House Water and Power Subcommittee, Chairman's Opening Statement, Legislative Hearing on H.R. 460 and H.R. 2664
House Water and Power Subcommittee
Chairman’s Opening Statement
Legislative Hearing on H.R. 460 and H.R. 2664
April 17, 2012
The subcommittee sits today to hear two bills, one removing government impediments to development of one of the cheapest and cleanest forms of electricity generation and one proposing more government subsidies for one of the most expensive forms of water delivery.
We have first, HR 460, by Congressman Chaffetz of Utah. It removes a Catch-22 in federal law that makes development of 50 megawatts of hydropower on a federal irrigation facility impossible. This self-defeating roadblock is a requirement that before a hydro power generator can be placed on this facility, the developer must pay the sunken costs for the facility itself. I am a staunch defender of the beneficiary pays principle of financing federal water and power projects – which means that the beneficiary pays for the price of the project and NO MORE. In this case, the federal policy is to require that a hydro-power add-on pay for the entire facility – in this case, $161 million. This requirement renders the project cost-prohibitive. It prevents another 50 megawatts of power – enough for 50,000 homes – and denies the nation the nearly a half-million dollars of new money that the project would pay every year to the Federal Treasury.
It is akin to a family renting out a room, but first requiring the renter to pay off their mortgage. Then they are shocked just shocked that nobody wants to rent from them. The family is no further along in paying off its mortgage and has denied itself the rental income that a renter would otherwise provide.
I view this bill as taking another step to remove impediments in law that are keeping us from harnessing our nation’s vast hydropower resources. The Subcommittee has focused on removing federal obstacles to hydropower development with this bill, Congressman Tipton’s H.R. 2842 and Congressman Smith’s H.R. 795 and it will continue to do so.
Also today we will hear H.R. 2664 by the ranking member, Congresswoman Napolitano. It provides additional federal subsidies for water desalination research, wind and solar promotion and public outreach. It reflects a lot of what is wrong with our federal policy on water and energy development.
Desalination of seawater or brackish water dates back to the second century AD. It makes economic sense in extremely arid and remote regions where water cannot be imported. There’s a market for it. Ships, remote resorts, and remote desert outposts have relied on it for centuries. I remember in 1963 as a young child visiting the island of Aruba and having it impressed on me that we were drinking distilled seawater and that it was tightly controlled because it was so expensive. That would not have been the case in a rain forest.
Because a market exists for this process, private industry invests between $100 million and $150 million a year for research and development according to the National Academy of Sciences. This bill would add – pardon the pun – a drop in the bucket – $2 million a year for government to do the same thing.
Well, almost the same thing. One of the aspects of this bill is integration of renewable energy – that is, wind and solar -- and the other is public outreach – which is Washingtonese for “political self-promotion.”
The Congressional Research Service has pointed out that “current desalination processes are already operating close to the theoretical minimum energy required.” The reason desalination is so expensive is that it is highly energy dependent. What does this bill do? It attempts to graft onto this highly energy dependent process the most expensive forms of electricity generation that we have yet invented: wind and solar. This is lunacy. It bespeaks of political – not scientific or practical – objectives.
Which brings us to funding public “outreach” programs. That is purely political – although no doubt necessary to combat public outrage when taxpayers see how their money is being squandered.
Even if the measure were for pure basic research, it begs the question, why should taxpayers subsidize the R&D budgets of some of the biggest companies in the country – G.E. for example – and why should the taxpayers of Tacoma, Washington pay for water delivery systems that cannot conceivably benefit them in such a water-rich region?
The bottom line was well expressed in testimony from Mr. Crews of the Competitive Enterprise institute: “a viable technology needs no subsidy and a non-viable technology probably can’t be helped by one.”
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