[Senate Hearing 108-497]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-497

                   ENVIRONMENTAL PROTECTION AGENCY: 
                        FISCAL YEAR 2005 BUDGET

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   on

OVERSIGHT OF THE PROGRAMS ADMINISTERED BY THE ENVIRONMENTAL PROTECTION 
                      AGENCY FOR FISCAL YEAR 2005

                               __________

                             MARCH 10, 2004

                               __________

 Printed for the use of the Senate Committee on Environment and Public 
                                 Works


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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      one hundred eighth congress
                             second session

                  JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia             JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri        MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio            HARRY REID, Nevada
MICHAEL D. CRAPO, Idaho              BOB GRAHAM, Florida
LINCOLN CHAFEE, Rhode Island         JOSEPH I. LIEBERMAN, Connecticut
JOHN CORNYN, Texas                   BARBARA BOXER, California
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
CRAIG THOMAS, Wyoming                THOMAS R. CARPER, Delaware
WAYNE ALLARD, Colorado               HILLARY RODHAM CLINTON, New York

                Andrew Wheeler, Majority Staff Director
                 Ken Connolly, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S



                              ----------                              
                                                                   Page

                             MARCH 10, 2004
                           OPENING STATEMENTS

Allard, Hon. Wayne, U.S. Senator from the StAte of Colorado......    34
Baucus, Hon. Max, U.S. Senator from the State of Montana.........    17
Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri.......................................................    20
Boxer, Hon. Barbara, U.S. Senator from the State of California...    23
    List, EPA Inspector General findings.........................    26
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..    31
Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island    31
Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New 
  York...........................................................    36
Cornyn, Hon. John, U.S. Senator from the State of Texas..........    82
Crapo, Hon. Michael D., U.S. Senator from the State of Idaho.....    81
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
Jeffords, Hon. James M., U.S. Senator from the State of Vermont..     3
    List, Outstanding Documents and Information Requests to EPA..    79
    Report, Real Status of Mercury Control Technology............    78
    Survey, Luntz Research Companies.............................     6
Lieberman, Hon. Joseph I., U.S. Senator from the State of 
  Connecticut....................................................    73
Murkowski, Hon. Lisa, U.S. Senator from the State of Alaska......    82
Thomas, Hon. Craig, U.S. Senator from the State of Wyoming.......    12
Voinovich, Hon. George V., U.S. Senator from the State of Ohio...    13
    Letter, mercury rule.........................................    16
Wyden, Hon. Ron, U.S. Senator from the State of Oregon...........    12

                                WITNESS

Leavitt, Hon. Michael O., Administrator, U.S. Environmental 
  Protection Agency..............................................    39
    Prepared statement...........................................    83
    Responses to additional questions from:
        Senator Baucus...........................................    87
        Senator Chafee...........................................    96
        Senator Carper...........................................    90
        Senator Clinton..........................................   100
        Senator Crapo............................................   105
        Senator Inhofe...........................................   108
        Senator Jeffords.........................................   110
        Senator Lieberman........................................   161
        Senator Voinovich........................................   165
        Senator Wyden............................................   167

                          ADDITIONAL MATERIAL

Articles:
    How Industry Won the Battle of Pollution Control at EPA......45, 74
    The Next Arsenic.............................................    58

                                 (iii)

  

 
        ENVIRONMENTAL PROTECTION AGENCY: FISCAL YEAR 2005 BUDGET

                              ----------                              


                       WEDNESDAY, MARCH 10, 2004

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:27 a.m. in room 
406, Dirksen Senate Building, Hon. James M. Inhofe [chairman of 
the committee] presiding.
    Present: Senators Inhofe, Allard, Baucus, Bond, Boxer, 
Carper, Chafee, Clinton, Graham, Jeffords, Thomas, Voinovich 
and Wyden.

 OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM 
                     THE STATE OF OKLAHOMA

    Senator Inhofe. Our meeting will come to order.
    Governor Leavitt, I am very pleased to have you here 
testifying at our 2005 budget hearing. It is an honor to have 
you here. I expect that each Senator on the committee will wish 
to make an opening statement. Since we are expecting all of our 
members here, we will try to keep our opening statements under 
5 minutes.
    I would like to touch on a few issues of importance to me, 
and then we will get into more detail during the questioning 
period. First of all, this is the first hearing that this 
committee has seen Governor Leavitt since his confirmation. I 
want to publicly thank him for making Tar Creek a top priority. 
I had invited him back at the very first of the confirmation, 
not that confirmation was contingent upon this, but would he 
come out and personally see the most devastating Superfund site 
in America, Tar Creek in Oklahoma. He did that. I want to 
compliment you publicly, along with Richard Green. He has been 
really a great help. In fact, I think he is out there today or 
sometime this week. He has done a great job.
    So we are making headway now. We actually have, of the five 
legal obstacles, all five are now behind us and we are getting 
ready to clean this thing up. I found this analogous, Governor 
Leavitt, to when I became Mayor of Tulsa. We had a flooding 
problem in North Tulsa called Mingo Creek. For 25 years, they 
talked about it and nobody did anything. We finally locked 
everybody up in one room and said we are going to adopt the 
Corps of Engineers alternate 8(A). We are going to stop the 
flooding. Everyone screamed and carried signs around about how 
bad I was, but we haven't had a flood since then. That is what 
we are going to do with Tar Creek. I appreciate your 
recognizing that as significant, as it is.
    As members of this committee know, I am an advocate of 
sound science. As a result, I am concerned that the President's 
budget contains a significant cut in the overall science budget 
for EPA. Overall, the budget cuts nearly $100 million from the 
EPA science programs. I am concerned and I am hoping that this 
will not hamper our effort to induce sound science into our 
decisions.
    On the whole, this year's budget shows a continued 
commitment to the environment and environmental results, and 
not just more paperwork and complex regulations. The budget 
contains some new competitive grant programs for State projects 
that develop performance measures for environment and health 
effects.
    Governor Leavitt and members of your staff were in Oklahoma 
just last week looking at our clean water revolving loan 
program, which is far ahead of most States in establishing 
performance measurements. I am pleased to see the EPA 
encouraging better accountability in environmental programs at 
every level of government.
    Speaking of accountability, this committee had a grant 
hearing just last week. We were just shocked to find out a lot 
of things, a lack of oversight, a lack of follow-through. Each 
year, the EPA awards half of its budget to grants programs. 
Grants programs, most of that, of course, goes to cities and 
States and municipalities. Having been a mayor myself, and your 
having been a Governor, you realize how important it is. 
Unfunded mandates are bad. We need to get these programs 
working, and by and large, they work very well.
    However, we found out that in the discretionary grants in 
the last several years, they have been doing this without 
competition, without oversight, without any measurable 
environmental outcomes. One example of the lack of oversight 
includes the Consumer Federation of America, a group that 
lobbies the EPA, a lobbying group. We are talking about a 
501(c)(4). It received $5 million in grants over the last 5 
years. I think this is something that we are not going to just 
talk about and not do anything about. We are going to correct 
these situations.
    An additional area I find troubling is in the President's 
SmartWay transportation partnership program. I am supportive of 
voluntary programs to achieve emission reduction goals, but 
that raises the question of when does a voluntary program cross 
the line and become a coercive program. This has been of great 
concern to me.
    Finally, I would like to say something on the MTBE 
liability relief in the energy bill. It is no wonder that the 
trial lawyers have been desperately trying to kill the bill. We 
are talking about now the energy bill, the House bill which has 
some MTBE liability relief or reforms. Just last month, Richard 
Blumenthal, the Attorney General of the State of Connecticut, 
advertised a sweetheart deal for trial lawyers. He is taking 
bids for law firms to sue MTBE producers on behalf of the State 
on a contingent fee basis. It is no wonder that the trial 
lawyers have been out in force trying to defeat the energy 
bill. So Governor Leavitt, we appreciate again your being here, 
and I now turn to Senator Jeffords.

OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Senator Jeffords. Thank you. It is a pleasure to be with 
you again.
    We have known each other for a long time. I have great 
respect for your abilities and believe that working together we 
can make some great strides. I know we can.
    When I chaired the committee 2 years ago, the President 
proposed a 3 percent cut in spending at EPA. Last year, the 
President proposed a 6 percent cut. And this year, the 
President is proposing a 7.2 percent cut from enacted levels. 
This is a most disturbing trend and one that I am committed to 
working against.
    This year even the chairman of the Budget Committee could 
not abide by the President's proposed EPA budget cuts. Today, 
the Senate is voting on a Republican budget that would 
increase, not decrease spending for EPA over last year's 
levels. Of course, it remains to be seen whether the 
appropriators will feel as generous.
    This budget is essentially flat and lifeless. It fails to 
recognize the tremendous public health and environmental 
challenges that we face now and that we will leave for our 
children. It is true that we have made great strides in 
reducing emissions of harmful pollutants, but we have a long 
way to go to protect the public's health and to clean up the 
environment.
    According to EPA, more than 20,000 people are dying 
prematurely from fine particulate matter coming out of 
powerplant stacks. That is happening right now, not 20 years 
from now; 4.5 million pounds of toxic air pollutants that cause 
birth defects, cancer, mutations and developmental effects are 
being spewed into the air every year. Acid rain continues to 
devastate ecosystems in the Northeast and now in the Southeast. 
Respected scientific bodies say that global warming is 
occurring, at least in part because of manmade emissions. Next 
year, according to the President's budget, approximately 175 
million people will live in areas with unhealthy air. This is 
simply unacceptable in an advanced country like ours.
    In the clean water area, the Administration's budget 
completely fails to recognize the staggering water resources 
needs of this Nation. A recent poll by Republican pollster 
Frank Luntz that I am holding in my hand, or was going to hold 
in my hand, shows that 91 percent of Americans are concerned 
that our waterways will not be clean for our children and 
grandchildren. Time after time, Americans express their outrage 
at the weakening of clean and safe water protections, and 
express their willingness to pay to maintain water quality 
standards.
    In the 2005 budget, the Administration is proposing to cut 
nearly in half the funds available for clean water 
infrastructure investments, from $1.35 billion to $850 million. 
This is truly astonishing. In the last 5 years, an extremely 
broad consensus has emerged that more money is needed for water 
infrastructure. I will not accept promises of funding in out-
years. The District of Columbia cannot get lead-free pipes 
today without this assumption.
    Soon I hope to get you to visit Vermont and see the body of 
water that holds a special place in my heart, Lake Champlain. I 
understand that the proposed budget increases funding for the 
Great Lakes, which I applaud, and was authorized by this 
committee. However, the same bill restoring Great Lakes that 
the President signed into law 2 years ago also provided an 
increase in funding to protect Lake Champlain. The trouble is, 
the EPA's budget for Lake Champlain has not changed. It is as 
if the Lake Champlain part of the bill is only in the twilight 
zone.
    I am also concerned about one in four people, including 10 
million children, who live within four miles of a toxic waste 
dump. The Federal Government's cleanup of abandoned Superfund 
sites has fallen over 50 percent in the last 3 years. This 
means that sites like Elizabeth Mine in Stratford, Vermont and 
the recently listed Pike Hill Copper Mine in Corinth, Vermont 
languish without cleanup funding this year.
    While acid mine drainage continues to contaminate the 
Connecticut River, I am deeply disappointed that the President 
has again refused to seek reauthorization of the polluter pays 
fees to fully fund that program.
    I have many other concerns with the direction of the 
environmental policy in this country, ranging from cuts in the 
funding of science research and non-point source solution 
cleanup, to backsliding on new source review and environmental 
justice. The Bush Administration has had more than 3 years to 
work with Congress to get multi-pollutant legislation finished.
    Not once, despite my and other repeated entreaties, has the 
Administration tried to work on a tripartisan compromise that 
would pass. Not once. I am worried that time is not on our 
side. We owe it to our grandchildren that the air they breathe 
is clean, the water they drink is pure, and the food they eat 
is healthy.
    Again, thank you for being here today, Mr. Administrator. I 
look forward to hearing your testimony.
    [The prepared statement of Senator Jeffords follows:]

  Statement of Hon. James J. Jeffords, U.S. Senator from the State of 
                                Vermont

    Administrator Leavitt, it is a pleasure to welcome you here today. 
We have known each other for many years, and I have great respect for 
your abilities and believe that working together we can make great 
strides in environmental protection.
    When I chaired this committee 2 years ago the President proposed a 
3 percent cut in spending at the EPA. Last year, the President proposed 
a 6 percent cut, and this year the President is proposing a 7.2 percent 
cut from enacted levels. This is a most disturbing trend, and one that 
I am committed to working against.
    This year, even the chairman of the Budget Committee could not 
abide by the President's proposed EPA budget cuts. Today the Senate is 
voting on a Republican budget that would increase not decrease spending 
at the EPA over last year's levels. Though, of course, it remains to be 
seen whether the appropriators will feel as generous.
    This budget is essentially flat and lifeless. It fails to recognize 
the tremendous public health and environmental challenges that we face 
now, and that we will leave for our children.
    It is true that we have made great strides in reducing emissions of 
harmful pollutants. But, we have a long way to go to protect the 
public's health and cleanup the environment. According to the EPA, more 
than 20,000 people are dying prematurely from fine particulate matter 
coming out of power plant stacks. That's happening right now, not 20 
years from now.
    Four-and-one-half million pounds of toxic air pollutants that cause 
birth defects, cancer, mutation and developmental effects are being 
spewed into the air every year. Acid rain continues to devastate 
ecosystems in the Northeast and now the Southeast. Respected scientific 
bodies say that global warming is occurring, at least in part because 
of manmade emissions.
    And next year, according to the President's budget, approximately 
175 million people will live in areas with unhealthy air. This is 
simply unacceptable in an advanced country like ours.
    In the clean water arena, the Administration's Budget completely 
fails to recognize the staggering water resource needs of this Nation. 
The recent poll by Republican pollster Frank Luntz that I am holding in 
my hand shows that 91 percent of Americans are concerned that our 
waterways will not be clean for our children and grandchildren. Time 
after time Americans express their outrage at the weakening of clean 
and safe water protections and express their willingness to pay to 
maintain water quality standards.
    In the 2005 budget, the Administration is proposing to cut nearly 
IN HALF the funds available for clean water infrastructure investments 
from $1.35 billion to $850 million. This is truly astonishing. In the 
last 5 years, an extremely broad consensus has emerged that more money 
is needed for water infrastructure. I will not accept promises of 
funding in out years. The District of Columbia can't get lead-free 
pipes today with out year assumptions.
    Soon I hope to get you to visit Vermont and see a body of water 
that holds a special place in my heart--Lake Champlain. I understand 
that the proposed budget increases funding for the Great Lakes, which I 
applaud and was authorized by this committee. However, the same bill 
restoring the Great Lakes that the President signed into law 2 years 
ago also provided an increase in funding to protect Lake Champlain. The 
trouble is, the EPA's budget for Lake Champlain hasn't changed. It is 
as if the Lake Champlain part of the bill is law only in the Twilight 
Zone.
    I am also concerned about the one in four people, including 10 
million children, who live within four miles of a toxic waste dump. The 
Federal Government's cleanup of abandoned Superfund sites has fallen 
over 50 percent in the last 3 years. This means that sites like the 
Elizabeth Mine in Strafford, Vermont, and the recently listed Pike Hill 
Copper Mine in Corinth, Vermont languish without cleanup funding year 
after year.
    While acid mine drainage continues to contaminate the Connecticut 
River, I am deeply disappointed that the President has again refused to 
seek reauthorization of the polluter pays fees to fully fund the 
program.
    I have many other concerns with the direction of environmental 
policy in this country ranging from cuts in the funding of science 
research and non-point source pollution cleanup to backsliding on New 
Source Review and environmental justice.
    The Bush Administration has had more than 3 years to work with 
Congress to get multi-pollutant legislation finished.
    Not once, despite my and others repeated entreaties, has the 
Administration tried to work out a tri-partisan compromise that could 
pass. Not once.
    I am worried that time is not on our side. We owe it to our 
grandchildren that the air they breathe is clean, the water they drink 
is pure, and the food they eat is healthy. Again thank you for being 
here today Administrator Leavitt. I look forward to hearing your 
testimony.
    [The referenced document follows:]

    
    
    Senator Inhofe. Thank you, Senator Jeffords.
    I would comment that every year since the passage of the 
Clean Air Act in 1977, we have fewer pollutants than the year 
before.
    We now have ten Senators here, so I am going to interrupt 
this hearing.
    [Recess to consider committee business.]
    Senator Inhofe. [resuming the hearing] Now, we are going to 
follow the early bird rule and recognize, and for other members 
we are going to try to confine our remarks to 5 minutes, if at 
all possible, and we also are going to be out of this meeting 
at the very latest at 11:25, I think it will probably earlier 
than that.
    Senator Thomas?
    Senator Thomas. Thank you, Mr. Chairman.
    Senator Baucus. Mr. Chairman, could you read the early bird 
list please?
    Senator Inhofe. I would be glad to. It will be Thomas, 
Wyden, Voinovich, Baucus, Bond and Chafee.
    Senator Baucus. Thank you.
    Senator Inhofe. Do you want to be moved up?
    Senator Baucus. No.
    Senator Inhofe. OK.
    Senator Thomas?

 OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM THE 
                        STATE OF WYOMING

    Senator Thomas. Thank you. I am pleased to be the early 
bird here today. That is good.
    Welcome, Governor Leavitt. Just very briefly, but some of 
my concerns are more broad than they are specific and on the 
budget, but we are concerned about the process for permitting 
in energy, for example; having one agency finish something and 
then have EPA come in later and have to start all over again. I 
think that can be changed.
    The clean air activity certainly has a lot to do with 
energy and the use of coal and these kinds of things, which are 
very important to us. Specifically, I am interested in the 319 
program in the difference in States. For instance, in Wyoming 
the monitoring we are doing, but we need the flexibility in 
319, and there is some reduction in there. So I hope we can 
talk about some of those things.
    I also, just in closing, want to say that I do not agree 
with all of my friends here. Some of this is efficiency, not 
necessarily because we reduce the budget a little are we going 
to get less done. There are better ways to do things, and I 
respect the idea that we can hold down budgets and continue to 
do something by being able to operate more efficiently. I hope 
that that is partly what you intend to do.
    So, thank you.
    [The prepared statement of Senator Thomas follows:]

 Statement of Hon. Craig Thomas, U.S. Senator from the State of Wyoming

    I am concerned about the decrease in 319 program funding. I see 
that there is an increase to States for monitoring programs of $20 
million yet a decrease in 319 funding by $29 million. This is a 
concern. The primary source of funding for addressing impaired/
threatened (section 303(d) listed waters) is the 319 program.
    A percentage of 319 funds can be used for monitoring--the remainder 
for planning and implementation. Given that in Wyoming, not only does 
the State have a monitoring network, the local Districts are the 
primary entities addressing impaired/threatened waters. These funds are 
integral to these efforts.
    To decrease the funding for implementation to address the impaired 
waters and for which a portion can be used for monitoring activities 
and target an additional $20 million to State monitoring--does not make 
sense.
    Different States, as is the case with different local Districts, 
are in different phases. I agree that increased and better scientific 
data is an issue, certainly it was in Wyoming. However, there is more 
flexibility in the 319 program to allow States/local governments to 
focus on their priorities. Once the data is collected and a waterbody 
has been determined to be ``impaired'' then the focus should be on 
addressing the impairment and conducting followup monitoring to 
determine if improvements are being made. Decreasing the 319 funds will 
stifle this approach.
    Could you comment on this?
    Senator Inhofe. Thank you, Senator Thomas.
    Senator Wyden?

  OPENING STATEMENT OF HON. RON WYDEN, U.S. SENATOR FROM THE 
                        STATE OF OREGON

    Senator Wyden. Thank you, Mr. Chairman.
    I voted for Mr. Leavitt's appointment. I want to say that I 
am really disappointed up to this point. It seems to me that 
the Administration is writing a new text book on how to promote 
foot-dragging on the most important environmental issues. Let 
me outline my biggest concerns.
    I am very troubled by the fact that the Freedom of 
Information Act is now being used to deny Congress and the 
country access to information about these critical 
environmental questions. I am very concerned about how science 
is being politicized. Certainly, you see that in the OMB 
proposals to change how science is being reviewed.
    Finally, it seems to me what is going on with the budget is 
that essentially it is being used to hide the extent of the 
problems to such a degree that even State environmental 
officials from some of the most conservative parts of the 
country are saying in the area, for example, of the Superfund 
program, that Congress will not fund these critical kinds of 
programs because we do not even know the extent of the problem. 
That is what the Colorado assistant attorney general told the 
New York Times just a few days ago.
    So I hope we can get some answers to it. The foot-dragging 
with respect to access to information, Mr. Leavitt, I told you 
months and months ago about the concern my constituents have at 
home in Portland. Absolutely nothing has been done. So I want 
to say today, I am going to put a hold on your upcoming 
appointees until the agency is responsive on that question.
    I have bent over backwards to try to be helpful. I 
supported your appointment because I was excited about the kind 
of work that you did with our former Governor. It was 
bipartisan and innovative. I have seen none of that during your 
early service at EPA. Sometimes, you wonder around here whether 
you ought to be able to take a vote back, because I am very 
disappointed in what we have seen to date.
    Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Wyden.
    After Senator Voinovich, we will have Baucus, Bond, Boxer, 
Chafee, Carper and Graham.
    Senator Voinovich?

  OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR 
                     FROM THE STATE OF OHIO

    Senator Voinovich. Thank you, Mr. Chairman. Thank you for 
calling this hearing on the budget of the Environmental 
Protection Agency. I am pleased that you are holding this 
hearing, and I take our oversight responsibilities very 
seriously.
    I want to thank Administrator Leavitt for being here today 
to discuss the President's proposed budget. As a former 
Governor and mayor, I respect and know first-hand the enormous 
challenges that you have to address when working out a budget 
proposal. Putting together a budget is a process that requires 
responsible prioritizing and fiscal discipline in order to 
avoid breaking the bank, and to respond to the orders that you 
get from OMB.
    Unfortunately, as is often the case around here, 
responsibility often gives way to rhetoric, and the knee-jerk 
response to offer pie-in-the-sky budget numbers that are not 
feasible in light of the war, the need for continuing 
stimulation of the economy, the growing deficit and other 
priorities.
    Administrator Leavitt, in the face of all these budget 
difficulties, there is some good news in your budget. 
Revitalizing our urban areas has been an issue that I have been 
passionate about for many years. As a former mayor, I have 
experienced first-hand the difficulties that cities face in 
redeveloping sites for re-use. I have worked hard with my 
colleagues on this committee to pass brownfields legislation on 
a bipartisan basis, and I am pleased that the EPA is committing 
more funding in their budget to address the cleanup of 
brownfields.
    I am also pleased that the agency budget builds on the 
Cleveland air toxics pilot project and proposed to expand the 
program. As a former mayor, I strongly believe that we need to 
work more closely with our communities and approach the 
environment more holistically. In that regard, I support the 
agency's proposal to provide another $65 million to retrofit 
and replace school buses across this nation to reduce 
particulate matter emissions and help communities achieve new 
ambient air quality standards.
    In the last Congress, I worked with my colleagues to pass 
the Great Lakes Legacy Act to clean up contaminated sediments. 
I am pleased the President has provided nearly five times more 
money in this budget for this program. I plan to work very hard 
to keep that money in the budget.
    However, there are a few issues in the budget that I would 
like to address. The lack of funding for water and wastewater 
infrastructure is one of these issues. I know we have talked 
about this informally, but the fact of the matter is that that 
budget has been inadequate since I have come to the U.S. 
Senate. Every year, there is never enough money in their. We 
need more money in the clean water State revolving loan fund. I 
have introduced legislation every year to increase that to $15 
billion over 5 years, and to give the States more flexibility. 
It just seems like it just goes over everyone's head over 
there.
    As this committee knows, billions of dollars have already 
been spent and billions more are needed to upgrade the Nation's 
aging wastewater infrastructure. Again, the city of Akron, Ohio 
is going to have to spend $377 million in order to take care of 
the mandates that are coming out of the Environmental 
Protection Agency. The State of Ohio has agreed to give them 30 
years, and your agency says you only can have 15 years.
    Now, if you are not going to be able to provide the money 
to the communities that are a result of mandates coming out of 
the Environmental Protection Agency, it seems to me that some 
consideration ought to be made to cities like Akron and others 
throughout this country that just do not have the capacity 
right now to get the job done. When you cannot offer them the 
money that you should be providing to them, something has to 
give here. Some kind of consideration should be given to these 
communities.
    In addition, the whole issue of science, I agree with the 
chairman of the committee. It was $100 million less for science 
in the budget. The GAO said that the agency needs better 
science. It seems to me the least that can be done is to 
maintain that $100 million for that. As you know, Senator 
Carper and I have talked about getting legislation in that will 
require the agency to have a person that is going to deal with 
science as recommended by that report.
    Last but not least, Senator Inhofe and I sent you a letter 
yesterday on the agency supplemental to the proposed utility 
mercury reductions rule. I ask that that letter be inserted in 
the record.
    Senator Inhofe. Without objection.
    [The prepared statement of Senator Voinovich and the 
referenced document follows:]

 Statement of Hon. George V. Voinovich, U.S. Senator from the State of 
                                  Ohio

    Mr. Chairman, thank you for calling this hearing on the budget of 
the Environmental Protection Agency. I am pleased that you are holding 
this hearing, as I take our oversight responsibilities very seriously.
    In addition, I would like to thank Administrator Leavitt for being 
here today to discuss the President's proposed budget for the EPA. It 
was not too long ago that we were here at your confirmation hearing and 
you were sitting in that very seat. I am glad that you are back today, 
and I look forward to spending some time with you to discuss your 
presentation, understanding that you have not been in the saddle a long 
time.
    As a former Governor and Mayor, I respect and know firsthand the 
enormous challenges that you have to address when working out a budget 
proposal. Putting together a budget is a process that requires 
responsible prioritizing and fiscal discipline in order to avoid 
breaking the bank and to respond to the orders you get from OMB. 
Unfortunately, as is often the case around here, responsibility often 
gives way to rhetoric and the knee-jerk response to offer pie-in-the-
sky budget numbers that are not feasible in light of the war, the need 
for continuing stimulation of the economy, and other priorities.
    In 2003, this past fiscal year, we suffered a budget deficit of 
$375 billion. In other words, we spent the entire $161 billion Social 
Security surplus and then had to go out into the private markets and 
borrow an additional $375 billion.
    And according to CBO's numbers, even though we kept discretionary 
spending down in FY2004 and the President's FY2005 budget keeps 
discretionary spending to an increase of 4 percent, we will still 
suffer budget deficits of $477 billion in FY2004 and $363 billion in 
FY2005.
    The 4 percent increase in spending is a good start down a fiscally 
responsible path. I am pleased that President Bush forced some hard 
decisions to be made but still developed a budget for EPA that will 
allow the Agency to continue to focus on cleaning up and protecting our 
environment.
    Administrator Leavitt, in the face of all of these budget 
difficulties, there is some good news in your budget.
    Revitalizing our urban areas has been an issue that I have been 
passionate about for many years. As a former Mayor, I have experienced 
firsthand the difficulties that cities face in redeveloping these sites 
for reuse. I worked hard with my colleagues on this committee to pass 
brownfields legislation on a bipartisan basis, and I am pleased that 
EPA is committing more funding in their budget to address the cleanup 
of brownfields. These actions put abandoned sites back into productive 
use, creating jobs and healthier downtowns while addressing urban 
sprawl and preserving farmland and green spaces.
    I am also pleased that the Agency's budget builds on the Cleveland 
Air Toxics Pilot Project and proposes to expand the program. As a 
former Mayor, I strongly believe that we need to work more closely with 
our communities and approach the environment more holistically. In that 
regard, I also support the Agency's proposal to provide $65 million to 
retrofit and replace school buses across the Nation to reduce 
particulate matter emissions and help communities achieve new ambient 
air quality standards.
    Last Congress, I worked with my colleagues in this committee to 
pass the Great Lakes Legacy Act to clean up contaminated sediments. I 
am pleased that the President has provided nearly five times more than 
previous levels ($45 million) for this Program. I plan to work hard to 
keep this funding through the appropriations process, especially since 
it was decreased from the $15 million in the 2004 budget request to $10 
million.
    However, there are a few issues in this budget proposal that I 
would like to address today.
    The lack of funding for water and wastewater infrastructure is one 
of those issues. I have participated in several of these hearings on 
the EPA's budget since 1999, and I feel like a broken record. This year 
is no exception--the EPA's budget is woefully inadequate to take care 
of the nation's pressing water and wastewater infrastructure needs. 
What we have is a ticking time bomb, ready to blow up if we continue to 
ignore these nationwide needs.
    As a member of this committee, I have worked hard to bring 
attention to the nation's wastewater infrastructure needs. That is why 
I have introduced legislation (S. 170) that would reauthorize Clean 
Water State Revolving Loan Fund (SRF) program, providing a total of $15 
billion over 5 years and improving State flexibility. Investment in 
water and wastewater infrastructure is one way to show we care about 
the people who are not working and respond to the challenges of our 
nation's infrastructure issues. The Water Infrastructure Network 
estimates that $1 billion in water and sewer infrastructure creates 
over 40,000 jobs.
    As we on this committee know, billions of dollars have already been 
spent and billions more are needed to upgrade the nation's aging 
wastewater infrastructure. I firmly believe the Federal Government is 
responsible for paying its fair share. The city of Akron, for example, 
has proposed to spend $377 million over 30 years to fix the City's 
combined sewer overflow problems. Yet, City and State officials are 
concerned that the Federal Government is pressuring them to do the work 
in half the time and suggesting enforcement action.
    In addition, EPA's 2005 budget proposes spending cuts for this 
important program. What I would like to know from you, Administrator 
Leavitt, is how you expect cities like Akron to spend millions of 
dollars for water infrastructure upgrades when the Administration plans 
to cut funding for the Clean Water SRF program. I would like to know 
what kind of assistance EPA can give local communities--in the absence 
of sufficient Federal funding--who are trying to improve water quality 
by investing in infrastructure upgrades.
    Clean water has been a priority of mine ever since I was elected to 
the Ohio General Assembly in 1967 and made a commitment to stop the 
deterioration of Lake Erie and to wage what I call the ``Second Battle 
of Lake Erie.'' I have continued that fight throughout my career. Last 
year, I held 2 hearings on a GAO report, which stated that restoration 
of the Great Lakes is being hindered because there is little 
coordination and no unified strategy for the region's environmental 
activities. I hope to hear from you today on what the Agency is doing 
to help restore the Great Lakes.
    To strengthen science at the EPA, Senator Carper and I introduced 
legislation in the last Congress to create a Deputy Science 
Administrator at the Agency and we will be reintroducing this bill in 
the coming weeks. This legislation was based on a 2000 National 
Research Council study (entitled Strengthening Science and the U.S. 
EPA). That report included several recommendations on how to improve 
the research, management, and peer review practices at the Agency. 
While I commend the Administration for the great strides they have made 
to improve the science that EPA relies on to make decisions, I believe 
our legislation will build on these improvements.
    Lastly, Chairman Inhofe and I sent a letter to you yesterday on the 
Agency's supplemental to the proposed Utility Mercury Reductions Rule. 
I ask that it be inserted into the record. I am greatly concerned about 
this proposal as it will disproportionately impact bituminous coal, the 
Midwest, and my State of Ohio. I hope to work with you in the upcoming 
weeks to make sure that the mercury rule does not disproportionately 
affect one region of the country over another and further exacerbate 
the natural gas crisis our nation is facing. This crisis would not be 
occurring if this country's environmental policies had been harmonized 
with our energy needs and paid more attention to the impact on the U.S. 
economy and the needs of millions of Americans to have affordable 
heating in their homes.
    Again, I would like to thank you for your attendance today, and I 
look forward to hearing your thoughts on these issues. Thank you, Mr. 
Chairman.
                                 ______
                                 
                                      United States Senate,
                                                     March 9, 2004.

The Honorable Michael O. Leavitt, Administrator,
Environmental Protection Agency,
Ariel Rios Building,
1200 Pennsylvania Avenue, NW,
Washington, DC 20460.

Dear Administrator Leavitt: We are writing to express our concern with 
the Environmental Protection Agency's February 24, 2004 supplemental to 
the proposed Utility Mercury Reductions rule.
    As you know, the Agency proposed on December 15, 2003 to allocate 
mercury allowances based on a unit's baseline heat input and the 
adjustment factors in the President's Clear Skies Act (1 for 
bituminous, 1.25 for subbituminous, and 3 for lignite coals). As the 
sponsors of this legislation in the Senate, we know that these factors 
represent a carefully crafted compromise designed to distribute mercury 
allowances equitably throughout the Nation. Although this is a 
contentious regional issue, Members of Congress and the industry have 
generally accepted the factors in the proposed legislation.
    Unfortunately, the supplemental to this proposed rule offers 
another option that undermines the consensus that has been so 
painstakingly built. The supplemental seeks comment on using the 
maximum achievable control technology (MACT) emission rate (2 pounds of 
mercury per trillion British thermal unit for bituminous, 5.8 for 
subbituminous, and 9.2 for lignite coals) in the proposed rule to 
allocate allowances. While the coal and utility industries have united 
around the President's Clear Skies initiative, EPA's alternative 
mercury proposal has begun to disrupt that unity. Moreover, there 
appears to be little rationale for the new option because these 
alternative allocation rates were designed specifically to 
statistically account for MACT's source-by-source requirement, which is 
inapplicable to a cap and trade approach.
    While its impact on passing multi-emissions legislation is 
important, the most troubling aspect of the proposed supplemental is 
its projected effect on the Midwest. The alternative mercury allowance 
allocation could significantly and disproportionately increase the cost 
of compliance for bituminous coal users, and we are concerned that this 
may ultimately lead to an increased reliance on natural gas, both 
eliminating coal-related jobs and further stressing the supply demand 
ratio of natural gas.
    Our country is in the midst of a natural gas crisis that is 
destroying the backbone of our economy--manufacturing. We simply cannot 
afford to encourage increased reliance on natural gas for electricity 
generation. The proposed rule must be crafted in a way that does not 
exacerbate the natural gas problem.
    We applaud the President's efforts in bolstering coal as a low cost 
source of energy for the Nation. His commitment to clean coal 
technologies and rejection of command and control mandates has kept 
coal as an important fuel source. We urge you to carefully consider the 
Agency's proposals to reduce mercury emissions from power plants and 
ask that you seek an equitable allocation system that does not 
disproportionately affect one region of the country over another. We 
look forward to working with you as this proposed rule moves forward to 
ensure the President's and our own goal of a continued robust coal 
industry.
    If you or your staff have any questions, please contact John 
Shanahan at (202) 224-8072 and Brian Mormino at (202) 224-8098.
            Sincerely,
                             George V. Voinovich, Chairman,
     Subcommittee on Clean Air, Climate Change, and Nuclear Safety.

                                 James M. Inhofe, Chairman,
                         Committee on Environment and Public Works.
    Senator Voinovich. I am greatly concerned about this 
proposal, as it will disproportionately impact bituminous coal, 
the Midwest and my State. I hope to work with you in the 
upcoming weeks to make sure that the mercury rule does not 
disproportionately affect one region of the country over 
another, and further exacerbate the natural gas crisis our 
Nation is facing. It is horrible right now. This crisis, and I 
am sharing this with the members of this committee, would not 
have occurred in this country if the environmental policies of 
this Nation had been harmonized with the economic needs that we 
have.
    It is having a terrible effect on the U.S. economy and the 
needs of millions of Americans to have affordable heating in 
their homes. We do not want just another thing happening that 
is just going to make the situation worse than it is today.
    So I look forward to your testimony.
    Senator Inhofe. Thank you, Senator Voinovich.
    Senator Baucus?

  OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE 
                        STATE OF MONTANA

    Senator Baucus. I thank the chairman.
    First, Mr. Chairman, I want to congratulate you for giving 
us these very explicit seating charts, giving not only those in 
the front row, but those in the second row and the names of 
those in the third row. I now better understand the power that 
one of my law professors had when he was calling on people out 
in the audience, a practice I will refrain from, although I am 
sorely tempted to do so, because there is one person out in the 
audience who testified as to a subject I am going to talk 
about. I think that testimony would be very interesting.
    Senator Inhofe. If you are giving credit, give it to Duane.
    Senator Baucus. Duane, good job.
    Mr. Chairman, I have a few points. First, Mr. 
Administrator, I want to thank you very much for coming to 
Montana. You have not come yet, but you have agreed to come to 
Montana and I think we are working out the date this spring. It 
is extremely important that you do so for a lot of reasons, but 
one, so that you visit Libby, Montana.
    I have talked to you about Libby many times. This committee 
has heard me talk about Libby many times. I know that you will 
visit Libby and when you do, you are going to come away with 
the same impression that something has to be done, as your 
predecessor Christie Todd Whitman came away with when she left 
Libby.
    Why is that impression so strong? Very clearly because 
there are dead people on account of asbestos at Libby. There 
are dying people. There are people who have mesothelioma; 
people who have all kinds of asbestos-related diseases caused 
by W.R. Grace, and W.R. Grace's predecessor. They knew that 
they were poisoning the people. They did nothing about it. As a 
consequence, people are not only dying, but to add insult to 
injury, the company transferred about 80 percent to 90 percent 
of its assets so they cannot be reached by those who are ill. 
The company is in bankruptcy. It is an outrage. It is an 
absolute outrage.
    In the meantime, there is something EPA can do, and that is 
cleanup the mess. Marianne Horinko, who was here 2 years ago, 
when I asked her when Libby could be cleaned up, she said it 
would be cleaned up in 2 years. That is this year, 2004. Only 
10 percent has been cleaned up; only 10 percent. Many sites 
there have not even been touched for all intents and purposes. 
The W.R. Grace site, for one; the town of Troy for another.
    I am telling you, Mr. Administrator, that I personally, and 
for the sake of the people in Libby, Montana, ask you to make 
this your priority, certainly in region eight, and provide the 
resources. The resources are slipping. They are not what they 
were promised to be. You have to remedy this. If you do 
anything, it will make you feel good when you finally leave as 
Administrator to know that you have done something, at least 
for the people of Libby, Montana.
    The second point is Superfund itself. I for the life of me 
cannot understand why this Administration does not want to 
extend Superfund, that is, the fees for Superfund. Companies 
are going bankrupt. Where there is no principal party found, 
sites are being left not cleaned up. I would think that this 
Administration's legacy would be more cleanups, not fewer, and 
have a strong environmental record, not a bad one. I ask you 
to, within the confines of the Administration, to advocate for 
much stronger environmental protection, a stronger Superfund 
program than I think you have. I do not know whether you have 
or have not because, of course, I am not privy to those 
conversations.
    When you appeared before this committee, I asked you why 
you wanted the job. I asked you why you wanted the job very 
simply because I feel that you are not going to be calling the 
shots. They are not going to be your decisions. They are going 
to be decisions made by OMB; decisions made at the political 
level in the White House; decisions made by other people. And 
you just have to do what they tell you what to do.
    I think that is probably still the case. I think that is 
the case. OMB is not here. The White House is not here. You 
are. So I am asking you to go back and to argue more 
strenuously, more persuasively, more strongly why this country 
should not neglect the environment, as this Administration is, 
and why it should go back and do something about Libby, 
Montana, devote more resources to Libby, clean it up, turn 
around that record of only 10 percent cleanup, and you will 
have done a great service if you can persuade those above you 
to do the things that need to be done.
    It is your responsibility. You hired out for this job. You 
are just going to have to do that.
    [The prepared statement of Senator Baucus follows:]
  Statement of Hon. Max Baucus, U.S. Senator from the State of Montana
    Thank you Mr. Chairman and Senator Jeffords for calling this 
hearing today to discuss the Environmental Protection Agency's Budget 
for Fiscal Year 2005.
    First, I'd like to thank Administrator Leavitt for appearing here 
today to answer our questions about his agency's priorities for the 
next fiscal year. I would also like to thank Administrator Leavitt 
personally for the good faith of his staff who worked closely with my 
office to schedule his visit to Montana. I believe we're looking at 
setting a date in late spring, and I'm very pleased we're close to 
finalizing his important visit.
    Sometimes I think people get tired of hearing me talk about Libby, 
Montana. But you just can't appreciate the size and scope of that 
tragedy unless you see it for yourself, and talk to the local people 
who are directly affected. I believe that after your visit, you will 
leave with the same personal commitment to the town of Libby that your 
predecessor, Christie Todd Whitman, did.
    A visit to Libby will also help you put in context my continuing 
concern about making sure EPA has enough resources to finish the job in 
Libby. I understand that allocating resources among all of the 
competing demands at EPA is an enormous challenge. But, Libby, Montana 
should remain one of EPA's top priorities.
    Why? Because people are dead and dying in Libby, Montana from 
decades of exposure to asbestos. I know that I've said it over and over 
and over again. But it always bears repeating. We cannot forget the 
human scale of the Libby tragedy, and that's what must drive the EPA's 
commitment to finish the fine response and clean-up work that it 
started back in 1999. The people in Libby are working hard to 
revitalize their economy and their community, and are rightly proud of 
their resilience and their ability to land on their feet.
    They deserve all the help we can give them to make their town whole 
again. I have fought for years to make sure Libby has the resources it 
needs.
    But, even though we are more than 3 years into EPA's clean-up of 
Libby, only 10 percent of the total amount of clean-up work has been 
completed.
    Two years ago, Marianne Horinko testified before this committee and 
promised me EPA would clean-up the town of Libby in 2 years, in 2004. 
Now, EPA tells me it will be closer to 5 years, maybe by 2008 or later.
    Region VIII has requested $20 million per year to clean-up Libby, 
starting in Fiscal Year 2003. They received approximately $17 million 
of that in Fiscal Years 2003. Because they ran out of money at the end 
of 2003, they were forced to take a $2 million ``advance'' on their 
Fiscal Year 2004 allocation. This will leave Region VII with only $15 
million for the remainder of fiscal year 2004. While I understand that 
this is not technically a budget cut, the reduced allocation will 
clearly affect the pace of clean-up in Libby. How soon will the EPA run 
out of money in 2004? Will they get another advance, and how will that 
impact clean-up in 2005? 2006? I understand that no money has been 
allocated to clean-up the W.R. Grace mine site, or the near-by town of 
Troy, which also has asbestos contamination.
    A clean-up as important as Libby, that is as well-managed as I'm 
told it is, deserves the full support of EPA headquarters, in order to 
keep the clean-up on track and to protect the lives and health of the 
citizens of Libby. This clean-up does not deserve to be nickel and 
dimed to death. If you fund the clean-up at the level it requires, the 
sooner it will be done, the sooner the people of Libby can return to 
normal lives, and the sooner the EPA will be able to hold Libby up as a 
Superfund success story and move on to clean-up other sites around the 
country.
    Superfund is a powerful force for environmental and public health 
protection. It provides the enormous leverage and financial resources 
of the Federal Government to help clean-up sites that States and 
localities could never handle on their own. It also provides a strong 
deterrent against the creation of future messes. But, starving the 
program of resources only hurts its effectiveness. And, it certainly 
doesn't alter risks to public health and the environment from sites 
that have not been identified or cleaned-up.
    I wholeheartedly agree that the first resort under a program like 
Superfund is to ensure that those responsible for contamination at a 
particular site pay to clean it up. This is the basis of the polluter-
pays philosophy that underpins the entire Superfund program. However, 
we're seeing more and more bankruptcies, and more and more large and 
complex sites where no responsible party can be found.
    Without a dedicated trust fund for the Superfund program, clean-up 
of toxic sites around the country where there is no ``polluter'' to pay 
has to depend in large part on the good-will of Congress and the 
generosity of the American taxpayer. In these tight budget years, that 
means funding has fallen or remained flat.
    This stretches dollars more thinly over a growing backlog of work. 
We're not making this up--both the General Accounting Office and the 
EPA's own Inspector General have recently documented the budgetary 
problems within the EPA's Superfund program and the impact this has on 
both the pace and scope of clean-up work.
    Superfund is just too important to let this happen. It's not 
glamorous, it's not exciting, it moves slowly and methodically, but 
that doesn't mean the work performed under the Superfund program is not 
incredibly important to impacted communities and to the health of the 
Nation as a whole. You can't snap your fingers and hope that the legacy 
of sometimes more than a century of pollution will suddenly disappear. 
It takes time, focus, dedication and an enormous amount of resources.
    We owe it to our children and grandchildren to maintain the 
integrity of the Superfund program. I would like to see the 
Administration and the EPA share that point of view. It's time to 
reinstate the Superfund fees in order to replenish the Superfund Trust 
Fund. The resources and leverage provided by this fund are crucial to 
the long-term health and effectiveness of this program. It's crucial to 
the citizens of my State, in Libby, and at other important sites around 
Montana, including Ten Mile, Basin Creek and the Milltown Dam site.
    Superfund can showcase the Federal Government at its best--
protecting the lives, health and welfare of its citizens. I will ask 
that Administrator Leavitt take the lead in this Administration in 
advocating for the renewal of the Superfund fees and the revival of the 
Superfund trust fund. Although the EPA has proposed increasing the 
budget for Superfund slightly in 2005 from what the President requested 
in 2004, it has done so at the expense of other important programs, 
like clean water. I don't think that these unacceptable tradeoff's are 
necessary, if we do the right thing and revive the Superfund trust 
fund.
    Thank you, Mr. Chairman.
    Senator Inhofe. Senator Bond?

  OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, U.S. SENATOR 
                   FROM THE STATE OF MISSOURI

    Senator Bond. Thank you very much, Mr. Chairman.
    I am delighted to hear that you have Tar Creek taken care 
of, and get you off my back for funding it. That will be a 
pleasant switch. And Mr. Administrator, this will be a practice 
session before you come before our VA-HUD Appropriations 
Subcommittee. I will give you the really bad news then and ask 
you the tough questions.
    I want to begin by congratulating you on some of the good 
things that EPA is doing. We have not heard a lot of it, but 
last week we got news that the engine manufacturers are on 
target to meet more stringent 2007 clean diesel regulations. 
Once the program is fully implemented, families will be 
breathing 2.6 million fewer tons of smog-causing nitrogen 
oxide. Communities will have 110,000 tons less soot and 
particulate matter. If we can ever get an energy bill passed 
and start using bio-diesel, we will do an even better job.
    The Bush Administration has also moved on mercury 
emissions, and I congratulate you on doing that. The plan is to 
cut 70 percent of the mercury emissions. Some say that is not 
enough. Well, the law says the maximum achievable control 
technology. It says ``achievable,'' not ``maximum''; never been 
commercially proven; do not know if it will work full-scale 
over time on all types of fuels rule. It has to be reasonable.
    I am glad the Administration is pursuing a cap-and-trade 
strategy. Cap-and-trade was a success in the Bond-Byrd 
amendment on acid rain. I applaud the application of that to 
mercury pollution as well.
    But recent four-pollutant and climate change proposals 
would have some very serious affects on our economy. It will 
continue to raise electricity bills, perhaps by another 50 
percent. Right now, we are seeing, as my colleague from Ohio 
pointed out, the disastrous impact the forced switching from 
coal to natural gas has had on our communities, on our economy. 
People on low and modest incomes are finding their natural gas 
heating bills going out the roof. Family budgets are being 
destroyed.
    More importantly, when we are talking about outsourcing, 
this natural gas, the mandated use of natural gas in electric 
generation and the limitation on the exploration and production 
of natural gas has shortened supply, driven the price up, so 
those mandates are driving jobs offshore. Companies employing 
good workers in the United States, natural gas is a basic part 
of their operation, they are moving those jobs overseas to 
countries where they have not artificially increased demand for 
natural gas and limited its supply.
    We have a real problem with outsourcing, of outsourcing 
jobs that depend upon natural gas. I do not want to see us 
continue to do so without taking into account the impact it 
has.
    We have some problems that have already been mentioned with 
the budget. The Federal Government has imposed national water 
quality requirements and we are about $500 billion short in 
funding the needs. So once again, OMB and the green eyeshade 
guys have cut the clean water State revolving fund by $500 
million. This happens every year. It happens in Democratic 
administrations and Republican administrations. I can assure 
you that my colleague, Senator Mikulski, and I are going to do 
everything we can to restore it.
    As usual, we will look at the priorities that OMB has put 
in to the budget and have to use those to make up for the 
shortfalls in the SRFs, because if there is one thing that we 
ought to be doing, it is achieving the clean water and safe 
drinking water goals that have been outlined.
    I am also disappointed with cuts in the 319 non-point 
source water pollution program. The USDA money, the farmers are 
not the only contributors to non-point source pollution, so we 
have to combat this through the EPA budget. I agree that more 
funds are needed for the Superfund program, but we need to 
apply that money wisely. Many sites ready for cleanup are 
protected and stable. They pose no health threats. We need to 
focus on the higher environmental problems.
    National threats of terrorism include environmental 
threats. I would like to see EPA receive funding out of the 
homeland security function. That is about the only one that is 
going to get any increases. I think EPA should get work with 
FBI and counterterrorism and terrorism response activities. It 
should be funded out of homeland security.
    I will address some parochial issues. One is a little 
county way south of Missouri called St. Genevieve County, being 
included in the St. Louis region. I do not know why anybody 
thinks that the air way south of St. Louis on the Mississippi 
River has anything to do with St. Louis.
    Finally, I would only say that EPA has imposed heavy fines 
on farmers who have had anhydrous ammonia stolen to make 
methamphetamines. They find that there are reporting 
requirements they do not know about and they get hit with 
fines. The farmer gets his anhydrous ammonia stolen, and then 
EPA slaps him with a fine. We have to figure out a better way 
to handle that.
    Thank you, Mr. Chairman.
    [The statement of Senator Bond follows:]

 Statement of Hon. Christopher S. Bond, U.S. Senator from the State of 
                                Missouri

    Thank you, Mr. Chairman, for hosting this hearing to review the 
fiscal year 2005 President's Budget for the Environmental Protection 
Agency. Thank you, Governor Leavitt, for attending.
    EPA is doing great things to improve the environment. Last week, we 
received news that engine manufacturers are on target to meet more 
stringent 2007 clean-diesel regulations. Our friends at the Natural 
Resources Defense Council called this Bush rule ``the most significant 
public health proposal in decades.''
    Once the 2007 program is fully implemented, our families will 
breathe 2.6 million fewer tons of smog-causing nitrogen oxide (NOx) 
emissions each year. Our communities will receive 110,000 tons less 
soot or particulate matter. EPA's actions will save an estimated 8,300 
premature deaths, avoid 5,500 cases of chronic bronchitis and prevent 
17,600 cases of acute bronchitis in children each year.
    The record of EPA improving the environment and public health under 
President Bush does not stop there. President Bush is mandating a cut 
in mercury emissions from electric utilities for the first time ever.
    Not President Clinton, not President Carter, but President Bush is 
the first President ever to require utilities to cut their mercury 
emissions. In 1994, the Clinton Administration was sued for failing to 
control power plant emissions of mercury. The Clinton Administration 
took 6 years to resolve the suit.
    The Bush Administration now fulfills that promise with its plan to 
cut mercury emissions by nearly 70 percent. Some critics argue 70 
percent is not enough. They argue for a so-called Maximum Achievable 
Control Technology rule with deeper cuts. Well the law says maximum 
ACHIEVABLE--not maximum never been commercially proven, don't know it 
will work full scale, over time, on all types of fuels rule.
    The Clean Air Act also says that utilities be regulated under the 
MACT section 112 only if other authorities of the Act, once 
implemented, do not adequately address hazardous emissions. So I am 
glad the administration is wisely pursuing a cap-and-trade strategy 
under section 111. Cap-and-trade was a phenomenal success at cutting 
acid rain pollution. I applaud the President for applying it to cut 
mercury pollution as well.
    In this time of gradual economic recovery, we must pursue 
strategies that both protect the environment and protect the family 
budget. Mercury strategies that force a switch from coal to natural gas 
cause exorbitant natural gas and electricity price increases.
    Recent four-pollutant and climate change proposals would raise 
family electricity bills by nearly 50 percent. Our fixed income seniors 
and economically disadvantaged struggle to put food on the table and 
keep their kids in school clothes. They cannot afford massive heating 
and electric bill increases. I cannot impose such hardships on our 
families.
    At the same time we protect the environment and the family budget, 
we must be mindful of the Federal budget. We on the appropriations 
subcommittee funding EPA will get into the specifics of EPA's budget 
later this month. But the outlook for VA/HUD looks particularly bleak.
    We must remember that EPA competes for dollars within the same 
appropriations subcommittee as NASA, the VA, and HUD. Every new dollar 
spent on the environment is one dollar we cannot spend to provide 
healthcare to our veterans or shelter for our homeless. Every time one 
of our colleagues suggest spending more money for an EPA program, each 
of us should think to ourselves whether that is more important than VA 
medical care or homeless housing assistance grants.
    Make no mistake, I believe there are vital programs at EPA we must 
fund to improve the environment. I have been a long-standing supporter 
of helping local communities provide safe drinking water and clean 
their wastewater. The Federal Government has imposed national water 
requirements with an estimated $500 billion funding shortfall. We 
cannot abdicate our responsibility to help close this gap.
    So I am disappointed yet again to see the green eyeshades at OMB 
cutting the Clean Water SRF. I am also disappointed with cuts to the 
Section 319 nonpoint source water program. Farms helped with USDA money 
are not the only contributors to nonpoint source pollution, so we must 
also combat this environmental problem through the EPA budget.
    I agree that we need more funds for the Superfund program. However, 
we must end this notion that we should cleanup every site immediately. 
Many of the sites ready for cleanup are protected and stable. They pose 
no health threat to their surrounding area. We have higher risk 
environmental problems we must solve first.
    One national high risk problem is terrorism. EPA plays a role in 
critical infrastructure protection as lead agency for drinking water 
protection.
    EPA also supports the FBI in counter-terrorism and terrorism 
response activities. It would be nice if EPA could receive funding out 
of the homeland security function, but I do not know if that is 
possible.
    I am concerned that some programs, like the Criminal Enforcement 
program, are straining under the dual weights of enforcing 
environmental crimes and supporting homeland security duties. Also, 
local drinking water agencies have received Federal funds to assess 
their vulnerabilities to terrorist attack, but a great need remains to 
implement physical protection measures. We need to address these 
issues.
    Finally, on some parochial issues, you and I, Governor, will be 
having more conversations about whether it is fair to include far-flung 
counties such as Ste. Genevieve with their distant urban nonattainment 
center, in this case St. Louis, when the county does not contribute to 
the region's nonattainment.
    We also need to find ways to get farm coops and dealers better 
briefed on EPA reporting requirements for their anhydrous ammonia 
stocks. Methamphetamine makers are stealing anhydrous ammonia meant for 
fertilizer, leaving tanks open, and then EPA is slapping farm coops 
with enforcement orders and bullying them with maximum penalties. There 
must be a better way to handle this situation. I look forward to 
discussing these problems with you further. Thank you.
    Senator Inhofe. Thank you, Senator Bond.
    Senator Boxer?

OPENING STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM THE 
                      STATE OF CALIFORNIA

    Senator Boxer. Thank you very much, Mr. Chairman, and 
welcome. I know this is not going to be easy for you, but I do 
not think it should be when you look at the budget.
    EPA's mission is to protect human health and the 
environment. It is critically important, but you would not know 
that from this budget. You really would not know that. I am 
going to be specific.
    We are protecting the people of Iraq, Afghanistan, Haiti, 
and I wish every one of those people well. I want them to be 
safe and I want them to be protected, but I want the people of 
America and my families and my children, and I want the 
children who are growing up in Libby, Montana and everywhere to 
be safe. This budget is wanting.
    Let me be specific. If you put this budget into context and 
the cuts we are facing here, it is the biggest cut across the 
whole of government. That is a message to our families. If you 
take that number and you put it together with the 300-plus 
environmental rollbacks that we have seen by executive action, 
it is a stunning defeat for the health and safety of the people 
of this country.
    So here we see a 7.2 percent cut and the largest hit right 
here.
    I do not see how, Mr. Leavitt, in times of rising rates of 
childhood cancer, asthma and neurological and developmental 
disorders, decreasing funding to public health and environment 
programs could be justified. I urge you, go to any school, as I 
do all the time, and ask the children, how many of you have 
asthma? One-third of the kids will raise their hand. How many 
of you know someone with asthma? Well over half the kids will 
raise their hand.
    Now, one way to protect environmental health and safety is 
to fully fund Superfund. We know this has been a very 
successful program. But EPA proposes to keep cleanups at 40 per 
year, less than half the average annual cleanups that we saw at 
the end of the previous Administration, cutting them in half. 
According to a 1999 report to Congress, the needs of the 
Superfund program from 2002 through 2005 are $1.9 billion to 
$2.6 billion more than what this Administration is requesting.
    A January EPA inspector general report also documented a 
funding shortfall for 2003, noting that according to EPA 
regional officials, the lack of adequate funding has increased 
risks to public health and the environment. I would ask 
unanimous consent to place into the record quotes from these 
regional officials, Mr. Chairman.
    Senator Inhofe. Without objection.
    [The prepared statement of Senator Boxer and the referenced 
document follow:]

    Statement of Hon. Barbara Boxer, U.S. Senator from the State of 
                               California

    Thank you, Mr. Chairman. EPA's mission, to protect human health and 
the environment, is critically important. Unfortunately, EPA's proposed 
fiscal year 2005 budget--along with the Bush Administration's never-
ending attempts to roll back decades of environmental and public health 
protections--demonstrates yet again that this Administration is not 
committed to public health and the environment.
    The President's 2005 budget request would decrease EPA's funding 
$606 million, 7.2 percent, from fiscal year 2004 amounts. EPA's budget 
takes the largest single hit of any particular agency. This would 
actually be less funding than when Bush came into office.
    EPA's overall 2005 budget does not commit the resources necessary 
to assure the quality of life and clean environment that Americans 
expect and deserve. I do not see how, in times of rising rates of 
childhood cancer, asthma, and neurological and developmental disorders, 
decreasing funding to public health and environment programs can be 
justified.
    One way to protect environmental health and safety is to fully fund 
Superfund, an extremely successful hazardous waste site cleanup program 
that has direct human health benefits. Nonetheless, EPA proposes to 
keep cleanups at 40 per year, less than half the average annual clean-
ups that we saw at the end of the previous Administration.
    Although the budget requests a slight increase in funding, $124 
million above the fiscal year 2004 level, this amount falls far short 
of all estimates of what is needed to clean up the nation's Superfund 
sites. When adjusted for inflation, Superfund funding has decreased 
more that $600 million in the last 10 years. Approximately 70 percent 
of this decrease has occurred since 2001. According to a 1999 Report to 
Congress, the needs of the Superfund program from 2002 through 2005 are 
$1.9 billion to $2.6 billion more than what this Administration has and 
is requesting. A January EPA Inspector General report also documented a 
funding shortfall for fiscal year 2003, noting that, according to EPA 
Regional officials, the lack of adequate funding has increased risks to 
public health and the environment.
    This budget also shifts the costs of cleaning up abandoned sites to 
the taxpayers by refusing yet again to reinstate the fees on polluters. 
In 1995, 18 percent of cleanup costs were borne by taxpayers, 82 
percent by polluters. In EPA's 2005 budget, taxpayers bear nearly 100 
percent of these costs, while polluters pay nothing.
    Superfund is not the only EPA program to be cut. Overall clean 
water programs are slashed a drastic $827 million. For California 
alone, this means that $56.9 million dollars, or 48 percent of funds, 
to clean up our water is gone with no alternative source for funding in 
sight. This means no funding for critical projects, such as water, 
wastewater and stormwater infrastructure improvements; watershed 
management plans; and combined sewer systems.
    Funding for Leaking Underground Storage Tanks, which can hold 
extremely toxic chemicals that can contaminate the ground, aquifers, 
streams and other water bodies, is also decreased. MTBE, which has 
wrecked havoc with water supplies across the country, has come from 
leaking underground storage tanks. There are approximately 700,000 
tanks across the United States, and more than 430,000 confirmed 
releases from these tanks as of mid-July.
    I see a pattern here--of decreasing funding to critical water 
quality and infrastructure programs, as well as decreasing funding to 
programs that can help prevent the contamination in the first place. 
This calls into question this Administration's commitment to clean and 
healthy water for all Americans.
    Likewise, EPA's science budget is cut more than $90 million 
dollars, slashing funding to research endocrine-disrupters, ecosystem 
health, and pesticides and toxins. Shockingly, this Administration is 
slashing EPA's Homeland Security's Building Decontamination Program 
while acknowledging that it cannot meet its goals in this arena. For 
those of us who have lived through anthrax and ricin scares, this is 
astonishing.
    A budget that decreases funding for public health and the 
environment, stops funding local water quality projects, drastically 
slows Superfund clean-ups, and transfers the burden of cleanups to 
taxpayers forces me to continue to question this Administration's 
commitment to public health and the environment.
                                 ______
                                 
                                 
                                 
    Senator Boxer. This is stunning. Your own people in the 
field are telling you beware. One said, further cuts will 
hamper our ability to respond to States and communities looking 
for help. Another one said, the obvious slow-down of the 
program will significantly discourage responsible polluter 
participation in Superfund work. And it goes on. And the IG got 
these quotes because Senator Jeffords and Congressman Dingell 
and I sent a letter. Another one said, the level of resources 
currently budgeted for construction is insufficient in 
comparison with the region's request for resources for 
construction.
    So we know that we are not meeting the needs of the people 
that we are supposed to represent.
    Superfund is not the only EPA program to be cut. Overall 
cleanup programs have been slashed. Senator Bond pointed to 
some of these. For California, $56.9 million cut or 48 percent 
of funds to clean up our water is gone, is gone. And the 
President keeps coming out there and he says he wants to fight 
for our State. Good. Then he should do something here. This is 
very dangerous for our people. This means we are not going to 
have funding for critical projects such as water, wastewater 
and storm water infrastructure improvements. And Mr. 
Administrator, and I want to make you Mr. Secretary, but that 
is another debate, we have 35 million people and we are going 
to 50 million people by the year 2020. This is not the time to 
cut these programs.
    Funding for leaking underground storage tanks, which can 
hold extremely toxic chemicals that can contaminate the ground, 
the aquifers, the streams and other water bodies, is decreased. 
I would ask you, how could you do that when we all now know 
about MTBE and how pervasive it is? I think almost the whole 
population is affected with MTBE.
    So we have huge problems here. Your science budget is even 
cut, more than $90 million, slashing funding to research 
ecosystem health, pesticides and toxins. Shockingly, and this 
is another one, a sort of can-you-believe-this. This 
Administration is slashing EPA's homeland securities building 
decontamination program, while acknowledging that it cannot 
meet its goals in this arena. It is around $8 billion or so, is 
that correct, sir?
    Senator Inhofe. Senator Boxer, you will have ample 
opportunity to ask questions and you have gone beyond your 5 
minutes and we must get to the other members.
    Senator Boxer. I have 20 seconds left.
    So with a budget that is about $8 billion, this cannot 
stand; $87 billion for Iraq just like that, no problem; $8 
billion and we are hurting our people. We need to turn around 
here and this is not the budget to do it.
    I look forward to working with colleagues to do what we 
have to do to protect America's families.
    Senator Inhofe. Thank you, Senator Boxer.
    Senator Chafee?

OPENING STATEMENT OF HON. LINCOLN CHAFEE, U.S. SENATOR FROM THE 
                     STATE OF RHODE ISLAND

    Senator Chafee. Thank you, Mr. Chairman. Welcome, Governor.
    I will just echo what others have said. I look forward to 
your testimony. I know there is a great deal of pressure on the 
budget, especially this year, and I will echo the other 
comments: Superfund, as Senator Bond said; phase II storm water 
money; the Clean Water Act 319 money; and of course municipal 
infrastructure, which now has added new costs of security 
needs. I know you are under a lot of pressure to try and 
provide all this, but those are some areas of my concern.
    Thank you.
    Senator Inhofe. Thank you, Senator Chafee.
    Senator Carper?

 OPENING STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM 
                     THE STATE OF DELAWARE

    Senator Carper. Thank very much. Governor, good morning. It 
is good to see you.
    The Environmental Protection Agency's budget is arguably 
the most important tool that we have today for ensuring that 
our environment, the air that we breathe and the water that we 
drink, are safe for us and for our families. I appreciate, and 
I know my colleagues do too, that you would take the time to be 
with us today and help us understand what the EPA proposes to 
do with its budget in the coming year.
    We spend, I believe in this country today, about $26 for 
every American to fund the EPA's budget. Senator Boxer is 
right. It is $8 billion. Today, we are focused on whether or 
not we should spend a little bit more or a little bit less. I 
vote for more.
    I recognize that over the 34 years since the EPA was 
established that this annual investment has been one of our 
Nation's real success stories in the gains that we have made in 
cleaning up our environment, and more importantly in preventing 
our environment from becoming more polluted in the first place. 
It really would have probably been hard to imagine 34 years 
ago, when I was just going into the United States Navy. 
However, with something as important as people's health and the 
quality of our environment, we cannot afford to rest on our 
past successes.
    I think an important question for us today is, do you have 
the resources that you need at EPA to carry out the agency's 
mission? And have those resources been allocated in ways that 
allow you to achieve the goals that we all share for our 
environment?
    I would be supportive of a budget request that increases 
spending on clean water and on clean air, but that does so in a 
responsible way. However, as a former Governor like you and 
Governor Voinovich, I would no be supportive of a budget that 
shifts the costs of maintaining our environment to our States. 
I would not be supportive of a budget that seeks to implement 
the provisions of the President's Clear Skies proposal through 
rulemaking, something that we have discussed, while that same 
proposal has failed to gain support as legislation here in the 
Congress.
    On December 15 of last year, the EPA proposed new 
regulations for the control of mercury emissions from electric 
powerplants. Four days later on December 19, I wrote to the 
President asking that he withdraw those rules and instead work 
with the Congress on a legislative solution for mercury 
emissions as part of a comprehensive four-pollutant bill.
    Unfortunately, those rules have not been withdrawn. Late 
last year, EPA also proposed rules to implement the Clear 
Skies, SOx and NOx provisions. I do not believe that the EPA's 
budget should include funds to implement the Clear Skies rules 
in fiscal year 2005, and I will explore that with you later 
during our question period.
    I would also like to take a moment to remind you of two 
other major environmental issues in Delaware that are of 
concern to our Nation, one which has been mentioned by several 
of my colleagues already, and another which has not. The first 
is clean water. The EPA's budget is inadequate for fixing our 
Nation's outdated sewer systems in older cities such as 
Wilmington, Delaware; Cleveland, Ohio; Providence, Rhode 
Island; and a host of others. As a Nation, our investments in 
clean water is only a fraction of what is necessary to meet our 
clean water goals. I hope you will fight for increased funds 
for clean water programs at the agency, so that cities such as 
ours, and this city, Washington, DC, can stop polluting rivers 
and streams. As Governor of Utah, I know that you faced this 
issue and perhaps we can work together with other Governors and 
former mayors to develop a sensible path forward that will 
provide substantially cleaner waters for our Nation.
    The second is the clean air matters that are associated 
with refineries, such as the Motiva oil refinery in Delaware 
City right on the Delaware River just up from the Delaware Bay. 
I appreciate your confirmation in a letter that I think we 
received last month that EPA will hold the new owner of the 
refinery to the same requirements as Motiva was to meet. It is 
important that everything be done to reduce emissions from 
refineries and other heavy industries. I hope that this budget 
request includes sufficient funds to continue oversight of the 
Motiva refinery and other chronic polluters.
    Governor, if you were before this committee to tell us that 
all of the environmental challenges that face our country were 
resolved and that the agency has basically fulfilled its 
promise of 30-some years ago, I would better understand the 
budget that has been presented to us by the Administration. In 
fact, I might even say that it is too large.
    However, I do not think that you could convince me, and 
frankly from what I hear from some of my other colleagues, that 
the problems are solved, or that those that remain are cheap 
ones to fix. I believe we have already done that and what 
remains are really the tough jobs, issues that are costly such 
as non-point source pollution reduction.
    In closing, I would just ask that you work with us here on 
the committee and in Congress to make certain that you have 
what you really need at the agency. I would ask you to be 
straightforward in telling us what the real demands are so that 
we can plan for them.
    Today, we must look closely at each Federal dollar spent, 
but I will do whatever I can to help you get what you and your 
team need. I just ask that you tell us what that is.
    Thanks very much.

 Statement of Senator Thomas R. Carper, U.S. Senator from the State of 
                                Delaware

    Governor Leavitt, it is good to see you again.
    The Environmental Protection Agency's budget is arguably the most 
important tool we have today for ensuring that the environment, the air 
we breathe, and the water we drink, are safe for us and for our 
children. I appreciate you taking time today to help this committee 
understand what the EPA proposes to do with its budget in the coming 
year.
    We spend about $26 per American per year to fund the EPA's budget 
of almost $8 billion. Today we are focused on whether we should spend a 
bit more or less. I recognize that over the 34 years since the EPA was 
established, this annual investment has been one of our national 
success stories. The gains we have made in cleaning up the environment 
and, equally important, in preventing it from becoming polluted in the 
first place would have been hard to imagine 34 years ago.
    However, with something as important as people's health and the 
quality of the environment, we cannot rest on past success. An 
important question for us today is do you have the resources you need 
at the EPA to carry out the agency's mission, and have those resources 
been allocated in ways that will allow you to achieve the goals that we 
all share for our environment?
    I would be supportive of a budget request that increases spending 
on clean water, and on clean air, but that does so in a responsible 
manner. However as a former Governor like you, I would not be 
supportive of a budget that shifts the costs of maintaining our 
environment to the States. I would not be supportive of a budget that 
seeks to implement the provisions of the President's Clear Skies 
proposal thru rulemakings while that same proposal has failed to gain 
support as legislation in Congress.
    On December 15th of last year, the EPA proposed new regulations for 
the control of mercury emissions from electric power plants. On 
December 19th, I wrote to the President asking that he withdraw those 
rules and instead work with Congress on a legislative solution for 
mercury emissions as part of comprehensive 4-pollutant legislation. 
Unfortunately, those rules have not been withdrawn. I do not think that 
the EPA's budget should include funds to implement that rule in FY05, 
and I will explore that with you during the question period.
    I would also like to take a minute to remind you of two other major 
environmental issues in Delaware that are also of concern to the 
Nation. First is clean water. The EPA's budget is inadequate for fixing 
our nation's outdated sewer systems in older cities such as Wilmington, 
Delaware. As a Nation, our investment in clean water is only a fraction 
of what is necessary to meet the clean water goals. I hope you will 
fight for increased funds for the clean water programs of the agency so 
that cities such as Wilmington, DE and Washington DC can stop polluting 
rivers and streams.
    Second, is the clean air matters associated with refineries such as 
the Motiva oil refinery in Delaware City. I appreciate your 
confirmation last month that the EPA will hold the new owners of the 
refinery to the same requirements as Motiva was to meet. It is 
important that everything is done to reduce emissions from refineries 
and other heavy industries.
    Governor Leavitt, if you were before this committee today to tell 
us that all of the environmental challenges were resolved, and that the 
agency has fulfilled its promise of 30 years ago, I would understand 
this budget--in fact I might even say it is too large. However--I don't 
think you can convince me that the problems are solved, or that those 
that remain are the cheap ones to fix. I think we have already done 
that and what remains are the difficult, costly issues such as non-
point source pollution reductions.
    In closing, I ask that you work with us here on the committee, and 
in Congress to make certain that you have what you really need at the 
agency. Be straightforward in telling us what the real demands are so 
that we can plan for them. Today we must look closely at each Federal 
dollar spent, but I will do whatever I can to help you get what you 
need. I ask that you tell me what that is.
    Thanks again for being here today.
    Senator Inhofe. Thank you, Senator Carper.
    Senator Allard?

 OPENING STATEMENT OF HON. WAYNE ALLARD, U.S. SENATOR FROM THE 
                       STATE OF COLORADO

    Senator Allard. Thank you, Mr. Chairman.
    I would like to make my full statement a part of the 
record.
    Senator Inhofe. Without objection.
    [The prepared statement of Senator Allard follows:]

Statement of Hon. Wayne Allard, U.S. Senator from the State of Colorado

    I'd like to welcome Administrator Leavitt. This is the first time 
he has been before the committee since he was confirmed, and I want him 
to know that it's good to have him back. Mr. Chairman, I'd also like to 
thank you for holding this important hearing. I think that it is 
extremely important that each agency's budget not only be studied by 
the Appropriations Committee. As a Member of the Budget Committee and a 
Member of this committee, which authorizes many, if not all, of the 
programs at EPA, I think that it is important that we keep an eye on 
the President's requests each year as well.
    I am sure that much will be made of the cuts in this year's EPA 
budget proposal. But, as I am sure that you will agree, Mr. Chairman, 
these are tough times. It is a simple fact that we have to scale back 
our spending, even where it hurts. Many people will point to programs 
that need more funding, but the truth is that there will never be a 
point when everyone thinks that the funding is high enough. If we spend 
more this year, we'll have to spend more than that next year. It seems 
that every time we get through the appropriations process, last year's 
ceiling becomes this year's floor. And that is just not acceptable.
    We are trusted by the public to be good stewards of their money. 
How can we be that if we are determined to spend more and more every 
year? We should also focus on the fact that, while the overall funding 
level is below last year's and some programs are cut, other important 
EPA programs received increases in funding.
    As a Member of the Armed Services clean-up I oversee nuclear clean-
ups. Several years ago a lot of money was being spent, but not a lot of 
cleaning-up was actually getting done. So we looked at ways to provide 
incentives for quicker clean-ups. In Colorado, a site called Rocky 
Flats is being cleaned-up by DOE. It will save taxpayers millions of 
dollars because they are on schedule and under budget. So often we get 
caught up in the rhetoric of the decisions, we do lots of studies, we 
spend lots of money, and still nothing gets cleaned-up. I would 
encourage you to look to this model as you begin clean-ups at Superfund 
sites throughout the Nation.
    I's also like to recognize another clean-up site in Colorado. This 
one is being done by EPA. The Shattuck Chemical site in one of Denver's 
neighborhood should be looked upon as a real success story. There have 
been quite a number of hang-ups and slow-downs as they have moved 
through the process, but the EPA has stuck to its promises to this 
neighborhood and I understand that the clean-up is under way and going 
well. So, I was very pleased to see that the President increased his 
funding request for the Superfund program by $124 million.
    I was also pleased to see that the State Pollution Control Grants 
program was increased by $20 million. As someone who believes that the 
Federal Government should not place unfunded mandates on States, I 
believe that the funding assistance offered by a program such as this 
one is important. The work that States and tribes are able to perform 
with this funding is important work and I am pleased to see that it 
will go forward.
    Again, Mr. Chairman, thank you for holding this hearing, I look 
forward to the opportunity to discuss the EPA fiscal year 2005 spending 
proposals with the Administrator.
    Senator Allard. I just want to make a few brief comments.
    I have under my jurisdiction nuclear cleanup sites in Armed 
Services. We were faced with the issue. We saw a lot of money 
spent on cleanup, but nothing ever really happened on the 
ground. We re-looked at what it is that we could put that would 
incentivize these sites to be cleaned up. Some of it is just 
bureaucratic; some of it has to do with liability issues; some 
of it had to do with just getting everybody to understand how 
focused a site might particularly be, and to set priorities and 
go with those that are the greatest for various reasons. Maybe 
those of greatest risk; maybe they are the greatest risk; maybe 
there are the most ones to accomplish.
    There is a site in Colorado called Rocky Flats. Right now, 
we are going to save the taxpayers billions of dollars because 
we enhanced the cleanup time and right now it is under budget, 
ahead of schedule and going very well. I would encourage you to 
talk to that model that has been discussed at the Department of 
Energy, is the one that is cleaning it, discuss with them about 
the incentives that they have put in on Superfund sites, 
because on those kind of sites, I think they can be applied to 
Superfund sites. I would encourage you to look at ways in which 
you can do that.
    I think that so many times we get caught up in a lot of 
rhetoric, and this ought to happen, that ought to happen, we do 
this study and that study, but nothing ever happens in actual 
cleanup. I think that that is where we need to focus our 
efforts. We all have our favorite sites that we would like to 
see in our States.
    I would like to compliment you on another site in Colorado 
that is moving along very well. It is one that the 
Environmental Protection Agency has been involved in, and that 
is the Shattuck site. We have had ups and downs. Again, it is 
another site that has had some concerns expressed to me, and we 
contacted the Environmental Protection Agency. Now, they are 
moving forward and I am pleased to hear that. From what I 
understand, the cleanup is underway and going well, but it has 
not been without some trials and tribulations, and taking 
everyone and getting them focused on what it really takes to 
get a site cleaned up.
    So I am pleased with that and I am pleased to see that the 
President increased his funding request for the Superfund 
program of $124 million.
    I was also pleased to see that the State pollution control 
grants program is increased by $20 million. As someone who 
believes that the Federal Government should not place unfunded 
mandates on States, I believe that the funding assistance 
offered by a program such as this one is important. The work 
that States and tribes are able to perform with this funding is 
important and I am pleased to see that this will go forward 
also. So I compliment you on those.
    I know you have just been confirmed last fall. You are just 
now, you have your toe in the water and you are just getting 
started. I look forward to working with you in the future. I 
see hope out there. These are all very difficult issues, very 
difficult problems, but I do think that it would be worthwhile 
to spend time getting more focused.
    Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Allard.
    Senator Clinton?

OPENING STATEMENT OF HON. HILLARY RODHAM CLINTON, U.S. SENATOR 
                   FROM THE STATE OF NEW YORK

    Senator Clinton. Thank you, Mr. Chairman. I join in 
welcoming Administrator Leavitt here.
    Before I get into budget and policy issues, I want to thank 
the Administrator for his role in getting the World Trade 
Center expert technical review panel started. We had a launch 
of that last week in New York. I am very hopeful about what 
that panel will teach us concerning the air pollution problems, 
post 9-11. The panel will re-test some buildings in New York 
that were contaminated with toxic dust, and also examine 
concerns raised by the inspector general last summer with 
regard to indoor air quality. I just want to publicly thank the 
Administrator because I know that he is concerned about this 
issue and he has really been committed to it. I know that he 
will work to make sure the panel runs smoothly and helps to get 
some answers for the people of New York about the quality of 
their air in their homes and their workplaces. So I thank you 
again.
    I would like to raise just a few budget and policy issues. 
With regard to the budget, there are a few bright spots. I am 
extremely pleased that the clean school bus program is proposed 
for funding at $65 million, a substantial increase over the $5 
million appropriated last year. It is a program that I have 
worked on with Congressmen Houghton and Walsh. It will 
definitely improve the quality of the air that children breathe 
while they are on these buses by retrofitting old school buses 
with modern pollution control equipment. I think that is a 
tremendous step forward.
    But I do join my colleagues in expressing disappointment 
about the overall budget because the amount requested and the 
way that it is allocated I think is a step backwards in our 
commitment to strong environmental protection. I just want to 
make a few specific points.
    According to the EPA's own estimates, as you have already 
heard, we are facing a clean water infrastructure funding 
shortfall of $500 billion over the next 20 years. Those of us 
in the District of Columbia, at least part time, know what a 
challenge we face, the discovery of lead in the water. The 
implications that has particularly for pregnant women and 
children, is something that has to be taken seriously. So I 
think this clean water infrastructure issue will be at the top 
of the congressional agenda.
    I am also dismayed by cuts in research funding. One that I 
join with my colleague from California in pointing out is that 
the budget zeroes out the EPA's building decontamination 
research program. It is a small amount of money, less than $10 
million, but I think our experience in New York post-9-11 shows 
how important it is that we continue to look at this issue.
    Also our experience here with anthrax and ricin. We have to 
be better prepared and we have to have the technical and 
engineering expertise. When anthrax hit, everybody turned to 
EPA. When we had problems figuring out who was going to be 
responsible for indoor air contamination in the buildings that 
were contaminated in New York, everybody turned to EPA. I think 
EPA responded the best they could, but without this continuing 
research, we are not going to know exactly what we should do. 
So I am going to work hard to restore that cut.
    I am also concerned about some of the policy choices. I 
think that the mercury pollution issue is a perfect example. I 
do not think that we are requiring cuts that are deep enough or 
fast enough. I am opposed to allowing trading of mercury 
emissions because that will lead to dangerous hot spots where 
emissions and exposures remain unacceptably high. This is a 
real urgent public health issue.
    In New York, the Department of Health has issued 38 fish 
consumption advisories that warn children and pregnant and 
potentially young women who could become pregnant to limit the 
amount of fish they eat. We know that mercury is a potent 
neurotoxin. We know that prenatal mercury exposure can lead to 
poor performances on tests of attention and language.
    I think we have to start looking at this not only as an 
environmental issue and as a health issue, but as an education 
issue. According to recent EPA analysis, 630,000 of the 4 
million babies born in this country could have mercury blood 
levels at or above the agency's safety limit. So I just cannot 
stress too much how we have to look at this from a multi-issue 
perspective. The EPA has to be in the vanguard of dealing with 
these issues that have so many grave implications.
    I have other concerns that my colleagues have touched on, 
like Superfund and new source review, as well as several New 
York issues, but I wanted to raise those specifically for the 
Administrator's attention.
    [The prepared statement of Senator Clinton and the 
referenced article follow:]

 Statement of Hon. Hillary Rodham Clinton, U.S. Senator from the State 
                              of New York

    Thank you, Mr. Chairman. I want to join my colleagues in welcoming 
Administrator Leavitt back to the EPW committee.
    Before I get into budget and policy issues, I want to thank 
Administrator Leavitt for his role in getting the World Trade Center 
Expert Technical Review Panel started. As Administrator Leavitt knows, 
EPA launched the panel last week in New York, and I attended the event.
    For the benefit of my colleagues, this is a panel that Senator 
Lieberman and I worked to bring about, and it will do some retesting of 
buildings in New York that were contaminated with toxic dust from the 
World Trade Center. The panel will also examine concerns that the EPA 
Inspector General raised last summer with regard related indoor air 
quality issues.
    Administrator Leavitt, I know from our previous conversations that 
your are concerned about this issue, and I look forward to continuing 
to work with you to ensure that the panel runs smoothly and helps to 
address continuing concerns that New Yorkers have about the air inside 
their homes and workplaces.
    I'd like to then turn to the budget, and several policy issues. 
Like many of my colleagues, I have concerns about the budget, and more 
importantly, about the policy direction of the EPA.
    With regard to the budget, there are a few bright spots. I am 
extremely pleased that the Clean School Bus program is proposed for 
funding at $65 million, a very substantial increase over the $5 million 
appropriated last year. This is a program that I worked with 
Congressmen Houghton and Walsh to get started 2 years ago. Its goal is 
to improve the air that kids breathe on their way to school by 
providing funding to retrofit old school buses with modern pollution 
control equipment. I know it's been a big success--including in the 
town of Corning in New York, which got funding last year through the 
program--and I'm pleased that it is being expanded.
    But as much as I applaud that increase, the overall budget is 
extremely disappointing. A budget is a statement of priorities, and 
this budget clearly states that environmental protection is not a 
priority for this Administration. The total EPA request of $7.76 
billion is down 7.2 percent from fiscal year 2004 enacted levels ($8.37 
billion) for the Agency. On a percentage basis, that is one of the most 
severe cuts in the entire budget, and I think it speaks volumes about 
this Administration's lack of commitment to strong environmental 
protection.
    I just want to touch on a couple specific cuts. According to EPA's 
own estimates, we are facing a clean water infrastructure funding 
shortfall of $500 billion over the next 20 years. Yet the budget 
includes a cut in clean water infrastructure funding of almost $500 
million. To me, that is indefensible--we need to be increasing this 
kind of funding, not cutting it, and I will be working with my 
colleagues to that in the budget and appropriations process.
    I am also dismayed by the cuts in research funding contained in the 
budget. One item that stands out to me--and one that I have written to 
the President about--is the fact that this budget zeroes out the EPA's 
building decontamination research program. This is a relatively small 
budget item--less than $10 million--and the fact that it was zeroed out 
in the budget is simply astounding.
    In describing this cut, the EPA budget documents explain--quite 
frankly--that this cut, quote:
    ``represents complete elimination of homeland security building 
decontamination research,'' and that the cut will ``force it to disband 
the technical and engineering expertise that will be needed to address 
known and emerging biological and chemical threats in the future.''
    Given our experience here in the Senate with anthrax and ricin, and 
the ongoing work in New York to clean buildings contaminated by the 
World Trade Center collapse, I just can't understand this cut. And I'm 
going to be working here in the Senate to restore it.
    But even more important than the budget are the EPA's policy 
choices. EPA's mission is to protect public health and the environment 
by setting and enforcing rules that regulate air and water pollution 
and the cleanup of toxic substances, and I continue to have deep 
concerns about EPA's direction under this Administration.
    One of the most important issues under discussion now is 
controlling mercury pollution from power plants. In my view, the EPA 
proposal does not require cuts that are deep enough or fast enough. In 
addition, I am opposed to the proposal to allow trading of mercury 
emissions because I believe it will lead to dangerous hotspots where 
emissions and exposure remain unacceptably high.
    Mr. Chairman, this is an extremely urgent public health issue. It 
certainly is in New York, where the Department of Health has issued 38 
fish consumption advisories that warn children and women who may become 
pregnant to limit the locally caught fish they eat.
    We know that mercury is a potent neurotoxin, and that it is a 
particular threat to children and pregnant women. Prenatal mercury 
exposure can lead to problems such as poor performance on tests of 
attention and language, impaired memory, inability to process and 
recall information, and impaired visual and motor function.
    We also know that there are literally hundreds of thousands of 
American children being born each year with unacceptably high levels of 
mercury in their blood. According to a recent EPA analysis, 630,000 of 
the 4 million babies expected to be born in the United States this year 
could have mercury blood levels at or above the agency's safety limit. 
But at the same time, the EPA is proposing an unacceptably weak mercury 
standard.
    The Administration talks about leaving no child behind, but the sad 
truth is that this mercury proposal will leave hundreds of thousands of 
children behind at birth. For their sake, I believe the EPA must revise 
its mercury proposal to address this problem more swiftly.
    Mr. Chairman, I have many other policy concerns--including 
Superfund and the New Source Review--as well as several New York-
specific issues that I will be discussing with the Administrator after 
his testimony. Thank you.
    Senator Inhofe. Thank you, Senator Clinton.
    With that, Mr. Administrator, we will recognize you for 
your remarks and your entire statement, of course, will be made 
a part of the record.

   STATEMENT OF HON. MICHAEL O. LEAVITT, ADMINISTRATOR, U.S. 
                ENVIRONMENTAL PROTECTION AGENCY

    Administrator Leavitt. Thank you, Mr. Chairman and members 
of the committee. I am pleased to be here today to represent 
the President and the presentation of his 2005 budget request.
    I have submitted, as you request, formal remarks and ask 
that they be submitted for the record. In addition, I would 
like to make just a couple of quick comments.
    Today throughout the course of my remarks, you will see two 
emergent themes. The first is increasing the velocity of 
environmental progress in this country; and second is doing it 
in a way I like to refer to as a better way. The pioneers of 
environmental progress in America used a command-and-control 
strategy. It created a harvest of the low-hanging fruit. Each 
increment of progress from this point forward now gets harder 
and it gets more expensive.
    The United States has shown steady improvement over the 
course of the last 30 years, and I feel great appreciation for 
those early pioneers who planted the seeds of this 
environmental progress. While historically crucial, the 
approach of the last 30 years has been too slow and it has been 
too expensive, and frankly it has been conflict-ridden.
    The challenge of the next decade is to take the next great 
leap forward in environmental progress, to increase the 
velocity of our progress. We can do this by what I referred to 
earlier as a better way. You will hear that referred to 
throughout my testimony and throughout the testimony of my 
colleagues. A better way is found when new technology changes 
the equation, changes it from what before was improbable, to 
something that is quite possible. A better way is found when we 
use market incentives to speed the acceptance of new and higher 
standards. It is a better way when we find a collaborative 
network approach to solve problems that were once stuck in an 
all too familiar gridlock of polarization. It is a better way 
when we approach our environmental improvement by measuring and 
rewarding results, and not just programs.
    These elements, technology, markets, and collaborative 
networks focusing on results, form the cornerstone of what we 
are now focused on in the Environmental Protection Agency, and 
that is finding a better way.
    Let me illustrate briefly an example of this better way in 
action. Shortly after becoming Administrator, I proposed a 
series of air quality rules that will lead us into the most 
important and I would say most productive period of air quality 
improvement in our Nation's history. The keystone of the 
initiative is the interstate air quality rule that establishes 
a cap and trade system, the same system that was used to make 
substantial progress on acid rain to reduce emissions of NOx 
and SOx of coal-fired powerplants by some 30 percent. It is a 
better way. It is a better way because it moves us away from 
the command and control style regulation, regulation that 
creates incentives, incentives to avoid or evade, rather than 
to comply and to exceed the standards that we have established.
    It is a better way because people move more and they move 
faster to do what is in the public interest when it is in their 
interest as well. It is a better way because it will clean the 
air. During the period of time that it is cleaning the air, it 
will put downward pressure on natural gas prices, not upward 
pressure.
    The President's 2005 budget request of $7.8 billion 
provides what we believe to be the necessary funding for this 
agency to carry out its mission to protect human health and to 
safeguard the natural environment. We intend to do that by 
accelerating progress, accelerating progress using the 
principles of a better way and we believe future generations 
will benefit, and I am very pleased now, Mr. Chairman and 
members, to respond to your questions.
    Senator Inhofe. Governor Leavitt, thank you very much for 
an excellent opening statement. Let me first say, several 
comments were made by some of my colleagues that I thought it 
would be a good opportunity to clarify it. Insofar as the 
Superfund is concerned, can you identify any Superfund site, 
past, present or those that are in the pipeline right now, 
where an identifiable and viable polluter has not been held 
liable, consistent with the law, for their share of the 
contamination?
    Administrator Leavitt. Mr. Chairman, the first principle of 
Superfund is that the polluter pays. It is now the first 
principle and will remain. Some 70 percent of the Superfund 
progress that we have made in this Nation has come with the 
reimbursement of responsible parties, and we will continue to 
pursue those responsible parties. The taxpayers of our Nation 
should have the burden of that as light as possible. The 
polluter should have it as heavy as possible. We will continue 
to follow that principle.
    Senator Inhofe. I appreciate that. Wouldn't you say it is 
also false to say that the Superfund tax is a tax on polluters, 
when in fact there are many people who are subjected to this 
tax who had no capability of polluting, let alone any history 
of polluting?
    Administrator Leavitt. Polluters are the responsible 
parties. We are going after them. They are paying 70 percent of 
the cleanup. We would like it to be higher. We will continue to 
press on that point. I am pleased that the President has 
proposed $150 million as he did last year, regrettably that was 
not funded. We hope it will be this year. We could use those 
resources in being able to clean up Superfund sites. Many of 
you have indicated that there are sites specifically in your 
States.
    We are making good progress. Last year we completed cleanup 
on 40 sites. There were 20 sites that were proposed. We were 
able to authorize 12 of those sites. We continue to make good 
progress in this country. We have an objective to clean up and 
recycle land, get it back into productivity. It is a bigger 
part of what I referred to earlier as the better way. We want 
to use the principles of collaboration, but first and foremost, 
polluters ought to pay.
    Senator Inhofe. Thank you very much.
    In my opening statement, I spent a little bit of time 
talking about our grants hearing that we had last week. Senator 
Jeffords and I requested a listing of discretionary grants 
awarded for fiscal year 2003. We would look forward to getting 
that information as soon as possible. If you would help us do 
that, we would appreciate it.
    Administrator Leavitt. Senator, could I mention that 
shortly after becoming Administrator, my instinct led me to the 
same place yours has. I have asked and did receive a list of 
those receiving grants. Frankly, it is worthy of inspection and 
it is and will receive my direct and personal attention. I will 
provide the information you have requested.
    Senator Inhofe. I appreciate that very much. We are 
concerned about the discretionary grants. I know that is a 
small part of the total amount. We know that the program works 
very well, having Senator Voinovich and others up here who have 
talked about their service, as you have had service at the 
State level, and I have also. It is imperative that these 
mandates that we make are funded and we are responsible for 
doing that.
    I am concerned about the discretionary grants. The fact 
that the EPA IG audit reported that a lobbying group, that is a 
501(c)(4) operation, that is what they do for a living, they 
lobby, was paid $5 million in a 5-year period to lobby the EPA. 
Now, let's be sure we understand this. We are paying taxpayers 
money to get people to lobby us, and this is a concept that I 
find just totally outrageous.
    The question I have is, what would the agency do to recover 
these funds and to safeguard against continuing having this 
occurring in the future?
    Administrator Leavitt. Senator, we will continue to work 
directly with this committee to provide information. We are 
going to be doing, the Acting Deputy Administrator and I have 
had a direct conversation about this. It will be receiving our 
direct attention.
    Senator Inhofe. OK. I would like to make a request, and you 
may have to answer it for the record, but I think there are two 
areas that are important. First of all, we need to post clear 
and complete descriptions of the types of available grants to 
encourage a greater involvement; and second, to know as we have 
been requesting publicly, exactly who the grant recipients are, 
and a description of those. I would like to have you give 
serious consideration to actually posting a Web site so these 
two bits of information can be available to all of America. Do 
you see a serious problem with that?
    Administrator Leavitt. Actually, having reviewed other Web 
sites from other agencies, I think much of that information is 
available. I do not know precisely how much of it is available 
on the EPA Web site, but I see no reason we should not do an 
analysis.
    In response to your request, we reviewed the grant 
information contained on EPA's web sites. I am pleased to 
inform you that EPA does provide descriptions of the types of 
available grants in the Catalog of Federal Domestic Assistance. 
The public can access these descriptions through the Office of 
Grants and Debarment (OGD) internet site. In addition, EPA 
posts all of its competitive grant solicitations on 
fedgrants.gov. EPA also provides information to the public on 
awarded grants in two ways. First, OGD has a grant competition 
web site which contains information on closed competitive 
announcements and awards made under those announcements. 
Second, EPA includes information on all of its active awards in 
the Envirofacts data base which can be accessed through the 
Agency's home page. As a supplement to Envirofacts, OGD, 
beginning in April 2004, will be posted on its internet page 
information on new discretionary grant awards.
     Senator Inhofe. I appreciate it. Thank you very much.
    I would admonish our members to stay within our time limit 
and would recognize Senator Jeffords for his questions.
    Senator Jeffords. Thank you, Mr. Chairman.
    The Administration's budget proposes to cut clean water 
infrastructure spending nearly in half of fiscal year 2004 
enacted levels. In 2002, the EPA's own analysis estimated a 
spending gap of $270 billion over 20 years for clean water 
needs and drinking water gap of $265 billion over that same 
period. The Frank Luntz poll, that I believe you have probably 
seen, I mentioned it in my opening statement, shows that 90 
percent of Americans believe that Federal investment to 
guarantee clean water is a critical component of our Nation's 
environmental well being.
    Can you explain how the proposal to cut water 
infrastructure spending reflects EPA's own findings and the 
views of 90 percent of Americans?
    Administrator Leavitt. Senator, as you know, in my previous 
service as Governor, this was something I dealt with in a very 
direct and intimate way. I know the importance of the State 
revolving loan funds to States and local communities, 
particularly small communities who struggle to meet the needs 
and the demands that the Clean Water Act has placed upon them. 
I make no commentary other than to accept it as true and that 
the infrastructure gap that you have spoken of exists.
    It also has become clear to me that meeting that gap will 
have to be a partnership between the national government, the 
one that has established the standards, and the States, who 
have a compelling statewide interest, and local governments. 
Over time, we have allowed the management and the development 
of infrastructure to be a matter that is managed at the local 
level, and it needs to stay there.
    One of the compelling large-scale policy issues that we as 
a Nation will have to visit is how do we pay for this. Do I 
believe that it should fall upon the national government to be 
the funding agency for all of the $400 billion of needs? I do 
not think the national government can. Should we play a role? 
Absolutely. How much should it be? This is the policy question.
    In the large-scale, most of those costs will need to, in my 
judgment should be, borne by ratepayers, not directly by 
taxpayers. This is the question that this budget matter 
ultimately drives. I also suggest that simply building new 
infrastructure is not the only solution. One, we need to reduce 
demand. We have become accustomed as a Nation to using water in 
a way that we oftentimes do not acknowledge the impact that it 
has or its public cost. Reducing demand on infrastructure is 
one thing we can do. Implementing better management, 
conserving, and finding intergovernmental cooperation, are ways 
in which I believe that we as an agency can help local 
government and States. We have a financial contribution to 
make. The size of contribution is the matter of this debate. I 
believe ultimately most of the cost will need to be borne by 
ratepayers, not taxpayers. My guess is that most on this 
committee would agree.
    Senator Jeffords. Thank you.
    New source review, about 2 months ago I wrote to you asking 
for a report on the agency's NSR enforcement strategy in light 
of the recent court stay on the routine equipment replacement 
rule. I asked for a description of what the agency and the 
Administration planned to do with spending, with the pending 
cases that EPA has already referred to the Department of 
Justice, the cases which are awaiting referral and the cases 
under active investigation by EPA.
    It has also come to my attention that there are piles of 
unopened boxes full of documents that could be used by EPA to 
refer even more powerplant violations to Justice. What is the 
plan of action on NSR enforcement for powerplant violators, and 
what does the agency plan to do with these unopened boxes?
    Administrator Leavitt. Senator, we as an agency are 
committed to making new source review work. We believe it is an 
important tool of enforcement. May I also answer directly. We 
intend to move forward on the cases that have been filed 
already. There will be new cases, and we will select the new 
cases based on a myriad of factors, including available 
resources and our desired environmental benefits.
    As you may know, since that stay was placed, we have filed 
additional cases, and I think that is a direct answer to your 
request.
    Senator Jeffords. This is a most serious problem, as far as 
I am concerned. Approximately 20,000 lives are prematurely 
ended each year because of old dirty powerplants not required 
to apply best available control technologies. As you know, 
these plants have been escaping new source review rules to 
date, many of them illegally. These same plants would be 
permanently exempt under the Administration's routine equipment 
replacement rule if it survives in court.
    What is the public health rationale for not requiring these 
powerplants to modernize their controls right now, not in 10 or 
20 years or the far future, as the Administration has proposed?
    Administrator Leavitt. Senator, I spoke with the utility 
industry at a meeting in Phoenix recently and told them 
precisely that. It is time to clean up old powerplants now, not 
10 years from now. I put forward a rule called the Interstate 
Air Quality Act. I know our time is limited right now, but I 
hope at a future round I can tell you about the requirements 
that will ultimately result, in $50 billion of new equipment 
being placed on old powerplants, the most sweeping change we 
have made in this area, leading to the most productive period 
of air quality improvement in our Nation's history.
    The red light is on. I will wait for later.
    Senator Inhofe. Thank you, Governor.
    Senator Voinovich?
    Senator Voinovich. I would like to comment on just what 
Senator Jeffords said. It seems to me that with the continued 
uncertainty of the 126 petitions and where we are going in 
terms of the four pollutant bill or Clear Skies, that the 
territory out there is very uncertain for our utilities. I 
think as a government, we owe them some clarity on just what is 
going to be expected from them, so that they can move forward 
and make the improvements that Senator Jeffords would like to 
see them make.
    I think you are aware of the fact that I have been very 
interested in the Great Lakes, as well as some of my 
colleagues. As you know, the GAO released a report that stated 
that restoration of the Great Lakes is being hindered because 
of little coordination and no unified strategy for Great Lakes 
environmental activities. In addition to two hearings that I 
held on this report and Great Lakes restoration, the Governors, 
mayors and a wide variety of groups in both the U.S. and Canada 
have come together to push for action to create a coordinated 
full-court press to restore the Great Lakes.
    I would like to know since that report and since the 
hearings, what progress is being made to deal with this lack of 
coordination?
    Administrator Leavitt. Senator, I would like to respond to 
that and also make comment on the point on powerplants. Since 
my confirmation, I have taken your advocacy and others' very 
seriously. There is a great opportunity for us here. As you 
know, the President's budget proposes a $45 million 
appropriation, nearly three times what was there before, to be 
able to focus on those problems, some of them dealing with very 
specific scientific issues. I have great optimism for it and 
have spent substantial personal time and will continue to. Much 
more will be said in coming weeks on that matter.
    With respect to the powerplant issue, could I make clear 
that I do intend to finalize this year a rule we have referred 
to as the interstate air quality rule which will result in a 
$50 billion investment by the people of this country, the 
largest single investment we have ever made as a Nation in 
clean air. It will require a 70 percent reduction in NOx and 
SOx by coal-fired powerplants and solve a very serious problem 
that many of our cities have with ozone.
    Many of the cities in this country, some represented by the 
senators on this committee, believe and feel that if they could 
put all the cars off their roads and close all the factories 
and cleanup their own powerplants, they still would not have 
clean air because of transport. The Interstate Air Quality Rule 
is a national solution, being able to focus on powerplants, one 
that I believe will result in the greatest period of air 
quality improvement in our Nation's history.
    Senator Voinovich. I would like to comment that there is a 
great deal of concern about the rules in terms of their 
permanency. Clear Skies I think would be a much better solution 
to the problem. As the States realize, the major impact that 
the new ambient air standards on particulate ozone are going to 
have on them, and coming up with State implementation plans to 
carry those forward, I think they are going to understand more 
and more that it would be far better if we had something, a 
compromise between what Senator Jeffords wanted and what I 
would like to see happen in Clear Skies and the Administration, 
and would be a much better way of achieving that goal.
    Administrator Leavitt. Senator, we could not agree more. We 
would very much like to see the multi-pollutant legislation 
known as Clear Skies move forward. We see it as a superior way 
to solve this problem.
    Shortly after I became Administrator, it was my duty to 
send to States, 31 of them, letter indicating that 506 of the 
counties in our country have not achieved attainment on ozone 
standards. That is a very serious letter. I know, having been a 
Governor myself and so do you, that is a very serious letter 
for a Governor to receive because it means that it has serious 
consequences. Someone mentioned earlier, I think Senator Boxer, 
about the asthma problem. It means that the citizens of their 
communities are not breathing clean air. It also means that 
those who are trying to develop jobs for those who live in 
those areas may be restricted in important ways.
    So we need to find a way to help those communities 
suffering from air transport find a solution. Therefore, I 
moved forward on the rule, anticipating that the Congress 
ultimately will come back and act legislative. That is clearly 
our preference.
    Senator Voinovich. I understand achieving ambient air 
standards because one of the first things I did as Governor was 
to move to get all of Ohio's counties to conform with the 
ambient air standards, because it had a large impact on our 
quality of life environment, but also on our economic vitality. 
Now, those same letters are going out to Governor Taft in Ohio 
and all over the country, and again they are going to have to 
contend with it. It seems to me that it ought to be done in a 
very common sense, logical way, rather than not really having 
an idea of what is coming in the future.
    Senator Inhofe. Thank you, Senator Voinovich.
    Senator Wyden?
    Senator Wyden. Thank you.
    Mr. Administrator, let me begin by getting your reaction to 
my concern that it looks to me like powerful industries can 
essentially hotwire the regulatory process that weaken 
environmental rules and essentially enact their wish lists into 
law. The New York Times on Saturday ran a front page story with 
the title, How Industry Won the Battle of Pollution Control at 
EPA. Mr. Chairman, I would ask to have that made a part of the 
record.
    Senator Inhofe. Without objection.
    [The referenced document follows:]
                [From the New York Times, March 6, 2004]
        How Industry Won the Battle of Pollution Control at EPA
            (By Christopher Drew and Richard A. Oppel, Jr.)
    Just 6 weeks into the Bush Administration, Haley Barbour, a former 
Republican party chairman who was a lobbyist for electric power 
companies, sent a memorandum to Vice President Dick Cheney laying down 
a challenge.
    ``The question is whether environmental policy still prevails over 
energy policy with Bush-Cheney, as it did with Clinton-Gore,'' Mr. 
Barbour wrote, and called for measures to show that environmental 
concerns would no longer ``trump good energy policy.''
    Mr. Barbour's memo was an opening shot in a 2-year fight inside the 
Bush Administration for dominance between environmental protection and 
energy production on clean air policy. One camp included officials, 
like Mr. Cheney, who came from the energy industry. In another were 
enforcers of environmental policy, led by Christie Whitman, a former 
Republican Governor of New Jersey.
    The battle engaged some of the nation's largest power companies, 
which were also among the largest donors to President Bush and other 
Republicans. They were represented by Mr. Barbour and another 
influential lobbyist, Marc Racicot, who also would later become 
chairman of the Republican National Committee.
    In an Administration that puts a premium on keeping its internal 
disputes private, this struggle went on well out of the public's view. 
But interviews and documents trace the decisions in which the Bush 
Administration changed the nation's approach to environmental controls, 
ultimately shifting the balance to the side of energy policy. Senior 
officials at the Environmental Protection Agency, including Mrs. 
Whitman, became isolated, former aides said, and several resigned.
    Thirty years after the first Earth Day, the incoming Administration 
was still confronting power-plant smokestacks spewing fumes. The policy 
questions were arcane, involving strategies to control polluting 
particles. At stake, though, were environmental risks to human health 
and the nation's ability to produce cheap energy, as well as decisions 
about how the most polluting industries would be monitored for decades 
to come.
    For operators of some coal-fired plants, the stakes were more 
tangible. Dozens of plants were facing lawsuits over air pollution 
brought by the Clinton Administration and several northeastern States--
including New Jersey under Mrs. Whitman before she became head of the 
EPA. The industry, fearing billions of dollars in new costs, set about 
to undo the suits.
    One of the most important decisions was Mr. Bush's reversal of a 
campaign promise to regulate emissions of carbon dioxide, a gas that 
many scientists say contributes to global warming. The Administration 
also has proposed looser standards for emissions of mercury--a highly 
toxic pollutant--than President Bill Clinton had sought. The most 
protracted fight concerned the Administration's decision to issue new 
rules that substantially reduced the requirements for utilities to 
build pollution controls when modernizing their plants. The final 
policy shift may ultimately help the coal-plant operators shed the 
lawsuits.
    The struggle within the Administration, in skirmishes between 
Cabinet officers and volleys of memorandums, showed how the White House 
has transformed domestic policy through regulatory revision, rather 
than more contentious congressional debate.
    Administration officials say the changes were needed to raise 
energy production and lift the burden of cumbersome and costly 
regulations on industry. They said that the approach will continue the 
trend of declining emissions and reduce some of the most harmful 
pollutants by about half in the next decade--cuts as deep if not deeper 
than the old measures would bring.
    ``It's not about whether air quality will get better,'' said James 
L. Connaughton, chairman of the White House Council on Environmental 
Quality. ``It will, and it must. The question is what path you take to 
get there.''
    Critics on Capitol Hill and environmental groups say the policies 
will slow the cleaning of the air and undercut Congress's authority, 
while catering to companies that are big contributors to Mr. Bush's 
campaigns.
    ``Rather than work with Congress to move us forward on 
environmental issues, the Bush Administration is working with the 
special interests to undermine them,'' said Senator James M. Jeffords, 
the Vermont independent who is the ranking minority member of the 
Senate environment committee.
    But both sides agree on one outcome of the struggle: The nation's 
approach to air pollution control shifted drastically.
An Early Challenge
    As President Bush took office, he said he wanted to swiftly address 
energy shortages that had caused blackouts in California. Coming from 
the Texas energy industry, he was convinced that Clinton Administration 
environmental policies were restraining energy production. And 
utilities geared up to press the new Administration for big changes on 
a handful of issues that were crucial to them.
    Their biggest worry was Mr. Bush's campaign pledge to carry through 
on a Clinton Administration effort to impose controls on power plant 
emissions of carbon dioxide.
    The coal-fired power companies, which are among the nation's 
largest sources of carbon dioxide, were alarmed when Mrs. Whitman in 
her first days at the agency said Mr. Bush would carry out his promise. 
Not long after, Mr. Barbour sent his memorandum to Vice President 
Cheney, who was heading a task force Mr. Bush had ordered to conduct a 
broad review of energy policy.
    Mr. Cheney had been chief executive at Halliburton, an oil-and-gas-
services company. Energy corporations had been among the strongest 
supporters of Mr. Bush's Presidential campaign: There were more 
executives from energy than from any other industry group among Mr. 
Bush's most elite fund-raisers, called ``Pioneers,'' who each generated 
more than $100,000 in donations.
    The industry's outcry over carbon dioxide reached Mr. Bush. In 
March 2001, he reversed himself, saying there would be no carbon 
dioxide controls. ``I was responding t realities,'' Mr. Bush said at 
the time, ``and the reality is our nation has a real problem when it 
comes to energy.''
    After that victory, the utilities moved to press their advantage, 
turning to Mr. Cheney for help on another issue: a set of rules 
requiring them to add new pollution controls when they upgraded or 
expanded their plants. The power companies strongly objected to the 
rules, which were known as ``new source review,'' calling them 
arbitrary, expensive and outmoded.
    A small group of coal-fired utilities was especially unhappy. In 
1999, the Clinton Administration had sued nine companies, saying they 
had expanded 51 older plants without adding the required controls. 
Among those facing suits were the Southern Company, based in Atlanta; 
the Duke Energy Corporation, based in Charlotte, N.C.; and the 
FirstEnergy Corporation, based in Akron, Ohio. Southern, one of Mr. 
Barbour's biggest clients, was facing potential liabilities of hundreds 
of millions of dollars.
    The rules had not previously been vigorously enforced, and the 
companies contested the suits, saying the Clinton Administration had 
focused on them unfairly and made it too costly to improve their 
plants.
    Mrs. Whitman made it clear she was willing to revise the rules and 
settle the lawsuits. But, former aides at the EPA said, she favored 
old-fashioned political horse-trading: She would ease up on the old 
rules, but only after going to Congress with broad legislation to 
establish tough new controls on three important pollutants--sulfur 
dioxide, nitrogen oxide and mercury.
    Mrs. Whitman's orders were to ``find ways to deal with'' the rules 
``without giving away the farm to industry unilaterally,'' said Jeremy 
Symons, a former agency official who works with the National Wildlife 
Federation, an advocacy group.
    Industry lobbyists had a different strategy. C. Boyden Gray, who 
was White House counsel during the first Bush Administration and 
represented some utilities, said the companies viewed the pollution 
lawsuits as ``a gun to the head.'' They feared, he said, that if their 
bid to change the rules got caught up in a bigger battle in Congress, 
``they might not get anything.''
    The industry's main lobbying group, the Edison Electric Institute, 
already had meetings with White House and Energy Department officials 
about relaxing the pollution rules. The group's president, Thomas R. 
Kuhn, had been a Yale classmate of President Bush, and was also a 
Pioneer.
    Yet for some companies named in the lawsuits, the institute was not 
forceful enough. ``We needed a strategy and an organization to take a 
more aggressive approach,'' said Todd Terrell, a spokesman for 
Southern. So, at Mr. Barbour's urging, a handful of coal-burning 
utilities formed their own lobbying group.
    At the time, Mr. Barbour was probably Washington's most successful 
lobbyist. As Republican National Committee chairman from 1993 to 1997, 
he had helped the party gain control of Congress and had long been one 
of its most prodigious fund-raisers. His corporate clients included 
many of the party's largest donors. That added to his entree with 
Republican officials.
    The splinter group, organized by Mr. Barbour in the spring of 2001, 
was called the Electric Reliability Coordinating Council. Scott Segal, 
its executive director, said it sought a ``more consistent'' effort to 
rewrite the pollution rules. Several government officials and lobbyists 
said the group's underlying goal was bolder: to persuade the 
Administration to repudiate the old rules and thus torpedo the lawsuits 
based on them. According to the Center for Responsive Politics, the six 
utility companies now in the council and their employees made more than 
$10 million in political donations over the last 5 years, nearly three-
fourths of that going to Republicans. Southern and its employees 
account for nearly $4 million of the total, with 72 percent of their 
donations going to Republicans.
    Mr. Barbour had a meeting with Mr. Cheney on May 3, 2001, just 2 
weeks before the task force was set to unveil its energy plan, Mr. 
Segal said. Mr. Barbour was accompanied by Mr. Racicot, a friend of 
President Bush who would become the Republican chairman in January 2002 
and is now chairman of Mr. Bush's campaign.
    Mr. Segal said that Mr. Barbour and Mr. Racicot ``did not dwell'' 
on the lawsuits, but suggested that the Administration should abandon 
the standards that the Clinton Administration had applied in bringing 
them.
    Mrs. Whitman's aides said Mr. Cheney's office did not inform her of 
that meeting. But the next day Mrs. Whitman, knowing the debate was 
reaching a climax, sent a blunt memorandum to Mr. Cheney.
    ``We will pay a terrible political price if we undercut or walk 
away from'' the lawsuits, she wrote. She said it would be ``hard to 
refute the charge that we are deciding not to enforce the Clean Air 
Act.''
    She warned Mr. Cheney that a ``broad attack'' in his final report 
on the pollution rules would wipe out her leverage over the industry 
and ``permanently destroy our chance to achieve any needed legislative 
reforms we may seek in the future.''
    As the task force neared its end, Southern and other utilities in 
Mr. Barbour's group were busy on another front. On May 15, 2001, they 
gave $100,000 to the Republican party.
A Shift in Lobbying Efforts
    Mrs. Whitman's arguments succeeded in forestalling any 
recommendation in the Cheney task force report, issued on May 17, to 
rewrite the rules or cripple the lawsuits. Instead, the task force 
called only for the EPA to review the rules with the Energy Department, 
whose focus is to promote energy supply, and for the Justice Department 
to review whether the suits were valid.
    In January 2002, though, Mr. Barbour and his group learned that 
they would get no help from the Justice Department. Its lawyers found 
nothing amiss with the pollution lawsuits, concluding that they were 
supported by ``a reasonable basis in law and fact.''
    That setback did not slow the lobbying. Soon its locus shifted, as 
the Energy Department, led by Spencer Abraham, became increasingly 
involved, setting off a fight that reverberated inside the EPA as 
officials there said they felt outmaneuvered.
    Mr. Barbour and Mr. Racicot joined a parade of industry lobbyists 
seeking out Energy officials.
    Between July 2001 and November 2001, Francis S. Blake, then the 
deputy energy secretary, held seven meetings with industry groups about 
the pollution rules, attended by more than 60 executives and lobbyists, 
records show. During that time he met with only one lobbyist from an 
environmental group.
    In early 2002, Energy and EPA officials got down to considering new 
rules. Environmental officials in charge of enforcement grew alarmed at 
the proposals emanating from Mr. Abraham's department, which often 
echoed the industry's demands.
    In one memorandum, EPA officials attacked an Energy Department 
draft as ``highly biased and loaded with emotionally charged code 
words'' that would ultimately ``vitiate'' the pollution-control 
program.
    At one point, her aides said, Mrs. Whitman set up what she thought 
would be a private meeting with Mr. Cheney to discuss EPA concerns. 
When she arrived at his office, though, she was disappointed to find 
that Mr. Abraham was already there to present counter arguments.
    Soon an exodus began from the EPA's enforcement branch. Eric V. 
Schaeffer, who joined the agency during the first Bush Administration 
and was head of the Office of Regulatory Enforcement, sent a 
resignation letter to Mrs. Whitman that February. ``We seem about to 
snatch defeat from the jaws of victory,'' he wrote, adding that the 
White House ``seems determined to weaken the rules we are trying to 
enforce.''
    Mr. Schaeffer and his boss, Sylvia K. Lowrance, then the agency's 
top career enforcement official, both said in interviews they 
repeatedly warned Mrs. Whitman that the rule changes would jeopardize 
the enforcement lawsuits. Their view, shared by many industry lawyers, 
was that judges were often reluctant to penalize companies for failing 
to comply with rules that had been subsequently relaxed. Mrs. Lowrance 
later took early retirement.
    A different view was held by some EPA policy officials, including 
Jeffrey R. Holmstead, a former aide to Mr. Gray in the first Bush White 
House, who was now in charge of writing air-pollution regulations. Mr. 
Holmstead had long criticized the old rules as unmanageable and 
counter-productive, and he believed revising them would have no impact 
on the lawsuits in court.
    But Mr. Holmstead was uneasy with the lobbyists' participation. 
``This would have been so much simpler if they hadn't gotten Barbour 
involved, because that just created this new political intrigue,'' he 
said.
    In June 2002, Mr. Holmstead had a chance to see how closely the 
White House was watching. At a party for the 50th birthday of Mr. 
Abraham, Mr. Holmstead ran into Andrew Card, the White House chief of 
staff.
    Mr. Card ``wanted to know how come we were having so much trouble'' 
finishing up the rule revisions, Mr. Holmstead recalled.
    Shortly after, on June 13, Mrs. Whitman sent a proposal to the 
White House. It contained many of the changes that the Energy 
Department had championed, and was the foundation of the final rule 
revisions published in October 2003.
    Mrs. Whitman has never discussed the decisionmaking process or 
broken ranks in public with President Bush. But the new rules showed 
that the White House had thrown its weight behind energy priorities, 
both environment and energy officials said.
    The rules said utilities would not have to add new pollution-
control devices if upgrades and construction projects did not cost more 
than 20 percent of the plant's value--a loophole all sides said was 
huge.
    Departures From EPA Mrs. Whitman resigned last May, saying she 
hoped to spend more time with her family. Several former aides said she 
was frustrated that she did not have more support within the 
Administration. She declined through a spokesman to be interviewed.
    In a statement, Mrs. Whitman said she had supported streamlining 
the pollution rules because many groups agreed that they ``had grown 
cumbersome, unreliable and unpredictable.'' She said that Mr. Bush 
``expects the members of his cabinet to advocate forcefully on behalf 
of his or her agency'' before making major decisions.
    Mr. Cheney, Mr. Abraham, Mr. Racicot and Mr. Barbour--now the 
Governor of Mississippi--declined to comment.
    Late last year, top EPA officials announced a new pollution 
enforcement policy that seemed likely to critically weaken the pending 
lawsuits. By year's end three more of the agency's top enforcement 
officials resigned. ``The rug was pulled out from under us,'' one of 
them, Rich Biondi, said.
    The new rules evoked fierce opposition, though, as 14 States sued 
to block the change. In December, a Federal appeals court stayed their 
use, pending further arguments. EPA officials said they put the new 
enforcement policy on hold until the court challenge is resolved.
    The Administration's goal now is to expand the use of a more 
flexible ``cap and trade'' regulatory system created in the early 
1990's that worked with notable success to combat acid rain. It lets 
utilities buy and sell credits that give them a pollution allowance. 
The number of credits available nationwide shrinks over time, creating 
a cap to ensure that pollution levels decline. Late last year, 
Administration officials announced plans to move to the new cap-and-
trade system by revising regulations, rather than pressing for a new 
pollution bill, as Mrs. Whitman had envisioned.
    Under the Administration's plan, nationwide sulfur dioxide 
emissions from power plants would fall to 5.3 million tons by 2015, and 
nitrogen oxide emissions to 2.2 million tons, according to EPA 
estimates. Those would be reductions of 51 and 55 percent, 
respectively, over levels in 2001.
    A recent Administration move to control diesel emissions has drawn 
praise from environmentalists. But in December, officials set off a new 
controversy by proposing a cap-and-trade approach for another 
pollutant: emissions from coal-fired power plants of mercury, which can 
cause neurological damage to humans. Instead of starting to curtail the 
emissions by 2007, as was widely expected, the proposal would give 
utilities until 2018 to make significant cuts.
    Many environmentalists and some former EPA officials said that 
while the proposed pollution cuts are substantial, they give industry 
more time to make reductions than existing law. The critics contend 
that it was foolish to weaken the pollution lawsuits without extracting 
anything in return.
    ``They are packaging this as a pollution cut, but in fact it is a 
pollution delay imposed on a program that the Clean Air Act requires to 
go faster,'' said Dave Hawkins, a lawyer for the Natural Resources 
Defense Council in Washington.
    What is clear is that the energy industry is satisfied with the way 
the Bush Administration has gone. ``Cost-effective, and effective, are 
reasonable ways to describe the Bush Administration's clean-air 
policy,'' said Mr. Segal of the electricity lobbying group. ``The 
Administration has a lot to be proud of on its air policy.''
    Senator Wyden. That, of course Mr. Chairman, was before 
your watch, and I understand it and I am not going to get into 
that. But the mercury rules do go into effect in your watch. I 
have to tell you, I am very troubled by what has come out that 
indicates that essentially something like 12 paragraphs of what 
industry has proposed were essentially enacted verbatim. Now, I 
do not think this happens by osmosis. How does this take place? 
Do folks at the agency essentially invite these kind of 
powerful lobbies to basically kind of cut and paste an 
operation that the agency will enact? That was on your watch, 
the mercury rules. When the industry proposal is included 
almost verbatim in what the agency finally comes out with, that 
is pretty troubling. So I would like your reaction to that.
    Administrator Leavitt. Senator, I do not know how that 
happened, but I will tell you this. Ultimately what is 
important when we finalize the rule will be the policy. I am 
very proud of the fact that for the first time in American 
history we are going to be regulating mercury from powerplants. 
I want to tell you, when the rule is finalized, we will do it 
in a way that will reduce mercury by the maximum level we can, 
and do it as fast as we can. Because Senator Clinton is 
absolutely correct, it is a dangerous neurotoxin. It needs to 
be reduced. It needs to be responded to and we will respond to 
it in the way that is the most aggressive possible. I am proud 
to say under my signature it will be done for the first time in 
the history of this country.
    Senator Wyden. It is a dangerous problem, but it is also 
dangerous practice to enact an industry wish list into law. I 
hope you will try to find out how this happened because again, 
what I am concerned about is a double standard in terms of 
environmental protection. Public interest groups do not get 
access to that. Members of this committee get treated like 
second-class citizens with respect to access to information. We 
basically have to go out and file Freedom of Information Act 
requests to find out what is going on on key environmental and 
science issues, but it sure looks like these powerful lobbies 
have a glide path to the industry's front door.
    I hope you will find out what is going on and we will get a 
final proposal that is in the public interest, rather than 
something that basically takes what industry has said verbatim 
and enact it into law. I am a little surprised that you do not 
know how that happened, because that is something on your 
watch. It is one thing about a New York Times story that 
happened before you came, but this is on your watch. I will 
tell you, I find it very troubling and it is why I think that 
the agency seems to be writing a textbook case for how you 
weaken some of these environmental laws.
    Let me use the Portland situation to address my next 
concern about this Freedom of Information Act approach that the 
agency is taking. As you know, we have been trying for months 
and months to find out how the agency will deal with problems 
in Portland relating to sewer overflow. This situation in 
Portland illustrates exactly what you tried to do for years 
with Governor Kitzhaber, to try a collaborative kind of 
approach, to reward good corporate citizens.
    We can't get even information with respect to what is going 
on out there because of the position the agency is taking with 
respect to the Freedom of Information Act. I think what the 
agency is doing on the Freedom of Information Act is contrary 
to the law. The Freedom of Information Act was never intended 
to justify withholding information from the Congress. That is 
what the agency is doing now. So what is going on in Portland 
is important not just to my constituents, but I think it also 
sets a very dangerous precedent for how we are going to address 
these issues on a national basis.
    So why don't you tackle this issue on both particulars. 
First, how is it that the agency arrives at this bizarre 
position with respect to the Freedom of Information Act that I 
think is going to stultify debate; and second, how you are 
going to respond to this Portland situation. We talked about it 
months and months ago. You have a good man sitting next to you 
who has been a career person. I regret to say I am going to 
hold up his appointment until we get access to this information 
and get to the bottom of the situation with respect to the 
Freedom of Information Act.
    Administrator Leavitt. Senator, you deserve to have the 
information. I have here a box that is a down payment on 16 
linear feet of information that is being delivered to your 
office. We intend to go through with your staff what it is that 
you need and deserve to have. Our purpose is to give you the 
information that you deserve and that you need to have.
    Second, may I just say that Portland is among a number of 
communities, many, some of our largest communities in the 
country who are struggling to work through this very difficult 
problem. It is the same problem that has been spoken of in 
Ohio, in Kentucky, in Pennsylvania and many others where we are 
working on this combined sewer overflow and infrastructure 
problems.
    We will enforce the law, but we will work for compliance. 
The better way principle is to achieve compliance, and enforce 
the law. We will do both. I do not think you would expect any 
less of us.
    Senator Wyden. Well, it looks like I will not have to go to 
the gym today because I will get to do some weightlifting.
    Administrator Leavitt. Heavy lifting for you.
    Senator Wyden. That is certainly constructive and welcome 
and I appreciate it.
    Take the second part of that question with respect to the 
Freedom of Information Act.
    Senator Inhofe. Would you mind waiting until the next round 
for that question, because you have gone over about a minute 
and a half now. We have other members.
    Senator Wyden. I just wanted to give the Administrator a 
chance. It looks to me like he is saying that the agency will 
not use the Freedom of Information Act in the future to deny 
Members of Congress access to information. I want to give him a 
chance to say something.
    Administrator Leavitt. Our purpose is to do all we can to 
supply Members of Congress with the information they need and 
deserve.
    Senator Wyden. Thank you, Mr. Chairman.
    Senator Inhofe. Thank you.
    Senator Allard?
    Senator Allard. Thank you, Mr. Chairman.
    First of all, I do not understand the accusation that is 
being made by the Senator from Oregon that it is an industry-
driven process, because as I understand it, the industry is 
divided. You have soft coal and you have hard coal, and those 
areas that produce soft coal are having problems with those 
that have hard coal. Mercury is a serious problem. We need to 
treat it seriously. But I do not see any consolidation of the 
industry on this, and there is a lot of science yet that has to 
be worked out.
    Some types of mercury are metabolized within the 
environment differently than other types of mercury. Depending 
on the type and how it gets metabolized within the environment 
also depends on the risks that it might be to human health. I 
think maybe that needs to be made a part of the record. I can 
understand where maybe certain parts of the industry would want 
to have a say in the regulatory process, but you have the other 
part over here that has probably taken a completely different 
position. We know that soft coal does more to pollute the air. 
We know the hard coal does less. We know that mercury is a 
great problem in hard coal than it was in soft coal as it gets 
metabolized in the environment. So there are a lot of tradeoffs 
that have to be done there.
    I think this is a very difficult issue. I do not think it 
is a simple issue. There has to be a lot more research and 
science on it, and maybe we need to focus on that before we 
come up with any decision. I just want to make that a part of 
the record.
    I would also like to give you an opportunity to tell us 
what your top priorities will be this year and what you would 
like to see happen the first year.
    Administrator Leavitt. Senator, I am pleased to do that. I 
have now been in service 125 days. During that period of time, 
we have accomplished some important things. I think we have 
initiated as an agency and as a country the most productive 
period of air quality improvement in the history of our Nation. 
That comes in putting forward a suite, an entire suite of air 
quality improvements. Already mentioned today has been our 
effort to clean up 450,000 of the Nation's school buses through 
the President's initiative on diesel.
    Second is that we will be finalizing in April the most 
stringent rules on diesel on the planet. That black puff of 
smoke that we have become accustomed to seeing both on off-road 
and on-road will disappear over the next 10 years because we as 
a Nation will finalize not just changes in the way engines are 
built, but also in the way our fuels are refined.
    We have also been busy about implementing the ozone 
standards. Again, the highest standards in our Nation's history 
focused on those who have breathing disorders, such as asthma 
that has been mentioned by Senator Boxer. Our intention is to 
enforce those standards that we are now moving through high 
national standards, while providing for neighborhood strategies 
in doing so.
    We are also regulating, as you have already indicated, 
mercury from powerplants for the first time in our Nation's 
history. Our goal is to reduce that neurotoxin in a way that it 
will not in fact find its way into the waters of the United 
States and into fish and into pregnant mothers and fetuses. 
Mercury is a serious toxin, one that we are working at.
    Finally, the centerpiece, the Interstate Air Quality Rule, 
while recognizing still that Clear Skies is the preferred way 
to do it. Knowing that our communities are going to be 
struggling to meet these ozone standards, I have proposed the 
implementation of the interstate air quality rule, which will 
reduce by 70 percent NOx and SOx over the next 15 years, more 
tons in a faster time than at any period in our history. The 
Rule what I believe to be and referred to earlier, as the 
better way, using cap and trade strategies, using the power of 
the marketplace to motivate people not to evade the standards, 
but to go beyond the standards in cleaning up the air.
    It is an exciting opportunity for us as a Nation and one 
that I am grateful to have. I have appreciated the support of 
this committee in being able to have the opportunity to do 
that.
    Senator Allard. I think that many of us that want to see 
the environment cleaned up recognize that there is a cost, 
there is a built-in cost in what you are proposing and it is 
not easy to make those kind of proposals to clean up the 
environment. You have to balance. For example in energy, we are 
looking at extremely high costs in energy. And we are facing, 
particularly as far as natural gas is concerned, because there 
have been so many powerplants convert to natural gas. Now, the 
cost of natural gas has gone high because of the limited 
supplies that we have domestically.
    So I know that these are not easy tradeoffs that you have 
to make, and I compliment you for showing some leadership on 
that.
    The one thing that sort of fascinated me on your 
confirmation is you talked about this concept or principle of 
en libra. You sort of dwelled on that during your confirmation 
and talked about it to a certain degree. How are you applying 
this now to the Environmental Protection Agency?
    Administrator Leavitt. Some of the principles of en libra, 
which means to move toward balance, national standards with 
neighborhood solutions. In implementing the ozone standard, 
that is precisely what we are using: stringent national 
standards, with neighborhood solutions rather than 
polarization. We are looking to work with communities in 
collaboration.
    I met yesterday with the State environmental director 
leadership. I am happy to report to you that those partnerships 
have never been stronger. There are many different ways. I know 
the time is up, but I will just finish with this. The President 
of the United States gave me this charge in my first Cabinet 
meeting. He said, Mr. Administrator, every time you come here I 
am going to ask you four questions: Is the air cleaner?; is the 
water more pure?; is the land better cared for?; and are you 
doing it in a way that will keep us competitive as a Nation? 
That is the charge to find that balance and that is the 
productive center we are working to find at the Environmental 
Protection Agency.
    Senator Allard. I appreciate your short response. We 
certainly do not want to irritate the chairman here, so thank 
you.
    Senator Inhofe. Thank you, Senator Allard.
    Senator Boxer?
    Senator Boxer. Mr. Administrator, seeing that box you are 
giving to Senator Wyden, if it has everything in there that he 
wants, that is a good change from the past, because it has been 
tough to get information.
    I want to ask you about children again. I am going to ask 
you about things that happened under your watch, because I do 
not hold you responsible for anything before that. We have many 
scientific reports from universities. We have had statements 
from EPA itself in the past that children are in fact more 
vulnerable to the effects of environmental contaminants than 
adults. In your report, EPA's 2003 report, America's Children 
and the Environment, you State that children, quote, ``may be 
more vulnerable to the effects of contaminants.''
    I am concerned about this. Have you changed EPA's position 
on whether children are more vulnerable? Do you think they are 
more vulnerable or they may be more vulnerable?
    Administrator Leavitt. Senator, it is very clear to me that 
a smaller person is affected differently than a large person in 
many cases, and that there are differences.
    Senator Boxer. As a small person, I do not think it is in 
stature so much as that they are developing and also they tend 
to play around on the ground and they put things in their mouth 
from the ground, et cetera. So you say there is no change in 
position on EPA.
    Administrator Leavitt. The 2003 report, I am not familiar 
with that direct language. I want to just use an example. I did 
visit Tar Creek with Senator Inhofe. I saw there huge piles of 
chaff that were piled from lead mines. I went to a home near 
one of those piles. We climbed all the way to the top of it, 
Senator. I asked standing on the hill, how did this get 
ingested into the bloodstreams of children. He said, the 
children used to play on these piles.
    Senator Boxer. Right. Exactly.
    Administrator Leavitt. And they would play on them and they 
would get the dust, and then they would put it on their face 
and put their hands in their mouth. It began to ingest and it 
had a disproportionate impact.
    Senator Boxer. I hate to cut you off, but my chairman is 
very tough. So I am glad we seem to agree that children are 
more vulnerable and in your opinion, there is no change in 
EPA's position about children being more vulnerable.
    Administrator Leavitt. There has been no change in my 
position on that point. I do not want to respond to EPA's 
because I am not specifically knowledgeable about what you are 
referring to.
    Senator Boxer. Alright, then we are going to need to 
continue to talk. I am very happy we agree personally, but I 
want to know about the Administration's position.
    Administrator Leavitt. I am happy to submit for the record 
whatever would be helpful to you to understand.
    EPA has not changed its position. The Agency position has 
been that, while we believe that for the most part children are 
more vulnerable to contaminants, there may be cases where this 
is not the case. Therefore, we generally say the children may 
be more vulnerable. This is consistent with the first 
children's indicator report ``America's Children and the 
Environment: A First View of Available Measures'' (December 
2000) states ``Children may be affected by environmental 
contaminants quite differently than adults, both because 
children may be more highly exposed to contaminants and because 
they may be more vulnerable to the toxic effects of 
contaminants''.
    Senator Boxer. That would be excellent.
    On the mercury issue, I want to ask you about this. In 
December 2003, EPA's final rule setting standards for mercury 
emissions from chloroalkalide plants was published in the 
Federal Register. To cut to the chase, we know there is no safe 
level of mercury in the blood. We know that 50 percent of women 
of childbearing age in the U.S. have at least one part per 
billion of mercury in their blood and we know the ramifications 
of that on fetuses on children.
    Now, in the rule in the Register, in talking about the 
rule, rather than outline steps the EPA will take to regulate 
these emissions, because apparently there are missing 
emissions. There are more than 65 tons of mercury a year that 
is lost, deemed unaccounted for. The statement in the Federal 
Register is, EPA said the situation is, quote, ``somewhat of an 
enigma,'' and in the end, did not really in this rule set 
standards of how people should achieve the maximum reduction. 
Basically, it was a good housekeeping rule. You have to look; 
you have to see.
    And you are being sued, not you personally, the EPA, for 
this. I understand the first papers were filed, because there 
is really no regulation. So how do you justify saying EPA says 
about this lost mercury, it is somewhat of an enigma. This 
seems to be a cavalier attitude taken by EPA regarding its 
inability to determine where this 65 tons of mercury goes each 
year.
    So don't you have a responsibility to know where that 
mercury is going and to outline how you are going to figure it 
out, rather than say it is an enigma?
    Administrator Leavitt. Senator, what isn't unclear at all 
is our focus on reducing it. We have reduced it as a Nation 
among our municipal waste burning facilities by some 90 
percent. We have done the same thing with our medical waste. We 
are now focused for the first time as a country on the largest 
emitter, which would be coal-fired powerplants. We intend to 
reduce it by some 70 percent over the course of the next 15 
years.
    Senator Boxer. I know. I know, my friend. I know. That was 
not my question, but we will just let it pass.
    If I could just ask one quick question here on polluter 
pay. I am very happy to hear you say polluter pay is the way to 
go. Well, guess what? The polluter tax is no longer. When 
Marianne Horinko was the acting head, I asked her. She said at 
that time, well, we do not need the tax; we still have enough 
money; we are robust. Her exact quote was when I pressed her on 
it, ``I am certainly not ruling out the tax. The Administration 
this fiscal year felt that in the 2003 budget, we still had a 
relatively robust funding source that we did not need to 
propose it, but we will look at that again in 2004 and see if 
we need to revisit.''
    We are out of Superfund. The polluters are not paying, Mr. 
Administrator. One-third of the sites, they are off the sites. 
There is nobody to go after. Will you support Senator Chafee 
and I and try to get this polluter fee back on the books?
    Senator Inhofe. Please respond for the record.
    Senator Carper?
    Senator Boxer. Yes or no? It doesn't take long. Is it a yes 
or a no?
    Administrator Leavitt. Senator, what could be most helpful 
to us would be the $150 million additional dollars that the 
President has proposed.
    Senator Boxer. Sure, get it from the taxpayers, not the 
polluters, sir. That is not right.
    Administrator Leavitt. That will likely be decided above my 
pay grade. It will be here with the Members of Congress.
    Senator Boxer. I take it as a no.
    Senator Inhofe. Senator Carper?
    Senator Carper. Governor Leavitt, earlier in the question 
and answer period, I think I heard Senator Voinovich say 
something to the effect that maybe there could be a compromise, 
something in between where Clear Skies is with respect to 
reducing air emissions, and where Senator Jeffords' proposal 
was. I would just remind my colleagues that there is an 
alternative. I would remind my friend, Senator Voinovich, that 
the alternative is one that Senators Alexander and Chafee and 
Gregg and I introduced about a year ago. It is a four-pollutant 
bill. It is one that happens to embrace cap and trade. It is 
one that happens to embrace harnessing the power of the 
marketplace to reduce emissions of all four pollutants. I would 
again bring it to the attention of my colleagues and invite 
their support, and certainly that of my friend, the 
Administrator.
    Governor, last summer your staff provided me with the 
results of their analysis of the multi-pollutant control bill, 
the bill I just discussed. We call it the Clean Air Planning 
Act. Recently, the data in support of that analysis was also 
provided. I appreciate the hard work of your staff. Anybody who 
happens to be here who was involved in that, I express my 
thanks to you as well. I appreciate the work of your staff and 
the timely response in providing that data.
    What it shows is that EPA's modeling suggests that our 
Clean Air Planning Act is better for public health and the 
environment than either Clear Skies or the recently proposed 
rule that you have mentioned, the interstate air quality rule. 
Our Clean Air Planning Act reduces sulfur and nitrogen oxide 
pollution further and faster throughout most regions of our 
country. It provides some $50 billion per year more in public 
health benefits by the year 2020. Yet EPA's own analysis shows 
that the Clean Air Planning Act costs only about 2 percent more 
than Clear Skies to implement over a 20-year period.
    I was just wondering, can you help me? Really, can you help 
us to understand why EPA is proposing to reduce pollution 
through what I believe is a costly and burdensome regulatory 
path, when we do have a solution, a compromise solution, that a 
number of us believe is much better for our country, but costs 
only slightly more to implement.
    I would remind you that in your opening statement I think 
you said, I know this, you said that you are interested in 
promoting policies that are faster and better. We believe that 
our approach is just that.
    Administrator Leavitt. Senator, as I have indicated, we 
clearly believe a legislative approach to this is superior to a 
regulatory approach and we welcome that discussion as to how we 
can move the discussion forward legislatively. In the meantime, 
I have filed a proposed rule that will result in the most 
productive period of air quality improvement in our Nation's 
history, that will put some $50 billion of improvement of new 
equipment on old powerplants, that will allow communities 
throughout the country which have been unable to meet our ozone 
standards, the highest, most stringent standards we have ever 
had as a country, to be met. That is my objective, clean the 
air and to do it in a way that will allow us to remain 
competitive as a Nation.
    Senator Carper. I want to talk just a moment about mercury. 
We have had sitting at this table where each of you are 
gathered today, witnesses, one of whom is from a company called 
WL Gore their ability to reduce mercury emissions developed in 
their own laboratories, from powerplants, by as much as, they 
believe, 90 percent. That technology was taken to EPA's 
facilities in North Carolina.
    This is not something we are talking about developing in 5 
years or 10 years or 15 years. This is technology that they 
believe is ready to be implemented today. You had the 
opportunity to test it in a more real-world setting. I was 
wondering if you could just share with us what you understand 
to have been the results of that test.
    Administrator Leavitt. The technology you refer to is 
referred to as ACI, or activated carbon injection. It is 
precisely the technology that we utilize for reducing mercury 
emissions from municipal waste facilities and medical waste by 
some 90 percent. There is great optimism on our part that it 
can be applied to large-scale coal-fired powerplants in the 
future and that it will allow us, in fact we are depending on 
it, based on our proposal, to reduce it substantially in the 
future.
    The issue is, when will it be ready? I brought to the EPA 
the best engineers, the best scientists I could find within EPA 
and said to them, tell me how soon it can be available. They 
informed me, and you made allusion to this, that it has not yet 
been used on a full-scale coal-fired powerplant. It has been 
tested for short periods of time and it has shown promising 
results. This is a technology that cannot be simply purchased 
and put on every powerplant. It is going to take some time to 
implement it.
    The rule that I will be finalizing this year, I can assure 
you will accelerate the implementation of that technology as 
rapidly as we can, because our interest is in reducing mercury. 
My job is to find out what is real and to put it into rule, not 
to simply take what someone says they think they might do and 
ask the American people to invest tens of billions of dollars. 
We will implement it. We will do it as rapidly as it can be 
done, because one thing there is no disagreement on, that is 
that mercury is a dangerous neurotoxin, it needs to be reduced, 
and we need to do it as rapidly as we can, and that coal-fired 
powerplants are the largest emitter of it. For the first time 
in our Nation's history, we are going to do just that.
    Senator Carper. Thank you.
    Senator Inhofe. The time has expired.
    Senator Clinton?
    Senator Clinton. Thank you, Mr. Chairman. I apologize for 
my voice.
    Administrator Leavitt, I think that the problem is that 
there is so much information available about mercury that is in 
the public record. I would ask consent to include an article 
from the National Journal dated February 14 entitled, ``The 
Next Arsenic.''
    Senator Inhofe. Without objection.
    [The referenced document follows:]

             [From the National Journal, February 14, 2004]

                            The Next Arsenic
                           (By Margaret Kriz)

    In December, Mike Leavitt, the newly sworn-in Administrator of the 
Environmental Protection Agency, signed a controversial proposal to 
begin controlling the mercury that goes up the smokestacks of the 
nation's more than 1,100 coal-fired power plants. To delay the economic 
impact of the proposed restrictions, Leavitt suggested scrapping a 
Clinton Administration effort that was on track to cut emissions 
beginning in 2007. Instead, Leavitt's plan would give industry until 
2010 to begin complying and until 2018 to make major reductions.
    The mercury proposal is being compared to the Bush Administration's 
failed 2001 attempt to relax the arsenic-in-drinking-water standards 
that had been proposed at the end of the Clinton era. That Bush 
Administration effort was shouted down by furious environmentalists. 
Now, with the public given 1 year to comment on the proposed mercury 
rules, Leavitt's plan to postpone actually restricting smokestack 
emissions of mercury has sparked a similar outcry.
    Mercury, which can cause severe neurological damage, poses its 
biggest threat to fetuses and young children. Airborne mercury from 
coal-fired power plants poses a danger to human health chiefly when it 
falls into waterways. Once in the water, mercury reacts with bacteria 
to form methyl mercury, which contaminates fish. People ingest the 
mercury by eating the poisoned fish. EPA data released this month 
indicate that 16 percent of U.S. women of childbearing age (16 to 49) 
have enough mercury in their bloodstream to endanger a fetus. That 
percentage is double the government's previous estimate.
    Hoping to turn the proposed lag time for the mercury rules into 
such a political liability that the Bush Administration will back 
down--as it did on arsenic--the Sierra Club timed a blitz of newspaper 
and television attack ads in 11 major media markets to coincide with 
President Bush's State of the Union address on January 20. The 
president made no mention of his environmental policies in his speech.
    The Democratic presidential candidates are also taking aim at the 
Bush Administration's approach to mercury regulation, accusing the EPA 
of siding with the coal and electricity industries at the expense of 
human health. Front-running Sen. John Kerry of Massachusetts points out 
that mercury contamination has become so widespread that 45 States 
advise pregnant women and small children not to eat fish from rivers or 
lakes.
    Meanwhile, frustrated by years of Federal inaction, Connecticut, 
Massachusetts, and New Hampshire have adopted tough limits on mercury 
emissions from power plants within their borders, And New Jersey is 
expected to put the final touches on rules requiring its 10 coal-fired 
plants to cut mercury emissions by 90 percent by 2007. Pennsylvania 
Gov. Ed Rendell recently called for a State fee on industry emissions 
of mercury. And on February 4, a group of Midwestern State legislators 
announced a new regional effort to reduce mercury pollution front power 
plants in Illinois, Iowa, Michigan, Minnesota, Ohio, and Wisconsin. The 
lawmakers, members of the National Caucus of Environmental Legislators, 
said they were launching the initiative ``because of the failure of the 
Federal Government to take effective action against the toxin.''
    Moderate Republicans in Congress are also sounding the alarm. In 
January, 10 GOP lawmakers wrote Bush, charging that the EPA proposal 
fails to protect communities front the mercury emitted by nearby power 
plants. And 11 New England Senators, including Republicans, Democrats, 
and Independent James Jeffords of Vermont, have written the EPA to 
demand stricter, more-immediate controls.
    In recent months, the White House has worked to improve its 
environmental image. Bush's appointment of Leavitt, a popular Utah 
Governor, to head the embattled EPA was part of that effort. But the 
mercury proposal is growing into a public-relations problem for Bush.
    ``There is a case to be made that mercury is the new arsenic,'' 
said David Mcintosh, a lawyer with the Natural Resources Defense 
Council. In 2001, public outrage--fanned by environmental groups--over 
the EPA's effort to scale back proposed controls on arsenic severely 
damaged Bush's public standing on environmental issues.
    The arsenic saga began in March 2001, when then-EPA Administrator 
Christie Whitman shelved a Clinton Administration proposal to impose 
strict new limits on arsenic in drinking water. She recommended 
controls that were more stringent than the existing arsenic standards 
but not as tough as the Clinton plan. The backlash among 
environmentalists was immediate and furious. By October, the EPA had 
retreated and accepted the Clinton-era controls.
    Now, some political and environmental analysts are predicting that 
the mercury dispute could play a role in this fall's Presidential 
contest, particularly in battleground States with serious contamination 
problems. The voters most directly affected by mercury regulation are 
women of childbearing age, noted John Stanton, who was the EPA's 
legislative counsel under President Clinton and now is vice president 
of the National Environmental Trust. ``That's not a small demographic 
during the election, particularly if you're White House senior advisor 
Karl Rove and you're looking for a way to close the gender gap.''

                              HUMAN COSTS

    The grave human consequences of mercury poisoning first came to 
light in the 1950's, when fishing families in Minamata, Japan, began 
suffering a debilitating nervous condition from eating fish 
contaminated by mercury that a chemical factory had dumped into 
Minamata Bay. Thousands of people were sickened; hundreds died.
    Best known as the silvery liquid in old-fashioned glass 
thermometers, mercury is widely used in the production of medicines and 
chemicals, such as chlorine and caustic soda. Before its environmental 
hazards were well understood and government restrictions were imposed, 
the metal was also used in making paint and batteries.
    Concerns about mercury date from the 19th century, when many hat 
makers became crazed, much like the Mad Hatter in Alice's Adventures in 
Wonderland, after long using a mercuric compound to shape wool felt 
hats.
    The Food and Drug Administration warns pregnant women, women of 
childbearing age, and children to limit their Consumption of fish to 12 
ounces per week and to avoid eating any shark, swordfish, king 
mackerel, or tilefish. (According to a recent EPA analysis, 630,000 of 
the 4 million babies expected to be born in the United States this year 
could have mercury blood levels at or above the agency's safety limit.)
    Fetuses and small children may not be the only ones in this country 
suffering harm to their health from mercury-contaminated fish. In a 
2001 study published by the National Institutes of Health, San 
Francisco physician Jane M. Hightower found that 82 of 89 patients who 
ate a lot of fish had high levels of mercury in their blood. Some had 
symptoms of mercury poisoning, such as hair loss and memory problems. 
Hightower's study found that patients who reduced the fish in their 
diet lowered their mercury levels.
    The FDA is revising its mercury advisory to warn that some types of 
fish, particularly canned albacore tuna, tend to be dangerously 
contaminated with mercury. The agency's Food Advisory Committee argues 
that even the proposed new advisory would not provide consumers enough 
information about mercury contamination in raw tuna and in other types 
of canned tuna.
    Over the years, concern about mercury's effects on human health 
caused Federal regulators to restrict all major industrial sources of 
mercury pollution--except far coal-fired power plants. That exception 
is huge; the power plants emit 48 tons of mercury a year, making them 
the chief artificial source of mercury pollution.
    Environmental advocates and health care groups charge that the 
Federal Government has avoided clamping down on mercury emissions from 
plants because of the political clout of the $250 billion electric 
industry. During the 2000 campaign cycle, the electric power industry 
donated $19 million to congressional and Presidential campaigns, 
according to the Center for Responsive Politics. Two-thirds of that 
amount went to Republicans.
    The proposal that EPA Administrator Leavitt unveiled in December 
represents the first Federal effort to limit mercury emissions from 
coal-fired power plants, which produce half of the nation's 
electricity. The proposal calls for creation of a mercury ``cap-and-
trade'' program, which would allow electric companies to buy and sell 
pollution ``credits.'' Rather than mandate that every power plant cut 
mercury emissions to a certain level, the swapping program would give 
credits to plants that cut mercury emissions to less than a prescribed 
level; those plants could then sell the credits to companies willing to 
pay to avoid making reductions of their own.
    The EPA regulations would give the electric-power industry until 
2018 to cut its total annual mercury emissions to 15 tons--a 69 percent 
reduction. Time industry would have to meet an interim limit of 34 
tons--a 29 percent reduction--by 2010. Agency officials say that the 
industry would automatically meet the 34-ton target if power companies 
installed pollution-control equipment that would be needed to comply 
with the Bush Administration's proposed limits on emissions of sulfur 
dioxide and nitrogen oxides.
    The EPA's critics point out that the emissions-trading plan would 
allow the worst polluters to buy credits rather than reduce their 
mercury discharges. And the rule potentially could worsen ``hot 
spots,'' geographical areas with dangerously high concentrations of 
mercury in their waterways. Opponents call the Administration's 
approach inadequate and note that the EPA's previous analyses had 
indicated that the power industry could meet. much stricter standards 
with technology that is already available. And both environmentalists 
and industry lobbyists agree that the agency's plans to apply a never-
before-used part of the Clean Air Act to establish the emissions-
trading program is likely to trigger years of legal challenges.

                      SAFEGUARDING THE FOOD CHAIN

    The battle over the Environmental Protection Agency's approach to 
regulating the mercury emitted by coal-fired power plants is awash in 
competing scientific claims over just how much the Federal Government 
should do to safeguard the nation's food chain from mercury pollution.
    Critics of the EPA's proposal cite a recent Florida study 
indicating that substantial reductions in the amount of mercury pumped 
into the State's air resulted in dramatic improvements in the 
environment. That study began in 1989, when Florida State scientists 
discovered alarmingly high levels of mercury in wide-mouth bass in the 
Everglades. Further studies proved that the fish were being 
contaminated by mercury falling into the waterways from nearby 
incinerators. Worried State officials cracked down on the incinerators. 
By late 2003, the State reported that mercury levels in its fish had 
plunged by as much as 75 percent.
    ``It's remarkable, It's much faster than we would have thought,'' 
said Tom Atkeson, coordinator of Florida's mercury-control program.
    The Florida study is widely touted as proof that curbing local 
sources of air pollution can lower the concentrations of mercury in 
flab caught nearby. Opponents of the EPA's proposal say the lesson to 
be learned from Florida is that Federal regulators should impose strict 
mercury controls on every coal-fired power plant--the nation's leading 
source of mercury pollution--and should abandon their proposal to allow 
power companies to trade mercury-emission credits on a nationwide 
basis.
    But Atkeson cautions against reading too much into the Florida 
results. He said that even if power-plant emissions are lowered, not 
all regions of the country would see benefits as quickly as Florida did 
from reducing the pollution from medical and trash incinerators. The 
incinerators emit a type of mercury that is likely to fall nearby. By 
contrast, the mercury emitted by electric power plants varies, 
depending on the type of coal a plant burns and the plant's design.
    According to the EPA, of the 48 tons of mercury belched into the 
air by power plants each year, only 20 tons falls nearby.
    Industry officials who support the EPA proposal cite a recent 
report indicating that most of the mercury that falls to the ground in 
the United States comes from abroad. According to the Electric Power 
Research Institute, an industry-funded research center, the vast 
majority of the mercury that drops west of the Mississippi River comes 
from foreign sources, such as pollution in Asia, or from natural 
causes, such as volcanic eruptions. All sides agree, however, that 
Eastern States get most of their airborne mercury pollution from U.S. 
sources.
    Another EPRI report suggests that slashing mercury emissions from 
U.S. power plants would do little to benefit Americans' health. Leonard 
Levin, an air-pollution specialist at the institute, stressed that 
locally caught freshwater fish make up only a small part of the average 
American's diet. And, he said, the vast majority of the fish eaten by 
Americans comes from oceans or foreign waters.
    ``Even if freshwater fish responded to domestic changes in mercury 
emissions, fish in the oceans would respond in a much less detectable 
way,'' he said. ``They would respond only because a change in a U.S. 
source--like utilities--represented a change in the global pool of 
mercury,'' he said. ``But it's a much smaller fraction.''
    Therefore, Levin argues, it would be unwise to impose strict and 
immediate mercury controls on U.S. power plants: ``if you take a big 
[regulatory] step and there's no significant protection of public 
health that results from it, then it probably wasn't the right step.''
    However, foes of the EPA proposal say industry officials and the 
Bush Administration are basing their arguments on cost-benefit analyses 
that minimize the value of improving the health of the nation's 
environment and populace. They argue that lowering power-plant 
emissions would significantly benefit not only fetuses and children but 
also American waterways. ``Fish are the ultimate indicator of the 
health of the land,'' argued Chris Wood of Trout Unlimited. 
``Everything eventually finds its way into the river. And when you have 
warnings that say you can't eat fish because of the high levels of 
toxins, that's a problem we should do something about.''
    David Evers, executive director of the Biodiversity Research 
Institute in Maine, noted that some preliminary studies have linked 
mercury poisoning to declining populations of loons and other seabirds. 
He sees mercury contamination as a State, national, arid international 
problem.
    ``We need to deal with the global problem,'' he said, ``But before 
we do that, we need to clean up our own backyard. We can't just point 
fingers abroad.''--M.K.
    Bush Administration officials are fighting back. They insist that 
their 2018 goal for cutting mercury emissions by 69 percent is 
appropriate because, they say, the most advanced means of controlling 
the pollutant won't be available till then. Leavitt argues that the 
Bush Administration deserves credit for proposing the first-ever 
controls on mercury emissions from power plants. The Clinton 
Administration was sued twice by environmental activists before moving 
forward with mercury controls to comply with a consent decree. Even 
then, President Clinton didn't formally order the EPA to regulate 
mercury until days before he left the White House.
    ``Frankly, previous Administrations have put this decision off for 
a long time,'' Leavitt told National Journal. ``We made the decision 
that we were not going to walk away from it.''

                             RADICAL DETOUR

    The EPA's approach to regulating mercury is based on Bush's 2002 
legislative initiative to rewrite the Clean Air Act. Dubbed ``Clear 
Skies'' by the White House, that revision would set up cap-and-trade 
programs for emissions of mercury and nitrogen oxides, and lower the 
caps on the existing trading program for sulfur dioxide. The Clean Air 
Act's 1990 amendments, pushed through Congress by President George H.W. 
Bush, created an emissions-trading program that has curbed acid rain by 
targeting sulfur dioxide emissions. But the current White House would 
use the expansion of emissions-trading as justification for eliminating 
several parts of the Clean Air Act that many environmentalists see as 
essential.
    This Administration's effort to rewrite the landmark act hasn't 
gotten far. Congressional Democrats and GOP moderates want the 
emissions trading plan to include carbon dioxide, which is widely 
linked to global warming. But Bush has steadfastly refused to regulate 
carbon dioxide emissions. The only progress made on the bill so far 
came in June 2002, when the Senate Environment and Public Works 
Committee approved a version more palatable to environmentalists. 
Republicans killed that measure on the Senate floor. Now GOP leaders 
concede that they don't have the votes to get Bush's original package 
through the Republican-controlled Senate.
    While the White House air-pollution bill languished, the EPA was 
under two rigid legal mandates to regulate airborne mercury emissions. 
First, Clinton's December 2000 order directed the agency to develop 
mercury controls in keeping with Clean Air Act provisions governing 
hazardous pollutants. That part of the law requires emission limits to 
be based on the most advanced means available, otherwise known as 
``maximum achievable control technology,'' or MACT.
    Second, the EPA was under pressure from a 1994 legal settlement 
with the Natural Resources Defense Council, an environmental group that 
sued the agency for failing to regulate mercury despite its proven 
dangers. That accord required the EPA to propose a MACT standard for 
mercury by December 2003 and to take legal action on the rule a year 
later. Because the Clean Air Act gives companies 3 years to comply with 
any new pollution standard, the consent agreement appeared to mean that 
power plants would have to begin reducing mercury emissions by December 
2007. That's 3 years earlier than the Bush Administration proposal's 
deadline.
    As their regulators moved toward crafting the first mercury-
emissions limits, Administration officials hinted that they were 
considering tough controls. In December 2001, Jeffrey Holmstead, who 
heads the EPA's air-pollution office, reported that agency research 
indicated the technology was available to enable coal-fired plants to 
cut mercury emissions by an average of 90 percent by 2007. He released 
the findings at a meeting with electric-company CEOs sponsored by the 
Edison Electric Institute, an industry trade group. Holmstead noted 
that some facilities would have difficulty achieving such dramatic 
reductions, because of their design and the type of coal burned. 
Details of Holmstead's presentation were obtained by The National 
Environmental Trust under a Freedom of Information Act request. (In a 
recent interview, Holmstead said his 2001 conclusions were based on 
numbers ``that we sort of pulled out of thin air,'' adding that the 
presentation was designed to persuade industry officials to back the 
president's proposed overhaul of the Clean Air Act.)
    Others in the Bush Administration had also signaled that the EPA 
was on the verge of adopting a stringent mercury standard. Energy 
Secretary Spencer Abraham, in an August 2003 speech at a department 
lab, said the EPA would require ``as much as 90 percent mercury 
control'' by December 2007.
    In the end, however, the EPA took a radical detour. The proposal 
Leavitt unveiled would rescind Clinton's 2000 order requiring the 
agency to regulate mercury under strict MACT provisions. The EPA 
proposes instead to create a cap-and-trade program under a totally 
different, untested part of the Clean Air Act.
    The EPA's plan would allow power plants not only to buy and sell 
mercury credits but also to ``bank'' emission-control credits earned 
under the first phase of the program for use in phase two, which would 
begin in 2018. As a result, according to one EPA analysis, the industry 
would probably not meet the agency's 15-ton goal for 2018.
    In asking for public comment, the EPA sought reaction to two 
alternatives. One would require every power plant to cut its mercury 
emissions by 29 percent by the end of 2007, and the other would set up 
a mercury emissions-trading program based on MACT standards. The EPA 
made clear that it doesn't like either alternative.
    Because the Clean Air Act does not explicitly authorize the EPA to 
set up a trading program for mercury, regulators have had to do some 
fancy legal footwork to justify their proposal. Agency officials have 
asserted that they have broad authority to create an emissions-trading 
scheme under a flexible provision normally used to control new sources 
of air pollutants that are not extremely dangerous.
    The Bush Administration's unique interpretation of the law 
immediately came under attack. ``EPA developed a proposal to complement 
its legislative agenda, not to meet its legal mandate,'' argued Felice 
Stadler of the National Wildlife Federation. Rep. John Dingell, D-
Mich., a sponsor of the 1990 Clean Air Act amendments, warned the EPA 
not to stray far from traditional interpretations of those amendments. 
``Abrupt policy shifts that appear after more than 13 years of agency 
effort,'' Dingell wrote to Leavitt, ``do little to improve the public's 
confidence in EPA's ultimate decisionmaking apparatus.''
    The Edison Electric Institute and other traditional industry groups 
have cautiously praised the Bush Administration's mercury proposal. But 
some of the most-scathing criticism has come from within the industry. 
Clean Energy Group, a coalition of electric companies dedicated to 
reducing their industry's pollution, predicted that the EPA's proposal 
is destined to become entangled in protracted legal battles: ``The 
number of legal questions the proposals raise makes them look more like 
a law school exam question (with a premium on the number of legal booby 
traps that the student can identify) than proposed regulations.''

                         TRUSTING MARKET FORCES

    Agency officials say that the EPA's mercury cap-and-trade program 
was conceived late last summer, when Holmstead and his chief counsel, 
Bill Wehrum, were debating how to regulate mercury in a way consistent 
with Bush's effort to rewrite the Clean Air Act to rely more on market 
forces to reduce pollution. ``I had my statute book out, and Bill had 
his statute book out, and we started talking about other parts of the 
Clean Air Act that could allow us to create this sort of cap-and-trade 
system,'' Holmstead recalled in an interview, ``Bill remembered that 
there was another part of the law that gives ins authority to regulate 
emissions from existing sources.'' And that comment, Holmstead says, 
resulted in the agency's radical new approach to regulating mercury.
    Critics have drawn attention to the fact, first reported in the 
Washington Post, that parts of the EPA's mercury proposal read word-
for-word like the recommendations sent to the agency by the Washington 
law firm of Latham & Watkins, which represents several energy 
companies. Holmstead and Wehrum worked for the firm before joining the 
EPA. Holmstead dismisses the lifted language as merely an ``interagency 
mix-up'' that happened as the regulatory language bounced around inside 
the Administration.
    EPA critics also have serious substantive problems with the 
proposal--particularly with the cap-and-trade program, which they worry 
would create mercury hot spots around plants that buy credits to avoid 
installing new pollution control equipment. ``There is no guarantee 
that the coal-fired power plant in your backyard is ever going to put 
controls on, if it's more cost-effective for them to keep buying those 
pollution credits from a different company,'' noted Michael Bender, 
executive director of the Mercury Policy Project, a Vermont-based 
public-interest group. But Holmstead responds that no regional hotspots 
developed under the cap-and-trade program created by Congress in 1990 
to control acid rain. ``Based on our experience and our analyses,'' he 
said, ``we think you will get the greatest emission reductions where 
you have now the highest levels of mercury.''
    Despite those assurances, a recent report by the National Academies 
of Science warned that ``ecological hot spots'' can ``increase the 
number of persons exposed to pollution.'' The report, which praised the 
use of emissions-trading to make pollution control more affordable, 
suggested that cap-and-trade programs should allow trading only within 
geographical zones, to ensure that polluters in each region achieve a 
collective reduction and that a given pollutant doesn't become 
concentrated in any part of the country.
    Other criticism has come from within the EPA. Its advisory panel on 
protecting children's health criticized the agency's mercury cap-and-
trade proposal, arguing that the plan ``does not sufficiently protect 
our nation's children'' from neurological problems and learning 
disabilities caused by mercury poisoning. The panel, which consists of 
27 experts from State health agencies, industry, health advocacy 
groups, and universities, specifically charged that the proposed 
emissions-trading plan might create mercury hot spots.
    Agency officials say they chose the cap-and-trade approach because 
they wanted to avoid requiring all power plants to control their 
mercury emissions by the 2007 deadline that would have kicked in under 
the MACT provisions. Leavitt argues that the 2007 deadline would have 
been impossible to meet: ``On a best-case scenario, it became evident 
to me that you can't deploy this technology on a 2007 or 2008 timeline 
and expect to get large-scale reductions immediately.''
    If the EPA had proceeded with the 2007 deadline, Leavitt said, some 
power plants would have met the new pollution standards by switching 
from coal to natural gas. According to Leavitt, that would have caused 
natural gas prices to skyrocket. ``You can adopt any standard you will, 
but if the technology is not yet deployable, you're dealing with a very 
practical limit'' on what can be achieved, he said. ``And what will 
occur at that point is that people will begin to do fuel-switching.''
    EPA critics counter that the Bush Administration is ignoring the 
advances in mercury-control technologies. Jeffords's office found that 
at least five U.S. companies are developing technologies that can 
reduce mercury emissions by 60 to 90 percent: Those technologies are 
ready or will be within 2 years, according to that survey. Leavitt said 
that EPA engineers disagree with that assessment,
    Many East Coast States and some Midwestern ones are considering 
mercury-emissions standards far tougher than those proposed by the EPA. 
``No Governor in Connecticut, New Hampshire, Maine, New Jersey, or 
Massachusetts--which are all adopting stricter controls--is saying that 
they care so deeply about mercury and public health that they're going 
to kill off their economies,'' said Ken Colburn, executive director of 
Northeast States for Coordinated Air Use Management, an association of 
State air-quality agencies. ``What the Governors are saying is, ``We've 
seen that the technologies can be developed.''
    Jon Heinrich, a policy analyst with Wisconsin's air-quality 
program, said, ``We're pretty concerned that what EPA has come forward 
with is not a national rule that's going to help Wisconsin's mercury-
contamination problem in the near future.''
    But Quin Shea at the Edison Electric Institute said that many other 
States oppose tough mew mercury controls. ``I think that for every 
State like a Connecticut or a New Jersey, I could find two or three 
States that would disagree,'' he said.
    Nonetheless, S. William Becker, executive director of both the 
State and Territorial Air-Pollution Program Administrators and the 
Association of Local Air Pollution Control Officials, said the EPA's 
proposal will spur States and cities to get more aggressive: ``What I 
can predict with almost absolute certainty is that, if this EPA 
proposal is promulgated close to its original language, you will see an 
onslaught of actions at the State and local levels to replace or 
strengthen EPA's program. These programs will vary widely in scope and 
magnitude, and it will drive the industry limits.''
    Leavitt asserts that his agency's mercury proposal is taking a 
beating because of election-year politics. ``Others have the luxury of 
dealing with mercury in a political way,'' he said. ``I have an 
obligation to deal with it in a factual way.''
    But EPA critics argue that the controversy has political legs 
because mercury threatens the health of fetuses and small children in 
several States that will be key in November's election. According to 
the advocacy group Environmental Defense, the States with the most-
dangerous mercury hot spots are (in descending order of severity): 
Michigan, Maryland, Florida, Illinois, South Carolina, North Carolina, 
Pennsylvania, Texas, and Tennessee.
    Colburn of the Northeastern States' air-quality association argues 
that the mercury debate is catching public attention because it focuses 
on the age-old conflict between short-term economic gain and long-term 
public health, ``Every year those plants run without controls is 
another year of better cash-flow for the utilities,'' he said. ``And 
it's another year of mercury pollution accumulating in our waterways 
and poisoning our children.''
    Senator Clinton. There is also a lot of information about 
the rather tortuous path that EPA has trod in trying to get to 
the point where you are on the verge of this rule. It is very 
difficult in this kind of setting get questions answered, 
because they are complex questions and we do not have a lot of 
time. So on this particular issue, I would like to submit 
questions that go through in detail, because I think we need to 
clarify this. There is just such confusion. If we are going to 
start down a path that would do less than many of us think is 
possible, that even some of the EPA's own officials at one time 
thought was possible.
    I think we need to be very clear about what we are trying 
to achieve. I am still of the opinion that we not only could do 
much more for the environment by providing incentives of 
whatever kind to these very recalcitrant utilities, because 
there is a group of utilities that have already done the work; 
that have already put in the equipment. We are in a sense 
penalizing them because they went ahead and made the 
investments that were called on. The clean energy group within 
the utility industry is equally distressed because this looks 
like we are kind of changing the rules on them.
    So I still think we should look for some kind of incentives 
to get this over with and to employ people and to put together 
the technology. Just very honestly, I do not see that coming 
from your well-meaning effort that I think is designed to fit 
it into the Clean Air Act and do what is necessary to try to 
get something on the table. But it is putting off the problem 
way too long and has the potential for enormous legal 
challenges from those recalcitrant stubborn utilities that 
refuse to join the rest of the world in dealing with this 
problem. So this could be tied up in courts forever. It will 
employ a lot of lawyers. It is not going to make the air any 
cleaner.
    So I will submit some very specific questions, but I wanted 
to get a little parochial for a minute. Because New York has 
been an industrial State forever and been around forever, we 
have a lot of problems that we have inherited that are now 
coming to the forefront. In just one county that I would like 
to focus on for a minute, Dutchess County, New York, the home 
county of Franklin and Eleanor Roosevelt. We have as many at 10 
sites that have been contaminated by PCEs from manufacturing 
processes, mostly from the old IBM plants. We have also sites 
that are contaminated by TCE. We have well water that is 
polluted. The limited testing that has been done so far shows 
widespread contamination of this well water.
    We also know that where there is PCE contamination there is 
likely indoor air contamination. We learned that at the 
Endicott site outside of Binghamton, another IBM site. So I am 
going to be submitting some very specific questions about PCE 
and TCE sites.
    But today, there is a site called Hopewell Precision in 
East Fishkill, New York. There have been a number of calls, my 
Republican colleague Sue Kelly who represents that area, 
Senator Schumer, others have called for it to be included on 
the Superfund site. When the list of national priorities came 
out, it was not on the site, but I would like to ask you to 
evaluate that again. I would also like you to take a look at 
the Shenandoah Superfund site and several of the other PCE-
contaminated sites. We need some help. What happens is, we ask 
for help from the EPA; the EPA understandably says, well, go to 
the State. The State is overwhelmed. They come back and say, we 
need EPA help, and then we get kind of caught in the middle and 
we have these very serious hot spots of contamination.
    I think is also raises issues about whether the Superfund 
site list is adequate and whether we cannot afford to put more 
on, getting back to Senator Boxer's position. So I will also be 
submitting some very specific issues about these Dutchess 
County sites, but I would appreciate your taking a look at that 
and seeing whether there is something more we could do to help 
these communities.
    Finally, in your response on clean water, you made the 
reference that we wanted to be reducing demand for water use 
and that payments for clean water should fall on ratepayers, 
not taxpayers. What exactly did you mean by that?
    Administrator Leavitt. Senator, the gap on infrastructure 
is so significant that we as a Nation, in my judgment, will 
have to wrestle with what the components of a partnership will 
be. The national government clearly has a role. Taxpayers 
clearly have a role. The question is, how large is the role, 
and that is what this committee wrestles with now and wrestles 
with every year as we go about the task of determining what 
contribution we will make to the water loan funds.
    As a Governor, I wrestled with this issue because they are 
State revolving loan funds and the States make contributions. 
So the question is, does the water company who has the control 
of the system, and the local community can define how they want 
to do it, or do we make the decision at the national level and 
fund it through a national mechanism. That is the policy 
question I am raising, and I think it is not a new one.
    Senator Inhofe. Thank you, Senator Clinton.
    We are going to have a last round, since there are only 
four of us here, but we will confine it to the four of us, and 
that is for five more minutes.
    First of all, I know there is a difference of philosophy 
and of opinion, but we keep hearing polluter pays and polluter 
is not paying, and we need to have a polluters tax. I just want 
to restate it again, and I am sure I will again and again and 
again, this is not a polluters tax. This is a tax on business. 
Since we have had Superfund, of the potentially responsible 
parties, the PRPs, 70 percent of the cleanups have been paid by 
the responsible parties. In 2003, it was 87 percent.
    I just would admonish you every chance you get, Mr. 
Administrator, to make it very clear that this is not a tax on 
polluters. It is a tax on businesses who are already having 
very serious problems.
    In reviewing the portions of the spill prevention and 
control and countermeasures rule that is being promulgated, 
there are three specific constituencies that I am concerned 
about in Oklahoma. One is the air transport; one is the 
nation's farmers; and then last, the small oil producers. When 
I say ``small oil producers,'' I am talking about the marginal 
operators. I know that there has been an arrangement reached 
with the API and some settlement talks, but I would like for 
all of us to keep in mind some of the problems of smaller 
producers are not the same problems that you have with the very 
large producers.
    Now, I have often said, and the other two categories, the 
air transport and the farmers, they should not be a part of 
this anyway. In fact, I have a letter here that I sent to 
Administrator Whitman 2 years ago last month, where I talked 
about the air transport. It is transport, not storage, and that 
there is a serious problem treating it as storage. Should a 
spill occur, trucks would necessarily have to be close together 
and it could have devastating results.
    Having said that, what can you tell us about the relief the 
EPA would be providing for these two constituencies, the air 
transport and the farmers?
    Administrator Leavitt. Senator, I want to understand more 
clearly your question, but let me respond and see if I can get 
close to it, and you can redirect me.
    The interstate air quality rule is designed as a cap and 
trade system which essentially set a standard of where we are 
today and where we want to get.
    Senator Inhofe. OK. I am talking about the spill prevention 
and control and countermeasures proposed rule.
    Administrator Leavitt. OK. I thought when you said 
interstate, I misread you.
    Senator Inhofe. No, no.
    Administrator Leavitt. Why don't we ask Marianne Horinko, 
who I think might be able to respond specifically to your 
inquiry.
    Senator Inhofe. Let me just go ahead and take that for the 
record. That would be fine. I am concerned about it because I 
have written letters for over a 2-year period, believing that 
these should not be a part of that rule anyway, and before the 
train gets too far down the road I want to address that.
    The Spill Prevention, Control and Countermeasure (SPCC) 
regulation has been in effect since 1974, and was amended in 
2002. EPA extended the compliance dates in the 2002 rule by 18 
months, during which time the Agency has been engaged in 
settlement discussions to resolve litigation over the rule, and 
to analyze a number of issues raised by other members of the 
regulating community.
    EPA has an active dialog and exchange of information with 
representatives of the air transport and agricultural sectors, 
including a meeting with aviation sector representatives on 
March 23, 2004. Similarly we have received and are considering 
correspondence within the past week from representatives of 
agricultural sector.
    We are accessing specific means to address the issues 
raised by these groups. EPA has organized a major SPCC 
stakeholder meeting for March 31, 2004 to discuss its strategy 
and plans for implementation of the revised SPCC rule. A 
significant aspect of the meeting will be communication of the 
terms of settlement for the issues involved in the litigation, 
and EPA will also communicate clearly on the many other 
national issues of concern with the SPCC rule.
    Final decisions are being made now in preparation for the 
announcements EPA will make at this meeting; the complexity of 
the issues has required much coordination and we are not yet 
ready to announce decisions relative to the air transport and 
agricultural sectors. EPA is evaluating options to address the 
concerns these groups have raised, and will communicate its 
decisions during the March 31 meeting.
    The EPA is deliberating on another issue of great 
importance to the small oil producers, their inclusion in the 
stormwater phase two regulation. In December 2002, the EPA 
proposed to extend the deadline for small oil and gas 
construction activity to comply with stormwater phase two by 2 
years, to review the effect of the rule and what it would have 
on these sites. What progress has been made in reviewing the 
rule and the effect it might have on small producers?
    Of course, we have taken the position that they should not 
be covered under this in the first place because it 
specifically talks about construction, and they are not in the 
construction business, unless you say the construction of a 
well when it starts. Any thoughts about this or if it is 
something that you would like to respond to in the record. That 
would be fine.
    Administrator Leavitt. We would be happy to respond to the 
record, or I could have Ben Grumbles, who is the Acting 
Assistant Administrator for the Office of Water.
    An extension was proposed on December 2, 2002 and became 
effective on March 10, 2003. The extension runs for 2 years 
(March 2005). EPA is undertaking an economic analysis, to be 
completed in Fall 2004, to help determine the effects of the 
existing storm water regulations for small oil and gas 
construction activities. The analysis will help determine how 
best to proceed.
    Senator Inhofe. The reason I keep talking about the small 
producers is not just that we have so many in my State of 
Oklahoma, but when you look at the energy shortage and the 
problems we are having in America today, the small marginal 
producers, one statement that has never been challenged is that 
if we had all of the marginal wells flowing today that we have 
plugged in the last 10 years, that it would equal more than we 
are currently importing from Saudi Arabia. So it is a very 
important thing to me and very important to our State.
    Senator Jeffords?
    Senator Jeffords. Thank you, Mr. Chairman.
    I would just like to go to repeating a request here. As you 
know, Senator Inhofe and I sent a letter to you last week 
regarding my information requests that are still outstanding. I 
have shared with you, as well as Senator Inhofe and our staffs, 
a compilation of the requests outstanding. I ask unanimous 
consent that I have that delivered to you and make it a part of 
the record.
    Administrator Leavitt, you indicated to me earlier this 
week that your staff was reviewing our letter and that they 
would advise you on the appropriate responses. I would like a 
commitment from you, give me kind of a date when I could get 
some response for this long-outstanding request.
    Administrator Leavitt. That is a response I am happy to 
give you when I have it. I will provide it as soon as we have 
concluded it. We are in consultation with the chairman and the 
chairman's staff. We recognize the prerogative of a chair to 
ask for those documents. We want to do all we can to be 
cooperative, as I indicated earlier to Senator Wyden. Our 
purpose is to share information when it is needed and when it 
is appropriate.
    Senator Jeffords. I appreciate that.
    DC lead, as I begin my next question related to lead 
contamination in Washington, DC's water supply, I would offer 
my colleagues and the Administrator a drink. Here, take some of 
this water. Here.
    [Laughter.]
    Senator Inhofe. It is actually recycled urine.
    [Laughter.]
    Senator Jeffords. And I wish you your fill from our taps 
here in the Dirksen Building, supplied by the Washington 
aqueduct, the water source for the District.
    Administrator Leavitt. I hope you let it run for 5 minutes.
    [Laughter.]
    Senator Jeffords. We did.
    Then I would remind each of my colleagues that we have a 
choice to drink or not to drink this single glass of water 
before us today. This is not a situation which the people of 
the District of Columbia find themselves in. They do not have 
that option. I happen to one of them, too, so that applies to 
me as well.
    Many people who live here just do not have a practical or 
economically feasible alternative to tap water for cooking, 
bathing their children, mixing baby formula or drinking. For 
these people and for many others around the Nation, the 
decisions that are made on all levels of government regarding 
water supply protections present immediate health issues. I 
urge my colleagues, the Administrator and everyone involved in 
this issue to keep this in mind as we move forward.
    Administrator Leavitt, here in Washington the EPA is 
particularly responsible for the safety of the city's drinking 
water because the District does not have primacy under the Safe 
Drinking Water Act. I am extremely concerned with some of the 
reported actions taken by WASA. However, I am equally concerned 
whether EPA has acted appropriately in executing its 
responsibilities under the Safe Drinking Water Act.
    This committee will be holding a hearing on the Washington, 
DC water lead contamination issue on April 7. I have a long 
list of questions for the record that I would like the agency 
to answer before that hearing. However, there is one question 
that needs to be addressed today.
    Administrator Leavitt, can you describe what you see as the 
major failure of EPA in dealing with these lead contamination 
in the District of Columbia metropolitan area, and are you 
concerned about similar lead problems in other regions of the 
country?
    Administrator Leavitt. Senator, much will be learned, I 
believe, in subsequent months as we look back on this period. 
It is clear that the Environmental Protection Agency does have 
a heightened responsibility in this case. We have made clear to 
WASA, the agency that manages this on behalf of Washington, DC 
and to Washington DC that there are certain things that we 
expect of them. We intend that they are done and done in a 
timely way. If they are not, we will be stepping up the 
involvement of the national government, but we have every 
assurance they have been operating cooperatively. Our intention 
is to assure that when you and I and every other member of the 
Washington, DC public drink water, that it is safe.
    Senator Jeffords. To get on to global warming at this 
point, the world scientific consensus, including the American 
Geophysical Union and the National Academy of Sciences, could 
not be much clearer. Manmade emissions are contributing to 
global warming and climate change. This, in turn, is likely to 
have a serious negative environmental, economic and national 
security impact upon the United States.
    Why shouldn't greenhouse gases be regulated under the Clean 
Air Act because of the harm they already appear to be causing 
and will cause in the future?
    Administrator Leavitt. I see the red light is on. I will 
simply say, Mr. Chairman, that if the EPA is called upon by 
Congress to regulate them, we would do our best, but at this 
point they are not regulated pollutants and therefore we are 
concentrating on other things.
    Senator Jeffords. So it is up to us.
    Senator Inhofe. I would like to respond, but if I do that, 
then I know there will be other responses. The science is 
certainly not settled.
    There is some confusion. As I said air transport, 
understandably you might think we are talking about air that 
does not recognize State lines. I was talking about the air 
transport or the airline transport industry being under this 
particular rule, and the problem, the danger that comes from 
that.
    Administrator Leavitt. We will do our best to respond in 
that light.
    Senator Inhofe. That would be fine. We will get to that, 
then.
    Senator Voinovich?
    Senator Voinovich. I wish that Senator Carper was still 
here. The reason why some of us have not been able to support 
his legislation is according to EIA, the Energy Information 
Agency, that legislation that deals with the question that 
Senator Jeffords raised, would cost six times more than Clear 
Skies or $150 billion because it basically caps carbon. The 
problem we have here, and it is something that you are going to 
have to reconcile, is that we have been through environmental 
policies limiting the supply of natural gas and exacerbating 
the demand for it, so that all of the new energy facilities in 
my State are natural gas. By the way, they are not going to 
produce any energy this year because natural gas is out of 
sight. We are losing jobs overseas because of high natural gas 
costs.
    A part of it is because we have had an unrealistic 
environmental policy. I think it is up to you to stand up and 
point these things out. I certainly am going to point them out 
to the people in the city of Cleveland and in Akron and 
Columbus and Cincinnati, the urban areas, that the LIEHEE 
program is just being inundated because of the fact of these 
high natural gas costs. Somewhere along the line, we have to 
balance this up with our economy and the impact it is having on 
the least of our brothers and sisters. For some reason, we 
can't get it done here. Maybe you can provide some leadership 
in this area.
    The other thing is, we talk about the locals and paying for 
it. We have 264-some townships that have been asked to comply 
with the stormwater management regulations, phase two. They 
cannot comply with them. Akron cannot comply with them in 15 
years. Now, we went back, and I think Senator Inhofe was here 
and Senator Jeffords was here, we amended the Safe Drinking 
Water Act several years ago. In fact, I was over at the White 
House when President Clinton signed that legislation. We 
eliminated the requirement that every 3 years you had to take 
on 25 new contaminants when they didn't exist. We said that if 
the old-fashioned technology gets the job done, that you can go 
with that, and not have to go to the maximum available 
technology because these communities of less than 10,000 could 
not afford them.
    I think it is about time that you started looking at some 
of this stuff. What are you requiring these communities to do? 
What is the cost-benefit? And for goodness sakes, if you cannot 
come up with the money, and I know what they are telling you. 
Let them take care of, the rates. Well, these people cannot 
take care of it; 100 percent increase in rates. These 
communities are in bad shape today. And I think it is about 
time that the agency looked at this thing realistically and 
made some recommendations, and said, you know, we can't come up 
with the dough because we have a financial problem. These folks 
at the local level cannot come up with the money.
    The fact of the matter is that in this country when we 
really did something about clean water, it was back in 1971 
when we went forward with the 75/25 program, where the feds 
came up with 75 percent of the money and the locals came up 
with 25 percent. That went off in the middle of the 1980's.
    There are just a lot of things that need to be reconciled 
around here. We are in a global marketplace today. I have jobs 
moving overseas. I have companies closing down because of the 
fact that we just have not figured out harmonizing our 
environmental and our energy and economic needs in this 
country. Somebody has to stand up and start talking about it, 
because I am telling you it is killing my State today.
    If you want to respond, you can.
    [Laughter.]
    Administrator Leavitt. Amen.
    [Laughter.]
    Administrator Leavitt. Senator, 126 days ago I was the 
Governor of a State that had similar number of small 
communities struggling to meet these standards. I find myself 
now in a new role. I am the Administrator of the Environmental 
Protection Agency. I have a body of law called the Clean Water 
Act passed by the Congress, given to the Administrator of the 
Environmental Protection Agency to administer. I have an 
obligation to achieve compliance. That is my goal. I have an 
obligation to enforce the law. That is my responsibility.
    I will tell you that the President of the United States 
gave me a very clear charge: purify the water, but do it in a 
way that will allow us to remain competitive as a Nation. I 
share your concern. I share that goal. There is no question 
that we have a national standard. We have to have neighborhood 
solutions. That is the tenet of my personal philosophy.
    Somewhere in between all of the hard edges of the Clean 
Water Act, the hard responsibility of enforcing the law, the 
economic needs of small communities and the need for economic 
competitiveness, there is a productive center. Our objective is 
to find it.
    Senator Voinovich. I think that because of the position you 
are in, you should be able to provide us some leadership in 
this area, even if it is controversial. You should be able to 
say the emperor has no clothes. OK?
    Administrator Leavitt. I have seen the emperor, he has no 
clothes.
    Senator Inhofe. Thank you, Senator Voinovich.
    Senator Clinton?
    Senator Clinton. Mr. Chairman, this has turned into quite 
an ending here. I have the deepest respect for my chairman and 
for the very able Senator from Ohio. We are in a box. We are in 
a box of our own making. We are in a box that we don't need to 
be in, but apparently we would rather stay in the box than get 
out of it.
    I think there is a way to both grow the economy and protect 
the environment, but it is not going to happen because of the 
positions that people have found themselves in, and some of the 
assertions that are made about what our state of knowledge is, 
what the clear overwhelming evidence of science is, how we 
could create literally millions of jobs with respect to the 
environment in places like Ohio and upstate New York that are 
having lots of economic challenges.
    It is discouraging because every year that goes by, we 
hollow out the commitments of previous generations. You know, 
back in 1971 it was a Republican president at a time when our 
tax rates were much higher on both individuals and 
corporations; when we set down a consensus about how we were 
going to begin dealing with the environmental problems that are 
the natural consequence of the way we have built America over 
the last 200 years.
    Now we are in the 21st century. We have slashed tax rates 
and we have more competition that we have to figure out what to 
do with, and we are I think turning our back on our 
responsibility to the future and to those who came before who 
figured out a way to deal with clean air and clean water, and 
most of the progress was made under Republican presidents.
    So it is very concerning to me. I wanted to just ask a few 
questions about science because this is where I have a deep 
disagreement with my friend and chairman. Let me start with a 
specific question, then maybe get a little more general. In the 
2005 budget, EPA acknowledges the importance of the research 
you are doing on building contamination. This is just one 
example. And yet we know it zeroes out the relatively small 
amount of money spent on building contamination. In describing 
this cut, the EPA budget frankly explains, and I quote, ``this 
cut represents complete elimination of homeland security 
building decontamination research and the cut will force it to 
disband the technical and engineering expertise that will be 
needed to address known and emerging biological and chemical 
threats in the future,'' end quote.
    This is just an example of being extraordinarily short-
sighted. It also, of course, is of great concern to me because 
of all of our problems in New York. I think that the research 
in this area is critical to go on. We have lived through 
anthrax. We have lived through ricin. We have lived through the 
contamination of the collapse of the towers.
    So I just do not understand how with a relatively small 
amount of money, the EPA made this decision. Could you explain 
to me how this was arrived at?
    Administrator Leavitt. Senator, I want to express 
appreciation for the generosity that the Congress has shown 
over the last 2 years in funding decontamination research. We 
have done our best to use those funds wisely. The research 
continues. Frankly, we have not yet used all of the funds that 
Congress appropriated. This recommendation was based on that 
fact. We are going to continue to assess it. If in fact there 
is a need for more money, the generosity that the Congress has 
shown in funding we hope will continue and we would come back 
to ask for additional funds. But it was our belief that we 
could complete what was necessary based on the existing 
appropriations or previous appropriations.
    Senator Clinton. Well, we will take a hard look at that.
    Finally, I am concerned about the use and misuse of 
science. In February when the Union of Concerned Scientists 
issued a report detailing a series of suppression and 
manipulation of scientific information, that report was 
accompanied by a statement signed by 60 prominent scientists. 
They did not work for the energy industry. They were not in the 
environmental movement. They were scientists. They expressed 
deep concern about what the Administration was doing. Of 
course, they highlighted some of the decisions being made in 
the EPA, particularly about the proposed Clear Skies Act, which 
they believe, and I agree with them, would be actually a step 
backward from the Clean Air Act, the mercury rule and some 
other related issues.
    I was struck by a comment from Russell Train, who was the 
EPA Administrator under Presidents Nixon and Ford, who said, 
how radically we have moved away from regulation based on 
independent findings and professional analysis of scientific 
health and economic data by the responsible agency who 
regulates these matters. It is driven by the White House and 
political considerations.
    These are really serious allegations and they go hand-in-
hand with Senator Wyden's concern about how 12 paragraphs from 
a document prepared by the law firm that two of the EPA 
officials were once part of, got into the mercury rule. So I 
would like to ask you, Administrator Leavitt, what steps will 
you take to make sure that the American public and the Congress 
can trust the information coming out of the EPA?
    Administrator Leavitt. Senator, it has been my experience 
that there are some remarkably able scientists and engineers at 
the EPA, and that we have partnerships with universities all 
over the world and all over the country. May I just emphasize 
that we are making decisions in this Administration at the EPA 
on the basis of science, peer-reviewed science. It is the first 
question I have come to ask: Who has produced this science; has 
it been peer-reviewed; was it the basis of this decision.
    With respect to what you said earlier, may I just say that 
in the context of any propose rule, information comes from lots 
of different sources. I took the rule home over the 
Thanksgiving holiday, at least I took 275 pages of it, to 
understand the policy of it. I do not know where all of it came 
from, but I will tell you that I am focused on and finalizing 
the rules, what is the policy. I want you to know that peer 
review is a very important standard we are holding all science 
to at the Environmental Protection Agency.
    Senator Inhofe. Thank you, Senator Clinton.
    Senator Jeffords has two UCs and then we will adjourn.
    Senator Jeffords. I ask unanimous consent to place Senator 
Lieberman's opening statement into the record.
    Senator Inhofe. Without objection.
    [The referenced document follows:]

 Statement of Hon. Joseph I. Lieberman, U.S. Senator from the State of 
                              Connecticut

    Thank you, Mr. Chairman, for convening this hearing today. And I 
join you in welcoming Administrator Leavitt in his first appearance 
before us as Administrator.
    Mr. Chairman, as I said on the Senate floor last week, it is 
critical that we rise above partisan politics and take the long-term 
view in meeting the many foreign and domestic challenges during these 
difficult times for our nation and the world. The conventional wisdom 
is that this can't be done in an election year, but history says 
differently. In fact, the proximity of an election has induced exactly 
the kind of bipartisan leadership that produces progress many in times 
in our history, most recently with passage of welfare reform in 1996.
    We need that kind of bipartisan leadership now in tackling our 
pressing environmental challenges. We can't wait until after the 
November elections to clean our air, to purify our water of toxins, or 
to begin curbing global warming. Our public health, our environment, 
even our national security are at stake. That is why I am committed to 
work with you, Administrator Leavitt, in addressing these problems in a 
bipartisan manner this year--and I appeal to my colleagues from both 
sides of the aisle to do the same.
    The President must take the lead, however--and on the environment 
he has not, to date. In rolling-back environmental protections and 
delaying action on key environmental challenges, he has put special 
interests--and especially the interests of big polluters--before the 
national interests. Just this weekend, the New York Times ran a front 
page story detailing the domination of the Bush Administration's air 
policy by big energy interests, to the detriment of the public's 
health. Mr. Chairman, I ask unanimous consent that the article to which 
I referred be placed in the record.
    I hope your tenure as EPA Administrator, Mr. Leavitt, will chart a 
different course. Your public comments on air pollution issues signal 
that you are prepared to lead in a serious, bipartisan way, and I 
applaud you. The policies emanating from your agency, however, have not 
reflected this new approach, however--and that I cannot applaud. It is 
essential that we match the rhetoric of holding polluters accountable 
with a new reality in strong environmental protections and enforcement.
    Let me cite two specific examples. First, I believe that we have 
fallen far short in our efforts to limit toxic mercury emissions from 
power plants. There is hardly a more universally acknowledged toxin 
than mercury. This heavy metal has proven to cause development problems 
with children--and one in 12 women of child-bearing age have shown 
dangerous levels of mercury in their blood. Public health agencies in 
43 States have issued formal advisories warning people against eating 
certain species of fish caught from lakes and streams because of 
mercury contamination. In my State of Connecticut, every single 
solitary lake and stream has such a warning.
    And despite the EPA's claims to the contrary, we know that greater 
reductions are both technologically and politically possible. In 
Connecticut, legislators worked with industry and environmental groups 
to agree on a consensus proposal that would result in an 85 to 90 
percent reduction in mercury emissions from all coal plants. That is 
now the law in Connecticut.
    So you can see why I am frustrated to learn that EPA has retreated 
from its earlier intent to require strict mercury reductions by 2007 
and instead has proposed a rule that would require no reductions that 
would not result without the rule until 2018. We can and must do 
better.
    Second, the challenge of global warming. It is now beyond 
scientific doubt that humans are causing the warming of the Earth. In 
last week's Commerce Committee hearing, witnesses described the 
devastating effects on coral reefs, wildlife, and Arctic animals and 
tribes. And as one witness, scientist Gerry Mahlman, put it, ``Our 
burning of fossil fuels is the indisputably direct cause of the ever-
increasing concentrations of carbon dioxide in the atmosphere. Our 
descendants are likely to judge us harshly for our not yet having begun 
to address this problem meaningfully.''
    Yet we continue to do nothing to reduce our ever-increasing 
greenhouse gas emissions. In particular, the United States' emissions 
constitute < of the world's problem. Just last week, the EPA released 
preliminary figures revealing that, despite the country's economic 
downturn, U.S. emissions rose another 7/10 of a percent from 2001 to 
2002. Clearly, our current voluntary approach to emissions reductions 
is inadequate.
    To date, the Bush Administration has opposed the modest proposal 
put forward by Senator McCain and me to tackle this urgent 
environmental threat. If the Administration is willing to address this 
problem in a serious, bipartisan way, I am confident that we can work 
together to take action and send a signal to the nation's investors and 
innovators to develop the long-term solution to our global warming 
problem.
    Administrator Leavitt, in a speech you recently gave, you observed 
that no one could see society's appetite for environmental improvement 
as a fad. You are exactly right in that. No one could view what people 
think about their health and the world they leave their children and 
grandchildren as a fad. But we need to do more than observe this fact--
we must act on it in a meaningful, bipartisan way. I hope we can work 
together to do so.
    Senator Jeffords. I also ask consent to place the March 6 
New York Times article entitled, quote, ``How Industry Won the 
Battle of Pollution Control at EPA,'' end of quote, into the 
record.
    Senator Inhofe. Without objection.
    [The referenced document follows:]

                [From the New York Times, March 6, 2004]

        How Industry Won the Battle of Pollution Control at EPA
            (By Christopher Drew and Richard A. Oppel, Jr.)

    Just 6 weeks into the Bush Administration, Haley Barbour, a former 
Republican party chairman who was a lobbyist for electric power 
companies, sent a memorandum to Vice President Dick Cheney laying down 
a challenge.
    ``The question is whether environmental policy still prevails over 
energy policy with Bush-Cheney, as it did with Clinton-Gore,'' Mr. 
Barbour wrote, and called for measures to show that environmental 
concerns would no longer ``trump good energy policy.''
    Mr. Barbour's memo was an opening shot in a 2-year fight inside the 
Bush Administration for dominance between environmental protection and 
energy production on clean air policy. One camp included officials, 
like Mr. Cheney, who came from the energy industry. In another were 
enforcers of environmental policy, led by Christie Whitman, a former 
Republican Governor of New Jersey.
    The battle engaged some of the nation's largest power companies, 
which were also among the largest donors to President Bush and other 
Republicans. They were represented by Mr. Barbour and another 
influential lobbyist, Marc Racicot, who also would later become 
chairman of the Republican National Committee.
    In an Administration that puts a premium on keeping its internal 
disputes private, this struggle went on well out of the public's view. 
But interviews and documents trace the decisions in which the Bush 
Administration changed the nation's approach to environmental controls, 
ultimately shifting the balance to the side of energy policy. Senior 
officials at the Environmental Protection Agency, including Mrs. 
Whitman, became isolated, former aides said, and several resigned.
    Thirty years after the first Earth Day, the incoming Administration 
was still confronting power-plant smokestacks spewing fumes. The policy 
questions were arcane, involving strategies to control polluting 
particles. At stake, though, were environmental risks to human health 
and the nation's ability to produce cheap energy, as well as decisions 
about how the most polluting industries would be monitored for decades 
to come.
    For operators of some coal-fired plants, the stakes were more 
tangible. Dozens of plants were facing lawsuits over air pollution 
brought by the Clinton Administration and several northeastern States--
including New Jersey under Mrs. Whitman before she became head of the 
EPA. The industry, fearing billions of dollars in new costs, set about 
to undo the suits.
    One of the most important decisions was Mr. Bush's reversal of a 
campaign promise to regulate emissions of carbon dioxide, a gas that 
many scientists say contributes to global warming. The Administration 
also has proposed looser standards for emissions of mercury--a highly 
toxic pollutant--than President Bill Clinton had sought. The most 
protracted fight concerned the Administration's decision to issue new 
rules that substantially reduced the requirements for utilities to 
build pollution controls when modernizing their plants. The final 
policy shift may ultimately help the coal-plant operators shed the 
lawsuits.
    The struggle within the Administration, in skirmishes between 
Cabinet officers and volleys of memorandums, showed how the White House 
has transformed domestic policy through regulatory revision, rather 
than more contentious congressional debate.
    Administration officials say the changes were needed to raise 
energy production and lift the burden of cumbersome and costly 
regulations on industry. They said that the approach will continue the 
trend of declining emissions and reduce some of the most harmful 
pollutants by about half in the next decade--cuts as deep if not deeper 
than the old measures would bring.
    ``It's not about whether air quality will get better,'' said James 
L. Connaughton, chairman of the White House Council on Environmental 
Quality. ``It will, and it must. The question is what path you take to 
get there.''
    Critics on Capitol Hill and environmental groups say the policies 
will slow the cleaning of the air and undercut Congress's authority, 
while catering to companies that are big contributors to Mr. Bush's 
campaigns.
    ``Rather than work with Congress to move us forward on 
environmental issues, the Bush Administration is working with the 
special interests to undermine them,'' said Senator James M. Jeffords, 
the Vermont independent who is the ranking minority member of the 
Senate environment committee.
    But both sides agree on one outcome of the struggle: The nation's 
approach to air pollution control shifted drastically.
An Early Challenge
    As President Bush took office, he said he wanted to swiftly address 
energy shortages that had caused blackouts in California. Coming from 
the Texas energy industry, he was convinced that Clinton Administration 
environmental policies were restraining energy production. And 
utilities geared up to press the new Administration for big changes on 
a handful of issues that were crucial to them.
    Their biggest worry was Mr. Bush's campaign pledge to carry through 
on a Clinton Administration effort to impose controls on power plant 
emissions of carbon dioxide.
    The coal-fired power companies, which are among the nation's 
largest sources of carbon dioxide, were alarmed when Mrs. Whitman in 
her first days at the agency said Mr. Bush would carry out his promise. 
Not long after, Mr. Barbour sent his memorandum to Vice President 
Cheney, who was heading a task force Mr. Bush had ordered to conduct a 
broad review of energy policy.
    Mr. Cheney had been chief executive at Halliburton, an oil-and-gas-
services company. Energy corporations had been among the strongest 
supporters of Mr. Bush's Presidential campaign: There were more 
executives from energy than from any other industry group among Mr. 
Bush's most elite fund-raisers, called ``Pioneers,'' who each generated 
more than $100,000 in donations.
    The industry's outcry over carbon dioxide reached Mr. Bush. In 
March 2001, he reversed himself, saying there would be no carbon 
dioxide controls. ``I was responding t realities,'' Mr. Bush said at 
the time, ``and the reality is our nation has a real problem when it 
comes to energy.''
    After that victory, the utilities moved to press their advantage, 
turning to Mr. Cheney for help on another issue: a set of rules 
requiring them to add new pollution controls when they upgraded or 
expanded their plants. The power companies strongly objected to the 
rules, which were known as ``new source review,'' calling them 
arbitrary, expensive and outmoded.
    A small group of coal-fired utilities was especially unhappy. In 
1999, the Clinton Administration had sued nine companies, saying they 
had expanded 51 older plants without adding the required controls. 
Among those facing suits were the Southern Company, based in Atlanta; 
the Duke Energy Corporation, based in Charlotte, N.C.; and the 
FirstEnergy Corporation, based in Akron, Ohio. Southern, one of Mr. 
Barbour's biggest clients, was facing potential liabilities of hundreds 
of millions of dollars.
    The rules had not previously been vigorously enforced, and the 
companies contested the suits, saying the Clinton Administration had 
focused on them unfairly and made it too costly to improve their 
plants.
    Mrs. Whitman made it clear she was willing to revise the rules and 
settle the lawsuits. But, former aides at the EPA said, she favored 
old-fashioned political horse-trading: She would ease up on the old 
rules, but only after going to Congress with broad legislation to 
establish tough new controls on three important pollutants--sulfur 
dioxide, nitrogen oxide and mercury.
    Mrs. Whitman's orders were to ``find ways to deal with'' the rules 
``without giving away the farm to industry unilaterally,'' said Jeremy 
Symons, a former agency official who works with the National Wildlife 
Federation, an advocacy group.
    Industry lobbyists had a different strategy. C. Boyden Gray, who 
was White House counsel during the first Bush Administration and 
represented some utilities, said the companies viewed the pollution 
lawsuits as ``a gun to the head.'' They feared, he said, that if their 
bid to change the rules got caught up in a bigger battle in Congress, 
``they might not get anything.''
    The industry's main lobbying group, the Edison Electric Institute, 
already had meetings with White House and Energy Department officials 
about relaxing the pollution rules. The group's president, Thomas R. 
Kuhn, had been a Yale classmate of President Bush, and was also a 
Pioneer.
    Yet for some companies named in the lawsuits, the institute was not 
forceful enough. ``We needed a strategy and an organization to take a 
more aggressive approach,'' said Todd Terrell, a spokesman for 
Southern. So, at Mr. Barbour's urging, a handful of coal-burning 
utilities formed their own lobbying group.
    At the time, Mr. Barbour was probably Washington's most successful 
lobbyist. As Republican National Committee chairman from 1993 to 1997, 
he had helped the party gain control of Congress and had long been one 
of its most prodigious fund-raisers. His corporate clients included 
many of the party's largest donors. That added to his entree with 
Republican officials.
    The splinter group, organized by Mr. Barbour in the spring of 2001, 
was called the Electric Reliability Coordinating Council. Scott Segal, 
its executive director, said it sought a ``more consistent'' effort to 
rewrite the pollution rules. Several government officials and lobbyists 
said the group's underlying goal was bolder: to persuade the 
Administration to repudiate the old rules and thus torpedo the lawsuits 
based on them. According to the Center for Responsive Politics, the six 
utility companies now in the council and their employees made more than 
$10 million in political donations over the last 5 years, nearly three-
fourths of that going to Republicans. Southern and its employees 
account for nearly $4 million of the total, with 72 percent of their 
donations going to Republicans.
    Mr. Barbour had a meeting with Mr. Cheney on May 3, 2001, just 2 
weeks before the task force was set to unveil its energy plan, Mr. 
Segal said. Mr. Barbour was accompanied by Mr. Racicot, a friend of 
President Bush who would become the Republican chairman in January 2002 
and is now chairman of Mr. Bush's campaign.
    Mr. Segal said that Mr. Barbour and Mr. Racicot ``did not dwell'' 
on the lawsuits, but suggested that the Administration should abandon 
the standards that the Clinton Administration had applied in bringing 
them.
    Mrs. Whitman's aides said Mr. Cheney's office did not inform her of 
that meeting. But the next day Mrs. Whitman, knowing the debate was 
reaching a climax, sent a blunt memorandum to Mr. Cheney.
    ``We will pay a terrible political price if we undercut or walk 
away from'' the lawsuits, she wrote. She said it would be ``hard to 
refute the charge that we are deciding not to enforce the Clean Air 
Act.''
    She warned Mr. Cheney that a ``broad attack'' in his final report 
on the pollution rules would wipe out her leverage over the industry 
and ``permanently destroy our chance to achieve any needed legislative 
reforms we may seek in the future.''
    As the task force neared its end, Southern and other utilities in 
Mr. Barbour's group were busy on another front. On May 15, 2001, they 
gave $100,000 to the Republican party.
A Shift in Lobbying Efforts
    Mrs. Whitman's arguments succeeded in forestalling any 
recommendation in the Cheney task force report, issued on May 17, to 
rewrite the rules or cripple the lawsuits. Instead, the task force 
called only for the EPA to review the rules with the Energy Department, 
whose focus is to promote energy supply, and for the Justice Department 
to review whether the suits were valid.
    In January 2002, though, Mr. Barbour and his group learned that 
they would get no help from the Justice Department. Its lawyers found 
nothing amiss with the pollution lawsuits, concluding that they were 
supported by ``a reasonable basis in law and fact.''
    That setback did not slow the lobbying. Soon its locus shifted, as 
the Energy Department, led by Spencer Abraham, became increasingly 
involved, setting off a fight that reverberated inside the EPA as 
officials there said they felt outmaneuvered.
    Mr. Barbour and Mr. Racicot joined a parade of industry lobbyists 
seeking out Energy officials.
    Between July 2001 and November 2001, Francis S. Blake, then the 
deputy energy secretary, held seven meetings with industry groups about 
the pollution rules, attended by more than 60 executives and lobbyists, 
records show. During that time he met with only one lobbyist from an 
environmental group.
    In early 2002, Energy and EPA officials got down to considering new 
rules. Environmental officials in charge of enforcement grew alarmed at 
the proposals emanating from Mr. Abraham's department, which often 
echoed the industry's demands.
    In one memorandum, EPA officials attacked an Energy Department 
draft as ``highly biased and loaded with emotionally charged code 
words'' that would ultimately ``vitiate'' the pollution-control 
program.
    At one point, her aides said, Mrs. Whitman set up what she thought 
would be a private meeting with Mr. Cheney to discuss EPA concerns. 
When she arrived at his office, though, she was disappointed to find 
that Mr. Abraham was already there to present counter arguments.
    Soon an exodus began from the EPA's enforcement branch. Eric V. 
Schaeffer, who joined the agency during the first Bush Administration 
and was head of the Office of Regulatory Enforcement, sent a 
resignation letter to Mrs. Whitman that February. ``We seem about to 
snatch defeat from the jaws of victory,'' he wrote, adding that the 
White House ``seems determined to weaken the rules we are trying to 
enforce.''
    Mr. Schaeffer and his boss, Sylvia K. Lowrance, then the agency's 
top career enforcement official, both said in interviews they 
repeatedly warned Mrs. Whitman that the rule changes would jeopardize 
the enforcement lawsuits. Their view, shared by many industry lawyers, 
was that judges were often reluctant to penalize companies for failing 
to comply with rules that had been subsequently relaxed. Mrs. Lowrance 
later took early retirement.
    A different view was held by some EPA policy officials, including 
Jeffrey R. Holmstead, a former aide to Mr. Gray in the first Bush White 
House, who was now in charge of writing air-pollution regulations. Mr. 
Holmstead had long criticized the old rules as unmanageable and 
counter-productive, and he believed revising them would have no impact 
on the lawsuits in court.
    But Mr. Holmstead was uneasy with the lobbyists' participation. 
``This would have been so much simpler if they hadn't gotten Barbour 
involved, because that just created this new political intrigue,'' he 
said.
    In June 2002, Mr. Holmstead had a chance to see how closely the 
White House was watching. At a party for the 50th birthday of Mr. 
Abraham, Mr. Holmstead ran into Andrew Card, the White House chief of 
staff.
    Mr. Card ``wanted to know how come we were having so much trouble'' 
finishing up the rule revisions, Mr. Holmstead recalled.
    Shortly after, on June 13, Mrs. Whitman sent a proposal to the 
White House. It contained many of the changes that the Energy 
Department had championed, and was the foundation of the final rule 
revisions published in October 2003.
    Mrs. Whitman has never discussed the decisionmaking process or 
broken ranks in public with President Bush. But the new rules showed 
that the White House had thrown its weight behind energy priorities, 
both environment and energy officials said.
    The rules said utilities would not have to add new pollution-
control devices if upgrades and construction projects did not cost more 
than 20 percent of the plant's value--a loophole all sides said was 
huge.
    Departures From EPA Mrs. Whitman resigned last May, saying she 
hoped to spend more time with her family. Several former aides said she 
was frustrated that she did not have more support within the 
Administration. She declined through a spokesman to be interviewed.
    In a statement, Mrs. Whitman said she had supported streamlining 
the pollution rules because many groups agreed that they ``had grown 
cumbersome, unreliable and unpredictable.'' She said that Mr. Bush 
``expects the members of his cabinet to advocate forcefully on behalf 
of his or her agency'' before making major decisions.
    Mr. Cheney, Mr. Abraham, Mr. Racicot and Mr. Barbour--now the 
Governor of Mississippi--declined to comment.
    Late last year, top EPA officials announced a new pollution 
enforcement policy that seemed likely to critically weaken the pending 
lawsuits. By year's end three more of the agency's top enforcement 
officials resigned. ``The rug was pulled out from under us,'' one of 
them, Rich Biondi, said.
    The new rules evoked fierce opposition, though, as 14 States sued 
to block the change. In December, a Federal appeals court stayed their 
use, pending further arguments. EPA officials said they put the new 
enforcement policy on hold until the court challenge is resolved.
    The Administration's goal now is to expand the use of a more 
flexible ``cap and trade'' regulatory system created in the early 
1990's that worked with notable success to combat acid rain. It lets 
utilities buy and sell credits that give them a pollution allowance. 
The number of credits available nationwide shrinks over time, creating 
a cap to ensure that pollution levels decline. Late last year, 
Administration officials announced plans to move to the new cap-and-
trade system by revising regulations, rather than pressing for a new 
pollution bill, as Mrs. Whitman had envisioned.
    Under the Administration's plan, nationwide sulfur dioxide 
emissions from power plants would fall to 5.3 million tons by 2015, and 
nitrogen oxide emissions to 2.2 million tons, according to EPA 
estimates. Those would be reductions of 51 and 55 percent, 
respectively, over levels in 2001.
    A recent Administration move to control diesel emissions has drawn 
praise from environmentalists. But in December, officials set off a new 
controversy by proposing a cap-and-trade approach for another 
pollutant: emissions from coal-fired power plants of mercury, which can 
cause neurological damage to humans. Instead of starting to curtail the 
emissions by 2007, as was widely expected, the proposal would give 
utilities until 2018 to make significant cuts.
    Many environmentalists and some former EPA officials said that 
while the proposed pollution cuts are substantial, they give industry 
more time to make reductions than existing law. The critics contend 
that it was foolish to weaken the pollution lawsuits without extracting 
anything in return.
    ``They are packaging this as a pollution cut, but in fact it is a 
pollution delay imposed on a program that the Clean Air Act requires to 
go faster,'' said Dave Hawkins, a lawyer for the Natural Resources 
Defense Council in Washington.
    What is clear is that the energy industry is satisfied with the way 
the Bush Administration has gone. ``Cost-effective, and effective, are 
reasonable ways to describe the Bush Administration's clean-air 
policy,'' said Mr. Segal of the electricity lobbying group. ``The 
Administration has a lot to be proud of on its air policy.''
    Senator Jeffords. Mr. Chairman?
    Senator Inhofe. Yes?
    Senator Jeffords. I would like to ask unanimous consent to 
include the results of my information survey on mercury control 
companies as part of the record.
    Senator Inhofe. Without objection.
    [The referenced document follows:]

    The Real Status of Mercury Control Technology, According to its 
                               Developers

     (By Senator Jim Jeffords, Ranking Member, Senate Committee on 
                     Environment and Public Works)
                             March 10, 2004

    On October 24, 2003, Senator Jim Jeffords sent a letter of inquiry 
to several companies seeking a description of the mercury emissions 
control technologies they produce for installation in coal-fired 
electric utilities. Responses from W.L. Gore & Associates, Apogee 
Scientific, ADA Environmental Solutions, Powerspan, and KFx show with 
certainty that stringent control of utility mercury emissions in the 
range of 60-90 percent, depending on the technology, is economically 
feasible and technically achievable for even the dirtiest coal types. 
Two of the companies are confident their technologies could reduce 
mercury emissions from power plants by at least 80-90 percent from all 
types of coal combustion. One of these two can even achieve greater 
than 90 percent capture of mercury from the harder-to-control western 
sub-bituminous and lignite coals. Three out of the five companies 
responding indicate that their technologies are currently available 
commercially, while the remaining four plan to enter the market in 
between 2004 and 2007.
    These technologies can avoid high capital or operating costs, or 
produce significant economic benefit, or both. One creates low-mercury 
coal fuel at a price comparable to untreated, high Btu coal, which the 
company says can help older coal-fired power plants meet proposed 
emissions standards without major capital costs that could be passed on 
to consumers. Two companies boast lowered disposal costs by reducing 
the amount of mercury residue that becomes solid waste. Another two 
systems have the ability to preserve the value of fly ash residue 
(often sold to cement manufacturers) from the post-mercury control 
waste stream. One company states that even for moderate facilities this 
can represent a savings of several million dollars per year. Another 
technology produces a valuable fertilizer co-product. A fourth system 
enables utilities to increase operating efficiency and heating value.
    Not only are there economic plusses from mercury control, but there 
are real environmental benefits as well. These results show that the 
vast majority of toxic mercury air emissions from utilities can be 
avoided, and at levels far greater than those called for in the 
President's Clear Skies Proposal. Furthermore, many of these 
technologies have the ability to curb other air pollutants, such as 
particulate matter, nitrogen oxides, sulfur dioxide, carbon dioxide, 
and heavy metals. Municipal and hazardous waste incinerators have been 
dramatically reducing mercury emissions for the past two decades, using 
some of the same technologies available today for utilities.
    These companies feel they can meet the more stringent standards 
being debated today, but that without a clear mandate from the 
government regarding future mercury emissions requirements, it will be 
difficult to dramatically increase investment in new technology 
research, development, and testing. However, as Dr. Richard Bucher of 
W.L. Gore & Associates states in his letter to Senator Jeffords, ``we 
remain committed to developing a cost effective technology that 
provides maximum protection to the air we breathe.'' New and demanding 
mercury regulation would create a significant new market for these and 
other emissions control technologies, and would provide incentives for 
their continual advancement.
    For further information about these mercury control technologies, 
please contact:
    Christopher McLarnon, Ph.D., Vice President, Research & Development
    Powerspan Corporation New Durham, NH
    (603) 859-2500

    Michael Durham, Ph.D. President
    ADA Environmental Solutions, Inc.
    Littleton, CO
    (303) 734-1727

    Ted Venners, Chairman and CEO
    KFx Denver, CO
    (303) 293-2992

    Dr. Richard Bucher,
    W.L. Gore & Associates Elkton, MD
    (410) 392-3300

    Timothy Ebner,
    Apogee Scientific, Inc. Englewood, CO
    (303) 783-9599

    Lawrence E. McDonald, Director, Design Engineering & Technology
    Babcock & Wilcox Barberton, OH
    (330) 860-2122

    Robert G. Hilton, Senior Vice President--Marketing, Environmental
    ALSTOM Power Environment Knoxville, TN
    (865) 693-7550
                                 ______
                                 
                         [As of March 8, 2004]
         Submission for the Record by Senator James M. Jeffords

          OUTSTANDING DOCUMENT AND INFORMATION REQUESTS TO EPA

    1) Original Request: May 2001--The EPW Committee has repeatedly 
requested analysis of the costs and benefits of different multi-
pollutant strategies, like the Jeffords-Collins-Lieberman Clean Power 
Act, since May of 2001. To date, the Committee has received cost 
information, but has not received a comprehensive analysis of the 
benefits of Senator Jeffords' Clean Power Act. EPW continues to request 
complete benefits analysis, taking into account all health care-related 
savings, air quality-related values, and ecosystem effects due to 
projected emissions reductions.
    2) Original Request: August 2001--Sen. Jeffords wrote to 
Administrator Whitman on August 10, 2001, with follow-up questions to a 
July 26, 2001, hearing, seeking a consolidated estimate of the public 
health and environmental benefits, including tons of pollution avoided, 
achieved through full implementation of all Clean Air Act programs 
(including NSR, MACT, and PM 2.5/Ozone) that the Administrator 
mentioned during the hearing would be potentially ``unnecessary'' under 
a three-pollutant reduction scenario. The Committee has received only a 
qualitative analysis of some programs.
    3) Original Request: December 2001--Concerning both rule packages, 
EPW Committee members requested in December 2001 letters to EPA and the 
Department of Energy the following analyses and all related documents:

    A) the resulting impacts of the rules on future emissions (not 
provided and no effort has been made to collect the information);
    B) the impacts on EPA, State, or citizen NSR enforcement, including 
settled or pending cases, or cases that may have been ripe had the 
rules not been changed, or future enforcement authority (not provided);
    C) the impacts on attainment or maintenance of the NAAQS for SIPS, 
FIPs, or tribal implementation purposes (not performed or provided, and 
no effort has been made to collect the information);
    D) the legal consistency or inconsistency of the rules (not 
provided); and
    E) the extent to which fewer sources may take permit limits to 
``net out'' of NSR, and the related future emissions impact (provided 
only a qualitative estimate with no mechanism to detect impact).

    4) Original Request: December 2001--EPW members originally 
requested a log of documents relating to the proposed New Source Review 
rules on December 14, 2001. After EPA failed to deliver the log by the 
promised date of October 24, 2002, EPW resubmitted the request on 
December 20, 2002. A log was finally received on January 22, 2003--
after the first set of rules was finalized. However, the log is only a 
partial collection of the documents that would be responsive to the 
request, it does not contain information pertaining to document 
content, and it ends on September 30, 2002. EPW has requested a log 
that identifies document content pertaining to both sets of rules 
finalized in December 2002 and August 2003, through the date of the 
Agency's response to this request, which covers all documents described 
in the original request.
    EPW also requested all documents numbered 136-185 in the log on 
March 25, 2003, and in a subsequent email on May 15, 2003, but has not 
received these documents.
    5) Original Request: December 2001 / July 2002--EPA has not 
produced a quantitative analysis of the effects that the new and 
proposed NSR rules would have on the environment and public health, as 
was promised during both a July 16, 2002, joint EPW-Judiciary Committee 
hearing and a September 3, 2002, HELP Committee hearing, and as is 
required by Executive Order 12866. Furthermore, in December 2001, EPW 
members requested a discussion of the impacts of the proposed NSR 
changes on attainment of the National Ambient Air Quality Standards. 
EPW still awaits this analysis.
    6) Original Request: July 2002--Question number 24 of the July 30, 
2002, NSR hearing follow-up request from Senator Jeffords asked for EPA 
to provide all written advice and comments from the Office of 
Enforcement and Compliance Assurance (OECA) regarding the effect of the 
Report and Recommendations on the ongoing enforcement cases. After 
receiving a second EPW request, EPA offered to allow EPW staff to view 
the documents at the Agency. The Committee has restated the request 
that the documents be delivered to the Committee and offered 
appropriate accommodation for sensitive material.
    7) Original Request: February 2003--In an EPA briefing in February 
of 2003, EPW Committee staff asked for the amount of methyl bromide 
currently in stockpiles in the United States. EPA replied that it would 
not fulfill the request because it considered this confidential 
business information. As stated by Committee staff in subsequent email 
correspondence, this assertion does not apply to congressional 
requests.
    8) Original Request: June 2003--Senators Jeffords, Graham, and five 
other Senators sent a letter on June 19, 2003, to EPA concerning the 
White House's involvement in eliminating and altering climate change 
language inthe agency's State of the Environment report. EPA's response 
on August 28, 2003, neglected to include a requested list of all inter-
agency/Administration (internal) participant reviewers, copies of all 
internal drafts, and the name of the person who decided to delete the 
climate change section and insert a reference to an American Petroleum 
Institute-funded study.
    9) Original Request: October 2003--EPA has not responded to an 
October 17, 2003, letter from Senator Jeffords and one other Senator 
seeking the Agency's confirmation of the accuracy of a statement by 
Bill Wehrum, counsel to the Assistant Administrator for Air and 
Radiation, regarding the enforcement approach that the agency will take 
in the event that the stayed NSR rule on routine equipment replacement 
is overturned.
    10) Original Request: November 2003--On November 17, 2003, members 
of the EPW Committee requested EPA (and Council on Environmental 
Quality) documents relating to the EPA Inspector General's report 
concluding that the Agency's health based judgments and public 
communications were altered by White House personnel in the days 
following the collapse of the World Trade Center. To date, EPW has 
received none of the documents requested of EPA.
    11) Original Request: November 2003--Assistant Administrator for 
Air and Radiation Jeffrey Holmstead has not yet responded to a November 
18, 2003 request from Senators Jeffords and Leahy that he provide 
evidence in support of his July 2002 hearing testimony, in which he 
stated that the Administration's New Source Review changes would not 
negatively impact pending enforcement cases.
    12) Original Request: January 2004--EPA has not responded to a 
January 13, 2004, letter regarding the Administrator's statements at an 
Edison Electric Institute meeting concerning both the agency's proposed 
mercury rule and New Source Review enforcement and routine maintenance. 
Specifically, the letter requested economic, legal, or policy analysis 
supporting the Administrator's statement that compliance with existing 
law and with the mercury settlement agreement would be less effective 
than EPA's proposed alternative. The letter also asked what the 
Administrator would be directing EPA to do with respect to the pending 
New Source Review cases, and cases previously under investigation for 
violation of NSR rules existing prior to the court stay of the routine 
maintenance rule.
    Senator Jeffords. I believe that is all.
    Senator Inhofe. OK. Did you have a final comment?
    Administrator Leavitt. I just wanted to make sure that 
Senator Jeffords knew that is 10 minutes you should flush your 
water, not five. I misspoke.
    [Laughter.]
    Senator Inhofe. Thank you very much, Mr. Administrator. We 
appreciate your time this morning very much.
    The meeting is adjourned.
    [Whereupon, at 11:49 a.m. the committee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]

  Statement of Hon. Michael D. Crapo, U.S. Senator from the State of 
                                 Idaho

    Thank you, Chairman Inhofe, Senator Jeffords. Thank you, Governor 
Leavitt for being here with us today to discuss the proposed FY05 
Budget for the U.S. Environmental Protection Agency (EPA).
    This budget represents a move toward reducing the deficit while 
giving much needed attention to a number of programs that contribute 
greatly to enhancing our environment. I understand the challenges faced 
with preparing a budget request that is both responsive to the needs of 
all Americans while being responsible with their tax dollars. Balancing 
competing needs with limited resources is always a difficult endeavor. 
I commend you, Governor Leavitt, and the Bush Administration for 
meeting this challenge while keeping an eye to fiscal restraint and 
advancing this country on the environmental front.
    The EPA's budget proposes increased funding for a number of 
programs that will greatly enhance our ability to meet our 
environmental needs. Specifically, I am pleased to see the $40 million 
increase for the Brownfields program. I support the Brownfields 
Program, as this assistance can make a world of difference in assisting 
communities that contain property that is unavailable for development 
due to environmental contamination.
    Many rural western communities face enormous challenges in dealing 
with the rehabilitation of Brownfield properties and lack the funding 
necessary to revitalize the properties. These grants are vital sources 
of assistance, and are good for local economies, local communities, and 
the environment. While I will have some questions regarding the planned 
distribution of these funds, this is a very welcome increase and I 
appreciate the Agency's attention to this program.
    I am pleased by the EPA's continued commitment to ensure the 
Superfund program prioritizes the cleanup work needs in North Idaho. 
Idahoans continue to face the challenges of living and working within 
the Coeur d'Alene Basin Superfund site in North Idaho, and I support 
efforts to allocate the funding necessary to clean up these sites in a 
timely manner. The Budget Resolution that we are currently debating on 
the floor of the Senate also supports this increase.
    Additionally, the EPA's budget proposes a substantial increase for 
the Clean School bus program, taking it to $65 million. Meridian School 
District in Boise Idaho has utilized funding through this program to 
pilot a project to retrofit all 200 school buses in the Meridian School 
district fleet to reduce diesel emissions by 50 to 90 percent through 
the use of biodiesel. Children in Idaho have benefited through 
participation in this program, and I support the President's plan to 
retrofit the older buses that are now on the road. The proposed 
increase for this program is also reflected in the Senate Budget 
Resolution that would allow this program to be expanded into additional 
communities.
    Again, I thank the Committee for holding this hearing and Governor 
Leavitt for being here with us today. I look forward to continuing to 
work with the Administration and my fellow Members of Congress to 
ensure that Fiscal Year 2005 funding levels meet our environmental 
objectives. Thank you, Mr. Chairman.

                               __________
  Statement of Hon. John Cornyn, U.S. Senator from the State of Texas

    Thank you, Mr. Chairman. I just want to say a few words as we begin 
this hearing.
    I would like to thank Administrator Leavitt for being here this 
morning to present the Administration's Fiscal Year 2005 budget request 
for the Environmental Protection Agency. Also, thank you for the 
leadership and vision that you bring to the EPA. I am confident that 
under your guidance, this agency is in good hands to address the 
challenges facing the Nation.
    I think that our country has come a long way in improving our 
environment. From what we hear from critics and extremist interest 
groups, it would be easy to believe that the environment is getting 
worse. In truth, a recent EPA report showed that over the last 30 
years, as our economy grew over 164 percent, we have reduced the 
aggregate emissions of the six principal pollutants by almost half. 
Under the President's administration, we have seen cleaner air and 
safer water for all of us, which is our collective goal.
    That said, there is still much work to be done. I look forward to 
working with Texans, with my colleagues, and with you and your team at 
EPA on proposals that will ensure a cleaner environment, prevent 
unnecessary burdens on industry and the economy, and find reasonable 
solutions that are based on solid and tested science.

                               __________
Statement of Hon. Lisa Murkowski, U.S. Senator from the State of Alaska

    Mr. Chairman, thank you for giving me the opportunity to speak 
today.
    Establishing a budget for the EPA is essential to continue to 
protect the environment and human health of the people of this Nation. 
We must ensure that the EPA be able to have adequate resources to 
implement its core programs, as well as allowing the agency to work in 
collaboration with others to protect our air, water, and land.
    As we know, our nation is facing budget restraints. Funding for 
many of our agencies, including the Environment Protection Agency, must 
be restrained in times like these so we can balance the budget and 
steer our nation's economy in the right direction, while producing new 
jobs for Americans. I commend Administrator Leavitt's vision to use 
market based solutions, which I feel will allow the EPA to become more 
innovative and effective.
    There is a lot of criticism that the Administration has lowered 
funding for this agency. This is wrong. We only have to look at the 
facts to show that the Administration has a firm commitment to 
environmental protection after having increased this year's budget by 
133 million dollars. I urge the Administrator to target all programs 
that contain waste, fraud, abuse, and are unsustainable and either 
improve these programs or eliminate them. The agency can then focus on 
those programs which will make a positive impact on communities across 
the Nation.
    One of the biggest problems with applying environmental standards 
to Alaska is the fact that a regulation made in Washington DC does not 
always make sense in a place 4000 miles away. In the past, there have 
been attempts to establish a new EPA region for Alaska. Such a proposal 
would actually reduce costs in the long-run because it would cut down 
on unnecessary travel and other administrative costs. In the meantime, 
I hope the agency continues with its goal to support neighborhood 
solutions when trying to achieve compliance to national standards.
    I am happy that the Administration is committed to Alaska Native 
Villages and has kept funding for infrastructure assistance at a 
constant level. However, I am concerned that the current funding level 
will be enough. Many of our native communities need to address their 
water and wastewater infrastructure needs to maintain a healthy 
standard of living. The EPA has estimated that there are 20,000 homes 
in Native villages that lack basic sanitation facilities. There is no 
other State in our nation that contains a figure such as this, where 
citizens of the United States must walk long distances to carry water 
to their house. I would be interested in finding out if the current 
funding will address this striking number.
    It is my hope that the EPA, when administering these grants, can 
look toward applications that are efficient and will have an effective 
impact. I encourage Commissioner Leavitt to look into new technologies 
which can help cut costs but achieve the environmental goals set out in 
our nation's communities. For example, ozone technology may prove to be 
more cost effective when treating water infrastructure in Native 
Alaskan communities.
    At the same time, I urge the EPA not to abandon those core areas 
which may often get overlooked when finding new alternatives. For 
example, Alaska is having problems covering its core program 
requirements of the Clean Air Act. Congressional funding increases in 
recent years have been channeled by the EPA to new priorities leaving 
core programs short of funding to complete our basic mission. Examples 
include developing air quality plans for locations that have 
historically violated particle pollution levels from wood smoke; 
insufficient resources to undertake air monitoring in rural communities 
where we suspect airborne dusts levels exceed health standards (PM-10). 
New planning funds for regional haze goes to regional planning 
organizations while much of the Plan development work must be done by 
State staff with no new funds.
    I thank Commissioner Leavitt for coming today. I look forward to 
listening to his responses on questions asked by this Committee today 
and working with him on environmental issues affecting Alaska in the 
future.

                               __________
Statement of Hon. Michael O. Leavitt, Administrator, U.S. Environmental 
                           Protection Agency

    Mr. Chairman and members of the committee, I am pleased to be here 
to discuss President Bush's Fiscal Year (FY) 2005 budget request for 
the Environmental Protection Agency (EPA). The President's fiscal year 
2005 budget request of $7.8 billion provides funding necessary for the 
Agency to carry out our mission to protect human health and safeguard 
the natural environment efficiently and effectively. Given the 
competing priorities for Federal funding this year, I am pleased by the 
President's commitment to human health and environmental protection.
    I would like to begin, Mr. Chairman, by emphasizing that the 
President's budget request for EPA reflects the Agency's commitment to 
cleaning our air, cleansing our water, and protecting our land 
efficiently and effectively, while sustaining economic growth. The 
request promotes EPA's goals by facilitating collaboration, harnessing 
leading-edge technology, and creating market-based incentives for 
environmental protection.
    This Agency remains committed to working with our geographic and 
regional partners and focusing on our core programs to protect human 
health and the environment. Of the $7.8 billion budget, $4.4 billion 
the highest level in EPA history is devoted to the Agency's core 
regulatory, research, and enforcement activities, and State program 
grants. The President and I both believe that enhancing EPA's core 
programs is a vital part of effective environmental management and 
stewardship. Our budget request reflects that.
    As EPA continues to carry out its mission, I look forward to 
building upon a strong base of environmental progress. This budget, Mr. 
Chairman, will enable us to carry out our principal objectives while 
allowing us to react and adapt to challenges as they arise.

Clean Air and Global Change
    The fiscal year 2005 President's Budget requests $1.0 billion to 
fund our clean air and global change programs, thereby helping to 
ensure that air in every American community will be clean and safe to 
breathe. The budget includes a large increase for EPA's Clean School 
Bus USA grant program to $65 million for projects that reduce diesel 
emissions from school buses through bus replacement or retrofitting. 
Clean School Bus USA helps ensure that school children have the 
cleanest transportation possible. This program is an additional tool 
for communities to develop localized solutions for environmental 
protection to meet new air quality standards for particulate matter.
    This budget also supports the President's Clear Skies initiative, 
which draws on EPA's experience to modernize the Clean Air Act. Clear 
Skies legislation would slash emissions of three power plant pollutants 
nitrogen oxide, sulfur dioxide, and mercury by 70 percent. Such 
emissions cuts are an essential component of improving air quality and 
thus environmental and human health. The Clear Skies initiative would 
buildupon the 1990 Clean Air Act's acid rain program by expanding this 
proven, innovative, market-based approach to clean air. The power plant 
reductions required under Clear Skies and our new diesel engine 
regulations will bring most of the country into attainment with the new 
ozone and PM air quality standards: by 2020, only 27 counties out of 
263 will need to take further steps to be in attainment for ozone; only 
18 counties out of 111 will need to take further steps to be in 
attainment for PM. Such a program, coupled with appropriate measures to 
address local concerns, would provide significant health benefits even 
as energy supplies are increased to meet growing demand and electricity 
rates remain stable. I look forward to working with you, your fellow 
Members of Congress, and the President on this landmark legislation. 
Next month, I will formally designate counties that will be out of 
attainment with the new ozone standards; in December, I will formally 
designate counties that will be out of attainment for particulate 
matter. These designations start the clock ticking on the often 
controversial and resource-intensive State planning process. By 2007, 
States must have plans to get into attainment approved by EPA. So, the 
budget would also support the Interstate Air Quality Rule we proposed 
in December and intend to finalize this year. This rule is similar to 
Clear Skies in that it requires an approximate 70 percent reduction in 
sulfur dioxide and nitrogen oxide from the power sector. However, due 
to authority under the Clean Air Act, its reach is limited to States in 
the eastern half of the U.S. that contribute pollution to neighboring 
States. Although this rule would allow us to take an enormous step 
forward in providing cleaner air across much of the country, it would 
not do so as fast or as effectively as would Clear Skies.
    EPA's request for clean air programs includes $313 million for 
clean air grants to support our collaborative network of States and 
Tribes. These resources will assist States, Tribes, and local 
governments in devising additional stationary and mobile source 
strategies to reduce ozone, particulate matter, and other pollutants.
    The clean air and global change request also includes $130 million 
to meet our climate change objectives by working with business and 
other sectors to deliver multiple benefits while improving overall 
scientific understanding of climate change and its potential 
consequences. The core of EPA's climate change efforts are government/
industry partnership programs designed to capitalize on the tremendous 
opportunities available to consumers, businesses, and organizations to 
make sound investments in efficient equipment and practices. These 
programs help remove barriers in the marketplace, resulting in faster 
deployment of technology into the residential, commercial, 
transportation, and industrial sectors of the economy.

Clean and Safe Water
    In fiscal year 2005, this budget requests over $2.9 billion for its 
water programs. EPA's fiscal year 2005 budget focuses on four 
strategies toward achieving the Nation's clean and safe water goals. To 
better address the complexity of the remaining water quality 
challenges, EPA will promote local watershed approaches to execute the 
best and most cost effective solutions to local and regional water 
problems. To protect and build on the gains of the past, EPA will focus 
on its core water programs. To maximize the impact of each dollar, EPA 
will continue to strengthen vital partnerships and collaborative 
networks with States, tribes and local governments, and others in 
working to achieve our shared goal of improving the Nation's waters. To 
leverage progress through innovation, EPA will promote water quality 
trading, water efficiency, and other market based approaches.
    The budget makes a significant investment in a new water-quality 
monitoring initiative to solve water quality monitoring problems. 
Through this investment, EPA can make the most of scarce resources 
through information-based management, using tools such as prevention, 
source water protection, watershed trading, and permitting on a 
watershed basis. Monitoring is the foundation of information-based 
management and it is imperative that the data and information gaps be 
closed as quickly as possible. The budget provides a total of $20 
million to strengthen State and tribal water quality monitoring 
programs, improve data management systems and improve monitoring tools. 
Of that amount $17 million in grants provides direct assistance to 
States and tribes. $3 million of this funding will provide technical 
assistance to help States and tribes develop statistically 
representative water quality monitoring programs, a tool that will 
eventually allow EPA to make a national determination of water quality 
and ensure resources target the highest priority problems.
    States are struggling with implementation of the National Pollution 
Discharge Elimination System (NPDES) permitting programs, as 
demonstrated by withdrawal petitions and permit backlogs. Compounding 
the problem is that the regulated universe increased tenfold due to new 
requirements for concentrated animal feeding operations and storm water 
runoff. The Agency requests a $5 million increase in Section 106 Grants 
to help States issue timely and effective NPDES permits. By providing 
additional resources in the form of State grants, EPA will help States 
and tribes meet obligations under the revised rule and help reduce 
pollutants and make necessary improvements in water quality.
    EPA is also advancing water quality trading in voluntary 
partnerships on a watershed basis. It capitalizes on economies of scale 
and cost differences among sources. Trading allows one source to meet 
its regulatory obligations by using pollutant reductions gained by 
another source and provides incentives for voluntary reductions at a 
reduced cost to all. It provides an opportunity for innovative 
solutions to complex water quality problems. To encourage the 
implementation of water quality trading programs, the budget includes 
$4 million in the Targeted Watersheds Grants program.
    The President's Budget continues its commitment to help provide 
affordable financing for States' water infrastructure needs. The Budget 
provides $850 million for the Clean Water State Revolving Fund, which 
will ultimately result in a $3.4 billion long term revolving level, 
helping communities across the country cleanup their wastewater. It 
also provides $850 million for the Drinking Water State Revolving Fund, 
resulting in a long term revolving level of $1.2 billion and protecting 
public health. However, growing populations are increasing demands on 
water resources, and addressing these demands, along with the nation's 
multi-billion dollar water infrastructure gap, will require creative 
solutions at the local, State and Federal level. As part of a long-term 
strategy to develop sustainable infrastructure EPA will work in 
partnership with States, the utility industry and others to enhance 
operating efficiencies and mitigate infrastructure needs by encouraging 
efforts to reduce water demand and wastewater flows, potentially 
downsizing capital needs. High priority activities in support of this 
effort include a new water efficiency labeling program and a 
sustainable infrastructure initiative that will promote best practices 
such as full cost pricing.

Land Preservation and Restoration
    This budget continues EPA's commitment to clean up toxic waste 
sites with $1.4 billion for Superfund. This reflects a $124 million 
increase over the fiscal year 2004 appropriated level for Superfund's 
remedial program, which will allow for 8-12 additional construction 
starts in 2005 and a similar number of additional completions by 2006. 
As of January 2004, cleanup construction projects were underway or 
complete for over 93 percent of National Priority List (NPL) sites.
    The President's Budget also includes an additional $26 million to 
strengthen EPA's partnership with States to monitor underground storage 
tanks. Recognizing that States have primary responsibility for 
monitoring tanks, issuing permits, and enforcing regulations, the 
additional grant money will provide funds for States to inspect a 
larger universe of federally regulated underground storage tanks on a 
more frequent basis.
Protecting America's Communities and Ecosystems
    EPA is committed to building and enhancing effective partnerships 
that allow us to safeguard human populations and ecosystems across 
America. To help protect and restore land-based ecosystems, this budget 
provides $210.7 million, over $40 million more than the level provided 
in the fiscal year 2004 Consolidated Appropriations bill, for the 
Brownfields program, one of the Administration's top environmental 
priorities. The Brownfields program will draw on these additional 
resources to provide grants to State and Tribal partners to fund 
cleanup of lightly contaminated sites. By protecting land and 
revitalizing contaminated sites throughout the United States, EPA 
continues to expand efforts to foster healthy and economically 
sustainable communities and attract new investments to rejuvenated 
areas.
    EPA's budget requests resources to protect individual ecosystems 
across the country, including a total of $30 million for the Chesapeake 
Bay. Ten million dollars of this total will be provided through the 
Targeted Watersheds Program for a pilot program to help municipalities 
reduce nutrient discharges to the Bay through collaboration with 
nonpoint sources. EPA's collaborative partnership in Chesapeake Bay 
protection, which serves as a model for similar endeavors, includes 
Maryland, Virginia, Pennsylvania, the District of Columbia, the 
Chesapeake Bay Commission, and participating citizen advisory groups.
    The Great Lakes are the largest system of fresh surface water on 
Earth, containing roughly 18 percent of the world's supply. The Great 
Lakes basin also is home to more than one-tenth of the population of 
the United States, one-quarter of the population of Canada, and heavy 
concentrations of industry. Over the years, industrial development has 
contaminated sediments throughout large areas of the lakes with toxics 
such as polychlorinated biphenyls (PCBs) and heavy metals, putting 
large populations and the tremendous water resource at risk. EPA's 
Great Lakes Legacy program provides funding to remediate contaminated 
sediments, keeping them from entering the food chain where they may 
cause adverse effects to human health and the environment. In 2005, 
this Administration will demonstrate its commitment to the health and 
well-being of the region and its citizens by proposing to fund the 
Great Lakes Legacy program at $45 million, nearly five times greater 
than previous levels.
    To ensure that the American public will continue to enjoy one of 
the safest and most affordable food supplies in the world, the 
President's budget continues to meet implementation challenges of the 
Food Quality Protection Act (FQPA). The Agency's implementation of FQPA 
focuses on science-driven policies for pesticides review, seeks to 
encourage the development of reduced risk pesticides to provide an 
alternative to the older versions on the market, and works to develop 
and deliver information on alternative pesticides/techniques and best 
pest control practices to pesticide users. The Agency is also working 
to help farmers' transition to safer substitutes and alternative 
farming practices while minimizing production disruptions. Reassessing 
existing tolerances ensures food safety, especially for infants and 
children, and ensures that all pesticides registered for use meet 
current health standards.
Compliance and Environmental Stewardship
    This budget also requests $751 million to promote and insure 
compliance with environmental laws, and to foster and support the 
development of pollution prevention strategies and innovative 
approaches to environmental protection. Since EPA's inception over 
thirty years ago, many environmental improvements in our country can be 
attributed to a strong set of environmental laws, and to our efforts to 
ensure enforcement of those laws. The Agency uses a ``smart'' 
enforcement approach, employing a mix of compliance assistance, 
incentives and monitoring strategies, supported by strong, effective 
civil and criminal enforcement and litigation teams. This ``smart'' 
approach maximizes the use of the Agency's resources and personnel, and 
allows us to quickly and effectively adapt both to emerging 
environmental threats and to changes in law and policy.
    The President's fiscal year 2005 request also continues to support 
results-based, innovative, and multimedia approaches to pollution 
prevention and natural resource conservation by government, industry, 
and the public. Increasingly, Americans are recognizing the value of 
their own pollution prevention efforts, and the contributions made 
through sustainable business practices, to the preservation and 
restoration of community and national environmental resources. In 
addition, EPA will continue to support initiatives targeted toward 
improving compliance at public and private facilities, empowering State 
and Tribal environmental programs, encouraging corporate stewardship, 
and better informing the public.
Strong Science
    Sound science is a fundamental component of EPA's work. The Agency 
has long relied upon science and technology to help discern and 
evaluate potential threats to human health and the natural environment. 
Much of our decisionmaking, policy, and regulatory successes stem from 
reliance on quality scientific research aimed at achieving our 
environmental goals. In fiscal year 2005 EPA will strengthen the role 
of science in decisionmaking by using sound scientific information and 
analysis to help direct policy and establish priorities. This budget 
request includes $572 million for the Office of Research and 
Development to develop and apply strong science to address both current 
and future environmental challenges. These resources support a balanced 
research and development program designed to address Administration and 
Agency priorities, and meet the challenges of the Clean Air Act (CAA), 
the Safe Drinking Water Act (SDWA), the Federal Insecticide, Fungicide, 
and Rodenticide Act (FIFRA), the Food Quality Protection Act (FQPA), 
and other environmental statutes. The budget request includes important 
new or increased research efforts in the following areas: computational 
toxicology, data quality, and EPA's Integrated Risk Information System 
(IRIS) an EPA data base of Agency consensus human health information on 
environmental contaminants.
Accelerating Environmental Performance
    To further promote environmental stewardship with localized 
solutions, the Agency requests $1.25 billion, the highest level ever, 
for categorical grants to support core State and Tribal environmental 
programs. A new State and Tribal Performance Fund provides $23 million 
in competitive grants to develop projects with tangible, performance-
based environmental and public health outcomes that can be models for 
implementation across the Nation. The Administration believes that the 
best way to ensure strong, effective programs is to promote 
accountability, competition, and performance, and these funds will 
allow States and tribes that can link their proposed activities to 
health and environmental outcomes to receive additional assistance. EPA 
will also continue its emphasis on working with Tribal governments to 
build the capacity of their environmental programs.
Rewarding Results and Increasing Productivity
    The President's proposed EPA budget for fiscal year 2005 fully 
supports the Agency's work. The request demonstrates EPA's commitment 
to our principal objectives safeguarding and restoring America's air, 
water, and land resources by facilitating collaboration, harnessing 
leading-edge technology, creating market-based incentives, and 
ultimately finding a better way for environmental protection. As we 
look to the future, I am confident that this funding will ensure the 
Agency's fulfillment of our responsibilities to the American public.
    With that, Mr. Chairman and members of the committee, my prepared 
statement is concluded. I would be pleased to answer any questions you 
may have.
                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                                 Baucus
                             libby, montana

    Question 1. How much does EPA plan to spend on clean-up activities 
in Libby, Montana this fiscal year? How much in fiscal year 2005?
    Response. In fiscal year 2004, EPA has allocated $17 million to the 
cleanup activities in Libby, Montana, and $17 million are planned for 
this work in fiscal year 2005.

    Question 2. How does this amount compare to the funding requested 
by the Region and EPA staff on the ground in Libby?
    Response. EPA Region 8 requested $21 million for cleanup work in 
Libby for fiscal year 2004 and fiscal year 2005.

    Question 3. Please detail the clean-up work that has yet to be 
completed at the Libby site and how long the EPA projects it will take 
to finish all work at the site.
    Response. EPA currently has 400 residential property cleanup plans 
prepared, and is addressing residential contamination at the rate of 
130 to 200 properties per year. There is a standing inventory of at 
least 1,200 more contaminated properties to address. This number does 
not include the potential for additional homes in the town of Troy, or 
other nearby areas which have not been evaluated.
    At current funding and operating levels, EPA estimates that cleanup 
will continue for the next 6 to 9 years.

    Question 4. Does the EPA believe its projected time-frame for 
completing work at the Libby site is reasonable, or, given the nature 
of the asbestos contamination in Libby and the risks it poses to human 
health, should more resources be allocated to the clean-up to allow it 
to be completed on a faster time-line?
    Response. EPA will not meet the original estimate made in 2001 for 
completing cleanup work in Libby. At that time, EPA estimated that it 
would complete Libby cleanup operations by fiscal year 2005.
    EPA's original estimate was based on limited knowledge about the 
extent of contamination in Libby. EPA had not conducted the extensive 
community outreach, site sampling and characterization, which now show 
that far more contamination is located in many more properties than 
initially anticipated.
    The Agency started its Libby cleanup project by addressing the 
exposure sources most associated with illness--large, open sources of 
asbestos which ATSDR had linked to illness among the residents, 
including waste piles, ball fields, school playgrounds, and other open 
public sources of exposure. Most of this work is now finished. As such, 
EPA's work is now primarily focused on the remaining residential 
cleanup needs, including contamination in yards, inside homes, and 
contaminated insulation in attics.

    Question 5. Does the EPA have any concerns about impacts to public 
health in Libby as a result of an extended time-line for completing 
clean-up? If not, why not? Please explain your answer in detail.
    Response. EPA began the Libby cleanup by working with the Agency 
for Toxic Substances and Disease Registry (ATSDR) to identify the 
asbestos exposure pathways which were most highly linked to illness 
among residents and former workers. This revealed three significant 
exposure pathways of concern: working for the mine or processor, being 
a family member of one of these workers, and playing in the waste 
piles. In addition, ATSDR determined that Libby residents who reported 
higher numbers of exposure pathways were more likely to be ill today.
    EPA's response action was then tailored to address the worst 
sources of exposure first, ensuring the protectiveness of our remedial 
action. Most of this open, large source cleanup work has now been 
completed, and the remaining sources EPA will address are smaller, 
often buried or in closed walls and attics, presenting intermittent 
exposures that do not present the same level of threat as the four 
principal exposure pathways described above.
    EPA's response in Libby meets highly protective levels, in part 
because the residents of Libby have a history of high levels of chronic 
exposure to what appears to be a particularly dangerous form of 
asbestos. EPA is taking prudent steps to ensure that Libby residents 
are not being exposed and will not be exposed to any additional 
asbestos contamination.

                             TEN MILE SITE

    Question 6. Please detail the cleanup work yet to be completed at 
the Ten Mile site in Montana, and how long the EPA projects it will 
take to finish all work at that site.
    Response. EPA has four phases of work remaining at the Ten Mile 
site. At present, EPA has several projects underway, including one 
chemical/physical treatment system and a source control project. Once 
these systems become operational and functional, EPA will continue to 
operate and maintain these systems for a period of 10 years. After the 
10-year period, the State of Montana will take on the responsibility of 
operating and maintaining these systems. Other work at the site 
includes:
Yard cleanups and Source removal

      Estimated: 2-3 years to clean up the yards and removal of 
other waste sources in the community of Rimini; and
      Estimated: 1-2 years for cleaning up the contaminated 
roads and rail grade (made from waste) and cleaning up the yards and 
removal of other waste sources in the community of Landmark. This 
action is concurrent with the Rimini cleanup.
Mine cleanups
      Out of 150 mines inventoried, EPA concluded that 
approximately 70 mines required cleanup of approximately 250,000 cubic 
yards of wastes and contaminated soils. Based on the waste handling 
capability of the Luttrell repository, EPA expects to dispose of 
between 20,000 to 40,000 cubic yards of waste per year at Luttrell. 
This action requires approximately 6--8 years to complete.
Acid mine drainage
      EPA identified four principal mine discharge areas that 
require remediation. Thirty lower priority discharge areas require 
passive treatment. EPA plans to operate these water treatment systems 
for 10 years and then transfer the operation and maintenance to the 
State.
Stream flow augmentation
      This work is being addressed concurrently with the mine 
cleanups. The city of Helena is working with EPA's Redevelopment 
Program to explore options that would significantly enhance the 
benefits of EPA's cleanup at no additional cost.

    Question 7. How much does EPA plan to spend on clean-up activities 
at Ten Mile this fiscal year? In fiscal year 2005?
    Response. EPA has allocated a total of $6.1 million to the Ten Mile 
site for fiscal year 2004. Fiscal year 2005 allocations have not been 
decided.

    Question 8. How does this amount compare to the funding requested 
by the Region and EPA staff on the ground at Ten Mile?
    Response. The EPA plans to spend approximately $6.1 million at the 
site in fiscal year 2004, which represents roughly the level of funding 
requested by EPA's Montana office. The sources for these funds include 
$4.55 million from the Agency's remedial action account and $1.5 
million from the following sources: U.S. Forest Service's repayment for 
waste disposal, repayment from town of Basin for waste disposal, and 
EPA's Removal Program funding.

    Question 9. Could more funding be spent at Ten Mile in this and the 
next fiscal year, and would that result in a faster clean-up?
    Response. No. EPA will be following a sequence of work that sets 
the rate at which cleanup can occur. Removal of waste will occur around 
homes in the Landmark subdivision. After all the waste from this 
location is moved up Rimini Road to the repository, removal of waste 
from the east half of Rimini road (through Rimini) will begin. This 
work will prevent further waste haulage from the Landmark subdivision. 
Concurrent with waste removal from the road through Rimini, EPA will 
relocate the Helena primary water line and install the infrastructure 
necessary to support the community of Rimini(s alternate water supply 
and waste water system. After the water and waste water mains have been 
installed, waste removal from Rimini yards can proceed. Additional 
funding beyond what EPA is requesting annually will not make this 
cleanup proceed faster.

    Question 10. Are there public health concerns related to the Ten 
Mile site that would be resolved more quickly if more funding were 
allocated to clean-up at Ten Mile? Please explain your answer in 
detail.
    Response. Additional funding at this time will not result in 
expediting short term risk reduction. The public health concerns at the 
Tenmile site stem primarily from exposure to heavy metals (primarily 
lead and arsenic) in soils and arsenic in drinking water.
    The cleanup plan for Ten Mile addresses these risks in a sequential 
manner:

      Cleanup of Landmark yards prior to disturbing the road in 
Rimini;
      Excavate waste from road in Rimini while relocating the 
Helena water line and installing the potable and waste water systems 
through Rimini; and
      Cleanup Rimini yards and immediately hooking up new water 
and waste water systems.

                    TOTAL MAXIMUM DAILY LOAD (TMDL)
 
   Question 11. It is my understanding that an assessment Category 
exists that will allow for not setting a Total Maximum Daily Load 
(TMDL) where pollution control measures are in place through Land Area 
Management Plans and where water bodies can reach water quality 
standards in a reasonable period of time under those plans. What is the 
EPA doing to facilitate the use of this Category of assessment by 
Federal agencies that have management plans in place? I believe that 
the assessment Category is called 4B.
    Response. EPA's regulations for the Total Maximum Daily Load (TMDL) 
program provide that States do not need to list waters as requiring 
TMDLs if other pollution control requirements (e.g. best management 
practices) are stringent enough to implement water quality standards. 
These waters according to guidance issued in 2001 and 2003 can be 
placed in Category 4(b) of the Integrated Report. EPA believes that it 
is important to avoid duplication of effort and ensure that proper 
credit is given to other water quality restoration programs. EPA also 
believes that a reasonable basis for placing a water in Category 4(b) 
includes a demonstration that there is a clear link between 
implementation of the control mechanisms and achievement of water 
quality standards and that implementation is occurring or will occur. 
EPA's goal is to achieve water quality standards; TMDLs are one path, 
but the Agency recognizes that other paths can achieve the same 
results.
    EPA has several initiatives that facilitate the use of Category 
4(b) by States and other stakeholders. In the short term, EPA's Region 
8 is working with Region I of the US Forest Service to resolve issues 
in Montana. From May 4-5, 2004, representatives from EPA, U. S. Forest 
Service (USFS), Montana State Department of Environmental Quality, and 
Montana Department of Natural Resource Conservation met in Helena, 
Montana, to discuss the need to accelerate the pace at which waters in 
National Forest Lands are taken off the list of impaired waters. A 
major subject of discussion was the correlation between various USFS 
planning documents and the demonstration needed to place waters in 
Category 4(b). Subsequent meetings are planned to further these 
discussions as well as coordinate TMDL development and USFS planning 
schedules to the best extent possible.
    In the long-term, EPA is developing guidance for the 2006 
assessment and listing cycle. As part of this effort, EPA is exploring 
options in addressing comments received regarding Category 4(b) to 
ensure that the criteria for placing waters in 4(b) is useful and 
clearly understood. A draft of that guidance should be available for 
broad distribution by the end of June, and EPA will engage in 
consultation with all interested parties. EPA is also working with the 
Environmental Council of States (ECOS) to develop innovative strategies 
to encourage implementation activities that will lead to effective and 
efficient attainment of water quality standards. A key element of that 
project is a review of EPA guidance by an Innovative Action Council-
ECOS workgroup to ensure that it allows for the efficient use of 
Category 4(b).

                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                                 Carper

                     CLEAN AIR PLANNING ACT (CAPA)

    Question 1. EPA's fiscal year 2005 budget proposal includes 
$800,000 for implementing the Clear Skies Initiative or the Interstate 
Air Quality Rule. How would these funds be spent?
    Response. The Clear Skies Act or the rules proposed in December 
2003 are programs designed to cost-effectively reduce emissions of 
multiple pollutants from the power sector. This innovative approach 
addresses the major issues facing the Air Program--the adverse health 
and environmental effects caused by excessive PM2.5, ozone, 
and air toxics in our communities--by replacing or streamlining the 
multitude of existing, uncoordinated regulatory approaches aimed at 
controlling emissions from the power sector with a single, national 
program that is comprehensive, cost-effective, and ensures emission 
reductions.
    The types of actions that the Agency would need to take for 
implementation of either the Clear Skies Act or the rules proposed in 
December 2003 include:
    Prepare the data and tools for completing the rules and/or 
implementing the Act. Design a cap-and-trade program, promulgate rules, 
and develop implementing tools and mechanisms.
    Support the rules with technical and economic analyses. Determine 
control technology options and investigate the regulatory impacts on 
the U.S. economy, the environment, small business, and local 
communities.
    Develop baselines and prepare to assess program benefits. Establish 
an integrated assessment program to include enhanced ambient and 
deposition monitoring and develop a baseline prior to implementation of 
the program.
    Ensure the program's credibility and results. Successful trading 
programs require accurate and consistent monitoring of emissions from 
affected sources. Investigate monitoring alternatives (particularly as 
they relate to mercury), propose performance specifications, and 
develop mercury monitoring protocols.
    Maximize flexibility for affected sources. Allow for optimum 
trading of emissions by building on existing Acid Rain electronic 
allowance trading and emissions reporting systems.
    Develop the operating infrastructure. Operation of this program 
will be dependent upon E-Gov infrastructure that must be developed. The 
data collection requirements must be determined and operating software 
and hardware specifications developed. Initial software development 
should also begin.

    Question 2. If the Congress passes a multi-pollutant bill other 
than Clear Skies, perhaps even the Clean Air Planning Act, would that 
$800,000 [that EPA said we need in order to conduct assessments in the 
Clear Skies Initiative] still be appropriate?
    Response. Yes, EPA still believes that we would require resources 
to support programs essential to assessing the effectiveness of any 
pollutant reduction program, particularly those that use a cap and 
trade mechanism. There are needs regardless of whether a legislative or 
regulatory approach is used.

    Question 3. Last summer, EPA staff provided results of their 
analysis of the Clean Air Planning Act. Recently, the data in support 
of that analysis was also provided. EPA's modeling data suggest that 
CAPA is better for public health and the environment than either Clear 
Skies or the recently proposed Interstate Air Quality Rule. CAPA 
reduces sulfur and nitrogen pollution further and faster throughout 
most regions of the country, providing over $50 billion per year more 
in public health benefits by 2020. Yet, EPA's own analysis shows that 
CAPA costs only 2 percent more than Clear Skies to implement over a 20-
year period. Why is EPA proposing to reduce pollution through a costly 
and burdensome regulatory path when we have a solution that is much 
better for the country, but costs only slightly more to implement?
    Response. EPA's analyses show that both CAPA and Clear Skies would 
provide substantial human health and environmental benefits. However, 
EPA's analyses project that CAPA would cost significantly (over 50 
percent) more than Clear Skies. Clear Skies is projected to cost $4.3 
billion and $6.3 billion in 2010 and 2020, respectively. In comparison, 
CAPA's program costs are 53 percent higher in 2010 ($6.6 billion) and 
57 percent higher in 2020 ($9.9 billion). On a present value basis, for 
the period 2005 to 2030, the cumulative cost of the Clean Air Planning 
bill is projected to be $82.7 billion--57 percent more than the present 
value of the cumulative cost of the Clear Skies legislation for the 
same period ($52.5 billion).
    The Administration prefers a legislative approach as proposed by 
the President's Clear Skies proposal, which provides substantial health 
and environmental benefits with certainty, less complexity, and 
reasonable economic impacts. However, absent a legislative change, EPA 
is committed to following the current statutory requirements by 
proposing and finalizing the Clean Air Interstate and Mercury Rules. 
The Clean Air Interstate Rule (CAIR) will help cities and States in the 
East meet new, more stringent national ambient air quality standards 
for ozone and fine particles.
                    utility mercury reductions rule
    Question 4. In a recent article for the Environmental Law Institute 
journal that discussed options for removing mercury from coal fired 
power plants, Assistant EPA Administrator Jeff Holmstead asserted that 
Activated Carbon Injection, a technology expected to reduce mercury 
emissions by 90 percent from coal-fired power generating plants, should 
be available after 2010. If this is the case, why do EPA's proposed 
approaches to control mercury call for a reduction of 70 percent or 
less by 2010 rather than something tighter?
    Response. EPA has proposed the Utility Mercury Reductions 
Rulemaking along with the Clean Air Interstate Rulemaking (CAIR) to 
reduce power sector emissions in an integrated manner. The proposed 15-
ton cap in 2018 reflects a level of mercury (Hg) reductions that almost 
certainly exceeds the level that would be achieved through the 
installation of scrubbers and SCR needed to meet the SO2 and NOx caps 
in the proposed CAIR.
    We believe the proposed 15-ton cap provides an incentive to 
encourage development of Hg control technologies like activated carbon 
injection (ACI), while at the same time providing health, welfare, and 
environmental benefits gained at a justifiable cost. It is not clear, 
however, that ACI will be capable of 90 percent reductions at all coal-
fired plants.
    Our proposed 15-ton cap is grounded largely in the modeling 
completed in support of the President's Clear Skies proposal. This 
modeling suggests that a cap of 15 tons in 2018 does not have a 
significant impact on power availability, reliability, or pricing or 
cause any significant shift in the fuels currently utilized by power 
plants or in the source of these fuels.

    Question 5. Last year, EPW heard testimony from officials of the 
W.L. Gore Company regarding technology they have developed which can 
reduce mercury emissions by as much as 90 percent. Company officials 
believe their technology can be implemented in the near future. EPA has 
had the opportunity to evaluate the technology in its North Carolina 
research facilities and to test it in a more real-world setting. What 
are the results of those tests?
    Response. W.L. Gore and Associates conducted a project examining 
its developmental proprietary mercury control process at the U.S. EPA's 
Air Pollution Prevention and Control Division (APPCD) combustion 
research facilities in Research Triangle Park, North Carolina. The 
testing performed was not funded by EPA and was not conducted as part 
of EPA's research to evaluate mercury control technologies. The Agency 
became involved when W.L. Gore and Associates entered into an agreement 
with ARCADIS, APPCD's onsite contractor, to develop data on their 
process. ARCADIS approached APPCD about using its facilities for the 
testing and an agreement was worked out. On several occasions, APPCD 
has entered into similar agreements with private companies interested 
in using its unique combustion facilities to test their technologies.
    While EPA did not sponsor or conduct the tests, W.L. Gore presented 
the results of its testing at a symposium in 2003. The broad objective 
for this testing was to develop data on a fabric filter-based mercury 
removal concept which is based on using a porous fibrous filtration 
media designed to allow rapid chemical oxidation of incident elemental 
mercury (Hg0) and active binding of the oxidized mercury species to the 
surface of the media. The implementation of this process on coal-fired 
boilers would appear to involve use of mercury-trapping inserts in 
existing or new baghouses.
    Typically new technology for large utility boilers requires testing 
beyond the scale at which W.L. Gore tested their technology at the RTP 
facility. EPA has not performed, or been provided with results of, any 
additional testing performed in a ``real-world setting.'' The 
likelihood that this technology could be implemented widely in the near 
future is unclear.

    Question 6. Under the EPA's Section 111 alternative of the proposed 
Utility Mercury Reductions Rule, when will the Phase II cap level of 15 
tons/year of mercury emissions be achieved? What effect will the safety 
valve provision of the proposed cap-and-trade rule have on the timing 
of achieving the Phase II cap level?
    Response. EPA's Section 111 alternative program would place an 
emissions cap on mercury emissions from coal-fired electricity 
generating units. This cap would be implemented in two phases. The 
second phase of the program would begin in 2018, with a cap of 15 tons 
for emissions from these units.
    Our analysis indicates that mercury emissions in 2018 probably 
would exceed the cap level as a result of banking and/or the safety 
valve provisions. We expect the 15-ton cap to be achieved after the 
2020 timeframe, but due to uncertainties and limitations in the 
modeling, we are uncertain to the actual date. An important feature of 
the proposed mercury cap-and-trade program is the ability for sources 
to reduce emissions below the levels permitted by their emissions 
allowance allocations and bank those allowances for later use. It is 
important to note that the total mercury emitted over the life of the 
program will be the same with or without banking. However, banking of 
allowances provides flexibility to sources to optimize their compliance 
path (lowering compliance costs) and to realize a benefit from 
employing new, more effective technologies. It also encourages greater 
reductions than required during the early years of the program, which, 
in turn, can mean earlier human health and environmental benefits 
relative to what would occur without banking. It can result in 
extending the time until the final cap level is reached, but this 
extended time does not increase total loadings of mercury to the 
environment relative to a program without banking.
    The safety valve is included in the program as a means of 
addressing uncertainty in the cost of mercury emissions controls. When 
the mercury allowance price reaches the safety valve level ($2,187.50 
per ounce), a unit can borrow allowances from its own State's future 
budget, thereby reducing the State's budget in the year(s) from which 
allowances are borrowed. The safety valve, then, sets a maximum 
marginal cost for reducing emissions by making additional allowances 
available in the current year at the expense of the State's future 
budget. As a result, it delays the achievement of further reductions 
until the marginal mercury control cost falls below the safety valve 
price. When this occurs and borrowing from future years ceases, the 
existence of the safety valve--like banking--should not affect the 
cumulative mercury emissions reductions achieved under the program.
    While EPA's IPM results do project that the safety valve price will 
be triggered before the cap is reached, a key limitation of our 
analysis is that it does not take into account the potential for 
advancements in the capabilities of mercury control technology and 
changes in their costs over time. We expect that innovations in mercury 
control technology will result in marginal mercury control costs being 
smaller than what we project in our analysis, as was the case with SO2 
control costs under the Acid Rain Program.

    Question 7. There is significant public concern regarding the role 
and impacts of mercury in the environment, including the potential for 
``hotspots.'' Does the EPA have the capacity to track, on a continuing 
basis, changes in human health and the environment due to mercury 
emissions reductions required by the proposed Utility Mercury 
Reductions Rule?
    Response. There are EPA programs and some State programs that 
collect data on mercury in the environment. The National Atmospheric 
Deposition Program's (NADP) Mercury Deposition Network (MDN) routinely 
measures wet atmospheric deposition of mercury (There is currently no 
routine method available for measuring dry atmospheric deposition of 
mercury). States often monitor for mercury contamination in fish, with 
a particular focus on areas of enhanced fishing pressure. EPA's fish 
advisory program maintains a data base of fish tissue concentrations, 
submitted voluntarily by State, tribal, and territorial fish advisory 
programs. EPA is also currently conducting a national screening-level 
freshwater lake fish contamination study. The National Fish Tissue 
Study is the first national fish tissue survey to be based on a 
probabilistic (random) sampling design. The statistical design of the 
study may allow EPA to develop national estimates of the mean 
concentrations of mercury in fish tissue from lakes and reservoirs of 
the lower 48 States.
    The Center for Disease Control's National Health and Nutrition 
Examination Survey (NHANES) has routinely collected information on 
blood levels of mercury (from all sources) in women of childbearing age 
and some children and will begin collecting data on everyone surveyed 
in 2005 or 2006.
    None of these empirical monitoring studies specifically measures 
potential human health impacts associated with mercury emissions from 
utilities. However, EPA uses models to estimate how mercury emissions 
from utilities and other sources disperse in the atmosphere, cycle 
through the environment, and affect methylmercury levels in fish. EPA 
continues in efforts to improve upon the ability of these models to 
accurately predict mercury levels in the environment as well as to 
adequately characterize the uncertainties associated with these 
predictions.

    Question 8. Are methods and networks available to routinely 
monitor, collect, and compile data on the status and trends of mercury 
and its transformation products in emissions from affected facilities, 
atmospheric deposition, surface water quality, and biological systems?
    Response. There are programs that routinely collect data on mercury 
in the environment. While there is currently no method or protocol that 
can track or measure the human health impact of mercury emissions 
specifically from utilities, there are approaches for estimating or 
predicting human exposures from mercury emissions from utilities using 
models and risk assessment methodologies. EPA continues in efforts to 
reduce the uncertainties in these models and methodologies.
    The National Atmospheric Deposition Program's (NADP) Mercury 
Deposition Network (MDN) routinely measures wet atmospheric deposition 
of mercury. (There is currently no routine method available for 
measuring dry atmospheric deposition of mercury.) States frequently 
monitor fish tissue for mercury levels, and EPA's fish advisory program 
compiles these data in its own data base. But differences in current 
sampling methodology (non-random, and a variety of fish species) make 
these data difficult to use for trend analysis. However, EPA is 
currently conducting a national screening-level freshwater lake fish 
contamination study. The National Fish Tissue Study is the first 
national fish tissue survey to be based on a probabilistic (random) 
sampling design. EPA plants to use the study to provide a baseline to 
track progress of pollution control activities, and to identify areas 
where contaminant levels are high enough to warrant further 
investigation. These data sources consider all sources of human 
exposure to mercury, not just utility emissions.
    In addition, EPA's STOrage and RETrieval (STORET) system, a 
repository for water quality data, contains limited data on 
concentrations of mercury in surface waters. EPA's Permit Compliance 
System (PCS) contains data on mercury concentrations in wastewater 
effluent from facilities with discharge permits requiring mercury 
analyses. However, historical mercury surface water and effluent data 
are generally not reliable. There was a growing awareness in the 1990's 
that existing mercury water sampling and analytical techniques were 
prone to contamination and produced artificially high measurements. For 
this reason, water mercury data in STORET and PCS is not adequate for 
purposes of trend analysis. EPA has recently made final an ultra-clean 
technique method for analyzing mercury in water (method 1631) and has a 
draft method for methyl mercury (method 1630). These recently developed 
methods will allow States to accurately assess the status of mercury 
contamination in their waterbodies. (Note: methods promulgated in 40CFR 
Part 136, such as method 1631, are required only when establishing 
wastewater effluent limits.)

                      INTERSTATE AIR QUALITY RULE

    Question 9. The Administration's Clear Skies Initiative included 
environmental accountability provisions addressing monitoring and 
assessment needs. In the absence of legislation, does the EPA (alone or 
in cooperation with other Federal agencies) have the capacity to track, 
on a continuing basis, changes in human health and the environment due 
to SO2 and NOX emissions reductions required by the proposed Interstate 
Air Quality Rule?
    Response. EPA has developed a National Monitoring Strategy in order 
to use currently available monitoring resources more efficiently. This 
strategy is the result of a significant partnership with State/Tribal/
Local governments and academia. It examines the current monitoring 
networks and redesigns them to yield more targeted measurements for 
more pollutants. The strategy addresses multi-pollutant needs and is 
consistent with the recently released National Academy of Sciences 
report ``Air Quality Management in the United States'' which states 
that although the progress has been achieved in terms of cleaner air 
and improved health, a multi-pollutant approach is needed to meet 
future challenges. Networks that monitor air quality have documented 
decreases in concentrations of the criteria pollutants, but greater 
consideration must be given to how air pollution is transported across 
geo-political borders. In addition to the new National Monitoring 
Strategy, EPA has other mechanisms in place to ensure tracking and 
reporting of changes in air quality. For example, EPA recently 
published a trends report that summarizes progress in reducing levels 
of ozone and examines the link between air quality and emission 
reduction programs for precursors such as NOx and VOC. The Air Quality 
Index (AQI) is another mechanism that provides a link between measured 
pollutants and prevention of adverse health effects.
    With respect to ecological (non-human health) effects, EPA has 
detailed the extent of our air quality, atmospheric deposition, and 
acidic surface water monitoring programs in our answer to the following 
question. These monitoring programs have operated for many years, in 
some cases for over 20 years, and we expect them to continue to operate 
in the future. Most of these networks are operated in conjunction with 
other agencies and organizations. For example, the National Atmospheric 
Deposition Program (NADP) is a long-term collaborative effort between 
EPA, other Federal agencies (particularly USGS), States, universities, 
and Indian Tribes.
    While EPA, in conjunction with our partners, has been able to 
successfully assess the health and environmental impacts of pollution 
control programs, there are new challenges facing many of the 
monitoring networks. For example, at many atmospheric deposition 
monitoring sites the equipment has been in continuous use for over 20 
years, and the networks now require wholesale refurbishment in order to 
continue collecting high quality data. Both EPA and our partners are 
determined to address environmental accountability in the most holistic 
manner possible.

    Question 10. Are sufficient methods and networks available to 
routinely monitor, collect, and compile data on the status and trends 
of sulfur and nitrogen in the environment due to changes in emissions 
from affected facilities, including ambient pollutant concentrations, 
atmospheric deposition, surface water quality, and biological systems?
    Response. Long-term environmental monitoring efforts are considered 
crucial to assessing the effectiveness of air pollution control 
programs. Below are description of networks that the Environmental 
Protection Agency uses to track status and trends for sulfur and 
nitrogen in the environment.
    The EPA manages an ambient air quality network that is implemented 
primarily by State and local agencies to meet requirements related to 
the national ambient air quality standards. Sulfur dioxide and nitrogen 
dioxide are routinely monitored. The network includes a subset of sites 
which emphasize urban and multi-source areas. Another ambient air 
network that provide sulfur and nitrogen information is the Interagency 
Monitoring of Protected Visual Environments (IMPROVE). It is focused on 
visibility and regional haze.
    The EPA administers the Clean Air Status and Trends Network 
(CASTNET), a long-term, routine monitoring network specifically 
designed to determine the effectiveness of national and regional 
emission reduction programs and provide trends information in regional 
air quality and atmospheric deposition. The sites use consistent 
methods for observing long-term and significant changes in atmospheric 
composition. The EPA is recognizing that different options for 
continued operation of CASTNET are based on the assumption that the 
network infrastructure needs refurbishment. The National Atmospheric 
Deposition Program National Trends Network (NADP/NTN) provides the 
longest record of precipitation chemistry across the U.S. for examining 
geographical and temporal long-term trends. Together, CASTNET and NADP/
NTN allow for a regional assessment of total (dry + wet) acid 
deposition throughout the U.S. for sulfur and nitrogen species. The 
NADP is a cooperative effort among many partners.
    In addition to routine ambient and deposition monitoring networks, 
EPA administers the Temporally Intensive Monitoring of Ecosystems 
(TIME) project on surface water chemistry. Similarly, EPA Long Term 
Monitoring (LTM) sites in acid sensitive regions of the northern and 
eastern U.S. monitor lakes and streams for responsiveness to changes in 
deposition loadings of sulfur and nitrogen among other parameters. A 
key issue for the evaluation of the 1990 Clean Air Act Amendments is 
the relationship between trends in deposition and trends in surface 
water chemistry.
    Furthermore, State, local and tribal pollution control agencies 
conduct water quality monitoring to support assessments related to the 
Clean Water Act. Atmospheric deposition of pollutants such as nitrogen 
may be identified by a State as a cause for water quality impairment. 
Monitoring data include biological, chemical and physical data, habitat 
assessments, and toxicity data. The EPA also has been working with 
States to develop bioassessment programs and biocriteria to better show 
the cumulative impacts of pollutants on aquatic life. These water 
quality data may be used together with atmospheric deposition data to 
relate water quality conditions to changes in deposition.

                              METCHEM SITE

Delaware City, Delaware
    Question 11. For the past 2 years, the EPA has been working to 
address the problems at the Metachem facility in Delaware City, 
Delaware. The Metachem site included an existing superfund site when 
the owners abandoned the factory in 2002. The EPA and the State of 
Delaware responded immediately and have been working to prevent any 
releases of chemicals from the factory. Does the EPA fiscal year 2005 
budget request include sufficient funds to allow EPA to continue 
aggressive operations at Metachem throughout fiscal year 2005?
    Response. The Standard Chlorine of Delaware (aka Metachem) site, in 
New Castle County, Delaware, was a responsible party-lead site until 
2002. At that time the site owner, Metachem Products, LLC, declared 
bankruptcy. EPA's removal program is now removing chemicals from the 
site and performing operations that minimize the potential for 
chemicals that remain at the site to threaten the nearby community or 
the environment. EPA has conducted its actions in a prioritized manner 
that focuses on the most critical risks. Since 2002, the EPA removal 
program has spent $16 million on its ongoing activities at the site, 
and EPA has recently approved an additional $6.8 million to continue 
its emergency removal operations. EPA has sufficient funds to continue 
its planned and ongoing removal activities through fiscal year 2005.

    Question 12. Does the EPA's superfund account have the funds 
necessary to continue operation at the Metachem site and at all of the 
other superfund sites nationwide?
    Response. Since 2002, the Superfund Removal Program has spent $16 
million on its ongoing activities at the site, and EPA has recently 
approved an additional $6.8 million to continue its emergency removal 
operations. EPA has sufficient funds to continue its ongoing removal 
activities. The Administration's Superfund budget request for fiscal 
year 2005 was $1.38 billion. This included a request for a $150 million 
increase for the Superfund long-term cleanup (remedial action) program. 
This represents a $124 million increase from fiscal year 2004 Superfund 
appropriation levels. Final decisions on funding new construction 
projects in fiscal year 2004 and fiscal year 2005 will not be made 
until later in the fiscal year.

                            MOTIVA REFINERY

Delaware City, Delaware
    Question 13. The Motiva refinery in Delaware City is the largest 
source of sulfur dioxide emissions in the Nation, and has recently 
agreed to an EPA order to reduce those levels. The owners of that 
refinery have announced plans to sell to a new owner. I appreciate 
EPA's affirmation that the new owner will be held to the same 
expectations as Motiva. However, if the new owner seeks to delay 
installation of pollution control technology, would you take action to 
force them to meet the original timelines and cleanup the refinery on 
schedule?
    Response. The Delaware City Refinery is one of four Motiva 
refineries nationwide (others are located in Louisiana and Texas) that 
is covered by the terms of a 2001 civil judicial consent decree entered 
into with the United States and the State of Delaware. The Consent 
Decree establishes an aggressive schedule for the installation of new 
controls and improved operations at Delaware City, which is the largest 
single source of SO2 emissions among refineries in the Nation, although 
there are other larger sources of SO2, such as TVA's coal-fired power 
plants and Ohio Edison's W.H. Sammis power plant in Stratton, Ohio.
    On May 1, 2004, Premcor, headquartered in Old Greenwich, 
Connecticut, completed its purchase of the Delaware City Refinery. As a 
result, Premcor immediately assumed all of the obligations and 
responsibilities at Delaware City set out in the Consent Decree, 
including the schedule and timelines for installation of new controls. 
In addition, as a measure to help ensure that there is no slippage or 
delay in the scheduled installation of new controls and other 
obligations by Premcor at Delaware City, EPA and the Department of 
Justice, together with the State of Delaware, have negotiated an 
amendment to the Consent Decree. The amendment would specifically 
commit Motiva to continue to make its technical resources available 
throughout the permitting and construction processes for the primary 
air pollution control technologies to be installed at the Delaware City 
Refinery. Noncompliance with the schedule for installation of controls 
and other required actions would potentially subject both Premcor and 
Motiva to stipulated penalties and/or other appropriate sanctions. The 
sale does not affect the ability of EPA and the United States to act to 
ensure compliance with the Decree.

                     COMBINED SEWER OVERFLOWS (CSO)

    Question 14. Combined Sewer Overflows are expensive to fix, and 
cities such as Wilmington Delaware and Washington DC need help in 
addressing the impacts of outdated sewers on water quality in our 
rivers and streams. Does the fiscal year 2005 budget request include 
increased funding to help States address CSO problems? Is it enough?
    Response. The fiscal year 2005 President's Budget continues his 
commitment to Combined Sewer Overflows (CSO) correction and other 
infrastructure investment by proposing to continue to fund the CWSRF 
through 2011, providing an additional $4.4 billion in Federal 
capitalization of these State funds beyond the last Administration's 
funding plan. The President's proposal will significantly increase the 
CWSRF's capability to fund CSO projects in both the near and long 
terms. The Clean Watersheds Needs Survey 2000 Report to Congress lists 
$50.6 billion in national needs for CSO correction. To date, financing 
of wastewater infrastructure and other Clean Water Act programs through 
the Clean Water State Revolving Fund (CWSRF) has surpassed $43 billion. 
States chose to apply $3.6 billion of that amount to CSO correction 
projects to supplement the local utility revenues directed toward this 
problem.

    Question 15. Do you think we could work together to develop a 
solution that addresses CSO problems and is acceptable to all parties?
    Response. EPA strongly endorses collaborative processes to generate 
solutions to environmental challenges. To address the unique challenges 
facing Combined Sewer Overflow (CSO) communities, EPA and our 
stakeholders need to work together to develop innovative solutions to 
resolve the financial and technical issues that impact these 
communities. Some of EPA's efforts in this area are described below. 
Essential to the development of solutions on the local level will be 
the involvement of a wide range of stakeholders within the community 
including the State and local government, POTW operators, environmental 
groups, engineering firms, and other sectors.
    EPA is working on the following activities to ensure better 
implementa-tion of the CSO Program:

      Guidance to ensure compliance with the requirement of the 
2000 Wet Weather Water Quality Act that requires CSO permits and orders 
``shall conform to'' the 1994 CSO Policy
      A Report to Congress that summarizes the public health 
and environmental impacts of CSOs and SSOs, identifies the resources 
spent by municipalities to address these impacts, and evaluates the 
technologies used by the municipalities to address these impacts. The 
Agency plans to develop and maintain a technology clearinghouse that 
will assist communities in selecting remedies to control CSO 
discharges.
      Encouraging the use of EPA's Guidance: Coordinating CSO 
Long-Term Planning With Water Quality Standards Reviews as CSO 
communities, NPDES and water quality standards authorities, and 
stakeholders coordinate in the development of CSO long-term control 
plans.

    Future EPA efforts will focus on advocating sustainable solutions 
including efficient management methods, cost effective approaches to 
selection of CSO control alternatives, and real cost pricing by 
utilities. Additional funding, in the form of the Administration's 
Clean Water State Revolving Fund capitalization plan, will help to 
support this effort. Under the President's plan, CWSRF funding at $850 
million a year through 2011 could raise the revolving level of the fund 
to $3.4 billion per year, a 70 percent increase over the $2 billion 
targeted by prior Administrations. It will result in total Federal 
capitalization of the fund of close to $27 Billion, more than 3 times 
the original CWA authorized level of $8.4 billion.
                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                                 Chafee

                               SUPERFUND

    Question 1. I understand that EPA has made a commitment to 
completing the ongoing cleanups at existing Superfund sites. Could you 
please describe how EPA prioritizes the allocation of its Superfund 
budget at existing sites? Also, while it is clearly important to finish 
the cleanup process at ongoing sites, EPA is still taking on the 
important task of listing new sites on the NPL. With the strain on 
cleanup dollars, what can new Superfund sites reasonably anticipate in 
terms of allocation of Superfund dollars?
    Response. Cleanup work at Superfund sites is usually comprised of 
several discrete activities that may be related but are not conducted 
simultaneously. When we begin work on a separate activity it is a 
program priority to finish it. Each separate activity at a site is 
evaluated by a Panel of national program experts with representatives 
from each region. The Panel considers relative risk to human health and 
the environment. This Panel's evaluation is a prime consideration in 
setting funding priorities.
    EPA is strongly committed to ushering new Superfund NPL sites 
through the cleanup process even as we complete cleanups at existing 
NPL sites. Once a site is added to the NPL (and even prior to final 
listing), EPA engages in numerous activities to characterize the site 
contamination and its extent; develop, select, and design remedies to 
achieve cleanup goals; and engage State and local stakeholders in the 
record-of-decision and the cleanup processes. In fiscal year 2004, EPA 
allocated approximately $155 million to these and other functions (such 
as State capacity development, pre-NPL site assessment, records 
management, information technology). EPA plans to maintain this same 
level of funding to continue these activities in fiscal year 2005 
provided the Congress enacts the President's 2005 request.

    Question 2. I understand that the Office of Enforcement and 
Compliance Assurance is developing a uniform procedure for application 
of the Service Station Dealers Exemption at used oil Superfund sites. 
This is necessary because there are many former oil recycling 
facilities that mismanaged used oil collected for recycling and 
disposal. Unfortunately, many of these sites have been listed on the 
National Priorities List. With an eye toward preventing existing oil 
recyclers from becoming future Superfund sites, please describe in 
detail programmatic and enforcement activities EPA is currently 
undertaking at operational used oil recycling facilities?
    Response. EPA recently launched the ``You Dump It, You Drink It'' 
campaign, aimed at the Hispanic automotive repair and service industry 
and consumers. Despite the fact that about half of all automotive 
mechanics in the United States are Hispanic, little if any Spanish-
language material exists for the automotive repair industry and those 
consumers who change their own motor oil. EPA hopes to fill this void 
through a widespread distribution of these materials, which include 
posters, brochures and bumper stickers.
    EPA recently requested comment on the Draft Model CERCLA 
Application/Information Request for Service Station Dealers, 69 Fed. 
Reg. 5,147 (2004), which would be used by the Agency to help decide 
which service station dealers qualify for the CERCLA Service Station 
Dealer Exemption. CERCLA provides an exemption from Superfund liability 
for certain ``service station dealers'' who accept ``do-it-yourselfer'' 
used oil and send it to another facility for recycling. The exemption 
is intended to encourage service station dealers to accept for 
recycling used oil generated by households by removing the fear of 
liability in the event the used oil recycling facility to which it is 
sent becomes a Superfund site. The exemption applies, however, only if 
the service station dealer itself managed the used oil in accordance 
with the Agency's used oil management standards while in its 
possession. The comment period on the Federal Register notice has 
recently closed. EPA is currently evaluating the comments and plans to 
finalize the Draft Model CERCLA Application/Information Request.
    EPA takes appropriate enforcement actions to enforce the used oil 
management regulations. For example, the Agency recently prevailed in a 
case against the Dearborn Refining Company. Dearborn is a blender/
marketer of lubricating and metalworking products primarily from virgin 
oils and various additives. Dearborn also receives, stores and 
processes used oil. Sampling from a multimedia inspection conducted by 
EPA in 1999 detected the presence of petroleum products in surface 
soils and water, subsurface soils, and groundwater. As part of a larger 
effort to clean up the Detroit and Rouge watersheds, EPA Region V had 
explored several approaches to achieving a cleanup at the Dearborn 
facility. After Dearborn failed to comply with a RCRA Section 7003 
order, the Region brought an enforcement action for violations of the 
used oil regulations. The Administrative Law Judge assessed a penalty 
of $1.25 million and ordered Dearborn to comply with the regulations. 
EPA's case against Dearborn is one of several ongoing matters that are 
part of the Agency's Corrective Action Smart Enforcement Strategy 
(CASES) effort. CASES is an effort to compel facilities to address 
hazardous waste contamination that is potentially harmful to human 
health. EPA's goal is to have human exposures controlled by 2005 at 95 
percent of facilities that were identified in 1999 as high priorities 
for cleanup under RCRA.
    On January 29, 2004, the Agency won a remand from the Environmental 
Appeals Board in Consumers Recycling, Inc., another case involving a 
used oil recycler. In this multimedia enforcement action, a Michigan 
scrap yard failed to notify the State of its used oil processing 
activities and to prepare a waste analysis plan. The Board ordered the 
Administrative Law Judge to develop the record for deciding the 
important issue of whether Consumers is a used oil generator or a used 
oil processor.

                       PHASE II STORM WATER RULE

    Question 3. Beginning last March, States and municipalities with 
urbanized areas are in the process of coming into compliance with the 
EPA Phase II Storm Water Rule. The 2002 EPA Gap Analysis estimates 
nationwide stormwater funding needs at $8.3 billion over the next 20 
years. With limited funding available for the nation's drinking water 
and wastewater infrastructure needs, the Clean Water and Drinking Water 
State Revolving Loan Funds will act as the primary source of funding 
for basic infrastructure projects. For many Northeastern States, little 
to no funding is available through the SRFs for addressing stormwater 
concerns. What other sources of funding has EPA identified to assist 
States in meeting their Phase II stormwater needs?
    Response. EPA operates the Environmental Finance Program (EFP) as a 
way to assist communities in their search for funding opportunities. 
Key to this effort is EPA establishing nine universities in the United 
States as regional Environmental Finance Centers (EFCs) to help States 
and regulated entities manage environmental mandates required by 
Federal law. The EFCs are located at the University of Maryland, 
University of New Mexico, Syracuse University, Boise State University, 
Cleveland State University, California State University at Hayward, 
University of Louisville, University of Southern Maine, and University 
of North Carolina at Chapel Hill. Visit www.epa.gov/efinpage for more 
information on the EFC Network and each of its regional centers. These 
sites contain extensive, up-to-date information on funding sources, 
training, and case studies on how communities can access funds and use 
those funds to pay for various environmental programs, including storm 
water management. One of the key tools of many of these EFCs is the 
ability to search for funding sources for specific environmental 
programs. As an example, a search for ``stormwater'' identifies 50 
potential funding sources.

    Question 4. For many States with large urban areas, the Clean Water 
Act 319 funding stream has provided a significant source of funding for 
addressing nonpoint source pollution primarily caused by stormwater 
runoff. How is EPA working to ensure that States with smaller amounts 
of agricultural land, but large urban areas, will be able to continue 
to have the necessary flexibility to utilize 319 funding for their 
highest priority nonpoint source pollution problem?
    Response. EPA's newly published guidelines, Nonpoint Source Program 
and Grants Guidelines for States and Territories (68 FR 60653, October 
23, 2003), provides numerous additional examples of stormwater 
activities that are eligible for Section 319 funding and, by extension, 
are also fundable as nonpoint source projects under the State Revolving 
Loan Program under Section 601(a)(2):

      Technical assistance to State and local storm water 
programs;
      Monitoring needed to design and evaluate the 
effectiveness of implementation strategies;
      Best management practices (BMP) for pollution prevention 
and runoff control (except for BMP's required by a draft or final NPDES 
permit;
      Information and education programs;
      Technology transfer and training; and
      Development and implementation of regulations, policies, 
and local ordinances to address storm water runoff. (These may apply to 
areas covered by NPDES permits, provided that the regulations, policies 
and ordinances apply to non-permitted areas as well.)''

                            CLEAN WATER ACT

    Question 5. Governor Leavitt, while I was pleased to see that the 
Administration decided to halt plans for issuing a new rule redefining 
federally protected streams and wetlands, I am concerned that the 
guidance document jointly issued by EPA and the Army Corps of Engineers 
in relation to the Supreme Court's SWANCC decision is still in effect. 
This guidance removes Clean Water Act protections for what your agency 
has estimated to be about 20 million acres of wetlands.
    Given the decision not to proceed with the rule changes, and the 
recent GAO study which revealed that, at least for Corps of Engineers 
Districts, this guidance is resulting in widely varying interpretations 
of Clean Water Act jurisdiction, has your agency reconsidered the need 
for withdrawal or revision of this guidance document?
    Response. EPA and the Corps are taking a number of steps in 
response to the Supreme Court's decision in Solid Waste Agency of 
Northern Cook County (SWANCC). As we implement these actions and 
monitor their effectiveness, we will continue to assess the adequacy of 
existing field practices, guidance, and training programs and take 
appropriate steps to ensure Clean Water Act jurisdiction is correctly 
determined.
    On January 15, 2003, EPA and the Army Corps of Engineers (Corps) 
issued joint legal guidance that clarified the scope of ``waters of the 
United States'' in light of the U.S. Supreme Court's decision in Solid 
Waste Agency of Northern Cook County (SWANCC) and subsequent judicial 
decisions (68 Fed Reg 1991, 1995 [January 15, 2003]). We respectfully 
disagree that the guidance removes 20 million acres from CWA 
protections. Rather, it clarifies for Corps and EPA field staff how the 
agencies are interpreting the jurisdictional status of isolated, 
intrastate, non-navigable waters in light of SWANCC and subsequent 
judicial rulings. The guidance states that field staff may no longer 
assert jurisdiction over isolated, intrastate, non-navigable waters 
based solely on the presence of migratory birds, and that agency 
headquarters approval should be obtained prior to asserting 
jurisdiction over such waters based solely on other types of commerce 
links. The legal memorandum emphasizes that field staff should continue 
asserting jurisdiction over navigable waters, their tributary systems, 
and adjacent wetlands. The memorandum also emphasizes that 
jurisdictional calls must reflect existing regulations and relevant 
case law. Consistent with this legal guidance, field staffs at both EPA 
and the Corps continue to vigorously implement and enforce programs 
affecting all ``waters of the United States'' protected under the CWA 
after SWANCC.
    The guidance specifically provides that Headquarters concurrence is 
applicable only to isolated waters that are both intrastate and non-
navigable. Given the rationale and reasoning in SWANCC and the 
extensive and varied case law since, the Agency believes it is 
appropriate for Headquarters to play a role before jurisdiction is 
asserted over such waters on the basis of commerce clause factors, both 
to ensure consistency with applicable case law and to foster national 
consistency on how such issues are approached.
    As the question notes, on December 16, 2003, EPA and the Corps of 
Engineers jointly announced that we would not issue a new rule on 
Federal regulatory jurisdiction over isolated wetlands. At the same 
time, the agencies emphasized that they would continue to monitor 
implementation of section 404 and other Clean Water Act (CWA) programs 
to ensure their effectiveness. The continued viability and utility of 
the January 2003 joint legal memorandum is one of the factors that the 
agencies are monitoring. At present, EPA and the Corps have no specific 
plans to withdraw it.

                MUNICIPAL WASTEWATER TREATMENT AGENCIES

    Question 6. With a law in place to assist the nation's drinking 
water facilities in meeting their security needs, how is EPA working to 
ensure that municipal wastewater treatment agencies have the necessary 
resources to perform vulnerability assessments and make basic security 
enhancements to their plants?
    Response. The President designated EPA as the Sector Specific 
Agency for the water sector, which in HSPD-7 specifically includes both 
drinking water and waste water systems. As such, EPA's efforts are not 
confined to assisting drinking water utilities, but instead include a 
robust program to help improve the security of the Nation's waste water 
systems. Although the Bioterrorism Act of 2002 requires certain 
drinking water systems to submit vulnerability assessments and 
emergency response plan certifications, there are no comparable 
requirements for wastewater facilities. However, the Agency has heavily 
promoted tools and assistance with which wastewater utilities can 
conduct vulnerability assessments and prepare emergency response plans.
    Since September 11, 2001, the Agency has taken a number of 
different actions to help support wastewater utilities with their 
security needs, and as a result, many wastewater utilities are adopting 
aggressive security measures. With funding from the Agency, 
stakeholders have developed vulnerability assessment and emergency 
response tools, provided security training, developed and implemented 
their waste water research action plan, and provided technical 
assistance to wastewater utilities. While these efforts have led to 
significant improvements in the preparedness of waste water systems, we 
will continue to develop and refine the tools and assistance we provide 
to the sector as part of our ongoing responsibilities and duties as the 
Sector Specific Agency.
                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                                Clinton

                              MERCURY RULE

    Question 1. A January 21 letter to you from Eric Schaeffer, a 
former EPA enforcement official, asks you to clarify discrepancies 
between the levels of mercury reductions that EPA has claimed will 
result from its cap-and-trade rule and the results of an EPA model run 
of the Clear Skies proposal. That letter says:

  ``EPA's emissions estimates for Clear Skies which include the same 
    timetables and targets for mercury as the December 15 proposed cap 
    and trade rule, are developed through its Integrated Planning 
    Model, which is available on EPA's website. The IPM model compares 
    likely emissions under Clear Skies to a ``base case,'' and includes 
    several variations to take into account regulatory and market 
    uncertainties.''

    Regarding the table, Mr. Schaeffer says that ``As the table 
illustrates, contrary to EPA's public statements, its mercury cap and 
trade proposal does not come close to reducing mercury emissions 70 
percent by 2018. Indeed, while EPA cautions that emissions projections 
for later years are less reliable, the model projects that mercury 
emissions will decline by no more than 52 percent as late as 2026.''
    How do reconcile the difference between your stated mercury 
reduction targets and the results of your own models?
    Response. The proposed mercury cap-and-trade program would place an 
emissions cap on mercury emissions from coal-fired electricity 
generating units. This cap would be implemented in two phases. The 
second phase of the program would begin in 2018, with a cap of 15 tons 
for emissions from these units. When this cap is fully implemented, 
emissions from affected units would be reduced by approximately 70 
percent. Further explanation of how such a cap and trade system works, 
similar to the successful acid rain program, reveals why statements 
such as ``reducing mercury emissions by 70 percent in 2018'' are 
incorrect.
    An important feature of the proposed mercury cap-and-trade program 
is the ability for sources to reduce emissions below the levels 
permitted by their emissions allowance allocations and hold or ``bank'' 
those allowances for later use. Banking encourages greater reductions 
than required during the early years of the program, which, in turn, 
can mean earlier human health and environmental benefits relative to 
what would have occurred without banking. It also provides flexibility 
to sources to optimize their compliance path so they can keep their 
compliance costs down, thus benefiting their customers, and realize a 
benefit from employing new, more effective technologies. The total 
mercury emitted over the life of the program will be the same with or 
without banking. Banking can result in extending the time until the 
final cap level is reached, but this extended time does not increase 
total loadings of mercury to the environment relative to a program 
without banking.

    Question 2. As I mentioned in my opening statement, I am opposed to 
the mercury trading component of your proposed power plant rules 
because I am concerned about hotspots. I understand that EPA has 
dismissed this concern, but it is also my understanding that the 
regulatory docket does not contain any information on hotspots. What 
analyses did the Agency do or what information does the Agency have on 
mercury hotspots under the trading schemes proposed?
    Response. EPA does not dismiss the concern about hot spots, either 
for mercury or for any other pollutant. Analyses to examine the effects 
of the Clean Air Mercury Reduction Rule are underway and will be 
provided to Congress and the public when completed.

    Question 3. It has been reported that the Agency has incorporated, 
verbatim into the proposal sections of industry white papers. Assistant 
Administrator Holmstead has been quoted as saying these passages ``came 
to him during interagency review.'' To what extent did personnel other 
than EPA staff contribute to the substance of this proposal? And why?
    Response. Executive Order 12866 requires all significant agency 
rulemakings to be submitted to the Office of Management and Budget for 
review. As part of that review, other executive departments and 
agencies have the opportunity to review and comment on the rulemaking. 
This executive order was issued during the Clinton Administration and 
remains in effect today. The draft proposed mercury rule was submitted 
to OMB for review pursuant to the executive order. The Clean Air Act 
requires documents related to such a review to be placed in the public 
docket. We have complied with this docketing requirement, and the 
documents provide an indication of who participated in the review and 
to what degree.

    Question 4. Regarding the emissions trading approaches for mercury 
preferred by the Agency, your advisor, Philip Angell, has been quoted 
as saying ``Sure there are concerns about legal problems with this 
(trading) approach, but that doesn't mean you shouldn't try it.'' How 
does the Agency reconcile the potential delays in this legal 
experiment, which will likely be tied up in the courts for years, with 
its mandate to protect the public health from a persistent, 
bioaccumulative neurotoxin like mercury?
    Response. The Clean Air Mercury Rule represents the first time 
under any administration that EPA has proposed to require coal-fired 
power plants to reduce their mercury emissions. We are committed to 
completing the rule in an expeditious fashion and will vigorously 
defend any challenge to the final rule.

    Question 5. What advice have you received from your Office of 
General Counsel regarding the legality of mercury emissions trading?
    Response. EPA believes that a trading program is the best overall 
system for controlling mercury emissions from utilities because it 
achieves the best balance of health protection, costs, and incentives. 
EPA's legal justifications for its proposed mercury rules are set forth 
in the preamble to the proposal. We are taking comment on all aspects 
of the proposal, including legal issues, and will carefully review all 
comments we receive.

                           NEW SOURCE REVIEW

    Question 6. On November 5, 2003, a few days before you took your 
post, EPA announced that it would no longer investigate or prosecute 
past violations of the Clean Air Act's new source review (NSR) 
requirements where the alleged conduct fell within a new ``equipment 
replacement'' exemption that was set to take effect on December 26.
    On December 24, the U.S. Court of Appeals for the D.C. Circuit 
stayed the equipment replacement exemption, concluding that it was 
likely unlawful and threatened irreparable harm to the public.
    Since that time, the EPA and the Justice Department initiated 
several new NSR enforcement actions, but they were related to 
violations that were outside the scope of the new ``equipment 
replacement'' rule.
    My question is this: Will EPA refer to the Justice Department any 
of the more than fifty outstanding NOVs identifying conduct that is 
within the scope of the ``equipment replacement'' exemption that was 
stayed by the courts?
    Response. The ``equipment replacement'' rule primarily affects 
power plants. EPA has issued 15 NOVs to coal-fired power plants, and in 
all but one case the violations alleged in the NOVs have been referred 
to the Department of Justice. The non-referred NOV is currently the 
subject of active settlement negotiations. In addition, EPA has 
referred a significant number of other coal-fired power plant cases for 
which it has not issued, or does need not need to issue NOVs. Where EPA 
identifies violations, EPA plans to develop referrals of coal-fired 
power plant cases. Decisions about which new cases to refer will be 
guided by a myriad of factors, including expected environmental 
benefits likely to accrue from prosecution of the violations, as 
compared with the cases already referred.

                         ENVIRONMENTAL JUSTICE

    Question 7. The March 1 EPA Inspector General's Report on 
Environmental Justice was quite clear in its conclusion that EPA has 
neither fully or consistently complied with the 1994 Executive Order 
that required all Federal agencies to identify and address 
disproportionately high and adverse human health and environmental 
effects of its programs and policies on minority and low-income 
populations.
    The Inspector General's basic criticism is that EPA's Environmental 
Justice officials have not only failed to identify the minority land 
low-income populations that are the intended beneficiaries of the 
Executive Order, but are saying now saying that it is not necessary for 
them to do so.
    Please explain how the Executive Order to ensure minority and low-
income communities are not burdened by disproportionately high levels 
of air and water pollution or exposure to toxic wastes can be met if 
EPA cannot identify these minority and low income populations.
    Response. The Agency believes that the intent of the Executive 
Order is to ensure that environmental actions or decisions do not 
result in disproportionately high and adverse human health or 
environmental effects by ensuring that the analysis of these effects 
includes the examination of secondary effects, cultural concerns, and 
cumulative impacts/effects. While such effects can occur in any 
community, the Agency recognizes that significantly greater adverse 
effects are often correlated with minority populations and/or low-
income populations. Thus, EPA's approach includes collecting and 
analyzing information on demographic factors and other relevant data, 
as well as the actual environmental and human health effects themselves 
as part of the scoping process.
    The Agency's Office of Enforcement and Compliance Assurance is 
currently formulating its response to the Inspector General's report, 
``EPA Needs to Consistently Implement the Intent of the Executive Order 
on Environmental Justice,'' (http://www.epa.gov/oigearth/
publications.htm). The Agency's written response will be submitted to 
the Inspector General's office on 3 June 2004; we would be happy to 
answer any additional questions you may have that are not addressed in 
the Agency's response.

    Question 8. As the IG notes in its report, it is already EPA's 
general mission to ensure adequate environmental protections for all 
members of the public, and the 1994 Executive Order on Environmental 
Justice was not meant to reiterate this mission, but ``was specifically 
issued to provide environmental justice to minority and/or low income 
populations due to concerns that those populations had been 
disproportionately impacted by environmental risk.'' Do you disagree 
that was the purpose--and language--of the Executive Order?
    Response. The Agency believes that the intent of the Executive 
Order is to ensure that environmental actions or decisions do not 
result in disproportionately high and adverse human health or 
environmental effects by ensuring that the analysis of these effects 
includes the examination of secondary effects, cultural concerns, and 
cumulative impacts/effects. While such effects can occur in any 
community, the Agency recognizes that significantly greater adverse 
effects are often correlated with minority populations and/or low-
income populations. Thus, EPA's approach includes collecting and 
analyzing information on demographic factors and other relevant data, 
as well as the actual environmental and human health effects themselves 
as part of the scoping process.
    The Agency's Office of Enforcement and Compliance Assurance is 
currently formulating its response to the Inspector General's report, 
``EPA Needs to Consistently Implement the Intent of the Executive Order 
on Environmental Justice,'' (http://www.epa.gov/oigearth/
publications.htm). The Agency's written response will be submitted to 
the Inspector General's office on 3 June 2004; we would be happy to 
answer any additional questions you may have that are not addressed in 
the Agency's response.

    Question 9. In response to the IG's criticism that EPA must 
identify the populations who are the subject to the Executive Order, 
EPA's Office of Enforcement said that not doing so would allow EPA ``to 
move beyond the dead-end questions relating to what is or is not an 
`environmental justice community,' who are or who are no `environmental 
justice individuals,' what are or are not `potential environmental 
justice communities,' or what are or are not `environmental justice 
potential areas of concern.' ''
    Administrator Leavitt, what does it mean that these are ``dead-
end'' questions? Do you agree that trying to identify the communities 
intended to be protected by the Executive Order is a ``dead-end''? The 
IG stated that ``[w]hile the [EPA] believes these may be dead end 
questions, in our opinion it is impossible to carry out the intent of 
the Executive Order, which is to focus on minority and low-income 
populations, without first answering these questions.'' Do you 
disagree?
    Response. The Agency believes that the intent of the Executive 
Order is to ensure that environmental actions or decisions do not 
result in disproportionately high and adverse human health or 
environmental effects by ensuring that the analysis of these effects 
includes the examination of secondary effects, cultural concerns, and 
cumulative impacts/effects. While such effects can occur in any 
community, the Agency recognizes that significantly greater adverse 
effects are often correlated with minority populations and/or low-
income populations. Thus, EPA's approach includes collecting and 
analyzing information on demographic factors and other relevant data, 
as well as the actual environmental and human health effects themselves 
as part of the scoping process.
    EPA's Office of Enforcement and Compliance Assurance is currently 
formulating its response to the Inspector General's report, ``EPA Needs 
to Consistently Implement the Intent of the Executive Order on 
Environmental Justice,'' (http://www.epa.gov/oigearth/
publications.htm). The Agency's written response will be submitted to 
the Inspector General's office on 3 June 2004; we would be happy to 
answer any additional questions you may have that are not addressed in 
the Agency's response.

    Question 10. In December 2001, the National Academy of Public 
Administration (NAPA) issued a report titled Environmental Justice in 
EPA Permitting: Reducing Pollution in High-Risk Communities Is Integral 
to the Agency's Mission, which, like the IG report concludes that EPA 
must set clear expectations for producing results that are linked to 
the agency's mission, and that staff be given clear performance 
measures. The NAPA panel found that, despite the stated commitment of 
EPA leadership, the agency had not fully integrated environmental 
justice considerations into the agency's core mission or its staff 
functions. An October 2003 Report on environmental justice by the US 
Commission on Civil Rights restated many of the NAPA panel's and 
recommendations, and offered several concrete suggestions of its own.
    There seems to be a growing consensus among these reports that EPA 
has not fully integrated environmental justice considerations into the 
agency's core mission or its staff functions. Do you disagree? Are you 
aware of any independent or outside EPA reports that concluded 
otherwise?
    Response. EPA's vision for environmental justice is for all people 
to enjoy the same degree of protection from environmental risks and 
heath hazards and have equal access to the decisionmaking process. To 
achieve this vision, the Agency's Office of Environmental Justice is 
actively working to provide a consistent approach toward the 
integration of environmental justice ideas and practices into all 
policies, programs, and activities.
    As a specific example of integration, the Office of Enforcement and 
Compliance Assurance (OECA) issued its Environmental Justice Policy in 
January 2004 to support the importance of environmental justice in 
program implementation. OECA also drafted an Environmental Justice 
Targeting Strategy and hopes to incorporate it into its programmatic 
activities. OECA's application of smart enforcement concepts will use 
existing environmental and health data, compliance tools, and 
enforcement actions to address significant environmental problems and 
to identify problems in communities with environmental and public 
health concerns. OECA can enhance its targeting efforts to identify and 
screen facilities, sectors, and geographic and demographic areas based 
on predicted or known impacts to human health and ecological resources.
    EPA is not aware of any other independent or outside reports that 
conclude that EPA has not fully integrated environmental justice 
considerations into the agency's core mission or its staff functions or 
otherwise. Since the action plans were established in 2003, the agency 
believes it is too early to arrive at such conclusions.

    Question 11. Since the release of the NAPA report in December 2001, 
has the EPA taken any concrete steps to implement any of that report's 
specific recommendations to adopt accountability and performance 
measures to incorporate environmental justice more fully into the 
agency's day-to-day activities?
    Response. On August 9, 2001, the EPA Administrator directed the 
Agency to integrate environmental justice into all policies, programs 
and activities. To put this directive into action, each Headquarters 
and Regional office is required to develop and implement an 
Environmental Justice Action Plan. The Agency's first comprehensive 
Environmental Justice Action Plans were established in fiscal year 
2003. These plans provide the roadmap for integration based on the 
following six objectives: (1) Risk Reduction (Protecting the 
Environmental and Public Health); (2) Outreach and Communication; (3) 
Training; (4) Federal, State, Tribal, and Local Government 
Coordination; (5) Grants and Contracts Administration; and (6) 
Environmental Justice Assessment. Each of these objectives includes 
action items as well as measurable outputs and outcomes. These offices 
are also required to submit an annual progress report on their action 
plans.

    Question 12. Since the release of the US Commission on Civil Rights 
report in October 2003, has the EPA taken any concrete steps to 
implement any of that report's specific recommendations to adopt 
accountability and performance measures to incorporate environmental 
justice more fully into the agency's day-to-day activities?
    Response. On August 9, 2001, the EPA Administrator directed the 
Agency to integrate environmental justice into all policies, programs 
and activities. To put this goal into action, each Headquarters program 
and Regional office is required to develop and implement an 
Environmental Justice Action Plan. The Agency's first comprehensive 
Environmental Justice Action Plans were established in fiscal year 
2003.
    Through these action plans, the members of the Environmental 
Justice Executive Steering Committee (comprised of the Deputy Assistant 
Administrators, the Deputy Regional Administrators, the Director of the 
Office of Environmental Justice, the Associate General Counsel of 
Cross-Cutting Issues, and the Assistant Inspector General for Program 
Evaluation or his representative) are responsible for the integration 
of environmental justice into the Agency's daily operations. The Office 
of Environmental Justice (OEJ) oversees the action plan development and 
implementation process.
    These plans provide the roadmap for integration based on the 
following six objectives: (1) Risk Reduction (Protecting the 
Environmental and Public Health); (2) Outreach and Communication; (3) 
Training; (4) Federal, State, Tribal, and Local Government 
Coordination; (5) Grants and Contracts Administration; and (6) 
Environmental Justice Assessment. Each of these objectives includes 
action items as well as measurable outputs and outcomes. Each 
Headquarters program and Regional office is also required to submit an 
annual progress report to be reviewed by OEJ. The action plans for 
fiscal years 2004-2005 are available on OEJ's website at: http://
www.epa.gov/compliance/resources/reports/actionplans/ej/index.html.
    The Executive Steering Committee formed an Accountability Workgroup 
to develop the Environmental Justice Action Plan process, including the 
goal and objectives described above. The Steering Committee continues 
to meet periodically to discuss and evaluate progress toward achieving 
the Agency's overall Environmental Justice Program objectives. The 
Agency is currently working to develop a set of national priorities for 
environmental justice integration, which will include specific measures 
of success.

    Question 13. In addition to its responsibilities under the 
Executive Order, under Title VI of the 1964 Civil Rights Act, every 
Federal agency including EPA must ensure that all federally funded 
programs are free from discrimination based on race, religion and 
national origin. How does EPA fulfill this obligation, which includes 
the obligation to ensure that minority communities are not subject to 
disparate impact discrimination in the funding, implement and 
enforcement of federally funded environmental programs if the EPA 
cannot even identify these minority communities?
    Response. The External Compliance Program in the EPA Office of 
Civil Rights (OCR) ensures that recipients of EPA financial assistance 
and others comply with the relevant nondiscrimination requirements 
under Federal law. EPA's nondiscrimination regulations provide two 
vehicles for OCR to use to ensure compliance. The implementation of 
both mechanisms described below does not require the identification of 
minority communities prior to their use.
    The first mechanism provides that OCR may periodically conduct 
reviews of recipients' programs and activities to determine whether 
they are complying with EPA's nondiscrimination regulations (see 40 
C.F.R. Part 7 and 40 C.F.R. Part 5). EPA conducts compliance reviews, 
collects data and information from applicants and recipients, evaluates 
the materials, and seeks to bring recipients into voluntary compliance 
with the applicable civil rights statutes when violations are 
identified.
    The second mechanism to ensure compliance with EPA's 
nondiscrimination regulations is through the complaint process. The 
External Compliance Program has the responsibility within OCR to 
process and review complaints alleging unlawful discrimination by EPA 
financial assistance recipients. EPA is committed to the investigation 
and resolution of properly filed complaints alleging unlawful 
discrimination by EPA financial assistance recipients.
    The OCR External Compliance Program also conducts outreach 
activities to educate the public and others about their rights and 
EPA's responsibilities. OCR maintains a website that provides 
information on OCR's External Compliance (ex., Title VI) and Employment 
Complaints Resolution (e.g., Title VII) programs. It also provides the 
latest information on the diversity of EPA's work force. The OCR 
website is found at http://www.epa.gov/civilrights/.
    The OCR External Compliance Program recently concluded training to 
provide EPA staff, recipient agencies (States), Environmental Justice 
community groups, and industry an opportunity to learn together about 
best practices in public participation. A number of the Title VI 
complaints that OCR has received alleged a problem in the public 
hearing process. This training was sponsored to teach good public 
participation practices in an area that could potentially affect all 
parties. It was an opportunity for dialog to take place, relationships 
to be established, and for names to become personalized. OCR hopes that 
as a result of this training, the number of complaints alleging a 
problem in the public hearing process will decrease and there will be 
an improvement in the hearings held by State agencies. OCR successfully 
sponsored this training in Alexandria, Virginia; Baton Rouge, 
Louisiana; Austin, Texas; Fresno, California; Phoenix, Arizona; and 
Columbia, South Carolina; Atlanta, Georgia; Boston, Massachusetts; and 
New York, New York. The course was designed and approved by the 
International Association for Public Participation, a nonprofit 
organization dedicated to promoting meaningful participation.
                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                                 Crapo

                              BROWNFIELDS

    Question 1. I was pleased to see that the President's budget 
requested a $40 million increase for the Brownfields program. This 
program has the potential to provide rural communities with much needed 
assistance to deal with the contamination, or possibility of 
contamination that has hindered the re-development of properties in 
rural towns, many of which do not have the tax base to afford cleanup 
without assistance.
    I also understand that the fiscal year 2005 budget proposal would 
transfer the Brownfields Economic Development Initiative, currently 
managed by the Department of Housing and Urban Development, to EPA.
    What is the plan for consolidating these two programs?
    Response. EPA does not know of any plan to consolidate the 
Department of Housing and Urban Development's (HUD) Brownfields 
Economic Development Initiative (BEDI) and its EPA Brownfields program. 
HUD's BEDI program has funded Brownfield's redevelopment activities 
(e.g., acquisition, demolition, and infrastructure redevelopment) which 
are not authorized uses of EPA's Brownfield's funds.

    Question 2. This past fall, EPA informed me that the guidelines for 
the Brownfields grant competition were being revised. Will the needs of 
small rural communities be better addressed in with these revisions?
    Response. A portion of the 2004 Brownfields grant competition 
guidelines requested applicants to submit population size in its 
application allowing EPA to track the number of applicants from small 
communities. In addition, we added a special section which highlighted 
the statutory consideration of urban versus non-urban communities. 
Based on the applicants' submissions, EPA estimates over half of the 
2004 applications received are from communities of populations of less 
than 100,000. To further address the needs of these communities, EPA in 
conjunction with two nonprofit grantees is conducting special outreach 
sessions to rural communities. The first was held April 30, 2004, in 
Kansas, the second and third are scheduled for June 17, 2004, in Idaho 
and July 14, 2004, in Montana.

                        CLEAN SCHOOL BUS PROGRAM
 
   Question 3. I agree with your environmental policy that I 
understand emphasizes bringing parties to the table to air concerns and 
solve problems and thus further environmental goals. Can you elaborate 
on how programs such as the Clean School Bus program provide for the 
partnering of schools with Federal, State and local governments?
    Response. Programs such as Clean School Bus USA encourage 
partnerships by providing Federal seed money and technical expertise, 
and then bringing together key players to solve a specific 
environmental problem--in this case, exposure to diesel emissions from 
school buses.
    The highly successful school bus retrofit program underway in the 
State of Washington provides an example of how these partnerships can 
work. The Washington program started in 2000 with a small Federal grant 
and partnership between EPA and the Puget Sound Clean Air Agency, a 
local governmental unit, to recruit a local school district to pilot a 
school bus retrofit project. EPA helped Puget Sound and the Everett 
School District connect with fuel suppliers, engine and retrofit 
equipment manufacturers and provided technical support to get the 
project going. This pilot inspired the Puget agency to take on a 
leadership role in securing the early introduction of ultra-low sulfur 
diesel fuel into the region and in recruiting additional partners to 
expand the program. Puget Sound's ``Diesel Solutions'' partnership has 
since grown to include seven school districts, four counties, the city 
of Seattle, fuel refiners and many others. The program has leveraged 
grant funding more than 10 to 1 and has commitments for more than 3,000 
retrofits by the end of 2004, involving ferries, garbage trucks, and 
transit buses in addition to school buses. The early success of these 
projects attracted enough positive attention that the Washington State 
legislature has funded a statewide school bus retrofit program at the 
level of $5 million annually for 5 years. State government has also 
secured additional resources for school bus retrofits through 
enforcement settlements.

                          NORTH IDAHO CLEANUP

    Question 4. During my tenure in Congress, I have been working with 
the EPA to ensure that North Idaho is provided with assistance to meet 
its cleanup needs. Is it your intention to continue with that 
commitment to clean up North Idaho?
    Response. EPA is committed to continuing cleanup at the Bunker Hill 
Superfund Site in North Idaho. Since the 1980's EPA has provided 
approximately $368 million to protect human health and the environment 
at Bunker Hill and the Coeur D'Alene Basin. Cleanup activities at the 
Bunker Hill site have focused on 21 square miles encompassing the 
communities of Pinehurst, Page, Smelterville, Kellogg and Wardner, 
Idaho, collectively known as the ``Box''. Currently, our two highest 
priorities are to continue the pace of residential and community 
cleanups, and to finish cleanup work in the former industrial areas of 
the 21-square mile ``Box'' so the land can be available for economic 
redevelopment. EPA and the mining companies have already completed 85 
percent of the residential and community properties in the ``Box'' and 
expect to fully complete this work in 2005.
    In 2003, EPA transferred 500 acres of former industrial property to 
the State of Idaho. This land is being developed into a golf course and 
recreational area. In 2003, EPA provided funding to the State of Idaho 
to begin residential and community cleanups in the area outside the 
``Box''. In summer 2004, we expect to complete an additional 200 to 300 
properties, moving toward our goal of completing this work in 5 years. 
The Bunker Hill/Coeur d'Alene Basin project continues to be one of 
EPA's highest national priorities.
    Question 5. I continue to believe that our water infrastructure in 
this Nation is in desperate need of attention. We have the kind of need 
that requires us to be focused and unified. I have been working to 
ensure that the Clean Water State Revolving Fund is allocated 
sufficient funding to address these water infrastructure needs.
    Do you share this commitment to improving our basic water 
infrastructure?
    Response. EPA and this Administration certainly share that 
commitment. The Clean Water State Revolving Fund (CWSRF) has been one 
of the nation's biggest environmental success stories, and Federal 
capitalization has helped States provide over $47 billion in loans to 
municipalities. The fiscal year 2004 President's Budget proposed to 
continue funding the CWSRF through 2011, providing an additional $4.4 
billion beyond the last Administration's funding plan. The President's 
Budget for fiscal year 2005 continues this Federal commitment.
    The Administration recognizes that improving our basic water 
infrastructure also requires actions and innovations to reduce the 
demand for new infrastructure. We have, therefore, proposed a $2.5 
million Sustainable Infrastructure Initiative in the fiscal year 2005 
President's Budget, through which EPA proposes to work in partnership 
with the water utility industry and other stakeholders to ensure the 
sustainability of water and wastewater systems through better 
management, water efficiency, full cost pricing and watershed 
approaches.

                           ARSENIC STANDARDS

    Question 6. With mandatory compliance with the EPA's arsenic 
standards becoming effective in 2006, many small communities have been 
expressing considerable concerns with their ability to afford the 
enhancements to implement these regulations.
    As chairman of this committee's Subcommittee on Fisheries, 
Wildlife, and Water I have been pleased to work with you on this issue. 
Could you provide an update as to what the Agency is doing to help 
these communities meet these standards?
    Response. EPA understands that many communities will face a 
challenge in meeting the new arsenic standard. The Agency has a number 
of activities underway to provide financial, technical, and compliance 
assistance, and to identify new technologies that may serve to be more 
affordable for small systems.
    EPA estimates that of the 74,000 systems subject to the new arsenic 
maximum contaminant level, only 3,000 community water systems and 1,100 
non-transient, non-community water systems will need to install 
treatment for compliance. The total national capital costs for 
treatment technology and infrastructure to meet the arsenic standard 
are estimated to be approximately $900 million. Small systems make up 
the majority of the systems impacted by the rule, but the majority of 
the capital costs will be incurred by larger systems that serve more 
than 10,000 people.
    EPA's Drinking Water State Revolving Fund (DWSRF) program will play 
an important role in helping many systems install treatment needed to 
protect the health of their customers. State DWSRF programs are 
currently providing more than $1.2 billion per year using annual 
appropriations of $850 million, bond proceeds, repayments and 
additional funds. More than 40 percent of the funding and 75 percent of 
the loan agreements are going to small systems that serve fewer than 
10,000. The low-interest loans and disadvantaged assistance provided 
through the program will prove critical in helping States address needy 
communities. Some States, like Arizona, are already beginning to fund 
projects for arsenic. Fourteen of the top thirty projects on the 
State's priority funding list for 2004 address arsenic treatment. 
Pursuant to a Memorandum of Agreement signed in 2002, EPA is also 
working with the Rural Utilities Service (RUS) of the Department of 
Agriculture to target grants and loans for small communities for 
projects that address arsenic-related treatment upgrades.
    States can use the authority provided by the Safe Drinking Water 
Act to phase in the arsenic rule over time. This authority will allow 
States sufficient time to provide DWSRF assistance over the next 
several years to systems adding arsenic removal treatment.
    With congressional support, the Agency has made a significant 
investment in research and development of effective lower-cost small 
system arsenic treatment technologies. For Round 1 of the Arsenic Rule 
Implementation Research Program arsenic treatment technology long term 
demonstrations, the Agency has selected the following 12 (12) volunteer 
small water systems and technologies for demonstration:

           Round 1 Arsenic Treatment Technology Demonstrations
------------------------------------------------------------------------
                Site                    Technology to be Demonstrated
------------------------------------------------------------------------
Rimrock, AZ........................  AdEdge Iron Media
Valley Vista, AZ...................  Kinetico Activated Alumina
City of Fruitland, Fruitland, ID...  Kinetico Ion Exchange
Queen Anne's County, Stevensville,   Severn Trent Iron Media
 MD.
Brown City, Brown City, MI.........  Severn Trent Iron Media
Town of Climax, Climax, MN.........  Kinetico Oxidation / Co-
                                      Precipitation / Filtration
City of Lidgerwood, Lidgerwood, ND.  Kinetico Modified Treatment
White Rock Water Company, Bow, New   ADI Iron Adsorption / Regeneration
 Hampshire.
Rollinsford Water & Sewer District,  AdEdge Iron Media
 Rollinsford, NH.
Desert Sands Mutual Domestic Water   Severn Trent Iron Media
 Consumers Association, Inc.,
 Anthony, NM.
Nambe Pueblo, NM...................  AdEdge Iron Media
South Truckee Meadows GID, Washoe    US Filter Iron Media
 County Water Resources, Reno, NV.
------------------------------------------------------------------------

    For Round 2 of the demonstration program, thirty-two volunteer 
sites are being considered. The selected demonstrationsites will be 
announced shortly. The candidate sites and locations are:
Alvin, TX

Arnaudville, LA

Breaux Bridge, LA

Bruni, TX

Delavan, WI

Dummerston, VT

Felton, DE

Goffstown, NH

Greenville, WI

Grove City, OH

Homedale, ID [Klamath Falls, OR

Lake Isabella, North Smithfield, RI

Lyman, NE

Newark, OH

Okanogan, WA

Pentwater, MI

Sabin, MN

Sandusky, MI

Sauk Centre, MN

Springfield, OH

Stewart, MN

Stromsburg, NE

Susanville, CA

Taos, NM

Tehachapi, CA

Three Forks, MT

Tohono O'odham Nation, AZ

Vale, OR

Wales, ME

Wellman, TX


    Additionally, development of new innovative treatment technologies 
is being supported through the Small Business Innovation Research 
program and the Science to Achieve Results grants program. Through the 
Agency's Environmental Technology Verification Program, short term 
testing of the effectiveness of four arsenic treatment technologies has 
been completed and four additional technologies will be verified this 
year. Office of Research and Development scientists and engineers have 
participated in over 20 conferences and meetings to speak on arsenic 
treatment to a number of utility industry workgroups. Engineering 
design manuals and other technical materials have been completed and 
are being made available to engineers, consultants, water systems and 
others. Detailed information on the program can be located at http://
www.epa.gov/ORD/NRMRL/arsenic/
                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                                 Inhofe

         SPILL PREVENTION, CONTROL AND COUNTER MEASURES (SPCC)

    Question 1. Following-up on my SPCC question, a year has passed 
since the 18-month extension and the agency may not be able to address 
small oil producer issues because of a delay in discussions due to the 
API lawsuit. What assurances can you give me that there will be 
adequate time to identify remaining issues, discuss and evaluate those 
issues thoroughly, and take action prior to the expiration of the 18-
month extension this August?
    Response. On March 31, 2004 EPA hosted a SPCC Stakeholder meeting 
to clarify expectations relative to compliance with the pending August 
17, 2004 deadline for facilities to revise their SPCC Plans. At that 
meeting, EPA announced that it was still evaluating options relative to 
SPCC implementation and the compliance deadline.
    Although EPA has yet to announce its decision, EPA has publicly 
stated that it will not put facilities in an untenable position with 
regard to coming into compliance with the requirement to revise SPCC 
Plans in response to the July 2002 final rule. With the August deadline 
just 3 months away, we recognize that there is insufficient time for 
facilities to revise their Plans in advance of the deadline. EPA 
expects to publicly release its decision in the next few weeks.

    Question 2. And finally, one of the concerns that was raised when 
the extension was initiated related to the availability of professional 
engineers to develop and certify new or revised SPCC Plans. What is 
EPA's current assessment of this capacity?
    Response. Certification of professional engineers is a State 
action, and EPA does not have information on the number of professional 
engineers in each State. However, EPA recognizes the number and 
availability of professional engineers is a limiting factor that should 
be considered in establishing expectations for the time facilities have 
to revise their SPCC Plans. We have been made aware of this limitation 
in correspondence with members of the regulatory community, and we are 
factoring this general knowledge into our decisions with regard to the 
compliance deadline.

                           NATION'S WATERWAYS

    Question 3. What evidence does the agency have the oil spills on 
farms have had an impact of any kind of the nation's waterways?
    Response. EPA has conducted a preliminary analysis of the number 
and volume of oil spills from farm facilities. The data base utilized 
contains information on oil spills that have threatened the nation's 
waterways during the years 1982 to 2003. These data show a total of 166 
such spills from farms during this timeframe, with an estimated total 
oil volume spilled of 528,000 gallons.
    These incidents include spills from farm-related oil storage tanks 
and vehicles, as well as spills related to farming activities, such as 
farmer's plows hitting and breaking oil pipelines running through 
agricultural lands. The latter type of incident occurred three times 
with spillage of 3,400 gallons. Also included are spills from farmers' 
fuel cooperatives, which involved the spillage of nearly 358,000 
gallons of oil (nearly 68 percent of the total volume of spillage) in 
11 incidents. Excluding the spillage from plowing-related pipeline 
breaks and fuel cooperatives, oil spillage from farm facilities 
involved 166,600 gallons of oil in 152 incidents.

                             WATER QUALITY

    Question 4. The Administration has proposed a new $2.5 million 
program to assist treatment works with the management of their systems. 
In January 2003, the EPA held a water infrastructure summit that 
focused largely on asset management by locally owned treatment works. 
This combined with the cut to the SRF, implies that EPA believes the 
infrastructure gap--identified in several studies including one by 
EPA--is due to poor management at the local level.
    However, according to the most recent drinking water needs survey, 
20 percent of the nationwide need is due to regulations. In the most 
recent clean water needs survey, at least $113 billion of the $181 
billion nationwide need is due to regulations. I applaud EPA moving 
forward with programs like trading that may help reduce the cost of 
meeting regulations without jeopardizing water quality. What more are 
you doing to address the cost of these regulations, one of the primary 
causes of the gap?
    Response. EPA recognizes the significant challenges communities 
face in meeting public health and environmental objectives. While in 
some cases, poor asset management at the local level can be a factor; 
it is not a primary one. It is also our view that regulations are not a 
primary cause of the infrastructure gap. Our infrastructure needs 
surveys, as well as others; consistently show that the majority of 
needs are for the replacement and continuing operations of aging 
infrastructure. The national resolve to maintain a level of basic 
sanitary requirements and environmental protection, and the need for 
improved maintenance (including timely replacement) of worn treatment 
plants and pipes, has led us to recognize the gap, and to raise it as a 
public policy issue.
    We recognize that closing the gap also requires actions and 
innovations to reduce the demand for new infrastructure, including 
better management, more efficient water use, and cooperation on a 
watershed basis. We have therefore proposed a Sustainable 
Infrastructure Initiative in the fiscal year 2005 President's Budget 
through which EPA proposes to work in partnership with the water 
utility industry and other stakeholders to ensure the sustainability of 
water and wastewater systems. We believe that these efforts to reduce 
costs show great promise as a way to meet the water infrastructure 
needs of the Nation.
    We do recognize that new regulatory costs are a factor and the 
Agency has tried to provide flexibility in the timeframes for utilities 
to comply with new regulations. To the extent possible within the 
confines of our statutory and public health protection and 
environmental stewardship responsibilities, we will develop regulations 
providing States with considerable flexibility to tailor implementation 
to local circumstances.

                               SUPERFUND

    Question 5. Senators Jeffords and Boxer point to a recent GAO 
report concluding that Superfund appropriations have fallen 35 percent 
or $633 million over the last decade in real dollars. Please comment on 
the accuracy of GAO's findings, in particular, highlighting whether 
past appropriations included funding for other programs. If programs 
other than Superfund were funded through Superfund appropriations, 
please identify the relevant programs and the amount they were funded 
so that the committee will have a true measure of Superfund funding may 
be realized.
    Response. In their report on Superfund appropriation and 
expenditure data (GAO-04-475R) issued on February 18, 2004, GAO 
provides a breakdown of sources and amounts of appropriations to the 
Superfund program for fiscal year 1993 through fiscal year 2004. In 
order to compare the level of funding available to the Superfund 
program over time, it is necessary to identify the portions of the 
Superfund appropriation specifically not available for the program. On 
May14, 2004, GAO issued a report (GAO-04-787R) that supplements the 
information provided in their earlier report with the amounts 
designated for the other programs funded under Superfund appropriations 
in previous years.
    Superfund appropriations to EPA from fiscal year 1993 through 
fiscal year 2000 included specific appropriations for the Agency for 
Toxic Substances and Disease Registry (ATSDR) and the National 
Institute of Environmental Health Sciences (NIEHS). During this period, 
ATSDR and NIEHS were appropriated $977 million, of the $11.5 billion 
total appropriated to EPA for Superfund. Beginning in fiscal year 2001, 
appropriations for ATSDR and NIEHS are no longer included in the EPA 
Superfund appropriations, but are instead appropriated separately under 
their own line items.
    The Superfund appropriation was also the source of funding for the 
Brownfields program from fiscal year 1993 through fiscal year 2002. 
During this period, Superfund funding for Brownfields totaled $506 
million. Beginning in fiscal year 2003, funding for the Brownfields 
program has been appropriated under the Environmental Program 
Management and the State and Tribal Assistance Grants appropriation 
accounts.
    The net Superfund appropriation from fiscal year 1993 through 
fiscal year 2004, excluding the amounts attributed ATSDR, NIEHS and 
Brownfields, is $15.1 billion. In fiscal year 1993, the net Superfund 
program appropriation was $1.46 billion and in fiscal year 2004, the 
net Superfund program appropriation is $1.25 billion, which is a $205 
million, or 14 percent, decrease.

    Question 6. EPA has been criticized for the slower pace of cleaning 
up Superfund sites in recent years versus speedier cleanups in the 
past. Are today's Superfund sites larger in scale and complexity, and 
are they consequently more difficult to clean up? If so, please 
describe how it could take EPA more time and resources to address 
larger and more toxic sites?
    Response. EPA contends that the remaining universe of NPL sites 
that are not construction complete are more complex than sites that 
have already achieved construction completion. Many factors affect site 
complexity, which in turn affects the duration and cost of cleanups. 
Examples of such factors include: contaminant characteristics, presence 
of multiple contaminants, area and volume of contamination, multi-media 
contamination, ecological issues, groundwater issues, remedial 
technology(ies) necessary, site location, proximity to populations, 
potentially responsible party (PRP) cooperation, presence of multiple 
PRPs, and interests of other stakeholders, including States, Tribes, 
communities, and natural resource trustees. For example, many of the 
larger Superfund sites have groundwater contamination, which requires 
more time for thorough analysis and consideration, given the 
uncertainty inherent in subsurface engineering activities and the 
rapidly state of the science with respect to characterization and 
treatment.
    A few surrogate measures for site complexity, as of the end of 
fiscal year 2003, demonstrate how the current universe of non-
construction complete NPL sites differs from NPL sites that are 
construction complete.
    1. Type of facility: Twenty-one percent of the remaining non-
construction completed universe of final NPL sites (632) are Federal 
facilities. The nature of contamination at these sites and their 
vastness defines most of these sites as complex. Only 5 percent of 
construction completed sites are Federal facilities.
    2. Mega-sites: Mega-sites are non-Federal facility sites with total 
cleanup costs (Fund or PRP-financed) estimated at $50 million or more. 
Of the 142 mega-sites that EPA has identified, 69 percent are not 
construction complete.
    3. Number of operable units per site: In order to address the 
multiple aspects of site cleanup, EPA may divide sites into smaller 
scale units, called operable units.
    a. There is an average of 10.0 operable units per final, non-
construction complete, Federal facility NPL site, which is 138 percent 
greater than the average number of operable units at comparable 
construction complete NPL sites.
    b. There is an average of 4.2 operable units per final, non-
construction complete, non-Federal facility mega NPL site, which is 50 
percent greater than the average number of operable units at comparable 
construction complete NPL sites.
    4. There is an average of 1.8 operable units per final, non-
construction complete, non-Federal facility, non-mega NPL site, which 
is 20 percent greater than the average number of operable units at 
comparable construction complete NPL sites.
                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                                Jeffords

                                MERCURY

    Question 1. According to EPA projections, the proposed cap-and-
trade mercury rule option, which is very similar to the Clear Skies 
initiative's structure and schedule, would allow about 200 coal-fired 
power plants to avoid putting on advanced pollution controls as far 
into the future as 2020. What analysis can the Agency provide that 
demonstrates this option will not result in more toxic ``hot-spots?''
    Response. EPA is currently conducting analyses to examine the 
effects of the Clean Air Mercury Reduction Rule. When the analysis is 
completed it will be provided to Congress and the public, before the 
Mercury Utility Reduction Rule is finalized.

    Question 2. What analysis can the Agency provide to the committee 
to demonstrate that mercury deposition in the Northeast will decline as 
a result of the proposed cap-and-trade option?
    Response. We have not completed the analysis of the proposed Clean 
Air Mercury Reduction Rule. However, as you point out, it is similar to 
Clear Skies when fully implemented. Therefore, the reductions in 
deposition in the Northeast may be similar. For the detailed results of 
the Clear Skies analysis, see the Clear Skies website www.epa.gov/
clearskies.

    Question 3. What regulatory safeguards are in the mercury proposal 
that would prevent the development of any additional toxic ``hot-
spots'' due to utility emissions?
    Response. The Clean Air Mercury Reduction Rule reduces emissions 
and caps them at a level that is 70 percent lower than current 
emissions. With this cap it is unlikely that additional hotspots due to 
utility emissions will be created. In addition, States maintain their 
authority to require additional controls at any particular facility if 
they are concerned about hotspots.

    Question 4. Section 112 of the Clean Air Act requires the Agency to 
issue a final rule that cuts mercury emissions from each and every 
coal-fired electric generating unit in the country, and also does not 
permit subcategorization by coal type. That's every single unit at a 
power plant. Why is the Agency proposing to allow some units to remain 
uncontrolled and thereby increasing emissions above what the law 
requires?
    Response. The Clean Air Act requires power plants to be regulated 
under section 112 only if EPA determines such regulation to be 
``necessary and appropriate.'' EPA has, in fact, proposed to regulate 
power plants under section 112. EPA has alternatively proposed to 
regulate mercury and nickel emissions from power plants under section 
111. This approach is based on a proposed determination that regulation 
under section 112 is not ``necessary'' because section 111 provide 
adequate legal authority and will produce an appropriate level of 
environmental protection.

    Question 5. The Agency's proposed rule to slightly reduce mercury 
emissions from power plants contains three different options. As you 
may recall from my letter of March 16, 2004, I don't consider any of 
them to be legal or defensible from a public health or technological 
perspective. Will the Agency comply with the existing settlement 
agreement and promulgate a final rule under the authority of section 
112 of the Clean Air Act to control hazardous air pollutants from each 
electric generating unit by December 15, 2004?
    Response. While the previous Administration was sued for its slow 
pace in addressing mercury from coal-fired power plants, we have acted. 
Our proposal offers two basic approaches: (1) a traditional, command-
and-control regulations under section 112 of the Clean Air Act (CAA), 
generally known as the maximum achievable control technology (MACT) 
approach, and (2) a market-based cap-and-trade approach under either 
section 111 or section 112 of the CAA. We are seeking comments on the 
legal, technical, and policy rationale put forward in the proposal rule 
and we will carefully evaluate the comments received, along with any 
additional data submitted, when proceeding toward finalizing a rule. As 
you are aware, the comment period was recently extended to run through 
June 29th and the deadline for the final rule was moved to March 15, 
2005.

    Question 6. Has EPA ever proposed to renege on a settlement 
agreement as in the December mercury proposal?
    Response. EPA's issuance of a co-proposal to regulate mercury 
emissions from utilities under section 111 does not renege on its 
settlement agreement with NRDC. The settlement agreement calls for EPA 
to propose a regulation for the utility industry under section 112 by 
December 15, 2003. The co-proposals the Administrator signed on that 
date include a proposed section 112 regulation for utilities.

    Question 7. Please compare, and quantify where possible, the 
benefits to public health over the next 10 years between compliance 
with the settlement agreement on mercury (EPA and NRDC in 1998) and any 
of the Agency's recently proposed mercury control options.
    Response. The benefits achieved under the section 111 approach will 
be much greater than those under a traditional section 112 maximum 
achievable control technology (MACT) approach, which is limited by the 
available and achievable control technology.
    The settlement agreement signed by EPA and NRDC committed the 
Agency to a rulemaking, if appropriate and necessary, but did not 
include any specifications on what such a rule should look like nor on 
any specific emission reductions. The Clean Air Act does not mandate a 
specific emission reduction; rather, it requires that a process be 
followed to determine the emission reduction being achieved by similar 
sources. It is this process that the Agency has followed in developing 
the January 2004 proposal.
    The benefits to public health over the next 10 years associated 
with the Agency's proposed cap-and-trade approach for regulating 
mercury emissions from coal-fired power plants were highlighted in the 
January 2004 proposal. Under the section 111 approach, the Agency will 
set a 2010 mercury emissions cap that is reflective of the level of 
mercury emissions reductions associated with co-benefits from 
installation of wet scrubbers for sulfur dioxide (SO2) control and 
selective catalytic reduction (SCR) systems for nitrogen oxides (NOx) 
reduction. Additionally, this declining cap approach results in a 15 
ton cap being implemented in 2018, while garnering significant 
reductions in SO2 and NOx emissions--both fine particle precursor 
species. The Agency continues to believe that a coordinated, 
multipollutant approach is the most cost effective and environmentally 
beneficial approach to regulating Hg, NOx, and SO2 from coal-fired 
power plants.
    The traditional command-and-control approach, outlined under 
section 112, provides for only mercury controls by March 2008, with 
little impact on fine particle precursor species (i.e., NOx and SO2) in 
that timeframe. The Agency believes that, given the substantial public 
health benefits associated with fine particle reductions, an approach 
that provides significant reductions in ambient fine particle 
concentrations in conjunction with necessary mercury emission 
reductions provides the optimal protection of public health and the 
environment.

    Question 8. I wrote to you in November 2003, along with 12 other 
Senators, noting our expectation that EPA would deliver on its promise 
to complete and distribute the analysis that was requested by the 
advisory workgroup on specified reduction scenarios. Why was that 
promise broken and no such analysis completed?
    Response. The Agency conducted preliminary Integrated Planning 
Model (IPM) analyses in spring 2002. The results of these analyses, 
which included a range of potential regulatory outcomes, were discussed 
with the Working Group. These discussions led to the members of the 
Working Group making a number of suggestions on modifications that 
should be made to the IPM input and assumption files. These changes 
were discussed with the Working Group during Summer 2002 and were 
incorporated into the Agency's modeling for Clear Skies 2003 and the 
regulatory work done prior to proposal of the alternative approaches in 
January 2004. As the Working Group prepared its final report to the 
Clean Air Act Advisory Committee in fall 2002, it became clear that the 
Working Group would not achieve consensus on the issues. The Agency 
then moved forward on its own to prepare the analyses necessary to 
develop the proposed rulemaking. Analysis of the various stakeholder 
options put forward would not have aided in achieving consensus and 
would have distracted key resources from the Agency's mission of 
complying with the December 15, 2003, settlement agreement to propose a 
rule.
    Individual stakeholders of the Working Group made suggestions 
regarding additional analyses that the Agency should consider and, 
possibly, conduct. However, the Working Group's final report 
demonstrates that there was no consensus on this issue.

    Question 9. Does the fiscal year 2004 operating plan or the fiscal 
year 2005 budget request include funds to complete the economic and 
feasibility analysis on a range of mercury reductions that was promised 
by EPA and requested by the mercury MACT advisory committee?
    Response. The Agency committed to review the recommendations of the 
Utility Federal Advisory Committee Act (FACA) Working Group Report, 
which was submitted to the Clean Air Act Advisory Committee (CAAAC) in 
October 2002. In that report, various stakeholder groups outlined their 
position(s) regarding the most effective way to regulate mercury 
emissions from coal-fired power plants. In delivering the December 2003 
proposal, the Agency outlined two approaches for completing the first 
ever mercury emissions reductions from coal-fired power plants: (1) 
section 112, command-and-control, maximum achievable control technology 
(MACT); and, (2) section 111, cap-and-trade approach.
    In extending the public comment period 60-days, and the 
promulgation date by 90-days, the Agency is committed to using this 
additional time to explore the analyses completed in support of the 
December 2003 proposal, and to identify the need for any additional 
analyses to support the upcoming final rule. Furthermore, the Agency 
has identified and allocated resources to support this rulemaking 
through fiscal year 2004, and the budget request includes funds 
necessary for fiscal year 2005.

    Question 10. In the United States, nine chlor-alkali plants 
continue to use outdated mercury cell technology and emit as much as 
one hundred tons of mercury pollution annually. In 2000, the facilities 
added far more mercury to their cells than they reported released, 
resulting in 65 tons of unaccounted for mercury in that year alone. EPA 
acknowledges in its December 2003 rule, ``the fate of all the mercury 
consumed at mercury cell chlor-alkali plants remains somewhat of an 
enigma.'' However, the rule fails to set emissions standards for this 
lost mercury, and recommends only voluntary measures to monitor 
fugitive mercury cell emissions. Why has EPA allowed these nine plants 
to continue outdated, polluting processes? Will the EPA work to account 
for these ``lost'' emissions?
    Response. The issue of unaccounted mercury from mercury cell chlor-
alkali plants has been the subject of intense scrutiny for 
environmental groups, EPA and the industry for quite some time.
    Mercury that is purchased for use in the plant can go to the air, 
the product produced, become solid waste, or be caught in equipment 
including pipes, pumps, tanks, etc. Just because the cells are 
replenished does not mean that this volume of mercury is lost. The 
industry reclaims it from the product and solid waste stream and during 
equipment repair and upgrades. The industry has conducted studies over 
the last 10 years to better understand the balance of mercury coming in 
to plants with mercury going out by measuring mercury caught in 
equipment. Although the studies are continuing, facilities have in fact 
recovered quantities of mercury in tanks and other equipment that would 
otherwise go unaccounted.
    Based on these studies and emission estimates from industry 
questionnaire responses, EPA estimates total mercury emissions 
currently from this industry to be 5.6 tons per year. We estimate the 
fugitive contribution of these emissions to be 4.7 tons per year. While 
it may appear that the discrepancy in the mercury material balance is 
the result of fugitive emissions, there is little evidence to support 
this conclusion. Because mercury is so dense, a small volume accounts 
for a significant mass. Several tons of mercury could easily be caught 
in the thousands of feet of pipe in one plant.
    There is a provision in the final rule that requires facilities to 
report on mercury consumed each year. In addition, we believe the work 
practice standards required by the final rule, which are more stringent 
than the requirements of the 1975 rule, will result in reductions 
beyond current fugitive emission levels.
    Nevertheless, the Agency has granted a petition to reconsider this 
rule. In addition, we are planning to conduct ambient monitoring around 
some mercury cell chlor-alkali plants. Data collected from this effort 
will help quantify fugitive emissions of mercury from these facilities. 
In addition, we will initiate discussions with petitioners to help 
determine other appropriate actions and the necessary timeline to 
address their concerns. We expect to learn more information about 
mercury use and emissions from this industry as the requirements of the 
rule are implemented and additional data are collected.

    Question 11. Where does tracking this ``enigmatic'' mercury fall on 
EPA's priority list?
    Response. The Agency is planning to conduct ambient monitoring 
around some mercury cell chlor-alkali plants. Data collected from this 
effort will help quantify fugitive emissions of mercury from these 
facilities. In addition, we will initiate discussions with petitioners 
to help determine other appropriate actions and the necessary timeline 
to address their concerns. We expect to learn more information about 
mercury use and emissions from this industry as the requirements of the 
rule are implemented and additional data are collected.

    Question 12. A December 2001 EPA presentation to industry stated 
doing a utility MACT standard now--based on existing technologies--
would yield a ninety-eight percent reduction in mercury emissions for 
existing plants. Why does the draft MACT standard aim only for a 
twenty-nine percent reduction?
    Response. The December 2001 presentation represented a very 
preliminary effort by the Agency to estimate the impacts of a section 
112 rule on the electric utility industry. Subsequent to the 
presentation, the Agency received input on industry-and Government-
supported emission tests that indicated that some of the mercury 
removal assumptions reflected in the December 2001 presentation were 
erroneous (e.g., the impact on mercury removal of selective catalytic 
reduction on various coals). Further, at that time, the Agency had not 
yet fully evaluated the impacts of a number of other factors, including 
coal type and variability, as required by the Clean Air Act and recent 
court decisions. The emission levels provided in the January 2004 
proposed rule reflect the Agency's current estimates of the level of 
mercury emission reduction that could reasonably be expected from the 
industry.

    Question 13. You have suggested and the mercury rule says that 
there are no technologies available today designed to control utility 
mercury emissions. Last year, I wrote to technology vendors on that 
very question. They wrote back to say they have proven products on the 
market today that can cut mercury by ninety percent or more. I have 
placed a summary of my findings in the hearing record. Have you sat 
down and talked to these vendors?
    Response. We have had several meetings with, and heard 
presentations from, many of the same equipment vendors from which you 
sought information. We do not believe that the summary of statements 
shows with certainty that control of utility mercury emissions in the 
range of 60 to 90 percent is technically or economically achievable 
within the timeframe we are discussing. Further, we do not believe that 
electric utility, coal, and pollution control industry statements 
contradict its view that advanced mercury control technologies are not 
yet ready for commercialization. The EPA agrees with industry that 
these new technologies show great promise, but are not and will not be 
available within a 3-to 4-year time-frame.
    To date, there have been four full-scale field tests on activated 
carbon injection (ACI), the most promising mercury-specific control 
technology on the near-term horizon. These tests have been conducted on 
three bituminous-fired units and one subbituminous-fired unit. 
Continuous operation of ACI was conducted for two 5-day periods, one 4-
day period, one 5-day period, and one 9-day period at the four tests. 
We believe that this limited amount of continuous ACI operation is 
sufficient of itself to indicate that the technology has not been 
sufficiently tested to be the basis for a nationwide regulation that 
would require compliance all day, every day, for the remainder of the 
life of the unit.
    One long-term ACI test was initiated in April 2003 on a bituminous-
fired unit. This test was to evaluate the mercury removal efficiency of 
ACI over a period of several months to 1 year, further assess the 
impact of ACI on balance-of-plant operations (i.e., how will ACI impact 
on maintenance frequency and costs, on ash disposal and utilization, on 
internal plant energy use, etc.), and provide additional information on 
the design characteristics and costs of ACI technology for other 
installations. Because of problems encountered, this test has not been 
completed and thus the final results are not known. However, it is our 
understanding that this test has shown the ability of ACI, when used at 
a bituminous-fired unit, to average 86 percent mercury removal over an 
extended period of time, but has highlighted design problems that must 
be corrected prior to full scale installation on other units.
    On April 21, 2004, the U.S. Department of Energy (DOE) made a joint 
announcement with WE Energies about the initiation of a joint venture 
to demonstrate technology that will remove an ``unprecedented'' 90 
percent (expected but not guaranteed) of mercury emissions from coal-
based power plants. This 5-year project will involve the design, 
installation, operation, and evaluation of an integrated system on one 
coal-fired power plant to control emissions of mercury, particulate 
matter, sulfur dioxide, and nitrogen oxides.
    Further, the electric utility industry reportedly has had trouble 
obtaining solid, guaranteed quotes for ACI installation on coal-fired 
units. We have heard from a number of utility companies indicating that 
they have tried without success to get bids on, and guarantees for, ACI 
installations. To date, we are aware of only one permit outside of a 
federally co-funded program (on a unit to commence operation in 2007 
and burn low-sulfur Western coal) that has been issued that included 
ACI technology (MidAmerican Energy Station permit issued by the Iowa 
Department of Natural Resources). The lack of additional examples is 
indicative of the lack of industry confidence in guaranteeing permit 
levels at this time.
    Of the other technology vendors noted in your summary (e.g., KFx, 
W.L. Gore & Associates, Powerspan, Apogee Scientific), we know of no 
full-scale installations utilizing their technologies. KFx has under 
construction one of their units but this facility will not become 
operational until later this year. At that time, they will be able to 
fully evaluate the technical and economic effectiveness of the process 
on a full-time, long-term basis. We have addressed the W.L. Gore 
technology in another of your questions but will state here that it 
also has not been used on any full-scale operation to our knowledge. 
Powerspan and Apogee Scientific have been involved in a number of DOE 
evaluations but, again, we know of no full-time, long-term operation.
    We agree that, to date, there has been no regulatory incentive 
(beyond what the States are doing) to cause the utility industry to 
make the necessary investments to bring these advanced mercury control 
technologies to a level of commercial availability necessary for wide-
spread utilization. We believe that our proposed rules will provide 
just this incentive.

    Question 14. Executive Order 12866 requires that when an Agency 
proposes a rule, it should also analyze more and less stringent 
regulatory options. Why hasn't EPA produced analysis of a more 
stringent option than the mercury proposal?
    Response. For a significant regulatory action (such as our proposed 
Clear Air Mercury Rule), Executive Order 12866 requires EPA to prepare 
and submit to the Office of Information and Regulatory Affairs (OIRA) 
``[a]n assessment, including the underlying analysis, of costs and 
benefits of potentially effective and reasonably feasible alternatives 
to the planned regulation, identified by the agencies or the public 
(including improving the current regulation and reasonably viable 
nonregulatory actions), and an explanation why the planned regulatory 
action is preferable to the identified potential alternatives.'' EPA 
complied with this requirement.

    Question 15. Has EPA modeled, or collected information on, the 
economic costs to society of mercury-related health or developmental 
problems, such as IQ decline or cardiac effects in adults? If not, does 
EPA plan to in the near future?
    Response. As part of the normal rulemaking process we are 
developing a Regulatory Impact Analysis (RIA) as required by Executive 
Order 12866. We expect to have a final RIA around the time that we 
finalize the Clean Air Mercury Rule. Consistent with the Executive 
Order, we are attempting to quantify and monetize mercury-related 
health and developmental problems.

    Question 16. On March 24, the EPA Office of Research and 
Development (ORD) released a study on mercury emission controls for 
coal-fired electric utilities. The results are clear: widely used 
technologies can achieve 98 percent reductions of mercury at bituminous 
coal plants and 70 percent reductions at sub-bituminous plants; and 
other technologies, which can be installed in 1 to 2 years' time, can 
achieve 90 percent reductions at all coal plants. What is the Agency's 
justification for proposing a technology standard calling for a mere 29 
percent reduction in mercury emissions by 2008 (i.e., the ``Section 
112'' approach), and a cap and trade approach targeting emissions 
reductions of only 69 percent in 2018 (i.e., the ``Section 111'' 
approach)?
    Response. The March 24th EPA Office of Research and Development 
(ORD) study builds on and contributes to extensive work that ORD and 
others have been doing to understand the state of mercury-specific 
control technologies. This study is one of the primary sources of 
information that we have used to inform our current understanding of 
the state of technology. The study concludes that, based on current 
information, it is projected that ACI technology will be available for 
commercial application after 2010 and that removal levels in the 70 
percent to 90 percent range could be achievable for some coal types. 
This assumes the funding and successful implementation of an 
aggressive, comprehensive R&D program at both EPA and DOE. Such 
applications represent only the initiation of a potential national 
retrofit program which would take a number of years to fully implement.

    Question 17. In responding to a question from Senator Carper about 
the effectiveness of W.L. Gore's mercury removal technology, I believe 
you incorrectly stated that the company has developed an activated 
carbon injection (ACI) process. In response to a letter I sent to W.L. 
Gore, Dr. Richard Bucher explained that his company has developed a 
filter bag insert that contains a chemical treatment effectively 
locking mercury to the material. Trial results of this technology show 
mercury capture rates consistently in excess of 90 percent. The company 
anticipates commercial sales in 2005, and projects that their 
technology could cost between 38-83 percent less than ACI. Is the 
Agency aware of this technology? If so, what is your response to these 
results?
    Response. W.L. Gore and Associates conducted a project examining 
its developmental proprietary mercury control process at the U.S. EPA's 
Air Pollution Prevention and Control Division (APPCD) combustion 
research facilities in Research Triangle Park, North Carolina. The 
testing performed was not funded by EPA and was not conducted as part 
of EPA's research to evaluate mercury control technologies. The Agency 
became involved when W.L. Gore and Associates entered into an agreement 
with ARCADIS, APPCD's onsite contractor, to develop data on their 
process. ARCADIS approached APPCD about using its facilities for the 
testing and an agreement was worked out. On several occasions, APPCD 
has entered into similar agreements with private companies interested 
in using its unique combustion facilities to test their technologies.
    While EPA did not sponsor or conduct the tests, W.L. Gore presented 
the results of its testing at a symposium in 2003. The broad objective 
for this testing was to develop data on a fabric filter-based mercury 
removal concept which is based on using a porous fibrous filtration 
media designed to allow rapid chemical oxidation of incident elemental 
mercury (Hg0) and active binding of the oxidized mercury species to the 
surface of the media. The implementation of this process on coal-fired 
boilers would appear to involve use of mercury-trapping inserts in 
existing or new baghouses.
    Typically new technology for large utility boilers requires testing 
beyond the scale at which W.L. Gore tested their technology at the RTP 
facility. EPA has not performed, or been provided with results of, any 
additional testing performed in a ``real-world setting.'' The 
likelihood that this technology could be implemented widely in the near 
future is unclear.

    Question 18. It has been brought to my attention that EPA now has 
the ability to measure the way in which atmospheric mercury deposition 
impacts fish concentrations of mercury. If that is the case, can please 
you deliver to the committee the related findings. Can you explain how 
EPA will use that knowledge in setting a prospective MACT standard?
    Response. In September 2001, EPA developed the Mercury Maps project 
which links air deposition and freshwater fish contamination over any 
geographic scale of interest. The application of the approach at the 
national scale is currently available on the EPA web page at: 
www.epa.gov/waterscience/maps. A regional application and formal peer 
review of the approach are currently under review within EPA. We 
anticipate the report and peer review documentation to be made 
available to the public later this summer. The Mercury Maps approach 
has been used at a screening analysis level to estimate the percentage 
of reductions in air deposition needed to reduce measured fish tissue 
concentrations down to the methyl mercury criterion level (the maximum 
advisable concentration of methyl mercury in fish and shellfish tissue 
to protect the health of fish and shellfish consumers). The approach 
will therefore allow one to predict, in water-bodies where significant 
sources are well characterized, how measured fish tissue mercury levels 
will respond to changes in air deposition levels.

                           NEW SOURCE REVIEW

    Question 19. As you know from my letter of January 13, 2004, I am 
interested in specific information on the status of New Source Review 
enforcement. What is the status of a) the pending cases which EPA has 
already referred to Justice, b) those cases which are awaiting referral 
to Justice, and c) those cases that were previously under active 
investigation by EPA, with respect to the violations of New Source 
Review as those requirements existed prior to the stay of the routine 
equipment replacement rule? Item (c) includes materials gathered 
pursuant to section 114 requests made by the agency from 1999 onward.
    Response. As you may already know from your recent meeting with 
DOJ, as part of EPA's utility sector New Source Review (NSR) 
enforcement initiative, DOJ has filed complaints against 15 
companies,\1\ and EPA has issued one administrative order.\2\ Eight of 
these matters remain in litigation,\3\ and seven have settled.\4\ It is 
our understanding that a significant portion of the staff in DOJ's 
Environmental Enforcement Section are dedicated to all NSR work, and 
pending cases are being addressed in priority order. As Administrator 
Leavitt has noted, enforcement is an essential part of EPA's mission, 
and we will enforce the law. New Source Review is an important tool and 
one component of our comprehensive national strategy to achieve cleaner 
air. We will pursue all filed cases, and we will file new cases as 
appropriate.
---------------------------------------------------------------------------
     \1\American Electric Power; Cinergy Corp.; Ohio Edison; Illinois 
Power; Southern Company (split into Alabama Power and Georgia Power); 
Tampa Electric Company (TECO); Duke Energy; East Kentucky Power 
Cooperative; ALCOA (Sandow Station, TX--Industrial Boiler); Public 
Service Enterprise Group (PSEG); South Carolina Public Service 
Authority (Santee Cooper); Southern Indiana Gas & Electric Company 
(SIGECO's Culley Station); Virginia Electric (VEPCO); and Wisconsin 
Electric (WEPCO).
     \2\Tennessee Valley Authority (TVA).
     \3\American Electric Power; Alabama Power; Cinergy Corp.; Ohio 
Edison; Duke Energy; East Kentucky; Georgia Power; and Illinois Power.
     \4\ALCOA (Sandow Station, TX--Industrial Boiler); Public Service 
Enterprise Group; South Carolina Public Service Authority; Southern 
Indiana Gas & Electric Company (Culley Station); Tampa Electric 
Company; Virginia Electric; and Wisconsin Electric.

    Question 20. I understand that EPA is considering issuing guidance 
to the States for their use in determining what constitutes Best 
Available Control Technology for new and repowered coal-fired power 
plants. According to press accounts, this draft guidance appears 
intended to arrest the development of new, innovative and cleaner 
technologies, such as coal gasification, fluidized bed systems and 
similar improvements. Why would EPA try to limit the States' ability or 
enthusiasm to consider all available cleaner technologies when applying 
BACT as required under the Clean Air Act's PSD/NSR requirements?
    Response. This issue has come up in several recent permitting 
decisions. The Agency has not yet completed its process of developing 
guidance, but will take into account all relevant factors.

    Question 21. What resources will the Agency expend in fiscal year 
2004 and in fiscal year 2005, if the budget request is approved by 
Congress, to comply with the requirements of section 111(b)(1)(B), 
which includes the Administrator's review every 8 years and revision, 
if appropriate, of the New Source Performance Standards?
    Response. The Agency has budgeted for fiscal year 2004 $125,000 for 
the review and revision, if appropriate, of the new source performance 
standards (NSPS) applicable to electric utility steam generating units 
(subpart Da). Under a consent decree, we must propose any revisions by 
February 9, 2005, and promulgate such revisions by February 9, 2006. We 
anticipate similar funding at the program office level would be 
allocated for this effort for fiscal year 2005.

    Question 22. Will the Agency review and revise, if appropriate, 
those New Source Performance Standards that are related to direct and 
indirect emissions of fine particulate matter prior to December 2007?
    Response. Under a consent decree, the Agency is committed to 
reviewing, and revising if appropriate, the new source performance 
standards (NSPS) applicable to electric utility steam generating units 
(subpart Da). This review will include standards for particulate 
matter, sulfur dioxide, and nitrogen oxides--all potentially related to 
fine particulate matter emissions. Review of subpart Da will be 
completed by February 9, 2006.

                         PARTICULATE MATTER 2.5

    Question 23. What are likely to be the lowest cost emissions 
reductions (by source) options available to States seeking to choose 
and impose State and local controls to achieve attainment of the ozone 
and PM2.5 NAAQS before 2012, based on EPA work to date?
    Response. A variety of control options are available for States to 
adopt for reducing ozone-forming NOx and VOC emissions, for reducing 
emissions of direct PM2.5 emissions, and for reducing 
emissions of PM-forming emissions of sulfur dioxide, NOx, and other 
precursors. Control options are available for all sectors of the 
emission inventory, including measures for industrial point sources, 
on-road and non-road mobile sources, and ``area sources'' such as 
woodstoves and backyard refuse burning.
    States have the principal responsibility to identify and adopt 
measures for reducing ozone and PM-forming emissions by the attainment 
deadlines. There is much work to be done by States in identifying and 
evaluating control strategies needed for attainment. Accordingly, it is 
somewhat difficult to characterize the measures that will be ultimately 
selected through this process.
    For some measures, EPA has reliable cost effectiveness ($/ton) 
estimates. For example, EPA has calculation techniques for retrofitting 
school buses and other diesel engines with control devices such as 
oxidation catalysts and particulate traps. For other measures, cost-
effectiveness is much less certain. For example, it is difficult to 
describe expected emissions reductions from programs such as ride-
sharing, programs to reduce VMT, and measures to increase the 
efficiency of existing industrial PM2.5 control devices. EPA 
has funded a grant to STAPPA/ALAPCO to develop a document called the 
``menu of options'' document for PM2.5. This document should 
serve to improve the available information on control measures. 
Moreover, as States develop their implementation plans, much more 
detailed information, tailored to the specific sources in their 
jurisdictions, will be developed.
    For the proposed Clean Air Interstate rule, EPA conducted a 
preliminary analysis of potential local measures for addressing 
PM2.5 nonattainment in the East. This analysis is described 
in a technical support document entitled ``Technical Support Document 
for the Interstate Air Quality Rule Air Quality Modeling Analysis.'' 
This document is available online at http://www.epa.gov/
interstateairquality/tsd0162.pdf. This document summarizes EPA's 
approximations of costs, where available, for a number of control 
measures across a variety of source types, beginning on page 46.

    Question 24. What fiscal year 2005 funding does EPA propose to 
provide to the States, aside from the diesel school-bus request, to 
help them achieve attainment of the PM2.5 standard?
    Response. EPA's fiscal year 2005 Budget Request includes a request 
for $228.5 million in grant funding for State and local governments. Of 
this amount, $42.5 million is for air quality monitoring for 
PM2.5 and approximately $25 million is for other State PM 
activities. As States develop their workplans with the regions, this 
funding level may change as States focus their funding on their highest 
priorities.
    In addition to the funding provided to States, EPA also provides 
technical assistance, guidance and modeling tools to assist States in 
air quality planning and for the development of State Implementation 
Plan (SIP) attainment strategies. The fiscal year 2005 President's 
Budget requests an increase of $2.7 million to improve mobile source 
modeling tools for States to use in identifying cost-effective control 
strategies as part of their SIP development process for the new 
PM2.5 standard. This increased funding will allow EPA to 
improve the models and tools that will be critical to States as they 
develop their air quality control strategies.
    This initiative has two major components. The first component is 
the collection of more accurate emission data from vehicles operating 
in the field, under real-world conditions. This effort would be the 
first attempt at designing a nationwide emissions study of light-duty 
and heavy-duty vehicles using portable emission measurement systems 
(PEMS). The PEMS system was developed by EPA personnel at the OAR 
Laboratory in Ann Arbor, MI, and is an extremely cost-effective and 
highly accurate method for collecting real-world data. The resulting 
data will allow EPA and States to better identify potential sources of 
uncontrolled emissions in the existing fleet and evaluate the 
effectiveness of current and future emission control programs. In 
addition, this program will improve the underlying data that are used 
in the emission models used by the States.
    The second component of this effort is the development of a new 
generation model based on real-world data with the flexibility required 
to meet present and future modeling needs for the States. This new 
model will allow the States to conduct modeling at all levels of 
resolution--from area-wide inventories to evaluating changes in 
emissions on a street corner (i.e., micro-scale modeling) as a result 
of a control strategy. This new generation of emission model will 
include all mobile source pollutants of interest, and can be used by 
States for all mobile source-modeling purposes.
    An additional $3.3 million is requested to develop the emission 
factors and inventories needed by the States to help them develop SIPs. 
To develop these tools we will develop data-based PM.2.5 emission 
factors (with speciation profiles) for 3 to 6 industrial processes 
prioritized by their contribution to the PM2.5 inventory. 
Coal and wood waste combustion, metals processing, mineral products and 
pulp and paper are candidates for this effort. Together these sources 
represent 65 percent of industrial sources of PM2.5. We will 
also develop factors for processes where new testing was not required. 
This assumes that some emissions factors would be paid for by industry.
    Additional funding will develop and improve the following products 
and services used by States as they develop their State Implementation 
Plans to implement the NAAQS:

      new methods for ambient measurements, including: (1) 
routine testing for nitric acid, ammonia, and true nitrogen dioxide, 
and (2) improved artifact-free aerosol carbon measurements (e.g., to 
better address abatement of diesel PM);
      source characterization for measuring: (1) VOC on an 
actual mass basis, (2) sulfuric acid/sulfur trioxide in the presence of 
ammonia, (3) higher-resolution fugitive ammonia emissions from sources 
such as animal feeding operations, and (4) low concentration/high flow 
rate NOx emissions from sources such as internal combustion engines and 
stationary gas turbines;
      emission factors for source types that contribute 
substantial quantities of carbonaceous PM2.5. For each 
source category, factors will be developed for primary and filterable 
PM2.5 and PM10, condensable PM, SO2, NOx, VOC, 16 specific 
Polycyclic Aromatic Hydrocarbons (PAH), and all other compounds and 
elements analyzed in the speciation trends network;
      highly resolved fire emission inventories for the entire 
U.S., to allow separation of their effects from local sources of 
carbonaceous PM2.5;
      guidance and methods for using source-receptor analysis 
to untangle the contributions that different source types make to 
ambient concentrations of carbonaceous PM2.5;
      speciation profiles for important source types, better 
reflecting eastern US conditions than the profiles currently available;
      ready-to-use temporal and spatial allocation procedures 
and data files, so that air quality modeling with improved emission 
inventories can be used to assist in determining just how much 
contribution each source type makes to nonattainment, and
      information on the effectiveness and costs of regulatory 
and nonregulatory approaches for reducing emissions.

    Question 25. Has EPA ever modeled the health-related costs of 
direct particulate matter pollution, or pollution originating from 
smokestacks as solid particles?
    Response. In calculating the benefits of reducing fine particles 
(known as PM2.5 pollution), EPA routinely models the 
benefits of reducing directly emitted particles along with the benefits 
of reducing PM2.5 precursors (sulfur dioxides, nitrogen 
oxides and other compounds). We focus on the total PM2.5 
mixtures, because programs to reduce smokestack emissions generally 
remove both directly emitted particles and compounds that contribute to 
secondary particle formation. We estimate health benefits for total 
PM2.5 reduction, to ensure we look at the full impact of our 
regulations.

                        AIR QUALITY RULES STATUS

    Question 26. Please provide the committee with the status of the 
following rulemakings/actions: a) final 8-hour ozone implementation 
rules; b) the ozone NAAQS review; c) the proposed and final PM2.5 
implementation rules; d) the PM2.5 NAAQS review; e) final 
rule on Phase II of the NOx SIP Call; f) the Agency's response to the 
court remand on Best Available Retrofit Technology (BART); and, g) the 
final non-road, heavy-duty diesel rules?
    Response. The status of the following rulemakings/actions are as 
follows:

    a) Phase I of the final 8-hour ozone implementation rule, 
addressing classification, transition from 1-hour to 8-hour standard, 
revocation of the 1-hour standard and anti-backsliding, was published 
April 30, 2004. Phase II, addressing RACM, RACT, attainment 
demonstrations and modeling requirements, is scheduled to be issued 
later this year.
    b) The ozone NAAQS review has been delayed as a result of the 
delays in the Particulate Matter review. We are currently negotiating 
with litigants on a revised schedule.
    c) The PM2.5 implementation rule is currently in the 
Agency review process prior to being submitted for OMB review. Plans 
are to propose the rule in the summer of 2004 and finalize it in the 
spring of 2005.
    d) The Clean Air Science Advisory Committee (CASAC) is meeting in 
July to review the PM2.5 Criteria Document toxicology, 
epidemiology, and summary chapters. The Agency is negotiating with 
litigants on revised dates for the proposed and final rule as a result 
of the delays in the Criteria Document.
    e) The final rule on Phase II of the NOx SIP Call was published 
April 21, 2004.
    f) The Agency's response to the court remand on Best Available 
Retrofit Technology (BART) was signed by the Administrator on April 15, 
2004, and published in the Federal Register on May 5, 2004 (69 FR 
25184). We have entered into a consent agreement with Earthjustice to 
finalize the BART rulemaking by April 15, 2005.
    g) The Clean Air Nonroad Diesel Rule was signed by Administrator 
Leavitt on Tuesday, May 11, 2004.

                                 OZONE

    Question 27. Will EPA review plans submitted by ``early action 
compact'' areas to their States by the ozone designation deadline of 
April 15, 2004, and discontinue those compacts if those areas have not 
submitted adequate plans to their States?
    Response. Yes, EPA has conducted a detailed review of all the early 
action compact (EAC) plans that were submitted by the State and local 
participants. For example, the milestone that EAC areas were to have 
met on March 31, 2004 was to submit complete local plans to each State. 
These were to include, among other things, a modeling demonstration of 
attainment of the 8-hour ozone national ambient air quality standards 
by 2007. Three areas in Tennessee failed to successfully meet this 
critical milestone: Memphis, Knoxville, and Chattanooga. Accordingly, 
these three areas failed to receive a deferral of the effective date of 
their 8-hour nonattainment date.
    The next key date is December 31, 2004. At this time States with 
EAC areas must submit State implementation plan revisions that contain 
federally enforceable control measures. The EPA is currently closely 
monitoring State progress to meet this date.

                          GENERAL AIR QUALITY

    Question 28. The National Academy of Sciences has issued a report 
on the Air Quality Management in the United States. That report said 
that EPA needs to focus more resources and attention on air toxics 
monitoring and prevention and ensuring that States are enforcing their 
State implementation plans. How does EPA plan to respond to this 
report?
    Response. EPA believes that the NAS' comprehensive, thoughtful 
report and recommendations contain reasonable long-term goals for air 
quality management in the United States. We are interested in using the 
report and recommendations as a framework for developing improvement to 
our current system.
    We are especially pleased that several of these recommended 
approaches are consistent with recent initiatives EPA has undertaken in 
our continuing effort to provide Americans with cleaner air.
      The Report recommends improvements in air toxics 
monitoring. OMB's Program Assessment and Rating Tool (PART) assessment 
for the 2004 budget had the same conclusion, and that year's budget 
request included a $7 million increase for air toxics monitoring. These 
funds are now being put to use to enhance national and local scale 
monitoring of toxic air pollutants.
      The Report recommends the use of multi-pollutant 
approaches and cap-and-trade programs. We have applied both concepts in 
the President's proposed Clear Skies Act and EPA's recently proposed 
Interstate Air Quality Rule and mercury rule.
      The Report recommends additional research on fine 
particle pollution. EPA is continuing its research on fine particles, 
including research that should improve our ability to relate benefits 
to specific fine particle reductions.
      The Report recommends that existing diesel vehicles be 
cleaned up. EPA has launched a School Bus USA and other programs to 
retrofit existing diesel vehicles.
      The Report recommends that EPA prioritize the 188 listed 
air toxics so that we can focus on reducing those that pose the most 
significant risk. EPA took a step in this direction when it identified 
33 air toxics that are a special concern in urban areas.
      The Report recommends that State air quality plans 
address multiple pollutants instead of addressing one pollutant at a 
time. EPA has supported legislation and is taking administrative steps 
that, together, will allow States to coordinate their plans for 
reducing ozone, fine particle and regional haze pollution rather than 
addressing each air pollution problem individually.
    The NAS report is critical of efforts to date under the Clean Air 
Act to protect ecosystems. EPA strongly agrees that ecosystem 
protection is a critical goal. We believe it is important to carefully 
consider the NAS recommendation in the context of the varying nature of 
ecosystem problems across the country. The kinds of approaches that are 
adequate to protect ecosystems in the Great Smokies, for example, may 
not be appropriate for the desert Southwest. This recommendation 
deserves a thoughtful examination before determining the best possible 
approach.
    EPA agrees with the need to better integrate planning for various 
air pollutants. As the NAS points out in its report, the Clean Air Act 
has a variety of different programs with different timeframes and 
requirements, depending on nature of the pollutant. EPA is working to 
integrate these programs as much as possible, given the statutory 
differences. EPA will work with State and local air pollution control 
agencies in integrating these programs as well as any other affected 
Federal agencies.

                               AIR TOXICS

    Question 29. According to the National Air Toxics Assessment, more 
than 200 million people have an increased risk of cancer and other 
health effects because of toxic air pollutants. What plans does EPA 
have in fiscal year 2004 and fiscal year 2005 for adding new substances 
to the list of Hazardous Air Pollutants that need to be controlled 
under section 112 of the Clean Air Act?
    Response. EPA continues its research efforts to develop better 
knowledge of air pollutant emissions and toxicology. As new credible 
scientific knowledge emerges, EPA will review that information and 
decide if additional pollutants should be added to the section 112 list 
of hazardous air pollutants. In addition, EPA will continue to evaluate 
petitions which seek to add individual substances to that list. As 
always, EPA will favor the use of scientifically peer-reviewed 
information in making such determinations.

    Question 30. What other plans does EPA have, aside from the 
proposed utility emissions rule, to reduce the involuntary exposure of 
Americans to hazardous air pollutants?
    Response. In fiscal year 2004 and fiscal year 2005, EPA will 
continue its program of evaluating the impacts of maximum achievable 
control technology standards on individual and population risks. As 
mandated under section 112(f) of the Clean Air Act, EPA will develop 
additional standards for source categories as necessary to reduce 
cancer, noncancer, and environmental risks to acceptable levels. EPA 
will also be working on an area source standards required under Section 
112(k) of the CAA which addresses smaller sources such as dry cleaners, 
autobody refinishers, and gas stations. These smaller sources in 
combination with other sources in urban areas add to people's exposure. 
In addition, we will continue to support community-based efforts which 
supplement but do not replace regulatory efforts to reduce air toxics. 
There are currently over thirty community-based projects on-going 
across the Nation. These projects will obtain reductions in air toxics 
through voluntary means, often quicker than regulations would. We are 
working on the tools to help any community actively address their local 
air toxic concerns. To assure continued progress in air toxics risk 
reduction from these rules EPA has developed the National Air Toxics 
Assessment (NATA) that we update every 3 years, we can evaluate the 
cumulative risk levels for the general population from a set of air 
toxics and measure changes in these risk levels over time. Further, the 
EPA is developing a national air toxics monitoring network to track 
reductions in ambient levels of toxics over time. The network, which is 
now fully operational, will measure a set of high risk air toxics. The 
network has been designed to measure long-term progress in air toxic 
reduction trends.

                           MONTREAL PROTOCOL

    Question 31. If the Extraordinary Meeting of the Parties to the 
Montreal Protocol, which is occurring March 24-26, 2004, concludes that 
the Parties/the U.S. should promulgate a final rule by 2005 to control 
domestic stockpiles in a manner consistent with Decision IX/6 of the 
Protocol, will you have the ability to complete that rulemaking and 
will you commit to doing so?
    Response. EPA is close to resubmitting a proposed rulemaking to OMB 
for review. At the present time, EPA is making final revisions to that 
proposal to address interagency comments and to incorporate 
requirements in Decisions Ex I/3 (the recent decision taken at the 
March 2004 Meeting of the Parties regarding the critical use exemption 
for 2005). Naturally, EPA will address the use of domestic stockpiles 
vis-a-vis Decisions EX I/3 and IX/6 in this proposed action. EPA 
anticipates publication of the proposed rule this summer to allow 
sufficient time for public comment and for publishing the final rule.

    Question 31. What is the status of the Agency's development of the 
model to determine the effect of changes in the phase-out schedule of 
ozone depleting substances on the number of lives saved through 
implementation of the stratospheric ozone protection title of the Clean 
Air Act? The First Prospective Report on the Costs and Benefits of the 
Clean Air Act Amendments (Section 812 Report) was published in 1999 and 
estimated the total number of lives saved to be 6.3 million.
    Response. In the 1980's, EPA developed the Atmospheric Health 
Effects Framework (AHEF), a model that quantifies the benefits of Clean 
Air Act programs to protect the stratospheric ozone layer. This model 
is comprised of five separate modules which allow EPA to continually 
update each of the modules as improvements are made and/or when new 
information becomes available.
    The first module estimates current and projected emissions of ozone 
depleting substances (ODS) from the major industrial sectors where they 
are used. The second module uses a two-dimensional atmospheric model to 
account for the time to transport ODS emitted at ground level into the 
stratosphere. The amount of ODS that reaches the stratosphere is then 
used to determine the subsequent ozone destruction. The next module 
calculates the amount of UV that reaches the earth's surface at various 
latitudes for a given amount of ozone depletion. In the final step, the 
incidence and mortality from skin cancer are projected using a dose 
response relationship for UV and the development of both melanoma and 
non-melanoma skin cancer.
    The health benefits that result from this analysis assume full 
compliance with the Montreal Protocol Adjustments and represent the 
incremental benefits when compared to the production freeze agreed to 
in the original Montreal Protocol (when no phase-outs were required). 
The model does not estimate the health impacts of a scenario where no 
controls are placed on the production and use of ODS (e.g., no Montreal 
Protocol).
    EPA is currently reviewing newly published data on the 
immunosuppressive effects of UV exposure in humans. This new body of 
research provides epidemiological evidence to support the hypothesis 
that UVB exposure in humans causes a temporary reduction in the ability 
to produce antibodies and to fend off infection. Over the next few 
months EPA will determine whether the weight of scientific evidence is 
sufficient to develop another module for the AHEF and whether it is 
feasible to quantify immunosuppressant effects. In addition to this 
potentially large change, EPA is completing a peer review of the model 
and developing a paper simply to describe the AHEF in its current form.
    This model upgrade and peer review of the model was initiated to 
support EPA's Second Prospective Report on the Costs and Benefits of 
the Clean Air Act (812 Study), which will include updated costs and 
benefits.

                         AIR QUALITY MONITORING

    Question 32. Please provide the committee with a detailed 
description of the monitoring networks supported by the Agency in the 
fiscal year 2004 (as appropriated) and fiscal year 2005 (as requested), 
including the pollutants they monitor, their purpose, the entities 
operating them, and their funding.
    Response. EPA oversees operation of several monitoring networks 
that are coordinated with State and monitoring agencies throughout the 
country. These networks are described below.
    State and Local Air Monitoring Stations (SLAMS) and National Air 
Monitoring Stations (NAMS) represent the majority of all criteria 
pollutant (sulfur dioxide (SO2), nitrogen dioxide (NO2), carbon 
monoxide (CO), ozone (O3), lead (Pb), particulate matter--aerodynamic 
diameter of 2.5 microns or less (PM2.5), and particulate 
matter--aerodynamic diameter of 10 microns or less (PM10)) monitoring 
across the Nation with over 5,000 monitors at approximately 3,000 
sites. These stations use Federal Reference or Equivalent Methods (FRM/
FEM) for direct comparison to the National Ambient Air Quality 
Standards (NAAQS). NAMS are a subset of SLAMS that are designated as 
national trends sites. All these pollutants except PM2.5 are 
funded in partnership with the State and local agencies under Section 
105 grants. Federal funding for support of these parts of the network 
are approximately $100 million per year.
    PM2.5 is funded under Section 103 and as such is fully 
funded using Federal money distributed through EPA. This program is 
funded at $42.5 million per year. The PM2.5 networks include 
three major components:

      Filter-mass measurements at nearly 1,000 FRM sites that 
measure 24-hour averaged concentrations through gravimetry. The primary 
purpose of these data are for comparison with the NAAQS;
      Continuous mass measurements by approximately 350 
continuously operating using a range of technologies. These measurement 
are primarily used for the public reporting of the air quality index; 
and
      Chemical speciation measurements that consists of 
approximately 54 trend, 175 State Implementation Plan (SIP), and 150 
Interagency Monitoring of Protected Visual Environments (IMPROVE) 
sites, respectively. The vast majority of these sites collect aerosol 
samples over 24 hours every third day on filters that are analyzed for 
trace elements, major ions (sulfates, nitrates, and ammonium) and 
organic and elemental carbon fractions. Most of the IMPROVE sites are 
operated by personnel from the Federal Land Management (FLM) and Forest 
and National Park Services. In addition to the 103 money that supports 
this program there is an additional $1.25 million that is appropriated 
under Section 105.

    The Clean Air Status and Trends Network (CASTNET) originally was 
designed to account for progress of strategies targeting major 
electrical generating utilities throughout the Midwest which release 
acid rain precursor emissions, sulfur, and nitrogen oxides. Network 
operations are contracted out to private firms funded through Science 
and Technology (S&T) funds at a cost of $4 million per year. CASTNET 
consists of approximately 70 sites located predominantly throughout the 
East with greatest site densities in States along the Ohio River Valley 
and central Appalachian Mountains. Aggregate 2 week samples are 
collected by filter packs and analyzed for major sulfur and nitrogen 
oxide transformation compounds (e.g., end products such as sulfate and 
nitrate ions). CASTNET was deployed in the 1980's as part of EPA's 
National Acid Precipitation Assessment Program (NAPAP). A network 
assessment in the mid-1990's, lead to a more optimized and less 
extensive network.
    Photochemical Air Monitoring Stations (PAMS) measure ozone 
precursors (i.e., volatile organic compounds (VOC) and nitrogen oxides 
(NOx) which react to form ozone) at 75 sites in 25 metropolitan areas 
that were classified as serious ozone non-attainment coincident with 
release of the 1990 Clean Air Act (CAA) amendments. These sites are 
operated by State and local agencies. The Federal share of operating 
these sites is $14 million per year through Section 105 funding. The 
addition of PAMS in the early to mid-1990's was a major addition to the 
national networks, introducing near research grade measurement 
technologies to produce continuous data for over 50 VOC compounds 
during summer ozone seasons.
    EPA supports the National Air Toxics Trends Sites (NATTS) and 
community assessment studies of air toxics. The NATTS includes 23 sites 
operated by State and local agencies at a cost of $3.8 million using 
Section 103 funds. The NATTS sites focus on measurements that are of 
the most risk. These include benzene, acrolein, formaldehyde, chromium, 
1-3 butadiene, and arsenic. $6.2 million of Section 103 funding is used 
to provide competitive awards for community assessment studies to 
State, local, and Tribal agencies. An additional $6.5 million of 
Section 105 funding is provided to State and local agencies for their 
own air toxic monitoring work.

                             CLIMATE CHANGE

    Question 33. When do you expect that the ``state of the 
environment'' report will be finished?
    Response. EPA released its first ever State of the Environment 
report in June 2003 as a draft with the intent of using it to engage 
stakeholders and the American public. Since its release, the Report has 
received valuable feedback collected from stakeholders through dialog 
sessions and advisory committee feedback. Stakeholders identified a 
number of opportunities for improvement in the report, which are being 
discussed for inclusion in the next Report on the Environment planned 
for release in Spring 2006. The new report will also provide an 
interactive web based capabilities allowing increased access and 
usability to relevant data and additional details. Enhanced analytical 
capabilities currently planned for development and implementation over 
the next two fiscal years will provide the tools necessary to address 
the improvements identified.

    Question 34. What are the Agency's views on the likely effect of 
global warming on smog and air quality impacts on human health?
    Response. This question actually has two questions embedded within 
it: 1) what is the effect of climate change on smog (ozone) and air 
quality? and 2) what is the effect of smog and air quality on human 
health?
    For the second question, there is a wealth of evidence of the 
health effects of ozone and other air pollutants (e.g., particulate 
matter). These are summarized in Criteria Documents prepared by EPA's 
Office of Research and Development in support of the National Ambient 
Air Quality Standards. (See for example: http://cfpub.epa.gov/ncea/cfm/
partmatt.cfm)
    For the first question, there is cause for concern that climate 
change may affect ozone and air quality in the U.S. Climate change may 
affect air quality by changing local meteorology and atmospheric 
transport patterns, emission rates from natural and anthropogenic 
sources, and the type and distribution of airborne allergens. However, 
the directions and magnitudes of these changes for any given location 
are poorly understood and a matter of speculation at this time. The 
National Research Council, in a report titled Global Air Quality, notes 
``Changes in temperature and humidity patterns resulting from global 
climate changes can directly affect the concentrations of many 
important tropospheric chemical species'' (http://books.nap.edu/
catalog/10097.html). However, the NRC also highlights the uncertainty 
involved in estimating any effects of climate change on ozone and air 
quality: ``Our understanding of many of these climate-chemistry 
linkages is in its infancy. A better understanding is needed in order 
to make accurate estimates of future changes in climate and air quality 
. . .'' Similarly, in the National Research Council's June 2001 Report, 
Climate Change Science: An Analysis of Some Key Questions,'' this topic 
was addressed: ``[M]uch of the United States appears to be protected 
against many different adverse health outcomes related to climate 
change by a strong public health system, relatively high levels of 
public awareness and a high standard of living. Children, the elderly 
and the poor are considered to be the most vulnerable to adverse health 
outcomes. The understanding of the relationships between weather/
climate and human health is in its infancy and therefore the health 
consequences of climate change are poorly understood. The costs, 
benefits and availability of resources for adaptation are also 
uncertain.''
    The EPA has recognized the importance of improving our 
understanding of the potential impacts of climate change on air quality 
and public health in the U.S. and has developed a research program 
focused on addressing this issue. This research program comprises one 
of four focal areas within EPA's Global Change Research Program and is 
integrated into the larger interagency Climate Change Science Program. 
The research activities under this program include a series of 
extramural grants to universities focused on improving linkages between 
global and regional air quality models, improving our understanding of 
climate-chemistry interactions, and improving our ability to estimate 
future emissions scenarios. This extramural research complements an 
intramural research program focused on developing the methodology and 
data bases needed to assess the potential impacts of global change on 
air quality and public health. For information on future Federal 
scientific study in this area, please see the ``Strategic Plan for the 
U.S. Climate Change Science Program,'' (July 2003), available at 
www.climatescience.gov.

    Question 35. Does the Agency's fiscal year 2004 (appropriated) or 
fiscal year 2005 (requested) include any funds to complete the national 
assessment of the potential consequences of climate change and 
variability required to be submitted to Congress in 2004 (and 
quadrennially), pursuant to the Climate Change Research Act of 1990?
    Response. EPA's fiscal year 2004 (appropriated) and fiscal year 
2005 (requested) budgets do not include any funds to complete a 
national assessment of the potential consequences of climate change and 
variability. All of EPA's activities related to the first U.S. National 
Assessment were completed prior to fiscal year 2004. As part of the 
first U.S. National Assessment process, EPA was responsible for 
sponsoring three Regional Assessments (Mid-Atlantic, Great Lakes, Gulf 
Coast) and the Health Sector Assessment. All of these assessments were 
completed prior to fiscal year 2004.

    Question 36. A recent National Academy of Sciences report concluded 
that the U.S. climate change science program lacks the necessary 
resources to follow through with the goals of its strategic plan. Does 
the Agency's fiscal year 2005 budget request do anything to help fill 
that resource void?
    Response. The planned activities of EPA's Global Change Research 
Program are completely aligned and consistent with the CCSP Strategic 
Plan. The goals of EPA's Global Program are clearly articulated in its 
peer-reviewed Research Strategy (http://cfpub.epa.gov/gcrp/
recordisplay.cfm?deid=18665). Also, the plan for implementing the 
program--including ``critical paths'' for doing the planned research 
and assessments--is described in EPA's Multi-Year Plan [MYP] (http://
www.epa.gov/osp/myp/global.pdf) (Both of these documents were completed 
prior to release of the final CCSP Strategic Plan.) However, EPA's 
existing Global Multi-Year Plan (MYP), which identifies the program's 
research goals and priorities, the specific research needed to address 
the most compelling science needs, and opportunities for collaboration 
and integration both within and outside of EPA, does not account for 
production of the new Synthesis Reports called for in the CCSP 
Strategic Plan. Since completion of the current version of the MYP, EPA 
has assumed responsibility for contributing to 10 of the priority 
``Synthesis Products'' called for by the U.S. Climate Change Science 
Program (CCSP). EPA is the Lead or Co-Lead Agency for three of the 
Synthesis Products and a Contributing Agency for seven other products. 
EPA's role in completion of the Synthesis Reports will be carried out 
using budgeted funds.

                           TIRE INCINERATION

    Question 37. As you may know, for many years I have strived to 
protect Lake Champlain and Vermont's air quality from potential 
pollution increases coming from International Paper's Ticonderoga Mill 
in New York. The plant now wishes to burn tire-derived fuel, a process 
that can release dangerous criteria, hazardous, and carcinogenic 
pollutants if combustion is not controlled properly. Just what 
``properly'' means remains a great question to which EPA appears not to 
have a clear answer. Does the Agency plan to continue research and 
testing in this area? If so, please explain how. If not, why not?
    Response. At this point we are not aware of any specific plans to 
conduct additional research and testing on the combustion of tire-
derived fuels. In general, the Agency promotes the destruction of scrap 
tires through their use as tire-derived fuels, which prevents them from 
becoming greater environmental problems in landfills and other waste 
disposal sites. When combusting any substance, as long as the three 
conditions of good combustion practices are followed--time, turbulence 
and temperature--emissions from such sources will be minimized. Most of 
EPA's combustion regulations require good combustion practices, which 
serve to increase the time the fuel is resident within the combustion 
chamber, provide for sufficient turbulence for mixing of fuel (e.g., 
tire-derived fuels) and oxygen, and require combustion zone 
temperatures high enough to provide for destruction of the fuel (and 
its by-products) within the combustion chamber.

                              MACT REVIEW

    Question 38. Section 112(d)(6) of the Clean Air Act states: ``The 
Administrator shall review, and revise as necessary (taking into 
account developments in practices, processes, and control 
technologies), emission standards promulgated under this section 
[governing hazardous air pollutants] no less often than every 8 
years.'' What is the status of EPA review under this mandate?
    Response. EPA is reviewing MACT standards under 112(d)(6) in 
conjunction with its review of residual risks under section 112(f) of 
the Clean Air Act. So far, the results of these indicate that the MACT 
standards are still appropriate and need no further revision.

                           DEFENSE OF DEFENSE

    Question 39. Just as Federal income tax payments would plummet 
without the IRS, I am deeply concerned that the military's stewardship 
of hazardous substances on its operational ranges would deteriorate if 
exempt from Federal and State oversight. Contamination from military 
munitions needs to be addressed before it migrates off-range and 
threatens public drinking water systems. As a retired naval officer, I 
know that military readiness can be achieved without compromising 
environmental safeguards. Do you agree, Administrator Leavitt, that the 
military should comply with the same environmental standards as 
everyone else?
    Response. Yes, Federal laws, including the Federal Facility 
Compliance Act, require the entire Federal Government, including 
military facilities, to comply with environmental laws and meet the 
same standards as everyone else. One of EPA's important roles is 
ensuring that all Federal agencies comply with statutory environmental 
requirements in the same manner and to the same extent as privately 
owned facilities.

              HOMELAND SECURITY / BUILDING DECONTAMINATION

    Question 40. On the day that many of my staff were quarantined due 
to the ricin scare in Senator Frist's office, the President proposed to 
eliminate funding for EPA's building decontamination research. This 
research is critical as the Nation learns to live with the risk of 
bioterrorism. Why is the President proposing to abruptly terminate this 
program?
    Response. With fiscal year 2003 and fiscal year 2004 
appropriations, plus the President's fiscal year 2005 request, EPA will 
spend $67.6 million for building decontamination and other cleanup 
efforts. This total consists of research ($50.8 million) and the 
establishment of a national decontamination team ($16.8 million).
    In the specific instance of fiscal year 2005 funding, EPA has made 
adjustments in its fiscal year 2004 Building Decontamination Research 
Program to ensure that all critical decontamination technology 
evaluations are funded and that interim decontamination technical 
guidance is developed as planned by October 2005.
    EPA will continue to coordinate homeland security research 
activities with the Department of Homeland Security, the White House 
Office of Homeland Security, DOE, DoD, CDC and other Federal agencies 
to assure that research needs are identified and met. Homeland Security 
Presidential Directive 10, released after the President's fiscal year 
2005 Budget was sent to Congress, includes a significant role for EPA 
in the area of building decontamination research.

                   FEDERAL ROLE IN CHEMICAL SECURITY

    Question 41. The Federal approach to requiring security 
vulnerability assessments/emergency response plans and certification 
varies for the 13 critical infrastructure segments. There is currently 
no Federal mandate for a comprehensive assessment of the chemical 
industry or requirement that chemical facilities do vulnerability 
assessments. What do you think is the appropriate Federal role 
concerning chemical facilities?
    Response. The Department of Homeland Security (DHS) has assumed the 
responsibility for chemical facility security. Homeland Security 
Presidential Directive HSPD-7, issued December 17, 2003, outlines DHS' 
responsibilities in this area.

                 DRINKING WATER AND WASTEWATER SECURITY

    Question 42. What is the extent of the EPA's current efforts to 
plan for a catastrophic or cataclysmic event in which, among other 
things, power and water would be disrupted for indefinite periods of 
time perhaps leaving millions of citizens without vital services? Who 
is involved and how much time and resources are being devoted to this 
effort?
    Response. Designated in HSPD-7 as the Sector Specific Agency for 
water, EPA is taking a lead in promoting efforts to ensure continuity 
of supply in the event of a terrorist or other catastrophic occurrence. 
In close collaboration with our partners in the water sector, EPA has 
developed guidance, The Response Protocol Toolbox, to assist drinking 
water utilities in planning for and delivering an alternate water 
supply during an emergency. This guidance encourages systems to 
consider alternative sources that can meet the needs not just for 
routine domestic consumption and sanitation, but also for firefighting 
activities and customers with special requirements. We are also 
developing training and protocols for EPA regional and headquarters 
staff as they provide technical assistance during nationally sensitive 
security events, such as the G-8 Summit. In addition, EPA has prepared 
other emergency response planning guidance documents and training to 
help utilities complete their emergency response plan certifications as 
required under the Bioterrorism Act of 2002.
    EPA is examining the potential for catastrophic losses of power and 
water through research and development. One of our projects with 
Argonne National Laboratory will examine the impacts of the loss of 
water service on other economic sectors. Argonne also is examining the 
impacts of failure of other sectors like transportation, electric 
power, and telephone on the water sector. Another EPA project is 
investigating the experiences of water utilities during the September 
2003 power outages (North East grid failure and Tropical Storm Isabel), 
with direct input from the utilities that were adversely affected 
during these events. We expect that these studies will lead to an 
improved understanding of sector interdependencies and the importance 
of maintaining a reliable supply of water.
    The Corps of Engineers is cooperating with EPA to examine the 
options available for dealing with loss of water at water utilities. 
The Corps study will examine options for reaching agreements between 
neighboring water authorities to share water in an emergency, as well 
as short-term solutions such as providing bottled water. EPA is also 
developing an agreement with the Office of Naval Research to apply 
research they are conducting on the development of expeditionary unit 
water purification to civilian disaster relief in the U.S.
    EPA is also coordinating with FEMA, DHS, and U.S. Army Corps of 
Engineers on each agency's role in providing emergency drinking water 
supplies. Last, EPA is conducting activities within the agency so that 
our response can be properly coordinated and information disseminated 
effectively through methods such as our emergency operations center.

    Question 43. How is the EPA coordinating its efforts in all 
infrastructure sectors with those occurring in each sector at the 
Department of Homeland Security?
    Response. Protecting critical infrastructure is a vital and 
challenging component of EPA's mission. An integral part of our water 
security efforts must involve a close collaborative relationship with 
the Department of Homeland Security (DHS) to ensure that we leverage 
our respective resources to maximize protection of the water sector. In 
general, EPA possesses expertise in understanding the water sector and 
enjoys long established relationships with water utilities, water-
related government entities, and associations. DHS has expertise in the 
form of intelligence analysis and general security issues that can be 
used together with EPA's proficiencies in order to deliver the most 
robust, comprehensive assistance to the water sector.
    Such a collaborative approach is in fact mandated in Homeland 
Security Presidential Directives (HSPD)-7 and 9. HSPD-7 designates EPA 
as the Sector Specific Agency responsible, with guidance from DHS, for 
improving water security. HSPD-9 directs DHS to develop a plan in 
consultation with EPA for establishing a nationwide surveillance and 
laboratory program for water. In response to these directives and to 
the threats confronting the water sector, EPA, with support whenever 
appropriate from DHS, must continue to provide an array of assistance 
to the water sector that includes training for preparedness, developing 
voluntary best security practices, enhancing contaminant information 
tools, and evaluating detection technologies. For example, in 2004 we 
will renew efforts with DHS's Office of Domestic Preparedness to 
provide emergency response training to water systems and emergency 
responders.
    There are a number of interagency committees that are coordinating 
research and operational issues between various sectors. Several 
agencies either chair or have representation on these committees. 
During major security events, EPA is participating in Joint Operations 
and Planning groups (along with the FBI, Secret service, DHS, CDC, 
etc.) for the G-8 Summit, Presidential Conventions, and similar events 
of national security importance. EPA is also participating in major 
governmentwide exercises like TOPOFF-3 to improve coordination with 
other agencies.
    In addition, EPA and DHS must continue to identify security 
concerns that present the greatest risks to the water sector. Our 
collective efforts should improve the capability of the water sector 
and others that support or rely on the sector, to not only understand 
security threats and vulnerabilities, but also to have access to the 
tools and assistance necessary to reduce security risks.

    Question 44. Has the EPA provided comments regarding drinking water 
and wastewater security to the Department of Homeland Security for 
incorporation in the National Response Plan? If so, please provide a 
copy of those comments. If not, please provide your understanding of 
how water and wastewater security issues will be dealt with in the 
National Response Plan.
    Response. The Homeland Security Act and Homeland Security 
Presidential Directive-5 mandated the creation of a National Response 
Plan (NRP) based on a new National Incident Management System (NIMS). 
The NRP and the NIMS provide the structure that weaves the capabilities 
and resources of the private sector and all of the jurisdictions, 
disciplines, and levels of government into a cohesive, unified, 
coordinated, and seamless national approach.
    The NIMS provides interoperability and compatibility among Federal, 
State, local, and Tribal capabilities through a core set of concepts, 
principles, and terminology. Key elements of the NIMS include the 
Incident Command System (ICS); multi-agency coordination systems; 
resource management and typing; communications; and training, 
qualification, and certification processes.
    The NRP incorporates the best practices and procedures from various 
incident management disciplines--homeland security, emergency 
management, law enforcement, firefighting, public works, public health, 
and emergency medical services--and integrates them into a unified 
structure. The NRP is an all-hazards incident prevention, preparedness, 
response, and recovery plan.
    Yes, EPA's Office of Solid Waste and Emergency Response and the 
Office of Enforcement and Compliance Assistance have provided detailed 
comments on the NRP pertaining to drinking water and wastewater 
security (attached). The Nation's domestic incident management 
landscape encompasses a broad spectrum of threats and hazards, both 
man-made and naturally occurring. Given the complex and emerging 
threats of the 21st century, the Nation must embrace a unified and 
coordinated approach to incident management.
    NRP DRAFT #1 COMMENT FORM
    Agency or Organization: EPA/Office of Water
    Point of Contact (name/phone number/email): Nanci Gelb, 564.3750 or 
Steve Clark 564.3784
    Page #Line #Comment TypeComment
    TOCGEN
    The overall organization of the document is much improved over the 
May 15, Initial Plan Draft. We agree that all the various plans need to 
be organized. We agree strongly that DHS's role is to coordinate 
emergence response and for the supporting agencies to, as much as 
possible, operate under their own authorities.515SubstantiveThe 
Stafford Act declarations have specific requirements and procedures. We 
encourage DHS to develop some criteria to distinguish catastrophic 
incidents that would require a coordinated Federal response. Is 
contaminated mail in a Senator's mailroom significant?
    Or if one Federal agency's mailroom is contaminated? We need to 
have decision criteria available or else we may not take the 
appropriate steps in a timely coordinated fashion.641SubstantiveThe 
shift in application of the color-coded threat level to local and 
sector specific have not been communicated particularly well. At 
minimum, each Agency's EOC should have a current (weekly?) status of 
cities, locations, and sectors above the national norm (currently 
yellow).77 ``''The seamless transition will require prior knowledge of 
threats by participating D/A's signed on to this NRP.83 ``''Will DHS be 
training all D/A's on the NIMS?1521 ``'' Again we need DHS to 
coordinate intelligence on sector threats so that the ESF agencies can 
be prepared. Short-term ideally is what, where, when. This allows 
response teams to be at maximum readiness. Long-term intelligence on 
types of attacks should be available to plan for purchase of equipment 
and training of personnel.403-11 ``''The criteria for a catastrophic 
event need to be better defined or one might occur and no one knows 
until it is too late.4316-49 ``''There need to be explicit criteria and 
published SOP's for events that are required to be reported to 
HSOC.4538-46 ``''DHS should have some SOP for routine dissemination of 
threats to Sector Agencies and ESF leads. Preparedness requires 
advanced knowledge.ESFGeneralWe defer comment on the ESF appendices, as 
they are not sufficiently detailed.
    Background. This form provides agencies and organizations a common 
format for providing comments on the Draft National Response Plan 
(NRP). Its design is intended to make it easy to merge comments from 
various respondents and arrange them in a single, consolidated matrix 
for review and incorporation into the plan.
Procedures
    1. On the first page, include the organization providing the 
comments and a point of contact.
    2. In the Page #, and Line # columns, insert the relevant page and 
line number(s) pertaining to the comment.
    Note: For general comments that do not correspond to a specific 
page number, place the word ``GEN'' under the page # column.
    3. In the Comment Type column, indicate whether the comment is 
Critical, Substantive, or Administrative in nature.
    4. In the Comment column, place only one comment per row: and 
provide comment, recommendation and rationale.

    Question 45. Has the EPA completed a comprehensive national plan 
for securing the nation's water and wastewater infrastructure? If not, 
has the Agency cooperated with DHS on a similar endeavor? If so, please 
provide a summary of your work with DHS and the information you 
provided to the Department.
    Response. Following the terrorist events of September 11, 2001, 
EPA's mission expanded from safeguarding the environment from 
conventional sources of pollution to protecting the environment from 
the aftermath of terrorist acts. We recognized that the Agency needed a 
robust plan to articulate in a full and comprehensive manner our 
approach for meeting our responsibilities and duties as a Sector 
Specific Agency for water and as a supporting Agency for many other 
critical homeland security efforts. As a result, we published the 
Strategic Plan for Homeland Security in September 2002. Goal 1 of this 
plan specified the tactics that we would use to enhance the protection 
of the water sector and the results that we would use to gauge our 
success. The Agency is currently revising the strategic plan to 
incorporate Presidential Directives issued subsequent to the original 
plan and to catalogue those activities that have been completed since 
2002.
    As the designated Sector-Specific Agency (SSA) for drinking water 
and wastewater systems under HSPD-7, EPA is currently working to 
provide input to DHS for the development of the National Infrastructure 
Protection Plan (NIPP). EPA is coordinating with DHS in the preparation 
of a Sector-Specific Plan (SSP) for the water sector that will assist 
DHS in developing the NIPP. The water sector SSP describes how EPA is 
identifying key water sector assets and threats, promoting the 
assessment and prioritization of vulnerabilities, developing and 
implementing protective programs, and measuring progress in security. 
EPA will meet the requested DHS submission date of June 11, 2004, and 
will also continue to work collaboratively with DHS in updating the 
water sector SSP and providing input into the NIPP.

    Question 46. Is training for water system contamination events 
being incorporated into water system operator and first responder 
training protocols? Please provide a complete description of what is 
being done to ensure that the initial response to contamination of a 
water system is effective. Please include a description of how your 
work is being coordinated with DHS.
    Response. Yes. EPA, in partnership with the Department of Homeland 
Security, conducted 27 training sessions in 2003 focusing on emergency 
response planning for large drinking water utilities. In addition, we 
will have conducted approximately 30 more training workshops in 2004 
targeting a broader size range of utilities. These workshops focus on 
various elements of emergency response planning such as coordination at 
the Federal, State and Local level with other first responders, and 
using EPA guidance documents effectively. Some of the workshops will 
also have a tabletop exercise. Additionally, the workshops will offer a 
description of some of the other tools EPA is providing to assist with 
utility security concerns. These include the ``Laboratory Compendium'' 
that is designed to assist utilities in identifying laboratories 
capable of analyzing emergency response samples. While vulnerability 
assessment and emergency response planning security requirements have 
not been mandated for wastewater utilities as they have been for 
drinking water systems, many of the same training activities are being 
planned for wastewater utilities.
    Also, EPA is collaborating with the American Water Works 
Association and the Centers for Disease Control and Prevention to 
provide a training seminar for water utilities, public health 
officials, and other first responders. This training will be focused on 
health surveillance issues during an emergency drinking water response.
    One of the most effective and efficient means to enhance the safety 
of the water sector involves incorporating security principles into 
business-as-usual and utilizing water system operators as a first line 
of defense. EPA has awarded a grant to the Association of Boards of 
Certification to develop voluntary State drinking water and wastewater 
security-related operator certification examination questions. These 
questions will be shared with all State operator certification programs 
and will be available for use by the end of this year. Some States such 
as Connecticut are also using portions of their State water security 
grants to incorporate security into operator certification.
    EPA's response to emergencies is implemented through our 10 
Regional offices, and is characterized by a system that includes 
Federal, State, and local cooperation. The strength of our program lies 
with our On-Scene Coordinators who are experienced responders. They 
bring with them delegated authorities and strong relationships with 
State and local responders that are backed up by a national network, 
Federal response assets, and contractor capabilities. They also have 
access to commercial laboratories. Our On-Scene Coordinators are 
accustomed to working in the Incident Command System now being 
implemented as the National Incident Management System. In addition, 
the National Oil and Hazardous Substances Pollution Contingency Plan 
(the NCP) is the foundation upon which the capabilities and response 
structure for not just EPA's hazardous materials responders, but also 
for local, State, and other Federal responders involved in responding 
to these incidents. All of the efforts described above address multi-
media contamination scenarios, including water, and adopt an all-
hazards approach to ensure that preparedness of the water and other 
sectors extends to cover the full array of threats and to invoke the 
entire breadth of the Nation's emergency response capabilities.

    Question 47. Please provide a summary of the Agency's activities in 
both the drinking water security and wastewater security arenas. Please 
clearly describe the differences in the actions the Agency has taken in 
each area and the reason for those differences.
    Response. In 2003, we established the Water Security Division (WSD) 
within the Office of Water to emphasize and implement EPA's commitment 
to help protect the safety and security of the Nation's drinking water 
supply and wastewater systems.
    In the fall of 2002, ORD established the National Homeland Security 
Research Center (NHSRC). One of the teams in that center focuses on 
water and wastewater security. Another team is focused on risk 
assessment and works closely with the water security team. The primary 
components of the water security team's research efforts are: 
Characterization and detection; prevention and containment; 
decontamination and mitigation; residual disposal; risk assessment; 
technology verification; and technical assistance. The NHSRC works 
closely with the Office of Water's WSD in both developing research 
needs and in conducting research projects.
    In prior years, EPA's water security work focused on supporting 
assessment of vulnerabilities and creating a baseline of security-
related information. To this end, we supported the development of a 
number of tools that are referenced on our web site, and supported the 
delivery of training and technical assistance on vulnerability 
assessments and general security for both drinking water and wastewater 
utilities of all sizes in locations across the Nation. As a result of 
our efforts, drinking water systems collectively serving over 150 
million people have completed vulnerability assessments.
    Current and future efforts involve providing the tools and 
assistance that drinking water and wastewater systems need to address 
vulnerabilities by, for example, disseminating information on the most 
up-to-date security enhancements and threats, identifying best 
practices, and offering training on emergency response. In terms of 
disseminating information, EPA continues to provide financial support 
and work collaboratively with the Water Information Sharing and 
Analysis Center to provide a secure forum for sharing threat 
information with water utilities, and to serve as a liaison with the 
intelligence community. With respect to best security practices, EPA 
has formed a Federal advisory group to develop voluntary practices that 
water utilities could adopt to enhance their security. Emergency 
response training represents one our most critical activities. We have 
recently released several guidance documents for drinking water 
utilities on emergency response planning, and we will provide a series 
of workshops and exercises to improve the sector's preparedness. 
Similar guidance and training is under development for wastewater 
systems.
    EPA is also working to make advances in the development of 
contaminant monitoring and detection technologies for drinking water 
facilities. Emphasis on these efforts was accelerated with the release 
of HSPD-9, which directs EPA to develop a robust, comprehensive 
surveillance and monitoring program that would provide early warning in 
the event of a terrorist attack. HSPD-9 also directs EPA to develop a 
nationwide laboratory network that would support the routine monitoring 
and response requirements of such a surveillance program. EPA recently 
submitted a conceptual design for a national surveillance and 
laboratory program to DHS. Additional activities are outlined in our 
Water Security Research and Technical Support Action Plan.
    In developing the Water Security and Technical Support Action Plan, 
EPA developed a Threat Scenario Analysis to prioritize the possible 
threats related to water and wastewater. The prioritization of possible 
threats helps to focus research on the most pressing needs. The needs 
fall into categories of physical security (including physical and cyber 
infrastructure, contingency planning, and interdependencies) and 
contamination threats (biological, chemical, and radiological). 
Research efforts are under way to evaluate distribution system modeling 
and how that would relate to early warning systems; treatment efficacy 
studies on how to destroy specific contaminants if they have been 
introduced into a water system; and how to decontaminate the water and 
wastewater systems once they have been contaminated. Detection and 
analytical technologies to rapidly monitor for both specific 
contaminants and for classes of contaminants are being evaluated.
    EPA has also reached out to important partners beyond the sector 
that can provide additional support in the event of a threat or an 
attack.

                              ENFORCEMENT

    Question 48. OECA has moved to a ``results-oriented'' metric for 
measuring the effectiveness of EPA's enforcement program. Specifically, 
OECA is now measuring the effectiveness of its enforcement efforts 
based on the number of ``pounds of pollution reduced'' as a result of 
enforcement actions. Can you provide information elaborating on the 
methodology used to come up with this number? Can you also include 
information or estimates regarding the total amount of pollution 
reductions that we could expect if the regulated community were close 
to full compliance?
    Response. OECA began using ``results-oriented'' metrics for 
measuring the effectiveness of EPA's enforcement program in 1995 when 
it launched the Case Conclusion Data Sheet (CCDS) project. For the 
majority of the Clean Water Act and Clean Air Act cases, EPA staff is 
instructed to calculate pounds of pollution reduced as the difference 
between the non-compliant emission level and the permitted level. For 
RCRA, CERCLA and TSCA (asbestos, PCB, and lead-based paint) cases that 
involve the remediation, removal and proper disposal of contaminated 
material (e.g., soil), EPA staff are instructed to report the volume of 
contaminated material addressed by the action instead of pounds of 
pollution reduced.
    Environmental benefits (i.e., pounds of pollution reduced; and 
volume of material reduced, treated or eliminated) are recorded in the 
year that the case is settled; although it may take several years for 
the pollutant reductions to be achieved, or the cleanup completed. For 
cases where compliance will result in continuous reductions (e.g., 
installation of an end-of-pipe control) 1 year's worth of pollutant 
reduction benefits is reported. For remediation and cleanup activities, 
the entire amount of materials to be addressed is reported.
    To ensure consistency within and across programs, OECA has 
developed a statute-specific Case Conclusion Guidance Document that 
provides examples of how to calculate pollutant reductions for each of 
the major statutes. OECA has also trained its entire regional staff on 
the statute specific methodologies. As part of mid-year and end-of-year 
reporting processes, EPA staff certifies that they have followed the 
established methodologies in order to calculate the pollutant 
reductions.
    We cannot provide estimates of the total amount of pollutants 
reduced if all facilities were to come into compliance. This is because 
we do not have data about the current level of compliance for all 
regulated facilities (over 800,000), with all regulatory requirements, 
for all environmental statutes. Our CCDS estimates are specific to 
individual cases and facilities. As part of case development we measure 
the facility-specific level of violation, and can then estimate the 
amount of pollution reduced as a result of an anticipated return to 
compliance.

    Question 49. The October 2003 Inspector General's report on 
enforcement concluded that EPA did not have systems in place to 
evaluate whether the nation(s environmental laws were being adequately 
enforced. What steps are you taking to address this problem?
    Response. Over the last several years, EPA(s criminal enforcement 
program has been updating and expanding its Criminal Enforcement Docket 
(CRIMDOC). In addition, the program is currently developing additional 
external and internal (management) performance measures to track major 
aspects and impacts of its criminal cases. Examples of the proposed 
measures include the pollutant impact of criminal enforcement cases; 
the acceptance rate for criminal referrals to the Department of 
Justice; and the extent to which criminal enforcement prosecutions 
result in improved environmental management practices.
    The enhanced docket system, which will be called the Case Reporting 
System (CRS) is currently undergoing field testing and is expected to 
be on-line by the end of 2004. The CRS combines a case management and 
case reporting system in one data base. As this new information is 
entered into the system (e.g. attributes and results of investigations 
and cases), as well as its greater ease of use, CRS can be used by 
senior criminal enforcement managers to analyze trends in case 
selection and prosecution, and to develop a more systematic approach to 
case management. Potential enhancements include integrating criminal 
enforcement docket information with civil enforcement information; and 
adding capability within CRS to provide data necessary for improved 
program management (e.g. incorporating OECA national priorities, 
pollutant impact and pollutant reduction information, or referral 
declination data).

    Question 50. How has the number of enforcement actions taken under 
the Safe Drinking Water Act changed between 1995 and the present? 
Please provide an annual total of enforcement actions when answering 
this question.
    Response. The chart below provides final enforcement actions taken 
under SDWA from fiscal year 1995 to fiscal year 2003.

                                                                        FY1995--2003 SDWA ENFORCEMENT ACTION CONCLUSIONS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            Fiscal Year              1996*   1996*   1997*           1998                   1999                  2000                  2001                  2002                  2003
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Administrative Compliance Orders..     611     284     453  PWSS 280.............  PWSS 251.............  PWSS 2,067**........  PWSS 542............  PWSS 283............  PWSS 419
                                                            UIC 7................  UIC 18...............  UIC 18..............  UIC 35..............  UIC 36..............  UIC 33
Final Administrative Penalty            55      76      44  PWSS 14..............  PWSS 16..............  PWSS 21.............  PWSS 51.............  PWSS 32.............  PWSS 20
 Orders.                                                    UIC 29...............  UIC 24...............  UIC 27..............  UIC 16..............  UIC 34..............  UIC 14
Civil Judicial Conclusions........       4       7       9  PWSS 1...............  PWSS 5...............  PWSS 0..............  PWSS 3..............  PWSS 2..............  PWSS 0
                                                            UIC 1................  UIC 1................  UIC 2...............  UIC 1...............  UIC 0...............  UIC 3
    Total Civil Enforcement            670     367     506  332..................  315..................  2,135...............  648.................  387.................  489
     Actions.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Information is not available by program (PWSS, UIC) prior to 1998. PWSS = Public Water Supply System; UIC = Underground Injection Control.
* = The Consumer Confidence Rule accounted for a surge in Public Water Supply System administrative compliance orders.
Sources: fiscal year 1995 to fiscal year 2002 OECA Measures of Success Reports; fiscal year 2003 Press Release Materials.

                            HAZARDOUS WASTE

    Question 51. On January 28, 2004, Senator Boxer and I wrote you 
concerning EPA's proposal to deregulate over 3 billion pounds of toxic 
hazardous waste from government oversight. The vast majority of this 
waste is now recycled in permitted facilities. Under the EPA proposal, 
these wastes could be shipped around the Nation without any tracking 
and be recycled by those without adequate training, storage equipment 
or financial assurance. EPA's own data shows that over a third of the 
Superfund sites that EPA reviewed were former recycling sites. What 
safeguards does the proposal include for offsite recycling to prevent 
creating the next generation of abandoned toxic waste dumps? At a 
minimum, since the vast preponderance of the benefits of the rule stem 
from companies recycling their own waste onsite, why not limit the 
exemption to onsite recycling?
    I was very surprised to learn that EPA, in proposing a major 
revision of the hazardous waste program, acknowledged in the Agency's 
economic assessment that EPA has never evaluated the potential for the 
rule to result in releases of hazardous waste into the environment. Why 
didn't EPA prepare such an evaluation, and can you assure me that the 
rule will not be finalized until such an evaluation is prepared for 
public comment?
    Response. EPA responded to Senator Jeffords in an April 22, 2004 
letter addressing these questions. Please see attached copy of that 
correspondence.

                            ELECTRONIC COPY

The Honorable James M. Jeffords, Ranking Member,
Committee on Environment and Public Works,
U.S. Senate,
Washington, DC 20510.

Dear Senator Jeffords: I am pleased to respond to your letter of 
January 28, 2004, regarding the Environmental Protection Agency's (EPA) 
recent proposal that would make certain changes to the regulatory 
definition of ``solid waste'' under the Resource Conservation and 
Recovery Act (RCRA). I understand your interest in the proposal and 
appreciate the suggestions as to how the proposal could be improved.
    In the October 28, 2003, proposal the Agency stated that it 
represented an important restructuring of the Agency's current 
regulations that distinguish wastes from non-waste materials for RCRA 
regulatory purposes, and that ensure environmental protections over 
hazardous waste recycling. We also expressed our expectation that this 
proposed rule would encourage safe, beneficial recycling of hazardous 
secondary materials by industry. We further observed that this 
regulatory initiative is thus consistent with the goals of RCRA and the 
Agency's longstanding policy of encouraging the recovery and reuse of 
valuable resources as an alternative to land disposal.
    In your letter, you suggest how the rulemaking might be constructed 
differently and discuss issues the Agency should consider in its 
deliberations. We have provided an evaluation of your eight specific 
issues. (See enclosure.) We also have placed your letter in the public 
docket for this rulemaking and will consider your comments before 
issuing a final rule.
    Again, thank your for your letter. If you have further questions, 
please contact me or your staff may contact Holly Smithson, in EPA's 
Office of congressional and Intergovernmental Relations, at 202-564-
1609.
            Sincerely,
                                        Michael O. Leavitt.

                               ENCLOSURE

Response to Concerns on ABR Rule
    A) We did not intend by characterizing the proposal as a 
``response'' to recent court decisions to suggest these decisions 
contained a mandate (such as the D.C. Circuit's vacatur of the 
byproduct and sludge provisions of the 1998 mineral processing 
exclusion) to issue the proposal. Instead, the Agency was prompted by 
concerns articulated in Association of Battery Recyclers v. EPA, where 
the court repeated its view from the 1987 case of American Mining 
Congress v. EPA that materials that are generated and reclaimed in a 
continuous process within the same industry are neither disposed of nor 
abandoned and, therefore, are not solid wastes under RCRA. Prompted by 
this and other concerns articulated by the D.C. Circuit, the Agency 
developed a proposed exclusion that, together with legitimacy criteria, 
was designed to address those cases where discard most likely does not 
occur because materials are being truly reused or recycled in a 
continuous process within the generating industry.
    B) We also note that Congress is urging EPA to act on this issue. 
Specifically, the 2004 House VA-HUD-Independent Agencies appropriations 
report language offers the following:
    In 2000, the DC Circuit Court of Appeals held that EPA was 
improperly regulating recycling by using an overly broad definition of 
``discarded materials.'' The committee encourages EPA to promulgate a 
rule in fiscal year 2004 revising the regulation of recycling under 40 
C.F.R. Part 261, by limiting the definition of ``discarded material'' 
to materials that are ``disposed of, abandoned, or thrown away'' as 
defined by the court.
    C) We wish to address your suggestions that the proposed rule 
would, among other things, ``wreak havoc'' on RCRA's cradle-to-grave 
system for managing hazardous wastes, would result in many new toxic 
waste dump sites in the nation's communities, or would significantly 
undermine cost recovery at Superfund sites. It was our expectation that 
several aspects of the proposed rule would prevent the kinds of 
environmental problems that you suggest would result if the proposal 
were finalized. These include:

      The exclusion in the proposed rule would not affect the 
obligation to promptly respond to and remediate any releases of 
hazardous secondary materials that may occur. See, for example, 68 F.R. 
61581.
      Only materials recycled legitimately would be affected by 
the proposed exclusion. The proposal contains specific regulatory 
provisions for distinguishing legitimate recycling from sham recycling 
practices. These provisions reorganize and clarify the legitimacy 
criteria that to date have been articulated only in guidance and 
preamble statements. See 68 F.R. pages 61581-88.
      The proposal would not change the existing regulations 
applicable to facilities in the waste management or remediation 
services industries, nor would it change the existing regulations 
applicable to such forms of recycling as burning for energy recovery, 
recycling of inherently waste-like materials, or recycling of materials 
that are used in a manner constituting disposal. See, for example, 68 
F.R.page 61565. They would continue to be fully regulated under RCRA.
      Notification of EPA or the authorized State agency would 
be required for generators of secondary materials that have previously 
been regulated under RCRA Subtitle C, and that would become excluded 
under today's proposal. See 68 F.R. 61577.
      If a recycling facility were to generate hazardous 
residual wastes, they would be subject to RCRA regulatory requirements. 
See 68 F.R. 61566.

    We offer these same safeguards as a general response to the five 
specific issues in your letter, with additional discussion below:
    Issue 1: You request the Agency to provide it's evaluation of ``the 
risks of mismanagement posed by this broad exemption, including data on 
the environmental performance of hazardous waste recyclers before and 
after implementation of RCRA's regulatory regime. Specifically, EPA 
should consider the number of RCRA imminent and substantial 
endangerments filings related to recycling operations, the number of 
CERCLA listings related to hazardous waste recycling, and how many of 
these filings/listings related to activities at facilities that did not 
yet have a RCRA permit.''
    Response: The proposed exclusion from the definition of solid waste 
would apply only to hazardous secondary materials that are legitimately 
reused in a continuous process within the same industry. This is only a 
subset of the larger universe of recycling practices. Nevertheless, EPA 
will carefully consider the need for additional analyses as we proceed 
with this rulemaking. During the development of the proposal, the 
Agency attempted to assess whether the kind of intra-industry recycling 
affected by the proposal may have caused serious contamination 
problems. However, the information available to the Agency did not lend 
itself to an analysis specific to recycling in a continuous process in 
the same industry. We note however, that this effort revealed very few 
sites where the kinds of legitimate recycling activities that would be 
affected by our proposed rule may have contributed to contamination 
problems in the past.
    Issues 2, 3 & 5: You request evaluations of ``the potential 
financial liability that may be borne by the Federal Government and the 
States for remediation costs at these new, unregulated recycling 
facilities;'' ``the impact of this proposal on EPA's ability to obtain 
cost recovery under CERCLA section 107 from parties that sent hazardous 
secondary material to be recycled;'' and the identity of ``each 
proposed or final Superfund National Priorities List site where 
hazardous secondary materials that would be covered by the proposed 
rule are suspected to be located or actually have been discovered.''
    Response to Issues 2, 3 & 5: The proposal was designed to be a 
``restructuring of the RCRA regulations that distinguish wastes from 
non--waste materials for Subtitle C purposes, and that ensure 
environmental protections over hazardous waste recycling practices.'' 
68 F.R. 61560. It is our expectation that several aspects of the 
proposed rule would prevent the kinds of environmental problems that 
your letter suggests would result if the proposal were finalized. As 
noted in the preamble, the proposed rule also would not limit or 
otherwise affect EPA's ability to pursue potentially responsible 
persons under section 107 of CERCLA for releases or threatened releases 
of hazardous substances. 68 FR at 61590. However, as this rulemaking 
process continues, the Agency will carefully consider these issues that 
you and others raise.
    Issue 4: You request an evaluation of ``whether the 
Administration's proposal is consistent with and satisfies the criteria 
established for legitimate recycling by the Superfund Recycling Equity 
Act of 1999 (CERCLA section 127(c) and (f)).''
    Response: The proposed criteria for legitimate recycling and the 
criteria in section 127 of CERCLA apply to different kinds of materials 
and recycling. The proposed rule would not change the universe of 
recycling activities exempted from CERCLA liability pursuant to section 
127. Rather, it would only change the regulatory definition of solid 
waste for purposes of implementing the RCRA Subtitle C regulatory 
requirements. As noted in the preamble, the proposed rule also would 
not limit or otherwise affect EPA's ability to pursue potentially 
responsible persons under section 107 of CERCLA for releases or 
threatened releases of hazardous substances.

    Question 52. RCRA requires tracking of waste from cradle to grave 
through a paper manifest system. EPA has been working for years to 
standardize the manifest system, which would eventually enable the 
Agency to generate significant cost savings by replacing paper 
manifests with much more efficient electronic manifests. I understand 
that the Agency, after working with States, industry, and public 
interest groups, is ready to finalize the rule soon. Can you tell us 
the Agency's timeline to finalize the standardized manifest and what 
steps will be needed to move to an electronic system?
    Response. The hazardous waste management regulation revisions, 
including the manifest form and continuation sheet, are in the final 
stages of internal Agency review, and will be submitted shortly to the 
Office of Management and Budget (OMB) for their 90-day review. EPA's 
goal is to publish the final rule notice by late 2004. Due to the need 
for further examination of the electronic manifest (e-manifest) part of 
the proposed rule, EPA anticipates finalizing only the form 
standardization part of the rulemaking at this time.
    In May 2004, EPA held a public meeting to convene new outreach 
efforts and discuss alternative approaches to the e-manifest with our 
stakeholders. As a result of this meeting, EPA hopes to gather the 
information that will enable the Agency to move forward with the e-
manifest and complete this essential piece of the manifest revisions 
rulemaking.
    The Agency is in the process of identifying a means for making the 
e-manifest system self-sustaining. One method might be to involve the 
user community or IT vendors in sharing the system costs under a ``user 
fee'' approach or a ``share-in-savings'' contract authorized under the 
E-Government Act of 2002.

                             GENERAL BUDGET

    Question 53. As I said in my testimony, I am concerned that the 
President's proposed budget does not provide adequate resources to the 
Agency. Could you explain why the gap over the past 3 years between 
what the President has proposed for EPA's budget and what finally gets 
enacted keeps getting bigger?
    Response. The President's Budget reflects resources necessary to 
support EPA's priorities in a constrained budget environment. The 
levels enacted by Congress reflect different priorities that included 
increased funding for such areas as the Clean Water State Revolving 
Fund and congressional Earmarks. The increases in these and other 
activities account for the differences between the President's Budget 
and the appropriated levels.

    Question 54. Would it be a poor use of Federal resources to fund 
EPA at the level contained in the Senate budget resolution?
    Response. Federal resources would be used appropriately if the EPA 
were funded at the level requested in the fiscal year 2005 President's 
Budget ($7.8 billion). The fiscal year 2005 President's Budget funds 
the priorities necessary to protect human health and the environment.

                             RESEARCH CUTS

    Question 55. Administrator Leavitt, could you please explain the 
rationale behind the proposed cuts in the Office of Research and 
Development and specifically with cuts in the Science to Achieve 
Results Grant Program?
    Response. EPA's internal research program and its external Science 
to Achieve Results (STAR) program both have been and remain quality and 
effective contributors to the Agency mission of protecting human health 
and the environment. The goal of the STAR program is to promote 
excellence in environmental science by engaging the nation's best 
university scientists to conduct high quality research and provide 
innovative solutions to protect human health and the environment.
    EPA's fiscal year 2005 budget request provides more than $65 
million for the STAR program to continue to fulfill its important role 
by engaging the nation's best university scientists to conduct high 
quality research and provide innovative solutions to protect human 
health and the environment. The STAR program remains aligned to support 
Agency priority research efforts and leverage external resources. The 
fiscal year 2005 President's Budget request for STAR allows EPA to 
continue funding extramural research in important areas, including 
children's health, particulate matter, safe food, and drinking water, 
and will be funded consistent with previous years' investments in these 
areas.

                         ENVIRONMENTAL JUSTICE

    Question 56. Last week, the EPA's Inspector General found that the 
agency is not fully implementing the 1994 Executive Order on 
environmental justice and has not consistently incorporated 
environmental justice concerns into the Agency's operations. According 
to the IG report, EPA has not taken steps to identify minority and low-
income populations addressed in the Executive Order, nor has it 
developed criteria for determining when these communities are 
disproportionately affected by pollution. How can EPA ensure that 
minority and low-income communities are not harmed by high levels of 
pollution if the Agency has no means of identifying those communities?
    Response. The Agency believes that the intent of the Executive 
Order is to ensure that environmental actions or decisions do not 
result in disproportionately high and adverse human health or 
environmental effects by ensuring that the analysis of these effects 
includes the examination of secondary effects, cultural concerns, and 
cumulative impacts/effects. While such effects can occur in any 
community, the Agency recognizes that significantly greater adverse 
effects are often correlated with minority populations and/or low-
income populations. Thus, EPA's approach includes collecting and 
analyzing information on demographic factors and other relevant data, 
as well as the actual environmental and human health effects themselves 
as part of the scoping process.
    EPA's Office of Enforcement and Compliance Assurance is currently 
formulating its response to the Inspector General's report, ``EPA Needs 
to Consistently Implement the Intent of the Executive Order on 
Environmental Justice,'' (http://www.epa.gov/oigearth/
publications.htm). The Agency's written response will be submitted to 
the Inspector General's office on 3 June 2004; we would be happy to 
answer any additional questions you may have that are not addressed in 
the Agency's response.

                  PERSISTENT ORGANIC POLLUTANTS (POPS)

    Question 57. Based on the POPs implementing legislation amending 
FIFRA that your Agency sent to the Senate Agricultural Committee last 
month and based on briefings by members of your staff and others in the 
Administration to the Senate Agriculture Committee, I gather that you 
now think that the TSCA legislation approved in this committee last 
summer has constitutional problems. Is that correct? Can you explain 
precisely why this legislation is or might be unconstitutional?
    Response. Generally, an Administration determination as to whether 
a statute or bill is constitutional is in the purview and expertise of 
the Department of Justice, not the Environmental Protection Agency. As 
explained to your staff during development of S. 1486, with regard to 
the notice and comment procedures in POPs legislation, the Department 
of Justice has advised the Administration that it has concluded that a 
mandatory consultation requirement would raise constitutional concerns 
with respect to the President's authority to conduct negotiations with 
other nations.

                               RECYCLING

    Question 58. Creating incentives to maximize pollution prevention 
and recycling is critical for long-term sustainable environmental 
progress.
    Question 58a. Is EPA on track to meet its goal of increasing the 
nation(s recycling rate to 35 percent by 2005?
    Response. In 1989 EPA challenged the Nation to recycle 25 percent 
of municipal solid waste. By 1996 this goal was attained, and EPA 
issued a new challenge to recycle 35 percent by 2005. The most recent 
available data are for 2001 and indicate a national recycling rate of 
29.7 percent in 2001. While this represents substantial progress toward 
the aggressive 35 percent goal, current trends indicate that achieving 
that goal in 2005 will be difficult. EPA recognizes the need to work 
toward the goal with focused strategic targets, for particular waste 
sectors. These are under development and identified in the 2003-2008 
EPA Strategic Plan: ``Direction for the Future''. These newly 
identified targets and measures include recovery and energy 
conservation for auto tires; beneficial use and energy savings for coal 
combustion products; and reduction in releases to the environment for 
priority chemicals.

    Question 58b. Similarly, will the Nation achieve EPA(s goal of 
maintaining per capita municipal solid waste generation at the 1990 
level of 4.5 pounds per day?
    Response. Yes, we expect that this goal will be met. With the 
exception of the years 1999 and 2000, the U.S. per capita waste 
generation rate has been below the target level of 4.5 pounds per day; 
and EPA expects this to continue.

    Question 58c. What are EPA(s municipal solid waste generation goals 
and recycling goals for 2006-2010?
    Response. In September 2003, EPA set forth its most recent 
statement of goals in (2003-2008 EPA Strategic Plan: Direction for the 
Future.( For each year through 2008, the goal is to maintain the 
national average municipal solid waste generation rate at no more than 
4.5 pounds per person per day. For recycling, the goal is to increase 
the recycling rate to 35 percent by 2008. EPA is working with strategic 
partners to identify additional performance goals to supplement the 
existing, interim target of 35 percent recycling. These newly 
identified targets and measures are currently under development and 
will be formalized with the submission of the fiscal year 2006 Request 
to OMB. EPA will continuously monitor its progress toward the 2008 goal 
and develop goals for fiscal years 2009 and 2010 based on the program's 
performance. As part of the measurement development plan, the Agency 
has begun an analysis of the qualitative and quantitative benefits for 
six program elements. In addition, and where available, EPA will also 
evaluate the specific commodities that makeup that element. The six 
elements are: (1) Product Stewardship, (2) Reducing Priority Chemicals, 
(3) Greening the Government, (4) Beneficial Reuse, (5) Energy 
Conservation and (6) Environmentally Friendly Design. Each element 
promotes resource conservation and individual benefits that may result 
in: reducing exposures to toxic chemicals in products and wastes; 
displacing raw materials in the manufacture of products; energy savings 
from beneficial use of materials and use of wastes as fuels; and 
reduction in green house gas emissions from manufacturing improvements 
and raw material substitutions.
    EPA has developed partnerships with communities, industry and 
government to establish recycling and foster reuse. In the area of 
municipal solid waste EPA is working with partners to establish paper 
recycling as a routine business practice. The partnerships will also 
foster development of more uses for recycled paper and recycled paper 
products such as in building insulation, sub-flooring, roof systems, 
and siding. Also, for the wide array and rapidly growing volume of 
obsolete electronics products entering the waste stream, EPA is allied 
with manufacturers, communities, and governments to foster a new 
recycling infrastructure which will reclaim valuable materials and 
prevent release of heavy metals and other toxics into the environment. 
Additionally, EPA(s partnerships with tire and vehicle manufacturers, 
tire retailers, and government agencies at all levels are effectively 
reducing the disposal of the 250 million scrap tires produced annually 
in the United States; currently, markets now exist for 76 percent of 
scrap tires, up from 17 percent in 1990.

    Question 58d. The nation(s recycling rate of aluminum cans has 
fallen dramatically over the last decade, from 65 percent in 1992 to 48 
percent in 2002. Over 51 billion cans were wasted by not being recycled 
last year. What steps does EPA plan to take over the next year to 
reverse this trend?
    Response. EPA is aware that recycling of aluminum cans in the U.S. 
has decreased. In part, this is likely the result of uses of aluminum 
cans in places where recycling is not convenient (i.e., ``on-the-go'' 
uses). Consumers increasingly use these single-serve aluminum 
containers ``on-the-go,'' away from residences or other locations where 
recycling is convenient. EPA is considering ways to help ensure that 
these containers do not escape the recycling infrastructure. For 
example, later this month EPA will launch a new initiative targeting 
shopping centers, including aluminum cans generated at food courts. Co-
sponsored by the International Council of Shopping Centers, the 
initiative will provide outreach, education, and assistance for 
shopping center managers, owners, and tenants, as well as for the 
consuming public. Recognizing that 96 percent of the American public 
has visited a shopping center within the last month, exposure to the 
``recycling'' message at shopping centers will carry over to other 
facets of Americans' daily lives.

                               SUPERFUND

    Question 59. I appreciate that EPA has proposed to include the Pike 
Hill Copper Mine in Corinth, Vermont on Superfund's National Priorities 
List. I am concerned, however, that the Administration continues to 
under-fund the Superfund program, leaving toxic waste festering at 
sites across the Nation. Two examples in Vermont illustrate the 
problem. According to State officials, lack of funds has significantly 
delayed investigation of the acid mine drainage occurring at the Ely 
Copper Mine site in Vershire. Similarly, for the second year in a row, 
the Elizabeth Mine site in Strafford has been denied funding to start 
cleanup. At a result of this delay, the Agency was forced to spend 
millions of emergency funds to stabilize the mountain of contaminated 
mine tailings to avoid a catastrophic mudslide. When will the Agency be 
able to fully fund remediation at these sites?
    Response. EPA allocates its Superfund cleanup construction funding 
based on the risk posed by sites ready for construction. Sites that do 
not receive construction funding in any given year have not posed as 
great a risk as sites that did receive new construction start funding. 
EPA received an increase of approximately $24 million in the Agency's 
fiscal year 2004 appropriation. EPA used this increase to fund new 
projects; however, we could not meet all needs. The administration has 
not under funded the clean-up program. From 2001 to 2004, the average 
annual growth in Superfund plus Brownfields has been 4 percent per 
year. Furthermore, in comparison to 2004 enacted levels the President's 
2005 budget requests an increase of $166 million or almost a 12 percent 
for Superfund and Brownfields. Should Congress fully fund the 
President's fiscal year 2005 Superfund budget request, EPA will use the 
additional funding for cleanup construction projects.

    Question 60. The Bush Administration asserts that it is ``level 
funding'' Superfund compared to prior years. Yet the GAO recently 
reported that Superfund appropriations have fallen by 35 percent-or 
$633 million dollars-over the last decade in real dollars. At the same 
time, EPA has claimed that the complexity of the remaining Superfund 
sites has increased. Is this why the number of toxic dumps cleaned up 
has fallen by over 50 percent in the last few years?
    Response. In their report on Superfund appropriation and 
expenditure data (GAO-04-475R), GAO provides a breakdown of sources and 
amounts of appropriations to the Superfund program for fiscal year 1993 
through fiscal year 2004, using information included in the President's 
Budget Appendix. However, when portions of the Superfund appropriation 
directed to the Agency for Toxic Substances and Disease Registry 
(ATSDR), the National Institute of Environmental Health Sciences 
(NIEHS), and the Brownfields programs during this period are taken into 
account, the level of funding available for the Superfund program over 
this time period has remained more stable. From 2001 to 2004, the 
average annual growth in Superfund plus Brownfields has been 4 percent 
per year. Furthermore, in comparison to 2004 enacted levels the 
President's 2005 budget requests an increase of $166 million or almost 
a 12 percent for Superfund and Brownfields.
    As to the drop in construction completions, EPA contends that the 
remaining universe of NPL sites that are not construction complete are 
more complex than sites that have already achieved construction 
completion. Many factors affect site complexity, which in turn affects 
the duration and cost of cleanups. Examples of such factors include: 
contaminant characteristics, presence of multiple contaminants, area 
and volume of contamination, multi-media contamination, ecological 
issues, groundwater issues, remedial technology(ies) necessary, site 
location, proximity to populations, potentially responsible party (PRP) 
cooperation, presence of multiple PRPs, and interests of other 
stakeholders, including States, Tribes, communities, and natural 
resource trustees. For example, many of the larger Superfund sites have 
groundwater contamination, which requires more time for thorough 
analysis and consideration, given the uncertainty inherent in 
subsurface engineering activities and the rapidly evolving state of the 
science with respect to characterization and treatment. Therefore, the 
construction completion target for fiscal year 2003 and fiscal year 
2004 was reduced to 40 construction completions per year.

    Question 62. In contrast to the 2001 Brownfields Revitalization 
Act, CERCLA is a public health and environmental protection statute. I 
am increasingly concerned about reports that EPA is using CERCLA funds 
to promote private real estate deals as opposed to clean up activities. 
For example, I understand that EPA is developing a ``Revitalization 
Action Plan: Manual for Reuse/Redevelopment, Site Prioritization, and 
Outreach'' to be used across all OSWER programs that requires Regions 
to prepare marketing plans, evaluate real estate vacancy rates, and 
meet with private developers.

    Question 62a. What is the Agency's legal authority under CERCLA and 
RCRA to develop and implement this manual and other reuse and 
redevelopment activities in programs other than Brownfields?
    Response. EPA continues to use CERCLA funds in a manner consistent 
with the statutory mandate of protecting public health and the 
environment. Remedies have been constructed at more than 850 National 
Priority List (NPL) sites and we believe that all of them meet the 
CERCLA mandate.
    In the 24 years since CERCLA was enacted we have learned how to 
effectively and efficiently cleanup contaminated sites and ensure 
protectiveness. One of EPA's important lessons is that the selection 
and implementation of a remedy must take into account a site's 
reasonably anticipated future land use. Failure to account for the 
anticipated land use could lead to inadequate protection of future site 
users. When the remedy is not consistent with the anticipated land use, 
the site may remain abandoned and attract inappropriate activities that 
could damage the remedy or harm local residents. The well-planned, 
productive reuse of sites can help ensure the implementation and 
maintenance of the remedy and institutional controls. EPA issued the 
1995 Land Use Directive (OSWER Directive No. 9355.7-04) to make sure 
that anticipated future land use is considered in the Superfund 
assessment and cleanup process. The ``Revitalization Action Plan'' 
manual is an additional tool and guide for EPA regions to use to 
further our efforts to effectively take future land use into account 
when developing protective cleanup remedies.
    EPA is obligated by CERCLA and the National Contingency Plan to 
include the public and local governments in the cleanup planning 
process. We work closely with affected citizens, communities, and land 
owners to take into account their concerns about the effects of 
remediation on future land uses at Superfund sites. EPA is committed to 
selecting, designing, and implementing response actions that protect 
human health and the environment and, when possible, accommodate the 
productive reuse of the site. Once a remedy has been selected that will 
accommodate the reasonably anticipated future land uses, it is 
important that the remedy design and implementation not preclude those 
uses.

    Question 62b. How much money and staff (in FTE) has EPA allocated 
at both the Headquarters and Regional level for this effort in fiscal 
year 2004 and fiscal year 2005?
    Response. A total of $1.26 billion was allocated from the Superfund 
appropriation in the fiscal year 2004 Operating Plan, of which $879.363 
million was allocated to the Regions and $377,962 million was allocated 
to Headquarters. A total of 3,375.7 FTE are allocated, of which 2,494.4 
are allocated to the Regions and 881.3 FTE are allocated to 
Headquarters.
    In the fiscal year 2005 President's Budget, EPA is requesting a 
total of $1.381 billion, of which $1 billion is requested for the 
Regions and $381.388 million is requested for Headquarters. A total of 
3,352.7 FTE are requested, of which 2,471.4 are requested at the 
Regional level and 881.3 FTE are requested for Headquarters.

    Question 62c. Reasonably anticipated future land use is an 
important consideration during remedy selection. Are CERCLA funds being 
used for reuse/redevelopment activities after remedy selection at 
Superfund fund lead sites? If so, how much money and staff (in FTE) has 
EPA allocated to these post-remedy selection activities?
    Response. EPA does not use CERCLA cleanup resources for 
redevelopment activities at fund-lead sites, either before or after 
remedy selection. Consideration of reasonably anticipated future land 
use is not a redevelopment activity. It is a remedial activity that is 
an important and integral part of the remedial process, not only during 
remedy selection, but also at many other points in the Superfund 
decision pipeline. It is a vital consideration because it helps to 
insure the long-term integrity and protectiveness of the remedy under 
future use. In pursuing this long-term goal, EPA is committed to (1) 
working with communities to take into account the reasonably 
anticipated future land uses; and (2) selecting, designing, and 
implementing response actions that accommodate the future uses of 
Superfund sites without compromising the protection of human health and 
the environment. For example, once a remedy has been selected that will 
accommodate the reasonably anticipated future land uses, it is 
important that the remedy design and implementation not preclude those 
very uses. In addition, since land uses and other conditions around 
Superfund sites often change, it may be necessary to evaluate whether a 
remedy will continue to be protective for proposed new uses not 
originally anticipated. Finally, while Superfund does not have a direct 
interest in the redevelopment of sites, EPA has observed that 
beneficial reuse of a site helps to prevent inappropriate uses such as 
illegal dumping or other activities that could cause further 
contamination.
    These activities are a normal part of Superfund remedy selection 
and implementation. They are included in EPA's budget and FTE 
allocations for remedy selection and implementation.

    Question 63. I understand that EPA prepares a prioritizationsite 
list as part of the process of determining the annual allocation of 
Superfund funds. Please provide a copy of the prioritizationsite list 
for fiscal year 2003, fiscal year 2004 and fiscal year 2005. We are 
happy to work with you to address any confidentiality concerns that you 
may have.
    Response. We have attached the list of projects that were evaluated 
for construction funding in 2003 and 2004 respectively. These lists 
represent the universe of Superfund projects evaluated by the National 
Risk-based Priority Panel for potential construction funding in each of 
those fiscal years. The projects are grouped by Region and are not 
presented in sequential risk-ranked order. The Panel will be evaluating 
additional projects in the fall of 2004 for consideration for funding 
in fiscal year 2005. We will not have a list for 2005 until late 
November.

                                     FY 2002 POSTPONED RA STARTS AND NCTRAS
----------------------------------------------------------------------------------------------------------------
                Region                          Site Name                Action Type          Regional Request
----------------------------------------------------------------------------------------------------------------
1.....................................  Atlas Tack Phases I & II  New Start RA............        $13,100,000.00
1.....................................  Elizabeth Mine Phases I,  NTCRA...................        $16,000,000.00
                                         II & III.
2.....................................  Burnt Fly Bog...........  New Start RA............        $22,000,000.00
2.....................................  Chemical Insecticide....  New Start RA............        $30,000,000.00
2.....................................  Montgomery Township       New Start RA............         $2,000,000.00
                                         Housing Development.
2.....................................  Roebling Steel..........  New Start RA............        $12,000,000.00
4.....................................  Southern Solvents.......  New Start RA............         $4,000,000.00
5.....................................  Jennison Wright.........  New Start RA............        $12,500,000.00
5.....................................  Continental Steel.......  New Start RA............        $30,000,000.00
6.....................................  Hart Creosoting.........  NTCRA...................         $9,880,000.00
6.....................................  Jasper Creosoting.......  NTCRA...................         $6,240,000.00
6.....................................  Delatte Metals..........  New Start RA............        $14,000,000.00
6.....................................  Central Wood Preserving.  New Start RA............         $9,000,000.00
8.....................................  Vasquez Blvd/I-70.......  New Start RA............         $7,500,000.00
8.....................................  Eureka Mills............  New Start RA............        $15,000,000.00
8.....................................  Davenport & Flagstaff     New Start RA............         $9,500,000.00
                                         Smelters.
                                                                                                 $212,720,000.00
----------------------------------------------------------------------------------------------------------------


                           FY 2003 PRIORITY SUPERFUND CONSTRUCTION PROJECTS BY REGION
----------------------------------------------------------------------------------------------------------------
                   Region                                                  Site Name
----------------------------------------------------------------------------------------------------------------
1...........................................  Atlas Tack Corp.
1...........................................  New Hampshire Plating Co.
1...........................................  Pownal Tannery
1...........................................  Mohawk Tannery
2...........................................  Cosden Chemical
2...........................................  Genzale Plating
2...........................................  Imperial Oil
2...........................................  Rocky Hill Municipal Well
2...........................................  Roebling Steel (ongoing buildings)
2...........................................  Fried Industries
2...........................................  Federal Creosote (canal work)
3...........................................  Standard Chlorine
3...........................................  Kim-StanLandfill
3...........................................  Kim-StanLandfill
4...........................................  Solitron Microwave
4...........................................  TransCircuits
4...........................................  FCX Washington
4...........................................  Brewer Gold Mine
4...........................................  Marzone Inc.
4...........................................  Hollingsworth
4...........................................  Sapp Battery
5...........................................  Continental Steel (Federal lead)
5...........................................  Continental Steel (State lead)
5...........................................  Aircraft Components
6...........................................  North RR Ave.
6...........................................  Marion
6...........................................  Fruit Ave. Plume
6...........................................  Mallard Bay
6...........................................  Mt. Pine Pressure Treating
7...........................................  Newton County Mine Tailings
7...........................................  Second Street
8...........................................  Intermountain Waste Oil Refinery
8...........................................  Jacobs Smelter
10..........................................  Bunker Hill OU1RA5
10..........................................  Bunker Hill OU1RA7
10..........................................  Bunker Hill OU3RA4 (Coeur D'Alene Basin)
10..........................................  McCormick & Baxter OU14RA5
10..........................................  Northwest Pipe & Casing OU2RA2
10..........................................  Northwest Pipe & Casing OU1RA3
----------------------------------------------------------------------------------------------------------------
NOTE: Operable Units (OU) and Remedial Actions (RAs) identify specific site activities considered for funding
  evaluation.


                           FY 2004 PRIORITY SUPERFUND CONSTRUCTION PROJECTS BY REGION
----------------------------------------------------------------------------------------------------------------
                   REGION                                                PROJECT NAME
----------------------------------------------------------------------------------------------------------------
1...........................................  Atlas Tack Phase 1 (Bldg & Soils)
1...........................................  Atlas Tack Phase 2 (Wetlands)
1...........................................  Elizabeth Mine Phase I and II
1...........................................  Elizabeth Mine Phase III
1...........................................  Hatheway & Patterson
1...........................................  Mohawk Tannery
1...........................................  New Hampshire Plating
1...........................................  Ottati & Goss
1...........................................  Rose Hill
1...........................................  Troy Mills
2...........................................  Cosden Chemical Coatings
2...........................................  Federal Creosote (mall hot spots)
2...........................................  Genzale Plating Company
2...........................................  Imperial Oil Co.
2...........................................  Kaufman & Minteer
2...........................................  Mackenzie Chemical
2...........................................  Roebling Steel (Slag)
3...........................................  Crossley Farm
3...........................................  Franklin Slag Pile
3...........................................  Havertown PCP
3...........................................  Kim Stan Landfill
3...........................................  Standard Chlorine
3...........................................  Vienna PCE
4...........................................  Brunswick Wood
4...........................................  Marzone
4...........................................  Sapp Battery
4...........................................  Woolfolk OU3
4...........................................  Woolfolk OU4
4...........................................  Wrigley Charcol
5...........................................  Continental Steel CAMU
5...........................................  Continental Steel Main Plant
5...........................................  Continental Steel Markland Quarry
5...........................................  Jennison Wright
5...........................................  Ottawa Radiation (1,4,9,11,IL)
5...........................................  SE Rockford Groundwater
5...........................................  Tar Lake
6...........................................  Hart Creosoting
6...........................................  Jasper Cresoting
6...........................................  Marion Pressure Treating
6...........................................  Mountain Pine Pressure
6...........................................  North Railroad Avenue Plume
6...........................................  Rockwool Industries
7...........................................  Hastings Groundwater
7...........................................  Omaha Lead
7...........................................  Railroad Ave
7...........................................  Riverfront Site (Front Street)
8...........................................  California Gulch
8...........................................  Central City/Clear Creek (Big 5)
8...........................................  Central City/Clear Creek (Chase)
8...........................................  Central City/Clear Creek (Gilpin)
8...........................................  Davenport & Flagstaff
8...........................................  Eureka Mills
8...........................................  Jacobs Smelter
8...........................................  Summitville
8...........................................  Upper Ten Mile (Tier 1)
8...........................................  Upper Ten Mile (Tier 2)
9...........................................  Pemaco
10..........................................  Bunker Hill OU3 (non-residential)
10..........................................  Pacific Sound Resource
10..........................................  Washington Recreational Areas
----------------------------------------------------------------------------------------------------------------
Note: Operable units (OUs) and Remedial Actions (RAs) identify specific site activities considered for funding
  evaluation.


    Question 64. For fiscal years 2001-2004, how much funding was 
allocated for the Removal Advice of Allowance?
    Response. The following table identifies the resources that were 
allocated to the Removal Advice of Allowance (AOA) under the initial 
budgets for each year's appropriation, 2001-2004. These allocations do 
not account for internal budget shifts that occur during the fiscal 
year nor the reuse of resources deobligated from prior year 
appropriations.


                                              (Dollars in Millions)
----------------------------------------------------------------------------------------------------------------
                                                                                                      2001--2004
                         Fiscal Year                            2001      2002      2003      2004       Total
----------------------------------------------------------------------------------------------------------------
Removal AOA.................................................    $115.5    $115.5    $113.6    $114.8     $459.4
----------------------------------------------------------------------------------------------------------------


    Question 65. Can you confirm that the historic norm for this 
account was approximately $200 million?
    Response. The amount requested in the President's budget request 
from fiscal year 2001 to fiscal year 2004 for the Superfund Removal 
program has been approximately $200 million. This amount includes 
resources allocated to the Removal Advice of Allowance as well as 
additional resources associated with removal support, the Emergency 
Response Team, and staff and management.

    Question 66. Has EPA instituted a policy of limiting the funds in 
this account?
    Response. EPA strives to maintain the funding for the Removal 
Advice of Allowance at approximately $115 million (the fiscal year 2003 
reduction reflects a congressional rescission) and has not instituted a 
policy of limiting the funds in this account.

    Question 67. For fiscal year 2001-2004, how much funding was 
allocated for the Pipeline Operations Advice of Allowance?
    Response. The following table identifies the resources that were 
allocated to the Pipeline Operations Advice of Allowance (AOA) under 
the initial budgets for each year's appropriation, 2001-2004. These 
allocations do not account for internal budget shifts that occur during 
the fiscal year, nor the reuse of resources deobligated from prior year 
appropriations.


                          (Dollars in Millions)
------------------------------------------------------------------------
           Fiscal Year              2001      2002      2003      2004
------------------------------------------------------------------------
Pipeline AOA....................    $204.8    $200.4    $187.0    $155.0
------------------------------------------------------------------------


    Question 68. Has EPA instituted a policy of limiting the funds in 
this account?
    Response. EPA has not specifically instituted a policy of limiting 
the funds in this activity, although reductions in the Pipeline Advice 
of Allowance (AOA) have taken place, which reflect, in part, 
congressional rescissions, and the increased demand for remedial action 
funding. In fiscal year 2003, the program decided to shift a portion of 
the initial Pipeline allocation (approximately $10 million) to the 
Remedial Action AOA. EPA continued this practice in fiscal year 2004. 
EPA will consider the impacts of prior year Pipeline AOA reallocations 
before deciding whether to shift Pipeline AOA resources to the Remedial 
Action AOA in fiscal year 2005.
    In fiscal year 2004, the Pipeline AOA was permanently reduced by 
$32 million pursuant to an internal agency reorganization. The 
reduction represents a shift of removal support resources, historically 
provided through the Pipeline AOA, to a new AOA (Removal Support) of 
the removal program, which is now administered by a separate office 
within the EPA Office of Solid Waste and Emergency Response.

    Question 69. Has the redistribution of funds from the Pipeline 
Operations to Remedial Actions in fiscal year 2003 been repeated in 
fiscal year 2004, and is it anticipated for fiscal year 2005?
    Response. In fiscal year 2003, the program decided to shift a 
portion of the initial Pipeline allocation (approximately $10 million) 
to the Remedial Action AOA to address the increased demand for remedial 
action funding. EPA continued this practice in fiscal year 2004. EPA 
will consider the impacts of prior year Pipeline AOA reallocations 
before deciding whether to shift Pipeline AOA resources to the Remedial 
Action AOA in fiscal year 2005.
    In fiscal year 2004, the Pipeline AOA was permanently reduced by 
$32 million pursuant to an internal agency reorganization. The 
reduction represents a shift of removal support resources, historically 
provided through the Pipeline AOA, to a new AOA (Removal Support) of 
the removal program, which is now administered by a separate EPA 
office.

    Question 70. For fiscal year 2001-2004, how much funding was 
allocated to the Remedial Action AOA? How much of these funds are 
available for new starts?
    Response. The following table identifies the resources that were 
allocated to the Remedial Action Advice of Allowance (AOA) under the 
initial budgets for each year's appropriation, 2001-2004. These 
allocations do not account for internal budget shifts that occur during 
the fiscal year, nor the reuse of resources deobligated from prior year 
appropriations, which starting in fiscal year 2002 (the first year we 
can distinguish these costs) have contributed significantly to the 
funding of new start projects. The increase in the fiscal year 2004 
allocation represents the increase to the Response function of the 
fiscal year 2004 Superfund appropriation (minus the congressional 
rescission). The allocation of resources to new starts in fiscal year 
2004 is a planned allocation based on data currently available 
regarding resource use projections for ongoing projects and is subject 
to change. As in previous years, we expect in fiscal year 2004 to 
increase funding for remedial action starts as a result of 
deobligations from prior year expenditures.


                          (Dollars in Millions)
------------------------------------------------------------------------
           Fiscal Year              2001      2002      2003      2004
------------------------------------------------------------------------
Remedial Action AOA.............    $226.8    $220.9    $227.8    $251.2
Funds Available for New Starts..     $52.5     $25.9      $7.0     $36.2
------------------------------------------------------------------------

                             LAKE CHAMPLAIN

    Question 71. In 2002 the President signed into law the Great Lakes 
and Lake Champlain Act. In this year's budget, the President asked for 
a funding increase to implement this Act. This is the second year in a 
row that the President has managed to ask for funds to implement the 
Great Lakes section of this Act but not managed to ask for funds to 
support Lake Champlain. Does the Administration believe that protecting 
Lake Champlain is a priority? If not, why not? If so, can you explain 
why no additional funds have ever been requested since the Great Lakes 
and Lake Champlain Act became law?
    Response. The administration does believe that protection and 
restoration of Lake Champlain and its watershed is a priority. This is 
demonstrated by our continued financial and staff support of the 
program. In fiscal year 2005, the Agency requested $954.8 thousand and 
preserved staffing levels for the program. We intend to continue our 
support for the Lake Champlain Basin Program by working with all the 
partners to implement the revised Lake Champlain Management Plan. In 
addition, other elements of the EPA's water program, such as the 
nonpoint source program and water quality and criteria will help 
improve water quality in Lake Champlain. Some notable examples of 
upcoming work our support will enable include:

      Blue-green algae research
      Non-chemical sea lamprey control methods investigation
      Continuing limnological monitoring
      Ongoing phosphorus reduction efforts

                          WATER INFRASTRUCTURE

    Question 72. Does the EPA intend to focus on management reforms, 
such as the use of asset management, as a means to achieving cost 
savings that will reduce the spending gap? If so, how do you propose to 
get utilities to adopt these management reforms?
    Response. EPA has announced an Agency initiative on better 
management, water efficiency, full cost pricing and watershed 
approaches to offer an important policy response to the issues 
identified in The Clean Water and Drinking Water Infrastructure Gap 
Analysis. EPA will encourage adoption of Sustainable Management Systems 
as a major feature of the better management initiative. Sustainable 
Management Systems include asset management, environmental management 
systems and other ``brand name'' methods to help water and sewer 
systems to become truly sustainable services. Sustainable Management 
Systems focus on achieving service goals while minimizing the total 
life cycle costs of wastewater treatment construction, operations and 
maintenance and repair.
    EPA believes the best way to implement these approaches is through 
collaborative, voluntary undertakings with the owners and operators of 
these systems. In response to growing utility interest EPA has just 
completed a major project in cooperation with the Water Environment 
Federation (WEF) and the Association of Metropolitan Sewerage Agencies 
(AMSA) to produce a guide for water and wastewater utilities that 
describes the experiences of several utilities which have, or are in 
the process of developing, Sustainable Management Systems. We have 
sponsored collaborative projects including handbooks and training which 
participating utilities have received very well. Service providers have 
shown great interest and support for EPA's initiatives to promote 
voluntary efforts, and a significant number of leading utilities have 
voluntarily adopted these approaches. The 2005 Budget also includes 
$2.5 million for the Sustainable Infrastructure Initiative, of which 
$1.5 million is for sustainable management system demonstration grants.

    Question 73. What is your estimate of the cost savings that will 
result from a single utility and from an industry-wide adoption of 
management reforms such as asset management and when will they be 
realized?
    Response. EPA has found significant anecdotal evidence and some 
quantitative data that suggest a savings potential over the next 
several decades of as much as 20 percent of the cost of services can be 
realized by the adoption of Sustainable Management Systems such as 
asset management or environmental management systems. These management 
techniques focus on achieving service goals that minimize the total 
life cycle costs of construction, operations and maintenance, and 
repair.
    Since most U.S. utilities are in early phases of implementation, 
there has not been extensive validation of these estimates. However, 
examples include:

      Orange County Sanitation District in Orange County, 
California estimated savings of $350 million over a twenty-five year 
period.
      The Seattle Public Utilities Commission claimed a 
reduction of 7 percent in its 2004 operating budget, based on the 
adoption of a series of new Sustainable Management Systems-inspired 
practices.

    Question 74. By how much will these cost savings reduce the 
backlog?
    Response. The Clean Water and Drinking Water Infrastructure Gap 
Analysis estimates that approximately $381 billion in capital outlays 
will be required for wastewater infrastructure between 2000-2019. Of 
that amount, $259 billion will result from the current investment 
level, leaving a $122 billion gap under the conservative assumption of 
no growth in local revenues. Growth in local revenues (user charges) of 
3 percent per year in real terms provides approximately $101 billion in 
additional spending capacity, leaving a $21 billion infrastructure gap.
    The President's proposal will significantly increase the Clean 
Water State Revolving Fund (CWSRF) program's capability to fund 
projects in both the near term and in the long-run. It is not possible 
to fully quantify the economic benefits, but EPA believes that the 
combination of the extended commitment of the CWSRF, combined with 
better management, water efficiency, full cost pricing and watershed 
approaches, will substantially eliminate ``The Gap''.

                       NON-POINT SOURCE POLLUTION

    Question 75. In the Administration's fiscal year 2005 budget, the 
Clean Water Act Section 319, non-point source program is reduced by 
almost $30 million from the fiscal year 2004 enacted level of $238 
million. In the 2000 National Water Quality Inventory Report, the 
Agency identifies non-point source pollution as the leading source of 
water quality impairment. Can you explain how a reduction of $30 
million in the non-point source program, which you have identified as 
the No. 1 source of impairment, will lead to an improvement in water 
quality nationwide?
    Response. The new 2002 Farm Bill significantly increased resources 
for USDA conservation programs. The Administration supports focusing 
the Section 319 program to reduce overlap with USDA.
Background
    USDA's Environmental Quality Incentives Program is receiving much 
higher levels of funding under the 2002 Farm Bill than under the 
previous Farm Bills. A significant portion of this funding is being 
used to implement best management practices (BMP(s) to address nonpoint 
source pollution.
    EPA is focusing the Section 319 nonpoint source program to reduce 
program overlap with USDA and to focus funds on those critical needs 
that Farm Bill funds do not adequately address. Whereas Farm Bill funds 
can be used to implement agricultural BMP(s, they are generally 
unavailable for the critical steps of performing monitoring that helps 
determine the sources of NPS pollution; developing and implementing 
watershed plans that focus on those sources; and providing watershed 
coordinators who can work with local producers. Section 319 funds will 
focus on those areas, as well as continue to be the primary funding 
authority to address all other (non-agricultural) types of nonpoint 
source pollution (e.g., forestry, urban runoff, hydrological 
modification, and habitat modification).
    To promote improved performance by State NPS programs, States will 
be developing watershed-based plans for impaired waters that will 
identify the management measures that will enable restoration of those 
waters. A combination of Section 319 dollars, Farm Bill dollars, and 
other Federal, State, and local funds will enable the most efficient 
implementation of these plans.
    States will be implementing an upgraded grants tracking system that 
will enable them to publicly account for the amount of pollutant 
reductions obtained and the number of waters that are restored as the 
result of their implementation of their 319-funded watershed-based 
plans.

                   WASHINGTON, DC, LEAD CONTAMINATION

    Question 76. What actions does the Agency plan to take to ensure 
that similar situations do not exist in other areas of the country? For 
example, is the Agency reviewing the public education requirements of 
the Lead and Copper Rule to determine if they are adequate? If so, 
please provide the status of this review, including an expected end 
date.
    Response. EPA's drinking water program is working with regional and 
enforcement staff to conduct a thorough review of implementation of the 
Lead and Copper Rule. Our initial focus is reviewing information on 
90th percentile levels, to determine the extent to which high lead 
levels are observed elsewhere in the Nation. We will then review 
efforts undertaken by systems that exhibited high lead levels in the 
first rounds of sampling conducted in 1991 and 1992 to assess the 
effectiveness of the rule in reducing lead levels. Finally, we will 
carry out an audit of selected systems and State programs to determine 
if the rule is currently being effectively implemented, particularly 
with respect to public education and monitoring requirements. 
Activities will be carried out during 2004 and will likely continue 
into 2005.
    The review of compliance and implementation, expert workshops and 
other efforts underway will help the Agency to determine whether it is 
appropriate to develop additional training or guidance or make changes 
as part of our review of existing regulations.

    Question 77. Has the Agency reviewed lead testing results in other 
areas of the country to identify any situations similar to the 
Washington, DC. situation? If so, which areas have been reviewed and 
what are the results of those reviews?
    Response. EPA is currently undertaking an effort to identify 
whether the high lead levels observed in Washington, DC. are 
representative of other areas in the country. The Agency is reviewing 
information on 90th percentile levels that States are required to 
submit to the Safe Drinking Water Information System (SDWIS). EPA's 
initial analysis was hindered by the fact that data in SDWIS was 
incomplete. Although States could report since 2000, they were only 
required to report 90th percentile lead levels for all systems serving 
more than 3,300 staring in 2002. As of early March 2004, EPA only had 
data for 22 percent of required systems and no data for 23 States and 
Puerto Rico.
    On March 25, 2004, the Office of Water sent a letter to Regional 
Administrators to ask that they work with State programs to ensure that 
EPA has complete information on lead levels. States were asked to 
report data for systems serving more than 50,000 people by April 15, 
2004. As of April 28, 2004, SDWIS held data for 85 percent of the 838 
systems in the country within this size class. A report summarizing the 
findings was posted on the EPA website at http://www.epa.gov/safewater/
lcrmr/implement.html. EPA found that 22 systems had exceeded the action 
level of 15 ppb for one or more monitoring periods since 2000. Only 
eight systems exceeded the action level in 2003. None of the other 
systems that have exceeded the action level appear to have a problem as 
serious as that observed in the District of Columbia.
    As EPA obtains additional information from States on other size 
categories, the Agency will be able to better determine and report on 
the number of systems that have exceeded the action level. However, 
discussions with States and associations representing utilities 
indicate that they have not observed the high levels or the rapid 
increase of lead levels in drinking water observed in D.C.

    Question 78. Are there other locations where similar problems have 
emerged?
    Response. As noted in the response to question #83, EPA has 
reviewed data in its Safe Drinking Water Information System (SDWIS) for 
85 percent of the systems in the country that serve more than 50,000. 
EPA found that 22 systems had exceeded the action level of 15 ppb for 
one or more monitoring periods since 2000. Only eight systems exceeded 
the action level in 2003*. None of the other systems that have exceeded 
the action level appear to have a problem as serious as that observed 
in the District of Columbia.
    EPA is still working to identify the specific factors underlying 
each system's exceedance to identify the corrosion control treatment 
that is in place and to determine whether treatment changes played a 
role in increases. However, discussions with States and associations 
representing utilities indicate that they have not generally observed 
the rapid increase of lead levels in drinking water that was observed 
in D.C.
      Pompano Beach, FL; Massachusetts Water Resources 
Authority, MA; Hendersonville, NC; Syracuse, NY; Yonkers, NY; Salem, 
OR; El Yunque, PR; and Washington, DC.

    Question 79. Can you describe the major changes that occurred in 
the Agency's drinking water program for lead contamination as a result 
of the 1991 Lead and Copper Rule?
    Response. Unlike most contaminants, lead is not generally 
introduced to drinking water supplies from source water. The primary 
sources of lead in drinking water are from lead pipes or lead-based 
solder used to connect pipes in plumbing systems, and brass plumbing 
fixtures that contain lead. An interim standard for lead in drinking 
water of 50 micrograms per liter, or parts per billion (ppb), had been 
established in 1975, and did not require sampling of customer taps. 
Setting a standard for water leaving the treatment plant fails to 
capture the extent of lead leaching in the distribution system and 
household plumbing. In 1988, the Agency proposed revisions to the 
standard and issued a final standard in 1991 that significantly changed 
the regulatory framework.
    The rule requires systems to optimize corrosion control to prevent 
lead and copper from leaching into drinking water. Large systems 
serving more than 50,000 people were required to conduct studies of 
corrosion control and to install the State-approved optimal corrosion 
control treatment by January 1, 1997. Small and medium sized systems 
are required to optimize corrosion control when monitoring at the 
consumer taps shows action is necessary.
    To assure corrosion control treatment technique requirements are 
effective in protecting public health, the rule also established an 
Action Level (AL) of 15 ppb for lead in drinking water. Systems are 
required to monitor a specific number of customer taps, according to 
the size of the system. If lead concentrations exceed 15 ppb in more 
than 10 percent of the taps sampled, the system must undertake a number 
of additional actions to control corrosion and to inform the public 
about steps they should take to protect their health. If a water 
system, after installing and optimizing corrosion control treatment, 
continues to fail to meet the lead action level, it must begin 
replacing the lead service lines under its ownership.

    Question 80. The definition of ``lead-free'' fixtures currently 
allows those fixtures to contain 8 percent lead. Are there fixtures 
available that are truly ``lead free''?
    Response. The fixtures that meet the ``lead free'' requirements of 
the Safe Drinking Water Act may contain a maximum of 8 percent lead. 
The amount of lead contained in a plumbing product is usually governed 
by its manufacturing process and natural impurities in the alloy. 
Fixtures containing levels of lead less than 8 percent are manufactured 
and are available at a slightly higher cost to consumers.
    An industry consortium which includes which includes Asarco, the 
Copper Development Association, the American Foundrymen's Society, the 
Brass and Bronze Ingot Makers and the Canadian Government's Materials 
Technology Laboratory worked to develop a lead-free metal alloy that 
could be used in plumbing materials. Envirobrass'' complies with 
California law (Proposition 65) and fully meets the National Sanitation 
Foundation Standard 61. Several manufacturers are using the material in 
meters, valves and fittings, and faucets. http://www.envirobrass.com/
index.html
    The Federal Metal Company has also developed a lead-free alloy that 
is being used in manufacturing. Federalloy passed NSF/ANSI Standard 61, 
Sections 8 and 9 for a wide variety of castings as experienced by end 
users. http://www.Federalmetal.com/fedalloy

    Question. 81. Has the Agency taken any steps to share this 
information with consumers? If so, please describe them. If not, please 
explain how the Agency anticipates that consumers will obtain 
information about lead-free fixtures.
    Response. The Agency has made an effort to inform consumers about 
the ``lead free'' requirements of the SDWA. The information is included 
in Agency outreach material, is on the Agency website, and is provided 
through the SDWA Hotline. However, the Agency does not provide 
information about the lead content of specific brands of fixtures. NSF 
International has information on their website (http://www.nsf.org/
Certified/DWTU) about products that meet the NSF standard. NSF 
recommends that consumers who are interested in finding out how much 
lead is contained in a product contact the manufacturer or the 
importer/distributor and ask for a certificate of lead content.

    Question 82. Has EPA initiated any enforcement actions against WASA 
with regard to the current lead contamination issue?
    Response. On March 31, 2004, EPA issued an information request 
letter under Section 1445 of the Safe Drinking Water Act (SDWA) to WASA 
to obtain additional information regarding the lead contamination 
issue. EPA is currently reviewing the thousands of pages of WASA's 
response to this information request; based on an evaluation of this 
information the Agency will take appropriate action as necessary. On 
the same date, EPA also issued WASA a ``show-cause'' letter which 
identified a number of potential violations of SDWA regulations and 
asked WASA to provide an explanation for its actions leading to the 
potential violations.
    In recent months, EPA has conducted numerous meetings and telephone 
calls with WASA and the District government. EPA has also provided 
technical expertise and compliance assistance to address the lead 
contamination problem.
    EPA Region III is working closely with the District of Columbia 
government to ensure that WASA takes appropriate actions to protect 
public health immediately, and to ensure that WASA's future actions are 
effective and meet both the intent and the letter of the Safe Drinking 
Water Act. If, at any time, EPA feels that the current intervention 
efforts are not working, Region III will issue an administrative action 
or other appropriate action to enforce public health protections 
provided by our laws and regulations.

    Question 83. How many enforcement actions has the EPA taken under 
the provisions of the lead and copper rule adopted in 1991? Please 
provide a summary of each of those enforcement actions, including the 
cause of the action, the public water system involved, and the 
resolution.
    Response. EPA has issued 559 Federal enforcement actions from 1995 
through 2003, in response to violations of the provisions of the lead 
and copper rule adopted in 1991. The breakouts by year are as follows:

                        Federal Enforcement Actions taken under the Lead and Copper Rules
----------------------------------------------------------------------------------------------------------------
           Fiscal Year             1995    1996    1997    1998    1999    2000    2001    2002    2003    Total
----------------------------------------------------------------------------------------------------------------
No. of Actions..................     130     130     165      61      25      14      10      10      14     559
----------------------------------------------------------------------------------------------------------------
Source: Safe Drinking Water Information System (SDWIS)

    The detailed summary of these enforcement actions, including the 
PWS ID number; the system name; a violation description; type of 
enforcement; and enforcement date is contained in attachment A.



    Question 84. Please provide a summary of all of the enforcement 
actions taken under all provisions of the Safe Drinking Water Act since 
1995.
    Response. The table below summarizes final enforcement actions 
taken under all provisions of the Safe Drinking Water Act from fiscal 
year 1995 to fiscal year 2003. Civil enforcement actions include 
administrative compliance orders, final administrative penalty orders, 
and civil judicial settlements. For each year, the corresponding civil 
penalties assessed, estimated value of injunctive relief and value of 
Supplemental Environmental Projects (SEPs) are shown in millions of 
dollars.

                            SAFE DRINKING WATER ACT ENFORCEMENT ACTIONS, FY 1995-2003
                                              (Dollars in millions)
----------------------------------------------------------------------------------------------------------------
          Fiscal Year            FY95     FY96     FY97    FY98     FY99      FY00      FY01      FY02     FY03
----------------------------------------------------------------------------------------------------------------
Civil Enforcement Actions*....     670       367     506     332       315   2,135**       648       387     489
Civil Penalties...............    $0.2      $2.9    $0.4    $0.6      $2.1      $0.9      $1.1      $0.3    $0.3
Total Estimated Value of          $0.5    $117.7   $38.3   $38.2    $811.5    $357.7      $5.7    $292.1    $7.7
 Injunctive Relief............
    Total Value of SEPs.......   $0.02     $0.07    $0.2   $0.04      $5.8      $0.3      $2.3      $0.4    $0 0
----------------------------------------------------------------------------------------------------------------
*Includes PWSS and UIC SDWA programs. PWSS = Public Water Supply System; UIC = Underground Injection Control.
** The Consumer Confidence Rule accounted for a surge in Public Water Supply System administrative compliance
  orders.
Sources: 1995-2002: OECA Measures of Success reports; 2003: press release materials.


    Question 85. What are the Agency's protocols/guidelines for testing 
drinking water for lead at schools, day care centers, and other 
entities that provide drinking water to children?
    Response. In 1994, EPA developed guidance called: ``Lead in 
Drinking Water in Schools and Non-Residential Buildings'' to 
demonstrate how drinking water in schools and other buildings can be 
tested for lead and how contamination problems can be corrected if 
found.
    The guidance, available at www.epa.gov/safewater/consumer/
leadinschools.html, contains a protocol for collecting and analyzing 
drinking water samples. The protocol is designed to assist the school 
in determining whether or not there is lead contamination and if that 
contamination is localized or affects the entire facility.
    Briefly:

      Aerators are removed from outlets as appropriate;
      The facility is flushed and then left idle overnight or 
8-10 hours;
      First draw samples are collected in 250 ml bottles; and
      Follow-up samples are collected after each faucet is run 
for 30 seconds.

    Additional resources that were developed subsequent to the 1994 
guidance publication are available through EPA's web site at 
www.epa.gov/safewater/lead/schoolanddccs.htm.

    Question 86. Does the WASA procedure of flushing drinking water 
fountains for 10 minutes prior to testing comply with these guidelines? 
If not, how are the test results likely to be altered using this 
approach?
    Response. EPA shared its school monitoring protocol and associated 
guidance documents with WASA on February 12, 2004 through a telephone 
conversation and an electronic mail message. Prior to this date, the 
protocol and associated guidance was also available on the Internet. 
Trained by WASA, the District of Columbia Public Schools carried out 
testing in 154 schools and school facilities between February 14 and 
February 19, 2004. The procedure used for the testing did not follow 
recommended EPA protocols. Allowing fixtures to flush for 10 minutes 
prior to collection reduces the likelihood that the sample will contain 
elevated lead levels, and significantly reduces the ability to 
associate a result with the particular outlet from which the sample was 
taken. WASA released the results of its testing on February 24, 2004.
    Due to concerns that the sampling method used by WASA was flawed, 
EPA sent a follow-up letter to WASA on February 26, 2004 to reiterate 
its offer to provide technical assistance to the utility in carrying 
our testing in schools. WASA subsequently worked with EPA, the D.C. 
Public Schools, and D.C. Department of Health to carry out another 
round of school testing using EPA recommended protocols. The testing 
focused on outlets in public schools that served the target population 
of children under the age of six. D.C. Public School employees who were 
trained by WASA conducted the sample collection. EPA provided input to 
the training materials used by WASA. This sampling was carried out 
starting March 29, 2004 and the results were released on April 30, 
2004.

                      SECTION 1462 IMPLEMENTATION

    Question 87. Please provided a review of the implementation of 
section 1462 of the Safe Drinking Water Act?
    Response. Section 1462 of the Safe Drinking Water Act (SDWA) was 
added to the SDWA in 1988 as part of the Lead Contamination Control Act 
(LCCA). The section required that the Consumer Product Safety 
Commission issue an order requiring the manufacturers and importers of 
drinking water coolers identified by EPA as having a lead-lined tank 
cooler to repair, replace, or recall such coolers. EPA carried out the 
requirements outlined under section 1462, 1463, and 1464.
    EPA established a laboratory protocol to determine the lead content 
in the interior lining of water cooler tanks. In February 1989, EPA 
distributed guidance and a testing protocol to States to assist schools 
in testing for and remedying lead contamination. The testing protocol 
was used in thousands of school districts across the country.
    On April 10, 1989, EPA published a proposed list of lead-free water 
coolers. This proposed list served to initiate testing of water coolers 
in schools throughout the country. On January 18, 1990, EPA finalized 
the proposed list and published a new list of coolers classified lead-
free under the LCCA. Halsey Taylor was identified as the only 
manufacturer of coolers with lead-lined tanks. As a result of EPA's 
work, a consent order agreement between the Consumer Product Safety 
Commission and the Scotsman Group was published on June 1, 1990 which 
stipulated a recall of Halsey Taylor water coolers that test above 
EPA's guidance level for individual outlets in schools.

                                  LEAD

    Question 88. What are the common sources of lead in drinking water?
    Response. Although lead may be present in source water, the more 
common source of lead is its release as a byproduct of corrosion. The 
potential sources of lead corrosion by-products found in drinking water 
can include: Water service mains (rarely), lead goosenecks or pigtails, 
lead service lines and interior household pipes, lead solders and 
fluxes used to connect copper pipes, alloys containing lead, and some 
faucets made of brass or bronze.
    The amount of lead in drinking water depends heavily on the 
corrosiveness of the water. All water is corrosive to metal plumbing 
materials to some degree, even water termed non-corrosive or water 
treated to make it less corrosive. The corrosiveness of water to lead 
is influenced by water quality parameters such as pH, total alkalinity, 
dissolved inorganic carbonate, calcium, and hardness. Galvanic 
corrosion of lead into water also occurs with lead-soldered copper 
pipes due to differences in the electrochemical potential of the two 
metals. Grounding of household electrical systems to plumbing may also 
exacerbate galvanic corrosion. Over time, lead-containing plumbing 
materials will usually develop a scale that minimizes further corrosion 
of the pipe.

    Question 89. Can source water contamination be a source of lead in 
some drinking water systems? If so, what are the common causes of 
source water contamination?
    Response. Lead may be released or re-released into the environment 
during its mining, ore processing, smelting, refining use, recycling, 
or disposal. Lead is rarely found in source water, but lead mining and 
smelting operations may be sources of contamination.
    An example of where mining has affected drinking water quality can 
be found at the Newton County Mine Tailings site located in southwest 
Missouri. This site, located within the Tri-State Mining District, was 
added to the National Priorities List in September 2003 because of the 
presence of lead and cadmium contamination in residential drinking 
water wells significantly above the current health based drinking water 
limits. Information presented in the site narrative for the NPL listing 
(http://www.epa.gov/superfund/sites/npl/nar1677.htm) indicated that 
based on current information, the contaminated groundwater encompasses 
approximately 160 square miles. In 1999, EPA provided bottled water to 
county residents as an immediate, temporary response to the known 
health threat associated with the consumption of lead and cadmium 
contaminated water.

    Question 90. Can you describe the major health impacts of lead 
contamination in drinking water supplies that exceed 15 parts per 
billion?
    Response. EPA has not identified specific health impacts that 
correspond to specific lead concentrations in water. There are numerous 
factors that affect the concentration of lead in blood, including the 
degree to which a person is exposed to sources of lead in paint, dust, 
soil and water. Protocols for tap monitoring are designed to capture 
the highest concentration that would occur in a household during the 
course of a day. However, because the amount of lead in drinking water 
varies during the day, this sample does not represent the concentration 
of lead in all of the water consumed by an individual.
    The Centers for Disease Control and Prevention has identified a 
blood level of 10 micrograms per deciliter as the level of concern for 
lead in children and 25 micrograms per deciliter as the level of 
concern for adults. Health effects associated with elevated levels of 
lead in blood may include delays in normal physical and mental 
development in infants and young children; slight deficits in the 
attention span, hearing, and learning abilities of children; and, high 
blood pressure in some adults (which may lead to kidney disease and 
increased chance of stroke). Pregnant women and children are a primary 
concern. EPA set the maximum contaminant level goal for lead at zero 
because of the difficulty of identifying an exposure level for which 
there are no risks of adverse health effects. Exposure to lead in tap 
water alone at levels at or near 15 ppb should not cause blood levels 
to exceed 10 micrograms per deciliter without concomitant exposure to 
lead from other sources. EPA set the maximum level contaminant goal for 
lead at zero because of the difficulty of identifying an exposure level 
for which there are no risks of adverse health effects. This is 
assuming normal drinking water consumption.
    Few publications are available that identify drinking water as the 
primary source of lead in cases of elevated blood lead levels or lead 
poisoning. Cosgrove et al. published a case study of a childhood lead 
poisoning in Massachusetts that was traced to drinking water (Cosgrove 
et al., 1989. ``Childhood Lead Poisoning Case Study Traces Source to 
Drinking Water,'' Journal of Environmental Health, 52(1) p. 346-9). 
While the level of lead in water entering the house was far below the 
50 ppb standard in force at that time (1984), the first flush samples 
from the kitchen exceeded 300 ppb. An investigation found that the 
source of lead was solder from newly installed pipes. The family was 
directed to allow water to flush through household pipes before use and 
to clean out faucet aerators. Over a 2-year period, blood levels in the 
child decreased from 40 ug/dl to approximately 20 ug/dl, which was 
below the threshold level of concern at that time (30 ug/dl set in 
1975).

                               LEAD MCLG

    Question 91. EPA established the MCLG for lead in drinking water at 
zero. Please explain why the Agency selected zero.
    Response. In establishing MCLGs, the Agency seeks to determine the 
level at which there are no known or anticipated adverse effects on the 
health of persons and which includes an adequate margin of safety. At 
the time of the rulemaking, there was a body of scientific evidence 
that showed that the risk of adverse health effects was present at 
increasingly lower blood lead levels, and there was uncertainty that 
any blood lead level is free from risk of incurring adverse effects in 
sensitive subpopulations. EPA therefore established an MCLG of zero for 
lead in drinking water because of the difficulty of identifying a low 
lead exposure level at which there are no risks of adverse health 
effects. In addition, Agency policy stated that drinking water should 
have a minimal contribution to total lead exposure (given that a 
substantial portion of the sensitive population already had blood lead 
levels that exceeded the level of concern). Finally, lead is classified 
as a probable human carcinogen.

                   DRINKING WATER--PUBLIC INFORMATION

    Question 92. EPA's drinking water hotline answers thousands of 
questions each year. The recent revelation about lead contamination in 
the D.C. water system underscores the importance of accurate and 
objective drinking water information. There have been reports; however, 
that the President's funding cuts may force EPA to terminate the 
drinking water hotline. Is this correct, and if so, how does the EPA 
plan to provide information about drinking water quality to concerned 
citizens?
    Response. No. The Agency has no intention of terminating the Safe 
Drinking Water Hotline, which serves a critical role in EPA's outreach 
and public education efforts. In fact, questions about lead in drinking 
water are consistently among the most frequently asked of the Hotline. 
The Hotline is currently available by calling a toll-free number Monday 
through Friday from 9 a.m. to 5 p.m. and via email. During fiscal year 
2003, the Hotline received close to 25,000 calls from around the 
country, an average of 125 inquiries a day. Approximately 13 percent of 
the requests were made by email. Within the last month, EPA has 
directed extra funding to the Hotline to ensure that they can manage 
additional calls from District residents who have questions about lead 
in their drinking water. Over the past 2 years, the Office of Water has 
funded the Hotline at approximately $330,000 per year and will likely 
maintain this funding level for 2005. While the cost of operating the 
Hotline is significant, EPA believes that the benefits of being 
responsive to the public and increasing consumer awareness justify the 
costs.

    Question 93. When you announced in December that the Administration 
was dropping plans to rewrite Clean Water Act rules, you stated that 
EPA would reconsider the January 2003 policy requiring Federal agencies 
not to protect particular waters without first getting permission from 
EPA or the Corps of Engineers, which leaves many waters at risk. Since 
then, what steps if any have you taken to reconsider and rescind this 
anti-clean water directive?
    Response. EPA and the Corps of Engineers are taking a number of 
steps in response to the Supreme Court's decision in Solid Waste Agency 
of Northern Cook County (SWANCC). As we implement these actions and 
monitor their effectiveness, we will continue to assess the adequacy of 
existing field practices, guidance, and training programs and take 
appropriate steps to ensure Clean Water Act jurisdiction is correctly 
determined.
    On January 15, 2003, EPA and the Corps issued joint legal guidance 
that clarified the scope of ``waters of the United States'' in light of 
the U.S. Supreme Court's decision in SWANCC and subsequent judicial 
decisions (68 Fed.Reg. 1991, 1995 (January 15, 2003). The legal 
guidance states that field staff may no longer assert jurisdiction over 
isolated, intrastate, non-navigable waters based solely on the presence 
of migratory birds, and that agency headquarters approval should be 
obtained prior to asserting jurisdiction over such waters based solely 
on other types of commerce links. The legal memorandum emphasizes that 
field staff should continue asserting jurisdiction over navigable 
waters, their tributary systems, and adjacent wetlands. The memorandum 
also emphasizes that jurisdictional calls must reflect existing 
regulations and relevant case law. Consistent with this legal guidance, 
field staff at both EPA and the Corps continue to vigorously implement 
and enforce programs affecting all ``waters of the United States'' 
protected under the CWA after SWANCC.
    EPA does not believe the joint legal guidance ``leaves many waters 
at risk'' due to its requirement that field staff receive formal 
Headquarters approval prior to asserting jurisdiction based solely on 
links to interstate commerce. The guidance specifically provides that 
such concurrence is applicable only to isolated waters that are both 
intrastate and non-navigable. Given the rationale and reasoning in 
SWANCC and the extensive and varied case law since, the Agency believes 
it is appropriate for Headquarters to play a role before jurisdiction 
is asserted over such waters on the basis of commerce clause factors, 
both to ensure consistency with applicable case law and to foster 
national consistency on how such issues are approached.
    As the question notes, on December 16, 2003, EPA and the Corps of 
Engineers jointly announced that we would not issue a new rule on 
Federal regulatory jurisdiction over isolated wetlands. At the same 
time, the agencies emphasized we would continue to monitor 
implementation of Section 404 and other Clean Water Act (CWA) programs 
to ensure their effectiveness. The continued viability and utility of 
the January 2003 joint legal memorandum is one of the factors that we 
are monitoring. At present, EPA and the Corps have no specific plans to 
withdraw it.
    EPA and the Corps are committed to increasing consistency, 
transparency, predictability, and sound science for the CWA Section 404 
program. For example:

      the agencies are working together to ensure that 
information on jurisdictional calls is collected and shared with the 
public;
      staff from EPA and Corps Headquarters and field offices 
are planning joint visits to sites that illustrate difficult issues 
regarding the scope of waters of the US, in order to develop a common 
understanding of the issues;
      EPA and the Corps are coordinating to expand and improve 
the Corps' permit-tracking data base, which will be made available to 
the public through the Corps' website, providing important access to 
agency actions;
      the agencies are engaging in opportunities to explain to 
stakeholder groups the scope of CWA jurisdiction in light of SWANCC, 
including national and regional conferences and other public forums;
      EPA is conducting a scientific review of information on 
``isolated waters'' and their relationship to the physical, chemical, 
and biological integrity of ``navigable'' waters;
      EPA is co-sponsoring a U.S. Army Engineer Research and 
Development Center study on Ordinary High Water Mark indicators for 
delineating arid streams in the southwestern U.S.;
      EPA, Corps, and DOJ staff continue to have biweekly 
meetings to discuss jurisdictional issues and questions that arise in 
the field; and
      EPA is working closely with DOJ and the Corps in 
litigation, arguing that the SWANCC decision was focused on a subset of 
isolated waters and did not change CWA protections for tributaries, 
adjacent wetlands, and other waters. Since the SWANCC decision, the 
government has prevailed in ten of 11 Appellate Circuit decisions.

    Question 94. The January 15, 2003, EPA and Army Corps policy 
directive on Clean Water Act (CWA) jurisdiction tells the Federal 
agencies not to protect certain wetlands, streams and ponds without 
first getting permission from EPA or Army Corps of Engineers 
headquarters. How many miles of stream or acres of wetlands have been 
declared no longer subject to Clean Water Act jurisdiction because of 
the January 2003 policy?
    Response. The January 2003 guidance calls for field staff to obtain 
formal EPA and Army Corps of Engineers (Corps) Headquarters approval 
prior to asserting jurisdiction based solely on links to interstate 
commerce. We have received six requests for formal headquarters 
approval, plus an additional half dozen that involved navigable-in-fact 
isolated waters that do not require Headquarters approval. Of those 
six, Headquarters is seeking additional information on two, found two 
to be jurisdictional, and two to not be jurisdictional. Of the two 
sites found non-jurisdictional as a result of the EPA HQ approval 
process, one site involved a wetland of approximately two acres, and 
one a stream of approximately 37 miles in length.
    While the question focuses on resource impacts of the January 2003 
Headquarters process for approving jurisdictional calls based solely on 
commerce links, the committee may be interested in other steps that EPA 
and the Corps are taking to gather data on the aquatic resource impacts 
of Solid Waste Agency of Northern Cook County (SWANCC). Beginning in 
March 2004, Corps districts began systematically collecting information 
on findings of no-jurisdiction over waters deemed isolated, intrastate, 
and non-navigable, in a common format that includes information on 
wetland acreage or stream mileage impacted. The Corps is beginning to 
make this information publicly available via the Internet.
    It is important to note that the Corps data reflects only the 
results of jurisdictional determinations requested by landowners / 
permit applications and therefore does not represent activities that 
proceed without Corps review.

    Question 95. Can you give any examples of waters that have been 
declared no longer subject to Clean Water Act jurisdiction?
    Response. The January 2003 guidance calls for field staff to obtain 
formal EPA and Army Corps of Engineers (Corps) Headquarters approval 
prior to asserting jurisdiction based solely on links to interstate 
commerce. We have received six requests for formal headquarters 
approval, plus an additional half dozen that involved navigable-in-fact 
isolated waters that do not require Headquarters approval. Of those 
six, Headquarters is seeking additional information on two, found two 
to be jurisdictional, and two to not be jurisdictional.
    One water found not jurisdictional was an isolated, intrastate, and 
non-navigable wetland located in Granite Park in Sacramento, 
California. The sole prospective basis for asserting CWA jurisdiction 
over the wetland was the potential use by interstate visitors, with no 
evidence indicating a basis for anticipating such visitors. We 
understand that Sacramento's request for a jurisdictional determination 
was to inform development of its Master Plan, and not as the result of 
plans to develop the wetland.
    The second water found not jurisdictional was the lower reach of 
Poso Creek, an isolated intrastate non-navigable water located in 
California, in the southern Central Valley area northeast of 
Bakersfield. The sole prospective basis for asserting CWA jurisdiction 
over Poso Creek was the waters' contribution to a national wildlife 
refuge (NWF) that received a small number of interstate visitors. Gauge 
data indicated the stream's waters reached the NWF very rarely (on 34 
days over the last 43 years) at times of the year the refuge was 
releasing water from the refuge and blocking new flows from sources 
such as Poso Creek. Thus, the link to interstate commerce was 
determined to be too attenuated to serve as a basis for jurisdiction.
    As the Corps begins to collect and make available to the public 
information on determinations of no jurisdiction, this information is 
being posted on the Internet, as some individual Corps Districts have 
already begun to do.

    Question 96. What is EPA doing to track the fate of the types of 
waters subject to this policy?
    Response. EPA is working with the Corps of Engineers (Corps) to 
gather data on the aquatic resource impacts of Solid Waste Agency of 
Northern Cook County (SWANCC). Responding to a request from EPA, Corps 
Districts in March 2004 began systematically collecting information on 
findings of no-jurisdiction over waters deemed isolated, intrastate, 
and non-navigable. The information is being compiled in a common format 
that includes information on wetland acreage and stream mileage 
impacted, as well as rationale on why the water was deemed non-
jurisdictional. The Corps plans to make this information publicly 
available via the Internet, and some Districts have already begun 
posting no-jurisdiction summaries on their websites.
    The Corps and EPA also are coordinating to expand and improve the 
utility of the Corps' OMBIL Regulatory Module (ORM), the permit-
tracking data base currently being installed in all Corps districts. 
EPA's Office of Resource Management (ORM) will provide the Corps with 
more detailed information on permit impacts and mitigation and will be 
linked to a Geographic Information System (GIS) in the near future to 
provide spatial data for all permits. These data will be made available 
to the public through the Corps website with frequent updating. These 
will provide an excellent foundation for providing greater 
accessibility to information and help ensure consistency based on 
credible data.
    The Corps and EPA are working together on a Corps-initiated project 
to make Corps data available for water quality and watershed managers 
by integrating it with other information systems. The objective is to 
enable geographically referenced data on Section 404 permits, 
compensatory mitigation, and compliance and enforcement actions to be 
evaluated along with data on water quality condition, impairment, and 
habitat in streams and other water bodies. This will facilitate the 
development and implementation of comprehensive watershed plans that 
address issues such as wetlands and water quality. The resulting data 
also will be available to the local entities, States, and general 
public to assist with their watershed and land use planning efforts.
    It is important to note that the Corps data reflects only the 
results of jurisdictional determinations requested by landowners / 
permit applications and therefore does not represent activities that 
proceed without Corps review.

    Question 97. Is the Army Corps conferring with EPA before declaring 
certain wetlands, streams, or ponds to be outside of the scope of the 
Clean Water Act?
    Response. The Army Corps of Engineers (Corps) and EPA have 
undertaken a variety of actions to increase coordination on the Section 
404 program implementation and jurisdictional determinations. EPA and 
Corps headquarters coordinate on requests from the field, in accordance 
with the January 2003 guidance, for formal approval of jurisdictional 
calls involving isolated intrastate non-navigable waters based solely 
on commerce links other than those in the migratory bird rule. 
Furthermore, a number of EPA Regions and Corps districts currently 
coordinate in advance on jurisdictional calls that raise challenging 
issues. Likewise, EPA, Corps, and Department of Justice (DOJ) staffs 
continue to have biweekly meetings to discuss jurisdictional issues and 
questions that arise in the field. Corps practice has generally been to 
consider as jurisdictional without further analysis those waters that 
have been subject to other CWA provisions, such as Section 402 water 
permits or Section 311 oil spill actions.
    EPA will be working with the Corps to implement the recommendations 
in the recent Government Accounting Office (GAO) report, ``Waters and 
Wetlands: Corps of Engineers Needs to Evaluate Its District Office 
Practices in Determining Jurisdiction.'' These recommendations include 
surveying Corps offices to identify significant differences in 
jurisdictional practices, evaluating whether and how these differences 
might be resolved, and better documenting jurisdictional practices and 
making information publicly available.
    As EPA and the Corps jointly implement the scope of ``waters of the 
United States'' protected by the Clean Water Act after SWANCC, a 
variety of issues have arisen due to the differences in climate, 
geology, and geography throughout the country. The current regulations 
establish a framework that provides useful detail and consistency for 
applying best professional judgment on a case-by-case basis. EPA is 
committed to working with the Corps to ensure that approaches and 
results are consistent for similar aquatic resources, consistent with 
Clean Water Act goals, and legally defensible. Headquarters and field 
office staff will conduct joint visits to sites that may involve 
complex jurisdictional determinations regarding the scope of the waters 
of the United States, in order to work toward a common understanding of 
jurisdictional issues and potential approaches. Visited sites would 
include those that are illustrative of the hydrologic regime in the 
area, and would assess field conditions independent of any particular 
permitting actions.
    Corps and EPA staff are working together to explain to stakeholder 
groups the scope of CWA geographic jurisdiction in light of SWANCC. For 
example, EPA and Corps staff recently spoke at national meetings of the 
National Association of Counties, National Conference of State 
Legislators, and at a widely attended meeting in Texas sponsored by the 
Texas General Lands Office. We also are taking steps to ensure 
Headquarters and Field staffs from both agencies have a common 
understanding of the scope of the CWA.

                         DRINKING WATER--RADIUM

    Question 98. Drinking water infrastructure is of great importance 
to many States. As you probably know, naturally occurring radium is 
found in drinking water systems throughout Southeastern Wisconsin. What 
steps is EPA taking to assist communities in meeting water 
infrastructure needs such as those related to radium standards?
    Response. EPA assists communities to meet their drinking water 
infrastructure needs through the Drinking Water State Revolving Fund 
(DWSRF) program. The DWSRF program provides grants to States, who then 
provide low interest loans and other forms of assistance to public 
drinking water systems to help these systems meet health-based 
standards, such as the radium standards, for safe drinking water. The 
President's fiscal year 2005 Budget Request includes $850 million for 
the DWSRF program. The allocation of funds to the States under the 
DWSRF program is determined by the results of the Drinking Water Needs 
Survey, which is conducted every 4 years.
    In addition to the infrastructure funding of the DWSRF program, the 
DWSRF program also provides set-aside provisions whereby States can 
designate up to 31 percent of their grants to fund activities to 
support drinking water programs and systems. Set-aside funds are 
especially critical in helping communities to address drinking water 
challenges that may not qualify or be appropriate for infrastructure 
project loans from the State revolving fund.
    EPA also provides assistance to State regulators, system owners and 
operators, and technical assistance providers by producing 
implementation guidance and tools such as:

      Radionuclides Rule: A Quick Reference Guide (EPA 816-F-0-
003, June 2001)
      Radionuclides in Drinking Water: A Small Entity 
Compliance Guide (EPA 815-R-02-001, February 2002)
      Final Implementation Guidance for Radionuclides (EPA 816-
F-00-002, March 2002)

    In 2002, EPA conducted 7 face-to-face training sessions throughout 
the country. Topics covered included an overview of the rule, rule 
milestone dates, requirements of the rule, and compliance 
determination. EPA plans to conduct 2 additional, 3-hour web cast 
training sessions in 2004. The focus for these sessions will be 
treatment technologies, health effects, monitoring analysis of 
radionuclides, calculating compliance and waste residual handing. The 
first web cast is scheduled for June 29. The second session will be 
conducted in fall of 2004.

    Question 99. Can you describe the specific programs in the budget 
that will provide for technical assistance for local communities to 
meet these and other drinking water standards?
    Response. EPA's budget provides technical assistance to communities 
to meet drinking water standards through Public Water System 
Supervision (PWSS) grants and through the Drinking Water State 
Revolving Fund (DWSRF) program. The President's fiscal year 2005 Budget 
Request includes $105 million for the PWSS grants and $850 million for 
the DWSRF program.
    The PWSS program provides grants used by State drinking water 
programs to monitor drinking water quality, conduct sanitary surveys, 
enforce drinking water standards, and provide technical assistance to 
local communities. Funds are distributed based on an allotment formula 
that considers the number of different types of water systems, State 
population, and geographical area.
    The DWSRF program provides grants to States for capitalization of 
revolving State loan funds (SRFs), and also provides set-aside 
provisions whereby States can designate up to 31 percent of their 
grants to fund activities to support drinking water programs and 
systems. In particular, one of the set-aside categories under the DWSRF 
program is called ``Technical Assistance to Small Systems''. In 
addition to the small system technical assistance set-aside, funds from 
other set-asides can be used to provide technical assistance to 
communities, large and small.
    EPA assesses the needs for drinking water infrastructure every 4 
years through the Drinking Water Needs Survey process. This survey is 
called for and required by the 1996 amendments to the Safe Drinking 
Water Act. The results of the needs survey determine the allocation of 
the annual appropriations provided by Congress for the DWSRF program.

                              CLEAN WATER

    Question 100. What is the status of the Agency's review of the 
stormwater Phase II regulation and its applicability to small oil and 
gas constructionsites? When do you plan to have this complete?
    Response. EPA has started conducting an in-depth analysis of all 
potential economic impacts relating to oil and gas industry compliance 
with the Phase II stormwater regulations. The Agency expects 
preliminary information this summer and a completed analysis by the 
Fall. EPA will then determine if a rulemaking is necessary and publish 
a Federal Register notice documenting the Agency's decision prior to 
March 10, 2005.

                         DECREASE IN WORK YEARS

    Question 101. The Administration's budget shows a decrease of 12 
work years for the Agency goal of clean and safe water. Can you explain 
this reduction?
    Response. The FTE in the Office of Water have actually increased by 
14.4. The decrease apparent in the fiscal year 2005 congressional 
Justification is a result of a change in the methodology used to 
allocate Agency support resources (dollars and FTE from offices such as 
the Office of the Chief Financial Officer and the Office of the General 
Counsel) across the 5 goals. This change resulted in a net reduction of 
12 support FTE in Goal 2.

                              GREAT LAKES

    Question 102. What is EPA's position regarding GAO's 
recommendations for an overall restoration strategy for the Great Lakes 
and the need to develop indicators for measuring progress?
    Response. EPA strongly supports an overall restoration strategy for 
the Great Lakes. EPA worked extensively over a 2-year period with its 
State, tribal, and Federal partners to develop the Great Lakes Strategy 
2002. Public meetings were held across the basin in Duluth, Detroit, 
Chicago, and Niagara Falls. Over 2,000 public comments from the public 
were considered. Progress is being tracked under the Strategy for over 
120 actions by EPA and its partners. EPA will buildupon work done in 
the Strategy to continue making progress restoring the Great Lakes 
ecosystem.
    In addition to the Strategy, EPA has worked with Environment Canada 
to develop the State of the Lakes Ecosystem Conferences (SOLEC) which 
are geared toward the development and tracking of a science-based suite 
of indicators necessary and sufficient to assess and report progress 
toward the goals and objectives of the Great Lakes Water Quality 
Agreement. Over 800 indicators were initially reviewed by over 130 
scientists and other participants, and a suite of 80 indicators has 
been identified as necessary to assess Great Lakes health. Five State 
of the Great Lakes reports based on Great Lakes indicators have been 
issued since 1995, with the latest report being released in August 
2003. SOLEC will again be held in October 2004 to continue the work of 
assessing the State of the Lakes and reporting on indicators.

                            SEWAGE OVERFLOW

    Question 103. What are EPA's plans to combat the growing problem of 
sewage overflows that are polluting our nation's waterways, 
particularly in the Great Lakes?
    Response. Municipal wastewater infrastructure, which includes 
collection systems and treatment plants, plays a critical role in 
protecting public health by reducing human contact with raw sewage. 
Discharges of raw sewage, including combined sewer overflows (CSOs) and 
sanitary sewer overflows (SSOs) can pose a significant threat to human 
health and the environment in many communities. In order to protect 
Great Lake beaches and other waters nationally, EPA places a high 
priority on controlling discharges of untreated sewage. A long-term 
goal of EPA and its State and local partners is to eliminate all 
discharges of untreated sewage to the environment.
    The majority of overflows from the United States which discharge 
into the Great Lakes are located within EPA's Region 5. States within 
Region 5, along with the EPA Regional Office, are targeting enforcement 
inspections to cover large systems with CSOs and with potential SSO and 
treatment plant bypass problems affecting the Great Lakes. These 
efforts have led, for example, to the issuance of enforcement orders to 
the Western Lake Superior Sanitary District and the city of Duluth for 
SSO violations. In addition, EPA Region 5 has a goal to have by 2008 
all CSO discharges in the Great Lakes Basin under permits or orders 
which require implementation of measures to comply with the nine 
minimum controls and development of long term control plans (LTCP) to 
meet water quality standards, and to assure that at least 75 percent of 
all CSO discharges have approved LTCPs and enforceable schedules in 
place to implement these plans. Region 5 and its States are directing 
significant resources toward the review and approval of CSO LTCPs, 
focusing on those posing the most significant risk to public health, 
especially those that may impact the Great Lakes Beaches.

                               SPCC RULE

    Question 104. Please provide the terms of the ``arrangement'' the 
Agency has reached with the American Petroleum Institute on the SPCC 
rule, referenced by Senator Inhofe during his questions.
    Response. EPA is in the process of publishing in the Federal 
Register the full terms of the partial settlement achieved in the 
consolidated SPCC litigation complaints of the American Petroleum 
Institute (API), the Marathon Oil Company, and the Petroleum Marketers 
Association of America (PMAA). Together, these parties challenged EPA 
over five SPCC policy matters: (1) definition of ``navigable waters'', 
(2) role of cost in secondary containment decisions, (3) exclusion of 
produced waters from the wastewater treatment exemption, (4) 
requirements for loading racks, and (5) small business impacts. The 
agreement addresses all issues except the definition of navigable 
waters.
    We recently posted a summary of the settlement terms on EPA's oil 
program website: www.epa.gov/oilspill. The terms represented the 
culmination of several months of settlement discussions, and addressed 
concerns raised by plaintiffs relative to the role that cost may have 
in decisions regarding the practicability of secondary containment, the 
scope of the requirements under the ``loading rack'' section of the 
SPCC rule, means to address integrity testing and facility security 
requirements, and the applicability of SPCC to produced waters in oil 
and gas production facilities. To the extent that the settlement terms 
are relevant to a SPCC facility, the policy clarifications are 
applicable to all facilities, not just to those owned by the litigants.

                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                               Lieberman

                     ENVIRONMENTAL IMPACT STATEMENT

    Question 1. Administrator Leavitt, Connecticut is currently faced 
with an urgent need to conduct Federal dredging projects in several of 
the State's harbors. These dredging projects are crucial to ensure the 
continued safe and efficient flow of commerce in and out of 
Connecticut's harbors. The cost estimates and timeframes for several of 
these projects have been based on the disposal of dredge material from 
the projects at the Central Long Island Disposal Site. This disposal 
site was closed indefinitely on February 18th of this year due to the 
fact that the Environmental Impact Statement for permanent designation 
of this site and the Western Long Island Disposal Site has not yet been 
finalized. In order for critical dredging projects to commence this 
fall, the EIS for the two sites will need to be finalized as soon as 
possible. Can you commit to me that the EIS for these sites is 
completed in a timely manner so that Connecticut can address its most 
urgent dredging needs?
    Response. The Final Environmental Impact Statement (EIS) was 
released on April 16, 2004, for a 30-day public review period, and 
subsequently extended 15 days to June 1, 2004, for a total of 45 days 
in response to requests from members of the New York congressional 
delegation and several Long Island-based citizen groups (who requested 
an additional 45 days and more public hearings). EPA and the U.S. Army 
Corps of Engineers (USACE) New England District (NED) also conducted 
two public meetings on May 4 in Islandia, New York (on Long Island) and 
on May 5 in Stamford, Connecticut. EPA anticipates publishing final 
rulemaking with the record of decision on or soon after July 1, 2004 
(NEPA regulations require that rulemaking must be at least 30 days 
after end of the public review period). Disposal sites become available 
for disposal activity 30 days after the rulemaking is published in the 
Federal Register.
    However, there is significant opposition to the site designations 
from New York elected officials at all levels of government and many 
Long Island residents. Most of the individuals who attended the May 4 
public meeting in New York spoke in strong opposition to the site 
designations, while those who attended the Connecticut meeting spoke in 
favor of the site designations. We have already received several 
hundred letters, mostly from citizen groups and individuals on Long 
Island who are opposed to the site designations. In addition, on May 6 
EPA received a letter from the New York Department of State (NY DOS) 
Coastal Zone Program requesting that EPA withdraw our Federal 
consistency determination because NYS DOS does not feel EPA has 
provided enough information on which to base their concurrence. The 
review period for EPA's Federal consistency determination review by NYS 
DOS ends May 21, 2004.

                                MERCURY

    Question 2. Administrator Leavitt, as I noted in my statement, I am 
particularly concerned about the new mercury proposals that you 
released in December. Under either proposal, you require very little 
reductions in mercury versus what many believe is possible; in fact, 
the cap-and-trade proposal yields no reductions beyond business-as-
usual until 2018. This is particularly frustrating when States like 
Connecticut--and their regulated utilities--have arrived at consensus 
proposals to make 85 to 90 percent reductions in mercury emissions. How 
can you justify your proposal given these examples?
    Response. The Clean Air Interstate Rule and the Clean Air Mercury 
Rule represent one of the most ambitious efforts to clean the air under 
any administration. When implemented, these rules will improve the 
quality of the air we breathe and the food we eat, enabling Americans 
to live longer, more productive, and healthier lives.
    Cap-and-trade is preferred for several reasons. First, it will be 
effective from an environmental standpoint. Importantly, cap-and-trade 
will create powerful incentives for the large emitting facilities to be 
the first to reduce their emissions. The banking provisions will cause 
reductions far beyond ``business-as-usual'' well before 2018. Second, 
cap-and-trade is more efficient than a comparable command-and-control 
standard, such as our MACT proposal. Cap-and-trade is easier to 
administer, promotes nearly perfect compliance, and is more cost-
effective. Last, the mercury cap-and-trade rule is our preferred 
regulatory tool because it would dovetail with the proposed Clean Air 
Interstate Rule.
    The 70 percent reduction proposed under the cap-and-trade approach 
would necessitate the development of new mercury-specific technologies, 
such as activated carbon injection (ACI). Based on current information 
it is projected that ACI technology will be available for wide-scale 
commercial application after 2010 and that removal levels of 70 percent 
or more could be achievable.

                               MACT RULE

    Question 3. We have heard the argument that although the technology 
to achieve these reductions exists, it cannot be adopted by the 2007 
deadline specified within the MACT rule. Do you have any evidence to 
support that contention?
    Response. Pollution control industry statements confirm our view 
that advanced mercury control technologies are not yet ready for 
commercialization. The EPA agrees with the equipment vendors that these 
new technologies show great promise. However, actions by various 
segments of the industry confirm our understanding that these mercury-
specific control technologies are not, and will not be, available 
within a 3-to 4-year time-frame. To date, there have been four full-
scale field tests on activated carbon injection (ACI), the most 
promising mercury-specific control technology on the near-term horizon. 
These tests have been conducted on three bituminous-fired units and one 
subbituminous-fired unit. Continuous operation of ACI was conducted for 
two 5-day periods, one 4-day period, one 5-day period, and one 9-day 
period at the four tests. This limited amount of continuous ACI 
operation indicates that the technology has not been sufficiently 
tested to be the basis for a nationwide regulation that would require 
compliance all day, every day, for the remainder of the life of the 
unit.
    One long-term ACI test was initiated in April 2003 on a bituminous-
fired unit. This test was to evaluate the mercury removal efficiency of 
ACI over a period of several months to 1 year, further assess the 
impact of ACI on balance-of-plant operations (i.e., how will ACI impact 
on maintenance frequency and costs, on ash disposal and utilization, on 
internal plant energy use, etc.), and provide additional information on 
the design characteristics and costs of ACI technology for other 
installations. Because of problems encountered, this test has not been 
completed and thus the final results are not known. However, it is our 
understanding that this test has shown the ability of ACI, when used at 
a bituminous-fired unit, to average 86 percent mercury removal over an 
extended period of time but has highlighted design problems that must 
be corrected prior to full scale installation on other units.
    On April 21, 2004, the U.S. Department of Energy (DOE) made a joint 
announcement with WE Energies about the initiation of a joint venture 
to demonstrate technology that will remove an ``unprecedented'' 90 
percent (expected but not guaranteed) of mercury emissions from coal-
based power plants. This 5-year project will involve the design, 
installation, operation, and evaluation of an integrated system on one 
coal-fired power plant to control emissions of mercury, particulate 
matter, sulfur dioxide, and nitrogen oxides.
    Further, the electric utility industry reportedly has had trouble 
obtaining solid, guaranteed quotes for ACI installation on coal-fired 
units. We have heard from a number of utility companies indicating that 
they have tried without success to get bids on, and guarantees for, ACI 
installations. To date, we are aware of only one permit outside of a 
federally co-funded program (on a unit to commence operation in 2007 
and burn low-sulfur Western coal) that has been issued that included 
ACI technology (MidAmerican Energy Station permit issued by the Iowa 
Department of Natural Resources). The lack of additional examples is 
indicative of the lack of industry confidence in guaranteeing permit 
levels at this time.

                             CAP AND TRADE

    Question 4. Administrator Leavitt, you argue that the cap-and-trade 
methodology is the most efficient regulatory approach we have taken, 
and that we should therefore use a cap-and-trade to regulate mercury. 
Would you agree that cap-and-trade is also the most efficient means by 
which we can require mandatory reductions of greenhouse gases?
    Response. Currently, the Administration opposes mandatory 
reductions in greenhouse gases and is pursuing a multi-part climate 
program that includes: enhanced research on the science of climate 
change; increased research and development on advanced energy and 
carbon sequestration technologies (hydrogen, fusion, nuclear); a stated 
goal to reduce greenhouse gas intensity by 18 percent; voluntary 
reduction programs for near-term emissions; over $4 billion in tax 
incentives for renewable and highly efficient energy technologies; 
incentives for carbon sequestration under the conservation programs of 
the multi-billion dollar 2002 Farm bill; and continued support for 
meeting our obligations under the United Nations Framework Convention 
on Climate Change.
    According to the analysis of the independent Energy Information 
Administration (EIA), legislative proposals to mandate near-term 
greenhouse gas reductions across the American economy would impose 
significant job losses and economic harm on Americans. For example, 
with respect to S. 139, ``The Climate Stewardship Act of 2003,'' the 
EIA estimated that it would cause average annual job losses of 460,000 
through 2025, and a 50 percent increase in the natural gas end 
electricity bills of American consumers. And there is no convincing 
analysis suggesting that global greenhouse gas emissions would decrease 
if domestic legislation such as S. 139 became law. Instead, analysis 
suggests that it would merely force economic activity to migrate to the 
hundreds of nations that do not have any such limits, with the 
concomitant export of related greenhouse gas emissions and pollution.

                        GREENHOUSE GAS EMISSIONS

    Question 5. Just recently, the EPA announced that our nation's 
greenhouse gas emissions rose again over the past year. To me, our 
inaction on global warming is becoming a moral and ethical problem--our 
nation consumes a quarter of the world's resources, emits a quarter of 
the greenhouse gases, but refuses to take action, when some of the 
poorest in the world will be faced with the heat, the weather 
conditions, and the other consequences of the warming of the Earth. 
Clearly, we must do more to reverse the upward march of our emissions, 
yet your Administration has clung to the voluntary reduction programs 
that have failed us for the past 12 years. What else does this 
Administration plan to do to stem the tide of U.S. greenhouse gas 
emissions?
    Response. This Administration has ambitious and appropriate plans 
to address global climate change. In the near term and in the absence 
of complete knowledge, this Administration is pursuing greenhouse gas 
emissions reductions while sustaining economic growth. In 2002, the 
President set a national goal to reduce the greenhouse gas intensity of 
the U.S. economy by 18 percent over the next 10 years. This represents 
a 4.5 percent reduction from forecast emissions in 2012, a serious, 
sensible, and science-based response to the long-term challenge of 
global climate change. In addition, the Administration continues to 
make investments in science that will increase our understanding of 
global climate change. The U.S. leads the world in climate science 
investment and in recent years has spent nearly $2 billion annually on 
Federal research. Investments in technologies such as advanced energy 
and sequestration will provide future breakthroughs needed to reduce 
greenhouse gas emissions in the longer term.
    The Administration recognizes that voluntary approaches can help 
limit greenhouse gas emissions while helping to grow the economy. 
Voluntary programs have been contributing to greenhouse gas reductions 
over the past decade and will have increased benefits in future years. 
In 2000, U.S. climate change programs reduced greenhouse emissions 
growth by 242 million metric tons of CO2 equivalents (MMTCO2E) and 
significantly helped the U.S. to reduce carbon intensity (CO2 emitted 
per unit of GDP). More recently, the EPA's voluntary climate change 
programs saved 161 MMTCO2E in 2002 alone--equivalent to the emissions 
from more than 28 million automobiles. These savings provide real 
benefits and help Americans save money on their energy bills. The 
methane gas program is just one example of the achievements of 
voluntary programs. The voluntary methane partnerships, in conjunction 
with a regulatory program to limit air emissions from the nation's 
largest landfills, reduced national methane emissions to well below 
1990 levels, and they are projected to remain below 1990 levels through 
2012. As a whole, the voluntary climate change programs and 
partnerships are an effective way to reduce greenhouse gas emissions 
and play an important role in achieving the Administration's ambitious 
intensity reduction goal of 18 percent by 2012.

            BART (BEST AVAILABLE RETROFIT TECHNOLOGY) RULES

    Question 6. Administrator Leavitt, in your previous position as 
Governor, you wrote to Administrator Whitman about the section of the 
regional haze rule that addresses Best Available Retrofit Technology--
BART requirements for Class I areas. In response, she told you that the 
EPA planned to publish a proposed rulemaking package on BART 
requirements and guidelines, by April 2004. I'm pleased to hear that 
the EPA is on target to release these rules. But I am concerned that 
these rules will never take effect. It is my understanding that you are 
considering putting these rules into repose until 2018, on the theory 
that the Interstate Air Quality Rule will be good enough. With all due 
respect, Administrator Leavitt, that just doesn't make sense to me. 
After all these years, all the court-battles, and now, the staff time 
to finalize the proposed BART rules by April, why would you think of 
delaying them for yet ANOTHER 14 years?
    Response. We do not intend to put the BART rule into repose, or to 
delay it for 14 years; this represents a misunderstanding of the BART 
rule and its relationship to the Interstate Air Quality Rule, now known 
as the Clean Air Interstate Rule (CAIR). Here is what the BART rule 
provides:

    1. If particular States put in place an alternative emissions 
trading requirement that applies to all BART sources, or to a 
particular subset of BART sources, in those States, and
    2. If the alternative trading program will result in greater 
reasonable progress toward natural visibility conditions than BART 
controls on all of those sources would have gotten; then
    3. For that subset of BART sources covered by the trading program, 
compliance with the trading program would satisfy BART.

    We intend that in affected States, the CAIR would qualify as an 
alternative trading program for those sources that it covers. We 
believe that the CAIR achieves ``better-than-BART'' improvements in 
visibility.
    In return for achieving greater reasonable progress than case-by-
case BART would have achieved, we allow a longer time period for 
implementation of the trading requirements. The longer time period is 
NOT 14 years; if CAIR is implemented, it is 1, or at most, 2 years. 
Note that a trading program is likely to achieve greater reductions 
than case-by-case BART well into the future, because a trading program 
caps overall emissions, but case-by-case BART does not. Attached is an 
implementation timeline.

                                      REGIONAL HAZE IMPLEMENTATION TIMELINE
----------------------------------------------------------------------------------------------------------------
                                  Late 2008 or early  Late 2013 or early
         January 2008\1\             2009 (varies)          2014\2\              2015                2018
----------------------------------------------------------------------------------------------------------------
Due date for regional haze State  EPA approves SIPs.  Case-by-case BART   IAQR trading        All other regional
 implementation plans (SIPs)                           controls must be    program controls    haze SIP
 that include BART.                                    installed.          must be fully       requirements must
                                                                           implemented.        be met, including
                                                                                               any State or
                                                                                               regional trading
                                                                                               program
----------------------------------------------------------------------------------------------------------------
\1\Three years after PM2.5 designation, per Omnibus Act
\2\Five years after SIP approval, per statute

                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                               Voinovich

                   CLEVELAND AIR TOXICS PILOT PROJECT

    Question 1. How will you expand the Cleveland Air Toxics Pilot 
Project? What do you think is the potential of the program?
    Response. In keeping with the original goal of local 
sustainability, management of the Cleveland pilot project is now the 
responsibility of the American Lung Association (ALA) of Ohio. There 
are key lessons that can be drawn from the Cleveland pilot to inform a 
national program. The Agency is currently seeking to expand the number 
of community-based air toxics reduction programs, and a recent Request 
for Applications (RFA) will fund 6-10 toxics assessment or risk 
reduction projects in communities around the country. In addition, a 
new multi-media program at EPA, Community Action for a Renewed 
Environment (CARE), seeks to reduce exposures to toxics in overburdened 
communities. It is our intent that all of our locally focused toxics 
reduction efforts will apply the successful aspects of the Cleveland 
pilot.
    The potential of this program is high and EPA will follow the 
Cleveland project and closely monitor its sustainability over time. 
From this project, it is clear that voluntary, community-based projects 
can lead to real reductions and we strongly believe that the experience 
can be replicated. Some of the key lessons learned from Cleveland 
include the following:

      Emphasize action
      Establish a dedicated and committed EPA team
      Identify entrepreneurs within the community that have 
credibility and the power to lead a project or component of the project
      Conduct a thoughtful, inclusive, and comprehensive 
convening process to recruit effective community participants
      Grant the community authority to make decisions and 
implement programs
      Provide sufficient funding to create interest, support a 
process, and reduce air toxics using voluntary approaches
      Use neutral and talented facilitation
      Establish focused, achievable, crystal-clear goals with 
the community
      Maintain an integrated focus among outdoor, indoor, and 
mobile sources
      Ensure consistent, regular and open communication about 
issues and strategy both internally and externally
      Use readily available assessment information and analysis 
to guide action
      Promote voluntary action as an integral and effective 
component of a comprehensive toxics strategy
      Encourage sustainability

                        CLEAN SCHOOL BUS PROGRAM

    Question 2. How will communities participate in the Clean School 
Bus Program?
    Response. Communities can participate in the Clean School Bus USA 
program in a variety of ways. Local governments and school districts in 
the community can compete for Clean School Bus USA grant funds to 
replace or retrofit their diesel school bus fleets. With the fiscal 
year 2005 President's Budget request of $65 million for this program, 
the number of communities participating in the program will be greatly 
expanded.
    In addition, EPA has established an extensive outreach program to 
help communities find the information and resources to get involved. 
One step communities can take is to establish and implement an idling 
reduction program in their local school districts. There is an 
immediate benefit to the community of reduced diesel emissions and 
exposure, plus fuel savings and less wear-and-tear on engines. Idling 
reduction programs are being implemented across the country and have 
the full support of Clean School Bus USA's stakeholders, including 
diesel engine manufacturers. Communities can also adopt a variety of 
other immediately available, no-or low-cost operating practices that 
reduce diesel emissions and exposure.
    Clean School Bus USA is an excellent way for communities to come 
together around the issue of reducing diesel emissions in general. 
Strong leadership and partnerships at the local level are critical 
factors to the success of school bus retrofit and replacement. Leaders 
bring enthusiasm and dedication necessary to sustain momentum. Local 
partners help leverage financial and other resources and can help with 
technical support. For example, the Cleveland community has integrated 
its air toxics reduction and clean school bus efforts. The local 
efforts helped convince the State of Ohio to apply enforcement 
settlements to fund school bus retrofits. In Maine and North Carolina, 
State and local air agencies have contracted directly with retrofit 
technology companies on behalf of many school districts to increase 
efficiency and reduce costs of the retrofit equipment.

    Question 3. How will EPA distinguish between the many communities 
that are reportedly in need of assistance from this program?
    Response. EPA is still developing implementation plans for the $65 
million Clean School Bus USA grants program proposed in the President's 
budget request. However, we anticipate applying criteria similar to 
those we used in our fiscal year 2003 and fiscal year 2004 grant 
programs to prioritize funding decisions and distinguish among the many 
communities wishing to access this assistance.
    The evaluation criteria for fiscal year 2003 and fiscal year 2004 
Clean School Bus USA grant decisions involved factors such as: the 
applicant's implementation plan; partnerships; ability to participate 
financially by leveraging local and private resources; technology 
diversity; geographic equity; ridership statistics; pollution reduction 
policy support; project sustainability beyond the grant funding period; 
and the environmental justice impact. In fiscal year 2005, these 
factors as well as the air quality status of the community will be 
considered. These selection factors allow us to maximize the health and 
environmental benefits.
    It should be noted that Clean School Bus USA is a program designed 
to assist every community in the United States. EPA has implemented a 
far-reaching outreach strategy that provides free technical assistance, 
informational materials, and access to a variety of other resources so 
that all communities are able to benefit from the program on some 
level.

                       GREAT LAKES LEGACY PROGRAM

    Question 4. How will the Great Lakes Legacy Program's $45 million 
be spent and what kind of progress do you expect this will make in 
addressing the contaminated sediment problems in the Great Lakes, 
including Ohio's four Areas of Concern (Maumee, Black, Cuyahoga, and 
Ashtabula Rivers)?
    Response. The Program's $45 million will be spent on projects in 
sites selected in accordance with the provisions of the Legacy Act 
giving top priority to projects geared to on-the-ground remediation of 
contaminated sediments, particularly projects that would commence 
remediation no later than a year after receipt of funds. The next 
priority will be projects that seek to move a contaminated sediment 
site toward remediation such as: site characterizations, site 
assessments, source identification/source control, monitoring, remedial 
alternatives evaluations and short-term/long-term effects analyses, 
primarily on cleanup projects. Through March, 2004, 14 projects had 
been submitted pursuant to a Request for Projects from the Great Lakes 
National Program Office (GLNPO) for fiscal year 2004 funding. Twelve of 
these requests were for remediation, including an Ohio project proposed 
by the Ashtabula Port Authority, and two projects for monitoring and 
for source control. We expect that the selected Legacy Act projects 
will substantially advance contaminated sediment cleanup at sites in 
Great Lakes Areas of Concern, especially since most of these projects 
are for actual remediation. With the President's request of $45 
million, we expect to fund approximately four to six projects in fiscal 
year 2005.

    Question 5. This past summer, the General Accounting Office (GAO) 
released a report which stated that restoration is being hindered 
because there is little coordination and no unified strategy for Great 
Lakes environmental activities. How is EPA addressing these issues?
    Response. In order to improve upon the delivery of Federal programs 
addressing the Great Lakes, President Bush issued an Executive Order on 
May 18, 2004. The Executive Order created a cabinet level Great Lakes 
Interagency Task Force chaired by the EPA Administrator and reporting 
to the President. Through the Executive Order, the Federal Government 
will partner with the Great Lakes States, tribal and local governments, 
communities, and other interests to establish a regional collaboration 
to address nationally significant environmental and natural resource 
issues involving the Great Lakes.  The Task Force will help executive 
departments and agencies of the Federal Government ensure that their 
programs are funding effective, coordinated, and environmentally sound 
activities in the Great Lakes system. The Executive Order also creates 
the Great Lakes Regional Working Group to establish a mechanism for the 
Task Force to coordinate programs and identify priorities in concert 
with the eight Great Lakes States through communications with the 
Council of Great Lakes Governors, and with various local jurisdictions 
around the basin, through communications with the Great Lakes Cities 
Initiative.
    We believe that the Task Force can buildupon the common goals and 
objectives and shared understanding of the environmental problems which 
were established by ``Great Lakes Strategy 2002'', and can enhance 
environmental protection through increased visibility and 
collaboration, especially with local jurisdictions. After over 2 years 
of collaborative work with the U.S. Policy Committee, the Great Lakes 
Strategy 2002 was released in April 2002. The U.S. Policy Committee is 
comprised of senior level Federal, State, and Tribal agencies. 
Stakeholder input was provided through public meetings across the basin 
in Duluth, Detroit, Chicago, and Niagara Falls, and via over 2,000 
comments from the public. The Strategy includes measurable, time phased 
objectives and over 120 supporting key actions that need to be carried 
out by the various partners, including 13 Federal agencies, eight Great 
Lakes States, and tribal authorities. We are now in the process of 
implementing the Strategy and tracking progress.

                             HUMAN CAPITAL

    Question 6. How is the EPA on the issue of human capital?
    Response. EPA has a strong tradition of supporting the people of 
the Agency (our ``human capital'') to insure we have the capability to 
fulfill our very challenging mission. With the release of the 
President's Management Agenda (PMA) and its strong emphasis on the 
strategic management of human capital, EPA took a fresh look at its 
human capital approach. Over the past couple of years, the Agency has 
conformed its human capital strategy to reflect the success criteria 
developed by the General Accounting Office, the Office of Personnel 
Management, and the Office of Management and Budget. As a result of 
EPA's dedication to human capital, the Agency has received ``green'' in 
6 out of 7 quarterly PMA status reviews with OPM and OMB. Just this 
quarter, EPA's overall status in Human Capital was elevated from 
``Red'' to ``Yellow,'' one quarter ahead of our planned schedule.

    Question 7. What percent of your workforce is eligible and expected 
to retire in the short term?
    Response. Over 27 percent of the EPA's workforce will be eligible 
for retirement by 2007. Approximately 54 percent of the Agency's SES 
will be eligible for retirement by 2007.
    In terms of expected retirements, there is general Federal-wide 
data suggesting that employees typically retire about 3 years after 
they become eligible (cite OPM). Whether employees eligible for 
voluntary retirement actually retire depends on circumstances such as 
the state of the economy, the number of children they have in college, 
second career opportunities, etc.

    Question 8. Will there be shortages in any particular job category, 
such as scientists? Is the workforce at EPA appropriate for the mission 
of the Agency?
    Response. Almost 26 percent of EPA's employees in the scientific/
technical and information technology job categories will be eligible to 
retire by 2007.
    Through the Agency's Strategic Workforce Planning effort, currently 
in progress, EPA will determine the magnitude of shortages in these job 
categories and will develop strategies for ensuring that EPA has the 
right skills in place to accomplish its mission.

    Question 9. Considering the reduction in funding for 
``Environmental Programs and Management,'' does the budget reflect your 
needs in this area?
    Response. The President's Budget fully funds our staffing needs. 
EPA expects to maintain current FTE levels through 2005.
                                 ______
                                 
 Responses by Michael O. Leavitt to Additional Questions from Senator 
                                 Wyden

                         8-HOUR OZONE STANDARD

    Question 1. Last year, EPA issued proposed regulations proposing to 
implement a new 8-hour standard for ozone with the intended repeal of 
the current 1-hour standard. I applaud your efforts to protect the 
health of American citizens with the new standard. I am, however, 
concerned about the potential affect that this new standard will have 
in Portland, Oregon where they have aggressively pursued measures to 
reduce vehicle, industry and area sources of emissions resulting in 
attainment of the 1-hour ozone standard in 1995. As I understand it, 
the Portland-Vancouver airshed is expected to be classified as an 
``Attainment'' area under the new 8-hour standard and as a result will 
face a reduction of Congestion Mitigation Air Quality funds (CMAQ).
    In actuality, the State and local governments must continue to 
implement measures to maintain compliance with the standard, including 
Transportation Control Measures (TCMs), to avoid backsliding into non-
attainment. As such it seems wrong to reduce CMAQ funds to former ozone 
nonattainment or maintenance areas under the 1-hour standard while 
other areas designated as ``Maintenance'' under the 8-hour standard 
won't face this loss of CMAQ funds. Can you work with my office to find 
an approach to avoid this reduction of CMAQ funds with this change in 
designation from ``Maintenance'' to ``Attainment?''
    As I understand it, the EPA proposed rule to implement the new 8-
hour standard calls for these areas being redesignated from 
``Maintenance'' under the old 1-hour standard to ``Attainment'' under 
the new 8-hour standard to submit a Maintenance Plan under Section 
110(a)(1) of the Clean Air Act. The Portland region supports the 
requirement to develop plans that ensure there is no backsliding that 
puts the health of their citizens in danger.
    If areas like the Portland-Vancouver region have the obligation to 
submit a Maintenance Plan under Section 110(a)(1), is this sufficient 
to retain their allocation of CMAQ funds based upon being a 
``Maintenance'' area for ozone?
    On September 5, 2003, the Oregon Department of Environmental 
Quality submitted comments to EPA Docket OAR 2003-0079 relating to the 
proposed regulatory text for the 8-hour ozone standard. In those 
comments, they recommended that EPA allow a local option to submit a 
streamlined Maintenance Plan under Section 110(a)(1) or a more rigorous 
Maintenance Plan under Section 175 A of the Clean Air Act. I understand 
that this more rigorous Maintenance
    Plan could require that the area establish an emission budget for 
vehicle emissions and a periodic conformity determination to ensure 
transportation plans and programs are implementing TCMs and are 
consistent with adopted vehicle emissions budgets. If this local option 
were provided, would that be sufficient to retain their allocation of 
CMAQ funds on the basis of being a ``Maintenance'' area for ozone?
    Response. To fully address your questions regarding Congestion 
Mitigation and Air Quality Improvement (CMAQ) program funding and the 
impact of an ``attainment'' designation for the Portland-Vancouver 
region under the 8-hour ozone standard, a number of issues require 
explanation. The following response addresses each of these issues in 
order to provide a comprehensive answer to your questions.
Actions taken by EPA to implement the 8-Hour Ozone Standard
    On April 15, 2004, the EPA is designated and classified geographic 
areas under the 8-hour ozone standard. At the same time, we also 
promulgated the air quality planning and emission control requirements 
for such areas. Concurrently, EPA will revoke the 1-hour ozone standard 
effective June 15, 2005. Revocation of the 1-hour ozone standard is 
necessary to prevent duplication of planning and implementation 
activities in a substantial number of areas that are violating both the 
1-hour and the 8-hour standards. Areas are designated under the 8-hour 
standard as:

    a. A non-attainment area under subpart 1 without a specific 
classification. These areas must implement basic control programs such 
as New Source Review and transportation conformity. Beyond the most 
basic requirements, subpart 1 areas have the most flexibility to design 
their own air pollution control program;
    b. A non-attainment area with a classification (marginal--extreme) 
under subpart 2. In addition to the basic requirements such as New 
Source Review and transportation conformity, classified areas have a 
prescribed set of control requirements from the Clean Air Act (CAA) 
that must be implemented. The set of requirements is commensurate to an 
area's classification i.e., the higher the classification, the more 
controls an area is required to implement; and,
    c. An attainment area. These areas are required to submit a 
streamlined maintenance plan for the 8-hour standard under section 
110(a)(1) of the CAA by June 2007. Note that no 1-hour nonattainment or 
maintenance areas are being re-designated from a non-attainment or 
maintenance area under the 1-hour standard to a maintenance area under 
the 8-hour standard.

The Effect EPA Actions Will Have on CMAQ Funding Eligibility and 
        Apportionment of Funds to the State
    The implementation of the 8-hour ozone standard and the revocation 
of the 1-hour ozone standard potentially can affect an area's CMAQ 
program. CMAQ investments have been channeled to areas that face the 
greatest air quality challenge through a statutory apportionment 
specified within the Transportation Equity Act for the 21st Century 
(TEA-21). This formula places greater emphasis on areas with the worst 
air quality by including increasing factors for classifications 
marginal through extreme, as well as a base factor for areas re-
designated to maintenance. The eligibility to fund transportation 
projects through the State's apportionment of CMAQ funds is based upon 
an areas' designation as a non-attainment area or maintenance area. 
TEA-21 allows that areas designated as non-attainment after December 
31, 1997 be eligible for CMAQ program funds. Thus, all areas designated 
non-attainment under the 8-hour ozone standard are eligible areas in 
which to expend CMAQ funds. Those areas designated non-attainment 
without a classification are eligible, but the State apportionment of 
CMAQ funds does not account for the non-attainment area because the 
apportionment formula is based on classifications. Those areas 
designated non-attainment with a classification are eligible and the 
State apportionment of CMAQ funds accounts for the area in accordance 
with the TEA-21 CMAQ apportionment formula.
    Those areas found to be in attainment of the 8-hour ozone standard, 
and required to submit an abbreviated maintenance plan to prevent air 
quality backsliding are not eligible. As noted above in response to 
your first question, among areas (both non-attainment and maintenance) 
where the 1-hour standard is being revoked, those areas that are 
attaining the 8-hour ozone standard will not be re-designated as 8-hour 
maintenance areas in the traditional sense because they were never non-
attainment for the 8-hour standard. On April 15, 2004, such areas were 
designated as attainment for the 8-hour standard with the only 
requirement being to adopt and submit a maintenance plan consistent 
with CAA section 110(a)(1). These abbreviated maintenance plans differ 
from a re-designation maintenance plan submitted under CAA section 
175(A), in that they provide more flexibility on implementation of 
local control measures and do not require the source permit program 
under CAA section 173 (New Source Review) or provisions for conformity 
with transportation plans under CAA section 176. Therefore, those areas 
found to be in attainment of the 8-hour ozone standard and required to 
submit an abbreviated maintenance plan to prevent air quality 
backsliding, are not eligible to receive CMAQ funds.

Options which exist for the Portland-Vancouver area to avoid a 
        reduction of CMAQ funds
    It is difficult to determine precisely, or even speculate as to the 
final effect implementation of the 8-hour ozone standard will have on 
the availability of CMAQ funds for the Portland-Vancouver area. If EPA 
redesignates an area to maintenance under Section 175A, including the 
statutory requirements carried in that section, that county would be 
factored into the CMAQ apportionment formula. Under the current law the 
Portland-Vancouver area is not eligible under the 8-hour ozone 
standard, as they were designated as attainment under such standard, 
and their maintenance plan will not be as the result of having been 
redesignated from nonattainment to attainment for the 8-hour standard 
with subsequent requirements under CAA section 175(A). Oregon will, 
however, receive the fiscal year 2005 CMAQ apportionment in October 
2004, prior to the revocation of the 1-hour ozone standard in June 
2005. Given this timing, Oregon's fiscal year 2005 CMAQ apportionment 
will still reflect the TEA-21 apportionment factor for 1-hour ozone 
maintenance areas. Under the current CMAQ program, Portland-Vancouver 
shouldn't be impacted until the fiscal year 2006 apportionments are 
made in October 2005. It is important to note that EPA does not have 
the authority to make any changes to the CMAQ program. The authority 
and criteria for the CMAQ program is provided for in TEA-21 and is 
administered by the Federal Highway Administration (FHWA) and the 
Federal Transit Administration. The Department of Transportation (DOT) 
is discussing options for a limited continuation of CMAQ funding during 
this transitional period between the two ozone standards.
    As you know, reauthorization of TEA-21 is currently taking place in 
Congress and the impact of the 8-hour ozone standard is being 
considered. The Administration's proposal for reauthorization addressed 
these issues and the DOT has been providing technical support to 
congressional staff in an effort to balance the need for CMAQ funding 
in 8-hour non-attainment areas and former 1-hour non-attainment and 
maintenance areas. EPA has worked with DOT to identify the need for 
CMAQ funds in terms of geographic scope and emission reductions from 
the transportation sector. We support the use of CMAQ funds for 
transportation projects that produce substantial emission benefits in 
areas that must improve air quality. However, given the current law, we 
must look to Congress to make changes to the CMAQ program to balance 
the need with available funds.

                                 
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