[Senate Hearing 110-1269]
[From the U.S. Government Publishing Office]


                                                      S. Hrg. 110-1269
 
                        REGULATION OF GREENHOUSE
                     GASES UNDER THE CLEAN AIR ACT

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 23, 2008

                               __________

  Printed for the use of the Committee on Environment and Public Works
  
  
  
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]



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

                               __________
                               
                               
                               
                        U.S. GOVERNMENT PUBLISHING OFFICE
88-911 PDF                  WASHINGTON : 2015                        
             
________________________________________________________________________________________              
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, 
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). 
E-mail, [email protected].  
              
              
              
              
              COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED TENTH CONGRESS
                             SECOND SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut     JOHN W. WARNER, Virginia
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York     JOHNNY ISAKSON, Georgia
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             LARRY E. CRAIG, Idaho
AMY KLOBUCHAR, Minnesota             LAMAR ALEXANDER, Tennessee
SHELDON WHITEHOUSE, Rhode Island     CHRISTOPHER S. BOND, Missouri

       Bettina Poirier, Majority Staff Director and Chief Counsel
                Andrew Wheeler, Minority Staff Director
                            C O N T E N T S

                              ----------                              
                                                                   Page

                           SEPTEMBER 23, 2008
                           OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     3
Klobuchar, Hon. Amy, U.S. Senator from the State of Minnesota....     6
Voinovich, Hon. George, U.S. Senator from the State of Ohio......     7
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland     9
Craig, Hon. Larry, U.S. Senator from the State of Idaho..........    10
Bond, Hon. Christopher, U.S. Senator from the State of Missouri..    12

                               WITNESSES

Meyers, Robert, Principal Deputy Assistant Administrator, Office 
  of Air and Radiation, U.S. Environmental Protection Agency.....    14
    Prepared statement...........................................    17
Nichols, Hon. Mary, Chairman, California Air Resources Board.....    58
    Prepared statement...........................................    60
Burnett, Jason, Former Associate Deputy Administrator, U.S. 
  Environmental Protection Agency................................    70
    Prepared statement...........................................    72
    Responses to additional questions from Senator Boxer.........    99
    Response to an additional question from Senator Inhofe.......   101
Bookbinder, David, Chief Climate Counsel, Sierra Club............   103
    Prepared statement...........................................   105
    Response to an additional question from Senator Boxer........   112
    Response to an additional question from Senator Cardin.......   112
    Response to an additional question from Senator Inhofe.......   113
Kovacs, Bill, Vice President, Environment, Technology and 
  Regulatory Affairs, U.S. Chamber of Commerce...................   121
    Prepared statement...........................................   123
    Response to an additional question from Senator Boxer........   135
Responses to additional questions from:
    Senator Cardin...............................................   136
    Senator Inhofe...............................................   138
Lewis, Marlo, Senior Fellow, Competitive Enterprise Institute....   182
    Prepared statement...........................................   184
    Responses to additional questions from Senator Inhofe........   202

                          ADDITIONAL MATERIAL

EPA Report to Congress, The Benefits and Costs of the Clean Air 
  Act 1990 to 2010...............................................   252


         REGULATION OF GREENHOUSE GASES UNDER THE CLEAN AIR ACT

                              ----------                              


                      TUESDAY, SEPTEMBER 23, 2008

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m. in room 
SD-406, Dirksen Senate Office Building, Hon. Barbara Boxer 
(chairman of the committee) presiding.
    Present. Senators Boxer, Cardin, Klobuchar, Whitehouse, 
Inhofe, Voinovich, Craig, and Bond.

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

    The Chairman. On April 2, 2007, nearly a year and a half 
ago, the Supreme Court of the U.S. confirmed in no uncertain 
terms that EPA has authority to regulate greenhouse gas 
pollution under the Clean Air Act. The Court ended years of 
litigation by ruling against the Bush administration and it 
made clear that EPA must move forward. The language was very 
clear.
    At first, EPA moved ahead on greenhouse gas regulations, as 
the Supreme Court directed. EPA reviewed the science, as we 
know from Jason Burnett's previous testimony, and the proposed 
endangerment finding that the White House refused to release. 
EPA Administrator Johnson reached the conclusion that, yes, 
greenhouse gases do endanger public welfare. He deferred the 
issue of endangerment of public health, which is equally clear, 
but the proposed endangerment finding drafted by EPA was all 
that was needed to issue regulations.
    Administrator Johnson told us in July of last year that EPA 
was planning to issue final rules on regulating greenhouse 
gases by the end of 1908. We also know from prior hearings that 
the endangerment findings and EPA's proposal for regulation had 
been given the green light by Mr. Johnson and other cabinet 
officials.
    Unfortunately, after a long delay, the Bush administration 
stopped progress on this rulemaking in its tracks. The White 
House and Administrator Johnson discarded the key aspects of 
the work on this rule. Instead, they took the weakest step 
possible in order to further delay action. This was EPA's 
``Advanced Notice to Proposed Rulemaking''. The notice 
contained a series of letters from members of President Bush's 
cabinet, and other executive officers, making arguments against 
Clean Air Act regulation. Even Administrator Johnson wrote an 
introduction to the notice, undercutting the work of his own 
EPA staff.
    We know this routine all too well. This disregard for the 
law, misleading the public, and stonewalling, which we find 
unacceptable. Many of us do. The stakes could not be higher. 
The Intergovernmental Panel on Climate Change (IPCC) has warned 
of the dangers that global warming poses for all of us, such as 
droughts, extreme weather events, threats to water resources, 
more frequent and intense wildfires, threats to public health, 
and the extinction of up to 40 percent of the species on the 
planet. The Bush administration's own departments have found 
similar facts.
    Time is not our friend. We have a window of opportunity 
which we must take advantage of. And every moment that we wait 
to address global warming makes it harder to do what is 
necessary to avert the consequences that would be devastating 
for our Nation and the world.
    We need to consider all of the tools available to us to 
avert the dangers of unchecked global warming. And I continue 
to believe we need a comprehensive law to reduce global warming 
emissions but, in the meantime, there is much that can and 
should be considered under the Clear Air Act. This law has a 
proven track record over the last 40 years. It has been very 
effective in reducing pollution and in saving lives.
    Our witnesses today will set the record straight on the 
value of the Clean Air Act and addressing greenhouse gas 
emissions. They will describe opportunities available now under 
the Act to move forward. This hearing will provide a road map 
for the next administration to finally take effective action on 
reducing global warming emissions. After this hearing, this 
committee will prepare a report to the next President on the 
Clean Air Act's potential role in combating global warming, so 
that President will have the facts in front of him.
    I want to make one last point in the time I have remaining. 
We will hear a lot about how this would be a disaster for the 
economy. I want you to know that, in my home State, we are 
suffering from a horrific economic situation because we have 
the most mortgage foreclosures of any State. We have more than 
25 percent of all of the foreclosures. And I will say this, our 
republican Governor, working with our democratic legislature, 
passed the toughest global warming legislation in the country. 
And I am told unequivocally, by both sides of the aisle in my 
State, that were it not for this law, and the fact that 400 new 
companies have been set up--solar, wind, geothermal--and I 
visited many of these new startups, that without this, we would 
be in far worse shape that we are in. Many of the workers that 
have been laid off from the construction industry are working 
putting roofs on, they are working in new enterprises all 
across my State.
    So, when you hear that this is devastating to the economy, 
I think it is important to note that we have tried it, we are 
doing it and, but for that, we would be in far worse shape than 
we are in at this point.
    Senator Inhofe.

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

    Senator Inhofe. Thank you, Madam Chairman. Let me say first 
that the Senate Armed Services Committee has Secretary Gates 
there and I will have to be going back and forth----
    The Chairman. I understand.
    Senator Inhofe [continuing]. in this same building here. I 
am hopeful that today's meeting will focus less on political 
theatrics and more on the substantive matter before us today, 
which has very urgent and troubling indications for our already 
fragile economy. This matter has a very real possibility of 
regulating greenhouse gases under the Clean Air Act.
    Now, rather than trying to uncover who knew what and when 
during the deliberative process at the EPA, this hearing should 
begin our substantive look into the Clean Air Act and just 
exactly how it will work in relation to the regulation of 
greenhouse gases.
    Now, despite my disagreement with the Supreme Court in the 
Massachusetts versus the EPA case, I recognize that this 
committee has the responsibility to evaluate the implications 
of that decision which, in my view, have failed to focus until 
now. Therefore, I am grateful, Madam Chairman, for your 
decision to have this hearing today and hope that you will 
commit to work with us through this issue and take a hard look 
at all of the potential impacts, as the climate debate moves 
forward next year.
    As more and more analysis is done about the potential 
implications of regulating greenhouse gases under the Clean Air 
Act, the more alarming the consequences become. While some may 
seek to dismiss these analyses as scare tactics or 
exaggeration, let me offer up the recent D.C. Circuit Court 
decision vacating the current rule as a reminder of how 
strictly the courts interpret the provisions of the Clean Air 
Act.
    So, while some of the environmental community or the Agency 
may see an inherent flexibility in the act to soften some of 
the prescriptive permitting requirements that could be 
triggered if greenhouse gases are regulated, I am not so 
certain they should rush into these early decisions. My concern 
with the potential disastrous effect of this issue are not just 
mine alone, several other members on both sides of the Capitol 
and on a bipartisan basis, have already expressed concern 
publicly with the Massachusetts case.
    And, with the potential regulation of greenhouse gases into 
the Act, John Dingell, the Chairman of the House Energy and 
Commerce Committee, in a recent hearing, even called the 
situation a ``glorious mess, in that this has the rich 
potential for causing a fine economic mess and a splendid 
manufacturing industrial shut-down.'' Pretty strong words from 
John Dingell, and I agree with that.
    We will also hear today from the United States Chamber of 
Commerce, who will voice a very strong opposition to any 
proposed rules into the Act and they will discuss the new 
analysis that finds over one million mid-sized to large 
commercial sector source could become exposed to PSD permitting 
requirements, including 92,000 health care facilities and 
100,000 schools and other educational facilities. In addition, 
almost 200,000 industrial manufacturing sources emit enough 
CO2 per year to become exposed to the PSD permitting 
requirements, as well as over 17,000 large agriculture sector 
sources.
    Keep in mind that, as part of the PSD process, regulated 
sources are often forced to install best available control 
technology (BACT) which, in the case of CO2 , has 
not been determined. This additional requirement would lead to 
even more bureaucratic delay and legal challenges, in a time of 
record high energy prices, economic uncertainly, and dire 
financial news. And, with Treasury Secretary Paulson testifying 
at this hour, as we speak, on the largest government bailout in 
history, the only positive economic data I can gather under 
those scenarios is for the legal profession, as they will have 
a feeding-frenzy of new rules to challenge.
    Madam Chairman, this is only one example of the 
consequences of potential regulation under the Clean Air Act. 
There is also the State implementation plans, the New York 
Source Review Provisions, which can be applied in two different 
ways, and I could go on.
    It is my hope that this hearing will lead to a broader 
understanding of the dire implications of regulating 
CO2 , doing it through the courts, something that 
those proponents of this have failed to be able to do through 
the legislative process. So, I agree that it is a disaster for 
the economy and hopefully we can minimize some of the effects 
that will be coming from this.
    The Chairman. Senator, thank you. I think what you have 
laid out and what I have laid out shows why this is such an 
interesting committee. I mean, you know, one of us sees this as 
an opportunity to make life better for our people and to 
stimulate the economy and the other sees it as a major 
disaster. And that is why, in my opening statement, I talked 
about our experience in California----
    Senator Inhofe. Mm-hmm.
    The Chairman.--in acting in a bipartisan way. I don't know 
that I could convince you of this, I doubt that I can, or you 
can convince me of your position, but I think the respect we 
have for one another is very important----
    Senator Inhofe. Yes.
    The Chairman.--and I appreciate that respect----
    Senator Inhofe. And that's why we have witnesses here.
    The Chairman.--in your testimony.
    Senator Inhofe. Mm-hmm.
    The Chairman. And I think what is important is, the one 
thing in your opening statement I would like to take issue with 
is something about political theatrics. I don't know what you 
are talking about, political theatrics. What I am trying to do 
as the Chairman, and with your help as ranking member, is get 
to the facts. Get to the science, get to the facts. We may come 
out differently, but I don't think there needs to be any 
theater about it at all. It is, it is really--I found that a 
little disturbing and I would hope that maybe you would 
reconsider in your future statements that you don't imply that 
is what this is about, because I don't really see it.
    Senator Inhofe. Well, Madam Chairman, I would have to check 
with staff--we have had 25, 26 hearings on these subjects and 
we have brought in people from all over. It is--there is a 
philosophic difference, we all know that.
    The Chairman. Yes.
    Senator Inhofe. But I think this hearing today--one of the 
things that I am concerned about, of course, is the cost of 
this thing. Right now, we have some extremely dangerous 
economic signs and this could make that even more severe.
    The Chairman. I understand----
    Senator Inhofe. Yes.
    The Chairman.--and that is totally legit. And that is where 
we depart. As I say, some of us see this as an economic 
opportunity and some as a disaster. That's fair, but I hope 
that if you do see any political theatrics coming from this 
committee, at the moment they happen, just call it that.
    Senator Inhofe. Mm-hmm.
    The Chairman. But that is not what my purpose is.
    Senator Inhofe. That's a good idea.
    The Chairman. And I thank you very much. And I know you 
have to go in and out and I respect that as well. Senator 
Klobuchar.
    [The prepared statement of Senator Inhofe follows:]

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

    Madame Chairman, I am hopeful that today's hearing will 
focus less on political theatrics and more on the substantive 
matter before us today, which has very urgent and troubling 
implications for our already fragile economy. This matter is 
the very real possibility of regulating greenhouse gases under 
the Clean Air Act.
    Rather than trying to uncover who knew what and when during 
the deliberative process at the EPA, this hearing should begin 
our substantive look into the Clean Air Act, and just exactly 
how it will work in relation to the regulation of greenhouse 
gases. Despite my disagreement with the Supreme Court in the 
Massachusetts v. EPA case, I recognize that this Committee has 
a responsibility to evaluate the implications of that decision, 
which in my view we have failed to focus on until now. 
Therefore, I am grateful, Madame Chairman, for your decision to 
have this hearing today, and hope you will commit to work with 
me through this issue and take a hard look at all of the 
potential impacts as the climate debate moves forward next 
year.
    As more and more analysis is done about the potential 
implications of regulating greenhouse gases under the Clean Air 
Act, the more alarming the consequences become. While some may 
seek to dismiss these analyses as scare tactics or 
exaggeration, I only offer up the recent D.C. Circuit Court 
decision vacating the CAIR rule as a reminder of how strictly 
the Courts interpret the provisions of the Clean Air Act. So 
while some in the environmental community or the Agency may see 
an inherent flexibility in the Act to soften some of the 
prescriptive permitting requirements that could be triggered if 
greenhouse gases are regulated, I am not so certain they should 
rush to those early conclusions.
    My concern with the potential disastrous effects of this 
issue are not just mine alone. Several other Members, on both 
sides of the Capitol and on a bipartisan basis, have already 
expressed concern publicly with the Massachusetts case, and 
with the potential regulation of greenhouse gases under the 
Act. John Dingell, the Chairman of the House Energy and 
Commerce Committee, in a recent hearing even called the 
situation a ``glorious mess'' and that this has the ``rich 
potential for causing a fine economic mess and a splendid 
manufacturing and industrial shutdown.''
    We will also hear today from the United States Chamber of 
Commerce, who will voice their strong opposition over any 
proposed rules under the Act. They will discuss their new 
analysis that finds over one million mid-sized to large 
commercial-sector sources could become exposed to PSD 
permitting requirements, including 92,000 health care 
facilities and 100,000 schools and other educational 
facilities. In addition, almost 200,000 industrial 
manufacturing sector sources emit enough CO2 per 
year to become exposed to PSD permitting requirements, as well 
as over 17,000 large agricultural sector sources. Keep in mind 
that as part of the PSD process, regulated sources are often 
forced to install Best Available Control Technologies, or BACT, 
which in the case of CO2 has not been determined. 
This additional requirement would lead to even more 
bureaucratic delay and legal challenges.
    In a time of record high energy prices, economic 
uncertainty, and dire financial news, and with Treasury 
Secretary Paulson testifying at this hour on the largest 
government bailout in history, the only positive economic data 
I can gather under those scenarios is for the legal profession 
as they will have a feeding frenzy of new Rules to challenge. 
Madame Chairman, this is only one example of the consequences 
of potential regulation under the Clean Air Act. There are also 
the State Implementation Plans, the New Source Review 
provisions, which can be applied in two different ways, and I 
could go on. It is my hope that this hearing will lead to 
broader understanding of the dire implications of regulating 
CO2 under the Clean Air Act, which it was never 
intended to do, and that as we move forward into next year, 
this Committee will exercise its jurisdiction to prevent any of 
these harmful and unnecessary regulatory impacts from 
happening.

           OPENING STATEMENT OF HON. AMY KLOBUCHAR, 
            U.S. SENATOR FROM THE STATE OF MINNESOTA

    Senator Klobuchar. Madam Chair, thank you for holding this 
meeting. And I have to say I am disappointed we are having the 
hearing, but for very different reasons than Senator Inhofe.
    We were here almost 17 months ago to the day and listened 
to EPA Administrator Johnson outline his plans to reach a 
decision about whether greenhouse gases constitute an 
endangerment to public health or welfare as defined by the 
Clean Air Act. Seventeen months have gone by and still no 
decision. It is astounding that we are still waiting for a 
finding that the EPA's own staff that should take no longer 
than three or 4 months.
    Of course, the EPA has announced their endangerment plans 
under protest, as the Chair so well pointed out. The Supreme 
Court effectively ordered the Agency to go back and determine 
whether greenhouse gases may be reasonably anticipated to 
endanger public health or welfare. The Court shifted the debate 
from whether the EPA should regulate greenhouse gases to how 
they should regulate them. The EPA apparently didn't get the 
memo, because we are still talking about whether to regulate 
them at all.
    The EPA decided not to act as it had been instructed to by 
the Supreme Court. Administrator Johnson chose to issue an 
Advance Notice of Proposed Rulemaking, effectively leaving it 
to the next administration to respond to the decision.
    The cavalier attitude taken by this administration when it 
comes to climate change is offensive. When you contrast it to 
the hard work that is going on in the states all across this 
country, and municipalities, that understand we have to do 
something.
    In my State, fighting climate change has not been a 
partisan issue. We have a republican Governor and we have a 
democratic legislature and we work together on this issue to 
get one of the most aggressive renewable portfolio standards in 
the country. That is why it has been so disappointing that it 
has taken court battle after court battle and congressional 
hearing after congressional hearing to simply get the political 
leadership at the EPA to do their job.
    The Supreme Court has ruled carbon dioxide falls under the 
Clean Air Act. We shouldn't have to debate it here, we 
shouldn't have to push the EPA as hard as we do. We shouldn't 
need to have oversight hearings like this one to ensure that 
our EPA is actually protecting the environment. We shouldn't 
have to sit in a back room and look at this proposed 
endangerment finding with three senators where we can't copy it 
and give it out publicly like it is some kind of special 
national security secret document when it is, in fact, findings 
from the U.S. Government. We shouldn't have an EPA that fails 
to act and blocks states from choosing to enact stricter 
environmental standards than the Federal Government.
    It angers me to think that political forces in this 
government believe that politics is more important than public 
health, more important than allowing the American people to 
receive the evidence and make judgments on their own.
    So, it sure comes to no surprise to the people in this room 
to learn that this administration plans to leave office without 
taking any regulatory action to address climate change. In the 
absence of Presidential leadership on this issue, many of my 
colleagues in Congress have tried to fill that leadership role. 
If properly constructed, these regulations could address the 
opportunities for low--cost emissions reduction. In the end, we 
are going to have to do the hard work next year of writing the 
comprehensive climate change legislation. The Lieberman-Warner-
Boxer bill last summer was a start. Next year, we will begin 
again.
    Meanwhile, the Clean Air Act offers us the potential to get 
us moving, even before we complete the legislative package, and 
I urge the next President to get these regulations out as 
quickly as possible. We need to get started now.
    Thank you, Madam Chair, and I look forward to hearing from 
our witness.
    The Chairman. Thank you, Senator. Senator Voinovich.

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

    Senator Voinovich. Thank you, Madam Chairwoman. I thank you 
for holding today's hearing and I thank the witnesses for being 
here today. I look forward to your testimony.
    As I have listened to the conversation between Senator 
Inhofe and our Chairman, and now those from Senator Klobuchar--
I have been on this committee for 10 years and our problem has 
always been that we have not been able to harmonize the 
environment with our energy needs, with our economy, and more 
recently, with the debate of oil, our national security needs. 
And hopefully, maybe next year, we will see a lot more of that 
happening because, if we don't, we will just continue to be 
stymied as we have been for the last decade.
    Today we examine the Environmental Protection Agency's use 
of the Clean Air Act to address the issue of climate change. As 
we all now, the Supreme Court in the Massachusetts case 
confirmed the EPA's authority to regulate greenhouse gas 
emissions from motor vehicles under the Clean Air Act. The 
Agency has now issued an Advance Notice of Proposed Rulemaking 
(ANPR) that takes comment on the use of that authority and the 
various regulatory mechanisms that would come into play under 
the Act's provisions. As the ANPR makes clear, however, 
allowing the Agency to proceed along this course would provide 
for an unprecedented expansion of the Agency's power, with the 
potential of bringing the economy to a grinding halt.
    Let me be clear, I am for reasonable actions to address 
climate change. Actions that balance our country's energy and 
economic needs, but the CAA was not set-up to address climate 
change, a problem whose solution is both economy wide in its 
breadth and international in its scope. By allowing the Agency 
to address carbon dioxide as it were a traditional pollutant, 
we will be committing ourselves to inflexible and bureaucratic 
regulatory regime, which will surely harm the economy and will 
have little effect on global temperatures. And the economy, 
folks, is in real bad shape. Just ask the people in Ohio.
    Before the EPA can set vehicle emission standards, it must 
find that the greenhouse gases may reasonably anticipated to 
endanger public health and welfare. As in the ANPR, once an 
endangerment finding is made, the Agency is either compelled or 
authorized to regulate greenhouse gases under various other 
Clean Air Act provisions including the requirement to promote 
national ambient air quality standards, the new source 
performance standards (NSPS), and other requirements such as a 
new source review and title V operating permits. The ANPR 
contemplates regulating sources throughout the economy from 
mobile sources to refineries to office buildings. Many of us 
voted against the legislation that was brought before the 
Senate this summer, the Lieberman-Warner Climate Change Act, 
because of the enormous toll it would have on the economy, a 
$6.7 trillion tax increase, and the bureaucratic nightmare it 
would have created. But surely this pales in comparison to what 
the Agency now contemplates. The Chamber of Commerce estimates 
that proceeding with GHG regulation under the Clean Air Act 
would include over one million sources that previously have 
gone unregulated including large-scale single family homes, 
churches and schools. And, because established legal precedent 
does not allow the Agency to take cost into consideration when 
considering the Act, the economy would be driven to a halt. In 
fact, if the entire U.S. became--In fact, if the entire U.S. 
became a non-attainment area for greenhouse gases, as many 
believe would be required, the emission increases from business 
expansion and development would effectively be capped. That is, 
limited to what could be offset by other businesses, either 
shutting down or limiting their emissions.
    So, some have argued that the Agency has large discretion 
over how it implements CA requirements, whether it establishes 
the max, for example, or in defining what constitutes a major 
source for permitting purposes, but we will know that our 
regulatory landscape is largely decided through litigation and 
many previous attempts to build flexibility into the Clean Air 
Act measures that I have supported.
    The Court's recent decision in relating to care of rule 
underscores this. We should not subject our economy to 
inflexible laws and regulations that were written at a 
different time to solve completely different problems, nor 
should we grasp at novel legal theories and claims of 
flexibility because we feel compelled to do something to 
address the issue. EPA's plans to move forward with CAA 
regulation and greenhouse gases should be immediately halted 
and Congress should get back to the business of setting 
reasonable policies to address our country's economic, 
environmental, energy, and national security interest.
    The Chairman. Thank you, Senator. Senator Cardin.

         OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 
            U.S. SENATOR FROM THE STATE OF MARYLAND

    Senator Cardin. Thank you, Madam Chair. I would ask 
unanimous consent that my opening statement be included in the 
record.
    The Chairman. Without objection.
    [The prepared statement of Senator Cardin follows:]

          Statement of Hon. Benjamin L. Cardin, U.S. Senator 
                       from the State of Maryland

    Madam Chairman, Thank you for calling this hearing.
    Congress passed the Clean Air Act after recognizing that 
air pollutants were affecting the health of people and our 
environment. The Act was meant to provide authority for the EPA 
to protect our country from air pollutants. The question today 
is whether or not we have provided the tools necessary for the 
EPA to address the effects of greenhouse gases.
    The Supreme Court ruled that the law covers these gases, 
that the EPA was not living up to the standards of the Clean 
Air Act by neglecting to regulate them.
    The EPA itself has wavered in the past decade on whether 
these gases are a threat to public health and whether the Clean 
Air Act should be used to regulate them, adding to the 
uncertainty.
    Greenhouse gas emissions contribute significantly to 
climate change, and man-made greenhouse gases are believed to 
be largely responsible for the increase in average temperatures 
around the world. The industry and technology that we are proud 
of as Americans are contributing to this threat, and to protect 
the pride of those traditions, we need to address those 
effects.
    The energy we use and the cars we drive release greenhouse 
gases, and without regulation the effects on our climate are 
growing. Of the problems faced in the world today, the effects 
of greenhouse gases are among the most universal because of 
their tendency to redistribute beyond the site of emissions.
    This international impact is part of what makes it so 
important for America to emerge as a leader on issues of 
climate change. I have said repeatedly that strict climate 
change legislation is necessary for our national security, 
vital to our economic well-being, and critical to our 
environment. We have the opportunity to set an example that 
will prompt other nations to minimize the damage done by 
greenhouse gases.
    In order for us to show this kind of leadership, we need to 
address this problem in the most comprehensive way possible. 
Whether the existing
    Clean Air Act can sufficiently address this problem without 
overreaching its authority is the first question.
    The real focus of today is to clarify this issue, and to 
put the Congress, government agencies, and the American people 
all on the same page on climate change. We need to determine 
the most effective way to combat the effects of greenhouse gas 
emissions. In all likelihood, this will involve both new 
applications of existing legislation and new legislation to 
increase our efforts.
    Using our existing legislation is going to require a 
proactive emphasis on what we can do, rather than allowing 
ourselves to be distracted or absolved based on what we can't 
do.
    We do not have time to wait to begin this fight, nor do we 
have the luxury of relying only on existing programs not 
specifically intended for it. Today our witnesses will help us 
to understand how to both fully utilize the tools we currently 
have, and to better equip ourselves for the future.

    Senator Cardin. Let me agree with Senator Voinovich that 
our economy is in deep trouble, but it is not because we have 
too much regulation. Our financial institutions are really 
challenging us today, but I think that should teach us that we 
should be actively involved in trying to deal with public 
safety. Since 1963, the Clean Air Act has been critically 
important to the health of our country and our communities, 
dealing with airborne pollutants that endanger our health.
    This hearing is to deal with the regulation of greenhouse 
gases. The Supreme Court has said that it is appropriate for 
the EPA to make a finding in regard to greenhouse gases. This 
administration has done everything it can to prevent that from 
happening, from not living up to its responsibility as it 
relates to protecting our environment by using the tools they 
have at its disposal, including the Clean Air Act. Greenhouse 
gases clearly impose a risk to our public health.
    We have had hearings on that, Madam Chairman, and we know--
we've documented the impact of greenhouse gases and global 
climate change. We know the impact it is having throughout our 
country and throughout the world. In my own State of Maryland, 
I know what has happened with the sea level rises and what's 
happened with the impact it has had on the environment of the 
people of my own State. We know that. We know the risks that 
are involved. And we also know, and it is well-documented by 
the scientific information, that what we do is affecting the 
greenhouse gas emissions. That we are partially responsible for 
the acceleration of global climate change and we can do 
something about it.
    So, I want to just thank the Chairman for holding this 
hearing. I think we have to look at the current laws to see how 
we can use the current laws, including the Clean Air Act, in 
order to deal with this public health risk. I think that is our 
responsibility and it is certainly the responsibility of the 
Environmental Protection Agency to use current tools. But, I do 
believe we need to give the agencies new tools to deal with 
this challenge and that is why the Lieberman-Warner bill was an 
important step by this committee to say look, we can find ways 
that we can provide help to deal with the right type of 
environmental activities.
    And I agree with the Senator from Ohio, it would not only 
help as far as our environment, but would help our economy and 
would help our national security.
    So, we need to look at whether we need to pass new laws or 
modify existing laws in order that our agencies have the tools 
that they need in order to protect the public health. By the 
way, also for America to be an international leader to deal 
with the environmental issues, because Americans are effected 
by what happens in other countries. So, this truly is an 
international issue, but our laws should be ones which 
demonstrate the leadership of our country and the commitment of 
our country to protect the health of our people.
    Thank you, Madam Chair.
    The Chairman. Thank you very much, Senator. Senator Craig.

            OPENING STATEMENT OF HON. LARRY CRAIG, 
              U.S. SENATOR FROM THE STATE OF IDAHO

    Senator Craig. Thank you, Madam Chairman.
    Mr. Meyers, welcome to the committee. It is a significant 
hearing and I, like Senator Inhofe, am going to have to run, 
Madam Chair. I apologize. But I am going to do something else 
that is interesting, in the fact of this hearing and that 
hearing and the contradiction that these two hearings set up 
for the American public. And let me explain myself.
    Without question today, here in this committee, we are 
suggesting that EPA follow a certain procedure that will 
ultimately, ultimately create a dramatic increase in certain 
transportation fuels for this Nation. That is the reality of 
the low sulphur standard in diesel fuels that has driven up the 
cost of movement of goods and services across our country, 
potentially substantially. Now, I am going over to the Energy 
Committee to examine why diesel fuel prices have gone up. Is it 
any reason the American public has decided that Congress' 
performance rating is now at its lowest ever? If they watch 
this hearing and that hearing this morning, I doubt that the 
American consumer could possibly grasp what Congress has in 
mind, because they are in direct contradiction of each other, 
Madam Chair. There is no question in my mind that is a reality.
    I understand the economics of your State and your 
frustration about home mortgages. I also understand that, in 
June of this year, you had $5.00 gas prices, the highest gas 
prices of any State in the Nation, high fuel prices. Is it 
possible that those prices hurt the pocketbook of the average 
consumer that was paying the mortgage that finally defaulted? 
Oh, yes. It is possible. In fact, it is reality.
    The American economy today is going through shocks that it 
has never experienced before. Partly because of housing 
defaults, certainly because of energy costs--and part of the 
energy costs today, especially in the freight and 
transportation sector, is the high cost of diesel which is, in 
part, in part, a direct result of the new low sulphur 
standards.
    Well, those are the hearings that I am going to attend then 
today. I find them unique and I find them in full 
contradiction. It is not to suggest that we don't play a role 
in climate change, and we must. And I think that the Chairman 
and I, and the members of this committee, have the same 
appreciation, frustration, and concern about how we deal with 
it. But when we rather, in a cavalier way, suggest that we can 
put another $6 trillion hit on the consumers of this country 
and keep this economy afloat, I suggest that we deserve the 
rating we are getting as a nonperforming, nonproductive 
Congress that can't determine which direction to head for the 
sake of the American economy and, in this way, for the sake of 
the American consumer.
    If the financial shock that we are experiencing today does 
not bring a little reality to common sense and working together 
to solve problems, Madam Chair, then I am not sure that we've 
got much of a future left. I grow very frustrated.
    When truckers go out of business because they can't afford 
to fill their trucks to haul the goods and services that keep 
the American consumer going, and part of that is a direct 
result of new standards that drive up the cost as demand goes 
with it, then we need a new context to the whole debate and an 
understanding about regulation and an understanding about 
balance.
    Over the years, as I've traveled the world on the climate 
change issue, and I deal with my colleagues around the world, 
and they say please pass, please bring into reality Kyoto and 
all of those protocols. I say wait a moment, there is one very 
real difference between what we do in this country and what you 
do in your countries. We have a Clean Air Act. We have law and, 
if we pass that and if we bring that--we will enforce it. You 
can play the political games in your countries but we will 
enforce it in our country because we operate under these 
standards, Madam Chair.
    There is no question we ought to pursue what EPA is doing 
and you are doing the right thing to do so based on the court 
actions. That is not in criticism here. What is in criticism is 
reasonable and responsible balance that this Congress is 
failing on, and the American consumer now gets it--in the 
pocketbook. Boy, do they get it.
    Thank you for the hearing.
    The Chairman. You know, you are so right on the point. 
That's why I'm so glad that today we are going to be passing, 
in a bipartisan way, at least that is what I hear, tax breaks 
for alternative energy that we have been stymied from doing.
    And, the fact is, we need competition with big oil. We 
don't have enough oil in our country, 2 percent of all of the 
reserves are here and we use 25 percent of the world's energy. 
So, we need competition for the old energy. We need 
competition.
    The second point I would make is, passing climate change, 
putting a price on carbon, would give a tremendous impetus to 
these new industries. The business people in my State think we 
have missed the boat, and you'll hear more about this in the 
next panel, because they've told me--the republican and 
democratic business leaders, the venture capitalists, that we 
have blown it because we did not pass climate change 
legislation. And they tell me, unequivocally, that the 
investments that will flow from the venture capitalists to the 
new alternative energy is going to dwarf all of the investment 
that came into the communications revolution.
    So, again, what I love about this committee is you see the 
different ways we view these issues.
    And the last point I would make, which I think is critical, 
every time that this committee has passed a landmark law, and I 
have gone back, we have heard the voices of doom and gloom. 
``Oh, my God. Don't pass the Clean Air Act, it is going to be a 
disaster.'' ``Oh, my goodness, safe drinking water? Don't pass 
that. Don't pass clean water'' even though there were, in fact, 
rivers on fire in certain of our Midwest states from the 
pollution.
    So, I think what's very important and what is coming 
through here, and I agree with my colleague, we are in some 
dire straits and Congress is not looked at in the way it ought 
to be looked at. And, there are reasons. Of course, he thinks 
there are different reasons from the reasons I think. I think 
it is failure to act with an eye toward the future and sticking 
to the old ways. That's where I think we need change, but we 
will see what the people feel when they go to the polls.
    So, now I am going to go to Senator Bond.

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

    Senator Bond. Thank you very much, Madam Chair. I was just 
on the floor talking about the most immediate crisis facing us 
in the financial crisis and I am pleased to hear that we had 
come to an agreement on these extenders.
    I will talk with you later about some of the energy 
comments you made, but I thank you for holding this hearing on 
the regulation of carbon under the Clear Air Act.
    Today, we are going to hear from people who thought it was 
OK to spend $6.7 trillion dollars, and raise the price of gas 
$1.40 a gallon, to regulate carbon dioxide. They failed to get 
their $6.7 trillion legislation passed into law, so now they 
want to use government regulation to achieve the same end. It 
is hard to believe, but regulating carbon dioxide under the 
Clean Air Act would impose even more hardship on the American 
people than a $6.7 trillion Carbon Bill. That's because using 
Clean Air Act regulations to cap carbon will subject one 
million commercial buildings to regulation, 200,000 
manufacturing operations to regulation, and 20,000 large farms 
to regulation. These figures come from a study done called 
Regulatory--these regulations have alphabet soup names like 
PSD, NSPS, HAP, and NSR. Permit applications for these 
regulations are tracked, not by numbers of pages, but by inches 
of thickness. Don't even think about trying to get these 
permits and comply with these new regulations yourself, you are 
going to have to hire consultants to help you fill out all the 
forms. Then, you'll have to hire lawyers to help you defend the 
lawsuits by environmental advocates like those testifying later 
today. Many of the firms now covered by these massive 
government regulations now suffer through this process already. 
Most say that it is OK because we are talking about big 
refineries, or chemical plants, or large industrial operations. 
That is who the Clean Air Act was intended to cover, the 
biggest polluters releasing traditional air pollution. But no 
one who voted for the Clean Air Act at the time thought it 
would apply to carbon dioxide or the massive amounts of carbon 
emissions. I happen to play a role in that.
    Some may remember the Byrd-Bond amendment. I prefer to call 
it the Bond-Byrd amendment, to permit acid rain credit trading. 
That worked because there were strategies and techniques 
available for capturing acid rain and reducing the acid 
emissions. But Congressman John Dingell, who practically wrote 
large sections of the Clean Air Act himself and its amendments, 
said that he certainly never intended for it to cover carbon 
emissions. We all know his quote about what a ``glorious mess'' 
regulating carbon dioxide would be. I agree it would be a mess, 
although hardly glorious. I personally think it would be a 
disaster. One million schools, hospitals, grocery stores, 
office buildings and churches would suffer, 200,000 electrical, 
plastics, paper, chemical, metal fabrication, assembly and food 
processing operations would suffer. 20,000 greenhouses, 
nurseries, poultry, egg, vegetable, pig, and dairy operations 
would suffer.
    Clearly, people willing to impose a $6.7 trillion program 
and raise the price of gas $1.40 don't care about that kind of 
suffering or what it would do to our country, but I do and I 
will continue to care about the needs about our families, 
farmers, and workers as we reduce carbon dioxide emissions.
    I believe we need to, and we must, and we will, continue to 
reduce the amount of carbon emissions. We need to do that by 
increased use of nuclear power, which has no emissions. We need 
to get more electric cars and we are working to get the 
batteries made in Missouri because electric cars are a very 
important means of reducing our dependence upon fossil fuels.
    But we are not going to get rid of it all. Any responsible 
study I've seen said 20 to 30 years from now we will still be 
having to depend upon fossil fuels for 70 percent to 80 percent 
of our energy. But we need to develop the clean coal technology 
that can get us there. That is going to be one other source. 
But we cannot afford to reduce carbon emissions by regulation 
that would destroy our economy.
    I had the opportunity to visit East Germany right after the 
wall fell and I saw what a crippled socialist economy does to 
the environment, pollution in the streams, foul area, burning 
the worst kinds--because they couldn't afford to clean it up. 
We can't put ourselves in the position where we can't afford to 
continue to clean our air. I thank the Chair.
    The Chairman. OK. Thank you. Senator, I love working with 
you, when we can agree, but we see things so differently.
    I am so glad my California people are here today because 
they always say, ``Senator, why couldn't you get 60 votes for 
the Lieberman-Warner bill?'' and I say, ``Well, it's hard to 
explain''----
    [Laughter.]
    Senator Bond. I hope I can help them understand now----
    The Chairman. You did, and I think that's important. 
There's friendship, there's collegiality, there's major 
disagreement.
    I would ask you to read 42 U.S. Code 7602, where expressly 
written in the Clean Air Act it says that we can--we have to 
regulate any pollutant related to climate change in weather. 
So, it's in there and that's why the Court chastised, and this 
is a republican Supreme Court, chastised us for not moving 
forward.
    So, anyway, I love your comments. I disagree with them, but 
it is what makes America who we are, the ability to have these 
disagreements.
    Well, now Mr. Meyers, I am sure that you are thrilled and 
delighted that you are now going to present your case for not 
doing this, so go right ahead.
    [Laughter.]

    STATEMENT OF ROBERT MEYERS, PRINCIPAL DEPUTY ASSISTANT 
 ADMINSTRATOR, OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL 
                       PROTECTION AGENCY

    Mr. Meyers. Madam Chairman and members of the subcommittee, 
thank you for the opportunity to appear today regarding the 
potential for regulation of greenhouse gases under the Clean 
Air Act.
    Ten weeks ago, Administrator Stephen L. Johnson signed an 
Advance Notice of Proposed Rulemaking as the next step in the 
Agency's efforts to develop an effective response to the 
Supreme Court's decision in Massachusetts v. EPA. The Notice 
now remains open for public comment until November 28th. 
Currently, we have received over 200 comments, but we would 
realistically expect more.
    The NPR gives the EPA and the public a critically important 
opportunity to understand and address the implications of 
regulating GHGs under the Clean Air Act and responding to the 
Supreme Court's decision. As detailed in this document, 
regulation of GHGs under one provision of the Clean Air Act 
could lead to regulation of GHG emissions under other 
provisions of the Act, potentially affecting large numbers of 
stationary mobile sources including sources not previously 
regulated under the Act. In a broader context, the NPR adds to 
substantial work already undertaken on climate change.
    Since 2001, the Bush administration has devoted almost $45 
billion in resources to addressing climate change, science, and 
technology. The administration is also implementing mandatory 
programs under the Energy, Independence, and Security Act that 
would prevent billions of metric tons of GHG emissions through 
2030. Overall, the Bush administration is implementing over 60 
Federal programs that are directed at developing and deploying 
cleaner and more efficient energy technologies, conservation, 
biological sequestration, geological sequestration and 
adaptation.
    To help lay the groundwork for my testimony in the NPR, 
which was signed on July 11th, I ask that a copy of the 
original petitions seeking GHG standards under the Clean Air 
Act and the EPA's denial of that petition, be entered into the 
record for this hearing.
    The Chairman. Without objection.
    Mr. Meyers. As members of this committee well know, 
individual provisions of the Clean Air Act can be exceedingly 
complex. In addition to statutory language spanning several 
hundred pages, there are several decades' worth of Clean Air 
Act interpretations embodied in regulatory activity in various 
court decisions. Views on the proper interpretation of the Act 
can vary widely. During an interagency review of the NPR, other 
Federal agencies offered numerous critical comments and very 
serious questions. For the July 11th NPR, the Administrator 
decided to publish these views and seek comment on the full 
range of issues raised in the comments.
    The NPR, in general, addresses a broad range of greenhouse 
gas and climate change issues before the Agency. It contains 
the Administrator's preface, comments of other agencies, and 
each separate section details the nature of climate change and 
greenhouse gases, Clean Air Act authorities and programs, 
endangerment analysis under the Act, and mobile source 
petitions contained in Title Two of the Act. It also contains a 
lengthy discussion on stationary source authorities, including 
the discussion of permitting programs and the discussion of 
Title Six of the Act related to stratospheric ozone. Five 
technical support documents are provided and the document 
contains voluminous additional technical information.
    Within the NPR, EPA addresses and poses questions related 
to the Supreme Court's decision in Mass v. EPA, additional 
mobile source petitions received by the Agency and related to 
ships, aircraft, and non-road equipment and several stationary 
source rulemaking efforts. The NPR also makes clear that the 
Clean Air Act was not specifically designed to address GHGs, 
which helps to illustrate the challenges and opportunity for 
new legislation.
    To sum up, I would offer the following points of 
observation. At 500-plus pages, it is obvious that the Clean 
Air Act is an exceedingly complex law with many separate 
statutory interconnections. Having initially been enacted in 
its modern form in 1970 and subjected to numerous amendments, 
the Act has a far-reaching and wide--sweeping effect on power 
plants, industrial sources, literally anything that moves by 
powered propulsion, hazardous air pollutants, ozone-depleting 
substances, and many other separate matters, including the 
formulation of consumer products. The NPR reflects this basic 
statutory character, asking literally hundreds of detailed 
questions. Many outside of the Agency have commented on the 
length of the NPR. I can tell you that it was indeed a 
challenge to keep the document as succinct as it is.
    A variety of Clean Act authorities will likely come into 
play if steps are taken to address GHG emissions from many 
types of mobile and stationary sources. Since these are 
detailed in the NPR, I will not repeat information on the 
various Clear Air Act stationary pathways of the NAC section 
111, section 112 regulation, but would note that some 
authorities may trigger or preclude the use of other 
authorities, while other authorities would not have such an 
effect. As presented in the NPR, some Clean Air Act authorities 
are prescriptive, either by their terms or by their historical 
interpretation, by the EPA and the courts. Some provisions 
could provide more flexibility to tailor requirements and 
encourage technological development.
    Thus, it is difficult, as an initial matter, to project the 
ultimate outcomes of regulation pursuant to the Act. It is our 
hope and expectation that the NPR will assist the Agency's 
understanding of the various issues presented. Controlling the 
GHG emissions under most provisions of the Clean Air Act could 
substantially expand the number of sources required to obtain 
preconstruction and operating improvements. The NPR provides 
information on these provisions. Others have taken note of 
their perspective sweep. But it is important, when addressing 
Clean Air Act programs, to conserve both the content of the 
regulations and the associated issues with regard to an 
implementation.
    Again, thank you for the opportunity to appear before you 
today and I am pleased to answer any questions.
    [The prepared statement of Mr. Meyers follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
            
    The Chairman. Thank you. Mr. Meyers, as we know now, Mr. 
Johnson, and we saw the document, Mr. Johnson had signed a 
draft document where he proposed that there be an endangerment 
finding and, as you know, that endangerment finding was enough 
to begin the process for EPA to regulate these greenhouse gas 
emissions.
    What was the level of effort expended by EPA in working on 
the endangerment finding and proposed greenhouse gas rules 
between April and December 2007 in terms of the number of 
people involved and the allocation of budget resources?
    Mr. Meyers. The Chairman. Look, I can't hear you. Can you 
just give me an answer? I know you may have provided it. I want 
the people to hear you say what was the level----
    Mr. Meyers. Sure, I apologize. In the letter to Senator 
Feinstein, we detailed within the Office of Air and Radiation, 
I think, our estimate was approximately 55 personnel devoted to 
the effort. Expenditures, direct and contract--and this is 
detailed in the letter, so I am going on memory, you know, 
about----
    The Chairman. What about dollars?
    Mr. Meyers. About----
    The Chairman. Sorry?
    Mr. Meyers. About 55 people and around $6 million. I can 
provide the letter for the record.
    [The information referred to was not received at time of 
print.]
    The Chairman. Yes, I would appreciate if you would do that. 
So, all this went into it and then why is it that the thing was 
stopped in its tracks and we had to sit in the back and read, 
as Senator Klobuchar has eloquently pointed out, sit in that 
room with people looking over our shoulder? What happened from 
there? You spent this money----
    Mr. Meyers. Right.
    The Chairman.--you have to respond to the Court. The Court 
said clearly that carbon is covered by the Clean Air Act. What 
happened? Why was this all stymied?
    Mr. Meyers. Well, the NPR is our response to the Court's 
decision in Mass v. EPA. So, the Administrator decided that, 
given the complexity of the issues raised----
    The Chairman. Well, I know about the NPR. What happened to 
this? You spent all this money, 55 people, we saw the document 
and it gets shot down. What happened? Why? What happened?
    Mr. Meyers. Well, Madam----
    The Chairman. Did the scientist change their minds on this? 
What happened?
    Mr. Meyers. Well, Madam Chairman, in actuality, some of the 
resources that were reflected in the expenditures in 2007 are 
reflected in the NPR and the technical support documents, but--
--
    The Chairman. But the endangerment finding didn't go 
forward, is that correct?
    Mr. Meyers. The document that you reviewed in chamber was 
not made public.
    The Chairman. Right.
    Mr. Meyers. That's correct.
    The Chairman. What's the rationale behind keeping it 
secret?
    Mr. Meyers. I'm afraid you're getting into issues that have 
been discussed between the committee and the administration 
regarding certain matters of privilege on these documents, so I 
don't feel I am in the position to address these specific 
matters at this hearing. But, I know you have been in 
communication with the administration concerning the access and 
the reasons----
    The Chairman. Well, we have a lot of reasons to worry. We 
have secret documents--thank God we had some whistle-blowers 
who made sure we saw it. We have to sit in a room over there--
you admit we spent $6 million and had 55 people on the case 
and, at the end of the day, we are doing nothing. Just like 
with prochlorate, we doing nothing.
    Look, I am not mad at you but I have to say, for 6 months I 
have been trying to get Stephen Johnson here and he has ducked 
this. And you can't answer certain questions.
    What about this one, we have learned that EPA's process of 
developing greenhouse gas rules included a cabinet level 
meeting in November 2007 where an agreement was reached that 
greenhouse gases did endanger the public and therefore required 
regulation. Which cabinet level officials were you aware of 
that had been involved by that time?
    Mr. Meyers. By what time?
    The Chairman. By this meeting, November 1907.
    Mr. Meyers. I was not at the meeting.
    The Chairman. You don't know about this meeting, then. 
November of----
    Mr. Meyers. I can't testify to a meeting that I did not 
attend.
    The Chairman. All right. Well, we have someone here who 
knows about the meeting and, would you please ask to Mr. 
Johnson to provide to this committee who was at that meeting in 
November of 1907?
    Mr. Meyers, EPA has proposed a New Source Review Rule. In 
July, you prepared an analysis showing that it would increase 
power plant CO2 emissions by more than 73 million 
tons per year. Did you request public comment on this huge 
increase in CO2 emissions from the NSR rule?
    Mr. Meyers. The NS----
    The Chairman. New Source Review is NSR.
    Mr. Meyers. I realize. Which proposal?
    The Chairman. I'll read it again. EPA has proposed a New 
Source Rule. In July, you prepared an analysis showing that it 
would increase power plant CO2 emissions by more 
than 73 million tons per year. Did you request public comment 
on this huge increase in CO2 emissions from this 
change, this rules change?
    Mr. Meyers. I would have to provide a response for the 
record on any rulemaking in which analysis is presented in the 
public record. Of course, public comment can be received.
    The Chairman. OK. How can you square keeping these impacts 
from the public with EPA statement in the NPR that public 
comment is very important on all issues relating to regulations 
of GHG emissions?
    Mr. Meyers. Well, I think the NPR literally asks hundreds 
of questions to get that public comment on a full range of 
issues under the Clean Air Act, so I think----
    The Chairman. You didn't on this one. You didn't on this 
one. Look, it's one thing to disobey the court, to deep-six an 
endangerment finding. That's horrible. And I hope the American 
people get it.
    It's another thing when you are involved with this new 
rule, and you know that it would increase CO2 
emissions by 73 million, and you don't even ask for public 
comment. That's unbelievable to me. Senator Inhofe?
    Senator Inhofe. Well, thank you, Madam Chairman.
    Now, I understand that one of the points the Chairman is 
making here is that, perhaps since the electric utilities 
currently have to report carbon dioxide emissions, in your view 
does that mean that it is currently regulated under the Clean 
Air Act?
    Mr. Meyers. Senator, that is a matter currently in 
litigation before the Agency and we have filed certain comments 
with respect to the EABs review of that issue on Section 821. I 
can't detail the legal arguments, but generally speaking, we 
have contested the view that, on 821, as constituting 
regulation under the Act.
    Senator Inhofe. OK. There's been a lot of talk about 
flexibility and the lack of flexibility. How do you believe 
that the CARE and the Clean Air Mercury Rule decisions have 
altered the Agency's ability to find flexibility within the 
Act?
    Mr. Meyers. Well, sir, on both issues we are currently--
both on CARE and CAMR, we are concerned, currently concerned 
with the Justice Department interactions moving forward on the 
legal front. With respect to the CAMR decision, it was a narrow 
decision with respect to delisting under 112 C-9. With respect 
to the CARE decision, however, I think a fair reading of the 
decision does imply that the court, the three judge panel that 
ruled in this case, has certain concerns with our 
interpretation of cap and trade authority with respect to 
Section 110.
    Senator Inhofe. All right, Mr. Meyers. This is something I 
kind of wanted to get around to. I would like to have you 
explain what kind of effect setting CO2 emission 
limits for both new and existing power plants through the NSPS 
process and approving California's Vehicle Greenhouse Gas 
Emission Standards, would have on global, global concentrations 
of CO2 . Would there be any guarantees that global 
concentration would decrease if this were to happen?
    Now, I would say that, during the discussion, the debate on 
the floor, the two reasons why only 38 members of the U.S. 
Senate would have voted for Lieberman----
    Warner is two arguments. One, the economy, which we can get 
to. We know how devastating that would be. But the other one, 
whatever we do in this country could have the effect of getting 
industries to go to other countries where they don't have these 
restrictions and where they don't have emission requirement 
permits. And we saw studies that showed if we unilaterally did 
something in the United States of America, it would have the 
effect of increasing, and not decreasing, CO2 on a 
global basis. What guarantees would--that there would be any 
kind of global concentration reduction with this regulation, in 
your opinion?
    Mr. Meyers. Well, I think California has detailed the 
effects following from its California program initiatives. I 
think that on the general matter of U.S. initiatives standing 
alone, we have analyzed that in connection with the Warner-
Lieberman legislation. What we showed was, without concerted 
international effort over the time period of roughly 100 years, 
global concentrations would rise to over 700 parts per million. 
Implementation of Warner----
    Lieberman, without a concerted international effort would, 
on the order of 20 parts per million, decrease from that.
    So, clearly U.S. unilateral action alone is not sufficient 
or would be overwhelmed by international emissions.
    Senator Inhofe. Yes. State again the study that this, the 
genesis of this conclusion. You said----
    Mr. Meyers. Excuse me?
    Senator Inhofe. The study that you quoted.
    Mr. Meyers. Oh, the study I quoted was our analysis that we 
provided the Congress with regard to Lieberman----
    Warner.
    Senator Inhofe. Yes. That was very, very significant. I 
have people ask me--yesterday I was in Shady Point, Oklahoma. 
Madam Chairman, I doubt if you have ever been to Shady Point, 
Oklahoma. It's a coal producing----
    The Chairman. Have you been to Shady Lane in my state?
    [Laughter.]
    Senator Inhofe. No, I haven't.
    The Chairman. You're right, I haven't been there.
    Senator Inhofe. And that question comes up. You know, I go 
back every weekend and I get the logical questions. They say, 
wait a minute. Let's just say that we do everything that we can 
possibly do here, and it is enforceable and people respond, how 
is that going to reduce anything on a global basis? And, you 
know, it doesn't.
    Now, we have another witness on the next panel I am going 
to ask some questions to. I understand the Small Business 
Administration's Office of Advocacy raised serious concerns 
about this proposal. Are there any safeguards in the Clean Air 
Act that would guarantee that the impacts on small businesses 
would be considered, just be considered, for example being 
subject to SBAR panel under the Small Business Regulation 
Enforcement Act?
    Mr. Meyers. Well, the provision you cited is actually not 
in the Clean Air Act, but the Agency would certainly obviously 
examine its affect of any regulations on small businesses as it 
is required to do under other statutes and to the extent that 
we would have a substantial impact on small businesses, certain 
actions would be required under SUBREFA, including possible 
SBAR. It depends upon the action and if the review is done with 
respect to the particular action.
    Senator Inhofe. Well, under Section 111, to what extent 
would the EPA be able to consider energy impacts? Now, I'm 
thinking about fuel switching and these things. Is that going 
to be a consideration?
    Mr. Meyers. Well, in general, section 111 has standards for 
both new and existing source provisions. It is, I think we 
detail in the NPR, a more flexible provision of the Clean Air 
Act which couldn't allow for consideration of energy impacts. 
But that, again, is in the context of how we've applied the law 
previously. Obviously, GHGs raise broad issues in terms of how 
they fit into the Act to which Senator Voinovich was referring.
    Senator Inhofe. Yes, and I think Senator Craig talked about 
that, too. Thank you, Madam Chairman.
    The Chairman. Thank you. Senator Klobuchar.
    Senator Klobuchar. Thank you very much, Chair Boxer. As 
Senator Inhofe knows, I was in Oklahoma a month ago, at Fort 
Sill----
    Senator Inhofe. MM-hmm.
    Senator Klobuchar [continuing]. to bid farewell to some of 
our National Guard troops and it was 109 degrees, so I wish I 
was at Shady Point because we needed a little shade there.
    Senator Inhofe. It was about 100 degrees at Shady Point.
    Senator Klobuchar. Very good.
    OK, Deputy Assistant Meyers, I had some questions. First of 
all, the timing of this. I talked about, in my opening, that it 
was 17 months ago that the Supreme Court and, from my 
perspective, the EPA has slow-walked this process and 
unnecessarily delayed these regulations. How much longer will 
the American public have to wait before we get these 
regulations?
    Mr. Meyers. Well, Senator, I mentioned in my opening 
statement that the comment period for the NPR closes on 
November 28th. Once that closes, it would be incumbent upon the 
administration to start to review the public comments received 
and decisions would flow from that.
    Senator Klobuchar. So, that is what date? November?
    Mr. Meyers. November 28th.
    Senator Klobuchar. November 28th. And you guys get out of 
office----
    Mr. Meyers. Well, it is noon on the 20th or the 21st.
    Senator Klobuchar. OK, so do you think you would have it 
all done by then?
    Mr. Meyers. I would be hesitant to project, since the 
public comment period is still open.
    Senator Klobuchar. Now, California, as you know, Minnesota, 
and a number of other states are waiting for the EPA to grant a 
waiver so that they can go forward with their greenhouse gas 
standards. If asked by your successor administration, since 
that is where we are ending up and I suppose you would have 
discussions with the next administration about what to do on 
this issue of the waiver, what would you advise them?
    Mr. Meyers. Well, we have addressed the waiver petition 
that we have and the Administrator decided and detailed his 
reasons for not accepting the waiver. So, that is the Agency's 
position right now with regard to the waiver.
    Senator Klobuchar. What would you suggest they do on the 
endangerment finding?
    Mr. Meyers. Endangerment----
    Senator Klobuchar. About what we are talking about here 
today.
    Mr. Meyers. I think the NPR contains a fairly robust 
section with regard to endangerment and we also contain, in the 
endangerment TSD, roughly 100-plus pages of technical 
scientific information. So, I think the next administration 
will benefit from all of this activity and all the information 
that is provided----
    Mr. Meyers. Do you think the public would benefit if we 
would make it public? That endangerment finding that we read in 
the back room?
    Mr. Meyers. Well, the endangerment--again, the particular 
document was associated with the--it was not a stand-alone 
document. It was a draft proposal that was contemplated with 
respect to regulatory effort on Vogel, so it was not, it was 
not ever intended as a stand-alone document.
    Senator Klobuchar. It looked like it stood alone to me. I 
mean, you know, it was--I don't know how many pages? 30 or 50 
pages.
    Now, your testimony asserts the potential complications 
from trying to regulate greenhouse gas emissions under the 
Clean Air Act, but as two members of the second panel have 
pointed out in their testimony, Mr. Burnett and Ms. Nichols, 
you don't have to begin the process with the most difficult 
regulatory approaches. Would you agree, as they pointed out, 
that you could start with what they call the low-hanging 
regulatory fruit, with some of the easier things that would be 
done with low cost emissions, or no cost emissions, changes 
before building the more complicated regulatory process that we 
would need?
    Mr. Meyers. Well, I think my opening statement, and I 
referenced the fact that it is very unpredictable to know 
exactly where you will end up under the Clean Air Act. 
Certainly in the NPR, we addressed, and especially the 
supplementary information in the TSD on stationary sources, 
different options for stationary source cost control. But, if 
the overall question is it a legally controllable process, can 
the EPA stage or roll-out different rule--making in the time-
frame, that is one of the main things, one of the main 
questions we were asking because of the interconnectedness of 
the Clean Air Act. One action has some other activity in the 
other section of the Act, that is something to be very 
concerned about. And I don't think we provided a definitive 
statement with the NPR----
    Senator Klobuchar. So, you don't think we could triage this 
and do some of the easier things first?
    Mr. Meyers. I think that is a question we are looking at 
and soliciting public comment on. I think, I think people can 
have opinions on that issue, but that broad of an issue with 
respect to GHGs has not been promulgated by the Agency or 
litigated in courts.
    Senator Klobuchar. Mr. Meyers, Jason Burnett's testimony in 
the past has indicated that President Bush and the 
administration initially agreed with the plan to regulate 
greenhouse gas emissions and later change, the administration 
later changed their mind or he changed his mind. Why do you 
think the President decided not to regulate greenhouse gas 
emissions?
    Mr. Meyers. I don't have a--I'm not sure exactly what you 
are referring to.
    Senator Klobuchar. Well, if you look at Mr. Burnett's 
testimony, he talks about how there was some movement to do 
this, that is why the endangerment finding came about, and then 
there was a meeting and supposedly there was a change in 
direction.
    Mr. Meyers. I have briefly read, you know, are there 
particular sentences in his testimony which, I mean----
    Senator Klobuchar. So, you don't know anything about this?
    Mr. Meyers. Mr.--I know Jason has submitted testimony, I 
mean----
    Senator Klobuchar. OK, well let's go back to what President 
Bush said because he said that climate change is a serious 
global challenge. He said this. And, given the seriousness of 
this issue, why hasn't the administration done anything?
    Mr. Meyers. Well, I think, as I detailed in my opening 
statement, the administration is moving forward with about 60 
Federal programs, has invested $45 billion in climate change 
technology science, and the Administrator committed, in March 
of this year and delivered in July, a voluminous, very detailed 
NPR which describes all of the issues of the Clean Air Act and 
greenhouse gas emissions, so I would submit that is a very 
considerable record.
    Senator Klobuchar. It is a record, but it hasn't had any 
effect.
    I know I am out of time here and I will do in writing my 
question about what you would know about President Bush--what 
Jason Burnett's testimony. If you don't know about Jason 
Burnett's testimony, as least you can tell me what you know 
about why the administration changed direction. Thank you.
    The Chairman. Well, Senator, that is a very appropriate 
question. And if Mr. Johnson were here, it would be a lot 
easier to get the answer, but he has been in hiding since 
March. He has not come to any of our meetings. And I know it is 
not the most pleasant thing for him to do, but it is his job, 
and you would have had an answer. You might not have liked it, 
but at least you would have someone who could speak to it. Mr. 
Meyers doesn't feel comfortable or doesn't remember or 
something.
    Senator Voinovich?
    Senator Voinovich. Mr. Meyers, this may be the last 
opportunity that I can publicly thank you for your great 
service to the Environmental Protection Agency. I recall 
working with you on our efforts to get Clear Skies passed in 
the late hours, and working with Senator Carper and I to try to 
work something out. And I just wanted you to know how much I 
appreciate your service and the fact that you have agreed to 
stick around and not fly the coop before this administration 
ends. And I would like you to pass on to your family how much I 
appreciate, and all of us appreciate, the sacrifice that they 
have made so that you can serve our country.
    Mr. Meyers. Thank you very much, Senator.
    Senator Voinovich. Senator Craig, in his comments, talked 
about a reasonable balance and I would like to get back to my 
problems over the years in this committee. That is, we haven't 
harmonized the environment, our energy, our economy and our 
national security. What we do here in this committee has a 
large impact on the quality of life who live in our respective 
states.
    For example, my wife and I are trying to figure out which 
gas company we are going to sign up with for heating our home. 
It is around $12 an MCF. Back in 1971, it was around $2.50 an 
MCF. We can afford it, but there are millions of people in the 
United States that these high natural gas bills are impacting 
on their standard of living. In addition to that, decisions 
that have been made in terms of the availability of natural gas 
now, in terms of oil--today, the cost of oil is dramatic and, 
again, having a large impact on the quality of life and 
standard of living of our people.
    So, I think that anyone looking in on this hearing today 
has to understand that this committee has had a large impact on 
this country during this period of time. And one of the things 
that logic dictates is that if we had intended for the Clean 
Air Act to include greenhouse gases, CO2 emissions, 
why in the world did we spend hours and hours and hours trying 
to put together a piece of legislation to deal with greenhouse 
gases? And why in the world are many of us, who weren't happy 
with that piece of legislation, working to try to come up with 
a compromise bill that would be less intrusive on our economy, 
take recognition of the State of technology in terms of 
capturing and sequestering carbon, and also understanding that 
we need to have an international dimension to this for, if we 
don't, we could do everything, shut down all greenhouse gases, 
and not really make any kind of real impact in terms of the 
global issue, global warming, that we are confronted with? And 
many of us are very concerned about it because we know the 
Chinese are putting on two coal-fired plants each week. And so 
we have to put what we are doing here in that context.
    So, one of the things that I would like to ask you is does 
the Clean Air Act provide any flexibility, consider how its 
regulations could put U.S. firms at a competitive disadvantage 
by raising their impact costs compared to foreign competitors? 
Especially outside of an international agreement with the 
world's major emitters. And I want to say this publicly that 
any greenhouse gas legislation that we pass has got to have an 
international dimension so that we can bring in the other 
emitters as our partners and put money into finding the best 
technology that is available.
    Mr. Meyers. Well, Senator, the Clean Air Act does provide, 
in some provisions, to account for emissions under Section 179 
of the Act. But, if the question was referred to whether there 
is a specific provision to allow international competitive 
disadvantage or international actions by other firms, I am not 
aware of a specific statutory provision in the Act on that 
point.
    Senator Voinovich. So, what you are saying to me is that 
you can't take into consideration the impact that this might 
have on our competitive position in the global marketplace?
    Mr. Meyers. Well, what we can and can't consider on various 
provisions of the Act varies, according to the statutory 
language. In some provisions of the Act like NACs, we can't 
consider cost at all. In other provisions of the Act, we can 
consider costs.
    I think, in trying to address your question, I would say 
that I don't know of any reference to international cost or 
international, you know, competition as a specific term within 
the Act that the EPA could rely on if it were to make that 
interpretation.
    Senator Voinovich. And Mr. Meyers, if EPA were to establish 
NACs for CO2 2, how long would it take before the 
emission reductions would actually be required?
    Mr. Meyers. Well, the NACs process, it requires several 
steps. It would first require the listing of the pollutant and 
the production of a criteria document following the 108, 109 
process. The Administrator then would need to consult with 
CSAC, determine the level, propose and go final. Once a final 
regulation is produced under the Act, that triggers the 
implementation provisions which require states to file 
implementation plans, those are triggered from the final 
regulations. So, within a few years from initiation, you might 
be to a final rule and then you would have many years after 
that for the SIPs and for the final attainment dates.
    Senator Voinovich. Two to 3 years?
    Mr. Meyers. No, in general, under SUBPAR one, there is 5 
years, with the possibility of extension for another 5 years, 
or a total of 10 years for attaining NACs. The plans are to 
designate--we have an interim step of designations from 1 year 
from the point in time in which the final rule goes and then we 
have the SIPs due in 1 year, with the possibility of extension 
of 1 year. Not to get too into the weeds, but you are correct. 
It is a multi-year process that requires many different steps 
under the NACs, both in setting the NACs and then in getting 
the State plans in and then establishing appropriate attainment 
dates.
    The Chairman. Thank you, Senator. Let me say again, on this 
quality of life issue, which is very key, I noticed that 
Senator Voinovich was focusing on the economics of it, which is 
very appropriate. That is why we need a middle class tax cut. 
That is why we need to make sure that people have alternatives 
to the old ways of energy so that we have some competition.
    We could agree or disagree at the end of the day, that's 
why I'm excited to hear from our next panel on what are the 
effects on the economy of moving forward.
    But, you know something, I have to say Senator, you've got 
to think about the quality of life on the individual, which is 
what this is about. If people can't breathe, they can't work. 
If people's kids are missing school, they may not be ready for 
the work force. So, in environmental laws, we have to weigh it 
all. And we may, at the end, disagree but I hope we would look 
at--I'm very willing to look at the economics, what it does to 
jobs, what it does to home heating fuel because, the truth is 
we do have a heat program and we have to help people get 
through this. We need to get alternatives. We also have to look 
at what it means to clean up the environment and look at the 
cost if we don't, to their health, to their lungs. We have to 
look at what happens with unfettered global warming.
    I just read, and I am going to give this to my friend, 
Senator Voinovich, a report done by the American Pediatrics 
Organization. It is all these doctors that take care of kids. I 
was stunned that they said that the impacts of global warming, 
if it is unchecked--and we know the whole world has to do it, 
we are all aware of this--the fact is, if we don't do it, the 
kids pay the heaviest price. And they list what happens, what 
diseases, what conditions, what happens from the higher 
temperatures, what happens from the new vectors.
    So, quality of life is very key and I would ask unanimous 
consent to place in the record ``The Change in the Incidence of 
Adverse Health Effects Associated with Various Pollutants'' 
since the Clean Air Act was put into place because what we are 
going to find is, lives have been saved.
    And where I agree with my colleague 100 percent, you've got 
to look at everything. Don't forget the basics of what this 
committee is about, and that is protecting the health and 
safety of the people.
    I would call on Senator Whitehouse.
    Senator Whitehouse. Thank you, Chairman. Mr. Meyers, how 
involved were you with the California Waiver Application 
evaluation within EPA?
    Mr. Meyers. I was certainly involved in the analysis on 
that decision. Many of the--it was a joint effort between OAR 
and our Office of General Counsel.
    Senator Whitehouse. So, you were very closely involved?
    Mr. Meyers. Yes, I would say I was closely involved. Yes.
    Senator Whitehouse. Is it true that the advice and 
recommendation of the advisers within EPA to the Administrator 
was for Administrator Johnson to grant the waiver or at least 
grant the first few years of the waiver?
    Mr. Meyers. I wouldn't be aware of all of the advice and 
recommendations that the Administrator would have received, so 
I couldn't State categorically that was the case----
    Senator Whitehouse. Can you tell us of anyone who gave him 
advice or any entity within EPA that gave him advice not to 
grant or partially grant the waiver? Can you name an entity or 
an individual within EPA who gave advice other than to grant 
the waiver, or at least grant the first few years of the 
waiver?
    Mr. Meyers. As an individual, no. The options that the 
Administrator reviewed----
    Senator Whitehouse. No, no. I am not asking about the 
options, I am asking about the ultimate recommendation by the 
staff. Was there anybody affiliated with the EPA who gave 
advice, other than to grant the waiver or at least grant the 
first few years of the waiver?
    Mr. Meyers. Within what time period would that question 
pertain to?
    Senator Whitehouse. Within the decisionmaking process, as 
it came to----
    Mr. Meyers. Well, the----
    Senator Whitehouse [continuing]. you tell me what time-
frame you are talking about.
    The Chairman. Can you answer the question, please, if you 
can?
    Mr. Meyers. I am trying to answer the question, but----
    The Chairman. Well, just divide it up into a time--frame 
then.
    Mr. Meyers. I mean, the----
    Senator Whitehouse. Let's start with ever, OK?
    [Laughter.]
    Senator Whitehouse. With respect to the California Waiver 
Application----
    Mr. Meyers. Right.
    Senator Whitehouse. Can you name any entity or individual 
within the EPA who ever gave Administrator Johnson the advice 
not to grant the waiver or at least the first few years of the 
waiver?
    Mr. Meyers. I cannot identify an issue, or such a person at 
this hearing within my memory.
    Senator Whitehouse. OK. So, why was the time-frame relevant 
if it never happened?
    Mr. Meyers. Because, because the waiver was received for 
some time at the Agency, actually it may have even been 
received, or requested, predating my tenure, and then we went 
through Mass v. EPA and there were various, various--I'm sorry, 
I'm confusing the issue.
    The waiver was before the Agency for some time, many months 
and more, so----
    Senator Whitehouse. And during that time, to your 
knowledge, no member of the EPA and no entity of the EPA ever 
recommended that Administrator Johnson not grant the waiver or 
at least not grant the first few years of the waiver, correct?
    Mr. Meyers. If you are asking me with respect to 
remembering if an individual said that in my presence, in front 
of the Administrator, I would say I don't have any memory of 
that.
    Senator Whitehouse. Is that the only way you got 
information? Would you also read memos?
    Mr. Meyers. Well, I----
    Senator Whitehouse. Did you have other ways of gathering 
information as the Director?
    Mr. Meyers. Well, the question goes to the Administrator's 
decisionmaking and who told----
    Senator Whitehouse. No, the question goes to what you knew, 
thought, read. I am just asking for information that you know.
    Mr. Meyers. OK.
    Senator Whitehouse. And you just tried to divide it off to 
only stuff that was said orally, in front of you, but you don't 
limit yourself in your role to information that you gather 
orally in front of the Administrator, do you? You presumably 
read documents and you get staff briefings?
    Mr. Meyers. Sure.
    Senator Whitehouse. And, in light of that, did anyone 
within EPA ever recommend to the Administrator that he not 
grant the waiver, or at least not grant the first few years of 
the waiver?
    Mr. Meyers. My response is--the question asked is that did 
anyone at the EPA--we have 17,000 people at EPA. I don't know 
at every meeting who----
    Senator Whitehouse. To your knowledge.
    Mr. Meyers. To my knowledge, no.
    Senator Whitehouse. And it became the EPA's plan to have a 
partial grant of the waiver, correct?
    Mr. Meyers. EPA doesn't, it isn't a person. I don't know 
that the EPA would have a plan. The EPA is an organization.
    Senator Whitehouse. You know, I'd be prepared to agree with 
you on that in a lot of subjects. Was there not an internal 
decision made by Administrator Johnson to take a plan, to have 
a partial grant of the waiver, to the White House?
    Mr. Meyers. That's--I'm sorry. That was your question? Was 
there a plan to, for a partial waiver----
    Senator Whitehouse. Was there not an internal decision made 
at EPA to take a plan to grant a partial waiver, a partial 
grant of the waiver, to the White House and inform them of that 
plan by EPA?
    Mr. Meyers. There--I think the Administrator has testified 
there were numerous meetings with respect to the waiver.
    Senator Whitehouse. Yes, but as to the question that I just 
asked you. Would you like it read back? I would just like you 
to answer that question, not other questions.
    Mr. Meyers. Well, the question is very broad as to whether 
there was any plan.
    Senator Whitehouse. Should we break it into smaller parts?
    Mr. Meyers. No, Senator. I am just trying to answer the 
question. I am trying to be fully responsive to your concerns 
and your questions.
    Senator Whitehouse. I am trying to understand the question.
    The Chairman. Can you repeat the question----
    Senator Whitehouse. The question is whether EPA made an 
internal decision to grant the waiver and the Administrator 
took that plan to the White House to give them advance notice 
of it? Did that happen?
    Mr. Meyers. I believe the Administrator has testified that 
he had discussions with interagency colleagues concerning his 
plans on the waiver. With reference to your question, it omits, 
and I don't mean to parse it too much, but you're saying 
whether EPA as an organization made a decision. So, that is why 
I'm having difficulty, as EPA----
    Senator Whitehouse. Let's back up a little.
    Mr. Meyers. Sorry.
    Senator Whitehouse. Did the Administrator go to talk to the 
White House about the California waiver situation?
    Mr. Meyers. I believe he has testified that he had 
discussions with his interagency----
    Senator Whitehouse. To your knowledge, did he go to the 
White House and talk about this?
    Mr. Meyers. I believe that he had discussions with regard 
to the waiver with members of the executive branch.
    Senator Whitehouse. And did the--at the White House 
specifically. I mean, he is a member of the executive branch, 
that's not very useful. I am asking you about the White House.
    Mr. Meyers. Oh. I don't know exactly where all of his 
meetings may have taken place.
    Senator Whitehouse. Did one take--did any take place at the 
White House about this?
    Mr. Meyers. I, I----
    Senator Whitehouse. You keep asking questions that I 
haven't asked. You keep answering questions that I haven't 
asked. If you could pay attention to the question, this might 
be a lot easier.
    Mr. Meyers. Yes, sir. OK.
    Senator Whitehouse. Did the Administrator go to the White 
House to give them notice that it was EPA's plan, his agency's 
plan at that point, to approve a partial grant of the waiver?
    Mr. Meyers. I believe that is a question best directed to 
the Administrator.
    Senator Whitehouse. He's not here. We have you. You said 
you were closely involved. I am asking you of your personal 
knowledge.
    Mr. Meyers. And, to my personal knowledge, I know the 
administrator had discussions at the White House----
    Senator Whitehouse. Regarding the California waiver?
    Mr. Meyers. Right. But I was not present at those 
discussions with the Administrator so it is very difficult, if 
not impossible, to testify to exactly what was said at those 
meetings----
    Senator Whitehouse. Were you present at meetings that 
prepared him for that----
    Mr. Meyers. I was present at numerous meetings in 
preparation for the consideration of the waiver, yes. I was at 
many meetings.
    Senator Whitehouse. And, during those meetings, did it ever 
become clear that the EPA's position, subject to the 
notification of the White House, was going to be a 
recommendation for a partial grant of the waiver?
    Mr. Meyers. A partial grant for a waiver was certainly an 
option we spent a lot of time discussing, the Administrator 
spent a lot of time discussing.
    Senator Whitehouse. And it was one that no one disagreed 
with, you already testified.
    Mr. Meyers. I testified that I did not know or----
    Senator Whitehouse. Correct.
    Mr. Meyers. I could not remember----
    Senator Whitehouse. You didn't know of anybody who 
disagreed with it.
    Mr. Meyers. Right.
    Senator Whitehouse. And you were closely involved with the 
process.
    Mr. Meyers. That is correct.
    Senator Whitehouse. And he discussed it with the White 
House?
    Mr. Meyers. I believe he has testified that he discussed 
the waiver----
    Senator Whitehouse. In fact, in December, he made his plan 
known to the White House, correct?
    Mr. Meyers. I do not know a precise time-frame when he may 
have had discussions.
    Senator Whitehouse. You don't remember the time--frame?
    Mr. Meyers. Well, I mean--obviously discussions occurred 
prior to December 19th, which was the date that the 
Administrator signed the letter to Governor Schwarzenegger but, 
if you--I don't--I can't. The Administrator has a lot of 
meetings and I don't know of all the meetings that he has, so 
it is very difficult for me to respond to the issue of a 
particular meeting at a particular time that I did not attend.
    The Chairman. Senator Whitehouse, what I would like you to 
do----
    Senator Whitehouse. I think my time has expired----
    The Chairman. I know, but I think it is so key. We need to 
get to the bottom of this. I would allow you to do one 
additional question and then if you could sum up what you think 
you've learned.
    [Laughter.]
    Senator Whitehouse. To your knowledge, did the White House 
offer any opinion about the plan that the Administrator went 
there to give them notice of? And, if so, what was that 
opinion?
    [Pause.]
    The Chairman. Senator, would you repeat the question?
    Senator Whitehouse. I think the----
    The Chairman. Please repeat the question.
    Senator Whitehouse. I'm actually comfortable with the 
question as I posed it.
    The Chairman. I know, but I would like you to repeat it, 
for me, if you would.
    Senator Whitehouse. May we have the clerk read it back?
    The Chairman. Yes.
    Senator Whitehouse. I don't want there to be any lack of 
clarity about the question so we can get to this answer. Could 
the clerk read back the question?
    The Chairman. Can the clerk read back the question, please?
    I'm sorry, are we waiting for the clerk, is that----
    Sir, you are conferring with someone. Could you tell us who 
that is that you are conferring with?
    Mr. Meyers. I'm sorry, I was talking to a representative 
from our Office of General Counsel.
    The Chairman. OK.
    Senator Whitehouse. May I inquire as to the name, Chairman? 
May I inquire as to the name of the person?
    The Chairman. Could we have the name of your 
representative?
    Mr. Meyers. Sure, sure. I was talking to Allison Starmann, 
who is with our Office of General Counsel.
    The Chairman. OK.
    Senator Whitehouse. Thank you.
    The Chairman. Please read back. It was the last thing that 
was actually spoken. There was a very long pause. It would just 
go to right before the long pause.
    The Clerk. ``The Chairman. Good, wonderful. Thank you so 
much. We are sorry to throw this curve at you.''
    The Chairman. It's all right. I mean, we have a pause of 2 
minutes. I need to have--I forgot what the question was, the 
pause was so long. It's my fault and I need to hear it again.
    Senator Whitehouse. I am too used to court reporters who 
read back the question, I'm sorry.
    The Chairman. Right, right.
    Senator Whitehouse. A different routine here, I apologize, 
but thank you for your help.
    The Clerk. ``To your knowledge, do you have any opinion 
about the plan that the Administrator went there to give them 
notice of and, if so, what was his opinion?''
    The Chairman. Mr. Meyers.
    Mr. Meyers. Oh, the--I believe the Administrator did 
consult with officials in the executive branch----
    Senator Whitehouse. The question was about the White House.
    Mr. Meyers. The White House, I believe he consulted with 
officials at the White house.
    Senator Whitehouse. Yes.
    Mr. Meyers. I believe that he informed them of his 
consideration of the California waiver. I believe----
    Senator Whitehouse. And specifically that he was planning 
to grant or partially grant it?
    Mr. Meyers. I was not--earlier I testified that I was not 
at the meeting so I cannot testify as to what the Administrator 
may have said at a meeting that I----
    Senator Whitehouse. That's fair enough. Did you help 
prepare him for that meeting?
    Mr. Meyers. I was part of the general effort and multiple 
meetings that prepared him on the California waiver.
    Senator Whitehouse. And when he left for the meeting, was 
it everybody's understanding that----
    Mr. Meyers. I----
    Senator Whitehouse [continuing]. that is what he was going 
up to do. Whether he did it or not is something you obviously 
cannot testify to----
    Mr. Meyers. I cannot remember to a specific day. I have 
literally--I run an office with 1200 people and probably have a 
dozen meetings every day, so I cannot testify clearly as to 
remembering a specific meeting prior to a meeting----
    Senator Whitehouse. Even though this is your Administrator 
going to the White House to discuss a matter that will effect 
about half of the country?
    Mr. Meyers. I am testifying, I think I am testifying as to, 
I believe that he did go to the White House and did talk to 
people concerning the California waiver. You're specific----
    Senator Whitehouse. Did the White House offer any opinion 
about the plan?
    Mr. Meyers. I believe they may have offered various 
comments, depending on who was at the meeting.
    Senator Whitehouse. And what were you told about what 
comments were made? What was brought back to you? What did you 
hear? What was reported to you, about that, about the opinions 
that the White House offered on that matter?
    Mr. Meyers. I am trying to recollect my memory of events 
and am having trouble because it is asking me to recall 
specific meeting, a specific time, and a specific report back, 
perhaps from the Administrator, and I am not sure that I can 
remember events with that much detail, but I am trying to fully 
cooperate with your question and your committee and trying to 
give this a serious response. So, it would be my----
    Senator Whitehouse. Well, let me ask you it this way. The 
storyline that has developed on this is that, in a nutshell, 
the EPA staff agreed in to that a partial grant was 
appropriate, that you and others briefed the Administrator for 
his meeting with the White House, that he went up to the White 
House and that everybody's intention was that he would disclose 
to the White House that you were planning to grant the partial 
waiver, that this was a matter of enormous consequence to 
California and a variety of other states, comprising nearly 
half of the population of the United States. That he went to 
the White House and, when he came back, there was a completely 
different plan.
    That sounds like something that would be memorable no 
matter how many meetings you had scheduled in your day.
    Mr. Meyers. To my--I mean, the Administrator made his 
decision on the Waiver when he signed the document on the 
Waiver denying California's request. That's when----
    Senator Whitehouse. You mean, the moment before he signed 
it he hadn't made up his mind? He waited until he had the paper 
in his hand and then suddenly something came over him?
    Mr. Meyers. No, no, I'm just saying the decision document--
the decision document----
    Senator Whitehouse. We know that; that's true as a matter 
of law. We're trying to get into the process that happened 
behind it.
    Mr. Meyers. The process behind it was that we had numerous 
meetings with the Administrator, we presented many options 
during the course of this time. He consulted with us. He 
consulted with his inter-agency colleagues, and--and then he 
ultimately reached a decision.
    Senator Whitehouse. But your testimony--your testimony is 
that you can't remember what opinion or position the White 
House offered--what you heard about the opinion the White House 
offered after this meeting between the Administrator and the 
White House on the California Waiver. That is what you've 
testified to today and that's what I want to make sure I'm 
clear on.
    Mr. Meyers. Sir, sir,----
    Senator Whitehouse. You don't remember----
    Mr. Meyers [continuing]. I'm testifying in the context in 
which I'm testifying, which is--is trying to recall a----
    the inference here is that there was a specific meeting, 
that he came back and he told me something specifically, as 
I'm--as I'm interpreting your question. There were numerous 
meetings. There were numerous consultations, so the difficulty 
I'm having in responding to your question, sir, is--is trying 
to remember----
    Senator Whitehouse. I hear the gavel.
    Mr. Meyers [continuing]. to remember a specific event 
which--for which the date is not being provided me.
    Senator Whitehouse. I hear the gavel, and I understand that 
I have gone considerably over my time. I appreciate very much--
--
    The Chairman. It's very important what----
    Senator Whitehouse. I appreciate the Chairman's indulgence. 
I think that--the Q and A that I had planned could easily have 
fallen within the 5-minutes that I was allotted, and obviously 
it did not.
    The Chairman. No, that--that's why I gave you the time. 
Listen----
    Senator Whitehouse. I appreciate the----
    The Chairman. Listen----
    Senator Whitehouse [continuing]. Chairman's courtesy.
    The Chairman. Senator Whitehouse, I just want you to know 
that what I think you've done with this series of questions is 
you've shown that what Mr. Johnson told us was not the truth, 
and we had asked the Justice Department to look at his 
statements regarding the Waiver.
    Now, Mr. Johnson, I don't know if you remember, said, Oh, 
he didn't remember any meetings. They were routine meetings. 
And, he said he had lots of views offered to him. We heard from 
this witness he remembers going to the White House--that they 
went to the White House, and that, in fact, he couldn't 
remember anyone, at least, not in his time there, who said 
anything other than grant the Waiver, a partial Waiver.
    So, we're going to send this to the A.G. to take a look at 
this. But I think that this--the reason I was glad to allow you 
to continue is because this decision on the Waiver was 
monumental. So many states in the teens, maybe even over 20 
now, are hanging on this, because if George Bush doesn't want 
to regulate global warming, other states do. So, that's very, 
very key.
    And--and by the way, we had Mary Peters come here and say 
she--to the Commerce Committee, on which I serve--admitted that 
she was lobbying against the Waiver. So, this was a monumental 
moment where the Administration against the rules were even 
having Mary Peters call Members of Congress. We had the whole 
auto industry.
    So, to say we had routine meetings about the Waiver? I 
think today we took a giant step forward in showing that wasn't 
the case. And that's why I thank you, and I would ask now that 
the next panel come up. Thank you, Mr. Meyers, for your help in 
this regard in getting to the truth.
    And I have asked that we do this quickly, because time is 
not our friend, and we have a lot of witnesses here, and we 
look forward to hearing from all of them. We have one, two, 
three, four, five witnesses. Each one has five. OK, we need to 
move quickly.
    I appreciate the patience of the panel. We're going to 
start with Hon. Mary Nichols, who's Chairman of the California 
Air Resources Board. Chairman Nichols, we so appreciate your 
coming. Then we'll move down Jason, David, Bill, and Marlo. OK.
    Would you put on your----

   STATEMENT OF HON. MARY NICHOLS, CHAIRMAN, CALIFORNIA AIR 
                        RESOURCES BOARD

    Ms. Nichols. There we are. Good morning, Madame Chairman.
    The Chairman. We're asking you each to stay to 5 minutes 
because we have questions. Go ahead.
    Ms. Nichols. Yes. I have submitted my written testimony for 
the record, and I will not repeat it here. I have to admit, I 
am suffering from whatever that syndrome is where you have 
flashbacks, having listened to the previous testimony.
    As you know, Senator, I--I served as an appointee in the 
Clinton administration as the head of the office of Air and 
Radiation at EPA, and had many opportunities to testify before 
this panel and others. I never experienced anything quite like 
that, and I hope I never would have to be in such a position in 
my life.
    The Chairman. Well, welcome back.
    Ms. Nichols. But I think, frankly, the reason why that 
interchange took place is because of the fact that there has 
never been in my knowledge anything like the process or the 
result that occurred with that advance notice of proposed 
rulemaking.
    I was involved in--in--developing the new standards for 
ozone and fine particles that ultimately were upheld by the 
U.S. Supreme Court and the American Trucking Association vs. 
Brown, our case. Very, very highly contested set of standards, 
they were opposed by many organizations including the U.S. 
Chamber, the auto industry, and others.
    Many other agencies in the government had concerns and 
questions about whether EPA should be adopting those standards. 
There were vigorous and contested meetings held under the 
auspices of the Office of Management and Budget, but when a 
decision was finally made and was announced by the EPA, and 
there were hearings held, the Administration completely and 
totally backed EPA in its decisionmaking process.
    And I believe that there is a--there simply has not ever 
been a situation where all of the other agencies turned on the 
Environmental Protection Agency in the way that they did 
publicly during this process. It's not a good--it's not a good 
sign, frankly, for the ability of the Administration to pull 
together, and I'm hoping that a result of this hearing will be 
some direction coming from this Committee to the next 
Administration as to how to approach interpretation of their 
legal authority.
    The term, Aslow walking was used, I believe, by Senator 
Klobuchar about how EPA approached their decisionmaking under 
the Clean Air Act here. I think of it as being a situation 
where we're facing a crisis. We've all acknowledged that global 
warming is a crisis of global proportions, and the question is, 
what are we going to do about it?
    Clearly, Congress should act. Governor Schwarzenegger has 
supported your efforts, Senator Boxer, enthusiastically, to try 
to pull together an economy-wide program for the United States, 
something that we could take to the international community 
and--and use as part of the basis of a--of a truly global 
solution to this problem.
    But in the meantime, we don't think it's excusable to fail 
to act. That's why California passed the 2006 Global Warming 
Solutions Act, which we're now in the process of implementing, 
and why we believe EPA should use the authority that it has 
under the Clean Air Act.
    In my testimony, I outlined what I believe some of those 
abilities that it has to act are, and why we think EPA should 
be moving forward even without additional authorization, and I 
also would be happy to answer questions about why even though 
our State and many others frequently don't see eye to eye about 
various matters of implementation with EPA, we still support 
the notion that EPA should exercise the legal authority that it 
has to help move the ball forward. Thank you.
    [The prepared statement of Ms. Nichols follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    The Chairman. Thank you, as usual, for getting right to the 
point. We appreciate it, Chairman Nichols. Jason Burnett, 
former Associate Deputy Administrator, U.S. EPA. Welcome, 
Jason.

      STATEMENT OF JASON BURNETT, FORMER ASSOCIATE DEPUTY 
      ADMINISTRATOR, U.S. ENVIRONMENTAL PROTECTION AGENCY

    Mr. Burnett. Thank you. Madame Chairman, Senator Inhofe, 
Senator Whitehouse, thank you for the opportunity to testify 
about climate policy. The April 2d, 2007, Massachusetts versus 
EPA Supreme Court decision found that the Clean Air Act applies 
to greenhouse gases, and, therefore, shifted the debate from 
whether we address climate change to how we address climate 
change.
    Either the EPA will, using the Clean Air Act, or Congress 
will by developing a new, better law. To help understand 
options for climate regulation, I will identify three 
principles that I hope most can agree should be part of any 
sensible climate policy.
    First, act now. Common sense suggests that we act now to 
begin a smooth transition to a low carbon economy, rather than 
waiting longer and requiring a faster, more disruptive 
transition. If the U.S. does not act now, we risk becoming the 
importer, not the exporter, of the next generation of energy 
technologies.
    Second, be careful. Climate policy should expect and 
promote technological change but needs to be careful, because 
we do not know when or how new technology breakthroughs will 
occur. Climate policy should also recognize that any action we 
take alone will not be enough to avoid the risk of catastrophic 
climate change. We need to carefully design a system that will 
work so well, that other countries will want to mimic our 
success.
    And third, consider economics. Much discussion has focused 
on the cost of action, but inaction has its own costs. Inaction 
will lead to more resources spent adapting, and increased 
likelihood that large parts of our society will face serious 
harm if unable to adapt, and unavoidable damage to our natural 
systems and infrastructure.
    Inaction will also lead to increased security risks for 
regions of the globe that do--that do not have the 
infrastructure or institutions to adapt quickly enough. My 
testimony today builds off of work done by a large team of 
scientists, lawyers, engineers, and economists at the EPA and 
across the Federal Government.
    As Associate Deputy Administrator of EPA--former Associate 
Deputy Administrator of EPA, I had helped develop a plan for 
responding to the Supreme Court's decision. This plan basically 
consisted of one regulation that would have increased the fuel 
economy of our cars and trucks.
    Another regulation that would have shifted our fuel supply 
away from a reliance on oil and toward more alternative and 
renewable fuels, and several regulations covering large 
stationary sources, such as power plants, oil refineries, and 
industrial boilers. These regulations would have been issued 
after a consideration of costs, benefits, energy implications, 
and technology, and would have included various market 
mechanisms, such as trading, to promote efficiency improvements 
in increased use of biomass, for example, farm waste, as an 
energy source.
    By acting on this plan, we would ease the transition to a 
low-carbon economy. The plan also addressed the unique 
challenges of the Clean Air Act, such as making greenhouse 
gases fit better within the new Source Review program. These 
challenges stem from differences between greenhouse gases and 
most other types of air pollution.
    The next Administration, after careful consideration of 
these challenges, can issue Clean Air Act regulations that will 
be a solid step forward. However, these regulations alone will 
not get us where we need to go. The structure of the Clean Air 
Act is such that greenhouse gas regulations will not be as cost 
effective as they could be under an entirely new law.
    This will not be a major problem for the first few years 
because EPA can pursue inexpensive opportunities. Over time, 
however, EPA regulations will require greater investment and 
the unnecessary challenges of the Clean Air Act will become 
more apparent. This is why Congress must act.
    Ideally, Congress will pass new economy-wide cap and trade 
legislation that uses auctions to reduce taxes and avoid giving 
windfall profits to industry. Regulations should be upstream at 
the point where carbon fuels enter the economy, not where 
greenhouse gases enter the atmosphere.
    This law could seek aggressive reductions in emissions by 
depending more on new technologies, and could make sure this is 
a good, safe investment for our Nation by including a safety 
valve in case new technologies do not develop as quickly as 
predicted. In this way, new legislation can achieve more at 
lower risk, a result that's good for the environment and good 
for the economy. The next president should immediately work 
with Congress to pass such legislation. At the same time, EPA 
should re-engage----
    The Chairman. We want to make sure we have enough time for 
questions.
    Mr. Burnett. Thank you.--re-engage on regulations under the 
Clean Air Act, with careful thought that Clean Air Act can 
become our Nation's first climate change law, as Congress 
debates the transition to a new, better law. Thank you, and I 
would be happy to answer any questions.
    [The prepared statement of Mr. Burnett follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    The Chairman. Thank you, Mr. Burnett. Our next speaker is 
David Bookbinder, Chief Climate Counsel over at the Sierra 
Club. Welcome, sir.

  STATEMENT OF DAVID BOOKBINDER CHIEF CLIMATE COUNSEL, SIERRA 
                              CLUB

    Mr. Bookbinder. Thank you, Madame Chairman, Senator Inhofe, 
Senator Whitehouse. I guess in the--in the eyes of some people 
I may be one of the bad guys here. I'm the counsel--I was 
counsel in the Massachusetts versus EPA case.
    I'm counsel in the cases chivying EPA to try to get them to 
regulate greenhouse emissions--greenhouse gas emissions from 
power plants, refineries, other sources. I've been counsel in 
the auto industry challenges to California's motor vehicle 
greenhouse gas regulations and in the case against EPA to 
overturn the Waiver, and I'm also counsel in the Bonanza Power 
Plant case, which Mr. Meyers referred to earlier as the one 
pending before EPA's environmental appeals board. So, I'm in 
the thick of it.
    I'm trying to get regulation done, and the first thing I 
want to say is legislation, tailor-made legislation, is far 
preferable to these regulatory steps. We don't have that 
legislation. Hopefully, we will get it. Until then, we're going 
to have to go the regulatory path. There are two reasons for 
that.
    One, we need to do something, and two, December, 2009, the 
world is going to gather in Copenhagen to try and address 
climate change, and unless the president of the United States 
shows up with something in his hand to say the United States 
has begun to take action, we are going to lose our next best 
opportunity to address global climate change.
    If Congress comes up with comprehensive legislation by the 
end of 2009, terrific. If not, there is a single set of steps 
that I outline in my testimony that EPA can take as a 
regulatory matter. Now, I think it's--I think the most 
important thing I can say today is the two bugaboos that we 
keep hearing about regulation need to be dispelled immediately.
    The first is the PSD program. This is an incredible red 
herring. The environmental community does not want to apply PSD 
to millions of sources. The agency doesn't want it. Industry 
doesn't want it. Nobody wants it, and EPA has already come up 
with some excellent ideas of how we do--how we can avoid it, 
even in the absence of a legislative fix to Section 165 of the 
Clean Air Act.
    There are ways to avoid it. We are advocating applying PSD 
only to the five to ten thousand ton sources. We do not want 
industry, meanwhile, you know, hiding behind the local church 
and Dunkin Donuts and claiming we're out to regulate them. We 
are not. We do not want that.
    The second thing that--along those lines is the NAAQS--The 
National Ambient Air Quality Standards. We do not want a NAAQS 
for CO2 , and there are perfectly legitimate means 
under the Clean Air Act to avoid promulgating a NAAQS for 
CO2 . So, let's just drop those. We don't want them, 
industry doesn't want them, Congress doesn't want them, EPA 
doesn't want them, the American people don't want them. We can 
stop right there.
    Let me just say one last thing about the regulatory 
approach. Many years ago, Senator Klobuchar and I graduated 
together from the University of Chicago law school, and she 
went off to her career, and I went off to Wall Street, and I 
spent many years working for the investment banks that are busy 
right now trying to resolve their problems.
    I represented corporations across the spectrum. I 
represented JF Corporation in its litigation against the United 
States over its asbestos liabilities. I represented Brown and 
Williamson Tobacco in its cancer cases. I have represented and 
dealt with corporate America. I understand how they feel about 
regulation and regulatory schemes.
    And the regulatory schemes that we can enact under the 
Clean Air Act are perfectly feasible and useful ways to begin 
addressing global climate change. And I will leave the 
specifics to--to my written testimony and save everyone a 
little more time.
    [The prepared statement of Mr. Bookbinder follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    The Chairman. Thank you so much. As I listen to you go 
through the cases, you won every one of those, did you not? 
Except not this last one because that isn't done yet.
    Mr. Bookbinder. We--we have a pretty good track record, so 
far.
    The Chairman. Well, congrats to you. Now, it's my pleasure 
to welcome Bill Kovacs, Vice President, Environment, 
Technology, and Regulatory Affairs, U.S. Chamber of Commerce. 
Welcome, Mr. Kovacs.

    STATEMENT OF BILL KOVACS. VICE PRESIDENT, ENVIRONMENT, 
  TECHNOLOGY AND REGULATORY AFFAIRS, U.S. CHAMBER OF COMMERCE

    Mr. Kovacs. Thank you, Madame Chairman and Ranking Member 
Inhofe and Senator Whitehouse and the rest of the Committee. It 
is a pleasure to be here and--and let me sort of cut to the 
issue. I was glad to hear David say that even the environmental 
community doesn't want regulation under PSD or NAAQS. That's 
really very reassuring.
    And I think that, you know, frankly, the--the Supreme Court 
does in--in the way it puts the opinion out, it--it gives us 
options, and I think that that's necessary. One is to find 
endangerment, and one is not to find endangerment, and--and, 
frankly, the other is a reasonable explanation of why they 
can't or will not exercise discretion.
    That doesn't mean that they can't do a lot of other things 
such as limit the impact of--of--of how the Clean Air Act would 
work, and I think that that's important. And--and that gets us 
to the ANPR. There's been enormous criticism of--of the ANPR, 
and, frankly, the--the U.S. Chamber has criticized a lot of its 
provisions.
    But the one thing we do think that is important is that the 
ANPR is one hundred and 20 days of public comment, and we think 
that that's crucial, because if--if you've looked at the 
record, it's five, six hundred pages of what EPA would do. It's 
several thousand pages of science. We're having a very 
difficult time even getting a handle on it.
    And--and, so, when--as we try to look at this, there are 
two problems that we have with using the--the Clean Air Act. 
And let me say before we finish, we would also suggest that if 
this is going to be handled, that it should be handled by 
Congress, not the agency.
    But in terms of the Clean Air Act, there--there are two 
problems. One is the character of--of the emissions themselves 
really can't be handled under the Clean Air Act. If you look at 
the fact there are about three hundred and 12 million tons of 
regulated pollutants under the Clean Air Act, CO2 by 
itself is about seven billion tons. So, you--you literally--
CO2 2 swallows the Clean Air Act.
    But the second is the structure, and that's probably where 
David and I have--have a little bit of--of disagreement, you 
know. And--and--But--but maybe we can work it out. And--but the 
thing is, is that they would like to sort of walk around and 
take parts of the Act and say, we only have to implement this 
half way, or we can take the low-hanging fruit as we get 
started.
    It's been very unfortunate, I think, the CARE decision is 
probably the best way to look at it. The courts sometimes don't 
necessarily agree with us on those decisions. They have put 
inflexibility in there, and--and the problem that we have is 
the endangerment standard as it--as it is in Title II seems to 
run through the entire Act, so once you have a finding of 
endangerment, we may or may not have any choice on PSD and 
NAAQS.
    And--and what we're trying to do is--is to honestly 
participate in EPA's discussion. And the reason we had the 
study done is because we asked--we--we saw what EPA had said, 
and--and they looked at it and said, oh, yes, it's only going 
to be a few hundred, a few thousand, but it's something that's 
manageable.
    And the question we wanted to ask is, well, let's assume 
that it's two hundred and fifty tons a--tons a year. Who would 
that pick up? And then we used DIA data, and we used Census 
Bureau data. And that's how we got to the 1.2. The hundred and 
ninety thousand facilities that are the industrial sector are 
probably understandable, and--and a lot of them have used PSD, 
and--and they live under some of the NSPS and a lot of those.
    But it's when you start picking up those office buildings 
and farms that would have some--that would use fossil fuels as 
a base. They get swept in, and so it would be great to say we 
can exempt all of them out, but I would suggest, since we don't 
know what the courts are going to do, and the fact that they 
would be technically emitters under the Act, I don't think 
we're going to be able to separate them out.
    And if--and--and you have it with in your control, Madame 
Chair, to--to really make that kind of a distinction, because 
if you want to go in and limit the applicability to the Clean 
Air, I--you know, certainly you have--have the authority to do 
it.
    So, when we look at this, I think that--that the risk that 
we're trying to point out is--and--and this is the biggest 
risk, if we're wrong on the PSD issue--and I always say that, 
if we're wrong--it automatically triggers PSD. And once it 
automatically triggers PSD, we're literally into a case by case 
basis for 1.2 million facilities. Not all of which will be 
regulated, but it does throw them in.
    So, you know, my final conclusion is, we think that the 
ANPR is good. It's--it's generating a discussion on the Clean 
Air Act that, frankly, we need. I think it will help the 
Administrator make a better response to the Supreme Court, but, 
in the end, I think it's going to have to be Congress that 
really makes the decision, because CO2 is--is a 
unique pollutant because of its size and its transport, and we 
think you are the better institution to handle it than the EPA.
    [The prepared statement of Mr. Kovacs follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    The Chairman. Thank you. And now, last but not least, Marlo 
Lewis, Senior Fellow, Competitive Enterprise Institute. 
Welcome, sir.

STATEMENT OF MARLO LEWIS, SENIOR FELLOW, COMPETITIVE ENTERPRISE 
                           INSTITUTE

    Mr. Lewis. Chairman Boxer, Ranking Member Inhof, Senator 
Whitehouse. Thank you for----
    The Chairman. Is your mike on?
    Mr. Lewis. Sorry. Thank you for the opportunity to testify. 
When Massachusetts versus EPA was being litigated, Plaintiffs 
denied that the case posed any risks to the economy. They 
derided all talk of slippery slopes and GDP losses as alarmist. 
Yes, they said an endangerment finding under Section 202 would 
require EPA to set new motor vehicle emissions standards, and, 
yes, such standards could have the effect of tightening fuel 
economy regulation, but, they said, EPA would be constrained by 
Section 202's requirement to consider compliance costs. At 
worst, we'd all save money at the gas pump.
    Well, such assurances now ring hollow, thanks to several 
congressional testimonies by attorney Peter Glazer, the advance 
notice of proposed rulemaking, and the recent U.S. Chamber 
study, it is now clear that the remedy sought by plaintiffs in 
Massachusetts could trigger economy chilling regulation under 
the Prevention of Significant Deterioration program and the 
National Ambient Air Quality Standards program.
    EPA could be compelled to make massive changes in U.S. 
environment--environmental policy, energy systems, and economy, 
changes far more costly than any proposed in the Lieberman-
Warner legislation which this Chamber did not see fit to pass.
    Even in regard to fuel economy, an endangerment finding 
could constrain EPA to regulate far beyond the point where 
Congress indicated it should stop. According to the ANPR, the 
fuel economy and renewable fuel standards Congress enacted in 
2007 in the Energy Independence and Security Act will provide 
only 25 percent of the transport's sector's proportional 
contribution to meeting President Bush's climate goal of no 
emissions growth after 2025.
    Climate activists spurn Mr. Bush's goal as too weak. From 
the perspective of those who sued EPA in the Massachusetts 
case, EISA is an apple cart that needs to be upset. Both the 
ANPR and plaintiffs offer options to avoid or limit potential 
PSD and NAAQS burdens, arising from the Massachusetts case.
    These options involve questionable legal theories. For 
example, my friend, Mr. Bookbinder, and his colleague, David 
Doniger, would resuscitate a legal theory that Mr. Doniger's 
organization, the Natural Resources Defense Counsel, 
successfully sued to overturn in 1976 in the case of NRDC v. 
Train.
    This is the theory propounded by then EPA Administrator, 
Russell Train, that EPA can avoid initiating a NAAQS rulemaking 
just by not planning to do the paper work. The ANPR suggests 
EPA could invoke the doctrine of administrative necessity to 
justify limiting the number of stationary sources subject to 
PSD regulation.
    Ironically, the ANPR cites a 1979 case, Alabama Power 
Company versus Cossil, in which the D.C. Circuit Court of 
Appeals shot down an EPA attempt to limit the number of PSD 
regulated entities, based on the administrative necessity 
doctrine. Recent cases overturning EPA's Clean Air Mercury Rule 
and Clean Air InterState Rule suggest that EPA's ability to 
improvise around the law is quite limited.
    Besides, these artful dodges are a reflection on the Clean 
Air Act as an instrument of climate policy. The purpose of the 
proposed simplifications is not to improve environmental 
protection, but to get around the law. At best, irrational 
burdens would be minimized, not avoided, small entities would 
still have to file new paperwork.
    Congress did not intend for Section 202, which deals solely 
with motor vehicle emissions, to create an overwhelming road 
block to new investment in thousands of previously unregulated 
buildings and facilities, nor did Congress intend for Section 
202, which requires EPA to consider costs when setting tailpipe 
standards, to trigger the most expensive NAAQS rulemaking in 
history, yet those policy disasters become real risks if EPA 
tries to pound the square peg of climate policy into the round 
hole of the Clean Air Act.
    The Clean Air Act is a flawed, unsuitable, potentially 
destructive instrument for regulating greenhouse gases. If the 
issues raised in the ANPR had been squarely before the justices 
back in April, 2007, they might well have decided Massachusetts 
differently, and we would not even be having this hearing 
today. Thank you, again. I would be happy to address any 
questions.
    [The prepared statement of Mr. Lewis follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    The Chairman. Well, if--if--but, you know, if--Mr. Lewis 
and Mr. Kovacs, I hear you well. You're talking to somebody 
here and my side of the aisle, I know, would much prefer to 
have legislation than rely on the Clean Air Act, although we do 
believe there are parts of the Clean Air Act that could be 
utilized, that, as Mr. Bookbinder said, would not be the tale 
of horrors that you have alluded to. So, let me just say this, 
just to get us squared away. Mr. Kovacs and Mr. Lewis, do you 
support legislation that would reduce greenhouse gas emissions?
    Mr. Lewis. I do not.
    The Chairman. And how about you, Mr. Kovacs?
    Mr. Kovacs. It's our position that we weren't----
    Mr. Lewis. If you mean by that, regulatory requirements, 
yes.
    The Chairman. I--I--absolutely, yes.
    Mr. Lewis. Then, I'd----
    The Chairman. We'd have that part to it, too. You'd have to 
regulate it right at the source. Yes.
    Mr. Kovacs. Legislation is a broad term, but we have said 
that we would--we are working to try to----
    The Chairman. Good.
    Mr. Kovacs [continuing]. reduce CO2 in the 
atmosphere. Our approach--in fairness, our approach may be 
different than yours, but we have certainly put a lot of time, 
effort, and thought into how it would be done.
    The Chairman. Well, how is your approach different from the 
U.S. Climate Action Partnership? Here's what they say. U.S. 
Climate Action Partnership is a group of businesses and leading 
environmental organizations that have come together to call on 
the Federal Government to quickly enact strong national 
legislation to require significant reductions of greenhouse gas 
emissions. U.S. CAP has issued a landmark set of principles and 
recommendations to underscore the urgent need for a policy 
framework on climate change.
    Mr. Kovacs, how does the Chamber of Commerce stand on U.S. 
CAP?
    Mr. Kovacs. I think the problem that we have with--with 
U.S. CAP is, is that as they get into the specifics like cap 
and trade, we have a disagreement with them. We think there are 
ways that--that it's got to be international in scope, it can't 
harm the economy, and it's got to be based on technology.
    And the Congress has been really excellent in--in trying to 
work the technology route. I mean, if you look at the last two 
energy bills, for example, there are about 120 technologies 
that we should be looking at. There are----
    The Chairman. OK, wait, I don't want to get off course. I--
yes, I support some of that, too, but I'm trying to just nail 
this down, and I think Mr. Lewis' was--was an honest answer. AI 
don't like it, I don't want more regulation.@ That's an odd 
side beyond today's world, but I appreciate it. I appreciate 
your honesty. Mr. Kovacs says, AWell, we don't object to 
legislation, but we don't really agree with U.S. CAP all the 
way because we----
    Mr. Kovacs. We have not traditionally supported the 
regulatory approach----
    The Chairman. OK.
    Mr. Kovacs [continuing]. because we do not think it would 
work.
    The Chairman. All right. Good. OK. So, we're getting down 
to here to where we are. Because it's interesting to me to see 
some of the businesses that do support U.S. CAP, and I'm going 
to put this in the record without objection. Alcoa, Boston 
Scientific, BP, Caterpillar, Chrysler, Conoco, Deere, Dow, 
Duke, Dupont, Excellon, FPO Group, GE, Pepsi.
    So, I want it to be clear. Let the record be clear that a 
lot of businesses--and this doesn't even go into a lot of 
Silicon Valley folks who strongly support legislation--because 
I don't want people to think because the Chamber says in 
general we don't like new regulations--there's a lot of groups 
in the business community who actually driving these changes.
    And I want to get to the issue at hand, which is the use of 
the Clean Air Act. Because, frankly, if we don't get 
legislation, that's what's going to happen. It's going to be 
the way we go, because the Presidential candidates both agree 
we have to act.
    So, I want to get to what Mr. Bookbinder said here, and 
then I have a question for Mary Nichols, and that'll be the end 
of my questions. When you said, let's not scare the local 
church, the local donut shop, could you expand on what you mean 
by that? Is the implication there that there's a scare tactic 
going on? That if EPA acts in any way, it's going to somehow 
destroy our economy? Could you act--answer that question?
    Mr. Bookbinder. Yes, Senator Boxer, that is exactly what it 
is. It is a pure scare tactic that industry is saying if there 
is any regulation anywhere under the Clean Air Act, that 
automatically means that the PSD program will become applicable 
to millions and millions of entities, and the answer is, as I 
have said, nobody wants those entities regulated.
    And I find it extremely hard to believe that given some of 
the very good ideas that have come out of EPA already, 
including the idea of general permitting, that we can--that we 
can avoid that consequence and still focus on the major 
emitters, the ten thousand tons per year sources. We do not 
need to go after the churches and Dunkin Donuts.
    The Chairman. Mr. Lewis, I--I--whoa, whoa, whoa, 1 second. 
Let me finish. I will then add time to my--I'm going to add 
time >cause I have a question for Mary Nichols, but I 
absolutely will hear from you.
    Mr. Lewis. And--and, just let me just say, it's kind of 
ironic hearing industry talking about, yes, there's no 
flexibility under the Clean Air Act, and--and we have to be 
very careful about the courts. Having spent a lot of time in 
courts on these things, I--I would be astonished if we wound up 
in the D. C. Circuit and there is an EPA regulation or 
clarification saying we're not going--we're going to have a 
general permit covering all these small sources. They won't 
have to do anything.
    And that was supported unanimously by American business and 
the environmental community and Congress and everybody else. 
The D. C. Circuit would overturn that. I--I do not believe that 
would happen. I--I--yes. If when the courts see everybody 
coming into agreement on that, they take note of that. They're 
very practical about these things.
    The Chairman. All right. I--I--I'm going to give you a 
minute.
    Mr. Lewis. OK. Thank you. I think it really doesn't matter 
what--what we want. I think it matters what the law says. And 
the logical implications of what the law says.
    And the Chamber's study is a very meticulous study. It is 
not an alarmist study. It's a study by the numbers, and it 
shows that if you can spend seventy thousand dollars a year on 
fuel to heat your--your facility, or, as the EPA found, if you 
have a building that's about sixty eight thousand square feet, 
then you emit two hundred fifty tons of carbon dioxide year. 
That's not your potential to emit, that's your actual 
emissions, and under PSD, you're regulated if your potential to 
emit.
    OK, so, this is not made up stuff, and, you know, EPA does 
come up with all these interesting simplifications and 
administrative adjustments. One is this general permit, but 
there is not provision for a general permit in the PSD 
provisions. There is in the Clean Water Act. There isn't in 
this. That is an indication of congressional intent, and all 
I'm saying is, there is a risk that these small entities would 
be swept up into this net, and I think it's silly to deny that 
risk is real.
    The Chairman. Would you like to respond very quickly in 20 
seconds?
    Mr. Bookbinder. Yes. The briefest response I can get is, 
who's going to challenge that rule? Who's going to go out there 
and say, we want to now regulate all these entities?
    The Chairman. Uh-huh.
    Mr. Bookbinder. Not--not business, not us, not anyone else.
    The Chairman. That's a good point. Let me just make the 
case here, again, your statement of horrors of, you know, the 
Clean Air Act, of how horrible it is. If you ask most 
Americans, they'd say, thank goodness, because we couldn't 
breathe, couldn't go to work, but that's another point.
    Let's be clear. I, and the majority on this committee, not 
everyone, we want to have legislation that deals with this. The 
point of this hearing is to say, that the EPA has authorities 
as well, and, you know, clearly, some worry very deeply about 
this and others say it can be done.
    Now, I'm going to ask Mary Nichols to respond to two 
things, and then I'm going to turn the gavel over to Senator 
Whitehouse after I finish, and Senator Inhofe will have the 
floor. Chairman Nichols, I'd like you to respond to, because 
you are so intimately familiar with the EPA, an example of what 
could be done similar to what has been done by CARB, that would 
make some sense, that wouldn't harm, you know, anyone, 
actually, but, perhaps, actually step up to the plate. You 
talked about it as low-hanging fruit that could be done pretty 
quickly.
    So, I want--I want to ask you some examples of that low-
hanging fruit that you were able to do in California, and the 
last thing I want you to answer is, if you could talk about the 
economic opportunities that are presented by moving forward 
with going after global warming pollution, because I have said 
it and said it and said it, that in our State, given the 
horrible situation we have with the mortgage meltdown, even 
though we are hurting badly, a lot of jobs are being created 
because of the laws that you are involved with. Could you talk 
to those things?
    MS. NICOLS. Thank you, Senator. On the first point, the 
first thing that EPA could do would be to rescind and reverse 
the decision on the California Waiver, and then proceed toward 
adopting a similar regulation for the auto industry.
    The reality is if the Pavly standards that EPA refused to 
allow us to enforce were in effect now, consumers would be 
saving money and the auto industry would be in better shape 
than they are right now.
    I had the opportunity to visit Detroit a couple of weeks 
ago. I know the companies are hurting. They want money to help 
them retool. They all talk about the technologies that they 
intend to bring on line that will meet the needs of consumers 
who now have gotten the message that because of high gas 
prices, we don't believe that gas prices are going to plummet 
again to anything like they were in the past, not as a result 
of regulation, but as a result of real-world scarcity and 
economic conditions, and the public needs a chance to buy cars 
that emit less carbon and also cost less to drive. When we did 
the Pavly rules, we were thinking that there would be a payback 
period of maybe 4 years----
    The Chairman. Explain what you mean by Pavly. Most people 
here----
    Ms. Nichols. I'm sorry. Under California law, because 
California was given the authority under the Clean Air Act back 
in 1970 to adopt air quality standards--emissions standards, 
rather, that are more stringent than Federal standards for new 
motor vehicles, California passed a law authored by then 
Assembly member, Fran Pavly, so we always call it the Pavly 
law, which ordered my agency to adopt long term standards to 
reduce emissions of greenhouse gases from motor vehicles. The 
State did that, submitted the regulations to EPA, and in 
December of last year the Waiver was denied.
    That was the discussion that was being had earlier with Mr. 
Meyers. But the background to that is we know now that, for the 
first several years of those regulations, the auto companies 
could comply with those rules without any changes in 
technology, without breakthroughs, and that for the future, 
they need to be investing in the creation of cars that are low 
carbon emitting vehicles, and using technologies that they make 
available in other parts of the world to help our consumers 
deal with the high cost of gasoline. So, that's the first thing 
that they should do.
    There are other things that they could do using existing 
authorities in terms of setting new standards for electricity 
generation and for greenhouse gases from the fuel supply as 
well. But, to get to your major point about the benefits and 
costs of all of this, we have been evaluating the cost of 
compliance with our state's greenhouse gas law, as--as you 
indicated earlier.
    The California legislature passed a bill that requires us 
to reach 1990 emissions levels by the year 2020, which is about 
a 30 percent reduction over business as usual, a challenging 
standard. But my board has produced a plan for doing that 
relies primarily, in addition to the auto standards and other 
auto and transportation related measures, on increased energy 
efficiency and renewable technologies, and on this we're not 
operating alone. We're cooperating with our public utilities 
commission, our energy commission----
    The Chairman. And the point is, the question I had was that 
on the economy, you feel that it's a positive?
    Ms. Nichols. The bottom line here is that, based on the 
economic modeling that we've been able to do for the State 
domestic product, we see an increase in growth over business as 
usual because of implementing this law.
    We see an increase in jobs overall in the economy, and, of 
course, we see savings, which we're not trying to monetize at 
this point in terms of health impact, because the very same 
measures that we're looking at to achieve these reductions in 
greenhouse gas emissions are measures that also have the effect 
of reducing the amount of carbon fuels that are being 
combusted, being burned, which means that we're also saving air 
pollution and saving lives.
    The Chairman. The reason I ask that is because this is the 
overriding concern for my colleagues on the other side, which 
is that this is a disaster waiting to happen, it's going to 
destroy everything, and I think what you've said here today in 
very clear terms is, it's just not true. And this debate is, of 
course, going to continue on and on, but if--but I think it 
will result in the end in legislation.
    I'm giving Senator Whitehouse the gavel. He has a U.S. 
Senate request to make and then he's going to recognize Senator 
Inhofe, and I thank everybody. I've got back-up meetings. Thank 
you.
    Senator Whitehouse.
    [presiding]. Thank you, Chairman. I would ask unanimous 
consent to place in the record a letter from the State of 
Connecticut regarding regulation of greenhouse gases under the 
Clean Air Act without objection. Senator Inhofe?
    Senator Inhofe. Thank you very much.
    Senator Whitehouse. The letter shall be submitted.
    [The information referred to follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Inhofe. I have a unanimous consent request, Mr. 
Chairman, that I included--we included in the record that a 
statement from the American Farm Bureau Federation. It--it's 
very good and it talks about concentrates----
    Senator Whitehouse. Without objection it will be included 
in the record.
    [The information referred to follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Inhofe. One of the things they talk about in the 
study done by Mississippi Farm Bureau Federation found that 
Title V permits alone would cost rice farmers in the State more 
than nine million dollars, so this we want to be part of the 
record.
    You know, Mr. Chairman, I normally don't bring this up, but 
since this is probably, hopefully, the last meeting of this 
nature that we're going to have this year before we adjourn, 
just let me say this.
    I know you three, the majority witnesses, you're very nice 
people, and I know that you rejoice in this notion that somehow 
all science is settled and now we can get beyond that and see 
what we can do to resolve these problems, when, in fact, and I 
don't blame--I see a sense of panic sometimes in some of these 
people, because one by one, people who were leaders, Claude 
Allegro is perhaps the leader, leading scientist in France, who 
was wanting everyone to sign the Kyoto Treaty. He's now clearly 
on the other side of the issue now.
    David Bellamy from the U.K. was--was one of the top people 
that was--that was pushing for the--the--the ratifi--Kyoto 
Treaty. He's now clearly on the other side. Nir Shaviv from 
Israel, the same thing. And you can go over and over and talk 
about these people and groups of scientists that have come and 
said, look, we were wrong on this thing. They're--and besides 
that, we're in a period of cooling right now, anyway.
    So, all these things are going on. And I would also have to 
say that when you talk about the--the U.S. CAP, it's true there 
are a lot of businesses in the industries in America and a lot 
of members of the U.S. Chamber, I would say, Mr. Kovacs, who 
would stand to make a lot of money if we were to pass a bill 
like the Lieberman-Warner bill, and I would--I, at one time, I 
listed all the members and how much they could stand to make on 
this thing, and I won't do that today, but, nonetheless, we 
know that's there. The Chairman was talking about to you--well, 
let me finish that line of reasoning.
    There are really three reasons that they could only garner 
thirty eight votes out of one hundred votes in the U.S. Senate 
to--to pass if there--if there had been a final passage vote of 
the Lieberman-Warner. That's one of the reasons. Science is 
coming in and creating it and certainly it's not settled.
    The second one is the cost and I, you know, you can debate 
that, and I just disagree with you in a friendly way. I say to 
Ms. Nichols, every evidence I have seen shows how costly this 
would be.
    And third, the fact that you can't do it in isolation. Mr. 
Bookbinder, I think it would be wonderful if everybody wanted 
to do this and would go to Copenhagen and they'd hold hands and 
say, well, we're all going--we're all going follow America, 
America's the leader. That isn't going to happen.
    You know these countries that are where we're having job 
losses right now. The--the--the National Association of 
Manufacturers estimated it at some nine and a half million more 
manufacturing jobs would go to countries like India, China, 
Mexico, places where they could go ahead and continue if this 
bill were to pass. Studies have been made and they're 
legitimate studies. So, you know, that is out there.
    And, so, I just want to get on the record that there is not 
unanimity. I see a lot of panic but not unanimity in this--in 
these assertions. Now, as far as the U.S. CAP's concerned. 
about half of those companies were opposed to the Lieberman-
Warner bill. About half of them--they actually weren't there in 
>05, I don't believe, when they had the--the McCain-Lieberman 
bill. But, the groups--the companies that were supporting them, 
many of those had an opportunity to--either they're making 
turbans or doing something else. So, the--Mr. Kovacs, how many 
businesses does the Chamber represent?
    Mr. Kovacs. Within the Federation, it's about three point 
five million.
    Senator Inhofe. And about how many of them, in your view, 
have never been subject to Clean Air Act permitting 
requirements before?
    Mr. Kovacs. I mean, EPA tells us right now that there are 
roughly about 15 thousand that are subject to Clean Air Act 
permitting----
    Senator Inhofe. Uh-huh.
    Mr. Kovacs [continuing]. requirements.
    Senator Inhofe. In your testimony, you indicated that many 
of the EPA suggested regulatory options would reshape business 
models and long-term planning for manufacturers' part supplier 
and vendors. How so?
    Mr. Kovacs. The way the Clean Air Act works is that the 
second that an endangerment finding is made, literally upon 
implementation of that, which is regulation, PSD permits are 
required immediately for any new construction, so, literally, 
that day, the day that regulation starts, permits would--would 
be required or they could not commence construction or a 
modification of the--of an existing facility.
    Senator Inhofe. Uh-huh. In your testimony, you indicated 
that Title V would include a citizen's suit provision. Now, can 
you elaborate on the impacts of this provision, what they would 
have on businesses?
    Mr. Kovacs. Well, right now, Title V applies to the 15 
thousand entities that would be regulated by the Act. Under 
Title V, because the tonnage requirements is only a hundred 
tons, it would roughly be about 1.2 entities that would have to 
get a Title V operating permit. An operating permit's just 
filing paper, but to get it, you're--the citizen's are entitled 
to bring a citizen's suit literally against each one of the 
operating permits.
    Senator Inhofe. Yes. What do you think of that, Mr. Lewis?
    Mr. Lewis. Yes, I mean, the PSD program is potentially a 
suffocating blanket on development, and because of the 
paperwork that you have to go through, there's--just--if you 
look at EPA's handbook on BACT, Best Available Control 
Technology, it--it's just--it's a five-step process, very 
complicated.
    So--so, it's--it's a great impediment to a small business 
constructing or renovating a new facility, even before it gets 
to installing the control technology, but this--this I think 
gets to Mr. Bookbinder's point. He asked, well, who would bring 
a lawsuit to--to apply a strict letter of the law application 
of PSD to the courts? And I would say, anybody who doesn't like 
development in his backyard. Anybody who is upset that Walmart 
is going to ruin the character of our town will now have a 
pretext under the Clean Air Act to bollux up that kind of 
development. So, I think this is--the fear here is real. It's 
not something to trivialize.
    Senator Inhofe. You know,--do you suspect there are a lot 
of people out there that just--you mentioned development--they 
don't want development anyway?
    Mr. Lewis. Yes, it's called NIMBY--Not In My Backyard--or 
BANANAS--Build Absolutely Nothing Anywhere Near Anything. I 
mean, this is--this is, certainly, a force in local politics, 
and we all know that people who are clever can figure out how 
to use litigation under national law to--to change, you know, 
local development patterns, and, so, I think that would be--I 
mean, that's the obvious answer to Mr. Bookbinder's question, 
who would--who would ever want to do this.
    Senator Inhofe. But they want to control that. You know, 
back years ago when I was mayor of the city of Tulsa, there's a 
guy that was, and it was a republican mayor of San Diego at 
that time, who had brought in a guy whose name of Dr. Robert 
Freilich, and I say that to the Chairman, who was going to come 
in and--and--and put circles around, you know, where--what you 
could do in these different areas. And they had actually hired 
him to come and do a plan for the city of Tulsa.
    Then I became Chairman of Tulsa, and I just asked a simple 
question. What about property rights? Do people care about 
property rights anymore? What do you think, Lewis?
    Mr. Lewis. Well, I know I care, and my wife cares so deeply 
that she lives in Seal Beach, California. She--she's one of 
Senator Boxer's constituents, actually, and she is now spending 
most of her time trying to fight the city council there, which 
is attempting to, we think, illegally revise the Codes so as to 
prevent anyone from building a third story on--on--on their own 
properties. So, yes, I mean, there is this mentality out there 
that your home and your property is everyone else's business 
but yours.
    Senator Inhofe. Yes, that's right, and this is--you know, 
one of the problems we have in this Committee is we're from 
different states. You know, I mentioned I was in Shady Point, 
Oklahoma, yesterday. Those people don't understand what we 
could be talking about.
    So, you pull coal out of the--that currently supplies fifty 
3 percent of the energy needed to run this machine called 
America, you pull it out of the mix, then how do you run the 
machine? You know, they--and how do I answer these people? It's 
difficult to do. Well, I have to say the end of that story was, 
Dr. Robert Freilich--we did ask him kindly to leave, and he 
hasn't been back since. So, we had very much concern--let me go 
a little bit longer because----
    Senator Whitehouse. Very briefly, if you don't mind, 
Senator, because we do have to conclude the hearing and get on 
to other things.
    Senator Inhofe. OK, one last thing. Let me ask you this, 
Mr. Kovacs. You also have a lot of membership in the 
agricultural community. Do you--how do you think, just in what 
kind of answer--if you want to give a brief answer or 
elaborate--this would affect your ag constituency and mine?
    Mr. Kovacs. I think whether it's ag or industry or 
commercial, the one point that we--to take it out of the 
politics and put it in to just the reality and that is, David 
Bookbinder had said, well, who's going to litigate? The fact 
is, we all agreed on the CARE decision, and now the D.C. 
Circuit overturned it.
    There is absolutely--there--there--during the Massachusetts 
versus EPA decision, there was a northeast coalition that was 
trying to get a NAAQS implemented for CO2 . The fact 
is, we don't have any control over this. Someone is going to 
sue, and everyone--everyone has an equal chance of being 
impacted.
    We're not saying they're all going to be impacted, but what 
we're saying is, as long as this question remains open, and it 
shouldn't remain open. David and I agreed. These entities 
shouldn't be regulated by EPA. But it isn't closed, and if 
Congress doesn't make the decision, then the courts will.
    Senator Inhofe. Thank you, Mr. Chairman. We're still in our 
Senate Arms Committee, so we'll go down to that one.
    Senator Whitehouse. Thank you. I want to thank the 
witnesses. We're going to conclude in just a moment because I 
know it--it's 12:30 already. I did want to react to one thing 
and ask one question. Ms. Nichols, you--you said in your 
statement that at this point, we all agree that global warming 
is a national and international crisis, I think was your words. 
Yes.
    I just want to point out that you may be in one of the five 
buildings in the United States of America in which that's not 
agreed. This one, the headquarters of Exxon Mobil, the 
headquarters of the Chamber of Commerce, the Competitive 
Enterprise Institute, and I'll allow one more for its player to 
be named later, but I think most people do get it.
    And I would note that we had a very interesting witness not 
too long ago in this Committee, sitting where you are now, who 
is the chairperson of the organization of all of the health 
directors of all of the states, and they came in with a very, 
very powerful substantive statement on the importance of 
addressing global warming. And just because of what I'm 
accustomed to around here, I asked her, well, what about the 
minority report? Should we see that also? She said, there is no 
minority report.
    And I said, you mean the health directors from Oklahoma, 
from Ohio, from Wyoming, from Idaho, from Tennessee, from 
Georgia, from Missouri, all of my colleagues here are 
unanimously agreed to this? And she said, yes. I said, well, 
how can you explain the difference between people in this 
building who can't seem to get their heads around this problem 
with unanimity at your point?
    And she very politely said, well, each of us did take an 
oath to protect the health of the people of our states. So, I 
think that you may be in one of the few buildings in which 
people still aren't accepting that this is an important public 
responsibility we have.
    But I do think the American public gets it, and I just 
wanted to remark on--on that. Mr. Burnett, you talked about the 
cost of an action, and as you heard in the discussion today, 
those who wish to ignore this subject run up always the concern 
about the cost of action. It doesn't strike me that inaction 
comes free.
    And I would be interested in--from any witness, any study, 
or analysis that you're aware of that we should be looking at 
in this committee, that tries to calculate the cost of 
inaction. I can look forward to a day when we will be in a 
relatively similar situation to the one we're in right now on 
this financial crisis. And people will look back and say where 
were you.
    And I want to make sure that, when that day comes, I can 
say, look, I made every argument at my disposal for this thing, 
so it would be helpful to get information on how to make that 
economic argument. It strikes me that the--there's an internal 
cost-shifting issue. And some people will be winners and some 
people will be losers as a result of a cap and trade system. 
And it is our responsibility to even that out in well-crafted 
legislation.
    But one thing we know is that reducing our reliance, 
particularly on foreign oil, will put an end to, or at least 
reduce, an absolute hemorrhage of our national assets out into 
the hands and pockets of other nations in what has been 
described as the greatest transfer of wealth in the history of 
human kind. And we are on the losing end of that right now.
    If nothing else happens, it strikes me that putting an end 
to that makes our economy stronger and better off. And then we 
have the internal question of how you reallocate, but that's 
the way I see it, and Mr. Burnett if you'd let me know if you 
have any sources to help flesh out the question of the cost of 
inaction.
    Mr. Burnett. I appreciate the question, Senator, and I 
would be happy to provide for the record specific sources or--
or studies of this sort, but----
    Senator Whitehouse. For the record is fine.
    Mr. Burnett. There are basically--I would phrase it as two 
costs of inaction. The first is that if we do nothing now, we 
will have to do more later.
    Senator Whitehouse. Uh-huh.
    Mr. Burnett. And that will cause a more--a more significant 
steeper change----
    Senator Whitehouse. Sort of like compound interest to put 
it in economic terms.
    Mr. Burnett. That--that's right. There's many very 
inexpensive opportunities now, and we should be pursuing those 
inexpensive opportunities so that we can begin a transition and 
begin developing the new technologies for a low-carbon economy.
    The second cost of inaction are the four costs that I 
described in my testimony. It's the cost of adapting to climate 
change. It's the cost because not everybody in society will be 
able to adapt, and it's the cost to our infrastructure and our 
natural systems. The natural systems can't adapt at the rate 
that we're experiencing climate change.
    And, finally, other countries will not be able to adapt, 
and this will impose real security costs on the U.S. and other 
countries in--that--that have to deal with those security 
situations as reflected in the recent national intelligence 
estimate by this Administration. Ms. Nichols, did you want to 
say something? I'm sorry, I----
    Ms. Nichols. I was just going to add that the--the most 
comprehensive study that I know of the cost of inaction was the 
one that was done by the Stern Commission in Great Britain. 
It's controversial in various respects, but one thing, in 
addition to what Mr. Burnett said that I think is striking is a 
world in which many poorer countries are either under water, 
suffering from disease, or otherwise unable to make their own 
economies work is a world in which, for example, U.S. farmers 
would be less well off because they won't have people to export 
their products to.
    We really are interconnected, and there's no question that 
a need is there to act globally. What we're talking about here 
is really looking at measures that the U.S. could take today 
that are within the realm of what would help us protect 
ourselves, and I think that's where perhaps there are some 
differences, whether we think there's any cost at all that's 
justifiable if there's a benefit that we would experience here 
directly.
    The fact is that we've seen it time and time again that our 
regulatory system is capable of taking into account the 
absurdities that people worry about and--and making sure that 
we don't implement them that way, but, I guess, If you want to 
justify inaction, you can find reasons to do it.
    Senator Whitehouse. Yes. Well, if I--I'm from Rhode Island 
and we are the Ocean State. I'm told by a friend who's doing 
some research on my--on one of my predecessors in the Senate 
from Rhode Island, Theodore Francis Green, that he was once 
asked, how big is Rhode Island, anyway? And he said, well, that 
depends. High tide or low tide?
    So, when you have a State where that's the kind of way you 
answer that question, these risks are very, very real risks, 
and I very much appreciate the--if you want to take a minute 
and draw us to a conclusion, Mr. Lewis.
    Mr. Lewis. Thank you, Senator Whitehouse. You described the 
unanimity of all of these health officials on the point that 
global warming is a clear and present danger to human health.
    I would just like to note that means that it is very 
unlikely that EPA would be able to get away with this--this 
strategy that they outline in the ANPR of only establishing a 
welfare or secondary NAAQS under the NAAQS program, having made 
an endangerment finding about carbon dioxide.
    They would have to make a health base primary NAAQS 
rulemaking, and that means that they would basically have 10 
years at most to try to, what? Lower atmospheric carbon dioxide 
levels below where they are today? An impossible task, even 
complete de-industrialization of the United States would not 
accomplish that in 10 years.
    Senator Whitehouse. Understood. But you seem to have missed 
the forest for the trees.
    Mr. Burnett. No, what I'm saying is that the proposed--
that--that the claim that we don't have to worry about letting 
the dominos fall and cleanup----
    Senator Whitehouse. Your larger claim though is that we 
don't have to anything about this.
    Mr. Burnett. No, I never said that. You are putting words 
in my mouth. I never said that.
    Senator Whitehouse. I thought you said that precisely to 
what should be done.
    Mr. Burnett. No. The question to me was, do I support 
legislation like McCain-Leiberman or Leiberman----
    Warner?
    Senator Whitehouse. What would you do?
    Mr. Burnett. My answer is no.
    Senator Whitehouse. What would you do?
    Mr. Burnett. Well, right now there are a ton of voluntary 
programs which, apparently, everybody thinks is inaction, which 
cost a lot of money. I think we need to do a lot of research. I 
think there are some deregulatory measures like, for example, 
we have the highest capital costs penalty under--in our tax 
system of almost any industrialized country for replacing new 
equipment--for replacing old equipment with new equipment.
    A change in the tax code would--would rapidly accelerate 
the turnover of capital stock, which is one of the best ways of 
improving energy efficiency and lowering emissions, at least 
per unit of GDP.
    Senator Whitehouse. Have you read the Tragedy of the 
Commons?
    Mr. Burnett. Have I read----
    Senator Whitehouse. The Tragedy of the Commons.
    Mr. Burnett. Of course. Of course.
    Senator Whitehouse. Do you believe that it is----
    Mr. Burnett. There is always--there is always a potential 
for tragedy in any commons----
    Senator Whitehouse. Yes.
    Mr. Burnett [continuing]. but one must understand that 
regulation creates its own kind of commons, which is the 
politicization of a resource that also creates the risk of 
tragedies. My point is not that there are no risks of climate 
change, but that as I understand the science, the risks of 
climate change policy far outweigh the risks of climate change 
itself.
    Senator Whitehouse. I think you are in a very, very, very 
small and eccentric group in having that understanding, and it 
seems to me that it's extraordinary to imagine if you concede 
that the Tragedy of the Commons is a legitimate economic 
principle, it is impossible to see how purely voluntary actions 
could ever get our arms around the problem. That's the very 
principle that is at the heart of the Tragedy of the Commons.
    Mr. Burnett. Well, the alternative at this point in time, 
is to force us to act--to act in a way that assumes we have the 
technological capability to do something that we in fact can't 
do. We do not now know how to meet the world's energy needs 
without fossil fuel.
    Senator Whitehouse. There is a great deal that we can do, 
and I am optimistic about our ability to do it. We are now well 
over time. I appreciate the witnesses and the hearing is 
adjourned. There are 2 weeks to add additional testimony to the 
record.
    [Whereupon, at 12:37 p.m., the hearing was adjourned.]
    [Additional material submitted for the record follows.]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]    
  

                                  [all]