[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
H.R. ___, THE ENERGY TAX PREVENTION ACT OF 2011
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND POWER
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
----------
FEBRUARY 9, 2011
----------
Serial No. 112-2
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
H.R. ___, THE ENERGY TAX PREVENTION ACT OF 2011
H.R. ___, THE ENERGY TAX PREVENTION ACT OF 2011
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND POWER
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
FEBRUARY 9, 2011
__________
Serial No. 112-2
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
U.S. GOVERNMENT PRINTING OFFICE
65-734 WASHINGTON : 2011
-----------------------------------------------------------------------
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE MYRICK, North Carolina GENE GREEN, Texas
Vice Chair DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANE HARMAN, California
MICHAEL C. BURGESS, Texas JAN SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN BILBRAY, California JAY INSLEE, Washington
CHARLIE BASS, New Hampshire TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana ANTHONY D. WEINER, New York
BOB LATTA, Ohio JIM MATHESON, Utah
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi JOHN BARROW, Georgia
LEONARD LANCE, New Jersey DORIS O. MATSUI, California
BILL CASSIDY, Louisiana
BRETT GUTHRIE, Kentucky
PETE OLSON, Texas
DAVID McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
MORGAN GRIFFITH, Virginia
(ii)
Subcommittee on Energy and Power
ED WHITFIELD, Kentucky
Chairman
JOHN SULLIVAN, Oklahoma BOBBY RUSH, Illinois
Vice Chair Ranking Member
JOHN SHIMKUS, Illinois JAY INSLEE, Washington
GREG WALDEN, Oregon JIM MATHESON, Utah
LEE TERRY, Nebraska JOHN D. DINGELL, Michigan
MICHAEL C. BURGESS, Texas EDWARD J. MARKEY, Massachusetts
BRIAN BILBRAY, California ELIOT L. ENGEL, New York
STEVE SCALISE, Louisiana GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington LOIS CAPPS, California
PETE OLSON, Texas MIKE DOYLE, Pennsylvania
DAVID MCKINLEY, West Virginia JANE HARMAN, California
CORY GARDNER, Colorado HENRY A. WAXMAN, California (ex
MIKE POMPEO, Kansas officio)
MORGAN GRIFFITH, Virginia
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
C O N T E N T S
----------
Page
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 1
Prepared statement........................................... 3
Hon. Bobby Rush, a Representative in Congress from the State of
Illinois, opening statement.................................... 4
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 6
Prepared statement........................................... 7
Hon. Joe Barton, a Representative in Congress from the State of
Texas, opening statement....................................... 7
Prepared statement........................................... 8
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 9
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, prepared statement................................ 23
Hon. John Sullivan, a Representative in Congress from the State
of Oklahoma, prepared statement................................ 308
Hon. David McKinley, a Representative in Congress from the State
of West Virginia, prepared statement........................... 309
Hon. Cory Gardner, a Representative in Congress from the State of
Colorado, prepared statement................................... 309
Hon. Lois Capps, a Representative in Congress from the State of
California, prepared statement................................. 311
Witnesses
James Inhofe, U.S. Senator, State of Oklahoma.................... 10
Prepared statement........................................... 13
Lisa Jackson, Administrator, Environmental Protection Agency..... 26
Prepared statement........................................... 28
Answers to submitted questions \1\...........................
Greg Abbott, Attorney General, State of Texas.................... 72
Prepared statement........................................... 74
Harry C. Alford, President and CEO, National Black Chamber of
Commerce....................................................... 89
Prepared statement........................................... 91
Steve Rowlan, General Manager, Environmental Affairs, Nucor
Corporation.................................................... 99
Prepared statement........................................... 101
James Pearce, Director of Manufacturing, FMC Corporation......... 104
Prepared statement........................................... 106
Steve Cousins, Vice President, Lions Oil Company................. 113
Prepared statement........................................... 115
Lonnie N. Carter, President and CEO, Santee Cooper............... 129
Prepared statement........................................... 131
Betsey Blaisdell, Senior Manager of Environmental Stewardship,
The Timberland Company......................................... 146
Prepared statement........................................... 149
Peter S. Glaser, President, Troutman Sanders LLP................. 185
Prepared statement........................................... 188
Margo Thorning, Senior Vice President and Chief Economist,
American Council for Capital Investment........................ 227
Prepared statement........................................... 229
Philip Nelson, President, Illinois Farm Bureau................... 241
Prepared statement........................................... 243
Fred T. Harnack, General Manager, Environmental Affairs, U.S.
Steel Corporation.............................................. 251
Prepared statement........................................... 253
James N. Goldstene, Executive Officer, California Air Resources
Board.......................................................... 277
Prepared statement........................................... 279
Answers to submitted questions............................... 656
Lynn R. Goldman, American Public Health Association.............. 287
Prepared statement........................................... 289
Submitted Material
``Comments on Draft Technical Support Document for Endangerment
Analysis for Greenhouse Gas Emissions under the Clean Air
Act,'' report by Alan Carlin, submitted by Mr. Barton.......... 312
EPA White Paper, dated February 8, 2011.......................... 408
Letter of February 9, 2011, signed by 1,800 professionals from
all 50 States, submitted by Ms. Capps.......................... 420
``American Lung Association Urges Congress to Reject Chairman
Upton's Clean Air Act Bill, press release, dated February 2,
2011, submitted by Ms. Capps................................... 438
Communication from former EPA Administrator Stephen Johnson to
former President George W. Bush, submitted by Mr. Waxman....... 442
Statement of Mark Z. Jacobson of Stanford University, submitted
by Mr. Inslee.................................................. 486
Statement of David Gardiner, Executive Director, Alliance for
Industrial Efficiency, submitted by Mr. Waxman................. 497
Statements and letters from various organizations, submitted by
Mr. Rush....................................................... 504
Statement of National Association of Realtors, submitted by Mr.
Whitfield...................................................... 646
----------
\1\ Ms. Jackson did not respond to submitted questions for the
record.
H.R. ___, THE ENERGY TAX PREVENTION ACT OF 2011
----------
THURSDAY, FEBRUARY 9, 2011
House of Representatives,
Subcommittee on Energy and Power,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 9:38 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Ed
Whitfield (chairman of the subcommittee) presiding.
Members present: Representatives Whitfield, Sullivan,
Shimkus, Walden, Terry, Burgess, Scalise, McMorris Rodgers,
Olson, McKinley, Gardner, Pompeo, Griffith, Barton, Upton (ex
officio), Rush, Inslee, Matheson, Dingell, Markey, Engel,
Green, Capps, Doyle, and Waxman (ex officio).
Staff present: Mary Neumayr, senior energy counsel; Peter
Spencer, professional staff member; Maryam Brown, chief
counsel, Energy and Power; Elizabeth Lowell, legislative
clerk;, Ben Lieberman, counsel; Cory Hicks, policy coordinator,
Energy and Power; Phil Barnett, democratic staff director; Greg
Dotson, democratic chief counsel, Energy and Power; Alexandra
Teitz, senior democratic counsel; and Caitlin Haberman,
democratic policy analyst.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. I would like to call this hearing to order
this morning. The topic of our hearing, it is a legislative
hearing on the Energy Tax Prevention Act of 2011. I certainly
want to welcome the members of the subcommittee. I look forward
to working with all of you as we seek to craft an energy and
environmental strategy and policy that will be in the best
interest of the American people, and I believe that can best be
accomplished by Congress and the EPA working together. Congress
intends to reassert itself in the statutory and regulatory
process at EPA.
I am pleased to be serving again with my friend and
colleague, the ranking member, Mr. Rush. We served on the CTCP
Subcommittee in the last Congress, and I look forward to
working with him as well as all members of the subcommittee.
I also want to thank our witnesses today and thank them for
being here to help us look at this very important issue. We are
going to have four panels of witnesses today, and all of them
are going to provide us with information that is going to be
helpful as we move forward.
Today's hearing is going to focus on greenhouse gas
rulemaking within the Environmental Protection Agency that many
of us believe attempts to address an issue properly within the
purview of the Congress, and then we are also going to be
talking about legislation that has been introduced that would
restore the proper balance to decision-making affecting
greenhouse gases.
The Obama Administration has been the most aggressive in
recent memory. As a matter of fact, six rules were issued on
Christmas Eve and there is a pipeline full of regulations
waiting to be issued, and States frequently are not being given
adequate time to reexamine and rewrite State implementation
plans to respond to this aggressive pace. I, like others, have
been besieged with calls from entities all over the country
complaining about EPA's attempt to regulate greenhouse gases.
Congress has made its will crystal clear on this issue. Our
esteemed colleague, Chairman Emeritus John Dingell on the
Democratic side, who led the negotiations on the 1990 Clean Air
Act Amendments, wrote, ``I would have difficulty concluding the
House-Senate conferees who rejected the Senate greenhouse gas
regulatory provisions contemplated regulating greenhouse gas
emissions or addressing global warming under the Clean Air
Act.'' As recently as 2008, Mr. Dingell warned that regulating
greenhouse gases under the Clean Air Act rather than new
legislation would lead to, as he said, glorious mess. And then
on July 25, 1997, Senate Resolution 98 expressing the sense of
the Senate that the United States not be a signatory to the
Kyoto Protocol that would have required the United States to
reduce greenhouse gas emissions was approved by the Senate by a
vote of 95 to nothing. And when the 111th Congress revisited
this issue last year, it responded with a resounding no to
regulating greenhouse gases by not passing the so-called cap-
and-trade bill.
Although Congress has made its position abundantly clear
not to regulate greenhouse gases, we now have a bureaucracy,
unelected staff at EPA and the courts pushing the United States
down a path that in my opinion will cost jobs and make us less
competitive in the global marketplace. Furthermore, what is
worse about this is that technology is not available to capture
greenhouse gases, and we do not have any idea what the cost
versus the benefits will be. And if the tailoring rule is
determined to be a violation of the Clean Air Act, which is
certainly possible, EPA applying the statutes permitting these
thresholds has estimated that over 6 million sources in our
country would need to obtain Title V operating permits and also
it would lead to 82,000 permitting actions annually under the
preventing significant deterioration formula, and it has also
been estimated at EPA that doing that would estimate a cost of
$22.5 billion it would cost permitting authorities in the
United States.
So good energy policy is about expanding choices. All of us
know that our energy demands are going to basically double by
the year 2035 and we are going to need energy from all sources
to meet the demands of this country. We are going to
renewables, we are going to need natural gas, coal, nuclear,
everything, and I do get the sense that sometimes those people
who are pushing this country down a quick pathway to green
energy are more interested in putting fossil fuels out of
business than they are working to solve this problem. We
recognize that we have to have energy from all sources.
So I am delighted that you are here today. We look forward
to the testimony of all of you.
[The prepared statement of Mr. Whitfield follows:]
Prepared Statement of Hon. Ed Whitfield
Good morning, and welcome to Members of the Subcommittee. I
look forward to working with all of you as we seek to craft
energy and environmental policies that will be in the best
interests of the American people. That can best be accomplished
by Congress and EPA working together. Congress intends to
reassert itself in the statutory and regulatory process at EPA
and specifically the Clean Air Act.
I am pleased to be serving again with my friend and
colleague, the Ranking Member, Mr. Rush. We served on the CTCP
subcommittee in the last Congress and I look forward to working
with him and all members of this subcommittee.
I would also like to welcome our witnesses, and thank them
for being here and for their contributions to today's
discussions.
Today's hearing will focus on a greenhouse gas (GHG)
rulemaking within the Environmental Protection Agency that many
of us believe attempts to address an issue properly within the
purview of the Congress, and legislation that would restore the
proper balance to decision-making affecting it.
The Obama Administration EPA has been the most aggressive
in recent memory. Six rules were issued on Christmas Eve and
there is a pipeline full of regulations waiting to be issued
and states are not being given adequate time to examine and re-
write state implementation plans to respond to this aggressive
pace.
I have been besieged with calls from entities all over the
country complaining about EPA's attempt to regulate greenhouse
gases. Congress has made its will crystal clear on this issue.
Our esteemed colleague, Chairman Emeritus John Dingell, who led
the negotiations on the 1990 Clean Air Act amendments wrote,
``I would have difficulty concluding that the House-Senate
conferees, who rejected the Senate (greenhouse gas) regulatory
provisions.contemplated regulating greenhouse gas emissions or
addressing global warming under the Clean Air Act.'' As
recently as 2008, he warned that regulating GHG's under the
Clean Air Act rather than new ...legislation would lead to a
``glorious mess."
On July 25, 1997, S. Resolution 98, expressing the sense of
the Senate that the United States not be a signatory to the
Kyoto Protocol that would have required the United States to
reduce greenhouse gas emissions was approved by a vote of 95 to
0.
When the 111th Congress revisited this issue last year, it
responded with a resounding no to regulating greenhouse gases
by not passing the so called ``Cap and Trade'' bill.
Although Congress has made its position abundantly clear
not to regulate GHG's, we now have unelected staff at EPA and
the Courts pushing the United States down a path that in my
opinion will cost jobs and make us less competitive in the
global market place. Furthermore, the technology is not
available to capture greenhouse gases and we do not have any
idea what the cost vs. benefits will be. If the tailoring rule
is determined to be a violation of the Clean Air Act, EPA
applying the statues permitting thresholds has estimated that
over 6 million sources would need to obtain Title 5 Operating
Permits and also that it would lead to 82,000 permitting
actions annually under PSD, resulting in an estimated cost of
22.5 billion dollars to permitting authorities.
President Obama and Administrator Jackson have said their
efforts to regulate GHGs will be considerably costlier and less
workable than the legislation Congress rejected last year.
Good energy policy is all about expanding choices -
including allowing the increased use of coal if the American
economy needs it. There's a role for alternatives, but only to
the extent they can compete on a level playing field with
conventional energy and don't drive up energy costs for
consumers and businesses. Many of us are concerned that EPA's
regulations are all about artificially raising the cost of
using coal and other fossil fuels in order to drive them out of
the marketplace - in other words, reducing energy choices.
There's a reason other manufacturing nations, including
China, are not considering anything even remotely like these
EPA regulations. They recognize the obvious fact that higher
energy costs at home will send jobs abroad. Manufacturers in
China are doing just fine without us handing them a comparative
advantage with these EPA regulations.
Let's face it, these regulations and others from EPA amount
to a war on domestic coal. Coal is the energy source America
possesses in the greatest abundance. It provides half the
nation's electricity and 92 percent in my home state of
Kentucky, and it does so because it is affordable.
Without coal, residential electric bills would be higher,
and many energy-using manufacturers would be at a global
disadvantage compared to other nations that don't hesitate to
use it.
For example, in Webster County, Kentucky, we have an
aluminum manufacturing company, which molds aluminum for
various products around the world. This facility employs 500
people in a county with a population of roughly 15,000. EPA's
regulations will most certainly raise electricity rates to a
point where these smelters and those jobs will move overseas.
In addition, without coal, hundreds of thousands of miners
and others who derive their livelihoods from coal would be out
of work, and many communities would suffer. In Kentucky, miners
represent 17,000 people and the indirect impacts of coal keep
the Commonwealth's economic engine running.
EPA's global warming regulations are tailor-made to raise
energy costs for customers of any utility or manufacturer that
wants to use coal as a fuel source. But EPA's war on coal goes
beyond that. The agency's decision to revoke a mine permit in
West Virginia that had already been approved, coupled with
burdensome new regulations under the Clean Water Act, raise
troubling questions whether EPA has lost sight of its
environmental protection role and is trying to set industrial
policy.
Of course, in order to meet our energy demand and continue
to grow our economy, we need all energy sources, including
coal, natural gas, oil, nuclear and renewables.
I'm not going to support anything that threatens our
economic recovery and I will oppose anything that will weaken
our economy or make us less competitive in the global market
place. For these reasons, I support the Energy Tax Prevention
Act, which will properly reassert Congress' authority in this
area.
I look forward to hearing from our witnesses and I now
recognize the Ranking Member of the Subcommittee, Mr. Rush.
----------
Mr. Whitfield. At this time I would like to recognize the
gentleman from Illinois, the ranking member of the
subcommittee, Mr. Rush, for 5 minutes for his opening
statement.
OPENING STATEMENT OF HON. BOBBY RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Rush. Thank you, Mr. Chairman, and I want to thank you
very much for this opportunity. I want to congratulate you on
your selection to become chairman of the Energy and Power
Subcommittee. As you have indicated, I too enjoyed very much
working with you when you were the ranking member of the
Subcommittee on Commerce, Trade, and Consumer Protection. You
and I worked together hand and hand to move a lot of
legislation through the subcommittee in the 111th Congress, and
I look forward to the same outcomes in the 112th Congress.
Unfortunately, I can't say that the discussion draft that
we are taking up today exemplifies good legislation. Before
delivering my opening statement, Mr. Chairman, I want to get a
few things off my chest. I really have a bone to pick. I know
that this is a new Congress and a new majority has come in with
it. That said, our committee rules, procedures and decorum have
remained substantially the same. Mr. Chairman, if we are not
careful to set the right course of action moving forward, we
will find ourselves lost in a sea of confusion, and we get our
sea legs underneath us, we must try to do better.
I am extremely troubled by the Majority's stubborn
resistance to inviting credible witnesses at this hearing who
think and believe the EPA has a duty and the authority under
the Clean Air Act to regulate greenhouse gases. Stacking
different cards with the same suit will rig the outcome before
the first hand is even dealt. But that isn't what the American
people and the American taxpayer want, and that is certainly
not what they deserve. This is the House of Representatives. We
represent all the American people and all businesses and public
interest, not just some of them or the ones who support what we
and our little circles want to do and desire to do.
As I said earlier, this hearing's focus is on a legislative
draft known as the Upton-Inhofe Energy Tax Prevention Act. The
draft bill will eviscerate the EPA by repealing indispensable
responsibility and authority the agency holds under the Clean
Air Act to preserve and protect human health, our environment,
and to promote more efficient use of energy. It would further
overturn a Supreme Court decision affirming a lower court's
ruling that the EPA has the authority to regulate greenhouse
gases and it would prohibit the State of California from
regulating greenhouse gas emissions from automobiles as well as
stop the EPA from taking further steps in reducing tailpipe
emissions. Mr. Chairman, it goes without saying that this
proposal before us overreaches by large limits, and Mr.
Chairman, this gets me to what my big rub is today. What
irritates me the most is the Majority's refusal to invite the
Administrator of the EPA, Ms. Lisa Jackson, to testify at
today's hearing. The only reason that Administrator Jackson is
appearing before us today is because we here in the Majority
had to kick and scream and scratch so that Madam Administrator
could have her day and the opportunity to defend her agency's
findings and judgments here in the halls of Congress. How can
we formulate good public policy or look at ourselves as fair
and decent lawmakers if Congress as a body doesn't solicit the
expert views of the EPA on this legislation? And as a Member of
Congress, I want to hear as many pertinent viewpoints as I am
able to hear before deciding how to cast my votes on pieces of
legislation that are critical to the welfare of our economy,
our own safety as human beings and preservation of our planet.
Mr. Chairman, it goes without saying that we should not
have to push this hard to get key officials and important
witnesses invited to hearings of this magnitude, and that is
one reason why, Mr. Chairman, I ask for unanimous consent to
enter into the record a response dated December 8, 2010, to a
Wall Street Journal editorial entitled ``The EPA Permitorium.''
Mr. Chairman, with that said, I yield back the balance of my
time.
Mr. Whitfield. I thank the gentleman for that opening
statement, and we do look forward to hearing Ms. Jackson. She
will be here on the second panel, and we all will look forward
to her testimony.
At this time I would like to recognize for 5 minutes the
chairman of the committee, Mr. Upton of Michigan.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF MICHIGAN
Mr. Upton. Well, thank you, Mr. Chairman. It is a delight
to be here, and I would just open my remarks by saying that it
was the Minority that asked for Administrator Lisa Jackson to
come, and we are delighted to have her, and with nature, she
has got a good parking place right outside the door as well. In
all seriousness, that was the Minority's request and we are
certainly delighted to make sure that it happened.
This hearing really is about job creation. It is a simple
goal but unfortunately one that Washington lost sight of in the
last few years. No more. Cap-and-trade legislation failed in
the last Congress in that it did not get through the Senate or
to the President's desk but now we face the threat of the EPA
bureaucrats imposing the same agenda through a series of
regulations. Like cap and trade, these regulations would boost
the cost of energy not just for homeowners and car owners but
for businesses large and small. EPA may be starting by
regulating only the largest power plants and factories but we
will all feel the impact of higher prices and fewer jobs.
These regs go after emissions of carbon dioxide, the
unavoidable byproduct of using coal, oil and natural gas that
provides the Nation with 85 percent of its energy. These fossil
fuels are such an important part of our energy mix because they
are often the most affordable choice. EPA regs seek to take
away that choice by making the use of these fuels prohibitively
expensive. It is worth noting that for all the mentions of
clean energy in the President's State of the Union, he never
once mentioned keeping energy affordable. Affordable energy is
what keeps our economy moving.
We live in a global marketplace filled with manufacturers
working to produce high-quality goods at the lowest cost. I
know American manufacturers can compete but not if they are
saddled with burdensome regs that put us at a distinct, unfair
disadvantage.
Needless to say, the Chinese government and other
competitors have no intention of burdening and raising the cost
of doing business for their manufacturers and energy producers
the way EPA plans to do here in America. Our goal should be to
export goods, not jobs.
To do that, we released a draft, and it is a draft, called
the Energy Tax Prevention Act. This is a bill that would
protect jobs and preserve the intent of the Clean Air Act. It
is narrowly crafted. It specifically targets the EPA's regs
under the Clean Air Act that regulate carbon dioxide and other
greenhouse gases as related to climate change. It allows States
to continue setting climate policy as they please, but prevents
those actions from being imposed or enforced nationally. It
leaves in place the tailpipe standards for cars and light
trucks from model years 2012 through 2016, and allows NHTSA to
continue to regulate fuel economy after 2016.
I have mentioned what this proposal does, but let me also
emphasize what it does not do. It does not weaken the Clean Air
Act. It does not limit EPA's ability to monitor and reduce
pollutants that damage public health. I have looked back at the
comments made by the authors of the revisions to the Clean Air
Act in the early 1990s, and I am confident that our bill
actually restores the Clean Air Act to its intended purpose.
I yield the balance of my time to Chairman Emeritus Joe
Barton from Texas.
[The prepared statement of Mr. Upton follows:]
Prepared Statement of Hon. Fred Upton
Job creation. It's a simple goal, but unfortunately, one
Washington lost sight of in the last few years. Well, no more.
Cap and trade legislation failed in the last Congress, but
now we face the threat of Environmental Protection Agency
bureaucrats imposing the same agenda through a series of
regulations.
Like cap and trade, these regulations would boost the cost
of energy, not just for homeowners and car owners, but for
businesses both large and small. EPA may be starting by
regulating only the largest power plants and factories, but we
will all feel the impact of higher prices and fewer jobs.
These regulations go after emissions of carbon dioxide -
the unavoidable byproduct of using the coal, oil, and natural
gas that provides this nation with 85 percent of its energy.
These fossil fuels are such an important part of our energy mix
because they are often the most affordable choice. EPA
regulators seek to take away that choice by making the use of
these fuels prohibitively expensive.
It's worth noting that for all the mentions of ``clean''
energy in the President's State of the Union, he never once
mentioned keeping energy ``affordable.'' ``Affordable'' energy
is what keeps our economy moving.
We live in global marketplace filled with manufacturers
working to produce high quality items at the lowest cost. I
know American manufacturers can compete - but not if they are
saddled with burdensome regulations that put us at an unfair
disadvantage.
Needless to say, the Chinese government and other
competitors have no intention of burdening and raising the cost
of doing business for their manufacturers and energy producers
the way EPA plans to here in America. Our goal should be to
export goods, not jobs.
To do that, we have released a draft proposal called the
Energy Tax Prevention Act. This is a bill to protect jobs and
preserve the intent of the Clean Air Act.
Our proposal is narrowly crafted.
It specifically targets the EPA's regulations under the
Clean Air Act that regulate carbon dioxide and other greenhouse
gases as related to climate change.
It allows states to continue setting climate policy as they
please, but prevents those actions from being imposed or
enforced nationally.
It leaves in place the tailpipe standards for cars and
light trucks from model years 2012 through 2016, and allows
NHTSA to continue to regulate fuel economy after 2016.
I've mentioned what this proposal does, but let me also
emphasize what it does NOT do. It does not weaken the Clean Air
Act. It does not limit EPA's ability to monitor and reduce
pollutants that damage public health. Let me repeat that: this
bill does NOT impact EPA's ability to reduce pollutants that
damage public health. I have looked back at the comments made
by the authors of the revisions to the Clean Air Act in the
early 1990s, and I am confident that our bill actually restores
the Clean Air Act to its intended purpose.
OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Barton. Well, thank you, Chairman Upton.
Welcome, Senator Inhofe, former House member and good
friend and senior member of the other body. We are glad to have
your comments. I also want to welcome my Attorney General, Greg
Abbott, my good friend from Austin, Texas, and the General
Manager for Environmental Affairs of Nucor Corporation, Mr.
Steve Rowlan, who has several manufacturing facilities in my
district.
The great Joe Louis, the heavy champion of the mid-1900s,
was facing a difficult test with another heavyweight contender,
and made the comment, ``He can run but he can't hide.'' Well,
today we are going to use that in the legislative arena. The
Environmental Protection Agency and the Obama Administration
have decided basically just because they have the ability to
decide as the executive branch that they want to put the
American economy in a straitjacket and cost us millions of jobs
and hundreds of billions of dollars a year with these
greenhouse gas regulations. They couldn't get it through the
legislative process. The Markey-Waxman bill in the last
Congress barely passed the House and it did not go anywhere in
the Senate so they tried to do it by a regulatory approach. It
is not going to work. Chairman Upton and Subcommittee Chairman
Whitfield have introduced this draft legislation, and I fully
expect in the next month or two that it is going to pass the
subcommittee and the full committee.
So today we are going to start that legislative process. I
am going to put into the record some comments from one of the
EPA officials who had the authority at the time to take a look
at the proposed endangerment finding, and I am going to read
from the executive summary one sentence and then yield back the
balance of Mr. Upton's time. It says, ``In many cases, the most
important arguments are based not on multimillion-dollar
research efforts but by simple observation of available data
which has surprisingly received so little scrutiny. In the end,
it must be emphasized that the issue is not which side has
spent the most money or pushed the most peer-reviewed papers,
the issue is whether the greenhouse gas CO2
hypothesis meets the ultimate scientific test: conformance with
real-world data.'' What these comments show is that in this
case the ultimate test, the hypothesis fails. That is why we
have put this legislation forward and that is why at the
appropriate time it is going to pass and go to the House floor.
With that, I yield back.
[The prepared statement of Mr. Barton follows:]
Prepared Statement of Hon. Joe Barton
Thank you Chairman for holding this important hearing. As
Chairman Emeritus, I stand with Chairman Upton and Subcommittee
Chairman Whitfield in support of denying bureaucrats at the
Environmental Protection Agency (EPA) the right to regulate
greenhouse gases under the Clean Air Act; and beginning to
rebalance the power between the executive and the legislative
branches.
For the past 2 years, the Obama Administration has been
using the EPA as the means to create an end that I, along with
the majority of Americans, strongly oppose. This end results in
a world where affordable, reliable, and American-based energy
is no longer freely available. This end results in the loss of
innovation and job opportunities at home and sends American-
owned companies and their jobs overseas. This end results in
increasing the cost of fuel, electricity, and other goods and
services to the American public.
For the past 2 years, the decisions of executive branch
bureaucrats at the EPA have not been subject to congressional
oversight and I am glad that this Committee is beginning to
remedy that situation starting today. I hope this hearing is
just the first in a series of hearings discussing legislation
that addresses several of my concerns, including: the many
flaws in the EPA's endangerment finding for greenhouse gases;
the unjustifiable economic harm being passed on to the American
public at little to no proven benefit, health or otherwise; and
the inconsistencies in the EPA's approach and attack on
individual states' air quality standards and permitting
requirements.
I would like to offer a special welcome to Texas Attorney
General Greg Abbott. Attorney General Abbott, along with the
Texas Commission on Environmental Quality and countless other
private sector and state representatives, has been fighting a
good fight and asking the EPA to explain and reconsider
specific regulations regarding greenhouse gases and permitting
issues and I look forward to hearing from Mr. Abbott and the
other witnesses about their interactions and relationships with
the EPA.
I, like all Americans, want to breathe clean air and make
sure that our children and future generations inherit the same
beautiful country that we enjoy now. We already have laws on
the books that protect our air and before Congress or federal
agencies enact new laws we must examine the facts, the science,
the needs of the American public, and the economic impact of
new regulations.
Mr. Whitfield. At this time I recognize the ranking member
of the full Energy and Commerce 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.
Today we hold a hearing on legislation that would rollback
the Clean Air Act and block the Environmental Protection Agency
from regulating dangerous carbon emissions from power plants,
oil refineries and other large polluters. The underlying
premise of this bill is that climate change is a hoax. That is
the view of the chief Senate sponsor of this bill and it is
also the view of our former chairman of this committee, Mr.
Barton, and that is the foundation of this bill. This
legislation says carbon emissions do not endanger public health
and welfare.
Mr. Chairman, you and the new Republican majority have a
lot of power to write the Nation's laws but you do not have the
power to rewrite the laws of nature, and that is the
fundamental problem with this proposal.
In 2009, EPA found that carbon emissions endanger public
health and the environment. That was a scientific conclusion
that is supported by the National Academy of Sciences, the
premier scientific organizations of all the world's major
economies.
This legislation would overturn EPA's endangerment finding.
Now, this won't stop carbon pollution from building up in
the atmosphere. It won't stop the droughts and floods that are
spreading like an epidemic across the globe. It won't protect
the air quality of our cities when summer temperatures soar to
record levels, and it won't stop the strange weather patterns
that have locked much of our Nation in a deep freeze this
winter.
What it will do, though, is gut the Clean Air Act and
prevent EPA from addressing this enormous threat to public
health and welfare.
Protecting public health and preventing climate change
should not be a partisan issue. In January 2008, Stephen
Johnson, the former EPA Administrator under President Bush,
sent a letter to President Bush. Administrator Johnson wrote,
``The latest science of climate change requires the Agency to
propose a positive endangerment finding. It does not permit a
credible finding that we need to wait for more research.'' And
he said that the Bush Cabinet agreed with this position.
The science hasn't changed in the last 2 years, in fact, it
has only gotten stronger. Yet somehow belief in science has
become another partisan battleground.
This legislation is called the ``Energy Tax Prevention
Act.'' This title is total nonsense because EPA has no
authority to levy energy taxes.
What this bill should be called is the ``Big Polluter
Protection Act.'' The only beneficiaries of this legislation
are the Nation's largest polluters. The biggest backer of this
bill is Koch Industries, an oil company that spent millions of
dollars to elect Republicans to Congress.
Now, members can have different ideas about how to reduce
carbon pollution. I believe the steps that EPA Administrator
Lisa Jackson is proposing under the Clean Air Act are moderate
and appropriate. They are also remarkably similar to the
measures that former Administrator Johnson recommended to
President Bush. But I understand that members could reasonably
have different views. Indeed, I preferred the market-based
approach recommended by utilities and manufacturers that was
the basis for the House-passed clean energy legislation last
Congress.
But what doesn't make sense is the extreme approach in this
bill. It will repeal the only authority the Administration has
to protect our health and the environment without providing any
alternative. That is another repeal but no alternative to
replace it. Why replace it? The science is a hoax, we don't
need to solve the problem, there is no problem. That is the
underlying assumption. Well, that will only make the problem
worse.
History will not judge this committee kindly if we become
the last bastion of the polluters and the science deniers. When
carbon emissions rise to record levels and our weather system
goes haywire, the American people will ask why we acted so
irresponsibly. I hope we will be able to tell them that we
stood up for science and public health and rejected this
extreme proposal. I yield back my time.
Mr. Whitfield. Thank you, Mr. Waxman.
At this time we will introduce our first witness, who
really needs no introduction. Senator James Inhofe from
Oklahoma is the ranking member of the Senate Committee on
Environment and Public Works. Of course, he served in the House
of Representatives. He is recognized as a real expert in the
field of energy as well as other areas. We are delighted to
have him with us today, and I might say that he is floating a
discussion draft over on the Senate side very similar to our
legislation we have on the House side. So Senator Inhofe, we
are delighted to have you with us today and we recognize you
for an opening statement.
STATEMENT OF JAMES INHOFE, U.S. SENATOR, STATE OF OKLAHOMA
Mr. Inhofe. First of all, let me thank you for the
invitation to be here. It is a joy. The only disappointment I
have is that I am not sitting at the same table with
Administrator Jackson. I know it surprises and disappoints a
lot of people that she and I are really very good friends. I
find her--a lot of liberals aren't this way but in her case,
she responds to a question, she gives you an honest answer, and
I have always appreciated that.
Much to the chagrin of my staff, I am not going to use my
opening statement that they prepared, but so that they won't be
completely overlooked, I would like to ask that it be made a
part of the record, and I will go ahead and ramble just for a
few minutes.
Let me share a couple of thoughts that I have with you.
First of all, this issue is a new issue to the House,
relatively new. We have been dealing with it since Kyoto, since
the middle 1990s, and I was in the middle of it back then and
you are right, you quoted the statement that was made by some
95 to nothing in the Senate. Now, that statement to refresh
memories here, was that we are not going to ratify anything
that doesn't treat developing nations like developed nations or
that is devastating to our economy. However, most of the
Senators at that time were believers, and I use the word ``the
alarmists.'' I think most of them would fit that.
And so we--and I have to admit, you know, confession is
good for the soul. When I was the chairman of the subcommittee,
I believe the Clean Air Subcommittee of EPW, I thought too that
catastrophic global warming was caused by anthropogenic gases
because everybody said it was, and it wasn't until the Wharton
School came out with, I think it was called the Wharton
Econometric Survey, the question was this: should we ratify the
Kyoto treaty, what would it cost the people of America, and the
result was a range. That range was between $300 billion and
$400 billion a year. Then I happened to think, you know, when
you got up in the billions and trillions, it is kind of hard.
You have to bring this back home. I remembered how outrageous
it was when the Clinton-Gore tax increase of 1993 came through,
and that was a $30 billion tax increase. I thought wait a
minute, this is 10 times greater than that. So I thought at
that time, let us at least look and be sure that the science is
there, and I remember at that time there was a scientist by the
name of Tom Wigley. Tom Wigley was commissioned, I believe, by
then-Vice President Al Gore to answer the question that if all
nations, all developed nations were to get together and agree
to the Kyoto treaty and live by their emission standards, how
much would that reduce the temperature in 50 years. The answer
was something like seven one-hundredths of 1 degree Celsius.
Well, of course, that was something that wasn't even
measurable.
So when we started questioning the science, all of a sudden
the scientists came out of the woodwork and they were coming in
and giving testimonials about how they, the IPCC, would not
consider any views that anyone had unless they themselves were
an alarmist. Well, we started talking about that and then
obviously we did not ratify. By the way, it is important to
note that the ones who were really pushing the Kyoto treaty,
that would have been the Clinton-Gore Administration, they
never submitted to the Senate for ratification. So it is not
our fault that we never had that before us but they wisely did
not do it.
Then we started coming up with the bills. We had McCain-
Lieberman of 2003, McCain-Lieberman of 2005, the Waxman-Markey
bill, the Lieberman-Warner bill, the Sanders-Boxer bill. Now,
they were all very similar. Cap and trade is cap and trade.
Now, you could argue, well, wait a minute--and I am sure
Congressman Waxman would disagree with this--but all these
bills along with the Kyoto treaty would cost in that range of
somewhere between $300 billion and $400 billion a year. It is
not just Wharton. MIT, Penn State and others have come in and
talked about that.
I am going to mention too, I want to end my opening
statement with two quotes or responses to questions by Lisa
Jackson that I have a great deal of respect for. Well, we have
made a decision some time ago as we were trying to defeat and
successfully did defeat all the bills that I mentioned on the
Floor of the Senate, and one of the things I did since at best
the science is mixed, there is nothing conclusive in the
science, but it is mixed, let us go ahead--and I did this, it
might have been when we were debating the Waxman-Markey bill or
it might have been the Sanders-Boxer bill, I can't remember
which one, but I said even though I don't agree the science is
there, let us stipulate to it so we can talk about the
economics, and so we did, and then is when we started talking
about the cost of this thing.
I think that maybe in response to questions I can be more
specific but this bill that I will be the sponsor in the
Senate, it will be the same wording, I say to Chairman
Whitfield, that is just one of the problems we are having right
now with the overregulation of the Environmental Protection
Agency. We have such things as the boiler and utility MACT--
that is the maximum achievable control technology--ozone, the
PM 10 dust, hydraulic fracturing, all these things to put
American jobs either overseas or just kill them and destroy our
economy. These things are happening right now. This is one part
of it but a very important part of it.
Now, what I am going to say within my time frame here and
make two observations, and this came from Administrator
Jackson. In one of our committee hearings, and I will tell you
when it was, it was in December, a year ago December, right
before, the day before I was going to go to Copenhagen. I was
the one-man truth squad in Copenhagen, I might add, and before
I left I said in a hearing, Mr. Chairman, I said, Madam
Administrator, I understand and I believe that once I leave
town you are going to have an endangerment finding, and she did
not deny that and she kind of nodded and with her very pleasant
smile like she always has, and I said when you do this, it has
got to be based on some kind of science, what science would you
base this on, and she said well, primarily it is the IPCC. That
is the United Nations. Well, that was right in the middle of
the time that they had been totally debunked. Now, they try to
say that Climategate wasn't a real thing. It was. They tried to
play it down. Let me just real quickly, so it is in the record,
talk about it. Atlantic magazine said the close-mindedness of
these supposed men of science, their willingness to go to any
length to defend a preconceived message is surprising even to
me. The stink of intellectual corruption is overpowering. The
statement in the Daily Telegraph, this is the largest one in
London, the scandal could well be the greatest scandal in
modern science. So we have all of the facts that this is the
science on which this is based, and I am hoping that people are
going to keep this in the dialog, let people know how phony
this was.
The other thing was, and I am speaking now to the many
people out not just in my State of Oklahoma but throughout
America who think I am wrong on this issue, people who really
believe, people who think that the alarmists are right, that in
fact that anthropogenic gases are causing catastrophic global
warming. To them I say this: If they are right, what difference
does this really make? Because when I asked the question to
Administrator Jackson, I said if we were to pass this bill, I
don't know, I say to my good friend, Mr. Waxman, whether it was
the Waxman-Markey or which bill it was, but I said if we pass
this, will this have a reduction, result in reducing greenhouse
gases. Her answer was no, because this only applies to the
United States.
I will carry it one step further. If we cause our jobs to
go overseas as a result of having something like this, those
jobs are going to go places like China and India and Mexico
where they don't have any restrictions at all, and so those
people who say well, we have to set the example in America,
that China is anxious to follow our great example. I say they
are laughing at us right now. They are not going to do it. They
are waiting for those jobs to come over.
So with that, I would only say that I hope we will get a
chance to realize that even if this ends up, those people out
here that really believe this, what we take, the action we take
whether it is through regulation or whether it is through
legislation here in the United States is not going to reduce
the greenhouse gas emissions. Thank you, Mr. Chairman.
[The prepared statement of Mr. Inhofe follows:]
Testimony of James M. Inhofe
Thank you, Chairman Upton, Chairman Whitfield, and Ranking
Member Rush for the opportunity to speak to the subcommittee
this morning. It is an honor to provide testimony to the
subcommittee on the Energy Tax Prevention Act of 2011.
The draft bill, sponsored by me, Rep. Upton, and Rep.
Whitfield, would repeal EPA's authority to regulate greenhouse
gases under the Clean Air Act. We're doing this for one simple
reason: EPA's regulations will impose enormous costs for no
meaningful benefits-in other words, all pain for no climate
gain.
I have great respect for Administrator Jackson-she is doing
what she thinks is right. But I think EPA is taking the wrong
course. Let me explain.
Congress didn't allow EPA to regulate greenhouse gases
under the Clean Air Act. Administrator Jackson even agreed with
the statement two years ago that the Clean Air Act ``is not
specifically designed to address greenhouse gases''.
We also know that EPA's own analysis shows its actions
won't affect climate change, and the scientific basis of its
endangerment finding, which the Administrator confirmed to me
is the UN's Intergovernmental Panel on Climate Change, or IPCC,
is flawed.
Now I'm not here to debate science. So let's assume-as I
did during the Lieberman-Warner debate in the Senate-that
predictions of more droughts, more floods, more intense storms,
and more cases of disease are true. What we know is that EPA's
regulations won't affect any of this.
EPA's analysis of the Lieberman-Warner bill shows that,
without aggressive action by China and India, cap-and-trade
won't reduce greenhouse gases by any meaningful amount. The EPA
also found that its regulations covering CO2 from cars would
reduce global temperatures by 0.006 degrees Celsius by 2100. In
other words: no effect.
Now what if we added actions by other countries? Dr. Tom
Wigley of the National Center for Atmospheric Research found
that full implementation of Kyoto, including action by the
U.S., Europe, Canada, Russia, and others, would reduce global
temperature by, at most, 0.21 degrees Celsius by 2100. In other
words, the Earth would warm about 6 percent less than it
normally would.
We know from Wharton, MIT, and others that Kyoto would cost
about $300 to $400 billion annually through higher gas, food,
and electricity prices. In fact, that's about the cost of all
the cap-and-trade bills we've seen since 2003. EPA's
regulations will be no different.
The point is this: it is unfair and unacceptable to ask the
steel worker in Ohio, the chemical plant worker in Michigan,
and the coal miner in West Virginia to sacrifice their jobs so
we can reduce temperature by a barely detectable amount in 100
years.
Yet this is exactly what the EPA is doing. The Energy Tax
Prevention Act would stop EPA and protect those jobs. It would
ensure that America's manufacturers can stay here and compete
against China. And it would put Congress back in charge of
deciding the nation's climate change policy.
EPA's actions under the Clean Air Act are part of the cap-
and-trade agenda. That agenda wants higher energy prices for
consumers, higher taxes for citizens, more regulations on small
businesses, more restrictions on choices, and ultimately less
freedom. Supporters believe these things will stop global
warming. They won't.
EPA claims the Supreme Court forced it to act. Not so; the
Supreme Court ruled that EPA possessed the discretion under the
Clean Air Act to decide whether greenhouse gases endanger
public health and welfare. EPA was given a choice, and it made
the wrong choice. The Energy Tax Prevention Act is the right
choice for jobs, for consumers, for a growing economy, and for
the future of America.
Mr. Whitfield. Thank you, Senator Inhofe. We appreciate
your testimony.
Mr. Waxman in his opening statement referred to this letter
by former EPA Administrator Steve Johnson to President Bush
about the endangerment finding, and I don't know all the
details about it so I am going to ask you about it, but it was
my understanding that once they really got into the process of
looking at that, a number of federal agencies came out very
much opposed to an endangerment finding including Ag, Commerce,
Transportation and Energy. Do you have any recollection of the
letter that Mr. Waxman was referring to?
Mr. Inhofe. I do, because first of all, I have a great deal
of respect for Steve Johnson and I supported his being put in
the position he was in. I would only say this. Those who want
to quote him as was quoted in the opening statement here in
this meeting need to talk about what he said since then. I want
to quote him now. He said, ``One point is clear. The potential
regulation of greenhouse gases under any portion of the Clean
Air Act could result in an unprecedented expansion of EPA
authority that would have a profound effect on virtually every
sector of the economy and touch every household in the land.''
He went on to say, ``I believe the ANPR demonstrates the Clean
Air Act, an outdated law originally enacted to control regional
pollutants that caused direct health effects, is ill-suited for
the task of regulating global greenhouse gases.''
Mr. Whitfield. Thanks.
Mr. Inhofe. And this by way, you mentioned the Departments
of Energy, Transportation, Commerce, Agriculture and probably
some others have made this statement.
Mr. Whitfield. I was looking at the EPA Web site actually
last night, and there was a comment on there right at the very
main page. It said ``We are working across the nation to usher
in a green economy.'' Now, we all recognize, as I said in my
opening statement, to meet our energy demands, we are going to
have to have renewables, we are going to have to have
everything, but this Administration seems to be so focused on
pushing a green economy, and I know that President Obama in his
State of the Union address talked about this green economy is
going to stimulate the economy and create the jobs. And I know
from the research that I have done personally, one of the
countries that has been a leader in green energy has been
Spain, and I read an article just a couple of days ago that
they have the highest unemployment rate in the industrialized
world, approaching 20 percent. Do you have the same concerns
about this all-out push for green energy and the impact that
that could have on our employment levels in America?
Mr. Inhofe. Chairman Whitfield, it goes even further than
that. One of the--I would have to, for the record, give you the
name of which one of the Administration said this, I think it
might have been the Under Secretary of Treasury, made the
statement that we are going to have to do, they say take away
the perks that are out there for the energy industry so that we
can force people to concentrate on green energy. I think
everyone here, I think every Republican and Democrat or the
Republicans, anyway, they want all of the above. We want gas,
oil, coal, nuclear, renewables, green, we want it all, but what
is available now to run this machine called America? We have
oil and gas.
This is new information. As of just a year ago, we in the
United States have the greatest, largest number of recoverable
reserves in coal, oil and gas of any country in the world. We
are not number 2, we are number 1. Now, if you look at the
shale opportunities that are out there and the fact that these
are close formations, we have enough natural gas to take care
of this country for 110 years. Now, yes, during that time
perhaps technology will be here, we will have all kinds of
green opportunities. That is great. I am all for it. But until
then, you have got to run this country.
The thing that bothers me over in the Senate, I hear from
my good friends John Kerry, Barbara Boxer, they all talk about
our dependence on foreign countries, for our oil, our energy,
as if, you know, we shut down fossil fuels and somehow not be
as dependent upon them. Just the opposite. You know, we have to
run this machine called America and we can't do it now without
fossil fuels. If we could release all the political pressures
that are on our resources out there, we wouldn't have to be
dependent upon any foreign country or the Middle East for one
barrel of oil. I forgot what your question is but that is the
answer.
Mr. Whitfield. Thank you. I thought it was a good answer.
I recognize Mr. Rush for 5 minutes.
Mr. Rush. I thought it was a good question but I didn't
think it was a good answer.
Senator, I have the utmost respect for you. I want to thank
you for taking the time out to come to this hearing. As you
know, there are some vociferous and very disagreement with some
of your conclusions, especially as it relates to job creation
and also electric reliability. Administrator Jackson, she has
pointed out in her White Paper that she released earlier that
the environmental, technology and services sectors generated
under the Clean Air Act an estimated $300 billion in revenue--
that is $300 billion in revenue--and supported nearly 1.7
million jobs, and I think those are real jobs. That is
certainly not chump change. Do you have any comments or any
reaction to her conclusion?
Mr. Inhofe. Yes, I do, Congressman. First of all, I have a
Web site , Inhofe.Senate.gov, and if you go there you will
find, I have talked about the money and the jobs that all these
overregulations would cause. Now, you are addressing only the
greenhouse gas, what is happening with the regulations that are
subject of this committee. But I had mentioned in my opening
statement, there is also all the MACT laws, the utility MACT,
the boiler MACT, trying to stop hydraulic fracturing, the
ozone, all of these issues that are there, the PM10 dust, if
you add those up, each one has a price tag in terms of dollars
and the amount of the jobs that would be lost. Those jobs, that
information comes from most of the labor unions in the United
States along with, I might add, the National Black Chamber of
Commerce, who will be testifying, I don't know whether he is on
today, but he is great. He has testified before our committee.
And I want you to ask him that question because I think it is
very specific. The jobs that would be lost, the costs that
would be there are something that we can't sustain in this
country.
Mr. Rush. Thank you, Senator. Senator, let me ask you, as I
think you are the ranking member on, which committee now?
Mr. Inhofe. Environment and Public Works.
Mr. Rush. I wanted to make sure I got it right. And as
ranking member and during the course of that committee's
hearings, I am sure you had a number of different hearings on
this particular subject. Is that correct?
Mr. Inhofe. We have had hearings.
Mr. Rush. Has your committee conducted hearings with no
scientists among the witnesses? Have scientists been included
in your hearings?
Mr. Inhofe. Yes, we have scientists there on both sides, as
you well know, because you are going through this now. When you
are a minority, you don't get as many witnesses.
Mr. Rush. But do you find it strange that this hearing is
being conducted with no scientists at all?
Mr. Inhofe. We had scientists in our hearing. I would just
use one, Richard Linzen, for example, from MIT is recognized as
one of the very top individuals. He testified and----
Mr. Rush. Senator, which I do understand, but do you find
that it is strange that at this hearing of this importance that
we have no scientists on the witness list at all for this
hearing? Do you find that strange?
Mr. Inhofe. I don't know. You would have to ask the
chairman that question. I do know that the Rules of the House
and the rules of the Senate do provide for minority witnesses
and so I don't know how this was constructed.
Mr. Rush. All right. And lastly, Senator, Chairman Waxman
and I on February 7th sent a letter to the chairman and asked
him that the Republicans and the Democrats work together to
write bipartisan legislation to establish a clean energy
standard. Do you support similar activity in the Senate?
Mr. Inhofe. Well, yes. We have been trying to do that for a
long period of time. Unfortunately, CO2 has held
hostage all kinds of opportunities. We had the Clear Skies
bill. That would have been SOx, NOx,
mercury. We could have passed the most restrictive bill in
terms of emissions, of pollutants but it was held hostage
because we don't care about all that, we want to make sure that
CO2 is there. So I do support programs that affect
kinds of emissions and I strongly support it. I would say this,
that we are going to go through the process, and I am hopeful
that I can get my bill passed in the Senate and this bill
passed here and we will see what happens. It could be we would
have to override a veto. I don't know. But we may end up--
things are going to change in a couple years so we will have to
wait and see.
Mr. Rush. Thank you. I yield back the balance of my time.
Mr. Whitfield. Thank you, Mr. Rush.
At this time I recognize Mr. Upton.
Mr. Upton. Thank you, Mr. Chairman, and again Senator, I
appreciate you being here, especially on a day that the Senate
doesn't have votes and I know you are trying to get back to
snow-laden Oklahoma where they have, I am told, cross-country
skiing. I am not sure you have got any hills for downhill but
you have got a good 10 inches last night, and people at least
can go straight forward.
Two questions that I want to ask. One is, I mentioned in my
opening statement, and I wanted you just to comment on, as
regards to some groups that are offering criticism toward this
discussion draft. In your view, does it in any way undermine
the Clean Air Act?
Mr. Inhofe. No, it is not going to weaken the regulation of
air pollution that, you know, people are concerned about,
asthma and heart attacks and all these long list of things,
lung cancer. The Clean Air Act has reduced air pollution and
has done so in conjunction with a period of economic growth.
That is significant because during that period of time all
these things have actually reduced, and I can't see that this
would have any effect on that. I did mention that things like
the Diesel Regulation Act, Clear Skies, these are things that
we have been trying to do and have done successfully, so we are
addressing that and have been addressing that with such
legislation as I just mentioned.
Mr. Upton. Now, I know that you are writing a book, and----
Mr. Inhofe. Guess what the name of it is?
Mr. Upton. Well, you can tell me in a second. I just want
to know if you are going to talk in your book or you are
planning to write in your book whether EPA has calculated the
further reduction in temperature from the tailpipe rule at
about one-hundredth of a degree Fahrenheit by the year 2100.
Mr. Inhofe. I think what you are getting to here confirms
what I said in my opening statement about the Tom Wigley report
on the Kyoto treaty, that it is hardly detectable. I will tell
you about my book. I did finish it last week on the 5th,
although now I see we are going to have to go forward with it a
little bit further. I won't tell you what it is about but the
name of the book is The Hoax. Yes, there have been a lot of
things that--Don Rumsfeld is not the only one writing a book.
Mr. Upton. Thank you. I yield back, Mr. Chairman.
Mr. Whitfield. Thank you. At this time I recognize the
gentleman from California, Mr. Waxman.
Mr. Inhofe. And he will be the first to receive an
autographed copy.
Mr. Waxman. I will be greatly honored. I receive a lot of
books. In fact, I just got one that pointed out that Jack
Abramoff was railroaded into prison by the establishment, so I
am looking forward to reading both books.
Senator Inhofe, it is my understanding you have said, and I
think you said it very clearly a minute ago, that this climate
change idea is just a hoax being perpetrated on the American
people. Is that right?
Mr. Inhofe. That is right.
Mr. Waxman. I am a lawyer, and I don't have a scientific
background. I understand your degree was in economics and you
ran small businesses before you were elected to public office.
Like me, you are not a scientist by training. Isn't that right?
Mr. Inhofe. That's correct.
Mr. Waxman. Now, I want to read you a quote from our
Nation's premier scientific organization, the National Academy
of Sciences. According to the National Academy of Sciences,
``Climate change is occurring, is caused largely by human
activities, and poses significant risks for and in many cases
is already affecting a broad range of human and natural
systems.'' Senator, you disagree with the National Academy of
Sciences. Is that right?
Mr. Inhofe. Well, I disagree with that particular
interpretation. I would add that there are several members,
former members of the National Academy of Sciences, who are not
there anymore because they disagreed----
Mr. Waxman. Well, that is their conclusion and you disagree
with it.
Mr. Inhofe. And----
Mr. Waxman. No, Senator, it is my turn now. You are in the
House and this is a 5-minute round so you know how that goes.
Mr. Inhofe. Yes, sir. It hasn't been that long.
Mr. Waxman. Now, you disagree with that and the National
Academy of Sciences. The National Academy of Sciences is our
Nation's premier scientific institution. I don't know why they
would want to mislead the American people. But they are not
alone. The American Association for the Advancement of Science,
the American Geophysical Union, the American Meteorological
Society along with 15 other leading scientific organizations
have concluded, and I want to quote, ``If we are to avoid the
most severe impacts of climate change, emissions of greenhouse
gases must be dramatically reduced.'' Thirteen federal
departments and agencies including NASA, the National Science
Foundation, the Department of Defense have reported that global
warming is ``unequivocal and primarily human induced.'' And the
leading scientific organizations in England, France, Germany,
Russia, Japan, China, Brazil and India have all reached the
same conclusion.
Now, Chairman Upton and you have gone to the point where
you say that this is not something we need to deal with. I
think Mr. Upton says it is a problem that is occurring but he
doesn't accept it as human emissions that are causing climate
change. Well, Mr. Rush raised this point. I think it would be
important and I would request that we hold hearings on this
fundamental issue of science before we vote on this
legislation. The premise of the Inhofe-Upton legislation is
that carbon emissions don't endanger public health. Before we
proceed, we should call the best scientists in the Nation
before the committee so we can understand whether Senator
Inhofe's views or Chairman Upton's are supported by the
science. But it seems to me what you are saying is, even if
climate change is real, we can't do anything about it so we
shouldn't even try, and if that is the situation, I find that
quite amazing.
Now, the reason this is under the Clean Air Act is because
the Supreme Court by 5-4 said EPA must regulate if they have an
endangerment finding. The Supreme Court by 5-4. There are a lot
of Supreme Court decisions that went 5-4 that I didn't like but
this is one where the Court said that this is part of the Clean
Air Act.
I think that there is a fundamental flaw in one of the
arguments that I have been hearing. When you calculate the
benefits of action, there is an assumption that the United
States and other nations will take only minimal steps to
control emissions, but when you calculate the cost, there is an
assumption, there is a completely different scenario that the
United States will implement draconian control measures. I
don't think that is fair. A fair analysis will show that the
modest measures that EPA is currently proposing will have
little impact on the economy. In fact, EPA's analysis shows our
economy grows because we become more energy efficient. In other
words, we are making a small step forward on climate change at
virtually no cost to the economy. A fair analysis will show
that if we adopt more far-reaching measures, we could have a
major impact on climate change at a manageable cost.
Last year the House passed the Waxman-Markey bill, passed
out of this committee as well. That would have reduced U.S.
emissions by 80 percent by 2050. Modeling of that bill proved
that we could dramatically reduce pollution for only a postage
stamp per day while cutting the deficit. Well, I think if we do
nothing, and this bill is a repeal and no replacement. No
replacement for dealing with this problem. If it is a real
problem, let us acknowledge it and figure out a way to deal
with it and resolve our differences on how to approach a
constructive resolution. But if it is not a problem, then I
think what we are doing is saying that we can't do anything
about the droughts, the floods, the storms, the public health
and economic misery climate change will cause, so we simply
should give up trying, and I don't think that is the American
way. Yield back my time.
Mr. Inhofe. Mr. Chairman, I know his time has expired but
he asked me three questions and I can answer them real quick.
Mr. Whitfield. OK.
Mr. Inhofe. First of all, I knew you were going to end up
with the droughts and the floods and all that. It is the fear
that has been driving this for so long. Let me just answer the
three questions.
First of all, the fact that if we were--the reason in my
opening statement----
Mr. Waxman. What are the three questions you seek to
answer?
Mr. Inhofe. Well, I am answering them right now. One was
about the reductions. The fact is----
Mr. Waxman. I asked you whether you disagree with the
National Academy of Sciences. I asked you very specific
questions.
Mr. Barton. Mr. Chairman, we should let our witness make a
statement. Mr. Waxman talked for 4 minutes----
Mr. Waxman. Mr. Chairman----
Mr. Barton. He basically gave an opening statement.
Mr. Waxman [continuing]. The time now goes to whoever on
your side is next, and they can yield their time for that
purpose. But I will go along with whatever the----
Mr. Barton. We always let the witness answer a question----
Mr. Waxman. Well, I didn't have a question pending.
Mr. Inhofe. Yes, you did.
Mr. Waxman. If the gentleman wants to respond to my
statements, then that is up to the Chair whether that comes out
of my time.
Mr. Whitfield. I will tell you what let us do, Senator
Inhofe. I am going to go to Mr. Barton and he can ask
questions. We have a lot of other people, and I am sure that--
--
Mr. Inhofe. That is fine.
Mr. Whitfield [continuing]. We will get to the issues. Mr.
Barton, I recognize you for 5 minutes.
Mr. Barton. Thank you, Chairman. We do give our witnesses
the courtesy at the end of their--when somebody gives a
soliloquy or monolog like Chairman Waxman did to at least make
a comment on it.
Senator, you have participated in dozens of hearing on this
issue in the other body, some as chairman and some as ranking
member. Is that not correct?
Mr. Inhofe. That is correct.
Mr. Barton. And you would consider yourself at least in
that body to be knowledgeable on this issue?
Mr. Inhofe. Not scientifically, as pointed out by Mr.
Waxman, but yes.
Mr. Barton. You mentioned in your opening statement
millions of jobs and hundreds of billions per year and studies
that have been done by independent groups. I think the U.S.
Chamber has done a study, Heritage has done a study. You
mentioned MIT. Have any of those studies been refuted by the
EPA or any other executive branch authority in the Obama
Administration?
Mr. Inhofe. No, they haven't. The interesting thing is that
there is a consistency here. It doesn't matter whether you are
talking about the Kyoto treaty or any of the other issues or
bills that we considered including the Waxman-Markey bill, the
amount is always in that range, $300 billion to $400 billion,
and that is pretty consistent.
Mr. Barton. So there has been no refutation of those type
order of magnitude numbers?
Mr. Inhofe. I can remember when we have had witnesses from
the EPA who have agreed with that. Some will not, of course.
Mr. Barton. And obviously if cap and trade had been
implemented like Mr. Markey and Mr. Waxman wanted, or if these
pending greenhouse gas regulations are implemented, we could
expect that type of an impact and that would certainly be a
tax, if not explicitly, implicitly, on the U.S. economy. Would
you agree with that?
Mr. Inhofe. I would say precisely the same difference in
what they are attempting to do with regulations and what they
are attempting to do with legislation so I think it would be
the same, yes, sir.
Mr. Barton. Now, you indicated that you have got a draft
bill that is either identical or very similar to Chairman
Whitfield and Chairman Upton's bill. Is that correct?
Mr. Inhofe. That is correct.
Mr. Barton. Does your legislation or this pending
legislation that is in draft form, does it change the standard
on ozone under the Clean Air Act?
Mr. Inhofe. No.
Mr. Barton. Does it change the standard on particulate
matter?
Mr. Inhofe. No, it doesn't.
Mr. Barton. Does it change the standard on carbon monoxide?
Mr. Inhofe. No.
Mr. Barton. Does it change the standard on nitric oxide?
Mr. Inhofe. No.
Mr. Barton. Does it change the standard on sulfur dioxide?
Mr. Inhofe. No.
Mr. Barton. Does it change the standard on lead?
Mr. Inhofe. No.
Mr. Barton. Those are the six criteria pollutants that are
regulated under the Clean Air Act. Is that not correct?
Mr. Inhofe. That is correct.
Mr. Barton. So if you don't change any of those standards,
to paraphrase former Chairman Waxman, you are certainly not
gutting the Clean Air Act, are you?
Mr. Inhofe. No, sir.
Mr. Barton. What you are doing, though, Senator, is saying
that the Clean Air Act and its amendments were never intended
to regulate CO2 as a pollutant. Is that not correct?
Mr. Inhofe. Which is also what Mr. Johnson said, yes, sir.
Mr. Barton. And I think this is a true statement. I was on
this committee when was passed the Clean Air Act Amendments of
1990. I was a cosponsor. I participated in the debate. Chairman
Dingell was the full committee chairman and was very fair in
allowing what was then the Minority that I was a member of to
be a full participant in those debates. I don't remember that
we put CO2 in any way in the Clean Air Act
Amendments. Is that your recollection?
Mr. Inhofe. That is correct.
Mr. Barton. Are you familiar with the comments of a
scientist or at least a senior staffer at the EPA who has since
retired named Mr. Alan Carlin?
Mr. Inhofe. Yes, I am.
Mr. Barton. And are you cognizant of the report that he
attempted to publish that was suppressed for some time by the
EPA that basically said the endangerment finding put forward by
the Obama Administration was totally incorrect? Now, I am
paraphrasing when I say totally incorrect but he pointed out
seven or eight basic flaws that says the hypothesis is not
supportable.
Mr. Inhofe. It was a career ender, yes.
Mr. Barton. He has since retired?
Mr. Inhofe. Yes.
Mr. Barton. I am going to submit that statement, this
report for the record, Mr. Chairman.
Mr. Whitfield. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. Barton. It is about 50 pages, so I don't know what the
rules are on that lengthy of a statement being put in the
record, but I would hope the Minority would allow us to.
And with that, I again thank Senator Inhofe and we look
forward to working with you, and I yield back, Mr. Chairman.
Mr. Whitfield. Thank you.
I am going to call on the chairman emeritus, Mr. Dingell,
for questions, but before, Mr. Dingell, you ask your questions,
Senator, it is my understanding that you are going to have to
leave relatively soon.
Mr. Inhofe. Well, we are having a problem now. I am trying
to get back to Tulsa but there is a record snow and maybe they
are canceling the flights, but yes, I do have to try.
Mr. Whitfield. OK. Well, then Mr. Dingell, I am going to
allow you----
Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
This will comfort you and I am sure Senator Inhofe. I have no
questions. I wanted to welcome the senator.
Mr. Inhofe. Could I use some of your time to answer the
question from Mr. Waxman?
Mr. Dingell. Well, all I really wanted to do, Senator, is
welcome you back.
Mr. Inhofe. Thank you very much, sir.
Mr. Dingell. Good to see you again.
Mr. Inslee. Mr. Dingell, would you mind yielding your time?
Mr. Dingell. I am sorry?
Mr. Inslee. Would you mind yielding your time to a fellow
over here?
Mr. Dingell. No, I really don't want to.
[The prepared statement of Mr. Dingell follows:]
[GRAPHIC] [TIFF OMITTED] T5734.096
Mr. Inslee. Thank you very much.
Senator Inhofe, welcome to the committee. You were right on
one thing. You were right on one thing. The alarmists should
not be listened to because the alarmists are those pessimists
who figure out that Americans aren't smart enough to innovate
our way out of this pickle, and we are in a pickle. And
Senator, thank you for telling about your book. I am going to
suggest a book you might want to look at. It is called Apollo's
Fire, a book I coauthored, and it tells you how we are going to
grow our economy, an economy that the evidence shows we can
grow.
Now, the Americans are against this ``Dirty Air Act,'' and
that is what it is, and I will explain why in a minute. They
are against this Dirty Air Act three to one, and the reason is,
they know that the Clean Air Act reduced pollution 60 percent
over the last 40 years while we grew our economy 207 percent.
Mr. Inhofe. I agree.
Mr. Inslee. Americans get it that we can innovate our way
out of this pickle. Now, this is why this is the Dirty Air Act.
I hear my friends saying we don't have anything against the
Clean Air Act, we are not gutting the Clean Air Act. It is like
saying they are not against the Antiterrorism Act, all we are
doing is passing a bill saying the FBI can't enforce it. Now,
when you gut the EPA's ability to enforce the law, you turn the
Environmental Protection Agency into the environmentally
pathetic agency, and that is not what Americans want. They want
something rather than dirty air, and this Dirty Air Act hurts
kids with asthma, it hurts seniors with respiratory problems
and it hurts our economy.
Now, I want to suggest to you there is a fundamental
problem here. That problem is that we are not listening to the
scientists, and I am going to ask you a question when I am done
here in a minute and I hope I give time you to answer. But the
scientists are telling us that we have got a real health
problems on our hands. We got a letter from 1,800
scientifically trained medical professionals yesterday. It says
communities across the nation will suffer, not maybe, will
suffer from poor--excuse me--still suffer from poor air
quality. Low-income families face the impacts of toxic air
pollution every day from smog causing asthma attacks to toxic
mercury harming children's neurological development. Far too
many people face a constant threat from the air they breathe
and the impacts of climate change. Now, that letter is signed
by, among others, doctors, Dr. Guillermo Arnaud of Tahlequah,
Oklahoma, Dr. Therese Kwan of Kingston, Oklahoma, Dr. Warren
Teal of Carney, Oklahoma. Doctors across this country and
scientists across this planet know that our health is adversely
affected by these chemicals, and by the way, carbon dioxide is
in the Clean Air Act. It is in section 103, if you folks want
to look at it. Carbon dioxide is in the Clean Air Act. And yet
you are trying to take away the ability of Uncle Sam to protect
our kids from asthma, and I have got a problem with that, and I
am going to ask you this question because I think it is
fundamental to this disagreement. I respect your opinion and
right to have an opinion. But the National Science Foundation,
these doctors, the IPCC, depending on science from the U.S.
Navy, from Nobel Prize winners, none of whom are going to be
called by this committee, by the way, and I think it is too bad
we don't have real scientists up here, all of these people say
that these things are bad for our kids' health, and yet this
committee, their first witness calls somebody, rather than
listening to Nobel Prize winners, thinks somehow that he is
smarter than the 2,500 scientists that are telling us this is a
problem.
Now, I want to ask you this question. You have got, I
think, grandkids, and I trust that if your grandkids were
having a health problem, if they couldn't breathe, if asthma is
affecting them, that you wouldn't take them to a lobbyist for
the fossil fuel industry, you would take them to a
pediatrician. You would take them to a scientist. So the
question I ask you is, shouldn't we listen to the scientists
here rather than the politicians and shouldn't we trust people
of science that have an overwhelming conclusion about this
issue? And I will yield to you for an answer.
Mr. Inhofe. Thank you very much. And that is essentially
the same question asked, so I will respond to it. Yes, in the
very beginning when people were listening just to the IPCC, as
I said in my opening statement, that has been pretty much
debunked now. I don't know how anyone with a straight face is
going to say that that should be the leading science. When you
mention scientists, yes, many of them are saying this. If you
go to my Web site , I have given five speeches on this science,
very long ones, I might add. We started out with some 50
scientists, went up to 100 and up to several hundred. And so
there are many scientists that have varying views. That is why
I say, the science on this issue is mixed. The economics are
not mixed.
The last thing I want to mention, because somehow it has
got to be in this record, and this is responding to Mr. Waxman,
the Court did not mandate that the EPA regulate CO2,
and this is words of the Court. The EPA can avoid promulgating
regulations if it determines that greenhouse gases do not
contribute to climate change or if it provides some reasonable
explanation as to why it cannot. Well, what they are saying is,
they have three choices: either regulate it, don't regulate it
or do nothing, and that was not a mandate from the Court, and I
believe that has to be in here at some point.
Mr. Whitfield. I might say that we did invite a scientist
to testify. Mr. Chu was invited, and he declined our offer.
Now, Senator Inhofe, do you have to go now or can you take
more questions?
Mr. Inhofe. I think I need to.
Mr. Whitfield. You need to go?
Mr. Inhofe. Yes.
Mr. Whitfield. All right. Well, we appreciate very much
your taking time to be with us, and we may very well have
another hearing----
Mr. Inhofe. Let me thank you, because this is only the
third since 1984 when I left this that I have been invited to
appear----
Mr. Rush. Point of order, Mr. Chairman.
Mr. Inhofe [continuing]. And I appreciate it.
Mr. Rush. Point of order, Mr. Chairman.
Mr. Whitfield. Yes, sir.
Mr. Rush. Mr. Chairman, I just want to make sure that the
record accurately reflects that Secretary Chu indicated that he
had a conflict in scheduling. He didn't decline. It was just a
conflict in his schedule.
Mr. Whitfield. Well, we advised Secretary Chu but he had a
conflict in his schedule. Thank you.
OK. We will now call our second witness. Thank you, Senator
Inhofe. And our second witness is the Honorable Lisa Jackson,
Administrator of the United States Environmental Protection
Agency, and we are looking forward to her testimony. Ms.
Jackson, thank you very much for taking the time to join us
today. We are looking forward to your testimony and the
opportunity to ask questions. With that, I am going to go on
and recognize you for an opening statement. I will say that
Senator Inhofe ended up taking almost 7 minutes in his opening
statement, so we would be happy to give you 7 minutes in your
opening statement, so you are recognized.
STATEMENT OF LISA JACKSON, ADMINISTRATOR, ENVIRONMENTAL
PROTECTION AGENCY
Ms. Jackson. Well, thank you, Mr. Chairman. I will try not
to take all seven.
To you, Mr. Chairman and members of the Committee, thank
you for inviting me to testify about Chairman Upton's draft
bill to eliminate portions of the Clean Air Act, the landmark
law that all American children and adults rely on to protect
them from harmful air pollution. The bill appears to be part of
a broader effort in this Congress to delay, weaken or eliminate
Clean Air Act protections of the American public. I
respectfully ask the members of this committee to keep in mind
that EPA's implementation of the Clean Air Act saves millions
of American children and adults from the debilitating and
expensive illnesses that occur when smokestacks and tailpipes
release unrestricted amounts of harmful pollution into the air
we breathe. Last year alone, EPA's implementation of the Clean
Air Act saved more than 160,000 American lives, avoided more
than 100,000 hospital visits, prevented millions of cases of
respiratory illness including bronchitis and asthma, enhanced
productivity by preventing millions of lost work days, and kept
American kids healthy and in school.
EPA's implementation of the Act also has contributed to
dynamic growth in the U.S. environmental technology industry
and its workforce. In 2008, that industry generated nearly $300
billion in revenues and $44 billion in exports. Yesterday the
University of Massachusetts and Ceres released an analysis
finding that two of the updated Clean Air Act standards EPA is
preparing to establish for mercury, soot, smog and other
harmful air pollutants from power plants will create nearly 1.5
million jobs over the next 5 years.
As you know, Mr. Chairman, the Supreme Court concluded in
2007 that the Clean Air Act definition of ``air pollutant''
includes greenhouse gas emissions. The Court rejected the EPA
Administrator's refusal to determine whether that pollution
endangers Americans' health and welfare. Based on the best
available peer-reviewed science, EPA found in 2009 that manmade
greenhouse gas emissions do threaten the health and welfare of
the American people. EPA is not alone in reaching that
conclusion. The National Academy of Sciences has stated that
there is a strong, credible body of evidence based on multiple
lines of research, documenting that the climate is changing and
that the changes are in large part caused by human activities.
Eighteen of America's leading scientific societies have written
that multiple lines of evidence show humans are changing the
climate, that contrary assertions are inconsistent with an
objective assessment of the vast body of peer-reviewed science
and that ongoing climate change will have broad impacts on
society, including the global economy and the environment.
Chairman Upton's bill would, in its own words, repeal that
scientific finding. Politicians overruling scientists on a
scientific question: that would become part of this committee's
legacy.
Last April, EPA and the Department of Transportation
completed harmonized standards under the Clean Air Act and the
Energy Independence and Security Act to decrease the oil
consumption and greenhouse gas emissions of model year 2012-
2016 cars and light trucks sold in the United States. Chairman
Upton's bill would block President Obama's plan to follow up
with Clean Air Act standards for cars and light trucks of model
years 2017 through 2025. Removing the Clean Air Act from the
equation would forfeit pollution reductions and oil savings on
a massive scale, increasing America's debilitating oil
dependence.
EPA and many of its State partners have now begun
implementing safeguards under the Clean Air Act to address
carbon pollution from the largest facilities when they are
built or expanded. A collection of 11 electric power companies
called EPA's action a reasonable approach focusing on improving
the energy efficiency of new power plants and large industrial
facilities. And EPA has announced a schedule to establish
uniform Clean Air Act performance standards for limiting carbon
pollution at America's power plants and oil refineries. Those
standards will be developed with extensive stakeholder input
including from industry. They will reflect careful
consideration of cost and will incorporate compliance
flexibility.
Chairman Upton's bill would block that reasonable approach.
The Small Business Majority and the Main Street Alliance have
pointed out that such blocking action would have negative
implications for many businesses, large and small, that have
enacted new practices to reduce their carbon footprint as part
of their business models. They also write that it would hamper
the growth of the clean energy sector of the U.S. economy, a
sector that a majority of small business owners view as
essential to their ability to compete.
Chairman Upton's bill would have additional negative
impacts that its drafters might not have intended. For example,
it would prohibit EPA from taking further actions to implement
the Renewable Fuels Program, which promotes the domestic
production of advanced biofuels.
I hope this information has been helpful to the committee,
and I look forward to your questions. Thank you.
[The prepared statement of Ms. Jackson follows:]
[GRAPHIC] [TIFF OMITTED] T5734.097
[GRAPHIC] [TIFF OMITTED] T5734.098
Mr. Whitfield. Ms. Jackson, thank you very much.
Before you came in, I had mentioned in my opening statement
that Congress had specifically looked at regulating greenhouse
gases on three different occasions: one in 1990 when the last
Clean Air Act Amendments were adopted. They rejected it then.
Number two, 1998, when the Senate voted 95 to 0 not to take up
the Kyoto Protocol, objecting to the greenhouse gas regulations
in the Kyoto Protocol, and then last when the U.S. Congress
refused to adopt the cap-and-trade bill. So Congress on three
separate occasions has spoken very clearly that in its opinion
we do not need to regulate greenhouse gases. So I would ask you
the question just your personal opinion, do you object to
Congress having an up or down vote approving or disallowing
EPA's greenhouse gas regulations?
Ms. Jackson. Sir, I am here to explain the impact of our
greenhouse gas regulations and then Congress is obviously going
to make a determination whether----
Mr. Whitfield. So you wouldn't object to Congress having an
up or down vote on your regulations then, correct?
Ms. Jackson. Sir, I would not presume to tell Congress its
business.
Mr. Whitfield. Thank you. Now, I want to ask you, did your
agency conduct an overall comprehensive assessment of the cost
of the greenhouse gas regulations?
Ms. Jackson. We conducted assessments of costs of
regulations. We did not conduct an assessment of the cost of
the endangerment finding because it is a scientific finding.
Mr. Whitfield. But do you have any idea what the costs of
the greenhouse gas regulations would be?
Ms. Jackson. As we propose regulations, for example, the
cars rule that I mentioned in my opening statement, we do a
regulatory impact analysis that is required----
Mr. Whitfield. And by the way, on the car thing, it is my
understanding that cost $52 billion. Is that correct?
Ms. Jackson. The cost of the cars and trucks rule, I don't
have the exact number in front of me, but----
Mr. Whitfield. Well, my understanding----
Ms. Jackson [continuing]. We also did----
Mr. Whitfield [continuing]. The light-duty vehicle rule,
according to the information I have, cost $52 billion and will
increase in 2016 the cost of one of those vehicles by $948.
Now, we recognize cost goes along with regulations but it is
also the information that we have that by the year 2100, the
greenhouse gas standards for the light-duty vehicle is expected
to reduce global temperatures by .006 degrees Centigrade, $52
billion, and that is about mobile sources, and I don't think
anyone has any idea what the regulation of stationary sources
will be. Would you give us a guess on what the cost would be on
that?
Ms. Jackson. Mr. Chairman, just two points. The auto rules
that you speak about were hailed by the industry, consumers,
and environmentalists because of cost savings. There are
efficiency rules for automobiles and trucks and so they pay for
themselves, and as the price of gas increases, they pay for
themselves in shorter and shorter periods. I believe at the
time the estimate was somewhere between 3 and 4 years. So the
money you save on gasoline----
Mr. Whitfield. You know, another understanding that I have
is that there really is no technology available to really
reduce greenhouse gases other than efficiencies. Would you
agree with that?
Ms. Jackson. There are emerging technologies for stationary
sources but energy efficiency is thought to be the low-hanging
fruit in terms of----
Mr. Whitfield. And that is my understanding, that we are
getting ready to implement this tremendous greenhouse gas
regulation. In fact, your air chief indicated that if your
tailoring rule is determined to be illegal, that EPA is going
to require 6 million sources to obtain Title V operating
permits and would have to have 82,000 permitting actions under
the PSD program resulting in an estimated $22.5 billion just
for the permitting authorities.
Ms. Jackson. It sounds like you agree with me, that the
tailoring rule is a good idea to protect small businesses
from----
Mr. Whitfield. But it----
Ms. Jackson [continuing]. Unneeded regulation.
Mr. Whitfield. Doesn't it explicitly violate the language
of the Clean Air Act which says specifically if it is 100 or
250 tons per year emitting, that it must be regulated?
Ms. Jackson. No, sir, I don't see it as a violation. I see
it as looking----
Mr. Whitfield. But that is what the language says, doesn't
it?
Ms. Jackson. The legal theory----
Mr. Whitfield. And your tailoring rule says what, 25,000
tons, or is it 75,000 tons?
Ms. Jackson. It is 100,000 tons, equivalent of a railroad
car----
Mr. Whitfield. Tell me about this--well, my time is
expired. Thank you, Ms. Jackson.
I recognize at this time Mr. Rush.
Mr. Rush. Well, Administrator Jackson, I am certainly glad
to see that you finally arrived. It wasn't easy getting you
here but you are here.
First of all, do you have a scientific or a technical
background?
Ms. Jackson. Yes, sir, I am a chemical engineer by
training. I have a master's degree in chemical engineering from
Princeton University and an undergraduate degree from Tulane
University.
Mr. Rush. Well, I am glad to know that. I am glad to know
that we do finally have someone with a scientific background
here on the panel.
Do you find it as amazing as I do that the subcommittee has
not called any scientists, medical professionals, biologists,
ecologists or any other scientists to consider this draft
legislation? What do you think about that?
Ms. Jackson. Sir, I think if this is going to be a
referendum on a scientific question, it would be important to
hear from the best scientists in our country.
Mr. Rush. Thank you very much. The legislation we are
considering today overturns your scientific determination that
carbon emissions are dangerous, and I am concerned about the
precedent that this would set. Whether carbon pollution is
dangerous or not is fundamentally, I agree with you, a
scientific question and not a political question. I believe
that we should leave these types of decisions to expert
scientists. Are you aware of any precedent for Congress to
overrule EPA or any other agency on a question of science like
this?
Ms. Jackson. I am not aware of it, sir.
Mr. Rush. Chairman Upton said yesterday that he does not
believe that climate change is caused by human pollution. That
certainly is an extreme view that has been rejected time and
time again by scientists, so now he is trying a different
approach. He is asking this committee to approve legislation
that says he is right and the scientific community has made a
glaring mistake. I don't believe that is the right way for us
to proceed. We should be telling you to listen to America's
best scientists and not ignore them because Chairman Inhofe or
Chairman Upton have decided that they don't like their
conclusions. Senator Inhofe testified earlier just a few
moments ago that the science on climate change is mixed but
that the economics are not. As I stated during my questioning
of the Senator, the Clean Air Act has been the catalyst for
creating close to 2 million jobs and creating an industry
generating $300 billion in revenues. Are the economics as mixed
as Senator Inhofe suggests, in your opinion?
Ms. Jackson. Sir, the history of the Clean Air Act's
implementation I think is consistent with what we would see for
its implementation with carbon dioxide and greenhouse gas
pollution, and that is that our economy can grow and thrive
because of innovation while we reduce pollution and increase
energy efficiency.
Mr. Rush. Thank you, Mr. Chairman. I yield back.
Mr. Whitfield. At this time I recognize the gentleman from
Michigan, Mr. Upton, for 5 minutes.
Mr. Upton. Thank you. Mr. Chairman, and welcome,
Administrator. You found a parking place okay?
Ms. Jackson. I didn't find a parking place but I am here.
Mr. Upton. We had one right out there in the horseshoe. I
checked with the police in advance.
Ms. Jackson. Thank you.
Mr. Upton. I want to ask one quick question on maybe an
unrelated topic first, and that is the boiler MACT rules. As
you know, you all asked for a 15-month extension back in
December, and the court said no, we want them done by, I want
to say the 21st of February. Would it be helpful, useful,
constructive if we gave you a little assistance legislatively
to extend that deadline? Yes or no.
Ms. Jackson. The EPA argued that we will need to make
administrative re-proposal of the rule in order to increase the
amount of transparency in the time that we have, and I am
disappointed that we have to get the rule out but we will use
the current administrative processes under the Clean Air Act to
ensure that the American public and industry gets a chance to
look at these new rules. They will be significantly different.
Mr. Upton. So would you like a little, sort of like----
Ms. Jackson. I believe the Clean Air Act is strong enough
to allow for that kind of transparency.
Mr. Upton. OMB is not here. You can say whatever you want.
You can give the truth. Never mind.
Let me go to this hearing. You have petitioned to set GHG
standards for agriculture emissions. We have the Farm Bureau
coming on a later panel this afternoon. Do you intend to act on
the agriculture emissions as part of GHG?
Ms. Jackson. The number of agricultural sources subjected
to EPA's reporting rule is zero. The number of agricultural
sources that would face any regulation for greenhouse gas
emissions under Clean Air Act permitting before July, 2013 is
zero, sir.
Mr. Upton. There are GHG emissions from non-road vehicles,
ships, boats, planes, railroads. Do you intend to set any
standards for those types of vehicles?
Ms. Jackson. We have certainly, sir, been petitioned to do
so. We have made no determination on a regulatory calendar that
I have been briefed on.
Mr. Upton. My State of Michigan, there have been some
reports that the implications of EPA GHG regs for the Michigan
economy would do a number of things: reduce Michigan GDP by $18
billion, destroy 96,000 jobs, reduce household incomes by
nearly $1,600 and reduce Michigan manufacturing output by $2.3
billion. Those are independent estimates. Has EPA done an
analysis of what the full costs of regulating GHGs under the
Clean Air Act would be by State or by the entire country?
Ms. Jackson. We have done impact analysis and economic
analysis as we propose and finalize regulations, sir, but the
analysis you are referring to is of regulations we have yet to
propose and implications that therefore would be unfair. We
would actually have to go to industry and ask them to tell us
what it is they are planning to do in order to tell them what
the impacts might be so that is a very difficult hurdle and
probably not one that industry would welcome.
Mr. Upton. A number of us have commented about the
regulations that could be imposed in this country versus on
employers overseas. Does EPA intend to look at the potential of
jobs leaving the United States and going someplace else? Is
that going to be a factor that is going to be considered as the
regulations are pursued?
Ms. Jackson. Certainly part of our economic analysis is an
impact on jobs, both jobs that could be lost but also jobs that
could be gained, and you heard in my opening statement that
there are potentials for our environmental and air pollution
control industry jobs to actually have increases.
Mr. Upton. And that figure, what was it? How many jobs? I
know you cited--did you say 96,000?
Ms. Jackson. I believe there was a study yesterday that
talked about nearly 1.5 million jobs over the next 5 years.
That was not an EPA study, that was University of Massachusetts
and CERES. That is an independent study.
Mr. Upton. So if the Continuing Resolution which might be a
funding freeze at 2008 levels is adopted, that would be--you
would have a pretty difficult reaching that number of
inspectors. Would these be EPA government jobs?
Ms. Jackson. Sir, this was an independent----
Mr. Upton. Would they be contracted out?
Ms. Jackson. No, no. These are not government jobs in any
way, and with respect to your question on budget, the EPA's
regulatory authority incentivizes and promotes innovation in
the private sector. It promotes investments here. There are
estimates that there is almost $2 trillion waiting to be
invested in this country, and that is what that study is----
Mr. Upton. I mean, what I am interested in is the net
increase or decrease in jobs, and you may have more inspectors
that are out there but at the same time you might not have
nearly as many companies still producing goods here because
they might go someplace else. I am more concerned about a
dramatic net loss of jobs rather than an increase based on the
proposal.
So I see my time is expired. Thank you, Mr. Chairman.
Ms. Jackson. I just want to clear up for the record, I
don't know what net increase in inspectors you are speaking of.
I do believe that we remain committed to enforcing the Clean
Air Act but none of the jobs numbers that I speak about are
public sector employment, they are private sector employment.
Thank you.
Mr. Whitfield. The gentleman from California is recognized
for 5 minutes.
Mr. Waxman. Thank you, Mr. Chairman.
Administrator Jackson, the Republicans have made the
argument that you don't have the authority under the Clean Air
Act to do this regulation of greenhouse gases. Are they right?
Ms. Jackson. No, sir, they are not.
Mr. Waxman. The Clean Air Act requires you to regulate
carbon emissions?
Ms. Jackson. Yes. As the Supreme Court said, greenhouse gas
emissions fit within the definition of pollution under the
Clean Air Act.
Mr. Waxman. Republicans further have made the argument that
public health is not at risk from these greenhouse gases. Could
that be true?
Ms. Jackson. No, sir, I don't believe that to be the case.
The endangerment finding is about that very issue, and in that
finding, we determined that unchecked greenhouse gas emissions
increase the intensity and duration of heat waves. That
increases heat-related mortality and morbidity, especially
among children, among the elderly, among the sick, people who
work outdoors, people who can't afford air conditioning or have
never needed it because their climate was temperate enough. By
raising temperatures, you also exacerbate the impact of smog,
and we know the life-threatening impacts of smog on people who
have compromised lung function, especially people with asthma
and other lung diseases. Unchecked emissions are said by our
best scientists to increase the severity of flooding, and
having grown up in New Orleans and seeing the impacts of
flooding on just one small part of the town, the part I know, I
know that that also means more contamination, more pollution,
more disease as we deal with the impacts of our changing
climate.
Mr. Waxman. So this is really a threat to the public
health, and if we don't regulate we are allowing that threat to
become greater?
Ms. Jackson. That is the nexus of the endangerment finding.
It is a threat to our public health as Americans and our
welfare, sir.
Mr. Waxman. You have been criticized for this finding that
greenhouse gases endanger the public. Mr. Abbott, the Texas
Attorney General, claims that the finding is arbitrary and
legally flawed. We learned yesterday, however, that your
predecessor in the Bush Administration looked at the science
and apparently reached the same conclusion you did. In a
private letter to President Bush, Administrator Johnson stated,
and I quote, ``The latest science on climate change requires
the Agency to propose a positive endangerment finding as was
agreed to at the Cabinet-level meeting in November.'' According
to Mr. Johnson, ``The latest climate change science does not
permit a negative finding nor does it permit a credible finding
that we need to wait for more research.'' And I gather Mr.
Johnson didn't like to have to say that because he is not happy
about the proposals that you have made, but as a matter of
fact, what you have proposed is very similar to what he would
have had to propose as well. Are you surprised that the
predecessor in the Bush Administration privately reached the
same conclusion that you have?
Ms. Jackson. I think that the letter which I saw yesterday
when it was released is proof that it is not me sitting in the
administrator's chair who looks at the science and makes a
finding of endangerment but clearly past administrators have
felt and have believed the same based on their----
Mr. Waxman. Well, once you have reached those findings,
once you have reached the conclusion that this is not a hoax
but that public health and welfare are endangered, then the
question is, what do we do about it? And the Republican
approach is not to let anything be done, not to pass
legislation--they didn't offer an alternative to our bill last
year--not let EPA act. In fact, they would go so far as to say
that you can't even allow some of the voluntary efforts to
report and try to reduce carbon emissions. You are being
vilified for proposing the same measure that your Republican
predecessor called ``prudent, responsible, cost-effective, and
practical.'' Both Republican and Democratic Administrators saw
the same science and reached the same conclusion.
Unfortunately, President Bush and his people told Administrator
Johnson don't move forward on it. You represent a President
that wants to protect the public health, safety, and well-being
and he has allowed you to do your job. I think that Congress
ought to allow you to do your job as well. And if we have an
alternative, let us hear what it is, but saying there is no
problem, it is all a hoax, is not a responsible answer.
Thank you, Mr. Chairman.
Mr. Whitfield. I recognize the gentleman from Texas for 5
minutes.
Mr. Barton. Thank you. Thank you, Mr. Chairman.
The Minority seems to be of the impression that we didn't
want you to attend, Madam Administrator. We are delighted you
are here. If I knew you better, I would come down and hug you.
I can assure you that Chairman Upton and Chairman Whitfield and
Chairman Stearns are going to invite you numerous times, you
and your deputies, to come before this committee and its
various subcommittees for the next 2 years. So welcome, and we
do appreciate your attendance.
I need to educate the subcommittee briefly before I start
asking my questions because there is an attempt by Chairman
Waxman and perhaps by yourself to rewrite history. The Clean
Air Act does not specifically mention CO2 as a
criteria pollutant. The reference that Mr. Inslee made talks
about ozone, not carbon dioxide. The court case in
Massachusetts v. EPA was a 5-4 decision in which the majority
of the Supreme Court said that since it did not explicitly
prohibit CO2 being regulated under the Clean Air
Act, it might could be, and the EPA needed to--I don't think
the EPA needed to but it said the EPA could make a decision.
As you well know, when your Administration, Mr. Obama,
President Obama, came into office very quickly issued an
endangerment finding, saying that CO2 should be
regulated. Mr. Waxman alluded to a private letter that has
miraculously come forward in the last day or so for this
hearing, and I would emphasize the term ``private.'' I would
hope that maybe we could get Carol Brown's private
correspondence and some of the other Obama officials' private
correspondence. We do have some e-mails from the direct
supervisor of Mr. Carlin back and forth to people in the White
House in which Mr. Carlin is explicitly told stop investigating
whether CO2 is a danger, the decision has been made,
the White House has decided that they are going to issue a
endangerment working, stop working on this report. I don't have
those e-mails with me but they are available.
So I am going to ask you the same question that I asked
Senator Inhofe. Under the Clean Air Act, which is the law of
the land, as amended, does anything in Mr. Whitfield's and Mr.
Upton's pending legislation change the standard on ozone?
Ms. Jackson. The----
Mr. Barton. The answer is no.
Ms. Jackson. Would you like me to answer, sir?
Mr. Barton. Well, I am willing if you will go through it
quickly. I have got a minute and 50 seconds here.
Ms. Jackson. I see. Well, what I would say is that I am
concerned that there needs to be an analysis to ensure that
there aren't unintended consequences. My belief is that there
is no intention in the legislation----
Mr. Barton. But the legislation does not change the
standard on ozone, it does not change the standard on
particulate matter, it does not change the standard on carbon
monoxide, it does not change the standard on NOx, it
does not change the standard on sulfur dioxide and it does not
change the standard on lead, does not change the enforcement
criteria, does not change the quantities, does not change any
of the Clean Air Act on the criteria pollutants that this
committee amended and passed back in 1990. Is that not correct?
Ms. Jackson. I believe the intent is only to gut portions
of the Clean Air Act, sir, not----
Mr. Barton. That is the Clean Air Act.
Ms. Jackson. But it is changing, gutting portions of the
Clean Air Act----
Mr. Barton. How?
Ms. Jackson [continuing]. For certain pollution, some of
which is pollution----
Mr. Barton. CO2----
Ms. Jackson [continuing]. Not only because it is a
greenhouse gas.
Mr. Barton. Madam Administrator, CO2 is not
mentioned in the Clean Air Act. It is a 5-4 decision that it
might be. It is your Administration's position that it should
be. I respect that. I respect that. But that doesn't mean that
it has to be, and unless you can refute all these cost-benefit
analyses that have been done independently about the millions
of jobs and hundreds of billions of dollars per year, I would
say that the Congress as an independent arm of the Federal
Government has an obligation to clarify what the Clean Air Act
really does regulate. That is our obligation. Do you have an
objection to that?
Ms. Jackson. Again, sir, I would not presume to tell the
Congress its business in any way.
Mr. Barton. Well, my time is expired. I am going to yield
back. I am going to ask you some specific questions in writing
about what you are doing in Texas. You have denied every
existing air permit issued since 1992, and we are going to ask
some specific questions about that. Thank you.
Mr. Whitfield. I recognize the gentleman from Michigan for
5 minutes of questions.
Mr. Dingell. Mr. Chairman, I thank you.
Madam Administrator, welcome to the committee. I have a
number of questions on which I would like, if possible, to get
yes or no answers, and I say that with respect.
EPA has already issued regulations under Title II of the
Clean Air Act. It has issued its determinations for regulations
under the Title V permit program and it is also for under
sections 111 for the prevention of significant deterioration,
and in addition to that, it would appear that EPA can issue
regulations under the National Ambient Air Quality Program. Is
that correct?
Ms. Jackson. Yes, sir.
Mr. Dingell. So we have a potential here then for at least
four different sets of regulations plus State implementation
plans which could also cover these questions?
Ms. Jackson. Yes, sir.
Mr. Dingell. So you have an unholy complicated mess here if
you are going to regulate greenhouse gases. Is that right?
Ms. Jackson. Pursuant to the Clean Air Act, those are all
requirements, sir.
Mr. Dingell. Now, Madam Administrator, what other
provisions of the Clean Air Act can EPA use to issue
regulations in the next 5 years in terms of greenhouse gas
emissions?
Ms. Jackson. Sir, did you mention the new source
performance standard provisions of the Clean Air Act? EPA has
already announced the schedule to put forth new source
performance standards for utility sector and for the refinery
sector. I know you said 5 years, but those are in the next 2
years.
Mr. Dingell. This gives you an unbelievably complicated
process, especially if you are going to bring the States into
the matter as required under the state implementation plans.
Now, Madam Administrator, how many different regulations to
introduce greenhouse gas emissions could this add up to? I
don't think you can tell us here this morning, and I am not
sure anybody including the prophet Esau can give us that
number. But would you please submit for the record the number
of potential regulations and the number of potential regulatory
sources under the statute that are going to be used here.
Now, Madam Administrator, so it is clear that these
regulations could add up to a great multiplicity of stationary
and mobile source controls. Isn't that right?
Ms. Jackson. Yes, sir, but I do want to point out that the
purpose of tailoring rule was to manage that workload in a way
that ensures that the vast majority of sources would not be
caught----
Mr. Dingell. Madam Administrator----
Ms. Jackson [continuing]. Under the Clean Air Act.
Mr. Dingell [continuing]. This is not to criticize you, it
is to try and dig you out of an intolerable hole in which I
find you, and I am looking forward to your help in achieving
that very important purpose.
Now, under the provisions of the bill before us, should
this legislation become law, it would repeal the endangerment
finding. Does that put the national standards at risk? Yes or
no.
Ms. Jackson. Yes, sir, I would think it would invite
litigation on past standards, and future standards are
explicitly prohibited under the draft.
Mr. Dingell. Now, Madam Administrator, do you and the
Administration firmly support a national standard for auto fuel
economy and greenhouse gas emissions, and are you committed to
a single national standard for the model years 2017 to 2025?
Ms. Jackson. Yes, sir, we are very much committed to
working collaboratively with the industry and the States and
staying at the table as we did for the standards that we put
out in May of 2010.
Mr. Dingell. Now, does the draft legislation prevent EPA
from enforcing greenhouse gas reporting rule which contains
information that could inform the Congress relative to the
Congress's future action? Yes or no.
Ms. Jackson. Yes, sir.
Mr. Dingell. Now, Madam Administrator, EPA's endangerment
finding, let us refer to that, was that or is that a scientific
finding or a political finding?
Ms. Jackson. It is a scientific finding, sir.
Mr. Dingell. Now, Madam Administrator, could EPA have found
otherwise than it did?
Ms. Jackson. No, I do not believe so, sir.
Mr. Dingell. Madam Administrator, did your predecessors in
the previous Administration, that of Mr. Bush, find or propose
otherwise than you have done?
Ms. Jackson. An endangerment finding was prepared and sent
to the White House but the White House did not open the e-
mails.
Mr. Dingell. OK. We have done it with 7 seconds overrun.
Thank you.
Ms. Jackson. Sir, may I correct one inaccuracy in my
answer? National ambient air quality standards and State
implementation plans are not required for greenhouse gases at
this time. We have been petitioned with respect to that matter.
Thank you.
Mr. Dingell. But I should be somewhat concerned that a
court which would make a finding that the Clean Air Act
affected greenhouse gases, that they might insist that that
also be used on the State implementation plans. Isn't that so?
Ms. Jackson. Yes, sir. I just wanted to be clear on the
current state of----
Mr. Whitfield. I recognize the gentleman from Illinois, Mr.
Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman.
Welcome, Administrator Jackson. Just so we don't get into a
debate next week when we have our hearing on the environment
and job creation, I am formally asking you if you would like to
return to talk, to address my subcommittee that deals with a
huge portion of the portfolio and also jobs. This hearing is
about jobs, and that is why we are focused on it. So I will
give you time to think about it, but I am formally asking you
if you would like to join us next week at our hearing.
This hearing is about jobs, and there is a chart on the
screen, and I don't know if you have ever seen it, the National
Environmental Policy Act and Environmental Protection Agency
were both first authorized in 1970. Have you ever seen this
char? Has it ever occurred to you that there appears to be a
cause and effect between U.S. oil imports and these policies?
If you look, what it is up there is production and imports, and
as we have been involved with, and a lot of us would agree,
important Clean Air Act amendments, it has affected jobs and
our reliance on imported crude oil. Have you ever seen that,
and do you think there's a relation?
Ms. Jackson. Sir, it is the first time I am seeing this
particular chart, and what I do know is that the energy
efficiency and ability----
Mr. Shimkus. But you wouldn't dispute that our importation
and our ability to produce has declined? I mean, those are just
Energy Information Agency. Timeliness with the Clean Air Act
and Clean Air Act Amendments, it has had an effect on our
energy production. Well, let me move on. I will give you a
chance to look at that, and maybe next week----
Ms. Jackson. I don't see anything on that chart that talks
about the Clean Air Act, sir, but I would be happy to----
Mr. Shimkus. Well, it is related to the time frame on the
bottom with 1970, so this is a timeline from 1920 to 2000, so--
--
Ms. Jackson. I am sure there are a lot of things that
happened in 1970 that can't be attributed----
Mr. Shimkus. Let me just go back now to other issues. This
is about job creation and the effect that the Environmental
Protection Agency has, and we are going to hear the testimonies
when we have the next panel. Let me--you recognize these folks,
right? And my friends on the other side. These are the folks
that were affected by the 1992 Clean Air Act Amendments. This
is from Kincaid Mine in my district. One thousand miners' jobs
were closed because of the Clean Air Act. The reason why we
could not pass into law through the Senate Waxman-Markey is
because we successfully made the argument that this would
create higher cost energy and jobs would be destroyed, and
these folks should be awarded a medal for stopping the job-
destroying aspects of the Waxman-Markey bill. Illinois lost
14,000 jobs during the last round, and Ohio lost 35,000 jobs
during the Clean Air Act Amendments.
And so this hearing is about jobs and the effects of jobs,
and I think we can make an argument on carbon dioxide not being
a criteria pollutant under the Clean Air Act and that we have
gone around the legislative ability by using the courts and
using regulatory authority to regulate something that should
not be regulated but let us assume you all are successful. I
have in front of me a power plant that is being built, 1,600
megawatts. If we mandate them to reduce carbon dioxide
emittance by 60 percent, what amount of the energy that they
produce will have to be used to capture that carbon? Do you
know what that is?
Ms. Jackson. Sir, I am sure you are going to give me the
number.
Mr. Shimkus. It is 22 percent. The energy that they are
going to put on the grid will now have to capture. If they go
to 85 percent, do you know how much energy that would require?
Thirty percent of what they were going to put on the grid to
sell. Do you believe in the law of supply and demand?
Ms. Jackson. Do I believe in the law of----
Mr. Shimkus. Supply and demand, economics 101.
Ms. Jackson. The economic principle of supply and demand?
It is not a tenet of faith, sir. It is a----
Mr. Shimkus. No. Do you believe it?
Ms. Jackson [continuing]. An economic model, and I was
trained in it.
Mr. Shimkus. Do you believe it?
Ms. Jackson. Yes, I believe that it is generally----
Mr. Shimkus. That if you constrain a product and there is a
high demand, that costs go up?
Ms. Jackson. It depends on the elasticity of the cost
curves.
Mr. Shimkus. And I would say that here is an example of us
having power on the grid that this regulation is now going to
constrain because we are going to have to use energy to capture
carbon which is not energy we can put on the grid so the people
who are going to buy this have to buy, what, higher power. You
know what the capital expense for this power plant is if they
are going to build new facilities to capture carbon, what is
the new capital expense at 60 percent? It is $1.8 billion. If
it is 85 percent, their capital expense, this is new spending,
$2.3 billion.
Ms. Jackson. Sir, under the----
Mr. Shimkus. Do you know where they have to go to pipe the
carbon capture and sequestration, how far? We think the closest
might be 70 miles. Who is going to pay for the pipeline? And
then how big a sequestering facility has to be there? The point
is, this regulation is going to skyrocket electricity costs,
which will destroy jobs.
I yield back my time, Mr. Chairman. Thank you.
Mr. Whitfield. Thank you.
Ms. Jackson. Sir, may I respond to just a few things for
the record?
Mr. Whitfield. Sure.
Ms. Jackson. The first is, under the Clean Air Act, which
is a public health----
Mr. Shimkus. Mr. Chairman, I would like to, if she would
yield, I would address this the same way that Chairman Waxman
addressed Senator Inhofe and not allowing him, so if my
colleagues on the other side want to give her time, they should
do it on their time.
Mr. Whitfield. Very good point.
Mr. Inslee, you are recognized for 5 minutes.
Mr. Inslee. Thank you. I think this is interesting, a 5-4
Supreme Court decision was good enough in Bush v. Gore to be
settled law. A 5-4 decision in United Citizens was good enough
to allow corporations to run America. But all of a sudden a 5-4
decision of the Supreme Court that you expect the EPA and us to
just ignore.
Now, I want to make sure that we are clear about this. The
Supreme Court, which binds all of us who have taken an oath to
the Constitution at the moment, says, ``Carbon dioxide,
methane, nitric oxide and hydrofluorocarbons are without a
doubt physical and chemical substances which are emitted into
the ambient air. The statute is unambiguous.'' The statute is
unambiguous. Madam Administrator, is it clear that you are
bound by this decision and that we have got to regulate
CO2?
Ms. Jackson. Absolutely, sir.
Mr. Inslee. And I want to tell you the last witness,
Senator Inhofe, we appreciate him coming here. We know he is a
person of strong beliefs. He tells us he is writing a box
called The Hoax. Now, I haven't seen it but I think it is about
the alleged Apollo moon landing on the lunar surface because we
know there are people that are still out there doubting that.
They are doubting that the National Academy of Science has
confirmed we landed on the moon. They are doubting the IPCC
that confirmed we have landed on the moon, but there are still
those who doubt.
And I want to ask you about the status of science on this.
Could I have the picture of the Arctic put up, please? This is
a picture, I am afraid it is not as visible as I would have
liked. This is a picture of the current status of the Arctic
ice cap in September. It is difficult to view, but there is a
red line showing what the Arctic ice cap used to look like
before we started dumping millions of tons of carbon dioxide
into the atmosphere, and what it shows, that the Arctic ice cap
has now shrunk about 40 percent by mass. Now, several years ago
thought it was going to disappear in its entirety, and this is
the air conditioner for the world. This is what controls the
ambient air, bounces light back, and it is going to disappear.
Now, scientists thought it was by 2040. Now we think it might
be within this decade actually being gone.
Now, my understanding of the status of the science,
National Science Foundation, National Academy of Science,
International Panel on Climate Change, 2,500 sciences who sent
this committee a letter dated a couple days ago saying that
this science is clear by compelling, cogent and consistent
evidence in the peer-reviewed literature that we are having an
impact on climate, visibly in many, many manifestations, this
being just one of them.
I have not been able to find--and I understand for
political purposes people are trying to drum up questions about
this. I understand politics. But I have not been able to find a
peer-reviewed scientific study that challenges this finding of
the consensus of scientists in America, including those who
work for the United States Navy, and they do a pretty good job
on our submarines. Is it a fair statement that there is wide,
wide consensus about the science upon which you have made this
finding?
Ms. Jackson. Yes, sir, it is very broad and based on
multiple lines of research.
Mr. Inslee. And are you aware of any single peer-reviewed
scientific journal which has questioned the foundations of the
relationship between our actions on earth and the increase in
CO2 in the atmosphere? Because I am not.
Ms. Jackson. I am not, sir.
Mr. Inslee. Now, I tell you what, I hear a lot of political
flacks, I hear a lot of people on television saying the science
is questionable, but we can't find one single peer-reviewed
research study that has questioned this science, and I hope the
people who are distributing information at this hearing will
point out that the Republican Party that wants to pass this
Dirty Air Act will not produce one single peer-reviewed
scientific piece of literature which questions the finding of
the Environmental Protection Agency. I think that is pretty
stunning that they want to put our kids' health at risk and
won't produce one peer-reviewed piece of research to support
their conclusion.
One last question on the economy. In fact, the research has
shown that we increase our economy by a factor of three or four
every time we make an investment under the Clean Air Act, and I
want to put in the record, and you made reference to this. It
is a study by industry and institutional investors. It is
called New Jobs, Cleaner Air, and it finds as a result of your
proposal, there will be an estimated job gain in Illinois of
122,695 jobs associated with the new construction jobs, the new
scientific jobs, the new jobs in utilities associated with
making the air cleaner. Is it a fair thing to believe that as
we make our air cleaner, we can grow our economy?
Ms. Jackson. Yes, sir.
Mr. Inslee. Thank you.
Mr. Whitfield. I recognize the gentleman from Oklahoma, Mr.
Sullivan.
Mr. Sullivan. Thank you, Mr. Chairman, for holding this
hearing. I would like to state that this hearing is not about
science, it is about the destructive economic impacts of the
EPA trying to use the Clean Air Act for what it was never
designed to do: regulate greenhouse gases.
Administrator Jackson, thank you for being here today. I
have several companies my district ranging from chemical
companies, manufacturing, energy companies, and they are scared
to death of the EPA's pending rules on greenhouse gas. The
energy industry in my State employs over 320,000 workers, and I
intend to see that number grow by vigorously supporting this
legislation. The Oklahoma Farm Bureau is also concerned with
the GHG rule as they are the second largest industry in my
State. Heck, Administrator Jackson, I even have churches that
are concerned about this.
You have been petitioned to set GHG standards for
agriculture emissions. Do you intend to act on this?
Ms. Jackson. Sir, as I stated earlier, there are no
agricultural sources subject to EPA's mandatory reporting rule
and no agricultural sources that need to address greenhouse gas
emissions in Clean Air Act permits before July of 2013.
Mr. Sullivan. So that would be no, just no?
Ms. Jackson. Yes.
Mr. Sullivan. Has EPA done an analysis on how much
greenhouse gas regulations will impact the cost of producing
food on farms and the price that American families will have to
pay at the grocery store? We have a lot of people concerned
that spend a lot of their money on groceries, you are taxing
the food they eat that keeps them alive.
Ms. Jackson. Sir, I just mentioned that we are not going to
be regulating agricultural sources. They are not even subject
to our mandatory reporting rule for greenhouse gases.
Mr. Sullivan. But did you do any analysis on how it would
affect the price of food at all? You don't do any of that, huh?
Ms. Jackson. No, sir. When we analyze our regulations or,
for example, as we analyzed legislation pending before this
committee last year, we analyzed changes in potential energy
costs, and of course its impact on the economy.
Mr. Sullivan. Do you think it would be a good idea to
require an economic analysis on how these rules impact family
farms and the price of groceries? Is it that you don't know
what the total economic impacts will be on the agricultural
sector? All tolled, 17,000 farms nationwide are impacted by the
EPA's greenhouse gas regulations.
Ms. Jackson. Sir, we will do economic analysis of
regulations as they are proposed and finalized. That is a
process required under the Clean Air Act already.
Mr. Sullivan. I am concerned that we have no idea what the
avalanche of greenhouse gas rules will cost, costs that could
shift and shatter the economy. The Obama Administration has
come out recently with an initiative for regulatory reform
seeking to be more business-friendly, stating that our
regulatory system must take into account benefits and costs. On
paper, we agree. Has the EPA done an analysis of what the full
costs of regulating greenhouse gas under the Clean Air Act will
be?
Ms. Jackson. We do regular analyses, and of course, we will
be complying with the Executive Order to do a cumulative review
of all of our regulations. Under the Clean Air Act, we know
that the benefits to costs of the Clean Air Act are 30 to 40 to
one cumulatively, and in the regulations recently proposed are
oftentimes at least double if not an order or two of magnitude
higher. The benefits are higher than the cost.
Mr. Sullivan. So you will be doing analysis. When will you
be doing it? Do you know?
Ms. Jackson. We will do economic analysis as part of the
rulemaking process, sir.
Mr. Sullivan. Has the EPA looked at the impact on jobs?
Ms. Jackson. Yes. Just yesterday EPA put out a White Paper
in response to a question from a member of this committee on
jobs and the Clean Air Act, and it confirms that which we heard
earlier today which is that having regulatory certainty allows
businesses to innovate and give us clean air and grow our
economy at the same time. That is the history and legacy of the
Clean Air Act, sir. It is a very powerful piece of legislation.
Mr. Sullivan. Have you looked at the risk of manufacturing
jobs overseas? I hear that all the time, that people are going
to do it if this happens. Do you look at that?
Ms. Jackson. We do do an economic and jobs impacts analysis
on regulations as part of the regulatory process, sir.
Mr. Sullivan. But you haven't done that yet?
Ms. Jackson. We do them for the regulations as they come
out so----
Mr. Sullivan. When will you be doing it?
Ms. Jackson. The regulations are proposed for, for example,
new source performance standards, we will do analysis as part
of the regulatory process.
Mr. Sullivan. Thank you. I yield back.
Mr. Rush. Mr. Chairman?
Mr. Whitfield. Yes?
Mr. Rush. I respectfully request that the White Paper that
the Secretary mentioned be entered into the record.
Mr. Whitfield. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. Whitfield. I recognize at this time Mr. Markey of
Massachusetts.
Mr. Markey. I thank the gentleman.
This bill that we are considering, the Polluters Protection
Act of 2011, repeals the scientific finding that global warming
pollution is dangerous. It ties EPA's hands and prevents it
from moving forward with any regulations to reduce global
warming pollution. It even prevents EPA from thinking about
global warming pollution as part of its other duties under the
Clean Air Act. In George Orwell's 1984, Big Brother's faceless
minions at the Ministry of Truth dispose of politically
inconvenient facts by pitching them down a memory hole. Today,
Big Oil and Big Coal have been working with the Republican
thought police to comb through each and every reference to
global warming pollution in the Clean Air Act and then
disappear them, sending scientific consensus down the memory
hole at the expense of public health and welfare. But their
bill will create new jobs. The oil and the goal and the utility
lobbyists who are here today and watching on the Web all across
America, there are new people being hired in those industries
to make sure that the EPA cannot do its job, and we
congratulate you for that purpose.
But what this bill also does is to bar EPA from doing
anything further to reduce oil from cars, trucks, planes, boats
or other sources. The legislation might even nullify the
progress we have already made over at EPA in reducing demand
for oil. The Republican bill could result in an increase in our
dependence of more than 5 million barrels of oil per day by the
year 2030, more than we currently import from OPEC. So that is
what we are doing today. Tomorrow, in this very same
subcommittee, we are holding a hearing on the impact of Middle
East unrest and its impact on U.S. energy prices for consumers.
That is like holding a hearing on repealing FDA's authority to
regulate tobacco and then holding a hearing the very next day
on the dangers of tobacco in creating lung cancer. Five million
barrels of oil per day. At $90 per barrel, that is $164 billion
a year we would send to OPEC if the Republicans are accurate.
That would fund al-Qaeda. That would fund Hamas. That would
fund Hezbollah. That would fund the Muslim Brotherhood. That is
what this money would be used to accomplish. That is what their
bill makes possible.
Now, I understand why Arab oil sheiks and Oklahoma oilmen
want the price of a barrel to continue to rise and to rise and
to rise, but the consequences for American young men and women
that we would have to send over there, the impact on our
geopolitical status around the world would be devastating.
Instead of holding the line so that we continue to back out
that imported oil, the Republicans have offered us a unilateral
disarmament policy that al-Qaeda and other groups around the
world will be able to exploit as we send more money over there
to import oil into our country.
By repealing the endangerment finding, Republicans are
endangering the current standards by opening up a litigation
loophole in the current standards to reduce oil use in cars and
light trucks, and Republicans are barring EPA from moving
forward with any new standards at all. Do you agree, Madam
Administrator, that this legislation would increase our
dependence on foreign oil if you are prohibited from
promulgating additional regulations to reduce our dependence
upon that imported oil?
Ms. Jackson. Yes, sir.
Mr. Markey. Doesn't this bill also undermine the renewable
fuel standards, which is driving the production of homegrown
biofuels that will further our imports of oil from OPEC by 1.6
million barrels of oil per day?
Ms. Jackson. Yes, sir, I believe it does.
Mr. Markey. Doesn't this bill also prevent EPA from setting
standards to reduce oil use in trains, boats, planes, large
trucks and other industrial sources, sources that account for
almost 40 percent of all oil that we use each day?
Ms. Jackson. Yes, sir, I believe it would.
Mr. Markey. So basically what we have here then is
legislation that is a regulatory relief bill for oilmen in
Oklahoma and at OPEC that would allow for a tightening of the
noose around the neck of American foreign policy and consumers
that will come back to haunt us in years ahead because we did
not use America's greatest strength, our technological genius,
to improve the vehicles that we drive, improve the appliances
which we use, improve the efficiency of the buildings within
which we live so that we reduce dramatically the amount of
energy that we have to consume and tell OPEC we don't need
their oil anymore than we need their sand. That is what this
hearing is all about and that is why this bill has an historic
place in terms of its undermining of our national security.
Mr. Whitfield. The gentleman from Oregon is recognized for
5 minutes.
Mr. Walden. Thank you, Mr. Chairman.
Woody is back in town. I want to talk to you about biomass
first off. You testified, and the Administration testified in
support of the Waxman-Markey bill, and I would just like to
know your scientific underpinning for supporting the provision
that treated biogenic carbon emissions as if they were oil or
gas when used in the production of renewable energy.
Ms. Jackson. Sir, I recently wrote a letter saying that we
believe that there is only limited climate impact through the
combustion of certain biomass.
Mr. Walden. Now, that is interesting because the scientists
at the State University of New York, College of Environmental
Science and Forestry contend that woody biomass is a
substantial CO2-neutral renewable resource that can
be used as a fuel for a variety of sustainable, environmentally
sound energy applications. Do you disagree with that finding?
Ms. Jackson. No, Mr. Walden. What I said is that I
substantially agree that we need additional science because it
may well be that many sources of biomass are neutral when it
comes to greenhouse gas emissions.
Mr. Walden. Do you think that there is a difference between
woody biomass that is used for renewable energy that is
produced on private, State or county land versus that comes off
federal land?
Ms. Jackson. Sir, I don't know what the difference would be
except its source, and it would depend on the type of biomass.
Mr. Walden. But if it were the same tree source, right? If
you have a fir tree on one side of the line----
Ms. Jackson. Scientifically, there is no difference on
whose land the trees are.
Mr. Walden. Right. So that is what perplexed me about your
support for the Waxman-Markey bill that said woody biomass off
federal land was different than the woody biomass off other
lands when treated--when used to create renewable energy. It is
a flaw.
Now, in your tailoring rule--people in my district are real
upset because there are a lot of rules, not just this one but
others coming out that do affect the price of oil. I understand
your agency just pulled the air permit on a Shell drilling
operating Alaska that would have potentially reached into 35
billion barrels of oil. They have gone through 35 other
permits. That one has been pulled. If you want to talk about
accessing America's great energy reserves, didn't you pull that
air permit?
Ms. Jackson. No, sir, actually we issued the permit. The
courts--the Environmental Appeals Board ruled against the EPA-
issued permit, sir.
Mr. Walden. So what is your plan going forward there?
Ms. Jackson. We have a motion to the Environmental Appeals
Board for reconsideration, and we are working with the permit
applicant to perfect the application and move forward as
quickly as we can in response to the application.
Mr. Waxman. Will the gentleman yield?
Mr. Walden. No, I won't. I only have a minute ten, Mr.
Chairman. Otherwise I would.
Let us go back to the biomass issue because in the--a lot
of us wrote you in a bipartisan way asking you to not move
forward with the rule on biomass in the tailoring rules
affecting biomass. You responded and said you are going to
delay this for a couple of years. Now, the practical impact in
a district like mine is, we have got a lot of people that want
to invest in new high-tech biomass facilities, to turn woody
biomass into renewable energy. They are concerned that you are
going to come back in 2013 or later on with a rule that treats
biomass as if it were coal or oil. Can you give us any
indication that you won't do that?
Ms. Jackson. I do know, sir, that the American Forest
Products Association hailed the decision to defer for 3 years--
--
Mr. Walden. I am aware----
Ms. Jackson [continuing]. To get the science, like the
science you mentioned, to show the carbon neutrality of biomass
fuel.
Mr. Walden. But I want to get to my question. I know what
they said. I know what I said. I was glad except I think we
create this delay process where you are stifling investment.
The President wants to see $2 trillion in private sector
investment come off the shelves and get invested. It is rules
like this that are causing the people trying to make those
decisions to wait because they don't know what your agency is
going to do in a couple of years that might affect them if they
make that investment today. Because you could go back under the
new source performance standards, could you not, and say no,
actually we are going to regulate the burning of woody biomass
as if it were----
Ms. Jackson. I support the delay to get the best science,
sir, to give scientists a chance to do the studies to determine
how best to deal with biomass and to determine whether all
biomass is created the same. It was a delay to review
scientific----
Mr. Walden. So you can't give us any certainty. So we are
on delay for a couple years?
Mr. Waxman. Mr. Chairman, I would ask unanimous consent
that I be given 30 seconds to make a statement for the record.
Mr. Whitfield. Does anybody object?
Mr. Waxman. I just wanted to point out to the gentleman
from Oregon that his criticism of our bill would have applied
to its initial formulation, but by the time we passed the House
floor, the biomass provisions were changed, and I think even in
Oregon the industry was for it. But your criticism was of the
draft bill that was in the committee, not the bill that passed.
Mr. Walden. Well, Mr. Chairman, if I might respond to that?
Mr. Waxman. I would be happy to yield.
Mr. Walden. Indeed, there was criticism of the original
language. However, the language that was adopted by this
committee still left a real problem when you accept--if you go
to section 15, I believe it is, and the new language still
precludes material that would come off all kinds of federal
lands--roadless areas, old growth, late successional stands--
except for dead, severely damaged or badly infested trees.
Those definitions, those were never defined. I had Forest
Service employees ask me what is a severely damaged tree, what
is a badly infested tree, because they said we are the ones who
are going to get sued because--and so it still is not workable
language in the real forest.
Mr. Waxman. We thought we had corrected the problem. I just
wanted to make that point.
Mr. Whitfield. Ms. Jackson, maybe we will have you back and
we will talk about woody biomass in detail, at length.
This time I will recognize Ms. Capps of California.
Ms. Capps. Thank you. Before I get to my questions, I ask
unanimous consent to place into the record a letter, and it is
signed by more than 1,800 physicians, nurses and other health
professionals from all 50 States calling upon Congress to, and
I quote, ``resist any efforts to weaken, delay or block
progress toward a healthier future for all Americans.''
Mr. Whitfield. Without objection.
[The information appears at the conclusion of the hearing.]
Ms. Capps. Thank you. I also ask unanimous consent to place
into the record statements from a number of public health
organizations including the American Lung Association and the
Trust for Americans' Health rejecting the draft bill under
consideration today.
Mr. Whitfield. Without objection.
[The information appears at the conclusion of the hearing.]
Ms. Capps. Thank you, Mr. Chairman.
Administrator Jackson, thank you for your testimony and for
your patience this morning. I want to talk about the very real
consequences for our public health, and you know my background
as a public health nurse, if we do not act to control
greenhouse gas emissions. One of the best documented impacts of
climate change is the in ground-level ozone smog
concentrations. This is a big problem for many of our
metropolitan and suburban areas. Now, I know you were asked
about and already talked about some of the harmful effects of
this carbon pollution on people but can you be more specific or
give some examples, if you will, from your data collection on
kids' respiratory health being impacted, the cases of asthma or
heart problems or cancers?
Ms. Jackson. EPA's work under the Clean Air Act to address
smog is directed primarily at reducing ground-level ozone,
which we know, which science does not dispute, increases the
risk of asthma attack and premature death for people who have
lung disease.
Ms. Capps. Thank you. I know in my years of being a school
nurse, we saw a dramatic increase in the number of children
with asthma, which is the case today as well.
Two years ago when you issued the endangerment finding, you
considered these effects on human health. They were a part of
your decision-making process, right?
Ms. Jackson. Absolutely. The unchecked emissions of
greenhouse gas emissions would change the climate, thus
exacerbating the effects of smog on asthmatic children and
people with lung disease.
Ms. Capps. Can you please also share with this subcommittee
some of the other public health research and science that you
reviewed in making this decision? I know that it was an
extensive and thorough decision-making process in which you
didn't ask a few selectively chosen groups, that you went
broad-based. Maybe we need to know how broad-based your
research was.
Ms. Jackson. Yes, it was based on the peer-reviewed work of
multiple research programs, both public research as well as
private and academic research. The U.S. Global Change Research
Program, for example, projects that the impacts we would see in
America from unchecked carbon dioxide and global warming
pollution would be tremendous. They would not be limited to
urban areas. They would not be limited to arid areas. The Great
Plains would experience more drought and increased infestation
of pests. That means more disease. The Southeast would
experience declines in livestock production. The Great Lakes
would have more frequent spring flooding and more frequent
drought. That's in addition to the more traditional public
health impacts to people who oftentimes are least able to
defend themselves: our children.
Ms. Capps. Exactly. And, you know, we have heard today
about the costs of implementation of the EPA and your
endangerment findings and all the rest, but I have been able to
make the case, and I wonder if you wouldn't agree, that the
benefits of the programs that you have implemented really do
exceed and add greatly to balance over the costs of
implementation, far and away.
Ms. Jackson. That is right. We are talking about the Clean
Air Act today and history. Facts show numerous studies, 30 to
one, 40 to one, the health benefits for every dollar invested
in this country in clean air technology.
Ms. Capps. And finally, as your agency continues to do the
work that you are doing, you are going to be making decisions
based on the best public health research and science, I am
sure, and I just want to make sure that we have, because it is
in the record now as I have introduced, one quote from the
letter that these 1,800 health professionals submitted, and
they say, ``As health and medical professionals, we are keenly
aware of the health impacts of air pollution.'' Air pollution
is linked to a wide range of health consequences including
cancer, asthma attacks, heart attacks and strokes. The Clean
Air Act guarantees all Americans, especially those most
vulnerable, that the air be safe and healthy to breathe.
Despite air pollution reductions, more progress is needed to
fulfill this promise, and maybe you will close it out with 3
seconds illustrating that.
Ms. Jackson. I don't know what better way to say it or from
a more credible source. I like a recent quote I saw from a
physician in the Missouri area who said it is just not
conceivable that we wouldn't our require not to pollute our
air, not to make our air dirtier and our families less healthy
in order to increase their profit margins.
Ms. Capps. Thank you. Thank you, Mr. Chairman. I yield
back.
Mr. Whitfield. Thank you. At this time I recognize the
gentleman, Mr. Terry, 5 minutes.
Mr. Terry. Thank you, Madam Administrator. Do you like
puppies?
Ms. Jackson. Do I like puppies?
Mr. Terry. Yes.
Ms. Jackson. Yes, as long as somebody trains them for me,
but I have a dog.
Mr. Terry. I just wanted to ask you because I felt like
joining Mr. Waxman and Mr. Markey in asking you questions.
Now, could you point to the area where in the Clean Air Act
it lists--because I have looked at the Clean Air Act and it
sets out rather lengthy lists of what is covered. So within the
Clean Air Act, could you point to which section CO2
is listed?
Ms. Jackson. That determination was made by the Supreme
Court, sir.
Mr. Terry. OK. Let us go to Massachusetts v. EPA. And by
the way, I want to refute, not refute, but Mr. Inslee read a
portion of or a paragraph of the Court's decision,
Massachusetts v. EPA, that recognizes the fact that--I just put
CO2 into the air and I appreciate that the Supreme
Court recognized that when I exhale or there is CO2
emissions. I am not going to comment on any contribution by me
of methane. That is humor, by the way, Ms. Jackson. Larry the
Cable Guy is from Nebraska so we have a certain level of humor.
But here is a compelling part or part of the Massachusetts
v. EPA that is really the subject of the debate over this issue
of whether or not the EPA has the power to do this, and I am
going to read the full paragraph like Mr. Inslee did. It is in
the order part, and it just says, ``In short, EPA has offered
no reasoned explanation in its refusal to decide whether
greenhouse gases cause or contribute to climate change. Its
action was therefore arbitrary, capricious or otherwise not in
accordance with law. We need not and do not reach the question
whether on remand EPA must make an endangerment finding or
whether the policy concerns can inform EPA's actions in the
event that it makes such a finding. We only hold that EPA must
ground its reasons for actions or inaction in the statute.''
The issue here is whether or not this Administration is
grabbing power without congressional approval, and I would
submit to you that the language in Massachusetts v. EPA does
not say that the EPA has the power to start regulating
CO2. Science and issues, as Mr. Sullivan from
Oklahoma, where all evil oil men evidently reside, made the
point, this isn't a debate about science, this is a debate
about whether the EPA has authority. Next week we are going to
do the same thing with the FCC on whether they have
unilaterally sua sponte performed a power grab without
congressional authority. So that is what we are here to do
today. And then I want to get to the Clean Air Act. If the
Clean Air Act was amended and just added carbon dioxide to the
section that lists all the pollutants specifically, isn't it--
well, then would you be able to say well, we are only going to
apply CO2 if there is more than 100,000 tons emitted
within a calendar year? Would you be able to do that?
Ms. Jackson. Sir, are you asking about a potential change
to section 111 of the Clean Air Act?
Mr. Terry. Well, I will have to look at 111, but the issue
is that you said earlier in your testimony that the emissions
that you would regulate would be for CO2 would be
over 100,000. You said that in answering Mr. Whitfield's
question.
Ms. Jackson. Pursuant to the standards under the tailoring
rule that we----
Mr. Terry. Under the tailoring rule, but when reading the
Clean Air Act under what triggers it, it is either 100 or 250
tons per year, 250 being cited exemptions of which
CO2 is not or its type of industry, so let us say
coal industry.
Ms. Jackson. Right. So the United States Supreme Court,
whose job it is under the Constitution to interpret our laws,
ruled on whether or not EPA could ignore its need to make a
finding----
Mr. Terry. OK. So since you are saying that the EPA has
already ignored that Congress didn't give you the authority and
now you are interpreting they did, that you can just continue
to interpret----
Ms. Jackson. I am not interpreting. The United States
Supreme Court----
Mr. Terry [continuing]. Different sections saying that
you----
Ms. Jackson [continuing]. Ruled that----
Mr. Terry [continuing]. Are going to redo the standards
where you are able to regulate, i.e., 100 or 250, and you can
arbitrarily set it at 100,000 for a coal-fired plant, correct?
Ms. Jackson. Sir, in an attempt to ensure that we----
Mr. Terry. OK. You are not going to answer the question.
Ms. Jackson [continuing]. Minimize the number of----
Mr. Terry. Thank you for your testimony.
Ms. Jackson [continuing]. Sources that were regulated, we
have proposed and summarily adopted after public comment a rule
that is intended to ensure that only the very largest sources--
--
Mr. Terry. Madam Administrator, the Clean Air Act does not
give you that authority.
Ms. Jackson. The United States Supreme Court says it does.
Mr. Whitfield. I recognize the gentleman from Texas, Mr.
Green, 5 minutes.
Mr. Green. Thank you, Mr. Chairman.
Welcome, Madam Administrator. I know there is an image here
that there are only oilmen in Oklahoma. We have a couple in
Texas and Louisiana and Alabama and Alaska and other places in
our country.
My first question was talking about new source performance
standards, and you have answered that. I guess my concern is
that there was a consent decree signed but there was no
economic analysis except during the rulemaking process. It
seems like we ought to look at that ahead of the rulemaking,
but I know you have already answered that question.
My question, though, concerns what happens if only the
United States acts to reduce these emissions while major
emitters like China or India, and China may overtake us if they
haven't already, do not follow suit? Can we really address
climate change without strong mandatory reductions by other
major emitters in other countries?
Ms. Jackson. We will not ultimately be able to change the
amount of CO2 that is accumulating in the atmosphere
alone, but that does not mean we should all start at the exact
same time.
Mr. Green. I am concerned that the regulations put our
smaller manufacturers' plants and refineries at an economic
disadvantage compared to similar industries overseas, a
disadvantage that several of our witnesses later on will
outline, and what specifically can your agency do to address
the concerns of these smaller facilities?
Ms. Jackson. Well, the tailoring rule which I just
mentioned was intended to give certainty that those facilities
would not be subject to regulation. We are talking about
facilities that emit more than 100,000 tons of CO2
or its equivalent per year. You get that by burning over a
railroad car of coal every single day. That is how large these
facilities are. It was intended to be a reasonable first step,
to start with the large sources, not with the small ones, and
to rely heavily on energy efficiency because the belief was
that if we are going to invest and make ourselves more
competitive, making ourselves more energy efficient will help
our bottom line and put more money in the economy for us to
spend on something besides oil, especially foreign oil, of
course.
Mr. Green. Well, I have to admit the hearing today is on
potential legislation that would actually remove the EPA's
authority. I think we have to address carbon in our country. I
just prefer it to be on the legislative level. And we made an
effort last Congress. We know cap and trade didn't pass during
a Democrat Congress so it is not going to pass during a
Republican Congress. But I would like to see Congress take that
effort and maybe EPA doing it will push us.
Would you agree that with the measures your agency is
undertaking in an attempt to curb greenhouse gases, it will
still be necessary to increase environmentally responsible
production of domestic natural gas supplies to meet the short-
term carbon reduction goals and keep these manufacturing jobs
in the United States? Is natural gas part of the solution to
carbon?
Ms. Jackson. Natural gas is much less carbon-intense than
some other forms of fossil fuels, particularly coal, which is
used for baseload electricity generation in this country. So it
can certainly be a help, a very useful step in the right
direction.
Mr. Green. Well, and I have said it before and I think this
is something we can agree on across party lines, is that the
other side is nuclear power. Our country compared to both
France and Japan is so far behind in utilizing nuclear power,
but as we know, nuclear power has no carbon emissions except
for the construction. But natural gas emits 30 percent less
carbon dioxide than oil does. For our New Englanders who still
use fuel oil to heat their homes, maybe they need to put a
pipeline there for the natural gas. But it is 50 percent less
than coal. So I would hope this Congress would look at
empowering cleaner burning fuels including the substantial
expansion of nuclear. We are struggling, as you know, to get
loan guarantees that were passed in the 2005 energy bill for
the expansion of nuclear power in our country, yet here we are
in 2011 and we still don't have it.
So I share your concern about carbon. I just am concerned
that we need to do it in a legislative effort so we can do that
economic analysis from the members, elected members instead of
the agency.
With that, Mr. Chairman, I yield back my time.
Mr. Whitfield. I recognize the gentleman from Texas, Mr.
Burgess, 5 minutes.
Dr. Burgess. Thank you, Mr. Chairman.
Thank you, Administrator Jackson, for being here. I am
going to ask you a series of, I think, six questions. They are
detailed and complicated and I know they are going to require
answers in writing. Some of these I submitted to you before. We
are still awaiting answers. So what I am interested in this
morning is getting affirmation that some type of response will
be coming from your office on these issues.
Now, north Texas, where I live, last week, a week ago
today, we were subject to rolling blackouts of electrical
power. Businesses, schools, hospitals were all affected. This
was not because of tree branches weighted down by the ice and
cutting power lines. This was simply an effect of the very cold
temperatures that were in place in Texas last week. We do all
recognize there are new regulations coming down the pike, and
can you assure us here at the subcommittee that these rules
will not make instances of rolling blackouts more common? We
would also be interested in the studies that are underway to
look at the cumulative effect of all of the EPA regulations on
electrical reliability, not just in Texas where we have our own
reliability council, but across the country.
A second area. Did the EPA consult with anyone at Office of
Management and Budget or the White House before moving forward
in taking over the Texas flexible permitting program under the
Clean Air Act? The EPA is now issuing its own permits to
utilities in Texas, displacing the State agencies that have
been responsible for that historically, the first time to my
knowledge that the EPA has taken over a State system. And did
the EPA consult with Office of Management and Budget on
regulations for the permits it is issuing in lieu of the State-
based permits? And I would be interested in your development of
that answer in light of President Obama's recent Executive
Order calling for greater scrutiny of regulations and
streamlining of problems encountered with bureaucracy so areas
where you and the EPA have identified regulations for
streamlining. I would like to have your thoughts on that.
Gene Green mentioned natural gas. It is a big industry. In
my part of Texas, there is of course some controversy over the
production of natural gas and there are issues that are being
worked out at the federal, State and local level. Still your
administrator in region 6 has made public statements that he is
going to be much more actively involved in the regulation of
this industry. It employs 100,000 in my area of north Texas. So
my question that I would like for you to provide some insight
is, are there active discussions within the EPA to take over--
we are talking about the Clean Air Act today but this could
also involve the Clean Water Act. Is there going to be greater
involvement at the federal level in these activities and how
are you going to justify that with the President's call for
greater streamlining of burdensome regulations?
The ethanol mandate that was accelerated in December of
2007--E15 is now, we are told, going to be mandated by the EPA,
15 percent ethanol. Can you provide us with the testing that
has been done in both vehicles and small engines utilizing 15
percent ethanol? Can you provide us with information on the
testing done to date and the testing methodology that was
employed? And again, I am particularly interested in older
engines, cars produced between 2001 and 2007, and the small
engine--the snow blower, the weed eater and that type of
activity.
Under Title 42 of the United States Code, the section for
the Department of Health and Human Services, it does allow for
increased salaries for limited positions requiring specialized
expertise, and I get that and that is not necessarily a bad
thing, but it appears that EPA is also utilizing some of those
42 exemptions. Can you provide for the committee how many EPA
employees are receiving pay under Title 42 exceptions? Have you
placed a limit of pay under Title 42 and what is the total
amount of the Title 42 program costing the federal taxpayer
within the Environmental Protection Agency's budget?
Now, this last question, perhaps you can address this while
we are here today. The Business Roundtable in June of this year
under the President's request submitted to the President some
issues that they thought might help in job creation because
this was an issue last June that the President was concerned
about, and the Roundtable specifically mentioned the
Environmental Protection Agency's moves against Texas flexible
permitting program as one of the major examples of the
Administration's hostility--their words--towards growth. So 6
months, what has your office, Office of Management and Budget,
the White House done in response to the Business Roundtable's
suggestion to remove the EPA's restrictions on the Texas
flexible permitting program?
Ms. Jackson. Sir, I will answer all the other questions in
writing for the record, and I am happy to do that. I just want
to point out one important fact. It was the Bush EPA, the Bush
Administration that found out that under the Clean Air Act the
Texas flexible permitting program was not legal. So when I
became Administrator, I found a situation where businesses in
Texas have no certainty that the permits they have protect them
from lawsuits for emitting excessive pollution. We have worked
individually with businesses in Texas to bring their permits
into compliance with the law and that process will take some
amount of time. But the answer certainly could not have been to
look the other way as these businesses got permits that weren't
worth the paper they were printed on.
Dr. Burgess. If I may point out in the Business Roundtable
report prepared for the President, similar rules exist in other
States which have not been challenged by the EPA. This appears
to be Texas specific, and if it is, that is wrong and I would
like you to look into it, and I will await your answers. Thank
you.
Mr. Whitfield. At this time I recognize Mr. Engel from New
York for 5 minutes.
Mr. Engel. Thank you very much, Mr. Chairman.
As my colleagues have discussed, this legislation would
repeal EPA's scientific determination that greenhouse gases
threaten public health and welfare, known as the endangerment
finding. I happen to believe that carbon emissions are a
serious threat to our Nation's welfare. I mean, I know that
some of us might wish that the earth is flat, and I understand
that different districts have different needs, I understand my
colleagues trying to protect industry in their districts, but
the bottom line is, this is scientific research. This is
proven, and we have decisions and we are supposed to abide by
them.
Ms. Jackson, let me first of all thank you for the
excellent job that you are doing, and your testimony here this
morning has just affirmed in my mind what a grasp you have of
the issues, how determined you are to be on the right track,
and I just want to thank you for your good work.
Legislatively repealing that scientific determination
directly conflicts with the consensus of climate scientists,
including President Bush's EPA Administrator, Stephen Johnson,
and the world's most authoritative scientific organizations
which use words like ``indisputable'' and ``unequivocal.'' We
talk about it killing jobs. Well, this is an interesting
statistic. Since its adoption, the Clean Air Act has reduced
key air pollutants by 60 percent while at the same time the
economy grew by over 200 percent. So I don't think that that
shows that jobs are being killed. From 1990 to 2008 alone, the
Clean Air Act reduced key air pollutants by over 400 percent,
and the economy grew by almost 65 percent. These pollution
reductions save lives, improve health, particularly among
children and seniors, and in 2010 alone, last year, according
to a peer-reviewed EPA analysis, the Clean Air Act prevented
over 160,000 premature deaths, 130,000 cases of heart disease,
1.7 million asthma attacks, 86,000 hospital admissions and
millions of respiratory illnesses. So I wanted just to state
that for the record.
I would like to explore with you, Madam Administrator, one
question on the impacts of this legislation on the renewable
fuel standard. As you know, in order to promote renewable fuels
and reduce greenhouse gas pollution, Congress has required EPA
to issue regulations to ensure that transportation fuels sold
in the United States contain certain volumes of renewable fuel:
advanced biofuel, cellulosic biofuel and biomass-based diesel.
The volume of each type of fuel is established annually by the
EPA and based in part of the availability of the fuel. Now, it
appears to me that the new section 330(b)(1)(A) would prevent
the EPA from establishing these required annual volumes in
subsequent years because it prohibits EPA from taking actions
related to greenhouse gases. Do you have the same
interpretation that I do of section 330(b)1)(A), and if so,
what do you think that means for the renewable fuel standards
specifically and the future of biofuels generally in the United
States?
Ms. Jackson. Sir, as I said in my opening statement, I
believe the draft bill would likely prohibit EPA from taking
further actions to implement the renewable fuels program in the
United States.
Mr. Engel. Well, I think that that is something that is
really, really important and we really need to think twice
before we want to do such a thing. I mean, I think that nobody
at this point should conclude that carbon emissions are not a
serious threat to our Nation. I mean, they are, and we ought to
not put our heads in the sand. We ought to figure out a way
where we can have cleaner air and at the same time have the
least impact on business and creation of jobs but we shouldn't
eliminate all these restrictions just because we are concerned
about these things with jobs. We don't want our children to
breathe filthy air. We don't want it to go back to the bad old
days. There are countries all around the world where literally
people, the cancer rates are up because they don't have the
rules that we have adopted to prevent these things, and I don't
think we want to go back to the Stone Age.
So I thank you for your testimony, and I look forward
continuing to work with you, and I yield back, Mr. Chairman.
Thank you, Mr. Chairman.
Mr. Whitfield. A number of people have mentioned this
renewable fuels issue, and as we move forward with this
legislation, we are certainly going to try to address some of
the concerns that you all have brought about it.
At this time I recognize the gentleman from Louisiana, Mr.
Scalise, for 5 minutes.
Mr. Scalise. Thank you, Mr. Chairman, and welcome back, Ms.
Jackson.
Ms. Jackson. Thank you.
Mr. Scalise. I appreciate you coming to testify. And of
course, today's hearing is specifically focused on the Energy
Tax Prevention Act and especially its impact on jobs and how if
we are able to prevent, truly prevent your agency from going
into an area where it hadn't been before, we would also be able
to save thousands of American jobs, potentially millions of
American jobs along with billions of investment.
First I want to go back to some comments and statements
that the President made when he was a candidate. President
Obama on multiple occasions has talked about cap and trade and
this kind of regulatory scheme increasing the cost of
electricity, and I will read one of his quotes. ``Under my plan
of a cap-and-trade system, electricity rates would necessarily
skyrocket.'' That was then-Senator Obama as a candidate for
president. Do you agree with that statement?
Ms. Jackson. No, sir. I think that statement is----
Mr. Scalise. You disagree with the President's statement
that a cap-and-trade scheme would necessarily----
Ms. Jackson. I believe his larger point was that a market-
based program could ensure that energy rates while producers
had the certainty they needed to move forward, the market
through innovation would allow it to happen in a gradual
fashion.
Mr. Scalise. A gradual fashion where electricity rates
skyrocketed, though. That is the key point. The President said
this. I am not saying this. I will give you Tim Geithner's
statement. Tim Geithner said cap and trade would increase the
cost of energy. Do you agree with that statement? Yes or no.
Ms. Jackson. Controlling pollution is not free.
Mr. Scalise. It is a yes or no question. Tim Geithner made
the statement, President Obama made the statement.
Ms. Jackson. Sir, I don't know what cap and trade you are
asking me to speculate about. We are here to talk about the
Clean Air Act and----
Mr. Scalise. We are talking about the regulatory scheme
that your agency is currently undergoing that is costing jobs--
--
Ms. Jackson. No, that is not true. There is no cap-and-
trade scheme----
Mr. Scalise [continuing]. And the effects it would have on
electricity rates.
Ms. Jackson [continuing]. Planned or provided----
Mr. Scalise. Do you think that this wouldn't have----
Ms. Jackson [continuing]. For in the Clean Air Act.
Mr. Scalise [continuing]. Any impact on electricity rates?
Ms. Jackson. There is no cap-and-trade scheme provided for
under the Clean Air Act----
Mr. Scalise. Your regulatory scheme for greenhouse gases--
--
Ms. Jackson [continuing]. For greenhouse gases, I should
say.
Mr. Scalise [continuing]. Which your agency is currently
doing. Are you currently doing this?
Ms. Jackson. What we are doing is----
Mr. Scalise. Yes or no.
Ms. Jackson [continuing]. Enforcing the Clean Air Act----
Mr. Scalise. I hate to put you on the spot. I know Mr.
Dingell----
Ms. Jackson [continuing]. To reduce the emissions----
Mr. Scalise [continuing]. Got a lot of good yes or no
answers.
Ms. Jackson [continuing]. Of greenhouse gases.
Mr. Scalise. I would appreciate the same courtesy to a yes
or no question.
Ms. Jackson. Well, no, if you are asking me about cap and
trade for greenhouse gases because there are no plans for cap
and trade at EPA, and there are no plans----
Mr. Scalise. So is it safe to say you disagree with the
President when the President said when cap and trade would
increase, skyrocket the cost of electricity?
Ms. Jackson. Sir, what I do know is that we are not
planning any cap-and-trade regulations or standards. That is
not----
Mr. Scalise. We both have limited time, and I appreciate
that maybe you want to evade the question. It is a direct
question. It is a pretty simple question that many in this
Administration have been comfortable acknowledging. Many in
business have acknowledged that this would increase the cost on
families. It seems like for whatever reason you don't want to
acknowledge it, but if you then go to the next step of
regulating greenhouse gases, do you think that if you regulate
greenhouse gases in your agency that it would cost jobs?
Ms. Jackson. I agree with the President that investing in
clean energy will make our economy stronger, will help our
economy----
Mr. Scalise. And I see you have made statements these
standards will help American companies and create good jobs.
The problem is, that flies in the face of what the Nation's
employers in America are saying about what you are doing, and I
don't know if there is a parallel universe going on but I will
point to you a number of companies, and I have conversations as
I am sure most of my colleagues do. The biggest impediment our
job creators in this country tell us about is the threat of
regulations coming from your agency and a few other agencies in
this Administration as the impediments to creating jobs. So
maybe you think that these policies will help create jobs.
I will just read what one of our later panelists is talking
about in terms of how it is costing American jobs. Nucor, which
is a plant, a company based in America that is preparing to
build a major steel plant in Louisiana, in our State, the CEO
of that company--that is a $2 billion investment that right now
is going to America hopefully. It was on hold during the whole
debate on cap and trade. They said, and this is a comment from
the CEO, ``We are waiting to see what Congress does with global
warming legislation.'' They were holding back on a $2 billion
investment. And then I will go on to say what the testimony
that the environmental manager of the company who is here today
is talking about. He said, ``But this project is not as large
as the $2 billion investment we initially intended due to the
uncertainty created by these regulations.'' He is talking about
your department, the uncertainty created by these regulations.
``We made the difficult decision to delay the $2 billion
investment also delaying the creation of 2,000 construction
jobs and 500 permanent jobs that average $75,000 a year. Now,
this is a company.
Ms. Jackson. Sir, respectfully----
Mr. Scalise. This isn't theory.
Ms. Jackson [continuing]. Based on EPA----
Mr. Scalise. Do you recognize that----
Ms. Jackson [continuing]. The proposed Nucor iron and steel
facility in Louisiana has actually received the first-ever
State-issued Clean Air Act construction permits----
Mr. Scalise. Do you recognize that that costs jobs?
Ms. Jackson [continuing]. That will require control for
greenhouse gases. They are a permitted facility----
Mr. Scalise. And they said they haven't created as many
jobs----
Ms. Jackson [continuing]. For greenhouse gases, so that
would seem to be----
Mr. Scalise [continuing]. Because of your agency, and I
just want to talk about that.
Ms. Jackson [continuing]. Exactly the opposite of them
being held up. They have----
Mr. Scalise. But finally, you made a statement about
Katrina and flooding. You tried, to I guess, infer that
flooding----
Mr. Waxman. Point of order, Mr. Chairman.
Mr. Scalise [continuing]. Was related to----
Mr. Waxman. Point of order, Mr. Chairman.
Mr. Scalise [continuing]. Greenhouse gases.
Mr. Waxman. Point of order.
Mr. Scalise. I just want to point out the failure of the--
--
Mr. Waxman. Point of order, Mr. Chairman.
Mr. Whitfield. Hold on just one minute. OK, Mr. Waxman, you
had a point of order.
Mr. Waxman. Look, she was asked a question. The gentleman's
time has expired. She ought to be able to answer it.
Mr. Scalise. I asked her to answer yes or no, and she
refused to answer a yes or no question multiple times.
Mr. Whitfield. I think that----
Mr. Scalise. She did it for Mr. Dingell. I appreciate that.
I just would like the same courtesy.
Mr. Whitfield. Are you going to have any questions that you
are going to submit to her in writing?
Mr. Scalise. I will be happy to submit in writing the
remaining questions, especially as it relates to the comment
you made about flooding having an attribution to greenhouse
gases as opposed to the federal levies in New Orleans, which I
know you are aware was the real cause of flooding.
Ms. Jackson. Let me be clear because this is my hometown. I
did not say that Katrina was due to greenhouse gas emissions.
Mr. Whitfield. OK. At this time I recognize----
Mr. Scalise. Thank you.
Ms. Jackson. I said it was horrible flooding----
Mr. Whitfield [continuing]. Mr. Doyle for 5 minutes.
Ms. Jackson [continuing]. Impacted that area in a way that
is tragic.
Mr. Whitfield. Mr. Doyle, 5 minutes.
Mr. Doyle. Thank you, Mr. Chairman.
Administrator Jackson, welcome, and thank you for your
patience today. As most members of this committee know, I have
long been concerned about manmade climate change and how it
affects our climate, but this committee also knows how
concerned I am that as we make efforts to address this serious
problem that we don't harm the competitiveness of American
industry. During the comprehensive energy legislation that the
House considered and passed last year, I introduced amendments
to safeguard many of our industries from some of the effects of
the bill because we are concerned that this not result in jobs
being shipped overseas, and if I thought that was what was
going to happen, I would be very concerned too.
You know, initially many of us were concerned because the
Clean Air Act had the potential to require numerous sources to
obtain permits for greenhouse gas emissions, but EPA acted
promptly and effectively to issue a tailoring rule and limit
these requirements only to the largest sources. Administrator
Jackson, could you just briefly explain what that tailoring
rule did?
Ms. Jackson. The potential universe of sources could have
been 6 million. The tailoring rule took it down to a universe
no larger than about 15,000 potential, but since you are only
regulated if you are building a new facility or substantially
increasing your emissions, we expect that there are a couple
hundred additional permits that would be required a year, but
that was intended to be a deregulatory action.
Mr. Doyle. So does this rule affect every large facility?
Ms. Jackson. It will only affect very, very large
facilities, those that emit more than 100,000 tons a year and
only if they are new, or 75,000 tons a year if they are going
to have a significant increase in their greenhouse gas
emissions.
Mr. Doyle. So right now if you are an existing factory or
steel mill and you don't expand or increase your greenhouse gas
emissions by a significant amount, you don't need to spend any
capital or labor on controlling your greenhouse gas emissions.
Is that correct?
Ms. Jackson. That is right, sir.
Mr. Doyle. So let us say a steel company or other
manufacturer does want to build out on an existing facility or
bring an entirely new one online. What do they actually have to
do? Have you issued guidance on this to let sources know the
rules of the road?
Ms. Jackson. Yes, we have issued that guidance, primarily
for States, who are the permitting authorities, and they are
implementing it. As you heard, Louisiana just recently
implemented it to issue a permit there.
Mr. Doyle. So the permitting authority then basically
selects the best available control technology through whatever
options there are. Is it your statement that I heard earlier
that in most cases the best available technology for reducing
greenhouse gas emissions is likely to be efficiency?
Ms. Jackson. That is right.
Mr. Doyle. So to be clear, you expect that almost all new
sources, the main thing they are going to have to do is just
become more energy efficient?
Ms. Jackson. That is right.
Mr. Doyle. So couldn't that actually save money over time
as sources have fewer inputs and reduce their energy use?
Ms. Jackson. Absolutely. It could increase the profits
because you costs are lower going forward.
Mr. Doyle. Yes, I mean, it just seems to make sense to me
that when we build new facilities, they should be efficient,
and I think that is something that industry is striving for
because they realize it is good for their bottom line, and it
certainly doesn't appear that it would be too costly or drive
new facilities overseas.
But the other concern we have is, what if it takes too long
for new facilities to get permits? Now, that could have cost
implications even if the requirements are reasonable. So
Administrator Jackson, what is the EPA doing to help ensure
that these requirements don't lead to permitting delays?
Ms. Jackson. The reason we got the guidance out to the
State permitting authorities earlier is so that there would be
no time lapse between when these requirements took effect on
January 2nd and when people would be applying for and need
these permits, and so EPA is offering technical assistance and
guidance to step in for those States, and there are several who
for whatever set of rules or legal obligations back home are
not yet ready to implement the permitting requirements for
greenhouse gases. But almost all States are moving in that
direction. Many have already gotten to that point.
Mr. Doyle. Now, the Upton bill here aims to stop you from
issuing minimum standards for the two largest sources of
greenhouse gas emissions, fossil fuel-powered plants and oil
refineries. Is EPA currently developing minimum standards for
any other sectors of the economy such as manufacturers?
Ms. Jackson. No, sir.
Mr. Doyle. OK. Thank you, Administrator Jackson. I am
acutely aware of the challenges that our manufacturers are
facing today, and I have to tell you that I was skeptical at
first when investigating how this Clean Air Act would be used
to regulate greenhouse gases, but it seems to me that when you
strip away the rhetoric and the scare attacks that the approach
and the scare tactics that the approach that you are taking to
date seems extremely reasonable. We know our manufacturers are
facing tough challenges but I really don't see how repealing
the Clean Air Act authority for greenhouse gases would help
them in any way. In fact, the legal uncertainties actually make
things a little bit worse.
Mr. Chairman----
Mr. Markey. Would the gentleman yield briefly?
Mr. Doyle. Well, if I can, I will.
Mr. Whitfield. His time is expired and we have a lot of
witnesses, so Mr. Olson from Texas, you are recognized for 5
minutes.
Mr. Olson. Thank you, Mr. Chairman, and thank you,
Administrator Jackson, for coming here today. I am going to
follow up on some questions from my colleague, Mr. Burgess from
Texas, about EPA's taking control of the permitting process for
refineries and power sources in my home State of Texas. This is
a fundamental change. The feds under the Clean Air Act, the
feds set the standards and the States and local governments are
the ones who implement them through the SIPs, and to justify
this change, EPA says it erred in the original approval of the
SIP back in 1992, nearly 2 decades ago, three Presidential
Administrations because the SIP didn't contain the authority to
regulate greenhouse gases, and that must be corrected. The
mechanism to establish this correction was unilateral EPA
authority to correct ``minor technical errors.'' The feds'
takeover of States' authority to issue permits under the Clean
Air Act is not a minor error. It is a radical departure from
existing law, and under the Constitution that is not your job.
That is our job.
So the first question I have for you is twofold. Has any
previous Administration used an error correction to overturn
State authority to implement its SIP after it has been approved
for 18 years?
Ms. Jackson. Sir, I am happy to get you an answer, but
again, I will point out that it was the previous Administration
that determined that parts of Texas's permit rules did not meet
the requirements of the Clean Air Act. It is EPA's job to
enforce the Clean Air Act and EPA stepped in because if we
didn't, Texas businesses would not be able to build or expand
because they could not get a greenhouse gas emission permit in
the State of Texas that was legal so they would have been
subject to any number of lawsuits.
Mr. Olson. Yes, ma'am, but the previous Administration did
come in with a couple of month deadline for the Texas companies
to comply. Usually this happens when there is a change in the
SIP. As I understand it, there is about a 3- to 4-, 5-year
process for the States to come through and propose what they
are going to do to EPA. We are given less than a year, less
than 6 months to do it, and that is something that is on this
Administration. Is that----
Ms. Jackson. We would prefer that Texas issue the
greenhouse gas permits themselves but if Texas refuses to do
it, as I am sure you will hear from the next witness, then EPA
is stepping in to do so because the businesses in Texas still
need permits under the Clean Air Act, sir.
Mr. Olson. Once again, how is changing the Clean Air Act
with just using the technical corrections legislation, how is
that not usurping the legislative branch's authority to pass
laws and regulate our environment? I mean, why do you get to
be--under the Constitution, we should be doing that, not the
EPA. How can you justify that?
Ms. Jackson. Sir, under the Clean Air Act, EPA's job is to
enforce the law and ensure that permits are the same all over
the country, so a business in Texas gets a Clean Air Act
permit, it is the same as Louisiana next door, and so what EPA
has done is move in to ensure that just like the Nucor steel
facility just got a permit from the State of Louisiana, if they
wanted to build the exact same facility in Texas, they would
need a permit for greenhouse gases and they cannot get one
because Texas has refused to consider those permits at this
time.
Mr. Olson. Yes, ma'am. Well, there is one other question I
have for you. Again, we have talked about what is happening in
my home State and we have talked about, the other side of the
aisle has been very vocal about scientifically based actions
here, and I agree with that. We should do this if we are going
to do it scientifically based. I think the science right now is
very much in doubt. But the one thing that I am really
concerned about from the other side of the aisle, at the end of
the day the argument rests on what five Supreme Court justices
decided, and that case did not say that you had to regulate
greenhouse gases. That was not what the decision said. I will
read from the decision. The Court did find that EPA has the
authority to regulate carbon dioxide as an air pollutant but
they said only if the EPA makes a finding of endangerment under
that provision, section 202(a)(1). And the Court further stated
that EPA must ground its reasons for action or inaction in the
statute. So basically they gave you the ball. I guess my
question to you is, was Massachusetts v. EPA a mandate for the
EPA to implement global greenhouse gas control or not? Yes or
no.
Ms. Jackson. Sir, it was a mandate that we consider the
science, and that only if we could come up with reasonable
science, which I do not believe exists, that shows that
greenhouse gases do not endanger public health and welfare,
could we ignore it. They said it was arbitrary and capricious
to simply ignore the science and choose to make no decision. So
it did give us the ball in that it said we could not stick our
heads in the sand. We had to, per the law, make a
determination, and in making that determination, I reviewed our
Nation's best science by its best scientists and made a finding
of endangerment.
Mr. Olson. Basically you have taken something else. It was
EPA that made that decision, not the Court, and those comments
here are erroneous. EPA did it, not the United States Supreme
Court. Thank you for your time.
Mr. Whitfield. The gentleman from Utah, Mr. Matheson, is
recognized for 5 minutes.
Mr. Matheson. Thank you, Mr. Chairman. Thank you,
Administrator Jackson, for coming today.
I do think it is important that this subcommittee hold
hearings on this issue. I think the challenge of climate change
is real and I think that the legislative branch ought to be
engaged. I have some concerns about legislation like Chairman
Upton's draft bill which does disprove the EPA's endangerment
finding and bans the EPA from regulation greenhouse gas
emissions. I am concerned because I think it could
substantially weaken the effectiveness of the Clean Air Act,
and I think everyone in this room would argue that the Clean
Air Act over the last few decades has been an undeniable
success. It has been a success in providing cleaner air and
contributing to public health interests.
I also have concerns that the bill overrides the ability of
the EPA to regulate emissions from motor vehicles, weaken the
current fuel economy standards for cars and light trucks, which
is important to reducing our dependence on foreign oil. But I
do hear from folks in my State who are concerned about the
implementation of the greenhouse gas regulations and other
regulations coming down the pike from EPA and the potential
costs associated with this uncertainty and growing regulatory
burden, especially as we seek to grow our economy out of this
economic recession.
Administrator Jackson, I have heard from our State
department of environmental quality, and I know you discussed
this in response to Mr. Doyle's questions, but the Utah DEQ has
said that despite the best available control technology
guidance issued to the States last fall, there remains a lot of
uncertainty over what BACT decisions by States will ultimately
be accepted by the EPA. In particular, I have been told that
the BACT is still too vague to provide any certainty to sources
who are trying to plan for new construction or modifications.
In his testimony, Mr. Carter with Sandy Cooper also made
similar remarks. Can you elaborate on how EPA is working with
States to implement best available control technology?
Ms. Jackson. Certainly, sir. Through our regional offices,
we are offering technical assistance as States work through
permit by permit. This is a permit-by-permit decision under the
Clean Air Act, and essentially what you do is, you lay out the
options for controlling greenhouse gases and you look at
whether they are commercially available, whether they are
available at reasonable cost and whether they are effective,
and oftentimes we believe that is going to lead people straight
to energy efficiency, which is a very much available way and
certainly cost-effective way to reduce and make a real start on
reducing greenhouse gases.
Mr. Matheson. Do you think there is a way to create
additional certainty or predictability that you can provide to
State permitting agencies?
Ms. Jackson. We are certainly happy to try and to continue
working with Utah and the professionals there.
Mr. Matheson. Do you believe that your regional offices
have the necessary resources, whether it is funding or staff,
to work with the States on implementing these rules?
Ms. Jackson. We have made it a priority that the
implementation of these rules for our air staff is priority
number one, and I do believe, sir, that we have resources
available to any State that needs them.
Mr. Matheson. Do you agree with assertions by many in
industry and the utility sector that permitting uncertainty in
conjunction with the additional EPA rules coming down the pike
over the coming months and years is affecting current and
future investments in plant modifications, upgrades and
construction?
Ms. Jackson. I agree that one thing I hear often from
industry is that they need certainty of regulation. I think the
clean cars rule and the nationwide standard is a great
demonstration of how knowing what the road ahead looks like
from a Clean Air Act perspective has helped them to move
forward and do what they do best, which is make cars.
Mr. Matheson. I will ask another question. The EPA has
already announced the delay in implementation of efficiency
rules for biomass facilities. Do you anticipate any delays in
other covered sectors will be announced?
Ms. Jackson. I have nothing to announce right now, sir. We
are trying to do what I said, which is move in a series of
moderate steps that give people lots of warnings so there are
no surprises about regulations that may come down the pike, and
what we have announced so far is that the only two sectors that
we are looking at for additional standard setting are the power
sector, utilities, and refineries because they account for such
a large percentage of our Nation's greenhouse gas emissions.
Mr. Matheson. OK. Thank you, Mr. Chairman. I will yield
back.
Mr. Whitfield. I recognize the gentleman from West
Virginia, Mr. McKinley, for 5 minutes.
Mr. McKinley. Thank you, Mr. Chairman.
I am trying to keep most of my questions to yes or no
answers to the extent you can, and I have got a lot of others
if you could submit some responses back to those at the
appropriate time. Last summer, Senator Reid made a remark that
said coal makes us sick and oil makes us sick. Do you agree
with that?
Ms. Jackson. Only in that pollution makes us sick, so if
they are the source of pollution, then yes, but it is the
pollution that makes us sick.
Mr. McKinley. I have heard a lot today about the health
benefits, and I don't want to diminish those concerns about the
health benefits, but I have come to Congress 34 days ago with a
bigger concern that there are 15 million out of work today in
America, and a lot of it is attributed back to the actions of
the EPA and some of their activities or overregulation. I am
seeing in West Virginia a mine shut down that had a permit 3
years ago. Now 250-some people are out of work. I saw a mine
just close in Pennsylvania by the EPA action. I have seen the
issues of water quality in West Virginia and all other States
east of the Mississippi that are more stringent than bottled
water you can buy in a supermarket. I have seen fly ash being
under attack and people using less of it and recycle. I am just
so concerned that the EPA is, with all due respect, out of
touch with what is going on in America, and I would like if you
could please just cite one example of where the EPA has
collaborated with a major industrial employer and they have
increased their jobs in a significant way. Can you cite one
example?
Ms. Jackson. Yes, sir. The car industry has reduced their
overall emissions over 40 years while the number of cars on our
roads has continued to increase as our population got larger,
and that is because of technological innovation that insisted
that we not grow their profits at the expense of our health.
Mr. McKinley. I am looking for one company that you have
worked with, you collaborated with them and they have increased
employment.
Ms. Jackson. Certainly, sir. Any time an industry invests
in pollution control, they are hiring workers, everything from
engineers to technicians to people who design and implement and
put on scrubber so that when you burn coal in a power plant,
the emissions are clean. All of those jobs are part of the
legacy----
Mr. McKinley. The remark you made earlier----
Ms. Jackson [continuing]. Of the Clean Air Act and EPA's--
--
Mr. McKinley [continuing]. Madam Administrator, that----
Ms. Jackson [continuing]. To protect the public health.
Mr. McKinley [continuing]. There were thousands of
scientists and physicists across America that support this
matter but yet there are thousands equally in opposition to
that, such as physicist Hal Lewis, people within NOAA, people
within the United Nations' climate control panel. There are
others that are supporting that and they conveniently seem to
be ignored in this. Was Hal Lewis wrong when he said this was
one of the greatest frauds being perpetrated on the people of
America?
Ms. Jackson. Well, I do not know Mr. Lewis, sir, but I will
say that our best scientists in the country have reached a
consensus, and it is unequivocal, that the science is clear
that manmade emissions of air pollution and global warming
gases are changing----
Mr. McKinley. Anthropogenic global warming----
Ms. Jackson [continuing]. Our atmosphere.
Mr. McKinley [continuing]. Is still an issue that the
scientists are still debating, and you know it and I know it.
Ms. Jackson. No, I do not agree with that.
Mr. McKinley. I am an engineer and I----
Ms. Jackson. I absolutely do not agree with that.
Mr. McKinley [continuing]. Can tell you, it has not been
determined.
Ms. Jackson. I am an engineer as well, and I know to look
to scientific experts to make decisions like this. I am not an
expert on the climate so what we have done is look at people
like the National Academies across----
Mr. McKinley. Let me go back to a comment that perhaps it
wasn't worded, because I found the answer a little humorous. It
said something to the effect that you didn't presume to direct
Congress how to act, so I am going to maybe--would you favor,
do you support the idea that Congress may very well want to
take action to--do they have the right to vote up or down on
any major EPA regulatory offering?
Ms. Jackson. Sir, the laws passed that I implement were
passed by Congress. The Clean Air Act was passed by Congress.
So I understand and recognize that under the U.S. Constitution
Congress makes laws and then the executive branch executes the
laws, absolutely.
Mr. McKinley. So you would think Congress should have the
right to approve any regulations before they are implemented?
Ms. Jackson. No, sir. Congress already has the
congressional Review Act, which allows it to review every
regulation that is adopted by not just my agency, so that is
certainly already the law of the land.
Mr. McKinley. Ma'am, I will get back with the other
questions to you. Thank you very much.
Ms. Jackson. Thank you.
Mr. Whitfield. The chairman recognizes Mr. Gardner of
Colorado for 5 minutes.
Mr. Gardner. Thank you, Administrator Jackson, for your
time here today. I appreciate your willingness to be here, and
I too have only been here for 34 days and it continues to amaze
me how the scare tactics are thrown out as if everybody is
speaking from the same page but the problem is, they are not,
and I want to talk a little bit about criteria pollutants
versus greenhouse gases. I think a lot of the scare tactics
that we have heard in terms of the health concerns are criteria
pollutants and greenhouse gas is not a criteria pollutant, and
I think that is important to recognize, that a lot of the
health concerns that have been raised here as scare tactics are
based on criteria pollutants, and this bill does nothing
dealing with criteria pollutants, the bill that we are
discussing now.
I want to follow up another question that some of the other
members have asked. I met with a CEO of a company in Colorado
who employs a thousand people directly, 2,000 people
indirectly, and he mentioned to me at our meeting, this was
just this past Friday, that he is very concerned about
regulations because he is worried that the cost and reliability
of energy and the energy and power infrastructure, he is
worried about the energy infrastructure and he is worried about
the ability of our country to continue to produce affordable
energy for consumers and for businesses, and that being said, I
believe Chairman Upton asked an earlier question regarding
whether or not the EPA had done an cost-benefit analysis of the
impact of EPA regulations. I believe your response was that the
EPA had not done so because such analysis would have required
the EPA to reach out to businesses in order to gather
information regarding the impact of the EPA's regulations.
Well, isn't that the right thing to be doing is to reach out to
businesses in terms of the impact of this regulation?
Ms. Jackson. No, I think that is not an accurate assessment
of how the conversation went. I am happy to recount it for, it
is in the record, but what I said was----
Mr. Gardner. You don't think you ought to be talking to
American businesses about these regulations first?
Ms. Jackson. We talk to American businesses all the time,
and I think that is the way to make smart commonsense
regulations.
Mr. Gardner. And so the American business community agrees
that this regulation is the way to move forward?
Ms. Jackson. The American business community has commented
on the regulations as we move forward, and I would say that
there are varying opinions. We have heard from small businesses
who support the regulation because they believe it will help
the clean energy sector. We have heard from several, I think 11
utility company, who said that this is a commonsense,
reasonable approach to----
Mr. Gardner. Have you heard from some----
Ms. Jackson [continuing]. Help to make them efficient.
Mr. Gardner [continuing]. That they will lose jobs as a
result?
Ms. Jackson. I think all businesses talk about, when I talk
to them, they want to make sure that they have regulatory
certainty, and they are worried about their bottom line.
Mr. Gardner. And they are worried about job losses?
Ms. Jackson. Certainly I have seen studies----
Mr. Gardner. Do you think they need to worry about job
losses?
Ms. Jackson. I think the President has made it clear that
jobs are an absolute focus, sir, absolutely. Jobs are our
absolute focus and we believe the clean energy sector is a
place to grow jobs----
Mr. Gardner. But what if they are not in the clean energy
sector? Should they worry about jobs? I mean, this sounds like
we are picking winners and losers and saying some jobs are
better than others.
Ms. Jackson. I do know this, sir: the Clean Air Act is
supposed to relieve their minds about pollution in the air that
might make them and their families sick.
Mr. Gardner. That is a criteria pollutant, not greenhouse
gas.
Ms. Jackson. No, no, no. The endangerment finding makes
clear that greenhouse gases also endanger public health and
welfare.
Mr. Gardner. But I think again we are confusing the issue
of criteria pollutants and greenhouse gases. You mentioned
earlier that ag would not be--there would be no imposition on
agriculture, agricultural sources. I believe you put a timeline
of 2013 on that. Will there be ag sources put under this rule
after 2013?
Ms. Jackson. I can't speculate to that. I have made a
commitment that there will be no regulations for permitting for
agricultural sources until July 2013.
Mr. Gardner. But after that, there may be permitting
requirements brought into this rule?
Ms. Jackson. Yes. It is my hope still that Congress will
look towards legislation at some point.
Mr. Gardner. And on agriculture, I think it is important
too when we talk about that agriculture is not affected by
these rules and jobs in agriculture aren't affected by these
rules, I want to point out a letter that talked about the cost
about running a sprinkler for farmers in my district. The
estimated cost of certain greenhouse gas emission controls
would cost the farmer in this particular rural electric
association nearly $2,000 a year per meter. Do you think that
will affect their ability to hire people and to grow their
operation?
Ms. Jackson. Sir, I don't know what you are referring to. I
am happy to review it, and I am also happy to again state what
I said before, that as we put these regulations out, they are
meant to be commonsense moves that in general will rely on
energy efficiency and other moderate steps that will add up,
that will get us started in moving towards reducing greenhouse
gas pollution.
Mr. Gardner. Do you believe that agriculture is affected by
increased costs of energy?
Ms. Jackson. Certainly.
Mr. Gardner. Do you believe agriculture is impacted by the
increased cost of fertilizer?
Ms. Jackson. Certainly, sir.
Mr. Gardner. Do you believe that these regulations will
increase the cost of farming equipment?
Ms. Jackson. No, sir, I don't necessarily believe that
because I am not sure what regulations we are talking about. We
have regulations on the board right now, for instance, for cars
that make clear that they pay for themselves essentially
because of the savings in fuel. There are tremendous
opportunities in rural America for the economy to continue to
grow as it has thrived over the past several years and we are
not looking to regulate----
Mr. Gardner. The economy has thrived over the past several
years?
Ms. Jackson. Rural America's economy has done fairly well
as the rest of the country has seen the housing market and
economy really do poorly.
Mr. Gardner. Administrator Jackson, I would invite you to
my district to meet with people who believe the economy has not
thrived over the past few years.
Ms. Jackson. I would be happy to do that, sir.
Mr. Whitfield. I recognize the gentleman from Kansas, Mr.
Pompeo.
Mr. Pompeo. Thank you, Mr. Chairman.
Thank you, Ms. Jackson, for coming today. In the 4th
district of Kansas, we do lots of things. We have agriculture,
and we make airplanes, a lot of airplane stuff, manufacturing.
I came from that industry. The cost of manufacturing has driven
lots of jobs. We have got unemployment in our aircraft
manufacturing industry that is enormous, and families are
hurting. I heard Mr. Waxman and Mr. Markey talk about children.
I have seen the impacts on families from what the regulatory
environment that this Administration has put forward has
caused.
I want to ask you in response to something you said to Mr.
Shimkus, a question. You acknowledged the existence of the law
of supply and demand or the economic principle, and then you
joked about price elasticity because you wouldn't answer his
question yes or no about what the price elasticity of something
was. Tell me what you think the price elasticity of energy is
as it relates to supply and demand.
Ms. Jackson. The price----
Mr. Pompeo. Is it zero? Does energy stay--as you impose
regulations, does energy cost stay fixed?
Ms. Jackson. Sir, I want to state here, I have not said
that there are not potential costs to move to cleaner energy.
What is at stake is making reasonable decisions on how to move
to cleaner energy, less-polluting forms of energy but do it in
a way that does not harm our economy, and I am committed as
head of the EPA to enforcing and implementing the Clean Air Act
to protect our public health but doing it in a way that is
modest and moderate and that is mindful of our economy at the
same time.
Mr. Pompeo. I appreciate that. I will tell you that the
folks that I talk to in the 4th district of Kansas don't
believe there is anything moderate or modest about the
proposals that your agency has put forward.
I will ask you this. You earlier cited statistics that said
that the benefits of the Clean Air Act have been about 40 to 1.
Ms. Jackson. That is correct.
Mr. Pompeo. It would seem to me then if we would just
appropriate a trillion dollars, we could take out all the
deficit because we get a 40 to one return on that investment.
Is that what you are proposing in terms of return on invested
capital?
Ms. Jackson. No, sir. What I am trying to propose is that
for every dollar invested to control pollution and protect
public health, that is $40 of health costs that the American
people are avoiding. They are healthier and more productive
because they don't have to worry about increased asthma attacks
and premature death as a result of----
Mr. Pompeo. Right, and if your analysis is therefore right,
what do we spent on health care a year, we just pick 40 of that
number and we would invest that amount of money and we would
solve the health care problem. That is what your analysis
suggests. Am I misunderstanding something?
Ms. Jackson. Yes, you are, sir.
Mr. Pompeo. OK. Help me understand what it is I am
misunderstanding.
Ms. Jackson. You are misunderstanding the point that the
Clean Air Act is a public health statute. It is designed to
protect the health of Americans through preventive medicine, if
you will. It removes pollution from the air that causes asthma
attacks, that causes lung disease, that make us and our
children----
Mr. Pompeo. I understand. I have one more question. I want
to clean up a couple things you said earlier. You spoke to the
fact that you appreciated regulatory certainty being important,
and then you just told Mr. Gardner that our agricultural
community gets something less than 2 years of certainty with
respect to greenhouse gas regulation. I will tell you that
their return on invested capital calculations go far past 24
months, and so I am trying to understand how you can argue that
you think regulatory certainty is important and yet tell us
that our agriculture folks in the 4th district get just a
little less than 24 months before you will chase them too.
Ms. Jackson. Well, sir, I am not here to tell your
constituents or anyone else for that matter that greenhouse
gases are not a problem or are not something that we should be
addressing as a country. I believe that we should be
incentivizing and innovating to move to cleaner forms of energy
and reduce the accumulation of greenhouse gases in our
atmosphere, and that is something that is out there not because
I sit in this seat, sir, but because----
Mr. Pompeo. If you believe----
Ms. Jackson [continuing]. They are a challenge for our
country.
Mr. Pompeo. Fair enough. If you believe that these
regulations were going to have a net loss of jobs, would this
change your view of how the EPA ought to proceed?
Ms. Jackson. Certainly, sir. If I was seeing regulations
that I thought----
Mr. Pompeo. Thank you.
Mr. Whitfield. The gentleman from Virginia, Mr. Griffith,
is recognized for 5 minutes.
Mr. Griffith. Thank you, Mr. Chairman.
Massachusetts v. EPA, last line, the holding, ``We hold
only that the EPA must ground its reasons for action or
inaction in the statute.'' Can you tell me where in the statute
it allows you to create a tailoring rule?
Ms. Jackson. The tailoring rule is based on our belief that
the statute does not speak to the fact that there be too many
sources to regulate all at once. It is an absurd result. That
is the theory of the law----
Mr. Griffith. And I don't disagree with you, ma'am.
Ms. Jackson [continuing]. On which we based the rule.
Mr. Griffith. It is an absurd result but that is what the
law says, and isn't it the right of the elected officials, this
Congress to make that decision and not unelected officials in
the EPA?
Ms. Jackson. Sir, the United States Supreme Court held that
the Clean Air Act----
Mr. Griffith. You had to do something, but it said you had
to follow the statute----
Mr. Rush. Mr. Chairman.
Mr. Griffith [continuing]. You followed the statute----
Mr. Rush. Mr. Chairman, Mr. Chairman. We have sat here and
watched the questions from the members on this subcommittee and
they ask questions and the witness attempts to answer, and they
won't allow her the opportunity to complete her answer. So
would you admonish members to allow the witness to complete her
answer before they interrupt her?
Mr. Whitfield. Mr. Rush, thank you for that. These members
have waited a long time, and you have been very patient to be
here, but I am going to allow them to continue to ask questions
and----
Mr. Rush. And can the witness please answer? She has been
here for a long time also.
Mr. Griffith. I will make it a yes or no question. Do you
believe that EPA should follow law as written or request
Congress to change it or ask Congress to relieve them of that
obligation when the result of the law would be an absurd
result? Yes or no, please.
Ms. Jackson. I believe EPA should follow the law as
interpreted by the United States Supreme Court and the rules
that we have on the books are designed to avoid the absurd
result. That is the basis for the rulemaking we have made. That
is the basis for our attempts to be as reasonable as we can.
Mr. Griffith. In regard to certainty, and I am doing a
little cleanup too. In regard to certainty, you indicated that
there were no plans for a cap-and-trade program. How long can
you give me certainty----
Ms. Jackson. I should have said for greenhouse gases
because we have a cap-and-trade for----
Mr. Griffith. OK. For greenhouse gases cap and trade, you
said you had no plans, do you have any ability to give the
businesses, the industries and the folks that produce in my
district any certainty how long can they count on that?
Ms. Jackson. They will see proposed rules long before for
public comment and we have agreed to do industry listening
sessions to hear from the industries how best they think we
should approach future regulations. So there will be a
transparent process. There will be no secrets. I do not believe
there will ever be a cap-and-trade program authorized under the
Clean Air Act.
Mr. Griffith. Thank you. And then let me ask you, when you
talked about health and safety of the American folks in looking
at the endangerment ruling, I am wondering if you all looked at
the fact, because you mentioned something about the heat being
higher, causing folks to have strokes or heart attacks, etc.,
and I am wondering if you looked at the fact that with the
electric rates going up, the heating bills going up, fuel oil
going up, that there are a lot of folks in my district who are
having a hard time paying for their heat, and what is the
offset on the other side? Did you look at what is going to cost
those folks and the danger to their health by not having
sufficient heat?
Ms. Jackson. Sir, I am absolutely not asking people to
freeze to death or be very warm in the summer. I am not sure I
understand your question.
Mr. Griffith. Well, you said in your opening statement that
one of the things that you looked at in making the endangerment
ruling was the fact that increased heat when folks--if the
planet warms that folks are going to suffer more disease as a
result of overheating and heart attacks, I think you mentioned
heart attacks or strokes. And I am just asking if the counter
side to that was looked at and the fact that we are going to
raise the cost for Americans to buy fuel, therefore some of
them are not going to have sufficient heat to heat their homes.
Ms. Jackson. The actions we have taken under the greenhouse
gas regulations are not intended to make less fuel available to
Americans, sir, so these are commonsense steps that actually in
the case of the car rule means we will need less oil. They are
energy efficiency. They are meant to make us get every drop of
energy we can out of every drop of gasoline or fuel that we
use. So perhaps I am not understanding. The endangerment
finding----
Mr. Griffith. All right. Are you unaware that the
regulations already imposed and additional regulations that are
being placed on the power plants of the United States of
America will make it more difficult to use coal, which is now
50 percent of our source, and if you eliminate that as a
source, you are going to raise the cost of electricity,
therefore making it harder for people to heat their homes.
Ms. Jackson. We are not intending to eliminate coal as a
source of fuel. That is not the goal of reducing greenhouse gas
emissions. What we are saying is that we can use the Clean Air
Act to make a start in reducing greenhouse gas emissions.
Mr. Griffith. And I am wondering if you all have looked at
the possibility that since I believe that you will send a
number of jobs overseas that the Chinese and the Indians and
even the Ukrainians are going to use coal from my district and
other districts around the United States that the impact of
that is that we actually have more manufacturing in areas where
they are not doing even the reasonable things that we are doing
at this point, therefore contributing to the global environment
additional pollutants in the air which will actually harm
Americans more than what you believe your actions will solve.
Ms. Jackson. As I said earlier, sir, changing the future
with respect to climate change for our planet is going to
require all nations to do something but I do not believe that
means that we all therefore must start at the same time. Parts
of Europe have already started, so clearly it is not----
Mr. Whitfield. Well, I think everyone has had an
opportunity to ask questions. Ms. Jackson, we appreciate your
taking time to be with us. We are going to be having some
hearings on the air transport rules, new source review, fly
ash, some other issues, and so we look forward to your coming
back to have additional discussions with us.
I know throughout this questioning period with you, a
number of members said they were going to be submitting written
questions for you to answer. Who on your staff should we be
particularly focused on to deal with that issue?
Ms. Jackson. Well, I always accept correspondence from
members but the head of my Office of Congressional and
Intergovernmental relations is David McIntosh, if you would
prefer to direct your staff towards him.
Mr. Whitfield. David McIntosh?
Ms. Jackson. Yes, Mr. Chairman, but I will take any
questions you have.
Mr. Whitfield. Well, thank you very much, and at this time
I would like to call up the third panel, and that is the Hon.
Greg Abbott, who is Attorney General of the State of Texas; Mr.
Steve Cousins, Vice President of Lion Oil Company; Mr. Harry
Alford, President and CEO, National Black Chamber of Commerce;
Mr. Lonnie Carter, President and CEO of Santee Cooper; Mr.
Steve Rowlan, General Manager, Environmental Affairs, Nucor
Corporation; Betsey Blaisdell, Senior Manager of Environmental
Stewardship, the Timberland Company; and Mr. James Pearce,
Director of Manufacturing for FMC Corporation.
OK. I want to thank all of you. You have been very patient
today, and yet this is an issue of great importance. It has
significant impact on our country in a lot of different ways,
so we look forward to the testimony of all of you. Mr. Abbott,
you are the Attorney General of Texas. We are going to start
with you. We will recognize you for 5 minutes for your opening
statement, and then we will go right down the line, and before
we ask any questions we will have all of you complete your
opening statements, so Mr. Abbott.
STATEMENTS OF GREG ABBOTT, ATTORNEY GENERAL, STATE OF TEXAS;
HARRY C. ALFORD, PRESIDENT AND CEO, NATIONAL BLACK CHAMBER OF
COMMERCE; STEVE ROWLAN, GENERAL MANAGER, ENVIRONMENTAL AFFAIRS,
NUCOR CORPORATION; JAMES PEARCE, DIRECTOR OF MANUFACTURING, FMC
CORPORATION; STEVE COUSINS, VICE PRESIDENT, LIONS OIL COMPANY;
LONNIE N. CARTER, PRESIDENT AND CEO, SANTEE COOPER; AND BETSEY
BLAISDELL, SENIOR MANAGER OF ENVIRONMENTAL STEWARDSHIP, THE
TIMBERLAND COMPANY
STATEMENT OF GREG ABBOTT
Mr. Abbott. Thank you, Mr. Chairman, for the opportunity to
appear before this subcommittee. As you noted, my name is Greg
Abbott and I am the Attorney General of the State of Texas, and
I want to first point out that in my submitted remarks I have
more detail about this but Texas has strived to work very
effectively with the EPA to enforce environmental laws. Texas
also strives to prevent political before it occurs. Ozone and
NOx emissions have been on a steady decline in Texas
since 2000. Texas has installed more wind power than any other
State and achieved one of the largest declines in greenhouse
gas emissions of any State in the Nation. Texas remains
committed to working with the EPA to improve air quality and to
hold polluters accountable, but Texas cannot support the EPA's
regulation of greenhouse gases. Texas believes the EPA has
ignored the plain language of the Clean Air Act, violated
notice and comment requirements, and attempted to rewrite
federal laws written by the United States Congress by the
administrative rulemaking process.
Texas lodges several challenges to the EPA's regulation of
greenhouse gases. For now I will try to plug in just three of
them that reveal legal problems with the EPA's regulations. One
that you all talked about already a lot this morning is the
tailoring rule. The Clean Air Act defines in precise numerical
terms the emission thresholds that trigger permitting
requirements for stationary sources. The EPA concedes that
regulation of greenhouse gases at these statutory thresholds
produce results ``inconsistent with the congressional intent
concerning the Clean Air Act'' by subjecting thousands of
schools, churches, farms, small businesses to Clean Air Act
regulation. These admittedly absurd results indicate that
greenhouse gases simply are not the kind of substance the Clean
Air Act was designed to regulate. Well, dissatisfied with
Congress's clear instructions, the EPA attempted to amend by
administrative fiat the Clean Air Act. EPA calls the revised
language its tailoring rule and we believe that the EPA has
violated the Clean Air Act by its tailoring rule.
Texas also challenged the EPA's SIP call rule. The Clean
Air Act empowers the EPA to require States to amend their
permitting programs by issuing a SIP call. The Act gives States
up to 3 years to bring their regulatory program into compliance
with major federal mandates such as the greenhouse gas
regulations. When the EPA issued the SIP call rule on September
2, 2010, it gave States just 15 months until December 2, 2011,
to change their laws and regulations to comply with the new
greenhouse gas mandate. The EPA shortening the time frame
violates the Clean Air Act by giving States just 15 months,
rather than the congressionally mandated 36 months.
Texas also challenged the EPA's FIP rule. In August 2010,
we informed the EPA that Texas would not satisfy the EPA's
greenhouse gas demands. A few months later in late October
2010, an assistant EPA administrator filed a sworn statement in
federal court swearing that the EPA could not take over Texas
air permitting program until December 2, 2011, at the earliest,
meaning almost 10 months from this very day. Well, despite that
sworn statement, the EPA did a 180-degree turn on December 23rd
and issued an emergency FIP rule in an attempt to immediately
federalize Texas's air permit program. When it suddenly changed
courses, the EPA not only acted duplicitously, it also violated
the Administrative Procedures Act, which requires the EPA to
solicit notice and comment from the public. The EPA's FIP rule,
however, was issued without notice and comment period at all in
direct violation of federal law.
Not only did the FIP rule violate the notice and comment
required by the APA, it was promulgated just before the
Christmas and New Year's holidays in an obvious attempt to
minimize public scrutiny. The EPA had known for more than 4
months that Texas would not comply with the SIP call rule and
yet it waited until just before Christmas to announce without
public comment or notice that a supposed emergency required it
to seize control of the air permitting system in Texas just 2
weeks later on January 2, 2011. These are some of the reasons
why Texas is lodging its legal challenges against the EPA.
[The prepared statement of Mr. Abbott follows:]
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Mr. Whitfield. Thank you, Mr. Abbott.
At this time I recognize Mr. Alford with the Chamber of
Commerce.
STATEMENT OF HARRY C. ALFORD
Mr. Alford. Chairman Whitfield, Mr. Vice Chairman,
distinguished members of this committee, thank you for having
me. I am Harry C. Alford, President and CEO of the National
Black Chamber of Commerce.
After failing to persuade the American public of its
intentions to pass a cap-and-trade program through the
legislative process, the Obama Administration has now unleashed
its Environmental Protection Agency to tackle climate change
with non-transparent, burdensome regulations. This bureaucratic
zeal is not only disastrous for American consumers and
businesses at large but also particularly threatening to the
future of prosperity of black communities.
The Energy Tax Prevention Act of 2011, introduced by
Representatives Upton and Whitfield and Senator Inhofe, offers
our Nation a much-needed reprieve from this EPA overreach and
it is my hope that both Democrats and Republicans will join
this new effort to stop the agency's power grab of our domestic
climate policy. Congress must be in charge of policymaking for
such a serious issue, one that touches the lives and welfare of
virtually every American, not unelected officials with zero
accountability.
The Act aims to protect American jobs and businesses,
especially in light of increasing competition from developing
nations such as China. Again, for the African American business
community and black workers nationwide, EPA's regulatory
overreach will kill their competitiveness and innovation and
impose significant burdens to new employment.
Back in 1979, manufacturing employment here in America
reached its high point, providing jobs to roughly 19.6 million
Americans. Since then, we have lost more than 8 million
manufacturing jobs. Now, many of the factories that once
employed our workers here in the United States are now popping
up in China, Indonesia and other Asian countries.
When I was a young man, I began my career in Detroit. Upon
revisiting throughout the years, I can attest to how cumbersome
government regulations have come to destroy small businesses
and starve families. EPA's plan to implement emission
regulations will sadly result in far greater strife. This
strife will be borne particularly hard by the African American
labor force, one that has not only been underrepresented in the
workforce historically but also badly wounded since the
financial meltdown. Today 16.5 percent of African American men
and women are out of work and the situation is only getting
worse. According to a new study by the Economic Policy
Institute, the black unemployment rate is projected to hit a
25-year high by the third quarter of this year.
Additional EPA proposals that have sought to tighten air
quality standards with regard to ozone exemplified mammoth
business-destroying implications as well. For instance, the
National Federation of Independent Business found that as many
as 675 counties across the United States would violate the
proposed standards, triggering job-killing mandates, costly
compliance fees and financial penalties for businesses in those
areas. Just imagine how businesses would be forced to close and
how many workers would be laid off if EPA's broader proposal to
implement a regulatory cap-and-trade scheme is successful.
Long story short: the environment belongs to everyone. For
EPA to think that it can use the Clean Air Act to now ram
through cost-prohibitive climate regulation is something I will
not stomach and it certainly is not something that the African
American business community is prepared to accept either. While
paying a higher heating bill this month or doling out money for
gasoline on the way into the office from McLean or Bethesda may
mean little to government bureaucrats, people living paycheck
to paycheck and small businesses trying to get by simply cannot
afford it, especially now.
I applaud all members of the legislature who are working
hard to make sure that EPA does not enact a cap-and-trade
scheme and therefore are standing up for not only America's
economic future but also for the well-being of our Nation's
African American community specifically.
Again, thank you for this opportunity to testify here this
morning on the important of the Energy Tax Prevention Act and
halting EPA's regulatory overreach. I look forward to answering
any questions you may have.
[The prepared statement of Mr. Alford follows:]
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Mr. Whitfield. Thank you, Mr. Alford.
Mr. Rowlan with Nucor Corporation, you are recognized for 5
minutes.
STATEMENT OF STEVE ROWLAN
Mr. Rowlan. Thank you. I am Steve Rowlan, General Manager
of Environmental Affairs for Nucor Corporation. Thank you,
Chairman Whitfield and Vice Chairman Sullivan, for this
invitation to testify today on the impact of greenhouse gas
regulations on our industry and other industries in our
Nation's economy.
Nucor is the largest steel producer and recycler in the
United States. We employ over 20,000 teammates in 23 States and
produce steel products for use in road, bridges, automobiles,
appliances, buildings and a range of other markets.
The impact of the great recession on the steel industry was
swift and severe. In August of 2008, steel capacity utilization
was over 90 percent. By January 2009, capacity utilization had
plummeted to 36 percent. In a mere 5 months, the industry went
from experiencing strong growth and excellent market conditions
to the worst economy many of us in the industry have ever seen.
Despite how bad that market got, Nucor did not lay off a single
worker.
The economic conditions for the steel industry are
improving. Capacity utilization has increased and we are seeing
a return in demand. However, the strength and duration of the
economic recovery remains to be seen. Greenhouse gas
regulations are adding to this uncertainty.
U.S. steel producers are in a highly competitive global
market that will only get more competitive in the future. We
face unfair practices from steelmakers in countries like China,
and increasingly, we are not competing against other companies,
but against governments, governments who bring their full
weight to bear to ensure the success of their domestic industry
through the use of subsidies, generous loans and other
protectionist measures. I would say that is a pretty strong
headwind to compete against. And the uncertainty created by our
government's many regulatory proposals only adds to that
headwind and diminishes the competitiveness of many U.S.
industries.
From an environmental perspective, America is the best
place in the world to make steel. Our industry has reduced its
energy-intensity by 30 percent since 1990, and reduced
greenhouse gas emissions by 35 percent over the same time
period while increasing overall production. This significantly
exceeds the Kyoto Protocol targets. In fact, the U.S. steel
industry has the lowest CO2 emissions per ton in the
world. What is more, companies like Nucor have made steel the
most recycled product in the world. As the Nation's largest
recycler, Nucor kept more than 17 million tons of scrap metal
from cars, appliances, and other discarded products out of
landfills in 2010. The recycled scrap is then melted down
through the use of electrical energy and made into new steel
products.
Because greenhouse gas emissions are a global issue,
regulation through the Clean Air Act threatens both our
competitiveness and the environmental benefit that results from
making steel so cleanly in the United States. Ironically, these
very regulations and practices that are intended to improve the
environment actually result in increased global emissions and
more environmental impact than if the industry had remained in
the United States.
The problems these regulations create manifest themselves
in the permitting process and other ways. Everyone expresses
concern about permitting and the impact these rules have on our
ability to build industrial projects that create jobs and
improve people's livelihoods. However, this is not a new
problem. Over time, we have created a system that is comprised
of endless reviews, hearings, allegations, lawsuits and
continued modeling that has turned our permitting process into
a slow, frustrating experience that has eliminated the
certainty necessary for the expenditure of capital. I have been
quoted as saying it is like being in a hamster wheel. The lack
of availability of affordable energy also remains a real
obstacle.
Due to the continual halting of permits for new,
traditional sources of energy generation and constantly
promoting the development of expensive so-called green energy,
we as a Nation are essentially pricing ourselves out of the
industrial market. Mechanisms such as greenhouse gas rules,
regional cap-and-trade programs, renewable energy standards and
other permit battles are creating an environment where
affordable energy, the lifeblood of industry, is becoming a
rare commodity. For example, I modeled a facility that would
recycle a million tons of steel and I looked at it in areas
that had a renewable energy standard versus areas that had no
renewable energy standard, and the difference in electrical
cost was $52 million a year. As I presented that to the people
in that particular State, I asked where we would build that
facility, and they said not in our State. That is why you see
industry moving to areas that have affordable and abundant
energy.
It looks like I am about out of time. We have something
said about a permit that was recently issued to Nucor. I will
tell you that we did receive a permit for a significantly
diminished project versus the $2.1 billion we were going to
invest. That permit, however, for that project, which will be
phase 2, is still not fully issued. It is stayed pending some
further actions. Thank you for your time.
[The prepared statement of Mr. Rowlan follows:]
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Mr. Whitfield. Thank you, Mr. Rowlan.
At this time I recognize Mr. Pearce for 5 minutes, and Mr.
Pearce is Director of Manufacturing for FMC.
STATEMENT OF JAMES PEARCE
Mr. Pearce. Mr. Chairman, Ranking Member Rush and members
of the committee. My name is Jim Pearce, and I am the
Manufacturing Director for FMC's Alkali Division, and I thank
you for holding the hearing on this important topic.
FMC is a diversified chemical company manufacturing
products for the food and pharmaceutical industries, for
lithium batteries and energy storage. Our FMC products are used
in a wide range of industrial usage and new applications to
improve the environment.
In Green River, Wyoming, where I live and work, we are the
world's largest producer of sodium carbonate, better known as
soda ash. The largest use of soda ash is in glass
manufacturing, including food, juice, beer and wine containers,
fiberglass, and flat glass for autos, houses, and buildings. It
is also used in a number of household products such as a water
softener, and it is the primary ingredient in powdered home
laundry detergents. In Wyoming, we produce soda ash from
naturally occurring trona ore that is mined from underground
deposits. The four companies that comprise the so-called trona
patch in Sweetwater, Wyoming employ over 2,100 people and
account for roughly 90 percent of the domestic soda ash
production in the United States and 25 of total global soda ash
production. In addition, there are some 100 dockworkers in
Portland, Oregon, and we estimate an additional 8,300 jobs
nationwide that are dependent on our industry.
Mr. Chairman, today American soda ash production is one of
the good news stories in manufacturing. Our industry is a prime
example of how government trade and lands policies can work to
help sustain a U.S. manufacturing base. At FMC, we have
improved our energy efficiency of our soda ash operations by 10
percent over the past 10 years, and as an entire company we
have met our commitment to the Chicago Climate Exchange Program
reducing our greenhouse gas emissions by 10 percent from 2003
to 2010. For FMC, energy efficiency simply represents smart
business.
The current U.S. approach to regulating greenhouse gases
not only fails to incentivize us to achieve greater energy
efficiency, but over time it may lead U.S. natural soda ash
producers to lose business to our off-shore rivals, mainly the
Chinese, who produce their soda ash synthetically. Synthetic
soda ash generates an average of 30 percent greater greenhouse
gas emissions per ton than does soda ash mined from natural
resources.
Mr. Chairman, our jobs growth in the natural soda ash
industry is fueled by exports. The U.S. natural soda ash
industry contributes over $875 million in surplus to the
overall U.S. balance of trade, and our export sales have grown
at 6\1/2\ percent per year over the last 28 years. This
represents a significant contribution to the President's goal
of increasing U.S. exports. It also contributes to job growth.
FMC recently announced that we will be adding 100 new jobs in
Green River as a result of export growth, directly exports.
Domestic soda ash producers export 52 percent of what we
produce, 52 percent. That means that one of our every two jobs
is directly attributable to export sales.
Keeping our lead is not something that we take for granted,
nor has Congress. For example, the Congress saw fit to reduce
the royalties that we pay on soda ash, realizing that the
export increase would result in higher Treasury revenues, yet
the pressure to remain competitive continue to grow. As an
example, in 1990 China imported about 1 million tons per year
of soda ash. Today, they are the world's largest producer of
soda ash and export about 2.5 million tons per year.
We have serious concerns about our future and our
competitive position if not required to make non-economic
decisions based on domestic regulations that our international
competitors do not have to comply with. We do not understand
why U.S. manufacturers should be required to make costly
changes when less-efficient and higher greenhouse gas-emitting
foreign competition does not.
A Southeast Asian glass manufacturer will not buy from a
U.S. soda ash producer whose prices are high simply because of
U.S. regulations. Rather, they will buy from the lower-cost
foreign competition that produces more greenhouse gas
emissions.
We ask Congress to take the long view on this matter and
understand that acting in isolation may place the domestic soda
ash industry at a significant competitive disadvantage while
increasing the overall greenhouse gas global emissions. We
would hope that Congress would fully debate the energy policies
and drive energy efficiency in a way that not only maintains
jobs but grows them along with exports.
Thank you very much for this opportunity.
[The prepared statement of Mr. Pearce follows:]
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Mr. Whitfield. Thank you, Mr. Pearce.
Mr. Cousins, you are recognized for 5 minutes, of Lion Oil
Company.
STATEMENT OF STEVE COUSINS
Mr. Cousins. Chairman Whitfield, Ranking Member Rush,
members of the subcommittee. My name is Steve Cousins. I serve
as Vice President of Lion Oil Company. I am a chemical engineer
and I have spent my 33-year career at Lion Oil.
My company's survival and our employees' jobs are
threatened by the Environmental Protection Agency's moves to
regulate greenhouse gas under the Clean Air Act. We believe
these actions by the EPA are contrary to the plain wording of
the Clean Air Act, are unwise and endanger America's economic
and national security. This is why it is so important that you
approve the Energy Tax Prevention Act of 2011 to stop EPA from
moving forward with its regulations.
Lion Oil is in El Dorado, Arkansas. We have been in
business for 88 years. We produce 80,000 barrels a day of
gasoline, diesel and asphalt. We sell to customers in seven
States, and we have 600 people at our unionized El Dorado
plant. We employ indirectly approximately 1,800 other people
that support our company. We are in rural Delta County, where
unemployment runs about 10 percent.
I can give you one personal example of how EPA's current
regulatory path has already inflicted real pain on the people
in our small town. Lion Oil undertook a major expansion,
several hundred million dollars, starting in 2007. The
projected created 2,000 construction jobs in a town with only
20,000 people in it. It was a real shot in the arm for our
economy. Unfortunately, economic risk prevented us from
reaching our goal. It left us with a much smaller project that
provided much fewer jobs. The uncertainty and the potentially
prohibitive costs associated with both at that time cap-and-
trade legislation and also EPA's looming greenhouse gas
legislation were critical factors leading us to delay
completion of this expansion.
Ironically at the very same time construction jobs were
being terminated in El Dorado, Arkansas, in India, more than
75,000 workers were embarking on a 3-year project to build a
brand-new state-of-the-art refineries 15 times larger than our
plant. It is designed purely for export purposes. Every drop of
gasoline and diesel they produce is going to end up in the
United States or the European Union. And while our Arkansas
union workers average over $23 an hour in wages, in India those
same workers make about $5 an hour.
It is going to take a crystal ball to determine exactly how
the EPA enforces efficiency standards on refineries. We think
that that is a likely thing we heard the Administrator testify
to, and it sounds like a great idea but it sets up a scenario
that we see where a small plant like ours is compared to plants
five to ten times our size. Economies of scale always favor
larger plants, the same way a 747 airliner uses a lot less fuel
per passenger mile than a Piper Cub because it is larger and
can be designed at far higher efficiency standards. Our plant,
if we are held to the largest plants in the world to the same
efficiency standards, then there is no cost that will allow us
to achieve this. It would be out of reach and it will put us
out of business. EPA has traditionally not shown the kind of
flexibility that you would have to have to allow for those
differences.
In spite of our alarm at EPA's current path, Lion Oil is
not in favor of turning back to the clock on environmental
progress. We are very proud of what we have done. Since 1996,
we reduced emissions from our facility by 73 percent while
actually increasing plant throughput but it has come at a very
high cost. Expenditures at our small facility has topped $200
million in that time period in new environmental equipment with
more than $19 million in increased operating costs. These costs
are for the most part things that foreign refineries do not
have to bear, and while many of these improvements offer real
tangible environmental benefits, that is not true for EPA's
plan to regulate greenhouse gases. Reducing U.S. greenhouse
gases unilaterally, which is all EPA has the ability to do,
will not reduce global concentrations of greenhouse gases at
all, not significantly, and will most likely result in the
export of U.S. jobs to countries not interested in greenhouse
gas limits. This is exactly why the EPA does not need to be in
the greenhouse gas regulation business.
Under the Energy Tax Prevention Act of 2011, our elected
representatives in Congress will have the ability to create a
balanced and workable energy policy that does not disadvantage
American workers. Thank you.
[The prepared statement of Mr. Cousins follows:]
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Mr. Whitfield. Thank you, Mr. Cousins.
At this time I recognize Mr. Carter for 5 minutes.
STATEMENT OF LONNIE CARTER
Mr. Carter. Chairman Whitfield, Ranking Member Rush and
members of the subcommittee, my name is Lonnie Carter and I am
the President and Chief Executive Officer of Santee Cooper, the
South Carolina Public Service Authority. While I am currently
serving as the Chairman of the Board of Directors of the
American Public Power Association, my comments and presence
here today solely represent those of Santee Cooper.
Santee Cooper has been a resource for improving the health,
welfare, and material success of the residents of South
Carolina. Santee Cooper is guided----
Mr. Upton. Excuse me. Is that----
Mr. Whitfield. Is your microphone on?
Mr. Carter. It has got a little green light that says it is
on. Is that better?
Mr. Whitfield. That is better. Thanks.
Mr. Carter. It may be that slow southern accent that is
slowing you down.
We are still handling our mission for improving the quality
of life for the people of South Carolina by providing low-cost,
reliable power and water to our customers while being good
environmental stewards. As South Carolina's State-owned
electric and water utility, we have served 2 million customers
either directly or indirectly. We are accountable for keeping
electricity affordable and the lights on.
Our industry is at a time of unprecedented change and
challenge, the likes of which I have not seen in my 28 years in
this industry, bringing with it uncertainty and high cost to
customers. I am very concerned about the many proposed EPA
regulations and what they may mean in the short and long term.
As a public power entity, we have no shareholders to share the
cost of regulations. We are literally where the rubber meets
the road. We are the State's leader in renewable energy with
197 megawatts of renewable generation already online or under
contract. They are voluntary business decisions that
successfully balance low cost, reliability and care for the
environment.
Santee Cooper has been a leader in installing environmental
control technology and in fact already reduces nitrogen oxide
by over 90 percent and sulfur dioxide by as much as 90 percent
through SCRs and scrubbing at our generating stations. We
launched a $113 million comprehensive energy efficiency
campaign for our customers in 2009. We are also a leader in
this Nation's reentry into the nuclear energy arena on tap to
build two new nuclear facility in 2016 and 2019 with our
partner, SCANA.
If I were not here today, I would be at an economic
development announcement. One of our largest industrial
customers, Showa Denko Carbon, Inc., is announcing a multiple-
hundred million dollar investment to expand their facility.
This project will create approximately 100 new jobs. Here is my
point. By far the biggest concern going forward with this
project is the uncertainty created by EPA's greenhouse gas and
non-greenhouse gas regulations. This example highlights the
issues with greenhouse gas regulations. The proposed
regulations will result in higher costs and greater uncertainty
for my customers.
EPA also announced its desire to address greenhouse gases
for the power sector through new source performance standards
that will set emission guidelines for existing facilities.
There is currently no off-the-shelf technology available to
address greenhouse gas emissions at a commercial scale, making
it different in like and kind from other emissions regulated
under the Clean Air Act. New construction projects will likely
be significantly delayed because there is no clarity in how to
address greenhouse gases and PDS permits. EPA's failure to
provide the necessary tools, information and direction will
lead to permits being delayed and complex legal challenges to
permits.
The Clean Air Act simply is not designed to address
greenhouse gas emissions. The policy to limit greenhouse gas
emissions should be set by Congress. Setting a path forward
regulating greenhouse gas emissions under the Clean Air Act
would stifle an already slow permitting process, raise costs,
limit economic development and industrial growth around our
country at a time when we need jobs the most.
EPA also plans to adopt numerous new rules over the next
few years including coal ash, maximum available control
technology standards, cooling water intake rules, air quality
standards for ozone, lead and particulate matter. Individually,
they represent sizable cost impacts. Together, they could be
enough to significantly curtail the economic development and
force many premature closings of low-cost, reliable power
facilities that keep our Nation running.
I support Chairman Upton's proposal that would remove
regulation of greenhouse gases from Clean Air Act. The secret
to success is a balanced and thoughtful approach that factors
in the cost impacts of these proposed regulations to customers.
Thank you for this opportunity and for your attention, and
I am happy to answer any questions you may have.
[The prepared statement of Mr. Carter follows:]
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Mr. Whitfield. Thank you very much.
Ms. Blaisdell, you are recognized for 5 minutes.
STATEMENT OF BETSEY BLAISDELL
Ms. Blaisdell. Thank you. Good afternoon, Chairman
Whitfield, Ranking Member Rush and distinguished members of the
subcommittee. I appreciate the opportunity to testify at
today's hearing. I am here on behalf of the Timberland Company,
which produces boots, clothing and gear for the outdoors.
I am also here on behalf of BICEP, which stands for
Businesses for Innovative Climate and Energy Policy. We are a
group of major consumer household brand companies such as Nike,
Starbucks, Levi Strauss and Co., Best Buy, Target, Symantec,
Gap, Aspen Ski Company. Timberland and the other BICEP
companies believe that we need strong energy and climate
policies to protect our supply chain, ensure market certainty
as well as to help create jobs, level the playing field among
businesses, enhance economic development and ensure global
competitiveness as we move into the future.
While we prefer congressional action to executive branch
regulation, the latter is necessary when Congress leadership is
lacking. Current EPA regulations as well as those under
development would help protect our economy as well as human
health and the environment.
Mr. Chairman, we couldn't agree more with a couple of
statements you made in your press releasing highlighting your
premises for introducing the legislation that is the topic of
today's hearing. That is, number one, Congress, not EPA
bureaucrats, should be in charge of setting America's climate
change policy, and secondly, a 2-year delay of EPA's cap-and-
trade agenda provides no meaningful certainty for job creators,
fails to protect jobs and puts decision-making in Congress on a
critically important economic issue past voters and the
election year.
Indeed, Congress should be setting America's climate
policy, and the 2-year delay would create more uncertainty and
lead to other problems, as you correctly point out. I will come
back to these points in a moment.
You are probably wondering why Timberland and the other
BICEP companies care about climate and energy policies. We care
because our supply chains are affected by current and projected
climate impacts while materials for Timberland products as well
as Levi and Gap jeans, Nike Sneakers, Starbucks coffee
plantations, they all depend on water. If there is less water
due to the projected climate change impacts, we all struggle to
produce our products and meet the demands of our consumers and
we will continue to suffer as weather events grow in severity
and frequency, which interrupt our ability to move products to
consumers. This costs us both time and money. Moreover, and
this is very important, our employees and consumers are
demanding that we take actions to reduce greenhouse gas
emissions.
For a global company, addressing climate change is no small
task. We need policies hat will create long-term market
certainty that parallels our planning timelines. I realize some
entities want no action at all. However, many more companies
recognize that we need to act to address this critically
important economic issue we are facing right now, and acting
sooner rather than later is more prudent and cheaper in the
long run and will help avoid the worst potential projected
impacts and hopefully help avoid more costly scenarios down the
road that might occur if we do nothing in the near term.
Failure to act would be more costly to our businesses and
consumers down the road. Thus, for Timberland and other BICEP
companies, acting to address climate change is a business
imperative.
Timberland is taking steps to be a leader in
sustainability. In 2006, we actually voluntarily capped our own
greenhouse gas emissions. Since then we have reduced our
emissions for our facilities and operations by more than 40
percent, which has saved us over $1 million a year, which is a
significant savings for a company like ours during this tough
economy. Investing in renewable energy in States like
California has proven to be an effective hedge for rapidly
rising utility costs. Energy efficiency in our corporate
facilities and stores has cut energy consumption by more than
30 percent with a payback of under 2 years, usually under one.
Nutrition labels on our product communicate our progress to
consumers. These labels combined with Earthkeepers footwear,
which is designed to have a smaller climate impact, have helped
drive remarkable growth while many of our competitors have
struggled to survive.
In your home State of Kentucky, Mr. Chairman, after several
years of conversation with the local utility, we finally
negotiated a deal to source electricity from a certified small-
scale hydropower facility on the Kentucky River. We pay a
premium for that power, but the benefits far outweigh the
costs. Our climate impact is dramatically reduced and the local
community benefits from having an emissions-free renewable
source of power that is a scenic learning lab for children in
and around Danville.
While Congress could be creating America's climate policy
and while most businesses prefer this route, because Congress
has failed to do so, we must fall back on EPA's authority and
regulations. Preventing EPA from exercising its authority or
rolling back any of its actions would cost the economy in human
health in terms of illness and often results in lost work days
and more. More specifically, in 2005 alone the Clean Air Act
protections helped avoid 13 million lost work days, thereby
helping maintain our Nation's economic productivity.
On the second point in your press release, again, we agree,
a 2-year delay on EPA's regulation of greenhouse gas emissions
would enhance uncertainty in the marketplace and hinder job
creation as well as delay critical decisions that Congress
should in fact be making. So rather than going after EPA's
ability to regulate including repealing a number of its current
actions, Congress should act responsibly and develop sound
energy and climate policy. Some of America's largest businesses
stand ready to work with you, to work with Congress to develop
responsible policies in this area. In lieu of such action,
however, EPA must be allowed to do its job, and let me
reiterate, we would like to be here. Many U.S. businesses
including the BICEP companies in fact do prefer EPA regulation
to no protections at all, as I previously mentioned.
I look forward to constructive policy debates moving
forward that focus on the best ways in which businesses can
work with you to develop sound energy policies, policies with
which many business would resoundingly agree. Let us work on a
bipartisan basis to produce sound energy policies we can all be
proud of and which virtually everyone on and off Capitol Hill
recognize will help move us toward a better path for job
creation, economic growth and global competitiveness.
Thank you, Mr. Chairman.
[The prepared statement of Ms. Blaisdell follows:]
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Mr. Whitfield. We have two votes on the House floor. We
have about 3 minutes left to vote, so we are going to go over
there. We are going to take a break and hopefully be back by
2:00 and then we will get to the questions and then we will go
right to the third panel. So why don't you all go have a glass
or lemonade or something.
[Recess.]
Mr. Whitfield. I would like to call the hearing back to
order, please, and I am very sorry you all had to wait a little
bit longer while we finished these votes, but I want to thank
you for your testimony, and I will start off with questioning
here and then we will go on down the line.
First of all, Mr. Rowlan, I just want to follow up one
thing. You mentioned something about $52 million a year in
additional costs in renewable mandate States versus non-
renewable mandate States. Would you clarify that for me one
more time?
Mr. Rowlan. I was speaking to a business group, and I was
showing the impact of a renewable energy standard on their
utility rates, which is something that concerns us
significantly.
Mr. Whitfield. Right.
Mr. Rowlan. Economical power is the lifeblood of industry,
and I looked at several northeast States and some other States
scattered throughout the country that had an RES standard, and
then I compared that with, I think it was South Carolina and
Arkansas without an RES standard, took the average commercial
rate that we would have been charged, and the difference from
the high end to the low end was $52 million annually.
Mr. Whitfield. Wow.
Mr. Rowlan. And that is just for the average amount of
power for what we would be considered a medium-sized facility
for us.
Mr. Whitfield. Well, I know in Kentucky we do not have a
renewable mandate, and our electricity rates are around 7 cents
per kilowatt hour, which is pretty good. But you point out a
good issue because the key for the United States and our
growing economy is to maintain a global competitiveness, be
competitive in the global marketplace, and if we unilaterally
start adopting some of these rules like Ms. Jackson has on
greenhouse gases, which even she admitted is not going to have
any dramatic impact on greenhouse gases, and other countries
are not taking any action, so it is really putting us at a
disadvantage.
Ms. Blaisdell, I know that you support her actions, and you
came up and we talked a little bit about Danville, Kentucky. Do
you all have a plant in Danville, Kentucky?
Ms. Blaisdell. We have a distribution center.
Mr. Whitfield. Oh, a distribution center. How many plants
do you all have in the United States?
Ms. Blaisdell. Are you talking about how many facilities or
how many----
Mr. Whitfield. Where you actually make the product.
Ms. Blaisdell. We do not own a manufacturing plant in the
United States. Most of the products that we manufacture come
from factories we outsource from.
Mr. Whitfield. From which countries?
Ms. Blaisdell. All over the world. We do source from the
United States as well.
Mr. Whitfield. Oh, okay.
Ms. Blaisdell. We just don't own any in the United States.
Mr. Whitfield. Oh, okay. Well, time is running out here,
but I just want to summarize in my view what Ms. Jackson said.
She placed a lot of emphasis on the importance of certainty,
and she also placed a lot of emphasis on being reasonable, and
I really find myself puzzled by that because she also said
really there is no technology available to control greenhouse
gases, and then she said so the only thing we can do is that we
can deal with efficiency, and then our friend Mr. Doyle from
Pennsylvania said well, that seems perfectly reasonable, but in
my view, companies are going to try to be as efficient as they
can be in order to compete in the marketplace, and basically
what we are doing here is, we are having government bureaucrats
go in and say this is what you need to do to be efficient. And
even if the State implementation plan or State enforcers say
you do this, this and this to be efficient, there is not
anything to preclude EPA from coming back and overruling them
or changing it or whatever. And then you get to under the
preventing significant deterioration the best available control
technology, and it is my understanding that the State
implementers or State regulators could conceivably even require
you to switch your fuel; instead of coal or oil or natural gas,
whatever, we want you to use wind power, that there was not
anything in there that would prohibit that.
And I just find it almost impossible to believe that she
would refer to that as being certain, there is certainty here,
and so the business people like that. I mean, the real issue
is, we have a high unemployment rate. We are trying to compete
in the global marketplace. We do want certainty, and in my
view, there is not any way--at least she did say this. She said
we have to have coal, for example, and natural gas and nuclear
and all of that because as I said in my opening statements, our
energy demands are going to double by the year 2035. And so I
am assuming you all would agree with what I am saying. Ms.
Blaisdell may not agree. Yes, sir.
Mr. Rowlan. I will give you a real interesting example. We
heat our steel up to roll it into a shape, and that is called a
reheat furnace, and the Clean Air Act BACT for the burners in
that is what is called reduce NOx or low
NOx burner, which requires us to actually be less
efficient. We actually limit the heat on it so that we create
less NOx. So we are using more energy in order to
keep NOx down. As we get into a greenhouse gas rule,
are faced with the exact opposite of that. We are tied up in,
do you raise NOx so that you lower CO2 or
do you raise CO2 so that you keep NOx
down. And that is the paradox that we are in.
We also are caught up with that in CO, our CO emissions.
Typically we put some oxygen with them as they come out of our
furnace and convert them to CO2 so now if we limit
our CO2 by not putting the oxygen in and burning it
off afterwards, we are going to raise our CO, which is a
criteria pollutant. So there is a lot of really difficult
questions that would have to be asked if this were to go
forward under the Clean Air Act, and frankly, I don't think
some of the people are prepared to give us answers on it or
make the decision.
Mr. Whitfield. Right. Well, I agree with you.
Mr. Rush, I will recognize you for 5 minutes.
Mr. Rush. Thank you, Mr. Chairman.
Attorney General Abbott, first of all, I want to
congratulate you on some of the standards and your activities
and your accomplishments as it relates to alternative energy. I
understand from your testimony that your State is number one in
the use of wind energy, and I certainly want to congratulate
you and your State for those efforts. I know that you have a
cheerleader here in Mr. Barton and so I am not going to
congratulate you too much because I don't want to take some of
his thunder away from.
Suffice it to say that in spite of scholarly debates over
the proper standards of judicial review of agency action or
inaction under section 706 of the APA, in light of the Chevron
Doctrine, the federal courts including the Supreme Court have
been deferential to an agency's statutory interpretation where
those interpretations are reasonable. This Chevron level of
deference exceeds even the level of deference an appellate
court must accord to trial courts under the de novo standard.
De novo can be triggered when trial courts interpret laws like
the Clean Air Act. Can you explain how the Supreme Court, that
the outcome is wrong in the Massachusetts v. EPA decision? Were
they deferring to the EPA's interpretation? Can you explain why
and how the Supreme Court got it wrong?
Mr. Abbott. Will I explain how the Supreme Court got it
wrong?
Mr. Rush. Yes, your interpretation, from your point of
view, how is the Supreme Court's decision wrong?
Mr. Abbott. Well, I think the Supreme Court decision is
wrong because I don't think that it requires the EPA to
regulate greenhouse gases but the fact of the matter is, I
think under the Supreme Court's decision, it still did not
mandate that the EPA must conclude that greenhouse gases pose
an endangerment and it still provided certain other latitude
for operating room for the EPA to operate as has been discussed
in testimony throughout the course of the day.
Mr. Rush. So are you saying that they were wrong because
they did not mandate it? Is that what is wrong with the Supreme
Court decision?
Mr. Abbott. Well, yes.
Mr. Rush. The reason why I ask that question is because you
say on page 7 of your testimony that in Massachusetts v. EPA,
the Supreme Court said it need not and does not reach the
question whether carbon dioxide is the kind of air pollutant
the EPA must regulate under the Clean Air Act, but my copy of
the Supreme Court's decision says something a little different.
I will bring your attention to section 7, paragraph 2 on page
32. It says, ``In short, the EPA has offered no reasoned
explanation for its refusal to decide whether greenhouse gases
cause or contribute to climate change. Its action was therefore
arbitrary, capricious or otherwise not in accordance with
law.'' This is the matter that I am referring to. ``We need not
and do not reach the question of whether on remand EPA must
make an endangerment finding or whether policy concerns can
inform EPA's action in the event that it makes such a
finding.'' So you said that they did not and they are saying
something altogether different.
Mr. Abbott. Actually what I am hanging my hat on is that
very sentence that you read, and I may have articulated
inappropriately but what I meant to articulate is exactly word
for word what that sentence says.
Mr. Rush. OK. All right.
Mr. Abbott. And that is that they basically don't reach the
question whether or not the----
Mr. Rush. But you conclude that----
Mr. Abbott [continuing]. EPA must----
Mr. Rush. But you are concluding that the Supreme Court was
somehow wrong? I don't understand. I am trying to----
Mr. Abbott. I disagree with the Supreme Court's ruling but
it is the Supreme Court's ruling, and so we must operate under
it.
Mr. Rush. Thank you.
Mr. Rowlan, on Friday EPA--no, that is quite all right, Mr.
Chairman. I yield back.
Mr. Whitfield. I recognize Mr. Upton of Michigan for 5
minutes.
Mr. Upton. Thank you again, Mr. Chairman. I regret I wasn't
here for many of your presentations. We have another
subcommittee that is meeting at the same time and so a number
of us were there, and as you know, we had votes on the House
floor as well.
In the previous panel, I talked about the impact on
Michigan with the job impact. In fact, there has been
independent study that showed that Michigan's GDP would drop by
$18 billion, destroy 96,000 jobs, reduce household incomes by
nearly $1,600, and the concern that many of us have is if we
allow EPA to pursue these regulations, we would have added
cost. We heard from your testimony in terms of the impact on
you all but I just wonder if you can summarize for me from your
individual and somewhat unique perspective, I know it will be
tougher for Illinois Farm Bureau because I don't know where
those farmers--you are not going to go someplace else, you are
going to keep the land there in Illinois, I would imagine. But
as it relates to your industry, if these regulations are
imposed, where do you think things are headed for your
particular industry as it relates to the jobs that are
provided? Are they going to go to India and China? Are they
just going to close down? What is your individual opinion in
terms of what will happen to the groups of similar industries
as it relates to us having these regulations and not having
them in other places around the world?
Mr. Alford. Yes, sir. There is definitely going to be a
transfer of wealth. I think there is a national security issue
here where we Americans are number one in the world
economically now but we could go to sixth, seventh, eighth, or
ninth, and if we go to ninth, we are vulnerable to new enemies
who look at us as someone who could be taken over, and I think
we are at a fork in the road here. We better take the right
way, and I think the EPA view or attitude towards the American
worker is that of a pawn on a chessboard: expendable and no
need to worry. I think that is a terrible attitude.
Mr. Rowlan. I would say that it is already happening. I
hear a lot of people ask for examples of companies going
overseas. I explained it this way one time to some economic
development people when EPA said that non-attainment would not
impact them, and EPA said we have never heard of a company
picking up and leaving an area because it was non-attainment,
and I said that is because you don't even make the first cut.
You are cut out and you are excluded, and that is what this
lack of decisiveness and this constant 2 years, 1 year, when is
this coming, when is this rule hitting, when is PM 2.5, when is
ozone. That constant barrage causes you to take your capital
and move someplace where you have got a level of certainty.
This facility that I have worked on in Louisiana, in the time
it has taken me to not completely get a permit, a full facility
of that size has been constructed, permitted and is operating
in China.
Mr. Cousins. When I first started working in the refining
industry, there were about 350 U.S. refineries. Today there are
about 150. There hasn't been a single refinery built in this
country in 30 years. There have been many built in the Pacific
Rim, China, India. I mean, there is no guesswork. That is what
is going to happen.
Mr. Carter. I would turn your attention really to two
areas. One is, as I have had the opportunity to meet with CEOs
in a class actually for a weeklong class where the majority or
the vast majority, out of 25, I think only six of us were U.S.
citizens, which probably should be very telling in itself, and
one of the things I learned from that group, much to my dismay,
was just how they look down on us and when they look at making
investments because of our permitting process and the fact that
is lengthy and litigious and very poorly defined as it relates
to almost every aspect of the way you permit a new plant, which
makes us very uncompetitive, and what I have put in my
testimony today is just another example of that, not just
limited to what we deal with with EPA.
A good solid example as it relates to what we are dealing
with here is the issue over biomass. As I indicated in my
testimony, we have contracted for a number of biomass
facilities but they are having difficulty getting financing for
those projects because they don't know what the permitting
requirements are going to be for their facilities. Now, that is
real. That means those jobs aren't going forward.
Mr. Upton. And I know my time is expired so that just means
why we need a real decision which this draft legislation does
versus a simple extension where you sit on pins and needles. I
yield back my time.
Mr. Whitfield. Mr. Inslee for 5 minutes.
Mr. Inslee. Thank you. Mr. Rowlan, thank you for being here
with Nucor. We have a facility in Seattle. You run a very
efficient business. You have found ways to make steel with
great efficiencies. I will compliment you on that, and that is
all this proposed regulation does for power companies was to
ask them to be efficient like Nucor has been, the kind of
decisions you have made to make cost-effective investments in
efficiency. You have done that at Nucor. All this regulation
does is ask utilities to do the same thing. That is why eight
major utilities wrote a letter to the Wall Street Journal last
month urging the adoption of these regulations so that they
could have certainty so that they could move forward.
I want to talk about this Dirty Air Act and bring it to
real life. I want to show a brief video of an 11-year-old young
lady named Megan Foster from North Carolina. She is a child
with asthma who is a very, very fast runner but has difficulty
when her asthma is triggered, which we know can be done by
ozone. Can we just play this clip briefly, and then I want to
ask you gentlemen a question.
[Video shown.]
Mr. Inslee. Thank you. Now, the Environmental Protection
Agency pursuant to law and the U.S. Supreme Court and common
sense has fulfilled their obligation to people like Megan to
try to protect her and millions of other kids from pollutants
that exacerbate asthma, and we are here today to consider a
bill that would eliminate the ability of the Environmental
Protection Agency to help children like Megan Foster, and I
would like to know about your views and what science you can
present to us about this issue. The EPA has determined that the
science shows that pollutants, carbon dioxide and a variety of
other climate-changing gases, have the capacity to injure human
health including gases that exacerbate asthma including
exacerbating ozone conditions.
So I just want to quickly go down the road and ask you if
you can present to this committee a single peer-reviewed
scientific journal that shows that these gases that are subject
to this regulation do not result in damage to human health
associated with climate change, and if you give us a yes or no,
if you say yes, I am going to ask you what it is. But let us
just first go down yes or no. Mr. Abbott, do you have a single
peer-reviewed study like that?
Mr. Abbott. I haven't conducted that research.
Mr. Inslee. Do you know of any, anywhere in the world?
Mr. Abbott. I haven't looked into it.
Mr. Inslee. Thank you. Mr. Alford?
Mr. Alford. I haven't looked. Don't know.
Mr. Inslee. Mr. Rowlan?
Mr. Rowlan. I am not aware of it.
Mr. Inslee. Mr. Pearce? Thank you.
Mr. Pearce. I'm not aware.
Mr. Inslee. Mr. Cousins?
Mr. Cousins. No.
Mr. Inslee. Mr. Carter?
Mr. Carter. No.
Mr. Inslee. Ms. Blaisdell?
Ms. Blaisdell. No.
Mr. Inslee. Now, I think this is pretty intriguing because
this story gets written like ``he said, she said'' stuff by the
press all the time. He said these gases are bad, these changes
change the climate, she said they didn't, or in this case
``he'' meaning Senator Inhofe. It is time to start writing the
truth about the science on this issue.
You gentlemen that represent the effort to repeal the Clean
Air Act and pass the Dirty Air Act can't produce one single
peer-reviewed scientific journal, and you are asking the United
States Congress to eliminate the ability of the Environmental
Protection Agency to protect kids like Megan Foster. Now, I
think that is preposterous that you would come in and ask us to
do this without presenting some science to us. Now, if you can
find some, you can send it to me. I am interested in it. I have
looked for it, so have the scientists that we have hired to do
this including those at the U.S. Navy, and you know what? They
can't find any because there is none, and I just hope that we
eventually will do what the law requires, which is to follow
science and protect the Megan Fosters of the world and do a
very commonsense thing, which is to do just what Nucor Steel
has done and that is about the efficiencies in the utility
business, and if we do that, we are going to do some good
things.
Thank you. I would yield back.
Mr. Whitfield. I recognize the gentleman from Texas for 5
minutes.
Mr. Barton. Thank you.
I hate to take up too much of my 5 minutes but I have got
to respond to what my good friend from Washington just said.
CO2 is not an irritant for asthma. My good friend
just asked if there was any peer-reviewed science that showed
the negative. There is no peer-reviewed science that shows the
positive, okay? Now, CO2 is a component of ozone,
and ozone is a regulated criteria pollutant under the Clean Air
Act, but if you are intolerant to ozone, you are going to be
intolerant to ozone at one part per billion. If you are not
ozone intolerant, you can be subjected to a thousand parts per
billion and not be affected, and there is just as much
scientific evidence that asthmatics are much more affected by
rat feces and roach infestments in tenements as there is of the
actual air quality. So it may be politically correct to show a
figure of a young, innocent asthmatic child. My son when he was
growing up was asthmatic, so I know a little bit about this
from a personal perspective.
But to use that and then somehow say that what we are
trying to do here in protecting the American economy and
keeping jobs in America is somehow going to hurt the public
health is just flat not true. We are not changing one standard
in the Clean Air Act. We are not changing the definitions of
the criteria pollutants. We are simply rectifying a 5-4
decision of the U.S. Supreme Court that gave the EPA the right
to look at CO2 if they wanted to. The Obama
Administration wanted to. They put out their endangerment
finding, which I think is fatally flawed, and the result is, we
are trying to do the legislative intent which is clarify what
the Clean Air Act actually meant. If Chairman Upton and
Subcommittee Chairman Whitfield want to come back at a later
date and regulate CO2, they will put that bill
before the subcommittee and the full committee. But first let
us make sure that we express the will of the people through the
Constitutional authority that we have on CO2.
Now, I want to go to Mr. Abbott, the great Attorney General
from the State of Texas. You are the chief law enforcement
officer of the state. Is that correct?
Mr. Abbott. Yes, sir.
Mr. Barton. And I know you are not a clean air expert but
you are knowledgeable about it. There are six criteria
pollutants under the Clean Air Act. Is the State of Texas
noncompliant on lead anywhere in the State?
Mr. Abbott. Not that I know of.
Mr. Barton. Are they noncompliant in SO2
anywhere in the State?
Mr. Abbott. Not that I know of.
Mr. Barton. Are they noncompliant on nitric oxide anywhere
in the State?
Mr. Abbott. Not that I know of.
Mr. Barton. Are they noncompliant on carbon monoxide
anywhere in the State?
Mr. Abbott. Not that I know of.
Mr. Barton. Are they noncompliant anywhere in the State of
Texas on particulate matter?
Mr. Abbott. Not that I know of.
Mr. Barton. Now, ozone, they are in non-attainment ozone.
Where are the three areas in Texas that are noncompliant for
ozone?
Mr. Abbott. I am not sure.
Mr. Barton. Well, I do. I know. Houston is in
noncompliance, Port Arthur is in noncompliance, and the Dallas-
Fort Worth area is in noncompliance under the new standard.
Now, under the Clean Air Act of 1992 or 1990, the EPA put out
regulations for air quality that Texas began to comply with,
and since that time Texas has issued over 100 permits to
private industry in Texas. They all got invalidated in December
of this year. Is that not correct?
Mr. Abbott. That is correct.
Mr. Barton. Were they invalidated because they were in
noncompliance for any of these criteria pollutants including
ozone?
Mr. Abbott. No.
Mr. Barton. Why were they invalidated?
Mr. Abbott. Well, they were invalidated because of the SIP
call and FIP calls that were issued by the EPA.
Mr. Barton. So they were invalidated because the EPA
changed their mind or just didn't like the way Texas was doing
things?
Mr. Abbott. They were invalidated because the EPA basically
took over the Texas air permit system.
Mr. Barton. They took over, but they didn't take it over
because we are in noncompliance?
Mr. Abbott. Correct.
Mr. Barton. OK. Has EPA alleged that we are in
noncompliance?
Mr. Abbott. Not that I am aware.
Mr. Barton. I am not aware of that either. So there are two
issues with regards to what is happening in Texas. One is
compliance with the existing Clean Air Act, and we have just
shown that with the exception of ozone in three areas, we are
in compliance. The other is, these new greenhouse gas
regulations. Why has the State refused, or maybe I should say
what has the State of Texas done with respect to the EPA
mandate on these new CO2 regulations?
Mr. Abbott. Well, I can tell you from the legal
perspective. I can't tell you from the TCEQ perspective.
Mr. Barton. Well, tell me from the legal perspective.
Mr. Abbott. From the legal perspective, there are basically
six different rulings that were made by the EPA, and as a
result there are six different legal actions filed by the State
of Texas in response. One involves the endangerment finding.
Another involves the tailoring rule. Another involves the
timing rule. Another involves the tailpipe rule, and one
involves the SIP call and the sixth would involve the FIP call.
Mr. Barton. I will ask the rest of my questions in writing.
Thank you, Mr. Chairman.
Mr. Whitfield. Yes, sir.
Mr. Green, 5 minutes.
Mr. Green. Thank you, Mr. Chairman. I would like to welcome
our panel and particularly our Attorney General. You will all
have a little different questions from this side of the aisle
but you at least have the same Texas accent that Joe and I
have.
I want to welcome you to the committee, and we heard, the
topics we are discussing today at the hearing are complicated
and these are a wide range of views. Some of our views are
similar, and neither of us believes that the EPA regulation of
greenhouse gases is the right solution to our energy and
climate change challenges. We are both interested in improving
the economy and creating jobs, specifically keeping those jobs
in Texas. I would like to talk to you about an area where our
views may diverge a little bit. On December 23rd, EPA issued an
interim final order that allowed EPA to assume responsibility
for the Texas air permit program with regard to greenhouse
gases. EPA has stated it took the action because under your
guidance, the State of Texas indicated it would not include
greenhouse gas and emissions pollution in air permits. Is that
correct? Was it only greenhouse gases?
Mr. Abbott. Would you state the predicate again?
Mr. Green. Texas took this action and indicated it would
include greenhouse gas emissions pollution in the air permits.
Mr. Abbott. Right.
Mr. Green. And it is my understanding that Texas is the
only State that refused to modify its air program. Is that
true?
Mr. Abbott. That is my understanding.
Mr. Green. That the other 49 States, including some who are
suing the EPA like Texas is over the endangerment finding, have
taken some action to move forward to comply with the new
requirements.
Mr. Abbott. Well, I can't be clear about what the other
States are doing. Here is my understanding, and that is the EPA
sent out a letter requesting responses from all the States.
Many States responded. Maybe some States said they would go
along. I can't guarantee you that all States responded and all
States said they would comply. Texas is the only State that
made clear that we would not comply with the greenhouse gas
regulations.
Mr. Green. I think, at least our information is the other
49 said yes, they would, and believe me, I explained to people,
we are up here all the time about American exceptionalism
issues worldwide. Come to Texas and we will explain to you
Texas exceptionalism, and that is something we all have.
Mr. Abbott. I could make clear, Texas is not the only State
that is challenging the EPA's greenhouse gas regulations.
Mr. Green. That is true. Yes, there are a number of States
that are filing suit. Given your position, I understand the
consequences would have been if EPA had not assumed
responsibility for these air permits, if Texas wasn't willing
to start it, even though the lawsuit is filed and that is the
way you do it, you go to the courthouse, and for decades the
Clean Air Act has required certain sources to obtain air
permits before construction begins on a new facility. These
permits, called PSD permits, were required to start building.
My question is, would it be legal to build a facility without
one of these permits when the law requires it? So if Texas was
not enforcing it--I have the Houston ship channel. I have five
refineries and more chemical plants than I can count. My
concern was, Texas is not enforcing it. If we wanted to expand
those plants, and thank goodness over the last 15 years most of
the plants have been expanded, that we would not without having
a permit processed whether it is through the State of Texas
enforcing a regulation that they don't agree with and going to
court or the EPA taking over those air permits. Is that
generally what would happen?
Mr. Abbott. Well, I think generally what you are saying may
be true. This is outside my area of expertise. However, what I
think is that had the EPA not issued the SIP and FIP calls, it
is my understanding Texas would have been able to continue on
with the permitting process.
Mr. Green. Well, we will figure that out, but my concern
was that if Texas would not do it--and I have plants that are
always in the process of trying to expand. And you know how
competitive the chemical industry is, for example, that, you
know, if they are trouble with--if they are not going to build
a facility in East Harris County if they are worried they won't
have that permit available, you know, pr they won't be able to
get permission to build it, they would build it someplace else
and ship those chemicals back to us. That is where I don't mind
going to the courthouse. That is what a lot of us did for a
living. I just worry that I don't want to put my plants at a
disadvantage because of the battle between the State and EPA.
Mr. Abbott. Right.
Mr. Green. That is my concern.
Mr. Abbott. I want to make clear that we stand foursquare
with you on that proposition. We want the businesses in your
district as well as the businesses across the State of Texas
not to be at any disadvantage whatsoever. We want to make sure
they have access to the permits they need in order to operate
their business. We want to make sure that we continue to
attract jobs to the great Houston and Texas area but, as you
know. Texas has done a better job of creating jobs than all of
the other States in the country. One reason why we have been so
successful in that regard is because Texas has a more
reasonable regulatory system and has not had to deal with every
evolving changing rule like what they are seeing coming out of
the EPA now.
Mr. Green. I am out of time and I know the Chair is going
to gavel me, but I served 23 years in the legislature, and we
always enforced our clean air permits even when I was there
based on the EPA saying the State of Texas could enforce it. We
always had to jump through hoops from the Federal Government,
you know, 18 years ago and 20 years before that, and I know it
is frustrating but EPA has had that authority over Texas I know
for the last 38 years.
Thank you, Mr. Chairman.
Mr. Whitfield. Mr. Shimkus, 5 minutes.
Mr. Shimkus. Thank you, Mr. Chairman. The full committee is
named the Energy and Commerce Committee, so our focus is energy
issues and commerce issues. The Democrats who want to make this
into a science argument ought to go to the Science Committee.
That is why we have a Science Committee. If they want to debate
science, go to the Science Committee. We want to talk about
energy. We want to talk about commerce. That is why I hold up
my coal miners. One thousand of them in one mine, 1,000 coal
miners in one mine lost their jobs. This is replicated in
Illinois, 14,000, State of Ohio, 35. These are real job losses.
If you want to talk about public health, the worst thing you do
for public health is not have a job and be poor and in poverty.
The best thing for human health is to have a job and maybe a
job that provides health care, although we are attacking that
too in those provisions.
So this hearing is focusing on jobs, and as I laid out in
the previous panel that when you raise energy costs, you hurt
the ability to create jobs and sustain jobs. I do believe in
supply and demand. I do believe that if more capital is
required to produce that electricity that cost gets passed on.
Now, it is curious that Ms. Blaisdell is here, and I have
your testimony, and you are not only here with respect to
Timberland but also BICEP. Is that correct? And BICEP is the
Business for Innovative Climate Energy Policy, so you all like
this climate debate, right? I mean, you are supporting----
Ms. Blaisdell. Sir, we don't like climate change. We are
here to support aggressive legislation.
Mr. Shimkus. OK. Right. So you would have supported Waxman-
Markey, putting a price on carbon and addressing climate.
Ms. Blaisdell. We support addressing climate.
Mr. Shimkus. Great. OK. Now, it is curious that you and
these folks do that because in articles in May 2002, many
companies that are in this Business for Innovative Climate and
Energy Policy, guess where your products are produced? China. I
will quote this article May 9, 2002: ``While companies such as
Gap, Guess, and Ralph Lauren have long farmed out production
overseas in China,'' also Levis they mention here. Now, your
company is not immune from this. In an article by Business
Daily Update, except for your answering to the question, March
27, 2006, article is, ``Unbeknownst to many''--talking about
Timberland--``actually operated 45 factories throughout the
country since the 1990s.'' Forty-five factories throughout the
country, that country being China. So wouldn't it be to your
advantage to force higher utility rates on manufacturers in
this country while taking advantage of low power rates in China
along with low labor rates, along with low environmental
standards? In fact, following up on an article August 7, 2009,
on Timberland, who you represent, ``Two mainland suppliers of
outdoor clothes manufacturer Timberland have consistently
breached environmental regulations, two NGOs said yesterday.''
This is Chinese environmental regulations. You have to be
pretty bad to violate Chinese environmental regulations.
Now, I find it just incredible that you would come here
supporting hard action on climate change, raising the cost of
doing business while your production is in these very same
countries that will never comply, do not pay the same wage
rate, and do not have any environmental standards, and I am
glad that the Minority asked you to come because it highlights
the hypocrisy of this debate, that you can stand here and you
can call for increased regulations and costs while your company
outsources manufacturing and we don't have jobs, and with that,
Mr. Chairman, I yield back my time.
Mr. Whitfield. Thank you, Mr. Shimkus.
Ms. Blaisdell. May I please reply?
Mr. Whitfield. I want to ask unanimous consent that we
enter into the record at this point, these are documents
relating to Mr. Waxman's introducing into evidence the Stephen
Johnson issue on the endangerment finding, and these are the
complete set of documents from the government, and then I
understand Mr. Inslee had a document he would like to enter
into the record.
Mr. Inslee. Yes. Thank you. I just would like to introduce
two documents. One is actually the endangerment finding that
reads, ``Climate change is expected to worsen regional ground-
level ozone pollution. Exposure to ground-level ozone has been
linked to respiratory health problems ranging from decreased
lung function and aggravated asthma to increased emergency
department visits, hospital admissions and even premature
death.'' That is one. The second is this letter I referred to
in my questioning from 1,800 doctors, and the third is
testimony by Dr. Mark Jacobson of Stanford, who presented
testimony in April to the Select Committee that specifically
addressed the health impacts of CO2 on respiratory
illness. Thank you, Mr. Chair, for your courtesy.
Mr. Whitfield. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. Whitfield. At this time I recognize Mr. Walden for 5
minutes.
Mr. Walden. Mr. Chairman, I thank you for that, and I am
going to yield my 5 minutes to the distinguished gentleman from
Texas, Mr. Barton.
Mr. Barton. I thank the gentleman from Oregon, and I will
root for the Ducks at least one time next year because you are
yielding to me.
Mr. Walden. If it is in the BCS, I will especially
appreciate that.
Mr. Rush. Mr. Chairman, let me just ask a question.
Mr. Whitfield. Excuse me just one minute.
Mr. Rush. The previous member made some pretty significant
and strong remarks to Ms. Blaisdell, and she did not have a
chance to respond at all on the record, so I think that she
should be allowed to respond to some of the sharp remarks.
Mr. Whitfield. Do you want to respond, Ms. Blaisdell?
Ms. Blaisdell. Yes, please.
Mr. Whitfield. All right.
Ms. Blaisdell. So my first response would be that
addressing our own greenhouse gas emissions hasn't created
additional costs for our company. In fact, as I mentioned in my
testimony, it saved us over $1 million a year, which makes us
more competitive, and we do employ close to 2,000 people in the
United States, so all those jobs he talked about in China, he
is denying the fact that we actually do employ quite a few
people here and in fact in many of the States that you
represent.
One of the concerns I have about the conversation we have
had so far is that we have talked about the cost of action and
we haven't talked about the cost of inaction, which I why I
believe I am here. Our industry is very different than the
industries represented. There is a significant cost of inaction
in the outdoor industry and for brands whose supply chain rely
on raw materials that we can't necessarily source in this
country, so I would like to bring that to light.
Mr. Whitfield. Well, I would just say that we appreciate
your comments but I think most of us certainly agree with Mr.
Shimkus, that if you are doing work in China and you are
violating environmental regulations in China, to be coming over
here and saying we need stronger regulations is a little bit--
--
Ms. Blaisdell. Sir, I don't understand what violations he
is talking about so I will have to explore what he submitted.
Mr. Whitfield. We will try to get that to you and maybe you
can get back to us in writing about that.
Ms. Blaisdell. I would be happy to.
Mr. Whitfield. Mr. Walden.
Mr. Walden. Thank you, Mr. Chairman. Again to Mr. Barton.
Mr. Barton. Thank you.
Attorney General Abbott, is Texas air quality improved or
diminished during the period since Texas implemented its
flexible permitting program under the Clean Air Act Amendments
as implemented by regulation in 1992?
Mr. Abbott. I don't have the information on Texas health
quality.
Mr. Barton. You don't have information that our air quality
is actually improved?
Mr. Abbott. I thought you said health quality.
Mr. Barton. Air quality.
Mr. Abbott. Absolutely air quality has improved.
Mr. Barton. Significantly?
Mr. Abbott. Significantly, yes.
Mr. Barton. So we have not diminished our air quality under
our permitting program?
Mr. Abbott. I will tell you the information I do have, and
that is the information that as I understand, it was provided
by TCEQ, the Texas Commission on Environmental Quality, as well
as information that we received from the governor's office. One
point is that industrial ozone and NOx have steadily
declined since 2000. Another is that ozone is down 22 percent
while NOx is down 46 percent. Another is that
electricity generators in Texas have the 11th lowest
NOx emissions in the United States. But I think
equally important, and that is without any kind of greenhouse
gas mandates from D.C., Texas on its own has since 2004, no
other State has cut more power sector CO2 output
than the State of Texas. Also, as you know very well, we have
installed wind power at a rate more than any other State in the
United States and I think we would rank either fourth or fifth
of all the countries in the entire world, and, as I understand
it, Texas has one of the two largest absolute declines in
greenhouse gas outputs of any State.
Mr. Barton. I just want the record to show that Texas has
issued all these permits since 1992. They have been in
compliance with the Act. Our air quality has improved yet our
economy has grown, and just arbitrarily here in the last 6
months they have come in and invalidated the existing permits.
We are not talking about new permits under the CO2
regulations, we are talking about existing permits.
Now, specifically, Attorney General, with regard to this
pending legislation, do you support the draft Energy Tax
Prevention Act of 2011?
Mr. Abbott. There are reasons why we think this legislation
is a good idea. First and foremost, in the big picture we are a
Nation of laws, and that is one thing that has separated this
country from all other countries in the world, in fact, made
the United States the envy of all countries in this world, and
that is that we as a Nation base our decisions on the law, not
the whims of different people, and a challenge that the State
of Texas is having with the EPA is that we feel that the EPA is
acting in a way unconstrained by the Clean Air Act passed by
the United States Congress, unconstrained by other laws such as
the APA, and causing industry as well as States to have to deal
with a moving target, and we think that the rule of law is
essential in this country and we want to see the EPA comply
with the rule of law. And along those lines Texas has six
lawsuits on file right now challenging the legality of the
greenhouse gas rules that were created by the EPA.
Mr. Barton. If this bill were to become law, how would that
impact the litigation that the State currently has against the
EPA?
Mr. Abbott. As the Attorney General of Texas, I am here to
tell you that if your legislation passes, it will mean that
Texas will be dismissing those six lawsuits against the EPA.
Mr. Barton. And that is a good thing?
Mr. Abbott. Anything that gets rid of lawsuits is a good
thing.
Mr. Barton. I agree with that.
My last question is to the general panel. If we had to
implement these greenhouse gas regulations which hopefully we
won't but if we did, is there the technology currently on the
shelf to cost-effectively implement the greenhouse gas
regulations as proposed by the EPA?
Mr. Alford. I daresay no.
Mr. Rowlan. No.
Mr. Cousins. For our industry, we looked at the 2008 ANPR
that the EPA released as a guide for possible greenhouse gas
regulations, and we have evaluated every one of those
technologies at various times in the past to do efficiency
improvements. Those things are all cost-prohibitive for us.
Mr. Barton. My time has expired. I again want to thank my
friend from Oregon for his courtesy.
Mr. Whitfield. At this time I recognize Mr. Burgess for 5
minutes.
Dr. Burgess. Thank you, Mr. Chairman, and Attorney General
Abbott, thank you for spending the day with us. I think there
was some--I know it is difficult because the Administrator is
not here any longer but it seems like there was some confusion
when we were talking about the problem that Texas is having
currently with the flexible permitting and her discussion of
regulating greenhouse gases under the Clean Air Act. Those are
two very serious issues but they are separate issues. Is that
not correct?
Mr. Abbott. That is correct.
Dr. Burgess. And currently when I was discussing with her
the report of the Business Roundtable, they pointed out that
this would be one thing that would be extremely deleterious to
Texas. Similar conditions exist in other States and no other
State is being required to perform what Texas is being required
to perform under their removal of the flexible permitting. Is
that correct?
Mr. Abbott. That is my understanding.
Dr. Burgess. And then to the issue of regulation of
greenhouse gases, she is correct that Texas right now is not
proceeding with setting up those guidelines. Is that correct?
Mr. Abbott. That is correct also.
Dr. Burgess. And so as a consequence, the EPA feels it is
necessary for that job to be done, and we can argue about the
rightness or wrongness of that but that is indeed a separate
issue when she says that since Texas wasn't doing its job, the
EPA had to do the job for Texas but that in no way applies to
the flexible permitting process that is going on down in the
Gulf Coast area?
Mr. Abbott. That is correct.
Dr. Burgess. And these are difficult concepts to deal with.
Mr. Barton talked about the air quality issues that have
occurred since the enactment of the Clean Air Act, and while to
be certain there are still significant challenges for us in the
Dallas-Fort Worth metropolitan area, there are challenges in
the Houston metropolitan area. When you look at the overall air
quality, there has been improvement since 1992.
If you look as what has happened to population growth,
particularly in the Dallas-Fort Worth metropolitan area, with
which I am most familiar, you have only got to look at what is
happening with congressional redistricting and the fact that
Texas is going to have four more seats in the next Congress to
understand what is happening to our population in the Lone Star
State. It is exploding. I have the 10th largest congressional
district in the country, 280,000 residents over and above what
I should have with the normal congressional allotment, so it is
a phenomenal development that air quality has improved while
our population has in fact expanded many times over what it was
in 1992. Do you think that is a fair assessment?
Mr. Abbott. Based on information I have, you are exactly
right and that is that air quality in Texas has continued to
improve despite the growing population.
Dr. Burgess. Well, just in your experience in working with
the EPA, is that an easy situation or a difficult situation?
Has the EPA been open to your suggestions and your observations
or is it a closed door and the cake is already baked, we don't
need your input?
Mr. Abbott. For more than a decade, I would say Texas has
had a fairly collaborative, cooperative working relationship
with the EPA. I can tell you that my office directly has been
working side by side with the EPA to hold polluters accountable
and has been quite successful in that regard. It seems as
though over the past 18 months or so the challenges in dealing
with the EPA have escalated dramatically and it has been a lot
more difficult.
Dr. Burgess. And that has just been my observation as well,
and I was wondering if other people were noticing that as well.
Mr. Rowlan, if I could, let me ask you a question, and
again, I appreciate you being here. You are headquartered in my
hometown in Denton, Texas, and we are all so grateful for your
great efforts there. We are grateful for your great efforts
with the University of North Texas and the research program
that you have there. I think you have developed the largest
frame testing machine west of the Mississippi. Is that an
accurate statement? Well, we heard from Administrator Jackson
that there are so many of these things that--and I am a
believer in efficiency, and no one, I think, should be in favor
of wasting energy but can you really capture the return on
investment necessary to do the things that you are going to be
required to do by simply latching on to those increases in
efficiency? Are they going to pay for themselves over time?
Mr. Rowlan. Well, we pursue those continually. We actually
have energy intensity goals within our own company. We are
pursuing improving our efficiency constantly, because if we
don't, we are going to run into problems with our international
competition. There are projects throughout the country, and I
am aware of one steel mill that was shut down, however, for
tenths of a cent per kilowatt-hour. When you consume as much
energy as we do, the cost of energy becomes a huge impact for
us and so as that starts to escalate, we are no longer able to
compete because we are really close to the physical reality of
what we can do with the equipment that we have got and the
technology that presently exists and even the technology that
is coming on now.
Dr. Burgess. Thank you for your answer. I yield back my
time. Thank you, Chairman.
Mr. Whitfield. Mr. Waxman is recognized for 5 minutes.
Mr. Waxman. Thank you, Mr. Chairman. We have heard quite a
bit of criticism of EPA at today's hearing. We have heard that
EPA is out of control and that simple commonsense measures like
requiring newly built facilities to be energy efficient will be
burdensome to the economy. But there are other voices who are
not fairly represented here today. Many in industry believe
that EPA is acting reasonably and taking modest first steps to
combat a serious problem.
On Friday, EPA held the first of a series of five listening
sessions on New Source Performance Standards that it plans to
propose later this year for power plants and refineries. I
think it is worth pointing out that EPA is beginning the
process of crafting these new standards by hearing from
industry. At Friday's session, Eric Svenson of PSEG, a major
utility company, said this about climate change: ``We obviously
would prefer to have seen legislative action but absent
legislative action, we support regulatory action,'' which by
the way is my view.
Mr. Rowlan, were you aware that this major utility supports
EPA's regulation?
Mr. Rowlan. Was I aware that they support regulation?
Mr. Waxman. Yes.
Mr. Rowlan. Yes, I would be aware of that.
Mr. Waxman. Don Neal of Calpine, another utility, said
this: ``Calpine has been a long supporter of EPA regulating
greenhouse gases under the Clean Air Act and certainly the NSPS
is an extension of doing that so we applaud EPA in doing
this.''
Mr. Carter, were you aware that at least one major utility
is applauding EPA's program?
Mr. Carter. Yes, sir.
Mr. Waxman. OK. Well, the public wouldn't have known about
these statements either, because these witnesses weren't
invited to testify. In fact, we wanted these companies to come
and testify but we were told by the Majority that they would
not allow our request to hear from a coalition of businesses
who develop energy-efficiency projects at major manufacturing
facilities like, for example, steel plants. One member of this
coalition recently helped a northern Indiana steel plant
install technology to capture and harness the manufacturer's
waste heat to generate 220 megawatts of power. That is more
clean electricity than all of the solar panels connected to the
U.S. electric grid, and that recycled energy saves the plant
$100 million every year. Since we can't hear this testimony for
ourselves, Mr. Chairman, I would ask that the written statement
of the Alliance of Industrial Efficiency be placed in the
record.
Mr. Whitfield. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. Waxman. Thank you.
Ms. Blaisdell, in your testimony you say that EPA
regulations would help protect the economy. By the way, I heard
earlier in this hearing you were accused by one of my
colleagues on the Republican side of the aisle, that you would
be at a competitive advantage if these EPA regulations go
through. Do you have any comment on that? Would you be at a
competitive advantage if we regulate as EPA is proposing to do
here in the United States?
Ms. Blaisdell. I am not familiar with how we would be----
Mr. Waxman. Press your mic.
Ms. Blaisdell. It is on. I am sorry. I don't know how we
would be at a competitive advantage.
My other concern about his remarks is, he implied that
energy costs drove our jobs overseas, and that is not the case
in our industry, so I want that to be clear for the record as
well.
Mr. Waxman. Well, your company has been abiding by a self-
imposed limit on its carbon pollution, and I would like you to
tell the committee about your company's experience. Have your
investments in efficiency produced cost savings, and if so, do
you think other companies are likely to experience similar
savings?
Ms. Blaisdell. Our initiatives which have involved
investing in renewable energy and in energy efficiency have
saved our company money, over a million dollars a year, which
is significant. We are a $1.4 billion company, so especially
during a tough economy, that has been significant for us. And I
do believe that other companies can benefit by taking a more
critical look. I am sad to say that without leadership from
Congress that many companies just aren't looking hard enough,
and this could help.
Mr. Waxman. And when somebody comes forward to suggest that
maybe we can look harder to save money by doing what is right
in efficiency which would make the company even more
competitive, you are bullied by saying that you are part of
some international conspiracy because you also have activities
offshore. I don't think that is right.
EPA has acted reasonably so far. We have heard from
Administrator Jackson that the Agency plans to continue working
with business to develop commonsense standards. Let us allow
the Clean Air Act to do what it has always done: improve the
air we breathe and make our families healthier while the
economy grows. Thank you, Mr. Chairman.
Mr. Whitfield. Yes, sir.
Mr. Sullivan, you are recognized for 5 minutes.
Mr. Sullivan. Well, I thought it was interesting, Ms.
Blaisdell, that you said that your company did these things
voluntarily, and I think that is great, and you have
efficiencies and everything. That is what these business people
do voluntarily. They do a lot of things like that too. You
weren't mandated to do things, and I think that is the big
difference, and that is what we are talking about here today.
I appreciate all of you coming. I am sure you like the
people in my district in Oklahoma are scared to death about
what could happen to your businesses and the people that you
work for, that you know their families and you know them very
well, and it is frightening.
I would like to ask you, Mr. Cousins, a question. You
mentioned that while you were having trouble expanding your
refinery, in India a refinery was built 15 times larger than
your refinery and it took about 3 years. Could we build such a
refinery in the United States today, in today's regulatory
climate? And how long would the permitting for such a facility
take? You mentioned the Indian refinery took 3 years to build.
Would it take you longer?
Mr. Cousins. Oh, I am not an expert on obtaining permits
but I don't believe it would be possible to permit that
refinery in the United States if you had all the time in the
world, and I would--they have been trying to build a refinery
at least at one time outside of Phoenix. I know that project
has been going on for 10 years. I don't believe they have
permits.
Mr. Sullivan. And we haven't built a refinery in this
country in, what, 30 years?
Mr. Cousins. Over 30 years.
Mr. Sullivan. And we probably need some, don't we?
Mr. Cousins. Well, you would think. Actually we either need
them here or they are just going to keep building them
overseas.
Mr. Sullivan. Have we ever domestically produced oil that
we had to actually send somewhere else to be refined in this
country?
Mr. Cousins. I am not sure if any--we don't drill any oil.
We just buy oil on the market. It could be that some Alaskan
crude was sold. I don't know, but I am not aware of any
significant oil exports.
Mr. Sullivan. Your company has delayed a major project due
to EPA's greenhouse gas regulations. Can you please explain how
this business decision was made? How were the costs of these
regulations calculated?
Mr. Cousins. It is business uncertainty. We went about
halfway through an expansion project of several hundred million
dollars. In the climate of Waxman-Markey at the time and the
fact that even if it was defeated as it was--well, Waxman-
Markey wasn't, but if climate change was defeated, we didn't
perceive the demand or the margins to justify the expansion we
were in, not sure enough to bet our entire company's survival
on it, and the debt load we would have carried would have put
us in that situation. We actually had to terminate the project
at the cost of 14,000 man-weeks of construction that was not
completed in our town, so that is a couple of thousand jobs for
weeks and weeks.
Mr. Sullivan. I will start this with all the witnesses.
What potential EPA regulations coming down the pike are you
most concerned about from a business perspective? General
Abbott?
Mr. Abbott. From a business perspective, what regulations?
Mr. Sullivan. Yes.
Mr. Abbott. Well, the greenhouse gas regulations are the
ones that are posing a huge problem.
Mr. Sullivan. And in Texas, you are hearing that from
everybody, huh?
Mr. Abbott. Well, as I visit with people across the State,
frankly, it is the overall uncertainty that seems to be
emanating from the EPA, not knowing what the standards are
going to be and how to plan for the future.
Mr. Sullivan. Mr. Alford?
Mr. Alford. Congressman, I am also a member of the board of
directors of the U.S. Chamber of Commerce, and I chair the
regulatory affairs committee for them, and this greenhouse gas
business is about 70 percent of the discussion, and I believe
the Chamber has filed a series of lawsuits against EPA
concerning that.
Mr. Sullivan. Mr. Rowlan?
Mr. Rowlan. While I agree that greenhouse gas is a big
issue and has a lot of impact, I would not discount or put
anything below that with respect to the new one-hour criteria
pollutant standards that we are getting along with several MACT
standards. We are getting hammered from every which direction.
So I think they are all right there. If one doesn't catch you,
the other one does, and it is almost like a game of gotcha.
Mr. Sullivan. And the economy is bad enough, with all this.
Mr. Pearce?
Mr. Pearce. I would say the greenhouse gas.
Mr. Sullivan. Mr. Cousins?
Mr. Cousins. With my written testimony, I included a slide
that showed a blizzard of EPA regulatory initiatives. We are
concerned about all of them, but the PSD and the NSPS portions
of the greenhouse gas regulations are the most immediate
concern.
Mr. Sullivan. Mr. Carter?
Mr. Carter. I would say the greenhouse gas regulations but
we should not ignore the other items that are coming out of EPA
today because some of them may actually have a faster impact on
utilities in the immediate term. And the reason is, is that we
do not have commercially available technology to look at our
plant, and what we have created is a system where there is a
great deal of uncertainty because even if Ms. Jackson, who I
have a lot of respect for, even if she goes forward, she does
not prevent the legal challenges much like we saw on the CARE
rule. If you are familiar with the CARE rule, it was in place
for years and then it got vacated and now it is being
completely rewritten. That is pretty scary if you are in my
business.
Mr. Sullivan. That is a very good point.
Ms. Blaisdell, are there any regulations that concern you
and your company?
Ms. Blaisdell. They don't. Actually the EPA has been quite
helpful to our company, not hurtful.
Mr. Sullivan. There are no regulations that concern you at
all about EPA?
Ms. Blaisdell. The greenhouse gas regulations do not
concern our company. They don't apply. We don't emit over
100,000 tons.
Mr. Sullivan. Thank you, sir.
Mr. Whitfield. Mr. Scalise, you are recognized--no, I am
sorry. Mr. Terry, you are recognized for 5 minutes.
Mr. Terry. Thank you, Mr. Chairman.
Ms. Blaisdell, thank you for being here, and I don't know
what, somebody on our side of the aisle evidently insulted you,
but that is not the way it is supposed to work here. I
appreciate that Timberland is voluntarily undertaken, and I
know several businesses in the Omaha metropolitan area that I
represent that have voluntarily undertaken a variety of energy
efficiencies in their business too, and we like that. I love
it. What I don't like is the EPA just assuming that they have
legislative powers, and that that is what this is about.
But I do want to make it clear, Betsey, that unlike the
gentleman that was asking you questions, I am not going to call
your boss and ask that you be fired for coming here and
speaking your mind nor like somebody else on the Minority side,
I am not going to write a letter to a regulatory agency asking
that they investigate Timberland because you are here. I
actually think it adds, and I want to state that for the record
because that is exactly what happened to one of our Minority
witnesses at a cap-and-trade global warming hearing, and it was
a constituent of mine so I am always going to stick up for that
person.
Getting to Nucor, Mr. Rowlan, thank you. Nucor facility,
not in my district, but an hour-and-a-half drive and I have
been up there, I have seen the operation, and would join with
Mr. Inslee in saying thank you for the efficiencies. I think it
is a well-run business. Like Timberland, I appreciate that you
have undergone voluntary measures to reduce your energy costs
and emissions. Likewise, let me ask you this question under the
clean air law. Even with all of the efficiencies that you have
adopted, will one of your recycling plants like the one in
Norfolk emit more than 250 tons of CO2 in a calendar
year?
Mr. Rowlan. Most definitely. We are caught up, all of our
steel mills like the one in Nucor are caught up.
Mr. Terry. Is there any way of getting your plants
considering the smelting, melting processes, to be under 250
tons of CO2 in a given calendar year?
Mr. Rowlan. There is no physical law I am aware of that
could ever cause that to happen.
Mr. Terry. And you are aware that that is what your
company, Nucor, would be under the exempted area where it would
be not 100 tons in a year but 250 tons would be what is
currently written in the Clean Air Act?
Mr. Rowlan. We are already a major stationary source.
Mr. Terry. You understand that rule very well.
Mr. Rowlan. I understand and live that rule.
Mr. Terry. And probably, since you understand the rule,
know that EPA directors just can't willy-nilly change that part
of the statute. Is that your understanding?
Mr. Rowlan. I would believe that that was the case, and I
hope Congress----
Mr. Terry. If an EPA director can just start willy-nilly
throwing out, okay, the statute says very clearly and your
history has been that under the major emitter rule that you
would qualify under the exemption of 250 tons and then she
comes around and says something different and enforces that.
Does that give you more or less certainty in the industry?
Mr. Rowlan. If we use the 250 tons?
Mr. Terry. No, if someone, the EPA, this EPA director says
it is 100,000, the next one starts saying it is 50,000 or 10,
if that is the power that they have, does that provide you
certainty?
Mr. Rowlan. It gives me no certainty at all. I defer to
what the Attorney General from Texas said. We are a Nation of
laws and I don't see that it is consistent with the law at that
point.
Mr. Terry. I appreciate that.
And then Mr. Alford, I have some charts regarding the study
that you have done or your organization that shows the job
losses, and I am just wondering what the criteria were
generally to determine that in 2015 you would have a million
and a half jobs lost and by 2030 it would be pushing 2,500,000
jobs lost just due to this rule. Because we heard from
Administrator Jackson that it is going to be actually a job
creator, but you are showing job losses. How do we jibe those
two?
Mr. Alford. Well, we spent some good money on that study
from Charles River Associates. That is a very reputable firm
based here in Washington, D.C., and that was done early 2009.
We have shown it to the world, and we have not had one person
or entity challenge those studies that are in that study, the
charts.
Mr. Terry. So you are standing behind your study?
Mr. Alford. Absolutely.
Mr. Terry. All right. Thank you very much.
Mr. Whitfield. Thank you, Mr. Terry.
At this time I recognize Mr. Scalise for 5 minutes.
Mr. Scalise. Thank you, Mr. Chairman.
Mr. Rowlan, I first want to thank you for the commitment
you made to create jobs in America but specifically in
southeast Louisiana, and we really appreciate the presence of
Nucor. I think you were here when I had a conversation with Ms.
Jackson about her report, that she stated that these
regulations will create jobs, and I think she tried to use
Nucor as a poster child for how these new regulations will
actually grow the economy and yet I know in your testimony, you
talked about the opposite, and believe me, yours is not an
isolated example. I hear this day in, day out of companies that
talk about the burdens of EPA and how it runs more jobs out of
the country, and I know in your testimony you talked about the
larger presence of American jobs that would have been created
here if not for the threat of EPA. So I wanted to first thank
you, of course, but also give you an opportunity to talk about
that specifically in her comments of using you all as the
poster child for how this is working so well yet it seems to
contradict what is actually happening in reality.
Mr. Rowlan. Well, are you speaking of our Nucor Louisiana
project, and yes, we had originally planned to build, I think
it was the first two blast furnace operation permitted under
the Clean Air Act along with coke ovens and cinder plants and
produce 6 million tons of pig iron. We now have reduced that
project and that is moved off to phase 2 if we do get the final
permit on that.
Mr. Scalise. So you are still waiting on a permit from EPA?
Mr. Rowlan. That permit has been issued but it is stayed
until the litigation over it is completed. There are a couple
of lawsuits going on right now against Louisiana Department of
Environmental Quality. The replacement project was a direct
reduced iron project, and so that people can understand, if you
say we were going to build pickups at the original facility,
what we ended up making are, I don't know, bicycles or
something like that. This is a different product. It is still
iron but it is a different product, and it is significantly
different in the overall employment impact. I think we had----
Mr. Scalise. Can you touch on that? What would the jobs
have been versus what they will be here in America?
Mr. Rowlan. I believe the original was around 1,000 jobs
when the full project was in, and we are around 150 jobs right
now. I think that is right. And then there was about 2,000
construction jobs originally and we are at about 500
construction jobs right now, around 2.1 billion and we are
around 750 million right now.
Mr. Scalise. So you are talking about well over a billion
and a half dollars roughly that was lost in investment, 1.25
billion maybe that was lost in investment----
Mr. Rowlan [continuing]. Not moving forward with it at this
point. It is still in phase 2. We would hope to be able to do
that at some point.
Mr. Scalise. What is the average pay for those jobs, the
thousand you were originally anticipating versus the 150 now?
What is the average pay of those jobs?
Mr. Rowlan. Our publicized average pay at a Nucor facility
is $70,000 a year.
Mr. Scalise. Gee, whiz. Well, these are great jobs, and
unfortunately, a lot less of them right now because of the
regulations. Again, I have heard the story time and time again
and EPA will come out and say the regulations are creating
jobs. Maybe what they are not realizing is, it is jobs in China
and India that they are creating, not here in America. So I
appreciate what you are doing. I share your frustration, and we
are going to continue to work through and get real clarity so
that businesses can go forward.
Mr. Cousins, there was some comment earlier by another
member talking about how the Energy Tax Prevention Act would
somehow lead to increased dependence on Middle Eastern oil. Of
course, this Administration's policies have led to an increased
dependence on Middle Eastern oil and higher gas prices. The
bill, in my opinion, would actually at least give some
sustainability and hopefully we can then get to a point where
we reduce our dependence, but do you see anything in the
legislation that would increase this country's dependence on
Middle Eastern oil?
Mr. Cousins. No, not at all. I think acts already carried
on by Congress and by the EPA, CAFE standards increase have cut
fuel use quite a bit. Renewable fuel standard is putting 36
billion gallons of non-gasoline into the gasoline and diesel
supply through the next few decades. I think everything is
tending toward a reduction.
Mr. Scalise. And in fact, when Administrator Jackson agreed
with that comment, I thought it undermined the credibility to
say that a bill that prevents EPA from shutting jobs out of
America, running more refineries to India and other places, for
her to suggest that that increase our dependence on foreign oil
when actually it is EPA's actions that increase the dependence.
And the final question, can you talk in terms of the jobs
that you haven't been able to create, the expansion that you
haven't been able to do because of EPA's regulations?
Mr. Cousins. Well, as I said earlier, we were partway
through a multi-hundred million dollar expansion in a small
town. There were about 14,000 man-weeks, which would be one
person working for 14,000 weeks on the job to complete the
construction, or 2,000 people working for 2 months. We just had
to stop, and those people were terminated, and that is a big
hit in a county where we lost 2,000 jobs out of 40,000 workers
in a poultry operation that shut down.
Mr. Scalise. Well, hopefully we can pass this legislation
and save those jobs. I appreciate your testimony. I yield back.
Mr. Whitfield. Thank you.
Mr. Olson of Texas for 5 minutes.
Mr. Olson. Thank you, Mr. Chairman, and I can assure the
witnesses and all the people here watching this hearing that I
am the last Texan that is going to speak today, and we are
Texans, we are very proud and please bear with us.
But I would like to speak to General Abbott, and first of
all, sir, I would like to thank you for what you have done for
our State to create an environment that we do have some
stability, some predictability, some certainty, and I greatly
appreciate that.
One of the things all of us when we go back home, one of
the biggest concerns our constituents have is jobs, jobs, jobs,
and as my colleague Gene Green said, our State has had the good
fortune of creating half the private sector jobs since our
economy went into a recession, half the ones here in America.
My colleagues Joe Barton and Mike Burgess have told us about
the success of the flexible permitting system. Our air is
demonstrably cleaner. There is no doubt about that. We have the
facts. And I know personally because I moved to Houston in
1972, and our general grew up in Houston as well and it wasn't
such a clean town. I mean, you could not see downtown from 20
miles out when I came out of Clear Lake and headed towards
downtown. Now that is the exception maybe one or two days
during the summer that that exists. Most every day you can see
downtown, so that is just demonstrably cleaner from my own
personal experience. Our process has worked. You would think we
would be a role model for the country, here is how we can get
through this, here is how we can have a cleaner environment and
a good environment for business and be clean. But it concerns
me that what is doing with this excessive regulation, how that
is coming into our economy in Texas.
Attorney General Abbott, do you see a tipping point here? I
mean, if they keep going forward down this line with all this,
the flexible permitting, some of the hydraulic fracturing
issues, some of the other issues, the ozone standards, do you
see a turning point here where the environment that the Federal
Government creates starts killing jobs in our State?
Mr. Abbott. Well, a couple things. If I could pick up on
one of your earlier comments, first of all, to help people
understand, people see Texas challenging the EPA both
regulatorily and with lawsuits, but I want to emphasize a point
that you made, and that is that Texas takes pride in trying to
achieve the best. That includes achieving the best possible
environment and health environment for our citizens, and as a
result, that is one reason why we have worked so hard and
achieved so much in improving air quality in your district and
across the State of Texas, and we stand committed to continuing
to achieve improvements in air quality and the environment, but
that doesn't meant that we are going to stand aside or roll
over if we believe that the EPA is imposing its will in a way
that is contrary to the law.
You mentioned a tipping point, and there is another phrase
you could also use in tandem, and that is a slippery slope. We
are very concerned about the slippery slope. I think it was
Representative Terry who brought up earlier in the context of
the tailoring rule, and we are very concerned about what the
tailoring rule could turn into once it starts moving on a
slippery slope where it gives latitude to the EPA to decide
what the standards may be. It could shift from today to 5 years
from now to 10 years from now and it could very well bring in
Nucor and some other industries within the gambit of what they
are able to emit.
But I think we are at a tipping point also because if these
greenhouse gas regulations by the EPA go into place or upheld,
we are a tipping point in two ways. One, it means that the EPA
does have carte blanche to make up its own rules as they go
along and that they are saying they are not confined by the
terms of the Clean Air Act that was passed by the United States
Congress. But also we are at a tipping point in the sense of
what it is going to mean for our jobs, our economy and the
future of this country when we have out-of-control regulations
that are crushing the attempt to expand our economy at a time
that we most desperately need it to grow.
Mr. Olson. Thank you for that answer, Mr. Attorney General.
You are a great public servant.
I have about run out of time. Thank you to all the
witnesses. I appreciate your views and perspectives.
Mr. Whitfield. Mr. McKinley, you are recognized for 5
minutes.
Mr. McKinley. Thank you. I am coming from the perspective
of the coal fields of West Virginia and what the EPA has done
in the coal fields, the uncertainty that is coming to them from
water, fly ash, dust, revoking retroactively permits. Then I
see the next fight looming on the horizon is not going over
into another segment with the EPA and the uncertainties that
they bring with their regulatory extremism. We have all heard
in West Virginia job killers, the extreme, irrational lack of
common sense. It is bad enough for us in the coal fields. What
happens when it sweeps across America controlling the
greenhouse gases? So you all have--understand, there are still
15 million people unemployed and until the uncertainty is
removed, I have got to think you are reluctant to take on more
responsibility. So we are going to continue having 15 million
people unemployed in America. That is not where I want us to be
as a country.
So now, having framed that, you have all been listening for
hours here of testimony today. I am just curious, are any of
you more confident in what you have heard from either the other
side or here that things are going to be okay, allow the EPA to
continue down this path of regulating the greenhouse gases? Can
each of you just, are you more comfortable now after you have
heard 2 hours?
Mr. Abbott. Let me say that I grew more comfortable when I
saw this bill, this Act being proposed by this subcommittee.
The concern that we had in Texas was the imposition of the
greenhouse gas regulations. We perceive that the most
meaningful way, the most meaningful pathway in order to protect
the future was not by our litigation fights in the courthouse
against the EPA but by action by this body. The promise of the
future rests with regard to this potential legislation, and we
hope that it passes because we believe it will provide
certainty and clarity for the environment regulation side of
the world.
Mr. McKinley. Thank you. Mr. Alford?
Mr. Alford. I have optimism in that Carol Brown has left
the Administration, which I believe was pulling or pushing Ms.
Jackson, who is a fine lady and a fine American, but the cap-
and-trade bill died. The American people rejected it. It is
gone. You can't have it. So you can't go around through
chicanery or deception or end around or making the EPA a
runaway freight train to make it happen, and we have got to
stand tall and be resolved to fight it again.
Mr. Rowlan. I can't say that I have more certainty. I think
I will watch for the votes. I think my issues always go back to
this, and it is whether--I am a technical person and an
engineer by training, and when I look at it, I always look at
what is the end result that you are trying to achieve, and
everything that I have seen with respect to the regulation of
greenhouse gases, nothing ever accomplishes the end goal of
lowering the global concentration, and so the question I ask
is, why do we do it if it not going to accomplish what we state
is the end goal? And I have gone on record as saying if we are
doing it and we are just doing it to hurt ourselves and we
don't accomplish a lowering of the global concentrations, we
are on a fool's errand.
Mr. McKinley. Thank you.
Mr. Pearce. I am encouraged by what this legislation and I
am encouraged by the support that we have heard for it today,
but I am concerned that if we don't pass this, if it is not
legislative, what kind of ticket that does that write for the
EPA and other areas? It sets a precedent.
Mr. Cousins. The Energy Tax Prevention Act gives us a
fighting chance. Without it, the future is quite grim.
Mr. Carter. I am encouraged because we are considering this
piece of legislation. That is why I am here today. I would
point out that there are things that we can do that could be
done if we want to adopt policy that will allow electric
utilities to move forward fewer emissions like the things that
we are doing--new nuclear plants, which still have a great deal
of hurdles in front of them, not from a technology perspective
but from a regulatory perspective. I can speak directly to that
as being part of that restart.
Also, industry or entities like us, we need to make sure we
have the comparable incentives so that we can move into what I
would call other green types of resources and clear some of the
regulatory hurdles associated with those also.
Ms. Blaisdell. I think this legislation encourages
inaction, and I don't believe that that creates more certainty,
and in fact, it could lead to more patchwork of State
regulations, which I can't speak to greenhouse gas patchwork of
State regulations because that hasn't applied to our company
yet other than to say I know from experience with other
patchwork of regulations that that is not good for our company.
I imagine that wouldn't be good for the companies that are
represented here as well.
Mr. Whitfield. Mr. Gardner, you are recognized for 5
minutes.
Mr. Gardner. Thank you, Mr. Chairman, and thank you to the
witnesses for being here today, taking time away from work and
for participating in this hearing. I really appreciate it.
Mr. Cousins, I have a question for you from your testimony
earlier today. During Administrator Jackson's testimony, she
said that the economy was doing great, and when I pushed back a
little bit on that question, she said just the rural economy is
doing great, and you had mentioned that in your county you are
facing some significant unemployment. Could you describe that
again?
Mr. Cousins. Well, our county has about 43,000 people in
it, and we lost almost 2,000 jobs in one blow when a poultry
operation shut down in our area. Our unemployment is double
digit, and that is hardly thriving to our way of thinking.
Mr. Gardner. And is it your view, Mr. Cousins, that
regulations like this will hurt rather than help the employment
situation in your county?
Mr. Cousins. Absolutely.
Mr. Gardner. And a question for Mr. Rowlan or Mr. Pearce.
There was some discussion during the Administrator's testimony
that these regulations are actually creating jobs, that the
more we have regulations, the more jobs are created, and she
also mentioned, and I think it was $2 trillion in money that is
sitting out waiting to be invested and she believe that because
of this regulation that that money would start moving back into
the economy and being invested. Are any of you planning on
investing because of this regulation? Ms. Blaisdell?
Ms. Blaisdell. The cost of inaction for us means that our
supply chain will suffer and our ability to deliver products to
our consumers will suffer as well.
Mr. Gardner. Mr. Carter or Mr. Alford, anybody else want to
comment on that?
Mr. Alford. Some of my stronger members are going to Ghana,
Kenya, China. I have got a board member going to Mongolia next
month. They are looking elsewhere, and I think that is sad.
Mr. Gardner. And a question, do you believe that
regulations create jobs?
Mr. Alford. Regulations, I believe, are intended to prevent
crime and fraud and adherence to good corporate responsibility.
That is it.
Mr. Gardner. I thank you. And I wanted to ask a few more
questions based on some statements that were made here in the
committee, following up on that last question. The EPA analysis
mentioned by some on this committee had said that just one of
EPA's Clean Air Act standards has kept about 200,000 people
occupied, 200,000 person-years of labor over the past 7 years,
and in your opinion, doesn't this mean that this means the EPA
is keeping people employed? I mean, what would you say to
somebody who actually is trying to bring capital investment
into this country, given the regulatory structure that we are
facing today? Mr. Abbott or Mr. Alford?
Mr. Abbott. Along that line, it is good for jobs in the
legal sector. We will need more lawyers to handle more legal
work. But other than that, of course, with the way that
greenhouse gases work and if we have regulations here in the
United States and there are not similar regulations around the
world, logically it seems like it is going to force industry,
jobs, employers across the border into Mexico or Canada or to
China and India and other parts of the world.
Mr. Gardner. Thank you, Mr. Chairman. I yield back my time.
Ms. Blaisdell. Can I respond as well?
Mr. Whitfield. Sure.
Ms. Blaisdell. I think without a lack of certainty, what
ends up happening is what we are seeing right now in China
where they are actually producing renewable energy systems
because we didn't create any certainty here, a long-term demand
for those alternative energy sources. We haven't talked about
those jobs today. That could have been U.S. jobs.
Mr. Whitfield. Mr. Griffith, you are recognized for 5
minutes.
Mr. Griffith. I think Mr. Rowlan wanted to add something to
that comment, I will ask you to say whatever it is you were
thinking.
Mr. Rowlan. As you know in my testimony I said that
affordable energy is the lifeblood of industry, and renewable
energy has to be affordable. If it isn't affordable, then all
it does is displace a job because the price of your energy goes
up as we talked about, and I was privy to some research that
should be coming out shortly that in the last couple of years
there has been 333 projects, energy generation projects that
have been stalled, shut down, or otherwise abandoned in this
country, 111 coal-fired power plants, 22 nuclear plants, 21
transmission projects, 38 gas and platform projects and 140
renewable projects that haven't even gotten through. Eighty-
nine of those were wind, four were wave, 10 were solar, seven
were hydro and 29 were biomass. Now, if you sit and we said we
got all that energy and let us just take the affordable part of
it and not the renewable unaffordable part of it, if we got
that energy, look at the jobs that would begin to create
because that energy goes out and that creates industry which
builds things, which makes jobs and that just continues to roll
forward.
But the sad part of this is, 45 percent of those 333
projects are renewable projects and we can't even get them
permitted without the greenhouse gas rules. Now, let us add
another brick onto that burden and let us see if that mule can
walk.
Mr. Griffith. Thank you.
General Abbott, I am a lawyer or a recovering lawyer. Now
that I am doing this, I can't practice anymore. But I have read
the Massachusetts v. EPA decision, and you obviously have too,
and I looked at that next-to-last sentence where it says ``We
hold only that the EPA must ground its reasons for action or
inaction in the statute.'' Now, earlier today when I was
speaking with Ms. Jackson, she indicated that the reason that
they had changed instead of it being 100 of 250 to 100,000 in
their tailoring was because if they had enforced the law as
written, it would be absurd, and I agreed with her on that. But
I guess my question to you is, is that she said that they felt
that because it was going to be an absurd result, that they had
the authority to change the rule, so to speak, and I went to
law school, I never got that class, and I am just wondering if
I missed something over the years or maybe you knew, is there
authority for a bureaucracy to change the law because they end
result would be absurd or is that the duty of the legislative
branch of government?
Mr. Abbott. As I understand it, their legal argument is
based upon what would be called the absurdity doctrine. As
understand it, the absurdity doctrine is not a valid legal
doctrine for them to base their decision on and it is more like
a hope and a prayer that they can get away with changing the
clear language established by Congress in the Clean Air Act.
This is a way in which there is an evasion of the law and a
creation of new law by the EPA.
Mr. Griffith. And in that vein, am I not correct that once
she made the determination that there was an endangerment, she
needed to apply the rules to all 6 million businesses that
would come under the 100 or 250 regulation and that by not
doing so if someone were to sue, all 6 million in that universe
would come under the law and that that would create chaos, I
mean, not just damage the economy but create sheer chaos in the
economy, and isn't it then better that we pass this legislation
so that we can then have that argument in the halls of Congress
instead of having the fear that at some point in the future a
court is going to rule that you have to apply it to all--
whatever rules they come up with apply to all 6 million in the
universe and that 6 million is of course her number.
Mr. Abbott. Right. You are absolutely correct. Our great
concern is that the tailoring rule is going to be challenged,
not just from our side but also from those who really want to
decrease those thresholds, thereby making schools, farms,
hospitals, small businesses, literally thousands upon thousands
of job creators and employers across the country suddenly
subject to these limitations, almost stifling overnight our
economy.
Mr. Griffith. And the solution would be passage of this
bill?
Mr. Abbott. The solution has to be the passage of this
bill.
Mr. Griffith. I thank the gentleman and yield back whatever
time I have left.
Mr. Whitfield. Mr. Griffith, thank you very much, and I
want to thank the panel. We genuinely appreciate your taking
time to come and talk to us about practical issues as we try to
balance environment protections, health care and economic
development, and your testimony on job creation was very
important and we appreciate it, and so I will dismiss this
panel. Ms. Blaisdell, I asked them to get these newspaper
articles that Mr. Shimkus referred to, if you all would like to
see them.
We will call up the fourth panel, and on the fourth panel
we have Peter Glaser, a partner with Troutman Sanders; Dr.
Margo Thorning, Senior VP and Chief Economist, American Council
for Capital Formation; Mr. Philip Nelson, President of the
Illinois Farm Bureau; Mr. Fred Harnack, General Manager, U.S.
Steel Corporation; Mr. James Goldstene, Executive Officer,
California Air Resources Board; and Dr. Lynn Goldman, American
Public Health Association. I want to thank you all very much
for being with us. We appreciate your patience. We are going to
declare you honorary members of the Energy and Commerce
Committee because you have been here so long. And then at this
time Mr. Glaser, I will call upon your for your 5-minute
opening statement, and then we will get to questions after
that. Mr. Glaser, thank you for being here.
STATEMENTS OF PETER S. GLASER, PRESIDENT, TROUTMAN SANDERS LLP;
DR. MARGO THORNING, SENIOR VICE PRESIDENT AND CHIEF ECONOMIST,
AMERICAN COUNCIL FOR CAPITAL INVESTMENT; PHILIP NELSON,
PRESIDENT, ILLINOIS FARM BUREAU; FRED T. HARNACK, GENERAL
MANAGER, ENVIRONMENTAL AFFAIRS, U.S. STEEL CORPORATION; JAMES
N. GOLDSTENE, EXECUTIVE OFFICER, CALIFORNIA AIR RESOURCES
BOARD; AND DR. LYNN R. GOLDMAN, AMERICAN PUBLIC HEALTH
ASSOCIATION
STATEMENT OF PETER S. GLASER
Mr. Glaser. Thank you very much, Mr. Chairman. Members of
the committee, I appreciate the opportunity to testify here
today. My written testimony, which is very detailed, provides
an analysis from a legal standpoint of why the Clean Air Act is
such a poor vehicle for addressing greenhouse gas emissions,
and I will just summarize some of my points there.
I want to emphasize at the outset that I am not
representing any of my clients here today. I am not being
compensated for this testimony, and the views I express here
are my own and do not necessarily reflect the views of my
clients.
I also want to say at the beginning that my testimony has
nothing to do with the science. Whatever you feel about the
science either way, if you believe in the science one direction
or another, my testimony still works.
The main problem with regulating greenhouse gas emissions
under the Clean Air Act, even if you think that greenhouse
gases is something that the country needs to regulate, is that
the statute was not designed for that purpose, and as a result,
EPA's regulatory aims do not comfortably fit within the
programs that are in the Clean Air Act. We know this because
EPA itself has said that regulating greenhouse gases under the
literal language of the statute, as we have heard many times
today, creates an absurd result. If you use the statute, you
get an absurd result, and the only way to avoid this is for EPA
to tailor the statute itself. You have to change the statute.
Just putting aside legal arguments about whether or not EPA
could do that, the problem is that EPA has been forced to
engage in this kind of creative legal interpretation in this
area and in several other areas that are set forth in my
testimony, and all of this shows is that EPA is trying to make
the statute do something that it was not designed to do. And so
what you get from this are lawsuits and you get regulatory
uncertainty, and in the end what might happen if EPA is wrong
is that you end up unleashing regulation on a very, very large
number and variety of small emitters.
Indeed, we may be facing more absurd consequences of trying
to regulate under this statute. As EPA confronts a petition to
regulate greenhouse gases under the National Ambient Air
Quality Standards. I actually thought the single most
disturbing thing that I heard today having sat here all day was
the Administrator's statement that in fact they may get forced
into establishing a greenhouse gas National Ambient Air Quality
Standard. Unfortunately, the only legal precedent on the books
on this would seem to be point to a necessity that they do
that. This is set forth in more detail in my testimony. That
would create truly severe economic consequences under a program
that could never be complied with. That is very concerning.
Now, importantly, and there has been some discussion of
this today, EPA has not done an overall comprehensive
assessment of the cumulative costs and benefits of all of the
greenhouse gas regulation that it has in mind nor has EPA set
forth its overall plan of regulation where it lists out in
advance for everybody to see what the requirements will be,
what categories of sources that they intend to regulate, what
programs they intend to regulate under and what the full
regulatory timetable is. We heard the Administrator say today
that they are taking this on a rule-by-rule basis but that they
can't anticipate what all the rules will be because they don't
know what all the rules will be. We heard her say that they got
petitions, multiple petitions to regulate different sources.
They don't know how they are going to act on that. We heard her
say that they are going to be doing cost-benefit analysis but
only in the context when they get to actual rules.
Now, all this is despite the fact that they have a 5-year
plan. EPA has a 5-year strategic plan, and goal number one of
the 5-year strategic plan is taking action on climate change
and air quality. So presumably they have a plan but they have
not told us in advance what the specific elements of the plan
are. As a result of all of this, we are in the process, we have
started down this path of one regulation after another, but
before we decided to do that in the first place, we never
assessed what the overall cost and consequences and benefits
were going to be, and this to be should be very concerning
because it contributes to the large uncertainty of where
exactly the Nation is going.
You know, one flaw with proceeding on a rule-by-rule basis
and trying to determine what the costs and benefits of
regulation are can be seen in their first foray into greenhouse
gas regulation. Their first foray, of course, was the motor
vehicle, the tailpipe rule. In the tailpipe rule, they assessed
the costs of the tailpipe rule on the motor vehicle industry.
They also said that the tailpipe rule automatically and as a
matter of law triggers greenhouse gas regulation of large,
stationary sources. But there was no study as to what those
regulations were going to be and what the cost was going to be.
So as we have started out as of January 2nd in regulation
greenhouse gases under these programs, we still have no overall
assessment of whether the benefit will exceed the cost.
Mr. Whitfield. If you would summarize, Mr. Glaser?
Mr. Glaser. Sure. I think the overall question for this
committee is what part of government should make the critical
policy choices that are inherent in determining how the Nation
uses energy. To me, this is the main issue before this
committee. Should it be EPA under a statute that they are
relying on that was enacted in 1970 or should it be Congress?
Thank you.
[The prepared statement of Mr. Glaser follows:]
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Mr. Whitfield. Thank you very much.
Dr. Thorning, we look forward to your testimony.
STATEMENT OF MARGO THORNING
Ms. Thorning. Thank you, Mr. Chairman, and thank you,
Ranking Member Rush, and I apologize for misidentifying in you
my written testimony. I would like to correct that for the
record.
Thank you very much for the chance to appear before you. I
just want to talk about five points in my testimony. First, the
U.S. economy is recovering sluggishly. GDP grew only at 2.9
percent last year. The unemployment rate remains stubbornly
high at 9 percent. And investigation right now is about $354
billion less than it was in the fourth quarter of 2007.
Investment spending is responsible for most of the drop in
gross domestic product over the last 2\1/2\ years or so. So
clearly that is a key issue.
Looking at the historical data, each $1 billion drop in
investment spending is associated with a job loss of 15,500
jobs, and vice versa. Each $1 billion increase is responsible
for over 15,000 new jobs.
The second point, regulating greenhouse gases under the
Clean Air Act is likely to have a negative impact on overall
business spending. When a business is contemplating a new
investment, they look at the risk of that new investment. They
may add a risk premium to their cost of capital, anywhere from
zero to as much as 50 percent or more, assuming that the risk
premium associated with investments that are in industries
regulated by EPA might be 30 to 40 percent. We looked at the
impact of that on business investment in the quarter or so of
investment that is accounted for by these regulated entities
that are regulated by EPA. We conclude that there could be a
fall in investment spending annually of between $25 and $75
billion. When you feed those numbers into IMPLAN, input-output
model, you get--it is an input-output model that accounts for
all the dollar flows across all sectors in the United States.
When you feel those drops in investment which we assumed either
$25 billion annually or $75 billion, you get a decrease in jobs
of approximately 476,000 to, on the high side, 1.4 million
fewer jobs annually and you get a loss of GDP of between 47
billion and 141 billion annually. Interestingly, the job
numbers that we obtained by looking at the historical data were
about 15,5000 jobs tabulate very nicely with the IMPLAN results
which suggest that for each $1 billion drop in investment, we
lost about 17,000 jobs. So using two completely different
approaches, we get the same impact for this drop in investment
spending that we expect will occur as a result of these
regulations.
Fourth, mandating energy efficiency, as EPA seems to want
to do under the BACT guidelines is unlikely to lead to job
growth. First, as many companies testified in the panel just
before us, they have already made energy efficiency
investments. They do it when it makes economic sense, and when
it is time to replace their capital stock if they can a more
energy-efficient investment that makes sense, they do it. They
don't need a government mandate to make them increase energy
efficiency. And second, the argument that market failures and
inefficiencies or technical barriers are responsible for
companies not taking up energy-efficient investment is, I
think, unfounded. Companies do make those investments. Overall,
the results suggest that mandating energy efficiency is not
going to be a net job generator.
And fifth, the BACT guidelines issued in November are not
likely to reduce uncertainty and they will not reduce the risk
premium in the cost of capital that companies contemplating
investment or expansion face because, for example, the specific
standards for BACT are not established by the new guidelines.
That means industries don't really know what will be required.
And another example, the permitting agencies are required to
retain discretion to determine BACT on a case-by-case basis
subject to EPA or court review. Thus, regulated entities will
encounter different requirements depending on the individual
State regulator's approach.
So in conclusion, I think using economic analysis, it
suggests that regulating GHGs under the Clean Air Act is likely
to slow investment, slow job growth and not have any impact on
global greenhouse gas concentrations. Consequently, it makes
little sense for EPA to proceed down this path. Thank you.
[The prepared statement of Ms. Thorning follows:]
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Mr. Whitfield. Thank you, Dr. Thorning.
Mr. Nelson, you are recognized for 5 minutes.
STATEMENT OF PHILIP NELSON
Mr. Nelson. Mr. Chairman, members of the subcommittee, good
afternoon. I am Philip Nelson. I am a fourth-generation grain
and livestock farmer from Seneca Illinois. I am also President
of the Illinois Farm Bureau and a member of the Board of
Directors of the American Farm Bureau Federation. I am
appearing today on behalf of the American Farm Bureau
Federation.
I am pleased to testify in support of the Energy Tax
Prevention Act of 2011. It is one of several bills from both
sides of the aisle in both the House and the Senate that are
designed to allow our elected representatives in Congress to
decide how and to what extent our Nation will address
regulation of greenhouse gases. Farm Bureau opposes the
regulation of greenhouse gases by the Environmental Protection
Agency under the Clean Air Act and we commend the chairman for
giving this matter a high priority.
Farmers and ranchers receive a double economic jolt from
the regulation of greenhouse gases from stationary sources.
First, any costs incurred by utilities, refiners,
manufacturers, and other large emitters to comply with the
greenhouse gas regulatory requirements will be passed on to
consumers of those products, including farmers and ranchers. To
a large degree, farmers and ranchers cannot pass along these
increased costs of production. Farmers and ranchers will also
incur direct results as a result of the regulation of
greenhouse gases by EPA. For the first time, many farm and
ranch operations will likely be subject to direct new source
review/prevention of significant deterioration construction
permits and Title V permit requirements under the Clean Air
Act. For example, Title V of the Clean Air Act requires that
any stationary source including farms and ranches that emits or
has the potential to emit more than 100 tons of a regulated
pollutant per year must obtain an operating permit. To meet
this requirement, thousands of farms and ranches will be
required to obtain the Title V operating permits. EPA itself
estimates that just at the expense of obtaining Title V
operating permits, it will cost production agriculture $866
million. That does not include other associated permit costs.
Livestock producers would be especially impacted by these
permit requirements. The USDA has stated that approximately 90
percent of the livestock produced in this country are above the
permitting thresholds and will be required to obtain operating
permits. Under the EPA tailoring scheme, farmers and ranchers
would still incur costs passed down from utilities and larger
emitters upon which they depend for energy and fuel. Farmers
and ranchers that meet the low Clean Air Act thresholds will
also eventually be required to obtain permits.
On the other hand, this costly and burdensome regulatory
scheme will produce very little, if any, environmental benefit.
Greenhouse gases are distributed evenly around the globe so
that a ton of greenhouse gases emitted in Illinois is no
different than a ton of greenhouse gases emitted in China.
Regulation of greenhouse gases emitted in Illinois means little
if emissions in China are not similarly regulated. Unless and
until the countries of this world agree on an international
treaty on greenhouse gas emissions, unilateral regulation of
greenhouse gases by EPA will have little environment effect, a
fact publicly acknowledged by the EPA Administrator. Both the
President and the Administrator of EPA have stated that the
regulation of greenhouse gases by EPA under the Clean Air Act
is not an effective way to address the issue. Most state that
they prefer that the issue be addressed by Congress.
The Energy Tax Prevention Act recognizes this fact and
applies the brakes to this process, thus restoring the
jurisdiction of Congress to develop climate policy. Thank you.
[The prepared statement of Mr. Nelson follows:]
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Mr. Whitfield. Thank you, Mr. Nelson.
Mr. Harnack, you are recognized for 5 minutes.
STATEMENT OF FRED T. HARNACK
Mr. Harnack. OK. Good afternoon. Mr. Chairman and members
of the committee, thank you for this opportunity to testify. I
will briefly summarize my remarks, and I am pleased to have
supplied a detailed written statement for the record.
My name is Fred Harnack and I am General Manager of
Environmental Affairs for United States Steel Corporation. My
career spans over 30 years in steel technology and
manufacturing facilities, some of which are located in Mr.
Dingell's and Mr. Doyle's districts. I have witnessed
environmental management practices developed in tandem with
implementation of the Clean Air Act. On balance, the Clean Air
Act has been a force for positive change across industrial
America.
Today, I am especially proud to represent our company and
over 21,000 domestic and 42,000 total employees at U.S. Steel.
My company provides employees and their families good-paying
jobs and benefits that make the American dream attainable. We
also support pension and health benefits for more than 100,000
retirees and their dependants. Ours is an industry worth
fighting to keep.
I assure you every one of us wants to work, live and raise
our families in a clean and safe environment. We are committed
to making steel with that in mind and install environmental
stewardship through all our business processes. That said, we
believe the time has come to reassess the complex framework of
rules and regulations that hamstring responsible manufacturers
and inhibit economic growth and job creation.
U.S. Steel is an integrated steel producer. Our process
begins with iron ore, carbon in the form of coke, and
limestone. We transform these materials through a highly
efficient, high-temperature blast furnace to create iron which,
with the addition of recycled steel scrap metal, is converted
to cast steel. We produce flat roll sheet and tin products and
seamless and welded pipe that is used in automotive,
construction, container and energy industry applications.
As Congress looks for ways to reduce unemployment and
attempt to recover more than 8 million manufacturing jobs lost
since the year 2000, the regulatory burden will be a target-
rich environment. The recent spate of new rules to regulate
greenhouse gas emissions under the Clean Air Act is a good
place to start because these rules have not yet had the chance
to inflict their harm on jobs and the economy.
Greenhouse gas emissions are not like the pollutants
targeted under the Clean Air Act. Regulating these emissions
from stationary sources under the existing Clean Air Act will
not yield the past successes achieved for other pollutants. In
fact, the Clean Air Act makes no provision to address the
anticompetitive regulatory costs imposed on domestic
manufacturers of globally traded goods. This will likely lead
to a perverse outcome that puts the most efficient American
manufacturers at a disadvantage to unburden foreign producers
while actually contributing to a net increase in global
greenhouse gas emissions. I am convinced that jeopardizing
American jobs for a worse environment is not in our best
interest.
Our substantial experience complying with the Clean Air Act
tells us that Title I and Title V programs were probably never
intended to regulate global greenhouse gas emissions. In our
world, this is the proverbial attempt to stick a square peg in
a round hole. The committee's discussion draft dated February
2, 2011, would prevent substantial economic harm by removing
greenhouse gas emission regulations under the Clean Air Act.
Over the coming months, we urge Congress to hold hearings
on other aspects of the Clean Air Act. In this regard, we would
suggest five areas worthy of your further study and
investigation. These include first of all the cumulative impact
of Clean Air Act regulations, and I just wanted to note that my
written statement provides a detailed list of the many new and
emerging air pollution rules applicable to and affecting the
steel industry, and you have heard them many times referred to
also today; secondly, the role and expectations including costs
of technology in controlling various pollutants; third, the
efficiency and effectiveness of U.S. EPA's guidance and testing
methods; fourth, the best strategies for addressing multimedia
and multipollutant impacts; and finally, staffing levels and
competencies in the responsible State and federal regulatory
agencies to ensure permitting can move with the pace of
commerce.
As Americans, we all understand that government regulation
is designed to impose certain responsibilities on targeted
entities. Our collective challenge, however, is to achieve an
optimal balance of cost and benefit. When companies like mine
are required to spend the lion's share of our capital budgets
on infrastructure and satisfying compliance obligations, it is
no wonder that job creation and America's global
competitiveness are handicapped. We believe, as President Obama
recently stated in his State of the Union address, that we have
to make America the best place on earth to do business, and we
at U.S. Steel are eager to help you achieve this worthy and
rewarding goal.
[The prepared statement of Mr. Harnack follows:]
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Mr. Whitfield. Thank you very much.
Mr. Goldstene, you are recognized for 5 minutes.
STATEMENT OF JAMES N. GOLDSTENE
Mr. Goldstene. Thank you. Good afternoon, Chairman
Whitfield, Ranking Member Rush, members of the committee. I
appreciate the invitation to speak today on the proposed Energy
Tax Prevention Act of 2011.
My name is James Goldstene. I am the Executive Officer of
the California Air Resources Board, the primary body charged
with protecting the air quality and air-related public health
in California, and charged with speaking for the State on air
quality and climate change issues. I am also a member of the
Board of Directors of the National Association of Clean Air
Agencies, or NACA, an associate of State and local clean air
agencies across the country.
Today I would like to share with my perspective as a State
agency administrator and as an air quality regulator.
The issue before us today concerns the preemption of the
Clean Air Act, one of the most successful environmental laws in
the history of the United States. For 40 years, the sensible
pollution limits established under the Clean Air Act have
dramatically improved air quality and public health, saving
hundreds of thousands of lives and generating over $2 trillion
in economic benefits for the American people. Let me start with
vehicles. Passenger vehicles are not only responsible for 20
percent of carbon pollution but the majority of our oil
dependence. Preempting the authority for EPA to regulate the
greenhouse gas emissions of vehicles would rob this country of
one of its most powerful tools, not just to reduce carbon
pollution but also to reduce our dependence on foreign oil, and
to save consumers money.
Simply maintaining the U.S. Department of Transportation's
authority to regulate fuel efficiency is not adequate. While
the fuel economy standards can complement long-term mobile
source greenhouse gas reduction strategies, they are in no way
a substitute for them. The combined fuel economy and vehicle
greenhouse gas emission standards promulgated by EPA and DOT
last year represent an important and unprecedented partnership.
This approach leverages the strengths of both agencies and
combines the related but different aspects of fuel economy and
greenhouse gas emission standards. As a result, the combined
standards achieve 35 percent less pollution and 25 percent less
fuel consumption, compared to relying on CAFE standards alone.
California embraced these joint standards and the national
program wholeheartedly, accepting the federal program as
equivalent to our own program for model years 2009 to 2016. We
have continued to carry on this unprecedented spirit of
cooperation and collaboration following the historic May 2009
Rose Garden agreements, working with both federal agencies and
automobile manufacturers to develop the next round of
standards. California remains committed to the process of
working closely with our partners to do everything we can to
repeat that success for the 2017 to 2025 standards.
We are building on a firmly established precedent and
foundation of national environmental policy. Since the early
1960s, California has established pollution standards for new
vehicles sold in the State predating even the Federal
Government's effort in this arena, and the pattern has
continued. Since the 1980s, each successive California standard
has gone on to become the national standard. In that time cars
have become 99.7 percent cleaner, all while the auto industry
has innovated to continue providing consumers with the amazing
diversity and quality of affordable vehicles that we enjoy
today. And of course, in this we are joined by our other
States, the so-called section 177 States who have acted like
California to address their own quality and public health
concerns with our cost-effective standards. Preempting
California's ability to set carbon pollution standards for
vehicles would also increase costs to California consumers.
These vehicle standards are one of the most cost-effective
measures in California's clean energy plan, saving consumers an
average of $2,000 over the life of a vehicle.
With regard to pollution from electricity generators and
factories, EPA is utilizing the tried-and-true framework for
reducing pollution. Far from overreaching, EPA is responding to
the clear mandate of the Clean Air Act, the dictates of the
Supreme Court and fulfilling the clear intent of Congress that
newly identified public health risks from air pollutants not
listed in the Act be addressed. The obligation is clear and
unambiguous.
Contrary to claims of a rush to regulation, EPA has been
proceeding methodically. Clearly, EPA has moved forward in the
past 2 years with a tailored, measured approach. This
permitting process is business as usual for State and local air
quality agencies across the country who are using a well-known
process that has been used for decades. EPA has provided
flexibility for State and local agencies in how to run the
permitting program so that the local regulators can work with
the permit applicants. The claim that permitting would grind to
a halt is simply false. All we want is to provide certainty for
industry to invest and create jobs.
This legislation, however, would forestall needed and
available investment in the energy sector now and threaten the
competitiveness of the American economy in the long run. We
know that when government provides clear signals and a
predictable regulatory environment, industry is quick to adapt,
seize investment opportunity and create good jobs along with
profits. For example, in the face of the current recession,
clean technology has been the fastest-growing sector in
California. Thank you, sir.
[The prepared statement Mr. Goldstene follows:]
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Mr. Whitfield. Thank you, Mr. Goldstene.
Dr. Goldman, you are recognized for 5 minutes.
STATEMENT OF LYNN R. GOLDMAN
Dr. Goldman. Mr. Chairman, thank you so much for the
opportunity to testify about this Act. My name is Lynn Goldman.
I am Dean of the George Washington University School of Public
Health and Health Services, a pediatrician and a professor of
environmental and occupational health. Today I represent the
American Public Health Association, or APHA. APHA is the
Nation's oldest and most diverse organization of public health
professionals in the world dedicated to protecting all
Americans and their communities from preventable serious health
threats and assuring community-based health promotion and
disease prevention activities that are universally accessible
across the United States. With your consent, I will place my
written statement in the record.
For 40 years, the Clean Air Act has safeguarded the health
of all Americans including the most vulnerable. By EPA's
estimate, the first 20 years of the Clean Air Act has prevented
more than 200,000 premature deaths, 672,000 cases of chronic
bronchitis, 843,000 asthma attacks and 189,000 cardiovascular
hospitalizations, making it one of the most successful public
health laws of our time.
As you know, in 2007 the U.S. Supreme Court directed EPA to
assess the science in order to decide whether or not to move
forward with efforts to protect the public's health from the
impacts of greenhouse gases. They did so, and they developed an
endangerment assessment. It is because of this endangerment
assessment and our knowledge about the public health effects of
climate change that APHA opposes this legislation, and we are
not alone in this position. In a December 6, 2010, letter to
all Members of Congress, APHA was joined by the American Lung
Association, the American Academy of Pediatrics, the American
College of Preventive Medicine and other leading national and
State public health, medical and clean air advocates in urging
Congress to support moving forward with protective clean air
standards and to oppose any measure that would delay or block
progress toward a healthier tomorrow for all Americans.
Climate change is a public health issue, and over time it
is one of the greatest threats to human health. Scientists from
across the globe have stated in the strongest possible terms
that the climate is changing and that human activity is to
blame. Scientists have unequivocally concluded that greenhouse
gas is causing global warming and the United States is the
leading contributor to these gases. The average increase in
earth's temperature is causing extreme weather events and
increases and decrease in temperature and rainfall. These
regional weather changes may create environmental conditions
like floods, heat waves, droughts and poor air quality that are
not healthy. Some of the health effects we may be concerned
about are strokes, injury, malnutrition, respiratory disease
and asthma, and infections such as vector- and rodent-borne
diseases. Huge costs and human suffering are associated with
these outcomes. We are already beginning to see the health
impacts worldwide. Impacts will only worsen if we continue to
ignore this problem.
I can recite more statistics, but let us take childhood
asthma as an example. Already in the United States, asthma is
the largest cause of hospitalizations and lost days of school
for children but as a pediatrician, I also know the impacts of
this disease on an individual child: a child who grows up
unable to breathe without medication, unable to play outdoors
like other children. Climate change is creating conditions that
not only cause more asthma attacks but also can cause rates of
asthma to rise in children. Moreover, the same activities that
emit carbon dioxide also emit a wide variety of other
pollutants that are harmful to health, pollutants like nitrogen
oxides, air toxics and fine particulate matter. These
pollutants also contribute to various diseases. Along with
global warming, they contribute to formation of ground-level
ozone. That is also unhealthy.
So we do need regulations that control greenhouse gas
emissions but these need to be written and implemented
intelligently in a manner that also reduces exposure to other
pollutants that might come from coal-fired power plants, that
might come from automobiles. Control of pollution from power
plants also increases the healthfulness of air in communities
that are near those plants. These facilities are often closer
to low-income communities that suffer disproportionately from
air pollution.
Measures to control air pollutants under the Clean Air Act
need to work together as a whole to protect health. Cherry
picking among these ignores the fact that health effects are
associated with multiple classes and sources of pollution and
is not consistent with science. Another way we can improve is
by increasing energy efficiency. When we reduce our use of
energy, we reduce emissions of the pollutants associated with
energy and other harmful substances.
In closing, I should say that this bill would do nothing to
reduce uncertainty. There is a problem, a clear and present
public health threat from climate change. There are no answers
to this problem in this legislation. Until Congress is putting
forward solutions, there will be a to of uncertainty in this
country about where we are heading with this problem. Thank you
very much.
[The prepared statement of Dr. Goldman follows:]
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Mr. Whitfield. Thank you very much for your testimony. We
appreciate once again your taking the time to be with us today.
I would say, Dr. Goldman, that all the testimony I heard
today made it very emphatically clear that there would be great
uncertainty by EPA continuing to try to regulate greenhouse
gases, and I would also say that on the light-duty motor
vehicle standards which EPA has promulgated, this legislation
would not change and affects model years 2012 through 2016.
Now, the testimony has shown that that regulation is going to
cost $52 billion to consumers in America and it is going to
lower the temperature 90 years from now by maybe one one-
hundredths of a degree. So what we are trying to do here is
balance. We want to protect health, we want to protect
environment, we want to protect jobs. We want to provide
incentives for investment and we want to be competitive in the
global marketplace.
And Mr. Nelson, when Administrator Jackson was sitting
right there, she said that the greenhouse gas regulations would
really not impact the farming community, but from your
testimony, I think you made it pretty clear that you would not
agree with her statement. Is that correct?
Mr. Nelson. That is correct. She made a couple comments
that at this point in time it didn't impact it but our
understanding, there are over 100 farm entities that do report
to EPA at the present time, and----
Mr. Whitfield. Well, as you said, it will certainly affect
our electricity costs. There is no question about that. It will
affect your fertilizer costs. There is no question about that.
Now, the tailoring rule certainly would exempt many of you,
but Mr. Glaser, that tailoring rule, Mr. Glaser, the tailoring
rule is an explicit violation of the specific language of the
Clean Air Act, isn't it?
Mr. Glaser. I don't see how you could be any more clear in
the statute than by using a number.
Mr. Whitfield. Yes, and the number says 100 or 250 tons per
year.
Mr. Glaser. One hundred or 250. It doesn't say 100,000.
Mr. Whitfield. And she says 100,000. Now, have lawsuits
been filed against the tailoring rule?
Mr. Glaser. Yes, they have.
Mr. Whitfield. And have lawsuits been filed against EPA's
allegation that the fact that they were required by the Supreme
Court to look at this issue on mobile sources because they
found an endangerment finding there that they are automatically
required to regulate stationary sources. Has there been a
lawsuit filed on that?
Mr. Nelson. Yes. I mean, I have to say that what has gone
on is again, as one of the witnesses said, when you try to jam
a square peg into a round hole, you end up with a great deal of
legal uncertainty and you end up with a great number of
lawsuits including EPA's contention that by finding that
automobile emissions endanger public health and welfare and
therefore regulating automobiles, you then automatically have
to regulate stationary sources. That is also uncertain and
doesn't seem to be a logical reading.
Mr. Whitfield. And I might say, we are certainly not trying
to gut the Clean Air Act in any way. We are trying to break the
logjam which was written by a former legal counsel for the
National Resources Defense Council, and he says in this book
that the Clean Air Act was never meant to regulate greenhouse
gases and it does not work in doing so.
Now, Ms. Jackson also admitted today that there is no
technology available to deal with greenhouse gases and that her
rules would not in any way meaningfully reduce greenhouse
gases. But she did say we are going to require efficiencies to
be adopted by stationary sources, and then some people have
said well, there is nothing wrong with that, that is
reasonable, and that is reasonable. I am assuming, Mr. Harnack,
that most businesses want to be as efficient as they can be and
they don't need government bureaucrats telling them to do that.
Is that correct or not?
Mr. Harnack. I mean, in our case, that is correct. We have
done a lot of energy efficiency projects. We have a corporate
energy efficiency initiative that has been in place for many
years now, and we think that we have captured a lot of the low-
hanging fruit. Some of the challenges now is that some of the
projects that we have just do not have suitable return for us
to invest very limited capital in based on our situation and
the business climate right now.
Mr. Whitfield. But they seem to be working on the premise
that in order to be efficient, the government regulators have
to tell you to be efficient and how to do it, and if the State
regulators make a ruling that you should do it this way to meet
these standards, EPA is not precluded from coming back later
and disagreeing with that and making you even change that. Is
that right, Mr. Glaser?
Mr. Glaser. Yes, I completely agree with that. Yes, sir.
Mr. Whitfield. Well, my time has already expired, so Mr.
Rush, I recognize you for 5 minutes.
Mr. Rush. Mr. Nelson, as a fellow Illinoisan and as a
supporter of Illinois farms, I certainly want to welcome you
here to this subcommittee, and I understand your concerns about
potential impacts on small agricultural operators if EPA had
not adopted the tailoring rule. Requiring permits for these
sources makes no sense. That is why I was pleased to hear
Administrator Jackson assure us earlier today that the
tailoring rule avoids any energy and greenhouse gas
requirements on small sources including farms. Did you hear her
say that?
Mr. Nelson. She did allude to that, but I think the one
thing to keep in mind when she was talking about agriculture,
we are big consumers of energy and we rely on energy so if
indeed you were to put undue regulations on some of the inputs
that we utilize in agriculture, it has a tremendous impact on
production agriculture.
Mr. Rush. Well, and being consistent with her testimony,
does any farm have to report under the greenhouse gases
reporting rule?
Mr. Nelson. Well, it would depend on a number of things. If
you were not reclassified, and we looked at stationary sources,
livestock would fall under that category as it stands right
now. We have asked that of the EPA of whether they are going to
reclassify stationary sources as it relates to agriculture.
They have not done it as of now. Being a livestock producer, it
creates a huge burden when you look at the dollars that we are
talking of assessing livestock operations just to stay in
business.
Mr. Rush. But as of today, there is no farm that you are
aware that has to report under the greenhouse gas reporting
rule as of today, as it stands right now?
Mr. Nelson. As it stands right now, some of those that fall
into a certain category, there are approximately 100 based on
what we know that do report to the EPA.
Mr. Rush. The regs went into effect on January 2nd of this
year. You said there are at least 100 farms who are now subject
to these rules. Is that what you are saying?
Mr. Nelson. Yes, and if you require a manure management
system, they do report as of now.
Mr. Rush. I want to switch my questioning to Dr. Goldman.
Dr. Goldman, do you believe that it is appropriate for Congress
to pass legislation that substitutes Congress's views that
carbon pollution does not endanger public health for your and
other scientists' interpretation that carbon pollution does
endanger public health?
Dr. Goldman. No, I don't believe that would be appropriate.
Mr. Rush. Can you be more concise and tell the subcommittee
why you support the Clean Air Act and the steps that the EPA is
taking to put limits on carbon pollution?
Dr. Goldman. I support it because at this point in time it
is the only method that the EPA has for being able to deal with
this very clear and present threat, and that is the Clean Air
Act and the emissions that cause global warming are air
emissions and they can be regulated under the Clean Air Act,
and EPA has been able to make clear public health findings that
indeed they are threatening the Nation's health.
Mr. Rush. Thank you. Mr. Chairman, I yield back.
Mr. Whitfield. Yes, sir. Mr. Shimkus, you are recognized
for 5 minutes.
Mr. Shimkus. Thank you, Mr. Chairman, and I am just going
to go quick, but in response to Dr. Goldman's response to the
question, the elected representatives have never passed any
piece of legislation that has been signed into law to regulate
greenhouse gas. I am not asking for a response, I am just
telling you, the elected representatives, the people who send
us here from our districts, we have never, we have never passed
legislation that has gone into law to regulate greenhouse gas
emissions.
If you would put up the picture on the slide there, this is
for my colleague from Illinois, my friend, Mr. Nelson. This is
kind of going off script on greenhouse gases. But Phil, tell me
what is going on there.
Mr. Nelson. That is a harvest operation, I believe
combining soybeans.
Mr. Shimkus. And that smoke in the back, what is that? Is
that dirty petroleum product?
Mr. Nelson. No, that is dust.
Mr. Shimkus. Dust made up of?
Mr. Nelson. Basically material coming off the plant after
it is----
Mr. Shimkus. Dried leaves, stems. They keep the beans and
spread out the chaff, what we would call it.
Mr. Nelson. That is correct.
Mr. Shimkus. Is there not a fear from the agricultural
community that the EPA is moving to regulate that activity?
Mr. Nelson. Yes, there is, and as a matter of fact, I made
the comments many times if you look even at the Kyoto Protocol,
we would have to equip our harvest machines with dust
collectors if you were going to take it to the nth degree.
Mr. Shimkus. Which would be additional capital expense or
maybe a water trailer and water it down to collect chaff,
chaff. This is dust from leaves and stems in agriculture. That
is pretty close to my home, and I took that as I was driving
back from taking my kids. He was in the field. I pulled off on
the side, took about five photos. I took that around in
October, the election year, to the Farm Bureau meetings and
held it up on my phone and said this is what--this is what we
have in an EPA gone awry when they are going to spend time,
effort, energy regulating chaff, and of course, in my
congressional district, the people are just unbelievably
astounded that we would do such a thing. So thank you for that.
Let me just ask, does uncertainty raise the cost of
capital? This is just a traditional, just a business question.
Dr. Goldman, does uncertainty raise--you may not know. Does
uncertainty raise the cost of borrowing money?
Dr. Goldman. Not in my area.
Mr. Shimkus. The answer is, it definitely does. It raises
the interest, the rate on raising capital. So the reason why I
ask this question is because certainty is what everybody is
talking about. Mr. Goldstene says this produces more certainty.
This greenhouse gas regulation is good for business. We have
more certainty. That is correct, right? That is your testimony?
Mr. Harnack, do you want to respond? Do you have more
certainty today in U.S. steel production or less?
Mr. Harnack. Definitely less, and the one thing----
Mr. Shimkus. So the cost of capital increases for
expansion?
Mr. Harnack. The cost of capital is something that we know
that there is not an alternative to the integral steel process
presently, and the fact that we require carbon to create new
steel, and the integrated process is slightly different than
the electric furnace process because the electric furnace
process----
Mr. Shimkus. Go quickly.
Mr. Harnack [continuing]. Requires recycled scrap. We mine
ore that is required to make new steel, and there is not enough
recycled scrap in the world to provide steel for all the
applications.
Mr. Shimkus. So this creates more uncertainty for your
business?
Mr. Harnack. Yes.
Mr. Shimkus. And is there more uncertainty for the Chinese
steel mill or less?
Mr. Harnack. It doesn't apply to them.
Mr. Shimkus. So there is less uncertainty, lower cost of
capital for Chinese steel which would make Chinese steel more
competitive in this country, another aspect.
Mr. Nelson, in the agriculture community, more uncertainty
or less?
Mr. Nelson. Absolutely more, and you look at our
competitors in South America and Europe that we compete
against, and you just--the fear of the unknown about how many
more undue regulations are going to make us more uncompetitive
in the environment that we are a part of.
Mr. Shimkus. Let me go to our economist. More uncertainty,
less, Dr. Thorning, this premise on how we create jobs, how do
we raise capital?
Ms. Thorning. Well, I think definitely more uncertainty,
and the BACT rules released in November really don't help, so I
think it is pretty clear that this regulation will have a
negative impact on jobs and economic growth.
Mr. Shimkus. Thank you very much.
Mr. Whitfield. Thank you, Mr. Shimkus.
I recognize the gentleman from Michigan, Mr. Dingell, for 5
minutes.
Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
This question is to Mr. Goldstene. Does CARB plan on
finalizing California GHG emissions standards before the
federal standards are finalized? Yes or no.
Mr. Goldstene. Yes.
Mr. Dingell. Thank you. Now, would you tell me and explain
for the record how you and your staff have already stated fuel
economy goals of 50 to 62 miles per gallon before the
information and analysis that is available to complete that
process has been made available to the commission?
Mr. Goldstene. Congressman, we have made a public
commitment just recently that we are going to wait to propose
our rule until the beginning of September, which is the same
time that DOT and EPA will propose their rules. We have not
made any public announcements that we have chosen or predecided
what the standard should be. We have been discussing a range of
standards in public workshops, and I think that is maybe where
you are hearing that.
Mr. Dingell. So what you are telling me is, you have stated
the fuel economy goals are going to be 50 to 62 miles per
gallon before you have gotten the information and the analysis
necessary to complete the process. Is that right?
Mr. Goldstene. No, sir, that is not what I am saying. I am
saying that----
Mr. Dingell. Well, what are you telling me then, please?
Mr. Goldstene. What I am saying that is that we are working
with DOT and EPA on a series of studies. We are waiting to
complete those studies, which are going through peer review,
and we will use all the information----
Mr. Dingell. I only have 34 seconds here.
Mr. Goldstene. Sorry.
Mr. Dingell. Have you gotten the information and the
scientific work done to support those numbers? Yes or no.
Mr. Goldstene. We have a lot of information that is being
peer reviewed.
Mr. Dingell. Do you have the information that would support
that statement in proper form to stand a judicial review?
Mr. Goldstene. We may. It depends on what the final peer-
reviewed studies say and what we----
Mr. Dingell. Thank you very much.
Mr. Goldstene [continuing]. Propose as a regulation with
DOT and EPA.
Mr. Dingell. We had a little trouble getting the answer but
I do thank you for your kindness. Now, does CARB conduct
analysis on job impact and economic consequences of the
standards that it is considering?
Mr. Goldstene. Yes.
Mr. Dingell. Would you please submit that analysis on the
fuel efficiency standards that you are suggesting for purposes
of the record, please?
Mr. Goldstene. We would be happy to. We haven't completed
them for the new set of standards. We have them for the prior
standards.
Mr. Dingell. Now, would you tell us about the extent of
CARB's safety expertise? What safety expertise do you have? Do
you have any responsibility under the California statutes to
deal with the question of safety or not?
Mr. Goldstene. No, but that is why we are working with DOT.
Mr. Dingell. Thank you.
Mr. Goldstene. And we have jointly funded a study on this
issue.
Mr. Dingell. Thank you very much. Now, 2 days ago, CARB
sent letters to the CEOs of all the automobile alliance asking
them to distance themselves from the alliance's complaint in a
letter to Chairman Darrell Issa that the CARB was moving
unilaterally forward in regulatory process. CARB disputes that
claim by saying, ``We recently issued a joint statement with
EPA and NHTSA promising that we would release proposals for the
next set of GHG standards and NHTSA's on the same date
September 1, 2011.'' Now, yes or no, isn't it true that CARB
made a joint statement on timing with EPA and NHTSA only after
the alliance sent the aforementioned letter to Chairman Issa
and only after CARB received a letter and only after the Obama
Administration in response to the letter asked CARB to stop
getting out in front of the federal process? Yes or no.
Mr. Goldstene. There are a lot of questions there. We have
been working with EPA, DOT and the White House on the next
round of standards, and all along we have been making public
statements and commitments that we would not get out ahead of
our partners at EPA and NHTSA.
Mr. Dingell. Let me read this again. Two days ago, CARB
sent letters to CEO members of the auto alliance asking them to
distance themselves from the alliance's complaint in a letter
to Chairman Darrell Issa that the CARB was moving unilaterally
forward in the regulatory process. Is that true or false?
Mr. Goldstene. We sent a letter to the CEOs----
Mr. Dingell. Good.
Mr. Goldstene [continuing]. Saying--being critical of the
alliance letter to Congressman Issa. Yes.
Mr. Dingell. The answer to that is yes. Please, I have
limited time. Now, CARB disputes that claim by saying, ``We
recently issued a joint statement with EPA and NHTSA promising
that we would release proposals for the next set of GHG
standards and NHTSA's on the same date September 1, 2011.'' Is
that true?
Mr. Goldstene. That is true.
Mr. Dingell. OK. Now----
Mr. Goldstene. But that is not new. That was just putting
in writing what we have been saying all along.
Mr. Dingell. Please. May I continue?
Mr. Goldstene. Yes, sir.
Mr. Dingell. Isn't it true that CARB made the joint
statement on timing with EPA and NHTSA only after the alliance
sent the aforementioned letter to Chairman Issa and only after
CARB received the letter and only after the Obama
Administration in response to the letter asked CARB to stop
getting in front of the federal process?
Mr. Goldstene. It is true that we sent the letter after the
alliance sent their letter.
Mr. Dingell. Thank you. Now, would you tell us if it is
your view that global warming problems should be dealt with
under the Clean Air Act or is there a better way of dealing
with it?
Mr. Goldstene. The Clean Air Act is the tool we have, the
tool that EPA has.
Mr. Dingell. But is it going to be simple and easy to do?
Is it going to be relatively free from litigation and questions
or is it going to be a very complex grind where you will have a
number of different options and might wind up with quite
different standards for different things in different States?
Mr. Goldstene. I think that the EPA is hoping to avoid that
by using their power under the Clean Air Act.
Mr. Dingell. I know, but are they going to be able to, in
your opinion?
Thank you, Mr. Chairman.
Mr. Goldstene. I think there is a way to make sure that you
make the rules as easy to understand nationally as possible,
and we have proven that over and over again through the
adoption of our clean car standards in California that get
adopted then by other states and ultimately the Federal
Government.
Mr. Whitfield. I recognize the gentleman from Michigan for
5 minutes.
Mr. Dingell. You have been very kind, Mr. Chairman. Thank
you.
Mr. Upton. Thank you, Mr. Chairman. I will confess that
several years ago I voted against cloning, and days like today,
I wonder why as I have been in a number of different events and
I was sad to miss the testimony by all of you during this
panel, but I have a couple of questions.
Dr. Thorning, you indicated--and I talked to the earlier
panels, in Michigan these regulations have been predicted to
reduce our GDP by $18 billion, destroy 96,000 jobs, reduce
household incomes by nearly $1,600. In your testimony, I
believe, or in response to a question, you talked about a model
that showed by 2014 that $25 to $75 billion decrease in capital
investment would in fact result in an economy-wide job loss of
somewhere between 476,000 and 1.4 million when direct and
indirect and induced effects are included, and as a result, GDP
would be $47 billion to $141 billion less in 2014. Can you
expound a little bit about how you came up with those numbers?
Ms. Thorning. Yes. Looking at the regulated industries that
are initially going to come under EPA's regulations, we
concluded that those represented about--that the investment in
those industries normally represents about 25 percent of all
U.S. investment on an annual basis, and then we did some
research on how the risk premium for investment in those
industries might be impacted by the uncertainty surrounding EPA
regulations, the tailoring rule, whether it will stand, so
forth, and we concluded that the risk premium probably would
increase between 30 and 40 percent for those industries.
Therefore, if those industries represent approximately 25
percent of all investment, we concluded that that would
represent looking at historical data a decrease in investment
of between $25 billion a year and $75 billion a year.
Now, remember that overall gross private domestic
investment is like $1.7 trillion, so we thought that was a
pretty conservative estimate and we used a conservative
estimate of the elasticity of response to investment to changes
in the cost of capital, and we ran through that the IMPLAN
model, which is a near-term model good for short-term
predictions, not good for long-term predictions, it produced
results with the direct, the induced and the ancillary impacts
of nationwide job reduction compared to the baseline forecast
of between 476,000 fewer jobs to as many as 1.4 million fewer
jobs in the year 2014, and of course, some industries are more
impacted than others, and GDP of approximately $47 billion
smaller to $141 billion smaller, and this is just targeting
these industries right now that are impacted and the large ones
that are included in EPA's current regulatory regime.
Mr. Upton. Thank you.
Mr. Goldstene, in announcing his new Executive Order on
regulations, President Obama cited one national program as a
good example of eliminating a tangle of regulations. The tangle
was the result of three different agencies--NHTSA, EPA and
CARB--trying to regulate basically the same thing. One national
program eliminated the tangle for 2012 through 2016 by getting
EPA and NHTSA to coordinate with each other and by California
agreeing to defer to the federal regulations. It now appears
that for 2017 and beyond, we are in the process of re-creating
the tangle that the one national program eliminated since
California is planning to promulgate a new set of GHG regs. Why
shouldn't it be that California agree that from now on there
will be a national program consisting of NHTSA and EPA
regulations only? Why does California need to duplicate or move
forward with a different plan?
Mr. Goldstene. Mr. Upton, as you know, California has a
special mention in the Clean Air Act because our air quality
problems have been so severe over the years and they are still
severe in certain areas of the State like in Los Angeles and
the central valley. So from the perspective of a State that
still has significant air quality problems, we have to fight to
keep our authority to promulgate the rules that are needed to
protect the public health, and these vehicle standards are one
of the ways that we do that. We are sometimes or often joined
by other States under section 177 that can use our rules if
they choose to and that sometimes creates what the auto
industry had called a patchwork quilt, but the fact is, at most
you would only have two standards, and over the past 40 years
what we have seen over and over again is that if the two
standards become one relatively quickly, and that is what just
happened with the 2012-2016 standards, and this time unlike
before, we are working very closely with EPA and DOT, using the
same information, relying on the same peer-reviewed studies,
and working hand in hand on developing and designing our rules.
They may come out slightly differently. Our process is slightly
shorter, so we may complete our process before EPA and NHTSA
finish their processes but we are fully committed to
harmonizing them as soon as they are done.
Mr. Whitfield. Ms. Capps, you are recognized for 5 minutes.
Ms. Capps. Thank you, Mr. Chairman, and I want to start
out, I have questions for you, Mr. Goldstene, and also one for
Dr. Goldman, and as someone who represents a district in
California where we can look out to see whether the brown haze
is coming up from the L.A. basin on certain days and have lived
there long enough to notice the rise as a former school nurse
of school-age asthma and being aware that there were certain
days in the L.A. basin when frail adults were told to stay
inside and kids couldn't go out on the playground. That is one
of the special things about living in our State and why I am so
appreciative of the work that you as Executive Officer of the
California Air Resources Board, or CARB, and I want to tell
you, I appreciate the regulation of the marine vessels, which
have added a great deal to their air quality in my part of the
State and all along the coastal areas.
You have some--we have been hearing today about the fact
that addressing climate change will destroy the economy. You
have some practical experience because California is well
underway in implementation of a State law to conduct carbon
pollution. Can we cut carbon pollution, Mr. Goldstene, without
harming the economy? In a few words.
Mr. Goldstene. Yes, we can. We have also run economic
analysis like the kind that Dr. Thorning described using
macroeconomic models, and we have used a model called EDRAM and
BEAR. I am sure Dr. Thorning knows those models. And what we
have shown overall in the California economy is there is a very
slight net positive with climate regulations under our plan
economically.
Ms. Capps. Thank you. And a very brief assessment of how
workable EPA's approach is.
Mr. Goldstene. I think it is very workable. I have been
here all day, and I have seen the complaints, but the fact is,
I think most of the claims and worry while the worry is real, I
think when you look at the specific details, for instance, the
cost of capital, the cost of capital is influenced by many,
many factors, not just by the possibility of a regulation.
Ms. Capps. And you are also a member of the board of
directors for the National Association of Clean Air Agencies.
Mr. Goldstene. Yes.
Ms. Capps. Just a couple words on your understanding of
whether other States are finding EPA's approach to be workable
as you talk with people from other States.
Mr. Goldstene. Yes. There are many States that are
embracing EPA's process and effort. Of course, there are States
that are also concerned about it but I think on the whole----
Ms. Capps. Overall, are we moving in the right direction?
Mr. Goldstene. Overall, it is moving in the right
direction, but I do think people in other States, my colleagues
and the governors in many other States see the potential for
the great economic innovation that can come from this and job
creation that can come from this kind of rulemaking.
Ms. Capps. Thank you, Mr. Goldstene.
Dr. Goldman, I recently heard a story about back when the
Clean Air Act was first being debated on the House floor. One
Congressman quoted a mayor, and this is the quote: ``If you
want to make this town grow, it has got to stink.'' I think
that has been proven wrong. Our economy has not shriveled over
these past years of trying to improve the air quality. Instead,
the GDP has grown 207 percent. My question to you representing,
as you do, the American Public Health Association, can you
please share with us the health benefits and really the
economic benefits as a result of responsible limits to
greenhouse gases, the approach the EPA is taking?
Dr. Goldman. The benefits are potentially quite enormous,
and what we are looking at in terms of threats from climate
change have to do with health impacts from adverse weather
events like flooding and drought, adverse health impacts from
dirty air, and also adverse health impacts form changing the
distribution of disease-bearing vectors like insects and
rodents, and these are all enormous threats. I think the most
immediate ones that we are seeing have to do with the
increasing frequently of severe weather events which have a
major impact on people's health.
Ms. Capps. And with that, I am going to yield back the
balance of my time.
Mr. Whitfield. Thank you, Ms. Capps.
Mr. Scalise, you are recognized for 5 minutes.
Mr. Scalise. Thank you, Mr. Chairman. First a question for
Mr. Nelson with Farm Bureau. I appreciate you being here to
discuss the importance of the impact of greenhouse gas
regulations and how they would impact specifically the
agriculture industry. I know you know the essential role that
the agriculture industry plays in America's way of life but
also especially as it relates to our economy and the small
businesses that are such the heart of the agriculture industry.
I represent a part of southeast Louisiana. We have a larger
presence of dairy farmers, in my district, and really concerned
about the impact that EPA regulations would have on these small
businesses, you know, especially as Administrator Jackson has
talked about potentially down the road doing some things there.
The dairy industry in Louisiana contributes about $115 million
to Louisiana's economy, and those proposed EPA regulations
would devastate many of these small businesses who literally
are operating on the margins. I think you were here when the
Administrator was giving her statements, but since the EPA
Administrator has left the door open to regulation of the
agriculture industry, can you speak specifically to how it
would potentially affect especially those small dairy farms in
districts like mine and yours in Illinois and throughout the
country?
Mr. Nelson. Well, really I would address it two different
ways. You have to look at the livestock industry and what is
being proposed or thrown out there in regards to a Title V
permit if isn't reclassified. It will have a tremendous impact
on the dairy industry. I think the numbers that we are looking
at, you know, are $175 for a dairy cow, which you just cannot
make any money----
Mr. Scalise. But it would cost an additional $175 per dairy
cow if those EPA restrictions were put in place?
Mr. Nelson. That is correct.
Mr. Scalise. Gee, whiz.
Mr. Nelson. And not only that, then you look at the
production side of things as Congressman Shimkus alluded to,
the threats are out there as far as dust permits. We have got a
couple States right now that can't even deal with the dust
standards as it is proposed today, let alone try to make those
twice as stringent as what we are hearing coming out of the
Administration. So it really impacts a number of facets of
agriculture if these regulations proceed forward and are put in
place.
Mr. Scalise. And that seems to actually go in sync with
some of the statements that were made on the previous panel.
Mr. Alford, who is the President and CEO of the National Black
Chamber of Commerce, had given some testimony and he talked
about a number of impacts, and they had done a study, and one
thing he looked at, on the poorest 20 percent of our
population, he said this kind of scheme by EPA would increase
the cost of home energy by 45 percent, motor fuel by 25
percent, and he said it would also increase groceries by 35
percent on our Nation's poorest families. So can you talk
about, especially from the agriculture industry, what would the
impact of a 35 percent increase in food prices on our poorest
families in this country have?
Mr. Nelson. Right now, consumers have probably the best
bargain in the entire world where we spend about 10 cents out
of every disposable dollar for food. You look at Japan and some
of the other developed countries that do have regulatory
frameworks that could parallel some of the things that are
being proposed by this Administration, so you could easily make
the case of doubling what we pay for food.
Under Waxman-Markey, we had a lot of sensitivity with that
bill as it related to what it would do to food prices, what it
would do to energy prices if you didn't sight the nuclear power
plants, if you took almost 59 million acres out of production,
row crop agriculture, what that would do to the consumer and
the grocery store. So, you know, it is going to have a dramatic
impact if indeed we don't use some common sense to try to look
at a regulatory framework that is workable without really
impacting our industry to the degree that----
Mr. Scalise. Thank you. And I know we are trying to get EPA
to look at the job loss impact of all of the things that they
are doing in these regulations but I would be curious to see if
EPA is going to do an impact on the lives that would be lost if
you had a 35 percent increase in the food that our poorest
families by where you literally would be taking food of the
table of American families because of these regulations on the
agriculture industry.
Ms. Thorning, I know I am running low on time but Ms.
Thorning, I am not sure if you had seen the study that we have
seen on the Spain experiment with this kind of, you know, this
cap-and-trade scheme where they regulate and they talked about
all the green jobs that I would create, and of course it turned
out in Spain after they looked at it, all of the promises of
those new jobs turned out to be a mirage and they ended up
losing two jobs for every job they created and in fact for each
new job they created, only 10 percent were actually permanent
jobs, so in essence, you lost 20 full-time jobs for every real
job that you created in this industry. Have you looked at any
of those studies?
Ms. Thorning. Yes, I have seen that study. There is also
one done by a German think tank that looks at the cost of solar
energy and electricity prices in Germany. There is one in
Denmark that shows the same thing. The issue is, when you
substitute more expensive energy for cheaper energy, you might
gain some jobs in that sector, you know, the green energy
sector but you are going to lose them overall because you are
making other products, other producers pay a lot more for
energy, and that finding is mirrored in the work that groups
like ours have done with the Department of Energy's own NIMS
model analyzing Waxman-Markey, Kerry-Lieberman. We always get
some more green jobs because, you know, we are forcing quicker
uptake of energy efficiency but overall the macro models show
job loss, and that is a similar conclusion that you have got--
--
Mr. Scalise. Thank you, and I yield back, Mr. Chairman.
Mr. Whitfield. Mr. Doyle, you are recognized for 5 minutes.
Mr. Doyle. Thank you, Mr. Chairman. First, let me commend
you and the ranking member for your stamina and the panel for
your patience, and welcome to all of you. I want to especially
welcome Fred Harnack from U.S. Steel. Just by way of full
disclosure, Fred and I go back quite a bit. He started out at
Edgar Thompson, where my father worked for 30 years. Then over
to the Homestead Works plant, an urban plant in West Mifflin
and Mon Valley Works, and Fred probably has an incredible
knowledge of my congressional district and the steel industry,
which are two things that I hold near and dear to my heart, and
I suspect that we were both crying in our Iron City beers a
little bit on Sunday after that game was over, but Fred, it is
good to have you here.
You know, I follow the steel industry's performance
closely, and I am certainly aware of the current difficulties
that integrated steel mills face. We know the cost of raw
materials has gone up greatly and that continues to affect the
performance of manufacturers, and also it is an industry that
is uniquely affect by it has international trade pressures too.
This is why as we were trying to develop a comprehensive energy
bill, that we were particularly sensitive about those things
and tried to put language in the bill that would address some
of the pressures that industries like steel had that were
carbon intensive but had trade pressures too.
On the earlier panel, I talked to Administrator Jackson and
I asked her how this new greenhouse gas permitting process
would affect facilities like steel mills, and Fred, I wonder if
you can tell me right now what capacity U.S. Steel is currently
operating at?
Mr. Harnack. Presently we are probably somewhere between 75
and 80 percent. We do have one plant idled and a number of
other facilities are not as full as we would like them to be.
Mr. Doyle. So, you know, all of us are hoping that the
industry reaches a point where you are able to ramp up to 100
percent of our operating capacity but assuming you were able to
ramp up to 100 percent of your operating capacity, would U.S.
Steel be required to apply for a greenhouse gas permit to cover
the increased activity?
Mr. Harnack. Presently, we are doing the greenhouse gas
report that is required. We only need to file for the permits
that are above the threshold, and right now that exists only in
our expansion plans in our Minnesota ore operations. The
balance of the facilities are permitted for the capacity that
we publish, and there would not be any additional needs to
permit for that at this time.
Mr. Doyle. Right. So in other words, any existing facility
right up to your full capacity, you wouldn't be affected by
this, only if you had an addition, if you put up a new plant or
if you expanded a current facility and got over that limit that
would require a permit?
Mr. Harnack. That is right, based on the present regulatory
requirements.
Mr. Doyle. So your plants that are currently operating in
the United States, are any of them going to have to apply for
renewals under their Title V permits for non-greenhouse gas air
pollutants under the Clean Air Act?
Mr. Harnack. There is--yes, we do have periodic permit
renewals. Actually we are working on two in Allegheny County
right now as well as have just recently obtained them in our
Alabama operation.
Mr. Doyle. Now, when you apply for these renewals, will
your new permit have to include any pollution controls for
greenhouse gases?
Mr. Harnack. We will be required to provide all the
regulatory information and regulatory requirements as it
develops, you know, by the EPA and the government.
Mr. Doyle. So you have to report your emissions but you are
not required to implement any new control technologies as long
as you are not expanding your current capacity?
Mr. Harnack. Only on the newly permitted facilities that
are above the threshold.
Mr. Doyle. So as we speak today, even though you are going
through Title V permit renewals, this would not require you in
your existing facilities other than to report to EPA wouldn't
require you to implement any new control technologies?
Mr. Harnack. That is right.
Mr. Doyle. So it seems to me as we look at these rules and,
you know, today we are focusing--I mean, this rule focuses
primarily under the tailoring provision coal-fired and fossil-
fired utility plants and oil refineries. Right now this has no
direct impact on the steel industry unless you would put up a
new plant or expand an existing plan. Is that correct?
Mr. Harnack. Based on the present language on the
greenhouse gas requirements but there are other requirements
coming out from EPA that are going to require substantial
modifications.
Mr. Doyle. Right, but we are focused today and this bill
focuses on the GHG emissions, not other things. That is what
this focus is.
Mr. Harnack. Right.
Mr. Doyle. OK. Thank you very much, Mr. Chairman. I see I
have 8 seconds, and I will yield it back.
Thanks, Fred.
Mr. Whitfield. Thank you. Mr. Gardner, you are recognized
for 5 minutes.
Mr. Gardner. Thank you, Mr. Chairman, and again, thank you
to the witnesses for being here today.
And Mr. Nelson, I would like to direct this question to
you. In my conversation with Administrator Jackson on
agriculture and agriculture's exemption so what she phrased it
as from this going until 2013, what happens after 2013?
Mr. Nelson. Well, that is the good question that probably
needs to be asked because the rules have not been put into
place so there is a lot of speculation as to where we will be
as it gets to that time frame.
Mr. Gardner. And so as of 2013 and beyond, this very well
may be a situation where EPA comes in and starts requiring more
permits in agriculture.
Mr. Nelson. We believe that that probably will be the case,
I can tell you, and we are not talking about the Clean Water
Act today but just as a for instance, the amount of regulations
that are coming out with nutrient management plans, MPDES
permits, numeric standards, there is a whole tidal wave of
regulatory challenges staring us in the face, so I think we
would expect more of that.
Mr. Gardner. And particularly too the greenhouse gas
emissions regulation, and it goes a little bit to the question
directed to Mr. Harnack as well. Costs of direct regulations,
the indirect costs versus direct costs. When we say that
agriculture--when Administrator Jackson says that agriculture
is exempt, your energy costs will increase as a result of GHG,
correct?
Mr. Nelson. Yes.
Mr. Gardner. The cost of fertilizer will increase as a
result of regulation, correct?
Mr. Nelson. Yes.
Mr. Gardner. The cost of farm equipment will increase as a
result of the regulation?
Mr. Nelson. Yes.
Mr. Gardner. Mr. Harnack, will you see costs increase as a
result of the GHG regulation?
Mr. Harnack. Yes, we will.
Mr. Gardner. And so there are costs that you are facing
whether direct or indirect which goes directly to your ability
to create new jobs in the steel industry or to expand farms to
future generations. Is that correct?
Mr. Nelson. That is right.
Mr. Gardner. And to Dr. Thorning, I don't know how familiar
you are with the economy of California, but based on your
experience as an economist, what you have seen in the State of
California, the fact that 650 CEOs have said that it is the
least desirable place to do Business, some of the regulations
that we have seen, is California the kind of business model job
creation market that we would like to export to the rest of the
country?
Ms. Thorning. I think one would have to look very carefully
at what the impact of AB32 may have had on companies' desires
to stay and manufacture in California. I think you have to look
at the size of their budget deficit, their very high
unemployment rate, their, you know, low relatively difficulty
in the housing market. I don't think California is a poster
child for how we want to go forward.
Mr. Gardner. Mr. Goldstene, do you think California is a
jobs creation model for the rest of the United States?
Mr. Goldstene. I think there are many aspects of what is
going on in California that should be copied by other States.
We are the technology leader in the country. We are seeing a
huge spike in investment since the passage of AB-32. People are
coming here looking to have us move forward on our rules,
provide the certainty that businesses want and also provide the
certainty that creative, inventive Americans have proven over
and over again to come up with the great ideas that are adopted
here and other places.
Mr. Gardner. Dr. Thorning, will the investments that are
required to comply with these kind of regulations, greenhouse
gas regulations, to produce these kinds of jobs, will they
produce enough jobs in the green industry to offset the jobs
lost elsewhere?
Ms. Thorning. Well, I think it is highly unlikely because
you are making investments that don't really add anything to
the bottom line. They are being made, you know, to reduce
greenhouse gases. So that is money that can't go into
productivity enhancement investments.
Mr. Gardner. So the bottom line is, does this regulation
that we have been dealing with, what this bill deals with, does
it affect our ability to be competitive globally?
Ms. Thorning. I think it does in a negative fashion.
Mr. Whitfield. Mr. Griffith, you are recognized for 5
minutes.
Mr. Griffith. Mr. Chairman, I just want to thank all the
folks here for going through the day with us. I was not up here
the whole time. At 4 o'clock I finally decided that I had to
break down and eat something, so I went out in the other room
and I was listening to your testimony, and I appreciate you all
being here. I think all the questions have been asked, Mr.
Chairman, so I yield my time back to the Chair.
Mr. Whitfield. Thank you, Mr. Griffith. I want to thank all
of you once again for your valuable testimony and your time,
and we all have a lot of challenges before us. We don't agree
on everything but that is what America is all about, so
hopefully from hearings like this we can craft the best
policies to move forward. So thank you very much.
Mr. Rush. Mr. Chairman, before we adjourn, first of all, I
want to thank all the witnesses on this panel and all the
witnesses that preceded this panel, and I certainly want to let
them know that they have really enlightened us. I haven't
agreed on most of the testimony but at least I feel as though I
am better informed, so I really appreciate the investment of
your time. Thank you so very much.
And before we adjourn, I do have an unanimous consent
request but I guess you can dismiss the panel first. They don't
want to hear a unanimous consent request.
Mr. Whitfield. Well, without objection, we will----
Mr. Rush. I have----
Mr. Whitfield. I hate for them to leave before we leave.
Mr. Rush. Well, I just have an unanimous consent request
that statements and letters from the following organizations be
placed in the record: the American Sustainable Business
Council, the Calpine Corporation, the National Council of
Churches, 68 faith communities throughout this Nation, the
Natural Resources Defense Council, the Northeast States for
Coordinated Air Use Management, the Truman National Security
Project, the Union of Concerned Scientists, who also sent a
letter that was also signed by 2,505 scientists and economists,
and lastly, yesterday's letter from Mr. Waxman to Mr. Upton.
Mr. Whitfield. And then we would like to enter this record
from the National Association of Realtors, so without any
objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Whitfield. The members will have 10 days to submit any
questions for the record, and the record will be open for 30
days. Thank you.
[Whereupon, at 5:26 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared Statement of Hon. John Sullivan
Chairman Whitfield: thank you for holding this legislative
hearing today on the Energy Tax Prevention Act of 2011. This
important legislation will help protect American jobs and
businesses of all kinds from the regulatory onslaught of EPA's
job destroying greenhouse gas regulations (GHGs) by prohibiting
EPA from regulating GHG's under the Clean Air Act (CAA) and
repeal the steps the agency has already taken to do so.
I have several companies in my district ranging from
chemical, manufacturing and energy companies that are scared to
death of EPA's pending rules on GHGs. The energy industry
employs over 320,000 workers in my state, and I intend to see
that number grow by vigorously supporting this legislation.
Today, I want to make special mention of the concerns of
the agriculture interests in Oklahoma, since it is the second
largest industry in my state. The Oklahoma Farm Bureau is
deeply concerned that the costs imposed by EPA's GHG rules on
utilities, refiners and manufactures to comply with these new
regulations will trickle down the farming and ranching
community, resulting in higher costs of production and food
costs for American families, exactly what we don't need in a
struggling economy!
Additionally, many farmers and ranchers will have to obtain
Title V operating permits that will cost agriculture interests
close to $900 million. All told, 17,000 farms nationwide are
impacted by EPA's GHG regulations. The point here is that even
with EPA's so-called ``tailoring rule,'' which unilaterally
raised CAA statutory thresholds to require GHG permitting for
only the largest industrial sources of GHG emissions,
industries of all stripes and consumers from every economic
back grounds will suffer under the weight of EPA's excessive
regulatory scheme.
The Energy Tax Prevention Act is about protecting American
jobs by preventing the EPA from unilaterally imposing a costly
cap and trade style regulatory tax on the American people.
Simply put, what the EPA and the Obama Administration has been
unable to legislate through a cap and trade system, they are
seeking to do it through backdoor regulation. This has to stop
and I believe this legislation is the right approach. It is
narrowly written to focus only on greenhouse gases related to
climate change, and EPA's authority to monitor and regulate
pollutants remains intact.
Mr. Chairman, the Energy Tax Prevention Act of 2011 is
important legislation to protect jobs, keep our nation
competitive in foreign markets and provide economic certainty
to the millions of American workers employed by industries that
will be impacted by this backdoor national energy tax. This
hearing marks our opening salvo to show the American people we
mean business when it comes to growing our economy and
identifying and removing job destroying regulations.
I look forward to the testimony of our witnesses and I
yield back the balance of my time.
----------
Prepared Statement of Hon. David B. McKinley
Good morning. Chairman Whitefield and Ranking Member Rush,
thank you for holding this hearing today to discuss the draft
discussion of the Energy Tax Prevention Act of 2011.
I look forward to hearing from our witnesses today,
particularly the testimony and discussion of Environmental
Protection Agency Administrator Lisa Jackson. Representing West
Virginia's First Congressional District, it is my duty to
ensure the citizens of West Virginia are protected not only for
their health and safety, but to ensure that the current
Administration's Agencies do not eradicate the industries they
work in, and that they will be able to put food on the table
for their families.
With that being said, many of the EPA's regulations,
whether in effect or proposed, will be detrimental to not only
the State of West Virginia but to our entire Nation. We
continue to see an EPA which circumvents the Congressional
process by allowing bureaucrats to make decisions that should
be left up to federal and state lawmakers.
On January 13th of this year, the EPA took an unprecedented
step to retroactively revoke a lawfully issued, four-year old,
Section 404 permit for the Spruce No. 1 surface mine in Logan
County, West Virginia. The implications of this action prompted
me to file legislation to combat this blatant overreach by a
federal agency, which is detrimental to the local businesses
and hundreds of workers.
This was not a regulation issued by the EPA, but rather was
a permit issued under the Clean Water Act and approved by the
Army Corps of Engineers in January 2007. For nearly a decade
prior to 2007, the Army Corps of Engineers worked with the EPA
to rigorously review the Spruce Mine project before it was
approved. The permit was issued after an extensive 10-year
environmental review, including a 1600 page Environmental
Impact Statement (EIS) in which the EPA full participated and
agreed to all terms and conditions included in the authorized
permit. The EPA had every opportunity to address any concerns
prior to when the permit was issued. Because of the EPA's
chilling actions in revoking the permit, they prohibited the
creation of 253 mining jobs and 298 indirect jobs, in addition
to an investment of $250 million into the local community.
I firmly believe that our states need a consistent and
predictable regulatory program that will protect the jobs we
have and create the jobs we need in an environmentally
responsible manner. It is impossible for companies to take the
necessary steps to move forward and create jobs if they have to
live with the threat of unilateral retroactive revocation of
the very permits that allow them to do business. The EPA cannot
continue to punish the coal, manufacturing and natural gas
industries. These are the industries vital to the survival of
West Virginia and families will continue to suffer and be
impoverished under this Administration.
Any decisions from any agency or government entity should
stem from the congressional review process, extensive studies,
public input, review by other federal agencies, and peer review
by experts.
I look forward to hearing from the today's witnesses, and
look forward to working with Subcommittee Chairman Whitfield
and Chairman Upton in the full committee to ensure that lives,
jobs, industries, families and our economy are protected.
Thank you and I yield back.
----------
Prepared Statement of Hon. Cory Gardner
Just the other day, my staff asked a fairly large electric
corporation in my district how exactly these greenhouse gas
regulations would affect Colorado. Their response was something
to the effect of, ``With all the regulations coming down on our
heads from EPA, we stopped doing a full-blown analysis of what
each regulation would do to our customers.'' It is simply
impossible to gauge exactly the job losses, exactly the rate
increases, and exactly the effect on service to cities in my
district. However, they know with all these regulations put
together, it will be large.
They, along with so many other businesses all over the
country, cannot keep track of all the regulations they are
going to have to abide by - but they are bracing themselves
nonetheless, especially with regard to GHG regulation. They are
anticipating having to absorb higher costs which will lead to
job losses and less innovation among many other things. What's
worse, these rules have the potential to affect even more
businesses in the future if we don't stop it now.
The Energy Tax Prevention Act does a couple key things. It
prevents the EPA from regulating GHGs under the Clean Air Act
(CAA), which it does not have the authority to do anyway. It
also repeals steps that EPA has taken over the last two years
to achieve the goal of GHG regulation. The bill does not,
however, prevent the EPA from continuing its other obligations
to protect the environment.
The CAA was never meant to be a means to regulate GHGs. In
fact, EPA was forced to change the CAA in order to make it work
for the GHG regulations. The CAA as it existed before the
infamous ``tailoring rule'' allowed for regulation of various
``conventional pollutants.'' This includes things like lead and
nitrogen dioxide. However, the threshold laid out in the CAA
was far too low for greenhouse gases. If the CAA was
interpreted to regulate GHGs under its original thresholds,
virtually no businesses that emitted any sort of GHG would be
able to avoid serious federal regulation. This change has
proven that the CAA was never meant for regulating GHGs.
Despite these facts, here we are. The EPA has done no
thorough analysis of how this will affect industry, jobs, and
energy prices but that has not stopped them from moving right
along with their agenda. And they are continuing this
regulatory scheme despite failed attempts to pass a similar cap
and tax bill in both houses of Congress. This is nothing but a
runaround attempt at a national energy tax - forcing consumers
to pick up the bill for an agenda that hurts jobs and
businesses, and not allowing for a thorough vetting process.
Further, states simply are not prepared for the new permitting
requirements laid out in the regulation, which are likely to
delay new energy projects from being built.
Mr. Chairman, this is just the beginning of what EPA will
do if we continue to let them. If we do not change our course
now, businesses will do what they do best - they'll find
another market, and it's likely that market will have little or
no regulation on GHGs. This will cost us jobs and lead us down
a path that does not end at energy independence. I support this
bill as a solution to the future job losses and energy price
increases that our nation will experience if we allow these
regulations to move forward. I yield back my time.
----------
Statement of Hon. Lois Capps
Mr. Chairman, I'm troubled we're here this morning.
Americans still are facing staggering unemployment rates, and
our economy has not yet fully recovered.
But instead of holding hearings on ways to generate more
clean energy jobs and improve the health of American families,
we're reviewing an extreme proposal that would block EPA from
doing its job: protecting our health from air pollution.
Mr. Chairman, not allowing the EPA to address carbon
pollution under the Clean Air Act is flat-out dangerous.
Climate change is a serious problem. The scientific
evidence is clear. The debate is over. Climate change is real.
It's happening. And, human beings are largely to blame.
2010 was the hottest year on record. And in the last decade
the Earth experienced 9 of the 10 hottest years since data has
been recorded.
We're also starting to see the irreversible damage to our
economy and our environment.
Sea levels are rising. The world is witnessing increased
rainfall, floods, droughts, and wildfires. And, our fresh water
supplies and capacity to grow enough food will be severely
challenged in the years ahead.
Mr. Chairman, the longer we delay taking action to address
climate change, the more difficult and expensive the solutions
will be.
That's why the EPA is taking a cautious, flexible and
balanced approach to addressing carbon pollution. And each of
the steps they've taken so far has followed the letter of the
law.
For four decades, the Clean Air Act has protected the
health of millions of Americans - including our children, our
seniors and the most vulnerable among us - from all kinds of
dangerous air pollutants.
The law also has a tremendous track record in providing
certainty to business and delivering economic benefits.
For example, since the Clean Air Act was enacted overall
air pollution has dropped while U.S. GDP has risen 207 percent.
And we've also seen major health benefits, including asthma
reduction, lower lung cancer rates, and much greater
productivity.
In fact, by 2020 the benefits of the Clean Air Act are
expected to reach $2 trillion, exceeding any costs by more than
30 to 1.
All of these benefits, Mr. Chairman, are jeopardized by
this proposed rollback to the Clean Air Act.
And that's why groups ranging from the American Lung
Association to the American Sustainable Business Council have
decried the harm of this proposal to people's health and
economy. And it's why I stand with them today in opposing this
extreme proposal.
Here's what this proposed bill would do.
First, it would declare that carbon pollution is not an air
pollutant and repeal the EPA's science based endangerment
finding, throwing the findings of the National Academy of
Sciences, federal government agencies and countless other
scientific experts out the window.
Second, it would also repeal every action the EPA has
already taken and block every action EPA is developing to limit
carbon pollution from power plants and oil refineries, giving
the nation's biggest polluters a free pass for unlimited carbon
pollution.
Third, it would tear up the historic agreement reached by
the Obama administration, the nation's automakers and states to
cut carbon pollution and fuel consumption in new cars and
trucks. This means more air pollution and higher fuel bills for
all Americans in the future.
Mr. Chairman, this is an unprecedented, extreme proposal
and it should not go forward.
Last month, President Obama stood on the House floor and
talked about ``winning the future'' through innovation. And he
used clean energy as his central example.
We know that clean energy will help our economy grow. It
will help America compete in the global marketplace. And it
will help protect Americans' health and quality of life.
Let's not obstruct the EPA from doing its job of protecting
the public's health and environment.
This is a crucial issue, Mr. Chairman, for the public and
our planet.
It's our duty here to ensure both are protected from
harmful carbon pollution. And unfortunately, this extreme
proposal just doesn't meet this crucial test.
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