents:
How this is a responsible use of their tax dollars; or
Answer. Electrification of the transportation sector will provide
benefits for our environment, public health, economy, and energy
system--benefits which will be realized by all Americans, not just EV
adopters. In California, transportation is the single largest
contributor of greenhouse gas (GHG) emissions, accounting for 41% of
GHG emissions, while electricity accounts just for 15% of statewide GHG
emissions. Electrifying transportation will be necessary to meet
science-based targets of reducing GHG emissions to net-zero by 2050 or
sooner to avoid the worst consequences of climate change. Already,
California is experiencing the impacts of climate change, including
heat waves, more frequent and extreme storms and wildfires, drought,
and other impacts. These events have resulted in the loss of life and
property and will continue to pose safety and financial risks to
communities across America unless we can mitigate the impacts of
climate change.
Transportation electrification will also improve air quality and
public health as EVs do not produce any tailpipe emissions. In
California, motorists drive more than a billion miles each day,
producing 1,000 tons of smog-forming pollutants.\9\ High levels of air
pollution can lead to asthma and other respiratory illnesses that
especially affect children and seniors, and those living in communities
adjacent to highways, ports and rail yards can suffer disproportionate
effects.
---------------------------------------------------------------------------
\9\ California Air Resources Board, ``Drive Clean CA.Gov,'' https:/
/driveclean.ca.gov/why-drive-clean.
---------------------------------------------------------------------------
The transition to electric vehicles isn't just an environmental
priority, it's also a generational and transformational opportunity for
the United States to generate new jobs and drive economic output. As
our nation seeks to recover from the COVID-19 pandemic and economic
downturn, EV manufacturing and charging infrastructure buildout could
create thousands of domestic jobs, adding to the more than 266,000
American jobs already supported by the alternative fuel vehicle
industry.\10\
---------------------------------------------------------------------------
\10\ National Association of State Energy Officials and Energy
Futures Initiative, ``2020 U.S. Energy & Employment Report,'' https://
www.usenergyjobs.org/.
---------------------------------------------------------------------------
EV owners will also benefit from lower lifetime fuel and
maintenance costs. EVs are less expensive to operate than gasoline-
powered vehicles, primarily due to fuel cost savings because
electricity is less expensive than gasoline on an equivalent cost
basis. Customers using one of PG&E's residential EV rate plans pay as
low as $1.60 per gasoline gallon equivalent--60% less than the current
average price of $3.98 per gallon of gasoline in California.\11\
---------------------------------------------------------------------------
\11\ AAA, ``State Gas Price Averages'' (April 23, 2021), https://
gasprices.aaa.com/state-gas-price-averages/.
---------------------------------------------------------------------------
EVs will even provide economic benefit to electric customers who do
not choose to adopt them--namely through more affordable electric
rates. As additional demand is added to our grid, the fixed costs of
upgrading and maintaining the grid will be spread over more kilowatt
hours, which will help lower costs for all customers. This is
particularly true when EV users are incentivized to charge during off-
peak periods.
Greater EV adoption will also provide PG&E more flexibility to
manage the grid in a way that promotes better resilience and
reliability. In our service area, there is an increasing penetration of
solar resources available in the morning hours--when demand is lower--
and an increase in electricity demand in the afternoon and evening
hours when the sun is down. Smart charging and incentives to EV owners
to recharge during those peak solar hours will allow us to utilize more
renewable energy and shift demand in a way that benefits all grid
users.
Given the multiple, economywide benefits of EVs, PG&E supports
federal incentives and investments including for research and
development that will help accelerate deployment of charging
infrastructure, reduce the upfront costs of EVs, and ensure EVs
integrate successfully onto the electric grid.
Question 2. What is so unique about the EV sector that fosters the
unfounded belief that central planning will work this time when every
previous attempt has failed?
Answer. PG&E agrees that market-based incentives and collaboration
are essential to support the expansion of transportation
electrification. The broader transportation electrification ecosystem
includes policy makers as well as market participants such as
automakers, EV charging companies, battery and component manufacturers,
technology providers, utilities, and host sites for EV charging.
Coordination and partnerships amongst private and public sector actors
in this ecosystem help ensure deployment of EVs and charging
infrastructure proceeds in an efficient, equitable manner that best
meets customers' needs and demands. Federal policy to incent this
transition in EV markets will help drive down the costs of EVs, expand
charging infrastructure and encourage greater customer adoption.
Questions from Hon. Peter A. DeFazio to Tom Lewis, P.E., J.D., National
Business Line Executive for Climate, Resilience, and Sustainability,
WSP USA
Question 1. Mr. Lewis, your testimony references the ``Envision''
system, a framework for evaluating the sustainability and resilience of
transportation projects.
Do you think a similar model can or should be used by the U.S. DOT,
State DOTs, MPOs, or transit agencies when making funding decisions?
Are there any changes to federal procurement requirements that
would facilitate the adequate consideration of resilience and climate
benefits in transportation projects?
Answer. Yes, the inclusion of standards and models that directly
address sustainability and resilience concerns and inform project
selection, funding and implementation should be a part of all types of
projects--and this applies to transportation as well as other types of
infrastructure. Taking such measures makes sense from many different
perspectives--natural resource management, energy policy, and
prioritizing and protecting the large investments made in
infrastructure nationally from extreme events and/or changing
environmental conditions possible with climate change.
The American Society of Civil Engineers (ASCE) expects to publish
the Standard Requirements for Sustainable Infrastructure Standard in
late 2021 through the American National Standards Institute (ANSI)
process. Once it is launched, this standard should be used to better
inform and implement infrastructure development, specifically including
the procurement process associated with infrastructure projects. These
are consensus-based standards designed for transportation projects,
supported by years of scientific and calibrated on actual
transportation projects. Similarly, incorporating or at the very least
incentivizing the use of a broad infrastructure rating system like
Envision from the Institute for Sustainable Infrastructure (ISI) will
help the government ensure that the right projects are being done, as
well as being done right when it comes to sustainable and resilient
infrastructure.
When it comes to transportation, the USDOT and state and local
transportation agencies in particular can also leverage more
specialized tools such FHWA's Infrastructure Voluntary Evaluation
Sustainability Tool (INVEST), and the Greenroads rating system to
ensure that transportation projects are designed for long-term
resilience and adaptability. The National Cooperative Highway Research
Program (NCHRP) through the National Academies of Science
Transportation Research Board (TRB) also expects to publish this year a
guide on Mainstreaming System Resilience Concepts into Transportation
Agencies that was led by WSP USA in collaboration with other
transportation system resilience experts through an NCHRP project and
funding.
It is vitally important to encourage Project Sponsors, such as
local public works agencies, state DOTs and transit agencies, to use
such standards, tools, and guides to monitor and measure
sustainability, resilience, and climate benefits staring from the
initial project planning and development process, through procurement,
construction, and maintenance and throughout the asset lifecycle. For
transportation programs and projects, USDOT can send a clear message to
the project sponsors that their request for funding and approvals will
be evaluated based on evidence that the project has been developed in
accordance with industry benchmarked sustainability, resilience, and
equity standards and considers the entirety of the period when the
asset will be in service. Requiring grant applicants or funding
recipients to meet sustainability and resilience criteria and/or to
design to sustainable and resilient infrastructure standards will lead
to funding ``shovel worthy'' projects that are more sustainable,
resilient, and equitable in their design and delivery, as mentioned in
my testimony.
Further, USDOT does not need to and should not act alone to prepare
the country for a sustainable, resilient, and equitable future.
Infrastructure serves communities and facilitates the economy.
Transportation and infrastructure planning is also intricately linked
with and can impact land use planning and housing policy, amongst other
sectors. Through innovative programs like the Partnership for
Sustainable Communities which brought USDOT together with HUD and EPA,
USDOT has recognized its critical and interdependent role in the future
of the communities in which it invests transportation infrastructure
dollars. Interdisciplinary efforts like these can continue to have a
necessary impact.
Finally, I reiterate that federal procurement policies are a
powerful tool to shape aspects of project selection and design,
including at the state and local levels. The ``power of the purse'' is
an opportunity for the government to establish expectations for project
sponsors seeking the use of federal monies, and the new ASCE Standard
Requirements for Sustainable Infrastructure Standard coming out in late
2021 should be broadly leveraged accordingly to result in more
sustainable and resilient infrastructure projects. Without clear
requirements in the procurement solicitation and evaluation process for
delivering sustainability, resilience, and equity outcomes throughout
the project lifecycle, it is incredibly difficult to construct, operate
and maintain a sustainable infrastructure project and system. ESG
principles (Environment, Social, and Governance) are becoming an
explicit tenet in how the private sector and government conduct their
business and should also be considered during procurement and
throughout the infrastructure project lifecycle.
By requiring project applicants to follow the tenets of such
programs and justify instead why their investments are not sustainable
or not resilient (rather than the other way around, as is done
currently) infrastructure funding allocated today can make a change for
decades into the future. Policies and requirements are powerful tools
for change, and such considerations should definitely be a part of
transportation project decisions moving forward.
Question 2. Mr. Lewis, one of the former Administration's proposed
changes to the environmental review process is intended limit the
consideration of cumulative effects, such as climate change, in the
environmental review process.
Given the cost of climate change to the government and the economy,
do you believe it is appropriate that a NEPA analysis consider the
impact of a proposed project on the climate?
Answer. Yes, it is appropriate and very beneficial to include the
impacts of transportation projects relative to climate considerations
as an element of NEPA. The NEPA process is a powerful, structured
delivery process that has provided a framework for projects for
decades. Explicitly including climate concerns would be beneficial.
Cumulative impacts analysis is a well-understood method for
identifying a project's effects in the context of other project's
effects that has been part of NEPA analyses for decades. Experienced
NEPA practitioners are readily able to assess a project's impacts on
climate change (emissions) through cumulative effects, however federal
agencies can do more to provide guidance on how these assessments
should be prepared. Prior to the September 2020 changes to the
environmental review process, the structure established over many
decades of NEPA provide a basis to further the assessment of cumulative
effects and climate change as well as environmental justice. It is
familiar to NEPA practitioners both from the preparation of NEPA
documents as well as their assessment and affirmation of NEPA records
of decision that underpin agency actions to approve and fund projects.
Improved analysis of a project's climate profile can serve as a
tool for communicating the importance of resiliency and the need to
address climate change head on. This is an area that can be improved
and made more useful as a metric to ensure that climate change and
equity are integral to the decision-making process. CEQ and federal
agencies can provide more specific criteria and methodology guidance to
make these existing elements of NEPA more effective. Additionally, CEQ
and federal agencies can consider encouraging agencies to include
climate change goals and activities in the Purpose and Need statement
for NEPA documents in order to indicate when the project's goals are
oriented around climate action. This framework can introduce documented
requirements for resilience that may not be a part of current baseline
approach methods. As federal agencies reassess recent changes to the
environmental review process, the time is ripe to consider providing
practitioners with additional standards, guidance and tools such as
those identified in response to question number one above to conduct
these reviews.
Question from Hon. Nikema Williams to Tom Lewis, P.E., J.D., National
Business Line Executive for Climate, Resilience, and Sustainability,
WSP USA
Question 3. Mr. Lewis, thank you for sharing WSP's innovative
approaches to a more sustainable future. In your testimony you
mentioned that our national approach to repairing and maintaining
transportation infrastructure must urgently consider new ideas on how
we design, manage, and invest to achieve both resilient and adapted
standards as we transition to a low or net zero carbon economy that
cognitively responds to the impact of carbon and other GHG emissions on
communities.
How are we to re-evaluate existing infrastructure to achieve
sustainability and resiliency that considers equity and social justice
impacts in the design and development?
Answer. Generally speaking, I refer you to my answer to question
number one above from Chairman DeFazio regarding the incorporation and
leveraging of modern standards, systems, guides and other tools to
better select, fund and implement sustainable and resilient
infrastructure projects--specifically and importantly including during
procurement activities.
More specifically in answer to ``the how'' question, the key will
be to broaden the considerations of investment in infrastructure to
consider the entire period when the asset will be in place, its
operation, the maintenance and repair requirements, and how these
considerations should drive different decisions in the planning or
design phase. This should include how future changes in community,
economy, or technology may be considered now to ensure appropriate
investments today. This broader, future oriented, perspective is not a
part of traditional practices, so is the high-level basis of what needs
to change. We should no longer be looking at historical conditions, or
past ideas, to guide investments. We should be looking to implement new
methods that enable better decisions.
Importantly, potentially affected communities should be engaged at
the beginning of project planning to inform the planning and
implementation process regardless of the project type. Equity, when
implemented effectively, is more enabling than traditional
environmental justice perspectives that focus on the proportionality of
impacts. Equity in investments should be toward providing equal
opportunities to transportation service, regardless of income level or
work type/location.
With respect to achieving sustainability and resilience through
repairing or maintaining existing infrastructure, we need to find ways
to make a better case to provide adequate repairs to infrastructure
that is failing. Federal investments in infrastructure have often been
followed by the imposition of maintenance requirements on states and in
many cases these states are very resource constrained and unable to
keep up with the maintenance backlog. As we work towards ensuring a
state of good repair, considerations of how to improve and modernize
the aging infrastructure should include whether there are opportunities
through these programs to also make improvements that address past
environmental or social harms as well as address future climate change
impacts and make facilities more resilient to damage/impacts, thus
limiting the disruption costs to users. Every project that is begun to
restore or replace existing infrastructure should evaluate
opportunities to promote a more equitable distribution of project
benefits and be designed to withstand the challenges of rising seas,
stronger storms, and more extreme weather.
Questions from Hon. Michael Guest to Tom Lewis, P.E., J.D., National
Business Line Executive for Climate, Resilience, and Sustainability,
WSP USA
Question 4. Research has shown that the demand for travel has grown
due to urban sprawl and low fuel costs that have allowed individuals to
work in urban centers but commute long distances to town. We have
discussed expanding transit systems and more efficient pedestrian
travel to account for that. But as we know, there are also rural
communities that require travel to get to school or work in their rural
communities. We have discussed a proposed Vehicle Miles Travelled (VMT)
Tax to promote more efficient collection of highway users in fees.
Rural citizens are going to be the most against this and
disproportionately affected in the short run.
Would you be able to discuss how a VMT may be beneficial to rural
Americans?
Answer. The basic premise of a VMT tax is to delink transportation
funding only from a gas tax and instead distribute costs to all users
equitably for those users of the highway system. Highway drivers that
use only electric powered vehicles, as an example, are providing no
revenue to maintain the highway network.
To your question, you should note that a study conducted by a group
called RUC West analyzed the financial impacts of a road usage charge
(RUC) for urban and rural drivers in eight western states and found
that rural drivers will likely save money under RUC schemes or a VMT
tax. Using estimates of vehicle-miles traveled (VMT) by geographic
area, vehicle registrations, and gas tax revenue data, researchers
determined the per-mile fee required to potentially replace current
state gas tax revenues. RUC West research projects that, on average,
rural households will pay 1.9%-6.3% less and urban households will pay
0.3%-1.4% more state tax in a RUC system than they currently pay in
state gas tax. Ranges reflect the differences from state to state.\1\
---------------------------------------------------------------------------
\1\ Financial Impacts of Road User Charges on Urban and Rural
Households (RUC West in cooperation with ODOT).
---------------------------------------------------------------------------
These findings are due to two key factors:
1. While rural residents will travel longer distances to reach
urban areas, they tend to chain trips together. Meaning, a rural
resident will combine a trip to the grocery store, the pharmacy,
doctors appointments, etc. into one single trip as opposed to urban or
suburban residents who will take each of those trips independently. The
rural driver will actually travel less distance than their urban or
suburban counterparts due to chaining trips together.
2. Rural drivers tend to drive less fuel-efficient vehicles.
Should states who are exploring VMT programs choose to provide a credit
to all motor fuel taxes paid, then rural residents may actually pay
less in a VMT than their urban or suburban counterparts.
In general, I believe a VMT tax is a way to more equitably
distribute highway costs to all users and should be a consideration for
funding.
Question 5. Across much of rural America, there are closed roads
and bridges that are creating longer trips and commutes for families,
drivers, and delivery systems. The longer these trips are, especially
compounded by something like a heavy logging area that is running
trucks constantly in and out of that area, or daily parcel services, or
school buses, the more emissions occur.
How would long-term and robust investment in our roads and bridges
across rural America best address emissions in rural America?
Answer. The high costs of maintaining the highway system is
requiring some infrastructure owners to make hard decisions on managing
assets, including closure of roads and bridges that are expensive to
maintain or repair/replace. These closures are limiting access,
increasing mileage driven, increasing costs for those having to drive
longer distances, and causing an increase in emissions due to the
longer trips. The entire situation imposes costs that are undesirable.
Better long-term investments in roads and bridges, including the
leveraging of private investment to supplement and be synergistic with
government funding, could benefit communities and business in rural
areas and reduce emissions, in three primary ways. First, roads and
bridges maintained at a state of good repair are safer and more
efficient for vehicles to drive on, thus reducing overall fuel
consumption. Secondly, investments made in roads and bridges with
improved resilience perspectives as part of design and implementation
requirements will reduce the likelihood of outages and requirements for
costly repair. Finally, fully including sustainable practices as part
of design and implementation would help facilitate better use of
limited natural resource, and reduce effects including construction-
related emissions and other environmental impacts as described in my
testimony regarding California High Speed Rail.
Wise infrastructure investment could reduce/eliminate the
requirements for facility closure, reduce costs associated with
associated detours, and provide for more sustainable approaches to
project delivery and ensure a more resilient future for assets.
Questions from Hon. Scott Perry to Tom Lewis, P.E., J.D., National
Business Line Executive for Climate, Resilience, and Sustainability,
WSP USA
Question 6. I sincerely hope this hearing serves as a wakeup call
to the American people about the degree to which our Nation's political
and corporate elites are marching in lockstep behind President Biden's
Green New Deal--and promise to electrify the transportation sector
against the will of the American consumer.
If this cooperative effort is to succeed, it will cause great harm
to America's prosperity and security.
While it appears nearly everyone testifying before the Committee
today--and much of the broader corporate community--has accepted and
embraced the radical, whole-sale approach to rapidly electrify our
transportation sector, historical and recent consumption trends
indicate that your consumers--and our constituents--don't share this
warm embrace.
These concerns will grow to disdain as the costs of all consumer
goods continues to skyrocket.
The near universal acceptance that electrification is inevitable
must be met with the proper historical context--the electric vehicle is
NOT some emerging technology that will breakthrough if enough taxpayer
money is spent.
As a matter of fact, electric vehicles are as old as motorized
vehicles themselves.
In 1896--yes, eighteen-ninety-six--Thomas Edison wrote to Henry
Ford admitting the electric vehicle had been rendered obsolete by the
cheaper, superior alternative, the internal combustion engine:
``Electric cars must keep near to power stations. The storage
battery is too heavy . . . Your car is self-contained--carries
its own power plant--no fire, no boiler, no smoke and no steam.
You have the thing. Keep at it.''
125 years after this exchange, EVs are still plagued by largely the
same deficiencies relative to ICEs--a lack of range, higher costs, and
a lack of battery capacity per pound.
More recent concerns about battery life-span, the diminished range
of aging batteries, and the propensity for aging batteries to erupt in
flames add to consumer weariness.
Until these fundamental issues are resolved, American consumers
will not adopt electric vehicles voluntarily as demonstrated by EV's
anemic market share and the continual failure to meet projected sales
figures.
At the height of the Obama administration's taxpayer handouts for
EV companies, he predicted there would be 1 million EVs on the road by
2015--a figure that wasn't reached until the end of 2018.
Over the past decade, the EV industry received $43 billion in
federal subsidies and tax incentives to manufacturers and consumers--
plus state and local incentives--and electric vehicle sales made up
only 1.9 percent of US retail car sales in 2020.
Throwing helicopter money at charging infrastructure fails to
rectify these underlying issues and thus will not spur widespread
voluntary adoption by consumers.
Can anyone please explain to my constituents:
How this is a responsible use of their tax dollars; or
Question 7. What is so unique about the EV sector that fosters the
unfounded belief that central planning will work this time when every
previous attempt has failed?
Answer to questions 6 & 7. As an infrastructure and planning firm,
we work in the best interest of the communities we work for and respond
to current conditions while also remaining at the leading edge of our
industry. We do not establish policies, or create the market, we merely
help to facilitate the needs of the communities we serve and help to
provide for a sustainable, resilient, and efficient economy.
This has been the case from the beginning as we helped to develop/
implement national transit and highway systems as they were put in
place to serve the citizens based on the best technology available at
that time. We do see indications of a need to adjust the systems put in
place to accommodate petroleum powered vehicles and find ways to create
similar infrastructure for developing technologies, like electric
vehicles or hydrogen fueled systems, that seem to be growing in
interest and market share. The commitment of major US vehicle
manufacturers to expand the roll out of electrical vehicles into the
future seems to indicate the need for a response.
The transition to better EV infrastructure, bolstered by federal
policy support suits both needs as identified in your two questions.
First, the rapid deployment of EV infrastructure supports this
developing and expanding technology, leads to reduction of particulate
pollutants and greenhouse gases and has intangible public health and
environmental quality benefits that cannot be achieved through the
continued use of ICE vehicles. So, I believe it to be a responsible use
of tax dollars.
The automobile industry has indicated its commitment to
electrification, which is a different condition from the past,
unprecedented in fact. Most recently, GM released a commitment to only
sell zero emission vehicles by 2035. Federal policies and programs that
support this transition will be bolstering an industry with real
momentum and providing a cleaner and healthier environment for future
generations. The market is changing, the provision of a support network
through targeted infrastructure spending would indicate a path to
success.
Question from Hon. Peter A. DeFazio to Charles Hernick, Vice President
of Policy and Advocacy, Citizens for Responsible Energy Solutions
Question 1. Mr. Hernick, your testimony supports provisions
included in the Senate Environment and Public Works Committee's
proposed Carbon Reduction Incentive Program and alternative fuel
infrastructure grants, along with the Republican-proposed resilience-
focused ``PROTECT'' grants. The House-passed bill H.R. 2 includes
similar provisions on carbon reduction, alternative fuel corridor grant
fueling, and infrastructure resilience.
Would you encourage the Republicans on the Committee to support
those similar efforts in the House?
Answer. Yes. As noted in my written and previously submitted
testimony. The Promoting Resilient Operations for Transformative,
Efficient, and Cost-saving Transportation (PROTECT) Grant Program (Sec.
7001 of H.R. 7248 STARTER Act; Sec. 1407 of S. 2302 ATIA) would allow
states to make resiliency improvements and help protect roads and
bridges from natural disasters such as hurricanes, floods, wildfires,
and mudslides. CRES supports this grant program as a good example of
cooperative federalism, which is a hallmark of American environmental
and transportation policy. The federal government can improve
resiliency outcomes by empowering states and municipalities to make
locally appropriate infrastructure investments.
Questions from Hon. Michael Guest to Charles Hernick, Vice President of
Policy and Advocacy, Citizens for Responsible Energy Solutions
Question 1. Research has shown that the demand for travel has grown
due to urban sprawl and low fuel costs that have allowed individuals to
work in urban centers but commute long distances to town. We have
discussed expanding transit systems and more efficient pedestrian
travel to account for that. But as we know, there are also rural
communities that require travel to get to school or work in their rural
communities. We have discussed a proposed Vehicle Miles Travelled (VMT)
Tax to promote more efficient collection of highway users in fees.
Rural citizens are going to be the most against this and
disproportionately affected in the short run.
Would you be able to discuss how a VMT may be beneficial to rural
Americans?
Answer. CRES does not support a Vehicle Miles Traveled tax. Annual
odometer readings would be vulnerable to rollback devices or
manipulation changing a car's mileage readout. Alternatively, using a
GPS tracker to monitor the distance a car travels would be an invasion
of privacy by the Federal government. Both approaches would be a
logistical nightmare to implement on all cars across the country every
year.
Question 2. Across much of rural America, there are closed roads
and bridges that are creating longer trips and commutes for families,
drivers, and delivery systems. The longer these trips are, especially
compounded by something like a heavy logging area that is running
trucks constantly in and out of that area, or daily parcel services, or
school buses, the more emissions occur.
How would long-term and robust investment in our roads and bridges
across rural America best address emissions in rural America?
Answer. Investing in infrastructure is an investment in America.
CRES believes Congress should leverage private investment in clean
energy with public infrastructure and incentives--not grow government
into sectors traditionally led by the private sector and states. To
that end, earlier this year our sister organization CRES Forum ran a
multi-million campaign called: Let's invest in US.\1\ We have also
prioritized specific infrastructure priorities in our recommendations
from the 117th Congress.\2\
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\1\ See online at: https://letsinvestinus.com/
\2\ Available online at: https://citizensfor.com/wp-content/
uploads/2021/02/CRESO-0026-
PC-US-CST-December-2020-Retainerver43.pdf
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Simply keeping roads and bridges in good condition is in itself a
way of reducing emissions. According to a 2019 study led by Rutgers
university, keeping roads and highways in good condition with
preventive maintenance can reduce emissions by up to 2 percent; save
drivers between 2 and 5 percent because of lower fuel consumption and
vehicle maintenance and repair costs; as well as help transportation
agencies cut spending by 10 to 30 percent.\3\
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\3\ Available online at: https://cresforum.org/climate-policy-
directives/
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Questions from Hon. Scott Perry to Charles Hernick, Vice President of
Policy and Advocacy, Citizens for Responsible Energy Solutions
Question 3. I sincerely hope this hearing serves as a wakeup call
to the American people about the degree to which our Nation's political
and corporate elites are marching in lockstep behind President Biden's
Green New Deal--and promise to electrify the transportation sector
against the will of the American consumer.
If this cooperative effort is to succeed, it will cause great harm
to America's prosperity and security.
While it appears nearly everyone testifying before the Committee
today--and much of the broader corporate community--has accepted and
embraced the radical, whole-sale approach to rapidly electrify our
transportation sector, historical and recent consumption trends
indicate that your consumers--and our constituents--don't share this
warm embrace.
These concerns will grow to disdain as the costs of all consumer
goods continues to skyrocket.
The near universal acceptance that electrification is inevitable
must be met with the proper historical context--the electric vehicle is
NOT some emerging technology that will breakthrough if enough taxpayer
money is spent.
As a matter of fact, electric vehicles are as old as motorized
vehicles themselves.
In 1896--yes, eighteen-ninety-six--Thomas Edison wrote to Henry
Ford admitting the electric vehicle had been rendered obsolete by the
cheaper, superior alternative, the internal combustion engine:
``Electric cars must keep near to power stations. The storage
battery is too heavy . . . Your car is self-contained--carries
its own power plant--no fire, no boiler, no smoke and no steam.
You have the thing. Keep at it.''
125 years after this exchange, EVs are still plagued by largely the
same deficiencies relative to ICEs--a lack of range, higher costs, and
a lack of battery capacity per pound.
More recent concerns about battery life-span, the diminished range
of aging batteries, and the propensity for aging batteries to erupt in
flames add to consumer weariness.
Until these fundamental issues are resolved, American consumers
will not adopt electric vehicles voluntarily as demonstrated by EV's
anemic market share and the continual failure to meet projected sales
figures.
At the height of the Obama administration's taxpayer handouts for
EV companies, he predicted there would be 1 million EVs on the road by
2015--a figure that wasn't reached until the end of 2018.
Over the past decade, the EV industry received $43 billion in
federal subsidies and tax incentives to manufacturers and consumers--
plus state and local incentives--and electric vehicle sales made up
only 1.9 percent of US retail car sales in 2020.
Throwing helicopter money at charging infrastructure fails to
rectify these underlying issues and thus will not spur widespread
voluntary adoption by consumers.
Can anyone please explain to my constituents:
How this is a responsible use of their tax dollars; or
Answer. CRES does not support the Green New Deal. The Green New
Deal is a ``greatest hits'' of liberal policy that all intersect at
climate change that would dangerously expand the reach of government.
Conservatives can lead a principled approach to climate change. To that
end, our sister organization CRES Forum, has put forward Eight
Conservative Climate Policy Directives to inform better, lasting and
significant policies that will protect the planet and our future
economic growth for generations to come.
As noted, corporate America is quickly moving forward on climate-
friendly practices, which is a testament to their read of the current
market conditions. Government intervention in the economics of those
markets would inevitably skew them and make it much more difficult for
business leaders to make well-informed decisions.
Question 4. What is so unique about the EV sector that fosters the
unfounded belief that central planning will work this time when every
previous attempt has failed?
Answer. CRES does not support central planning by the federal
government. The transportation sector is the largest source of domestic
greenhouse gas emissions and is one of the most difficult to
decarbonize. Therefore, it requires an all of the above approach
including increasing fuel efficiency by scaling up innovation instead
of imposing federal mandates, better utilizing alternative fuels, such
as hydrogen, and electrification. A singular focus on electric vehicles
by government is not advisable. CRES supports federal policy in all
three categories: efficiency, alternative fuels, and electrification.
Today, EVs account for a small percentage of total vehicle sales in
the U.S. However, EVs are more cost effective each year, their range is
improving, and the industry is working hard to communicate their
benefits to the public on a voluntary basis. These trends should be
encouraged.
It is worth nothing that these benefits do not apply only to urban
settings. While there is an initial cost involved in the purchase of a
new electric vehicle, over the long run, rural households are actually
expected to enjoy higher savings than urban households, given that they
drive and repair their vehicles more often.
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