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



 METHYL BROMIDE: UPDATE ON ACHIEVING THE REQUIREMENTS OF THE CLEAN AIR 
                     ACT AND THE MONTREAL PROTOCOL

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON ENERGY AND AIR QUALITY

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 21, 2004

                               __________

                           Serial No. 108-118

                               __________

       Printed for the use of the Committee on Energy and Commerce


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


                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
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                    ------------------------------  
                    COMMITTEE ON ENERGY AND COMMERCE

                      JOE BARTON, Texas, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
RALPH M. HALL, Texas                   Ranking Member
MICHAEL BILIRAKIS, Florida           HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                EDOLPHUS TOWNS, New York
JAMES C. GREENWOOD, Pennsylvania     FRANK PALLONE, Jr., New Jersey
CHRISTOPHER COX, California          SHERROD BROWN, Ohio
NATHAN DEAL, Georgia                 BART GORDON, Tennessee
RICHARD BURR, North Carolina         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, Vice Chairman           TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
STEVE BUYER, Indiana                 LOIS CAPPS, California
GEORGE RADANOVICH, California        MICHAEL F. DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire       CHRISTOPHER JOHN, Louisiana
JOSEPH R. PITTS, Pennsylvania        TOM ALLEN, Maine
MARY BONO, California                JIM DAVIS, Florida
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
LEE TERRY, Nebraska                  HILDA L. SOLIS, California
MIKE FERGUSON, New Jersey            CHARLES A. GONZALEZ, Texas
MIKE ROGERS, Michigan
DARRELL E. ISSA, California
C.L. ``BUTCH'' OTTER, Idaho
JOHN SULLIVAN, Oklahoma

                      Bud Albright, Staff Director

                   James D. Barnette, General Counsel

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

                                 ______

                 Subcommittee on Energy and Air Quality

                     RALPH M. HALL, Texas, Chairman

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

                                  (ii)




                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Bair, James A., Vice President, North American Millers' 
      Association................................................    30
    Bogenholm, Vanessa, Owner, VB Farms, Chair, Board California 
      Certified Organic Farmers..................................    59
    Brown, Reginald L., Executive Vice President, Florida Tomato 
      Committee..................................................    33
    Doniger, David, Policy Director, Climate Center, Natural 
      Resources Defense Council..................................    54
    McMurray, Claudia, Deputy Assistant Secretary for 
      Environment, Bureau of Oceans and International 
      Environmental and Scientific Affairs, Department of State; 
      accompanied by Hon. Jeffrey R. Holmstead, Assistant 
      Administrator for Air and Radiation, Environmental 
      Protection Agency; Rodney J. Brown, Deputy Under Secretary 
      for Research, Education and Economics, Department of 
      Agriculture; and Burleson Smith, Director, Pest Management 
      Policy, Department of Agriculture..........................    12
    Mellano, H. Michael, Senior Vice President, Mellano & Company    37
    Mueller, David, President, Insects Limited, Incorporated.....    48
    Wenger, Paul, Second Vice President, California Farm Bureau 
      Federation.................................................    43
    Wolf, James, Vice President, Trane Corporation...............    62
Additional material submitted for the record:
    Sprenkel, Reid, Global Business Leader-Fumigants, Dow 
      AgroSciences:
        Letter dated August 2, 2004, to Hon. Ralph M. Hall.......    83
        Letter dated August 27, 2004, to Hon. Ralph M. Hall......    88

                                 (iii)

  

 
 METHYL BROMIDE: UPDATE ON ACHIEVING THE REQUIREMENTS OF THE CLEAN AIR 
                     ACT AND THE MONTREAL PROTOCOL

                              ----------                              


                        WEDNESDAY, JULY 21, 2004

                  House of Representatives,
                  Committee on Energy and Commerce,
                    Subcommittee on Energy and Air Quality,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 11 a.m., in 
room 2322, Rayburn House Office Building, Hon. Ralph M. Hall 
(chairman) presiding.
    Members present: Representatives Hall, Whitfield, Norwood, 
Shimkus, Radanovich, Bono, Issa, Otter, Allen, Waxman, Capps, 
and Davis.
    Also present: Representative Foley.
    Staff present: Mark Menezes, majority counsel; Bob Rainey, 
fellow; Kurt Bilas, majority counsel; Margaret Caravelli, 
majority counsel; Michael Goo, minority counsel; and Bruce 
Harris, minority counsel.
    Mr. Hall. The subcommittee will please come to order. 
Without objection, the subcommittee will proceed pursuant to 
Committee Rule 4(e), which governs opening statements by 
members and the opportunity to defer them for extra questioning 
time.
    Hearing no objection, prior to the recognition of the first 
witness for testimony, any member, when recognized for an 
opening statement, may defer his or her 3-minute opening 
statement and instead have 3 additional minutes during the 
initial round of witness questioning. It is not out of reason 
that you would get those 3 minutes anyway, if you wanted them. 
We appreciate you being here.
    These meetings usually are limited to just a few members 
because it is near the end of the last week for a month and a 
half, and they have a lot of other committees to attend. So, I 
recognize myself for an opening statement.
    I want to welcome all of our witnesses here today, and 
thank them for taking the time out of their busy schedules to 
testify before this subcommittee. I would like to recognize and 
welcome Congressman Foley--is he here? Congressman Foley will 
be here, from Florida. He has requested the opportunity to sit 
in on the hearing. With that, I will waive my opening and we 
will get underway, and recognize Mr. Allen for his opening 
statement.
    Mr. Allen. Thank you. Thank you, Mr. Chairman, for holding 
this hearing. I appreciate the chairman's efforts to bring a 
balanced panel here today. Our witnesses represent agricultural 
interests, the Federal Government, the environmental community, 
and industry. I understand from the majority that all the 
witnesses will remain here until they are dismissed by the 
chairman. In the recent past, witnesses left the subcommittee 
before responding to questions from members, and I trust that 
all witnesses will respond to questions from all members that 
wish to ask them.
    Is there an international treaty the Bush Administration 
likes? The Montreal Protocol is one of the most successful 
international environmental regimes ever created. The treaty, 
negotiated by the Reagan Administration, phases out the use of 
chemicals that damage the ozone layer. It has markedly slowed 
the depletion of earth's stratospheric protective shield, 
however, we are by no means out of the woods.
    NASA, NOAA, and the Naval Research Laboratory report that 
last year's ozone hole grew to 10.9 million square miles, an 
area larger than all of North America and the second largest 
ever reported.
    The Montreal Protocol depends on its 187 ratifying 
countries to comply with mandatory phaseouts of ozone-depleting 
substances. With little enforcement mechanism, if any single 
Party fails to comply with the regime, the regime may fail. The 
treaty allows for exemptions to its chemical use bans in 
situations where the chemicals are considered to be of critical 
use. Clearly, it makes sense to allow some exemptions to an 
all-out ban, but exemptions have the potential to be abused, 
defeating the effectiveness of the entire regime. Methyl 
bromide is a powerful ozone-depleting gas and we should be 
working to minimize its use.
    In February, the United States was one of 12 nations to 
demand and receive a 1-year critical use exemption for methyl 
bromide from the limits in the Montreal Protocol. According to 
the U.N. environmental program, the exemptions for the 12 
nations total 13,438 metric tons. The U.S. allowance of 8,942 
metric tons is about twice that of all the 11 other countries 
combined, but the administration wants a larger exemption. For 
2006, the Bush Administration seeks to increase our waiver from 
35 percent to 37 percent of the methyl bromide the Nation used 
in 1981. Some accounts suggest that 37 percent exceeds our 
current level of use, permitting this country to actually 
increase emissions.
    Why does the United States need to increase its allowable 
methyl bromide use above the 35 percent of the 1991 baseline 
level that it agreed to in February? What possible economic 
interest can be more important than getting rid of ozone-
depleting substances? We need the best information these 
panelists can give us.
    The threat of ozone depletion is known, it is real, and we 
must uphold our commitment to address it. We need to meet the 
deadline set within the Montreal Protocol, and encourage other 
countries to do the same.
    I thank all of the witnesses for being here. I look forward 
to your testimony and, with that, Mr. Chairman, I yield back.
    Mr. Radanovich [presiding]. Thank you, Mr. Allen. I want to 
make a brief opening statement, then I will allow the others to 
do it as well.
    I want to thank in particular Chairman Hall for calling 
this most important hearing. And I want to first welcome my 
constituent, Paul Wenger, of Stanislaus County. Paul is a 
walnut and almond farmer in my district, and I look forward to 
his testimony. Welcome, Paul.
    The hearing today is about the process taking place within 
the Montreal Protocol with respect to the critical use 
exemptions, or CUEs, from methyl bromide. Many of us were here 
last year when we discussed the uses of methyl bromide, and we 
learned about what to expect during the critical use exemptions 
process at the Montreal Protocol. Now that the process is 
underway, I have some serious doubts with the direction that it 
is headed.
    First, I fear the process has become extremely politicized, 
and that Protocol is moving away from science-based decisions 
given some statements to that effect in the February 2004 T-
Report. Additionally, I've heard some comments from folks from 
the U.S., who have been at these Montreal Protocol meetings, 
who say that International Delegation members have said point 
blank that they are awaiting the election of a new U.S. 
President in order to achieve their agenda within the Protocol.
    I am also disturbed that the goalpost seems to be moving at 
the Protocol. At the most recent meeting of the Protocol, a 
consumption and production limit for methyl bromide was set. 
This was disconcerting because the Protocol itself states CUEs 
should be granted according to consumption and not production. 
So, it doesn't make sense to me for the Protocol to address 
this issue that is outside the terms of the treaty.
    Furthermore, I want to encourage our negotiators to 
continue to fight for a multiple-year CUE. Farmers in the U.S. 
need more certainty and reliability until a reasonable 
substitute can be found than the 1-year CUE that was granted 
recently in Montreal.
    Finally, as many of you know, I have sponsored H.R. 3403, 
which is a bill to ensure the critical uses of methyl bromide, 
as approved by the EPA, are available in the United States 
after the 2005 phaseout of the chemical, regardless of what the 
Protocol decides. I want to make it clear that I am open to 
suggestions and comments regarding my legislation. It certainly 
is not a perfect solution to our CUE concerns, but I still 
believe it opens the discussion to address the difficulties for 
the United States and what it faces at the Montreal Protocol.
    Again, I want to thank Chairman Hall, and will recognize 
Ms. Capps from California.
    Ms. Capps. Thank you, Mr. Chairman. I understand the 
difficulty facing our growing and farming communities with the 
phaseout of methyl bromide. It is important for the production 
of many important farm products, including strawberries and cut 
flowers, both important in my district in California. But as a 
public health nurse, I do worry about methyl bromide's highly 
toxic nature and the harmful effects its continued use poses to 
our ozone layer.
    Methyl bromide is designated a Class I acute toxin by the 
EPA, and is known to be hazardous to the health of farm workers 
who work in the fields where it is applied. In fact, last year, 
in a troubling report, the National Cancer Institute linked 
methyl bromide to increased rates of prostate cancer in product 
handlers. In addition to those directly involved with this 
application, the pesticide is often used in fields that are 
near homes and schools, exposing school children and families 
through air and water pollution, and causing eye and skin 
irritations, dizziness, headaches, and other health-related 
problems. This is an immediate concern for the health of my 
constituents, many of whom live in close proximity to the 
fields where methyl bromide is still in current use.
    In addition to endangering human health, methyl bromide is 
the most powerful ozone-depleting chemical still in use. Its 
continued use will widen the hole in the ozone layer, 
increasing ultraviolet radiation and potentially causing an 
increase in skin cancer and other serious illnesses.
    Fortunately, over the past decade, great progress has been 
made under the Clean Air Act and the Montreal Protocol to 
phaseout production of methyl bromide. Production has been cut 
70 percent in industrialized countries since 1999 under the 
Treaty's timetable. Unfortunately, the administration's recent 
proposal for critical use exemptions would reduce these gains 
and cause methyl bromide production and use to start rising 
again.
    The administration's most recent request totaling 39 
percent greatly exceeds the limits now allowable under the 
Treaty. Importantly, it is far beyond what is actually being 
consumed by methyl bromide users in this country today. 
According to EPA's own data, methyl bromide consumption in 2003 
was just 25 percent of 1991 baseline levels, even though the 
Treaty and the Clean Air Act permit up to 30 percent. In other 
words, Mr. Chairman, methyl bromide users do not even consume 
as much methyl bromide as this administration is seeking for 
them, and that is why this request for increase is so 
troubling. The Bush Administration is again undermining a 
successful international environmental treaty. It also 
continues to punish responsible users in this country who have 
invested time and money into adopting safer alternatives, and 
the administration's actions encourage growers and others to 
continue to use this dangerous pesticide instead of prompting 
them to find safer alternatives.
    Mr. Chairman, since coming to Congress, I have worked to 
find a balance between the needs of growers in my district and 
public health concerns. I have assisted farm groups and key 
stakeholders with their transition away from methyl bromide. In 
California, these growers are employing crop management 
techniques and using other fumigants. More specifically, 
organic growers have proven that fruits and vegetables can be 
grown without pesticides, and that consumers will rush to 
purchase them. From the point of view of protecting 
communities, farm workers and the atmosphere, the only 
acceptable plan should be to continue the phaseout of methyl 
bromide with all deliberate speed. Under no circumstances 
should we adopt legislation that prevents us from achieving 
such a goal.
    Thank you again for holding this hearing, and I do look 
forward to hearing our witnesses.
    Mr. Radanovich. Thank you, Ms. Capps. The Chair recognizes 
Mr. Otter from Idaho.
    Mr. Otter. Mr. Chairman, I am going to submit my formal 
statement for the record, and ask that it be included, and just 
use my time to make a couple of observations, and one of them 
would be that you can't have it both ways. We can't be 
complaining 1 day about all the outsourcing that is going on in 
the United States, all the food processors that happen to be 
moving to Canada and Mexico and other places, and then turn 
around in the same week but a day later and complain about some 
of the tools that our farmers and our producers most 
effectively use, and I suspect that even the outsourcing could 
be handled for flowers and strawberries, and I suspect that 
they would be eventually.
    So, I would hope that we would try to be a little bit 
consistent with a national view and a broader view of what it 
needs to make this country go. And with that, Mr. Chairman, I 
yield back my time.
    [The prepared statement of Hon. C.L. ``Butch'' Otter 
follows:]

 Prepared Statement of Hon. C.L. ``Butch'' Otter, a Representative in 
                    Congress from the State of Idaho

    Thank you, Mr. Chairman, for holding this hearing today. I am glad 
the committee has taken this opportunity to get an update on the 
international discussions regarding the use of methyl bromide. This is 
a timely hearing on an issue that could have a significant impact on 
agriculture production in the United States.
    About this time last year the committee held a hearing on the 
issues associated with methyl bromide. We talked about the importance 
of methyl bromide to many agriculture producers and food processors. 
The importance of this fumigant remains the same, so I won't restate my 
earlier comments. However, I continue to have concerns that American 
efforts to comply with the Montreal Protocol will remove a valuable 
tool for our farmers.
    I said this last year but I will repeat it again. The United States 
enjoys a safe and relatively cheap food supply. If we want to maintain 
that safe and cheap supply, we cannot institute policies that drive 
American producers out of business.
    I remain concerned with the trade and international agreements that 
the United States has signed which allow foreign competitors to use 
products that are disallowed in this country. There is a competitive 
advantage for farmers in countries where methyl bromide is allowed. It 
is unfair to ask our farmers to compete with producers in those 
countries. My concerns with the implementation of existing agreements 
make it very difficult for me to support future agreements that this 
administration is asking the committee to consider.
    Mr. Chairman, I look forward to the testimony from the witnesses. I 
also would like to work with the Committee to find a solution to the 
situation in which the Montreal Protocol has placed American farmers.

    Mr. Radanovich. Thank you, Mr. Otter. Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Chairman. On April 5, 1988, 
President Ronald Reagan signed the Montreal Protocol on 
substances that deplete the ozone layer. On October 26, 1990, 
the House of Representatives voted 401 to 25 to pass the Clean 
Air Act and implement the Montreal Protocol. And then in 1990, 
on November 15, President George H.W. Bush signed into law the 
implementing legislation for the Montreal Protocol. It is a 
remarkable story of bipartisan achievement and environmental 
victory. The United States demonstrated that we were able to 
work together and with the international community to answer an 
environmental problem that threatened the entire planet, and 
for 15 years this bipartisan approach has been working to 
phaseout ozone-depleting chemicals and to protect and restore 
the ozone layer, but now we are told that could change.
    At this subcommittee's hearing on methyl bromide last year, 
we first learned that the Montreal Protocol might be under 
threat by the House Republican leadership. Chairman Barton 
issued what amounted to an ultimatum to the international 
community. He suggested that if these exemptions were not 
issued, this subcommittee would move legislation to grant 
exemptions presumably even if it takes the United States out of 
compliance with the Montreal Protocol. This didn't appear to be 
an idle threat.
    On October 29, 2003, Representative Radanovich introduced 
legislation which would authorize methyl bromide use regardless 
of the Montreal Protocol. This Protocol has the flexibility 
necessary to address appropriate needs for methyl bromide until 
alternatives are identified. We have every reason to believe 
that the exemption process works. After all, the United States 
was a leader in developing and drafting every detail of the 
Protocol. Moreover, it appears that the administration has been 
using questionable numbers to advance its case for exemption, 
and I hope this committee will get the facts straight.
    Today, we are going to hear from David Doniger of the 
Natural Resources Defense Council. Mr. Doniger will testify 
that actual methyl bromide use is far below what industry and 
the administration have insisted they need.
    I want to put into the record, Mr. Chairman, if I might, a 
letter from Senators Jeffords, Sarbanes, Lautenberg, and 
Lieberman, on this important issue.
    Mr. Radanovich. Without objection, so ordered.
    [The information referred to follows:]

    [GRAPHIC] [TIFF OMITTED] T5458.001
    
    [GRAPHIC] [TIFF OMITTED] T5458.002
    
    [GRAPHIC] [TIFF OMITTED] T5458.003
    
    Mr. Waxman. I hope this hearing will demonstrate how unwise 
this approach would be, and will lead members who support 
violating the Montreal Protocol to rethink their position. 
Thank you, Mr. Chairman.
    Mr. Radanovich. Thank you, Mr. Waxman. Ms. Bono.
    Ms. Bono. Thank you, Mr. Chairman. I will waive my opening 
statement in the hope that I get more time for questioning.
    Mr. Radanovich. Certainly. Thank you very much. Mr. 
Whitfield.
    Mr. Whitfield. I will waive my opening statement.
    Mr. Radanovich. Thank you. Anybody else wanting to do an 
opening statement? Mr. Norwood.
    Mr. Norwood. Thank you very much, Mr. Chairman. I 
appreciate your holding this important hearing today. I 
obviously take great interest in today's subject for all the 
farmers of the Ninth District of Georgia, and that is my 
responsibility as well as what is in the best interest of this 
country. I would put at the very end of my priority list the 
prosperity of farmers in developing countries who are getting a 
helping hand from the Montreal Protocol in phasing out their 
use of methyl bromide to the detriment of all of our farmers.
    I would like to remind everyone here that the use of methyl 
bromide has already been reduced by approximately 60 to 70 
percent from the 1991 base levels, but we have still not put a 
finger on good economic alternatives for our farmers.
    In reading through the testimony for today's hearing, I 
noticed an excellent statement by Mr. Bair, where he said, ``If 
agriculture improved processing use of methyl bromide are very 
harmful to the environment, that it should be banned globally 
on the same date.'' And I couldn't agree with Mr. Bair more, it 
is simply not fair to put pressure on our farmers to cutoff 
their use of methyl bromide earlier than their competitors in 
the developing countries.
    I am pleased to be a co-sponsor of H.R. 3403, sponsored by 
my friend from California, Mr. Radanovich. This bill restores 
some sovereignty to the U.S. and our farmers, by authorizing 
the production of methyl bromide in the same amount requested 
by the United States under the critical use exemption process 
of the Montreal Protocol, even if the Parties to the Protocol 
do not approve of the entire amount.
    Today, I encourage my colleagues on the subcommittee to 
listen very closely to how our farmers, American farmers and 
growers are being treated by the Montreal Protocol. If they are 
being treated as I suspect, it is time we get out of this 
agreement.
    Thank you, Mr. Chairman, and I yield back what time I have.
    Mr. Hall. The Chair recognizes the gentleman from 
California, Mr. Issa.
    Mr. Issa. Thank you, Mr. Chairman. Thank you for holding 
this hearing. I will put most of my formal opening statement in 
the record, to save time, but I would like to note that on the 
second panel, Dr. Michael Mellano will be testifying, and he 
has been a key resource for those of us who need to learn more 
about agriculture. It is the largest part of my district. Dr. 
Mellano not only operates 625 acres in Southern California, 
most of it in my district, but the type of area he is in, the 
nursery business and the like, is California's fourth largest 
industry, and it is the largest agricultural producer in my 
district. And as we all agree that methyl bromide does need to 
be phased out, I want to join with the other members of the 
subcommittee in recognizing that it should have been, and 
should be done, at a single time, and it should be done when 
science permits alternatives, something that I think all of us 
on this panel can agree with. And with that, I yield back, and 
put the rest in the record.
    Mr. Hall. Thank you. I recognize myself for as much time as 
I may require, and I will not require too much.
    The issue of methyl bromide is, of course, obviously very 
important to many members of the committee and to many members 
of the House. This is the second hearing we have had on this 
issue in a year, which I think attests to the importance. And I 
want to thank Ranking Member Boucher, and the entire staff over 
there, for their good assistance and cooperation, which speaks, 
I think, to the bipartisan nature of the issue that we are 
discussing.
    We need to gain a fuller understanding of the current 
status of methyl bromide under the Montreal Protocol and the 
Clean Air Act. We also need to understand the progress being 
made to develop effective and economically competitive 
alternatives to methyl bromide.
    The use of methyl bromide is critically important to many 
of our farmers and others involved in the Nation's agricultural 
businesses. This is due to its superiority to existing 
alternatives, and many applications and lack of alternatives 
are a substitute for many of these applications.
    As we on this committee are already keenly aware, the 
Montreal Protocol requires the phaseout of methyl bromide by 
2005, except for certain critical uses. It is on the critical 
use exemptions under the Protocol that we will focus much of 
our attention here today, however, we are just as keenly 
interested in the progress being made to provide effective and 
economically competitive alternatives to methyl bromide, and 
want to hear what the witnesses have to say about them.
    We asked representatives of the administration to come here 
today to provide an update on the activities under the Protocol 
with regard to methyl bromide. I understand members are very 
interested in how the administration developed the 
recommendation for the critical use exemption for 2005. Members 
want to know how and why the United States' request was scaled 
back. We are also asking these witnesses to report on the 
current status of international negotiations under the 
Protocol, the results of the meetings in Geneva last week in 
preparing for the meeting of the parties, and to brief us on 
the status of the upcoming meeting of the Parties to the 
Montreal Protocol scheduled for this fall. As well, we are 
interested in learning more about the use of methyl bromide 
outside the United States. It is obvious that the uncertainty 
over future availability of methyl bromide has caused great 
concern.
    Therefore, as you give your oral testimony and answer our 
questions from both sides, please consider ways that this 
committee might help. We need your help to ensure that the U.S. 
obtains an adequate critical use exemption under the Protocol. 
That is the reason we have you here, you men and women who know 
more about this than we do. That is the way we write 
legislation, and you are giving us a base to go to when we get 
ready to try to get to the finality of it.
    After today's hearing, I fully expect that my colleagues 
and myself will have additional questions, and it is my 
intention to leave the record open for a record period of time, 
to accommodate the sending and receiving of questions and 
answers, as well as other information and testimony that the 
subcommittee may receive. So, you all probably will be getting 
other letters, and we ask you to expedite the return of them, 
if you possibly can. It would be very helpful.
    As was emphasized in last year's hearing on methyl bromide, 
we need to let the facts tell the story, and let any policy 
judgments flow from accurate information. Any additional action 
by the committee will be based to a large part on the 
information we hear today and from the follow-up information we 
receive from witnesses. In the House of Representatives, the 
matter of the Montreal Protocol in Title 6 of the Clean Air Act 
is within the sole jurisdiction of the Energy and Commerce 
Committee, and this subcommittee in particular.
    So, we are all aware that the Montreal Protocol is an 
international treaty that was ratified by the Senate in 1986 
and 1988. This Treaty has been amended two times and ratified 
by the Senate in 1991 and 1994. Protection of our Nation's 
agricultural business is serious business. You can be assured 
that the subcommittee is going to approach this issue and any 
other issue respecting the Treaty signed by President Reagan 
and by President Bush Sr.
    With that, I will yield back whatever time I had, and we 
will now go to our distinguished witnesses.
    [Additional statements submitted for the record follow:]

 Prepared Statement of Hon. Steve Buyer, a Representative in Congress 
                       from the State of Indiana

    In 1987 President Ronald Reagan signed the Montreal Protocol, an 
international treaty designed to eliminate the production of ozone-
depleting substances. The implementation of the Protocol has maintained 
a delicate balance between the need to phase out substances, such as 
methyl bromide, which are harmful to the environment while protecting 
the agricultural communities of the signatory nations by identifying 
critical use exemptions from phase-outs where adequate substitutes do 
not yet exist. This process melds environmental and economic factors in 
order to cost effectively manage our way towards feasible solutions. 
The current process works and has been successful for the past 20 
years.
    I commend my colleagues on the Committee for maintaining careful 
oversight of this process. It is important that we ensure that our farm 
community is protected and that adequate supplies of compounds for 
fumigation of crops, milling and storage be available. In addition, it 
is also important that we fairly apply the laws we have adopted, 
whether it be the Montreal Protocol, or the domestic implementation 
laws under the Clean Air Act, so that those industries who have 
invested in these new technologies have the opportunity to earn a 
return on their investment.
    Over the last 20 years, U.S. businesses, including some in my 
district, have invested billions of dollars to develop environmentally 
acceptable alternatives to the ozone-depleting substances regulated by 
the Protocol, including methyl bromide.
    The US has shown a strong commitment to the success of the Montreal 
Protocol. The committee should stay focused on ensuring that the U.S. 
remains in compliance with the Protocol so as not to jeopardize 
billions of dollars in past investments and discourage additional 
investments in the future. It is possible for the U.S. to protect 
agricultural interests while maintaining the success of other key 
industries within the context of the Montreal Protocol provisions.
    Here at home, the committee should also ensure that our government 
agencies, including the Department of Agriculture and the Environmental 
Protection Agency, are doing all they can to assist those reliant on 
methyl bromide to make significant progress in identifying alternatives 
to this compound by providing transition assistance, such as education, 
and, in the case of EPA, completing its allocation rule on these 
critical use exemptions.
    With the help of this committee, I believe we can achieve 
significant reductions in methyl bromide use while protecting the 
interests of our agriculture community.
    Thank you Mr. Chairman
                                 ______
                                 
 Prepared Statement of Hon. Joe Barton, Chairman, Committee on Energy 
                              and Commerce

    I want to welcome our witnesses today and thank Chairman Ralph Hall 
for conducting this follow-up hearing concerning the legal status of 
methyl bromide.
    I also want to acknowledge the strong interest of several members 
of this Committee in having today's hearing. I understand that many of 
my colleagues have constituents who have used methyl bromide in farming 
and other agricultural uses for many years and who are greatly 
concerned with the phase-out of this broad-spectrum fumigant under the 
Montreal Protocol and the Clean Air Act.
    The roots of this situation extend back to 1986 when the United 
States ratified the Vienna Convention. This action was followed by 
ratification of the Montreal Protocol in 1988 and enactment of Title VI 
of the Clean Air Act in 1990. These actions set the legal table, so to 
speak, for subsequent decisions and actions relating to methyl bromide. 
This committee has sole jurisdiction over this matter in the House of 
Representatives and it takes that responsibility seriously. We are 
responsible for providing oversight to ensure that the integrity of the 
Montreal Protocol and the Clean Air Act are preserved and these laws 
are appropriately implemented. However, this committee is also 
obligated to make sure that our farmers and others in agriculture have 
the tools necessary to protect their crops and maintain their domestic 
and international competitiveness. This includes making sure that they 
have sufficient access to methyl bromide and to alternatives that are 
adequate and cost effective as substitutes prior to reducing our 
dependence on methyl bromide. We understand that EPA is currently 
working on registering several products that may help replace methyl 
bromide in some applications. We are anxious to get a progress report 
on these alternatives and to learn from the agriculture community their 
experiences with these products as they become available.
    We are well aware that upcoming decisions may be critical regarding 
methyl bromide use in this country. So now is the time to ask questions 
and to probe deeply. We need to get all the facts on the table and to 
hear from our Administration and a variety of perspectives in the 
private sector. I look forward to the testimony of our witnesses.

    Mr. Hall. We have with us Claudia McMurray, Deputy 
Assistant Secretary for Environment, Bureau of Oceans and 
International Environmental and Scientific Affairs, of the 
State Department. We thank you and those over at the State 
Department for your time here today.
    We have the Honorable Jeffrey R. Holmstead, Assistant 
Administrator for Air and Radiation, Environmental Protection 
Agency, an important witness and important testimony here, and 
Dr. Rodney J. Brown, Deputy Under Secretary for Research, 
Education and Economics, accompanied by Mr. Burleson Smith, 
Director, Pest Management Policy, Department of Agriculture.
    With that, I want to start out and recognize Ms. McMurray 
for, we hope, 5 minutes, but just stay as close as you can to 
what you really need to get your word over to us, and then we 
will open up and have a chance to answer more fully when 
questions come your way. Ms. McMurray.

STATEMENTS OF CLAUDIA McMURRAY, DEPUTY ASSISTANT SECRETARY FOR 
 ENVIRONMENT, BUREAU OF OCEANS AND INTERNATIONAL ENVIRONMENTAL 
  AND SCIENTIFIC AFFAIRS, DEPARTMENT OF STATE; ACCOMPANIED BY 
HON. JEFFREY R. HOLMSTEAD, ASSISTANT ADMINISTRATOR FOR AIR AND 
 RADIATION, ENVIRONMENTAL PROTECTION AGENCY; RODNEY J. BROWN, 
 DEPUTY UNDER SECRETARY FOR RESEARCH, EDUCATION AND ECONOMICS, 
 DEPARTMENT OF AGRICULTURE; AND BURLESON SMITH, DIRECTOR, PEST 
          MANAGEMENT POLICY, DEPARTMENT OF AGRICULTURE

    Ms. McMurray. Thank you, Mr. Chairman. If the subcommittee 
would permit, before I start my opening statement, there was 
mention made of a witness leaving a subcommittee hearing of 
this committee early last week. It was me. And just to 
underscore the importance of the Montreal Protocol to this 
administration, I was trying to catch a plane to go to the 
meeting of the Montreal Protocol. So, my apologies. I have no 
plane to catch today.
    Mr. Chairman, members of the subcommittee, thank you for 
the opportunity to deliver this statement to update the 
subcommittee concerning the phaseout of methyl bromide under 
the Montreal Protocol.
    Mr. Chairman, as you know, I make this statement on behalf 
of the Department of State, Department of Agriculture, and the 
Environmental Protection Agency. I have a longer statement that 
I would like to submit for the record, with your permission.
    Mr. Chairman, before I discuss the specifics of our 
activities concerning methyl bromide, I would like to spend a 
moment reviewing the broader progress the United States and its 
global partners are making to repair the stratospheric ozone 
layer. Some of that has already been mentioned in opening 
statements here today.
    I do this because the global phaseout of ozone-depleting 
chemicals under the Montreal Protocol is seen around the world 
as an unparalleled triumph of sound science, economics, and 
diplomacy. Actions we are taking in the United States and that 
are also taking place worldwide serve to protect human health, 
while still seeking to meet critical needs that the Protocol 
recognizes.
    The United States continues not only to meet all of its 
obligations under the Montreal Protocol, but also to exert 
strong leadership in phasing out all ozone-depleting 
substances. In fact, in the United States, we have already 
phased out nearly 97 percent of all ozone-depleting substances 
controlled by the Protocol.
    We were ahead of the curve globally in negotiating the 
original Montreal Protocol under President Reagan. President 
George H.W. Bush continued these efforts in 1991 and 1992 by 
accelerating the phaseout of ozone-depleting substances. During 
his administration, the list of regulated substances was 
expanded to include a number of newly identified ozone-
depleters, including methyl bromide. President George W. Bush 
has maintained the legacy of strong U.S. support for the 
Protocol, the goal of which is to protect public health. On 
that score, we are clearly moving in the right direction.
    An evaluation required by legislation estimated that full 
implementation of the Montreal Protocol will save 6.3 million 
U.S. lives from skin cancer between 1990 and the year 2165. 
Skin cancer is a preventable disease that kills one American 
every hour. The Montreal Protocol has helped us make great 
strides in combatting this threat to health by controlling the 
chemicals that damage stratospheric ozone.
    Methyl bromide, as you have heard, is one of those 
chemicals. As the world's largest producer and consumer of this 
substance, the United States has seen its wide use for decades. 
It has also been widely used around the world. Growers and 
other users find it efficacious and are now using it 
efficiently.
    While there are alternatives available today for many uses 
in particular situations, there is no alternative that can 
operate as effectively as methyl bromide for all crops in all 
situations on which methyl bromide is used. Nevertheless, the 
U.S. has made tremendous progress over the last decade by 
phasing out over 60 percent of our consumption of methyl 
bromide. We have achieved these reductions through action on 
several fronts. USDA has spent approximately $150 million in an 
aggressive research program to find alternatives to this 
chemical. The private sector is actively conducting research as 
well. Finally, since 1997, EPA has expedited review of methyl 
bromide alternatives, and has registered a number of chemical 
and use combinations to effect that change.
    While we continue our domestic programs aimed at 
facilitating the phaseout of methyl bromide, the international 
process has recognized that there is a profound difference 
between it, methyl bromide, and other industrial chemicals that 
have been controlled in the past under the Montreal Protocol. 
Accordingly, the Parties created three types of exemptions to 
acknowledge the challenges that methyl bromide presents. We 
need not discuss the first two today. One is for emergencies, 
one is for quarantine and pre-shipment of goods in trade. At 
this hearing we focus our efforts on the critical use 
exemption, or CUE, which is in some ways similar to a safety 
valve that is available for chlorofluorocarbons, or CFCs, under 
the Protocol, and that exemption is called the essential use 
exemption.
    The Protocol's criteria allow any developed country that is 
a Party to the Protocol to seek an exemption from the 2005 
phaseout, if it determines that the absence of methyl bromide 
would cause a significant market disruption. The Parties must 
agree that the nominating Party has demonstrated that there are 
no technically or economically viable alternatives for the use 
in the context of the application, and that the Party continues 
to make efforts to find alternatives for the use and to limit 
emissions.
    The United States was one of 13 countries that submitted 
nominations for a critical use exemption for the year 2005. The 
amount of methyl bromide nominated by the United States was 39 
percent of our 1991 baseline for 2005, plus a supplemental 
request of 2 percent. For 2006, we have submitted a request of 
37 percent of the baseline.
    I am happy to report that for the first year following the 
phaseout--that is, 2005--the U.S. request for critical uses met 
with success. At an Extraordinary Meeting of the Parties to the 
Montreal Protocol held in Montreal in March 2004, the Parties 
granted nearly 90 percent of the U.S. request, and will 
consider our request for the additional 2 percent supplemental 
request for use in 2005. Under the agreement reached earlier 
this year, U.S. growers will have access to 35 percent of the 
1991 baseline use amount in 2005, with up to 30 percent coming 
from new production and the remainder coming from inventories.
    This agreement on critical use exemptions for 2005 was the 
result of a concerted U.S. effort, including extensive 
diplomatic outreach at the highest levels of the State 
Department to gain support from the other Montreal Protocol 
Parties for our request. This was by no means an easy process. 
In fact, the Parties could not agree on CUEs at their regular 
annual meeting in November 2003, and had to, for the first 
time, hold what is called an Extraordinary Meeting to resolve 
the issue.
    We are now working actively with other countries on the 
U.S. request for 2006 and our supplemental request for 2005, 
both of which will be considered at the next meeting of the 
Parties in November 2004, in Prague. Last week, I led the U.S. 
delegation to the meeting of the Montreal Protocol Open-Ended 
Working Group in Geneva, a meeting that was designed to allow 
an exchange of views on all issues in preparation for the 
November meeting of the Parties. From our perspective, the 
Open-Ended Working Group meeting was successful, and gave us 
the opportunity to begin building support for our CUE request, 
and for improvements in the process by which the Montreal 
Protocol's technical body, the Methyl Bromide Technical Options 
Committee, or MBTOC, reviews CUE nominations.
    Mr. Chairman, I would now like to draw the subcommittee's 
attention to the groundbreaking aspect of the decision we 
reached at the Extraordinary Meeting of the Parties in Montreal 
earlier this year.
    As I mentioned earlier, the Montreal Protocol Parties have 
already agreed to a U.S. critical use exemption for 2005 
amounting to 35 percent of the 1991 baseline level. Up to 30 
percent can come from new production, with the remainder coming 
from existing inventories. This new approach is important 
because it limits the new manufacture of this ozone-depleter 
for the very first time, and it calls also for a drawdown in 
inventory to assure adequate supply for our farmers.
    EPA is currently in the final stages of preparing a 
proposal to allocate these amounts so that through the Notice 
and Comment rulemaking process, we will be able to engage 
stakeholders in designing a workable and fair approach to 
allocation. The use of inventories will be factored into this 
allocation process.
    Mr. Chairman and members of the subcommittee, in 
conclusion, my testimony should indicate the level of 
importance the administration places on taking action on methyl 
bromide in a manner that protects public health while still 
meeting the needs of our farmers. We have done this without 
doing harm to the unqualified success story of the Montreal 
Protocol.
    One delegate at our Geneva meeting last week recognized 
this by saying, despite our recent difficulties, ``the Protocol 
is, indeed, alive and well.'' I believe that our efforts to 
work with other countries to solve this problem have helped 
make that statement a reality. I also believe that through 
continued work with other Protocol Parties, we will achieve an 
outcome on methyl bromide at the upcoming Meeting of the 
Parties that is consistent with the Protocol's overall goal, 
while still ensuring that critical needs are met.
    I thank you for this opportunity to testify before the 
subcommittee on behalf of these three Agencies, and I would be 
happy to answer any of your questions, as would my colleagues. 
Thank you.
    [The prepared statement of Claudia McMurray follows:]

Prepared Statement of Claudia McMurray, Deputy Assistant Secretary for 
   Environment, Bureau of Oceans and International Environmental and 
                Scientific Affairs, Department of State

    Mr. Chairman, Members of the Subcommittee, thank you for the 
opportunity to deliver this methyl bromide statement on behalf of three 
federal agencies--the Department of State, the Department of 
Agriculture, and the Environmental Protection Agency. We realize that 
methyl bromide, and its phase out under the Clean Air Act and Montreal 
Protocol are issues of great importance to many of you and your 
constituents. While the focus of the statement is on methyl bromide, I 
would like to begin by providing a brief overview of our ongoing 
efforts to protect the ozone layer under the Clean Air Act (CAA) and 
the Montreal Protocol.
    The global phase out of ozone-depleting chemicals is an 
unparalleled triumph of sound science, economics, and diplomacy. It 
rests on an overwhelming consensus within the world science community, 
and enjoys near universal participation. One hundred and eighty-seven 
developed and developing nations are now Parties to the Montreal 
Protocol and have committed to measurable targets and timetables for 
the complete phase out of chemicals that damage the ozone layer.
    Since the Montreal Protocol's inception in 1987, the United States 
has exerted strong leadership in phasing out all ozone depleting 
substances. The United States continues not only to meet all of its 
obligations under the Montreal Protocol, but, in fact, has already 
phased out the consumption of nearly 97% of all ozone-depleting 
substances controlled by the Montreal Protocol.
    From the beginning, the establishment of clear targets for all 
countries, and the flexibility allowed in implementation, have helped 
create broad bipartisan support at home for the Montreal Protocol's 
mission to protect the ozone layer. The United States was an active 
participant in negotiating the original Montreal Protocol under 
President Ronald Reagan. President George H. W. Bush continued these 
efforts in 1991 and 1992 by accelerating the phase out of ozone-
depleting substances. During his Administration, the list of regulated 
substances was expanded to include a number of newly-identified ozone 
depleters, including methyl bromide. President George W. Bush has 
maintained the legacy of strong U.S. support for the Protocol.
    The goal of the Montreal Protocol and the Clean Air Act is to 
protect public health from harmful UV radiation. On that score, we are 
clearly moving in the right direction. In fact, the legislative 
evaluation required by the Clean Air Act's section 812 estimated that 
full implementation of the Montreal Protocol will save 6.3 million U.S. 
lives from skin cancer between 1990 and 2165. And, we are working with 
groups like the American Academy of Dermatology and the National 
Council for Skin Cancer Prevention in education programs like SunWise 
Schools to further reduce risks of skin cancer, especially for kids. 
EPA's sun safety programs were recognized in October 2003 by the Cancer 
Research and Prevention Foundation's Congressional Families Action for 
Cancer Awareness. Because skin cancer is a preventable disease that 
kills one American every hour, it is the government's obligation to 
provide people with the information they need to mitigate the impacts 
of exposure to the sun, in addition to controlling the chemicals that 
damage stratospheric ozone.
    Our successes so far do not mean that our task is done. In fact, 
the 2002 Scientific Assessment of Ozone Depletion, a comprehensive 
overview of the state of the ozone layer involving the work of hundreds 
of atmospheric scientists, life scientists, and researchers worldwide, 
with significant U.S. participation, found that the ozone layer is 
susceptible to damage because stratospheric concentrations of ozone-
depleting chlorine is at or near its peak, while bromine, although 
still increasing, may peak over the next several years. In addition, 
seasonal damage to the ozone layer resulting in the ``ozone hole'' in 
the Antarctic continues; in the 2003 season the hole reached its second 
largest extent, covering an area roughly the size of North America. 
Ultimate recovery of the ozone layer--and the consolidation of all the 
gains made so far--depends on our will, and that of the global 
community of Parties, to finish the job.
    Staying the course matters to public health and to the ozone layer, 
but it also matters to the many businesses who took the risk of 
investing heavily in alternatives that do not damage the ozone layer. A 
recent letter to EPA from companies making this choice have built a $10 
billion dollar business in trade with ozone-safe American products and 
technologies that could be at risk if the United States were to take 
action inconsistent with its commitments under the Montreal Protocol. 
For all these reasons, this Administration remains committed to 
finishing the job of protecting the ozone layer started by President 
Ronald Reagan.
    That brings us to the topic of today's hearing, methyl bromide. We 
know a number of things about this chemical. First, it is a broad-
spectrum restricted use biocide that is highly effective in killing 
pests that are of concern to U.S. agriculture. Second, the United 
States has been the world's largest producer and consumer of this 
substance. Third, methyl bromide has been in wide use in the United 
States for decades, and users find it efficacious and are using it 
efficiently. Fourth, while there are alternatives available today for 
many uses in many situations, there is no alternative that can operate 
as effectively as methyl bromide in all the crop situations on which 
methyl bromide is used.
    As to methyl bromide's current regulatory status under the Clean 
Air Act, a little history is vital to understanding where we are now. 
The 1990 Clean Air Act required EPA to phase out the production and 
import of any newly identified substance with a significant potential 
to damage ozone within seven years of listing, without exceptions or 
exemptions. In 1991, the EPA received a petition to take this action 
with respect to methyl bromide and promulgated a rule which established 
a phase out date of 2001 in the United States. In an effort to address 
both the environmental concern and an agricultural concern that a 
unilateral U.S. phaseout in 2001 would put the United States at a 
disadvantage among other developed nations that are agricultural 
competitors of the U.S., successive U.S. delegations to the Montreal 
Protocol pushed the global community to adopt the U.S. phase out date 
of 2001. In 1997, the United States succeeded in moving developed 
countries from their initial position of only a freeze in production 
and import at historic levels to a phase out of methyl bromide in 2005 
with interim reductions in 1999, 2001 and 2003. Given that progress, 
and the desirability of ensuring harmonized requirements, Congress 
moved to amend the CAA in 1998 to conform the U.S. phase out schedule 
with that faced by other developed country Parties to the Montreal 
Protocol, resulting in the phase out schedule we have today. This 
schedule called for a freeze in methyl bromide production and 
consumption for developed countries in 1995, a 25% reduction by 1999, a 
50% reduction by 2001, a 70% reduction by 2003, and a full phaseout by 
2005, subject to certain exemptions.
    Users have and are continuing to make progress in reducing the use 
of methyl bromide, in fulfillment of our obligations under the Montreal 
Protocol, by using newly approved substitutes and implementing 
innovative new technologies and practices. Under the U.S. Department of 
Agriculture's (USDA) Methyl Bromide Alternatives Program (Methyl 
Bromide Alternatives at http://www.nps.ars.usda.gov), agricultural and 
forestry leaders from private industry, academia, state, and federal 
agencies have come together to develop viable alternatives to methyl 
bromide. This research program has taken into account input from 
federal agencies as well as extensive private sector research and trial 
demonstrations of alternatives to assess the problem, formulate 
priorities, and implement state-of-the-art research.
    Over a period of 10 years, through 2003, the USDA Agricultural 
Research Service has spent approximately $150 million in an aggressive 
research program to find alternatives to methyl bromide. Through the 
Cooperative State Research, Education, and Extension Service, USDA has 
provided an additional $15.8 million since 1993 to state universities 
for methyl bromide replacement research and education. These federally 
supported research activities are in addition to extensive private 
sector efforts.
    Nearly 80 percent of pre-plant methyl bromide soil fumigation use 
is in a limited number of crops. Much of the federal government's pre-
plant effort has focused on strawberries, tomatoes, ornamentals, 
peppers, and nursery crops, (forest, ornamental, strawberry, pepper, 
tree, and vine), with special emphasis on tomatoes in Florida and 
strawberries in California as model crops. Methyl bromide users have 
contributed field plots, plant material, and equipment for research 
trials on potential alternatives.
    At the same time, innovative U.S. technologies and practices allow 
our growers to make the methyl bromide we do use go as far as possible 
toward controlling key pests. The reductions in U.S. consumption over 
the past few years have been successfully accomplished in part because 
manufacturers and users have found that it is possible to dilute methyl 
bromide with other pest-control compounds, like chloropicrin, and still 
maintain the pest control effectiveness of the material. Further, 
highly effective application technologies, involving the deep injection 
of gaseous methyl bromide into cultivated soil, mean that more methyl 
bromide remains in the ground for a longer period of time, where it can 
do its important work of pest control.
    Another important area of emphasis is our responsibility to help 
identify, register, and implement safe and effective alternatives. 
Understanding the importance of this in the phase out of methyl 
bromide, EPA has since 1997 made the registration of alternatives to 
methyl bromide its highest registration priority. Even under the new 
``fee-for-service'' system, EPA is committed to giving methyl bromide 
alternatives priority. As one incentive for the pesticide industry to 
develop alternatives to methyl bromide, EPA has worked to reduce the 
burden of data generation to the extent feasible while still ensuring 
that the Agency's registration decisions meet Federal safety standards. 
Where appropriate from a scientific standpoint, EPA has refined the 
data requirements for a given pesticide application, thus facilitating 
the research and development process for methyl bromide alternatives. 
Furthermore, EPA scientists routinely meet with prospective methyl 
bromide alternative applicants, counseling them through the pre-
registration process to increase the probability that the data are done 
right the first time, thus minimizing delays.
    Our efforts have paid off in some areas. Since 1997, EPA has 
registered a number of chemical/use combinations as part of its 
commitment to expedite the review of methyl bromide alternatives. While 
there is no silver bullet among them, they are nonetheless an important 
part of our overall methyl bromide strategy. They include:

2000: Phosphine to control insects in stored commodities;
2001: Indian Meal Moth Granulosis Virus to control Indian meal moth in 
        stored grains
2001: Terrazole to control pathogens in tobacco float beds
2001: Telone applied through drip irrigation--all crops
2002: Halosulfuron-methyl to control weeds in melons and tomatoes
2003: Trifloxysulfuron sodium as an herbicide for tomato transplants in 
        Florida and Georgia
2004: Fosthiazate as a pre-plant nematocide for tomatoes
2004: Sulfuryl fluoride as a post-harvest fumigant for stored 
        commodities
    In addition, EPA is currently reviewing several applications for 
registration as methyl bromide alternatives, including iodomethane as a 
pre-plant soil fumigant for various crops, and dazomet as a pre-plant 
soil fumigant for strawberries and tomatoes. While these activities are 
promising, environmental and health issues with alternatives must be 
carefully considered to ensure we are not just trading one 
environmental problem for another. As required by the Food Quality 
Protection Act, EPA is currently conducting a tolerance reassessment 
and reregistration of methyl bromide to ensure that its registered uses 
meet today's health and safety standards. To facilitate this review, 
EPA expects to release the preliminary risk assessment for methyl 
bromide and other soil fumigants this fall for public review and 
comment. EPA is also conducting a cluster assessment of a group of 
pesticides known as soil fumigants, to include methyl bromide. Because 
soil fumigants are used in similar ways and present potential risks 
from similar paths of exposure, it makes sense to review the fumigants 
together rather than on separate time schedules. To address this, we 
are taking a comprehensive approach.
    In that regard, ongoing research on alternate fumigants is 
evaluating ways to reduce emission under various application regimes 
and examining whether commonly used agrochemicals, such as fertilizers 
and nitrification inhibitors, could be used to rapidly degrade soil 
fumigants. In addition, EPA has adopted a comprehensive approach to 
evaluating the currently registered and pending soil fumigants. A 
preliminary risk assessment which includes all of the current and 
pending soil fumigants is expected to be released this Fall for public 
comment with stakeholder discussion of the potential risk management 
options to occur during 2005. This process will assure a balanced, 
comprehensive and transparent evaluation of the risks and benefits of 
all fumigation options.
    While we continue our domestic programs to facilitate the phase-out 
of methyl bromide, the Parties to the Montreal Protocol recognized that 
widespread use and elusive feasible alternatives to methyl bromide made 
its phase-out more difficult than other chemicals controlled in the 
past under the Montreal Protocol. Accordingly, the Parties to the 
Montreal Protocol created three types of exemptions for methyl bromide.
    First, the Parties recognized that methyl bromide is vitally needed 
in trade to ensure that shipments do not contain harmful and invasive 
pests that could be transported with commodities and introduced into 
new areas. Thus, they provided an exemption for quarantine and 
preshipment uses. As a consequence, while countries have committed to 
find alternatives and to limit the emissions and use of methyl bromide 
to those applications where its use is necessary, the production and 
import for these uses can continue during and after the phase out. On 
January 2, 2003, EPA published the Final Rule fully activating this 
exemption.
    The second methyl bromide exemption, covering emergency situations, 
is an exemption from the phase out for the production or import of 20 
tonnes of methyl bromide per event. This exemption can be activated by 
a Party to address what it considers to be an emergency. The real 
possibility of emergency needs that cannot be anticipated, like anthrax 
contamination, makes it especially vital for countries to have the 
flexibility to make methyl bromide rapidly available for such needs.
    Third, the Parties created the critical use exemption (CUE), which 
is in some ways similar to the other safety valve available under the 
Montreal Protocol for CFCs, the essential use exemption. The Protocol's 
criteria allow any developed country that is a Party to the Protocol to 
seek an exemption from the 2005 phase out if it determines that the 
absence of methyl bromide would cause a significant market disruption. 
The Parties must agree that the nominating Party has demonstrated that 
there are no technically or economically feasible alternatives for the 
use in the context of the application and that the Party continues to 
make efforts to find alternatives for the use and to limit emissions. I 
want to focus on this exemption today, because 2005 will be the first 
year that the U.S. and other countries will make use of this provision.
    The United States was one of 13 countries that submitted 
nominations for a critical use exemption for the year 2005. Some 
national requests were very small, covering only one use, and some were 
large, covering 10 or more uses. The U.S. nominated the following 16 
crops and uses: tomatoes, commodity storage, cucurbit, eggplant, food 
processing, forest tree seedling nursery, ginger, orchard nursery, 
orchard replant, ornamental nursery, pepper, strawberry, strawberry 
nursery, sweet potato, nursery seed bed trays, and turf grass. The 
amount of methyl bromide nominated by the United States for these uses 
was 9,920,965 kilograms for 2005, and 9,722,546 kilograms for 2006--
this translates into 39% and 37% of our 1991 baseline level for methyl 
bromide uses.
    I am happy to report that for the first year following the phase 
out, 2005, the U.S. request for critical uses met with success. At an 
Extraordinary Meeting of the Parties to the Montreal Protocol, held in 
Montreal in March 2004, the Parties granted nearly 90% of the U.S. 
request, and will consider a supplemental request for an additional 2% 
of our baseline for use in 2005. Under the agreement reached earlier 
this year, U.S. growers and others with critical uses will have access 
to at least 35% of the 1991 baseline use amount in 2005, with up to 30% 
coming from new production and importation and the remainder from 
existing inventories. I will discuss the issue of inventories in 
greater detail later in this testimony.
    This agreement on critical use exemptions for 2005 was the result 
of a concerted U.S. effort to gain support from the other Montreal 
Protocol Parties for our request. This was by no means an easy process. 
In fact, the Parties could not agree on CUEs at their regular annual 
meeting in November 2003 and had to for the first time in the 
Protocol's history set up an Extraordinary Meeting of Parties (EMOP) to 
resolve this issue.
    In the months leading up to the Extraordinary Meeting, the 
Department of State coordinated a diplomatic outreach effort to ensure 
that other Parties recognized the importance of this issue to the 
United States. We held bilateral meetings with key countries involved 
in the CUE process and, through our Embassies, made demarches on this 
issue to nearly 50 Montreal Protocol Parties. At our request, an ad hoc 
meeting of a small number of Parties was held in Buenos Aires in 
February 2004 to informally consider ways to resolve the impasse. This 
extensive outreach was successful in making clear the technical and 
economic basis for the U.S. CUE request and in gaining the support of 
many countries at the March 2004 EMOP.
    We are now working actively with other countries on the U.S. CUE 
request for 2006 and our supplemental request for 2005, which will be 
considered at the next Meeting of Parties in November 2004 in Prague. 
Last week, I led the U.S. delegation to the meeting of the Montreal 
Protocol Open-Ended Working Group (OEWG), which was held in Geneva from 
July 13-16. This meeting is an interim session that allows for an 
exchange of views on all issues in preparation for the November 
meeting. From our perspective, the OEWG meeting was successful and 
allowed us to begin building support for our current CUE requests and 
for our efforts to improve the process by which the Montreal Protocol's 
technical body, the Methyl Bromide Technical Options Committee (MBTOC), 
reviews CUE nominations.
    The meeting provided a good opportunity to explain to other Parties 
and to the MBTOC the economic and technical rationale for our CUE 
request. During formal and informal sessions, the U.S. delegation 
highlighted the extensive process through which we developed our CUE 
request in compliance with Montreal Protocol criteria. I believe this 
exchange on extremely technical issues will provide dividends as other 
countries and the MBTOC continue to review our CUE nominations.
    --
    We also made major progress at the OEWG on the important issue of 
improving the future operations of the MBTOC. During extensive 
discussions on this issue, which included a three-day ad hoc meeting 
prior to the start of the OEWG, the U.S. delegation pressed for 
improvements in MBTOC's procedures and practices. We made proposals to 
enhance transparency in the Committee's proceedings, and to allow for 
improved communication between the MBTOC and a nominating Party. 
Similarly, we proposed ways to ensure that the Committee adopts sound 
procedures for considering the technical and economic merits of CUE 
nominations and takes into account the specific circumstances faced by 
each user. While these discussions were fruitful, there is still a 
considerable amount of work to be done to put reforms in place at the 
November meeting.
    Finally, last week the U.S. delegation put forward a draft decision 
on ways in which the Parties could consider and approve CUE nominations 
for more than one year at a time. We believe a so-called multi-year 
approach would provide benefits in terms of time savings for the MBTOC 
and the Montreal Protocol Parties reviewing CUE nominations and for the 
Parties that have to develop them. A multi-year approach would also 
provide greater predictability for the user community. The delegates to 
the OEWG discussed, in detail, the U.S. proposal in Geneva. It will be 
a key issue on the agenda for the November meeting in Prague.
    --Mr. Chairman, I would now like to return to the issue of methyl 
bromide inventories. As I mentioned earlier, the Montreal Protocol 
Parties have already agreed to a U.S. CUE for 2005 amounting to 35% of 
the 1991 baseline level. Up to 30% of the baseline level can come from 
new production and importation, with the remainder coming from existing 
inventories. EPA is currently in the final stages of preparing a 
proposal to allocate these amounts, so that through the notice and 
comment rulemaking process, we will be able to engage stakeholders in 
designing a workable and fair approach to allocation. The use of 
inventories will be factored into this allocation process, with at 
least 5% of the methyl bromide coming from the inventories.
    It must be noted, however, that this inventory does not in any 
sense belong to the U.S. government, nor do we have any direct control 
over its disposition. Because methyl bromide in existing inventories 
was manufactured under prior years' allocations, and fully within the 
compliance schedule for the United States under the Montreal Protocol, 
it belongs to the U.S. manufacturers, distributors and importers who 
now hold it. The United States has historically exported a portion of 
its annual production, and there is no reason to believe that this will 
not continue. However, because it is also true that the United States 
has historically been the largest consumer of methyl bromide in the 
world, it is likely that some portion of this inventory will be made 
available for use here.
    Mr. Chairman, my testimony should indicate the level of importance 
the Administration places on taking action on methyl bromide in a 
manner that protects public health, while still ensuring the critical 
needs of our farmers are met. The Montreal Protocol has been an 
unqualified success story. As one delegate put it at our Geneva 
meeting, despite recent difficulties, ``the Protocol is indeed alive 
and well.'' I believe that our recent efforts to work hard with other 
countries to solve this problem have helped make that statement a 
reality. I believe that, through continued work with other Protocol 
Parties, we will achieve a good outcome on methyl bromide at the 
upcoming Meeting of Parties that is consistent with the Protocol's 
overall goals.
    I thank you for this opportunity to testify before this Committee 
on behalf of the Department of State, the Department of Agriculture and 
the Environmental Protection Agency. My colleagues and I would be 
pleased to answer any questions you may have.

    Mr. Hall. All right. It is my understanding, Ms. McMurray, 
that you will be the only one giving testimony for the entire 
group, is that correct? We thank you for your explanation for 
yesterday, and we understand your need for copious use of the 
airways in today's world. So, we will get underway with some 
questions.
    While I review these, let me recognize Mr. Allen. Go ahead, 
Mr. Allen, if you would, with some questions.
    Mr. Allen. Thank you very much for that presentation. I 
would say I appreciate the explanation for your need to leave. 
I think I wouldn't have made the comment if we had been 
informed of exactly what you were doing and why you had to 
leave, but we did not know that.
    I wanted to ask, Ms. McMurray, both you and Mr. Holmstead, 
some questions about the inventories and how--what we really 
know about inventories and the use, the level of use in the 
United States, and I will address this to both of you. You can 
take turns.
    As I understand it, the U.S. is requesting a critical use 
exemption for more methyl bromide, 37 percent of the 1991 
baseline, than we reportedly used in recent years. I understand 
there are reports that we have been using around 30 percent of 
the baseline, but Adam Sharp, EPA's Associate Assistant 
Administrator, told the Washington Post that EPA's figures on 
methyl bromide consumption are only an estimate, and actual use 
may be well above the 30 percent of baseline levels that are 
reported. So, I would like your help with this.
    Has EPA been underreporting the methyl bromide consumption 
in the country? If 100 percent consumption is not reported, 
does EPA know or does it not know if total consumption since 
2003 exceeded 35 percent of baseline in any given year? I guess 
since it is an EPA question, maybe, Mr. Holmstead, you could 
help with that. How good are our numbers, in particular, and 
the specific question is, do we know or not know if total 
consumption since 2003 has exceeded 35 percent of the baseline?
    Mr. Holmstead. Our numbers are very good, but I think that 
some of the confusion here is that what we are required to 
report under the Protocol is a defined term called 
``consumption.'' And what consumption, in this defined term is, 
it is the amount produced in the United States plus the amount 
imported minus the amount exported. So, that is a defined term 
that isn't the same as how much as is actually used. So, again, 
remember that what we report every year under the Protocol is 
the amount produced in this country plus the amount imported 
into the country minus the amount exported.
    We don't know exactly how much was used because there are 
existing inventories that are held throughout the supply chain 
that may be held at producers, that may be held at 
distributors, that may be held at importers, that may be held 
by individual farmers. So what we report as consumption and 
what we are required to report, we are very confident about. 
And I think that is where the confusion is, is there is a 
difference between what we report as consumption and what 
people estimate is used.
    Mr. Allen. Another way of saying that is what you report as 
consumption is a production number plus imports minus exports, 
so it is not a consumption number in the ordinary sense of the 
word. So, I take it, if I understand, that you really don't 
know whether consumption, actual use in the United States of 
methyl bromide, was above 35 percent or below 35 percent, or am 
I going too far, you don't know what it was?
    Mr. Holmstead. That is absolutely right. We don't know--and 
I like to use the term ``consumption'' versus ``use'--in terms 
of knowing exactly how much methyl bromide our farmers used in 
2003. We have several estimates, and we have tried to estimate 
that by doing an estimate of how much was used out of 
inventory. That is this one number that I know Mr. Doniger has 
focused on, and we think that is an important number to look 
at. But there are other estimates that we look at. There is 
actually a proprietary service that we subscribe to, that has 
another estimate. The State of California, where a great deal 
of it is used, does their own estimate. And so we believe that 
actual use in 2003 was in the neighborhood of somewhere between 
35 and 50 percent, but we don't know exactly what that number 
is.
    Mr. Allen. Mr. Holmstead, I am looking here at a document 
provided by EPA--you will have to help me--it is headed ``U.S. 
Inventory of Methyl Bromide As Of December 31, 2003,'' and it 
has baseline consumption inventory held, which is extracted by 
U.S. companies as of a couple of dates, drawdown, and then it 
has actual consumption--and let us stay with this, whatever 
that means at the moment. U.S. consumption limit, actual 2003 
is 6500 metric tons. And it says then, 25 percent plus a 
drawdown, and then it has the word ``use 30.06 percent.'' I 
take this to mean--help me if I am wrong--that at least this 
document suggests that actual use in the field of methyl 
bromide is 30 percent of the 1991 baseline, is that right?
    Mr. Holmstead. That is one of several estimates that we 
have. You asked whether we are meeting our obligations under 
the Protocol to report, and what we report is not that 30.06 
number, it is the 25 percent number.
    Mr. Allen. I understand that, but my question is about how 
much methyl bromide is actually being used. That is the number 
I am trying to get to because if, in fact, we are only using 30 
percent of the 1991 baseline, why on earth are we then asking 
for 37 percent, for an allowance of 37 percent? That is the 
underlying problem I have.
    Mr. Holmstead. I understand the question, and I think it is 
an excellent question, and I think we have been looking forward 
to trying to explain this. We don't have any way of knowing 
exactly how much was used last year or the year before.
    The document you have is one estimate that takes this 
consumption number that we do report, and then is an attempt to 
estimate how much drawdown at inventory occurred. So, that is 
one estimate.
    Mr. Allen. Do you have other estimates?
    Mr. Holmstead. Yes, we do.
    Mr. Allen. May we see them?
    Mr. Holmstead. We would be happy to provide those to you, 
yes. I think a number of us, in response to this, have said we 
have several different estimates, and they range from that one 
up to about 50 percent, and we think it is somewhere--in 2003, 
we think it was somewhere from the low 30's up to 50 percent of 
the 1991 baseline.
    Mr. Allen. How big a variation is that in terms of metric 
tons, do you know?
    Mr. Holmstead. We could certainly calculate it.
    Mr. Allen. If you could get that in to us.
    Mr. Holmstead. Yes.
    Mr. Allen. The chairman has informed me that I have used my 
time, his time, and so I think that is a signal it is time for 
someone else. Thank you.
    Ms. McMurray. Mr. Chairman, I wanted to just add a little 
bit to the answer there.
    Mr. Hall. I noticed that you probably wanted to get in 
there. You go ahead, and I will yield some more of my time for 
you to answer.
    Ms. McMurray. Thank you. I think it is important to realize 
that, first of all, when we prepared our numbers for 2005, it 
was quite some time ago, before any of the figures that you 
have been referring to were even available. So, 2005 is not 
even a relevant discussion. You are talking now about the 37 
percent number for 2006, and Jeff has already pointed out that 
there are a number of different figures that we look at kind of 
from the top down. We also ask for numbers from the bottom up, 
from the farmers, and say, ``What do you need?'' Now, we don't 
just take that on face value, we actually go through--and it is 
the EPA who does this calculation--a look at where is there 
double-counting, where are there alternatives that are 
available that really ought to come into play here, and the 
number comes way down from there. So, we have that number and 
all the other numbers that EPA has already referred to in the 
answer to your question.
    The other part of it is we have to leave a little bit of a 
margin of error in our negotiation--we don't want to leave our 
farmers high and dry--so that has to factor into it as well. So 
there are a number of different things that we look at before 
we actually take a negotiating position in an international 
body. Thank you.
    Mr. Hall. My time is almost gone, but recalling whatever 
time I may have, Mr. Holmstead, let me ask you this question. I 
understand that a chemical called methyl iodide is a promising 
alternative to methyl bromide in pre-plant application for some 
high-value crops, and I guess that is a good statement?
    Mr. Holmstead. It looks very promising, and the Agency is 
moving very quickly through the registration process, so that 
we hope that that would be----
    Mr. Hall. Tell us what effort EPA is making to expedite 
registration of this, or any other promising alternative, 
briefly.
    Mr. Holmstead. For a number of years, the Agency has had a 
policy of fast-tracking alternatives to methyl bromide, and 
there are several new pesticides that have been registered 
under this process. So, essentially, they will move to the head 
of the line. We will go through the scientific studies as 
quickly as we can. And this one that you mentioned looks to be 
a pretty promising alternative, but it is not yet registered.
    Mr. Hall. All right. I will get to Mr. Brown, then. Are you 
familiar with any product that is as effective and affordable 
as methyl bromide for the wide range of uses that methyl 
bromide is used for and, if so, what are they and how do they 
compare for effectiveness and cost, in about three words?
    Dr. Brown. I think I know the words you would like to hear.
    Mr. Hall. I don't know.
    Dr. Brown. It is a little more complicated than that 
because methyl bromide has such a broad spectrum of uses with 
regard to climate, soil, crops, and so on, that the question 
really is, do we have replacements for each of these 
combinations of conditions that add up to the use of methyl 
bromide.
    Mr. Hall. I am going to--Mr. Foley has, like all the rest 
of us, other needs, and he has arrived. I would like to ask 
unanimous consent for him to be allowed to sit on this 
committee. And we have a vote, and four votes to follow it, and 
we have 15 minutes to vote, and how many minutes are gone.
    Ms. Capps. We have 10 minutes left.
    Mr. Hall. We have 10 minutes left.
    Mr. Shimkus. Mr. Chairman, could you just allow Dr. Brown 
to follow up on the question that he, in essence, asked us, as 
whether there was the product that would meet all the various 
spectrum of the need for methyl bromide in every category now?
    Dr. Brown. Well, no, that is why we have exemptions.
    Mr. Shimkus. That is all I need to know. Thank you.
    Mr. Hall. That is in one word, easy--``no.'' I guess we 
ought to recess for 30 minutes. Four votes is 20 minutes. We 
had an abstractor in Rockwell, Texas, named Rollie Steiger, 
that used to have a sign on his door that said ``Gone for 
coffee, be gone 5 minutes, been gone 3.'' He just couldn't 
afford to miss any business. I ask the witnesses, if they 
would, to remain. We will be at parade rest for about 35 or 40 
minutes. We will be back as quickly as we can get back.
    [Brief recess.]
    Mr. Hall. We will come to order, and the Chair recognizes 
Ms. Capps.
    Ms. Capps. Thank you, Mr. Chairman. I want to try to do in 
a very short time ask questions of three people--Mr. Holmstead, 
Ms. McMurray, and Mr. Smith. So, I hope we can kind of do 
``yes'' and ``no'' in very brief because this is all the time I 
have, and you can tell I am out of breath already.
    To continue with the topic of the stockpile, how big is it? 
Is the information submitted in response to last year's hearing 
still accurate? Start with that.
    Mr. Holmstead. Just quickly, there is no such thing as a 
stockpile. We have some estimates about the inventory that are 
being held by the major distributor----
    Ms. Capps. Okay, call it ``inventory.''
    Mr. Holmstead. The issue with the inventory is that is 
considered to be confidential business information.
    Ms. Capps. Can you answer why it is, briefly?
    Mr. Holmstead. Yes. There are a very small number of major 
producers and importers, and if we were to release the 
aggregate number of what our estimates are, then that would 
essentially tell the competitors how much their competitors 
have, and the concern----
    Ms. Capps. Our competitors in our country?
    Mr. Holmstead. Yes. The way our CBI statute works, if it 
would give someone a competitive advantage, then that is 
something that we consider to be CBI.
    Ms. Capps. So it is for business reasons.
    Mr. Holmstead. Yes.
    Ms. Capps. Are we still increasing our inventory? Is it 
being increased currently?
    Mr. Holmstead. I think our most recent estimate is, no, it 
is actually coming down, that we are eating into the inventory.
    Ms. Capps. Could I ask one guess on your part, just an 
estimate, could it be in the area of 22 million pounds?
    Mr. Holmstead. I think even if I knew the answer, I 
wouldn't be able to--I don't know what that number is, but I 
think, again, we consider the size to be CBI.
    Ms. Capps. Thank you. I want to ask you, Ms. McMurray--and 
just, again, very briefly--some of the witnesses' testimony 
that we have seen in writing, that are on the next panel, 
suggest that the CUE process is broken, that the expertise of 
the Government, including the EPA, is not being considered in 
the process, and our sovereignty is therefor being jeopardized.
    Would you say yes or no to that?
    Ms. McMurray. If I had to answer yes or no, I would say, 
no, it is not broken, but I would like to add a sentence to 
that, if I could, which is, this is the first year that we have 
gone through the critical use exemption process, and I think 
all the Parties, including the United States, acknowledge that 
were a lot of problems with it, and that we are now attempting 
to solve them so that we can work within the process.
    Ms. Capps. So you are not giving up. If it is the case, and 
I am assuming that that is what the intention of the second 
panel is, that some of the members on the panel are saying it 
is broken, you would disagree?
    Ms. McMurray. I would.
    Ms. Capps. Because I would think that your job is to make 
sure that it isn't broken.
    Ms. McMurray. You bet.
    Ms. Capps. And, finally, Mr. Smith, I have asked this 
question as long as I have been in Congress and been aware of 
the situation with respect to methyl bromide. We have spent 
nearly $150 million on alternatives, it is my understanding. 
Could you briefly, in whatever--I guess I have a minute left--
explain what the status of that is, of that research into 
alternatives?
    Mr. Smith. The research that is being performed through the 
auspices of the Department of Agriculture is continuing. We 
look at the opportunity to continue to search for alternatives 
until such time that our grower constituents feel that their 
needs are being met.
    Ms. Capps. Everyone touts methyl bromide, it is so cheap, 
it does everything for everybody, and yet such a toxic 
substance to both our ozone layer and the people exposed to it. 
Why, in the past 10 years, has there not been more progress 
made in alternatives?
    Mr. Smith. Well, I would say that because the U.S. has 
phased out successfully over 50 percent of the use so far, that 
those alternatives that are successful have been adopted. The 
difficulty is under the critical use exemption process, we 
recognize that there are still instances where there are not 
technically and economically feasible alternatives for those 
remaining uses.
    Ms. Capps. So you are saying that there has been progress 
in alternatives, given the fact that we have reduced our usage, 
which then, to me, flies in the face of the fact that we are 
asking for higher amounts to be allowed because part of it is, 
would you agree, the incentive to use alternatives as well? We 
are going to have to use alternatives that are going to be a 
little more complicated, perhaps involve more retraining, or 
maybe you would like to go into that, in whatever seconds I 
have left, and say also when can we expect to see this research 
result in widespread alternative use?
    Mr. Smith. Again, I would characterize it as a continuum. 
We have made certainly the easy substitutions that were 
available. WE continue to go through those that are more 
difficult, but we have some that will continue to be vexing to 
our efforts to substitute methyl bromide uses, according to the 
terms of the Protocol, which are technically and economically 
feasible.
    Ms. Capps. And some of your mission then is also to make 
those alternatives widely available, or the knowledge of them, 
and encourage and incentivize farmers to use alternatives.
    Mr. Smith. Most all of the alternatives have been 
commercially available for some time. There are some that are 
still awaiting further registration action by EPA.
    Ms. Capps. Oh, EPA needs to register some of them? Are they 
in the pipeline?
    Mr. Smith. They have certainly been----
    Ms. Capps. Is there any time line for how soon they could 
be registered? I would turn to someone else and ask, is there a 
holdup for registering alternatives?
    Mr. Holmstead. Again, there is no silver bullet. These have 
moved to the head of the queue, and there is this one in 
particular that I think the chairman mentioned, iodomethane, 
which is nearing the end of the registration process. I can't 
give you an exact date, but it is in the relatively near future 
that a decision will be made on that product.
    Ms. Capps. I know I am borrowing on time, but once that 
does receive acceptance, can you estimate how quickly it could 
impact the amount of methyl bromide being used? I understand 
this is speculation in a way.
    Ms. McMurray. I think it varies chemical by chemical, crop 
by crop, but at a minimum, 6 months to a year sometimes it 
takes to fold it into the growing process. Now, the Agriculture 
Department may have more precise figures than that. But if I 
could also add, part of what the EPA looks at in their 
registration process of these new chemicals is the 
environmental impact of those chemicals, and if they have a 
problem, groundwater contamination problem, or some other 
problem, we don't want to just trade one problem for another, 
in other words. So, those are the risks that have to be 
balanced in the re-registration process.
    Ms. Capps. I guess my final concern is that given this 
interest in alternatives, that we are working against it 
perhaps to some degree, by asking for an increase in use, 
consumption and manufacturing more methyl bromide.
    Ms. McMurray. Well, in response to that, I would say that 
we are asking, in our opinion, for nothing that is not 
justified under the exemption process, which means it has to be 
technically and economically infeasible to use anything else 
but methyl bromide. And so that is the criteria we use when we 
prepare our application.
    Ms. Capps. Even though its use is down.
    Ms. McMurray. Well, as the discussion went this morning, 
there are several numbers that we are looking at that reflect 
use, and not all of them are below the number that we have 
asked for, there is a range. And, therefore, we have to take 
all that into account when we prepare our request.
    Ms. Capps. Thank you. Thank you, Mr. Chairman.
    Mr. Hall. Thank the lady. The Chair recognizes the 
gentleman from Florida, Mr. Davis.
    Mr. Davis. Thank you, Mr. Chairman. And I would ask the 
witnesses please to correct me if I am covering matters that 
have been covered extensively in the past.
    One of the things I think everybody can agree upon here 
today is the level of uncertainty is pretty maddening and 
remarkably prevalent.
    I understand that if things continue on their current 
course--and I think Representative Capps has covered the 
research issue which I would have covered--there will probably 
be an application submitted for 2006 by the United States, to 
get further relief under the critical use exemption. And if it 
is not too premature to talk about that, since we are all 
trying to look ahead here, is that in fact the case? Will the 
process be dramatically different than what was just 
experienced in 2005? It will be tougher? Will the issues 
change?
    Ms. McMurray. Mr. Davis, I think, if I understand your 
question, are we going to prepare a supplemental request to our 
2006 request, we have already got a 2006 request that is 
pending with the Technical Committees. And I will just run 
through quickly what the process is. It is the same as last 
year. We had one review by the Technical Committees already. We 
have had a number of questions asked about our numbers that we 
are now in the process of responding to, and I think we will 
have that complete by the middle of August. And then the final 
decision gets made in November.
    If there is a 2006 supplemental request, which is allowed 
under the Protocol, that would come later this year. That 
decision probably wouldn't be made for another 8 to 10 months 
finally by the Parties, as to whether or not that would be 
approved.
    Mr. Davis. Are you willing to speculate on the outcome of 
the 2006 request, or any supplement to it?
    Ms. McMurray. I think it is too early to tell right now. We 
have so many questions of a technical nature that have to be 
answered about our request, that I can't predict the outcome. I 
am hopeful that we will have a similar result to what we had 
for the 2005 request, in that we, I think, made our case that 
our numbers were technically justified, and I hope we can do 
the same thing for 2006.
    Mr. Davis. I suppose that there is a committee with other 
countries who review and vote to approve or disapprove our 
application in this process.
    Ms. McMurray. There are two Technical Committees, and they 
are broadly representative of not every Party to the Montreal 
Protocol, but a range of Parties, including good representation 
from the United States.
    Mr. Davis. Over the last couple of years or so, have you 
all seen any dramatic changes in the attitude or receptivity 
that these countries have had to our applications? Is it 
getting tougher, are people losing patience, or do people seem 
to tend to believe the facts are essentially the same and it is 
not a big change?
    Ms. McMurray. I think I can give you two answers to that. 
First of all, the process really only began about a year ago, 
maybe a little bit longer than that, for the first set of 
exemptions that were requested. And I think at that point there 
was a great deal of opposition to our application. I think it 
stemmed from the fact that there wasn't good understanding of 
what we were asking for, and why. And we spent a good amount of 
time, either through diplomatic channels or through our 
technical experts at the U.S. Department of Agriculture and the 
Environmental Protection Agency, in explaining exactly how we 
got to the numbers we did. So, it took us maybe 7 or 8 months, 
but I feel like we made a good case, and that finally there is 
an understanding of what our numbers represent.
    But I should add that there is an impatience. There are a 
number of countries who want to get to zero, and they don't 
understand why our numbers aren't close to zero. So, we are 
going to have to make the case again, it is not going to be 
easy. Whether the standards will be tougher this year or not is 
unclear. That we will know probably in the next 2 or 3 months.
    Mr. Davis. One of the arguments that is obviously made by a 
number of people in the agriculture community, including from 
my State, Florida, is that there are no effective alternatives 
available yet. Are the Parties that judge our application in 
disagreement with those facts and, if so, what is their view of 
the facts in that regard?
    Ms. McMurray. I think one of the things we have been 
struggling with with the Technical Committee is an inclination 
on their part to look at an alternative and assume that it is 
able to be used in every part of the world, on any crop, rather 
than taking into account specific circumstances--either 
climate, or soil, or whatever it might be--in the United 
States, or in Italy, or whatever country might have a different 
case.
    I think we are finally getting over that hurdle, and it is 
not an automatic reaction now when they look at alternatives. 
We can come back to them and explain why it doesn't work in one 
place.
    Mr. Davis. If any of the other witnesses would like to 
comment on any of these matters.
    [No response.]
    Thank you, Mr. Chairman. Return my 30 seconds--25 seconds.
    Mr. Hall. I thank the gentleman. I understand Ms. Capps has 
further questions. Would you like to ask them at this time?
    Ms. Capps. If you would be so kind, I have been waiting a 
long time, and I will try to not take the whole 5 minutes.
    Mr. Hall. I gave away most of my time earlier this morning.
    Ms. Capps. You can't give me anymore?
    Mr. Hall. I will yield to you what I have left.
    Ms. Capps. You are a good friend. Thank you very much.
    Mr. Holmstead, getting back into this topic a little more, 
it just means a lot to me to get some more information from 
you. You have testified that the estimates of methyl bromide 
use range from 30 to 50 percent of the 1991 level, correct? I 
wonder if there are other estimates from EPA beside this 30 
percent figure?
    Mr. Holmstead. The only estimate we have done is the one 
that I explained to you before, and that looks at 2003 usage, 
and the estimates are in that range. It is really important, I 
think, to get a sense of how much work goes into----
    Ms. Capps. That is what I am trying to get a handle on. 
Where do these estimates come from? Are they confidential, the 
sources, or how do you arrive at that percentage?
    Mr. Holmstead. We would be happy probably just to send you 
a document that has all of the different sources, that would 
probably be the easiest.
    Ms. Capps. I would appreciate that.
    Mr. Holmstead. The other thing--and Ms. McMurray mentioned 
this before, too--is the amount of work that goes into the CUE 
process. We have literally dozens of people from EPA, from 
USDA, Ph.D. agricultural scientists who work with State people 
in Florida, California, Georgia, Michigan, throughout the 
country where methyl bromide is used, to really understand 
where it is necessary, given the soil conditions. And so when 
we come up with this estimate of a critical use need for 2005 
of 37 percent, it is based on an awful lot of work by a lot 
people looking at the best available data.
    Ms. Capps. I am sure that you have worked hard for this. 
Because our panels aren't all at the table at the same time, I 
want to just quote from someone who is going to speak at the 
next panel, Mr. Brown, farmer, Executive Vice President of the 
Florida Tomato Exchange, from page 3 of his testimony. He says, 
``The USDA and EPA aren't substantiating their alternatives, 
their numbers, but we can substantiate that substantial 
progress has been made in identifying alternatives for a number 
of uses. This has resulted in a 60 to 70 percent reduction in 
the amount of methyl bromide used in the United States using 
1991 as the baseline year.'' Where is that in the mix of 
things, and perhaps others, too, who would have similar kinds 
of estimates, how does this square with the statements that you 
are making of use that could be as high as 50 percent, if they 
are reducing by 60 percent in the field? And that is why I am 
just wondering how credible this 50 percent could be.
    Mr. Holmstead. Again, I don't know how that number was 
derived, but it falls within our range. I mean, if he is saying 
we have reduced by 60 to 70 percent, that means the remaining 
use would be 30 to 40 percent, and that is within the range 
that we are already talking about.
    So, I think all these numbers are----
    Ms. Capps. They are estimates, I understand, but let us 
take the high of his, 70 percent reduction, and you are saying 
the range could be as much as 50 percent.
    Mr. Holmstead. Right, but we are saying it could be as low 
as the low 30's, which is consistent with what he estimates--I 
think we are saying exactly the same thing. And I don't know if 
he--I am not quite sure how he would know about----
    Ms. Capps. Well, he will explain it when he testifies.
    Mr. Holmstead. Because he may know a lot about tomatoes in 
Florida, but I don't know if he has the kind of information we 
have about total usage and total consumption of methyl bromide.
    Ms. Capps. He is talking about the whole United States.
    Mr. Holmstead. Well, I should let him speak for himself.
    Ms. Capps. And I should, too.
    Mr. Holmstead. I would just point out that it is consistent 
with our estimates. We have looked at a number of different 
ways of doing this, and it is somewhere between 30 and 50 
percent, and he is saying, well, we reduced 60 to 70 percent. 
That falls right within our range--unless my math is wrong.
    Ms. Capps. I guess there is about a 10 percent discrepancy. 
I guess I would like to urge us paying attention to that part.
    Mr. Holmstead. This is something that obviously is 
important to everyone.
    Ms. Capps. Thank you. I think I have used way more than the 
time that I should. Thank you.
    Mr. Hall. Mr. Davis, do you have additional questions?
    Mr. Davis. No, Mr. Chairman.
    Mr. Hall. All right. We want to thank this panel, 
appreciate your patience in allowing us to go vote not once, 
but I think five times, and during that time they passed my 
resolution lauding the Apollo astronauts, so you have been part 
of the process. We thank you for your time and thank you for 
your assistance, and thank you for what you have done, are 
doing, and will do for us. Thank you.
    I want to thank the second panel also because while those 
who were sitting at the table, you were also waiting.
    All right. We thank this Panel No. 2, Mr. James A. Bair, 
Vice President, North American Millers' Association; Mr. 
Reginald Brown, Executive Vice President, Florida Tomato 
Committee--and you can expect some questions, Mr. Brown, and I 
think that one of your Members of Congress has been here off 
and on, waiting to try to make some inquiries. Congressman 
Foley, Mark Foley, has an interest in this, but he is one of 
the busier Members of Congress, he's on several very important 
committees, and we were trying to leave on Friday, now I think 
we're trying to leave on Thursday, and it is to your benefit if 
we leave on Wednesday, so we are trying to get out of here.
    We have Dr. Michael Mellano, Senior Vice President, Mellano 
& Company; Mr. Paul Wenger, Second Vice President, California 
Farm Bureau Federation; Mr. David Doniger, Policy Director, 
Climate Center, Natural Resources Defense Council; Dr. David K. 
Mueller, President, Insects Limited, Incorporated; Ms. Vanessa 
Bogenholm, Owner, VB Farms, Chair, Board California Certified 
Organic Farmers, and Mr. James Wolf, Vice President of the 
Trane Corporation.
    At this time, recognize Mr. Bair, ask you to stay within 
about 5 minutes, if you can, but cover your subject adequately, 
and we won't be tough on you about time. Thank you.

  STATEMENTS OF JAMES A. BAIR, VICE PRESIDENT, NORTH AMERICAN 
    MILLERS' ASSOCIATION; REGINALD L. BROWN, EXECUTIVE VICE 
PRESIDENT, FLORIDA TOMATO COMMITTEE; H. MICHAEL MELLANO, SENIOR 
  VICE PRESIDENT, MELLANO & COMPANY; PAUL WENGER, SECOND VICE 
 PRESIDENT, CALIFORNIA FARM BUREAU FEDERATION; DAVID MUELLER, 
PRESIDENT, INSECTS LIMITED, INCORPORATED; DAVID DONIGER, POLICY 
 DIRECTOR, CLIMATE CENTER, NATURAL RESOURCES DEFENSE COUNCIL; 
  VANESSA BOGENHOLM, OWNER, VB FARMS, CHAIR, BOARD CALIFORNIA 
  CERTIFIED ORGANIC FARMERS; AND JAMES WOLF, VICE PRESIDENT, 
                       TRANE CORPORATION

    Mr. Bair. I will be brief. Thank you, Mr. Chairman and 
members of the subcommittee. To your point about Mr. Brown's 
Congressman, I would just say that every member of the 
subcommittee that has been here today has a flour mill either 
in their State or in their specific district. Some of you have 
many flour mills in your district.
    My name is Jim Bair. I am Vice President of the North 
American Millers' Association. We represent the U.S. wheat, 
corn and oat milling industry, which is comprised of 46 
companies that operate 169 mills and collectively produce more 
than 160 million pounds of milled grain products every day, and 
that is more than 95 percent of the industry total.
    You have heard us in previous hearings and briefings over 
the years, talk about the importance of methyl bromide for 
sanitation, but today I am going to focus on the Montreal 
Protocol itself.
    As you have heard from multiple witnesses already, talking 
about the reductions that have already been made, and likewise 
we have also reduced our reliance on methyl bromide by more 
than 60 percent over the last decade. And, in fact, as you have 
also heard, as all industries and as a country, we have reduced 
our reliance on all those ozone-depleting substances by 97 
percent.
    Well, I would say, as with any problem, the closer you get 
to the goal, the more difficulty incremental gains become, and 
I think that eliminating that last 3 percent is going to be 
obviously the most difficult to reduce.
    We believe that the Montreal Protocol process is flawed, 
and we seriously doubt whether we can ever expect a fair shake 
from it, and I would like to cite just a few examples. For 
example, one of the Technical Committees that Assistant 
Secretary McMurray referred to, in the Spring of 2003, they 
reviewed our critical use exemption application and gave it a 
``recommended'' status for consideration by the Parties to the 
Treaty. But then several months later, last fall, a new report 
came out and said that it had slipped from being 
``recommended'' to merely ``noted,'' which, by the way, wasn't 
even an option available to them, but they said it is now in 
this netherworld of being just ``noted,'' neither 
``recommended'' or ``not recommended,'' just noted.
    Well, nothing had changed between the spring and the fall. 
No new chemicals had been registered. No new alternatives had 
been made available. But, yet, somehow this group of 
individuals changed its recommendation. Didn't talk to us. 
Didn't tour any mills. Didn't send us a letter, or ask us any 
questions. How does that happen? How do these decisions get 
made? Frankly, the committees are made up of just individuals. 
Many of them are consultants who are beholden to not even their 
own countries, maybe just their own clients, and who knows who 
they are. So, we doubt the sanctity of that process.
    Another example, in February of this year, one of the 
technical committees issued another report, and Representative 
Issa referenced science--well, this Montreal Protocol 
committee, in its report of just February, said that they had 
recommended CUEs, but they recommended more liberally than 
would be recommended in the future. Well, if they are making 
decisions based on sound science, how can they say today that 
``we were too liberal in our review of your CUEs, and we are 
going to be tougher in the future,'' rather than say, ``sound 
science will prevail, we will review the data, and we will make 
our decisions when they are presented to us,'' but they are 
announcing in advance that they are going to be more strict.
    I would say that the Montreal Protocol that Mr. Waxman 
referred to, that was passed when the Clean Air Act was amended 
to put the U.S. on the same phaseout schedule, that is a 
different Montreal Protocol than we are seeing today. There 
have been many changes, significant changes that have affected 
the intent and the operation of how the Protocol works.
    Another example, in my own industry, our critical use 
exemption application, the amount of methyl bromide we had 
requested was cut by this technical committee, but yet our 
competitor industries in, say, the U.K. and Canada, same 
milling equipment, same operations, received no cut. How would 
that decision be made? How is it that would happen?
    I want to point out at this juncture that we have a great 
deal of respect for Assistant Secretary McMurray and her 
people, and she is, I think, an eternal optimist and probably 
wouldn't give you the same sense of frustration perhaps that 
the rest of us who are sitting at this table, who have been to 
these Montreal Protocol meetings. I have been there multiple 
times, and I have seen the way the parties from other countries 
disrespect the U.S. negotiators, ignore our requests. It, 
frankly, is very frustrating.
    I have been forced to leave meetings. We wanted to just sit 
in and observe the process, and were told, ``No, you can't even 
sit in the back row of this gigantic auditorium and listen to 
the deliberations of the parties, this is a closed meeting.'' 
So, these are people who are making decisions that affect 
industries of strategic national importance to the U.S., and we 
are not even allowed to be in the room to observe.
    In 1900, the largest industry in the United States was the 
flour milling industry, my point being this is a very mature 
business. We have squeezed out all the inefficiencies that we 
can. We are the opposite of high-tech or dot.com. Our margins 
are razor-thin or nonexistent. So, when people talk about 
alternatives--and you hear a lot about alternatives--I am happy 
to debate those alternatives here or in any other forum, but 
when the alternatives add cost to the business like they do, 
that is something that is not an attractive proposition for us. 
We have nowhere else to squeeze inefficiencies out of our 
business.
    In summary, I would just say that we agree with the 
chairman and Mr. Radanovich and 42 other Members of Congress, 
who are co-sponsors of H.R. 3403. We think that the 
decisionmaking authority ought to be returned to the U.S. EPA. 
It was hardly in our back pocket. These are people that ask 
tough questions, give thorough analysis and review, and we 
think that the authority for granting or denying critical use 
exemption applications ought to remain with the U.S. EPA and 
not with bureaucrats from countries who, frankly, may be 
competitors or antagonistic toward us. Thank you, Mr. Chairman.
    [The prepared statement of James A. Bair follows:]

  Prepared Statement of James A. Bair, Vice President, North American 
                          Millers' Association

    Thank you Mr. Chairman and members of the Subcommittee. I am Jim 
Bair, vice president of the North American Millers' Association. NAMA 
is the trade association representing 46 companies that operate 169 
wheat, oat and corn mills in 38 states. Their collective production 
capacity exceeds 160 million pounds of product each day, more than 95 
percent of the total industry production.
    In Congressional hearings and briefings over the years, grain 
milling executives have discussed with you how methyl bromide is used 
to meet government regulations, and consumers' expectations, for clean 
and wholesome food.
    They have testified that methyl bromide is easily the most 
technically and economically effective tool available to protect grain 
processing facilities and the food produced in them against insect 
pests.
    They have described how, even in advance of the Montreal Protocol 
phase-out, the industry cut its usage of methyl bromide by more than 60 
percent over the last decade.
    You have also heard that food and agricultural uses of methyl 
bromide are of little environmental significance since, according to 
the Environmental Protection Agency (EPA), ``Anthropogenic (man-made) 
methyl bromide has contributed a total of about 4% to ozone depletion 
over the past 20 years. Of this, about 2.5% can be attributed to 
agricultural fumigation activities.''
    But there is another point upon which I will focus my remarks 
today. It is this: The Montreal Protocol process to eliminate methyl 
bromide is broken. Its penchant for secrecy and undemocratic decision-
making is irrational and unfair to U.S. farmers and food processors.
    Congress ratified the Montreal Protocol treaty with an 
understanding about the details of the agreement. Yet, year after year, 
Montreal Protocol committees have acted to change the rules, 
significantly altering the original intent of the treaty.
    When Montreal Protocol changes are debated, the debates usually 
take place in secret meetings. There is no chance for affected parties 
to even sit and observe.
    When changes are adopted, the changes are never voted upon. The 
chairman simply declares that there is, in his view, a consensus and he 
declares the outcome.
    When the U.S. attempts to suggest changes to make the Protocol 
better, developing nations rise in protest. Why? Because the Protocol 
allows them an additional 10 years to comply with it, an advantage of 
huge economic value. Those countries, the U.S. agricultural 
competitors, have made it abundantly clear that their first objective 
is maintaining an ill-gotten economic advantage, not in fine-tuning a 
treaty to address an environmental goal.
    When the U.S. asked for a simple accounting of the many millions of 
dollars, much of it from U.S. taxpayers, spent in developing countries 
for demonstration projects, there was outright refusal and indignation.
    Is Congress willing to sit by and watch U.S. sovereignty be 
diminished by bureaucrats at the Montreal Protocol and competing 
nations?
    American agriculture is justifiably skeptical about fair treatment 
from the United Nations. The Montreal Protocol approval process is 
agenda-driven and highly politicized. Ultimately, the fate of the U.S. 
Critical Use Exemption (CUE) applications that are recommended to the 
parties of the Montreal Protocol are determined by a handful of 
individuals unaccountable to U.S. taxpayers, behind closed doors, 
despite the hours and expertise EPA committed to this process.
    Some of the U.S. critics in the Montreal Protocol negotiations are 
from countries that have no significant agriculture or food processing 
industries and therefore never used much methyl bromide to begin with. 
So it's easy for them to say it ought to be banned.
    Others are from countries that are agricultural competitors of the 
U.S., and they are unlikely to surrender the competitive advantage that 
has been handed to them.
    If agriculture and food processing uses of methyl bromide are very 
harmful to the environment, then it should be banned globally on the 
same date, and the sooner the better. But banning methyl bromide in the 
U.S. while allowing our competitors to continue using it merely shifts 
jobs and economic activity to those competitors with no real gain to 
the environment. That is a false choice and the U.S. should not be 
pressured to make that choice.
    It is our view that rule changes implemented since Congress 
ratified the treaty have drastically changed the intent and operation 
of the treaty. It is further our view that there is no chance of 
reforming it to return it to its original intent. Therefore, we endorse 
the bill HR 3403 introduced by Representative Radanovich and co-
sponsored by Chairman Hall and 42 other Members of Congress. The bill, 
if passed, would simply recognize the expertise of the EPA in granting 
or denying exemption applications, and thereby return to the U.S. the 
sovereignty to make decisions affecting the viability of an industry of 
strategic national importance.
    That concludes my testimony, Mr. Chairman. I would be happy to 
answer any questions you or other committee members may have.

    Mr. Hall. Thank you.
    The Chair recognizes Mr. Brown.

                 STATEMENT OF REGINALD L. BROWN

    Mr. Brown. Good morning, Mr. Chairman and members of the 
committee. We appreciate this opportunity to discuss the 
dilemma that we are in relative to methyl bromide phaseout 
under the Montreal Protocol.
    I represent the tomato industry in Florida, which is the 
largest tomato production system for fresh tomatoes in the 
country, and I am also currently the Chairman and President of 
the Crop Protection Coalition, which represents food and 
agricultural industries, including nurseries and horticultural 
industries that rely on methyl bromide to produce, store, 
handle, and ship a number of agricultural products in the U.S. 
The Coalition is made up of about 30 agricultural organizations 
that represent thousands of farmers, processors, and shippers, 
and billions of dollars of agricultural production, with 
employment running into the hundreds of thousands.
    We are very concerned that we have a situation that does 
not give us stability in planning and security of supply of a 
compound that is extremely critical to these enterprises. We 
have been very active in the process of trying to procure 
dollars for research for alternatives. All these industries 
have been engaged in finding resources for alternatives, and 
have been testing resources for alternatives and, as a 
testament to that, many of the phaseouts have been a result of 
those industries adopting alternatives that research has found 
and that they have been able to bring into their own individual 
enterprises.
    The U.S. use of methyl bromide is down by anywhere from 60 
to 70 percent of what its 1991 number was. Now, there is no 
absolute guarantee what that number is because no one has the 
ultimate record. But when you review the applications for CUEs 
and you look at the numbers that were reviewed by the EPA and 
deemed to be critical uses in the U.S., and you weigh that 
against the cost of methyl bromide, which is not cheap--it is 
used because it is a compound that is effective, far from being 
cheap--that equates to a use number that the industry is going 
to as quickly as they can, provided they don't risk their 
individual enterprises.
    Now, every CUE request that came in 2003 for 2005, and the 
current 2004 requests going in for 2006, were monumental tasks 
for the industries that made those applications. The 
applications from Florida alone, if you included the reference 
material, would have been in excess of 3,000 pages. The EPA-
USDA review team had in excess of 40 Ph.D.s, and they spent 
many, many man-days reviewing these requests from all the 
parties that made critical use applications in the U.S. They 
reduced the gross critical use application requests from around 
60 percent down to the 37-38 percent range, with that review 
process. Then that application goes forward to the MBTOC TEAP 
process, and it gets further reviewed by a group with 
international authority for a period of 3 days, when they are 
looking at 116 different applications from around the world, 
and they further want to cut it again. The review process in 
the U.S. alone, the application review process, is burdensome 
to the industry, and it is probably receiving the best science 
review, with the most knowledgeable scientists that exist in 
the world. And then we go on to the Montreal Protocol.
    Now, if you had to risk your individual enterprise on the 
basis of when you would have electricity in your home to 
operate your calculators and your computers today, and you 
might not have it tomorrow, how would you feel? Methyl bromide 
is an essential of the enterprises that are making these 
critical use applications to the process.
    You go to the Montreal Protocol, I have been to two of the 
meetings in the last year, and you sit there as a non-diplomat, 
looking at the process, and you listen to the conversation on 
the floor among the delegates, there are parties in those rooms 
that are basically receiving monies indirectly from the U.S., 
for a phaseout of methyl bromide. There are parties in there 
making accusations that those industries in the U.S. that want 
to use methyl bromide are subsidized and should get more 
subsidies so that they don't have to continue to use methyl 
bromide. And I will attest to you that our industry and most of 
the horticultural industries in this country that I am aware of 
receive no government subsidies whatsoever.
    We are basically bearing the cost and paying the cost of 
making that change for the betterment of the ozone layer. But 
when you get us down to the point we don't have anywhere else 
to go but out of business, it becomes a very unfair and 
impractical process. Even our own U.S. delegation pled with the 
group in Geneva just last week for a measure of reasonableness 
in the evaluation of CUEs and reasonableness in the evaluation 
and modifications of the MBTOC process, as opposed to an air of 
suspicion or distrust, which basically is, from a non-
diplomatic point of view, what we are seeing.
    Then we see countries that manage to coalesce together to 
look at the U.S. market and say, ``Ah, here is an opportunity 
for us to export.'' Simple solution to that is keep U.S. 
producers from producing. We have an opportunity here, don't 
we, from their perspective. And we do this by consensus.
    Now, would you like to risk your farm to an enterprise in a 
system operated in this fashion that is absolutely 
nontransparent, not open, no recorded vote, obviously not 
having a very high scientific standard--because I would venture 
to say the science standard of the review process here in the 
U.S. is probably better than any in the world, as a credit to 
our EPA-USDA and State Department staff as they have looked at 
the proposals of the U.S. industries, and then we go on among 
our friends to have them make a decision about our future. 
Don't you know we feel real comfortable being in that position. 
And, unfortunately, there are not many ways out of it, as we 
currently see it.
    We are going to live day-to-day, year-to-year, in an effort 
that we have undertaken in good faith to phaseout methyl 
bromide to get us down to the last gasp, the last ounce, and 
there are forces out there that would just as soon have the 
solution for getting us down to that last ounce, to let us go 
out of business because the critical use process was put in the 
Montreal Protocol to ensure that the process of phasing out 
methyl bromide and other compounds under the Protocol didn't 
put people out of business, but yet the process is being 
subjected to manipulation where we run the risk of going out of 
business, and that is American jobs and American farms. And I 
appreciate the opportunity to be here with you this morning.
    [The prepared statement of Reginald L. Brown follows:]

  Prepared Statement of Reginald L. Brown, Executive Vice President, 
                        Florida Tomato Exchange

    Good morning Mr. Chairman, I am Reggie Brown, Executive Vice 
President of the Florida Tomato Exchange. On behalf of the tomato 
growers of Florida, I thank you for holding this hearing on a subject 
of critical interest to the industry. Florida Tomato growers produce 
the largest volume of fresh tomatoes in the United States. Prior to 
working for the industry, I was employed as a County Extension Agent in 
Southwest Florida where many of Florida's winter vegetable are grown. I 
grew up in the vegetable business in North Florida and my family 
continues to operate a family farm in that area. Methyl bromide is a 
key component in the production systems for of tomatoes, strawberries, 
bell pepper and other vegetables.
    I am also President of the Crop Protection Coalition (CPC). The CPC 
represents food and agricultural industries, including nursery and 
horticultural industries that rely on methyl bromide to help produce, 
store, handle or ship foods or other agricultural products. The 
Coalition is comprised of 35 agricultural organizations in the United 
States representing thousands of American farmers, processors and 
shippers of billions of dollars of agricultural production and 
employing hundreds of thousands of people. Our commodities, farms and 
the economic contribution they make are an extremely important economic 
factor in many communities in the United States. While the crops we 
produce or handle are diverse, we share a common concern about the 
potential loss of an important crop protection tool--methyl bromide. 
Consequently, we are very interested in assuring that adequate tools 
are available to address the plant pest and disease problems 
confronting our members.
    Since the early 1990's, members of the CPC have been actively 
engaged in addressing the issues raised by the phase-out of methyl 
bromide. These include, for example, supporting the increased and 
targeted investment in research to find alternatives to methyl bromide, 
working on changes to reduce the potential for emissions from the 
application of methyl bromide and working with both international 
bodies as well as our own government on the development of a phase-out 
policy for methyl bromide.
    CPC wishes we could tell the Subcommittee today that viable 
alternatives to methyl bromide have been found for the remaining uses 
of methyl bromide. We cannot. The USDA and EPA cannot either. We can 
state that substantial progress has been made in identifying 
alternatives for a number of uses. This has resulted in a 60-70% 
reduction in the amount of methyl bromide used in the United States, 
using 1991 as the baseline year. All of this was fully documented in 
the extensive hearing held in June of last year by this Subcommittee to 
consider methyl bromide and the Critical Use Exemption (CUE) process. 
The hearing record developed at that time reflects excellent 
information on the continued need for methyl bromide as well as efforts 
that had been made to identify and implement potential methyl bromide 
replacement products by the American agricultural industry and 
government. CPC was pleased to also hear statements from the 
Subcommittee making it clear that if the then upcoming First 
Extraordinary Meeting of the Parties to the Montreal Protocol scheduled 
for Montreal in March 2004, did not resolve the material substantive 
issues confronting American agriculture, legislation from this 
Subcommittee would be forthcoming.
    In the opinion of the CPC, despite the excellent, persistent 
efforts of the U.S. delegation to the Montreal meeting, they were not 
successful in having the U.S. issues appropriately addressed, 
particularly on a long-term basis. Rather, we are left with having to 
run the CUE gauntlet each and every year. This is both frustrating and 
unfair. I would like to examine the shortfalls of the process relied on 
by the Parties to the Montreal Protocol using the First Extraordinary 
Meeting of the Parties in Montreal, the Nairobi and recent Geneva Open-
Ended Working Group meetings as a backdrop.
    Briefly stated, there appears to be a lack of due process under the 
Montreal Protocol. Decisions are often not scientifically based. The 
scientific review of CUE nominations of individual countries appears to 
be both irrational and extremely weak. Deliberations and discussions on 
substantive issues are conducted in secret. There are no recorded votes 
on issues. Rather, the Chair of the meeting apparently exercises 
discretion to determine how and if particular issues are addressed. 
Then Subcommittee Chairman Barton and now full Committee Chair, 
described this very well in the last hearing when he said: ``If you 
have never taken a vote, I think touchy feely is a pretty good 
definition of how it works. It is not hanky panky. But we have got a 
problem here in that I am going to stipulate that we are really trying 
to come up with alternatives that the Bush administration, previous 
Clinton administration really wants to take methyl bromide off the 
market so that we can stop the ozone depletion, but it apparently is 
really difficult to do so. We have these 183 parties who signed the 
Protocol, but only two countries make methyl bromide and only 5 or 6 
really use much of it. So you got 183 decision-makers, but you don't 
have that many really vested sufferers if it is taken off the market.'' 
In short, there appears to be a lack of accountability for persons 
involved in the decision-making process under the Protocol, 
particularly co-chairman of Protocol committees such as the Technology 
and Economic Assessment Panel.
    Having attended most of these meetings, I continue to be amazed 
over how much the views of other countries towards U.S. proposals 
appear to be influenced more by those countries' feelings towards the 
foreign policy initiatives of our country rather than the logic or 
science surrounding the U.S. delegation's proposal. Based on our 
understanding from our Nation's negotiators, even simple attempts to 
reduce the burden of the CUE process for applicants, nominating 
countries and the Parties are not given fair consideration. From the 
developing nations' perspective, some of whom the U.S. agricultural 
industry have to compete in the marketplace, the most important thing 
in the methyl bromide debate appears to be their continued ability to 
gain access to the Multilateral Fund, a significant part of which is 
funded by the United States. Our Nation's farmers and processors do not 
have access to the Multilateral Fund. Therefore, in the U.S. methyl 
bromide transition costs must be absorbed by the particular commodity 
involved. The ability to pass these costs onto consumers is next to 
impossible.
    What is particularly frustrating is the attitude of the Parties 
towards CUE nominations. For example, the 2005 U.S. nomination for CUEs 
was based in large measure on applications submitted by the various 
affected sectors. In a number of instances, the applications included 
hundreds and even thousands of pages of supporting material. These were 
then carefully subjected to critical review by over 40 scientists from 
the U.S. Environmental Protection Agency (EPA) and the U.S. Department 
of Agriculture (USDA). From these applications, the U.S. government 
developed the amount of methyl bromide and the uses involved that it 
wanted to nominate for CUE consideration by the Parties under the 
Protocol.
    After this extensive effort, an advisory group to the Protocol 
reviewed all the U.S. nominations as well as those of the rest of the 
world in just under 3 days. Initially it appeared that the advisory 
group was not going to recommend approval for over 60% of the U.S. 
nominations. However, they subsequently changed their mind but advised 
that since this was the first CUE nomination, they were being 
``liberal'' in their review of the nomination requests. In the future, 
the reviews would be more demanding and rigorous. The clear message was 
that they can appease the U.S. for one year, but thereafter they don't 
have to worry about the U.S.
    CPC members were struck by this attitude. It reflected a certain 
arrogance as well as a decision making process that was not based upon 
demonstrated need. No one from the advisory committee bothered to call 
me to request to tour our productions area and see how we use methyl 
bromide and have utilized alternatives where possible. What we have 
been told is that the attitude under the Protocol is there is no God 
given right to grow any crop in the United States if it can't be grown 
without methyl bromide. Rather, production areas simply have to shift 
to other areas if the chemical is needed, or in their view, have our 
U.S. consumers be more dependent on imports. In other words, 
communities must be uprooted to eliminate this chemical regardless of 
the impact from such disruption.
    Something must be done to fix this process because it simply does 
not work for methyl bromide. U.S. agriculture is clearly transitioning 
away from methyl bromide. It continues to need time to help make that 
transition without unnecessarily disrupting people's jobs, their homes 
or their communities.
    I appreciate this opportunity to provide this testimony. We 
certainly look forward to Congressional action including the action of 
your Subcommittee to help resolve our problem. Congressman Hall clearly 
annunciated an approach at the last hearing that we would support and 
recommend to this Subcommittee for action, namely: ``But they ought to 
renegotiate, the United Nations, for our people, the Montreal Protocol 
that allowed the United States more time beyond 2005, because it was 
pushed on us by developing countries such as Mexico and China and 
others that have the chemical available at least until 2015. To our 
detriment, a lot of them in northern Europe, those countries led the 
effort in the Montreal Protocol to eliminate the product, but these 
nations have a very little need for it because of favorable climatic 
conditions. And if they can't do that, then we ought to have the 
courage to put some legislation on the books to amend the U.S. Law to a 
phase-out level of 50 percent that was in effect prior to 2003. I think 
we owe that.'' Certainly the legislation authorized by Congressman 
Radanovich (H.R.3403) provides another opportunity for this 
Subcommittee to exercise leadership on this issue.

    Mr. Hall. Thank you, sir. The Chair recognizes Mr. Issa to 
introduce Mr. Mellano.
    Mr. Issa. From the great State of California. Dr. Mellano 
is a major employer in my district, and happens to be involved 
in what my district is best known for, which is the nursery 
production industry. Among other things, we are called the 
``Flower Capital of America,'' at least by ourselves. Thank 
you, Mr. Chairman.
    Mr. Hall. And your Congressman is a major part of this 
committee. He attends most of the meetings, asks very good 
questions, and always stands up for California, especially 
against Texas.
    Mr. Issa. As best I can, Mr. Chairman.

                 STATEMENT OF H. MICHAEL MELLANO

    Mr. Mellano. My Congressman is a good guy. We appreciate 
him.
    Mr. Chairman and members of the committee, we appreciate 
the opportunity to testify. I am here for the Society of 
American Florists, the American Nursery and Landscape 
Association, and the California Cut Flower Commission.
    As you now know, I am a cut flower and foliage grower, and 
we also produce bulb crops in Southern California, in San Diego 
County.
    With your permission, I submit my written testimony, and I 
will summarize it here. Before I start that, I would like to 
remind you that our crops represent 11 percent of the value of 
the U.S. agricultural crops, and we are the No. 3 crop in the 
United States, after corn and soybeans.
    I think the main point I want to make today is that our 
industry, the flower and nursery industry, we have met our 
obligations under the terms of the Protocol. The Protocol calls 
for us to do research to find alternatives, and actually we 
have been doing that at our company for 40 years because we are 
looking for a cheaper way to go than methyl bromide, and we 
have invested hundreds of thousands of dollars in the last few 
years, to come into compliance with the Protocol. And we are 
using the alternatives that are technically and economically 
feasible. We are using all of them in some way. However, in 
some of our cases, the reduced productivity and the increased 
production costs don't allow us to switch to methyl bromide. In 
addition, many at the United Nations recommended alternatives 
that don't work in our operation, and I don't believe the 
Protocol calls for us to use somebody else's data.
    Now, the Treaty specifically says that until technically 
and economically feasible alternatives are available, we are 
entitled to an exemption. But we, as cut flower growers, have 
very little confidence that we are really going to get what we 
are entitled to, and it is going to be very difficult for us to 
remain competitive without the use of methyl bromide, for the 
reasons that have already been mentioned.
    Now, my written testimony talks about alternatives in 
detail, and I won't go over that, but if there are questions, I 
will be glad to answer them.
    In addition to that, I brought along a copy of our CUE 
application for 2006, and this is it. And I would like to turn 
it in because it gives the details of some of the research that 
we have done.
    Mr. Hall. You are going to put it into the record?
    Mr. Mellano. I would like to, if that is possible.
    Mr. Hall. Is there objection? The Chair hears none. It will 
be admitted.
    [The information referred to is retained in subcommittee 
files.]
    Mr. Mellano. Now, based on our research results, and we are 
prepared to stand on our results--we have the data, we are 
entitled to a CUE, but we are afraid we are not going to get it 
from the United Nations, that is our concern, same as the 
previous people.
    Now, I attended the meeting in Montreal, and to me the 
process is not science-based. It is very, very political. In my 
personal opinion, it is not working because several countries 
have an underlying agenda, and that agenda is to undermine U.S. 
businesses. It is very obvious when you are there. They ignore 
the data. They say what they want to say. They quote data that 
has not been made public, and I don't see how you can do that.
    Now, I will give an example of what I think is wrong. I 
will just give one, and I think that example is China. China is 
not a party to the Protocol. China is producing and marketing 
methyl bromide on a worldwide basis. And China is rapidly 
expanding their horticulture business for export. So, because 
they are not a party to the Protocol, they don't have to abide 
by it. But they are arguing in favor of banning methyl bromide, 
even though they themselves don't have to comply. Now, that 
just doesn't seem fair to me. That is not the system I am used 
to.
    Now, it is clear to me that the EPA is doing a good job, 
but I don't think the U.N. decision-makers want to listen to 
us, and their rulings as to feasible alternatives just don't 
work all the time here.
    So, in closing, I appreciate your time, and we appreciate 
all the help you are giving us. And we ask you to support 
Radanovich's bill, H.R. 3403, because that is going to 
guarantee that we get a fair shake, and that is all we want, 
and a fair shake based on the science. That is what we want. 
Thank you.
    [The prepared statement of H. Michael Mellano follows:]

   Prepared Statement of H. Michael Mellano, Senior Vice President, 
Mellano & Company on behalf of the Society of American Florists and the 
                    California Cut Flower Commission

    Chairman Hall, Ranking Member Boucher, and Members of the 
Committee, we are grateful for the opportunity to present joint 
testimony on behalf of the nursery, landscape and floriculture industry 
of the U.S. The topic of continued availability of methyl bromide to 
U.S. nursery and floriculture growers is of huge importance to our 
industry.
    The Society of American Florists (SAF) is the national trade 
association representing the entire floriculture industry, a $19 
billion component of the U.S. economy. Membership includes about 14,000 
small businesses, including growers, wholesalers, retailers, importers 
and related organizations, located in communities nationwide and 
abroad. The industry produces and sells cut flowers and foliage, 
foliage plants, potted flowering plants, and bedding plants.
    The California Cut Flower Commission (CCFC) is a non-profit public 
corporation formed in October 1990 by and for growers, under the laws 
of the State of California. Its mission is to provide a unified effort 
by growers to enhance the performance of the California cut flower and 
greens industry, by providing promotion, marketing, government 
education, and research on behalf of the industry. It was voted into 
being by a referendum of cut flower growers and is financially 
supported by grower assessments on the sales of fresh cut flowers and 
cut greens.
    In crop value, nursery and greenhouse crops have surpassed wheat, 
cotton, and tobacco and are now the third largest plant crop--behind 
only corn and soybeans. Nursery and greenhouse crop production now 
ranks among the top five agricultural commodities in 24 states, and 
among the top 10 in 40 states. Growers produce THOUSANDS of varieties 
of cultivated nursery, bedding, foliage and potted flowering plants in 
a wide array of different forms and sizes on 1,305,052 acres of open 
ground and 1,799 million square feet under the protective cover of 
permanent or temporary greenhouses.

I. THE MONTREAL PROTOCOL CRITICAL USE EXEMPTION (CUE) PROCESS IS SIMPLY 
      NOT WORKING, AND CONGRESS MUST ACT TO PROTECT U.S. GROWERS.

    The Montreal Protocol, to which the United States is a signatory, 
clearly sets out a Critical Use Exemption process. If practicable and 
economical alternatives are NOT available, then growers are to be 
allowed to continue use of methyl bromide. This concept is not complex, 
and its intent is clear. If growers have made an effort to find 
alternatives that work, and have failed to do so, they should not be 
put out of business because of the requirements of the treaty.
    Yet growers being put out of business is exactly what we are facing 
today, because the Critical Use Exemption (CUE) process is not 
functioning as it should.
    U.S. growers can--and will--comply with the terms of the Montreal 
Protocol. When we have economical and practical alternatives to methyl 
bromide, we will use them. We have made our best efforts, and invested 
hundreds of thousands of dollars in research to find workable 
alternatives. But today, we remain without those alternatives--and we 
are faced with the January 1, 2005 deadline, after which the future is 
unknown.
    This testimony will outline the difficulties faced by the 
floriculture and nursery industry in what has become a very dire 
situation. We will first discuss how methyl bromide is used, and the 
complexity of the industry. Secondly, we will discuss the alternatives 
available to ornamental growers, and why we still require methyl 
bromide in order to remain competitive. Finally, we will focus on the 
current CUE process, and why it is not functioning as was intended by 
the signatories to the treaty.
    In summary, it is imperative that this Congress move to fix the 
currently broken process. We support the legislation (H.R. 3403), 
introduced by Representative George Radanovich, or similar legislation, 
which we believe will protect U.S. interests without abrogating our 
international treaty responsibilities.

    II. METHYL BROMIDE USE IN THE FLORICULTURE AND NURSERY INDUSTRY

    Methyl bromide is a critically important part of ornamental 
production in many areas of the U.S. Field-grown cut flowers, shade 
house production of some flowers in the ground, caladiums and even 
treatment of dried flowers and materials such as tree fern totems (used 
for some vining foliage plants), are key uses in ornamental production.
    The diversity and intensity of cropping systems in ornamental 
production greatly aggravates the issue of the pending loss of methyl 
bromide, especially when our main competitors in third-world countries 
will continue to be able to use methyl bromide well beyond the U.S. 
phase-out, giving them a strong competitive advantage.
    Our industry must survive in an international market, with 
competitors who will have the advantage of being able to continue to 
use methyl bromide.
    When ornamental crops are produced in open fields, space and timing 
are key issues. Think of a patchwork ``crazy quilt''--with small fields 
containing different types of flowers or foliage, planted at different 
times, with different pest control and other growing requirements. 
Flexibility and adaptability to the needs of each specific type of crop 
are key factors in pest control. As discussed below, for example, 
simply applying an herbicide to one plot of land could mean that that 
land becomes unusable for crops for a time of at least several months. 
We cannot afford to let our land lie idle, with no crops growing on it, 
for those several months. Yet that is what the CUE process, as it now 
stands, would force us to do. We cannot remain competitive, in an 
international market, without being able to use methyl bromide--until 
economic and practical alternatives are found.
    At Mellano & Company, in southern California, we produce over 50 
different crops with upwards of 20 different varieties within a crop. 
New crops are our lifeblood and are being introduced annually at an 
extremely rapid pace, often with only a few years of market appeal. 
Without methyl bromide, we will not be able to respond to these rapidly 
changing market trends. The cost of establishing ornamental crops is 
extremely high--in some crops, costs can exceed $50,000 -$60,000 per 
acre. Methyl bromide helps insure that our investment isn't decimated 
by plant diseases.
    Similarly, for Florida growers, methyl bromide has been one of the 
most crucial tools used by the flower industry. Due to the Florida 
climate, without using a sufficiently clean soil to plant into, growers 
could not compete in the world flower industry. Growing any crop is 
difficult due to a variety of challenges growers deal with every day 
from cold to heat to rain to drought. Florida growers have stated that, 
if they lost methyl bromide tomorrow, they would have to shut down a 
large portion of their businesses, due to the fact that there are no 
practical chemical alternatives. Despite the fact that the whole 
agriculture sector, along with the USDA, have been looking for a 
substitute for years, no suitable substitute has been endorsed by 
anyone involved with that effort.
    We submit, for the hearing record, a copy of the Critical Use 
Exemption Request For Methyl Bromide Use In Cut Flowers And Field-Grown 
Bulbs, prepared by Dr. A. R. Chase on behalf of U.S. flower and foliage 
growers, as their CUE exemption request for the years 2005-2006. That 
report gives an excellent summary of the industry's need for methyl 
bromide.

                           III. ALTERNATIVES

    Our industry, and the U.S. government, have spent hundreds of 
thousands of dollars on research for methyl bromide alternatives over 
the past 20 years--yet no single alternative has yet been found which 
will allow growers to economically and practically replace the use of 
methyl bromide in their complex and ever-changing growing operations. 
Thus, under the terms of the Montreal Protocol, we must still be 
allowed to use methyl bromide. However, it does not appear at this 
point that we will be allowed to do so.
    During the 1960s, as a graduate student at the University of 
California-Riverside, I worked for five years in the laboratory of Dr. 
Don Munnecke, one of the world's leading researchers on methyl bromide 
and methyl bromide alternatives. During that time, we were working on 
many of the alternatives that are still being considered today--
solarization, steam, and alternative fumigants, trying to find 
alternatives from a production and economic point of view. Despite the 
fact that 40 years have intervened, we still have not found 
alternatives that are economically viable, or effective from a 
production point of view.
    In the early 1990s, the California Cut Flower Commission (CCFC) 
took the lead in funding research on methyl bromide alternatives in 
floriculture, by providing $150,000 to begin research projects. Since 
then, CCFC has continued grants over the past 12 years, with hundreds 
of thousands of private industry funds invested in research on 
alternatives. Research has involved everything from alternative 
fumigants, solarization, treatment of soil with steam, microwave or UV, 
soil fertility and amendment with green manures and biological agents. 
The current alternatives include fumigants such as 1, 3-D (Telone), 
chloropicrin, Dazomet (Basamid) and metam sodium (Vapam) applied alone 
and in various combinations. Those are discussed in more detail below. 
In each case, it should be noted that the Montreal Protocol 
requirements of ``practical and economic'' are not met. Nor do 
combinations of these alternatives meet those requirements, at this 
point in time.

Chloropicrin. The efficacy of this chemical is very good on diseases 
        and some weeds. The problem is that it does not work in all 
        cases, nor for all floral crops, so even if we can use it in 
        part, or in specific places, it will not replace methyl 
        bromide. It will simply supplement our use of methyl bromide. 
        It is also extremely toxic--chloropicrin is ``tear gas.''
Telone. Again, the efficacy is very good on nematodes. However, Telone 
        also does not fulfill all our needs, and it has very high 
        toxicity.
Vapam (metam sodium). Metam sodium also has a high efficacy--but it 
        does not work reliably under each our production regimes. Its 
        toxicity is extremely high--and at this point, it is uncertain 
        whether the U.S. Environmental Protection Agency (EPA) will 
        renew the registration, so that it cannot be considered for 
        long-term availability.
Methyl iodide. This chemical is new, and while it has very good 
        potential, it is not yet registered by EPA. Its toxicity is 
        likely to be high.
Herbicides. Various herbicides are available on the market, many of 
        which are very effective. The problems are, again, that if a 
        crop is grown for two or three months in one spot in a field, 
        then to use herbicides on that spot might make it unusable 
        again for growing for several months to several years, 
        depending upon the particular herbicide and the soil 
        conditions. Obviously, that makes reliance on herbicides 
        uneconomic. Again, toxicity is high.
Solarization. This method, which is widely touted by countries arguing 
        against the U.S. exemptions, has only very limited geographic 
        potential use in the U. S. ornamentals industry. When it works, 
        it works well. However, it only works when the soil and climate 
        conditions are just right, so it cannot be considered an 
        alternative.
Steam. Again, the efficacy of steam is good. However, it is technically 
        not feasible at present for field applications. It requires an 
        enormous investment in terms of capital and research costs as 
        to the specific site of use. To install steam at our own 
        operations in California would make our crops uneconomic. Of 
        course, it also requires the use of fossil fuels, with 
        subsequent environmental consequences.
New Application Technologies (various mulches, various formulations). 
        While eventually, sophisticated application and cropping 
        technologies may become usable, they are not yet technically 
        feasible. In any event, most, if not all, application 
        technologies will continue to require the use of methyl bromide 
        as one component.
Crop rotation. Of course, the efficacy is good. However, it requires 
        greatly increased acreage to maintain production. This 
        significant increase in investment makes it impossible to grow 
        the crops we now grow and sell, relying simply on this tool.
Various organic practices. Again, the efficacy can be good, depending 
        upon the specific practice. However, the problem, as with crop 
        rotation, is in the practicability. Organic practices are being 
        integrated more and more into crop production--but, among other 
        things, they usually require a significant increase in labor or 
        other costs, making them uneconomic as well as, at this point, 
        not practical.
Plant breeding/genetic engineering. This alternative is a very good 
        future alternative. Again, however, it will not work in all 
        cases. Moreover, the resistance to acceptance by the general 
        population of genetic engineering makes this alternative 
        extremely unusable at any time in the near future.
    None of these alternatives can give the control of the pests that 
methyl bromide can. They very often require use of additional 
pesticides to improve efficacy. This use of additional pesticides 
results in an increased load on the environment over the current 
scenario. There are, of course, no guarantees that these materials will 
remain available in the future--many alternatives being considered 
today would have to go through a lengthy EPA registration process 
before they were commercially usable. In some cases, the alternatives 
are much more toxic--both to the environment and to workers and perhaps 
even to consumers--than methyl bromide. Our day-to-day workers, for 
example, could be exposed throughout the whole crop cycle.
    Economics: The combination of increased land required for 
production, costs of materials, reduced production, and reduced quality 
makes all of the above alternatives economically infeasible at present. 
Some of these materials are very good alternatives to methyl bromide, 
and are indeed being used and have allowed us to reduce our use of 
methyl bromide, floral and foliage growers in the U.S. still require 
methyl bromide in order to remain internationally competitive.
    It must be noted that our CUE application, as submitted through the 
process to EPA and the MBTOC, takes all of these into account in the 
amounts requested. Our industry is not simply relying on methyl 
bromide. The ornamentals industry is making efforts to move forward 
into the use of alternatives. However, it is not yet economically or 
technically practical for us to do so. Therefore, under the terms of 
the Montreal Protocol itself, our CUE application should be approved.
    The use of chemicals in our industry, in California, in Florida, 
and in other parts of the U.S., is the subject of much research, both 
publicly and privately funded, as growers attempt to move toward more 
environmentally and worker-friendly chemicals and toward integrated 
pest management (IPM) practices, which also reduces our production 
costs. Yet in the case of methyl bromide, our industry is being pushed 
to rely on those more toxic, more harmful chemicals, which runs counter 
to all of the public policy concerns we are discussing and which our 
industry is investing in and is attempting to embrace.

                 IV. THE CRITICAL USE EXEMPTION PROCESS

    Perhaps the most troublesome aspect of the methyl bromide story 
involves the application for a ``critical use exemption.'' The process 
is extremely costly and burdensome, and there are no guarantees that an 
exemption will get through U.S. EPA, let alone that the exemption will 
be gathered by the international review panel. Our major competitors in 
third-world countries, however, will continue to have methyl bromide 
available for their usage for several years beyond the U.S. phaseout.
    The Society of American Florists joined with the California Cut 
Flower Commission and with Florida growers to file a joint application, 
covering uses by ornamentals growers in both California and Florida, 
for the years 2005 and 2006. The application (submitted for the hearing 
record as a part of this testimony) summarized thousands of pages of 
data and research into about 100 pages of ``proof'' that the growers 
represented continue to require methyl bromide.
    The application was submitted to EPA on time, and we understand 
that EPA forwarded some version of that application on to the MBTOC. 
However, we do not know what EPA's ``summary of our summary'' 
contained--or whether EPA's summary adequately states our case. We have 
received follow-up questions from MBTOC that clearly demonstrate that 
the complexity of the floral industry is not understood either by EPA 
or by MBTOC, despite EPA's very diligent efforts to do a good job of 
presenting our application.

V. THE CUE PROCESS SHOULD WORK TO ALLOW U.S. GROWERS TO CONTINUE TO USE 
METHYL BROMIDE--BUT IT IS NOT DOING SO. WHY SHOULD THE FLORAL INDUSTRY 
                        CONTINUE TO HAVE A CUE?

    The U.S. industry has fulfilled the terms of the Montreal Protocol:

1. It has done and continues to do research to find alternatives, as 
        called for in the treaty.
2. It has reduced and will continue to reduce its use of methyl 
        bromide, as economically and technically feasible alternatives 
        become available--as called for in the treaty.
    The Montreal Protocol requires that, where economic and technical 
alternatives are not available, the industry must be allowed to 
continue to use methyl bromide. Our industry does not have economic and 
technically feasible alternatives at this time--therefore, our industry 
should be granted the CUE as requested.
    The fact is that decisions are being made by the international 
treaty body, not based on the complexity of our industry or on the full 
information we have provided in the CUE application, but on a very 
minimal understanding and on a predetermined goal of ``getting us to 
zero use.'' Getting U.S. agriculture to ``zero use'' is not required by 
the Montreal Protocol. All that compliance with this treaty requires is 
that the industry be without economic and practical alternatives. We 
believe that we have well-stated that case--yet our hopes for obtaining 
an exemption, at this point, are not high.
    The bottom line is that the decision will be made on our 
application for 2005-2006, at the Prague meeting of the treaty 
parties--which takes place in November, 2004. We will not know until 
after that meeting (if then, since the Nairobi meeting produced no 
decisions), whether or not U.S. growers will have methyl bromide 
available for crops that need to be planted early in 2005. No industry 
can afford to live with that kind of economic uncertainty--nor should 
it be required to do so.

  VI. WHAT IS HAPPENING AT THE INTERNATIONAL LEVEL THAT MAKES THE CUE 
PROCESS, WHICH IS MANDATED BY THE MONTREAL PROTOCOL ITSELF, BREAK DOWN?

    The discussion and stated agenda at the international meetings (the 
Nairobi meeting last year, the Montreal meeting this spring, the most 
recent Vienna meeting, and most likely the Prague meeting in November) 
is the CUE process. However, the underlying agenda, for many of the 
participants, is completely different--and has nothing to do with the 
Montreal Protocol treaty.
    Two examples:
          Europe. Several northern European countries have banned the 
        use of methyl bromide. Thus, crops which still require methyl 
        bromide have moved into southern Europe or into third-world 
        countries. Even if the product is produced in a third-world 
        country on a farm owned, from a distance, by a European 
        company, that third-world country can continue to use methyl 
        bromide until 2015. Thus, the U.S. grower who wants to keep 
        production in the U.S. is at a competitive disadvantage. 
        Northern European countries are arguing vigorously against U.S. 
        applications for methyl bromide use--based, in many cases, on 
        their own ability to obtain a competitive advantage by doing 
        so.
          China: China is on record as being in favor of barring the 
        production of methyl bromide. However, because China is not a 
        party to the treaty, it can continue to produce the chemical--
        so if production is stopped, it helps them on the world market. 
        It should be noted that China is also moving toward becoming a 
        major producer of horticultural crops--and they will continue 
        to use, and increase their use of, methyl bromide.

                               CONCLUSION

    As a witness, I testified at the June, 2003 hearing before this 
Committee. Many members strongly stated at that hearing that, if the 
international process does not work, this Committee would consider 
legislation. Mr. Chairman, and Members of the Committee, we are at that 
point. The CUE process is not working, and U.S. industry is in danger 
of becoming uncompetitive as a result. The Montreal Protocol itself 
provides that growers must be allowed exemptions if economic and 
practical alternatives are not available. We have shown that those 
alternatives are not available to us. Yet we are NOT receiving the 
exemptions we need. It is time for this Committee to provide 
legislative insistence that will support U.S. growers.
    The United States government must support the U.S. agricultural 
economy in ensuring that methyl bromide remains available to growers, 
until suitable alternatives are found and can be implemented. We cannot 
simply bow to decisions which appear to be predetermined and which will 
put our agricultural sector at a very significant competitive 
disadvantage with growers in third-world countries. The phaseout of 
methyl bromide is a critical issue for U.S. agriculture, and we 
respectfully request this Committee for support and assistance in 
reaching a reasonable solution to what is rapidly becoming a crisis for 
many producers, and the workers they employ across the United States.
    [Additional materiial submitted is retained in subcommittee files.]

    Mr. Hall. That is not asking for too much. Thank you.
    Dr. Wenger.

                    STATEMENT OF PAUL WENGER

    Mr. Wenger. Thank you, Chairman Hall, members of the 
committee, for taking the time today for this very important 
topic. My name is Paul Wenger. I am a third-generation farmer 
from Modesto, California. My family grows almonds and walnuts. 
And I also currently serve as the Second Vice President of the 
California Farm Bureau Federation.
    Last year, Bill Pauly, our Farm Bureau President, was 
before the same committee to testify about the many benefits 
that methyl bromide provide to our agricultural producers, as 
well as the consumers who depend upon us for a safe and 
reliable food supply. So, today I would like to focus not so 
much on those as the CUE process and what Congress should do to 
help solve those problems.
    At the aforementioned hearing before this subcommittee last 
summer, committee members voiced concerns about the 
international treatment of and fairness toward the U.S. 
critical use exemption requests. Then Chairman Barton went on 
to suggest that if the Montreal Protocol process of granting 
CUEs was not improved, the committee would be willing to take 
legislative action. Regrettably, circumstances have not 
improved for U.S. users who have no other choice than to depend 
on methyl bromide. We hope this subcommittee remains open to 
taking legislative action on our behalf.
    The CUE process is designed to provide leave for the most 
critical uses. Producer needs are well documented by the great 
efforts of both the USDA and the EPA. We thank the 
administration for their work. USDA, EPA and the State 
Department have put in tremendous efforts in pursuit of a 
reasonable outcome.
    The 2005 U.S. CUE nomination requested a consumption 
allowance of 39 percent of the 1991 established baseline. This 
spring, the parties allowed the United States only a 35 percent 
CUE based on consumption baselines, and then added a 
requirement that domestic production be capped at 30 percent. 
Nowhere in the Protocol is there any mention of direct 
limitation solely on production. The parties created a new 
requirement. Unfortunately, because U.S. farmers need to have 
an approved CUE percentage to prepare for the 2005 planting 
season, our delegation was effectively forced to accept the 
objectionable terms.
    China and developing nations such as Chile and Mexico will 
have access to methyl bromide until 2015, while the U.S. 
phaseout starts in just a few months. Coincidentally, many of 
these developing nations and China are major competitors with 
U.S. producers in specialty crop markets.
    Many individuals and groups have questioned the legitimacy 
and objectivity of the CUE process. The actions of the parties 
since last summer, most recently in the Working Group meetings 
in Geneva, again confirmed that the international process is 
not objective, transparent, or science-based.
    The Farm Bureau strongly believes that the obstructionist 
actions of some of the international community translate to 
other countries making planting decisions for our U.S. farmers, 
and threatening our competitiveness and economy.
    We have seen and experienced enough of the Montreal 
Protocol process to be convinced that the CUE process, as it 
currently exists, cannot be relied on to fairly evaluate U.S. 
agriculture's legitimate methyl bromide needs.
    The Farm Bureau joins others who believe that improvements 
must be made to the Montreal Protocol CUE process. 
Specifically, first, the CUE process must be science-based and 
fair to all participants. We believe the U.S. Government 
clearly laid out the necessary information to prove that the 
requirements for granting a CUE under the Montreal Protocol 
were met. Unless there is a legitimate scientific question, CUE 
approval should not be open to political negotiation.
    Second, future CUE negotiations should not include 
additional limits or reductions to production. The terms of the 
Montreal Protocol intended for CUE to be granted based on 
consumption, not production. Unfortunately, the parties created 
new Treaty terms by limiting U.S. production of methyl bromide 
to 30 percent of the baseline production. The United States has 
complied with the terms of the Protocol. We believe it is only 
fair the parties do the same by not including production limits 
in the CUE.
    And, third, the international process should allow for 
multi-year CUE requests. U.S. negotiators have proposed this 
concept to the Parties, but so far it has been rejected with 
little debate on its merit. We support a multi-year CUE because 
it would streamline the application process and relieve yearly 
burden on the applicants and agencies. Most importantly, a 
multi-year CUE would allow for better planning among users. 
Better planning leads to more flexibility, and more flexibility 
could lead to further reductions in the need for methyl 
bromide. We have seen and experienced enough of the Montreal 
Protocol to be convinced that there is little hope that the CUE 
process, as it currently exists, can be relied on to fairly 
evaluate American agriculture's legitimate methyl bromide 
needs.
    The Farm Bureau supports H.R. 3403, sponsored by yourself, 
Mr. Chairman, and Congressman Radanovich and 42 other sponsors. 
The legislation would allow use of methyl bromide, as approved 
by the EPA, in accordance with international standards. H.R. 
3403 provides an incentive for the Parties to the Protocol to 
fairly consider future U.S. CUE requests.
    We respectfully request Congress' formal consideration of 
H.R. 3403 to provide fairness and certainty to domestic users 
depending on critical uses of methyl bromide. Further, we 
encourage Congress to support and continue to oversee the 
administration's ongoing efforts to reform the CUE process as 
soon as possible.
    While American farmers have made great strides in achieving 
reduction in methyl bromide, other countries, some Parties to 
the Protocol and some not, continue increasing their usage and 
production of methyl bromide. Despite our best efforts, 
American agriculture has come to a breaking point on further 
compliance with the phaseout. Unfortunately, the actions of 
some in the international community clearly illustrate that the 
Protocol is no longer about ozone protection.
    I thank you for the opportunity, and look forward to any 
questions you may have. Thank you.
    [The prepared statement of Paul Wenger follows:]

 Prepared Statement of Paul Wenger, Second Vice President, California 
Farm Bureau Federation on Behalf of the American Farm Bureau Federation

    Good morning Mr. Chairman, members of the Committee. My name is 
Paul Wenger; I farm in California's Stanislaus County producing walnuts 
and almonds. I am second vice president of the California Farm Bureau 
Federation. On behalf of the thousands of Farm Bureau members across 
the nation who depend on methyl bromide, I thank you for the 
opportunity to address you today regarding our increasing concern about 
the critical use exemption process under the Montreal Protocol.
    Methyl bromide is an indispensable pest control tool used in crop 
production, grain storage, food processing and general pest management. 
For some agricultural users, its availability is essential to providing 
consumers a safe and reliable food supply. As you are aware, non-
critical use of methyl bromide in this country will be phased-out 
starting in January of next year, in compliance with the Montreal 
Protocol as incorporated in the federal Clean Air Act.
    I am here to make three points:

1. Securing the continued, adequate availability of methyl bromide is 
        essential and justified for U.S. users included in the U.S. 
        critical use exemption (CUE) request.
2. The international Montreal Protocol CUE review process is flawed.
3. Congress must act to ensure U.S. farmers have access to the amount 
        of methyl bromide needed to provide consumers a quality and 
        affordable domestic product.

                               IMPORTANCE

    Methyl bromide has two main agricultural uses: fumigation of soil 
prior to planting--called pre-plant treatment; and fumigation of 
harvested commodities and foods--called post-harvest treatment.
    The use of methyl bromide as a pre-plant treatment is essential to 
the production of strawberries, tomatoes, grapes, almonds, walnuts, 
peppers, eggplant and cut flowers. 2003 data suggests that 95 percent 
of strawberry acreage in California and nearly all strawberry acreage 
in Florida uses pre-plant fumigation. Because most domestic market 
supply comes from these two states, the U.S. strawberry industry will 
see some of the most significant projected losses due to the phase-out 
of methyl bromide--an estimated nationwide loss of $131.5 million to 
producers. A collaborative USDA and University of Florida study found 
that a complete ban on farm uses of methyl bromide for annual fruit and 
vegetable crops in California and Florida would result in estimated 
losses of ``about $200 million annually in gross shipping point 
revenues, which represented about 20-30 percent of estimated revenues 
from treated commodities in each state.''
    Where no feasible alternatives exist, pre-plant treatment with 
methyl bromide controls soil-borne fungal pathogens and various pests 
that reduce vigor of newly planted crops. Use of methyl bromide means 
yields improve because the need to hand weed and cultivate soil is 
reduced, allowing for more efficient irrigation. Better yields mean 
better margins, and more financial stability for obtaining next 
season's planting loans.
    Methyl bromide is an important post-harvest treatment used to meet 
sanitary standards set by the Food and Drug Administration and 
importing countries for grains, dry beans, raisins, prunes, figs, 
dates, almonds and walnuts. These products are typically treated before 
and during storage, and prior to being packed or shipped. Storage 
structures, containers and processing facilities are also fumigated to 
ensure food safety.
    For those without feasible alternatives, methyl bromide continues 
to be the only consistently effective and economical treatment that can 
be applied within a flexible timeframe. With rare exception, it works 
every time, all the time.
    Since U.S. ratification of the Montreal Protocol, agriculture has 
devoted tremendous time, money and effort into finding technically and 
economically feasible alternatives for methyl bromide. Public and 
private research efforts are estimated to have totaled over $120 
million. The good news is the U.S. has drastically decreased its non-
essential use of methyl bromide because some alternative treatments are 
now available for some users. The bad news is no feasible alternatives 
exist--or, for that matter, are expected soon--for most of the 
agricultural users currently requesting CUE consideration. Despite the 
claims, there simply is no one-size-fits-all replacement or combination 
of replacements that works as effectively, consistently or affordably 
as methyl bromide.
    In the end, American consumers will suffer greatly from 
agriculture's loss of methyl bromide. The phase-out means the United 
States will increasingly depend on imported food sources that are 
potentially less regulated, less reliable and less safe.

                  MONTREAL PROTOCOL PROCESS IS FLAWED

    At a similar hearing before this subcommittee last summer, 
committee members voiced concerns about the international treatment of 
and fairness towards the U.S. CUE request. Then-chairman Barton went on 
to suggest that if the Montreal Protocol process of granting CUEs was 
not improved, this committee would be willing to take legislative 
action. Regrettably, circumstances have not improved for U.S. users 
depending on methyl bromide. We hope this subcommittee remains open to 
taking legislative action on our behalf.
    The terms of the protocol intend for the CUE process to provide 
relief to agriculture's critical, well-documented need for methyl 
bromide. American users commit huge amounts of time, expertise and 
financial resources in preparing the annual U.S. CUE. With the help of 
USDA, EPA invested unprecedented time and resources into submitting a 
thorough, well-substantiated CUE nomination package to the 
international reviewers. And, in the last year, the State Department 
has expended tremendous effort in advocating for American farmers and 
defending the U.S. CUE request against relentless baseless questioning 
from the parties.
    Farm Bureau commends the administration and expresses our gratitude 
for improved communication with the U.S. delegation to the Montreal 
Protocol for their aggressive pursuit of a reasonable CUE process. The 
parties to the protocol have so far not granted the U.S. the amount of 
methyl bromide we need. The parties continue to consider improvements 
to the CUE process that would provide better certainty for users.
    The 2005 U.S. CUE nomination requested a consumption allowance of 
39 percent of the 1991 established baseline. This spring, the parties 
instead reluctantly ``allowed'' the United States only a 35 percent CUE 
based on consumption baseline, and then added a requirement that 
domestic production be capped at 30 percent. Nowhere in the protocol, 
is there any mention of direct limitations solely on production--the 
parties created a new requirement. Unfortunately, because U.S. 
agriculture had to have an approved CUE percentage to prepare for the 
2005 planting season, our delegation was effectively forced to accept 
the objectionable terms.
    China and ``developing'' countries can continue to use methyl 
bromide long after the United States and other ``developed'' nations 
have been cut off. China and developing nations, such as Chile and 
Mexico, will have access to methyl bromide until 2015 while the U.S. 
phase-out starts in just a few months. Coincidentally, many of these 
developing nations and China, are major competitors with U.S. producers 
in specialty crop markets that use methyl bromide such as tomatoes, 
peppers and strawberries.
    Many individuals and groups have questioned the legitimacy and 
objectivity of the CUE process. The actions of the parties since last 
summer--most recently in the working group meetings in Geneva--again 
confirm that the international process is not objective, transparent or 
science-based. Farm Bureau strongly believes that the obstructionist 
actions of some in the international community translate to other 
countries making planting decisions for American farmers, and 
threatening our competitiveness and economy. We have seen and 
experienced enough of the Montreal Protocol process to be convinced 
that the CUE process--as it currently exists--cannot be relied on to 
fairly evaluate American agriculture's legitimate methyl bromide needs.
    Farm Bureau and other allied groups believe that improvements must 
be made to the Montreal Protocol's CUE process, specifically:

(1) The CUE process must be science-based and fair to all participants. 
        We believe the U.S. government clearly laid out the necessary 
        information to prove that the requirements for granting a CUE 
        under the Montreal Protocol were met. Unless there is a 
        legitimate scientific question, CUE approval should not be open 
        to political negotiation.
(2) Future CUE negotiations should not include additional limits or 
        reductions to production. The terms of the Montreal Protocol 
        intend for CUE to be granted based on consumption, not 
        production. Unfortunately, the parties created new treaty terms 
        by limiting U.S. production of methyl bromide to 30 percent of 
        baseline production. The United States has complied with the 
        terms of the protocol. We believe it only fair the parties do 
        the same by not including production limits in the CUE.
(3) The international process should allow for multi-year CUE requests. 
        U.S. negotiators have proposed this concept to the parties, but 
        so far it has been rejected with little debate on its merit. We 
        support a multi-year CUE because it would streamline the 
        application process and relieve yearly burden on the applicants 
        and agencies. Most importantly, a multi-year CUE would allow 
        for better planning among users: better planning leads to more 
        flexibility and more flexibility could lead to further 
        reductions in the need for methyl bromide.

                     CONGRESSIONAL RELIEF IS NEEDED

    Farm Bureau supports H.R. 3403, sponsored by Representative 
Radanovich and 44 additional co-sponsors. The legislation would allow 
use of methyl bromide as approved by EPA in accordance with 
international standards. H.R. 3403 provides an impetus for the parties 
to the Protocol to fairly consider future U.S. CUE requests. We 
respectfully request Congress' formal consideration of H.R. 3403 to 
provide fairness and certainty to domestic users depending on critical 
uses of methyl bromide.
    Further, we encourage Congress to support and continue to oversee 
the administration's ongoing efforts to reform the Montreal Protocol 
CUE process as soon as possible.
    Although American farmers are drastically reducing use of methyl 
bromide, some parties to the protocol continue to increase their usage 
and production of methyl bromide. Production agriculture has reduced 
the use of methyl bromide to the bare minimum, but we have come to our 
breaking point on further compliance with the phase-out.
    Unfortunately, the actions of some in the international community 
clearly illustrate that the protocol is no longer about ozone 
protection. Rather, rules are being changed to suit the political 
agendas and advantages of other countries--agendas that have nothing to 
do with environmental treaties and everything to do with putting 
American farmers and consumers at risk.
    I thank you for the opportunity to address the subcommittee today 
regarding this complex issue and again voice our concerns over the 
seriously flawed international process governing access to legitimate 
use of methyl bromide for American agriculture.

    Mr. Hall. Thank you very much.
    Dr. Mueller.

                   STATEMENT OF DAVID MUELLER

    Mr. Mueller. My name is David Mueller. I am an entomologist 
and an owner of a small fumigation company in Westfield, 
Indiana. I am also the son of a flour miller who taught me how 
to fumigate flour mills 30 years ago, so I am personally very 
much aware of the needs and issues of the flour millers and the 
food processors.
    At Fumigation Service & Supply, we have used methyl bromide 
for many years, however, we have developed and adopted several 
alternatives to methyl bromide that are now used in commercial 
practice in feed mills, flour mills, pet food plants, and many 
other food processing facilities.
    In recent years, we have replaced over 100 tons of methyl 
bromide in more than 100 structures in the United States and 
Canada. Most of the work that we do, Mr. Chairman, is in 
structures and not soil. Most of those alternatives were 
carried out in flour mills and cereal processing companies. 
These alternatives are technically and economically feasible 
for our industry, and full details are provided in my written 
testimony.
    At Fumigation Service & Supply in Indiana, we still use 
methyl bromide in some of our operations, but we are on line to 
phaseout methyl bromide on December 31, 2004.
    We offer training programs, workshops on alternatives not 
only to our customers, but to our competitors.
    Mr. Chairman, I am concerned about the excessive amounts of 
critical use exemptions and who will control them. Will my 
competitors have whole groups of critical use exemptions to use 
and to pass out at their favor? Here we are 6 months away from 
the time when these critical use exemptions will be used, and 
we don't have a plan on who is going to use them and how many 
will be used in our industry.
    More than 1 million pounds of methyl bromide critical use 
exemptions could be available next year for fumigating flour 
mills and food processing plants in the U.S. I believe this is 
excessive. There are, indeed, effective economical and widely 
available alternatives in the U.S. for this 1 million pounds, 
or 483 metric tons of methyl bromide.
    Our company has reduced its use of methyl bromide 
considerably by using alternatives in real-life field 
applications. We are ready for the scheduled December 31 
phaseout with proven techniques like heat treatment, carbon 
dioxide fumigations, better use of phosphine fumigants, and a 
newly EPA registered fumigant called sulfuryl fluoride. Forty-
seven States have approved sulfuryl fluoride for use in flour 
mills in the United States. With these proven alternatives, I 
am confident that next year we can replace all of the 
applications of post-harvest use of methyl bromide. My company, 
this year, has replaced 24,000 pounds of methyl bromide since 
April, with the newly registered methyl bromide alternative, 
sulfuryl fluoride.
    I am here to report to you that replacements are available 
for post-harvest applications of methyl bromide. I would 
suggest that the U.S. consider adjusting its current critical 
use exemptions requested for mills and processing, in light of 
these proven options.
    Another area that I am very concerned about is stockpiling. 
You can call it what you want, but I call it stockpiling. 
Stockpiling is a type of legal smuggling. I believe that methyl 
bromide stockpiles are higher than the 5 percent currently 
estimated in 2005 discussions. I believe that stocks should be 
investigated and quantified by an independent organization. It 
is important to find out the true situation before any 
decisions are made about additional manufacture and imports of 
methyl bromide in 2005.
    If you think about it, these stockpiles that are going into 
warehouses, that are going into tanker cars, could be used not 
just for the next couple years, but for 20 years from now, 
legally, throughout the country.
    Mr. Chairman, I continue to hear over and over again that 
developing countries like Mexico are providing an uneven 
playing field against American agriculture. I have not found 
that to be true. During the last 10 years, I have had the 
privilege to work with United Nations and the World Bank as a 
fumigation expert in developing countries. I have worked on 
three continents. I have worked with countries like Vietnam, 
Malaysia, Jamaica, Ivory Coast, Zimbabwe, Mexico, Mauritius, 
Philippines, Turkey, and most recently Thailand, on phaseout 
and demonstration projects for post-harvest applications.
    Two weeks ago, I was working in Thailand, in Bangkok, with 
the Department of Agriculture there, and the World Bank, to 
develop a complete phaseout strategy, including soil, for 400 
tons of methyl bromide in this Article 5 country. This country 
and its stakeholders are supportive of the Montreal Protocol 
because the phaseout path, the pathway for phaseout in 
developing countries, was made by CFCs and some of the other 
programs before methyl bromide came along. My experience is 
that developing countries are very serious in their efforts to 
phaseout methyl bromide. Since 1998, they have reduced their 
methyl bromide usage by 37 percent. The quicker we work with 
developing countries like Thailand and Mexico to find 
alternatives, the more it will help the American fumigators and 
the American farmers.
    As an American, I always get one question when I go to 
these developing countries. The question is, ``Why does America 
need so many critical use exemptions?''
    In conclusion, Mr. Chairman, I would like to raise an 
important question. Why should companies that have met the 
challenge of developing and adopting methyl bromide 
alternatives be punished by these excessive critical use 
exemptions and an uncontrolled stockpile?
    My company, and others, have invested our time, our effort, 
and our research into alternatives. I calculate that our 
company has invested over $250,000 developing new ways to 
fumigate without methyl bromide. This $250,000 could have been 
used for other needs to run a small business.
    We have acted responsibly and taken prompt action to adopt 
alternatives. I therefore ask why should the ``can't do' 
companies with the ``wait and see'' strategy receive favored 
treatment with these excessive critical use exemptions? Why 
would Congress want to penalize companies such as mine that 
have acted responsibly? We have all had 10 years' notice to 
this issue.
    Finally, Mr. Chairman, if the United States now grants 
unjustified, excessive methyl bromide critical use exemptions 
to companies that did not bother to act responsibly, this 
action will be exceedingly unfair to companies that acted 
responsibly by adopting alternatives. Thank you.
    [The prepared statement of David Mueller follows:]

Prepared Statement of David Mueller, Fumigation Service and Supply Inc.

    My name is David Mueller. I am a Board Certified Entomologist and 
owner of a family fumigation company in Westfield, Indiana. I am also 
the son of a flour miller who taught me how to fumigate over 30 years 
ago, so I am personally very aware of the needs and issues facing 
millers. At Fumigation Service & Supply, Inc. we have used methyl 
bromide (MB) for many years. However, we have developed and adopted 
several alternatives to MB that are now used in commercial practice--
for fumigating flour mills, rice mills, pet food plants, and other food 
processing structures. In recent years we have replaced over 100 tons 
of MB in more than 100 structures in the United States and Canada. Most 
of those alternative fumigations were carried out in flour mills and 
cereal processing companies. These alternatives are technically and 
economically feasible for our industry--full details are provided in my 
written testimony.
    We still use MB in some operations--when customers request it. But 
we also have alternatives available for all our MB fumigations, if 
customers are willing to use them.
    Over 1 millions pounds of methyl bromide Critical Use Exemptions 
(CUE) could be available next year for fumigating flour mills and food 
processing plants in the US. I believe this is excessive. There are 
indeed effective, economical, and widely available alternatives 
available in the US for these one million pounds (483 MT) of MB.
    Our company has reduced its use of MB considerably by using 
alternatives in ``real-life'' field applications. We are ready for the 
scheduled December 31, 2004 phase out date with proven alternatives 
like heat treatments, carbon dioxide fumigations, better use of 
phosphine fumigants, and a newly EPA registered fumigant called 
sulfuryl fluoride. With these proven alternatives, our company is 
confident that we can replace all post harvest uses next year.
    My company has replaced 24,000 lbs. of MB since April with the 
newly registered MB alternative sulfuryl fluoride. I am here to report 
to you that replacements are available for post harvest applications of 
MB.
    Stockpiling is a type of ``legal smuggling.'' Stockpiling should be 
carefully investigated by EPA and the exact amount of gas should be 
deducted from the critical use exemption totals each year. In the 
fumigation sector it is normal to have stockpiles that are only a small 
fraction of the total annual turnover. These stockpiles could be used 
20 years from now.
    I believe that the MB stockpiles are much higher than the 5% 
currently estimated in the 2005 discussions. I believe that the stocks 
should be investigated and quantified by an independent organization. 
It is important to find out the true situation before any decisions are 
made about additional manufacture and imports of MB for 2005.
    Mr. Chairman, I continue to hear over and over again that 
developing countries like Mexico are providing an uneven playing field 
against America's agriculture. I have not found that to be true. The 
quicker we work with developing countries like Mexico to find 
alternatives the more it will help our American fumigators and farmers.
    During the last ten years I have had the privilege to work with the 
United Nations (UNIDO, UNDP, UNEP) and The World Bank as a ``Fumigation 
Expert'' in developing countries. I have written MB demonstration and 
phase out programs for Vietnam, Malaysia, Jamaica, Ivory Coast, 
Zimbabwe, Mauritius, Philippines, Turkey, and most recently Thailand.
    Earlier this month I worked in Thailand with their Department of 
Agriculture and The World Bank to develop a complete phase out strategy 
for 400 tons of MB in this Article 5 country. Most of the MB used in 
Thailand is used to fumigate rice. Thailand is the largest exporter of 
rice in the world. This country and its stakeholders are supportive of 
the Montreal Protocol and the need to eliminate this serious ozone 
depleting substance as they did previously with their CFC phase out 
projects and previous MB demonstration projects. My experience is that 
developing countries are very serious in their efforts to phase out 
MB--since 1998 they have reduced their MB usage by 37%.
    As an American, I always get one question when I am visiting 
developing countries: ``Why does your country need so many 
exemptions?''
    For structures like mills and food processing facilities the main 
economic issue is downtime--the length of time for which an operation 
has to close down for fumigation. But our customers' experience of 
alternatives clearly shows that the downtime is similar for MB. In 
fact, the downtime of these alternatives is sometimes shorter. Last 
month I was fumigating a large flour mill in Indiana with sulfuryl 
fluoride that took 10% less time to fumigate than MB. This is valuable 
time for the millers and the maintenance workers to get back in and get 
the mill running.
    In conclusion, Mr Chairman, I would like to raise an important 
question: Why should companies that have met the challenge of 
developing and adopting MB alternatives be punished by these excessive 
critical use exemptions?
    My company--and others--have invested our time, effort, and 
research into alternatives. Since first hearing about MB being a 
serious ozone depleting substance right here in Washington D.C. by 
NASA's Dr. Robert Watson ten years ago, I calculate that our company 
has invested over $250,000 dollars developing new ways to fumigate 
without MB. This $250,000 could have been used for other needs to run a 
small business. We have acted responsibly and taken prompt action to 
adopt alternatives. I therefore ask why should the ``Can't Do'' 
companies with the ``wait and see'' strategy receive favored treatment 
with these excessive CUEs? Why would Congress want to penalize 
companies, such as mine, that have acted responsibly? We have all had 
10 years notice on this issue--we all have had plenty of time to adopt 
alternatives by now.
    Finally, Mr.Chairman: If the US government now grants unjustified, 
excessive MB critical use exemptions to companies that did not bother 
to act responsibly, this action will be exceedingly unfair to companies 
that acted responsibly by adopting alternatives.

              ADDITIONAL INFORMATION IN WRITTEN TESTIMONY

How Do We Phase Out Methyl Bromide?
    ``Man has done something to damage the ozone layer over the earth 
and man can do something to correct this problem.'' (Dr. Robert Watson, 
NASA)
    Recently, the ozone hole over the southern hemisphere was 72 times 
larger than Texas and 15 times larger than the United States. The 
intense sunshine we are feeling outside now in Washington D.C. is much 
more intense in places like Argentina with a burn time of 30 minutes or 
Melbourne with a burn time of 60 minutes. This is a planet-wide problem 
and the United States is the largest dumper of ozone depleting 
substances in and throughout the world, while the U.S. feels little 
effect so far.
    If one observes NASA's ozone maps from the TOMS satellites, one can 
quickly see that ozone depletion remains a real problem (http://
toms.gsfc.nasa.gov/eptoms/dataqual/ozone.html). The first step in 
correcting the problem is to develop a ``can do'' attitude and move 
forward using skills and educational knowledge to replace methyl 
bromide. MB users can copy others who have already eliminated MB 
successfully, by transferring and adopting alternatives that are used 
with good effect by similar companies. While MB is a useful agriculture 
and post harvest biocide but it harms the protective layer that circles 
the earth. It also increases prostate cancer in MB applicators 
according to the National Cancer Institute (American Journal of 
Epidemiology, 2003, 157(9); National Cancer Institute Division of 
Cancer Epidemiology and Genetics: http://ens-news.com/ens/may 2003/2--
3-05-02-02.asp).
    To allow Critical Use Exemptions and uncontrolled stockpiling will 
not cure the problem. This retards progress, defeats efforts of 
developing countries, and damages the image of the United States in the 
rest of the world.

Meeting the Challenge
    In 1991 our country was charged with a responsibility to protect 
our ozone layer while we also protect our food supply. Some have 
stepped up to the challenge with research and development of 
alternatives. Others choose to take no action but hide behind lawyers, 
associations, and lobbyists. Where is the incentive to protect the 
environment in this sector? What message does this offer to our 
international partners and our customers? Why would the US want to 
support continued use of a known ozone depletor and prostate 
carcinogen?

Alternatives to Methyl Bromide
    I wish to provide a summary of some of the proven Methyl Bromide 
alternatives:

Structural Fumigations
    a) Heat Treatments (140 F for 16-24 hours, combined with IPM), 
Used by US Companies such as: General Mills, Quaker Oats, Nestle 
Purina, Pillsbury, Lauhoff, various milling companies. Estimated 10% of 
the milling and food processing industry uses heat to disinfest 
structures.
    b) Combination Fumigation Method (Heat, CO2, Phosphine 
for 24-36 hrs), Cost is similar to MB; $18.00/ 1000 cubic feet vs. 
$20.00 for MB.
    73 alternative fumigations performed by July 2004 (US, Canada, 
Italy, Denmark, Germany). An estimated 100 tons of MB has been replaced 
with the Combination Fumigation Method.
    c) Sulfuryl Fluoride, ProFume TM. Registered by the US 
EPA1/2004, registered in 47 states in the US by July 2004. 24-48 hours 
exposure, cost is similar to MB.
    US Companies: ProFume has the ability to replace methyl bromide on 
most flour mills and structure fumigations in the US that have applied 
for over 1,000,000 lbs. of MB for CUEs.
    d) IPM, integrated pest management. After a structure has been 
fumigated and the pest population is lowered to near zero. IPM works 
well for the post harvest industries. The goal is to reduce or 
eliminate the need for fumigations by denying pests harborage and food.
    Some US companies have not fumigated with MB in over 10 years. This 
committee needs to ask how they did it. Many mills and food processing 
companies in the US and other countries produce food to very high 
quality standards, by using technically and economically viable MB 
alternatives.

Flour Mill Case Study
    As one illustration, here is a case study on MB phase out in a 
large flour mill in Indiana. Four years ago, this flour mill was 
fumigated three times per year with MB. Understanding the challenge of 
MB phase out and investigating alternatives for MB, they adopted 
alternatives. They achieve a better fumigation of their inbound wheat 
with cylinderized phosphine (ECO2FUME). The management has improved its 
integrated pest management program with improved hygiene throughout the 
mill. This step helped the mill reduce the need for structural 
fumigations from three MB fumigations per year to once per year. In 
addition to helping the earth's ozone layer, this pest management 
program saved four extra days for running the mill each year: a big 
saving. Sanitation has been improved with better construction designs, 
also helping to reduce pest problems. Monitoring and inspection is a 
major part of the program.
    In June of 2004 this large flour mill used ProFume gas fumigant for 
the first time. The fumigation gave excellent results in the same 
amount of time as one MB fumigation (22 hours). The final step of 
phasing out MB took a commitment from management and a ``can do'' 
attitude by all employees. This flour mill demonstrated that they don't 
need MB any more.
    The total impact will be saving about 6,000 lbs. MB per year. [- is 
6,000 lb for 1 fumigation or 3 fumigations? Need to state figure for 3 
MB fumigations per year] It also provides four extra working days for 
the mill each year, which has great value to the milling company.
    There are 220 flour mills similar to this one in the US, that can 
also phase out MB. Fumigation Service & Supply, Inc. has performed 18 
other Profume fumigations with similar results.

Shutdown time
    The real cost for a large manufacturing plant is the cost of being 
inactive. These alternatives are faster or equal to the shutdown time 
of MB of 24-48 hours. This is a very important point. The alternatives 
available now allow companies to get back to work quickly, so they do 
not lose time/profits. Companies that use MB more than once a year can 
save valuable shutdown time by switching to alternatives.

Safety
    Methyl bromide is a biocide that can burn humans and has been shown 
to cause prostate cancer in a very large epidemiological study. Most MB 
fumigations begin inside the building with release by hand by two 
fumigators with self-contained breathing apparatus. The new 
alternatives to MB require gas application applied from outside the 
confined space. The fumigant under pressure inside steel cylinders is 
directed with tubing to the exact location that needs the fumigant. 
More fumigant can be added easily with this outdoor method. Whereas, 
the risk of MB exposure is high when fumigators have to re-enter the 
building to add more MB. Methyl Bromide is colorless and odorless and 
will burn skin on contact. I know first hand. I spent eight days in a 
burns hospital in 1985 from MB exposure to my feet and legs.

Commodity Alternatives
    a) Grain--Eco2Fume TM Phosphine fumigant. 
This cylinderize phosphine fumigant allows for better and cheaper 
fumigations on stored grain than MB. (EPA registered in August 2000 as 
``Fast Track'' alternative to MB)
    b) Dry Fruit and Tree Nuts: Eco2Fume TM 
Phosphine fumigant. This new formulation of phosphine allows for re-
dosing phosphine in case of leakage or bad weather. Since the US EPA 
registered it in August 2000, Eco2Fume has proven to be an excellent 
commodity fumigant. Research is currently underway to improve this 
formulation to be less expensive than the solid formulation by using 
100% phosphine in a cylinder and mixing it with air/CO2.
    c) CPM, Commodity Pest Management is a method of keeping grain and 
other commodities in favorable conditions to prevent pests from 
becoming a problem.
    U.S. Industries: Popcorn, Seed, Bird food
    d) Sulfuryl Fluoride, ProFume Fumigant Gas, Dow AgroSciences LLP 
has registered this fumigant for use on grain and specialty commodities 
including dried fruit and tree nuts.
    e) Storicide TM, This newly registered grain protectant 
uses Reldan TM and Tempo TM in combination much 
like malathion used to do. This technique could replace fumigation on 
wheat and other small grains.
    f) Spinosad TM, Dow AgroSciences has been researching 
the use of the proven biological pesticide called Spinosad as a grain 
protectant. Registration is pending on grain. University field research 
has shown this technique to be effective in replacing fumigants .
    g) Diacon II TM, This IGR has received exemptions from 
tolerances for application to food and grain. This allows a registered 
pesticide to be incorporated in food that is eaten by the consumer. 
IGRs will play an important part in future IPM programs.

Ships / Barges / Railcars
    Empty ship holds: heat, phosphine, sulfuryl fluoride, contact 
insecticides
    Ships/barges: phosphine (in transit)
    Railcars: phosphine (in transit)
    Trucks: phosphine (static), sulfuryl fluoride (under review) [???]
Tarpaulin Fumigation
    Inert Gases: carbon dioxide, nitrogen, argon, ozone (slow killing)
    Phosphine: (48-72 hours above 80 F))
    Phosphine and heat: (35-40C): 24-48 hours
    Sulfuryl fluoride: (24-36 hours)

     Methyl Bromide Alternatives Comparison for Commercial Structure
                               Fumigations
------------------------------------------------------------------------
                                   Duration      Estimated costs* US$per
          Treatment                (hours)             1000 ft.\3\
------------------------------------------------------------------------
Methyl Bromide...............  24-48 hours....                   $20.00
Heat +CO2+PH3................  24-48..........                   $18.00
Year round IPM...............  replacing the
                                need to
                                fumigate.
Fogging + IGRs...............  2-24...........                    $3.00
ECO2FUME.....................  48-96..........                   $12.00
ProFume (sulfuryl fluoride)..  24-48..........                   $26.00
Heat treatment...............  24-48..........             $20.00-40.00
------------------------------------------------------------------------
*including labor and sealing


    Mr. Hall. Thank you, sir.
    The Chair recognizes Mr. Doniger.

                   STATEMENT OF DAVID DONIGER

    Mr. Doniger. Thank you very much, Mr. Chairman. I want to 
continue building on the last speaker, who has injected some 
facts and data into this discussion. There have been a lot of 
claims, with few facts and data. Let me talk about the data 
that has been discussed earlier today, which came from the EPA 
in a Freedom of Information Act response, through a request 
NRDC had made.
    This data, which is on the consumption of this chemical, 
and on the use of this chemical, calls into question the 
exemption asked for for 2005, and the exemption being asked for 
now in 2006. In short, these data show that the phaseout is 
working far better than industry or the Government has 
acknowledged, and that means that farmers, millers, and other 
users of this chemical need far smaller exemptions than the 
U.S. Government is now seeking.
    Now, I want to emphasize that I am not opposing all 
exemptions. It is the size and the unnecessary amount that is 
wrong here.
    Now, this data show--and I am going to hold up this chart 
which is attached to my testimony, it is an EPA chart--it shows 
that every year in the phaseout process, the production and 
consumption of this chemical has been below the allowed amount. 
In 2003, when the limit went down to 30 percent, the 
consumption was only 25 percent. Mr. Holmstead told you this 
morning that this is a number that the EPA stands behind as a 
strong number.
    This is 5 percent less than the amount--in 2003, 5 percent 
less than the amount the U.S. Government asserted was essential 
2 years from then. And at the same time, the producers and 
distributors have accumulated a large stockpile of methyl 
bromide. And Mr. Holmstead and others took exception to the use 
of the term ``stockpile.'' I refer to the letter the EPA sent 
Chairman Barton on February 10--an excerpt of which is also 
attached to my testimony--which says, ``stockpiling has indeed 
taken place.'' From that letter, one can estimate how big this 
stockpile is. It is at least 10,000 tons of methyl bromide. It 
is at least 22 million pounds. Further evidence of how big it 
is is this blacked out number in the other page that came from 
the EPA, it is five columns wide. The smallest number which is 
five columns wide is 10,000. We don't know how big this number 
is.
    Mr. Holmstead also asserted today that the number was 
confidential. It should be noted that EPA has never ruled that 
this number is, in fact, properly confidential. Under the FOIA 
regulations, EPA does not rule on whether a confidentiality 
claim is valid until there is a FOIA request for the records 
that contain the data. And EPA's regulations set out a 
procedure for deciding whether the claim is valid when a FOIA 
claim request is made. Our FOIA request has triggered that 
process. EPA has never decided whether the aggregate data or 
the specific data is, in fact, validly confidential under the 
Freedom of Information Act, the Clean Air Act, and its own 
regulations. The EPA's response to the FOIA request is overdue 
but, as I said, from what the EPA told the Congress and what 
you can infer from the blacked out numbers here, there is a 
stockpile of at least 10,000 tons or 22 million pounds, which 
is bigger than the request made for 2005 and bigger than the 
request made for 2006.
    The fact that it was possible to accumulate a stockpile 
while the production and consumption were actually below the 
authorized limits tells you something important about use. It 
tells you that total usage has been below the amount that has 
been produced over the last 5 to 10 years, and below the amount 
by such an amount that this huge stockpile has accumulated.
    Now, it does appear from the EPA data which you have, that 
there may have been, for the first time, a drawdown of the 
stockpile, so that the numbers on this page that Mr. Allen and 
Ms. Capps have and referred to earlier, indicate that the 25 
percent that was produced and imported last year, plus the 
difference in the size of the inventory from 2002 to 2003, 
another 5 percent, suggests that the total usage in the United 
States in 2003, 2 years ahead of the exemption year, was 30 
percent. It is very difficult for me to understand why the 
request for the exemption years is higher than the use in 2003, 
especially in light of the existence of this enormous 
stockpile.
    So, this leads to important conclusions. For one thing, a 
lot of the complaining about the Montreal Protocol process is 
totally off-base. The parties have been asking the questions, 
and the technical panel has been asking the questions that the 
growers and the U.S. Government refuse to ask themselves--how 
much stuff is actually needed--and they have been paring back 
the numbers a little bit in recognition of the dubiousness of 
the claims of exemption need.
    Now, the EPA is required under the Clean Air Act to hold a 
rulemaking this year, and in that rulemaking--this is for the 
2005 exemption--EPA is required to consider whether in light of 
the declining use there needs to be so much authorized for 
2005, and required to consider in light of the stockpile 
whether we need to produce the full 30 percent, or even any 
methyl bromide, next year. And the parties are engaged in the 
same inquiry for 2006. So, you have this domestic process 
that's during the rest of this year for 2005, and an 
international one going on the rest of this year with respect 
to 2006.
    Allow me two quick comments to close. First, on the idea of 
a multi-year proposal, I am not, on NRDC's behalf, entirely 
opposed to the idea of a multi-year proposal, not in concept. 
But the question is, does the proposal start, like the 
nominations for 2005 and 2006, at levels way above consumption 
and use in previous years, without a guarantee against this? 
Any multi-year proposal, just like an annual proposal, has to 
be a non-starter.
    And the second thing is, does the multi-year proposal 
provide for year-by-year reductions, steep year-by-year 
reductions, so that we get toward the objective of zero?
    In the past, the United States has proposed a multi-year 
exemption with a trivial slope in it, basically no reduction 
from year-to-year, and even though it talks in this proposal 
about having an interim increase, and that makes a multi-year 
proposal like that a non-starter.
    Finally, let me comment on H.R. 3403. This bill would take 
truly an extraordinary and unilateral step of declaring that 
all U.S. exemptions, if deemed approved, even if they had been 
rejected under the Montreal Protocol, and this would place the 
U.S. in violation of a treaty supported by the last three 
Presidents, starting with Ronald Reagan, which our country has 
ratified and legally bound itself to follow. I might add that I 
checked my memory while sitting here, China is a Party to this 
Treaty as well, and China has ratified the agreements that 
pertain to methyl bromide, let me correct that part of the 
record from earlier.
    The bill would put more people at risk of cancer. It would 
ignore rapid progress that has been made. My last two 
sentences, sir. It would punish responsible companies. It would 
force the U.S. to thumb its nose at yet another treaty, at a 
time when our country needs the broadest international 
cooperation, and it would expose U.S. businesses to billions of 
dollars in trade sanctions. I urge you not to move that 
legislation. Thank you.
    [The prepared statement of David Doniger follows:]

 Prepared Statement of David Doniger, Natural Resources Defense Council

    Mr. Chairman, thank you for the opportunity to testify on the 
phase-out of methyl bromide, on behalf of the Natural Resources Defense 
Council (NRDC) and its more than 500,000 members.
    There are few more heartening success stories than the global 
effort to phase out the ozone-damaging chemicals. Every American, and 
every citizen on this Earth, relies on the ozone layer to block 
dangerous ultraviolet radiation that causes skin cancer, cataracts, 
immune disorders and other diseases. The Montreal Protocol--which has 
enjoyed bipartisan support from three presidents, beginning with Ronald 
Reagan--is saving literally millions of Americans, and tens of millions 
of people around the world, from death and disease and preventing 
billions of dollars in economic damages--including UV-related crop 
losses.
    Yet the ozone shield directly over our heads has been weakened by 
ozone-depleting chemicals increasing our exposure to dangerous UV 
radiation. Millions of Americans--including farmers--must work everyday 
in the sun. Millions more--from school children to seniors--spend hours 
of their days out of doors. Millions of concerned parents check the UV 
Index and cover their kids with sunscreen before letting them go out in 
the sun.
    Methyl bromide is the most powerful ozone-depleter still in 
widespread use. All of other potent ozone-destroying chemicals have 
been successfully eliminated. Methyl bromide also has been linked to 
increased prostate cancer risks in a study of 55,000 pesticide 
applicators, including farmers, nursery workers, and workers in 
warehouses and grain mills. Phasing out methyl bromide is the single 
most important thing we can do to hasten repair of the ozone layer, as 
well as protect those directly exposed. Now is not the time to tamper 
with the methyl bromide phase-out requirements under Montreal Protocol 
and the Clean Air Act.
    Last week I attended the Montreal Protocol negotiations in Geneva 
on critical use exemptions for methyl bromide in 2006. NRDC has been an 
accredited observer at those meetings for nearly 20 years. At the 
meeting, I called attention to important U.S. government data that NRDC 
obtained in June under the Freedom of Information Act. I would like to 
share these data with this Committee today.
    These data show that U.S. methyl bromide consumption and use have 
already been cut well below the critical use exemption levels requested 
by the U.S. The data call into question the basis of the exemption 
granted at the Extraordinary Meeting in March for 2005 and the 
exemption requested this year for 2006.
    In short, these data show that the phase-out of methyl bromide is 
working--far better than industry or government has acknowledged. And 
that means farmers, millers, and other users of this chemical need far 
smaller exemptions than the U.S. government is now seeking.
    The good news is that U.S. methyl bromide consumption has declined 
sharply.

 The data show that U.S. consumption in 2003 was just 25% of the U.S. 
        1991 baseline level (6,507 metric tonnes or 14.3 million 
        pounds), even though the Montreal Protocol and the Clean Air 
        Act permitted 2003 consumption at 30% of the baseline level. 
        (``Consumption'' is defined as national production plus 
        imports, minus exports.)
 U.S. methyl bromide consumption has been well below the applicable 
        limits in each year going back to the start of the phase-out. 
        (See page 2 of the attachment, from the June 18, 2004 FOIA 
        response.)
    At the same time, however, U.S. producers and distributors have 
accumulated a large stockpile of methyl bromide.

 The Subcommittee will recall that in a letter to Chairman Barton 
        dated February 10, 2004, EPA indicated that it had obtained 
        data on methyl bromide stockpiles from a number of companies 
        using its information collection authority under the Clean Air 
        Act. (The letter is reprinted in the record of last year's 
        hearing.) EPA's letter stated that ``stockpiling has indeed 
        taken place.'' Yet the letter provided only ``qualitative'' 
        information on the amount of the stocks, on the grounds that 
        the entities from which EPA had obtained the data had claimed 
        it to be confidential business information.
 From this letter it was nonetheless possible to deduce that those 
        stocks were larger than the exemptions sought for 2005. Though 
        EPA has not yet disclosed exactly how much, we can be sure that 
        it is at least 10,000 metric tonnes (22 million pounds)--at 
        least 40% of the U.S. baseline--and may be much higher. (See 
        page 4 of the attachment, explaining the basis of this 
        estimate.)
    It should be noted that EPA had not then, and still has not, ruled 
upon whether those claims of confidentiality are legally or factually 
valid. Under EPA's FOIA regulations, the agency typically does not rule 
upon the validity of confidentiality claims until there is a FOIA 
request for records containing the pertinent data. EPA's FOIA 
regulations set out a procedure for making a determination on the 
validity of such confidentiality claims, which is triggered by the 
filing of a FOIA request. NRDC has requested this stockpile data from 
EPA under another Freedom of Information Act request, a response to 
which is now overdue. We continue to press for disclosure of this data 
without further delay.
    The fact that it has been possible to accumulate a stockpile 
necessarily means that total usage by growers and other users during 
the phase-out has been even lower than the U.S. national consumption. 
In other words, all of the methyl bromide currently held in stocks 
represents production from previous years that has not yet been used.
    A stockpile of at least 10,000 tons is far larger than needed to 
meet normal inventory needs. Common practice in the chemicals industry 
is to keep inventories at only a fraction of annual demand. The methyl 
bromide stockpile greatly exceeds annual demand.
    The data obtained in June suggests that in 2003 U.S. users may have 
drawn upon the stockpile for the first time.

 The data indicate a draw down of the known inventory by some 1167 
        tonnes (2.6 million pounds) in 2003, bringing total U.S. use to 
        about 30%. (See page 3 of the attachment, from the June 18 FOIA 
        response.)
    The most important observation to draw from this data is that the 
U.S. consumption and use in 2003 are already below the upper limits 
allowed in the March decision on 2005 exemptions.

 U.S. 2003 consumption was 5%--some 1600 tonnes (3.5 million pounds)--
        below the upper limit on 2005 consumption set forth in the 
        March decision.
 U.S. 2003 use was 5%--again some 1600 tonnes (3.5 million pounds)--
        below the upper limit on 2005 critical uses set forth in the 
        March decision.
    In press reports, and again in the Geneva meeting, representatives 
of the U.S. government have responded to this data by suggesting that 
it may not accurately capture all of usage of methyl bromide in 2003. 
That would raise some interesting and troubling questions.

 We presume that the consumption data are accurate. Consumption must 
        be accurately tabulated and reported under both U.S. law and 
        the Protocol.
 The only other possibility is that in 2003 farmers and other users 
        drew upon even larger amounts of stockpiled and inventoried 
        methyl bromide--amounts above-and-beyond the stockpile data of 
        which EPA is aware. That would underline the need for far 
        better data collection on this critical question of stockpiles.
    These facts lead to important conclusions for both 2005 and 2006.

 The Protocol Parties, including the United States, have twice decided 
        that parties must use available stocks to meet critical use 
        needs before they may allow more methyl bromide production. 
        (See the 1997 critical use criteria decision, Protocol Decision 
        IX/6, and the critical use decision from March 2004, Protocol 
        Decision Ex.I/3. A copy of each of these decisions is 
        attached.)
 For 2005, the March decision of the Parties (Ex.I/3,  5) provides 
        for each country with a critical use exemption to take into 
        account up-to-date information on use levels and stockpile 
        availability in its domestic licensing decisions.
 In the U.S., domestic licensing of 2005 production and critical use 
        must be made through a regulation under a rulemaking required 
        under Section 7671c(d)(6) of the Clean Air Act. That regulation 
        has not yet been proposed.
 To comply with the March exemption decision and the Clean Air Act, 
        EPA will have to reduce 2005 critical uses below the 35% 
        ceiling set in the March decision to reflect the progress in 
        reducing use that was already made by 2003. Likewise, EPA will 
        have to reduce 2005 production and consumption below the 30% 
        ceiling set in that decision to reflect the availability of 
        existing stockpiles of methyl bromide.
    For 2006, the Protocol Parties will need to do likewise. They will 
need to decide how much critical use and consumption to permit the U.S. 
in light of the progress already made in the U.S. and the existence of 
the very large stockpile. There is every reason to expect further 
progress in adopting alternatives between 2003 and 2006.
    Allow me to comment on the proposal that the U.S. tabled in Geneva 
to allow multi-year critical use exemptions. It is my understanding 
that this is, in effect, a proposal for 2007 and beyond--and that the 
2006 decision will need to be taken on a single-year basis. In any 
event, NRDC believes the attractiveness of a multi-year exemption 
decision depends on two rather central details:

 Does it start (like the U.S. nominations for 2005 and 2006) at a 
        level well above consumption and use in earlier years? Without 
        guarantees against this, the proposal should be viewed as a 
        non-starter.
 And does it provide for steep year-by-year reductions? If it would 
        allow only trivial annual reductions, or even increases in 
        interim years, that is another reason it should be considered a 
        non-starter.
    Let me turn to some observations on H.R. 3403, which is pending 
before this Committee. This bill would take the extraordinary and 
unilateral step of declaring that all U.S. exemption applications are 
deemed approved even if they have been rejected under the Montreal 
Protocol. This would place the U.S. in violation of the Montreal 
Protocol, a treaty supported by last three Presidents, starting with 
Ronald Reagan, which our country has ratified and legally bound itself 
to follow. The bill would put more people at risk of cancer. It would 
ignore the rapid progress actually being made. It would punish the 
responsible companies, university researchers, and growers who have 
invested time and money into developing and adopting safer 
alternatives. It would force the U.S. to thumb its nose at another 
important treaty obligation precisely when our country needs the 
broadest possible international cooperation. And it would expose 
American businesses to billions of dollars in trade sanctions.
    I cannot conclude without a word on an issue I raised last year--
the still-pending regulatory proposal to vastly expand the amount of 
methyl bromide used for quarantine purposes. The U.S. Department of 
Agriculture (USDA) is nearing promulgation of a regulation that would 
require treatment of all raw wood packing material imported into or 
exported from this country. If promulgated, the new rule will lead to a 
massive and unnecessary increase in the amount of methyl bromide used 
for quarantine fumigation.
    As I reported last year, the rule could result in a massive 
increase in methyl bromide use--by more than 102,000 tons per year 
according to a USDA Environmental Impact Statement. That would increase 
current world use for quarantine purpose by 10 times and triple total 
world use of methyl bromide for all purposes.
    In 1999, USDA publicly committed to study and consider phasing out 
raw wood packing material and phasing in alternative packing materials 
instead of ordering huge increases in methyl bromide use. But since 
then USDA has broken its commitment to consider the option of phasing 
out raw wood packing. The department's EIS and its proposed rule 
contain not a word examining this option. One USDA official sought to 
comfort me by saying that the study of moving to alternative packaging 
materials ``had not been abandoned, only shelved.''
    If this regulation is issued, it will more than undo all the good 
that has been done by farmers, millers, and others to reduce methyl 
bromide use and its threat to the ozone layer. We have signaled USDA 
that we would cooperate with the agency and industry in a reasonable 
effort to move to alternative packaging materials, and we could even 
accept some use of methyl bromide fumigation of current raw wood 
packaging as an interim measure. But we have also served notice that we 
will take legal action, if needed, to block the current proposal and 
prevent the huge and unnecessary increase in methyl bromide it would 
cause.
    In conclusion, the Montreal Protocol is working. It is beginning to 
heal the ozone layer. It is protecting the American people. But even 
with absolute adherence to the phase-out of ozone-depleting chemicals, 
repairing the damage--closing the holes in the ozone layer--will take 
many decades. The methyl bromide phase-out process is working 
successfully--just as it did for CFCs and other chemicals earlier--to 
stimulate the development and adoption of effective alternatives. We 
must stick to this effort and complete the phase-out of methyl bromide. 
In particular, the United States must now acknowledge reality and 
revise and reduce its exemption requests to conform to its own data on 
the progress that is being made in eliminating this chemical and its 
own data on huge existing stocks of this chemical.
    Thank you for the opportunity to address these issues.
    [Additional material is retained in subcommittee files.)

    Mr. Hall. Thank you, Mr. Doniger.
    The Chair recognizes Ms. Bogenholm, a true farmer, I am 
told.

                 STATEMENT OF VANESSA BOGENHOLM

    Ms. Bogenholm. Thank you, Mr. Hall, and thank you, 
committee, for allowing me to testify today. My name is Vanessa 
Bogenholm. I am an organic strawberry, raspberry and vegetable 
farmer from California. I also am honored to sit as Chairman of 
the Board of California Certified Organic Farmers. I represent 
$1 billion of organic products in the marketplace annually. We 
are the largest group of farmers growing organically. Our grown 
every year is 10 to 12 percent, and we have really seen the 
industry just boom in the last 5 years. One of the papers I put 
in my testimony shows that boom in the commodities you are 
hearing discussed today, especially.
    The most important thing about this is that 16 years ago 
when I graduated from college, the first day on the job, my 
first job was sitting at the methyl bromide alternative 
research plot, and that plot had 20-foot rows of all of these 
chemicals mentioned here, every one of them. That was 16 years 
ago. In 2002, the Strawberry Advisory Commission once again 
funded all those same materials again, now with 50-foot plots. 
They had not moved remarkably ahead and still looking at the 
same materials again and again.
    I left working for extension and became a conventional 
farmer. My last year of farming conventionally, I did not use 
methyl bromide, I used Telone. I had the highest production in 
my commodity. Many strawberries are sold under big names--I 
won't mention the name--I was the highest producer not using 
methyl bromide. I have been just straight organically farming 
for 6 years.
    One of the things I always hear is people trying to look 
for this magic bullet. There is not one pill you can take to 
make you not fat anymore. There is not one pill you can take to 
make you not use methyl bromide and everything is perfect.
    What we do as organic farmers is much different. Very 
integrated approach. It is a very much a bunch of different 
steps to not have soil disease problems or insect problems in 
your soil that methyl bromide gets rid of. I agree. Methyl 
bromide is much easier to use. You call a fumigation company, 
they come and fumigate your field.
    Instead, what we have to do is rotate crops. We use what we 
call ``cover crops,'' which means putting different material 
into the soil to get rid of disease. We use large amounts of 
compost in order to control soil diseases.
    Before I can be anything, I am a businessperson, and I have 
to make payroll every Friday and, believe me, you see the large 
growth in organics for one reason only--people are making money 
at it because of the consumer demands, and the consumer knowing 
more what happens to farmworkers when they use methyl bromide 
is incredibly important.
    When I was a conventional farmer, I was present during 
every one of the fumigations. You cannot wear plastic gloves 
during a fumigation when you are shoveling soil because the gas 
will get underneath your gloves and burn your hands. How dare 
an employer have an employee in that kind of situation. You get 
headaches every time.
    In California, we have the most strict usage 
recommendations for these things. You have to move out of your 
house, if your house is within 500 feet of a methyl bromide 
fumigation, for that farmer to use it. We cannot use it around 
schools. A school system around me, a farm is near the school, 
a grower asks the school when they can fumigate. They fumigated 
over July 4 weekend so that they didn't have anybody around. 
And their concern was that it was okay because only the migrant 
Head Start kids were going to be there the following week, and 
the Superintendent of Schools also knew that I would actually 
stop that fumigation. In order for that grower to fumigate his 
field, which is actually about, I would say, 130 feet from my 
field, I would not have been able to harvest my own crop on my 
organic farm, so he could fumigate his field.
    I truly think that an employer needs to look at other 
options. In the strawberry industry, many, many farmers refuse 
to look at other options for one reason only. And you saw 
somebody earlier give a big stack of paperwork and talk about 
3,000 pages to get a critical use exemption. I look at that and 
think of all those hours work and all that money spent on a 
critical use exemption, that could have gone to other research 
alternatives, and that is, I think, the main problem we see 
here. When companies know you are going to get an exemption, 
why would you look for an alternative? That is really what I 
think we need to do. We need to start pushing to get--I am not 
saying an immediate phaseout tomorrow--but really make sure 
that commodity groups are using less and less by the commodity.
    I really thank the chairman for allowing me to speak.
    [The prepared statement of Vanessa Bogenholm follows:]

  Prepared Statement of Vanessa Bobenholm, Owner, VB Farms and Chair, 
                  California Certified Organic Farmers

    To the Committee on Energy and Commerce U.S. House of 
Representatives: I wish to thank the committee for allowing me to speak 
on the use and hopefully the eventual phase out of Methyl Bromide in 
United States agriculture. I am Vanessa Bogenholm, an organic farmer of 
Strawberries, Raspberries and Vegetables shipping my products all over 
the United States including Hawaii and Canada.
    I also am honored to represent California Certified Organic Farmers 
as the Chairman of the Board representing over 1300 organic producers 
and over $1 Billion dollars of organic products in the market place 
annually.
Main points to be made in this testimony:
 Organic farming techniques are viable alternative to the traditional 
        use of Methyl Bromide use for crops such as strawberries, 
        raspberries and grapes.
 Methyl Bromide use is dangerous to farm workers and other surrounding 
        land uses such as rural residential areas and schools.
 Commodity Groups using Methyl Bromide need to be seriously looking at 
        viable alternatives to Methyl Bromide by doing full field scale 
        trials on other production methods or materials and not just 
        the 100 foot trials that have been done for over 16 years.
 Many commodity groups have been spending millions of dollars to get 
        their critical use exemptions at the Montreal Protocol and 
        meetings such as this (preparing reports, travelling and 
        lobbying politicians) instead of putting that money into Methyl 
        Bromide alternative research. These commodity groups need to 
        have long term goals of no longer relying on Methyl Bromide for 
        the growing of their crops.
 Individual farmers need to be encouraged to look at other farming 
        methods besides Methyl Bromide and not just rely on their 
        commodity groups or state extension agents to do the 
        experimentation for them.
 The financial concerns of individual farmers can not be considered 
        more important than the environmental concerns or the health of 
        human beings.
    Organic farming systems are based on ecologically based practices 
such as using composting and soybean meals for fertilization, crop 
rotations that promote biodiversity in planting schemes, and non-toxic 
pesticides such as vegetable oils for insect and disease control. 
Organic farming has been the fastest growing area of agriculture in the 
United States producing the same agricultural commodities that are 
produced through conventional agriculture. The growth rate of organic 
agriculture has been between 10-12% annually for the past 5 years with 
fresh fruits and vegetables comprising the largest area of growth (USDA 
Agricultural Information Bulletin 777).
    When I graduated college with a Bachelor's of Science degree in 
Agricultural Biology, I started work with the Agricultural Extension 
Service in Watsonville CA as an agricultural researcher. My first day 
on the job 16 years ago was setting up a Methyl Bromide alternatives 
experiment for strawberry production. The other major experiment I was 
working on at the time was looking at the viability of organic farming 
for strawberry production by comparing a farmer with both organic and 
conventional strawberries in the Santa Cruz area of California.
    I left that position after a couple of years and have been a 
strawberry farmer in California for 14 years. I started farming 
conventionally, in 1997 I began to farm a small portion of my operation 
organically, and by 1999 switched the entire operation over to organic 
production.
    In the beginning of my farm business, I used Methyl Bromide. I was 
present during each fumigation and worked with my employees shoveling 
the soil at the ends of the field over the plastic tarps used to keep 
the Methyl Bromide gas in the soil for as long as possible. One of the 
first instructions I received from the fumigation company was that I 
could not wear the plastic gloves I wore for most of my work on the 
farm during the Methyl Bromide fumigation. This was because if the gas 
got under my plastic gloves it would be trapped inside the glove and 
burn my hands. Also, no matter how perfect the applicator on the 
tractor would try to be, some gas would always be released at the end 
of his fumigation pass and all of us in the field would have our eyes 
tearing from the Chloropicrin used with the Methyl Bromide. Headaches 
were always common with my employees and myself who had worked as 
shovelers on fumigation sites. I personally feel it is irresponsible 
for an employer to expect his employees to work around these types of 
materials that are known to cause illnesses. Methyl Bromide can cause 
neurological damage, reproductive harm, can damage lungs and kidneys 
and possibly cause cancer. (PANNA attachment #3)
    In the past few years, new larger buffer areas have been imposed on 
growers wanting to use Methyl Bromide in their fields. This means that 
a grower may ask a surrounding house or other farm to not be present on 
their own property during the time he was fumigating his adjacent field 
with Methyl Bromide. How safe can the material be if we are asking 
people who live within 500 ft. of a fumigation job to go stay in a 
hotel for 48 hours after the fumigation? Does a farmer have the right 
to put people who may just be passing by his field at danger because he 
wants to use Methyl Bromide?
    I and all of my organically farming associates, use many different 
methods to avoid the disease and pest problems that Methyl Bromide 
eliminates from soil. We rotate crops, cover crop and use compost to 
suppress plant diseases in the soil. Good healthy soil structure is our 
best defense against disease pressure. We use plastic mulching, flaming 
machines, tractor work and farm labor to reduce weed pressure. 
Solarization, the use of plastic tarps to heat the soil up and kill 
diseases in the soil is used in many areas. As farmers work more with 
these types of alternatives, they have learned to farm better and can 
achieve yields similar to conventional production methods. As an 
example, in 1988, a farmer using conventional farming methods for 
strawberry production obtained 5000 crates per acre as compared to an 
organic farmer who obtained around 2000 crates per acre. As growers 
have become better at farming strawberries organically, many growers 
obtain yields only 10-15% less then conventional farmers (California 
Extension Organic Strawberries Cost of Production Studies, 2003).
    Farming without Methyl Bromide can take more time for the farmer 
because of the extra tractor work needed and other land preparation. 
The same parcel of land can not be farmed continuously also with the 
same crop which can be difficult for growers who have never grown other 
crops.
    Sixteen years ago, I was researching Methyl Bromide alternatives. 
California Agricultural Extension knew then that certain materials held 
promise for strawberry production and others were not viable for many 
reasons. In 2002, the Strawberry Advisory Commission was still funding 
small 100-200 ft research plots with many of the same materials. How is 
this going to teach and encourage strawberry farmers to look at and 
learn to use alternatives? Research trials of + acre or more on 
producing farms need to be done by many farmers so they can begin to 
move away from Methyl Bromide. When I asked a large 300 acre 
conventional grower how many alternatives he had tried in 2003 and 
before, he stated none. This same grower had been a board member of the 
Strawberry Advisory Commission and he stated ``we are going to get an 
exemption until 2005 at least so I won't try one until I have to. I 
will stick with what I know works.'' Because the Strawberry Advisory 
Commission has been so public on working on the Critical Use Exemptions 
many other growers have this same belief.
    Before a grower can be anything--organic or conventional--he has to 
be a businessperson. If I cannot make the payroll on Friday, it does 
not matter how I farm, I will not stay in business. By looking at the 
records of growth in California Certified Organic Farmers we can see 
that growth in strawberries alone has been 155% over the last 5 years. 
Obviously some growers are figuring out they can make money without 
Methyl Bromide.
    Thank you again for your time. I have included some attachments 
that will give you some other back up that farming without Methyl 
Bromide is possible. Please feel free to contact me with any questions 
you may have.
    [Additional material submitted are retained in subcommittee files.]

    Mr. Hall. Thank you.
    Mr. Wolf.

                     STATEMENT OF JAMES WOLF

    Mr. Wolf. Thank you. My name is James Wolf. I am Vice 
President of Trane, and Chairman of the company's Environmental 
Policy Council. Trane is a business of American Standard 
Companies. We manufacture heating and air-conditioning 
equipment for small and large buildings and are the world's 
largest manufacturer of building chiller systems.
    I am pleased to tell you that we are also the leader in the 
manufacture of highly energy-efficient building chillers. Also, 
at our manufacturing facility in Tyler, Texas, we manufacture 
air conditioning and heat pump products for the residential 
market that offer consumers industry leading system 
efficiencies.
    Trane has been active in the domestic and international 
efforts to protect the earth's ozone layer since 1980. We have 
participated in virtually all the meetings of the Parties, as 
well as in domestic efforts to implement this Treaty under the 
provisions of the Clean Air Act.
    I am not here today because we have a specific business 
interest in the use of methyl bromide or its substitutes. I am 
here because we have a strong interest in ensuring that the 
Montreal Protocol remains an effective vehicle for global ozone 
protection. The Protocol has been recognized as perhaps the 
most successful international environment treaty ever 
negotiated. In our view, it has achieved this recognition 
because the treaty framework has been successful at encouraging 
wide scale cooperation among industry, government and 
environmental representatives in order to achieve well-defined 
environmental goals in a cost-effective manner.
    The Protocol was one of the first policy instruments in the 
environmental arena to specifically take account of economic 
issues as part of its implementation process. The industry 
approach to addressing this effort has been to manage the issue 
rather than simply react to it. As such, we have invested 
countless man-hours in participation in the scientific and 
technology assessment processes that have been so integral to 
the Treaty's implementation.
    Industry around the world has invested billions of dollars 
in developing and introducing ozone-friendly technologies. In 
our company, we took advantage of the technology shift away 
from CFC-based products, to develop better technology We have 
improved our chillers compared to the CFC chillers manufactured 
in the 1980's, to use at least 35 percent less energy. Also, we 
have reduced the loss of refrigerant from these chillers from 
up to 30 percent to less than half a percent a year.
    While industries have invested billions of dollars over the 
last 17 years in replacing ozone-depleting compounds, the 
investment has been small and the disruption less than would 
have otherwise occurred had we not addressed the issue in a 
coordinated systematic way.
    As a leading American manufacturer, our message to you 
today is that we, like many other American industry 
participants, have a substantial human and financial investment 
in the Montreal Protocol and its processes. Our overall 
impression is that the Protocol process has worked and has 
worked far better than any of us had expected when it was 
signed in 1987. That does not mean that the process is perfect, 
or that we do not have continued policy and business challenges 
ahead of us. We want to see the record of success continue.
    We also want the Protocol to continue because noncompliance 
status, or U.S. withdrawal from the Protocol, could result in 
trade impacts of billions of dollars to U.S. industries. I am 
not a legal expert, however, my understanding is that 
noncompliance with the Montreal Protocol, or withdrawal from 
the Montreal Protocol, could adversely affect the United 
States' ability to trade with 187 countries that are parties to 
the Treaty, and cause serious financial losses to U.S. 
companies as well as the loss of U.S. jobs.
    It is impossible for us to say for certain that such an 
outcome would come about because the Treaty has never been 
confronted with such a serious breach. We would not want to 
risk such an outcome, nevertheless.
    It has been estimated that current trade in HCFCs and HCFC 
reliant technology is around $10 billion a year. This trade 
could be jeopardized if U.S. status or participation in the 
Montreal Protocol becomes an issue.
    The Protocol has worked well over the last 17 years. It has 
done so because it has made decisions based on scientific and 
technical facts, and with a continued acknowledgement of its 
goal of balancing key environmental and economic issues.
    As part of the final chapters of this agreement, there will 
be continued discussion of the need for exemptions to the 
phaseout. These exemptions are a critical part of the Treaty's 
effort to balance economic and environmental interests. As with 
some other uses, I suspect that methyl bromide critical use 
exemptions will be necessary for some time to come. From our 
perspective, I can tell you that the CUE process appears to 
have worked well in most other instances over the last decade.
    We share the concern of the methyl bromide users, and have 
been in their place. We are confident that diligent effort on 
their part and on the part of the policymakers will produce 
policy decisions that are fair and achievable.
    To summarize, our experience has been that the Montreal 
Protocol process has worked better than could have been 
expected since its inception in 1987, the process can and will 
take into consideration key industry supplied data in order to 
arrive at credible decisions on phaseout schedules and critical 
use exemptions. It is incumbent on the affected industries to 
invest in developing a credible data base and in educating the 
parties, including those outside the United States, on the 
importance of their use category, and that the U.S. must do 
everything it can to remain a party in compliance with the 
Treaty so as to protect the billions of dollars of investments 
already made by U.S. companies in ozone protecting technologies 
and not jeopardize billions of dollars in trade value of the 
U.S. economy.
    Thank you very much.
    [The prepared statement of James Wolf follows:]

        Prepared Statement of James Wolf, Vice President, Trane

    Good morning. My name is James Wolf; I am a Vice President of Trane 
and Chairman of the company's Environmental Policy Council. Trane is a 
business of American Standard Companies. We manufacture heating and 
air-conditioning equipment for small and large buildings and are the 
world's largest manufacturer of building chiller systems. I am pleased 
to tell you that we are also the leader in the manufacture of highly 
energy efficient building chillers that have been installed in the EPA 
headquarters building, the White House/Old Executive Office Building, 
the IRS Building, the Federal Reserve Board Building, the Department of 
Interior Building, the Washington Monument, and the Washington, D.C. 
convention center to name a few. The chiller system operating in the 
convention center is the world's most efficient system operating at 
0.45 kW/ton, a minimum of 15% better than all other systems available 
and this is a 35% improvement over the CFC systems offered in the 
1980's. Also, at our manufacturing facility in Tyler, Texas we 
manufacture air conditioning and heat pump products for the residential 
market that offer consumers industry-leading system efficiencies--up to 
19.5 SEER, 50% less energy consuming than equipment meeting the Federal 
standard of 13 SEER.
    Trane has been active in the domestic and international efforts to 
protect the earth's ozone layer since 1980. As an air conditioning 
industry leader, we have been involved in all of the policy 
negotiations leading to the signing of the Montreal Protocol on 
Substances that Deplete the Ozone Layer in 1987, and we have 
participated in virtually all of the subsequent meetings of the 
Parties, as well as in domestic efforts to implement this treaty under 
the provisions of the Clean Air Act. Further, Trane is a member of the 
Alliance for Responsible Atmospheric Policy (ARAP), the industry 
coalition organized since 1980, which has been the lead industry 
coalition involved with the global ozone protection effort. I served 
for four years as chairman of the Alliance; I am currently a board 
member of this organization.
    I am not here today because we have a specific business interest in 
the use of methyl bromide or its substitutes. I am here because we have 
a strong interest in ensuring that the Montreal Protocol remains an 
effective vehicle for global ozone protection. The Protocol has been 
recognized as perhaps the most successful international environment 
treaty ever negotiated. In our view, it has achieved this recognition 
because the treaty framework has been successful at encouraging wide 
scale cooperation among industry, government and environmental 
representatives in order to achieve well-defined environmental goals in 
a cost-effective manner.
    In 1986, American industry, under the leadership of the Alliance, 
called for the negotiation of an international treaty to deal with 
ozone protection efforts. This was seen at the time as the best way to 
address a global environmental issue. Many of the industries then 
relying on ozone destroying compounds, including automotive, air 
conditioning and refrigeration, electronics, and medical supplies, were 
key components of U.S. global competitiveness. Threatened unilateral 
regulatory measures at that time would have been damaging to US 
industries and would not have been environmentally effective towards 
protection of the ozone layer
    The Protocol was one of the first policy instruments in the 
environmental arena to specifically take account of economic issues as 
part of its implementation scheme. The industry approach to addressing 
this effort has been to ``manage'' the issue rather than simply react 
to it. As such, we have invested countless man-hours in participation 
in the scientific and technology assessment processes that have been so 
integral to the treaty's implementation. We have also invested 
thousands of hours in educating treaty experts and diplomats in the 
United States and from governments around the world to ensure that they 
are well versed in the technical issues related to reducing reliance on 
ozone depleting compounds as they are making, and continue to make, 
important policy decisions.
    Industry around the world has invested billions of dollars in 
developing and introducing ozone friendly technologies. In doing so, we 
have succeeded in eliminating the use of the predominant ozone 
depleting compounds, known as chlorofluoro-carbons or CFCs, with a few 
notable exceptions. While achieving the elimination of CFC compounds, 
in most instances we have also been able to improve the quality and 
performance of the products replacing the CFC reliant products.
    As an example, in our company, we took advantage of the technology 
shift away from CFC based products to develop better technology. We 
have improved our chillers, compared to the CFC chillers manufactured 
in the 1980s, to use at least 35% less energy.
    Also, since the inception of the Montreal Protocol, and our 
understanding of the science, we have taken the industry from what was 
once a highly emissive application, to that where the chemical can 
practically remain in the machine for the entire operating life, while 
still significantly improving greenhouse gas emissions with superior 
energy efficiency. For example we have reduced the loss of refrigerant 
from 20-30% per year to less than 0.5% per year. In fact, we offer the 
purchasers of Trane chillers a leak tight guarantee at no cost.
    The industry decision to support an international agreement has 
proven to be a good one. The treaty has eliminated the ``free-riders 
syndrome'', where competing industries in other countries might not 
have had the same requirements, and has allowed for a collegial effort 
at the domestic level to meet our ozone protection commitments. While 
industries have invested billions of dollars over the last 17 years in 
replacing ozone depleting compounds, the investment has been smaller 
and the disruption less than would have otherwise occurred had we not 
addressed the issue in a coordinated systematic way. According to a 
recent study prepared by the US EPA and reviewed by the Office of 
management and Budget, the ozone protection regulations in the United 
States have one of the best cost-benefit ratios of any Clean Air Act 
regulatory program in the history of the Act.
    The cost savings to industry and to the consumer have ultimately 
benefited the economy. Furthermore, the industries reliant on the 
former ozone depleting compounds have been able to continue in business 
and meet the strong demand for products that are safe, healthy, energy 
efficient, and non-flammable so that these technologies continue to 
offer substantial benefits to our society overall.
    As a leading American manufacturer, our message to you today is 
that we, like many other American industry participants, have a 
substantial human and financial investment in the Montreal Protocol and 
its processes. Our overall impression is that the Protocol process has 
worked and has worked far better than any of us had expected when it 
was signed in 1987. That does not mean that the process is perfect or 
that we do not have continued policy and business challenges ahead of 
us. It is a unique international institution that has worked because of 
strong American influence from all corners--industry, government, 
environment, and academia. We want to see that record of success 
continue.
    From a more parochial perspective, we also want the Protocol to 
continue because non-compliance status or U.S. withdrawal from the 
Protocol could result in trade impacts of billions of dollars to U.S. 
industries. I am not a legal expert, however, my understanding is that 
non-compliance with the Montreal Protocol, or withdrawal from the 
Montreal Protocol, could adversely affect the United States' ability to 
trade with the 187 countries that are parties to the treaty and cause 
serious financial losses to American companies as well as the loss of 
American jobs. It is impossible for us to say for certain that such an 
outcome would come about because the treaty has never been confronted 
with such a serious breach. We would not want to risk such an outcome 
nonetheless.
    As an example, the encouragement of the use of HCFC technologies in 
transition away from the use of CFCs has been critical to assuring the 
treaty's cost-effective accomplishments. These HCFC technologies are 
currently employed in a wide array of uses including in air-
conditioning and foam insulation. The Alliance has estimated that 
current trade in HCFCs and HCFC reliant technology is around $10 
billion per year. This trade could be jeopardized if U.S. status or 
participation in the Montreal Protocol becomes an issue.
    The Protocol has worked well over the last 17 years. It has done so 
because it has made decisions based on scientific and technical facts 
available when the decision was being made, and with a continued 
acknowledgement of its goal of balancing key environmental and economic 
issues. It is important not to confuse hard bargaining with an 
incorrect approach. History has shown that the bargaining has always 
been a challenge. A challenge that has been met because of the 
credibility brought to the process by frank discussions of scientific, 
technical, and economic issues, as well as key political 
considerations. We would hope that the Montreal Protocol will follow 
the latest science and understanding of the current technology as 
future decisions are made, rather than relying on the earlier science 
and state of the technology available when the Protocol was first 
developed.
    Because of the success of the Protocol, decades have been shaved 
off of the projected date of recovery of the earth's ozone layer. But 
the treaty's ultimate success depends on the completion of its 
remaining objectives, including the developing country phaseout of 
ozone depleting compounds, and the ultimate elimination of other 
compounds such as methyl bromide. U.S. influence is a desired and 
needed component to effectively achieve these objectives. This requires 
the U.S. to remain an active and effective party to this agreement.
    As part of the final chapters of this agreement, there will be 
continued discussion of the need for exceptions to the phaseout. These 
exceptions are a critical part of the treaty's effort to balance 
economic and environmental interests. As with some other uses, I 
suspect that methyl bromide critical use exceptions will be necessary 
for some time to come. From our perspective, I can tell you that the 
CUE process appears to have worked well in most other instances that we 
have witnessed over the last decade. This process has worked because of 
the credibility brought by industry and government discussions of facts 
and by the commitment of all interests towards a balanced approach. It 
would be our expectation that the CUE process for methyl bromide would 
be no exception to this approach.
    The transition process away from ozone depleting compounds has been 
very similar across the wide variety of affected industries. As in the 
agricultural arena, we have large corporate producers and users of the 
compounds impacted by this treaty. In many instances, we also have 
thousands of small businesses whose livelihood is dependent on the 
availability of these compounds or their identified substitutes. A 
critical component of the Protocol process, which has been incorporated 
into US domestic implementation laws, has been the identification of 
suitable substitutes and reasonable expectations for market penetration 
of these new compounds or technologies.
    This transition planning has been a significant challenge. It has 
required extensive work in planning, education, and familiarization of 
thousands of small businesses with technologies being developed by 
large corporate suppliers and manufacturers. Our own company had to do 
this with our network of dealers, suppliers, and contractors. And we 
succeeded.
    The transitions were usually accompanied by a firm but fair 
reduction schedule that recognized the needs of these user groups and 
appreciated the value of the investment being made in the new 
technologies. Our experience has been that the process can and will 
work. It does require a great deal of hard work in developing and 
delivering credible information to policymakers, and in implementing 
the substitute technologies once identified.
    We share the concern of the methyl bromide users and have been in 
their place. We are confident that diligent effort on their part and on 
the part of the policymakers will produce policy decisions that are 
fair and achievable. For the sake of all who have gone before them, we 
would want no other outcome so that the Protocol can live up to its 
reputation as an institution that is achieving its environmental 
objectives while balancing the economic needs of those impacted by its 
provisions.
    To summarize, our experience has been that the Montreal Protocol 
process has worked better than could have been expected since its 
inception in1987; the process can and will take into consideration key 
industry supplied data in order to arrive at credible decisions on 
phaseout schedules and critical use exemptions; it is incumbent on the 
affected industries to invest in developing a credible data base and in 
educating the parties, including those outside the US, on the 
importance of their use category; and that the US must do everything it 
can to remain a Party in compliance with the treaty so as to protect 
the billions of dollars of investments already made by U.S. companies 
in ozone protecting technologies and not jeopardize billions of dollars 
in trade value of the U.S. economy.
    Thank you for the opportunity to provide information on this 
important topic.

    Mr. Hall. Thank you very much. That completes the 
testimony, and we will have some questions now, and I will 
recognize myself for 5 minutes.
    Dr. Mueller, you are phasing out the use of methyl bromide, 
right?
    Mr. Mueller. Yes.
    Mr. Hall. Can you foresee any circumstances where you might 
use it again and, if so, what might these be?
    Mr. Mueller. I have thought a lot about that question, and 
right now--I am an entomologist, and resistance is an issue 
that I am always concerned about, and resistance management is 
a major part of the components that I build into my 
international phaseout programs in places like Thailand and 
Ivory Coast. So, if we can prevent insects from becoming 
resistance to some of our more popular fumigants that we are 
using as alternatives, I don't think we need methyl bromide. 
Maybe something else will come along in the meantime. If we 
can't, then maybe we will need methyl bromide.
    Mr. Hall. Is something else coming along now?
    Mr. Mueller. Yes, there is. Sulfuryl fluoride, a product 
that has been used for termites----
    Mr. Hall. Who produces that?
    Mr. Mueller. That is a Dow AgroScience product. I think 
there is a company also in Koln, Germany, that makes that 
product, too. Sulfuryl fluoride looks to me--if I was asked 
what I would rotate, let us say, a grain fumigation with, I 
would use sulfuryl fluoride.
    Mr. Hall. What impact will the phaseout of methyl bromide 
have on your fumigation business?
    Mr. Mueller. I guess I really won't know until January 1 of 
next year. I have told everybody in our company, without methyl 
bromide, that we would freeze their salary and their income for 
this year, even though we know that we are going to lose some 
business.
    Mr. Hall. Mr. Brown, because your Congressman might not 
make it, let me ask some questions that he may want to ask you. 
Have you tried alternatives to methyl bromide?
    Mr. Brown. Mr. Chairman, we have been trying alternatives 
to methyl bromide since we were aware that methyl bromide was 
under the gun to be phased out. As a matter of fact, this year 
alone the Florida Tomato Committee will invest something over 
$120,000 to $150,000 in research, in conjunction with our land 
grant college and USDA research facilities in the State of 
Florida.
    Mr. Hall. Which ones have you found most effective?
    Mr. Brown. In some circumstance, we have found some of the 
Telone C35 compounds to work, but we have a pest in Florida--I 
hope you don't have it in Texas--called ``nutgrass,'' and it 
will come up through concrete pavement if you give it a crack. 
And we produce many of the vegetables in Florida that use 
methyl bromide during a full-bed plastic mulch, and the purpose 
of that mulch is basically to cover the surface of the bed to 
keep rainwater from passing through the bed and leaching 
fertilizer so we have a management system for nutrition and 
growth of that plant.
    When nutgrass comes up in those beds, it is like growing 
those crops under screen, and it doesn't work. And to date, we 
don't have an effective control compound for nutgrass control 
and the use of alternatives in Florida that allows us to 
produce those crops with those systems.
    In other areas, we have the Telone C35. The Telone compound 
is not registered in some counties in Florida simply because of 
the risk to groundwater. We have topography in Florida that 
prevents the use of Telone in accordance to its label in 
Florida due to coarse topography, and that prevents any major 
migration to that alternative group by the industry. But we 
continue to do research. We are doing research this season in 
large field plots with virtually impermeable films, which are 
films that are being imported currently out of Europe, not 
produced in the U.S., that would basically cover those growth 
surfaces with a plastic material that would prevent any ex-
gassing or migration of methyl bromide out of that soil system. 
And if we were truly addressing the issue of ozone-depletion 
and methyl bromide's risk to the ozone, if we don't let it 
escape, it shouldn't even be considered to be a use, but it all 
falls into the pot with scrutiny as we currently have it 
structured.
    Mr. Hall. You represent the tomato growers in most of 
Florida, the State?
    Mr. Brown. That is correct.
    Mr. Hall. What steps--not you personally--but what steps 
have you observed for the other growers to have taken to reduce 
the use of methyl bromide up to this date?
    Mr. Brown. We have been reducing the rate of methyl bromide 
on a per acre basis throughout the State. We have been 
combining it with larger and larger quantities of chloropicrin, 
which is a compound very similar to teargas that is used for 
some soil disease control programs. We do have some migration 
to the Telone alternatives in some areas where we have some 
legitimate use for it, but the industry has progressively moved 
forward trying to solve that problem, but we have reached the 
point we don't have a complete solution, and therefore that is 
why we have a critical use request in place with USDA and EPA.
    Mr. Hall. All right. My time has expired. Mr. Allen, 
recognize you for 5 minutes.
    Mr. Allen. Mr. Chairman, I will try not to take more than 
that. Mr. Chairman, I would first like to ask unanimous consent 
to enter into the record a copy of the membership list of the 
Alliance for Responsible Atmospheric Policy, a group that Mr. 
Wolf's company trained as a member of, and I want to note for 
members of our subcommittee that this organization includes 
some of the Nation's largest employers--General Electric, Ford 
Motor Company, Maytag Corporation, and Owings Corning, among 
many others--who, according to Mr. Wolf's testimony, could lose 
billions of dollars in trade if we violated the Protocol.
    Mr. Hall. Is there objection to the admission? The Chair 
hears none. It is admitted.
    [The information referred to follows:]

            The Alliance for Responsible Atmospheric Policy

                            MEMBERSHIP LIST

    Aeroquip Corporation; Air Conditioning Contractors of America; Air 
Conditioning & Refrigeration Institute; Air Conditioning & 
Refrigeration Wholesalers Association; Air Mechanical; Alliance for 
Polyurethanes Industry; Alliance Pharmaceutical Corp.; American 
Pacific; American Plastics Council; Arthur D. Little; Association of 
Home Appliances Manufacturers; ATOFINA; Bard Manufacturing Co.; Beltway 
Heating & Air Conditioning Co.; Cap & Seal Company; Carrier 
Corporation; Central Coating Company; Cetylite Industries; Copeland 
Corporation; Delphi Automotive; Dow Chemical U.S.A.; Dupont; E.V. 
Dunbar Co.; Falcon Safety Products; Fluorocarbon Technology Corp.; Foam 
Enterprises; Foamed Polystyrene Alliance; Foamseal; Ford Motor Company; 
Forma Scientific; FP International; GE Appliances; General Electric 
Company; General Motors; GHG Associates; Gilman Corporation; Great 
Lakes Chemical; H. C. Duke & Son; Halogenated Solvents Industry 
Alliance; Halotron; Halsey Supply Co.; Hill Phoenix; Honeywell; Hudson 
Technologies; Hussmann Corporation; IGC Polycold Systems; INEOS; 
Institute of International Container Lessors; International Association 
of Refrigerated Warehouses; International Pharmaceutical Aerosol 
Consortium; Joint Journeymen And Apprentice Training Trust; Joseph 
Simons Company; Kysor Warren; Lennox International; Lintern 
Corporation; Luce, Schwab & Kase; MARVCO; Maytag Corporation; McGee 
Industries; MDA Manufacturing; Mechanical Service Contractors of 
America; Merck & Co.; Metl-Span Corporation; 3M Company; Mobile Air 
Conditioning Society; National Refrigerants; Northland Corporation NYE 
Lubricants; NYE Lubricants; Owens Corning; Perlick Corporation; 
Refrigeration Engineering; Refrigeration Service Engineers Society; 
Refron; Remtec International; Revco Scientific; Ritchie Eng. Co.; 
Siemens; Solvay; South Central Co.; Society of the Plastics Industries; 
Sporlan Valve Co.; Spray Foam Alliance; Sub-Zero Freezer Co.; Tech 
Spray; Tecumseh Products Co.; Thermo-King Corporation; Thermoquest; 
Total Reclaim; Trane Company; Tyler Refrigeration Corp; Union Chemical 
Lab, ITRI; United Refrigeration; Unitor Ships Service; Vulcan 
Materials; Wei T'O Associates; White & Shauger; W.M. Barr and Company; 
Worthington Cylinder; York International Corp.; and Zero Zone Ref. Mfg.

    Mr. Allen. Mr. Doniger, in the administration's written 
testimony, the State Department witness states that parties to 
the Montreal Protocol can ``seek an exemption from the 2005 
phaseout, if it determines that the absence of methyl bromide 
would cause a significant market disruption.'' The testimony 
suggests that exemptions are only available to the 2005 
phaseout, and that exemptions are not available for the 2003 
reduction to 30 percent of baseline levels.
    There is no critical use exemption for the interim 2003 
reduction to 30 percent of baseline under the Montreal 
Protocol. Is there, or is there not?
    Mr. Doniger. You are correct. The exception is supposed to 
be only for that last step between the 70 percent reduction and 
getting to zero. And so talking about any exemptions above 30 
percent is, in my opinion, a breach of the Protocol.
    Mr. Allen. Has that been challenged by any other parties to 
the Treaty?
    Mr. Doniger. Well, in a way, yes, because the solution that 
the parties came up with in the March Extraordinary Meeting is 
double-capped, that has been referred to, an upper limit on use 
and a lower upper limit on production and consumption, the 35 
and the 30 percent. But I would emphasize that in the decision 
from March, the parties set those numbers for the United States 
and different numbers for other countries as upper limits. And 
each country is obliged under its domestic law, to consider 
whether current data on use, current data on stockpiles, would 
allow for the number to be lower in 2005. And that is the 
rulemaking that EPA is required to undertake later this year.
    The parties also decided in 1997 that there should be no 
new production--even if there is need, there should be no new 
production if there is a stockpile. And the United States has 
never been forthcoming about the amount of the stockpile.
    Mr. Allen. Thank you. I understand that there are critical 
use exemptions to exempt activities that are in some way--I 
understand the critical use exemption is there to exempt 
activities that are in some way unusual. If the United States 
was unwilling to ban the use of methyl bromide for its most 
common function, as a pre-plant soil fumigator, we would never 
have agreed, and in fact fought for, a full phaseout under the 
Montreal Protocol and the Clean Air Act.
    Do the critical uses listed in the U.S. application include 
soil fumigation, do you know?
    Mr. Doniger. Well, they do, yes. For example, two of the 
big ones are for tomatoes and strawberries. But I would just 
say that I don't think there is any category of use which is 
not eligible to ask for an exemption, it is the amounts that 
are in question. It is the huge amounts that are in question. 
If there were a tail in the phaseout for which there is 
genuinely no alternative, whether it is field fumigation or 
mills and so on, it seems to me that as a categorical matter 
they are all eligible, but I am concerned that they have not 
made their case and they have not drawn down the stocks.
    Mr. Allen. Were you here this morning when Ms. McMurray 
testified for the State Department?
    Mr. Doniger. Yes.
    Mr. Allen. You may recall, she testified that in their 
negotiations, they always want to ask for more than they 
actually need. Did you have any reaction or comment on that 
testimony?
    Mr. Doniger. Well, I thought it was a very honest comment, 
and it should be reflected that in my opinion, the grower 
groups have constructed their applications on the same 
principle, that they have asked for amounts that would give 
them the maximum comfort zone, so to speak. They have put in 
for more than they need.
    The nematodes don't attack everywhere at once. There is a 
notion in these applications, though, that every single use, 
every single farmer, ought to have a number which is the 
reserve against the pest outbreak occurring everywhere at once. 
It just doesn't happen that way.
    Mr. Allen. If I could just finally turn to you, Mr. 
Mueller. In Ms. McMurray's prepared testimony--she didn't 
include it in what she was--she had to shorten her testimony 
for this morning, but in her written testimony she struck a 
theme that was much like the theme you were saying--you were 
describing in your testimony. She said that ``staying the 
course matters to public health and to the ozone layer, but it 
also matters to the many businesses who took the risk of 
investing heavily in alternatives that do not damage the ozone 
layer. A recent letter to EPA from companies making this 
choice''--like yours--``have built a $10 billion business and 
trade with ozone-safe American products and technologies that 
could be at risk if the United States were to take action 
inconsistent with its commitments under the Montreal 
Protocol.''
    Is there anything in that statement that adds to what you 
said, or do you have any comment on that statement from her, as 
reflecting the administration's position?
    Mr. Mueller. Yes, I do. You know, so often we talk about 
fast-track alternatives, and maybe a company is going to come 
in and take advantage and build this new silver bullet out 
there. I brought, in 1995, a product over from Australia. It is 
a cylinderized phosphine material. We have phosphine already 
registered since the 1950's in the United States. And it took 5 
years and $5 million to get the first methyl bromide 
alternative for structural fumigations approved by EPA.
    So, if you are trying to make money in this business by 
coming out with a new product and getting rich, it is going to 
take a long time, and it is going to take a lot of money.
    Mr. Allen. Thank you, Mr. Chairman, I yield back.
    Mr. Hall. Thank you. The Chair recognizes Mr. Radanovich, 
the author of the legislation, for questions.
    Mr. Radanovich. Thank you, Mr. Chairman, again, for having 
this hearing, and apologize for having to duck back and forth, 
but I did want to question the panel. Ms. Bogenholm, I enjoyed 
your testimony, I thought it was very valuable. And I do have a 
couple of questions. One is, you are pretty much talking about 
integrated pest management as a means of addressing what would 
be a methyl bromide problem.
    Ms. Bogenholm. Correct.
    Mr. Radanovich. The other question I have is, not knowing 
the size of your operation, but are those techniques 
economically worthwhile in large scale farming?
    Ms. Bogenholm. Definitely. And, you know, my company 
grosses over $2 million a year. I am not what you would call a 
small farmer, according to USDA. I ship berries all over the 
world. And all these techniques I talk about, which are cover 
cropping and using compost and different fish emulsions to 
buildup my soil matter, all of those things are available and 
they are integrated pest management techniques.
    Mr. Radanovich. Thank you. Paul Wenger, welcome to the 
subcommittee. As a constituent of mine, I really warmly want to 
welcome you. Just because you are my constituent doesn't mean I 
am going to throw you softballs, but I am kind of curious, if 
you could give me your story about the use of methyl bromide. 
Either there is going to be a replacement there, or there is 
not. It seems to me that there is a lot of talk. I have heard 
from many folks in chemical industries that say that they do 
have alternatives available, but they are just not being 
allowed--forcing farmers to use them.
    Can you give me your down and dirty on this thing.
    Mr. Wenger. Well, I think there are a couple of things. 
One, you have probably seen the use of methyl bromide go down 
because it is extremely expensive. So, as orchardists, during 
the late 1990's we saw prices we hadn't seen so low since 30 
years ago. When you came to put a second generation orchard in, 
you had to look very hard at how much you were going to spend 
for methyl bromide. Besides that, the fact that the Department 
of Pesticide Regulation in California has come down with more 
stringent guidelines about the use, so if you are around any 
kind of a house or school or anything, as I said, any kind of 
surrounding exposure--there is going to be certain parts of 
your field you can't treat. So, then you have to take a look at 
do I really treat the whole field if I only treat a part of it.
    Like Mr. Doniger said, maybe nematodes aren't everywhere at 
once, but tell me where they are in the soil. And we do do soil 
sampling. We do an awful lot of soil sampling because we don't 
want to spend up to $2,000 an acre, if we don't have to. And 
that could be 50--well, it could be anywhere between 40 and 50 
percent of your cost of just putting a new orchard in, not 
counting land values. And so in 1999, when we put in a second 
generation walnut orchard, and we followed the El Nino year of 
1998, and so the trees came out of the nursery, they had been 
in the nursery 2 years, very high pith, counts on the roots. A 
good friend of mine had a farm next to me, he was putting in an 
orchard, a second generation orchard just like mine, but doing 
it for an absentee landowner. The absentee landowner had a lot 
of money and they wanted to do the full route. And so they went 
the full methyl bromide application, and I said, well, we are 
going to lose methyl bromide, I think it is time I find out how 
to do it the organic way or the biological way--not necessarily 
organic, but biological.
    So I talked to Tom Umasha and Cherlock Sunburs, an 
agronomist, he knows these kind of things. He took soil 
sampling. He came out with biological things that we could do. 
We inoculated the roots, we put the trees in the ground, and 
they didn't grow.
    The other fellow, his trees didn't grow at first either. We 
both took soil samples. We had another agronomist come in. We 
took root samples, pithuniphyte was terribly, terribly high. He 
had no nematodes, my nematode counts were off the charts. In 
about 3 weeks, his trees started to grow. This year, he will 
harvest 3 tons to the acre. I have probably got 2 more years 
before I will get a ton to the acre.
    Now, if you had a full planting like that, you would be 
broke. Luckily, it is only a 17-acre field, so I thought I have 
got to experiment, I have got to find out. Since then, we have 
put on ridamil, datura, we have put on fertilizers, we have put 
on cattle manure, chicken manure, we have put on sheep manure, 
we have put on grape compost. We use a cover crop every single 
year, and it is a fight. By the time I get the orchard going, I 
will have replanted 75 percent of that original orchard.
    Mr. Radanovich. Essentially, what you are saying is that 
integrated pest management or any IPM approach is good, but it 
is still not going to solve your needs.
    Mr. Wenger. It is tough because if you are going in virgin 
ground--and we call virgin ground something it didn't have--
unfortunately, we can't do crop rotations with vines and trees. 
And so sometimes you have those options with other crops that 
are annual, we don't have those options. But if we go into 
where there has not been any perennial crop before, we will 
take soil samples. A lot of times you can get away without 
doing any kind of fumigant at all, and we have done that and 
been very successful. But what we are looking at now in 
California is second generation and third generation orchards, 
orchards that have been in for 30, 40, 50 years, they are 
coming through now and taking those trees out, and then what we 
call the next generation, and sometimes now it is a third 
generation orchard.
    Mr. Radanovich. And in your case, you are not going to be 
using methyl bromide except for pre-plant for a vineyard or an 
orchard that is going to last anywhere between 20 to 40 years.
    Mr. Wenger. Right. And now looking back, 20-20 hindsight, 
when you look back at the time in 1999, I thought I have got to 
go out and borrow more money, pay more interest for what at 
that time was going to cost around $1800 an acre. So, I didn't 
have the money. Now, if I look back, I should have borrowed the 
money. I would have been money ahead.
    Mr. Radanovich. Mr. Brown, you made a comment earlier on 
tomatoes, the use of methyl bromide, and how you have been able 
to decrease it, part of what was used in order to decrease its 
use per acre over the years have been in association with a 
different chemical, and I am not really aware of that. But, Mr. 
Wenger, too, you mentioned that there has been--because of the 
price, has caused you to use it more efficiently. Is that the 
answer, or what has been the main reason why it has decreased 
in its use--I will ask both of you, maybe Mr. Brown first--over 
the years? Why have you been able to accomplish that?
    Mr. Brown. Margins in the tomato business are about like it 
is in the nut business in California, they are real thin or 
nonexistent. And every dollar you spend in producing a crop is 
a dollar you have got to struggle to make back on the other end 
of the enterprise. So there has been a real sense, not only 
with the phaseout, but a real economic sense of trying to be 
extremely efficient in use of the compound.
    The chloropicrin compound is a way of reducing the poundage 
of methyl bromide on a per acre basis, and we also, in effect, 
do a strip mulch for the bed, rather than the sheet fumigation 
that you may see in California.
    Mr. Radanovich. Mr. Wenger--and if you would add in there, 
too, what experience you have had in using some of these 
alternatives that are out there.
    Mr. Wenger. Well, one of the first things we did on hole 
fumigation where we have a tree blow over and die, we come back 
and we treat, have methyl bromide in a site treatment, and I 
will do all that application myself, and it has been a very 
safe compound to use. Just like anything, you want to be very 
careful.
    Mr. Radanovich. That is in like probably a 10 foot by 10 
foot area----
    Mr. Wenger. Right. Have to go back to a tree hole, and you 
will go ahead and you will put a pound and a half of methyl 
bromide. It used to be that methyl bromide was 98/2--98 percent 
methyl bromide, 2 percent chloropicrin. The chloropicrin was a 
teargas that would let you know if you had any exposures and to 
get away from it. It was a safety feature.
    So then what they started doing with the phaseout is going 
to a 75/25 and a 60/40. One of the things we experienced is 
chloropicrin is also a fumigant, does not leave the soil very 
quickly, and it takes a much longer time, especially in cold 
temperatures. We usually do our transplanting in January-
February when the temperatures are cold, we will fumigate 
somewhere in October-November. So, with damp moisture in the 
ground from the rains and the colder temperatures, we started 
planting our trees and found out they weren't growing. Now we 
have learned that chloropicrin will stay in that soil for a lot 
longer time. So, now you have to do a different management 
practice, either fumigate way early or wait another year to go 
ahead and plant. And so because of that, if you could ever 
find--if you are ever able enough to get some 98 percent, then 
that is what you want to use.
    The other thing I might mention, too, lately now, just the 
reverse of 1999, as you know, commodity prices go up and down. 
We are now experiencing some very good prices in the almond 
industry. And so the usage on second generation orchards is 
going to go down because any orchard that will produce even a 
minimal crop is staying in the ground. You know, when prices 
are good, you don't take trees out. In the next couple of 
years, we have seen a huge planting increase, a lot of that on 
virgin soil. So, as soon as those orchards come into 
production, we are going to have an oversupply mode, price is 
going to go down, as we know, and all of a sudden you are going 
to see an awful lot of demand for methyl bromide again, even 
though you will say that in the past it has been decreasing in 
its usage. But down the road, as those orchards, now the price 
comes down, people are going to say, if I am getting 1,000 
pounds to the acre, and it goes down to less than $1.00 a 
pound, I can't even make my way on it for the annual expenses, 
I am taking the orchard out, and then try to get in that cycle 
again. And so there will be greater demand. So you can't just 
look back and say, well, historically, we are reducing methyl 
bromide. I mean, we are talking about a biological world here, 
that people are keeping trees in more now, and as soon as the 
price goes down, that is when growers will make the management 
decision, it is time to yank those old unproductive orchards 
and replant and start the cycle all over again.
    Mr. Radanovich. Mr. Chairman, I realize I am way over my 
time. I would like another round, if we can, before closing.
    Mr. Hall. Can you continue? We are not planning to have 
another round. Can you continue for another couple of minutes?
    Mr. Radanovich. I can. I think Ms. Capps would----
    Ms. Capps. Would you mind taking a second round, I have 
some people waiting for me in my office. I am sorry. Would you 
be willing, Mr. Hall----
    Mr. Hall. Have you completed your questions, Mr. 
Radanovich?
    Mr. Radanovich. For now. I would be happy to yield to Ms. 
Capps.
    Ms. Capps. That would be wonderful.
    Mr. Hall. The gentleman yields to Ms. Capps.
    Ms. Capps. Thank both of you gentlemen for yielding to me. 
I didn't want to miss an opportunity to talk with a fellow 
representative from the Central Coast of California, Ms. 
Bogenholm. We are neighbors to each other, if I may say. Mr. 
Farr represents you, and I have farmers with good strawberry 
yields as well, and lots of wine grapes, and you have 
artichokes, we have broccoli, but it is a lot of the same kind 
of agriculture. And we also have similar interests among our 
constituents and your customers in organic farming. I commend 
you for your description of ways that this can be done. Lots of 
folks now are asking for pesticide-free fruits and vegetables 
when they go to the market. Both you and Mr. Mueller have 
played by the rules and, Mr. Wenger, your story is apropos to 
my concern and interest here. You have invested time and money 
into researching and using developing safer alternatives.
    In the first panel, I asked the USDA about the $150 million 
spent on research for alternatives, and I am asking you the 
same question--is this enough money? What else can we be doing 
to assist growers and farmers in this area?
    Ms. Bogenholm. I would like to address the money situation 
just because I know you guys have lots of things you have to be 
experts on. The average acre of strawberries grosses $35-40,000 
annually. So, when you hear about other fumigation situations 
costing $200 more an acre, that is really a small amount 
compared to what that grower is spending to grow that crop. And 
there are other options that cost more money, and that is the 
situation that is occurring.
    Now, you talk about research dollars, and research dollars 
have been very, very small in the methyl bromide situation when 
I started back in 1988 to now. And so in the last couple of 
years, you have really seen the money ramp up, but what you 
haven't seen is individual growers doing their own research, 
which growers do all the time, but in the methyl bromide 
situation, growers weren't willing to try, that is where you 
will see the difference.
    Ms. Capps. That is why I am asking--and others can jump in, 
too. Why have we not made more progress, is it because this is 
a partnership and we need to be incentivizing growers perhaps 
more?
    Ms. Bogenholm. I truly believe you do incentivize growers 
to do more research, and I think that individual growers need 
to have a situation where basically 3 to 4 percent of their 
production overall is looking at alternatives in order to use 
methyl bromide, in my personal opinion.
    Ms. Capps. Oh, have it be that.
    Ms. Bogenholm. Have it be a requirement by a commodity so 
all the growers have to try something so that they have to do 
it; otherwise, growers will never learn how to--you can't just 
go look at somebody else's field and see what he did and say, 
``Well, I can do that now.'' You have got to be trying 
yourself, or else you would never learn how to do it.
    Ms. Capps. And the incentive would be there, or the little 
push to do it, and that would be something that could help 
growers step over that line. I want some comment, if I have 
time, but this is my concern. As long as we continue to delay 
the phaseout, are we continuing then to disincentivize--is that 
a proper word--are we working at cross-purposes with what this 
hearing is about. I am thinking of farmworkers' lives, 
pesticide handlers, school children in nearby communities that 
get the drift--and it is really hard to protect them from 
this--in addition to the ozone factor. I wonder if we are 
spending enough time considering those alternatives that yield 
better health and safety benefits. And in whatever time I have 
left, I will leave it to whoever wants to comment on that.
    Mr. Mueller. I have thought a lot about that, and I believe 
that the stakeholders or the enterprises have a responsibility 
to come up with alternatives themselves. It isn't like there is 
one answer where you can go out and just dial it in and say it 
is going to work. Even a flour miller, a flour miller with an 
old mill might have different needs than a flour miller with a 
brand new mill, or in different geographic locations. So, I 
think it is up to the individual, and I think there is a price 
to pay for protecting the environment.
    Ms. Capps. Well, what do you think of her idea if, in order 
to use methyl bromide on the majority of your crop, that you 
would be required--because it really does come down to 
individual needs, doesn't it, and what works on particular 
areas--and someone else wants to respond. Thank you. Dr. 
Mellano.
    Mr. Mellano. I am very sensitive to your concern about 
health and safety. This morning, you talked about methyl 
iodide----
    Ms. Capps. I didn't, but it was brought up.
    Mr. Mellano. It was brought up. Methyl iodide was 
synthesized by Ord and Simms at U.C. Riverside about 10 or 15 
years ago. And one of the first experiments that was done on 
that was done at our place because I know them. They were 
actually classmates of mine in school. And I think before you 
think about methyl iodide as a full-scale substitute for methyl 
bromide, you ought to take a look at the LD50's. It is highly 
toxic. In addition to that, it is a liquid at room temperature, 
which means it can get into the groundwater, and that is one of 
the reasons why it is not registered.
    Now, it works very well. We have been experimenting with it 
for 10 or 15 years, and we would very much like it to be 
registered. It will allow us to reduce our methyl bromide use. 
But I am very much afraid that we may not want what we get 
there because of the groundwater problem and the toxicity.
    Now, relative to farmworkers, the methyl bromide has no 
effect on the farmworkers because it is gone by the time they 
come in. And the methyl iodide which is a liquid at room 
temperature, stays in the soil significantly longer and, 
therefore, there will be more exposure. So, those are some of 
the problems that we are dealing with.
    Now, I do want to say one thing. I stand corrected on the 
China thing. I made a technical mistake. It is true that China 
signed last year, but they still don't have to phaseout the use 
of their methyl bromide, so the basic premise that I made is 
still correct. And I am sorry I made that mistake.
    Mr. Hall. Do you want to be heard?
    Mr. Bair. Yes. In response to Ms. Capps' question about 
alternatives and their uses. If you go to the NRDC Web site, 
which Mr. Doniger represents, virtually every alternative that 
has been discussed is a viable alternative or a potential 
alternative for methyl bromide replacement in the industries 
that I am familiar with, is under attack for some other 
toxicity or some kind of related problem with those compounds, 
which gives you a very uncomfortable feeling as are we 
basically walking off the plank.
    Mr. Mellano. Methane sodium is a primary material, and it 
is being re-registered, and we are going to lose it, maybe.
    Mr. Mueller. Just two quick comments, if I could, please. 
All we really need is a menu, a menu to be able to choose from, 
that we can try A, C and D and combinations to make these 
things work, and not just one by itself. That is what we have 
found to work for us.
    No. 2, I disagree a little bit. I spent 8 days in the 
hospital with burned legs and abdomen from methyl bromide. It 
was the most painful experience of my life. And if you don't 
believe that, anytime you get burns, second degree burns, those 
are very painful.
    Mr. Doniger. I think it is worth pointing out that the farm 
community needs to think about some choices, too, because at 
these hearings you bring forth witnesses, as they should, who 
have the most compelling stories to tell, but behind them are a 
lot of people who actually have less compelling stories to 
tell. And when they have exemptions which are too big, it is 
actually making Mr. Wenger's life more difficult, and Mr. 
Mellano's life more difficult, because it is being misused in 
its lower value uses.
    I have never said the methyl bromide exemptions should go 
to zero. What we are saying is that they are too high, and they 
can be lower.
    Ms. Capps. Thank you.
    Mr. Hall. The Chair thanks the gentlelady, she yields back 
her time. The Chair recognizes Mr. Issa, the gentleman from 
California.
    Mr. Issa. Thank you, Mr. Chairman, and this is an important 
hearing, and obviously we have way too many questions and you 
have way too many answers for us to squeeze into our limited 
day.
    I am a former businessman, so perhaps not having the kind 
of farm expertise of even one-quarter of one of you, I am going 
to have to limit my questions more to that sort of part of it.
    One that I would have for Mr. Bair, what happens if insects 
found in a mill--what are the consequences if an alternate 
system were to fail in a mill--in other words, if you don't use 
methyl bromide as the most effective system, what happens when 
a mill fails inspection?
    Mr. Bair. Well, two things. One would be that you would 
likely be subject to FDA action, including seizure of your food 
as being adulterated, which obviously is something very 
serious. But perhaps even more important than that is that you 
run the risk of angering your customers. I mean, food companies 
have spent decades, some of them more than 100 years, 
developing a consumer allegiance, a loyalty to their particular 
product. And the last thing they want to do in a low margin 
business is anger any customers.
    Mr. Issa. So it would be fair to say you would end up in 
about the same position that the company formerly known as 
Firestone Tires found themselves in, you are essentially 
talking about a business that has zero-tolerance for failure to 
provide a healthy safe product?
    Mr. Bair. It is a zero-tolerance. The gentleman who 
testified in our behalf last year before the subcommittee 
discussed sifting flour, and we all remember seeing grandmother 
or mom sifting flour when they baked. And most people assumed 
that sifting flour had something to do with imparting--it baked 
a better cake, or baked a better loaf of bread. The reason 
grandmother sifted flour was to get the bugs out. And the 
reason nobody sifts flour anymore is because there aren't bugs 
in the flour in the first place, and methyl bromide helps us do 
that.
    And I would like to respond, too, there has been a lot said 
about alternatives here, and I would like to just quickly go 
through those. To Mr. Wolf, I just want to say, in his words, 
he said ``We have been there,'' in the Montreal Protocol. With 
all due respect, you have not been there.
    The refrigeration and air conditioning industries, when 
they phaseout CFCs, first of all, the alternatives were already 
available. That was a question of engineering and physics. They 
know what that molecule needs to look like to make 
refrigeration work.
    An example that we are talking about with methyl bromide, 
it is not an engineering question, it is a biological question. 
Insects evolve, insects develop resistance, they are changing 
all the time, weather changes, soil patterns are different--it 
is a biological problem.
    Mr. Issa. I think not only have you made your point, but I 
think even among people who might be not totally supportive of 
the numbers, there is a consensus that at the present time, 100 
percent elimination of methyl bromide is not yet appropriate, 
and I apologize, but I am going to run out of time here.
    I guess one quick question which would be for Mr. Brown, if 
tomorrow California and Florida stopped growing tomatoes, with 
the alternate--it could happen--with the alternate places that 
tomatoes come from, Mexico being a major supplier, would there 
be any less methyl bromide being used today if the two major 
producing States went out of the business? Do the alternate 
countries use something else, or do they essentially use the 
same or greater amount of methyl bromide per acre?
    Mr. Brown. I can't absolutely officially speak on behalf of 
a Mexican industry that I don't work for and don't represent, 
but the use of methyl bromide in other parts of the world 
continues and has a right to continue out to 2015 for those 
nondeveloped countries.
    Mr. Issa. Okay. Dr. Mellano, in the case of the flour 
industry particularly, as a San Diegan, we both know that many 
growers have operations both north and south of the border. If 
methyl bromide went to zero today, would your 625 acres 
essentially--not that you would do it--but are they fully 
transferrable 70 miles south and then until 2015 you could grow 
using the techniques that are proven?
    Mr. Mellano. The short answer is yes, and in addition to 
that, TriCal, who is the major fumigator in California, has 
already set up a Mexican company, and the marketing companies 
have already set up Mexican distribution centers in 
anticipation--part of it has got to be in anticipation of the 
phaseout. So, basically, what is going to happen is methyl 
bromide is going to move from a highly regulated area in 
California to a very low regulated area in Mexico. And to me, 
the total amount is going to continue at the same. That is one 
of my problems.
    Mr. Issa. Mr. Doniger, I know you have an answer for every 
question I have, and more, but the question I have for you--I 
am just trying to do the arithmetic--between you and Mr. 
Mueller, I think I heard 483 million pounds are being used of 
methyl bromide, and 22 million are being stockpiled. Would one 
of you give me the number of use per annum that you were using 
because the stockpile I got is 22 million and the gross I got 
is 483 million, which is 5 percent. What is wrong with that 
figure, in brief?
    Mr. Doniger. Sir, I think the number being used in 2003, 
the number that corresponds to 30 percent, is about 16.9 
million pounds, and the stockpile, by my estimation, is about 
22 million pounds.
    Mr. Issa. So if, in fact--I will take the revised. 
Somewhere we had this 100,000 tons and so on. I was going 
through--it still is a year to a year and a half of 
consumption. And I am very supportive that there should not be 
stockpiling, although I do recognize that some old vehicles are 
still using the old freon from stockpiling today. Most have 
converted, but there are still a limited amount using it under 
strict rules.
    What is wrong at a given time with a year and a half of--
less than a year and a half of use being available. That seems 
like it is inefficient, but it doesn't go to the 22 years or 
decades that was being talked about.
    Mr. Doniger. I asked people in the chemicals industry what 
is the normal inventory, and the answer is months--for normal 
chemicals, a few months max, not well over a year. So, this 
inventory has not been created in conformity with normal 
practice, it is much bigger than that.
    If I may quickly, the tomato crop in California does not 
use methyl bromide, its critical use exemption was rejected 
because they don't use it and they don't need to use it, and 
Mexican use has been going down. It is true that TriCal, the 
distributor in California, is fishing around to grow the market 
in Mexico, but it is being driven by the distributor more than 
by any----
    Mr. Issa. Excellent. I am glad to know that if Florida 
shuts down, California will be growing profitable tomatoes.
    Mr. Mellano. They would be tough in the wintertime to eat, 
though.
    Mr. Issa. I will report that to Harry Sing & Sons in my 
district. The Montreal Protocol limits, as we have discussed 
repeatedly, to 2005, without exception, unless an exemption is 
granted, the use of methyl bromide. We are discussing 
extensions to 2005. In 2015, the same kicks in for developing 
nations. For all of you on this panel--and I don't want you all 
to answer, so just ``yes'' or ``no,'' please, because I want 
Mr. Radanovich to get back to his time.
    If we were to shut down today and Mexico, as our neighbor 
and a major producing partner and sometimes competitor, were to 
continue to 2015, haven't we, in a sense, hurt the ability--
particularly for the organic industry who have been 
experimenting and finding alternatives--haven't we, in fact, 
hurt the ability for them, with their lesser dollars for 
experimentation, to kick in?
    And the final part of this yes-or-no question is, in a 
sense, don't we need to have a hybrid here of reduce methyl 
bromide whenever possible, increase experimentation and 
research so that by 2015 it will be a very teachable skill to 
Mexico, China and other developing nations? Isn't that an 
ultimate goal that we can all agree on here today, that 
regardless of the size of the exemption, whether something is 
granted, we have a transition problem in the developed world to 
get the answers by 2015? Can I just get a yes or no on this, 
and Mr. Radanovich will ask all your other questions.
    Mr. Bair. Yes.
    Mr. Brown. Yes.
    Mr. Mellano. Yes.
    Mr. Wenger. Yes.
    Mr. Doniger. No, it can be done much faster than that.
    Mr. Issa. But, yes, the goal is to get it done.
    Mr. Doniger. To get it done in the next couple of years.
    Ms. Bogenholm. And the reason it can be done is many of 
those companies in the United States are growing in Mexico 
also, most of those companies that are big vegetable companies 
here are half-owners in major Mexican companies and, yes, it is 
going to go very quickly down there, much quicker.
    Mr. Issa. Thank you. Mr. Wolf?
    Mr. Wolf. I don't have the information to answer.
    Mr. Issa. I will take that as a yes. Thank you. Yield back, 
Mr. Chairman.
    Mr. Hall. Thank you, Mr. Issa. The Chair recognizes Mr. 
Radanovich. You were kind enough to yield part of your time to 
the gentlelady from Missouri, so we recognize you for 5 
minutes.
    Mr. Radanovich. Thank you, Mr. Hall. I appreciate it, Mr. 
Chairman, and for the extra time as well. I am going to try to 
take advantage of that by asking as many questions as I can, so 
your short responses would be real helpful.
    Mr. Wenger, I think you may have said it in the last round 
of discussion, the reason for the reduction in the overall 
baseline, has that been because of a large movement of row-crop 
production going into fruit-nut production which would require 
less methyl bromide? Did you or Mr. Brown say that?
    Mr. Wenger. I don't know how many of the row crops utilize, 
but definitely anytime you are talking about cropping patterns, 
you see a lot going into permanent crops from row crops, 
especially if they have been unprofitable for some of those in 
the row crop industry.
    Mr. Radanovich. But that movement means less use of methyl 
bromide.
    Mr. Bair. Frankly, because you are either going from every 
year or almost every year to once over a long period of time.
    Mr. Wenger. I think that anytime you look, in agriculture, 
you better not look at last year and say I am going to plant 
the crop based on last year because you are going to go broke. 
You have to look at trends, and I think with methyl bromide it 
is the same thing. The goal is we want to phaseout. What we are 
talking about here is the critical use exemption is part of it, 
and what is fair. And if we are going to phaseout, then the 
whole world needs to phaseout. But what we are talking about is 
the critical use exemption.
    Mr. Radanovich. Very good, thank you. Mr. Bair, you had a 
similar example of the use of alternatives to methyl bromide in 
milling that--the story being similar, and it has met with 
limited success. Can you just briefly tell me that story?
    Mr. Bair. Yes, thank you. There has been much said about 
sulfuryl fluoride, and I am not disparaging any alternatives. 
We would like there to be more alternatives. We would like to 
have more tools in the toolbox. But a couple of facts that are 
important to know about sulfuryl fluoride, first of all, it is 
not registered for use on any enrichment, like iron, niacin, 
riboflavin, thiamin, that are any grain-based foods in your 
supermarket, it is not approved for use on them. So, if your 
plant is making, say, a cake mix, and you have got cocoa and 
shortening and salt and sugar and other things, you can't use 
it in that situation. It is not approved for--again, 
ingredients or enrichment.
    There are very few international tolerances. So, if you are 
exporting a food product, your product may very well have 
illegal residues when it gets to that foreign country. And, 
also, because of a concern of over-exposure to fluoride, EPA, 
when they wrote the label, put in some very weird language 
about exposure to the point where it basically eliminates its 
use in warehouses or any stored product area.
    Mr. Radanovich. Very good. Thank you. Mr. Wolf, it seems to 
me that there is just a lot of debate on whether there really 
is a substitute for methyl bromide yet or not. And what I get 
from the testimony is that there really isn't anything out 
there yet that has all the benefit of methyl bromide without 
any harm to the environment. Is there something that can 
exactly replace methyl bromide with all the benefits, and yet 
not yield the harmful benefits to the environment?
    Mr. Wolf. As I stated in my testimony, I am not here with 
knowledge from methyl bromide, so I am not in a position to 
answer that question. I don't have the information.
    Mr. Radanovich. Mr. Doniger, I am wondering if you can give 
me your thoughts on two products, Telone and Metam sodium, two 
potential methyl bromide alternatives? Is it true that the NRDC 
believes Telone to be highly carcinogenic, and metam sodium to 
be one of the top ten most dangerous chemicals? Do you support 
its registration as an alternative, or maybe you can elaborate 
on that.
    Mr. Doniger. These two chemicals are registered now. They 
are under review, as is methyl bromide. Methyl bromide, I would 
hazard a guess, was last registered in 1961. They are all 
overdue for safety reviews. They do need to be subjected to an 
up-to-date look at health and safety, and EPA is doing them in 
a package--in other words, all the ones that are used for 
similar purposes are being evaluated, quite sensibly, in the 
same package. We don't have any objection to doing that, and we 
don't want to see methyl bromide replaced by something more 
dangerous. We want to see the range of alternatives increase.
    There are some other compounds in the registration 
pipeline, as you have heard, and there are practice changes 
that can be made to further minimize the use of this compound. 
Things have been coming down. They are lower than the current 
critical use requests now. Let us take yes for an answer and 
continue with the progress that is being made. That is our 
position.
    Mr. Radanovich. Can anybody on the panel--I am not sure who 
to specifically ask here, but can anybody give me an idea of 
when a suitable alternative to methyl bromide can be available 
at an economic price to the people that need to use them?
    Mr. Doniger. Sir, it is happening every day, percentage-by-
percentage of the use. That is why things have been coming 
down. We are succeeding. There is not going to be one single 
chemical that is the drop-in replacement for all uses of methyl 
bromide, but the suite of alternatives is expanding, and that 
is why the use is declining. We are at the point now where the 
exemptions don't have to be as large as what is requested. Not 
zero yet, but smaller.
    Mr. Radanovich. But that criteria will never get you to 
zero. I mean, it just won't happen without a suitable 
alternative.
    Mr. Doniger. It may.
    Mr. Radanovich. Mr. Mueller.
    Mr. Mueller. Five years ago, I spent--methyl bromide cost 
about $1.85 a pound for our company. Today, it costs $8.17 a 
pound. It was an easy insurance to be able to go in and 
disinfest a building, a facility, and you didn't have to spend 
a lot of time sealing or doing the extra things that took 
manpower. At $8 a pound, you do go in and do all those things, 
and you reduce not only the number of times you need to 
fumigate, but the amount of fumigant that you add to an 
existing building. So, I believe because we are getting better 
at fumigating and the price is higher, almost four times 
higher, that the fumigators are using less fumigant throughout 
the country.
    I guess the analogy that I would use is, if gasoline was 25 
cents a gallon, you could go out and drive all day long, but if 
it was $8 a gallon, you would be very careful how you spent it.
    Mr. Radanovich. All well and good, too, everything that has 
been done, I think, in reductions is a very good thing, but 
everything that you are talking about will never get us to zero 
without a suitable replacement to methyl bromide.
    Mr. Doniger. Sir, I think you are right, except that it 
won't be one suitable replacement, it will be a set of suitable 
replacements, and you keep filling out the suite and knocking 
off categories of use, reducing the total use, that is how the 
phaseout of CFCs was won, that is how the phaseout of Haalons 
was one, and there is no one solution for any one of those 
chemicals that has previously been phased out, and we got 
there. Now, with CFCs, there is a tiny little exception left 
for asthma medicines, and it is not as small as it should be 
because we are even making progress there. You get going, keep 
it going, and you can get very, very close to zero.
    Mr. Radanovich. Will that go beyond 2005?
    Mr. Doniger. The inhaler?
    Mr. Radanovich. Get down to that, because I support the 
process, I just don't want people going broke in the meantime.
    Mr. Doniger. I am not coming here and saying what the 
number should be, I am telling you that the number that is 
requested than where the use and the production are now, and 
there is this huge stockpile to work down.
    Mr. Radanovich. Yes. What I am saying is that it is 
probably going to take a little bit longer than 2005, which is 
the cutoff date.
    Mr. Doniger. And that is why the exemption process, 
properly implemented, is there.
    Mr. Radanovich. Yes, sir?
    Mr. Mellano. I want to say that I agree with Mr. Doniger, 
and I never do, so I thought I better say that. However, I 
disagree with his timeline. The flower growers, we are willing 
to stand on our data, we have it here. Now, if he believes that 
the timeline should be shorter, they ought to produce data, 
scientific data, that is all we are asking for, and then we 
will produce our scientific data, and then you guys can decide. 
That is all we are asking.
    There is no question that we want to reduce it, and we have 
reduced it. The question is when, and we don't believe we can 
do it in the next 2 or 3 years.
    Mr. Radanovich. I agree. Thank you very much for your 
testimony. Thank you, Mr. Chairman.
    Mr. Hall. Thank you, and I thank the committee. It is 
pretty obvious why the minority and the majority agreed on this 
panel and selected you, and Chairman Barton agreed to it, 
because you have been very helpful and you have been very 
patient. You obviously are all very successful in what you are 
doing, and you are also generous with your time. We thank you, 
and we are adjourned.
    [Whereupon, at 3:05 p.m., the subcommittee was adjourned.]
    [Additional materal submitted for the record follows:]

                                           Dow AgroSciences
                                                     August 2, 2004
The Honorable Ralph M. Hall
Chairman, Subcommittee on Energy and Air Quality
2405 Rayburn House Office Building
House of Representatives
Washington, DC, 20510
    Dear Congressman Hall, we appreciate the opportunity to provide the 
Subcommittee on Energy and Air Quality information on the Dow 
AgroSciences' products that are alternatives to methyl bromide. Our 
company has a keen interest in this issue as our products are viable, 
economic alternatives for U.S. farmers and others as they continue the 
phase-down of methyl bromide in accordance with the Montreal Protocol. 
Dow AgroSciences has made and continued to make significant investments 
in research and development, registration and production facilities for 
the commercialization of effective alternatives to methyl bromide.
    We hope that the information provided in this document is 
informative and helpful as the Committee considers this issue. Please 
feel free to contact me if I can be of further assistance on this 
issue.
            Sincerely,
                                              Reid Sprenkel
                                   Global Business Leader-Fumigants
cc: Mr. Kurt Bilas
      
    Question 1. Does Dow AgroSciences (or any its affiliates) 
manufacture, export or import MB in the United States? Anywhere in the 
world?
    Response: No, although our parent, The Dow Chemical Company, was a 
producer of methyl bromide (MB) up until the mid-1980's, Dow Chemical 
has divested all its MB business and no longer manufactures, exports or 
imports MB.
    Question 2. What products does Dow AgroSciences currently market 
that could serve as an alternative to MB?
    Response: Dow AgroSciences currently markets several products that 
are effective MB alternatives that include one of the following active 
ingredients: 1,3-dichlorpropene (1,3-D), 1,3-D plus chloropicrin and 
sulfuryl fluoride. Dow AgroSciences markets other products that, to a 
lesser degree, also control pests for which MB is used.
    1,3-D is a mainstay agricultural preplant soil fumigant for 
controlling nematodes, weeds and diseases in key horticultural crops. 
When combined with chloropicrin, 1,3-D controls an even broader range 
of soil borne pests. 1,3-D is marketed in the United States under the 
brand names Telone ', Curfew ' and InLine 
'. 1,3-D products are also marketed under other brands by 
U.S. formulators. In addition to these, other Dow AgroSciences' 
products such as Goal ' and Treflan ' herbicides, 
can be used in combination with 1,3-D in some cropping situations to 
enhance weed control performance.
    Sulfuryl fluoride is marketed under the brands ProFume 
TM gas fumigant for postharvest applications, such as grain 
processing facilities, and Vikane TM gas fumigant for 
structural fumigations to control termites and other pests. ProFume 
received US EPA registration in January, 2004 for use on dried fruits, 
and tree nuts as well as in grain milling facilities and additional 
registered uses for ProFume are expected soon.
    Question 3. Can these alternative products completely replace the 
use of MB at this time?
    Response: Not completely, but they are viable alternatives for most 
current MB applications.
    Question 4. Are these alternatives registered? What is the status 
of their registration?
    Response: Yes. Each of the Dow AgroSciences fumigant alternatives 
to methyl bromide has been registered by the US EPA. In fact, 1,3-D and 
sulfuryl fluoride are the only fumigant products that have successfully 
completed the US EPA re-registration process ensuring their future as 
alternatives to methyl bromide.
    Question 5. Are there any environmental issues associated with 
these alternatives? Please explain.
    Response: Successfully completing the EPA re-registration process 
is a clear demonstration that Dow AgroSciences' methyl bromide 
alternative products satisfy the comprehensive requirements of modern 
pesticide regulatory standards, and, when used according to label 
directions, do not present unreasonable risks to humans or the 
environment.
    Question 6. What crops are 1,3-D plus chloropicrin used on? How 
long has this product been on the market?
    Response: Products containing 1,3-D plus chloropicrin are 
registered in the US for fumigation of soil prior to crop planting. 
There is no limit to the range of crops on which the products can be 
used. 1,3-D plus chloropicrin has been registered and sold in the US 
since 1975. Today these products are used successfully in preplant 
operations for a wide variety of fruit and vegetable crops nationwide, 
most notably, but not limited to, strawberries, tomatoes, peppers, 
melons, onions, carrots, fruit and nut trees (replanting) and flowers.
    Question 7. What pests are controlled with 1,3-D plus chloropicrin 
products and how does that compare to MB?
    Response: Like MB, 1,3-D plus chloropicrin products control a broad 
spectrum of soil borne pests, nematodes, diseases and weeds. The broad 
spectrum control provided by these products allows farmers to reliably 
establish strong, healthy plants that lead to higher yields of high 
quality produce.
    There is a very large database of field trial results in the US 
(much of which has been generated by USDA and university researchers 
over the last 8-10 years) that show 1,3-D plus chloropicrin products 
compare favorably with MB, provide comparable control of pests, and 
produce equivalent crop yields. In fact, in many instances yields from 
1,3-D plus chloropicrin treated crops are higher than those from MB 
treated crops, as demonstrated by the increase adoption and use of this 
product in the market place in strawberry and other crops .
    Question 8. How does this product compare in cost to MB?
    Response: 1,3-D plus chloropicrin products are typically equal to 
or less expensive than MB. For example, for California strawberries, 
the most widely used 1,3-D+chloropicrin product, InLine ', 
costs less than half that of MB per acre. In the Southeastern US, a 
typical ``in bed'' application of Telone ' C-35 (1,3-D plus 
chloropicrin at 35%) combined with herbicide costs approximately $100 
less per acre than the typical dose of MB. It is important to note that 
prices may vary from state to state and can fluctuate. The dose used 
can also affect the cost. Again, as a general rule, 1,3-D plus 
chloropicrin products are favorably priced and often less expensive 
than MB.
    Question 9. How does this product compare in efficacy to MB?
    Response: The efficacy of 1,3-D plus chloropicrin, either alone or 
in combination with an herbicide when needed, compares very favorably 
with MB and MB plus chloropicrin combinations. Telone products have 
been tested extensively in commercial scale research and demonstration 
trials in the US and internationally and have demonstrated consistent, 
high levels of efficacy.
    Question 10. How do the crop yields using this product compare to 
those grown using MB?
    Response: 1,3-D plus chloropicrin, either alone or in combination 
with an herbicide when needed, has provided yields as good as or better 
than MB and MB plus chloropicrin combinations in numerous commercial 
scale research and demonstration tests. This is validated by the 
increasing adoption of Telone products on key crops in the US and 
overseas.
    Question 11. How will township caps in California and karst 
restriction in Florida impact the use of Telone products?
    Response: Township caps in California: Recognizing the important 
role of 1,3-D as a methyl bromide alternative, the California 
Department of Pesticide Regulation (CPDR) has developed and implemented 
a ``California Management Plan'' (CMP) for 1,3-D. The CMP, which 
provides flexibility in the township allocations of 1,3-D within 
California, permits annual uses of 1,3-D at a level of 180,500 
``adjusted'' pounds per township. For areas requiring uses that exceed 
this level, the CMP can accommodate a greater demand if it is justified 
by region-specific assessments. This ``region specific'' facet of the 
CMP is what has been utilized recently to permit annual township 
allocation levels greater than the 180,500 lbs in specific ``high 
need'' townships in Merced, Santa Barbara and Ventura counties.
    It is important to stress that if 1,3-D were the only alternative 
to methyl bromide, the current CMP would not likely have the capacity 
to support a complete changeover from methyl bromide to 1,3-D in all of 
the 350 fumigant use townships in California. Instead, in approximately 
20 of the 350 townships, additional alternatives would be needed. 
Methyl bromide alternatives other than 1,3-D are registered in 
California (e.g. chloropicrin and metam-NA) and are well positioned to 
satisfy this need.
    Fortunately, the uses of methyl bromide in California are tracked 
and regulated using a system similar to that required for 1,3-D within 
the CMP. These methyl bromide township limits (now being converted 
within the CDPR regulations to monthly air concentration limits) in 
combination with the 1,3-D CMP product tracking and allocation 
requirements provide an excellent framework upon which to base the 
allocation of licensed methyl bromide within California following the 
phase-out of that product beginning January 2005.
    Karst geology in Florida: The vast majority of Florida tomatoes, 
peppers and strawberries are grown in seven counties, with only 10% of 
the current methyl bromide uses on these crops occurring in regions of 
the state where karst conditions are known to exist.
    Buffer Zones: In 2003, the US EPA approved a refinement of the 
required 1,3-D buffer zone on all Telone labels from 300 feet to 100 
feet for annual cropping. Farming is predominately in areas of low 
housing density and buffer zones have minimal impact on acreage able to 
be treated. In the worst cases of high housing density area, analyses 
of satellite images of small fields show that less than 3 % of the 
field acres are affected by buffers of this size. Given the predominate 
areas of low housing density, this impact of buffer zone restrictions 
is negligible.
    Question 12. Are there herbicides registered and available that 
will help control tough to control weeds such as nutsedge? If so, how 
do they compare in efficacy and cost to MB?
    Response: Yes, two new herbicides with excellent activity against 
nutsedge have been registered and are commercially available. Both 
received expedited review by the EPA as methyl bromide alternatives due 
to their nutsedge activity. Halosulfuron methyl is registered as Sandea 
' by the Gowan Company. Syngenta recently introduced 
trifloxysulfuron-sodium, the active ingredient in Envoke '. 
Both products are labeled for tomatoes. Sandea has a broad label and 
can be used on many other crops. Efficacy of both products is very 
good. Other existing products have been used to manage nutsedge. Dual 
' Magnum has been approved for use against nutsedge and 
peppers in Florida. In addition, fumigants and herbicides such as metam 
sodium, Treflan ' and Devrinol ' have 
demonstrated utility in helping to manage nutsedge when used in 
combination with 1,3-D.
    Question 13. 1,3-D recently received changes to the label regarding 
personal protective equipment (PPE). Please explain what those changes 
were and how this will affect the usage of this product? Please 
describe the PPEs required for MB?
    Response: In 2003, the Telone product labels received significant 
changes related to the Personal Protective Equipment (PPE) 
requirements. The PPE requirements (including respiratory protection 
and dermal protection) for the 1,3-D plus chloropicrin combination 
products are now consistent with other soil fumigants that are used in 
combination with chloropicrin, including methyl bromide.
    Question 14. Are Telone products viable alternatives for all pre-
plant uses of MB?
    Response: Yes. As preplant soil fumigants, Telone products with and 
without chloropicrin can be used for all the same uses as MB. It is 
recognized that there are legitimate situation locations for which 
other alternative solutions are needed or critical use exemptions may 
be appropriate where limitations of alternatives exist, i.e., after 
township caps in California are reached and in the 10% of acreage in 
Florida where specific restrictions exist.
    Question 15. Are Telone products economic alternatives for all pre-
plant uses of MB?
    Response: Yes. As pre-plant soil fumigants, Telone products with 
and without chloropicrin can be used economically for all the same uses 
as MB as has been seen with the increasing adoption of Telone products 
on key crops in the US and overseas It is recognized that there are 
legitimate situation locations for which other alternative solutions 
are needed or critical use exemptions may be appropriate where 
limitations of alternatives exist. i.e., after township caps in CA are 
reached, in the 10% of acreage in Fl where specific restrictions exist.
    Question 16. Have Telone products been tested under commercial 
production conditions?
    Response: Yes. Telone products have been tested extensively under 
commercial production conditions in the US and widely used for 
commercial crop production in the US and internationally for decades. 
Telone has already been utilized in place of MB successfully in US 
crops such as strawberries and peppers in California. Is has also been 
adopted in various crops in Europe and Australia, including tomatoes, 
strawberries and peppers, and is also used in several Article 5 
countries.
    Question 17. Have Telone products been tested extensively inside 
the US?
    Response: Yes. Telone products have been tested extensively in the 
US and widely used for commercial crop production in the US and 
internationally for decades. Telone has already been utilized in place 
of MB successfully in US crops such as strawberries and peppers in 
California. Is has also been adopted in various crops in Europe and 
Australia, including tomatoes, strawberries and peppers, and is also 
used in several Article 5 countries.
    Question 18. How will the US EPA Re-registration process affect 
Telone?
    Response: 1,3-D has completed the EPA re-registration process. It 
is important to note that 1,3-D is the only soil fumigant active 
ingredient that has successfully completed this process. Following the 
issuance of the 1,3-D re-registration decision by the US EPA, Dow 
AgroSciences has worked successfully to refine and reduce some of the 
restrictions that were placed on the product as a condition of re-
registration (e.g. buffer zone distances). These post-RED regulatory 
refinements help optimize the opportunities for 1,3-D soil fumigants to 
effectively serve as alternatives to methyl bromide. It is important to 
note that as other soil fumigants complete the re-registration process, 
it is likely their use conditions and restrictions will be similar to 
those for 1,3-D.
    Question 19. What types of application equipment can be used to 
apply Telone products?
    Response: Telone products have significant application flexibility 
and can be applied in two basic ways: (1) Using the traditional shank-
injection method in the same manner that MB is applied. This method is 
a direct ``plug-in replacement'' application method and requires very 
little change from the current MB application technology. (2) Telone 
products can also be applied by drip irrigation method whereby the 
products are injected at very low concentration into irrigation water 
and applied through irrigation drip tape. This application method 
offers additional technical advantages, flexibility and conveniences to 
growers. Drip application is not technically possible with MB.
    Question 20. Are there advantages to using MB rather than Telone 
products? If so, please describe them.
    Response: Telone and MB have various strengths and weaknesses which 
vary depending on the crop and conditions under which they are used. 
Perhaps, the most significant advantage of using MB is just the 
familiarity that some users may have with the product. The US Critical 
Use nomination process has resulted in generous allowances for some 
sectors and has not provided incentives to adopt alternatives. However, 
many farmers have evaluated alternative technologies and learned to use 
Telone products and other alternatives to their advantage. The adoption 
of 1,3-D by California strawberry growers, so far converting 
approximately 25% of the California strawberry acres, is an excellent 
example of the ongoing market transition to alternatives.
    Question 21. Are there limitations on the use of Telone products as 
an alternative to MB? Please explain.
    Response: As preplant soil fumigants, Telone products with and 
without chloropicrin can be used for all the same uses as MB. It is 
recognized that there are legitimate situation locations for which 
other alternative solutions are needed or critical use exemptions may 
be appropriate where limitations of alternatives exist, i.e., after 
township caps in CA are reached and in the 10% of acreage in Florida 
where specific restrictions exist. Where severe hard-to-control weed 
problems exist, such as nutsedge, other herbicides can be used in 
combination with the fumigation treatment to overcome this concern.
    Question 22. Can U.S. farmers completely stop using MB and switch 
to Telone products today?
    Response: Yes, for pre-plant applications, and in fact some farmers 
already have. The success of this is further demonstrated with the 
increasing adoption of Telone products on key crops in the US and 
overseas. While some farmers may not choose to convert all their acres 
immediately to an alternative, the transition is already underway in 
many instances.
    Question 23. Why did Dow AgroSciences develop sulfuryl fluoride 
(SF) for postharvest fumigation?
    Response: Dow AgroSciences began the development of ProFume to 
ensure that U.S. agriculture would have an effective post-harvest 
fumigant following the phase out of methyl bromide in 2005. The 
development of ProFume was initiated in the mid 1990's in response to 
the dried fruit and tree nut industry's expressed need for a MB 
alternative. Sulfuryl fluoride had already become a widely used 
fumigant for structural uses where MB had once been used. The initial 
work to develop ProFume as a commodity fumigant was a cooperative 
effort between the California Dried Fruit Association and the USDA 
laboratories in Fresno. Once initiated, the work was expanded to 
include uses in cereal grain storage, milling and food processing.
    Question 24. What is the current registration status within the US 
including the status of state registrations?
    Response: Since obtaining the US EPA Section 3 registration for 
ProFume in January, 2004, 47 states plus the District of Columbia have 
granted approval. ProFume registration decisions in the remaining 3 
states are anticipated before the end of 2004. Vikane has been 
registered for use in the U.S. since 1961 and is registered in all 
states where it is needed.
    Question 25. Which pests does SF target? Does it kill all life 
stages including eggs? Does MB kill all life stages including eggs?
    Response: Yes, sulfuryl fluoride controls all life stages of all 
pests of economic importance in structural and postharvest uses. These 
pests include beetles, weevils, termites, moths and rodents. SF has 
been registered for more than 40 years and effectively used in millions 
of fumigations world wide that validate the effectiveness of this 
compound. For postharvest uses specifically, laboratory research, field 
research trials and commercial applications of ProFume have 
demonstrated that SF is effective as a methyl bromide alternative.
    Question 26. How does the operational down time of a facility 
fumigated with SF compare to MB? Will a grain mill or other food 
handling facility be required to be shut down longer due to fumigating 
with SF?
    Response: No, users of ProFume will not be subject to longer shut 
down time as compared to fumigation with methyl bromide. In developing 
ProFume, the milling and food handling industry stressed the 
requirement that any new pest control technology that lengthens down 
time would not be acceptable. The concept of Precision Fumigation* was 
developed with that goal in mind. Experience has shown that using 
Precision Fumigation, the fumigator and miller have the flexibility to 
alter the actual exposure time dependent on the target pest, 
environmental conditions, quality of sealing, etc. In most cases, SF 
fumigations have been successful with exposure times equal to or less 
than those required for MB fumigations.
    Question 27. How does the cost of SF compare to MB? Does the 
fumigant represent a large percentage of the total cost of a fumigation 
treatment? Will using SF cause a rise in the price of food commodity 
due to a higher cost of fumigation for a food processing facility?
    Response: Overall, the cost of fumigation is not a significant part 
of the overall annual production cost for a mill. Any difference in 
cost between treatments with these two fumigants is insignificant in 
the overall operations costs of the food processing facility. By 
incorporating good fumigation practices, like Precision Fumigation, and 
effectively using the Fumiguide* Program for ProFume gas fumigant, 
these differences can be minimized. Generally speaking, the cost of the 
fumigant is roughly \1/3\ of the total cost of the fumigation. Other 
components include labor and fumigator profit.
    Question 28. Please explain the concept of ``Precision Fumigation'' 
and how it will be used by the fumigation industry?
    Response: Precision Fumigation is based on Integrated Pest 
Management (IPM) principles and is a decision making process that takes 
into consideration factors like pest biology, environmental conditions, 
exposure time, and sealing effectiveness in order to optimize dosage, 
application rates and timing. By taking into consideration all of these 
key fumigation variables, the fumigator can offer flexibility to his 
customer to minimize the downtime of the mill. ProFume is the only 
product that incorporates tools such as the Fumiguide and Precision 
Fumigation to enable the fumigator to efficiently manage a host of 
complex variables and offer the miller a variety of choices relative to 
the fumigation of his facility.
    Question 29. Does Dow AgroSciences have enough production capacity 
to supply the anticipated demand for SF?
    Response: Yes. Dow AgroSciences production capacity can meet the 
growing market need today. Dow AgroSciences has made substantial 
investment in expansion of its sulfuryl fluoride production capacity in 
anticipation of greater demand following the scheduled phase-out of MB 
in the postharvest fumigation market.
    Question 30. In what uses, geographies or circumstances would SF 
not be a viable alternative to MB?
    Response: Sulfuryl fluoride is not being developed for use in the 
control of pests in fresh fruits and vegetables and fresh cut flowers 
due to the potential for fumigants to cause damage to these 
commodities. ProFume would have a fit in many quarantine and pre-
shipment applications; however, exemptions for methyl bromide under the 
Montreal Protocol in this use pattern have made this potential label 
expansion a low priority for development at this time.
    Question 31. Are there advantages to using MB rather than SF? If 
so, please describe them.
    Response: ProFume and MB have various strengths and weaknesses 
which vary depending on the conditions under which they are used. 
Perhaps, the most significant advantage from using MB is just the 
familiarity that users may have with the product. Some fumigators have 
been using MB for decades and may prefer to continue using what they 
know, rather than make the effort to adopt alternative technologies. 
Other fumigators have already successfully transitioned to ProFume and 
other alternatives. As previously stated, sulfuryl fluoride marketed as 
Vikane gas fumigant has replaced the vast majority of methyl bromide in 
the structural fumigation market. Users accustomed to methyl bromide 
for years have successfully switched to Vikane.
    Question 32. Are there limitations on the use of SF as an 
alternative to MB? Please explain.
    Response: While sulfuryl fluoride compares favorably to MB in 
performance and properties, as well as being an excellent alternative, 
there are some food uses for which sulfuryl fluoride is not yet 
registered.
    Question 33. Does Dow AgroSciences have an estimate of the amount 
of MB that can be replaced using either Telone products or SF today? In 
one year? In two years? In three years? In ten years?
    Response: Methyl bromide users have successfully phased-out a 
significant MB volume over the past 10 years. During this time there 
have been no production disruptions or economic disadvantages faced by 
farmers or others who have converted to alternatives. Dow AgroSciences 
believes that this trend towards phase-down can continue without 
causing economic disruption to current MB users. As market adoption of 
1,3-D and sulfuryl fluoride as MB alternatives continue, taking into 
account the limitations discussed in this Q&A, the United States could 
phase down methyl bromide use to at least 20% of the 1991 base in three 
years or less. Further reduction of MB could take place if other 
alternatives were also adopted.

    ' TM*Vikane, Telone, ProFume, Inline, Curfew, 
Goal, Treflan, Precision Fumigation and Fumiguide are trademarks of Dow 
AgroSciences LLC
    ' Sandea is a trademark of the Gowan Company
    ' Envoke and Dual Magnum are trademarks of Syngenta
    ' Devrinol is a trademark of United Phosphorus
                                 ______
                                 
                                           Dow AgroSciences
                                                    August 27, 2004
The Honorable Ralph M. Hall
House of Representatives
2405 RHOB
Washington, DC 20515
    Dear Congressman Hall, er your letter dated August 17 attached are 
the responses to the follow-up questions posed to Dow AgroSciences 
regarding methyl bromide alternatives. We appreciate the opportunity to 
add to the hearing record regarding this subject. Your letter requested 
that both an electronic and paper copy of the responses be sent. 
Unfortunately, we do not have electronic versions of all the supporting 
documentation/studies. Consequently, only a paper copy is provided for 
some of our responses. The support materials (both paper and 
electronic) are contained in the accompanying three ring notebook. We 
appreciate your interest in this important issue.
            Regards,
                                              Reid Sprenkel
                                  Global Business Leader--Fumigants
cc: Mr. Mark Menezes
    Mr. Kurt Bilas
                          Follow-up Questions:
    Question 1. In your response to Question No. 7, you state, ``In 
fact, in many instances yields from 1,3-D plus chloropicrin treated 
crops are higher than those from MB treated crops, as demonstrated by 
the increase adoption and use of this product in the market place in 
strawberry and other crops.'' Please provide summary data that support 
this statement with regard to both increased crop yields and increased 
use.
    Response: There are several studies conducted by independent 
researchers that demonstrate yields with alternatives that contain 1,3-
D plus chloropicrin are as good as or better than those with MB. The 
most well known and longest running study has been conducted by IR-4 
since 1999. Two strawberry research trials were conducted each year in 
both Florida and California. Numerous alternative treatments were 
compared with the MB standard on commercial farms. Results from the 
first three seasons have been summarized and are included. In these 12 
trials, 15 of the 18 treatments that contained 1,3-D plus chloropicrin 
were numerically superior to the MB plus chloropicrin standard in the 
same trial. Similar results came from a separate study in Florida. In 
this two year study, a 1,3-D plus chloropicrin treatment, in 
combination with registered herbicides, was compared to the standard MB 
plus chloropicrin treatment on commercial farms. Seven trials were 
conducted on tomatoes and three on pepper by University or USDA 
researchers. The 1,3-D plus chloropicrin treatment was numerically 
superior to the MB standard in six of the seven tomato trials and two 
of the three pepper trials. Average yield increases over all trials 
were 7.97 and 7.17 percent for tomato and pepper, respectively. In 
addition, two recent publications (Gilreath et al. 2004. Crop Science) 
document the yield increase of 1,3-D plus chloropicrin compared to MB 
in tomatoes and peppers. Supporting details and documentation of each 
of these research trials are included as both hard copy and electronic 
attachments.
    Documentation to demonstrate increased adoption of 1,3-D plus 
chloropicrin comes from Crop Data Management Systems (CDMS) in 
California. All applications of any pesticide must be recorded in 
California and CDMS is the company that maintains and reports these 
records. Between the years 1999 to 2003, use of 1,3-D has increased 
from 632 to 2512 acres in peppers and from 0 to 5817 acres in 
strawberries. Overall use of 1,3-D in the state has increased from 
31,661 acres to 53,401 acres in this same time period. A hard copy 
summary of this information is attached.
    Question 2. In your response to Question No. 10, you state, ``1,3-D 
plus chloropicrin, either alone or in combination with an herbicide 
when needed, has provided yields as good as or better than MB and MB 
plus chloropicrin combinations in numerous commercial scale research 
and demonstration tests.'' Please provide summary data that support 
this statement.
    Response: Data to support this question are the same as those cited 
for the above question which, in part, requested information to 
document yield performance of 1,3-D plus chloropicrin relative to MB.
    Question 3. In your response to Question No. 25, you state, ``For 
postharvest uses specifically, laboratory research, field research 
trials and commercial applications of ProFume ' have 
demonstrated that SF is effective as a methyl bromide alternative.'' 
Please provide summary data that support this statement.
    Response: Laboratory research results have been widely reported 
within the international community. The results of one such study, 
conducted by Central Sciences Laboratory in the UK is attached in which 
Dr. Chris Bell, globally recognized as an expert in stored product 
insect control, characterizes sulfuryl fluoride as a ``like for like'' 
replacement for methyl bromide in many ways. The efficacy of sulfuryl 
fluoride is also described in the May, 2002 issue of the American 
Institute of Baking Technical Bulletin. Fumigation companies that are 
responsible for the majority of mill fumigations within the US also 
report successful experiences with ProFume ' in the attached 
newsletters from both Industrial Fumigants Company (IFC) and Fumigation 
Service and Supply, Inc., two of the largest fumigation companies 
within the US summarize their positive experiences using ProFume. 
Positive results with ProFume in the Dried Fruit and Nut Industry are 
reported in the attached article found in the Pacific Nut Producer 
Magazine, featuring comments from both Diamond Walnut of Californian 
and the California Dried Fruit Association. Three attached articles 
from the USDA publication ``Methyl Bromide Alternatives'' also discuss 
the future of ProFume as an alternative to methyl bromide.
    Question 4. In your response to Question No. 26, you state, ``In 
most cases, SF fumigations have been successful with exposure times 
equal to or less than those required for MB fumigations.'' Please 
provide summary data that support this statement with regard to both 
effectiveness and exposure times.
    Response: The attached Louisiana Rice Mill case study describes the 
efficiencies that can be achieved with ProFume and Precision Fumigation 
techniques. Decreased down time for the mill results from a combination 
of shorter exposure and aeration periods. This case study is 
representative of what would be expected in mill and food processing 
facility fumigations in general. Since the first commercial sales of 
ProFume in the US in April of this year, roughly 10% of the wheat and 
rice mill fumigations that have occurred (22 out of an estimated 237 
fumigations) have been done using ProFume. Seventeen wheat mills and 5 
rice mills across a wide geography within the US have been successfully 
fumigated with this product in the first four months since product 
launch. Several of these mills are planning subsequent fumigations with 
ProFume based on a high level of customer satisfaction relative to 
biological control, mill down time, and the flexibility which is 
offered by the FUMIGUIDE ' and Precision Fumigation 
'. Dow AgroSciences anticipates that in 2005 ProFume will 
displace methyl bromide in 35% of the mill fumigations in the US and 
that in 2006 ProFume will be able to displace 100% of the methyl 
bromide used in milling, food processing and dried fruit and tree nut 
fumigations in this country.
    Question 5. In your response to Question No. 31, you state, ``As 
previously stated, sulfuryl fluoride marketed as Vikane ' 
gas fumigant has replaced the vast majority of methyl bromide in the 
structural fumigation market.'' Please provide summary data that 
support this statement with regard to the reference to ``vast 
majority.''
    Response: Sulfuryl fluoride as Vikane ' gas fumigant was 
first sold in the 1960's as a replacement for methyl bromide in the 
structural fumigation market. The development of Vikane was driven by 
the need to offer the drywood termite control industry a product that 
would not cause the odors which were often associated with methyl 
bromide fumigation. Throughout the 1970's and 1980's both Vikane and 
methyl bromide were used in this market. Throughout the 1990's, methyl 
bromide experienced increasing regulatory restrictions which ultimately 
led to its near demise within the residential drywood termite market 
and is rarely used today. Independent market research conducted as 
recently as 2003 by Specialty Products Consultants, LLC and summarized 
in the report entitled ``An Analysis of the U.S. Structural Pest 
Control Industry'' supports that Vikane is by far the market leader in 
the residential fumigation sector within the United States.
    Question 6. In your response to Question No. 32, you state, ``While 
sulfuryl fluoride compares favorably to MB in performance and 
properties, as well as being an excellent alternative, there are some 
food uses for which sulfuryl fluoride is not yet registered.'' Please 
describe the food uses for which sulfuryl fluoride is not yet 
registered. Is sulfuryl fluoride now in the process of being registered 
for these food uses? If so, when do you expect the registration process 
to be complete? If not, why not?
    Response: As described in question 24, ProFume is not yet 
registered for use on ``processed foods'' beyond those specifically 
listed on the current Section 3 registration (cereal grains such as 
wheat, rice, corn and most dried fruits and tree nuts). The current 
ProFume registration permits the fumigation of these commodities and 
their processed fractions as well as the facilities (mills) in which 
they are processed. Additional ``processed foods'' such as spices, 
finished bakery goods, and etc. are anticipated to be added to the 
federal label by first quarter, 2005. The residue research has been 
completed and the registration package is at the US EPA for review at 
this time. ProFume will not be developed for use in the fumigation of 
FRESH fruit and vegetables or FRESH cut flowers due to phyto toxicity 
concerns on fresh produce.
    Question 7. In your response to Question No. 33, you state, ``As 
market adoption of 1,3-D and sulfuryl fluoride as MB alternatives 
continue, taking into account the limitations discussed in this Q&A, 
the United States could phase down methyl bromide use to at least 20% 
of the 1991 base in three years or less.'' Please provide summary data 
that support this statement.
    Response: 19.7 MM lbs of MB have been requested for CUE's in the US 
which represent 35% of the 1991 base amount. We believe there are 
approximately 11.5 MM lbs (about 20.4% of the 1991 base) being 
requested for which our products today do not have a current or known 
pending fit.
    The resulting 8.2 MM lbs are in areas which our products, with or 
without an available herbicide partner, can replace. This includes 
1.7MM lbs requested for post-harvest uses that can be replaced by 
sulfuryl fluoride, the active ingredient in ProFume gas fumigant. 
Registrations and ample supplies of ProFume will be available by the 
end of 2005 to displace all but 2% of the requested methyl bromide 
pounds in 2006. The remaining 2% are for uses that ProFume is not known 
at this time whether it will have a fit, such as smokehouse ham and 
cheese fumigations.
    The other 6.5MM lbs of the 8.2 MM lbs come from replacement of 
preplant uses of methyl bromide with Telone products. This still leaves 
a total of 11.5 MM lbs of methyl bromide for which Telone products do 
not currently represent a viable alternative. At the present time, 
Telone is not a viable alternative only for certain types of specific 
conditions. For example, acres planted which exceed allowable use of 
Telone because of California township allocation limits, areas limited 
by karst topography or some soil types, and insufficient product 
efficacy data for some minor uses.
    We believe a three year timeframe is a reasonable and necessary 
period to transition to new alternatives. This timeline is also 
consistent with guidelines published in a recent MBTOC report. Although 
the intention of the Montreal Protocol would have been to reduce 
production and use to zero by 2005, it now isn't practical to expect 
such a reduction to happen overnight. For a reduction to the 20% level, 
it seems reasonable to implement a plan for the user community and 
others to transition at scheduled increments. So, if the starting point 
in 2005 is 35%, a 5% reduction per year for three years would result in 
a reduction to 20%.
     ' ProFume, Vikane, Telone, FUMIGUIDE and Precision 
Fumigation are registered trademarks of Dow AgroSciences LLC

                                 
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