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Murphy Touts Region's Energy Resources as Key to Revitalizing Economy at the Energy, Inc. Event
(Targeted News Service Via Acquire Media NewsEdge) WASHINGTON, Sept. 2 -- Rep. Tim Murphy, D-Pa. (18th CD), issued the following news release:
Speech
Pittsburgh Business Times' Energy, Inc.
Congressman Tim Murphy
August 17, 2010
Well, good afternoon. Thank you for this opportunity to be with you to discuss an immensely important issue for our region, and for our nation.
You know, you cannot talk about energy without understanding our economy. Both impact each other and both will be the benefactor or the undoing of each other, depending on how we do all this.
So before we drill down on energy issues, if you pardon the phrase, let's drill down into the economy and what's taking place in our nation and the impact upon decision making, locally and in Washington.
Uncle Sam's credit card is maxed out--and beyond, and the creditors are calling. And the numbers of the credit card statement don't lie. We've got a record deficit for this year of $1.6 trillion. We have massive borrowing from China of $900 billion, which then impacts upon policies when China threatens to call in its Treasury bonds. We have a massive trade deficit with China, some $280 billion, and a $13 trillion national debt.
Since 2008, government spending as a share of the GDP has gone from just under 20 percent to more than 25 percent of GDP, and these are historic averages we have not seen since World War II.
Can we continue in this manner?
Federal Reserve Board Chairman Ben Bernanke said a couple of months ago, "the federal budget appears to be on an unsustainable path." And economist Ken Rogoff, who wrote "This Time Is Different," said that banking defaults tend to be followed by nation defaults that tend to be followed by emergency monetary responses that result in uncontrolled inflation. Nations such as Greece, Hungary, Spain, Italy, and Ireland now face sovereign debt crises. They've responded like the UK with large spending cuts, and urged the United States at the G-20 to do the same, and we've responded with more spending.
So as the amount of debt takes up a larger share of our economy, Treasury bondholders - including other countries such as China - become concerned that the United States cannot meet its obligation at current interest rates. Today, we spend almost 5% of the federal budget on interest payments in service to debts. The Congressional Budget Office says that could increase to 10% of our entire economic output by 2035. By comparison, Greece is paying about 12.5% of its GDP toward interest. And in 2035, we'll also be putting away about 16% of our economy towards mandatory spending like Medicare and Social Security. Interest rates will rise, as it will cost more to borrow money, and we will see greater inflation, putting our country in greater financial peril. And more money going to pay off debt means less money for domestic investment.
We have $2.2 trillion in immediate infrastructure needs. The stimulus bill put less than $80 billion towards roads and bridges, actually more like less than $30 billion. Less money for these projects means the later replacement costs rise each year. It means less jobs, lower income growth, economic growth, and then less tax revenues. So despite the attempt to rewrite this fairy tale, the public caught on real quick, sees this for what it is and knows that with record deficits, and 15 million Americans out of work, that this fairy tale will not leave anyone living happily ever after.
So, where are those elusive jobs? Businesses say they are worried about the looming increases in regulatory compliance, taxes on income, Medicare, health care, capital gains, dividend income, and death itself. And they are hesitant to invest.
Why is business keeping $2 trillion in capital on the sidelines?
Well, here's something else to ponder that is happening in Washington. There are 191 federal rulemakings which will kick in next year, each with an estimated annual cost to our economy--each with an estimated annual cost to our economy of $100 million or more, and a number of these rulemakings will cost each $1 billion or more. The financial regulatory reform bill has more than 400 new rules that will fill thousands of pages, and won't even be fully implemented for years. The new healthcare law creates more than 130 new agencies and federal boards to remake one-sixth of the economy. The Administration's climate change czar, Carole Browner, says that Congress should use the lame-duck session to pass a cap-and-trade bill. And Senate Budget Chairman Kent Conrad suggests that it could be "one of the most significant lame-duck sessions in the history of the United States." And all this will take place after the voters have spoken, whatever that might be.
Regulatory uncertainty is part of the reason, and another is the pending hikes in taxes. The American tax burden since January 2009 has increased by $670 billion, that's more than $2,000 per person. And all taxpayers, from the lowest to the highest incomes, will pay more for goods and services and taxes. The deduction for married couples will go away, the child tax credit, taxes on investmentsand more. Capital gains taxes will go from 15 percent to 20 percent. And the list goes on and on. So it's no wonder that businesses are saying that we're not sure where this economy is going, we're not sure what we can do, so let's hold on to our cash, because we don't know what direction we are going in.
When consumer confidence is down, and employer confidence is shaky, this is not the basis of an economic recovery. Did you know that next year, for the first time in 100 years, China is going to overtake us as the world's biggest manufacturer? Manufacturing jobs, like so many other jobs are going to countries where the costs are lower, the regulations are fewer, and the opportunities are greater.
Now there's been lots of discussion in Washington, perhaps that we should have more tariffs on foreign goods. That's not going to work. We can put some clauses into bills, like I put into the stimulus bill, to have some Buy American clauses which helps in some ways to reduce the bleeding. But it's not the medicine that's going to lead to the recovery or the cure for this patient.
Where are the jobs?
Well, there is actually tremendous hope, and its right here in our region. Years ago, many of us who would attend those annual meetings for the Allegheny Conference, filled with idealistic and pleasant promotions about what we can do here in this region to get it going. And as we were searching for ideas and ways, a lot of great ideas came forward. What we could do with our schools, what we could do with our communities, how we can film more movies here, increase tourism, or be like Atlanta. Great ideas, but none which played up to our strengths, and none which truly ramped up jobs to meet what we could be.
Our strength lies in who we are. And our strength lies in what we've always been. We're not Hollywood on the Mon and we're never going to be Disney World. We are Pittsburgh, we're proud of it, and we're champions because of what we have and what we do with it.
We know that we are the energy capital of the world, although we say that in quiet tones, not quite sure of ourselves yet because we are not sure what we are going to do with that. But, we will continue to be, because of new energy developments in many sectors of innovation, resources, conservation, transportation, and research. If we do this right, energy will drive job creation for years to come and lead our nation--lead our nation, to a clean and independent energy future. Doing it wrong means stagnation, loss of jobs, loss of population, and continued withering of our nation's vine. Make no mistake, there is a high likelihood that we can do it wrong if policies from the city, the county, the state capitol, and Washington DC don't take into account the costs and outcomes of not reviewing this for its global and national economic impact. We can't be shortsighted.
Let's look at the opportunities and hurdles. We know that Pittsburgh sits atop a 250-year supply of coal, one of the most valuable natural resource stockpiles in the world. Pennsylvania's coal industry generates more than 41,500 jobs and $7.5 billion in economic output. But, there are growing forces, put into legislation coming up for votes in Washington, which call for the shutting down and elimination of coal fired power plants and stopping this industry. Some would be happiest if our mines were closed completely.
Now we also know that the first commercial nuclear power plant was developed here, and the leading company in the nuclear power industry, Westinghouse, which added thousands of jobs in just the last few years and now employing over 4,000 people in an industry, in an office that five years ago had 250 employees in Monroeville. But there are forces in Washington and around this nation that don't want us to build more plants, don't want us to store spent nuclear fuel in Yucca Mountain--and quite frankly don't want you to store it anywhere, and oppose reprocessing nuclear fuel, whereas other nations will do that.
Third point, the Marcellus Shale. You're all familiar with it. Natural gas producers spent $4.5 billion in Pennsylvania last year, creating $390 million in state and local tax revenues and more than 44,000 jobs, and its growing rapidly. They are projected to add another $18 billion to the state's economy and $1.8 billion in state and local tax revenues in the next 18 months, and be up to 200,000 new jobs, according to the Penn State study, by the year 2020.
These three energy resources alone provide us with an unprecedented opportunity to revitalize communities impacted by job losses, while furthering our nation's progress towards energy independence, but only, only if we pursue policies that support their responsible and environmentally sound development. I don't want, and I'm sure you don't want, pollution billowing out of our smokestacks. Been there, done that, didn't like it. We don't want pollution in our water; we saw what that used to be like in Pittsburgh. But shutting down coal-fired power plants, blocking nuclear power, and putting a moratorium on natural gas drilling, is not the answer.
Look at our neighbor, New York. They're bankrupt, and they have put a moratorium on drilling for Marcellus Shale natural gas. Look at what other states around this country are facing in terms of huge budget shortfalls that they then come to Washington DC, and say could you provide us with some bailout money because we can't do it on our own. And yet, they sit atop of gold. Look around here more closely. Huge areas of vacant lots and abandoned brownfields all around Allegheny County and our region sit atop these rich fields of natural gas. Compare it to areas like Fort Worth, TX, where you see drilling rigs in the downtown area and their airport. And note how Fort Worth, TX enjoys record-breaking economic and job growth.
Our own Pittsburgh Airport, all 9,000 plus acres of it, could provide enough income to build infrastructure upgrades at the airport, pay off the debt, and lower gate costs. Fort Worth Airport already does this. Why don't we?
Our county parks, some 12,000 plus acres, also sit atop this wealth. They sit atop of it with dilapidated shelters, condemned buildings, and broken roads. We need to hire scores of workers to both maintain our parks--polish up this bright emerald, and hire the building trades to get our parks back to where they can be. That's a lot of jobs, but will we do it?
We should embrace our abundant resources, not abandon them, and figure out ways to increase their use in more effective, efficient, and environmentally sound ways.
Look at our local researchers at Pitt, Carnegie Mellon, WVU, Penn State, the U.S. Department of Energy's National Energy Technology Laboratory in South Park. They're all working on innovative and exciting new tools that will enable us to produce cleaner energy in the future. In a presentation about clean coal technology, one CMU professor explained that the government must "[p]rovide 'carrots' to incentivize technological change and innovation." Recently, the U.S. Department of Energy announced it would provide $1 billion in stimulus money to retrofit a shut-down coal plant in Illinois, hopefully resulting in the world's fist commercial-scale power plant using technology that burns coal in pure oxygen instead of the air, making it easier to capture and store almost all of its CO2. This project will create 2,000 jobs, in itself, in Illinois, including about 1,000 in the manufacturing sector. Will we do it here?
Some criticize investment in clean coal technology; they argue that burning coal cleanly cannot be done. Now, I wasn't around at this time, but I read about the Wright Brothers when they were told that they would never get that bicycle contraption off the ground, and scientists were told that landing on the moon was "the wrong stuff" and the stuff of science fiction. Like those who achieved these great historical feats, like those who rose to the demands of the occasion, we should be excited about - not intimidated by, not shut down by - the huge but conquerable scientific challenge posed by the development of clean coal technology. I like to see the issues of clean coal technology as one of the greatest scientific and research challenges of our generation. We should and must invest in cracking the code to clean coal, not abandoning our opportunities and our dreams with shortsightedness.
Unfortunately, many in Washington promote laws that will impede the development of our energy supplies and threaten the ability of our energy producers to create jobs. The U.S. Environmental Protection Agency proposes to aggressively regulate fossil fuel emissions from a variety of sources, including coal-fired power plants--and perhaps primarily coal-fired power plants, and to label coal combustion byproducts, or "coal ash," as a "hazardous waste" for the first time, jeopardizing its use in cement, in drywall, and other commercial products. By putting almost 200 permits in Appalachia for surface mining on hold for "enhanced review," the EPA imposed a de facto moratorium on coal mining in the region, threatening the production of over 2 billion tons of coal supporting nearly 18,000 new and existing jobs and more than 80 small businesses.
Attempts by my colleagues in Congress and the Adminstration to impose arbitrary limits on carbon emissions from fossil fuels like coal and natural gas are equally disturbing. Not in the ends that they seek, but in the means they propose to do this. Its called "cap-and-trade", and this is how it works. Many of you will recall that popular 1990s sitcom "Seinfeld," and remember when the Seinfeld folks were sitting around the NBC studios in one of the episodes, trying to explain what the show would be about, George Costanza and Jerry Seinfeld were describing it. And they said it was a show about "nothing." I like to call cap-and-trade legislation "Seinfeld's law," for reasons that will become clear in a minute. Cap-and-trade legislation would create a market for trading so-called carbon credits between companies as offsets to be used to meet carbon limits imposed by law. A company that creates carbon from their smokestacks can buy credits from a company that does not. In reality, these credits represent nothing, which is why I call them "Seinfeld credits," because no actual goods or services are exchanged.
For example, Company A, emits carbon, and they would then say "how do we reduce our carbon levels to reach the levels that the government says we should have, or else have taxes imposed on us?" So they seek out these "Seinfeld credits" from Company B, which does not emit carbon, and perhaps has no smokestack at all, in order to offset its carbon emissions to comply with the law. So then Company A would go to the Chicago Mercantile Exchange and the New York Mercantile Exchange and bids, and then the highest bidder gets to buy these "Seinfeld credits" and then subtract the "nothing" from their "something" and end up with something tolerable. Nothing has changed. Except that if a company decides it costs too much in taxes or fines in purchasing these credits, to create a product, they will move those jobs overseas to some other country which does not do the same thing. Have we really cleaned the air in doing so, by just using the stick approach, and shouldn't we be doing something else to create incentives for companies to move towards this, instead of just threatening them with higher costs, which are then passed on to consumers.
The sad outcome of this is that, on the one hand it produces markets for some new products and motivates companies towards conservation, it pulls money away from employers that could be investing in innovation and productivity and creating jobs. Other countries that will not comply get new factories making the products cheaper, but not cleaner overseas. And as Shakespeare warned us, "nothing will come of nothing," as Spain found out when it lost two jobs for each new job created under "cap-and-trade." All the while, commodity traders on Wall Street and elsewhere will make billions literally trading "nothing" back and forth. I'm telling you, try and put a carbon credit in your wallet, in a bank, in your mattress, or in Fort Knox. It can't be done. My concern is that it doesn't clean the air, land, and water; it doesn't create jobs we need, it doesn't solve our problems.
Let me offer a different solution. This is a bill referred to, that I introduced, a bipartisan bill with several of my colleagues, HR 2227, the American Conservation and Clean Energy Independence Act. It would provide between $2.2 trillion and $3.7 trillion from new offshore oil revenues to clean our air, land, and water, construct new nuclear and clean coal power plants, and fund renewable energy and energy efficient projects. This would be the largest infrastructure investment in our country--any country, anywhere, anytime, and would directly create as many as 3 million jobs over a 20 year time span. Imagine what it would be like for businesses to not be thinking of the next 90 days shovel-ready, or the next two year election cycle. But you say how can we plan for the next 20 years? Much like many construction companies as they saw the whole Eisenhower project moving forward, for our interstate highways, they could plan for, hire, and buy equipment because they knew what was coming in the long run.
Our bill would direct as much as $220 billion for research, development and construction of clean coal power plants, as much as $110 billion for guaranteed loans for nuclear power plants and reprocessing nuclear fuel. It would also add funds for America's crumbling water and wastewater infrastructure. Construction of 100, 500 Megawatt clean coal power plants, by the way, creates about 400,000 construction jobs and 120,000 permanent jobs. Building 52 nuclear reactors would create 350,000 new jobs in industries including nuclear, concrete, steel, electrical, the list goes on. For every $1 billion invested in wastewater projects, as many as 35,000 jobs are created, meaning this sector would see over 250,000 new jobs from this bill's investments.
Unlike "Seinfeld's law" and similar proposals, HR 2227 would create millions of new jobs, not destroy or export them. It funds the bridge to America's energy future. It accelerates the development of new domestic energy sources, develops renewable resources, cleans up coal, invests in our university research at levels we have never even dreamed of. We can invest in new green building technologies, retrofit our old buildings, design new ones, create alternative fuel vehicles, expand efficient public transit, clean up our waterways in the Mississippi basin, the Great Lakes, the Everglades, San Francisco harbor, in the Chesapeake, all at once, and we don't have to borrow a penny from China, send a dollar to OPEC--or to the Taliban, raise taxes, or take it from our children.
And this is the capital; this is the center, right here. With our diverse and prosperous natural resources, dedicated workforce, and demonstrated ingenuity, Southwestern Pennsylvania, with Pittsburgh at its heart, has the chance to not just repair our economy, not just take us out of the debt and deficit, but to actually thrust us forward with more energy, ingenuity, and employment than the Apollo Project and the Manhattan Project, multiplied several times over.
We must cultivate, not abandon, the resources that hold the promise of leading our region and our nation to a better tomorrow, while always striving to improve our ability to develop them in a safe and environmentally sound way. We all hold the future in our hands, and it is a bright and prosperous and--yes, a clean energy future. It is ours if we want it. And I'm assuming you all do. But can we get Washington and every one else to move in that direction? We can, but will we? My question is, what are we waiting for? It's time. Thank you.
TNS MJ88-JF78-100903-2984685 StaffFurigay
(c) 2010 Targeted News Service
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