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




   THE AMERICAN ENERGY INITIATIVE, PART 5: RECENT E.P.A. RULEMAKINGS 
    RELATING TO BOILERS, CEMENT MANUFACTURING PLANTS, AND UTILITIES

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               ----------                              

                             APRIL 15, 2011

                               ----------                              

                           Serial No. 112-41


      Printed for the use of the Committee on Energy and Commerce
                        energycommerce.house.gov










   THE AMERICAN ENERGY INITIATIVE, PART 5: RECENT E.P.A. RULEMAKINGS 
    RELATING TO BOILERS, CEMENT MANUFACTURING PLANTS, AND UTILITIES

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 15, 2011

                               __________

                           Serial No. 112-41








      Printed for the use of the Committee on Energy and Commerce
                        energycommerce.house.gov
                               _____

                  U.S. GOVERNMENT PRINTING OFFICE

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

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

                                 _____

                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
JOHN SULLIVAN, Oklahoma              BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               JAY INSLEE, Washington
GREG WALDEN, Oregon                  JIM MATHESON, Utah
LEE TERRY, Nebraska                  JOHN D. DINGELL, Michigan
MICHAEL C. BURGESS, Texas            EDWARD J. MARKEY, Massachusetts
BRIAN P. BILBRAY, California         ELIOT L. ENGEL, New York
STEVE SCALISE, Louisiana             GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   LOIS CAPPS, California
PETE OLSON, Texas                    MICHAEL F. DOYLE, Pennsylvania
DAVID B. McKINLEY, West Virginia     CHARLES A. GONZALEZ, Texas
CORY GARDNER, Colorado               HENRY A. WAXMAN, California (ex 
MIKE POMPEO, Kansas                      officio)
H. MORGAN GRIFFITH, Virginia
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)

















                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     2
    Prepared statement...........................................     4
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     6
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     7
    Prepared statement...........................................     9
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................    11
    Prepared statement...........................................    12
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................   322
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................   355

                               Witnesses

Tom Fanning, Chairman, President, and Chief Executive Officer, 
  Southern Company...............................................    14
    Prepared statement...........................................    17
    Answers to submitted questions \1\...........................   357
Anthony F. Earley, Jr., Executive Chairman, DTE Energy...........    39
    Prepared statement...........................................    41
    Answers to submitted questions...............................   374
Michael J. Bradley, Executive Director, The Clean Energy Group...    58
    Prepared statement...........................................    60
    Answers to submitted questions...............................   380
Paul Kempf, Director of Utilities, University of Notre Dame......   226
    Prepared statement...........................................   228
    Answers to submitted questions...............................   398
John Walke, Senior Attorney and Clean Air Director, Natural 
  Resources Defense Council......................................   237
    Prepared statement...........................................   239
    Answers to submitted questions...............................   413
Dirk Krouskop, Vice President, Safety, Health, and Environment, 
  MeadWestvaco Corporation.......................................   297
    Prepared statement...........................................   299
    Answers to submitted questions...............................   416
Aris Papadopoulos, President and Chief Executive Officer, Titan 
  America, LLC...................................................   316
    Prepared statement...........................................   318
    Answers to submitted questions...............................   417

                           Submitted Material

Business Wire article, ``State-of-the-Art Emissions Scrubbers at 
  Constellation Energy's Brandon Shores Power Plant Commence 
  Commercial Operation,'' dated March 1, 2010, submitted by Mr. 
  Shimkus........................................................   335
Letter, dated July 1, 2011, from Tom Thompson, Chairman, Putnam 
  County, Georgia, Board of Commissioners, et al., to Mr. Upton, 
  submitted by Mr. Scalise.......................................   352

----------
\1\ Additional information provided by Mr. Fanning is available 
  at http://www.pacificorp.com/content/dam/pacificorp/doc/
  Energy_Sources/Integrated_Resource_Plan/2011IRP/
  EEIModelingReportFinal-28January2011.pdf and http://
  www.anga.us/media/210391/annual%20energy%20outlook%202011.pdf.

 
   THE AMERICAN ENERGY INITIATIVE, PART 5: RECENT E.P.A. RULEMAKINGS 
    RELATING TO BOILERS, CEMENT MANUFACTURING PLANTS, AND UTILITIES

                              ----------                              


                         FRIDAY, APRIL 15, 2011

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:03 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Shimkus, 
Walden, Burgess, Scalise, McMorris Rodgers, McKinley, Gardner, 
Pompeo, Griffith, Barton, Upton (ex officio), Rush, Inslee, 
Dingell, Markey, Green, Capps, Gonzalez, and Waxman (ex 
officio).
    Staff present: Maryam Brown, Chief Counsel, Energy and 
Power; Allison Busbee, Legislative Clerk; Cory Hicks, Policy 
Coordinator, Energy and Power; Heidi King, Chief Economist; 
Mary Neumayr, Counsel, Oversight/Energy; Greg Dotson, 
Democratic Energy and Environment Staff Director; Caitlin 
Haberman, Democratic Policy Analyst; and Alexandra Teitz, 
Democratic Senior Counsel for Energy and Environment.
    Mr. Whitfield. We will call the hearing to order this 
morning, and I look forward to the testimony of our panel. 
Before we get started, I want to just make a couple of comments 
relating to administrative issues. We had invited EPA 
representatives to testify at our hearing on Wednesday as well 
as today, and they were unable to attend. As a result of that, 
we are going to have another hearing and we are going to invite 
representatives of the agency to come. We know that there is 
more than one or two people that can testify over there, and I 
think that on this issue that we are looking at today, as well 
as others, it is imperative that we have testimony from EPA. So 
my staff is going to work with minority staff to schedule a 
time for Administrator Jackson or her designee to come before 
us in May after the Easter recess for a hearing with them.
    So this is another hearing on our--and now I am going to 
recognize myself for a 5-minute opening statement.

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

    This is another hearing on the American Energy Initiative 
in which we look at the impact of EPA regulations on providing 
fuel for our transportation needs and generating electricity 
for our other needs.
    In an interview with the San Francisco Chronicle back in 
January of 2008, then-Presidential candidate Barack Obama, when 
asked a question, said that his administration was going to 
have the most aggressive cap and trade system that was out 
there. Then he said so if somebody wants to build a coal power 
plant, they can. It is just that our policies will bankrupt 
them because they are going to be charged a huge sum for all 
that greenhouse gas that is being emitted. That will generate 
billions of dollars that we can invest in solar, wind, and 
other alternative energies. Well, he was not successful in 
adopting a cap and trade system, but it is quite clear that EPA 
is taking up the mantle, and they are determined to pass 
regulations to increase the cost of coal and make other energy 
sources more competitive.
    Today we are going to focus on only three of the multitude 
of regulations in the queue at EPA in which they are moving 
with unprecedented speed, and all of these are under Section 
111 and 112 of the Clean Air Act. First, we have the utility 
rule, which affects the HAP standards for new and existing 
coal- and oil-fired electric generating units and new-source 
performance standards for fossil fuel-fired EGUs.
    Second, we have the cement rule, which affects HAP 
standards and new-source performance standards for the Portland 
Cement manufacturing industry.
    Third, we have HAP standards for large and small boilers. 
We also have a rule establishing new standards of performance 
and environment and emission guidelines for commercial and 
industrial incinerators.
    And a fourth rule regarding secondary materials that are 
solid wastes.
    I might also mention that every one of these rules is the 
result of a court settlement or a consent decree. It is 
becoming quite clear that lawsuits are the method now being 
used to regulate at EPA. In fact, just under the Clean Air Act, 
there are 509 lawsuits pending at EPA.
    So we see this pattern of third-party groups filing 
lawsuits, EPA entering consent decrees, federal judges 
issuing--giving legal fees to the parties that brought the 
lawsuits in the first place. So if there was ever an act that 
is promoting lawsuits, it is this act.
    Now we know from these regulations that plants are going to 
close. We know jobs are going to be lost. We know wholesale 
electric rates are going to go up. We know America is going to 
be less competitive in the global marketplace. And we know that 
there are some witnesses today who are going to speak in favor 
of these regulations. And there are those who say these 
regulations are good for America because it is going to create 
new industries and create new jobs. And as one of our witnesses 
said, that may be true sometime in the future, but we know with 
certainty it will eliminate real jobs today and inflate 
wholesale power rates today, not in the future. And then we 
need to be concerned about our capacity, we need to be 
concerned about reserve margins, we need to be concerned about 
the cost. These regulations alone, under EPA's conservative 
estimates, will cost industry over $14 billion a year.
    So these are significant rules that have a dramatic impact 
on America as we try to revive our economy. And so I look 
forward to the testimony. I know that we need to have people 
supporting these rules, and we need to have people opposing 
these rules, because we need a national debate on the direction 
that EPA is going and the method that they are using to get 
there. To try to have a 60-day comment period on a 1,000-page 
rule with 1,000 additional technical pages is unacceptable.
    [The prepared statement of Mr. Whitfield follows:]





    
    Mr. Whitfield. So at this time I recognize the gentleman 
from Illinois for his 5-minute 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, for having 
this hearing, and I want to thank all of the guests for 
attending today's hearing.
    Mr. Chairman, I must say that your argument sounds 
persuading, but some of it is not persuading that the EPA is 
the real culprit here. Today, Mr. Chairman, we will hear 
testimony from a variety of stakeholders on proposed or 
finalized EPA rules regarding the maximum achievable control 
technology, or MACT, and other standards for power plants, 
cement facilities, boilers, and incinerators. Mr. Chairman, 
Section 112 of the Clean Air Act mandates that EPA establish 
technology-based standards to reduce hazardous air pollutants, 
HAPs, that may contribute to increased cases of cancer, birth 
defects, and other harmful defects, and adverse environmental 
impacts.
    We will all understand that EPA is required by law under 
the Clean Air Act to issue each of these rules on a specified 
schedule, and all of these schedules were actually mandated to 
be completed by the year 2000. Initially we all know that 
facilities will have an additional 3 and in some cases even up 
to 4 years to comply with these rules, plus we are finalizing 
in State or federal authorities determines that additional time 
is necessary to install pollution control.
    Now Mr. Chairman, I am not a math major, but it would seem 
to me that if these rules were supposedly issued way back in 
2000 and we are now in the year 2011 and facilities will still 
have up to 3 to 4 years to install these controls once they are 
finalized, then plant operators will have at least 15 years of 
delay in meeting these standards, even if all these rules were 
finalized today.
    Today, Mr. Chairman, we will be hearing contrasting 
testimony by interested stakeholders on how compliance with 
these rules will impact energy rates and reliability, jobs and 
the economy as well. This is the time for us to consider the 
impact of these rules on rates and reliability on jobs.
    First is those utility companies that have been proactive 
in preparing for these rules and some of these utility 
companies have been proactive in preparing for these rules, 
which everyone understood to--that they were coming. These 
prepared utility companies will testify on how these rules are 
balanced and they are reasonable. That EPA has engaged the 
industry in a transparent manner, and they have no problem 
meeting these standards because they have already invested in 
these controlled technologies.
    These forward-thinking companies which must be commended 
and applauded and lifted up will also testify that implementing 
these pollution control technologies can indeed advance 
economic growth, inspire innovation and competitiveness, and 
actually create well-paying jobs through the installation of 
scrubbers, air quality control systems, and other pollution 
control equipment.
    In addition to these economic benefits, we will also hear 
about some of the health and environmental benefits that 
compliance with these rules would bring. Specifically, just a 
reduction in mercury and particulate matter alone will lead to 
significant and tangible health benefits, including the 
prevention of thousands of premature deaths, non-fatal heart 
attacks, chronic bronchitis, and associated asthma cases.
    Unfortunately, we will also hear the other side of the 
story as well. Naturally, these companies who have been less 
active in planning and investing in pollution control 
technologies over the years will testify that they are, as a 
result, unprepared for compliance and will request additional 
time to do so. In essence, they are going to be whining at the 
table. Since there is no legislation up for a debate now today, 
I will reserve judgment on the merits of pushing these rules 
down the road for future action once again, and I look forward 
to today's testimony and the subsequent questions of our 
witnesses.
    Mr. Chairman, with that I yield back the balance of my 
time.
    Mr. Whitfield. Thank you. At this time I recognize the 
chairman of the Energy and Commerce Committee, Mr. Upton of 
Michigan, for 5 minutes.
    Mr. Upton. Well thank you, Mr. Chairman. I too regret that 
EPA was not able to be with us this morning.

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

    The American Energy Initiative is an ambitious effort to 
take on all of the energy-related issues that the Nation faces 
today and into the future. With high and rising gas prices, 
Middle East instability, and a domestic economy struggling to 
regain its footing and create jobs, the current energy 
challenges certainly are great, and with global industrial 
competition and related worldwide energy demand going nowhere 
but up, we need to take these issues on now before they get out 
of hand.
    What is most disturbing is how many of these energy 
challenges are self-imposed. Two days ago this subcommittee 
heard from Alaska's entire congressional delegation--many of 
them--as well as local officials--all of them--and energy 
company representatives from the State. Alaska is practically 
begging to produce more of its substantial reserves of domestic 
oil and help bring down future gasoline prices. The fact that 
EPA continues to stand in the way is both inexplicable and 
unacceptable. America has plenty of outside enemies who would 
love to cut off our energy supplies. We don't need to make 
things worse by being our own enemy as well.
    Every bit as bad are EPA regs that raise electricity costs 
and stifle our manufacturing competitiveness. Our fifth day of 
the hearing on the American Energy Initiative deals with a set 
of regulations, those impacting utility steam generating units, 
boilers, and cement. Raising the cost of operating utility 
steam generating units means higher electricity prices for 
everybody. Since boilers and process heaters are used at nearly 
every manufacturing facility, they also certainly raise 
manufacturing costs. Few, if any, of the other countries, 
including our industrial competitors, are pursuing similar 
policies to raise costs. Needless to say, there is not much of 
an export market for EPA's ideas and how to run this part of 
our economy.
    With unemployment long stuck above 8 percent, higher in 
manufacturing areas like mine, we need to be mindful of regs 
that make energy more expensive and discourage investment in 
the domestic manufacturing sector. Beyond power plants and 
manufacturers, other facilities with boilers, such as 
universities, will face higher operating costs at a time when 
State governments are hard-pressed to increase funding levels 
in tuition bills that are already way too high for most 
students to pay.
    The goal is not to repeal these regs; it is to advance them 
in a reasonable way. Regs that reduce emissions without 
reducing manufacturing activity and jobs or creating other 
undue hardships.
    I look forward to the discussion and plan to incorporate 
what is learned into the American Energy Initiative.
    I yield to Mr. Barton.
    [The prepared statement of Mr. Upton follows:]





    
    Mr. Barton. Thank you, Mr. Chairman--both Mr. Chairmans. 
Thank you for holding this hearing.

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

    We have a very difficult economy. We all know that. The 
Environmental Protection Agency, I think this is our third or 
fourth hearing this week in which they have been invited to 
attend and I think they have come to one. We could call them 
the Evaporating Personnel Administration, I guess. They don't 
seem to ever show up and be accountable.
    Mr. Rush. Will the gentleman yield?
    Mr. Barton. I will, on your time. I am always happy to 
yield on your time.
    They have consistently--they being the EPA--made 
problematic decisions with their proposed regulations, rulings, 
and in some cases, pulling the existing permits as they have 
done in Texas without cause. These threaten our Nation's energy 
security at a minimum and our economic opportunity for sure.
    The regulations that EPA is proposing as the subject of 
this hearing will decrease reliability in our energy sector, 
increase the cost of our energy, and kill jobs. The latest and 
greatest scheme to regulate the hazardous air pollutants from 
power plants under the Clean Air Act Section 112 will amend the 
new source performance standards with regard to the new utility 
maximum achievable control technology, or MACT. Some people 
call it big MACT standards. This would cause an adverse effect 
on coal and oil electric generating plants throughout our 
country.
    The EPA seems to be going after a number of different 
industries, but it is apparent to me that they are actually 
attacking the most prevalent economical resource generation in 
the United States, and that is the coal industry.
    The timeline that EPA is proposing is unworkable, 
unreasonable, and uneconomical. Their statistical data are 
skewed. They base their proposal on the average of the 12 
best--12 percent best performing plants in the country. The 
results do not reflect the real life activity of existing power 
plants across the Nation. With so many compliance factors 
involved, no one plant can possibly expect to comply with all 
of the MACT limits on all modes of operation.
    To comply with the EPA's utility MACT proposal, it will 
cost $11 billion annually across the electric generation 
industry. Cement is an additional $1 billion. Under the boiler 
rules, $2.3 billion is indicated by the EPA in cost to the 
refinery industry. If you add that up, that is almost $14 
billion, Mr. Chairman.
    And finally, last but not least, I do find it troubling 
that Lisa Jackson, once again, is a no-show at a very important 
hearing that she has had every opportunity to be in attendance. 
The MACT truck is about to overrun us all, and she is not even 
here to comment on the proposed regulations.
    With that I yield back, Mr. Chairman.
    [The prepared statement of Mr. Barton follows:]





    
    Mr. Whitfield. Thank you very much. Mr. Waxman is on his 
way. He has been delayed, so he will have a 5-minute opening 
statement when he gets here, but in the meantime, I want to 
introduce our panel. We do appreciate all of you coming to help 
us examine in a more thorough way the implications of these 
regulations.
    We have Mr. Tom Fanning, Chairman, President, and CEO of 
Southern Company. We have Mr. Anthony Earley, Executive 
Chairman, DTE Energy. We have Mr. Michael Bradley, Executive 
Director of The Clean Energy Group. We have Mr. Paul Kempf, 
Director of Utilities at Notre Dame University--University of 
Notre Dame. We have Mr. John Walke, who is the senior Attorney 
and Clean Air Director for the Natural Resources Defense 
Council. We have Mr. Dirk Krouskop, Vice President, Safety, 
Health & Environment at MeadWestvaco Corporation, and we have 
Mr. Aris Papadopoulos, President and CEO of Titan America.
    We thank all of your for being here. We have one vote on 
the House Floor right now. We like to start these hearings 
early so we don't have to be interfered by votes, so we have 
one Member going over to vote. He is going to come back, but in 
the meantime, we will go on and get these opening statements 
going because we want to get them on the record.
    So Mr. Fanning, I will recognize you for 5 minutes for your 
opening statement.

   STATEMENTS OF TOM FANNING, CHAIRMAN, PRESIDENT AND CHIEF 
 EXECUTIVE OFFICER, SOUTHERN COMPANY; ANTHONY F. EARLEY, JR., 
 EXECUTIVE CHAIRMAN, DTE ENERGY; MICHAEL J. BRADLEY, EXECUTIVE 
   DIRECTOR, THE CLEAN ENERGY GROUP; PAUL KEMPF, DIRECTOR OF 
    UTILITIES, UNIVERSITY OF NOTRE DAME; JOHN WALKE, SENIOR 
  ATTORNEY AND CLEAN AIR DIRECTOR, NATURAL RESOURCES DEFENSE 
   COUNCIL; DIRK KROUSKOP, VP, SAFETY, HEALTH & ENVIRONMENT, 
MEADWESTVACO CORPORATION; AND ARIS PAPADOPOULOS, PRESIDENT AND 
                    CEO, TITAN AMERICA LLC.

                    STATEMENT OF TOM FANNING

    Mr. Fanning. Thank you. Chairman Whitfield, Ranking Member 
Rush, and members of the subcommittee, thank you for inviting 
me to testify today.
    Southern Company is the leading energy supplier in the 
Southeastern United States, and one of the largest generators 
of electricity in the Nation. We work hard every day to ensure 
that our customers have access to reliable and affordable 
power. Like the rest of our industry, we are committed to 
working with our communities, stakeholders, and our customers 
to continue reducing our environmental impact. That is why 
Southern Company in recent years has invested over $8 billion 
in environmental controls, and intends to spend up to $4.1 
billion to comply with existing, revised, or new rules over the 
next 3 years.
    We are glad that you are examining and discussing the 
utility MACT rule that EPA recently proposed. We are very 
concerned with this proposal and believe that if adopted, it 
could put the reliability and affordability of our electric 
supply at risk. The rule would impact plants responsible for 
nearly 50 percent of total electricity generation. It would 
impose an unrealistic 3-year timeline for compliance at a time 
when the industry is laboring to comply with numerous other 
mandates. The result could be the reduced generating capacity 
below the minimum required to provide reliable service and also 
cause electric rates to substantially increase.
    However, we believe these risks can be reduced or avoided 
by moving forward on a reasonable schedule that reflects 
industry experience and the challenges of upgrading the 
Nation's generating fleet.
    I have four points for your today.
    The first is that the timeline for this rule is 
unreasonable. The Agency has proposed to allow only 60 days to 
comment on one of the most burdensome and expensive rules that 
was ever put forward. We looked at nine other less complex 
rules, and found that EPA has allowed between 120 and 180 days 
for comments on each of them. This is nearly a 1,000-page rule 
with nearly 1,000 more pages of technical supporting documents. 
Sixty days is plainly inadequate for the industry to analyze 
this rule and its effects, and to offer meaningful comments.
    But even a greater concern is the 3-year compliance period 
that would follow this particular MACT rule. A study conducted 
for the Electric--Edison Electric Institute by ICF concluded 
that for U.S. by 2015, over 80,000 megawatts of scrubbers and 
over 160,000 megawatts of fabric filter baghouses will be 
required to be constructed. Almost 80,000 megawatts of current 
coal capacity will retire and have to be replaced. As the CEO 
of a company that has installed more pollution controls than 
any other utility, I tell you that this cannot be done in 3 
years.
    That leads to my second point, which is that this rushed 
timeline could put the reliability of the Nation's electric 
generating system at risk. The major challenge of complying 
with these new rules is ensuring adequate reserve margins, that 
is, the generating capacity that is available during times of 
high demand or during interruptions in service from base load 
plants. According to Bernstein Research, the impact of utility 
MACT rule on smaller plants will cause regional capacity 
margins to plummet by 7 to 15 percentage points into the single 
digits in some regions. Other studies have reached similar 
conclusions. The result will be a greater risk of power 
outages.
    My third point is that the rushed timeline will also impact 
electricity affordability. The construction of the massive 
numbers of controls that I mentioned, plus the costs of 
replacing the coal plants that will retire will require 
utilities to spend as much as $300 billion by 2015. This huge 
cost will certainly show up in customers' power bills and will 
threaten jobs and any economic recovery.
    My fourth and final point is that there is a better way to 
continue to improve our environmental performance while 
protecting our customers, reliability, and jobs. We need a 
realistic compliance schedule based on historical experience 
that allows us to retrofit existing plants and to begin work on 
any replacement capacity. A realistic schedule would allow 
upgrades to be made in an orderly fashion without placing 
reliability in jeopardy or imposing undue additional cost 
increases on our customers.
    To conclude, we believe that the utility MACT proposal on 
its current schedule and in its current form puts at risk the 
reliability and affordability of power in the United States. 
These risks can be reduced by extending the rulemaking schedule 
and the timeline for compliance. During that time, we can work 
to improve and refine the proposed rule, and simultaneously 
better prepare for any changes in our generation fleet. This is 
a commonsense solution that all stakeholders should be able to 
support.
    I thank the committee for holding this important hearing 
today and giving me the opportunity to testify. I look forward 
to any questions you might have.
    [The prepared statement of Mr. Fanning follows:]





    Mr. Whitfield. Thank you, Mr. Fanning, and Mr. Earley, you 
are recognized for 5 minutes.

              STATEMENT OF ANTHONY F. EARLEY, JR.

    Mr. Earley. Thank you, Mr. Chairman and members of the 
subcommittee for the invitation to address a subject with 
critical implications for the future of our industry and your 
constituents, the customers that we serve.
    Sometimes we focus too much on what we disagree with, but I 
want to emphasize one thing that we all should be able to agree 
on, and that is the importance of a reliable and affordable 
electric system. We only need to think back to the massive 
blackout of 2003 to understand the ubiquitous role that 
electricity plays in our economy and in our personal lives.
    Let me start by emphasizing that progress on the 
environment is vital, but it must continue on a schedule that 
can be efficiently and cost-effectively managed without 
requirements that jeopardize the economy and with the 
sensitivity to preserving the balanced mix of generation 
technology that has served us so well in the past.
    My message today is not do nothing. My message today is to 
do something that will continue the tremendous progress we have 
already made. The key to success will be managing the timing, 
using a commonsense approach to achieve improvements, and 
ensuring the benefits actually do justify the very real cost in 
terms of money and jobs.
    I want to make it clear why this commonsense measured 
approach is appropriate by dispelling the myth that we face 
some immediate environmental crisis. The progress that our 
industry has made in cleaning the air since the Clean Air Act 
was adopted in 1970 is one of the great environmental success 
stories, and I will use my own company, DTE Energy, as an 
example. Over the last 35 years, we have reduced particulate 
emissions by more than 90 percent, and sulfur dioxide and 
nitrogen oxide by more than 70 percent; at the same time 
increasing generation output by approximately 45 percent. Other 
electric utilities have accomplished similar results. The 
bottom line is our children are breathing air today that is far 
cleaner than the air that we inhaled as children. Having said 
that, we continue to make improvements. We are investing 
billions of dollars in environmental controls and clean energy 
technology.
    My concern with the EGU MACT is that it derails this 
approach and has very serious consequences. The proposed rule 
is flawed in a number of ways.
    First, it provides insufficient time to address these 
extremely complex issues. This rule will have far-reaching 
economic and energy supply impacts. Allowing just a 60-day 
comment period is totally inappropriate. The goal of completing 
these regulations by November seems equally inappropriate, 
considering the enormous amount of public comment that this 
rule is going to generate. Too much is at stake to move forward 
without proper vetting.
    Second, the proposed rule focuses on technology-based 
standards for some of the emissions, and for some of the 
emissions, there is sparse data available to support these 
standards. The EPA is proceeding with regulations under the 
mistaken belief that reasonably priced technology solutions are 
currently available to control acid gasses, non-mercury metals, 
and organics. For example, the low estimate for early plant 
retirements is based on the belief that the industry can meet 
acid gas limits using dry sorbent injection. It appears that 
the EPA made this determination based on one 3-week trial on 
one boiler type. Even the company that performed that 
evaluation recommends a more complete trial to better 
understand the technology. I can't think of any business that 
would be willing to invest millions or billions of dollars on a 
single 3-week trial that may or may not be applicable to the 
entire U.S. coal fleet.
    The third and most troubling flaw of the proposed rule is 
choosing not to pursue health-based standards. The EPA is 
committing our customers to funding billions of dollars in 
technology investments without knowing the potential health 
implications and without serious consideration of the 
ramifications to the economy and ultimately to the public. 
EPA's own analysis concludes that reducing the emissions 
covered by the rules offers only minimal health benefits. 
Almost all of the benefits they assigned to these regulations 
is associated with the expected coincidental reductions in 
particulate emissions, something that is already regulated 
under another part of the Clean Air Act.
    Even if EPA is right about available technology, can we 
afford to spend billions of dollars when we have no solid 
understanding of whether it can be worthwhile or not? Whether a 
conscious decision or not, the regulations will have the impact 
of driving companies to retire significantly more of their 
older coal fire units than EPA estimates. With plant closings, 
lost jobs, and lost tax base at stake, we must be prudent in 
our decision-making, particularly in this economy.
    In closing, I would like to stress that our end goal is the 
same: continued progress on the environmental front. I ask that 
you ensure that there is sufficient time for EPA to make sound 
decisions, to understand whether a health-based standard would 
reduce the real impacts on our customers and the economy, and 
to evaluate the adequacy of control technologies so we don't 
unnecessarily undermine the viability of a diverse energy mix. 
This approach has served us well in the past, and it will 
continue to serve us well in the future. Thank you.
    [The prepared statement of Mr. Earley follows:]





    Mr. Upton [presiding]. Thank you, Mr. Earley. Mr. Bradley?

                STATEMENT OF MICHAEL J. BRADLEY

    Mr. Bradley. Good morning, Chairman----
    Mr. Upton. You need to hit that mic button down below.
    Mr. Bradley. Good morning, Chairman, Ranking Member Rush, 
and members of the subcommittee. My name is Michael Bradley, 
the executive director of The Clean Energy Group. I am 
testifying today on behalf of The Clean Energy Group's Clean 
Air Policy Initiative, a coalition of electric power companies. 
The member companies are some of the Nation's largest 
generators of electricity, serving nearly one-fifth of all U.S. 
electric customers. On behalf of my member companies, I 
appreciate the opportunity to speak with you today and offer 
the following observations on the proposed Utility Toxics Rule.
    The rule provides the business certainty required for the 
industry to move forward with capital investment decisions. The 
proposal, while not perfect, is reasonable and consistent with 
the requirements of the Clean Air Act. The electric sector, 
overall, is well-positioned to comply. The Clean Air Act 
provides sufficient time to comply, as well as the authority to 
accommodate special circumstances where additional time is 
necessary.
    It should be no surprise that EPA issued this rule. Since 
2000, the electric industry has known that hazardous air 
pollutants would be regulated under the Clean Air Act. Now, 
over a decade later, EPA is under a quarterly deadline to 
finalize the rule by November. Additionally, EPA conducted an 
extensive data collection effort with the cooperation of 
industry to ensure that the standards were based on real world 
operating experience.
    The proposed standards are not as burdensome as some 
electric sector members anticipate. In fact, if there was any 
surprise, it was the degree of compliance flexibility proposed 
by the rule. For example, the proposal includes work practice 
standards for dioxins rather than initial limits, surrogates 
for certain hazardous air pollutants, as well as the ability to 
average among units at a facility. We are evaluating specific 
technical issues with the rule that we think need to be 
addressed, but we expect continued engagement with EPA will 
lead to a final rule that is both balanced and flexible.
    The technologies to control hazardous air emissions, 
including mercury and acid gasses, are commercially available. 
Also, the industry has extensive experience with installation 
and operation of these controls. Companies will generally have 
3 years to comply once the rule is final. We believe that the 
vast majority of generating units can meet this schedule for 
several reasons.
    First, to their credit, many companies have installed major 
components of pollution control systems that will be required 
to comply. For example, 60 percent of the Nation's coal 
capacity has already been retrofit with scrubbers. We are not 
starting from scratch.
    Second, EPA allows compliance flexibility in the rule by 
allowing power plant owners to average their emissions across 
all the boilers at a facility. Almost 20 percent of coal 
capacity that currently lacks scrubbers is co-located at plants 
with existing scrubbers for the potential to average.
    Third, historic experience shows that the industry has the 
capacity to install a large number of pollution control systems 
in a relatively short period of time. Between 2008 and 2010, 
the industry installed about 60 gigawatts of scrubbers and 20 
gigawatts of advanced NOx controls.
    Fourth, most of the controlled technologies that will be 
required to comply, like activated carbon injection and dry 
sorbent injection, can be installed in less than 2 years. If a 
company is unable to comply in time, the Act allows up to one 
additional year to install the necessary controls. This will 
allow companies to manage multiple control installations and 
avoid potential reliability concerns. Furthermore, EPA has the 
authority and has used this authority in similar situations to 
provide additional time beyond the 1-year extension.
    To conclude, the Clean Air Act amended by Congress in 1990 
with overwhelming bipartisan support and signed by George H.W. 
Bush requires regulations that limit hazardous air pollutions 
from the electric sector. In 2000, EPA took the first step 
towards regulating those emissions, and over a decade later, 
EPA now is working to finalize the rule. While complying with 
these obligations will require planning and significant 
resources, many companies are on their way to complying. There 
is no reason to delay the implementation of the Utility Toxics 
Rule. Proceeding on schedule with the flexibility that is 
available will provide the business certainty that the industry 
is looking for.
    Thank you for your time, and I would welcome any questions 
you may have.
    [The prepared statement of Mr. Bradley follows:]





    
    Mr. Upton. Thank you. Mr. Kempf?

                    STATEMENT OF PAUL KEMPF

    Mr. Kempf. Good morning, Chairman Upton and members of the 
committee, and thank you for inviting me to testify before the 
committee today.
    I am the director of utilities at the University of Notre 
Dame. The university is a national Catholic university located 
in Northern Indiana, 90 miles east of Chicago. It has a campus 
of 1,250 acres with over 140 buildings and a student enrollment 
of 12,000. Notre Dame was the first university in the U.S. to 
generate electricity powering lights in its main building 
shortly after Edison made incandescent lighting practical. The 
university takes seriously its leadership role in demonstrating 
stewardship, sustainability and social justice, and therefore 
seeks to be a leader in all areas, including energy and 
environment. We are proud of the efforts of our student group, 
Green ND, and our Office of Sustainability, which have led a 
number of energy and environmental projects. I appreciate the 
opportunity to tell the committee about the challenges facing 
Notre Dame and many other universities across the Nation as we 
strive to comply with the full range of pending EPA 
regulations.
    We at Notre Dame are most immediately concerned about the 
suite of four rules known as the boiler MACT rules. These rules 
will significantly impact many universities, including Notre 
Dame, which installed their own utility plants to ensure 
reliable and affordable source of energy for their campuses. 
These plants are efficient, cost effective, and environmentally 
sound source of energy for universities. EPA's final rules, 
however, impose unrealistic and costly requirements that EPA 
has not justified by corresponding reduction of hazardous air 
pollutants.
    EPA's boiler MACT rules will require significant changes, 
many of which are not achievable, affordable, or realistic in a 
timeframe set out by EPA. Improving environment at reasonable 
cost benefit rates is certainly in all our best interests, but 
the recent rules will require significant additional capital 
and operational expenses, assuming compliance is even possible. 
Compliance testing costs alone will likely increase nearly 20-
fold from the expenses based on levels of testing and testing 
frequency.
    Universities face unique challenges in adapting to new 
rules. Most universities plan over a decade or more. Also, 
universities are unable to make the types of changes that are 
options for businesses. We cannot consolidate with other 
universities, move to a different state, or even overseas. 
Raising prices for our customers would be a hike in tuition 
imposed on our students and their families, already stretched 
by the Nation's struggling economy.
    At Notre Dame, we have had a combined heat power system 
since 1953, one of the first universities to adopt this highly 
efficient and environmentally conscious means of producing 
energy. Our CHP system includes three coal fire boilers and 
three gas and oil boilers, and produces 55 percent of the 
campus's electrical demand. This fuel diversity offers a hedge 
against volatility, shortages, and market factors. Regulations 
should not make it impossible to sustain the reliability and 
energy security provided by our system.
    When the original boiler MACT rule was issued in 2004, the 
university upgraded its control to achieve that regulation, but 
then the boiler MACT rule was vacated by the courts. The 
university was left to decide whether to proceed with its $20 
million investment in pollution control equipment, or halt the 
project. We decided to complete the project and achieve 
emission reductions. We were left to see whether our new system 
would be sufficient to comply with the EPA's revised boiler 
MACT. Now nearly 4 years later, we are faced with a revised 
rule that is patently different from the original rule, and one 
that presents uncertain compliance capabilities for our 
investment. EPA's capital cost estimate for compliance in the 
'04 rule was estimated at half a million dollars per solid fuel 
boiler. We spent nearly $7 million to comply with that rule. 
Now for new boiler MACT, EPA projects capital costs of $2.2 
million per unit. With this wide disparity between EPA 
projected costs and actual costs, it is difficult to plan.
    Twenty million dollars in a university setting could 
provide a full year of tuition for 500 students or a full 4-
year scholarship for 1125 students. Before we commit more 
millions of dollars for resources, EPA should take the 
necessary time to address the fundamental issues with the 
rules. We are not publicly funded. These added costs of 
compliance are directly borne by our students and their 
families, who are committed to our tradition of offering an 
excellent education as economically possible to our students. 
Yet with these rules on the horizon, maintaining that tradition 
is more challenging than ever before.
    Mr. Chairman, thank you for this opportunity to testify 
before the committee. I welcome any questions you or other 
Members may have.
    [The prepared statement of Mr. Kempf follows:]





    
    Mr. Upton. Thank you. Mr. Walke?

                    STATEMENT OF JOHN WALKE

    Mr. Walke. Thank you, Chairman Upton and members of the 
subcommittee. My name is John Walke and I am Clean Air Director 
and Senior Attorney for the Natural Resources Defense Council, 
a national public health and conservation organization with 1.2 
million members and online activists nationwide.
    Power plants, industrial boiler, and cement plants are the 
largest emitters of mercury and scores of other toxic air 
pollution in the country today. Mercury is a powerful brain 
poison that damages the developing brains of children and 
fetuses, lowering IQs and harming motor functions. These 
polluting facilities emit many other toxic air pollutants as 
well that cause cancer, heart attacks, strokes, asthma 
symptoms, and premature deaths.
    Yet these industrial facilities still are failing to comply 
with basic clean air requirements to reduce their toxic 
pollution after two decades after passage of the 1990 Clean Air 
amendments. This inexcusable situation is due to unlawful 
delays, along with plainly illegal standards by EPA under the 
prior administration, standards that were overturned in courts 
by unanimous decision rendered by judges appointed by 
Republican and Democratic Presidents alike. These delays in 
court decisions resulted in EPA under the present 
administration inheriting the obligation to re-propose and 
reissue standards that comply with the Clean Air Act and 
protect the public.
    Now that EPA has final and proposed mercury near toxic 
standards for the three industrial sectors at issue today, 
these standards will deliver enormous benefits and health to 
the American people. Yet today's hearing is serving as a 
platform for industry officials to urge the delay of these 
lifesaving mercury and air toxic standards. Members of this 
committee in recent days have acknowledged they are crafting 
plans to delay these generationally important health 
safeguards.
    If there is one thing for you to remember from my testimony 
today, it is this. Delay would mean more deaths and disease on 
a truly staggering scale. If these health protections were to 
be delayed by even a single year, such delay would result in up 
to 26,000 premature deaths, 16,500 nonfatal heart attacks, 
178,000 asthma attacks, 18,000 hospital admissions and ER 
visits, 1.3 million days when people would miss work or school, 
and nearly 8 million days when people would restrict their 
activities.
    If delay is pursued, I am unaware of any other proposal or 
legislation to have been entertained in Congress that would 
inflict this level of hardship upon the American people's 
health in a single year. I respectfully appeal to the members 
of this committee to be straight with the American people about 
the deadly consequences of delay. The American people deserve 
to have these choices put in sharp relief. The choice between 
enforcing the law and securing these tremendous health benefits 
every year are blocking law enforcement and sacrificing public 
health.
    Americans have a right to understand how many people would 
be allowed to die due to the weakening or delay of these health 
safeguards. How many more pregnant women and children will be 
poisoned by mercury in their bodies if Congress delays or 
weakens health safeguards covering these industries? How many 
additional hundreds of thousands of cases of asthma attacks, 
heart attacks, and trips to the ER would be permitted to occur?
    Before Congress even considers setting the country on this 
course, I urge you to convene legislative hearings not with 
lawyers, lobbyists, and corporate executives, but with doctors, 
nurses, and respiratory therapists. Please invite a panel with 
a pregnant mother-to-be, a religious leader, and a specialist 
in neurotoxins to discuss the impacts of delayed cleanup on the 
most vulnerable in our care, the more than 300,000 newborns 
each year in the U.S. that may have been overexposed to mercury 
in utero, increasing their risk of neural developmental 
effects.
    These EPA rulemakings have been conducted pursuant to clear 
statutory authorities and court orders following court 
decisions that vacated and remanded earlier unlawful standards 
issued by the prior administration for these industries. 
Indeed, for critics that complain about the concentration of 
several standards by the current administration during its 
first 2 years, there is a very simple explanation. EPA, under 
the prior administration, violated the Clean Air Act repeatedly 
over two terms, courts sent those standards back to EPA for 
correction, the prior administration left office without fixing 
those standards, and now the current administration must fix 
the standards to follow the law.
    We Americans deserve to have our government follow the law, 
to enforce the law. Americans have the right to clean air, a 
right conferred in the Clean Air Act of 1990 by a Republican 
President, 89 Senators, and 400 Members of this House. Congress 
should not take away our right to clean air.
    In conclusion, there can be no claim that EPA lacks 
statutory authority to protect Americans against poison and 
cancer-causing chemicals. There can be no complaint that EPA is 
acting too quickly after well over a decade of delay, fueled by 
special interest and law-breaking. There should be no 
willingness to entertain delays of health protections that will 
avoid up to 26,000 deaths, nearly 180,000 asthma attacks, and 
mercury poisoning of society's most vulnerable. I respectfully 
ask you to let the clean air work to protect the health of all 
Americans.
    Thank you.
    [The prepared statement of Mr. Walke follows:]





    
    Mr. Whitfield. Thank you. Mr. Krouskop, you are recognized 
for 5 minutes.

                   STATEMENT OF DIRK KROUSKOP

    Mr. Krouskop. Chairman Whitfield, Ranking Member Rush, and 
members of the subcommittee, my name is Dirk Krouskop and I am 
the Vice President of Safety, Health, and the Environment at 
MeadWestvaco. MeadWestvaco is a global leader in the packaging 
industry, producing high quality paperboard and plastic 
packaging, in addition to operating school and office supply 
and specialty chemical businesses. We operate and market our 
products globally with approximately half of our 17,500 
employees based in the United States. At MeadWestvaco, we are 
proud of our leadership and sustainability, and our 
longstanding record of environmental stewardship.
    Today I am here representing MeadWestvaco; however, we are 
also members of a number of organizations that represent 
manufacturers whose members share concerns similar to those 
that I am expressing today on behalf of MeadWestvaco. I would 
like to thank you for the opportunity to discuss the challenges 
that manufacturers face in boiler MACT and other related rules. 
We applaud this subcommittee for your commitment to ensuring 
that laws are implemented in a reasonable and fair manner. 
Environmental legislation has produced significant improvements 
in air and water quality over the past several decades, and 
improvements year over year continue.
    What has also changed and at an increasing pace in recent 
years is the global nature of our businesses. Today, many 
businesses, including MeadWestvaco compete globally. We must 
produce cost competitive products that can be sold into global 
markets; we must compete against products from overseas; and we 
must compete in global markets for the capital required to meet 
regulatory demands, and hopefully still be able to grow our 
businesses.
    A key issue for the committee's consideration is the 
cumulative effect of many new regulations which are confronting 
manufacturers like MeadWestvaco nearly simultaneously. Paper 
and wood products manufacturers are facing over 20 major 
regulations from EPA's Clean Air Act program alone. The pace 
and volume of regulation is not sustainable not only for the 
regulating community, but also for the government.
    I have attached a diagram to my written testimony that 
shows the clean air regulations in the pipeline that will 
affect forest products manufacturers. This picture gives you an 
idea of the regulatory train wreck from just one EPA program, 
and it doesn't even take into account the hundreds of other 
regulations we must comply with every day.
    As detailed in my written statement, this regulatory 
environment increases our costs, makes us less competitive on a 
global basis, and ultimately results in lost jobs.
    The forest products industry, like so many other 
manufacturers, has been hit hard by the economic crisis. Since 
2006 when the housing downturn began, the forest products 
industry has lost 31 percent of its workforce, nearly 400,000 
high-paying jobs, largely in small rural communities that can 
least afford to lose them. The closing of a mill in a small 
town has a severe ripple effect when that mill is the largest 
employer and a major contributor to local taxes and community 
programs.
    Here are a few of the many regulations we are concerned 
about. EPA's recently finalized Boiler MACT rules will cost our 
industry well over $3 billion, and continues to ignore what 
real world best performing boilers can achieve. While Congress 
authorized EPA to adopt a health-based approach to target 
controls for certain emissions below the health threshold, EPA 
decided not to use this authority and reversed its previous 
precedent.
    EPA is also considering redoing the Pulp and Paper MACT 
issued a decade ago, even though MACT is supposed to be a one-
time program. This could add another $4 billion in capital 
costs beyond Boiler MACT.
    The National Ambient Air Quality Standards Program has 
greatly reduced emissions of criteria pollutants, yet further 
tightening is underway. Even before the latest ozone standard 
is fully implemented, EPA is tightening still further, 2 years 
ahead of the statutory schedule. Collectively, the revisions of 
all the National Ambient Air Quality Standards rules could cost 
the forest products industry over $8 billion in capital costs.
    These constantly changing air quality regulations impede 
rational, long-term decisions about capital spending, 
particularly for projects that do not return profits to the 
bottom line.
    So what are we asking? Well, we applaud the subcommittee's 
effort to address the impacts of EPA regulations, and we 
believe Congress needs to act. As you know, EPA requested from 
the court an extension of a deadline for finalizing the Boiler 
MACT rules to get them right. The court did not grant this 
request. We would respectfully request that Congress act to 
stay the final Boiler MACT rules until EPA does get it right, 
reset the date for defining resources, allow facilities more 
time to comply, clarify that renewable and recyclable materials 
are traditional fuels, and ensure that the rules are achievable 
and less burdensome.
    We also urge this committee to continue its efforts to 
shine light on the impact of EPA regulations facing 
manufacturers over the next decade. The threat of continued 
erosion of global economic competitiveness in the United States 
is real. Contributing to transparency and analysis of the 
impacts of regulations on the United States is critical to a 
future healthy and robust economy.
    In summary, we know that the current wave of pending new 
regulations is unsustainable. This uncertain regulatory 
environment not only costs current jobs, but it also prevents 
new jobs from being created. The tangled web of rules impedes 
investment and too often leads to the decision not to invest, 
or companies simply invest overseas. Others roll the dice, 
hoping today's rules will change by the time their project is 
completed. Investments in energy efficient projects, mill 
modernization programs, and new biomass boilers already have 
been affected by rules such as Boiler MACT. Unfortunately, it 
is easier to see the jobs that are lost after the fact, but the 
greatest damage may be unknowable. The projects never built, 
the products never made, the jobs never created.
    Thank you for listening, and for your willingness to help.
    [The prepared statement of Mr. Krouskop follows:]





    
    Mr. Whitfield. Thank you. Mr. Papadopoulos, you are 
recognized for 5 minutes.

                 STATEMENT OF ARIS PAPADOPOULOS

    Mr. Papadopoulos. Mr. Chairman and committee members, my 
name is Aris Papadopoulos. I serve as CEO of Titan America, a 
cement manufacturer and concrete----
    Mr. Whitfield. Would you turn your microphone on?
    Mr. Papadopoulos [continuing]. United States employing over 
2,000 Americans. I presently chair the Portland Cement 
Association that represents 97 percent of U.S. cement capacity 
with nearly 100 manufacturing plants in 36 States and 
distribution in 50.
    Cement is to concrete what nails are to wood. It is the 
glue that holds together our bridges, roads, dams, schools, and 
hospitals. At $6.5 billion combined revenue, we are a 
relatively small industry, but without us, the entire trillion 
dollar construction economy would come to a halt. Without 
cement, our already deteriorating infrastructure would continue 
to degrade to unsafe levels, along with our communities and 
quality of life.
    The Great Recession hit our industry hard. Cement demand 
dropped in half. Profitability has been wiped out. Yet, we 
sought neither handouts nor bailouts. We cut costs, which sadly 
included more than 4,000 jobs. What remains are 15,000 well-
paying jobs, with average compensation of $75,000, and a higher 
presentation of minorities.
    This is a dynamic industry. In its century-long history, 
cement producers have demonstrated commitment to continuous 
improvement and environmental stewardship. Many of our 
facilities have existed for over half a century, and we have 
never seen any empirical data of the health impacts that Mr. 
Walke referred to. In fact, the only proof that EPA has 
presented are computer-generated models that only have helped 
to generate more fear.
    In the decade prior to this recession, we invested tens of 
millions of dollars in modernizing and expanding facilities 
with state-of-the-art technologies that significantly cut 
energy intensity. Today, the U.S. has a world class cement 
industry, which recycles 12 million tons a year of industrial 
and urban byproducts like tires, fly ash, and wood chips that 
would otherwise be land-filled; however, recent regulations put 
all of this at risk.
    In a time when our industry is crippled by recession, the 
EPA has bombarded us with multiple regulations that we believe 
both undermine economic recovery and damage the long-term 
environment. Several rules in particular pose immediate 
damage--danger to the industry. Referring to their acronyms, 
NESHAP, with a 2013 compliance deadline, and CISWI plus a 
companion to the definition of recycled materials threaten to 
destroy the industry's recycling success story.
    NESHAP would cause 18 cement plants to shut down during the 
next 2 years. This rule as written is technically and 
economically unachievable, in fact, setting standards demanded 
by no other country in the world, even advanced European 
countries. The net result would be reduction of domestic 
capacity. When the market demand recovers, it would be met by 
imported cement. This means losing thousands more American 
jobs. Furthermore, shifting production overseas to places that 
have far lower standards than ours increases emissions, 
emissions that EPA itself admits will eventually travel to and 
fall in the U.S.
    EPA needs to wake up and stop treating our industry as if 
we are utilities, realizing that we are not assured to return 
on capital, and production can move overseas. These regulations 
represent a hidden tax imposed on domestic production. PCA 
recently completed a study analyzing the impacts of EPA rules 
and concludes that NESHAP and CISWI rules impose a combined 
compliance burden of $5.4 billion in the next 4 years, equal to 
85 percent of the industry's total annual sales, while 
increasing production costs by 20 percent. NESHAP and CISWI 
would force almost 25 percent of U.S. plants to shut down. We 
could lose an additional 4,000 jobs. Assuming economic recovery 
through 2015, reduced capacity will raise foreign imports to 56 
percent of U.S. consumption.
    These EPA rules make investing in the U.S. unattractive for 
overseas. In the end, neither the economy nor the environment 
win. American jobs and investment are lost, while more 
pollutants are emitted offshore. Less recycling leads to more 
land-filling. Dependence on foreign cement follows the road of 
dependence on foreign energy. The combined effects of 
increasing global demand for construction materials and cement 
being more cumbersome to import than oil will mean that 
shortages and price volatility become more common. This could 
hurt the entire construction economy, with impacts on 
infrastructure, housing, commerce, and jobs.
    As to infrastructure, I would like to share with you some 
positive news. Recently lifecycle assessment research by MIT 
confirms that cement and concrete can play a key role in 
mitigating greenhouse gas emissions by building truly 
sustainable roads and structures. We are the battery in the 
sustainable infrastructure Prius. It follows that we would want 
to produce these strategic materials here in the U.S. to the 
benefit of both economy and environment.
    Congress needs to step up and take back legislative 
ownership by establishing win-win policies like those suggested 
by MIT's research, create a climate that encourages rather than 
discourages domestic investment by taking immediate action to 
address onerous regulations and place a near term moratorium on 
more rules. With construction sector unemployment near 30 
percent, Congress must craft legislation that replaces harmful 
regulations with policies that promote job growth, investment 
certainty, responsible environmental stewardship, and 
collaboration. This will revive private sector confidence, 
create good jobs for Americans, and restore economic 
prosperity.
    Thank you for this opportunity. I would be happy to answer 
any questions.
    [The statement of Mr. Papadopoulos follows:]





    
    Mr. Whitfield. Thank you, Mr. Papadopoulos. We appreciate 
the testimony of everyone on the panel, and Mr. Waxman has come 
in so I am going to recognize him for 5 minutes for his opening 
statement.

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

    Mr. Waxman. Thank you, Mr. Chairman, for recognizing me and 
for the courtesy of allowing me to give this statement out of 
the usual order.
    Mr. Chairman, I fear that what we are seeing is another--in 
a series of assaults on the Clean Air Act. Chairman Whitfield 
announced yesterday that after the recess we will consider 
legislation to delay implementation of the rules to reduce 
toxic air pollution from utilities, boilers, and cement plants. 
I think that would be a major setback for clean air. If we 
delay these requirements to clean up toxic air pollution, our 
children and many other Americans will suffer serious, and in 
many cases, irreversible harm.
    Toxic air pollution from power plants, industrial boiler, 
and cement plants include mercury, lead, which harm brain 
development in babies and children; arsenic, chromium and 
nickel, which cause cancer; and acid gases, which damage the 
lungs and contribute to asthma, bronchitis, and other chronic 
respiratory disease, especially in children and seniors. These 
facilities also emit particulate matter, which causes heart 
attacks, strokes, asthma attacks, hospital admissions, and 
premature death.
    And these are big sources of pollution. Power plants are 
the largest source of mercury air pollution in the country. 
Boilers are the second largest source of mercury air pollution. 
And guess what? Cement plants are the third largest source of 
mercury air pollution in the country.
    A few weeks ago when this committee reported legislation to 
repeal EPA's authority to reduce carbon pollution, my 
Republican colleagues argued that they weren't trying to weaken 
the Clean Air Act. They weren't trying to block regulations to 
stop toxic emissions, and they really do support clean air.
    The chairman of the full committee said, and I quote, 
``EPA's ability and obligation to regulate and mitigate air 
pollutants like particulates that cause soot, ozone that causes 
smog, carbon monoxide, lead, asbestos, chloroform, and almost 
200 other air pollutants would be protected and preserved.''
    That was last month. This month, they are directly 
targeting EPA's ability to protect the public from these very 
pollutants.
    Let us be clear. Delaying these rules will hurt a large 
number of people, especially children. Cleaning up cement 
plants will avoid 17,000 cases of aggravated asthma and 1,500 
heart attacks each year. Cleaning up boilers will avoid 2,600 
and 6,600 premature deaths, 4,100 heart attacks, 4,400 hospital 
and emergency room visits each year. And cleaning up power 
plants will avoid somewhere between 7,000 and 17,000 premature 
deaths, 11,000 heart attacks, and 120,000 cases of aggravated 
asthma each year.
    For every year these rules are delayed, thousands of 
Americans will die prematurely. Each year there will be over 
150,000 cases of aggravated asthma, and many of them children. 
There will be 1.3 million additional lost days of work.
    It has been 40 years since we adopted the Clean Air Act, 
and the three industries that are the largest sources of toxic 
air pollution in the country still don't have to use readily 
available technology to clean it up. American families have 
waited long enough.
    Over the years when I worked on clean air, I have heard 
complaints about the costs of regulation more times than I can 
count, and every time, once we set the standards, industry 
applied American ingenuity and technical know-how and gets the 
job done, almost always below the projected costs. I have every 
confidence that they will do it again here.
    But that won't happen if Congress repeals or blocks the 
Clean Air Act and stops EPA from doing its job. Some of these 
regulations have been delayed over a decade, and it is time 
that we let EPA get on with its job.
    I yield back the balance of my time, and thank you so much, 
Mr. Chairman, for allowing me this opportunity to make my 
statement.
    Mr. Whitfield. Thank you, Mr. Waxman. I think the last 
amendments to the Clean Air Act were 1990, and I do think 
Congress has a responsibility to review these acts and even 
make changes when necessary, and one of the reasons we have had 
these hearings is to try to get the testimony of different 
groups to see what they think about it.
    I would ask Mr. Fanning and Mr. Earley, just to start off 
with, Mr. Waxman, who is quite familiar with the Clean Air Act, 
said that technology is readily available to meet this utility 
MACT standard, and also said that historically industry gets 
the job done below anticipated costs. Would you all react to 
that, those two statements?
    Mr. Earley. Yes, Mr. Chairman, a couple of observations.
    First of all, the Clean Air Act amendments of 1990 gave us 
tremendous flexibility. The concept of emissions allowances 
gave us the opportunity to schedule the addition of new 
environmental controls over a timeframe that made sense to 
minimize costs. This rule does not give us that flexibility. It 
is on a very tight timeframe that is going to drive costs up 
and actually strain the ability to actually install the 
equipment because of limitations on people and equipment and 
the like.
    The second issue is around the availability of technology. 
As I mentioned in my testimony, with respect to acid gasses, 
the EPA assumes that dry sorbent injection technology will 
achieve the standards that they have set, and yet, they admit 
that it is based on one 3-week study on one particular type of 
boiler. Well, in our industry there are dozens of different 
boiler types and when you start injecting materials into the 
boiler, it does have an impact on how the system operates. We 
have no assurance that that technology is going to work. I 
don't think it is appropriate to bet millions or billions of 
dollars on a technology that may or may not work. It doesn't 
make sense.
    That is why time will give us a chance to ensure whether 
that technology does, in fact, work, or whether those 
technologies are not going to work and we have to look for 
something else.
    Mr. Whitfield. Mr. Fanning?
    Mr. Fanning. Thank you, Mr. Chairman.
    These standards that are proposed are unlike any other that 
has been proposed, and unlike acid rain, NOx, CARE rule, the 
Clean Air Interstate rule, these standards require compliance 
with unit specific emissions by a specified date, and that date 
would appear to be unreasonable.
    When you think about the evaluation period that we have for 
this rule, 60 days for a 1,000 page proposed regulation, with 
1,000 pages of underlying documentation, some of which we 
haven't even seen yet, it is not clear that the science being 
proposed will, in fact, work. There are significant 
disagreements that we have, nod I must say that Southern 
Company is by far the leader in our industry in proprietary 
research and development. We have deployed over $10 billion--
will have deployed over $10 billion of environmental control 
equipment. We have developed our own environmental control 
equipment that performs at levels well in excess of industry 
standards and is able to be deployed 10 to 20 percent cheaper 
that what our peers are able to do.
    We don't believe that some of the levels that are proposed 
are workable, and I think just following on what Tony said, I 
think that when you consider what the EPA has proposed in terms 
of what will be required as a result of this rule, 24,000 
megawatts of scrubbers, I think the number will be more like 
80. They have a very low number for what might be the 
retirements, and therefore will have to replace that generation 
to provide reliability for the benefit of our customers. We 
think that number is going to be 70 to 80,000. So this is a 
very different landscape.
    Mr. Whitfield. OK, thank you, Mr. Fanning.
    Mr. Dingell, I yield to you.
    Mr. Dingell. You are most courteous, Mr. Chairman.
    This question, just yes or no. To our last two witnesses 
who commented here, Mr. Fanning and Mr. Earley, what you are 
really telling us is you need more time to see to it that the 
requirements that are imposed upon you will, in fact, work, and 
give you a solution that's in the public interest as opposed to 
just big expenditure money. Is that right?
    Mr. Earley. Yes, sir.
    Mr. Dingell. Thank you. I thank you, Mr. Chairman, for your 
courtesy.
    Mr. Whitfield. Thank you. Mr. Papadopoulos, in your 
testimony you had indicated that you would anticipate that 
cement factories would actually close down if this rule is 
implemented? Is that the case?
    Mr. Papadopoulos. That is correct, Mr. Chairman, especially 
particularly older plants----
    Mr. Whitfield. Excuse me, bring it closer to you.
    Mr. Papadopoulos. Yes, particularly older plants that 
cannot really justify these large investments would be the ones 
that close down. And plants that don't have the----
    Mr. Whitfield. How many would that be?
    Mr. Papadopoulos. Well, we are talking about 18 plants in 
just one room, and probably another two or three plants from 
the recent rule on waste, CISWI rule.
    Mr. Whitfield. Well, my time is expired so I will recognize 
the gentleman from Illinois for 5 minutes.
    Mr. Rush. I thank the chairman.
    Mr. Walke, I think it is, Mr. Fanning in his testimony is 
being quoted as questioning the motivation of your group--Mr. 
Bradley. Mr Bradley, Mr. Fanning in his testimony is being 
quoted as questioning the motivation of your group. He said, 
reportedly said that quote, ``Some companies see a chance to 
increase their bottom lines when they reduce reliability and 
higher costs that EPA regulations would produce.'' Can you 
speak to the competitive advantage being realized today by 
companies generating electricity from coal without any 
environmental control? Sir, why do your companies support EPA 
regulations to restrict emissions from generating plants? Are 
you all reaping a windfall here?
    Mr. Bradley. We've known that these regulations have been 
coming for over 10 years. The vast majority of companies have 
been planning ahead. The utility industry across the board has 
taken measures in advance. As I indicated, 60 percent of the 
capacity of the coal capability is already retrofitted with NOx 
emissions. It has been widely deployed. The issue around direct 
sorbent injection, I think, is a little outdated. We have seen 
in the EPA's database--this is to control acid gasses--dozens 
of sources that have been tested, dozens of plants that have 
deployed the technology, and we have been real familiar with a 
couple of plants that have tested the technology and believe it 
is going to be the key to compliance.
    The baghouse fabric filter undertakings are going to be 
expensive, but they are doable. We think a lot of the 
technology can be deployed in 2 to 3 years. But I have to 
underscore the fact that every plant is different. Every plant 
has to be treated with specific engineering and design 
capabilities.
    When it comes to reliability and reserve margins, we think 
the place to go to assess that is the North American Electric 
Reliability Council. At least in the southeast, they have 
projected very healthy reserve margins over the course of the 
future, 2014 to 2019. Given the history and the innovation that 
the industry has brought to the table in the past, we believe 
that there is no reason to introduce legislation to delay the 
implementation of the Utility Toxins Rule.
    Mr. Rush. Thank you.
    Mr. Papadopoulos, it has been reported here, and I have a 
copy of an article from the News and Observer, I guess this is 
a local paper, about your company's ``ill-advised resort'' to 
going to court. Are you familiar with what they call a SLAPP 
suit?
    Mr. Papadopoulos. I am sorry, Congressman, I didn't 
understand your question.
    Mr. Rush. I said are you familiar with what they--what is 
being--what is termed a SLAPP suit?
    Mr. Papadopoulos. No.
    Mr. Rush. All right. A SLAPP suit is a suit by which a 
company uses litigation to try to chill public protest against 
a company or a project. I want to bring to your attention a 
report that your company sued a pediatrician, Dr. Hill, and a 
mom, Ms. Kayne Darrell, over statements they made opposing a 
proposed Titan plant near Wilmington, North Carolina, and as I 
understand it Ms. Darrell repeated allegations that had been 
published in the press and Dr. Hill said that some people would 
get sick and some would die if the plant was built, and they 
made the statements at a county commissioner's meeting a year 
earlier, and at the time they spoke Titan's permit application 
said the plant would emit almost 1,500 tons of SO2, 
over 2,000 tons of NOx, and about 350 tons of fine 
particulates.
    What do you say about this suit?
    Mr. Papadopoulos. Honestly, I can't understand what you are 
saying, Congressman. What is your question? Maybe----
    Mr. Rush. Well, my question is, Do you believe in the 
Constitution?
    Mr. Papadopoulos. Excuse me?
    Mr. Rush. Do you believe in the Constitution?
    Mr. Papadopoulos. Of course.
    Mr. Rush. Do you support the Constitution?
    Mr. Papadopoulos. Did you ask if I swear to the 
Constitution?
    Mr. Rush. Do you support the Constitution?
    Mr. Papadopoulos. Support, yes.
    Mr. Whitfield. Your time is expired.
    Recognize the chairman of the committee, Mr. Upton, for 5 
minutes.
    Mr. Upton. Thank you, Mr. Chairman. Mr. Fanning and Mr. 
Earley, I guess Mr. Earley, in your testimony you talked about 
if these utility MACT rules--if the timing stays 60 days to 
review, begin to see and implement 1,000 pages of regulations. 
You indicated in your testimony that you would be probably 
forced to retire nearly one-third of your plants? Is that 
accurate?
    Mr. Earley. Yes, Mr. Chairman. We estimate between 20 and 
30 percent of our capacity will have to be retired, if these 
rules stay as they are.
    Mr. Upton. And how fast would that have to occur?
    Mr. Earley. That would have to happen over the next 4 
years. There would not be enough time to build new capacity to 
replace it, given the time table of this bill.
    Mr. Upton. So we would have to purchase power from somebody 
else?
    Mr. Earley. We would be forced to purchase power on the 
open market.
    Mr. Upton. And how easy is that to do?
    Mr. Earley. Well, if the power is available, it is easy to 
do. What will happen is it will drive the price of electricity 
on the market. The laws of supply and demand can't be repealed, 
and we will be paying more and our customers will be paying 
more for electricity.
    Mr. Upton. And how much more do you think that would be?
    Mr. Earley. Our estimate is that the overall cost to our 
customers is in the range of 25 percent increase if these 
regulations are implemented.
    Mr. Upton. So as we come from Michigan where we are already 
getting pounded with higher unemployment, this would add to 
those costs in a pretty dramatic way?
    Mr. Earley. Absolutely, Mr. Chairman, and remember, it is 
on top of environmental controls that we already have installed 
that our customers are paying for, and the multiple regulations 
that are in the pipeline which will add to these costs. So it 
will be a significant burden for our customers that are 
challenged and are struggling to recover from the Great 
Recession.
    Mr. Upton. Mr. Fanning, is that about the same case for 
Southern Company, too?
    Mr. Fanning. Yes, sir, we estimate the economic impact 
would be an increase in prices of about 25 percent for the 
southeast, and it would impair reliability potentially, which 
hurts economic growth.
    Mr. Upton. Mr. Papadopoulos, some of us suggest to clean it 
up, some of us would say these regs come in, we will move them 
out. Where is your competition for cement? What--who--what 
other countries compete, Mexico and China? Are they your prime 
competition?
    Mr. Papadopoulos. Back when we had----
    Mr. Upton. I don't know if your mic button is on.
    Mr. Papadopoulos [continuing]. When we had a very strong 
construction industry, let us say in 2005, the U.S. was 
importing about one-third of its cement needs, and the 
countries it was coming from, Asia was a big importer, China, 
Thailand, Korea, countries in Latin America, Mexico----
    Mr. Upton. What type of regulations do they have on 
producers of cement in Mexico and China?
    Mr. Papadopoulos. Well, they are moving but they are 
decades behind us.
    Mr. Upton. Decades behind us.
    Mr. Papadopoulos. Decades behind us.
    Mr. Upton. And what will the--if you kept all your 
production in the U.S., what will the additional costs be?
    Mr. Papadopoulos. Well, as we pointed out here through our 
study is to comply with just a couple of these--and we don't 
know if this is the end of the pipeline. This is a big 
uncertainty in our industry and probably other industries. It 
is going to take $5.5 billion, 85 percent of our annual sales. 
It is, on the other hand, not even going to help our costs. It 
is actually going to increase our costs by 20 percent, making 
us even less competitive with imports from overseas.
    Mr. Upton. Mr. Fanning, could you walk me through the 
``Frankenplant'' exercise that you cited in your testimony?
    Mr. Fanning. I am sorry, could you state it again?
    Mr. Upton. The ``Frankenplant''?
    Mr. Fanning. Oh, yes, sir. So a lot of the design 
characteristics that would follow the implementation of a MACT 
for different kids of emissions are designed to provide a MACT 
for one and then another and then another. It does not take 
into account the consolidated impact of all the emissions and 
therefore a single design.
    What they would do is pull together the maximum available 
control technologies for each different design, and therefore 
create a plant, frankly, that may not be workable. That is why 
we use the phrase ``Frankenplant''.
    Mr. Upton. Mr. Kempf, I confess I am a Michigan man.
    Mr. Kempf. That is OK.
    Mr. Upton. I will be in South Bend tomorrow. That is where 
my plane comes in. I vote for the Irish in a lot of different 
ways. Great university. We have a very good rivalry, as you 
know, and as I visit some of my universities, Western Michigan 
University as an example, I visited their power plant.
    So you have spent $20 million on your facility in the last 
10 years?
    Mr. Kempf. Correct, that was our activity to achieve the 
original MACT that was promulgated.
    Mr. Upton. And it does not comply with these regs?
    Mr. Kempf. Well, the equipment that we purchased, obviously 
we sought a margin of compliance below the limit so we are in 
the '04 rule, but the new limits that are proposed are below 
the guarantees that we achieved from the manufacturers of the 
equipment.
    Mr. Upton. Thank you, and my time is expired.
    Mr. Whitfield. Gentleman's time is expired. Chair now 
recognized Chairman Emeritus Waxman for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    There was testimony, Mr. Fanning told us that ``The major 
flaw in EPA's analysis is that it makes overly optimistic 
assumptions about the effectiveness and availability of certain 
control technologies,'' specifically, dry sorbent injection, or 
DSI. Mr. Earley's testimony stated that EPA makes its 
determination about DSI based on one 3-week trial. Mr. Bradley, 
what can you tell us about DSI?
    Mr. Bradley. I can tell you that I am not exactly sure how 
EPA judged its estimate on DSI. I can also tell you that in the 
NEDS database, you can look and see that dozens of units have 
been retrofitted with direct sorbent injection. These typically 
are smaller units, but it is a key component to achieving 
compliance with the standards.
    Mr. Waxman. So it is already in use?
    Mr. Bradley. Absolutely.
    Mr. Waxman. I see. It is my understanding that the 
industry's cost assumptions and projected retirements depend on 
DSI not being available as EPA projects. Could you elaborate? 
Is that----
    Mr. Bradley. Certainly. I think there have been a variety 
of analyses looking at this situation, prior to EPA proposing 
the rule. Now that the rule is out and the standards are set, 
and the standards are not as aggressive as I anticipated--this 
is for mercury, for PM and for acid gases--and they introduced 
quite a bit of flexibility that I think a lot of folks in the 
industry didn't anticipate. When you take all that into 
account, I think you are going to see the costs are going to be 
lower than what has been projected, and certainly the 
retirements will be less.
    I think it is important to recognize that NERC looked at 
retirements prior to EPA's rule coming out, and their 
projection is in the range of 15 gigawatts. If you look at 
EPA's estimate plus what they saw happening naturally due to 
economic drivers like low gas prices, they are pretty much in 
the same range. But you know, it probably is going to be on the 
lower side of the ranges that have been proposed previous to 
the rule.
    Mr. Waxman. Well, Southern Company disagrees with you. Now 
that we have heard from Southern on this topic before today, in 
2004, Southern weighed in on EPA's first attempt to reduce 
mercury from power plants. They said that mercury control 
technologies were not commercially available and that the 
industry couldn't meet standards based on such controls. In 
fact, Southern official Larry Monroe stated, and I want to 
quote him, ``With straining to do it, it is in the 2015 to 2018 
timeframe that industry can get there.'' Three years later, 
without any EPA requirements to use mercury specific control 
technology, it was already in use on 11 units. Today, almost 
100 units are using the technology. These standards could and 
should have been adopted years ago, and if industry hadn't said 
the cleanup couldn't be done, we would have already done it.
    Mr. Walke, can you explain how these rules have been 
delayed? Why have we seen delay after delay?
    Mr. Walke. Yes, Congressman Waxman. The rules were delayed 
in the 1990s due to lateness in carrying out steps that 
Congress had demanded in the 1990 amendments to report to you 
all about the dangers of toxic pollution from power plants. But 
then EPA Administrator Browner in 2000 made a finding that 
should have required those standards to be adopted--to go into 
effect about 4 years later. Instead, the Bush administration 
did a total U-turn and adopted a rule that was struck down in 
2008, consuming the entire 8 years of its two terms, preventing 
any regulation of arsenic, lead, and the rest from power 
plants. In fact----
    Mr. Waxman. Rather than get going and getting this 
accomplished, we saw delays. Industry pushed for delays.
    Mr. Walke. I have to say there was strong pressure from 
some of my co-panelists to prevent EPA from adopting those 
regulations, and the Bush administration succumbed to that 
pressure and decided to do that.
    Mr. Waxman. And the courts rejected their arguments.
    Mr. Walke. Not only did a court with Republican and 
Democratic appointees reject the arguments, but in fact they 
quoted Lewis Carroll's Alice in Wonderland for the absurdity of 
the legal argument that the Bush EPA had relied upon in 
unanimously rejecting that rule.
    Mr. Waxman. Well, at last EPA's proposed a defensible 
standard. It is consistent with the Clean Air Act. It would 
save thousands of lives, prevent brain damage in untold numbers 
of children. I don't think we should be shocked to see the 
industry here today asking for as long as 10 years delay. These 
rules have been delayed long enough and industry has had plenty 
of notice. We must not deny our children these protections any 
longer.
    Thank you, Mr. Chairman.
    Mr. Whitfield. The gentleman from Texas, Mr. Barton, is 
recognized for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman.
    Let me say it at the beginning that I will stipulate that 
mercury is a poison and a pollutant and SO2 is a 
pollutant and these new standards, if adopted, would reduce 
those pollutants. I will stipulate that.
    Having said that, it is a puzzlement to me that if you look 
at the indices for air quality in the United States, according 
to the criteria of pollutants that are covered under the Air 
Quality Act, our air quality is improving almost everywhere in 
the country. In the areas it is not, it is primarily places 
like Southern California where you have just a tremendous 
number of people and huge number of mobile sources and a 
geography that traps the pollution from tailpipes, and it is 
just very, very difficult to clean that up.
    So you know, if you look at the facts and then you look at 
these proposed standards, I will even stipulate that they will 
make the improvement in the pollution control. The question is, 
Is it worth the cost? And if you want to know what the cost is, 
just look at what happened at the TVA yesterday. TVA announced 
a settlement with EPA that is going to close 18 of their coal 
boilers, close one of their coal-fired power plants, reduce the 
amount of electricity capacity by 16 percent. They also agreed 
to spend an additional $5 billion in the next few years on the 
plants they are not closing and the boilers they are not 
closing.
    If we adopt these standards, that is what you are going to 
see across America. The other plants are just going to close 
because it just doesn't make sense to spend the money, and you 
don't get the environmental--I stipulate you get the cleanup in 
terms of lowering emissions, but there is not a real health 
benefit.
    Now I want to apologize to you, Mr. Wade--Walke--Wade----
    Mr. Walke. Walke, Congressman.
    Mr. Barton. Walke, I am sorry. I am not being facetious.
    Mr. Walke. No, sir.
    Mr. Barton. We tried to get the EPA here and they wouldn't 
come, so you are the next best thing, OK?
    Mr. Walke. I am not sure how I feel about that, Congressman 
Barton, but----
    Mr. Barton. It is not personal, I assure you.
    Mr. Walke. I will not take it personal.
    Mr. Barton. But you were saying----
    Mr. Rush. Will the gentleman yield just for a moment?
    Mr. Barton. Very briefly.
    Mr. Rush. I see the gentleman refer to we tried to get the 
EPA to come. I just think that that is consistent with what we 
have been experiencing in the last couple months. We have given 
the EPA proper notice, and I know they have got a lot of 
employees over there, but they have very few employees who have 
this kind of expertise and who are supervisors who--that is the 
reason why Chairman Waxman and I----
    Mr. Barton. They have had since November, the first Tuesday 
in November to get ready, Mr. Rush, and we have had a number of 
hearings. I would encourage you to encourage them to show up so 
we don't have to----
    Mr. Rush. With all due respect to the emeritus and the 
Members on our side, we sometimes--we don't get notice until 
the last minute, so we have to scramble and we are here in the 
same building and operating in very close contact with you, and 
we have to----
    Mr. Barton. Reclaiming the time, and I would ask unanimous 
consent for 3 additional minutes, or at least 2. I don't know 
how long Mr. Rush took, but I have some pretty important 
questions I would like to ask.
    Mr. Rush. I have no objection.
    Mr. Whitfield. Without objection.
    Mr. Barton. OK. Now let us go back to you, Mr. Walke.
    In your testimony, you say that these standards would save 
17,000 lives in terms of premature deaths a year, I think. Is 
that not correct?
    Mr. Walke. That is taken from EPA's projecting that up to 
17,000.
    Mr. Barton. You stipulate it is a number you got from 
somewhere else?
    Mr. Walke. Yes, sir.
    Mr. Barton. I want to ask every private sector individual 
here, I will start with Mr. Fanning. How many cases in your 
company were there last year of mercury poisoning reported?
    Mr. Fanning. None that I know of.
    Mr. Barton. Does anybody know of any mercury poisoning 
because of emissions from any of your plants? Do you know how 
many there were in the country last year? Zero. What about 
SO2, any of you have any history in your plants of 
SO2 poisoning? We cut SO2 emissions by 50 
percent in the last decade, and this, if implemented, cuts it 
another 50 percent but takes it from four million tons a year 
annually to two million.
    Now Mr. Walke, again, it is not your statistic, but it is 
reported all the time. There is absolutely nothing to back it 
up.
    Mr. Walke. Congressman Barton, let me----
    Mr. Barton. Do you know how many--let me ask you. How many 
pounds of mercury is omitted from an average 500 megawatt coal 
plant a year?
    Mr. Walke. Congressman Barton, those are attributed to 
deadly soot pollution----
    Mr. Barton. Do you know the number?
    Mr. Walke [continuing]. Not mercury, so I want to be clear 
on the basis for my claim. It is particulate matter that kills 
people. EPA is not claiming----
    Mr. Barton. All right, then let us see that backed up.
    Mr. Walke. OK, I would be happy to, and that is a great 
thing for this committee to convene a hearing on with the 
National Academy of Science----
    Mr. Barton. Every 500 megawatt coal-fired power plant 
produces 3 pounds of mercury a year, 3 pounds. According to Mr. 
Walke's testimony, these standards reduce that 91 percent. 
Well, that is great. So you go from 3 pounds a year per plant 
to .3 pounds per plant, but that is per year.
    Now to actually cause poisoning or a premature death, you 
have to get a large concentration of mercury into the body. I 
am not a medical doctor, but my hypothesis is that is not going 
to happen. You are not going to get enough mercury exposure or 
SO2 exposure or even particulate matter exposure. I 
think the EPA numbers are pulled out of the thin air, and I am 
going to ask that we send an official document to EPA. Let us 
back them up, because the entire premise for going forward with 
these standards is that you get such a tremendous ratio of 
benefits to cost because they claim, according to Mr. Walke's 
testimony, which he is an honest man and he has got it from 
somewhere, is $140 billion annually. But if you really don't 
have the benefit because you are not having the medical 
negative, but you really have the cost--and if you don't think 
the costs are real, just look at how many factories are closing 
and going to Mexico and China. Look at the population of Mr. 
Dingell's home city, Detroit, Michigan. It has fallen by 40 
percent, I think, in the last 20 years. If you don't think 
those are real--so if we are going to have a real debate about 
these standards, Mr. Chairman, we need to start getting some 
real numbers from the EPA and getting the EPA up here--if it 
takes Mr. Rush's help, Mr. Dingell, Mr. Waxman's, because if 
their benefits are not real and the costs are real, we are 
absolutely wrong to force these standards.
    And with that, I have overextended even my extended time, 
and I yield back.
    Mr. Whitfield. Well thank you. I might mention to the 
gentleman that there was an article in University of Michigan 
Law Review recently not too long ago that was quite critical of 
the method used by EPA in calculating health benefits.
    Mr. Barton. That is why we need the EPA here.
    Mr. Whitfield. At this time I recognize the gentleman from 
Michigan, Mr. Dingell, for 5 minutes.
    Mr. Dingell. Mr. Chairman, I thank you and I thank you for 
your courtesy in yielding to me earlier. I would like to 
welcome my old friend Mr.--constituent friend. He heads a very 
fine public spirited company and I would like to ask him this 
question. Is there a difference between what DTE has been able 
to do at several power plants in my district? I know that you 
have been making significant investments as you referenced in 
your testimony to upgrade the environmental performance of 
these facilities, and I know that there are some problems in 
what is being contemplated under the proposed rules. Is that a 
correct statement?
    Mr. Earley. That is correct.
    Mr. Dingell. All right. Now tell us what the differences 
are between EPA and DTE, and what it is they are requiring you 
to do and what it is you believe would be in the best economic 
interest of the company, and if it will repair industry jobs in 
Michigan.
    Mr. Earley. Well, Mr. Chairman, the prior Clean Air Act 
amendments of 1990 gave us tremendous flexibility in terms 
about timing and the ability to sequence adding equipment by 
the ability to go out and buy allowances on the market. So as 
you know, we have spent several billion dollars at our Monroe 
power plant, but we didn't have to build all of the equipment 
at once. We were able to phase it in over time.
    This rule will require every single unit on our plant to 
comply by a specific date. That will drive the costs up and it 
will force us, in many cases, up to 25 percent of our coal-
fired power plants will have to be shut down because it will 
just not be economic.
    The other point that I know you are aware of, we talk about 
imposing these requirements on utilities, we are imposing on 
our customers. For a utility, this is an opportunity for 
investment. Economically, we are not hurt by it as a regulated 
utility, but our customers----
    Mr. Dingell. What you are telling us they are forcing you 
to make investments that are not in the best interest of your 
customers for a momentary gain which, if you could go forward 
with your regular construction plans and improvement plans you 
would not make and you would serve better your customers and 
produce just as much clean air, but at a much lower energy cost 
and at a much lower emission of CO2? Is that right?
    Mr. Earley. That is absolutely correct.
    Mr. Dingell. Very good. I would like to have you submit a 
bit more on that answer so that we have that in the record.
    Now if--let us see. As I understand, then, that there are 
several older electrical generating facilities that are 
scheduled to be shuttered in the next decade, and as you have 
indicated, that that shuttering will be hurried up and you will 
be compelled essentially to move instead of to nuclear, which 
you are contemplating doing, moving to natural gas combined 
cycle generating systems. Is that right?
    Mr. Earley. Yes, sir.
    Mr. Dingell. And that constitutes a complete change in the 
investment plans that you have in the company, is that right?
    Mr. Earley. Yes, sir.
    Mr. Dingell. Very good. Now, these questions for Mr. Walke 
and Mr. Krouskop. It is my understand that EPA requested 
additional time for the rule. Is that right?
    Mr. Krouskop. For the boilers rule, yes, sir.
    Mr. Dingell. All right, and you agree with that statement, 
Mr. Earley?
    Mr. Earley. Yes.
    Mr. Dingell. Has industry filed a motion for a stay on the 
Boiler MACT?
    Mr. Krouskop. We are continuing to work both from the 
perspective with EPA for reconsideration, requesting a stay, 
and also are considering from a judicial standpoint what are 
options are for requesting a stay.
    Mr. Dingell. I have been hearing that this would be a good 
solution to the problem, that EPA would not oppose that kind of 
step and that that would help us resolve the problem that lies 
before us. Am I correct in that?
    Mr. Krouskop. I think that it is generally correct. I think 
EPA certainly indicated they needed quite considerable 
additional time to get the rule right. At the same time, 
though, there are some elements of the Boiler MACT rule which 
EPA has been resistant to correcting the way we believe they 
are, and that really is around the health-based compliance 
alternative, which is part of the Clean Air Act, and we believe 
that is appropriate.
    Mr. Dingell. Thank you. I have got 9 seconds to ask this 
question, Mr. Earley. So we can say here, Mr. Earley, as a 
result of your testimony that the requirements of Utility MACT 
go beyond your facilities and your jobs. In other words, there 
is a potential for impacts to go well beyond the electrical 
generating sector and to compel you to make business decisions 
that may be well beyond and well different than what you had 
made that may not be either in the interest of your consumers 
or in the interest of the public and might very well result in 
wasteful use of energy, and of capital. Is that a correct 
statement?
    Mr. Earley. That is correct, Chairman.
    Mr. Dingell. Thank you, and I thank you, Mr. Chairman.
    Mr. Whitfield. At this time I recognize the gentleman from 
Illinois, Mr. Shimkus for 5 minutes.
    Mr. Shimkus. I thank you, Mr. Chairman. I am going to go 
quickly, too, to get through my questions. We wanted the EPA 
back here again. We had them here yesterday in coal combustion 
waste. There's a President Executive Order that says all the 
new regulations have to comply with an economic analysis. What 
we found out yesterday in the hearing is just even though EPA 
does an economic analysis, they don't translate to that job 
impact. So if there is an economic analysis there is going to 
be a job impact, so we welcome EPA to hopefully coincide with 
the President Executive Order doing an economic and a job 
analysis, because that is what this is about, complying without 
destroying jobs.
    First thing, Mr. Bradley, have you ever designed a power 
plant?
    Mr. Bradley. Have I ever denied?
    Mr. Shimkus. Designed.
    Mr. Bradley. Designed, no.
    Mr. Shimkus. Sited?
    Mr. Bradley. No.
    Mr. Shimkus. Built?
    Mr. Bradley. No.
    Mr. Shimkus. Raised capital to build one?
    Mr. Bradley. No.
    Mr. Shimkus. Conducted a payroll for the power plant?
    Mr. Bradley. No.
    Mr. Shimkus. Provided healthcare benefits for the 
employees?
    Mr. Bradley. No.
    Mr. Shimkus. OK, thank you. In your written testimony on 
page 4, you state that Constellation recently installed a major 
air quality control system at its Brandon Shore facility, and 
that construction was completed in 26 months. Now time is one 
part of this debate, it is a key issue in implementation. Is 
that an estimate? That construction took a little over 2 years, 
is that accurate?
    Mr. Bradley. The construction itself took 26 months.
    Mr. Shimkus. And I would turn to and ask for unanimous 
consent to put into the record an article that states that that 
construction was at least a 3-year construction. So I would ask 
you to re-look at that, because I don't think that is correct 
in your testimony.
    [The information follows:]





    
    Mr. Bradley. I can provide you with more----
    Mr. Shimkus. I would be happy to see whatever documentation 
you have. The company says it was a 3-year construction, so 
they dispute your opening statement.
    Mr. Fanning and Mr. Earley, what happens if there is a race 
to build in this 3-year timeframe on cost of equipment, metal, 
employees? What happens to the overall cost of these projects?
    Mr. Fanning. Well, they go up dramatically.
    Mr. Shimkus. Dramatically, three-fold, four-fold?
    Mr. Fanning. Sure.
    Mr. Shimkus. And what happens to the cost to the consumer? 
What are you going to have to do?
    Mr. Fanning. Raise prices.
    Mr. Shimkus. Does anyone dispute that? Mr. Earley, do you 
dispute that?
    Mr. Earley. No, I agree with Mr. Fanning on that.
    Mr. Shimkus. OK, let me go to Mr. Kempf. I, too, have great 
respect for the institution of Notre Dame. I am a Missouri 
Lutheran. Hopefully I try to be devout--I am being serious 
here.
    In your opening statement, you say that the EPA has not 
justified by corresponding environmental health protections 
from reduction of hazardous air pollutants. So you are staking 
Notre Dame's institutional position and it is very similar to 
the comments by the Chairman Emeritus Barton on the whole 
mercury debate, that 2 pounds versus .2 pounds, there is no 
mercury poisoning reported last year. Aren't you staking the 
university's position that there--these have, as you say, is 
not justified by corresponding environment and health 
protection from reduction of hazardous air pollutants?
    Mr. Kempf. I don't know that I am the person who can make 
that statement for the whole institution. I think our concern 
is that we want to make sure that----
    Mr. Shimkus. But you are making it for this--in this 
testimony today----
    Mr. Kempf. Correct.
    Mr. Shimkus [continuing]. As the director of utilities.
    Mr. Kempf. We are looking for a fair and balanced 
regulation that we can achieve at a reasonable cost.
    Mr. Shimkus. And I think that is part of this debate. Cost 
benefit analysis, again, we welcome EPA to justify the loss of 
jobs for negligible toxic emittent benefits. Negligible, zero. 
Now, we could talk with Mr. Walke on particulate matter, but we 
are using particulate matter to address toxicity. EPA is not 
addressing toxicity. All this debate is on PM.
    Mr. Walke, I don't want to go down this route, but you 
raised it in your opening statement. You are concerned about 
mercury contamination in the unborn child, is that correct? 
That is part of your opening statement?
    Mr. Walke. That was.
    Mr. Shimkus. Does the NRDC have a position on abortion?
    Mr. Walke. Not to my knowledge.
    Mr. Shimkus. And you know that is the destruction of--I 
will use the pro-choice vocabulary--that is a fetus, right? An 
unborn child is a fetus. You are concerned about the fetus and 
mercury poisoning, but NRDC doesn't have a position on the 
protection of a fetus on abortion? Is there a conflict here 
between life and health?
    Mr. Walke. I don't think there is a conflict, but----
    Mr. Shimkus. I think there is a huge conflict, and I 
would----
    Mr. Walke. Fetus--neurotoxicity by mercury poisoning----
    Mr. Shimkus. I would say that if NRDC is concerned about 
mercury poisoning, then they ought to be concerned about the 
destruction of human life in the process of abortion.
    I yield back my time.
    Mr. Whitfield. Thank you. Mr. Gonzalez, you are recognized 
for 5 minutes.
    Mr. Gonzalez. Thank you very much, Mr. Chairman. I have 5 
minutes, and we have so many witnesses so I am going to employ 
the John Dingell method, and that is just a yes or no answer. 
We will start with Mr. Fanning. Do you believe that the Clean 
Air Act should be repealed? I mean, let us just forget about 
it. Let us just go straight to it. Is it relevant? Do we need 
it? Should it be repealed? Yes or no.
    Mr. Fanning. No.
    Mr. Earley. No.
    Mr. Bradley. No.
    Mr. Kempf. No.
    Mr. Walke. No.
    Mr. Krouskop. No.
    Mr. Papadopoulos. If repeal means upgrading it, yes.
    Mr. Gonzalez. Are you for repealing it, just repealing it?
    Mr. Papadopoulos. The Act is functional.
    Mr. Gonzalez. See, you are an interested witness and I am 
leading you, so it is a yes or no answer.
    Mr. Papadopoulos. I am sure going to, thank you.
    Mr. Gonzalez. Are you for repealing the Clean Air Act?
    Mr. Papadopoulos. I am for replacing it with something 
more----
    Mr. Gonzalez. OK, you are for repealing, then you--that is 
good. That is an honest answer. You are for repealing the Clean 
Air Act. Now I am assuming that you said that--those that 
answered no, is that it is still relevant and that EPA has the 
responsibility to protect the public's health, and this is one 
way of doing it. Should we disregard a rule that is promulgated 
by EPA, simply based on the fact that it does add some cost to 
protect the public's health? Yes or no, and we will start with 
Mr. Fanning.
    Mr. Fanning. You can't disregard it, but it needs to be 
modified. The rule as proposed doesn't work from a timing 
standpoint, first to understand what is in the rule, and 
secondly to comply.
    Mr. Gonzalez. I am actually going to get into that. I just 
want general propositions so that we can maybe agree on some 
things here.
    Mr. Earley. I think as a general proposition as in cost 
alone wouldn't justify, but there has to be benefits that are 
consistent with the costs.
    Mr. Gonzalez. Mr. Bradley?
    Mr. Bradley. I agree with my colleague.
    Mr. Kempf. I would agree that, you know, that we should be 
expecting costs, and that is acceptable.
    Mr. Gonzalez. Mr. Walke?
    Mr. Walke. My answer is no, it is worth spending money to 
protect children and to save lives.
    Mr. Krouskop. Rules have to be achievable and affordable.
    Mr. Papadopoulos. Cost is essential.
    Mr. Gonzalez. Yes or no, does the EPA have the expertise 
presently to be able to promulgate rules that get the science 
right, the technology right, and the cost right? Yes or no?
    Mr. Fanning. I think they need to involve history--I mean, 
industry. They can't do it by themselves.
    Mr. Earley. Alone they don't have all the expertise.
    Mr. Bradley. Yes, they have the expertise.
    Mr. Kempf. Not in a vacuum.
    Mr. Walke. Yes.
    Mr. Krouskop. Alone they don't have the expertise.
    Mr. Papadopoulos. A very strong no.
    Mr. Gonzalez. All right. You expect us as Members of 
Congress to basically listen to one side or the other's 
experts. It has been my experience it just depends who the 
expert is basically representing at that point, because they 
are defending their opinions. Should we just be listening to 
industry's experts or just EPA's experts? How do we determine 
which is a legitimate source of good, solid information? 
Because I am going to tell you right now, we will argue up here 
over whether there is climate change taking place and we will 
even argue over evolution. So good luck. Who do we listen to, 
industry or EPA? Whose experts? Should we have some other 
referee other than Congress? And I am not trying to shirk our 
duty, I am just telling you the stuff that you present to us is 
really many times incomprehensible because we are not experts, 
and we expect that experts from industry and experts from EPA 
are going to give us an honest opinion, but you guys don't 
agree, so who do we listen to? I only have 30 seconds. Tell me 
who should we have as the disinterested third-party expert?
    Mr. Fanning. Congressman, I think you are making a great 
point that--for the need to review this rule and debate with 
EPA its ramifications in a reasonable timeframe. I think that 
is why we need more than 60 days in order to really understand 
1,000 pages of a proposed rule and 1,000 pages of documentation 
underlying it.
    Mr. Gonzalez. Mr. Fanning, my time is up, and to the other 
witnesses, if you could supply that answer. You tell me who 
that referee, that disinterested third-party expert--I am not 
adverse to extensions of time to get people that are impacted 
time to comply and understand and evaluate, but when we do 
that, I also want to know that you just won't be asking for 
more time.
    Thank you very much, and I yield back.
    Mr. Whitfield. The gentleman from Oregon is recognized for 
5 minutes.
    Mr. Walden. Mr. Chairman, first of all thank you for 
holding these hearings on these rules. I was kind of amazed the 
other day when we had one of these hearings to hear I believe 
it was a witness from the EPA talking about the job creation 
that is going to come from all of these regulations. Having 
been a small business owner for over 20 years, I am always 
astounded when the government puts on a rule that is very 
expensive and calls that job creation. They don't look at the 
other side of the equation. In my district, Mr. Papadopoulos, 
we have a cement plant that Ashgrove, I believe, owns. They 
have invested $20 million installing and activating a carbon 
injection system. They have optimized their ACI to achieve 95 
percent reductions in emissions, and EPA wants them to go to 
98.5 percent, and the rule requires them to sustain those 
reductions over a 30-day average. So even if you have a little 
blip, you are out of compliance. There are 116 jobs on the 
line, most of them union. This is Baker County's largest single 
taxpayer and employer, and puts $9 million into the economy.
    Now I know some of my colleagues on the other side of the 
aisle say oh, that doesn't matter because they are not really 
for jobs in the private sector anyway, some days, I believe. 
This is going to devastate the economy and the economy of the 
rural eastern Oregon county I represent. The difference between 
95 percent and 98.5 percent is the equivalent of less than a 
teaspoon of mercury a day. Over that, we probably are going to 
lose this plant and those manufacturing jobs, and will end up 
importing more cement from China.
    So Mr. Papadopoulos, do you believe the EPA should exercise 
its authority to use the flexibility provided in the Clean Air 
Act amendments of 1990, flexibility that issued sub-categories?
    Mr. Papadopoulos. I think this is a very important 
question----
    Mr. Walden. Please turn on your mic there, sir.
    Mr. Papadopoulos [continuing]. For our industry, because we 
are different from power generation and other industries in 
that we depend on the raw materials that exist there on the 
site, what Mother Nature has provided the cement plants. These 
raw materials come in perfect, and therefore there is a whole 
wide range of outcomes when you use those raw materials. It 
would make absolute sense for the EPA to say let us look at the 
specific environment in which categories the plants are, and 
let us work with industry.
    I think to answer some of the questions, we need a win/win 
collaboration with government----
    Mr. Walden. Right.
    Mr. Papadopoulos [continuing]. Not a win/lose litigation, 
fighting heavy-handed, you know----
    Mr. Walden. Job killing. Can I throw in job killing in that 
process?
    Mr. Papadopoulos. Job killing. Germany has done that. The 
reason--because I worked internationally, the reason Germany 
today is the global powerhouse along with China is because 
Germany has a win/win attitude working between government and 
industry. We need to bring that process back here to the U.S. 
This is a prime example of a company actually doing the right 
thing and in the end, getting penalized.
    Mr. Walden. And by the way, they met the requirements, I am 
led to understand, that the State of Oregon had put in place 
prior to these new requirements coming out from the EPA. And 
then the State wouldn't even back them up with the EPA. It was 
really, really quite frustrating and remains so.
    I got to tell you, I represent a district where I have got 
counties that have been averaging 15 and 16 percent 
unemployment for way too long. We have 55 percent of the land 
out there is owned by the Federal Government and mismanaged or 
not managed at all. There are groups, some of them represented 
at this table, who could care less about the livelihood of the 
men and women who live out in these forested communities who 
are fighting us on biomass, turning wooded biomass into 
productive, renewable energy. They would rather let the forest 
get overstocked, bug infested, rot and die, and then catch fire 
and burn. They wouldn't let us go in. They go in and sue us to 
go in and cut the burn dead trees while they still have value. 
These are not environmentalists. I don't know what they are, 
but they are sure destroying my part of the world and the 
economy there.
    We can find good partnerships. My State has led the way in 
environmental activism in a positive way, in most cases. I am 
going to tell you, these new federal rules are shutting down 
everything that matters out there in my part of the world. The 
new particulate rules on dust--how about in eastern Oregon? I 
mean, we grow they'd probably have to drag a mister behind 
their machinery in order to hold the dust down. We wouldn't 
call it dry land farming if we had that much water. This 
administration is killing more jobs in rural communities than 
prior administrations combined. This President doesn't 
understand what his own folks are doing. I have about had it, 
and so have the people I represent.
    So we are going to go after this agency. We are going to 
bring some damn common sense to the process and these groups 
that are killing the folks out there, they need to have some 
skin in the game and not just use these things as big 
fundraising efforts, which is what generally happens. There is 
common sense here. We can get America working again. We can get 
back on our feet out there, if you will just let us.
    Mr. Whitfield. Thank you, Mr. Walden. At this time, the 
gentleman from Texas, Mr. Green, is recognized for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Fanning, Mr. Bradley testified that the installation of 
control technology can occur in 26 months. Southern has found 
that scrubbers average 54 months to install. Can you explain 
the apparent discrepancy?
    Mr. Fanning. I would be glad to, thank you. In fact, it is 
interesting to look at the actual permit application for the 
constellation scrubber that they refer to. When they made the 
application, they sought approval for the scrubber and cited a 
41- to 46-month installation schedule. I think the confusion 
probably arises from the fact that when you consider adding new 
equipment, you have got to go through the whole process of 
design, permit, and then build. I think the confusion in the 
26-month reference only relates to when you start to break down 
and actually build the plant. When you put in new facilities, 
you need to take into account the design characteristics of the 
unit in question, the permits that need to be applied for and 
received, and then ultimately specific site engineering and 
construction.
    Mr. Green. What is the lag time on the permits? Once you 
get the permit in there, how long does it take to get a permit?
    Mr. Fanning. Well, that is certainly, you know, matters on 
State to State, because these are generally State issues at 
that point.
    Mr. Green. Do you have an average?
    Mr. Fanning. Round numbers, I don't know, 12 to 18 months.
    Mr. Green. OK, so anywhere from a year to a year and a 
half?
    Mr. Earley. We think 18 months is probably a working 
number.
    Mr. Green. Thank you. This is a question for Mr. Fanning, 
Mr. Earley, and Mr. Bradley.
    EPA estimates that 10 gigawatts of coal-fired power will 
retire rather than install controls. Can each of you state 
whether you agree with that conclusion?
    Mr. Earley. We disagree with that conclusion. We think it 
is going to be a much larger number.
    Mr. Green. Do you have any idea? I mean, I know we are just 
guessing, but----
    Mr. Earley. Yes, I think it is going to be more in the 
range of 50 to 75.
    Mr. Fanning. Yes, we think it is--70,000 to 80,000 is what 
we think, and the answer is really pretty simple. They believe 
dry sorbent injection is going to solve one problem, and it 
actually creates another. It creates a particulate matter 
problem that would need to be dealt with. It will not be a 
widespread solution.
    Mr. Green. OK, Mr. Bradley?
    Mr. Bradley. Yes, I think 10 gigawatts is on the low side. 
I think EPA targeted that specifically to the Utility Toxics 
Rule. I think they have acknowledged that more retirements will 
happen through just market pressures.
    I think it is also important to go back and reassess the 
retirement issue based on the proposal itself and the 
flexibility that is included. The--certainly NERC is more on 
the ballpark with EPA, but I think it is going to be hard to 
project exactly what is driving retirements. Is it singly the 
Utility MACT rule or is it low natural gas prices, depression 
of demand, the inefficiency of some of these old plants?
    Mr. Green. OK. This question, Mr. Fanning, in your 
testimony you say that ``EPA goes to set limits separately for 
individual pollutants using different sets of best performing 
plants. EPA's resulting suite of emission limits does not 
reflect the performance of any existing plant, but instead 
reflects the performance of so-called 'Frankenplant,' one 
consisting of mixed-suite performance characteristics that do 
not represent the technology applications across all pollutants 
for that individual facility.'' Mr. Earley, do you agree with 
Mr. Fanning's statement?
    Mr. Earley. I agree with that.
    Mr. Green. OK. Mr. Bradley, you argue that the EPA proposal 
is based on standards performance that is already achieved by 
existing plants, so how do you respond to Mr. Fanning's 
statement about the ``Frankenplant''?
    Mr. Bradley. I would be happy to submit for the record a 
list of plants that are documented in EPA's database that are 
based on data that companies submitted, and there are 27 units 
and 16 plants in that database that--preliminary analysis of 
ours that represent both sub-bituminous, bituminous, and even 
one lignite plant that currently meet the standards.
    Mr. Green. I would appreciate that. In my 26 seconds, Mr. 
Fanning, you talked about the delay--and I know there are other 
questions from other Members--can you specifically talk about 
how long do you think it would take to need to implement the 
rule? I know 30 days is too short, 60, what is the time? I know 
Congressman Gonzalez mentioned that.
    Mr. Fanning. Yes, I would be glad to. We think there needs 
to be a thorough review process. Remember, this is the most 
expensive proposal put forth in a MACT form that EPA has ever 
done, 1,000 pages, 1,000 documentation. We need to go through 
this and really understand the science first, number one. So my 
view is we need some extension on evaluating what is being 
proposed, and I think one of the issues that we get to on all 
of this dry sorbent injection, all these other things, is the 
combined effect of the controls of all these plants. Further, 
we need to have a reasonable way to implement this requirement. 
Our company is already transitioning our coal fleet. We have 
examples of that I could tell you about, but in order to 
account for an orderly way to run your generation portfolio for 
the benefit of customers to ensure that you have reliability in 
a reasonable economic impact, and to assure that you have 
reasonable participation by vendors and required craft workers 
to undertake these billions of dollars of capital, my sense is 
you are going to need somewhere in the 6-year timeframe to get 
this done reasonably.
    Mr. Green. OK. Thank you, Mr. Chairman.
    Mr. Whitfield. Mr. Pompeo, you are recognized for 5 
minutes.
    Mr. Pompeo. Thank you, Mr. Chairman, and thank you all for 
coming here today.
    You know, I have been here only 100 days, and when I look 
at something like this, it is staggering because we are talking 
about one set of rules today that you all are trying to deal 
with and create jobs and create energy. So manufacturing guys, 
like I was 101 days ago, I find it surprising that so many of 
you are still here working, banging away in the United States 
trying to create jobs. I admire you for continuing to do that 
and continuing to fight the fight to help us understand what it 
is that will allow you to do those things. I come here today, 
you all come here today, but the EPA chose not to. We have this 
constitutional oversight duty, and yet they don't come so we 
can hear the things that they want to tell us and present their 
side and their set of facts. It is incomprehensible to me that 
they are not here.
    I heard the ranking Member say today that EPA had very few 
experts. I don't know about all that. What I can tell you when 
you look at something like this and they got too few people 
with common sense, I am confident of that.
    Mr. Krouskop, you gave me the chart so I want to ask you 
just a couple questions. There was a piece in your testimony 
about the secondary materials rule and how that impacts your 
business. Can you tell me a little bit more about that?
    Mr. Krouskop. Yes, the secondary materials rule is 
basically--Boiler MACT is actually four separate rulemakings, 
and one of them deals with the definition of solid waste. One 
of the areas that, of course, products industry is very 
interested, and quite frankly, I think from an energy 
perspective we are interested in creating renewable energy, and 
it certainly is questionable as to the way the rule is written 
is whether or not things like biomass would not be classified 
ultimately as a waste, which would then require even more 
expensive control systems to be put on those boilers.
    Mr. Pompeo. I appreciate that. I want to come back to 
something, too, and I will ask everyone on the panel.
    So there was this notion that there has been this delay, a 
decade, 12 years, 13 years, and that you all should have been 
doing something in that time. The notion was hey, you have had 
15 years to get ready for this, but the truth is, if you would 
have taken action, much like your university did during this 
15-year timeframe, I would like to ask you if you think you 
would all be looking at something that was going to cost you 
even more money? That is, you would have been trying to guess 
what EPA was going to do. I want to ask you if that is 
something that when you present to your employees and your 
regulated--the folks that regulate your utilities or your 
shareholders, if that is something that they would say hey, 
that is exciting, we want to go invest some money trying to 
guess what EPA is going to do. We can start down here with Mr. 
Fanning.
    Mr. Fanning. I am proud to say we have already invested--
committed to invest more than $10 billion on improving the 
climate. We are the leader in the industry in that respect, and 
we are going to invest more.
    Mr. Pompeo. I hope you guessed right.
    Mr. Fanning. Well, the other issue that is just very 
important that you are hitting on here is we are in the 
Southeast, which is largely an integrated regulated electric 
system. We have a constructive relationship with our regulators 
and we go through very disciplined processes to evaluate 
ultimately the impacts for our customers on reliability, price 
and environmental impact.
    These are policies that have should be followed through and 
have served us well in the past, and will require more time 
than what is permitted in this proposal.
    Mr. Earley. Congressman, we have done the same thing. We 
have invested well over $2 billion, but what this rule shows is 
we will have to invest even more, and as I say in my testimony, 
we have slashed emissions over the last 30 years, and it is a 
lot of great success stories. I think we have to use some 
common sense going forward. At some point enough is enough, and 
you just can't afford to spend the next dollar for another 
piece of equipment just because the equipment is available, 
because these costs are borne by our customers, your 
constituents.
    Mr. Pompeo. Thanks to those who responded. You know, Kansas 
we have got a utility plant that has been trying to be built to 
retire some older, less clean technology, and our former 
governor, now the Secretary of HHS, didn't let them do it. So 
this was a company that was trying to invest, trying to create 
jobs, trying to create affordable energy, and was prevented by 
doing so by the Kansas Department of Health and Environment, 
and ultimately by EPA, too.
    I have just got 20 seconds. Mr. Bradley, you think these 
make sense. I am trying to understand what is different about 
the businesses that are part of your group as opposed to the 
folks sitting to your right. Why is it that you think they make 
sense and they don't?
    Mr. Bradley. These have been clearly on the books and on 
the horizon for more than 10 years. The companies I represent 
have a responsibility to their shareholders, to their 
customers, to their employees to plan ahead, to do risk 
assessment, and manage their investments, and they have made 
those investments in a way they are in a pretty good position--
--
    Mr. Pompeo. You just--frankly, the folks you represent just 
have a lot different mix of energy. You have got a lot less 
coal involved in the folks that you represent than some of the 
other folks sitting on the panel.
    Mr. Bradley. That is correct.
    Mr. Pompeo. So this would be--these rules would be good for 
your folks because they would cause your profits to increase 
and the others----
    Mr. Bradley. Yes, but let me emphasize that the number of 
my companies that I represent have invested the hundreds of 
millions of dollars to clean up their coal facilities as well.
    Mr. Pompeo. Thank you. I yield back my time.
    Mr. Whitfield. The gentleman Mr. Inslee is recognized for 5 
minutes.
    Mr. Inslee. Thank you.
    Mr. Fanning, I was interested in your technology, reading 
your written statement, you said ``Second, we need a national 
robust research and development effort to create new energy 
technologies for the future,'' and I very much agree with that. 
Apparently so does President Obama. He said yesterday ``I will 
not sacrifice the core investments we need to grow and create 
jobs. We will invest in medical research and clean energy 
technology.''
    Now, there are efforts here to reduce--not increase, but 
actually reduce our national investments in clean energy 
research. I think that is a huge mistake. It is like eating 
your seed corn. Would you urge us on a bipartisan basis to 
increase our federal investment in clean energy research across 
the board in all CO2, non-CO2, and low-CO2 emitting 
technologies?
    Mr. Fanning. Absolutely. I am on record as saying that this 
should be a national imperative.
    Mr. Inslee. Well, I would hope you might spend some time 
with some of my Republican colleagues, talking to them about 
the importance of this investment and the potential job 
creation technology. I am serious about this. We have deficit 
challenges here that are very, very important, but as we make 
priority decisions, if you have a chance to talk to some of my 
colleagues about the job creation potential of that research, I 
think it could be beneficial. Thank you.
    Mr. Walke, I have--I want to ask you to comment on 
something that I found fascinating. Mr. Earley talked about 
yearning for the good old days of a proposal to have something 
like a cap and trade system where we gave flexibility to 
industries to try to figure out what actions and what 
investments to take to clean up our skies. I am not liking this 
what you might call a command and control system that sets up 
regulatory systems about specific behavior. Now it seems to me 
a little bit ironic that one side of this aisle here rejected 
Congress doing something that would have given industry 
flexibility on how to decide where to make investments. Then 
when we take the alternative approach, which is a regulatory 
approach, rejecting that approach. Now that to me seems a 
little bit ironic. What do you think?
    Mr. Walke. Well, what they share in common is a desire to 
avoid reducing pollution in both cases, so there is that 
consistency, that failure to support carbon cap and trade 
legislation and failure to support the command and control 
programs. But EPA has flexibility, including averaging in this 
toxics rule, and there is a deep commitment to carrying out a 
law that was adopted by 401 Members of the House in 1990.
    Mr. Inslee. Thank you. Mr. Krouskop, if I can ask you a 
question. If you had in your broadly industry--three industries 
kind of associated with this rule, if these industries were 
taking some action that resulted in the premature deaths of 
26,000 people a year in America, not China, in America, 26,000 
Americans a year, and if your industry could make an investment 
that would return to the national economy at a minimum five 
times more benefits by eliminating those premature deaths for 
every dollar of investment, would you make that investment? 
Would you suggest that we as a community make that investment?
    Mr. Krouskop. I think the real question here is how fast 
you make the investment and to what degree do you compare some 
of the benefits and the costs to those investments. I think 
that is what we are saying.
    Mr. Inslee. So let us start at the beginning of my 
question. If you could make an investment of $1 that could 
result in 26,000 deaths--premature deaths in the United States, 
and would return economic benefits of a minimum of $5 to the 
Nation, let us just start with that presumption. Would you 
suggest that the industry make that investment?
    Mr. Krouskop. If you buy the premise of the dollars and 
there has been lots of discussions about, A, truly are those 
numbers correct, and are the estimates of health effects 
associated with these things, the answer, of course, is yes.
    Mr. Inslee. Well, I don't think it is of course, because I 
have heard at least five witnesses say and we say to ignore 
this cost benefit analysis. This is very problematic to me, and 
let me tell you why. The only comprehensive assessment of the 
cost benefit analysis is the one presented by the EPA. I don't 
see anything coming from industry that is really presented a 
contrary opinion. Now, that is problematic to us as a 
policymaker. Mr. Papadopoulos wants to say something. Go ahead.
    Mr. Papadopoulos. I want to say that, you know, statistics 
that have come out of computer models are one thing. Proof in 
the field, empirical proof is another thing. If I knew that 
even one person was----
    Mr. Inslee. Let me stop you just for--I only got 13 
seconds.
    Mr. Papadopoulos. I would have gotten it tomorrow. I would 
wait for EPA to come.
    Mr. Inslee. I am waiting for something from you guys. I 
would like to see it.
    Mr. Whitfield. The gentleman's time is expired. Recognize 
the gentleman from Virginia, Mr. Griffith, for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman. If we could put up a 
map showing the percentage of mercury deposits from outside the 
United States, I believe the committee has that. Oh, there it 
is.
    Mr. Papadopoulos, thank you for having a facility--I guess 
I should ask before I get to the map, when you talked about 
closing down older plants, I hope that doesn't include Roanoke 
Cement just outside of my district in Botetourt County.
    Mr. Papadopoulos. We are trying very hard.
    Mr. Griffith. I appreciate that. When you look at this map, 
it appears that a significant amount of mercury in the U.S. 
comes from outside the country. Now so you will know, the chart 
indicates the percentage of mercury deposits that are from 
outside the country, so the red would be 100 percent and down, 
and purple would mean that most of it is coming from this 
country. So it appears that a lot of the mercury is coming from 
outside the country. Can these foreign mercury emissions be 
reached by EPA regulations?
    Mr. Papadopoulos. None at all. They will worsen, in fact.
    Mr. Griffith. And isn't it accurate to think that if these 
mercury emissions--and I heard you say something about this in 
your opening statement, too, or at least get close to it, but 
isn't it a fact that if they are coming from outside the United 
States and we drive manufacturing--all kinds, but particularly 
in your case, the production of cement, to other countries like 
China, India, or Mexico, aren't we, in fact, increasing the 
likelihood or increasing the amount of mercury that may 
actually come into these United States?
    Mr. Papadopoulos. Exactly. The EPA has all these studies, 
but it refuses to communicate them, and you know, I heard a 
statistic from Mr. Waxman that I wanted to correct. He said 
that the cement industry is the number three producer of 
mercury in the U.S. That is incorrect. In fact, we rank number 
nine. The U.S., in fact, is one of the smallest mercury 
producers in the world. Compared to our energy footprint, our 
mercury production globally is only 7 percent, and 80 percent 
plus of the mercury that comes into the U.S. originates 
offshore. So unless we are planning to build a big glass globe 
around the country, we could shut everything down and still 
this won't change. It will get worse.
    Mr. Griffith. Thank you. I do want to shift over to my 
friends from MeadWestvaco. I asked staff when I saw the witness 
list today, I said did you all set up this hearing for me? My 
understanding is that Eastman was also invited, and they are on 
the other end of the district, just outside of the district. 
But if I could ask you a few questions, I do appreciate your 
facility there, and I am going to mispronounce your name. Help 
me with it.
    Mr. Krouskop. Krouskop.
    Mr. Griffith. Krouskop. I do appreciate your facility there 
in Covington. Obviously you employ a lot of people, as does Mr. 
Papadopoulos, in the 9th Congressional District of Virginia, 
and both of you all have great companies.
    But let me ask you, looking at Boiler MACT as well as other 
current EPA air regulations that are looming over the next 
several years, can you explain in general terms the investment 
and technology control issues that a mill like yours is facing 
with these regulations?
    Mr. Krouskop. Yes, the investment, for example, for 
Covington Mill associated with these regulations certainly are 
in the tens of millions of dollars. I think the fundamental 
question here is as much about how do we effectively accomplish 
the goals of the Clean Air Act and the MACT rulemaking and 
control toxics and not have to spend so much money. We would 
submit that there is, in fact, technology to do that.
    Mr. Griffith. All right. Your testimony basically says the 
EPA and the Boiler MACT rule in its current form has 
essentially failed to capture what is the essence of what real 
world industrial boilers actually achieve. Can you elaborate on 
that?
    Mr. Krouskop. Yes, one of the most difficult parts of the 
Boiler MACT rulemaking was, even though EPA did go to a sub-
categorization system, in effect what they did rather than 
saying here is boiler X and it can achieve these things and we 
will look at the best 12 percent performing of all boilers, 
they literally cherry-picked pollutant by pollutant. So when 
you look at the true number of boilers that could achieve these 
rules today, they are much less than 10, based on our analysis, 
of about over 3,000 boilers nationwide.
    Mr. Griffith. All right. My time is just about up, but I 
just again want to say thank you to all of you. Anybody else 
who wants to bring jobs to the 9th District of Virginia, you 
are more than welcome. We understand that there has got to be a 
balance that you want to have clean air and you want to have 
clean water. The EPA has a role, but we have to make sure that 
it makes sense and doesn't eliminate jobs and increase 
pollution inadvertently.
    Thank you, I yield back my time, Mr. Chairman.
    Mr. Whitfield. Ms. Capps, you are recognized for 5 minutes.
    Mrs. Capps. Thank you very much, and thank you for 
testimony of each of you. I am going to be brief and concise 
because I know my colleague, Mr. Markey, has some questions 
too. These will be focused at you, Mr. Walke.
    Yesterday Subcommittee Chairman Whitfield confirmed that 
legislation to delay air toxic standards will be introduced 
after the congressional recess. We have heard from some in the 
energy industry that a delay is needed because of ``importance 
of a smooth transition and more deliberate schedule'' to ease 
the strain on industry and reduce risks to consumers with the 
proposed rules for utilities. If the proposed standards to 
reduce air toxics from power plants were delayed by even a 
year, a single year, what would it mean for public health? Give 
us a couple of examples.
    Mr. Walke. I would be happy to, Congresswoman Capps.
    What we have found from EPA's own data is that the delay of 
these three rules by even a single year would result in up to 
26,000 premature deaths, 17,000 non-fatal heart attacks, about 
180,000 asthma attacks, and approximately 330,000 cases of 
upper and lower respiratory systems. These would be one of the 
most profound retreats from the Clean Air Act protections ever 
to be considered by this body.
    Mrs. Capps. Mr. Walke, we also hear from the industry and 
increasingly from my colleagues on the other side of the aisle 
that EPA is overreaching with its air toxics standards. I 
myself disagree with that statement. I have maintained that 
these standards reflect EPA doing its job. Do you believe EPA 
is overreaching with its proposed air toxic standards for power 
plants?
    Mr. Walke. I do not. The agency is following well-
established law that unfortunately it was created by the courts 
in the last decade when they overturned far greater 
overreaching by the Bush administration that----
    Mrs. Capps. That is what I wanted to turn to next. As EPA 
has moved to implement the law and issue standards to control 
air toxics from power plants, go further to illustrate--I 
wanted to find has there ever been an action that can be 
characterized as an EPA overreach, and finish that description 
that you were giving.
    Mr. Walke. Yes, absolutely. EPA under the Bush 
administration violated the toxics provision of the Clean Air 
Act at least in 11 or 12 cases, all of which are represented 
before us today. One of them EPA even realized it couldn't 
defend, so it took back the cement rule. In several of those 
cases, the courts found themselves resorting to quoting two 
different works of Lewis Carroll, including Alice in Wonderland 
in the power plant case, because they were so profoundly 
disgusted by the end of the second term as to how many times 
the law had been broken. It really has never been seen in the 
Clean Air Act case law in quite the way it played out under 
that administration.
    Mrs. Capps. And finally, Mr. Walke, some folks today have 
said that the EPA standards for boilers and cement factories 
are just too hard to achieve, and that the industry will not 
have enough time to meet the long-awaited standards. You 
disagree. Now just to use a few seconds and maybe a minute to 
comment on these claims that they have made so we can get this 
on the record.
    Mr. Walke. Sure. The Clean Air Act gives up to 4 years, 
that includes a 1-year extension if it is necessary, to install 
the controls. We have had over 100 of these standards issued in 
the past 20 years, covering 400 to 500 industries. It is really 
these laggards who have benefited from lawbreaking by the last 
administration that are now complying with these rules for the 
first time, some 15 years overdue. The law gives them the 
flexibility. The boilers rule came in far more flexibly and 
cost effectively than anyone anticipated. Mr. Bradley has 
testified that the power plant rule is the same. The cement 
final rule is weaker than the proposed rule. EPA does not agree 
with the Portland Cement Association's claims about closures 
and job losses. These are hotly disputed topics, and I just 
want you to be aware that it is very important to have EPA 
appear as a witness, as Chairman Whitfield has invited at a 
future hearing.
    Mrs. Capps. I thank you and I will yield back now the 
balance of my time.
    Mr. Whitfield. Thank you very much.
    Mrs. Capps. I will yield to, if it is OK, to Mr. Markey.
    Mr. Markey. I thank the gentlelady very much.
    Mr. Bradley, in 2004 Governor Mitt Romney of Massachusetts 
adopted regulations to control mercury from coal-fired power 
plants in Massachusetts that require 85 percent of mercury 
emissions to be captured by 2008. Were utilities able to keep 
the lights on while this standard was being met?
    Mr. Bradley. Absolutely.
    Mr. Markey. Did the geniuses at MIT have to invent some new 
alloy or exotic technology so the coal-fired power plants in 
Massachusetts can meet this standard?
    Mr. Bradley. Not that I am aware of.
    Mr. Markey. Is this standard now being met by 12 other 
States in the union?
    Mr. Bradley. Comparable requirements are in place in 12 
States.
    Mr. Markey. Are the technologies that were installed in 
Massachusetts available and economically viable for use in 
coal-fired power plants in other States?
    Mr. Bradley. Absolutely.
    Mr. Markey. The Southern Company says they can build two 
new nuclear power plants and guarantee the safety of people, 
but they can't really figure out how to install these 
technologies that already exist that would protect against the 
poisoning of the children in our country. Do you think that 
Southern Company should be able to figure that out if they can 
build two new nuclear power plants in our country?
    Mr. Bradley. I think they have a tremendous track record--
--
    Mr. Markey. I do, too.
    Mr. Bradley [continuing]. And in the end, they will figure 
it out.
    Mr. Markey. I just--I think this can't-do attitude that is 
not like President Kennedy's can-do attitude to put a man on 
the Moon with alloys that had not yet been invented, but here 
the technology has already been invented and are already 
installed. We are not asking them to invent anything, but yet, 
it is kind of disconcerting to me to hear the Southern Company 
and others here saying they can't figure out how to install 
something while guaranteeing us they can make nuclear power 
plants safe, after Fukushima, without even waiting until they 
really install all the lessons from Fukushima. So that is a 
great concern to me, and I would hope that this can't-do 
Republican majority can turn into a can-do majority and take 
existing technologies and mandate that we can install them, but 
I am afraid that those public health lessons are going to be 
lost upon them.
    I thank the gentlelady and I thank the chairman for his----
    Mr. Whitfield. I am glad the gentleman from Massachusetts 
is so intimately involved with Southern Company and knows their 
facts.
    Mr. Markey. I love the Southern Company. It is my favorite 
utility to talk to.
    Mr. Whitfield. Mr. Scalise, I am going to recognize you. We 
have votes on the floor and I am trying to accommodate everyone 
so that--we are going to have three series of votes, and I am 
sure these people don't want to wait another 2 hours. So I will 
recognize Mr. Scalise for----
    Mr. Scalise. Sure. Thank you, Mr. Chairman. I appreciate 
that. I will try to go rapid fire. I hope the gentleman from 
Massachusetts will join with us in supporting a comprehensive 
all-of-the-above energy strategy, because I think we know we 
have got resources in our country for wind, solar, nuclear, a 
whole lot more oil and gas, billions and billions of barrels 
that are still out there that can explored for in a safe way. 
That can generate thousands of jobs, generate billions of 
dollars to our economy so that we can reduce our deficit while 
not shipping more jobs to other countries and while not making 
our country more dependent on foreign oil.
    I want to ask Mr. Fanning, in your testimony you talked 
about the impacts on the economy of some of these EPA proposals 
and regulations coming down. Can you expand a little bit upon 
the true impacts to the economy that would be imposed if this 
were to go forward?
    Mr. Fanning. Yes, thank you. I would be delighted. The far-
reaching impacts here are pretty significant. We have already 
talked about the direct impact; that is, we think as a result 
of this proposed rule as it stands, at least for the Southeast, 
25 percent increase in prices, but that really doesn't even 
begin to speak to the total impact. When we think about jobs 
and the economy, it is pretty clear that a conservative 
estimate of the loss of jobs when you move from coal to gas is 
about a six-to-one ratio, just to flesh that out a bit. For a 
500 megawatt coal plant, it employs about 300 people. A 500 
megawatt gas plant employs about 50 people. So you would move 
from 300 jobs to about 50 jobs. You lose net 250. If you extend 
that to the notion that we may lose 70,000 megawatts across the 
United States, that is the direct loss of 35,000 high-paying 
jobs. That doesn't even begin to address the issue of the 
first-, second-, third-tier suppliers, railroads, mines, 
equipment vendors, et cetera. It doesn't even begin to address 
the amount of jobs lost as a result of a less competitive 
global economy.
    Mr. Scalise. And that is what I wanted to ask as my final 
question before my time expires. We talk about international 
competitiveness, and of course, our American companies, we want 
them to be successful not only here in America, but for those 
who do operate in other countries, we want them to be able to 
play on a level playing field. Right now, they are being pushed 
further and further out in their ability to compete globally 
because of some of the things happening by this administration, 
EPA, and others that are actually making it harder for American 
companies to survive. So if you have regulations like this that 
basically say if you are an American company, you can't even 
manufacture, your electricity costs would be so high if you do 
business in America, what does that mean to us internationally 
as other countries would love to take our jobs? Unfortunately, 
other countries are already taking too many of those jobs. It 
seems like an EPA regulation like this would push even more 
tens of thousands of jobs from America out of our country.
    Mr. Fanning. I think you make an excellent point, and I 
would just use this notion, that as we don't consume coal in 
America and we export it, we will export jobs along with it.
    Mr. Scalise. And obviously, they don't have the same 
environmental protections that we enjoy today, so the things 
that EPA seems to be concerned about would actually be 
exponentially increased if those jobs here in America would go 
to those foreign countries like China and India.
    Mr. Fanning. If I could just add one more quick social 
impact. As we close down these plants, we will visit economic 
damage on local communities. I just got a letter yesterday from 
Putnam County, Georgia, that if we close down Branch Units 1 
through 4 in that county, we will reduce their tax base by 
about 19 percent.
    Mr. Scalise. Mr. Chairman, if I can maybe move unanimous 
consent to have that letter introduced into the record? Thank 
you and I yield back.
    Mr. Whitfield. Without objection.
    [The information follows:]





    
    Mr. Whitfield. Well, that concludes today's hearing. As I 
said, we have a number of votes on the floor relating to the 
budget, but I want to thank all of you for coming. I look 
forward to working with our friends on the--our Democratic 
friends to craft legislation that can accommodate some of the 
concerns we have heard today. And with that, the hearing is 
concluded and the record will remain open for 10 days for 
additional material or questions. Thank you.
    [Whereupon, at 11:30 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]






                                 
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