[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
   EPA'S GREENHOUSE GAS REGULATIONS AND THEIR EFFECT ON AMERICAN JOBS

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 1, 2011

                               __________

                           Serial No. 112-12


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov
?



                  U.S. GOVERNMENT PRINTING OFFICE
66-512                    WASHINGTON : 2011
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  

                    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               EDWARD J. MARKEY, Massachusetts
JOHN SHIMKUS, Illinois               EDOLPHUS TOWNS, New York
JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
MARY BONO MACK, California           BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                  ANNA G. ESHOO, California
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                GENE GREEN, Texas
SUE WILKINS MYRICK, North Carolina   DIANA DeGETTE, Colorado
  Vice Chair                         LOIS CAPPS, California
JOHN SULLIVAN, Oklahoma              MICHAEL F. DOYLE, Pennsylvania
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            CHARLES A. GONZALEZ, Texas
MARSHA BLACKBURN, Tennessee          JAY INSLEE, Washington
BRIAN P. BILBRAY, California         TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire       MIKE ROSS, Arkansas
PHIL GINGREY, Georgia                ANTHONY D. WEINER, New York
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana              Islands
BRETT GUTHRIE, Kentucky
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

                                  (ii)
                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
JOHN SULLIVAN, Oklahoma              BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois
GREG WALDEN, Oregon                  JAY INSLEE, Washington
LEE TERRY, Nebraska                  JIM MATHESON, Utah
MICHAEL C. BURGESS, Texas            JOHN D. DINGELL, Michigan
BRIAN P. BILBRAY, California         EDWARD J. MARKEY, Massachusetts
STEVE SCALISE, Louisiana             ELIOT L. ENGEL, New York
CATHY McMORRIS RODGERS, Washington   GENE GREEN, Texas
PETE OLSON, Texas                    LOIS CAPPS, California
DAVID B. McKINLEY, West Virginia     MICHAEL F. DOYLE, Pennsylvania
CORY GARDNER, Colorado               HENRY A. WAXMAN, California (ex 
MIKE POMPEO, Kansas                      officio)
H. 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 L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     4
    Prepared statement...........................................     5
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, 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................................   143
Hon. Cory Gardner, a Representative in Congress from the State of 
  Colorado, prepared statement...................................   145

                               Witnesses

Mike Carey, President, Ohio Coal Association.....................    15
    Prepared statement...........................................    17
Paul N. Cicio, President, Industrial Energy Consumers of America.    28
    Prepared statement...........................................    30
Hugh A. Joyce, President, James River Air Conditioning Company, 
  Inc............................................................    34
    Prepared statement...........................................    36
Forrest McConnell, National Automobile Dealers Association, and 
  President, McConnell Honda and Acura...........................    40
    Prepared statement...........................................    42
W. David Montgomery, Vice President, Charles River Association...    52
    Prepared statement...........................................    54
    Answers to submitted questions...............................   156
Dan W. Reicher, Executive Director, Steyer-Taylor Center for 
  Energy Policy and Finance, Stanford University; Professor, 
  Stanford Law School; and Lecturer, Stanford Graduate School of 
  Business.......................................................    80
    Prepared statement...........................................    83
Gina A. McCarthy, Assistant Administrator, Office of Air and 
  Radiation, United States Environmental Protection Agency.......   119
    Prepared statement...........................................   122

                           Submitted Material

Letter of March 1, 2011, from Mr. Waxman to Mr. Whitfield........   146
Letter of January 10, 2011, from American Iron and Steel 
  Institute to Hon. Darrell Issa.................................


   EPA'S GREENHOUSE GAS REGULATIONS AND THEIR EFFECT ON AMERICAN JOBS

                              ----------                              


                         TUESDAY, MARCH 1, 2011

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:04 p.m., in 
room 2322 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Shimkus, 
Walden, Terry, Burgess, Bilbray, Scalise, McMorris Rodgers, 
Olson, McKinley, Gardner, Pompeo, Griffith, Barton, Upton (ex 
officio), Rush, Inslee, Markey, Green, and Waxman (ex officio).
    Staff present: Gary Andres, Staff Director; Jim Barnette, 
General Counsel; Michael Beckerman, Deputy Staff Director; Sean 
Bonyun, Deputy Communications Director; Maryam Brown, Chief 
Counsel, Energy and Power; Cory Hicks, Policy Coordinator, 
Energy and Power; Ben Lieberman, Counsel, Energy and Power; Gib 
Mullan, Chief Counsel, CMT; Mary Neumayr, Counsel, Oversight/
Energy; Katie Novaria, Legislative Clerk; Peter Spencer, 
Professional Staff Member, Oversight; Jeff Baran, Democratic 
Senior Counsel; Greg Dotson, Democratic Energy and Environment 
Staff Director; Caitlin Haberman, Democratic Policy Analyst; 
and Alexandra Teitz, Democratic Senior Counsel, Environment and 
Energy.

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

    Mr. Whitfield. I call this hearing to order this afternoon. 
Today's hearing is entitled ``EPA's Greenhouse Gas Regulations 
and Their Effect on American Jobs.''
    Certainly, one of the major issues facing the American 
people today is getting the economy stimulated, creating jobs 
and one of the reasons all of us or at least many of us are 
very much concerned about the activities of the EPA at this 
particular time is that they have a queue of about 30 
regulations that they are working on at EPA. We have great 
concerns about these regulations, recognizing that all of us 
are committed to protecting the environment but there is no 
question that many of these regulations are having a dramatic 
impact on job creation and I certainly recognize that there are 
different philosophies on the way we precede.
    The Obama Administration has placed great emphasis on green 
energy. As a matter of fact, our energy policy today has been 
simplified to the point where fossil fuel is bad and green 
energy is good.
    OK, thank you very much. I am sorry for the inconvenience 
there. For those who heard me, I am sorry you are going to have 
to listen to me again for a few minutes.
    Today's hearing is entitled, ``EPA's Greenhouse Gas 
Regulations and Their Effect on American Jobs.'' The American 
people are primarily interested in stimulating their economy 
today and creating jobs. One of the concerns that many of us on 
this side of the aisle have as well as others on the other side 
of the aisle is that the long list of regulations being 
considered at EPA today, we have a very real concern that they 
are going to have a significant impact on our ability to create 
jobs. I might also say that the energy debate in America today 
has been summed up in about six words and this is where we are, 
fossil fuels are bad and green energy is good. And I think most 
of us recognize that it is a lot more complicated than that and 
we and certainly I recognize that in order to meet our 
increased demands just on the electricity side we are going to 
have to have electricity produced from all sources.
    But the Obama Administration has placed so much emphasis on 
green energy, billions of dollars from the Stimulus Fund has 
gone for that. All sorts of tax incentives have gone for that 
and the problem that I have with it is not that we are spending 
taxpayers dollars to help develop green energy but I think the 
American people are being misled on the role that green energy 
can play in the immediate future. For example, the Obama 
Administration recently came out with a ruling that they wanted 
to reduce the 2005 greenhouse gas emissions by 83 percent by 
the year 2035.
    Now, when you think about that formula, it is kind of 
complicated. What does that really mean? Why not just say we 
are going to allow so many tons of emissions by this date? 
Well, I think that it is being done because they don't want the 
American people to recognize really what they are saying. If 
you look at the numbers of reducing the 2005 emissions by 83 
percent, what you are talking about you are taking America back 
to 1920, in the 1920s. That is the last time we had emissions 
that low and I will tell you what, in the 1920s only two 
percent of rural homes in America had electricity. Around 50 
percent of American homes in the rest of the country had 
electricity. We didn't have any cellphones. We didn't have any 
flat-screen TVs. We didn't have any Blackberrys. We didn't have 
iPods or iPads. So to think that we are going to reduce by 
2035, 87 percent of 2005 emissions, in my view is a pipedream.
    Now, having said that, I know this Administration is making 
the argument that green energy is going to carry out country 
and that is where the jobs are going to be created. But in my 
view and from the analysis that I have looked at and from all 
of the hearings that I have sat through, through the years, I 
don't think anyone realistically believes that green energy can 
provide the electricity needs of America any time soon.
    Fifty-two percent of our electricity still comes from coal. 
Seventy percent of electricity produced in China comes from 
coal. American railroads are taking more coal to the ports 
today for export to China than at any time in its history. In 
2006, 6.7 billion tons of coal were used worldwide. In 2010, it 
was over 10 billion tons and they anticipate the additional 
coal necessary just to meet the needs of China and India in the 
next few years is going to increase another billion or so.
    So yes, we need green energy. We need natural gas. We need 
nuclear energy but we also are going to have to have coal to 
meet the expected increase in demand. So the point that I would 
simply try to like to make is let us be realistic here. Let us 
not mislead the American people. Let us have an honest give and 
take discussion, answer questions, ask questions and try to 
come out with the right policy for the American people and that 
is what these hearings are designed to do and we look forward 
to the testimony today. I will introduce all of you a little 
bit later right before you testify.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared Statement of Hon. Ed Whitfield

    The American people are primarily interested in stimulating 
their economy today and creating jobs. One of the concerns that 
many of us have is that the long list of regulations being 
considered at the Environmental Protection Agency today will 
have a significant impact on job creation.
    The energy debate in America today has been summed up in 
about six words, and this is where we are: fossil fuels bad, 
green energy good. Many of us recognize that it's a lot more 
complicated than that. However, in order to meet our increased 
demands just on the electricity side, we are going to need 
electricity produced from all sources.
    The Obama administration has placed so much emphasis on 
green energy. Billions of dollars in stimulus money and tax 
incentives has gone for green energy. And the problem I have is 
that I think the American people are being misled about the 
role green energy can play in the immediate future as we use 
taxpayer money to help develop green energy.
    For example, the Obama administration recently came out 
with a ruling that they want to reduce the 2005 greenhouse gas 
emissions by 83 percent by the year 2035. Now many think that 
this formula is complicated and wonder what it really means. 
Why not just say, `we are going to allow a specific amount of 
emissions by a specific date?' I think it is being done because 
the Obama administration does not want the American people to 
recognize what they are saying. If you look at the numbers of 
reducing the 2005 emissions by 83 percent, that would be taking 
American back to the 1920s. That was the last time the United 
States had emissions that low.
    By comparison, in the 1920s, only two percent of rural 
homes in America had electricity. Around 50 percent of American 
homes in the rest of the country had electricity. This was 
before cell phones, flat screen televisions, Blackberries, 
iPods, or iPads. To think that we are going to reduce by 2035 
83 percent of 2005 emissions, in my view is unrealistic.
    Now, having said that, I know this administration is making 
the argument that green energy is going to carry our country 
and that is the field in which jobs will be created. But in my 
view, and in the analysis that I have read and the hearings 
that have been held on this issue, I do not think that anyone 
realistically believes that green energy alone can provide the 
electricity needs of America anytime soon. 52 percent of our 
electricity still comes from coal and 70 percent of electricity 
produced in China comes from coal. American railroads are 
taking more coal to the ports today for export to China than in 
any time in history. In 2006, 6.7 billon tons of coal was used 
worldwide and in 2010, it was over 10 billion tons. And it is 
anticipated that the amount of coal needed to meet the needs of 
China and India in the next fear years will increase even more.
    Yes, we need green energy. We need natural gas, nuclear 
energy. But we also need coal to meet the projected increase in 
demand.
    Let's be realistic and not mislead the American people but 
rather have an honest give and take discussion and try to come 
up with the right policy for the American people. And that is 
what this and other hearings are designed to do.
    I look forward to hearing from our witnesses and thank you 
for being here today.

                                #  #  #

    Mr. Whitfield. But at this time, I would recognize the 
gentleman from Illinois for his opening statement.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. I want to thank you, Mr. Chairman, and I want to 
thank all of the guests for attending today's hearing.
    Mr. Chairman, there seems to be a concerted effort by many 
of my colleagues on your side of the aisle to de-legitimatize 
the science that says greenhouse gases are and therefore should 
be regulated. Additionally, in an attempt to counteract all the 
various respected peer review studies that show the 
environmental protection industry actually creates jobs and 
stimulates the economy as well as leads to a healthier and more 
productive constituency.
    Today we will hear testimony that will lead us to believe 
that any policy that regulates greenhouse gases will 
automatically lead to job loss. However, it is extremely 
important for us to remember that just because it is possible 
to find some within the scientific community to dispute what 
the other 90 percent of scientists agree on that climate change 
is manmade, does not make the lone dissenter the authority on 
this very important issue. And just because different industry 
sources pay to produce studies that show that regulating 
greenhouse gases will be costly and yield little to no benefit, 
doesn't make it true. My point here is that not all studies are 
not equal and we should carefully vett those individuals who 
disagree with the vast majority of respected scientists 
worldwide on the causes of climate change as well as those who 
refute the reports that say moving toward more efficient and 
cleaner energy technologies will lead to substantially greater 
cost without the added benefits.
    In fact once again, Mr. Chairman, our side tried to invite 
one scientist to sit on the witness panel today only to be 
again revoked by the other side. I cannot imagine why this 
committee will attempt to move such sweeping and regressive 
legislation such as that will repeal EPA's ability to regulate 
harmful greenhouse gases without hearing the scientific 
evidence of how this will impact our economy, our environment 
and the public health. I sincerely hope that we will be able to 
hear from scientists at a future hearing so that we will be 
able to make informed decisions before moving to any markup of 
this legislation in this area. After all, just because we may 
try to ignore the science behind greenhouse gas emissions and 
how it affects climate changes does not mean it does not exist.
    We know that since the inception of the Clean Air Act 
opponents of the greenhouse view have been warning that 
environmental regulations will kill jobs and lead to 
outsourcing overseas. Clean air opponents falsely predicted 
that electricity prices would skyrocket if the 1990 Clean Air 
Act amendments were passed when in fact electricity prices 
actually declined in the decade following 1990 by approximately 
18 percent. While we hear that regulating greenhouse gases will 
cripple our economy and destroy our manufacturing industry, he 
U.S. Census Bureau conducted an annual survey of the U.S. 
manufacturing sector and found a solution abatement. Operating 
costs were only 0.4 percent on average of overall manufacturing 
loss including not just air pollution controls but all other 
abatement costs.
    Mr. Chairman, actually the Clean Air Act has been one of 
the most successful and bipartisan environmental laws enacted 
in American history. Mr. Chairman, I would submit that history 
has proven that we can protect our environment and also 
strengthen our economy to sensible and balanced regulation that 
helps create jobs and new technologies to protect the public 
interests, increase worker productivity and promote clean air.
    With that, I yield back the balance of my time.
    [The prepared statement of Mr. Rush follows:]

                Prepared Statement of Hon. Bobby L. Rush

    Thank you, Mr. Chairman, and thank you to all of the guests 
attending today's hearing.
    Mr. Chairman, there seems to be a concerted effort by many 
of my colleagues on your side of the aisle to delegitimize the 
science that says that greenhouse gases are pollutants and, 
therefore, should be regulated.
    Additionally, in an attempt to counteract all of the 
various respected, peer-reviewed studies that show the 
environmental protection industry actually creates jobs and 
stimulates the economy, as well as leads to a healthier and 
more productive constituency, today we will hear mention of 
several other studies that attempt to debunk these facts and 
lead us to believe that any policy that regulates greenhouse 
gases will automatically lead to job loss.
    However, it is extremely important for us to remember that 
just because it is possible to find some within the scientific 
community to dispute what the other 90% of scientists agree on, 
that climate change is man-made, does not make the lone 
dissenters the authority on this issue.
    And just because different industry sources pay to produce 
studies that show that regulating greenhouse gases will be 
costly and will yield little to no benefit, does not make it 
true.
    My point here is that all studies are not equal and we 
should carefully vet those individuals who disagree with the 
vast majority of respected scientists worldwide on the causes 
of climate change, as well as those who dispute the reports 
that say moving toward more efficient and cleaner energy 
technologies will lead to substantially greater costs without 
the added benefits.
    In fact, once again, our side tried to invite a scientist 
to sit on the witness panel today, only to be rebuffed. I 
cannot imagine why this Committee would attempt to move such 
sweeping and regressive legislation, such as the Upton-Inhofe 
bill, that would repeal EPA's ability to regulate harmful 
greenhouse gases, without hearing the scientific evidence of 
how this would impact our economy, environment, and the public 
health.
    I sincerely hope that we will be able to hear from 
scientists at a future hearing so that we are able to make 
informed decisions before moving to any markup of legislation 
in this area.
    After all, just because we may try to ignore the science 
behind greenhouse gas emissions and how it affects climate 
change, does not mean it does not exist.
    We know that since the inception of the Clean Air Act, 
opponents of the bill have been warning that environmental 
regulation will kill jobs and lead to outsourcing overseas.
    Clean Air Act opponents falsely predicted that electricity 
prices would skyrocket if the 1990 Clean Air Act amendments 
were passed, when in fact, electricity prices actually declined 
in the decade following 1990 by approximately 18%.
    While we will hear that regulating greenhouse gases will 
cripple our economy and destroy our manufacturing industry, the 
U.S. Census Bureau conducted an annual survey of the U.S. 
manufacturing sector and found that pollution abatement 
operating costs were only 0.4%, on average, of overall 
manufacturing costs, including not just air pollution controls 
but all other abatement costs.
    In fact, peer-reviewed articles in top economics journals 
find little evidence that environmental regulations have 
dampened U.S. competitiveness or led to outsourcing.
    Though I am sure today we will hear testimony that allowing 
EPA to move forward on plans to regulate greenhouse gases will 
destroy the economy and kill jobs, I must point out that the 
Clean Air Act has been one of the most successful and 
bipartisan environmental laws enacted in American history.
    In the 40 years since its enactment, the Clean Air Act has 
decreased air pollutants by 60%, even as our economy has grown 
by over 200%.
    A peer-reviewed EPA study found that the Clean Air Act was 
responsible for saving over 205,000 premature deaths, 22,000 
cases of heart disease, and 674,000 cases of chronic 
bronchitis, annually, between 1970-1990.
    Additionally, the Clean Air Act has been a stimulant for 
our economy, with estimates that it generated as much as $300 
billion in revenues and $44 billion in exports, while 
supporting close to 1.7 million American jobs by the year 2008.
    In fact, when both direct employment and indirect 
employment are taken into account, the environmental protection 
industry is estimated to have created a range of 3.8 million to 
5 million new jobs.
    These jobs run the gamut from factory workers to engineers, 
computer analysts, accountants, clerks, ecologists, truck 
drivers, and consultants, among others.
    Promoting cleaner technologies has the benefit of 
protecting our citizens with cleaner air while also creating 
jobs and investments for our economy.
    The Office of Management and Budget examined ten Clean Air 
Act regulations finalized in 2008, 2009, and 2010, and 
concluded that all ten had benefits that exceeded costs, by a 
ratio of 7 to 1 on average.
    In fact, according to the Department of Commerce 
International Trade Administration, environmental technology 
exports have grown dramatically from less than $10 billion in 
1990 to about $44 billion in 2008, and the U.S. share of 
foreign environmental technology markets has been increasing.
    In 2008, the U.S. had a net trade surplus of $11 billion in 
environmental technologies, which helped the U.S. balance of 
trade.
    Additionally, according to many top CEOs, there could be a 
great benefit for industry to have clear-cut rules of the road 
in regards to clean energy and regulatory obligations moving 
forward, rather than the piecemeal approach that is being 
implemented by the States and regional authorities currently.
    Mr. Chairman, I fear today's debate is being framed in a 
way where we are presented with a false choice between ``job 
killing'' EPA regulations and having environmental standards to 
protect our citizens.
    I would submit that, in fact, history has proven that we 
can indeed protect our environment and also strengthen our 
economy through sensible and balanced regulations that help 
create jobs and new technologies, protects the public health, 
increases worker productivity, and promotes clean air.
    We've done precisely this before and it can be done again.
    With that I yield the balance of my time.

    Mr. Whitfield. Thank you, Mr. Rush.
    At this time I recognize the chairman of the full 
committee, Mr. Upton, for 5 minutes.

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

    Mr. Upton. Well, thank you, Mr. Chairman.
    This hearing is about jobs. Jobs and the economy, and to 
imply anything otherwise is misleading. We had this debate in 
the last Congress and studies estimated that a cap-and-trade 
national energy tax would produce job losses in the hundreds of 
thousands, if not millions, yet EPA is unilaterally acting to 
impose the very same type of policies that Congress rejected in 
the 111th Congress. Job losses that would come from a cap and 
tax were not intended consequences. The whole point of 
federally regulating greenhouse gas emissions is to drive up 
energy costs so that consumers and businesses are forced to use 
less.
    As the President said, ``Under my plan, electricity prices 
will necessarily skyrocket.'' Congress said no but now we face 
an EPA trying to sneak regulations in through the back door. 
The job losses will span many sectors in businesses large and 
small.
    We live in a global economy with global competition and 
nations like China have absolutely no intention of similarly 
burdening their industries. Manufacturing jobs will leave this 
country unless EPA is stopped. Even for those who don't lose 
their jobs, the news would not be good. EPA's agenda will boost 
the price at the pump and drive up electricity bills. It will 
make farming cost more and hike prices of food.
    So let us dispel a myth. Air quality and public health will 
not be harmed or affected in any way by efforts to slow and 
then stop EPA's expansive global warming agenda under the Clean 
Air Act. Since 1970, the Clean Air Act has targeted air 
pollutants like particulates, ozone, lead, mercury, pollutants 
known to have adverse health impacts. The result has been a 
declining emission of these pollutants and we need to make sure 
that they continue to decline. Absolutely none of these efforts 
are impeded in any way under the Energy Tax Prevention Act 
discussion draft. EPA's ability and obligation to regulate and 
mitigate air pollutants like particulates that cause soot, 
ozone that cause smog, carbon monoxide, lead, asbestos, 
chloroform and almost 200 other air pollutants would be 
protected and preserved. So we can stop the EPA from imposing 
cap and tax and the Clean Air Act will continue to make our 
families and communities healthier places.
    So let us listen to the facts. This issue is not about air 
quality and public health. It is about jobs. EPA is not looking 
at the impact on jobs that the members of this committee should 
and we must.
    And I yield the balance of my time to Mr. Barton.
    [The prepared statement Mr. Upton follows:]

                 Prepared Statement of Hon. Fred Upton

    This is a hearing about jobs. Jobs and the economy. To 
imply anything otherwise is misleading.
    Scare tactics from the other side are meant as a diversion 
from what EPA's greenhouse gas regulations would do to American 
jobs.
    We had this debate last Congress. Studies estimated that a 
cap-and-trade national energy tax would produce job losses in 
the millions.
    Yet EPA is unilaterally acting to impose the very same 
types of policies that Congress rejected in the 111th.
    The job losses that would come from cap-and-tax were not 
unintended consequences. The whole point of federally 
regulating greenhouse gas emissions is to drive up energy costs 
so that consumers and businesses are forced to use less. As the 
President said, ``Under my plan, electricity prices will 
necessarily skyrocket.'' Congress said no, but now we face an 
EPA trying to sneak regulations in through the back door. The 
job losses will span many sectors, and businesses large and 
small.
    We live in a global economy with global competition, and 
nations like China have absolutely no intention of similarly 
burdening their industries. Manufacturing jobs will leave this 
country unless EPA is stopped.
    Even for those who don't lose their jobs, the news would 
not be good. EPA's agenda will boost the price at the pump and 
drive up electricity bills. It'll make farming cost more, and 
hike prices of food.
    Let's dispel a myth. Air quality and public health will not 
be harmed or affected in any way by efforts to slow and then 
stop EPA's expansive global warming agenda under the Clean Air 
Act. Let me repeat that: Air quality and public health will not 
be harmed by stopping EPA's job-crushing global warming agenda.
    Since 1970, the Clean Air Act has targeted air pollutants 
like particulates, ozone, lead and mercury--pollutants known to 
have adverse health impacts. The result has been declining 
emissions of these pollutants, and we need to make sure they 
continue to decline. Absolutely none of these efforts are 
impeded in any way under the Energy Tax Prevention Act 
Discussion Draft.
    Let me say that again. EPA's ability and obligation to 
regulate and mitigate air pollutants like particulates that 
cause soot, ozone that cause smog, carbon monoxide, lead, 
asbestos, chloroform, and almost 200 other air pollutants would 
be protected and preserved. We can stop the EPA from imposing 
cap-and-tax, and the Clean Air Act will continue to make our 
families and communities healthier places.
    Carbon dioxide is very different from the many pollutants 
specifically listed and targeted for reduction under the Clean 
Air Act. it is the stuff we exhale and that plants use as food.
    Set aside the scare tactics. Listen to the facts. This 
issue is not about air quality and public health. It's about 
jobs. EPA is not looking at the impact on jobs, the Members of 
this Committee should and we must.

    Mr. Barton. Thank you, Chairman Upton, and we can tell that 
when you speak, your opponents try to spam you so that your 
message doesn't get out.
    It is a good deal to have a hearing. I appreciate Chairman 
Whitfield having this hearing on the EPA's greenhouse gas 
regulation and their effect on American jobs.
    The answer is self-obvious. If you have something that is 
really not a pollutant with CO2 is not as I am 
giving this speech, I am creating CO2 and you don't 
have the technology to regulate and unless there has been a 
miracle occurred in the last 2 or 3 days, if you burn stuff 
with carbon in it you are going to create CO2. It is 
a chemical fact so we don't have a technology that can control 
it so if you regulate greenhouse gases or regulate 
CO2, in effect you are going to by definition cost 
jobs because you are going to shut down probably 40 percent of 
our energy production economy in the United States, maybe 50 
percent.
    So, in spite of the hypothesis that CO2 is a 
pollutant and in spite of the massive educational program to 
try to convince the American people and the world that 
CO2 is bad, the facts are otherwise and I am going 
to be absolutely stunned if in this hearing we don't hear from 
our industrial friends that if you really regulate 
CO2 to the extent that Chairman Whitfield was 
talking about in the Waxman-Markey bill, you are basically 
shutting down the U.S. economy and that is tens of millions of 
jobs and hundreds of billions of dollars. So this is a very 
good hearing and I hope, Mr. Chairman, as a result of this 
hearing we do begin to move the Whitfield-Upton bill and make 
it explicitly clear that the Clean Air Act does not apply to 
greenhouse gases.
    And with that I yield back to Chairman Upton. I yield back 
to the subcommittee chairman.
    [The prepared statement of Mr. Barton follows:]

                 Prepared Statement of Hon. Joe Barton

    Thank you Mr. Chairman. This Committee's commitment to 
investigate and expose the effects of the Obama 
Administration's regulations on jobs and our economy continues 
today as we discuss the ways the Environmental Protection 
Agency (EPA) plans to impose greenhouse gas regulations under 
the Clean Air Act (CAA).
    Two weeks ago, EPA Administrator Jackson testified before 
this Committee and she and I went over the six criteria 
pollutants regulated by EPA under the Clean Air Act, and 
greenhouse gases are not and should not be one of them. 
Congress has rejected such legislation, yet the EPA seems 
determined to regulate greenhouse gasses without examining the 
disastrous effects of these regulations on jobs and the 
production and cost of energy.
    On February 16th, Congress received a letter from more than 
a dozen industry trade associations citing a study estimating 
that EPA's greenhouse gas regulations could decrease capital 
investments by $25 09 75 billion and result in an economy-wide 
job loss of 476,000--1.4 million jobs. \1\ I look forward to 
hearing from the first panel of witnesses comprised of industry 
representatives about their reactions to this letter and other 
potential effects of these regulations and the second panel 
witness, Ms. McCarthy, from EPA's Office of Air and Radiation.
---------------------------------------------------------------------------
    \1\ http://thehill.com/blogs/e2-wire/677-e2-wire/144613-oil-mining-
groups-urge-house-to-curtail-epa-climate-rules-in-cr

    Mr. Whitfield. Thank you, Mr. Barton.
    At this time I recognize the ranking member from 
California, Mr. Waxman, for 5 minutes.

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

    Mr. Waxman. Mr. Chairman, this hearing reminds me of an 
article that appeared in the New York Times magazine on Sunday. 
The article was titled, ``Fact-Free Science'' and it describes 
how Washington has been infected by a mainstreaming and 
radicalization of antiscientific thought. Today's hearing could 
be an example A of antiscientific thought in this House where 
falling down a rabbit hole into wonderland where the facts are 
turned upside down and fiction is accepted as reality. The 
premise of this hearing and the legislation that is being 
reviewed is that climate change is a hoax and EPA's modest 
efforts to reduce carbon pollution will imperil our economy. 
These claims remind me of William James who once said, ``There 
is nothing so absurd that it cannot be believed as truth if 
repeated often enough.''
    These are the facts: Climate change is real and our future 
economic prosperity depends on investing in a new clean energy 
economy. If we don't act to reduce carbon pollution and promote 
clean energy, we will lose millions of clean energy jobs to the 
countries that do. China understands this. The Chinese are 
investing over $2 billion each week in renewable and other 
green technologies and so does Europe, which is racing ahead of 
us in reducing carbon emissions and developing advances in 
solar energy and green buildings.
    Last Congress, CEOs from our Nation's leading companies 
like General Electric and Duke Power told us that billions of 
dollars in private capital has been frozen because the United 
States does not have a long-term plan for reducing carbon 
emissions. The CEO of PG&E, one of the Nation's largest 
utilities warned of an incredible lost opportunity if we don't 
act now. He said there are these amazing developing new 
technology sectors across the United States and we see those 
jobs going overseas and technology superiority going overseas.
    The cost of inaction is not just the loss of leadership in 
the global economy. We also risk irreversible and potentially 
catastrophic impacts. Our weather is getting more extreme and 
more dangerous every year. Last year was the hottest and 
wettest on record. Floods in Arkansas, Kentucky, Mississippi, 
and Tennessee killed dozens. They submerged much of Pakistan 
and Australia, and droughts in Russia and China are driving 
food prices to record levels. The risks to our economy from 
climate change are real and are potentially enormous and that 
is why we cannot have an informed debate about the economic 
cost of EPA regulation if we ignore these impacts. If we look 
only at the cost of regulation without considering the cost of 
doing nothing, we are looking at only half of the equation.
    Ranking Member Rush and I have been urging that the 
subcommittee consider the scientific evidence and we asked for 
a leading scientific expert to be invited to testify today but 
this request was denied. We asked for a hearing on two new 
studies linking severe weather events to manmade climate change 
but we have not yet received a response. For this reason, we 
are invoking our rights under the House rules to request a 
minority hearing with scientists. Last month we heard testimony 
from Senator Inhofe that climate change is a hoax. We need to 
hear from real scientists before we mark up the Upton-Inhofe 
bill. Mr. Chairman, I ask that our letter requesting this 
hearing be made a part of today's hearing.
    Mr. Whitfield. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Waxman. I have one other concern about today's hearing 
and that is the decision to put the EPA Assistant Administrator 
Gina McCarthy on the second panel. This is inconsistent with 
the practices of our committee. I raised my concern with 
Chairman Upton earlier today. He agreed that the general rules 
should be that the Administration witnesses testify first on 
their own panel and has been the tradition, Democratic and 
Republican Administrations but the Committee would proceed 
differently. That wouldn't happen today. It is too late to 
change the order of today's hearing but that the Committee 
would proceed differently in the future hearings. I thank him 
and, Mr. Chairman, I thank you for the courtesy to make this 
statement and I look forward to working with you.
    Mr. Whitfield. Thank you very much, Mr. Waxman.
    And before I introduce the members of this panel who will 
be testifying today, I did want to say that of course Congress, 
we were not here last week and when I came back yesterday my 
staff did give me a copy of the February 24 letter that you and 
Mr. Rush wrote in which you did request convene a hearing to 
discuss the new studies that you had indicated.
    I might say that over the last two Congresses, we have had 
in the Congress over 24 hearings on climate change and the 
science relating to it which I do have a list of here. However, 
I understand also that under the Rule 11 procedure you all are 
entitled to a hearing with witnesses on the climate change 
issue that you want to bring up. It is also my understanding 
after talking to the Parliamentarian that as the chairman of 
the subcommittee I would have the opportunity to set the date 
for that hearing. And I would just in order to approach this in 
a correct way and try to have regular order, I would be happy 
to notice the hearing and we could notice it today for your two 
witnesses that you would like, maybe we would bring in a 
witness or two to maybe get a different view than your 
witnesses might give and we could do it even next Tuesday. Now, 
I said next Tuesday simply because we have looked at the 
calendar out for 3 or 4 weeks and it is very, very full. We are 
doing lots of hearings on all of the subcommittees but if you, 
Mr. Waxman, and Mr. Rush would be willing to have this hearing 
next Tuesday, you select your witnesses, we would notice it 
today. I don't want to get involved myself in taking a lot of 
time in determining who all these witnesses are just because of 
the time constraints but if you all would be willing to give us 
the name of those two witnesses, we could notice it today. We 
can have the hearing next Tuesday.
    Mr. Barton. Will the chairman yield?
    Mr. Whitfield. Yes.
    Mr. Barton. I appreciate the chairman yielding.
    Before we commit to a specific date, I would encourage the 
subcommittee chairman to enter into a discussion with Mr. 
Waxman and Mr. Rush and Mr. Upton. Normally, when you--first of 
all it is very rare to invoke a Rule 11 hearing but when it 
does happen there normally is some discussion about timing so 
that both the minority and the majority have adequate time to 
prepare and also get adequate witnesses and at least in this 
member's perspective, it would be very difficult to have an 
appropriate proper hearing by next Tuesday given everything 
that is happening this week and is scheduled to already happen 
next week. But I do think that if you have a discussion with 
our distinguished minority ranking members of the subcommittee 
and full committee, you could very expeditiously schedule such 
a hearing that helps both sides.
    Mr. Whitfield. Mr. Barton, I really appreciate your 
comments. I will say that we had a 1-hour meeting with staff 
looking out at the calendar on this issue and of course I am 
not speaking for Mr. Rush and Mr. Waxman, they may find next 
Tuesday inconvenient but my understanding from reading the 
letter and from discussions that I have had with our staff, we 
were talking about maybe two witnesses on your side and I think 
we have identified one or two. I think it could be done rather 
quickly, however I am simply making the offer and yes, sir.
    Mr. Waxman. Look, I just think it is important to hear from 
scientists on this issue before we mark up this bill and I am 
happy to discuss the schedule with you. I can't make any 
promises at this point but I want to work with you in good 
faith that we can have this hearing. It is an important part of 
the debate and if we are going to pass legislation out of this 
subcommittee, the subcommittee should have a hearing before we 
do that. That is my only.
    Mr. Whitfield. Well, I would be happy to do that. I am 
offering you that we would do a hearing on Tuesday. I can't 
commit.
    Mr. Waxman. We will do our best for Tuesday.
    Mr. Whitfield. Yes, let me just say I can't commit that we 
will have a hearing before we have a markup but I don't know 
that that date has been set.
    Mr. Rush. Mr. Chairman, I think that is absolutely critical 
that we on the outside be allowed to have this hearing based on 
scientists of our choosing and I am sure you have scientists 
also. We could have a hearing would be almost without any 
meaning. I think the members of the subcommittee need to hear 
from scientists. They need to hear from scientists of our 
choosing about this important matter.
    Mr. Whitfield. Well, and like I said we have had 24 
hearings on the science.
    Mr. Rush. Mr. Chairman, if I might I would just ask are you 
planning on having a markup on this hearing next week?
    Mr. Whitfield. I can say for myself that we have not 
decided specifically on a date for a markup that I am aware of 
however we do want to move quickly. I think we have made that 
very clear in the beginning we want to move quickly on this and 
I might say that I think our regular order has been much 
better. Not to get into the health care bill of last year but 
we didn't even have an opportunity to even offer an amendment 
on the House floor on that bill but I am offering you all an 
opportunity to do a hearing on Tuesday. And if not, I suppose 
obviously you have the right to invoke a Rule 11 and go from 
there.
    Mr. Waxman. Mr. Chairman, let us notice your hearing for 
next Tuesday. We will do our best to get the witnesses there.
    Mr. Whitfield. OK so we will notice the hearing for next 
Tuesday.
    Mr. Shimkus. Mr. Chairman, would you yield for 1 second 
just to fulfill this debate?
    Mr. Whitfield. Yes.
    Mr. Shimkus. If I remember correctly when we moved the 
Waxman-Markey bill we continuously asked for an economic 
analysis and we never had a hearing on that prior to the markup 
of the bill. We did get a hearing 2 weeks after we marked up 
the bill so, you know, what is good for the goose is good for 
the gander and what we are trying to do here as we tried to do 
a couple of weeks ago is talk about the economic impacts. So 
let us understand the history behind this and we didn't get a 
chance to deal with the economic aspects. Not a single hearing. 
The bill was marked up and then 2 weeks later we had a hearing 
on the economic impacts.
    Mr. Waxman. Will the gentleman yield to me?
    Mr. Shimkus. I will.
    Mr. Waxman. We did have before there was a markup an EPA 
analysis I think that the members wanted further analysis of it 
but we did have that before the markup.
    Mr. Shimkus. Reclaiming my time, we don't consider the EPA 
the expert on economic impact especially when in our hearing of 
2 weeks ago they readily admitted that they don't consider 
economic impacts in their decision.
    Mr. Waxman. Will the gentleman yield further?
    Mr. Shimkus. I would be happy to.
    Mr. Waxman. We could go back and forth. You did this. We 
did that. We have asked for a hearing. The chairman has 
suggested that we take next Tuesday. We are trying to 
accommodate that request and I think it is helpful for all of 
us to get all the information we need and I would think since 
it is an important scientific controversy with members.
    Mr. Shimkus. Just reclaiming my time and I agree with you. 
I am just setting the record straight and I yield back.
    Mr. Barton. Will the ranking member yield for a question if 
it is his turn?
    Mr. Waxman. I don't have time. It was the gentleman from 
Illinois' time.
    Mr. Barton. Would the chairman yield?
    Mr. Whitfield. I recognize the gentleman.
    Mr. Barton. I would like to ask my distinguished friend 
from California are there some new studies that have come out 
in the last week, month, even 6 months that you believe are 
different than all the other studies that we have seen in the 
last say 12 months?
    Mr. Waxman. Well, I see six members attending this hearing 
today who were not on the committee in previous Congress'. I 
think it would be well for them to be informed. I think it is 
well worth getting testimony. I think it is an essential part 
of doing legislation.
    Mr. Barton. But the answer is no? There is no new 
information?
    Mr. Waxman. There are new studies linking carbon emissions 
to severe weather and I think that is an important part of what 
we have been looking at around the world.
    Mr. Rush. Will the gentleman yield just for a moment?
    Mr. Barton. I think Chairman Whitfield is a saint.
    Mr. Whitfield. Before--Mr. Waxman, you are not getting 
ready to leave are you?
    Mr. Waxman. No, no.
    Mr. Whitfield. OK.
    Mr. Barton. If I have the time, I am going to yield to my 
friend from Chicago briefly before Chairman Whitfield reclaims 
the gavel and moves the hearing forward.
    Mr. Rush. Well, I thank the gentleman for yielding. I think 
that it is absolutely essential for us to have this hearing 
with these scientists because the matter before us is very 
important and I think that it really would inform members. 
There may be some amendments to this bill that we will be 
discussing that will be initiated because of testimony and I do 
possibly see that there might be some amendments that might 
even be bipartisan once we hear the scientists. So I think this 
is really absolutely necessary for us to move forward with this 
hearing so that we can discuss this to its fullest effect.
    Thank you, Mr. Chairman.
    Mr. Waxman. Whoever has the time would you yield further to 
me?
    Mr. Barton. I do and I am going to yield one last time to 
Chairman Waxman.
    Mr. Waxman. I asked earlier today in my opening statement 
that we make part of the record information on some new 
studies. We pointed out in our letter to the chairman that 
there are two new studies linking severe weather events to 
manmade climate change and I think it is important for us to 
hear about it even if you don't believe it is true.
    Mr. Barton. I am happy to look at this new information. 
Being a professional engineer I am always interested in the 
truth and will be more than happy to.
    Mr. Waxman. During the 111th Congress there was only one 
scientist who testified that science didn't testify actually 
and that was Patrick Michaels and as the chairman knows we are 
currently examining whether he was fully forthcoming with the 
committee. I don't think the only scientist, supposed scientist 
witness on science should be Senator Inhofe.
    Mr. Whitfield. Thank you all. I agree. I agree.
    Mr. Waxman. Are you willing to take yes for an answer, Mr. 
Chairman.
    Mr. Whitfield. Let me just note we have votes on the floor. 
We just have two votes and then we are going to come back 
immediately because we want to hear your testimony but before 
we break I just want to make sure that I understand here what 
we have committed to. This is a regular hearing. Not an 
invoking Rule 11 hearing. Notice today hearing scheduled for 
Tuesday. You select your two witnesses regarding the studies 
and we will get a witness or two.
    Mr. Waxman. We want it to be a regular hearing. We may need 
more than two witnesses. We will discuss that with you.
    Mr. Whitfield. We would like to have the names of them 
today though.
    Mr. Waxman. We will do our best.
    Mr. Whitfield. OK.
    Mr. Waxman. We did send you a letter before the recess.
    Mr. Whitfield. You did, you absolutely did.
    Mr. Waxman. We are working with you in good faith. We just 
think this is an important part of the process.
    Mr. Whitfield. OK, now we are going to take about a 10 or 
15 minute recess and then we will be back and I will introduce 
this panel and hopefully the next part of this hearing will be 
even more exciting than the first part.
    [Recess.]
    Mr. Whitfield. OK, thank you all so much for your patience 
and at this time I would like to introduce the witnesses for 
the first panel. First of all we have Mr. Mike Carey who is 
president of the Ohio Coal Association. We have Mr. Paul Cicio, 
President of Industrial Energy Consumers of America. Mr. Hugh 
Joyce, President of the James River Air Conditioning Company. 
Mr. Forrest McConnell, President of McConnell Honda and Acura. 
Mr. David Montgomery, Vice-President, Charles River Associates 
and Professor Dan Reicher who is professor law and director of 
the Steyer-Taylor Center for Energy Policy at Stanford Law 
School. So I extend a warm welcome to you all. We need your 
assistance. We look forward to your testimony and I would 
remind each of you that you have 5 minutes for your opening 
statements. At the end of that time, once we have completed the 
entire panel we will have questions from the members. So at 
this point, Mr. Carey, I recognize you for a 5-minute opening 
statement and we will go right down the line. Be sure and turn 
your microphone on.

  STATEMENTS OF MIKE CAREY, PRESIDENT, OHIO COAL ASSOCIATION; 
PAUL CICIO, PRESIDENT, INDUSTRIAL ENERGY CONSUMERS OF AMERICA; 
HUGH A. JOYCE, PRESIDENT, JAMES RIVER AIR CONDITIONING COMPANY, 
     INC.; FORREST MCCONNELL, NATIONAL AUTOMOBILE DEALERS 
ASSOCIATION, AND PRESIDENT, MCCONNELL HONDA AND ACURA; W. DAVID 
MONTGOMERY, VICE PRESIDENT, CHARLES RIVER ASSOCIATION; AND DAN 
 REICHER, EXECUTIVE DIRECTOR, STEYER-TAYLOR CENTER FOR ENERGY 
 POLICY AND FINANCE, STANFORD UNIVERSITY, PROFESSOR, STANFORD 
 LAW SCHOOL, AND LECTURER, STANFORD GRADUATE SCHOOL OF BUSINESS

                    STATEMENT OF MIKE CAREY

    Mr. Carey. Chairman Whitfield, Ranking Member Rush and 
members of the committee, good afternoon. I want to thank you 
for inviting me for the opportunity to testify.
    My name is Mike Carey. I am president of the Ohio Coal 
Association. We are a trade organization that employs roughly 
3,000 Americans in our Ohio coal mines and according to many 
independent studies that number goes up to roughly 30,000 
secondary jobs in the coal fields.
    It is difficult for me to confine my remarks today on only 
the greenhouse gas regulations because our industry nationwide 
is facing an unprecedented onslaught of new rules that will 
eliminate coal in the direct and indirect jobs associated with 
it. To be clear, we are not advocating for a rollback or repeal 
of the current existing Clean Air Act programs but what is 
coming out of the Obama EPA is a host of new regulatory 
proposals including the Clean Air Transport Rule and the 
Utility Mac.
    Already, because of threats from the Administration and the 
EPA, United States power producing companies have announced 
that they have plans to retire close to 14,000 megawatts of 
coal-fired electric generation by 2011 and 2020. To be clear, 
CO2 does not have a negative health impact. In fact, 
a repeal is not a rollback of the Clean Air Act. Congress did 
not intend for it to be regulated in 1990 and has not passed 
cap and trade legislation.
    It is also important to remember what EPA Director Lisa 
Jackson said just 2 years ago when she was asked what 
unilateral U.S. action on climate change would do. She said, 
and I quote, ``It would have no significant impact on 
atmospheric greenhouse gas levels.'' But the manufacturing jobs 
in my home State of Ohio and those of the surrounding States of 
West Virginia, Pennsylvania, Indiana, Kentucky, and Michigan 
would ultimately see jobs go to China and India for no 
environmental benefit.
    In 2008, President Obama said, and I quote again, ``If 
someone wants to build a new coal-fired power plant, they can 
but it will bankrupt them because they will be charged a huge 
sum for all the greenhouse gas that they are emitting.'' The 
President couldn't have been clearer with his intentions and 
his Administration is following forward on their war on the 
American coal industry.
    This legislation that we are discussing today recognizes 
the logical starting point and that is that Congress never 
intended greenhouse gases to be regulated under the Clean Air 
Act. It is my hope that this committee will take action on all 
legislation that will interpret this flood of regulations that 
are an avert attack on our industry, not only just out industry 
but the low-cost power producing facilities that consume our 
products and ultimately the American manufacturing base.
    We are already seeing some of the effects of the Obama 
EPA's plan to regulate greenhouse gases. Domestic energy 
resource companies that had plans to grow job-creating economic 
development projects simply have moth-balled them and in many 
ways companies cannot get access to the critical capital from 
the lenders because of the uncertainty. As this committee 
contemplates the regulating the specific of greenhouse gas over 
a certain period of time like a 2-year time period should not 
be a viable solution. I think those of us who have worked with 
bureaucracies to try to obtain permits over the years or even a 
direct answer know that a 2-year delay of greenhouse gas 
regulations is nothing more than a political ploy and no one in 
this industry is fooled by that tactic.
    Why are these EPA regulations such a problem? First, 
through the courts EPA has been given an unchecked arbitrary 
authority over jobs through the Clean Air Act permitting. These 
actions are unaccountable to anybody, including Congress. The 
mere existence of the flawed illegal tailoring rule concept 
shows that the EPA is redefining on their own, outside of 
congressional authority who they believe should get special 
consideration, much like the political waivers under the 
healthcare law. Under present circumstances the EPA can 
purposely err in granting a permit thereby allowing activists 
to object and sue in court. Already we are seeing groups such 
as the Center for Biological Diversity challenging dozens of 
projects across this country on the grounds of climate under 
NEPA.
    What is ultimately needed is an independent review. I 
believe that we need legislation that mandates that the House 
and the Senate review and approve all significant rules or 
regulations that are promulgated by the Executive Branch. We 
have this in the State of Ohio and we have had it for many 
years. The question really comes down to whether Congress wants 
the EPA to unilaterally decide where economic development will 
occur, in which industry and how much Americans will pay for 
their energy.
    Mr. Chairman, I thank you for the opportunity to testify 
today and I stand ready to answer any of your questions. Thank 
you.
    [The prepared statement of Mr. Carey follows:]

    [GRAPHIC] [TIFF OMITTED] T6512.006
    
    [GRAPHIC] [TIFF OMITTED] T6512.007
    
    [GRAPHIC] [TIFF OMITTED] T6512.008
    
    [GRAPHIC] [TIFF OMITTED] T6512.009
    
    [GRAPHIC] [TIFF OMITTED] T6512.010
    
    [GRAPHIC] [TIFF OMITTED] T6512.011
    
    [GRAPHIC] [TIFF OMITTED] T6512.012
    
    [GRAPHIC] [TIFF OMITTED] T6512.013
    
    [GRAPHIC] [TIFF OMITTED] T6512.014
    
    [GRAPHIC] [TIFF OMITTED] T6512.015
    
    [GRAPHIC] [TIFF OMITTED] T6512.016
    
    Mr. Whitfield. Thank you, Mr. Carey.
    Mr. Cicio, you are recognized for 5 minutes.

                    STATEMENT OF PAUL CICIO

    Mr. Cicio. Thank you, Mr. Chairman, Ranking Member Rush. I 
am privileged to be here.
    IECA, the Industrial Energy Consumers of America is a 
organization of manufacturing companies. We have no oil 
companies, no coal companies, no natural gas companies and no 
electric utilities. We are manufacturers that produce widgets.
    While the manufacturing sector is rebounding, we continue 
unfortunately to lose competitiveness. The Commerce Department 
reported on February 11, that the 2010 trade deficit rose to 
$498 billion dollars, a 32.8 percent increase, the largest in a 
decade. China represented nearly 55 percent of the deficit.
    Our country and we in manufacturing are locked in global 
competition with other companies and their manufacturing 
sectors and we are losing. We must once again become a country 
that embraces manufacturing with policies that foster capital 
investment, innovation, low relative energy costs and 
regulations that are cost-effective and provide certainty.
    The EPA greenhouse gas regulation is an example of 
regulation that creates uncertainty and discourages investment 
and when added to the many other new regulations it is 
understandable why corporate America is sitting on $2 trillion 
of cash. The irony is that the manufacturing sector places a 
high priority on energy efficiency. We are the most energy 
efficient. We spend more time and money on energy efficiency 
than any other sector of the economy yet we disapprove of the 
EPA greenhouse gas regulations that set a maximum achievable 
control technology on energy efficiency. Especially when there 
are positive and cost effective ways of achieving significant 
energy efficiencies for greater use of combined heat and power, 
or waste heat recovery, or energy efficiency in buildings and 
building consume 40 percent of all the energy in the country.
    A better way that we have proposed is what we call the 
Sustainable Manufacturing Growth Initiative. It is policies 
that will revitalize the manufacturing sector over 10 years by 
improving industrial energy efficiency and it also improves 
efficiency in buildings. And that modeling of what we are 
proposing would reduce 10 percent of all U.S. greenhouse gas 
emissions in 10 years, create 3.2 million man-year jobs and 
unlock capital-fixed investment of $407 billion that would be 
invested in the United States rather than in some other 
country. This is an initiative that every manufacturer in the 
country would support.
    In contrast, I do not know at this time a single 
manufacturer that produces products in the United States that 
supports the EPA greenhouse gas regulation and the reason why 
is that under EPA regulations, EPA takes decision-making out of 
the hands of manufacturing. They mandate when capital must be 
spent on energy efficiency technology projects. It mandates 
what energy efficiency projects will be completed even if it is 
inconsistent with the scope or timing of other manufacturing 
production plans, or business strategies, or priorities. It 
mandates what technology will be used even if that technology 
is not cost-effective or desirable for the type or quality of 
the products that that facility produces. It mandates what 
manufacturing practices will be used to operate the facility, 
taking decision-making out of the hands of manufacturing plant 
operations people and putting it in the hands of the EPA.
    Mr. Chairman, the U.S. manufacturing sector has lost 5.4 
million manufacturing jobs in 10 years, 31 percent and unless 
we work together, this Congress and with this Administration we 
are not going to get those jobs back, and we look forward to 
working with you to make that happen. Thank you.
    [The prepared statement of Mr. Cicio follows:]

    [GRAPHIC] [TIFF OMITTED] T6512.017
    
    [GRAPHIC] [TIFF OMITTED] T6512.018
    
    [GRAPHIC] [TIFF OMITTED] T6512.019
    
    [GRAPHIC] [TIFF OMITTED] T6512.020
    
    Mr. Whitfield. Thank you very much.
    Mr. Joyce, you are recognized for 5 minutes.

                   STATEMENT OF HUGH A. JOYCE

    Mr. Joyce. Good afternoon, Chairman Whitfield and Ranking 
Member Rush and members of the subcommittee. Thank you for 
giving me the opportunity to speak today.
    I am the owner of James River Air Conditioning located in 
Richmond, Virginia. We perform HVAC, plumbing, electrical, 
solar and geothermal work on residential and commercial 
construction and retrofit projects. We currently have 150 full-
time employees. My father started the company in 1967 and I 
joined in 1977 while I was still in high school and worked my 
way up to president and owner. I have always made it a priority 
to conduct business with environmental consequences of my 
decisions and actions kept in mind. I am a member of the U.S. 
Green Building Council and manage LEED certified greenhousing 
projects. In fact, we designed, supervised and constructed the 
first LEED platinum house certified in Richmond. It was 
completed in September, 2010, 95 percent of its energy comes 
from solar power. It is also connected to Google PowerMeter 
which gives it a daily efficiency rating.
    We also focus on energy efficiency in our own office 
building which generates 10 percent of its power with solar 
panels on the roof. I am making these examples for two reasons. 
One, I have bet the entire net worth and the future of my 
business on conservation, green construction and reducing 
greenhouse gases, and implementing green strategies for myself 
and my clients. Secondly, efficiency and conservation make good 
business sense and I want to leave the world in a better place 
as a result of my work. Let me emphasize that I and many other 
small business owners choose to run our companies this way 
without government mandates.
    Attempts by the EPA to regulate greenhouse gases under the 
Clean Air Act will drive up our costs and will hinder economic 
recovery particularly in the construction industry. 
Construction impacts our economy significantly. Currently, new 
construction is down 50 to 90 percent in my market. Some houses 
and commercial buildings in Richmond are selling for less than 
the raw cost of materials to rebuild them. It routinely takes 
six months to plan and permit a project. A federal permit would 
cause the process to take even longer. The cost of modeling, 
and engineering, and reviewing, and pre-permitting, and cutting 
through the EPA red tape to permit as the new finding rules 
indicate would be the case could add one to four percent in 
professional cost to the average construction job. Currently, 
expenditures on material, labor and insurance are increasing, 
yet buildings are selling for less. Any new permitting mandates 
that increase costs like the EPA's regulatory plan would 
further limit new construction good jobs. Simply put, more 
confusion, greater uncertainty, means less work and fewer 
construction jobs.
    Due to the already heavily regulated nature of the 
construction industry I have one full-time employee dedicated 
to monitoring and ensuring compliance with regulations. 
Additional employees contribute to regulatory compliance as 
well. Regulation such as the EPA greenhouse gas rules would be 
extremely burdensome for business and clients.
    According to the SBA, small businesses spent 36 percent 
more per employee on regulations than their larger 
counterpoints and 360 percent more on environmental regulation. 
Environmental regulations alone cost my business approximately 
$150,000 a year. Combining that with other regulations, the 
total regulatory cost for my business is nearly $250,000 a 
year. As a small business owner my hope is the instead of 
punitive government policies we can incentivize environmentally 
friendly behavior. The EPA's own Energy Star program is one 
such example.
    When it comes to reducing greenhouse gases and pollution 
and moving this country forward, I believe we can get more 
sugar than we can with vinegar. Let us tap the power of 
American innovation, new clean energy sources, incentives and 
free market forces to win the battle against pollution. Please 
help us avoid regulations that will increase costs and create 
barriers to new jobs that will have little or no effect on 
reducing overall global pollution.
    Thank you for having me here today.
    [The prepared statement of Mr. Joyce follows:]

    [GRAPHIC] [TIFF OMITTED] T6512.021
    
    [GRAPHIC] [TIFF OMITTED] T6512.022
    
    [GRAPHIC] [TIFF OMITTED] T6512.023
    
    [GRAPHIC] [TIFF OMITTED] T6512.024
    
    Mr. Whitfield. Thank you, Mr. Joyce.
    Mr. McConnell, you are recognized for 5 minutes.

                 STATEMENT OF FORREST MCCONNELL

    Mr. McConnell. Mr. Chairman, Ranking Member Rush, my name 
is Forrest McConnell. I am president of McConnell Honda and 
Acura of Montgomery, Alabama and I am testifying on behalf of 
the National Automobile Dealers Association.
    Today there are three different fuel economy programs 
administered by three different agencies under three different 
standards pursuant to three different laws. America's auto 
dealers support a single national fuel economy program under 
CAFE beginning in model year 2017 as the best way to increase 
fuel economy, protect jobs, preserve passenger safety and 
reduce vehicle tailpipe CO2 emissions. Congress did 
not intend fuel economy to be regulated by NHTSA, EPA and 
California together when it passed a bipartisan Ten-in-Ten Fuel 
Economy Act in 2007. It is paramount for Congress to reassert 
its primacy over this area and return the still recovering auto 
industry into a single national fuel economy standard.
    There are numerous advantages to this approach. First, its 
terms are set by you, Congress. Second, only CAFE mandates a 
balancing of all the important considerations when setting fuel 
economy standards, jobs, safety, customer choice and customer 
acceptability. Third, CAFE was written specifically to regulate 
fuel economy. The Clean Air Act for all its virtues was not. 
California's regulation was written also to regulate fuel 
economy but only in California. Its application in other States 
results in what the EPA Administrator Jackson calls a patchwork 
of State standards. Fourth, a single national fuel economy is 
by definition uniformly consistent unlike what we have today.
    While the next round of fuel economy rulemaking will not 
take effect until model year 2017, the rules are being drafted 
now in Sacramento and Washington. As a dealer, I am worried 
about the challenges California's regulation would impose on my 
industry and our customers. According to a recent New York 
Times, a California official has indicated that CARB, 
California Air Resource Board will implement its patchwork 
regime in the California State in the next round of rulemaking 
if necessary. This would be problematic for auto dealers and 
customers because unlike CAFE, CARB's regulations will distort 
the auto market and do nothing additional to decrease 
greenhouse gas emissions or improve fuel economy on a national 
basis. California's approach to fuel economy regulation 
involves loopholes, exemptions, market distortions and does not 
balance national factors. CAFE has none of these defects. 
Congress needs to reaffirm that this body sets national fuel 
economy policy, not California regulators.
    Mr. Chairman, it is doubtful that Congress would ever enact 
three competing fuel economy programs. State regulation is 
unnecessary. Regulation of tailpipe CO2 emissions by 
EPA is redundant as the only way to reduce such emissions is to 
increase a vehicle's fuel economy which CAFE regulates. 
America's auto dealers support a single national fuel economy 
program and increases a fuel economy that makes sense to 
customers. It is important that the structure of the fuel 
economy program is sound so that the stringency of the fuel 
economy standard will be correct. That structure must leverage, 
not frustrate consumer demand. Unless customers actually buy 
new vehicles the environmental and economic benefits will not 
be realized. I urge Congress to return to a single national 
fuel economy standard under CAFE to avoid that risk.
    Thank you.
    [The prepared statement of Mr. McConnell follows:]

    [GRAPHIC] [TIFF OMITTED] T6512.025
    
    [GRAPHIC] [TIFF OMITTED] T6512.026
    
    [GRAPHIC] [TIFF OMITTED] T6512.027
    
    [GRAPHIC] [TIFF OMITTED] T6512.028
    
    [GRAPHIC] [TIFF OMITTED] T6512.029
    
    [GRAPHIC] [TIFF OMITTED] T6512.030
    
    [GRAPHIC] [TIFF OMITTED] T6512.031
    
    [GRAPHIC] [TIFF OMITTED] T6512.032
    
    [GRAPHIC] [TIFF OMITTED] T6512.033
    
    [GRAPHIC] [TIFF OMITTED] T6512.034
    
    Mr. Whitfield. Thank you, Mr. McConnell.
    Mr. Montgomery, you are recognized for 5 minutes.

                STATEMENT OF W. DAVID MONTGOMERY

    Mr. Montgomery. Thank you, Mr. Chairman and members of the 
subcommittee.
    My name is David Montgomery. I am an economist and I have 
been working on the topic of this hearing for more years than I 
like to remember. I will be discussing my own opinions today as 
an economist. I have formed them over many years. I have 
numerous publications and peer review and professional journals 
dealing with quantitative studies of the cost of greenhouse gas 
regulations and related topics. I will be happy to discuss my 
qualifications in questions if anyone has any questions about 
my ability or my objectivity on this subject.
    I will say that although I am discussing my own opinions 
and not necessarily those of my employer or my client, I 
believe, in fact I am certain that the vast majority of 
economists working in this area will agree specifically with 
the points that I am making today which is basically that there 
will be costs to greenhouse regulations. Nevertheless, there 
are studies that have circulated around Washington that claim 
greenhouse gas regulations will increase total employment and 
stimulate long-term green growth. These are the claims that 
come from politically motivated fringe of the profession. They 
reach these happy conclusions by simply leaving out half of the 
story. They describe and count only the jobs associated with 
regulatory compliance and ignore all the jobs lost in the rest 
of the economy due to higher cost of doing business. They fail 
to recognize that resources are limited and that money spent 
with complying with regulations is money diverted away from 
other productive purposes.
    These studies are typified by a series of reports by the 
Political Economy Research Institute that are sponsored by 
politically powerful organizations known as PERI's and the 
Center for American Progress. They use a simple procedure 
called multiplier analysis but like the philosopher's stone, 
turns the cost of compliance with regulations into the gold of 
added jobs but it is fool's gold.
    If these studies used any comprehensive model of the U.S. 
economy it would be forced to account for where the resources 
expended on regulatory compliance come from. When I did that, I 
found that in 2015, adding even the most cost-effective forms 
of greenhouse gas regulation and other pending EPA regulations 
would increase wholesale electricity prices by 35 to 40 
percent, would reduce average worker compensation by about $700 
per year and would shrink all the factors of the economy. The 
biggest hits would be on electricity, coal and energy-intensive 
industries. I don't even need to repeat that the energy-
intensive industries face competition industries in other 
countries and regions that are not bearing these kinds of added 
costs and that they are quite vulnerable there. Other parts of 
the economy, other industries would take up some of the slack 
for sure but on the net effect on the whole economy of these 
regulations would be that it would be growing less robustly.
    Now, let us turn to impact on workers. Using this 
comprehensive approach, total worker compensation I estimate 
would be driven down in 2015 by about one-and-a-half percent. 
If that reduction in compensation were to take the form of lost 
jobs, you would imply the loss of close to two million jobs, 
not the gains claimed by green jobs advocates. Or if our 
variable markets work efficiently and wages adjust to lower 
productivity, it would be a loss of about $700 per year in 
compensation to each worker. Moreover, this is overly 
optimistic.
    Regulation of greenhouse gases under the Clean Air Act will 
be much more costly than this. The reason is that in doing 
these calculations I assumed an ideal system putting a price on 
greenhouse gas emissions everywhere but EPA's proposal under 
the Clean Air Act would use command control regulations 
designed by bureaucrats who know next to nothing about the 
circumstances of individual businesses. Therefore, there orders 
cannot be possibly lead to solutions as cost-effective as those 
that managers would find with their own additions as they face 
the price on carbon.
    It is hard for me to think of a worse design for greenhouse 
gas policy than Clean Air Act authorities that were designed to 
deal with localized emissions of trace contaminants. Not only 
are these an excessively costly way to bring about wholesale 
changes in our energy system, they will fall far short of what 
would have to be done to stabilize global temperatures. 
Pretending the EPA regulations are cost-free is only intended 
to distract you from designing a policy response that avoids 
unnecessary costs.
    There are many other technical deficiencies and studies of 
green jobs that I have described in my written testimony but I 
will end with just really two simple points. Given the 
looseness of green accounting, calculations of green jobs might 
simply be adding up jobs that would exist with the EPA 
regulations or without them so the claim of green jobs is 
simply re-labeling. That clearly cannot create real economic 
benefits though it doesn't do any harm and that is the best 
case. If a new job slot is created for the sole purpose of 
being green then these people represent a higher cost to their 
employer while adding nothing to their output or revenues. If 
green jobs are mandated to produce goods needed only because of 
regulation like replacements for prematurely retired power 
plants, they actually subtract from the present and future 
economic well-being of the Nation.
    Regulation might be justified if it produced environmental 
gain that is worth these costs but that should not obscure the 
fact that prematurely retiring power plants is a cost, not a 
benefit. Yet the logic used by green job proponents implies 
that the greater the unproductive investment caused by 
regulation, the greater its beneficial impact on jobs. If that 
logic was really valid, rather than seeking out cost-effective 
regulation we should seek out the highest cost way to achieve 
environmental goals. Businesses should hire as many workers 
that they can fit on the jobsite for every project. The result 
is absurd because the logic on which it is based is nonsense.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Montgomery follows:]

    [GRAPHIC] [TIFF OMITTED] T6512.035
    
    [GRAPHIC] [TIFF OMITTED] T6512.036
    
    [GRAPHIC] [TIFF OMITTED] T6512.037
    
    [GRAPHIC] [TIFF OMITTED] T6512.038
    
    [GRAPHIC] [TIFF OMITTED] T6512.039
    
    [GRAPHIC] [TIFF OMITTED] T6512.040
    
    [GRAPHIC] [TIFF OMITTED] T6512.041
    
    [GRAPHIC] [TIFF OMITTED] T6512.042
    
    [GRAPHIC] [TIFF OMITTED] T6512.043
    
    [GRAPHIC] [TIFF OMITTED] T6512.044
    
    [GRAPHIC] [TIFF OMITTED] T6512.045
    
    [GRAPHIC] [TIFF OMITTED] T6512.046
    
    [GRAPHIC] [TIFF OMITTED] T6512.047
    
    [GRAPHIC] [TIFF OMITTED] T6512.048
    
    [GRAPHIC] [TIFF OMITTED] T6512.049
    
    [GRAPHIC] [TIFF OMITTED] T6512.050
    
    [GRAPHIC] [TIFF OMITTED] T6512.051
    
    [GRAPHIC] [TIFF OMITTED] T6512.052
    
    [GRAPHIC] [TIFF OMITTED] T6512.053
    
    [GRAPHIC] [TIFF OMITTED] T6512.054
    
    [GRAPHIC] [TIFF OMITTED] T6512.055
    
    [GRAPHIC] [TIFF OMITTED] T6512.056
    
    [GRAPHIC] [TIFF OMITTED] T6512.057
    
    [GRAPHIC] [TIFF OMITTED] T6512.058
    
    [GRAPHIC] [TIFF OMITTED] T6512.059
    
    [GRAPHIC] [TIFF OMITTED] T6512.060
    
    Mr. Whitfield. Thank you.
    Mr. Reicher, you are recognized for 5 minutes.

                    STATEMENT OF DAN REICHER

    Mr. Reicher. Chairman Whitfield, Ranking Member Rush, and 
members of the committee, thank you for the opportunity to 
testify.
    My name is Dan Reicher. I am executive director of the 
Steyer-Taylor Center for Energy Policy and Finance, a joint 
center of the Stanford Law School and the Graduate School of 
Business. Prior to Stanford, I was director of climate change 
and energy initiatives at Google, president of a private equity 
firm that invests in energy projects and executive vice 
president of a venture-capital-backed renewable energy company, 
and prior to these roles I was DOE assistant secretary for 
energy efficiency and renewable energy and the Department's 
chief of staff.
    I would like to make two points today. First, controlling 
U.S. carbon emissions along with other policy and investment 
measures to address climate change and advanced clean energy 
technology is critical to our Nation's economy, security, 
health and environmental quality. Second, experience over the 
last few decades makes clear that well-designed environmental 
and energy regulation far from being an economic drag can spur 
U.S. innovation, enhance competitiveness and often cut 
development and operating costs.
    Regarding the first point, we can debate the relative 
merits of the various approaches to regulating carbon emissions 
but the science tells us we need to act and the vast global 
market for clean energy technology tell us it is in our best 
economic and security interest to do so. We are unlikely to see 
the enactment of comprehensive climate and energy legislation 
any time soon, therefore EPA's current authority to regulate 
carbon emission should be strongly supported building on the 
agency's solid record of air regulation over the last four 
decades as well as the Supreme Court's 2007 decision upholding 
EPA's carbon regulatory authority.
    Regarding the second point, Michael Porter, a top Harvard 
economist and an economic policy advisor to the George W. Bush 
campaign has been a champion of the view that well-designed and 
executed regulation can induce efficiency, spur technological 
innovation and enhance competitiveness. What Porter calls the 
innovation effect makes processes and products more efficient 
and achieves saving sufficient to compensate for both the cost 
of compliance and the cost of innovation. Countries all over 
the world from China to Germany to Japan have committed to 
controlling carbon emissions through a variety of policy and 
investment mechanisms, and in doing so have grown a massive 
global clean energy industry measured in the trillions of 
dollars and millions of jobs that was once led by the U.S.
    We can advocate this market by turning back the clock in 
carbon controls and related energy policy and investment or we 
can seize the opportunity to lead the global clean energy 
industry whether it is in nuclear power, or renewable energy or 
advanced coal technologies, or natural gas. We need look no 
further than China to see that clean energy technology industry 
largely invented and once dominated by the U.S. slipping away. 
As we have dithered in our country in recent years in setting 
energy and climate policy, China has been working aggressively 
to become the world's clean energy powerhouse. The Chinese have 
set standards for power companies to produce more clean 
electricity, shut down old power plants and outdated heavy 
manufacturing capacity, established a program to improve the 
efficiency of its 1,000 most energy consuming enterprises, 
invested heavily in energy R&D, provided low-cost financing for 
clean energy projects and made major investments in the 
electricity gird, and importantly, set a target to reduce 
carbon intensity 40 to 45 percent below 2005 levels by 2020. 
Beyond China, other countries including Germany, Japan, South 
Korea and Denmark are forging ahead with ambitious clean energy 
policy and investment strategies and seeing significant, 
significant job growth as a result.
    In contrast, the U.S. has largely stayed on the sidelines 
endlessly debating the need for an approach to a successful 
clean energy strategy. That is the bad news. The good news is 
that we can regain our leadership in clean energy. Among the 
solutions, we should adopt a national clean energy standard 
following the lead of many States that have set such standards. 
I would note that Congressman Barton and 16 of his Republican 
colleagues currently serving on the full committee supported an 
amendment to the American Clean Energy Security Act that 
included a detailed clean energy standard.
    We should increase our investment in energy R&D. We should 
support the DOE Loan Guaranty Program that is proving pivotal 
in the deployment of clean energy technologies for renewables 
to nuclear. Over time we should replace the DOE Loan Guaranty 
Program with a new Clean Energy Deployment Administration that 
was adopted last year by the full House and by the Senate 
Energy Committee. We should extend federal tax credits that 
have been so vital in encouraging private sector financing of 
clean energy projects and most relevant to this hearing, we 
should reject the proposal to withdraw EPA authority to 
regulate carbon emissions under the Clean Air Act.
    Mr. Chairman, I believe it is inevitable that we will put 
strong controls on greenhouse gas emissions. The question of 
U.S. carbon regulation is not whether but when and there is a 
significant increasing portion of the business community that 
agrees. A major reason they agree is that we have four decades 
of evidence that the federal government will implement carbon 
controls in a smart and cost-effective manner. For example, in 
1990 power companies predicted that reducing sulfur dioxide to 
address the acid rain problem under the Clean Air Act would 
cost $1,000 to $1,500 per ton. In fact, the actual cost has 
been between $100 and $200 per ton.
    With regard to energy efficiency, as a result of a series 
of federal and State standards, a typical refrigerator today 
uses roughly a quarter of the electricity that it did in the 
1970s and actually costs less in real terms. And with regard to 
automobile fuel economy, in early 2009 the Administration 
reached an agreement with the auto industry creating a single 
national program for fuel economy and greenhouse gas emissions 
that will increase fuel economy levels in new passenger 
vehicles to 35-and-a-half miles per gallon, save consumers 
roughly $3,000 over the life of the vehicle, drive fuel 
consumption in new vehicles down by 30 percent and along with 
similar efforts globally help lower oil demand and decrease oil 
prices making us less vulnerable to oil price shocks from 
international events like those occurring as we speak in the 
Middle East.
    Wrapping up, prior to my current position at Stanford I 
spent 4 years at Google. Coming from the energy sector I was 
struck by how innovation, investment and policy with great 
leadership from the U.S. federal government came together so 
effectively to build an entirely new game changing and job 
creating industry, the Internet, led by our Nation. We must 
take a similarly coordinated approach between the private 
sector and the U.S. government in order to seize the 
extraordinary opportunities in the next great industry, clean 
energy technology. If we don't get our act together between our 
government and the private sector other countries that are 
taking the long view will be the winners of this marathon. A 
prize worth trillions of dollars and millions of jobs hangs in 
the balance.
    Thank you for the opportunity to testify.
    [The prepared statement of Mr. Reicher follows:]

    [GRAPHIC] [TIFF OMITTED] T6512.061
    
    [GRAPHIC] [TIFF OMITTED] T6512.062
    
    [GRAPHIC] [TIFF OMITTED] T6512.063
    
    [GRAPHIC] [TIFF OMITTED] T6512.064
    
    [GRAPHIC] [TIFF OMITTED] T6512.065
    
    [GRAPHIC] [TIFF OMITTED] T6512.066
    
    [GRAPHIC] [TIFF OMITTED] T6512.067
    
    [GRAPHIC] [TIFF OMITTED] T6512.068
    
    Mr. Whitfield. Thank you, Mr. Reicher, and thank all of you 
for your testimony.
    Tthis testimony is so stimulating really because the 
perspectives on this issue are really diametrically opposed 
which is what makes this so interesting. We are not going to 
get into the science and I am going to read this one sentence, 
not for its truthfulness per se but just as a view. Now, this 
was stated by Vaclav Claus, President of the European Union, 
about this book which is written by Ian Plimer who has won 
Australia's highest scientific honor twice and he says this is 
a very powerful, clear, understandable and extremely useful 
book. Plimer convincingly criticizes the United Nations, the 
International Panel for Climate Change, UK, U.S., and European 
Union politicians as well as Hollywood show business 
celebrities. He strictly distinguishes science from 
environmental activism, politics and opportunism. Now, like I 
said I am not talking about the truthfulness of that but here 
is the issue. When you have that kind of different views on 
this very important subject and Congress on three separate 
occasions has said no to EPA regulating greenhouse gases, and 
when Lisa Jackson appeared before this committee a couple of 
weeks and she was asked by Mr. Green of Texas, can we really 
address climate change without strong, mandatory reductions by 
other major emitters in other countries and Ms. Jackson said we 
will not ultimately be able to change the amount of 
CO2 that is accumulating in the atmosphere alone.
    So listening to you gentlemen, many of you talk about the 
additional cost that would be imposed upon American businesses 
and that the fact that even Ms. Jackson herself has said there 
would not be any dramatic improvement in CO2 
reductions, how do draw this line? Mr. Carey, you said in your 
testimony that EPA has indicated that they would be closing 
down 14,000 megawatts of coal plants by 2011-2012. Now, all of 
you are businessmen but how if you lose that kind of 
electricity, how do you make it up at a cost that does not 
increase the cost of American businesses? Can you answer that 
for me, Mr. Carey?
    Mr. Carey. Mr. Chairman, I should be clear that the studies 
I am citing, there are several studies and they all vary from 
about 75 gigawatts that would be lost under these proposals all 
the way down to 60 gigawatts.
    Mr. Whitfield. Gigawatts, OK, right.
    Mr. Carey. Yes which is also the thousand megawatts so that 
is where we get the number from but clearly for our industry 
when you are shutting down coal-based power producing 
facilities, much like with the Clean Air Act the rush was to 
put on clean coal technology which at that time is scrubbers. 
What we are looking at now is the baseline of CO2 in 
the concept of carbon sequestration. So the ability for many of 
these power producing facilities to actually meet the standard 
under a carbon sequestration standard and ultimately be able to 
get the carbon dioxide to the facility, the technology A is not 
out and ultimately what could happen and who is responsible for 
the carbon dioxide that goes into the ground. So those numbers 
would reflect a tremendous drop in coal production and when you 
drop the amount of coal as I stated before, Penn State said for 
every one coal job, up to 10 supporting jobs, the secondary 
jobs are due to that one coal job, you are looking at taking a 
number from anywhere of shutting down 77 percent.
    Mr. Whitfield. Except for Mr. Reicher, it seems like most 
of you agree that businesses would experience higher costs and 
there would be some job loss. Am I correct on that? OK, 
everybody says that and Mr. Reicher feels like the green energy 
would create additional jobs.
    Mr. Reicher. Mr. Chairman, I would have to say that there 
are costs but there are also benefits.
    Mr. Whitfield. Yes and how do you determine what that line 
is? That is the real question.
    Mr. Reicher. That is where reasonable people will differ 
and that is the essence of this debate.
    Mr. Whitfield. Yes and, you know, I am glad we are going to 
have Gina McCarthy with us today because she according to EPA 
air chief Gina McCarthy applying the 100-250 tons per year 
limit for greenhouse gases as mandated by the Clean Air Act 
would require six million sources to obtain Title Five permits, 
lead to 82,000 permitting actions under PSD, result in an 
estimated combined cost of $22.5 billion just to the permitting 
authorities and not to the businesses. So of course I know they 
are depending on the tailoring rule but a lot of people believe 
that tailoring rule be ruled illegal.
    Well, I got off my message here and I am out of time so, 
Mr. Rush, I will recognize you for 5 minutes.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Reicher, how do you respond to the charge that many 
studies show that EPA's regulation of greenhouse gases will 
actually create jobs and stimulate growth in the economy are 
incomplete and give a distorted picture?
    Mr. Reicher. Could you repeat that? I am sorry, Mr. Rush.
    Mr. Rush. How do you respond to the charge that many 
studies that show EPA's regulation of greenhouse gases will 
actually create jobs and stimulate growth in the economy, that 
they are incomplete and they give a distorted picture?
    Mr. Reicher. Mr. Rush, I would look around the world where 
we are seeing a whole host of controls being put on carbon 
emissions from China to the European Union and a whole host of 
other countries where in fact clean energy industries are 
taking off, jobs are being created in large, large numbers. So 
I am--this has actually been a real net economic benefit in 
many respects to countries that have taken this initial step to 
begin to control carbon emissions.
    Mr. Rush. Do you have any particular examples in mind that 
you could?
    Mr. Reicher. Germany is a great example, leading the world 
in so many energy technologies right now and they have taken 
and put into effect a set of rigorous standards to control the 
emissions of greenhouse gas emissions over time, days in goes 
in. They have set and with that has come a very robust industry 
and a whole host of clean energy technologies from advanced 
natural gas technologies to cogeneration to solar and wind, and 
to the extent that they are actually jobs, there are actually 
shortages of highly-skilled employees for certain of the 
industries in that country.
    Mr. Rush. Dr. Montgomery, you had some interesting remarks 
in your testimony and you mentioned the PERI reports before as 
an example of how some studies are incomplete and distorted in 
regards to the effects of the regulation on job creation. In 
fact, you draw on environmental economics and management which 
are four of the most heavily regulated industries which are 
pulp and paper refining, iron and steel and estimated a net 
increase in employment of 1.5 jobs per $1 million and 
environmental spending over alternative expenditures. The same 
publication also found a net employment gain from environmental 
spending noted that and I quote, ``Environmental protection is 
rapidly to become a million sales generating job creating 
industry, $300 million per year and five million direct and 
indirect jobs in the 2003.'' Do you dispute those numbers and 
if so on what basis do you dispute them?
    Mr. Montgomery. Actually they make my point perfectly that 
the environmental regulations increase the number of workers 
that have to be employed in an industry. They have to file 
forms. They have to operate pollution controls and that adds to 
cost. Workers are a cost. It does not mention what happened to 
the output of those industries compared to what it would have 
been had they not been facing these costs. Yes, they have more 
workers per dollar of output and they have less output because 
of the effects of higher prices, shifting demand away from 
those industries and into other substitutes and shifting demand 
to other countries. Your second point which I believe was that 
there are many jobs that are created in what you cited a number 
of jobs that are created in industries producing pollution 
control equipment. Absolutely, that is my point and those 
workers are not available for producing other goods that 
actually go directly into the consumption and satisfaction of 
individuals. Those workers are not available for healthcare. 
Those workers are not available for producing automobiles. We 
are diverting resources away from other activities in the 
economy and the study that you cited did not mention that in 
any way.
    Mr. Rush. So you would say then that if those were same 
workers were not employed in the efficiency areas then those 
workers would be at work selling cars and manufacturing cars 
and other industries, is that what you are saying?
    Mr. Montgomery. Well yes, that is clearly true in the long 
run. Absolutely, the employment in this economy is determined 
by the available labor force and aside from occasional 
recessions we have done an extraordinarily good job under 
Democratic and Republican Presidents of maintaining full 
employment but it is a matter of macro-economic policy and you 
don't improve on that policy by imposing costs through 
environmental regulations. It is simply a different category of 
policy decisions. For example, the PERI report that claims to 
be talking about all of the total jobs that are going to be 
created in the economy. It said well yes, there are some 
offsetting job losses. The people who are going to be working 
in those coal-fired power plants that are being shut down but 
it didn't mention all of the workers in the coal industry that 
were no longer going to be producing coal to go into the 60 or 
so of gigawatts of coal-powered power plants. They absolutely 
left it out.
    Mr. Waxman. The gentleman yield to me. I want to ask you a 
follow-up question. Do you ever see any benefit in regulation 
to deal with pollution or is it all negative?
    Mr. Montgomery. Absolutely, we have had tremendous benefits 
from many of the environmental regulations. We have seen air 
quality in Southern California. I lived in Pasadena for 8 
years.
    Mr. Waxman. How about in the jobs area?
    Mr. Whitfield. Sorry, we are about a minute-and-a-half 
over.
    Mr. Rush. Thank you, Mr. Chairman, I yield back the balance 
of my time.
    Mr. Whitfield. Thank you for doing that.
    Mr. Barton is next but it is my understanding, let us see.
    Mr. Barton. I am going to yield I think to Mr. Griffith.
    Mr. Whitfield. Mr. Griffith, I understand you have a 
conflict on the floor so we will recognize you for 5 minutes.
    Mr. Barton. I pass and I do want to ask questions but I 
wanted to let him go first.
    Mr. Griffith. I thank you, gentleman.
    Mr. Whitfield. Without objection, Morgan.
    Mr. Griffith. I appreciate it.
    Mr. Reicher, in your written statements you indicate and in 
your oral statements as well that China is well on its way to 
having a green or a more green energy producing economy and 
isn't it true though at this time that they actually produce 
more of their electricity with coal than we do in the United 
States?
    Mr. Reicher. They produce a very significant amount of 
their electricity with coal, absolutely but they also have been 
growing their renewable energy industry in a very significant 
way and now lead the world in renewables and now lead the world 
in both solar and wind. They have also made huge strides in 
energy efficiency. They are a quickly growing country as we 
know. No dispute that they use a lot of coal but the point is, 
the important is they have an accelerated renewable energy 
industry that is really creating really large numbers of jobs.
    Mr. Griffith. Isn't it their history that they do a lot of 
things that we don't do? For example I think in your written 
statement on page three you indicate that they have 27 nuclear 
power plants under construction and is that accurate?
    Mr. Reicher. They have--yes they have a large number of 
nuclear power plants under construction.
    Mr. Griffith. And you also indicated that they have a lot 
of hydroelectric facilities that are under construction or in 
the plans, is that correct?
    Mr. Reicher. That is correct.
    Mr. Griffith. And isn't it true that they pay a high price 
for those hydroelectric generated electricity in those plants?
    Mr. Reicher. Mr. Griffith, every energy technology, all of 
them have their pluses and minuses, and along with hydro you 
get those.
    Mr. Griffith. Isn't it true that the Chinese have not paid 
attention anywhere near the level of the United States towards 
the environmental impact of so many of their facilities and I 
am thinking of their hydroelectric in particular and the 
functional extension of the Three River Gorge Yangtze River 
Dolphin? Are you familiar with that?
    Mr. Reicher. Yes, I am.
    Mr. Griffith. And that would be accurate, is it not?
    Mr. Reicher. There is no doubt that the development of 
these kinds of facilities bring with it environmental problems 
and there is no doubt that the Chinese have not adequately 
attended to those in all cases. I have actually kayaked down 
those Three Gorges and I know exactly what is there and what 
has been lost, having said that, they have been making great 
strides to become leaders in renewable energy. They are making 
great strides to improve their energy efficiency and there are 
increasing calls and I think increasing response to improve 
their environmental performance but they have got a long way to 
go, no doubt about it. But from an economic standpoint, they 
are taking over this clean energy industry in a very 
significant way.
    Mr. Griffith. And from an economic standpoint do you think 
that it is appropriate that we adopt that model because I kind 
of got the impression you were holding them up as an example.
    Mr. Reicher. I am holding them up as an example of a 
country that has put a real priority on clean energy technology 
research, demonstration, development and deployment. I am not 
holding them up necessarily as a model for how you adequately 
ensure all kind of environmental performance but on that front 
I think there are improvements but they need to continue.
    Mr. Griffith. And isn't it true that we have different 
standards also on human rights and as a part of their 
hydroelectric program they have actually moved 22 million 
people from one location to another and offered such rich 
financial rewards as $7 a lot?
    Mr. Reicher. I don't know that at all. I am sorry.
    Mr. Griffith. But you are aware of having kayaked in that 
area that millions just for the Three River, just for the Three 
Gorges Dam Project had to be moved?
    Mr. Reicher. I don't know the exact number. Certainly there 
were large displacements of people just as there have been all 
over the world including in our own country when dams get 
built. Let me not sit here today and tell you that hydropower 
is without its major environmental, human and economic costs. 
All technologies, all energy technologies have their pluses and 
minuses and there are significant ones that we know well in 
this country and that the Chinese are experiencing themselves 
with respect to hydropower.
    Mr. Griffith. And I like Mr. Montgomery's comments about 
the fact they never take into consideration all the coal 
workers and I wonder how you would address that because it is 
not just the folks working at the power plants who work in coal 
but it is all the folks who provide equipment for the coal 
mines who make their livelihoods by supplying the miners 
themselves and then of course the miners themselves. And in 
that economic equation that you have made where you hold China 
up as an example, did you calculate in all the lost jobs that 
we would have in the energy field in this country, particularly 
in the coal fields?
    Mr. Reicher. There is always again got to be pluses and 
minuses. You have got to look at what comes with a move from 
one energy technology to the other. There is displacement. 
There are positives. There are negatives.
    Mr. Griffith. Thank you, Mr. Chairman.
    Mr. Whitfield. Yes, sir.
    Mr. Waxman, you are recognized for 5 minutes.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    This is a panel of seven people, six of whom underscore and 
confirm their views that are similar to the chair's and then 
there is one that has a different opinion and I thank you very 
much for letting this one witness testify. Yes, Mr. Barton was 
telling me how he always thought the Minority got a third of 
the witnesses.
    Nevertheless, Republicans are talking about EPA's onerous, 
burdensome regulations killing jobs. That is what this hearing 
is all about but EPA is simply requiring when it comes down to 
it energy efficiency when the largest polluting facilities in 
the country are constructed or expanded and significantly 
increase their pollution. That is what the EPA regulations do.
    Mr. Reicher, are energy efficiency improvements at new 
power plants, the melt kilns or the very largest manufacturing 
facilities going to kill jobs.
    Mr. Reicher. Mr. Waxman, I actually think improvements in 
energy efficiency at plants like this number one, make keep 
them online longer than they would otherwise operate. Number 
two, the amount of equipment required to improve that 
efficiency will create jobs. Workers will continue to be 
employed so I think on balance if we do this the right way and 
actually improve the efficiency of existing power plants this 
could be a very net positive economic outcome.
    Mr. Waxman. I must say from my 36 years in the Congress 
every time we have had an idea proposed to reduce pollution the 
industry representatives all come in and say they will be out 
of business and can't function. The economy will suffer greatly 
and then once the proposals are put into law they accomplish 
the goal. They become even more efficient and therefore more 
competitive.
    Mr. Reicher. Mr. Waxman, if I could, Henry Ford, II, 
commenting in 1966, on seatbelt and safety glass mandates for 
automobiles said we will have to close down the industry.
    Mr. Waxman. It is almost an article of faith among those 
who oppose any efforts to reduce our carbon pollution that 
China and the rest of the world aren't taking meaningful action 
to reduce their emissions and they argue why should we be doing 
anything that would disadvantage American companies if we take 
steps to reduce our own emissions. Is this an accurate 
statement? Is it true that China is taking no action to reduce 
carbon emission?
    Mr. Reicher. China has committed to reduce its carbon 
intensity 40 to 45 percent below 2005 levels by 2020, and they 
are actually expected this month, this in March to make that a 
binding commitment domestically.
    Mr. Waxman. Isn't it true that in China many of the people 
do not speak English? My next question is China is not standing 
still. That is the kind of question of isn't China bad on human 
rights and therefore we shouldn't do what they are doing on 
economic policy? The question then becomes is China standing 
still? Are China's policies costing China jobs or are their 
carbon and clean energy policies driving Chinese firms to 
dominate the global market for clean energy technologies? What 
do you think, Mr. Reicher?
    Mr. Reicher. You know, Mr. Waxman, it is not just that they 
are increasingly dominating in the manufacturing of these clean 
energy technologies but in a way even scarier is how 
increasingly they are beginning to dominate in research, 
development and demonstration. We see large American companies 
actually setting up their largest R&D facilities, Applied 
Materials, Incorporated, one of the largest makers of solar 
equipment manufacturing in the world is setting up a brand new 
R&D facility in China.
    Mr. Waxman. China is taking action to reduce its carbon 
pollution and to build strong, competitive, clean energy 
industries and the results are massive job gains or massive job 
losses?
    Mr. Reicher. The Chinese renewable energy industry has 
grown fantastically in terms of jobs.
    Mr. Waxman. They are the world's largest manufacturer of 
solar panels. Their aggressive policies are in its economic 
self-interest and we may not agree with other things they do 
and we are certainly not interested in their economic self-
interest. We should be interested in our own but they are 
acting in their economic self-interest. Mr. Reicher, if we do 
nothing other than roll back EPA's modest steps to reduce 
carbon emissions are we at risk at losing the clean energy jobs 
race with China?
    Mr. Reicher. Absolutely, we need to put in place a whole 
host of mechanisms to really regain the lead that we once had. 
We developed most of this industry so for example I do think 
the clean energy standard makes a lot of sense to put in place. 
I also think we should support the DOE Loan Guaranty Program 
which has been so critical to building the next generation of 
nuclear power plants, building breakthrough renewable energy 
facilities and we should transition that to the Clean Energy 
Deployment Administration that was adopted by the full house 
and in the Senate Energy Committee on a bipartisan basis last 
year.
    Mr. Waxman. Thank you.
    Mr. Whitfield. Mr. Barton, you are recognized for 5 
minutes.
    Mr. Barton. Thank you and it is a joy to watch the 
coordination between the ranking member and the ranking 
minority's witness. Is there any question that he didn't ask 
exactly the way you wanted it asked, Mr. Reicher? I am sure we 
will give him some more time if we need to do that?
    Mr. Waxman. Does the gentleman find fault with any of my 
questions?
    Mr. Barton. No, I thought I don't find fault. I just think 
it is a joy to watch the coordination. I think you all handled 
that very well.
    Mr. Waxman. Done with the other panelists.
    Mr. Barton. I was giving you a compliment.
    Mr. Waxman. I will accept it.
    Mr. Barton. Very good.
    Mr. Reicher. Mr. Barton, I have been asked questions like 
this a lot so this is fairly straightforward.
    Mr. Barton. Thank you.
    My question to anybody on the panel, unscripted, is there a 
control technology to control CO2 that is in 
existence today and is cost effective?
    Mr. McConnell. My understanding is there is not one.
    Mr. Barton. There is not one and what about Mr. Cicio, are 
you aware of any control technology that exists to control 
CO2?
    Mr. Cicio. No, there is no end of pipe technology that is 
cost effective.
    Mr. Barton. Mr. Reicher, do you share that?
    Mr. Reicher. Well, the good news, Mr. Barton, is that 
yesterday and this will be relevant to Mr. Shimkus and Mr. 
Rush, a major project was announced in Illinois that would 
build a carbon capture and sequestration facility under the 
FutureGen Program.
    Mr. Barton. I am very well aware of that.
    Mr. Reicher. A billion dollar investment in the project and 
a thousand construction jobs and a thousand service sector jobs 
so we are making some progress.
    Mr. Barton. In and of itself that technology is not cost 
effective. It cost at least 30 percent of the cost of the power 
generation just to sequester the carbon.
    Mr. Reicher. We have got a long way to go no doubt. I guess 
the most cost effective we got one we have is probably trees.
    Mr. Barton. OK so the answer is by if not unanimous consent 
by consensus, is that there is no existing technology to 
control CO2.
    Mr. Joyce. Well, yes it is nuclear power.
    Mr. Reicher. You are talking about capturing 
CO2.
    Mr. Barton. You can burn hydrogen. Hydrogen doesn't create, 
you know, if you burn hydrogen you get H2O, you get water 
vapor. Nuclear power does not combust, it fissions. So there 
are technologies out there but if you are going to use natural 
gas, if you are going to use oil, if you are going to use coal, 
if you are going to use even our famous biomass here, you are 
going to create CO2 and there is no cost-effective 
way currently to mitigate it.
    Mr. McConnell. But one way to reduce CO2 
emissions in our industry, the automobile industry is to have 
one national standard, CAFE that Congress put into place that 
takes into consideration cost. You know, we have to sell these 
things. It may cost a billion dollars somewhere but ultimately 
what I am the expert on is selling fuel-efficient cars since I 
was 16 and right now we have three agencies, California, EPA 
trying to tell us all what to do. We need one because they are 
the only one that take into consideration customer 
acceptability and choice and it doesn't do the economy any good 
or jobs. Auto dealers employ a million people in this country. 
If you have a product that sits on the lot that doesn't sell 
because it is not priced right there are many businesses that 
have been shuttered down and gone broke because they are not 
giving the customer what they want and so that is the reason 
our organization would like to see CAFE implemented.
    Mr. Barton. Mr. Chairman, I am not sure what my time. I 
never saw the clock start or stop.
    Mr. Whitfield. Well, I am going to ask the official 
timekeeper here.
    Mr. Barton. Do I have time for one more question?
    Mr. Waxman. Unanimous consent the gentleman be given 2 
additional minutes.
    Mr. Whitfield. Without objection.
    Mr. Barton. Be careful, my side may object to that. The 
unanimous consent things are shaky sometimes. I have one final 
question and I appreciate my friend from California and the 
chairman giving me some time.
    Administrator Jackson has testified that greenhouse gas 
best available technology most likely means that you just have 
to use energy efficiency measures. Mr. Cicio, you represent the 
largest energy users in America. Don't the companies that you 
represent already do everything they can to be energy 
efficient?
    Mr. Cicio. Most certainly the industrial sector spends more 
money and has had more success in improving energy efficiency 
than any of the sectors of the economy. In this case the EPA 
really has it backward. When a manufacturer decided--by the 
way, if you are not aware manufacturing has probably hundreds 
of thousands of combustion processes that are used to produce 
widgets. When we make decisions in what process is used to make 
a widget we take several things into consideration like how 
many widgets can we produce in a time period? What is the cost 
of a widget? What is the raw material flexibility to produce 
the widget? What is the quality of the product with that 
process? What is the flexibility of the manufacturing operating 
processes, all that criteria in deciding what process plus 
energy efficiency? How energy efficient is the process? EPA, 
unfortunately with the new regulation starts with the premise 
of what is the most energy efficient process and that is not 
going to create a low-cost manufacturing widget process. That 
is too limiting and it is going to lead to higher cost.
    Mr. Barton. I thank the discretion of the chairman and 
ranking member.
    Mr. Whitfield. Mr. Green, you are recognized for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    First, I believe that controlling carbon shouldn't be EPA. 
The Supreme Court said that. I want Congress to be able to make 
those decisions because we can balance that economics and we 
tried last Congress. It couldn't get through with the cap and 
trade. I would hope our committee would look at it and that is 
why I am a cosponsor of the 2-year delay so we can force 
Congress to deal with it. Although the solution may be just to 
encourage trees but we would probably have to go to the Natural 
Resources Committee to do that.
    Mr. Cicio, in May of 2010, the EPA finalized the tailoring 
rule and until June 30 of this year only sources subject to the 
prevention of significant determination for other pollutants 
will be required to consider greenhouse gases in the permit. 
From July 1 of 2011 to June 30 of 2013, new sources the emit at 
least 100,000 tons of greenhouse gases per year or existing 
sources seeking to increase pollution by 75,000 tons per year 
will be required to obtain the PST permits. The EPA will 
determine on July 1 of 2012, whether it will lower the 
threshold further but it has committed that it will not 
consider any level below 50,000 tons a year. Can you please 
cite how many industrial manufacturers in our country are 
affected by regulations at each of these three levels, 100,000 
tons of GHGS a year, 75,000 or 50,000? Do you have any idea 
from your association? I mean I represent refineries so.
    Mr. Cicio. Oh yes, you have a lot of it in your backyard. 
Unfortunately, I don't have those statistics and I would be 
happy to try to craft something for you and provide that to 
you.
    Mr. Green. I would appreciate it because our testimony from 
Administrator Jackson a few weeks ago was that they tailored it 
so it would only cover the largest facilities and just see how 
many and granted they are trying to start with the largest so 
to see how many there are and appreciate you getting it back.
    What sort of federal carbon controlling program if 
developed by Congress and not the EPA could the industrial 
manufacturers support?
    Mr. Cicio. Well, thank you, that is a wonderful question. 
We have actually addressed that in what we call our Sustainable 
Manufacturing Growth Initiative because as manufacturers we put 
together policies that we felt would incentivize and remove 
regulatory barriers to even greater energy efficiency. And as 
you heard in my testimony, implementation of that program would 
result in 10 percent reduction of all greenhouse gas emissions 
in 10 years and even more importantly it would create 3.2 
million man-years of jobs and almost $500 billion of capital 
investment in 10 years. That is capital investment that is not 
happening today. So the best thing is that it utilizes existing 
but more energy efficient technology and simply taking it off 
the shelf and getting it in the ground today creating jobs and 
investment.
    Mr. Green. Well and I don't know who answered our former 
chair of the committee, the ranking member that said nuclear 
would be the solution for some of our carbon controls and we 
are trying to do that because that is one of those solutions 
because so much of our carbon comes from our electricity 
producing plants. Again, I have those plants, I have coal 
plants but I also have refineries and chemical plants that have 
another issue. So but I think Congress ought to make those 
decisions.
    Mr. McConnell, California's fuel economy program exempts 
until 2016 automakers who sell less than 60,000 vehicles per 
year in California and manufacturers exempt in California are 
also exempt from every CARB State regardless of how many 
vehicles are sold outside California. After 2016, CARB has 
intended to regulate these vehicles at a lower standard. If the 
brands you sell are not exempt how will that impact on your 
brand line because I know you have both Honda and Acura and I 
think you have a U.S. model too although Honda is also a U.S. 
model too.
    Mr. McConnell. Well, first of all we believe the State of 
California should not be setting national energy policy.
    Mr. Green. Coming from Texas, I agree.
    Mr. McConnell. So I appreciate your question. I will tell 
you, you are absolutely right and I don't think some people 
realize it. Selling Honda we are under the California which is 
just a hodgepodge. There are three different people regulating. 
What we want is one, CAFE which Congress laid out, a single 
national standard. For example, you are right, Honda, Toyota, 
Nissan, Ford, Chrysler, GM are covered. BMW is covered. 
Mercedes is not covered. Hyundai is not covered. Kia is not 
covered. Porsche is not covered. Volkswagon is not covered. 
Jaguar is not covered. Suzuki, Mitsubishi, I could go on and 
on, and potential that new Chinese and Indian automakers would 
not be covered. That is why under CAFE they don't have all of 
these crazy exemptions. So we want the one national standard. 
It takes the most important thing to me, it take an 
accountability, they are required that, the EPA is not, 
California is not. Customer acceptability and choice because 
ultimately the customer is the one that spends its own, the 
family decides what do I want, what can I afford and if that is 
in the case you will sell more new cars, create more jobs and 
you will also get more fuel-efficient cars on the road which is 
obviously a big goal.
    Mr. Green. Thank you, Mr. Chairman, and the gavel is for us 
not to ask any more questions, not for you all.
    Mr. Whitfield. Mr. Shimkus, you are recognized for 5 
minutes.
    Mr. Shimkus. Thank you, Mr. Chairman.
    This kind of follows-up in a hearing we had 2 weeks ago on 
the environment and the economy. It is my subcommittee but we 
have to accept the fact that the decisions we make or the 
decision a regulator makes that there is a job aspect that 
people ought to debate and discuss and I come to this with 
great passion because and many of you have seen this before. 
Mr. Carey, you have. Mr. Cicio, you have seen it. This is why 
we killed Waxman-Markey because we made the argument that in 
'92 on the Clean Air Act which was a legitimate debate on 
cleaning the air these miners lost their jobs. This is just one 
group of miners at a mine in my congressional district which is 
closed now, 1,000 miners lost their jobs and by using this and 
the reality is there are a lot of fossil fuel Democrats no 
longer in Congress and do you know why, because they didn't 
protect their jobs because of the greenhouse gas movement, the 
Waxman-Markey threatened to destroy any remaining jobs.
    Mr. Carey, you have testified before. How many coalminer 
jobs are lost in the advent of the Clean Air Act?
    Mr. Carey. Mr. Chairman and Congressman Shimkus, the idea 
in Ohio and I think when I testified before we looked at the 
amount of tonnage of coal we lessened it by half, take away 
half that miners, those were roughly 3,000 miners, multiply a 
fact of close to 10,000 or 10 for every one coal mining job so 
3,000.
    Mr. Shimkus. So your staff 35,000 jobs were lost and that 
was in the Clean Air Act which a lot of us would say knock 
socks particulate matter, some bad stuff that we really needed 
to get out of, you know, out of the air. There is now a debate 
about greenhouse gases and is it a pollutant, is it not and 
that is why we need to move on this legislation to let us to 
take into the aspect of what is the cost, what is the impact on 
the economy. Why are we so fired up about this? Well, here is 
just one rule from the EPA and they are quoted, ``The RIA for 
this proposed rule does not include either qualitative or 
quantitative estimation of the potential effects of the 
proposed rule on economic productivity, economic growth, 
employment, job creation or international economic 
competitiveness.'' Now, Mr. Carey, don't you think we ought to 
consider that when we are promulgating a rule or a regulation?
    Mr. Carey. Mr. Chairman, Congressman, yes.
    Mr. Shimkus. Mr. Cicio?
    Mr. Cicio. Absolutely.
    Mr. Shimkus. Mr. Joyce?
    Mr. Joyce. Yes.
    Mr. Shimkus. Mr. McConnell?
    Mr. McConnell. Without question.
    Mr. Shimkus. Mr. Montgomery?
    Mr. Montgomery. Yes.
    Mr. Shimkus. Mr. Reicher, do you think the EPA is wrong in 
not considering the economic impact of a proposed rule?
    Mr. Reicher. EPA is required to consider the economic 
impact of a proposed rule.
    Mr. Shimkus. This is from the EPA and I just read the 
quote. Let me just quote another one, economic analysis on 
another proposed EPA rule, let me read in subparagraph 9.2, .3, 
.3, impacts on employment the chapters on benefits, chapter 
seven and cost, chapter eight, point out that, ``The regulatory 
induced employment impacts are not in general relevant for a 
cost benefit analysis.''
    Mr. Reicher. So, Mr. Shimkus, I would just urge you to take 
a look at the Clean Air Act sections, the three sections that 
relate to.
    Mr. Shimkus. And I am going to reclaim my time. I am going 
to reclaim my time, sir. Sir, I am going to reclaim my time.
    My point is we are not disputing knock sock particulate 
matter. We do dispute carbon dioxide. Now, I have got a 1,600 
megawatt. Does everyone agree that if you raise the price of a 
commodity product that the cost of good sold goes up?
    Mr. Carey. Yes.
    Mr. Shimkus. That is a yes. Mr. Cicio?
    Mr. Cicio. Absolutely.
    Mr. Shimkus. Mr. McConnell?
    Mr. McConnell. Yes.
    Mr. Shimkus. Mr. Joyce?
    Mr. Joyce. Yes.
    Mr. Shimkus. Mr. Montgomery?
    Mr. Montgomery. Yes.
    Mr. Shimkus. Mr. Reicher?
    Mr. Reicher. Ask the question again?
    Mr. Shimkus. I asked Administrator Jackson if she really 
believe in the basic economic 101 supply and demand. If the 
supply is constrained or the cost of the good goes up does that 
mean that the price of the cost of the good goes up?
    Mr. Reicher. Well, if you have to use the same amount of 
that good of the product that has been improved.
    Mr. Shimkus. That was a better answer than the 
administrator gave and I appreciate that.
    Mr. Reicher. To improve the efficiency of the manufacturing 
process.
    Mr. Shimkus. And which they do, that is the whole debate 
that Mr. Cicio will say. It is not worth the manufacturers' 
time, effort and energy to run inefficient plants. Now and let 
me add, I am going to run out of time. Mr. Cicio, you said you 
don't know of a single manufacturer that would not be harmed by 
greenhouse gas and would lose jobs, is that true of both?
    Mr. Cicio. What I said specifically is that I talked to 
lots, many, many manufacturers that have facilities all over 
the country. I do not know and have not heard of one that 
support the EPA greenhouse gas regulations, yes, sir.
    Mr. Shimkus. Thank you. I yield back.
    Mr. Whitfield. Mr. Walden, you are recognized for 5 
minutes.
    Mr. Walden. Thank you very much.
    I just want to ask I think it is Mr. Carey and anybody else 
that wants to respond. Walk us through what you think the cost 
of these regulations are on jobs and the economy in your part 
of this debate because this is something I think people at home 
care a lot about. I mean none of us wants dirty air. Most of us 
in my part of the world in Oregon like renewable energy as long 
as we kind of know what the costs and tradeoffs are although 
some people are getting a little tired of the windmills.
    Mr. Carey. Well, Congressman, what I think we are debating 
is carbon dioxide and the role of the EPA in regulating carbon 
dioxide under the Clean Air Act so if we take that off the 
table, if you look at Ohio, West Virginia, Kentucky, 
Pennsylvania. In Ohio, 90 percent, 89 percent of all the 
electricity off of the grid comes from coal base so when you 
relate that to heavy manufacturing anybody who is making a 
widget understands that one of the large costs of making that 
widget is energy so ultimately the price of that product would 
go up and if it goes up possibly that product's production 
would be moved overseas and ultimately then we would lose the 
job there.
    Mr. Walden. We are seeing in the northwest is some of the 
renewable energy begins to feed into the system rate increases 
of 10-15 percent as sort of the cost, additional cost. Now, 
these are benefit tradeoffs we are talking about here because 
you have got the renewable energy but there is this cost piece.
    Mr. Carey. No doubt about it, Congressman. What was put in 
place in Ohio was Advanced Energy Portfolio Standard.
    Mr. Walden. Right.
    Mr. Carey. And ultimately what you are seeing now is those 
utilities can't meet the cost cap that was put in place by the 
State legislature. So the idea that the price is going to go up 
with those renewables is a fact and it is happening.
    Mr. Walden. Mr. Cicio.
    Mr. Cicio. Yes, on the subject of cost of regulation, 
number one for those who have not, who want to invest in the 
United States in a manufacturing facility to create jobs, a 
rule like this is preventing investment. So these are jobs that 
could have been and won't. Manufacturing is globally mobile. We 
must produce in countries where we can have low costs and 
thrive or we die as a company. So but for manufacturing 
facilities that stay and have these higher costs then their 
competitiveness is threatened and the potential for job loss 
and plant shutdown.
    Mr. Walden. Mr. Joyce.
    Mr. Joyce. In the permitting process, you know, just adding 
another layer of permits, you have got, you know, local and 
State permits. When we, you know, as the tailoring bleeds off 
and more and more buildings come under the control of EPA.
    Mr. Walden. Right.
    Mr. Joyce. And more and more permits, I mean a federal 
permit, any federal work is daunting for a smaller project so 
we have just great concern over the additional permitting in 
the construction side of the house and what we think is a lot 
of good projects is probably the straw that breaks the camel's 
back. They just don't get done. So those are huge costs. They 
are huge costs to jobs and job creation in the construction 
sector.
    Mr. Walden. And are those ever quantified? I mean the 
project that never gets built probably never gets the big press 
so you don't know the loss, right?
    Mr. Joyce. There is soft cost and, you know, any type of a 
labor paperwork intensive permitting process on a construction 
job is bad right now at any time.
    Mr. Walden. Yes, Mr. McConnell, do you want to comment on 
this?
    Mr. McConnell. One of the biggest problems that we have 
because California has a waiver is they don't even have to 
consider affordability outside of California.
    Mr. Walden. Explain what you mean by that.
    Mr. McConnell. Well, California has ability if they control 
14 other States that signed up with them on so if they decide 
that they don't want to participate in the national program, go 
along and they take their ball and they go play with somebody 
else, then what happens is they do not have to consider how 
much it costs outside of the State. They only have to consider, 
they are only looking at the State of California, not even 
these other 14 States and the problem with that is it results 
in a rationing of vehicles but the cost, you have got three 
different people. You have got to know some certainty in the 
automobile business to design cars in the future.
    Mr. Walden. Right.
    Mr. McConnell. How much cost is and they don't even have to 
consider, the EPA does not even have to consider customer 
acceptability.
    Mr. Walden. Right.
    Mr. McConnell. So they can stack on the cost but quite 
frankly that is the problem and that is the reason, you know, 
and you go back and forth with one national standard that this 
body has for fuel economy.
    Mr. Walden. Got it, I want to try and get to the other two. 
Mr. Montgomery, I am running out of time.
    Mr. Montgomery. I think the answer really comes down to 
there is no such thing as a free lunch that in our economy we 
have every incentive is for energy efficiency, using energy 
wisely and minimizing the cost of production. That is not true 
in China and that is why China can catch up so easily and since 
there is no free lunch if we are expending more of our 
resources on expensive energy like renewables, they are not 
available for producing the other things that people desire to 
live on and have quality of life.
    Mr. Whitfield. Thank you.
    Mr. Terry. I appreciate that, yes, whatever.
    Mr. Whitfield. Your first name is Lee, right?
    Mr. Terry. Yes, yes.
    Mr. Whitfield. Thank you.
    Mr. Terry. Mr. McConnell.
    Mr. McConnell. Yes, sir.
    Mr. Terry. I appreciate you being here even though you 
referenced the CAFE.
    Mr. McConnell. But I was aware of the name.
    Mr. Terry. But that was a great process because A, it did 
involve the already existing agency that has the expertise in 
determining fuel efficiency in a very scientific way. Not a 
political way and it was a byproduct of Congress, signed into 
law by the President. That was very carefully crafted, pushing 
the automobile industry as far as we could take it. Keeping in 
mind safety, keeping in mind the desire to keep jobs in America 
and the car industry and so that is probably part of my 
discussion I will have with the EPA representative of why the 
Administration and the EPA now wants to duplicate, replace, 
undo what Congress did.
    Mr. McConnell. Well, we certainly appreciate that. I will 
say that the EPA is wasting millions of taxpayers' dollars on 
duplicating NHTSA's research in fuel economy for tailpipe 
emissions.
    Mr. Terry. Probably creating a job.
    Mr. McConnell. It is going to cost a lot of jobs.
    Mr. Terry. Well, and you had mentioned that California that 
you and Mr. Walden discussed but there was a statement by one 
of the members that there is one national standard but yet that 
is not what I hear and that doesn't seem to be what EPA is 
striving for. Would you explain?
    Mr. McConnell. Yes, there are, they are regulated by, there 
are three agencies, three laws and three rules, and they have 
termed this, I guess it is a pretty nifty thing they did was 
they call three different standards one national program. I 
mean it is a fiction. You have the correct one national program 
and that is CAFE and it is implemented by NHTSA.
    Mr. Terry. How does that affect the car dealers and auto 
manufacturing in the United States?
    Mr. McConnell. Well, first of all to me one of the biggest 
things is you can't have one State setting the national 
standard but it affects us because I buy the cars from the 
manufacturer. They don't consign them to me. I have these cars 
on my lot. If they are not, if you don't take into 
consideration what your plan does, CAFE does, customer 
acceptability and choice because the customer is the one that 
makes the decision. They have a choice. They can just keep 
riding in that car they have got and work on them and we are 
super busy in our shop because that is what people have done 
after the recession but it costs a lot of money and it is a lot 
of duplication. You know, when you are in business and you are 
planning, what you need is clear, concise guidance and I 
believe that one national standard under CAFE with NHTSA 
implementing with all of the safeguards, I think you will get 
the CO2 reductions. You will get to the goal but you 
will get to a goal that is realistic for the marketplace also.
    Mr. Terry. That is part of our goal here. All right, I 
appreciate that.
    One last question to Dr. Montgomery because I felt like I 
was in an alternative universe when we were having a discussion 
about green jobs and how great a job that China is doing in 
manufacturing all this equipment but the reality is it is being 
manufactured over there because it is inefficient to 
manufacture it in the United States where it was designed and 
engineered. You answered that or brought that up in your 
report. Would you expand on that? Do you think it is true that 
China is just doing this altruistically?
    Mr. Montgomery. No and I think there are probably two or 
three points about China. The first one being, it is ironic 
because 2 weeks ago I was testifying in the Senate hearing on 
green jobs where one of the witnesses was from the steel 
workers union which had filed the 301(b) trade complaint 
against China's internal subsidy practices which were enabling 
it to produce the wind and solar and other equipment that is 
now being used around the world and in the United States, and 
preventing U.S. firms from getting in there. So what we are 
looking at is not environmental policy for China. It is 
strategic trade policy as it has always been and do we want to 
imitate that? Well, if China is in violation of the WTO for 
subsidizing its industries, we would be as well but the real 
point about all of that has nothing to do with environmental 
regulation. China is not creating those industries by making 
its own country clean. It is creating them by subsidizing their 
exports as it has always done to create industries. And I think 
the other point about China is that China has a state of 
institution and I have been writing about this for years that 
lead China in the past five times the energy use for dollar of 
output as the United States. That is coming down but it is 
coming down because it is so hideously inefficient it is in 
their economic interest to do it. We have a well-functioning 
state of markets here and we don't have that free lunch.
    Mr. Whitfield. Thank you, Mr. Terry.
    Unfortunately, we have votes on the floor. We have three 
more and then that is it for the date but before we go, Dr. 
Burgess, I am going to recognize you for 5 minutes.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Montgomery, just to stay with you for a moment, we are 
going to hear on the next panel testimony about the health 
hazards of carbon dioxide and do higher energy prices carry 
with them any inherent health risk vis a vis keeping open 
medical offices, health centers and this type of thing. Does 
that affect the availability of medical care or health care?
    Mr. Montgomery. Yes, it does and it is really a problem the 
EPA refuses to do long risk analysis in this area. If we are 
going to look at risks from greenhouse gas emissions, those are 
highly speculative, highly uncertain and anything we do in the 
United States will have only a miniscule effect on them. Carbon 
dioxide is not like ozone. I mentioned ozone in Pasadena. Ozone 
in Pasadena was created in Beverly Hills, blew across and ended 
up in Pasadena and it produced tremendous health effects. 
Greenhouse gas emissions are mixed in the entire atmosphere and 
we are not going to change them through these regulations in a 
way that is even worth bothering to try to calculate unless we 
assume all of the rest of the world does what we are doing and 
that is what EPA tends to do. And so there is a small health 
benefit from actions that we actually take in the United States 
but on the other side of it, you are absolutely right, higher 
energy costs make air conditioning harder for people to afford. 
We know that the lack of air conditioning has been the primary 
reason for deaths during heat episodes in Chicago and other 
places and it takes a risk, long risk analysis which EPA did 
not do in determining that on balance the health risk justified 
the standards.
    Mr. Burgess. Of course, I suffer from asthma myself and I 
know what triggers there are. I try to avoid them as best I can 
but I have never associated carbon dioxide with an asthma 
trigger. It just doesn't work out medically so I appreciate 
your comments in that regard. On the, you know, you talked a 
little bit about some of the multiplier effects. Is there a way 
to apply the multiplier effect in reverse to this type of 
situation?
    Mr. Montgomery. It is interesting. There is a valid way to 
do it and I think the work with Jorgenson and Wilcoxen and have 
been doing and asking how do health effects of criteria 
pollutants that cause asthma affect worker productivity and 
they put that into their large kind of assessment of not 
greenhouse gas regulations but the past Clean Air Act 
regulations like the socks and ozone regulation clearly had 
health benefits. There is a way to bring it and in terms of 
dealing with greenhouse gas emissions, it really isn't 
applicable because what we are talking about are health effects 
that are dominated by temperature changes in tropical latitudes 
that lead to increased kind of vector populations that cause 
malaria and such diseases. So it is a global public health 
problem but the solution for it is global public health 
methods. For example, going back to DBP we could wipe out the 
malaria vector, no matter what the temperature was.
    Mr. Burgess. I see.
    Mr. Montgomery. So there is an ironic point about 
multiplier analysis because if you do the kind of multiplier 
analysis that PERI is doing, they argue quite explicitly over 
and over again that the reason they are getting increased jobs 
is because greenhouse gas policies favor labor intensive 
industries and they put more people to work that way. Well, if 
we have a lot of illness in the country then businesses would 
have to hire more workers to hire to replace their workers who 
were sick in order to get the same level of output and so if 
you applied their multiplier you would get the ridiculous 
conclusion that who or health actually increases jobs. It is 
not a reasonable conclusion for what you get out of that kind 
of a multiplier analysis.
    Mr. Burgess. Dr. Reicher, let me ask you a question if I 
could. You were at Google previously? Is that correct?
    Mr. Reicher. Yes.
    Mr. Burgess. And when you were there, did your company ask 
the Chinese government to institute the type of greenhouse gas 
reductions like the cap and trade proposals that we had before 
this committee 2 years ago?
    Mr. Reicher. Could you repeat the question? I am sorry.
    Mr. Burgess. When you were at Google did you or did Google 
ask the Chinese, did your company, Google, ask the Chinese 
government to institute any type of mandatory greenhouse gas 
reductions such as would have been required under the Waxman-
Markey legislation that we debated in this committee 2 years 
ago?
    Mr. Reicher. I don't think the company is in the position 
to.
    Mr. Burgess. Well, you support or at least I got the 
impression you support a cap and trade type proposal in this 
country. Did you ever ask the Chinese government to institute a 
cap and trade proposal?
    Mr. Reicher. I did not ask the Chinese government to 
institute a cap and trade proposal. I am in favor of 
comprehensive energy and climate legislation. There are a whole 
host of means to get there and I think we should get started 
for economic reasons, and for security reasons, and for 
environmental reasons.
    Mr. Burgess. But you and Google at no time insisted that 
the Chinese government follow the same type of protocol that 
has been advocated?
    Mr. Reicher. Again, I was not in conversations with the 
Chinese government about greenhouse gas regulations.
    Mr. Burgess. Thank you, Mr. Chairman. I yield back.
    Mr. Whitfield. Well, once again I apologize to you all. I 
hope that you maybe will be able to stay another 10 minutes or 
so. We have three votes on the floor. I don't think it will 
take long. We will be right back. Hopefully, I think most of 
our members will be back that haven't asked questions so we 
look forward to seeing you in a few minutes.
    [Recess]
    Mr. Whitfield. I call the hearing back to order.
    At this time, I will recognize Mr. Gardner of Colorado for 
5 minutes.
    Mr. Gardner. Thank you, Mr. Chairman, and thank you to 
everyone for putting up with the schedule today. I appreciate 
your time and certainly your expertise.
    A couple of weeks ago we had Administrator Lisa Jackson of 
the EPA testify before the subcommittee and I want to read a 
quote that she had in our dialog. She said and I quote, ``There 
are tremendous opportunities in rural America for the economy 
to continue to grow as it has thrived over the past several 
years.'' This is just a couple of years ago as the economy had 
in her belief, her opinion has thrived over the past couple of 
years. So when I asked her to clarify and whether she really 
meant the economy has thrived over the past several years her 
response again and I quote was, ``Rural America's economy has 
done fairly well as the rest of the country has seen the 
housing market and economy really do poorly.'' Well, in 17 out 
of the 64 counties in Colorado, they had a population decline, 
all of them rural, most of them rural. And many of the counties 
in my district, they have lost population and I am quite 
disturbed actually that the nature of the assertion made by 
Administrator Jackson really shows how out of touch the 
administrator is when it comes to the economic well-being of 
our, my State, my district and this country.
    I wanted to get your thoughts quickly on what is happening 
to our economy and economic policies in this Nation when it 
comes specifically to some of the testimony that was given 
today and some of the statements that were made. I wanted to, 
excuse me, find it here. Some of the questions have been 
offered a little bit about the nature of regulations, the 
impact of those regulations and what it means for our rural 
economies in particular. Do you think the greenhouse gas 
regulations will impact our rural economy, Mr. Carey?
    Mr. Carey. Congressman, yes, I do. There is no doubt about 
it. The greenhouse gas will directly affect jobs.
    Mr. Gardner. Mr. Cicio.
    Mr. Cicio. Some of my companies are fertilizer producers. 
About 75 percent of the cost of making fertilizer is the cost 
of natural gas and these regulations would indeed increase 
energy costs.
    Mr. Gardner. Mr. Joyce.
    Mr. Joyce. Yes, we would see it across the board, 
particularly with the farmers and the livestock sector.
    Mr. Gardner. Mr. McConnell.
    Mr. McConnell. I don't think I have anything to add to 
that.
    Mr. Gardner. Mr. Montgomery.
    Mr. Montgomery. Yes, I would agree with both that the costs 
of agriculture inputs are going to go up and that cattle is 
probably going to be suffering both because it uses other 
grains, and I think the other part of this is that the EPA 
regulations are not really, I don't see a way that they are 
going to include activities like sequestration and other farm-
based activities that could potentially be profitable as a way 
of providing offsets for greenhouse gas emissions under a 
broader and more comprehensive policy.
    Mr. Gardner. Mr. Reicher.
    Mr. Reicher. Some of those impacts will be positive and 
some of them will be negative. If you are in the wind business 
it could be quite positive. If you are in the natural gas 
business it could be quite positive.
    Mr. Gardner. What if you are in farming and you grow crops?
    Mr. Reicher. It all depends on what you are farming. The 
opportunities around biomass for power for fuels are very 
significant and so again like so many answers to so many of 
these questions today, Mr. Gardner, depends on the specifics.
    Mr. Gardner. Mr. Cicio, a statement by the EPA was made 
earlier that said when it was talking about he pays authorities 
to control carbon emissions that that bill would deprive 
American industry of investment certainty and new incentives 
for upgrading to advanced to clean energy technologies. Do your 
members feel deprived and that they are not willing to make 
investment because of this regulation, the lack of this 
regulation?
    Mr. Cicio. No, I have not heard anyone say that.
    Mr. Gardner. Thank you.
    Mr. Reicher, interested in your comments on the nuclear 
power and I believe you talked about the need to actually 
improve energy permitting projects and also nuclear power 
permitting. What specifically do you think we could do to 
increase the presence of nuclear power development and to 
improve energy project permitting and site?
    Mr. Reicher. Well, Mr. Gardner, I think one of the 
challenges that advanced nuclear faces, advance renewables 
face, a whole host of these technologies face is how you get 
the first large-scale commercial plant financed and built in 
this country. It is fairly straightforward to get the little 
prototype built, venture capital.
    Mr. Gardner. Well, finance is more than permitting. You 
specifically said permitting.
    Mr. Reicher. Oh you said well, it is two things. One is we 
have got to get those first-of-a-kind commercial plants built. 
That is where I think the clean air and the deployment 
administration and its ability to finance.
    Mr. Gardner. On nuclear power, what can we do for 
permitting?
    Mr. Reicher. Permitting, there is to issue them. The 
Nuclear Regulatory Commission has taken quite a look at ways to 
streamline permitting. I am not, I don't know the details of 
the changes they propose but there are a whole host of things 
but you are not going to get them built if you can't get them 
financed and that is the real issue at this point.
    Mr. Gardner. Do you think we should include hydropower as 
part of the clean energy standard?
    Mr. Reicher. I think a clean energy standard should be very 
broad and should include all the renewables and it should 
include energy.
    Mr. Gardner. Including hydropower?
    Mr. Reicher. Yes, including hydropower.
    Mr. Whitfield. Mr. Inslee, you are recognized for 5 
minutes.
    Mr. Inslee. Thank you.
    I want to ask Mr. Reicher about the public's belief about 
this issue of whether or not we should stop the federal 
government from doing its job. There is basically an effort 
here which is pretty incredible to me to tell the Environmental 
Protection Agency they can't enforce the provisions of the 
Clean Air Act which is like telling the FBI they can't arrest 
terrorists or cops that they can't arrest bank robbers. We are 
intentionally--folks around here want to intentionally disable 
the ability of the government to do its statutorily mandated 
job. To me that is pretty amazing so I wondered what the 
American people thought of that and we did a little looking and 
the people I talked to where I live in the State of Washington 
certainly don't think by huge majorities the people I talk to 
don't think that is a very good idea to tell the federal 
government it can't do its job, to intentionally shackle it and 
put its handcuffs on and let polluters pollute. So to check out 
whether I am just talking to the wrong people, I did a little 
research and to what the polling would disclose Americans 
think. It was pretty timely because the poll came out by the 
public policy polling, NRDC, just the other day. It showed that 
68 percent of Americans were opposed to delaying EPA reducing 
carbon pollution by enormous majority, 68 to 32 percent. You 
can't--it is hard to get 68 percent of Americans to agree that 
baseball is the American sport but we got 68 percent of 
Americans. Then you look at if you do it on a more grandular 
level I saw another poll done by I believe the sustainable 
business or I read about it at sustainablebusiness.com of 16, 
excuse me, 19 congressional districts asking a very similar 
question after asking both sort of arguments on both sides of 
this very fair poll showed that in 19 congressional districts 
represented by Republicans, in those Republican districts 66 
percent of people including 45 percent of Republicans and 62 
percent of Independents found that they didn't want the EPA to 
be disabled. There is a third poll, I don't have the results 
right in front of me but very similar results by almost two-to-
one margins Americans didn't want to disable the federal 
government from doing its job to reduce pollution. Now, I have 
some theories as to why Americans believe that. I think it is 
because Americans are optimistic and know that we can do 
innovations and create new jobs associated with these new ways 
of reducing pollution but, Mr. Reicher, I just wondered if you 
wanted to express thoughts about why you think Americans feel 
so strongly that people are out to lunch who want to disable 
the federal government here.
    Mr. Reicher. Well, Mr. Inslee, I think it starts with the 
fact that there is a basic understanding that climate is going 
to have serious, serious impacts on human health and the 
environment and you start with that presumption as we did with 
all the other sort of pollutants we have been dealing with and 
that motivates people to end of saying, you know, we want our 
government to take action. I go from there to say the Supreme 
Court said figure out whether carbon is a pollutant. The EPA 
took that and figured out that it was and said what are we 
supposed to do when it is determined to be pollutant? We are 
supposed to go out and begin to put some controls on it so I 
think the public recognizes that we are dealing with a serious 
risk. The Supreme Court has weighed in. The relevant agency has 
weighed in. Plus, and this is important, our investment 
community Wall Street and Silicon Valley has said figure this 
out. If you want money to stay in this country for clean energy 
investments, figure out whether or not you are going to be 
regulating this. Figure out whether you are going to put energy 
standards in place, pollution standards in place to deal with 
this carbon. As long as we are not going to make that decision, 
we are going to see massive amounts of capital flow to other 
countries where they have made that decision.
    Mr. Inslee. So let me suggest one more reason huge 
majorities of Americans think it is a bad idea to disable the 
EPA, business people believe this. In the last 2 weeks I have 
had two business groups in the State of Washington come to me 
and tell me what climate change is doing to their business. The 
people grow oysters and clams, their industry, their industrial 
model is at risk today because of the ocean associated with 
carbon dioxide pollution. They want a solution to this problem. 
They are losing their industry in the west coast of the United 
States. This is a long time industry that is important in Puget 
Sound where I come from. This morning I had the berry growers 
from the northwest come to tell me and tell me that 50 percent 
of the actually it was grapes were essentially lost because of 
it is either a fungus or a bacteria associated with changes in 
climate they believe and they were asking me for help to solve 
this problem. If we don't deal with this problem we are going 
to lose jobs. This is a job creation engine like China gets and 
we don't and I hope we will wake up in the next 4 seconds and 
thank you, Mr. Reicher, thank you.
    Mr. Reicher. Thank you, Mr. Inslee.
    Mr. Whitfield. Thank you, Mr. Inslee.
    At this time, I will recognize Mr. Bilbray for 5 minutes.
    Mr. Bilbray. Thank you.
    Mr. McConnell, you made a reference to CARB and in fact I 
served 6 years on CARB. You made reference to the air resources 
board in California and I served 6 years there and 10 years on 
ARB district, two stints as chairman and I would like to remind 
you that it was California that told Washington in 1992 that 
the mandate that methanol was put in our fuel stream was not an 
environmental option. It was environmentally damaging. So 
Washington sometimes gets it wrong and we pointed out that 
people who claimed to be environmentalists in Washington aren't 
necessarily going to depend on in the long run and I think that 
experiment history is going to show is a major, major mistake 
and I wish the people that were so self-righteous then will now 
look around and say maybe we ought to try to get our science 
down first before we start making claims. And I think MTD and 
the methanol in the fuel line, you know, has been proven again 
and again that the so-called experts then in Washington, D.C. 
were behind this at CARB.
    But if I could propose to you, if the federal government 
could pass a law today that would improve your fuel mileage and 
reduce your emissions by 22.6 percent, what would be your 
industry's response to that?
    Mr. McConnell. Well, I don't represent the manufacturers.
    Mr. Bilbray. But as someone selling the product.
    Mr. McConnell. Well, I believe that California should have 
a voice just as but no more than any other State, provide data, 
political clout that they have but we feel like that we don't 
have a problem with reducing CO2 emissions. We do 
not.
    Mr. Bilbray. OK, let me interrupt you. Look, Mr. McConnell, 
if I could tell you again that I have a study that shows 22.6 
percent reduction in emissions and fuel mileage and it will not 
cost one cent to produce a car or no one more cent to produce a 
car. If I could show you that study, would you be willing to 
say maybe we ought to consider implementing these mandates if 
it doesn't cost one more cent to produce an automobile in this 
country?
    Mr. McConnell. I would be happy to do look at the study. 
What needs to happen though is CAFE is laid out.
    Mr. Bilbray. Let me go to CAFE. Let us go to CAFE, are you 
talking 100 percent of fossil fuel? Are you talking CAFE 
standards with 10 percent ethanol? Are you talking 10 percent 
algae fuel? What fuel mixture here because we have a lot of 
fuel mixtures here and that is one thing when we talk about 
CAFE that the renewable fuel mandate has actually reduced the 
ability for automobiles to get mileage, something that nobody 
wants to talk about in this town.
    But let me go over to you, Mr. Reicher. Mr. Reicher, if we 
could mandate 22.6 percent more fuel efficiency and emissions, 
wouldn't you say that is something that we should be looking at 
especially if we claim we are in a crisis?
    Mr. Reicher. Sounds like a smart way to proceed.
    Mr. Bilbray. The problem is what it does it is not a 
mandate on the private sector. It is a mandate on government. 
Traffic management, inappropriate traffic management, every 
time you stop at a four-way stop, you remember you are 
polluting five-times more than if you were allowed to roll 
through with a yield sign. This town is quick at pointing 
fingers at you and your industry but those of us in government 
will walk away from something that studies have shown could be 
major breakthroughs but because it is easier to be against the 
business community and not the other way. And as somebody who 
has worked on these issues for decades, I am frustrated with 
the people that come out of Washington claiming that they are 
going to save the world by turning corn into fuel or, you know, 
taking methanol and converting it over, and not looking at the 
longer impact. And I am sorry, I hear you attack CARB, the CARB 
that I see today coming out is a political extension. We have 
been, our science has been pretty darn good.
    One of the things our scientists want to talk about is, Mr. 
Reicher, the last I checked with the UN our--the Chinese 
economy is about one-tenth of our economy, right?
    Mr. Reicher. I don't know the specific statistics.
    Mr. Bilbray. OK, well let us just say this China is 
implementing 20 nuclear power plants. We are implementing two. 
Does that well, let me just say on that, I can give you that 
number and the executive secretary of the UN National Framework 
and Convention on Climate Change says he has not seen a 
credible scenario that does not have nuclear as a major part of 
their mixture. In fact, even the report by the 
Intergovernmental Panel on Climate Change states that a robust 
mix of energy sources including nuclear must be included. Now, 
do you believe that two out of an industry that is ten times as 
big as China is a robust commitment to implementing clean air 
strategies with nuclear power?
    Mr. Reicher. Mr. Bilbray, I came in and testified in my 
opening statement that we should adopt a clean energy standard 
that includes most of these technologies.
    Mr. Bilbray. Mr. Chairman, may I ask for 1 more minute on 
this item please just to follow-up?
    Mr. Whitfield. Without objection.
    Mr. Bilbray. Mr. Reicher, the State of California does not 
allow nuclear power today and my colleagues at the ARB are not 
allowed to implement a robust nuclear program while we are 
talking about the climate being in crisis. My concern is my 
colleagues in California claim they care about the environment 
and are willing to attack the private sector but are not 
willing to do things like force government to change the way it 
operates so we clean up our act. Your comment on that?
    Mr. Reicher. Mr. Bilbray, in that regard I would urge you 
to take a careful look at a national clean energy standard 
because it could deal with some of these inconsistencies that 
we have State to State over a whole range of technologies. That 
is one way to proceed if you are bothered by the 
inconsistencies State to State, take a look at what Mr. Barton 
supported in his amendments last year.
    Mr. Bilbray. Wouldn't you agree that it is one thing to 
give a loan guaranty? It is another thing not to allow it to be 
permitted, for government to outlaw it. In fact, let me say 
this as somebody who has worked on environmental regs, we talk 
about a Manhattan project for energy independence in this 
country. Ladies and gentlemen, the Manhattan Project would not 
be legal under existing law. You couldn't even site the test 
site because of Endangered Species Act. That is the kind of 
barrier that those of us in Washington who want to address this 
crisis have to be willing to stand up and address. Thank you, 
Mr. Chairman.
    Mr. Whitfield. I recognize the gentleman, Mr. Olson from 
Texas for 5 minutes.
    Mr. Olson. I thank the chair.
    Mr. Joyce, my first question is for you. First I want to 
thank you for being part of the economic engine that drives 
America, small business.
    Mr. Joyce. It is my pleasure.
    Mr. Olson. In your testimony you said that the 
environmental regulations have cost your family business 
upwards of $150,000. How many more people could you hire if you 
didn't have that excessive cost and more importantly, how many 
of your current jobs are at risk right now if greenhouse gas 
regulations become law?
    Mr. Joyce. We can hire two additional people if we weren't 
doing those as required of us to do but our bigger concern is 
the uncertainty and the misinformation surrounding what is 
going on with the EPA regulations currently. We are so 
concerned because right now they are starting big but we know 
that will back up and we understand the difficulty of 
permitting projects even at the State level so every time 
something makes a project difficult, it makes it harder to get 
it financed. It is very difficult to finance them now so we 
think more and more projects theoretically could be taken off 
the table. We have great concern about that but what our bigger 
concern is and my concern as a citizen is we are in an energy 
crisis and we need to look at every single option out there to 
create more energy. And, you know, again I said I hung my hat 
on green energy and we do a lot in that arena but it doesn't 
work without new coal plants, without new nuclear plants, 
without creating additional energy because we are still 
birthing babies, we are still graduating people from college, 
we are still building houses and we want to be a manufacturing 
factor. So I sit here and I think to myself where is the 
outrage? Where is the outrage and the Chinese are going to 
corner the energy market sooner or later and we are not taking 
steps to create power now and electricity is a key piece of it. 
And I want to see our Nation look at ways to get every option 
on the table now and that is our concern.
    Mr. Olson. Yes, sir, what we call up here the all-vote 
plan. Thank you for that answer, sir.
    Mr. Montgomery, a question for you, sir. EPA Administrator 
Jackson often touts the creation of jobs by implementing new 
green control technologies. You have been in this field for 
about 40 years. Will the mandate to comply with greenhouse gas 
regulations produce a net job growth here in the United States 
as Administrator Jackson claimed, yes or no?
    Mr. Montgomery. No.
    Mr. Olson. Do you want to elaborate on that?
    Mr. Montgomery. OK, it will certainly produce a shift. It 
will produce a shift or resources in industrial activity toward 
producing that pollution control equipment but it will be 
taking those resources away from producing other things that 
people demand and contribute to our standard of living. It is 
not to say it might not be worth it if you judge that the 
benefits are large enough but it is clearly going to be a cost. 
At best, it is going to involve moving people from one kind of 
job to another and not creating net new jobs but on top of that 
it is going to be a drag on productivity growth and investment 
which is going to slow the rate of growth in the economy 
overall. And this is something that has been seen by economists 
who have studied this going all the way back to work that 
Jorgenson and Wilcoxen did 20 years ago looking at the effect 
of the Clean Air Act amendments themselves. They found that 
yes, there were some industries that were doing quite well 
producing that pollution control equipment but the regulations 
were essentially a tax on capital investment so it slowed down 
capital investment. It reduced the growth in worker 
productivity because unlike the Luddites who do green job 
studies, they actually know from looking at history that the 
primary driver of productivity growth is increasing capital 
investments to make workers more productive. So all of those 
processes are slowed down by the higher costs that are imposed 
on the economy by the regulations so that overall there is a 
depressing effect on our rate of growth and internally there is 
some shuffling around of jobs from doing one thing to doing 
another.
    Mr. Olson. So no new green technologies, thank you for that 
answer and my final question is going to be for Mr. Carey. Mr. 
Carey, coal provides about 45 percent of our electric power. If 
the EPA regulations were to go forward as planned from what 
your testimony earlier today that is about 75 gigawatts that 
are at risk?
    Mr. Carey. Within that range, Congressman.
    Mr. Olson. How would we replace the capacity of the coal 
industry?
    Mr. Carey. That is the 64,000 not gigawatt question but 
$64,000 question, Congressman. There is no way.
    Mr. Olson. Any idea how many jobs it is going to cost us?
    Mr. Carey. Well, if we are looking at a 70 percent 
reduction in the amount of coal, it is a 70 percent reduction 
in the amount of coal jobs with a multiplier of 10. So we are 
in the hundreds of thousands.
    Mr. Olson. Thank you for that answer.
    Mr. Whitfield. Mr. McKinley of West Virginia, you are 
recognized for 5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman. It has been a long 
day and we have broken twice. It sounds a little bit like 
Groundhog Day. We are back here again for the third time to try 
to get through all of this. After being towards the end of this 
questioning it appears a lot of the questions have been asked 
but so I just want to kind of summarize where I am so when I go 
home tonight. It appears that there seems to be a consensus 
that energy costs are going to rise if we have the greenhouse 
gas regulated under the Clean Air Act. There is also a 
consensus that that will have a negative impact on industry, 
manufacturers. If they are negatively impacted, we are going to 
lose jobs. I got a letter and there were comments made that 
this is just a Republican thing but here's a letter from the 
American Iron and Steel Institute and it is a long letter so I 
am not going to go through it. I am going to ask that it be put 
into the record.
    Mr. Whitfield. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. McKinley. Thank you. And he goes on in his letter about 
the, just talks about the new regulations will create 
permitting obstacles in investing in new and renovated 
facilities, impose significant additional cost on domestic 
steel producers. The development of new environmental 
regulatory proposals across the country it is obvious will have 
a deleterious effect on them. But he goes on to say the 
unprecedented speed of the EPA's effort to regulate the 
greenhouse gases under the Clean Air Act threatens serious 
economic disruption. The greenhouse gas emissions under the 
Clean Air Act will create disincentives to invest, potential 
for new project construction delay and increased litigation 
risks. He goes on to say for the Institute that it is not 
partisan. This is business. This is what it is all about here. 
We have 15 million Americans out of work today and we are 
letting the EPA continue to cause this kind of challenge. And 
he goes on to say it will raise operating costs which will 
place our American steel manufacturers at a competitive 
disadvantage while allowing overseas competitors to continue to 
increase their missions. The result would be limited 
environmental gain but significant economic challenges 
including further elimination of valuable American 
manufacturing jobs especially for energy-intensive, trade-
sensitive industries.
    I don't understand. I have only been here in Congress for 
not even 60 days and I don't understand why they don't get it. 
To me it is axiomatic. This is fundamental economics 101. Why 
is it that they don't get it around here? Am I the one out of 
step, Mr. Cicio?
    Mr. Cicio. I have very diverse energy-intensive 
manufacturers including some integrated steel companies plus 
recycle steel companies and I can, there are lots and lots of 
stories of truthful events where these steel companies have had 
to shut facilities down because of a tenth of a cent increase 
in the price of electricity. There are chemical companies that 
compete on a global scale with companies halfway around the 
world where they compete for a tenth of a cent per pound of a 
product. We are gripped and this is what I said in my 
testimony, our country and the manufacturing sector are gripped 
in competition and many times our competition are governments 
wrapped around companies but they are governments and they are 
subsidized.
    Mr. McKinley. But my question, why don't they get it? Why 
doesn't when we have so many people out of work, we are 
threatening possibly one more time another round of employment 
losses at a time when we need our energy, coal, nuclear, all 
and we are threatening ourselves. Yes, sir?
    Mr. Montgomery. This is my personal opinion and but it is 
this I think is a very good example of how Congress is not 
working well and it is a very good example of how hard it is to 
take on a big issue. I would say that the first lesson in 
environmental economics is you have to compare the cost of a 
regulation to the benefits that you get. Well, when the costs 
of a regulation are large and the benefits are in the future, 
it is very hard to convince your constituents that that is a 
good thing to work for so the analysis instead of being an 
objective description of what is likely to happen turns into a 
claim this isn't a hard decision after all. There aren't any 
costs because they go away and I am afraid that that is how I 
see the debate being destroyed here.
    Mr. McKinley. Thank you.
    Mr. Whitfield. Mr. Scalise, you are recognized for 5 
minutes.
    Mr. Scalise. Thank you, Mr. Chairman.
    The theme of today's hearing is the greenhouse gas 
emissions and specifically the impact of these regulations on 
American jobs and I think when we talk about American jobs we 
had a hearing a few weeks ago. It has been referenced a few 
times with EPA Administrator Jackson and then we had a panel 
right after Administrator Jackson spoke and it was a panel of 
business people, employers in this country and it was like 
there was parallel universe. You had the head of EPA talking 
about how the regulations that she is implementing are creating 
jobs and then you literally had employer after employer after 
employer talking about those very EPA regulations and the 
uncertainty associated with it are costing American jobs. And 
so maybe what the EPA Administrator Jackson is referring to 
were the jobs she is creating in China, in India, in other 
countries because when you talk to employer, they are actually 
looking at real job losses. There was a company, a major steel 
manufacturer that talked specifically about the burdensome 
permitting requirements and rising energy costs, increasingly 
industrial projects are no longer even being considered for 
development in the United States. It doesn't mean they are not 
being considered. They are just not being considered in the 
United States. They further went on to talk specifically about 
one of their projects, ``Due to 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 ones.'' This was one 
company and we have heard this story over and over and over 
again, jobs that are leaving our country.
    And I want to ask Mr. Reicher, you know, we have heard 
testimony in the past over this issue about carbon leakage and 
the fact that let us say you are not building a steel mill here 
in the United States. You are going to build it in Brazil which 
is a viable option when people are looking at where they are 
going to build it. So if they build it in Brazil you actually 
have maybe four times the amount of carbon and greenhouse gases 
emitted than if you would have built that plant today under 
current environmental regulations in the United States, not to 
mention the job loss. So first, do you recognize one, there is 
real job loss going on out there in America? And number two, 
that because of these regulations by EPA you are actually 
emitting more carbon because they are building these plants in 
other countries that actually have lower standards than us?
    Mr. Reicher. Well, Mr. Scalise, responding to you and Mr. 
McKinley, I think this issue of why ``they don't get it'' is 
first, I think there are serious issues here with human health 
and the environment and it can flow from these greenhouse gas 
emissions. Secondly, there are in fact serious economic issues. 
We are losing vast investment in this country.
    Mr. Scalise. Because of these regulations and the 
uncertainty.
    Mr. Reicher. To countries where they have in fact decided 
to control the emissions of greenhouse gases and other 
pollutants, to the EU, increasingly to China, to places where 
they are taking these issues seriously.
    Mr. Scalise. Well, what you are saying they are taking them 
seriously. They actually emit more greenhouse gases to do some 
of these manufacturing jobs in those countries like China. Do 
you recognize that?
    Mr. Reicher. Fair question so all the more reason why we 
have got to step up to it and the rest of the world does as 
well. That is why we have international green age. That is why 
we go and negotiate these.
    Mr. Scalise. But do you recognize that the uncertainty 
though of what is going on in this country is costing American 
jobs? Will you at least acknowledge all of these, business 
after business?
    Mr. Reicher. Certainly, the uncertainty on Wall Street are 
moving their money away from this country to countries where in 
fact they are putting controls on greenhouse gas emissions.
    Mr. Scalise. Well, Wall Street has done enough damage to 
our economy already.
    Let me ask Mr. Montgomery something because I am on limited 
time and I apologize but, Mr. Montgomery, I am not sure if you 
read there was a study about Spain's experiment with this 
scheme of cap and trade, greenhouse gas emission regulation 
where they said they are going to create all these green jobs. 
What they found out later is for every green job they created 
they lost 2.2 jobs but then when they dug deeper into that 90 
percent of those jobs they created were part-time jobs. So in 
essence for every green job they created they lost 22 full-time 
jobs in their economy. I am not sure if you are familiar with 
that Spain study or if you want to comment on that?
    Mr. Montgomery. Yes, there have been some criticisms of the 
study but I think it has made some very good points. One of 
them is just how phony the accounting for green jobs can be 
depending on what you are counting. The second one is that yes, 
the cost of the mandate or a subsidy is borne by the country 
that does it and Spain decided to put on huge subsidies and 
that both decreased their own competitiveness across the board 
and it attracted a lot of equipment to be built elsewhere.
    Mr. Scalise. Like we are seeing here.
    And I only have got a few seconds left and I want to ask 
Mr. Joyce something because you talked about in your opening 
testimony and then I don't know if this was on behalf of NFIB 
or just your small business but you referred to a recent study 
by the U.S. Small Business Administration that found that the 
total cost of regulation on the American economy is $1.75 
trillion per year and then further that the study reaffirmed 
that small businesses actually bear a much larger percentage. I 
think what, over 30 percent more of the cost than large 
businesses so the uncertainty in these regulations are killing 
small businesses primarily which is the real heart of our job 
creation in this country. I want to ask you to comment further 
on that.
    Mr. Joyce. Yes, absolutely because they are smaller, you 
know, smaller network of sales to diversify the cost of 
implementing whatever the regulation is so little businesses 
are widely more impacted with these regulations than big ones 
who have got, you know, staffs that run it and they just blend 
it in there and it goes away. This hits the little businesses 
very, very significantly.
    Mr. Scalise. Thank you, Mr. Chairman, I yield back.
    Mr. Whitfield. I thank you and I want to thank the 
witnesses very much. We appreciate your testimony and I know 
you didn't plan to spend this much time with us but we hope 
maybe you will come back someday and this panel is dismissed.
    Mr. Bilbray. Mr. Chairman.
    Mr. Whitfield. Yes.
    Mr. Bilbray. I want to thank you for having this hearing 
and let me just point out.
    Mr. Whitfield. We are not through.
    Mr. Bilbray. I know I just before they leave though I think 
it is great to point out for 4 years there was an effort to 
green the Capitol and try to reduce our footprint here but in 4 
years Congress is still burning coal to fire up the lamps over 
our head and I think that if that is any indication of the 
progress we have made it is just good luck.
    Mr. Whitfield. Well, of course I like coal myself but we 
will call at this time on the second panel. we have Ms. Gina 
McCarthy who is the assistant administrator for the Office of 
Air and Radiation at the U.S. Environmental Protection Agency 
and, Ms. McCarthy, we appreciate you being us today. I trust 
that you have enjoyed yourself as much we have already and I 
will tell you we have adopted a new policy and we are supposed 
to start hearings at nine o'clock or 9:30 and we have no votes 
so that we can go straight through before anyone has to leave. 
So unfortunately it didn't work out that way today but we do 
appreciate your patience and your being with us very much.
    Ms. McCarthy. Thank you, Mr. Chairman, it is nice to be 
here.
    Mr. Whitfield. And with that, we will go on and recognize 
you for your 5 minute opening statement, Ms. McCarthy.

STATEMENT OF GINA A. MCCARTHY, ASSISTANT ADMINISTRATOR, OFFICE 
 OF AIR AND RADIATION, UNITED STATES ENVIRONMENTAL PROTECTION 
                             AGENCY

    Ms. McCarthy. Thank you very much and again I want to thank 
the chairman and the ranking member, Rush, for inviting me here 
and the members of the committee to testify on this important 
subject.
    Let me get started. I know you have listened to a lot of 
testimony so I will be as crisp as I can and then we can get to 
questions and answers.
    But EPA is just starting to update existing Clean Air Act 
programs in order to address greenhouse gas emissions. The 
Clean Air Act tools that we have been using are exactly the 
same Clean Air Act tools that have been responsible for 
achieving dramatically cleaner air and important public health 
benefits at reasonable cost. With its 40 year history of 
success the Clean Air Act continues to be one of this country's 
greatest bipartisan achievements. Today EPA is releasing a peer 
review study of the cost and benefits of the Clean Air Act 
since 1990. It demonstrates both the Clean Air Act's tremendous 
public health benefits and well how cleaner air strengthens the 
economy. In the last year alone, programs implemented pursuant 
to the Clean Air Act amendments of 1990, are estimated to have 
reduced premature mortality risks equivalent to saving over 
160,000 lives, to have spared Americans more than 100,000 
hospital visits, prevented millions of cases of respiratory 
problems like asthma, to have enhanced productivity by 
preventing 13 million lost workdays, and have kids healthy and 
in school avoiding 3.2 million lost school days due to 
respiratory illnesses and other diseases that are either caused 
or exacerbated by air pollution.
    EPA can't monetize all the benefits from recent Clean Air 
Act regulations but to the extent that we can this study tells 
us that the Clean Air Act provides $2 trillion in benefits in 
2020 alone. That is over $30 in benefits for every single 
dollar that we spend. This is a tremendous value for the 
American people. Most of the rules that gave us these huge 
gains in public health were adopted amidst claims similar to 
what we are hearing today, claims that they would be bad for 
the economy and bad for employment. Some claim that the Clean 
Air Act amendments of 1990 themselves would cost at least 
200,000 or up to even 2 million jobs. In contrast to all of 
those dire predictions, history has shown again and again that 
we can clean up pollution. We can create jobs and we can grow 
our economy all at the same time.
    Since 1970, air pollution has actually declined 63 percent 
while at the same time the economy has grown 204 percent. 
Discussions of job impacts often overlook the jobs that come 
from building and installing pollution control equipment. The 
Institute for Clean Air Companies estimated that over the past 
7 years the implementation of just one rule, the Clean Air Act 
interstate rule resulted in 200,000 jobs in the air pollution 
control industry. In a recent Wall Street Journal op-ed, eight 
major utilities that will be affected by our greenhouse gas 
regulation said that, ``Contrary to claims that EPA's agenda 
will have negative economic consequences, our companies 
experience complying with air quality regulations demonstrates 
that they can yield important economic benefits including job 
creation while maintaining the liability.''
    The Clean Air Act has also helped spark world-class 
innovations in the United States. For example, EPA vehicle 
emissions standards led to the development and application of a 
huge range of technologies like catalytic converters, onboard 
computers, fuel-injection systems, even unleaded gasoline. 
These innovations are now found throughout the global 
automotive market. In the vehicle emission control industry now 
employs approximately 65,000 Americans with domestic annual 
sales of $26 million.
    The environmental technology and services industry employed 
1.7 million workers in 2008, and that taps into the global 
market that is worth over $700 billion, and that is a market 
the size of the aerospace or the pharmaceutical industry. 
Globally, America can compete and lead in, I am sorry, can 
compete and lead in the environmental and clean energy sectors 
but only if we take steps at home to continue to innovate. As 
we drive towards cleaner air and clean energy we need to 
challenge innovation and challenge technology excellence.
    We are now starting to achieve greenhouse gas, address 
greenhouse gases by applying Clean Air Act regulatory tools 
that have been used successfully now for 4 decades. EPA is 
compelled to do so by the Clean Air Act, the Supreme Court's 
decision, as well as sound science. These greenhouse gas tools 
that we are going to use require the agency always to take cost 
into consideration and they will allow the agency to move 
forward using commonsense, reasonable, measured requirements.
    The first greenhouse gas rule EPA issued is already 
demonstrating how practical regulations can make sense for the 
economy. Last April, EPA and the Department of Transportation 
completed harmonized national standards to reduce greenhouse 
gas pollution from new cars and trucks. The vehicles sold in 
model years 2012 to 2016 will save 1.85 billion barrels of oil 
while reducing greenhouse gas emissions by 962 million tons. 
The rules were supported by both the auto workers as well as 
the auto manufacturers who recognize that these standards help 
them stay competitive in a global marketplace where fuel 
efficiency increasingly matters. We will also save consumers 
money. A 2016 model year vehicle will save you $3,000 over the 
life of that vehicle.
    The regulatory focus on improved efficiency isn't unique 
just to motor vehicles. EPA is also focusing on energy 
efficiency as the preferred method of meeting greenhouse gas 
permit requirements for power plants and large industrial 
facilities. And let us all be clear, these new greenhouse gas 
permit requirements apply only when a facility is being a new 
facility is being built or when a company is making major 
modifications at an existing facility. The universe for these 
greenhouse gas permits are large greenhouse gas emitters but 
the universe is very small and it is manageable to achieve.
    Leadership in new technologies combined with healthier 
workers and fewer air-related health effects have laid the 
foundation for robust, long-term economic growth and the 
employment that comes along with it. We shouldn't pass up the 
opportunity to use the Clean Air Act to promote efficiency, 
energy security, to protect public health because of the same 
inaccurate claims about job losses that have been leveled 
against major actions under the Clean Air Act for 4 decades 
now. Thank you very much.
    [The prepared statement of Ms. McCarthy follows:]

    [GRAPHIC] [TIFF OMITTED] T6512.077
    
    [GRAPHIC] [TIFF OMITTED] T6512.078
    
    [GRAPHIC] [TIFF OMITTED] T6512.079
    
    [GRAPHIC] [TIFF OMITTED] T6512.080
    
    [GRAPHIC] [TIFF OMITTED] T6512.081
    
    Mr. Whitfield. Thank you, Ms. McCarthy. I was reading an 
article recently of Duke University, the Nicholas Institute of 
Environmental Policy Solutions and in there they quoted you and 
you had said that if you apply the 100 09250 tons per year 
limit for greenhouse gases that it would require six million 
sources to obtain Title 5 permits and lead to 82,000 permitting 
actions under PSD resulting in an estimated combined cost of 
$22.5 billion to the permitting authorities alone. Now, I know 
you have the tailoring rule but without referring to the 
administrative necessity doctrine or the absurd results 
doctrine, doesn't your tailoring act explicitly violate the 
terms of the Clean Air Act as to the limits?
    Ms. McCarthy. Mr. Chairman, I would tell you that your 
quote is correct. That is the reason why the administration 
puts together the tailoring rule and we believe that it is not 
only a legally sound approach to making sure that we.
    Mr. Whitfield. But without reference to the administrative 
necessity or absurd result it does violate the precise wording 
of the Clean Air Act?
    Ms. McCarthy. I am trying to explain to you that we believe 
that that is the best interpretation of Congress' intent when 
it is a new pollutant.
    Mr. Whitfield. But you do recognize it does violate the 
explicit terms of the Clean Air Act?
    Ms. McCarthy. I do not believe that it violates the Clean 
Air Act.
    Mr. Whitfield. Well, your limits are above the 100 to 250 
tons per year.
    Ms. McCarthy. They certainly are and we approach it in a 
very measured way to make sure that we don't.
    Mr. Whitfield. Thank you. Now, let me make ask you did your 
agency conduct a comprehensive economic or job analysis of the 
impact of the greenhouse gas regulations?
    Ms. McCarthy. I am sorry. Could you say that again, Mr. 
Chairman?
    Mr. Whitfield. Did your agency conduct an analysis of the 
impact of the greenhouse gas rules on jobs and the economy?
    Ms. McCarthy. Yes, the greenhouse gas rules certainly we 
did with the light duty vehicle rule we have talked about that 
a little bit.
    Mr. Whitfield. But on stationary sources.
    Ms. McCarthy. On stationary sources the way in which the 
Clean Air Act works is that we are not setting a standard for 
permitting. Those permitting decisions are rightly.
    Mr. Whitfield. So is your answer no?
    Ms. McCarthy. My answer is that States do that in the 
course of doing the best available control technology 
permitting process.
    Mr. Whitfield. But the EPA, you do not do that then?
    Ms. McCarthy. Well, we do not know businesses' intent.
    Mr. Whitfield. Do you all do any sort of analysis on how 
you are going to replace lost electricity generating capacity 
from any of the regulations?''
    Ms. McCarthy. I do not anticipate the greenhouse gases will 
result the greenhouse gas regulations will result in any lost 
electricity generation?
    Mr. Whitfield. So you don't think the regulations will 
cause the loss of any capacity?
    Ms. McCarthy. In terms of electric generating, no, I do 
not.
    Mr. Whitfield. OK, that bell wasn't my time but I am going 
to at this point recognize Mr. Rush for 5 minutes.
    Mr. Rush. Thank you, Mr. Chairman.
    Ms. McCarthy, I really want to apologize first of all that 
you had to wait this long and most of the members have gone and 
we have suspended the activities on our floor and the media for 
the most part has left during your testimony so I apologize for 
that but necessarily we have to do what we have to do here.
    Let me just ask you while today's hearing focused on the 
jobs impacted by greenhouse gas regulations under the Clean Air 
Act and there is no question that this Congress must focus on 
job creation. Unemployment rates are exceptionally high and 
joblessness is taking its terrible toll on our Nation and in 
your professional opinion what would be some of the 
consequences particularly economically but also environmentally 
and in the area of public health if Congress did enact such a 
bill as the Upton-Inhofe bill where the EPA ability to regulate 
greenhouse gases would be repealed without any type of 
legislative alternative that has been presented to us, can you?
    Ms. McCarthy. Yes, I can speak to that and I appreciate the 
question. We are very concerned with the bill in terms of what 
it might do for our ability to make sure that businesses that 
want to actually be constructed or businesses that want to 
modify being able to make sure that those Clean Air Act permits 
are available to them. So we are very concerned that we protect 
the interests of the Clean Air Act, that we protect our ability 
to issue permits when permits should be required and deserved 
and that we move forward with the Clean Air Act as it was 
intended. Carbon pollution is a pollutant. It is a pollutant 
under the Act. It is a danger to public health and welfare. We 
believe we can take measured approaches to controlling that 
pollutant into making sure that as new facilities are 
constructed and major modifications are done that we minimize 
the kind of greenhouse gas emissions that are additionally 
emitted into the atmosphere.
    Mr. Rush. The idea that the Clean Air Act requirements can 
control carbon pollution have anything to do with unemployment 
problems to me is a sheer fantasy. We are suffering a worldwide 
global recession. Normally, the regulations don't cause 
anything. On the contrary they actually will benefit 
regulations caused the financial meltdown. All right, you 
testified that EPA recently prepared a white paper highlighting 
information which are the Clean Air Act and jobs and the 
economic in the United States. Are the findings highlighted in 
that paper based on peer review literature?
    Ms. McCarthy. Yes, they are.
    Mr. Rush. And what did these peer review studies findings 
actually take on Clean Air Act regulations on jobs and the 
economy?
    Ms. McCarthy. Well, what it found and it is rather 
remarkable is that when the economists looked at some of the 
most heavily regulated industry they did not find evidence that 
regulation leads to larger job losses. For example, there was 
an article by Morgan Stern that looked at four of the most 
heavily regulated industries and it found that increased 
environmental spending does not cause a significant change in 
employment in those regulated industries. On average there was 
a gain of 1.5 jobs for every $1 million in additional 
environmental spending. Now, that doesn't mean that the Clean 
Air Act is a jobs act. It is clearly a public health act but 
the most remarkable thing is that for every dollar that you 
spend in order to clean up the air under the Clean Air Act, you 
get $30 in health benefits so it is a significantly effective 
public health measure. But the great thing is that it does have 
ancillary benefits of job growth and there is no evidence that 
it is a factor in significant job losses in the economy, in 
fact just the opposite.
    Mr. Rush. Can you give us some examples of the types of 
jobs created when we clean up the environment?
    Ms. McCarthy. Sure, someone when they have to design and 
build and run and maintain pollution control equipment, those 
some ones are jobs. For example, installing a scrubber on a 
power plant can create up to a thousand construction jobs and a 
hundred permanent jobs. In addition, scrubbers require steel. 
That creates jobs as well. There was a study by the U.S. 
boilermakers that looked at jobs between '99 and 2001 and it 
found that their jobs grew by 35 percent that is 6,700 jobs. So 
what we find now is there is a thriving environmental 
protection industry. In 2008, that was $300 billion in revenues 
were generated from that industry sector, 1.7 million jobs, 
American jobs in that sector and they were exporting $44 
billion worth of equipment and technology. We think that is 
rather a good success story.
    Mr. Barton. [Presiding] The gentleman's time has expired.
    The chair now recognizes himself for 5 minutes.
    Welcome, Assistant Administrator. Just for the record, are 
you a presidential appointee or a civil servant?
    Ms. McCarthy. I am a presidential appointee.
    Mr. Barton. OK and how long have you held the position?
    Ms. McCarthy. Since June of 2009.
    Mr. Barton. Thank you and what was your prior position 
within the Administration, if any?
    Ms. McCarthy. It was not. I did not work for the 
Administration. I worked for the Connecticut Department of 
Environmental Protection. I was the commissioner of that 
agency.
    Mr. Barton. OK, thank you very much. Your opening in your 
statement in your testimony, prepared testimony talks about all 
the things that are the benefit of the Clean Air Act. It may 
surprise you but I was a supporter and voted for the Clean Air 
Act back in 1990. I mean it was bipartisan. I would say that 
the attempt to tie greenhouse gas regulation to the Clean Air 
Act is a stretch because in my opinion I don't believe that 
CO2 is a pollutant under the definition of the Clean 
Air Act nor do I believe that it is a health hazard. Do you 
have any statistics that indicate CO2 has caused any 
kind of a poisoning that requires emergency room assistance or 
anything like that?
    Ms. McCarthy. CO2 is not a toxic pollutant.
    Mr. Barton. So in terms of when you are talking in your 
testimony about the benefits of the Clean Air Act you talked 
about premature mortality savings and things like that, those 
types of criteria would not apply to CO2.
    Ms. McCarthy. No, Mr. Barton, that is where I would differ. 
I would tell you that CO2 is very much a pollutant 
that impacts public health and welfare. I would tell you that 
CO2 actually does contribute to ozone pollution 
which is a significant health hazard and I would tell you that 
the Supreme Court that really interprets Congress' intent for 
the rest of us told us that we had to consider greenhouse gas 
as a pollutant.
    Mr. Barton. Well, actually the Supreme Court said that the 
EPA had to make a decision whether it should be regulated.
    Ms. McCarthy. That is correct, consider it.
    Mr. Barton. OK, do you know what the level of 
CO2 right now generally speaking is in the 
atmosphere?
    Ms. McCarthy. Actually, I don't have that figure.
    Mr. Barton. If I was to say it was around 380 parts per 
million would you accept that in the ballpark?
    Ms. McCarthy. That is probably right.
    Mr. Barton. OK, do you know what a greenhouse that grows 
plants and food within a greenhouse, do you know what the 
average CO2 parts per million is in a greenhouse?
    Ms. McCarthy. I am sure you will tell me.
    Mr. Barton. You don't have any idea?
    Ms. McCarthy. No.
    Mr. Barton. So if I say it is around a thousand which is 
what it is you won't dispute that?
    Ms. McCarthy. No.
    Mr. Barton. Do you know what you create in CO2 
when you answer my questions? Do you know what the amount of 
CO2 coming out when you answer a question is? We 
have about 380 parts per million in the atmosphere. Commercial 
greenhouse gases exist in about a thousand parts per million 
and when you answer a question or when I ask you a question, I 
expel CO2 at the rate of about 40,000 parts per 
billion. So how in the world can that be a pollutant? If it is, 
my good friend Bobby Rush would be gasping for breath right now 
and turning red in the face and my good friend, Mr. Waxman, I 
mean the fact is under any definition greenhouse gas if 
CO2 is one are necessary for life.
    Ms. McCarthy. No one is disputing that.
    Mr. Barton. So I know you are here to be the good soldier 
and I know there is a massive world debate about the greenhouse 
gases but when we try to apply the Clean Air Act which I voted 
for and which a majority of the Republicans on this committee, 
in fact I think all but one or two voted for that were on the 
committee, it just doesn't work. It just the definitional terms 
are different so we have a difference of opinion on our side in 
terms of whether this is a necessary thing. Why do you need the 
tailoring rule to implement greenhouse gas regulations?
    Ms. McCarthy. Greenhouse gas is as you know a new pollutant 
under the Clean Air Act. We took a look to ensure that the 
application of the Clean Air Act to the greenhouse gas 
pollutants was done in a reasoned, commonsense way. We wanted 
to make sure that we phased in the greenhouse gas regulations 
in a way that made sense, in a way that was manageable, in a 
way that would meet the intent of Congress. When we looked at 
that we decided and the Administrator clearly made a 
determination that their were many small sources that could 
potentially be regulated like greenhouse gases, she made a 
determination that that didn't make sense under the law and so 
we issued the tailoring rule so that we got at the vast 
majority of greenhouse gases by regulating a minimum of the 
largest sources first.
    Mr. Barton. My time has expired. Before I recognize the 
next witness or I mean the next questioner, would you submit 
for the record the EPA's official position on the control 
technology if any that is best able right now to actually 
regulate greenhouse gases, if there is such a technology?
    Ms. McCarthy. There are many technologies for greenhouse 
gases.
    Mr. Barton. Would you submit for the record those 
technologies and their cost effectiveness if you have that 
information?
    Ms. McCarthy. I could certainly provide you a range of 
technology choices that we have put out in white papers to help 
guide a decision that are efficient technologies that help 
advance reductions in greenhouse gases.
    Mr. Barton. Thank you.
    The chair inquires of the Minority Mr. Markey was the one 
here closest but Mr. Waxman is the ranking member. Who should? 
OK, the chair would recognize Mr. Waxman for 5 minutes.
    Mr. Waxman. Thank you very much.
    Ms. McCarthy, we have heard a lot today about the 
greenhouse gas regulations that went into effect in January and 
we have heard from witnesses today that these regulations will 
be ``nearly impossible to meet.'' Yet this committee has also 
received testimony from industry that EPA's approach has been 
``reasonable and does not impose undo hardship.'' I would like 
to ask you some questions to help me understand exactly what is 
required under these new regulations for stationary sources. 
First, can you confirm that only new sources or existing 
sources that expand and significantly increase emissions are 
currently subject to any requirements?
    Ms. McCarthy. That is correct.
    Mr. Waxman. Thank you. So for example, if I own a power 
plant that is already up and running and I don't make any 
changes I don't have to do anything differently, do I?
    Ms. McCarthy. No.
    Ms. Waxman. But new facilities will have to go through a 
technology review process to determine best available control 
technology or BACT to limit carbon pollution at the facility. 
In most of the country this review is carried out by State or 
local permitting agencies not by EPA itself. Are you aware that 
the National Association of Clean Air Agencies has surveyed its 
members and most States reported that they only expect to do 
zero, one or two permits this year?
    Ms. McCarthy. Yes.
    Mr. Waxman. Members of the National Association of Clean 
Air Agencies recently briefed House staff on some of the permit 
reviews they have already begun. In the examples they share 
they concluded that energy efficiency would likely be all that 
was needed. I would like to use an example that New York State 
shared in order to ask if this is consistent with EPA's 
guidance. In New York, a Lafarge cement plant volunteered to go 
through the process. The State began by identifying all 
available technologies that might limit carbon pollution. This 
initial list included carbon capture and sequestration but did 
not include switching to a different type of fuel. Is this 
consistent with EPA's guidance?
    Ms. McCarthy. Entirely, yes.
    Mr. Waxman. The State then quickly eliminated CCS as 
technically infeasible. The State indicated that because no 
geologic formation existed close to the cement plant, CCS would 
not be feasible. Is this consistent with the guidance?
    Ms. McCarthy. Yes.
    Mr. Waxman. The State then ranked the various options for 
limiting emissions and eliminated options that were too 
expensive. Finally, the State selected the technologies that it 
thought would be required. The State determined that the cement 
plant could reduce its carbon pollution by 12 percent by 
installing several types of energy efficiency equipment 
including high-efficiency motors, fans and burners. These 
efficiency features would constitute BACT. Is this the type of 
determination appropriate under EPA's guidance?
    Ms. McCarthy. Yes.
    Mr. Waxman. It sounds to me like this was a logical, 
reasonable process and I understand that Lefarge Cement expects 
that these efficiency improvements will reduce their operating 
costs and save them money. Is it fair to assume that many other 
facilities may actually save money too?
    Ms. McCarthy. Yes.
    Mr. Waxman. I hope the other States will follow this 
commonsense example and find ways to reduce pollution and 
improve efficiency. I have some time remaining if any of my 
colleagues wish me to yield to them, otherwise I will yield 
back my time. Mr. Green.
    Mr. Green. I thank my friend.
    Ms. McCarthy, yesterday my good friend in the Senate who 
served on this committee, Sherrod Brown from Ohio called on 
President Obama to direct EPA to implement a plan to provide 
financial and technical transition assistance protecting U.S. 
manufacturing as we move forward with the greenhouse gas 
regulations. Last Congress when this chamber considered cap and 
trade I was equally concerned about the issue and working hard. 
Can you comment on what the Administration is doing to address 
these concerns moving forward with these regulations?
    Ms. McCarthy. Yes, I would be happy to. We have taken great 
pains as we begin to regulate greenhouse gases to work with the 
States and work with the permitting entities. We have provided 
a wealth of technical assistance. We have produced guidance 
documents that help walk them through this process. We have put 
white papers out that explain the cost effective technologies 
available in all of the major industry sectors that could be 
potentially regulated. We are also having listening sessions 
before we move forward with additional regulation to make sure 
that we understand the needs of the company and that we can 
effectively reduce greenhouse gases in ways that are cost 
effective. Every rule that we have available to us under the 
Clean Air Act that is suitable for greenhouse gas regulations 
requires us to look at cost so we will go out of our way to 
make sure that we use not just a commonsense approach but one 
that reduces cost to the fullest extent we can and still 
achieve the required reductions under the Clean Air Act.
    Mr. Green. I know that time has expired and I have a 
question I would like to submit about how good natural gas is 
to replace the problem we have with carbon, Mr. Chairman.
    Mr. Barton. Well, certainly without objection I will 
support that.
    Mr. Green. OK, thank you, thank you.
    Mr. Barton. The gentleman's time has expired.
    The gentleman from Texas, Dr. Burgess is recognized for 5 
minutes.
    Mr. Burgess. Thank you, Mr. Chairman.
    Ms. McCarthy, thank you for being here. In Phoenix in fact 
just about a month ago at the Fourteenth Annual Energy Utility 
and Environmental Conference in Phoenix, it says that you were 
involved or advocating a not just a tweaking of current energy 
use but a fundamental overhaul of the Nation's production use 
of energy. EPA is ready, willing and able to drive this 
overhaul, you emphasized in a quote here, ``We must transform 
the power sector in a way that meets the needs of the 21st 
century.'' You repeatedly use the word transform to describe 
EPA's goal for the Nation's energy use so I guess a question 
that would come up where in the statute does the EPA get the 
authority to transform the power sector?
    Ms. McCarthy. That was, if I may, just to give you the 
background for the conference. That was a conference of 
technology developers. What we were referring to was the range 
of Clean Air Act actions that are impacting the utility sector 
and we were talking about the fleet that is out there in the 
utility sector and the extreme inefficiency of many of the 
units that out there. In the Clean Air Act implications of 
having those facilities install current technology, technology 
that is available currently and has been available for 30 years 
that can actually clean them up and move towards a cleaner 
fleet.
    Mr. Burgess. But fundamentally it is the job of the 
legislative branch to come to those conclusions in conjunction 
with the development of a national energy policy so 
transformation of the power sector of America really should be 
a legislative initiative, not an Administrative initiative or 
an Executive Branch initiative.
    Ms. McCarthy. I am not sure if that was a direct quote but 
what I was there to talk about was our opportunity, our 
opportunity to achieve significant public health protection for 
American families by looking at how we could provide certainty 
in the regulated community so investments would flow to 
utilities. Those that are inefficient would be able to upgrade. 
Those that are inefficient would know what their regulatory 
obligation was.
    Mr. Burgess. Let me just ask a question before the time 
expires. In a transformed power sector, how much coal would we 
be able to use in a transformed power sector? Do you have a 
figure in mind for that? Is it along the same lines that Gene 
Green just asked the question about natural gas? How much coal? 
How much natural gas? How much nuclear?
    Ms. McCarthy. No, we EPA is rightly not in the business of 
choosing fuels. We are in the business of regulating pollutants 
and what we have done with the greenhouse gas rules is we have 
made sure that if you are building a coal facility, you should 
be as clean as a coal facility can get. We have not suggested 
that a different fuel needs to be used. Again, we are trying to 
provide certainty for businesses as they need to be permitted 
that are coming in new and making major modifications.
    Mr. Burgess. Well, speaking in terms of certainty, you were 
here a year ago or just right after the deep water horizon 
started causing problems and the subject that day was a 
briefing. It wasn't a hearing so there is no record of it 
unfortunately but the subject was on the Environmental 
Protection Agency going to a new standard of 15 percent ethanol 
in motor fuels and gasoline.
    Ms. McCarthy. Yes.
    Mr. Burgess. And I don't know if you recall or not but I 
asked you and the Department of Energy who was there with you 
that day about where were the studies that we could look at 
that shows that this indeed was a reasonable thing to do and 
that in fact people who had snow blowers and two-cycle engines 
would not have damage to their equipment by a 15 percent 
ethanol mixture. Do you recall that briefing that we had?
    Ms. McCarthy. I do.
    Mr. Burgess. And you know, I never got any information from 
either EPA or the Department of Energy about the testing that 
was done or supposedly done. In fact, it almost seemed to be 
finger pointing one agency pointing at the other saying well 
the other guy is responsible for this but as we come up with 
this mandate that was described in Congress in December, 2007, 
the amount of ethanol that has to be offloaded into the 
Nation's fuel supply is I believe what was driving the, no pun 
intended, what was driving the concerns to bump the amount up 
to 15 percent. Is that correct?
    Ms. McCarthy. Not on the part of EPA. EPA was responding to 
waiver requests.
    Mr. Burgess. But where are we?
    Mr. Barton. The gentleman's time just expired.
    Mr. Burgess. Do we have those studies available?
    Ms. McCarthy. We do and I apologize if we weren't as 
responsive as we should be. We will send you the waiver 
decisions that were made and incorporate all of the scientific 
information in them.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Barton. OK, the gentleman from Massachusetts, Mr. 
Markey for 5 minutes.
    Mr. Markey. Thank you, Mr. Chairman, very much.
    Gasoline prices went up almost 20 cents in the last week, 
the biggest weekly jump in prices since Hurricane Katrina. In 
1975, we imported six million barrels of oil per day. Today 
that number is nearly 12 million barrels per day. Prices have 
risen by a factor of 13 since 1975. Foreign oil purchases 
account for roughly one-half of the United States' trade 
deficit, just to input that oil largely from OPEC. Oil money 
supports Iran's nuclear program, roadside bombs in Iraq, 
rockets for Hezbollah and Hamas, and hate filled Wahhabi 
teachings in Saudi Arabia. Now, the Republicans are busy 
raising the specter of the Clean Air Act's devastating economic 
impacts despite reports showing that the Clean Air Act has 
historically led to increases in jobs and will provide $2 
trillion in benefits in 2020. But what the Republicans are 
planning in order to address this fabricated threat is likely 
to create a real danger for the United States. This committee 
may soon take up a bill that would tie EPA's hands and prevent 
it from taking any steps to reduce dangerous global warming 
pollution under the Clean Air Act. What the legislation would 
also do is prevent EPA from taking any steps to reduce our 
dangerous dependence on foreign oil.
    Ms. McCarthy, the legislation this committee may soon act 
on could open up the existing car and light truck oil saving 
standards to legal challenge and will prevent further standards 
from being set. It will prevent further implementation of the 
renewable fuels standard and it will prevent EPA from doing 
anything to reduce oil use from planes, trains, boats and other 
industrial sources. In fact, this bill could result in an 
increase in our oil dependence of more than five million 
barrels of oil a day by the year 2030, more than we currently 
import from OPEC. Do you agree that this legislation could 
dangerously increase our dependence on foreign oil by 
preventing EPA from being able to take any steps to reduce 
demands?
    Ms. McCarthy. I would agree.
    Mr. Markey. Two weeks ago, the House passed a continuing 
resolution for spending for the rest of 2011 and that 
legislation was containing a rider that would block the EPA 
from using any funds to move forward in any way on curbing 
global warming pollution. For the landmark car and light truck 
efficiency standards to be fully implemented, EPA still has to 
sign off on California's plan to allow companies that are 
complying with the national standard to be deemed compliant 
with California standards. If EPA is not allowed to sign off on 
California's compliance plan could that put the entire fuel 
economy agreement that is supported by all stakeholders in 
jeopardy?
    Ms. McCarthy. It could.
    Mr. Markey. The President recently issued an executive 
order that requires federal agencies to propose regulations 
only after seeking the views of those who might be impacted by 
them. Can you give me an example of how EPA is complying with 
this directive in its efforts to regulate global warming 
pollution?
    Ms. McCarthy. Very quickly, we have the Administrator has 
charged us and we have gone out and done listening sessions 
even before we begin the regulatory process to look at new 
source performance standards for greenhouse gases.
    Mr. Markey. The President's executive order also requires 
agencies to take the special needs of small businesses into 
account while developing regulations. Can you give me an 
example of how EPA has complied with this directive as it 
contemplates regulations to reduce global warming pollution?
    Ms. McCarthy. The greenhouse gas tailoring rule eliminated 
the need to permit six million small facilities.
    Mr. Markey. The threat to our economy is the threat that is 
coming from a dramatic spike in oil. That usually signals the 
return of a recession. That is where we lose the jobs. If we 
tie the hands of EPA from taking the kind of bold action which 
they should take in order to reduce our dependence on imported 
oil, in the long run we are going to repeat this cycle of job 
destruction that has been our relationship with imported oil 
going all the way back to 1973. How many times do we have to 
re-learn this lesson? 1973, 1979-80, 1991-92, on and on right 
up to the $4 a gallon gasoline in 2008 that foreshadowed this 
economic catastrophe. It is imperative that we defeat this 
Republican effort to tie the hands of the EPA from ensuring 
that the renewable fuel standard that the fuel economy 
standards are in place that increase using technology our 
ability to tell OPEC we don't need their oil anymore than we 
need their sand.
    Thank you, Mr. Chairman.
    Mr. Barton. We thank the gentleman.
    It shows Mr. Olson is next, is that your understanding? OK, 
we are going to go with Mr. Olson and then Mr. Bilbray and then 
Mr. McKinley. What is your timeframe, Madam Administrator? Are 
you OK for another 15 minutes or so?
    Ms. McCarthy. I am here for you, Mr. Chairman.
    Mr. Barton. OK, thank you, ma'am.
    Mr. Olson. I thank the chair.
    Ms. McCarthy, as you know jobs are the biggest concerns of 
the American people right now, that 10 percent unemployment for 
about 2 years, and EPA Administration Jackson touts the job 
creation of the new green control technologies. When I asked 
one of our previous witnesses if she was right or wrong about 
creating these great jobs, he said wrong. Are you aware of any 
analysis done by EPA to determine the economic impact 
specifically with regard to jobs of the EPA's greenhouse gas 
regulations?
    Ms. McCarthy. No.
    Mr. Olson. Don't you think EPA should look at jobs in 
proposing some greenhouse gas regulations?
    Ms. McCarthy. Let me just expand on that. The greenhouse 
gas tools that we are using, the tools we are using to regulate 
greenhouse gases are the same tools that we have used in the 
Clean Air Program for 40 years and what we have found is that 
those tools actually provide cost-effective, public health 
measures that actually grow the economy and in many ways 
provide one of the most significant public health benefits that 
are available to us. So for every dollar we spend on clean air, 
we get $40 in public health benefits and so we believe that our 
job is to deliver public health to the people in this country 
but we are not insensitive to the cost impacts and the job 
impacts. And what I would say is the other point I would really 
like to make is that the Clean Air Act because of the public 
health benefits it creates in terms of making sure that people 
can get to work means that people can be productive and keep 
their jobs. What it means in terms of kids staying healthy, 
staying in school is incredibly important if you are a single 
parent or if you are parents where both need to work. We are 
providing opportunities for clean air. We are providing 
opportunities to keep people healthy, that certainly keeps 
people productive.
    Mr. Olson. Yes, ma'am. I ask you to submit further answer 
for the record please, ma'am.
    Ms. McCarthy. Yes.
    Mr. Olson. I have little time here. Would you be opposed to 
an inclusion of a detailed job statement and an impact 
statement any time EPA proposes new regulations? Would you be 
opposed to that?
    Ms. McCarthy. We already do a detailed regulatory impact 
assessment with the Office of Management and Budget for our 
rules.
    Mr. Olson. Something that we could include the private 
sector in to get their opinion as well?
    Ms. McCarthy. We actually do peer review of all our 
methodologies. That includes going to the private sector using 
economists and scientists so everything we do is peer reviewed 
in terms of the methodology, the data is transparent and we 
believe we do a very good job.
    Mr. Olson. Well, thank you then I will put you down as a 
big yes for having a more determinative jobs' impact statement 
from EPA when they propose to change regulations. And coming 
down the home stretch here, I want to talk about a problem my 
home State is having with the EPA regarding the permitting 
process that has been done by the Texas Council on 
Environmental Quality for the last 15 years. Basically, EPA is 
taking over the regulation of the power generation and 
refineries in our State and again, it has been going on for the 
last 15 years. Our State had a SIP approved 15 years ago, three 
Administrations, two Democrat, one Republican that Texas 
operated under and again approved by the EPA. Essentially it 
achieves its clean air goals by giving Texas the flexibility to 
establish caps for all emitting facilities at a plant instead 
of each individual piece of equipment. EPA is hurting Texas 
economy and jobs right now by taking over this permitting 
process. Just as example what has happened since EPA has done 
that in late-December, a major refinery has spent $4 million to 
``deflex.'' The problem I have with all of this is the flexible 
permitting process has worked. Since 1999, flexible permitting 
has achieved a 22 percent decrease in ozone, a 53 percent 
decrease it nitrous oxide compared to the national average of 
15 percent for ozone and 27 percent for nitrous oxide. So Texas 
22 percent in ozone, the Nation 15 percent, Texas 53 percent in 
ozone and the Nation 29 percent. We are doing all of this while 
adding 3.5 million people and creating half the private sector 
jobs in America since our country went into recession in 2009.
    Mr. Barton. The gentleman's time expires and he needs to--
--
    Mr. Olson. I will wrap up real quickly. The point of the 
Clean Air Act is clean air. Texas has done better than most. 
Why is EPA taking this over?
    Ms. McCarthy. I would just have to object to the phrase 
that we are taking anything over, Mr. Olson. I believe we are 
doing the best job that we can to work with TCEQ to make sure 
that the permits they issue are federally enforceable, that 
provide a sound platform for your businesses to operate with 
confidence. We do not believe that the flexible air permits are 
enforceable under federal law. We believe they put those 
businesses at risk. We believe they are not transparent enough 
for the communities that live around those facilities to know 
that they are on a level playing field with the way that every 
other State issues its permit and does business.
    Mr. Barton. And why did it take 18 years to come to that 
conclusion?
    Ms. McCarthy. I believe that it was under the Bush 
Administration that first raised the issue that these flexible 
air permits need to be fixed.
    Mr. Barton. Then you don't dispute that for 18 years EPA 
you said it was--well they didn't positively say it was OK. 
They didn't choose to say it was not OK and they only decided 
that it was not OK this last year?
    Ms. McCarthy. Well, we have made a concerted effort to try 
to work with the State and work with the industries to switch 
what we believe is not an appropriate and federally 
enforceable.
    Mr. Barton. Is there any other State that has had the 
success in actually reducing the criteria pollutants like Texas 
has?
    Ms. McCarthy. We have had many areas that have had great 
success and I am not disputing that Texas hasn't had reductions 
in air pollution. What I will say is they don't use a process 
that even EPA can figure out what is going on in those 
facilities and ensure that they are complying with federal.
    Mr. Barton. And that is a subject for another hearing. The 
gentleman's time has expired.
    The gentleman from California, Mr. Bilbray, is recognized.
    Mr. Bilbray. Ms. McCarthy, the CAFE standard.
    Ms. McCarthy. Yes.
    Mr. Bilbray. Is the CAFE standard set with 100 percent 
fossil fuel gasoline, 10 percent or 15 percent ethanol? What is 
the fuel mixture that is used to set the CAFE standard?
    Ms. McCarthy. The CAFE standard isn't based on the fuel 
mixture, it is based on fuel efficiency. It is based on the 
efficiency of the vehicle.
    Mr. Bilbray. So I was the guy who had the emissions put on 
the sticker next to the mileage but when the consumer gets the 
mileage reading.
    Ms. McCarthy. Right, it is based on zero. It is based fuel 
without any ethanol if that is your question.
    Mr. Bilbray. OK.
    Ms. McCarthy. That is our certification code.
    Mr. Bilbray. So if you are using 100 percent fossil fuel as 
your standard for CAFE.
    Ms. McCarthy. That is correct.
    Mr. Bilbray. And is there a reason why you don't use 
ethanol in the mixture?
    Ms. McCarthy. It just hasn't been updated of late to 
recognize the fact that there is ethanol in most of the fuel.
    Mr. Bilbray. And ethanol has an impact on fuel mileage, 
right?
    Ms. McCarthy. It does.
    Mr. Bilbray. What is your number, 66 percent, 70 percent of 
diesel, I mean of gasoline?
    Ms. McCarthy. I don't have that on the top of my head. It 
depends on certainly the amount of ethanol in the mix.
    Mr. Bilbray. Well no, I am talking about ethanol as 
compared to gasoline.
    Ms. McCarthy. Yes.
    Mr. Bilbray. The carbon chain is 66 percent, 70 percent?
    Ms. McCarthy. I don't know the answer.
    Mr. Bilbray. OK, I think that is a critical component I 
would like to talk to you about because as somebody who has 
worked at the local level on it when we talk about if you we 
are going to address that issue, first of all the consumer is 
not allowed in the United States to use 100 percent gasoline in 
the fuel system because the retailer is not allowed to sell it 
to the consumer without 10 percent.
    Ms. McCarthy. No, that is incorrect.
    Mr. Bilbray. OK, I can go buy real straight gasoline?
    Ms. McCarthy. It depends on where you live and what time of 
the year.
    Mr. Bilbray. OK, that is astonishing I will just tell you 
because that we get into it. California fought for years to try 
to oppose this and you remember that battle. A lot of your 
State agencies supported us on this. Let me get back to and oh 
by the way, in California we are paying $6 a comparable gallon 
for ethanol. Now, when we talk about something that has only 
the energy of 70 percent, let us give them 70 percent of 
gasoline, wouldn't you agree that our content mandate should 
reflect real useable energy and not just volume? Are you 
following what I am saying? In other words, there are certain 
green fuels that can produce 100 percent equity with gasoline. 
You have right now on the market a green fuel that only 
provides 66 to 70 percent of the energy of traditional fossil 
fuel. Don't you think that it would be much more real world 
standard if we allowed the BTUs to be the content requirement 
rather than by volume?
    Ms. McCarthy. Actually, I would have to say that what we 
regulate are air emissions. We don't force particular mixtures 
of fuels. We force those fuels to meet certain.
    Mr. Bilbray. Ma'am, no wait a second. I have got to call 
you down on that because we have got study on study that the 
CARB fuel was cheaper and cleaner than the oxidated fuel with 
ethanol. We have standards after standard in California. EPA, 
before you showed up, held us off for years. We had a cleaner, 
cheaper fuel. We are mandated in California to put ethanol into 
our fuel. All I am asking you is this, seeing that that mandate 
requires that only 70 percent of the or comparable seven 
percent, not 10 percent but 7 percent of the energy in that 
tank is renewable, don't you think that it would be more 
reasonable to reflect that that we allow the standard to be 
either 10 percent by volume or seven percent by energy because 
it is the energy? Wouldn't you agree that energy is what 
matters, not the volume?
    Ms. McCarthy. I understand exactly what you are saying and 
all I would suggest is that I am unprepared for this 
conversation. I am here to talk about greenhouse gases. If you 
would like to carry on this conversation I am certainly happy 
to do that and we will bring our technical expert.
    Mr. Bilbray. My point is the fact that the standard that is 
touted so much by my colleague from Massachusetts has major 
problems that need to be corrected and ought to be corrected 
through legislation if the EPA can't address it. That fact that 
the consumer is actually losing out 30 percent of the energy 
for, you know, for ethanol that you do not get gasoline and 
this is what my point is on this from the emissions point of 
view, emission standards are set per gallon, not per BTU.
    Ms. McCarthy. I understand.
    Mr. Bilbray. So now you have got this stuff hiding as equal 
to gasoline when it doesn't give you the energy of gasoline but 
has as they are trying to compare apples and oranges and this 
is a major problem we need to address.
    Mr. Barton. The gentleman's time is just about to expire. 
We appreciate the gentleman's questions on ethanol and fuel 
standards. The gentle lady is right, this is a greenhouse gas 
hearing on CO2 but those were very good questions.
    Mr. Bilbray. Well, Mr. Chairman, let me just say that the 
issue here though is that mandating the fuel as part of it, the 
emissions issue is hidden.
    Mr. Barton. That is true.
    Mr. Bilbray. Because when you talk the fact that the 
efficiency of the fuel is so deficient, you are now hiding this 
huge pollutant that is being brought into it in volume rather 
than talking about the true emissions per mile driven.
    Mr. Barton. OK, the gentleman's time has expired. We don't 
want to let you pull an Ed Markey on us here.
    Mr. Bilbray. OK.
    Mr. Barton. So we also appreciate the gentle lady's 
refreshing candor in answering the questions. This thing with 
the gentleman from West Virginia is going to be the last 
questions unless Mr. Rush has some questions.
    Mr. McKinley. Thank you, Mr. Chairman.
    I read through your remarks your opening statement several 
times and highlighted some features too. I think what I am 
gathering from your remarks is that the regulation of the 
greenhouse gases through the Clean Air Act is going to create 
jobs. It is going to offset the jobs that it is going to cost 
and I have gone through it and it talks about how by the year 
2020, we are going to have $2 trillion in benefits. A $30 
benefit for every dollar spent, that the economy is billions of 
dollars larger today because of the Clean Air Act. In the past 
7 years, 200,000 jobs have been created in the air pollution 
industry, air pollution control industry. I can go on. It was 
very interesting but I come from West Virginia and with all due 
respect I don't want to see us take risk that you are posing 
with that analysis and they appear as fantasy. What I believe 
and what I deal with, I am engineer and what I deal with is in 
reality and the reality is the jobs you describe, they are not 
going to be in West Virginia. When you crush our economy with 
over 50 percent of the revenue for their operators comes from 
coal we heard testimony earlier from some of your other 
compatriots that when you take away that we are either going to 
have in West Virginia the State government is either going to 
have to cut services or raise taxes and that is going to 
discourage a lot of investment in West Virginia. There is a 
steel company in Weirton and one in Wheeling that combined used 
to have over 30,000 employees that because of your over-
regulations and what has happened overseas, they are down to 
only 2,000 employees. They are just a shadow of what they were 
and when you talk to them it is all because of government and 
the regulations and the lack of control of what is going in 
from overseas. So when I go back on the weekends, I meet with 
the steel workers. I meet with the coal miners. They are scared 
to death of what Washington is doing and what the EPA is doing. 
They don't know how they are going to have a job tomorrow. They 
don't know how they are going to have a roof over their heads 
for their children and what their future is. They are scared to 
death of what the EPA, their more over-regulation with it. A 
good remark they said why can't, you know, our families have 
the same enjoyment that the EPA families are having with what 
they are doing to us? So these realities that I have referred 
to, they are coming from the people in my district. They are 
scared. They are worried about the government and the over-
regulation. When I went through your report, it is all based so 
much of it based on your own funded studies rather than 
independent scientific. It is your reports that you are quoting 
and then you refer to the B-rated Environmental Journal that is 
used. Not even one of the top ones in the country that 
worldwide, globally is respected. You are using a B-rated 
journal to use as to shore-up your argument of why you should 
do these kinds of things. I am just asking, madam, with a 
straight face how can you honestly say that the enforcement of 
the greenhouse gases are going to create jobs and the people in 
West Virginia are going to be OK?
    Ms. McCarthy. Well, you have hit many, many different 
issues.
    Mr. McKinley. You should speak up a little louder please.
    Ms. McCarthy. I am sorry. You have addressed a number of 
issues and let me try to get at these. I have been in the 
environmental business so to speak as a regulator for 30 years. 
I came from a working-class family as well. I do not believe 
that in this day and age we need to make a choice between clean 
jobs, good jobs and breathing clean air. I think we have proven 
in 40 years.
    Mr. McKinley. Just show me how you are going to create the 
jobs. Tell me what is going happen?
    Ms. McCarthy. In 40 years of history of the Clean Air Act--
--
    Mr. McKinley. I don't want the fantasy. I want to know 
specifically are we going to replace those jobs because those 
jobs are being lost.
    Ms. McCarthy. I do not believe that the approach we are 
taking on greenhouse gases because it is done in a commonsense, 
phased, measured way that is doing anything other than trying 
to identify the most cost-effective ways for new businesses to 
get permits and to do their business.
    Mr. McKinley. Did you not hear the testimony from the 
people that were just here the 2 or 3 hours prior to you?
    Ms. McCarthy. I did.
    Mr. Barton. The gentleman's time has expired but we will 
let the administrator answer the question.
    Ms. McCarthy. Let me just make a couple of points and one 
is that the permit requirements only are dealing with the 
largest sources of greenhouse gas emissions. They are only 
looking at the best technology to make them efficient when new 
ones are coming on line or when they are making major 
modifications. That is what we are doing and the data that I 
have in my testimony is all based on peer-reviewed science. It 
is not just EPA studies. It is all transparent. What I listen 
to are many people with ideas and concerns. I appreciate those 
but there were some documents that you are listening to that I 
don't think are transparent, that I don't think have been peer-
reviewed and I think the one thing that I am trying to do is to 
present you with information so that you can make the 
appropriate decisions and I do believe that there is a wealth 
of scientific data that says we need to take action to reduce 
greenhouse gases that is one of our most significant public 
health challenges and that the Clean Air Act for 40 years has 
been a premier opportunity to actually reduce pollution like 
carbon pollution in ways that is cost-effective.
    Mr. Barton. Does Mr. Rush wish to ask any wrap-up 
questions?
    Mr. Rush. No, Mr. Chairman, I don't have any additional 
questions.
    Mr. Barton. OK, let me--just for clarification before we 
adjourn as I understand the Obama Administration approach on 
greenhouse gases that you elaborated on, you are not going to 
set a standard based on fuel. You are not trying to set an 
emission level based on coal or an emission level based on 
natural gas or an emission level based on an alternative.
    Ms. McCarthy. No, our greenhouse gas permitting process 
starts with the proposal on the table. If it starts with a coal 
facility, those are the technologies.
    Mr. Barton. So if I have in Ohio a coal-fired power plant 
that is 50 years old and I want to maintain that plant as is, I 
am not going to have to do anything under your regulatory 
approach?
    Ms. McCarthy. On the greenhouse gases if you are not you 
don't need a permit unless conducting a major modification.
    Mr. Barton. But if I freeze my technology and let us say I 
am going to use the same fuel source and I am going to use the 
same plant equipment at the same location and I have a 400-
megawatt coal-fired power plant, I don't have to do anything 
under the regulatory approach that you all are proposing?
    Ms. McCarthy. You would not need to get a greenhouse gas 
permit. We would not be looking at your facility in terms of 
that.
    Mr. Barton. You are only going to look at facilities that 
are under renovation or under permitting as new source, new 
stationary sources?
    Ms. McCarthy. That is correct and only when you are a very 
large facility and you are making a large increase in 
greenhouse gases as a result, and even then all you are looking 
at are building efficiencies into the system.
    Mr. Barton. Seeing no further members present wishing to 
ask questions, we thank the gentlelady for her time and this 
subcommittee is adjourned.
    [Whereupon, at 6:06 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

    [GRAPHIC] [TIFF OMITTED] T6512.003
    
    [GRAPHIC] [TIFF OMITTED] T6512.004
    
    [GRAPHIC] [TIFF OMITTED] T6512.005
    
    [GRAPHIC] [TIFF OMITTED] T6512.001
    
    [GRAPHIC] [TIFF OMITTED] T6512.002
    
    [GRAPHIC] [TIFF OMITTED] T6512.069
    
    [GRAPHIC] [TIFF OMITTED] T6512.070
    
    [GRAPHIC] [TIFF OMITTED] T6512.071
    
    [GRAPHIC] [TIFF OMITTED] T6512.072
    
    [GRAPHIC] [TIFF OMITTED] T6512.073
    
    [GRAPHIC] [TIFF OMITTED] T6512.074
    
    [GRAPHIC] [TIFF OMITTED] T6512.075
    
    [GRAPHIC] [TIFF OMITTED] T6512.076
    
    [GRAPHIC] [TIFF OMITTED] T6512.082
    
    [GRAPHIC] [TIFF OMITTED] T6512.083
    
    [GRAPHIC] [TIFF OMITTED] T6512.084
    

                                 
