[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
         ``BUMP-UP'' POLICY UNDER TITLE I OF THE CLEAN AIR ACT

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON ENERGY AND AIR QUALITY

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 22, 2003

                               __________

                           Serial No. 108-62

                               __________

       Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

                               __________

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                          WASHINGTON : 2004
89-001PDF

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                    COMMITTEE ON ENERGY AND COMMERCE

               W.J. ``BILLY'' TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida           JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio                RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania     EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia                 SHERROD BROWN, Ohio
RICHARD BURR, North Carolina         BART GORDON, Tennessee
  Vice Chairman                      PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia             ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming               BART STUPAK, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico           ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona             GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING,       KAREN McCARTHY, Missouri
Mississippi                          TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
ROY BLUNT, Missouri                  LOIS CAPPS, California
STEVE BUYER, Indiana                 MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California        CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire       TOM ALLEN, Maine
JOSEPH R. PITTS, Pennsylvania        JIM DAVIS, Florida
MARY BONO, California                JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon                  HILDA L. SOLIS, California
LEE TERRY, Nebraska
ERNIE FLETCHER, Kentucky
MIKE FERGUSON, New Jersey
MIKE ROGERS, Michigan
DARRELL E. ISSA, California
C.L. ``BUTCH'' OTTER, Idaho

                   Dan R. Brouillette, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                 Subcommittee on Energy and Air Quality

                      JOE BARTON, Texas, Chairman

CHRISTOPHER COX, California          RICK BOUCHER, Virginia
RICHARD BURR, North Carolina           (Ranking Member)
ED WHITFIELD, Kentucky               ALBERT R. WYNN, Maryland
CHARLIE NORWOOD, Georgia             THOMAS H. ALLEN, Maine
JOHN SHIMKUS, Illinois               HENRY A. WAXMAN, California
  Vice Chairman                      EDWARD J. MARKEY, Massachusetts
HEATHER WILSON, New Mexico           RALPH M. HALL, Texas
JOHN SHADEGG, Arizona                FRANK PALLONE, Jr., New Jersey
CHARLES W. ``CHIP'' PICKERING,       SHERROD BROWN, Ohio
Mississippi                          BOBBY L. RUSH, Illinois
VITO FOSSELLA, New York              KAREN McCARTHY, Missouri
STEVE BUYER, Indiana                 TED STRICKLAND, Ohio
GEORGE RADANOVICH, California        LOIS CAPPS, California
MARY BONO, California                MIKE DOYLE, Pennsylvania
GREG WALDEN, Oregon                  CHRIS JOHN, Louisiana
MIKE ROGERS, Michigan                JOHN D. DINGELL, Michigan
DARRELL ISSA, California               (Ex Officio)
C.L. ``BUTCH'' OTTER, Idaho
W.J. ``BILLY'' TAUZIN, Louisiana
  (Ex Officio)

                                  (ii)




                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Alvarez, Ramon, Scientist, Environmental Defense Fund........    89
    Baron, David S., Staff Attorney, Earthjustice................   146
    Farren, David, Attorney, Southern Environmental Law Center...   141
    Griffith, Hon. Carl R., Jr., County Judge, Jefferson County, 
      Texas......................................................    79
    Holmstead, Hon. Jeffrey, Assistant Administrator for Air and 
      Radiation, Environmental Protection Agency.................    14
    Marquez, Hon. R.B. Ralph, Commissioner, Texas Natural 
      Resource Conservation Commission...........................    87
    Methier, Ronald, Chief, Georgia Department of Natural 
      Resources, Environmental Protection Division, Air 
      Protection Branch..........................................    97
    Simpson, Hon. Bobby, Mayor-President of Baton Rouge/Parish of 
      East Baton Rouge, Louisiana................................    72
    Thibodeaux, Hon. Carl K., County Judge, Orange County, Texas.    83
    Wolfe, Samuel A., Assistant Commissioner for Environmental 
      Regulation, New Jersey Department of Environmental 
      Protection.................................................   150
Additional material submitted for the record:
    Bohlinger, L. Hall, Secretary, Louisiana Department of 
      Environmental Quality, prepared statement of...............   165
    Breaux, Hon. John, a U.S. Senator from the State of 
      Louisiana, prepared statement of...........................   164
    Griffith, Hon. Carl R., Jr., County Judge, Jefferson County, 
      Texas, additional comments.................................   166
    Marquez, Hon. R.B. Ralph, Commissioner, Texas Natural 
      Resource Conservation Commission, response for the record..   169
    Methier, Ronald, Chief, Georgia Department of Natural 
      Resources, Environmental Protection Division, Air 
      Protection Branch response for the record..................   175

                                 (iii)




         ``BUMP-UP'' POLICY UNDER TITLE I OF THE CLEAN AIR ACT

                              ----------                              


                         TUESDAY, JULY 22, 2003

                  House of Representatives,
                  Committee on Energy and Commerce,
                    Subcommittee on Energy and Air Quality,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:30 a.m., in 
room 2123, Rayburn House Office Building, Hon. Joe Barton 
(chairman) presiding.
    Members present: Representatives Barton, Cox, Whitfield, 
Shimkus, Radanovich, Issa, Tauzin (ex officio), Boucher, Wynn, 
Allen, Waxman, Pallone, McCarthy, Strickland, Capps, and John.
    Also present: Representative Upton.
    Staff present: Bob Meyers, majority counsel; Bob Raney, 
fellow; Andy Black, policy coordinator; Peter Kielty, 
legislative clerk; Michael Goo, minority counsel; Bruce Harris, 
minority professional staff.
    Mr. Barton. The subcommittee will come to order. I want to 
welcome everyone to today's hearing on the ``Bump-Up'' Policy 
under Title I of the Clean Air Act.
    Without objection, the subcommittee is going to proceed 
pursuant to Committee Rule 4(e) which governs opening 
statements by members and the opportunity to defer those 
statements for extra questioning time. Is there an objection?
    Hearing none, so ordered.
    The Chair will now recognize myself for an opening 
statement. Over the course of its history, the Clean Air Act 
has been called many things. There is no doubt that the Act, 
which runs to over 400 pages, is complicated, technical, and 
subject to varying interpretations.
    Some of the Clean Air Act's complexity is a normal result 
of the legislative process, but in other cases different 
policies and priorities have been added to the Act without the 
full coordination of some of the other provisions in the Act. I 
believe that today's hearing offers an example of such 
conflicting priorities.
    In 1990, Congress was concerned with the amount of progress 
that had been made to attain the 1-hour ozone standard, Part D, 
Subpart 2, was added to the Clean Air Act to place ozone 
nonattainment areas on a specific schedule for attainment. The 
worse the existing air quality, the longer the time that 
Congress allowed for attainment. As a price to be paid for 
missing deadlines, requirements on noncompliant areas were 
increased by bumping those areas up into higher and more 
onerous classifications.
    In 1990, however, Congress was also aware that the 
pollution from one area could affect another downwind area. 
While in many cases precise computer modeling on this transport 
issue did not exist, Congress enacted provisions providing for 
regional ozone transport commissions. Congress also recognized 
the transport in provisions to Section 110 regarding mandatory 
provisions of the State Implementation Plan requirements.
    By 1994, the EPA and the Clinton Administration determined 
that nonattainment and transport provisions could sometimes be 
in conflict. On September 1, 1994, then Assistant Administrator 
Mary Nichols issued a memorandum that provided for the 
extension of attainment dates for downwind areas in cases of 
overwhelming transport of air pollution. Commenting on the 
conflicting provision in the Clean Air Act, she stated, ``It 
would be an odd or even absurd result for downwind areas unable 
to attain due to transport, to be penalized for a failure to 
address a problem that is beyond their ability to control. The 
EPA reads these provisions together to avoid arguably absurd or 
odd results and to, on balance, give effect to as much of 
Congress' manifest intent as possible. Avoiding penalizing the 
downwind areas for failure to do the impossible constitutes a 
permissible balance.''
    So Mary Nichols, Assistant Administrator for EPA at the 
time, and the Clinton Administration back in 1994 made the 
common-sense observation that if you are in noncompliance 
because of downwind transport issues, we need to recognize 
that.
    This 1994 policy was affirmed in a 1998 Guidance Memorandum 
signed by Richard Wilson, who was then Acting Administrator for 
Air and Radiationl. Note, in the 1994 effort he stated, since 
the issuance of that memorandum, the history of efforts to 
analyze and control ozone transport has led EPA to believe that 
it should expand the policy's reach to ensure that downwind 
areas are not unjustly penalized as a result of transport. He 
noted ongoing efforts of the Ozone Transport Commission to 
assess the movement of pollution in the eastern United States, 
and issued a Guidance Memorandum to specify the conditions 
under which downwind area attainment dates could be extended 
where transport of pollution prevented timely attainment.
    This Clinton Administration policy was the state of the law 
until 2002, when three court cases overturned EPA's extended 
attainment date policy. Although three separate District Court 
opinions were rendered, the decisions turned on each court 
deciding that EPA did not have sufficient statutory authority 
in the Clean Air Act for extension of attainment date policy.
    I am an engineer and not a lawyer, so I can't quibble with 
the legal rationale of the District Court decisions, however, a 
few things do stand out in my mind about the practical 
situation that has been created by the District Court opinions.
    First, for 1994 to 2002, downwind areas came to rely on 
EPA's policy of extending deadlines over the course of those 8 
years. They were, in fact, granted extensions by the agency 
empowered by Congress to implement the Clean Air Act. Thus, by 
any measure, the reliance of downwind areas on this policy was 
reasonable and appropriate.
    Two, the basis of the attainment date extension policy is 
simple fairness. The concept, as I understand it, is not to 
penalize nonattainment areas for emissions that are beyond 
their ability to control. Downwind areas are not relieved of 
their obligations, they are simply allowed a more reasonable 
time period to achieve attainment.
    Three, the structure of Subpart 2 serves to bump-up areas 
to the more serious classification when their monitored air 
quality in many cases is getting better. For example, in Baton 
Rouge--and we have the Mayor of Baton Rouge in the audience 
today--if Baton Rouge were classified today, it would be a 
marginal nonattainment area, the lowest classification, not a 
severe nonattainment area, the next to highest classification. 
Thus, the penalty applied in the bump-up can be widely 
disproportional to amount and character of the remaining 
violations in the actual situation of the air in the region 
under question.
    Four, results of being bumped-up are far from benign. 
Initial local planning is required, constructing offsets 
increased, severe enforcement penalties may be triggered under 
Section 185 should even minor infractions occur. Transportation 
conformity requirements can also be affected.
    As one of the few members of this committee who was on the 
committee during the 1990 amendments, I am not convinced that 
in the case of transport this was the deliberate and specific 
intent of the 1990 amendments to the Clean Air Act. In fact, I 
can state it is my opinion that it is the exact opposite of 
what the intent was. Faced with this, I think it is more than 
fair to examine what is the right policy to apply through the 
Clean Air Act based on what we know now in 2003 about air 
pollution and local efforts to achieve air quality standards.
    The courts looked at the state of the law as Congress left 
it in 1990, that is 13 years ago. We should be concerned with 
reasonable and just results more than some commitment to every 
jot and title of the Act. This subcommittee needs information 
about this issue and what might be done to address the 
situation.
    This is a very important hearing. I have read the 
testimony. I am looking forward to questioning some of the 
witnesses, especially from our second panel, to explore some 
possible solutions.
    So, with that, I would end my statement, and would yield to 
the distinguished gentleman from Virginia for his opening 
statement.
    Mr. Boucher. Thank you very much, Mr. Chairman. I think 
that today's hearing is both timely and appropriate. It 
provides an opportunity for subcommittee members to become well 
acquainted with the debate surrounding the EPA's bump-up 
policy, the litigation that has ensued over that policy, and 
the options that the subcommittee now has before it in 
considering the plight of a group of metropolitan regions that 
fail to achieve attainment of air quality standards, not 
because of locally produced emissions but because of transport 
of pollution into their region from elsewhere.
    During the Clinton Administration, the EPA granted 
extensions of compliance deadlines to communities that were out 
of compliance because of pollution transport from other 
regions. The extensions were only for the time necessary for 
the region responsible for the transported pollution to itself 
achieve attainment. The urban area seeking the extension was 
literally unable to achieve compliance with ambient air quality 
standards by normal control of local emissions. The applicant 
for the extension was the victim of another region's emissions.
    This seemingly sensible EPA policy of granting extensions 
in these truly extraordinary circumstances was challenged in 
court, and no less than four United States Courts of Appeal 
ruled that under the language of the Clean Air Act, as amended, 
the EPA is without authority to grant extensions to these 
deserving localities. Therefore, an automatic bump-up to the 
next most severe category is now occurring by operation of law.
    I think fairness requires that we devote attention to the 
matter, and I want to commend Chairman Barton for organizing 
this conversation during which we will do so. I will be 
interested in the witnesses' views about the problems the 
inability of EPA to grant extensions will create for the 
localities that are out of compliance through no fault of their 
own, the urgency of the situation from their perspective, and 
what course the witnesses suggest that the subcommittee now 
take.
    Thank you very much, Mr. Chairman. I look forward to 
hearing from the witnesses.
    Mr. Barton. Thank you, Mr. Boucher. The distinguished full 
committee chairman is recognized for an opening statement.
    Chairman Tauzin. I thank the chairman and thank him for 
this hearing. Chairman Barton, I know that you know how 
important this issue is to communities such as one in Louisiana 
that is represented in this room today. Although the title of 
the hearing, Bump-Up Policy under Title I of the Clean Air Act, 
may have some people scratching their heads, I can assure you 
it is a most serious matter to local communities, and it is a 
serious matter for States that are most affected by it.
    Today's hearing seeks to get to the heart of what these 
communities face in terms of complying with the Clean Air Act 
in attempting to improve local air quality for their citizens. 
As reflected on the second panel, today's hearing has a direct 
bearing on Baton Rouge, Louisiana, our State capitol city. This 
community represented today by The Honorable Bobby Simpson, the 
Mayor-President of Baton Rouge and the Parish of East Baton 
Rouge--and, Mayor, I want to welcome you to this hearing today.
    The community has been making substantial progress in 
cleaning up its air, but during the past 2 years it has 
suffered only three violations of the hourly ozone standard, 
yet, this area stands on the verge of being bumped-up to a 
severe ozone classification, an action that will require 
additional State planning, expensive control measures, and 
increased construction off-sets which can serve as a 
disincentive to new development, and severely impact the 
economy of this important city in our state.
    My understanding is that Baton Rouge believes that a new 
requirement for reformulated gasoline requirement alone will 
cost its citizens between $48 and $72 million per year, while 
producing a negligible effect on local pollution.
    As forcefully indicated in its testimony, Baton Rouge 
believes it was set up to fail by the EPA's imperfect 
understanding of ozone control strategies and the flaw in EPA 
guidance, but it is Baton Rouge, not the EPA, which will suffer 
the consequences of this failure.
    Today's hearing will also receive testimony from witnesses 
from Texas, Georgia and New Jersey. All of these States have 
nonattainment areas. Our witnesses will discuss their views on 
bump-up policies as well as their unique local conditions. In 
this regard, some of these areas have been involved in 
extensive litigation over their nonattainment status, with 
lawsuits stretching back many years and in some cases 
stretching as far into the future as anyone can see, or even 
want to look, but look we must.
    Today we will explore the origins of the bump-up in the 
1990 Clean Air Amendments. We will also hear about policies 
initially drafted by the Clinton Administration in 1994 to 
address overwhelming ozone transport. We will hear about the 
attainment date extension policy that was subsequently issued 
by EPA in 1998, published in 1999, repeatedly applied to 
several areas of the country, and we will hear about how such 
policies were invalidated by court decisions in 2002, leaving 
affected communities literally in the proverbial lurch.
    Such an examination can easily get bogged down in details 
and nuances, however, I am most interested in taking a step 
back and analyzing the basic question of whether the law in 
this area makes any degree of common sense.
    When we enacted the 1990 Clean Air Act Amendments, we 
attempted to address a broad range of concerns in this very 
room, both to correct the previous flaws in the statute and 
chart a new course on such matters as acid rain, hazardous air 
pollutions and Federal permits. We also enacted new policies 
for attainment of the ozone standard, but I think it is 
important that we concede something up front--that is, in 1990 
we had far from perfect knowledge of either the underlying 
causes and atmospheric behavior of air pollution, or the best 
regulatory and nonregulatory methods to address pollution.
    As opposed to 1990, we now know that pollution transport 
occurs to a greater extent than previously envisioned, and that 
many downwind areas are affected by it. Yet, under the Clean 
Air Act, EPA cannot fully take this into account in granting 
justified extensions of compliance obligations. Compared with 
1990, the air is demonstrably cleaner in many areas, yet, the 
provisions of the current Act work to impose stricter controls 
and penalty measures on local areas even as this progress is 
being made and air quality approaches attainment. And based on 
the lessons we learned, we know the flexible implementation of 
air pollution standards actually can work, often achieving 
larger reductions in pollution at lower cost. But the current 
Act, as forcefully demonstrated by the 5th Circuit and the 7th 
Circuit and the D.C. Circuit opinions on the attainment date 
extension policy may allow little room for interpretation, much 
less flexible implementation.
    Therefore, the remaining question is, what should we, and 
can we, do anything about it? It is my hope this hearing will 
help us provide the committee with some answers. I am very 
interested in the recommendations of our witnesses, and 
obviously extraordinarily interested in the work of this 
subcommittee in giving the full committee some ray of hope that 
we can cure these problems before communities like Baton Rouge, 
Louisiana is hurt so terribly by the misapplication of these 
laws.
    I thank the chairman for the time.
    Mr. Barton. We thank the gentleman. Does the gentlelady 
from California, Ms. Capps, wish to make an opening statement?
    The gentlelady is recognized for 3 minutes.
    Ms. Capps. I thank you, Mr. Chairman, and thank you for 
calling this important hearing. Thank our witnesses for being 
present, as well.
    Mr. Chairman, since the Clean Air Act was passed in 1970, 
air quality and public health have improved in many regions of 
our country. However, even after 30 years of progress, many 
areas still violate basic health standards and, as a result, 
the health of tens of millions of Americans remains at risk.
    Two weeks ago this committee met to discuss the President's 
so-called ``Clear Skies'' Proposal. At that hearing I raised a 
number of concerns with the President's plan. I believe, Mr. 
Holmstead, I believe it was you that I was questioning as well 
on behalf of the Administration.
    For example, the Administration's plan eliminates the tools 
local communities can use to clean up their air and meet clean 
air deadlines. This will make continued pollution problems more 
likely. It is clear that delaying the goals of the Clean Air 
Act will not make our air cleaner or protect our health. And 
now, 2 weeks later, here we are discussing another dangerous 
policy that could waive stronger anti-smog requirements for 
cities with some of the worst air pollution.
    Take a look outside today, if you think we should be 
delaying the clean-up of air in the DC area. EPA has illegally 
extended the clean air deadlines in these cities without 
bumping them up to higher pollution categories. The courts have 
consistently ruled that the EPA's extension policy violates the 
purpose and intention of the Clean Air Act. This is clearly a 
flawed and unlawful practice.
    As a public health nurse, I have long been concerned with 
the state of our Nation's air quality. I am not someone who 
likes to pick on our Nation's Capital, but let us use 
Washington, DC as an example of air pollution problems that 
need to be addressed.
    Last summer, the Washington, DC area suffered its worst 
ozone pollution in more than a decade. This included 9 code red 
days, 19 code orange days, and two code purple days when the 
air was deemed very unhealthy. This means the lives of fragile 
citizens, our children, and those suffering chronic asthma 
problems are severely impaired on these days. It poses a 
special threat, as I said, to residents with asthma and other 
respiratory diseases, including more than 53,000 asthmatic 
children. It is sad that during a typical summer day here in 
our Nation's Capital more than 2400 people will visit the 
emergency room due to breathing difficulties, many of which 
could be prevented.
    Washington, DC area residents now face another summer of 
ozone pollution that will put them at further risk of asthma 
attack, emergency room visits, lung damage, and other serious 
health impacts. The Washington area is more than 10 years 
behind in adopting adequate anti-pollution programs. The DC 
area needs stronger, not weaker clean air protections, and it 
needs them now. But EPA's extension policy could lead 
Washington, DC down a path toward dirtier air when we should be 
finding ways to improve public health.
    Mr. Chairman, I have a letter from a number of elected 
officials who are opposed to any proposal that would weaken 
anti-smog requirements. These are locally elected officials 
from Maryland, from Virginia, and I would ask that this letter 
be read into the record.
    It is not only a problem in Washington, DC. EPA reports 
that 133 million Americans live where the air is unhealthy to 
breathe because of ozone pollution. EPA's extension policy 
would delay the adoption of badly needed anti-pollution 
measures in communities all across the Nation. It is a bad 
idea, and one that jeopardizes the health of millions of 
Americans. I am hopeful that this committee will see this 
policy for what it is, dangerous and unlawful.
    We need to respect and carry out the Clean Air Act, as 
written, and ensure that the public and local communities 
receive the protective measures that the law promises. It is 
irresponsible to allow the EPA to use delay tactics. Our 
children and our families have already waited too long for 
clean air.
    Mr. Barton. The gentlelady's time expired about a minute 
ago.
    Ms. Capps. Thank you. I will yield back, and look forward 
to the testimony of our witnesses.
    Mr. Barton. If you will share the letter with our counsel, 
we need to look at it, but I am fairly certain we will accept 
it into the record.
    Ms. Capps. Thank you.
    [The letter follows:]

VIA FACSIMILE
                                                   January 16, 2003
The Honorable Ted Stevens
Chair, Appropriations Committee
United States Senate
Washington, DC 20510

The Honorable Robert Byrd
Ranking Member, Appropriations Committee
United States Senate
Washington, DC 20510

The Honorable Bill Young
Chair, Appropriations Committee
United States House of Representatives
Washington, DC 20515

The Honorable David Obey
Ranking Member, Appropriations Committee
United States House of Representatives
Washington, DC 20515

    Dear Senators Stevens and Byrd and Congressmen Young and Obey: We 
understand that officials from the Environmental Protection Agency 
(EPA) may be supporting attempts To block anti-smog requirements for 
the Washington, DC area and other cities across the country. We are 
concerned about the impact that this would have on the health of our 
region's residents, and urge you not to include EPA's proposal in the 
FY2003 omnibus appropriations bill, or any of the FY2004 appropriations 
bills.
    Specifically, we understand that EPA may be seeking a statutory 
change to the Clean Air Act that would codify the agency's practice of 
extending air quality attainment deadlines without imposing new 
pollution control measures. The 1990 Clean Air Act allowed EPA to 
extend a city's deadline for complying with air quality standards, but 
in return required the agency to demand stronger pollution control 
measures. EPA's practice of extending cities' deadlines without 
imposing now pollution controls has forced communities like the 
national Capitol region to live with dirtier air.
    As local and state elected officials, we have long been concerned 
with the quality of our region's air. Last summer the Washington, DC 
area suffered its worst ozone pollution in more than a decade, 
including nine ``code red'' days and 19 ``code orange'' days. This 
severe pollution poses special threats to residents with asthma and 
other respiratory diseases, including more than 53,000 asthmatic 
children. In addition, it would negatively impact communities outside 
the Washington, DC area, such as Baltimore, that are already complying 
with tighter pollution control requirements.
    Enacting legislation that weakens the Clean Air Act would send our 
region down a path toward dirtier air at a time when we should be 
finding ways to improve public health in our communities. We urge you 
not to include any proposals that would weaken anti-smog requirements 
in the FY2003 omnibus appropriations bill, or any other bills.
    For more information, please contact Alec Evans in D.C. 
Councilmember Phil Mendelson's office: (202) 724-8064.
            Sincerely,
    James Almand, 47th District, Virginia House of Delegates; Phil 
  Andrews, District 3, Montgomery County Council, Maryland; Robert 
    Brink, 48th District, Virginia House of Delegates; Jim Burton, 
   Mercer District, Loudoun County Board of Supervisors, Virginia; 
     Karen Darner, 49th District, Virginia House of Delegates; Tom 
Dernoga, District 1, Prince George's County Council, Maryland; Paul 
    Ferguson, Acting Chair, Arlington County Board, Virginia; Mark 
  Herring, Leesburg District, Loudoun County Board of Supervisors, 
    Virginia; Phil Mendelson, At-Large, Council of the District of 
     Columbia, Washington, D.C.; Tom Perez, District 5, Montgomery 
County Council, Maryland; Peter Shapiro, Chairman, Prince George's 
  County Council, Maryland; Patricia Ticer, District 30, Senate of 
    Virginia; Eleanor Towe, Vice Chairman, Loudoun County Board of 
      Supervisors, Virginia; Marian Van Landingham, 45th District, 
  Virginia House of Delegates; and Mary Margaret Whipple, District 
                                            31, Senate of Virginia.

    Mr. Barton. Does the gentleman from Kentucky wish to make 
an opening statement?
    Mr. Whitfield. Mr. Chairman, I notice we have ten witnesses 
and four of them are from local communities, that can talk to 
us about the practical effects that this policy has on them, so 
I will waive.
    Mr. Barton. The gentleman defers and will get an additional 
3 minutes in his questioning.
    Does Mr. Cox wish to make an opening statement?
    Mr. Cox. Thank you, Mr. Chairman, and thank you also for 
convening this important hearing. While the issue before us 
today does not concern California directly, the broader 
implications of how the Federal Government implements laws 
intended to improve America's environmental quality are of 
importance to all Americans.
    The heavily litigated recent history of the bump-up policy 
is a rich illustration of why it is so important that the 
Federal Government spend less time dictating how to localities 
how to clean up their environment, and more time focusing on 
the goals that States and localities must achieve and on 
incentives for achieving them.
    The policy that we are studying today is part of an overall 
joint Federal/State effort that, when fully implemented in 
2004-2005, will result in the reduction of approximately 1 
million tons of nitrous oxides in affected States each year, 
but there is a problem with a piece of it.
    In 1998, the Clinton Administration issued a guidance 
memorandum on bump-up as a proposed interpretation of the Clean 
Air Act. EPA stated that it would consider extending an 
attainment date for that area that was affected by transport 
from either an upwind area in the same State that had a later 
attainment date, or an upwind area in another state. The 
extension would only be available if the downwind area had 
adopted all necessary local measures and he submitted an 
approvable attainment plan. In addition, the downwind area 
would need to provide for implementation of the local measures 
as expeditiously as practicable, but no later than the date by 
which the upwind reductions needed for attainment would be 
achieved.
    The Federal Register Notice on the attainment date 
extension policy also included a review of congressional intent 
concerning classification of areas and transported pollution. 
It indicated that while Congress had not fully reconciled 
different transport provisions, Congress had indicated that 
upwind areas should be responsible for preventing or 
interfering with attainment in downwind areas. Thus, EPA 
indicated it was filling in a gap in the statutory framework.
    It stated that the EPA believes that Congress, had it 
addressed this issue, would not have intended downwind areas to 
be penalized by being forced to compensate for transported 
pollution by adopting measures that are more costly and onerous 
and/or which would will become superfluous once upwind areas 
reduce their contribution to the pollution problem.
    This is not the first time that the implementation of rules 
conceived under different contexts has produced anomalous 
results. California has been struggling for years to cope with 
the 2-percent oxygenate requirement for its fuels, an 
initiative with which compliance seemed reasonable when first 
conceived, but which became an expensive mess in practice.
    The EPA thus far seems unable to allow California any 
flexibility in how we achieve clean air. The goal of clean air 
should be more important than rigid stipulations regarding how 
that clean air is achieved. Ingenuity and advanced technology, 
not government mandates, will lead to a more pristine 
environment. The wide gulf between what EPA and the courts' 
reading of our 13-year-old statute think the Federal Government 
must do on the bump-up policy indicates that Congress may need 
to update this law.
    Mr. Barton. The gentleman's time has expired.
    Mr. Cox. That is an excellent reason for this hearing, and 
I thank the chairman for convening it.
    Mr. Barton. We thank the gentleman. Does the distinguished 
gentleman from California, Mr. Waxman, wish to make an opening 
statement?
    Mr. Waxman. I do, Mr. Chairman.
    Mr. Barton. The gentleman is recognized for 3 minutes.
    Mr. Waxman. Mr. Chairman and my colleagues, today we 
examine an EPA policy regarding the 1-hour ozone standard. This 
policy has determined the classification status of a handful of 
areas in the United States, namely, Beaumont/Port Arthur, 
Texas; Baton Rouge, Louisiana; Atlanta, Georgia; Portland, 
Maine; and Washington, DC. Clearly EPA's policy is a violation 
of the Clean Air Act. Three courts have determined this, and 
EPA will not dispute it today. We can all agree that EPA has 
acted illegally. Amazingly, not only has EPA lobbied Congress 
to overturn these lawsuits and codify their illegal approach, 
they want to extend the illegal policy to the entire country 
and apply it to the new 8-hour ozone standard as well.
    The effects of such a law would be sweeping and, on its 
face, makes no sense for the Nation. The air pollution problems 
faced by Texas are different than those faced by Georgia, and 
those problems are different than the problems faced by Maine. 
Allowing every area in the country that has an ozone transport 
issue, no matter how small, to receive a waiver of the Clean 
Air Act ignores the pending implementation of the 8-hour ozone 
standard. The policy would also punish other areas of the 
country that have successfully acted to clean up the air.
    There are many factual questions we need to have answered 
if this subcommittee is to fully understand the air pollution 
challenges faced by these areas. There are technical questions 
about crafting effective strategies to clean up these areas. 
There also appears to be a number of factual disputes between 
today's witnesses, and I hope EPA will be more forthcoming than 
it has been on its other legislative proposals.
    Since today's hearing is slated as a hearing on 
reauthorization of the Clean Air Act, I would hope that we 
would develop a thorough record. Some of the questions that I 
hope to have answered include if the vast majority of ozone 
exceedances in Atlanta are attributable to local sources of air 
pollution and additional local reductions will be required to 
attain the 8-hour ozone standard, why should Atlanta consider 
doing less than so many other cities in the United States?
    In California, we have learned that refineries emit far 
more air pollution than EPA has assumed. Recent data shows that 
refineries and chemical plants in Texas and Louisiana may be 
suffering from the same problem. How do we effectively address 
these sources of pollution?
    And, finally, what are the impacts of adopting EPA's 
illegal policy into statute and applying it to the entire 
country? I do not believe anyone has fully analyzed that.
    Air pollution is an enormous problem in our cities. It is 
within our ability to address this problem, but it takes 
leadership and, unfortunately, delay is not leadership.
    Mr. Barton. That concludes the gentleman's statement?
    Mr. Waxman. Yes, Mr. Chairman.
    Mr. Barton. Does the gentleman from Illinois, Mr. Shimkus, 
wish to make an opening statement?
    Mr. Shimkus. Mr. Chairman, I will just submit mine for the 
record.
    [The prepared statement of Hon. John Shimkus follows:]
 Prepared Statement of Hon. John Shimkus, a Representative in Congress 
                       from the State of Illinois
    Good morning, Mr. Chairman, thank you for holding this timely 
hearing.
    If the Clean Air Act process has shown us anything over the last 
decade, it is that measuring and predicting pollution is a very inexact 
science. We learned that when pollution is measured in a city or 
region, it may actually come from other areas. The projections that the 
government, both local and federal, make about future pollution have 
been wrong in many cases. The result is a constant changing of the 
rules and laws to meet clean air goals and an uncertainty for community 
leaders and businesses about steps should be taken. A county may think 
they are on the road to attainment, and only later realize that they 
have fallen far short.
    EPA has provided a good amount of flexibility for regions to meet 
our clean air goals and has worked closely with these regions on 
formulating plans to meet those goals. Some times that flexibility has 
achieved the desired results. Other times is has resulted in a 
patchwork of environmental laws that are confusing and complex, like 
the 45 different blends of gasoline we have in this country. At the 
heart of all this is our responsibility, as legislators and regulators, 
to find a balance between a clean environment and a strong economy.
    This ``bump up'' issue is very important to me because I come from 
and represent Madison County, IL, a county that has been in non-
attainment in the past, and will likely be in non-attainment in the 
future even if Clear Skies is passed. Usually a ``bump up'' from 
``moderate'' to ``serious'' will cost a region hundreds of millions of 
dollars in penalties and lost federal funding.
    In January of this year Madison County, as part of the St. Louis 
region, was bumped up from ``moderate'' non-attainment to serious 
``non-attainment'' for the one-hour ozone standard, despite significant 
air quality improvements over the last few years. But at the same time, 
based on future projections, the region was ruled to be in attainment--
which is a little confusing to the average person, like me. Later in 
the spring, EPA made it official and designated the St. Louis region as 
being in attainment. This was in large part due to the efforts of the 
states of Illinois and Missouri, working together, with the business 
community instead of against them to achieve clean air goals. But the 
region faces an uncertain future because of legal challenges to EPA's 
ruling and when EPA comes out with the eight-hour ozone standard next 
April.
    I am glad that Mr. Holstead is here today to gives us a little 
better understanding of how this ``bump-up'' policy is suppose to work 
an what we can expect in the future.
    Again, thank you for having this hearing today Chairman Barton. I 
yield back the balance of my time.

    Mr. Barton. The gentleman defers, and will have an 
additional 3 minutes.
    Does the gentleman from Maine wish to make an opening 
statement?
    Mr. Allen. Mr. Chairman, I do.
    Mr. Barton. The gentleman is recognized for 3 minutes.
    Mr. Allen. Thank you, Mr. Chairman. Last summer southern 
Maine suffered two severe heat waves, with winds from 
industrialized areas to our south and west. As a result, we 
suffered five periods of unhealthy air in violation of the 1-
hour ozone rule in Kennebunkport, Maine, near the southern end 
of our state. These dirty air days were caused by pollution 
emitted in upwind areas that blew into our state. The further 
one got into Maine, the cleaner the air became.
    By EPA's own analysis, 98 percent of the emissions leading 
to unhealthy air days in Maine originate outside our State 
borders--98 percent. For this reason, I have great sympathy for 
witnesses here today who describe pollution transported into 
their areas. The citizens of my State are also frustrated to 
have to endure human health problems caused by more polluting 
regions of the country. But I encourage people from other 
nonattainment areas to learn something from our experience in 
Maine.
    As we approached our 1996 deadline to attain healthy air, 
Maine concluded that Portland would not attain the standard 
even if we reduced our emissions to zero. We suffered from such 
a severe transport problem that local efforts could not 
possibly bring us into attainment, no matter how significant 
our efforts.
    At first, our former Governor complained that the Clean Air 
Act was flawed. Some State policymakers even advocated changing 
the Act to alleviate our burden, as I expect witnesses 
representing nonattainment areas will do today. But Maine's 
policymakers did not give up on attaining healthy air for the 
State citizens. Instead, we used the Clean Air Act, filing a 
Section 126 petition against upwind sources. Our State knew 
that it could not solve our problem at the local level, so it 
used the Act to work toward a more comprehensive solution to 
the NOX transport problem. Other northeastern States 
followed our lead.
    As a direct result of the 126 petition, EPA initiated the 
NOX SIP call which, when this Administration finally 
implements it in 2004, will help us attain the 1-hour standard. 
The Northeast is addressing its ozone problem through the 
NOX SIP Call. Furthermore, the State of Maine, EPA 
and environmental groups are in active ongoing negotiations, 
which we also recommend, to reduce local emissions and avoid 
bump-up. Even in a situation where 98 percent of our problem 
comes from out-of-state, we are willing to clean up our own 
house. Until other nonattainment areas take similar steps, I do 
not believe that Congress should exempt them from the 
requirements of the Clean Air Act.
    Also, I expect this hearing to demonstrate that States need 
more tools to go after upwind sources that risk the health of 
their citizens. Section 126 is currently the most effective 
tool nonattainment areas have at their disposal. Maine has used 
it effectively, yet, the Administration's so-called Clear Skies 
Initiative would ban Section 126 actions for at least 10 years. 
The Administration's position, in my opinion, is simply 
indefensible.
    Mr. Barton. We thank the gentleman. Does the gentleman from 
California, Mr. Radanovich, wish to make an opening statement?
    Mr. Radanovich. No, Mr. Chairman.
    Mr. Barton. The gentleman defers and will have an 
additional 3 minutes.
    Does the gentleman from Ohio, Mr. Strickland, wish to make 
an opening statement?
    Mr. Strickland. I defer, Mr. Chairman.
    Mr. Barton. He gets an additional 3 minutes. Seeing no 
other member of the subcommittee present, we do have a 
distinguished member of the full committee and a subcommittee 
chairman, Mr. Upton. Does he wish to make an opening statement?
    Mr. Upton. Yes, Mr. Chairman. I would ask unanimous consent 
that I make a brief statement, and I also have a full statement 
I would like to insert into the record, and questions for the 
witness for the record as well.
    Mr. Barton. The gentleman is recognized for 3 minutes.
    Mr. Upton. Thank you, Mr. Chairman. I very much appreciate 
you allowing me this opportunity. I support clean air and clean 
water. I grew up on the shores of Lake Michigan. But as 
required by the Clean Air Act, on July 15 the Michigan 
Department of Environmental Quality sent the EPA its 8-hour 
ozone attainment and nonattainment area recommendations. In my 
district, virtually every county along the Lake Michigan shore 
is forced to list their counties as moderate nonattainment 
areas which, if the EPA agrees, would involve stringent 
emissions reduction requirements that will be very burdensome 
on individuals, families, and undermine economic growth and 
development.
    I don't know if you have heard of Mackinac Island, but 
Mackinac Island has I think two vehicles there, an ambulance 
and a fire truck. Bicycles and horses are on the balance of the 
island. You could impose the Mackinac Island standards in every 
one of my counties, shut down every plant and factory, tell 
people that they can't mow their grass or light their charcoal 
burners, and those counties, because of Milwaukee, Chicago and 
Gary, Indiana, would still be not in compliance. I don't think 
that that is right, and the Michigan Air Quality Division chief 
and our Governor has indicated the same as well.
    About the only thing I think that you could do is perhaps 
build a giant fan and send that air over our district to 
someplace else, and I would like to work with the chairman to 
try and see some accommodation because of the transient air 
problem that we have in all of west Michigan. I yield back the 
balance of my time.
    [The prepared statement of Hon. Fred Upton follows:]
  Prepared Statement of Hon. Fred Upton, a Representative in Congress 
                       from the State of Michigan
    Mr. Chairman, thank you for permitting me to sit with the 
Subcommittee today as you examine an issue relating to the treatment 
under the Clean Air Act of areas affected by overwhelming ozone 
transport. As an individual who grew up along the shores of Lake 
Michigan, I value clean air, clean water, and a healthy environment. I 
support the Clean Air Act, but we are facing a very difficult and I 
think very unfair situation in my district due to transient ozone. This 
hearing will afford me the opportunity to lay out our problem and look 
at alternatives for addressing it.
    As required by the Clean Air Act, on July 15th, the Michigan 
Department of Environmental Quality sent the EPA its 8-hour ozone 
standard attainment and non-attainment area recommendations. In my 
district in Southwest Michigan along the shores of Lake Michigan, the 
Department was forced to list Berrien, Cass, and Allegan counties as 
moderate non-attainment areas, which, if the EPA agrees, would involve 
stringent emissions reductions requirements that will be burdensome on 
individuals and families and undermine economic growth and development.
    These counties are on the list not because of anything going on in 
the counties, but because they are heavily affected by transient ozone 
coming across Lake Michigan from Chicago; Gary, Indiana; and Milwaukee. 
My counties could all adopt MacKinac Island's ban on autos and they 
wouldn't be in compliance. We could shut down all the factories and 
douse all the backyard grills and we still wouldn't be in compliance. 
That's not just my evaluation, that's what Michigan's Air Quality 
Division chief has stated publicly. There is widespread acknowledgement 
from the EPA itself and other scientific sources that for these 
counties, incoming ozone and precursors are sufficient to cause ozone 
violations even in the complete absence of local emissions.
    When we amended Clean Air Act in 1990, I don't think the EPA or we 
were aware of the extent to which interstate transport is a serious and 
widespread contributor to ozone non-attainment. As you know, and as 
Administrator Holmstead will testify, the agency has tried through 
regulation to address what is fundamentally an irrational and 
unintended consequence of the law. Communities such as those in my 
district will be forced to implement costly, burdensome controls at 
considerable cost to themselves, their economic growth and development, 
and jobs knowing full well that they will still not be in compliance. 
This just simply cannot stand, Mr. Chairman. I would like to work with 
you and my colleagues on this Subcommittee and the full Committee to 
correct this serious oversight in the current Clean Air Act.

    Mr. Barton. Seeing no other members present, we will now 
welcome our Administration witness, The Honorable Jeffrey 
Holmstead. Your statement is in the record in its entirety, and 
we are going to allow you to summarize it, say, in 7 minutes--
is that possible?
    Mr. Holmstead. I will do it even faster than that.
    Mr. Barton. The gentleman is recognized. Welcome to the 
subcommittee again.

 STATEMENT OF HON. JEFFREY HOLMSTEAD, ASSISTANT ADMINISTRATOR 
     FOR AIR AND RADIATION, ENVIRONMENTAL PROTECTION AGENCY

    Mr. Holmstead. Thank you, Mr. Chairman and members of the 
subcommittee, and thank you especially for giving me the 
opportunity to appear before you today to discuss EPA's 
attainment date extension policy.
    Over the last decade, we have learned that long-range 
transport of air pollution is a more serious and widespread 
contributor to ozone pollution than anyone previously had 
understood. We now know, for example, that pollution 
transported from many miles away has prevented a number of 
cities from meeting EPA's 1-hour ozone standard on time.
    As we learned more about the transport of ozone pollution, 
we began at the agency to focus on reducing pollution at a 
regional level, and we have also begun to focus on the need to 
ensure that cities are not unfairly penalized because of 
pollution from upwind sources that they cannot control.
    To address this issue, EPA in 1998 issued a rule to reduce 
the regional transport of nitrogen oxides, NOX, 
which is a key contributor to ground-level ozone pollution. 
This rule, which is generally known as the NOX SIP 
Call, requires 19 States and the District of Columbia to 
significantly reduce their NOX emissions by 2004. I 
would just note as an aside that President Bush' Clear Skies 
Act is based on this type of regional approach and would go far 
beyond the NOX SIP Call in reducing the amount of 
pollution that is transported from one area to another.
    When EPA issued the attainment date extension policy, the 
agency knew that this NOX SIP Call, along with other 
state-issued emissions reductions, would bring many downwind 
cities into attainment with the 1-hour ozone standard. However, 
as a number of you have noted, there was a significant timing 
problem. Many downwind areas were required to meet the ozone 
standard years before the upwind reductions took effect. At the 
time, the only way an area could receive more time to meet the 
standard was by being bumped-up to a higher nonattainment 
classification. For example, a serious nonattainment area could 
be bumped-up to severe, thereby moving its deadline for meeting 
the 1-hour standard from 1999 to 2005. However, this type of 
reclassification came at a significant price.
    A bump-up triggers a number of additional local pollution 
requirements in downwind cities, and for many cities these 
additional local controls wouldn't help them meet the ozone 
standard any sooner than they would meet it as a result of the 
NOX SIP Call.
    The previous Administration believed, and we agree, that an 
area should not be forced to require expensive controls because 
of upwind pollution when much more cost-effective controls on 
that transported pollution would bring the area into attainment 
just as quickly.
    With that view in mind, EPA issued in 1998 its attainment 
date extension policy. The policy allowed certain qualifying 
areas to seek a later attainment date without having to be 
reclassified or bumped-up.
    Mr. Barton. Something happened to your microphone there.
    Mr. Holmstead. I hope that wasn't Mr. Waxman.
    Mr. Barton. He wants to hear what you have to say, as do 
all of us, not just him.
    Mr. Holmstead. To qualify for an attainment extension, a 
downwind nonattainment area had to, first, demonstrate that an 
upwind area with a later attainment date or an upwind State 
subject to the NOX SIP Call was significantly 
contributing to its nonattainment problem. So that was the 
first requirement; Second, it also had to have an enforceable 
plan to meet the standard no later than the time the upwind 
controls were required; Third, it had to implement all local 
emission controls required by the Clean Air Act for the area's 
nonattainment classification; and Fourth, it had to implement 
any additional reasonably available controls that would help 
the area meet the standard sooner than it could do with upwind 
controls alone.
    This policy created a fair and more cost-effective way for 
these areas to achieve the 1-hour ozone standard just as 
quickly as they could have met it if they had been 
reclassified.
    Since issuing the policy, EPA granted attainment extensions 
to seven areas. Environmental groups filed legal challenges 
against the policy in five of those seven areas, and in three 
of these cases the courts found that the Clean Air Act does not 
authorize the policy. Because of these court rulings, EPA has 
withdrawn attainment date extensions and we are moving to bump-
up the areas subject to litigation. Because of the court cases, 
we do not intend to apply the attainment date extension policy 
to any other areas of the country.
    Upwind reductions are still necessary for several areas to 
achieve attainment, and it is likely that EPA will have to 
bump-up additional 1-hour nonattainment areas because of 
transport. We continue to believe that this is not the most 
effective way to achieve clean air, and we continue to believe 
that the attainment date extension policymakes sense.
    Again, thank you for the opportunity to testify, and I 
would be pleased to answer any questions you may have.
    [The prepared statement of Hon. Jeffrey Holmstead follows:]
 Prepared Statement of Jeff Holmstead, Assistant Administrator, Office 
       of Air and Radiation, U.S. Environmental Protection Agency
                              introduction
    Mr. Chairman and Members of the Subcommittee: Thank you for the 
invitation to provide information on EPA's attainment date extension 
policy for areas affected by pollution transport, and the impact of 
recent court decisions on this policy.
    Over the last decade, we have learned a great deal about 
``transported'' pollution. We know that pollution is often transported 
great distances--often across state boundaries. We also know that a 
number of cities have not been able to meet Clean Air Act deadlines for 
complying with the 1-hour ozone air quality standard because they are 
significantly affected by pollution from upwind sources located in 
other cities or other states. In most cases, these upwind sources are 
required to reduce their emissions under EPA interstate ozone transport 
rules or state clean air plans. These reductions will allow many 
downwind cities to meet the ozone standards, but these cities still 
face a timing problem: Under the Clean Air Act, they have compliance 
deadlines that are earlier than the dates by which the upwind sources 
are required to reduce their emissions--the very emissions that are in 
large part responsible for poor air quality in the downwind areas.
    In order to address this problem, EPA adopted its ``attainment date 
extension policy'' in 1998 and granted qualifying downwind cities 
additional time to meet the standard. To qualify for an extension, the 
cities had to meet a number of requirements, including a showing that 
they had imposed on their local sources all the reasonably available 
controls that would result in meeting the standard sooner.
    For the reasons set forth below, we continue to believe the 
attainment date extension policy, which was issued during the Clinton 
Administration, makes sense from a policy perspective. The courts have 
determined, however, the Clean Air Act does not provide legal authority 
for the policy. As a result, EPA is taking steps to comply with the 
court decisions in areas affected by the litigation, and is not able to 
apply the policy in other areas affected by upwind transport of 
pollution.
    Mr. Chairman, in the remainder of my testimony, I will review in 
more detail the policy, its history and rationale, and how recent court 
decisions have affected both EPA's policy and areas affected by upwind 
pollution more generally.
                       clean air act requirements
    When Congress amended the Clean Air Act in 1990, many areas of the 
country had not met the 1-hour ozone standard EPA set in 1979. As a 
result, Congress established a new framework and new minimum 
requirements for ozone nonattainment areas.
    The revised Act called for ozone areas to be classified according 
to the severity of their air quality problems--marginal, moderate, 
serious, severe, or extreme. Under this structure, an area with a more 
serious pollution problem is subject to more stringent control 
requirements and is allowed more time to meet the ozone standard. The 
Act set the following deadlines for meeting the 1-hour standard: 1993 
for marginal areas; 1996 for moderate areas; 1999 for serious areas; 
2005 or 2007 for severe areas; and 2010 for extreme areas.
    The Act established specific consequences for areas that fail to 
meet the standard on time. A marginal, moderate or serious area must be 
reclassified--or ``bumped up''--to a higher classification and must 
meet the requirements of that new classification. Depending on the 
classification, those requirements could include: enhanced inspection 
and maintenance for motor vehicles; reformulated gasoline; and controls 
on smaller pollution sources. (See Appendix for list of requirements.) 
A severe or extreme area is subject to stationary source fees and 
certain other requirements, rather than reclassification.
                   transport and attainment deadlines
    During the 1990s, it became clear that interstate transport is a 
more serious and widespread contributor to ozone nonattainment than 
previously understood. Both ozone and nitrogen oxides (which react with 
VOC to form ozone) can travel long distances.
    A number of areas found it difficult or impossible to attain the 
standard on time because of interstate transport, even though they had 
implemented the local control measures required for their 
classification.
    Based on a determination that transport was significantly 
contributing to ozone nonattainment in the eastern United States, EPA 
in 1998 issued an interstate transport rule known as the NOX 
SIP call. The rule required 22 states (currently 19 states, due to 
litigation) and the District of Columbia to significantly reduce their 
NOX emissions. This rule will dramatically reduce the 
interstate transport of ozone and will help many areas to meet both 1-
hour and 8-hour ozone standards.
    Despite this action, several cities still faced problems because of 
two deadline inconsistencies:

 First, the compliance date for upwind controls required by the 
        NOX SIP call (May 2004) is later than the attainment 
        dates for moderate and serious areas (1996 and 1999, 
        respectively).
 Second, upwind areas classified as severe have later attainment 
        dates, but pollution from those areas can affect downwind 
        moderate or serious areas, which have earlier deadlines for 
        meeting the standard. Houston, for example, has a 2007 
        attainment date. Houston emissions adversely affect air quality 
        in Beaumont, which originally had a 1996 attainment date.
                  the attainment date extension policy
    These timing problems led EPA to develop a policy to assist areas 
significantly affected by transport by allowing those areas to take 
credit for future controls required of upwind areas. The Agency issued 
that policy, ``Extension of Attainment Dates for Downwind Transport 
Areas,'' July 16, 1998, and later published it in the Federal Register. 
The policy provided guidance on extending attainment dates for moderate 
and serious ozone nonattainment areas that were significantly affected 
by transported pollution.
    The extension policy was designed to ensure that areas 
significantly affected by transport are not required to implement 
costly local control measures that will not result in meeting the 1-
hour ozone standard sooner. Without the attainment date extension 
policy, several downwind cities would have been required to adopt 
additional local controls specified in the Clean Air Act in order to 
receive a later attainment date. EPA took the position that requiring 
these additional controls on local sources was not the best solution 
when: 1) upwind sources significantly affected an area's ability to 
meet the 1-hour ozone standard; 2) the affected area already had 
adopted measures to control its local share of the problem; and 3) the 
area would meet the 1-hour ozone standard through required reductions 
from upwind sources.
    To qualify for an extension under this policy, a nonattainment area 
was required to:

 Show that it was affected by transport from (1) an upwind area in the 
        same state with a later attainment date and that significantly 
        contributes to the downwind area's nonattainment problem, or 
        (2) an upwind area in another state that significantly 
        contributes to the downwind area's nonattainment problem (i.e. 
        states subject to the Nox SIP call).
 Adopt all local measures required of the area's classification and 
        any additional measures needed to demonstrate attainment.
 Submit an approvable attainment demonstration, including the 
        necessary adopted local measures, showing that the area would 
        attain no later than the time upwind controls must be in place 
        (i.e., by the compliance date of the NOX SIP call, 
        or by the attainment date for the upwind area).
 Implement all adopted measures as expeditiously as practicable and no 
        later than the time the upwind reductions needed for attainment 
        will be achieved.
    The policy was designed to ensure that the air quality standard 
would be met. It provided the possibility of an extension only when 
statutory or regulatory provisions--the NOX SIP Call rule, 
or the upwind city's attainment date--require that upwind reductions 
would be achieved by a date certain.
    EPA approved attainment date extensions for seven areas: 
Metropolitan Washington (including the District of Columbia and parts 
of Virginia and Maryland); St. Louis, MO-IL; Atlanta, GA; Beaumont-Port 
Arthur, TX; Baton Rouge, LA; Greater Connecticut (Hartford); and 
Western Massachusetts (Springfield).
                    litigation and status of policy
    Environmental groups filed legal challenges to EPA's policy in all 
of the seven areas except Greater Connecticut and Western 
Massachusetts. Federal Courts of Appeals ruled that the Clean Air Act 
does not provide legal authority for the policy in cases involving 
Metropolitan Washington (D.C. Circuit), St. Louis (7th Circuit) and 
Beaumont-Port Arthur (5th Circuit). Following those rulings, EPA 
requested and received voluntary remands of the attainment date 
extension in cases involving Baton Rouge and Atlanta.
    In light of the court rulings regarding EPA's legal authority for 
the policy, EPA does not intend to apply the policy to any other areas 
in the country. EPA has been fully complying with the court decisions 
by withdrawing attainment date extensions and moving to bump up the 
areas subject to the litigation.
    However, EPA continues to believe the purposes of the policy are 
legitimate for the reasons I have stated above. Transport continues to 
occur between 1-hour ozone nonattainment areas such as Houston and 
Beaumont-Port Arthur, and between Washington and Baltimore. Upwind 
areas in other states also continue to affect downwind nonattainment 
areas such as Atlanta, and upwind reductions still are necessary for 
some areas to meet the standard. We believe pollution transport is 
likely to be an issue in implementation of the 8-hour standard as well.
                    status of extension policy areas
    EPA already has taken several regulatory actions in response to the 
court decisions. Following is the current status of each of the five 
cities:
     St. Louis: The most recent air quality data have demonstrated 
that the St. Louis-East St. Louis metropolitan area is meeting the 1-
hour ozone standard. On May 12, 2003, EPA redesignated the area as an 
attainment area.
    As required by the 7th Circuit decision, EPA issued a notice 
January 30, 2003, bumping St. Louis from ``moderate'' to ``serious.'' 
However, the reclassification is no longer in effect because of the 
redesignation to attainment. Missouri and Illinois are no longer 
required to submit a new 1-hour SIP with ``serious'' area control 
measures for St. Louis because the area met the standard and was 
redesignated before the deadline for the state to submit the new 
control measures.
    The Sierra Club in July filed petitions for review in the 7th and 
8th Circuits challenging the St. Louis redesignation.
     Metropolitan Washington, D.C.: EPA published a notice on January 
24, 2003, determining that the area had failed to attain the 1-hour 
standard as of November 1999 and that the area had been reclassified as 
``severe'' by operation of law. EPA also published a final rule on 
April 17, 2003, providing conditional approval of the area's 1-hour 
severe area attainment SIP and 1996-99 rate-of-progress plans (now 
required as a result of the court decision).
    The Sierra Club filed petitions for review of the conditional 
approval and the reclassification. The petition on the bump up takes 
issue with the deadlines for submitting certain additional severe area 
SIP elements but not with the reclassification itself.
     Beaumont-Port Arthur: On June 19, 2003, EPA published a proposed 
rule to reclassify Beaumont-Port Arthur as ``severe'' or, in the 
alternative, ``serious.''
    In response to a request by the South East Texas Regional Planning 
Commission, EPA provided a 30-day extension of the comment period to 
August 20, 2003.
     Baton Rouge: Because of the 5th Circuit decision in the Beaumont-
Port Arthur case, EPA on April 24, 2003, issued a final rule finding 
that the Baton Rouge area did not attain the 1-hour ozone standard by 
its 1999 deadline, and provided notification that the area is 
reclassified to ``severe'' by operation of law.
     Atlanta: As a result of other adverse court decisions, EPA 
voluntarily requested vacatur of EPA's approval of the Atlanta 
attainment plan that relied on the attainment date extension. The 11th 
Circuit Court of Appeals granted that motion in an order dated June 16, 
2003. EPA expects in September to determine whether Atlanta attained 
the ozone standard by its 1999 deadline, and if not, provide 
notification that Atlanta is reclassified as ``severe'' by operation of 
law.
    The additional statutory requirements resulting from bump-up to 
``serious'' or ``severe'' are shown in the list of requirements in the 
Appendix to this testimony. The actual impact on an area may be less 
than the list of requirements implies, because some areas have 
previously adopted some of the listed measures as part of their 
attainment demonstrations.
           future impact of court decisions on downwind areas
    Mr. Chairman, you also asked me to address the impact of the court 
rulings on downwind nonattainment areas in the future.
    The federal courts have been very clear: The Clean Air Act provides 
no authority for extending an area's statutory attainment date based on 
pollution transport without bumping up the area to a higher 
classification, which triggers additional local control requirements. 
This means that any ozone nonattainment area classified under subpart 2 
that misses its attainment date must be bumped up within six months of 
the attainment date, even if transport contributes to its pollution 
problem.
    There is one exception: the Act does provide for up to two one-year 
extensions for an area that is very close to meeting the standard.
    We do not anticipate that many additional 1-hour ozone areas are 
likely to seek relief from the Act's bump-up provisions because of 
pollution transport problems, although this issue might arise in a few 
areas. Two possible examples are Portland, Maine; and Dallas.
    The President recently proposed legislation known as the Clear 
Skies Act that, among other things, would further reduce instate 
transport of ozone and NOX (an ozone precursor) from the 
power sector through a cap-and-trade program similar to the acid rain 
program. Clear Skies would further reduce regional ozone in the East 
beginning in 2008. These reductions are beyond the levels required 
under the NOX SIP call. The Clear Skies reductions would 
enable several additional areas to meet the 8-hour standard without 
imposing any additional local controls. A number of other areas would 
find it easier to meet the 8-hour standard because of the additional 
reductions in power plant emissions that would be required under Clear 
Skies. However, the Agency has not made a determination that such 
reductions are warranted under the transport provisions of the Act. In 
order to evaluate this issue, the Agency intends to investigate the 
extent, severity and sources of interstate ozone transport that will 
exist after the existing transport rules are implemented in 2004. 
Prompt action to reduce interstate pollution transport would minimize 
the extent to which interstate transport could interfere with areas 
meeting their attainment dates for the 8-hour standard. Even so, there 
could be 8-hour areas with early attainment dates that are earlier than 
the compliance date for upwind facilities in the same state or other 
states. Timely identification and control of sources causing pollution 
transport are necessary if states and EPA are to minimize this problem.
    Mr. Chairman, thank you for the opportunity to testify. I would be 
happy to answer any questions from you and members of the subcommittee.
                                Appendix
Moderate Area Requirements
 Attainment demonstration
 15 percent volatile organic compounds (VOCs) reduction plan (first 
        six years)
 Basic I/M
 VOC reasonably available control technology (RACT) rules for control 
        technique guideline (CTG) categories and major stationary 
        sources (100 tons per year)
 NOX RACT rules for certain major combustion sources
 New source review (NSR) major source thresholds (100 tpy) and offset 
        ratio (1.15 to 1)
Serious Area Requirements
 Requirements for moderate areas, plus
 Enhanced I/M
 Enhanced ambient monitoring
 Attainment demonstration with photochemical grid modeling
 Contingency Measures (for failure to meet 15 percent plan)
 3 percent rate of progress (ROP) plan to attainment year
 Clean fuels program
 Vehicle miles traveled (VMT) demonstration
 Stage II gasoline vapor recovery
 NSR major source thresholds (50 tpy) and offset ratios for serious 
        areas (1.2 to 1)
 Major source thresholds (50 tpy) for RACT and Title V permits
Severe Area Requirements
 Requirements for serious areas, plus
 Reformulated gasoline
 VMT growth offsets
 Major source fees for failure to attain
 NSR major source thresholds (25 tpy) and offset ratios for severe 
        areas (1.3 to 1)
 Major source thresholds (25 tpy) for RACT and Title V permits

    Mr. Barton. Thank you, Mr. Holmstead, and we apologize for 
the microphones. The chairman recognizes himself for the first 
5 minutes of questions.
    Mr. Allen, the Congressman from Maine, indicated that they 
have a transport problem in his state, and that they have been 
working to solve it. He didn't indicate that he wished that 
there might be a codification of the policy that is under 
question.
    My understanding is that Portland was classified as a 
moderate nonattainment area under the Clean Air Act in 1990, 
and that they were supposed to be in compliance by 1996, but 
they are not in compliance. Is that true or not true, or do you 
know?
    Mr. Holmstead. Off the top of my head, I don't know the 
answer to that question.
    Mr. Barton. Could you get us the information and whether 
they were able to get in compliance. My understanding is that 
they are not in compliance, but they haven't been sued, that 
they are obviously working in good-faith, which they are to be 
commended on, but that they could be sued and they could be 
penalized fairly severely, or bumped-up into a more severe 
nonattainment status.
    Mr. Holmstead. My staff informs me that you are correct, 
that they still are in nonattainment, and have not met the 
attainment policy at this point, although we have not yet moved 
to bump them up.
    Mr. Barton. Okay. In your written statement, you indicated 
that EPA continues to believe, and I quote, ``that the 
attainment date extension policymakes sense from a policy 
perspective.'' While court cases have invalidated what seems to 
me to be a common-sense policy, it would now logically mean 
that if EPA continues to believe that that extension 
policymakes sense from a policy perspective, that Congress 
should explicitly codify or legislate so that there is an 
extension policy. Do you agree with my assessment, and what do 
you think of--if you are allowed to make a statement--on 
legislating in this area?
    Mr. Holmstead. I can say that we, as my statement 
indicates, continue to believe that this makes good sense, and 
that we would support codification of the attainment date 
extension policy.
    Mr. Barton. Okay. Are there areas of the country that are 
likely to be bumped-up, say, in the next year or so, if 
Congress doesn't do something in this area?
    Mr. Holmstead. Yes, I believe that there are some 
additional areas that would likely be bumped-up. I could 
provide that information to you for the record.
    Mr. Barton. If you could do that, that would be 
appropriate. And if an area is moved into a more severe 
nonattainment area, doesn't that, in fact, reduce the 
flexibility about solutions that EPA has in working with the 
State and local governments--in other words, the higher the 
classification, the more severe the classification, the less 
flexibility is in exerting a remedy to the nonattainment 
status?
    Mr. Holmstead. The real issue is that when you are bumped-
up to the next highest classification, then additional 
mandatory requirements in that area take effect--in some cases, 
regardless of whether they actually would help that area to 
reach attainment any sooner.
    Mr. Barton. And my last question, do you agree or disagree 
that the more sophisticated we get in monitoring, i.e., the 
better able we are to collect actual data on the ground, the 
more possible it is to discern where the pollution is 
occurring? In other words, the more monitoring stations we have 
that are actually collecting data, not just computer models 
that are postulating, you can more reasonably ascertain where 
the pollution is coming from today than you could, say, 10 or 
15 years ago, is that true or not true?
    Mr. Holmstead. Yes, that is absolutely correct.
    Mr. Barton. So if a region comes in and says, ``We are in 
nonattainment, we understand that, and we have got a program in 
place that is trying to improve the air quality--in fact, from 
local sources we think we are reducing the emissions--but there 
is not much we can do about that area that is 2-300 miles from 
us, we can't control them''--I guess to be colloquial, the 
local governments that are coming in and saying, ``We need some 
help because we can't control beyond our territorial 
jurisdiction,'' they actually have data to back that up.
    Mr. Holmstead. I think that is right. And as we talked 
about just last week, one of the things that we are trying to 
accomplish is this dramatic kind of regional reduction in 
pollution under the Clear Skies Act because of this very 
problem. I think back in 1990, as you well remember, there was 
some understanding of transport, but by no means as 
sophisticated as we have now. We really are focusing on the 
need to reduce pollution at a regional level, not just at a 
local level.
    Mr. Barton. We know a lot more than we knew 13 years ago, 
and our data-collection ability is much more comprehensive than 
it was 13 years ago, so there is every reason to look at 
bringing the statute up-to-date in this area.
    Mr. Holmstead. I would agree with that, yes.
    Mr. Barton. I would now recognize the gentleman from 
Virginia for 5 minutes.
    Mr. Boucher. Thank you, Mr. Chairman. Good morning, Mr. 
Holmstead, I would like to welcome you here this morning. I 
would just like to confirm with you two elements of the policy 
that was adopted for granting extensions during the time of the 
Clinton Administration, the policy which was later invalidated 
by various courts of appeal.
    First of all, would you confirm that the extensions under 
the previous policy were only granted if the community that is 
seeking the extension, the downwind community, would be in 
compliance itself were it not for the pollution coming from the 
upwind community?
    Mr. Holmstead. I don't think we have expressed it in quite 
that way, but I think that is correct. The way the policy works 
is when we know that upwind sources are reducing their 
pollution, that if the area takes those into account, those 
reductions, and plus takes all the additional local measures it 
needs to take to meet attainment, then it can take advantage of 
the policy.
    So the idea is not to let local governments off the hook. 
It is to let them take account of things we know are happening 
upwind. If they show that with those upwind reductions they 
have taken all the local measures that they need to reach 
attainment, then they can qualify.
    Mr. Boucher. Well, this is an important distinction, and I 
was under the impression that as the policy was applied during 
the Clinton Administration, the only time an extension would be 
granted was when the downwind community had modeling data or 
other evidence sufficient to show that they were not the source 
of the nonattainment problem, that it was entirely the upwind 
community that was the source of the problem, and that the 
downwind community would, in fact, be in compliance were it not 
for the ozone being transported in from somewhere else. Does 
that not correctly state the previous policy?
    Mr. Holmstead. Again, I was just trying to confer with my 
staff. I think as a practical matter, that is correct. We have 
just expressed it in a somewhat different way.
    Mr. Boucher. That is the effect of the policy.
    Mr. Holmstead. Yes, it is.
    Mr. Boucher. It is important, I think, to establish that 
principle.
    Mr. Holmstead. It only does apply when there is a real 
transported problem.
    Mr. Boucher. Well, I understand that, but you could have a 
transported problem adding to a locally originated problem, and 
if the local community, because of its own local sources of 
pollution, would not be in compliance, then as I understand the 
extension policy, at least as it existed in the prior 
Administration, the local community, the downwind community, 
would not qualify for the extension.
    Mr. Holmstead. As a practical matter, that is correct.
    Mr. Boucher. Okay, thanks. Now, let us move on to another 
principle. When you grant an extension under that policy, let 
us confirm that the timing of the extension is for only so long 
as is necessary to bring the upwind community itself into 
compliance.
    Mr. Holmstead. Again, that is correct. The extension is 
only until the time that those upwind sources will be 
controlled.
    Mr. Boucher. Okay. Now, the question I have for you is, you 
have indicated to the chairman--and I was frankly pleased to 
hear you say this--that you would support a codification of the 
ability of EPA to grant extensions in accordance with the 
previous policy. And I would assume that you are therefore 
endorsing these two principles that we have just established, 
and that those would be a part of any codification that we 
might choose to adopt. Is that correct?
    Mr. Holmstead. That is correct, yes.
    Mr. Boucher. Okay. I just have one more question, Mr. 
Holmstead. Can you tell us how many communities would qualify 
for the extension, as we have just described it, under the 
existing 1-hour standard? And then can you also tell us how 
many communities around the country would qualify for the 
extension when the transition to the 8-hour standard is 
complete? And if you don't have that information today, it is 
very relevant for our consideration, and I would appreciate you 
supplying it. Do you have it today?
    Mr. Holmstead. I don't have it today, but we would be happy 
to provide that for the record.
    Mr. Boucher. Thank you very much, Mr. Holmstead. Thank you, 
Mr. Chairman.
    Mr. Barton. The gentleman from Kentucky is recognized for 8 
minutes.
    Mr. Whitfield. Thank you, Mr. Chairman. Mr. Holmstead, 
thanks for being with us today. I also am glad to hear that you 
do support the codification of the ability for EPA to grant 
extensions in these situations, and I think probably most 
members probably feel that way.
    I notice that in Los Angeles, for example, I guess right 
now they are at a severe level, and if they do not come in 
compliance within the allowed time, what happens in that 
situation?
    Mr. Holmstead. This is very esoteric. There is all these 
classifications. Los Angeles is actually extreme, which is the 
highest classification. Severe is the next level down. In those 
two categories, if a city is classified as either extreme or 
severe and they do not meet their attainment date, at that 
point the Clean Air Act requires that they begin to impose fees 
on the major sources, on the significant sources of solution. 
So in that case, the penalty is not a bump-up, it is the 
imposition of these pollution fees which turn out to be, I 
believe, about $7,000 a ton pollution. So, effectively, at that 
point, a kind of a tax is imposed on the sources of pollution 
within that city.
    Mr. Whitfield. And are these the so-called Section 185 
penalty fees?
    Mr. Holmstead. That's correct, yes.
    Mr. Whitfield. And do we have any idea what the maximum 
penalty could be for Los Angeles at $7,000 per ton? Do you have 
any idea what that could be?
    Mr. Holmstead. Off the top of my head, we could certainly 
calculate that. I suspect it would be a very big number.
    Mr. Whitfield. Well, I was reading the Mayor of Baton 
Rouge's testimony, and he indicated in his testimony that Baton 
Rouge has exceeded the levels only one or 2 days out of the 
last 3 or 4 years, and he indicated that if they are bumped-up 
from serious to severe, that they would be required, I believe, 
to use reformulated gasoline. Is that true?
    Mr. Holmstead. That is correct.
    Mr. Whitfield. And he said that that would be at a cost--an 
estimate of $72 million, I believe. And then he said that if 
they were not able to meet the attainment requirements under 
the severe classification, that the section 185 penalties could 
be in the neighborhood of $100 million I guess per year.
    Mr. Holmstead. I am not familiar, but that doesn't sound 
out of the--that could certainly be correct. And, again, one of 
the things that I think you are pointing out is it seems a 
little counterintuitive that we are required to bump them up to 
severe when, in fact, they have just about taken care of their 
problem. So, with a little bit more time, we think they will 
solve their problem, and they seem to be definitely headed in 
the right direction.
    Mr. Whitfield. I can't imagine that Congress intended that 
a city would be required to spend $172 million--and that is not 
including monitoring equipment and other things--when they have 
exceeded the guidelines only one or 2 days out of a 3-year 
period of time. There is something that doesn't seem right 
about that kind of a system.
    I was also curious, are there cities or communities around 
the country today that are paying these 185 penalty fees?
    Mr. Holmstead. Not at this point. And, again, that is 
because the areas that are classified as severe or extreme had 
a much longer time to come into attainment, and so we are not 
yet at the point where those fees would be imposed. And I think 
even for Baton Rouge, it would be a number of years before that 
fee would be imposed.
    Mr. Whitfield. Was that like the year 2010, is that what we 
are talking about?
    Mr. Holmstead. This is a very complicated area, so I am 
delighted to have Lydia Wegman sitting behind me, who knows the 
answers to all of these questions. We will first face that 
issue in 2005, and then 2007, and then additional attainment 
dates come along. So the point in time at which we may face 
that issue is not that far away.
    Mr. Whitfield. So 2005, 2006. And Los Angeles would be 
probably subject to those fines in 2005 or 2006.
    Mr. Holmstead. I believe their attainment date is much 
later because they are the only extreme area in the country. In 
1990, the Congress gave them more time to come into 
attainment--2010, I am told.
    Mr. Whitfield. 2010.
    Mr. Holmstead. Yes.
    Mr. Whitfield. Okay. Mr. Chairman, I will yield back the 
balance of my time.
    Mr. Barton. Thank the gentleman from Kentucky. I believe 
the gentleman from California, Mr. Waxman, is recognized for 5 
minutes for questions.
    Mr. Waxman. Thank you, Mr. Chairman. Mr. Holmstead, for us 
to evaluate the request from EPA, we need to have a complete 
record, so I want to ask your cooperation in helping us 
assemble that record.
    First of all, I would like to submit for the record of the 
committee a report from the environmental integrity project 
entitled ``Accidents Will Happen.'' This report analyzes 
emissions resulting from startup, shutdown, and malfunctions at 
refineries and chemical plants in Port Arthur, Texas. According 
to the report, these facilities are releasing hundreds of tons 
of unpermitted pollution and technology is available to address 
the problem.
    I would also like, Mr. Chairman, to submit for the record 
correspondence to Mr. Holmstead from the environmental 
community on this issue.
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    Mr. Barton. Mr. Waxman, if you will share those with our 
counsel, our presumption is that we will put them in the 
record, but we obviously reserve the right to examine them 
before we do.
    Mr. Waxman. I have no problem with that, Mr. Chairman. We 
will submit that to you and you can examine it, and we would 
like to have it in the record.
    Mr. Holmstead, I would like to request of you that you 
provide your response to the letter for the record, and I would 
like to ask if you would be willing to do that.
    Mr. Holmstead. I am not familiar with----
    Mr. Waxman. This is a letter that was sent to you and 
presumably you are going to send a response to them, and we 
would like to have that sent to us.
    Mr. Holmstead. Absolutely. When we send a response, we will 
provide that to you. And we agree, by the way, that the issue 
of startup and shutdown emissions is something that we really 
need to focus on. And I think, in fact, we are focusing on 
that, but I think that is an excellent point.
    Mr. Waxman. It is my understanding that there have been 
similar problems with facilities in Baton Rouge. Mr. Holmstead, 
would you provide EPA's analysis on the role these facilities 
and their unpermitted releases play in the failure to attain 
clean air standards in Port Arthur and Baton Rouge, and we 
would like that for the record.
    Mr. Holmstead. To the extent that we have that analysis, we 
would be happy to provide it.
    Mr. Waxman. With regard to Atlanta, the subcommittee has 
received testimony that Atlanta will need to adopt additional 
control measures in order to attain the 8-hour ozone standard. 
If that is the case, it is apparent that Atlanta needs to be 
doing more, not less, to address its pollution problems.
    Mr. Holmstead, has the EPA modeled what additional controls 
are necessary for Atlanta to attain the 8-hour standard?
    Mr. Holmstead. That is, as I think you know, ordinarily 
what the local and State governments do. So what we analyzed is 
how much cleaner their air would be because of certain Federal 
actions such as the non-road diesel rule coupled with Clear 
Skies. So what we can say is that they would be much closer to 
attainment than they are today because of these Federal 
actions. Exactly what additional local controls are necessary 
is not something that the Federal Government would normally do.
    Mr. Waxman. And if the local government did such modeling, 
would they submit it to EPA?
    Mr. Holmstead. They would at the time that they prepared 
their SIP, but we do not yet--as I think you know, the way the 
Clean Air Act works is we have to do nonattainment designations 
in April of next year, and then the States have 3 years to 
submit their SIP to us, and we have up to 18 months to approve 
them. So, we won't see that modeling for several years still.
    Mr. Waxman. Well, we would like to have whatever you have 
in your files in that regard. I want to also request that you 
submit for the record EPA's analysis of what controls will be 
necessary in each of the areas discussed here today to attain 
the 8-hour standard. And, finally, we would like to ask you to 
submit for the record EPA's analysis of each area's pollution 
contribution from regional and local sources. This information 
submitted to us will help give us a more complete record so we 
can evaluate the issues before us, and we would appreciate your 
cooperation.
    Thank you very much, Mr. Chairman, yield back my time.
    Mr. Barton. We thank the gentleman, and if we get those 
documents, we will try to review them during the hearing.
    The gentleman from Illinois is recognized for 8 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. Mr. Holmstead, good 
to see you again. Let me start with where we left off last 
week, I guess, or 2 weeks ago.
    How might enactment of Clear Skies legislation affect the 
current and future situation with bump-up under Title I?
    Mr. Holmstead. As I indicated earlier, Clear Skies 
dramatically reduces this regional pollution, especially 
throughout the eastern United States. I don't recall the exact 
numbers, but I think that what we show is 70 or 80 percent of 
the counties that are now out of attainment, would come into 
attainment without any additional local controls. So to some 
extent, it just takes that issue completely away for most of 
the communities, and it is only some of the major urban areas 
that have the most serious problems that would continue to be 
in nonattainment beyond 2010. So, the obvious answer is by 
reducing this regional pollution it makes the problem go away 
for most areas.
    Now, the other thing that we have tried to do in Clear 
Skies is recognize this issue about the so-called bump-ups. And 
if an area has met certan requirements, then they could avoid a 
bump-up the way the Clear Skies Act is structured, but the most 
important thing is it just solves the nonattainment problem for 
the vast majority of areas in the United States, especially in 
the eastern United States.
    Mr. Shimkus. And as I remember the map, I mean, that was 
pretty significant as far as--I think they were in red--and I 
asked that to be called up. Obviously, I am from southwestern 
Illinois or the metro east portion of St. Louis community, and 
even with Clear Skies the counties of Madison and St. Claire 
right across the river, still will be in the projection, still 
be in nonattainment, and still would be under whatever the 
restrictions are.
    So,I was interested in the comments of Mr. Boucher because 
there is refinery capability in those two counties, but there 
is also obviously the transport issue from the St. Louis 
metropolitan area, hence, part of the confusion over the 
attainment status of the region today with not being in but 
being considered--for the common layman, it is pretty hard to 
figure out the terminology. So we will keep working that.
    I want to move on to a question. In the past, did EPA 
provide guidance to States and local agencies on how to comply 
with the ozone standard based upon information that would be 
considered obsolete or less than state-of-the-art today?
    Mr. Holmstead. I think the answer to that is probably yes. 
I don't want to single out any specific policy, but it is 
just--as I think everybody who works in this area knows, we 
have learned a lot in the last 20 years. The approaches that we 
would recommend to States and local governments, and the 
approaches they adopt, have become more sophisticated.
    Mr. Shimkus. And I want to follow up on that because as 
part of the chairman's line of questioning on technology, and I 
have been a big proponent in following legislation in the past 
on a piece of legislation we tried to address in the last 
Congress on the Gas Act because of the 45 different fuel 
standards around the country, fuel is one of--and I talked 
about this last week and, of course, learned a lot about the 
differences--but the reality is I continue to tell people if I 
fly into my airport of St. Louis and drive to the northern part 
of my district, which is Springfield, Illinois, you in essence 
go through three different fuel blend areas for the same 
regular unleaded fuel because of the then-known technology to 
meet the standards imposed.
    So I would submit that the EPA, in not moving forward, not 
changing, not using new science, has some responsibility for 
where we are at today, and especially in the energy debate, Mr. 
Chairman, the fuel price spikes that we have addressed, and 
inability to move fuel from one area to another region, and the 
like.
    Let me ask another line of questions to deal with the 
controversial Subpart 2. What technical or specific cost-
benefit analysis did EPA perform with respect to the specific 
control measures contained in Subpart 2?
    Mr. Holmstead. I am not aware that the agency did any 
specific analysis on each of those. As I think you know, 
Subpart 2 was adopted by Congress in 1990, and so I am sure we 
provided some advice during that process, but I am not aware 
that we have any specific cost-benefit analysis of that.
    Mr. Shimkus. No cost-benefit, maybe some general technical 
information, but--so you would probably make the assumption 
then that Subpart 2 was really almost the political give-and-
take compromise aspect of the movement of legislation?
    Mr. Holmstead. Well, there was a lot of thinking that went 
into it but, in the end, of course, it is the product of that 
sort of political give-and-take. And, clearly, in general 
terms, it works fairly well, but there may be some specific 
things that aren't ideally suited for certain areas. I think 
that is probably fair to say.
    Mr. Shimkus. And severe areas under Subpart 2 employ a 25-
ton definition for major sources. What types of and sizes of 
businesses are we talking about when we address that standard?
    Mr. Holmstead. It doesn't take much to be a 25-ton source. 
You could be talking auto body shops. I suppose at that level 
there could even be a large bakery or something that would be a 
25-ton source.
    Mr. Shimkus. What we would consider small businesses?
    Mr. Holmstead. Certainly, yes.
    Mr. Shimkus. Would that also affect agricultural sources?
    Mr. Holmstead. Again, as you well know, this is very 
complicated. It has to do with whether their emissions are 
considered fugitive emissions or point source emissions. And 
so, typically, you wouldn't pick up a lot of agricultural 
sources unless they had onsite a big engine, a big pump or 
something. So, again, I can't answer definitively because it 
would depend source-by-source, but you wouldn't pick up 
probably a lot of agricultural sources.
    Mr. Shimkus. If you could--and I don't care formal-wise or 
informal-wise--just give me an analysis on the agricultural 
impact on the 25-ton limit, I would--of the Subpart 2, I would 
appreciate that.
    And I would just then end by thanking you for coming. I 
think my colleagues need to realize that, as the chairman says, 
we have got new science, we have got new technology, we have 
got new abilities, and hopefully working together we can move 
to a better, more sustainable, cleaner environment that helps 
protect jobs and economic development and the like. And I think 
we are moving in the right direction, and so I appreciate the 
chairman having this hearing.
    And, Mr. Chairman, I will yield back my time, which is 5 
seconds over.
    Mr. Barton. We will excuse you for that. Mr. Allen is next 
in line, if he wishes to ask questions.
    Mr. Allen. If I am next in line, I will go. Thank you, Mr. 
Chairman.
    Mr. Holmstead, in your testimony you state that during the 
1990's it became clear that interstate transport is a more 
serious and widespread contributor to ozone and nonattainment 
than previously thought. That State seems to me just to be an 
example of how difficult it is to predict future air emissions 
problems, would you agree with that?
    Mr. Holmstead. We certainly continue to learn over time. I 
think we are much better than we were, especially on ozone 
where we have really been studying for quite a while now.
    Mr. Allen. Hopefully we will be better in 15 years than we 
are today.
    Mr. Holmstead. I hope so, yes.
    Mr. Allen. Two weeks ago, in front of this subcommittee, 
you went so far to guarantee--guarantee--that the Clear Skies 
proposal would bring all nonattainment areas in the northeast 
into attainment. And based on this guarantee--your word--you 
asked us to agree with you that Section 126 of the Clean Air 
Act is unnecessary.
    It seems to me you can't possibly guarantee that Clear 
Skies will bring Portland, Maine into attainment. I just don't 
understand how you could make that statement.
    So the question is, why--why did the Administration insist 
on altering Section 126 of the Clean Air Act, if you are right 
that Clear Skies will bring every area in the northeast into 
attainment, then Section 126 would die by default. But if you 
are wrong, then States would have no recourse, at least no 
recourse through 126.
    Mr. Holmstead. First of all, whenever I use the word 
``guarantee,'' I try to make sure I think very carefully about 
what I say, and I don't believe I said every part of the 
northeast because I think our modeling shows that there would 
be some areas--I think Philadelphia continues to--is very close 
to the standard, but doesn't quite get there.
    I think I can reiterate my guarantee for Portland, Maine. 
Even though we may continue to learn, we know a lot about air 
pollution, and we are confident enough in our modeling that for 
Portland, Maine Clear Skies would solve the problem.
    The reason that we have looked--and, again, we are not 
eliminating Section 126. Section 126 would remain available for 
all other sources, other than plants that are actually covered 
by the legislation. The idea is that in exchange for these very 
tight additional controls, these sources would get regulatory 
certainty at least for a period of time. And so the idea is 
because we are getting the same type of emission reductions and 
we are getting it much more quickly, that we can agree to 
suspend 126, period, while we let these controls come in.
    Mr. Allen. But if you are wrong--I mean, just take the 
point of view of the northeast, let's just call it New England 
for the moment. If you are wrong, and areas are out of 
attainment, then--and States don't have Section 126 recourse--
the States don't have the ability to generate this issue and 
put it on your doorstep in the way that we did with the Section 
126 petitions in the northeast, which led ultimately to the 
NOX SIP Call.
    What you are really saying is, trust the EPA. You are 
removing a tool that the States have today, and saying, well, 
we should just trust the EPA to protect us over the next 10 
years. And you can understand why perhaps some States aren't 
very comfortable with that.
    Mr. Holmstead. I have heard this concern a lot, that you 
are removing our tools. And I guess two of the things that I 
have been saying are, first, even if Maine and every other 
State in New England submitted 126 petitions today, we would 
not be able to get any greater emission reductions than we are 
getting under the President's proposal. So, again, the States 
haven't submitted those petitions we're well ahead in terms of 
the timing there.
    The other important thing to remember is these 126 
petitions are based on the same kind of models that we are 
using under Clear Skies. The question and the way we analyze 
126 petitions is not just where ware we today, but what will be 
the case out over the future. So, it is not really that 
different from what we have today. And, again, I think all of 
our folks feel like this is a much more effective environmental 
approach and one that remains in place.
    Mr. Allen. I understand what you believe, I do get that. 
But you can understand why others who don't have the same faith 
in Clear Skies, see a loss of power, a loss of a vehicle that 
is now extraordinarily useful for States around the country to 
assert their own claims when they have that chance.
    With that, I yield back, Mr. Chairman.
    Mr. Barton. Do you wish to comment on his last comment?
    Mr. Holmstead. Only again to say that what we have looked 
at here is not the number of provisions or regulatory tools. 
What we are trying to look at is the most effective way to 
reduce emissions as quickly as possible.
    Mr. Barton. The gentleman from Ohio, Mr. Strickland, is 
recognized for 8 minutes.
    Mr. Strickland. I will only take a few minutes, Mr. 
Chairman, thank you very much.
    Mr. Holmstead, thank you for being here today. As we move 
into the 8-hour ozone attainment process, can you tell me what, 
if any, provisions may be made available to smaller or rural 
communities that will be struggling to reach this attainment 
under the new 8-hour standard? I brought this issue up when you 
were here before a few weeks ago.
    I am concerned that economic development for these rural 
communities may be hampered under this 8-hour standard. Could 
you respond to that, please?
    Mr. Holmstead. There are some specific provisions in the 
Clean Air Act that are designed to help small businesses, and 
we have been, I think, very supportive of those efforts to 
reach out and to help people that would otherwise face 
problems.
    I hate to sound like Johnny One-Note, but I have become 
sort of a Johnny One-Note, because the more I look at all of 
these data, if Congress passes some sort of multi-pollutant 
legislation. You have heard our presentation about Clear Skies. 
I am not familiar specifically with your district, and I would 
be happy to go back and look, but I am quite sure that other 
than some major urban areas, that just solves all of the 
problem. And that is one of the reasons we have been so 
supportive of Clear Skies. So, we think that sort of focusing, 
especially in rural areas where there is very little locally 
produced pollution, that the way to do it is just to clean up 
these major sources that really do contribute to nonattainment 
throughout the whole region. So that is what, obviously, I 
would urge you to do.
    Now, within the current Act, we would look at ways that we 
could provide support and other mechanisms, but the current Act 
is fairly prescriptive. It doesn't give us a lot of 
flexibility.
    Mr. Strickland. The reason I ask that question is that I do 
represent a region which stretches for 330 miles along the 
eastern and southern border of Ohio, along the Ohio River, with 
Pennsylvania, West Virginia and Kentucky being border States to 
my district.
    Many seem to believe--and maybe my friend Mr. Allen is one 
of them, and he is a great guy and a good friend--but many seem 
to believe that my area, especially I think my area, and areas 
like the area that I represent, are a major source of the 
problem. And, of course, most of the large power plants in my 
district are located in small rural communities where there is 
great economic hardship. And so I feel internal conflict 
because I want to be concerned about and sensitive to the needs 
that someone like Tom Allen must deal with in their area, but I 
am also concerned about the problems that the coalminers and 
steelworkers and others may face in a district like mine.
    I look at your testimony here, and you use this sentence. 
You say, ``Timely identification and control of sources causing 
pollution transport are necessary if States and EPA are to 
minimize this problem.''
    I guess I would just ask, how certainly can we identify the 
sources of the transport problem? I mean, is it possible, for 
example, to say that pollution from the Ohio Valley is, in 
fact, affecting Portland, Oregon, or Boston, or some other 
city? How precisely are we able to track not only the source of 
the pollution, but the transportation aspect of the problem as 
well?
    Mr. Holmstead. We actually have very sophisticated modeling 
so that we can actually trace--for instance, from Portland, 
Maine, or from Boston, or from a city in the Midwest, and using 
that modeling data we can trace it back to its source. And we 
also have--I actually saw a presentation just a couple of weeks 
ago from some NASA satellites the track, and you can see 
visually where this comes from. I can't tell you that we know 
100 percent of the sources, but at least for the major 
pollutants, for SO2, which is sulfur dioxide, and 
for nitrogen oxides, we know a great deal now, and are able to 
identify those sources, and that is I think collectively what 
we are all trying to do, is figure out an effective and fair 
way to deal with those, while at the same time addressing the 
concerns that you have about the economic impact and the impact 
on jobs.
    Mr. Strickland. Thank you, sir. Mr. Chairman, I yield back 
my time.
    Mr. Barton. The gentlelady from Missouri is recognized for 
5 minutes.
    Ms. McCarthy. Thank you, Mr. Chairman. Thank you very much 
for being here and sharing your wisdom with us on this 
important issue.
    I wanted to visit with you a little bit about the St. Louis 
situation. I am curious, and as you know it sought successfully 
to get the bump-up extension. The Missouri delegation of 
congresspeople worked closely together on that.
    But I am wondering with the invalidation by the 7th Circuit 
Court of Appeals and St. Louis now has demonstrated it can 
attain the 1-hour standard, and the question is whether or not 
the extension is needed, but if the bump-up is codified so this 
1-hour standard becomes a substitute for actually encouraging 
conservation and responsible air quality planning, I would like 
you to elaborate on that because the St. Louis experience may 
have very well altered the structure of the Act. I think that 
is what this hearing is all about.
    We want to encourage conservative and responsible air 
quality planning. We also want to be very sensitive to 
situations such as St. Louis had. But can you elaborate on what 
progress St. Louis is making toward not meeting that 1-hour 
standard, or is that going to become part of the norm of 
activity for the future, for communities like St. Louis?
    Mr. Holmstead. St. Louis has been very aggressive in 
addressing local sources of air pollution, even though they 
were the recipient of the attainment date extension policy. And 
I think that is an example of how we would expect it to work 
and, in fact, how it would be required to work.
    I think there is a misimpression that somehow, if you get 
the attainment date extension, then you are off the hook, and 
you are sitting there not doing anything. In fact, that is just 
not the case. A city in that situation still is required to 
meet all of their specific requirements under the Clean Air 
Act.
    In addition, they are required to identify all other 
reasonably available control measures that could bring them 
into attainment any sooner. And we think that that experience 
is really the way that it should work. We shouldn't unjustly 
penalize a city that is affected by long-range transport, but 
we do need to ensure that they continue to take all of the 
steps that they need to take locally.
    And I congratulate St. Louis because I think--again, this 
is one of those strange situations where we were waiting to see 
what the data said, and I think we were all relieved to find 
out that they had met the standard for attainment. And so they 
have met the 1-hour standard. If it had one or two more 
exceedances, then we would have been required under the court 
order to bump them up to a higher classification.
    So even though they were basically clean and almost there, 
we were on pins and needles thinking that we were going to have 
to bump them up and basically tell the world they were a severe 
nonattainment area, which isn't really a reflection of the kind 
of progress they had made.
    Ms. McCarthy. And you would use that experience as a model 
as we go forward with legislation, so that other communities 
would be expected to uphold to that as they seek that 1-hour 
status or other kinds of relief under the existing law.
    Mr. Holmstead. Yes, that is correct. We would, I think, 
codify these requirements. This policy strikes, I think, the 
right balance between requiring effective local controls and 
also effective upwind controls at the same time.
    Ms. McCarthy. Mr. Chairman, just one more reason, Missouri 
is called the ``Show Me'' State. Thank you very much.
    Mr. Barton. Thank you.
    Mr. Whitfield. Mr. Chairman.
    Mr. Barton. Mr. Whitfield.
    Mr. Whitfield. I would ask unanimous consent to ask one 
more question.
    Mr. Barton. Without objection, so ordered.
    Mr. Whitfield. Mr. Holmstead, during your answer responding 
to questions from Mr. Waxman, you referred to the non-road 
diesel rule, proposed non-road diesel rule. It is my 
understand--I want you to tell me if I am right or wrong--that 
even on the diesel engines being operated on the highways 
today, pursuant to that rule, that these engines are not in 
compliance with existing environmental laws, and that there is 
a fine imposed on every diesel engine sold that is used on the 
highway. Is that correct, or is that not correct?
    Mr. Holmstead. No, that is not correct. I believe that all 
of the companies, except for maybe one, are selling engines now 
that meet the Clean Air standard, and I think even that one 
company has just announced that it has--or it is about to 
certify an engine that meets that standard. There were one or 
two companies that were paying penalties, but I believe that 
period has either ended or is coming to an end. So the vast 
majority are meeting the requirements.
    Mr. Whitfield. Thank you, Mr. Chairman.
    Mr. Barton. Seeing no other members that haven't had an 
opportunity to ask questions, we are going to excuse you. But 
we are going to have a series of written questions that are 
somewhat technical in nature, that we are going to present to 
you, and there is a high degree of probability that the 
minority is going to have some additional written questions, 
and so we would ask that you and your staff be responsive very 
quickly to that.
    Mr. Holmstead. We will respond as quickly as we can.
    Mr. Barton. We appreciate your attendance, and we are going 
to excuse you and ask our second panel to come forward at this 
point in time.
    On our next panel we have The Honorable Bobby Simpson, 
Mayor-President of Baton Rouge/Parish of East Baton Rouge, 
Louisiana; we have The Honorable Carl Thibodeaux, who is a 
County Judge of Orange County, Texas; we have The Honorable 
Carl Griffith, who is a County Judge of Jefferson County, 
Texas; we have The Honorable Ralph Marquez, who is the 
Commissioner of the Texas Natural Resource Conservation 
Commission located in Austin, Texas; we have Dr. Ramon Alvarez, 
who is a scientist with the Environmental Defense Fund in 
Austin, Texas; we have Mr. Ronald Methier, who is the Chief of 
the Georgia Department of Natural Resources, Environmental 
Protection Division in Atlanta, Georgia; Mr. David Farren, who 
is an attorney for the Southern Environmental Law Center in 
Chapel Hill, North Carolina; Mr. David Baron, who is the Staff 
Attorney with Earthjustice here in Washington, and Mr. Samuel 
Wolfe, who is an Assistant Commissioner for Environmental 
Regulation in the New Jersey Department of Environmental 
Protection. And we have a distinguished Congressman also here, 
who is going to make some introductions as soon as everyone 
gets seated.
    We apologize that our table is not long enough. We don't 
normally have this many panelists on one panel. We are going to 
welcome you gentlemen, and we are going to recognize the 
Honorable Richard Baker, the Congressman from Louisiana and a 
subcommittee chairman of the Financial Services Committee, who 
has been doing good work with Fannie Mae and Freddie Mac, to 
introduce some of his friends from Louisiana.
    Mr. Baker. Thank you, Mr. Chairman, for the courtesy of you 
have extended. I will be very brief, given the number of 
panelists you have on this segment of your hearing this 
morning.
    We in Baton Rouge in south Louisiana are in a very unique 
position. We have a lot of green stuff. We have a lot of 
sunlight. And there will be days in the coming weeks of August 
when, if you took all the people, all the industry, all the 
cars, took all existence of any society out of south Louisiana, 
we could not meet the current standards for EPA ozone 
attainment.
    We have too many trees, and too many hours of sunlight. In 
our history, we had an ozone belt east of the city--and I can 
bring up news articles where we used to advertise that as being 
a place for people to come for what ails you. Enjoy our ozone 
layer. We find that extraordinarily unique.
    When you lay on top of that the fact that when we try to do 
things to improve our circumstance by enhancing traffic 
capacity, we are told by the EPA via the Department of 
Transportation, ``We are not going to let you do that because 
you already have a nonattainment problem, and we don't want to 
do anything that would increase capacity,'' so the result is we 
sit on interstates bumper-to-bumper for longer hours so their 
tailpipe emissions help contribute to the already pre-existing 
ozone problem.
    In addition, prevailing winds bring industrial discharge 
from the surrounding communities on top of the urban center. 
The end result is our Mayor, Mayor Bobby Simpson, has an almost 
impossible task of trying to enhance air quality given the 
current regulatory constraints, and to do those things which 
are logical. Mayor Simpson has been a tireless fighter in this 
battle, trying to bring common sense to resolution, and I am 
very pleased that the Mayor has been able to find time in his 
schedule to be here this morning, and I do hope, Mr. Chairman, 
that members of the committee will understand the severity of 
this problem and bring rational thought to the resolution. And 
it is a great honor and personal privilege for me to introduce 
the Mayor, who is not only a great mayor but a great friend of 
mine for many years. Thank you, Mr. Chairman.
    Mr. Barton. Thank you, Congressman Baker. Congressman Chris 
John, who is a member of this subcommittee, was in the audience 
earlier, and I know he would have wanted to introduce you, too, 
and Chairman Tauzin wanted to make sure that you are welcome. 
So you must be a very friendly and powerful man down in Baton 
Rouge because a lot of Louisiana congressmen want to be on your 
right side. We are glad to have you, and we are going to put 
your entire statement in the record, and ask you to summarize 
it in 5 minutes. So, welcome to the subcommittee.

  STATEMENTS OF HON. BOBBY SIMPSON, MAYOR-PRESIDENT OF BATON 
   ROUGE/PARISH OF EAST BATON ROUGE, LOUISIANA; HON. CARL R. 
GRIFFITH, JR., COUNTY JUDGE, JEFFERSON COUNTY, TEXAS; HON. CARL 
 K. THIBODEAUX, COUNTY JUDGE, ORANGE COUNTY, TEXAS; HON. R.B. 
      RALPH MARQUEZ, COMMISSIONER, TEXAS NATURAL RESOURCE 
      CONSERVATION COMMISSION; RAMON ALVAREZ, SCIENTIST, 
  ENVIRONMENTAL DEFENSE FUND; RONALD METHIER, CHIEF, GEORGIA 
   DEPARTMENT OF NATURAL RESOURCES, ENVIRONMENTAL PROTECTION 
   DIVISION, AIR PROTECTION BRANCH; DAVID FARREN, ATTORNEY, 
   SOUTHERN ENVIRONMENTAL LAW CENTER; DAVID S. BARON, STAFF 
    ATTORNEY, EARTHJUSTICE; AND SAMUEL A. WOLFE, ASSISTANT 
     COMMISSIONER FOR ENVIRONMENTAL REGULATION, NEW JERSEY 
             DEPARTMENT OF ENVIRONMENTAL PROTECTION

    Mr. Simpson. Thank you, Mr. Chairman and members of the 
committee for the opportunity to speak with you today about the 
ozone nonattainment situation of the Baton Rouge area, and the 
consequences to our community of EPA's recent setbacks in 
courts concerning their transport policy and authority to 
extend attainment dates.
    The Baton Rouge area is home to Louisiana State Government, 
a number of major petrochemical industries, two major 
universities, a major marine port, and a commercial jet 
airport. Our five-parish community consists of a population of 
over 600,000. Threading through this community is the 
Mississippi River, with its heavy marine traffic, a 
concentration of railway assets servicing our community, and a 
very busy east-west interstate highway.
    Additionally, we have learned that at times we are affected 
by transport of air pollutions into our area from upwind 
sources. Thus, you can understand the challenges we face and 
our pride at being in attainment for all established National 
Ambient Air Quality Standards except for ozone, and for the 
progress we have made toward attainment of the ozone standard.
    As a result of high ozone levels recorded in the 1980's, 
the Baton Rouge area was originally classified as a serious 
area under the provisions of the Clean Air Act Amendments of 
1990. Since then, the area has progressed significantly in 
mitigating its ozone problem.
    Our ozone design value in 1999 was 126 ppb, only 2 ppb 
above the attainment criteria. We have only had one or two 
exceedance days in three of the last 4 years. If we were 
classified today according to the classification system of the 
Clean Air Act of 1990, we would be classified as marginal. 
Halfway through this summer's ozone season we find ourselves 
still with an opportunity to achieve attainment of the 1-hour 
ozone standard, as well as the more stringent 8-hour ozone 
standard.
    Our area has met or exceeded planning requirements and 
actions required of EPA for nonattainment areas. However, we 
did not achieve attainment of the 1-hour ozone standard in 
1999, as required by the Clean Air Act. By operation of the law 
under the Act, we were then to be bumped-up from our serious 
classification to that of severe.
    In the Spring of 2000, the area availed itself of the 
opportunity of an extended attainment date under EPA's 1998 
guidance on extension of attainment dates for downwind 
transport areas. In December of 2001, the Louisiana DEQ 
submitted a completed transport SIP package to EPA Region VI. 
This package included a demonstration that the area was 
affected by transport from the Houston area in southeast Texas, 
as well as the revised SIP, and attainment plan showing the 
area would attain the 1-hour ozone standard by November 2005. 
EPA approved all elements of the ozone attainment plan and the 
transport demonstration in October of 2002, and extended the 
attainment date for the Baton Rouge area to November 15, 2005.
    It is important to note that the study conducted for the 
transport demonstration and approved by EPA concluded that 
transport of precursor emissions from southeast Texas 
contributes to daily maximum ozone concentrations in the Baton 
Rouge area. The contribution was quantified as ranging from 2 
to 6 ppb, and under certain conditions as much as 10 ppb. 
Meteorological analysis conducted within the transport study 
indicated the potential for transport exists on approximately 
10 to 30 percent of the Baton Rouge exceedance days. In their 
report, the researchers concluded that but for transport of 
ozone precursors from Houston, Baton Rouge would have attained 
the 1-hour standard in 1999.
    With the Federal Court's ruling earlier this year that EPA 
lacked authority under the Clean Air Act to extend attainment 
dates, most of the planning and work that had been done for the 
Baton Rouge area under EPA's transport pollution became moot. 
As a result of the Court's ruling, EPA has now published a 
formal notice of failure to attain for the Baton Rouge area, 
and withdrawn the attainment date extension. Subsequently, the 
area has been reclassified or bumped-up from serious to a 
severe classification. With reclassification to severe, the 
Baton Rouge area will be tagged with a stigma of having a 
severe air quality problem, although monitored results show we 
have, at worse, a marginal problem. It is difficult to quantify 
this impact because it is manifest primarily in opportunities 
lost, many of which we may never know of.
    It will become more difficult to recruit new business and 
employees to the area because of the perception of severe air 
quality problems. Even the citizens within our own community 
may be unnecessarily concerned about the health implications 
for their families, even though the air we breathe has 
considerably improved over the past decade.
    With reclassification, the Baton Rouge area will also be 
confronted with a number of new requirements of the severe 
classification. These include reformulated gasoline, 
enforceable transportation control measures, redefinition of 
major source from 50 to 25 tons per year, increased offset 
requirements from 1.2-1.3 to 1, and Section 185 penalties to be 
imposed on major sources if the area fails to attain by the 
2005 attainment date.
    Local experts tell us that reformulated gasoline will cost 
consumers in the five-parish area somewhere between $42 and $72 
million per year, and produce negligible ozone reduction 
benefits. The redefinition of major source down to 25 will 
affect about 40 to 50 previously unregulated businesses in our 
area. They will become subject to Title V permit applications.
    Mr. Barton. Mayor, could you summarize, you are about a 
minute over.
    Mr. Simpson. Yes, sir. If the Baton Rouge area does not 
attain by November 15, DEQ must impose emission fees of $5,000 
on these businesses. Thus, I think you can understand the 
outrage we feel from the reclassification of area to severe.
    Given these circumstances, I respectfully request that 
strong consideration be given to amending the Clean Air Act to 
give EPA the authority to extend attainment dates as was 
initially intended under the transport policy.
    Further, I request that any amendment be made retroactive 
to accommodate areas such as Baton Rouge that already have been 
or soon will be bumped-up as a result of our recent court 
decisions.
    Thank you once again for this opportunity to speak with you 
today about the Baton Rouge ozone nonattainment situation. 
Thank you.
    [The prepared statement of Hon. Bobby Simpson follows:]
  Prepared Statement of Bobby Simpson, Mayor-President, City of Baton 
              Rouge/Parish of East Baton Rouge, Louisiana
                            1. introduction
    Thank you Mr. Chairman and Members of the Committee for the 
opportunity to speak with you today about the reclassification (``bump-
up'') provisions of Title I of the Clean Air Act and the consequences 
of their application to the Baton Rouge area. I have closely followed 
and been involved with the Baton Rouge ozone nonattainment issue for 
over a decade--first as a member of the Transportation Policy Committee 
of the Capital Region Planning Commission and, more recently, as Mayor-
President of the City of Baton Rouge and East Baton Rouge Parish. I 
have worked closely with the Presidents of the other four parishes of 
the Baton Rouge Ozone Nonattainment Area on this issue. We all 
understand the importance of attainment of the National Ambient Air 
Quality Standards (NAAQS) for the health of our citizens and the 
vitality of our local economy. We have watched with pride the 
determined effort our community has made in improving our air quality 
and the progress we've made toward attainment of the ozone standard.
    The Baton Rouge area is home to Louisiana state government, a 
number of major petrochemical industries, two major universities, a 
major marine port, and a commercial jet airport. Our 5-parish community 
consists of a population of over 600,000. Threading through our 
community is the Mississippi River with its heavy marine traffic, a 
concentration of railway assets servicing our community, and a very 
busy east-west interstate highway. Additionally, we've learned that at 
times we are affected by transport of air pollutants into our area from 
upwind sources. Thus, you can understand the challenges we've faced and 
our pride at being in attainment for all established NAAQS except for 
ozone, and for the progress we've made toward attainment of the ozone 
standard.
    Our ozone design value in 1999 was 126 ppb, only two (2) parts per 
billion above the attainment criterion. We've had only one or two 
exceedance days in three of the last four years. If we were 
reclassified today according to the classification system of the Clean 
Air Act Amendments of 1990, we would be classified as ``marginal''. 
Halfway through this summer's ozone season we find ourselves still with 
an opportunity to achieve attainment of the 1-hour ozone standard, as 
well as the more stringent 8-hour ozone standard.
    Thus, you can understand the outrage we feel for the 
reclassification of our area to ``severe''. When we should be 
celebrating our progress and focusing on the final distance to 
attainment, it appears we are being punished with the ``severe'' 
classification stigma and distracted with the additional onerous and 
inappropriate requirements the classification brings. The 
reclassification to ``severe'' and accompanying requirements will bring 
us enormous cost and inconvenience, but will not measurably improve our 
air quality; nor will it advance the date for attainment of the ozone 
standard.
    While I've been close to the Baton Rouge ozone nonattainment 
situation for a number of years, I must still rely on our trusted local 
air quality experts for information concerning the technical aspects of 
the ozone issue. These experts, both in the private sector and with the 
Louisiana Department of Environmental Quality (DEQ), have assisted with 
development of the information I am providing in this statement.
                   2. baton rouge area ozone progress
    As a result of high ozone levels recorded in the late 1980s, the 
Baton Rouge area was originally classified as a ``serious' area under 
the provisions of the Clean Air Act Amendments of 1990. Since then, the 
area has progressed significantly in mitigating its ozone problem. For 
example:

 The area's ozone season has declined from 12 months, where we might 
        have an exceedance of the standard at any time during the year, 
        to only the warmer summer months of May through September.
 Annual maximum ozone values have declined considerably.
 Numbers of days of exceedances experienced each year have declined 
        from around 20 to only 1 or 2.
 Duration and intensity of episodes of elevated ozone have declined. 
        Number of hours of exceedances in ozone episodes have declined 
        from 4 or more to only 1 or 2.
 During the past four years, we have been, at times, 2 ppb or one 
        exceedance day away from achieving attainment.
 At the end of 2002, our design value for the 8-hour ozone standard 
        was 86 ppb, only two ppb away from attainment. Under EPA's 
        proposed implementation plan, we would be classified as 
        ``marginal'' under the more stringent 8-hour standard.
 At halfway through this summer's ozone season, we are still on track 
        for possible attainment of both the 1-hour and 8-hour ozone 
        standards.
                          3. failure to attain
    Even before passage of the Clean Air Act Amendments of 1990, a 
Joint DEQ-Industry Ozone Technical Task Force (OTF) was established to 
work on the Baton Rouge area ozone problem. Over three million dollars 
was invested in monitoring, modeling, and research. Over the course of 
the early 1990's DEQ worked and complied with a plethora of EPA 
rulemaking and guidance flowing from the CAAA of 1990. Following EPA 
rules and guidance and using EPA's preferred scientific tools, DEQ and 
the OTF put together a comprehensive plan State Implementation Plan 
(SIP) to bring the Baton Rouge area into attainment for the 1-hour 
ozone standard by November 1999. This plan and all its supporting 
elements were submitted to EPA in August 1998. All the scientific tools 
employed during this process led very clearly to the conclusion that 
VOC emissions would have to be reduced to lower ozone levels and 
achieve attainment. The tools also showed a disbenefit (or ozone 
increase) if nitrogen oxides (NOX) reductions were made.
    In its July 1999 federal register notice of formal approval of DEQ 
attainment SIP and supporting elements for the Baton Rouge area, EPA 
writes that it has determined that the State ``adequately demonstrated 
the modeled control strategy would provide for attainment of the ozone 
NAAQS by the statutory attainment date''. Further, they write that 
``Through photochemical grid modeling, the State has demonstrated to 
the EPA's satisfaction that the VOC reductions in the 15% and Post-1996 
plans (34.8 and 21.4 tons per day, respectively) are sufficient to 
demonstrate attainment of the ozone NAAQS by the statutory deadline.''
    The Baton Rouge area not only achieved the total 56.2 tons per day 
specified in the attainment plan, it achieved considerably greater 
reductions than called for in the plan. The total man-made VOC 
inventory in the five-parish Baton Rouge Ozone Nonattainment area in 
1990 was 234 tons per day. By 1999, the area had reduced emissions to 
143 tons per day--a decrease of over 91 tons per day. And yet we failed 
to attain.
    Now, we find in the latest round of attainment planning using the 
latest scientific tools and guidance that we need a substantial 
reduction of NOX emissions (around 30%) to achieve 
attainment. Also employing these latest tools we find that if we 
reduced VOCs an additional 30% we would only get about a 1 ppb decline 
in ozone levels. In essence, we can't, and quite possibly could never, 
get to attainment with a VOC control strategy alone. We were set up to 
fail by EPA's imperfect understanding of the dynamics of ozone control 
strategies and consequent flawed guidance. Newer, scientifically 
superior modeling tools have now replaced the ones we employed.
    The DEQ and the Baton Rouge community did everything they were 
directed to do and more. Yet, we failed to attain and are being 
reclassified to ``severe'' by operation of law. This is not a failure 
of the Baton Rouge community; this is the result of the application of 
imperfect planning tools and flawed guidance. But, it is the Baton 
Rouge community that will suffer the consequences of this failure.
      4. extended attainment deadline under epa's transport policy
    In a May 10, 2000 letter from Governor Mike Foster to EPA Region 6 
Administrator, Gregg Cooke, a request was made for an extension of the 
attainment date for the Baton Rouge area based on transported air 
pollution. EPA replied that in order for EPA to approve an extension of 
the attainment date based on transport, the State would have to:

1. Submit a formal demonstration that the Baton Rouge area's air 
        quality is, in fact, affected by transport from an upwind area 
        in another state that significantly contributes to Baton 
        Rouge's continued nonattainment;
2. Submit an approvable attainment demonstration SIP showing the Baton 
        Rouge area will attain the 1-hour ozone standard as 
        ``expeditiously as practicable'', but no later than the 
        statutory attainment date of the upwind nonattainment area;
3. Submit in the attainment demonstration SIP, as adopted measures, all 
        additional local control measures needed for expeditious 
        attainment;
4. Demonstrate that all applicable local measures required under the 
        Baton Rouge's ``serious'' classification have been satisfied; 
        and
5. Provide that all newly adopted control measures will be implemented 
        as ``expeditiously as practicable''.
    The Baton Rouge Ozone Task Force (OTF2) was formed in the late 
summer of 2000 to provide the Louisiana Department of Environmental 
Quality (DEQ) with assistance in complying with the requirements set 
forth by EPA in its 1998 Extension Policy guidance. Specifically, it's 
goals were: (1) to provide technical and financial resources to support 
the development of sound, cost-effective emission control strategies to 
bring the Baton Rouge area into attainment for the ozone standard; (2) 
to engage the various stakeholders in the research, analysis, and 
decision-making processes for the Attainment Demonstration and SIP 
revision; and (3) to promote communication between DEQ, the regulated 
community, and the public. A steering committee (SC) provided oversight 
and direction to the OTF2 efforts.
    The new ozone attainment demonstration was prepared through an open 
and collaborative process involving DEQ, EPA, and the OTF2. The Ozone 
Task Force was comprised of representatives of major stakeholders 
within the Baton Rouge community including local governments, planning 
agencies, Chamber of Commerce, commercial and industrial trade 
organizations, electric utilities, and environmental organizations. EPA 
was intimately involved throughout the entire process of SIP 
development, with staffers regularly attending the OTF2 Steering 
Committee meetings. There were also the regular SIP conference calls 
along with several meetings of DEQ and EPA staff to discuss SIP issues. 
Through the OTF2 SIP development process, the new attainment plan for 
Baton Rouge was developed using:

 A very open process with good participation
 A thorough examination of available control measures
 Considerable effort to assure good emissions inventories
 Sound modeling protocol
 Heavy modeling effort to test control strategies and model 
        sensitivities and performance
 Judicious selection of control strategies, and
 A robust attainment demonstration
    The concerted efforts of DEQ, the OTF2, and EPA produced a 
reasonable and scientifically sound plan that the Baton Rouge community 
felt would lead us to cleaner air and attainment of the ozone standard 
by 2005.
    The requirement to demonstrate that the Baton Rouge area was 
affected by transported pollutants was met through research conducted 
by Science Applications International, Inc. (SAI), a nationally 
recognized meteorology and air quality research firm. SAI concluded 
from their research that ``transport of ozone and precursor emissions 
from southeast Texas contributes to daily maximum ozone concentrations 
in the Baton Rouge area.'' They quantified this contribution as ranging 
from 2 to 6 ppb, although under certain conditions the impacts could be 
as large as 10 ppb. Analysis of meteorological parameters for 5- and 
10-year periods using a variety of techniques indicated the potential 
for transport exists on approximately 10 to 30 percent of the Baton 
Rouge exceedance days. In their report to DEQ, SAI concluded that given 
the design value of 126 (as in 1999) for Baton Rouge, ``these results 
suggest that but for transport of ozone and precursor pollutants from 
Houston, Baton Rouge would have attained the 1-hour ozone standard in 
1999.''
    In an October 2, 2002 Federal Register notice, EPA approved the 
Baton Rouge Transport SIP and all its elements as well as the transport 
demonstration, and extended the attainment date for the Baton Rouge 
area to November 15, 2005.
    Of course, as a result of litigation, EPA has conceded it did not 
have the authority under the Clean Air Act to extend attainment dates. 
This prompted EPA to request a remand of the attainment date extension 
for the Baton Rouge area, to publish a notice of the area's failure to 
attain the standard, and to reclassify the area from ``serious'' to 
``severe''. The reclassification became effective on June 23, 2003.
  5. consequences of the ``severe'' classification on the baton rouge 
                                  area
    With reclassification to ``severe'', the Baton Rouge area will be 
tagged with a stigma of having a ``severe'' air quality problem, 
although monitored results show we have at worst a ``marginal'' 
problem. It is difficult to quantify this impact because it is manifest 
primarily in opportunities lost, many of which we may never know of. It 
will become more difficult to recruit new businesses and employees to 
the area because of the perception of severe air quality problems. Even 
the citizens within our own community may be unnecessarily concerned 
about the health implications for their families, even though the air 
we breathe now has considerably improved over the past decade.
    With reclassification, the Baton Rouge area will also be confronted 
with a number of new requirements of the ``severe'' classification. 
These include: reformulated gasoline; enforceable transportation 
control measures; redefinition of major source from 50 to 25 tons per 
year (tpy); increased offset requirements from 1.2 to 1 to 1.3 to 1; 
and Section 185 penalty fees to be imposed on major sources if the area 
fails to attain by the 2005 attainment date.
Reformulated Gasoline
    At 12 months following the effective date of reclassification (i.e. 
June, 2004), the five-parish Baton Rouge ozone nonattainment area 
becomes subject to year-round reformulated gasoline (RFG). Local fuel 
experts tell us that RFG will cost around an additional 10 to 15 cents 
per gallon. Using gasoline sales statistics for the 5-parish area it is 
estimated that RFG will cost Baton Rouge consumers an additional $48 to 
$72 million dollars per year. There will also be significant 
redistribution of sale of gasoline and convenience store items around 
the periphery of the nonattainment area.
    Using the latest mobile emissions model, DEQ has estimated that RFG 
will result in a reduction in VOC emissions of a little under 2 tons 
per day. Although we are now employing a NOX control 
strategy, RFG provides negligible NOX-reduction benefits. 
Sensitivity analyses conducted during recent Urban Airshed Model 
suggests there would be no measurable ozone benefits from RFG. At $24 
to $36 million per ton of VOC reduction and negligible ozone benefits, 
this presents an absurd cost-benefit ratio.
Enforceable Transportation Control Measures
    The Clean Air Act requires ``severe'' areas to offset increases in 
emissions resulting from growth in vehicle miles traveled (VMT). 
Fortunately, an initial review by DEQ suggests that Baton Rouge may not 
have to implement mandatory transportation control measures to offset 
VMT growth.
Redefinition of Major Source
    The reclassification of the Baton Rouge area to ``severe'' will 
require the redefinition of major source from the present 50 tons per 
year (tpy) to 25 tpy. DEQ projects that this change will impact around 
40 to 50 businesses in the 5-parish area. These previously unregulated 
businesses will become subject to having to submit Title V permit 
applications, monitoring and reporting of their emissions, and 
enforcement inspections by DEQ. This will represent a significant 
increase in the cost of business for these facilities, and may result 
in the closure of some. An initial analysis by DEQ suggests there will 
be little emissions reductions benefits that correlate with the 
requirement to submit Title V permit applications. There may be some 
later benefit associated with offset requirements if a business 
expands.
    This addition of a new population of Title V permits is going to 
add significant new burdens to DEQ's permit review and processing 
staffs.
Increased Offsets
    It is expected that the increased offset ratio will be required for 
all permits not deemed administratively complete prior to the effective 
date of the bump-up. The total fiscal impact of this requirement has 
not been estimated; however, because of the diminishing availability of 
offsets, this new requirement will undoubtedly affect the decisions on 
expansions and/or modifications to local industries.
Section 185 Penalty Fees
    If the Baton Rouge area does not achieve attainment by November 15, 
2005, DEQ must impose emission fees of $5,000 (1990 dollars adjusted 
for inflation--now around $7,700) per ton of VOC and NOX 
emitted above 80% of an operating baseline from each major source. 
Using 2000 emissions data for the 5-parish area, it is estimated that 
the annual cost of the penalties to major sources will be about $100 
million. These annual penalty fees will continue until we achieve 
attainment.
    The Baton Rouge Ozone Task Force looked at these ``severe'' 
measures during attainment planning and discarded them because they 
presented little benefit for the cost and inconvenience of 
implementation in the Baton Rouge area.
    Reclassification of the Baton Rouge area will require 
reconstitution of DEQ's SIP resources for analysis and planning related 
to accommodation of the new ``severe'' classification requirements. EPA 
has already specified that additional Urban Airshed Modeling will have 
to be done to reflect the new requirements. It could take anywhere from 
6 to 12 additional months to complete analysis, modeling, and 
rulemaking for the new ``severe'' SIP.
    DEQ and the Baton Rouge Ozone Task Force working with EPA have 
developed and submitted a competent ozone attainment plan for the Baton 
Rouge area. Why jeopardize this work, impose the ``severe'' area 
requirements that are clearly inappropriate for the area, and delay the 
process that could already be improving air quality?
                             6. uncertainty
    Discussions with EPA have revealed a large amount of uncertainty 
concerning requirements and timing of implementation of the new 
``severe'' area requirements. Although other areas have been bumped-up 
in the past, Baton Rouge will apparently be the first into the chute 
following the reversal of EPA's attainment date extension policy.
    In EPA's recently proposed implementation rules for the new 8-hour 
ozone standard it is proposed the 1-hour standard be revoked one year 
following attainment designations for the new standard (thus revocation 
in April, 2005). Should DEQ be required to work simultaneously on 
attainment planning for the 1-hour and the 8-hour ozone standards? 
Should DEQ be required to develop and submit the new ``severe'' SIP for 
the 1-hour standard when the standard might be revoked the following 
year?
    The reconciliation of bump-up requirements for areas with 
previously extended attainment dates for the 1-hour ozone standard with 
the implementation of the new 8-hour ozone standard is going to be a 
regulatory nightmare for areas such as Baton Rouge.
                             7. conclusion
    In spite of a challenging emissions inventory and periodic 
influence of ozone and ozone precursors transported into the region, 
the Baton Rouge area has made good progress toward attainment of the 1-
hour ozone standard. Through a collaborative process involving the 
major stakeholders within our community, a sound plan (transport SIP) 
has been developed to achieve attainment of the ozone standard by 
November 15, 2005. The bump-up to a ``severe'' classification is 
expected to result in great cost and inconvenience to Baton Rouge area 
citizens, while providing negligible air quality benefits. Since the 
approved transport SIP had already planned for a November 2005 
attainment date, the bump-up does nothing to shorten the time to 
attainment.
    Given these circumstances I respectfully request that strong 
consideration be given to amending the Clean Air Act to give EPA the 
authority to extend attainment dates as was initially intended under 
the Transport Policy. Further, I request that any amendment be made 
retroactive to accommodate areas such as Baton Rouge that already have 
been, or soon will be, bumped-up as a result of the recent court 
decisions.
                        summary of major points
    1. In spite of a challenging emissions inventory and periodic 
influence of ozone and ozone precursors transported into the region, 
the Baton Rouge area has made good progress toward attainment of the 1-
hour ozone standard.
    2. The Baton Rouge area came within 2 ppb of achieving attainment 
in 1999, and last year came within only one exceedance day of 
attainment. Nonetheless, it failed to achieve attainment by its 
attainment date prescribed in the Clean Air Act.
    3. In the spring of 2000, the area availed itself to the 
opportunity of an extended attainment date under EPA's 1998 ``Guidance 
on Extension of Attainment Dates for Downwind Transport Areas''.
    4. In December, 2001 the Louisiana DEQ submitted a completed 
Transport SIP package to EPA Region 6. This package included a 
demonstration that the area was affected by transport from the Houston 
area in southeast Texas as well as a revised SIP and attainment plan 
showing the area would attain the 1-hour ozone standard by November 
2005.
    5. EPA approved all elements of the ozone attainment plan and the 
transport demonstration in October, 2002.
    6. As a result of the federal courts' reversal of EPA's authority 
to grant attainment date extensions, the Baton Rouge area was 
reclassified from a ``serious'' to a ``severe'' classification 
effective June 23, 2003. Since the area's approved Transport SIP had 
already specified attainment by November 2005, there was no change in 
attainment date for the area as a result of the reclassification.
    7. The new ``severe'' area requirements imposed with the 
reclassification are ill suited for the Baton Rouge area. They are 
expected to produce negligible ozone reduction benefits, while 
inflicting enormous cost and economic development impacts on the area.
    8. Considerable thought and research went into the development of 
EPA's transport policy. It was designed to accommodate situations, such 
as in Baton Rouge, where attainment efforts are impeded by influences 
of pollutants transported from upwind sources.
    9. The Clean Air Act should be amended to give EPA the authority to 
implement its transport policy and extend attainment dates. Any such 
amendment of the Clean Air Act should be made retroactive to provide 
relief to areas such as Baton Rouge that had been granted approved 
attainment date extensions under the EPA transport policy and that have 
now been reclassified.

    Mr. Barton. Thank you, Mr. Mayor.
    We now want to recognize The Honorable Carl Griffith, Jr., 
who is a County Judge in Jefferson County. His congressman, 
Congressman Nick Lampson, was here before the hearing to 
introduce him and the other Texans from that region to me. We 
also want to introduce State Representative Joe Disotel, who is 
with us in the audience. We are glad to have you up from 
Austin, appreciate your attendance at this hearing.
    Mr. Griffith, your statement is in the record in its 
entirety, and we would ask that you summarize it in 5 minutes.

             STATEMENT OF HON. CARL R. GRIFFITH, JR.

    Mr. Griffith. Mr. Chairman, I have listened with interest. 
This is the first time I have ever appeared before Congress, 
although I have been many times to Austin to appear, and it 
seems that a lot of the issues are all the point of transport, 
they are about blue skies and upset emissions, and not about 
transport.
    I do run as a Democrat, and it seems also to be a partisan 
issue, and this is not a partisan issue. This is about common 
sense.
    Mr. Barton. We are very bipartisan here, and we have lots 
of Democratic friends and my Democrats have lots of Republican 
friends, so you are among friends.
    Mr. Griffith. I hear that, but it seems a dividing line. 
But the bottom line is we are about 385,000 people, and we are 
to the east of Houston, Texas, about 70 miles.
    Since 1990, the Clean Air Act was amended or enacted, and 
if you look at what Jefferson County in southeastern Texas, 
Orange County, Hardin County has done, you see as far as 
emission counts, we were showing 20 emission bumps every year 
in the early 1990's. We have seen them drop down to two. For 
the last 3\1/2\ years, there has been seven exceedances total 
in 3\1/2\ years. Of those 7, 6 of those were backtracked to 
transport from Houston. So, only one, that would put us 
marginal nonattainment. But under the current rules, we are 
going to be bumped-up to the same as Houston. It makes no 
sense. And it makes no sense to my colleague here, the 
Republican from Louisiana.
    Marginal nonattainment, if it wasn't for these rules. And 
this needs to be taken back to common sense. Even as a cursory 
look at the other testimony that is going to come on the 
opposite side, we are not talking about whether transport is an 
impact or not, it is talking about whether they don't want to 
change the rules to allow for transport.
    We are talking about putting small businesses out of 
business. I can't tell you, and I know Representative Disotel 
could tell you the area he represents, double-digit 
unemployment. And, yet, we continue to clean up the air, and 
will continue to do that, and we are not opposed to that, we 
actually embrace it, but use common sense to this approach.
    There is only one monitor that continues to show 
exceedances in southeast Texas, and that monitor is in the 
southern part of the county, in Sabine Pass, Texas, way south 
of all the other monitors. All the industry is north of that 
monitor. Our prevailing winds are out of the southwest, and 
between southeast and southwest we continue to have those 
exceedances without having response. As you know, in the 
summertime our winds continue to come off the Gulf of Mexico. 
None of those emissions hardly are coming from industry. And 
they are spending hundreds of millions of dollars to clean up 
the air.
    I am not going by this written testimony because it is here 
for you, and I am just trying to hit the main points. Moreover, 
the mandated new planning and control requirements imposed 
would result in beginning to reclassify under the 1-hour 
standard would carry forward to the 8-hour standard. According 
to EPA's recent 8-hour implementation proposal, despite 
Beaumont-Port Arthur's having an 8-hour ozone level that would 
classify as marginal nonattainment under the 8-hour standard, 
the area still be required to implement the more stringent 
planning and control strategies to serious or severe 
nonattainment because of the reclassification under the 1-hour 
standard.
    The solution is--and I will wrap it up--the bottom line of 
the solution to this is to codify what the Clinton 
Administration did and said transport is an issue and without 
transport as an issue in our community, we would be in 
attainment, marginal nonattainment. We have got 45 percent more 
reductions to do between 2003 and 2005--45 percent more 
reductions in NOX emissions. And considering we have 
gone from 624 tons of emissions down to 371 today in the last 7 
years, we are working diligently to try to clean up the air in 
southeast Texas.
    [The prepared statement of Hon. Carl Griffith, Jr. 
follows:]
    Prepared Statement of Hon. Carl R. Griffith, Jr., County Judge, 
                            Beaumont, Texas
                              introduction
    The Beaumont-Port Arthur-Orange (BPA) area of southeast Texas is a 
sparsely populated, mostly rural, area of less than 400,000 residents; 
although, a significant fraction of its nonagricultural economy is 
driven by oil refining and chemical manufacturing.
    As a moderate ozone nonattaniment area, BPA had a Clean Air Act 
deadline of November 1996 for attaining the 1-hour ozone standard.
    Situated about 70 miles west of the BPA area is the Houston-
Galveston severe ozone nonattainment area, which has a statutory 
attainment deadline of November 2007.
    The amount of local ozone precursor emissions and the complexity of 
the ozone nonattainment situation in BPA are dwarfed by comparison with 
Houston-Galveston, which is the fourth largest city in the U.S. and 2nd 
to Los Angeles in terms of number of days per year when the 1-hour 
ozone standard is exceeded.
    In 1999, three years after the statutory attainment deadline for 
BPA, the Texas Commission on Environmental Quality (TCEQ) demonstrated 
that emissions from Houston-Galveston, transported by eastward moving 
wind currents, were interfering with the BPA area's ability to achieve 
attainment.
                       current air quality status
    Despite transported air pollution, the BPA area has made 
substantial progress toward attaining the ozone standards.
    Due to effective planning and air quality management by the TCEQ; 
public awareness and participation through the South East Texas 
Regional Planning Commission; and costly emissions reductions programs 
implemented by local industry, the BPA region has seen dramatic 
improvements in its air quality since the passage of the 1990 Clean Air 
Act Amendments.
    The number of days per year when ozone levels exceeded the level of 
the 1-hour standard at one or more of the area's monitoring sites has 
plummeted from about 20 in 1990 to an average of just 2 per year over 
the last three years--a decrease of 90%.
    Only one of the region's six ozone monitors that violated the ozone 
standard in the early 1990's is still marginally nonattainment today.
    That monitor, located at Sabine Pass near the Gulf of Mexico, in 
extreme southeastern Jefferson County, is the one most often impacted 
by air currents passing over the monitor from the Houston-Galveston 
area.
    If not for this one monitor and the transported air pollution that 
it intercepts, the air quality improvements in BPA would be viewed as 
one of the major successes of the Clean Air Act.
    Of the last seven days when ozone levels exceeded the level of the 
1-hour ozone standard at Sabine Pass, six had wind conditions favorable 
for transporting polluted air from Houston-Galveston.
              status of air quality planning and controls
    In partnership with the TCEQ, the BPA region has faithfully met or 
exceeded all the air quality planning and control requirements set 
forth by the 1990 Clean Air Act Amendments for an area of its 
nonattainment classification, including adoption of a plan, based on 
computer modeling, that provides for all the local emission reductions 
needed for attainment.
    The attainment plan, based on the guidance EPA published in 1998 
for areas affected by downwind transport, calls for an additional 45% 
reduction in local industry NOX emissions to be made between 
2003 and 2005 and also aligned the attainment date for the BPA area 
with that of Houston-Galveston to account for the longer period 
provided for by the Clean Air Act for Houston-Galveston to reduce its 
emissions.
    The new NOX emission limits for industrial sources in 
the BPA area are as stringent as or more than the ones being 
implemented in any other area in the country having comparable air 
quality. No one should question whether industry in the BPA area is 
doing its fair share to clean up its contribution to the local ozone 
problem.
                     impact of recent court action
    The court's reversal of the attainment date extension portion of 
the BPA attainment plan means that EPA must reclassify the area to a 
higher nonattainment classification, either serious or severe, despite 
the area's air quality having actually improved markedly since the time 
when it was first classified as moderate nonattainment and regardless 
of whether the area would already be attaining the ozone standard but 
for emissions from Houston-Galveston.
    Note that while reversing the attainment date extension, the court 
never questioned Texas' and EPA's technical analyses showing that 
upwind emissions were interfering with the BPA area's ability to attain 
the ozone standard or whether the local industry in BPA was doing its 
share to reduce its contribution to the local air pollution problem; 
neither did the court's petitioners.
    Nevertheless, the court's action will impose, as a matter of law, 
new air quality planning and control requirements designed to address 
the more intractable air quality problems of serious and severe ozone 
nonattainment areas, regardless of whether such new local requirements 
would significantly improve air quality in BPA or help advance its 
attainment date, or whether the existing air quality plan calling for 
an additional 45% reduction in industrial source NOX 
emissions is already on track for attainment.
    The mandated new requirements, which would mostly affect 
transportation and smaller businesses, will more than likely be 
ineffective, unnecessary, and are likely to erode public support for 
clean air.
    In addition to mandating new costly and burdensome requirements, 
which may be ineffective and unnecessary, EPA has responded to the 
recent court action by proposing to advance the attainment deadline for 
BPA. The advanced deadline may be impossible to achieve, given the 
significant influence of upwind emissions on most high ozone days.
    Moreover, the mandated new planning and control requirements 
imposed as result of being reclassified under the 1-hour standard would 
carry forward to the 8-hour standard. According to EPA's recent 8-hour 
implementation proposal, despite BPA having current 8-hour ozone levels 
that would classify it as marginal nonattainment under the 8-hour 
standard, the area will still be required to implement the more 
stringent planning and control requirements of a serious (or severe) 
area because of its reclassification under the one hour standard.
    Of course, none of the aforementioned consequences of the recent 
court action addresses the principal cause of continued ozone 
nonattainment in the BPA area--transport of polluted air from an upwind 
area having a later attainment date.
    In fact, the courts' actions leave EPA and the states with no 
remedy for addressing air pollution transport other requiring upwind 
areas having later attainment dates to accelerate implementation of 
emission controls, which would contradict Congress' intent in giving 
areas with more intractable air quality problems more time to achieve 
attainment.
                              the solution
    EPA, in adopting its 1998 policy on extending the attainment dates 
for areas affected by transport, sought to fill this gap in the 
statutory framework, which on the one hand provides longer attainment 
periods for areas with more intractable air quality problems, but on 
the other hand does not hold them responsible for air pollution 
problems downwind, and thus penalizes downwind areas for air pollution 
that is beyond its control.
    In attempting to fill that gap, EPA sought to harmonize the 
attainment dates for upwind and downwind transport areas, without 
accelerating the deadlines for attainment provided for by the Act for 
the more complex or intractable air pollution problems.
    EPA's 1998 policy provided a practical solution to the 
nonattainment problem in BPA and areas like it that are impacted by air 
pollution from an upwind area having a later statutory attainment date; 
however, EPA's legal rationale for this common sense solution was 
voided by the courts; although the Seventh Circuit Court of Appeals in 
the St. Louis case recognized that the current statutory scheme may 
require downwind areas to implement expensive controls that may well 
not help achieve an earlier attainment deadline, but Congress would 
have to be petitioned to change the law to allow for better approaches 
to resolving such conflicts.
    Congress can rectify the conflict in the Clean Air Act by codifying 
EPA's 1998 policy on attainment date extensions into law.
    Congress should act swiftly in doing so in order for EPA to 
reaffirm its approval of Texas' attainment plan for BPA before 
finalizing its proposal to reclassify the area as serious or severe 
nonattainment.

    Mr. Barton. Thank you, Judge.
    We now want to hear from another County Judge from your 
part of the country, the Honorable Carl Thibodeaux, who is a 
County Judge in Orange County, Texas. Your testimony is in the 
record, and we would ask that you summarize in 5 minutes, 
Judge.

              STATEMENT OF HON. CARL K. THIBODEAUX

    Mr. Thibodeaux. Thank you, Mr. Chairman and committee 
members. In support of my colleague, Judge Griffith, here from 
Jefferson County, the key issue once again is the transport, 
but we need to look at the other areas as to what brought us to 
this point.
    The Beaumont-Port Arthur-Orange area of southeast Texas is 
a great example of success in the Clean Air Act Amendments of 
1990 but, unfortunately, is an example of some of its failures.
    As my colleague brought up today, there has been most of 
our monitors that had been showing bad attainment areas have 
all been reduced down to one in the year 2002 and 2003. The 
lone remaining monitor is located in Sabine Pass, a town of 
about 1500 residents located in extreme southeastern Jefferson 
County, near the Gulf of Mexico. If it was not for this one 
ozone monitor, the Beaumont-Port Arthur-Orange area would be in 
attainment with the 1-hour ozone standard.
    So, once again, we have proven that the transport issue has 
come into the picture. EPA's 1998 policy for extending 
attainment deadlines was a practical common-sense solution for 
States and local areas struggling to address transported air 
pollution in their ozone attainment plan.
    The Houston-Galveston severe ozone nonattainment area, 
having an attainment deadline of 2007, is situated less than 70 
miles to the west of the Beaumont-Port Arthur-Orange ozone 
monitors.
    Houston, being the fourth largest city in the United 
States, it experiences more days per year having ozone levels 
in exceedance of the 1-hour standard than any area in the 
Nation, other than Los Angeles. The ozone attainment plan Texas 
recently developed for Houston is as tough or tougher in many 
respects to the ones being implemented in Los Angeles or 
anywhere else, and is being implemented as quickly as possible. 
Nevertheless, it will not be fully implemented until 2007.
    So by kicking up the Beaumont-Port Arthur-Orange area to 
2007, as my colleague said, does not make practical sense. We 
cannot ever reach the mark ahead of the Houston area because of 
the transportation issue. So now we are faced with--none of us 
in southeast Texas are against air quality, we are not against 
the health of our individual constituents. I am a registered 
pharmacist, which I have been in the health profession since I 
have gotten out of college, so I have a definite concern with 
people's health, and I see it every day.
    The key issue here that we need Congress to act to give the 
EPA the power to extend the nonattainment deadlines for these 
individual areas that have proven that it is the transport 
issue that has made it difficult for them to reach their 
attainment point. This is what I feel like the purpose of this 
hearing is, and it is very important.
    The EPA, I think, has taken some very practical common 
sense measures to help remedy the problem, and Congress, I 
feel, should act to go ahead and give the EPA the power that 
the court said they did not have.
    By putting heavier sanctions on these communities, which 
would have economic impact to the negative side, is not going 
to cause anyone or stimulate anyone to reach the attainment any 
sooner. We are planning to reach it by 2005, but putting 
sanctions on us will not change the plan that we have, and it 
would most certainly not expedite or speed up the process of 
getting the air clean, it would just be more detrimental to the 
economy and the small businesses that have to deal with it 
every day. And as my colleague said, in an area of high 
unemployment, we cannot afford anymore mandates or anymore 
rules and regulations that would prevent employment in our 
southeast Texas, but we will still continue to improve our air 
quality and monitor the situation, and do whatever we can in 
our power to remedy the situation and make the air our 
constituents breathe a lot better than it was in the past. 
Thank you, Mr. Chairman.
    [The prepared statement of Hon. Carl K. Thibodeaux 
follows:]
 Prepared Statement of Hon. Carl K. Thibodeaux, County Judge, Orange, 
                                 Texas
                              introduction
    The Beaumont-Port Arthur-Orange (BPA) area of southeast Texas is a 
fine example of one of the successes of the Clean Air Act Amendments of 
1990 but also, unfortunately, a glaring example of one of its failures.
    Since the passage of the 1990 amendments, the residents of 
southeast Texas have benefited from dramatic improvements in the 
region's air quality, which have come as the result of effective air 
quality planning and management by the Environmental Protection Agency 
(EPA) and the state of Texas; public participation through the South 
East Texas Regional Planning Commission; and expensive new emission 
controls installed by the region's industry.
    Southeast Texas demonstrates a success of the 1990 Clean Air Act 
Amendments because, since the time of its passage, the number of days 
per year when ozone levels exceed the level of the 1-hour standard at 
one or more of the area's monitoring sites has dropped from about 20 to 
an average of just 2 per year, over the last three years--a decrease of 
90%.
    More importantly, perhaps, the number of monitors measuring 
violations of the ozone standard has dropped from 6 in the early 1990's 
to only 1 in 2002 and 2003, showing that the number of residents of 
southeast Texas potentially exposed to ozone levels in excess of the 
EPA standard has plummeted.
    The lone remaining nonattainment monitor is located in Sabine Pass, 
a town of about 1500 residents located in extreme southeastern 
Jefferson County, near the Gulf of Mexico. If not for this one ozone 
monitor, the BPA area would be in attainment with the 1-hour ozone 
standard.
    Southeast Texas demonstrates a failure of the 1990 Clean Air Act 
Amendments because the air currents on most of the high ozone days at 
Sabine Pass during the past several years were favorable for 
transporting polluted air from the Houston-Galveston severe ozone 
nonattainment area, which has a statutory attainment deadline of 2007, 
and the Act provided no means for accounting for the influence of this 
transported air pollution, according to recent court decisions, on the 
ability of BPA to achieve attainment by its earlier statutory deadline.
              epa's 1998 attainment date extension policy
    EPA's 1998 policy for extending attainment deadlines was a 
practical, common sense, solution for states and local areas struggling 
to address transported air pollution in their ozone attainment plans.
    Southeast Texas was supportive of this policy when first announced 
by EPA in 1998, and still supports it today, despite the recent court 
actions.
    No better example, than the BPA area exists, of a moderate ozone 
nonattainment area that is impacted by intrastate transport of air 
pollution from an upwind area having a more onerous air pollution 
problem and later statutory attainment deadline.
    The Houston-Galveston severe ozone nonattainment area, having an 
attainment deadline of 2007, is situated less than 70 miles to the west 
of the BPA ozone monitors.
    Houston is the 4th largest city in the U.S. and experiences more 
days per year having ozone levels in excess of the 1-hour standard than 
any area in the nation, other than Los Angeles. The ozone attainment 
plan Texas recently developed for Houston is as tough as or tougher, in 
many respects, to ones being implemented in Los Angeles, or anywhere 
else, and is being implemented as expeditiously as possible. 
Nevertheless, it will not be fully implemented until 2007, the deadline 
established by the 1990 amendments.
    Computer modeling conducted by the Texas Commission on 
Environmental Quality (TCEQ) and research by other investigators shows 
that on days having wind conditions favorable for transporting polluted 
air from Houston-Galveston to BPA, ozone levels may climb to exceed the 
EPA standard, because of the Houston-Galveston emissions, thus, making 
it improbable for the BPA area to achieve attainment before Houston-
Galveston's 2007 deadline for attainment.
    EPA's 1998 attainment date extension policy addressed this problem 
by harmonizing the Houston-Galveston and BPA attainment deadlines, 
without accelerating the attainment schedule for Houston-Galveston, 
while also requiring that BPA address its contribution to the 
nonattainment problem as expeditiously as practicable.
    Indeed, the plan Texas adopted for southeast Texas, while aligning 
the BPA attainment deadline with that of Houston, also required new 
emission limits on local industry NOx emissions that are as tough as or 
tougher than those of any other area in the U.S. having comparable air 
quality.
    These new emission limits, to be phased in during 2003-2005, will 
reduce industry NOx emissions by an additional 45%. Clearly, local 
industry in BPA is doing its share to clean up the air.
                     impact of recent court action
    The court's reversal of the attainment date extension portion of 
the BPA attainment plan will have many adverse consequences but few 
apparent benefits to air quality.
    Reclassifying the area to a higher nonattainment classification, 
either serious or severe, will impose, as a matter of law, new air 
quality planning and control requirements designed to address the more 
intractable air quality problems of serious and severe ozone 
nonattainment areas.
    These mandated new requirements, which will mostly affect 
transportation and smaller businesses, will more than likely be 
ineffective, unnecessary, and are likely to erode public support for 
clean air.
    Imposing these mandatory requirements while failing to account for 
the true cause of continued nonattainment in the BPA area may also 
erode public confidence in the EPA, TCEQ, and the regulatory process.
    It is worthwhile to note that the Sabine Pass monitor, the lone 
monitor in southeast Texas continuing to show nonattainment, was 
installed and continues to be operated using funds voluntarily 
contributed to the South East Texas Regional Planning Commission by 
local industry.
    The Sabine Pass monitor was purposely installed in a remote area of 
sparse population and no nearby emissions to measure the impacts of air 
pollution entering the region from upwind. This was done presuming 
that, through the collection of abundant data and application of good 
science, a better and more effective ozone attainment plan would be 
achieved for southeast Texas.
    The recent court action prevents EPA, Texas, and the local area 
from addressing the true cause of continued noncompliance and provides 
industry with a strong disincentive for future proactive measures.
    To add insult to injury, the mandated new planning and control 
requirements imposed as result of being reclassified under the 1-hour 
standard would carry forward to the 8-hour standard. According to EPA's 
recent 8-hour implementation proposal, despite the BPA area having 
current 8-hour ozone levels that would classify it as marginal 
nonattainment under the 8-hour standard, the area will have to continue 
to implement planning and control requirements as a serious (or severe) 
area because of the court mandated reclassification.
    Of course, none of the aforementioned consequences of the recent 
court action addresses the principal cause of continued ozone 
nonattainment in the BPA area--transport of polluted air from an upwind 
area having a later attainment date.
    In fact, the courts' actions leave EPA and the states with no 
remedy for addressing air pollution transport other requiring upwind 
areas having later attainment dates to accelerate implementation of 
emission controls, which may not be practicable and would contradict 
Congress' intent in giving areas with more intractable air quality 
problems more time to achieve attainment.
    The Seventh Circuit Court of Appeals recognized the dilemma in its 
ruling on the St. Louis nonattainment reclassification case, and said 
that the mandatory control requirements of a bump-up may cost the area 
millions of dollars and still not help achieve the standard earlier, 
but, there was not a mechanism in the statute to allow for a common 
sense approach to such issues; only Congress could change the law to 
allow for that.
                              the solution
    EPA, in adopting its 1998 policy on extending the attainment dates 
for areas affected by transport, sought to fill this gap in the 
statutory framework, which on the one hand provides longer attainment 
periods for areas with more intractable air quality problems but on the 
other hand, does not hold them responsible for air pollution problems 
downwind, thus penalizing downwind areas for air pollution that is 
beyond its control.
    In attempting to fill that gap, EPA sought to harmonize the 
attainment dates for upwind and downwind transport areas, without 
accelerating the deadlines for attainment provided for by the Act for 
the more complex or intractable air pollution problems.
    EPA's 1998 policy provided a practical solution to the 
nonattainment problem in the BPA area, and areas like it, that are 
impacted by air pollution from an upwind area having a later statutory 
attainment date; however, EPA's legal rationale for this common sense 
solution was voided by the courts.
    Congress can rectify, as suggested by the Seventh Circuit Court of 
Appeals, the conflict in the Clean Air Act by codifying EPA's 1998 
policy on attainment date extensions into law.
    Congress should act swiftly in doing so in order for EPA to 
reaffirm its approval of Texas' attainment plan for BPA before 
finalizing its proposal to reclassify the area as serious or severe 
nonattainment.

    Mr. Barton. Thank you, Judge Thibodeaux, and I hope the 
fact you took off your little State of Texas pin is not an 
indication of some sort of a protest.
    Mr. Thibodeaux. No, it fell off, Mr. Chairman, and I don't 
quite know exactly what happened. I think, as Judge Griffith 
said, I am a little nervous, too. It is the first time I have 
been in front of congressional members, and I have been in 
Austin many times.
    Mr. Barton. If you can handle Austin, you can handle 
Washington. We are pussy cats compared to those guys down 
there.
    Mr. Thibodeaux. I don't know if it was the nervousness, but 
something caused it to pop off, but I think it was just to get 
everybody's attention.
    Mr. Barton. We appreciate that.
    We now want to hear from the Commissioner of the Texas 
National Resource Conservation Commission, the Honorable Ralph 
Marquez, who has been here before. Your statement is in the 
record in its entirety, Mr. Commissioner, and we are going to 
ask that you try to summarize in about 5 minutes.

              STATEMENT OF HON. R.B. RALPH MARQUEZ

    Mr. Marquez. I will try to do that, Mr. Chairman.
    Mr. Chairman, members of the subcommittee, thanks for 
inviting me. I have provided the subcommittee two examples of 
transport of pollutants. I will not try to describe the details 
of it, that will take quite a while, but for your reference we 
have two packets--actually, one packet, two portions. They are 
satellite imagery and air monitoring readings, and this came 
about because of a haze that moved into Texas and, as the haze 
moved in, we saw the air monitors begin to show high levels of 
ozone and fine particulate matter.
    We analyzed the data and we started tracking backwards 
where that had come from. The data on the maps and the imagery 
speak for themselves. Let me take two points. First of all, we 
are not pointing the finger at any other part of the country as 
being the cause of Texas' problems. We are fully aware that 
there are a number of other situations in which Texas pollution 
moves the other way around and affects States north of us. So 
that is No. 1.
    Second, this is a kind of pollution that can only be 
addressed on a very wide scale, and we believe that multi-
pollutant strategy is a way to get at it and to make 
significant reductions across the eastern side of the country 
that will benefit everyone.
    The second packet is a more specific example of transport, 
it is intra-state transport. This is from Houston to the 
Beaumont-Port Arthur area----
    Mr. Barton. Mr. Commissioner, could you suspend. I think 
what you are saying is important enough that we try to put some 
of this material up on the video screen, if it is possible. 
They need to know exactly which file, though, I believe, is 
that correct? We are not going to count this against your time.
    Mr. Marquez. That would be fine. We can begin. There are 
pictures here, they are pictures from satellite that show 
visible haze moving----
    Mr. Barton. Do we have what you just showed?
    Mr. Marquez. Yes, I believe you have that packet. I am 
being told that maybe that packet didn't come in 
electronically, so you may not have that one.
    Mr. Barton. Let us put back up one of those graphs, try No. 
8, there was one that showed some orange--yes, that one right 
there. It gives an idea. You can see something moving around.
    [Slide shown.]
    Okay. Restart his clock at 5 minutes, and just leave that 
up. Go ahead, Commissioner.
    Mr. Marquez. What you see in this example is how pollution 
moving into the State of Texas, the yellow and orange, it is 
visibility measurements. The little numbers in boxes are the 
ozone, the 8-hour ozone numbers, as well as fine particulate 
matter. And as the haze goes by, you see more of a visibility 
reduction, as well as the numbers for ozone and fine 
particulates increasing. As you go, I believe on September 12 
you see some very high numbers, unhealthy air. On September 13, 
the Houston area reached 144 ppb of ozone, that is an 8-hour 
standard. So you can see central Texas suffering from some very 
unhealthy air.
    On September 13, Houston experienced one of the highest 
numbers we have seen for the 8-hour standard. You see a very 
broad area on September 14, all across southern Texas. Even in 
areas along the border have never experienced any air pollution 
problems, we were seeing very high numbers there.
    And then on September 15 and September 16, you can see we 
have a tropical storm that essentially took all that haze back 
out, probably sent it back to the neighboring State of 
Louisiana, as a matter of fact, with some of our contributions 
added to it.
    I will refer you to the last page of that packet, it is a 
table, and it shows in color--and this chart is color-coded 
based on the EPA classification of air quality--how the air had 
been clean before that haze moved in, what the numbers were 
during that episode, and as the haze moved out how the air 
returns to healthy standards. This is just one example of how 
significant the transport of pollutants can be and how 
widespread it is. It is not just one State or another, it is 
really a merry-go-round that may be going up from Texas and 
coming back from the Midwest and along the East Coast and past 
Georgia and Louisiana. I think we are doing it to each other.
    And the only way to really bring this under control is 
going to be with a very rough policy of reducing emissions from 
significant major sources that contribute to transport--
primarily, that is the Multi-Pollutant Strategy Program 
addressing power plants I think is very significant, but we 
need reductions consistent throughout the eastern U.S., and we 
need it soon.
    Mr. Barton. Does that conclude your testimony?
    Mr. Marquez. I will just point out one other example, and 
it is an intra-state of Houston to Beaumont. It is a bar chart, 
and I will just highlight what my friends here from south Texas 
said.
    If you see the last exceedances, the last 23 exceedances 
over the last 5 years, 11 of those exceedances in the Beaumont-
Port Arthur area were either caused by or influenced by 
transport from Houston. And actually the highest numbers of 
ozone were on the days where there was an impact from Houston. 
If you just look at the blue section, that is homegrown impact, 
and those numbers are very marginal. And as a matter of fact, 
they are coming down. And this is through 2002. The emission 
reduction program for the area really started taking place on 
May 1 of this year. Every one of those steps will be 
implemented by May 1, 2005. So we believe that as far as the 
local input, it will be under control. We just cannot guarantee 
that reduction from Houston will not continue to impact and put 
them out of attainment. Thank you very much.
    [The prepared statement of Hon. Ralph B. Marquez follows:]
Prepared Statement of Ralph B. Marquez, Commissioner, Texas Commission 
                        on Environmental Quality
    Mr. Chairman and members of the Subcommittee. I am Ralph Marquez, 
Commissioner of the Texas Commission on Environmental Quality (TCEQ). 
TCEQ is the state agency with responsibility for environmental quality 
in Texas. Thank you for the opportunity to come before the subcommittee 
to provide information concerning ozone transport.
    Ozone and its precursor compounds can be transported long distances 
by wind currents affecting multiple states or regions within a state. I 
have provided the Subcommittee two examples of ozone transport. The 
first example is one of interstate transport which demonstrates a 
September 2002 haze episode in which haze formed in the Midwestern U.S. 
and moved across the eastern U.S. and into the southern states and 
Texas over several days. Our analysis of satellite imagery and monitor 
readings of ozone and particulate matter shows the impact of pollutant 
transport on Texas communities during the September episode. For 
example, 8 hour ozone values in Houston climbed from 41 ppb on 
September 9 to 144 ppb on September 13, 2002. On those same days 
particulate matter climbed from 7 micrograms/cubic meter to 56 
micrograms/cubic meter. Similar increases for these pollutants occurred 
in other major metropolitan areas, Dallas-Fort Worth, San Antonio, and 
Beaumont-Port Arthur.
    The second case is an example of intrastate transport on a day 
(September 1, 2000) when the Beaumont-Port Arthur(BPA) area exceeds the 
one hour ozone standard at least partially due to transport from the 
Houston area. In fact, when we reviewed all of the 1 hour ozone 
exceedances between 1998 and 2002, we found that approximately one-half 
of the exceedances occurred on days when there was a contribution from 
Houston. In addition, the highest monitored readings in BPA occurred on 
days when there was a contribution from Houston.
    These examples demonstrate that ozone transport can be significant 
in causing or contributing to exceedances of the federal ozone 
standard. We believe that the emission reductions that have been 
adopted for the BPA area would bring the area into attainment of the 1 
hour ozone standard but for the emissions transported from the Houston-
Galveston area. This is why it makes sense for areas downwind of a 
source area to have the same attainment date as the source area. In 
Texas, we were relying on EPA's transport policy to extend BPA's 
attainment date so that it matched Houston's attainment date of 2007. 
The rationale is that BPA could not reach attainment until Houston had 
reduced it emissions. With the decision of the 5th Circuit Court that 
EPA exceeded its authority to extend the attainment date, BPA is facing 
a bump up to a higher classification and a 2005 attainment date, which 
will be difficult to achieve.

    Mr. Barton. Thank you, Mr. Commissioner.
    We now want to hear from Dr. Ramon Alvarez, who is a 
scientist with the Environmental Defense Fund, and he is 
located in Austin, Texas. Your testimony is in the record in 
its entirety, Doctor, and we would ask you to summarize in 5 
minutes. Welcome to the subcommittee.

                   STATEMENT OF RAMON ALVAREZ

    Mr. Alvarez. Thank you, Mr. Chairman, Mr. Boucher, 
subcommittee members--who just left.
    Mr. Barton. They are all here in spirit.
    Mr. Alvarez. It is an honor to be here today, and I would 
like to talk about how you address this issue before you today 
will have major impacts on the health of American families, 
especially children.
    To illustrate how air pollution can dramatically affect 
people's lives, I want to tell you a story about Josh Shonborn, 
a 16-year-old from Dallas, Texas, who suffers from asthma.
    I gained an appreciation for the life-altering effects of 
air pollution when Josh came to testify before the Texas 
Legislature in 1999, on a bill to reduce emissions from 
grandfathered power plants. When the chairman called his name, 
Josh went up to the podium, displayed his satchel of ten or so 
medications that he routinely used to manage his asthma, and 
then very articulately described what it is like to grow up as 
an asthmatic.
    In my testimony, I discuss how ozone air pollution can 
bring on asthma attacks and even increase the risk of children 
developing asthma. Growing up with asthma affected pretty much 
everything about Josh's life. Josh's asthma attacks forced him 
to miss school, on occasion for several weeks at a time. He 
couldn't go play outside on ozone action days, which he says he 
can sense by the tightness in his chest. He couldn't do after-
school sports, or even play at friends' houses for fear he 
might require medical attention.
    Of course, he and his family have spent many days and 
nights in doctors' offices and hospital rooms, seeking 
treatment for his asthma flareups. All in all, Josh's asthma 
not only impacted his physical well-being, it also limited some 
of his social and emotional bonds that are so essential to 
growing up.
    Now, Josh was just 3 years old when Congress enacted the 
Clean Air Act Amendments in 1990. Since then, the Dallas-Fort 
Worth area has made little progress in reducing ozone levels. 
Both the frequency of ozone exceedances and the peak levels 
monitored each year have remained largely unchanged since the 
late 1980's. These trends are shown in the charts in Exhibit 1 
of my testimony, on page 9.
    Notice on the bottom chart that both in 1999 when Josh came 
to testify at the Texas Legislature, and again this year, 
2003----
    Mr. Barton. Do you have a chart that we could put up?
    Mr. Alvarez. It is in the written testimony at page 9.
    Mr. Barton. We don't have it to put up?
    Mr. Alvarez. I don't know if you have it in front of you.
    Mr. Barton. We just want to be fair. We put some of Mr. 
Marquez' charts up, so if we actually have them to put up, we 
will do it, but apparently you don't have it in----
    Mr. Alvarez. Oh, I haven't presented that yet, I am sorry.
    Mr. Barton. Okay. Go ahead, please.
    Mr. Alvarez. So, in 1999 when Josh testified at the Texas 
Legislature and again this year, picos on readings have topped 
out at more than 160 ppb in the Dallas-Fort Worth area. The 
ozone standard is set at 120 ppb. Anything higher than 125 is 
considered unhealthy for sensitive groups--that is the color 
orange on the EPA Air Quality Index--and levels above 165 are 
considered unhealthy--that is the color red on the EPA Air 
Quality Index. So twice in the last 4 years we have been at 
levels considered almost very unhealthy by EPA.
    Thirteen years have passed since the Clean Air Act 
Amendments were enacted. Josh is now 16 years old, and air 
pollution in Dallas remains about as bad as it was in 1990. In 
fact, the Clean Air Act's promise to Josh and his family that 
ozone would be cleaned up in his hometown has been broken 
repeatedly.
    As discussed in my testimony, Dallas-Fort Worth was 
originally supposed to attain by 1996, as a moderate 
nonattainment area. Then after a bump-up to serious, the region 
should have attained in 1999, but Texas didn't submit a 
complete plan before the attainment date, triggering the threat 
of sanctions from EPA. And that is where the Attainment Date 
Extension Policy comes in.
    Rather than bump-up the Dallas-Fort Worth area to severe 
with a 2005 attainment date for failing to meet the 1999 
deadline, EPA proposed to give the area an additional 2 years, 
until 2007, on the grounds that pollution transported from 
Houston would prevent attainment by 2005. Was this true? Well, 
the evidence shows that it wasn't. The evidence shows only a 
small and infrequent contribution of Houston on air pollution 
levels in Dallas-Fort Worth.
    Houston's emissions impact the Dallas-Fort Worth area only 
in 10 percent of all of the exceedance days. This is not enough 
of an impact to keep the Dallas-Fort Worth area from attaining, 
but this is all academic since the policy was found unlawful.
    The good news is that all of the stakeholders in the 
Dallas-Fort Worth area know we have to go back to the drawing 
board, and the increased public concern over local air 
pollution and the pressures of the Clean Air Act have provided 
significant motivation to reach a solution that meets the needs 
of all parties involved.
    I would like to also draw your attention to Exhibit 2 of my 
testimony, on page 10, an e-mail from Collin County Judge Ron 
Harris, who asked me to relay that we are making progress 
through local partnerships, and there is no reason to change 
the rules again. I should mention that my counterparts in other 
environmental groups tell me that similar negotiations are 
going on in the Beaumont-Port Arthur area.
    So, in sum, we finally have some momentum through local 
partnerships to put the Dallas-Fort Worth area on the path to 
clean air. Federal legislation could put these efforts in 
jeopardy. Without the additional controls and planning 
requirements associated with a bump-up, children like Josh will 
be exposed to ozone for additional years.
    As a closing thought, I would like to note that by the time 
the ozone standard is finally achieved in the Dallas-Fort Worth 
area, Josh Shonborn will be in college. For him, this victory 
will be too late to have altered the course of his childhood, 
but it is not too late to improve the lives of the next 
generation of children like Josh in Dallas and other U.S. 
cities with high ozone levels. For their sake, let us not allow 
any further delay in meeting clean air deadlines.
    That concludes my statement. Thank you, Mr. Chairman.
    [The prepared statement of Ramon Alvarez follows:]
 Prepared Statement of Ramon Alvarez, Scientist, Environmental Defense
    Good morning. My name is Ramon Alvarez and I am an atmospheric 
scientist in the Austin, Texas office of Environmental Defense, a non-
profit, non-partisan, non-governmental environmental organization 
representing approximately 300,000 members nationally. Thank you for 
the invitation to share with you the experience of the Dallas/Fort 
Worth ozone nonattainment area with EPA's attainment date extension 
policy.
                                summary
    Achieving the ozone standard in the Dallas/Fort Worth (DFW) area 
and other U.S. communities is of vital importance to public health. 
Ozone impairs the body's respiratory system, aggravates existing 
respiratory diseases, and has been associated as a causative factor in 
the development of asthma in children. Unfortunately, the DFW area has 
made little progress in reducing ozone pollution since the passage of 
the 1990 Clean Air Act Amendments.
    The DFW region twice failed to meet the ozone standard, in 1996 
(due to a scientifically flawed plan) and in 1999 (after failing to 
develop a plan prior to the clean air deadline). After EPA threatened 
sanctions, a new clean air plan was developed in April 2000. In 2001, 
EPA proposed to approve this plan, including the request from Texas to 
extend the attainment date to 2007 without reclassifying the area to 
severe nonattainment. EPA has indicated that it will not finalize this 
approval in light of the appellate court decisions on the attainment 
date extension policy.
    As discussed below, transported pollution from Houston has only a 
minor and infrequent impact on the DFW area. EPA's transport policy, 
even if legal, was thus erroneously applied in the DFW area, since the 
evidence shows DFW could attain the ozone standard even if Houston were 
to do nothing to clean up its air pollution.
    As public concern about local air pollution has increased, 
stakeholders in the DFW area are now more actively working together to 
agree on a path forward to clean up the region's air. Legislative 
proposals to extend attainment deadlines pose a serious risk of 
disrupting these ongoing negotiations that have a good likelihood of 
reaching a solution that meets the needs of all the parties involved. 
Moreover, any further delay in deadlines for the DFW area would mean 
that thousands of children and other sensitive individuals will 
continue to suffer the adverse health effects associated with ozone 
pollution.
 failure to reduce high ozone levels seriously threatens public health.
    Inhaling ozone significantly harms human health: ozone can burn 
cell walls in the lungs and air passages, causing tissues to swell, 
chest pain, coughing, irritation and congestion. Other effects include 
decreased lung function, aggravation of asthma, increased 
susceptibility to bacterial infection, and generation of scar tissue 
and lesions in the respiratory system.
    In reviewing recent evidence of the harm caused by ozone, EPA 
reached an ominous conclusion on the effects of repeated and long-term 
exposure to ozone:
        EPA has concluded that repeated occurrences of moderate 
        responses, even in otherwise healthy individuals, may be 
        considered to be adverse since they could well set the stage 
        for more serious illnesses.1
---------------------------------------------------------------------------
    \1\ 66 Fed. Reg. 57275 (November 14, 2001)
---------------------------------------------------------------------------
    EPA's conclusion was confirmed by new evidence showing that 
children who participate in high activity, outdoor sports in portions 
of the Los Angeles air basin are 3.3 times more likely to develop 
childhood asthma than children who play equally active sports in 
communities with low ozone environments.2 For most children 
who develop asthma, it is an incurable lifetime affliction. EPA 
recognizes that whatever the effect of ozone inhalation on average 
adults, the impact on those who suffer from asthma, the elderly, 
outdoor workers, and active children are far more severe.3
---------------------------------------------------------------------------
    \2\ McConnell et al., ``Asthma in exercising children exposed to 
ozone: a cohort study,'' Lancet, V. 359, 386-391 (Feb. 2, 2002). Other 
recent studies have also linked ozone to serious health effects, 
including birth defects, decreased lung capacity in girls, and acute 
stroke mortality.
    \3\ 66 Fed. Reg. 57276-78 (November 14, 2001)
---------------------------------------------------------------------------
    A lifetime of asthma is a high price to exact from our children for 
failing to reduce ozone to safer levels. Any further delay in deadlines 
to meet the ozone standard would mean that hundreds of thousands of 
American children and other sensitive individuals will suffer the 
adverse health effects associated with ozone pollution.
how did dallas/fort worth come to rely on the attainment date extension 
                                policy?
    The Dallas/Fort Worth area has had little success in curbing ozone 
air pollution since the passage of the 1990 Clean Air Act Amendments. 
Both the frequency of ozone exceedances and the peak levels monitored 
each year have remained largely unchanged since the late 1980s. (See 
Exhibit 1). The Dallas/Fort Worth area continues to routinely record 1-
hour ozone exceedances, including this year's high value to date of 161 
parts per billion.4
---------------------------------------------------------------------------
    \4\ The 1-hour National Ambient Air Quality Standard for ozone is 
120 parts per billion (ppb).
---------------------------------------------------------------------------
    Under the 1990 Clean Air Act Amendments, the 4-county Dallas/Fort 
Worth area was classified as a moderate nonattainment area and required 
to meet the health standard for ozone by 1996. The State Implementation 
Plan (SIP) submitted to EPA in 1994 contained only the Act's minimum 
mandatory reduction (15% of the emissions of volatile organic 
compounds).5 Notably, this plan lacked any measures to 
reduce nitrogen oxides, significant reductions of which are now 
accepted to be essential to achieving the ozone standard.6 
Not surprisingly, the minimalist VOC-only plan of 1994 failed to bring 
the region into attainment by the 1996 deadline. EPA reclassified 
(``bumped up'') the Dallas/Fort Worth nonattainment area from moderate 
to serious in March 1998.
---------------------------------------------------------------------------
    \5\  Ozone is not directly emitted by sources. It is formed by the 
reaction of volatile organic compounds (VOC) with nitrogen oxides 
(NOX) in the presence of sunlight.
    \6\  The 1994 SIP claimed the 15% VOC reductions would be enough 
for the region to meet the ozone standard. Texas applied for and 
received a waiver from  182(f) of the Clean Air Act regarding 
NOX emission reductions. The DFW area did not begin reducing 
NOX emissions until after the NOX waiver was 
rescinded in 1999. The April 2000 SIP will reduce total NOX 
emissions by approximately 40 percent.
---------------------------------------------------------------------------
    The bump-up to serious required Texas to prepare a new SIP by March 
1999. The SIP Texas submitted was, by its own admission, inadequate. 
Accordingly, EPA found the SIP incomplete and started the sanctions and 
Federal Implementation Plan clocks.
    The looming threat of sanctions spurred the development and 
submission in April 2000 of a new SIP. This plan relies on EPA's 1998 
attainment date extension policy, which is the subject of today's 
hearing. In January 2001, EPA proposed to approve the April 2000 SIP 
and extend the attainment date to November 2007 while retaining the 
area's serious classification.7
---------------------------------------------------------------------------
    \7\ 66 Fed. Reg. 4764 (January 18, 2001). EPA has not taken final 
action on this proposal but has indicated that it will not finalize 
approvals of any more SIPs relying on the attainment date extension 
policy.
---------------------------------------------------------------------------
transport from houston does not prevent the dallas/fort worth area from 
                               attaining
    EPA's proposed extension of the DFW area's attainment date is based 
on a claim that transported pollution from Houston jeopardized the DFW 
area's ability to attain the ozone standard. The evidence, however, 
does not support that claim. We accept the notion that emissions from 
the Houston/Galveston nonattainment area can contribute to observed 
ozone levels in the DFW area on some days. Since 1996 we have argued 
that the control strategy for the DFW area must address ozone 
transport. However, we do not believe that ozone transported from 
Houston/Galveston would alone prevent the DFW area from attaining the 
ozone standard.
    EPA justified its proposed extension of the DFW area's attainment 
date largely on two analyses performed by Texas: 8
---------------------------------------------------------------------------
    \8\ 66 Fed. Reg. 4758 (January 18, 2001).

 Ozone source apportionment analysis. On the day with the highest 
        modeled ozone, 2 to 4 ppb of ozone in some portion of the DFW 
        area came from Houston sources.
 Back trajectory analysis. Air masses entering the DFW area had 
        trajectories going back to the Houston area on approximately 10 
        percent of the days when ozone exceedances were recorded in DFW 
        between 1993 to 1998.
    The only conclusion that can be reached from the analyses contained 
in the administrative record is that on a small number of days, there 
may be a small amount of additional ozone in the DFW area that came 
from Houston. Such a result is not surprising--ozone air pollution is 
known to travel over even longer distances such as from the Midwest to 
the Northeast. However, the fundamental question that was never 
answered by Texas or EPA is whether the small amount of ozone 
originating in Houston that might occasionally arrive in the DFW area 
is enough to prevent DFW from attaining the ozone standard before 
Houston's attainment date.
    A fair evaluation of the evidence would lead to the conclusion that 
the Dallas/Fort Area could still attain the ozone standard even if 
Houston did nothing to clean up its air pollution. For example, 
Houston's emissions could be expected to impact the DFW area less than 
one time per year.9 Even if all of the monitored ozone on 
those relatively rare days came from Houston,10 the DFW area 
could still comply with the 1-hour standard, which allows for 1 
exceedance per year. Thus, EPA's transport policy, even if it were 
legal, was erroneously applied in the DFW area.
---------------------------------------------------------------------------
    \9\ The 1-hour ozone standard was exceeded in the DFW area on 102 
days between 1988 and 2002, or roughly 7 times per year. Since 10% of 
exceedances were identified to involve some level of transport from 
Houston, Houston's emissions would have impacted the DFW area an 
average of roughly 0.7 days per year.
    \10\ In fact, the opposite is true. The amount of ozone due to 
home-grown emissions far outweighs the amount of ozone blowing in from 
Houston. Even a worst-case modeling simulation using ``synthetic 
winds'' to carry Houston's air pollution plume directly into the DFW 
area shows only modest impacts. The synthetic winds were manufactured 
by choosing the wind speed and direction to maximize the amount of 
pollution that would reach the DFW area. When all of the man-made 
emissions of NOX and VOC in the Houston area were removed 
from the model, ozone levels in the DFW area are reduced by up to 10 
ppb. Even this modest estimate is unrealistically high since the winds 
would never carry Houston pollution in a straight line to Dallas/Fort 
Worth and all Houston emissions could not be eliminated. (Texas Natural 
Resource Conservation Commission, DFW Attainment Demonstration SIP--
April 2000, p. 6-42)
---------------------------------------------------------------------------
    Because transport from Houston is only a minor component of Dallas/
Fort Worth's ozone air pollution, attainment of the 1-hour ozone 
standard will only be achieved after sufficient local controls are in 
place to eliminate the vast majority of exceedances that are the result 
of ozone precursor emissions generated within the DFW area itself. It 
is misguided to blame the small amount of transport from an upwind area 
as the reason to once again extend a deadline established to ensure the 
DFW area's more than 4 million residents can breathe healthier air.
        legislation threatens locally-driven, win-win solutions
    In both the Dallas/Fort Worth and Beaumont/Port Arthur areas, 
legislative proposals at this time pose a serious risk of disrupting 
ongoing negotiations that have a good likelihood of reaching a solution 
that meets the needs of all the parties involved.
    In the Dallas/Fort Worth area, local government officials, business 
leaders, EPA, the Texas Commission on Environmental Quality and 
environmental groups are working in a cooperative spirit to agree on a 
path forward to cleaning up the region's air. One outcome might be 
expeditious attainment of the 1-hour standard and early compliance with 
the 8-hour ozone standard now being implemented by EPA. I and other DFW 
area stakeholders feel that the current air quality challenges facing 
the region can best be handled at the local level and that federal 
legislation on the attainment date extension policy is not needed. (See 
for example Exhibit 2, email from Ron Harris, Collin County Judge)
    In Beaumont/Port Arthur (BPA), discussions are actively taking 
place between all the parties (including the environmental plaintiffs, 
regulated industry, Texas and EPA) to respond to the 5th Circuit Court 
decision on EPA's use of the attainment date extension policy for the 
BPA area. These discussions could lead to a negotiated agreement 
whereby the area would not be bumped up to severe. EPA has already 
demonstrated the Act's potential flexibility by proposing, in the 
alternative, a single or double bump up for BPA.
[GRAPHIC] [TIFF OMITTED] 

[GRAPHIC] [TIFF OMITTED] 

    Mr. Barton. Thank you, Doctor.
    We now want to hear from Mr. Ronald Methier, who is the 
Chief of the Georgia Department of Natural Resources, 
Environmental Protection Division. Your testimony is in the 
record in its entirety, and we ask that you try to summarize it 
in 5 minutes, Doctor.

                    STATEMENT OF RON METHIER

    Mr. Methier. Thank you very much. I am the Chief of the Air 
Protection Branch, with the Georgia Environmental Protection 
Division, and on behalf of the State of Georgia I would like to 
thank you for this opportunity to talk about this important 
issue.
    We have been grappling with the bump-up policy in Georgia 
for many years. The Atlanta ozone nonattainment area is one of 
many serious ozone nonattainment areas that failed to attain 
the 1-hour ozone standard by the 1999 attainment date 
established in the Clean Air Act Amendments of 1990. Atlanta's 
failure to attain can be attributed in significant part to the 
problem of downwind transport.
    For this reason, Georgia applied for and received an 
extension of its attainment date under EPA's extension policy 
for nonattainment areas affected by downwind transport. EPA's 
recent decision to rescind that policy as a result of 
litigation will result in bump-up that is both unfair and 
counterproductive.
    Georgia has made tremendous progress in controlling 
emissions at the local level. Atlanta's air quality is steadily 
improving despite our exponential growth. The Clean Air Act 
Amendments of 1990 classified nonattainment areas based on air 
quality at that time, which put Atlanta in the serious 
classification. If Atlanta were classified based on data 
through 2002, it would be considered a moderate area. And with 
the continued air quality progress we are seeing this year, the 
end of 2003 monitoring data would classify the area as 
marginal.
    EPA was right to extend the attainment date for Atlanta to 
adjust its statutory scheme to account for the problem of 
downwind transport. Extending the attainment date also 
prevented Atlanta from being forced to adopt new local control 
measures that are, at best, superfluous and, at worst, 
counterproductive for Atlanta.
    Bump-up does not make sense if there are no deficiencies in 
the SIP to remedy. In Atlanta, for example, EPA has confirmed 
that Georgia has already adopted all the reasonably available 
control measures at the local level, and is on schedule to 
bring Atlanta into attainment as soon as the NOX SIP 
Call Rule is implemented in 2004. It would be premature and 
counterproductive to bump Atlanta up before the NOX 
SIP Call Rule is implemented. Proposed legislation to codify 
the extension policy is included in our written testimony.
    Our resistance to getting bumped up is not just a fairness 
issue. We agree that we have to do everything we can at the 
local level to control emissions, and have already adopted the 
controls needed for the 1-hour ozone standard in Atlanta. Our 
problem is that the severe area requirements will do nothing to 
help clean the air, and might actually make it worse.
    Of the items prescribed for severe nonattainment areas, the 
most counterproductive is the requirement to use Federal 
reformulated gasoline, or Federal RFG, within 1 year of being 
bumped up to severe. Unfortunately, Federal RFG is not the 
right fuel solution for Atlanta, although it works very well in 
many other areas. Georgia has adopted a fuel program that is 
superior to Federal RFG for Atlanta's conditions because it is 
specifically designed to reduce nitrogen oxides, or 
NOX emissions.
    Georgia and EPA have both determined that Georgia's low 
sulfur program is necessary for the Atlanta nonattainment area 
to achieve the ozone standard in a timely manner. If Atlanta is 
bumped up to severe, Atlanta will lose the benefits of this 
necessary control measure, which will be displaced by Federal 
RFG. NOX emissions from motor vehicles in this area 
would very likely increase, producing an increase in ozone 
concentrations.
    Even if the extension policy is not codified, the RFG 
problem could be solved by granting Atlanta a 2-year extension 
on the requirement to adopt Federal RFG as a severe area. Some 
proposed legislation is also included in my written testimony 
that has been drafted to solve Atlanta's problem without having 
any adverse impact on the nationwide RFG program, or affecting 
any other area.
    Another bump-up problem is the penalty provision you have 
heard of in Section 185. If Atlanta is bumped up to severe and 
then fails to attain by 2005, Georgia EPD will be forced to 
impose penalties on major stationary sources within the Atlanta 
nonattainment area. These businesses, which range from very 
large power plants and auto assembly plants, down to very small 
businesses and hospitals, are complying with these strict 
permit limits. Under Section 185, however, compliance with 
strict permit limits would be no defense. By our calculations, 
about 63 businesses in full compliance with their permits would 
pay a total of over $52 million per year if we fail to attain 
by 2005. This result is highly punitive and unfair, and it also 
makes no sense to impose penalties for VOC emissions from these 
sources in a NOX-limited area that has, by 
necessity, adopted a NOX control strategy like 
Atlanta has.
    In conclusion, the air in Atlanta is getting cleaner, and 
it will be even cleaner still once the NOX SIP Call 
Rule takes effect in 2004 next year. EPA took the time to do 
the NOX SIP Call right instead of rushing to an 
incomplete solution. My concern is that by taking the time to 
do the job right, EPA has inadvertently put the States in a 
position of being penalized for delays beyond their control. I 
urge you to consider the progress we have made in implementing 
local control measures and in working with EPA to bring the 
NOX SIP Call to fruition, and to find a remedy that 
will continue our progress toward cleaner air. Thank you.
    [The prepared statement of Ronald Methier follows:]
   Prepared Statement of Ron Methier, Chief, Air Protection Branch, 
               Georgia Environmental Protection Division
    Good morning ladies and gentlemen: My name is Ronald Methier. I am 
the Chief of the Air Protection Branch of the Georgia Environmental 
Protection Division. On behalf of the State of Georgia, I would like to 
thank you for this opportunity to testify on what is a very important 
issue, not only to the people of Georgia, but I believe to the people 
of the United States as a whole.
    You have asked me to address the bump-up policy under Title 1 of 
the Clean Air Act. As you know, we have been grappling with this policy 
in Georgia for several years. The Atlanta Ozone Non-Attainment Area is 
one of fifteen (15) Serious ozone non-attainment areas that failed to 
attain the one-hour National Ambient Air Quality Standard for ground-
level ozone by the 1999 attainment date established in the Clean Air 
Amendments of 1990. Atlanta faced a number of challenges during the 
1990s that prevented attainment. But its failure to attain can also be 
attributed in significant part to the problem of ``downwind 
transport.'' For this reason, Atlanta applied for and received an 
extension of its attainment date under EPA's Extension Policy for non-
attainment areas affected by downwind transport.1 EPA's 
recent decision to rescind that policy, as a result of litigation, will 
result in a ``bump-up'' that is both unfair and counter-productive.
---------------------------------------------------------------------------
    \1\ Extension of Attainment Dates for Downwind Transport Areas, 64 
Fed. Reg. 14441 (Mar. 25, 1999) (``Extension Policy'').
---------------------------------------------------------------------------
            i. the basic rationale for the extension policy
    The most basic rationale for EPA's Extension Policy is the 
recognition that the original, 1999 attainment date was never intended 
to stand alone. The 1999 attainment date was supposed to be the 
culmination of a cooperative effort between EPA and the States. The 
states were assigned responsibility for preparing State Implementation 
Plans to control local emissions. At the same time, Congress recognized 
that air pollution does not respect political boundaries. Therefore, 
Congress assigned EPA the responsibility to adopt a regional plan to 
prevent upwind emissions from interfering with attainment in downwind 
states.
    Unfortunately, EPA was unavoidably delayed in its effort to adopt 
effective regional transport controls. The delay was caused by EPA's 
discovery of gaps in the data and scientific understanding of the 
formation and transport of ozone. After a monumental effort by EPA and 
the affected states, these gaps have now been filled. The result is 
known as the ``NOX SIP Call Rule,'' which is scheduled to be 
implemented by 2004. The best available models predict that Atlanta 
will attain the one-hour standard for ground-level ozone as soon as the 
NOX SIP Call Rule is implemented.
    The NOX SIP Call rule represents a tremendous step 
forward, but it came five years too late. Atlanta was supposed to 
attain by 1999. Because the NOX SIP Call Rule has not yet 
been implemented, Atlanta continues to be significantly affected by 
emissions that blow into the area from out-of-state.2
---------------------------------------------------------------------------
    \2\ Our modeling demonstrates that transported NOX 
contributes as much as 23% to the average ozone exceedance in the 
Atlanta nonattainment area. See Georgia's State Implementation Plan for 
the Atlanta Ozone Non-Attainment Area (July 17, 2001) (``Attainment 
Demonstration SIP'') at 3-37. The Attainment Demonstration SIP is 
available on the Georgia DNR website at http://www.dnr.state.ga.us/dnr/
environ/plans_files/plans/sip_narrative.pdf.
---------------------------------------------------------------------------
    Meanwhile, Georgia has made tremendous progress in controlling 
emissions at the local level. Atlanta's air quality is steadily 
improving despite exponential growth. The Clean Air Act Amendments of 
1990 classified non-attainment areas based on air quality at that time, 
which put Atlanta in the ``serious' classification. If Atlanta were 
reclassified based on data through 2002, it would be considered a 
``moderate'' non-attainment area. With the continued air quality 
progress we are seeing this year, the end of 2003 monitoring data could 
classify the area as ``marginal.''
    Under these circumstances, EPA was right to extend the attainment 
date for Atlanta. EPA needed to extend the attainment date for Atlanta 
to adjust the statutory scheme to account for EPA's own delay in 
addressing the problem of downwind transport. Extending the attainment 
date also prevented Atlanta from being forced to adopt new local 
control measures that are at best superfluous, and at worst counter-
productive.
    Proposed legislation to codify the Extension Policy is attached 
behind Tab A. Additional background is provided below.
A. ``Bump-up'' Does Not Make Sense For Areas Affected by Downwind 
        Transport.
    Fundamentally, the bump-up provision will have unintended 
consequences if it is applied to areas that fail to attain as a result 
of upwind emissions. By design, bump-up limits the state's ability to 
evaluate and adopt local emissions controls. This provision is based on 
the assumption that non-attainment can be attributed to the state's 
failure to adopt a State Implementation Plan with adequate local 
emissions controls. This assumption does not hold for downwind areas 
affected by transport.
    1. The Purpose of the Bump-up Provision is to Remedy Deficiencies 
in the SIP--The Clean Air Act Amendments of 1990 classified ozone non-
attainment areas into five categories and assigned ``attainment dates'' 
to each classification.3 Each State was required to develop 
a State Implementation Plans (``SIP'') to bring its non-attainment 
areas into attainment by the applicable attainment date. As a rule, the 
the Act left it to the states, subject to the approval of EPA, to 
determine the content of the SIP. Congress did, however, prescribe 
certain elements that were required to be included. These requirements 
correspond to the area's classification as a Marginal, Moderate, 
Serious, Severe, or Extreme. The requirements, which are set forth at 
42 U.S.C.  7511a(a)-(e), become very prescriptive for the higher 
classifications.
---------------------------------------------------------------------------
    \3\ The attainment dates range from 1993 for Marginal nonattainment 
areas to 2010 for Extreme areas; for Serious areas, the date assigned 
was 1999. 42 U.S.C. 7511(a)(1) (Table 1).
---------------------------------------------------------------------------
    The ``bump-up'' provision is designed to force the states to remedy 
deficiencies in the SIP. Thus, if an area fails to attain by the 
applicable attainment date, it is ``bumped up'' to the next higher 
classification.4 As a result, the state is forced to adopt 
the emissions control measures that are prescribed for the next higher 
classification. This is the only legal consequence of missing the 
attainment date. No other penalties apply.5 The Act does not 
generally impose penalties for nonattainment because the emphasis in 
the Act is on planning and adaptive management, not 
punishment.6
---------------------------------------------------------------------------
    \4\ See 42 U.S.C. 7511(b)(2).
    \5\ See Testimony of Mary D. Nichols, Assistant Administrator, 
Office of Air and Radiation, Before the Subcommittees on Oversight and 
Investigations and Health and Environment of the Committee on Commerce, 
House of Representatives (Nov. 9, 1995) (hereinafter Nichols 
Testimony).
    \6\ There are exceptions to this rule, but they apply only to 
Severe areas, which are not subject to bump-up under 181(b). See 7 
U.S.C. 7511(b)(4) & 7511d.
---------------------------------------------------------------------------
    2. Bump-up Does Not Make Sense Unless the SIP is Deficient--Bump-up 
does not make sense if there are no deficiencies in the SIP to remedy. 
This is the case for areas that are significantly affected by downwind 
transport. In such areas, the local emissions controls may be perfectly 
sufficient. In Atlanta, for example, EPA has confirmed that Georgia EPD 
has already adopted all ``reasonably available control measures'' at 
the local level.7 These controls are projected to bring 
Atlanta into attainment as soon as the NOX SIP Call Rule is 
implemented in 2004. If we fail to attain in 2004, we will need to 
reevaluate the SIP and incorporate additional local emissions controls. 
It would be premature and counter-productive, however, to make this 
judgment before the NOX SIP Call rule is implemented.
---------------------------------------------------------------------------
    \7\ See Attainment Demonstration SIP, supra n.2 at 3-35.
---------------------------------------------------------------------------
             ii. bump-up will have unintended consequences
    It is important to note that Georgia's resistance to getting bumped 
up is not just a fairness issue. We wholeheartedly agree that we must 
do everything practicable at the local level to control emissions. For 
this reason, Georgia EPD has already adopted the Severe-area controls 
that would have any beneficial effect on the ozone situation in 
Atlanta.8 Our problem is that the remaining Severe-area 
requirements will do nothing to help clean the air, and might actually 
make it worse.
---------------------------------------------------------------------------
    \8\ See Tab C, Affidavit of Harold F. Reheis, former Director of 
Georgia EPD.
---------------------------------------------------------------------------
    This situation highlights an overall problem with Subpart 2 of the 
Clean Air Act Amendments of 1990, which is that the ozone provisions 
are far too prescriptive. The ozone problem is too local and too 
complicated for a one-size-fits-all solution. What works for Chicago 
might not work for Atlanta. In fact, the prescription for Severe areas 
is not right for Atlanta. One requirement in particular--the 
requirement for Severe Areas to use Federal Reformulated Gasoline 
(``Federal RFG'')--could actually impede our progress toward clean air.
A. One-size-fits-all prescriptions do not work for Atlanta
    When the Clean Air Act was amended in 1990, it seemed appropriate 
to mandate a one-size-fits-all solution to the ozone problem. At that 
time, most scientists believed that ozone was best controlled by 
reducing emissions of volatile organic compounds 
(``VOCs'').9 We now know, however, that this strategy is not 
right for Atlanta.
---------------------------------------------------------------------------
    \9\ Ozone is a ``secondary'' pollutant that is created in the 
atmosphere when volatile organic compounds (``VOCs'') and oxides of 
nitrogen (``NOX'') combine in sunlight. The reaction is 
sensitive to atmospheric conditions like humidity and temperature. 
Because average summer temperatures are comparatively high in Atlanta, 
conditions in this area are particularly conducive to the formation of 
ozone.
---------------------------------------------------------------------------
    EPA confirmed this finding in a study prepared jointly with the 
National Academy of Sciences. The report was submitted in accordance 
with Section 185B of the Clean Air Act, which directed EPA to study and 
report on the relative benefits of VOC and NOX controls in 
reducing ozone levels. EPA submitted its ``185B Report'' to Congress in 
July 1993.
    Focusing specifically on Atlanta, 185B Report concludes that 
certain areas can best control ozone by reducing NOX 
emissions. This shift in focus stemmed from an increased awareness of 
the role of biogenic VOCs (i.e., VOCs from natural sources such as 
trees) in the formation of ozone. In essence, the 185B Report found 
that ozone in Atlanta is ``NOX limited,'' given the 
abundance of natural VOCs in the atmosphere. From a practical 
standpoint, this means that it is far more effective to control ozone 
by reducing NOX emissions than by reducing VOC 
emissions.10
---------------------------------------------------------------------------
    \10\ Based on sensitivity analyses included in Attainment 
Demonstration SIP for Atlanta, the ratio is approximately 4 to 1: 
reducing NOX emissions by 1 tpd will achieve the same effect 
as reducing VOC emissions by 4 tpd. Attainment Demonstration SIP, Table 
5-13 (http://www.dnr.state.ga.us/dnr/environ/plans_files/plans/
sip_table5-13.pdf).
---------------------------------------------------------------------------
    EPA immediately recognized the significance of this finding. EPA 
noted in particular that the Atlanta studies ``cast uncertainty on past 
emissions control strategy approaches''--including some that had been 
mandated by the Clean Air Act Amendments of 1990.11 EPA 
elaborated as follows:
---------------------------------------------------------------------------
    \11\ See 185B Report at p. 3-11.
---------------------------------------------------------------------------
        The important conclusion from this analysis is that, as pointed 
        out by [the National Academy of Sciences] and agreed by EPA, 
        the latest evidence suggests that the ozone precursor control 
        effort should focus on NOX controls in many areas 
        [particularly but not only in Atlanta]. The development and 
        implementation of control programs should not be hindered by a 
        bias favoring one control direction over another. This is 
        extremely significant because it raises questions regarding the 
        effectiveness of the VOC and NOX control programs 
        mandated by the current CAA.12
---------------------------------------------------------------------------
    \12\ Id. at p. 3-28.
---------------------------------------------------------------------------
    This new understanding is directly relevant to the basic rationale 
for the Extension Policy. Further studies have confirmed that emissions 
control programs that Georgia EPD would be required to adopt if Atlanta 
were bumped up to Severe would not improve air quality. Indeed, while 
most of these control measures are merely superfluous, a few are 
actually counter-productive.
B. Federal RFG is Not the Right Fuel Solution for Atlanta
    Of the items prescribed for Severe non-attainment areas, the most 
counter-productive is the requirement to use Federal RFG. Severe areas 
are required to use Federal Reformulated Gasoline or ``Federal RFG'' 
within one year of being bumped up to Severe.13 
Unfortunately, Federal RFG is not the right fuel solution for Atlanta. 
The problem with Federal RFG is that it is designed to reduce VOC 
emissions, as opposed to NOX emissions. Specifically, 
Federal RFG is required to reduce VOC emissions by at least 25% in 
comparison with conventional gasoline.14 By contrast, the 
only Federal RFG requirement pertaining to NOX is that 
NOX emissions must be ``no greater than'' the level of such 
emissions from conventional gasoline.15 Federal RFG is 
obviously not the right fuel solution for a NOX-limited area 
like Atlanta.16
---------------------------------------------------------------------------
    \13\ 42 U.S.C. 7545(k)(5), CAA 211(k)(5), prohibits the use of 
``conventional gasoline,'' as opposed to Reformulated Gasoline, in 
``covered areas.'' 42 U.S.C. 7545(k)(10)(D), CAA 211(k)(10)(D), 
states that ``[e]ffective one year after the reclassification of any 
ozone nonattainment area as a Severe ozone nonattainment area under 
section [42 U.S.C. 7511(b), CAA 181(b)], such Severe area shall also 
be a `covered area' for purposes of this subsection.''
    \14\ See 42 U.S.C. 7545(k)(3)(B).
    \15\ See 42 U.S.C. 7545.
    \16\ Reheis Aff. at 21.
---------------------------------------------------------------------------
    1. Georgia EPD Has Adopted a Fuel Program that is Superior, for 
Atlanta, to Federal RFG--Georgia EPD has adopted a fuel program that is 
superior to Federal RFG for Atlanta's conditions because it is 
specifically designed to reduce NOX emissions.17 
The program, which is being implemented in two phases, will reduce 
NOX emissions by 12.0%, or 23.54 tpd (VOCs and toxics will 
be reduced by more than 25%) by September 2003.18
---------------------------------------------------------------------------
    \17\ See Approval and Promulgation of Air Quality State 
Implementation Plans; Georgia: Control of Gasoline Sulfur and 
Volatility, 66 Fed. Reg. 8,200, 8,201 (Feb. 22, 2002) (``Final 
Preemption Waiver'').
    \18\ Reheis Aff. at 22. See also Approval and Promulgation of Air 
Quality State Implementation Plans; Georgia: Control of Gasoline Sulfur 
and Volatility, 66 Fed. Reg. 63,982, 63,983 cols. 1-2 (Dec. 11 2001) 
(``Proposed Preemption Waiver'').
---------------------------------------------------------------------------
    Georgia Gasoline is a critical part of Georgia EPD's strategy to 
improve air quality through NOX reductions and to bring 
Atlanta into attainment with the ozone standard by 2004.19 
Georgia EPD and EPA have both determined that Georgia's low-sulfur 
program is ``necessary for the Atlanta nonattainment area to achieve 
the [national ambient ozone standard] in a timely manner.'' 
20 EPA has further determined that, compared to all other 
potentially available control measures, Georgia's fuel program is the 
most reasonable and practicable measure available to reduce emissions 
from ozone precursors in the Atlanta area.21
---------------------------------------------------------------------------
    \19\ Id.
    \20\ See Final Preemption Waiver, 66 Fed. Reg. at 8,201.
    \21\ See Proposed Preemption Waiver, 66 Fed. Reg. at 63,984 col. 3.
---------------------------------------------------------------------------
    If Atlanta is bumped up to Severe, Atlanta will lose the benefits 
of this necessary control measure, which will be displaced by Federal 
RFG.22 NOX emissions from motor vehicles in this 
area would very likely increase, producing an increase in ozone 
concentrations.23
---------------------------------------------------------------------------
    \22\ While Georgia EPD might have the legal authority to require 
distributors to continue to comply with the Georgia fuel rules, even 
after the Federal RFG rules take effect within the 13-county 
nonattainment area, it would not be practical to impose such a 
requirement. Doing so would place tremendous stress on the storage and 
distribution facilities within the Atlanta area. Similar complications 
have led to distribution bottlenecks and extreme price spikes in other 
areas. For this reason, the Director of Georgia EPD has concluded that 
Georgia's low-sulfur Gasoline program will probably have to be 
abandoned altogether if Atlanta is bumped up to Severe. See Reheis Aff. 
23.
    \23\ See Reheis Aff. at 24.
---------------------------------------------------------------------------
    2. The RFG Problem Can Be Fixed By Granting Atlanta a Two-Year 
Extension on the Requirement to Adopt Federal RFG--Fortunately, the RFG 
problem is easy to fix. Even if the Extension Policy is not codified, 
the RFG problem could be solved by granting Atlanta a two-year 
extension on the requirement to adopt Federal RFG as a Severe area. 
This short extension would solve Georgia's RFG problem because the 
benefits of Georgia's low-sulfur program will phase-out as a new 
federal low-sulfur mandate phases in. The federal low-sulfur program 
will be fully phased-in in 2006. Therefore, by the Fall of 2006, 
Georgia EPD should be able to revoke the state low-sulfur rule, and 
adopt federal RFG, without any adverse consequences to the region's air 
quality.24
---------------------------------------------------------------------------
    \24\ Assuming that Atlanta is bumped up by January 1, 2004, 
gasoline distributors will be required to sell federal RFG by January 
1, 2005. This could lead to an increase in NOX emissions 
during the critical 2005 summer ozone season. By the 2006 summer ozone 
season, the federal low-sulfur standards should have phased-in 
sufficiently to prevent this negative impact.
---------------------------------------------------------------------------
    Proposed legislation is included behind Tab B. Note that this 
legislation has been drafted to solve Atlanta's problem without having 
any adverse impact on the nationwide RFG program. This fix would not 
require a permanent change to any substantive provision of the RFG 
program, and would not affect any other area.25
---------------------------------------------------------------------------
    \25\ Georgia EPD was required to obtain a ``preemption waiver'' 
under 42 U.S.C. 7545(c)(4)(C), CAA 211(c)(4)(C) to adopt the low-
sulfur fuel rule described above. See Approval and Promulgation of Air 
Quality State Implementation Plans; Georgia: Control of Gasoline Sulfur 
and Volatility, 66 Fed. Reg. 8200 (Feb. 22, 2002). None of the other 
states facing bump-up to Severe have applied for a waiver.
---------------------------------------------------------------------------
C. Penalties
    Another example of a misguided mandate is the penalty provision of 
185.26 If Atlanta is bumped up to Severe and then fails to 
attain by 2005, Georgia EPD will be forced to impose exorbitant 
penalties on major stationary sources within the Atlanta non-attainment 
area. Section 185 is unfair because it would penalize businesses for a 
problem that is totally beyond their control.
---------------------------------------------------------------------------
    \26\ 42 U.S.C. 7511d.
---------------------------------------------------------------------------
    It would be wrong to penalize major stationary sources in Atlanta, 
which range from large power plants and auto assembly plants down to 
small businesses, because these businesses are not the problem. Unlike 
some other areas of the country, the biggest contributor to ozone in 
Atlanta is the transportation sector. We have already imposed strict 
emissions limits on the major stationary sources, requiring them to 
adopt the best emissions control technologies available. These 
businesses have done their part by complying with these strict permit 
limits. Under Section 185, however, compliance with strict permit 
limits would be no defense. Businesses in full compliance with their 
permits would still be fined millions of dollars on an annual 
basis.27 By our calculations, 63 businesses in full 
compliance with their permits would pay a total of over $52,000,000 per 
year if we fail to attain by 2005. This result is highly punitive and 
unfair. Indeed, it is arbitrary in the extreme to penalize businesses 
for a problem that is beyond their control.
---------------------------------------------------------------------------
    \27\ The penalty is $7,800 ($5,000 adjusted for inflation) for each 
and every ton of NOX and VOC emissions in excess of 80% of 
the ``baseline amount.'' The baseline amount is the lower of (i) 
``actual emissions'' during the attainment year; or (ii) emissions 
allowed under the permit during the attainment year. See 42 U.S.C. 
7511d.
---------------------------------------------------------------------------
    Even worse, Section 185 would require us to penalize these 
businesses for emissions of both NOX and VOCs.28 
It makes no sense to impose penalties for VOC emissions in a 
NOX-limited area that has, by necessity, adopted a 
NOX-control strategy.
---------------------------------------------------------------------------
    \28\ The text of the penalty applies only to VOCs. See 42 U.S.C. 
7511d. However, a separate provision states that all SIP provisions 
that apply to major stationary sources of VOCs apply equally to major 
stationary sources of NOX. 42 U.S.C. 7511a(f).
---------------------------------------------------------------------------
 iii. the noX sip call rule represents the solution to the 
                     problem of downwind transport.
    Finally, this Committee has asked me to give my views concerning 
the ability of EPA, states and local areas to address downwind 
attainment problems in the future. In my view, the NOX SIP 
Call Rule will solve this problem for Atlanta and many other areas. 
That is exactly what the NOX SIP Call Rule was designed to 
do. The Extension Policy is necessary because the NOX SIP 
Call Rule was delayed, but the NOX SIP Call Rule is now on 
schedule to be implemented in 2004.
    Furthermore, even if the NOX SIP Call Rule does not 
prove to be 100% effective, we now have the data and the modeling 
technology necessary to make any necessary adjustments to this rule. We 
are far ahead of where we were in 1994 when EPA first began to develop 
regional transport controls. EPA has now filled the ``data gap'' that 
was the original and primary cause of delay.
A. The ``Data Gap'' That Delayed Implementation of Transport Controls 
        Has Been Filled.
    The Extension Policy is a direct result of the ``data gap'' that 
EPA identified in its 1993 report to Congress in accordance with 
Section 185B. Among other subjects, the 185B Report sought to identify 
the ``basic information'' that would be required to use photochemical 
grid models to evaluate attainment strategies.29 EPA 
concluded that ``high quality emissions, air quality and meteorological 
data bases'' would be ``critical for deriving credible model 
conclusions.'' 30 The report also noted, however, that such 
data bases did not exist at the time.31 This ``data gap'' 
had to be filled before these models could be used to evaluate ozone 
control strategies.32 However, the first Attainment 
Demonstration SIPs were due in just over a year.33 EPA later 
confirmed that it would be difficult or impossible for many states to 
comply with this submission deadline because the necessary technical 
information did not exist.34 Therefore, EPA extended the 
deadline for states to submit their Attainment Demonstration 
SIPs.35
---------------------------------------------------------------------------
    \29\ See 42 U.S.C. 7511f.
    \30\ See id.
    \31\ See id.
    \32\ See Memo from Mary D. Nichols to Regional Air Directors (Sept. 
1, 1994) (``1994 Nichols Memorandum'') at 1-3. The 1994 Nichols 
Memorandum is available on EPA's website at http://www.epa.gov/ttn/
oarpg/t1/memoranda/mnozone.pdf
    \33\ 42 U.S.C. 7511a(c)(2). The SIP is actually the total 
collection of rules and regulations and control strategies that have 
been approved by EPA and that are in effect at any one time. The Clean 
Air Act Amendments of 1990 include many deadlines for specific SIP 
revisions to incorporate specific programs and/or to make specific 
demonstrations. We refer to the SIP submitted to fulfill the attainment 
requirement of 42 U.S.C. 7511a(c)(2)(a) as the ``Attainment 
Demonstration SIP.''
    \34\ See Memo from Mary D. Nichols to Regional Air Directors (Sept. 
1, 1994) (``1994 Nichols Memorandum'') at 1-3. The 1994 Nichols 
Memorandum is available on EPA's website at http://www.epa.gov/ttn/
oarpg/t1/memoranda/mnozone.pdf; NOX SIP Call, 63 Fed. Reg. 
57356 col. 1 (Oct. 27, 1998) (``NOX SIP Call'').
    \35\ 1994 Nichols Memorandum at 3; NOX SIP Call, 63 Fed. 
Reg. at 57,361 col. 1.
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    EPA explained its decision to extend SIP submission deadlines to 
Congress in an oversight hearing in 1995. EPA explained that it was 
faced with two choices:
        To reduce ozone to healthful levels in many cities east of the 
        Mississippi River, there are two choices: (1) ignore the 
        quality of the air blowing in from upwind areas and require 
        cities to develop stricter, more costly programs to maintain 
        healthy air; or (2) work to find cost-effective ways of 
        reducing emissions ``blowing in'' from power plants and other 
        sources in upwind areas so that downwind cities do not have to 
        take extreme or unnecessarily costly steps to clean up 
        pollution they did not create to try to maintain healthy air 
        quality. Clearly the latter is the common sense 
        approach.36
---------------------------------------------------------------------------
    \36\ See Nichols Testimony, supra note, at 126.
---------------------------------------------------------------------------
    To take advantage of the extension policy that EPA described to 
Congress, states were required to make an ``enforceable commitment'' to 
participate in a ``multi-state consultative process'' to address the 
problem of ozone transport.37 This consultative process took 
the form of the Ozone Transport Assessment Group (``OTAG''), which was 
convened in 1995 to conduct ``the most comprehensive analysis of ozone 
transport ever conducted.'' 38 OTAG was a monumental effort, 
requiring coordination of representatives of 37 states east of the 
Rocky Mountains, along with representatives from EPA, industry and 
environmental groups.
---------------------------------------------------------------------------
    \37\ Id.; 1995 Nichols Memorandum at 2. (See Memo from Mary D. 
Nichols to Regional Administrator, Regions I-X (March 2, 1995) (``1995 
Nichols Memorandum'')).
    \38\ See NOX SIP Call, 63 Fed. Reg. at 57,362.
---------------------------------------------------------------------------
    OTAG filled the data gap, and thus made it possible to address the 
problem of ozone transport. However, the group was not able to reach 
consensus on specific NOX emissions controls that should be 
imposed on sources in upwind states to enable downwind states to 
attain. When OTAG concluded its work in June 1997, the group still had 
not developed a regional strategy to address the problem of ozone 
transport. That responsibility reverted back to EPA. EPA issued its 
notice of proposed rulemaking on November 7, 1997.39 After 
an extended notice-and-comment period, the NOX SIP Call Rule 
was finally promulgated on October 27, 1998.40
---------------------------------------------------------------------------
    \39\ See 62 Fed. Reg. 60,318 (Nov. 7, 1997).
    \40\ NOX SIP Call, 63 Fed. Reg. at 57,358 col. 2.
---------------------------------------------------------------------------
    The NOX SIP Call Rule represents the solution to the 
problem of ozone transport, but it came too late for Atlanta and 
numerous other Marginal, Moderate, and Serious areas.41 As 
EPA explained in its Notice of Proposed Rulemaking for the 
NOX SIP Call:
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    \41\ Because the ``Serious,'' ``Moderate,'' and ``Marginal'' 
attainment dates have all passed, all remaining non-attainment areas 
would already have been bumped up to Severe if not for EPA's common-
sense policy of extending attainment dates. In fact, of the 53 ozone 
non-attainment areas nationwide, only 13 are either Severe or Extreme. 
Three of the Severe areas were only recently bumped up, following EPA's 
abandonment of the Extension Policy. The remaining areas are Serious 
(19 areas with a 1999 attainment date); Moderate (12 areas with a 1996 
attainment date); and Marginal (20 areas with a 1993 attainment date). 
This information is available on EPA's website at http://www.epa.gov/
oar/oaqps/greenbk/oindex.html#List5.
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        The amount of time that is necessary to assure that the 
        rulemaking proposed today is well considered by all affected 
        parties, added to the amount of time necessary for the States 
        to adopt the required SIP revisions, and the amount of lead-
        time necessary to implement the required controls, means that 
        those controls cannot be expected to be in place in time to 
        assist the serious areas in reaching their attainment 
        date.42
---------------------------------------------------------------------------
    \42\ 62 Fed. Reg. 60,318, 60,328 cols. 2-3 (emphasis added).
---------------------------------------------------------------------------
    Implementation of the NOX SIP Call was delayed even 
further by litigation after the rule was promulgated. On August 30, 
2000, the D.C. Circuit affirmed the NOX SIP Call Rule in 
most respects, but delayed its implementation an additional year to 
give upwind states time to comply.43 As a result, downwind 
areas like Atlanta must wait until May 31, 2004 for relief from upwind 
emissions.
---------------------------------------------------------------------------
    \43\ See Michigan v. EPA, No. 98-1497 (D.C. Cir. Aug. 30, 2000).
---------------------------------------------------------------------------
    These delays led EPA to extend the deadline for submission of 
Atlanta's Attainment Demonstration SIP. In 1995, when EPA first 
announced a formal policy of extending the initial submission deadlines 
for states affected by downwind transport,44 the purpose was 
to allow Georgia EPD (and others) to incorporate the results of the 
OTAG process into the Attainment Demonstration SIP.45 
Initially, this was to be completed by 1996.46 When EPA took 
over OTAG's work by initiating the NOX SIP Call rulemaking, 
the deadline for submission of the Attainment Demonstration SIP had to 
be extended even further.47 The court-ordered modifications 
to the NOX SIP Call required additional modifications to the 
Attainment Demonstration SIP,48 and for this reason 
Atlanta's Attainment Demonstration SIP was not submitted until July 17, 
2001.49
---------------------------------------------------------------------------
    \44\ See generally 1995 Nichols Memorandum.
    \45\ 1995 Nichols Memorandum at 3.
    \46\ Id.
    \47\ NOX SIP Call Rule, 63 Fed. Reg. at 57,358 col. 1-2.
    \48\ 66 Fed. Reg. 7904 (Jan. 26, 2001).
    \49\ EPA approved the Attainment Demonstration SIP on May 7, 2002. 
See Approval and Promulgation of Implementation Plans; Georgia 1-hour 
Ozone Attainment Demonstration, Motor Vehicle Emissions Budgets, 
Reasonably Available Control Measures, 68 Fed. Reg. 30,574 (May 7, 
2002). EPA has now vacated its approval, however, as a result of its 
decision that it can no longer defend the Extension Policy.
---------------------------------------------------------------------------
B. The Extension Policy is a Necessary Response to Prior Delays.
    In summary, the Extension Policy is a necessary out-growth of the 
data gap and the subsequent history of extensions that have already 
been granted by EPA. It would be unfair and counter-productive to hold 
the states to the original schedule as if these federal delays had not 
occurred. Indeed, the Extension Policy is the only way to preserve the 
original statutory scheme and to prevent the ``bump up'' mechanism from 
having unfair and counter-productive consequences that Congress surely 
did not intend.
                               conclusion
    Finally, despite these problems, I am happy to report that the 
Clean Air Act is working. The air in Atlanta is getting cleaner. It 
will be even cleaner still once the NOX SIP Call Rule takes 
effect in 2004. It is a testament to EPA that the agency took the time 
to do NOX SIP Call right instead of rushing to an incomplete 
solution. My only concern is that, by taking the time to do the job 
right, EPA has inadvertently put the States in a position of being 
penalized for delays beyond their control. Instead of penalizing the 
states by bumping them up, we should acknowledge their progress in 
working with EPA to bring the NOX SIP Call to fruition, and 
we should extend their attainment dates to allow all parties to reap 
the benefits of this collective effort.
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    Mr. Shimkus [presiding]. Thank you, sir.
    I think, at a minimum, we will hear the opening comments of 
Mr. David Farren, who is an attorney from the Southern 
Environmental Law Center. You are recognized, and your full 
statement is in the record.

                    STATEMENT OF DAVID FARREN

    Mr. Farren. Good morning, members of the commission. Thank 
you for this opportunity to address this commission on the lack 
of need to alter the fundamental structure of the Clean Air Act 
as it relates to Atlanta's own efforts to deal with its local 
smog problem to protect public health.
    The failure to attain the ozone standard in Atlanta is not 
caused by transport to any significant degree, but by the 10-
year delay in developing and implementing a plan to adopt local 
controls, available local controls that could have achieved the 
air quality standards by the 1999 deadline, without waiting for 
transport reductions. In fact, only 9 percent of the violation 
days in Atlanta are contributed to by transport. The 23 percent 
figure that the State cites is a maximum percentage 
contribution of transport on those 9 percent of the days.
    There has been a lot of talk about the downwind extension 
policy requiring but for causation. That is not true in Atlanta 
where we have only 9 percent of the exceedances from transport. 
Thus, with only 9 percent, EPA still found Atlanta to be 
significantly affected, and allowed for the delay of local 
controls based on this small percentage. This shows that if the 
downwind extension policy is codified, many areas could latch 
onto transport, that have only a little bit of transport, as an 
excuse to delay local cleanup.
    The vast majority of Atlanta's problem related to ozone 
pollution is from local transportation emissions and power 
plant emissions which the area has only belatedly begun to 
control. These local controls can and will have dramatic 
effect, as shown by a recent study that is attached to my 
testimony, from the Journal of the American Medical 
Association. This was a study in Atlanta during the Olympics, 
where there was a 23 percent reduction in tailpipe emissions 
because of alternatives to solo driving. This, in turn, led to 
a 27 percent ozone reduction and an almost 20 percent reduction 
in acute emergency care for asthma attacks in children. For HMO 
recipients and Medicaid recipients, the reduction was even more 
dramatic, over 40 percent.
    This bump-up or reclassification for Georgia, as it admits 
in its testimony, is not a punishment; instead, it is an 
opportunity to develop a new plan to clean the air. The 
mandatory specific measures that Mr. Methier discussed are 
really only part of the picture, and the effectiveness of any 
one particular control measure is really a red herring.
    The structure of the Act--and this is recognized by the 
court decisions--is that following bump-up, the area must do 
whatever is necessary to continue on the path toward clean air, 
and this includes an annual 3 percent reduction, and doing 
whatever else is necessary to attain by the new deadline, which 
Georgia says it believes it can do. Therefore, this issue of 
penalties will not likely come into play.
    In terms of the fuels, there is already sufficient 
flexibility in the Act that that can be addressed 
administratively, and there is really no need to tinker with 
the fundamental structure of the Act. The added controls 
required by bump-up are not duplicative. The area hasn't 
attained in 30 years. There have been recent improvements in 
air quality in Atlanta, but that is largely due to the weather.
    If you look at the ozone emissions over a 20-year period, 
there have been ups and downs, peaks and valleys, but generally 
the 20-year trend is flat. If you look at these recent years 
that have been trumpeted as more favorable, there are still 
over 30 violations each year of the new 8-hour ozone standard. 
Therefore, putting in place additional controls in Atlanta 
would not be duplicative.
    In conclusion, I would like to point out that Atlanta 
prides itself on its ``can do'' spirit, which is exhibited in 
many areas to solve many problems. Georgia can readily achieve 
clean air by adopting local controls to protect the health of 
its 4 million residents within the existing framework of the 
Clean Air Act. Thank you very much.
    [The prepared statement of David Farren follows:]
   Prepared Statement of J. David Farren, Southern Environmental Law 
                                 Center
                        introduction and summary
    Mr. Chairman and Members of the Subcommittee: Thank you for the 
opportunity to provide information on the application of EPA's Downwind 
Extension Policy as an alternative to reclassification, or ``bump up'' 
as the appropriate mechanism to extend the attainment date under 
Section 181 of the Clean Air Act (the ``Act''). As an attorney with the 
Southern Environmental Law Center, which has an office in Atlanta, I 
have worked closely over the past decade with conservation groups, 
other citizen organizations, and health professionals in Georgia on 
issues related to air quality.
    The Atlanta area has never achieved the ``one-hour'' National 
Ambient Air Quality Standard (NAAQS) for ground level ozone, an 
important step in the effort to protect the health and quality of life 
of the Atlanta area's four million residents. The Eleventh Circuit 
Court of Appeals ruled last month that the Downwind Extension Policy is 
illegal as applied to the Atlanta area. For the following reasons, I 
urge this Sub-committee not to recommend changes to the Act that would 
undermine its carefully crafted deadline-driven scheme:

 The failure to achieve attainment of the one-hour ozone NAAQS in 
        Atlanta has very little to do with pollution transport and, 
        instead, results overwhelmingly from the failure timely to 
        institute available controls on local sources of pollution. In 
        fact, only 9% of the violation days in Atlanta are contributed 
        to by transport.
 Georgia officials project that Atlanta will achieve the ``one-hour'' 
        ozone standard by 2004, which will avoid any additional 
        consequences under the Act that would result from the failure 
        to meet the 2005 deadline applicable to ``severe'' 
        nonattainment Areas.
 Reclassification creates a planning opportunity to ensure that the 
        ``one-hour'' standard is attained no later than 2005. In 
        addition to the mandatory measures specified in the Act for 
        ``severe'' areas, Atlanta can choose to implement other 
        measures of its choosing to attain the ``one-hour'' standard 
        and also to make progress toward meeting the new ``eight-hour'' 
        standard, which EPA has determined to be necessary to protect 
        public health.
 The prompt reduction of ozone pollution in Atlanta will result in 
        significant public health benefits, increased productivity and 
        reduced health care costs. A study published in the Journal of 
        the American Medical Association co-authored by an Atlanta 
        pediatric pulmonologist found that reducing ozone precursors 
        during the 1996 Olympics led to a significant decline in acute 
        respiratory illness.
                      history of delay in atlanta
    Ground-level ozone, one of the main harmful ingredients in smog, is 
produced when its precursors, volatile organic compounds (``VOCs'') and 
nitrogen oxides (``NOX'') from motor vehicles, smokestacks, 
and other sources, react in the presence of sunlight. In the thirty 
years since EPA established the first national ozone standard in 1971, 
Georgia has never adopted an effective strategy for achieving the 
pollution reductions necessary to bring the Atlanta area into 
attainment with the ``one-hour'' ozone standard. Under the 1990 
Amendments to the Clean Air Act, the Atlanta area was designated a 
``serious'' ozone nonattainment area and was given almost a decade, 
until November 15, 1999, to develop and implement a plan to control air 
pollution to attain the NAAQS for ground-level ozone. Unfortunately, 
the history in Atlanta has been to delay the adoption and enforcement 
of readily available local controls on ozone precursors. As a result of 
this failure, hundreds of thousands of Atlantans continue to suffer the 
adverse health effects associated with ozone, despite the passage of 
the 1999 deadline for Georgia to implement the emissions reductions 
required for attainment of the NAAQS.
    The 1990 Amendments established a 1994 deadline for Georgia and 
other states to submit to EPA a plan that would provide for attainment 
of the NAAQS by the 1999 deadline. See 42 U.S.C.  7511a(c)(2)(A). It 
was not until five years after this submittal deadline, October 28, 
1999, that Georgia finally submitted for approval its proposed State 
Implementation Plan (SIP). Even then, EPA proposed to disapprove the 
SIP unless Georgia included additional pollution control measures to 
achieve further emissions reductions. See 64 Fed. Reg. 70,478 (Dec. 16, 
1999).
    A revised SIP with various modifications was not submitted until 
July 17, 2001, six years after the submittal deadline and almost two 
years after the deadline for actual attainment. Rather than 
demonstrating timely attainment of the NAAQS by 1999, this SIP purports 
to demonstrate attainment by the year 2004 based on EPA's 1998 
``Guidance on Extension of Attainment Dates for Downwind Transport 
Areas'' (the ``Downwind Extension Policy''). Thus, the delay in 
attaining the ozone NAAQS in Atlanta is the result of Georgia's delay 
in developing and implementing a plan to address the longstanding local 
air pollution problem in Atlanta.
     transport is a very small factor in atlanta's ozone pollution
    Never formally adopted as a rule by EPA, the Extension Policy 
permits the extension of the attainment date without ``bump up'' for 
some ``moderate'' and ``serious'' nonattainment areas based on EPA's 
belief that certain of these areas have been hindered in their attempts 
to meet air quality standards by pollution transported from other 
states. The Extension Policy, however, does not require a showing of 
``but, for'' causation. To be eligible for a waiver of the attainment 
deadline, the 1999 Federal Register notice announcing the policy 
explains that downwind areas only need show that transport 
``significantly contributes to downwind nonattainment,'' not that 
transport has rendered attainment by the deadline impossible or even 
impracticable. 64 Fed. Reg. 14,441 (March 25, 1999).
    For Georgia, by example, to be eligible for the policy, it was not 
required to demonstrate that it was unable to attain the NAAQS in 
Atlanta by 1999 through more aggressive control of local pollution. In 
addition, EPA was exceedingly liberal in its interpretation of the 
``significantly affected'' standard for application of the policy. In 
fact, EPA found that ``upwind controls are predicted to reduce the 
number of exceedances in Atlanta by 9 percent.'' 63 Fed. Reg. 57,446 
(Oct. 27, 1998). This means that over 90% of violation days in Atlanta 
result from local emissions. If Congress were to change the Act to 
allow extensions based on small amounts of transport, as occurred with 
Atlanta, almost any area could claim that it is somewhat affected, 
delaying public health protections for many millions of American 
families.
    As Georgia acknowledges in its most recent SIP revision, the 
``worst ozone episodes'' occur during ``multiple day stagnation and 
recirculation events.'' In other words, the smog days result from 
extended periods of calm weather where local pollutants hover in the 
air, not on days where the wind is bringing in emissions from out of 
state. Thus, it is clear that the most effective way to achieve the 
public health protections of ozone pollution reduction is to focus on 
local controls, which Georgia has been reluctant to do.
    According to Georgia's submitted SIP, the majority of the emissions 
that cause ozone in Atlanta come from motor vehicles rather than from 
transport or stationary sources. The nature of the transportation 
network, the resulting number of vehicle miles traveled in the 
nonattainment area and the failure to address this issue are directly 
related to the severity of the ozone pollution problem. As Georgia 
acknowledges in its SIP, smog in the area ``is spreading outward in the 
shape of a giant doughnut,'' and is greatly exacerbated by the fact 
that Atlantans drive about 35 miles per day for every man, woman and 
child--more miles per capita than in any other major city in the United 
States.
    Unfortunately, Georgia has been extremely reluctant to address 
transportation emissions. For example, just this spring it further 
delayed the implementation of a new low-sulfur fuel rule in the Atlanta 
nonattainment area at the request of interest groups within the oil 
industry. In addition, Georgia has repeatedly fallen through on 
promises to provide funding for transportation options to single 
occupant vehicle driving, such as commuter rail, HOV lanes and other 
air-quality beneficial transportation investments. Further, the Atlanta 
transit system languishes with the highest fare in the country, service 
cutbacks and no support from the State or suburban counties. Georgia 
has not attempted to develop and implement timely strategies and 
programs that have been shown to effectively reduce vehicle travel and 
motor vehicle emissions. Many such strategies are identified in the Act 
itself, 42 U.S.C.  7408(f)(1)(A), and even are illustrated in 
Georgia's SIP as capable of achieving prompt reductions in summer ozone 
levels in Atlanta.
 georgia can readily achieve the ``one hour'' standard in atlanta with 
                             local controls
    The proposed SIP for Atlanta based on the extension policy, 
recently struck down by the Eleventh Circuit, projected that air 
quality will be improved sufficiently to meet the one hour standard by 
2004, after out of state power plants institute required controls under 
the national NOX SIP call agreement. Thus, the strategy 
chosen by Georgia for Atlanta was to sit back and do less to control 
pollution locally, based on the extension policy, rather than institute 
more strategies to achieve the NAAQS by 1999.
    While this choice for Atlanta is now a fait accompli, it has 
consequences for the area, the primary one being the delay in public 
health benefits. The failure to attain also means that Atlanta must be 
reclassified to ``severe'' status and prepare a new SIP, which contains 
certain additional control measures. Because Atlanta had projected that 
it could attain the ``one-hour'' standard even under the prior SIP by 
2004, Georgia faces little danger of not meeting the 2005 deadline for 
``severe'' areas. These additional control measures, however, should in 
no sense be considered superfluous, as they are required under the Act 
to ensure attainment by the new deadline. In addition, the additional 
measures will necessary to meet EPA's new ``eight-hour'' ozone standard 
beginning next year.
    Further, to the extent that transport is a small contributor to 
nonattainment in Atlanta, many of the appropriate controls are in the 
process of being implemented. For example, Alabama, the largest source 
of transport that affects Atlanta, has begun this year to implement 
NOX controls for most of its power plants. Of course, the 
most effective way to reduce stationary source pollution in Georgia 
would be to require further reductions from in-state stationary 
sources, which are second only to transportation emissions as a source 
of ozone precursors in Atlanta. For example, two of the older power 
plants in Georgia, McDonough and Yates, lack the post-combustion 
NOX controls of modern facilities.
substantial public health benefits can be achieved through prompt ozone 
                               reduction
    Ozone is a lung-scarring irritant that affects everyone in the 
Atlanta region and which can cause or exacerbate serious health 
problems. For example, people with asthma and others who experience 
breathing difficulties must limit outdoor activities on days with high 
ozone levels. Frequently during the spring and summer months, air 
quality in Atlanta fails to meet the ozone NAAQS established by EPA for 
the protection of public health.
    According to EPA, in 1999, the year established under the Act for 
attainment, Atlanta violated the existing ``one-hour'' ozone standard 
on 23 days and exceeded the ``eight-hour'' standard on 69 days. See 
Georgia Environmental Protection Division air quality data posted at 
http://www.air.dnr.state.ga.us/tmp/99exceedences /old/index.html. (Due 
to more favorable weather conditions in the last couple of years, the 
number of violation days has been lower, as has occurred during 
previous periods of especially favorable weather patterns.) This means 
that on many summer days in Atlanta it is not safe for kids to go 
outside for recess, for the elderly to be working in their gardens and 
walking in the neighborhood or for healthy adults to exercise outdoors.
    Evidence regarding the adverse health effects attributable to ozone 
pollution strongly influenced the adoption of the 1990 Amendments to 
the Act. Expert testimony presented to Congress included evidence that:
        Ninety percent of the ozone breathed into the lung is never 
        exhaled. Instead, the ozone molecules react with sensitive lung 
        tissues, irritating and inflaming the lungs. This can cause a 
        host of negative health consequences, including chest pains, 
        shortness of breath, coughing, nausea, throat irritation, and 
        increased susceptibility to respiratory infections. * * * Some 
        scientific evidence indicates that over the long term, repeated 
        exposure to ozone pollution may scar lung tissue permanently . 
        . . Ultimately, emphysema or lung cancer may result. * * * 
        Young children may be especially vulnerable to both the acute 
        and permanent effects of ozone pollution.
H.R. Rep. No. 101-490 (1990), reprinted in Environment and Natural 
Resources Policy Division of the Congressional Research Service, 
Legislative History of the Clean Air Act Amendments of 1990 3021, 3223 
(1993).
    The frequent, dangerously high ozone levels in Atlanta during 
warmer months affect not only children and persons with impaired 
respiratory systems, but also healthy adults. As the former EPA 
Administrator concluded: ``Exposure to ozone for six to seven hours at 
relatively low concentrations has been found to reduce lung function 
significantly in normal, healthy people during periods of moderate 
exercise. This decrease in lung function is accompanied by such 
symptoms as chest pain, coughing, nausea, and pulmonary congestion.'' 
60 Fed. Reg. 4712, 4712 (Jan. 24, 1995). In reviewing more recent 
evidence of the harm caused by ozone, EPA published a lengthy notice 
summarizing the adverse health effects of both short-term and long-term 
ozone exposure. According to the Agency, the effects of short-term 
exposure on healthy individuals include reduced lung function, chest 
pain, reduced productivity, increased susceptibility to respiratory 
infection, and pulmonary inflammation. 66 Fed. Reg. 57,268, 57,274-75 
(Nov. 14, 2001). With respect to repeated and long-term exposure, the 
finding is ominous:
        EPA has concluded that repeated occurrences of moderate 
        responses, even in otherwise healthy individuals, may be 
        considered to be adverse since they could well set the stage 
        for more serious illness.
Id. at 57,275.
    These general findings by EPA have been underscored by additional 
research conducted in many cities, including Atlanta. One recent study 
published in the prestigious peer-reviewed Journal of the American 
Medical Association on February 21, 2001 demonstrates that when ozone 
was reduced in Atlanta by encouraging alternatives to motor vehicle 
travel during the 1996 Olympic Games, the number of children requiring 
emergency or urgent care for asthma decreased dramatically. There was a 
41.6% decline in visits for Medicaid claimants, a 44.1% decline for HMO 
enrollees and a 19.1% decline in overall hospital asthma admissions. A 
copy of this study is appended to this testimony, which is entitled 
``Impact of Changes in Transportation and Commuting Behaviors During 
the 1996 Summer Olympic Games in Atlanta on Air Quality and Childhood 
Asthma.''
    The study specifically tied the positive public health results to 
the lower ozone concentrations due to a reduction in vehicle emissions. 
Overall, during the Olympics there was a 27.9% decrease in ozone and no 
violations of the ``one-hour'' standard. In contrast, the standard was 
violated on five days immediately before and after the games. While 
favorable weather conditions contributed somewhat to the lower 
pollution levels, this dramatic percentage decrease in ozone pollution 
and emergency care was substantially contributed to by the 22.5% 
decrease in peak morning traffic counts resulting from travel demand 
strategies, increased transit service and other programs encouraged in 
the Act to reduce transportation emissions.
                               conclusion
    ``Bump up'' of Atlanta to ``severe'' is an example of the Act 
working as Congress intended: if a deadline is not met, a new SIP with 
additional controls is required to ensure that a new deadline is met. 
The most recent Supreme Court case addressing the Clean Air Act 
statutory scheme noted that the NAAQS is the ``engine that drives 
nearly all of Title I of the CAA,'' id. at 468, and characterized the 
attainment deadline provisions as the ``backbone'' of the ozone control 
requirements for nonattainment areas. Whitman v. Am. Trucking Ass'ns, 
Inc., 531 U.S. 457 (2001). Codification of EPA's extension policy would 
fundamentally weaken the deadline and incentive structure in the Act 
carefully crafted by Congress in 1990. Instead, it would reward 
officials, at the expense of many citizens-including the four million 
residents of Atlanta, who fail to take all appropriate steps to address 
local ozone pollution. This would set a dangerous precedent that would 
undermine the Act at a time when the scientific consensus is that more, 
rather than less, must be done to protect the public from ozone 
pollution.

    Mr. Barton. Thank you, sir.
    We are going to take a very brief recess so that I can go 
vote, and then we should be able to reconvene at approximately 
12 noon, and maybe a little before that. So, witnesses, you can 
take a personal convenience break, but we don't want any of the 
witnesses to go have lunch or anything, so we are going to try 
to restart this very quickly and get our last two witnesses, to 
get their testimony, and then have some questions.
    So we stand in recess until approximately noon.
    [Brief recess]
    Mr. Barton. The subcommittee will please come to order. 
When we recessed to go to the vote, we had heard from Mr. 
Farren. We now want to hear from Mr. Baron, Staff Attorney with 
Earthjustice, and then after him, Mr. Wolfe, and then we will 
have some questions.
    We recognize the distinguished Congressman from Crockett, 
Texas, the 2nd District, the Honorable Jim Turner. We are 
always glad to have him in our hearing room.
    So, with that, we will now hear from Mr. Baron. Your 
statement is in the record. We ask that you summarize it in 5 
minutes.

                   STATEMENT OF DAVID S. BARON

    Mr. Baron. Thank you, Mr. Chairman, I very much appreciate 
the opportunity to address the subcommittee.
    There has been some talk today about penalizing downwind 
areas, but we also have to think about the penalty suffered by 
people who breathe the air in these communities that violate 
clean air standards, and we are living in one of them right 
here in Washington, DC, where last summer we had the worst 
ozone season in more than a decade, with 9 Code Red days and 19 
Code Orange days, days on which children were cautioned to 
limit outdoor play, and people with asthma and other 
respiratory diseases were warned to limit outdoor activity.
    That is the kind of health threat that bump-ups were 
designed to address when Congress put these in the law in 1990. 
And had EPA followed the law, we would today be enjoying the 
benefits of the additional pollution reductions required for 
the severe area classification which Washington should have had 
more than 2 years ago. Instead of complying with that law and 
giving us the benefit of those pollution reductions, EPA 
applied its transport extension policy to delay, and delay, and 
delay, until today, 13 years after the 1990 Amendments, we 
still do not have a plan adequate to assure attainment of the 
clean air standards here, and the same thing is true in a 
number of these other communities that are seeking relief from 
reclassification. Congress put those bump-up provisions in the 
law because we had tried and failed repeatedly--in 1970 under 
the Clean Air Act. The States had been given a lot of leeway 
under prior versions of the statute, and it didn't work. We 
failed again and again to meet clean air standards, and so 
Congress, in 1990, said ``This time we are going to put some 
teeth in the law,'' and that is why these provisions are there.
    Now, transported pollution simply doesn't justify relaxing 
these requirements for reclassified areas. In the Washington, 
DC area, according to EPA figures, 76 percent of our pollution, 
our ozone problem, is locally generated. In Baton Rouge, 
according to EPA, the figure is 93 percent locally generated. 
Transport certainly is a contributing factor, but we can't 
blame everything on transport when the figures show us that 
local pollution is a significant part of the problem. Nor does 
it make sense to waive reclassification for areas like 
Beaumont, Baton Rouge, Dallas, and Atlanta, when other 
communities that also receive transported pollution, and 
sometimes in greater amounts--communities like New York, 
Chicago, Milwaukee, Philadelphia, Baltimore, Wilmington--all 
are classified as severe and all have adopted the same 
pollution control measures that these Texas communities are now 
trying to escape.
    So, if everyone is on a level playing field, and these 
communities have been able to implement and comply with these 
measures without adverse economic impacts, there is no reason 
why there shouldn't be quality here in terms of communities 
that still don't meet the standard.
    I should note, too, that here in the Washington area, which 
was reclassified to severe after the EPA's transport policy was 
invalidated, we are moving ahead with a severe area plan. We 
don't hear a big public outcry, or even a significant outcry 
from the business community, opposing reclassification. We are 
all working together now to implement the severe area measures, 
and I would hope that that is the direction that all of these 
communities move in, rather than trying to weaken the law and 
rollback the protections that Congress wisely put in the Act 13 
years ago. Thank you, Mr. Chairman.
    [The prepared statement of David S. Baron follows:]
      Prepared Statement of David S. Baron, Attorney, Earthjustice
                        introduction and summary
    Mr. Chairman and members of the Subcommittee, my name is David S. 
Baron. I am an attorney with the Washington, D.C., office of 
Earthjustice, a nonprofit law firm that represents conservation and 
community groups on a wide range of environmental and public health 
issues, including air quality. Our clients on clean air matters include 
the American Lung Association, Sierra Club, Environmental Defense, and 
others. I am very familiar with the Clean Air Act, having specialized 
in enforcement of that statute for more than twenty years at the local, 
state, and national levels. In 1996-97, I served on the Subcommittee 
for Development of Ozone, Particulate Matter and Regional Haze 
Implementation Programs, a Federal Advisory Committee to the U.S. 
Environmental Protection Agency (EPA). I have also taught environmental 
law courses as an adjunct professor at the University of Arizona 
College of Law and Tulane Law School.
    I appreciate your invitation to discuss the Clean Air Act's 
requirements for reclassification (or ``bump up'') of areas that fail 
to timely meet clean air standards, and EPA's prior attempts to waive 
bump up for cities affected somewhat by air pollution transported from 
other areas. I strongly believe that EPA's waiver of bump ups via its 
``downwind extension policy'' not only violated the Clean Air Act, but 
also wrongly delayed measures that are sorely needed to protect public 
health in these and other communities.
Background
    In the late 1990's, EPA announced an ``Attainment Date Extension 
Policy'' (sometimes called the ``downwind extension'' policy) that was 
not authorized by the Clean Air Act. This unfounded policy allowed 
industries to pollute at higher levels for longer than the Clean Air 
Act authorized merely because they were located in cities affected 
somewhat by pollution transported from other areas. EPA applied the 
policy to unlawfully extend clean air deadlines for a number of cities 
without requiring them to be reclassified into more protective 
pollution categories with stronger pollution controls. The courts 
invalidated this policy as being completely contrary to both the 
language and purpose of the Clean Air Act.
    The 1990 Clean Air Act, signed by the first President Bush, 
classified cities as marginal, moderate, serious or severe based on the 
severity of their ozone pollution problem.1 Areas with 
higher classifications were given more time to meet clean air 
standards, but also had to adopt stronger anti-pollution measures. The 
clean air deadline for moderate areas was 1996, for serious areas 1999 
and for severe areas 2005 or 2007.
---------------------------------------------------------------------------
    \1\ Ozone--a principal component of urban smog--is a severe lung 
irritant even to healthy adults. It can cause shortness of breath, 
chest pains, increased risk of infection, aggravation of asthma, and 
significant decreases in lung function. Elevated ozone levels have been 
linked to increased hospital admissions and emergency room visits for 
respiratory causes. Ozone presents a special health risk to small 
children, the elderly, persons with lung ailments, and adults who are 
active outdoors. New studies have linked ozone exposure with death by 
stroke, premature death among people with severe asthma, cardiac birth 
defects, and reduced lung-function growth in children.
---------------------------------------------------------------------------
    Where a city missed its clean air deadline, the Act required that 
it be reclassified (``bumped up'') to the next highest classification. 
For example, if a serious area failed to meet standards by 1999, it was 
to be reclassified to severe. It would then be given until 2005 to meet 
standards, but would also have to adopt the stronger pollution controls 
required for severe areas.
    Reclassification triggers stronger pollution control requirements 
for industry as well as additional measures to reduce pollution from 
car and truck exhaust. These stronger measures are already required in 
numerous communities throughout the nation, including Chicago, 
Milwaukee, Baltimore, Philadelphia, New York, Los Angeles, Wilmington, 
Trenton, Sacramento, Ventura County (CA), Riverside County (CA), and 
San Bernardino County (CA).
    Relying on its unfounded extension policy, EPA extended the clean 
air deadlines for a number of cities without bumping them up to the 
higher pollution categories that would require the adoption of more 
protective ozone control measures to help address the adverse public 
health impacts resulting from the additional delay. EPA also allowed 
these areas to postpone the adoption and implementation of local 
measures that were necessary for each area to attain the ozone health 
standard on the original schedule, thereby postponing a large portion 
of the public health benefits from reduced ozone that these measures 
would have achieved. In addition, EPA waived the statutory requirement 
that each area continue to reduce emissions by 3% annually until the 
area attains the standard. Three separate federal appellate courts have 
all ruled that EPA's policy violates the language and purpose of the 
Clean Air Act.2 In voiding the extension policy as applied 
to the Washington, D.C. area, Chief Judge David Ginsberg of U.S. Court 
of Appeals for the D.C. Circuit, wrote that ``to permit an extension of 
the sort urged by the EPA would subvert the purposes of the Act.'' 
Sierra Club v. EPA, 294 F.3d 155, 161 (D.C. Cir. 2002)(emphasis added).
---------------------------------------------------------------------------
    \2\ See Sierra Club v. EPA, 294 F.3d 155 (D.C. Cir. 2002) (D.C. 
area); Sierra Club v. EPA, 311 F.3d 853 (7th Cir. 2002) (St. Louis 
area); Sierra Club v. EPA, 2002 WL 31761817 (5th Cir.) (Beaumont-Port 
Arthur area). The Eleventh Circuit also recently invalidated EPA's use 
of the policy in Atlanta.
---------------------------------------------------------------------------
       harm to public health from epa's downwind extension policy
    EPA's application of this discredited policy has delayed adoption 
of additional pollution controls that are badly needed to meet clean 
air standards in Atlanta, Washington, D.C., Baton Rouge, and Beaumont 
Texas. The illegal extensions have burdened the public in those areas 
with dirty air until at least 2005 without the additional pollution 
controls already required in other cities. As a result of EPA's illegal 
deadline extensions, the air in these cities is substantially dirtier 
than it should be.
    If the Clean Air Act were weakened in an attempt to legalize EPA's 
extension policy, this would delay the adoption of badly needed 
antipollution measures in the affected communities. Last summer, the 
Washington, DC area, for example, suffered from the worst ozone 
pollution in more than a decade, exceeding the 1-hour standard on nine 
days, and recording another 19 days when the air was deemed unhealthful 
for children and persons with lung ailments. On all of these days, 
children were warned to limit outdoor play. By some estimates, 
breathing difficulties during a typical smoggy summer in the DC area 
send 2,400 people to the hospital, and cause 130,000 asthma attacks
    Last year alone, the Beaumont/Port Arthur, Dallas/Fort Worth, and 
Houston/Galveston regions exceeded the one-hour ozone standard on 
three, seven, and 26 days respectively. Atlanta exceeded the one-hour 
ozone standard seven times and the 8-hour ozone standard 38 times. 
Ultimately, delay of stronger pollution controls has left the air in 
these cities more unhealthful than it would have been had the law been 
followed.
    Adoption of the EPA policy would also make it harder for other 
communities to meet clean air standards. Pollution from cities like 
Washington, Atlanta, Beaumont, and Baton Rouge can be transported 
elsewhere, where it contributes to ozone violations. Cities like 
Baltimore, Philadelphia, and New York that have already adopted more 
protective ``severe'' area measures should not have to suffer pollution 
from upwind cities that have failed to adopt the same level of control.
epa's downwind extension policy is unfair to states that did the right 
                                 thing
    As noted above, many states and cities have already adopted the 
more protective control measures associated with higher pollution 
classifications.. These areas are also affected by transported 
pollution, a situation understood by Congress at the time that the 1990 
amendments placed them in these higher classifications. Adoption of 
EPA's policy, accordingly, would have an inequitable impact on areas 
that area already doing the right thing without resorting to delays 
that imperil the health of their citizens.
    EPA's extension policy has been opposed by Republicans as well as 
Democrats. In 1999, the State of New York under a Republican 
administration, criticized EPA's extension policy. The State noted the 
inequity of allowing some states to avoid achieving timely clean air 
while other states--also affected by transported pollution like New 
York--were already undertaking necessary, effective control steps:
        ``[T]hese more effective control steps [required for higher 
        nonattainment classifications] already have been implemented in 
        many areas of the country and have been proven to reduce the 
        emissions of ozone precursors. Implementation of these measures 
        would help level the playing field among the states, provide 
        some localized relief of ozone levels, and help the affected 
        areas in their efforts to achieve the revised eight-hour ozone 
        standard.'' 3
---------------------------------------------------------------------------
    \3\ Letter from Carl Johnson, Deputy Commissioner, Office of Air & 
Waste Management, New York State DEC (April 16, 1999).
---------------------------------------------------------------------------
    In 1999, the State of Ohio, also under a Republican administration, 
criticized this same attainment date extension policy and approach:
        ``U.S. EPA is rewriting one of the most important and 
        substantive measures placed in the 1990 CAA. . . .''
        ``Ohio EPA does not believe that the CAA intended that 
        extensions be granted to areas which have not demonstrated 
        attainment. In some cases, these areas have not implemented 
        current CAA requirements and would not achieve the 1-hour ozone 
        standard even after transport had been addressed. These areas 
        need an additional level of local controls, which is the 
        precise purpose of the bump-up provisions of the CAA.'' 
        4
---------------------------------------------------------------------------
    \4\ Letter from Christopher Jones, Director, Ohio EPA, to EPA Air & 
Radiation Docket (April 27, 1999).
---------------------------------------------------------------------------
Thus, a roll back of pollution control requirements under a policy will 
harm the public health of citizens locally and regionally by delaying 
more rigorous ozone pollution abatement measures needed to meet clean 
air standards.
    In its unsuccessful defense of its extension policy, EPA claimed 
that deadline extensions and bump-up waivers for some areas are 
justified because those areas are impacted somewhat by pollution 
transported from other areas (generally within the same state). But 
other cities with higher classifications--and therefore stronger local 
pollution control requirements--are also impacted by transported 
pollution--in some cases to a much greater extent. For example, 
transported emissions account for a smaller percentage (24%) of the 
ozone problem in the Washington D.C. area than in areas that were 
previously classified as severe, such as Baltimore (56%), Philadelphia 
(32%), or New York (45%). Conversely, EPA's data for Atlanta shows that 
implementation of the NOX SIP call controls would eliminate 
only 9% of the days with expected ozone violations. For Baton Rogue, 
EPA has found that only 7% of ozone exceedance days between 1996 and 
2000 were potentially associated with transported pollution from 
Houston.
    This situation was also true when Congress adopted the 1990 
amendments and established the classification system with its 
consequences for failure to attain air quality standards. Indeed, 
Congress was aware of EPA's assessment of the ozone transport problem 
in its post-1987 attainment date analysis of the reasons why ozone 
areas failed to attain, and adopted into law EPA's decision ``not to 
allow a delay in the submittal of the post-1987 ozone attainment 
demonstrations and revised SIPs for areas affected by [regional 
transport].'' 52 Fed. Reg. 45,874.
 current circumstances make epa's extension policy even less defensible
    EPA's policy was ill-advised when it was adopted in 1999, for many 
of the same reasons given by Ohio and New York above. But whether or 
not the policy was a good idea then, circumstances have changed in such 
a way that its codification now would be a terrible idea. Technical 
advances reflected in EPA's new MOBILE VI emissions estimation model 
are showing that many areas have much larger local emissions problems 
than were previously thought, and greater local emission reductions 
will therefore be needed. Moreover, with the upcoming implementation of 
EPA's more protective 8-hour ozone standard, the areas affected by 
EPA's policy, and many other areas as well, will need to implement the 
suite of protective control measures required in the 1990 Clean Air Act 
Amendments, in addition to reductions in transported pollution. Many of 
the areas for which EPA has sought to avoid the stronger pollution 
control measures associated with reclassification are already exceeding 
the 8-hour ozone standard repeatedly each year. It is insupportable to 
delay local control measures needed to reduce these annual exceedances, 
thereby exacerbating local air quality and public health problems, and 
forestalling the meaningful steps that will be necessary to attain the 
1-hour and 8-hour ozone standards.

    Mr. Barton. Thank you, Mr. Baron.
    We now want to hear from Mr. Samuel Wolfe, who is an 
Assistant Commissioner for Environmental Regulation, from the 
New Jersey Department of Environmental Protection. Your 
statement is in the record, and we ask that you summarize in 5 
minutes, sir.

                  STATEMENT OF SAMUEL A. WOLFE

    Mr. Wolfe. Thank you, Mr. Chairman, and members of the 
subcommittee, as well. I appreciate the opportunity to testify 
today.
    Even though New Jersey is very strongly affected by ozone 
transport, we unfortunately are unable to support changing the 
Clean Air Act to incorporate the EPA's bump-up policy. The 
policy rewards failure to attain air quality standards. It 
rewards it by extending deadlines for compliance, without 
requiring any additional action by States in return. In doing 
so, it passes up some of the most cost-effect air quality 
benefits that we can find.
    Now, the first thing I would ask the subcommittee to 
consider is that the effect of transport on the ability of an 
area to attain the air quality standards is just one piece of 
the puzzle. It is also relevant to ask what can be done with 
local air pollution measures in that area to address local air 
quality problems. What can be accomplished, even if it is short 
of attaining the standards, is to reduce the impact of air 
pollution on people who live and work in that area. Even when 
it is not enough for attainment, it can still make those bad 
air days less frequent and less severe, which means fewer 
children developing asthma as a result of ozone, fewer hospital 
admissions for people with respiratory problems.
    Aside from the local benefits of taking the measures that 
are required when an area is bumped up, it is also relevant to 
ask what those local actions can do for places that are 
downwind of the area. New Jersey is a perfect example of this 
because not only are we very strongly affected by transport, 
with more than a third of our air pollution coming from outside 
the state, but in turn we then affect States that are downwind 
of us. So, for that reason, we filed Section 126 petitions 
trying to get emission reductions from facilities upwind of us, 
at the same time States downwind of us have filed 126 petitions 
looking for emission reductions to happen in facilities in New 
Jersey.
    So, considering how those local reductions can affect both 
air quality within the area that is affected by transport, and 
also air quality downwind of that area, we don't feel that it 
is an option for a State to do nothing while waiting for a 
Federal solution that is going to take care of transport.
    Getting these air quality benefits is especially important 
because the measures that are required under Title I of the 
Clean Air Act are neither costly nor onerous. And New Jersey 
should know because since the beginning we have been classified 
almost entirely as severe nonattainment areas. That means that 
every one of the measures that people have expressed concern 
about having to implement, has already been implemented in New 
Jersey. We have done this, and what I can say now, based on 
that experience, is that those measures that are required for 
the severe areas are basically the low-hanging fruit. We are 
talking about things like reasonably available control 
technology from major sources of all organic compounds and 
nitrogen oxides. This is a standard that very strongly tilts 
toward the economic feasibility of doing better on air 
pollution control.
    With that in mind, I just have not seen the complaints from 
our business and industrial communities about having to 
implement measures that are required under Title I for severe 
areas. Ideally, it would be nice if there were a more level 
playing field, but these do not seem to be the kinds of 
measures that have made New Jersey uncompetitive.
    So, to sum up, I am concerned that incorporating the bump-
up policy into the Clean Air Act would risk repeating the 
experience that got us to the Clean Air Act Amendments in 1990, 
when a complete loss of patience over the failure of States to 
make progress on achieving air quality standards led Congress 
to set strict deadlines for reaching those standards.
    I would also have to say that going forward into the 
future, there is a risk that we could repeat history again with 
the 8-hour ozone standard where, if transport is not addressed 
up front, we will probably be back here doing the same dance 
again, and for that reason I truly appreciate the interest and 
the concern of the subcommittee on understanding ozone 
transport and what it does to areas downwind. Thank you very 
much.
    [The prepared statement of Samuel A. Wolfe follows:]
   Prepared Statement of Samuel A. Wolfe, Assistant Commissioner for 
    Environmental Regulation New Jersey Department of Environmental 
                               Protection
    Good morning, Mr. Chairman and members of the Subcommittee. My name 
is Samuel Wolfe. I am Assistant Commissioner for Environmental 
Regulation for the New Jersey Department of Environmental Protection. 
Thank you for the opportunity to testify before you today regarding the 
Environmental Protection Agency's bump-up policy under Title I of the 
Clean Air Act.
    Even though the EPA created the bump-up policy in an effort to help 
areas affected by ozone transport, New Jersey cannot support revising 
the Clean Air Act to accommodate the EPA policy. The policy does 
nothing to address transport. It simply rewards an area's failure to 
attain air quality standards by extending deadlines beyond the two 
years that the law allowed without requiring any additional action to 
address air pollution.
    The 1990 Clean Air Act Amendments created five classes of ozone 
nonattainment areas to reflect the severity of each area's ozone 
problem, ranging from marginal to extreme. The classification system 
followed the principle that a more severe problem would require more 
work and more time to correct. For that reason, the law requires areas 
with more severe problems to take more actions to reduce air pollution, 
and allows those areas more time to attain the federal air quality 
standard.
    Under the law, areas that fail to attain the standard by the 
statutory deadline could get the deadline extended for up to two years. 
If they still failed after that extension, they would be ``bumped up'' 
to a higher classification, giving them more time but also requiring 
that they do more to control air pollution.
    The EPA's 1998 ``bump-up'' policy extended the attainment deadlines 
for moderate or serious nonattainment areas when pollution transported 
from outside the area interfered with its ability to demonstrate 
attainment by the deadline. More than many states, New Jersey 
appreciates the need to address transport. Over a third of the air 
pollution in our State is transported from outside our borders. 
However, we cannot support codifying into law a policy that simply 
provides extensions and does nothing to address transport.
    Granting these cost-free extensions would be easier to justify if a 
bump-up forced an area to impose costly or onerous requirements to 
control air pollution. This is not the case. From the beginning, the 
EPA classified most of New Jersey as severe nonattainment areas. As a 
result, New Jersey has had to implement almost all of the ozone 
pollution control measures required under Title I of the Clean Air Act. 
We required our major sources of ozone precursors to install reasonably 
available control technology. We required vapor recovery at gas 
stations. We run an enhanced program for motor vehicle inspection and 
maintenance, which is much easier to create now than it was when we 
started.
    The truth is that these types of Title I measures are now the ``low 
hanging fruit'' of emission reductions. Areas that fail to meet their 
attainment deadlines can put these measures in place without difficulty 
or great expense.
    It would also be easier to justify these extensions if the areas 
that received them were merely passive victims of transport from 
upwind. Unfortunately, many of these areas themselves contribute to 
poor air quality downwind. Extending attainment deadlines, without 
requiring additional action, means that these areas affected by 
transport will continue to receive unabated air pollution from outside 
their borders. This air pollution will harm the health of the area's 
own residents, as well as the health of people who live and work 
downwind.
    New Jersey itself provides a good example of the problem. Again, 
more than a third of our air pollution comes from outside our borders. 
At the same time, air pollution from inside New Jersey affects other 
states downwind. For that reason, we have filed a petition with the EPA 
to restrict emissions from facilities upwind of us, while states 
downwind of us have filed similar petitions targeting facilities in New 
Jersey. We participated in the research that made it clear that ozone 
transport is a significant issue in the United States, especially in 
the eastern half of the country. We have also worked actively with 
other Northeastern and Mid-Atlantic States and with the EPA to develop 
regulatory programs and legal actions that would address transport.
    At the same time, it was never an option to do nothing while we 
wait for the transport problem to be solved. For that reason, we 
continued to pursue sources of air pollution that affected our own 
residents as well as people downwind. Among other things, we reached an 
agreement with the operator of the three largest coal-fired electric 
generating units in the state, which will bring advanced air pollution 
controls to those units.
    Giving a free pass to areas affected by transport does not solve 
the problem of transport. What will solve the problem of transport is a 
strong national effort to reduce the formation of ozone air pollution 
throughout the country, complemented by continuing state and local 
efforts to find and implement cost-effective ways to reduce air 
pollution within our borders.
    We therefore ask that the existing bump-up provisions of the Clean 
Air Act be left in place.
    Thank you for this opportunity to testify. I am happy to answer any 
questions you may have.

    Mr. Barton. Thank you, Mr. Wolfe.
    Before we go to the question period, the Chair would ask 
unanimous consent that the documents that have been referred to 
by various members during opening statements and in their 
question period, as agreed to by the minority and majority 
staff, that those documents and letters be put into the record. 
Is there objection to that?
    [No response.]
    Hearing none, so ordered.
    The Chair would recognize himself for the first 5 minutes 
of questions.
    Judge Griffith, you had some charts that showed how your 
area has been becoming more compliant. Even as the population 
has grown, the number of ozone nonattainment days has gone 
down. We put that up on the board for the audience to look at. 
Do you care to elaborate on that a little bit?
    Mr. Griffith. Mr. Chairman, there has been much discussion 
about people sitting back waiting, and that is not the case in 
the Beaumont-Port Arthur-Orange-Hardin County areas. If you 
look at the chart here, we have been very aggressive in our 
implementation of our SIP, with the help of the TCQ and 
actually Commissioner Marquez' 1997 legislation that attempted 
to bring into compliance the grandfathered facilities in 1999, 
the actual 2001 legislation that mandates grandfathered 
facilities to come into compliance by 2007. Again, trying to 
make us by 2005 is impossible with the transport issue. And I 
think the specificity that everyone is picking up communities 
is really not the issue, it is more about the issue of 
transport and should it be allowed into the determination 
because each one of those areas has to stand on its own in 
whether it can demonstrate. And we have a great demonstration 
progress of Congress' 1990 Clear Air Act as to what you can do 
when you implement those strategies.
    Mr. Barton. For those of you on the panel that support 
giving EPA statutory authority to show flexibility in the 
compliance date, are any of you advocating that we relax the 
actual standard you need to meet?
    Mr. Griffith. No, sir, absolutely not.
    Mr. Barton. I am not aware of any group or any congressman 
who is saying we ought to relax the standard themselves. What 
we are saying is if you show that you are making a good-faith 
effort to make progress, and you actually are making progress, 
you shouldn't be penalized by being bumped up to a more severe 
standard simply because of a transport issue, isn't that 
correct?
    Mr. Griffith. That is what this is about.
    Mr. Barton. Now, Mr. Marquez, you testified before my 
subcommittee before, and obviously you didn't come prepared to 
do anything but to extrapolate and to explain your testimony 
today, but Congressman Waxman, who unfortunately is not here at 
this moment, he asked to put some documents into the record 
about some emissions in the Port Arthur-Beaumont area relating 
to petrochemical and refineries, where they have declared some 
sort of emergency and emitted emissions outside of their 
permit, which they are allowed to do if it is really an 
emergency. And these documents purport to show that, in fact, 
some of these companies are not doing it on an emergency basis, 
they apparently are using it as a part of a routine way to get 
around the Clean Air Act.
    Now, we put the summary table and the letter into the 
record, but we would like for you, as a commissioner from the 
Texas Air Quality Control Board and perhaps even the County 
Judges from this affected area, to look at the material that we 
put in the record and, if you so choose, to give us your 
response to that material. You haven't seen it yet, but would 
you be willing to do that if we get that to you?
    Mr. Marquez. Mr. Chairman, I believe that I have not seen 
the data. I have heard the allegations about episodic releases 
from industry. That is an issue that we have addressed. As a 
matter of fact, we have been addressing that very firmly in the 
last 4 years, particularly in the Houston area where it is a 
significant problem.
    We have, again, new science has been evolving, we have 
learned more. We have seen in the Houston area where some of 
those emissions were creating problems, and we have addressed 
that. We have several new rules that have been issued to 
address that. We have in the Houston-Galveston area, for 
example, air monitors now that are continuously monitoring the 
concentration of these reactive volatile organic compounds in 
the atmosphere, that help us monitor the activities of 
companies when they have releases.
    So, in the Corpus Christi area, as an example, the number 
of releases of that type have been reduced by 55 percent in the 
last 3 years. I do not have numbers for Beaumont-Port Arthur.
    Mr. Barton. My time is about to expire, but you would be 
willing to look at the materials, and I am not saying you have 
to provide a response, but we want to give you an opportunity 
to.
    Mr. Marquez. I will be glad to.
    Mr. Barton. My time is really almost out. I want to ask Mr. 
Baron a question. It is my understanding that you were the 
litigant, or one of the litigants in these lawsuits that 
overturned the Clinton Administration policy of flexibility, is 
that correct?
    Mr. Baron. Yes.
    Mr. Barton. Were you the only one, or just one of many in 
these lawsuits?
    Mr. Baron. There were others. Mr. Farren had one of these 
cases, and there was another one in St. Louis.
    Mr. Barton. So you didn't instigate all three of them, you 
were in just one of them.
    Mr. Baron. No, just the Washington, DC area.
    Mr. Barton. I understand. Do you think that you are better 
able--and maybe Mr. Farren, too, if he is one of the 
litigants--do you all have more knowledge than the EPA? I mean, 
do you think that it is better for you to make a decision which 
areas are in compliance and noncompliance and how they should 
go about addressing the problem, than the Executive Agency that 
is given the authority under the law?
    Mr. Baron. Well, Your Honor----
    Mr. Barton. I am not a judge.
    Mr. Baron. I am so used to being in court, that is my usual 
way of responding to----
    Mr. Barton. Luckily, I have never been in court, and I hope 
I never am.
    Mr. Baron. Well, I am sorry. The answer to that question is 
I think the law should be followed, and the law requires----
    Mr. Barton. But the reality is that you look around the 
country and you pick a region that for whatever reason you 
think isn't doing what it is supposed to do, or maybe makes a 
good test case, and you go into that particular court in that 
particular region and sue, instead of giving the EPA the 
authority under the Clinton Administration, to show a little 
flexibility when the region is making a good-faith effort. So, 
basically, you put yourself above the law. You actually want to 
dictate who has to do what, when, it seems to me. You didn't 
file suit up in Portland, Maine.
    Mr. Baron. Well, that actually is not true, Mr. Barton, we 
did file suit there, and we are currently in settlement 
negotiations.
    Mr. Barton. Well, my understanding is there have been no 
lawsuits filed, that there have been some negotiations. Well, I 
stand corrected, you did file a lawsuit, or a group similar to 
yours, or an individual----
    Mr. Baron. We are representing the Sierra Club in that 
case, Mr. Chairman, but the answer to your earlier question is, 
I don't see how it can be said that we are operating above the 
law when four U.S. Courts of Appeal have agreed with us that 
EPA was acting----
    Mr. Barton. There are a lot of regions in this country that 
are not in compliance, and it really does appear to me that 
you, to coin a phrase, kind of ``cherry-pick'' where you want 
to file your lawsuits. Now, if you want to file a joint class 
action suit for every region, that is one thing, but to kind of 
play one region against the other when there really are some 
legitimate transport issues, if you are not above the law, you 
are very selectively trying to enforce the law. I will stand by 
that.
    Mr. Baron. Mr. Chairman, these cases--and I think Mr. 
Farren can speak for Atlanta--were all filed in communities 
that have serious air pollution problems that threaten the 
health of people in those communities, and that is why we 
filed.
    Mr. Barton. In your opinion.
    Mr. Baron. No, under the Clean Air Act, these communities 
violate
    Mr. Barton. None of these regions were doing anything to 
come into compliance, they were all sitting on their hands and 
thumbing their nose at the Clean Air Act.
    Mr. Baron. Mr. Chairman, they were not doing what the law 
requires.
    Mr. Barton. They were not doing what you thought the law 
required.
    Mr. Baron. Mr. Chairman, with all due respect, they were 
not doing what the law required and the U.S. Courts of Appeal 
for four Circuits agreed with us on that point.
    Mr. Barton. Well, the Courts have agreed that the Act, as 
it is currently constituted, doesn't give EPA the flexibility 
that the Clinton Administration had granted. That is the 
purpose of this hearing, to see if, in fact, it makes good 
public policy not to change the standards, but to actually give 
such flexibility. I mean, that is our job. As much as it may 
pain some people, we can legislate. The Constitution gives us 
the authority, if we so choose. Now, I don't know if we so 
choose, and I don't know where the majority is in terms of this 
subcommittee or full committee, but we certainly have the 
ability to legislate if we think there is a public policy need 
to.
    Mr. Baron. Well, Mr. Chairman, I certainly don't doubt 
that, that is a different question, though, than the one you 
were asking before. And the committee is certainly free to, and 
within its power to consider alternatives. If the question is, 
is this a good policy, I think we have already addressed that.
    Mr. Barton. You certainly have. My time is expired. I am 
going to recognize Mr. Boucher for questions.
    Mr. Boucher. Thank you very much, Mr. Chairman. I notice 
that your time did expire by a little bit, you were actually 5 
minutes over the----
    Mr. Barton. I usually don't do that. It is the first time 
all year.
    Mr. Boucher. I would just ask the chairman to consider at 
some point allowing me to bank away 5 minutes and use it at the 
time of my choosing somewhere along the line.
    Mr. Barton. I don't do that with Mr. Markey.
    Mr. Boucher. Thank you very much. I want to say thank you 
to these witnesses, for your patience here this morning, and 
for coming here and providing advice to this subcommittee on 
what I think is a very timely subject.
    After listening to what you have had to say, and listening 
to Mr. Holmstead earlier, my view is that a narrowly tailored 
policy that permits extensions when downwind communities, 
through no fault of their own, who are acting in good faith, 
experience pollution brought in from upwind communities, that 
because of the upwind communities' pollution places them out of 
compliance. It seems to me that a narrowly tailored policy that 
permits an extension of compliance deadlines in those cases 
would be sensible.
    I think it would be important that the policy be truly 
narrowly tailored--in other words, the test has got to be met, 
in my view, that the sole cause of the problem is the upwind 
community. If the downwind community is at fault and is not on 
its own in compliance, and has not taken the steps that would 
be required to put it in compliance were it not for the upwind 
problem, then the downwind community would not qualify. And if 
we are to grant extensions, they ought to be for a very limited 
period of time, and the time ought to be measured by how long 
it takes to bring the upwind community into compliance--to 
eliminate, in other words, the source of the problem that the 
extension addresses. But if it does those things, the policy 
would appear to me to make sense.
    Let me just ask those who are here today from the affected 
communities who are urging that we act in order to renew this 
opportunity for extensions, if they would agree to that 
formulation? If we drafted that tightly and make sure that the 
downwind community is, in fact, operating completely in good 
faith, would you endorse our acting on such a policy?
    Mr. Simpson. Yes, sir. From Baton Rouge's point, probably 
the last one to go through the transport policy, particularly 
in EPA's mandates to us, we had to submit approval attainment 
demonstration with the 1-hour standards no later than the 
attainment date of the upwind nonattainment area. So with ours 
coming from Houston, which was very evident, we had one 
exceedance in 2002, and the testimony earlier from Texas showed 
exactly the transport on September 11, 2002, which is the exact 
date that we had the one exceedance that kept us from being in 
attainment. So, yes, we would definitely agree. No one is 
trying to get out of reaching the attainment, but there are 
some things that are beyond our control.
    Mr. Boucher. Thank you. Mr. Griffith?
    Mr. Griffith. There's no need to repeat what you just said. 
We absolutely agree completely with your statement. We are not 
asking to in any way try to create more problems for air 
quality, we are trying to go no longer than what Houston's 
attainment date is, and that is 2007. That is the bottom line.
    Mr. Boucher. Thank you. Mr. Thibodeaux?
    Mr. Thibodeaux. Yes, I certainly support what you just 
said, and certainly support what my two colleagues have just 
brought up. I think that is going to be the rational, practical 
way to go.
    Mr. Boucher. Mr. Marquez, do you agree?
    Mr. Marquez. Mr. Boucher, as the State agency that has to 
submit the plans to EPA, representing the local areas, we need 
to be moving forward trying to pull a rabbit out of the hat. We 
cannot have the luxury of waiting 2 years to see what happens 
with the policy. So, we are marching on, trying to figure out 
how can we meet the dates as they are required today.
    Mr. Boucher. I'll take that as a yes. Thank you. My time is 
about expired. Let me simply say that I think these witnesses 
have been very forthcoming today, and we appreciate your coming 
here to share with us your views on this subject, and your 
appearance here is very meaningful, and I think you can 
consider your time well spent. So I want to thank you for being 
here and sharing this with us today.
    Mr. Chairman, let me also say that I was just kidding about 
that other 5 minutes. You have always been very generous in 
allowing members of this subcommittee to express their views, 
and you normally stay within your time allotted.
    Mr. Barton. I do.
    Mr. Boucher. You are quite punctual as a general matter. 
Today is a very rare example of----
    Mr. Barton. My feelings are hurt, they are very hurt, I am 
going to pout.
    Mr. Boucher. [continuing] your actually going beyond, but 
you are very cooperative in allowing members to express their 
views, and I thank you.
    Mr. Barton. The only reason I went over a little bit is 
because we don't have a large attendance, and I didn't see the 
harm in that.
    Mr. Methier, did you want to comment on Mr. Boucher's 
comment, because it looked like you wanted to say something.
    Mr. Methier. Just briefly. Well, just absolutely we agree, 
and in our testimony you will note we have actually drafted 
some proposed language and we would love to work with you on 
that. The one thing I would urge, though, is that any action 
you take be prompt. There are things that are happening now and 
will be required, as an example, with fuel and being bumped up, 
that if this body chooses to move on that, we would like it to 
happen as soon as possible.
    Mr. Boucher. Mr. Chairman, if you would oblige me for just 
a moment----
    Mr. Barton. I don't know.
    Mr. Boucher. [continuing] I don't want to draw this out, 
but what is the sense of urgency here? Just how quickly do we 
have to act in order to grant the relief which you believe you 
need?
    Mr. Methier. I would just follow up that in Atlanta's 
particular case--and we are still working that with EPA on 
exactly when the bump-up action would happen and when it would 
be effective--but when that happens, 1 year after that, Federal 
reformulated gasoline will be required. So we are going to have 
to start working pretty soon with the fuel suppliers. They are 
going to have to figure out what problems that will cause with 
the disconnect with our present Georgia gasoline. It is not the 
kind of thing--a year from now, it could actually be too late. 
Things will happen. We may have to change some of our rules. 
And so the sooner we can move forward on that, the better. That 
is sort of the timing in our particular region.
    Mr. Simpson. In Baton Rouge's case, we have been bumped up. 
The reformulated gas is going in place in June of 2004, and the 
sanctions, the penalties, go in in 2005. So there is a great 
sense of urgency in our region.
    Mr. Boucher. Thank you. Thank you, Mr. Chairman.
    Mr. Barton. The gentleman from Illinois is recognized for 5 
minutes.
    Mr. Shimkus. Thank you, Mr. Chairman, and I, too, want to 
thank the folks here on the panel because it is just an 
interesting debate because we do have the benefit of cleaner 
air. There was legislation drafted with the science at that 
time, and so really the debate is now, with more technology, 
new science, and a recorded history, where do we go? We have 
this debate every year in Congress, about is the status quo 
acceptable, or do we make modifications and change. I mean, we 
would all like to think it is for the better.
    Unfortunately, there are different opinions of what is good 
and what is the best course of action. Beaumont has gone from 
20 exceedances per year to just two exceedances. I would think 
that that is fairly a good success story of the Clean Air Act, 
and that there is positive movement in the right direction. So 
then the debate goes as to at what cost and how do you 
encourage positive movement into the future. We are having this 
debate with Medicaid, Medicare, education, and just because 
there are questions as to the current status quo of the 
legislation doesn't mean that the intent is to just destroy the 
status quo, but hopefully to reform and make it better.
    I have got a few questions--I want to go on the same line 
of questioning for Mr. Methieris that French? Let me ask you 
this series. Baton Rouge indicates that it would be a marginal 
nonattainment area if it was classified today. You indicated 
Atlanta would be moderate, yet both could soon be severe areas. 
Do you think this is the result that Congress intended in 1990?
    Mr. Methier. Well, no. I mean, obviously, Congress intended 
us to attain by the dates and make the progress. The fact of 
being in a situation like we are today, being moderate or 
marginal and then having to do the severe requirements, I can't 
envision that is what people thought was going to be a good 
thing. So, no, I don't think so. I think things have changed.
    Mr. Shimkus. Is it fair to say that the Subpart 2 
requirements were based on our understanding of ozone formation 
in the years before 1990, and that this understanding has 
changed since that time?
    Mr. Methier. I know that as a State Air Director, the 
science, the data, the tools, everything we have known about 
ozone from 10 years ago is dramatically improved and different.
    Mr. Shimkus. So going back to my little statement before, 
why would anyone oppose changing the rules and regulations to 
meet new science?
    Mr. Methier. The perception that we have in the metro area 
is that things are bad, they are getting worse and, in fact, 
the air quality by every measure is improving. The labels that 
we put on them--serious, severe, marginal--are confusing, and 
we do need to rethink that.
    Mr. Shimkus. I think you make a good point. We have 
addressed it here a couple of times, and will continue to do, 
especially as we go through this whole air debate. Air quality 
is improving, and has been for many, many years--not to say 
that it is perfect, but we want to improve.
    The last part of the series of questions deals with your 
testimony which indicates that Section 185 could penalize 
businesses for emissions of volatile organics. Can you give us 
some idea what type of businesses you are talking about?
    Mr. Methier. In the Atlanta area, that would be a lot of 
printers, painting, industrial manufacturing operations, the 
kinds of things that we really have regulated down to the 25 
ton level for many years in metro Atlanta. But what we found is 
those VOCs don't have as much of an impact on ozone as we, and 
EPA, and everybody else thought back in 1990. So to penalize 
those sources in this Section 185 manner really doesn't make a 
lot of scientific sense.
    Mr. Shimkus. And I appreciate those comments again. I want 
to thank all of you for being here and sitting through the one 
short vote, usually it is worse than that. Mr. Chairman, I 
appreciate the hearing, I think we are moving in the right 
direction. I yield back my time.
    Mr. Barton. I have a pending vote in the Science Committee, 
if you would take the Chair. And we want to recognize the 
gentlelady from California, Ms. Capps, for 5 minutes.
    Ms. Capps. Thank you, Mr. Chairman. I would like to ask you 
a question, Mr. Baron, if I may, and thank all the witnesses 
from all parts of the country, for taking the time and being 
here to share your expertise with us.
    Mr. Baron, why should areas like Atlanta, Washington, and 
Dallas, which have significant nonattainment of the 8-hour 
ozone standard, escape more vigorous requirements for the 1-
hour standard that would reduce the extent of their 8-hour 
problem at the same time? I wish you would comment, if you 
would briefly, on perhaps this is why Washington area officials 
are moving forward to identify additional emission reductions 
for a revised SIP.
    Mr. Baron. Ms. Capps, the answer to that question is they 
should. There is no reason that they should not. Virtually any 
controls that are implemented to reduce 1-hour violations will 
be beneficial in addressing 8-hour violations, and we know we 
have a serious problem. So that is a very strong reason to 
stick with the original bump-up policy.
    Ms. Capps. And this would be satisfactory to those--I mean, 
this is what Washington officials wish we would do, at least 
some of them.
    Mr. Baron. I believe there was a letter offered earlier----
    Ms. Capps. Yes, I wanted to reference that.
    Mr. Baron. [continuing] to that effect. I have not heard 
any local officials in the Washington area objecting to 
implementing the severe area requirements here.
    Ms. Capps. Okay. And then, Mr. Farren, if you would, I 
understand that Atlanta has a long history of failed compliance 
with the Clean Air Act, and just 9 percent contribution from 
transported pollutants.
    Given the modest impact of transport, do you think EPA 
could come up with, or should come up with, a better transport 
policy that does not reward bad behavior, and could you comment 
on that?
    Mr. Farren. Yes. Thank you, Representative Capps. Atlanta 
does have a very long history of failure to meet the ozone 
standards, going back 30 years, and that results from really 
delay after delay in putting in place and implementing plans to 
address local controls which are really very much the lion's 
share of the problem. And I think the fact that you have only 9 
percent of the exceedance days in Atlanta coming from transport 
shows the flaw with this EPA policy. Even though it was only 9 
percent, Atlanta was found to be ``significantly affected,'' 
and you basically throw the baby out with the bathwater, and 
you don't implement the reasonable, achievable local controls 
that could be employed to bring clean air sooner.
    There was some talk earlier about things are getting better 
in Atlanta. When I testified earlier, I made the point that 
really it is an up-and-down. The last couple of years it has 
been a little better, but if you look at the 20-year history, 
it is up and down. And as recently as 1999, which was the 
deadline year, there were over 20 violations of the 1-hour 
standard and over 60 violations of the 8-hour standard. Last 
year, the year they are trumpeting as such a great year in 
Atlanta, there were over 30 violations of the 8-hour standard.
    So, clearly, more needs to be done. This is a flawed 
policy, especially as applied to Atlanta.
    Ms. Capps. And perhaps in either direction of how this 
should be strengthened and, also, I cited Atlanta, but it 
certainly is not the only area. Maybe others of you on the 
panel would like to comment on this particular issue of the 
relationship between transport policy and the whole overlying 
legislation.
    Mr. Farren. Representative Capps, I think we need to 
address transport, but we need to do it in a way where we 
encourage maximum employment of local controls to achieve the 
standards just as expeditiously as practicable. That is what 
the Clean Air Act requires. That is the intended structure of 
the Clean Air Act going back to 1990. Transport was known, but 
Congress put in place this structure to maximize controls, 
particularly local controls, in cities like Atlanta where 
transport is only 9 percent of the problem.
    Ms. Capps. Any other comments? I have very little time 
left. Yes, sir?
    Mr. Alvarez. I would just like to say, in the case of 
Dallas, unlike the Beaumont area where the data showed some 
progress in air quality, the data presented in my testimony 
shows very little progress in that area by at least two 
different measures of air quality. And I think it is important 
to consider the reasons that the bump-up policy was put in 
place was to kind of have some accountability for clean air 
plans that are developed. If the clean air plan doesn't succeed 
in cleaning up the air by the deadline, then new requirements 
are put in place, both planning requirements and additional 
measures, and arbitrarily extending attainment dates loses that 
kind of iterative process to improve on air quality plans and 
will just delay the ultimate attainment of clean air.
    Mr. Shimkus [presiding]. The gentlelady's time has expired. 
The Chair recognizes the gentleman from Maine.
    Mr. Allen. Thank you, Mr. Chairman. Mr. Methier, I wanted 
to direct some questions to you. We have sympathy for all you 
are going through because in Maine we have been through 
reformulated gas, we have had all of these issues, and that is 
a long story. But those of us in the northeast are waiting for 
the NOX SIP Call to go into effect are frustrated 
that we might be punished, too, for delays beyond our control. 
So I understand your point very well.
    You made it quite clear that the Act should not punish 
areas with strong SIPs that would be in compliance but for 
transport coming from outside, and you made a strong case that 
Atlanta has done everything that it could. But to the west, 
Texas doesn't have a plan, not a plan combined with Louisiana, 
and I would point out that the NOX SIP Call was 
created because of the threat of bump-up. The threat of bump-up 
drove the NOX SIP Call to be created. And so here is 
the question.
    If the NOX SIP Call were going into effect right 
away so that Atlanta would be in compliance in short order, 
would you still be hear, at least for your city, making this 
claim, making this same argument?
    Mr. Methier. In 1999, when our attainment date came, that 
is when we adopted a lot of the local measures. We had gone 
through all the science and the modeling, and the 
NOX SIP Call was coming in 2003. That is why 2003 is 
the year we have all of our power plant controls, gasoline, 
vehicle emission inspection, everything else. It is only 
because of the delay of the 1 year of the NOX SIP 
Call to 2004 that we reapplied there. And whether it is 23 
percent, or 9 percent, or whatever, on those days, as you are 
aware, despite everything you do, if upwind emissions are 
affecting your ability to attain--which does have legal 
ramifications--we have to be concerned about that. And I am not 
sure I am really answering your question, but the mindset that 
we had all along was we always had the ability to ask to be 
bumped up, the ability to get 2005 as a attainment date, but 
when we looked at the prescriptiveness of the severe 
requirements, like Federal RFG, they just didn't make sense for 
Atlanta. I haven't had time to look at any other state's plans 
to know whether they are good or bad or whatever, but I only 
know what we have done in Atlanta, and we have done what we 
can. We have become convinced that transport is a big part of 
it.
    Mr. Allen. Thank you. Let me ask a couple quick questions. 
The legislative language that is proposed at the end of your 
testimony, can you tell me who wrote it?
    Mr. Methier. That was done by ourselves, with our 
legislative counsel.
    Mr. Allen. Does it have the support of your Governor?
    Mr. Methier. As far as I know.
    Mr. Allen. In that legislative language, the term 
``downwind area'' is defined as ``an area affected by 
transport,'' and I guess in many ways almost every city would 
be affected by transport.
    Are you suggesting that--I guess my question is, don't we 
need a higher standard than that, or is there a higher standard 
buried elsewhere in the text of the language, or are you just 
relying on EPA to make the judgment? What is your intention in 
drafting the legislation?
    Mr. Methier. Our intention was to rely very heavily on U.S. 
EPA, and the extension policy, when you read it, and the 
documentation that led up to it, it gives EPA really the 
discretion to make that decision what area is really most--
where it can be most appropriately applied. Every region is 
different. Every region is unique. The southeast is different 
than the northeast as far as transport issues, and it is tough 
to put that in the legislative language. So there would have to 
be some ability for the Federal EPA to make those kinds of 
determinations. And it was tough to craft that, but that is our 
best attempt.
    Mr. Allen. Thank you. I yield back.
    Mr. Shimkus. The gentleman yields back. The Chair 
recognizes the gentleman from New Jersey, Mr. Pallone.
    Mr. Pallone. Thank you, Mr. Chairman. I just wanted to 
thank our Assistant Commissioner Wolfe, from the New Jersey 
Department of Environmental Protection, for being here today. 
And I just wanted to say something briefly and ask a question 
or two.
    Due to the severe nonattainment classification of most of 
our state, New Jersey has had to act swiftly and forcefully to 
reach attainment goals, and we are moving forward in a 
responsible manner to accomplish these goals by the prescribed 
attainment date. But our State has been a model in addressing 
the requirements of the Clean Air Act, and our factories and 
utilities have implemented a large number of ozone pollution 
control measures. And as you heard in your testimony, which 
unfortunately I missed, these actions were taken at a time when 
implementation was much more difficult than it is now.
    One of my concerns in regard to the EPA extension policy is 
the effect that transport from Washington, DC would have on New 
Jersey. An internal EPA memo regarding the original adoption of 
the extension policy noted that ``the downwind area still must 
ensure that its emissions will not interfere with attainment in 
areas farther downwind.''
    I just wanted to ask Mr. Wolfe if you would elaborate on 
how an extension for Washington, DC, for example, would affect 
New Jersey's attempts to reach attainment, and then maybe Mr. 
Baron could describe for us the measures that are being taken 
by the District of Columbia to reach attainment.
    Mr. Wolfe. I thank you, sir. I understand that Washington, 
DC has not sought to get relief from the prospect of a bump-up, 
which would mean that as they bump-up, they are going to be 
required to take more steps to control the sources of ozone 
within their boundaries. And to the extent that pollution from 
Washington is affecting our ability in New Jersey to meet the 
Federal health standards for ozone, if Washington is going to 
take more steps to control that pollution, then that can only 
help us.
    Mr. Baron. Representative Pallone, just to add to that 
point, if the policy were changed, as some here have suggested, 
so that Washington could rescind its bump-up, then New Jersey 
would see uncontrolled pollution from Washington in much 
greater quantity than it would otherwise. There is no question 
that there is transport up and down the coast, and that is one 
of the important reasons that this policy just doesn't work.
    In terms of what is being done to meet the severe area 
requirements, the Washington area--which includes parts of 
Maryland and Virginia as well as the District of Columbia--is 
adopting lower thresholds for reasonably available control 
technology, which means more pollution sources will have to 
install pollution controls, but as the Deputy Commissioner 
noted, these are controls that are already being used in New 
Jersey. And, in fact, the kinds of measures that are going to 
be adopted here are the kinds of measures that you already have 
in New Jersey, and measures that should have been adopted here 
sometime ago.
    Mr. Pallone. Thank you. Mr. Wolfe, I understand that our 
State has upcoming compliance deadlines in 2005 and 2007, those 
are the two dates?
    Mr. Wolfe. That is correct.
    Mr. Pallone. Could you explain to us what would happen if 
New Jersey is unable to reach attainment by those deadlines?
    Mr. Wolfe. If New Jersey is unable to reach attainment, 
then we would be in the same position as has been talked about 
by some of the folks who are opposing the prospect of a bump-
up, which is that we would have to impose $5,000 per ton fees 
on major sources of volatile organic compounds. So that would 
be an extremely heavy financial burden and something that I 
think would be enough to drive businesses to really consider 
whether they want to continue operating in New Jersey.
    So, what we are looking at right now is with the 2005 and 
2007 attainment deadlines staring us in the face is that rather 
than hoping that somebody will move the goalposts for us, we 
are really scrambling to find every source of emission 
reduction that we can, that our business community can handle, 
so that we can meet the standards. That means that we are 
setting new standards that are going to apply to auto body 
shops, to gas stations, that we have proposed new standards for 
VOCs in paints. And on top of that, we reached an agreement 
last year with the operator of the three largest coal-fired 
electric generating units in New Jersey that are going to bring 
major, major reductions in emissions from those units. At the 
same time, we are also using the tools that the Clean Air Act 
gives us to go after sources of pollution upwind of us, and 
that includes having negotiated an agreement in principle for 
the shutdown of a coal-fired power plant outside our borders, 
and also that we are participating in new source review 
litigation, trying to get other upwind power plants to clean 
up.
    Mr. Pallone. Thank you. Thank you, Mr. Chairman.
    Mr. Shimkus. Thank you, Mr. Pallone. Is there anyone else 
seeking additional time?
    [No response.]
    That being said, we would like to ask for any follow-up 
responses, maybe any additional questions that we may want to 
submit in writing to you all, if you would agree to that as to 
kind of keep the committee still receiving information on this, 
then we would like to do that. And we would like to thank you 
for your testimony and being available and accessible today, 
and I think we are starting on a good process of discourse. And 
with that, the committee is adjourned.
    [Whereupon, at 12:55 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]
 Prepared Statement of Hon. John Breaux, a U.S. Senator from the State 
                              of Louisiana
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to speak with you today about the Environmental Protection 
Agency's ``ozone transport policy'' and Title I of the Clean Air Act. 
This is a matter of great importance not only for Baton Rouge, but also 
to a number of other important urban centers around the country.
    I am proud of the progress my state has made in improving its air 
quality for our citizens. With the exception of ozone, all 64 Louisiana 
parishes are classified as being in attainment for all established 
National Ambient Air Quality Standards. In 1978, there were nearly 20 
parishes listed as being in non-attainment for the 1-hour ozone 
standard. Now only the five Baton Rouge area parishes remain in non-
attainment and they have made significant progress toward achieving 
attainment of the 1-hour standard.
    Over the past decade I have worked with leaders from these five 
parishes, as well as state leaders, as they have tackled various 
challenges in their efforts to meet the multitude of EPA requirements 
for non-attainment areas and their efforts to help bring the region 
into attainment. Over this time I have been impressed by the fact that 
working toward attainment has truly become a committed community 
effort.
    In reviewing the history of the Baton Rouge area's ozone attainment 
efforts I can begin to understand the frustration of local leadership 
and those at the Louisiana Department of Environmental Quality. When 
the area began its compliance activities under the Clean Air Act 
Amendments of 1990 the air in the Baton Rouge region was characterized 
by large quantities of industrial emissions and admittedly poor air 
quality.
    Utilizing EPA's prescribed tools and guidance, the Louisiana 
Department of Environmental Quality developed a State Implementation 
Plan (SIP) that EPA agreed would bring Baton Rouge into attainment of 
the ozone standard. However, the area failed to achieve attainment by 
the November 15, 1999, deadline prescribed for those areas classified 
as being in ``serious'' non-attainment.
    In the spring of 2000, the region sought an attainment date 
extension under the EPA's 1998 Ozone Transport Policy. In a 
collaborative effort with stakeholders from throughout the Baton Rouge 
region, DEQ revised its SIP to reflect updated regional airshed 
modeling that showed the area should shift from a VOC to a 
NOX control strategy to achieve attainment. At that time, a 
comprehensive analysis of potential impacts of pollutants transported 
into the area demonstrated that the area's ozone attainment efforts 
were being impeded by upwind influences. By some experts' accounts, the 
Baton Rouge area would likely have already achieved attainment of the 
1-hour ozone standard had it not been for the influence of ozone and 
precursor pollutants from southeast Texas periodically raising local 
ozone levels.
    Working under EPA's Ozone Transport Policy guidance, DEQ and the 
Baton Rouge Ozone Task Force submitted the revised SIP and Transport 
Demonstration to EPA in December 2001. EPA gave final approval of the 
new Ozone Transport Policy SIP and the region was granted an attainment 
date extension to November 2005.
    However, as a result of recent federal court rulings, EPA has 
conceded it lacks authority under the Clean Air Act to extend 
attainment dates based on its Ozone Transport Policy and has started 
the reversal of the attainment date extensions it had approved under 
its 1998 transport policy. The Baton Rouge area was one the first areas 
to experience a reclassification, or ``bump-up,'' as a consequence of 
the recent court decisions.
    The Baton Rouge region has worked extremely hard, complied with 
applicable EPA non-attainment requirements and, in spite of upwind 
influences, has progressed to being very close to attainment of the 
ozone standard. Thus, it seems unfair, as well as unreasonable, to me 
that due to recent court rulings the EPA will be forced to penalize 
these efforts by reclassifying Baton Rouge as being in ``severe'' non-
attainment.
    This reclassification is further compounded by the fact that the 
requirements mandated by the Clean Air Act for those areas in 
``severe'' non-attainment will adversely effect the area's economy 
while only providing negligible ozone reduction benefits. In addition, 
under the Transport SIP approved by the EPA in October of last year, 
the Baton Rouge area committed to an aggressive program of emission 
reductions and an attainment date of November 2005. Thus, the ``bump-
up'' to the ``severe'' classification and all of the negative impacts 
it will have on the region does nothing to advance the deadline for 
being in attainment.
    The Baton Rouge region's effort to come into compliance with the 
Clean Air Act's ozone requirements is a case study for why the EPA 
adopted its Ozone Transport Policy in 1998. It is clear that the region 
has made a commitment to come into compliance with the requirements of 
the Clean Air Act and to address those ozone-forming emissions within 
its control and despite these efforts, Baton Rouge was still ``bumped 
up'' to the ``severe'' non-attainment classification in large part due 
to the transport of pollution from upwind areas that it cannot control.
    This reclassification is not equitable and Baton Rouge should not 
be required to implement additional costly controls to offset the 
effects of pollutants drifting into the region from upwind areas that 
are working with later attainment dates.
    We should not allow regions, such as Baton Rouge, that have made 
every effort to come into compliance with the Clean Air Act to be 
``bumped up'' due to the transport of pollutants from another region. I 
repeat, that this is precisely the type of situation the EPA had in 
mind when it developed its Ozone Transport Policy in 1998.
    While I understand that the courts have ruled that the EPA does not 
have the authority under the Clean Air Act to grant extensions under 
the Ozone Transport Policy, we as legislators have the opportunity to 
correct this situation and I look forward to working with you on this 
important issue. Finally, our progress in the fight for air quality 
improvement should continue full speed ahead, but it should be guided 
by reason and common sense.
    Again, I thank the committee for considering this important issue 
and giving communities, such as Baton Rouge, the opportunity to be 
heard. I hope that as a result of this hearing some ideas will emerge 
for equitably dealing with progress of non-attainment areas towards 
their attainment while accounting for impacts of transported 
pollutants.
                                 ______
                                 
     Prepared Statement of L. Hall Bohlinger, Secretary, Louisiana 
                  Department of Environmental Quality
    Thank you Mr. Chairman and members of the Committee for the 
opportunity to furnish testimony on the reclassification provisions of 
Title I of the Clean Air Act and on the consequences they bear on the 
five-parish Baton Rouge non-attainment area and on our state as a 
whole. The Louisiana Department of Environmental Quality realizes that 
safeguarding the health of our citizens and improving the vitality of 
our local economy are closely linked to the attainment of the National 
Ambient Air Quality Standards (NAAQS.)
    Baton Rouge is the hub of Louisiana state government and houses 
major petrochemical industries, Louisiana State and Southern 
Universities, and a metropolitan airport. Sitting on the banks of the 
Mississippi River, its traffic flows include heavy marine transports, 
Interstate 10, and a concentration of railway assets servicing the 
community. In spite of a challenging emissions inventory from these 
sources and the periodic influence of pollutants transported into the 
region, the five-parish Baton Rouge area has made sound progress toward 
attainment of the 1-hour ozone standard.
    With the exception of the five-parish Baton Rouge non-attainment 
area, which has not yet met the standard for ozone, the remaining 59 
Louisiana parishes are in compliance with the NAAQS for all criteria 
pollutants. Following the Clean Air Act of 1977, 20 parishes around the 
state were classified as non-attainment for ozone. Of the 20, 15 have 
now been redesignated to attainment status. The five-parish Baton Rouge 
non-attainment area came within 2 ppb of achieving attainment in 1999, 
and last year came within only one exceedance day of attainment. If the 
non-attainment area were reclassified today in accordance to the 
parameters observed by the Clean Air Act amendments of 1990, the area 
would be classified as marginal.
    In a letter to EPA Region 6 Administrator, Gregg Cooke dated May 
10, 2000, Governor M.J. ``Mike'' Foster, Jr. requested that an 
extension of the attainment date for the five-parish Baton Rouge area 
be granted. Meeting U.S. Environmental Protection Agency policy 
requirements, the state provided a completed Transport State 
Implementation Plan package to EPA in December 2001. This package 
included a demonstration that the area was affected by transport from 
the Houston area in southeast Texas. In October 2002, EPA approved a 
revised attainment plan showing the area would attain the 1-hour 
standard by November 2005 by requiring an additional 30% reduction of 
oxides of nitrogen, an ozone forming pollutant, from industrial plants.
    Due to the federal courts' reversal of EPA's authority to grant 
attainment date extensions, the Baton Rouge area was reclassified from 
serious to severe, effective June 23, 2003. As a result, the Baton 
Rouge area will be confronted with a number of new requirements such as 
the use of reformulated gasoline. Sensitivity analyses conducted during 
recent Urban Airshed Modeling suggests there would be no measurable 
benefit from the use of RFG as it relates to the formation of ozone. 
Further, by using gasoline sales statistics for the five-parish Baton 
Rouge area, it is estimated that RFG will cost consumers an additional 
$48 million per year. In addition to the considerable increase in cost 
to consumers, the reclassification to severe will tag the five-parish 
Baton Rouge area with a stigma of having a severe air quality problem, 
although monitored results show, as stated earlier, that we have at 
worst a marginal problem
    The new severe area requirements imposed with the reclassification 
are expected to produce negligible ozone reduction benefit while 
inflicting enormous cost and economic development impacts. For 
instance, if the Baton Rouge area does not reach attainment by the 2005 
deadline, emission fees will be imposed that will cost our local 
industry around $100 million. This will affect the economy as some 
industries may opt to fold operations and others may choose to bypass 
the area altogether as a potential location for business.
    At this point, I would care to add that considerable practical 
thought and scientific research went into the development of EPA's 
transport policy. In the last analysis, the transport policy was 
designed to allow consideration for situations, such as in Baton Rouge, 
where attainment efforts are impeded by influences of pollutants 
transported from upwind sources, and to allow latitude to an otherwise 
rigid approach to improving air quality. The Clean Air Act should be 
amended to give EPA the authority to implement its transport policy and 
extend attainment dates. It would be of most benefit to areas such as 
the five-parish Baton Rouge non-attainment area for any such amendment 
to be made retroactive. Such an action would provide much needed relief 
to other areas that had been granted approved attainment date 
extensions under the EPA transport policy and that, as a result of 
courts' rulings, have now been reclassified.
    Mr. Chairman, and members of the Committee, Louisiana has made 
significant progress in meeting the requirements of the Clean Air Act 
and we have a vested interest in continuing to improve the quality of 
the air in our state. However, based on sound scientific study, it is 
the opinion of LDEQ that the five-parish Baton Rouge non-attainment 
area would have met the federal ozone standard were it not for the 
transport of pollutants from upwind states. While laws are written for 
the greater good, they also must be written in accordance to the 
reality of the situation at hand.
    Thank you.
                                 ______
                                 
  Additional Comments Regarding the Testimony by County Judge Carl R. 
                                Griffith
    The report titled ``Accidents Will Happen,'' published by the 
Environmental Integrity Project (EIP) was asked by Congressman Waxman 
to be entered into the record for the hearing conducted on July 22, 
2003, by the Subcommittee on Energy and Air Quality concerning the 
Environmental Protection Agency's (EPA) Bump-up Policy under Title I of 
the Clean Air Act.
    Since this report pertains to facilities in Jefferson County, 
Texas, I would like to take this opportunity to provide the sub-
committee with additional comments concerning the accuracy of the 
report.
    Although the EIP report does not pertain to the issues of ozone 
attainment and deadline extensions, since it was entered into the 
record of the hearing, it should be noted that the report contains 
factual errors, and uses incomplete research to draw its generalized 
conclusions. To allow the report to be considered without any 
discussion of its accuracy does an injustice to all of those who have 
worked, planned, and invested in efforts to improve the air quality in 
the Beaumont-Port Arthur-Orange (BPA) area.
    To be specific, the report states three reasons that emissions may 
be underestimated, based on generalized statements and leaves the 
impression that such activities are condoned in Texas. However, such an 
impression is incorrect.
    1. Reporting of emissions is required when those emissions exceed 
permits or regulatory requirements by certain amounts, depending on the 
constituent released. In Texas, more is required, however. For all 
events that lead to emissions above permit/regulatory limits by any 
amount, reportable or not, each facility must complete a report 
containing the same information as required for a reportable event and 
keep that information on file for Texas Commission on Environmental 
Quality (TCEQ) inspection. Furthermore, the events shown in Appendix B 
of the report did not necessarily need to be reported to the National 
Research Center (NRC). One of the facilities listed reviewed every 
incident listed with EPA personnel, and EPA concurred that in each case 
a report to NRC was not required. Other facilities have documented NRC 
Incident Report numbers to confirm that incidents were reported to the 
NRC, contrary to the data presented in the EIP report. There are also 
instances in the report's Appendix B that attribute events to specific 
facilities when there was no event reported by that facility. It should 
also be noted that any non-reportable event not meeting the same burden 
(as a reportable event) to prove the incident was not preventable is 
subject to enforcement action; and TCEQ aggressively enforces this 
regulation. All emissions resulting from normal operations, startups/
shutdowns, and upsets (reportable and non-reportable) are reported to 
TCEQ in each facility's annual Emissions Inventory.
    2. Industry uses flare efficiency factors and specific calculation 
methods that are provided by a TCEQ Guidance Document on Flares, and 
flare efficiencies are discussed later in my remarks.
    3. TCEQ rules require all pollutants emitted during ``reportable 
episodes'' be reported; in mass units, for each specific constituent--
even for those constituents that do not exceed reportable quantity 
thresholds. Facilities failing to report as required are subject to 
enforcement, but there is no discussion in the EIP report on such 
enforcement activities for the specific instances listed.
    The next section of EIP's report (pages 5 and 6) implies that 
``unpermitted releases'' of VOC's contribute to the BPA area's 
nonattainment status. The fact is there was only one ozone exceedance 
during the first seven months of 2002, on July 12. There was one upset 
reported that day; but it was due to a Sulfur Recovery Unit power 
failure--five hours after the ozone episode--at a facility several 
miles northeast of the Sabine Pass monitor, and the wind direction 
clearly shows the ozone exceedance on that day was due to transport 
from the Houston/Galveston (HGA) area to the southwest of the Sabine 
Pass Air Monitoring Station. None of the events listed in the report 
resulted in the violation of any Ambient Air Quality Standard. The 
report states that public data on benzene and other hazardous chemicals 
is scarce, but fails to mention that TCEQ and the South East Texas 
Regional Planning Commission (SETRPC) have operated monitoring stations 
for over a decade. The results of TCEQ monitoring is available on their 
web site, and the SETRPC monitoring results (including ozone, 
NOX, and 52 volatile organic constituents) are issued at its 
Air Quality Advisory Committee meetings attended by municipalities, 
industry, business leaders, labor representatives, environmental 
groups, and the media.
    On page 7 of the EIP report, there is a statement that ``all 
accidental releases, as well as many that result from maintenance or 
shutdown activity of hazardous chemicals above a specified amount, must 
also be reported to the federal government's NRC within twenty-four 
hours.'' This statement is not true. Only constituents designated as 
hazardous substances under the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980 (CERCLA) are subject to the 
designations and reporting requirements as promulgated under 40CFR302.4 
and 40CFR302.6. Therefore, not every emissions event requires reporting 
to the NRC. Events involving sulfur dioxide, for instance, which is not 
designated as a hazardous substance under CERCLA, would not be reported 
to the NRC, while such events would be reported to the Local Emergency 
Planning Committee (LEPC) and state agencies. The facility mentioned in 
the EIP report with the upset from a ``Grandfathered Unit'' did report 
the event in a timely manner to TNRCC (TCEQ)--though they felt the 
event didn't meet the reporting criteria, but was not required to 
report the event to the NRC because the constituents released were not 
on the CERCLA Hazardous Substances list. In addition, TCEQ reporting 
limits are lower than federal regulatory requirements for some 
substances, so it would be expected that TCEQ would have more reports 
on file than the NRC.
    The discussion of flaring efficiencies on page 9 of the report 
utilizes data from a study of oil field flares to prove flaring 
efficiencies are lower than industry claims. The study was based on 
open pipe, small diameter flares with no combustion enhancements. The 
results were exactly as expected, degraded efficiencies. The problem 
with the study, however, is the oil field flares have about as much in 
common with refinery and chemical plant flares as a rowboat has with 
the Queen Mary! Other studies conducted on large diameter flares, under 
real ambient weather conditions, in real industrial facilities revealed 
combustion efficiencies greater than 98 %, but those studies were not 
mentioned in the EIP report.
    The EIP report applauds BP Amoco for entering into a consent decree 
with EPA, yet fails to mention that one of the facilities in Port 
Arthur had also entered into a consent decree with EPA the year before 
the report was developed.
    The report further says that ``substituting `tail gas units' 
(TGTUs) that are much more efficient at destroying hazardous pollutants 
than the flares on which Port Arthur companies now rely'' as a way to 
improve pollution control; however, the report fails to mention that 
all the refineries in Port Arthur already utilize TGTUs on their Sulfur 
Recovery Units, and flares are used only as the safety devices they are 
designed to be.
    Every one of the conclusions in the EIP report fails to understand 
the situation that exists in Port Arthur.
    1. There is a reverse 9-1-1 system in all of Jefferson, Hardin, and 
Orange Counties. Local emergency response officials can activate the 
system should any emergency require such steps. This reverse 9-1-1 
system was instituted in early 2003; however, was far along in its 
development during 2002. The EIP could have easily ascertained this 
fact had it chosen to do so. In addition, industry in the BPA area has 
funded development of an informational call-in system (and is in the 
process of preparing to make the system public) that will allow 
citizens to get information on local plants' activities, including 
environmentally related events. The development and preparation of the 
call-in system was well along during 2002, and the EIP could have 
easily ascertained information about the system. As discussed earlier, 
and contrary to the statements made in the EIP report, not all 
emissions events are required to be reported to the NRC, therefore, 
disparate numbers of reports between the NRC and local agencies should 
be expected, not a cause for investigations.
    2. The EPA Toxic Atmospheric Gas Analyzer van did monitor the Port 
Arthur area in early 2003 and, according to the EPA report on the 
results, the concentrations found were ``substantially below the 
Occupational Safety and Health Administration Permissible Exposure 
Levels for worker protection.'' Several chemicals exhibited short-term 
concentrations above the Texas Health Effects Screening Levels, 
although daily, monthly, and annual concentrations would likely be 
consistent with (below) Health Effects Screening Levels. One EPA 
official said in responding to a media question about the data said the 
air in the Port Arthur area was obviously getting better--just opposite 
the impression left by the EIP report. In addition, industry in Port 
Arthur has funded an additional stationary VOC air monitoring station 
(near the Memorial High School 9th Grade Campus), with episodic 
sampling capability, to be operated by the SETRPC.
    3. As discussed earlier, at least one of the Port Arthur facilities 
entered into a consent decree with EPA in 2001. Hundreds of millions of 
dollars have been invested by the industrial facilities in Port Arthur 
over the last decade to improve operational performance and install 
pollution reduction equipment. There was a 38% reduction in industrial 
emissions between 1996 and 2001, and an addition 18% in total emissions 
in the 2002-2006 timeframe. Twenty-two pollution reduction projects 
were completed by Port Arthur facilities in 2002 with fifteen more 
scheduled for 2003. To leave the impression that facilities in Port 
Arthur are reluctant to install state-of-the-art equipment is not 
supported by the area's industrial facilities' investments in pollution 
control equipment. In addition, area industrial personnel meet 
quarterly with TCEQ staff personnel to discuss the latest operational 
and maintenance initiatives that have proved successful in reducing 
upset and startup/shutdown emissions. These meetings have been 
occurring for over two years, and discuss information that has been 
developed locally, as well as practices that have proven successful in 
other areas of the country.
    4. As discussed earlier, TCEQ aggressively enforces its upset 
rules, which have very limited definitions of what constitutes an upset 
that can be exempt from enforcement action; however, the EIP report 
discusses none of those activities. As one facility was told by a TCEQ 
staff member during a review of non-reportable upset events, ``you are 
being held to a standard of operational perfection!''
    The air in Port Arthur has markedly improved over the last decade 
as evidenced by the EPA's TAGA van results and the stationary air 
monitoring systems operated by TCEQ and SETRPC. Elected officials, 
businesses, labor leaders, industry, municipalities, and the SETRPC 
have worked diligently with EPA and TCEQ personnel to understand and 
find solutions to air issues that will benefit the BPA area for years 
to come. Yet, one-sided, inaccurate, and flawed reports such as EIP's 
``Accidents Will Happen'' do nothing but mischaracterize the results of 
those multi-faceted efforts, and divert attention away from the ozone 
transport policy under consideration by your Subcommittee.
    I appreciate having the opportunity to testify before the 
Subcommittee, and thank you for your consideration of these comments 
trying to make the Subcommittee members aware of the scope and results 
of our efforts in Southeast Texas, compared to the impression presented 
in the EIP report.
                                 ______
                                 
                                                  September 5, 2003
The Honorable Joe Barton
Chairman
Subcommittee on Energy and Air Quality
U.S. House of Representatives
Washington, DC 20515-6115
    Dear Chairman Barton: I am writing in response to your letter of 
August 22, 2003. In this letter you requested additional information 
regarding the testimony I presented at the July 22, 2003 subcommittee 
hearing regarding the ``Bump-Up'' Policy Under Title I of the Clean Air 
Act.
    Enclosed please find our responses to these questions. If you 
should need any additional information please do not hesitate to 
contact me at 512-239-5515.
            Sincerely,
                                     R.B. ``Ralph'' Marquez
                                                       Commissioner
Enclosures
                     the honorable henry a. waxman
    Question 1. Texas requests an extension of the attainment date for 
nonattainment areas downwind from the Houston-Galveston nonattainment 
area, but the State has not adopted a SIP that contains a complete 
control strategy (i.e., all the adopted control measures needed to 
attain) for the 1-hour ozone standard in Houston.
    Question 1a. What steps remain to be completed to develop and adopt 
a complete control strategy for the Houston nonattainment area?
    Response. The remaining steps to be completed continue to be those 
outlined in Chapter 7 of the December 2000 and September 2001 SIP 
revisions, approved by EPA in November 2001.
    Question 1b. Is there evidence that the emissions inventory for 
VOCs used in the photochemical grid modeling approved by EPA in 
November 2001 as part of the attainment demonstration underestimates 
actual emissions from sources in the nonattainment area?
    Response. See 1d
    Question 1c. For which VOC species is there evidence that the 
emissions inventory used in the EPA-approved modeling analysis 
understates emissions?
    Response. See 1d
    Question 1d. For which sources or source categories is there 
evidence that the emissions estimates used in the EPA-approved modeling 
analysis understates emissions?
    (Response to Questions 1.b, 1.c, and 1.d) There is strong evidence 
that industrial emissions of light olefins, especially ethylene and 
propylene, are significantly larger than the amounts reported in 
current inventories in the Houston/Galveston/Brazoria (HGB) region. The 
reporting is based on EPA emission factors. Analysis of data collected 
during the 2000 Texas Air Quality Study (TexAQS 2000) was conducted by 
several groups of research scientists who concluded that the observed 
atmospheric concentrations of ethylene and propylene could not be 
explained by the reported inventory. They concluded that the ethylene 
and propylene observations were consistent with industrial emissions of 
these chemicals, not due to mobile sources. Some of this research is 
described in supporting documents for the December 2002 SIP Revision 
(see http://www.tnrcc.state.tx.us/oprd/sips/dec2002hga.html). 
Additional material is available at http://www.tnrcc.state.tx.us/air/
aqp/airquality--science.html. Finally, several articles have been 
published in the scientific literature:

--Ryerson, T.B., et al. (2003), Effect of petrochemical industrial 
        emissions of reactive alkenes and NOX on 
        tropospheric ozone formation in Houston, Texas. Journal of 
        Geophysical Research, 108(D8): 4249, doi: 10.1029/2002JD003070;
--Wert, B. P., et al. (2003), Signatures of terminal alkene oxidation 
        in airborne formaldehyde measurements during TexAQS 2000. 
        Journal of Geophysical Research, 108(D3): 4104, doi: 10.1029/
        2002JD002502;
--Kleinman, L. I., et al. (2002), Ozone production rate and hydrocarbon 
        reactivity in 5 urban areas: A cause of high ozone 
        concentration in Houston, Geophysical Research Letters, 29, 
        doi: 10.1029/2001GL014569.
    The TCEQ is currently investigating emissions of non-olefinic 
hydrocarbons, but no conclusions have been reached regarding whether, 
or by how much, these emissions may be under-reported. In addition, the 
TCEQ constantly strives to improve its inventory of emissions from all 
sources, and plans to examine emissions from a number of non-industrial 
sources in the coming months and years.
    Question 1e. By what amount does the emissions inventory used in 
the EPA-approved modeling analysis understate actual emissions of each 
of the VOCs identified in response to 1.c?
    Response. While it is fairly certain that industrial emissions of 
light olefins in the HGB area are significantly under-represented in 
the inventory, the actual amount of under-estimation is unknown. In the 
modeling analysis conducted for the December 2002 SIP revision, these 
emissions were inflated to approximately five times the reported 
amount, but this is by no means a definitive factor. It is very 
difficult to relate measured atmospheric pollutant concentrations to 
source strength, and different assumptions and/or analytical techniques 
invariably lead to different answers. The TCEQ, along with other 
organizations, is continuing to research the issue and hopes to resolve 
some of the uncertainties in estimating these emissions in the upcoming 
months. Additionally, a new major field study is planned for 2005-2006, 
where additional data collection and new analysis methods should help 
to provide more definitive answers to the questions posed here.
    Question 1f. Has the State proposed to adopt, or adopted, emissions 
limitations or other control measures to achieve reductions in 
emissions of each of these VOCs?
    Response. The commission has adopted emissions limitations and 
control measures via rules that include a site-wide cap, monitoring, 
and testing requirements for vents, flares, and cooling towers. The 
site-wide cap limits the highly reactive volatile organic compounds 
(HRVOC) emissions from each account on a 24-hour rolling average. The 
monitoring and testing requirements ensure that leaks and other 
problems contributing to the emissions of HRVOCs are discovered, 
evaluated, and corrected in a timely manner in order to ensure 
compliance with the site-wide cap limits. Flares are also required to 
demonstrate compliance with 40 CFR 60.18.
    Question 1g. Has the State determined the magnitude of reductions 
of each of these VOCs necessary to attain the 1-hour NAAQS?
    Response. We understand ``these VOCs'' to mean any identified in 
1c. The purpose of the December 2002 SIP revision was to demonstrate 
that a certain level of reduction in HRVOCs would result in the same 
air quality benefit with an 80% NOX reduction strategy as 
was demonstrated with the approved 90% NOX reduction 
strategy.
    Question 1h. What methodology has been used to make this 
determination? Please provide copies of documents reporting the methods 
used in performing any analyses to make such determination.
    Response. The methodology used to make this determination may be 
found at the following websites: http://www.tnrcc.state.tx.us/oprd/
sips/dec2002hga.html). Additional material is available at http://
www.tnrcc.state.tx.us/air/aqp/airquality--science.html.
    Question 1i. If such determination has not been made, by when will 
the State complete a determination of the magnitude of reductions of 
each VOC needed for attainment?
    Response. See 1h.
    Question 1j. When will the State release such determination for 
review by the public and EPA?
    Response. The information used for this SIP revision may be found 
on our website at: http://www.tnrcc.state.tx.us/oprd/sips/
dec2002hga.html
    Question 1k. When will the State complete the adoption of all 
emissions limitations or other control measures needed for attainment?
    Response. TCEQ is currently evaluating what emission limitations or 
other controls are needed and the timeframes in which they can be 
implemented, as we are required to do.
    Question 1l. How long does the State expect it will take for the 
sources of VOCs to implement such emissions reductions after adoption?
    Response. The compliance dates for the emission reductions adopted 
in the December 2003 rule and SIP revision are April 1, 2006 for the 
site-wide cap; June 30, 2004 for the testing of vents; December 31, 
2004 for the monitoring and testing of flares and cooling towers; and 
December 31, 2003 for the initial monitoring of pump and compressor 
seals.
    Question 2. In December 2002, Texas adopted revised emissions 
limitations that relax the emissions limitations for NOX 
emitted from various industrial sources that had originally been 
adopted in 1999 and approved by EPA as part of the Houston SIP in 
November 2001.
    Response. The NOX emission specifications for HGA were 
originally adopted in December 2000 and revised (for electric 
utilities) in September 2001. It was the NOX emission 
specifications adopted in September 2001 which were approved by EPA in 
November 2001.
    Question 2a. What is the increase in allowable daily NOX 
emissions that will result if the relaxed emissions limitations are 
enforced in lieu of the emissions limitations that have been approved 
as part of the Texas SIP?
    Response. 52 tons per day (tpd)
    Question 2b. By what date are the NOX emissions 
limitations required by the EPA-approved SIP to be achieved?
    Response. The Chapter 117 and Chapter 101 rules adopted by the 
commission on September 26, 2001 were approved by EPA in the November 
14, 2001 issue of the Federal Register. These rules phased in 
stationary source NOX reductions beginning in 2003 and 
continuing through 2007. Specifically, for boilers, auxiliary steam 
boilers, and stationary gas turbines at electric utilities, the 
allocation of NOX allowances resulted in the following 
overall reductions of NOX emitted from electric utilities: 
44% reduction beginning April 1, 2003; 88% reduction beginning April 1, 
2004; and 90% reduction by April 1, 2007. For non-utility facilities, 
the allocation of NOX allowances resulted in the following 
overall reductions of NOX emitted from non-utility 
facilities: 35% reduction by April 1, 2004; 60% reduction by April 1, 
2005; 70% reduction by April 1, 2006; and 90% reduction by April 1, 
2007.
    Question 2c. What assumptions were made regarding total 
NOX and VOC emissions in the Houston-Galveston nonattainment 
area when Texas determined that the 1-hour NAAQS would be attained in 
Beaumont/Port Arthur and Dallas/Fort Worth.
    Response. The controls applied in the HGB nonattainment area for 
both SIP revisions consisted of Tier III NOX controls (later 
referred to as ESAD rates) as specified in Chapter 117. To achieve 
these NOX control levels, most stationary combustion sources 
in HGB must apply burner modifications and/or flue gas clean-up. 
However, there undoubtedly will be cases in which an owner or operator 
evaluates the circumstances of a particular unit and determines, for 
whatever reason, to pursue an option other than retrofit control 
technology. For example, replacement or consolidation of existing 
equipment, reduced fuel firing, and shutdown of existing equipment 
(particularly for marginally economic equipment and production lines) 
are possible options for reducing NOX. The owner or operator 
of each affected source is free to choose the control technology which 
best addresses the circumstances of the affected sources, obtain 
additional allowances from another facility's surplus allowances, or 
select a combination of the two approaches.
    Application of Tier III NOX controls in HGB represents 
roughly a 90% reduction in NOX emissions from 1993 (HGB base 
case). VOC reductions, mainly in the form of rate of progress (ROP) 
commitments, amounted to approximately a 40% reduction from 1993 
levels.
    Question 2d. Has Texas determined the magnitude of emissions 
reductions from local sources that would be necessary to attain the 1-
hour ozone NAAQS in the Beaumont/Port Arthur and Dallas nonattainment 
areas?
    Response. Yes
    Question 2e. If Texas has made the determinations identified in 
question 2.d, what are the allowable emissions target levels for 
NOX and VOC that would need to be met in order to attain in 
each nonattainment area?
    Response. Total allowable emissions for all sources in these areas 
would be: DFW: 321 tpd NOX 680.6 tpd VOC, BPA: 164 tpd 
NOX 187 tpd VOC.
    Question 2f. To what levels of NOX and VOC will the 
emissions of such pollutants be reduced by the controls required by the 
adopted control measures in the SIP for the Beaumont/Port Arthur 
nonattainment area, and the SIP for the Dallas/Ft. Worth nonattainment 
area?
    Response. In the Beaumont/Port Arthur area NOX will be 
reduced by 31%, and VOC has already been reduced by 24%, mainly in the 
form of ROP commitments, to reach the levels outlined in 2e. In the 
Dallas/Fort Worth area NOX will be reduced by 36% and VOC by 
6.5% to reach the levels outlined in 2e. These percentages indicate the 
difference between the future base case and the future controlled case.
    Question 2g. Has Texas performed any air quality modeling analysis 
using photochemical grid models to determine the impact of such 
increase in NOX emissions on ozone formation in downwind 
nonattainment areas, including but not limited to, Beaumont/Port Arthur 
and Dallas/Fort Worth?
    Response. No. However, we believe that the transport of ozone is 
the primary influence on these areas. Therefore, as our analysis has 
indicated that we can achieve the same level of air quality benefits 
with reductions in industrial VOC emissions, combined with an overall 
80% reduction in NOX emissions from industrial sources, the 
impact on the ozone transported to the Dallas/Fort Worth and Beaumont/
Port Arthur areas should also be equivalent. (see http://
www.tnrcc.state.tx.us/oprd/sips/dec2002hga.html) and http://
www.tnrcc.state.tx.us/air/aqp/airquality--science.html).
    Question 2h. If such analyses have been performed, what is the 
difference in ozone formation in the downwind areas when the EPA-
approved emissions limitations are compared with the relaxed emissions 
limitations?
    Response. See 2g
    Question 2i. Were such analyses, if any, made available to the 
public and EPA prior to or during the period for public comment on the 
proposed relaxed emissions limitations? Please provide copies of 
documents reporting the methods used in performing such analyses.
    Response. See 2g
    Question 3. You testified that:
    We believe that the emission reductions that have been adopted for 
the BPA area would bring the area into attainment of the 1 hour ozone 
standard but for the emissions transported from the Houston-Galveston 
area. This is why it makes sense for areas downwind of a source area to 
have the same attainment date as the source area.
    Please answer the following questions in regard to this statement:
    Question 3a. Is it the position of the Texas CEQ that the BPA area 
would attain the 8-hour ozone standard but for the emissions from the 
Houston-Galveston area?
    Response. As with the 1-hour ozone standard, there is evidence that 
the Houston-Galveston area has a significant impact on the BPA area 
with regards to its ability to attain the 8-hour ozone standard. 
However, the TCEQ has not completed all of the analysis necessary to 
establish a definitive position that the BPA area would attain the 8-
hour standard but solely for the emissions from the Houston-Galveston 
area.
    Question 3b. If the Texas CEQ does not believe that BPA would 
attain the 8-hour ozone standard but for the emissions from the 
Houston-Galveston area, please explain what additional control measures 
will be necessary for BPA to attain the 8-hour ozone standard. 
Additionally, please explain why as policy matter it makes sense to 
delay action to control pollution in BPA when current law will require 
attainment of the 8-hour ozone standard toward the end of this decade? 
Additionally, please provide your estimate of the public health impacts 
of delaying emissions reductions necessary to meet the 8-hour health-
based standard.
    Response. TCEQ has not completed the analysis to determine what, if 
any, additional controls would be necessary locally in the BPA area to 
develop an attainment demonstration for the 8-hour standard. The TCEQ 
has not taken a position to delay action in the BPA area, and continues 
to implement the current measures, which will result in approximately a 
45% reduction in industrial NOX emissions by May 2005. The 
TCEQ is in the process of conducting a comprehensive scientific 
analysis of all of the factors contributing to the 8-hour nonattainment 
status in BPA and will continue to develop strategies to be implemented 
as expeditiously as practicable in the most cost effective manner to 
achieve the standard. As the TCEQ conducts its analysis it will 
evaluate the impact the HGB area has on BPA in its determination of the 
most scientifically sound approach to achieving the standard. 
Recognizing the complexity of the ozone problem in the Houston-
Galveston area, it may take more time to implement the strategy there 
before the BPA area will be able to achieve attainment by its currently 
contemplated attainment date, which does not take into account 
influence from other areas.
    The TCEQ has not conducted a health based analysis with regards to 
attaining the ozone standard.
    Question 3c. If the Texas CEQ believes that BPA would attain the 8-
hour ozone standard but for emissions from the Houston-Galveston area, 
please provide the technical basis for this view.
    Response. This analysis is anticipated to be completed in the 
spring of 2004.
    Question 3d. If the Texas CEQ does not know whether or not BPA 
would attain the 8-hour ozone standard but for emissions from the 
Houston-Galveston area, please explain why it makes sense for Congress 
to legislate to address the situation in Texas before Texas fully 
understands the scope of its air pollution problems?
    Response. The TCEQ believes that there should be an option 
specifically allowed if the scientific analysis shows this to be the 
case.
    Question 4. You did not testify whether the Dallas-Fort Worth area 
would attain either the 1-hour or 8-hour ozone standard but for 
emissions from the Houston-Galveston area.
    Question 4a. Is it the position of the Texas CEQ that Dallas-Fort 
Worth would attain the 1-hour ozone standard but for emissions from the 
Houston-Galveston area? Please provide the technical basis for your 
view.
    Response. This analysis was conducted as a part of the attainment 
demonstration SIP adopted by the commission in April 2000. The full 
analysis can be found at: http://www.tnrcc.state.tx.us/oprd/sips/
apr2000dfw.html
    Question 4b. Would Dallas-Fort Worth attain the 8-hour ozone 
standard but for emissions from the Houston-Galveston area? Please 
provide the technical basis for your view.
    Response. As with the 1-hour ozone standard, there is evidence that 
the Houston-Galveston area has a significant impact on the DFW area 
with regards to its ability to attain the 8-hour ozone standard. 
However, the TCEQ has not completed all of the analysis necessary to 
establish a definitive position that the DFW area would attain the 8-
hour standard but solely for the emissions from the Houston-Galveston 
area.
    Question 4c. If Dallas-Fort Worth would not attain the 1-hour ozone 
standard or the 8-hour ozone standard, please explain as a policy 
matter why it makes sense to delay additional pollution control efforts 
in Dallas-Fort Worth pending action in Houston-Galveston.
    Response. The TCEQ has not taken a position to delay action in the 
DFW area, and continues to implement the current measures, which will 
result in approximately a 88% reduction in NOX emissions 
from electric utilities by May 2005. The TCEQ is in the process of 
conducting a comprehensive scientific analysis of all of the factors 
contributing to the 8-hour nonattainment status in DFW and will 
continue to develop strategies to be implemented as expeditiously as 
practicable in the most cost effective manner to achieve the standard. 
As the TCEQ conducts its analysis it will evaluate the impact the HGB 
area has on DFW in its determination of the most scientifically sound 
approach to achieving the standard. Recognizing the complexity of the 
ozone problem in the Houston-Galveston area, it may take more time to 
implement the strategy there before the DFW area will be able to 
achieve attainment by its currently contemplated attainment date, which 
does not take into account influence from other areas.
    Question d. What is Texas' estimate of the public health impacts of 
delaying additional control measures that would be necessary to attain 
the 8-hour ozone standard until they are mandated by federal law?
    Response. The TCEQ has not conducted a health based analysis with 
regards to attaining the ozone standard.
    Question 5. According to information received by the Subcommittee, 
malfunctions, startups, shutdowns, and maintenance activities at just 6 
facilities in Port Arthur, Texas (Atofina, BASF, Chevron, Huntsman, 
Motiva, and Premcor) are responsible for a large amount of emissions 
that violate the Clean Air Act while also being controllable. The 
Environmental Integrity Project reports that upsets at these facilities 
in 2002 emitted over 3 million pounds of SO2, over 39,000 
pounds of H2S, more than 700,000 pounds of CO, almost 
174,000 pounds of NOX. Total emissions of volatile organic 
compounds (VOCs) amounted to almost 3 and one-half million pounds of 
VOCs, including over 163,000 pounds of benzene compounds, 137,000 
pounds of butadiene, 995,000 pounds of ethylene, more than 743,000 
pounds of unidentified VOCs, and 1,410,000 pounds of other VOCs.
    Question 5a. Are releases from malfunctions, startups, shutdowns, 
and maintenance activities at facilities in Beaumont-Port Arthur 
currently accounted for in Texas' emissions inventory? If so, please 
provide the levels of emissions that Texas CEQ assumes are emitted from 
facilities in Beaumont-Port Arthur due to malfunctions, startups, 
shutdowns, and maintenance activities?
    Response. Yes, they are reported by the companies and stored in our 
inventory database. For the year 2000, (the latest year that electronic 
data are currently available) the annual emissions (in tons) for the 
three county Beaumont-Port Arthur area from malfunctions, startups, 
shutdowns, and maintenance activities as reported by industry are as 
listed in Table 1 below.

              Table 1. Year 2000 Beaumont-Port Arthur Area Annual Malfunction, Startup, Shutdown, and Maintenance Activity Emissions (tons)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          H2S                                NOX           SO2           CO            VOC         Benzene      Butadiene     Ethylene
--------------------------------------------------------------------------------------------------------------------------------------------------------
25                                                               83         1,167        26,903         1,315             5            55           323
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Question 5b. If emissions due to malfunctions, startups, shutdowns, 
and maintenance activities are not accounted for please explain why.
    Response. They are submitted by industry and are in the inventory
    Question 5c. Please explain what Texas CEQ is doing to address 
these emissions.
    Response. There are several approaches being used to address the 
number of events and emissions related to malfunctions, startups, 
shutdowns, and maintenance activities in Texas. In the case of 
emissions from recurring, planned events, such as many maintenance and 
related shutdown and startup activities, the agency may authorize those 
emissions through the review and permitting process. The TCEQ addresses 
the remaining events through investigation and enforcement.
    Our first ramped up efforts at addressing the number of and 
quantity of emissions related to emissions events (malfunctions) and 
maintenance, startup, and shutdown activities began in January 2000 
when we redirected investigator efforts in our three most 
industrialized areas on the Gulf Coast. We dedicated staff to 
immediately respond to such events and improved our ability to address 
such complex events. We expanded the lessons learned in those regions 
statewide in 2001 to begin conducting planned investigations 
specifically targeting such events. These planned investigations became 
part of our EPA Compliance Monitoring Strategy implementation.
    During the 77th Texas Legislative Session, the state legislature 
provided specific direction on addressing such events in portions of HB 
2912, which was implemented into state rule in September 2002. 
Legislative mandates included requiring the electronic reporting of 
such events, providing access to that information rapidly to the 
general public (see =``http://www.tnrcc.state.tx.us/enforcement/fod/
eer/'' MACRO
BUTTON HtmlResAnchor http://www.tnrcc.state.tx.us/enforcement/fod/eer/) 
and promptly addressing the events. Those events determined by the 
state to be ``excessive'' require that a company either seek to permit 
the operations that led to the event (if the nature of the event makes 
permitting possible) or negotiate a state approved and enforceable 
Corrective Action Plan, all within approximately 180 days of the 
declaration that an event is excessive. These actions are in addition 
to any enforcement that the circumstances of the event warrant.
    Further, the legislation provided for the determination that a site 
can be declared a chronic site for emissions events by act of the 
Commission. In fiscal year 2002, we allocated approximately 8% of our 
air investigator resources (10 of approximately 122 FTEs) to emissions 
events and activities. In 2003 we further increased our efforts in this 
area and expended approximately 13% of our air program investigator 
resources, and in fiscal year FY04 (Sept 03 thru Aug 04), we will 
allocate approximately 20% of our air program investigator resources to 
address emissions events, startup, maintenance, and shutdown 
activities. The investigator resources have been redirected from other 
planned, routine investigations.
    Question 5d. What percentage of Port Arthur's emissions inventory 
for each of the identified emissions do the emissions identified by the 
Environmental Integrity Project account for?
    Response. The emissions identified in question 5 are hydrogen 
sulfide (H2S), nitrogen oxides (NOX), sulfur 
dioxide (SO2), carbon monoxide (CO), volatile organic 
compounds (VOC), benzene, butadiene, ethylene. The emissions listed in 
question 5 are for the year 2002. The area wide emissions for 2002 are 
not yet available. A comparison of emissions from malfunctions, 
startups, shutdowns, and maintenance activities as a percentage of all 
emissions as reported by industry for the year 2000 is in Table 2.

  Table 2. Emissions From Year 2000 Malfunctions, Startups, Shutdowns, and Maintenance Activities as a Percentage of All Emissions in the Beaumont-Port
                                                                       Arthur Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          H2S                                NOX           SO2           CO            VOC         Benzene      Butadiene     Ethylene
--------------------------------------------------------------------------------------------------------------------------------------------------------
10%                                                          0% \1\            3%           59%            7%            3%           22%           23%
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Value is near zero (actual value is 0.2%)

    If the assumption were made that total company reported 2002 annual 
emissions did not differ significantly from those reported by industry 
in the year 2000, then the percentages of the identified levels of 
emissions from malfunctions, startups, shutdowns, and maintenance 
activities for select sites for 2002 as a function of total emissions 
are listed in Table 3.

    Table 3. Emissions From Year 2002 Malfunctions, Startups, Shutdowns, and Maintenance Activities For Select Sites as a Percentage of All Year 2000
                                                       Emissions in the Beaumont-Port Arthur Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          H2S                                NOX           SO2           CO            VOC         Benzene      Butadiene     Ethylene
--------------------------------------------------------------------------------------------------------------------------------------------------------
8%                                                            0%\1\            4%            1%            9%           42%           27%           35%
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Value is near zero (actual value is 0.2%)

                                 ______
                                 
Response of Ron Methier, Air Director, Georgia EPD to the Questions of 
                           Hon. Henry Waxman
    Question 1. In your written testimony, you urge Congress to adopt 
legislation to codify EPA's attainment extension policy and supply 
proposed legislative language for this purpose. During the hearing, 
Congressman Allen asked who drafted the proposed language. Your 
response indicated that the language was produced by the Georgia 
Environmental Protection Division. Is it correct that staff of the GEPD 
drafted the proposed legislative language?
    Response. Yes, the GEPD drafted the proposed legislative language 
supplied to the Subcommittee. This proposed language is a revision to 
draft language provided to us by the State of Louisiana.
    Question 2. If it is correct that staff of the GEPD drafted the 
proposed legislative language, please answer the following questions:
    Question 2a. What office or branch within the GEPD drafted this 
language?
    Response. The Air Protection Branch of the GEPD drafted the 
proposed language.
    Question 2b. When did GEPD draft this language?
    Response. The proposed legislative language to codify EPA's 
extension policy was drafted in the Fall of 2002.
    Question 2c. Did GEPD staff share this language with anyone outside 
of the GEPD? If so, please specify all governmental (including EPA) and 
non-governmental entities (including industry entities) that reviewed 
this language and indicate all entities that provided comments or 
suggestions.
    Response. The GEPD has shared the proposed language with members of 
Georgia's congressional delegation and with the Governor's office, 
which fully supports it. The GEPD also consulted with the State of 
Louisiana concerning revisions to the Louisiana draft. The GEPD did not 
share the proposed language with EPA or with any other governmental or 
non-governmental entity before releasing it in its present form. The 
GEPD did provide a copy to a representative of the Metro Atlanta 
Chamber of Commerce after the language had been finalized to help 
garner support for the State's proposal.
    Question 3. If GEPD staff did not draft the proposed legislative 
language, what entity provided the language to GEPD? When did GEPD 
received this language?
    Response. See response to No. 1 above.
    Question 4. The Subcommittee received testimony that Atlanta's air 
pollution problems have little to do with pollution transport. 
Specifically, J. David Farren of the Southern Environmental Law Center 
testified that:
        The failure to achieve attainment of the one-hour ozone NAAQS 
        in Atlanta has very little to do with pollution transport and, 
        instead, results overwhelmingly from the failure timely to 
        institute available controls on local sources of pollution. In 
        fact, only 9% of the violation days in Atlanta are contributed 
        to by transport.
    Mr. Farren also testified that:
        In fact, EPA found that ``upwind controls are predicted to 
        reduce the number of exceedances in Atlanta by 9 percent.'' 63 
        Fed. Reg.57,446 (Oct. 27, 1998).
    Question 4a. Does the Georgia Environmental Protection Division 
agree or disagree with these statements? Please provide the analytical 
basis for your position.
    Response. The GEPD does not agree that Atlanta's air pollution 
problems have little to do with pollution transport or result from our 
failure to timely institute local control measures, and neither does 
EPA.
    In formulating the NOX SIP Call rule, EPA used several 
different approaches to analyze how nonattainment areas contribute to 
and are affected by pollution transport. To analyze the impact of 
emissions from upwind states on downwind nonattainment areas, EPA 
constructed models that artificially ``zero out'' the emissions from 
individual upwind states. The model then measured the effect on air 
quality in the downwind nonattainment area. Based on this analysis, EPA 
determined that the average percent of 1-hour ozone exceedances in 
Atlanta caused by emissions from sources in the five upwind states 
significantly affecting Atlanta (i.e., those states regulated by the 
NOX SIP Call) is 15%. This same analysis also indicated that 
23% of the highest daily average 1-hour ozone concentrations in Atlanta 
during those days of exceedances is from NOX emissions from 
an upwind state. See Appendix I, ``Evaluation of Contributions--Table 
of Metrics 1-Hour CAMx: Upwind States to Downwind Nonattainment 
Areas'', page I-2 of USEPA document entitled ``Air Quality Modeling 
Technical Support Document for the NOX SIP Call''
    EPA also analyzed the effect of the emission limits proposed by the 
NOX SIP Call rule by assuming application of the rule in 
Georgia and other upwind states. This analysis, referred to by Mr. 
Farren, found that with those limits ``upwind controls are predicted to 
reduce the number or exceedances in Atlanta by 9 percent.''
    Upwind emissions in regulated states will be eliminated when the 
NOX SIP Call Rule is implemented in May 2004. Combined with 
the strict local emissions control measures that have already been 
adopted in the SIP, this should be enough to enable Atlanta to attain 
the 1-hour standard.
    EPA has confirmed that the GEPD has already adopted all 
``reasonably available control measures'' at the local level. The GEPD 
did not delay adopting these controls, but adopted them as soon as the 
gaps in data and scientific understanding were filled. (For a more 
thorough discussion regarding this issue, see my written testimony at 
pages 1113.)
    Question 4b. If upwind controls will reduce Atlanta's exceedances 
by only 9 percent, would these reductions be sufficient to bring 
Atlanta into attainment? If not, please explain the policy basis for 
granting Atlanta an extension from being bumped-up.
    Response. As discussed in 4.a. above, EPA's modeling indicates that 
Atlanta is significantly affected by pollution from upwind states. In 
fact, the air quality analysis in the GEPD's State Implementation Plan 
(SIP) for the Atlanta Ozone Nonattainment Area, submitted to EPA July 
17, 2001, shows that local emission control measures alone cannot 
produce attainment; the Atlanta area can attain only if upwind 
NOX emissions are reduced. EPA concurs with this analysis. 
Further, EPA has determined that NOX emissions from upwind 
states will prevent the Atlanta area from attaining the 1-hour ozone 
standard until the NOX SIP Call rule emission reductions are 
implemented. Based on this determination, EPA approved the SIP and 
extended Atlanta's attainment date from 1999 until 2004.
    In sum, both EPA and the GEPD have determined that Atlanta will 
attain the 1-hour standard as soon as transported pollution is 
controlled. Because the SIP already imposes strict emissions controls 
at the local level, once out-of-state pollution is controlled by the 
NOX SIP Call rule, Atlanta will attain. Under the schedule 
set forth in the Clean Air Act Amendments of 1990, this rule should 
have been implemented prior to the 1999 attainment deadline. It was 
delayed by events beyond EPA's control, but it is now scheduled to be 
implemented by May 2004. Under these circumstances, EPA correctly 
determined that the attainment date for Atlanta should be extended 
until the NOX SIP Call rule takes effect.
    Question 5. You testified that ``The best available modeling 
indicates that the Atlanta ozone non-attainment area will attain the 
one-hour standard for ground-level ozone as soon as the NOX 
SIP Call Rule is implemented, in 2004.'' I have several questions 
regarding this statement:
    Question 5a. Does the Georgia Environmental Protection Division 
believe that Atlanta will also attain the 8-hour ozone standard as soon 
as the NOX SIP Call rule is implemented?
    Response. While the GEPD expects the NOX SIP Call rule 
to have a positive effect on both 1-hour and 8-hour ozone values, we do 
not have any data to indicate that the 8-hour ozone standard will be 
met in Atlanta when the NOX SIP Call rule is implemented. 
The NOX SIP Call rule was promulgated by EPA to deal with 
the effect of upwind NOX emissions on downwind 1-hour ozone 
nonattainment areas only.
    Currently, our ozone monitoring data indicate that the number of 
exceedances and concentrations of both the1-hour ozone and 8-hour ozone 
standards are decreasing. If the Atlanta area were classified today 
based on the most current three years of data (2001-2003), the area 
would be classified ``marginal'' for the 1-hour standard. Based on 
EPA's proposed 8-hour ozone implementation rules, Atlanta would be 
classified ``moderate'' for the 8-hour ozone standard.
    Question 5b. If not, what additional control measures will be 
necessary to attain the 8-hour ozone standard?
    Response. At this time it is not possible to identify the 
additional specific control measures that will be necessary to attain 
the 8-hour standard. The GEPD will not know the answer to this question 
until we have had a chance to compile the emissions inventories and run 
the modeling tools that go into development of a plan to attain the 
8hour standard.
    EPA is expected to designate 8-hour ozone nonattainment areas in 
April 2004. Attainment plans will likely be due three years later, in 
April 2007. This time is necessary to assemble data on the sources of 
ozone-forming pollutants, to develop the models and model inputs 
necessary to evaluate and select the most effective control measures, 
and to develop and adopt enforceable rules to implement those control 
measures. Although the new 8-hour ozone attainment plan will not be due 
to EPA until 2007, the GEPD has already begun work to develop the plan.
    At this point, a significant impediment to the GEPD's work on the 
8-hour plan may be bump-up itself. As a result of bump-up, the GEPD 
will be required to divert time and resources away from the 8hour plan 
to develop and adopt additional control measures for the 1hour plan 
that will not help and may actually impede our progress toward clean 
air. (See page 5 of my written testimony for more details on this 
issue.)
    Question 5c. Please explain why delaying additional control 
measures makes sense when Georgia knows that it will have to comply 
with the 8-hour ozone standard toward the end of this decade?
    Response. The GEPD agrees that it would not make sense to delay 
adopting additional, beneficial control measures that will reduce ozone 
values. The measures that we do not want to adopt are the ones that are 
not beneficial. The additional control measures required by the Clean 
Air Act for severe nonattainment areas, such as implementation of 
federal reformulated gasoline (RFG), will not reduce ozone values and 
may actually produce higher values. As is explained in my written 
testimony, the Clean Air Act imposes a ``one-size-fits-all'' solution 
to ozone that simply does not work for Atlanta, which is 
NOX-limited. The GEPD's air quality modeling indicates that 
higher NOX emissions produce higher ozone values. Thus, 
because implementation of RFG will produce more NOX 
emissions than Georgia's low-sulfur gasoline, RFG may actually produce 
higher ozone values and adversely impact public health. Instead of 
implementing additional control measures that will impede our progress 
toward clean air, we would prefer to focus our efforts on measures that 
actually work, like the low-sulfur gasoline specifically designed by 
the GEPD to address Atlanta's ozone problem.
    At the hearing on July 23, J. David Farren testified that Georgia's 
problem with RFG can be dealt with administratively. This is just not 
the case. The Clean Air Act provides no flexibility regarding the 
requirement for severe areas to use federal RFG. See 42 U.S.C. 
7545(k)(5) & (10).
    Section 211(k) of the Clean Air Act does contain a certification 
procedure that could be used to certify a fuel as meeting the RFG 
specifications. Georgia has sought certification of its low sulfur 
gasoline. A major stumbling block, however, is the ``oxygenate'' 
requirement under 42 U.S.C.  7545(k)(2)(B). To be certified as 
``RFG,'' a fuel must contain at least 2% oxygen. The oxygenate 
requirement does not serve any environmental purpose, at least not in 
Atlanta, but has nevertheless complicated Georgia's effort to obtain 
certification for its existing low-sulfur fuel.
    Moreover, the requirement to use federal RFG could have the 
practical effect of requiring GEPD to abandon or significantly limit 
its existing low-sulfur gasoline program, which actually works. It 
might be theoretically possible to continue using low-sulfur fuel in 
areas outside the non-attainment area, where federal RFG would not be 
required. However, such an arrangement would present numerous supply 
and distribution problems, and would therefore probably not be 
practical.
    Question 5d. What is Georgia's estimate of the public health 
impacts of delaying additional control measures that would be necessary 
to attain the 8-hour ozone standard until they are mandated by federal 
law?
    Response. Georgia will not delay attainment of the 8-hour ozone 
standard. Georgia will adopt such measures as are necessary to attain 
the 8-hour standard as expeditiously as practical.
    Note that Atlanta's failure to attain the 1-hour standard by 1999 
can be attributed in large part to the transport issue. The problem was 
not just the substantive effect of transported pollution, but also the 
absence of scientific understanding and any data on the transport issue 
prior to the NOX SIP Call rulemaking. Without that data, and 
the more sophisticated models that followed, it was not possible to 
evaluate which ozone-control strategies would be most effective in 
controlling ozone in specific nonattainment areas. In fact, we learned 
early on that things are not always what they seem; for example, it is 
generally beneficial to reduce NOX emissions, but in some 
cases, like Atlanta, this can actually exacerbate the problem. The 
requirement to use federal RFG in all severe areas is a classic example 
of the lack of scientific understanding. Given unexpected findings like 
these, our efforts during most of the 1990s were necessarily directed 
at gathering data and preparing models. That is why many of the 
controls that will bring Atlanta into attainment are just now coming on 
line--first they had to be developed and then industry had to be given 
time to implement them. (See Appendix C of my written testimony, 
paragraphs 16-18 for more details on the local control measures 
adopted.)
    Similar considerations apply to the 8-hour standard. The measures 
that we have adopted to attain the 1-hour standard will not necessarily 
be as effective for the 8-hour standard. We will not know what 
compliance with the 8-hour standard will require until we have compiled 
the emissions inventories and done the necessary modeling. The good 
news, however, is that the data and the models are now much better 
developed. As soon as the GEPD is able to determine what is required, 
it will act to attain the 8-hour standard as expeditiously as 
practicable.
    Finally, GEPD would submit that the public health effect of bumping 
Atlanta up to Severe should be of equal concern. Because the controls 
that Atlanta will be forced to adopt as a severe area are not right for 
Atlanta, this process could actually hinder our ability to clean the 
air. Although the GEPD has not quantified this adverse health effect, 
it makes no sense for a state to be required to adopt such counter-
productive measures.
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