SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 731 words

COMMITTEE: HOUSE WAYS AND MEANS

HEADLINE: ENERGY AND TAX LAWS

TESTIMONY-BY: NANCY L. JOHNSON, REPRESENTATIVE

BODY:
June 12, 2001

Statement of the Hon. Nancy L. Johnson, M.C., Connecticut

Before the Subcommittee on Select Revenue Measures

of the House Committee on Ways and Means

Mr. Chairman and Members of the Subcommittee, thank you for holding this important energy hearing. I firmly believe that a national energy policy must include promotion of alternatives to traditional energy sources. Doing so will reduce our reliance on imported oil, give consumers greater choice, stabilize energy prices, and benefit the environment at the same time.

Last year, we saw fuel prices go through the roof. This winter we saw excessively high oil and natural gas prices and this summer's gas prices are near record highs. Plain and simple, the reason our constituents find themselves faced with out-of-control heating oil and fuel prices is because our nation has no long- term energy policy. In an effort to promote clean and efficient alternative energy sources, I have joined with Ranking Member McNulty in introducing legislation to promote the use of fuel cells which remove the hydrogen from fossil fuels to create energy with virtually no pollutants. They function much like a battery except fuel cells do not require recharging and are far more efficient than a combustion engine or power plant. The President's National Critical Technology Panel included fuel cells as one of the 22 technologies essential for the U.S. to develop to achieve economic progress and maintain national security.

Our legislation, H.R. 1275, proposes a fuel cell tax credit for five years to create a market incentive for this revolutionary technology, which is reliable and will provide economic and environmental advantages to traditional fuel sources. The bill will accelerate commercialization of this technology by providing a $1,000 per kilowatt credit for efficient, stationary fuel cell systems.

Stationary fuel cells capable of running 24 hours a day, seven days a week for five years with only routine maintenance are currently in operation today. As a distributed generation technology, fuel cells address the immediate need for secure, efficient, clean energy supplies, while reducing grid demand and increasing grid flexibility.

First used by NASA in the space program, they are now in hospitals, schools, military installations, and manufacturing facilities and may be available for homeowners by the end of this year. Although these early products have proven energy efficiency and environmental advantages, help in accelerating volume production is essential in realizing lower prices for consumers and the full benefits of fuel cells.

I am also a strong supporter and cosponsor of H.R. 1863, introduced by our committee colleague Dave Camp to encourage the development of projects that capture landfill gas (LFG) and use it as an alternative energy source. LFG is produced as waste decomposes in landfills that serve our communities. LFG projects capture and use the gas to generate electricity or directly as an alternative fuel.

Through Section 29 of the tax code, approximately 300 landfill gas-to-energy projects nationwide were developed. Unfortunately, this "nonconventional fuel production" credit became unavailable after June 30, 1998 and, since then, no new LFG projects have been planned or constructed.

Mr. Camp's legislation would extend the Section 45 tax credit for wind energy, closed-loop biomass, and poultry waste to LFG projects. It is estimated that an additional 700 landfill gas-to- energy projects could be made economically feasible with such an incentive. Helping to bring these projects online would help the nation save more than 40 million barrels of oil annually. With that kind of potential, we must ensure that we are tapping into LFG, which is available in nearly every community in America.

I was pleased that the President's proposal calls for tax credits for fuel cell vehicles and hybrid vehicles which run on gas and electricity and a tax incentive for LFG projects. I urge the Members of the Subcommittee to also support a tax incentive for stationary fuel cells as you consider the use of the tax code to stimulate more rapid development of a comprehensive energy policy. It is technologies like fuel cells that will help us decrease our dependence on foreign oil, conserve existing oil supplies, and reduce air pollution.



LOAD-DATE: June 13, 2001