[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
        CLEAN ENERGY POLICIES THAT REDUCE OUR DEPENDENCE ON OIL

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


                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 28, 2010

                               __________

                           Serial No. 111-113


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                 HENRY A. WAXMAN, California, Chairman
JOHN D. DINGELL, Michigan            JOE BARTON, Texas
  Chairman Emeritus                    Ranking Member
EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
RICK BOUCHER, Virginia               FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
GENE GREEN, Texas                    STEVE BUYER, Indiana
DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
  Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California               MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania       GREG WALDEN, Oregon
JANE HARMAN, California              LEE TERRY, Nebraska
TOM ALLEN, Maine                     MIKE ROGERS, Michigan
JANICE D. SCHAKOWSKY, Illinois       SUE WILKINS MYRICK, North Carolina
CHARLES A. GONZALEZ, Texas           JOHN SULLIVAN, Oklahoma
JAY INSLEE, Washington               TIM MURPHY, Pennsylvania
TAMMY BALDWIN, Wisconsin             MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas                  MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York          PHIL GINGREY, Georgia
JIM MATHESON, Utah                   STEVE SCALISE, Louisiana
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA M. CHRISTENSEN, Virgin 
    Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE L. BRALEY, Iowa
PETER WELCH, Vermont
                 Subcommittee on Energy and Environment

               EDWARD J. MARKEY, Massachusetts, Chairman
MICHAEL F. DOYLE, Pennsylvania       RALPH M. HALL, Texas
JAY INSLEE, Washington               FRED UPTON, Michigan
G.K. BUTTERFIELD, North Carolina     ED WHITFIELD, Kentucky
CHARLIE MELANCON, Louisiana          JOHN SHIMKUS, Illinois
BARON HILL, Indiana                  JOHN B. SHADEGG, Arizona
DORIS O. MATSUI, California          STEVE BUYER, Indiana
JERRY McNERNEY, California           GREG WALDEN, Oregon
PETER WELCH, Vermont                 SUE WILKINS MYRICK, North Carolina
JOHN D. DINGELL, Michigan            JOHN SULLIVAN, Oklahoma
RICK BOUCHER, Virginia               MICHAEL C. BURGESS, Texas
FRANK PALLONE, Jr., New Jersey
ELIOT ENGEL, New York
GENE GREEN, Texas
LOIS CAPPS, California
JANE HARMAN, California
CHARLES A. GONZALEZ, Texas
TAMMY BALDWIN, Wisconsin
MIKE ROSS, Arkansas
JIM MATHESON, Utah
JOHN BARROW, Georgia


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachussetts, opening statement..............     1
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     3
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     6
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     7
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     7
    Prepared statement...........................................    10
Hon. Charlie Melancon, a Representative in Congress from the 
  State of Louisiana, opening statement..........................    16
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................    17
Hon. Doris O. Matsui, a Representative in Congress from the State 
  of California, opening statement...............................    18
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................    19
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................    20
Hon. Lois Capps, a Representative in Congress from the State of 
  California, opening statement..................................    21
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................    22
Hon. Eliot L. Engel, a Representative in Congress from the State 
  of New York, opening statement.................................    23
Hon. John B. Shadegg, a Representative in Congress from the State 
  of Arizona, opening statement..................................    24
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................    25
Hon. Steve Scalise, a Representative in Congress from the State 
  of Louisiana, opening statement................................    26
Hon. Jay Inslee, a Representative in Congress from the State of 
  Washington, opening statement..................................    27
Hon. John Sullivan, a Representative in Congress from the State 
  of Oklahoma, opening statement.................................    28
Hon. Jerry McNerney, a Representative in Congress from the State 
  of California, opening statement...............................    29

                               Witnesses

Lisa P. Jackson, Administrator, Environmental Protection Agency..    30
    Prepared statement...........................................    33
    Answers to submitted questions...............................   231
Fred Smith, Chairman, President and Chief Executive Officer, 
  FedEx Corporation..............................................    69
    Prepared statement...........................................    71
Jason Wolf, Vice President for North America Better Place........    82
    Prepared statement...........................................    84
Robert Diamond, Former Lieutenant, U.S. Navy, Security Fellow, 
  Truman National Security Project...............................    92
    Prepared statement...........................................    94
Charles Drevna, President of the National Petrochemical and 
  Refiners Association...........................................    97
    Prepared statement...........................................    99

                           Submitted Material

Letter of March 17, 2010, from the Alliance of Automobile 
  Manufacturers to United States House of Representatives and 
  Senate, submitted by Mr. Markey................................   133
Letter of March 17, 2010, from the Association of International 
  Automobile Manufacturers to United States House of 
  Representatives, submitted by Mr. Markey.......................   135
Letter of March 15, 2010, from the UAW to United States House of 
  Representatives and Senate, submitted by Mr. Markey............   137
Documents submitted by Ms. Capps.................................   139


        CLEAN ENERGY POLICIES THAT REDUCE OUR DEPENDENCE ON OIL

                              ----------                              


                       WEDNESDAY, APRIL 28, 2010

                  House of Representatives,
            Subcommittee on Energy and Environment,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:36 a.m., in 
Room 2123, Rayburn House Office Building, Hon. Edward J. Markey 
[chairman of the subcommittee] presiding.
    Present: Representatives Markey, Doyle, Inslee, Melancon, 
Matsui, McNerney, Welch, Dingell, Pallone, Engel, Green, Capps, 
Matheson, Barrow, Waxman [ex officio], Upton, Stearns, 
Whitfield, Shimkus, Shadegg, Pitts, Bono Mack, Sullivan, 
Burgess, Scalise, Griffith, and Barton [ex officio].
    Also Present: Representative Latta.
    Staff Present: Phil Barnett, Staff Director; Bruce Wolpe, 
Senior Advisor; Greg Dotson, Chief Counsel, Energy and 
Environment; Lorie Schmidt, Senior Counsel; Alexandra Teitz, 
Senior Counsel; Michal Freedhof, Counsel; Alex Barron, 
Professional Staff Member; Melissa Cheatham, Professional Staff 
Member; Caitlin Haberman, Special Assistant; Karen Lightfoot, 
Communications Director, Senior Policy Advisor; Lindsay Vidal, 
Special Assistant; Mitchell Smiley, Special Assistant; Mary 
Neumayr, Minority Counsel; Andrea Spring, Minority Professional 
Staff; Aaron Cutler, Minority Counsel; and Garrett Golding, 
Minority Legislative Analyst.

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
        CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS

    Mr. Markey. Good morning. And welcome to the Subcommittee 
on Energy and the Environment.
    Consumers today spend more than half a billion dollars a 
day on foreign oil. That is half of our trade deficit. Between 
2001 and 2008, when gasoline increased from $1.46 to $3.27 a 
gallon, the annual household's annual energy cost increased by 
almost $2,000, slightly more than the average tax cut provided 
during the same period. These gas dollars go straight to OPEC, 
and some of them wind up in the hands of terrorists.
    We have spent too long resisting efforts to reduce our 
dependence on oil. As Tom Friedman of the New York Times puts 
it, the price of oil and the path of freedom run in opposite 
directions. Some oil payments find their way to Iran to fund 
its nuclear program, and other payments help fund teachings 
that perpetuate hate against Americans. But until recently, we 
were on the path of ever-increasing oil dependence.
    As you can see from the red line, in 2007 the Department of 
Energy projected increased levels of oil consumption far into 
the future. These are based on the Bush administration's oil-
friendly policies, and these numbers were actually put together 
by the Bush administration Department of Energy.
    With Democrats in control of Congress, we moved quickly to 
end this dangerous cycle, enacting the first mandated fuel 
economy provisions in 32 years, which was a huge first step. 
President Obama accelerated their implementation with a 35.5 
mile-per-gallon standard by 2016. Combined with the Renewable 
Fuel Standard and the Recovery Act measures, you can see from 
the blue line that we have frozen our levels of oil consumption 
for the foreseeable future. Again, that number from the Energy 
Information Agency.
    But we can and we must do more. The EPA has modeled what is 
technologically possible from a range of clean energy policies 
like those in the Waxman-Markey bill. And you can see from the 
green line that we can save more than all of the oil we 
currently import from OPEC, as much as 4 million or 7 million 
barrels a day more than we have already accomplished. That is 
the green line.
    So we must continue down the path to further reducing our 
oil dependence. The Waxman-Markey bill includes $20 billion and 
other measures to deploy plug-in hybrid and all-electric 
vehicles, and has other provisions to help save oil.
    Now, I am sure we will be told, ``No, you can't. It will 
cost too much. It can't be done.'' But let me remind you, the 
automobile industry delivered that very same message for nearly 
a decade. They said the technology didn't exist; that we would 
all have to drive tiny little go-carts if we raised fuel 
economy standards; and that the industry would suffer.
    Meanwhile, other countries innovated. The U.S. bled 
manufacturing jobs. Some auto makers closed facilities, APTA 
facilities, in part because we didn't raise standards quickly 
enough for them to compete. A recent study found that by 
transitioning to electric vehicles we could create 1.9 million 
new jobs by 2030 in the United States; we can improve our trade 
deficit by $127 billion per year; and the typical U.S. 
household would pocket almost $4,000 extra in gasoline saved 
and other benefits.
    But if we do not act, we will prevent a generation of 
Americans from competing in the largest economic growth 
opportunity of the 21st century: The 2 million new clean energy 
jobs that would be created in America under the Waxman-Markey 
bill will be, unfortunately, created overseas; and we will 
simply trade our dependence on foreign oil for dependence on 
Chinese solar panels, Korean batteries, and German wind 
turbines.
    To say that it can't be done, I say to those, look at the 
clean energy entrepreneurs like A123, A Better Place, and the 
scores of new entrepreneurial companies that have begun this 
process of reinventing energy technologies and who are proving 
that, yes, it can.
    By charting this new path towards an energy-independent 
future, we will one day be able to tell OPEC that we don't need 
their oil anymore than we need their sand. That is what this 
hearing is all about.
    The chair has completed his opening statement. We now turn 
to recognize the ranking minority member, the gentleman from 
Michigan, Mr. Upton.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you, Mr. Chairman. And I would like to 
welcome all of our witnesses here this morning, with a special 
welcome to Administrator Jackson. Ms. Jackson, we have many 
important issues before this subcommittee, and we would hope 
that this is not your last visit. We look forward to your 
testimony and interaction today.
    Before I begin, I would like to submit for the record the 
June 2009 hearing testimony of Lion Oil. It is a small refiner 
with about 1,200 employees. It is located in Arkansas. And from 
that testimony regarding the Waxman-Markey cap-and-trade 
legislation--which I would note is pretty much the same as the 
EPA regulations--``will result in the shuttering of our 
refinery and the destruction of 1,200 jobs.''
    Yes, shuttering domestic refineries will not reduce our 
dependence on foreign oil. It will kill American jobs, while we 
import more refined oil products from countries with more lax 
environmental laws. EPA regulations that would result in the 
loss of domestic refineries would not extend to refineries in 
India, where we will be importing gasoline at, frankly, higher 
prices. We can remember the $4 gasoline in the past. These 
policies could send it even higher.
    I agree that we must take action to reduce America's 
dependence on energy from unstable foreign governments and 
dictatorships, but we can do that by increasing domestic 
production of oil and natural gas, including recovering our 
vast oil shale reserves while promoting unconventional fuels 
such as coal-to-liquid technology. We need, simply, all of the 
above. We cannot enact or have EPA force costly job-killing 
climate change policy under the so-called umbrella of energy 
independence.
    I would agree that if we allow the EPA to take command and 
control of our economy that our oil imports will in fact 
decrease. But you know what else will decrease? American jobs. 
Raising the price of gasoline because of cap-and-trade by as 
much as perhaps 70 cents a gallon, 77 cents a gallon, will 
indeed increase our consumption.
    We are seeing a trend to electrify the transportation 
sector, which I think is good, but electric cars have to plug 
into a baseload power source. The EPA is fighting a war on 
coal, where we get over 50 percent of our power today. I would 
be interested in hearing the administration's view on nuclear 
power, something that was not in cap-and-trade or, I believe, 
in the Administrator's testimony this morning.
    It is a fact that EPA climate regulations or worldwide 
climate agreements thus far will not include China or India. As 
we suffer from double-digit unemployment, are we going to send 
simply more jobs abroad for no environmental benefit? Yet many 
in Congress and the administration continue to promote policies 
that will push gas and electricity prices even higher by 
foolishly blocking and creating disincentives for energy 
production here in North America. They have also taken ill-
conceived steps to block our government from using home-made 
fuel derived from coal and oil from our Nation's closest ally 
and northern neighbor, Canada. The glaring consequence of no 
domestic energy production is greater dependence on foreign 
sources of energy, coupled with higher gasoline, oil, and 
natural gas and electricity prices.
    Our economy is in a tough time right now. And coming from 
Michigan, I know firsthand just how difficult things are for 
the folks at home. Rising energy prices will only exacerbate 
the economic problems that we are facing, and by law the EPA is 
prevented from taking economic considerations into account. I 
think that is wrong.
    Now, before I yield back, I would just like to raise 
another important issue with Administrator Jackson: coal 
combustion waste or coal ash. For 30 years, EPA has resisted 
subjecting CCW to Federal hazardous waste management 
regulations. Doing so now, I believe, would have serious 
economic and environmental consequences. Coal ash has been 
regulated in accordance with varying requirements and programs 
established by the States, and unwarranted hazardous 
designation will eliminate the environmental benefits of 
reusing coal ash and only force greater disposal in landfills.
    Recycling the ash falls right in line with our new green 
era of responsibility. Both the Green Building Initiative and 
the U.S. Green Building Council encourage using fly ash in 
concrete or products that contain recycled materials in green 
buildings. That benefit would be lost if somehow we saw 
regulation. So I would hope that perhaps you might be able to 
comment on that.
    At this point, I yield back the balance of my time.
    Mr. Markey. The gentleman's time has expired.
    For the record, the Nuclear Energy Institute endorsed the 
Waxman-Markey bill.
    Let me turn and recognize the chairman of the full 
committee, the gentleman from California, Mr. Waxman.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman.
    The title for today's hearing is on Clean Energy Policies 
that Reduce Our Dependence on Oil. Now, I think what we have 
seen in this country for decades is a view that we can't do 
anything about this problem. We are just dependent on foreign 
oil to sustain our way of life, and that is it. There is not 
much we can do about it. Maybe drill a little bit more in the 
United States to get more domestic oil, but you can't replace 
all that oil we are bringing in; so why try?
    In fact, the policies that we saw in the first part of this 
decade were exactly what the Republican President wanted. He 
had a Republican Congress, and therefore President Bush got 
through--energy policy--more than 95 percent of the policies he 
wanted. But what we accomplished in terms of dependence on 
foreign oil with regard to those policies, we were still on a 
trajectory to need more oil every year, year after year for as 
far as we could project into the future.
    It seems now that each year the amount of oil that we 
imported has been going up, up, and up and up, and that makes 
us more vulnerable, vulnerable to our national security being 
compromised.
    However, in the last few years Congress reversed its 
course. In, I guess it was 2007, and 2008, the Energy 
Independence and Security Act was adopted, and it increased the 
CAFE standard, which meant that cars had to be more efficient 
in the use of gasoline. The beginning of last year, we passed 
the Recovery Act, and in that law we invested in the technology 
and manufacturing capability to help bring plug-in electric 
vehicles to market beginning this year. In that law, we helped 
State and local governments replace their buses, trucks, and 
work vehicles with natural gas-powered vehicles, all the way 
from New York to Texas, from California to Maryland. So we have 
started to do things that have actually reduced our dependence 
on foreign oil.
    Today's hearing will explore some of the real actions we 
have taken already to cut our Nation's dependence on this oil. 
And I want to welcome Ms. Lisa Jackson to the committee. She is 
going to testify regarding clean energy policies that are being 
implemented by the EPA that are reducing our dependence on oil.
    Earlier this month, EPA finalized the historic rule 
establishing greenhouse gas tailpipe standards for cars and 
trucks. The EPA has produced strong but workable standards for 
tailpipe emissions, harmonized with standards from the National 
Highway Traffic Safety Administration. These standards will cut 
our oil dependence by 1.8 billion barrels of oil. It will draw 
on the development of new technology here in the U.S., and 
provide the U.S. auto industry with the certainty it desires. 
These standards do all this while saving American consumers 
$3,000 over the life of the vehicle.
    So what we have is a standard that is supported by the auto 
companies and auto workers, States, and the environmentalists. 
They are all on board. These policies are already making a 
difference for our Nation's future. For the first time in 
decades, the Energy Information Administration no longer 
projects that the U.S. need for oil will increase year after 
year. We now expect that the U.S. will not need any more oil in 
2030 than it did in 2007. This is a remarkable improvement for 
our energy security.
    There is still more work to do. Administrator Jackson will 
brief us on an important new EPA study that reveals the 
dramatic oil savings that are technically feasible and can be 
achieved through new energy policies.
    But the good news is that as we begin to solve the 
seemingly intractable problems of oil dependence, we also make 
progress on another seemingly intractable problem, the 
dangerous increase in our carbon pollution.
    This is what we stand for: strong, pragmatic, and effective 
policies that face the threats to our country and find sensible 
ways to resolve them. These are not partisan issues. They 
shouldn't be looked at as partisan issues. But we did go down 
that partisan road in the early part of this decade, and that 
road took us to greater dependence and problems that we see as 
intractable, rather than problems that we are now looking at as 
problems that we can deal with. And we can, as a result, have a 
safer and more efficient and more better future for our 
environment as well as the economy of this Nation.
    Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Kentucky, Mr. 
Whitfield.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Mr. Whitfield. Thank you, Mr. Chairman. And I am glad we 
are having this hearing today on clean energy policies that 
will reduce our dependence on oil. I am pleased also that we 
have Environmental Protection Agency Administrator Lisa Jackson 
with us this morning. And anytime we talk about dependence on 
oil, one of the innovative actions we are trying to move to is 
electrification of our transportation system. And I want to 
talk about the importance of coal in meeting the electricity 
demands of our country. We know today that coal produces 51 
percent, 52 percent of the electricity needs in this country. 
We know that the demand for electricity is going to increase 
dramatically over the next 20 years. And I have the clear 
impression that this administration and this EPA has a strong 
bias against coal.
    Now, why do I say that? Well, one, this endangerment 
finding that they are working on right now. We know and the EPA 
has admitted, itself, has acknowledged that the finding, the 
endangerment finding will cause job losses in the U.S., and I 
think that that represents a clear and present danger to our 
economy and all of our efforts to provide the conditions for 
job growth and prosperity.
    In addition to the endangerment finding, this EPA is 
limiting coal permits. This EPA is trying to designate coal ash 
as a hazardous material. This EPA, in my view, is trying to 
create as many obstacles as possible in using coal. And I can 
assure you that China is using more coal, India is using more 
coal, because they want to be competitive in the global 
marketplace, and we know that coal produces the least expensive 
electricity.
    Now, if we are going to provide additional incentives for 
solar power, wind power, I feel very strongly that those 
alternative sources are inefficient, too expensive, use too 
much land, and do not produce enough electricity and cannot 
produce enough electricity. And I would hope that this 
administration would spend more time, more money on helping us 
perfect carbon capture and sequestration. Dr. John Hauser at 
MIT is one of the leaders in this regard. He is working 
diligently with others to do this. And I think our long-term 
viability and strengthening our economy depends upon developing 
carbon capture and sequestration and continued use of coal. 
Thank you.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Michigan, the 
chairman emeritus of the committee, Mr. Dingell.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Dingell. Thank you, Mr. Chairman.
    The Democratic Congress and the Obama administration have 
done a tremendous amount to reduce our dependence on foreign 
oil. Our efforts began with the Energy Independence and 
Security Act, which was dealt with in this very committee and 
which continued with the American Recovery and Reinvestment 
Act, and the administration's coordinated approach to deal with 
vehicle emissions, and, finally, the administration's proposal 
for increased offshore drilling.
    After many years of predictions that our dependence on 
foreign oil would only create additional dependence on that 
oil, we are seeing a change in that trajectory. The news only 
gets better if we see the American Clean Energy and Security 
Act signed into law.
    I would like to take a moment to commend Administrator 
Jackson for her work leading to a single, harmonized standard 
for greenhouse gas emissions and fuel efficiency for autos. 
Prior to this landmark agreement, our auto makers faced a 
patchwork of standards that would have been very nearly 
impossible to meet. Now that we have a single national standard 
for model years 2012 to 2016, it is time to begin the same 
approach for the post-2017 model years. The administration has 
been successful once, and I know that with effort, they can do 
the same thing again.
    As much as I disagreed with the Supreme Court in the case 
of Massachusetts versus EPA, the decision, although erroneous, 
was made. EPA was required to move forward with their 
endangerment finding, and they have done so. That endangerment 
finding is the legal underpinning for a national standard for 
autos. The national standard is too important to our 
manufacturers and to our economy for us even to consider a 
resolution of disapproval.
    Of course, it is important that we note that remarkable 
technologies are coming out of our auto makers. Whether we are 
talking about the Chevy Volt, the Ford Escape, and the Fusion 
hybrids, advanced transmission or advanced submission control 
technology, our auto makers are stepping up to the plate to 
provide consumers with quality, clean, and fuel-efficient 
technologies. GM is building the battery packs for the Chevy 
Volt in my district in Brownstown, Michigan, and Ford is doing 
the same thing at their Ypsilanti Township plant. We are busily 
creating 21st century jobs while we are protecting the 
environment.
    Mr. Chairman, I thank you again. And I look forward to our 
witnesses and their comments.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Texas, the ranking 
member of the full committee, Mr. Barton.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you, Chairman Markey. I want to thank you 
and Chairman Waxman for agreeing to hold this hearing and 
inviting Administrator Jackson. I want to thank you, Madam 
Administrator, for agreeing to come. I look forward to a 
productive exchange of ideas.
    Mr. Chairman, I think it is no secret that I don't believe 
the endangerment finding that the Environmental Protection 
Agency put out in April has been properly done.
    I guess I would start with the premise that when I was born 
in 1949, my life expectancy was 68 years old. My communications 
director and his wife had a baby girl last week; her life 
expectancy is 81. We are told by the Census Bureau that a baby 
born 10 years from now can expect or anticipate to live to 82. 
Neither of my grandfathers lived past the age of 67. My father 
died at the age of 71. My mother is alive and well at the age 
of 85.
    So I don't see as a basic premise how the Environmental 
Protection Agency can say that CO2 is an 
endangerment to the public health of the people of the United 
States when our life expectancy is going up, when the models 
that the endangerment finding are based on show no 
endangerment, even in their own models in the most extreme 
cases, until 200 years from now. It just doesn't wash with me, 
Mr. Chairman. So I am going to be asking our distinguished 
Administrator a number of questions about that endangerment 
finding when it is my opportunity to do so.
    This endangerment finding, if implemented and backed up by 
all the regulations that the Environmental Protection Agency 
has indicated they plan to put upon the United States economy, 
would require rules to regulate CO2 from aircraft, 
from ocean-going vessels, nonroad engines and vehicles, all 
types of fuels, cement plants, petroleum refineries, nitric 
acid plants, utilities, oil and gas production, landfills, 
animal feed operations. It could be construed to even allow 
regulation of large public events where large numbers of people 
accumulate, such as the World Series, Super Bowl, Boston Red 
Sox at Fenway Park, because under the strictest interpretation 
of the Clean Air Act, enough CO2 is emitted in a 
large gathering to trigger the point-source standard for 
regulation. I know that is not the intention. I don't think the 
EPA would do that. But it is technically possible.
    Our economy should be about economic jobs and growth, Mr. 
Chairman. Congress has an obligation to promote economic 
growth. This is the committee, the Energy and Commerce 
Committee, the oldest standing committee in the House of 
Representatives, that has the primary responsibility for 
authorizing legislation to create that economic growth.
    The Clean Air Act originated in this committee, as you 
know, Mr. Chairman. The senior members of this committee voted 
the last time on the reauthorization and amendments to the 
Clean Air Act early the 1990s under the leadership of then-
Chairman John Dingell. I was a member of that committee at that 
time, and I voted for those amendments, Mr. Chairman. I think 
it was a good piece of legislation, and I have absolutely no 
qualms that I voted for it.
    Having said that, it is my opinion, and I think the record 
will bear this out, that the Clean Air Act was never intended 
to regulate CO2. CO2 is not a pollutant 
under the definition of that act. And the court case in 
Massachusetts versus EPA doesn't say that CO2 is a 
pollutant. It doesn't say that the Clean Air Act requires that 
CO2 be regulated. It simply says that the 
Environmental Protection Agency has an obligation to make a 
decision.
    It is my opinion that they have made the wrong decision. It 
is my opinion that the endangerment finding is, in and of 
itself, a threat to the economic vitality of this country. And, 
as I said earlier, Mr. Chairman, when it is my opportunity to 
ask questions of our distinguished Administrator, I will be 
asking her a series of questions about that endangerment 
finding.
    With that, Mr. Chairman, I am very appreciative of the 
opportunity to participate in this hearing. I yield back the 
balance of my time, and look back to a productive hearing.
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    Mr. Markey. The gentleman's time has expired.
    The Chair recognizes the gentleman from Louisiana, Mr. 
Melancon.

OPENING STATEMENT OF HON. CHARLIE MELANCON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF LOUISIANA

    Mr. Melancon. Thank you, Mr. Chairman. I would like to take 
a moment, first of all, to recognize the families of the 11 
victims that lost their lives in the deepwater rig last week 
and those that were injured. I am thankful for those that 
survived. Those men and women are doing what so many other men 
and women do in Louisiana every day, working hard to provide a 
better life for their families and produce resources for their 
country. Their sacrifice is immeasurable to those that love 
them. And so I ask everyone to remember the human face of this 
tragedy and to keep them and their families in your prayers.
    I also ask that we all keep in mind the safety of those 
brave responders and pray for their work, that it goes swiftly 
and without incident, as we continue to try and clean up after 
this horrible disaster.
    I would like to also call attention to the serious 
environmental and economic threat posed by the disaster. The 
oil slicks that are spreading from the rig site could have a 
detrimental impact on marine life along our fragile coast, and 
they must be properly contained. The marshes and estuaries that 
line the Louisiana coast, as well as the Mississippi coast, are 
home to the most productive fisheries in the country, if not 
the entire world, and host countless species of migratory birds 
throughout the year. Protecting these natural gifts and 
resources must be a priority for all of us.
    My remarks today will be short and simple. I thank the 
Chairman for holding this hearing and allowing us the chance to 
have this very important discussion.
    All of our lives are touched by the production of oil and 
petroleum products every day. Many of us traveled by car to be 
here today, and to communicate with each other, all of us will 
use a plastic pen or keyboard at some point today. There is no 
doubt oil and its byproducts play an important role in our 
country's history and economic development. I think our 
committee and our caucus should be proud of the forward-
thinking energy policies that have been put in place. But I 
would be remiss if I didn't point out the continuing importance 
of oil and petroleum products in our economy.
    The good-paying jobs and the affordable energy and chemical 
products drive our economy day in and day out. It is impossible 
to know exactly what the future looks like, but I think it is 
important today to focus on priorities, our national security, 
and strengthening the economy.
    I think we should be talking about energy independence. 
Producing energy from our homegrown assets, all of them, not 
just some of them, makes us less reliant on hostile nations and 
promotes American ingenuity. For example, we shouldn't have to 
buy all of our patented solar equipment from foreign 
manufacturers.
    In Louisiana, we have proudly produced oil and gas for 
generations, constantly innovating and evolving the way we 
explore and extract. As I recognized at the beginning of my 
statement, there are real costs associated with production. But 
our State has selflessly carried on this work to ensure that 
the rest of the country can have some reasonable stability in 
energy prices and availability. We will continue to do this 
work and will lead the way until energy security becomes a 
reality for our country.
    In conclusion, I wish to request again that Administrator 
Jackson and her Agency continue to carefully review the science 
associated with requiring refineries to blend E-15 in their 
stock. It is estimated that in just a few short years, every 
gallon of gasoline sold in the United States will be at least 
blended to E-10 levels. This blend wall, as it is called, means 
that refiners will no longer be able to comply with the 
renewable fuel standard as established by law. I ask that the 
Administrator use her authority to reduce the blending 
requirements rather than force refiners to blend higher levels 
of ethanol in their commercial-grade gasoline. This move could 
have serious consequences, such as voiding some car and green 
engine warranties, which in turn lead to costly legal liability 
battles. Also, the high organic content of E-15 is known to 
increase the nitrogen and sulfur oxide, the nox and sox, 
emissions.
    Biofuels represent a strong part of the solution to our 
domestic energy needs, but balancing those needs with the 
impact on our existing economy is critical, and I thank the 
Administrator for giving this due consideration. And I again 
thank the Chairman for his time.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Illinois, Mr. 
Shimkus.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. Thank you, Mr. Chairman.
    And Administrator Jackson, welcome. We had a chance to 
visit about a year ago at the Illinois delegation luncheon, and 
I offered my assistance on an energy security approach that I 
think would meet some of your goals and objectives. I still 
offer that and look forward to working with you when you take 
me up on that offer.
    I am glad I followed my friend, Charlie Melancon, because 
you have a competing view on what we have done on renewable 
fuels, and I am going to use the opening statement to just pose 
a series of questions and talk about this, because I obviously 
have another issue I want to talk to once we get the questions.
    According to you, 65 percent of the gasoline in the United 
States is consumed by 2001 vehicles or newer. It has been 
widely reported that you are considering partially approving E-
15 for 2001 model cars and newer, which I support. But there is 
a concern with this in that splitting the automobile population 
on an improved blend versus addressing the entire fleet--
because you look at the capital expense that would be 
incurred--I think it is safe to say that many people would not 
do the expansion that is needed in infrastructure if you are 
only going to be able to address 65 percent of the fleet. So I 
will have a written question to ask for comments on that, and I 
think that is an issue that needs to be considered.
    The U.S. imports roughly 65 percent of petroleum today. 
This is an energy security hearing. Ethanol currently is about 
8.4 percent of the gasoline pool. It is the only thing we have 
done to decrease our reliance on imported crude oil, and it has 
had great success. And we have displaced 12 billion gallons of 
imported crude oil by using renewable fuels.
    Now, the interesting thing is that, because of the blend 
wall, we are producing ethanol and we are exporting it 
overseas. So if we want to continue to decrease our reliance on 
imported crude oil, why would we have an arbitrary limit that 
now forces us to export the ethanol, versus continuing to use 
the ethanol to decrease our reliance on imported crude oil? We 
are exporting to India, South Korea, and the EU, while we are 
still importing oil from Venezuela. This seems 
counterproductive.
    And I know that is why we are pushing, and I do appreciate 
your looking at the E-15. But that is also a reason why we 
think that looking at E-11 or E-12 for the entire fleet versus 
this bifurcation aspect of the 2001 vehicles and above might be 
an even more credible solution to addressing and decreasing our 
reliance on imported crude oil. It is good for the country, it 
is good for our energy security, it is good for farm income, it 
is good for rural America, it is good for jobs.
    And I thank the chairman, and I yield back the balance of 
my time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentlelady from California, Ms. Matsui.

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Matsui. Thank you, Mr. Chairman, for calling today's 
hearing. I would also like to thank Administrator Jackson and 
the rest of the witnesses for appearing before us today.
    I commend the EPA for establishing a greenhouse emissions 
standard for cars and light trucks, and for finalizing a 
renewable fuels standard, which, as Administrator Jackson 
rightly points out in her testimony, are inextricably linked to 
reducing our dependence on oil and cutting emissions of 
greenhouse gas.
    As we all know, oil provides more than 40 percent of all 
energy consumed and 97 percent of the energy used for 
transportation. However, it is crucial that we advance policies 
that lessen our carbon footprint, curtail harmful emissions, 
create jobs, and safeguard the physical and energy security of 
our Nation. In doing so, we will preserve and even improve upon 
our current way of life.
    To become less reliant on fossil fuels, Americans must 
embrace clean technology, clean fuels, and new ways to cut 
emissions. If we succeed in doing that, we will improve our 
manufacturing base and regain our competitive advantage in the 
global economy.
    Toward that end, I recently convened a clean technology 
regional summit in Sacramento and brought together clean-tech 
companies, nonprofits, utilities, colleges, and businesses to 
discuss ways in which they are fostering cooperative 
relationships and strategic partnerships to deepen the region's 
ongoing efforts to become a clean-tech capital.
    On top of Sacramento's leadership as an environmental and 
metropolitan planning model for the State of California, this 
summit demonstrated the region's vision to achieving greater 
energy dependence.
    Our Nation must also aspire to be the world leader in 
producing and exporting clean technology, and the President has 
repeatedly expressed this goal. Unfortunately, the United 
States still lags behind many of our international competitors 
in expanding our clean-tech industry, particularly in exports 
abroad.
    Just yesterday, I, along with Representatives Rush, 
Dingell, and Eshoo, introduced legislation, H.R. 5156, the 
Clean Energy Technology Manufacturing and Export Assistance 
Act, that would provide domestic manufacturing and foreign 
export assistance to boost the competitiveness of the U.S. 
clean-tech industry here at home and in the international 
marketplace.
    It is critical that our Nation become the leader in 
manufacturing and exporting clean technologies, not one that 
becomes increasingly dependent on foreign energy products. This 
legislation will enhance our standing in the clean energy race.
    I look forward to working closely with my colleagues, 
stakeholders, and other advocates to move the United States 
towards a more efficient energy economy that utilizes clean-
tech manufacturing and lessens our dependence on the oil.
    I yield back the balance of my time.
    Mr. Markey. The gentlelady's time has expired.
    The chair recognizes the gentleman from Pennsylvania, Mr. 
Pitts.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. Thank you, Mr. Chairman. I would like to thank 
you for convening the hearing today on such an important issue.
    Like all of us, I believe that we should work to decrease 
the amount of greenhouse gas emissions in our atmosphere and we 
should be good stewards of this Earth and its resources. In 
addition, I think it is imperative that the United States 
become increasingly energy independent. The United States needs 
to produce far more clean energy from sources that do not rely 
on the whims of unfriendly nations in far-off regions of the 
world.
    Fundamentally, cutting carbon emissions through punishment, 
taxation, and the heavy hand of big government will only 
cripple our economy and send more jobs overseas; and I fear 
recent EPA actions and the enactment of cap-and-trade 
legislation would do just that.
    Instead, we should be encouraging a clean energy economy 
through innovation and encouragement and entrepreneurship. If 
we want to reduce our dependence on oil, I strongly believe 
that our clean and green energy future is a nuclear future. And 
with this goal in mind, I have introduced the SAFE Nuclear Act 
which stands for Streamline America's Future Energy. The bill 
provides for a regulatory process that will encourage an 
increase in the production of this clean alternative energy.
    Nuclear energy is a viable, clean alternative that can help 
strengthen America's energy infrastructure. Now, nuclear power 
can reduce our dependence on foreign sources of energy and 
reduce the emissions that come from burning fossil fuels. And 
my bill would provide an additional path in the regulatory 
process that allows for the approval of new nuclear reactors on 
or adjacent to an existing site without jeopardizing safety.
    Though we may not all agree on issues like cap-and-trade 
and EPA actions, we can all agree that we need to find a way to 
produce the energy that fuels our lives in a way that is 
environmentally friendly and sustainable. Nuclear power fits 
that description, and the SAFE Nuclear Act will go a long way 
toward making that safe, clean future a reality. I thank you 
for the time and yield back.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Texas, Mr. Green.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman, for holding the hearing 
today on the clean energy policies that reduce our dependence 
on oil. And I would also like to welcome Administrator Jackson 
and the other panelists to our committee this morning.
    Coming from Texas, we are the Nation's leader in renewable 
energy production and the pioneering and developing of its own 
State portfolio standard. I support efforts to promote 
renewable energy production that meets the unique circumstances 
and resources of each State. However, with increases in 
renewable energy, the Energy Information Administration found 
that oil and natural gas and coal will continue to make up a 
large majority of U.S. energy use, even to 2030 and beyond.
    If we are to reduce dependence on foreign oil, we must 
explore and produce more domestically, along with all our 
alternatives that we are investing in. We cannot drill our way 
out of our energy needs, but we cannot ignore the benefits that 
America gains with responsible domestic production. These 
benefits include reduced reliance on foreign imports, increased 
economic growth, new high-paying jobs, additional Federal and 
State revenues, and improved ability to meet our clean energy 
goals. That is why I strongly support increasing diversifying 
domestic production in the areas like Alaska's North Slope, the 
Gulf of Mexico, Federal lands in the West and the Outer 
Continental Shelf.
    I also supported the efforts to raise fuel economy 
standards in vehicles, to provide tax incentives for consumers 
to purchase fuel-efficient vehicles, extend tax incentives for 
renewable energy, increase energy efficiency standards for 
buildings and appliances, and promote public transit efforts. 
Several of these initiatives are part of last year's Recovery 
Act and the Energy Independent Security Act of 2007. They are 
working well. I will continue to support programs seeking to 
create cleaner energy technologies, because we all benefit from 
a cleaner environment.
    Finally, while I have you here, Administrator Jackson, I 
appreciate the working relationship that we have, but also 
applaud the administration brokering an agreement to provide 
the auto industry with one national program for fuel economy 
and greenhouse gas emissions, which was supported by the 
States, environmental advocacy groups, and the auto industry.
    And I would be remiss if I didn't also mention the work we 
are doing with EPA on the Superfund site that is in our 
district in East Harris County that our regional EPA is moving 
very fast to try to contain a problem that has been there for 
40 years. I know this is not an easy feat. However, I want to 
emphasize my opposition to the EPA regulating greenhouse gases 
from large stationary sources under the endangerment finding. 
It is my hope that Congress will send the President legislation 
to set parameters to help regulate emissions with minimal 
disruption to our economy.
    And, Mr. Chairman, again, thank you for calling this 
hearing. I yield back the balance of my time.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Texas, Mr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman. I appreciate the 
Administrator being here. It is so rare we have anyone from the 
administration come to our committee. I will save my time for 
questions, and I yield back.
    Mr. Markey. We thank the gentleman very much.
    The Administrator has been before our committee before. And 
I would just note that the Administrator of the EPA did not 
appear before our committee from 2001 to 2006, when the 
minority was then in the majority. So that was, without 
question, an unprecedented period of time without having the 
EPA Administrator appear before the committee of jurisdiction. 
That cannot be said about this Administrator. That was the most 
successful witness protection program in history.
    Let me now turn and recognize the gentlelady from 
California, Mrs. Capps.

   OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Capps. Thank you, Mr. Chairman, for holding today's 
hearing; especially welcome again to the Administrator of the 
EPA. And I want to associate myself as well with the remarks of 
my colleague Mr. Melancon regarding the tragedy off the coast 
of Louisiana.
    Today our economy relies on fossil fuels for energy, and 
every day we pay a price, many prices. And volatile prices 
starts instability and unnecessary pollution. We simply must 
change this untenable situation. The best way to beat this 
addiction is to reduce overall demand, promote renewables, and 
develop alternatives.
    Putting more attention on the potential of clean energy is 
something that I and others on this side of the aisle have been 
advocating for years. And since America is not exactly awash in 
natural oil and gas, reducing our dependence on them would be 
good not only for our environment but for our economy and 
perhaps, most importantly, for national security.
    But, to be honest, we have to do more than talk about the 
potential that renewables and alternative energy has for this 
country. We have to put into place more funding for programs to 
bring these energy sources to market, and we have to make 
changes in energy policy to encourage their use. That is 
exactly what Democrats have done in the last 3 years.
    We have enacted legislation, the Energy Independence and 
Security Act, and the Recovery Act, to provide an immediate 
jolt to the clean energy economy to create jobs and enhance our 
long-term competitiveness by reducing our oil dependence. At 
the same time, the House has passed legislation to establish a 
cap-and-trade system for global warming pollution. This bill 
has the potential to provide trillions of dollars in revenue 
that could be used, among other things, to provide money for 
investment in clean energy and tax relief for American families 
facing economic hardship.
    Mr. Chairman, we know what we need to do: Accelerate our 
economic recovery in the short term, ensure our long-term 
prosperity. Developing clean power and energy-efficient 
technologies while combating global warming are initiatives 
that meet these goals.
    Americans want real, meaningful solutions to our Nation's 
energy challenges. Unfortunately, the leadership under the last 
administration was driven by a fuel desire to drill our way 
toward energy independence, and did that by lavishing huge tax 
breaks on big oil, paying much less attention to reducing 
demand, renewables, and alternative energy. Their great plan, 
95 percent implemented, resulted in volatile energy prices, 
$500 billion in oil company profits, and an economy on the 
brink of collapse. Those of us who opposed the Bush-Cheney plan 
did so because we knew this was the likely result.
    We do have a better idea, one that meets today's crisis and 
transitions us to a new future. It is time to put taxpayer 
funds to a more productive use, jump-start investments of 
energy efficiency, renewables, alternative energy, all of which 
will reduce our oil dependence.
    Mr. Chairman, this issue will be the defining measure of 
our future economic standing and our international security 
over the next century. I believe we should all take this 
opportunity to work together to achieve this energy 
independence for our country.
    Thank you. And I yield back the balance of my time.
    Mr. Markey. The gentlelady's time has expired.
    The chair recognizes the gentleman from Alabama, Mr. 
Griffith.
    Mr. Griffith. Mr. Chairman, I will waive my opening 
statement and reserve my time.
    Mr. Markey. The gentleman will be able to reserve his time.
    The chair recognizes the gentleman from Florida, Mr. 
Stearns.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Stearns. Mr. Chairman, thank you.
    The endangerment finding that many of us feel was rushed 
into existence by the EPA really has many of us concerned about 
what the economic impact of this would be. It allows, of 
course, the EPA to impose the first ever Federal tailpipe 
standards for greenhouse gases. That is estimated to cost about 
$52 billion and require the largest industrial sources to 
install the best available control technology. I mean, that 
term itself, ``the best available control technology,'' I don't 
think Administrator Jackson, have you yet defined what this 
means and whether it is available?
    When you look at the impact of this, it is not going to 
affect just the auto industry and large industrial sources; you 
are going to regulate greenhouse emissions from aircraft, 
ocean-going vessels, nonroad engines and vehicle sources, 
cement plants, fuels, petroleum refineries, utility boilers, 
oil and gas production, landfills, and even animal feed 
operations.
    So, since 85 percent of the U.S. economy runs on fossil 
fuels that emit carbon dioxide, imposing a CO2 tax 
is equivalent to placing an economy-wide tax on energy use. I 
think that is what many, at least on this side of the aisle, 
are concerned about, the economic impact.
    Now, according to the Heritage Foundation Center for Data 
Analysis, the economic effects of carbon dioxide regulation 
would result in cumulative gross domestic product losses--and 
these are their figures--of $7 trillion by the year 2029, and 
single-year GDP losses exceeding $600 billion.
    So when you think about the impact of this, with a weak 
economy, with high unemployment, I think that has many of us 
concerned. It hit particularly hard on manufacturing, which 
manufacturing provides the better jobs. And so job losses in 
some industries could exceed 50 percent with this.
    So I think, regardless of what one's view might be on 
carbon dioxide and global warming, I think perhaps both sides 
of the aisle can agree that this would have huge economic 
impact. And companies obviously will innovate and try to work 
through this, but are they going to make long-term capital 
investments, waiting to see what the Administrator is going to 
do?
    And so when the EPA uses such language as ``best available 
control technology,'' if I was to invest in, let's say, a 
cement plant or I was going to do something in oil and gas 
production, or I was going to do something in aircraft or even 
animal feed operations, I would want to know what your 
regulations are going to be and how am I going to be impacted, 
before I invest a lot of my money.
    So I think you have put sort of a pale over the economy 
with this. And I think we need to, through this subcommittee, 
Mr. Chairman, work with commonsense energy solutions that will 
encourage domestic energy production and create jobs, and be 
careful of instituting this endangerment finding.
    Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time that has expired.
    The chair recognize the gentleman from New York, Mr. Engel.

 OPENING STATEMENT OF HON. ELIOT L. ENGEL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. Engel. Thank you, very much, Mr. Chairman. I want to 
thank you for holding this important hearing and our witnesses 
for contributing their expert testimony. I look forward to 
hearing Ms. Jackson's testimony.
    We all know that we must break our addiction to oil. It has 
weakened our economy, it has transformed our wealth into 
nations and individuals who wish us harm, placed our troops in 
dangerous places, and damaged our environment. The U.S. 
consumes 25 percent of the world's oil production, yet controls 
less than 3 percent of an increasingly tight supply. Three-
quarters of world's reserves are in OPEC Nations and in 2008 
the U.S. sent roughly $440 billion overseas to pay for imported 
oil.
    These economic and national security problems are enabled 
by the simple fact that oil provides more than 96 percent of 
the fuel for our transportation sector. It is really a transfer 
of wealth. Unless we act now the problem will continue to 
worsen.
    We should be doing the following: First, we should continue 
to increase the efficiency of our cars and trucks. Making fuel 
economy improvements in our existing vehicles will not break 
our addiction to foreign oil, but it will reduce our overall 
consumption.
    Secondly, we must force petroleum to compete with other 
fuels. There are many ways to do this and we should use them 
all. T. Boone Pickens has recommended switching to natural gas 
for fleet vehicles such as buses and taxis and for interstate 
trucking. These vehicles can run on natural gas and would only 
require new pumps at a few central locations and interstate 
truck stops. We should deploy drop-in fuels produced from waste 
and algae. These fuels can mix freely gasoline and diesel in 
existing vehicles.
    We should enact an open fuel standard that would require 
all new gasoline using vehicles to be flex-fuel vehicles, 
capable of running on gasoline, ethanol or methanol. I argued 
when we passed our global warming bill that that should have 
been in the bill, and it should have been and hopefully it will 
be when we get to a finished product. This cheap and simple 
modification uses technology that already exists. Brazil 
accomplished it easily several years ago. Methanol made from 
natural gas can be produced for around $1.20 a gallon of 
gasoline equivalent today.
    Thirdly, we should move to electrify automotive 
transportation. I have worked with my friends at Better Place 
several years now and I am eager to hear about their progress 
from Mr. Wolf on the second panel today.
    Basically we need to have a more balanced energy policy and 
a policy that relies so heavily on gas, on gasoline, is not one 
that can be sustained. We can really never be totally free with 
our national security as long as we rely on despots like Hugo 
Chavez or the Saudi royal family for our energy supplies. We 
need to move and we need to do it quickly.
    Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Arizona, Mr. 
Shadegg.

OPENING STATEMENT OF HON. JOHN B. SHADEGG, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Shadegg. Thank you, Mr. Chairman. And I will try to 
keep my remarks brief. I want to associate my comments first 
with Mr. Melancon. I believe it is in America's interest to 
pursue all energy sources and particularly to appreciate the 
domestic energy we have produced, including oil, natural gas, 
and other sources of energy as well as coal.
    I am concerned about the topic that my colleague Mr. 
Shimkus raised, and that is the issue of increasing the ethanol 
blend. I have introduced legislation to require that no 
increase in ethanol be permitted until the safety of ethanol is 
studied in certain pieces of power equipment. I think that is a 
legitimate concern. There is a very real danger of that when 
ethanol blends go above 10 percent, we do not know what impact 
they will have on the safety of chainsaws and other pieces of 
equipment or on the reliability of many small motors, including 
outboard motors and marine engines, and it would be 
particularly unfair if we moved to those new blend standards 
and the cost of doing so is imposed on the American public 
either financially or in terms of safety risk because the 
equipment was not designed to run on those fuels.
    I do commend the EPA for its work, but I disagree with its 
endangerment finding. I believe it is based largely on the IPCC 
report, which was the result of almost 2 decades worth of 
research; however, tragically that research has now been very 
much placed in doubt. The IPCC report daily is criticized for 
new errors in its findings. It is found to have exaggerated the 
sea level rise in Bangladesh due to climate change because it 
failed to take into account sediment from the Himalayan rivers, 
it based claims on African crop year that were not peer 
reviewed, it erroneously claimed that the Himalayan glaciers 
might melt by 2035, it based claims on drought in the Amazon 
forest in a report that did not even study drought, and it also 
used as a basis for temperature predictions apparently data 
that does not even exist.
    Most recently, a study found that 21 of 44 chapters of the 
IPCC report would receive an F if graded on the grading system 
used in American schools because the papers relied upon and 
included newspaper clippings, newsletters, and press releases 
and not peer reviewed literature.
    It seems to me, and I will conclude with this, that when a 
nation decides to pursue massive public policy on the scale 
that we are talking about, it is absolutely critical for us to 
have the support of the American public behind us and not to 
impose very costly regulations on the economy that could cost 
jobs and damage our citizens without being sure that the 
science is right.
    And so I would simply urge that we continue to look 
carefully at the science, that if we decide to draw a policy 
based on that science that we in fact can assure ourselves and 
can rely confidently on it being accurate and reliable so that 
we can win the support of the people. They do not want to see 
us enact legislation based on political will and not based on 
sound science.
    With that, Mr. Chairman, I yield back.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from New Jersey, Mr. 
Pallone.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Chairman Markey, for having this 
important hearing and I am excited to have our EPA Commissioner 
Lisa Jackson here with us this morning. I have known Lisa from 
her days as Commissioner of the New Jersey Department of 
Environmental Protection and she has dedicated her life's work 
to protecting the environment and making our country a 
healthier place to live, and I want to welcome her here today 
to testify.
    I also want to mention, I know you mentioned about her 
being available, I remember very early in her tenure when she 
invited us down on the TSCA reform meeting, a bipartisan 
meeting. I think it was the first time I had ever been in the 
EPA Administrator's office in my 22 years here. So she is 
definitely trying to reach out on a bipartisan basis, and I 
appreciate that.
    Now we are here today to discuss the importance of 
developing clean energy policies that could reduce our 
dependence on oil. The U.S. Consumes 25 percent of the world's 
oil production but our country only contains 2 percent of the 
world's oil reserves. We waste a billion dollars a day buying 
foreign oil, and this money all to often winds up in the 
pockets of nations with hostile views of the United States. 
This hurts our economy, helps our enemies and puts our security 
at risk.
    We must put an end to our addiction to oil, and the best 
way to do this is to pursue aggressive clean energy policies 
with all the tools we have available. And this includes 
enacting a comprehensive climate change bill into law this year 
and allowing our Federal agencies such as the EPA to use their 
authority to regulate emissions and incentivize clean energy 
development.
    We must focus on clean energy policy such as wind power and 
regulation of global warming emissions rather than expanded 
offshore drilling that can cause tremendous harm to our 
environment. I am extremely troubled by the offshore oil rig 
which caught fire and ultimately sank off the coast of 
Louisiana last week. This is turning out to be one of the 
world's worst oil spills. And it is clear that offshore 
drilling cannot be done in a way that sufficiently protects 
America's coasts.
    And I respectfully request that the President and the 
Interior Secretary reassess their position on offshore oil. 
This disaster in the Gulf of Mexico only underscores the need 
for comprehensive clean energy policy. We must focus our 
efforts on wind and hydro power, which are some of the cleanest 
and safest forms of renewable energy.
    I want to commend the EPA and Administrator Jackson for all 
the work that they are doing to regulate vehicle emissions and 
stationary power sources through the endangerment finding. This 
plan will save the U.S. 1.8 billion barrels of oil over the 
life the vehicles purchased between 2012 and 2016.
    Once again I would like to thank the chairman for convening 
this hearing, especially for inviting the Administrator Lisa 
Jackson, who again has been out front on so many of these 
issues and you look forward to her testimony, thank you.
    Mr. Markey. Great. The gentleman's time has expired.
    The chair recognizes the gentleman from Louisiana, Mr. 
Scalise.

 OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF LOUISIANA

    Mr. Scalise. Thank you, Mr. Chairman. I share the 
sentiments of my colleague from Louisiana. Our prayers are with 
those families of the 11 rig workers who lost their lives. I 
urge the U.S. Coast Guard to move swiftly and use everything in 
their power to contain and clean up the spill and investigate 
the causes of the explosion so we can prevent this terrible 
tragedy from happening again.
    As we hear today from Administrator Jackson, I would hope 
that we have an opportunity to discuss the administration's 
plans for creating a national energy policy as well as the 
effects that many of the recent EPA restrictions would place on 
our country's economic and national security.
    I have long advocated for a comprehensive national energy 
policy that takes an all-of-the-above approach, incorporating 
efficiency measures, promotion of new energy technologies, 
development of renewable energies, and also making sure that we 
continue to expand our development of our own natural resources 
at home.
    This administration, however, has taken a different 
approach with restrictive energy policies. Unfortunately, we 
have seen attempt after attempt by this administration to 
restrict our ability to invest in our own natural resources. 
From recent threats by EPA to regulate greenhouse gas emissions 
to essentially halting the major development of natural gas 
with restrictions on hydraulic fracturing, what we are seeing 
is a recipe for making our country more dependent on Middle 
Eastern oil while killing off millions of American jobs.
    Before this administration places severe and economically 
devastating restrictions on domestic production of our own 
natural resources, it is incumbent to find ways to reduce our 
dependence on Middle Eastern oil. About 57 percent of the 
petroleum we use in America comes from foreign sources, and 
roughly 20 percent of those imports are from Middle Eastern 
countries. This not only restricts our ability to one day 
become energy independent, but also poses potential national 
security threats to our homeland.
    Instead of Washington bureaucrats mandating harmful 
policies that would kill key sectors of our national economy 
and make us more dependent on foreign nations who want to do us 
harm, we should instead explore policies that encourage 
investments in cleaner energy technologies and innovation in 
the private sector. The ingenuity of the American 
entrepreneurial spirit is what has made our country the best in 
the world. This Congress would be wise to encourage more of 
that innovation to achieve energy independence.
    Thank you, and I yield back.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Washington State, 
Mr. Inslee.

   OPENING STATEMENT OF HON. JAY INSLEE, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF WASHINGTON

    Mr. Inslee. Thank you, it is an honor after the 40th 
anniversary of Earth Day to have a director of the 
Environmental Protection Agency here, and I just noted that we 
are kind of back to where we started, because the EPA got 
started when the Cuyahoga River caught fire in Ohio and people 
understood we had to do something about our problem. And this 
morning the headlines are the Coast Guard are thinking about 
lighting the Gulf of Mexico on fire to try to solve this 
problem. We are really back where we started.
    I want to point out that the oil slick that we are 
concerned about today is really the least of our problems about 
oil. Because there is a giant invisible oil slick caused by 
carbon dioxide that comes out of our tailpipes, that goes in 
the atmosphere, that falls in the oceans and goes into 
solution. That invisible oil slick is now causing the oceans to 
become acidic. The oceans today are 30 percent more acid, more 
acidic than they were before we started burning oil. And they 
will be much more acidic if we don't change our course.
    I want to show members if the committee what that means. If 
they put up this slide over here. This slide over here shows 
what happens when the ocean becomes acidic. When the ocean has 
more acid in it the creatures in it that take calcium carbonate 
out of the ocean and make their bodies can't do that anymore. 
This is a picture from NOAA and it shows a terrapod. These are 
small little plankton-like creatures and they had a shell and 
that shell, they get the calcium out of the water to make their 
shell. The problem is as the water becomes more acidic they can 
not make that shell anymore. This is a picture of what happens 
when you put a terrapod in water that is as acidic as it will 
be in 2100 if we continue on this path, and basically what you 
will see over a period of 45 days it melts. On the left you see 
the shell is intact, it starts to melt and it basically melts 
into an indistinguishable blob in 45 days. The entire food 
chains of the ocean are in danger because of the oil and coal, 
because they are making our oceans more acidic. And the 
scientific community believes there may not be healthy corals 
anywhere in the world by the end of the next century because of 
this acidic problem.
    So the oil slick we are worried about today is the least of 
our problems. The fact that our oceans may be dead in 100 years 
or full of weeds rather than beautiful corals is a significant 
issue why we should be addressing this. Basically what the 
scientists are telling us, unless we have a sea change in 
energy policy we may be killing the seas.
    So I think this hearing is an appropriate one to have. We 
know about the national security ramifications of giving $100 
million a day to Iran of American money, but we have another 
security and that is the protein we get out of the seas, and I 
hope that we can come up with a policy on comprehensive basis 
to solve this problem.
    Thank you.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentlelady from California, Mrs. 
Bono Mack.
    Mrs. Bono Mack. Thank you, Mr. Chairman. I will waive and 
submit my statement for the record.
    Mr. Markey. The gentlelady waives.
    The gentleman from an Oklahoma, Mr. Sullivan, is 
recognized.

 OPENING STATEMENT OF HON. JOHN SULLIVAN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF OKLAHOMA

    Mr. Sullivan. Thank you, Chairman Markey. I appreciate you 
holding this hearing today on clean energy policies that reduce 
our dependence on oil. I am pleased to welcome Lisa Jackson, 
Administrator of the EPA, today. I look forward to her 
testimony and any developments on the foreseeable economic 
impacts that EPA CO2 endangerment findings and 
pending regulations will have on the U.S. economy.
    If allowed to go into affect, the CO2 
endangerment finding will impose a backdoor energy tax on the 
American people. By giving the agency unprecedented regulatory 
authority over almost every foreseeable aspect of our economy, 
burdening thousands of small businesses with unnecessary and 
costly compliance expenses and higher energy costs for American 
families while doing little to protect the environment.
    With our national unemployment rate at 10 percent, this is 
the worst possible time for this administration and the EPA to 
impose unnecessary job killing energy mandates on the American 
people.
    I am also interested in our witnesses' views on our own 
domestic oil resources and if they support the development of 
them, both on shore and off, to reduce dependence on foreign 
oil imports. According to the Congressional Research Service, 
the U.S. reserves for oil and natural gas are the largest in 
the world. I believe we must reduce foreign oil imports and 
start drilling and utilizing our oil and gas here at home.
    I look forward to the hearing, hearing the testimony of our 
witness, and I yield back the balance of my time.
    Mr. Markey. The gentleman's time has expired.
    The chair regular nieces the from a from California, Mr. 
McNerney.

 OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. McNerney. Thank you, Mr. Chairman, for convening 
today's hearing. It was almost a year ago that our committee 
favorably reported the America Clean Energy and Security Act, 
and I am grateful for this opportunity to evaluate the new 
policy proposals. Vigorously pursuing well crafted, clean 
energy policies is a matter of national security, economic and 
environmental concern. Investing in new energy technologies and 
energy efficiency improvements has tremendous potential to 
create high quality jobs, and I have seen this job creation 
potential firsthand through my experience in developing wind 
power and smart grid technologies.
    Even during tough economic times communities in my district 
in California are attracting cutting edge clean energy 
businesses that are creating good jobs. For example, an 
electric vehicle manufacturing facility just opened up in 
Stockton, California and is hiring new workers. Similarly, the 
Port of Stockton is doing significant business with wind 
turbine parts, creating jobs at our docks. There are tremendous 
opportunities for further job growth in the clean energy 
sector, but to harness that potential we need to continue to 
evaluate and recalibrate Federal policies.
    I would also like to note the compelling national security 
benefits of pursuing policies to expand America's use of 
domestically produced energy resources. Over the last 2 years 
our country has spent about a billion dollars a day overseas 
for oil imports, some of which will flow to countries that are 
unfriendly to our interests. Comprehensive international action 
to invest in clean energy resources would prevent millions of 
dollars a day from flowing to Iran. Clearly we have a 
compelling security interest in aggressively pursuing energy 
independence.
    Mr. Chairman, I thank you again for convening today's 
hearing and look forward to hearing from our witnesses.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Pennsylvania, Mr. 
Doyle.
    Mr. Doyle. I am waiving.
    Mr. Markey. The gentleman will waive. His testimony will be 
added to the question period.
    The chair does not see any other members seeking 
recognition at this time.
    Mr. Upton. Mr. Chairman, I just might ask unanimous consent 
for those members who are not here that they might be able to 
put a statement into the record.
    Mr. Markey. Without objection, so ordered.
    We will now turn to our witness and while also making--
before that I will make a unanimous consent request that Mr. 
Latta and Mr. Murphy, both members of the full committee but 
not on the subcommittee, have asked for permission to 
participate in the witness questioning after each member of the 
subcommittee has completed their questioning. Without 
objection, so ordered.
    Let's turn to our extremely distinguished witness, and we 
thank her for coming back to the Energy and Commerce Committee. 
She is EPA Administrator Lisa Jackson. Before becoming EPA's 
Administrator, she served as Chief of Staff to the Governor of 
New Jersey and Commissioner of the State of New Jersey's 
Department of Environmental Protection. Ms. Jackson is a summa 
cum laude graduate of Tulane University in Louisiana and earned 
a Master's degree in chemical engineering from Princeton 
University.
    We are delighted to welcome you back to the committee, 
Administrator Jackson. Whenever you feel comfortable, please 
begin.

     STATEMENT OF THE HON. LISA P. JACKSON, ADMINISTRATOR, 
                ENVIRONMENTAL PROTECTION AGENCY

    Ms. Jackson. Well, thank you. Chairman Markey and Chairman 
Waxman, Ranking Members Upton and Barton, Chairman Emeritus 
Dingell, and members of the committee, thank you for inviting 
me to testify about the Environmental Protection Agency's work 
to reduce America's oil dependence and greenhouse gas 
emissions. That work stems from two seminal events.
    First, in April 2007, the U.S. Supreme Court concluded in 
Massachusetts v. EPA that the Clean Air Act's definition of air 
pollution includes greenhouse gases. The Court rejected then 
Administrator Johnson's refusal to determine whether that 
pollution for motor vehicles endangers public health or 
welfare.
    In response to the Supreme Court's decision and based on 
the best available science and EPA's review of thousands of 
public comments, I found in December 2009 that motor vehicle 
greenhouse gas emissions do endanger Americans' health and 
welfare.
    I am not alone in reaching that conclusion. Scientists of 
the 13 Federal agencies that make up the U.S. Global Change 
Research Program have reported that unchecked greenhouse gas 
emissions pose significant risk to the well-being of the 
American public. The National Academy of Sciences has stated 
that the climate is changing, that the changes are mainly 
caused by human interference with the atmosphere, and that 
those changes will transform the environmental conditions on 
Earth unless countermeasures are taken.
    The second pivotal event was the agreement President Obama 
announced in May 2009 between EPA, the Department of 
Transportation, the Nation's auto makers, America's auto 
workers and the State of California to seek harmonized, 
nationwide limits on the fuel consumption and greenhouse gas 
emissions of new cars and light trucks.
    My endangerment finding in December satisfied the 
prerequisite in the Clean Air Act for establishing a greenhouse 
emission standard for cars and light trucks of model years 2012 
through 2016. So I was able to issue that final standard 
earlier this month, on the same day that Secretary of 
Transportation Ray LaHood signed a final fuel efficiency 
standard for the same vehicles.
    Using existing technologies, manufacturers can configure 
new cars and light trucks to satisfy both standards at the same 
time. And vehicles complying with the Federal standards will 
automatically comply with the greenhouse gas emissions standard 
established by California and adopted by 13 other States. This 
harmonized and nationally uniform program achieves the goals 
the President announced last May. Moreover, the EPA and DOT 
standards will reduce the lifetime oil use of recovered 
vehicles by more than 1.8 billion barrels. That will do away 
with more than a billion barrels of imported oil, assuming the 
current ratio of domestic production to imports does not 
improve.
    The standards also will eliminate more than 960 million 
metric tons of greenhouse gas pollution, but if Congress now 
nullified EPA's finding that greenhouse gas pollution endangers 
the American public, that action would remove the legal basis 
for a Federal greenhouse gas emissions standard for motor 
vehicles. Eliminating the EPA standard would forfeit one-
quarter of the combined EPA, DOT program fuel savings and one-
third of its greenhouse gas emissions cuts.
    California and the other States that have adopted 
California's greenhouse gas emission standard would almost 
certainly respond by enforcing that standard within their 
jurisdictions, leaving the automobile industry without the 
nationwide uniformity that it has described as vital to its 
business.
    I would like to mention one more action that EPA has taken 
to reduce America's oil dependence and greenhouse gas 
emissions.
    In February I signed a final renewable fuel standard. It 
substantially increases the volume of renewable products, 
including cellulosic biofuel that refiners must blend into 
transportation fuel. EPA will implement the standard fully by 
the end of 2022. In that year alone the standard will decrease 
America's oil imports by $41.5 billion, and U.S. greenhouse gas 
emissions that year will be 138 million metric tons lower, 
thanks to the standard.
    EPA's recent work on vehicles and fuels shows that 
enhancing America's energy security and reducing America's 
greenhouse gas pollution are two sides of the same coin. The 
recent analysis by the Agency found that widespread deployment 
throughout the U.S. transportation sector of efficiency 
technologies and practices that exist today would cause the 
sector's oil use and greenhouse gas emissions in 2030 to be 25 
to 40 percent lower than they otherwise would be. So while we 
have started addressing the twin challenges of oil dependence 
and greenhouse gas pollution, we clearly have the potential to 
go farther and accomplish more.
    Thank you again for inviting me to testify. I would be 
happy to answer your questions.
    [The prepared statement of Ms. Jackson follows:]
    [GRAPHIC] [TIFF OMITTED] 76568A.007
    
    [GRAPHIC] [TIFF OMITTED] 76568A.008
    
    Mr. Markey. We thank you very much for your testimony, and 
now we will turn to questions from the subcommittee members. 
The chair will recognize himself.
    Isn't it true that the Supreme Court decision in 
Massachusetts v. EPA required the EPA to determine whether an 
endangerment finding should be made for global warming 
pollution from cars and trucks?
    Ms. Jackson. Yes.
    Mr. Markey. Isn't it also true that your predecessor in the 
Bush administration, Stephen Johnson, reviewed the science and 
approved a draft endangerment finding that found the global 
warming pollution endangers the public welfare?
    Ms. Jackson. Yes, sir, that is true.
    Mr. Markey. Isn't it true that the EPA's proposed 
endangerment finding made by Stephen Johnson was sent to the 
White House in December of 2007 and that the Bush 
administration's EPA also developed a regulatory framework for 
greenhouse gas emissions under the Clean Air Act?
    Ms. Jackson. Yes, that has been established as true.
    Mr. Markey. And isn't it true that the White House refused 
to even open EPA Administrator Johnson's e-mail? And isn't it 
true that nothing further happened until you conducted a review 
of the science and submitted your endangerment finding to the 
Obama White House, which actually opened the e-mail?
    Ms. Jackson. That is true.
    Mr. Markey. Now some critics have raised numerous questions 
about the accuracy of climate science over the last 6 months, 
including questions about whether the Himalayan glaciers will 
melt or whether the Amazon will dry out. Were any of these 
specific studies used to determine whether greenhouse gas 
pollution endangers public health and welfare in this country?
    Ms. Jackson. No, because the endangerment finding was 
focused on impacts to this country and to the welfare and 
health of Americans. None of those two studies that you 
mentioned and the errors that were found in those reports 
impacted endangerment findings.
    Mr. Markey. So give us a couple of key findings that you 
made relating to how changes and climate effect the United 
States that led to your decision.
    Ms. Jackson. Certainly. Sea level rise, increased threats 
of droughts, changes in our climate that would have dramatic 
impacts on agriculture and productivity, increased severe 
weather impacts, and I think even the acidification issues that 
we heard earlier all factored into my determination of 
endangerment.
    Mr. Markey. And so your decision was based upon the impact 
on the United America of America?
    Ms. Jackson. That is correct, absolutely.
    Mr. Markey. So whatever other information is out and being 
debated about the Himalayas or other parts of the world, that 
was not what your findings relied upon?
    Ms. Jackson. That is correct.
    Mr. Markey. Now, could legislative efforts to overturn the 
endangerment finding also have the effect of overturning EPA's 
car and light truck standards that you just finalized with the 
Department of Transportation, the ones that are supported by 
Ford, General Motors, Chrysler, the United Auto Workers, and 
that also reduce the need for 2 million barrels of oil per day, 
could legislative efforts to overturn the endangerment finding 
legislatively impact that decision?
    Ms. Jackson. Yes, I believe legislation that overturns the 
endangerment finding would certainly not only impact, but would 
nullify the regulations you mentioned because that finding of 
endangerment is the basis for those regulations.
    Mr. Markey. So this agreement that you reached that 
everyone agreed upon would in fact be endangered by legislative 
action?
    Ms. Jackson. Yes, I believe we would take what as we heard 
here many people think is a very good thing and was a victory 
for the environment and for our energy independence and our 
security and we would lose that victory, and in fact we would 
go back to where we were before, which was a nonuniform complex 
regulatory net that did not allow auto makers to move forward 
with certainty.
    Mr. Markey. Now, let me ask one final question and that is 
what has been the response from the automotive industry to the 
merger of the provision in the 2007 law with the finding in 
Massachusetts v. EPA and then this harmonization in terms of 
their response to their reinvention of the automobile and the 
competitiveness of our American auto industry? Could you talk a 
little bit about that and any misgivings you are hearing from 
the auto industry about moving in this direction?
    Ms. Jackson. The auto industry has come a long way. I think 
they have now embraced the certainty that one national standard 
gives them for cars from 2012 to 2026, so much so that I am 
aware that they have written asking Congress not to overturn 
the endangerment finding because----
    Mr. Markey. Can you say that again?
    Ms. Jackson. They have written asking Congress to not 
entertain legislation to overturn the endangerment finding 
because it would strip them of the very regulatory certainty 
they now have. They have also begun pretty public ruminations 
about wanting to start the next phase, to do it again, to look 
at opportunities, and we have also seen industries outside the 
passenger auto sector look for the same kind of treatment, if 
you will.
    Mr. Markey. So I think that is important for everyone to 
understand, that the United States automotive industry is 
asking that the endangerment finding not be overturned because 
it has created an investment environment that is making it 
possible for them to move forward very rapidly in creating new 
jobs here in America and becoming more competitive 
internationally.
    I thank you.
    Let me turn now and recognize the ranking member of the 
subcommittee, the gentleman from Michigan, Mr. Upton.
    Mr. Upton. Thank you, Mr. Chairman. Administrator Jackson, 
I just want to on a different issue, just want to bring to your 
attention an issue that is very important to Michigan and had 
some attention this last week. I don't know if it is crossed 
your desk yet, but my district, Kalamazoo, Michigan, is home to 
one of the largest Superfund sites in the country, Kalamazoo 
River, which is the fourth largest contributor of PCBs into 
Lake Michigan. It was labeled a Superfund site some 20 years 
ago, thousands of hours of meetings and negotiations have been 
held between State and local folks, EPA and the two PRPs 
charged with funding the clean up. Last week, Friday, Lando 
Bassett, one of the PRPs, came to a bankruptcy settlement with 
DOJ that required them to pay only pennies on the dollar for 
their obligation of the cleanup.
    I had been working very closely with Senator Levin, Senator 
Stabenow. We have been together shoulder to shoulder. We are 
preparing a letter that ought to be ready I hope by the end of 
the week to you trying to make sure that--find out what 
timetable EPA might have to ensure that the cleanup continues 
as scheduled and the health and welfare of the folks in the 
watershed is not harmed any further.
    I just want to bring that to your attention, and we look 
for your immediate response as quick as you can. I don't know 
if you are personally aware of it or not, but it is a big issue 
in southwest Michigan.
    Ms. Jackson. Yes, I am happy to look into it and get back 
to you with an idea on cleanups there.
    Mr. Upton. Great.
    I just want to say we all want to reduce our reliance on 
foreign oil, for me particularly coming from auto State. I am a 
big supporter of the electric hybrids, and I have driven the 
new Chevy Volt. I have seen an number of different cars that 
are literally going to be in the showrooms this year, and I 
know that because of that and other reasons our electricity 
needs are going to grow by 30 to 40 percent in the next 20 
years.
    And I am a believer in basic economics, particularly supply 
and demand. And as we have increased demand like we are likely 
to have and we are going to need more supply, otherwise that 
price is going to go considerably up. But sadly what I see 
coming down the line is a reduction of supply, more regulations 
in lots of different ways. I don't believe that we have the 
science yet--I am a big supporter of CCS, carbon capture, we 
will need more coal plants, clean coal, but we don't have the 
technology ready yet to impose that on not only existing but 
new power plants.
    I am wondering how many--I don't believe that EPA has 
approved any new coal--has allowed any new permitting for new 
coal plants in the last year or two.
    Ms. Jackson. The majority of the permitting actions for new 
coal plants happen through the States and at the State level. I 
would say that the reason there has been such a bottleneck in 
new coal plant permitting is litigation and a shortage of 
capital. Those are the primary reasons. There are issues with 
permitting, the permits then result in litigation, and there is 
great uncertainty about when this country will move to price 
carbon. That effects the investments markets as well as----
    Mr. Upton. They were also banking on this new technology, 
the CCS, to be in place, is that not right? Carbon capture?
    Ms. Jackson. I wouldn't necessarily agree that that is the 
driver for the permit decisions. In fact there is absolutely no 
reason why a permit decision at that point would depend on CCS, 
although I join you in hoping that technology has great 
promise. I am sure you know the President has asked me to 
cochair a CCS task force to get 5 to 10 projects up and running 
in the next few years so that we can hopefully make it 
commercially available.
    Mr. Upton. I just know as we look to try to meet these 
demands, 30 to 40 percent increase, and we are going to have to 
have more coal. We can't sit on our hands with that resource 
that is there. On the nuclear side I applauded the President 
breaking ground, I believe it was in Georgia, the two new 
reactors that he broke ground on back in February or early 
March, but I also know that we have to deal with Yucca 
Mountain. We have to deal with a high level of nuclear waste 
that has been zeroed out in their funding. And I also know as a 
supporter of renewables, wind and solar we can talk a lot about 
it, but if we don't have the resources to hook them up to the 
grid it is no good, let alone to have the backup when the wind 
and the sun don't shine, as they say.
    Ms. Jackson. Yes. The President has said that we need to 
invest in our traditional sources. We need to make sure that 
they are clean sources, so we also need to invest in the 
technologies like CCS that will address carbon pollution from 
coal, because coal is such a carbon intense fuel and has such 
high emissions.
    But I think you are right, his actions and this 
administration's actions have demonstrated a willingness to 
embrace other forms of energy, including domestic sources. The 
only thing I might add is that I think just like the cars rule 
is really an efficiency program for passenger cars, there is a 
need for us to focus as we have done in the Recovery Act and 
other places on energy efficiency, on making sure that the 
average American becomes a miser for power because we will be 
competing for power in a world marketplace that also----
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the chairman of the full committee, 
Mr. Waxman.
    Mr. Waxman. Administrator Jackson, as I understand it, this 
tailpipe rule that you have issued earlier this month would 
save 1.8 billion barrels of oil; is that correct?
    Ms. Jackson. That is right.
    Mr. Waxman. And I am thinking back over the last 30 years 
and I can't think of any law or regulation that has saved that 
much oil. Are you aware of any law or regulation that does so 
much to address our dependence on oil?
    Ms. Jackson. No, not off the top of my head, sir.
    Mr. Waxman. My understanding is that permit requirements 
for stationary sources are triggered when a pollutant is 
subject to regulation under the Clean Air Act. So according to 
that interpretation you issued on March 29, 2010, this will 
occur for greenhouse gases on January 20, 2011, when the 
control requirements of the motor vehicle rule take effect and 
then they are binding on manufacturers; is that correct?
    Ms. Jackson. That is correct.
    Mr. Waxman. Once motor vehicle rules are in effect next 
January, absent any action by the EPA, the Clean Air Act would 
require new or modified sources that emit more than 250 times 
of carbon dioxide per year to obtain a permit.
    Ms. Jackson. Right, absent any action by EPA.
    Mr. Waxman. So in effect because of the Clean Air Act when 
you deal with the mobile sources, which is what the Supreme 
Court decision addressed, that would trigger requirements for 
stationary sources for carbon pollution. I believe we all agree 
that if EPA did not take further action and these requirements 
went into effect as is, it would be a significant problem. 250 
tons is a reasonable threshold that generally captures only 
large industrial and commercial sources, but when you are 
talking about greenhouse gases it would be numerous smaller 
sources that are not regulated now and I think shouldn't be 
regulated. I think this would be an unacceptable situation, but 
thanks to your actions, we don't actually face that situation.
    Last fall you proposed a tailoring ruling to significantly 
narrow application of the permitting requirements to stationary 
sources of carbon pollution that would exclude these smaller 
sources. Can you update the committee on the status of that 
rulemaking?
    Ms. Jackson. Yes, Mr. Chairman, the rule went through 
public comment. We received a large number of public comments 
and are in the process of finalizing a rule. As you mentioned, 
it is important for us to do that in order to give assurance to 
smaller, and I would go as far as to say mid-sized sources, 
that they are not, come next January, going to be subject to 
immediate regulation and in fact we have said just the 
opposite.
    Mr. Waxman. What would the tailoring rule require? What 
would you do?
    Ms. Jackson. Right, it is not final. As we proposed it, it 
was a phase-in, it is a gradual phase-in of the larger sources, 
and I have given some hints as to what I believe will be in the 
final rule and I feel fairly comfortable saying that the final 
rule will include, come January, only those sources that are 
currently subject to Title 5 permitting for another pollutant 
to look at greenhouse gas pollution and then later in the year 
perhaps an additional number of sources would be phased in, a 
small number of very large sources. We haven't given the 
threshold as to what that would be, but it is orders of 
magnitude higher than 250 tons, the idea being that this is a 
very slow, deliberate, measured approach with a regulatory 
community quite frankly that is quite used to.
    Mr. Waxman. Is it fair to say EPA does not intend to second 
the smaller sources to Clean Air Act permitting for greenhouse 
gases any sooner than 2016?
    Ms. Jackson. That is absolutely true.
    Mr. Waxman. And just to be clear, these requirements can 
only apply to smaller sources in the future after EPA completed 
an additional rulemaking; isn't that correct?
    Ms. Jackson. That is correct.
    Mr. Waxman. Now some argue that tailoring rule may be 
overturned in court with disastrous consequences. Is your 
general counsel comfortable with the legal status for this 
tailoring rule?
    Ms. Jackson. Yes, sir.
    Mr. Waxman. Now even in the worse case scenario where the 
rule is overturned in court, wouldn't it take years before we 
could expect a final decision in the court?
    Ms. Jackson. Yes, I am not a lawyer, but I think----
    Mr. Waxman. Clean Air Act cases typically take 3 to 5 years 
before a decision becomes final. It also seems highly unlikely 
that the rule would remain in effect during any litigation. 
There would be a higher court to issue a stay. Petitioner would 
have to show a strong showing that he is likely to succeed on 
the merits and he would suffer irreparable injury absent a 
stay. It would be difficult to make this showing for a rule 
such as this that relieves burdens rather than imposing them. 
Is that what your lawyer has been saying?
    Ms. Jackson. That is absolutely right.
    Mr. Waxman. And Mr. Chairman, in my view they are taking a 
common sense approach, it is an effective approach that will 
avoid scenarios that none of us want. If Congress enacts 
comprehensive energy and climate legislation this year as I 
hope we will do, it will resolve the issue, and there is ample 
time for Congress to act on this issue in the future if and 
when it becomes necessary.
    Thank you, Mr. Chairman.
    Mr. Markey. The chairman's time has expired.
    The chair recognizes the ranking member of the full 
committee, Mr. Barton.
    Mr. Barton. Thank you. Thank you, Mr. Chairman. We are 
trying to convert centimeters to inches down here.
    Administrator Jackson, again thank you for being here. Are 
you familiar with the report that one of your employees Dr. 
Allen Karlin issued on the endangerment finding at the EPA?
    Ms. Jackson. I am familiar with the work and his desire to 
have that put into the record.
    Mr. Barton. OK. Did you read his report or a summary of his 
report?
    Ms. Jackson. I read some summaries of his report and 
ensured that my staff considered it as part of the comments.
    Mr. Barton. So you are aware that at least one person at 
the EPA is scathing the concerns about whether at that time was 
a proposed endangerment finding. One of his concerns was that 
EPA didn't do any independent analysis of some of these studies 
that were used to justify the endangerment finding. Why not, 
why didn't the EPA try to verify some of this information that 
the finding is based upon?
    Ms. Jackson. The majority of our work at EPA is done by 
looking at--I am sorry, let me start again. The endangerment 
finding work primarily relied on peer review, our standard was 
that we wanted to look at peer reviewed work and we had in 
addition to external peer reviewers a Federal team of reviewers 
who were reviewing our work.
    Mr. Barton. Some of the material apparently used were press 
releases. Is it standard operating procedure for the EPA to 
issue major findings based on a press release?
    Ms. Jackson. I believe what you are referring to, Mr. 
Barton, is that subsequent we have come to find out that there 
have been some allegations made that there were press release 
information in studies. What we did was whenever someone raised 
any questions about either the IPCC data or any of the 
underlying data, I made it clear to myself that we had 
obligation to investigate whether or not it changed the basis 
of the finding.
    Mr. Barton. I am sure you are aware that there are e-mails 
between Dr. Karlin and his superior in which Dr. Karlin is 
asking his study be considered. One of the e-mail responses is 
you don't understand, the White House has already made its 
decision, stop sending--stop working on this report. Are you 
aware of that e-mail?
    Ms. Jackson. Yes, sir, we discussed that, remember, a while 
ago on a phone call, we talked about it.
    Mr. Barton. So what is your response? He certainly was of 
the opinion that the conclusion had already been made that 
there really wasn't any real effort to do an analysis of the 
endangerment finding. And you have admitted--or your agency 
didn't do any independent studies, that you took at face value 
the material that was basically put out by the advocates were 
man-made greenhouse gases causing climate change.
    Ms. Jackson. No, sir, I don't agree with that assertion. 
The Agency's endangerment finding was based on thoroughly 
reviewed material by a number of scientific organizations. Mr. 
Karlin's and the e-mail changes we discussed. I don't know why 
his supervisor wrote what he wrote. He has been counseled, I 
did not personally do it.
    Mr. Barton. Counseled not to tell the truth, he has been 
counseled to keep his mouth shut? What has he been counseled to 
do?
    Ms. Jackson. He has been counseled not to make assertions 
that aren't factual. The endangerment finding that was begun 
under the Bush administration--this was years and years of work 
inside the Agency and Dr. Karlin's advocacy extended back into 
those days as well. The fact that he had an opinion should not 
have been shut down because someone asserted that the White 
House wanted----
    Mr. Barton. Dr. Karlin's opinion was that the EPA should 
actually do what it is supposed to do, which is try to 
independently evaluate, which has not happened.
    Now you mentioned in response to a question from Chairman 
Markey that one of the reasons that the endangerment finding 
was put forward was because of a rise in sea level. Do you know 
what the sea level rise has been in the last 100 years in the 
United States?
    Ms. Jackson. I am sure you have it, sir.
    Mr. Barton. I do. Would you want to make a guess?
    Ms. Jackson. I don't see a reason to guess.
    Mr. Barton. It is 20 centimeters. 20 centimeters. Do you 
know what the EPA estimates the reduction in sea level rise is 
going to be in the next 90 years because of your tailpipe 
standard that you have been talking about with Mr. Waxman and 
Mr. Markey? Do you have any idea what----
    Ms. Jackson. I actually never thought of it in terms of a 
reduction in sea level rise. We talk about it in terms of 
greenhouse gas emissions.
    Mr. Barton. Well, you said one of the reasons you issued an 
endangerment finding was because of rising sea level, where 
according to your own EPA scientists this tailpipe standard 
that you all talked about is going to reduce sea level rise 
over the next 9 years between 600ths to 1400ths of a 
centimeter. Now how in the world can sea level rise be used as 
an excuse for an endangerment to public health?
    Ms. Jackson. I am afraid that----
    Mr. Barton. I am just going on what you said, Madam 
Administrator.
    Ms. Jackson. Yes, but what we did in the rule that you are 
referring to is come up with a rule that reduces our dependence 
on oil, that says we can drive cars that are more fuel 
efficient and that put out less greenhouse gas pollution. That 
is what the law requires.
    Mr. Barton. My time has expired. Mr. Markey is being very 
gracious. Let me ask one more question, Mr. Chairman.
    If in fact the endangerment finding is shown to be flawed 
and is thrown out, is it not true that you cannot regulate 
CO2 under the Clean Air Act if you don't have the 
endangerment finding to give you the authority to do so?
    Ms. Jackson. There were a lot of nots in there, so let me 
make sure that I understand the question. If the endangerment 
finding is thrown out or in some way nullified, then the basis 
for the automobile rule----
    Mr. Barton. No, ma'am, the endangerment finding to regulate 
CO2 as a pollutant is--the EPA does not have the 
authority unless you have an endangerment finding giving you 
that authority.
    Ms. Jackson. Right, the endangerment finding is not a 
regulation but it is the basis for regulation of automobiles.
    Mr. Barton. Yes, ma'am. And if we don't have the 
endangerment finding--not you but the EPA does not have the 
authority to regulate CO2 as a pollutant, do you 
agree with that?
    Ms. Jackson. Right. If we don't have the endangerment 
finding, we lose the clean car rule, so it is gone, we lose any 
authority to regulate greenhouse gas emissions from motor 
vehicles.
    Mr. Barton. Thank you, Mr. Chairman. We will have a number 
of questions for the record.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Michigan, the 
chairman emeritus.
    Mr. Dingell. Thank you, Mr. Chairman. Thank you, 
Administrator, welcome to the committee.
    Am I correct in understanding that the endangerment finding 
is a legal underpinning for the national standard for 
automobile emissions?
    Ms. Jackson. Yes.
    Mr. Dingell. Now, what would happen to the national 
standard for autos if the Congress passed a resolution of 
disapproval of the endangerment finding?
    Ms. Jackson. The legal underpinning would then be gone and 
so I think that there would be no way to withstand any 
challenge to the legality of those regulations.
    Mr. Dingell. Now, what would be the practical consequences 
of that with regard to moving sources and what would be the 
practical consequence of that with regard to stationary 
sources?
    Ms. Jackson. With regard to moving sources the regulation 
would then be void. So we would go back to a situation where 
California would have the authority along with other States who 
opted in to regulate emissions from automobiles, and the 
Department of Transportation and NHTSA would do CAFE standards 
probably in accordance with ISSA and as far as stationary 
sources there would be no EPA authority to regulate stationary 
sources.
    Mr. Dingell. There would be none.
    Ms. Jackson. I believe.
    Mr. Dingell. Is there authority now to regulate stationary 
sources or is there not?
    Ms. Jackson. There is actually an obligation to--our 
reading of the Clean Air Act says there is an obligation to 
regulate stationary sources.
    Mr. Dingell. With regard to CO2?
    Ms. Jackson. Yes. Once it became a pollutant and was 
regulated and found to endanger public health and welfare, the 
Clean Air Act says now other portions of the Clean Air Act 
apply.
    Mr. Dingell. Now this is a result also of the Supreme 
Court's decision in finding an endangerment; is that right?
    Ms. Jackson. Yes, the Supreme Court's order that the EPA 
make a determination.
    Mr. Dingell. Now what is the practical result to stationary 
sources if this resolution disapproval passes the Congress?
    Ms. Jackson. The practical result to stationary sources, 
sir, would be that EPA regular--I believe, I am not a lawyer, I 
believe EPA would not be able to regular--would not be able to 
regulate stationary sources any more than mobile sources.
    Mr. Dingell. So how many different regulatory standards 
would be imposed on, first of all, stationary sources, but 
under what requirements of law?
    Ms. Jackson. Well, certainly and again not being a lawyer, 
but certainly we have already seen individual States who in 
some way are regulating greenhouse gas emissions----
    Mr. Dingell. Would they be regulated under which provisions 
of the law, would they be regulated under the State 
implementation plans, would they be regulated under some other 
section? What would be the practical effect in terms of the 
number of different regulations of the State rather than the 
stationary sources would have to meet?
    Ms. Jackson. With the caveat that I will make sure I get an 
answer from my lawyers, I am aware that States right now have 
their own State laws.
    Mr. Dingell. But the potential is for how many different--
how many different sets of regulations that they would have to 
correspond to, it would have to do State implementation?
    Ms. Jackson. Uh-huh.
    Mr. Dingell. Would there be other requirements that the 
States under the Clean Air Act would have to meet?
    Ms. Jackson. There could be individual State level--we are 
assuming the endangerment finding is gone. So the Clean Air Act 
authorities for CO2 may not be available, but many 
States are already regulating under their own laws and other 
entities are feeling the effects of litigation under nuisance 
laws, under common law.
    Mr. Dingell. How many regulations would the auto industry 
have to meet in the moving sources?
    Ms. Jackson. Oh, potentially 50 or more. Right now 13 
States had joined with California to have their own 
regulations.
    Mr. Dingell. Now the agreements with California and the 
other States that are there now held by the administration 
expires just prior to 2017; is that right?
    Ms. Jackson. That is right, it is through model year 20----
    Mr. Dingell. Are there any negotiations going to see to it 
that we have the same national standard approach going forward 
for post 2017?
    Ms. Jackson. I think it would be a stretch to say they are 
in at this time, but there has been expressions of interest 
from auto makers to begin having discussions.
    Mr. Dingell. You are telling us that there are no 
negotiations going on under the auspices of the administration 
or EPA? And can you tell us why that is not taking place? You 
have to look forward to 2017, which is just a few years off.
    Ms. Jackson. Yes. I think it is probably just a matter of 
time that we have not yet.
    Mr. Dingell. Well, let me remind you that the law--rather, 
the automobiles are manufactured with a 3, 4 and 5-year lead 
time. So if I seek correct you only have a year or so before 
you are running into a serious collision with that lead time. 
When do you propose to start these things?
    Ms. Jackson. I think we need to do it soon, sir. So I will 
get back to you with when we can commit to looking at 2017.
    Mr. Dingell. So are you telling me that you propose to go 
back on down to EPA and to start looking into that and see what 
you can do about getting these negotiations going.
    Ms. Jackson. Yes, sir.
    Mr. Dingell. Thank you.
    Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired.
    The chair has three letters from the Alliance of Auto 
Manufacturers, the International Auto Alliance, and the United 
Auto Workers, all saying they do not want the endangerment 
finding to be overturned. I ask unanimous consent that these 
letters be submitted for the record.
    Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Markey. The chair recognizes the gentleman from 
Illinois, Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Welcome, Administrator. A couple things.
    Let's be clear: When we say price carbon, we mean energy 
costs increase, correct? If 50 percent of our electricity 
portfolio is coal, we are adding an additional cost to 
electricity if we price carbon, correct?
    Ms. Jackson. And it depends how it is done, as to whether 
or not that is a small----
    Mr. Shimkus. Well, if we try to manage it, we have capital 
expenses, which then will incur millions of dollars of new 
equipment. Or we go to carbon capture sequestration, which is 
10 years down the road. That is all addition of cost. So let's 
be clear: When people say price carbon, they mean increased 
cost.
    Let me refer to this poster here. I have used it many 
times. My colleagues can all name these individuals. This is 
what happened under the last Clean Air Act amendments, which I 
think you can credibly argue had toxic emissions. Fourteen 
thousand jobs in Illinois, coal miner jobs, were lost, in 
Illinois alone, not including what happened in Ohio and 
Pennsylvania or across this country. Pricing carbon destroys 
jobs, not just in the coal mining industry, in the electricity 
industry and in the manufacturing industry, because you will 
increase cost of doing goods.
    That is why we are now segueing from the climate debate to 
energy and security, because with the failed IPCC rulings, with 
climate-gate, with the fact that scientists are not using the 
scientific method to replicate these tests, when we are talking 
about the Supreme Court ruling, the endangerment finding cannot 
stand on factual evidence.
    In fact, my colleague, Mr. Inslee, is just a perfect 
example of using tests that can't be replicated in the natural 
environment, because the test that he is quoting is a test that 
is a synthetic reproduction using unnatural factors and 
variables. In fact, CO2 was not even the substance 
to lower the pH in these samples. What was used was 
hydrochloric acid.
    So what would help the world address climate is that we 
would agree to use real science, real data that the public can 
perceive that can be replicated in a real-world environment. We 
are not using the scientific method. That is why now the public 
is skeptical on this whole issue of climate change.
    Administrator, what is the percent of the Earth's 
atmosphere that greenhouse gases make up?
    Ms. Jackson. It depends on how you define ``greenhouse 
gases,'' sir.
    Mr. Shimkus. Well, OK, you define it.
    Ms. Jackson. Well, EPA's endangerment finding includes six 
gases.
    Mr. Shimkus. Well, what is the percentage?
    Ms. Jackson. You know, I have some----
    Mr. Shimkus. It is 2. Two percent of the entire Earth's 
atmosphere is greenhouse gases.
    Now, you know what is the major percentage of what makes up 
greenhouse gases in the Earth's atmosphere?
    Ms. Jackson. I am thinking----
    Mr. Shimkus. Water vapor.
    Ms. Jackson [continuing]. Water vapor.
    Mr. Shimkus. Do you know what percentage?
    Ms. Jackson. Thirty percent maybe?
    Mr. Shimkus. A little higher.
    Ms. Jackson. No, I am not going to guess. Why don't you 
tell me?
    Mr. Shimkus. Ninety-five percent, 95 percent.
    So, of the 2 percent of greenhouse gases that are in the 
atmosphere, do you know how much is man-made greenhouse gases, 
which is what we are trying to say is endangering the public 
health?
    Mr. Doyle. Will the gentleman yield?
    Mr. Shimkus. It is 2--no, I will not. It is 2 percent of 2 
percent. It is 0.28 percent of the entire Earth's atmosphere is 
what we are debating here.
    Now, let me ask you another question. The endangerment 
finding says ``endangering public health.'' At what 
concentration does carbon dioxide endanger individual public 
health?
    Ms. Jackson. Well, we are not talking about what you 
breathe in that makes you sick. We are talking about 
concentrations of anthropogenic carbon dioxide.
    Mr. Shimkus. And define ``anthropogenic.''
    Ms. Jackson. Man-made.
    Mr. Shimkus. And that is 0.28 of the Earth's atmosphere?
    Ms. Jackson. But we are talking----
    Mr. Shimkus. Yes or no? Is that 0.28 percent of the Earth's 
atmosphere?
    Ms. Jackson. I don't know. I will certainly verify. It is a 
very low number volumetrically, but----
    Mr. Shimkus. It is extremely low.
    Ms. Jackson [continuing]. It is not low from a global 
warming perspective.
    Mr. Shimkus. Do you know the frustrating thing about this 
debate? We keep using tonnage to say--and people think of tons, 
and they say, ``Oh, we are overwhelmed by the tons.'' And we 
are talking about 0.28 percent of the atmosphere.
    Ms. Jackson. What we are talking about----
    Mr. Shimkus. OSHA has a standard where parts per million 
affects public health. Do you know what that standard is?
    Ms. Jackson. It has to be fairly high.
    Mr. Shimkus. Five thousand parts per million. What is the 
parts per million in the Earth's atmosphere of greenhouse 
gases?
    Ms. Jackson. It is 300 or so.
    Mr. Shimkus. Three hundred forty-eight percent.
    This is a fraud being perpetrated on the world that is 
going to destroy jobs on a false premise that carbon dioxide is 
going to wipe out the Earth's planet. And the public is on to 
this, and I am embarrassed by this administration to continue 
to push it.
    Mr. Doyle. Will the gentleman yield?
    Mr. Shimkus. I will not. I yield back the balance of my 
time.
    Mr. Markey. The gentleman's time----
    Ms. Jackson. Could I respond, Mr. Chairman?
    Mr. Markey. Yes, you may.
    Ms. Jackson. Thank you.
    I disagree with the premise of your analysis, sir. I am 
certainly not a climate scientist by training, but the volume 
of material in the atmosphere is a misleading statistic. What 
we are talking about is balance, is the simplest way I can 
explain it. That the atmosphere--may I finish, please?
    Mr. Shimkus. I haven't intervened yet, but----
    Ms. Jackson [continuing]. The atmosphere is in balance. And 
we keep putting these gases, which have the potential to act as 
they do in a greenhouse--CO2 is very warming. It may 
not be much of the volume of the atmosphere, but its potential 
to warm the atmosphere, to change our climate is much, much 
higher than its volume in the atmosphere, probably 25 or 30 
percent.
    And so, the analysis you are talking about is--to look at 
the volume and simply say it is not there is to ignore its 
effect. And it is not simply EPA or Lisa Jackson who is saying 
that. I mean, you know, the scientists in our country--we have 
to work by consensus. It doesn't mean there might not be some 
disagreement, but the overwhelming consensus is that climate 
change is happening, and it is due to man's impact through the 
fact that we are burning fossil fuels and we are accumulating 
vast amounts of greenhouse gas potentials.
    Mr. Shimkus. So you agree with the hockey stick calculation 
of the tipping point of greenhouse gases?
    Mr. Markey. The gentleman's time has expired.
    Mr. Shimkus. Can she follow up? You gave her time to 
respond to me. Can she follow up to my question?
    Mr. Markey. She was answering your question, and I felt----
    Mr. Shimkus. Does she subscribe to the hockey stick?
    Mr. Markey [continuing]. I felt that I would provide her--
--
    Mr. Shimkus. The one that you brought out here numerous 
times, this hockey stick graph? Is that valid science?
    Mr. Markey. To the gentleman, you asked her a question.
    Mr. Shimkus. She responded.
    Mr. Markey. The time expired. She asked if she could 
respond to your question.
    Mr. Shimkus. All right. Thank you, Mr. Chairman.
    Mr. Markey. I was only doing it really as a courtesy to you 
so that----
    Mr. Shimkus. I am just asking if she still supports the 
hockey stick graph.
    Mr. Markey [continuing]. So that your answer to the 
question----
    Mr. Shimkus. Do you support the hockey stick graph?
    Mr. Markey. It is obviously----
    Mr. Shimkus. Do you know what the hockey stick graph is?
    Mr. Markey. I guess what the gentleman is trying to say is, 
how can only a 2 percent addition to the atmosphere cause such 
a huge change? And it would be like saying, how can--what if 
subprime loans were only 2 percent?
    Mr. Shimkus. What I am trying to say is the science is 
flawed, and we are going to destroy jobs. That is what I am 
saying.
    Mr. Markey. If subprime loans were only 2 percent of the 
total financial products in the world, could they cause a 
global financial meltdown?
    Mr. Shimkus. Two percent of 2 percent of 2 percent.
    Mr. Markey. Yet that is a financial reality, as is this a 
scientific reality.
    The gentleman's time has expired.
    The chair recognizes the--I know the gentleman from 
Pennsylvania would like to be recognized at this time, but that 
could only happen with the generosity and beneficence of the 
gentlemen from Texas and California.
    I recognize the gentleman from Texas.
    Mr. Green. OK. Thank you, Mr. Chairman. And I will try and 
be as quick as we can.
    Madam Administrator, I want to thank you again for 
appearing this morning.
    And I have always believed that a balanced energy policy 
must have three basic points: energy conservation and 
efficiency, research and development in new and clean energy 
technologies, and environmentally responsible domestic energy 
production.
    However, Administrator, even with these measures to 
increase efficiency that we in Congress push and your agency 
works to promote on a daily basis, do you believe it is still 
necessary to increase the environmentally responsive production 
of domestic natural gas supplies in order to meet short-term 
carbon reduction targets called for in any climate and to keep 
our manufacturing jobs here in the United States?
    Ms. Jackson. It is not my job to set that kind of policy; 
obviously, it is all of you. But I can say that, certainly, 
natural gas has a lower carbon emission factor intensity and 
could certainly be very helpful, especially now that we are 
finding that we have more of a supply than we knew we had.
    Mr. Green. I appreciate that. In fact, in the last few 
years, because you and I have talked about the kind of area I 
represent where we produce and refine and have chemical 
industries, and we have seen such a difference because of the 
success in expanding our long-term ability to produce domestic 
natural gas.
    On a similar subject, the Energy Information Administration 
estimates that there is 1,744 trillion cubic feet of 
technically recoverable natural gas in the U.S., or enough to 
supply our country for 90 years at current rates of production, 
according to the industry. Much of it can only be recovered 
when we use hydrofracking for wells.
    In 2004, an EPA study found no evidence that fracking 
threatens drinking water. And now, for the first time, the EPA 
has undertaken its own water analysis in response to complaints 
of contamination in drilling areas. I look forward to the 
results of your study. And I am confident hopefully you will 
reach the same conclusion as 2004, and hope that we can come 
back to discuss your findings in 2012.
    In the meantime, can you assure me that the EPA will not 
make any moves to regulate hydrofracking until you have 
completed your study?
    Ms. Jackson. As I understand it, sir, we couldn't because 
it would probably require a change in law of some type.
    Mr. Green. OK. Thank you.
    Mr. Chairman, my last question, and I will give you some 
time back, I hope.
    The EPA recently finalized a rule to implement the long-
term renewable fuel standard by Congress under the Energy 
Independence and Security Act. The renewable fuel standard 
requires biofuels production to grow from 11.1 billion gallons 
in 2008 to 36 billion gallons in 2022. However, it is my 
understanding that refiners are having difficulty meeting these 
targets due to various factors, but mainly the feasibility of 
reaching target X by X time.
    Please discuss how the EPA plans to work with refiners to 
be able to resolve these issues. I have long advocated for, 
rather than setting these targets for years, to instead have 
the EPA study the issue for a few years and ensure that the 
targets are feasible and realistic. Does EPA have a plan, since 
we can't meet that target, on how we can actually still produce 
fuel to run our vehicles?
    Ms. Jackson. Right. So, under the Energy Independence and 
Security Act, EPA has many responsibilities. One of them is to 
set the target numbers based on supply that is actually out 
there. I think you are referring to cellulosic ethanol and the 
fact that this year, in setting the target, EPA lowered it 
dramatically because there really isn't supply out there. So it 
would be unfair to ask refiners to try to meet it.
    Mr. Green. Yes.
    Ms. Jackson. We are closely monitoring that. That is what 
the law requires us to do, to set those targets as production 
increases. And we work with sort of a cross-section of the 
industry on both sides, the refinery side and the producing 
side, to try to--and of course we work with the Department of 
Energy to set those numbers. And we will continue to do that, 
sir.
    Mr. Green. OK. Well, and I support expansion of research in 
cellulosic. In fact, one of my frustrations, Mr. Chairman, is 
we don't have the jurisdiction over the tax incentives for 
biofuels. But if we ever do that extender, I actually have 
biofuel refineries that are shut down because they can't 
economically do it without those tax extenders. And so I 
appreciate the--we will continue to work on that to help get 
that product there for us.
    Mr. Markey. Will the gentleman yield?
    Mr. Green. I will be glad to yield to my colleague from 
Pennsylvania.
    Mr. Doyle. Thank you.
    And, Mr. Chairman, I was trying to engage my good friend, 
Mr. Shimkus.
    I was just wondering, Mr. Chairman, if you know what 
percent of your blood is made of platelets.
    Mr. Markey. No, I don't.
    Mr. Doyle. About 3 to 7 percent of all our blood cells. 
Yet, you know, without that 3 percent, a small cut would cause 
you to bleed to death. Did you know that, Mr. Chairman?
    Mr. Markey. I know I could bleed to death, but I didn't 
realize it was from such a small percentage of my body could 
cause such a dramatic change in my overall wellbeing.
    Mr. Doyle. Mr. Chairman, did you know that each member of 
the Energy and Commerce Committee represents only 2 percent of 
our collective wisdom?
    Mr. Markey. That is a very high number, though.
    Mr. Doyle. That is a very high number, yes.
    I yield back, Mr. Chairman.
    Mr. Markey. I thank the gentleman.
    The chair recognizes the gentleman from Texas, Mr. Burgess.
    Mr. Burgess. Administrator Jackson, I think in response to 
some questions from Ranking Member Barton you cited the 
criteria used in the endangerment finding of acidification of 
the oceans, agriculture production, and increased weather. Do I 
recall that correctly?
    Ms. Jackson. Those are some of the criteria I listed.
    Mr. Burgess. But really, for an endangerment finding, 
aren't we required to see an effect on human health?
    Ms. Jackson. It is public health and welfare. There were 
two standards.
    Mr. Burgess. Can you give me an idea of the number of 
deaths in this country, either last year or the year before, 
the outsize number, that would occur because of the increased 
acidification of the oceans in those years?
    Ms. Jackson. Well, I don't think we made an assertion that 
there were deaths associated with increased ocean acidification 
last year, so I shouldn't have to defend a number. We never----
    Mr. Burgess. But for there to be an endangerment finding, 
though, there should be human endangerment.
    Ms. Jackson. But that is not the only criteria by which to 
make that determination, sir.
    Mr. Burgess. Well, what is the amount of carbon dioxide 
that is safe?
    Ms. Jackson. Well, it depends on what you mean by ``safe,'' 
sir. People have talked about a level in the atmosphere; I have 
heard 350 parts per million, I have heard 400, 450. Scientists 
use very complex models to try to determine, as that percentage 
of CO2 increases and CO2 equivalents 
increases, what that would mean for rising sea levels, what 
that might mean for changes in our climate. So they try to work 
backwards to project what level----
    Mr. Burgess. If I could just stop you there for a minute. 
OSHA has a level of 5,000 parts per million, or half of 1 
percent, as being an acceptable level. NIOSH says 30 parts per 
million, though I don't know that anyone actually recommends 
that. So there is a wide degree of latitude amongst the Federal 
agencies of the level of carbon dioxide which actually causes 
damage to human health.
    Ms. Jackson. Well, that is apples and oranges, sir. I think 
the ocean numbers you are looking at are what you could breathe 
in if you are being occupationally exposed on a short-term 
basis. Those are probably cell numbers that would make you not 
able to breathe and, therefore, might harm you permanently and 
might kill you. Whereas, what I was referring to when we deal 
with climate change is what numbers would try to stop the 
trajectory in the changes in our atmosphere.
    Mr. Burgess. Well, maybe then you could help us by saying 
what does the EPA use to assess the health impacts of, say, 
carbon dioxide--and any of the other greenhouse gases, but 
carbon dioxide since that is the one we are talking about.
    Ms. Jackson. Right. EPA did not set a health level per se 
or an ambient air quality standard. What EPA did was look at 
what projections of the changing climate would mean on things 
like diseases that are carried by insects that might now be 
able to thrive in an environment where once there was winter 
weather that might kill them off, or exacerbation of impacts 
that are weather-dependent. So a great example is smog or 
ground-level ozone, which on warmer days is much, much worse 
for you and your lungs and causes increased morbidity and----
    Mr. Burgess. OK. Well, let's go to the vector-borne 
diseases, since you brought that up. Does the EPA have any 
peer-reviewed procedures that it uses for assessing the threat 
from vector-borne diseases?
    Ms. Jackson. What EPA did was use the studies, peer-
reviewed studies, by those who for a living study vector-borne 
diseases and the incidence and potential incidence of those 
increasing.
    Mr. Burgess. And from a numbers standpoint, what is the 
impact on human health that we are likely to see?
    Ms. Jackson. Yes, so I think maybe--the endangerment 
finding is--think of it as a weight of evidence, that all these 
things move together, but there are no numbers of people who 
are going to die from vector-borne. There is a belief that it 
will increase, and that will endanger public health, endanger 
public welfare.
    Mr. Burgess. Well, let me ask you this. What if the Earth 
were warming but it wasn't humans that were causing it, it 
wasn't human-made carbon dioxide, but the Earth were warming 
and these diseases would increase because of the increase in 
the vector-borne component? Would there be anything we could do 
about that? Would there be mitigating factors that we could 
bring into play?
    And the answer is, of course we could. I mean, none of this 
stuff happens in a vacuum. The fact that we might have more 
mosquitos because the weather is warmer doesn't mean that we 
don't have anything else to use to impact that event. Is that 
correct?
    Ms. Jackson. Certainly. But that wasn't the question we 
were answering in the endangerment finding. We were asked 
whether the pollution from greenhouse gases would change our 
climate; and, if so, whether those changes endanger public 
health and welfare.
    Mr. Burgess. OK, good.
    Ms. Jackson. And the answer was an affirmative yes. And----
    Mr. Burgess. Great. Well, then how many people have died 
from the effects of elevated carbon dioxide in the last decade?
    Ms. Jackson. Again, you don't have to have a number of 
people who have died in order to make a finding of 
endangerment. If I tell you that it is dangerous to jump off a 
cliff, you don't have to actually do it to know that that is a 
dangerous thing. It was a finding----
    Mr. Burgess. No, because somebody else has already done the 
experiment and proved the theorem. But can you tell how many 
additional cardiovascular asthma deaths are linked to carbon 
dioxide increases of 100 parts per million in the atmosphere?
    Ms. Jackson. I think I have explained to you why that is 
not the analytical approach that was taken. We took the weight 
of evidence approach, as scientists have done.
    Mr. Burgess. Are you at the EPA doing research on this 
front currently?
    Ms. Jackson. We do some of our own research. EPA's Office 
of Research and Development has contributed three reports to 
the U.S. Global Change program. But we also rely on our 
partners and on the peer-reviewed work of scientists.
    Mr. Burgess. And what are the results of those?
    Ms. Jackson. The endangerment finding is based on that 
work, sir.
    Mr. Burgess. But you cannot provide us with numbers of how 
many people have actually been endangered.
    What about how many people died as a result of a 1 degree 
Fahrenheit temperature rise over the last 100 years?
    Ms. Jackson. I understand your point, but I think we are 
talking past each other at this point. You know, I can probably 
quote what other scientists say: that the evidence is that 
ongoing climate change will have broad impacts on society, 
including the global economy and the environment.
    For the United States, climate change impacts include sea 
level rise for coastal States, greater threats of extreme 
weather events, increased risks of water scarcity, urban 
heatwaves, western wildfires, disturbance of biological systems 
throughout the country.
    And I would add to that the issue of ocean acidification, 
which is certainly not----
    Mr. Burgess. Can you quantify the number of human deaths, 
then, from any one of those instances that you just cited?
    Ms. Jackson. The endangerment finding is based on the 
premise and the belief and, I believe, the scientific fact that 
the severity of climate change impacts will impact negatively 
public health and welfare. And scientists agree that that 
severity is going to increase over time.
    Mr. Burgess. Then how can you be convinced, as a matter of 
science, that you will be able to reduce the public health 
risks, and hence the number of deaths, from carbon dioxide when 
you can't quantify those specific impacts?
    Ms. Jackson. Well, I am convinced of the inverse, which is 
that, as the models show that increasing amounts of emissions 
of greenhouse gases are going to change the climate, that 
mitigation is one method, mitigation of those emissions is one 
method of addressing----
    Mr. Burgess. Mr. Chairman, I have several more questions 
along this line. I would just like to submit those in writing 
for the record, if the chairman will permit.
    Mr. Markey. The questions will be submitted in writing, and 
we would ask the administrator to respond in writing to the 
gentleman from Texas.
    Mr. Burgess. Thank you.
    Mr. Markey. We thank the administrator.
    The chair recognizes the gentlelady from California, Mrs. 
Capps.
    Mrs. Capps. Thank you, Mr. Chairman.
    Administrator Jackson, thank you for your patience.
    And we have heard some of our colleagues today question 
whether the science of global warming is sound. In particular, 
some of my colleagues allege that e-mails hacked from the 
Climate Research Unit at East Anglia University cast doubt on 
the entire scientific field.
    I want to ask you if you have seen the report by the 
British House of Commons Science and Technology Committee, 
which, and I quote, ``found no reason in this unfortunate 
episode to challenge the scientific consensus that global 
warming is happening and that it is induced by human 
activity,'' end quote; and the report of the independent 
Scientific Assessment Panel, which concluded that, and I quote, 
``We saw no evidence of any deliberate scientific malpractice 
in any of the work of the Climate Research Unit, and, had it 
been there, we believe that it is likely that we would have 
detected it''; and, also, the Penn State report clearing 
Michael Mann, one of its scientists, of any misconduct.
    Ms. Jackson. I have seen both.
    Mrs. Capps. Thank you.
    Mr. Chairman, I would like to put all of these reports into 
the record, if I may.
    Mr. Markey. Without objection, so ordered.
    Mr. Burgess. Mr. Chairman?
    Mrs. Capps. I have them right here, the scientific reports.
    Mr. Markey. OK, we will withhold. I will make the unanimous 
consent request, if the gentleman from Texas would like to look 
at them, and we could then make the unanimous consent request 
subsequent.
    Why don't we just hold right now? If you could continue 
with your questions, and we will add back 30 seconds.
    Mrs. Capps. All right. Thank you very much.
    My next question: Have you seen the statements by Working 
Group One of the Intergovernmental Panel on Climate Change, the 
University Corporation on Atmospheric Research, the American 
Geophysical Union, the American Association for the Advancement 
of Science, the American Meteorological Society, and the 
Geological Society of America, all of which were issued after 
the hacked e-mails and all of which reaffirm the scientific 
basis for the threat of climate change? Have you seen these?
    Ms. Jackson. I believe I have seen them.
    Mrs. Capps. Thank you.
    I would like to enter all of those statements, as well, 
into the record. And, unfortunately, I don't have copies of 
them today.
    Mr. Chairman, may I have your consent to enter these 
records that I have just mentioned into the record today?
    Mr. Markey. The chair was distracted. Would the gentlelady 
make her inquiry again?
    Mrs. Capps. I asked the Secretary--and I don't want to 
belabor her time. The various statements which I have just 
enunciated, if they could be entered into the record in the 
same way.
    Mr. Markey. Great. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mrs. Capps. So, Administrator Jackson, in light of all of 
these statements from independent assessments and scientific 
societies, do you believe that it is safe to say that these e-
mails do not in any way undermine the scientific basis of 
global climate change?
    Ms. Jackson. Yes.
    Mrs. Capps. Thank you.
    And now that we have made the facts on the science clear, I 
would like to ask some questions about public health and 
climate change. And, as you know, I am a public health nurse, 
and the connection between our health and climate change is a 
subject I care deeply about.
    I have introduced legislation that would help the American 
public adapt to the public health impacts of climate change, 
and it was included in the House-passed energy bill.
    I wondered if you would list briefly, if you can, some of 
the most important investments that you are considering which 
would ensure that we promote and protect public health by 
reducing oil dependence.
    Ms. Jackson. Well, certainly. You know, cars and the 
burning of oil create pollution, not only climate pollution but 
certainly pollution as well. In fact, one of the, you know, 
greatest legacies of the Clean Air Act are the reduction in 
NOX and SO2 pollution and particulate 
pollution through the Clean Air Act. And huge impacts on public 
health--in fact, 13 to 1, $13 of benefits in terms of public 
health to $1 spent.
    So my belief is that, while I am certainly not arguing that 
any one action can achieve all we need, we can see tremendous 
improvement in public health.
    Mrs. Capps. And so there are the monitoring and planning 
and infrastructure education opportunities that have already 
been in the Clean Air Act that you can adapt and use again, 
continuously use. Is that what your Department is doing?
    Ms. Jackson. Yes. And we are not using all the pieces of 
the Clean Air Act, but certainly bringing Clean Air Act 
regulations to bear.
    Mrs. Capps. Thank you.
    I just have a couple seconds left. Let me ask you how EPA 
is working with other Federal agencies to align policies in 
order to reduce oil dependence.
    Ms. Jackson. Well, all of our work--the work on the cars 
rule was, you know, closely coordinated with the Department of 
Transportation. But we work very closely with the Department of 
Energy, with NOAA, with Interior and Agriculture--all of them, 
by the way, who sat and agreed on the endangerment finding. So 
all of the work we do is through an interagency process that 
coordinates our work together.
    Mrs. Capps. Thank you very much.
    I yield back.
    Mr. Markey. The gentlelady's time has expired.
    And we will ensure that the gentleman from Texas sees the 
scientific data that the gentlelady has. As a matter of 
course----
    Mr. Burgess. Mr. Chairman, if I might, just with the 
stipulation and the understanding that in the record that is a 
limited and provisional report and not the final report that 
has been prepared, as I understand it. I am OK with it being 
inserted as long as there is the captioning that it is a 
preliminary and limited report.
    Mr. Markey. I think that is how--would the gentlelady from 
California--is that described as a provisional report? It is 
not a final report?
    Well, let me just say, in general, let's just--on the 
second panel, there is a witness whose conclusions I do not 
agree with. And I am sure that that witness is going to make a 
unanimous consent request that all of his analysis be put in 
the record. I will accede to that. It will go into the record, 
but it will be associated with that witness, as any of these 
reports are identified with the Member who is asking them to be 
inserted in the record at that point.
    So it is not an endorsement by the committee of any of the 
materials which are put in the record. It is just a further 
extension of the remarks and the information which that Member 
wishes to have included in the record. And that is just 
something that we do and we honor as a matter of course on this 
committee as part of a courtesy to any Member that has 
information which they would like to have included. But it is 
then up to each individual Member to make their determination 
as to what weight they wish to attach to it.
    Mr. Burgess. Thank you, Mr. Chairman. With that clear and 
coherent description, I will withdraw my objection. But thank 
you for providing the information.
    Mr. Markey. No, I thank the gentleman.
    And, without objection, the gentlelady's information will 
be included in the record.
    [The information appears at the conclusion of the hearing.]
    Mr. Markey. And the chair will recognize the gentleman from 
Louisiana, Mr. Scalise.
    Mr. Scalise. Thank you, Mr. Chairman.
    Administrator Jackson, a couple of weeks ago, I think you 
were in New Orleans talking to a group and were talking about 
how regulations and rules that your agency issues help create 
jobs. Can you expand upon what you meant with that?
    Ms. Jackson. I am happy to, but first I have to say ``Who 
Dat,'' right?
    Mr. Scalise. ``Who Dat.''
    Ms. Jackson. All right.
    What I was explaining is that the Clean Air Act--and cars 
are a perfect example. The catalytic converter is a home-grown 
technology, a home-manufactured technology--we exported it to 
the world--to deal with pollution, non-CO2 pollution 
but pollution from car exhaust. It is true of scrubbers or flue 
gas desulfurization units.
    So what I said was that we have a whole sector of our 
economy that is built around making sure we have clean air and 
clean water and our public health is protected and 
environmental health is protected.
    Mr. Scalise. Right. Is there an acknowledgement that some 
of those rules actually cost us jobs? Many companies who are 
operating by all the rules and doing things the right way, 
every time rules come out, it changes the way that they have to 
do business; people who aren't doing anything to hurt public 
health, but just people who then become burdened with new 
Federal rules and regulations that cost them money or, in some 
cases, have caused them to shift jobs overseas, lots of jobs 
overseas.
    So, while you might think that the rules create jobs, I 
would hope you recognize that some of those rules cost our 
country jobs at the same time.
    Ms. Jackson. I would certainly stipulate that rules are not 
free, that they have a cost to them, that we have to invest in 
having clean air, that we have to invest in having clean water. 
And that one of the things the laws of our country have said is 
that the American people demand that, that we could grow 
without any restrictions on pollution. And, certainly, I 
consider it a part of my job to ensure that the rules we put in 
place are----
    Mr. Scalise. But some of this goes beyond pollution, and 
hopefully I can have time to get into some of that. But right 
now your agency has a contest going on where, on your Web site, 
you claim that you are going to award $2,500 to somebody who 
makes a YouTube video explaining why rules are important.
    Do you really think, in the times that we are facing right 
now in our country economically, but also with the debt that 
our country is facing, that it is a wise use of taxpayer money 
to be giving $2,500 of taxpayer money away to somebody to make 
a video on YouTube about why rules are important?
    Ms. Jackson. Well, I am happy to take a look at that 
specific concern. I didn't prepare to look at it for this 
hearing. But if you would like----
    Mr. Scalise. It is on your Web site.
    Ms. Jackson. I am not disputing that, sir. I am not 
disputing that at all. What I am saying is that there are lots 
of things on our Web site that are designed to engage the 
public in the work that we do. And so----
    Mr. Scalise. Right. Engaging is one thing, but giving away 
2,500 taxpayer dollars is a different story.
    Ms. Jackson. I am happy to take a look at it for you, sir.
    Mr. Scalise. So you would consider withdrawing that $2,500 
reward.
    Ms. Jackson. I am happy to take a look at it. That is what 
I----
    Mr. Scalise. Maybe using it to help pay down debt. I would 
appreciate that.
    When we talk about the hydraulic fracturing process--and 
Congressman Green had asked you a similar question. I just want 
to make sure that we are correct on this. It is my 
understanding that you had said that you cannot regulate the 
fracking process without a change in law?
    Ms. Jackson. My understanding is that we can regulate only, 
I believe it is, hydrocarbons or diesel fluid injections right 
now.
    Mr. Scalise. Do you know of any examples--and we have a 
2004 report that says that fracking does not contaminate 
groundwater. Do you have any kind of findings that you have 
done that disputes that?
    Ms. Jackson. Well, I think there has been some important 
information that has come out lately. States are doing more and 
more investigation of complaints by their citizens that their 
water is being impacted. I think the----
    Mr. Scalise. And the States do regulate that right now.
    Ms. Jackson. Sir, I am not disputing who regulates it. You 
are asking if I am aware.
    Mr. Scalise. But do you have any reports of----
    Ms. Jackson. I am aware of concerns that there has been 
misleading information about what is going down wells. That 
might actually have come out of investigations by this 
committee. I have right now complaints before me from folks who 
say they are concerned and want----
    Mr. Scalise. If you can do this, because my time is running 
out, if you can get me a copy of anything you have that would 
purport to dispute that. Because you are doing a--your agency 
is putting a report together right now which--I would hope this 
Congress doesn't try to do anything to limit the fracking 
process, especially when there is no finding and no report from 
your office. So if you can get me that.
    On climate-gate and Himalaya-gate and Amazon-gate, you have 
not changed any of your conclusions on which EPA has based 
endangerment findings. What analysis has EPA done that caused 
you to reach that conclusion in light of these scandals that 
have erupted over falsified scientific data?
    Ms. Jackson. EPA reviewed the allegations as they were 
made, and they dribbled out over a period of time. And, in each 
case, my direction to staff was clear: to review whatever 
allegations were being made to determine whether they change 
the foundation for the endangerment finding. Certainly, that is 
our obligation to do.
    And, as I said in response to one of the earlier questions, 
we have made a determination, and it turns out that others now 
agree with that----
    Mr. Scalise. When did you conduct that analysis?
    Ms. Jackson. I am sorry?
    Mr. Scalise. When did you conduct that analysis?
    Ms. Jackson. As part of the endangerment finding and as the 
information became available, because some of this has dribbled 
out since.
    Mr. Scalise. And if you can get me any information you have 
on analyses you have done on climate-gate, Himalaya-gate, and 
Amazon-gate.
    Mr. Markey. The gentleman's time has expired.
    Mr. Scalise. Thank you. I yield back.
    Mr. Markey. The chair will recognize the gentleman from 
Washington State, Mr. Inslee.
    Mr. Inslee. Thank you.
    I wonder if our friends could put up that slide I had 
earlier that talked about this issue of ocean acidification.
    It has been astounding to me that we still hear debate 
about the existence of climate change. And I wanted to ask 
about what Janet Napolitano, who is the leader of NOAA, calls 
the evil twin--sorry, Jane Lubchenco. Excuse me. Thank you. I 
appreciate that. What she calls the evil twin of global 
warming, which is ocean acidification.
    We used to think it was a good thing that when we burned 
the oil and the carbon dioxide goes into the atmosphere and 
then it goes into solution and the oceans, we used to think 
that was a good thing because it got it out of the atmosphere 
so it would reduce the climate impact.
    But the scientific community is now telling me and the rest 
of Congress that it is an undisputed certainty, with no 
scientific debate whatsoever, that the carbon dioxide pollution 
from burning oil is now going into the ocean and creating more 
acidic conditions.
    And it is a scientific fact, I believe beyond dispute--in 
fact, I have never heard anyone in this room dispute the fact--
that the oceans are now about 30 percent more acidic than they 
were before we started to burn fossil fuels, and that this 
happens because the pollution goes up, goes in the air, falls 
out of the sky, goes into the solution of the ocean and creates 
acid.
    Now, the scientists that I am talking about, we have some 
neuroscientists in Seattle and they have been doing research, 
they tell me that this is a certainty. There is just no doubt 
about this, there is no debate about this. No one has really 
ever challenged this conclusion that we are acidifying the 
oceans because we are burning fossil fuels.
    Is that a fair characterization of the science?
    Ms. Jackson. Yes. I am going to of course yield to Dr. 
Lubchenco. But we have talked about this, and I know it is 
exactly as you describe it, sir.
    Mr. Inslee. So if I can refer to this photograph, this is a 
photograph demonstrating what the future looks like. And it is 
a photograph, again, of a terrapod. These are small plankton, 
and these are the base of the food chain. These are what 
everything--not everything, but much of what life depends on in 
the ocean, because small fish eat these terrapods by the 
gazillions, larger fish eat them, and eventually the largest 
fish eat those fish. The whales depend, essentially, on the 
presence of these terrapods. So these are the basis of the 
entire food chain in the ocean.
    And what the scientists are telling me is that, as the 
oceans become more acidic, the very basis of the food chain is 
threatened because these terrapods and many other creatures 
will not be able to exist. For instance, we have not been able 
to grow an oyster crop in the State of Washington for 2 years, 
probably because of the acidification of the ocean. That is not 
totally clear yet, but probably because of that.
    So we have evidence before our own eyes that carbon 
pollution from burning oil has the capacity to actually melt 
the very basis of the food chain. Because what this experiment 
shows--and, actually, Dr. Lubchenco showed us this experiment 
in another committee hearing--that if you expose these shells 
to water that is as acidic as it will be in 2100, that the 
shells actually melt.
    And this has the fishermen concerned where I live in the 
State of Washington, because if you destroy the basis of the 
food chain--this is what salmon eat when they are in the 
Pacific Ocean. When these things are gone, there is no food for 
the salmon.
    So I guess the question is, is ocean acidification 
something legitimately to be concerned about from a human 
health standpoint? Because we get about 15 percent of our 
protein from the oceans, and the food chain appears to be at 
risk. Is that something legitimately to be concerned about, in 
your role?
    Ms. Jackson. I do think that it is a legitimate concern and 
one on which the science, like much of climate science, 
continues to just emerge and one that cannot be ignored.
    Mr. Inslee. And if you were going to--maybe this is getting 
to the personal a little bit, but let me just ask you. When you 
think of the human impacts of carbon pollution, what personally 
is most troublesome to you?
    Ms. Jackson. Well, you know, I could cite the $2 trillion 
in global damages that are estimated to occur from a changing 
climate. I think you know, we have talked about the fact that, 
although I do not attribute Hurricane Katrina to climate 
change, per se, I have seen what it requires of this country 
and its citizens, who all pulled together to help my hometown 
after the kind of catastrophe that happened when you saw a 
very, very severe flood.
    And to think about our economy, instead of being a 
productive economy, constantly having to respond to 
catastrophes that are induced by a changing climate over time; 
when I think of my children or my grandchildren spending all 
their time doing that instead of making new things, innovating, 
and building a better life, I worry. And I am very, very 
concerned. And I think--I know that we have an obligation to 
follow science and do that.
    And the good news of it, which I hoped we would talk about 
more in this hearing, is that we can do it in a way that 
decreases our dependence on foreign oil. It is something no one 
seems to want. I can't imagine they would.
    Mr. Inslee. Thank you.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Alabama, Mr. 
Griffith.
    Mr. Griffith. Thank you, Mr. Chairman.
    Thank you for being here. I looked at the clock, and it is 
10 after 12:00, and I know that we would probably prefer to be 
on the St. Charles Avenue trolly headed to the Camellia Grill 
for some chili cheese fries.
    Ms. Jackson. All right.
    Mr. Griffith. But anyway.
    Ms. Jackson. Did you go to Tulane?
    Mr. Griffith. Yes, I was there.
    Anyway, did the EPA do its own analysis of the challenge to 
the endangerment reviews? And, if so, I don't need to know the 
result, but we would like for you to provide us with that.
    Ms. Jackson. Yes, I did mention that we would provide it. 
So I am happy to get you a copy.
    Mr. Griffith. OK. My other point--and so many of the 
questions have already been asked--is that we, as Americans, 
represent 5 percent of the world's population, maybe 4.5 
percent. Does the EPA have any responsibility when it regulates 
to know the economic impact that it has on our economy as it 
relates to our global competition? Or are we regulating 
ourselves in a vacuum and, as you mentioned, children and 
grandchildren, jobs, economy, recognizing the population of 
China and the fact that they are probably not having this 
discussion right now?
    So does the EPA have a responsibility to do a global 
economic impact as it relates to our competitiveness?
    Ms. Jackson. In general, we do economic impacts on our 
regulations, but they tend to look at our domestic businesses.
    It is not true to say we don't care about economic impacts. 
That has been out there for a while. That is not a true 
statement. But we don't generally look specifically at a 
foreign business. So many businesses now are multinational, 
that we just look at what the impact would be, the cost to our 
business community.
    Mr. Griffith. I yield back the balance of my time, Mr. 
Chairman.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from California, Mr. 
McNerney.
    Mr. McNerney. Thank you, Mr. Chairman.
    Administrator Jackson, I want to thank you for coming 
today. You knew it wasn't going to be an easy hearing, and you 
have been graceful, and I appreciate that.
    My understanding is that the endangerment finding was based 
on a preponderance of evidence supported by recognized 
scientific-based agencies and organizations. Is that correct?
    Ms. Jackson. That is a fair statement.
    Mr. McNerney. Could you name a couple of those agencies or 
organizations?
    Ms. Jackson. I am happy to.
    In the U.S. Government, the U.S. Global Change program is 
composed of NOAA and NASA and DOD and Agriculture and 
Transportation, so all of the folks who are watching these 
issues from various aspects of how they would impact us.
    And then, of course, there are the international efforts. 
The IPCC is named, but the IPCC is really made up of several 
boards that look at various aspects of these issues.
    And then there are additional studies, as well. The 
National Academies did a study that was one that we relied 
heavily on that brought together much of the science, as well.
    Mr. McNerney. Thank you.
    I am also thankful to my friend, Mr. Shimkus, for giving us 
perspective of global warming deniers, and that perspective 
believes that small changes in chemical composition of a 
solution couldn't possibly change the physical nature of that 
solution. So I am thankful for the other side for that 
perspective.
    I have another related question. I represent the Central 
Valley of California, part of it anyway, and it is a great 
agricultural region. We have terrific crops and export to the 
entire world. But we have air quality problems that cause 
asthma and other health-related issues.
    I was wondering what impact the endangerment finding and 
the subsequent policy rulings by the EPA might have on public 
health.
    Ms. Jackson. The effort to mitigate greenhouse gas 
pollution--which, I should just say for the record one time, I 
believe is best done through legislation, so, obviously, this 
body has already dealt with that question--would, by mitigating 
and stopping greenhouse gas emissions, start to put us on a 
trajectory to see climate change level off.
    There would certainly be some need for adaptation, telling 
populations that are already seeing changes, as well. So it is 
a system as we level off and stop the increase in changing 
climate, the heating in the Central Valley and increased 
droughts, we would--I am sorry, and increased impacts on 
water--we would start to see a change. But it is not an 
instantaneous thing. It is not----
    Mr. McNerney. But wouldn't that also have a spin-off of 
protecting public health, in your opinion?
    Ms. Jackson. Absolutely. Absolutely, sir. Yes.
    Mr. McNerney. Thank you.
    And I am just going to follow up on what you said. Wouldn't 
it be true that comprehensive energy legislation would be 
preferable and a superior approach to national security, 
health, and the economic challenges we are now facing?
    Ms. Jackson. Absolutely. I join the President in that call.
    Mr. McNerney. All right.
    And thank you. I will yield back.
    Mr. Markey. We thank the gentleman very much.
    And to our audience, we just would like to let you know 
that 27 members of the subcommittee have come today, which is 
just about every member of the subcommittee, which is a 
reflection of the importance of this issue but, you know, has 
contributed to the length of the hearing. And so we apologize 
to Members for that, although the information that we are 
receiving is invaluable.
    So the chair now recognizes the gentleman from Oklahoma, 
Mr. Sullivan.
    Mr. Sullivan. Thank you, Mr. Chairman. I think that is 
because of you, that we have so many here.
    Mr. Markey. I would not want to know how many came if it 
was just me.
    Mr. Sullivan. Well, again, thank you for being here. I am 
from Oklahoma----
    Mr. Markey. Oh, I apologize to the gentleman. I actually 
went out of order there.
    Mr. Sullivan. Oh.
    Mr. Markey. The gentlelady from California, with the 
indulgence of the gentleman from Oklahoma, is recognized.
    Mrs. Bono Mack. Well, I thank both the chair and my 
colleague. I hate to have that false start, but also glad to 
know that I am not last and least at the same time.
    But I want to welcome the administrator, as well, and thank 
her for her patience and say that I have an issue that I am 
hoping that you can look into further that is specific, at 
least now, to southern California.
    As you know, southern California has faced extremely 
challenging air quality issues, and, over time, the region 
established air quality standards in the issuance of permits 
for those who wish to construct or expand infrastructure 
projects. Those who seek these permits include everyone from 
hospitals, schools, fire, police stations, water projects, 
small businesses, and the list goes on and on.
    Recently, the EPA was petitioned to try to halt the 
issuance of new permits, even though the State acted with 
overwhelming bipartisan support on legislation to ensure that 
these could move forward.
    Given the nearly 15 percent--I am sure much higher, 
actually--but the 15 percent unemployment rate in much of 
California's Inland Empire, the importance of providing new job 
opportunities is crucial. In fact, holding up the existing 
permits being requested in parts of southern California will 
impede the progress of $10 billion in projects that will 
provide tens of thousands of jobs.
    It is my hope that the EPA will reject this petition, as we 
have had the permit program serving areas throughout L.A. and 
surrounding counties for decades. Our businesses need the 
certainties that they can invest, and our public entities like 
hospitals must expand to meet the growing needs. Again, it is 
my firm belief that this petition should be rejected, given the 
high stakes it represents for our regional economy.
    Are you able to respond specifically on this matter today, 
if you know personally about it? And if you don't know, are you 
willing to work with me to ensure the effects of this petition 
are seriously considered?
    Ms. Jackson. I am aware of the petition. I don't have a 
full briefing. I would be happy to meet with you and discuss it 
further. Obviously, staff have to review the petition on its 
merits, but we are happy to work with you on that.
    Mrs. Bono Mack. All right. Thank you. It is very, very 
important.
    But changing back now to the issue at hand, in February you 
testified in the Senate that you would prefer climate 
legislation over regulation of carbon dioxide emissions under 
the existing Clean Air Act. I happen to feel the same way, 
which is one of the primary reasons that I supported the House 
legislation, as it ensured that the EPA would not move forward 
unilaterally on a number of fronts, or at least temporarily.
    I recognize that there is a proposed enforcement delay 
being considered for various sources, but that still doesn't 
solve the problem that moving forward with regulations under 
existing statutes will be harmful to our economy, whether that 
is now, in 2011, or in 2020.
    As you know, California has its own regulatory regime that 
is moving forward, as provided by AB-32. And this leads me to 
my question: Would you support a complete preemption of EPA 
regulation of greenhouse gases under the Clean Air Act or other 
existing statutes and comprehensive climate legislation? As you 
know, the issue is one of the more clear interstate commerce 
issues we are considering in this committee. And if you don't 
support this preemption, can you explain why not?
    Ms. Jackson. Well, I haven't seen preemption language from 
the U.S. Senate. There is certainly a bill that passed this 
body that included some preemption.
    I certainly support the fact that legislation is going to 
have to deal with the tricky question of how to deal with 
competing State and Federal standards and try to harmonize all 
that, which is why I believe we have to have a legislative 
solution.
    But I also have to say that, in the interim, I believe I 
have to follow the law. And I believe very strongly that the 
Supreme Court decision wasn't an ``if you feel like it.'' It 
was, ``EPA must make a finding.'' And everything we have done 
since making that finding and, in fact, even leading up to it 
has been about trying to ensure that the Clean Air Act 
unintended consequences are minimized, so that you can have a 
rule for cars that is a good-news story without immediately 
having to regulate other sources that you don't want to.
    Mrs. Bono Mack. Can I just narrow this down? And I don't 
know that the clock necessarily started when I started, but I 
appreciate that I still have 3\1/2\ minutes.
    Regulate or legislate? I mean, it is not yes or no, but it 
is close.
    Ms. Jackson. New legislation that puts a market incentive 
on clean energy is the way to go. What that legislation says is 
the job of Congress and will be, I am sure----
    Mrs. Bono Mack. But you are saying you prefer that route? I 
mean, that is all I am asking is a simple--that is what--you 
said it before, and I am just asking you to reiterate it right 
now.
    Ms. Jackson. Yes, ma'am. Yes, ma'am.
    Mrs. Bono Mack. OK.
    Ms. Jackson. I prefer legislation.
    Mrs. Bono Mack. Thank you. And would you support Federal 
preemption of State greenhouse gas regulations?
    Ms. Jackson. All I can say is I prefer legislation. And the 
details of legislation are to be discussed.
    Mrs. Bono Mack. But this is very simple, especially in your 
capacity, a very simple question. Would you support Federal 
preemption of State greenhouse gas regulations? What do you 
support? It is very simple.
    Ms. Jackson. The administration, the Obama administration, 
has said over and over that we need legislation, that we prefer 
it. But that I do not have the luxury of ignoring the law. And 
so I, as I do my job at EPA----
    Mrs. Bono Mack. This is a second question from the first. 
Would you support Federal preemption of States? It is not 
regulate or legislate; it is now Federal or State preemption.
    Ms. Jackson. I support legislation. And I believe that that 
is one of the issues that good legislation is going to have to 
deal with. And, in the interim, I think I should do my job, 
which is to uphold the Clean Air Act as the Supreme Court has 
interpreted it.
    Mrs. Bono Mack. All right. Well, I don't think that is much 
of an answer for me.
    Ms. Jackson. Well, I also don't believe that it is an 
either/or question entirely. I also believe very strongly that 
the Clean Air Act can be used to do good things that are 
entirely consistent with legislation. And I think the clean 
cars rule is a perfect example of that.
    Mrs. Bono Mack. Well, it is a simple question, though. In 
fact, if California continues to move the bar, then where does 
that leave Federal legislation or regulation? If California--
and as a proud Californian, but not necessarily agreeing and 
not necessarily agreeing that what California does is good for 
the rest of the country--but if California changes their 
standards, are you saying that we should then once again meet 
California standards?
    Ms. Jackson. I think the cars rule was a great example of a 
way to make sound and smart legislation. And, in fact, much of 
what happened in the bill that passed this committee and the 
House talks about how to meld the Clean Air Act authorities in 
with the new authorities that would come under legislation.
    So, again, I don't think I can simply say one or the other, 
because I think the trick of legislation will be to figure out 
how to put those two authorities together in a way that gets 
you things like the clean car rule. And, yes, California may 
look at even cleaner cars. And I think, when I spoke to the 
chairman emeritus, he asked me to go back and start thinking 
about what we are going to do for 2017 and beyond. And I think 
that is a fair question.
    Mrs. Bono Mack. Thank you.
    I yield back. Thank you.
    Mr. Markey. OK. The gentlelady's time has expired.
    The chair recognizes the gentleman from Pennsylvania, Mr. 
Doyle.
    Mr. Doyle. Thank you, Mr. Chairman.
    Administrator Jackson, you have been most generous with 
your time, and we have covered a lot of ground, so I really 
just have one question. I want to follow up on something that 
Representative Green talked to you about.
    In my State of Pennsylvania, we are sitting on a vast 
supply of natural gas in the Marcellus Shale. Geologists 
estimate it could be somewhere between 168 and 516 trillion 
cubic feet. And I get asked every day--I know that 
Representative Green referenced the EPA study on the effects of 
hydraulic fracking on drinking water. And we are starting to 
see a lot of wells go up in southwestern Pennsylvania and 
throughout our State. So we hear from our constituents every 
day about that.
    So we know there is a study, but could you give us an idea 
about the scope of this study? What all is the EPA looking into 
with regard to fracking? And when might we anticipate this 
study being made available?
    Ms. Jackson. EPA recently held a meeting of its Scientific 
Advisory Board. It is the Federal FACA that advises the EPA 
administrator on the scope of the study, how best to design a 
study of hydraulic fracking, primarily to look at potential 
impacts on drinking water, on water. And, of course, that would 
be, in this case, groundwater for the most part.
    And that study, I believe, is now scheduled to not have any 
results until either late in 2011 or early in 2012. I will 
double-check on the date. I mean, we haven't quite finished 
scoping it, so we haven't begun the actual study yet.
    We are designing it to be transparent, to use information 
that is being collected. Many States and localities are getting 
information and complaints on potential issues with respect to 
contamination. And it is being done primarily to serve as a 
resource to EPA but, of course, also to Congress and others, 
the States, in terms of what we know.
    One of the concerns is that there was a 2004 literature 
review. There were no samples taken. That study is widely cited 
as saying, ``See, that proves it is safe.'' And I don't think 
that is a fair or accurate summation of that study. I think 
that is an overbroad reading. And so I have said I believe we 
need to take some more data.
    Mr. Doyle. Having said that and given the fact that we 
might not have the study until 2011 or 2012, do you think it is 
wise for Congress to consider legislation to regulate hydraulic 
fracking in advance of the completion of this study?
    Ms. Jackson. Certainly, I would leave the legislative 
decisions to you. And I would certainly say that we will be 
happy to provide information, as we get it, to Congress in 
helping to inform your deliberations.
    Mr. Doyle. Thank you.
    Thank you, Mr. Chairman.
    Mr. Markey. Great. The gentleman's time has expired.
    And all time for--oh, I am sorry. I apologize again to the 
gentleman from Oklahoma. Mr. Sullivan----
    Mr. Sullivan. That is OK. I am used to it, Mr. Chairman.
    Mr. Markey [continuing]. Is recognized.
    Mr. Sullivan. Thank you, again, for being here.
    And, you know, the economy is not doing so well right now. 
I guess we can all agree to that. And unemployment levels are 
pretty high. And why did the administration choose to embark on 
the endangerment finding amidst all this?
    Ms. Jackson. The Supreme Court ruling, which mandated that 
EPA make a finding one way or the other, was in 2007. As you 
heard, the work had been done under the Bush administration, 
but the White House didn't open the e-mails. And that really 
didn't comport with the way I saw my responsibilities as the 
EPA administrator and, frankly, as the White House, you know, 
wanted us to do our jobs. And so we have moved affirmatively in 
response to a Supreme Court decision that is now 3 years old.
    Mr. Sullivan. Well, what analyses were performed to 
determine whether a positive endangerment finding would be 
beneficial for the economy or energy security? Did you do any?
    Ms. Jackson. That isn't what the Clean Air Act requires us 
to do. The Clean Air Act requires us to make a determination as 
to whether pollutants--in this case, greenhouse gases--endanger 
public health and welfare.
    Mr. Sullivan. Whether we lose jobs or people----
    Ms. Jackson. Well, let me be very clear. Any regulation of 
a pollutant is certainly done only after an economic analysis. 
So I do not want anyone to think that means we don't look at 
the economy. No one is more sensitive to the economic impacts 
of our rules than me; I have to sign off on them.
    But I think the clean car rule is a perfect example of the 
kind of smart regulation we can make under the Clean Air Act 
that reduces our dependence on oil, reduces pollution, and 
actually helps in job growth because the automakers want it so 
that they can get back to making cars.
    Mr. Sullivan. Congressman Doyle talked about hydraulic 
fracking. And I think that is a really good method to use. That 
is how we have been able to get over 120-year reserves of 
natural gas. He talked about the Marcellus in his area. That is 
why they have been able to get so much. And I think that helps 
us from a national security perspective but also jobs. And it 
is American-made energy, and we can use it in vehicles, and it 
burns clean and all of that.
    But are you aware of how many hydraulic fracks have 
occurred in this country since it has been implemented over 
decades and decades and decades?
    Ms. Jackson. I know it has been used in the oil industry 
for all that period of time. I don't know----
    Mr. Sullivan. Well, if you are involved in something like 
that, don't you think you should know, though?
    Ms. Jackson. Well, we are doing a study specifically 
because citizens and their representatives have said that they 
are concerned that, as this Marcellus Shale, which is a tighter 
formation than we have been producing natural gas from and 
which could potentially impact groundwater in areas that are 
quite densely populated, they want to know it is safe. And I 
think that is a fair question.
    Mr. Sullivan. You know that much. But also, there have been 
a million hydraulic fracks, over a million hydraulic fracks in 
the United States. Are you aware, since you do know a lot about 
that, are you aware of any instance where it has ever gotten in 
the groundwater?
    Ms. Jackson. Well, we have several allegations and concerns 
raised in places like----
    Mr. Sullivan. No, I mean concrete evidence.
    Ms. Jackson. --Wyoming and Colorado and Pennsylvania.
    Mr. Sullivan. As the EPA director, administrator----
    Ms. Jackson. But that is why we are doing the study, Mr. 
Sullivan.
    Mr. Sullivan. I know. But, over the decades, has there ever 
been in your research--I am sure you do research and put 
information together to determine this as you move forward with 
this study. Have you seen any instance in the past, any court 
case, anyone suing someone, any verifiable evidence--that is 
what I think you have to go back towards--to see if there is 
any precedent that shows that this----
    Ms. Jackson. No, but I would say that we have seen cases 
where people have raised concerns and we haven't been able to 
say conclusively ``absolutely not.'' And that is why, rather 
than saying, ``Take our word for it,'' we are saying, ``Let's 
do a study; we will involve the industry in it, but----
    Mr. Sullivan. What if I raise concerns I think that this 
endangerment finding could be detrimental to our economy, 
sending jobs overseas, losing jobs overseas; would you address 
my concern in that?
    Ms. Jackson. We did an 11-volume copy to address concerns.
    Mr. Sullivan. There are a lot of Americans concerned about 
this legislation, this endangerment finding, and that they will 
lose their jobs. I mean they are concerned about that, 
especially my district where I have 100,000, 300,000 some-odd 
people working in the energy industry. They are scared to 
death. This is, I believe, an attempt to curtail that business. 
But I think that if we have a million of these facts and they 
are willing to list all the things that are used, mainly water 
and sand, but any chemical that is used listed, what is the 
problem? A million; I mean, that is pretty good data to use in 
your study.
    Ms. Jackson. Well, we have already seen a couple of cases 
where we can't get the data because it is confidential. So we 
don't have all the chemicals that are being injected in the 
wells.
    Mr. Markey. The gentleman's time has expired.
    Mr. Sullivan. Thank you, I do appreciate being here.
    Mr. Markey. All members of the subcommittee have asked 
questions, and I am sure everyone remembers vividly the 
unanimous consent request which I made 3 hours ago that Mr. 
Latta, if he appeared as a member of the full committee, would 
be allowed to ask questions of our witness.
    The gentleman from Ohio is recognized for that purpose.
    Mr. Latta. I appreciate the chairman's graciousness and 
unanimous consent and for being around to participate here 
today. Thank you very much. And also to our ranking member, 
thank you very much for allowing me to be here. And I 
appreciate the opportunity, Administrator, to--I think last 
time we had a discussion was on transportation infrastructure.
    But kind of to give a background again, I represent the 
largest manufacturing district in the State of Ohio and also 
the largest agricultural district. It is kind of an interesting 
vein that I run on. And Ohio, with our neighbors just to my 
west Indiana, we get 87 percent of our energy is coal-based, 
and Indiana 94 percent coal-based. And the reason I always 
bring up Indiana because I run halfway down the State of Ohio, 
along the Indiana line, so I have a lot of people working in 
Indiana and vice versa.
    As we are talking about the cap-and-trade legislation, 
especially as it is being renewed over in the Senate, as we are 
looking at it, how would this legislation benefit the farmers 
and the manufacturers and the citizens of my district? Because, 
again, when we look at the cost that is being associated with 
coal, what do I tell my folks back home? Because, again, I also 
have areas in my district that had over 18 percent unemployment 
because it is on the manufacturing sector.
    Ms. Jackson. Well, I am not going to speculate what the 
legislation in the Senate says because I haven't seen it yet. I 
can very briefly answer the question with respect to the 
legislation, for example, that passed this committee in the 
full House. And that is that because agriculture was exempt 
from much of the regulated activities, the activities, the 
agricultural industry would be able to use many actions like 
no-till farming as credits, as offsets. So there was actually 
an opportunity for farmers to make money off of decisions they 
would make about whether to keep acreage in agriculture or 
forests or how they tilled. I am certainly not an agricultural 
expert, but the opportunities were certainly there, I have 
heard Secretary Vilsack speak of them.
    Mr. Latta. Now briefly, no-till--a lot of our folks back 
home had gone to no-till, but a lot of them now are going out 
of no-till, because it is different ways of crop production 
that they are in right now. In some areas they find it is not 
conducive; they will always be in the no-till situation. So on 
a situation with credits there wouldn't be a lot of benefit.
    But we are looking at the unemployment rates, like I said, 
we have in our district. It is very, very difficult to attract 
jobs at this stage of the game out there to our area. Now, we 
have had some good news in the last week with some companies 
that are going to be expanding right now, but our fear out 
there as, I talk to people, there is a lot of angst especially 
on the business sector, small business or large business. It is 
kind of interesting, my businesses I have in my district go 
from either very, very large, from stamping plants all the way 
down to your mom and pop and tool and die jobs. A lot of folks 
out there I have talked to are very, very fearful about getting 
into increasing production or hiring people right now, because 
they just are very fearful of what could happen on the 
legislation right now.
    Again, as we do this and talk about this, it is folks back 
home that we talk to. But again it is highly, highly 
manufacture, again, in my district and folks are just very, 
very concerned.
    Ms. Jackson. Thank you. And I do appreciate that concern. I 
want you and them to know that that is something that I think 
certainly all of us as policymakers have to be quite sensitive 
to, the state of our economy. I certainly am. I do believe that 
to replace those manufacturing jobs, you need sectors to put 
them in. The ones that have gone, and gone overseas, when you 
ask yourself what we can be manufacturing, I think the clean 
cars of the future, clean energy, renewable energy. The 
President has talked about huge investments in nuclear power, 
and he also certainly talked about domestic energy resources. 
All of those are opportunities to replace those jobs. All of 
those are the kind of clean energy jobs that so many of us 
believe are part and parcel of this revolution.
    Mr. Latta. Let me ask, we were talking about on the 
manufacturing side, again, with the Chinese and Indians out 
there right now, because there is a lot of talk that they are 
not going to go down this path, and that is who our competitors 
are going to be. Again, the fear out there is that they will 
put us at an unfair disadvantage on the manufacturing side.
    But just coming off of the Budget Committee one of the 
things we have out there--thank you very much, Mr. Chairman, I 
yield back.
    Mr. Markey. No, I appreciate the gentleman. Thank you for 
your patience as well in waiting for the end of the hearing.
    Actually in the legislation, the Waxman-Markey bill, we 
exempt the agricultural sector from regulation, while providing 
opportunities are offset income; that is, it could be generated 
by practices engaged in by the farming community. So the 
exemption from being covered, combined with the economic 
opportunity of these new agricultural practices being adopted, 
we think makes it something that should be viewed by the 
farming community as a great opportunity.
    But we thank the gentleman for coming, and we also note 
that Ohio is now in the lead as a new solar technology 
manufacturing base for America. They have taken over the lead, 
so we are grateful for that as well.
    So we thank you, Madam Administrator. You did a marvelous 
job here with our committee today, and I think all members will 
say that they are impressed with your comprehensive knowledge 
of this subject.
    And again, I just want to restate the Supreme Court of the 
United States mandated that the EPA had to make a determination 
on this endangerment issue and that the Bush ERA sent arguably 
the most important climate e-mail of all time to the Bush White 
House, making this finding of endangerment, but that Dick 
Cheney was in denial and refused to accept the e-mail; which 
then necessitated you and the Obama administration having to go 
through that whole process again in order to make a 
determination, which we are now dealing with, but it is legally 
mandated by the Supreme Court of the United States.
    So it is I think it is helpful for us to know that, and to 
also know that on the decisions which are already made in 
conjunction with the White House, that any reversal of that 
would be objected to by the United Auto Workers and by the 
automotive manufacturers of the United States. And I think it 
is important for all of that to be out here and on the record.
    But we can't tell you how much we thank you for your 
appearance, how much we admire the work that you do, and we 
look forward to seeing you and your work here in the future. 
Thank you so much.
    Again, we apologize to the second panel. It was an 
incredibly distinguished panel. It actually should have its own 
day at 9:30 in the morning, with all the members here. 
Nonetheless, we are going to go right to it, and we know that 
members will return to participate in this hearing as well.

    STATEMENTS OF FRED SMITH, CHAIRMAN, PRESIDENT AND CHIEF 
    EXECUTIVE OFFICER, FEDEX CORPORATION; JASON WOLF, VICE 
   PRESIDENT FOR NORTH AMERICA BETTER PLACE; ROBERT DIAMOND, 
FORMER LIEUTENANT, U.S. NAVY, SECURITY FELLOW, TRUMAN NATIONAL 
SECURITY PROJECT; AND CHARLES DREVNA, PRESIDENT OF THE NATIONAL 
             PETROCHEMICAL AND REFINERS ASSOCIATION

    Mr. Markey. If the witnesses could take their seats we will 
begin by hearing from Mr. Fred Smith. Fred Smith is the 
Chairman, President, and CEO of Federal Express. He founded 
FedEx in 1971 and he has recently become one of our Nation's 
most important advocates for vehicle efficiency standards and 
for a national energy policy.
    Mr. Smith also serves as a member of the Electrification 
Coalition and as cochairman of the Energy Security Leadership 
Council. The Council brings together business and military 
leaders in support of a comprehensive long-term policy to 
reduce U.S. oil dependence and improve energy security.
    Mr. Smith, we are honored to have you here today and we 
welcome your testimony.

                    STATEMENT OF FRED SMITH

    Mr. Smith. Well, thank you very much, Mr. Chairman. I 
submitted testimony for the record. I am just going to make a 
few summary remarks.
    Mr. Markey. Without objection, so ordered. Your written 
testimony will be included in the record. I think you might 
have to turn on your microphone.
    Mr. Smith. Oh, sorry. Excuse me.
    As you mentioned, Mr. Chairman, I am the CEO of FedEx 
Corporation, which employs about 300,000 people in our four 
major operating units: Federal Express, FedEx Ground, FedEx 
Freight, and FedEx Office. We operate 670 airplanes, over 
70,000 vehicles. We deliver through our networks almost 8 
million shipments a day. So we have been extremely interested 
in the issue of energy consumption and energy independence. And 
as you mentioned I cochaired, with General P.X. Kelley, the 
Energy Security Leadership Council, which produced a series of 
recommendations, many of which were incorporated in the 2007 
act. And from that work came the Electrification Coalition, 
which is a group of companies which have significant interest 
in the matter of electrifying short-haul transportation in the 
United States.
    The reason that we got involved with the Electrification 
Coalition after the work that the Energy Security Leadership 
Council did is because we came to the conclusion that it was 
the most promising single area to reduce United States 
dependence on imported petroleum, and has been widely discussed 
here in this committee.
    We use about 20 million barrels of oil a day. We import now 
almost 60 percent of our oil. It was 30 percent when the first 
air embargo took place in 1973. And absent some significant 
change in our energy profile, we will continue to be subject to 
highly volatile energy prices like we experienced in the summer 
of 2008 when a barrel of oil went for $147 a barrel. And though 
it has come down today, it is still over $80 a barrel, and the 
potential for economic and national security challenges is very 
great because of that.
    We are very confident that the electrification of short-
haul transportation, including in our industry sector, is very 
real, not the least reason of which I came over here today in a 
new FedEx Express, zero-emissions, electric-powered vehicle. It 
was made by JD of Modec, a European company which has supplied 
us 15 of these vehicles in Europe; and Navistar in Illinois; 
and the batteries are produced by A123 in Michigan. The vehicle 
has about a 100-mile range, has very low operating economics.
    The issue is simply the capital cost of the vehicle 
relative to conventional vehicles. We feel very strongly that 
the price of these batteries, contrary to some other people who 
have looked at the matter, are going to come down. And in fact 
we believe in the next 2 to 5 years, the price of these lithium 
ion batteries will be at least be halved, and significantly 
more energy production per unit of density as well.
    So we think for the industrial sector in which we operate, 
as well as personal short-haul transportation where the vast 
majority of it is conducted with less than 40 miles of 
utilization per vehicle per day, should be a national goal.
    We have laid out a series of recommendations in the report 
of the Electrification Coalition which we commend to the 
committee. It has an enormous payback for the Nation. It 
significantly reduces our need to import petroleum by millions 
of barrels per day.
    The scholarship has been verified by the University of 
Maryland, and we believe that it is a very promising area. And 
I think I will stop there, if it is acceptable to you, and 
answer questions or wait until after the other testimony.
    Mr. Markey. Thank you, sir, very much.
    [The prepared statement of Mr. Smith follows:]
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    Mr. Markey. Our next witness is Jason Wolf. He is the Vice 
President of North America, Better Place. Mr. Wolf is 
responsible for overseeing the company's electric vehicle 
efforts in California, Hawaii, Ontario, and other developing 
North American markets. We thank you, sir.
    From 1986 to 1993 he served as an officer in the Israeli 
military, a country notable for having no oil. And so, 
obviously, there is an imperative from the national security 
perspective to find a solution to that problem, and technology 
is the answer.
    So we welcome you, Mr. Wolf. Whenever you are ready, please 
begin.

                    STATEMENT OF JASON WOLF

    Mr. Wolf. Thank you. And my text says good morning, but I 
guess we ran a little late. So good afternoon, Chairman Markey, 
Ranking Member Upton and committee members, whoever is left.
    My name is Jason Wolf. As you said, I lead Better Place, 
North America.
    Mr. Markey. Mr. Wolf, you still have your C-SPAN audience, 
so do not assume that----
    Mr. Upton. Twenty-five million people.
    Mr. Wolf. No pressure.
    So Better Place is the global leader in electric vehicle 
networks and services, and our mission is to end dependence on 
oil.
    Thank you for the opportunity today to come and speak about 
how we can solve the U.S.'s dependence on oil by leading a 
global transition to electric vehicles and why it is imperative 
to do so right now.
    Two years ago our founder, Shai Agassi, was here; came 
before Congress, and described a choice for our country between 
continued reliance on a single strategically vulnerable source 
of energy that fuels, as people said to you, more than 95 
percent of our transportation and an imminently feasible 
alternative path of rapid transition to electric vehicles.
    Sadly, 2 years later, the U.S. remains paralyzed at the 
same juncture, while the rest of the world in many places are 
making tremendous progress towards electrification. For 
example, as you mentioned, Israel 2 years ago made a national 
commitment to end its commitment on oil. And since, there have 
been more charge spots installed for electric vehicles in 
Israel, a small country, as there are in the entire U.S. Over 
these 2 years.
    China plans to leap-frog the combustion engine directly to 
electric vehicles, and what we are seeing is that 
electrification is not only a solution, it is the only 
plausibly possible solution that is accepted across the board. 
But even more importantly, electrification is now globally 
inevitable.
    The question before you today is will the U.S. lead this 
inevitable transition or will we land behind China, France, 
Japan and other committees in capitalizing on this commercial 
opportunity.
    Better Place's business model really enables mass 
production of electric vehicles by removing the three key 
barriers of high cost: limited range and compromised 
convenience. As a validation of that business model--and it is 
not the only one--we have raised over $700 million in the last 
2 years from private investment. We partnered with Renault to 
deliver at least 100,000 vehicles in major markets around the 
world; and we have established operations in countries around 
the world, not only Israel, Denmark, but also Australia, the 
U.S., Canada, Japan and, recently, China and France.
    Just this last week we announced collaboration with Cherry 
Automotive, which is the largest auto independent manufacturer 
and exporter. This past Monday, we launched a taxi 
demonstration in Tokyo with switchable EVs that are working 
around the clock. What this shows us is that this inevitable 
transition to EVs means for the automotive industry that their 
future is settled. The next vehicle will be driven by 
electricity.
    So the question is no longer if, but how fast will this 
transition to EVs take, and who will lead the transition? What 
is critical to understand and what we are seeing around the 
world is that governments have made a conscious choice towards 
electrification. The primary motivations for each country 
differ, from oil independence, to automotive industry 
leadership, to integrating renewable electricity into the grid. 
But the conclusion is the same. Electrification enables all 
these benefits if done correctly at scale.
    Let's talk about how the U.S. can lead. If the U.S. was 
able to reflect the true cost of gasoline, private capital 
would no doubt flow to mass transportation solutions as were 
seen elsewhere. But we have not been able to do so as a 
country, so the only way forward is to make clear national 
commitment to electrification.
    First, set an explicit national electrification policy to 
signal the market and provide clear direction towards the 
massive option of EVs.
    Second, invest in regional EV ecosystems with the goal of 
catalyzing mass market deployments that address the three 
barriers I mentioned.
    Finally, continue to fund consumer and fleet EV purchases. 
And these should be done through the year 2015. As a country, 
we can wean ourselves off oil dependency at a fraction of the 
440 billion we export every year.
    I thank you and look forward to working with you to put the 
U.S. in the lead on what we think is an inevitable transition 
to electric vehicles.
    Mr. Markey. Thank you, Mr. Wolf, very much.
    [The prepared statement of Mr. Wolf follows:]
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    Mr. Markey. Our next witness is Mr. Robert Diamond, a 
Security Fellow at the Truman National Security Project. He is 
a former lieutenant in the United States Navy, and completed 
deployments in support of Operation Iraqi Freedom and Operation 
Enduring Freedom. We welcome you, sir.

                  STATEMENT OF ROBERT DIAMOND

    Lieutenant Diamond. Thank you, Mr. Chairman. And I 
respectfully request to submit my written testimony for the 
record.
    Mr. Markey. Without objection, so ordered.
    Lieutenant Diamond. Chairman Markey, Ranking Member Upton, 
members of the committee, I am deeply honored to have the 
opportunity to appear before this panel to discuss the 
critically important topic of promoting clean energy policies 
that will reduce America's dependence on oil and the impact 
that dependence is having on our national security.
    America's reliance on oil is our Achilles heel. I 
fundamentally believe that a comprehensive strategy, one that 
cuts our addiction to fossil fuels, boosts clean energy 
technology, and moves our Nation dramatically towards energy 
independence is vital to our national security, the safety of 
our men and women in uniform, and to the fight against 
terrorism. The bottom line is this: We must put America in 
control of the energy future.
    I make these arguments before you today as a fellow 
citizen, deeply concerned about ensuring the future prosperity 
and security our country.
    I am a Security Fellow with the Truman National Security 
Project and have been deeply engaged in the debate about our 
energy security. And I am a veteran in the United States 
military, having served as an officer in the Navy for 7 years.
    In 2004, I deployed to the northern Arabian Gulf. My ship, 
a guided missile destroyer, was assigned a mission of defending 
two Iraqi oil terminals just off the southern coast of that 
country. These two terminals are the economic crown jewels of 
that country, with 90-plus percent of Iraq's oil flowing 
through them onto supertankers to take that oil to the global 
market.
    It was no secret that these terminals would be prime 
targets for an insurgent attack. In April 2004, the attack came 
in the form of the wave of two suicide boats. We lost two U.S. 
Navy sailors and one U.S. Coastguardsman, as well as four other 
service members who sustained serious injuries. The oil 
terminals, however, were safely defended.
    I tell this story because it speaks directly to why we are 
here today. At the very core of my wartime deployment was an 
energy security mission. Brave sailors and coastguardsmen gave 
their lives defending a global oil infrastructure half a world 
away. My experience is just a recent chapter in the U.S. 
Military's decade-long role of defending our global oil 
supplies, and I am not alone in feeling this way.
    Over the course of the last year, I have been part of a 
national coalition of hundreds of veterans, called Operation 
Free. These veterans have criss-crossed the country by 
biodiesel powered bus, over 25,000 miles, with one simple 
message: Secure America with clean energy.
    Retired Vice Admiral Dennis McGinn captured the national 
security dangers of our addiction to oil in testimony he gave 
before the Senate last year. He said in 2008 we sent $386 
billion overseas for oil, much of it going to nations that wish 
us harm.
    This is an unprecedented and unsustainable transfer of 
wealth to other nations. It puts us in the untenable position 
of funding both sides of the conflict and directly undermines 
our fight against terror.
    Former CIA director Jim Woolsey explains it this way: 
Except for our own Civil War, this is the only war that we have 
fought where we are paying for both sides. We pay Saudi Arabia 
$160 billion a year for its oil, and 3- to 4 billion of that 
goes to Wahabbis who teach their children to hate. We are 
paying for these terrorists with our SUVs.
    A Truman project colleague of mine conducted an analysis 
which concluded that for every $5 rise in price of crude oil, 
Putin's Russia receives more than $18 billion annually; 
Ahmadinejad, Iran, an additional $7.9 billion annually; and 
Chavez's Venezuela an additional $4.7 billion annually.
    This is clearly not in our national interest. No one is 
more acutely aware of this problem than the Department of 
Defense, and they were actually leading the efforts on breaking 
our dependency on oil. DOD is the largest energy consumer in 
the Nation, and our Nation is the largest energy consumer in 
the world.
    For example, the Navy has set ambitious goals for shifting 
the fleet to renewable energy sources. Just last week on Earth 
Day, the Navy successfully conducted the first flight test of 
the Green Hornet, an SA-18 Super Hornet fighter jet that is 
still using a 50/50 blend of conventional fuel and biofuels. 
This test was the first step in achieving Secretary Mabus's 
goal of sailing by 2012 the Great Green Fleet, a carrier battle 
group entirely powered by sustainable renewable fuel sources, 
including nuclear power. But that is just the military.
    When it comes to the rest of our Nation, frankly we are 
simply not doing enough. Congress must act. Without legislation 
from Congress too many sectors of our economy and our country 
will continue to stagger along, using the dirty fuels of our 
past. This is not a problem that can wait for future 
generations to solve. It is imperative that you, our elected 
officials, solve this problem now and enact comprehensive clean 
energy legislation that will put American power back to work.
    Part of that solution also involves making sure that our 
regulatory agencies like EPA continue to have the tools and 
authority necessary to drive this transition to a clean energy 
economy. It makes no sense to me to deny these agencies the 
robust regulatory authority they need. Doing so is the 
equivalent of pulling your troops off the battlefield before 
the reinforcements arrive; in other words, it is surrendering 
the fight.
    I close with this simple request: Help us build a new clean 
energy economy. It will make our country more prosperous, it 
will help make us more secure, and, once and for all, put 
America back in control of the energy future. Thank you, Mr. 
Chairman.
    Mr. Markey. Thank you.
    [The prepared statement of Mr. Diamond follows:]
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    Mr. Markey. Our final witness is Mr. Charles Drevna, the 
President of the National Petrochemical and Refiners 
Association. He has served as its president since 2007. We 
welcome you, sir.

                 STATEMENT OF CHARLES T. DREVNA

    Mr. Drevna. Good afternoon, Chairman Markey, Ranking Member 
Upton, and the rest of the committee. I really appreciate the 
opportunity to be here to testify on such critical issues. 
While the title of this hearing is ``Clean Energy Policies that 
Reduce our Dependence on Oil,'' I respectfully suggest that you 
focus on affordable and economically sensible clean energy 
policies.
    Such policies should favor getting more energy of all types 
from the United States and from reliable sources abroad. With 
the level playing field, the best, most efficient, and most 
effective forms in energy will triumph in the marketplace. That 
means the form of energy that delivers the BTU at the lowest 
economic cost will win.
    Most economists believe that oil and oil-based products 
provide the winning form of energy for many of our needs today, 
particularly for transportation. We and the rest of the globe 
will continue to rely on petroleum-based transportation for 
much of this century.
    We rely on petrochemicals that are the vital ingredients in 
thousands of products today and far into the future. Some 
people believe we can end our reliance on oil by simply saying 
that is what we want to do. They embrace our energy sources 
like starry-eyed lovers seeing perfection and ignoring the 
flaws. Unfortunately, there is no miracle source of energy that 
is clean, affordable, and abundant with no downside. If such a 
source existed, our Nation would have embraced it long ago and 
we would all be using it today.
    Those who say the United States must show leadership on 
climate change and related issues are absolutely correct. But 
we have to lead intelligently to find the way of a bright and 
prosperous energy and economic future. Leading recklessly in 
the wrong direction, based on homes and dreams rather than 
reality, is a plan for failure. We don't want to make a 
headlong rush into disaster modeled after Pickett's Charge.
    America is the land of ideas and freedom and has long been 
the world's leader in innovation. The government has oftentimes 
served as a catalyst to stimulate new inventions and new 
processes. But government leaders have been wise enough to step 
aside to give private sector entrepreneurs the freedom to 
transform these good ideas into reality. When governments have 
tried to pick economic winners by handing out ill-advised and 
usually expensive subsidies funded by taxpayers, the kind of 
subsidies some forms of energy depend upon today, the cost has 
far outweighed the benefits to their citizens.
    Thomas Edison literally electrified the world because of 
the tremendous benefit his light bulbs brought, not because he 
got funding on a tax on oil lamps, candles, or fireplaces. 
Alexander Graham Bell succeeded because his telephone 
revolutionized communications, not because government gave him 
cash generated by a stamp tax or tax on telegrams. And 
companies and the Internet have been able to transform our 
lives without relying on government subsidies paid for by taxes 
on telephones, typewriters, pens or other printed publications
    NPRA members embrace a future where the best ideas and the 
best products triumph in a free and fair competition and they 
embrace change. They are not against green jobs. They want to 
continue to provide jobs that are well-paying, long-lasting, 
and strengthen our Nation's economy.
    The operators of refineries and petrochemical plants want 
to keep their U.S. manufacturing operations and manufacturing 
by others in our country strong and thriving. In addition, we 
recognize a global climate change must be addressed globally. 
If the Environmental Protection Agency tries to regulate 
greenhouse gases in our Nation through the Clean Air Act, it 
risks inflicting a crippling blow to our economy. Many American 
manufacturers will take your jobs and move to foreign nations 
to escape carbon limits that limit their growth, their 
productivity, and their profitability. Those foreign 
facilities, many with emission controls far less stringent than 
ours, will generate greenhouse gases that go into the 
atmosphere shared by every Nation on Earth. The end result: No 
reduction in global carbon emissions and all gain, no pain, for 
the American people.
    For the refining and petrochemical industries, the question 
that Congress must now ask itself: Do we want gasoline, diesel 
fuel, and plastics and other products to continue being 
manufactured in the United States, or do we want this 
manufacturing outsourced so that we increase reliance on 
foreign sources of supply.
    I don't believe Congress wants to overtax and overregulate 
the domestic refining and petrochemical industry, or any other 
industry, into extinction. But overzealous policies could lead 
to disastrous effects and become a self-inflicted wound as our 
country tries to struggle to climb out of this recession. That 
would be an American tragedy that I ask you help avert.
    Thank you for allowing me the opportunity to testify today, 
and I look forward to any questions that you may have.
    Mr. Markey. OK, the gentleman's time has expired.
    [The prepared statement of Mr. Drevna follows:]
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    Mr. Markey. The chair now recognizes the gentleman from 
Washington State, Mr. Inslee.
    Mr. Inslee. Thank you, Mr. Drevna. What I want is the 
electric cars to be built here and not just in China. I am 
overjoyed to see the opening of the first manufacturing plant 
of lithium ion batteries in Holland, Michigan, which is going 
to open with Johnson Controls this fall, due to the Federal 
policy that we adopted in the stimulus bill this February.
    I am also overjoyed to tell you that on Earth Day, the 40th 
anniversary, I got to drive the first production model of the 
Chevrolet Volt which we manufactured in America. It is a plug-
in car. You plug it in, you go 40 miles on total electricity, 
which would cover 60 percent of all our trips on an average 
American day.
    The Ford Focus under Alan Mulally's leadership is coming 
out in a while. Having driven that car, tremendous 
acceleration. If you want to drive a rocket, drive the Tesla. 
And if you want a car that is on the market right now, the 
Renault Leaf. There are great things happening. We just have to 
make sure it happens here and not in China.
    Mr. Wolf and Mr. Smith, I want to ask you about sort of 
what you see as the slope of technology and cost associated 
with electric drivetrains. We know every technology has a path 
it goes on where we get better technology and decreasing costs. 
And I would just like to address what you foresee in electric 
drivetrains in the next couple of decades as far as costs. Mr. 
Wolf--you guys decide who starts.
    Mr. Wolf. I will start, actually. Mr. Smith mentioned one 
thing in his remarks about the cost of the batteries. The cost 
of the battery in the electric vehicle is the most expensive 
component, 30 percent; 50 to 60 percent in the higher, bigger 
truck-type deployment. But what we are seeing today is, if a 
year ago or 2 years ago people were talking about $1,000 per 
kilowatt hour--that is how they measured the density of the 
energy--those prices are already, 2 or 3 years later, in half. 
And the projection by DOE, not ourselves, is to $350 and below.
    Mr. Inslee. Mr. Smith, you are a hard-headed businessman. 
What do you think of those projections?
    Mr. Smith. We concur. The vehicle that I drove over here 
today, and which is all electric, as I mentioned built, by 
Navistar with the 123 battery, about 70 percent--is that 
right--about 70 percent of the cost is the battery. It is a 
very sturdy industrialized vehicle so there is no issue with 
the vehicle. We have been operating similar vehicles in Europe 
for a couple of years.
    We also operate 300 hybrids which we develop. It is just 
simply a cost of the batteries, and our guess is that in the 
next 2 to 5 years the cost of the batteries will come down, 
just as Mr. Wolf said. And at that point in time, that vehicle 
will be very cost-effective on a straight ROI basis. In other 
words, you will be able to afford it without any other 
incentive other than the fact that the reduction in fossil fuel 
consumption and the low maintenance cost of the vehicle will 
drive you to buy it.
    Mr. Inslee. Thank you for your leadership. Mr. Drevna, I 
wondered if you could put up the picture of the Terrapods 
again. I appreciate it.
    I want to ask an issue of Mr. Drevna about ocean 
acidification. Mr. Drevna, you represent the National 
Petrochemical and Refiners Association. There are a lot of 
great people who work in your organization; hardworking, 
diligent Americans. We respect their work.
    But I want to ask you about the consequences of our burning 
of oil, for our oceans specifically. The scientific community 
that I am talking to are telling me that when you burn oil, 
carbon dioxide goes out of your tailpipe; it goes into the 
atmosphere and into the oceans and into solution in the oceans. 
And when it goes into solution in the oceans it makes acid. And 
the scientific community that I have talked to said it is 
scientifically, absolutely clear, with zero doubt, that our 
oceans are 30 percent more acidic than they were before we 
started to burn fossil fuels, and that there is a likelihood of 
disruption in certain critters of the sea that could be very, 
very significant.
    We had a picture I showed earlier of what happens when you 
expose the very base of the food chain. It melts, because the 
waters are becoming so acidic by the year 2100. I guess the 
question is: Does your industry recognize ocean acidification 
as a problem, and do you agree that the science is clear in 
this regard that carbon dioxide does acidify the ocean, and it 
comes in part from your industry?
    Mr. Drevna. Mr. Inslee, I am not a climate scientist and 
never portrayed myself as one. What I am discussing today is 
what we have to do in, I believe, a systematic approach on 
energy policy. I think the question has to be asked. And I 
could maybe categorically state if this were a Lower 48 climate 
problem, perhaps some of these things that we are talking about 
today would be beneficial. It is a global--my understanding is 
it is global climate.
    My understanding also is that in EIA projections between 
now and the next 4, 5, 6 decades, the globe is going to 
continue to be dependent upon fossil fuels, including 
petroleum, to a great extent. Our position is, let's look at 
what makes economic sense for the country.
    I have described our energy policy here in the United 
States as a children's soccer team. We look at the energy 
source de jour, and we all gather around that. And 5 or 6 years 
ago, it was hydrogen; then it was ethanol.
    Hey, the electric vehicle, all these things have benefits; 
but let's do it in a systemic, economically viable way and not 
rush to get ourselves off on something the rest of the world is 
going to do, to our economic detriment.
    Mr. Inslee. Thank you. If you hear anything different than 
all the best of the world scientists, let me know because I 
think we have got a problem. Thanks.
    Mr. Markey. The gentleman's time has expired.
    The chair recognizes the gentleman from Michigan, Mr. 
Upton.
    Mr. Upton. Thank you. Mr. Smith welcome, nice to see you 
again. I am cochair of the Auto Caucus, second largest caucus, 
a bipartisan caucus, and I am a very strong supporter of 
electric hybrids. And for me--I stepped out briefly to talk to 
the president of Western Michigan University. He was in town, 
really on this issue to a degree, but one of the things that I 
have seen Western Michigan University do is they have begun to 
transform their utility fleet in fact to electric vehicles. 
They have their own power plant in Kalamazoo, they charge them 
up at night. They are perfectly quiet. I think they operate, as 
I recall, at about 2 cents a mile versus the old costs. 
Obviously they are perfectly quiet; they are able to do all of 
the activities within the campus, and it is a sizable campus. 
And the cost for these new vehicles was almost the same--
meaning the initial cost, purchase price--as the older vehicles 
that they replaced.
    I am also very fortunate to have Eaton in my district, a 
very large truck engineering firm in Galesburgh, Michigan, just 
outside of Kalamazoo. I have gone to see their electric hybrids 
and what they want to do with the utilities, so you don't have 
to have the vehicle with the arm up as they are fixing the 
wires--or whatever it is that they are doing--running on that 
diesel all the time. It has got the hybrids and it is 
significant savings, but the cost is higher per vehicle.
    Mr. Smith, you have indicated about, what, 15 vehicles, 
electric hybrids, that are now within your operation?
    Mr. Smith. We have 15 all-electric, but----
    Mr. Upton. I know you have a zillion vehicles.
    Mr. Smith. We do have over 70,000 in our operation. But I 
am not sure you are aware of this; that the hybrid that you 
mentioned in Eaton was developed in partnership with FedEx.
    Mr. Upton. I have seen them.
    Mr. Smith. We have about 300 of those in service. We have 
one of our express pick-up and delivery locations in the New 
York City area which is completely hybrid. They are very----
    Mr. Upton. The range is 100 miles; is that right?
    Mr. Smith. The all-electric is a hundred miles. The hybrid 
electric is the same as the conventional powered vehicle. We 
get about 40 or 50 miles on the electrical charge, and then you 
use the conventional engine. The problem with the hybrid that 
we are just discussing is the capital costs, because you in 
essence have two power plants reciprocating. I mean, internal 
combustion and electric make the capital cost very difficult to 
overcome unless the price of diesel is up in the $5-1/2 area.
    The all electric, on the other hand, which would be 
obviously shorter range, the one I came over in here today, has 
about a 100-mile range. But presumably if the battery cost 
performance goes down on a curve, Mr. Wolf and I think that 
it--I should say, in my case, our experts think; he probably 
has real knowledge. I am just telling you what our people 
think. Then in about someplace between 2 to 4 years, the all-
electric pick-up and delivery vehicle, utilized in an 
environment where its range is not an issue to us, would have a 
positive return on investment and be competitive pricewise when 
you take operating and capital costs. So the hybrid, like the 
Eaton FedEx truck, has a capital cost barrier that is hard to 
reach.
    Now, there is a third iteration, of course, which is the 
approach that Chevrolet has taken with the Volt. There you have 
the electric power as the primary engine, and you have a small 
internal combustion engine you use as a generator. I personally 
think that has an enormous amount of promise. And some 
combination of all-electrics and the Chevy Volt approach----
    Mr. Upton. They actually think the Volt will be a good 
number of them. Because of the range, it will never use an 
ounce of gasoline, and it will always be on the electricity 
because it uses the backup----
    Mr. Smith. Right.
    Mr. Upton. The question I wanted to get to, even with the 
Volt, 50,000 vehicles will be sold this year, particularly on 
the east and west coast and here Washington as well. They still 
predict that by the end of this decade, they are not going to--
with all the electric hybrids--not be able to penetrate more 
than a 15 or 20 percent market share. And so we will still rely 
significantly then on the petroleum-based vehicle. So it is 
going to take some time to get where maybe a lot of us want to 
go.
    Last question, Mr. Drevna, and then I am out of time. We 
had this testimony last year from Lion Oil, that if the clean 
air bill goes through, 1,200 jobs that are going to be moving 
out to a new refinery in India. We all care about the planet, 
we all do. What is the cost of the regulation per unit of fuel 
in this country versus someplace else that won't have these 
regulations, that one of those jobs might go? Do you know?
    Mr. Drevna. I could hope to get that back to you in 
writing. I don't have that with me today. I can tell you, 
though, that the market is won and lost on pennies, and just 
driving up the cost of domestic production, given the state 
that the domestic refinery and petrochemical industries 
economic state we find ourselves in today, and for the 
foreseeable future, that it is no secret that India, with their 
plant in Reliance, are looking at the United States to export 
vast quantities of fuel at the domestic refiner's expense.
    Mr. Markey. The gentleman's time has expired. The gentleman 
from Vermont, Mr. Welsh.
    Mr. Welsh. Thank you very much, Mr. Chairman. A few 
questions, Mr. Drevna. I am sorry I wasn't here for your 
testimony, but had a chance to review it. I want to make sure I 
understand it.
    You did testify that the best energy policy is one that 
creates a level playing field; is that more or less right?
    Mr. Drevna. Absolutely, sir.
    Mr. Welsh. It allows the most cost-competitive form of 
energy to win out.
    Mr. Drevna. Correct.
    Mr. Welsh. Page 5 in your testimony stated: NPRA members 
paid billions of dollars in taxes rather than consume billions 
of taxpayers subsidies. Correct?
    Mr. Drevna. That is correct, sir.
    Mr. Welsh. So here is a question that I think a lot of us 
struggle with. I want to ask if NPRA would support the removing 
of several subsidies in the Tax Code which some folks think 
would provide a level playing field.
    Let me go through these. My understanding is that section 
199 of the domestic production incentive provides a tax rate 
reduction on refinery income; and that subsidy is, according to 
CBO, expected to cost taxpayers about 14.8 billion for 10 years 
for the oil and gas industry. Would your association support 
repeal of that tax subsidy as it applies to energy companies?
    Mr. Drevna. Absolutely not, sir. And let me tell you, if 
you recall the genesis of the section 199 credit, there was 
going to be a WTO charge against the United States on the 
subsidizing unfairly domestic manufacturing, of which refining 
is, all manufacturers, whether you are producing gasoline or 
loaves of bread. So in the Jobs Act----
    Mr. Welsh. Let me interrupt you, and welcome back. I just 
want to go down some of these. What I understand you saying is 
you think there is a reason----
    Mr. Drevna. There is a very valid reason.
    Mr. Welsh. So you oppose repeal?
    Mr. Drevna. Yes.
    Mr. Welsh. The Tax code, as you know, includes a bonus 
depreciation provision for oil refineries, and it allows 
refiners to immediately write off 50 percent of the capital 
cost of certain refinery expansions. That is the benefit that 
the CBO estimates will cost taxpayers 3.5 billion over the next 
5 years. Would your association support repeal of that energy 
tax subsidy?
    Mr. Drevna. No, sir. And the history of that was the EPAC 
05, in the negotiations in this very room on the best path 
forward to continue to provide domestic----
    Mr. Welsh. So you not only oppose repeal but you defend 
extension?
    Mr. Drevna. Yes, sir.
    Mr. Welsh. Finally, I understand that until recently a tax 
credit was available for complying with EPA's low-sulfur diesel 
requirements, and an extension of this credit is included in a 
pending Senate tax extenders bill, which I am sure you are 
aware of. That is estimated to be a $20 million cost to the 
taxpayers. Does your association oppose the extension of this 
energy tax subsidy.
    Mr. Drevna. Oppose the extension? No, sir.
    Mr. Welsh. So you like that one, too?
    Mr. Drevna. Again, sir, in a vacuum you look at each one of 
these things and say, what are they? But when you look at the 
history of them----
    Mr. Welsh. Well, I get it; you are here doing your job and 
you have a case to make for why these tax subsidies should be 
extended to your industry. And you are representing the 
refiners, and it is your job to help them look out for their 
viability and bottom line.
    Obviously, we in Congress, both sides of the aisle, have a 
broader set of concerns. The energy policies have to factor in 
the things you raise--national security, environmental 
protection and consumer protection. So what is one person's 
subsidy is a competitor's disadvantage.
    So the question that I think is begging is whether there is 
a level playing field when there are taxpayer subsidies that 
apply to one form of energy but are denied to another form of 
energy.
    Mr. Chairman, I yield back.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Texas, Mr. Burgess.
    Mr. Burgess. Thank you. Mr. Smith, if I understood the 
figures you gave us a few minutes ago correctly, you have 
70,000 vehicles in your overall fleet and, of that, 300 
hybrids; is that correct?
    Mr. Smith. [Nonverbal response.]
    Mr. Burgess. Peterbilt Company in Denton, Texas makes a 
great hybrid. I would encourage you to look at that. They get 
great mileage, and they are quiet, and low-emission vehicles, 
which is critical in our part of the world, because we do have 
some air quality issues. Did you give us a figure on the number 
of total electric vehicles you currently have in your fleet?
    Mr. Smith. We have, I think, 15 in Europe that we are 
running experiments on in prototype, and we have four that we 
just put out in Los Angeles which we will be running the 
experiments on. Again, they are definitely not cost-effective 
from a capital standpoint at this point.
    Mr. Burgess. Out of curiosity, what is the cost currently 
of an all-electric vehicle for your purposes?
    Mr. Smith. I think we have a non-disclosure with the 
manufacturer, but let me put it this way. If you take an 
equivalent size van, which is roughly a Freightliner or 
Sprinter, and you take the all-electric vehicle, it is about 2-
1/2 times the capital cost; but 70 percent, perhaps more, of 
all-electric is the battery cost. So if it comes down the price 
performance curve that we projected, you get out about 4 or 5 
years and you have a positive return from the all-electric.
    Mr. Burgess. Sure. The cost of chassis and the frame is not 
going to be any different.
    Mr. Smith. No, it is not any different.
    Mr. Burgess. And with electric vehicles, ultimately, at 
least in my part of the world, you are charging that with 
electricity; but the electricity is not a gift, it is generated 
by burning natural gas and coal in most Texas power plants.
    We have one nuclear plant in Comanche Peak which I 
understand is going to be expanded, and I am grateful for that. 
But we have lost 25 or 30 years of nuclear technology by taking 
ourselves out of that. And it would seem to me that a power 
grid, supplied by a nuclear plant which was providing the 
baseload, really would be--if we were talking about a carbon-
neutral environment and a fleet that is of electric vehicles 
for the type of deliveries that you do, that would be the 
almost ideal situation, would it not?
    Mr. Smith. Well, in the Energy Security Leadership Council 
report that I referenced, we strongly endorse nuclear power. 
And you are completely correct that that would be a zero-
emissions production of power and a zero-emissions from the 
vehicle that was powered by the nuclear power plant.
    But it is also important, which is in the Electrification 
Coalition's report that I mentioned, we have the capability in 
this country to power many, many millions of electric and 
hybrid electric vehicles with the off-peak power production 
that we already produce with the coal plants or natural gas 
plants or what have you. And the reason for that is that the 
power can't be stored during the night, so it is just a matter 
of relatively. And I don't mean to minimize the complexity of 
it. But it is relatively easy to modify the infrastructure and 
the charging stations at the homes or the apartment to do it.
    Mr. Burgess. Let me move on quickly now. Have you looked at 
those in your business--have you looked at the use of natural 
gas for your heavy vehicles, your cross-country vehicles?
    Mr. Smith. We have. And our belief is that the best use of 
natural gas is for heavy, centrally fueled vehicles, like 
garbage trucks, buses, and so forth, or for the generation of 
electric power. Long-haul truck transportation, whether it is 
fine products or Peterbilt or Freightliner or so forth, are 
probably better served, in our opinion, by the advanced diesel 
technologies because of the infrastructure problems.
    Mr. Burgess. But of course the infrastructure problem is 
something that, regardless of the fuel of the future and 
recognizing that hydrocarbons are going to be the transitional 
fuel for a while, but the fuel of the future is going to 
require an infrastructure investment. And whether we call it 
investment or subsidy, it is going to be required.
    But I do agree that we, in Congress, really should not try 
to pick winners and losers. That ultimately should be decisions 
based, just as you are doing it right now, based upon what is 
economically viable for your company. It is hard enough to make 
a living today without us complicating it for you.
    If I could just ask you one quick question. And we 
understand the problem with climate change is a global problem. 
And I certainly appreciate your service and appreciate the 
wisdom that you have brought for us today.
    When I visited with the Iraqi oil minister, I believe his 
name is Dr. Shahirstani, he is a Harvard-educated petroleum 
engineer, he assured me that none of Iraq's oil was going to 
be--was involved--there were no Chinese contracts involved with 
Iraqoil. And yet I hear from individuals like yourself coming 
back that the Chinese were all over Basra in 2005, 2006, 
looking to tie up oil contracts.
    Do you have any insight for us as to what is going on 
there?
    Lieutenant Diamond. I don't have any firsthand knowledge of 
Chinese presence on the ground in my time in the country, sir.
    Mr. Burgess. And, again, I appreciate the problem. We want 
to produce American energy for a security standpoint. But on a 
global standpoint, from the carbon production and the 
pollution, we do have to be mindful of what is happening in 
those other countries.
    Lieutenant Diamond. Absolutely. You see a Chinese Navy now 
that is looking to make a global presence and building itself 
aircraft carriers and submarines that are defending their own 
energy, free flow of energy around the world. Yes, sir.
    Mr. Burgess. Thank you, Mr. Chairman. I yield back.
    Mr. Markey. Great. The gentleman's time has expired. The 
chair recognizes himself for a round of questions.
    Let me ask you this, Mr. Smith. And I think it is important 
for us to say because the gentleman from Texas and the 
gentleman from Louisiana who are here obviously want to protect 
the oil industry and Texas and Louisiana. We don't have any 
problem with the 8 million barrels of oil a day that are 
produced here in the United States. Do we?
    Mr. Smith. No, Mr. Chairman. In the Energy Security 
Leadership Council report, which we produced--and, remember, 
there were 10 four-star generals and admirals who had spent a 
great percentage of their careers protecting the oil trade, as 
the Lieutenant exemplifies in more recent times, and the 
businesses were large energy consumers like us and Southwest 
Airlines, Royal Caribbean. The basis of the recommendations we 
made were, number one, maximize U.S. domestic production of oil 
and gas for sure. So it is definitely not in conflict with that 
at all.
    Mr. Markey. You support President Obama's decision to begin 
to open up additional parts of the Outer Continental Shelf?
    Mr. Smith. Absolutely.
    Mr. Markey. So your problem is with the OPEC oil.
    Mr. Smith. Our problem is that the oil market is not a free 
market. It is managed by OPEC in a manner which, if it were 
done in the United States, would be illegal with supplies 
withheld and the market price--with their attempt to set the 
market price. The problem is it then becomes a social 
geopolitical weapon or an issue between us and China. And, by 
the way, we have huge operations in China. Been there 25 years, 
fly many 777 flights there every day.
    So this oil problem for the first time is different, 
because it is being driven by demand increase and not just by 
supplies being withheld. And those are the seeds of a future 
confrontation among the nations of the world and why we need to 
minimize the importation of petroleum and fossil fuels in this 
country from potentially unfriendly regimes.
    Mr. Markey. So could you talk a little bit as a result 
about the economic impact on the United States of having the 
price of oil set overseas in terms of its equivalence from 
being attacks on individual Americans. Because I think that is 
an important translation for the American people to hear. They 
are economically impacted by having this price of oil set 
overseas.
    Mr. Smith. Well, the costs are incredible, really. The 
Department of Energy did a study, and the estimate in real 
dollars between 1970 and 2008 of our dependence on foreign 
petroleum was over $5 trillion. In 2008, when the price of oil 
ran up to $147 per barrel in the summer, the price that year 
was about $600 billion total to our economy, and it was $388 
billion in terms of adverse balance of trade and it was about 
56 percent of our total trade deficit. It was enormous.
    Mr. Markey. So this oil that we import--again, and this is 
just for the members from Louisiana or Texas or other oil 
producing States. We are not talking about that oil. None of 
this discussion is about Louisiana or about Texas. It is about 
Saudi Arabia, it is about other countries that we import the 
oil from. That is the strategy that we are trying to construct 
that deals with that issue. So we are not in any way trying to 
deal with this domestic industry.
    So talk a little bit, if you could, about what that balance 
of payments issue means in terms of the American economy as 
well. What is the economic impact on our country?
    Mr. Smith. Well, in the summer of 2008--people forget this, 
at their peril--while the great financial meltdown was because 
of the subprime mortgage situation, and that was the bonfire 
that almost consumed us, the match that lit it off was the run-
up in fuel prices, where the subprime borrowers of these 
mortgages literally had to make the choice between making the 
mortgage payment or paying for the gas to go to and from work.
    It is also important to recognize that each of the four 
other major recessions that the United States has experienced 
from 1973 forward was precipitated by a significant run-up in 
oil prices.
    Mr. Markey. And you believe that the recession that we are 
still in was precipitated by that run-up to $147 a barrel?
    Mr. Smith. No question that that was, as I said, the match 
that lit off the financial meltdown in the summer of 2008.
    Mr. Markey. And, again, that didn't have anything to do 
with Louisiana or Texas or Arkansas' oil production. That had 
to do with what was going on overseas that put us at the mercy 
of OPEC.
    Mr. Smith. No question.
    Mr. Markey. So I just think that is important going 
forward, that we continually divide this question between the 8 
million barrels of oil that we produce here and the 11 or 12 
million barrels of oils a day that we import, again, as 
Lieutenant Diamond said, from places that we probably should 
not be importing them from.
    Lieutenant Diamond, would you care to comment?
    Lieutenant Diamond. Just a fact, Mr. Chairman, when you 
talk about cost, for every $5 increase in the price of a barrel 
of oil, that costs the Department of Defense $1.7 billion. That 
is larger than the procurement budget of the United States 
Marine Corps. So when you talk about the scope of price impact 
on the Department of Defense, it is tremendous.
    Mr. Markey. So repeat that again. And that goes right down 
to the American taxpayers.
    Lieutenant Diamond. Exactly.
    Mr. Markey. So explain that a little bit more.
    Lieutenant Diamond. So for every $5 increase in the price 
of a barrel of oil, that costs the Department of Defense an 
additional $1.7 billion in energy costs. That is more money 
just spent on energy costs than we actually are spending on 
procuring equipment and bullets and tanks for the Marine Corps.
    Mr. Markey. So that comes right out of our defense budget?
    Lieutenant Diamond. Right out of our troops' pockets, is 
what I am trying to say, sir.
    Mr. Markey. So that is terrible. So there is no question 
that we need a plan that we put in place to have a different 
pathway for our consumption of oil from a national security 
perspective.
    And, Mr. Wolf, Israel has made that decision: They do not 
want to import oil.
    Mr. Wolf. Israel has made the decision that, by 2020, to be 
oil independent, which doesn't mean that their local 
production, which someone said is zero, they have some 
production. It doesn't mean that they are going to stop 
producing locally.
    And one point to just clarify the linkage between economics 
and oil, in the last 12 months we have seen the most nascence 
of economic recoveries, and the price of oil has recovered 70 
percent in the last 12 months. So we have to see that linkage 
and ask ourselves, what is the size of the next stimulus that 
we have to put if we reach those heights that we did in 2008.
    Mr. Markey. My time has expired. Let me turn and recognize 
the gentleman from Louisiana, Mr. Scalise.
    Mr. Scalise. Thank you, Mr. Chairman. I am glad we are 
talking about this issue, because in fact many of the policies 
that are being proposed by this administration that are 
threatening America's energy security. And when we talk about 
wanting to reduce our dependence on foreign oil, and especially 
Middle Eastern oil, I strongly agree with that. The problem is, 
many of these policies, like cap-and-trade, this energy tax, 
like the removal of tax incentives to explore in America, are 
going to make us more dependent on foreign oil. And so some of 
the same people who keep saying, because it sounds good to 
them, I guess, that they want to reduce our dependence on 
foreign oil, are proposing policies that would make us more 
dependent on foreign oil. And so we have got to be clear about 
how the policies adversely affect our energy security. And we 
are seeing some of those things play out right now.
    And I want to ask Mr. Drevna, when we talk about this EPA 
finding--and we had EPA Administrator Jackson here earlier 
today--as they try to regulate greenhouse gases, what kind of 
impact does that have on American energy exploration?
    Mr. Drevna. Well, I can talk about what impact it will have 
on American domestic refinery production. What the--and the 
tailoring rule will do is naturally it will exempt for a while 
a lot of sources, and it will focus on larger sources. And we 
can debate whether that is legal or not and whether it is 
congressional intent or whatever.
    However, just to simply have a greenhouse gas 
CO2 requirement will automatically--on these 
resources and refineries and petrochemical facilities, it will 
automatically make you go through a PSD review. Now, PSDs are 
going to say, well, whatever you increase, whatever it is above 
that threshold, you have got to put the best available control 
technology on. Well, in a refinery or petrochemical facility, 
what is best available control technology for CO2?
    At the same time, where we are making cleaner and cleaner 
fuels that require more and more robust kinds of processes, 
hydro-treaters, that actually increase CO2.
    So we are caught in this vicious circle that says, OK, we 
are going to put back on a refinery that doesn't exist--that 
the back doesn't exist. But you are going to have to increase 
your CO2 emissions because we want you to make 
cleaner and cleaner fuels. There is only one way of doing it, 
and you are going to have to reduce production. And the 
question----
    Mr. Scalise. And if we reduce production, where would that 
go?
    Mr. Drevna. Well, it is going to go overseas.
    Mr. Scalise. What countries would be primarily the 
beneficiaries of a cap-and-trade energy tax?
    Mr. Drevna. As I said before, India and that Reliance 
Refinery there is a massive, massive facility with a target on 
the United States.
    Mr. Scalise. And so, in walking all the way through this, 
as countries like China and India take more of our jobs from 
these reckless policies, what are the environmental regulations 
that a country like India has on refining? Would they be 
refining with these same kind of emission standards?
    Mr. Drevna. Not when it comes to CO2 or not when 
it comes to the other myriad of environmental rules that we 
have here.
    Now, I am not saying that these plants aren't efficient and 
clean. But they don't have the myriad of rules that we do. And 
this is a good hearing to talk about this, because we are 
talking about reducing our reliance on foreign oil, but a lot 
of these policies are going to increase our reliance on foreign 
imported products, finished product, not crude oil, but the 
gasoline and the components that make up gasoline.
    Mr. Scalise. And the irony is the jobs that would go to 
those countries, I mean, we have seen numbers. National 
Association of Manufacturers says cap-and-trade energy tax or 
similarly some kind of EPA ruling would cost millions of jobs 
just in the first year that would leave our country. But the 
irony is, for the folks who say they want to go and reduce 
greenhouse gas emissions because that is destroying the planet 
with global warming, you would have increased greenhouse gas 
emissions, because when China gets those jobs, when India gets 
that refinery, they are actually going to be emitting more 
greenhouse gases than if that was done here in the United 
States.
    So we lose jobs and we lose billions of dollars in our 
economy, surely at a time when we want to be doing the 
opposite; we should be creating jobs. But what is worse is we 
have an increase in greenhouse gas emissions. So the folks that 
are running around saying manis destroying the earth, we need 
to have cap-and-trade, what they are going to do in effect is 
increase greenhouse gas emissions through their policies.
    And I know you have talked about it. We have other 
companies and industries that have come and laid it out, and we 
are seeing it. We are seeing companies already pull back and 
start moving operations overseas.
    In south Louisiana there is a steel plant that is going to 
go one of two places, they are going to go in south Louisiana 
or they are going to go to Brazil. And the irony is, in Brazil 
they would get over 700 good high-paying jobs that we otherwise 
would have had, $2 billion, with a B, $2 billion of private 
investment, not government bailouts, private investments. And 
it takes four times the amount of carbon--four times the amount 
of carbon--to produce steel in Brazil than it would in the 
United States under our current rules. And so you would 
actually increase emissions.
    And one last thing. The National Highway Traffic Safety 
Administration, they have said that they have the authority to 
establish their own CAFE standards without the EPA doing their 
own thing. I have got a letter from the National Automobile 
Dealers Association talking about that that I would like to 
have unanimous consent to enter it into the record. I know we 
don't have time to talk about it.
    Mr. Markey. Without objection, it will be included in the 
record.
    [The information was unavailable at the time of printing.]
    Mr. Scalise. Thank you. And I yield back.
    Mr. Markey. The chair recognizes the chairman of the full 
committee, the gentleman from California, Mr. Waxman.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    I am trying to think through the cost to this country of 
ever increasing oil prices. Between 2001 and 2008, the average 
household doubled its spending on gasoline. That is 7 years. 
And many of us remember the soaring costs that we had in the 
fall of 2008 when gasoline prices reached more than $4 a 
gallon, and may be coming back as our economy improves.
    Now, there are companies that rely on oil in the course of 
their everyday business, and they certainly feel the impact. If 
these companies feel the impact, they have to figure out how to 
deal with it and may have to close up. That is a loss of jobs.
    Now, there is a cost not just to the individuals and the 
businesses, but to the taxpayers. For instance, the RAND 
Corporation estimated that the cost to American taxpayers of 
protecting oil interests abroad at between $67 billion and $83 
billion per year. That is a lot of money.
    So, Mr. Smith, let me start with you. You testified that 
while oil prices are lower today than they were last summer, 
many of the fundamentals that pushed oil prices up are still 
present today. Can you tell us how important fuel costs are to 
a company like yours and why it is in the Nation's economic 
interest to adopt a clean energy policy?
    Mr. Smith. Well, Mr. Chairman, FedEx Corporation is about a 
$36 billion corporation, and we are one of the largest fuel 
users in the country. I think combined jet fuel, obviously our 
express company is an enormous user of that. It is the biggest 
air transportation system in the world and certainly the 
biggest all-cargo network in the world. So we burn in excess of 
1.5 billion gallons of fuel every year, and the cost is a major 
consideration for us.
    But the consideration is much greater in the damage that it 
does when prices run up to the overall economy than to just our 
company, because what we do is we have an established fuel 
price and then we adjust it each month based on the run-up or 
the run-down on fuel prices. Now, over the years we have had to 
vastly increase that base price.
    But as I mentioned a moment ago, the difference this go-
round compared to the other major oil crises since 1973--and I 
have lived through all of them. It is for the first time this 
is a demand-driven situation, where the rise of China and India 
and the other developing nations and geopolitical 
considerations mean that there is likely to be significant 
spikes in the price of oil like we experienced in 2008, right 
before the financial meltdown, or military confrontations over 
the issue. People forget at their peril that World War II for 
this country was triggered by the United States embargoing oil 
to the empire of Japan. That is what caused--the proximate 
cause of the war.
    So we need as a country to reduce our dependence on 
petroleum imported from unstable and unfriendly regimes in 
parts of the world. And with that, not only do you get 
increased national security, better economic productivity, but 
as far as we can see, the technologies that can do that will 
vastly improve the environment as well. So you get a troika 
there.
    Mr. Waxman. It is a win-win.
    Mr. Smith. It should be a win-win.
    Mr. Waxman. Do you buy this argument that Mr. Drevna is 
making that the oil companies will have to go overseas, they 
will have to locate overseas, we will lose domestic jobs?
    Mr. Smith. Well, I am not an expert on his sector. I think 
it is the chemical processing companies that are probably, and 
the refineries, that are most at risk.
    What we have advocated is maximization of U.S. oil and gas, 
as well as nuclear power, battery power, wind, solar. In fact, 
we have I think with our installation in New Jersey at our 
Woodbridge FedEx ground hub, I believe that is the largest 
solar industrial location in the country at present.
    So we have got to do all of those things. I just don't know 
enough to speak authoritatively about his sector.
    Mr. Waxman. Well, you are looking at it from the impact on 
your company and the economy and Mr. Wolf is looking at what it 
will cost consumers if we move away from oil, and it would be a 
huge benefit. And, Mr. Diamond, you have firsthand experience 
in the military guarding Iraqi oil terminals. And I want to 
commend you for your service to this country. I guess your 
salary was part of that what RAND estimates $83 billion per 
year protecting our access to oil. And I think, if we reduced 
our dependence on oil, that can mean a lot in terms of savings 
for the Armed Services and limiting our involvement in places 
where we will not need to be. Is that right?
    Lieutenant Diamond. Absolutely, Mr. Chairman. And also, not 
to sound over dramatic, but the military also measures its cost 
in human lives when you are talking about our involvement 
overseas, not just dollars or jobs.
    Mr. Waxman. Well, clean energy legislation would deprive 
Iran of $100 million a day in oil revenues. And what are they 
using that $100 million a day to do? It is not in our interest 
that they have that money to spend to become a military force 
that can threaten our allies like Israel and interests of the 
United States elsewhere in the Middle East, and maybe even the 
United States itself.
    Thank you very much, Mr. Chairman. I yield back the balance 
of my time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the ranking member of the full committee, Mr. 
Barton.
    Mr. Barton. Thank you, Mr. Chairman. The beauty of 
television, I could watch Mr. Waxman in my office and for once 
I timed it just right. I had a very nice lunch, too. So I am 
glad you all were here while I was eating lunch.
    Mr. Markey. I don't think our witnesses wanted to hear 
that.
    Mr. Barton. I know. We do appreciate each of you gentlemen 
being here. I know it has been a long day.
    I want to start with Mr. Drevna. You talked in your 
statement about the form of energy that delivers a BTU at the 
lowest economic cost and that a free market economy wins. Does 
economic growth in this country depend on the source of the BTU 
or the cost of the BTU?
    Mr. Drevna. I think it depends upon the cost. I mean, the 
American consumer deserves the most efficient, the least cost 
approach. So I would like to clarify something here. Let's make 
a difference between the imported crude and its effect on the 
economy.
    The domestic refining industry is the first customer to be 
impacted by high-priced oil, and you have seen the results of 
this impact and what the state of the industry has been since 
it went up to $147 a barrel, and then with the recession. You 
know, we don't like paying high prices for oil any more than 
the consumer at the pump.
    So, I mean, the programs--and I agree wholeheartedly with 
Mr. Smith's comment. I think I said it, and if I didn't state 
it clearly enough, I will try to repeat it. We have to cover 
the field. We have to make sure that the U.S. energy policy 
provides the proper incentives for the entrepreneurs to develop 
these kinds of technologies. But we can't flip a switch and 
automatically transform ourselves into a non-oil reliant 
country. We have plenty of resources here in the United States. 
Let's start using them and end that reliance on so much 
imported oil.
    But even at that, you have got to realize where the 
imported oil comes from. Most of it comes from North and South 
America. And if we do our own resources, we can put a big dent 
in that, in the rest of our imports.
    Mr. Barton. Mr. Smith, I didn't read your testimony, so I 
am kind of shooting in the dark here, which is not a good 
thing. You should know the answer to the question you ask 
before you ask it. But I know a lot of your reputation as a 
straight shooter, so I am going to take a shot and see how you 
respond.
    Have you followed the endangerment process that the EPA has 
used to come up with their endangerment finding?
    Mr. Smith. Not to the extent that I was exposed to it this 
morning. But I got a pretty good tutorial on it.
    Mr. Barton. Well, Administrator Jackson admitted that if 
you find that the endangerment finding is not done properly; in 
other words, if you repeal that or dispose of it, under current 
law the EPA does not have the authority to regulate 
CO2 as a pollutant under the Clean Air Act. If you 
put a price on carbon because of this endangerment finding, it 
is obvious that you are going to raise the price of doing 
business for a business like yours, which I don't know what 
your cost of aviation fuel is, but it has got to be--and your 
trucks on the ground, but it has got to be a considerable cost 
of business. So anything to regulates CO2 is going 
to raise your business cost.
    Do you feel you know enough to give an opinion whether the 
endangerment process that the EPA has used is appropriate or 
not?
    Mr. Smith. I am not qualified to make that statement one 
way or the other.
    Mr. Barton. That is fair. Did you put in your testimony 
anything about what the cost to your business would be of 
putting a price on carbon under the proposed Waxman-Markey 
bill?
    Mr. Smith. No. I didn't put anything in the testimony. I 
did say, when you were out of the room, though, that FedEx 
Corporation is roughly a $36 billion company, and we are the 
largest air cargo, air transportation system by far and we 
operate over 70,000 vehicles. So we burn north of 1.5 billion 
gallons of fuel. So anything that increases the cost of energy 
obviously would affect us. But, much more importantly, since 
the way we handle this is to have a base price of fuel in our 
rates and then pass along increases with fuel surcharges, the 
effect would be to our customers even more than us.
    Mr. Barton. Is there anything in the research phase that 
takes the place of hydrocarbon aviation fuels as a fuel source 
for your airplanes?
    Mr. Smith. Well, the answer to that is, from a technical 
standpoint, absolutely yes. The aviation industry has shown 
that jet fuel is made from Jatropha, from Camolina, and from 
algae can be intermixed with Jet-A. And the fuel efficiency, in 
other words per BTU of power produced by the gallon of the 
biojet, is actually greater than the Jet-A and it burns 
cleaner.
    So the technical issue is really not much in question. I 
think the Lieutenant mentioned that the Navy flew an F-18 
Hornet and they called it the Green Hornet just the other day.
    So from a technical standpoint it can be done. The issue is 
whether you can get the cost of production to a cost effective 
level.
    Mr. Barton. Thank you. Thank you, panelists, and thank you, 
Chairman Markey.
    Mr. Markey. Thank you, Mr. Chairman, very much.
    We were about to complete the hearing, but the gentleman 
from Illinois.
    Mr. Shimkus. Mr. Chairman, I said, with respect to you and 
the staff in the next hearing that is supposed to be starting 
in about 1 minute, I will forego any further questions.
    Mr. Markey. And will the gentleman from Kentucky also take 
that position?
    Then let's do this. We will wrap up the hearing this way. 
We are going to ask each one of you to give us the 1 minute you 
want us to remember from your testimony. We are going to do it 
in reverse order of your original testimony. We will begin with 
you, Mr. Drevna.
    Mr. Drevna. Thank you, Mr. Chairman. One minute. OK. I 
think that there is a lot of misunderstanding and 
miscommunication as to where the energy is going to come from 
for this country going forward. I think--I believe that, as I 
said before, we have got to make a decision: Do you want to 
continue a strong, robust domestic refining and petrochemical 
industry here? And, if we do, we can certainly work toward 
alternatives and we can certainly work toward supplements. But 
for a long time we are going to be dependent upon the 
hydrocarbon molecule. And the people who can deliver that 
molecule at the least cost are going to be the economic 
winners, and I sure hope it is the good old USA and not some 
foreign nation.
    Mr. Markey. Thank you, Mr. Drevna. Lieutenant Diamond.
    Lieutenant Diamond. It would certainly be the takeaway, 
sir, that, again, these current conflicts where America has put 
itself in a position of funding both sides of this war on 
terrorism due to its reliance on overseas energy supplies, sir.
    Mr. Markey. Thank you. Mr. Wolf.
    Mr. Wolf. I think the thing we might be missing here, which 
is important, is we are looking very internally focused on the 
U.S. The electric mile today versus a gasoline mile, which is 
that cost element that is so important, is actually cheaper in 
most of the world and is also cheaper in the U.S. today.
    So I would leave you with the fact that at $3 a gallon--
even at $3 a gallon, which is half the price of Western Europe 
and a lot of developed countries that are moving ahead, the 
electric mile is cheaper. It is that history of infrastructure 
around gasoline that is not being developed. And once you 
develop that infrastructure, you can actually access those 
marginal electric miles.
    Mr. Markey. Thank you. And Mr. Smith.
    Mr. Smith. Well, I would simply reiterate that we feel 
strongly that the electrification of short-haul transportation 
with plug-in electric and hybrid electric vehicles offers a 
substantial opportunity for the United States if the 
Electrification Coalition's recommendations were adopted by the 
Congress to reduce our petroleum consumption per unit of GDP, 
reduce the emissions as a consequence of that even when looking 
at the power generation of the electrical power for the 
electrified vehicles; and, finally, would significantly reduce 
the economic and national security challenges that will 
undoubtedly occur if we do not take some very strong measures 
to accomplish the goals that we have been discussing today.
    Mr. Markey. Thank you, Mr. Smith, very much.
    And I would just like to say to you, Mr. Smith, that we 
very much appreciate your leadership in increasing the fuel 
economy standard from 25 to 35 miles a gallon. I don't think it 
would have happened without you and your organization, Mr. 
Diamond--the other Mr. Robert Diamond in the room behind you 
back in 2007. We had that fight in 2001 on the House floor, 
only 155 votes; 2003, 168 votes; 2005, 178 votes. I know, 
because I was making that amendment with Mr. Boehlert. When the 
price really started to spike in 2006, we were not allowed to 
have that vote up on the House floor. But because of you and 
your organization, we have made that breakthrough. And I think 
we have seen the technological revolution already unfold. And 
the same thing we saw in telecommunications. Alexander Graham 
Bell invented his phone, and we were all still using black 
rotary phone 100 years later. It was only after this committee 
and the Justice Department acted that we changed the incentives 
that moved us from black rotary dial phones to BlackBerries. It 
only happened in 10 years after everyone said we could not do 
it.
    So I think when America has a plan, America wins. And I saw 
you checking that BlackBerry in the course of this hearing. 
And, by the way, the members of the committee are very proud 
that you can check your BlackBerry.
    Mr. Smith. I was afraid I said something wrong, and Gene 
sent me a message saying shut up.
    Mr. Markey. No more tapping on the shoulder.
    Mr. Wolf. That is a Canadian technology. This is an 
American technology.
    Mr. Markey. But that revolution in telecom happened because 
we changed the policies in this committee. And what we are 
seeing in the automotive sector is the same thing. And I think 
if we just put together a plan America won't have to try to 
keep China out because we will be taking them on. We will have 
a plan, and we will win. America wins when it has a plan.
    Anyway, thank you all so much for your testimony today. 
With that, and with the thanks of the committee, this hearing 
is adjourned.
    [Whereupon, at 2:05 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
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