    [Senate Hearing 108-502]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 108-502

    IMPLEMENTATION OF THE NEW AIR QUALITY STANDARDS FOR PARTICULATE MATTER
                                   AND OZONE

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

                                    HEARING

                                   before the

         SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE, AND NUCLEAR SAFETY

                                     of the

                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                          ONE HUNDRED EIGHTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 APRIL 1, 2004

                                   __________

      Printed for the use of the 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
                                     ------

         Subcommittee on Clean Air, Climate Change, and Nuclear Safety

                      GEORGE V. VOINOVICH, Ohio, Chairman
    MICHAEL D. CRAPO, Idaho              THOMAS R. CARPER, Delaware
    CHRISTOPHER S. BOND, Missouri        JOSEPH I. LIEBERMAN, Connecticut
    JOHN CORNYN, Texas                   HARRY REID, Nevada
    CRAIG THOMAS, Wyoming                HILLARY RODHAM CLINTON, New York

                                C O N T E N T S

                                  ----------
                                                                       Page

                                 APRIL 1, 2004
                               OPENING STATEMENTS

    Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..    17
    Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New
      York...........................................................    26
    Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     9
    Jeffords, Hon. James M., U.S. Senator from the State of Vermont..    11
    Lieberman, Hon. Joseph I., U.S. Senator from the State of
      Connecticut....................................................     6
    Voinovich, Hon. George V., U.S. Senator from the State of Ohio...     1

                                   WITNESSES

    Eckels, Robert, County Judge, Harris County, TX..................    37
        Prepared statement...........................................   175
    Fisher, Michael, president, Greater Cincinnati Chamber of
      Commerce.......................................................    41
        Prepared statement...........................................   177
    Leavitt, Michael O., Administrator, Environmental Protection
      Agency.........................................................    15
        Prepared statement...........................................    51
        Responses to additional questions from:
            Senator Carper...........................................    69
            Senator Inhofe...........................................    60
            Senator Jeffords........................................102-174
            Senator Lieberman........................................   100
            Senator Voinovich........................................    65
    Thurston, George D., New York University School of Medicine,
      Department of Environmental Medicine...........................    39
        Prepared statement...........................................   180

                              ADDITIONAL MATERIAL

    History of the Delays--Milestones in the Particulate Mater and
      Ozone NAAQS Reviews............................................    13
    Letter, from Christopher Jones, director, Ohio EPA to Thomas V.
      Skinner, Regional Administrator, U.S. EPA, Region V............    18
    Statements:
        American Lung Association....................................   195
        Baroody, Michael E., executive vice president, on behalf of
          the National Association of Manufacturers..................   208
        Office of Research and Development, National Risk Management
          Research Laboratory, U.S. Environmental Protection Agency,
          Air Pollution Prevention and Control Division, Research
          Triangle Park, NC..........................................   185
        Stec, Robert, chairman and CEO, Lexington Home Brands,
          Lexington, NC, on behalf of the American Furniture
          Manufacturers Association (AFMA)...........................   206

    IMPLEMENTATION OF THE NEW AIR QUALITY STANDARDS FOR PARTICULATE MATTER
                                   AND OZONE

                                  ----------

                            THURSDAY, APRIL 1, 2004

                                   U.S. Senate,
             Committee on Environment and Public Works,
        Subcommittee on Clean Air, Climate Change, and Nuclear
                                                        Safety,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 9:38 a.m., in
    room 406, Senate Dirksen Building, Hon. George V. Voinovich
    (chairman of the subcommittee) presiding.
        Present: Senators Voinovich, Lieberman, Thomas, Carper,
    Clinton, Jeffords [ex officio] and Inhofe [ex officio].

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

        Senator Voinovich. The hearing will come to order.
        I want to thank all of you for coming. We are here today to
    conduct oversight on the implementation of the new air quality
    standards for particulate matter and ozone.
        The Clean Air Act requires the Environmental Protection
    Agency to establish National Ambient Air Quality Standards and
    assigns primary responsibility to the States to assure
    compliance with them. The NAAQS are set without consideration
    of costs to protect public health and welfare with an adequate
    margin of safety. Areas not meeting the standards are referred
    to as non-attainment areas and are required to implement
    specified air pollution control measures.
        EPA is required to review the scientific data every 5 years
    and revise the standards, if appropriate. In 1997, EPA set a
    new, more stringent 8-hour ozone standard and a fine
    particulate standard of 2.5 ppm. This year EPA will finalize
    designations and implementation rules for both standards.
        It is very important for us to put the standards in
    context. Our air is not getting dirtier, on the contrary, our
    air is significantly cleaner. I remember well when the Clean
    Air Act was enacted in 1970. I was a member of the Ohio House
    of Representatives and was working on legislation to create the
    Ohio Environmental Protection Agency. Since 1970, while gross
    domestic product has increased by 164 percent, vehicle miles
    traveled has increased by 155 percent, energy consumption by 42
    percent and population by 38 percent. Emissions of the six
    criteria plants have been reduced by 48 percent. This success
    in improving our environment is simply not told enough. Air
    quality standards are an important part of the story. We still
    need to do a lot more.
        I have been intimately involved with improving air quality
    throughout my 37-year public career. As Governor, I was very
    concerned with my responsibilities to the environment and
    believe strongly that we needed to do a better job in reducing
    emissions to improve the environment and protect public health.
    We worked to more than double the Ohio's EPA budget from $69
    million in 1991 to over $149 million in 1998.
        I am very familiar as the Administrator is with the
    difficult decisions that must be made to bring States and
    counties into attainment. When I began my term as Governor, 28
    of Ohio's 88 counties were in non-attainment for ozone. We
    worked with the State legislature to create a situation where
    American Electric Power could install scrubbers costing $616
    million to reduce sulfur dioxide emissions at one of this
    country's largest coal-fired facilities.
        As part of bringing the State into compliance we chose to
    implement it an automobile emissions testing program called E-
    Check because it made the most sense from a cost-benefit point
    of view. This program wasn't popular with the Ohio General
    Assembly and with the people of Ohio. As a matter of fact, the
    General Assembly passed a bill to remove the E-Check Program
    which I vetoed and the legislature chose not to override that
    veto.
        Furthermore, we implemented regulations to capture vapors
    when motorists fueled their cars, required controls on
    industrial sources and pushed to get a 15 percent reduction in
    emission in each non-attainment area. Due to the success of
    these efforts air toxins in my State were reduced significantly
    from about 381 million pounds to 144 million pounds in several
    years. Since the 1970's, Ohio levels of carbon monoxide have
    been reduced by more than 70 percent, sulfur dioxide by 90
    percent, lead by 95 percent and ozone by 27 percent.
        While all Ohio counties meet air quality standards, these
    improvements have not been without cost. Over the last 10
    years, Ohio has spent more on emissions reductions than New
    York, New Jersey, Massachusetts, Connecticut, Vermont, Rhode
    Island, Maine, New Hampshire, Maryland, Delaware and
    Washington, DC. combined. All of them combined is what we spent
    on our utilities.
        The cost of attaining these new air quality standards for
    particulate matter and ozone is going to be more costly. This
    chart shows all the counties that were exceeding the new air
    quality standards over the 2000-2002 period. Although you may
    like the colors, this isn't a pretty picture. Yellow is for
    those counties not meeting the ozone standard, orange for
    PM2.5, and red for both. The red shows all of the
    counties in this country that are not meeting either the ozone
    or particulate standard.
        When surrounding counties are added, the number of non-
    attainment counties in the country is likely to be over 500 for
    the 8-hour ozone standard and over 200 for PM2.5.
    This is no April Fool's Day joke, these standards are going to
    cast a wet blanket over some parts of our Nation. When EPA
    proposed the new standards in 1997, the agency estimated that
    bringing all areas into attainment with standards by the year
    2010 would cost $46 billion annually. Another analysis claims
    significant job losses.
        The projected impact of these standards has caused a great
    deal of concern in non-attainment counties that will cause the
    loss of jobs, restrict economic growth, discourage plant
    location and encourage manufacturers to move overseas. As was
    highlighted last week during the natural gas hearing which the
    chairman held, our manufacturers and businesses are in grave
    trouble today and are unable to compete in the global
    marketplace.
        During the 1990's, we were able to bring new businesses to
    my State. For 3 consecutive years, Ohio was No. 1 in Site
    Selection Magazine's highly coveted Governor's Cup. While this
    is good news, the question is whether we can keep these
    businesses and attract more. When I look at this chart, I am
    not sure. This is a map of the projected non-attainment
    counties in Ohio. Right now business owners are looking at the
    same map and thinking twice about moving operations to or
    expanding existing plants in our State. This is happening right
    now.
        Unfortunately the story gets worse before it gets better.
    This chart shows all the different clean air regulations that
    States, localities and businesses are going to have to deal
    with over the next decade. We are only at the beginning of this
    uncertain mess. This is what we are confronted with today in
    this country because of all of the various kinds of rules and
    regulations that have been set by the Environmental Protection
    Agency.
        Additionally, as a result, our courtrooms are being
    cluttered with lawsuits by environmental and industry groups,
    we have not made the progress we could to improve our
    environment and protect public health. My theory is that
    because of the mess we have today, we are not doing as good a
    job in cleaning up the environment and we are not providing
    energy in the most efficient way possible in this country.
        That is why, in my opinion, the Clear Skies Act, which I
    sponsored and co-sponsored with several members of this
    committee, is needed. It presents a very clear path forward on
    where we are going and when and provides the flexibility needed
    to get there. It cleans up the regulatory mess and greatly
    helps States and localities bring counties into attainment and
    provides the certainty needed to make significant environmental
    benefits.
        Chart 5 shows the benefit of Clear Skies in terms of
    meeting air quality standards. This is really significant. By
    2010, EPA estimates this legislation would bring 42 additional
    counties and 14 million people into attainment for PM2.5
    and sooner than under existing programs. So we are going to go
    from this situation to this situation if we could get Clear
    Skies passed in this country. This is the President's major
    initiative in cleaning up the environment in this country.
    Under Clear Skies, more than 20 million additional people would
    be breathing air that meets the national standard by 2020.
        There is no doubt that we can and should do more to improve
    our air quality. While bringing counties across the Nation into
    attainment for the air quality standards, we are going to make
    some progress. It would be very costly and cumbersome if we do
    not approach them carefully. The Clear Skies Act will get
    cleaner air faster and reduce the negative impact of the new
    standards. We need this legislation to help States and
    localities deal with these standards. We need this legislation
    to provide certainty and keep jobs in this country. We need
    this legislation to dramatically improve our environment. While
    Clear Skies is needed, the provisions in EPA's implementation
    rules will have a significant effect.
        I look forward to hearing from our witnesses today on how
    these standards can be implemented in a way that maximizes
    cleaning up the environment and protecting public health, and
    minimizes the impact on jobs in other localities and States
    across this Nation.
        I remind my colleagues and the witnesses that this hearing
    is not about the standards themselves. The battle of standards,
    folks, is over. Now the question is how do we go about
    implementing them in the best way possible.
        [The prepared statement of Senator Voinovich follows:]

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

        The hearing will come to order. Good morning and thank you all for
    coming. We are here today to conduct oversight on the implementation of
    the new air quality standards for particulate matter and ozone.
        The Clean Air Act requires EPA to establish National Ambient Air
    Quality Standards (NAAQS) and assigns primary responsibility to the
    states to assure compliance with them. The standards are set without
    consideration of costs to protect public health and welfare with an
    adequate margin of safety. Areas not meeting the standards are
    designated as nonattainment and are required to implement specified air
    pollution control measures.
        EPA is required to review the scientific data every 5 years and
    revise the standards, if appropriate. In 1997, EPA set a new more
    stringent 8-hour ozone standard and a fine particulate standard--or
    PM2.5. This year, EPA will finalize designations and
    implementation rules for both standards.
        It is very important for us to put these standards in context. Our
    air is not getting dirtier. On the contrary, our air is significantly
    cleaner.
        I remember well when the Clean Air Act was enacted in 1970. I was a
    member of the Ohio House of Representatives and was working on
    legislation to create the Ohio EPA. Since 1970--while Gross Domestic
    Product has increased by 164 percent, vehicle miles traveled by 155
    percent, energy consumption by 42 percent, and population by 38
    percent--emissions of the six criteria plants have been reduced by 48
    percent.
        This success in improving our environment is simply not told
    enough, and air quality standards are an important part of this story.
    Still, we need to do more.
        I have been intimately involved with improving air quality
    throughout my 37-year public career. As Governor, I was very concerned
    with my responsibilities to the environment and believed strongly that
    we needed to do a better job in reducing emissions to improve the
    environment and protect public health. We worked to more than double
    Ohio EPA's budget from $69 million in 1991 to $149 million in 1998.
        I am very familiar with the difficult decisions that must be made
    by a State to bring counties into attainment. When I began my term as
    Governor, 28 out of Ohio's 88 counties were in non-attainment for
    ozone. We worked with the state legislature to create a situation where
    American Electric Power could install scrubbers costing $616 million
    dollars to reduce sulfur dioxide emissions at one of the largest coal-
    fired power plants in the country.
        As part of bringing the State into compliance with the NAAQS, we
    chose to implement an automobile emissions testing program--called E-
    check--because it made the most sense from a cost-benefit standpoint.
    This program was not popular and Ohio's General Assembly passed a bill
    to remove the program. I vetoed this bill because I understood the
    importance of programs such as this to meet the air quality standards.
        Furthermore, we implemented regulations to capture vapors when
    motorists fuel their cars, required controls on industrial sources, and
    pushed to get a 15 percent reduction in emissions in each non-
    attainment area.
        Due to the success of these efforts, air toxins in Ohio have been
    reduced significantly from approximately 381 million pounds in 1987 to
    144 million pounds in 1996. Since the 1970's, Ohio levels of carbon
    monoxide have been reduced by more than 70 percent, sulfur dioxide by
    90 percent, lead by 95 percent, and ozone by 27 percent.
        While all of Ohio now meets the air quality standards, these
    improvements have not been without cost. Over the last 10 years, Ohio
    has spent more on emissions reductions than New York, New Jersey,
    Massachusetts, Connecticut, Vermont, Rhode Island, Maine, New
    Hampshire, Maryland, Delaware, and Washington, DC combined.
        And the costs of attaining the new air quality standards for
    particulate matter and ozone will be even more costly. This chart shows
    all of the counties that were exceeding the new air quality standards
    over the 2000 to 2002 period. Although you may like the colors, this is
    not a pretty picture--yellow is for those counties not meeting the
    ozone standard, orange for PM2.5, and red for both. When
    surrounding counties are added, the number of non-attainment counties
    in the country is likely to be over 500 for the 8-hour ozone standard
    and over 200 for PM2.5.
        This is no April Fool's Day joke, these standards are a wet blanket
    on the Nation. When EPA proposed the new standards in 1997, the Agency
    estimated that bringing all areas of the country into attainment with
    the standards by the year 2010 would cost about $46 billion annually
    and other analyses claimed significant job losses.
        The projected impact of these standards has caused a great deal of
    concern in non-attainment counties that they will cause the loss of
    jobs, restrict economic growth, discourage plant location, and
    encourage manufacturers to move overseas.
        As was highlighted last week during the natural gas hearing, our
    manufacturers and businesses cannot absorb any more costs and still
    compete globally.
        During the 1990's, we were able to bring new businesses to Ohio.
    For three consecutive years, starting in 1993, Ohio won Site Selection
    Magazine's highly coveted Governor's Cup, which recognizes the state in
    which the most new or expanded plant activity took place.
        While this is the good news, the question is whether we can keep
    these businesses and attract more? When I look at this chart, I am not
    so sure. This is a map of the projected non-attainment counties in
    Ohio. Right now, business owners are looking at this same map and
    thinking twice about moving operations to or expanding existing plants
    in Ohio.
        Unfortunately, this story gets worse before it gets better. This
    chart shows all of the different Clean Air Act regulations that states,
    localities, and businesses are going to have to deal with over the next
    decade. We are only at the beginning of this uncertain mess.
        Additionally, as a result of our courtrooms being cluttered up with
    lawsuits by environmental and industry groups, we have not made the
    progress that we could to improve our environment and protect public
    health.
        That is why the Clear Skies Act is so desperately needed. It
    presents a very clear path forward on where we are going and when, and
    provides the flexibility needed to get there. It cleans up the
    regulatory mess, greatly helps States and localities bring counties
    into attainment, and provides the certainty needed to make significant
    environmental benefits.
        This chart clearly shows the benefit of Clear Skies in terms of
    meeting the air quality standards. By 2010, EPA estimates that this
    legislation would bring 42 additional counties with 14 million people
    into attainment for the PM2.5 standards sooner than under
    existing programs. Under Clear Skies, more than 20 million additional
    people would be breathing air that meets the national standards by
    2020.
        There is no doubt that we can and should do more to improve our air
    quality. While bringing these counties across the Nation into
    attainment for the air quality standards will make great progress, it
    could be very costly and cumbersome if we do not approach them
    carefully. The Clear Skies Act will get clean air faster and reduce the
    negative impact of the new standards.
        We need this legislation to help States and localities deal with
    these standards. We need this legislation to provide certainty and keep
    jobs in this country. We need this legislation to dramatically improve
    our environment.
        While Clear Skies is needed, the provisions in EPA's implementation
    rules will have significant effect. I look forward to hearing from our
    witnesses today on how these standards can be implemented in a way that
    maximizes cleaning up the environment and protecting public health and
    minimizes the impact on states and localities across the Nation.
        I remind my colleagues and the witnesses that this hearing is not
    about the standards themselves. The battle on the standards has already
    been fought, and we will not be re-litigating them here today. They are
    what they are and counties across the country will need to meet them.
        Thank you.

        Senator Voinovich. I would now like to call on the chairman
    of our committee, Senator Inhofe. I am sorry, our Ranking
    Member is here.
        Joe.

      OPENING STATEMENT OF HON. JOSEPH I. LIEBERMAN, U.S. SENATOR
                     FROM THE STATE OF CONNECTICUT

        Senator Lieberman. Where was I? The air was clean enough
    for me to know exactly where I was, so I thank you. It is good
    to be back.
        Welcome, Administrator Leavitt.
        I was thinking as I was listening to the Chairman's opening
    statement that in the 15 years I have been privileged to be a
    member of the U.S. Senate, one of the most productive
    experiences I have had, which is to say one of the most
    satisfying that created really good results was the work that
    was done in 1990 on the Clean Air Act Amendments under former
    President Bush and Senator George Mitchell, a very bipartisan
    experience. Contentious, difficult, but ultimately produced
    real progress. Obviously the proof of a law is in its
    implementing and I do want to say what Senator Voinovich has
    said is true, that the air is cleaner today. It is one of the
    great successes of our government over the last decades.
    Programs has been made both in clean air and in clean water.
        Clearly problems continue to persist as Senator Voinovich
    has also said. We are going to need exactly the same kind of
    bipartisan cooperation and leadership that brought forth the
    Clean Air Act amendments of 1990 to reach the goals and
    implement the standards that we want. The fact is that
    thousands of Americans are still dying prematurely because of
    the impacts of particulate matter. That is an extreme
    articulation of the statement but all the public health studies
    show that is true.
        I can tell you that in Connecticut, my home State, a recent
    study found that over 40 percent of the children in Hartford
    have been diagnosed with asthma which is now a disease that has
    been linked to air pollution by peer-reviewed studies. It is
    through the implementation of the Clean Air Act that we are
    going to continue to do better and better and protect the
    health of the American people and the beauty of our natural
    environment.
        As has been said, I know the EPA will soon release the
    color map showing which areas of America do and do not comply
    with the Clean Air Act and when it does, it is clear that large
    swathes of our country including I expect the entire State of
    Connecticut, will be, if I can put it this way, in the black as
    in polluted, not as in profitable, unfortunately. We have to do
    better. That says it all.
        I want to comment on a few of the challenges ahead of us.
    First, with regard to NOx and SOx, the Administration's
    proposed NOx and SOx rules I think are real steps forward. I am
    troubled, however, about the two-phased implementation, 2010
    and 2015. The reason given, which is there are not enough
    boilermakers to build the pollution control equipment, that
    seems to be a significant reason given. However, in October
    2002, the EPA issued a report saying there were plenty of
    workers to build the needed equipment and I, therefore, urge
    the Administrator to talk this morning to that factor.
        Another clear and present environmental danger comes from
    mercury. We have fallen far short in our efforts to limit toxic
    mercury emissions. This now has been shown to cause
    developmental problems with children, 1 in 12 women of child-
    bearing age have shown dangerous levels of mercury in their
    blood. Public Health agencies in 43 States, as you know,
    Administrator Leavitt, have issued formal advisories warning
    people against eating certain kinds of fish because of mercury
    contamination. In Connecticut, every fish taken from every lake
    and stream in our State have such a warning attached to them.
        Greater mercury reductions are both technologically and I
    believe politically feasible. In Connecticut, on the last
    point, legislators on a bipartisan basis worked with industry
    and environmental groups to agree on a consensus proposal that
    would result in an 85-90 percent reduction in mercury emissions
    from all coal plants. Here I am concerned that rather than
    pushing forward on mercury reductions, the EPA is rolling back
    and appears to have retreated from its plans to require strict
    mercury reductions by 2007 and instead proposing a rule that
    would require no reductions that would not result without the
    rule until 2018. We can and must do better than that. That is
    why I was happy to join 44 of my colleagues in a letter that
    will be released today by Senator Leahy which asks EPA and
    Administrator Leavitt to withdraw the proposed mercury rule
    package and repropose a rule that better protects the public
    health and the environment.
        Next, global warming, a third challenge on which I believe
    we cannot procrastinate. Last week, expert witnesses at a
    hearing of the Commerce Committee described the devastating
    effects of global warming on coral reefs, wildlife and arctic
    animals and tribes. One of the most riveting stories told is
    that robins have appeared in Native American Alaskan villages,
    some of the tribes having a history of 10,000 years and their
    vocabulary has no word for robin because they have never seen
    one before. So talk about the canary in the coal mine, this is
    a robin in a normally cold and inhospitable Alaskan village
    which is a warning to us.
        Senator McCain and I have put forth what we believe is a
    practical progressive program to tackle this threat. Joined
    this week in the spirit of my opening remarks by 20 members of
    the House of Representatives, 10 Republicans, 10 Democrats who
    have introduced similar legislation. It is critically necessary
    for us to work together to deal with CO2 emissions.
        I have a final concern, Administrator, that I wanted to
    address to you that I hope you will be able to speak to this
    morning which is the concern that EPA is thinking of backing
    off on the court-mandated rule to reduce air pollution that
    hampers visibility in our parks, called the BART rule for Best
    Available Retrofit Technology. The rule as you know was
    required by the 1977 Clean Air Act but it has not been
    promulgated due to continuous delay in litigation. Here again,
    there is bipartisan interest in this. A former colleague,
    Senator Fred Thompson, was particularly active in pursuit of
    this and I hope you will reassure us that the efforts of EPA to
    clean up the air around our national parks will continue.
        Mr. Administrator, in a speech that I was happy to read and
    that you recently gave, you observed that no one should see
    society's interest in environmental improvement as a fad. I
    agree, you are exactly right. No one should view what people
    think about and worry about their health and the world that we
    leave to our children and grandchildren as a fad. That is
    exactly the policy and political challenge each of us must rise
    above and beyond party lines to work together to leave our
    children and grandchildren a world that is as great as the one
    we found but also as safe for their health.
        I thank you for being here today and I look forward to your
    testimony.
        [The prepared statement of Senator Lieberman follows:]

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

        Thank you, Mr. Chairman, and welcome Administrator Leavitt.
        Mr. Administrator, one of my best moments since I came to the
    Senate was the passage of the 1990 Clean Air Act. We worked hard on
    that bill, during the first Bush administration, to come up with a bill
    that worked. The test of that bill is now in its implementation.
        We need that kind of bipartisan leadership now in tackling our
    pressing environmental challenges. No area of the environment requires
    more attention than air pollution. Thousands of Americans are dying
    prematurely from the impacts of particulate matter released by power
    plants. In my home state of Connecticut, a recent study found that over
    40 percent of children in inner-city Hartford have been diagnosed with
    asthma a disease that has now been linked to air pollution by peer-
    reviewed studies.
        I am glad the Clean Air Act is at work to require progress on these
    measures. I am concerned, however, that we are not doing enough,
    quickly enough. The EPA will soon release the color maps showing which
    areas do not comply with the Clean Air Act and when it does, I have no
    doubt that swaths of our country--including the entire State of
    Connecticut--will be in the black, as in polluted. We must do better.
        That Administration's proposed NOx and SOx rules are a step
    forward. But I am concerned about the fact that they would cut
    emissions in two phases one by 2010, the other by 2015. The reason? Not
    enough boilermakers to build the pollution control equipment. But in
    October 2002, the EPA issued a report that there were plenty of workers
    to build the needed equipment. The phase-in looks more like an
    unjustified break for polluters than a breakdown in boilermaking.
        Another immediate environmental challenge we must confront now is
    mercury. We have fallen far short in our efforts to limit toxic mercury
    emissions from power plants. Mercury has been proven to cause
    development problems with children and 1 in 12 women of childbearing
    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 because of mercury
    contamination. In my State of Connecticut, every single lake and stream
    has such a warning.
        Greater mercury 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.
        But rather than pushing forward on mercury reductions, the EPA is
    rolling back. It appears to have retreated from its plans 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. That's why I was proud today to
    join 44 of my colleagues in asking the EPA to do just that.
        Global warming is a third challenge we cannot procrastinate on.
    Last week, expert witnesses at a hearing Commerce Committee described
    the devastating effects from global warming on coral reefs, wildlife,
    and Arctic animals and tribes. Despite the mounting evidence, we are
    doing next to nothing to reduce our ever-increasing greenhouse gas
    emissions.
        Senator McCain and I have put forth a practical program to tackle
    this threat. Where there is a will, there is a way. If we work together
    to address this problem in a serious, bipartisan way, we can send a
    powerful signal to the Nation's investors and innovators to develop the
    long-term solution to our global warming problem.
        Finally, I am concerned that the EPA is thinking of backing off on
    the court-mandated rule to reduce air pollution that hampers visibility
    in parks--called the BART rule for Best Available Retrofit Technology--
    in order to allow the Administration's Interstate Air Quality Rule
    (IAQR) to go forward. The BART rule was required by the 1977 Clean Air
    Act, but has not been promulgated due to continuous delay and
    litigation. It is slated to be released on April 15, but I am fearful
    that they are continuing putting it into repose until after the IAQR is
    fully implemented in 2018.
        Administrator Leavitt, in a speech you recently gave, you observed
    that no one should see society's interest in 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. That is the policy and political challenge we
    must rise to together or we and our children will suffer together.
    Thank you.

        Senator Voinovich. Senator Inhofe.

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

        Senator Inhofe. Thank you, Mr. Chairman. I appreciate your
    holding this hearing. It is on a topic of great interest to a
    lot of locations around the country, including my State of
    Oklahoma.
        As an initial observation, I would like to ask your staff
    to put this up again. I don't think people have really paid
    attention to what has been happening. Since 1970 up to 2 years
    ago, the gross domestic product going up 164 percent, vehicle
    miles traveled, 155 percent, energy consumption $2 percent,
    U.S. population increased 38 percent and yet the aggregate
    emissions down 48 percent. You don't see a success story like
    that very often. Certainly there are people who talk about that
    and they should. I think everywhere we go we need to carry that
    with us and show people that good things are happening, in
    spite of what they might hear to the contrary.
        In the first 2 years of the Bush administration, the two
    major pollutants declined dramatically. Nitrogen oxide has gone
    down by 13 percent and sulfur dioxide has gone done by 9
    percent. As Senator Lieberman said, the Clear Skies Initiative
    is the most aggressive reduction mandate in the history of this
    country of any President. I think people need to realize that.
        The reason these areas will be designated non-attainment is
    that new health standards were developed that require lower
    ambient concentrations of pollution for public health reasons.
    Whether someone believes these standards have been set too low
    or two high is irrelevant for the purpose of this hearing.
    Unfortunately, many jobs will be lost unnecessarily. Mr.
    Chairman you have probably been the champion of that concept
    stating it every opportunity you get.
        In the mid-1990's, I pushed for the EPA Administrator to
    identify and regulate the particles that are most harmful,
    known as speciation. Yet Administrator Browner utterly failed
    to take action. The communities across the country will suffer
    for it. Fewer jobs would be exported overseas if Administrator
    Browner had focused on harmful pollutants and didn't penalize
    communities whose emissions may be largely innocuous.
        I want to make clear to Administrator Leavitt that I remain
    committed to correcting this flaw and look forward to EPA
    addressing it. The simple fact is communities will be required
    to meet these standards and it is important that they do so
    with the fewest lost jobs possible. We need to recognize that
    implementing these standards will cost jobs.
        Businesses and areas designated as non-attainment face
    higher costs simply to do business. As Mr. Fisher noted in his
    written testimony, obtaining an air permit in a non-attainment
    area is so complex, businesses are advised to hire consultants.
    That may be easy for some of the large corporations, but it is
    very difficult, if not impossible, for some of the smaller
    businesses to do.
        With restrictions on existing businesses and extra burdens
    new manufacturers would face, these new standards could be a
    significant factor in whether these areas continue to grow and
    could even result in jobs exported overseas. It is for this
    reason that these standards be implemented in a rational way.
    It is critical that areas be given flexibility to meet the
    standard and that the implementation be coordinated with the
    expected benefits from other regulatory measures. In that vein,
    it is critical that designates properly account for the areas
    of the country that entered into early action compacts to meet
    their clean air requirements and thus ensure the implementation
    of standards and avoids yet again introducing uncertainty into
    the planning process and unnecessary costs.
        I want to comment to the EPA in its proposal for trying to
    build in some flexibility. We need the flexibility and it is
    directly related to jobs.
        Let me make one comment about my distinguished colleague,
    Senator Lieberman's comments on global warming. The first thing
    that I said over a year ago when I became Chairman of this
    committee was the one thing I wanted was to base our decisions
    on sound science. At that time, people were thinking that there
    was no science that would contradict this whole concept of
    global warming. However, since 1999, virtually every new
    scientific finding has refuted the whole concept, No. 1, that
    androgenic or man-made gases either CO2, methane,
    cause climate change and No. 2, that it is changing at all. It
    is not just me saying this. Certainly I am not anymore
    qualified than anyone else at this table to make these
    judgments. We have to rely on the scientists and when you read
    the accord signed by some 4,000 scientists that refuted this,
    you had to stop and think. Look at the economic consequences
    should we adopt something such as signing onto a Kyoto-like
    treaty when the Horton Econometrics Survey said if we did this,
    it would cost 1.4 million jobs, it would double the cost of
    energy, it would increase your gasoline by 65 cents a gallon,
    it would cost the average family of ours $2,700 a year. That is
    huge, Mr. Chairman. I think before jumping into something that
    is not scientifically based, we need to keep in mind that our
    job is to use good science and to consider all the factors and
    not just follow some fad, and that is exactly what we have been
    doing.
        I look forward to your testimony, Administrator Leavitt and
    forward to pursuing this subject.
        Senator Voinovich. Thank you, Mr. Chairman.
        [The prepared statement of Senator Inhofe follows:]

             Statement of Hon. James M. Inhofe, U.S. Senator from
                             the State of Oklahoma

        Thank you Mr. Chairman, for holding this hearing on a topic of
    great interest to a great many localities across the Nation. A great
    number of communities that have been fully in compliance with the Clean
    Air Act are soon to be designated as being in nonattainment with the
    new, far more stringent standards being implemented.
        As an initial observation, I want to reassure the public that this
    does not mean our nation's air quality is deteriorating. In fact, the
    opposite is occurring. As this chart shows, from 1970 to 2002, our
    Gross Domestic Product and vehicle miles traveled both more than
    tripled and energy consumption and population increased about 40
    percent, yet the pollution in this country was literally cut in half.
    And that improvement has continued under the helm of President Bush
    although national environment groups rarely admit this inconvenient
    fact.
        In the first 2 years of President Bush's first term, the two most
    major pollutants declined dramatically, with nitrogen oxides going down
    by 13 percent and sulfur dioxide going down by 9 percent--and I suspect
    that when the data is compiled, they will show further declines last
    year. And President Bush has proposed legislation that will reduce the
    utility sector's emissions of these pollutants by another 70 percent,
    the biggest emission reduction initiative ever proposed by an American
    President.
        The reason these areas will be designated nonattainment is that new
    health standards were developed that require lower ambient
    concentrations of pollution for public health reasons. Whether someone
    believes these standards have been set too low or too high is
    irrelevant for purposes of this hearing.
        Unfortunately, many of these jobs will be lost unnecessarily. In
    the mid-90's, I pushed then-EPA Administrator to identify and regulate
    the particles that are the most harmful--known as speciation. Yet
    Browner utterly failed to take action. And the communities across the
    country will suffer for it. Fewer jobs would be exported overseas if
    Browner had focused on harmful particulates and didn't penalize
    communities whose emissions may be largely innocuous. I want to make
    clear to Administrator Leavitt that I remain committed to correcting
    this flaw and expect EPA to revise its standards to target harmful
    particles.
        The simple fact is that communities will be required to meet these
    standards and it is important that they do so with the fewest lost jobs
    possible. And we need to recognize that implementing these standards
    will cost jobs. Businesses in areas designated as nonattainment face
    higher costs simply to do business. As Mr. Fisher noted in his written
    testimony, obtaining an air permit in a nonattaiment area is so
    complex, businesses are advised to hire consultants. That may be
    business as usual for a large company, but it's a luxury many small
    businesses simply cannot afford.
        With restrictions on existing businesses and the extra burdens new
    manufacturers would face, these new standards could be a significant
    factor in whether these areas continue to grow. And could even result
    in jobs exported overseas.
        It is for this reason that these standards be implemented in a
    rational way. It is critical that areas be given flexibility to meet
    the standard and that the implementation be coordinated with the
    expected benefits from other regulatory measures. In that vein, it is
    critical the designations properly account for the areas of the country
    that entered into early action compacts to meet their clean air
    requirements and thus ensure the implementation of the standards avoids
    yet again introducing uncertainty into the planning process and
    unnecessary costs.
        I want to commend EPA in its proposal for trying to build in some
    flexibility into the way the Act is implemented regarding general non-
    attainment requirements versus more prescriptive measures.
        I look forward to your testimony, Administrator Leavitt.

        Senator Voinovich. Senator Jeffords.

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

        Senator Jeffords. Thank you, Mr. Chairman.
        This hearing is very important and timely. The
    implementation of our Nation's ambient air quality standards of
    NAAQS and the Clean Air Act in general is a matter of life and
    death. Approximately 70,000 Americans die prematurely every
    year as a result of air pollution according to researchers at
    Harvard University. The main cause of these deaths is fine
    particulate matter, also known as PM2.5. The bulk of
    this pollution comes from power plants, diesel fuel combustion
    and elsewhere. Ozone is a serious lung irritant that can
    trigger asthma or even cause it and has recently been linked to
    birth defects.
        If the country was achieving the 8-hour ozone standard, we
    could prevent nearly 400,000 asthma attacks, 5,000 hospital
    admissions and about 600,000 lost school days each year.
    Unfortunately, the trend on ozone pollution has been going the
    wrong way for the last few years according to EPA's 2002 Trends
    report. Concentrations will increase as population grows and
    the average temperature rises, and 200 million Americans have
    an increased risk of cancer, reproductive dysfunction,
    developmental problems and other health effects do to air
    toxics exposure.
        What has the Administration's response been to these
    troubling facts? To issue rules to guide the new source review,
    NSR Program, so that large polluting sources could be exempt
    from applying modern pollution controls permanently. This
    exemption would condemn thousands of people to earlier death
    every year in delayed attainment, to halt or slow down
    investigations in the enforcement of NSR requirements, not to
    mention obstructing congressional oversight, to propose power
    plant reductions that are too little and too late to help areas
    achieve attainment of the standards or to obtain quick recovery
    of ecosystems sensitive to acid rain, to delay non-attainment
    designations, to delay revisions to the air quality standards
    that would be more health protective, and to propose to violate
    a settlement agreement and defer any mercury reductions for at
    least 10 years longer than the law provides, unnecessarily
    exposing more than 600,000 women and children to health risks,
    further to pretend that man-made carbon dioxide emissions are
    not having an impact on the global climate system, to issue all
    sorts of environmental rules without an adequate consideration
    of the risk, benefits and costs associated with them. All of
    this adds up to more disease, damage and death due to closed
    door policymaking, and coincidentally, more profits for
    polluters. This Administration has a growing credibility gap,
    maybe even a credibility chasm on air pollution policy.
        I am hopeful that Mr. Leavitt will have more luck than his
    predecessor in rebuilding trust with Congress and with the
    public but I am doubtful because of the White House influence.
    How could the Administrator build trust? To start, withdraw the
    mercury proposal as I and 44 other Senators are requesting
    today. Stop the filibustering of the PM2.5 review.
    Work constructively with Congress to get a four pollutant bill
    sooner rather than later. Add one new dangerous chemical to the
    list of hazardous air pollutant for the first time. Give
    Congress and this committee access to the documents on
    decisionmaking that we have requested. Do the analysis that the
    EPA promised on a wide range of mercury standards. Request an
    Inspector General investigation of industry memoranda in EPA's
    mercury rule. These things would be a start.
        The Administration could also make sure that the ozone
    implementation rule does not add delay on top of the 7 years of
    delay we have already had. That delay has caused the people
    health train wreck because more stringent standards are needed
    now based on current scientific findings. Even this scientific
    standard review process has been delayed by those less
    interested in protecting public health.
        I ask that a brief history of the delays in the review
    process and some studies from 2003 be placed in the record.
        Senator Voinovich. Is there objection?
        [No response.]
        Senator Voinovich. Without objection.

     HISTORY OF THE DELAYS--MILESTONES IN THE PARTICULATE MATTER AND OZONE
                                 NAAQS REVIEWS
                            PARTICULATE MATTER (PM)

        July 1997--Presidential memo directing completion of review within
    5 years, by 2002
        October 1997--FR Notice of Laying out Schedule for Review
        February 1998--Draft PM CD Development Plan for CASAC Review
        April 1998--FR Notice--Initial call for information
        May 1998--CASAC meeting to review Development Plan
        Summer 1998--NCEA began drafting chapters of CD
        August 1998--Revised Schedule for Development of PM Workshop Draft
    Chapters
        April 1999--Peer Review Workshop to discuss draft chapters of CD
        May 1999--Request for recently published papers and manuscripts
        October 1999--1st External Review Draft of CD
        November 1999--OAQPS Development Plan for SP
        December 1999--CASAC and public review of 1st Draft CD and
    Development Plan
        September 2000--Original target date for completion of CD
        March 2001--2d External Review Draft of CD
        April 2001--Five years from completion of 1996 CD
        June 2001--Preliminary Draft SP and RA Scoping Plan
        July 2001--CASAC and public review of Second Draft CD, SP, and RA
    Scoping Plan
        January 2002--Proposed Methodology for RA
        February 2002--CASAC consultation on RA methodology
        April 2002--3d External Review Draft of CD
        May 2002--CASAC teleconference on RA methodology
        July 2002--Five years from promulgation of 1997 NAAQS
        July 2002--CASAC and public review of 3d Draft CD
        November 2002--EPA workshop on statistical issues
        December 2002--Health and environmental groups file 60-day notice
        March 2003--Health and environmental groups file complaint in U.S.
    District Court
        April 2003--Preliminary Draft Methodology for coarse particle RA
        May 2003--CASAC consultation on coarse particle RA
        May 2003--HEI Report on Reanalyzed Time-Series Studies
        June 2003--4th External Review Draft of CD
        July 2003--Consent Decree with Schedule for Review Filed in U.S.
    District Court
        August 2003--CASAC and public review of 4th draft CD
        August 2003--Draft OAQPS SP and RA
        October 2003--CASAC teleconference to review framework for new 4th
    draft Chapter 9
        November 2003--CASAC meeting to review 1st Draft SP
        December 2003--First extension of Consent Decree filed in U.S.
    District Court
        December 2003--5th Draft of CD Chapters 7 and 8
        February 2004--CASAC teleconference to review 5th draft Chapters 7
    and 8
        February 2004--EPA initiates discussion of second extension to
    Consent Decree

                                     OZONE

        April 2001--Five years from completion of 1996 CD
        July 2002--Five years from promulgation of 1997 NAAQS
        November 2002--Draft Ozone CD Development Plan released for public
    comment
        December 2002--Health and Environmental Groups file 60-day notice
        February 2003--CASAC Teleconference to review CD Development Plan
        March 2003--Health and Environmental Groups file Complaint in U.S.
    District Court
        July 2003--Consent Decree with Schedule for Review Filed in U.S.
    District Court
        October 2003--Peer Review Workshop to review draft chapters 2,3,5,6
    of the CD

        Note: CD = Criteria Document, SP= Staff Paper, RA= Risk Analysis

        Senator Jeffords. Unfortunately the current version of the
    draft final rule to implement the 8-hour ozone standard is
    flawed, incomplete and late. The PM2.5 rule is late
    too. There are problems with revoking the 1-hour ozone
    standard. The new classification scheme should not be used to
    grant inappropriate extensions of attainment deadlines,
    especially if that would be unfair to areas that have attained.
        I know my expectations are high but when life is in the
    balance, we can and must do better. I urge the Administration
    and the Administrator to bridge the chasm that currently looms
    and exists. By doing some of the things I have suggested and
    working with us in Congress, there might be a chance of
    rebuilding the trust and credibility that we must have in your
    office. That would go a long way to really make our air cleaner
    and our people healthier.
        Thank you, Mr. Chairman.
        Senator Voinovich. Thank you.
        [The prepared statement of Senator Jeffords follows:]

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

        This hearing is very important and timely. The implementation of
    our nation's ambient air quality standards (or NAAQS), and the Clean
    Air Act in general, is a matter of life and death. Approximately 70,000
    Americans die prematurely every year as a result of air pollution,
    according to researchers at Harvard University.
        The main cause of these deaths is fine particulate matter, also
    known as PM-2.5. The bulk of this pollution comes from power
    plants, diesel fuel combustion and elsewhere.
        Ozone is a serious lung irritant that can trigger asthma or even
    cause it, and has recently been linked to birth defects. If the country
    was achieving the 8-hour ozone standard, we could prevent nearly
    400,000 asthma attacks, 5,000 hospital admissions and about 600,000
    lost school days every year. Unfortunately, the trend on ozone
    pollution has been going the wrong way for the last few years,
    according to EPA's 2002 Trends Report.
        Concentrations will increase as population grows and the average
    temperature rises. And, 200 million Americans have an increased risk of
    cancer, reproductive dysfunction, developmental problems, and other
    health effects due to air toxics exposure.
        What has this Administration's response been to these and other
    troubling facts?
        To issue rules to gut the New Source Review (NSR) program so that
    large polluting sources could be exempt from applying modern pollution
    controls permanently. This exemption would condemn thousands of people
    to an earlier death every year and delays attainment.
        To halt or slow-walk investigations and the enforcement of NSR
    requirements, not to mention obstructing congressional oversight.
        To propose power plant reductions that are too little and too late
    to help areas achieve attainment of the standards, or obtain quick
    recovery of ecosystems sensitive to acid rain.
        To delay non-attainment designations.
        To delay revisions to the air quality standards that would be more
    health protective.
        To propose to violate a settlement agreement and defer any mercury
    reductions for at least 10 years longer than the law provides,
    unnecessarily exposing more than 600,000 women and children to health
    risks.
        To pretend that man-made carbon dioxide emissions are not having an
    impact on the global climate system.
        To issue all sorts of environmental rules without an adequate
    consideration of the risks, benefits and costs associated with them.
        All of this adds up to more disease, damage and death, due to
    closed-door policymaking. And, coincidentally, more profits for
    polluters.
        This Administration has a growing credibility gap, maybe even a
    credibility chasm on air pollution policy. I am hopeful that Mr.
    Leavitt will have more luck than his predecessor in rebuilding trust
    with Congress and with the public, but I am doubtful because of White
    House influence.
        How could the Administrator build trust? To start:
        Withdraw the mercury proposal, as I and 44 other Senators are
    requesting today.
        Stop the filibustering of the PM-2.5 review.
        Work constructively with Congress to get a 4-pollutant bill, sooner
    rather than later.
        Add one new dangerous chemical to the list of hazardous air
    pollutants, for the first time.
        Give Congress and this Committee access to the documents on
    decisionmaking that we have requested.
        Do the analysis that EPA promised on a wide-range of mercury MACT
    standards.
        Request an Inspector General investigation of industry memoranda in
    EPA's mercury rule.
        The Administration could also make sure that the ozone
    implementation rule does not add delay on top of the 7 years of delay
    that we have already had. That delay has caused a public health train
    wreck, because more stringent standards are needed now based on current
    scientific findings. Even this scientific standard review process has
    been delayed by those less interested in protecting public health.
        I ask that a brief history of the delays in the review process and
    a list of some of relevant health studies from 2003 be placed in the
    record.
        Unfortunately, the current version of the draft final rule to
    implement the 8-hour ozone standard is flawed, incomplete and late. The
    PM-2.5 rule is late too. There are problems with revoking
    the 1-hour ozone standard. The new classification scheme should not be
    used to grant inappropriate extensions of attainment deadlines,
    especially if that would be unfair to areas that have attained.
        I know that my expectations are high. But, when life is in the
    balance, we can and must do better. I urge the Administration and the
    Administrator to bridge the chasm that currently looms. By doing some
    of the things that I have suggested and working with us in Congress,
    there might be a chance of rebuilding trust and credibility.
        That would go a long way to really making our air cleaner and our
    people healthier.
        Thank you.

        Senator Inhofe. Could I be recognized for a UC, a unanimous
    consent request? Mr. Chairman, I ask unanimous consent that we
    put in the record at this point a statement by Mr. Robert Stec,
    the Chairman and CEO, of the Lexicon Home Brands. He has
    actually put together a study on the number of manufacturing
    jobs that have gone overseas. I think this should be in the
    record.
        Senator Voinovich. Without objection.
        [The referenced document referred to may be found on page
    206.]
        Senator Voinovich. Administrator Leavitt, thank you for
    being here today. We look forward to your testimony.

     STATEMENT OF MICHAEL O. LEAVITT, ADMINISTRATOR, ENVIRONMENTAL
                           PROTECTION AGENCY

        Mr. Leavitt. Mr. Chairman and Members, that chart is good
    news. It is good news for all Americans. Today, my purpose is
    to talk about our national strategy to take clean air to the
    next level. I will be introducing a strategy that will provide
    for the most productive period of air quality improvement in
    our Nation's history, a strategy that is not simply taking our
    previous experience for granted but is accelerating the
    velocity of our progress and will do so in a way that will
    protect our economic competitiveness.
        I will talk today about four parts of that strategy. The
    first will be the Clean Air Ozone and Fine Particle Rule of
    2004 which will be issued on April 15. Through that rule we
    will designate as prescribed in the Clean Air Act, the areas of
    this country that have not achieved attainment in meeting our
    new and more protective standard. Those designations have come
    after long discussions with State and local officials working
    to meet the unique needs of each of the metropolitan areas
    involved.
        The second will be to provide for a series of national
    tools that will be available for the purpose of each State
    meeting its Clean Air obligations. It is impossible for States
    to meet needs when there is interstate transport of pollution
    that they don't control. The same can be said with mobile
    sources. Today we will talk some about the Clean Air Interstate
    Rule of 2004 which will reduce the major pollutants of NOx and
    SOx by some 70 percent over the course of the next 15 years
    that will result in some $50 billion being spent putting new
    equipment on old power plants that will provide for the highest
    amount of pollution being reduced in the least amount of time
    in our history.
        We will also talk about the Clean Air Diesel Rule which
    will be promulgated by the end of this month. It will remove
    forever that black puff of diesel smoke that we have become
    accustomed to seeing from on-road vehicles and construction
    equipment. It will be something the next generation will never
    know and will contribute substantially to the length and
    quality of the lives of the people in this country. That is the
    second phase, the series of national tools that we are
    providing.
        The third portion of the plan will be development of State
    implementation plans. Each State will come up with a plan that,
    when the national tools have been applied, will take care of
    the remainder. They will have 3 years to do that.
        Last, the success period when we go into attainment. By
    2015, I am happy to say that every Senator who sits at this
    table will find their areas for the most part in attainment.
    Oklahoma will be in attainment. Ohio, for example, will have
    gone from 30 counties not in attainment to 0.
        Delaware will have gone from 3 counties in non-attainment
    to 0. Vermont has the good fortune of starting with none out of
    attainment but they will still be in attainment. Connecticut,
    you indicated most of the State will unfortunately be in non-
    attainment but only 3 counties will remain by 2015. That is
    good news, the most productive period of air quality
    improvement in our Nation's history.
        With that, Mr. Chairman, I am looking forward to
    interacting with members of the committee. This process of
    going through designations of these ozone areas is not easy.
    Some parts of this as prescribed by the Clean Air Act are
    strong medicine, but necessary. It is a national prescription
    that Congress concluded we should move forward on. It will
    protect the health of our citizens. Without it, people will
    have shorter lives and not live as well, so this is an
    important undertaking. I look forward to our discussion.
        Senator Voinovich. Thank you, Administrator.
        Senator Carper, you weren't able to make your opening
    statement and I turned over your proxy to Senator Lieberman,
    but since you have recaptured the ranking membership, would you
    like to proceed with an opening statement?

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

        Senator Carper. I think I would. I just want to say to our
    friend and former colleague, Governor Leavitt, welcome. We are
    always pleased to have you here.
        I am going to ask unanimous consent that my statement be
    entered for the record. I will just make a quick comment if I
    can.
        You mentioned Delaware has three counties, the northern
    county, New Castle County where about two-thirds of our people
    live, Kent County in the central part of our State, the home of
    Dover Air Force Base and our State Capital; and the southern
    part of our State which is probably best known for our beaches,
    Bethany, Rehoboth and Dewey. We have a problem with non-
    attainment in a couple of those counties, we have a problem
    with non-attainment in our State.
        I never liked it as Governor when I was faced with the
    threat of loss of transportation money for clean air sins that
    frankly were not entirely of our making. My fear is that given
    the rule you may be anticipating implementing, to pass Clear
    Skies we will still end up in 2015--Delaware is going to be in
    attainment, but a number of the counties around us--we are a
    little State surrounded by New Jersey to the east and
    Pennsylvania to the north and Maryland to the west and we have
    a number of counties around us that will still be in non-
    attainment in 2015. That is just not acceptable. I am pleased
    we are going to be making progress but we want to see more
    progress being made around us.
        The longer we go in time the more we learn about the
    effects on public health, our health, from the stuff we are
    putting into the air. We will have a witness later today who is
    going to speak to that more directly. I am just troubled that
    while we seem to be making some progress, we are not making
    enough. In fact, we are not making it as quickly as I would
    like.
        Having said that, welcome.
        Senator Voinovich. Thank you, Senator Carper.
        [The prepared statement of Senator Carper follows:]

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

        Governor Leavitt, good to see you again.
        I am looking forward to this morning's hearing. The clean air
    challenges my State of Delaware faces today, and will face in the years
    ahead, require the assistance of the Federal Government to solve. I am
    encouraged that the EPA is moving forward on implementing measures to
    address clean air issues. I am interested to learn how the EPA
    envisions states will achieve clean air and meet the National Ambient
    Air Quality Standards.
        I recognize that achieving clean air across the country is a
    difficult task, and I do not pretend to understand all of the history
    of the Clean Air Act or the details of its voluminous set of
    regulations. However, I have a good enough understanding of the
    situation to see that Delaware's air quality will continue to be worse
    than what it should be for many years to come. And that is not
    acceptable to me, nor should it be to the EPA.
        Delaware has three counties: New Castle, where 75 percent of the
    population lives and which is bisected by I-95. Kent, which houses the
    state capital, Dover, and the Dover Air Force Base. And Sussex, home to
    the Delaware beach towns of Rehoboth, Dewey, and Bethany and booming
    destination for retirees and second homes.
        We expect that the entire State of Delaware will be designated as
    non-attainment for Ozone, and New Castle County will also be in non-
    attainment for PM2.5. The State will continue to take steps
    to reduce ozone and fine particulate matter, but there is only so much
    a little State like Delaware can do by itself to come into attainment.
    An important question is what will the EPA do to help us if much of the
    offending air comes from outside of the State?
        We will hear from our witnesses today, including Mr. George
    Thurston, of the impacts ozone and fine particles have on humans. We
    are in agreement that more needs to be done to protect public health
    from these harmful pollutants. And we are likely also in agreement that
    10 years from now, as the science and our understanding advance, we may
    find that we need to make even larger reductions.
        But today, we should focus upon what states like Delaware are
    doing, and will do to meet the standards that EPA has proposed.
        I see three major issues before us.
        First, the agency is moving from the current ozone standard to a
    new, supposedly better standard that is designed to be more protective
    of public health. At some point, the old ozone standard will probably
    need to be removed so that the newer standard can take its place. I am
    interested in how the states will handle this transition, and if making
    the transition will delay progress toward cleaner air.
        Second, I am interested to know if the Interstate Air Quality
    Rule--the plan the EPA is developing to achieve cleaner air--will
    actually result in counties like New Castle County Delaware being able
    to achieve the clean air standards? I believe that the modeling for the
    Interstate Air Quality Rule predicts that in 2015, 26 eastern U.S.
    counties will STILL fail to meet the new ozone standard. Further, 13
    eastern counties are predicted to fail to meet the particulate matter
    standard. A number of these counties are in New Jersey, Pennsylvania,
    and Maryland--not too far from Delaware. So even if Delaware is able to
    meet the clean air standards, we will continue to be at the mercy of
    the winds blowing from outside the State that can carry dirty air
    across our border.
        And finally, I am interested to learn if the standards that are
    being established, for both ozone and for particulate matter, are being
    set at the proper level. Our knowledge of the science behind public
    health increases each year, and we are learning more about the impacts
    of various pollutants on humans. I understand that the EPA is currently
    reviewing the particulate matter standard and could suggest an even
    tighter standard in the near future. If that is the case, we need to be
    confident that we are going to achieve at least the current standard,
    and possibly be able to go even further if the standard is revised.
        If proposals such as the EPA's Interstate Air Quality Rule, or the
    Administration's Clear Skies Initiative are insufficient to meet the
    clean air standards we are discussing today, what would we do if even
    tighter standards are proposed. Today's hearing is not about multi-
    pollutant proposals, but we should come back later and consider the
    merits of the clean air proposal I have introduced--The Clean Air
    Planning Act. I am interested in discussing how that bill, by reducing
    power plant emissions of SOx and NOx, could be an additional tool to
    help States achieve cleaner air.
        In closing, I am pleased that the EPA continues to work on ways to
    make the air cleaner. I know we have come a long way, and I appreciate
    that. I also appreciate that we have a significant amount of work ahead
    of us. Lets get started.
        Mr. Chairman, thank you.

        Senator Voinovich. I would like to start with a real
    practical point of view with my questioning. I have a letter
    from the Ohio EPA sent to Region V about Knox County, OH. I ask
    that it be inserted in the record.
                                                      Ohio EPA,
                                          Columbus, OH, March 29, 2004.
    Mr. Thomas V. Skinner, Regional Administrator,
     U.S. EPA, Region V,
    77 West Jackson Blvd.,
    Chicago, IL.

    Re: Knox County 8-hour Ozone Recommendation

        Dear Mr. Skinner: I am writing to revise the recommendation for the
    nonattainment designation of the 8-hour ozone standard in the Columbus
    Metropolitan Statistical Area (MSA). Knox County was included as part
    of the Columbus MSA due to a monitored violation at the Centerburg
    monitor. This monitor is located in the extreme southwestern corner of
    the county in Hilliar Township. See enclosed map. Hilliar Township is
    located adjacent to the recommended nonattainment counties of Delaware
    and Licking. We do not believe that the ozone data from this monitor
    are representative of the entire county but are, instead, an indication
    of the outer reaches of the impact of the Columbus MSA.
        Knox County is a rural, agricultural county with a total population
    of 55,000. There are only two Title V facilities in the entire county,
    neither of which emit over one ton of either volatile organic compounds
    (VOCs) or nitrogen oxides (NOx). Based on the geographic location of
    the monitor and the lack of any significant sources of emissions in the
    county, it is apparent that any control strategy that will bring the
    Centerburg monitor into attainment must be directed to sources outside
    of Knox County.
        We, therefore, are amending our July 15, 2003 recommendation to
    only include Hilliar Township as the portion of Knox County that should
    be included in the nonattainment designation of the 8-hour ozone
    standard.
        Thank you for your consideration of this request. If you have any
    questions concerning this request, please feel free to contact me at
    614-644-2782.
                Sincerely,
                                             Christopher Jones,
                                                              Director.

        Senator Voinovich. You don't have to go into the specifics
    but I am interested in the process of making non-attainment
    designations because it involves the Federal, State and local
    levels of government. I just get letters and letters, am I in
    or am I out, and many of them don't want to be in and there is
    a lot of debate going on in the States because there are a lot
    of counties that feel if they are in, it is going to have a
    negative impact on their economic development plans. I just
    wonder what are you doing to reconcile this. I know you have
    pressure on you from environmental groups who say they should
    be in, so how is this being handled?
        Mr. Leavitt. I would like to describe the full process to
    you and your colleagues. The Clean Air Act and subsequent
    consent decrees require the Administrator of the EPA to
    designate all parts of the United States as to their attainment
    or their non-attainment. In my role, I will be required to
    essentially create metropolitan areas that are consistent and
    we can say they are in non-attainment, so I will by rule, on
    April 15, meet that deadline and designate some 500-plus
    counties that are not in attainment.
        The law requires that those who are not in attainment are
    so because they have not met the standard or they contribute to
    those areas that do not meet the standard. We have used a
    collaborative process with the States to determine an 11 part
    test that could be applied to each of the areas. The States
    were then asked to make suggestions or to make recommendations
    as to the counties or to the groupings of counties that should
    be considered in non-attainment. They made their
    recommendations. The EPA then had a period to analyze the
    recommendations and to either add or take away from their
    suggestions and we are now in the process of discussing between
    State and local government what those actual designations will
    be. That is the rule that will be finalized on April 15.
        It has been a matter of a great deal of discussion. Some of
    the areas are very clear cut, some of them are not. We are
    working hard.
        Senator Voinovich. Is the EPA going to make the final
    determination?
        Mr. Leavitt. The decision will be made on April 15.
        Senator Voinovich. The EPA is going to reconcile if there
    is a difference in the State, you are going to come in and say,
    ``We are the referee and we are going to call this one?''
        Mr. Leavitt. That is the obligation given the Administrator
    under the law.
        Senator Voinovich. Look in the television and replay the
    play and then say this is the way it is going to be?
        Mr. Leavitt. That is the obligation I have, and I will meet
    that obligation.
        Senator Voinovich. You stated in your testimony that you
    prefer that Congress pass the President's Clear Skies Act. You
    have issued some new regulations to try and compensate for the
    fact that we have not done anything in the area of Clear Skies.
    Why is it that you prefer Clear Skies to the present situation?
    You put that chart up here, the complex situation that my State
    is confronted with today and our local communities.
        Mr. Leavitt. Senator, may I suggest that one of the great
    pieces of environmental legislation that has passed in this
    country is the Clean Air Act. However, it is not without
    complexity and nearly all of those things you see on there are
    a reflection of the four corners of the Clean Air Act. It is
    complex but we are having success.
        Senator Voinovich. The question is, in terms of preference,
    in terms of implementing the ozone and particulate rules, why
    is it that we'd be better off with Clear Skies than with this
    chart here with all these `if', `and', `whereas' and `but
    fors'?
        Mr. Leavitt. I became Administrator of the Environmental
    Protection Agency on November 6. Among my first duties was to
    send to 31 Governors a letter indicating that large portions of
    their States, or in the case of Connecticut, the entire State,
    would be found in non-attainment. Having just completed 11
    years as Governor, I knew full well what those letters meant. I
    knew it would have economic consequences, I knew it would have
    health consequences and that the Governors would be deeply
    concerned and would need to have tools.
        I also knew that there were many of my former colleagues
    who felt as if they were to take all the cars off the highways,
    cleanup the power plants in their areas, and close some
    factories, they still wouldn't be in compliance because of the
    problem of transport from one area to another and because of
    the capacity of mobile sources to move around, and that it was
    fundamentally unfair for me to send those letters saying you
    are going to be found in non-attainment without providing the
    tools that would have been provided under the Clear Skies
    legislation.
        Therefore, I made the decision to move forward with what
    will be know as the Clean Air Rules of 2004, one of them being
    the Interstate Transport Rule. That is the rule that will
    reduce NOx and SOx by 70 percent and will require all power
    plants nationwide to invest in essence $50 billion to put new
    equipment on old power plants.
        To answer your question directly, the reason we needed
    these regulations is because the legislation hadn't passed and
    in order get into attainment, in order to make that clean map
    become a reality, these rules have to be in place or some tool
    for Governors and local communities to respond in the areas of
    interstate transport and mobile sources.
        Senator Voinovich. The only thing I would say is from what
    I understand from the National Governors Association and from
    State and local governments, they would prefer to have this in
    the law as prescribed in Clear Skies rather than buy rules
    because rules are subject to lots of controversy.
        Mr. Leavitt. Senator, could I echo that point? It is clear
    that the preferred way of resolving this would be with
    legislation. We support it, we want to move it forward and hope
    that can occur. There is I would say a 100 percent probability
    that these rules will be challenged in litigation by someone on
    perhaps many sides of the issue and it will take us time to
    work through that. Regrettably that has become a ritual of
    environmental action, but the States and local communities have
    to have these tools or they simply can't work their way through
    these non-attainment designations.
        Senator Voinovich. Senator Jeffords.
        Senator Jeffords. Is what you are saying is that the
    present rules are too strict?
        Mr. Leavitt. No. I am saying we need tools in order to
    resolve them. A good example is that many of the States in
    Senator Lieberman's neighborhood could take all the cars off
    their roads, they could close their factories and cleanup their
    power plants and still not be in attainment under this new,
    more protective standard that we support. They need to have a
    national approach on power plants and a national approach on
    mobile emissions. We will be proposing national tools that
    will, by their implementation, allow nearly every metropolitan
    area in this country to come into compliance and attainment and
    meet the standards I know you so much want to have met.
        Senator Jeffords. Isn't it correct that the existing laws
    are stricter than Clear Skies?
        Mr. Leavitt. That would not be a true statement, in my
    judgment, Senator. We are moving from a 1-hour ozone standard
    to an 8-hour averaging measure. We are going in particulate
    matter down to particles 2.5 microns and smallaer. Those are
    higher standards of health, they are more rigid and stringent
    standards and are more protective standards, and we support
    them.
        Senator Jeffords. Thank you.
        Senator Voinovich. Senator Lieberman.
        Senator Lieberman. Thanks, Mr. Chairman.
        Administrator Leavitt, let me go to the comment I made in
    my opening statement about the NOx and SOx rule you propose
    which as I said I think represents a step forward but I am
    concerned about the two stages, the phasing in, and you have
    justified those two stages by stating there is not a sufficient
    labor force to install the pollution control equipment by 2010.
    However, as I indicated, an October 2002 report which is
    printed in the docket on that matter, it seems to say just the
    opposite, which is that there is sufficient work force,
    certainly at least as of that time.
        I wanted to ask you, if it is established that the work
    force is there to make the tighter reductions by 2010, will you
    change the proposed rule to eliminate or at least significantly
    alter the dates of the phasing in?
        Mr. Leavitt. Senator, our industry survey that was done
    prior to the proposed rule being made, indicated that the
    Boilermakers Union did have significant recruitment and
    training problems through 2010. We are soliciting comment
    currently on this rule and we will be making a reassessment
    based on the information we receive before we complete the
    rulemaking.
        I will say that we are proposing a rule that will be the
    single largest investment in air quality improvement in this
    Nation's history. Over the course when it is fully implemented,
    $50 billion will have been invested by the American people and
    it will result in more pollution being reduced in a faster time
    than in any period in our history, and we will be using the
    same strategy that was so successful with our acid rain success
    in the mid-1990's. What we find is that those power plants that
    have the most to reduce will do so the fastest and will do the
    most because of the market pressures. It is part of what I like
    to refer to at the EPA as the better way. We have picked the
    low hanging fruit in many cases, this is about getting to the
    more difficult reach and that is what this rule will imply.
        Senator Lieberman. As I said, I appreciate the positive
    change the rule will bring. I take it that what you have just
    said is that if there is further indication that the work force
    is capable of implementing the rule or rapidly that you would
    reassess and consider altering the phases?
        Mr. Leavitt. We are using a cap and trade strategy that
    provides incentives for people to accelerate. We will propose a
    glide pattern that will get us to the 70 percent reduction. The
    market will drive it just as it did with acid rain.
        Senator Lieberman. Incidentally, there is a good point made
    here which is that environmental protection is a job creator.
    It is an interesting comment that the judgment is that there
    may not be enough people in the particular field of endeavor to
    implement the rule as quickly as you or I might otherwise like
    to implement it. Maybe anybody thinking about what to do ought
    to think about going into this field. It sounds like it is
    going to be a profitable field for a period of years as a
    result of the rule you are contemplating.
        Let me go to the other area I mentioned which is the
    national parks. It is my understanding that several of our
    national parks will have to be classified as non-attainment
    areas under the new 8-hour ozone regulations. That concerns me
    greatly as it does a lot of Americans, both because of the
    beauty of our natural resources and national parks but also
    because millions of Americans visit those parks every year and
    ozone is, as Senator Jeffords' statistics indicated, a
    significant health risk. So I think it is in all of our
    interest to work to bring the national parks, particularly into
    compliance.
        I understand you will be releasing the EPA's proposed BART
    rules for haze reduction a little bit later this month. I
    wanted to ask you how many of our national parks do you believe
    will fail to meet the safety requirements of the 8-hour ozone
    standard?
        Mr. Leavitt. I will have to answer on the record with
    respect to the specific number. I don't know the answer to that
    sitting at this table. I will indicate to you that we are
    committed to improving visibility in our national parks. A very
    significant experience in my life was co-chairing the Grand
    Canyon Visibility Transport Commission, which I believe was
    among the pivotal points in our national strategy. It
    ultimately resulted in the Western Regional Air Partnership,
    which is not just changing the way the West solves
    environmental problems but providing new collaborative tools
    across the country as an example.
        We do plan to propose the best available retrofit
    technology provisions later this month. It is in response to a
    court remand. We intend to issue a rule that will contribute to
    visibility improvement and do it in a significant way.
        Senator Lieberman. Will the new BART rules bring our
    national parks into attainment within the 8-hour ozone
    standard?
        Mr. Leavitt. In time.
        Senator Lieberman. Details to follow?
        Mr. Leavitt. Details to follow.
        Senator Lieberman. There is some concern that you are
    considering putting the Bart rules into repose until 2018 on
    the theory that the Interstate Air Quality Rule will be good
    enough. Can you reassure us that is not your intention?
        Mr. Leavitt. Consulting with my colleague, we are currently
    engaged in a broad discussion and what we do will, in fact,
    meet the provisions of the law. I am not in a position at this
    point because we are in the rulemaking process. As we get
    further along I would be happy to give you a direct individual
    report.
        Senator Lieberman. I understand. I would close with an
    appeal that to put the BART rules in a repose on the theory
    that the Interstate Air Quality Rule is good enough, is in my
    opinion not the way to go and it doesn't make sense. The IAQR
    rules control different pollutants for different purposes and
    move to different standards and are not a substitute for the
    BART rule. I hope that after all these yeas and all the court
    battles and now the staff time to finalize the proposed BART
    rules by April that you will not take action that will not
    effectively delay them and the cleanup of air quality at our
    national parks for another 14 years.
        I look forward to your statements on this in the next
    couple of weeks.
        Mr. Leavitt. Thank you. We will get back for the record on
    the matters I was not able to respond to.
        Senator Lieberman. Thank you.
        Senator Voinovich. Senator Carper.
        Senator Carper. When I leave here today, I just want to
    have a better understanding of where we are in the process,
    first of all with the ozone standard, and second, with the
    particulate standard. Explain to me again where are we in the
    process with respect to an ozone standard and are we looking at
    tightening it further?
        Mr. Leavitt. In 1997, it was the opinion of the
    Environmental Protection Agency that the standard should be
    changed from a 1-hour standard, that is to say average over 1
    hour on particular days to an 8-hour standard, which is
    considered a more protective standard.
        Since 1997, we have been in the process of doing analysis
    and study. Most recently, our purpose has been to take the
    first step, which is to designate the areas that are in
    attainment and non-
    attainment with this new and higher protective standard.
        On April 15, as the Administrator of the Environmental
    Protection Agency, I will issue a rule that will designate each
    part of the country as being either in attainment or out of
    attainment. That will happen on time and as expected. At the
    same time, we will designate the classification of non-
    attainment among those who are not in attainment.
        Senator Carper. Say that again.
        Mr. Leavitt. At that time, we will also designate among
    those that have been indicated as in nonattainment, essentially
    the degree of nonattainment that they have achieved. There are
    six different classifications of nonattainment. There is
    marginal which is just above attainment status, there is
    moderate, then there is serious, then severe, there are
    actually two areas of severe, and then extreme. The further
    away from attainment a community is, the longer it has to
    provide a plan and to come into attainment, but the more
    aggressive it must be in being able to seek attainment. There
    are provisions of the law that will follow each of those
    classifications. They will have 3 years to create a plan. The
    EPA will then have 1 year in which to actually approve their
    plan and then implementation will need to follow.
        Senator Carper. During the 3 years States are working on
    their plan, I presume there is back and forth with EPA so that
    when you get to April 2007, there has been a fair amount of
    discourse and when their clock runs for the other hour, does
    EPA need that full year to determine whether or not the plan is
    going to cut the mustard?
        Mr. Leavitt. It should be the objective of every community
    to reach attainment and there are more than ample incentives
    for them to do so. While they are developing their plan, it is
    our hope and our optimism that many of them will begin
    immediately to implement those steps necessary to move them
    toward attainment. There are already communities who anticipate
    their non-attainment status, who have begun to implement the
    provisions necessary to get there. This is about clean air, it
    is about healthy air, is about getting results, not simply
    following a process.
        Senator Carper. Other than our stewardship and our concern
    about the health of our constituents, what incentives do
    different counties have to move toward attainment?
        Mr. Leavitt. The status of nonattainment is not a happy
    outcome for anyone. Senator Voinovich indicated that there are
    many local government officials, some of whom you will hear
    from later today, who are gravely concerned about the impact it
    could have on their communities and are working with great
    devotion to cure or to heal that ailment.
        One of the reasons we make these designations is to
    communicate to the citizens of those areas that the air they
    are breathing is currently not as healthy as our national
    standard or the protective standard that we have established as
    a Nation. So there is a communication aspect and it also
    clearly brings attention that causes public officials to move
    forward. So the incentives are clearly there. There are
    economic incentives because there are circumstances where it
    becomes more difficult for a business to site their facility
    there because they ultimately will have to find some way to
    reduce otherwise. So there are incentives here. Our purpose is
    to achieve clean air, not simply walk through a process.
        Senator Carper. I mentioned earlier we have three counties
    in my State and New Castle County is the northern-most county
    where about two-thirds of our people live. New Castle County,
    Delaware is going to be designated as a non-attainment area
    under the 8-hour ozone standard. According to EPA's analyses,
    New Castle County is projected to still be out of attainment in
    the year 2010. Interstate 95 runs right through it, 295 and 495
    run literally right through it as well. We are expected to
    still be out of attainment in 2010 even with the implementation
    of the proposed interstate air quality rule.
        I don't expect you to be able to answer this but I want to
    ask you on the record. As you know, Senators Gregg, Alexander,
    Chafee and I have introduced legislation called the Clean Air
    Planning Act. My question is when would New Castle County come
    into attainment if our legislation, the Clean Air Planning Act,
    were enacted? I don't expect you sitting here today to be able
    to answer that. For us, that is an important question as we
    consider whether to enact Clear Skies, the Clean Air Planning
    Act which I have introduced, Senator Jeffords has his own
    proposal with a fair amount of support. My question is, for New
    Castle County, when could we expect to be in attainment if the
    Clean Air Planning Act were enacted?
        Mr. Leavitt. Mr. Chairman, do I have time to respond? I
    don't want to get off schedule. I saw a red light.
        Senator Voinovich. I think what Senator Carper wants to do
    is if you can't answer that question today, he wants it on the
    record and he would like a response.
        Mr. Leavitt. May I parenthetically insert this? The
    structure of this national strategy frankly is very solid. We
    are saying here are the areas that are in nonattainment, some
    of which are in your State and some of which are in many other
    States. Here we are saying to the State and local communities
    are some tools that deal with problems that you can't deal with
    on your own, the interstate air quality issue where you have
    air pollution drifting from one region to another or the mobile
    source where it can come from anywhere and we don't want to
    control who comes in and out of a particular State. We are
    providing those tools and they are very powerful tools,
    powerful enough that, when combined with existing control
    programs, they will bring nearly every metropolitan community
    in the country on their own into attainment.
        There are areas where they won't be powerful enough on
    their own and it is going to be incumbent on those local
    communities to develop in a collaborative way a neighborhood
    strategy to solve that problem. We have national standards, but
    we have to have neighborhood strategies. I hear what you are
    saying about wanting to have your idea modeled and we will do
    our best to do that, but I wanted to make clear that the fact
    that there are still some areas that may not be in attainment
    under this national strategy only implies that there are some
    areas who have a long ways to go, further than most areas. We
    need to help them, and we are, because without these national
    tools, they couldn't even get close. In most cases, they are
    getting very close just with the national tools we are
    providing.
        Senator Voinovich. Senator Clinton.

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

        Senator Clinton. Thank you, Mr. Chairman.
        Thank you so much, Administrator Leavitt, for being here
    once again. I so appreciate the cooperative relationship that
    we have developed and look forward to working with you.
        I was told there was a chart before I arrived which showed
    that the gross domestic product has climbed as emissions have
    declined. I think that proves the point that economic growth
    and environmental protection go hand in hand, to choose one
    over the other is a false choice, but I am concerned that in
    the testimony today and in some previous Administration
    testimony the fact we have made progress at a period of time
    both economically and environmentally, is being used to argue
    that we can change direction now. I worry about that.
        I have a specific question because in the work that I have
    been doing on environmental health, and I know Senator Jeffords
    made reference to this and we are going to have an excellent
    witness, Dr. Thurston, on the next panel to talk about the
    results of very important research. We know that the public
    health costs of not providing more clean air requirements are
    going to be severe.
        Along with that, I understand you are on the verge through
    EPA of providing guidance to the States as part of a permitting
    process that would actually limit the options States can
    consider when applying best available control technology to new
    coal-fired power plants. As I understand the guidance, it would
    prevent States from considering fluidized bed combustion or
    even integrated gasification of coal, both of which are
    substantially cleaner and more efficient than conventional
    pulverized coal.
        Why would the agency limit the States' options since what
    we are trying to do, as you just eloquently said, was to have
    neighborhood so-called State responses, why would you limit the
    States' options and curb the development of these and other
    important new technologies?
        Mr. Leavitt. I am going to confer because I don't know of
    any decision on any guidance at this point. Senator, we have
    made no decision on that point. Our basic philosophy at the
    agency is national standards, neighborhood solutions. That is
    to say we need to optimize the number of tools available to
    people to meet our high protective standards.
        May I echo what has been said about the link between
    economic prosperity and environmental progress. Without
    economic prosperity, there is nothing that fosters pollution
    like poverty. We see very clearly at the Environmental
    Protection Agency that link and it is for that reason that our
    purpose in this national strategy is to accelerate the velocity
    of our progress but to protect our national competitiveness as
    we do it.
        Senator Clinton. I am delighted to hear that no guidance
    has been formulated and I would strongly urge that we do
    everything possible to incentivize new technologies because in
    your testimony, you state,

              ``Our past experience under the Clean Air Act suggests that
            development of cleaner technologies which is continuing on many
            fronts, will help even the areas with the most difficult
            pollution problems make progress at a reasonable cost in new
            ways we cannot identify today.''

        I could not agree more. I am one of those who think that we
    could have a jobs explosion in this country with clean energy,
    with smart technology, with pollution control devices and
    anything that the EPA can do to try to incentivize that, I
    think would have tremendously positive effects.
        I know that when we tighten environmental and public health
    standards, we drive the private sector to innovate and we have
    had some very positive results from that. The cost of pollution
    control then comes down in ways that we couldn't have foreseen
    when the standards were set, and that leads me to a followup
    question.
        Why do you think this experience applies to the control of
    ozone and particulate matter emissions but not to mercury
    emissions? Why are you backing a mercury rule that will not
    result in mercury specific emission controls on power plants
    until 2018 because if you follow the thinking that I agree with
    completely in your testimony about what we can do to force the
    private sector to innovate, I would argue strongly that just
    squarely impacts on what we could make happen with respect to
    mercury control as well.
        Mr. Leavitt. Senator, the discussion on mercury has
    occupied a great deal of my attention. It is something I feel
    deeply about on a personal basis. There have been a number of
    what I will term, for the purpose of description, fictions that
    have crept into this discussion and I think it would be
    valuable for me to clarify them.
        One fiction is that the EPA does not view mercury as a
    toxin. The fact is mercury is a toxin and it needs to be
    reduced. Another fiction is that somehow the agency is seeking
    to roll back standards. The fact is there has never been a
    standard; this will be the first time that we will have
    regulated mercury from power plants in our Nation's history and
    we want to do it right.
        The third fiction is that someone previously had indicated
    we could do it by as much as 90 percent. Senator, I have
    searched the records of the agency and I can find no place
    where a person representing the agency indicated that was
    possible and if they did, they were misinformed.
        The next fiction is that it is possible between now and
    2007 to get a 90 percent reduction on mercury from power
    plants. I have spent an enormous amount of time with the
    engineers and the scientists who not only understand this but
    who invented it, and it has become very clear to me that as
    optimistic as I am about the mercury-specific technology,
    particularly activated carbon injection, which I think is
    clearly the way we will get to large scale reductions, that it
    will not be adequately tested, nor widely deployable, until
    2010. That is as close to a fact as I can provide you.
        Another fiction is that we are somehow putting off the
    reductions until 2018. The fact is we are considering two
    mercury rules right now: first, that would be a MACT rule,
    which would have to be complied with by 2007, and the second,
    and what we think is more aggressive and in our opinion, a
    better way, which would allow us to reduce mercury emissions by
    70 percent using a cap and trade system. We believe the second
    approach gets more reductions and happens faster, but we are
    receiving comment on both and trying to learn about both.
        In both cases, there are short-term objectives that have to
    be met on mercury, and we have no interest or intention of
    putting off our action on this until 2018.
        Senator Clinton. I thank you very much for that answer,
    Administrator Leavitt. I look forward to further engagement
    with you on this issue because I appreciate the fact that it is
    a toxin, I worry about the cap and trade system creating hot
    spots that will have very damaging effects on the people who
    are directly impacted by those particular emission sources. So
    I look forward to having an ongoing discussion about this. I
    would hope though that we would keep in mind the fact that we
    have been quite successful in not only reducing emissions but
    creating technologies that have had spinoffs and very positive
    economic effects.
        I would conclude by saying that if you look around the
    world right now, the Japanese, the European Union, they intend
    to corner the market on clean technology and pollution control
    devices. They are going to have a tremendous economic
    comparative advantage over us in this technology. I think that
    is unfortunate and it is being driven by government policy, not
    just by the market, because with any new venture oftentimes you
    need some support for investment and the like, so I think we
    are missing the boat by not being really aggressive in creating
    incentives and regulations that will both lower pollution and
    also trigger the development of technology.
        Thank you.
        Senator Voinovich. Thank you, Senator Clinton.
        [The prepared statement of Senator Clinton follows:]

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

        Thank you, Mr. Chairman.
        I am pleased to be here today, and am pleased to welcome George
    Thurston of NYU back to the committee.
        The air pollution issues that we are here to discuss today--ozone
    and particulate matter--are critical public health issues.
        Ozone pollution causes a range of respiratory problems--from
    difficulty breathing, to aggravation of asthma, to lung damage. Ozone
    pollution is also linked to premature death.
        Similarly, particulate matter pollution is linked to aggravation of
    heart and lung diseases and to premature death. I believe that Senator
    Jeffords has already stated that Harvard research indicates that as
    many as 70,000 Americans die prematurely each year as a result of air
    pollution. That is a staggering figure, and shows that we have a lot of
    work to do.
        There was considerable controversy when the ozone and particulate
    matter standards that we are finally implementing were set in 1997.
        Since that time, the scientific evidence has grown stronger, and
    suggests that even though we are just beginning to implement the 1997
    standards, they may not be adequately protective of public health.
        I want to briefly mention a couple of those studies, and I know
    that Dr. Thurston will expand on this point in his testimony.
        The first is a Yale University study by Janneane Gent, which was
    published last October in the Journal of the American Medical
    Association. The study looked at 271 children under the age of 12 with
    active asthma in Connecticut and Massachusetts, and measured their
    response to two air pollutants, ozone and very small particulate
    matter.
        The key funding from this study is that a 1-hour exposure to air
    containing 50 parts per billion of ozone caused a significant increase
    in wheezing and chest tightness in those children, and increased their
    use of symptom-relieving drugs. In other words, ozone exacerbates
    asthma in children at concentrations below the current 1-hour level of
    120 parts per billion and the new 8-hour exposure standard is 80 parts
    per billion.
        The second study I want to cite is one that Dr. Thurston was
    principal investigator on. This study, published in 2002 in the Journal
    of the American Medical Association, found that long-term exposure to
    particulate matter is associated with an increased risk of death from
    cardio-pulmonary disease and lung cancer. The increased lung-cancer
    risk in polluted U.S. cities was found to be comparable to the risk to
    a non-smoker from living with a smoker.
        Given these studies and the mounting evidence which suggest that
    ozone and PM pollution are harming our children and those who live in
    polluted areas, I think we need to move to quickly implement the new
    particulate matter and ozone standards. We also need to look at
    revising the standards, as the Clean Air Act requires. I understand
    that EPA has been dragging its feet on revising the PM2.5.
        They are certainly important issues in my State of New York.
        The New York City metropolitan area is a non-attainment area under
    the 1-hour ozone standard. It will be a non-attainment area under the
    8-hour standard as well, and it appears that most urban upstate areas
    will be as well.
        Implementing these new standards will be complex, and I think there
    are a number of outstanding questions that I hope we will have time to
    get into today and in subsequent hearing.
        Finally, I want to note that I am one of the 44 Senators who is
    today calling on Governor Leavitt to withdraw the proposed mercury rule
    and put out a new, more protective standard.

        Senator Voinovich. I would like to say that I believe the
    new rules you are going to promulgate are ambitious in terms of
    cleaning up the environment and its impact on public health.
    Would you say that, yes or no?
        Mr. Leavitt. Yes, absolutely.
        Senator Voinovich. And Clear Skies, the legislation I have
    introduced on behalf of the President and Senator Inhofe is
    ambitious in terms of reducing emissions and also the impact of
    emissions on public health?
        Mr. Leavitt. It would be the most aggressive this Nation
    has ever had.
        Senator Voinovich. I would like to say this gross domestic
    product, picking up on what Senator Clinton had to say, is
    very, very robust but the world has changed in the last 4 or 5
    years. Competition from China and from other countries around
    the world have impacted us. The litigation tornado that is
    cutting through the economy of the United States of America is
    having a negative impact on our jobs in this country,
    particularly in my State. Health care costs are soaring and
    making our businesses a lot less competitive than they were
    before. We had a hearing last week on natural gas. We are
    having people move out of this country because of the fact that
    we have limited the supply of natural gas and exacerbated the
    demand for it, and it is devastating my State.
        I would like to say I think the economy has changed in
    America today and I would love to have that kind of growth but
    we are not by ourselves anymore, we are competing now in a
    global marketplace.
        On the mercury issue, President Clinton and the EPA
    Administrator, and I don't want to get partisan here but I
    would like to get the record clear, did nothing on the mercury
    issue for 8 years. Two days after the Supreme Court ruling on
    the election, they issued a regulation that said mercury should
    be regulated and left office. Eight years and the day after the
    election, said mercury shall be regulated. If it was such a big
    problem, why didn't we deal with it 2 years before or 3 years
    before or 4 years before?
        President Bush came into office and he didn't shy away from
    the issue. He developed the first ever proposal to reduce
    mercury emissions that is being picked at by a lot of people in
    this country.
        Mr. Administrator, you and I have talked. My main concern
    about the mercury rule is that it could disproportionately
    affect one region of the country over another and further
    exacerbate the natural gas crisis by causing us to fuel switch.
    That gets into the issue of lignite coal and bituminous and
    sub-bituminous coal. I went through this when I was Governor in
    terms of the acid rain provisions of the Clean Air Act where
    they set up the rules so that it would advantage one area of
    the country over another.
        I would like you to talk about those mercury rules and what
    are we doing about this problem?
        Mr. Leavitt. It is not our intention to, nor will we be
    issuing regulations that will, affect the coal distribution or
    the sale and purchase of coal on a regional basis. Also, one of
    the criteria for me is that we do this in a way that will allow
    us to protect our economic competitiveness. I think that graph
    shows that without economic vibrance, environmental progress
    does not occur. We have to accelerate the velocity of
    environmental progress, but it has to be done in a way that
    protects our economic competitiveness.
        The keys to that are new technology, collaborative work
    focusing on the result and the use of markets. One of the
    criteria is we have to assure that when we move into regulating
    mercury, that we do it in a way that does not require fuel
    switching because ultimately that would not work to our
    advantage as a country.
        Senator Voinovich. I would like to emphasize one other
    thing and that is in your testimony you talked about tremendous
    progress is possible because we are putting forward a number of
    air quality improvements that are about to become effective and
    will soon be adopted. The proposed interstate air quality rule
    you talked about should be even more dramatic--cuts in power
    plant pollution--you did a lot more with legislation, I think,
    the NOx CIP call which states you are implementing to reduce
    power plant emissions, is underway right now. Our power plants
    are dealing with reducing NOx standards for new cars and light
    duty trucks and the fuels that they use, and that is one of the
    questions I think you are going to have to answer, how
    effective is emission testing? We have a big debate in our
    State again, are we going to continue emissions testing, how
    good is it? We have not automobiles out today that are so much
    cleaner than before and if we don't have emissions testing,
    what other things should we have to do in order to meet the
    standards.
        The standards for heavy duty, on-road diesel engines and
    the fuels they use, that is coming on board right now. You are
    also starting this new program in terms of buses which is
    another issue and we really need to move on that.
        Construction agriculture, mining, airport and the fields
    they use, use voluntary diesel retrofit and link programs to
    reduce emissions from the existing fleet.
        So you are moving forward with some pretty significant
    things and a lot of these things, in all fairness, started out
    before you came on board. There is some significanct stuff
    going on out there and I think it is really important that we
    make it clear. What we are trying to do is cleanup the air,
    reduce its impact on public health and at the same time, have
    an economy that provides jobs so that they can take care of
    themselves and family and we have vibrant communities. That is
    what we are trying to do here.
        Senator Jeffords.
        Senator Jeffords. I have two additional questions I would
    like to ask.
        Clear Skies or this proposed interstate air quality rule
    won't really start getting serious reductions for a decade or
    more from now or perhaps 2015 at the best. Most PM2.5
    and most ozone attainment areas will need those emissions
    reductions to take place by 2010 or sooner to achieve
    attainment by the deadlines. The Ozone Transport Commission has
    proposed much lower SOx and NOx caps and earlier deadlines that
    would help the region to attain on time.
        If the goal of the Administration's proposals is to provide
    maximum reductions from the most cost-effective sources, that
    is power plants, to help States and areas reach attainment,
    then why are the deadlines so late and the reductions so
    minimal? I know this isn't a labor shortage issue because there
    will be plenty of boilermakers available after 2007 or even
    earlier, assuming EPA keeps the NOx SIP call on track.
        Mr. Leavitt. Senator, I have very good news for you. The
    vast majority, a very high percentage of the benefit of the
    interstate air quality rule happens in the early years, a very
    high percentage of it coming before 2010. On the ozone and fine
    particle rules, a very high percentage of our communities will
    have come into complete attainment prior to 2010. So we have
    front-loaded these. There is serious progress that is going to
    occur and it will happen soon.
        There will be more pollution taken out of the air faster
    than at any time in our Nation's history. We have a national
    strategy that increases the velocity of our environmental
    progress and does it in a way that will protect our economic
    competitiveness. This is a solid national strategy. It is not
    one I don't take credit, this is something we have worked on as
    a country. The progress we are continuing over the past 30
    years is historic. There has been a new environmental maturity
    that has come across this country that we will now build on
    because we have picked the low-hanging fruit. It is going to
    require that we use technology and collaboration and
    neighborhood strategies, that we focus on results, not just
    processing through these programs, and that we are using
    markets that will incentivize people to do more.
        There is a great link between the incentives created by a
    cap and trade system and the development of technology. I agree
    with Senator Clinton, this is a huge opportunity for us
    economically and the world, and the best way for us to create
    incentives is to give people a reward when they achieve a
    technology that gets results that can be exported to the world.
    On many of these pollutants, we benefit when others in the
    world deploy the technology. Mercury is a great example. We
    produce a very small percentage of the mercury in the world. We
    need to be an example, a leader, and aggressive in doing it,
    but if we have technology, if we have ACI technology that is
    fully implemented, let us get it to the world. It puts
    Americans to work; it will cleanup the air: it will cleanup our
    waters. Women who buy tuna fish for their children, will have
    the safety of knowing that not only are we doing it in America
    but American technology is being exported to other countries
    where the vast majority of it is produced.
        Senator Jeffords. I appreciate that enthusiastic answer.
    Under the Clear Skies light cap and trade scenario, EPA
    predicts that approximately 200 power plants will not have
    applied advanced pollution controls for NOx, SOx or mercury by
    the year 2020, largely because of emissions banking and
    trading. Yet MACT requires that each and every unit at every
    power plant reduce emissions. How could your cap and trade
    proposal for the mercury possibly be more protective of public
    health than MACT at every unit?
        Mr. Leavitt. This is actually a matter we are taking
    comment on right now and trying to learn about. The concern you
    are expressing is whether there is a localized effect on
    mercury from a power plant. We want to learn about that. A lot
    of that concern was expressed in the acid rain debate. It
    didn't turn out to be the same kind of problem, but if there
    are health effects, we need to study them, we need to
    understand and learn about this. That is part of what we are
    receiving comment on right now from tens of thousands of
    Americans at public hearings across the country because we want
    to be responsive to that.
        Senator Jeffords. Thank you.
        Senator Voinovich. Senator Carper.
        Senator Carper. A month or two ago, I mentioned to you in a
    conversation we had that near the end of the Clinton
    administration an energy efficiency standard was adopted for
    air conditioners called SEER 13. I think it was adopted in the
    year 2000. It called for air conditioners to become 30 percent
    more efficient in their use of energy by the year 2006. I want
    to say maybe the second year of the Bush administration, maybe
    2002, a less rigorous standard was adopted called SEER 12. The
    SEER 12 standard calls for 20 percent more energy efficient air
    conditioners by 2006. It ended in a court battle, as I think I
    have mentioned to you, in the Second District Federal Court.
    The court ruled a month or two ago that the more rigorous
    standard, SEER 13, should stand.
        A number of us here in the Senate signed a letter to the
    President last month urging the Administration not to appeal
    the Second District Court decision. We have consulted with some
    of the air conditioning manufacturers in this country and late
    last month, their trade association went on record as saying
    they felt they could live with the more rigorous SEER 13
    standard by 2006. A majority of us have called on the
    Administration, Democrats and Republicans in the Senate, simply
    to say we are not going to appeal the Second District Court
    decision, let us get on with adhering to the more rigorous
    efficiency standard.
        I am told if the more rigorous standard stands, that come
    2020, we will have to build 48 fewer new electric power plants.
    Most of them are going to be built with natural gas but by
    having the more rigorous conservation standard in place, we
    will reduce our need by as many as 48 fewer power plants. In
    addition, I am told by 2020, CO2 emissions will be
    reduced biannually by 2020 2.5 million tons, simply by putting
    in place this more rigorous standard.
        In our conversation earlier I urged you in your position to
    work within the Administration to try to convince your
    colleagues and the President not to appeal the decision. I have
    no idea if you can give us an update today on where the
    Administration is taking that but if you could, I would welcome
    it.
        Mr. Leavitt. As I think you are probably aware this is a
    rulemaking that is being conducted at the Department of Energy.
    Therefore, it is one of the few controversies the Environmental
    Protection Agency doesn't seem to be in the middle of right
    now.
        May I add that during the time I was Governor, we lived
    through a couple of western energy crises where the primary
    focus of our attention became energy conservation. We began to
    run campaigns publicly asking people to use more energy
    efficient devices and to reduce their energy usage. We
    accomplished it in one particular summer by as much as 20
    percent, a huge impact economically, a huge impact
    environmentally.
        I am not able to comment on the specific standard, I don't
    have information but may I say that in terms of a national
    strategy, learning to conserve energy is a very powerful tool
    in being able to meet our national economic and cultural goals.
        Senator Jeffords. I have asked you privately and I ask you
    publicly to use your influence within the Administration. I
    have had a similar conversation with our Secretary of Energy. I
    would ask you to use your very considerable influence within
    the Administration to convince our President to simply say the
    decision has been made, courts have ruled, and we are going to
    live with that.
        I want to go back to something raised by Senator Clinton. I
    have heard rumblings as well that our Federal Government,
    presumably EPA, may not be interested in moving the utility
    industry toward greater utilization of clean coal technology,
    fluidized beds, coal gasification efforts. The technology has
    been around for a long time. My understanding is it has been
    implemented in a rather limited way. I think there may be one
    or two operating coal gasification plants, I am told there are
    a couple others actually formally proposed or actively being
    planned. We are the Saudi Arabia of coal. We have more coal
    than probably any other country in the world. We have the
    technology that allows us to use it in ways environmentally
    friendly but I don't feel a sense of urgency or priority from
    the Administration or from the Congress. Rather than continue
    to build new natural gas plants and jacking up the price of
    natural gas, why don't we find ways to implement the
    technology, commercialize it.
        I think you said in response to Senator Clinton's question
    that there was no decision made but it would be real
    encouraging to hear you say, that makes a lot of sense. It
    passes a common sense test for me. What do you plan to do to
    move us down that road?
        Mr. Leavitt. I will read you the note and then comment. The
    guidance on the new source review for new plants, we require
    them to consider new technologies. I have not received a
    recommendation yet, but let me comment philosophically.
        I can't break into song over this matter. I don't think we
    would find any disagreement at either of our tables today about
    the fact that if we can produce zero emission coal in this
    country in the generation of electricity, it is a powerful
    driver of our economy and it ought to be and is a priority. The
    Administration has committed $1 billion for a project called
    Future Gen, a collaboration between the industry and the
    Department of Energy; EPA is involved, our labs are involved,
    another reason I am anxious to have you to our labs in North
    Carolina.
        Senator Jeffords. Only if Senator Voinovich would come with
    us.
        Senator Voinovich. I will do it.
        Mr. Leavitt. Call the travel agent.
        This would be a powerful driver of the American economy. We
    have rich resources of fuel of coal. Without using them, we put
    upward pressure on natural gas which is having a substantial
    impact on large areas of our economy and keeping us
    competitive. It is a priority, it needs to be a priority. We
    can, I believe, in the course of the early part of this century
    produce the capacity to generate electricity with zero
    emissions from coal and if we do, it will be a driver not just
    in our country but in the world economy and we will be the
    leader.
        Senator Voinovich. Thank you.
        I would like to say Ohio University, my alma mater, is a
    leader in the country in clean coal technology and they are so
    excited and so is the Ohio Air Quality Authority on Future Gen
    and its potential. Thank you for the initiative and I would
    like to editorialize and say it would also help if we could get
    an energy bill passed because there are lots of stuff in the
    energy bill that deals with clean coal technology and moving us
    in that direction.
        We are going to have a vote at 11:30 a.m. Senator Clinton,
    you still have some questions I am sure you would like to ask
    and we will try and wrap it up after Senator Clinton so we can
    get to the other witnesses before we have to go and vote and
    then come back and ask questions of the next panel of
    witnesses.
        Senator Clinton.
        Senator Clinton. Thank you, Mr. Chairman.
        I would like to submit for the record a letter going out
    today to Administrator Leavitt from 45 Senators including three
    Republicans, asking that EPA with respect to the mercury rule
    withdraw the entire proposed rule package and repropose a rule
    for adequate comment that meets the terms of the 1998
    settlement agreement.
        I agree with the Chairman that this has been going on a
    long time but the sequence of events are such that the 1990
    Clean Air Act legislation mandated the study. It took longer to
    do than was anticipated. Originally, it was thought to be a 3-
    year study, it turned into a 5-year study. Shortly after the
    study was completed, the NRDC sued the EPA to force action,
    then proceeded to have a long, drawn out negotiation. There was
    a settlement reached in 1998 and under the terms of the
    settlement, rules were to be promulgated by December 2000 and
    that was shortly before the end of the Clinton administration.
    It is to the Bush administration's credit, although it is under
    a court order to proceed with mercury rulemaking and that is
    what we all want. We want good mercury rulemaking that makes a
    difference in the atmosphere. I think however we got here,
    whatever the sequence happened to be, we need to proceed as
    expeditiously as possible and there is considerable concern on
    the part of 45 of us about the proposed rule.
        In addition, I know there was a recent white paper issued
    by the EPA Office of Research and Development on mercury
    control technologies last week. The paper cast doubt on most of
    the agency's arguments regarding the availability of technology
    for mercury control and potential emissions reductions. I would
    also like to submit ``The Control of Mercury Emissions from
    Coal-Fire, the Electric Utility Boilers,'' a report done by the
    Office of Research and Development from the EPA from the
    Research Triangle Park, North Carolina for the record.
        Senator Voinovich. Without objection.
        [The referenced document referred to may be found on page
    185.]
        Senator Clinton. This report says that existing widely used
    technology such as fabric filters could achieve a 90 percent
    reduction of mercury at bituminous coal plants and 72 percent
    removal at sub-bituminous. If you added a wet scrubber, the
    reduction is 98 percent. It further says that activated carbon
    injection technology, which can be added in 1 year's time, can
    achieve 70 percent reduction in mercury from all coal types by
    2010. Adding a fabric filter to that which can be done in 2
    years achieves a 90 percent reduction. This is without new
    technology. This is not even going as far as Senator Carper and
    I would like to see but using existing technology. I hope
    Administrator Leavitt, as you do study this important rule, you
    will take a look at this report. I don't understand a lot of
    it, it is very technical but I know you have lots of people
    around you who do and really calculate the cost of this.
        I am one of those who have long advocated doing whatever we
    could to incentivize the utility industry to take these
    actions. This is a public health issue. This affects all of us.
    The numbers of people who are going to be impacted by the
    continuing level of emissions is such that we are paying on one
    hand for health care costs when we could be trying to find a
    way of acting much more efficaciously and cost effectively to
    deal with this problem at the source.
        Again, this letter from 45 Senators, including 3
    Republicans, will be on the way to you but the bottom line is
    we all need to work together to get this underway. I think
    there is a perception that you are very thoughtfully trying to
    go through all this and I don't in any way doubt that, because
    I trust you to really take a hard look at all this, but there
    are other factors at work, other concerns and special interests
    at work and it is so important that we go as far as we possibly
    can technologically.
        If there are costs associated with it, let us honestly look
    at those costs. Let us not end the rulemaking at a point less
    than where we should just because there are costs attached to
    it. Let us figure out whether there is a way we can help to
    defray them or deal with them but it is so critically
    important.
        I thank you for your consideration.
        Mr. Leavitt. Quick responses on both of those. As you
    indicated, I am under a consent decree to act by December 15,
    2004. Given the nature and complexity of this, we are moving
    forward with all rigor to assure that we get there. It is my
    intention to do it in a way that will serve the best interests
    of the American people and those who have, as we all have,
    concerns.
        This turns, in large measure, around the technology. The
    paper you have, I have read and have been doing all I can to
    understand it. I have had a chance to spend enough time
    crawling around the blueprints of power plants to begin to know
    more than I expected I would, but I would just make this
    conclusion. There are places and ways that you can use other
    technologies to get high percentages but they are unique.
        In the Northeast for example, in New England, there are a
    couple of power plants that have achieved high levels of
    reductions. They bring in coal from the Philippines and they
    have been able to use particular combinations of circumstances
    that allow them to uniquely do it, but you can't deploy that
    over 1,200 power plants. We have every reason to be optimistic
    about ACI technology. So far, we have used ACI technology on
    medical waste incinerators, and we have used them very
    effectively and we have been able to achieve almost 90 percent
    on municipal waste incinerators.
        We haven't had that experience yet on coal-fired power
    plants. In fact, we have never put ACI technology on a coal-
    fired plant and had it used over a period of time sufficient to
    know whether it will work with all kinds of coal in all kinds
    of circumstances. If we are going to be asking the American
    people to invest billions into this technology, and we are, we
    ought to make certain that it works. So the reason we are at
    the 2010 conclusion isn't because it doesn't exist, it is
    because we have to have it adequately tested and widely
    deployable. There are lots of considerations, as you said.
        My purpose is to do this by the time the court has ordered
    me to do it and to do it in a way that will clearly make the
    biggest gains we can, but do it in a way that will also protect
    our competitiveness. I believe we can do that. As you have
    suggested, technology is the key, but we ought not to move
    until we have the technology. Once we have the technology, it
    will take care of the problem.
        Senator Voinovich. Thank you, Administrator. I am delighted
    to know that you are getting into the issue of mercury because
    there is a big debate out there about where the technology is.
    There are some that argue that co-benefits from NOx reduction
    of emissions would do a great deal to reduce mercury but then
    how do you go to the next step. With the letter coming from
    many of my colleagues, you are going to be in the eye of the
    storm on this one. Again, it is good science that will make the
    difference.
        Thank you very much for being here. We appreciate the new
    leadership you are bringing to the Environmental Protection
    Agency. Thank you for your conscientiousness and your
    commitment to making our air cleaner and minimizing the impact
    on public health and also understanding that we have to do that
    within the framework of the economy of this country and right
    now, jobs, jobs, jobs.
        Thank you.
        Senator Clinton. Mr. Chairman, if I could correct the
    record, it is seven Republicans, not three.
        Senator Voinovich. I bet they are from the Northeast.
        Senator Clinton. Well, that is right. Not all of them,
    though. John McCain is on there.
        Senator Voinovich. Will the other witnesses come forward? I
    have just been informed that the vote has now been moved to 12
    o'clock.
        We are very fortunate to have Robert Eckels, County Judge,
    Harris County, TX. For those folks not from Texas, a County
    Judge in our neck of the woods is a County Commissioner.
    Michael Fisher is president of the Greater Cincinnati Chamber
    of Commerce, and George D. Thurston is from New York University
    School of Medicine, Division of Environmental Medicine is also
    with us today. We are very happy to have all of you here.
        We will move quickly into the testimony and I would like to
    call on Judge Eckels first.

               STATEMENT OF ROBERT ECKELS, COUNTY JUDGE,
                           HARRIS COUNTY, TX

        Mr. Eckels. Mr. Chairman and members of the subcommittee,
    my name is Robert Eckels. I am the County Judge for Harris
    County, TX.
        Senator Voinovich. What city is in Harris County?
        Mr. Eckels. Houston is our county seat. We have 35 cities
    in the county and about 1.5 million people.
        I want to thank the committee for allowing me to be here
    today to testify and asking me to comment on implementation of
    the 8-hour ozone and fine particulate National Ambient Air
    Quality Standard.
        In the years that I have served as a legislator first and
    later as Harris County Judge and as a member of the Board of
    Directors of the National Association of Counties, I can tell
    you from firsthand experience that air quality issues are among
    the most complex that any elected official can experience.
    Clean air is of vital interest to all of us. It is important
    for the health of our citizens and for the health of our
    economy.
        We have made good progress but as we have noted here this
    morning, much more work is needed. I would like to relay to the
    committee my personal experiences in developing clean air plans
    to maintain the 1-hour ozone standard in the Houston-Galveston
    region. I believe it is relevant to what other major
    metropolitan areas are about to experience as the 8-hour ozone
    and fine particulate standards are implemented.
        We have embarked on a consensus plan with industries
    investing $4 billion over the next 3 years to reduce nitrogen
    oxides by 80 percent. The Texas Legislature funded the Texas
    Emission Reduction Program, a $150 million per year on a 7-year
    grant to reduce emissions from mobile source sectors faster
    than the Federal controls would otherwise achieve. We have
    reformulated the diesel in our region, reduced speed limits,
    and in some cases, banned the use of commercial law maintenance
    before noon and initiated the first phase of a light rail mass
    transit system in the Houston Area at a $350 million cost
    without Federal funding. This is on top of an 80 percent
    reduction in industrial and automobile hydrocarbon emissions
    over the past 20 years. I believe it speaks well for our strong
    commitment to clean air in the Houston region.
        As a public official, I also worry about the economic
    vitality of our region. In 2000, our local chamber of commerce,
    the Greater Houston Partnership, sponsored an independent
    socioeconomic study of our clean air plan by respected
    economists at the University of Chicago and Houston.
        The study concluded that by 2010 the region would have
    38,000 fewer jobs, reduce gross regional product by $3.5
    billion and reduce tax receipts to the State and local
    governments by $300 million each year. There are serious
    economic consequences by any yardstick but we did feel they
    were important for us to attain that 1 hour standard.
        Looking to the future, some 530 counties nationwide will be
    designated as nonattainment for the 8-hour ozone standard. We
    are in the process of making similar determinations for the
    fine particulate standard. EPA is now in the process of
    developing the regulatory framework for States to implement
    these standards and their modeling shows that many of these
    areas will attain the standards with measures already in place
    or planned. I do want to commend the EPA and the Administration
    for their efforts.
        However, some large metropolitan areas such as Harris
    County in the Houston region, Philadelphia, the New York City
    metropolitan area, that same modeling shows continuing
    nonattainment of 8-hour ozone standard as far out as 2020. This
    is after significant reduction in transport emissions, cleaner
    fuels and engines and local 1-hour ozone control measures. It
    presents several important public policy issues for EPA, local
    elected officials and for this committee to consider.
        The first policy issue for consideration is the attainment
    deadlines proposed for some of these areas. EPA has proposed
    attainment deadlines of the 2010 to 2013 timeframe well before
    emission reductions from Federal measures such as transport and
    mobile source controls are fully realized. As a result, in
    these areas, we will not be able to submit approval State
    implementation plans to the EPA and in such circumstances, the
    Clean Air Act imposes sanctions including the loss of Federal
    highway funds which in our county alone could be up to $1
    billion a year.
        One options suggested is to have States volunteer to move
    into a more severe air quality classification to get more time
    for attainment. I can tell you as an elected official it is not
    really a feasible option. The second issue is attainability of
    the standards. I am not here to say we need to change or
    eliminate the 8 hour ozone or fine particulate standard, that
    is for public health professionals to decide. I can say that
    the EPA modeling suggests these standards will not be
    attainable in some areas in the foreseeable future despite our
    best efforts.
        Again it places the severe economic sanctions under the
    Clean Air Act. I don't think it is good public policy, it
    creates division in our community and results in litigation
    which further slows the clean air process.
        Where do we go? First, I would say we need attainable
    standards and attainment deadlines that are technically and
    economically feasible. We need sound public policies that will
    not attain them in the foreseeable future. Senator Carper and
    Administrator Leavitt agreed earlier, it is not really fair to
    be held responsible for the actions of others. So I believe we
    should capture the admission reductions benefits from existing
    and pending Federal control measures before implementing the
    next round of the very high cost controls at the local level.
        We need to take a closer look at how our current air
    quality management process is working and how it can be
    improved. We have invested literally hundreds of billions of
    dollars over the last few years at the Federal, State and local
    control measures in many of these non-attainment areas and
    suggest that we have systemic science and policy problems that
    need to be addressed.
        In conclusion, speaking as a representative of the National
    Association of Counties, many of the rural and suburban
    counties in our communities are brought into the plans because
    they are up wind from a non-attainment area or large urban
    area. They need a seat at the air quality table as well and
    should not be penalized solely due to geography.
        They need the resources, support and flexibility from the
    Federal agencies you have oversight for.
        I share your comments earlier that clean air and economic
    development are interrelated and they do not have to be
    mutually exclusive. It is an obligation, as we develop policy,
    that the citizens of this country expect us to take very
    seriously a solution I think they will be looking closely for.
        Senator Voinovich. Thank you. Are you representing NaCo
    today?
        Mr. Eckels. In my capacity as a former chairman of the
    Committee on Environment and Energy for NaCo and as a member of
    the board of directors. I am here as a NaCo representative as
    well.
        Senator Voinovich. It would be very, very helpful if NaCo,
    the National Governors Association, the U.S. Conference of
    Mayors, the Municipal League would spend some time looking at
    where we are going in this area and come back with some of your
    thoughts to the committee. You are the ones who are going to
    have the obligation to implement these rules and regulations. A
    consensus among the various groups, a bipartisan consensus
    would be greatly appreciated by me and all the members of this
    committee.
        Mr. Eckels. This is an issue that cuts across all the
    counties and we will be happy to do that for you.
        Senator Voinovich. Mr. Thurston.

    STATEMENT OF GEORGE D. THURSTON, NEW YORK UNIVERSITY SCHOOL OF
             MEDICINE, DEPARTMENT OF ENVIRONMENTAL MEDICINE

        Mr. Thurston. There has been a lot of discussion of the
    costs of meeting the clean air standard. What I really want to
    talk about today are the ongoing costs we have of adverse
    health effects to the U.S. public, the fact that we have not
    met these standards, and that we need to meet them as rapidly
    as possible so that we stop incurring those health costs.
        The adverse health consequences of breathing ozone or
    particulate matter are serious and well documented. Ozone is a
    highly irritating gas which is formed in our atmosphere in the
    presence of sunlight from other ``precursor'' air pollutants,
    including nitrogen oxides and hydrocarbons. These precursor
    pollutants, which cause the formation of ozone, are emitted by
    pollution sources including automobiles, electric power plants,
    and industry.
        Particulate Matter air pollution is composed of two major
    components: primary particles, or ``soot,'' emitted directly
    into the atmosphere by pollution sources such as industry,
    electric power plants, diesel buses, and automobiles, and;
    ``secondary particles'' formed in the atmosphere from sulfur
    dioxide and nitrogen oxide gases, emitted by many combustion
    sources, including coal-burning electric power plants.
        Observational epidemiology studies have shown compelling
    and consistent evidence of adverse effects by ozone and PM
    including: decreased lung function, a measure of our ability to
    breathe freely; more frequent respiratory symptoms; increased
    numbers of asthma attacks; more frequent emergency department
    visits; additional hospital admissions, and; increased numbers
    of daily deaths.
        Among those people known to be most affected by the adverse
    health implications of air pollution are: infants, children,
    those with pre-existing respiratory diseases, such as asthma
    and emphysema, older adults, and healthy individuals exercising
    or working outdoors.
        In my own research, I was principal investigator of an NIH
    funded research grant that showed in an article published in
    the Journal of the American Medical Association (JAMA) that
    long-term exposure to particulate matter air pollution is
    associated with an increased risk of death from cardiopulmonary
    disease and lung cancer, as displayed in Figure 1. In fact, the
    increased risk of lung cancer from air pollution in polluted
    U.S. cities was found in this study to be comparable to the
    lung cancer risk to a non-smoker from living with a smoker. We
    really have no choice. You can choose whether to live with a
    smoker or not but you have no choice but to breathe the air in
    the city that you live. Thus, the health benefits to the U.S.
    public of meeting these new air quality standards by reducing
    ozone and particulate matter will be substantial.
        Air pollution affects a much broader spectrum of human
    health than mortality. This is actually something I presented
    in 1997, when the late Senator Chafee was running the
    committee, pointing out the pyramid of effects, not just
    mortality. I made up these working estimates of what kind of
    health benefits there could be in New York City on an annual
    basis from meeting the then proposed standards.
        Unfortunately we haven't made a lot of progress if you look
    at the next figure. The other plot showed from 1970, but I
    don't know how long we are going to try to take credit for what
    happened in the 1970's. We have to look more recently. Over the
    last 20 years, we have been basically flat. This is from an EPA
    trends report. From 1993 to 2002, the last 10 years of data
    reported, was actually a 4 percent increase nationwide in
    ozone. We are not making a lot of progress in recent years.
        Similarly, the next chart is from a paper that is being
    published soon. We can see, while there was great progress made
    in controlling fine particle levels over time, since 1995 the
    progress has slowed significantly, sort of like ozone: flat. If
    you look at the map, you see where the biggest problems are.
    The green areas are where we are clearly meeting the standard.
    These are spatial averages of metropolitan areas.
        The places where we have a problem are in yellow, orange
    and red. We see the worst problems are in California, which is
    largely traffic related, and then in the eastern United States
    in the Ohio Valley and Midwest and the Southeast. If you look
    at this plot, you will see a lot of the problems we are having
    today are related to the large sulfur oxide emissions from
    coal-fired power plants. To paraphrase a fairly famous
    political campaign, ``It's the power plants, stupid'', and they
    are really causing a lot of pollution. I agree with the
    Administrator: we need a regional approach, and go after the
    low hanging fruit, which he says are all gone. But, really, the
    fact is that we changed the New Source Review (NSR) regulations
    to change the compact that was made when the Clean Air Act was
    developed in the 1970's which was that the power plants would
    be exempted from the requirements of the Clean Air Act until
    they upgraded. That was a covenant that was made.
        These new changes proposed in the New Source Review are
    violating that covenant, and allowing these sources which, if
    you are worried about jobs, then I agree with what Senator
    Inhofe said, we ought to go after the most pernicious
    particles, which certainly coal-fired power plants and residual
    oil power plants are among those. We ought to go after the
    things uncontrolled, the low hanging fruit. Certainly, these
    power plants, this bulls eye, certainly points to those power
    plants.
        Overall, we must move forward in a vigorous fashion to
    achieve the new PM and ozone standards throughout the Nation as
    quickly as possible. If we don't, the U.S. public will
    unnecessarily continue to bear the ongoing diminished quality
    of life and health care costs we presently pay because of the
    adverse health effects of these air pollutants.
        Thank you for this opportunity to testify.
        Senator Voinovich. Mr. Fisher.

      STATEMENT OF MICHAEL FISHER, PRESIDENT, GREATER CINCINNATI
                          CHAMBER OF COMMERCE

        Mr. Fisher. I appreciate the opportunity to be here today.
    I think my role is going to be to talk about a community that
    has been in a non-attainment status, albeit moderate
    nonattainment for ozone.
        First of all, our chamber is a 6,000 member chamber. We
    have companies ranging from the biggest companies in the world
    like Procter and Gamble, Toyota and GE Transportation to sole
    proprietors. About 80 percent of our businesses have fewer than
    50 employees in the greater Cincinnati area. About 1,000 of our
    companies are manufacturing companies.
        Our region is unique. We have a 15 county region covering
    three States and that three State dimension makes it
    particularly interesting for these kinds of issues and
    approximately 2 million citizens.
        To put these comments in some personal context, I actually
    am only recently in the civic role of the Chamber president. I
    have spent the majority of my career as an entrepreneur
    building what became a successful global automotive supplier,
    creating 2,500 jobs in 11 countries the vast majority of which
    are in the United States, so I do know a little bit about
    creating jobs. I am also a life long fourth generation resident
    of Cincinnati. I have four kids and our 8-year-old son, Johnny,
    has asthma, so I am very sensitive and keenly interested in
    these issues that affect health.
        As a Chamber and as a community, we are about trying to
    capture our place as one of the world's favorite American
    business centers. Certainly you can't be favorite without
    having a great economy and a healthy community.
        Our Chamber has been very involved in clean air for some
    time. We were a co-founder of a regional ozone coalition. We
    are currently working with our metropolitan planning
    organization (authority), OKI on the forthcoming standards and
    even our Chamber website has helpful hints about what you can
    do for cleaner air.
        I think as recognized during previous testimony by
    Administrator Leavitt on the national scale, even at the local
    level, Cincinnati, while being in nonattainment, has made
    significant progress over the last number of years. I think it
    is also a bit ironic that in 3 weeks I will be back in
    Washington leading a delegation of Cincinnatians to receive
    recognition at the National Press Club as being one of
    America's Most Livable Communities and yet we have this black
    eye and stigma of being considered a non-attainment area as we
    sit here today.
        To be a little more specific about impact and so forth in
    our community, in 1995 there was a study that projected about
    14,000 manufacturing and spinoff jobs would be lost in our
    community in the 1995-2000 period. In fact, from 1995-2003,
    35,000 manufacturing oriented jobs have been lost. We know that
    is not exclusively related to this non-attainment designation
    but we know non-attainment has been a factor.
        It has also been a significant factor relative to business
    expansion and new business investment. Many of you may know
    that about 80 percent of a region's job growth comes from
    existing businesses and their expansion. The extra costs and
    complexities involved with compliance has been a disincentive.
    Our Chamber has been very involved in international economic
    development attracting foreign companies and companies around
    the country to invest in our region. We have been told that our
    non-attainment status has been a reason why some companies
    haven't even considered investing in our region. In fact, one
    environmental consultant said specifically four companies chose
    not to make additional investment in our area because of our
    non-attainment status.
        I think it has been captured already today but the current
    laws tend to be a bit confusing. When I referenced this
    increased cost to business, let me make a couple of points. We
    have found in Hamilton County, our core urban area, they have
    encouraged us, businesses I should say, to have a consultant
    engaged in the permitting process. While we think it is good to
    have consultants and attorneys employed, that is not the type
    of job growth we are typically most interested in.
        In fact, as I talked to some friends of mine who are in the
    plastic bag manufacturing industry and the specialty chemical
    industry, the length of time required for permitting has been
    particularly problematic to them as they pursue new business.
    We are talking 12 to 18 months in some cases.
        Referencing in particular the utilities and coal industry,
    our big utility, Cinergy will spend about $1.2 billion on
    emission control equipment between 1990 and 2010 and another
    industry that is important to our region in this case
    represented by a company like AK Steel who is spending over $65
    million in emission controls at a time when they are being
    challenged on many other fronts competitively.
        We also experience some interesting things in terms of
    process versus substance which we can get into in terms of our
    being recognized as being in nonattainment because the fact is
    our air is cleaner and meeting all standards and we have not
    experienced one monitoring violation since 1995. Again, I think
    it is a process versus results dilemma at times.
        Senator Voinovich. Mr. Fisher, could you wrap up your
    testimony?
        Mr. Fisher. Yes, sir.
        Finally, in terms of help from Congress, again, we seek
    predictability, ample time for businesses to implement new and
    best technology as Senator Clinton referenced, being sensitive
    to compliance costs particularly as related to small businesses
    and encouraging incentives in every way.
        With that, I thank you for the opportunity.
        Senator Voinovich. I appreciate you all being here today.
        Mr. Thurston, I want to mention the fact that according to
    the statistics I have in front of me, in the last couple of
    years NOx has gone down 13 percent and sulfur dioxide has gone
    down 9 percent. It is my understanding that these are
    precursors for ozone and PM.
        First of all, is New York City in attainment?
        Mr. Thurston. I don't think it has been designated yet.
    That is about to happen.
        Senator Voinovich. No, no, I am talking about the current
    ambient air standards. Have they met the current ambient air
    standards?
        Mr. Thurston. I don't believe so but I am not an expert on
    attainment.
        Senator Voinovich. That is interesting because I wonder how
    many of these communities on this board haven't even met the
    current ambient air standards and are now being asked to take
    on some more responsibilities. That would be an interesting
    statistic.
        Mr. Fisher, what impact do you believe these new ambient
    air standards are going to have in terms of your community, in
    terms of job creation? I was shocked that you projected the
    loss of 14,000 jobs between 1995 and 2000. Am I correct, you
    said between 1995 and 2003, it has been 35,000?
        Mr. Fisher. These were manufacturing jobs.
        Senator Voinovich. Have you done any calculation on what
    impact these new standards are going to have on the economy of
    your region?
        Mr. Fisher. I don't think we have statistical projections
    yet but we do know, as I referenced anecdotally, we have
    national site location consultants telling us our non-
    attainment status and these increasing standards will make it
    difficult for companies to consider making investments in our
    region.
        Senator Voinovich. Are you familiar with the Clear Skies
    legislation?
        Mr. Fisher. Somewhat.
        Senator Voinovich. Mr. Eckels, are you familiar with it at
    all?
        Mr. Eckels. Yes, sir.
        Senator Voinovich. I would like you to comment on the
    alternative between Clear Skies and understanding, and you were
    here for the things I ticked off when Administrator Leavitt was
    here that there are national things going on. In fact, Mr.
    Fisher, I don't know if you know this or not, but some of the
    most significant research on the issue of particles is being
    done at the Children's Hospital at the University of
    Cincinnati. I visited with them and am anxious to see what they
    have to say.
        Judge Eckels, could you comment on this versus Clear Skies
    and your opinion in terms of the alternative?
        Mr. Eckels. My personal opinion is that Clear Skies is a
    much simpler approach. It has at a local level a much easier
    compliance for the attainment for the local jurisdictions,
    particularly on the East Coast. There are still some areas that
    don't fall into attainment under Clear Skies. Houston is one of
    them that still does not meet the standards but in general, it
    is a much easier method. The State implementation plan for most
    local jurisdictions, most States would simply be Clear Skies
    and that would be the end of their plan. It would not be a
    long, cumbersome, expensive process for them because they
    would, through the efforts of the Clear Skies legislation, have
    a very simple process and fall into compliance with the
    requirements of the Act.
        Senator Voinovich. In other words, with something like
    Clear Skies, it lays out NOx, SOx, mercury over a period of
    time that the States in putting together their SIP, it would be
    easier to try and put something together to comply with this
    rather than dealing with silos that are out there in terms of
    the current law.
        Mr. Eckels. Clear Skies is much easier for the local
    jurisdictions and the States to put together than the current
    complex process that has evolved and the frustrations we have
    particularly in areas like Houston and throughout the Nation is
    that so many of the provisions of the State implementation plan
    requires Federal action. We cannot control the cars, we don't
    have a national clean car yet, we don't have national clean
    fuel, we don't have national clean diesel, so we are having to
    find things that eat around the edges of the plan and we are
    not able to under the current schedule capture national clean
    cars.
        Even if you have a national clean car, you have a fleet
    turnover issue and probably New York is worse than Houston. The
    cabs there are not known for being new cars. So you have to
    have time for that to implement. Clear Skies lets us capture
    all those Federal control measures and makes it much easier for
    the States and localities to comply with the rules and do their
    State implementation plans.
        Senator Voinovich. Senator Carper.
        Senator Carper. Judge Eckels, you are a judge, right?
        Mr. Eckels. County Judge of Harris County. It would be
    equivalent to county executive or county mayor in other parts
    of the country.
        Senator Carper. We don't have county judges in my State, we
    have State judges. Our county commissioners are county
    commissioners, so thank you for clarifying that.
        I want to go back to something I thought I heard you say,
    talking about being in compliance. Even under the Clear Skies
    proposal of the Administration, you would still not be in
    compliance I think you said by 2020. As you probably heard from
    earlier questions, there are other alternatives to Clear Skies.
    One is that proposed by Senator Jeffords, very rigorous
    standards and a rigorous timetable. A number of us have come up
    with what we think is a third way of getting at the same issue.
    It is called the Clean Air Planning Act. I don't even know if
    you are familiar with it but if you are not going to be in
    compliance in your county under the Clear Skies proposal, I am
    wondering where you would be in compliance in the third way if
    the Clean Air Planning Act was adopted.
        Mr. Eckels. I cannot speak to your legislation. I know that
    on the specific legislation Senator Jeffords has sponsored, the
    modeling and the information we have seen on that shows us not
    in compliance under any of these standards because of the
    issues of fleet turnover and implementation. When you look at
    the motor vehicles and the motor source emissions, it takes
    time for the new cars to come into place. When you look at the
    new diesel emissions, the clean fuel can come on board much
    quicker but it is probably a 20-year replacement cycle on the
    heavy diesel emissions. Then we have the larger Federal
    controls on trucks, ships, airplanes, locomotives, things we
    cannot control locally. I will be happy to look into the
    legislation you have sponsored in well but in general, we have
    not seen any other legislation that would bring every area into
    compliance with the requirements of the Act by 2020. There are
    still going to have to be some local controls and we are
    willing to do those things but it seems it would be more
    sensible and as you mentioned earlier that we would first take
    those things we cannot control locally, the Federal Government
    could capture those benefits plus Federal controls, the
    transport issues you are dealing with in this committee, the
    national standards for fuels and vehicles, that we would
    capture those benefits before we start the much more expensive
    marginal benefits we have to do locally. We are even saying
    people can't mow their yards in the morning. That is measuring
    pounds of emission reduction, not tons of emission reductions.
    It is very expensive and very inconvenient for folks.
        As we start evolving in that process and as we learn from
    the control measures we put in place, we can start developing
    better science and better measures and better economics to make
    it work for everybody.
        Senator Carper. I don't know what your experience is in
    Houston with the mass transit but are you all using mass
    transit as a way to achieve attainment?
        Mr. Eckels. Yes, sir, we are.
        Senator Carper. Give me some idea of what you are doing.
        Mr. Eckels. We have probably the Nation's most extensive
    use of high occupancy vehicle lanes, dedicated bus lanes in the
    major thoroughfares coming in and out of the city. We move tens
    of thousands of people through what is evolving into the high
    occupancy toll lanes in some cases. We have built our first
    train.
        Senator Carper. Do you let folks who are using energy
    efficient cars and hybrids use your HOV lanes?
        Mr. Eckels. We have not to this point. To this point, it is
    a three-plus passenger car pool typically. We have had a unique
    partnership between the Harris County Toll Road Authority and
    our community. The county owns the toll roads and we are now
    building a high occupancy toll facility that is essentially a
    transit facility that was not built with FTA dollars, it is a
    totally different issue on flexibility but we used local toll
    revenue to build the transitways for the buses. We will mix
    single occupancy vehicles on there to help pay for the transit
    facility but it provides a better, more efficient transit
    facility both on West Park and I-10. We are in the middle of
    the county doing the commuter rail study, partnering with Metro
    and the transit agency. They have built an 8 mile segment of
    light rail in downtown Houston where we have recently passed a
    referendum to have 70-plus miles of light rail. I don't think
    the money is there for that totally but we will be merging the
    light rail and commuter rail building on the bus/car pool
    program.
        Beyond the Metro service area, Metro serves probably two-
    thirds of the Houston region through our regional
    transportation planning council which I also chair. We are
    establishing expanded van pool, car pool and alternative fuels.
        Senator Carper. Other than that what are you doing?
        [Laughter.]
        Senator Carper. That was pretty comprehensive.
        Mr. Thurston, I am struck by the fact that over in Europe
    about 40 percent of the cars, trucks and vans sold last year
    were diesel powered. They have lower sulfur diesel fuel over
    there that is mandated and produced than we do. I was at the
    Detroit auto show about 2 months ago and talked to a fellow
    named Dr. Dieter Zetcha who is the CEO of Daimler Chrysler. He
    shared with me a partnership they are entering with Archer
    Daniels, a big agricultural company to see if we couldn't
    expand the use of clean burn, lean burn diesels in this
    country. Forty percent in Europe were lean burn/clean burn
    diesel last year. I think in this country it was about .4 of 1
    percent by comparison.
        As you know, as we go forward in time, we have more
    stringent emission standards for diesel powered vehicles. The
    folks at Daimler Chrysler and Archer Daniels are interested in
    seeing if there is a way to use renewable fuel to mix it with
    diesel fuel and soy bean oil. We are trying to do that in our
    part of the world as well. We have a soy/diesel mixture of 20
    percent soybean oil, 80 percent diesel, reduce our dependence
    on foreign oil, provide another way to use a commodity we have
    a little bit too much of.
        I just want to ask some of your thoughts on our ability to
    try to address our dependence on foreign oil, to help reduce
    the emissions of CO2, diesel puts out a lot less
    emissions of CO2 than regular gasoline powered
    engines, internal combustion engines. Talk to us as we go
    forward with ever more stringent requirements for clean diesel,
    what are the implications for introducing a new generation of
    diesel powered vehicles in our country.
        Mr. Thurston. I certainly think that new technology is
    really the way to go to address our pollution problems. I think
    that is what America is about. It is about confronting
    problems, not delaying and putting them off. Senator Voinovich
    forgot to ask me about the Clean Skies Program. It seems to me
    that the Clear Skies Program is years and years away and there
    is lots and lots we could do sooner and faster.
        I mentioned the new source review. If that were implemented
    vigorously by this Administration, that would cleanup things
    really fast and cheaper and have less impact on places like New
    York. Senator Voinovich pointed out New York has a problem with
    ozone and PM. I served on the State DECs committee and they
    showed us some analysis where if they zeroed out all the
    pollution sources in New York State, they still would violate
    the standards because of all the pollution spewing across our
    border. I think every State has a right to have air that meets
    the air quality standards entering it and that is not happening
    today. A lot of it has to do with the power plants that I
    pointed out.
        We have to be much more vigorous in going after those and
    cleaning up the diesel emissions. The sulfur regulations that
    were implemented by the last Administration that are going into
    effect now are going to do a lot to help California. We saw on
    the plot I had that they have a problem with fine particles.
    Those sulfur reductions are going to lower the particle levels
    in southern California because of that. Also the new diesel
    regulations are going to lower that problem. We are addressing
    the California problem pretty well and they are going to be
    making progress.
        If you look nationwide over the last decades in the EPA
    reports, California has the largest progress that is being made
    in meeting the ozone standards. One of the worst is the
    Midwest, Region 5. That is because we have these power plants
    and they are just not being cleaned up. I visited a power plant
    years ago in Pennsylvania and they had two units. One of them
    was grandfathered in and was burning coal with no controls and
    spewing pollution and the one next to it had modern emission
    controls on it, had coal cleaning plant, kind of a dirty place
    and I don't recommend it but it had the effect of cleaning up
    the pollution. They had one unit putting out a minimal amount
    of pollution and another one right next to it that was putting
    out pollution uncontrolled. Why? Not because they couldn't,
    because they didn't have to. I think it is time we lived up to
    that covenant that when they upgrade these plants, they
    implement the emission controls that were promised to people
    like Senator Muskie back in the 1970s when these deals were
    made. Now we are abrogating those agreements by not
    implementing the new source review properly. We need to do
    that, implement all of these controls.
        Senator Carper. Let me say to Mr. Thurston, I appreciate
    the answer. It wasn't the answer to my question but that was a
    good answer.
        Senator Voinovich. We have a vote and Senator Clinton
    hasn't had a chance to ask her questions yet.
        I would like to say to you that we respectfully disagree on
    new source review. I think we need certainty here and I think
    the Administration has come back with a new rule on new source
    review, it is understandable, it tells everyone where they are
    and will get us out of the environment that we are in today
    where power plants have in the past increased the efficiency of
    their facilities by putting in new boilers, producing energy at
    less cost, in many instances not pumping up more emissions into
    the air and reducing them instead of having a situation today
    where everybody is in court over this issue. If you look back
    over the record in terms of where we are in the environment in
    terms of cleaning up the environment, the lawsuits have really
    clogged our efforts to make this country have better air.
        If we could get some understanding for example with Clear
    Skies, maybe with a combination of Clear Skies and Senator
    Carper, some understandable, clearcut way of doing this, I
    think we would be far more ahead in terms of cleaning up the
    environment, its impact on public health and at the same time
    providing energy sources we need in this country so that we can
    continue to be competitive in the global marketplace. It is
    this harmonization that I think we should be striving for
    today.
        Mr. Thurston. I agree, we disagree because I am no lawyer
    but I understand that the effect of these lawsuits has many
    times been to speed up things like getting the criteria
    documents finished sooner and issues like that, so moving
    things forward through using the lawsuits. You talk about costs
    and the thing I have to keep reminding you is you are trying to
    lower costs. The way to lower costs is to clean up the air
    because these costs are being born by the American public. All
    we are doing is talking about transferring the costs we are
    paying right now in health effects to the American people back
    to the polluters. That seems fair. That seems like justice and
    justice delayed is justice denied.
        Senator Voinovich. Let me tell you this. From somebody who
    has lived in a manufacturing State, I am sorry that some people
    don't understand but I have lived in a manufacturing State, I
    consider myself to be an environmentalist but if we don't
    balance this thing between some of you on the environmental
    side.
        Mr. Thurston. I am not on the environmental side, I am on
    the health side.
        Senator Voinovich. The point is if we don't balance it, all
    we are going to do is move the jobs to China, to India and
    other countries. It is happening now and they are moving into
    countries that don't have the environmental regulations that we
    have. For instance, global warming, if you move the jobs over
    to China where they don't have the environmental laws that we
    have here in the United States or India or some of these other
    countries, in terms of global warming, instead of helping the
    problem, you exacerbate the problem.
        Senator Carper. Believe it or not there is a third way and
    it is the Clean Air Planning Act I keep talking about which you
    and I need to talk about a little bit more.
        Senator Voinovich. I am supposed to be the Chairman here,
    not you. Forgive me.
        Senator Clinton.
        Senator Clinton. I would like that to continue. Maybe we
    can reach some kind of deal here because clearly as is evident
    there are strongly held opinions on all sides of this. The
    bottom line for me as I keep saying over and over again is that
    I think we are spending money in other areas that we don't need
    to spend because we have not figured out how to incentivize
    those who are responsible for the emissions to move more
    rapidly to clean them up. I don't understand why this is so
    complicated. I believe there are solutions out there that for
    whatever reason we seem to be dug in on different points of
    view.
        My bottom line too is that I am deeply concerned about the
    health effects. The more studies that are done, the more we
    know how much we are paying in health care costs because of the
    effects of particulate matter and ozone. One of the other
    studies that has been done also published in the Journal of the
    American Medical Association last October looked at 271
    children under the age of 12 with active asthma in Connecticut
    and Massachusetts and measured their response to two air
    pollutants, ozone and very small particulate matter. The key
    finding is that a 1-hour exposure to air containing 50 ppb of
    ozone caused a significant increase in wheezing and chest
    tightness in those children and increased their use of symptom
    relieving drugs. In other words, ozone exacerbates asthma in
    children at concentrations below the current 1-hour level of
    120 ppb and even the new 8-hour exposure standard of 80 ppb.
        It is absolutely true that New York City's metropolitan
    area is a non-attainment area under the 1-hour ozone standard.
    It will be a non-attainment area under the 8-hour standard and
    we have an epidemic of asthma. The highest concentration of
    asthmatic children in our country are in Harlem and parts of
    the Bronx. As Dr. Thurston said, if we could eliminate every
    source of pollution that we had any control over, if we were
    given the tools to do that right now, if we could wave a magic
    wand and every taxicab and truck moved to clean fuel or clean
    diesel, whatever it might be, if we could control every
    emission that we had within the boundaries of New York City and
    New York State, we would still not meet the attainment
    standards. So this is a national problem.
        Dr. Thurston, the one chart you showed about ozone air
    quality, I think that is a chart that shows ambient
    concentration.
        Mr. Thurston. That is right.
        Senator Clinton. So yes we can see national standards of
    decreasing NOx and SOx, but if you look at a map of the
    country, if you take those national standards, yes, we are
    doing a good job in seeing it fall in many parts of the West
    because they don't have the wind currents, they don't have the
    industrial sources, but if you look at southern California and
    look at east of the Mississippi and go to places like
    Cincinnati or New York City, you see concentrations of
    particulate matter and ozone. This chart is the ozone air
    quality and the concentration has not decreased. In fact from
    1983 to 1992 it decreased 18 percent but from 1993 to 2002 it
    increased 4 percent.
        We have a problem in the eastern part of the United States
    and we are not acting in an expeditious manner to deal with
    that. I respect totally the Chairman's commitment to jobs and
    he knows a lot about this. He was a very successful mayor and
    Governor and the State he represents is one of the economic
    engines of our country. I just honestly believe that it is not
    an either/or issue, that we can do both.
        I understand Mr. Fisher's point about places where you are
    trying to recruit jobs that are from other parts of the country
    saying instead of going to Cincinnati because you are a non-
    attainment area, we will go to Austin, TX or go to Las Vegas,
    NV because you look at the figures and they are doing better.
    They are not doing better because of actions they have taken on
    themselves, they are doing better because of national
    conditions that you have very little control over in Cincinnati
    or that we have little control over in New York.
        I know this remains a point of contention and disagreement
    about the best way to proceed. I think everybody shares the
    same goal but we are gridlocked and it is unfortunate because
    we are seeing increases in concentrations of ozone and we are
    seeing impacts on health that are costing us money.
        I would like to ask the panelists to clarify in writing
    because we have to go vote any other suggestions you have. I
    read your testimony, but it is quite a general testimony and I
    understand but perhaps on behalf of not just yourself, Judge
    Eckels, but the National Association of Counties and perhaps
    Mr. Fisher on behalf of the Chamber and others and certainly
    Dr. Thurston because we are too smart a country not to figure
    this out.
        With respect to some of our competitors like China and
    India, we have no leverage over them and I think we have to
    develop some other means of trying to do so.
        Mr. Thurston. Couldn't we have U.S. companies building
    plants abroad to behave responsibly and build plants that meet
    the standards we meet here? Is there any way to do that?
        Senator Clinton. No, but I think there are ways through
    trade agreements and through perhaps invigorating some kind of
    international effort, we have obviously put Kyoto aside and
    there were good reasons in many minds to do that because there
    was no real standard imposed upon the developing countries but
    now I understand China has moved to impose some standards of
    its own with respect to emissions. So we should encourage that,
    we should provide incentives and assistance for that.
        Mr. Thurston. We should provide the technology that they
    can use and that is where we can get jobs, out of the
    environment that we can gain jobs by being first with the
    technology that others will use.
        Senator Clinton. I agree with that and I am very fortunate
    to represent some companies in New York that have a lot of this
    technology and are hoping to have a national market some day
    and are looking for an international market but right now there
    are not many incentives to do that.
        Mr. Chairman, we will keep working on this and we will
    hopefully come up with some consensus at some point. I hope in
    our lifetimes.
        Senator Voinovich. Thank you.
        I would like to say, Mr. Thurston, in terms of the Future
    Gen Project, I think you heard that mentioned earlier, that is
    I think a very, very good initiative. My feeling is we should
    develop our clean coal technology, we should use it, take
    advantage of it. We should sell it or give it away to other
    nations so that we help reduce their emissions and deal with
    the problem of global warming.
        Mr. Thurston. I agree with you on that.
        Senator Voinovich. Good. I just want to thank you all for
    coming. I would like to mention that the National Association
    of Manufacturers wanted to be here to testify and weren't able
    to. I am going to insert this in the record, without objection.
        [The referenced document referred to may be found on page
    208.]
        Senator Voinovich. I would hope the three of you on the
    panel, if you get other questions, would be willing to answer
    those questions in writing and get them back to us.
        Last but not least, Judge Eckels, I really, as the former
    chairman of the National Governors Association, president of
    the National League of Cities and as you know, there are a lot
    of good things we did together as a team. We were able to get
    the TANF legislation passed, the unfunded mandates and a lot of
    other things. I think it is really incumbent on the national
    organizations for you to get together and come back here with
    your thoughts on where we are going and how we ought to get
    there.
        Mr. Eckels. We will have that for you, sir.
        Senator Voinovich. Thank you.
        [Whereupon, the subcommittee was adjourned, to reconvene at
    the call of the chair.]
        [Additional statements submitted for the record follow:]

         Statement of Michael O. Leavitt, Administrator, Environmental
                               Protection Agency

        Mr. Chairman and Members of the Subcommittee, I appreciate the
    opportunity to come before you today to discuss the status of the
    Environmental Protection Agency's (EPA) progress in implementing the
    National Ambient Air Quality Standards for fine particle
    (PM2.5) and ground-level ozone pollution. I am proud to say
    that our implementation of these standards demonstrates that we are
    increasing the velocity of environmental progress. As an Agency and as
    a country, I believe we have initiated the most productive period of
    air quality improvement in the history of our Nation.
        On April 15 of this year, I am required by consent decree to tell
    certain local areas across the country that their air quality does not
    meet Federal health-based ozone standards. Later this year, pursuant to
    the schedule Congress enacted in the Consolidated Appropriations Bill
    of fiscal year 2004, I will do the same for those areas that do not
    meet Federal health-based fine particle standards. As a former
    Governor, I understand what this means.
        That is why I also want to tell the affected state and local
    governments, and their citizens, that the Federal Government is doing
    its part to help them meet these standards and improve air quality.
    That is why the Agency is moving forward with both the Interstate Air
    Quality Rule (IAQR) that we proposed last December and the proposed
    nonroad rule for construction, agricultural and industrial diesel
    equipment. Those two programs, as proposed, combined with other
    existing programs, including the Tier 2/gasoline sulfur standards for
    cars and light trucks, the NOx SIP Call Rule to reduce interstate ozone
    transport, and the Clean Diesel Program for new trucks and buses, would
    bring well over half of the counties now monitoring nonattainment into
    attainment with the fine particle and ozone standards between now and
    2015.
        In 1997, EPA adopted health-based standards for fine particles and
    ozone. At the time, the standards were controversial, especially the
    fine particle standards. Numerous parties challenged the standards in
    the courts. After several decisions, including a Supreme Court
    decision, the legal questions surrounding the standards were largely
    resolved in EPA's favor. Since the standards were issued, the
    scientific understanding of the fine particle problem has grown and
    deepened independent reviews of the scientific basis for EPA's
    decision, and additional research, have affirmed the need to regulate
    fine particles.
        With the legal issues settled, and our understanding of the science
    even further advanced, we are focusing on implementation of the
    standards. When the PM2.5 and 8-hour ozone standards were
    adopted, some raised significant concerns about whether it was possible
    to reduce air pollution enough to meet the standards at a reasonable
    cost. The picture is much improved since 1997. Today we already have
    proposed or adopted national programs that will bring many areas in the
    country into attainment with these standards at a reasonable cost. Our
    past experience under the Clean Air Act suggests that the development
    of cleaner technologies, which is continuing on many fronts, will help
    even the areas with the most difficult pollution problems make progress
    at a reasonable cost in new ways we cannot identify today.
        My testimony will focus on two different aspects of implementing
    these standards. First, in the Clean Air Act, Congress established a
    framework for attaining air quality standards. This framework includes
    milestones for defining the scope of the problem, setting forth
    solutions, and measuring progress. Today I will report on where we are
    in meeting these milestones. The second major aspect of implementation
    is identifying and achieving the emission reductions necessary for
    communities to meet the standards. We are doing this in a better way
    than we have done in the past. Even though we are at a relatively early
    stage in the implementation process (State plans are not due until
    2007), we have already identified major steps that EPA needs to take at
    a Federal level and are well on our way to adopting these measures. We
    are also working with our State, Tribal and local partners to address
    ozone and fine particle problems in a coordinated manner. We have put
    together a package of actions combining Federal action on stationary,
    mobile and nonroad sources that put us on the way toward meeting the
    national standards for fine particles and ozone.

                                   BACKGROUND

        Before discussing what we are doing to reduce fine particle and
    ozone pollution, I would like to explain why we need to reduce this
    pollution to bring healthy air to our communities.
        Of the many air pollutants regulated by EPA, fine particle
    pollution is perhaps the greatest threat to public health. Dozens of
    studies in the peer reviewed literature have found that these
    microscopic particles can reach the deepest regions of the lungs.
    Although it is difficult to establish causality, exposure to fine
    particles is associated with premature death, as well as asthma
    attacks, chronic bronchitis, decreased lung function, and respiratory
    disease. Exposure is also associated with aggravation of heart disease,
    leading to increased hospitalizations, emergency room and doctor
    visits, and use of medication. Based on 2000-02 data, 65 million people
    live in counties showing violations of the fine particle standards (see
    Figure 1). At the present time, PM2.5 violations are
    occurring primarily in California and in the eastern half of the United
    States.

    [GRAPHIC] [TIFF OMITTED] T4602.001

        Particulate matter is the general term used for a mixture of solid
    particles and liquid droplets found in the air. PM2.5
    describes the ``fine'' particles that are less than or equal to 2.5
    micrometers in diameter. PM2.5 is formed mostly through
    atmospheric chemical reactions. These reactions involve a number of
    precursor gases including sulfur dioxide (SO2) from power
    plants and industrial facilities; nitrogen oxides (NOx) from power
    plants, automobiles, diesel engines, and other combustion sources;
    carbon formed from organic compounds, including a number of volatile
    organic compounds from automobiles and industrial facilities; and
    ammonia from animal husbandry. These chemical reactions take place in
    the hot summer and cooler autumn and winter seasons. PM2.5
    can also be emitted directly from certain sources, such as industrial
    facilities, diesel engines and fire. PM2.5 concentrations
    can be elevated at all times of the year, not just in the summertime.
    Changing weather patterns contribute to yearly differences in
    PM2.5 concentrations from region to region. Also, PM2.5
    can also be transported into an area from sources found hundreds or
    thousands of miles upwind.
        Ground-level ozone continues to be a pollution problem in many
    areas of the United States. Ozone (a major component of smog) is a
    significant health concern, particularly for people with asthma and
    other respiratory diseases, and children and adults who are active
    outdoors in the summertime. Ozone can exacerbate respiratory symptoms,
    such as coughing and pain when breathing deeply. Ozone may reduce lung
    function and inflame the linings of the lung. Ozone has also been
    associated with increased hospitalizations and emergency room visits
    for respiratory causes. Repeated exposure over time may permanently
    damage lung tissue. Based on 2000-02 data, more than 110 million people
    live in counties that have monitors registering violations of the 8-
    hour ozone standard (see Figure 1).
        Ozone is rarely emitted directly into the air but is formed by the
    reaction of volatile organic compounds (VOCs) and NOx in the presence
    of sunlight. Ground-level ozone forms readily in the atmosphere,
    usually during hot summer weather. VOCs are emitted from a variety of
    sources, including motor vehicles, chemical plants, refineries,
    factories, consumer and commercial products, other industrial sources,
    and biogenic sources. NOx is emitted from motor vehicles, power plants,
    and other sources of combustion. Changing weather patterns contribute
    to yearly differences in ozone concentrations from region to region.
    Ozone and the pollutants that form ozone also can be transported into
    an area from pollution sources found hundreds of miles upwind.

           CLEAN AIR ACT FRAMEWORK--MILESTONES FOR ASSESSING PROGRESS

        The Clean Air Act establishes a joint Federal and State process for
    air quality management. The process starts when EPA sets (or revises)
    National Ambient Air Quality Standards (NAAQS.) These standards are
    based on the best available scientific information and are to be set at
    a level requisite to protect public health with an adequate margin of
    safety and to protect public welfare from adverse effects. Although
    States are given primary responsibility for developing plans to meet
    the standards, EPA also issues Federal rules that will result in
    emission reductions at a national or regional level.
        In 1997, EPA set fine particle standards. Although EPA had
    previously issued standards governing particle pollution, this was the
    first time that EPA specifically regulated particles 2.5 microns or
    smaller. At the same time, EPA also set a new ozone standard, measured
    over 8 hours instead of 1 hour, that is more protective of public
    health. Setting these standards triggers Federal, state and local
    actions to ensure that all areas in the country meet these standards.
    Although some of these actions were delayed due to litigation, we are
    now implementing these standards.
        The first phase in implementing these standards is to assess and
    define the scope of the problem by designating areas with respect to
    their attainment status. The Clean Air Act requires that those areas
    that violate the standards, or contribute to a violation, be designated
    ``non-attainment'' areas. All other areas are attainment or
    unclassifiable. States, Tribes, and EPA collect data from air quality
    monitors and evaluate the results. The calculation for determining
    whether an area is violating the ozone or fine particle standard is
    based on 3-years of air quality data. Based on this data, States and
    Tribes recommend to EPA each area's designation and, considering
    additional factors, also recommend to EPA each area's boundaries. EPA
    responds to the recommendations and explains any modifications to the
    State and tribal recommendations. Then, EPA issues a final action
    setting each area's boundaries and its designation. As part of this
    process for many ozone areas, EPA also sets the date by which each non-
    attainment area must come into attainment. Air quality designations
    inform citizens living and working in an area of the quality of air
    that they are breathing.
        Under the Clean Air Act, once an area's designation as a non-
    attainment area becomes effective, a number of Clean Air Act provisions
    designed to bring areas into attainment are triggered. States, some
    Tribes, and local governments develop implementation plans that contain
    enforceable measures to reduce emissions and demonstrate that non-
    attainment areas will come into attainment. These plans can rely on a
    combination of Federal, State and local measures to achieve the
    necessary air quality improvements. These plans generally are due 3
    years after the effective date of the designation of a non-attainment
    area. EPA reviews these plans to ensure that they meet the minimum
    Clean Air Act requirements.

    Progress on Milestones for Fine Particles
        We are in the process of designating areas with respect to their
    fine particle attainment status. These designations will be based on
    data from a new monitoring network that Congress funded and that EPA
    and the States installed after the fine particle standards were set.
    Under the Consolidated Appropriations Bill of fiscal year 2004, States
    and Tribes were to give us their recommendations for designations of
    areas as attainment, nonattainment or unclassifiable and for the
    boundaries of those areas in February 2004. As of March 19th, 44 States
    and 2 Tribes have submitted their recommendations. In late summer, we
    will send letters to the States responding to their recommendations.
    The public will have an opportunity to submit additional information
    before EPA designates areas in December 2004.
        Fine particle State Implementation Plans (SIPs) will be due in
    February 2008. EPA intends to propose a rule this June that would
    describe the minimum elements required for a fine particle SIP, and
    intends to finalize this rule later this year or early in 2005. The
    Clean Air Act requires areas to attain the fine particle standards as
    expeditiously as practicable. Given the guidance in the Clean Air Act,
    attainment dates for PM2.5 are expected to range from about
    2010 to 2015 depending on the severity of the air quality problem and
    other factors.

    Progress on Milestones for Ozone
        We are farther along in designating areas with respect to their
    ozone attainment status because we already had an ozone monitoring
    network in place when we issued the revised ozone standards in 1997.
    States and Tribes have submitted their recommendations, EPA has
    provided initial responses to those recommendations and given the
    public an opportunity to comment on them. No later than April 15, 2004,
    EPA will issue a final action designating all areas of the country with
    respect to their 8-hour ozone attainment status. (This date is set
    forth in a consent decree entered to resolve a lawsuit).
        As a former Governor, I know that, for many non-attainment areas,
    setting the area's boundaries is not a decision to be made lightly. I
    have already spent much time talking to representatives of specific
    areas and States to ensure that EPA is adequately taking specific local
    circumstances into account. In setting boundaries, EPA started with the
    presumption that they should mirror the boundaries of the consolidated
    metropolitan statistical area (CMSA) or metropolitan statistical area
    (MSA) (as defined in 1999). The presumed boundaries can be adjusted,
    however, based on 11 factors that EPA negotiated with the States. These
    factors include traffic and commuting patterns, meteorology, population
    density, and location and size of emissions sources. EPA's role is to
    ensure that the law is applied consistently across the country, while
    taking into account the particular facts in each area. Decisions about
    non-attainment areas in one State or Tribal area can impact our choices
    in other areas. We are working with our Regional offices and the
    various Tribes and States now to ensure that the designations I make
    are fair and defensible.
        After areas are designated nonattainment, they will have 3 years to
    submit plans demonstrating that they will attain the 8-hour ozone
    standard. The Clean Air Act requires areas to attain the ozone
    standards as expeditiously as practicable. Given the guidance in the
    Clean Air Act, attainment dates are expected to range from 2007 to 2019
    depending on the severity of the ozone problem and other factors.
        In response to the Supreme Court decision on the NAAQS, EPA is
    issuing an 8-hour ozone implementation rule to clarify the Clean Air
    Act requirements that apply to state plans for meeting the 8-hour ozone
    standard. We proposed this rule in June 2003, and will issue it as a
    final rule in two parts. The States, affected sources, environmental
    organizations, as well as the public at large, have offered substantial
    input in the development of this rule. The first phase of the rule
    contains a system for categorizing areas based on the severity of their
    air quality problem, sets deadlines for attaining the standards,
    defines when EPA will revoke the 1-hour ozone standards, and defines
    requirements to avoid ``backsliding'' or losing progress in air quality
    improvements as we make the transition from implementing the 1-hour
    standard to the 8-hour standard. We intend to issue this phase no later
    than April 15, 2004. We intend to finalize a second phase of this rule
    late this summer. After publication of the second phase of the rule, we
    anticipate providing an outreach program to facilitate States'
    understanding of the provisions of the rule.

           IMPLEMENTING THE STANDARDS--PROGRAMS TO REDUCE OZONE AND
                            FINE PARTICLE POLLUTION

        The Clean Air Act sets up the framework for assessing our air
    quality problems and our progress in addressing them, but in large part
    it leaves open what I believe is the most interesting and most pressing
    issue--how do we reduce pollution to make the air cleaner so that the
    standards are met. I am very pleased to report that we already have a
    plan to bring many areas of the country into attainment with these
    standards, even though we are just at the beginning of the time period
    that the Clean Air Act set up for the development of attainment plans.
    While we know that in some places local controls will be key for areas
    to attain the standards, EPA is focusing on the two major sources of
    pollution that are best controlled at the national level power plants
    and new mobile sources. By controlling these sources, we will eliminate
    or significantly reduce the fine particle or ozone pollution problem
    across large parts of the country. Thus, States will know the scope of
    the air quality issue they need to address, which will help them focus
    their planning efforts.
        We have initiated as an agency and as a country what I believe will
    be the most productive period of air quality improvement in the history
    of our Nation. EPA projects that adopted and proposed regulatory
    measures, combined with other existing Federal and state programs, will
    bring well over half of the areas of the country into attainment with
    the fine particle and ozone standards between now and 2015. With these
    programs, even before new local controls are considered, our
    projections indicate that the number of Eastern counties in the United
    States violating the ozone and fine particle standards in 2015 will
    drop from 317 to 39, as highlighted in Figure 2. In addition to the
    health benefits of reducing fine particle and ozone pollution, these
    programs will also help improve visibility, decrease acid rain, and
    reduce eutrophication of our lakes, streams and rivers.
        This tremendous progress is possible because we are putting forward
    a suite of air quality improvements that are about to become effective
    or will soon be adopted:
         the proposed interstate air quality rule, which should
    make even more dramatic cuts in power plant pollution;
         the NOx SIP Call, which States are implementing to reduce
    power plant emissions;
         standards for new cars, and light duty trucks and the
    fuels they use; standards for heavy-duty on-road diesel engines and the
    fuels they use;
         the proposed standards for new heavy-duty nonroad diesel
    engines (used in construction, agricultural, mining, airport service,
    etc.) and the fuels they use; voluntary diesel retrofit and idling
    programs to reduce emissions from the existing fleet, including school
    buses.

    Power Plants
        EPA has proposed the Interstate Air Quality Rule, which would cap
    power plant emissions of sulfur dioxide and nitrogen oxides in the East
    by 70 and 65 percent respectively below 2000 levels. This would go a
    long way to help many areas attain the fine particle standards and, to
    a lesser extent, the ozone standards.\1\ Power plants emit 63 percent
    of the country's SO2 emissions, which are a major
    contributor to fine particle pollution. They also emit 22 percent of
    man-made NOx emissions, which contribute to fine particle pollution
    year-round and to ozone pollution in the summer. We proposed that power
    plants reduce these emissions through a cap-and-trade program, which
    would tell industry what level of reductions are required but allow
    them to make them in the most economical way. Although we would prefer
    that Congress pass the President's proposed Clear Skies Act, the
    emission reductions are so important that we are moving forward to cut
    emissions administratively. I signed the proposed Interstate Air
    Quality Rule (IAQR) last December and intend to finalize it later this
    year. This rule will dramatically reduce fine particle pollution. We
    estimate that, in 2015, the IAQR as proposed would avoid 13,000
    premature deaths and 1.3 million lost work days annually. Based on the
    most recent data (2000-02), 99 counties with monitors in the Eastern
    United States violate the fine particle standard. EPA projects that the
    proposed Interstate Air Quality Rule and other Clean Air Act programs
    would bring 86 of these violating counties into attainment.
    ---------------------------------------------------------------------------
        \1\ To achieve the required reductions in the most cost-effective
    way, the proposal suggests that States regulate power plants under a
    cap and trade program similar to EPA's highly successful Acid Rain
    Program. Emissions would be permanently capped and could not increase.
    ---------------------------------------------------------------------------
        This year, EPA and 19 States and the District of Columbia will be
    complying with the NOx SIP Call, a 1998 rule pursuant to which power
    plants and large industrial sources will significantly reduce NOx
    emissions in the summer. Full implementation of the NOx SIP Call in
    2007 (including Phase II, as proposed) is expected to achieve about a 1
    million ton NOx emissions decrease annually. Compliance with the NOx
    SIP Call requirements will bring many areas into attainment with the 8-
    hour ozone standard, and the IAQR will further help the remaining non-
    attainment areas meet the standards.
        Since 1995, EPA has been implementing the Acid Rain Program to
    reduce SO2 and NOx emissions from power plants nationwide.
    The centerpiece of the program is an innovative, market-based ``cap-
    and-trade'' approach to achieve a nearly 50 percent reduction in
    SO2 emissions from 1980 levels. The results of the program
    have been dramatic and unprecedented. Compliance has been nearly 100
    percent. Reductions in power plant SO2 emissions were larger
    and earlier than required, providing earlier human health and
    environmental benefits. Now, in the tenth year of the program, we know
    that the greatest SO2 emissions reductions were achieved in
    the highest SO2-emitting states; acid deposition
    dramatically decreased over large areas of the eastern United States in
    the areas where reductions were most critically needed; trading did not
    cause geographic shifting of emissions or increases in localized
    pollution (hot spots); and the human health and environmental benefits
    were delivered broadly. The compliance flexibility and allowance
    trading has reduced compliance costs by 75 percent from initial EPA
    estimates.

    Cars, trucks, school buses and other mobile sources
        Emissions of NOx and other pollutants will decrease significantly
    as a result of a series of EPA regulations controlling emissions from
    new mobile sources and the fuels they use.
        EPA has proposed, and will finalize in the near future, new
    emission standards for nonroad diesel engines used in construction,
    agricultural, and industrial operations. These engine standards will be
    combined with requirements limiting sulfur in the fuel for these
    engines, which will allow optimal performance of the engines' pollution
    control equipment. EPA's proposed nonroad standards are estimated to
    reduce 127,000 tons of PM and 826,000 tons of NOx in 2030, which is
    estimated to prevent annually in 2030 9,600 premature mortalities,
    16,000 non-fatal heart attacks, over 8,300 hospital admissions, and 5.7
    million days when adults must restrict their activity because of
    pollution related respiratory symptoms.
        The benefits of the proposed nonroad rule will be added to those
    from two other mobile source rules. With this model year (2004), 25
    percent of cars and light trucks must comply with the Tier II program,
    announced in 1999, which established tighter tailpipe standards for new
    passenger vehicles and limited the amount of sulfur in gasoline. The
    program will be fully phased in by 2009. The heavier light-trucks have
    a slightly delayed phase-in schedule, with 100 percent by 2009. This
    rule required for the first time that larger vehicles like SUVs,
    minivans and pick-up and trucks meet the same standards as cars. The
    associated gasoline sulfur standards will ensure the effectiveness of
    low emission-control technologies in vehicles. These new standards
    require passenger vehicles to be 77 to 95 percent cleaner than those on
    the road today.
        Fine particle and ozone pollution will also decrease as a result of
    a rule announced in 2000 to clean up pollution from new diesel trucks
    and buses. When fully in effect, these rules will result in diesel
    trucks and buses being 95 percent cleaner than today's models for smog-
    causing emissions and 90 percent cleaner for particulate matter. The
    rule also requires very low sulfur diesel fuel to enable the use of
    advanced aftertreatment technologies. As a result of this program,
    there will be a dramatic transformation of diesel engines over the next
    decade. We estimate that this program will prevent 8,300 premature
    deaths and 1.5 million lost work days.
        Although EPA's mobile source standards will reduce pollution from
    new mobile sources, they do not require reductions from existing
    vehicles and equipment. Given the long life span and high level of
    emissions from existing diesel engines, significant air quality
    benefits are possible by reducing these emissions. EPA is working with
    state and local governments on creative, voluntary programs to reduce
    emissions from existing engines. For example, the President has
    requested $65 million in fiscal year 2005 funding for the Clean School
    Bus USA program, which would assist school districts across the country
    in replacing or retrofitting school buses.
        Clean School Bus USA addresses the growing concerns about
    children's exposure to diesel exhaust. The vast majority of the
    nation's schools buses are older technology diesel buses that produce
    as much as six times the pollution as a new school bus. Since school
    buses can remain in service for 30 years, today's kindergartner will
    have graduated from college by the time the full benefits of the new
    engine standards are fully realized. Some of the cleaner technologies
    that will be used to meet future diesel emission standards are
    available now and are practical for use in today's school buses. Clean
    School Bus USA is designed to jump-start the process of upgrading the
    fleet so that today's generation of school children can reap the
    benefits of technologies that are available now to reduce emissions.

                                   CONCLUSION

        Bringing healthy air to our communities is a responsibility we all
    share. I am proud to report that EPA is doing its part to bring areas
    into attainment with the fine particle and ozone standards by issuing
    tight controls on power plants and new mobile sources. We are looking
    forward to continuing to work with state and local governments to
    ensure that all communities have healthy air.
    [GRAPHIC] [TIFF OMITTED] T4602.002

            Responses by Michael O. Leavitt to Additional Questions
                              from Senator Inhofe

        Question 1. It is not clear that EPA has provided sufficient
    supporting data and analysis for the regional EGU proposed reductions
    in Phase II. This could mean that EPA's findings concerning Phase II
    EGU regional reduction requirements are premature, or subsequent
    corrections may be needed. EPA has not provided modeling of Phase I
    projected reductions, nor has it indicated that it is appropriate do
    so.
        Has EPA considered updating emissions inventories for Phase II by
    conducting additional studies and modeling on Phase I that include (1)
    all emission reductions made in upwind states and (2) local and
    statewide reductions in downwind states in order to assess what
    appropriate targeted additional emissions reductions are required from
    EGUs in order to bring the remaining non-attainment areas into
    attainment?
        Response. EPA established the list of states subject to the
    proposed CAIR using a ``contribute significantly'' test on the basis of
    their modeled contribution to nonattainment in 2010 and the cost-
    effectiveness of obtaining state-level emissions reductions. In a
    separate and independent step we evaluated the ability of states--
    assuming that they controlled specified sources--to comply with the
    level of emissions reductions we determined to be highly cost-
    effective. In that separate step we determined that the highly cost-
    effective reductions could not be fully achieved by 2010, due to
    logistical and other resource reasons. Our proposed solution for
    achieving the full level of reductions determined to be highly cost-
    effective is to implement the reductions in two phases, with the Phase
    I effective in 2010 and Phase II effective in 2015. The proposed
    rulemaking reviews our analysis of local control measures, as well as
    the basis for our conclusion that the reductions for upwind States are
    required. We will address this issue in the final rule documents.

        Question 2a. Has EPA considered modifying the cost-effectiveness
    component (costs per ton) of its ``significant contribution'' test in
    order to measure the comparative cost-effectiveness of upwind
    reductions on downwind states to assure that both the most effective
    and the lowest cost reductions are being pursued for bringing the
    remaining non-attainment areas into attainment?
        Response. This question raises an important issue, and one on which
    the Agency has requested public comment and will address in the final
    decision on CAIR.
        In the proposed CAIR, EPA proposed to use the same approach for
    determining ``significant contribution'' that it had used in the NOx
    SIP Call, which was upheld by the United States Court of Appeals for
    the District of Columbia Circuit. In the NOx SIP Call, EPA included
    both an air quality and a cost-effectiveness component in the
    determination of whether one state ``significantly contributes'' to
    another area's non-attainment problem. In that rule, EPA defined the
    cost component of the ``contribute significantly'' test in terms of a
    level of cost effectiveness (i.e., dollars spent per ton of emissions
    reductions), and then looked at whether controls were ``highly cost
    effective.''
        To determine what controls (if any) would be ``highly cost-
    effective'' for power plants, EPA compared power plant controls to
    other recently adopted SO2 and NOx control strategies. This
    evaluation provided ranges of cost-effective control strategies. EPA
    believes that controls with costs toward the low end of the range may
    be considered to be highly cost-effective because they are self-
    evidently more cost effective than most other controls in the range.
        EPA's analysis also looked at other factors, including the
    applicability, performance, and reliability of different types of
    pollution control technologies for different types of sources, and
    other implementation costs of a regulatory program for any particular
    group of sources. Based on these considerations, EPA proposed
    requirements based on highly cost-effective emissions reductions
    obtainable from electric generating units.
        After determining highly cost-effective controls through these
    criteria, EPA then conducted air quality modeling of the resulting
    amount of emissions reductions. EPA believes that the observed air
    quality improvements confirm that the highly cost-effective controls
    are needed.
        EPA also noted in the preamble to the proposed CAIR that
    comparisons of the cost per ton of pollutant reduced from various
    control measures should be assessed carefully. Cost per ton of
    pollutant reduction is a convenient way to measure cost effectiveness,
    but it does not take into account the fact that any given ton of
    pollutant reduction may have different impacts on ambient concentration
    and human exposure. These differences would depend on factors such as
    the relative locations of the emissions sources and receptor areas, and
    the mix of pollutants in the atmosphere. EPA solicited comment in the
    CAIR proposal on whether to take such considerations into account and
    what, if any, scientifically defensible methods may be available to do
    so.

        Question 2b. Do you believe EPA has the CAA regulatory burden to
    make an affirmative finding on a state-by-state basis that each state
    in Phase I should be included in Phase II due to a continuing
    ``significant contribution'' to downwind non-attainment after
    considering local and intrastate measures in downwind states?
        Response. EPA established the list of states subject to the
    proposed CAIR using a ``contribute significantly'' test on the basis of
    their modeled contribution to nonattainment in 2010 and the cost-
    effectiveness of obtaining state-level emissions reductions. In a
    separate and independent step we evaluated the ability of states--
    assuming that they controlled specified sources--to comply with the
    level of emissions reductions we determined to be highly cost-
    effective. In that separate step we determined that the highly cost
    effective reductions could not be fully achieved by 2010, due to
    logistical and other resource reasons. Our proposed solution for
    achieving the full level of reductions determined to be highly cost-
    effective is to implement the reductions in two phases, with the Phase
    I effective in 2010 and Phase II effective in 2015. The proposed
    rulemaking reviews our analysis of local control measures, as well as
    the basis for our conclusion that the reductions for upwind States are
    required. We will address this issue in the final rule documents.

        Question 2c. Do downwind states have primary responsibility for
    bringing areas into attainment and maintaining attainment?
        Response. The state (or states) where the designated non-attainment
    area is located has responsibility for planning for attainment of the
    standards. This would include coordinating with other States that
    contribute to the non-attainment problem. However, regardless of
    downwind states' efforts to coordinate solutions to the non-attainment
    problem, upwind states significantly contributing to nonattainment in
    downwind states have an independent, and equally important,
    responsibility to mitigate their interstate contribution.

        Question 2d. Please provide us with your views on these points and
    any legal bases to conclude otherwise.
        Response. Clean Air Act (CAA) section 101(a)(3) provides that ``air
    pollution prevention . . . and air pollution control at its source is
    the primary responsibility of States and local governments. . . .''
    This provision assigns responsibility to all states--upwind and
    downwind--and neither limits responsibility to the downwind state nor
    assigns it primarily to downwind states. Various other sections provide
    requirements and mechanisms for controlling upwind emissions. These
    include, among others, section 110(a)(2)(D) (the ``good neighbor''
    provision that requires every State implementation plan (SIP) to
    prohibit sources in the State from emitting emissions in amounts that
    contribute significantly to nonattainment in a downwind State), section
    126 (which authorizes downwind States, or political subdivisions, to
    petition EPA to control upwind sources that significantly contribute to
    downwind nonattainment), section 176A (which establishes interstate
    transport commissions), section 184 (which establishes special
    requirements for control of interstate ozone). These provisions
    indicate that Congress has apportioned responsibility for achieving
    clean air to the upwind significant contributors. We are not aware of
    legal authority to the contrary.

        Question 3a. Before proceeding with Phase II, and in order to
    assure that the estimated health benefits are realized, it would be
    prudent for EPA and other government agencies to conduct speciation
    studies specifically aimed at the different components or subspecies of
    PM2.5 to identify those components associated with the
    greatest ill-health effects. John Graham, Director of the OMB Office of
    Information and Regulatory Affairs, has urged EPA to redirect research
    funds to address this very issue when he stated in his December 2001
    letter to then-EPA Administrator Christine Todd Whitman that there is
    ``emerging evidence that some types of fine particles may pose a
    greater health risk.'' At that time, Dr. Graham recommended that EPA
    retarget some of its research budget to study the comparative effects
    of different types of particles.

              ``If research can identify those particles most responsible
            for health risks, it may be possible to design controls that do
            more for public health and cost the economy less than would
            occur through policies that assume all particles are equally
            toxic.''

        What actions has EPA taken to fund additional PM speciation studies
    targeted at the relative toxicity of different components of PM and
    what studies will be completed before Phase II has gone into effect?
        Response. EPA's Particulate Matter Research Program comprises a
    coordinated effort that targets not only what health effects arise from
    exposure to air pollution, but also what attributes of particulate
    matter (PM) are ``causal'' with regard to health. EPA agrees with Dr.
    Graham that information from this research may be important in ensuring
    that control strategies are designed and focused on the PM sources that
    most strongly impact public health, and to provide a sound scientific
    basis for the development of future PM standards. Consistent with both
    the recommendations of the NRC panel on research priorities for
    particulate matter and Dr. Graham's comments, EPA has invested
    substantial funding to support research into the potential ``causal
    attributes'' of the relationship between particulate matter and health
    effects, including both physical measures, such as size, and of course
    chemical composition. As recommended by the National Research Council
    Committee on PM research priorities, source attribution has evolved to
    become the focus of the PM Research Program. This research spans the
    spectrum from empirical laboratory studies to those in the field and is
    being integrated between health effects and monitoring.
        Examples of EPA research addressing this question are the
    extramural toxicological studies in humans and animals using combustion
    derived PM--initially diesel emissions, which have become a growing
    concern. EPA has redirected efforts from other sources that now are
    better understood (e.g., metals from oil fly ash) to exploring
    empirically the role of organic materials in lung, cardiac, and
    systemic outcomes. These studies are cross-laboratory and encompass
    significant investment in directed source understanding. Speciation
    profiles from the sources and the inclusion of novel approaches are
    being explored in an effort to develop biologic profiles with sources
    which can be used in field studies. The Detroit Exposure and Aerosol
    Research Study (DEARS) is a new project starting this year and
    continuing for the next several years to link personal PM-component
    exposures to local monitoring data and source attributed contributions
    in people strategically selected around Detroit. This area has multiple
    sources making it ideal for such study. The associated Children's
    Asthma Study that follows school children in the area who are most
    exposed to mobile sources is expanding that source data base from the
    El Paso studies reported 2 years ago.
        In addition, EPA is revising its monitoring program to decrease the
    multiple types of monitoring programs now in place to a more strategic
    and integrated program (NCORE). Considerable efforts have been made by
    the Air Office to ensure that EPA understands the needs of the research
    community with respect to air quality monitoring. Our goal is to devise
    a monitoring program that will serve to expand efforts in assessing
    regional PM compositional differences and associated health outcomes.
    In keeping with Dr. Graham's suggestion, we have tasked HEI with
    coordinating the design and execution of possible multi-pollutant,
    multi-city studies that would take advantage of our extensive
    monitoring to examine the role of specific components and sources.
    Indeed, HEI has already had workshops specifically on how the
    monitoring program can be used to enhance its research agenda to
    explore source attributed health effects.
        A variety of these studies will be completed before Phase II goes
    into effect. However, given the our inability to predict the results of
    these studies, it is not possible to determine whether sufficiently
    informative information will be available in time for use in Phase II.

            BACKGROUND ON STUDIES OF THE HEALTH RISK FROM PARTICLES

        Several hypotheses regarding the role of specific PM components
    have emerged from EPA-sponsored and other research since 1997. The
    latest scientific information on these issues is included in the
    ongoing review of the scientific criteria and standards for PM. In
    essence, EPA's assessment is that the weight of evidence from multiple
    studies indicates that there are adverse, PM-associated impacts on
    human health, and that multiple components and combinations of the PM
    and gaseous pollutant mixtures may be involved.
        Although much of what we know about the health effects of PM and
    its constituents comes from community epidemiological studies; the
    chemical composition of PM has received considerable scrutiny in
    toxicology studies. Studies of inorganic constituents have generated
    the most data to date. Sulfate and nitrate anions derived from
    combustion emissions or atmospheric processes usually combine with
    other constituents in PM, especially the water soluble materials.
    Although the intrinsic, independent toxicities of sulfate and nitrate
    appear to be rather low, such components are associated with adverse
    health effects in a number of studies. It is hypothesized that these
    substances may influence the toxicity or bioavailability of other PM
    components. Little is actually known about the cardiovascular effects
    associated with acidic aerosols, and the possibility that they might
    mediate some of the reported PM effects is now being explored in EPA-
    funded programs.
        EPA toxicology studies have found that inhalation of certain metals
    resulted in inflammation in the lung and cardiac arrhythmias. While
    these studies were conducted with doses or concentrations of PM higher
    than typical ambient conditions, they demonstrate the potential for
    similar effects to occur in humans. Nevertheless, perhaps the most
    striking evidence for the importance of metals is from studies of PM-
    associated metals extracted from ambient filters in the Utah Valley at
    the site of a steel mill that was temporarily closed because of a labor
    dispute. Human and animal exposure studies, as well as laboratory
    tests, using material from particles collected when the plant was open
    and closed observed a similar pattern and types of effects. These EPA-
    supported studies corroborate the results of a separate study that
    found a decrease in hospital admissions for similar causes in the local
    population while the plant was closed.
        EPA is investing substantial resources toward investigating the
    toxicity of other chemical attributes of PM. For example, organic
    constituents are of particular concern, due, in large part, to the
    contribution of various industrial sources as well as diesel and other
    mobile sources to the fine PM fraction. While not as directly toxic as
    some of the metal compounds, certain organic compounds appear to be
    able to generate oxidants that might have delayed or subtle effects not
    readily measured by conventional methods.

        Question 3b. What procedures does EPA have in place to incorporate
    the results of these studies (and other studies conducted worldwide on
    this subject) into decisions on the design of Phase II?
        Response. The proposed Clean Air Interstate Rule (CAIR) is driven
    in large part by the need to address significant contributions of
    upwind sources to non-attainment by downwind areas of the primary and
    secondary PM2.5 and ozone standards. We have chosen to
    propose implementation of cost effective reductions in two phases based
    on our assessment of the feasibility and costs associated with
    eliminating such significant transport that contributes to non-
    attainment.
        Based on the information we have on the health and visibility
    effects of PM and its components, Phase II of the proposed CAIR is
    appropriate and necessary, and is likely to produce very significant
    health and environmental benefits.
        The most appropriate vehicle for incorporating new information
    would be the process Congress established in the Clean Air Act for
    reviewing and, as appropriate, revising the ambient air quality
    standards for fine particles. If new, peer-reviewed information on the
    health effects of fine particles or components of fine particles
    becomes available, it should be incorporated into an appropriate future
    review of the criteria and standards for particulate matter, and, if
    necessary, an additional rulemaking might also be appropriate to
    determine whether changes to Phase II of CAIR would be appropriate.

        Question 4a. Should EPA measure the ``significance'' of upwind
    contributions to PM2.5 non-attainment in terms of relative
    contribution to the exceedance level?
        Response. EPA is currently conducting a rulemaking process,
    including reviewing public comments, to decide the appropriate way to
    measure the significance of upwind states' contributions to downwind
    non-attainment areas. Your question raises an issue that we are
    considering and that will be addressed more fully in the documents
    supporting the final Clean Air Interstate Rule (CAIR).
        To determine which states are significantly contributing to
    downwind nonattainment and what level of emissions reductions should be
    required, in CAIR, EPA has proposed to use the same basic approach for
    determining ``significant contribution'' that it used in the NOx SIP
    Call, which was upheld by the United States Court of Appeals for the
    District of Columbia Circuit. In the NOx SIP Call, EPA included both an
    air quality and a cost-effectiveness component in the determination of
    whether one state ``significantly contributes'' to another area's ozone
    non-attainment problem.
        The proposed air quality impact assessment for PM2.5
    involves evaluating the impact of SO2 and NOx emissions from
    upwind states on downwind nonattainment of the annual average
    PM2.5 standard. EPA has proposed that a state's maximum
    impact on the most affected downwind non-attainment area is the
    critical metric for determining inclusion under the air quality
    component of the two-part test. Using this metric, EPA proposed that a
    state that is causing at least 0.15 ug/m3 impact on a downwind area's
    annual average PM2.5 level would be subject to emissions
    reduction requirements. EPA is taking comment on this and other
    proposed metrics.
        Prior to issuing the proposed CAIR, EPA considered several other
    metrics to quantify the relative contribution of upwind states to
    downwind receptors. For example, EPA examined the contribution above
    the level of the annual PM2.5 NAAQS of upwind states to
    downwind nonattainment. This metric does not substantially change the
    relative ordering of upwind states with downwind impacts when compared
    to the maximum impact metric (which EPA proposed to use).

        Question 4b. In the IAQR, a state emissions budget is determined
    based on IAQR percent reduction of the overall regional emission
    inventory. Thus, a state contributing a relatively small amount to
    downwind non-attainment is treated the same as a state contributing a
    relatively large amount to downwind non-attainment. Emission budgets
    are set for the states without regard to the impact of those states on
    downwind non-attainment. The net result could be over-control in many
    areas and under-control in others. Please comment on this issue.
        Response. In the CAIR proposal, EPA establishes emission budgets
    only for those states that the modeling shows contribute significantly
    to downwind nonattainment with the 8-hour ozone and fine particle
    standards. The state emissions budgets are based on control
    opportunities and not on differences in absolute downwind impact.
        However, all of the measures in EPA's calculation for how a state
    would meet the emissions budget are highly cost effective, and in that
    sense there is no over-control in any state. As illustrated by our
    modeling predictions, some of the counties that we project will attain
    the ozone and PM2.5 NAAQS because of Federal measures,
    including the proposed Clean Air Interstate Rule, would have new design
    values below the level of the NAAQS. Given the uncertainties in the
    projections and the many advantages of a uniform level of control in
    the power sector (among the states affected), EPA believes this outcome
    is appropriate for this rule.
        EPA-based emissions control responsibility, in part, on the
    relative cost-effectiveness of control measures, in terms of dollars
    per ton of pollutant reduction. Cost per ton of pollutant reduction is
    a convenient way to measure cost effectiveness, but it does not take
    into account the fact that any given ton of pollutant reduction may
    have different impacts on ambient concentration and human exposure,
    depending on factors such as the relative locations of the emissions
    sources and receptor areas. An alternative approach might adopt the
    effect of emission reductions on ambient concentrations in downwind
    non-attainment areas as the measure of effectiveness of further
    control. EPA solicited comment in the CAIR proposal on whether to take
    such considerations into account and what, if any, scientifically
    defensible methods may be available to do so.
        There are counties and states for which the Clean Air Interstate
    Rule alone will not be enough for the area to reach attainment for
    ozone and PM2.5, and in that sense there is under-control.
    These states will need to identify and implement appropriate additional
    local or state-wide measures. EPA believes this outcome is appropriate.
        EPA solicited comment in the CAIR proposal on whether to take such
    considerations into account and what, if any, scientifically defensible
    methods may be available to do so.

        Question 5. Why has EPA indicated a preference for states to
    conduct NOx allowance auctions and to have states retain the revenues?
    This is somewhat similar to a provision I changed in S. 1844, the Clear
    Skies Act of 2003 because it reallocated wealth in a manner that
    encouraged increased reliance on natural gas when the Nation is facing
    difficulties meeting its current supply needs. What is your rationale
    for increasing the cost of emission control to power generators above
    and beyond the cost of the controls themselves?
        Response. In the proposed rule and supplemental notice of CAIR, EPA
    proposed to give each state the flexibility to choose its own
    allocation method. EPA proposed an example allocation to give states
    the benefit of that information. In the proposal's preamble, EPA
    discussed various options available to states, including an auction. In
    the supplemental notice to the CAIR proposal, EPA provides an example
    allocation methodology that includes an input-based allocation for
    existing units with provisions for updating the data that will take new
    units into account.
        Allocating allowances through an auction has a number of benefits.
    Auctions ensure that all parties, including the general public, have
    access to allowances. Auctions should also be the most economically
    efficient way to allocate allowances since sources would bid their
    perceived values for allowances. Auctions treat existing and new
    sources in a similar fashion. Auctions also eliminate the permanent
    right to emit and can provide distortion-free revenues to States.
        State auctions of some portion of their allowances should not
    encourage increased reliance on natural gas. Since allowances have a
    value in the allowance markets, allocating them for free impacts the
    distribution of wealth among different generators. However, any
    generator selling in a market would seek to operate (and burn fuel) to
    meet energy demand in a least cost manner, and this does not depend on
    how the permanent allowances were allocated. Thus, the choice of method
    of allocating permanent allowances whether distributed on the basis of
    a historic baseline or auctioned, would not be expected to result in
    increased reliance on natural gas, or in fact result in changes in
    generators' choices for fuel consumption.

        Question 6. EPA also stated in the Preamble of the proposed rule
    that it might require states to auction a portion of a state's
    allowance budget and to fully retain the revenues for a state to use as
    it sees fit. What authority does EPA cite for such a mandate?
        Response. The preamble of the proposed CAIR states that EPA
    ``strongly encouraged each State to consider reserving a portion of its
    allowance budget for an auction.'' EPA has not proposed to require such
    an approach.
                                     ______

            Responses by Micheal O. Leavitt to Additional Questions
                             from Senator Voinovich

        Question 1. In your testimony, you mention a ``suite of air
    improvements'' that will help bring counties into attainment. How do
    you expect these Federal regulations to be consolidated into State
    Implementation Plans?
        Response. When states prepare their state implementation plans,
    including demonstrations of how they will bring areas into attainment
    with the NAAQS, states are allowed to take into account the projected
    emission reductions from Federal regulations. EPA provides guidance to
    States on how to calculate credit for emission reductions for federally
    mandated control measures. For instance, for highway mobile source
    emissions, EPA updates the ``MOBILE'' model used to calculate future
    emission factors (grams of emissions per vehicle mile) for various
    operating conditions. In preparing the demonstration of attainment for
    its implementation plan, a State would project emissions into the
    future--accounting for all currently applicable emission limits,
    including Federal measures--and use those emissions projections as
    input to a photochemical grid model to predict ambient ozone
    concentrations. If those concentrations show that the area would
    continue to be violating the ozone standard at the future date, the
    State would have to adopt sufficient additional control measures such
    that the concentrations would be indicative of attaining the standard.
        In addition, EPA performs photochemical modeling on a broader
    scale, sometimes covering a number of States, to assess the effect of
    national and regional control measures on transported ozone and
    precursor emissions. In performing their own atmospheric modeling for
    specific non-attainment areas, the State would account for the future
    effects of those national and regional measures (viz., lowering future
    ozone concentrations) that affect those non-attainment areas based on
    the EPA modeling.

        Question 2. EPA has concluded that attainment will be reached in
    many counties as a result of the Interstate Air Quality Rule (IAQR) and
    several other new Federal standards. However, the IAQR has been
    proposed to be implemented in two phases with deadlines of 2010 and
    2015 and Subpart 1 non-attainment areas must demonstrate attainment by
    2009 or 2014. What effect does this mismatch have on EPA's analyses? Is
    EPA considering synchronizing these years?
        Response. Assuming that EPA finalizes PM2.5 designations
    by the statutory deadline of December 2004, the PM2.5
    attainment deadlines would be no later than early 2010, or no later
    than early 2015 for areas receiving a maximum 5-year extension. In
    addition, the Administrator can grant up to two 1-year extensions under
    certain circumstances. EPA's modeling analysis of projected air quality
    in the years 2010 and 2015 will provide useful information to states
    with non-attainment areas. Because of the structure of the proposed
    CAIR emissions trading program, which creates a strong financial
    incentive for early reductions to ``bank'' allowances, EPA projects
    that many participating power plants will begin to reduce SO2
    emissions prior to the phase I emissions cap year of 2010. (For
    purposes of attainment of the PM2.5 standard, early SO2
    reductions are more beneficial than early NOx reductions.) These
    substantial early reductions should provide air quality benefits even
    for non-attainment areas with attainment dates in early 2010.
        When a state develops and submits its overall implementation plan
    in 2008, it will need to provide for each area a demonstration
    supporting a date for attainment that is ``as expeditiously as
    practicable.'' In its demonstration, the state will be able to take
    credit for any emission reductions projected under CAIR in addition to
    any reductions projected from other national, state, and local
    programs. Based on its analysis, the state will need to propose an
    attainment date for each of its non-attainment areas. The proposed
    attainment date can range up to 2015, depending on factors specific to
    each area. Thus, the CAIR modeling for 2010 and 2015 will provide
    important information about potential air quality benefits from the EGU
    reductions. Because attainment dates will be established on a case-by-
    case basis, we believe that the modeling for CAIR will provide useful
    information to support state attainment planning.

        Question 3. You stated in your testimony that you ``prefer that
    Congress pass the President's Clear Skies Act.'' Why is legislation
    better than the regulatory approach you are now taking? How
    specifically is the legislation better for helping states and
    localities meet the NAAQS?
        Response. The President committed to enacting multi-pollutant
    legislation using a flexible market-based program which would reduce
    NOx, SO2 and mercury, and increase regulatory certainty for
    the utility sector. EPA was directed by the President to propose this
    legislation the Clear Skies Act--and work with Congress to enact it.
    Clear Skies is a strong nation-wide program that requires statutory
    changes. Comparing our experience on the Acid Rain Program with the NOx
    SIP Call and the Section 126 petitions demonstrates the benefit of
    having certain key issues resolved by Congress rather than left to
    Agency rulemakings. Congressional resolution of key issues decreases
    the possibility that the program will get tied up in protracted
    litigation, provides states with greater certainty of the timing of the
    reductions, and ensures a consistent, nation-wide market system.

        Question 4. During the hearing, I inserted a letter into the record
    from Ohio EPA that was sent to EPA's Region 5 office about Knox County
    in Ohio. The letter was amending Ohio's recommendation to only include
    part of Knox County. On April 15, EPA designated several counties
    across the Nation as only in partial nonattainment for the standards
    but not Knox County. What criteria did EPA use in making a
    determination on whether to designate a county as partial
    nonattainment?
        Response. Knox County, contiguous to the Columbus consolidated
    metropolitan statistical area (C/MSA), was measuring a violation
    (88ppb) of the 8-hour ozone national ambient air quality standard based
    upon the most recent air quality data (2001-2003). EPA's policy was to
    designate full counties as nonattainment if they had a violating ozone
    air quality monitor and had no other ``clean'' monitors in that same
    county. This was the case for Knox County, Ohio. Exceptions to this
    policy were made for very large western counties, counties divided by
    high mountain ranges, and mountain top/national park areas--none of
    which applied to Knox County. Also, since cities and townships are the
    building blocks for OMB's C/MSA definitions in the New England states,
    EPA honored this distinction.

        Question 5a. What has been EPA's experience with the effectiveness
    of emissions testing programs?
        Response. Regardless of their individual design, stringency, or
    level of enforcement--all of which can impact the effectiveness of
    individual vehicle inspection and maintenance (I/M) programs--the
    overall effectiveness of I/M as a control strategy varies depending
    upon the timeframe under consideration. For example, an I/M program
    developed in response to the 1990 Clean Air Act's (CAA) original I/M
    requirements is likely to have been more effective in terms of tons of
    excess emissions reduced than is likely to be the case with a brand-new
    I/M program starting today. Vehicle standards and relative vehicle
    durability have evolved over time, as has the proportion of vehicles
    built to meet these changing standards. The in-use fleet of vehicles is
    constantly turning over to cleaner and more durable vehicles. One of
    the side effects of this fleet turnover is that the mass of excess
    emissions from which the I/M credit is drawn is itself shrinking. It is
    also important to note that the effectiveness of an individual I/M
    program will vary depending upon when in the program's lifetime it is
    being evaluated. For example, a brand-new I/M program tends to be at
    its most effective during the first few test cycles, when previously
    undetected vehicle tampering and years of poor maintenance can be
    identified for the first time and corrected.
        Studies that purport to assess the effectiveness of individual I/M
    programs have varied widely in their conclusion depending on the type
    of I/M program being evaluated, when, and at what age, using what
    combination of evaluation methodologies. That is why the National
    Research Council's (NRC) July 2001 report, ``Evaluating Vehicle
    Emission Inspection and Maintenance Programs,'' refrained from
    providing a one-size-fits-all assessment of I/M effectiveness based
    upon its survey of numerous I/M effectiveness studies. Instead, the NRC
    reported a range of potential I/M effectiveness. As a general matter
    the turnover of the automotive fleet to cleaner vehicles with improved
    durability reduces the emissions impact of I/M programs over time. EPA
    took this into consideration, among many other factors, in updating the
    emission impact of I/M programs in its MOBILE model in 2003.
    Nevertheless, the remaining air quality benefits of I/M are still
    significant and needed by many areas in the country--a conclusion
    echoed by the NRC's July 2001 I/M report.

        Question 5b. What are some alternatives?
        Response. Under the Clean Air Act, the level of flexibility and
    discretion an area has with regard to adopting I/M versus some
    alternative measure depends on several criteria, most notably: (1) air
    quality classification, and (2) local urbanized population. For
    example, if an ozone non-attainment area is classified as serious or
    worse, and it has a 1980 Census-defined urbanized population of 200,000
    or more, the 1990 Act requires that such an area implement an enhanced
    I/M program as a non-discretionary, mandatory measure\1\. Similarly, if
    an ozone non-attainment area is classified as moderate, and it has a
    1990 Census-defined urbanized population of 200,000 or more, such an
    area must implement a basic I/M program (at a minimum).
    ---------------------------------------------------------------------------
        \1\ Within an Ozone Transport Region (OTR), enhanced I/M is
    required for any metropolitan statistical area (MSA) with a population
    of 100,000 or more, regardless of the area's attainment status for
    ozone.
    ---------------------------------------------------------------------------
        On the other hand, an ozone non-attainment area that has
    successfully redesignated to attainment may be able to shift its I/M
    program from an active to a contingency measure if it can demonstrate
    that doing so will not interfere with the area's ability to meet its
    other, applicable requirements under the CAA. One way an area can
    demonstrate such non-interference is by replacing the emission
    reductions lost as a result of discontinuing the I/M program with
    reductions from other, non-mandatory, previously unclaimed control
    measures. The range of possible alternative control measures that falls
    under these criteria will vary from area to area, depending upon what
    is already in (or required to be in) the applicable State
    Implementation Plan (SIP).

        Question 5c. If a state chooses not to continue an emissions
    testing program, does their SIP need to make up these reductions in
    addition to what is needed to meet the new standards?
        Response. If an existing I/M program area which was previously only
    required to have a basic I/M program has already or can successfully
    redesignate to attainment for the 1-hour ozone standard (and is not
    classified under the 8-hour standard at a level which would trigger the
    I/M requirement on its own) then the area may qualify to shift the I/M
    program from an active measure to a contingency measure as part of the
    area's maintenance plan. Before converting I/M to a contingency
    measure, however, the area must demonstrate that doing so will not
    interfere with the area's ability to meet its other CAA requirements,
    including attainment of all applicable National Ambient Air Quality
    Standards (NAAQS). One way to demonstrate non-interference is by
    replacing the emission reductions lost as a result of discontinuing the
    I/M program with reductions from other, non-mandatory, previously
    unclaimed control measures. Such additional measures would need to be
    included as part of the SIP revision converting the I/M program to a
    contingency measure.
        If an existing I/M area is not able to redesignate to attainment
    for the 1-hour standard prior to revocation of that standard on June
    15, 2005 (and is also designated as nonattainment for the 8-hour
    standard, regardless of classification or subpart) then that area will
    be required to continue implementing an I/M program until it has
    attained the 8-hour ozone standard. Whether the I/M program that must
    be implemented is basic or enhanced will be determined by whichever
    ozone classification is worse--the area's 1-hour or 8-hour
    classification. For example, if an area was classified as serious
    nonattainment under the 1-hour standard (and was therefore required to
    implement an enhanced I/M program for that standard) but is classified
    as only moderate nonattainment for the 8-hour standard (which would
    normally only require a basic I/M program) the area must continue
    implementing an I/M program that meets the enhanced I/M performance
    standard. In other words, having a less severe classification under the
    8-hour standard than under the 1-hour standard does not grant the I/M
    area a license to downgrade its program from enhanced to basic.

        Question 6. Can EPA speed up their schedule for the PM2.5
    implementation rule? What is EPA going to do to help communities and
    states deal with the unfamiliar PM2.5 non-attainment
    designations?
        Response. The draft PM2.5 implementation rule has been
    transmitted to OMB for interagency review. We hope that the rule will
    be proposed soon.
        EPA has been working with State and local air quality agencies in a
    number of ways in preparation for addressing non-attainment area
    problems. EPA has issued a number of national rules in the past several
    years (e.g. Tier II on-road vehicle standards, heavy duty diesel engine
    standards, nonroad diesel engine standards) to reduce emissions of
    PM2.5 and its precursors, and we are actively working to
    finalize the Clean Air Interstate Rule to reduce SO2 and NOx
    emissions from electric generating units. We have a significant program
    in place to encourage and subsidize diesel engine retrofits in trucks,
    buses, and other vehicles. EPA has also provided grant funding to
    STAPPA/ALAPCO to develop a ``Menu of Options'' document providing
    technical information on technologies and programs to reduce emissions
    of PM2.5 and its precursor pollutants.
        In addition, EPA has been working with State and local agencies on
    the improvement of a number of technical tools needed to assess future
    strategies for reducing PM2.5 concentrations. These tools
    include air quality models, emission inventories and emission factors,
    meteorological data bases, analyses of air quality monitoring data,
    analyses of chemical composition of PM2.5 in various urban
    areas, and specialized in-depth studies in several cities under the
    SUPERSITES monitoring program.

        Question 7a. North Carolina recently filed a Section 126 petition
    against several ``upwind'' states, including Ohio, on the new 8-hour
    ozone and PM2.5 standards. What impact could the Section 126
    petitions have on the implementation of the NAAQS?
        Response. Section 126 of the Clean Air Act is designed to remedy
    interstate pollution transport. Section 126(b) authorizes States to
    petition EPA for a finding that major stationary sources or groups of
    sources in upwind states are contributing significantly to non-
    attainment problems in downwind states.
        The North Carolina petition requests that EPA make a finding that
    emissions of sulfur dioxides (SO2) and nitrogen oxides (NOx)
    from large electric generating units in 13 States are contributing
    significantly to PM2.5 and/or 8-hour ozone non-attainment
    problems in North Carolina. EPA is currently evaluating the petition
    and has not yet proposed whether to grant or deny the petition.
        If EPA grants the petition, EPA would establish Federal control
    requirements for the affected sources to mitigate the pollution
    transport. Reducing the interstate transport would assist the downwind
    petitioning State in achieving its clean air goals as well as providing
    cleaner air in the upwind States where the reductions would be
    occurring.
        In a separate action published on January 30, 2004, EPA proposed
    the ``Rule to Reduce Interstate Transport of Fine Particulate Matter
    and Ozone (Interstate Air Quality Rule),'' now known as the Clean Air
    Interstate Rule (CAIR). This action is a regionwide, state
    implementation plan (SIP) based transport program. That is, the action
    proposes to require 29 States and the District of Columbia to submit
    SIP revisions reducing SO2 and/or NOx emissions that are
    contributing significantly to PM2.5 and 8-hour ozone non-
    attainment problems in downwind States. North Carolina's section 126
    petition is seeking reductions from the same types of sources and
    pollutants as proposed in EPA's CAIR. North Carolina's petition relies,
    in part, on EPA's findings and analyses supporting the CAIR proposal.
        In the CAIR proposal, EPA observed that it may receive section 126
    petitions, and that if it did, it would expect to approach them in the
    same manner as it approached section 126 petitions during the NOx SIP
    Call rulemaking--which, like CAIR, was a regionwide SIP-based transport
    program--that is, to approve the section 126 petitions only in the
    event that States failed to fulfill their obligations under the CAIR.

        Question 7b. Could the possibility of these petitions being
    successful undermine the ability of localities to adequately plan with
    some reasonable degree of certainty as to what actions they will be
    required to undertake to meet the NAAQS?
        Response. As noted above, in the CAIR proposal, EPA observed that
    it expected to approve any section 126 petitions it may receive only in
    the event that States failed to fulfill their obligations under the
    CAIR. Under this approach, any obligations that might affect sources
    under the section 126 petitions would be consistent with the CAIR
    obligations. However, EPA is in the process of completing the CAIR
    rulemaking and beginning action on the North Carolina section 126
    petition, and EPA cannot speculate as to the possible outcome of its
    action on the petition or the effect of that action on localities.

        Question 8. Does the Agency plan to work, in consultation with DOE,
    to analyze the impact of the new NAAQS on fuel supply and demand?
        Response. EPA will meet the obligations under E.O. 13211 to analyze
    energy implications of any Federal control programs that EPA adopts to
    help achieve the NAAQS and consult with DOE as required by Executive
    Orders.
                                     ______

            Responses by Micheal O. Leavitt to Additional Questions
                              from Senator Carper

        Question 1a. I understand that New Castle County in Delaware will
    be designated as a non-attainment area under the 8-hour ozone National
    Ambient Air Quality Standard. According to EPA modeling data for the
    Interstate Air Quality Rule, New Castle County is projected to be out
    of attainment in 2010 even with implementation of the proposed
    Interstate Air Quality Rule. When would New Castle County come into
    attainment if the Clean Air Planning Act were enacted?
        Response. Under the Clean Air Planning Act (CAPA), we expect that
    New Castle County would come into attainment with the 8-hour ozone
    standards in the same timeframe as it would under either Clear Skies or
    the proposed Clean Air Interstate Rule (CAIR). We previously analyzed
    the projected impacts of CAPA on 8-hour ozone using a linear
    interpolation technique. This interpolation technique was based on
    changes in NOx emissions. The results of this analysis indicate that
    this Act would provide ozone reductions similar to the Clear Skies Act
    in 2010 and 2020 (which is not surprising given the similar levels of
    eastern NOx emissions projected under the two proposals). For New
    Castle County, our modeling for Clear Skies and the proposed CAIR
    indicates that this county would be out of attainment in 2010 under
    CAIR or Clear Skies and would be in attainment in 2015 with baseline
    control measures (i.e., with currently adopted control programs such as
    the NOx SIP Call and motor vehicle controls). (Modeling was not
    completed for interim years.) We expect the same attainment status and
    timeframe under CAPA.

        Question 1b. When would Delaware's two other counties, Kent and
    Sussex, achieve attainment under the proposed Interstate Air Quality
    Rule?
        Response. Our modeling for the CAIR proposal projects that both
    Kent and Sussex counties would be in attainment in 2010 with baseline
    control measures (i.e., currently adopted control programs such as the
    NOx SIP Call and motor vehicle controls). Modeling was not completed
    for interim years between the present day and 2010, so it is not
    possible to pinpoint the exact year in which attainment would be
    reached.

        Question 1c. When would these three counties achieve attainment if
    the Clean Air Planning Act were enacted?
        Response. We expect that each of these counties would achieve
    attainment of the 8-hour ozone standards under CAPA in the same
    timeframe as they would under Clear Skies or CAIR given that similar
    levels of eastern NOx emissions are projected under all three of these
    proposals.

        Question 2a. I understand that numerous neighboring counties in the
    mid-Atlantic region states of Maryland, Pennsylvania, and New Jersey
    will be designated as non-attainment areas under the 8-hour ozone
    National Ambient Air Quality Standard. When will counties in these
    states come into attainment if the Interstate Air Quality Rule is
    enacted?
        Response. Table 2-1 shows the 2010 and 2015 projections for ozone
    design values for counties in Maryland, Pennsylvania, and New Jersey
    under the modeling done for the proposed CAIR.\1\ Counties with design
    values less than 85 ppb are projected to attain the 8-hour ozone
    standards. Many of the counties in these three states are projected to
    come into attainment in 2010 or earlier if the CAIR (formerly known as
    the Interstate Air Quality Rule) were adopted as proposed. (Note that
    we project future 8-hour ozone design values based on county-level
    2000-2002 design values and the model-predicted change between a 2001
    base case and each of the future year simulations.)
    ---------------------------------------------------------------------------
        \1\ Tables 2-1 and 2-2 are based on modeling done for the proposed
    CAIR. When EPA issues the final rule, it will use updated information
    and modeling.

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        Question 2b. When would they come into attainment if the Clean Air
    Planning Act were enacted?
        Response. We would expect that, under CAPA, the future ozone
    concentrations for counties in Maryland, New Jersey and Pennsylvania
    would be similar to those given above under the proposed CAIR given the
    similar projected levels of NOx emissions for the two proposals.

        Question 3. In keeping with EPA's recently announced commitment to
    undertake further analyses in support of the proposed Utility Mercury
    Reductions Rule, I request that the Agency undertake a more detailed
    analysis of the Clean Air Planning Act of 2003 (S. 843). Specifically,
    I request that EPA analyze the S. 843 mercury provisions with the same
    models, to the same level of analysis (i.e., state-level emissions),
    and reporting results for the same analytical endpoints as EPA used in
    analyzing the proposed Utility Mercury Reductions Rule and its new
    analyses of additional alternatives to those proposed in the rule.
        In addition, as EPA undertakes analysis of the mercury program
    included in S. 843, I request results for SO2 and NOx using
    the same models, level of analysis, and analytical endpoints employed
    in the detailed analysis of Clear Skies and recent regulatory
    proposals.
        Response. Please see the attached letter from Assistant
    Administrator Holmstead to Senator Carper, dated July 26, 2004.

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        Question 4a.  EPA's Office of Research and Development released a
    white paper on February 27, 2004 stating that mercury removal of 70-90
    percent is possible on 96 percent of the nation's coal-fired power
    generation capacity by 2010. In contrast, the alternatives proposed in
    EPA's Utility Mercury Reductions Rule aim to achieve only a 29 percent
    reduction from current emissions levels by 2008 or 2010. This ``co-
    benefits'' level would require no installation of mercury control
    technology. Why is the 2008/2010 emissions target in the Utility
    Mercury Reductions Rule set at 34 tons?
        Response. The white paper cited states:

              ``[a]ssuming sufficient development and demonstrations are
            carried out, by 2010, [activated carbon injection] ACI with an
            [electrostatic precipitator] ESP has the potential to achieve
            70 percent Hg control.''

        Further, it states that ``ACI with an ESP and a retrofit fabric
    filter, or a fabric filter alone, has the potential to achieve 90
    percent Hg reduction.'' The paper goes on to indicate that 2010 is
    ``the date by which the demonstration of the most difficult case (e.g.,
    lignite) for the particular technology would be completed.''
        Demonstrations on easier situations could be completed ``somewhat
    earlier.'' Further, the paper states that:

              ``it is important to note that completion of such
            demonstrations would represent only the potential initiation of
            the retrofit program which would take a number of years to
            fully implement, assuming of course, both successful
            demonstrations and a regulatory driving force.''

        The paper then goes on to caveat the length of time necessary to
    fully deploy such technologies and to indicate that the issues related
    to residues need to be addressed.
        Thus, we do not believe that the white paper states that ACI
    technology, or any other, will be fully deployed by 2010. Rather, it
    may only be ready for commercial application on boilers at that time.
    The prerequisite full-scale ACI tests are either just underway or not
    yet begun. Short-term tests of ACI technology on full-scale bituminous-
    and sub-bituminous-fired units have been completed. A long-term test on
    a bituminous-fired unit is underway. To our knowledge, short-term tests
    on a full-scale Texas lignite-fired unit have not begun nor have full-
    scale, long-term tests on either sub-bituminous- or lignite-fired
    units. Full-scale tests on wet scrubber-equipped units have begun and
    are expected to last 5 years or more. In addition, full-scale testing
    of more cost-effective sorbents (e.g., brominated powdered activated
    carbon) has just started and the potential for re-release of mercury
    from residues (e.g., spent sorbents and scrubber sludge) is under
    investigation.
        The Agency also received public comment on the topic of mercury
    control technology availability. The utility industry and related
    stakeholders (e.g., mining groups, unions) are in general agreement
    that mercury-specific control technology will not be demonstrated
    within the timeframe that EPA has suggested. However, the environmental
    community and many of the State, local, and tribal organizations
    believe that such technology will be available much sooner than the
    Agency has projected.
        Based on this information, we are not certain that the necessary
    demonstrations will have even been completed by 2010, delaying the
    schedule provided in the white paper. We believe that the proposed
    section 111 regulatory approach will provide the necessary regulatory
    driver to ``speed up'' demonstration of these advanced technologies.
    The basis for the MACT continues to be that level of mercury control
    achievable through the installation of existing controls for other
    pollutants (i.e., the ``co-benefits'' level).

        Question 4b. Is EPA considering lower emissions targets for 2008
    (Section 112 proposal) or 2010 (Section 111 proposal) in its further
    analyses of the Utility Mercury Reductions Rule? If so, what are those
    target levels?
        Response. EPA will ensure that we have all the analysis necessary
    to make the decision about how to address mercury emissions from power
    plants. A central part of this work is to understand the exposure
    pathway better so that we will have confidence that the final rule will
    protect the environment and public health.

        Question 5. For some time now, representatives of the pollution
    control technology industry have stated that existing commercially
    available technologies can achieve 90 percent mercury removal when
    combined with NOx and SO2 control technologies. For example,
    control technology industry representatives claim that Activated Carbon
    Injection requires minimal capital costs, can be retrofitted with
    little or no downtime, is suitable for use with most existing emissions
    control technologies, and can achieve 70-90 percent mercury removal
    from various types of coal. In testimony before the Environment and
    Public Works Committee on April 1, 2004, Administrator Leavitt, you
    stated your expectation that Activated Carbon Injection technology
    should be adequately tested and widely deployable by 2010.
        Why, then, do the rule's proposed alternatives call for only a 70
    percent reduction in mercury emissions by 2008 or 2010, depending upon
    the proposed alternative, and delay implementation of the phase 2 cap
    until 2018?
        Response. As stated in our response to question 4, we believe that
    implementation of activated carbon injection (ACI) and other advanced
    mercury control technologies will not be possible until 2010 or after.
    We have had several meetings with, and heard presentations from, many
    of the same equipment vendors from whom you have heard. We do not
    believe that recent statements by the pollution control industry
    contradict our view that advanced mercury control technologies are not
    yet commercially proven. EPA agrees with the equipment vendors that
    these new technologies show great promise. In addition, we recognize
    that various segments of the utility industry state that these mercury-
    specific control technologies are not, and will not be, available
    within a 3- to 4-year time-frame or, even, by 2010. The 2018 cap when
    combined with an earlier less stringent cap in 2010 provides strong
    incentive for companies to develop and implement advanced mercury
    controls as soon as the program begins.

        Question 6a. Administrator Leavitt, you recently committed EPA to
    undertake analyses of alternatives in addition to those proposed in the
    Utility Mercury Reductions Rule. Is EPA analyzing options that would
    propose a tighter Section 112 MACT standard? Or, are EPA's new analyses
    focusing solely on the Section 111 cap-and-trade program proposal?
        Response. The Agency has determined that some types of MACT
    analyses are not appropriate because IPM is not currently configured to
    analyze the type of near-term scenarios that would be required under
    MACT. However, the Agency has not ruled out performing more analysis of
    a Section 112 MACT approach.

        Question 6b. If the focus is on Section 111 alternatives only, why
    is this the case given the EPA Office of Research and Development white
    paper released on February 27, 2004 showing that existing NOx and
    SO2 control technologies, as well as mercury control
    technologies that soon will be available, enable mercury control well
    beyond the Section 112 proposal level?
        Response. EPA's 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. 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.
        The Section 112 Maximum Achievable Control Technology (MACT)
    approach has a clear timeline for compliance. Under MACT, reductions
    are required prior to the projected timeframe for when mercury-specific
    technologies will be broadly available.
        The Agency has determined that some types of MACT analyses are not
    appropriate because IPM is not currently configured to analyze the type
    of near-term scenarios that would be required under MACT. However, the
    Agency has not ruled out performing more analysis of a Section 112 MACT
    approach.

        Question 7. In its analysis of additional alternatives to those
    proposed in the Utility Mercury Reductions Rule, is EPA completing the
    Section 112 options analyses that were requested by the Federal
    Advisory Committee that EPA convened in conjunction with development of
    the Utility Mercury Reductions Rule? If not, why not?
        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.
        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. We will
    continue to consider the input of the Working Group as we move ahead to
    finalize the mercury rule.

        Question 8a. EPA's Office of Research and Development released a
    white paper on February 27, 2004 stating that mercury removal of 70-90
    percent is possible on 96 percent of the nation's coal-fired power
    generation capacity by 2010. According to the white paper, the
    reduction targets ``assume sufficient research and development and
    demonstrations'' of technology. Yet, the President's FY2005 budget cuts
    EPA's science and technology budget by $93 million. Does EPA's FY2005
    science and technology budget proposal cut research funding necessary
    to develop and demonstrate the technologies discussed and described in
    EPA's February 27 white paper?
        Response. The President's Budget request in FY2005 for science and
    technology does not reduce the Agency's research efforts to evaluate
    mercury control technologies for coal-fired power plants. Research
    planned for fiscal year 2005 includes activities to understand and
    evaluate, at a fundamental level, the factors that influence mercury
    capture; determine, at bench and small pilot-scale, the performance of
    different control options; and determine the leaching characteristics
    of residues generated by key mercury control technologies. EPA also
    plans to keep abreast of all technology development, evaluation, and
    demonstration activities in order to ensure the Agency is up to date on
    the state-of-the art of control technology to help guide future
    regulatory and enforcement programs. Finally, the Agency will continue
    to conduct research to evaluate and field test continuous emission
    monitors for coal fired power plants.

        Question 8b. Does EPA's FY2005 science and technology budget
    proposal include sufficient funding necessary to develop and
    demonstrate the technologies discussed and described in EPA's February
    27 white paper?
        Response. The projected timeframe for mercury control technology
    availability discussed in the referenced white paper is based on ``best
    engineering judgment and the assumption that a focused Research,
    Development & Demonstration program is carried out in an effective and
    expeditious manner.'' The funding included in the fiscal year 2005
    President's budget is adequate for the three components of the EPA part
    of the program described above. However, it should be noted that the
    total research effort is much broader than the scope of the Agency's
    research program, and is comprised of both Federal (DOE and EPA) and
    private (Electric Power Research Institute, several large utilities)
    projects. In fact, by far the largest component of this comprehensive
    effort, and the bulk of the large-scale testing and demonstration, is
    being funded by the Department of Energy.

        Question 8c. If not, how much additional funding would be necessary
    to fund the research and development effort so that mercury control
    technologies would be adequately tested and widely deployable by 2010?
        Response. As indicated in the response above, EPA believes the
    funding included in the fiscal year 2005 President's budget is adequate
    for the three components of the EPA part of the program described
    above.
                                     ______

         Responses by Micheal O. Leavitt to Additional Questions from
                               Senator Lieberman

        Question 1. Concerning the NOx and SOx rules, where you justified a
    two stage approach on the basis of an insufficient labor force to
    install the pollution control equipment. Have you reviewed the October
    report of the EPA which states that the labor force is sufficient? Will
    you make the reductions tighter for 2010?
        Response. The October report you mention in your question was
    published in 2002: Engineering and Economic Factors Affecting the
    Installation of Control Technologies For Multi-Pollutant Strategies, US
    EPA, October 2002. This analysis was performed in support of the Clear
    Skies legislative proposal. The report examined the resources required
    for the construction and operation of control technologies for multi-
    pollutant control strategies. This report made no conclusions with
    respect to the proposed Clean Air Interstate Rule (CAIR).
        Based on the analysis in the report, EPA concluded that the Clear
    Skies proposal was projected to have sufficient resources to meet the
    Phase I caps in 2010, although some resources were projected to be put
    under more pressure than others. Boilermaker labor was one of the
    resources that was projected to be under pressure in the early part of
    Phase I due to the simultaneous installation of NOx controls for the
    NOx SIP call. For the proposed Clear Skies Act, EPA also concluded that
    it would be difficult to predict the market supply of resources beyond
    Phase I but that the 2018 Phase II caps should allow ample time for the
    market to meet the resource demands.
        Concerning EPA's proposed CAIR, EPA used the October 2002 report as
    its basis for the conclusions it made for emissions caps and timing of
    those emission caps. However, the assumptions EPA made about resources
    and timing under Clear Skies would not necessarily apply under CAIR.
    EPA assumed legislation would have been enacted in the late 2003 or
    early 2004 timeframe, allowing over 6 years for sources to plan and
    install pollution control devices under Phase I. Under CAIR, this time
    would be shorter given that EPA intends to finalize the rule the latter
    half of 2004; states would have a year and a half to submit SIPs
    outlining their control strategies for sources; and sources would have
    about 3 and a half years for the planning and installation of controls
    before the start of Phase I in 2010. Therefore, EPA reached different
    conclusions about the timing and level of control under the CAIR
    rulemaking when compared to Clear Skies.
        EPA believes its proposed emissions caps and timing under CAIR are
    appropriate given our understanding of resource availability to install
    pollution control equipment. As part of the proposed rule, EPA has
    taken comment on these conclusions.

        Question 2. I am concerned about the number of our national parks
    that are in non-attainment areas. Can you assure this Congress that the
    boundaries for non-attainment areas for the 8-hour Ozone rule have been
    drawn to include the sources of ozone in the areas of nonattainment?
        Response. When we designated areas as attaining or not attaining
    the 8-hour ozone standard, we took into account whether a nearby area
    was significantly contributing to ozone non-attainment problems on
    National Park lands. Our designation decisions reflect the best
    information available and we are confident that air quality in parks
    will improve due to the combination of local and regional programs to
    reduce emissions of ozone precursors.
        EPA is taking action to improve air quality across the nation,
    including in national parks and wilderness areas. Our proposed Clean
    Air Interstate Rule, Non-Road Diesel Rule, and the NOx SIP call are
    just a few of the programs that will dramatically reduce regional
    transport of ozone, a key component of improving air quality in
    national parks.

        Question 3. Will you allow the BART rules to come into force on
    schedule, and assure this Congress that you will not delay their
    implementation?
        Response. We fully intend to allow the Best Available Retrofit
    Technology (BART) rules to come into force and be implemented on
    schedule, without delay. We are under consent decree to finalize the
    BART rules by April 15, 2005, and we intend to meet that deadline. We
    have already met the consent decree deadline for issuing the proposal
    on April 15, 2004.
        We expect States to include BART determinations for all sources
    subject to BART in their regional haze State Implementation Plans
    (SIPs), due in January, 2008. Consistent with the 1999 regional haze
    rule, all States must meet their BART requirements either through
    source-specific control requirements or through an approved trading
    program that achieves greater visibility improvement than would source-
    specific control requirements. EPA has proposed to find that the
    proposed Clean Air Interstate Rule (CAIR) would be an approvable
    trading program under BART for the electric generation sector in the
    states that the CAIR would cover. Such a program would achieve a
    greater visibility improvement than the source-specific BART, cover a
    larger number of electric generating units in those states, create
    greater emissions reductions, and, unlike BART, cap emissions from this
    sector.

          Responses by Michael O. Leavitt to Additional Questions from

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          Statement of Robert Eckels, County Judge, Harris County, TX

        Mr. Chairman and members of the Subcommittee, my name is Robert
    Eckels. I am the County Judge of Harris County, Texas. I want to thank
    the Committee for inviting me to testify on the implementation of the
    8-hour ozone and fine particulate National Ambient Air Quality
    Standards. Since 1995, as the presiding officer of the Harris County
    Commissioners Court, the governing body of the county, I represent all
    the citizens of the third most populous county in the United States.
    Harris County, which includes the city of Houston, is 1,788 square
    miles in area and home to 3.6 million residents making us more populous
    than 21 states. In my years of public service, first for 12 years as a
    member of the Texas Legislature and currently as County Judge, I have
    had the opportunity to be directly involved in air quality planning for
    the region. As Chairman of the Transportation Policy Council of the
    Houston-Galveston Area Council since 1998, I have overseen the
    environmental planning aspects of more than $2.7 billion in state and
    Federal funds invested to rebuild and expand the region's roadways. As
    a member of the Board of Directors of the National Association of
    Counties (NACo) and immediate past Chair of the NACo Environment,
    Energy and Land Use Policy Steering Committee I have had the
    opportunity to engage in national environmental issues, including air
    quality. Finally, over the past 4 years I've worked closely with
    citizens and community leaders in the Harris County region, with the
    Texas Commission on Environmental Quality and with the EPA to devise an
    acceptable air quality plan for that region. I can say from first-hand
    experience, air quality issues are among the most complex and divisive
    an elected official can experience.
        Clean air is of vital interest to all of us. It's important for the
    health of our citizens and for the health of our economy. This Nation
    has made great strides in improving air quality. Since 1970 we've
    achieved a 50 percent reduction in emissions while at the same time
    seen a 160 percent increase in the Gross Domestic Product and a 40
    percent increase in energy consumption. Yet, some 145 million citizens
    live in areas that are or will be designated as non-attainment for
    ozone and fine particulates. Clearly, more work is needed.
        I want to relay my personal experience in developing clean air
    plans to attain the 1-hour ozone standard in the Houston-Galveston
    region. I believe it will be relevant to what other major metropolitan
    areas are about to experience as the 8-hour ozone and fine particulate
    standards are implemented. We've embarked on an ambitious plan, with
    the backing of the environmental organizations, elected officials, the
    business community and state regulators, which touches all aspects of
    the air pollution problem. Industries in the 8-county Harris County
    region are investing $4 billion over the next 3 years to install state-
    of-the-art controls to reduce nitrogen oxides by 80 percent--ambitious
    by any standard. The Texas Legislature has funded the Texas Emission
    Reduction Program, a $150 million per year, 7-year grant program to
    reduce emissions from the mobile source sector faster than Federal
    controls will otherwise achieve.
        We've reformulated the diesel in our region, reduced speed limits,
    banned the use of commercial lawn maintenance before noon and initiated
    the first phase of a light rail mass transit system at a cost of $350
    million with no Federal funding. We've even regulated residential hot
    water heaters, requiring high efficiency units in new construction, and
    this is on top of an 80 percent reduction in industrial and automobile
    hydrocarbon emissions over the past 20 years. I believe this speaks to
    a strong commitment to clean air in Houston.
        As a public official, I worry about clean air and also about the
    economic vitality of our region. We want clean air and a sound economy.
    In 2000, the Greater Houston Partnership, our local Chamber of
    Commerce, sponsored a thorough, independent economic study of our clean
    air plan. This study was conducted by Dr. George Tolley, a former
    Deputy Secretary of the Treasury and Professor Emeritus of Economics
    and Social Sciences at the University of Chicago. He worked closely
    with Dr. Barton Smith of the University of Houston, a well-known and
    respected expert on the Houston regional economy. The study, published
    in 2001, looked at the socio-economic impacts of Houston's clean air
    plan and concluded that by 2010 the region will have 38,000 fewer jobs,
    Gross Regional Product reduced by $3.5 billion and reduced tax receipts
    to state and local government by $300 million dollars per year. These
    are serious economic consequences by any yardstick, but we believe they
    are necessary to attain the 1-hour standard.
        Let me look to the future for a moment. Some 530 counties
    nationwide will be designated as non-attainment for the 8-hour ozone
    standard; and we're in the process for making similar determinations
    for the fine particulate standard. Many of these areas will be non-
    attainment for the first time ever; others have been trying to attain
    for 30 years.
        EPA is now in the process of developing the regulatory framework
    for states to implement these standards. EPA modeling shows that many
    of these areas will attain the 8-hour ozone and fine particulate
    standards with measures already on the books such as cleaner fuels and
    engines, and with measures being implemented to reduce transported
    emissions. I want to commend the EPA and this Administration for these
    efforts.
        However, for some large metropolitan areas such as the Harris
    County region, New York City, large areas of New Jersey and
    Connecticut, Philadelphia, and others, the same EPA modeling shows
    continued non-attainment of the 8-hour ozone standard as far out as
    2020. This is after significant reductions in transport emissions
    either from Clear Skies or the Interstate Air Quality Rule, reductions
    from cleaner fuels and engines, and local 1-hour ozone control
    measures. Modeling by third parties such as the Ozone Transport
    Commission in the northeast and the Lake Michigan Air Directors
    Consortium in the mid-west supports the EPA predictions. This presents
    several important public policy issues for EPA, local elected officials
    and for this Committee to consider.
        The first policy issue for consideration is the attainment
    deadlines that EPA has proposed for these large metropolitan areas that
    modeling shows will not attain for the 8-hour ozone standard by 2020.
    These areas have proposed attainment deadlines in the 2010-2013
    timeframe, well before emission reductions from Federal measures such
    as transport and mobile source controls are fully realized. In fact,
    modeling in Harris County shows you can completely eliminate the
    industrial emissions or mobile source emissions and still not attain
    the standard. As a result of these areas not being able to achieve
    enough emission reductions to demonstrate attainment by their
    respective deadlines, they may not be able to submit approvable State
    Implementation Plans to the EPA. Unless these metropolitan areas can
    demonstrate through modeling that they will attain the standard by
    their designated deadlines, the Clean Air Act imposes sanctions,
    including the loss of Federal highway funds. In Harris County, this is
    about $1 billion per year in loss of Federal highway dollars and other
    restrictions on economic growth. One option suggested is to have states
    volunteer to move up into a more severe air quality classification to
    get more time for attainment, I can tell you from the standpoint of an
    elected official, this is not a feasible option.
        The second issue is the attainability of the standards. I'm not
    here to say we need to change or eliminate the 8-hour ozone or fine
    particulate standards. That is for the public health professionals and
    scientists to determine. However, I can say that EPA's modeling, and
    modeling by others, suggests these standards will not be attainable in
    some areas for the foreseeable future despite our best efforts.
    Unattainable standards only place more areas in the position of facing
    severe economic sanctions under the Clean Air Act because they can't
    submit approvable State Implementation Plans. I don't believe this is
    good public policy. It creates division in our communities and often
    results in litigation, which slows clean air progress.
        So, where do we go from here?
        First, I believe all areas need attainment deadlines that are
    technically and economically feasible. We need to acknowledge the EPA's
    modeling work and develop sound public policies for those areas that
    will not attain in the foreseeable future.
        Second, I believe air quality standards should be reasonable and
    attainable; otherwise areas will be in a position of not being able to
    submit approvable SIPs and living under economic sanctions or the
    threat of sanctions for the foreseeable future.
        Third, I believe we should fully capture the emission reduction
    benefits from existing and pending Federal control measures. We have
    and will continue to invest in cleaner fuels, engines and transport
    controls; let's capture those benefits at the local level before
    implementing the next round of very high cost controls, if any remain.
        Fourth, we need to take a closer look at how our current air
    quality management process is working and how it can be improved. One
    indicator I use to suggest the need for improvement is that despite
    literally hundreds of billions of dollars spent on Federal, regional
    and local control measures over the past 20 years, we still have not
    attained the ozone and PM standards in many areas. We're not even close
    in some areas. This suggests to me that we have an underlying science
    and policy problem that needs to be addressed.
        Finally, and speaking as a representative of NACo, county
    governments are ultimately responsible for protecting the health,
    welfare and safety of their citizens. Many rural and suburban counties
    do so with limited resources and are often brought into clean air plans
    because they are adjacent to large urban areas. Many times such
    counties are non-attainment because of upwind transport or because they
    have emissions from major freeways leading to the urban centers. These
    counties need a seat at the air quality table and they should not be
    penalized solely because they are impacted by adjacent urban areas.
    They need resources, support and flexibility from Federal agencies.
        In conclusion, as we continue our efforts to clean the nation's
    air, there needs to be a balance with economic prosperity. We need to
    be especially mindful of this, as we are required to make even more
    costly local investments and begin to look at how to alter human
    behavior to affect positive environmental change. Clean air and a sound
    economy do not have to be mutually exclusive but to accomplish both
    does require thoughtful public policy. That is an obligation the
    citizens of this country expect of all of us.
        I want to thank the EPA, this Administration and this Committee for
    the on-going hard work required to clean the nation's air. We've made
    progress and will continue to do so. I want to thank the Committee for
    asking me to testify today. I am happy to answer any questions you may
    have.
                                   __________
          Statement of Michael Fisher, President, Greater Cincinnati
                              Chamber of Commerce

        Chairman Voinovich, ranking member Carper, and distinguished
    members of the Clean Air, Climate Change and Nuclear Safety
    Subcommittee good morning.
        Chairman Voinovich, thank you for the invitation to present
    testimony today. My name is Michael Fisher and I am the President and
    CEO of the Greater Cincinnati Chamber of Commerce. It is an honor to
    have the opportunity to speak to the Subcommittee this morning. The
    issues on which you are deliberating on which many Americans, in the
    public and private sectors, are deliberating are issues critical to
    Greater Cincinnati its people, its environment and its economic
    prosperity.
        Our Chamber is one of the largest such business organizations in
    the country. We have more than 6000 business members ranging from
    global companies like Procter & Gamble, Toyota and GE Transportation to
    strong privately held middle market companies to sole proprietors.
    Eighty percent of our members have fewer than 50 employees. The number
    of manufacturing companies in our membership approaches 1000. Our
    region includes 15 counties in Southwestern Ohio, Northern Kentucky and
    Southeastern Indiana.
        Importantly, I want to stress that our Chamber's interests are
    aligned with the larger community interests. I mention this because the
    topic and process of attaining and maintaining environmental quality
    especially air quality has a common bottom line for our region
    undoubtedly for every region in America. That is: we want to achieve
    and exceed clean air standards--for ozone, particulates and regional
    haze. We want healthy citizens in healthy communities in a clean
    environment.
        The Greater Cincinnati Chamber has a long-standing commitment to
    clean air and a strong history of engagement in this issue. The Chamber
    played a lead role in local cooperative efforts to reduce ozone-levels
    while minimizing potential adverse economic consequences (government-
    mandated pollution-control measures and penalties that would curtail
    regional economic development). The Chamber was a co-founder of the
    Regional Ozone Coalition in 1994 and continues to participate with this
    group. The first such partnership among local government, business and
    community organizations in Ohio, Kentucky and Indiana, the Coalition
    works to prevent ozone levels from threatening the region's future.
    Coalition efforts resulted in redesignation of our region to
    ``attainment'' of the Federal ozone standard in early 2000. More
    recently, the Coalition has awarded financial incentives covering the
    incremental cost difference between a traditionally fueled vehicle and
    an alternatively fueled vehicle that creates less pollution. The
    Chamber has also encouraged businesses to participate in the Coalition
    directly.
        More recently, we also began collaboration with OKI (Ohio-Kentucky-
    Indiana Regional Council of Governments), our local metropolitan
    planning organization, to work with the state EPAs in our region on
    managing the impact of new regulations forthcoming as a result of the
    April 2004 attainment designation announcement.
        Before I share with you my thoughts on the business impacts of the
    current clean air standards, I would like to offer some personal
    context for my comments. First, I may be somewhat unique as a Chamber
    President. This is my first position as a civic leader. After building
    a manufacturing support service business that started with one customer
    and fifty employees to a substantial enterprise with eighty locations
    in 11 countries and 2500 employees, I stepped into my new community
    role 3 years ago. I am a fourth-generation, life-long resident of
    Cincinnati with a deep interest in improving not only the region's
    business climate, but its quality of life. I am also a parent of four
    children ages 8 to 15. For all of these reasons, I believe in improving
    our region's air quality: for my family, for the two million residents
    of our region and for the long-term economic attractiveness and
    competitiveness of Cincinnati USA.
        I am also very proud that we will be named one of America's Most
    Livable Communities at a National Press Club ceremony here in
    Washington in just a few weeks. But I find it ironic, and a bit
    frustrating, to be here today acknowledging that our community is also
    considered in non-attainment status by US EPA ozone standards.

                            AIR QUALITY IS IMPROVING

        Of course, it is important to celebrate real progress. Like many of
    our nation's urban areas, our region has made great strides in
    improving local air quality. Greater Cincinnati meets all air quality
    standards except for ozone and as I will point out later, our problem
    with the ozone standard does not result from monitoring data, but
    because, at the state level, certain control policies were improperly
    credited by Ohio EPA. In particular, the good news for Greater
    Cincinnati is that large particulate matter (PM10) has
    decreased by 33 percent since 1988. Fine particulates
    (PM2.5) have decreased 12 percent since 1999. In 2001,
    sulfur dioxide was measured at .005 parts per million, against a
    standard of .09. Nitrogen oxides are down from .035 parts per million
    in 1994 to .02 in 2002.
        Clearly, this demonstrates significant advances, even as our
    economy increased, energy consumption increased and vehicle miles
    traveled increased. But the work is not finished. We are committed to
    continuous improvement.
        The Greater Cincinnati Chamber of Commerce seeks continued air
    quality improvements and predictable regulatory and legislative
    requirements for business. Our members and our broader region are
    interested in a clear and comprehensive approach to air quality.
        Currently, our businesses face a confusing series of environmental
    laws and regulations that often lead to miscommunication, regulatory
    uncertainty, lost business investment and even higher energy costs.
    Hopefully, Congress will help by identifying improvements focused on
    results and predictability.

                 BUSINESS IMPACT OF NON-ATTAINMENT DESIGNATION

        Simply stated, conducting business in an area designated as non-
    attainment is more complicated, more time-consuming and more costly. In
    addition to the incremental burdens that are placed on the businesses
    already located here, the non-
    attainment designation is a disincentive for new business investment
    into our region.
        First and foremost, the consequence of regulatory uncertainty and
    the corresponding concerns over investment in non-attainment areas is
    job loss. A 1995 study conducted by NERA (National Economic Research
    Associates) Economic Consulting concerning the economic impact of ozone
    non-attainment in Greater Cincinnati projected job losses of 14,000,
    including both manufacturing and spin-off jobs, for the period 1995
    until 2000.
        In 1995 Greater Cincinnati was home to 162,000 manufacturing jobs
    according to state employment data. By 2003, that number had fallen to
    127,000. While it is difficult to discern the specific number of job
    losses attributable to the non-attainment designation, it is clear that
    the 35,000 workers were displaced and the non-attainment status was at
    least one contributing factor.
        The fact is, job growth and capital investment for existing
    operations in our region have been hindered by the non-attainment
    designation. This point is critical as one considers that 80 percent of
    a region's job growth stems from expansion of resident companies, not
    new business attraction.
        Sophisticated businesses carefully analyze the costs and risks
    associated with expansion in different locations. The increased
    scrutiny, potential for higher fines if permit violations occur, and
    the uncertainty over what the next round of regulations may bring; all
    serve as a disincentive for reinvestment and expansion of businesses,
    especially manufacturing operations, located in non-attainment areas
    like ours. Of course non-attainment areas are often urban areas--the
    very locations large metropolitan Chambers are frequently trying to
    revitalize.
        Our Chamber's internationally recognized and award-winning economic
    development team, the Cincinnati USA Partnership, has been told by
    national site location consultants that non-attainment areas are
    frequently not even included as potential locations for major new
    manufacturing projects. As a non-attainment area, Greater Cincinnati
    suffers in some cases because we never make it onto the prospect list.
        This can be especially true of foreign investors who are highly
    sensitive to compliance costs, potential public relations problems
    associated with environmental concerns, and the quality of life
    perceptions of their executives soon to be relocated to the United
    States.
        The tougher standards also add to the complexity. The Hamilton
    County (our major urban county) Department of Environmental Services
    strongly advises applicants for air permits to hire a consultant to
    assist in the development of information required for submission. While
    this is good for consulting businesses and for the applicant companies'
    lawyers, these are not the growth industries in which we are most
    interested.
        Air quality permits for companies in non-attainment areas are held
    to tougher standards and closer review. These stricter standards cost
    businesses time and money, and sometimes negatively impact the ability
    of a company to keep or win customers--especially when competitors,
    both domestic and overseas, are not held to the same standards.
        One of the most important assets of Greater Cincinnati is our
    outstanding transportation system. Because we are located within a 1-
    day drive of 60 percent of the North American population, our surface
    transportation infrastructure is an important selling point for our
    regional economic development efforts. The non-attainment designation
    even threatens the viability of this valuable asset, in part, because
    essential Federal highway dollars are jeopardized in non-attainment
    areas. Our region's metropolitan planning organization is required to
    demonstrate that its regional transportation improvement plan is
    consistent with the overall emissions budget for the region. Failure on
    this can also result in significant reductions in Federal highway
    funding.

                             PROCESS VERSUS RESULTS

        I would like to share with you one example of the impact of
    confusing regulations--the designation of Greater Cincinnati as a non-
    attainment area.
        Based on data from the 1980's, the Cincinnati area was classified
    as a moderate non-attainment area. After that designation, government,
    businesses and the community came together to develop a plan to reach
    attainment status. Following much work by a large and diverse group of
    stakeholders, and at substantial expense, the Greater Cincinnati region
    was designated as in attainment for ozone in 2000.
        Our success was short-lived. An adverse 2001 court decision by the
    U.S. Court of Appeals for the Sixth Circuit ruled on a technicality
    that the Ohio EPA erred in its evaluation and approval of our region's
    attainment plan, and the region was abruptly placed back in non-
    attainment. This re-designation happened in spite of the fact that the
    region's air quality has not exceeded the current 1-hour ozone standard
    since 1995--not a single violation has been recorded! (A violation
    occurs when a high level--greater than 120 parts per billion, averaged
    over 1 hour--of ozone is recorded more than three times at a single
    monitor within a 3-year period.)
        The 2001 ruling was a surprise and scuttled much hard work by our
    community. The case also illustrates a fundamental flaw with the
    current system great emphasis is placed on the process, often at the
    expense of focusing on actual air quality results.

                NEW DESIGNATIONS AND REGULATIONS ON THE HORIZON

        As you are well aware, the national business community is
    especially anxious about April 15th this year, and only not because it
    is ``tax day.'' In 2004 it is also ``final designation'' day. On that
    day, the US EPA is scheduled to issue its final designation of non-
    attainment areas under the 8-hour air quality standard for ozone,
    likely to affect thousands of communities across the country.
        For businesses and state EPAs alike, the permitting process has
    been challenging. We're concerned it may become overwhelming beginning
    later this month as the new regulations draw in thousands more
    facilities including many mid-size and smaller businesses. These
    businesses will be newly subject to air quality permitting requirements
    and state agencies will be challenged to thoroughly, and expediently,
    review more applications. The early months of the new regulatory
    framework are critical as state EPAs prepare for an onslaught of
    applications from an entirely new group of businesses in need of
    permits.
        In addition, the small- and mid-sized businesses facing these new
    equipment and compliance costs have scant resources to allocate for
    expert consultant assistance when adding new equipment or expanding
    operations.
        As a region and as a business community we need help. The current
    array of laws and regulations are difficult even for the experts to
    explain. The evolving standards challenge our businesses and ultimately
    cost us jobs. Strong businesses and strong regional economies are the
    result of good ideas, good planning, adequate resources and strong
    leadership--they succeed when they create a road map and follow it. We
    hope for a similarly focused approach from our very important partner,
    the Federal Government--development of a clear roadmap that provides
    certainty, and points business, and other sectors of the community, in
    the right direction to attain clean air compliance.

                                RECOMMENDATIONS

        In that spirit, I encourage the Congress to consider several
    improvements to the current legal and regulatory framework:
        (1) Increase certainty and predictability in regulations and laws
    so businesses can first understand them, and then do what they do
    well--plan accordingly, make smart investments and adjust to market
    conditions and opportunities.
        (2) Allow ample time for businesses to evaluate emission reduction
    strategies and technology options in order to make the best decisions.
        (3) Be sensitive to the compliance costs--especially as they impact
    small businesses.
        (4) Balance the solutions between stationary and mobile sources--
    proportionate to the sources of the pollution.
        (5) Place emphasis where it belongs--on results, NOT process.
        (6) Remember that businesses respond to incentives--consider
    providing more incentives to encourage compliance, rather than
    emphasizing enforcement measures.
        In closing, thank you for championing cleaner air, even as we all
    work hard together to build healthy communities and strong economies
    for the long-term.
        Chairman Voinovich, again, thank you for the opportunity to visit
    with you. Members of the Subcommittee, I appreciate your attention and
    will answer any questions you may have about my testimony.

                                   __________
        Statement of George D. Thurston, New York University School of
                 Medicine, Department of Environmental Medicine

        Mr. Chairman and members of the subcommittee, I am George D.
    Thurston, a tenured Associate Professor of Environmental Medicine at
    the New York University (NYU) School of Medicine. My scientific
    research involves investigations of the human health effects of air
    pollution.
        I am also the Director of the National Institute of Environmental
    Health Sciences' (NIEHS) Community Outreach and Education Program at
    NYU. A goal of this program is to provide an impartial scientific
    resource on environmental health issues to decisionmakers, and that is
    my purpose in testifying to you here today.
        The adverse health consequences of breathing ozone or particulate
    matter are serious and well documented. This documentation includes
    impacts demonstrated by controlled chamber exposures and by
    observational epidemiology showing consistent associations between
    these pollutants and adverse impacts across a wide range of human
    health outcomes. The implementation of the NAAQS promulgated by the
    U.S. EPA on July 18, 1997 will provide a substantial improvement in the
    public health protection provided to the American people by the Clean
    Air Act.
        Ozone (O3) is a highly irritating gas which is formed in
    our atmosphere in the presence of sunlight from other ``precursor'' air
    pollutants, including nitrogen oxides and hydrocarbons. These precursor
    pollutants, which cause the formation of ozone, are emitted by
    pollution sources including automobiles, electric power plants, and
    industry.
        Particulate Matter (PM) air pollution is composed of two major
    components: primary particles, or ``soot'', emitted directly into the
    atmosphere by pollution sources such as industry, electric power
    plants, diesel buses, and automobiles, and; ``secondary particles''
    formed in the atmosphere from sulfur dioxide (SO2) and
    nitrogen oxide (NOx) gases, emitted by many combustion sources,
    including coal-burning electric power plants.
        Observational epidemiology studies have shown compelling and
    consistent evidence of adverse effects by ozone and PM. These studies
    statistically evaluate changes in the incidence of adverse health
    effects in a single population as it undergoes varying real-life
    exposures to pollution over time, or across multiple populations
    experiencing different exposures from one place to another. They are of
    two types: (1) population-based studies, in which aggregated counts of
    effects (e.g., hospital admissions counts) from an entire city might be
    considered in the analysis; and, (2) cohort studies, in which selected
    individuals, such as a group of asthmatics, are considered. Both of
    these types of epidemiologic studies have confirmed the associations of
    ozone and PM air pollution exposures with increased adverse health
    impacts, including:
         decreased lung function (a measure of our ability to
    breathe freely);
         more frequent respiratory symptoms;
         increased numbers of asthma attacks;
         more frequent emergency department visits;
         additional hospital admissions, and;
         increased numbers of daily deaths.
        Among those people known to be most affected by the adverse health
    implications of air pollution are: infants, children, those with pre-
    existing respiratory diseases (such as asthma and emphysema), older
    adults, and healthy individuals exercising or working outdoors.
        The state of the science on particulate matter and health has
    undergone thorough review, as reflected in the in the recently released
    draft of the U.S. EPA Criteria Document for Particulate Matter--of
    which I am a contributing author. Since the PM2.5 standard
    was set in 1997, the hundreds of new published studies, taken together,
    robustly confirm the relationship between PM2.5 pollution
    and severe adverse human health effects. In addition, the new research
    has eliminated many of the concerns that were raised in the past
    regarding the causality of the PM-health effects relationship, and has
    provided plausible biological mechanisms for the serious impacts
    associated with PM exposure.
        In my own research, I have found that both ozone and particulate
    matter air pollution are associated with increased numbers of
    respiratory hospital admissions in New York City, Buffalo, NY, and
    Toronto, Ontario, even at levels below the current standards. My
    results have been confirmed by other researchers considering locales
    elsewhere in the world (e.g., see Schwartz, 1997). Indeed, the U.S. EPA
    used my New York City asthma and air pollution study results in their
    ``Staff Paper'' when setting the ozone air quality standard in 1997.
    Furthermore, I was Principal Investigator of an NIH funded research
    grant that showed in an article published in the Journal of the
    American Medical Association (JAMA) that long-term exposure to
    particulate matter air pollution is associated with an increased risk
    of death from cardiopulmonary disease and lung cancer, as displayed in
    Figure 1 (Pope et al, 2002). In fact, the increased risk of lung cancer
    from air pollution in polluted U.S. cities was found in this study to
    be comparable to the lung cancer risk to a non-smoker from living with
    a smoker. Thus, the health benefits to the U.S. public of meeting these
    new air quality standards by reducing ozone and particulate matter will
    be substantial.

    [GRAPHIC] [TIFF OMITTED] T4602.003

        But air pollution affects a much broader spectrum of human health
    than mortality. In 1997, in order to give the Congress some insight
    into the large numbers of adverse health effects that could be avoided
    by meeting the new air quality standards, I made working estimates of
    some of the other documented adverse health impacts of ozone exposure
    that will also be reduced in New York City when the proposed new ozone
    standard is fully implemented. The results of my analysis, which were
    included in the Senate hearing records at the time, are presented in
    Figure 1 below, entitled the ``Pyramid of Annual New York City Adverse
    Impacts of Ozone Avoided by the Implementation of the Proposed New
    Standard''.

    [GRAPHIC] [TIFF OMITTED] T4602.004

        While there are about 7 million persons in New York City, there are
    many more millions of persons throughout the U.S. who now live in areas
    exceeding the new O3 and particulate matter standards, and
    will therefore also benefit from the rapid implementation of these air
    quality standards. Thus, these New York City effects are best viewed as
    an indicator of a much broader spectrum of the avoidable adverse health
    effects being experienced by the Nation today as a result of ongoing
    air pollution exposures.
        Unfortunately, despite the fact that the new, more health
    protective ozone and particulate matters were set nearly 7 years ago,
    we have not made progress toward meeting those standards. As shown in
    Figure 3 below, ozone levels have been flat over the last decade, even
    rising slightly in the last 10 years, with a majority of U.S. air
    quality areas in non-compliance with the new ozone air quality
    standard. Among the worst areas, in terms of change over the last two
    decades is EPA's Midwest Region 5, including Ohio. We need to rapidly
    bring polluted areas into compliance with the new air quality standards
    if we are to adequately protect the U.S. public's health.

    [GRAPHIC] [TIFF OMITTED] T4602.005

        Similarly, as shown in Figure 4, while there was historical
    progress in reducing fine particle levels as a result of the states'
    command and control regulations and the U.S. EPA's SO2
    emissions trading/cap programs, this progress has slowed significantly
    since 1995. As noted in the figure, the areas of the country where
    regional particulate matter levels are worst are: the Midwest, the
    Southeast, and in California. The problems in California can be
    expected to improve in future years as low sulfur fuels and diesel
    controls are implemented, but the problems in the Eastern U.S. will not
    significantly improve until SO2 and NOx emissions from the
    unregulated coal-fired power plants are controlled.

    [GRAPHIC] [TIFF OMITTED] T4602.006

        Thus, it is important for committee members to realize that the
    downside to any further delay in controlling these pollutants is that
    these pollutants' adverse health effects will continue to occur
    unabated.
        Therefore, we must move forward in a vigorous fashion to achieve
    the new PM2.5 and ozone standards throughout the Nation as
    quickly as possible. If we don't, then the U.S. public will
    unnecessarily continue to bear the ongoing diminished quality of life
    and the health care costs we presently pay because of the adverse
    health effects of these air pollutants.
        Thank you for the opportunity to testify on this important issue.

                                   References

        Lall, R., Kendall, M., Ito, K., and Thurston, G. (2004).
    ``Estimation of Historical Annual PM2.5 Exposures for Health
    Effects Assessment''. Accepted for publication in: Atmospheric
    Environment.
        Pope, C.A. III, Burnett, R.T., Thun, M.J., Calle, E.E., Krewski,
    D., Ito, K., and Thurston, G.D. Lung cancer, cardiopulmonary mortality
    and long-term exposure to fine particulate air pollution. J. Am. Med.
    Assoc. (JAMA) 287(9):1132-1141 (2002).
        Schwartz, J. (1997) Health effects of air pollution from traffic:
    ozone and particulate matter. Health at the Crossroads: Transport
    Policy and Urban Health, T. Fletcher and A.J. McMichael Eds., John
    Wiley and Sons Ltd., New York, NY.
        Thurston, G.D. (1997) Testimony before the Committee on Environment
    and Public Works. Clean Air Act: Ozone and Particulate Matter
    Standards. Hearings Before the Subcommittee on Clean Air, Wetlands,
    Private Property and Nuclear Safety. 105th Congress. ISBN 0-16-055638-
    4. U.S. GPO, Washington, DC.
        U.S. EPA. (2003) Latest Findings on National Air Quality: 2002
    STATUS AND TRENDS, Office of Air Quality Planning and Standards, EPA
    454/ K-03-001, August 2003, RTP, NC.
        U.S. EPA (2003) Fourth External Review Draft of Air Quality
    Criteria for Particulate Matter (June 2003). EPA/600/P-99/002aD.
    National Center for Environmental Assessment--RTP Office, Office of
    Research and Development. Research Triangle Park, NC
      Statement of the Office of Research and Development, National Risk
     Management Research Laboratory, U.S. Environmental Protection Agency,
    Air Pollution Prevention and Control Division, Research Triangle Park,
                                       NC
     Control of Mercury Emissions from Coal-fired Electric Utility Boilers
                                  introduction
        During combustion, the mercury (Hg) in coal is volatilized and
    converted to elemental mercury (Hg\0\) vapor in the high temperature
    regions of coal-fired boilers. As the flue gas is cooled, a series of
    complex reactions begin to convert Hg\0\ to ionic mercury
    (Hg2+) compounds and/or Hg compounds (Hgp) that
    are in a solid-phase at flue gas cleaning temperatures or Hg that is
    adsorbed onto the surface of other particles. The presence of chlorine
    gas-phase equilibrium favors the formation of mercuric chloride
    (HgCl2) at flue gas cleaning temperatures. However, Hg\0\
    oxidation reactions are kinetically limited and, as a result, Hg enters
    the flue gas cleaning device(s) as a mixture of Hg\0\, Hg2+,
    and Hgp. This partitioning of Hg into Hg\0\,
    Hg2+, and Hgp is known as mercury speciation,
    which can have considerable influence on selection of mercury control
    approaches. In general, the majority of gaseous mercury in bituminous
    coal-fired boilers is Hg2+. On the other hand, the majority
    of gaseous mercury in sub-bituminous- and lignite-fired boilers is
    Hg\0\.
        Control of mercury emissions from coal-fired boilers is currently
    achieved via existing controls used to remove particulate matter (PM),
    sulfur dioxide (SO2), and nitrogen oxides (NOx). This
    includes capture of Hgp in PM control equipment and soluble
    Hg2+ compounds in wet flue gas desulfurization (FGD)
    systems. Available data also reflect that use of selective catalytic
    reduction (SCR) NOx control enhances oxidation of Hg\0\ in flue gas and
    results in increased mercury removal in wet FGD.
        Table 1 shows the average reduction in total mercury
    (HgT) emissions developed from EPA's Information Collection
    Request (ICR) data on U.S. coal-fired boilers. Plants that employ only
    PM controls experienced average HgT emission reductions
    ranging from 0 to 90 percent. Units with fabric filters (FFs) obtained
    the highest average levels of control. Decreasing average levels of
    control were generally observed for units equipped with a cold-side
    electrostatic precipitator (CS-ESP), hot-side ESP (HS-ESP), and
    particle scrubber (PS). For units equipped with dry scrubbers, the
    average HgT emission reductions ranged from 0 to 98 percent.
    The estimated average reductions for wet flue gas desulfurization (FGD)
    scrubbers were similar and ranged from 0 to 98 percent.
        As seen in Table 1, in general, the amount of Hg captured by a
    given control technology is greater for bituminous coal than for either
    sub-bituminous coal or lignite. For example, the average capture of Hg
    in plants equipped with a CS-ESP is 36 percent for bituminous coal, 3
    percent for sub-bituminous coal, and 0 percent for lignite. Based on
    ICR data, it is estimated that existing controls remove about 36
    percent of the 75 tons of mercury input with coal in U.S. coal-fired
    boilers. This results in current emissions of 48 tons of mercury.
        There are two broad approaches to mercury control: (1) activated
    carbon injection (ACI), and (2) multipollutant control, in which Hg
    capture is enhanced in existing/new SO2, NOx, and PM control
    devices. Relatve to these two approaches, this paper describes
    currently available data, limitations, estimated potential, and
    Research Development and Demonstration (RD&D) needs. Depending on
    levels appropriated by Congress, EPA may not be able to continue it's
    review of mercury removal technologies in fiscal year 2004.

     Table 1.--Average mercury capture by existing post-combustion control configurations used for PC-fired boilers
    ----------------------------------------------------------------------------------------------------------------
                                                               Average Mercury Capture by Control Configuration
                                        Post-combustion  -----------------------------------------------------------
        Post-combustiion Control       Emmission Control       Coal Burned in Pulverized-coal-fired Boiler Unit
                Strategy                    Device       -----------------------------------------------------------
                                         Configuration      Bituminous Coal   Subbituminous Coal        Lignite
    ----------------------------------------------------------------------------------------------------------------
    PM Control Only.................  CS-ESP............  36 percent........  3 percent.........  0 percent
                                      HS-ESP............  9 percent.........  6 percent.........  not tested
                                      FF................  90 percent........  72 percent........  not tested
                                      PS................  not tested........  9 percent.........  not tested
    PM Control and Spray Dryer        SDA+CS-ESP........  Not tested........  35 percent........  Not tested
     Adsorber.                        SDA+FF............  98 percent........  24 percent........  0 percent
                                      SDA+FF+SCR........  98 percent........  Not tested........  Not tested
    PM Control and Wet FGD System(a)  PS+FGD............  12 percent........  0 percent.........  33 percent
                                      CS-ESP+FGD........  75 percent........  29 percent........  44 percent
                                      HS-ESP+FGD........  49 percent........  29 percent........  Not tested
                                      FF+FGD............  98 percent........  Not tested........  Not tested
    ----------------------------------------------------------------------------------------------------------------
    (a) Estimated capture across both control devices.
    CS-ESP = cold-side electrostatic precipitator.
    HS-ESP = hot-side electrostatic precipitator.
    FF = fabric filter.
    PS = particle scrubber.
    SDA = spray dryer absorber system.

    STATE-OF-THE-ART OF CONTROLLING MERCURY EMMISSIONS BY ACTIVATED CARBON
                                   INJECTION

        ACI has the potential to achievw moderate to high levels of Hg
    control. The performance of an activated carbon is related to its
    physical and chemical characteristics. Generally, the physical
    properties of interest are surface area, pore size distribution, and
    particle size distribution. The capacity for Hg capture generally
    increases with increasing surface area and pore volume. The ability of
    Hg and other sorbates to penetrate into the interior of a particle is
    related to pore size distribution. The pores of the carbon sorbent must
    be large enough to provide free access to internal surface area by
    Hg0 and Hg2+ while avoiding excessive blockage by
    previously adsorbed reactants. As particle sizes decrease, access to
    the internal surface area of particle increases along with potential
    adsorption rates.
        Carbon sorbent capacity is dependent on temperature, the
    concentration of Hg in the flue gas, the flue gas composition, and
    other factors. In general, the capacity for adsorbing Hg2+
    will be different than that for Hg\0\. The selection of a carbon for a
    given application would take into consideration the total concentration
    of Hg, the relative amounts of Hg\0\ and Hg2+, the flue gas
    composition, and the method of capture [electrostatic precipitator
    (ESP), FF, or dry FGD scrubber].
        ACI may be used either in conjunction with existing control
    technologies and/or with additional control such as the addition of an
    FF. To date ACI has only been evaluated during short-term tests on
    commercially operating electrical generating plants. Longer-term tests
    of ACI have been limited to continuous operation, 24 hr/day-7days/week,
    for a period of less than 2 weeks at four field test sites. Also,
    combustion modification, such as coal reburning technology, may
    increase the carbon in fly ash and yield enhanced Hg capture in PM
    control devices.
        The Department of Energy/National Energy Technology Laboratory
    (DOE/NETL), the Electric Power Research Institute (EPRI) and a group of
    utility companies have funded projects to evaluate the use of ACI as
    summarized in Table 2. The Hg removal via ACI is measured between the
    inlet and outlet of the particulate matter control device. Note that
    these projects represent ACI applications that can be used to control
    Hg emissions from units that (1) are currently equipped with an ESP,
    and (2) burning bituminous or sub-bituminous coals. The tests at
    Alabama's Gaston Plant show the potential Hg control levels that can be
    achieved by installing a compact hybrid particulate collector (COHPAC)
    or small pulse-jet FF downstream of an existing ESP and injecting
    activated carbon upstream of the COHPAC unit.

                                            Table 2.--ACI Field Test Projects
    ----------------------------------------------------------------------------------------------------------------
                             Test Site Information                                   Mercury Capture, Percent
    ----------------------------------------------------------------------------------------------------------------
                                                             Particulate                 ACI Test    Long-term Test
               Test Site                    Coal               Control        Baseline   Results        Duration
    ----------------------------------------------------------------------------------------------------------------
    PG&E NEG Brayton Point, Unit 1.  Low-sulfur          Two CS-ESPs in           90.8       94.5  ACI for two 5-day
                                      Bituminous.         Series.                                   periods
    PG&E NEG Salem Harbor, Unit 1..  Low-sulfur          CS-ESP............         90         94  ACI for one 4-day
                                      Butiminous.                                                   period
    Wisconsin Electric Pleasant      Subbituminous.....  CS-ESP............          5         65  ACI for one 5-day
     Prairie, Unit 2.                                                                               period
    Alabama Power Gaston, Unit 3...  Low-sulfur          HS-ESP+COHPAC.....          0      25-90  ACI for one 9-day
                                      Bituminous.                                                   period
    University of Illinois, Abbott   High-sulfur         CS-ESP............          0         73
     Station.                         Bituminous.
    ----------------------------------------------------------------------------------------------------------------

        A mobile sorbent injection system and a mobile test laboratory were
    constructed for use at all test sites except Abbott. Norit lignite-
    based carbon, Darco-FGD, was used as the benchmark sorbent at all test
    sites. Tests at the sites generally included:
          the use of Apogee Scientific semi-continuous emission
    monitors (S-CEMs) for measurement of Hg\0\ and total vapor-phase Hg
    (Hgv);
          periodic measurements of Hgp, Hg2+
    and Hg\0\ with the Ontario-hydro (OH) method;
          laboratory and slipstream sorbent screening tests;
          baseline tests without the use of sorbents;
          parametric tests to evaluate the effects of process
    conditions and sorbent variables; and
          4- to 9-day tests with Darco-FGD.
        The purpose of tests at each site was to determine the performance
    and costs of activated carbon sorbents for controlling Hg emission from
    coal-fired electrical generating plants equipped only with an ESP. The
    field tests are summarized below.

    Brayton Point
        ACI testing was conducted on the 245-MW Unit 1, which fired a low-
    sulfur bituminous coal with 0.03 ppm Hg and 2000-4000 ppm chlorine. The
    unit is equipped with low-NO, burners and typically has high levels of
    unburned carbon (UBC) in the fly ash as indicated by loss on ignition
    (LOI) measurements. The PM control system at the unit is unusual in
    that it consists of two CS-ESPs in series and long duct runs. Carbon
    was injected between the ESPs.
        The average baseline removal efficiency across both ESPs averaged
    90.8 percent, as measured during three tests with the OH method. During
    parametric tests, a variety of activated carbons, including Darco-FGD,
    were injected just downstream of the first ESP. Incremental Hg removal
    efficiencies across the second ESP ranged from 3 to 93 percent
    depending on the carbon injection concentration. Total average Hg
    removal efficiencies across both ESPs as determined by the S-CEMs
    averaged 94.5 percent during injection of Darco-FGD at 10 lb/MMacf.
        Longer-term performance tests involved the continuous injection of
    Darco-FGD 24 hours/day for 10 days at two different injection
    concentrations. Five days of injection at 10  g/dncm was followed by 5
    days of injection at 20  g/dncm. The average removal efficiency across
    both ESPs during ACI concentrations of 10 lb/MMacf was 94.5 percent as
    measured during 3 OH method tests. These high Hg capture efficiencies
    are considered to be atypical of other CS-ESP units because of the high
    UBC concentrations, the two ESPs, and the long duct runs.

    Salem Harbor
        Tests were conducted on Unit 1, an 88 MW single wall-fired unit
    which is equipped with low-NOx, burners, a selective noncatalytic
    reduction (SNCR) system for NOx, control and a CS-ESP. Salem Harbor
    fires a South American low-sulfur bituminous coal with 0.03-0.08 ppm Hg
    and 206 ppm chlorine. The resulting fly ash had an LOI of 20 to 30
    percent.
        Parametric tests at reduced loads that lowered fly ash LOI to 15 to
    20 percent did not significantly reduce Hg capture. Increasing the ESP
    inlet temperature from 300+ F to 350+ F reduced Hg removal from
    approximately 90 percent to the 10-20 percent range. The effects of
    changes in LOI over test range of 15 to 30 percent were not as strong
    as the effects of temperature changes.
        During November 2002, 4 days of long-term sorbent injection tests
    were conducted with Darco-FGD at an injection concentration of 10 lb/
    MMacf. The average Hg capture efficiency during 3 OH tests was 94.0
    percent. The Hg0 concentrations for all inlet and outlet
    samples were below the method detection limit. More than 95 percent of
    the total inlet Hg was measured as Hgp, indicating nearly
    complete in-flight capture of Hg upstream of the ESP. The very high in-
    flight Hg capture by the UBC in fly ash and injected activated carbon
    are not believed to be representative of plants equipped with a CS-ESP.

    Pleasant Prairie
        ACI testing was conducted on the 600-MW Unit 2, which fired a PRB
    coal with 0.11 ppm Hg and 8 ppm chlorine. The unit is equipped with an
    ESP. Testing was conducted on one ESP chamber (\1/4\ of the unit). The
    plant sells its fly ash for use in concrete.
        Baseline tests using the OH method exhibited Hg capture in the ESP
    of about 5 percent with more than 70 percent of the Hg at the ESP inlet
    being Hg0. Major parametric test variables included sorbent
    properties and sorbent injection concentration. At low ACI
    concentrations, Hg reductions across the ESP were higher than expected,
    reaching 60 to 65 percent at injection concentrations near 10 lb/MMacf.
    Increasing sorbent injection concentrations to 20 to 30 lb/MMacf
    increased Hg reduction efficiencies to only about 70 percent.
    Subsequently, in long-term tests carbon was injected continuously at 24
    h/day for 5 days. OH measurements confirmed that about 60-70 percent
    mercury removal could be achieved at a carbon injection concentration
    of 10 lb/MMacf.

    Gaston
        ACI testing was conducted on the 270-MW Unit 3, which fired low-
    sulfur eastern bituminous coals with 0.14 ppm Hg and 160 ppm chlorine.
    The unit is equipped with low-NOx burners, a HS-ESP and a COHPAC, which
    was retrofit earlier to capture residual fly ash escaping the ESP.
    Testing was conducted on one-half of the flue gas stream.
        Baseline test results showed that neither the HS-ESP nor COHPAC
    captured a significant amount of Hg. During ACI parametric tests, Hg
    capture efficiencies ranged from 25 to more than 90 percent, depending
    on the carbon injection rate. ACI concentrations of 3 lb/MMacf resulted
    in gas-phase Hg reductions greater than 90 percent across the COHPAC.
    However, it was determined that ACI resulted in a significant increase
    in COHPAC cleaning frequency. The different activated carbons used in
    the parametric tests produced Hg capture efficiencies similar to Darco-
    FGD, the benchmark sorbent. Differences in sorbent particle size or
    base material (bituminous coal or lignite) did not result in
    appreciable performance differences. Subsequently, in long-term tests,
    carbon was injected continuously at 24 h/day for 9 days. The COHPAC
    cleaning frequency and ACI rate was kept at a reduced level to avoid
    adverse impacts on COHPAC bag life. Relatively short duration OH
    measurements reflected about 90 percent removal of mercury, but
    measurements taken with S-CEMS reflected about 78 percent removal over
    the period of the long-term testing.

    Abbott
        In the summer of 2001, EPRI sponsored ACI tests at the Abbott Power
    Plant located in Champaign, Illinois. Unit 5, the test unit, is a
    stoker-fired unit followed by air heater and a CS-ESP. During the
    tests, Unit 5 burned an Illinois Basin coal with nominal sulfur and
    chlorine contents of 3.8 and 0.25 percent, respectively. Activated
    carbons used during the parametric tests included Darco FGD, fine FGD
    (size segregated Darco FGD), and an experimental Corn Char sorbent.
        During the parametric tests ACI concentrations were varied from 5.1
    to 20.5 lb/MMacf. The ESP inlet temperatures ranged from 340+ F to 390+
    F. The performance of Darco FGD and the corn char sorbents were
    similar, showing increases in Hg capture proportional to the ACI
    concentration. The fine FGD sorbent exhibited improved performance
    relative to the standard FGD. The best performance, 73 percent Hg
    capture, was achieved by injection of fine FGD at 13.8 lb/MMacf at an
    ESP inlet temperature of 341+ F. The high sulfur flue gas appeared to
    impair the performance of the activated carbon. This is consistent with
    bench-scale research that shows that high SO2 concentrations
    diminished the adsorption capacity of activated carbons.
        Recently, EPA has estimated cost for ACI-based controls.\1\ These
    estimates range from 0.03-3.096 mills/kWh. However, the higher costs
    are usually associated with the plant configuration utilizing SDA+CS-
    ESP or HS-ESPs. Excluding the costs associated with the plant
    configurations involving SDA+ESP or HS-ESP, cost estimates are from
    0.03 to 1.903 mills/kWh. At the low end of this cost range, 0.03 mills/
    kWh, it is assumed that no additional control technologies are needed,
    but mercury monitoring will be necessary.
    ---------------------------------------------------------------------------
        \1\ Performance and Cost of Mercury and Multipollutant Emission
    Control Technology Applications on Electric Utility Boilers, EPA/600/R-
    03/110, October 2003, United States Environmental Protection Agency,
    Office of Research and Development, National Risk Management Research
    Laboratory, Research Triangle Park, NC.
    ---------------------------------------------------------------------------
                RD&D Needs for Sorbent Injection Systems
        In order to enhance the cost effective capture of Hg by ACI, and
    other sorbent injection systems, for the important coal type/retrofit
    control combinations, the following RD&D efforts are needed.
         Research efforts on Hg speciation and capture should be
    continued. These efforts will include bench- and pilot-scale
    investigations on the effects of flue gas composition, fly ash
    properties (UBC content and catalytic metal content), flue gas quench
    rates, and other important parameters. Speciation and capture computer
    models must be developed to evaluate field test results and for
    application to other utility sites.
         Development and demonstration of low-cost sorbents,
    impregnated sorbents and innovative sorbents that are effective in
    controlling Hg emissions from sub-bituminous coal and lignite should
    continue. High temperature sorbents for use with HS-ESPs also should be
    investigated.
         Development and demonstration of techniques to improve Hg
    capture in units equipped with an ESP, SDA/ESP or SDA/FF and burn sub-
    bituminous coal and lignite is needed. This will include evaluation of
    coal blending, combustion modifications, use of oxidizing reagents, and
    use of impregnated sorbents.
         Evaluation and demonstration of cost-effective ESP
    retrofit approaches including installation of ducting to increase
    residence times and use of circulating fluidized bed absorbers for
    optimal utilization of sorbents should be conducted. The use of
    multipollutant sorbents that capture SO2 and Hg should also
    be investigated.
         Determination and demonstration of optimum design and
    operating conditions for COHPAC applications on a range of boiler
    operating conditions is needed. This will include evaluation of the
    effects of air-to-cloth ratios, fabric filter material, cleaning
    frequencies, and baghouse arrangements on Hg capture. COHPAC-based
    tests should be conducted with both mercury and multipollutant
    sorbents.
         Continued evaluation of potential leaching or re-emission
    of mercury from sorbent/ash residues that are disposed of or utilized
    is needed.

          MERCURY CONTROL BY ENHANCING THE CAPABILITY OF EXISTING/NEW
                          SO2/NOX CONTROLS

        Implementation of fine PM standards, EPA's Interstate Air Quality
    Rule, Utility MACT rulemaking to control mercury emissions from utility
    boilers, the Clear Skies legislation and other multi-pollutant
    reduction bills in the Congress are focusing on future reductions of
    NOx, SO2, and mercury emissions from power plants. Also, a
    significant fraction of existing boiler capacity already has wet or dry
    scrubbers for SO2 control and/or SCR for NOx control. As
    such, multipollutant control approaches capable of providing
    SO2/NOx/Hg reductions are of great interest. These
    approaches and their potential impact on mercury reductions are
    discussed below.

    Multipollutant Removal in Wet FGD
        More than 20 percent of coal-fired utility boiler capacity in the
    United States uses wet FGD systems to control SO2 emissions.
    In such systems, a PM control device is installed upstream of the wet
    FGD scrubber. Wet FGD systems remove gaseous SO2 from flue
    gas by absorption. For SO2 absorption, gaseous SO2
    is contacted with a caustic slurry, typically water and limestone or
    water and lime.
        Gaseous compounds of Hg2+ are generally water-soluble
    and can absorb in the aqueous slurry of a wet FGD system. However,
    gaseous Hg0 is insoluble in water and therefore does not
    absorb in such slurries. When gaseous compounds of Hg2+ are
    absorbed in the liquid slurry of a wet FGD system, the dissolved
    species are believed to react with dissolved sulfides from the flue
    gas, such as H2, to form mercuric sulfide (HgS); the HgS
    precipitates from the liquid solution as sludge.
        The capture of Hg in units equipped with wet FGD scrubbers is
    dependent on the relative amount of Hg2+ in the inlet flue
    gas and on the PM control technology used. ICR data reflected that
    average Hg captures ranged from 29 percent for one PC-fired ESP plus
    FGD unit burning sub-bituminous coal to 98 percent in a PC-fired FF
    plus FGD unit burning bituminous coal. The high Hg capture in the FF
    plus FGD unit was attributed to increased oxidization and capture of Hg
    in the FF followed by capture of any remaining Hg2+ in the
    wet scrubber.

    RD&D Needs for Wet FGD Systems to Enhance Mercury Capture
         Achieving high Hg removal efficiencies in a wet scrubber
    depends on mercury in the flue gas being present in the soluble
    Hg2+ form. While the majority of mercury in bituminous coal-
    fired boilers exists as Hg2+, the fraction available as
    Hg2+ varies. Further, as discussed above, flue gases from
    sub-bituminous and lignite coal-fired boilers predominantly contain
    Hg0, which is insoluble. Therefore, to ensure high levels of
    mercury capture in wet scrubbers in a broad range of applications,
    process means for oxidizing Hg0 in coal combustion flue gas
    are needed. RD&D efforts should be conducted with the objective of
    making available oxidizing catalysts and reagents by 2015. Also, RD&D
    efforts should be undertaken to examine coal blending as a means to
    increase oxidized mercury content in flue gas.
         Scrubber design and operating conditions may require
    modification to optimize Hg dissolution in the scrubber liquor.
    Therefore, optimization research should be undertaken at pilot-scale
    and then demonstrated at full-scale.
         It has been noted that in some scrubbers, dissolved
    Hg2+ is reduced to Hg0, which can be stripped
    from the scrubbing liquor and entrained in the stack gas. RD&D efforts
    should be conducted in this area with additives developed in bench- and
    pilot-scale testing and demonstrated at full-scale.
         Since a significant portion of the absorbed Hg may end up
    in the spent scrubber liquor in the form of dissolved aqueous-phase
    Hg2+, RD&D should be conducted to develop Hg removal
    techniques from wastewater.
         RD&D efforts should be conducted to make available
    multipollutant scrubbers capable of removing SO2, Hg, and
    NOx, from flue gases of coal-fired boilers. Research conducted in the
    1970's through 90's has investigated removal of NOx in wet scrubbers.
    Since use of wet scrubbers at power plants is expected to increase in
    the near future in response to regulatory requirements, it is very
    desirable to develop wet scrubber-based technologies capable of
    providing simultaneous SO2-Hg-NOx, control. Such
    technologies would not only make wet scrubbers more cost-effective, but
    would avoid the need for installing additional control equipment,
    especially at constrained plant layouts.
         Full-scale demonstrations should be conducted to achieve
    high levels of mercury control using ACI with wet FGD, with or without
    additional oxidizing agents. This is especially relevant to sub-
    bituminous- and lignite-fired boilers.

    Multipollutant Removal in Dry Scrubbers
        More than 10 percent of the U.S. coal-fired utility boiler capacity
    uses spray dryer absorber (SDA) systems to control SO2
    emissions. An SDA system operates by the same principle as a wet FGD
    system using a lime scrubbing agent, except that the flue gas is mixed
    with a fine mist of lime slurry instead of a bulk liquid (as in wet
    scrubbing). The SO2 is absorbed in the slurry and reacts
    with the hydrated lime reagent to form solid calcium sulfite and
    calcium sulfate. Hg2+ may also be absorbed. Sorbent
    particles containing SO2 and Hg are captured in the
    downstream PM control device (either an ESP or FF). If the PM control
    device is a FF, there is the potential for additional capture of
    gaseous Hg0 as the flue gas passes through the bag filter
    cake composed of fly ash and dried slurry particles.
        ICR data reflected that units equipped with SDA scrubbers (SDA/ESP
    or SDA/FF systems) exhibited average Hg captures ranging from 98
    percent for units burning bituminous coals to 24 percent for units
    burning sub-bituminous coal.

    RD&D Needs for Dry Systems to Enhance Mercury Capture
         SDA is considered to be quite effective in removing
    Hg2+ from flue gases. Full-scale demonstrations of SDA and
    ACI should be conducted to achieve high levels of SO2 and
    mercury controls on sub-bituminous and lignite-fired boilers. These
    demonstrations should include both ESP and FF PM controls.
         Circulating fluidized bed absorber technology appears
    promising to provide high levels of SO2 and Hg control.
    Recent applications of this technology reflect SO2 control
    in excess of 90 percent. As for mercury control, limited pilot-scale
    experience has shown high mercury removal rates. This technology, with
    or without ACI, should be demonstrated for mercury control in several
    full-scale tests using a range of coals.

    Multipollutant Removal Via SCR and Wet FGD
        As mentioned above, the speciation of mercury is known to have a
    significant impact on the ability of air pollution control equipment to
    capture it. In particular, the oxidized form of mercury, mercuric
    chloride (HgCl2), is highly water-soluble and is, therefore,
    easier to capture in wet FGD systems than Hg0 which is not
    water-soluble. SCR catalysts can act to oxidize a significant portion
    of the Hg0, thereby enhancing the capture of mercury in
    downstream wet FGD.
        Several studies have suggested that oxidation of elemental mercury
    by SCR catalyst may be affected by the following:
         The space velocity of the catalyst;
         The temperature of the reaction;
         The concentration of ammonia;
         The age of the catalyst; and
         The concentration of chlorine in the gas stream.
        DOE, EPRI, and EPA have co-sponsored a field test program that
    evaluated mercury oxidation across full-scale utility boiler SCR
    systems. Testing was performed at four coal-fired electric utility
    plants having catalyst age ranging from around 2500 hours to about 8000
    hours. One plant fired sub-bituminous coal and three other plants fired
    Eastern bituminous coal. The test results showed high levels of mercury
    oxidation in two of the three plants firing eastern bituminous coal and
    insignificant oxidation at the other two plants (one firing bituminous
    coal and the other, sub-bituminous). For the bituminous coal-fired
    plant with low mercury oxidation, over 50 percent of the mercury at the
    SCR inlet was already in the oxidized form. It is also noted that the
    SCR system at this plant was operated with significantly higher space
    velocity (3930 hr-1) that those of the other plants (1800-
    2275 hr-1). Finally, ammonia appeared to have little or no
    effect on mercury oxidation.
        The two bituminous coal-fired plants at which high levels of
    mercury oxidation across SCRs was observed were retested in the
    following year (2002). Again, similar high levels of oxidation were
    observed. Two additional plants firing bituminous coals were also
    tested in 2002. Results of the tests showed high levels of mercury
    oxidation, similar to the two plants tested previously. Currently, a
    DOE-sponsored field test program is further evaluating the potential
    effect of SCRs and FGDs on mercury removal.
    RD&D Needs for SCR and Wet FGD Systems to Enhance Mercury Capture
         Aging of SCR catalyst with regard to mercury oxidation
    should be examined in bench-, pilot-, and field tests.
         SCR impact on mercury oxidation should be examined for
    sub-bituminous and lignite-coal-fired boilers and boilers firing coal
    blends. These impacts should be evaluated on pilot- and field-scales.
         Bench- and pilot-scale research on understanding the
    science behind SCR-Hg interactions should be continued. This research
    has the potential to provide valuable information for optimizing SCR
    catalysts for combined NOx and mercury control.

      POTENTIAL IMPACT OF COAL USE AND AVAILABILITY OF NOX/SO2
                          CONTROLS ON MERCURY CONTROL

        In general, the extent to which mercury control approaches
    discussed above may be utilized in the future would depend on the
    extent to which coal would be used in U.S. power plants and the
    availability of existing/new NOx/SO2 emission controls in
    response to potential emission reduction requirements.
        Figures 1 and 2 depict projected United States coal consumption and
    production trends for the United States, respectively. It is evident
    from Figure 1 that the majority of coal consumed in the U.S. is by the
    electric power generation sector and that this consumption rate is
    expected to increase in the future. Figure 2 reflects that the amount
    of low-sulfur coals (e.g., sub-bituminous coals) produced has been
    significant and this production is expected to increase in the future.
    Based on these data, it can be deduced that consumption of low-sulfur
    coals in the power generation sector is expected to increase in the
    future. As discussed above, control of mercury emissions from boilers
    firing low-rank (sub-bituminous and lignite) coals is more difficult
    that from boilers firing bituminous coals. Considering the projected
    increase in use of low-sulfur (i.e., low-rank) coals, it is important
    that cost-effective approaches for controlling mercury emissions from
    boilers firing such coals be developed via focused RD&D efforts.

    [GRAPHIC] [TIFF OMITTED] T4602.007

        The trends in coal-fired capacity equipped with SCR and scrubbers
    based on EPA's analysis of Clear Skies Act are shown in Figures 3 and
    4, respectively. It is clear from these figures that current and future
    NOx and SO2 emission reduction requirements are expected to
    result in large capacities (about 100 GW each) of SCR and scrubber
    systems for coal-fired utility boilers, as early as 2005. Further,
    these capacities are expected to increase at steady and significant
    rates. These projections underscore the need to engage in focused RD&D
    efforts to determine cost-effective means for optimizing/tweaking these
    NOx/SO2 controls to achieve mercury control as a co-benefit
    with small incremental costs.
    ---------------------------------------------------------------------------
        \2\ Source: Annual Energy Outlook 2003 with Projections to 2025,
    DOE/EIA-0383(2003), Energy Information Administration, Office of
    Integrated Analysis and Forecasting, U.S. Department of Energy,
    Washington, DC 20585, January 2003.

    [GRAPHIC] [TIFF OMITTED] T4602.008

                            SUMMARY AND CONCLUSIONS

        Although the potential Hg emissions are calculated to be 75 tons
    per year based on the Hg content in coal, the actual current emissions
    are estimated to be 48 tons per year due to Hg capture with pollution
    controls for PM and SO2. The reduction at any individual
    plant ranges from 0 to 98 percent dependent on coal type, control
    technology type, and other unquantified factors.
    ---------------------------------------------------------------------------
        \3\ Source: ``2003 Technical Support Package for Clear Skies:
    Section D: 2003 projected impacts on generation and fuel use,''
    available at http://www.epa.gov/air/clearskies/technical.html.
    ---------------------------------------------------------------------------
        A very limited set of short term full-scale trials of activated
    carbon injection have been carried out as described earlier in this
    white paper. These trials do not cover a representative range of
    control technology/fuel combination that would be required to
    demonstrate the widely achievable levels of Hg control that might be
    achieved in a cost-effective manner. Furthermore, they represent short-
    term (4-9 day) continuous operation and do not address all of the
    operational issues and residue impacts that may be associated with
    commercial operation. Therefore, these technologies are not currently
    commercially proven to consistently achieve high levels of Hg control
    on a long-term basis.
        These data provide a basis for hypothesizing the levels of Hg
    reductions that might be achievable using technology specifically for
    Hg control alone or enhanced capture in existing or new systems for
    control of SO2 and NOx, These estimates contained in Table 3
    are based on best engineering judgment and the assumption that a
    focused RD&D program is carried out in an effective and expeditious
    manner.
        Key observations are as follows:
        1. The data base clearly indicates that Hg emission controls for
    low-rank (sub-bituminous and lignite) coal-fired boilers are more
    difficult than for bituminous-fired boilers. Further, a significant
    amount of low-rank coal is currently being used by the electric utility
    industry, and this use is expected to increase in the future.
    Accordingly, it is important to engage in focused RD&D efforts aimed at
    developing emission controls for low-rank coal-fired boilers.
        2. Assuming sufficient development and demonstrations are carried
    out, by 2010, ACI with an ESP has the potential to achieve 70 percent
    Hg control. ACI with an ESP and a retrofit fabric filter, or a fabric
    filter alone, has the potential to achieve 90 percent Hg reduction.
    Proper design and consideration of operational and residue impacts need
    to be incorporated into the effort.
        3. Projections reflect that current and future NOx and SO2
    emission reduction requirements are expected to result in large
    capacities (over 100 GW each) of SCR and scrubber systems for coal-
    fired utility boilers, as early as 2005. Further, these capacities are
    expected to increase at steady and significant rates. Ongoing R&D has
    the potential to provide the basis for enhanced Hg removal in
    retrofitted system by 2010. Assuming sufficient research development
    and demonstration of representative technologies, by 2015 new and
    existing systems installed to control NOx, and SO2 (e.g.,
    SCR+FGD+FF) have the potential to achieve 90 to 95 percent control of
    Hg. Subbituminous and lignite systems may require Hg oxidation
    technology and/or additional advanced sorbents to achieve these levels.
    The longer timeframe for these systems is driven by the fact that more
    R&D is required to optimize Hg control approaches before demonstrations
    are conducted.
        4. Cost estimates fall in a wide range. It is projected that the Hg
    removal capabilities projected in Table 3 would add no more than about
    3 mills/kWh to the annualized cost of power production. Control by an
    enhancing/optimizing FGD and SCR has the potential to reduce such costs
    substantially, since optimized systems may require little additional
    investment and/or operational costs, especially for bituminous coals.
        5. The projected performance in Table 3 represents the date by
    which the demonstration of the most difficult case (e.g., lignite) for
    the particular technology would be completed. The demonstrations of the
    technology for easier situations (e.g., high-chlorine bituminous coal)
    could be completed somewhat earlier. It is important to note that
    completion of such demonstrations would represent only the potential
    initiation of the retrofit program which would take a number of years
    to fully implement, assuming of course, both successful demonstrations
    and a regulatory driving force. The time it would take to fully deploy
    such technologies would depend on a number of factors, including the
    specifics of the regulatory mandates, available vendor capability to
    meet the hardware demand, and the time for design and construction of
    the specific retrofit technologies selected.
        Based on our experience with coal-fired utility boiler retrofit
    technologies, we estimate that once a utility has signed a contract
    with a vendor, installation on a single boiler could be accomplished in
    the following timeframe:
         ACI on an existing ESP or FF could be installed in
    approximately 1 year;
         ACI and a retrofit fabric filter (e.g., COHPAC) could be
    retrofitted to an existing ESP in approximately 2 years; and
         a new SCR/FGD/PM/Hg control system could be retrofitted in
    3-4 years dependent on the retrofit difficulty.
         existing SCR or FGD to enhance Hg control could be
    retrofitted in about 1 year
        6. Table 3 also reflects the existing capacities associated with
    key coal type/control technology combinations. These capacities, with
    the exception of CS-ESP + retrofit FF and PM + dry FGD, are
    significant, thereby underscoring the fact that development of mercury
    control approaches would need to take into consideration these key coal
    type/control technology combinations. The relatively low capacity
    associated with the CS-ESP + retrofit FF combination is not surprising
    because in the absence of mercury reduction requirements, relatively
    few plants have used this combination to control residual amounts of
    fly ash escaping their ESPs. Again the relatively low capacity
    associated with PM + dry FGD is a result of the present economics
    associated with sulfur reduction via wet or dry FGD or firing low-
    sulfur coal. However, as discussed above, in the presence of mercury
    reduction requirements, these latter combinations will offer attractive
    mercury control approaches.

          Table 3.--RD&D goals for projected cost-effective mercury removal capability (percent) for key coal type/control technology combinations.\4\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Projected Hg Removal Capability in    Projected Hg Removal Capability in    Projected Hg Remnoval Capability
                                    Existing        2010 by the Use of ACI\4\          2010 by Enhanced Multipollutant           in 2015 by Optimizing
          Control Technology        Capacity --------------------------------------              Controls\4\                  Multipollutant Controls\4\
                                     (MW) in                                       -------------------------------------------------------------------------
                                     2003\5\  Bituminous (Bit.)    Low-rank coals       Bit. coals       Low-rank coals      Bit. coals      Low-rank coals
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    PM Control Only-CS-ESP........    153133  70\6\............  70\6\............  NA\7\............  NA...............  NA..............  NA
    PM Control Only-CS-ESP +            2591  90...............  90...............  NA...............  NA...............  NA..............  NA
     retrofit FF.
    PM Control Only-FF............     11018  90...............  90...............  NA...............  NA...............  NA..............  NA
    PM+ Dry FGD...................      8919  NA...............  NA...............  90\8\............  60-70\8\.........  90-95\8\........  90-95\8\
    PM + Wet FGD..................     48318  NA...............  NA...............  90\9\............  70-80\9\.........  90-95\9\........  90-95\9\
    PM + Wet or Dry FGD + SCR.....     22586  NA...............  NA...............  90...............  70-80\10\........  90-95\10\.......  90-95\10\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \4\ Based on the assumption of aggressive RD&D implementation as outlined elsewhere in this white paper.
    \5\ Capacity values have been obtained from EMF controls available in ``EPA's 2003 Clear Skies Act parsed file for 2010'' available at http://
      www.epa.gov/airmarkets/epa-ipm/results2003.html. The capacity values have been rounded to the nearest whole number.
    \6\ This control level is based on data from the Pleasant Prairie field tests.
    \7\ NA = not applicable.
    \8\ Assumes that additional means to ensure oxidation of Hg0 or innovative sorbents will be used as needed.
    \9\ Assumes that means to oxidize Hg0 will be used as needed. Note that in some cases this may, in part, be accomplished by FF.
    \10\ Assumes that additional means to ensure oxidation of Hg0 or innovative sorbents will be used as needed.

                                   __________
                   Statement of the American Lung Association

         2003 SELECTED AIR POLLUTION HEALTH STUDIES OF NOTE: OZONE AND
                               PARTICULATE MATTER

        Periodically, the American Lung Association summarizes selected
    studies from current research in the published literature on outdoor
    air pollution. These summaries are grouped below by major topic. These
    summaries are in no way intended to substitute for medical information
    from a physician, nor are they intended to represent conclusions of the
    American Lung Association. Citations for all studies are provided.

                             ADVERSE BIRTH OUTCOMES

    L.A. Women Who Live Near Busy Roads Have Increased Risk of Premature
            Births.
        Researchers at UCLA have previously reported that increases in
    ambient air pollution in the Los Angeles basin increase the risk of low
    birth weight babies and premature births. This followup study examined
    mothers' differential exposure to air pollutants resulting from living
    near roadways with heavy traffic.
        Researchers examined data on low birth weight and/or pre-term birth
    in Los Angeles County between 1994-1996. They mapped the home locations
    at birth, and estimated exposure to traffic-related air pollution using
    a measure that takes into account residential proximity to and level of
    traffic on roadways surrounding homes.
        The study reported a 10-20 percent increase in the risk of pre-term
    births and low birth weight in infants born to women potentially
    exposed to high levels of traffic-related air pollution. Women whose
    third trimester fell during the fall or winter, when atmospheric
    stability tends to limit dispersion of pollutants, experienced the
    greatest effects.
        Willhelm, M., and Ritz, B. Residential Proximity to Traffic and
    Adverse Birth Outcomes in Los Angeles County, California, 1994-1996.
    Environmental Health Perspectives, Vol. 111, No. 2, pp. 207-216,
    February 2003.
    Maternal Exposure to Air Pollution May Lower Birth Weight of Babies
        A study in Kaohsiung, Taiwan has reported a significant exposure-
    response relationship between material exposures to sulfur dioxide and
    PM10 during the first trimester of pregnancy and lowered
    birth weight. The study of 54,000 deliveries in Taiwan's second largest
    city correlated mothers' residences with data from air quality
    monitoring stations less than 2 kilometers away.
        Maternal exposures were estimated for the different gestational
    stages of each child. Various confounders including maternal age,
    season, marital status, maternal education and infant gender were
    controlled for.
        Another study on the relationship between low birth weight and air
    pollution exposure in Seoul, Korea found that exposure to carbon
    monoxide, PM10, sulfur dioxide, and nitrogen dioxide during
    early to mid-pregnancy contributes to risks or low-birth weight babies.
        Yang, C.Y., Tseng, Y.T., Chang, C.C. Effects of Air Pollution on
    Birth Weight Among Children Born Between 1995 and 1997 in Kaohsiung,
    Taiwan. J Toxicol Environ Health, A. Vol. 65, No. 9, pp. 6070816, May
    9, 2003.
        Lee, B.E., Ha, E.H., Park, H.S., Kim, Y.J., Hong, Y.C., Kim, H.,
    and Lee, J.T. Exposure to Air Pollution During Different Gestational
    Phases Contributes to Risks of Low Birth Weight. Human Reproduction.
    Vol. 3, pp. 638-643, March 2003.
    Low Concentrations of Gaseous Air Pollutants and Adverse Birth Outcomes
        Recent studies in China, the Czech Republic, and the United States
    have related ambient air pollution to adverse pregnancy outcomes. This
    study examines relationships between pre-term birth, low birth weight,
    and intrauterine growth retardation and ambient concentrations of
    sulfur dioxide, nitrogen dioxide, carbon monoxide, and ozone in
    Vancouver, Canada, a relatively clean city.
        Researchers conclude that, overall, the associations among SO2
    and low birth weight, pre-term birth, and intrauterine grown
    retardation ``appear to be the most robust against copollutant
    adjustment,'' but that the effects of air pollutants on birth outcomes
    are likely related to more than one component of the complex mix of air
    pollutants present in urban environments.
        Siu, S., Krewski, D., Shi, Y., Chen, Y., and Burnett, R.T.
    Association between Gaseous Ambient Air Pollutants and Adverse
    Pregnancy Outcomes in Vancouver, Canada. Environmental Health
    Perspectives., Vol. 111, No. 14, pp. 1773-1778, November 2003.

                        EFFECTS ON INFANTS AND CHILDREN

    Infants are Most Susceptible Age Group to Mortality from Air Pollution
        This is the first study to determine that infants are more
    susceptible to mortality from air pollution than other age groups.
    Researchers tracked daily counts of total and respiratory death in
    Seoul, Korea relative to PM10 and other air pollutant
    concentrations for three age groups: infants aged 1 month to 1-year
    old, those from 2-years to 64-years old, and those over 65 years of
    age. Newborns were not included in the study.
        For all age groups, the number of total deaths and particularly
    respiratory deaths increased on days when PM10 air pollution
    was the worst, but the effect was most pronounced in infants. The
    elderly were second in increased susceptibility.
        Researchers hypothesize that:

              ``Infants are more vulnerable to respiratory disease leading
            to death from particulate air pollution, because the infant
            lung and immune system is immature and unable to control
            adequately the inflammation resulting from exposure to ambient
            particles.''

        The researchers conclude that the results of their study have
    ``serious implications on the air pollution criteria, which should be
    based on the effects on infant health rather than on adult health.''
        Ha, E.-H., Lee, J.-T., Kim, H., Hong, Y.-C., Lee, B.-E., Park, H.-
    S., and Christiani, D. Infant Susceptibility of Mortality to Air
    Pollution in Seoul, South Korea. Pediatrics. Vol. 111, pp. 284-290,
    February 2003.

    Ozone Alters Development of Trachea in Infant Rhesus Monkeys
        This study examined the development of the ``basement membrane
    zone'' in the trachea of infant rhesus monkeys exposed to ozone,
    filtered air, and ozone plus allergen from house dust mites. In
    monkeys, this structure develops after birth, allowing studies of the
    effects of environmental exposures.
        The study found significant differences, including irregular width,
    in the tracheal ``basement membrane zone'' in monkeys exposed to either
    ozone, or ozone plus allergens, during the developmental period. This
    resulted in altered regulation of proteins that may explain the
    atypical development of the lung observed in rhesus monkeys after
    exposure to ozone.
        Evans, M.J., Fanucchi, M.V., Baker, G.L., Van Winkle, L.S., Pantle,
    L.M., Nishio, S.J., Schelegle, E.S., Gershwin, L.J., Miller, L.A.,
    Hyde, D.M., Sannes, P.L., and Plopper, C.G. Atypical Development of the
    Tracheal Basement Membrane Zone of Infant Rhesus Monkeys Exposed to
    Ozone and Allergen. American Journal of Physiology--Lung Cellular and
    Molecular Physiology. Vol. 285, pp. 931-939, June 27, 2003.

    Diesel Exposure Increases Susceptibility to RSV Infection
        Researchers studied the impact of inhaled diesel engine emissions
    in mice, to investigate the potential mechanisms for inhaled pollutants
    in modulating susceptibility to respiratory infection. Prior exposure
    to diesel particulate pollution was shown to increase lung inflammation
    in response to respiratory syncytial virus (RSV), a common respiratory
    pathogen in young children.
        The lungs of the mice were flushed, and inflammatory cells in the
    fluid were found to increase in a dose-dependent manner with the diesel
    exhaust exposure. Changes in the mucous cells increased markedly in the
    diesel exposed mice following RSV infection. Researchers suggest that
    diesel exhaust exposure ``modulates the lung host defense to
    respiratory viral infections and may alter the susceptibility to
    respiratory infections leading to increased lung disease.''
        Harrod, K.S., Jaramillo, R.J., Rosenberger, C.L., Wang, S.-Z.,
    Berger, J.A., McDonald, J.D., and Reed, M.D. Increased Susceptibility
    to RSV Infection by Exposure to Inhaled Diesel Engine Emissions.
    American Journal of Respiratory Cell and Molecular Biology. Vol. 28,
    pp. 451-463, 2003.

    Particle Pollution Worsens Asthma in School-Aged Children
        A large number of epidemiologic studies have found that short-term
    increases in particulate matter levels can trigger lung function
    decrements, use of asthma medications, emergency department visits,
    hospital admissions, and symptoms in people with asthma. A group of
    researchers at the University of Washington sought to investigate the
    severity of asthma symptoms in relationship to air pollution. The
    researchers recruited a panel of 133 children with mild to moderate
    asthma, ages 5 to 13 years old, who were enrolled in a clinical asthma
    management program in Seattle. The children completed daily diary cards
    for an average of 58 days to indicate their medication use and asthma
    severity.
        Researchers found that daily increases PM2.5 and
    PM10 increased the risk of having a more severe asthma
    attack, and increased the use of rescue inhaler medication in the
    children. Specifically, a 10  /m\3\ rise in PM2.5
    concentrations increased the risk of having a more serious asthma
    attack the next day by 20 percent.
        Increases in carbon monoxide were also associated with more severe
    asthma attacks, but researchers believe that this pollutant is a marker
    for exposure to combustion byproducts.
        Slaughter, J.C., Lumley, T., Sheppard, L., Koenig, J.Q. and
    Shapiro, G.G. Effects of Ambient Air Pollution on Symptom Severity and
    Medication Use in Children with Asthma. Ann. Allergy Asthma Immunol.
    Oct. 1, 2003, Vol. 91, No. 4, pp. 346-53.

    Air Pollution Triggers Bronchitis in Children with Asthma
        The Children's Health Study has followed a cohort of children with
    asthma in 12 Southern California communities for over a decade. This
    study explored the role that different components of the air pollution
    mix can have on various symptoms of bronchitis, such as cough,
    congestion, and phlegm, in children with asthma. The study found that
    effects varied in relation to changes in yearly concentrations of air
    pollutants within each community. The authors found associations of
    bronchitic symptoms with yearly changes in PM2.5 and organic
    carbon particles (from gasoline and diesel exhaust), and with gaseous
    nitrogen dioxide and ozone.
        Researchers suggest that previous cross-sectional studies may have
    underestimated air pollution risks and conclude that:

              ``The yearly variability in bronchitic symptoms in
            association with changes in air pollution provides indirect
            evidence that even modest reductions in air pollution could
            result in improved respiratory health in children.''

        McConnell, R., Berhane, K., Gilliland, F., Molitor, J., Thomas, D.,
    Lurmann, F., Avol, E., Gauderman, W.J., and Peters, J.M. Prospective
    Study of Air Pollution and Bronchitic Symptoms in Children with Asthma.
    American Journal of Respiratory and Critical Care Medicine. Vol. 168.
    pp. 790-797, 2003.

    Low Levels of Ozone Increase Respiratory Risk in Asthmatic Kids
        Yale University researchers studied a group of 271 asthmatic
    children under age 12, living in Connecticut and Springfield,
    Massachusetts involved in a prospective study of asthma severity. The
    children's mothers tracked their asthma symptoms such as wheeze,
    persistent cough, chest tightness, and shortness of breath, and their
    medication use, on a daily basis.
        The study published in the Journal of the American Medical
    Association, reported that a 50 ppb increase in 1-hour ozone
    concentrations dramatically increased the likelihood of wheeze (by 35
    percent) and chest tightness (by 47 percent). The study found that
    asthmatic children using maintenance medication were particularly
    vulnerable to ozone even after controlling for co-exposure to fine
    particles, and even at pollution levels below EPA's current air quality
    standards for ozone. The highest levels of ozone on a 1-hour and 8-hour
    average basis were associated with increased shortness of breath and
    rescue medication use. PM2.5 was not significantly
    associated with a worsening of asthma when both ozone and fine
    particles were co-analyzed.
        In an accompanying editorial, Dr. George Thurston and Dr. David
    Bates write that ``air pollution is one of the most under-appreciated
    contributors to asthma exacerbations.''
        Gent, J.F., Triche, E.W., Holford, T.R., Belanger, K., Bracken,
    M.B., Beckett, W.S. and Leaderer, B.P. Association of Low-Level Ozone
    and Fine Particles with Respiratory Symptoms in Children with Asthma.
    Journal of the American Medical Association. Vol. 290, No. 14, pp.
    1859-1867, October 8, 2003.
        Thurston, G.D. and Bates, D.V. Air Pollution as an Underappreciated
    Cause of Asthma Symptoms. Journal of the American Medical Association.
    Vol. 290, No. 14, pp. 1915-1917, October 8, 2003.

    Air Pollution and Asthmatic Symptoms in Panel of Hispanic Children
        Researchers conducted a panel study of 22 Hispanic children aged
    10-16 years old with asthma living in a Los Angeles community with high
    traffic density. Subjects kept daily diaries of their symptoms for 3
    months. Air quality measurements were collected for ozone, nitrogen
    dioxide, sulfur dioxide, carbon monoxide, PM10, as well as
    for the elemental and organic carbon fractions of PM10 and
    for numerous toxic volatile organic compounds. PM2.5 data
    was not available.
        Researchers presented new evidence that particle composition is
    important to adverse respiratory effects. There were positive
    associations reported between asthma symptoms and organic carbon,
    elemental carbon and PM10, but the evidence was stronger for
    organic carbon and elemental carbon in the two-pollutant models.
    Elemental carbon is a marker for diesel emissions. Positive
    associations were also reported for selected volatile organic compounds
    associated with motor vehicles, including benzene, formaldehyde,
    toluene and xylene.
        Delfino, R.J., Gong Jr., H., Linn, W.S., Pellizzari, E.D., and Hu,
    Y. Asthma Symptoms in Hispanic Children and Daily Ambient Exposures to
    Toxic and Criteria Air Pollutants. Environmental Health Perspectives,
    Vol. 111, No. 4, April 2003.

    Poor Children in U.S.-Mexico Border City Suffer Effects of Air
            Pollution
        The Commission for Environmental Cooperation of North America
    commissioned a study of the health impacts of air pollution on the
    children of Ciudad Juarez, Mexico a city where children may be more
    vulnerable because of poor living conditions. The study found
    significant associations between ambient levels of ozone, and
    respiratory-related emergency visits by children, for upper respiratory
    infections and asthma. No association was observed with ambient
    concentrations of PM10.
        Overall, ambient air pollutants were not related to respiratory
    deaths, but when data were stratified by socioeconomic status, an
    increase in respiratory mortality was observed among infants in the
    poorest group.
        Romieu, I., Ramirez Aguilar, M., Moreno Macias, H., Barraza
    Villarreal, A., Hernandez Cadena, L., Carbajal Arroyo, L. Health
    Impacts of Air Pollution on Morbidity and Mortality Among Children of
    Ciudad Juarez, Chihauhua, Mexico. Working Paper prepared for the
    Commission for Environmental Cooperation, November 10, 2003 available
    online at: http://www.cec.org/files/PDF/POLLUTANTS/cdjuarez--en.pdf.

    Urban Air Pollution Damages Children's Lungs
        Children in Mexico City are chronically exposed to a complex
    mixture of air pollutants, including hydrocarbons, ozone concentrations
    well above the NAAQS, and significant concentrations of metal-
    containing PM. Researchers followed 174 children aged 5-17, and
    compared them to 27 control children living in low-polluted areas.
    Researchers assessed several measures of respiratory damage in the
    children, including nasal abnormalities, hyperinflation and
    interstitial markings in the lungs observed by chest X-ray, lung
    function changes, and blood concentrations of proteins that are
    indicative of the health of the immune system.
        Researchers found that the air pollution exposure produces
    significant chest X-ray abnormalities in the exposed children,
    depressed lung function, and an imbalance of blood proteins important
    to immune response. They found that 22 percent of the exposed children
    had grossly abnormal nasal mucosa, which can impair nasal defense
    mechanisms against inhaled gases and particles. The lung damage
    observed is similar to the chronic inflammatory damage observed in an
    earlier study of dogs in Mexico City. Researchers report that the x-ray
    and lung function changes they found in the exposed children could be
    due to pollution-associated chronic bronchiolitis, which could put the
    children at greater risk of developing chronic obstructive airway
    disease later in life.
        They conclude that lifelong exposure to urban air pollution causes
    respiratory damage in children and may predispose them to development
    of chronic lung disease and other problems due to suppression of the
    immune system.
        Calderon-Garciduenas, L., Mora-Tiscareno, A., Fordham, L.A.,
    Valencia-Salazar, G., Chung, C.J., Rodriguez-Alcaraz, A., Paredes, R.,
    Variakojis, D., Villarreal-Calderon, A., Flores-Camacho, L., Antunez-
    Solis, A., Henriquez-Roldan, and Hazucha, M.J. Respiratory Damage in
    Children Exposed to Urban Pollution. Pediatric Pulmonology. Vol. 36,
    No. 2, pp. 148-61, August 2003.

    More Ozone ``Responders'' Among Children and Asthmatics
        Large differences in the sensitivity of individuals to ozone have
    been well documented. Those that are particularly sensitive are known
    as ``responders.'' This study sought to establish the prevalence of
    ``responders'' in four different population subgroups: children,
    asthmatics, the elderly, and athletes, by assessing symptoms and
    measuring respiratory function.
        The study found higher rates of ozone responders in asthmatics (21
    percent) and children (18 percent), as compared to the elderly and
    athletes (both 5 percent). This means that children and asthmatics have
    a higher risk of being ozone sensitive and experiencing more acute lung
    function decrements than other population groups.
        Hoppe, P., Peters, A., Rabe, G., Praml, G., Lindner, J., Jakobi,
    G., Fruhmann, G., and Nowak, D. Environmental Ozone Effects in
    Different Population Subgroups. International Journal of Hygiene and
    Environmental Health. Vol. 206, pp. 505-516, 2003.

                        CARDIOVASCULAR EFFECTS IN ADULTS

    Air Pollution Boosts Stroke Risk
        Higher levels of air pollution increase the risk of hospitalization
    for stroke, especially in warmer weather, according to a study in
    Kaohsiung, Taiwan. Researchers tracked data on multiple air pollutants
    and 23,000 hospital admissions for stroke over a 4-year period in
    Taiwan's second largest city. They compared air pollution levels of the
    dates of admissions with the levels 1 week before and after admission.
    They found that PM10 and nitrogen dioxide were the most
    important pollutants and that their effects were greatest on warmer
    days.
        Another recent study in England and Wales reported that road
    traffic pollution is associated with excess risk of mortality from
    stroke. Researchers reported that stroke deaths were 7 percent higher
    in men living within 200 meters of a main road, compared with men
    living more than 1,000 meters away.
        Tsai, S.-S., Goggins, W.B., Chiu, H.-F., and Yang, C.-Y. Evidence
    for an Association Between Air Pollution and Daily Stroke Admissions in
    Kaohsiung, Taiwan. Stroke. Published online before print October 9,
    2003, doi:10.1161/01.STR.
    0000095564,33543.64
        Maheswaran, R., and Elliott, P. Stroke Mortality Associated with
    Living Near Main Roads in England and Wales, A Geographical Study.
    Stroke. Vol. 34, pp. 2776-2780, 2003.

    Ozone Pollution Sends Elderly to Hospitals in Denver
        A large number of epidemiologic studies from around the world have
    reported an association between various air pollutants and hospital
    admissions for cardiovascular causes. Extremes in weather have also
    been associated with adverse health effects, including mortality.
        This study tracked hospital admissions for cardiovascular diseases
    at all 11 Denver County hospitals during July and August, two extreme
    temperature months, for a 4-year period. The study focused on men and
    women older than 65 years of age.
        Researchers found that ozone increases the risk of hospitalization
    for acute myocardial infarction, coronary atherosclerosis, and
    pulmonary heart disease. Sulfur dioxide was related to increased
    hospital stays for cardiac dysrhythmias, and carbon monoxide was
    significantly associated with congestive heart failure hospitalization.
    No associations were found between particulate matter or nitrogen
    dioxide and hospitalizations. Higher temperatures were an important
    factor in increasing the frequency of hospitalization for acute
    myocardial infarction and congestive heart failure, but were associated
    with a decrease in the frequency of visits for the other heart
    conditions studied.
        Researchers conclude that:

              ``exposures to higher air pollutant concentrations (except
            for particulate matter and NO2), even at levels that
            meet Federal air quality standards, appear to have an effect of
            increasing the number of hospital admissions for cardiovascular
            diseases as a whole.''

        Koken, P.J.M., Piver, W.T., Ye, F., Elixhauser, A., Olsen, L.M.,
    and Portier, C.J. Temperature, Air Pollution, and Hospitalization for
    Cardiovascular Diseases among Elderly People in Denver. Environmental
    Health Perspectives. Vol. 111, No. 10, pp. 1312-1317, August 2003.
            particulates linked to hospital stays for heart attacks
        A study in Rome, Italy, used a ``case-crossover'' design to
    evaluate the relation between daily indicators of air quality and
    hospitalizations for acute myocardial infarctions, or heart attacks.
    Individual data on patients was considered as possible effect
    modifiers. The study period was over 2 years and included over 6,000
    patients.
        The strongest and most consistent positive effects were found for
    total suspended particulates, with positive associations also reported
    for nitrogen dioxide and carbon monoxide.
        The study suggests that traffic-derived air pollutants increase the
    risk of heart attacks, especially during the warm season, among the
    elderly, and in people with heart conduction disturbances.
        D'Ippoliti, D., Forastiere, F., Ancona, C., Agabity, N., Fusco, D.,
    Michelozzi, P., Perucci, C.A. Air Pollution and Myocardial Infarction
    in Rome: A Case-Crossover Analysis. Epidemiology, Vol. 14, No. 5, pp.
    528-535, 2003.

    Air Pollution Particles Lower Heart Rate Variability in Elderly Humans
        Investigations of cardiovascular health effects are being carried
    out to better explain the mechanisms responsible for mortality
    attributable to particulate air pollution. For instance, recent studies
    have reported associations between elevated PM levels and serious
    ventricular arrhythmias and myocardial infarctions.
        Several recent panel studies have investigated heart rate
    variability in relationship to particle air pollution. Heart rate
    variability reflects the autonomic function of the heart. In this
    study, a small panel of healthy elderly volunteers aged 60 to 80, were
    exposed to concentrated particles derived from the ambient air in
    Chapel Hill, North Carolina, and to clean air. Changes in heart rate
    variability were measured before, immediately following, and 24-hours
    after exposure.
        The study found that a 2-hour exposure of healthy elderly subjects
    to moderate levels of particulate pollution--comparable to levels seen
    in many metropolitan areas--resulted in alterations in heart rate
    variability. Lowered heart rate variability has been associated with
    increased risk for developing coronary heart disease and to sudden
    cardiac death.
        These results are in contrast to the findings of the same
    researchers in a similar study of healthy young adults, suggesting that
    elderly people are more responsive to particulate matter pollution.
        Devlin, R.B., Ghio, A.J., Kehrl, H., Sanders, G., and Cascio, W.
    Elderly Humans Exposed to Concentrated Air Pollution Particles Have
    Decreased Heart Rate Variability. The European Respiratory Journal.
    Vol. 21, Suppl. 40, pp. 76s-80's, 2003.

    Fine Particles and Ozone Suppress Heart Rate Variability in Nursing
            Home Residents
        Thirty-four residents of a nursing home in Mexico City underwent 5-
    minute electrocardiograms every other day for a 3-month period. Ambient
    ozone measurements were obtained, as well as indoor and outdoor
    PM2.5 concentrations. After adjusting for age and heart
    rate, investigators observed a decline in heart rate variability in
    association with air pollutants, particularly among those with high
    blood pressure. Reductions in heart rate variability are correlated
    with increased rates of cardiovascular morbidity and mortality in the
    high-risk and general population, but the clinical significance of
    minor, transient changes such as observed in this study are uncertain.
        Holguin, F., Tellez-Rojo, M.M., Hernandez, M., Cortez, M., Chow,
    J.C., Watson, J.G., Mannino, D., and Romieu, I. Air Pollution and Heart
    Rate Variability Among the Elderly in Mexico City. Epidemiology. Vol.
    14, No. 5, pp. 521-527, 2003.
        Mittleman, M.A. and Verrier, R.L. Air Pollution: Small Particles,
    Big Problems? Commentary. Epidemiology. Vol. 14. No. 5. pp. 512-513,
    September 2003.

    Fine Particles and Gaseous Air Pollutants Increase Risk of
            Hospitalization
        This time-series study in Atlanta, Georgia funded by the Electric
    Power Research Institute used data on more than 4 million emergency
    department visits from 331 hospitals, and detailed air quality data on
    criteria air pollutants. For the last 2 years of the study, detailed
    data on several chemical characteristics of PM were available.
        Researchers found evidence for an association between
    hospitalization for cardiovascular disease and PM2.5,
    nitrogen dioxide, carbon monoxide, and components of PM2.5
    including organic carbon, elemental carbon, and oxygenated
    hydrocarbons.
        The effect of ambient pollution on cardiovascular conditions tended
    to be rapid, with the strongest associations observed with pollution
    levels on the same day as emergency department visits.
        Metzger, K.B., Tolbert, P.E., Klein, M., Peel, J.L., Flanders,
    W.D., Todd, K., Mulholland, J.A., Ryan, P. B., and Frumkin, H. Ambient
    Air Pollution and Cardiovascular Emergency Department Visits in
    Atlanta, Georgia, 1993-2000. Epidemiology, Vol. 15, No. 1, pp. 46-56,
    January 2004.

                         RESPIRATORY EFFECTS IN ADULTS

    Living Near a Major Road Exacerbates Respiratory Symptoms in U.S.
            Veterans
        There have been numerous population-based studies investigating the
    health effects of exposure to traffic, many focusing specifically on
    the effects on children, and most undertaken in other countries.
        This study focused on effects in over 5,000 veterans--adult males--
    living in southeastern Massachusetts. Participants completed
    questionnaires on their chronic illnesses and respiratory symptoms, and
    a Geographic Information System was used to estimate the distance of
    their residence from a major road.
        The results of this study point to increased risk for persistent
    wheeze and possibly chronic phlegm for people living within 50 meters
    of heavily trafficked roads. The authors conclude that ``exposure to
    vehicular emissions by living near busy roadways might contribute to
    symptoms of chronic respiratory disease in adults.''
        Garshick, E., Laden, F., Hart, J.E., and Caron, A. Residence Near a
    Major Road and Respiratory Symptoms in U.S. Veterans. Epidemiology.
    Vol. 14. No. 6, pp. 728-736.

    Hospitalizations and Emergency Room Visits Increase Following High
            Particulate Matter Episodes
        A study of half a million Kaiser Permanente members living in the
    San Joaquin Valley of California has reported that following wintertime
    episodes of high PM2.5 and PM10 concentrations,
    and to a lesser extent carbon monoxide and nitrogen oxides, hospital
    admission rates and emergency room visits increased for patients who
    suffer from acute respiratory ailments such as asthma and bronchitis.
    Admissions for chronic respiratory ailments such as emphysema were
    similarly elevated, particularly during the winter. The study followed
    patients over a 4-year period. Effects estimates were consistently
    greater for PM2.5 than for PM10. Investigators
    did not find convincing evidence of associations with coarse particles
    or with ozone.
        Van Den Eeden, S.K., Quesenberry, C.P., Jr., Shan, J., and Lurmann,
    F. Particulate Air Pollution and Morbidity in the California Central
    Valley: A High Particulate Pollution Region. Final Report to the
    California Air Resources Board, Contract 97-303, July 12, 2002.
    Available at: ftp://ftp.arb.ca.gov/carbis/research/apr/past/97-303.pdf.

    Fine Particles Induce Symptoms in Elderly Heart Patients
        This is the first study in recent years to explore the relationship
    between cardiovascular symptoms and air pollution. Researchers followed
    a panel of non-smoking elderly subjects with coronary heart disease in
    three cities during the winter of 1998-1999: Amsterdam, the
    Netherlands; Erfurt, Germany; and Helsinki, Finland. Participants
    recorded occurrence of selected cardiovascular and respiratory symptoms
    in a daily diary. Air quality measurements were made for
    PM10, PM2.5, ultrafine particles, nitrogen oxide,
    carbon monoxide, sulfur dioxide and ozone. Information on potential
    confounding factors such as weather variables and influenza data was
    also collected.
        Researchers reported consistent positive associations of PM2.5
    with shortness of breath and phlegm, and weak positive associations
    between PM2.5 and being awakened by breathing problems and
    avoidance of activities. Associations were more consistent with
    PM2.5 than with other pollutants, including ultrafine
    particles. There was no association between chest pain and air
    pollution.
        de Hartog, J.J., Hoek, G., Peters, A., Timonen, K.L., Ibald-Mulli,
    A., Brunekreef, B., Heinrich, J., Tittanen, P., van Wijnen, J.H.,
    Kreyling, W., Kulmala, M., and Pekkanen, J. Effects of Fine and
    Ultrafine Particles on Cardiorespiratory Symptoms in Elderly Subjects
    with Coronary Heart Disease. American Journal of Epidemiology. Vol.
    157, No. 7, pp. 613-623, 2003.

    Ozone Exacerbates Symptoms in COPD Patients
        Thirty-nine senior adults with severe chronic obstructive pulmonary
    disease (COPD) were followed by their physicians in Paris, France,
    during a 14-month period. Daily levels of PM10, ozone,
    sulfur dioxide and nitrogen dioxide were monitored.
        No evidence of symptom exacerbation and PM10,
    SO2, or NO2 was observed. However, the 8-hour
    average ozone concentration was associated with exacerbation of COPD
    symptoms.
        According to the researchers,

              ``our results are consistent with those of toxicological
            studies that have shown the inflammatory mechanisms of
            O3. The recruitment of inflammatory cells into the
            lung presents a risk of tissue damage through the release of
            toxic mediators by activated inflammatory cells. Perhaps this
            phenomenon would be more serious among patients suffering from
            COPD, in whom a pre-existent inflammation of the small or large
            airways would be constant.''

        Desqueyroux, H., Pujet, J.C., Prosper, M., Le Moullec, Y., Momas,
    I. Effects of Air Pollution on Adults With Chronic Obstructive
    Pulmonary Disease. Archives of Environmental Health, Vol. 57, No. 6,
    pp. 554-560, Nov.-Dec. 2002.
    Autopsies Show Evidence of Particle Damage to Small Airways
        Researchers evaluated a series of autopsied lungs from Mexico City,
    a city with high PM levels, and compared them by formal grading
    analysis to lungs from Vancouver, a region of generally low air
    pollution. The small airways in the Mexico City lungs showed markedly
    higher levels of fibrous tissue and muscle, and microscopic evidence of
    particle accumulation in the respiratory bronchioles. The study
    demonstrates that particle pollution penetrates into and is retained in
    the walls of the small airways. The type of airway wall remodeling
    found here is the same as that associated with chronic airflow
    obstruction in cigarette smokers and in asthmatics, and may have a
    similar effect in those exposed to PM.
        A related laboratory study has demonstrated that air pollution
    particles produce airway wall remodeling in rat tracheal tissue
    maintained in culture. Researchers exposed the tissue to two types of
    particles--Ottawa urban air particles, and diesel exhaust particles.
    The study found that exposure to these particles can induce expression
    of genes involved in fibrogenesis and airway wall fibrosis, suggesting
    an explanation for the fibrosis and increased muscle observed in human
    airways subject to chronic exposure to high levels of PM.
        Researchers conclude that ``PM-induced airway wall remodeling may
    play an important role in producing airflow obstruction in individuals
    living in high PM regions.''
        Churg, A. Brauer, M., Avila-Casado, M.d.C., Fortoul, T.I., and
    Wright, J.L. Chronic Exposure to High Levels of Particulate Air
    Pollution and Small Airway Remodeling. Environmental Health
    Perspectives. Vol. 111, No. 5, pp. 714-718, May 2003.
        Dai, J., Xie, C., Vincent, R., and Churg, A. Air Pollution
    Particles Produce Airway Wall Remodeling in Rat Tracheal Explants.
    American Journal of Respiratory Cell Molecular Biology. Vol. 29, pp.
    352-358, 2003.

    SARS Deaths Higher in More Polluted Regions
        High levels of air pollution may increase the risk of dying from
    SARS--severe acute respiratory syndrome. A study in China found that
    patients with SARS who were living in areas with high air pollution
    were more than twice as likely to die from the illness than those
    living in cleaner areas.
        Researchers developed an air pollution index from data on ambient
    concentrations on ozone, particulate matter, sulfur dioxide, nitrogen
    dioxide and carbon monoxide, to compare with data on SARS illnesses and
    fatalities. There have been over 5,000 cases of SARS reported in China
    since November 2002, with 349 fatalities.
        The study authors suggest that air pollution might compromise lung
    function, predisposing SARS patients to illness and death.
        Cui, Y., Zhang, Z.-F., Froines, J., Zhao, J., Want, H., Yu, S.-Z.,
    and Detels, R. Air Pollution and Case Fatality of SARS in the People's
    Republic of China: An Ecologic Study. Environmental Health: A Global
    Access Science Source. Vol. 2, No. 15, November 20, 2003. Available
    online at: http://www.ehjournal.net/content/pdf/1476-069X-2-15.pdf.

    Prior Exposure to Fuel Oil Combustion Particulates Enhances Allergic
            Response
        Experimental studies have shown that diesel exhaust and gaseous
    pollutants may enhance the allergic response.
        In this human experimental study, researchers sought to determine
    whether pre-exposure to combustion particles would enhance the response
    to subsequent exposure to pollen. The combustion particles used in the
    study were residual oil fly ash from a Boston power plant. Nasal cells
    were examined following exposure for evidence of inflammation and
    allergic response.
        Researchers reported evidence of a greater than additive
    interaction between particulate exposure and allergen challenge.
    Specifically, they found an increase in certain inflammatory cells and
    cytokines that are measures of irritant or allergic response, relative
    to subjects pre-exposed to clean air.
        Hauser, R., Rice, T.M., Krishna Murthy, G.G., Wand, M. P., Lewis,
    D., Bledsoe, T., and Paulauskis, J. The Upper Airway Response to Pollen
    is Enhanced by Exposure to Combustion Particulates: A Pilot Human
    Experimental Challenge Study. Environmental Health Perspectives, Vol.
    111, No. 4, pp. 472-477, April 2003.

    Diesel Exhaust Emissions Causes Chronic Damage to Nasal Mucous Membrane
        Diesel exhaust contains numerous toxic substances such as sulfur
    dioxide, acrolein, formaldehyde, metals, and particulate matter. Many
    of these combustion byproducts are known to be genotoxic, cytotoxic,
    fibrogenic, and carcinogenic. Uncontrolled diesel emissions from heavy
    equipment constitute a major public health concern.
        Researchers in Switzerland studied some 200 male, non-smoking
    customs officers over a 5-year period. Some of the officers were
    engaged in the clearing of diesel trucks over 8 hours per day during
    the workweek, while the control group worked in the office. Researchers
    measured concentrations of diesel exhaust in the ambient air and
    collected nasal swabs from the workers during the summer and winter.
        In humans, the nose is the initial site of injury by inhaled
    irritants, and it is a common site for particle deposition and for the
    absorption of potentially toxic gases.
        Researchers found increased abnormalities in the nasal skin cells
    and an increase in white blood cells, in the workers chronically
    exposed to diesel exhaust. They describe the changes as a chronic
    inflammation of the nasal mucous membrane. In addition, researchers
    report that the cell changes may be indicative of a genotoxic effect
    (capable of causing damage to DNA) of chronic diesel exposures in
    humans.
        Gluck, U., Schutz, R., Gebbers, J.-O. Cytopatholo of the Nasal
    Mucosa in Chronic Exposure to Diesel Engine Emission: A Five-Year
    Survey of Swiss Customs Officers. Environmental Health Perspectives,
    Vol. 111, No. 7, pp. 925-929, June 2003.

              LONG- AND SHORT-TERM STUDIES OF PREMATURE MORTALITY

    Soot's Impact on Heart Comparable to Risk for Former Smokers
        In a followup analysis to the American Cancer Society cohort study,
    researchers have reported a striking link between chronic exposure to
    fine particle air pollution and increased risk of death from
    cardiovascular disease in the United States. The increased risk was
    comparable to that associated with being a former smoker. The new
    analysis is based on data collected by the American Cancer Society on
    the cause of death of 500,000 adults over a 16-year period, and on data
    on air pollution levels in cities nationwide. Data on other risk
    factors such as body mass, smoking, occupational exposures, and diet
    were also considered.
        The study identifies a strong link between particulate air
    pollution and ischemic heart disease (which causes heart attacks), and
    also a link between pollution and irregular heart rhythms, heart
    failure, and cardiac arrest. It also suggests general biological
    pathways through which pollution might cause these diseases that lead
    to death--increased inflammation and nervous system aberrations that
    change heart rhythm. Mortality attributable to respiratory disease had
    relatively weak associations in this study.
        Researchers conclude that:

              ``the results of this analysis are largely consistent with
            the proposition that. the general pathophysiological pathways
            that link long-term PM exposure and cardiopulmonary mortality
            risk include pulmonary and systemic inflammation, accelerated
            atherosclerosis, and altered cardiac autonomic function.''

        Pope, C.A. III, Burnett, R.T., Thurston, G.D., Thun, M.J., Calle,
    E.E., Krewski, D., and Godleski, J.J. Cardiovascular Mortality and
    Long-Term Exposure to Particulate Air Pollution: Epidemiological
    Evidence of General Pathophysiological Pathways of Disease.
    Circulation. Vol. 109, pp. 71-77, 2004. Published online before print
    at: http://www.circulationaha.org, DOI: 10.1161 /
    01.CIR.0000108927.80044.7F.

    Short-Term Studies Underestimate Premature Deaths
        The APHEA-2 project was a major study of the health effects of air
    pollution in 30 cities across Europe and in adjacent countries. That
    and many other studies have reported that short-term changes in
    PM10 lead to short-term fluctuations in sickness and death.
    This study uses a statistical model--known as the distributed lag
    model--to explore whether those deaths are advanced by just a few days
    or a few weeks, or more.
        The researchers found that the adverse effects of short-term
    increases in air pollution persist for more than a month after
    exposure. They estimate that the size of the effect of exposure to
    PM10 doubles for cardiovascular deaths when looking at
    effects 40 days after exposure, and increases five-fold for respiratory
    deaths. These results are consistent with higher risk estimates found
    in cohort studies such as the Harvard Six Cities Study, and strongly
    suggest that estimates of the effects of short-term exposures to air
    pollution seriously underestimate the impact of particle exposure.
        Researchers conclude that:

              ``risk assessment based on the short-term associations likely
            underestimate the number of early deaths that are advanced by a
            significant amount, and that estimates based on the cohort
            studies, or studies such as this one, would more accurately
            assess the public health impact.''

        Another research group took a different approach to evaluate the
    extent of life-shortening implied by short-term estimates of
    particulate air pollution on mortality. They sought to establish a
    separate relative rate of mortality for different time scales. They
    applied this method of a database on particulate air pollution, daily
    mortality, and weather in four cities: Pittsburgh, Minneapolis,
    Seattle, and Chicago.
        The authors found that the mortality rates during periods from 14
    days to 2 months after exposure were larger than the rates from 1 to 4
    days after the exposure. This refutes the ``harvesting hypothesis'':
    that is the argument that any increase in mortality associated with
    increased particle concentrations stems entirely from the death of very
    frail persons who die a few days early. If ``harvesting'' were the
    case, the rate of mortality would not continue to be higher for these
    extended periods of time.
        Zanobetti, A., Schwartz, J., Samoli, E., Gryparis, A., Tuoloumi,
    G., Peacock, J., Anderson, R.H., Le Tertre, A., Bobros, J., Celko, M.,
    Goren, A., Forsberg B., Michelozzi, P., Rabczenko, D., Perez Hoyos, S.,
    Wichmann, H.E., and Katsouyanni, K. The Temporal Pattern of Respiratory
    and Heart Disease Mortality in Response to Air Pollution. Environmental
    Health Perspectives. Vol. 111, No. 9, pp. 1188-1193, July 2003.
        Dominici, F., McDermott, A., Zeger, S.L., and Samet, J.M. Airborne
    Particulate Matter and Mortality: Timescale Effects in Four US Cities.
    American Journal of Epidemiology. Vol. 157, No. 12, pp. 1055-1065, June
    15, 2003.

    Dutch Study Confirms that Long-Term Exposures to Particulate Matter are
            Deadly
        This long-term cohort study confirms the findings of the Harvard
    Six Cities Study and the study of the American Cancer Society Cohort
    that found an association between chronic exposure to particulate air
    pollution and shortened life expectancy.
        Investigators assessed the association between long-term exposure
    to traffic-
    related air pollution and cause-specific mortality in a cohort of 4,500
    elderly people, participants in the ongoing Netherlands Cohort study on
    Diet and Cancer. People who lived near major roads had a 95 percent
    greater risk of dying early from cardiopulmonary causes than people
    living in cleaner air areas.
        Hoek, G., Brunekreef, B., Goldbohm, S., Fischer, P., and van den
    Brandt, P. A. Association Between Mortality and Indicators of Traffic-
    Related Air Pollution in the Netherlands: A Cohort Study. The Lancet.
    Vol. 360, pp. 1203-1209, October 19, 2002.

                              INTERVENTION STUDIES

    Control of PM Substantially Diminishes Daily Deaths
        Air quality in Dublin, Ireland deteriorated in the 1980's after a
    switch from oil to bituminous coal for domestic heating. In 1990, the
    Irish Government banned the marketing and sale of bituminous coals
    within the city of Dublin. A dramatic improvement in air quality
    ensued. This study investigates the effect of a ban on coal sales.
        Concentrations of air pollution, measured as ``black smoke'' and
    death rates were compared for 72 months before and after the ban. The
    analysis was adjusted to reflect age, weather, respiratory epidemics,
    and other factors. Respiratory and cardiovascular death rates fell
    markedly following the ban on soft coal.
        The authors conclude:

              ``Our findings suggest that control of particulate air
            pollution in Dublin led to an immediate reduction in
            cardiovascular and respiratory deaths. These data lend support
            to a relation between cause and the reported increase in acute
            mortality associated with daily particulate air pollution.
            Moreover, our data suggest time-series studies could be
            underestimating the benefits of particulate air pollution
            controls.''

        A followup study presented an analysis of the medium term (weeks to
    months) exposure effects of particulate pollution, measured as ``black
    smoke'' and temperature, over a period of 17 years in Dublin.
    Investigators found that the effects of particulate air pollution are
    strongest on the day of and the few days following exposure, but extend
    out over 40 days following exposure. This was especially noticeable for
    respiratory causes of death. ``These extended followup effects were two
    to three times greater than the acute effects reported in other
    studies, and approach the effects reported in longer term survival
    studies. This analysis suggests that the studies on the acute effects
    of air pollution have underestimated the total effects of temperature
    and particulate air pollution on mortality,'' report the investigators.
        Clancy, L., Goodman, P., Sinclair, H., and Dockery, D.W. Effect of
    Air-Pollution Control on Death Rates in Dublin, Ireland: An
    Intervention Study. The Lancet. Vol. 360, pp. 1210-14, October 19,
    2002.
        Goodman, P.G., Dockery, D.W., and Clancy, L. Cause Specific
    Mortality and the Extended Effects of Particulate Pollution and
    Temperature Exposure. Environmental Health Persepctives, In Press.
    Available online November 12, 2003, doi 1289/ehp.6451, available at
    http://dx.doi.org/.

    Improvement in Air Quality Benefits Children's Health
        Following German reunification in 1990, there was a tremendous
    decline in combustion-derived emissions of sulfur dioxide and total
    suspended particulate (TSP) in Eastern Germany. This provided a unique
    opportunity to study trends in the prevalence of respiratory illness
    along with the improvement in air quality.
        This review focused on the results of two repeated surveys of
    nonallergic respiratory disease of children living in East Germany. The
    surveys found that declines in chronic bronchitis were associated with
    the decline in TSP.
        Another study of three communities in East Germany measured lung
    function in 2,500 children. Lung function increased as TSP and sulfur
    dioxide pollution declined. Researchers concluded that ``a reduction of
    air pollution in a short time period may improve children's lung
    function.''
        Heinrich, J. Nonallergic Respiratory Morbidity Improved Along With
    a Decline of Traditional Air Pollution Levels: A Review. European
    Respiratory Journal. Vol. 21, Suppl. 40, pp. 1s-6s, 2003.
        Frye, C., Hoelscher, B., Cyrys, J., Wjst, M., Wichmann, H.-E., and
    Heinrich, J. Association of Lung Function Declining Ambient Air
    Pollution. Environmental Health Perspectives. Vol. 111, No. 3, pp. 383-
    387, March 2003.

    Reductions in Pollution Particles Linked to Reductions in Infant
            Mortality
        Economists at the University of Chicago and the University of
    California, Berkeley have reported new evidence of an association
    between particles in the air, and infant health. They examined the
    sharp reduction in manufacturing, and in turn, reductions in
    particulate air pollution (measured as Total Suspended Particulates
    (TSP)) during the 1981-1982 recession, in relation to county-specific
    data on infant deaths.
        In Chicago, for instance, researchers estimated that the decline in
    air pollution lowered the infant mortality rate by 5 percent between
    1980 and 1982.
        Their research suggests that 2,500 fewer infants died during this
    period than would have, absent the reductions in air pollution. The
    majority of the infant deaths occurred within 1 month of birth,
    suggesting a possible impact of air pollution on fetal development.
        Another study by these same researchers examined the relationship
    between implementation of the 1970 Clean Air Act Amendments and infant
    mortality. They documented sharp reductions in TSP pollution between
    1971 and 1972, when the Clean Air Act took effect, and a corresponding
    reduction in infant death rates.
        Chay, K.Y., and Greenstone, M. The Impact of Air Pollution on
    Infant Mortality: Evidence From Geographic Variation in Pollution
    Shocks Induced by a Recession. Quarterly Journal of Economics. Vol.
    CXVIII, pp. 279-300, August 2003. (Available online at: http://
    wwwnews.uchicago.edu/releases/03/particles/chay-greenstone.pdf.)
        Chay, K.Y., and Greenstone, M. Air Quality, Infant Mortality, and
    the Clean Air Act of 1970. National Bureau of Economic Research,
    Working Paper No. w10053, October 2003. (Available online at: http://
    www.nber.orig/cgi-bin/author papers.pl?author=kenneth+chay).

                                 MISCELLANEOUS

    Air Pollution Hits Poor People the Hardest
        This study investigated mortality in relation to neighborhood
    levels of income and air pollution in a cohort of 5,000 people who had
    been referred for pulmonary function testing in the urban area of
    Hamilton-Burlington in southern Ontario. Income was estimated using
    census data, and average neighborhood levels of total suspended
    particulates and sulfur dioxide were estimated by interpolating data
    from the monitoring network.
        Mean pollution levels tended to be higher in the lower-income
    neighborhoods, and these neighborhoods also had higher mortality rates.
    While biologic risk factors were not controlled for, investigators
    reported that ``two of the broader determinants of health--income and
    air pollution levels--were important correlates of mortality in this
    population.''
        Finkelstein, M.M., Jerrett, M., DeLuca, P., Finkelstein, N., Verma,
    D.K., Chapman, K., and Sears, M.R. Relation between Income, Air
    Pollution and Mortality: A Cohort Study. Canadian Medical Association
    Journal, Vol. 169, No. 5, September 2, 2003.

    PM Research Centers Report Progress
        In 1988, Congress directed the U.S. EPA to substantially increase
    its level of funding on PM health effects research. It also mandated
    that a National Research Council (NRC) committee be established to
    provide scientific oversight for PM research. In its first report, the
    NRC Committee on Research Priorities for Airborne Particulate Matter
    recommended the establishment of interdisciplinary research centers to
    be funded on a multi-year basis to foster comprehensive and integrated
    research on particle health effects. In a competitive process, EPA
    awarded grants to five centers: A California consortium headquartered
    at the University of California Los Angeles, Harvard University, New
    York University, the University of Rochester, and the University of
    Washington.
        This review article reports on the substantial accomplishments of
    the PM centers in their first two and a half years of operation, and
    lays out short- and longer-term research goals. Six topics are
    discussed: biological mechanisms, acute effects, chronic effects,
    dosimetry, and exposure assessment.
        Lippmann, M., Frampton, M., Schwartz, J., Dockery, D., Schlesinger
    R., Koutrakis, P., Froines, J., Nel, A., Finkelstein, J., Godleski, J.,
    Kaufman, J., Koenig, J., Larson, T., Luchtel, D., Liu, L-J., S.,
    Oberdorster, G., Peters, A., Sarnat, J., Sioutas, S., Suh, H.,
    Sullivan, J., Utell, M., Wichmann, E., and Zelikoff, J. The U.S.
    Environmental Protection Agency Particulate Matter Health Effects
    Research Centers Program: A Midcourse Report of Status, Progress and
    Plans. Environmental Health Perspectives. Vol. 111, No. 8, pp. 1074-
    1092, June 2003.

    Autopsy Evidence Points to Diesel's Role in 1952 London Smog Episode
        Researchers obtained archived lung tissue from autopsies of 16
    victims of the London smog disaster over 50 years ago. This provided a
    unique opportunity to examine the form and composition of the
    particulate matter found in the lungs of those known to have died from
    exposure to the smog. Pathologists examined samples from different
    compartments of the lungs: for instance the airway, airspace,
    interstituim, and lymph node. This allowed researchers to see what
    people had been exposed to just before their deaths and over the longer
    term.
        The study found high volumes of ultrafine carbon particles and
    various metals including lead. But most significant was the evidence of
    particles associated with diesel fuel, given that London had made a
    switch from electric trams to diesel buses early in 1952.
        Hunt, A., Abraham, J.L., Judson, B., and Berry, C.L. Toxicologic
    and Epidemiologic Clues from the Characterization of the 1952 London
    Smog Fine Particulate Matter in Archival Autopsy Lung Tissues.
    Environmental Health Perspectives. Vol. 111, No. 9, pp. 1209-1214, July
    2003.
                                   __________
      Statement of Robert Stec, Chairman and CEO, Lexington Home Brands,
       Lexington, NC, on Behalf of the American Furniture Manufacturers
                               Association (AFMA)

        Chairman Inhofe and members of the committee, I am Robert Stec,
    Chairman and CEO of Lexington Home Brands of Lexington, North Carolina.
    I appreciate the committee's interest in the potential impact that
    Clean Air non-attainment designations would have on furniture
    manufacturing facilities like ours.
        Lexington started out as Dixie Furniture Company, organized in 1901
    by a group of Lexington, North Carolina, business leaders to capitalize
    on the region's abundant natural resources and skilled labor force. The
    company produced its first oak bedroom group on the site where our
    largest plant is still located today in downtown Lexington, NC.
        As sales increased, the new company expanded throughout downtown
    Lexington, buying adjacent factory buildings, renovating them, and
    erecting new ones, until it eventually occupied nine city blocks and 31
    acres of land. Additional expansion stretches west along Interstate 40
    from the town of Lexington to Hildebran, North Carolina, some 75 miles.
    Such a grouping of facilities, typical of furniture manufacturing,
    magnifies the potential adverse impact of county-by-county non-
    attainment designation.
        As a full-line furniture manufacturer, we produce bedroom, dining,
    casual dining, occasional, home entertainment, home office, youth,
    upholstered, leather, and wicker furniture for domestic and
    international customers. Local production is augmented with imported
    product and components manufactured to Lexington specifications in the
    Far East, Central America, and Europe. Over 2000 associates
    manufacture, service, distribute, and sell Lexington products.
    Lexington pioneered lifestyle furniture brands with the introduction of
    the Bob Timberlake collection in 1990, the world's all-time, best-
    selling furniture brand.
        While the furniture industry is a small contributor to air
    emissions compared to most manufacturers, two types of emissions are
    characteristic. These include evaporative volatile organic compounds
    (VOCs) released during the staining and finishing process, as well as
    NOx emissions from the combustion of fuels used to provide steam for
    plant heat and finishing operations.
        The industry is dramatically reducing emissions pursuant to a
    cooperative rulemaking under the Clean Air Act. Changes in our
    manufacturing process, combined with redesigned paints, coatings, glues
    and application equipment has so far yielded a 73 percent reduction in
    emissions, substantially more than regulators and environmental
    interests originally sought. Then-EPA Administrator Carol Browner
    called this achievement ``a credit to industry-environmental-government
    cooperation.''
        Lexington Home Brands takes a proactive approach concerning
    environmental issues. One initiative geared to exceeding regulatory
    compliance obligations is our partnership with the North Carolina
    Department of Environment and Natural Resources in their Environmental
    Stewardship Initiative. This voluntary program uses pollution
    prevention and other approaches to exceed regulatory compliance.
        Lexington was also the first company to implement the American
    Furniture Manufacturers Association's environmental management system
    (EMS) on a company wide basis. The system, know as Enhancing
    Furniture's Environmental Culture (EFEC), has allowed Lexington Home
    Brands to review and improve operations for better environmental
    performance. Environmental targets have been established to facilitate
    the integration of environmental management with business management
    processes. These goals include reducing air emissions, reducing the
    amount of waste generated and increasing recycling efforts.
        Our success and the success of many other North Carolina employers
    could be threatened by an upcoming decision by U.S. EPA regarding ozone
    non-attainment. As you may be aware, the counties of the Triad region
    have entered into an agreement with EPA to develop strategies to reduce
    emissions of the ozone precursors NOx and VOC. Data, including modeling
    done by the State of North Carolina, clearly indicates that NOx
    emissions from mobile sources are the major precursor to ozone
    formation in the region.
        Consequently, the Early Action Compact (EAC) has focused on
    transportation NOx as the central mechanism to achieve ozone attainment
    by 2007. Subject to EPA approval, the compact would move the timetable
    for non-attainment designation to 2007 in order to provide an
    opportunity for these strategies to be implemented effectively. EPA
    will release their non-attainment boundaries April 15, 2004 and the EAC
    stakeholders are hopeful that the non-attainment designation will be
    scheduled to coincide with the 2007 timetable.
        If EPA instead decides to set the non-attainment boundaries this
    April, manufacturing facilities located in those areas will be required
    to reduce NOx and VOC emissions on a very short timeline. Local
    business leaders are convinced that severity of permit restrictions
    prescribed in both the NSR and PSD requirements would effectively put
    an end to plans for facility expansion, and could force companies to
    evaluate the possibilities of relocation or outsourcing. This is
    clearly not the sort of outcome for the manufacturing sector that the
    American people and their elected representatives are demanding.
        If the Triad area of North Carolina is designated as non-
    attainment, furniture plants would have to evaluate their total VOG
    emissions and determine the ``amount of reduction required'' based on
    the non-attainment designation and determine the type of controls
    necessary to achieve this reduction. Add-on control options would
    include catalytic oxidation, thermal oxidation, carbon absorption, the
    conversion of the current finishing system to water base coatings or a
    combination of water-based coatings coupled with one or the previously
    mentioned controls. These options would prove very costly and
    disruptive to our business plan.
        One AFMA member company is using catalytic oxidation to control
    VOC/HAP emissions and employees this technology to capture the entire
    finishing exhaust air stream with an installed cost of $450,000. A
    typical carbon absorption system capable of handling large make-up air
    streams could cost in excess of $500,000 with an annual operations and
    maintenance cost in excess of $50,000.
        The capital costs associated with transition to water-based coating
    are also significant, since most of the existing lines, pumps, bulk
    storage, day mixing tanks, regulators and spray guns must be replaced.
    Further, water-based coatings, while suitable for some applications,
    are not commercially viable for much of our product line. They tend to
    exhibit less sheen and mar resistance than conventional coatings.
    Water-based coatings can also react with the wood, causing grain
    raising, splitting and other quality control problems.
        Mr. Chairman, it is no secret that the last few years have been the
    most challenging in the history of the U.S. furniture industry.
    According to the Bureau of Labor Statistics, since September 2000, more
    than 98,000 furniture manufacturing employees have lost their jobs.
    Domestic plants are competing with a tidal wave of imports from low-
    wage nations of the Pacific Rim. The driving force is China, where the
    combination of two-dollar-a-day labor, and lower environmental and
    workplace health and safety standards has made that country the
    dominant producer of wood furniture in the world. None of us would
    trade our standard of living, including environmental safeguards, for
    those of developing nations like China. The realities of global
    competition do, however, compel us to design our regulatory systems in
    the most cost-effective ways, always sensitive to the preservation of
    jobs.
        On behalf of the employees of Lexington Home Brands and other
    members of the American Furniture Manufacturers Association, I
    recommend that the Committee urge EPA to respect the terms and
    timetable of the compacts. Adhering to the compacts will maintain the
    proper focus on transportation NOx as the primary mechanism for ozone
    control. It will help preserve the role for cost-effective state
    implementation of criteria pollutant standards envisioned by the Clean
    Air Act. And, significantly, it will help protect the competitiveness
    of furniture manufacturing facilities in North Carolina and across the
    Nation.
                                   __________
    Statement of Michael E. Baroody, Executive Vice President, on Behalf of
                   the National Association of Manufacturers

        On behalf of the National Association of Manufacturers (NAM), I
    would like to thank the Subcommittee on Clean Air, Climate Change and
    Nuclear Safety for conducting an oversight hearing on implementation of
    the National Ambient Air Quality Standards (NAAQS) for particulate
    matter (PM) and ozone. As you know, air quality has improved
    dramatically over the past 33 years as hundreds of communities have
    complied with current rules. However, new standards for ozone and fine
    particulate matter (PM2.5) will put hundreds of additional
    communities into non-compliance with the Clean Air Act. In order to
    reduce production costs and improve the condition of U.S. manufacturing
    and its millions of workers, Congress must ensure that implementation
    of the NAAQS does not drive up the cost or reduce supplies of natural
    gas, transportation fuels or electricity, discourage businesses from
    investing in non-attainment communities or otherwise negatively affect
    the economy.
        The NAM is the nation's largest industrial trade association. The
    NAM represents 14,000 members (including 10,000 small- and mid-sized
    companies) and 350 member associations serving manufacturers and
    employees in every industrial sector and all 50 states. The NAM's
    mission is to enhance the competitiveness of manufacturers and to
    improve American living standards by shaping a legislative and
    regulatory environment conducive to U.S. economic growth and to
    increase understanding among policymakers, the media and the public
    about the importance of manufacturing to America's economic strength.
    Accordingly, the NAM has a vested interest in the implementation of air
    quality standards in a cost-effective manner that does not interfere
    with affordable and reliable energy for American manufacturers,
    consumers and others.
        Manufacturing is on the front line in the unprecedented competition
    we are seeing in the world marketplace. More and more frequently,
    domestic manufacturers cannot pass through increased operation costs,
    making it more difficult to stay competitive in the United States or
    sell products in export markets. Our analysis shows that weak exports,
    coupled with low capital investments, have been prolonging the anemic
    recovery in the manufacturing sector. The economic situation in the
    manufacturing sector is serious, as shown by 43 consecutive months of
    employment decline that has totaled 3 million lost jobs.
        External overhead costs from taxes, health and pension benefits,
    tort litigation, regulation and rising energy prices add approximately
    22 percent to U.S. manufacturers' unit labor costs (nearly $5 per hour
    worked) relative to their major foreign competitors. A NAM study
    comparing costs faced by manufacturers in the U.S. and its nine leading
    trading partners shows that, contrary to much national and
    international political rhetoric, United States spending for pollution
    abatement is higher than that of other countries purporting to be more
    conscientious about the environment. As a percentage of output,
    American manufacturers spend considerably more on pollution abatement
    than do their competitors in Germany, Japan, France, the U.K., Canada,
    Mexico, China, South Korea and Taiwan. Manufacturers even spend more on
    the environment as a percentage of overall GDP. In light of global
    deflationary pressures that prevent American manufacturers from raising
    the prices of their products, it becomes increasingly clear that
    Congress must do more to help us remain competitive. With ozone non-
    attainment area designations slated to be finalized this month, we must
    take this opportunity to urge adoption of a common-sense and reasonable
    NAAQS implementation approach.
        In 1997, the Environmental Protection Agency (EPA) issued new NAAQS
    governing ozone and PM2.5. On February 27, 2001, the U.S.
    Supreme Court upheld the EPA's ability to set air quality standards,
    without consideration of costs, but ruled that the agency's
    implementation of the ozone standard was unlawful. The issue was sent
    back to the EPA to develop a reasonable ozone implementation strategy.
    The EPA appears to be ready to finalize its ozone implementation rule
    at the same time that it makes final designations of ozone non-
    attainment areas on April 15, 2004. Last year, the EPA proposed an
    ozone implementation rule intended to provide flexibility to states and
    tribal governments as they address their unique air quality problems.
    In summer 2004, the EPA plans to propose its PM2.5
    implementation strategy, with a deadline to follow in December 2004, to
    designate areas in and out of attainment with the PM2.5
    standards. However, the new ozone and PM2.5 standards may be
    difficult, or in some cases impossible, to meet without shutting down
    new development altogether and perhaps curtailing some existing
    economic activity.
        Hundreds of counties nationwide are expected to be designated as
    non-attainment for the new 8-hour ozone standard. A designation of
    ``non-attainment'' will create a black mark on communities in those
    areas. A non-attainment designation will substantially reduce business
    opportunities, investments and competitiveness in a particular area.
    Once an area is designated to be out of compliance with air quality
    standards, businesses already located in those areas face additional
    and more expensive pollution control requirements. Manufacturers and
    small businesses will need to carefully analyze how much the additional
    costs, increased permitting and reporting requirements and higher fines
    for potential violations will affect their ability to operate in the
    newly designated area. Meanwhile, companies seeking to locate or expand
    will see these factors as a disincentive to invest in non-attainment
    areas. Cost estimates to comply with the PM2.5 and 8-hour
    ozone standards range from $48 billion to hundreds of billions of
    dollars.
        From an energy security standpoint, implementation of the NAAQS
    must be consistent with the need for reliable and affordable electric
    power. Energy prices have been identified by the NAM as one of the
    significant competitive disadvantages facing U.S. manufacturers in the
    world marketplace. During the late 1990's, the historic surplus of
    natural gas disappeared due to a growing economy, governmental access
    restrictions to large gas deposits onshore and offshore and clean air
    regulations that encouraged electric generators to build almost all new
    capacity to use natural gas. By 2000, spot market prices soared and the
    average annual prices for gas have continued to be more than double the
    average natural gas prices of the 1990's. The manufacturing sector,
    unable to pass through costs, has been hit hard. U.S. natural gas
    production is not keeping pace with the demands of a growing population
    and a slowly recovering economy. Due to the current supply/demand
    imbalance, domestic natural gas prices are substantially higher than
    the equivalent prices paid by most foreign manufacturers. These high
    natural gas prices are undermining U.S. economic recovery and pushing
    jobs offshore in gas-dependent industries and are increasing the cost
    of electricity to most consumers.
        Electricity prices being paid by U.S. manufacturers continuing to
    rise due not only to high natural gas prices, but also the ever-
    increasing burden of Clean Air Act (CAA) regulations. During the past
    dozen years, CAA regulations have played a major role in pushing
    electric generators to build natural gas units instead of new coal
    units. Yet, coal is the most abundant and inexpensive domestic energy-
    providing natural resource in the United States. Coal-fired generation
    still provides approximately 52 percent of the nation's electricity,
    with no other energy source able to replace it in the near-term.
        Accordingly, coal must be maintained and expanded as a viable and
    affordable energy source if we are to keep natural gas from becoming
    increasingly more expensive and potentially less readily available for
    homeowners, manufacturers and electric generators. Implementation of
    the new ozone and PM2.5 NAAQS must not aggravate the already
    precarious natural gas supply and price situation by allowing the
    market to select coal-fired generation for new electricity capacity, as
    well as avoiding any wholesale switching from existing coal-fired
    generating capacity to natural gas. The United States must maintain a
    diverse fuel supply that includes affordable coal options if the
    economy is to continue to rebound and prosperity is to continue.
        States and the EPA need maximum flexibility to adopt controls and
    other requirements that will contribute to the timely achievement of
    attainment of the 8-hour standard, in light of current knowledge
    regarding controls that may help or hinder progress toward attainment
    of that standard. The EPA should implement the necessary policy and
    administrative options to recognize and fully credit within the state
    implementation planning process the significant air quality progress
    that will be made by new Federal measures such as cleaner fuels and
    engines. Such a process will help minimize the burden of this very
    expensive implementation on state and local entities.
        Specifically, there are currently various regulatory mandates in
    effect, or about to come online, that will further reduce air
    emissions. Before we implement the next set of stringent expensive
    controls, we should realize the local controls that are currently in
    effect. Attainment deadlines should be linked to when reductions will
    occur from transport and mobile source controls (e.g., on-road and off-
    road diesel rule in 2006-10 timeframe; clean gasoline and engine
    standards in the 2012-15 timeframe; transport emissions from the
    proposed Interstate Air Quality Rule in the 2010-15 timeframe).
        In your oversight and authorization capacity, please take into
    account the following suggestions to mitigate the impact of the
    stringent NAAQS on businesses in non-attainment areas. First, consider
    options that would make it easier to extend attainment deadlines that
    may be economically or technically infeasible for areas to meet.
    Second, as the EPA continues its review of the current ozone and PM
    NAAQS, please consider legislation to ease the rigid deadlines and
    control requirements flowing from NAAQS standard-setting which ignores
    actual health benefits, compliance costs and technical feasibility.
        Third, we urge you to continue to oppose all efforts to weaken,
    delay or block the EPA's New Source Review (NSR) reforms. NSR reform is
    needed for business certainty, energy security and environmental
    quality. The reforms would encourage emissions reductions, promote
    pollution prevention and provide incentives for energy efficiency
    improvements. For more than two decades, states, industry and the EPA
    have recognized that the NSR program needs serious repair. The final
    NSR rules will help promote safer, cleaner and more efficient
    factories, refineries and power plants.
        Finally, we urge that you continue to support multi-emissions
    legislation that will reduce emissions while replacing conflicting and
    problematic regulations with one clear set of rules that will improve
    upon the gauntlet of CAA requirements and litigation. Such legislation
    must provide electricity generators with regulatory certainty that will
    allow investment decisions needed to meet both objectives of cleaner
    air and affordable power from a diverse fuel base. To be successful,
    any multi-emissions legislation must be consistent with a viable and
    affordable fuel mix for growing the economy, including manufacturing.
        Since 1970, all of the major pollutants targeted by the CAA have
    been drastically reduced by 48 percent against the backdrop of a 164
    percent growth in gross domestic product, 42 percent increase in energy
    consumption, 155 percent increase in vehicle-miles traveled and 38
    percent rise in population. There is certainly much work ahead for
    Americans as leaders in the stewardship of our global environment. And
    we must remain vigilant and relentless in our efforts to create cleaner
    and safer technologies and efficient energy sources for a more secure
    and healthy future. But we also must insist that sound science--not
    political scare tactics--drives our environmental regulations. And with
    a clear understanding that economic growth and a cleaner environment do
    indeed go hand-in-hand, we must resist the scare tactics of those who
    would have us believe the sky is falling when, in fact, science tells
    us we can all breathe a little easier.
        We request that you make this letter a part of the record for the
    subcommittee hearing on NAAQS implementation. If you have any
    questions, please have your staff contact Jeffrey Marks at (202) 637-
    3176.
        Thank you.