[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.

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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.
  

                                  
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