Hearing of the Senate Banking, Housing and Urban Affairs Committee

HEADLINE: HEARING OF THE SENATE BANKING, HOUSING AND URBAN AFFAIRS COMMITTEE
 
SUBJECT: MONETARY REPORT OF THE FEDERAL RESERVE
 
CHAIRED BY: SENATOR RICHARD SHELBY (R-AL)

WITNESSES: ALAN GREENSPAN, CHAIRMAN, FEDERAL RESERVE BOARD OF GOVERNORS

BODY:
SEN. MIKE ENZI (R-WY): Thank you, Mr. Chairman. And everyone always looks with anticipation toward this presentation. Of course, there's a little more anticipation when the Senate -- it's the Senate's turn for the first presentation, but we thank you for all of the insight that you provide.

The U.S. economy is still the greatest economy in the world, but there are certain issues that we need to address to retain that position. And if I had to pick a single issue that has the greatest impact on the financial affairs of Wyoming and, I think, the rest of the nation, I'd choose the state of the nation's energy development. Every sector of our economy relies on some form of technology that in turn relies on electricity and/or fossil fuels to function. And one of the secrets of the United Sates has always been low-cost energy. Our economy is literally driven by our ability to develop and maintain a steady, constant energy supply.

Now, Wyoming's role is much like the position held by the colonies during America's first years of European settlement. We provide the raw materials -- or in other words, the feed stock -- that makes the rest of the nation's energy economy function. In my home county of Campbell County, Wyoming, we are the third -- we would be the third-largest coal-producing country (sic) in the world. One- third of our nation's coal is produced in this county alone. We also produce more uranium annually than the rest of the nation combined and have the greatest potential for natural gas development in the entire continental United States.

In our county we're in the process of drilling some 50,000 wells for coal-bed methane, and they just made a discovery that there's another coal formation below the present one. The top formation is 60 to 100 feet thick and under about 60 to 100 feet of dirt. The other one is a little bit lower, but it's 200 feet thick and it has considerably more natural gas production than the other.

So, in short, we have what the rest of the nation needs to keep its technology fueled and running. Unfortunately, most of that energy is stranded in Wyoming and is inaccessible to other parts of the country that need it. Our natural gas development's being slowed down by the inability to get the gas out of state. We're short of pipelines. We're talking about some pipelines from Alaska; we need to talk about pipelines to get the gas that's already been discovered in the lower 48 to where it's needed. Our electricity runs into bottlenecks where the power lines outside the state don't have enough capacity to carry what we can generate, and our coal is being hit with the threat of new regulations and bureaucratic limitations that could eventually slow down exploration and development. All of these limitations are having an effect on the rest of the economy.

I know that you -- that Chairman Greenspan has already visited the Hill on a number of occasions and testified on this issue, and I look forward to any additional insights he might offer on how we can bolster the economy by increasing energy stability. And I hope he could address what future role the energy-producing states can play in meeting our energy demands.

I know that we've had a craze of trying to go with natural gas for as many things as possible. The production of electricity can be very efficiently done with coal. And I know they were making a decision in Rapid City one year on whether to use peaking power from natural gas. And they discovered that the peaking power would require as much natural gas and be needed at the same time as gas to heat the city of Rapid City, and it was an equivalent amount. It took as much electricity as it would take to heat in the winter in Rapid City. So, we're talking some large quantities of gas for things that could be substituted by coal production. We do need to be able to get the electricity around, and I've mentioned the need for pipelines.

In addition to the importance of natural gas prices on our nation's economy, we must also ensure that we have a favorable business climate to encourage the creation and growth of our small businesses. And small business has been the backbone for the country; 97 percent of the businesses are small business. I appreciate any of the concentration that people have done on improving small business.

And I would ask that a copy of my full statement be part of the record.