[Senate Hearing 109-1049]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 109-1049
 
    EPA'S PROPOSED REVISIONS TO THE PARTICULATE MATTER AIR QUALITY 
                               STANDARDS
=======================================================================


                                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 NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 13, 2006

                               __________

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


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

                               __________

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED NINTH 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            JOSEPH I. LIEBERMAN, Connecticut
LINCOLN CHAFEE, Rhode Island         BARBARA BOXER, California
LISA MURKOWSKI, Alaska               THOMAS R. CARPER, Delaware
JOHN THUNE, South Dakota             HILLARY RODHAM CLINTON, New York
JIM DeMINT, South Carolina           FRANK R. LAUTENBERG, New Jersey
JOHNNY ISAKSON, Georgia              BARACK OBAMA, Illinois
DAVID VITTER, Louisiana
                Andrew Wheeler, Majority Staff Director
                 Ken Connolly, Minority Staff Director
                              ----------                              

     Subcommittee on Clean Air, Climate Change, and Nuclear Safety

                  GEORGE V. VOINOVICH, Ohio, Chairman
CHRISTOPHER S. BOND, Missouri        THOMAS R. CARPER, Delaware
JIM DeMINT, South Carolina           JOSEPH I. LIEBERMAN, Connecticut
JOHNNY ISAKSON, Georgia              FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana              BARACK OBAMA, Illinois
                            C O N T E N T S

                              ----------                              
                                                                   Page

                             JULY 13, 2006
                           OPENING STATEMENTS

Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri.......................................................    10
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..     7
DeMint, Hon. Jim, U.S. Senator from the State of South Carolina..    14
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     5
Isakson, Hon. Johnny, U.S. Senator from the State of Georgia.....    15
Lautenberg, Hon. Frank, U.S. Senator from the State of New Jersey    13
Lieberman, Hon. Joseph I., U.S. Senator from the State of 
  Connecticut, prepared statement................................    53
Voinovich, Hon. George V., U.S. Senator from the State of Ohio...     1

                               WITNESSES

Alford, Harry C., president and CEO, National Black Chamber of 
  Commerce.......................................................    38
    Prepared statement...........................................    68
    Response to an additional question from Senator Voinovich....    70
Christopher, William F., executive vice president and group 
  president, Aerospace, Automotive and Commercial Transportation, 
  Aloca..........................................................    43
    Prepared statement...........................................    70
    Response to an additional question from Senator Voinovich....    74
Gould, Larry J., chair, Lenawee County Board of Commissioners, 
  Lenawee County, MI.............................................    31
    Prepared statement...........................................    61
    Responses to additional questions from Senator Voinovich.....    63
Heiskell, BeBe, commissioner, Walker County, GA..................    32
    Prepared statement...........................................    65
    Responses to additional questions from Senator Voinovich.....    66
Paul, John A., supervisor, Regional Air Pollution Control Agency, 
  Dayton, OH.....................................................    29
    Prepared statement...........................................    58
Schneider, Conrad, advocacy director, Clean Air Task Force.......    40
    Prepared statement...........................................    75
    Responses to additional questions from Senator Inhofe........   119
Wehrum, William, Acting Assistant Administrator, Office of Air 
  and Radiation, U.S. Environmental Protection Agency............    17
    Prepared statement...........................................    54

                          ADDITIONAL MATERIAL

Article, To the Point, Talking Points for Manufacturers, July 
  2006...........................................................   130
Chart, Stronger Standards Mean Fewer Deaths in 9 Cities Studied..   129
Letters from concerned public and business officials; 
  associations from both sides of the aisle including Governors, 
  State representatives, county commissioners, mayors; and many 
  others that are concerned about the proposed new rule.........146-243
Memorandum, Congressional Research Service, December 30, 2005...131-145
Report, Clean Air Task Force, December 13, 2004.................125-128


    EPA'S PROPOSED REVISIONS TO THE PARTICULATE MATTER AIR QUALITY 
                               STANDARDS

                              ----------                              


                        THURSDAY, JULY 13, 2006

                               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 9:30 a.m. in 
room 628, Dirksen Senate Office Building, Hon. George Voinovich 
(chairman of the subcommittee) presiding.
    Present: Senators Voinovich, Inhofe, Bond, DeMint, Isakson, 
Carper, and Lautenberg.

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

    Senator Voinovich. The committee will come to order. Good 
morning, and thank all of you for coming.
    Today's hearing is the first in Congress on the 
Environmental Protection Agency's Proposed Revisions to the 
Particulate Matter Air Quality Standards. We are focusing on 
what EPA proposed, what it means for the Nation. Next 
Wednesday, I have asked Chairman Inhofe to hold a second 
hearing at the full committee level instead of this 
subcommittee on the science and risk assessment behind the 
Agency's proposed revisions.
    This is a very important issue with broad ranging impacts. 
It is at the core of what I focused in this committee, the 
Senate and throughout my career. It gets back to harmonizing 
our energy, environment and economic needs. I think that our 
refusal to look at cost benefit analysis, peer review, 
alternative ways of getting things done, has cost this country 
dearly. We just can't keep going the way we are. It is not 
sustainable.
    Before discussing EPA's proposal, it is very important that 
we put this hearing into context. First, our air is getting 
significantly cleaner. This chart is there, it is very clear. 
That is that in spite of the fact that we have had a 187 
percent increase in gross domestic product, 171 percent 
increase in the miles traveled, energy consumption has been up 
47 percent, population up 47 percent, we have had a 54 percent 
reduction in emissions from the six principal pollutants. Many 
Americans are not aware of that.
    Second, our Nation's high energy prices are having a 
devastating impact across the United States. We have the 
highest natural gas prices in the world, impacting families who 
depend on it to heat their homes and businesses, and use it to 
make their products. I have to tell everybody and this room and 
this committee, every time I go home, people are screaming 
about their gas costs. They know they are down now, but this 
winter--we were lucky, we had a light winter. These are a lot 
of poor people who can't afford it. Even the local restaurants 
are complaining, people aren't coming in. Between the high 
natural gas costs and gasoline prices, it is having a 
devastating impact on just the ordinary citizen in this 
country.
    We have lost more than 3.1 million jobs. In my State, we 
have lost 200,000 manufacturing jobs, partially due to high 
natural gas costs. Third, EPA has designated 495 counties 
across the Nation, 38 of them in my State, as in nonattainment 
of the existing particulate matter and ozone air quality 
standards. States are working now to develop implementation 
plans to comply with these standards. As a former Governor who 
brought Ohio's counties into attainment, I know firsthand that 
this is an extremely complicated and resource-intensive task. 
This subcommittee has examined the great challenge associated 
with implementing these standards with hearings that I held in 
April 2004 and November 2005.
    But here we go again. EPA has proposed to move the 
goalposts on State and local communities in the middle of this 
process by changing the particulate matter standards. I am 
going to focus not on coarse, but fine particulate matter, 
where EPA proposed to reduce the daily standard from 65 
micrograms per cubic meter to 35 and retain the annual 
standards at 15.
    Under EPA's current standards, there are 208 nonattainment 
counties. There they are right there. If EPA lowers their 
annual standard to 14, let's show chart 3, it shows 631 
counties that could be in nonattainment under such revision. I 
would like to admit that the information we got from that was 
prepared by the American Petroleum Institute. So I want 
everybody to understand that. But Mr. Wehrum, I would love to 
see your chart. Your chart differs from this. But I can 
guarantee you that there are a whole lot more counties with 14 
than there are currently today in nonattainment.
    EPA claims the Federal clean air rules, such as the Clean 
Air Interstate Rule and the new diesel fuel engine regulations 
will bring most of the counties into attainment without local 
effort. This is exactly what EPA told us with the current 
standards. But we have seen that it ignores reality. I was 
told, even by the guy that runs CEQ, Jim Connaughton, don't 
worry.
    Now, my EPA director, Joe Koncelik, says we have to worry. 
By 2010, we are in deep trouble in our State, because we are 
not going to be able to meet even the current standards that 
have been set. Additionally, nonattainment designation 
threatens highway funding and it is going to push us into more 
use of natural gas and increase our electric rates.
    Further, the Federal clean air rules will play only a small 
role in the designation of nonattainment areas and in helping 
communities meet the standards. Again, I have been told that 
these new regulations, the CAIR rules and everything else are 
going to help out. But the attainment is going to come out 
before those rules even really take effect. Then when you 
determine the attainment deadline at the end of 2015, that is 
when the other set of these are supposed to take effect. In 
effect, what EPA is saying about all these things are going to 
mitigate the problem, don't worry, I don't agree with it. It 
doesn't make sense.
    This is frustrating, but the truth is that we do not know 
what impact revising the standards is going to have on this 
country. Neither does the EPA. The Agency has released a draft 
regulatory impact that only looks at five cities. I will insert 
into the record comments from several industries that because 
of the uncertainty project the cost of EPA's proposal to be as 
low as $20 billion and as much as $60 billion, $20 billion and 
as much as $60 billion. It would be the most expensive Federal 
regulation in the history of the Office of Management and 
Budget.
    EPA says that we should ignore this analysis, because they 
will release a completely different one when the final decision 
is made. I am astounded that EPA is working on this major rule 
behind closed doors and we will not know what impact it will 
have until the final decision is released.
    I will conclude with three points. I understand the law 
requires EPA to review the air quality standards every 5 years, 
and that a court settlement requires a final decision by 
September of this year. However, the law and the consent decree 
do not require EPA to change the standard. In fact, I would 
like to insert into the record a report from the Congressional 
Research Service on several questions that Chairman Inhofe and 
I have asked. According to CRS, EPA has conducted multiple 
reviews of the National Ambient Air Quality Standards since 
their establishment in 1971. The primary health-based standards 
have been strengthened twice, retained six times and relaxed or 
revoked on three occasions.
    [The referenced document referred to may be found on page 
131.]
    Next I want people to understand that the Clean Air Act 
gives the EPA Administrator the discretion to set the standard. 
Let me quote from the CRS report again: ``The Administrator is 
given clear discretion: the requirements are conditioned by the 
phrase in the judgment of the Administrator.'' Last, this rule 
will have a major impact on this Nation and the people that are 
concerned.
    After all the members give their opening statements, I am 
going to insert letters and statements from Governors, mayors 
and other elected officials and various groups expressing 
concern about revising the particulate matter standards at this 
time. I look forward to hearing from the witnesses on this.
    [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 for 
coming.
    Today's hearing is the first in Congress on the Environmental 
Protection Agency's proposed revisions to the particulate matter air 
quality standards. We are focusing on what EPA proposed and what it 
means for the Nation. Next Wednesday, I have asked Chairman Inhofe to 
hold a second hearing at the full committee level instead of in this 
subcommittee on the science and risk assessment behind the Agency's 
proposed revisions.
    This is a very important issue with broad ranging impacts. It is at 
the core of what I have focused on in this committee, the Senate, and 
throughout my career we must harmonize our energy, environment, and 
economic needs.
    Before discussing EPA's proposal, it is very important that we put 
this hearing into context. First, our air is getting significantly 
cleaner. [CHART 1] Since 1970 while our Gross Domestic Product, vehicle 
miles traveled, energy consumption, and population have increased 
substantially emissions of the main pollutants of concern have been 
reduced by 54 percent.
    Second, our Nation's high energy prices are having a devastating 
impact across the United States. We have the highest natural gas prices 
in the world impacting families who depend on it to heat their homes 
and businesses that use it to make their products. The United States 
has lost more than 3.1 million and my State of Ohio has lost nearly 
200,000 manufacturing jobs since 2000, due in large part to high 
natural gas prices.
    Third, EPA has designated 495 counties across the Nation 38 in Ohio 
as in nonattainment for the existing particulate matter and ozone air 
quality standards. States are working now to develop implementation 
plans to comply with these standards. As a former Governor who brought 
Ohio's counties into attainment, I know firsthand that this is an 
extremely complicated and resource intensive task. This subcommittee 
has examined the great challenge associated with implementing these 
standards with hearings that I held in April 2004 and November 2005.
    But, here we go again! EPA has proposed to move the goalposts on 
State and local communities in the middle of this process by changing 
the particulate matter standards. I am going to focus not on coarse, 
but fine particulate matter where EPA proposed to reduce the daily 
standard from 65 micrograms per cubic meter to 35 and to retain the 
annual standard at 15.
    [CHART 2] Under EPA's current standard, there are a total of 208 
nonattainment counties. EPA's proposed revision could increase the 
number of nonattainment counties to 530. Some groups are advocating for 
a more stringent standard, and EPA is considering lowering the annual 
standard to 14. [CHART 3] This map shows the 631 counties that could be 
in nonattainment under such a revision.
    EPA claims that Federal clean air rules such as the Clean Air 
Interstate Rule and new diesel fuel and engine regulations will bring 
most of the counties into attainment without local effort. This is 
exactly what EPA told us with the current standards, but we have seen 
that this simply ignores reality.
    While Federal rules will help areas, I am concerned that EPA is 
trivializing the impact of being designated nonattainment in the first 
place. Let me quote from Cincinnati Chamber of Commerce President 
Michael Fisher at our 2004 hearing: ``Simply stated, conducting 
business in an area designated as nonattainment is more complicated, 
more time-consuming, and more costly.''
    Additionally, a nonattainment designation threatens highway funding 
and jobs because businesses will not expand or locate in such an area. 
It can also lead to higher energy costs because coal fired powerplants 
are a source of particulate matter. These emissions can be reduced by 
installing control equipment or switching to natural gas ultimately 
leading to higher electricity and natural gas prices.
    Furthermore, Federal clean air rules will play only a small role in 
the designation of nonattainment areas and in helping communities meet 
the standards. [CHART 4] As you can see, EPA is planning on designating 
areas before 2010 when the first phase of reductions will be achieved 
under these rules. The Agency has also announced that the attainment 
deadlines will be before 2015 when the second phase of reductions will 
take place.
    This is very frustrating, but the truth is that we do not know what 
impact revising the standards will have on the country and neither does 
EPA. The Agency has released a draft Regulatory Impact Assessment (RIA) 
that only looks at five cities. I will insert into the record comments 
from several industries that because of the uncertainty project the 
cost of EPA's proposal to be as low as $20 billion and as much as $60 
billion per year incremental cost which would be the most expensive 
Federal regulation in the history of the Office of Management and 
Budget.
    EPA says that we should ignore this analysis because they will 
release a completely different one with the final decision. I am 
astounded that EPA is working on this major rule behind closed doors, 
and we will not know what the impact will be until the final decision 
is released.
    I will conclude with three points. I understand that the law 
requires EPA to review the air quality standards every 5 years and that 
a court settlement requires a final decision by September of this year. 
However, the law and this court do not require EPA to change the 
standard.
    In fact, I would like to insert into the record a report from the 
Congressional Research Service on several questions that Chairman 
Inhofe and I asked. According to CRS: ``EPA has conducted multiple 
reviews of the National Ambient Air Quality Standards since their 
establishment in 1971. The primary (health-based) standards have been 
strengthened twice, retained 6 times, and relaxed or revoked on 3 
occasions.''
    Next, I want people to understand that the Clean Air Act gives the 
EPA Administrator the discretion to set the standard. Let me quote from 
the CRS report again: ``the Administrator is given clear discretion: 
the requirements are conditioned by the phrase in the judgment of the 
Administrator.''
    Lastly, this rule will have a major impact on this Nation and 
people are concerned. After all of the members give their opening 
statements, I am going to insert letters and statements from Governors, 
mayors, other elected officials, and various groups expressing concern 
about revising the particulate matter standards at this time.
    I look forward to hearing from the witnesses on this important 
issue that truly impacts our energy, environment, and economic needs.
    Thank you.

    Senator Voinovich. Senator Carper.
    Senator Carper. I think Senator Inhofe had asked to go 
ahead, out of order, and that is fine with me.

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

    Senator Inhofe. Senator Carper, I do appreciate that very 
much. I want to tell you, Mr. Chairman, and the rest of this 
committee, that this is very, very significant, what we are 
doing here today. Unfortunately, because of the Hamdan 
decision, the U.S. Supreme Court decision on detainees and the 
Uniform Code of Military Justice, I have to attend that 
hearing. However, we will have a chance to get into more 
detail, as you pointed out, on Wednesday.
    Let me also say that I appreciate, Mr. Chairman, the 
passion that you have on these issues. I know it goes without 
saying that you are probably one of the most qualified people 
on air issues that we have had. Even when you were Governor of 
Ohio, you came, when I held the Chair of the subcommittee that 
you chair now, and testified. So I know we are leaving this in 
good hands.
    Mr. Wehrum, I would make the point that I do not believe 
the science justifies ratcheting down the regulations, as I 
have told you in my office, given the estimated risk today is 
less than what was estimated in 1997 under Carol Browner when 
the current standard was set. I am also troubled that EPA has 
been selective in what studies it has chosen to give weight to 
this review, thus skewing the results by downplaying studies 
which show the current standards are sufficiently strict. I 
think you are selectively going after studies that give you the 
conclusion that you want.
    We are going to examine the science issues at the hearing 
this coming Wednesday. Today we are focused on better 
understanding the process by which the EPA makes these 
determinations. The history of the past decisions and the 
impacts caused by possible tightening standards, I believe the 
economic impacts will be very severe as the Chairman pointed 
out in his State of Ohio.
    I am troubled that EPA has not provided to the public or 
this oversight committee a comprehensive regulatory impact 
analysis. While a NAAQS review is based on health 
considerations by statute, Congress wrote the law and is 
responsible not only for overseeing its execution, but for 
evaluating whether the way it is crafted is appropriate in 
light of its unintended consequences.
    Moreover, any assessments of health benefits can only be 
made with an understanding of the economic consequences because 
there is a clear link between economic vitality and human 
health. In short, wealth is health. Poorer communities often 
suffer from inadequate infrastructure and that in turn will be 
exacerbated if these areas are designated nonattainment 
unnecessarily.
    As we have heard in the past, when electricity prices rise, 
the poor and the elderly in the inner cities, such as Chicago, 
turn off their air conditioning and scores die each summer 
because they can't afford their air conditioning. As local 
officials know all too well, the additional burdens placed on 
new manufacturing facilities discourage them from locating in 
these regions.
    As a former mayor, I know that air regulations and the 
increased control burdens that accompany them for many areas 
can be an important factor in the decisions by companies as to 
where they will be locating their facilities. In fact, we were 
both mayors at the same time, and I can assure you that we 
actually lost industries at this time. So this goes far beyond 
just the considerations that we seem to be talking about today. 
Many counties, due to the implementation of current regulations 
such as Diesel Rule, Clean Air, Interstate Rule and others will 
come into compliance with current health standards.
    Yet these areas will be designated nonattainment with the 
new standards and thus forced to impose additional controls and 
to remain unattractive for new business investments. By moving 
the goalposts, we upset the ability of these communities to 
pursue their compliance strategies and keep them in an endless 
loop that depresses their economies.
    I know some of my colleagues don't think we should be 
holding this hearing today. But it would be irresponsible for 
this committee if we did not conduct thoughtful oversight of 
not only the science and health issues, as we will less than a 
week from today, but also the potential economic impacts from 
these regulations. We have to look at both sides, and I applaud 
Chairman Voinovich for holding the hearings today.
    I would hope, Mr. Chairman, that we can look at some 
things, I find it disturbing the EPA would assume that certain 
States will violate the law. If California were to comply, what 
would they have to do? In California, many of their counties 
have been out of compliance with the current standards, and 
many more with the new standards if they are tightened. But 
nothing seems to happen. It does in Oklahoma, and it does in 
Ohio, but not in California. I think we are not getting equal 
application of these rules.
    So I have a lot of questions that I will be submitting for 
the record. Unfortunately, I do have to attend that Armed 
Services hearing. So I applaud the fact that you are holding 
this hearing, and Senator Carper, I thank you for yielding to 
me so that I can get over to another hearing.
    [The prepared statement of Senator Inhofe follows:]
   Statement of Hon. James M. Inhofe, U.S. Senator from the State of 
                                Vermont
    Mr. Wehrum, thank you for coming to testify to the committee to 
provide us with your views on the current national ambient air quality 
standards review of particulate matter and your proposal to tighten the 
current daily standard. I would make the point that I do not believe 
the science justifies ratcheting down the regulations at this time, 
given that the estimated risk today is less than what was estimated in 
1997 under Carol Browner when the current standard was set.
    I am also troubled that EPA has been selective in what studies it 
has chosen to give weight to in this review, thus skewing the results 
by downplaying studies which show the current standard is sufficiently 
strict to protect human health with an adequate margin of safety.
    But we will examine the science issues in detail during the hearing 
next Wednesday. Today, we are focused on better understanding the 
process by which EPA makes these determinations, the history of past 
decisions, and impacts caused by possible tightened standards. I 
believe the economic impacts will be severe.
    I am troubled that EPA has not provided to the public or this 
oversight committee a comprehensive regulatory impact analysis. While a 
NAAQS [pronounced naax] review is based on health considerations by 
statute, Congress wrote the law and is responsible not only for 
overseeing its execution, but for evaluating whether the way it is 
crafted is appropriate in light of its unintended consequences.
    Moreover, any assessments of health benefits can only be made with 
an understanding of the economic consequences because there is a clear 
link between economic vitality and human health. In short, wealth is 
health. Poorer communities often suffer from inadequate infrastructure 
and that in turn will be exacerbated if these areas are designated 
nonattainment unnecessarily. As we have heard in the past, when 
electricity prices rise, the poor and elderly in inner cities such as 
Chicago, turn off their air condition and scores die each summer 
because they can't afford their A/C. As local officials know all too 
well, additional burdens placed on new manufacturing facilities 
discourage them from locating in these regions.
    It is my belief that we should be judicious in selecting what 
standards we impose on our cities and States, taking into account what 
would be required to fully attain these standards by the deadline set 
by the Clean Air Act, and then enforce these standards to ensure public 
health. It makes no sense to set unnecessarily and unrealistically 
stringent requirements, but then to excuse areas which will not comply 
because it is expensive while others that take their commitment 
seriously suffer job losses and slower growth. I am thinking in 
particular of California, which has consistently failed to meet 
previous standards and has continued to receive exemptions.
    As a former mayor, I know that air regulations and the increased 
control burdens that accompany them for many areas can be an important 
factor in decisions by companies as to where to locate their 
facilities.
    Many counties, through the implementation of current regulations 
such as the diesel rule, clean air interstate rule, and others, will 
come into compliance with current health standards. Yet these areas 
will be designated nonattainment with the new standards, and thus 
forced to impose additional controls and to remain unattractive for new 
business investments. By moving the goalposts, we upset the ability of 
these communities to pursue their compliance strategies and keep them 
in an endless loop that depresses their economies.
    I know some of my colleagues don't think we should be holding 
today's hearing, but it would be irresponsible if this committee did 
not conduct thoughtful oversight of not only the science-health issues, 
as we will less than a week from today, but also the potential economic 
impacts from these regulations. We have to look at both sides and I 
applaud Chairman Voinovich for holding today's hearing.
    Thank you.

    Senator Voinovich. Thank you, Mr. Chairman.
    Senator Carper.

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

    Senator Carper. Thanks, Mr. Chairman.
    Welcome, Mr. Wehrum. It is good to see you. Thanks for 
coming back to join us, and to you and the other witnesses that 
are here today to testify, thank you for your time and for your 
testimony.
    No one disputes that we have made significant environmental 
progress since the Clean Air Act was first passed into law. But 
I would submit that our work is not over. Despite this 
progress, many areas of our country, including Delaware, have 
significant air quality problems. In Delaware, the entire State 
exceeds EPA's health standards for ozone. Northern Newcastle 
County, which is where I live, doesn't meet EPA standards for 
fine particulate matter.
    I know a lot of people want to discuss the cost associated 
with attaining these standards, and we should. We want to 
discuss whether or not meeting them would negatively impact our 
economy. I would suggest that we stop and think about another 
notion, and that is that the cost of protecting the public 
health is far less than the cost of breathing dirty air. When I 
was privileged to be Governor, and serve with this guy right 
here, we wrestled in my little State with what we could do in 
our State to try to reach attainment. We looked at the costs 
and how it would impact our industries in my State.
    What I discovered and what has become even more painfully 
obvious today is that the costs of breathing dirty air are a 
far heavier burden on our economy than the cost of air 
pollution controls. According to a recent survey, during each 
of the summer months, when air pollution is at its worst, 
almost one in every five adult Delawareans are unable to work 
or carry out certain daily activities for one or more days. 
There are 46,000 in Delaware who suffer from asthma. Roughly 
half of them are children. They have difficulty breathing when 
they go outside to play because of their asthma. Three thousand 
children in my State under the age of four are hospitalized in 
Delaware each year.
    That is just one small State on the east coast. The dirty 
air that millions of Americans are being forced to breathe is 
costing us dearly. It impacts our health, it impacts our 
productivity, it impacts our quality of life.
    The National Association of Manufacturers released a 
publication this month entitled, ``Health Care Cost Crisis.'' 
The publication states, ``The rising cost of health coverage is 
one of the biggest challenges manufacturers face today.'' I am 
going to leave here for a few minutes and slip out and walk 
into our Aging Committee. The CEO of General Motors, Rick 
Wagner, who tells me that the cost of health care for their 
company, for their employees, their pensioners, the families of 
their employees and their pensioners, actually costs more than 
not just the cost of the steel that goes into their cars, it 
costs more than all the capital investments they make around 
the world.
    But in terms of solutions, the first quick fix that the 
National Association of Manufacturers offers is the following. 
Again I am going to quote. ``Intensively managing chronic 
health care conditions, for example, diabetes, hypertension and 
asthma, can generate substantial cost savings and increase 
productivity.'' That is their quote. Let me say that again. 
According to the National Association of Manufacturers, one of 
the best ways for companies to save money, including General 
Motors, and increase productivity, is to address conditions 
like asthma.
    What causes conditions such as asthma? According to the 
latest science, particulate matter is associated with premature 
death, aggravation of heart and respiratory disease, asthma 
attacks, lung cancer and chronic bronchitis. If we want to help 
manufacturers, and we do, we need to address these chronic 
health care problems. We need to do it now.
    Unfortunately, once EPA finally decides on a new standard, 
areas will not need to comply with them for at least another 
decade. Some will be unable to get extensions until 2020. We 
need to begin addressing our air pollution problems today.
    This is why I recently introduced, with a number of our 
colleagues, including Senator Lamar Alexander and Senator 
Chafee, our proposal that we call the Clean Air Planning Act. 
Our proposal will cut sulfur dioxide emissions by 82 percent by 
2015. Sulfur dioxide, as we know, is one of the major forms of 
particulate matter that causes all of these chronic health 
problems.
    Our legislation will reduce this pollution from 11 million 
tons emitted today from utilities to 4.5 million tons in 2010. 
In 2015, the powerplants will have to reduce emissions to just 
2 million tons. According to an EPA presentation last fall, our 
proposal would cut the number of areas currently in 
nonattainment for particulate matter by over 70 percent by 
2010.
    Our bill will also greatly reduce ozone pollution. It will 
cut nitrogen oxide from 5 million tons today to 1.7 million 
tons in 2015. Today there are 126 areas in our Nation that 
exceed EPA's health standards for ozone. With these reductions, 
10 years from now, that number will be 11.
    Unfortunately, we are not here to talk about what we can 
and should do today. Instead, we are talking about whether or 
not we should be doing something 10 years from now. I want to 
commend EPA for realizing that more needs to be done to 
adequately protect public health. I would implore you to 
carefully consider whether the changes you have proposed 
achieve that goal in a timely manner.
    Thank you.
    [The prepared statement of Senator Carper follows:]
       Statement of Hon. Thomas R. Carper, U.S. Senator from the 
                           State of Delaware
    No one disputes that we've made significant environmental progress 
since the Clean Air Act was first passed into law. But our work isn't 
over.
    Despite this progress, many areas of the country including 
Delaware--have significant air quality problems. In Delaware, the 
entire State exceeds EPA's health standards for ozone, and New Castle 
County doesn't meet EPA's standard for fine particulate matter.
    I know a lot of people want to discuss the costs associated with 
attaining these standards, and that meeting them would negatively 
impact our economy. But the cost of protecting the public health is 
far, far less than the costs of breathing dirty air.
    While I was Governor, we wrestled with what we could do in our 
State to try to reach attainment. We looked at the costs and how it 
would impact our industries in the State. What I discovered, and what 
has become even more painfully obvious today, is that the costs of 
breathing dirty air are a far heavier burden on our economy than the 
costs of air pollution controls.
    According to a recent survey, during each of the summer months when 
air pollution is at its worst, about 23 percent of adult Delawareans 
are unable to work or carry out daily activities for one or more days.
    46,000 adults in Delaware suffer from asthma. 23,400 of our 
children have difficulty breathing when they go outside to play because 
of asthma, and 3,000 children under the age of 4 are hospitalized by 
asthma each year.
    That's just in my small, home State. The dirty air millions of 
Americans are being forced to breathe is costing us dearly. It impacts 
our health, our productivity and our quality of life.
    The National Association of Manufacturers released a publication 
this month entitled, Health Care Costs Crisis. The publication states 
``the rising cost of health coverage is one of the biggest challenges 
manufacturers face today.''
    In terms of solutions, the first ``quick fix'' the NAM offers is 
the following: ``Intensively managing chronic health care conditions 
(e.g. diabetes, hypertension, asthma) can generate substantial cost 
savings and increase productivity.''
    Let me say that again, according to the National Association of 
Manufacturers one of the best ways to save companies money and increase 
productivity is to address conditions like asthma.
    And what causes conditions such as asthma? According to the latest 
science particulate matter is associated with premature death, 
aggravation of heart and respiratory disease, asthma attacks, lung 
cancer, and chronic bronchitis.
    If we want to help manufacturers we need to address these chronic 
health care problems, and we need to do it now.
    Unfortunately, once EPA finally decides on a new standard, areas 
will not need to comply with them for at least another decade and some 
will be able to get extensions until 2020.
    We need to begin addressing our air pollution problems today. That 
is why I recently reintroduced the Clean Air Planning Act. My proposal 
will cut sulfur dioxide emissions by 82 percent by 2015. Sulfur dioxide 
is one of the major forms of particulate matter which causes all of 
these chronic health problems.
    It will reduce this pollution from 11 million tons emitted today to 
4.5 million tons in 2010. In 2015, powerplants will have to reduce 
their emissions to 2 million tons.
    According to EPA, my proposal would cut the number of areas 
currently in nonattainment for particulate matter by over 70 percent by 
2010.
    My bill will also greatly reduce ozone pollution. It will cut 
nitrogen oxide from 5 million tons today to 1.7 million tons in 2015. 
Today there are 126 areas in the Nation that exceed EPA's health 
standards for ozone. With these reductions 10 years from now that 
number will be 11.
    Unfortunately, we are not here to talk about what we can and should 
do today. Instead we are talking about whether or not we should be 
doing something 10 years from now.
    I commend EPA for realizing that more needs to be done to 
adequately protect public health. I would implore you to carefully 
consider whether the changes you have proposed achieves that goal.

    Senator Voinovich. Thank you, Senator Carper.
    Senator Bond.

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

    Senator Bond. Thank you very much, Mr. Chairman. I 
appreciate your holding this hearing today on the proposed 
revisions to the particulate matter air quality standards. As 
the Chairman has pointed out, our air is dramatically cleaner 
than it was 35 years ago. There is 50 percent less air 
pollution of the six major air pollutants together, including 
smog, soot and acid rain.
    These pollution reductions come over the same time as the 
Chairman has pointed out that population increased by 42 
percent, energy consumption by 48 percent, vehicle miles 
traveled by 178 percent and the economy grew by almost 200 
percent. The President's legislation to cut smog, soot and 
mercury pollution from powerplants by a further 70 percent was 
blocked by this committee. If we are serious about it, we ought 
to be adopting the Clear Skies proposal.
    But EPA is moving forward with regulations to cut 
powerplant air pollution by those amounts in the eastern part 
of the country. EPA has also implemented massive new pollution 
reductions requiring cleaner motor fuels and engines. Even now, 
States and regions are busy putting together plans to meet 
EPA's last round of pollution reduction requirements, which 
makes you wonder why EPA is back again with proposals for 
further reductions, when the current ones haven't even had a 
chance to be implemented. We have already been taking stringent 
measures to clean the air up even more.
    As one who suffers from asthma, I can tell you that it is 
not the air that is the problem that I had, it is the food. 
There are food-borne allergies that are my problem. It is not 
the air. So when you blame all of asthma on air, I don't think 
that you are covering the universe.
    But for me, the important problem is that States are in a 
terrible crack. They strongly support, as I do, efforts to 
improve air quality and protect public health. My home State of 
Missouri and several other States, as you noted, Mr. Chairman, 
are terribly afraid of the pain that additional tightening of 
the standards will cause.
    You will be introducing, I gather, a letter from Governors 
from my State and your State of Ohio in which they say that 
nonattainment designation will carry serious consequences that 
impact economic growth, jobs, mobility, energy prices, consumer 
choices and quality of life. They say, with this in mind, we 
urge you to proceed with extreme caution, extreme caution, as 
you consider whether to change the particulate matter standard. 
The final decision should be based on sound science and should 
appropriately balance scientific uncertainty with the joint 
benefit of people's health and livelihood.
    These Governors are responsible for the environmental 
health and the economic health and well-being of their people. 
They say don't go so fast. We are making the environmental 
changes, but we need to take a look at the economic burdens 
that these are putting on these counties and the people who 
live in them and depend upon good jobs to get the healthy diets 
they need to deal with the many health problems that come from 
inadequate economic opportunities for them.
    The proposals and suggestions to go farther than we are 
right now will carry serious negative consequences for families 
and workers, harming jobs, mobility, energy prices, consumer 
choices and the quality of life. If these new standards are 
more strict, they will be asked to write new plans to impose 
this pain before they are even finished with implementation of 
their latest plans. They also won't have a chance for their 
plans to account for the benefits coming from EPA's recent 
pollution reduction requirements. Doesn't it make sense to find 
out how far these new changes go, how much better the air gets?
    The Governors recognize the serious disconnect between 
Washington and the real world. Shortly, we will get to see the 
head of the EPA's air program throw up his hands and say, it is 
not his fault, statute is making you do it. I understand that. 
Supporters of EPA's proposal correctly point out that a statute 
written 35 years ago and last amended 15 years ago requires 
this calamity. They point out and the Supreme Court agrees that 
the precise words of the statute require a review of the 
current standards, and that the pain and harm focused upon 
families and workers may not be considered.
    The number of breadwinners losing their jobs may not be 
tallied. The number of struggling folks without transportation 
solutions to good paying jobs may not be tabulated. It is 
ironic to hear these arguments. They are happy to find a friend 
in Justice Scalia and his plain meaning of the statute 
approach. But how quickly they forget when nowhere in the Clean 
Air Act can they find the words ``carbon dioxide.'' Or how 
quickly they walk away from the plain meaning of statutes when 
we consider, say, navigable waters of the United States, to 
limit wetlands jurisdiction. Oh, no. Those words don't mean 
what they say, we will hear in a few weeks.
    No complaints, either, when the Superfund law, intended to 
regulate and clean up industrial waste, is newly applied to 
farmers and livestock operations, a use never intended by 
Congress. Luckily, as we will see next week, there is plenty of 
health analysis to conclude, as EPA did, that the current 
annual soot standards of 15 micrograms per cubic meter is more 
than enough, more than enough to provide an adequate margin of 
safety requisite to protect human health.
    I would urge EPA to heed the advice of the States and 
proceed with extreme caution as you consider whether to change 
the particulate matter standard. In the interim, I am glad, Mr. 
Chairman, we are exercising our appropriate oversight function. 
We have a duty to inform ourselves of what is at stake, who 
will bear the burden, how heavy that burden will be, who will 
be harmed and who will lose. As we will see from the witnesses 
today, many will be unfairly captured and many will be 
unnecessarily harmed by this proposal, or suggestions to go 
even further.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Bond follows:]
     Statement of Hon. Christopher S. Bond, U.S. Senator from the 
                           State of Missouri
    Thank you Mr. Chairman for holding this hearing today on EPA's 
proposed revisions to the particulate matter air quality standards.
    The air is dramatically cleaner than it was 35 years ago. There is 
50 percent less air pollution of the six major air pollutants together 
including smog, soot and acid rain.
    These pollution reductions come over the same time the population 
increased by 42 percent, energy consumption rose by 48 percent, vehicle 
miles traveled rose by 178 percent and the economy grew by almost 200 
percent.
    While the President's legislation to cut smog, soot and mercury 
pollution from powerplants by a further 70 percent was blocked by this 
committee, EPA is moving forward with regulations to cut powerplant air 
pollution by those amounts in the eastern part of the country.
    EPA has also implemented massive new pollution reductions requiring 
cleaner motor vehicle fuels and engines.
    Even now States and regions are busy putting together plans to meet 
EPA's last round of pollution reduction requirements.
    Which makes you wonder why EPA is back again with proposals for 
further reductions when the current ones haven't even had a chance to 
be implemented.
    States are certainly scratching their head. They strongly support, 
as do I, efforts to improve air quality and protect public health. But 
my home State of Missouri, and several other States as you noted Mr. 
Chairman, are terribly afraid of the pain this will inflict on them.
    This proposal and suggestions to go further will carry serious 
negative consequences for their families and workers harming jobs, 
mobility, energy prices, consumer choices and the quality of life.
    States will be asked to write new plans to impose this pain before 
they are even finished with their latest new plans. They also won't 
have a chance for their plans to account for the benefits coming from 
EPA's recent pollution reduction requirements.
    So they recognize the serious disconnect between Washington and the 
real world.
    Shortly, we will get to see the head of EPA's Air program throw up 
his arms and say it isn't his fault. The statute is making him do it.
    Supporters of EPA's proposal correctly point out that a statute 
written 35 years ago and last amended 15 years ago requires this 
calamity.
    They point out, and the Supreme Court agrees, that the precise 
words of the statute require a review of the current standards and that 
the pain and harm forced upon families and workers may not be 
considered. The number of breadwinners losing their jobs may not be 
tallied. The number of struggling folks without transportation 
solutions to good paying jobs may not be tabulated.
    It is ironic to hear their arguments. They are happy to find a 
friend in Justice Scalia and his plain meaning of the statute approach, 
but how quickly they forget when nowhere in the Clean Air Act can they 
find the words ``carbon dioxide.''
    Or how quickly they walk away from the plain meaning of statutes 
when we consider say ``navigable waters of the United States'' to limit 
wetlands jurisdiction. ``Oh no, those words don't mean what they say'' 
we will hear in a few weeks.
    No complaints either when the Superfund law, intended to regulate 
and clean up industrial toxic waste, is newly applied to farms and 
livestock operations--a use never intended by Congress.
    Luckily, as we will see next week, there is plenty of health 
analysis to conclude, as EPA did, that the current annual soot standard 
of 15 micrograms per cubic meter is more than enough to provide an 
adequate margin of safety requisite to protect the public health.
    I urge EPA to head the advice of the States and ``proceed with 
extreme caution as you consider whether to change the particulate 
matter standard.''
    In the interim, I am glad we are exercising our appropriate 
oversight function. We have a duty to inform ourselves of what's at 
stake, who will bear the burden, who will be harmed and who will lose. 
As we will see from the witnesses today, many will be unfairly captured 
and many will unnecessarily be harmed by this proposal or suggestions 
to go even further.
    Thank you.

    Senator Voinovich. Thank you, Senator Bond.
    Senator Lautenberg, thank you for being here.

  OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR 
                  FROM THE STATE OF NEW JERSEY

    Senator Lautenberg. Thanks very much, Mr. Chairman.
    I am kind of pleased to be here and see us considering this 
subject. Because we have contrasting views, obviously, here. 
Members of the committee know that I feel rather strongly about 
protecting air quality. I hear the appropriate concern of my 
colleagues, for whom I have respect, even though I have 
differences, about the loss of jobs and the burden placed on 
industry to meet lower standards for, drop the bar for 
particulate standards.
    Before I came to the Senate, my career included founding a 
business that now employees 44,000 employees in 26 countries, 
still headquartered in New Jersey. The company is called ADP, 
it is considered as one of the best companies in the country, 
with its financial condition. I say that not to brag, though I 
am happy about it. The fact is that I have some significant 
experience in job creation and understanding business. I don't 
concede anything when it comes to understanding the business 
side of the equation.
    One of my children has asthma, and he is one of 6 million 
kids who are living with this disease. It is painful to see him 
stricken with an attack, reaching for the next breath. I 
consider it my responsibility to help him, to help Alexander 
and other children across this country to breathe easier. I 
think that is part of my responsibility here. The quality of 
our air affects the lives of those 6 million children every 
single day.
    We heard confirmation of this from Senator Bond, about what 
the limitations that asthma brings, though he ascribes a 
different source than particulates as the responsibility for 
his asthma. But during the summer time, when most children are 
enjoying their vacation, playing outside, children with asthma 
often have to stay indoors. The reason that they have to stay 
indoors is that the air is just too dangerous for them to 
breathe. As a matter of fact, when I listen to the debate, I 
come up with that maybe we ought to send out a slogan that 
says, ``Look, kids, you have to understand this, here is what 
you should do. Breathe harder, cough more, die younger but stay 
indoors.''
    I don't think that is a good message. Ask the families who 
are related to those children who are stricken with asthma. Ask 
them what is the cost worth to keep their child alive or 
functioning as other children do. I am not suggesting there are 
hard hearts on the other side. I am saying that in the 
evaluation that we are making here that we have to decide 
whether or not the costs that will be increased perhaps by 
trying to conform to lower standards for particulates will be 
more than offset by the savings that we have in the future 
because of their reduced cost of health care.
    According to a study from the Harvard School of Public 
Health, as many as 4 percent of premature deaths in the United 
States can be attributed to air pollution, the number that we 
get is over 40,000. That is an EPA number. Particulate matter 
is the deadliest kind of air pollution. The American Lung 
Association says that even low levels of particulate matter can 
lead to premature death.
    Some of the deadliest particulate matter is also the 
smallest, almost invisible, as tiny as a 30th in width of a 
human hair. The study cited by the Lung Association revealed 
that the risk of mortality increases by 17 percent in areas 
with high concentration of these small particles, places like 
Los Angeles, Cleveland, Pittsburgh and my home State of New 
Jersey. High levels of particulate matter cannot only kill, 
they can cause all the discomfort that asthma and respiratory 
disease inflicts.
    There are more than 2,000 peer reviewed studies linking 
particulate particle pollution to illness, hospitalization and 
premature death. So if anybody doubts the need to protect our 
families from particulate matter in the air, they simply aren't 
paying attention. Now, I am concerned that EPA's proposed 
revised standards for particulates may simply not be sufficient 
to protect the public. The Clean Air Act is one of our most 
important and successful environment and public health needs. I 
strongly oppose any effort to weaken or undermine the Act and 
the health protection that it provides for hundreds of millions 
of Americans.
    When we banned smoking in airplanes, that created a public 
revolution against tobacco. I was assailed by people in the 
restaurant business and other business where people gathered in 
groups and saying, well, you know what is going to happen to 
our business, what is going to happen? There is no shortage of 
restaurants, there is no shortage of public gathering places. 
Life is better without the smoke that was created that we all 
ingest.
    So it can be here also. I hope that we will adhere to the 
response from the Court as diligently as we can and reduce this 
cancer that pervades our society. Thanks, Mr. Chairman.
    Senator Voinovich. Thank you, Senator Lautenberg.
    Senator DeMint.

  OPENING STATEMENT OF HON. JIM DeMINT, U.S. SENATOR FROM THE 
                    STATE OF SOUTH CAROLINA

    Senator DeMint. Thank you, Mr. Chairman, and thank you, Mr. 
Wehrum, for being here.
    I will be brief, Mr. Chairman. I really want to relate to 
our comments, particularly. South Carolina is another State 
like Ohio that has had a difficult economic transition. We are 
trying to replace the textile industry, rebuild our economy. We 
have lost a lot of manufacturing jobs as well.
    I would like to remind you, all of us, that quality of life 
is certainly related to people having jobs. When breadwinners 
lose their jobs, as my colleague has reminded me today, the 
ability to sustain your health and a good diet, a lot of things 
affect health, in addition to the air quality. We need to make 
sure that what we do here promotes a good quality of life. All 
of us support cleaner and cleaner air, everything we can do.
    But if I can share what is happening in South Carolina, I 
think as you know, sir, that part of our State is designated 
unclassifiable because the data is not yet there to say one way 
or another. We are working very hard as a State and as a number 
of communities to do everything we can to clean up our air. We 
know some of it is coming from outside the area that we can't 
control. Some of it is naturally occurring. Some of it comes 
from Federal highways that come through our area, which we have 
little control of.
    But we are trying to do those things we can control. We 
would ask that the EPA focus its resources on helping us clean 
up our air, helping us find those sources of pollution and 
helping us organize to do everything we can to provide cleaner 
air. The mere act of continuing to create stricter and stricter 
standards does not necessarily improve our air quality. What it 
does is reduce our quality of life. It has already diminished 
our job building capability because this unclassifiable 
standard has run off new business prospects.
    So I appeal to you before you look at reducing or 
continuing to make the standards stricter, moving the goalpost, 
create a culture in your Agency to do what all of us want to 
do, and that is have cleaner air and a healthier environment 
for people to live in. But lowering the standards again is not 
going to do that if we have not taken the basic steps of 
finding out where the pollution is, what we can do to clean it 
up, and to put together those plans to make that happen.
    We all want the same thing. But I don't think you are 
serving the public interest or the public health by just 
creating a standard that is going to be harder to attain when 
we haven't figured out how to do everything we can to attain 
the one we already have.
    Mr. Chairman, I yield back.
    Senator Voinovich. Thank you.
    Senator Isakson.

OPENING STATEMENT OF HON. JOHNNY ISAKSON, U.S. SENATOR FROM THE 
                        STATE OF GEORGIA

    Senator Isakson. Chairman Voinovich, I appreciate very much 
your leadership in calling this hearing and Assistant 
Administrator Wehrum, thank you for being here today and thank 
you for the times you have come to my office.
    I want to thank Senator Lautenberg for his analogy, because 
it enables me to make a point that I was struggling with a good 
example to make. I commend him and I share with him the pride 
that I have on the restrictions on smoking that we have done 
that have improved the health of millions and millions of 
Americans. We need to understand, those restrictions attack the 
generator of the smoke, the person that smokes the cigarette. 
We didn't punish the victim of second-hand smoke.
    We have a county commissioner from Georgia that is here 
today, Bebe Heiskell, of Walker County, GA. Walker County is in 
nonattainment in principal because of particulate matter and 
ozone that flows to her county from other points of origin. So 
we are punishing the victim of second-hand pollution, not the 
originator of that pollution, which is why when we measure 
these standards, we need to be careful about the impact and how 
they may arbitrarily actually punish people who have no control 
over the circumstances that they are in.
    EPA has chosen to move the goalposts on States and 
communities that are diligently working toward implementation 
plans for current clean air standards. EPA has clear discretion 
not to change the standard and can set it at any level. EPA has 
instead chosen, in the face of evidence that shows the risk 
with particulate matter has decreased since 1997, to propose a 
24-hour fine particulate standard that would add 530 counties, 
67 of which are in my State of Georgia, to the nonattainment 
list.
    A nonattainment designation puts a stigma on the 
communities that is almost impossible to come out from under. 
The designation has resulted in current businesses closing up 
shop, new businesses avoiding the area, and the impact on the 
tax base has negative repercussions on the schools, the 
emergency services and the community.
    I look forward to your being here today and to your 
testimony. I appreciate, as I said in my earlier remarks, your 
attention to Walker County and the attempts we have tried to 
make to bring about some reason in that judgment. I am 
particularly glad that Commissioner Heiskell is here today. 
This is an example of a county who, proactively under her 
leadership, entered into an early action compact to do 
everything they could do to remediate the circumstances they 
are the victim of, yet still were put in the nonattainment 
category, even though they voluntarily were making efforts to 
control something, some of which was not within their control.
    Mr. Chairman, I again commend you on calling this hearing 
today and I look forward to hearing from the Assistant 
Administrator and from all those who have come from around the 
country to testify.
    [The prepared statement of Senator Isakson follows:]
   Statement of Hon. Johnny Isakson, U.S. Senator from the State of 
                                Georgia
    Thank you Chairman Voinovich. I want to commend you and your staff 
for calling this oversight hearing, and for your leadership this issue. 
I am pleased that we are having this hearing today to provide 
Congressional oversight of the EPA as they work towards a proposal that 
will cause significant economic damage to my State.
    EPA has unilaterally chosen to ``move the goalposts'' on States and 
communities that are diligently working towards implementation plans 
for current clean air standards. EPA has clear discretion to not change 
the standard and can set it at any level. EPA has instead chosen, in 
the face of evidence that shows the risk with particulate matter has 
decreased since 1997, to propose a 24-hour fine particle standard that 
would add 530 counties nationwide, and 67 counties in my State, to the 
nonattainment list. A nonattainment designation puts a stigma on these 
counties and communities that is almost impossible to come out from 
under. This designation has resulted in current businesses closing up 
shop and new businesses avoiding the area. The impact on the tax base 
has negative repercussions on the schools, emergency services, and 
community.
    I look forward to hearing from Administrator Wehrum as to whether 
he and his Agency, when making these decisions that effect so many 
peoples lives, consider the ``hidden costs'' that I have mentioned 
above. I also look forward to his explanation of EPA's decision making 
on this process, and how they arrived at this decision.
    I would also like to welcome Chairwoman Bebe Heiskell before the 
committee. Bebe is testifying on our second panel, and is the Sole 
Commissioner of Walker County, GA. Walker is one of only a handful of 
remaining counties in America that have only one Commissioner. Bebe has 
set precedence by being elected the first female Sole Commissioner in 
the State of Georgia and the first Republican County Commissioner of 
Walker County. She will give us first-hand evidence of the negative 
effects a nonattainment designation has on a rural county.
    I have stated this in previous hearings but it bears repeating 
again: 60 percent of my State of Georgia's population lives in a 
nonattainment area. That is over 5 million people. Twenty-eight of one 
hundred fifty-nine of our counties, including Walker and Catoosa 
Counties in the mountains, through Metro Atlanta, and down to Muscogee 
County and the Metro Columbus area, are in nonattainment for 
particulate matter. Twenty-two of one hundred fifty-nine counties over 
the same geographic area are in nonattainment for ozone. This hearing 
is very timely, as air quality is an issue that Georgians in my State 
deal with every day.
    And while it is not the topic of the hearing today, in my view a 
fix for these problems would have been passage of the Clear Skies bill. 
I am hopeful that we, as a committee, can come together and bring to 
the floor that legislation which in my opinion is better than current 
law.
    In the meantime, I will stop here so that we can get to our 
witnesses. I look forward to hearing from the panels, thank Chairman 
Voinovich for his leadership to date, and yield back the balance of my 
time.

    Senator Voinovich. Thank you, Senator.
    Mr. Wehrum, we are very happy to have you here today. I 
would like to for the record mention that I think it is very 
unacceptable that there is a hold on your nomination and that 
you haven't been confirmed yet. Because I think you are highly 
qualified and we may have differences of opinion, but I think 
you are a very qualified individual who really cares about the 
job that he is doing. I apologize for the fact that you haven't 
been confirmed yet. Hopefully those holds will be taken off and 
you can be confirmed.
    Before you testify, I am going to introduce into the record 
letters of testimony from 100 concerned public and business 
officials and associations from both sides of the aisle, 
including the Governors of Indiana, Alabama, Missouri, Georgia, 
Wyoming, Mississippi, Ohio and South Carolina; State 
representatives; county commissioners and mayors from Ohio and 
across the United States; Ohio Manufacturers Association; 
American Road and Transportation Builders Association; and many 
others that are very concerned about the proposed new rule.
    [The referenced information follows on page 146-243.]
    Senator Voinovich. Mr. Wehrum, you are familiar with this 
committee. If you would limit your testimony to 5 minutes, and 
of course, your entire testimony is part of the record.

 STATEMENT OF WILLIAM WEHRUM, ACTING ASSISTANT ADMINISTRATOR, 
  OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION 
                             AGENCY

    Mr. Wehrum. Thank you, Mr. Chairman. I appreciate the 
opportunity to be here. Thank you, members of the committee.
    I am pleased to be here today to discuss the proposed 
revision to EPA's National Air Quality Standards for 
Particulate Matter. The President has challenged our 
Administrator to accelerate the pace of environmental 
protection while maintaining our Nation's economic 
competitiveness. This proposed rule is a key part of our 
efforts to satisfy this mandate.
    EPA sets national standards, which we call NAAQS, for 
particles and five other pollutants commonly found across the 
country. Together, the NAAQS serve as the foundation for the 
majority of our air quality programs, programs that have helped 
make America's air cleaner over the past 35 years, even as our 
population and economy have grown.
    The Clean Air Act requires EPA to review the standards 
every 5 years and revise them as necessary. We are nearing the 
end of our latest review of the NAAQS for particulate matter. 
Under a consent decree, we must issue a final decision on the 
PM standards by September 27 of this year. EPA has proposed 
standards for two categories of particles. The first, what we 
call fine particles, or PM2.5, includes particles 
that are 2.5 microns in diameter or smaller. As Senator 
Lautenberg pointed out, these are particles so small you 
typically can't even see them in visible air. Scientific 
studies have linked exposure to fine particles to a wide array 
of significant health effects, ranging from asthma attacks to 
premature death.
    The second category, called inhalable coarse particles, 
includes particles larger than 2.5 microns and up to 10 microns 
in size. These particles have been associated with increased 
hospital admissions for respiratory symptoms and heart disease, 
among other effects.
    Our proposal would revise the 24-hour standard for fine 
particles to 35 micrograms per cubic meter of air, a 
significant strengthening over the current level of 65. EPA 
Administrator Johnson based this proposal on the large amount 
of research since our last review that linked short-term fine 
particle exposure to significant health effects.
    As proposed, the annual standard would remain at its 
current level of 15 micrograms. New studies increase our 
confidence in the link between long-term exposure to fine 
particles and health effects. While we believe these studies do 
not support a standard higher than 15, we provisionally 
concluded that these same studies do not provide a clear basis 
for making the standard tighter.
    The proposal for addressing inhalable coarse particles is 
more complex, in order to best reflect the available science on 
coarse particles and health. For these particles, we have 
proposed a 24-hour standard which would be set at 70 
micrograms. This standard would apply where the coarse particle 
mix is dominated by particles from high density traffic on 
paved roads, industry and construction.
    The proposed PM standards represent the Administrator's 
best judgment at the time of proposal of the standards 
requisite to protect public health with an adequate margin of 
safety, which is his obligation and our obligation under the 
law. The Administrator based that judgment on careful 
consideration of available science, key studies and 
recommendations of scientific advisors and staff. However, he 
recognizes that opinions differ on the appropriate levels, so 
our proposal requested comment on a range of alternatives.
    Issuing a standard is just the first step toward improving 
air quality across our Nation. The second step, meeting the 
standards, is primarily the responsibility of States and local 
governments with assistance and guidance from EPA. We 
understand that a number of States are concerned about facing a 
new round of nonattainment designations, and Senator Isakson 
and Senator DeMint, you emphasized those concerns in your 
testimony. We are already working to ensure a smooth transition 
to any revised standards, so State pollution control efforts 
remain as effective and cost effective as possible.
    Shortly after we proposed the revised standards last 
December, EPA began making plans for implementing potential 
revisions. As a first step, we issued a notice that sought 
comment on a number of issues related to transition. The notice 
also alerted States of the probable planning and compliance 
time line. Meeting the revised PM standards will require a 
combination of national, regional and local emissions controls. 
EPA already has issued a number of regulations that will help 
reduce fine particle pollution, including national rules 
reducing emissions from gasoline and diesel engines and a 
regional rule controlling emissions from electricity 
generation.
    The President's Clear Skies proposal would make these 
regional reductions apply nationwide. These existing rules will 
help States make significant progress toward meeting the 
current PM standards. Those States needing additional 
reductions are assessing the nature of the nonattainment 
problems and are evaluating a range of local emission reduction 
strategies.
    The steps States take now to meet the standards now in 
place also would help to meet any revised standards we issue in 
September. EPA is committed to working closely with the States 
as they work to meet current standards and any future 
standards, so we can continue America's progress toward clean, 
healthy air.
    Again, thank you for the opportunity to be here, and I am 
happy to answer any questions you may have.
    Senator Voinovich. Thank you, Mr. Wehrum.
    Mr. Wehrum, in my request, and I appreciate you have been 
working with the State of Ohio and others to see what can be 
done to bring Cleveland, OH, into attainment with ozone 
standards by the required date of 2010, I understand this is a 
very complicated and resource-intensive process. What then 
would be the impact on States and localities if you moved the 
goalpost on them in the middle of the process? In other words, 
people are right now putting their State implementation plans 
and trying to figure out, how do we get this done. You come out 
with a new rule. How are they going to handle that?
    Mr. Wehrum. Mr. Chairman, that is a very important 
question, one that we are focused closely on, and I know one 
that you and folks in your State and other States are focused 
on. As you know, when we proposed the revision to the PM 
standards, at the same time we issued what we call an advanced 
notice of proposed rulemaking to talk about implementation 
issues. Our goal, if we choose to change the standards, is to 
do it in the most thoughtful way we possibly can. We realize 
there is an enormous challenge in place right now for many 
areas to meet the standards that we have in place. If we make 
the standards more stringent, it makes the challenge that much 
harder.
    We are well aware of that, and we are going to work very 
hard to adopt the smartest, cleanest, most thoughtful 
implementation approach we can that dovetails the work that 
people are doing now to meet the current standards with what 
may additionally be needed to meet new standards if we choose 
to set them.
    Senator Voinovich. We have discussed at length, EPA 
carefully established the Clean Air Interstate Rule to reduce 
powerplant emissions without causing undue economic and energy 
costs. We worked very, very hard with that rule, and of course, 
basically it captures, for the most part, what we were going to 
do with Clear Skies.
    If you designate more numerous areas in nonattainment under 
this new standard, is your intention to amend CAIR or create 
some kind of a new regime?
    Mr. Wehrum. Mr. Chairman, if the Administrator chooses to 
revise the standards and make them more stringent, that will 
create an obligation on the States and ultimately EPA, if the 
States don't step up, to do an analysis of whether upwind 
sources, well, first of all, whether sources within their 
jurisdiction are significantly contributing to nonattainment in 
downwind States. Downwind States have an opportunity to do the 
same assessment and seek relief from EPA.
    So the short answer is, the law requires the question to be 
asked, and ultimately, whether any change to the regional 
control strategies we have in place right now would be 
warranted or appropriate will depend on the facts and 
circumstances that are available at the time.
    Senator Voinovich. Am I correct in assuming that you cannot 
consider cost benefit?
    Mr. Wehrum. That is correct, Mr. Chairman.
    Senator Voinovich. We are going to be having another 
hearing and I will be submitting a question to you. I am really 
interested to know, following up on Senator Lautenberg's 
statement, No. 1, with the new particulate matter that we 
already have set, what impact is that having in terms of public 
health; and No. 2, if a new rule came into effect, what would 
be the incremental benefit of that rule in terms of public 
health, in terms of some of the things that we have all talked 
about. I think it is something that we should know, and 
certainly we should be concerned about.
    The other issue that we might as well get into, if we are 
going to talk about asthma, I would really like to have some 
authoritative statement about the issue of asthma. Because we 
have seen an increase in asthma, and I would like to know what 
it is that you folks think has caused the increase in asthma. I 
remember testifying way back when I was Governor about the 
whole issue of asthma and what caused it. There were some real 
differences of opinion about whether it was the ambient air or 
whether it was the physical condition that existed in homes.
    There were some that argued that mites and other things 
within the premises where people live had a lot more impact on 
their asthma situation than the air situation. There were 
others that argued that it would be cheaper to buy everyone an 
air conditioner than it would be to put in new things that 
would clean up the air in terms of really making an impact. I 
think Senator Isakson made a real good point when he talked 
about the cigarettes, you dealt with the person that was 
causing it, you didn't penalize the rest of the folks.
    So these considerations are really important to us. I 
wouldn't want anyone to think that I am not sensitive to the 
health care needs and to the costs that are involved. But I do 
believe that we have to use common sense, and we also have to 
understand that some of these folks aren't going to be able to 
even reach the current standard.
    Senator Carper.
    Senator Carper. Thanks, Mr. Chairman.
    Let me start again by thanking you for your testimony and 
for your staying with us to respond to some questions. I just 
want to confirm with you if I could that it is the conclusion 
of the Environmental Protection Agency that the fine 
particulate matter standards need to be strengthened to better 
protect public health. Is that correct?
    Mr. Wehrum. Senator, as you know, we have proposed changes 
to the current suite of particulate matter standards. We have 
not yet gotten to the point where final decisions have been 
made and the final action has been signed and published. So we 
are in the deliberating process still. Our proposal reflected a 
tentative assessment based on a review of the science and other 
relevant factors that were available to us at the time of 
proposal.
    We of course have had a lengthy public comment period and 
opportunity for public hearings, and right now we are in the 
process of reviewing the information that we received in the 
public comments.
    Senator Carper. OK, that is fine. Thanks very much.
    Mr. Wehrum. Sure.
    Senator Carper. I want to better understand this Clean Air 
Scientific Advisory Committee, who they are. Talk to us for a 
very short while, tell us about this committee. Who are these 
folks? What have they done in terms of their deliberations to 
allow them to make their recommendations?
    Mr. Wehrum. Sure, Senator. The Clean Air Science Advisory 
Committee, what we call CASAC, is a scientific advisory group 
that is required to be created under the Clean Air Act. Its 
specific purpose is to advise the Administrator on the science 
associated with the criteria pollutants and to make 
recommendations with regard to the science and on the policy 
associated with applying that science.
    Senator Carper. Is it a big group? Is it a little group? 
Are they scientists? Who are these folks?
    Mr. Wehrum. The law requires, it actually specifies the 
number of folks that have to be on CASAC, and it specifies the 
type of folks that have to be on CASAC.
    Senator Carper. Share with us just a little bit of that, 
real quickly.
    Mr. Wehrum. There has to be someone representing States, 
there has to be someone with toxicological experience and 
epidemiological experience, and a medical doctor. So the idea 
behind the statute and the way in which we use CASAC is to 
convene a body of experts with diverse experience in air 
quality issues, a group of experts who can look at the science 
and understand the science and the policy implications and give 
us advice.
    Senator Carper. The recommendations that they have made for 
revising the standards, the 24-hour standard and the annual 
standard, give us some idea, is this something that they 
decided to do quickly? Did they do a fair amount of 
deliberation?
    Mr. Wehrum. CASAC is involved through many aspects of our 
rule development process. When we set standards, when we think 
about changing standards, it is a much more involved process 
than the typical rulemaking we might do for other reasons under 
the Clean Air Act, like setting emissions standards. It starts 
with a detailed assessment of the science and development of 
what is called a criteria document that is intended to be a 
summation of all the relevant science. That work is actually 
done by our Office of Research and Development, not my own.
    CASAC is involved in the reviewing of the draft criteria 
document, provides comments and their own assessment of whether 
the right science has been identified and whether the science 
is being interpreted in an appropriate way. Once the criteria 
document has been developed, then that is translated into a set 
of policy recommendations, typically through what is called a 
staff paper, which is prepared by folks in my office. CASAC is 
involved in reviewing drafts of the staff paper and giving 
their recommendations as to whether the science and other 
related information is being applied properly.
    Senator Carper. Thanks. Again briefly, who appoints the 
folks to CASAC?
    Mr. Wehrum. I am sorry, Senator?
    Senator Carper. Who appoints the members to CASAC?
    Mr. Wehrum. The Administrator.
    Senator Carper. OK. Now, I understand according to the 
Clean Air Scientific Advisory Committee recommendations 
concerning the proposed National Ambient Air Quality Standards 
for particulate matter, it was again recommended that EPA 
revise the annual particulate matter standard from, I think it 
is 15 micrograms per cubic meter down to a range of anywhere 
from 13 to 14. However, EPA chose not to take the advice of the 
committee that you have just graciously described for us.
    Can you explain the rationale behind ignoring the 
committee's advice on this point? I know you have made some 
changes with respect to the 24-hour standard. But can you just 
explain the rationale behind ignoring the advice of the 
commission, those charged with making these recommendations, 
based on what appears to be their extensive knowledge of the 
science?
    Mr. Wehrum. Yes, Senator. It is important to point out that 
the law does not require the Administrator to take the advice 
of CASAC. In fact, the law anticipates the Administrator may 
choose to do something different than what CASAC recommends, 
and puts an obligation on the Administrator to explain if he 
takes final action that is different than what CASAC 
recommends, to provide an explanation as to why that is the 
case.
    The body of science available on particulate matter is 
enormous. That is a great virtue at this point in time. When 
the standards were set back in 1997, there was a relative 
dearth of information, and that made it particularly 
challenging to decide whether to set a standard and where to 
set the standards. A tremendous amount of research has been 
done from 1997 to the current day, which is a great benefit to 
us. But it in and of itself presents a challenge, because it 
requires very knowledgeable people to look at the science and 
think about it in a very complex way and draw conclusions as to 
what they think that science suggests in terms of keeping the 
standard or changing the standard.
    We highly appreciate the input of CASAC. They are a very 
important part of our process. We have great respect for the 
people in CASAC and the advice that they give us.
    But in this case, we disagreed with their recommendation as 
it relates to the annual fine particle standard, and that is 
for the reason simply that I stated in my testimony, which is 
we believe that the science does not suggest that a loosening 
of the standard is appropriate, but we also believe that the 
science does not provide a clear indication that the current 
annual standard for fine particles needs to be adjusted 
downwards.
    Senator Carper. All right, thanks. If I could, Mr. 
Chairman, just a quick concluding statement. Mr. Wehrum, in 
your testimony, you assert that somehow the passage of Clear 
Skies would improve upon current Clean Air rules. However, 
according to the analysis the EPA conducted last year that you 
were good enough to present to us, that doesn't necessarily 
seem to be the case. The analysis that you showed us shows that 
current law will reduce the number of areas in nonattainment 
for particulate matter from I think 39 to 21 by 2010.
    Clear Skies' proposal, on the other hand, would reduce the 
number of areas in 2010 from 39 to 20. While I agree we need to 
pass legislation and establish a national program, we also need 
to pass legislation to actually address the Nation's clean air 
problems. According to what I believe to be your Agency's own 
analysis, I would just respectively observe that Clear Skies 
just doesn't get that job done.
    But again, thank you for being here this morning. Thank you 
for letting me run a minute or two long.
    Senator Voinovich. Thank you, Senator Carper.
    Senator DeMint.
    Senator DeMint. Thank you, Mr. Chairman, and Mr. Wehrum, 
thank you again for being here and your testimony.
    Just a couple of questions. Is it true that the air in this 
country is cleaner now than it was a decade or two ago?
    Mr. Wehrum. Yes, Senator, that is true.
    Senator DeMint. But it is also true the incidence of asthma 
has increased as the air has gotten cleaner.
    Mr. Wehrum. That is my understanding, Senator.
    Senator DeMint. So it is very difficult, I guess, then 
statistically to suggest that the air quality is the cause of 
asthma.
    Mr. Wehrum. Senator, you as well as Chairman Voinovich have 
raised a very complex question. Asthma is obviously a very 
important issue. According to the information available to me, 
the incidence of asthma appears to be increasing while air 
quality undoubtedly has been increasing over the same period of 
time.
    What we do know is that there are a variety of triggers 
that at least cause people to have asthma episodes and not all 
of them are related to air quality. They can be related to 
other factors, as Chairman Voinovich pointed out.
    Senator DeMint. Clearly, it would be difficult to make the 
case for tighter, stricter standards because of the rise in the 
incidence of asthma, I would say.
    Mr. Wehrum. Senator, the science of particulate matter does 
show that there is an association between exposure to 
particulate matter and an increase in a variety of respiratory 
ailments, including asthma episodes. So my point is, asthma is 
a very complex issue. I would be more than happy to provide a 
detailed response on the record. But at the end of the day, 
there is an association, Senator.
    Senator DeMint. Let me ask another question related to 
science. I think you have indicated in your testimony that 
there is no scientific data that EPA has that would suggest you 
raise or lower the standards?
    Mr. Wehrum. It was the Administrator's judgment at the time 
of proposal that at least for the annual fine particle standard 
that the available science did not create a clear rationale for 
adjusting the standard, or making the standard more stringent 
than the current level of 15 micrograms.
    Senator DeMint. What could be the rationale to create a 
stricter standard at this time?
    Mr. Wehrum. Senator, as I explained a second ago, 
reasonable minds can and do differ when they look at the 
science that we have available and what that science would 
suggest as to where the standard should be set. So we got any 
number of public comments, including from public health groups, 
environmental groups and the others who assessed the science 
and suggested to the Administrator that it would be more 
appropriate to conclude that the science would support and in 
their view mandate an adjustment to a lower level than we 
currently have.
    So the sum of my answer is, there are people who are aware 
of the science and are fairly knowledgeable in the field, and 
they have made the recommendation to us through public comments 
that the standard should be adjusted downward.
    Senator DeMint. Adjusted downward. Just quickly, if you 
could speak on, what is the role of the EPA, the strategy of 
the EPA to actually identify those companies that are 
generating pollution and what is the role of the EPA to 
actually help the communities clean up? I know you can set a 
standard. But is it the mission of the EPA to actually help 
clean the air?
    Mr. Wehrum. Senator, I think we help in a couple of ways, 
probably more than a couple. On the one hand, there are certain 
areas where we regulate that State and local jurisdictions 
don't. We set vehicle standards for cars and trucks and other 
types of mobile sources. They are nationally applicable and 
result in substantial reductions in the emissions, the kind of 
pollution we are talking about right now, and help areas to 
attain the standards, if they are not currently attaining.
    The regional powerplant control strategy we have been 
talking about, CAIR, is another good example of that, where we 
adopted a regulation in a circumstance where it wasn't within 
the authority of State and local jurisdictions to do that. So 
the standards we set help, and they help a lot in some areas. 
But almost inevitably, when an area has bad air quality, it is 
a combination of stuff outside the control, sometimes stuff 
blowing into the area from upwind, and maybe cars and trucks 
which local jurisdictions tend not to regulate, a combination 
of those sorts of things, which we try to deal with.
    Then there are local sources, local industry and other 
types of emitters. In that case, the law puts primary 
responsibility on the State and local jurisdiction to identify 
those sources and devise the control strategies that are 
necessary to get the reductions that are needed. Even in that 
circumstance, though, we try very hard to provide assistance. 
We know a lot about emissions, we know a lot about where they 
come from, how they can reasonably be controlled, and we try to 
make that information readily available and provide assistance 
to State and local jurisdictions.
    Senator DeMint. Thank you.
    Mr. Chairman, I yield back.
    Senator Voinovich. Thank you, Senator DeMint.
    Senator Lautenberg.
    Senator Lautenberg. Thanks again, Mr. Chairman, for giving 
us a chance to air this problem.
    Mr. Wehrum, did EPA consider costs when it selected the 
health standards for particulates that it proposed?
    Mr. Wehrum. No, Senator.
    Senator Lautenberg. You said different people disagree with 
whether or not it is essential that the standard for 
particulate matter be reduced. How do you feel about it? What 
is your view?
    Mr. Wehrum. Senator, my honest answer is, we are in a 
deliberative part of our process right now. What we have said 
from the start is we felt like we owed the public and other 
interested folks an answer as to what our tentative view was at 
the time of the proposal.
    Senator Lautenberg. So you are saying there isn't enough 
evidence to this point that you see that says, hey, we ought to 
get on with reducing this, we could do some good for the health 
of the people who live in our country? You are not satisfied 
that we are at that point now?
    Mr. Wehrum. Senator, I guess what I am trying to say is, at 
the time of the proposal, we provided the clearest indication 
we could as to what our tentative judgment would be, given the 
information we had available at the time of the proposal. But 
we asked for comment on several alternative outcomes, more 
stringent levels.
    Senator Lautenberg. Thank you. Thanks, Mr. Wehrum.
    In January of this year, the Federal Register, there is an 
EPA report and it says, taking the above consideration into 
account, the Administrator proposed to set the level of primary 
24-hour PM2.5 standard at 35 micrograms per cubic 
meter. In the Administrator's judgment, based on the current 
available evidence, a standard set at this level would protect 
public health with an adequate margin of safety from serious 
health defects, including premature mortality and hospital 
admissions for cardiorespiratory causes that are causally 
associated with short-term exposure to PM2.5. This 
is a judgment by the Administrator.
    EPA issues a report that says, stronger standards mean 
fewer deaths in nine cities studied. Source, U.S. EPA 
particulate matter health risks, assessment for selected urban 
areas, Appendix A. PM data, this is June 2005. They say that, 
with the current standards, the number of deaths from 
PM2.5 in nine U.S. cities, 4,700. I am rounding the 
number.
    But CASAC, the committee of concerned scientists, most 
protective recommendation would reduce that 4,729 down to 
2,476. This is an EPA report. EPA's most protective option and 
American Lung Association recommendations go further, that 
could mean 86 percent fewer deaths. Down to 644 from 4,729. 
This EPA, I guess they are a little funny over there.
    Is that a conclusion that you support? The Agency supports 
it?
    Mr. Wehrum. Senator, I believe you are quoting information 
from a risk assessment that was prepared by the Agency as part 
of the full suite of information that was developed to support 
the proposal that was made at the end of last year. The purpose 
of the risk assessment is to attempt to identify what sort of 
public health benefit could be achieved by adjusting the 
standard to various levels.
    Senator Lautenberg. Well, they said it could be 
substantially reduced. Do you agree that these numbers are what 
they are? I mean, it is printed here.
    Mr. Wehrum. Senator, the risk assessment has to be viewed 
in conjunction with the other available information. Most 
importantly, the evidence of health effect at various levels, 
which is primarily provided by epidemiological studies and 
supported----
    Senator Lautenberg. The Agency may be satisfied or may 
conclude that this information is reliable, but you, I 
understand you are not certain of it. I appreciate your view.
    To my colleagues, I don't understand one thing. When it was 
said that the victim is being punished, the victim being a 
particular county in the State of Georgia, as I understood it, 
and why are they being punished if those who emit those 
particulate matters, whether it comes from trucks or 
powerplants or otherwise, those are the ones that we are asking 
to reduce the amount of material that is sent out there. Why 
does that punish--you don't have to answer this, Senator, it is 
just an observation of mine--but why does that punish the 
victim?
    Finally, I think that there are times in life, in the life 
of a country like ours when conditions change and we become 
more aware of the things that we are doing, smoking, for 
instance. Smoking kills over 400,000 people a year prematurely. 
When people realized the danger, it took to people hiding in 
corners because they were ashamed of their smoking habits. It 
took that kind of exposure to bring about change.
    I wrote that law in 1986. It still has not, until now, 
reduced the number of smokers, young people that startup. So it 
takes a while.
    But even as we expand our economy, expand the numbers in 
our society, expand the number of miles driven, I say that we 
have to do it in a better way. When we talk about job loss, I 
would like to see what the job loss to India has done to reduce 
jobs in America or other cheap places for labor, and the kinds 
of environmental standards they impose on those people who work 
in those shops throughout the world.
    That is to my very good friend, and one I have great 
respect for, the Chairman of this subcommittee, he is a fellow 
who knows a lot of information, studies his subjects very 
carefully. But those situations help reduce the number of jobs 
in America, certainly reduce the wages. So we have all kinds of 
things that we are working on. But the one that we control the 
most is what we can do with EPA. I think we ought to get on 
with it, conscious of the cost, conscious of the job loss that 
might be there, and try to help replace those jobs and replace 
those facilities in some way.
    Senator Voinovich. Thank you, Senator.
    Do you want to take the stand?
    Senator Isakson. When great leaders like Senator Lautenberg 
initiated smoking reduction laws, they reduced the places where 
smokers could smoke, and they created better environments for 
those who didn't smoke by restricting it. They didn't penalize 
the people who were the victim of second-hand smoke.
    Now, in specific answer to your question, and I just used 
your analogy because I thought it was a good one, Commissioner 
Heiskell here in Walker County, GA, is south of Chattanooga, a 
city in another State, is near an interstate highway and is in 
a part of the south that is under the Bermuda High that in the 
summer causes the Smoky Mountains to be the Smoky Mountains, 
because it traps particulate matter and other pollutants that 
end up being generated lots of other places.
    So my example was this. Commissioner Heiskell, under her 
leadership, she is the sole county commissioner, voluntarily 
went into an early action compact with the EPA and has 
generated studies which we have submitted showing points of 
origin of pollution that have nothing to do with Walker County, 
GA, and in some cases nothing to do with the State of Georgia.
    So my question was, and the Administrator here has just 
said, I believe, that in the end, this is in the judgment of 
the Administrator, CRS has said that is in the judgment of the 
Administrator, they have taken all of this data to determine 
this is the standard they are going to recommend. It is an 
inflexibly rigid process that in the case of the real example I 
just stated, penalizes the victim of second-hand pollution, 
maybe not second-hand smoke. So that was the reason for the 
analogy.
    Reclaiming the rest of my time, I will use that as a 
preface to a question. I guess I will go back to something you 
just said about cost. Again, Senator Lautenberg set me up for 
this, so I will do it the best I can. He asked you if you 
considered cost in making the determination and you said no. I 
would like to ask your opinion. In your opinion, since cost 
wasn't considered, but in your opinion, if these standards go 
into effect, will the cost of energy in the United States of 
America increase?
    Mr. Wehrum. Senator, if we have done that analysis, I am 
not aware of that analysis.
    Senator Isakson. I know you haven't, because you said you 
haven't. But I was just wondering about your opinion.
    Mr. Wehrum. Senator, that is a difficult question to answer 
without doing the analysis. I would be more than happy to 
answer on the record.
    Senator Isakson. Well, the reason I ask the question is 
this. No one in this room is for asthma or for a less than 
healthy environment. No one in here is shilling for one side or 
another in the economics of the matter. But I think it is 
important to understand that economics didn't go into the 
consideration and that there are economic impacts. I would 
suggest, and I think you will hear when these people testify 
later, there are significant economic impacts. Nobody wants the 
air to be dirtier. Everybody is proud that we are cleaner than 
we were 10 years ago, and hope 10 years from now we will be 
cleaner than we are today, which we will if we continue.
    But if we stop considering all the contributing aspects of 
a decision, and only focus it on a narrow part of the 
environment or a narrow part of the question without all 
considerations, we create the unintended consequences of having 
some awfully detrimental things happen to people who have 
basically little if any control over what they are doing. In 
this case, again, Walker County.
    I am not shilling for the commissioner. She can do a fine 
job on her own. It just happens to be a circumstance that I 
think Senator Voinovich mentioned in one of his examples. There 
are areas of the country where there are communities in that 
trap. If it is in the judgment of the Administrator, hopefully 
flexibility, given the broad census of information, can be used 
to help communities be able to try and come out from under 
nonattainment, especially when they are making every effort to 
do everything they can within their control.
    So I ended up not asking a question and making a speech, 
and I apologize for that. But since I was asked, I thought I 
would try and put it in perspective. I yield back, Mr. 
Chairman.
    Senator Voinovich. Thank you, Senator Isakson.
    Mr. Wehrum, thank you very much for being here. I have some 
other questions that I am going to be submitting to you in 
writing.
    Senator Isakson. Mr. Chairman, I need to correct the record 
if I can. I ask unanimous consent that in one of my references, 
I named Walker County as Murray County. Can I correct the 
record and make it be Walker County in all circumstances?
    Senator Voinovich. The record is corrected. Also, Senator 
Carper asked me to insert for him some information here from 
the National Association of Manufacturers. Without objection, 
that will be done.
    Senator Lautenberg. Mr. Chairman, may I ask also that this 
chart that was put out referencing.
    Senator Voinovich. Without objection, so ordered.
    [The referenced information follows on page 130.]
    Senator Voinovich. Unfortunately, we have a vote. So I am 
going to have to recess the hearing and scoot back here and we 
will have our next group of witnesses. So I am going to recess 
the hearing for the time being.
    Thank you again, Bill.
    Mr. Wehrum. Thank you, Mr. Chairman.
    [Recess.]
    Senator Voinovich. First of all, I want to thank you all 
very much for being here. I have been in your position when I 
was a Mayor and Governor, and it just seems like you wait 
around and wait around and wait around, and then you have 5 
minutes to get your story out. Ms. Heiskell, I am going to ask 
you to come on third, because I ran into Senator Isakson, and I 
think he would want to hear your testimony. I hope he is back 
by then, he said he is coming back.
    We will start out with Mr. Paul, and we welcome you. Mr. 
Paul is from Dayton, OH. It is very interesting that we have 
two witnesses from the great State of Ohio today. I have 
enjoyed working with Mr. Paul on our DERA legislation. 
Hopefully we are going to get a little bit more money for that, 
Mr. Paul, so that we can do something about really making a 
difference in terms of particulate matter, and that is dealing 
with these on and off road trucks, so we can get them to put on 
some controls. So we are glad to have you here today.

 STATEMENT OF JOHN A. PAUL, SUPERVISOR, REGIONAL AIR POLLUTION 
                   CONTROL AGENCY, DAYTON, OH

    Mr. Paul. Thank you, Mr. Chairman. We certainly pledge to 
continue to work with you on those efforts.
    My name is John Paul and I am the supervisor of the 
Regional Air Pollution Control Agency, RAPCA, representing the 
health departments of six counties centered in Dayton, OH. I 
also serve as the president of ALAPCO, the Association of Local 
Air Pollution Control Officials. Whereas I am appearing here 
today on behalf of RAPCA, I will mention that my testimony is 
endorsed by ALAPCO and our sister organization, STAPPA.
    Particulate matter is not only one of the most serious air 
pollution problems facing our Nation, but it is also one of our 
Nation's most serious environmental problems. Since the 
standard was last revised in 1997, there have been over 2,000 
peer reviewed scientific studies identifying significant health 
effects of particulate matter.
    In December 2005, over 100 scientists and public health 
professionals wrote to EPA citing the serious health effects of 
fine particulate matter at levels well below the current 
standards. These include, among other things, respiratory 
problems, strokes, lung cancer and thousands of premature 
deaths. EPA estimates that more than 4,700 people die 
prematurely each year in just 9 cities at the current PM 
levels.
    With these health effects in mind, it is essential that 
Congress and EPA retain the current process for setting 
national ambient air quality standards and resist attempts to 
inject costs into the establishment of these health based 
standards. The public deserves to know whether the air they 
breathe is safe. RAPCA's staff reviewed EPA's proposal to 
revise the PM NAAQS and were deeply troubled by several major 
aspects, including the level of the PM2.5 standard 
and the exemptions that EPA has proposed.
    First, we are very concerned that EPA is ignoring the 
recommendations of CASAC, to tighten the PM standard to below 
15 micrograms per cubic meter. Second, we strongly oppose EPA's 
proposed exemptions for major source categories, such as 
agriculture and mining, from the coarse PM standard. 
Consideration of exemptions should be done during the 
implementation process when costs are factored, not during the 
process of setting a national health base standard.
    Third, we are very troubled that EPA is proposing to exempt 
major portions of the country, those with fewer than 100,000 
people, from monitoring for coarse particles. This action 
dismisses the health and welfare of millions of people 
throughout the country, in some cases nearly an entire State.
    Once EPA sets new standards, areas will have until 2015 to 
attain the new fine particle standards, and until 2018 to 
attain the coarse standard, with the possibility of extensions 
for 5 or more years to 2020 and beyond. In the meantime, States 
and localities are now in the process of developing SIPs to 
meet the existing PM standard, established in 1997.
    We believe there are several actions Congress and/or EPA 
can take now to help us in this effort and also make progress 
toward meeting the new standards. First and most importantly, 
we urge the EPA to require further cost-effective reductions 
from the electric utility sector, as well as from other 
promising sectors for national regulations, starting with 
industrial boilers and cement kilns. While EPA took a good 
first step in publishing its Clean Air Interstate Rule, CAIR, 
it is deficient in several aspects: the compliance deadlines 
are too long, the emission caps are not sufficiently stringent, 
and it covers only utilities in the east and ignores other 
large sources.
    To the extent that a Federal rule like CAIR falls short of 
what can be achieved in a cost-effective and timely manner, 
those lost emissions reduction opportunities will have to be 
made up by some other sector of the economy, generally a small 
business, for which the costs are much higher.
    Second, we need EPA to finalize its PM2.5 
implementation rule. EPA has been working on this for several 
years.
    Finally, Congress and EPA must ensure that State and local 
Agencies have adequate funding to do their jobs. This is 
particularly important at a time when agencies are 
significantly expanding their responsibilities, including 
developing PM2.5 SIPs. Unfortunately, the 
Administration's fiscal year 2007 calls for cuts in State and 
local Agency grants of $35 million below last year's level. We 
urge the Senate to fully restore these cuts, and we appreciate 
your efforts, Chairman Voinovich, in this regard.
    Furthermore, we applaud you and your colleagues on the 
Environment and Public Works Committee for your work on the 
Diesel Emission Reduction Program. I thank you for this 
opportunity to testify, and I will be happy to answer any 
questions.
    Thank you.
    Senator Voinovich. Thank you, Mr. Paul.
    Mr. Gould is the chairman of the Lenawee County Board of 
Commissioners. Thank you for being here.

  STATEMENT OF LARRY J. GOULD, CHAIR, LENAWEE COUNTY BOARD OF 
               COMMISSIONERS, LENAWEE COUNTY, MI

    Mr. Gould. Thank you.
    Mr. Chairman and members of the subcommittee, my name is 
Larry Gould. I am chairperson of the Lenawee County Board of 
Commissioners, and thank you for this opportunity to testify 
today.
    Lenawee County is largely a rural county located near a 
major metropolitan industrial area. As a consequence, Lenawee 
County has been designated by EPA as a marginal nonattainment 
county for EPA's 8-hour-ozone standard. Fortunately, Lenawee is 
not designated as a nonattainment, at least not yet.
    Senator Voinovich. Mr. Gould, would you do me a favor? I am 
having a hard time hearing you. Could you pull your microphone 
up a little closer to your mouth?
    Mr. Gould. I am very concerned that a revision of the 
PM2.5 standard by EPA would result in Lenawee County 
being designated a nonattainment for PM2.5 for the 
same reason the county is designated as a nonattainment for 
ozone. That is, Lenawee would be included in a multi-county 
nonattainment area, whose air quality is dominated largely by 
emissions from more healthy, populated counties with more 
industry.
    Even though it is not our fault, Lenawee will be forced to 
comply with restrictions that are likely to impede our attempt 
to attract new industry and expand our economic base. According 
to the Michigan DEQ, three counties with particulate matter 
materials currently show violations of the 24-hour standard 
proposed by EPA. I am aware of estimates suggesting that even a 
modest revision of both the 24-hour and the annual 
PM2.5 standards could more than double the current 
number of nonattainment counties in Michigan from 7 counties to 
16 counties. Lenawee would be one of those nonattainment 
counties.
    As a consequence, Lenawee, a rural county with a small 
population, would be in nonattainment for both ozone and 
revised PM2.5 standards. This is not a prospect I 
look forward to as the chairperson of the Board of 
Commissioners. Costs of implementing and complying with air 
quality standards are borne to some extent by State and local 
government. Those costs are unfunded Federal mandates. For 
example, the Lenawee Board of Road Commission informed me that 
highway funds made available to Lenawee County through the 
Congestion Mitigation Air Quality funding to improve air 
quality appeared to be a drop in the bucket compared to the 
funding that will be needed if EPA makes the 1997 standards 
more stringent.
    In addition, the Michigan Association of Counties informs 
me that any revised particle matter standards which would 
impose additional costs on counties would be impossible for 
them to support unless Federal funding is increased. I believe 
that imposition of a new nonattainment requirement would have a 
negative impact on economic growth and development in Lenawee 
County. Like most counties in Michigan, Lenawee continues to 
struggle with the high unemployment and uncertain economy. The 
Lenawee Chamber for Economic Development has written me 
recently to express their concern about the negative impact to 
our local economy if EPA revisits the PM2.5 
standard.
    The Chamber points out the continual loss of manufacturing 
plants in Lenawee. Most of those plants were old and relatively 
old technology. If Lenawee is classified as a nonattainment 
county, the Chamber feels that we will continue to lose jobs 
and find it difficult to attract facilities with newer and 
better environmental controls. In fact, the Chamber estimates 
that a nonattainment designation could result in a potential 
loss of over 1,000 current jobs.
    A $60 million ethanol plant is currently under construction 
in the southeast part of our county. A biodiesel blending 
facility is planned for construction in Adrian, our county 
seat. We plan to double the capacity of the ethanol plant some 
time in the future. But I am very concerned that expansion may 
face serious implications if Lenawee County is designated in 
nonattainment for PM2.5. Because if it becomes a 
blending only, I am not hopeful but not confident that the 
biodiesel facility will not encounter any problems.
    In closing, I would urge Congress and the EPA to give State 
and local government all the administrative and financial 
support they need to implement the existing standards rather 
than change the standards now. Thank you, Mr. Chairman and I am 
available for questions.
    Senator Voinovich. Thank you very much for being here 
today.
    Senator Isakson, I delayed hearing the testimony from Ms. 
Heiskell, because I figured you would want to hear her. So Ms. 
Heiskell, you are on.

  STATEMENT OF BEBE HEISKELL, COMMISSIONER, WALKER COUNTY, GA

    Ms. Heiskell. Good morning, Chairman Voinovich, members of 
the committee. My name is Bebe Heiskell. I am the sole 
commissioner of Walker County, GA.
    We are located in the northwest corner of the State, just 
south of Chattanooga. I am in my sixth year of elected office, 
with a background of 27 years in public administration. Thank 
you for allowing me to describe the impact that nonattainment 
designations have on communities like mine.
    Walker County is a vibrant community of 63,000 people. A 
variety of national and international manufacturers have 
operations there, and our corner of the State produces a vast 
majority of the world's carpet. Forty-six percent of Walker 
County's work force is employed in manufacturing.
    The hardest part of my job is funding the delivery of 
services, such as road maintenance and meeting payrolls. I am 
where the rubber meets the road, face-to-face every day with 
the taxpayers that support our governments. They recognize the 
property tax relief that a strong local economy provides.
    Quality growth is vital to Walker County, and other 
communities all over this country. From an economic development 
standpoint, being in nonattainment PM2.5 has serious 
consequences right now. Many industries begin a site location 
search using EPA's Internet list of counties in nonattainment. 
Those counties never make the list of prospect sites.
    Walker County's nonattainment status is almost exclusively 
due to outside forces on our air quality, including up to 60 
percent natural particulate matter, completely out of our 
control, that comes from other continents. We are positioned 
between Chattanooga and Atlanta, two major interstate highways 
and several large manufacturing facilities and powerplants in 
the region.
    During its foundry era, Chattanooga was one of the dirtiest 
cities in the United States, with all the associated health 
issues. Now it is one of the 10 best places to live in the 
entire country. The businesses in my community have invested 
millions to reduce their emissions. Cars are significantly 
cleaner than they were even 10 years ago. Powerplants have 
spent billions on controls, and the two large metropolitan 
areas surrounding us have come into compliance with the 1-hour-
ozone standard.
    As a community leader and an asthmatic, I appreciate all 
the EPA has done to see that we have cleaner air. Their own 
status report, September 2004, boasts that the U.S. air is the 
cleanest ever since 1970, even while the economy has expanded 
150 percent in that time period. American businesses should 
also be commended for their accomplishments. Though our air 
quality is improving, I see job losses that stem from perpetual 
nonattainment. This adds to the complexity of local governance, 
while we struggle with public opposition to these nonattainment 
designations, and many of our jobs go overseas.
    Walker County has more than 4 million square feet of vacant 
manufacturing space in large measure because of uncertainty our 
nonattainment designation creates for business prospects. Those 
are jobs we cannot recover. The ultimate cost of EPA's efforts, 
though, will be borne by American workers in local communities 
who will shoulder the burden of increased unemployment and 
significant increases in the basic cost of living.
    Georgia's late Senator Paul Coverdale said, ``Investment 
does not flow toward uncertainty.'' A never-ending 
nonattainment designation creates uncertainty for communities 
and businesses.
    I urge the Senate Committee to put EPA's standards in 
perspective with the loss of jobs and decisions of 
manufacturers to go abroad where there are no standards. The 
doubling of the global workforce has created greater 
competition for each available job. Retraining displaced 
workers that have lost their lifelong manufacturing jobs is 
difficult. These people, the ones we represent, are then 
concerned only about how they can take care of their families.
    Does EPA make decisions based upon the demands of outside 
environmental groups, or is there a practical reason to 
continue to lower this designation?
    I ran for office on quality growth, and I am a long-time 
supporter of the environment. However, there must be a balance 
in all things. Please consider the significant air quality 
improvements already in place against the impacts of unending 
nonattainment designations before allowing EPA to stack another 
set of regulations on businesses and communities like mine.
    I must add candidly that 50 percent of our economy in 
Walker County is from agribusiness. A beekeeper told me last 
week that for every three bites you put in your mouth, pollen 
is responsible for two. A high level of pollen in our monitors 
indicates we are doing well.
    Thank you for hearing my remarks.
    Senator Voinovich. Thank you very much for being here.
    Mr. Gould, I noticed you have, it looks like yellow corn 
there in that bottle.
    Mr. Gould. Yes, Senator.
    Senator Voinovich. I understand from your written testimony 
that if the county is designated as nonattainment for revised 
particulate matter, you think that may have an impact on your 
ethanol project?
    Mr. Gould. Yes, sir. I want you to know I had to take off 
my shoes yesterday morning to get here when I entered two 
commercial flights. This did not have any problems going 
through the two commercial flights. I have not had any 
problems. Let me tell you, this is how safe this product is. 
This is what is going to clean up our environment.
    Yes, Great Lakes Ethanol, in choosing to set a site for an 
ethanol plant in Lenawee County, visited a number of sites. 
Many of the sites would have never, ever complied under the 
current funding of the 8-hour ozone. We knew that. We did have 
to search out and get a more modern company, I mentioned it in 
my testimony, about the technology of the older plants. In 
today's society, they can't make it, we are losing jobs.
    We feel that we are ready to expand. We don't need $3 a 
gallon of gas to produce this. This is much less than $3. We 
will have a problem if we have to have PM2.5. That 
will create a little bit of a problem for us, probably, in the 
repermitting to double the expansion. We are currently at 57 
million. We expect to go to 100 million within another time.
    You have to understand that when you passed the Energy 
bill, you allowed us the ability to get the bankers to come 
forward. Without the bankers, we couldn't produce this. It was 
the Energy bill that made it possible for us to be able to get 
to this. There is 2.5 billion gallons of infrastructure under 
construction currently. We are just about 57 million of that.
    We want to double that. We see the need to do that. We 
cannot go for offsite to get the pollutants. That is going to 
be a problem. I believe you have the power here, you sit in the 
most powerful seat in the legislation of the United States, and 
I believe you have the power to see to it that this clean fuel 
is more of a proper answer to our clean air. Thank you.
    Senator Voinovich. Thank you for that. I was going to say 
it would be interesting, I know there are about 38 or 40 of 
these plants that are being contemplated, and I don't know how 
many are in construction right now, but it would be interesting 
to see, based on our new maps, how many of them would be 
impacted.
    Mr. Paul, you are the head of the Dayton Regional Air 
Pollution, you have six counties?
    Mr. Paul. That is correct, Mr. Chairman.
    Senator Voinovich. You come from an area right now, and I 
get the clips out of the Dayton Daily News, that has really 
been clobbered in terms of jobs. Your area of all the areas in 
the State with Adelphi and everything else has been just really 
hit.
    Have you ever, are you allowed, in doing your job, to look 
at what impact some of these regulations are having on the six 
counties that are under your jurisdiction in terms of their 
being in nonattainment? As you know, when I first became 
Governor, we were nonattainment all over the State. I worked 
really hard on it, not only because I was interested in the 
environment, but I knew, in fact, I was told when I was 
campaigning, that unless something is done about this, we won't 
get businesses to expand and certainly they will just fly right 
over us.
    So I would be interested in knowing, how do you reconcile 
some of this in terms of the local economy? You are certainly 
familiar with the urban poor and what they are up against today 
in terms of high natural gas costs. I would be interested in 
what you have to say.
    Mr. Paul. Thank you, Mr. Chairman, and I am concerned. I 
have worked in the Dayton Regional Air Pollution Control Agency 
for 33 years. So I have been there when you were mayor of 
Cleveland, when you were Governor, and we have worked on these 
issues. We believe that, and obviously as a local agency we are 
strong in this, we believe that being a responsible agency and 
providing good permits is one of the solutions.
    We are working right now on a permit for a 122 million 
gallon per year ethanol plant. We received the application last 
week. We have three people working on it. We will process that 
permit.
    I will note that that is a permit that because of good 
technology is under 100 tons per year. So it could go into a 
nonattainment area or an attainment area and it would 
essentially be a minor new source permit.
    So this is something that we can do. Technology is the key. 
If you have good technology, you can put a source in anywhere.
    Senator Voinovich. Ms. Heiskell, well, my time is up. 
Senator Isakson.
    Senator Isakson. Thank you, Mr. Chairman. Thanks to all our 
panelists for coming.
    Commissioner Heiskell, I have a question for you. Can you 
give me a specific example or examples of industries or 
business that have chosen not to come to Walker County because 
of nonattainment?
    Ms. Heiskell. We did have an auto manufacturing plant that 
was looking strongly at Chattanooga, who has taken the old 
Volunteer Army ammunition plant, 1,200 acres, and turned it 
into a very fine industrial park that has an exit off the 
interstate. They decided not to come to Chattanooga after a 
long process and went to another area outside our region that 
was not in nonattainment. That cost a lot of jobs from my 
community, as well as Chattanooga.
    Senator Isakson. Is it not true that the EPA, on their Web 
site, lists all the counties in the country that are in 
nonattainment, and that most site location companies that 
assist major American industries in locating sites go first to 
that site, rule out communities without ever coming to take a 
look at them?
    Ms. Heiskell. I am not sure they go first, but I do know 
that they do that, and it is there. It does certainly limit 
those people who are in nonattainment, their counties.
    Senator Isakson. Isn't it true that your community obtained 
at your own initiative and expense scientific studies and 
documentation that up to 60 percent of the particulate matter 
in Walker County was contributed by Alaska, Canada and Africa?
    Ms. Heiskell. That is true.
    Senator Isakson. Isn't it true that you are under the 
Bermuda High that traps, in the summer months, May to 
September, whatever is flowing over kind of gets trapped and 
stays there for 5 months?
    Ms. Heiskell. That is also true.
    Senator Isakson. You are not in charge of the weather, are 
you?
    Ms. Heiskell. No.
    Senator Isakson. Isn't it also true that in your written 
testimony you state you suffer from asthma?
    Ms. Heiskell. Yes, it is. I know a lot about asthma. I 
could answer a lot of questions on that.
    Senator Isakson. I commend you, I hope everybody will read 
the Commissioner's testimony. Because it is a testimony to the 
Clean Air Act. It is also a testimony to how reason and 
judgment has to be applied in the considerations for the 
effects of these regulations and how carefully EPA needs to 
look at the unintended consequences of establishing these new 
standards, which are solely within their judgment to establish.
    Last, I want to ask the Commissioner one other question. 
Can you think of anything that you as the Commissioner could do 
or initiate to reduce particulate matter that you have not 
already done in Walker County?
    Ms. Heiskell. No, I can't. But our problem is compliance 
and enforcement and fines that are placed upon communities that 
have no control. So we just continue to have to pay more and 
more as we stay out of compliance.
    Senator Isakson. So you are trapped, you don't have a way 
out, and you have done everything you can do within your 
control and your responsibility to meet the standards?
    Ms. Heiskell. We think that we have, except for old men 
that want to keep burning their yards.
    Senator Isakson. Well, we old men are a problem everywhere.
    [Laughter.]
    Senator Isakson. Thank you, Commissioner, and thank you for 
being here today.
    Ms. Heiskell. Thank you, Senator.
    Senator Isakson. Thank you, Mr. Chairman.
    Senator Voinovich. Mr. Paul, I am going to try and make 
this really brief. Dayton is in nonattainment now, is that 
right, the Dayton area?
    Mr. Paul. That is correct, yes.
    Senator Voinovich. All the counties or just Dayton, 
Montgomery County?
    Mr. Paul. Four of our six counties.
    Senator Voinovich. OK. Are you familiar at all with any 
information from the economic development departments of the 
city of Dayton or from the counties of situations where they 
are trying to get businesses to expand or attract businesses 
where this nonattainment has been a problem?
    Mr. Paul. I am aware that it is a problem. I meet pretty 
regularly with the chamber of commerce and we discuss that. 
Primarily we discuss the advantage of coming into attainment. 
So we talk about the different strategies that are going to 
help us to come into attainment, and then how to maintain that 
attainment once we reach it.
    Senator Voinovich. If the decision of the Environmental 
Protection Agency is to lower the standard, and by the way, the 
current standard that we have for particulate matter was 
reviewed by the OMB, and John Graham was over there in OIRA, 
who I have a great deal of respect for, and they concluded that 
based on the cost benefit and health benefits and so forth that 
this was sensible.
    If we get a new standard, isn't that going to make it even 
more difficult for your region to get businesses to expand or 
be attracted to the area?
    Mr. Paul. Yes, it could. We agree, your concerns are 
legitimate, and we agree that they need to be addressed. Where 
we think they should be addressed, though, is in the 
implementation. It is not the standard that forces the 
different requirements, but it is the implementation.
    Senator Voinovich. The problem is, it is the designation. 
That is the deal. They are designated, and I think that Senator 
Isakson made the point, when you have folks that do site 
selections, they get the information and they are advising 
people and they say, no, you don't want to go there, because 
your costs are going to probably be more there than if they 
would be somewhere else, because they are in a nonattainment 
area.
    Mr. Paul. That is correct.
    Senator Voinovich. How do you answer that?
    Mr. Paul. Well, I answer that by saying that we can't tell 
people that the air is healthy if it is not, and that the 
setting of the standards, if it is done with science, is to 
inform the public as to whether or not the air they breathe is 
healthy or not. What we do based on that is something that is 
another process.
    If I could, Senator, I would suggest that that is where 
your efforts are better aimed, is at the process, once a 
standard is set. But we owe it to the public to be honest with 
them as to whether or not the air they are breathing is healthy 
or not.
    Senator Voinovich. That trumps the fact that some 
businesses might not expand and might not be attracted to the 
area?
    Mr. Paul. No, what that does is that it says that if the 
standard should be set at 14, and that means we have a lot of 
nonattainment areas, and that means that there are going to be 
economic problems, then that is another topic that needs to be 
addressed and should be addressed and can be addressed by your 
committee.
    Senator Voinovich. Well, I wish I could assure you that 
would be the case.
    Mr. Paul. If you do, I would pledge to help you with that.
    Senator Voinovich. I know this, that one of the things that 
we are going to have to look at, and one of the things that we 
did have in Clear Skies, was a provision that said that if a 
community was in substantial compliance and moving forward with 
making the goal, that for example, in 2010, that the sword of 
Damocles would not come down on their head.
    But that is not the law today. So we have a lot of 
communities out there that know right now, Joe Koncelik, our 
EPA, he is fit to be tied. I am sure you are probably trying to 
help them on the SIP.
    Mr. Paul. Absolutely.
    Senator Voinovich. But he said, we can't do it. That is it. 
I have to be honest with the businesses, I have to be honest 
with the chamber of commerce people, we can't get it done. So 
again, this is going to be, it is hurting right now. I 
understand your position. But there has to be some balance 
here.
    Senator Isakson.
    Senator Isakson. Just a comment, Mr. Chairman, on what you 
said about Clear Skies. Clear Skies established aggressive 
goals for 70 percent reduction, SOx, NOx, mercury, but it had 
positive carrot rewards for people that were doing the right 
things and making progress. That is one of the points that I 
have been trying to make and probably haven't made well enough.
    When you have a community like Ms. Heiskell's that is doing 
everything they can do, everything within their control, and 
they are doing it for the right reasons, then to hit them over 
the head with a stick when instead you ought to get some 
carrots to reward the ones that are doing right just doesn't 
seem to be the right approach. I think that Clear Skies was a 
great step forward in accomplishing even greater reductions of 
particulate matter and other contributors to pollution while 
still encouraging people positively to get to those attainment 
levels. That is all I will say.
    Senator Voinovich. Thank you. Any other questions?
    Well, I would like to thank the panel for being here today. 
We will do the best we can. I would like to talk to you, Mr. 
Paul, about your ideas on how we can deal with this.
    Mr. Paul. Thank you, Senator. I look forward to that.
    Senator Voinovich. Thank you.
    Our next group of panelists, we have Mr. Harry Alford, who 
is president and CEO of the National Black Chamber of Commerce; 
Mr. Conrad Schneider, who is the advocacy director for the 
Clean Air Task Force, and Mr. Schneider, we are glad to see you 
back again.
    Mr. Schneider. Thank you very much.
    Senator Voinovich. Mr. Bill Christopher, who is the 
executive vice president of Alcoa. Mr. Christopher, I want to 
thank you very much for your willingness to sit through all of 
this, to get an idea of what we go through here, what we do.
    Mr. Christopher. My pleasure.
    Senator Voinovich. And the fact that we have such a 
distinguished corporate citizen from the greater Cleveland area 
here to testify on this is very much appreciated. Thank you.
    Mr. Alford, we will start with your testimony, sir.

STATEMENT OF HARRY C. ALFORD, PRESIDENT AND CEO, NATIONAL BLACK 
                      CHAMBER OF COMMERCE

    Mr. Alford. Mr. Chairman, I am president and CEO of the 
National Black Chamber of Commerce. The NBCC appreciates the 
opportunity to offer its views on the Environmental Protection 
Agency's proposed rule to establish a more stringent National 
Ambient Air Quality Standard, NAAQS, for particulate matter.
    I will summarize the NBCC's formal statement provided for 
the record and attempt to respond to any questions you or other 
members of the subcommittee may have. Mr. Chairman, the NBCC 
has 190 affiliated chapters in the United States, as well as 
international affiliate chapters and businesses, as well as 
individuals who may choose to be direct members with the 
national office.
    The 1.4 million African American businesses in the United 
States represent sales of more than $180 billion annually and 
maintain an annual spending base of over $800 billion. The NBCC 
represents 100,000 Black-owned businesses and provides 
education and advocacy that reaches all 1.4 million Black-owned 
businesses across the Nation.
    The NBCC has historically supported the efforts of the EPA 
to protect the public health of all Americans. The Clean Air 
Act and its regulatory structure, while controversial over the 
years, has been the principal driving force behind the 
improvements in our Nation's air quality and the reduction of 
harmful air pollutants. The NBCC also understands that despite 
this progress, much work remains to be done to achieve our 
Nation's air quality goals.
    In that spirit, the NBCC continues to support EPA's effort 
to control sources of pollution and the promulgation of 
regulations that are both cost-effective and based on sound 
science. As a regulated community, we cannot tolerate 
regulation for the sake of regulation and the attendant 
economic costs of such policies. The regulate and punish 
mentality must be abandoned, so that we may address our 
environmental challenges while sustaining a strong economy.
    In that regard, the NBCC is concerned that the current EPA 
proposed rule to further establish new NAAQS for urban 
particulate matter and to establish a more stringent 
PM2.5 standard is not supported by current science, 
and if adopted, could have an adverse impact on NBCC members 
and affiliates.
    Mr. Chairman, small and medium businesses alike are today 
facing a number of challenges, not the least of which are 
higher interest rates and higher energy and related operating 
costs that are eroding margins and placing pressure on 
maintaining current employment levels. The imposition of new 
regulations on industry, manufacturing and other sectors, in 
the absence of scientific evidence of a demonstrable health 
benefit, is simply not justified. The NBCC is concerned that 
these new standards would likely result in further increased 
energy prices, especially that of natural gas, a key energy 
input in urban areas.
    Beyond this, given the lack of scientific justification, 
the NBCC is concerned about the impact of the proposed rule as 
a result of the expanded number of nonattainment designations 
under the Clean Air Act. These stricter permitting requirements 
for companies that add new units or make major modifications to 
their facility make them competitively disadvantaged, as such 
requirements do not apply to similar facilities operating in 
attainment areas. Again, these restrictions would significantly 
impact urban areas.
    Also, nonattainment areas face the risk of losing Federal 
highway funding that is vitally important to urban 
redevelopment. In addition, companies that build a new facility 
or that perform a major modification to certain existing 
facilities in or near a nonattainment area would be required to 
install the most effective emission reduction technology 
without consideration of cost.
    Moreover, new emissions in the area must be offset. Thus, 
if there is no party willing to revise the offset, then the 
project resulting in increased emissions of a given pollutant 
cannot go forward. Take the Mercedes plant in Alabama, for 
instance. Our Birmingham chapter was excited that the original 
plan was to put the plant inside Birmingham city limits. Gas 
stations, restaurants, hotels, et cetera, would have benefited 
significantly. Due to attainment levels, the plant was moved 90 
miles to the south, in rural Alabama. It devastated the 
expectations and growth opportunities of the largest city in 
Alabama.
    The same scenario happened in Indiana with the Isuzu plant 
that was destined for Indianapolis, but ended up 70 miles north 
in Lafayette. We have about 250 members in the Indianapolis 
chapter and 2 in Lafayette. The impact was obvious. Those are 
but two examples.
    Sir, we try to educate our elected officials on why there 
is unemployment. It is amazing in urban areas unemployment is 
so high. We try to explain the reasons for that. One of the 
reasons is bad and ill-thought regulation.
    Thank you.
    Senator Voinovich. Thank you for your testimony.
    Mr. Schneider.

  STATEMENT OF CONRAD SCHNEIDER, ADVOCACY DIRECTOR, CLEAN AIR 
                           TASK FORCE

    Mr. Schneider. Thank you, Mr. Chairman and other 
distinguished members of the subcommittee.
    My name is Conrad Schneider. I am the advocacy director of 
the Clean Air Task Force. We are a non-profit organization 
dedicated to restoring clean air and healthy environments 
through scientific research, public education and legal 
advocacy. I would like to introduce Blake Early, who is going 
to help me by flipping the charts up here, from the American 
Lung Association. I would like the record to reflect that Mr. 
Early has been a champion of clean air for many, many years.
    Let me begin, Mr. Chairman, by wishing you a happy 
birthday, which if I am not mistaken is coming up this weekend.
    Senator Voinovich. Thank you.
    Mr. Schneider. Some of my colleagues in the environmental 
movement were a little sorry that this hearing was scheduled. I 
take a slightly different view. I think we need more attention 
to the issue of particulate matter, so I welcome this 
opportunity.
    Further reductions in fine particles are a matter of life 
and death for tens of thousands of Americans. From the 
perspective of human health, particulate matter is the most 
important pollutant that is regulated by EPA, period. EPA's 
leading air benefits consulting firm estimates that fine 
particles from powerplants and from diesel engines together 
lead to the premature deaths of nearly 45,000 Americans each 
year.
    In Ohio alone, diesel and powerplant pollution is 
responsible for the premature deaths of approximately 2,500 
people each year. In polluted cities, such as the cities that 
are in residual nonattainment, the mortality risk of breathing 
the air is comparable to the risk of living with a smoker.
    The proposed revisions, while an improvement over the 
current standards, do not go far enough in protecting human 
health. EPA should tighten the proposed standards to protect 
public health with an adequate margin of safety by tightening 
both the annual and the daily standard and setting a coarse 
particle standard. As a conservative estimate, tightening these 
standards could save as many as 10,000 additional lives each 
year. Certainly, EPA cannot justify adopting standards any less 
than those recommended by its own Clean Air Science Advisory 
Committee.
    Now, while issues of cost and implementation are and should 
be outside the scope of EPA's review, this subcommittee should 
note that the current and proposed standards are achievable, 
cost-benefit justified and can be met with affordable, 
available technology that will not damage America's economic 
vitality or the economic health of the sectors that will be 
called upon to shoulder the load.
    Although the Task Force believes it would be inappropriate 
to use cost benefit tests to determine the NAAQS standard, it 
should give the subcommittee some confidence to know that steep 
reductions in fine particles are overwhelmingly cost-benefit 
justified. The Regulatory Impact Analysis of the CAIR rule, of 
the new diesel rules and of EPA's analysis of Senator Carper's 
bill, the Clean Air Planning Act, found that the benefits in 
every case outweighed cost by 10 to 1. That is $10 of benefit 
for every $1 of cost spent.
    Now, for these new standards, the proposed standards, for 
better or for worse, the regulatory impact of these standards 
will be far in the future. The way the system works, we are 
talking about a standard that won't be achieved until 2020 or 
later. It is certainly premature today to conclude that the 
proposed new standards will be impossible to achieve. However, 
EPA and the States do need a renewed focus on making that 
happen. This is happening in Cleveland, as you know, in 
Columbus, through the MORPC process there, and in Dayton, as we 
heard.
    We do know enough today to know that a cost-effective 
program for attaining these standards would include (a) setting 
a tighter national or regional cap on powerplant sulfur dioxide 
emissions; (b) States requiring sulfur dioxide emissions on 
powerplants that have a significant impact on nearby 
nonattainment areas; (c) EPA completing the process of 
tightening standards for new locomotive and diesel engines and 
marine vessels; and also requiring on-road diesel engines to 
meet tighter emission standards when they are rebuilt; (d) 
States and local governments requiring additional 
PM2.5 reductions from private and public diesel 
fleets.
    You and Senator Carper, in your actions on the Diesel 
Emission Reduction Act and the Clean Air Planning Act are 
taking exactly the right approach, focused on the power 
industry and America's diesel fleets as the largest 
contributors to the problem, and potentially the largest 
contributors to the solution. EPA, though its CAIR rule, took 
an important step, but as you noted, it will be too little too 
late for some of these areas that are trying to meet their 
attainment obligations on time.
    If we could see the next three slides, the first one shows 
the current nonattainment designations for under the current 
standard. The next one shows how that map would change and the 
improvement under the CAIR rule in 2010, we lose much of the 
red. By 2015, the CAIR rule helps even more. The areas start to 
diminish.
    But let me go to the next slide, the very next slide, which 
is a 2 million ton sulfur dioxide cap, such as has been 
proposed by Senator Carper in the Clean Air Planning Act. This 
is the tightest standard that has been proposed, much tighter 
than the CAIR rule and tighter than ``Clear Skies''. You can 
see, we have almost got the red out.
    Unfortunately, EPA in its CAIR rule has tied the hands of 
the States in making additional powerplant reductions beyond 
CAIR more difficult than is necessary. This special treatment 
afforded the power sector is forcing States to turn to more 
expensive sources such as small business for reductions.
    EPA is working on its RIA for the new standards right now, 
and look at what it says for Ohio. If you look at the bars on 
the far left, and there is a handout at each of your places at 
the dais there that shows this, if you can't see the poster. On 
the far left of each of these things, it is for Cuyahoga County 
and Summit County, OH, the light blue bar shows what the 
benefits would be from additional reductions beyond CAIR. The 
light blue bar in each case says that powerplants should be the 
target of the next set of reductions beyond CAIR, because they 
are the most effective.
    Do you know what the other bars are? Diesels. Powerplants 
and diesels are the critical path steps that we need to take to 
achieve the standards. The same is true with respect to two 
other counties in Ohio, like Butler and Hamilton. Same story. 
Powerplant sulfur dioxide is the next lowest hanging fruit. We 
need to take the second bite at that apple to make achieving 
the standards a reality.
    Let me go to the last slide very quickly. These slides show 
that diesels in Atlanta, Chicago and New York are the biggest 
local contributors, and therefore the biggest part of the 
solution that we could have in those areas that have a sort of 
residual or persistent nonattainment.
    Then the last slide here shows that what happens in Ohio 
stays in Ohio. Although much has been made about interstate 
transport of pollution from Ohio powerplants to the northeast, 
the biggest adverse impact from Ohio plants is felt right in 
Ohio. That is where the biggest part of the solution will come, 
too. Ohio will experience the greatest benefits from additional 
reductions in Ohio powerplants.
    In closing, let me just say that Congress should leave 
alone the existing statutory and regulatory process for setting 
these standards. The current standard setting process provides 
an excellent example of what we all should want: namely, 
science-driven policy. Instead of unnecessarily complicating 
this process, for example, by introducing the false objectivity 
of a cost-benefit analysis, EPA should be urged to respect the 
deadlines in the Clean Air Act. If it takes any action at all, 
Congress should fully fund and restore the States' air grant 
program, because the people on the front lines of making these 
standards a reality will be the State air officials whose 
budget is proposed to be cut by $35 million.
    Thank you, and I would be happy to answer any questions you 
may have.
    Senator Isakson [presiding]. Thank you, Mr. Schneider.
    Mr. Christopher, you are recognized. Mr. Schneider took a 
little bit of extra time, so you need to take a little bit of 
extra time to get your worth, that is fine.

 STATEMENT OF WILLIAM F. CHRISTOPHER, EXECUTIVE VICE PRESIDENT 
   AND GROUP PRESIDENT, AEROSPACE, AUTOMOTIVE AND COMMERCIAL 
                     TRANSPORTATION, ALCOA

    Mr. Christopher. Mr. Chairman, members of the subcommittee, 
thank you for the opportunity to be before you today.
    My name is Bill Christopher. I am the group president for 
Aerospace, Automotive and Commercial Transportation for Alcoa. 
I also serve as an executive vice president for the company.
    We have over 131,000 employees in 43 countries. We are the 
world's leading supplier of alumina, aluminum and a lot of 
transportation and industrial products around the world. We at 
Alcoa hold sustainability as a core value in our business and 
in everything we do. We have hard goals and metrics for 
sustainability as key elements of our 2020 vision for the 
company. In 2005, we were honored to be named as one of the 
world's three most sustainable corporations by the World 
Economic Forum.
    I also serve on the board of directors for the Greater 
Cleveland Partnership, or GCP, and I appear before you today on 
their behalf. GCP is one of the largest metropolitan chambers 
of commerce in the country, representing more than 16,000 
small-, mid-size and large companies in the region. Because of 
our commitment to the environment and concern for the region's 
economy, GCP has asked me to provide leadership in the efforts 
to shape the business community's involvement in clean air 
compliance discussions.
    My message today will focus on the economic impact of 
imposing standards that are difficult if not impossible to 
attain in the short term. I would like to make four key points.
    First and foremost, I am not here to debate the value of 
vigorous efforts to achieve cleaner air. There is absolutely no 
doubt that cleaner air is central to the future health of our 
residents and overall quality of life. Both my company and the 
Cleveland business community have demonstrated their commitment 
to continuous improvement in the region's air quality.
    We are currently working with the Northeast Ohio Areawide 
Coordinating Agency, or NOACA, in the development of the Ohio 
State implementation plan for ozone compliance. We will also be 
actively engaged in the fine particulate process. We are 
reaching out to more than 60 local manufacturing companies to 
educate them about the situation and ask for their assistance 
in developing innovative and progressive solutions to the 
problems.
    However, since an estimated 60 percent of Northeast Ohio's 
pollutants come from outside the region, neither our sincere or 
aggressive efforts or regulatory action imposed on the region 
will bring us into compliance by 2010.
    Second, and equally important, our efforts to achieve 
cleaner air must be a delicate balance. They must take into 
account the potentially significant economic costs of places 
like Cleveland that are in the midst of a very painful economic 
transition. Third, achieving the balance is complicated, 
because the time lines for meeting the Clean Air Act standards 
are mis-aligned with the time lines for several Federal 
standards established to regulate specific industries. The gaps 
created by these misalignments add economic costs to compliance 
that could be devastating in places like Cleveland that rely on 
manufacturing today as a key element of their economy.
    We are currently reviewing studies that indicate the cost 
of compliance in the Cleveland region could be as much as $919 
million a year in order to meet the requirements by 2010. In 
contrast, the estimate is $12 million a year if we allow the 
benefits of industry regulations to take effect by 2015.
    This misalignment could cost Northeast Ohio 12,000 jobs, 
could result in a $1.1 billion reduction in disposable personal 
income and a $1.4 billion reduction in gross regional product, 
a prospect the region can ill afford. The decline in related 
tax revenues would hamper the ability of the region's public 
sector to support initiatives that help with the transition of 
the economy from one based on heavy manufacturing to a 
knowledge and service based economy.
    The stigma of a sustained designation as a noncompliance 
region will have impact on future residential and economic 
growth in spite of our significant improvements in the air 
quality in the region. This chronic condition will create an 
environment of uncertainty, significant costs that will 
accelerate the flight of private capital from the region and 
more than likely outside the country. Companies looking to 
locate facilities or expand capacity will not even consider 
communities in nonattainment, we have heard that from others.
    Finally, before any new regulations are adopted, regions 
like Cleveland should be given adequate time to understand the 
costs of proposed standards and develop strategies that reflect 
the needed economic balance. New modeling capabilities perhaps 
developed and tested in Northeast Ohio with the assistance of 
the Federal Government can help in this critical task.
    Compliance with a more stringent fine particulate standard 
in the face of standards misalignment and indeterminate 
science, before we have even had the opportunity to adequately 
address the challenges of the current SIP process, may be 
physically impossible, if not economically devastating to the 
Cleveland region. I again want to close and finally emphasize, 
achieving cleaner air is a goal we all actively support and we 
must achieve.
    However, we would like to urge the Federal Government to 
move forward with caution. We ask that you provide regions like 
Cleveland with adequate time and resources to find a balanced 
approach that allows us to address these increasingly complex 
air quality challenges in a way that minimizes the impact to 
our economy. Incremental responses to air quality compliance 
with time lines that are not in synch with national time lines 
on other industry regulations are likely to create huge costs 
in the short term and leave our region in a state of 
noncompliance for years to come.
    We respectfully ask your EPA Administrator to defer action 
on the 24-hour fine particulate matter standard at this time, 
and to assist Northeast Ohio with evaluating the impact of 
meeting current standards. Thank you.
    Senator Isakson. Thank you, Mr. Christopher. Chairman 
Voinovich will return in a minute. I will take the first round 
of questions then go to Senator Lautenberg.
    If the gentleman from the Lung Association would put back 
up that chart that had the purple bars that showed Ohio and the 
contributing States, I wanted to ask a question. I believe it 
was the last one.
    Mr. Schneider, I appreciate your testimony and I want to 
make sure I heard right what you said on this chart. You said 
that this demonstrated that Ohio was the major contributor to 
its own problems.
    Mr. Schneider. That is right.
    Senator Isakson. Isn't it true, though, and this is not 
adversarial, sometimes people preface something with that, so 
everybody says, here it comes, isn't it true though, if you 
took all the other States that do contribute to Ohio, which are 
Minnesota, Indiana, Pennsylvania, even the great State of 
Georgia, where I am from, and put them in one bar, they would 
exceed the contribution of Ohio?
    Mr. Schneider. I don't know that for sure. That certainly 
could be the case. There is a problem with interstate 
transport, there is no question about that, Senator.
    Senator Isakson. Well, wait a minute. You don't know what 
the question is yet.
    [Laughter.]
    Senator Isakson. I have added it up, and that statement was 
correct. Outside States contribute more than the State that is 
affected.
    Now, here is the hypothetical question. I go back to my 
county commissioner from Georgia, from Walker County, Ms. 
Heiskell. Assuming that Ohio had done everything within its 
capacity to reduce its contribution as a State.
    Mr. Schneider. I am looking forward to that day, sir.
    [Laughter.]
    Senator Isakson. Well I said if. I didn't say that it had. 
If it had and yet it still was in nonattainment because of the 
contributions from States who had not done everything they 
could, or industries that hadn't, is it still fair for them to 
be punished because of that fact?
    Mr. Schneider. That is not such a hypothetical question for 
me, Senator, because I live in the State of Maine. Maine is at 
the end of the tail pipe for everybody, the Midwest and 
Northeast combined.
    Senator Isakson. Would it be fair to Maine?
    Mr. Schneider. This is what I am getting to. The Clean Air 
Act has provisions that allow some recognition of what you are 
talking about. Rarely do we see a situation, when you really 
drill down and look at it, that a State has done everything 
that is reasonable to do.
    Senator Isakson. I said it was hypothetical.
    Mr. Schneider. I understand. But I am quarreling a bit with 
your premise, because it hasn't been my experience that States 
that tend to point their fingers to other States rarely have 
clean hands to do so.
    Senator Isakson. Well, this is not hypothetical. If Walker 
County, GA and Commissioner Heiskell had done everything they 
could do within their control, everything they could do within 
their control including in zoning and land use and everything 
else, and yet because of contributions of pollution from other 
areas and other States and other continents, in their case, 
they are still in nonattainment, should they be denied highway 
funds to improve their roads?
    Mr. Schneider. Well, what the State of Maine did----
    Senator Isakson. I asked about mine.
    Mr. Schneider. It is the same answer. Because I think it 
provides a good model for what may be an appropriate type of 
relief for what you are talking about.
    What our State did was they filed a petition under section 
126 of the Clean Air Act, saying that their problem was being 
caused by interstate pollution, and they called on the U.S. EPA 
to reduce that pollution to such an extent that they would no 
longer be there. They were saying, in effect, you upwind State 
are causing my problem, I am calling on the EPA to solve that 
problem. They don't sit back and just say, I am sorry, our 
hands are tied, we can't do anything about it.
    Senator Isakson. Who doesn't say that?
    Mr. Schneider. That is what I am saying the State of Maine 
did not do, and complain about it. They did something about it. 
They used the provision of the Clean Air Act to put the ball 
back in EPA's court and required that they----
    Senator Isakson. So now you would agree that if they 
weren't the main contributor and other people were, that they 
shouldn't automatically suffer from reduction of access to 
highway funds? That was the question.
    Mr. Schneider. That was the major reason that Governor King 
in Maine filed a 126 petition, was because he was demonstrating 
that----
    Senator Isakson. What was the result of the 126 petition?
    Mr. Schneider. It was granted. It resulted in the NOx SIP 
Call which cut pollution from powerplants in the East. Maine is 
now in the process of being designated in attainment.
    Senator Isakson. OK, I am using all of my time. Wait 1 
minute. So the answer is yes, and you do think that if a 
community is doing everything it can do to meet standards and 
still is punished or in nonattainment, there should be a method 
for them to come out from under the punishment?
    Mr. Schneider. In the wisdom of the legislation, the Clean 
Air Act, there is a mechanism, and it has worked before.
    Senator Isakson. In fairness to Commissioner Heiskell, 
because your assumption is that we are complaining and hadn't 
done everything we could do to appeal to EPA, that is in fact 
not the case, they have gone to immeasurable lengths and cost 
to get the scientific data to demonstrate exactly that case, 
and the EPA has been rigid. We might ought to hire you to go 
make the argument and that is another question.
    Senator Lautenberg, I am going to take one additional 
second, if you don't mind because I wanted to commend Mr. 
Alford.
    Senator Lautenberg. I don't mind at all.
    Senator Isakson. Everybody's testimony was great, but that 
is about as succinct a statement as I have heard on this entire 
issue. In fact, I saw this morning on television former Vice 
President Gore in an excerpt from a speech he made, I believe 
to Wal-Mart in Bentonville, AR yesterday, where he was 
applauded for the statement that you, Mr. Christopher, actually 
made in your testimony, which was that there is a delicate 
balance between business and the environment, and collectively 
working together, we can solve our problems.
    Mr. Alford in his testimony and you in yours took that 
approach, not that it is us versus them. But in fact together, 
in a cooperative spirit, can move the country forward. This 
again is a statement and not a question. I hope everybody will 
read the statements of everyone, but I commend the statement of 
Mr. Alford to you, because it succinctly said that we don't 
need to avoid doing anything to improve our environment, but we 
must avoid destroying what allows us to do that, which is the 
vitality of our country, our business and our economy, all for 
the sake of the symbolism of having done that.
    That is the reason I asked you the question that I asked 
you, Mr. Schneider. But I commend you on your comment and I 
appreciate your quantifying the cost under the potential 
standard that is being proposed now, Mr. Christopher.
    Mr. Christopher. Thank you, Senator.
    Senator Isakson. With that, I apologize for going over. But 
Mr. Schneider's answer was long.
    Senator Lautenberg.
    Senator Lautenberg. Not at all, I thought the questions 
were long.
    Senator Isakson. OK, fair enough.
    [Laughter.]
    Senator Lautenberg. In any event, we are not pressed with 
the smallest minute here. Mr. Chairman, to Chairman Voinovich, 
are you pressed for time? Because if you are, I will be happy 
to defer.
    Senator Voinovich [presiding]. No, go ahead.
    Senator Lautenberg. Thank you. Frankly, Mr. Alford, I am 
interested in what you say, but surprised. Because when I see 
what happens in the minority community in so many cases, and 
environment is a favorite subject of mine, even though my 
background had little to do with environment, except wishing 
for good things. I was a fairly successful leader of 
establishing a business, businesses in Cleveland, ADP, I think 
must be a member of the chamber there. I know it is a 
significant factor.
    Because too often, the areas, I grew up in the city of 
Patterson, NJ, it was largely a minority city.
    Mr. Alford. I am familiar with it, yes, sir.
    Senator Lautenberg. I lived there as a child. Typically, 
what happens is those areas are the ones, the urban areas, the 
minority areas are the ones where they put the incinerator 
plants and the Superfund sites.
    As a consequence, I think it does have some health 
significance to the individuals who live in those areas. While 
I respect the fact that minority businesses are often 
disadvantaged by all kinds of things, but I would have thought 
that you might be aware of a report by the CASAC. It is a group 
of scientists that go without challenge, created by the Clean 
Air Act. They are supposed to be scientists and not 
politicians. They see all kinds of problems as a result from 
the particulate material matter standard. They say that the 
Agency, EPA, has chosen to propose going outside the range of 
the CASAC. This science group, recommended levels, to retain 
the annual standard level at its current level.
    They say the Agency's risk assessment indicating reduced 
health risks at annual PM2.5 levels below the 
current standard was a key component in their recommendations. 
They talk about the dangers to health and so forth, and are 
fairly harsh, have come back a second time to reaffirm that. So 
the scientific authentication here I think is fairly well 
established. One can agree with it and say, look, the devil 
with the science. We don't care what they say. We have business 
and we have jobs and that is all.
    But I think ultimately, if the average citizen was given a 
choice between some job change and saving lives, especially in 
my family, in your family, all of you, I think that they would 
say, hey, listen, let's get on with this job. Mr. Christopher, 
I am interested, your company is quite a company and I marvel 
at the ability they have had to stay in business with all kinds 
of competition in the field. But the fact of the matter is, it 
doesn't seem to me like there is a rush. I might quarrel a 
little bit with your recitation of the time table. However, the 
timing of these regulations, such that major impacts will occur 
in years 2010 to 2015 timeframe, as a result complies with 
current Clean Air standards by 2010, and will require 
incremental actions.
    But if we look, the effective date of designation, there is 
no action except to do some planning, that is April 2010, the 
reports are due 2013. The attainment date is 2015, and the 
attainment date with an extension which can be received is 
2020. Doesn't that look like there is enough time to make 
adjustments? We make adjustments to all kinds of things. There 
are products that are no longer manufactured, asbestos, for 
instance, and tobacco, as we have discussed, is considerably 
diminished, because we see that there is a harm associated with 
those products.
    Well, there is a harm associated with these emissions. I am 
sorry the Chairman wasn't here, because he would have seen Ohio 
in prominent position there as being the largest contributor to 
particulate matter among a whole bunch of States. It was 
defended by the fact that there are States west of you who 
throw their particulate matter at Ohio.
    But if we have a national standard, and I will get back to 
you, Mr. Christopher, if we have a national standard, isn't it 
going to reduce the assault on the air of Maine and New Jersey 
and other places, because everybody will start contributing? I 
think there could be some exception made, Mr. Schneider pointed 
that out, on appeal. Because even if you did not operate any of 
your businesses, you would still be in nonattainment in Maine.
    Mr. Christopher, is there not any reasonableness to this 
time table to make the shifts? I mean, you agree in your early 
comments that this is something that you would like, that you 
are concerned about, the company, public health.
    Mr. Christopher. Senator, no, actually, we do agree. We 
don't debate what needs to be done or whether it needs to be 
done. It gets to be a debate of pace. The numbers I referenced 
talk about the current misalignment between industry 
regulations and meeting the 2010 standards. So if we extend 
that to 2015, the point that we are making is, we have to look 
at this in aggregate, that diesel emission regulations, which 
in fact will be fully implemented on diesels in 2010, will take 
5 to 7 years before the fleet is replaced and full benefit is 
there.
    When we get down to trying to deal with the gap between 
when these regulations will have a significant impact on 
especially NOx emissions and when we have to hit Clean Air 
standards that are required by the EPA, the cost of 
implementing in that transition is very, very high. Our point 
is, moving forward, unless these get aligned, so that yes, in 
fact, regulating emissions on coal-fired powerplants has been 
done in part of the country, it hasn't been done in the rest, 
in the absence of doing that, we won't be able in the regions 
to attack locally generated sources to the point where we will 
be able to close these gaps. We will be in nonattainment.
    To be realistic, $900 million won't be spent, because 
businesses and industry will look at that and go, this is not a 
viable economic solution. You will be more than likely to see 
the jobs flight. That is the point we are making. It is not a 
debate of whether it needs to be done. It is aligning the 
Federal regulations with the Clean Air Act and the pace at 
which we can do this.
    Senator Lautenberg. Has Alcoa moved jobs from the United 
States to other places?
    Mr. Christopher. For environmental reasons, no.
    Senator Lautenberg. For business reasons?
    Mr. Christopher. For business reasons, we have, yes.
    Senator Lautenberg. Well, I think there are options 
available in the event of----
    Senator Voinovich. The Senator is at 9 minutes.
    Senator Lautenberg. OK, I just wanted to show you this if 
you hadn't seen it.
    Senator Voinovich. Thank you.
    Senator Lautenberg. By the way, not pointing an accusatory 
finger, I promise you.
    Senator Voinovich. I understand. I have more powerplants 
than probably any State in the Nation. That is one of the 
reasons why we wanted to get Clear Skies passed.
    Mr. Schneider. Senator, and the point of that graph that 
you were just shown, which is my graph, was only to say that 
for many years, Ohio has been blamed by the Northeast for all 
of its problems. You are more than well aware of that.
    My point was to say that what happens in Ohio stays in 
Ohio, that the biggest contributor to Ohio's own problem is 
Ohio powerplants. That is the point. Cleaning them up, and I 
was suggesting in my testimony that we need to go further than 
CAIR to do that, because going further to CAIR is still cost-
effective reductions, rather than shifting the burden on to 
small businesses and industries. If you do that in Ohio, you 
will see the biggest benefits both in health but also for your 
nonattainment problem.
    Senator Voinovich. I am familiar with that. Just for the 
record, Senator Lautenberg, when I was Governor we were in 
compliance. But we sure got shot a lot.
    [Laughter.]
    Senator Voinovich. Your solution to the problem, the 126 
petitions, we have an environmental policy by lawsuit. We need 
some certainty. It is a big, big problem.
    Mr. Alford, I agree with Senator Isakson. Your testimony 
was right on.
    Mr. Alford. Thank you.
    Senator Voinovich. I can't help but think back when I was 
mayor, where we were working very, very hard to do economic 
development in the city of Cleveland, to provide jobs for those 
people who are unemployed and having all kinds of problems with 
the Environmental Protection Agency. I suggested one day, why 
don't the two of you get together and talk. On one hand, we are 
trying to create jobs, on the other, we are trying to make it 
more difficult to create jobs.
    I also just thought about the Brownfields legislation that 
we are all excited about. It would be interesting to see, I see 
Mr. Paul nodding your head, we are trying to do something in 
Dayton right now. But if you are not in attainment, new rules 
come in, the fact that somebody is going to develop a 
Brownfield site may be less likely than it would ordinarily. So 
it is just somehow bringing some sense to all of this.
    Mr. Christopher, you compete internationally. Has your 
company ever looked at your costs versus, and you said in your 
testimony, no, we haven't moved because of the environment, but 
have you, in your consideration about where you are going and 
what you are going to do, for example, in the Cleveland area, 
what impact will this have on your decisionmaking about your 
future expansions or perhaps locations?
    Today, China has no environmental regulations. They are 
talking about it. But they lose, 450,000 people a year die from 
pollution. Their pollution now is, 20 percent of the mercury in 
the Great Lakes, according to our best information, is from 
China. Their pollution is starting to reach the West Coast of 
the United States. This calls for a global discussion on this, 
and I am glad the President has now instigated this in that 
area of the world, I think five or six countries.
    Comment on that in terms of your competitive position in 
the global marketplace and what impact this has. I know for 
sure in the chemical industry that we have lost jobs, 
absolutely, because of the high cost of natural gas. One of the 
reasons why we have high cost of natural gas is that we 
encouraged people to use natural gas to generate electricity 
because it is cleaner. At the same time, and I know I could 
probably debate Mr. Schneider about this, at the same time we 
were shutting down the supply of natural gas. So obviously the 
price is going to go up.
    Mr. Christopher. For us, when we make considerations, for 
example, in Cleveland. We have a facility that has been there 
now for 75 years. It still is one of the finest wheel 
facilities in the world. It is incredibly competitive.
    Senator Voinovich. I have been there, it is terrific.
    Mr. Christopher. We have aggressively reduced not only our 
emissions, but what we even operate against our permits. It has 
allowed us to expand, we have done the offsets.
    The problem we faced moving forward in a nonattainment area 
is that we are getting to a point where being able to get 
offsets to continue to expand and modernize the facility will 
start to impact its competitiveness. Those are the concerns 
that we have. When we look at relocating in a region, and we do 
a lot of defense business that will stay inside the United 
States, we won't look at a nonattainment region, because we 
can't predict our ability to expand the operations if it is 
successful. Those are the kinds of things that start to 
influence us.
    I think on the one hand, our Cleveland plant is absolutely 
evidence of being able to be an environmentally very 
responsible citizen, set a leading standard and be very, very 
good for business. We have shared those experiences with other 
people in Northeast Ohio. On the other hand, we are starting to 
get to the point where our options are becoming limited.
    Senator Voinovich. Part of your problem, as you mentioned, 
is the uncertainty of the situation.
    Mr. Christopher. Absolutely.
    Senator Voinovich. Would you like to comment on New Source 
Review?
    Mr. Christopher. I would prefer not to.
    [Laughter.]
    Senator Voinovich. That is still up in the air, in more 
ways than one.
    So the bottom line is, all of this, because of the way it 
is going, you are going to take that into consideration in 
terms of decisionmaking.
    Mr. Christopher. Well, it has an impact on how you think 
about investing in the facility that you have, and maintaining 
the jobs that we have there. It does.
    Senator Voinovich. Right.
    Mr. Alford, would you like to make any further comment? One 
I thought of is that we never get into, we talk about the 
asthma and the particulate matter and the impact on health, and 
I am going to be doing a lot more work in that area, just to 
satisfy my curiosity, but we don't talk about the fact that if 
I don't have a job, and I can't afford health care----
    Mr. Alford. Yes, I would like to put in the record, I 
wanted to respond to Senator Lautenberg, the biggest health 
risk to African Americans anywhere, including New Jersey, is 
poverty. That is the biggest risk. The lack of funds for 
adequate health care, and a good paycheck overrides that.
    I had a very textbook example in Camden, NJ, when many 
people came and wanted to stop a cement plant from going in to 
Camden, NJ, LeFarge. I went to the black church, the NAACPs and 
showed them how many jobs the cement plant was going to impact 
Camden, and the quality of life, health care, education, 
safety, all that would be positively affected. And 85 percent 
of that community overwhelmingly received that cement plant. I 
am glad to say it is doing well.
    Senator Voinovich. I know when we built the Chrysler plant 
in Toledo, we did it in the city. A lot wanted to go to the 
Greenfields, and the environmental concerns were one of the 
concerns that were folded in.
    But one of the things was, you move jobs out into the 
Greenfields, as noted in some other testimony, it is very, very 
difficult for people to take advantage of that.
    Mr. Alford. Members of our Toledo Black Chamber of 
Commerce, Northwest Ohio Black Chamber of Commerce, did about 
30 percent of the construction of that plant, sir. It was very 
positive.
    Senator Voinovich. Do any of you have any other comments 
you would like to make?
    Mr. Schneider. Two, briefly, Senator. One is just a note 
with respect to Senator DeMint's comment about, how can it be 
that air pollution is getting better and asthma is getting 
worse and therefore there is no causation. That kind of 
misconceives the issue, a lot of people talk about that.
    The issue is, if you have an explosion in asthma, which we 
have, and we know that air pollution is a trigger for that, it 
is creating more people who are susceptible. So it is not that 
the air pollution is causing the asthma explosion, it is that 
when you have all those people that have asthma for a variety 
of different reasons, because it is a multi-factorial disease, 
a complicated disease, we have more people who could be 
negatively impacted by the air pollution that exists, even as 
it is getting better.
    Senator Voinovich. How do you answer the question about the 
job loss and people who can't afford health care? I know for 
example one chemical company came to me and said, 3 years ago, 
you have to do something about natural gas costs or we are 
going to be moving jobs out of the United States, and they went 
from, I think 22,000 jobs, they are now at 14,000. They said, 
if you keep going, we will be down to 10,000, 6,000, 0.
    Mr. Schneider. Senator, I am puzzled by your comment on 
that, because I know that you had a hearing on the impact of 
the Clean Air Act on natural gas prices. My recollection from 
that hearing was that every single witness, whether it was a 
majority witness, minority witness, EPA, DOE, private 
companies, all came in and said that there is not a 
relationship between the restrictions or the requirements of 
the Clean Air Act and gas prices going up. That just is a false 
linkage.
    Senator Voinovich. Well, the fact of the matter is----
    Mr. Schneider. That is not what they said.
    Senator Voinovich. Regulations shoved them into generating 
electricity through natural gas, because it was the easiest to 
get a permit, and it was the easiest for them to comply with 
the environmental regulations. At the same time that happened, 
environmental policies made it more difficult for us to get 
natural gas. We are in that boat right now.
    I will tell you something, just as a final comment. I think 
that this country is in real trouble today. We have never had 
more competition than we have today, worldwide. Unless we 
develop the infrastructure of competitiveness and start looking 
at things differently, and that gets into health care, that 
gets into energy, it gets into dealing with the budget 
situation that we have, there is a lot of things out there, the 
infrastructure needs that we have in the country.
    But one of them has to do with the environmental area. 
Unless we can get together, and I talk about the second 
declaration of independence, that is moving away from foreign 
sources of energy, for our national security and for our 
competitiveness. But it is not going to happen unless we get 
more things like we are doing with the DERA legislation. But 
there has to be some coming together and putting each other's 
shoes on and figuring this thing out. Not only looking at it 
from the point of view of just our country, but to look at it 
in point of view of where does this all fit globally.
    I will tell you, we cannot keep going the way we are. I 
know you don't agree with me, Mr. Schneider, but my problem is 
that I don't think, in so many of the decisions that we have 
made over the years, that we have taken into consideration the 
issue of the impact of environmental on our energy and our 
economy. It is something that unless we work it out, I think we 
are going to continue to see maybe a better environmental 
situation, but I think underneath, in terms of jobs and some of 
the other things that are so important to Americans.
    So there has to be some compromise here. We really haven't 
been able to do that. This is my eighth year on this committee.
    Thank you very much.
    [Whereupon, at 12:30 p.m., the subcommittee was adjourned.]
    [Additional statements submitted for the record follow.]
     Statement of Hon. Joseph I. Lieberman, U.S. Senator from the 
                          State of Connecticut
    Thank you, Mr. Chairman. Each and every year, 45,000 Americans die 
on average 14 years earlier than we'd normally expect because they are 
forced to inhale harmful amounts of particulate matter, or PM--a lethal 
combination of extremely small particles and liquid droplets made up of 
acids, organic chemicals, metals, and soil or dust particles--emitted 
by powerplants, diesel engines, and other sources.
    In Connecticut, PM causes more than 400 premature deaths, nearly 
800 non-fatal heart attacks, and more than 9,000 asthma attacks each 
year. There are three things I believe Americans rightly expect the 
Federal Government to do to combat this threat to public health. 
Unfortunately, we are failing at every step. First, the Federal 
Government's most fundamental responsibility is to tell Americans 
truthfully whether the concentrations of PM in the air they breathe are 
at levels that endanger their health. Unfortunately, the Environmental 
Protection Agency has proposed instead to hide the truth.
    EPA has proposed to set national ambient air quality standards for 
particulate matter above the limits that the scientists, doctors, and 
public servants on the Congressionally-chartered Clean Air Science 
Advisory Committee have identified as necessary to protect public 
health. Not surprisingly, the political officials are unable to 
identify any scientific basis whatsoever for disregarding the results 
of the expert panel's exhaustive work.
    On top of that, in determining whether the concentration of 
particulate matter in an area exceeds national standards, EPA has 
proposed ignoring dust from mining operations and farm fields. It is, 
however, the size of a particle, not its origin, that determines the 
harmful effect on lungs. Particles from mines and farms are the same 
deadly size as ones emitted by powerplants and diesel engines.
    And, bizarrely, EPA has proposed exempting areas containing fewer 
than 100,000 people from the requirement to monitor concentrations of 
coarse particulate matter. Apparently, EPA's top officials do not 
believe that rural Americans have the same right as urban ones to know 
whether the air they breathe contains harmful levels of pollution.
    My first request, then, is for EPA to abandon its plans to conceal 
from Americans the true extent of their current exposure to harmful 
levels of particulate matter. Specifically, I ask that EPA's final 
particulate standards adopt the limits that the Clean Air Science 
Advisory Committee recommended, omit the exemptions for mining and 
agricultural dust, and not exempt smaller communities from monitoring.
    The second action that I believe the Federal Government should take 
to help free Americans from the menace of air-borne particulates is to 
implement and enforce the existing Clean Air Act provisions that can 
directly bring about the most dramatic and cost-effective emission 
reductions. Unfortunately, EPA has chosen instead to half-implement, 
and even to undermine, the statutory provisions. For instance, in the 
rule that EPA promulgated recently under the Clean Air Act section that 
mandates cuts in the interstate transport of air pollution, the Agency 
avoided requiring steep, prompt, and highly cost-effective reductions 
in particulate-forming emissions from fossil fuel-fired powerplants. 
Because EPA has chosen to let off the hook the wealthy, heavy, upwind 
polluters that could have achieved the most dramatic reductions at the 
lowest cost, State and local officials such as those testifying before 
this subcommittee today are left to piece together, from a large number 
of expensive and politically difficult measures, the remaining cuts 
that are needed to protect public health.
    Dealing another blow to State and local governments, EPA has in 
recent years taken pains to undermine the Clean Air Act provisions that 
require coal-fired powerplants to accompany otherwise pollution-
increasing renovations with environmental upgrades that slash a plant's 
pollution by ninety percent or more. According to the Agency's own 
inspector general, EPA's polluter-friendly rule changes stand to 
prevent Federal, State, and local enforcers from securing millions of 
tons-per-year of highly cost-effective reductions in particulate-
forming emissions. Again, the consequence will be that State and local 
governments must squeeze the needed reductions from myriad smaller 
businesses that cannot deliver them as easily.
    My second request, then, is for EPA to return to a policy of 
implementing, as opposed to undermining, the Clean Air Act provisions 
that can directly achieve the largest and most cost-effective cuts in 
particulate-forming emissions. Specifically, I ask that EPA undo the 
provisions in its pollution transport rule that make it difficult for 
States to obtain power-plant pollution cuts beyond the insufficient 
ones required by EPA's rule. Further, I ask that EPA abandon its 
regulatory effort to undermine the Clean Air Act's New Source Review 
provisions and resume enforcing those provisions against coal-fired 
powerplants that flout them.
    Finally, I believe the public is justified in expecting the Federal 
Government to appropriate reasonable amounts of money to help State and 
local governments bring the areas under their care into line with the 
national ambient air quality standards for particulate matter. 
Unfortunately, under the Bush administration's proposed budget for 
fiscal year 2007, the Federal Government would devote $35 million less 
than it has in fiscal year 2006 to helping State and local governments 
install air pollution monitors and develop and implement plans to 
reduce particulate concentrations. While the House of Representatives 
recently voted to restore all the money that the Administration had 
cut, the bill approved by the Senate Appropriations committee would 
restore less than half the amount.
    My final request, then, is that we members of the Senate spend less 
time entertaining calls to put off the essential work of cleaning up 
harmful air pollution, and that we exert more of an effort to 
appropriate the funds necessary to allow that life-saving work to 
proceed now.
    We owe that to Americans. A breath of fresh air should be a right 
not a danger. Thank you, Mr. Chairman.
                               __________
Statement of William Wehrum, Acting Assistant Administrator, Office of 
        Air and Radiation, U.S. Environmental Protection Agency
    Good morning and thank you for the opportunity to discuss our 
current review of the National Ambient Air Quality Standards (NAAQS) 
for particulate matter (PM). As you know, the NAAQS for PM and other 
criteria pollutants are central to the Clean Air Act's regime for 
protecting public health and the environment from air pollution. The 
Clean Air Act requires that every 5 years EPA review the NAAQS and 
revise them as may be appropriate. We are now engaged in this review of 
the PM NAAQS, and I am pleased to be here today to talk to you about 
the review, the resulting proposal to revise aspects of the PM 
standards, and the process for aiding State, local and tribal 
jurisdictions in meeting any revised standards.
    As context for the current PM NAAQS review, I will begin by noting 
the impressive progress this Nation has made in combating air pollution 
and the critical role the NAAQS process has played in achieving that 
success. Since enactment of the Clean Air Act in 1963, Congress has 
committed the Federal Government to work with State and local 
jurisdictions to ensure that the American people have clean air to 
breathe. And we have made great progress in cleaning up air pollution 
even as our economy has grown. Between 1970 and 2005, gross domestic 
product increased 195 percent, vehicle miles traveled increased 178 
percent, energy consumption increased 48 percent, and U.S. population 
grew by 42 percent. During the same time period, total emissions of the 
six principal air pollutants dropped by 53 percent. From 1990 to 2002, 
air toxic emissions declined by 42 percent.
    The NAAQS process has been the linchpin of our success in reducing 
concentrations of criteria air pollutants. The Clean Air Act 
establishes a two-step process for addressing such pollutants. First, 
it requires that we set and periodically review and revise as 
appropriate NAAQS to protect public health and welfare. ``Primary'' 
NAAQS must be set at a level requisite to protect public health with an 
adequate margin of safety, and ``secondary'' NAAQS must be set at a 
level requisite to protect public welfare from adverse effects 
(including effects relating to visibility, soils, vegetation, water, 
crops, climate, and man-made materials.) Both types of NAAQS are to be 
based on the latest available scientific information. Compliance costs 
may not be considered in setting the standards. In the second step of 
the NAAQS process, the statute calls on the States, with EPA 
assistance, to develop and implement plans for attaining and 
maintaining the primary and secondary standards. At this second step, 
cost and other factors may be considered in designing implementation 
plans that make good environmental and economic sense.
    Of the many air pollutants regulated by EPA, fine particles likely 
pose the greatest threat to public health due to the number of people 
exposed. Studies in the peer-reviewed literature have found that these 
microscopic particles, which can reach the deepest regions of the 
lungs, are associated with premature death, aggravation of heart and 
respiratory disease, asthma attacks, lung cancer, and chronic 
bronchitis. Estimates based on the literature indicate the possibility 
that thousands of premature deaths occur each year at current PM levels 
in some of the country's largest urban areas. PM's impacts also lead to 
increased hospitalizations, emergency room and doctor visits, lost work 
days, lost school days, and increased use of medication, among other 
adverse effects.
    Many of EPA's recent regulations to reduce air pollution are 
designed in large part to reduce fine particles. In particular, EPA's 
2004 Clean Air Nonroad Diesel Rule and 2005 Clean Air Interstate Rule 
will significantly reduce levels of fine particles in many communities.
    The Bush administration is committed to using the best science 
available in reviewing the PM NAAQS and deciding whether the standards 
should be revised. Since the last review of the PM NAAQS, a large 
number of peer-reviewed studies relevant to assessing the health and 
welfare effects of PM have become available. For this review, EPA 
evaluated studies that addressed a wide range of issues including PM 
toxicology, epidemiology, physics, chemistry, and measurement; sources 
and emissions; environmental effects and exposure. Approximately 2000 
studies were referenced in EPA's assessment of the potential health and 
environmental impacts of particles. EPA's assessment encompassed a 
review of the strengths and limitations of an extensive body of 
toxicological and epidemiological evidence evaluating potential 
morbidity and/or mortality effects. They also included a critical 
review of potential welfare effects related to PM, including effects on 
visibility, vegetation and ecosystems, and man-made materials. 
Considered together, the studies significantly advanced our 
understanding of PM's effects on public health and welfare and reduced 
the scientific uncertainty associated with some important aspects of 
the science.
    In assessing potential human health effects, EPA considered a wide 
range of epidemiologic studies evaluating short-and long-term exposures 
to particles in single and multiple cities. These studies addressed a 
variety of health endpoints including respiratory and cardiovascular 
effects, which in some cases lead to premature mortality. As part of 
our assessment, we also considered impacts on potentially susceptible 
or vulnerable subpopulations. A number of such population subgroups 
have been identified, including individuals with preexisting heart or 
lung disease, children, and the elderly.
    EPA's assessment of the relevant studies was set forth in a 
``criteria document,'' which was completed in October 2004. Drawing on 
what EPA considers to be the most reliable, relevant studies, EPA also 
performed a risk assessment to estimate the degree to which various 
approaches to revising the standards would affect the public health 
risks posed by PM. In addition, EPA's technical staff prepared a 
``staff paper'' to bridge the gap between this science assessment and 
the policy judgments required in making decisions on the NAAQS. It 
provided an integration of the most policy-relevant scientific 
information (namely, the information relating to possible indicator, 
averaging time, form, and level of potential standards), presented and 
interpreted the major findings of the risk assessment, and included 
staff-identified ranges of policy options and alternative standards for 
the Administrator to consider.
    In keeping with their importance to the review and revision 
process, the criteria document, staff paper and risk assessment were 
developed with extensive involvement of representatives of the 
scientific community, industry, public interest groups and the general 
public. We held many public meetings with the Clean Air Scientific 
Advisory Committee (CASAC)--a statutorily-mandated group of independent 
scientific and technical experts appointed by the Administrator to 
review criteria documents and existing NAAQS and make recommendations 
as appropriate--to receive their comments on successive drafts of the 
criteria document, staff paper and risk assessment.
    Based on the results of this extensive scientific review and 
assessment process and considering the policy implications of that 
assessment, EPA Administrator Steven Johnson signed a proposal on 
December 20, 2005 to revise the PM NAAQS to better protect public 
health and welfare from the harmful effects of PM. The proposed suite 
of standards reflected the Administrator's best provisional judgment 
regarding the application of the scientific information about how 
ambient levels of PM impacts public health and environment. In our 
proposal, we also sought public comment on alternative standards in 
recognition of the range of standards that the scientific record could 
support.
    Since issuing the proposal, the Agency has made additional efforts 
to involve the public in this important rulemaking. On March 8, 2006, 
we held all-day public hearings in Chicago, Philadelphia and San 
Francisco. In addition, there was a 90-day period from January 17, 
2006-April 17, 2006 during which the public could submit written 
comments to the Agency. Before coming to a final decision on the PM 
NAAQS, EPA will review and analyze the issues, evidence, and arguments 
raised in oral and written comments. We are now in the midst of this 
process.
    We recognize that additional scientific studies on the health 
effects of PM have been published since the PM criteria document was 
completed. As a continuation of the scientific review process, EPA has 
been conducting a survey of the scientific evidence reported in the 
recent literature with emphasis placed on specific studies that are 
most relevant to the proposed PM NAAQS decision. The survey will ensure 
that before making a final decision, the Administrator is fully aware 
of the new science that has developed. We intend to provide the public 
with an opportunity to review the results of the survey prior to making 
a final decision on revising the PM NAAQS. After our review is 
complete, the Administrator will make final decisions regarding 
revisions to the PM NAAQS. We are scheduled to issue a final rule 
reflecting those decisions by September 27, 2006.
    While EPA may not consider compliance costs in setting NAAQS, the 
Agency typically prepares a Regulatory Impact Analysis (RIA) for NAAQS 
rules to provide information to States and the public on the controls, 
disbenefits and costs that meeting the NAAQS would likely entail. In 
the case of the current PM NAAQS review, EPA will provide a national-
scale assessment of costs and benefits in the RIA for any revised 
PM2.5 standards. We will share the results of our national-
scale assessment with you as soon as they are available. In the RIA, 
EPA will ensure that all information presented clearly distinguishes 
between the costs and benefits of those efforts necessary to meet 
current standards and additional--i.e. incremental--costs and benefits 
that will be incurred as a result of efforts to reach attainment with 
any revised standards. The RIA will also examine the extent to which 
controls applied to attain the current standards by 2015 would also be 
effective to help attain alternative, more stringent standards by 2020.
                   proposed revisions of the pm naaqs
    The proposed revisions of the PM NAAQS address two categories of 
particles: fine particles, or PM2.5, which are 2.5 
micrometers in diameter or smaller and inhalable coarse particles, or 
PM10-2.5, which are smaller than 10 micrometers in diameter 
but larger than PM2.5. We have had specific NAAQS for 
PM2.5 since 1997 and for particles 10 micrometers and 
smaller, or PM10, since 1987. (We also have had NAAQS for 
various types of particles, of which both fine and coarse PM are 
subsets, since the inception of the NAAQS in 1971.) Based on the latest 
scientific information, we proposed specific revisions to the current 
PM standards and requested comments on a range of alternative standards 
for both fine and inhalable coarse particles. The proposed revisions 
address changes to both the primary standards to protect public health 
and the secondary standards to protect public welfare including 
visibility impairment.
    With respect to primary standards to protect public health, EPA 
proposed :
    1. Lowering the level of the 24-hour fine particle standard from 
the current level of 65 micrograms per cubic meter (mg/m3) 
to 35 mg/m3. We requested comment on retaining the current 
level of the standard (65 mg/m3); on levels between 25 and 
65 mg/m3; and on alternative approaches for selecting the 
level of the standard.
    2. Retaining the level of the annual fine particle standard at 15 
mg/m3. We requested public comment on a range of levels from 
l5 mg/m3 down to 12 mg/m3.
    3. Establishing a new indicator for inhalable coarse particles -- 
PM10-2.5. Reflecting the available science on PM health 
effects, the proposed new PM10-2.5 standard would include 
any ambient mix of PM10-2.5 which is dominated by 
resuspended dust from high-density traffic on paved roads and PM 
generated by industrial sources and construction sources, and excludes 
any ambient mix of PM10-2.5 which is dominated by rural 
windblown dust and soils and PM generated by agricultural and mining 
sources. We proposed setting a 24-hour standard for inhalable coarse 
particles at 70 mg/m3 (98th percentile). Under the proposed 
regulations, agricultural sources, mining sources, and other similar 
sources of crustal materials would not be subject to control in meeting 
the standard. We further proposed monitoring siting criteria which 
would determine which monitoring results could be used for comparison 
with the proposed PM10-2.5 NAAQS. We requested comment on 
selecting a level down to 50 mg/m3 (98th percentile) or 
below and/or selecting an unqualified PM10-2.5 indicator. We 
also asked for comment on whether we should retain the current 24-hour 
PM10 standard in place of the proposed PM10-2.5 
standard or whether we should not establish a coarse PM standard at 
this time pending the development of a coarse fraction monitoring 
network and further research on the health effects of coarse particles.
    We also proposed that the secondary standards for both fine and 
coarse particles be identical to the primary, health-based standards. 
We requested comment on setting a sub-daily (4-8 hour averaging time) 
PM2.5 standard to address visibility impairment, within the 
range of 20-30 mg/m3 (with a form within the 95th 
percentile).
    Inhalable coarse particles, or PM10-2.5, is a subset of 
the type of PM controlled by existing standards for PM10. 
Issuance of a standard for PM10-2.5 would thus raise the 
issue of what should happen to the current PM10 standards. 
We proposed that the current annual PM10 standards should be 
revoked in all areas based on our view that the current scientific 
evidence does not support setting a standard for long-term exposure of 
inhalable coarse particles. In light of our proposal to adopt a 24-hour 
primary standard for PM10-2.5, which would address short-
term exposure, we proposed to revoke the current 24-hour 
PM10 standard, except in areas that have at least one 
monitor that is located in an urbanized area with a minimum population 
of 100,000 people and that has measured a violation of the 24-hour 
PM10 standard based on the most recent 3 years of data. In 
essence, we proposed to retain the current 24-hour PM10 
standard only in areas which could be in violation of the proposed 
PM10-2.5 standard, in light of the proposed monitoring 
siting criteria.
    In a separate rule that is partially tied to the proposal to revise 
the PM NAAQS, we proposed revisions to the ambient air monitoring 
requirements for PM and other criteria pollutants. The proposed changes 
support the proposed revisions to the PM NAAQS, including new minimum 
monitoring network requirements for inhalable coarse particles 
(PM10-2.5) and criteria for approval of applicable sampling 
methods. These proposed changes would also establish a new nationwide 
network of monitoring stations that take an integrated, multi-pollutant 
approach to ambient air monitoring in support of multiple objectives. 
The proposed amendments would modify the current requirements for 
ambient air monitors by focusing requirements on populated areas with 
air quality problems. The purpose of these proposed changes is to 
enhance ambient air quality monitoring to better serve current and 
future air quality management and research needs.
                     implementation of the pm naaqs
    The Clean Air Act gives States the lead in implementing NAAQS 
standards. In the case of any revised PM NAAQS, implementation would be 
governed by subpart 1 of part D of title I, which provides States with 
the most flexibility in determining when and how to achieve attainment 
of the standards.
    If the PM NAAQS are revised, EPA will work with States to ensure a 
smooth transition between current standards and any revised standards 
so that their control efforts are as cost-effective as possible. As a 
first step, in conjunction with our December 2005 proposal to revise 
the NAAQS, EPA issued an advanced notice of proposed rulemaking (ANPR) 
in January 2006 identifying and seeking comment on a number issues 
related to the transition between current PM standards and the proposed 
revisions to fine particle standards and proposed new coarse particle 
standards. In the ANPR, EPA laid out for both proposed fine and coarse 
PM standards possible timelines for designations of areas as in 
attainment or nonattainment of the standards, submittal of State 
Implementation Plans (SIPs), and attainment dates. As EPA explained in 
the ANPR, we would likely designate areas as in attainment or 
nonattainment of any revised fine particle standard no later than 
December 2009, and designations would become effective in April 2010. 
Assuming designations took effect then, States and other implementing 
agencies would likely have until April 2013 to submit their attainment 
demonstrations and SIP revisions. For any areas designated as 
nonattainment for a revised fine PM standard, the initial attainment 
date would be ``as expeditiously as practicable, but no later than 5 
years from the date of designation,'' or April 2015. Some areas might 
also qualify for an extension of the attainment deadline by up to 5 
years, or April 2020. Assuming the ANPR timeline were followed, any 
additional controls needed for attainment would likely phase in between 
2013 and 2015 or up to 2020 for areas that qualify for an extension.
    As for any transition from a PM10 to a 
PM10-2.5 standard, since the deployment of the necessary 
monitoring network would take several years, it is likely that 
nonattainment designations for any new PM10-2.5 standard 
would not occur until 2013 at the earliest. Submittal of nonattainment 
area SIPs would follow in 2016, and attainment dates would be no later 
than 2018, or 2023 in the case of areas that qualified for the maximum 
5-year extension. In the ANPR, EPA also shared its preliminary thinking 
about how to address some of the key New Source Review issues related 
to the proposed coarse PM standard.
    We issued the ANPR as a companion piece to the PM NAAQS proposal so 
that we could give our State, local and tribal partners insight into, 
and an opportunity to help shape, any transition to revised standards. 
We believe any actions a State or other jurisdiction takes to meet the 
1997 PM NAAQS would be helpful in meeting any revised PM NAAQS. We 
understand that many States and local governments are concerned about 
facing another round of designations for a NAAQS. I assure you that we 
are committed to working through this process with them.
    Attaining both the current fine particle standards and any possible 
revised fine particle standards will involve a combination of national, 
regional, and local emissions control measures. EPA has already 
established several national regulations to reduce emissions 
contributing to fine particle pollution from gasoline and diesel 
engines. In addition, in May 2005, EPA finalized the Clean Air 
Interstate Rule, with emissions caps requiring significant reductions 
in sulfur dioxide (SO2) and nitrogen oxides (NOx) emissions 
from electric generating units in the eastern United States in 2010 and 
2015. Both SO2 and NOx can contribute to particle formation. 
States are now evaluating a range of local emission reduction 
strategies to address emissions from additional stationary, mobile, and 
area sources.
    The Administration is committed to working with Congress to pass 
Clear Skies legislation to improve upon our CAIR and CAMR rulemakings. 
The President's Clear Skies Act would require a 70 percent annual cut 
in powerplant pollution (NOx, SOx and mercury) nationwide when fully 
implemented. The legislation would expand the successful ``cap and 
trade'' approach used in the Title IV Acid Rain Program, which has 
obtained significant pollution reductions sooner than expected, 
achieved nearly full compliance, and did not significantly impact the 
price of electricity for American consumers and businesses. In similar 
fashion, Clear Skies would significantly improve air quality, maintain 
energy diversity, keep electricity prices affordable for Americans, and 
encourage more reinvestment and new jobs in urban communities. 
Legislation is preferred over administrative rulemaking because it 
fends off litigation and delay, and it would allow creation of a 
nationwide program rather than just a regional one.
                               conclusion
    In conclusion, the latest science tells us that current levels of 
particle pollution in some of the country's largest urban areas 
continue to threaten public health. The Clean Air Act tells us how to 
proceed in setting the standards and offers flexibility in how to 
implement those standards. We are sensitive to the concerns that 
members of this Committee and others have raised about the challenges 
in meeting any revised PM NAAQS. We are committed to setting the 
standards based on science and implementing them based on common sense.
                               __________
      Statement of John Paul, Supervisor, Regional Air Pollution 
                             Control Agency
    Good morning, Mr. Chairman and members of the subcommittee. I am 
John Paul, supervisor of the Regional Air Pollution Control Agency 
(RAPCA) in Dayton, OH and president of ALAPCO, the Association of Local 
Air Pollution Control Officials. While I appear here today on behalf of 
RAPCA, my testimony is endorsed by ALAPCO and its sister organization, 
STAPPA--the State and Territorial Air Pollution Program Administrators. 
These two national associations of clean air agencies in 54 States and 
territories and over 165 major metropolitan areas across the United 
States have primary responsibility under the Clean Air Act for 
implementing our Nation's air pollution control laws and regulations 
and, even more importantly, for achieving and sustaining clean, 
healthful air throughout the country.
    I commend you for convening this hearing on the U.S. Environmental 
Protection Agency's (EPA's) proposed revisions to the National Ambient 
Air Quality Standards (NAAQS) for particulate matter, or PM. The PM 
NAAQS are critically important to State and local clean air agencies, 
which have an extensive record of comments to EPA on this issue. I, 
along with colleagues of mine from across the nation, provided 
testimony at all three of EPA's public hearings; we also offered 
comprehensive written comments.
    Particulate matter is not only one of the most serious air 
pollution problems facing our nation, it is one of our country's most 
significant environmental problems. And the science bears this out.
    In December 2005, over 100 doctors, scientists and public health 
professionals wrote to EPA Administrator Stephen Johnson citing the 
serious health effects of fine particulate matter, concluding:

          The major health effects of fine particulate matter include 
        reduced lung function, cough, wheeze. missed school days due to 
        respiratory symptoms, increased use of asthma medications, 
        cardiac arrhythmias, strokes, emergency room visits, hospital 
        admissions, lung cancer, and premature death--at levels well 
        below the current national air quality standards.

    Since the PM standard was last revised in 1997, there have been 
over 2,000 peer-reviewed scientific studies analyzing the health and 
welfare effects associated with this pollutant. The body of evidence, 
according to the scientists and health professionals, ``validate[s] 
earlier epidemiological studies linking both acute and chronic fine 
particle pollution with serious morbidity and mortality . . . and 
identify[ies] health effects at lower exposure levels than previously 
reported'' (December 2005 letter). In fact, EPA's own risk assessment 
estimates that more than 4,700 people die prematurely each year in just 
nine U.S. cities at the current PM2.5 levels.
    The Clean Air Act defines the process EPA must follow in setting, 
or revising, the NAAQS. In sections 108 and 109, the Administrator is 
required to set, and revise at 5-year intervals, standards ``the 
attainment and maintenance of which in the judgment of the 
Administrator, based on such criteria and allowing an adequate margin 
of safety, are requisite to protect the public health.'' The 
Administrator is also required to appoint an ``independent scientific 
review committee''--the Clean Air Scientific Advisory Committee 
(CASAC)--that ``shall recommend to the Administrator any new [NAAQS] 
and revisions of existing criteria and standards as may be 
appropriate.''
    There are existing NAAQS for two kinds of particulate matter: one 
for particles 10 micrometers and smaller (PM10). set in 
1987, and one for fine particles 2.5 micrometers and smaller 
(PM2.5), established in 1997. In December 2005, EPA proposed 
revisions to the PM standards, including changing the fine particle 
standard and creating a new standard for inhalable coarse particles 
(PM10-2.5), which are smaller than 10 micrometers in 
diameter, but larger than PM2.5.
    In its proposal, EPA recommends, among other things, (1) lowering 
the 24-hour fine particle standard from the current level of 65 
micrograms per cubic meter (mg/m3) to 35 mg/m3, 
(2) retaining the level of the annual fine standard at 15 mg/
m3 and (3) replacing the current PM10 standard 
with a new 24-hour PM10-2.5 standard at 70 mg/m3. 
In addition, EPA proposes exempting from the coarse particle standard 
``any ambient mix of PM10-2.5 where the majority of coarse 
particles are rural windblown dust and soils and PM generated by 
agricultural and mining sources.''
    We have carefully reviewed EPA's proposal to revise the PM NAAQS 
and are deeply troubled with several major aspects, including the 
levels of the PM2.5 standard and the exemptions EPA 
proposes.
    First, we are very concerned that EPA did not follow the 
recommendations of CASAC in setting the PM2.5 annual 
standard. Rather than relying upon the consensus recommendation CASAC 
had proposed, EPA instead chose to retain the current annual standard. 
Perhaps not surprisingly, this prompted a significant reaction by 
CASAC, which sent EPA Administrator Stephen Johnson a letter (March 21, 
2006) requesting that EPA reconsider its proposal and set the annual 
standard ``within the range previously recommended'' (13-14 mg/
m3) and clarifying why it was important to select a tighter 
level. CASAC stated:

          In summary, the epidemiological evidence, supported by 
        emerging mechanistic understanding, indicates adverse effects 
        of PM2.5 at current average annual levels below 15 
        mg/m3. The [CASAC] PM Panel realized the 
        uncertainties involved in setting an appropriate health-
        protective level for the annual standard, but noted that the 
        uncertainties would increase rapidly below the level of 13 mg/
        m3. That is the basis for the PM Panel 
        recommendation of a level at 13-14 mg/m3. Therefore 
        the CASAC requests reconsideration of the proposed ruling for 
        the level of the annual PM2.5 NAAQS so that the 
        standard is set within the range previously recommended by the 
        PM Panel, i.e., 13 to 14 mg/m3.

    Accordingly, we strongly urge that EPA follow CASAC's advice to 
tighten the annual PM2.5 standard by selecting a level 
within the recommended range.
    We are also disappointed with the level EPA set for the daily 
PM2.5 standard. While we appreciate that EPA selected a 
level of the standard within the range recommended by CASAC, we note 
that the level--35 mg/m3--was not only at the high end of 
the range, but was inconsistent with the EPA Staff Paper recommendation 
(June 2005) that conditioned adoption of 35 mg/m3 on 
tightening the annual standard.
    With respect to the PM10-2.5 standard, we strongly 
oppose EPA's exemptions for major sources contributing significantly to 
coarse PM emissions, especially agriculture, mining and other sources 
of crustal material. This appears to be an unprecedented action: to our 
knowledge EPA has never before set a NAAQS that allows major source 
categories to be altogether excluded from control requirements. CASAC 
is also concerned, commenting that its members ``neither foresaw nor 
endorsed a standard that specifically exempts all agricultural and 
mining sources. . . .''
    We are very concerned that excluding these sources implies their 
emissions are not harmful, yet EPA does not provide any such evidence. 
It appears likely that pesticide-, herbicide- and toxic-laden coarse 
particles from agriculture, and metals-coated coarse particles from 
mining, respectively, pose risks similar to urban coarse PM that is 
dominated by resuspended dust from high density traffic and industrial 
sources. In addition, rural windblown dust (i.e., crustal material) may 
contain toxic elements. If any exemptions are warranted, they should be 
considered during the implementation phase--when costs and 
practicability issues are allowed to be considered--but not during the 
process of setting a health-based standard.
    We are also very troubled that EPA is proposing to exempt major 
portions of the country--those with less than 100,000 people--from 
monitoring for coarse particles. This action has the practical effect 
of ignoring the health and welfare of millions of people throughout the 
Nation. We believe this is not only an unprecedented action, it totally 
ignores the recommendations of CASAC, which concluded ``it is essential 
to have data collected on the wide range of both urban and rural areas 
in order to determine whether or not the proposed . . . standard should 
be modified at the time of future reviews'' (March 21, 2006).
    Finally, we believe, as CASAC suggests, that EPA should set a sub-
daily standard for PM2.5 to protect against visibility 
impairment. In its proposal, EPA relies on the primary daily standard 
for visibility protection, but this is not sufficient to help States 
and localities make reasonable progress toward their regional haze 
goals, as mandated under the Clean Air Act.
    Once EPA sets the new PM standards, States and localities will 
begin their process of taking steps toward meeting the standards. This 
will involve, among other things, monitoring air quality, designating 
new ``nonattainment'' areas and developing State Implementation Plans 
(SIPs) that include all of the enforceable measures--Federal, State and 
local--necessary to bring areas into attainment by the required 
deadlines. Areas will not be required to reach attainment of the new PM 
standards until 2015 for PM2.5 and 2018 for 
PM10-2.5, with the possibility of additional extensions for 
5 or more years.
    In the meantime, States and localities are now in the process of 
developing SIPs to meet the existing PM2.5 standard, 
established in 1997. There are several actions Congress and EPA could 
take now, not only to assist State and local agencies in implementing 
the existing PM standard, but to also help make progress on our glide 
path toward achieving the new PM standards.
    First, most areas of the country will need to rely heavily upon 
national or regional strategies to meet the existing PM2.5 
standard. These include strategies to regulate electric generating 
units, industrial boilers, cement kilns and the like. These industrial 
sectors offer the most significant and cost-effective opportunities for 
reducing PM2.5 and its precursors. A national rule not only 
provides consistency and certainty for industry, but offers the added 
advantage of administrative expediency for State and local agencies, 
obviating the need for each State and/or locality to examine each 
sector and develop separate rules.
    EPA took a good first step in publishing its Clean Air Interstate 
Rule (CAIR), designed as an interstate air pollution control strategy 
to regulate electric utilities in the eastern United States. But, as we 
commented when that rule was proposed, the compliance deadlines are too 
long, the emissions caps are not sufficiently stringent and the rule 
only covers electric utilities, when other sources--such as industrial 
boilers and cement kilns--also warrant a national approach.
    It is important to recognize that the development of SIPs requires 
a ``zero sum'' calculation. To the extent that a Federal rule falls far 
short of what an industrial sector can achieve in a cost-effective and/
or timely manner, those lost opportunities will have to be made up by 
some other sector of the economy, generally a small business or other 
regulated entity for which the costs are higher and regulation is less 
cost effective.
    Perhaps it is best to illustrate this with an example. EPA 
estimated that the benefits of CAIR are between 30 and 35 times as 
great as the costs. For every dollar spent under CAIR to control 
emissions of PM2.5 precursors, society gets between $30 and 
$35 in benefits. And these EPA benefit estimates do not include 
important non-monetary benefits, such as reducing acid deposition and 
improving visibility in many national parks.
    We believe that EPA not only missed a huge opportunity with respect 
to regulating electric utilities, but it also ignored Executive Order 
12291, which states, among other things, that when publishing 
regulations, ``agencies should set regulatory priorities with the aim 
of maximizing the aggregate net benefits to society. . . .'' Given 
these huge benefit-to-cost ratios in favor of reducing PM2.5 
precursor emissions, we urge that EPA require further reductions from 
the electric utility sector, as well as from other promising sectors 
for national regulation, starting with industrial boilers and cement 
kilns.
    Second, EPA must issue its PM2.5 implementation rule, 
which identifies the general measures and other important provisions 
that will be required for SIPs. EPA has promised this rule for at least 
3 years and there is simply no excuse for further delay. Most States 
need a year or more to fulfill their own administrative requirements 
for adopting rules and regulations and have already begun preparing 
their SIPs. But this effort is hampered by the lack of guidance from 
EPA on what these SIPs must contain. Not only is this rule crucial for 
States in preparing their SIPs, it is also vitally important for 
explaining to those living in nonattainment areas what requirements 
will apply to their areas.
    Third, Congress and EPA can help States and localities meet their 
federally mandated responsibilities under the Clean Air Act by ensuring 
that State and local agencies have adequate funding and other important 
regulatory tools. This is essential at a time when agencies are 
significantly expanding their responsibilities, including the 
development of PM2.5 SIPs. Unfortunately, the 
Administration's fiscal year 2007 budget calls for cuts in grants to 
State and local air agencies of $35.1 million, including reductions for 
State and local agency staff under section 105 of the Clean Air Act and 
for monitors--including PM--under section 103. Additionally, the 
President's budget calls for a different mechanism for PM monitoring 
grants, requiring State and local agencies to match those grant funds, 
which could be a burden for many agencies. While the House of 
Representatives voted recently to restore the full $35.1 million cut, 
the Senate Appropriations Committee has restored just $15 million. We 
strongly urge the full Senate to restore the remainder of the cuts.
    We also believe that Congress and EPA should increase Federal 
funding for training programs that will provide Federal, State and 
local governmental officials with the skills they need to successfully 
fulfill their Clean Air Act implementation and enforcement 
responsibilities. Doing so will not only ensure the greatest return on 
our clean air investments, it is also required by section 103 of the 
Clean Air Act. However, because EPA has continued to reduce its 
financial support for training in recent years, State and local air 
agencies are now bearing a disproportionate share of the cost, 
contributing $2.0 million per year versus less than $500,000 annually 
from EPA.
    Finally, we applaud you, Chairman Voinovich, and your colleagues on 
the Senate Environment and Public Works Committee, for your leadership 
in seeking to clean up emissions from diesel engines, which contribute 
significantly to PM levels. We not only support the Diesel Emission 
Reduction program included in the Energy Policy Act passed by Congress 
last year, we also endorse the President's request for $50 million for 
this program in FY 2007.
    In conclusion, we urge that EPA make significant changes to the PM 
National Ambient Air Quality Standards by tightening the annual 
PM2.5 standard, eliminating exemptions in the 
PM2.5 standard, requiring monitoring in both urban and rural 
areas, and taking important steps--regulatory and funding--to help 
States and localities comply with the existing and new PM standards.
    Thank you for the opportunity to testify. I would be happy to 
answer any of your questions.
                               __________
          Statement of Larry J. Gould, Chair, Lenawee County 
                         Board of Commissioners
    Good morning Mr. Chairman and members of the subcommittee. My name 
is Larry Gould. I am chairperson of the Lenawee County Board of 
Commissioners, a position I have held since 2001. Thank you for the 
opportunity to testify today regarding EPA's proposed revision of the 
PM2.5 standard.
    By way of background, I have served as a County Commissioner for 
Lenawee County, Michigan, for the past 32 years. Lenawee County is 
located in southeast Michigan on the State line across from Ohio. The 
county seat, Adrian, is approximately 35 miles from Toledo, Ohio, 40 
miles from Ann Arbor, Michigan, and 70 miles from Detroit. I have 
served as chairperson of the County's Personnel/Ways and Means 
Committee for many years during my service on the County Commission. My 
family has been engaged in farming since the area was settled in 1835.
    Lenawee County has a population of slightly over 100,000 and is 
largely rural. Being located near major metropolitan and industrial 
areas--in particular, Detroit--has affected Lenawee County's air 
quality. As a consequence, Lenawee County has been designated by EPA as 
a ``marginal'' nonattainment county for EPA's 8-hour-ozone standard, 
despite the fact that the single monitor located in Lenawee has shown 
compliance with the ozone standard for the past six (6) years. Lenawee 
is designated nonattainment because all nine (9) ozone monitors 
throughout the Detroit area must show compliance with the standard. 
Seven other counties in southeast Michigan are also designated 
nonattainment for the 8-hour-ozone standard.
    Fortunately, Lenawee is not designated as nonattainment--at least 
not yet--for any other National Ambient Air Quality Standard, including 
PM2.5. However, there are seven (7) Michigan counties that 
are designated nonattainment for the existing PM2.5 
standard.
    The Michigan Department of Environmental Quality (MDEQ) and the 
Southeast Michigan Council of Governments (SMCOG) submitted an ozone 
attainment strategy to EPA in June 2005. This strategy is comprised of 
three categories of control measures: selected controls, contingency 
measures, and voluntary measures. Selected controls include a lower 
vapor pressure fuel. MDEQ and SMCOG are in the process of obtaining 
legal authority to implement these measures. However, without concerted 
efforts by our more populated neighbors to control their air emissions, 
any efforts by Lenawee County to regulate its own air emissions will 
almost certainly prove to be futile. This is the case with either ozone 
or a revised PM2.5 standard.
    In January, EPA proposed to revise the 24-hour National Ambient Air 
Quality Standard for PM2.5. EPA also asked for comment on 
whether to revise the annual PM2.5 standard. I am very 
concerned that a revision of the PM2.5 standard would result 
in Lenawee County being designated nonattainment for PM2.5 
for the same reason the county is designated as nonattainment for 
ozone. That is, Lenawee would be included in a multi-county 
nonattainment area whose air quality is dominated largely by emissions 
from more heavily populated counties. Even though it is not our fault, 
Lenawee will be forced to comply with restrictions that are likely to 
impede our attempts to attract new industry and expand our economic 
base.
    According to MDEQ, three counties with particulate matter monitors 
(Wayne, Monroe and Oakland) currently show a violation of the revised 
24-hour standard proposed by EPA. I am aware of estimates that suggest 
a significant increase in the number of nonattainment counties in 
Michigan if the PM2.5 standard is revised. These estimates 
indicate that the 24-hour standard proposed by EPA combined with a 
modest revision of the annual standard could more than double the 
current number of nonattainment counties in Michigan from seven (7) 
counties to 16 counties. According to these estimates, Lenawee would be 
one of those 16 PM2.5 nonattainment counties. As a 
consequence, Lenawee, a rural county with a small population and good 
air quality, would be nonattainment for both ozone and a revised 
PM2.5 standard. This is not a prospect I look forward to as 
the chairperson of the Board of Commissioners.
    Lenawee's citizens and businesses will bear the costs of 
controlling emissions to reach attainment with the 8-hour-ozone 
standard. We will almost certainly bear additional costs if EPA revises 
the PM2.5 standard and Lenawee is designated as 
nonattainment. It is difficult to predict what specific control 
measures Lenawee County would have to adopt in order to comply with a 
revised PM2.5 standard. As you know, State and local 
governments are still in the process of deciding how they will come 
into compliance with the current PM2.5 standard. In fact, 
this is one of my concerns. EPA might change the 1997 PM2.5 
standard before States have come into compliance with it.
    As you know, National Ambient Air Quality Standards are developed 
by EPA without regard to how much it would cost to comply with them. 
Costs for implementing and complying with air quality standards are 
borne to some extent by State and local governments. As a county 
commissioner, it is very clear to me that the costs of implementing 
clean air standards are significant unfunded Federal mandates. The cost 
of these unfunded mandates can be substantial, with minimal air quality 
benefits for counties like Lenawee. For example, the Lenawee Board of 
County Road Commissioners informs me that highway funds have been made 
available to Lenawee County through Congestion Mitigation Air Quality 
(CMAQ) funding to improve air quality in the county. However, they 
point out that the current level of CMAQ funding ``appears to be a drop 
in the bucket'' compared to the funding that will be needed if EPA 
makes the 1997 standards more stringent. In addition, the Michigan 
Association of Counties informs me that ``any new particulate matter 
standards which push costs to the counties would be impossible for us 
to support, unless the commensurate amount of Federal funding were 
appropriated for us to implement these standards.'' The Association's 
concern is based on its estimate that one third of Michigan's counties 
are required to pay over $1.1 billion annually for Federal and State 
mandates, but the counties are reimbursed for only half that amount.
    There is little doubt in my mind that imposition of new mandates 
would have a negative impact on economic growth and development in 
Lenawee County. Like most counties in Michigan, Lenawee continues to 
struggle with high unemployment and an uncertain economy. I am 
concerned that nonattainment requirements are likely to impede ongoing 
efforts to expand economically and create jobs.
    The Lenawee Chamber for Economic Development has written me 
recently to express their concern about the serious negative impacts to 
our local economy if EPA revises the PM2.5 standard. The 
Chamber points out the closure of plants and the continuing loss of 
manufacturing plants in Lenawee. Most of these plants were older and 
relied on out of date technologies. If Lenawee if classified as a 
PM2.5 nonattainment county, the Chamber believes that we 
will continue to lose jobs and have difficulty attracting facilities 
with newer and better environmental controls. In fact, the Chamber 
estimates that a nonattainment designation could result in the 
potential loss of over 1000 current jobs, three fourths of which would 
be in the chemical industry.
    Over the past several years, Lenawee County has assumed a 
leadership role in developing facilities to produce cleaner burning 
fuels. A $60 million ethanol plant is currently under construction in 
the southeast part of our county, and a biodiesel blending facility is 
planned for construction in Adrian. The ethanol plant will produce 57 
million gallons of ethanol annually and is expected to begin production 
early next year. We are proud of the jobs these facilities will bring 
to the county and the fact that cleaner burning fuels will help reduce 
harmful air emissions. Our plan is to almost double the capacity of the 
ethanol plant sometime in the future. However, I am very concerned that 
the expansion might face serious impediments and delays in obtaining 
the necessary air permits if Lenawee County is designated nonattainment 
for PM2.5. Because the biodiesel facility will blend rather 
than produce fuel, I hope that we will not encounter any significant 
problems if Lenawee is designated nonattainment.
    Right now, I believe it makes more sense to focus our efforts at 
the State and local level on reaching attainment with the 1997 
standards for ozone and PM2.5. I would urge EPA and Congress 
to provide State and local governments with all the administrative and 
financial support they need to implement the current standards, rather 
than change the standards now, which would increase the number of 
nonattainment counties, impose significant unfunded mandates on State 
and local government, and require other measures that are almost 
certain to adversely affect economic growth in areas like Lenawee 
County.
                                 ______
                                 
       Responses by Larry J. Gould to Additional Questions from 
                           Senator Voinovich
    Question 1. I know that you care about public health, and everyone 
wants to see our communities meet Federal clean air standards--but a 
community's total well-being also is impacted by having well-paying, 
stable jobs, and a robust local tax base. How would a nonattainment 
designation impact this aspect of community health?
    Response. Nonattainment would mean the continued loss of older 
manufacturing facilities in the county that cannot afford to meet the 
higher, more restrictive air quality standards. This would further 
erode manufacturing jobs as these industries either shut down or 
relocate to areas (i.e., off-shore) that have less stringent standards. 
Designating Lenawee County as a ``nonattainment'' area would almost 
certainly have a negative effect on industry decisions to invest in our 
economy thereby reducing overall job opportunities.
    The Lenawee Chamber for Economic Development estimates that if 
Lenawee County is designated as a ``nonattainment'' area, the potential 
exists for the loss of over 1,000 current manufacturing jobs, 75 
percent of which are in the chemical industry. These chemical plants 
are, ironically, currently recognized by the EPA for their 
environmental leadership. This loss of jobs in Lenawee County would 
equate to approximately 10 percent of our total manufacturing jobs. A 
loss of this magnitude would have a tremendous impact on our tax base 
and would almost guarantee a reduction in needed public services.
    We recently received information from our electric utility, 
Consumers Energy, that if a new generating facility is not in operation 
in Michigan by 2010, severe shortages and restrictions are projected 
which will curtail job growth and development potentially affecting 
public safety. A forerunner of this has been seen this summer with 
electric utilities struggling to meet service demands during intense 
heat waves. This has resulted in deaths in major cities and disruptions 
to businesses and residents.
    I believe that my community's well-being will be better served by 
focusing our efforts on implementing the existing air quality standards 
rather than moving the goalposts, resulting in job losses, economic 
stagnation and power shortages.

    Question 2. I am concerned that EPA has proposed to ``move the 
goalposts'' by establishing new standards even before States send in 
their compliance programs to meet the existing standards. What will the 
impact be on States and localities and their planning resources?
    Response. As a county commissioner, I am also concerned that EPA 
might move the goalposts, which would stretch planning resources, 
impose unfunded mandates, and make it difficult for Lenawee County to 
attract new industry, expand the county's economic base and create 
jobs. Job creation is an especially critical issue in Michigan because 
it has one of the highest unemployment rates in the United States--7 
percent for July and a loss of 29,000 payroll jobs during the month. 
Lenawee's unemployment rate for the first five months of 2006 was even 
worse, averaging 7.3 percent per month and exceeding 8 percent for two 
of those months.
    By way of background, Lenawee is designated as ``marginal'' 
nonattainment for the 8-hour-ozone standard even though the single 
monitor located in the county has shown no violation of the ozone 
standard for the past 6 years. The county is designated nonattainment 
because every monitor throughout the Detroit area must show compliance 
with the ozone standard.
    Fortunately, Lenawee is designated attainment for the existing 
PM2.5 standard. However, I am concerned that a revision of 
the PM2.5 standard could result in Lenawee County being 
designated nonattainment for PM2.5 According to the Michigan 
Department of Environmental Quality (MDEQ), three counties with 
particulate matter monitors currently show a violation of the revised 
24-hour PM2.5 standard proposed by EPA. There are estimates 
that suggest a revised standard could more than double the current 
number of nonattainment counties in Michigan from seven counties to 16 
counties. If these estimates turn out to be correct, Lenawee would be 
one of those 16 PM2.5 nonattainment counties.
    MDEQ is developing strategies to comply with the 8-hour-ozone 
standard. Lenawee's citizens and businesses will bear the costs of 
controlling emissions to reach attainment with the 8-hour-ozone 
standard. I believe that State and local planning resources would be 
stretched thin in order to comply with a revised PM2.5 
standard at the same time they have just begun to implement measures to 
meet both the existing ozone and PM2.5 standards.
    State and local governments bear significant costs for implementing 
and complying with air quality standards. Therefore, to State and local 
officials, the costs of implementing clean air standards are unfunded 
Federal mandates. The cost of these unfunded mandates is substantial. 
According to the Lenawee Board of County Road Commissioners, highway 
funds that have been made available to Lenawee County through 
Congestion Mitigation Air Quality (CMAQ) to improve air quality in the 
county would have to be increased substantially if EPA makes the 1997 
standard more stringent. However, we do not know how much additional 
CMAQ funds would be available. In addition, the Michigan Association of 
Counties indicates that they cannot support a revised standard without 
a commensurate increase in Federal funding. The Association estimates 
that one-third of Lenawee will almost certainly bear additional costs 
and negative employment consequences if the county is designated 
nonattainment for PM2.5. However, it is difficult to predict 
right now what specific measures Lenawee County would have to adopt (or 
their precise consequences) in order to comply with a revised 
PM2.5 standard because State and local governments are still 
in the process of determining how they will come into compliance with 
the existing PM2.5 standard.
      Statement of BeBe Heiskell, Commissioner, Walker County, GA
                              introduction
    Good morning, Chairman Voinovich, Ranking Member Carper, and 
Members of the Subcommittee on Clean Air, Climate Change, and Nuclear 
Safety.
    My name is Bebe Heiskell. I am the sole commissioner of Walker 
County, Georgia. We are located in the northwest corner of the State 
just south of Chattanooga. I am in the sixth year of elected office, 
with a background of 27 years in public administration. Thank you for 
allowing me to describe the impact that nonattainment designations have 
on communities like mine.
    The hardest part of my job is funding the delivery of services, 
such as road maintenance and meeting payrolls. I am where the rubber 
meets the road, face to face every day with the taxpayers that support 
our governments. Our residents recognize the property tax relief that a 
strong local economy provides.
                      background on walker county
    Walker County is a vibrant community of 63,000 people located in 
the northwest corner of Georgia. While the northernmost tip of the 
county borders the city of Chattanooga, Tennessee, the vast majority of 
Walker County is rural. A variety of national and international 
manufacturers have operations in Walker County and our corner of the 
State produces the vast majority of the world's carpet. Forty-six 
percent of Walker County's work force is employed in manufacturing 
while large numbers of our residents also leave the county each day to 
commute into Chattanooga for employment. They recognize the property 
tax relief provided by our industry.
                         environmental quality
    Walker County, and indeed the entire region surrounding 
Chattanooga, Tennessee, is blessed with healthy air and a clean 
environment. It was not so long ago, during its foundry era, that 
Chattanooga was named the dirtiest city in America with all the related 
health issues associated. Indeed, Chattanooga served as a poster child 
for Congressional efforts to pass the Clean Air Act. Since that time, 
however, thanks to the Clean Air Act our region has experienced a 
rebirth as we have cleaned up our environment and improved our air 
quality while at the same time managing to grow our economy. The 
businesses in my community have invested millions to reduce their 
emissions, cars are significantly cleaner than they were just 10 years 
ago, powerplants have spent billions on controls, and the two large 
metropolitan areas surrounding us have come into compliance with the 1-
hour-ozone standard. Now, I have the pleasure to represent part of what 
Outside Magazine called one of the ten best places to live in America.
    As a community leader and an asthmatic, I appreciate all that EPA 
has done to see that we have cleaner air. In September 2004 EPA's own 
status report boasted ``U.S. Air Cleanest Ever Since 1970'', even while 
the economy has expanded 150 percent in that time period. American 
businesses should also be commended for their accomplishments.
                           attainment status
    Today the citizens of both Chattanooga and Walker County enjoy 
clean air and clear skies. Yet, we remain in nonattainment for 
particulate matter largely through no fault of our own. Walker County's 
nonattainment status is almost exclusively due to outside influences on 
our air quality including up to 60 percent natural particulate matter, 
transported from Alaska, Canada, and amazingly Africa, which is 
completely out of our control. In addition, we are positioned between 
Chattanooga and Atlanta; two major interstate highways; and several 
large manufacturing facilities and powerplants in the region.
    Walker County is struggling to attain EPA's air quality standards 
and have implemented all practicable local control measures. While in 
nonattainment, we are hopeful that the Agency will eventually place us 
back into attainment. However, if EPA goes forth with its efforts to 
further revise the fine particulate matter standards, I simply don't 
know what we in Walker County will do. To be forced into perpetual 
nonattainment will have a devastating impact on not only our economy, 
but on the lives of our citizens.
                        impacts of nonattainment
    Quality growth is vital to Walker County and other communities all 
over this country. Though our air is improving, I see the job losses 
that stem from perpetual nonattainment. This adds to the complexity of 
local governance while we struggle with public opposition to these 
nonattainment designations and many of our jobs go overseas.
    From an economic development standpoint, being in nonattainment of 
EPA's fine particulate matter standards has serious consequences right 
now. Many industries begin a site location search using EPA's Internet 
list of counties in nonattainment. Those counties never make the list 
of prospective sites.
    Walker County has more than 4 million square feet of vacant 
manufacturing space, in large measure because of the uncertainty our 
nonattainment designation creates for business prospects. We have had 
some of our largest employers express frustration at incurring 
additional costs in order to comply with more stringent air quality 
standards even as foreign competition continues to squeeze their profit 
margins. Others have been reluctant to expand, and one business, a 
major automotive manufacturer facility decided not to locate a plant in 
the Chattanooga area, in part because of concerns over our attainment 
status. That plant was eventually located elsewhere, in an attainment 
area.
    Needless to say, our nonattainment designation has caused a real 
fear of layoffs amongst many of my constituents who have seen jobs 
elsewhere outsourced to China, Mexico and other foreign nations with 
little environmental protections. As an elected official, I fear the 
lost tax revenues and increased stresses on local health services that 
lay offs associated with our nonattainment status bring.
                               conclusion
    Georgia's late Senator Paul Coverdell said, ``Investment does not 
flow toward uncertainty.'' A never-ending nonattainment designation 
creates uncertainty for communities and businesses.
    I urge the Senate Committee to put EPA's standards in perspective 
of the loss of jobs and decisions of manufacturers to go abroad where 
there are no standards. The doubling of the global workforce has 
created greater competition for each available job. Retraining 
displaced workers that have lost their lifelong manufacturing jobs is 
difficult. They, the people we represent, are then concerned only about 
how they can take care of their families.
    Does EPA make decisions based upon the demands of outside 
environmental groups, or is there a practical reason to continue to 
lower this designation?
    I ran for office on quality growth and I am a long-time supporter 
of the environment. However, there must be a balance in all things. 
Please consider the significant air quality improvements already in 
place against the impacts of unending nonattainment designations before 
allowing EPA to stack another set of regulations on businesses and 
communities like mine.
    Thank you for hearing my remarks.
                                 ______
                                 
        Responses by Bebe Heiskell to Additional Questions from 
                           Senator Voinovich
    Question 1. I understand that companies seeking to build new 
facilities will stay away from nonattainment areas and instead go to 
attainment areas. Has that been your experience and can you provide 
specific examples?
    Response. It has been the experience of Walker County that 
companies seeking to build new facilities stay away from nonattainment 
areas and instead go to attainment areas.
    A startup company looked at Walker County's industrial park to 
relocate there from an Atlanta area that is in nonattainment. They 
manufacture foil-covered packaging for beer and soft drinks. Our 
location and transportation corridors were suitable. The price was 
right for the property. They thought our park was a good fit. They had 
a contractor available to construct their building. One of their first 
questions was, ``Is Walker County in nonattainment?'' Their concern was 
if we were in nonattainment, it would cost them extra money to meet 
compliance, and take more time to complete the process. They decided 
not to locate in Walker County.
    At present, an Italian tile company is looking at Walker County. 
nonattainment will, in all probability, eliminate us because of the 
additional expense of compliance on Kaolinite. The time line for 
permitting is also much longer, if they can be permitted.
    Crystal Springs Print Works in Walker County prints a camouflage 
pattern for the U.S. Military on cotton cloth from Mt. Vernon Mills in 
Chattooga County. I talked to Steve Tarvin, owner of Crystal Springs 
Print Works. He told me he already pays annual environmental fees of 
$25,000 and a more stringent air quality standard will increase that 
cost an additional $30,000. He has a financially marginal company and 
is the major manufacturer in the City of Chickamauga. More regulations, 
additional fees, and timelines could also require more staff to 
maintain compliance.
    He stated nonattainment issues could definitely put him out of 
business and that would also increase cost to Mt. Vernon Mills as well. 
Mt. Vernon Mills is located in adjoining Chattooga County. Chattooga 
County is in attainment.
    Many times companies do not give us the reason they decide against 
moving to Walker County, but we market our county and are contacted 
every day by some industry. nonattainment increases cost because of 
higher power costs, additional licensing fees, and associated expenses 
that take Walker County out of the competition. We have a superior 
marketing specialist that works very hard to get the attention of those 
industries wanting to relocate. She knows every incentive that is 
possible to use, and has great contacts with support industries to help 
prospects partner with local business to reduce their cost. We hear 
every day she is one of the very best in all of Georgia. Still, we 
cannot offer attainment status, and that makes the difference in 
success and failure.
    There is a nonattainment question on most Requests for Information 
with TVA-Industrial sites. We must assume it makes a difference in 
cost, time, and transferring credits, or it would not appear on most 
things associated with prospective industry.
    Walker County is a prime location for support industry for 
automotive manufacturers that Chattanooga is working diligently to 
bring to their new 1,200-acre industrial park. We have already lost a 
small Tier 2 supplier with powder coating paint business (eco-painter) 
because nonattainment has priced Walker County out of that market.

    Question 2. Revising the particulate matter air quality standards 
will increase energy prices. How would higher energy prices impact 
businesses and families, especially the poor and those on fixed income, 
such as the elderly?
    Response. Higher energy prices will adversely affect our entire 
economy, much more so than the higher cost of gasoline. Hospitals will 
experience more indigent patients as people with marginal incomes find 
themselves needing hospitalization, increasing government's cost. Power 
in our area has already increased twice recently because of additional 
costs to TVA and Georgia Power from nonattainment issues.
    The higher cost of doing business has sent textiles out of our 
country. Ronile, National Spinning, Apollo Knitwear, Sunrise Hosiery 
Mills, Coats American (cotton mill), Barwick Mills, Barwick Archer 
Plant, and Rossville Mills are all textile mills that have closed in 
Walker County. Those industries that have downsized are: United 
Synthetics and Cardinal Equipment.
    The increased cost of power impacted the county's budget and the 
ability of the citizens to pay their taxes. They don't have the money 
to buy groceries or pay for healthcare. It often places senior citizens 
in a position of not being able to pay for their essentials and their 
medication, too. It has also cost industry to spend more money on 
scrubbers and monitors. To raise their prices will put them out of 
business.
    The increased cost of energy burdens the schools' ability to pay 
their debts. Since the schools collect the lion's share of property 
taxes, it raises everyone's property taxes because of the need to 
assess the whole tax base.
    nonattainment impacts our county because we must get permission 
from the Metropolitan Planning Organization to pave a Walker County 
road. The cost of asphalt has gone from $22.00 a ton in the year 2000 
to $90.00 a ton in 2006. That cost plus the requirement of permission 
from the region to pave the county's roads surely curtails a county's 
ability to make visible progress in communities.
    Air quality standards have increased the cost of doing business for 
everyone, and it has also cost people their jobs. That increases the 
need for family and children's welfare services and they have doubled 
their caseload.

    Question 3. I know you care about public health, and everyone wants 
to see our communities meet Federal clean air standards--but a 
community's total well-being also is impacted by having well-paying, 
stable jobs, and a robust tax base. How would a nonattainment 
designation impact this aspect of community health?
    Response. I care about public health and about the well being of my 
community. Employment and the availability of good jobs are key to good 
public health. I know the impact of having well-paying, stable jobs 
also indicates those working families will tend to have adequate health 
insurance coverage, so that if a member of their family gets sick or 
hurt, they can be confident that family member will receive proper 
treatment in a timely manner.
    Of course, dirty air can affect the health of that community, but 
Walker County has not experienced any health issues related to air 
quality and we have never had complaints from any citizen with regard 
to the quality of the air affecting their health. I personally have 
asthma, but my flare-ups are caused from pollen, mold, and animal 
dander allergies. I breathe easier in Walker County than in Washington, 
DC.
    Hospitals operate on the financial edge now, and with a 
disproportionate number of indigent patients, they will again find it 
necessary to increase their charges for services, which in turn 
increases insurance premiums.
    I am, at present, trying to establish a community health facility 
in an abandoned health department in Rossville to accommodate the poor, 
indigent, and uninsured that need medical and dental care they cannot 
afford elsewhere. To do this, we need equipment, supplies, and 
materials to complete the extensive work that must be done to prepare 
this building for treating patients. This is a desperately needed 
facility, but if nonattainment in the north end of the county prevents 
Walker County from getting this facility completed through additional 
cost and the inability to get the parking lot paved, it will be 
counterproductive to all concerned.
    If the jobs go elsewhere because our county cannot offer a cost-
effective environment, unemployment will prevail and the county's tax 
base will suffer. Taxes pay for services that are essential to the 
quality of life as we know it.

    Question 4. I am concerned that EPA has proposed to ``move the 
goalposts'' by establishing new standards even before States send in 
their compliance programs to meet the existing standards. What will the 
impact be on States and localities and their planning resources?
    Response. Counties in Region I Georgia and the metropolitan area of 
Chattanooga are just now moving forward with compliance for 
PM2.5. To raise the bar when the current requirements are 
already out of our reach sets us up for failure. Air quality standards 
decidedly increase the cost of doing business and may even take them 
out of the competitive process. The power companies, having to spend 
billions on processes to clean the air raises the rates for all--
counties, communities and individuals. For counties, it causes the 
dreaded tax increases.
    We have complied with all the requirements for nonattainment, and 
yet we have fine particulate matter coming from wildfires in Canada and 
Alaska, agricultural burns in Kansas, and dust from Africa, to name 
just a few of the many pollution sources over which we have no control. 
We have met all the requirements of EPD with regard to the vapor 
recovery and burn ban that was expected of us. I don't know how we can 
meet a more stringent standard than the one we are now struggling to 
meet. We are an emerging community with a lot of promise. nonattainment 
can take that promise down the drain by pricing existing industries out 
of business, and limiting new business while we watch the existing 
industry relocate to a more sustainable environmental standard.
    If this new standard does, in fact, become the new requirement, all 
across this Nation we may see manufacturing leave this country and go 
where there are no controls. This new standard will ultimately increase 
cost to every single American. The governing authorities will find they 
have less and less with which to plan and deliver services. Ultimately, 
while our air might be cleaner if it is in our control to make it so, 
our quality of life will still become less desirable because cost will 
put many things we now enjoy out of our reach.
    Without the ability to comply with the new standards, State and 
Federal funding will be withheld from local governments causing them to 
sink into counter-productive development instead of the bright, 
promising future we have planned.
    Thank you for your consideration of the problems, and your 
willingness to find solutions to help the communities of this Nation 
with the economic constraints of nonattainment.
                               __________
Statement of Harry C. Alford, President and CEO, National Black Chamber 
                              of Commerce
    The National Black Chamber of Commerce (NBCC) with offices located 
at 1350 Connecticut Ave., NW, Suite 405, Washington, DC. is a non-
profit, non-sectarian organization dedicated to economically empowering 
and sustaining African American communities through entrepreneurship 
and capitalistic activity within the United States and via interaction 
with the Black Diaspora.
    The NBCC has one hundred and ninety (190) affiliated chapters 
locally based throughout the Nation as well as international affiliate 
chapters based in the Bahamas, Brazil, Colombia, Ghana and Jamaica and 
businesses as well as individuals who may have chose to be direct 
members with the national office.
    The 1 million African American businesses in the United States 
represent sales of more than $100 billion annually and maintain an 
annual spending base of over $800 billion. The NBCC has harnessed much 
of the power of these dollars and provides unique opportunities for 
corporations and African American businesses to partner in creating 
greater opportunity for all people.
    The NBCC represents 95,000 Black-owned businesses and provides 
education/advocacy that reaches all 1 million Black-owned businesses 
across the Nation. Moreover, the NBCC is on the leading edge of 
educating and training Black communities on the need to participate 
vigorously in this great capitalistic society known as America.
    The NBCC appreciates the opportunity to offer its views on the 
Environmental Protection Agency's (EPA) proposed rule to establish a 
more stringent National Ambient Air Quality Standard (NAAQS) for 
particulate matter (Docket No. EPA-HQ-OAR-2001-0017).
    The National Black Chamber of Commerce has historically supported 
the efforts of the EPA to protect the public health of all Americans. 
The Clean Air Act and its regulatory structure, while controversial 
over the years, has been the principal driving force behind the 
improvements in our Nation's air quality and the reduction of harmful 
air pollutants. The NBCC also understands that despite this progress 
much work remains to be done to achieve our Nation's air quality goals.
    In that spirit, the NBCC continues to support EPA's efforts to 
control sources of pollution and the promulgation of regulations that 
are both cost-effective and based on sound science. As a regulated 
community, we can not tolerate regulation for the sake of regulation 
and the attendant economic costs of such policies. The regulate and 
punish mentality must be abandoned so that we may address our 
environmental challenges while sustaining a strong economy.
    In that regard, the NBCC is concerned that the current EPA proposed 
rule to further establish a new NAAQS for urban particulate matter and 
to establish a more stringent PM2.5 standard is not 
supported by current science and if adopted, could have an enormous 
adverse impact on small businesses and in particular, Black-owned 
businesses represented by the NBCC that are engaged in a broad cross 
section of economic activity in the manufacturing, industrial and 
service sectors of the economy.
    Small and medium business alike are today facing a number of 
challenges not the least of which are higher interest rates that are 
putting pressure on inventory financing and higher energy and related 
operating costs that are eroding margins and placing pressure on 
maintaining current employment levels. The imposition of new 
regulations on industry, manufacturing and other sectors, in the 
absence of scientific evidence of a demonstrable health benefit is 
simply not justified. These new standards would likely result in 
further increased energy prices, especially that of natural gas, a key 
energy input in urban areas.
    Beyond this, given the lack of scientific justification, the NBCC 
is concerned about the impact of the proposed rule as a result of the 
expanded number of nonattainment designations under the Clean Air Act.
    It is well documented that a ``nonattainment'' designation under 
the Clean Air Act can carry with it serious economic and social 
repercussions for the geographic area so designated which produce 
immediate and direct impacts on major sources in and near the 
nonattainment areas with attendant indirect impacts on small and medium 
businesses and consumers as well, especially those on low and fixed 
incomes in terms of jobs and energy costs.
    Restrictive permitting requirements for companies that add new 
units or make major modifications to their facility are competitively 
disadvantage as such requirements would not apply to similar facilities 
operating in attainment areas. Again, these restrictions would 
significantly impact urban areas. Also, nonattainment areas face the 
risk losing Federal highway funding that is vitally important to urban 
redevelopment.
    In addition, companies that build a new facility or that perform a 
major modification to certain existing facilities in or near a 
nonattainment area would be required to install the most effective 
emission reduction technology without consideration of cost.
    Moreover, new emissions in the area must be offset. Thus, if there 
is no party willing to provide the offset, then the project resulting 
in increased emissions of the given pollutant cannot go forward.
    Take the Mercedes plant in Alabama, for instance. Our Birmingham 
chapter was so excited that the original plan was to put the plant 
inside the Birmingham city limits. Gas stations, restaurants, hotels, 
etc., would have benefited significantly. Due to attainment levels, the 
plant was moved 90 miles to the south in rural Alabama. It devastated 
the expectations and growth opportunities for the largest city in 
Alabama.
    The same scenario happened in Indiana with the Isuzu plant that was 
destined for Indianapolis, but ended up 70 miles north in Lafayette. We 
have about 250 members in the Indianapolis chapter and 2 in Lafayette. 
The impact was obvious.
    As illustrated by these examples, the loss of industry and economic 
development in and around an area could be significant because a 
company interested in building a facility that emits the given 
pollutant will probably not build that facility in a nonattainment area 
due to the increased costs associated with restrictive and expensive 
permit requirements.
    This again would result in jobs moving away from urban areas--with 
existing infrastructure and excellent redevelopment opportunities--into 
rural ``Greenfield'' sites that require new infrastructure be built 
from the ground up. This harms Brownfields and other urban 
redevelopment programs.
    In conclusion, the NBCC is concerned that the increased costs of 
goods and services such as energy, and the potential for decreasing 
disposable incomes and loss of jobs and economic activity as a result 
of this proposed regulation will adversely impact Black-owned and other 
small and medium businesses and inadvertently harm the socio-economic 
status of individuals and, thereby, is not in the public interest in 
the absence of sound scientific justification and demonstrable health 
benefits.
    Accordingly, for the reasons stated herein, the National Black 
Chamber of Commerce believes the EPA should decline to promulgate its 
proposed ``Urban Only'' standard for coarse particulate matter, and 
should retain the current standards for fine particulate matter.
                                 ______
                                 
      Response by Harry C. Alford to an Additional Question from 
                           Senator Voinovich
    Question. I understand that many companies seeking to build new 
facilities will stay away from nonattainment areas and instead go to 
attainment areas. Please explain the impact this has on sending 
development away from existing infrastructure in nonattainment areas 
and out to ``Greenfields'' where infrastructure must be built.
    Response. The easiest examples are the major auto plants that are 
being built in ``Greenfield's'' in the South. A major auto facility is 
placed outside Anniston, Alabama versus the metropolitan areas of 
Birmingham or Atlanta. That plant brought thousands of jobs to the 
Anniston area by itself. Suppliers and distributors subsequently placed 
operations close to that plant which created more jobs and economic 
vitality. Demands on housing, schools, retail, hotel, travel, etc. 
created an economic boom to the Anniston area. Many of those workers 
left or moved away from Birmingham and Atlanta. They shifted their tax 
base, consumable dollars and all other capitalistic activity from two 
nonattainment areas to one ``Greenfield''. This has a serious impact on 
the NBCC constituency. It drives down the quality of life and strips 
the economic vitality of most urban areas within the United States.
                               __________
Statement of William F. Christopher, Executive Vice President and Group 
 President, Aerospace, Automotive and Commercial Transportation, Alcoa
                              introduction
    Mr. Chairman, Members of the subcommittee, thank you for the 
opportunity to appear before you today to discuss our concerns in 
response to the Environmental Protection Agency's (EPA) Proposed 
National Ambient Air Quality Standards (NAAQS) for Particulate Matter 
(PM).
    My name is Bill Christopher. I am the Group President of Aerospace, 
Automotive and Commercial Transportation for Alcoa and also hold the 
position of Executive Vice President. With over 131,000 employees in 43 
countries, Alcoa is the world's leading producer of primary aluminum, 
fabricated aluminum and alumina and is a large manufacturer of 
packaging, transportation and other industrial products. Alcoa holds 
sustainability as a core value in our business practices. We include 
goals and metrics for sustainability as key elements of our 2020 Vision 
for the company. Consequently in 2005, Alcoa was named one the world's 
three most sustainable corporations by the World Economic Forum.
    Our core values related to sustainability have been clearly 
demonstrated at our Cleveland Works where we have taken significant 
steps to promote cleaner air, cleaner water, and better use of land in 
our production processes. We are a major employer in the Cleveland 
area, with 1,400 employees working at our three facilities in Northeast 
Ohio producing goods valued at nearly $1 billion for domestic and 
international markets.
    I also serve on the Board of Directors of the Greater Cleveland 
Partnership (GCP) and appear before you today on their behalf. The GCP 
is one of the Nation's largest metropolitan chambers of commerce, 
representing more than 16,000 small-, mid-sized and large companies. 
Because of concern for the region's economy, the GCP has asked me to 
provide leadership in efforts to shape business community involvement 
in clean air compliance discussions.
    I understand that you will hear from witnesses in other hearings 
about the need to base air quality base standards on current and sound 
science. We agree with this assessment, particularly in the case of 
fine particulate emissions where the science appears to be somewhat 
limited in terms of understanding sources and dispersion patterns, and 
there is only a very recent history of monitoring. However, my message 
today will focus on the economic impact of imposing standards that are 
difficult, if not impossible to attain in the short-term. Here are the 
key points I would like to share with you today:
    First, I am not here to debate the value of vigorous efforts to 
achieve cleaner air. There is absolutely no doubt that cleaner air is 
central to the future health of our residents and overall quality of 
life. Both my company and the Cleveland business community have 
demonstrated their commitment to continuous improvement of the region's 
air quality. As is the case elsewhere, these efforts are working--our 
air quality is improving, and will continue to do so as a result of 
good faith efforts to meet current regulations.
    Second, and equally important, our efforts to achieve cleaner air 
must achieve a delicate balance. They must take into account the 
potentially significant economic costs to places like Cleveland that 
are in the midst of painful economic transitions.
    Third, achieving this balance is complicated because the timelines 
for meeting the Clean Air Act standards are misaligned with the 
timelines for several federal standards established to regulate 
emissions in particular industries. The gaps created by these 
misalignments add economic costs of compliance that could be 
devastating in places that rely on manufacturing as a key element of 
their economies.
    Fourth, before any new regulations are adopted, regions like 
Cleveland should be given adequate time to understand the costs of 
proposed standards and develop strategies that reflect the needed 
balance. New modeling capabilities, perhaps developed and tested in 
Northeast Ohio with the assistance of the Federal Government, can help 
in this critical task.
    I will briefly amplify each of these four points and I will be glad 
to discuss them further during the questioning.
1. Current Situation: Air Quality is Improving
    Air quality continues to improve under existing regulations, a 
clear demonstration of the Nation's efforts to make important changes 
to respond to the environmental realities we face. According to the 
EPA, total emissions of the six principal pollutants decreased by 51 
percent between 1970 and 2003 while the gross domestic product 
increased by 176 percent, vehicle miles traveled increased 155 percent, 
energy consumption increased 45 percent, and U.S. population grew by 39 
percent. Through this growth, however, ozone pollution has decreased 22 
percent since the early 1980s and PM levels have fallen 17 percent 
since 1993. My point is this: progress is being made in every part of 
our Nation.
    Northeast Ohio has shared in this progress. Since 1995 VOC 
emissions have been reduced 48 percent, NOx emissions are down an 
estimated 30 percent resulting in a 50 percent reduction in ozone 
exceedence days. However, challenges remain. In 2005, Northeast Ohio 
was designated as a nonattainment area for the current annual fine 
particulate matter--following the finding of nonattainment for ozone 
standards in 2004. We have been advised that our region will have 
serious difficulty reaching compliance for the annual fine particulate 
standard established in 2004 and later upheld in court. Consequently, 
substantial work is underway by the Ohio EPA, regional agencies, local 
business and industry, and others to identify both the options to 
attain these standards and the potential economic impact. All these 
efforts are focused on the aggressive steps required to be in 
compliance and quantifying the impact secondly. We are working with the 
Northeast Ohio Areawide Coordinating Agency (NOACA) in the development 
of Ohio's State Implementation Plan for ozone compliance and will also 
participate in the fine particulate process, We are reaching out to 
more than 60 local manufacturing companies to educate them about this 
situation and ask for their assistance in developing innovative and 
progressive solutions. However, since an estimated 60 percent of 
Northeast Ohio's pollutants come from outside our region, neither our 
sincere voluntary efforts nor regulatory action imposed on our region 
alone will bring us into compliance.
2. Balanced Approach is Required
    While your job is to find a balanced solution for the Nation, 
permit me to paint a picture of one city and the impact of addressing 
nonattainment. Receiving another nonattainment designation and the 
associated restrictions, could be devastating to slow growth areas like 
Cleveland that are struggling to shift from a heavy manufacturing 
economy to a more diversified one based on financial services, health 
care, new technology ventures and advanced manufacturing. Economic 
growth in the region has been about half that of the Nation for the 
past three decades.
    A recent study completed by NERA Economic Consulting estimates a 
loss of more than 12,000 jobs in the Cleveland area, a $1.4 billion 
loss in Gross Regional Product (GRP), the loss of $1.1 billion dollars 
of disposable personal income, and a population loss of 16,000--if the 
Cleveland region is forced to comply with the 8-hour-ozone regulation 
by 2010 as presently required.\1\ This study assumes the current gaps 
identified beyond recommended implementation plans can be physically 
closed with current available technologies--a major assumption yet to 
be validated. The loss of related tax revenues would, in turn, lead to 
fewer resources available to the public sector to support our much 
needed economic transition. Although we can not know the precise 
economic impacts, we are working to validate the basis of this study's 
assumptions. However, we know that a more stringent particulate matter 
standard will directly increase the cost of energy and transportation 
and would restrict any industry or business growth. The cost of 
manufacturing in the region will increase and be non-competitive, 
causing limited investment to sustain current operations. Finally, much 
of the increased costs will move directly to consumers in the form of 
higher energy for both transportation and home use.
---------------------------------------------------------------------------
    \1\ NERA Economic Consulting, ``Economic Impact of Attaining the 8-
Hour Ozone Standard: Cleveland Case Study'', Prepared for American 
Petroleum Institute, Oct. 2005
---------------------------------------------------------------------------
    A new fine particulate standard could lead to another regional 
emissions strategy, such as the Clean Air Interstate Rule (CAIR). This 
costly measure will result in increased electricity rates and could 
result in fuel switching away from coal to natural gas to generate 
electricity, further driving up the cost of natural gas.\2\
---------------------------------------------------------------------------
    \2\ Analysis by National Association of Manufacturers indicates 
that since 2000, the State of Ohio has lost nearly 200,000 
manufacturing jobs, a decline from 1,021,000 to 823,400, due in large 
part to regulatory compliance and increased energy costs. Nationwide, 
the United States has lost more than 3.1 million manufacturing jobs, 
because of the same reasons cited above. These job losses, 
incidentally, coincide with the steep climb in natural gas costs, which 
have resulted in increased demand due in large part to compliance with 
the NAAQS.
---------------------------------------------------------------------------
    In sum, the measures to achieve compliance to current standards by 
2010 will have significant economic impact on the region. They also 
have the potential for unintended consequences such as higher energy 
costs, unemployment caused by the cost of regulatory burden shifted to 
businesses, as well as a direct impact on those individuals who are 
already having difficulty making ends meet, the poor and elderly.
3. Misalignments Must Be Addressed
    The principal driver of the economic impact is the steps required 
to bridge the difference between the clean air standards and federally 
mandated industry specific regulations. Eighty percent of ozone 
emissions in the region are from motor vehicles and power generating 
plants. Sixty percent of these emissions come from outside the 
northeast Ohio. Federal regulations on diesel engine standards, coal 
fired powerplants, and other industries will have a significant long-
term impact on ozone and fine particulate emissions. These will result 
in long-term solutions that enable the northeast Ohio region to meet 
the new clean air standards on a sustainable and economically efficient 
basis. [Reference Graphic Below]

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    However, the timing of these regulations is such that the major 
impacts will occur in the 2010 to 2015 timeframe. As a result, 
compliance with current clean air standards by 2010 will require costly 
incremental actions. These actions must be especially aggressive as 
only the 40 percent of the locally generated emissions will be 
available to achieve compliance.
    According to the National Association of Manufacturers, pollution 
abatement costs in the United States are equivalent to 1.6 percent of 
the GDP in the United States. The cost of abating manufacturing 
pollution as a percentage of manufacturing output is 7.6 percent in the 
United States. To put this figure in perspective, the cost in Japan is 
3.1 percent, in Germany 5.2 percent, in Great Britain 4.7 percent, in 
Mexico 3.1 percent, and in China 1.6 percent.\3\
---------------------------------------------------------------------------
    \3\ December 2003 study by the National Association of 
Manufacturers, based on data collected by the Organization for Economic 
Cooperation and Development.
---------------------------------------------------------------------------
    The stigma of sustained designation as a non-compliance region will 
have impact on residential and economic growth, in spite of significant 
improvements in air quality. This chronic condition will create an 
environment of uncertainty and significant cost that will accelerate 
the flight of private capital from the region--and most likely entirely 
out of the country. Companies looking to locate facilities or expand 
capacity will not even consider communities in nonattainment. We will 
lose jobs. We will lose entire companies--probably to other countries.
4. Addressing Complexity Requires More Time and Better Modeling
    The NERA study I mentioned earlier estimated that deferring the 
compliance date for ozone from the presently required 2010 to 2015 to 
allow realization of emission reductions from national regulations 
already in place, would reduce the cost of controls from $919 million 
for 2010 to $12 million for 2015. They also estimate reductions in the 
projected loss of Cleveland's GRP from $1.4 billion to $20 million and 
in the job loss from 12,000 to 100. If these numbers are even 50 
percent accurate, then great care must be taken not to create similar 
implementation gaps by adopting any new fine particulate standards.
    Compliance with a more stringent fine particulate standard--in the 
face of standards misalignment and indeterminate science--before we 
have even had the opportunity to adequately address the challenges of 
the current SIP processes --may be physically impossible, if not 
economically devastating.
    I again must emphasize that achieving cleaner air is a goal we all 
actively support. However, we urge the Federal Government to move 
forward with great caution. We ask that you provide regions like 
Cleveland with adequate time and resources to find a balanced approach 
that enables us to address these increasingly complex air quality 
challenges in ways that minimize damage to our economy. Incremental 
responses with compliance timelines that are not in synch with national 
industry regulations, such as those aimed at achieving compliance on 
ozone and fine particulate matter standards, are likely to create huge 
costs in the short-term and leave our region in a state of non-
compliance for decades to come. We respectfully ask that you urge the 
EPA Administrator to defer action to change the 24-hour fine 
particulate matter standard at this time and assist Northeast Ohio with 
evaluating the impact of meeting the current standards.
                                 ______
                                 
    Response by William Christopher to an Additional Question from 
                           Senator Voinovich
    Question. Energy prices are impacting businesses' ability to 
compete in the global marketplace, and revising the particulate matter 
standards will increase energy costs. How would higher energy prices 
and higher natural gas prices impact your business and the local 
economies that you operate in? Also, since Alcoa is a global entity, 
what kind of disadvantage does this give to companies trying to operate 
in the United States and compete?
    Response. Competitive energy prices are critical to Alcoa's ability 
to succeed in both U.S. and global markets. In particular, electricity 
prices for our primary aluminum smelters are a major factor in the 
business because that component represents 25 percent of the cost to 
make one pound of metal. We continue to seek competitive electricity 
sources around the world and for our existing smelters in the United 
States. Primary aluminum production is a global business and energy 
prices will continue to be a major factor in determining where new as 
well as sustaining investments will be made. Over time, countries with 
uncompetitive energy prices will tend to see a decline in investments, 
particularly in primary production facilities.
    Likewise, high natural gas prices are a concern, particularly for 
our fabricating facilities where it is used in heat treatment 
processes, for example. Increased gas prices have a significant effect 
on our profitability which, in turn, will help to determine our ability 
to make future investments in those plants.
    In summary, energy prices in the United States that are not 
competitive with prices in other countries will have a negative impact 
on our domestic locations.
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      Responses by Conrad Schneider to Additional Questions from 
                             Senator Inhofe
    Question 1. You testified that at our February (sic) 9, 2006 
hearing, there was agreement that there was no relationship between 
natural gas prices and clean air regulations. Are you aware that when 
asked that specific question, Mr. Jack Gerard, President of the 
American Chemical Association testified, ``Well, like you, Mr. 
Chairman, having lost 100,000 jobs in our industry directly related to 
that increased natural gas price, we believe there is a direct 
correlation. Like you, we think that is a no-brainer. It is clearly 
happening.'' Would you like to modify your testimony on this matter?
    Response. No. A review of the unofficial transcript from that 
hearing reveals that in the course of over two hours of testimony in a 
hearing solely devoted to the hypothesis that clean air regulations 
have been largely responsible for driving up natural gas prices, not 
one witness agreed with that proposition. In fact, Messrs. Wehrum of 
EPA and Gruenspecht of EIA explicitly declined several invitations by 
interrogating senators to lead them to that conclusion. Mr. Bluestein 
directly contradicted the proposition. Mr. Gerard, while undoubtedly an 
expert on the topic of the economics of the chemical industry, would 
seem unlikely to possess the particular analytic expertise regarding 
the relationship between specific clean air regulations not pertaining 
to his industry and natural gas prices. In any event, Mr. Gerard's 
statement is actually ambiguous on the point of whether increased 
natural gas prices have been due to clean air regulations. Indeed, Mr. 
Gerard's statement could fairly be read mean that he finds a 
relationship between increased natural gas prices and lost jobs--a 
proposition not under dispute. The question at issue is whether 
regulations promulgated under the Clean Air Act have had a significant 
impact on natural gas prices. The record will clearly show that none of 
the witnesses at the hearing testified that Clean Air Act regulations 
were a significant cause of recent high natural gas prices. I would be 
glad to amend my answer to include specific quotations demonstrating 
this fact at such time as the official transcript becomes available.

    Question 2a. Mr. Schneider, in your testimony you stated regarding 
Butler County, Ohio that in order to achieve the standards ``powerplant 
sulfur dioxide is the next lowest hanging fruit. We need to take the 
second bite at that apple to make achieving the standards a reality'' 
Mr. Schneider, historically Butler County has been a manufacturing 
based county relying on steel and paper manufacturing as well as the 
automotive industry. They have been particularly hard hit over the last 
few decades with the loss of thousands of manufacturing jobs and 
manufacturing employers. At present, of the top 10 employers in the 
county, 4 are governmental units, 3 are hospitals, and only 1 is a 
manufacturing facility AK Steel in Middletown. AK Steel operates at the 
former Armco facility and employs thousands fewer workers today then 
during their heyday. Facilities such as the International Paper Plant 
(former Champion Paper) in Hamilton employs (sic) far fewer people than 
before and other facilities such as the GM Fisher Body plant in 
Fairfield have completely closed. At this point, the county is starting 
to recapture some of their (sic) lost manufacturing jobs. What has been 
a benefit to Butler County has been somewhat stable utility prices 
since 1994, until January 2006, when the county saw an increase of 30 
percent in their (sic) utility rates.
    Please provide the Committee a detailed analysis to substantiate 
your claim that utility emissions in Butler County are the next lowest 
hanging fruit.
    Response. The issue of identifying the most cost-effective emission 
control measures to bring the county into attainment with the National 
Ambient Air Quality Standard (NAAQS) for fine particulate matter 
(PM2.5) should be of great interest to the industries in 
Butler County that you identify. In writing a State Implementation 
Plan, a State or metropolitan area must reduce emissions sufficiently 
to achieve attainment of the National Ambient Air Quality Standards 
(NAAQS). If those reductions do not come from one sector or group of 
pollution sources, they must come from another. If they do not come 
from the most cost-effective source, they will come from other less 
cost-effective sources. First, I will discuss the general cost-
effectiveness of powerplant sulfur dioxide controls for particulate 
matter reduction. Second, I will address the specific cost-
effectiveness for Butler County, Ohio of incremental additional sulfur 
dioxide controls on powerplants beyond those required by the Clean Air 
Interstate Rule (CAIR).
    It is well-established that for fine particulate reduction, there 
is no more cost-effective source than cuts in powerplant sulfur 
dioxide. In fact, this is a large part of the policy justification for 
the Administration's ``Clear Skies'' proposal--i.e., that controls on 
powerplant sulfur dioxide could obviate the need for States to adopt 
additional local emission control measures. See e.g., Testimony of 
Jeffrey Holmstead, Assistant Administrator, U.S. Environmental 
Protection Agency, Before the Energy and Air Quality Subcommittee 
Energy and Commerce Committee United States House of Representatives 
May 26, 2005 at p. 8. This is true simply because on a dollars-per-ton 
basis, nothing rivals powerplant sulfur dioxide reductions for 
PM2.5 reduction. The reason is simple: sulfur dioxide can be 
reduced through a combination of using coals with lower fuel-bound 
sulfur content, coal washing, and installing post-combustion sulfur 
removal devices such as flue gas desulfurization. In addition, under 
the Acid Rain program and the CAIR rule, these emission control 
strategies are combined with broad regional emission credit trading 
programs that can lower overall and firm-specific costs relative to 
plant-by-plant controls. Significant sulfur dioxide reductions can be 
achieved for less than $2000 per ton removed. Compared to powerplant 
controls, fine particulate precursor emission control measures on 
industrial and other sources are relatively less cost-effective i.e., 
have higher dollars per ton of removal costs.
    Specifically, U.S. EPA in its Clean Air Interstate Rule (CAIR) has 
analyzed the relative cost-effectiveness of various control measures on 
a variety of pollution source categories. See the CAIR Preamble 70 Fed. 
Reg. 25162 (May 12, 2004) and the original Interstate Air Quality Rule 
(IAQR) proposal 69 Fed. Reg. 4566 (January 30, 2004). For the final 
CAIR rule (see 70 Fed. Reg. at 25201-05), EPA's comparisons (and their 
SO2 removal average costs in $/ton) were: (1) for Best 
Available Control Technology (BACT) determinations for coal-fired 
electric utility boilers ($400-2100/ton); (2) Best Available Retrofit 
Technology (BART) for electric utility boilers as proposed in 2005 
($2600/ton in 2015, $3400/ton in 2020); (3) Non-road diesel engines and 
fuel (2004 Nonroad Diesel Heavy Engine Rule ($800/ton). By way of 
comparison, recent SO2 allowance price as reported by the 
trade publication Air Daily on August 28, 2006 was less than $700/ton. 
The marginal costs of several State sulfur dioxide programs (and the 
Western Regional Air Partnership or WRAP) were reported by EPA 
(Wisconsin $1400/ton; North Carolina $800/ton; WRAP $1100-2200/ton) and 
New Hampshire at $600/ton. See 70 Fed Reg. at 25202 and 69 Fed. Reg. at 
4613. EPA also estimated that the average costs of sulfur dioxide 
controls for CAIR was between $500-700/ton, with marginal costs between 
$700-1000/ton. See 70 Fed. Reg. at 25602-03). EPA dubbed CAIR's 
approach to sulfur dioxide reduction to be ``highly cost-effective'' 
since it ``has a cost-effectiveness that is at the lower end of the 
updated reference tables i.e., the SO2 cost comparisons set 
forth above.'' Id.
    The Ozone Transport Commission (OTC) has also analyzed the relative 
cost-effectiveness of competing control strategies for sulfur dioxide 
(as a particulate matter precursor) relative to other strategies to 
reduce directly-emitted and secondarily-formed particulate matter. The 
table below illustrates that there are no control strategies that are 
consistently more cost-effective than the $700-1000/ton range of 
incremental sulfur dioxide controls achievable on powerplants.

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    In addition, the California Air Resources Board (CARB) has analyzed 
the relative cost-effectiveness of sulfur dioxide controls in the 
context of promulgating a rule governing emissions from marine harbor 
craft. CARB estimated the cost-effectiveness of the sulfur dioxide 
reductions of this rule at between $5800-6600/ton. The particulate 
matter cost-effectiveness figure is about $53,000/ton. See ``Initial 
Statement of Reasons, Proposed Regulation for Auxiliary Diesel Engines 
and Diesel-Electric Engines Operated on Ocean-going Vessels within 
California Waters and 24 Nautical Miles of the California Coastline,'' 
California Air Resources Board (October 2005) at p. 159. Clearly, the 
sulfur dioxide number for harbor craft emission reductions (a measure 
California is in the midst of finalizing) is far higher than current 
powerplant sulfur dioxide reduction costs as reflected by the sulfur 
dioxide allowance price, and by the CAIR ``highly cost-effective'' cost 
metric.
    For States projected to remain in nonattainment notwithstanding the 
CAIR rule reductions, EPA is in the process of analyzing the most 
effective additional measures (beyond CAIR) that States can employ. EPA 
is also undertaking this analysis as part of finalizing its Regulatory 
Impact Analysis (RIA) of the proposed tighter particulate matter 
standards. The following bar chart, which I submitted as part of my 
written hearing testimony, is EPA's best current analysis of the 
relative effectiveness of various attainment strategies for Butler 
County, Ohio. EPA in this analysis conducted a ``thought experiment'' 
assuming an across-the-board 30 percent cut over and above the 
requirements of the CAIR rule by each economic sector (e.g., 
powerplants, mobile sources, industrial sources, area sources, etc.), 
by geographic region (e.g., regional vs. local controls), and by 
pollutant (e.g., sulfur dioxide, nitrogen oxides, volatile organic 
compounds, and ammonia). The bars show the potential reduction in mg/
m3. The taller the bar on the chart, the more effective the 
strategy. The results of EPA's analysis as displayed on the bar chart 
reveal that the most effective strategy is further control of 
``Regional EGU SO2'' which translates as regional sulfur 
dioxide control on powerplants.

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    I would note that the second most effective strategy--``Regional 
Mobile POC and PEC'' (which translates as regional diesel organic 
carbon and elemental carbon)--is actually not the next highest bar on 
the chart. That is because EPA now recognizes that its emissions 
inventory for mobile diesel sources is understated by a factor of at 
least two but did not take that into account in creating this chart. 
So, that bar (in bright yellow) should be at least twice as high as it 
appears on the chart. Together these strategies (a 30 percent 
additional cut in powerplant sulfur dioxide beyond CAIR and a 30 
percent cut in diesel organic and elemental carbon) would produce 
approximately 1.4 mg/m3 in PM2.5 reduction for 
Butler County. The PM2.5 design value for Butler County is 
16.10 mg/m3. The PM2.5 NAAQS is 15.0. So, a 1.4 
mg/m3 reduction would bring Butler County's design value 
down to 14.7 mg/m3 and into attainment with the standard.
    Note that following these two strategies, the next most effective 
strategies EPA identified are ``Regional Point Source POC and PEC'' and 
``Regional Area Source POC and PEC''. These translate into carbon 
reductions from regional industrial and area (i.e., small business) 
sources, some of which may be located in Ohio and some in upwind 
States. By contrast, ``local'' sources of all kinds i.e., sources 
located in Butler County (see the right-hand set of bars on the chart) 
were not found to be effective in reducing Butler County's 
PM2.5 design value. Thus, if regional powerplant emissions 
are not reduced beyond CAIR and diesel emissions reduction measures are 
not also part of the strategy, Butler County will be forced to adopt 
relatively less-effective measures for example on pollution sources 
such as AK Steel or International Paper's Hamilton plant. While a 
possible increase in utility electric rates could impact these firms, 
they would feel the cost of emission controls on their own facilities 
directly and probably more significantly. Each of the industries 
mentioned in the question emit fine particulate matter and each could 
be subject to emissions controls if limits on powerplant emissions 
beyond those required by the CAIR rule are not adopted.

    Question 2b. Please explain whether further utility reductions in 
Butler County would cause any further increases in utility rates and 
what that impact would be on jobs in the County, particularly 
manufacturing jobs.
    Response. EPA uses the Integrated Planning Model (IPM), an economic 
and electricity power dispatch computer model, to predict the electric 
price impacts of its air regulatory policies. EPA employed ICF 
Consulting to run the IPM model to evaluate the electricity price 
impacts of its CAIR rule. CATF also retained ICF to run the IPM model 
to evaluate a suite of tighter-than-CAIR powerplant sulfur dioxide caps 
to evaluate their environmental and economic performance. We filed the 
results of those runs in the CAIR rulemaking docket. The results as 
presented to then-EPA Administrator Leavitt in a December 2004 meeting 
are attached to this document. In short, CATF found that a 
significantly tighter interstate sulfur cap (a CAIR region cap of 1.84 
million tons in 2015 vs. the CAIR cap of 2.7 million tons in 2015) 
would add less than a nickel per million British Thermal Units to the 
price of natural gas in 2020 and less than 50 cents per month to the 
average residential electric bill.
    In addition, EPA has analyzed other proposals that include tighter 
sulfur dioxide emission limits than the CAIR rule. For example, in 
October 2005, EPA released full cost-benefit analyses of the CAIR rule 
and the Clean Air Planning Act (S.843). See: http://www.epa.gov/
airmarkets/mp/cair--camr--cavr.pdf and http://www.epa.gov/airmarkets/
mp/carper.pdf. The Clean Air Planning Act contains not only a sulfur 
dioxide cap that is much tighter and which must be achieved much more 
quickly than that in CAIR. EPA also modeled the cost of CAPA's 
aggressive mercury provision as part of this analysis as well. For 
CAIR, EPA found that the projected retail electric price would be 6.1 
cents per kilowatt hour in 2010, 6.5 in 2015 and 2020. Notwithstanding 
the additional mercury requirement, EPA's analysis of the Clean Air 
Planning Act estimated that the projected retail electric price under 
CAPA would be 6.5 cents per kilowatt hour in 2010, 2015, and 2020--
virtually identical to that projected for CAIR.
    Therefore, economic analysis demonstrates that further utility 
sulfur dioxide reductions should cause no further increase in electric 
or natural gas utility rates in Butler County and no related impact on 
jobs.

    Question 2c. In your testimony you stated ``the current proposed 
standards are achievable, cost benefit justified and can be met with 
affordable, available technology that will not damage America's 
economic vitality or the economic health of the sectors that will be 
called upon to shoulder the load.'' What exactly can Butler County do 
to obtain the proposed standards without affecting their economic 
vitality or economic health?
    Response. Please refer to my answer to question 2(a) above. In 
short, based on U.S. EPA's latest analysis, the combination of a 
regional 30 percent additional reduction in powerplant sulfur dioxide 
and a 30 percent reduction in diesel organic and elemental carbon is 
projected to bring Butler County in to attainment. My answer 
immediately above (for question 2(b)) demonstrates that the powerplant 
portion of the equation can be achieved economically. If the diesel 
portion of the strategy can be achieved through funding and strategic 
deployment of money for retrofitting existing diesel engines e.g., 
under the Diesel Emission Reduction Act of 2005, then impacts on Butler 
County's economy can be further minimized.

    Question 2d. Before making your claims about Butler County in your 
testimony, did you examine the impacts on the January 2006 utility rate 
increases on jobs in the County, economic outlook, or the impact on 
proposed new facilities or expansions? Did you look at these factors in 
relation to your claims regarding the next wave of reductions?
    Response. Not specifically. I accept notion that a substantial 
increase in electric rates could cause these economic impacts. The 
assertion in my testimony rests on the premise that additional 
powerplant sulfur dioxide controls will not in fact lead to an increase 
in utility natural gas or electric rates. This premise is supported by 
the EPA IPM modeling cited in my previous answers.

    Question 2e. At an environmental conference in Columbus, Ohio on 
July 27, 2006, Ohio EPA Director and Air Chief both reported that they 
don't know how they will get the current PM2.5 nonattainment 
areas into compliance. Given their expertise and understanding of Ohio, 
how do you respond to their statements?
    Response. I would not interpret these statements as claiming that 
achieving attainment is physically impossible. If emissions upwind and 
in the Ohio PM2.5 nonattainment areas are reduced 
sufficiently, then these areas will attain. These statements seem to 
reflect instead the political challenge of obtaining the needed 
reductions--how to mandate reductions on upwind and in-state sources in 
a way that will be effective but also politically acceptable in Ohio 
and the Midwest? These statements also likely betray a certain amount 
of frustration with U.S. EPA. Indeed, EPA has failed to formulate 
sufficient national control programs to help States achieve timely 
attainment. Only when this Committee focused attention on the 
seriousness of the challenge, for example in Cleveland, Ohio, did EPA 
respond with a deliberative process to evaluate the available options. 
In this way, the Committee's process served to spur the needed 
attention. Frankly, this level of effort (i.e., a partnership between 
Federal, regional, State, and local air officials, as well as a host of 
private sector firms and nongovernmental organizations to identify, 
evaluate, propose, and win support for emission reductions) must be 
replicated in each of the post-CAIR residual nonattainment areas if 
they are to attain in a timely fashion. Each area poses its own unique 
set of challenges. Nonattainment with the PM2.5 standard 
presents a serious problem that deserves concerted attention of these 
authorities. PM2.5 nonattainment implicates public health--
by shortening the lives and hurting the health of area residents--and 
stresses local economies. Given the stakes, EPA, the regional, State 
and local air agencies must redouble their efforts and focus on the 
necessary measures to achieve timely attainment. The Clean Air Task 
Force and our State environmental group partners are ready to assist in 
any way that we can.
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