[Senate Hearing 111-1233]
[From the U.S. Government Publishing Office]




                                                       S. Hrg. 111-1233
 
 OPPORTUNITIES TO IMPROVE ENERGY SECURITY AND THE ENVIRONMENT THROUGH 
                         TRANSPORTATION POLICY

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 24, 2010

                               __________

  Printed for the use of the Committee on Environment and Public Works
  
  
  
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                     ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
AMY KLOBUCHAR, Minnesota             CHRISTOPHER S. BOND, Missouri
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico
JEFF MERKLEY, Oregon
KIRSTEN GILLIBRAND, New York
ARLEN SPECTER, Pennsylvania

                    Bettina Poirier, Staff Director
                 Ruth Van Mark, Minority Staff Director
                 
                 
                 
                            C O N T E N T S

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                                                                   Page

                             MARCH 24, 2010
                           OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     2
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland    28
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware, 
  prepared statement.............................................   115

                               WITNESSES

Porcari, Hon. John D., Deputy Secretary of Transportation, U.S. 
  Department of Transportation...................................     4
    Prepared statement...........................................     6
McCarthy, Hon. Regina A., Assistant Administrator, Office of Air 
  and Radiation, U.S. Environmental Protection Agency............    11
    Prepared statement...........................................    13
    Responses to additional questions from Senator Boxer.........    16
    Response to an additional question from Senator Carper.......    17
    Responses to additional questions from:
        Senator Cardin...........................................    18
        Senator Inhofe...........................................    19
Greene, Larry F., Executive Director, Sacramento Metropolitan Air 
  Quality Management District....................................    30
    Prepared statement...........................................    33
    Responses to additional questions from Senator Boxer.........    35
    Response to an additional question from Senator Inhofe.......    39
Lovaas, Deron, Federal Transportation Policy Director, Natural 
  Resources Defense Council......................................    40
    Prepared statement...........................................    42
    Responses to additional questions from Senator Boxer.........    65
    Response to an additional question from Senator Inhofe.......    71
Siglin, Douglas V., Federal Affairs Director, Chesapeake Bay 
  Foundation.....................................................    75
    Prepared statement...........................................    77
Kolodziej, Richard, President, NGVAmerica........................    88
    Prepared statement...........................................    90
    Responses to additional questions from:
        Senator Boxer............................................    99
        Senator Inhofe...........................................   102

                          ADDITIONAL MATERIAL

Letter to Senator Boxer and Senator Inhofe from the American Gas 
  Association, April 2, 2010.....................................   118


 OPPORTUNITIES TO IMPROVE ENERGY SECURITY AND THE ENVIRONMENT THROUGH 
                         TRANSPORTATION POLICY

                              ----------                              


                       WEDNESDAY, MARCH 24, 2010

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The full Committee met, pursuant to notice, at 10:05 a.m. 
in room 406, Dirksen Senate Office Building, Hon. Barbara Boxer 
(chairman of the full Committee) presiding.
    Present: Senators Boxer, Inhofe, Cardin, Merkley, Carper, 
and Udall.

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

    Senator Boxer. Good morning, everybody.
    Senator Inhofe and I welcome our panelists, and we wanted 
to share some information. It may be that we have some 
objections to our meeting this morning due to unrelated matters 
that are happening on the Senate floor. Therefore, I am going 
to ask our panelists to just stick with the clock and get this 
done.
    And what I am going to do is put my full statement in the 
record. I will just summarize it in a couple of minutes if you 
want to run the clock.
    We are going to examine ways we can use the next Surface 
Transportation Bill to improve our Nation's energy security and 
the environment. The witnesses will discuss the ways we can use 
transportation policies to promote energy security as well as 
cleaner air and water.
    We spend $1 billion a day to import foreign oil, and two-
thirds of it is used for transportation. So, if we make our 
transportation system more efficient, reduced oil consumption 
will make our country less dependent on countries that, 
frankly, do not like us very much.
    We also know the health impacts. Diesel, for example, the 
exhaust from diesel, contributes to asthma attacks, bronchitis, 
other illnesses, heart disease, permanent harm to the lungs of 
kids, and causes cancer. And we know there are ways to make the 
diesel cleaner.
    As a matter of fact I visited a place in Sacramento where 
there is this incredible technology that reduces the pollutants 
that come out of the diesel by about 80 percent. So there are 
ways that we can encourage this kind of technology.
    Two of my main goals for the reauthorization of our bill 
are to improve goods movement and to reduce air pollution from 
transportation. We have to find ways to reduce harmful 
emissions while we speed up the movement of people and goods. 
And there are several programs that provide funding for 
projects that will benefit the quality of our air.
    I will look forward to hearing from today's witnesses as we 
work to develop a transportation bill that will help reduce 
pollution and make America more secure.
    And I would yield the time to Senator Inhofe.
    [The prepared statement of Senator Boxer was not received 
at time of print.]

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

    Senator Inhofe. Madam Chairman, I will also cut back 
because it could be that we will have to leave in about 45 
minutes. So, we will get to the panelists.
    Senator Boxer. OK.
    Senator Inhofe. I will say this. I always have to say this 
when I am at one of these meetings. If we really are serious 
about wanting to be independent from other countries, all we 
have to do is develop our own resources. As we all know, now, 
no one questions, the CRS came out and showed the United States 
of America is No. 1 in terms of reserves of recoverable 
resources. So, we are talking gas, oil and coal.
    The main thing I was trying to get across on this is I have 
introduced a lot of legislation. Back when gas was over $4 a 
gallon, natural gas was, the equivalent to a gallon was 98 
cents. And that just made sense.
    We know about the obstacles, the bureaucratic obstacles 
that are out there. I have introduced the Drive America on 
Natural Gas Act. I have been joined by Democrats, Senator 
Pryor, and one of the strongest proponents of my position is 
Dan Boren, a Democrat in the House. So, we are working on this 
together.
    There are all kinds of reasons, environmental reasons as 
well as other reasons, cost reasons. And now that we know what 
the reserves are out there, every time, every week that goes 
by, in the shale, in the deposits, all of these things are out 
there, and we want to be sure that we are able to do that.
    And knock down some of the bureaucratic obstacles in terms 
of certification of engines. It is ridiculous to have to 
recertify something if the same engine has already been 
certified but used in a different vehicle.
    We are going to work all together on this and try to make 
this a reality, Madam Chairman.
    And I will put the rest of my statement in the record.
    [The prepared statement of Senator Inhofe follows:]

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

    Thank you, Madam Chairman, for holding this hearing, and 
thank you to all the witnesses for joining us this morning. The 
purpose of today's hearing is to explore some of the policy 
recommendations that benefit the environment while making us 
less dependent on foreign oil. One innovative way to achieve 
that goal is through greater use of natural gas powered 
vehicles.
    In 2008, when gasoline prices were above $4 per gallon, I 
was the first in Congress to introduce a comprehensive bill to 
promote the use of natural gas as a realistic alternative for 
the many Americans who were looking for price relief. The bill 
I introduced was called the ``Drive America on Natural Gas 
Act.'' Today, I'm encouraged to see that several members on 
Capitol Hill have introduced similar bills promoting the use of 
both natural gas and propane as a transportation fuel. Last 
summer I joined with Senator Pryor to once again introduce a 
comprehensive bill to promote these fuels for America's 
drivers. In October Senator Wicker and I introduced legislation 
to simplify the EPA emissions certification process for 
aftermarket fuel conversion systems. I'm glad to report that 
Senator Landrieu is now a cosponsor of that bill.
    The bipartisan support for both natural gas and natural gas 
vehicles speaks to its potential to strengthen energy security 
and serve as a viable alternative to gasoline powered vehicles. 
But to achieve these goals we must take advantage of our 
abundant, domestic supply of natural gas for use as a 
transportation fuel.
    There is no question about the supply of natural gas--we 
have plenty of it, and we can develop it. Last year the 
Potential Gas Committee released its latest assessment showing 
that America possesses 2,047 trillion cubic feet of natural 
gas--an increase of more than 35 percent just since the 
Committee's 2006 estimate. At today's rate of use this is 
enough natural gas to meet American demand for nearly 90 years. 
Just this January the Department of Energy released new 
statistics showing that the United States had eclipsed Russia 
as the world's largest producer of natural gas.
    The advent of horizontal drilling is fueling an economic 
boom. A recent study from the Pennsylvania College of 
Technology estimates that drilling for natural gas in the 
Marcellus Shale alone will create 98,000 Pennsylvania jobs and 
inject more than $14 billion into Pennsylvania's economy in 
2010. Multiply these numbers across several emerging natural 
gas plays nationwide, and the potential economic impact equates 
to millions of jobs and trillions of dollars.
    We have the natural gas supply and proven NGV technology, 
which has existed for decades. Therefore its promise as a 
mainstream transportation fuel is achievable today--not 15 or 
20 years from now.
    As we work across the aisle to promote the development and 
use of our abundant natural gas supply, members on both sides 
of this Committee are also working together to pass a 
reauthorization of the Nation's transportation bill. I won't 
get into the details of the reauthorization debate, but I want 
to make clear that we need to avoid weighing down the bill with 
environmental regulation. For example if members favor reducing 
greenhouse gas emissions or establishing stormwater regulations 
for the transportation sector then they should do so in the 
context of climate legislation or the Clean Water Act.
    While we all share the important value of environmental 
protection it should be a value considered on par with the 
energy, economic, safety, mobility and other benefits of 
proposed transportation projects. In short we need to devise 
ways to balance our transportation needs with our environmental 
goals.
    Thank you, Madam Chairman. I look forward to discussing 
these issues with our witnesses.

    Senator Boxer. Thank you so much. Senator, would you agree 
that we should keep our question time to 3 minutes instead of 
5?
    Senator Inhofe. Sure. I think particularly on the first 
panel because they may shut us down----
    Senator Boxer. Yes, I know.
    Senator Inhofe. And we want to get to the second panel.
    Senator Boxer. I know.
    So, with that, and speeding along, we are honored to 
welcome our first two panelists, Hon. John Porcari, Deputy 
Secretary of Transportation, United States Department of 
Transportation. He will be followed by Hon. Regina McCarthy, 
Assistant Administrator, Office of Air and Radiation, U.S. EPA.
    So, why don't you start? And we give you 5 minutes.

    STATEMENT OF HON. JOHN D. PORCARI, DEPUTY SECRETARY OF 
       TRANSPORTATION, U.S. DEPARTMENT OF TRANSPORTATION

    Mr. Porcari. Chairman Boxer, Ranking Member Inhofe, thank 
you for the opportunity to testify today. This is an important 
topic, and protecting our Nation from the risks associated with 
our reliance on foreign oil and the destabilizing effects of a 
changing climate is one of the President's highest priorities.
    We have to commit ourselves to an economic future in which 
the strength of our economy is not tied to the unpredictability 
of oil markets. We need to improve the energy and environmental 
performance of the transportation sector so that we can 
continue to provide mobility for the public and for the 
economy.
    Today I would like to highlight some of the innovative 
transportation and energy programs of the Obama administration 
that we are pursuing with the support of Congress. These 
initiatives address the energy transportation nexus on all 
fronts--better vehicles, clean fuels and transforming our 
infrastructure.
    One of the President's earliest actions on taking office 
was to direct the Environmental Protection Agency and our 
National Highway Traffic Safety Administration to develop a 
joint fuel economy and tailpipe greenhouse gas emissions 
standard for cars and light trucks, covering the model years 
2012 through 2016. In September of last year the two agencies 
issued a joint Notice of Proposed Rulemaking. NHTSA issued an 
Environmental Impact Statement in February of this year, and we 
expect to issue a final rule in the near future.
    Our colleagues, meanwhile, at the Department of Energy are 
administering $7.5 billion of loans under the Advanced 
Technology Vehicle Manufacturing Improvement Program. This 
helps make possible the commercial deployment of U.S. built 
electric and plug-in hybrid vehicles, which will set the stage 
for a transformation of the light duty vehicle sector.
    In clean fuels my colleague, EPA Assistant Administrator 
McCarthy, will tell you about EPA's new final rule for the 
revised Renewable Fuel Standard issued on February 3rd. This 
new rule lays the groundwork for vastly expanding the output of 
low carbon renewable fuels such as cellulosic, ethanol and 
biodiesel.
    Our main focus at the Department of Transportation lies in 
transforming our transportation infrastructure. Large scale 
transportation infrastructure investments inevitably require a 
Government role. We believe that these initiatives will change 
the face of the U.S. transportation system. I would like to 
highlight six key DOT initiatives undertaken with the support 
of Congress and especially this Committee. And we thank you for 
that support.
    First, high speed rail. On January 28th the President 
announced $8 billion in Recovery Act grants to States across 
the country to develop America's first nationwide program of 
high speed intercity passenger rail service. These Recovery Act 
dollars are a historic investment in our transportation 
infrastructure. They will create jobs and transform travel in 
America.
    Second, transit grants. The Federal Transit Administration 
has used Recovery Act funding to award $8.6 billion in grants 
for more than 965 transit projects across the country. These 
Recovery Act funds have supported the purchase of nearly 11,000 
buses, vans and rail vehicles, and also supported the 
construction or renovation of more than 850 transit facilities 
across the country.
    Third, our TIGER Program, Transportation Investment 
Generating Economic Recovery. On February 17 Secretary LaHood 
announced $1.5 billion in awards for 51 projects across the 
country, including improvements to roads, bridges, rail, ports, 
transit and intermodal facilities. The TIGER grants include 
activities that are difficult to fund under our existing 
programs, and many of the grants will help alleviate some of 
our key freight, rail and goods movement bottlenecks.
    Fourth, livable communities. DOT is partnering with the 
Department of Housing and Urban Development and EPA to better 
integrate regional housing, transportation and land use 
planning and investment. We are helping redefine affordability 
to reflect the rising transportation costs, harmonize the HUD 
and DOT programs so they work in concert, and undertake a joint 
research data collection and outreach program.
    Sustainable development that is transit oriented and 
friendly to pedestrians and bicyclists will help foster 
economically competitive, healthy, opportunity rich communities 
throughout the country and will also have a positive impact on 
fuel consumption and greenhouse gas emissions.
    Fifth, managing demand peaks. Transportation demand 
fluctuates by time of day and by season, as you well know. 
Network congestion adds hidden--and sometimes not so hidden--
costs for travelers, infrastructure providers, and the 
environment. The costs include wasted time, additional 
greenhouse gas emissions, urban air pollutants, excess fuel 
consumption and infrastructure costs. We are working with our 
State and local partners to create better choices for travelers 
including bicycle and pedestrian options and transit innovation 
such as bus rapid transit.
    And then sixth and finally, NextGen. We have a 
transformational opportunity with the Federal Aviation 
Administration in our Next Generation Air Transportation 
System. NextGen, as you know, is a comprehensive multi-year 
overhaul of the national airspace system that will improve 
performance, enhance safety, and reduce aviation fuel usage and 
greenhouse emissions through improved and more direct routing 
and reduced congestion and delay.
    These are some of the many transportation infrastructure 
related activities that we are pursuing. In the long run 
transformational initiatives such as the ones I have described 
here today will have a powerful, positive effect on our society 
by creating more attractive, economically competitive 
communities and enhancing the overall performance of our 
system.
    Thank you, and I look forward to answering your questions.
    [The prepared statement of Mr. Porcari follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]  
    
    
        
    Senator Boxer. Thank you very much.
    Regina McCarthy, Assistant Administrator, Office of Air and 
Radiation. Welcome.

STATEMENT OF HON. REGINA A. MCCARTHY, ASSISTANT ADMINISTRATOR, 
  OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION 
                             AGENCY

    Ms. McCarthy. Thank you very much.
    Chairman Boxer, Ranking Member Inhofe, members of the 
Committee, I want to thank you for the invitation to testify 
today on opportunities to improve energy security and the 
environment through transportation policy. I am pleased to be 
on the panel with Deputy Secretary Porcari.
    Today the U.S. transportation system accounts for about 57 
percent of all nitrogen oxide emissions and 34 percent of 
volatile organic compound emissions, the two major ozone 
forming pollutants. The transportation sector also accounts for 
16 percent of the total emissions of fine particulate matter.
    More than 126 million Americans, nearly half of the 
population of the United States, live in areas where air 
quality does not meet our national health based standards. In 
addition all transportation sources contribute about 28 percent 
of the total U.S. greenhouse gas emissions.
    While stringent vehicle emission regulations have 
significantly reduced emissions from traditional criteria air 
pollutants, from 1990 to 2007 transportation greenhouse gas 
emissions rose by 29 percent, due in large part to increased 
demand for travel and the stagnation of fuel efficiency across 
the U.S. vehicle fleet.
    This Administration has committed to moving forward on 
transportation policies that can address both energy security 
and the environment. In May 2009 President Obama set in motion 
a new national program that would dramatically reduce 
greenhouse gas emissions and improve fuel economy for new cars 
and light trucks sold in the United States.
    In September 2009 EPA and DOT announced the proposal for 
this new national program, and we are soon to be finalizing 
that proposal. Under the proposed program the average 
greenhouse gas emission standard in 2016 would be set at 250 
grams per mile, which is equivalent to 35.5 miles per gallon if 
manufacturers meet the standard entirely through fuel economy 
improvements.
    The environmental and security benefits from the national 
program will be significant. Together the proposed EPA and DOT 
standards would cut greenhouse gases by an estimated 950 
million metric tons and about 1.8 billion barrels of oil over 
the lifetime of the vehicles sold under this program. Because 
of the increased fuel efficiency of these vehicles we estimate 
that the average American family that purchases a 2016 new car 
will save $3,000 in fuel costs over that vehicle's lifetime, 
even after taking into account the increased up front vehicle 
costs.
    We expect to establish the final standards, as I said, no 
later than April 1st.
    In February of this year EPA will also establish new 
requirements for the Renewable Fuel Standard, which is an 
important step for the environment, U.S. energy policy, and the 
economy. The Energy Independence and Security Act of 2007 
mandates our transportation fuel include 36 billion gallons of 
renewable fuel by 2022. We estimate that in 2022 the program 
should displace about 7 percent of our annual gasoline and 
diesel consumption with renewable fuels produced primarily 
right here in the United States.
    While renewable fuels and more efficient vehicles and 
engines are crucial to reducing transportation emissions, we 
also have to take steps to cut emissions from the millions of 
vehicles currently navigating America's highways, railways and 
waterways.
    In the past 2 years alone EPA's National Clean Diesel 
Campaign has awarded more than $350 million to help reduce 
exposure to harmful diesel exhaust. Through EPA's SmartWay 
Transportation Program we have joined with 2,600 partners to 
reduce fuel consumption in the freight sector. The SmartWay 
Transport Program has been able to assist the freight industry 
in adopting cost effective technologies and practices that can 
significantly reduce greenhouse gas emissions and save money 
for truck owners and operators.
    In July 2009 President Obama said, ``For too long Federal 
policy has actually encouraged sprawl and congestion and 
pollution rather than quality public transportation and smart, 
sustainable development.'' EPA has been working over the past 
year with DOT and HUD in this partnership that is advancing 
communities' ability to make smart development decisions.
    I would like to acknowledge Secretary LaHood and Deputy 
Secretary Porcari for their leadership, along with Secretary 
Donovan and Administrator Jackson, on this effort. Their strong 
voices for better coordination of land use, housing 
transportation investments and air quality planning represents 
a bold new vision for the transportation system in this country 
and the relationship between our agencies.
    And let me wrap up by saying that at the request of Senator 
Kerry we have developed some data that is now on the Web and 
that I believe the Committee has, that looks at how we can 
reduce greenhouse gases through new technologies and efficiency 
improvements in the transportation sector.
    I am happy to walk through that data analysis and answer 
any questions.
    Thank you very much.
    [The prepared statement of Ms. McCarthy follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
        
    Senator Boxer. Thank you very much.
    I want to start with you, Administrator McCarthy. It is 
only going to be 3 minutes. Did you say that over, because of 
the new fuel efficiency standard, that we would see a saving of 
$3,000? Is that what you said?
    Ms. McCarthy. I said an individual consumer would actually 
achieve a $3,000 savings over the lifetime of the vehicle that 
they purchased in 2016 as a result of the increased fuel 
efficiency.
    Senator Boxer. I think that is really an important point 
here. I mean, it is the same kind of thing when you look at 
retrofitting buildings and making them energy efficient. It has 
a really good payoff even if there is a little bit of an up 
front cost. So, thank you for that.
    I would like to ask you, Mr. Porcari, about TIGER grants 
because people at home really think they are very good, and 
they have gotten funded through the Recovery Act, and they were 
able to fund multimodal and multi-State transportation projects 
that are difficult for us to fund through existing 
transportation programs.
    Do you think there is a way to make our highway, our 
renewal of our SAFETEA-LU, which we call MAP-21, do you think 
that program could work better for those types of projects? 
What would we have to do in order to write a section that dealt 
with those?
    Mr. Porcari. It is an excellent question, Madam Chair. I 
think the TIGER grants point the way to the future in 
intermodal transportation. As you know there was tremendous 
demand around the country, over 1,400 applications. The single 
largest category that was funded was freight rail capacity 
projects, which have a number of environmental benefits, 
including reduced fuel consumption, but also take some of the 
goods movement off the highway network and move it through more 
efficient modes.
    So, in our goods movement hierarchy where we want to keep 
goods moving on water as long as possible and then on rail as 
long as possible, and truck it for the last miles, it is a big 
step forward. The TIGER grant process really, I think, shows 
the way for doing that intermodally in the future.
    Senator Boxer. And you think that you can help us write 
some kind of a title that would be in the new bill? I am 
interested in that. I do not know if my colleagues agree, but I 
would like to have your technical help on that.
    Mr. Porcari. We would be very interested in working with 
you on that.
    Senator Boxer. Thank you.
    Senator Inhofe.
    Senator Inhofe. Thank you, Madam Chairman.
    First of all, I think this an area where we all agree. I 
know the Chairman and I do, and I think also from information 
that we have gotten from Secretary LaHood that he does, and 
that is, they were talking about in this proposed bill that we 
still have not seen and which may never surface, the Kerry-
Graham-Lieberman bill, they talk about the linked fee, and what 
they are talking about is increased gas tax.
    We have had conversations among ourselves up here, and of 
course hearings with Secretary LaHood, and the statement that 
he had made was, with these hard economic times, President 
Obama and the Administration do not believe that raising the 
gas tax is good for Americans who are out of work and can least 
afford the gasoline tax raise.
    We will stand by that. I would ask if you agree with it. 
That is still the statement and the position of the President?
    Mr. Porcari. That is still the position. And I would add, 
Senator, that as we are in the beginning stages of a recovery 
it is as important as ever to make sure that recovery is 
accelerated in every way possible.
    Senator Inhofe. That is good.
    Ms. McCarthy, there has been a lot of discussion on Senator 
Murkowski's bill to overturn the EPA's Endangerment Finding. 
They say it would dismantle the auto deal with California, the 
auto companies and the EPA and NHTSA. I contend that it would 
not.
    In fact the General Counsel of NHTSA wrote a letter to 
Senator Feinstein that said it would not. He wrote that ``in a 
strict legal sense the Murkowski resolution does not directly 
impact NHTSA's independent authority to set fuel economy 
standards under the Energy Policy and Conservation Act as 
amended by the Energy Independence and Security Act of 2007.''
    So, let me first ask you, do you agree with NHTSA's view on 
the effects of the Murkowski resolution?
    Ms. McCarthy. Senator, my understanding is that the 
Endangerment Finding is clearly an underpinning--and a 
necessary underpinning--of EPA's greenhouse gas standards that 
they are setting in the light duty vehicle role. Because we are 
doing that in joint role with NHTSA it is important that the 
Endangerment Finding stay intact or else we will have no 
ability to issue that rule by the end of March and it will not 
be able to address----
    Senator Inhofe. Yes, but the question is do you agree with 
his statement?
    Ms. McCarthy. The only statement that I am aware of is I 
have read a letter from the Secretary, Secretary LaHood, 
addressing this issue where I think he was very clear in 
stating that the joint rule would not be able to move forward 
if the Endangerment Finding were overturned.
    Senator Inhofe. Well, but they are talking about the 
Murkowski resolution, that it does not directly impact NHTSA's 
independent authority to set fuel standards. That is the 
question. You might want to give me that answer for the record 
because that is the thing that I am asking.
    Ms. McCarthy. Yes, that would be fine.
    Senator Inhofe. Yes, that is fine. Thank you, Madam 
Chairman.
    Senator Boxer. Thank you.
    What I would like to do, because I know Senator Cardin has 
a panelist, I would like to bring the next panel up and then 
turn to you, Senator. I will give you my time there to make a 
combination introduction opening statement. Is that all right 
with you?
    Senator Cardin. That is fine. Thanks.
    Senator Boxer. So, thank you both very much. And then we 
would have our next panel come forward. Again, the reason we 
are rushing this a little bit more than usual is because we are 
fearful that we may have to shut down because of some unrelated 
matters on the Senate floor.
    Mr. Larry Greene, Executive Director, Air Pollution Control 
Officer, from the Sacramento Metropolitan Air Quality 
Management District. I certainly welcome you, Mr. Greene. Mr. 
Deron Lovaas, Federal Transportation Policy Director, Natural 
Resources Defense Council. We welcome you. Then Mr. Doug 
Siglin, Federal Affairs Director of the Chesapeake Bay 
Foundation. I am sure we will hear from Senator Cardin in a 
moment on that. And I want to make sure, is it Kolodziej?
    Mr. Kolodziej. Yes, it is.
    Senator Boxer. Oh. That is good. Mr. Richard Kolodziej, 
President of NGVAmerica. And what does that stand for, NGV?
    Mr. Kolodziej. It stands for Natural Gas Vehicles for 
America. We are the national trade association.
    Senator Boxer. Very good. Wonderful.
    OK, we will start first by hearing from Senator Cardin, 
actually, and then we are going to go to the panel.

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

    Senator Cardin. Madam Chair, let me just welcome Doug 
Siglin here from, as you pointed out, the Federal Affairs 
Director for the Chesapeake Foundation. He is a Marylander who 
has done an incredible service to our State.
    The Chesapeake Bay Foundation is a non-profit organization 
that for 42 years has sought to improve the great estate of the 
Chesapeake Bay. And this Committee has heard me frequently talk 
about the Chesapeake Bay, so I will not go into more details.
    Let me just compliment the Chairman for the subject of the 
day dealing with transportation as it relates to our 
environment and security. We need an energy policy in this 
country. Transportation can play a key role.
    Madam Chair, I just really want to underscore the 
environmental point for one moment. You all know the greenhouse 
gas emissions, that 30 percent comes from transportation. We 
know we can do a better job. In this region of the Nation, 
where you have the second most congested area where people are 
wasting their time and wasting energy stuck in traffic, it 
really speaks in volumes as to what we need to do in improving 
our transportation infrastructure to make it more efficient, 
use less greenhouse emitters, and have a better lifestyle for 
the people of our Nation.
    But I want to use my remaining 1 minute to really stress 
the stormwater runoff issue. We now have impervious surfaces in 
America that exceed the area of the State of Ohio if you put it 
all together. Stormwater runoff is the single largest source of 
pollutants going into our streams, our rivers, our bays and our 
oceans. Everything from contaminated heavy metals, sediments, 
road salts and deicing, brake dust and garbage you had listed, 
and it is having a tremendous impact on our ability to clean up 
our water bodies in this Nation.
    We, as a Committee, spoke volumes when we said that when 
the Federal Government constructs new buildings, we need to 
have a storm runoff game plan to minimize the disruption from 
the new construction. We need to have the same in 
transportation.
    There is no reason why we cannot build our way in more 
environmentally friendly ways as it relates to storm runoff. 
Otherwise all we are doing is building ways in which water 
increases its volume and increases its detrimental effect on 
our environment.
    Let me give you one number. For every inch of rain, for 
every mile of two-lane highway, it is 52,000 gallons of 
polluted stormwater runoff. Multiply that times the number of 
inches of rain and the number of miles, we can do much better.
    Thank you for having this hearing.
    [The prepared statement of Senator Cardin follows:]

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

    Madam Chairman, thank you for holding this hearing. In this 
Congress this Committee has often touched on the significant 
impact the transportation sector has on the Nation's energy 
consumption. This is an issue that must remain at the forefront 
of our work in designing a new transportation bill.
    The next transportation bill must work to create new job 
opportunities for America, advance new transportation 
infrastructure projects that significantly reduce our fossil 
fuel consumption and reduce our carbon emissions.
    I am also pleased that the scope of this hearing goes 
beyond the transportation sector's impact on energy consumption 
and climate change but also looks at the other environmental 
impacts of roads. I am particularly concerned with the 
tremendous impact polluted highway stormwater has on water 
quality.
    Two weeks ago I talked about spring's arrival being 
emblematic of the start of construction season. Spring is also 
one of the wettest times of year, and with every spring rain a 
myriad of pollutants washes off our roads and into our precious 
lakes, rivers, streams, bays and coastal waters.
    Stormwater is the Nation's largest source of water 
pollution. While rain itself contains air pollution 
particulates that are deposited in every drop most stormwater 
pollution is picked up on the surface and carried off as 
runoff. Stormwater washes a myriad of contaminants from the 
millions of miles of roads into storm drains that discharge 
into nearby waters, typically without being treated.
    Contaminants like:
     oil
     heavy metals
     sediments
     road salts and other de-icing chemicals
     brake dust, and
     garbage
are all harmful pollutants found on road surfaces.
    When rain falls on these hard, impervious surfaces it often 
has nowhere to go but down the channels created by curbs and 
retaining walls, into storm drains and into the nearest natural 
water body. According to research compiled by the National 
Oceanic and Atmospheric Administration's (NOAA's) National 
Geophysical Data Center, the U.S. is covered by more than 
112,600 square kilometers of impervious surfaces. That is a 
space larger than the State of Ohio.
    According to calculations based on USGS and DOT figures 
just a half an inch of rain falling on a mile-long stretch of a 
two-lane highway generates 52,660 gallons of polluted 
stormwater runoff. According to NOAA last year 43.5 inches of 
rain fell on Baltimore, Oklahoma City experienced 36 inches 
rain, Cleveland 38 inches, and San Francisco 22 inches inch of 
rain.
    Impervious surfaces in the Chesapeake Bay watershed and in 
the State of Maryland are a major contributor to the Chesapeake 
Bay's impairments. Maryland is taking a comprehensive approach 
to address stormwater by incorporating highways into its 
statewide stormwater permitting program. I look forward to Mr. 
Siglin's testimony on this issue which will help us all 
understand the importance of addressing this problem.
    Highway development must be done responsibly with an eye 
toward the water quality impacts highway design has on our 
Nation's waters. The 2007 energy bill required that all new 
Federal buildings be designed in a manner that preserves the 
pre-existing hydrology of the area that the building will 
occupy. This same standard must be applied to highway designs.
    As with most pollution abatement strategies the cost of 
preventing stormwater pollution is more effective and easier to 
implement than trying to clean up and remediate after the 
destruction has occurred.
    In that same spirit of addressing a problem before it is 
too late we must use the opportunity to reauthorize the 
transportation bill to significantly reduce the transportation 
sector's energy intensity and CO2 emissions. 
According to the United States Energy Information Agency (EIA) 
the U.S. consumed an average of 18.7 million barrels of oil per 
day in 2009. As a result the U.S. transportation sector is 
responsible for 30 percent of the United States' greenhouse gas 
emissions.
    While burning fossil fuels is the source of transportation 
carbon emissions, the amount of carbon emissions is a factor of 
how much time people spend in their cars and trucks, especially 
the extraordinary waste of fuel and time spent when motorists 
are stuck in traffic.
    During a hearing last summer Secretary Chu and 
Administrator Jackson's noted that increased availability and 
accessibility of public transportation would lead to 
significant carbon emission reductions.
    The 2009 Texas Transportation Institute Mobility Report 
notes that public transportation saved travelers 646 million 
hours in travel time in 2007. This same report had troubling 
news that the DC Metropolitan Area, including Maryland, has the 
second worst traffic in the Nation. The report goes on to note 
that each motorist in the Maryland, DC, Virginia metro area 
loses an average of 62 hours and wastes an average of 42 
gallons of fuel a year because they are stuck in traffic. This 
is despite transit ridership in the region being the second 
highest in the country.
    According to the American Public Transportation Association 
public transit currently saves 37 million metric tons of 
CO2 emissions per year. These carbon savings 
increase as more and more energy is generated from renewable 
sources.
    Sweeping improvements in efficiency and pollution reduction 
to our Nation's transportation systems are just as visionary as 
President Eisenhower's concept of a national infrastructure 
system and are equally attainable.
    The opportunity for economic expansion and job growth in 
the transportation sector is nearly limitless. It is time to 
usher in a new era of transportation infrastructure design and 
road building that protects the environment and increases the 
energy efficiency and reduces travel times.
    I look forward to working with my colleagues to promote a 
more efficient transportation system and secure investments in 
transit from revenues generated by the legislation we 
construct. Again I thank the Chairman for holding this hearing, 
and I look forward to our witnesses' testimony.

    Senator Boxer. Thank you so much, Senator.
    So, we will start with Larry Greene. Welcome to Washington. 
And you brought a little bit of California weather with you, 
but not quite enough. So, Mr. Greene, we are very proud to have 
you here from the Sacramento Metropolitan Air Quality 
Management District.
    Please proceed.

 STATEMENT OF LARRY F. GREENE, EXECUTIVE DIRECTOR, SACRAMENTO 
          METROPOLITAN AIR QUALITY MANAGEMENT DISTRICT

    Mr. Greene. Thank you, Chairman Boxer.
    Chairman Boxer, Ranking Member Inhofe and members of the 
Committee, I am Executive Director of the Sacramento 
Metropolitan Air Quality Management District, one of 35 local 
air districts in California. I also have the privilege this 
year to serve as the Co-President of the National Association 
of Clean Air Agencies.
    Thank you for the opportunity to appear before you today. 
In my brief comments I will highlight how I believe Federal 
transportation policy can help with the significant challenges 
facing the air quality and transportation communities today and 
in the future.
    The Sacramento region includes all or part of Sacramento 
County and five surrounding counties with a combined population 
of over 2 million. The region is a Federal non-attainment area 
for both ozone and fine particulate pollution. In Sacramento 
the major driver for non-attainment and related health impacts 
is emissions from the transportation sector including trucks, 
cars, planes, trains and construction equipment.
    In 2008 of the two air pollutants contributing to ozone 
formation 89 percent of the nitrous oxide pollution and 63 
percent of the reactive organic gas emissions were from the 
transportation sector. The State of California also estimates 
that almost 40 percent of the statewide greenhouse gas 
emissions come from transportation. A variety of tools are 
needed to address this high percentage of transportation 
emissions.
    One key Federal policy for protecting air quality has been 
conformity under the Clean Air Act. Each State implementation 
plan developed to meet air standards establishes a conformity 
budget for air emissions from transportation projects. This 
puts a cap on emissions and encourages the use of innovative 
strategies to reduce emissions. This key program should remain 
in place as an important element in improving national air 
quality.
    There are other programs that have played important roles 
in reducing pollution from vehicles, such as the development of 
cleaner technology for engines and requiring the use of cleaner 
fuels. Local agencies like our district have been leaders in 
providing incentive programs to assist business installing 
cleaner on and off road engines. The Federal Diesel Emissions 
Reduction Act has been of great assistance in this effort and 
must be continued.
    While these programs are important new thinking has emerged 
on ways to ensure that investments we make in transportation 
enhance the livability of communities, conserve community 
financial resources and meet the needs of changing population 
demographics.
    Our agency has been a proud partner with the Sacramento 
Area Council of Governments in their regional Blueprint Plan. 
The SACOG Blueprint offers an outstanding win-win example of 
effective transportation planning. The key is creating 
development patterns that are sustainable over time, support 
walking and bicycling, and that reduce, on the average, the 
length of commutes.
    The Blueprint process visualizes where to make the best 
investments with Federal and local transportation money, 
identifies congestion hotspots, and supports both transit and 
air quality plans for the region. With the cooperative efforts 
of our local governments the Blueprint vision is being 
implemented in current land use decisions and was the matrix 
upon which the latest Metropolitan Transportation Plan was 
developed.
    Another element to be considered is that rural towns and 
agriculture must be full partners in regional planning. A study 
called the Rural-Urban Connections Strategy is underway at 
SACOG to ensure they benefit in ways that enhance and support 
their communities.
    Using this regional modeling process to highlight the best 
infrastructure and project mix in the regional transportation 
plan resulted in an overall increase is density around transit 
assets such as light rail stations, a better jobs housing 
balance in the region, and far less use of agricultural land 
for development. For air quality the new plan provided a 1.6 
ton per day reduction in emissions over the previous plan. This 
was 15 percent of the reductions needed to meet the regional 
2009 8-hour SIP submission.
    It is critical that the upcoming transportation 
reauthorization bill support and promulgate such programs so 
that they become a common element in regional planning across 
the U.S. The Federal program should require regions to develop 
plans that outline the most effective use of funding to support 
sustainable community growth. The program should require 
collaboration between air quality and transportation 
organizations when developing and evaluating targets. It is 
also important that funding be provided to enhance planning and 
modeling resources and provide incentives for higher quality 
planning efforts.
    In closing it is critical that transportation 
reauthorization support new ideas to further the goals of 
cleaner air, sustainable communities, reducing congestion and 
wise use of financial resources. A collaborative process 
between air and transportation communities will be important in 
meeting these goals.
    Thank you for this opportunity to provide testimony to the 
Committee.
    [The prepared statement of Mr. Greene follows:]
    
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    Senator Boxer. Thank you so much, Mr. Greene.
    Mr. Lovaas, Federal Transportation Policy Director for the 
Natural Resources Defense Council. Welcome.

   STATEMENT OF DERON LOVAAS, FEDERAL TRANSPORTATION POLICY 
          DIRECTOR, NATURAL RESOURCES DEFENSE COUNCIL

    Mr. Lovaas. Thank you very much, Chairman Boxer and Ranking 
Member Inhofe, for this important opportunity to testify.
    Transportation drives America's dependence on foreign oil 
since it is 96 percent reliant on petroleum products. The 
single biggest oil consumers in transportation are vehicles on 
our roads, accounting for almost 80 percent of the total. 
Transportation plus other categories add up to a 20 million 
barrel a day habit which is a concern because the vast majority 
of oil resources are held by other nations, most in the 
troubled Middle East.
    A transportation sector shackled to oil leaves us 
vulnerable to price hikes and spikes, as in 2008 when the price 
of oil climbed to almost $150 a barrel. Oil prices could shock 
the American economy again due to conflicts over resources in 
oil rich regions, terrorist attacks on production facilities, 
or weather disruptions.
    There is also security challenge due to heat trapping 
emissions since transportation accounts for about a third of 
U.S. greenhouse gas pollution. Security experts have identified 
the effects of climate change as a concern, with the CNA 
Corporation referring to the potential threat multiplier in 
regions already stressed due to poor social, economic and/or 
political conditions.
    Thankfully boosting fuel economy standards for cars and 
trucks can save oil. The Administration raised the bar from 
2012 through 2016, saving a whopping 1.8 billion barrels of 
oil. We can also move to a pluggable fleet. Driving on 
electricity from the grid is virtually oil free, and vehicles 
are arriving on the market soon with ranges that exceed average 
daily needs. A recent EPA analysis shows this technology could 
save 2 million to 3 million barrels of oil a day by 2030. The 
transportation bill should address the need for public charging 
infrastructure as well, and ensuring intermodal connections 
between transit and short range electric vehicles.
    NRDC has three priorities for the new transportation law. 
First, reducing oil use and greenhouse gas pollution; second, 
increasing the number of locations accessible by transit, 
biking and walking; and third, spurring creation of good jobs 
with clean transportation investments.
    We are also proud backers of the Transportation for America 
Route to Reform blueprint, and I have worked with unusual 
allies in a new bipartisan coalition called Mobility Choice, 
which has a 10-point plan.
    First, to better reflect the hidden cost of oil, an oil 
security fee could be levied either per barrel or at the pump. 
This would enable consumers to make more economically informed 
transportation choices.
    Second, we also agree on more widespread use of tools such 
as Highway Occupancy Toll lanes and congestion pricing to 
better finance projects and to save fuel wasted due to excess 
traffic.
    Third, providing transportation choices reduces oil 
consumption as long as there are enough riders that the transit 
vehicle consumes less oil per passenger than driving. Transit 
routes with the highest load factors save the most oil, and 
investments should be based in part on loads or expected loads.
    Fourth, while most drivers in the U.S. pay the same amount 
for insurance per year regardless of how many miles they drive, 
all else being equal, the likelihood of an accident increases 
with more driving. Converting variable insurance costs into a 
per mile cost for drivers, a system known as pay as you drive, 
will correct price signals with a majority of drivers actually 
saving money under such a system.
    Fifth, to boost ridership, allowing transit agencies to 
become more self-sustaining, vouchers could be provided for low 
income households paid for by fare increases for other riders. 
Vouchers could be redeemed with other either existing transit 
agencies or private entrepreneurs running buses, shuttles, van 
pools and jitney buses.
    Sixth, extensive outreach programs by employers can educate 
computers about options such as online ride matching and van 
pool services. And telecommuting offers opportunities to 
eliminate some trips entirely since taking the broadband 
highway saves more oil than any alternative mode of transport, 
and policy should encourage more of it.
    Seventh, metropolitan areas now host most of the Nation's 
population, employers, GDP and traffic and are logical 
recipients of more direct investment.
    Eighth, by creating more transportation efficient land use 
patterns, people can choose modes other than driving. Yet 
outdated rules stand in the way of neighborhood designs that 
allow minimal driving. Eligibility of municipalities for some 
Federal transportation funds should be conditioned on changing 
rules to meet market demand.
    Ninth, upgrading infrastructure with 21st century 
technology such as variable signage, providing real time 
information to travelers, and traffic management systems to 
improve flow of traffic, saves oil and cuts pollution by 
reducing congestion and idling. A new bill should have a robust 
intelligent transportation title.
    Last, but not least, intercity rail can shift auto and air 
trips to fuel efficient trains. Federal funds for rail can be 
targeted to expand service on lines that will attract enough 
ridership to operate with relatively high load factors.
    These combined mobility choice strategies, our analysis 
shows, could save more than 2 million barrels of oil a day by 
2030. We can become a Nation that offers more means to opt out 
of oil addiction including vehicle choices, fuel choices, as 
well as mobility choices, by crafting better transportation law 
that is led by this Committee.
    I look forward to working with you to make it so.
    Thank you very much.
    [The prepared statement of Mr. Lovaas follows:]
    
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    Senator Boxer. Thank you very much.
    Next, Doug Siglin, Federal Affairs Director of the 
Chesapeake Bay Foundation. Do you want to say anything in 
introduction? We will just hear from you, sir.

   STATEMENT OF DOUGLAS V. SIGLIN, FEDERAL AFFAIRS DIRECTOR, 
                   CHESAPEAKE BAY FOUNDATION

    Mr. Siglin. Thank you Chairman Boxer, Senator Inhofe, and 
especially Senator Cardin.
    Thank you for this opportunity to talk about water in this 
hearing today. It is a bit of an outlier, but it is 
extraordinarily important in the context of this bill.
    Let me just say one thing about the Chesapeake Bay before I 
start. Forty-five years ago this year this Committee 
appropriated--or sorry--authorized the first amount of money to 
study the Chesapeake Bay. Forty-five years ago this year. One 
of the things which came from that study was the role of what 
we call today stormwater pollution plays.
    Forty-five years later we are still struggling to get the 
Chesapeake Bay under control. Senator Cardin has got a bill 
before you that I hope you pay attention to because it is an 
extraordinarily important approach to getting this waterway, 
and all national waterways, under control.
    I want to go off script and do something a little bit 
different. I want to make the point that nationally, nonpoint 
source pollution, particularly stormwater pollution, is an 
extraordinarily important problem. It is the problem that we 
have to face with water quality in America today.
    I have got one statistic to give you. According to recent 
assessments 39 percent of the assessed stream miles, 45 percent 
of the assessed lake acres, and 51 percent of assessed estuary 
acres remain impaired, largely by nonpoint source pollution. 
That is the kind of pollution that we have to face now.
    Second, highways are an extraordinarily efficient delivery 
mechanism for pollution to our waterways. The way we have 
engineered our highways we take the pollution off the roads, 
and we put it in our water. That is what we do here. We need to 
change the notion that a highway is an efficient delivery 
mechanism for pollution.
    Third, things that we have in the law currently to try to 
get this under control are not working. We have NEPA review, it 
has been in the law for 40-some years, we have the Clean Water 
Act provisions that have been in the law for now almost 40 
years, we have policy language, and we have the availability of 
funding that were in the last two transportation bills. It is 
not working yet. We need to do something different in this 
particular reauthorization.
    What we are suggesting to you is that what we need is a 
national policy statement in the bill about how highways need 
to be designed to control water pollution.
    Now, I do not presume to be a highway engineer or an 
expert, but I do know that in our region of the country we have 
a water quality problem. In many other regions of the country, 
Oklahoma, sir, and others, you have a water quantity problem. 
And one of the ways you could address this problem would be to 
design highways in a better way to try to stop the pollution 
and to put the water back in the ground where it can recharge 
the aquifers.
    That is a national policy that I would urge your Committee 
to consider. We spend about $40 billion a year in Federal funds 
subsidizing highways. I would argue as a taxpayer that for that 
$40 billion a year it would be entirely appropriate for us to 
have a policy statement that says this is how we want our money 
to be used and our roads to be built.
    Thank you very much.
    [The prepared statement of Mr. Siglin follows:]
    
    
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    Senator Boxer. Thank you. Would you like us to put your 
entire statement into the record?
    Mr. Siglin. I would like to put the statement in the 
record, and I would also like to have your permission to put 
the attached letters from the six Governors of the Chesapeake 
Bay States arguing for the same thing.
    Senator Boxer. Absolutely, we will do that.
    We have just been informed that we, Jeff, I want to let you 
know, Senator Merkley, at 11 we are going to have to shut down 
because there is going to be an objection to our meeting.
    So, my plan is to hear from Mr. Kolodziej. And then I am 
going to give my time over to you, Jeff, so you can make a 
statement and ask any questions. I am going to give that. All 
right?
    Senator Merkley. Thank you, Madam Chair, I will really only 
have a couple of minutes.
    Senator Boxer. That is fine. And then we will go back to 
Senator Cardin. And we could put questions into the record. But 
we are looking pretty good. Thank you for giving us that 
warning.
    Senator Cardin. Sure.
    Senator Boxer. So, Mr. Kolodziej, please proceed.

     STATEMENT OF RICHARD KOLODZIEJ, PRESIDENT, NGVAMERICA

    Mr. Kolodziej. Chairman Boxer, Ranking Member Inhofe, 
members of the Committee, as I mentioned, I am President of 
NGVAmerica. We are the national trade association for vehicles 
that are powered by natural gas and biomethane. Currently I am 
also President of the International Association of Natural Gas 
Vehicles, headquartered in New Zealand.
    I thank you for the opportunity to be here today to discuss 
how increased use of natural gas vehicles can improve our 
national goals of reducing greenhouse gases, reducing urban 
pollution and reducing dependence on foreign oil. And while 
achieving all these goals more NGVs would help create jobs here 
at home.
    NGVs are the fastest growing alternative to petroleum in 
the world. In 2003 there were only about 2.8 million NGVs in 
the world. Today, there are over 11.1 million NGVs, and the 
International Association of Natural Gas Vehicles forecasts 
that we will have 65 million NGVs in the world by 2020.
    Most of the NGVs globally are small sedans. But for a 
number of reasons, including the sheer size of America, the 
strategy of the U.S. NGV industry has been to focus on high 
fuel use fleets--trash trucks, transit buses, short haul 18 
wheelers, school buses, urban delivery vehicles of all types, 
shuttles and taxis. As a result, while we only have about 
110,000 NGVs in the United States, we estimate that last year 
these vehicles used about 40 billion cubic feet of natural gas, 
which is the equivalent of 320 million gallons of gasoline that 
we did not have to import.
    But with support of Government policies that number could 
reasonably grow to 1.25 trillion cubic feet of natural gas 
within 10 years, or the equivalent of 10 billion gallons. Now, 
some of this is going to be gasoline, but the majority is going 
to be diesel, which is important because diesel represents 
about 20 percent of the on road petroleum use. While there are 
many options to displace gasoline in light duty vehicles there 
are very few to displace diesel in heavier vehicles, and of 
those options natural gas can make the biggest impact the 
fastest.
    And this would have substantial environmental benefits. For 
example, the California Air Resources Board recently concluded 
that on a wheel-to-wheel basis, NGVs produced 22 percent less 
greenhouse gases than comparable diesel vehicles and 29 percent 
less than comparable gasoline vehicles. This is as good as or 
better than some renewable fuels.
    Importantly these numbers can be further improved if the 
natural gas is blended with renewable natural gas or 
biomethane, which can be made from landfill gas, animal waste, 
or sewage. That same CARB study showed that biomethane from 
waste is among the best greenhouse gas reduction strategies for 
transportation, reducing greenhouse gases by about 90 percent.
    NGVs also produce less criteria pollutants like nitrogen 
oxides. EPA's recent announcement that they are considering 
further tightening national ozone standards means that more 
cities and counties than ever are going to be looking for 
economical alternatives for ozone reductions, and that means 
more natural gas vehicles.
    And NGVs are economic. NGVs cost more to buy, but they are 
less costly to operate. Therefore, more miles driven means 
faster payback. The price of oil and natural gas historically 
has traded in an 8 or 9 to 1 ratio. That is 8 or 9 to 1 between 
a barrel of oil and 1,000 cubic feet of natural gas. But 
because of America's huge natural gas resource base and 
technology breakthroughs like horizontal drilling and gas shale 
fracturing that ratio is now 15 to 1--15 to 1 between a barrel 
of oil and 1,000 cubic feet of natural gas.
    And the Energy Information Administration predicts that it 
is going to be 15 to 1 even in 2030. That means that NGVs will 
continue to be economically attractive to customers, especially 
fleet customers.
    As to Federal policy, Congress could significantly 
accelerate the market penetration of NGVs through passage of S. 
1408, the NAT GAS Act. This bill, which has bipartisan support 
in both the Senate and the House, would extend and expand the 
existing Federal financial incentives for the purchase and use 
of NGVs.
    Senator Inhofe, the industry also appreciates your 
leadership in the introduction of S. 1809, a bill that would 
help streamline the EPA emission certification program for 
aftermarket conversion systems. If passed this bill would 
result in the availability of more systems for converting 
gasoline vehicles to run on natural gas--and they would be less 
expensive.
    Thank you for your attention. I would be delighted to 
answer any questions.
    [The prepared statement of Mr. Kolodziej follows:]
    
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    Senator Boxer. Thank you.
    Senator Udall, I just want you to know how we all send our 
love and condolences to you on your deep loss, and how we know 
how proud you were of your dad and how proud your dad was of 
you. So, on behalf of all of us, we wanted to say that.
    Senator Udall. Chairman Boxer, and to all the members of 
the Committee, thank you very much, and the outpouring has been 
overwhelming, really, more than anything. So, I just thank you 
for that. And my dad was very proud of the work this Committee 
has done. I know you talked to him on the phone a couple of 
months ago. So, he is following up there what we are doing.
    Senator Boxer. OK.
    Senator Udall. He wants to see something done. He would 
have said to me, Tom, get back to work. And that is it. So, OK. 
Thank you very much.
    Senator Boxer. So, here you are. Back to work.
    Senator Udall. Thank you.
    Senator Boxer. Now our situation is, this is bad. We have 7 
minutes before we are going to be shut down. I am going to give 
my time over to Senator Merkley, who has yet to speak. So, 
Senator, if we could just keep our statements or questions to 2 
minutes? It is a shame, but we are caught up in something that 
has to do with healthcare.
    Senator Merkley. Thank you. I will skip a statement and 
just ask a question so that my colleagues can ask one as well.
    Specifically, when we are looking at 20 million barrels per 
day consumption, and I believe that about a little over 11 of 
that is imported, I know the numbers jump around, a fair amount 
is from Mexico and Canada, that number changes also, but in the 
end I think we are in the category of about 6 million or 7 
million barrels per day from the Middle East and Venezuela. Is 
that about right?
    OK. When we look at the combination of approaches that are 
being discussed here, ranging from diversification of our 
domestic car fleet, certainly to greater use of other 
transportation options, to conversion to natural gas, as was 
mentioned, if we are determined as a Nation, can we not easily 
eliminate our dependence on foreign oil over the next 20 years?
    Mr. Kolodziej. We could certainly make a huge impact. 
People talk about panaceas. There are no panaceas. We have a 
lot of options. We have electric vehicles, plug hybrids, 
natural gas, propane, ethanol, and methanol. We have a lot of 
options. But we really do not have choices. We have to use all 
the alternatives that we have available today in the 
applications where they make sense today if we are going to 
make an impact. We cannot just pick one or two. In the case of 
natural gas we feel that high fuel use vehicles, especially 
urban vehicles, are the place to go.
    Senator Merkley. Granted we need to use all the options, 
but do you see this as an achievable goal over the next 20 
years if we have a structured plan for our Nation?
    Mr. Kolodziej. We will not be independent, but we will be 
much less dependent, and much less dependent is something I 
think we should strive for. I think total independence probably 
is not achievable because of the world market for oil. But if 
we can have a system where our commercial infrastructure cannot 
be impacted because of an embargo, that would be something we 
ought to be focusing on.
    Mr. Lovaas. I agree that technically we would not be energy 
independent in 20 years but we would definitely be energy 
secure if we set our minds to it. And this has to do with some 
of the supply options that Mr. Kolodziej mentioned, and we need 
an array of those. And also it has to do with moderating 
demand, and that is about vehicle efficiency. And that is also 
about addressing travel activity through the transportation 
bill especially.
    Senator Merkley. Thank you.
    Senator Boxer. Thank you.
    Senator Inhofe.
    Senator Inhofe. Thank you, Madam Chairman. We have to make 
this real quick, so I will. I just have to get this in every 
time we talk about wanting to be independent. All we have to do 
is take the restrictions off the United States so we can 
develop our own resources like every other country does. That, 
combined with Canada and Mexico, we are putting together a 
study now to see how long it would take to be totally 
independent, and it is way, way less than 20 years.
    First of all, I would ask for consent to put this letter in 
the record from the National Propane Gas Association.
    Senator Boxer. Without objection.
    Senator Inhofe. And I would say to you, Mr. Kolodziej, that 
we have been working on this for a long time. And I appreciate 
the comments that you made. We have bureaucratic obstacles, 
quite frankly. The EPA is helping us and working with us right 
now.
    As you know, in my home town we have Tom Sewall who has 
developed technologies that he is actually selling to other 
countries. He is doing conversions along with the home units 
that you can convert your own natural gas to compressed natural 
gas. So, we are making some headway there.
    And you are right. I would just like to make sure that 
everyone knows that those who are supporting our legislation to 
do this are Harry Reid, Orrin Hatch, Robert Menendez, Mark 
Begich, Mark Pryor, Lisa Murkowski, myself and others.
    So, the question I would ask you, and it is a yes or no 
question, is have you ever seen anything that is enjoying that 
kind of bipartisan support?
    Mr. Kolodziej. Not recently.
    Senator Inhofe. No. Thank you. The other thing that I would 
like to just have you, you stated it well before, on the 
potential we have in natural gas, that was to be able to 
develop those reserves that I talked about in my opening 
statement, we would have to be using the technology that is out 
there right now in hydraulic fracturing specifically. I think 
you said that in your statement, did you not?
    Mr. Kolodziej. Yes. Hydraulic fracturing is critical right 
now. And you know, since the 1940s we have drilled about 1 
million of these fracturing wells, and the safety record has 
been extraordinary.
    Senator Inhofe. Thank you. Thank you, Madam Chair.
    [The referenced information follows:]
    
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    Senator Boxer. Thank you. I ask unanimous consent to place 
in the record a letter from the American Road and 
Transportation Builders Association and John Boesel of 
CALSTART, as well as a letter signed by a number of clean air 
task forces and a number of others. So, without objection, we 
will do that.
    So, I am going to call now on Senator Cardin, who is not 
here, so Senator Carper. Go, Senator Carper, go.
    Senator Carper. Thanks very much.
    This is a question I want to ask of Mr. Lovaas. Here we go. 
What role should intercity passenger rail play in the next 
transportation bill, and what are your suggestions for a 
primary source of funding?
    Mr. Lovaas. For a source of funding for passenger rail?
    Senator Carper. Intercity passenger rail. What role should 
intercity passenger rail play in the next transportation bill, 
and what are your suggestions for a primary source of funding?
    Mr. Lovaas. Well, we are working with this bipartisan 
coalition, the Mobility Choice Coalition, and as part of that 
we favor an oil security fee based on the national security 
implications of our dependence on oil and that could in part be 
a revenue source for new transportation choices, including 
intercity rail. And then the other more near-term bill that is 
on the table currently is the climate bill, which of course 
will have some sort of transportation component, and a portion 
of that revenue, as much as possible, should go to clean 
transportation infrastructure, including intercity rail.
    Senator Carper. All right. Good. Thanks.
    Second question. How can transportation policy better 
integrate electric vehicles into our existing infrastructure?
    Mr. Lovaas. Well, there is an opportunity to look at public 
charging stations on the national highway system and the 
interstate highway system and other Federal facilities. And the 
transportation bill should encourage regions to adopt 
electrification programs to transition as quickly as possible 
to a pluggable fleet of cars and trucks.
    Senator Carper. All right. Thanks.
    My time has expired. Thank you, Madam Chairman, and thank 
you for those crisp, succinct answers.
    [The prepared statement of Senator Carper follows:]

                  Statement of Hon. Thomas R. Carper, 
                U.S. Senator from the State of Delaware

    Chairman Boxer, thanks for holding this hearing on the 
nexus of energy, environment and transportation policy.
    As a Nation we consume 20 million barrels of oil per day--
nearly all of which goes to our petroleum dependent 
transportation system. More than 60 percent of that oil is 
imported from foreign countries.
    This imbalance of domestic production and imports creates a 
harmful dependence upon other countries for our energy. The 
negative effects of that dependence on the environment and on 
our national security have been well documented before this 
Committee.
    In March Senator Specter and I introduced CLEAN TEA, which 
seeks to reduce oil consumption and greenhouse gas emissions 
from the transportation sector. Four other colleagues on this 
Committee have signed on to the bill. And I would like to 
applaud Chairman Boxer for including the legislation in her 
climate change bill.
    Over the past few years Congress and this Administration 
have taken bold steps to reduce emissions from transportation. 
In 2007 we increased CAFE standards to 36 miles per gallon by 
2020. Thanks to the Obama administration we will reach that 
level by 2016. These changes alone will reduce oil consumption 
by a million barrels per day.
    Congress has also adopted a Renewable Fuels Standard to 
reduce the carbon content of gasoline. And we have invested 
billions of dollars in electric vehicles. These measures will 
take important steps toward reducing our oil consumption and 
protecting the environment.
    However, we need to go further. We need a new 
transportation paradigm that fully embraces energy and 
environmental concerns.
    We need a transportation system that does not force all 
Americans to spend a full week of every year stuck in traffic.
    We need a transportation system that allows Americans--
under their own free will--to travel by high speed train, to 
have better intercity bus service, or to live closer to their 
place of employment.
    The members of this Committee have worked hard to make sure 
that climate legislation has a transportation focus. We have 
more work to do on that front, but I am confident that my 
colleagues in the Senate understand the necessity of reducing 
transportation emissions through a comprehensive set of 
strategies--including my CLEAN TEA bill.
    In addition to a climate bill with a transportation focus 
we need a transportation bill with a climate focus.
    This Committee has heard from a number of experts about the 
need to re-focus our transportation systems around a set of 
national goals. I believe that the reduction of greenhouse gas 
emissions and of oil consumption should be two of the goals 
that define our transportation investments.
    I look forward to working with Chairman Boxer and my 
colleagues on this Committee to transform that aspiration into 
reality.

    [The referenced information was not received at time of 
print.]
    Senator Boxer. Thank you.
    Senator Udall. And we can send our questions in for them to 
answer. Go ahead.
    Senator Udall. Thank you, Madam Chair. We will submit some 
into the record.
    Just a quick one here, to Mr. Kolodziej. As we all know the 
U.S. is now importing around two-thirds of our daily oil 
requirements. Just a few years ago Congress feared that we 
would need to start importing liquefied natural gas. Recent 
natural gas discoveries in deep shale and other unconventional 
formations now mean that our supplies have increased by about 
40 percent in just 2 years. That works out to over 100 years of 
supply at 2007 levels, perhaps a longer supply than we have of 
coal.
    If the United States used even a modest portion of this gas 
in vehicles we could make a significant dent in our dependence 
on foreign oil. What natural gas vehicle policies do we have 
now that are making an impact, and how could they be enhanced 
to both improve energy independence and reduce pollution?
    Mr. Kolodziej. There are currently incentives that were 
passed in the EPAct of 2005 and the SAFETEA-LU bill for the 
purchase and use of natural gas vehicles. One of those has 
already expired and hopefully will be extended in the extenders 
bill. The other two would expire at the end of this year.
    The NAT GAS Act, which I mentioned before, is a bill that 
would significantly expand and extend those incentives. And 
that would send a signal to customers--fleet customers and all 
customers--that Congress is four-square behind this use of 
natural gas, and it would provide the economic incentive to 
accelerate the use of natural gas in the marketplace.
    Senator Udall. Thank you very much.
    I yield back.
    Senator Boxer. Well, we made it through to 11 o'clock.
    [Laughter.]
    Senator Boxer. And we have not been told to stop yet. So, I 
guess I can ask a couple of questions. I had deferred those. 
So, let me.
    I would like to ask Mr. Greene, my friend from the 
Sacramento area, what are some of the health impacts of 
emissions from the transportation sector in the Sacramento 
region?
    Mr. Greene. Well, obviously, we are non-attainment for 
those two Federal standards, and of course we have issues with 
people building homes, houses and such as that. Transportation 
being such a huge part of our inventory, we do not have the 
stationary sources that they do in Southern California and 
other parts of the State. So, the majority of our impacts are 
from transportation, and those impacts are typical things you 
see for health.
    Senator Boxer. Thank you very much. I have been told that 
we were told that we need to shut down.
    So, I deeply apologize to the panel. Paul, do you want to 
say who called us please? The Senate floor. This has to do with 
tactics by my Republican friends who are upset about what is 
happening on the floor, so they are saying that committees 
cannot meet. That is their absolute right to do it. So I am so 
sorry. With deep apologies for those of you who came a long 
way. But we got your testimony in and we thank you very much.
    We stand adjourned.
    [Whereupon, at 11:05 a.m. the Committee was adjourned.]
    [Additional material submitted for the record follows:]
    
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