[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



 
  METHYL BROMIDE: ARE U.S. INTERESTS BEING SERVED BY THE CRITICAL USE 
                           EXEMPTION PROCESS?

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

                                HEARING

                               before the

                  SUBCOMMITTEE ON ENERGY AND RESOURCES

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 15, 2006

                               __________

                           Serial No. 109-129

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCHMIDT, Ohio                       (Independent)
------ ------

                      David Marin, Staff Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

                  Subcommittee on Energy and Resources

                 DARRELL E. ISSA, California, Chairman
LYNN A. WESTMORELAND, Georgia        DIANE E. WATSON, California
ILEANA ROS-LEHTINEN, Florida         BRIAN HIGGINS, New York
JOHN M. McHUGH, New York             TOM LANTOS, California
PATRICK T. McHENRY, North Carolina   DENNIS J. KUCINICH, Ohio
KENNY MARCHANT, Texas

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                   Lawrence J. Brady, Staff Director
                 Dave Solan, Professional Staff Member
                    Lori Gavaghan, Legislative Clerk
          Richard Butcher, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 15, 2006................................     1
Statement of:
    Wehrum, William L., Acting Assistant Administrator for Air 
      and Radiation, U.S. Environmental Protection Agency; 
      Michelle M. Castellano, attorney and vice president, 
      Mellano & Co., San Luis Rey, CA; James A. Bair, vice 
      president, North American Millers' Association; and David 
      Doniger, senior attorney, Natural Resources Defense Council    15
        Bair, James A............................................    35
        Castellano, Michelle M...................................    24
        Doniger, David...........................................    46
        Wehrum, William L........................................    15
Letters, statements, etc., submitted for the record by:
    Bair, James A., vice president, North American Millers' 
      Association, prepared statement of.........................    37
    Castellano, Michelle M., attorney and vice president, Mellano 
      & Co., San Luis Rey, CA, prepared statement of.............    26
    Doniger, David, senior attorney, Natural Resources Defense 
      Council, prepared statement of.............................    48
    Issa, Hon. Darrell E., a Representative in Congress from the 
      State of California:
        Briefing memo............................................     5
        Prepared statement of....................................     3
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio, prepared statement of...................    74
    Wehrum, William L., Acting Assistant Administrator for Air 
      and Radiation, U.S. Environmental Protection Agency, 
      prepared statement of......................................    18


  METHYL BROMIDE: ARE U.S. INTERESTS BEING SERVED BY THE CRITICAL USE 
                           EXEMPTION PROCESS?

                              ----------                              


                      WEDNESDAY, FEBRUARY 15, 2006

                  House of Representatives,
              Subcommittee on Energy and Resources,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:06 p.m., in 
room 2203, Rayburn House Office Building, Hon. Darrell E. Issa 
(chairman of the subcommittee) presiding.
    Present: Representatives Issa, Watson, and Kucinich.
    Staff present: Larry Brady, staff director; Lori Gavaghan, 
legislative clerk; Tom Alexander, counsel; Dave Solan, Ph.D., 
and Ray Robbins, professional staff members; Alexandra Teitz, 
minority counsel; Richard Butcher, minority professional staff 
member; and Cecelia Morton, minority office manager.
    Mr. Issa. Ladies and gentlemen, I want to thank you all for 
being here. Please all take seats.
    Yes, if the private sector witnesses would also take their 
place at the table, I would appreciate it.
    In the future we may want to schedule these differently, 
but we had noticed this as a single panel, and with your 
indulgence, we will go forward that way. I guess officially I 
will bring this hearing to order.
    And to my amazement, a quorum being present, this 
subcommittee hearing on will come to order.
    The subcommittee is conducting this hearing today to 
highlight the shortcomings or successes of the Montreal 
Protocol's Critical Use Exemption process with respect to 
methyl bromide.
    This is an issue of paramount importance to my constituents 
and my ranking member's constituents in southern California, as 
well as the growers and manufacturers throughout the country.
    First let me say that I fully support the Montreal Protocol 
in its effort to eliminate the use and production of ozone-
depleting substances. We have been very successful in this 
effort. Through the cooperation of the Government and private 
sector in the United States, we have eliminated the use and 
production of more than 90 percent of the substances on the 
Protocol's list. We are working hard to eliminate the last 10 
percent, which includes methyl bromide.
    In 2007, the United States, it is estimated, will use only 
26.25 percent of what it used in 1991. We are continuing our 
effort to find substitutes for methyl bromide. To date, the 
U.S. Government alone has spent more than $200 million in this 
pursuit, and we understand that the private sector in response 
has spent at least the same. But a substitute alternative on a 
universal basis has not been found to date. This is why we have 
to continue with a critical use exemption for certain 
categories for which there is no alternative, as afforded under 
the Montreal Protocol.
    However, I am concerned that when put into practice, the 
critical use exemption process does not work well. The process 
is lengthy, unpredictable, expensive, and anything but 
transparent--and I want to emphasize, anything but transparent. 
Some of our competitors not covered, such as China, India, and 
Mexico, will not be subject to the Protocol until 2015. Every 
year we apply, we are authorized considerably less than what 
our farmers require.
    We must ask ourselves: Are U.S. interests adequately served 
under the critical use exemption process as it currently 
functions? Should we be subject to international procedures 
that lack transparency and predictability? Is there anything 
Congress can do to spur transparency and predictability? Can 
the process be simplified? Why can't we have a multi-year 
approach? These are just some of the questions for today.
    I hope that the testimony delivered today--and I have read 
the testimony in advance--will shed some light on the critical 
use issue and suggestions for improvements, and particularly in 
the question-and-answer period. I hope that this panel will 
suggest improvements that you believe would help in this 
process.
    [The prepared statement of Hon. Darrell E. Issa follows:]
    [GRAPHIC] [TIFF OMITTED] 26716.001
    
    Mr. Issa. We have a very distinguished public and private 
panel today. First of all, we have Mr. William Wehrum, Acting 
Assistant Administrator for Air and Radiation, U.S. 
Environmental Protection Agency, and thank you for being here.
    We have Ms. Michelle Castellano, vice president, Mellano & 
Co. from San Luis Rey, CA, and I do have to once again thank 
you as a constituent and as a major employer in my district. 
Your family has been very generous in working on this issue 
both here and overseas.
    Mr. James Bair, vice president of North American Millers' 
Association, again, a returnee of many contributions to the 
committee.
    Finally, Mr. David Doniger, senior attorney, the Natural 
Resources Defense Council. I have been particularly interested 
in your submittals. They are extensive, and I look forward to 
our question-and-answer period. I also understand that you will 
have some documents to submit, and that will be allowed under 
unanimous consent.
    I look forward to hearing testimony from this panel. I ask 
unanimous consent that the briefing memo prepared by the 
subcommittee staff be inserted into the record, as well as 
other relevant materials, including any materials which you 
recognize and elect to have during your testimony.
    [The information referred to follows:]
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    Mr. Issa. I now yield to the ranking gentlewoman from 
California for her opening statement.
    Ms. Watson. I sincerely want to thank our chairman for this 
hearing.
    On April 5, 1988, President Ronald Reagan signed the 
Montreal Protocol on substances that deplete the ozone layer. 
On October 26, 1990, the House of Representatives voted 401-25 
to pass the Clean Air Act and implement the Montreal Protocol. 
On November 15, 1990, President George Bush, Sr., signed into 
law the implementing legislation for the Montreal Protocol. 
Most importantly, the Protocol has enjoyed the bipartisan 
backing of four consecutive Presidents.
    According to the National Resources Defense Council, methyl 
bromide is the most dangerous ozone-destroying chemical still 
in widespread use. The NRDC further states that methyl bromide 
has also been linked to the increased rates of prostate cancer 
in pesticide applicators and other agricultural workers, not to 
mention skin cancer and cataract cases that are directly linked 
to a weak ozone layer.
    For 16 years, the Montreal Protocol has been working to 
phaseout ozone-depleting chemicals and to protect and restore 
the ozone layer. The United States demonstrated that we were 
able to work together with the international community to 
answer an environmental problem that threatened the entire 
planet. According to the Protocol, the use of methyl bromide 
was supposed to be reduced to zero by the year 2005. For the 
past 3 years, the United States and a few other countries have 
requested exemptions from the Protocol for so-called critical 
uses.
    The subject of this methyl bromide hearing is: Are U.S. 
interests being served by the critical use exemption process? 
Unfortunately, we as Americans tend to look at some issues 
through a very narrow window. If we want to be critical of an 
agreement with the world, especially what is considered to be 
the most effective and beneficial environmental world treaty 
thus far, one must examine all sides of the issue.
    Representative Radanovich has introduced legislation in the 
108th and 109th Congress that had authorized methyl bromide use 
regardless of the Montreal Protocol. The bill is a threatening 
measure to be utilized if all of the U.S. critical use 
exemptions are not issued by the Montreal Protocol parties. 
Congress can move legislation to grant exemptions presumably 
even if it takes the United States out of compliance within the 
Montreal Protocol.
    My concern: What is the science, legal, and international 
ramifications behind such an initiative? Many believe that the 
Montreal Protocol has the flexibility necessary to address 
appropriate needs for methyl bromide until alternatives are 
identified. We have every reason to believe that the exemption 
process works. After all, the United States was a leader in 
developing and drafting every detail of the Protocol.
    Mr. Chairman, to question the critical use exemption 
methodology of the Montreal Protocol is a commendable oversight 
practice, but my constituents want to know if there is a reason 
that is backed by scientific, empirical evidence behind that 
thought. Several agricultural interests, including some in my 
own home State of California, have initially bought into the 
``whatever the United States wants'' with methyl bromide 
initiatives. It is our duty to question if American economic 
interests are balanced with the interests of the United States 
and the world human health, the United States and world 
environmental health, and, last but not least, the health of 
U.S. foreign policy. As a former Ambassador, I fully understand 
the importance of being American while embracing the world we 
live in.
    Mr. Chairman, I want to commend you again on this hearing. 
American citizens need answers. It is critical that we find a 
solution to the methyl bromide dispute and develop any 
environmentally sound alternatives that we can. It is 
imperative for our economy and for the independence of our 
great Nation, and I hope this hearing will demonstrate how 
unwise it would be for the House of Representatives to walk 
down a path that violates international law, threatens the 
repair and the healing of the ozone layer, and adds risk to the 
health of many Americans.
    I look forward to this informational session with the U.S. 
Environmental Protection Agency, the National Resources Defense 
Council, the North American Millers' Association, as well as 
representatives from industry. Mr. Chairman, I yield back the 
remainder of my time. Thank you.
    Mr. Issa. Thank you. Mr. Kucinich, I really appreciate your 
interest in this and yield you such time as you may need.
    Mr. Kucinich. Thank you, Mr. Chairman. I want to thank you 
for calling this hearing. I have a delegation from the Ohio 
National Guard coming to my office shortly, and I would 
appreciate your indulgence if I could read a statement and then 
return to my office for the meeting. So thank you, and it is a 
pleasure to serve with you on this committee, and thanks to the 
gentlelady, the ranking member.
    I was dismayed when I learned that today we would be 
discussing efforts to perpetuate and possibly increase the use 
of methyl bromide. Continuing to allow it to be manufactured 
and used is bad for the environment, bad for human health, bad 
for international relations, bad economics, and is simply 
unnecessary.
    Methyl bromide has been responsible for a significant 
amount of the degradation of our protective ozone layer. In 
2005, the size of the resulting hole in that layer over the 
Antarctic reached 9.4 million square miles, an area almost as 
big as the combined areas of the United States and Canada, 
according to the NASA. Current estimates say that it will take 
another 50 years for the hole to repair itself.
    Too much ultraviolet B, which is filtered by the ozone 
layer, causes cataracts and suppresses immune systems, making 
us more vulnerable to viruses and bacteria, and contributes to 
skin cancer. It is this threat to human health that is the 
major reason why the international community agreed to ban 
methyl bromide. It was a display of unprecedented cooperation 
in the face of an environmental threat.
    Methyl bromide puts their own workers and consumers at 
risk, too. It is no wonder that it causes chronic health 
problems for the workers who apply it and the nearby 
communities who are exposed to it. Exposure has effects on the 
neurological system, including functional impairment, lethargy, 
twitching, tremors, and paralysis in extreme cases. It has also 
been linked to prostate cancer and birth defects in some 
studies.
    Continuing to manufacture methyl bromide is bad economics. 
Since the international community agreed to phaseout methyl 
bromide, companies who play by the rules have been planning for 
its phaseout. They have incurred real financial costs by 
investing in alternatives, anticipating the phaseout required 
by the Montreal Protocol. Failing to adhere to the U.S. promise 
to phaseout methyl bromide puts these companies who are playing 
by the rules at an unfair competitive disadvantage. Those who 
do the right thing and obey the law should be rewarded for 
their good-faith efforts, not punished.
    Consider the international implications as well. An attempt 
to let the United States allow methyl bromide to be used 
without going through the specified channels like other 
countries are required to do would further harm our standing in 
the international community. It also sends a signal to other 
countries that we will only honor our agreements until we 
change our mind. It harms negotiations on future agreements.
    The EPA is currently trying to address the methyl bromide 
issue by substituting chemicals, like methyl iodide, that 
aren't as harmful to the ozone layer but are still highly 
toxic. Instead, we need to look at alternatives for pest 
control that not only preserve the ozone layer, but also 
protect workers' health, community health, consumer health, and 
ecological health. In fact, that is exactly what Americans 
want.
    One of the biggest growth industries right now, for 
example, is organic food. According to the Congressional 
Research Service, ``The annual rate of market growth since 1990 
has remained steady at about 20 percent.'' When given a choice 
between food grown with toxic chemicals or food grown 
organically, people choose the latter, especially when the 
price is comparable, which is increasingly the case as the 
economies of scale are becoming more prevalent.
    One of methyl bromide's biggest uses is for strawberry 
crops. Jake Lewin, Director of Marketing for the California 
Certified Organic Farmers, says, ``Strawberries can be grown 
without pesticide. We have 60 growers who don't use methyl 
bromide. The bottom line is small, and large growers have 
successfully produced strawberries without pesticides.'' And 
that, by the way, is from the Santa Cruz Sentinel. I have the 
citation for the record.
    So we are talking about yielding to the management of 
chemical producers and agribusiness, who, by the way, rarely 
have to apply the toxic pesticide themselves or live in 
adjacent communities, at a drastic cost to our health and that 
of the Earth. It speaks to the systematic deference to 
corporations at the expense of the biological systems on which 
we intimately depend for life. So I say this policy is unwise 
and unnecessary, and I call for the immediate and permanent 
phaseout of methyl bromide.
    Mr. Chairman, I want to thank you for giving me the 
opportunity to read this statement.
    Mr. Issa. I want to thank you for your participation, and 
anything you want to place in the record, for the next 2 weeks 
it will be left open.
    Mr. Kucinich. Thank you, Mr. Chairman.
    Mr. Issa. And give my best to, as a former Ohioan, our 
National Guard.
    Mr. Kucinich. I will do that, and I will let them know that 
you were kind enough to indulge my reading this statement.
    Mr. Issa. Not a problem, Dennis.
    Before I hear your testimony, it is the rule of this 
committee that all people participating in the hearing, whether 
as witnesses or in support staff that may either advise or 
testify, be sworn in. So I would ask not only our witnesses but 
any supportive staff to please stand for the oath.
    [Witnesses sworn.]
    Mr. Issa. Let the record show everyone answered in the 
affirmative. Please be seated.
    Before we hear your testimony, I would like to say two 
things. First of all, absolutely everything in your written 
statement will be in the record. We will also allow for 
additional material and additional response to material that is 
submitted. We want this record to be as full and complete as 
possible. I will hold open the record--and I will say it again 
at the end--for at least 2 weeks, but if necessary, longer. 
This is an extremely important subject. We are absolutely 
dedicated to the elimination of methyl bromide. This hearing is 
about how to do it and how to make the system work properly. We 
are open to hearing about alternatives and the progress on 
alternatives. So although the scope is relatively narrow 
because there is only so much time, we are going to allow for 
an expansion of the record so that we can be as complete as 
possible. That is with unanimous consent by my ranking member.
    So feel free in your 5 or so minutes to go off of your 
prepared statement knowing it is going to be in. Additionally, 
it is a single panel, so we do not plan on cutting anyone 
short. If other Members come in, they will be able to ask 
plenty of questions. Again, this is very important on a 
bipartisan basis that it be a very complete record.
    So, Mr. Wehrum, you are first. Thank you.

STATEMENTS OF WILLIAM L. WEHRUM, ACTING ASSISTANT ADMINISTRATOR 
 FOR AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY; 
MICHELLE M. CASTELLANO, ATTORNEY AND VICE PRESIDENT, MELLANO & 
  CO., SAN LUIS REY, CA; JAMES A. BAIR, VICE PRESIDENT, NORTH 
   AMERICAN MILLERS' ASSOCIATION; AND DAVID DONIGER, SENIOR 
          ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL

                 STATEMENT OF WILLIAM L. WEHRUM

    Mr. Wehrum. Thank you, Mr. Chairman, Congresswoman Watson. 
I appreciate the opportunity to be here to testify. It is a 
privilege. I am here on behalf of three Federal agencies--the 
Department of State, the Department of Agriculture, and the 
Environmental Protection Agency--to discuss the methyl bromide 
critical use exemption process under the Clean Air Act and 
Montreal Protocol.
    I recognize this issue is of great importance to you and 
many of your constituents.
    Since the Montreal Protocol's inception in 1987, the United 
States has exerted strong global leadership in the transition 
away from ozone-depleting substances and toward the development 
of new technologies that are safe for the ozone layer. We 
continue to meet all of our obligations under the Montreal 
Protocol and have successfully phased out most ozone-depleting 
substances controlled by the Protocol.
    Because of the U.S. Government's commitment and our 
innovative domestic industries, the world is well on its way to 
seeing the recovery of the stratospheric ozone layer. We 
estimate that full implementation of the Montreal Protocol will 
save 6.3 million U.S. lives that would otherwise have been lost 
to skin cancer between 1990 and 2165.
    Pursuant to the Montreal Protocol and Title VI of the Clean 
Air Act, methyl bromide, like other ozone-depleting substances, 
has been subject to a gradual step-by-step phaseout with 
certain allowable exceptions. Today's discussion will focus on 
the critical use exemption, or CUE process, which allows 
parties to identify crops and uses for which there are no 
technically and economically feasible alternatives. The CUE 
process essentially allows on a yearly basis the production and 
import of new methyl bromide for such uses after the Montreal 
Protocol's phaseout date of January 1, 2005.
    The CUE process begins when EPA solicits applications for 
methyl bromide users for their critical use nomination, or CUN. 
I am from EPA, so we are into acronyms. EPA conducts a 
technical review of the applications, and the U.S. Government 
then submits a CUN to the parties of the Protocol approximately 
2 years before the control period in which the CUE will be 
produced.
    A technical committee called the Methyl Bromide Technical 
Options Committee [MBTOC], reviews this U.S. CUN and provides 
recommendations to the Protocol parties. Parties then act to 
authorize the CUEs. Finally, EPA allocates the CUEs through a 
notice and comment rulemaking process.
    Since the CUE process has been implemented under the 
Protocol and the Clean Air Act, the United States has 
consistently received over 90 percent of the amount we 
nominated for consideration by the parties to the Protocol. I 
believe this is a tribute to the strength of the data and 
technical information that the United States has assembled for 
its nominations. To date, EPA has completed action on 
rulemakings to provide CUEs in 2005 and 2006. The agency is now 
preparing a proposal to implement decisions regarding methyl 
bromide taken at the last meeting of the parties in Dakar, 
Senegal, in December 2005. This rulemaking will address CUEs 
for the year 2007. The United States also recently submitted 
its CUN to parties for methyl bromide production in 2008.
    Although there continues to be room for improvement, we 
believe that both the international and domestic processes for 
developing and allocating critical use exemptions are working 
well and that the CUE process yields an annual amount of methyl 
bromide to meet the critical needs of U.S. farmers while 
continuing to show steady gains in protection of human health.
    While there is no silver bullet, that is, no currently 
approved alternative to methyl bromide that can substitute for 
methyl bromide in all uses, some alternatives have been 
developed, and more are under review. My written testimony 
contains a list of substances that have been approved and are 
making inroads in the marketplace in combination with or 
instead of methyl bromide, thereby reducing overall methyl 
bromide use. Altogether, the United States has taken the lead 
in finding alternatives to methyl bromide, and EPA continues to 
give highest priority to the registration of alternatives to 
this chemical, including iodomethane, a highly promising 
potential replacement for important soil uses of methyl 
bromide.
    Mr. Chairman, we don't claim that the process for 
determining CUEs for methyl bromide is perfect or that 
everything has run completely smoothly, but we have worked with 
other Protocol countries to make improvements. For example, in 
2004, we collaborated with the other parties to revise the 
guidelines used by the MBTOC to provide a more transparent and 
well-defined process for the MBTOC to review nominations. The 
success of this effort is illustrated by the fact that for the 
first time, MBTOC's critical use recommendation for the United 
States had no material in the ``unable to assess'' category. 
This timely approval will allow the U.S. regulatory process to 
move forward.
    Mr. Chairman, the U.S. positions in recent meetings of the 
parties have demonstrated the administration's strong 
commitment--strong continued support for the Montreal Protocol, 
as well as our commitment to the phaseout of methyl bromide as 
technically and economically feasible alternatives become 
available for U.S. growers and other users of methyl bromide.
    Altogether, we believe it is vital to work with Congress 
and the community affected by the methyl bromide phaseout to 
ensure that our implementation of the Protocol and the CUE 
process continues to be successful.
    I would be pleased to answer any questions you may have, 
and again, thank you for the opportunity to be here. It is a 
privilege.
    [The prepared statement of Mr. Wehrum follows:]
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    Mr. Issa. Thank you, Mr. Wehrum.
    We will now hear from Ms. Castellano.

              STATEMENT OF MICHELLE M. CASTELLANO

    Ms. Castellano. Thank you, Congressman Issa.
    As you stated, my family grows cut flowers in the San Diego 
area of California. I am a third-generation flower grower. We 
farm approximately 400 acres in that area.
    The question of whether the CUE process is working is of 
great importance to us and all of the agricultural sector. I am 
here today on behalf of the entire ornamental cut flower 
industry, and from our point of view, we would have to say that 
it is not working. We support the Montreal Protocol and we 
support being part of it, but we do not feel that we are being 
treated fairly in that process.
    We are very clear on the terms of the Protocol and are in 
compliance, yet we continue to receive arbitrary cuts from our 
applications for our needed methyl bromide. At the first level, 
we are concerned when EPA reviews our applications. We feel 
that they review our applications without a complete 
understanding of the agricultural industry and the varying 
practices of agriculture, different sectors and within our 
different communities. Despite their relentless attempts to 
understand agricultural practices, pesticide use, varying 
practices from different regions, we find that agriculture does 
not fit into EPA's BUNI charts that they use across the sector, 
and especially cut flowers tends to be more complex than other 
agricultural practices. We will continue working with EPA in 
getting a better understanding, but in the meantime, we feel 
that the cuts that take place in those BUNI charts is an 
arbitrary cut and not scientifically justified.
    We are further concerned that when EPA proposes this 
reduced application to the international community, MBTOC 
arbitrarily reduces our amount as well without scientific 
justification. My written testimony includes an excellent 
letter from Claudia McMurray noting the U.S. concerns with 
MBTOC's arbitrary reduction with no scientific reasoning. And 
it also includes one of MBTOC's reports making assumptions that 
if alternatives work in one region, they are going to make the 
assumption that it is going to work in another region and make 
cuts up to 20 percent. There is no scientific justification for 
this, and according to the Protocol, that is outside of MBTOC's 
area. There needs to be scientific justification for cutting 
our application.
    In addition to the arbitrary cuts, we are also concerned 
that more and more of our allocations are being derived out of 
stocks--stocks being methyl bromide that was manufactured prior 
to the 2005 cutoff. Stock supplies that may or may not exist 
are not part of the Montreal Protocol and are not controlled by 
the Montreal Protocol and, therefore, should not be part of the 
allocation. Not only is it not part of the allocation and 
should not be discussed, it is also taking up much of the U.S.' 
time at the international meeting. Instead of focusing on the 
terms of the Protocol, they are spending way too much time 
negotiating these stock numbers that we do not feel are 
appropriate.
    Most recently, applicants, such as us, are also required to 
provide a National Management Strategy, and as part of this 
strategy, we are supposed to suggest how our critical use 
exemption amounts will be phased down. That is also not part of 
the Protocol. The phaseout was for 2005 if critical use 
exemptions are needed; that is, if no technical or feasible 
alternative exists based on research, we are allowed to apply 
for this critical use exemption. Let me reiterate, that is part 
of the Protocol. The United States did sign onto the Protocol, 
and this was part of it. We are still at that point. We would 
be happy to use alternatives if they were out there, but they 
are not.
    If our applications are scientifically justified, which we 
feel they are--our research that takes place in the United 
States in the agricultural industry is the most complex 
research taking place and the most sophisticated research. 
Therefore, we feel that our applications are completely within 
the Protocol, and the cuts that are taking place are not 
justified.
    I thank you again, and I am happy to answer any questions.
    [The prepared statement of Ms. Castellano follows:]
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    Mr. Issa. Thank you.
    Mr. Bair.

                   STATEMENT OF JAMES A. BAIR

    Mr. Bair. Thank you, Mr. Chairman and members of the 
subcommittee. I am Jim Bair, vice president of the North 
American Millers' Association, and I am also here as vice 
chairman of the Crop Protection Coalition. NAMA has 48 member 
companies that operate 170 grain mills in 38 States and have a 
collective daily production of more than 160 million pounds, 
and the chairman and ranking member may find it interesting 
that California is leading in that category. In fact, Los 
Angeles is the milling capital of the United States. There are 
six mills in Los Angeles that produce 8 million pounds of flour 
every day.
    Mills use methyl bromide for just one reason, and that is 
to keep insects out of food. We think that clean and wholesome 
food is something that consumers have come to expect. We know 
that the Food and Drug Administration demands it, and most 
people will remember seeing their mother or perhaps their 
grandmother baking and sifting flour, and the reason you sifted 
flour was to get the bugs out of the flour. And there is a 
reason that you can hardly find a flour sifter anymore. It is 
because there are not bugs in the flour. Methyl bromide is one 
of the tools that we use to make sure that continues to be the 
case.
    We are getting better every day about minimizing our use of 
pesticides, and even in advance of the Montreal Protocol cuts, 
we had already voluntarily cut our methyl bromide usage by 
about 60 percent.
    What is all the fuss about? This controversy about methyl 
bromide, we are spending tremendous resources on it. In my 
opinion, the controversy is not about a problem of significant 
environmental consequence. If you go to the U.S. EPA Web site, 
you can find a lot of data. For example, this says that the 
amount approved for 2006 is about 0.3 percent of the ozone-
depleting potential from all sources when the Montreal Protocol 
was first negotiated. So we are talking about a tiny slice of 
the ozone-depleting potential that remains. And like most 
things, those tiny incremental gains to be made are going to be 
the most difficult and extraordinarily expensive to achieve.
    Montreal Protocol meetings, as Ms. Castellano referenced, 
these meetings do not represent the open policymaking that you 
would recognize from the U.S. Congress, for example. The 2003 
meeting was in Nairobi, which is a city so dangerous that the 
U.S. Embassy had evacuated its Embassy--excuse me, the State 
Department had evacuated its Embassy. The 2004 negotiations 
took place on Thanksgiving Day. The 2005 negotiations were in 
Dakar, Senegal, which is not exactly an easy place to get to. 
And the 2006 working group meetings will be on our 4th of July 
Independence Day. So we think that if the United States has to 
defend the largest critical use exemption program, it is not 
unreasonable to think that it could be done at a date and a 
location that would be convenient for the CUE holders to be 
able to get there and defend and answer questions. And, 
frankly, we ought to be able to do that since the U.S. funds 25 
percent of all the Montreal Protocol activities each year.
    Those meetings, when we get there, I know Ms. Castellano 
and I have both been kicked out of meetings there. The 
substantive negotiations take place behind closed doors. And I 
think American agriculture is justifiably skeptical about 
receiving fair treatment through such a process.
    Let me briefly hit how the CUE process works. As has been 
said, we submit our application every summer. That goes to the 
U.S. EPA. They analyze it. They make a cut--so far they have 
already made a cut. They roll all those CUEs into one package, 
which goes to the United Nations Environmental Program parties. 
They make another cut. Then it goes back to the U.S. EPA, and 
before they make their allocation, they can make another cut, 
as they did just in January of this year where they cut us by 
another 15 percent. It is important to note, I think, that in 
each of those cuts, we have no right of appeal.
    We object to the way rules are changed in the middle of the 
game. Congress ratified the Montreal Protocol treaty with an 
understanding about what the details of that agreement were, 
and yet every year the treaty--there are agreements made that 
we think change the original intent of the treaty.
    Mr. Chairman, you asked for recommendations in testimony 
about how we could improve the CUE process, and I will be happy 
to do that briefly for you.
    We think that when cuts are made, we should have the right 
of appeal, and that they should not be made without some basis 
in scientific fact.
    We think that the U.S. EPA should be required to publish 
any changes in the rules or the allocations by December of the 
preceding year. For example, this year they did not publish the 
2006 allocation until almost February 1st. I am aware of 
growers and food processors who had the need to fumigate in 
January and did not because they were not sure if it would be 
legal to do so.
    So I would be happy to--I see my time has expired. I would 
be happy to go through more recommendations in the question-
and-answer period, but I want to thank you for your----
    Mr. Issa. How many more do you have?
    Mr. Bair. Just a couple. It would just take me 30 seconds.
    Mr. Issa. Without objection, go ahead.
    Mr. Bair. We think that the Congress should shine more 
light on the international process. Again, the closed meetings 
are a problem. Hold the meetings in a place that is safe and 
reasonably convenient for us to attend.
    Research--we think Congress should increase funding for 
research to develop effective and economic alternatives. You 
have appropriated funds for, as you said, nearly $200 million 
worth of research, with very little to show for it so far.
    Those are my recommendations, and I thank you for the extra 
time.
    [The prepared statement of Mr. Bair follows:]
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    Mr. Issa. Thank you.
    Mr. Doniger.

                   STATEMENT OF DAVID DONIGER

    Mr. Doniger. Thank you very much, Chairman Issa, 
Congresswoman Watson. Thank you for the opportunity to be here 
on behalf of NRDC, which for 30 years the Natural Resources 
Defense Council has been the principal environmental 
organization working on protecting the ozone layer.
    The global treaty, the Montreal Protocol, is a global 
success story, and it has been backed by four Presidents of 
both parties. It has accomplished a great deal already. It has 
saved millions of Americans and even more people around the 
world from death by skin cancer and even more people from 
illnesses such as non-fatal skin cancer and cataracts. Now is 
not the time to tamper with the success of this agreement.
    As the Congresswoman mentioned, methyl bromide is the most 
powerful ozone-depleting chemical that is still in wide use, 
and Nobel Prize-winning scientist Mario Molina, whose comments 
I cite in my testimony, has said that the ozone layer simply 
cannot fully recover without the phaseout of all the ozone-
depleting chemicals, including methyl bromide.
    Now, you have heard claims that the process is broken and 
that there is a shortage of methyl bromide. In my view, there 
is a glut of methyl bromide available today. More than twice 
the amount EPA says is needed is available out there, and I 
will go through why that is so.
    But more to the point, or to start at the beginning, the 
amount of methyl bromide that is said to be needed has been 
greatly exaggerated. How do we know this? The total amount that 
was used in 2003 by everyone, by all the users, not just the 
critical users, was nearly 25 percent less than the amount EPA 
said the subgroup of critical users needed in 2005. The same 
thing has happened again this year.
    Let me say a word more about the health effects of these 
exemptions. Dr. Sasha Madronich, who is an expert who helped 
develop the EPA risk assessment model, working with that model 
has calculated that the exemptions that were issued in 2005 
will lead to more than 10 skin cancer deaths in the United 
States, more than 2,000 other skin cancer cases, and more than 
700 cataract cases. The exemptions for 2006 are roughly the 
same size, so it is appropriate to double those numbers, and 
the toll will continue to increase for each year that these 
exemptions go on.
    Now, I am not saying we can get to zero right away. I am 
not saying we don't need exemptions. NRDC understands and 
accepts that the exemption process is a part of the treaty. But 
it is being abused, and it is the abuse that we need to stop 
and get the exemptions down to size and get toward zero as 
quickly as we can.
    Let me call your attention to figure 2 in my testimony. It 
is on page 6. I had intended to project some slides. I got here 
late, and so it is my fault. I appreciate the staff's 
cooperation in advance to prepare for a projector, and we just 
did not get time--I did not get here in time to set that up.
    But figure 2 shows in the top bar the amount of methyl 
bromide in pounds, 17 million pounds, that was used by 
everybody, according to EPA data, in 2003. The critical use 
allowances for a smaller group of farmers and millers and 
others were set, in 2005, at 21.1 million pounds, and for 2006, 
at 18 million pounds. Well, we do not understand how the part 
can be larger than the whole and why the usage should be that 
high.
    There are a number of reasons why the usage was 
exaggerated: the use of very old data that was out of date; the 
use of unreasonable assumptions that the pests will hit 
everybody everywhere at once; the assumption that everybody 
needs their own reserve because methyl bromide cannot be moved 
around in the marketplace. These are all unrealistic and wrong 
assumptions.
    There is a strong injunction from the parties that the 
United States agreed to to take advantage of tarping with 
impermeable materials to keep the methyl bromide from leaking 
from the soil as fast as it otherwise does and thereby reduce 
the amount needed to accomplish the mission of killing the bugs 
and to reduce the leakage. There is no requirement for tarping 
or reduction on account of tarping in these exemptions this 
year.
    If I may be indulged for a couple more minutes?
    Mr. Issa. Go ahead.
    Mr. Doniger. Thank you. The sulfuryl fluoride----
    Mr. Issa. We are going to have a long Q&A.
    Mr. Doniger. I appreciate that. I understand. This is a new 
chemical. I will save my story about sulfuryl fluoride for the 
question-and-answer period, if I may, but let me call your 
attention very briefly to Figure 3, which is about stockpiles.
    Now, the treaty, the agreements that our country has made 
are very clear that there is not supposed to be new production 
unless there are no stocks, unless the stocks are insufficient 
to meet the need. We know from the partial data that EPA has 
given the Congress that the stocks at the beginning of 2004 
were larger than the critical use need. When you add to that 
the new production that was authorized, you end up with an 
amount which is double the asserted need, and the same is true 
for 2006. So we have a glut of methyl bromide around. We do not 
have a shortage.
    I will conclude my remarks with that. Thank you.
    [The prepared statement of Mr. Doniger follows:]
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    Mr. Issa. Thank you.
    Mr. Doniger, one question that I have is about these 
figures on use. Isn't it fair to say that we do not really 
track use as much as we track purchases; that we know what was 
bought, but we really do not have a complete understanding of 
what was used, particularly prior to 2005, because you had 
users who were not critical. Maybe Mr. Wehrum can answer this 
as well. Is that true? Before people had to get a specific 
critical use, we knew how much was sold, but did we really know 
exactly how much was used?
    Mr. Wehrum. The U.S. EPA and the U.S. Government does not 
track use.
    Mr. Issa. OK. So, Mr. Doniger, it would be fair to say, 
because I come from the electronics industry, a lot of--I mean, 
inventory imbalances I understand, and stockpiles I 
understand--but if I understand correctly, in 2003 at 17 
million, if I were one of the non-critical use companies, I 
would be using up my stockpiles knowing that in 2005 I am not 
going to be using it anymore. So I am going to be in a phaseout 
process of going to alternatives.
    Isn't it true that could account for some of this 
reduction?
    Mr. Doniger. Well, let me say a word about these figures. 
You are right that they are kind of inventory balance at the 
high level. They represent the production and import, plus the 
amount of the stockpile that was drawn down, the difference in 
the size of the stockpile between the end of 2002 and the end 
of 2003. EPA put those three numbers together and called them 
use in a document they produced and they released to us.
    Mr. Issa. I have no problem with this being somebody's best 
guess.
    Mr. Doniger. Sure. Second----
    Mr. Issa. I just want to look at this and say, if I 
understand it correctly, 2003 to 2005 is an interesting anomaly 
in that it goes up. Since 2006 falls down to a number--and at 
the current rate of decline, 2007 is going to be a number lower 
than 2003--to a certain extent, the anomaly is behind us. We 
are making progress toward the zero number. My understanding is 
critical use goes on until 2015 in the United States, and 
unfettered use under the protocol goes on--and maybe this is 
for the EPA--for China and India until 2015. Isn't that 
correct?
    Mr. Wehrum. That is not my understanding, Mr. Chairman.
    Mr. Issa. My understanding is China, India, and other 
developing countries, including virtually all of Africa, are 
uncontrolled and unlimited and unreporting.
    Mr. Wehrum. Developing countries that are parties to the 
Protocol do, in fact, have commitments under the Protocol, 
initially to----
    Mr. Issa. Which is 2015.
    Mr. Wehrum. Well, initially to cap usage based on historic 
levels, and then in the year 2005, an obligation to cut usage 
by 20 percent became effective, and then that remains in effect 
until 2015, when the prohibition comes into effect for 
developing----
    Mr. Issa. But isn't it true that we don't know China's 
consumption or production because they don't report.
    Mr. Wehrum. My understanding is China is a party to the 
Protocol, and they are subject to the commitments that I just 
described for developing countries that are members or parties 
to the Protocol.
    Mr. Doniger. If I may add, Congressman----
    Mr. Wehrum. Well, Congressman, just to complete the answer, 
there are countries that are not parties to the Protocol, and I 
believe that is part of what you are getting at.
    Mr. Issa. Mr. Wehrum, I guess my overall concern is that I 
want to see the end of ozone-depleting chemicals as soon as 
possible. I agree with Mr. Doniger in what I think he is 
getting to, which is I do not want to see stockpiles around 
that one way or the other we have to get rid of in the future. 
I want to see that by the time we get to the final cutoff there 
is none left because it would be absurd to have stockpiles that 
you then have to figure out a way to get rid of or ultimately 
vent and you hurt the ozone layer.
    However, my understanding is with the countries that are 
presently major agricultural countries that either are not 
reporting as India is--I mean, India does not report to the 
IAEA. They actually do not tell us about their nuclear program 
even though they are supposed to. They are one of the non-
reporting countries, as I understand, on this.
    We have an inherent question, and it is a question for the 
ozone layer, which is if the ozone layer isn't getting any 
better, could it be that, in fact, we are not--the United 
States has dramatically reduced its use, but that does not mean 
that the world has reduced its use at all unless we have full 
compliance or at least full reporting.
    Mr. Wehrum. Mr. Chairman, to complete the thought from a 
moment ago, I think of the situation as three bins. There are 
parties to the Protocol that are developed countries, such as 
the United States and the European Union, for which there are 
well-defined obligations, and commitments are tracked very 
closely. The second bin I think about are parties to the 
Protocol that are developing countries, and they have the 
obligations that I described a couple minutes ago. Then there 
is a third bin, which are countries which are not parties to 
the Protocol, and their activity--they do not have an 
obligation to report whatever their activities are with regard 
to methyl bromide utilization, and they are not subject to 
commitments that the other parties of the Protocol may be 
subject to.
    So the sum of all that is there is some usage in the world 
that we do not track and that is not reported on a regular 
basis. It is my understanding, based on what we do know, that 
it is a relatively small amount of usage as compared to that 
used by the parties to the Protocol, but we do not have 
complete information, that is true.
    Mr. Issa. As a San Diegan, it may be anecdotal, but we have 
seen a huge part of our flower industry transferred from San 
Diego to Guatemala, Ecuador, and these other countries. The 
Europeans have transferred to Africa. It is no accident that 
they have transferred from this country, which is reducing 
dramatically, to a country in which it is substantially 
unregulated.
    Mr. Doniger. Congressman, I think it would be possible in 
the supplementary period to get you information on which 
countries--certainly which countries are a party. There is no 
important country economically or agriculturally which is not a 
party. It will also be possible to get you up-to-date 
information on who has been reporting and who is not.
    The third thing I think it is important to get to you and I 
know the EPA could supply--we will try as well--is an 
indication of which developing countries are way ahead of 
schedule in reducing methyl bromide, because they participate 
in work under the Multilateral Fund, and they make contract 
agreements, which they have to follow through on and which they 
do report on, to reduce their usage in exchange for smaller 
amounts of transitional financial assistance.
    So there are quite a number of developing countries, 
including some in the regions you mentioned--Africa and Central 
and Latin America--which are way ahead of schedule, and they 
started from a much lower base than we did.
    Mr. Issa. Mr. Wehrum, I would appreciate it if you could 
try to get us the followup information, particularly as to what 
we know, and what we don't know--sort of each of the baskets--
because ultimately we signed on to a global protocol intended 
to save the entire world, and it is only as good as the total 
reduction.
    One question that I would have, Mr. Wehrum, when you said 
that the EPA had worked with other member countries to improve 
the process, I would be interested to hear what has been 
accomplished, where you see some improvements, and if you could 
give us some examples of that.
    Mr. Wehrum. Certainly, Mr. Chairman. And to your previous 
point, we are certainly happy to put together the information 
that you requested, and we will get that to you in a timely 
manner.
    I believe significant improvement in the process has been 
made, and mostly with regard to how the MBTOC operates. There 
were legitimate concerns about the transparency of the process, 
concerned about the way in which the decisions were made by the 
MBTOC and the ability of parties to understand--and 
stakeholders, not just parties to the Protocol, but 
stakeholders----
    Mr. Issa. I was there for Thanksgiving.
    Mr. Wehrum. I applaud your commitment, Mr. Chairman.
    So with regard to the operation of the MBTOC, improvement 
has been made. The MBTOC is better about documenting the 
decisions that they have made, and I think evidence of that is 
in the last consideration of the 2007 critical use exemption 
where we did not get an ``unable to assess'' from the MBTOC. So 
that was an improvement, a recognition of the improvement in 
the process.
    MBTOC has been encouraged to seek more freely information 
from stakeholders and those who use methyl bromide and have 
petitioned for the use of methyl bromide under critical use 
exemptions. They have been encouraged to provide an indication 
earlier rather than later of their inclination with regard to 
the applications that are made, and that helps protect against 
late hits and give people an opportunity, if they think the 
MBTOC is pointed in the wrong direction, to try to provide 
additional information and input to the process.
    So our belief is the sum of all of that is, we think the 
process is working better, and as I said in my testimony, it is 
not a perfect process, but we are making improvement over time, 
and it is worth pointing out it is still a relatively new 
process. We have not been at that for very long. I think we 
have learned a lot, and we will continue to apply what we have 
learned and continue to try to make it better.
    Mr. Issa. I appreciate that, and we are going to 
undoubtedly do a second round, but I want to ask one quick exit 
question of Mr. Bair and Ms. Castellano.
    I have noted that in 2001, basically you were paying 
roughly $1.80 a pound for methyl bromide. In 2002, that doubled 
to about $3.50, and I understand that currently it is about $7 
a pound.
    I am constantly being told by providers or potential 
providers of alternatives that they are cost-effective, that 
their alternatives are reasonably priced or are reasonably 
close in total cost to methyl bromide.
    The interesting thing was that I started this process in 
about 2002, when it had just jumped up to about $3.50, and they 
said they were close. This year, they are still saying they are 
close, and you have a $7 methyl bromide.
    Could you just give us your view of--and obviously, I 
understand that if they worked equally well, you would probably 
be using them regardless of price. But on those which we are 
being told are alternatives in some narrow or sometime use, can 
you give us sort of an understanding of the price points? 
Because the estimation that I have is that methyl bromide will 
double again in the next year or two, that inherently as there 
is a reduction in who is making it and so on, the price is 
going to spiral upward.
    Mr. Bair. I think that----
    Mr. Issa. I hate to get into price here.
    Mr. Bair. No, but I think your point is a valid one because 
despite, you know, the comments that Mr. Doniger has made about 
stocks, Econ. 101 would suggest that the doubling of the price 
of methyl bromide in the last 3 or 4 years would suggest that 
those stocks aren't all that significant. The prices have 
quadrupled since the baseline year, and as you pointed out, 
doubled in the last 3 years. And that is also contrary to what 
we continually hear from the U.S. EPA, who say, Gee, you know, 
these stocks must be dramatically large because the price of 
methyl bromide is going down. And that does not fit with what 
anybody in the industry or any of the applicators know to be 
true. The price, in fact, is going up and has gone up 
dramatically because we are producing less of it--and, frankly, 
using far less of it. So the market is a tiny sliver of what it 
was, you know, a few years ago.
    Mr. Issa. Ms. Castellano.
    Ms. Castellano. I think that is a good point, but there is 
a misconception that we are using methyl bromide because it is 
the cheap alternative and we do not want to get into other 
alternatives. That is absolutely not true. If there was an 
alternative out there that worked for us, we would absolutely 
use it. In our case, it costs now upwards of $2,000 an acre to 
fumigate a field with methyl bromide, and that is before we 
have put anything in the ground, grown it, and processed it.
    So it is not a cheap product. It is just the only thing we 
have to use. Some of the alternatives that have been suggested 
aren't good enough. They also require two, three, five 
applications, and there is time that has to be put between 
those applications before we can put our crop in the ground. We 
cannot do that. And it is also in many situations not safe for 
the workers to be applying an alternative four or five times, 
whereas the methyl bromide is one time.
    So, absolutely, the price is getting out of control, but it 
is still our only alternative out there, and we have to keep 
using it.
    Mr. Bair. Also, Mr. Kucinich when he was here, he 
referenced organic, and, you know, that is a growing segment of 
the market. There have been mills that have attempted to use 
environmentally friendly alternatives such as high heat, for 
example. I am aware of a mill in New York State that used high 
heat and caused significant structural damage to the facility, 
which then was very expensive to fix.
    We know high heat kills insects. Cereal plants have been 
using it for 50 years to kill insects. But we do not generally 
have the capacity in a flour mill to turn the heat up to 140 
degrees and hold it there for 24 hours in order to kill 
insects. It can be done. It is extremely expensive, and there 
are other considerations, such as structural damage to your 
facility, that cause safety considerations.
    Ms. Castellano. Congressman Issa, could I also make a 
comment on the comment that was made about organic 
strawberries?
    Mr. Issa. Sure.
    Ms. Castellano. Being from California and discussing 
strawberry growers in California, we are cut flower growers. 
But we are surrounded by strawberry growers, and there tends to 
be a lot of comments made about organic strawberry growers in 
California. And I want to clarify something for everyone to 
understand. When strawberry growers claim that they are 
organic, that always doesn't mean exactly what we think it 
means. What is happening to strawberry growers in California on 
a large level--I am not saying it--it is not all 60 of the 
growers, but plugs are being grown in South America. They are 
being grown in Mexico. They are being grown in Guatemala. They 
are being grown--and what plugs are in the agricultural 
industry is a plant is grown from a seed somewhere else. You 
wait until you actually have a plant. You relocate it and plant 
it in a different farm.
    What is happening for strawberry growers at a tremendous 
rate in California is plugs in Mexico and Guatemala, being 
highly fumigated with methyl bromide and other chemicals that 
EPA does not allow to be used here in the United States, is 
producing a plant that is then brought to California, planted 
in California ground, and then is organic in California ground.
    So when we say someone is an organic grower, we need to be 
clear if that plant has been organic from day one or if the 
California ground that it is growing in is organic.
    So I just want to clear up that misconception that often 
gets confused in this discussion.
    Mr. Issa. Thank you.
    Ms. Watson.
    Ms. Watson. I again want to thank you, Mr. Chairman, for 
holding this hearing so we can have these open discussions.
    I would like to address my comment to Mr. Doniger, and to 
the rest of the panel, I want you to know that for 17 years, I 
chaired the Health and Human Services Committee in California 
in the Senate. And the last 3 years of my tenure there, we had 
methyl bromide debates in front of the committee, and every 
time the issue came--and we had them in a room that held 750 
people. A great many of them were advocates, a great many of 
them were critics. And when all the facts were laid in front of 
the committee of nine people, they voted the methyl bromide 
bill down. It was done three times. Maybe we spent 124 hours, 
maybe more.
    On the last day of the session, the bill was pulled out of 
my committee at 4 a.m., taken up by the pro temp of the House, 
and let out. I resigned my chairmanship because I was 
thoroughly convinced that the public's interest was not taken 
into consideration. It was the economic interest of the growers 
alone.
    What I was striving for was a balance between the two, 
because as Chair of Health, I wanted to see policy pass out of 
my committee that was in the best interest of the largest 
number of people.
    So my questions go to you, Mr. Doniger, with that 
background, and remember what my interest is: Health first, and 
then balancing the health and economic benefits second. What 
impact does a large amount of exemptions have on the farmers 
who try out the alternative chemicals or pest control 
techniques and on the companies that make them?
    Mr. Doniger. Well, I think what is happening is a major 
discouragement to those who try the alternatives and those who 
try to provide the alternatives. And let me give as an example 
and a contrast how the CFC phaseout worked out. There were firm 
deadlines and companies that tried--that went into the 
alternatives, either as users or as providers, counted on the 
phaseout deadlines sticking. And they did stick and the price 
went up somewhat for the old chemical, and the need went up for 
the new chemical, and it created the opportunity for 
entrepreneurs, both in the users and the producers, to come up 
with these alternatives. And it worked very well. We had an 
almost complete phaseout of CFCs in less than the 10-year 
period allowed for the original phaseout.
    What is happening with methyl bromide is that the rug is 
being pulled out from under the providers of the alternatives 
and also from under those who experiment with the alternatives.
    Ms. Watson. Would you clarify? When you say the rug is 
being pulled out, who is pulling the rug out?
    Mr. Doniger. When the deadlines are extended by way of 
granting large exemptions, the message that is sent to the 
users of the products is stick with the old, you don't need to 
change. And the market prices are not there for the 
alternatives.
    So I will give you an example from the milling industry and 
how this is working out right now in the 2006 rules that EPA 
just issued. I am sure Mr. Bair will have his own perspective 
on this. Sulfuryl fluoride is a chemical that is now registered 
by the EPA, and in all or virtually all the States, for use in 
mills and the other food-processing facilities to kill the bugs 
as an alternative to methyl bromide.
    Now, in my opinion, EPA should have said, ``now that 
sulfuryl fluoride and a list of other materials that are in Mr. 
Wehrum's testimony are available for that set of uses, we don't 
need methyl bromide anymore, let's give them a year, maybe 2 
years, and end the use of methyl bromide in that category of 
structural fumigation.''
    Instead, what EPA said was: How long will it take sulfuryl 
fluoride to penetrate the market if there is no methyl bromide 
phaseout? And the answer EPA came up with was they would make 
15 percent of the market inroads each year. So it would take, 
15 percent a year, 8 years for sulfuryl fluoride to replace 
methyl bromide, and that is the length of time EPA has 
indicated it is prepared to leave methyl bromide in place for 
the structural fumigation.
    So it is backward. Instead of the phaseout driving a faster 
penetration of sulfuryl fluoride, it is holding back the 
penetration of sulfuryl fluoride because it is protecting those 
who are using methyl bromide and supplying methyl bromide and 
letting them continue with business as usual. That is not how 
we did it with CFCs. If we had done it that way with CFCs, we 
would still be stuck with CFCs.
    The way to get rid of these chemicals in an orderly way is 
to set a phaseout schedule and stick to it and reward those who 
try the alternatives and provide the alternatives instead of 
undercutting them.
    Ms. Watson. Let me then go over to Mr. Wehrum. You are 
representing the EPA. The United States led the international 
effort to save this protective ozone layer that we are so 
concerned about through the development of the Montreal 
Protocol. Right?
    Mr. Wehrum. Correct.
    Ms. Watson. OK. And since President Reagan, every President 
has upheld our commitment under this treaty, which has been 
widely acclaimed as the most successful environmental treaty 
ever, and apparently it is showing some results.
    In previous hearings, administration witnesses have 
affirmed that President Bush also strongly supports the treaty. 
In 2003, witnesses from both EPA and the State Department 
stated that they did not believe any changes to the Montreal 
Protocol or current law were necessary.
    Now we have a bill, H.R. 1257. Will the administration take 
a position in opposition or support of that bill? Or will they 
violate their commitments under the treaty? Do you have any 
idea?
    Mr. Wehrum. The administration has not taken a position on 
that bill, Congresswoman.
    Ms. Watson. Has the administration seen the bill?
    Mr. Wehrum. Yes, ma'am. Yes, Congresswoman.
    Ms. Watson. Could you indicate to this committee, since we 
are holding this hearing, just where the administration is 
leaning on it? Could you do that for us?
    Mr. Wehrum. I am unable to do that today, Congresswoman.
    Ms. Watson. No, not today. I mean could you gather that 
information, if you can, and inform us here at the committee?
    Mr. Wehrum. I am certainly willing to consult with my 
colleagues in the administration and determine if we can 
develop a statement on the legislation. I am willing to do 
that, Congresswoman.
    Ms. Watson. Well, I again want to commend the Chair because 
these are the kinds of oversight hearings we need to have so we 
can be on the same page with our discussions, because remember, 
this is an international protocol we are talking about, and 
that is why I was asking Mr. Doniger who, you know, is 
responsible. And I don't know whether the administration is in 
accord with H.R. 1257 or they have other changes. But we would 
like to have some indication of where they stand on that.
    H.R. 1257 would amend the Clean Air Act to provide that for 
2007, the amount of methyl bromide allowed for critical uses 
would be equal to the amount requested by the United States at 
the international negotiations. And this is more methyl bromide 
than the parties to the Protocol authorized for the U.S. 
critical use for that year. And if we adopt this bill as law, 
then we will be in violation, so that is why we need some 
indication up front as to where the administration is coming 
from. We would appreciate any kind of feedback that you could 
give us.
    If we were to violate the Montreal Protocol, isn't it 
likely that other countries will also feel free to do that? If 
we do not comply, why should they? And we do know--and you are 
going to provide us with the list of those countries, 
particularly developing countries, that are not signees to the 
Protocol.
    So I wanted to throw that out to you so when you report 
back to us, we can have maybe a little clearer picture.
    I have a couple more questions, Mr. Chairman, if you----
    Mr. Issa. Go ahead. Get it off your chest.
    Ms. Watson. OK. Since we are a party to the Montreal 
Protocol and it has been since the time of President Ronald 
Reagan signed onto this. Now, if H.R. 1257 were enacted, it 
would certainly place the United States in noncompliance. What 
I would like to see, Mr. Chairman, is that we hold more of 
these hearings. I think the representative Ms. Castellano makes 
a point when she clarifies what we mean by organically grown. 
Is it the soil that pesticides have been spread on here, or are 
they from countries that are in noncompliance?
    Mr. Issa. It is like the American flag with ``Made In 
China'' on it.
    Ms. Watson. Exactly. I think these are things that we need 
to know and we need to have this information when we discuss 
public policy. And so I hope we will have followup hearings to 
this, too.
    This is the last question to Mr. Doniger. The United States 
has an international reputation as a leader, and as a leader in 
protecting the ozone layer. What is your view if such a bill as 
H.R. 1257 were signed into law? What would happen?
    Mr. Doniger. Well, I do think it would place the United 
States in violation because instead of following the process 
for exemptions, we would simply be saying we get whatever we 
want, and that is not in compliance with our treaty 
obligations.
    I think more generally the United States has hurt its 
reputation in the past several years by the vigorous pushing of 
these exemptions without full disclosure of information. The 
stockpile condition, for example, is a requirement that the 
parties imposed that the United States agreed to that there not 
be production to the extent that the stocks were sufficient to 
meet the need. The U.S. Government has not disclosed the 
stockpile information to the public here, to the Congress here, 
except in one veiled letter, to us, or to other countries. And 
it is hurting the U.S. perception of leadership and 
responsibility in the eyes of other countries, and this has 
ramifications in other areas of our foreign policy as well.
    Ms. Watson. Let me just intervene here and I am going to 
address this question to the Chair and maybe to the attorney. 
Is there any reason why this information needs to be top secret 
and not shared with us here in Congress?
    Mr. Issa. No. I am informed that----
    Ms. Watson. It is a privacy issue?
    Mr. Issa [continuing]. Asking people what they own, you 
know, exceeds the normal request without a purpose.
    If I can actually clarify something with the EPA, no matter 
how much you have in your stockpile, if you do not have a use 
permit, you cannot use it. Isn't that correct? So a stockpile 
becomes worth zero if--for example, the people who do not have 
critical use exemptions, they cannot use up their stocks just 
because they happen to have it. Isn't that correct?
    Mr. Wehrum. That is not correct, Mr. Chairman.
    Mr. Issa. They can actually continue--does that mean that 
there are people who may be using methyl bromide without a 
critical use exemption simply because they have stockpiles. Is 
that correct?
    Mr. Wehrum. That is correct.
    Mr. Doniger. It is not that they have the stockpiles. They 
are purchasing the stockpile from the same suppliers. 
Generally, farmers do not keep their own stockpile. And the 
same I believe is true of the millers and other users. They buy 
the stocks, they buy the material with the service from 
applicators.
    Mr. Issa. With the gentlelady's indulgence, that I think is 
a question that where the EPA stands on it and how you are 
going to ensure that if we say that we are only using X, that 
we not be using X under the critical use and Y for other 
purposes. I certainly think that this is something that on a 
bipartisan basis we would like to know what your program is to 
prevent that in the future.
    I am not sure that I need to know how much somebody has in 
their garage. What I do need to know is: Is it being used? And 
if so, why would we continue to tolerate people who no longer 
have a valid use for it because there are alternatives or 
because there has been a complete phaseout in their category, 
and yet they are still buying and using it? I think that flies 
in the face of Mr. Bair and Ms. Castellano saying we are doing 
all this paperwork to justify why we still need it and we 
welcome an opportunity to use an alternative. That is in the 
system. That is in the Protocol four Presidents have all signed 
onto. But I don't think anyone has signed onto this back door 
that Mr. Doniger talks of.
    Mr. Wehrum. If I may, Mr. Chairman, a couple of 
observations. One is the amount of stocks is finite and is 
diminishing over time. We have, in fact, as an agency collected 
information on the amount of stocks in an effort to understand 
how much there is and how that number changes over time. But we 
are also bound by very strict confidentiality requirements as 
it applies to business confidential information.
    Mr. Issa. But you know and you cannot tell us?
    Mr. Wehrum. The matter is actually currently under 
litigation. The Natural Resources Defense Council sought this 
information through a Freedom of Information request. Certain 
of the businesses that supplied information contested the 
agency's initial determination. Our initial determination was 
that the aggregate number was a number that we believed that we 
could share and not violate our confidentiality obligations. 
But certain companies that provided some of the underlying 
information disagreed with that, and so the matter is currently 
a matter of litigation. The----
    Mr. Doniger. If I----
    Mr. Wehrum. Please, let me finish. The last thing I will 
say is, it is not a shock that stocks are out there. That is 
the way the Montreal Protocol has operated. A good example is 
on the refrigerant side where there are plenty of cars on the 
road that use banned CFCs in their air conditioners, and if you 
have one of those cars today, you can go buy replacement 
refrigerant off the shelf. That is not illegal. It is not 
wrong. There was an expectation that the amount in stock would 
diminish over time, but that there was a reason in that case to 
allow people to continue to maintain cars that were using the 
banned materials.
    Mr. Issa. The U.S. Air Force is still flying our Lear 31s 
or 35s that we bought in the 1970's, and they still have old 
air conditioners.
    Mr. Wehrum. So the fact of the existence of stocks is not 
unusual or unprecedented, just in terms of how this treaty and 
how this Protocol is operated, and it has been a factor in our 
decisionmaking. So it is an issue that we are well aware of.
    Mr. Doniger. Two quick points, if I may.
    One, the EPA and the NRDC are in agreement that the total 
number of the stockpile is not confidential, but until this 
litigation can be resolved--and it is litigation brought by two 
of the suppliers, who are not prosecuting their cases, they are 
doing nothing except putting a hold--it is the equivalent of a 
senatorial hold on the disclosure of this information.
    Mr. Issa. Thank you for saying Senate.
    Mr. Doniger. Yes. [Laughter.]
    Mr. Doniger. And the producers and distributors, who never 
appear before these hearings, are quite content to keep the 
information secret, not just from us, not just from other 
governments, but from the users, because it makes it easier to 
charge higher prices if you can convey to the users and 
everyone else the perception that the material is really 
scarce.
    I have a document from one of these companies, which I will 
make available to the committee, which says use the new 
production first, keep the stocks in reserve, pass the stocks 
over to the next year--absolutely opposite of normal inventory 
practices, which is rotate your stock, use the old stuff first. 
This is an evasion----
    Mr. Issa. Unless you are in the wine business.
    Mr. Doniger. That is true. And methyl bromide doesn't get 
better as it gets older. So the other point is that it is true 
that stocks of other chemicals are--it is not that the stocks 
are regulated. It is that the new production is supposed to be 
limited to the amount that cannot be supplied from the stocks. 
With CFCs in older air conditioners, we do not have any new 
production, and people do use the stocks to meet the needs of 
old cars and old Lear jets. But with methyl bromide, you are 
supposed to take the stocks into account and reduce the amount 
of new production so that it does not increase beyond what is 
really needed--not double what is needed, and so that is the 
error here. That is why we have gone to court. We are expecting 
a decision from the court of appeals any week now, which would 
address the stocks issue, the excess assessment of use, and 
also the data disclosure issue.
    Mr. Bair. Mr. Chairman, may I speak----
    Mr. Wehrum. Mr. Chairman, if I may----
    Mr. Issa. Certainly, as long as we let----
    Mr. Bair. Mr. Doniger is getting liberal use of your time, 
and I would like to have an opportunity to respond at some 
point.
    Mr. Wehrum. Just, Mr. Bair, with your indulgence.
    Mr. Issa. The Government first.
    Mr. Wehrum. Just a point. The U.S. Government, of course, 
does not agree with everything that Mr. Doniger just said. 
There is litigation on many of the points that he just 
described related to the rule that we promulgated to adopt the 
critical use--the CUE process within our regulations and to 
adopt the first of the critical use exemptions. So we have 
defended ourselves in court, and we look forward to a decision 
on the merits by the D.C. Circuit.
    Ms. Watson. Let me just----
    Mr. Issa. Mr. Bair, and then----
    Ms. Watson. Yes, let me just comment on what he just said. 
That is the reason why I asked if you could report back to us, 
because we don't know where the U.S. administration stands on 
the changes that would be required in the law. So if you can 
clarify, just give us information. And when I asked about the 
stockpiles, I was talking about the overall supplies. I am not 
talking about individual users and individual inventories. I 
just wanted to know--and we do have a chart. If you don't agree 
with everything that Mr. Doniger says, maybe you can put out 
your own chart just for our information. Is that something you 
can do?
    Mr. Wehrum. As long as it does not violate our 
confidentiality obligations under the law.
    Ms. Watson. Oh, come on. I just explained that. Don't give 
me that kind of rhetoric. What I said is--you know, there is 
confidential information. That is not what I am asking for. Can 
you give us the figures of the overall supply, stockpile?
    Mr. Issa. That is what is in litigation, is what he is 
saying. That is actually what is in litigation.
    Ms. Watson. So you don't go along with what he has here?
    Mr. Wehrum. Well, the U.S. Government's position was that 
the aggregate number we determined did not need to be 
considered confidential business information.
    Ms. Watson. OK, good. Can you give us what you have?
    Mr. Wehrum. No, ma'am, because our position was challenged 
in court, and we have to await the decision of the judge before 
we can determine how to proceed.
    Mr. Doniger. I have to wait. I am not sure you have to 
wait.
    Mr. Issa. Well, look, I am going to sort of take a little 
bit of liberty here. I have heard that you expect it within a 
couple of weeks. We will make every effort to leave the record 
open, but even if it is already closed, I assure you we will 
welcome the information when it becomes available.
    I will take the liberty as chairman of saying that if it is 
not forthcoming in a reasonable period of time--in other words, 
if the court stalls--then I do believe it is within the 
interest of this subcommittee that we have a separate fact-
finding on the stockpiles. I think we have learned enough today 
about the stockpiles that, although I do agree that maybe the 
Protocol is spending too much time on stockpiles, when it comes 
to this subcommittee ensuring that those who have a legitimate 
use for methyl bromide are not simply getting it out of 
substantial stockpiles or, what I think I heard Mr. Doniger 
say, the potential that there is an excess production based on 
excess justifications for critical use that then may 
potentially go sideways through stockpiles into other people's 
hands. This subcommittee is interested in the efficiency of 
Government, the effectiveness of Government, and the adherence 
to the Montreal Protocol. This hearing was called in no small 
part because it is the belief of this subcommittee--this 
chairman, at least--that, for example, the EPA's taking until 
January 31st when you had 6 months to come up with a rule put 
private enterprise at an unfair disadvantage because you 
literally had fumigators who were not able to do what they 
should be able to do, or at least were afraid they would be 
fined. That should not be the way we do business.
    It is the intent of this subcommittee to ensure that while 
we adhere to the Montreal Protocol, on the flip side, the other 
parties to the Montreal Protocol adhere to the letter of the 
law as well. I think that is where Ms. Castellano particularly 
says it, which is these exemptions are in the Protocol, and if 
you don't mind, I am going to close my question, Mr. Doniger, 
specifically: I am very much of the right age and background to 
understand when we did away with both our aerosol cans that 
were ozone-depleting and particularly with freon. When an 
alternative existed, the only problem was having machinery that 
then worked with the alternative, because, unfortunately, old 
air conditioners were not tolerant of the new freon, you know, 
Freon 12 and so on.
    Today, wouldn't you agree that although we have made a lot 
of progress, science has not produced a universal alternative 
to methyl bromide for all uses from a chemical standpoint, 
leaving 140-degree heat in a factory out? Isn't that sort of 
the state today?
    Mr. Doniger. Well, I agree this was true with CFCs as well, 
that you had one chemical that was replaced by a suite of 
chemicals. Some of them were not even in the same family of 
chemicals. And that is what is happening--that is what has 
happened with each ozone-depleting chemical, and that is what 
is happening with methyl bromide.
    So although this chemical iodomethane is pretty close, if 
it does get registered, to a drop-in alternative, it isn't 
necessary to have a drop-in alternative, and we don't expect to 
have a single one that covers the field. What we do think is 
that you can pick off niches of the market, niche by niche, and 
get down to the hard cases much faster than we have.
    Mr. Issa. We look forward to working with you, the other 
panelists, and other contributors to this, to find those 
alternatives and to ensure--and particularly for the folks in 
industry here today--that this subcommittee will do everything 
it can to streamline the process and to ensure that the 
exemptions continue to be granted in a timely--well, become 
granted in a more timely-fashion to the extent that there is 
not an alternative.
    I think the gentlelady and myself would both join in saying 
when there is an alternative, we look forward to your companies 
embracing it at the earliest possible time and would also want 
to be just as strong a watchdog on compliance as we are on the 
agencies.
    The gentlelady has one more round.
    Ms. Watson. I would like to ask Mr. Doniger if he could do 
a little research on my behalf. As I mentioned, in my 
California experience we had farmers come in, and these were 
food farmers. These were not florals. It might be a whole 
different story. But if you could do a little research and see 
what the alternatives some of the farmers in California are 
using to methyl bromide, I would like to have that information, 
if you would.
    Thank you very much, Mr. Chairman.
    Mr. Issa. Well, thank you, Ms. Watson. I will dispense with 
a full closing statement and simply thank our witnesses for not 
only thoroughly delightful opening statements, but I think a 
lively discussion that took us not just to the issue that we 
came here for, but as I requested, I think you have done a good 
job of opening up additional areas for this subcommittee to be 
involved in.
    I must admit I am not sure my authority over organic 
farming is as comprehensive as I would like, but I will speak 
to the chairman about whether we have that, because I do 
believe that we have to make sure that we are a committee of 
facts, and if there are organic alternatives, I am thrilled. 
But if we are simply manufacturing in another country using 
other chemicals and then claiming something is possible, I have 
been down the road in the electronics business. For many years 
I had people who said ``Made In America,'' but they imported a 
complete stuffed board and then put it in a box in the United 
States and proudly said ``Made In America.'' That is not the 
right way to increase American jobs. It is certainly not the 
right way to justify organic agriculture.
    So as I said earlier, we will hold the record open for at 
least 2 weeks. I will make every effort to hold it open until 
we can include an aggregate stockpile figure. I would welcome 
all of you to give us your additional thoughts separately on 
the stockpile situation, and particularly on whether or not 
there is a substantial amount of clandestine use outside of 
critical use exemption. This committee has very much 
supported--at least the chairman has supported--critical use 
being retained, but that is the front door. We will be 
interested, and with the gentlelady's permission, I expect we 
will be following up on making sure that back-door use--in 
other words, ozone-depleting that is not critical and 
required--is reduced.
    And with that, I thank you and this hearing is adjourned.
    [Whereupon, at 3:33 p.m., the subcommittee was adjourned.]
    [The prepared statement of Hon. Dennis J. Kucinich and 
additional information submitted for the hearing record 
follow:]
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