[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
H.R. 4345, THE DOMESTIC FUELS PROTECTION ACT OF 2012
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENVIRONMENT AND ECONOMY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
APRIL 19, 2012
__________
Serial No. 112-138
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
U.S. GOVERNMENT PRINTING OFFICE
78-697 WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chairman DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire MIKE ROSS, Arkansas
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas
DAVID McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
Subcommittee on Environment and the Economy
JOHN SHIMKUS, Illinois
Chairman
TIM MURPHY, Pennsylvania GENE GREEN, Texas
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky TAMMY BALDWIN, Wisconsin
JOSEPH R. PITTS, Pennsylvania G.K. BUTTERFIELD, North Carolina
MARY BONO MACK, California JOHN BARROW, Georgia
JOHN SULLIVAN, Oklahoma DORIS O. MATSUI, California
CHARLES F. BASS, New Hampshire FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio DIANA DeGETTE, Colorado
CATHY McMORRIS RODGERS, Washington LOIS CAPPS, California
GREGG HARPER, Mississippi JOHN D. DINGELL, Michigan
BILL CASSIDY, Louisiana HENRY A. WAXMAN, California, ex
CORY GARDNER, Colorado officio
JOE BARTON, Texas
FRED UPTON, Michigan, ex officio
C O N T E N T S
----------
Page
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 1
Prepared statement........................................... 17
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 18
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 20
Prepared statement........................................... 21
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 65
Witnesses
John Eichberger, Vice President, Government Relations, National
Association of Convenience Stores.............................. 22
Prepared statement........................................... 25
Answers to submitted questions............................... 127
Charles T. Drevna, President, American Fuels and Petrochemical
Manufacturers.................................................. 34
Prepared statement........................................... 35
Answers to submitted questions............................... 129
Bob Dinneen, President and CEO, Renewable Fuels Association...... 41
Prepared statement........................................... 43
Shannon Baker-Branstetter, Policy Counsel, Energy and
Environment, Consumers Union Policy & Action from Consumer
Reports........................................................ 46
Prepared statement........................................... 48
K. Allen Brooks, Senior Assistant Attorney General and Chief,
Environmental Protection Bureau, State of New Hampshire........ 58
Prepared statement........................................... 60
Submitted Material
H.R. 4345........................................................ 3
Letters and Statements Opposing H.R. 4345, submitted by Mr. Green 77
H.R. 4345, THE DOMESTIC FUELS PROTECTION ACT OF 2012
----------
THURSDAY, APRIL 19, 2012
House of Representatives,
Subcommittee on Environment and the Economy,
Committee on Energy and Commerce
Washington, DC.
The subcommittee met, pursuant to call, at 9:30 a.m., in
Room 2322, Rayburn House Office Building, Hon. John Shimkus,
[chairman of the subcommittee] presiding.
Present: Representatives Shimkus, Murphy, Whitfield, Pitts,
Latta, Harper, Cassidy, Barton, Upton (ex officio), Green,
Barrow, Capps and Waxman (ex officio).
Staff Present: Charlotte Baker, Press Secretary; Michael
Beckerman, Deputy Staff Director; Anita Bradley, Senior Policy
Advisor to Chairman Emeritus; Maryam Brown, Chief Counsel,
Energy and Power; Jerry Couri, Professional Staff Member,
Environment; Cory Hicks, Policy Coordinator, Energy and Power;
Ben Lieberman, Counsel, Energy and Power; David McCarthy, Chief
Counsel, Environment and Economy; Chris Sarley, Policy
Coordinator, Environment and Economy; Michael Aylward,
Democratic Professional Staff Member; Jacqueline Cohen,
Democratic Counsel; Greg Dotson, Democratic Energy and
Environment Staff Director; Caitlin Haberman, Democratic Policy
Analyst; and Alexandra Teitz, Democratic Senior Counsel,
Environment and Energy.
OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Shimkus. It is 9:30 by that clock, a few minutes after
because of mine, and we want to open the hearing and welcome
our members of our panel, first and only panel.
Before I do that, I want to take a point of personal
privilege on behalf of my colleague Mr. Bass, who sends his
regrets that he wasn't able to be here. He serves on the
subcommittee. As our panelist from the State of New Hampshire
knows, that there was a tragedy and loss of a chief of police
in Greenland, New Hampshire. He was killed in the line of duty
last Friday, so much of the New Hampshire delegation is up
there with a lot of State and local officials today, and that
is why Mr. Bass cannot attend. And as a member of the
subcommittee, he is a very active member.
So with that I would just like to pause for a moment of
silence in remembering the law enforcement community, and the
chief of police Michael Maloney and his family, and the entire
State of New Hampshire.
Thank you. And now I would recognize myself for 5 minutes
for an opening statement.
Today the subcommittee will hold a hearing on H.R. 4345,
the Domestic Fuels Protection Act of 2012. I am proud to once
again be a lead sponsor of this bipartisan legislation, with my
colleague on the committee Mr. Ross.
[H.R. 4345 follows:]
[GRAPHIC] [TIFF OMITTED] 78697.001
[GRAPHIC] [TIFF OMITTED] 78697.002
[GRAPHIC] [TIFF OMITTED] 78697.003
[GRAPHIC] [TIFF OMITTED] 78697.004
[GRAPHIC] [TIFF OMITTED] 78697.005
[GRAPHIC] [TIFF OMITTED] 78697.006
[GRAPHIC] [TIFF OMITTED] 78697.007
[GRAPHIC] [TIFF OMITTED] 78697.008
[GRAPHIC] [TIFF OMITTED] 78697.009
[GRAPHIC] [TIFF OMITTED] 78697.010
[GRAPHIC] [TIFF OMITTED] 78697.011
[GRAPHIC] [TIFF OMITTED] 78697.012
[GRAPHIC] [TIFF OMITTED] 78697.013
Mr. Shimkus. This Congress I am pleased also to welcome in
this Congress Congressman Sullivan, our vice chairman on the
energy subcommittee, as well as Collin Peterson, the ranking
member on the Ag Committee, as original cosponsors.
In some shape, or form everyone is affected by the increase
in gas prices. Whether it is the seasonal price spikes we are
now starting to see across the country or the overall higher
prices at the pump the last couple of years, Americans are
looking for ways to bring down these costs and break our
dependence from hostile sources of foreign oil.
Some see the path forward through renewable fuels like
ethanol and biodiesel, which are providing both lower prices at
the pump and less dependence on oil. Now we are also waiting
for the next generation of cellulosic ethanol and biofuel
products to come on line and create an even more renewable fuel
right here at home.
Others recognize the promise in our natural gas reservoirs
throughout the country. In fact, we had an interesting debate
about that just 2 days ago in Chairman Whitfield's committee
about our ability to convert this abundant natural resource
into a liquid natural gas for transportation fuel could provide
yet another significant and inexpensive alternative in the
marketplace.
I support an open fuel standard that would break our
mandate on gasoline by requiring cars and light-duty trucks to
operate on a variety of different fuels. This will allow all
fuels to compete in the market, and from there consumers can
choose the fuel for their vehicle based upon factors important
to them, such as price and miles per gallon. And I hope my
colleagues on this committee and the full committee will give
that piece of legislation serious consideration.
However, the legislation we are discussing today is not
about these or any one fuel option at all. H.R. 4345 would
apply to any new fuel or fuel additive approved and registered
by the EPA. H.R. 4345 is needed because EPA approved up to 15
percent ethanol blends only in vehicles whose model year is
2001 and newer; in essence, bifurcating the vehicle market. The
practical result of EPA's action has been that a morass of
pending legal liability and uncertainty have frightened the
market and complicated the supply chain's ability to provide a
means of delivery for the new fuels.
We will hear today from a retailer community prepared to
comply with regulations to legally distribute fuel, yet still
be subject to lawsuits if a consumer misfuels their own
vehicle.
Similar uncertainty exists for other parties in the supply
chain, and they are here to discuss whether this serves as an
unavoidable barrier to entry. We need to find out what the
specific problems are so the final product of this bill can
address them in the most appropriate and targeted way.
The intent of H.R. 4345 is to ensure any party that is
compliant with EPA fuel regulations is not subject to
litigation based upon those merits alone. As a main sponsor of
the bill, I can assure you H.R. 4345 is not an attempt to allow
parties to abrogate any of their responsibilities. I do not
intend this bill to relieve parties who acted negligently from
liability in the court. Nothing in this bill would remove
responsibility for environmental cleanup under RCRA, Superfund,
or any other Federal or State law. If an underground storage
tank containing any fuel were to have a leak, the owner or
operator will be liable the same way they are today. H.R. 4345
simply clarifies that just having a registered fuel in a tank
EPA has determined compatible does not automatically put you in
violation of the law.
The purpose of this legislative hearing is to hear comments
on the bill, including suggestions on how to approve it. One of
our witnesses suggested that H.R. 4345 as introduced somehow
blocks legal actions arising from mishandling of MTBE going
back to the days when MTBE was used as an oxygenate instead of
ethanol. Frankly, I like ethanol as an oxygenate better than
MTBE anyway, but that is a debate we have had numerous times,
Mr. Green.
This is certainly not the intent of the legislation, but
this really is the reason why we have hearings. And so we are
going to hear from our Member from New Hampshire on the panel,
and he has raised some good issues that we need to address.
Also, my colleague, as I mentioned earlier, a member of the
subcommittee, Mr. Bass has spoken to me personally on this
issue because it is a pressing issue for the State of New
Hampshire. I appreciate his commitment to work with me in
moving forward to ensure H.R. 4345 does not infringe upon
ongoing litigation and cleanup in his State involving MTBE.
H.R. 4345 will allow a critical path forward now and into
the future to ensure consumer access to new transportation
fuels competing in the market to drive costs down.
I want to thank the witnesses for being here today to give
their perspective on the bill. I look forward to their
testimony and willingness to answer questions to help us as we
work to move this legislation forward.
With that, I would like to now yield to the ranking member
of the committee, Congressman Gene Green from the great State
of Texas.
[The prepared statement of Mr. Shimkus follows:]
Prepared statement of Hon. John Shimkus
Today the subcommittee will hold a order on H.R. 4345, the
Domestic Fuels Protection Act of 2012. I am proud to once again
be a lead sponsor of this bi-partisan legislation with my
colleague on the committee Mr. Ross. This Congress I am also
pleased to welcome Congressman Sullivan our vice-chairman on
the Energy Subcommittee as well as Colin Peterson the Ranking
member of the Agriculture Committee as original co-sponsors.
In some shape or form everyone is affected by increased gas
prices. Whether it is the seasonal price spikes we are now
starting to see across the country or the overall higher prices
at the pump the last few years, Americans are looking for ways
to bring down those costs and break our dependence from hostile
sources of foreign oil.
Some see the path forward through renewable fuels, like
ethanol and bio-diesel, which are providing both lower prices
at the pump and less dependence on oil. Now we are also waiting
for next generation Cellulosic ethanol and biofuel products to
come online and create even more renewable fuel right here at
home. Others recognize promise in our natural gas reservoirs
throughout the country. The potential to convert this abundant
natural resource into liquid natural gas for transportation
fuel could provide yet another significant and inexpensive
alternative in the market place.
I support an open fuel standard that would look to break
our mandate on gasoline by requiring cars and light-duty trucks
to operate on a variety of different fuels. This will allow all
fuels to compete in the market and from there consumers can
choose the fuel for their vehicle based on factors important to
them such as price and miles per gallon.
However, the legislation we are discussing today is not
about these or any one fuel option at all. H.R. 4345 would
apply to any new fuel or fuel additive approved and registered
by the EPA. H.R. 4345 is needed because EPA approved up to 15
percent ethanol blends only in vehicles whose model year is
2001 or newer. The practical result of EPA's action has been
that a morass of pending legal liability and uncertainty have
frightened the market and complicated the supply chains ability
to provide a means of delivery for new fuels.
We will hear today from a retailer community prepared to
comply with regulations to legally distribute fuel, yet still
be subject to lawsuits if a consumer misfuels their own
vehicle. Similar uncertainty exists for others parties in the
supply chain and they are here to discuss whether this serves
as an unavoidable barrier to entry.
We need to find out what the specific problems are so the
final product of this bill can address them in the most
appropriate and targeted way. The intent of H.R. 4345 is to
ensure any party that is compliant with EPA fuel regulations is
not subject to litigation based on those merits alone.
As a main sponsor of the bill I can assure you H.R. 4345 is
not an attempt to allow parties to abdicate any of their
responsibility. I do not intent this bill to relieve parties
who act negligently from liability in court. Nothing in the
bill would remove responsibility for environmental cleanup
under RCRA, Superfund, or any other federal or state law. If an
underground storage tank containing any fuel were to have a
leak, the owner or operator will be liable the same way they
are today. H.R. 4345 simply clarifies that just having a
registered fuel in a tank EPA has determined compatible does
not automatically put you in violation of the law.
The purpose of a legislative hearing is to hear comments on
the bill, including suggestions on how to improve it. One of
our witnesses suggested that H.R. 4345, as introduced, somehow
blocks legal actions arising from mishandling of MTBE going
back to the days when MTBE was used as an oxygenate instead of
ethanol. That is certainly not the intent of the legislation.
My colleague and a member of this Subcommittee Congressman
Charlie Bass has spoken to me personally on this issue. I
appreciate his commitment to work with me moving forward to
ensure H.R. 4345 does not infringe upon ongoing litigation and
cleanup in his state involving MTBE.
H.R. 4345 will allow a critical path forward now and into
the future to ensure consumer access to new transportation
fuels competing in the market to drive costs down. I want to
thank are witnesses for being here today to give their
perspective on the bill. I look forward to their testimony and
willingness to answer questions to help us as we work to move
this legislation forward.
OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Green. Thank you, Mr. Chairman. And you and I have
debated the difference between MTBE and ethanol, and obviously
we lost that battle in the Senate in 2005, but like the Battle
of San Jacinto, I don't mind bringing it up all the time.
But first of all, before I go into my statement, I would
like to introduce to you and your staff, my staff member
handling the committee is Lindsay Westfield, who actually--
those of you who remember a few weeks ago we had a full
committee markup. I had a great staff member, Abigail Pinkele,
who actually worked in our office for many years and was LD,
and went downtown, so to speak. And I know, Congressman Murphy
and I know she went to work at the National Association of
Community Health Centers, which we work with a lot.
But Lindsay will be doing the staffing on the committee,
and Lindsay has been in our office, in fact, started literally
at the front door, for many years. And I appreciate her
working--sitting in on this and doing energy and environment
work on our staff.
Mr. Chairman, I want to thank you for holding the hearing
today on H.R. 4345, the Domestic Fuels Protection Act of 2012.
This is an issue that I have been actively involved in for a
few years, and I am pleased the committee is giving this
important issue the attention it deserves.
We have a serious problem coming down the pike, and we have
sat on resolving this issue for too long. As the EPA continues
to approve and register new fuels and fuel additives needed to
comply with the renewable fuel standard, this problem will only
grow as refiners will have to increase the ethanol content in a
shrinking volume of gas.
The use of renewable fuel such as ethanol in domestic fuels
is not a matter of choice by the private sector; rather, it is
mandatory as a result of the renewable fuels mandate
established in section 211 of the Clean Air Act. If Congress
wants renewable fuels to be part of the fuel supply, private-
sector fuel refiners and manufacturers must be willing to
produce these fuels; however, holding these private entities
liable for fuel formulations mandated by the government creates
a disincentive for private companies to participate in the
renewable fuels program, which would undermine the Clean Air
Act goal of increasing the use of these renewable fuels.
So, Mr. Chairman, again, I appreciate your looking into
this issue. Unfortunately, I have serious concerns about the
approach H.R. 4345 takes and do not think this bill
appropriately addresses the problems.
Fuels and fuel additives can pose risks in automobile
equipment, in equipment safety, air quality, groundwater and
land. That is why States, localities, and Federal agencies have
taken action under various statutes to try and mitigate these
risks and protect human health, safety, and the environment.
H.R. 4345 would preempt and eliminate the vast majority of
these requirements, leaving States and municipalities and
property owners without protection from or remedies for the
damage to their personal effects and potential contamination of
our groundwater.
To put it in perspective, I can't imagine anyone in this
room would be oK in not having any sort of recourse if your
engine is ruined from accidental misfueling. That is why for
two Congresses I have been a strong supporter and cosponsor of
our fellow Energy and Commerce member, Representative Gonzalez,
the American Fuel Protect Act, H.R. 523. This reasonable bill
would waive the sovereign immunity of the Federal Government
and allow for lawsuits involving the use of ethanol in
renewable fuels to be brought exclusively against the Federal
Government. Providing this remedy would allow for the redress
of legitimate damages without punishing our manufacturers or
distributors for simply complying with this Federal Government
mandate. Importantly, too, any damages awarded for such a claim
would not exceed the actual damage sustained by the plaintiff.
When the government requires a manufacturer to produce
products in specific formulations, the government should be
responsible for the liability risk associated with these
formulations, and with this bill everyone in the transportation
fuel chain can rest assured they do not have a fear of
litigation for complying with a government mandate while also
not depriving the plaintiffs of their day in court.
It is a matter of fairness, Mr. Chairman, and I look
forward to working with you in resolving my concerns with H.R.
4345 in addressing the issue.
And I would also like to submit three letters for the
record, one from the US Boat Owners Association of the United
States; the American Automobile Association, Public Affairs;
and also the American Water Works Association. I would like to
submit them for the record.
Mr. Shimkus. Without objection, these letters will be
submitted into the record.
[The information appears at the conclusion of the hearing.]
Mr. Green. If I can yield back my time.
Mr. Shimkus. If I can just claim your remaining 30 seconds.
I just want to give an anecdotal story of a--I won't name my
staffer--who years ago drove up to a filling station and put
diesel in the gasoline engine of a vehicle. Obviously, he was
the one who was negligent, didn't read the pump. We all know
diesel pumps are labeled properly and who had to pay for the
cleanup, for the repair. It was the person who was negligent in
misfueling the vehicle.
And so that basic premise is really the same thing here. We
didn't go back and sue the retailer, nor did we go back to the
refinery and sue them for producing a product that I shouldn't
have--or my staffer shouldn't have put in the tank to begin
with. We had to bear the brunt of that mistake. And I think
that is really the basic premise of what we are trying to do.
Thank you for the time.
Mr. Green. Mr. Chairman, can I just respond?
Mr. Shimkus. Yes.
Mr. Green. I have a 2002 Chevy Blazer, and I don't put
diesel in it, but that engine is hurt by requiring 15 percent
ethanol as compared to 10 percent. That is the only option I
have when I go into one of our service stations.
So I think I agree, if I do it wrongly, if I put diesel or
something in a vehicle, or someone else does, that is--but when
you don't have a choice and the government mandates that. The
government didn't mandate that diesel fuel.
I yield back my time.
Mr. Shimkus. You must not trust the EPA. You know I do,
don't you?
I would like to yield now to the chairman of the full
committee Mr. Upton for 5 minutes.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. On that note, you and I were both staffers, so
protect our crew or ourselves.
Thank you for holding this hearing. We know that
transportation fuel is varied and changing in the country, and
part of the reason why is because of Federal mandates that are
enacted and expanded the last number of years.
A number of years ago gasoline blended with 10 percent
ethanol was hard to find outside of the heartland, but now it
is really just about everywhere. And EPA has recently approved
the 15 blends with up to 15 percent ethanol, but not for
everyone, not for cars older than model year 2001; not for
boats, lawn mowers, chain saws, other small engines. And that
is just a snapshot.
As the renewable share grows under the RFS, we are likely
to see more varieties of fuels and fuels blending seeking EPA
approval. All of these changes which are coming as a result of
the Federal policy have to be dealt with. The market wants and
deserves a measure of certainty for sure, not price guarantees
or supply quotas, just some confidence that if you refine,
distribute, blend or dispense transportation fuel, and you
follow all of EPA's rules, you are not going to face legal risk
for doing that.
H.R. 4345, the subject of today's hearing, does three main
things. First, it says no one will be held liable because of a
storage tank or fuel-dispensing equipment not compatible with a
particular fuel after EPA says it is compatible.
Second, it says that no person is liable because a self-
service purchaser fills up with a fuel not approved for their
car or other engine. That is just common sense, like saying the
retail store that sells you antifreeze is not liable if you
take it home and drink it, or you put diesel fuel in your car
that is not supposed to go there.
Third, it ensures that people who design, make, sell or
distribute any fuel, vehicle or engine, doesn't face lawsuits
resulting solely from the fact that an EPA-approved fuel goes
into a vehicle or engine.
So let us be clear on what the bill does not do. It does
not change fuel retailers' or anyone else's environmental
cleanup obligations under RCRA or Superfund. It does not excuse
unfair trade practices or anticompetitive behavior. And it does
not say people who act negligently are not held accountable.
Instead it says that following EPA regs and selling EPA-
approved fuel is not enough to get you into trouble.
And I would yield to any of my Republican colleagues
seeking time.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Transportation fuel is varied and changing in this country,
and part of the reason why is because of federal mandates
enacted and expanded in recent years. A few years ago, gasoline
blended with ten percent ethanol was hard to find outside the
Heartland. Now it's just about everywhere. And EPA has recently
approved E-15--blends with up to 15 percent ethanol--but not
for everyone. Not for cars older than model year 2001, and not
for boats, lawn mowers, chain saws, and other small engines.
And this is just a snapshot. As the renewable share grows
under the Renewable Fuels Standard, we're likely to see more
varieties of fuels and fuel blends seeking EPA approval. All of
these changes, which are coming as a result of federal policy,
must be dealt with. The market wants and deserves some measure
of certainty. Not price guarantees or supply quotas, just some
confidence that if you refine, distribute, blend, or dispense
transportation fuel and you follow all of EPA's rules, you
won't face legal risks for doing so.
H.R. 4345, the subject of today's hearing, does three main
things: First, it says that no one will be liable because a
storage tank or fuel dispensing equipment is not compatible
with a particular fuel, after EPA says it is compatible.
Second, it says no person is liable because a self-service
purchaser fills up with a fuel not approved for his car or
other engine. This is just common sense--like saying the retail
store that sells you antifreeze is not liable if you take it
home and drink it.
Third, it ensures that people who design, make, sell, or
distribute any fuel, vehicle, or engine don't face lawsuits
resulting solely from the fact that an EPA-approved fuel goes
into a vehicle or engine.
Let's be clear on what the bill does not do. It does not
change fuel retailers' or anyone else's environmental cleanup
obligations under RCRA or Superfund. It does not excuse unfair
trade practices or anti-competitive behavior.
And it does not say people who act negligently are not held
accountable. Instead it says that following EPA regulations and
selling EPA-approved fuel is not enough to get you into
trouble.
Mr. Shimkus. Mr. Cassidy, were you looking for time for an
opening statement?
Mr. Cassidy. No.
Mr. Shimkus. Anybody desiring time? If not, the chairman
yields back.
I have been asked by the minority to allow Chairman Waxman,
when he arrives, to give his 5-minute opening statement. I
think that I would like to do that if there is no objection.
Hearing none, then we will move to our first panel. We will
briefly introduce you all, and then we will go--most of you are
experienced here. Your full statement is submitted for the
record. You have 5 minutes.
From my left to right, we have John Eichberger, vice
president government affairs, National Association of
Convenience Stores. Next we have Charles Drevna, president of
American Fuels and Petrochemical Manufacturers.
Gene, I want you to listen to his testimony carefully.
Mr. Green. I reviewed it.
Mr. Shimkus. Bob Dinneen, president and CEO of Renewable
Fuels Association; Shannon Baker-Branstetter, who is the policy
counsel, energy and environment, Consumers Union, Policy &
Action, from Consumer Reports; and K. Allen Brooks, senior
assistant attorney general and chief, Environmental Protection
Bureau, from the State of New Hampshire.
We want to welcome you all. We will start with Mr.
Eichberger. You are recognized for 5 minutes for your opening
statement.
STATEMENTS OF JOHN EICHBERGER, VICE PRESIDENT, GOVERNMENT
RELATIONS, NATIONAL ASSOCIATION OF CONVENIENCE STORES; CHARLES
T. DREVNA, PRESIDENT, AMERICAN FUELS AND PETROCHEMICAL
MANUFACTURERS; BOB DINNEEN, PRESIDENT AND CEO, RENEWABLE FUELS
ASSOCIATION; SHANNON BAKER-BRANSTETTER, POLICY COUNSEL, ENERGY
AND ENVIRONMENT, CONSUMERS UNION POLICY & ACTION FROM CONSUMER
REPORTS; AND K. ALLEN BROOKS, SENIOR ASSISTANT ATTORNEY GENERAL
AND CHIEF, ENVIRONMENTAL PROTECTION BUREAU, STATE OF NEW
HAMPSHIRE
STATEMENT OF JOHN EICHBERGER
Mr. Eichberger. Thank you, Chairman Shimkus and Ranking
Member Green. I appreciate the opportunity to be here to
explain why NACS supports H.R. 4345. The convenience store
industry operates 149,000 stores in the Nation of which about
121,000 sell fuel. Through these stores our industry sells
about 80 percent of the gasoline consumed in the United States
every year. This puts retailers right in the middle of policies
and consumers who are trying to bring them to market.
Our reasons for supporting 4345 are actually quite simple.
As you look into the future for the market, we know new fuels
will be developed. The renewable fuel standard makes this an
absolute certainty, as Chairman Upton mentioned. New renewable
fuels must be brought to consumers. As these fuels are
approved, and consumers begin to ask for them, NACS members
want to satisfy consumer demand and offer these fuels. If they
are not able to do so, it is likely that the goal that Congress
set when it established the RFS will not be met, which is
precisely why 4345 is important.
First, and I think it is important, our members want to be
responsible retailers. They take very seriously their role in
protecting the environment, prevent releases. Some of you were
on the subcommittee when it considered the Energy Policy Act of
2005, and you may remember that NACS was the strongest
advocate, supporting increased enforcement of our gas storage
tank regs. We pushed for legislation to require inspections,
operator training, and shutting down noncompliant tanks.
Our commitment to ensuring the integrity of our tank
systems has not changed. If you think about it, this makes
sense. Convenience stores are part of their communities. In
fact, 58 percent of the stores that sell fuel are one-store
mom-and-pop operators who probably live right around the corner
from the store. They live in the communities they serve, and
they don't want to pollute or tarnish their reputation. They
care about the communities, not to mention, if they have a
release, it is extremely expensive to clean it up. So their
commitment to making sure that the stuff they put in their
tanks does not release is absolutely pure.
Retailers are also reluctant to spend maybe $100,000 to
replace equipment that is perfectly suitable for the fuel they
want to sell, and that is where 4345 comes in. The bill will
establish a mechanism for retailers to determine if their
existing equipment is safe and compatible to dispense a new
fuel. That is it. H.R. 4345 says if the equipment is
technically safe and compatible, it should be legally
recognized as safe and compatible. If the equipment is not
compatible, retailers are going to have to replace it, and that
is the bottom line. We don't want to use noncompatible
equipment, but we shouldn't have to replace equipment that is
compatible. It is that simple.
There is nothing in this bill that changes the retailer's
responsibility to prevent releases or to clean up any
contamination that results from a release. It simply gives them
a legal mechanism for determining if their equipment is
compatible.
The other main reason our members support this bill is to
ensure there is a clear set of rules by which they must operate
and some reasonable legal protections for them when they do
comply with the rules. H.R. 4345 addresses it in two simple
ways. One, if EPA approves a fuel for a subset of engines, the
bill requires EPA to issue regulations to prevent misfueling.
The bill does not dictate what these regulations must say. EPA
may determine that labels are all that is necessary, or it may
require nozzle and fill pipe restrictions, or it may even
require that the fuel be sold behind a locked cage. Whatever
the rules, retailers will comply. And those rules are going to
be determined through the agency rulemaking process.
Once those rules are established, if retailers do comply,
they want to know that if someone else circumvents those rules
and those misfueling provisions, they are not going to be held
responsible for that other party's actions. They do not believe
they should be held accountable for actions that are beyond
their control, and 4345 provides them that protection.
And then once a fuel is approved, and the rules governing
the sale of that fuel are established, retailers will comply.
If the rules change, or a fuel is removed from the market,
retailers will adapt and comply with the new rules. That is
only reasonable, and we do that all the time. However, my
members do not believe it is reasonable to hold them
accountable to comply with a regulation or rule that does not
yet exist. Our members say, tell us what we have to do, and we
will do it, but don't turn around and punish us for someone
else's behavior or hold us responsible if you later change the
rules on us. You have to give us an opportunity to comply with
the new rules.
H.R. 4345 is a reasonable and limited bill that provides
certainty to the market. This is why NACS' members support the
legislation. I urge the committee to proceed with consideration
of enactment of this bill to provide the market with the
certainty it needs to bring innovative fuels to the market.
Thank you. I look forward to your questions.
Mr. Shimkus. Thank you.
[The prepared statement of Mr. Eichberger follows:]
[GRAPHIC] [TIFF OMITTED] 78697.014
[GRAPHIC] [TIFF OMITTED] 78697.015
[GRAPHIC] [TIFF OMITTED] 78697.016
[GRAPHIC] [TIFF OMITTED] 78697.017
[GRAPHIC] [TIFF OMITTED] 78697.018
[GRAPHIC] [TIFF OMITTED] 78697.019
[GRAPHIC] [TIFF OMITTED] 78697.020
[GRAPHIC] [TIFF OMITTED] 78697.021
[GRAPHIC] [TIFF OMITTED] 78697.022
Mr. Shimkus. And now I would like to recognize Mr. Drevna
for 5 minutes, thank you. And your opening statement is in the
record. You have 5 minutes.
STATEMENT OF CHARLES T. DREVNA
Mr. Drevna. Chairman Shimkus, Ranking Member Green and
members of the subcommittee, thank you for giving me the
opportunity today to testify at this hearing on the Domestic
Fuels Protection Act of 2012.
Charlie Drevna, and I serve as AFPM's president. AFPM is a
110-year-old trade association that was formerly known as the
National Petrochemical and Refiners Association up until this
year. AFPM members use oil and natural gas liquids as raw
materials to manufacture virtually the entire supply of U.S.
Gasoline, diesel, jet fuel, home heating oil and other fuels,
along with petrochemicals used in thousands of products.
We support the Domestic Fuels Production Act. Now, as we
have stated for years, and it comes as no surprise to this
subcommittee or any committee in this Congress, we oppose
subsidies, and we oppose mandates. We continue to have serious
questions about the workability, structure, and unintended
consequences of the existing renewable fuel standard. However,
as long as the RFS remains the law, and it is the law of the
land today, our members must work to comply with its
requirements.
The Domestic Fuels Production Act would provide the
necessary legal certainty for all parties in the transportation
fuel supply chain. This is critically important as the
Environmental Protection Agency approves and registers new
fuels and new fuel additives needed to comply with the ever-
expanding RFS.
Under the RFS, 36 billion gallons of renewable fuels must
be available in the U.S. marketplace by 2022, 10 short years
from now. That is a dramatic increase from the 13.7 billion
gallons of renewable fuels available last year.
With rising mandates, falling demand, refiners are required
to increase ethanol content in a shrinking volume of gasoline;
however, the refining industry is only one of several domestic
industries that will have to address these challenges. Engine
manufacturers as well as transportation fuel providers all face
challenges posed by the need for alternative fuels under the
existing RFS. Our challenge again, as long as the RFS is the
law of the land, is to integrate these new fuels in the fuel
supply.
All parties in the transportation fuel supply chain need to
know they will not face a blizzard of unwarranted litigation
simply for complying with the law that Congress deemed
necessary. The Domestic Fuels Production Act provides such
certainty. Companies that use, manufacture, and sell
transportation fuels that meet government-approved, government-
mandated specifications and standards should not be punished
for doing so. The Domestic Fuels Production Act accomplishes
that goal, and we encourage Congress to act on this important
legislation.
Thank you, and I will be happy to respond to any questions
you may have.
Mr. Shimkus. Thank you.
[The prepared statement of Mr. Drevna follows:]
[GRAPHIC] [TIFF OMITTED] 78697.023
[GRAPHIC] [TIFF OMITTED] 78697.024
[GRAPHIC] [TIFF OMITTED] 78697.025
[GRAPHIC] [TIFF OMITTED] 78697.026
[GRAPHIC] [TIFF OMITTED] 78697.027
[GRAPHIC] [TIFF OMITTED] 78697.028
Mr. Shimkus. Next I would like to recognize Mr. Dinneen,
and you are recognized for 5 minutes.
STATEMENT OF BOB DINNEEN
Mr. Dinneen. Thank you, Mr. Chairman. Thank you, Ranking
Member Green, members of the committee. I appreciate the
opportunity to be here today to speak in support of H.R. 4345,
the Domestic Fuels Protection Act.
I got to tell you, I think this is an important hearing in
an important time, because consumers are facing rising gasoline
prices, and if we do not find a way to reduce our dependency on
imported oil, we will continue to suffer the consequences.
At the outset I must note that this committee has already
put in place a program that is today reducing our dependence on
imported oil, creating jobs and economic opportunity across
rural America, and reducing gasoline prices at the pump. That
program is the renewable fuel standard, and that program is
working.
Consider these facts: In 2005, when the RFS was adopted,
the U.S. imported more than 60 percent of our crude oil and
petroleum products; today, in large part because of the RFS, we
are just 45 percent dependent on crude oil imports.
Now, look, it is clear that increased domestic oil
production and increased efficiency have played a role in that
success as well, but consider this: Since 2005, 81 percent of
the increased domestic fuel production in this country has been
ethanol; 8 out of every 10 new gallons of fuel produced in this
country has been ethanol. That is the success of the RFS. That
is the success of ethanol.
Now, as the ethanol industry has continued to grow, indeed
the economic footprint of the industry has just gotten better
as well. The 14 billion gallons of ethanol that were produced
and used in this country last year created some 400,000 jobs.
We added $43 billion to GPD, $30 billion to household income.
That is a success that is being felt all across America.
But perhaps most importantly, as consumers continue to face
skyrocketing gasoline prices at the pump, is that ethanol is
lowering the price consumers pay at the pump today. Two reasons
for that. Ethanol today is a dollar cheaper than gasoline, so
you are adding 10 percent ethanol today, hopefully 15 percent
pretty soon, it is going to reduce consumer gasoline costs
commensurately. But also, because ethanol is now 10 percent of
the Nation's motor fuel supply, we are reducing the demand for
imported oil, and that is having an additional economic benefit
for consumers.
A study that was done last year said that the ethanol
produced in 2010 reduced gasoline prices by 89 cents a gallon.
That is a real benefit to consumers. That is a real benefit of
the RFS.
So I can say without hyperbole or reservation that the RFS
has been the most successful energy policy this Nation has ever
implemented. It should be vigorously defended and maintained
and allowed to reach its full potential of 36 billion gallons
in 2022.
But the RFS is entering a critical period. The volumes of
renewable fuels refiners are required to meet can no longer be
met just by 10 percent ethanol. Greater volumes of ethanol and
a greater diversity of biofuels and feedstocks will be
necessary to meet the increasing volumes required by the RFS.
Critically, these fuels will be attempting to enter the
marketplace amidst a complicated regulatory structure that
favors incumbent technologies and discourages market access.
Gasoline marketers deserve the certainty that they will not be
penalized for utilizing a new fuel or fuel blend that has been
approved for use by EPA.
H.R. 4345 supports the RFS and facilitates the introduction
of additional volumes of renewable fuel by assuring gasoline
marketers don't need to replace perfectly good underground
equipment and above-ground dispensing apparatus to market
renewable fuels. The current regulatory structure provides no
pathway to certify existing equipment for anything other than
fossil fuels. Even when test data demonstrates its safety, the
Domestic Fuels Protection Act allows EPA to create such a
process, thereby providing new fuels access to the marketplace
without having to expend time and resources on new
infrastructure unnecessarily.
The bill also provides assurances to retailers that they
won't be subjected to frivolous lawsuits when they have abided
EPA regulations. The legislation is narrowly tailored to
achieve this goal.
In sum, the RFA supports H.R. 4345 because it is consistent
with the goals of promoting energy independence, through the
increased use of renewable fuels as outlined by the energy
bill. The Domestic Fuels Protection Act would eliminate
technical barriers and speed the introduction of new fuels that
can help decrease our Nation's reliance on oil and lower
gasoline prices.
Chairman Shimkus, you have made a real commitment to the
growth of this industry with your support of this legislation,
with your support of the open fuel standard, which we also
support, and I look forward to working with you and the rest of
the committee to move this legislation forward. Thank you.
Mr. Shimkus. Thank you very much.
[The prepared statement of Mr. Dinneen follows:]
[GRAPHIC] [TIFF OMITTED] 78697.029
[GRAPHIC] [TIFF OMITTED] 78697.030
[GRAPHIC] [TIFF OMITTED] 78697.031
Mr. Shimkus. Now we would like to recognize Shannon Baker-
Branstetter. You are recognized for 5 minutes.
STATEMENT OF SHANNON BAKER-BRANSTETTER
Ms. Baker-Branstetter. Thank you. I am pleased to be here
today representing Consumers Union, the public policy and
advocacy arm of Consumer Reports. My comments today are also
supported by Consumer Federation of America.
Consumers Union opposes the Domestic Fuels Protection Act
of 2012 because it would unfairly burden consumers by shifting
the risks of fuel-related damage entirely onto consumers. This
bill uses EPA's waiver authority under the Clean Air Act as a
shield against consumer product liability, which would leave
consumers solely responsible for damage caused by E15.
In addition, the bill provides sweeping immunity for a
broad array of fuel-related damage to consumer equipment and
underground storage tanks and any resulting leakage that can
devastate drinking water supplies.
The State consumer protection law is still essential to
protect consumers from marketing and selling fuels or additives
in a manner that is likely to cause damage to consumers'
vehicles and equipment, but this bill preempts these important
State protections. EPA's approval of the fuel or fuel additive
has little to no bearing on whether the fuel will damage
consumer products. And EPA is in no position to determine the
scope of a fuel's effect on consumer products outside the
emissions context.
EPA's approval does not imply that as product, the fuel or
fuel additive will not pose other risks for consumer products.
Immunizing fuel providers and vehicle and equipment
manufactures from responsibility if something goes wrong, as
this legislation would do, leaves consumers squeezed in the
middle. If auto manufacturers are allowed to void warranties,
and fuel providers are also immune from liability, consumers
will be left to foot the bill for any damage caused by E15 or
other fuels.
In the case of E15, Consumers Union does not believe that
the EPA label on misfueling goes far enough to prevent
consumers from unintentionally misfueling, and we are not alone
in this belief. Gasoline retailers, petroleum producers and
marketers, and associations representing automakers, outdoor
power equipment and marine engines all stated unequivocally in
their comments in last year's rulemaking on misfueling
mitigation that despite the EPA label, consumers will misfuel,
and the resulting damage could be significant.
That appears to be the reason behind the industry seeking
immunity from liability. Unfortunately, the proposed
legislation, rather than trying to solve the problem of
preventing damage from E15 and easing its transition into the
marketplace, would simply sweep aside all liability from E15
for everyone but the consumer.
Our organization does not want to encourage lawsuits, but
we do want to encourage responsible behavior in marketing and
informing consumers about E15 and selling transportation fuels
more broadly. We hope shared responsibility will actually stave
off lawsuits.
Some level of misfueling is inevitable, but fuel providers
should do all they can to minimize misfueling and ensure the
safety and suitability of fuels they bring to market. By
sharing responsibility for the fuels they sell, fuel providers
will be motivated to enhance safety, minimize consumer
confusion, and help consumers select the proper fuel.
EPA labeling is useful and cost-effective, but it is not
sufficient to prevent misfueling by consumers, with resulting
damage to older vehicles and nonroad engines. Fuel providers
are in the best position to provide tailored warnings,
labeling, or other forms of education to consumers to prevent
misfueling at the point of sale. Removing liability beyond
posting the EPA label will decrease the motivation for adopting
such techniques. Fuel providers know their clientele best and
can proactively help them avoid engine damage.
Consumers Union wants to encourage retailers to adopt local
solutions to help reduce misfueling. Our suggestions include
iconic labels on gas pumps to identify noncompatible products,
dispenser prompts confirming E15 purchases, as well as separate
dispensers for nonvehicle fueling. There are numerous other
signage, outreach, and station configuration options that would
help customers avoid misfueling, but the extension of immunity
would likely undermine the incentive to maximize such measures.
In conclusion, E15 retailers, fuel providers, marketers,
State and Federal regulatory agencies, and consumer protection
offices should all work together to inform consumers of
allowable uses as well as risks of E15. This bill shifts the
risks and costs associated with E15 misfueling onto the
shoulders of consumers and releases many industries from acting
responsibly in marketing and selling transportation fuels.
Thank you for your attention to consumer concerns, and I am
happy to answer any questions.
Mr. Shimkus. Thank you very much.
[The prepared statement of Ms. Baker-Branstetter follows:]
[GRAPHIC] [TIFF OMITTED] 78697.032
[GRAPHIC] [TIFF OMITTED] 78697.033
[GRAPHIC] [TIFF OMITTED] 78697.034
[GRAPHIC] [TIFF OMITTED] 78697.035
[GRAPHIC] [TIFF OMITTED] 78697.036
[GRAPHIC] [TIFF OMITTED] 78697.037
[GRAPHIC] [TIFF OMITTED] 78697.038
[GRAPHIC] [TIFF OMITTED] 78697.039
[GRAPHIC] [TIFF OMITTED] 78697.040
[GRAPHIC] [TIFF OMITTED] 78697.041
Mr. Shimkus. Now I would like to recognize Mr. Brooks for 5
minutes.
STATEMENT OF K. ALLEN BROOKS
Mr. Brooks. Thank you, Mr. Chairman. Thank you for allowing
me to testify today on behalf of the Office of the Attorney
General of the State of New Hampshire.
Before I begin my comments, I would like to specifically
thank the chairman for his comments earlier about our existing
MTBE case, and as reflected by Representative Bass, we do truly
appreciate that. It has left me somewhat despondent because now
I have a lot less to complain about, but I will do the best
that I can in the time that I have.
When we do work together on making this bill something that
we can live with, we are very concerned about section 4(a), as
you may well imagine. We understand that the purpose as set
forth today, and as reflected by some panel members, is to
protect essentially those people who are innocent who are
simply complying with the law from facing liability. We have no
issue with that.
Anyone who is familiar with our MTBE lawsuits knows that we
didn't sue any station owners. We didn't sue any convenience
store owners. We were looking for redress from the people that
we thought actually had a role and could have prevented the
harm. In fact, it is our intention that a portion of whatever
recovery we get go to actually help those convenience store
owners clean up their property.
So we take no issue with that, but we do believe that the
existing section 4(a) as written is too broad, and whether that
is MTBE or maybe--whatever the next equivalent of MTBE is, that
we do need to work on this. It doesn't appear to account for
the behavior of the defendants in any particular case, and that
is the troubling part. So again, I believe that with some work,
through Representative Bass, perhaps we could address some of
those issues, and I do appreciate that opportunity.
And with respect to our existing MTBE case, we do feel it
has to be absolutely clear that it does not impact those types
of litigation and perhaps our case specifically as one of the--
probably one of the biggest in the Nation right now.
Section 4(b), which is what is called the safe harbor
provision is also troubling, at least in its current form. It
is not entirely clear what retroactive application this may or
may not have, but any lack of clarity is a problem for us. When
you have defendants that have significant means, they are able
to raise any issue they possibly can, anything that becomes a
source of delay to a small State like New Hampshire can be a
considerable burden. We only have 1.3 million people. Our MTBE
lawsuit alleges that 1,551 sites are currently contaminated
with MTBE, 40,000 private wells are probably contaminated with
MTBE, as well as hundreds of public water systems. The cost of
that cleanup is hundreds of millions of dollars. That is
hundreds of dollars for every man, woman, and child in New
Hampshire. That can't be borne by the taxpayer.
Specifically, section 4(b) the safe harbor provision talks
about that nothing that essentially is approved by EPA shall
become a defective product. I understand, at least tacitly from
what I can gather, that maybe the focus of that is on strict
liability claims, claims for people who haven't acted
negligently, and specifically for the store owners and the
lower station owners. And again, we don't necessarily have an
issue with the store owners, but first of all, there are
circumstances where the type of strict liability claim has
merit, and someone who had the ability to efficiently resolve a
problem is in a better position to face that type of liability.
But I would point out also that a defective product doesn't
necessarily only apply in strict liability cases. There are
negligence cases where you can say someone was negligent by
introducing a defective product. It appears from the language
that this may affect somehow those types of claims, and
certainly we would want to work with you to make sure that that
didn't happen, especially if that was an inadvertent
consequence.
Briefly with respect to the USTs, New Hampshire has a very
robust program for monitoring USTs. We have recently taken care
of every above-ground storage tank in the State in terms of
regulatory compliance, which was a massive undertaking. We are
now focused on USTs, and I think that the State has done a very
good job.
There are some things that we wonder under this bill
whether New Hampshire can continue to do and just how broadly
that immunity would sweep. For instance, I was alerted very
recently that there are these things called yellow pipes,
essentially connectors between UST tanks and other facilities.
These tanks may have been approved by either EPA or UL at some
point, they may have been compatible at the time they are in,
but we have a program that monitors throughout time, so if in
20 years they are degraded, and we tell someone to fix it, we
expect it to be fixed and not have someone come back and say,
well, that is on the approved list, so go away. So that stands
true for much of our program.
Again, we look forward to working with you on these issues,
and I am sure we will be in contact with Representative Bass.
And I really do appreciate the opportunity to speak today.
Mr. Shimkus. And we welcome you. So thank you.
[The prepared statement of Mr. Brooks follows:]
[GRAPHIC] [TIFF OMITTED] 78697.042
[GRAPHIC] [TIFF OMITTED] 78697.043
[GRAPHIC] [TIFF OMITTED] 78697.044
[GRAPHIC] [TIFF OMITTED] 78697.045
[GRAPHIC] [TIFF OMITTED] 78697.046
Mr. Shimkus. Now I would like to turn, as I mentioned
earlier, to the Ranking Member of the full committee Mr. Waxman
so he has time to do his 5-minute opening statement.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you, Mr. Chairman, and I want to thank
our witnesses today for their presentations. I know that, Mr.
Chairman, you indicated that you are going to be changing some
of the bill, we saw some of the drafting was flawed. And you
particularly commented about changes in the MTBE area for
contaminated drinking water supplies. I appreciate that, but I
think that this bill is flawed beyond just the drafting. With
all due respect, the flaws of this legislation would eliminate
all recourse for communities that have lost their drinking
water supply to MTBE contamination.
There are over 1,500 registered fuels and almost 7,500
registered fuel additives. This legislation would remove all
liability for harm caused by these fuels and fuel additives.
Some of these additives are rarely used because the oil
companies understand that they are powerful contaminants, and
if they enter the groundwater, they can do harm. They can
damage small engines. They can have an impact on public health.
We don't know on this committee the facts for each of these
9,000 fuels and fuel additives. But under this bill, oil
companies can now use them with impunity.
Consider ETBE, which has many of the same chemical
characteristics that have made MTBE such a difficult
contaminant to clean up. This bill would exempt oil companies
liability from for ETBE contamination.
MMT is a fuel additive. It can severely damage engines and
potentially endanger the public health. We should not eliminate
liability from harm caused by MMT, but that is what this bill
does.
MTBE rarely contaminates water by itself. It is usually
part of an underground flume of gasoline from leaking
underground storage tanks. If we remove the liability shield
for MTBE, what about the other constituents in gasoline, such
as benzene that can also contaminate a community's water
supply?
I certainly welcome greater clarity from the Chairman on
how he plans to modify the bill. But the point is, to have this
Committee pick and choose among the 9,000 fuels and fuel
additives, providing liability protections for some and not
others, sounds like the ultimate case of government picking
winners and losers.
If we exempt all of these 9,000 fuels and fuel additives,
we are not picking winners and losers, except we are picking
the losers. Because one point is for sure: that if we pass this
law and absolve Exxon Mobil of any liability for selling
unsafe, dangerous, or defective fuels, we will remove the
incentive for responsible corporate behavior.
There are many other reasons why this legislation, I
believe, is pretty bad.
Section 2 provides that if a convenience store owner
determines that his or her underground storage tanks are
compatible with the fuel, then the owner is exempt from
liability if leaks pollution--if his leaks pollute the
neighbor's drinking water.
Section 3 says if someone sells you fuel that damages your
car or destroys your boat engine, well, you are on your own.
Section 4 has a safe harbor provision for all fuels and
fuel additives that is similar to the one that Representatives
Barton and Bass proposed for MTBE in 2005. Safe harbor is for
the future, but protected New Hampshire's lawsuit on MTBE when
it was offered in 2005. It said other States couldn't engage in
lawsuits. And then it adds a provision to throw out civil
actions that are already in court. And on top of that, it
prohibits even filing certain civil actions. Making it against
the law to turn to the courts for justice runs contrary to our
basic values.
I may be making some factually incorrect statements,
because the Chairman is revising his bill, but the essence of
this bill is to provide exemption from liability. and I am
troubled by exempting from liability people who ought to be
held accountable.
This is, I think, Washington at its worst. There are trade
associations that couldn't agree on this bill. There are real
challenges associated with implementing the renewable fuel
standards mandated by Congress. But the only thing these trade
associations could agree to is to shield themselves from any
liability and shift the costs of harm from their product to the
consumers or to the taxpayers. And this is not going to solve
problems. It is only going to enhance our problems.
Mr. Chairman, I regret to say that I have such troubles
with this bill. I still hold out the chance that we can work on
a bipartisan basis on some of these issues like reauthorizing
the Safe Drinking Water Acts State of Revolving Loan Fund. That
needs to be reauthorized. It should be done in a bipartisan
manner.
I am disappointed that we have gone in the opposite
direction with this legislation. Rather than working to ensure
our communities have safe and affordable drinking water, we are
considering legislation to allow oil companies and others to
pollute groundwater with impunity. That is very disturbing to
me, and I hope that my worst fears are not going to be
realized.
I yield back my time.
Mr. Shimkus. Thank you, Mr. Chairman.
I always say that elected officials need to take big doses
of humble pie and humility, and you continue to offer me a
humble position, and that is a healthy thing in our process. So
I am glad we got you to put in your opening statement.
I would like to recognize myself for 5 minutes for
questions. Mr. Brooks, I do appreciate this. You know, we
haven't really talked MTBE in this committee in a long time, so
I think your concerns took a lot of us by surprise. So with
respect to that--and that is why you have hearings. We have
hearings to address concerns, get input, and try to adjust
legislation, because it is really in the intent to move
something forward to really--if the Environmental Protection
Agency and Federal policy, which we passed not just in the 2005
energy bill, but we expanded it in 2007. 2005, the Republicans
were in majority. 2007, Democrats were in the majority. And we
have continued to move the RFS forward, which is the national
policy, so a legal fuel being administered by a local retailer
may be a family owned--I mean, the major premise is they
shouldn't be harmed by doing what the law is forcing them to
do.
But if you could help provide us summaries of your claims
in the State actions on MTBE and underground storage tanks so
we can exactly see what the basis of the lawsuits are, we would
appreciate that. I think that would help us.
Also, if you could summarize the defendants' responses,
that would help us in trying to go back to our legislative
counsel to try to address these concerns. Would you be willing
to do that as we move this legislation forward?
Mr. Brooks. Yes, Mr. Chairman. Would you like me to do that
now, or just to work with Representative Bass and others on
that?
Mr. Shimkus. You can work with the committee and
Representative Bass, and that would be helpful.
Most people should know that we have just been called for
votes. Of course, we have got 15 minutes to get to the first
vote. We would like to get through at least my opening
questions, maybe Mr. Green's, and then we will then adjourn and
come back, and we will have plenty of time to finish up
afterwards.
This question is to Mr. Eichberger, Mr. Drevna and Mr.
Dinneen. Do you think that this legislation prevents Federal
agencies besides the EPA from issuing or enforcing regulations?
Mr. Eichberger. I do not, Mr. Chairman. I think the
legislation basically sets a precedent that as long as we are
complying with the regulations that are applicable, then we
have some reasonable protections under law.
Mr. Shimkus. Mr. Drevna?
Mr. Drevna. I agree with Mr. Eichberger, but the thing is
we have to make sure that those regulations are tested. We have
to make sure the fuels are tested. We have to make sure there
is consumer protection before entering into any marketplace.
Mr. Shimkus. And Mr. Dinneen?
Mr. Dinneen. I agree that with the assessment that this
does not prevent other agencies from implementing new
regulations.
Mr. Shimkus. Does it affect OSHA in their involvement in
safety and health issues?
Mr. Eichberger. No.
Mr. Shimkus. Mr. Drevna?
Mr. Drevna. No.
Mr. Shimkus. Mr. Dinneen?
Mr. Dinneen. Let the record show that Charlie and I agreed
again.
Mr. Shimkus. It is a scary day.
What about the Consumer Product Safety Commission? Does
this legislation affect any actions that the Consumer Product
Safety Commission might be involved with?
Mr. Eichberger. Not to my knowledge, no.
Mr. Shimkus. Mr. Drevna?
Mr. Drevna. Not in my reading of the bill, sir.
Mr. Shimkus. Mr. Dinneen?
Mr. Dinneen. No, sir.
Mr. Shimkus. Ms. Baker-Branstetter, do you agree with those
summaries of not impacting Federal regulatory agencies to do
the job that they are required to do, and CERCLA, RCRA, and all
of the other Federal laws and rules we have to protect the
health of the public?
Ms. Baker-Branstetter. I can't speak to all of the
environmental laws that you mentioned, but I do agree about
OSHA and the other Federal agencies that you mentioned,
although the Consumer Product Safety Commission may see
increased recalls, as they have already, with E10 for some of
the nonroad engines.
Mr. Shimkus. But that would be actually a statement in
support that we are not depriving the Consumer Product Safety
Commission of their part in evaluating the market.
Ms. Baker-Branstetter. I am not aware there is any
impaction.
Mr. Shimkus. Great, thank you.
I have got 47 seconds. Mr. Dinneen, you say in your
statement that the current regulatory structure provides no
pathway to certifying existing equipment for anything other
than fossil fuels even when test data demonstrates its safety.
Can you elaborate on that?
Mr. Dinneen. Right now, if you have got an underground
storage tank, and a new fuel is coming into the marketplace, or
a new fuel blend like E15, Underwriters Laboratory does not
recertify existing equipment. So even if you were to go and you
were to demonstrate that there is a plethora of scientific
evidence suggesting that there is no safety issue here, you
cannot meet the regulatory burden. This bill provides a pathway
to do that.
Mr. Shimkus. Yes, and if former Speaker Hastert couldn't
get UL to at least address this issue, how can anyone do that?
So I thank you. I yield back my time, and I recognize Mr.
Green for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. I apologize. Having
known Mr. Drevna for many years and worked with him, I will not
refer to you as Charlie.
But let me clear up something before I ask questions. In
your testimony you compare the immunity protection in this bill
to protections afforded to pharmaceutical companies for
vaccines; however, the National Vaccine Injury Compensation
Program did not eliminate the liability. It created a no-fault
system for patients injured by vaccines. So to be clear, it is
a guarantee to injured people, the right to some recourse,
unlike this bill which provides nothing to injured consumers. I
think we are comparing apples and oranges, or maybe even apples
and refined products.
Mr. Drevna. Well, I think, Mr. Green, we have to be certain
that when a fuel or fuel additive has entered into the
marketplace, it affords the same protections to everyone. It
affords the same protections to the consumer, whether it is a
1995 automobile or a 2011 automobile. It affords the same
protection to an off-road vehicle, a handheld power equipment,
a motorboat, or a snowmobile.
In the testimony we compare it to that in the fact that the
pharmaceutical folks have a series of things they go through,
and that particular thing is absolutely government approved.
Now, it may have something else in the marketplace, or some--an
individual kind of reaction. What we are looking at is stop the
bifurcation, stop the trifurcation of EPA, and make sure that
all equipment is safe to use E15 or higher blends safely for
all concerned. That is what we are talking about here.
Mr. Green. I know, but there is a difference between what
we did with pharmaceutical and vaccine immunizations and what
the bill does. I would like this bill to do what we did for the
pharmaceutical industry, because, believe me, I want not only
refiners--and I am proud to represent five of them--but also my
retail outlets, because you are doing what the EPA tells you to
do, and you shouldn't be held liable, but there ought to be
someone there, and the Federal Government ought to be the one
doing it.
Mr. Drevna. Well, I can agree. I think we can agree the
ultimate goal here is to protect the consumer. We are not
trying to make an end run around any consumer. We are trying to
protect the consumer.
Mr. Green. A consumer with a 2000 vehicle shows up at a
station and fuels, and that fuel is bad because it doesn't fit
that particular engine, you have to admit--you know I am not a
big fan of E15, and Mr. Dinneen understands that.
But be that as it may, I understand refiners and retailers
are concerned about the liability and damage from E15, and I
share your concern. That is why we have cosponsored--I have
cosponsored a bill that--523, which was introduced by Mr.
Gonzalez. As I mentioned in my statement, it is the use of
renewable fuels mandated by Federal Law 523 says, the
government should be responsible for any liability, and 523 is
targeted for that response.
But the bill before us today is entirely different. It goes
far beyond just E15. It goes far beyond harm to equipment and
engines and lets individuals end up absorbing the cost.
Ms. Baker-Branstetter, what are some of the problems that
vehicle or equipment owners may experience with E15?
Ms. Baker-Branstetter. Well, in the nonroad engines, lawn
mowers, trimmers, anything that requires gasoline, there could
be corrosion in the gas tank.
Mr. Green. I bought a new motor at Sears last month. That
is a new lawn mower. It could not use E15 even though it was
bought in 2012.
Ms. Baker-Branstetter. Right. EPA has not approved for use
in that appliance.
Mr. Green. So we are going to have to be able to buy our
gas somewhere else from another pump from one of the
convenience stores?
Ms. Baker-Branstetter. Yes. It is very expensive to buy
pure gasoline. Sears does sell it, but it is about $24 and up
per gallon.
Mr. Green. But we can use E10 now in our lawn mowers?
Ms. Baker-Branstetter. Correct.
Mr. Dinneen. I think that is an important point. Small
engines do certify and warranty E10 in most of those vehicles,
and an important distinction, E15 is not being mandated. It
could be an option for those consumers that have a 2001 or
newer vehicle and want to use it because it is appropriate for
their----
Mr. Green. So are we going to be able to have an E10 and
E15 pump at the convenience stores? Is that really possible?
Mr. Eichberger. It is most likely that you are only going
to have a few markets where E15 is even going to be available.
Mr. Green. Well, I will give you an example with only 30
seconds left. The only place that I can find anything but E10
in my district is at a Kroger store, and that is because GM
made an agreement with them to market ethanol. But in my area
it is really difficult to find ethanol, even though I drive a
flex-fuel vehicle. And so that is my problem, because we are an
oil and gas area, and, you know, it is just difficult to get
the renewables.
Now, we can debate MTBE all day, because I lost that battle
in 2005, but we used to make MTBE in our district. Now, we
still make it for export, but not near as much as we used to.
But, Mr. Chairman, I know I am-- I would love to, but I am
running out of time; in fact, I am over time.
Mr. Shimkus. The gentleman's time is expired. You are
welcome to southern Illinois. I will show you where all of my
E85 stations are, and we will get past the E15 debate.
Mr. Green. And I will take you to any refinery I have got.
Mr. Shimkus. So we are going to recess this hearing, and we
have three votes on the floor, which means, what, about an
hour, 45 minutes to an hour. So you can take a break, stretch
your legs, get some coffee, and we will reconvene after votes.
The hearing is recessed.
[Recess.]
Mr. Shimkus. If everyone could take their seats. The great
high-tech committee. I don't care, I don't need it. We will
call the hearing back to order, and I would now like to
recognize Mr. Whitfield for 5 minutes.
Mr. Whitfield. Thank you very much. And I also would like
to thank all of you for coming and testifying on this
legislation today.
I was listening to your opening statements and the comments
made by Ms. Branstetter, and Henry Waxman and others. So we
find ourselves in a situation where we have this Federal
mandate on the renewable fuel standard. We have EPA with
responsibility of administering the renewable fuel standard. We
have EPA issuing regulations to mitigate liability in certain
situations. And yet, as Ms. Branstetter pointed out, we do have
a situation where cars that are older than a certain year, you
can't put E15 in it without damage. And small engines, and lawn
mowers, and so forth, we have that--so we have this liability
problem. We have a liability problem where people, through no
fault of their own, can accidentally have this fuel put in, and
they are going to suffer some damages because of it. So then
the question becomes, well, who really is responsible for that?
And in some ways you can say, you know what, the Federal
Government should be responsible for it.
So I just want to toss out a thought that I had which may
not have any merit at all, but under the Clean Air Act, before
they had the Equal Access to Justice Act, which, as you know,
under the Equal Access to Justice Act, the legal fees are paid
by certain plaintiffs who bring actions under the Clean Area
Act, and then also the Equal Access to Justice Act actually
pays some of the damages in some situations.
So you could almost make an argument here that we could
extend the ability to have access to the Equal Access to
Justice Act under the Clean Air Act for people who end up
suffering damages because of this Federal mandate because of
Federal regulations, and through no fault of their own, they
end up suffering damages for their motors, for their vehicles.
And I was just--this may be so off the wall, but I will just
ask you if you have any comments on that or thoughts on that?
Now, John Shimkus and I, Mr. Chairman Shimkus and I, and
others have really been upset about the Equal Access to Justice
Act because it lacks transparency. We never really know how
much money is being paid out. But if there was ever a time--I
mean, most of that money goes to environmental groups and
others who want to enforce the Clean Air Act when they think
EPA is not enforcing it. Here we have a situation where you
have citizens suffering damages that they had no responsibility
for whatsoever, and why should they not have access to that
fund? So do you all have any thoughts on that?
Mr. Dinneen. Congressman, I will wade into it, because I
don't hear anybody else stepping up.
I am not an expert on the Equal Access to Justice Act, but
in terms of the premise of your question, and I can't speak for
other fuels or fuel additives----
Mr. Whitfield. Yes.
Mr. Dinneen [continuing]. But at least with respect to E15,
I don't think that there is any data anywhere that would
suggest that one act of misfueling E15 into a pre-2001 vehicle
is going to cause damage.
Mr. Whitfield. OK.
Mr. Dinneen. EPA took the action that they did, I believe,
in an abundance of caution, because there wasn't sufficient
data out there for older vehicles. It is real hard to test over
the useful life of an engine a fuel in a vehicle that is that
old. You can't find vehicles to test.
Mr. Whitfield. Yes.
Mr. Dinneen. And so they didn't have appropriate test data.
Now, higher blends of ethanol than E15 are used elsewhere in
the world with no problems whatsoever.
Mr. Whitfield. OK.
Mr. Dinneen. Brazil, as everybody knows, uses a blend of
E25.
Mr. Whitfield. OK.
Mr. Dinneen. So I don't think that one act of misfueling,
anybody would suggest, would cause damage that anybody would
have to seek redress for.
Mr. Whitfield. Well, I am certainly no expert on it. I was
just reading Ms. Branstetter's testimony, and I sort of came to
that conclusion.
So anybody else have any comments? Yes.
Mr. Drevna. Mr. Whitfield, again, I am no expert on that
provision or that particular act. I think the focus as this--as
the bill we are talking about today is focused on not only, you
know, protecting the supply chain from lawsuits----
Mr. Whitfield. Right.
Mr. Drevna [continuing]. But I think we should also be
focused on protecting the consumer. And I guess our--my
agreement or Mr. Dinneen's agreement with me has been short-
lived, but----
Mr. Shimkus. Not surprising.
Mr. Drevna. You know, there is a reason why Congressman
Sensenbrenner had letters delivered to him by the automakers.
And I think we are letting the theory go. I think it has to be
addressed. You know, we are talking about 2000 vehicles
backwards, 1999--whatever. I agree, there are not that many out
there. But there is a reason why those automobile manufacturers
said they will not warranty anything over E10. There is a
reason why the marine manufacturers say they will not warranty
anything over E10. There is a reason why the outdoor power
equipment people say they will not warranty anything over E10.
So, I mean, you know, there is a--it is not because they
are trying to, you know, void any warranties; it is because
they are trying to tell the consumer, be careful, let us not do
this. We haven't had enough testing on this stuff yet.
So yes, we fully support this bill. And as long--as I said
earlier, as long as the RFS with its ever-increasing mandates
for increased renewables blended into gasoline is the law of
the land, that I believe just not--just not only refiners, but
everyone down the supply chain has to be protected.
But I also believe that the consumer ultimately has to be
protected, and it can't be on some four-by-four little thing on
a pump that says--I mean, I am quite surprised at EPA itself
that--when in the history of EPA has compliance with a major
environmental law ever been placed on the consumer? And that is
what they are doing.
Mr. Eichberger. If I can make one quick comment. I don't
know anything about the Equal Access to Justice Act, but this
legislation is not talking about the procedures that EPA goes
through to set certain rules. If we want to talk about EPA not
doing what they are supposed to do, that is a different topic.
Right now we have a process in place. We have rulemaking. We
have comments. There were--I don't think the three of us agreed
on what the misfueling label mitigation measure should be for
E15. EPA made a decision. If we don't like the decision
process, let us talk about that at another forum, but once a
decision is made, we have to have something to rely upon. We
have to be able to live under the rule of law, and that is what
we have right now.
Mr. Shimkus. The gentleman's time is expired. Now I will
now just take a brief second.
You know, the whole diesel story I gave as a prelude, you
can't do that anymore, because they have retrofitted the
nozzles. And the reason why I know that is I was about to do it
one time. Here I was blaming staff; now I--and the system
caught me. So now I would like to recognize Mr. Latta for 5
minutes.
Mr. Latta. Well, thank you, Mr. Chairman. Actually, that is
leading right into my question, about your situation with that
diesel. And, you know, late at night, as Members of Congress
are at home, we put a lot of fuel in our cars, and there is one
time I actually picked up the diesel nozzle, and I looked at
the ends and said, well, at least I couldn't have put it into
the car at that time, or I would have been in big trouble like
you had a while back.
But if I could ask Mr. Eichberger this question: How common
is it for people to maybe misfuel when they are at a pump?
Mr. Eichberger. Well, right now there is not a whole lot of
that happening because most dispensers have three grades of
gasoline. The dispensers are usually on a different nozzle, a
different nozzle size, sometimes a different dispenser
completely. E85 is typically at a different dispenser and very
clearly marked and labeled. Right now we don't have a whole lot
of incidents of that occurring.
Mr. Latta. Let me follow up then. Do you believe that the
posting of the legally required notices would deter a lot of
people from using the wrong fuel when they are at the pump?
Mr. Eichberger. It will deter some. It really is going to
come down to what is the price differential. And unfortunately,
consumers are sometimes willing to take risks with their
vehicles in order to save a couple of pennies at the pump.
The decal requirement--and keep in mind this decal is about
one and a half times bigger than any other decal identifying
fuel identity on the dispenser--has to be put right onto the
selector area, so you will see it. You cannot push an E15
button without seeing an E15 sign. So you are going to be well
informed. Some people will say, you know what? It is 5 cents
cheaper, I am doing it anyway. And that is just the reality of
it.
Consumers--when we were going from lead to unleaded, leaded
gasoline was less expensive. We had nozzle size restrictions
like on diesel fuel. People took can openers and pried open
their fill pipes, or stuck funnels in their cars to put
unleaded fuel in theirleaded cars--or leaded fuel in their
unleaded cars. EPA fined retailers for that action. That is why
we are so concerned.
No matter what EPA does in terms of misfueling, a consumer
who wants to misfuel will find a way to misfuel, and the
retailer cannot prevent that independent action, just like we
couldn't prevent people from manipulating their vehicles in the
1980s to put leaded fuel in unleaded cars.
Mr. Shimkus. Will the gentleman yield for 1 second?
Mr. Latta. I yield to the chairman.
Mr. Shimkus. Just to make a point, we have the 85 pumps all
over southern Illinois. You do have individual citizens mixing
at the retail location. So they may fill half their tank up
with E85 and then the other half with regular gasoline. So that
then what is the litigation issue there, and who is blamed for
a process when it was the individualconsumer's conscious
decision to mix at the pump? And that is kind of part of the
reason why we have been talking about this.
Mr. Latta. Well, thank you. Just to kind of continue on
that line of questioning, you know, what equipment would have
to be replaced? We are talking about, you know, most of the
pumps I see you have got three grades of gasoline, without--if
you don't have the ethanol right there, or diesel, you have
one, two, three. And if you are talking about another, you
know, with the E15, I assume you would have to have put in
another pump, and then you would have to put in more tanks?
Could you fill me in on that?
Mr. Eichberger. Well, each retailer will have to decide how
they want to configure their station, assuming the equipment is
compatible, and that is a big assumption, assuming you have
compatible equipment. Most retail stations have two underground
storage tanks, a regular and premium. We blend through the
dispenser in a blender pump to give you midgrade.
In order to offer an E85 or an E15 mix, we would probably
have to--we would have to dedicate one of those tanks to either
an E85 or a higher-grade ethanol blend in order to get that
product. That would likely lead to us reducing our overall
gasoline offer by a full grade, unless we have room to put in
another tank. Now, there are some places where you don't have
the room, you can't get the permitting. Putting in a tank is
expensive. There is a retailer in California that wanted to put
in a diesel tank. It is going to be $200,000 just to put in a
6,000-gallon tank. So you look at retailers that are making
$35- and $40,000 in pretax profit, $200,000 for installation is
a pretty hefty bill to pick up.
Mr. Latta. You know, and also just follow-up with my last
39 seconds here, without the legislation, who would be liable
pretty much if an individual puts that incompatible fuel in
their--you know, that is a big concern out there.
Mr. Eichberger. Under the Clean Air Act, the retailer could
be find $37,500 per day for each incident for allowing the
consumer to do that. And so the liability could fall directly
on the retailer for the independent action on the consumer.
Mr. Latta. Thank you, Mr. Chairman. I yield back.
Mr. Shimkus. The gentleman yields back his time. The chair
now recognizes my colleague from California Mrs. Capps for 5
minutes.
Mrs. Capps. Thank you, Mr. Chairman. And thank you, each of
you, for your presence here today and your testimony.
In my congressional district and across the country, the
effects of MTBE contamination have been significant. Cities
like Cambria and Oxnard on the central cost of California have
lost their public water supply sources, and homeowners have
lost their private wells. And so many have learned through
personal experience when fuel containing MTBE leaks from an
underground storage tank, the chemical travels quickly through
the soil into sources of drinking water. It makes the water
foul-tasting and undrinkable. Studies suggest that it causes
cancer.
It is very expensive to clean up. According to drinking
water utilities, the total cost to clean up MTBE contamination
of public water systems in this country could be as high at $85
billion. Cities and towns in my district are still seeking to
recover their cleanup costs from the oil companies that caused
the contamination. If this legislation passes, its liability
shield will halt those lawsuits, and leave these communities,
some in my district, with MTBE-contaminated water supply
stranded with billions of dollars in cleanup costs while the
companies that created and distributed the product may pay
little or nothing at all.
Mr. Brooks, I would like to direct a few questions to you.
Can you tell me about the costs and difficulties your State of
New Hampshire has faced with MTBE contamination?
Mr. Brooks. Thank you, Representative Capps, for your
question. It has been a significant concern. Again, our lawsuit
alleges that to actually find and clean up all of the MTBE in
the States, we are talking easily in the hundreds of millions
of dollars. Already, through various funding mechanisms, we
have spent--depends on your estimate, but overall for gasoline,
hundreds of millions of dollars and a significant portion of
that for MTBE.
As you said, MTBE costs more to clean up than other
contaminants. It travels faster, stays longer, and it costs
more money. So we have additional costs, and these costs aren't
going to go away soon because it is a long-lived contaminant.
In New Hampshire, we have different kinds of aquifers. We
have some stratified aquifers, which is essentially sand, but
we also have a lot of bedrock with fractures. MTBE gets in a
fracture, and you cannot tell where it is or where it is going
for many, many years, and it will still be there. So we are
talking about a significant cost.
Mrs. Capps. Do you believe that New Hampshire citizens
should bear these costs of cleaning up pollution?
Mr. Brooks. No, and I was gratified to hear that it seems
to be a fundamental theme of many people on the committee that
people who are harmed need redress. And that is a fundamental
principle for us as well is that someone who has done nothing
wrong. We talked about some instances of someone who puts fuel
in their tank, you know, possibly having some behavior or
warranty voided or something like that, and that is certainly a
concern. We have many instances where the person wasn't
involved at all. They are a homeowner. They might be several
hundred feet away or more from a convenience store. Their
property, their home, which is something that is we consider
sacred in New Hampshire and other places, has been affected,
and they have--they need to have redress.
Mrs. Capps. New Hampshire, you know, is not alone in its
concern about this legislation. The Association of California
Water Agencies is very concerned about this bill and has sent a
letter asking us--and I think it has already been held up by
our ranking member--asking us to ensure that these lawsuits are
not dismissed. As they point out, this bill will further strain
communities already struggling with the cost to repair aging
drinking water infrastructure and further burden ratepayers in
those communities. Do you agree, Mr. Brooks?
Mr. Brooks. Yes.
Mrs. Capps. The California water agencies ask us, and I am
quoting now, ``to ensure that no local community or drinking
water system will be left without the ability to recover costs
associated with remediating MTBE or other similar
contaminations of drinking water sources.''
Is that a position with which you would agree, and perhaps
you speaking on behalf of the State of New Hampshire?
Mr. Brooks. We do. And it is very important for a State
like New Hampshire that has a rural character. We have only 1.3
million people; 200,000 private wells supply drinking water to
people of New Hampshire. Those people don't have the ability to
spend a lot of money to clean things up, and certainly don't
have the ability even sometimes to sue for redress. So it is
very significant that that type of community has the ability to
do what they need to do.
Mrs. Capps. Thank you.
We have already heard today that this legislation will be
redrafted so that it is no longer a liability shield for MTBE.
If this bill is amended so that MTBE is not covered, will you
still be concerned about your State's ability to recover costs
when contamination from other fuels, the next MTBE, if you
will, and fuel additives occur in the future?
Mr. Brooks. We will be concerned any time where someone has
been harmed, especially wrongfully, by the conduct of another
party where they could not seek redress. So we would want to
make sure that someone has some means for compensation if
actually they have been harmed.
Mrs. Capps. Thank you.
I share these concerns, and I urge this committee to heed
the request of those water agencies to make sure that
communities are not left without the ability to recover costs
when polluters contaminate their water supply.
I yield back.
Mr. Shimkus. The gentlelady yields back her time.
Seeing no other Members, I can ask, Mr. Green, do you have
anything else you want to add?
Mr. Green. Mr. Chairman, we could probably talk all day,
and let Charlie and Bob talk, too, and--but I appreciate you
doing this legislative hearing. I know we were just talking,
and I said it publicly, there is a solution. We need to do this
for both the refiners and our retailers, and hopefully we can
work together and come up with a plan.
Mr. Shimkus. Seeing no other Members, this hearing is
adjourned.
[Whereupon, at 11:25 a.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
[GRAPHIC] [TIFF OMITTED] 78697.047
[GRAPHIC] [TIFF OMITTED] 78697.048
[GRAPHIC] [TIFF OMITTED] 78697.049
[GRAPHIC] [TIFF OMITTED] 78697.050
[GRAPHIC] [TIFF OMITTED] 78697.051
[GRAPHIC] [TIFF OMITTED] 78697.052
[GRAPHIC] [TIFF OMITTED] 78697.053
[GRAPHIC] [TIFF OMITTED] 78697.054
[GRAPHIC] [TIFF OMITTED] 78697.055
[GRAPHIC] [TIFF OMITTED] 78697.056
[GRAPHIC] [TIFF OMITTED] 78697.057
[GRAPHIC] [TIFF OMITTED] 78697.058
[GRAPHIC] [TIFF OMITTED] 78697.059
[GRAPHIC] [TIFF OMITTED] 78697.060
[GRAPHIC] [TIFF OMITTED] 78697.061
[GRAPHIC] [TIFF OMITTED] 78697.062
[GRAPHIC] [TIFF OMITTED] 78697.063
[GRAPHIC] [TIFF OMITTED] 78697.064
[GRAPHIC] [TIFF OMITTED] 78697.065
[GRAPHIC] [TIFF OMITTED] 78697.066
[GRAPHIC] [TIFF OMITTED] 78697.067
[GRAPHIC] [TIFF OMITTED] 78697.068
[GRAPHIC] [TIFF OMITTED] 78697.069
[GRAPHIC] [TIFF OMITTED] 78697.070
[GRAPHIC] [TIFF OMITTED] 78697.071
[GRAPHIC] [TIFF OMITTED] 78697.072
[GRAPHIC] [TIFF OMITTED] 78697.073
[GRAPHIC] [TIFF OMITTED] 78697.074
[GRAPHIC] [TIFF OMITTED] 78697.075
[GRAPHIC] [TIFF OMITTED] 78697.076
[GRAPHIC] [TIFF OMITTED] 78697.077
[GRAPHIC] [TIFF OMITTED] 78697.078
[GRAPHIC] [TIFF OMITTED] 78697.079
[GRAPHIC] [TIFF OMITTED] 78697.080
[GRAPHIC] [TIFF OMITTED] 78697.081
[GRAPHIC] [TIFF OMITTED] 78697.082
[GRAPHIC] [TIFF OMITTED] 78697.083
[GRAPHIC] [TIFF OMITTED] 78697.084
[GRAPHIC] [TIFF OMITTED] 78697.085
[GRAPHIC] [TIFF OMITTED] 78697.086
[GRAPHIC] [TIFF OMITTED] 78697.087
[GRAPHIC] [TIFF OMITTED] 78697.088
[GRAPHIC] [TIFF OMITTED] 78697.089
[GRAPHIC] [TIFF OMITTED] 78697.090
[GRAPHIC] [TIFF OMITTED] 78697.091
[GRAPHIC] [TIFF OMITTED] 78697.092
[GRAPHIC] [TIFF OMITTED] 78697.093
[GRAPHIC] [TIFF OMITTED] 78697.094
[GRAPHIC] [TIFF OMITTED] 78697.095
[GRAPHIC] [TIFF OMITTED] 78697.096
[GRAPHIC] [TIFF OMITTED] 78697.099
[GRAPHIC] [TIFF OMITTED] 78697.100
[GRAPHIC] [TIFF OMITTED] 78697.097
[GRAPHIC] [TIFF OMITTED] 78697.098