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

             THE AMERICAN ENERGY INITIATIVE, PART 22: EPA GREENHOUSE

                                  GAS REGULATIONS
    =======================================================================

                                    HEARING

                                   BEFORE THE

                        SUBCOMMITTEE ON ENERGY AND POWER

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JUNE 29, 2012

                                   __________

                               Serial No. 112-158

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

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                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman

    JOE BARTON, Texas                    HENRY A. WAXMAN, California
      Chairman Emeritus                    Ranking Member
    CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
    ED WHITFIELD, Kentucky                 Chairman Emeritus
    JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
    JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
    MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
    GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
    LEE TERRY, Nebraska                  ANNA G. ESHOO, California
    MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
    SUE 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 B. McKINLEY, West Virginia
    CORY GARDNER, Colorado
    MIKE POMPEO, Kansas
    ADAM KINZINGER, Illinois
    H. MORGAN GRIFFITH, Virginia

                                     7_____

                        Subcommittee on Energy and Power

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

                                      (ii)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Ed Whitfield, a Representative in Congress from the
      Commonwealth of Kentucky, opening statement....................     2
        Prepared statement...........................................     4
    Hon. Bobby L. Rush, a Representative in Congress from the State
      of Illinois, opening statement.................................     6
    Hon. Henry A. Waxman, a Representative in Congress from the State
      of California, opening statement...............................     7
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, prepared statement...................................    53

                                    Witness

    Regina McCarthy, Assistant Administrator for Air and Radiation,
      Environmental Protection Agency................................     8
        Prepared statement...........................................    11
        Answers to submitted questions...............................    54

                               Submitted Material

    Report, dated June 2012, ``Gearing Up: Smart Standards Create
      Good Jobs Building Cleaner Cars,'' BlueGreen Alliance,
      submitted by Mr. Rush \1\......................................

    ----------
    \1\ The information is available at http://
      www.bluegreenalliance.org/news/
      publications/document/AutoReport_Final.pdf.

    THE AMERICAN ENERGY INITIATIVE, PART 22: EPA GREENHOUSE GAS REGULATIONS

                                  ----------

                             FRIDAY, JUNE 29, 2012

                      House of Representatives,
                      Subcommittee on Energy and Power,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 9:05 a.m., in
    room 2123, Rayburn House Office Building, Hon. Ed Whitfield
    (chairman of the subcommittee) presiding.
        Members present: Representatives Whitfield, Shimkus,
    Walden, Terry, Burgess, Scalise, McMorris Rodgers, Olson,
    McKinley, Gardner, Pompeo, Griffith, Rush, Castor, Markey,
    SGreen, and Waxman (ex officio).
        Staff present: Anita Bradley, Senior Policy Advisor to
    Chairman Emeritus; Maryam Brown, Chief Counsel, Energy and
    Power; Allison Busbee, Legislative Clerk; Patrick Currier,
    Counsel, Energy and Power; Andy Duberstein, Deputy Press
    Secretary; Cory Hicks, Policy Coordinator, Energy and Power;
    Heidi King, Chief Economist; Ben Lieberman, Counsel, Energy and
    Power; Mary Neumayr, Senior Energy Counsel; Phil Barnett,
    Democratic Staff Director; Alison Cassady, Democratic Senior
    Professional Staff Member; Greg Dotson, Democratic Energy and
    Environment Staff Director; Kristina Friedman, Democratic EPA
    Detailee; and Caitlin Haberman, Democratic Policy Analyst.
        Mr. Whitfield. I would like to call this hearing to order
    this morning.
        Before I make my opening statement, I would like to
    recognize Mr. Shimkus for a special introduction he would like
    to make this morning.
        Mr. Shimkus. Thank you, Mr. Chairman.
        We want to always welcome all of our guests who come to the
    Energy and Commerce Committee, especially those we ask to come
    to testify. But I want to make sure I recognize my son, Daniel
    Shimkus, who is in the back there, very humble, and he has been
    joining me this week. So thank you, Mr. Chairman, for letting
    me do that; and I am going to take him to get a nice big omelet
    for breakfast.
        Mr. Whitfield. Well, thank you, and we appreciate him being
    with us this morning, as well as everyone else in the audience,
    because this will be an exciting morning with Ms. McCarthy
    here, and we appreciate her being here as well.

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

        This is the 22nd day of our hearing on the American Energy
    Initiative, and today we are going to discuss the EPA's
    greenhouse gas regulatory agenda.
        On June 19th, we heard testimony from a variety of job-
    creating sectors of the economy; and all of them expressed
    significant concerns about current and upcoming greenhouse gas
    regulations.
        As I have said, we are pleased to be joined today by EPA
    Assistant Administrator for Air and Radiation, Gina McCarthy.
    We welcome her back and look forward to learning more about
    EPA's perspectives on these regulations and their impacts on
    the economy and jobs.
        I would like to just make a couple of comments about the DC
    Circuit Court decision on EPA's greenhouse gas regulations that
    was handed down earlier this week and want to focus in on the
    Tailoring Rule, and I would like to make clear that the Court
    declined to pass a judgment on the Tailoring Rule, simply
    because it concluded that none of the petitioners had the
    standing to challenge it.
        So as permitting thresholds under the Tailoring Rule are
    ratcheted down in the coming years, it is going to affect
    hundreds of thousands of farms and small businesses. We had a
    witness representing the American Farm Bureau Federation just a
    couple of days ago who testified that farmers and ranchers
    receive a double economic jolt from the regulation of
    greenhouse gases from stationary sources.
        First, any cost incurred by the utilities, refiners,
    manufacturers, and other large emitters to comply with
    greenhouse gas regulatory requirements will be passed on to the
    consumers, and certainly that is them, because they buy a lot
    of products. And, secondly, farmers and ranchers will face the
    distinct possibility themselves of direct regulatory costs
    resulting from regulation of greenhouse gases by EPA once EPA
    starts reducing the limits set out in the Tailoring Rule.
        When asked about the ultimate consequences of EPA's
    greenhouse gas agenda, Mr. Shaffer predicted that many small
    farmers may actually end up going out of business; and the
    American Bakers Association spoke about absurd implications of
    lower thresholds under the Tailoring Rule and asked the
    question, would our baker tell a retail grocer to wait on
    filling a hot dog order while he applied for a permit
    modification?
        The bottom line is that the cost of any new, overly broad
    rules that regulate greenhouse gas and baking ovens will
    ultimately force American families to pay much more for baking
    goods and that some expansions planned by the bakers will not
    take place, thus reducing jobs that might have been available
    at this time when our economy needs them most.
        I am also deeply troubled by EPA's continued views on coal
    and the role of greenhouse gas regulations relating to coal.
    Ms. McCarthy's written testimony today claims that the
    greenhouse gas new source performance standards provides a
    pathway forward for coal. But at the June 19th hearing we heard
    from an electric cooperative who testified quite clearly that
    this is simply an illusion. Steven Winberg, the chairman of
    FutureGen Industrial Alliance, stated that, in effect, EPA's
    rule will eliminate any new coal for years to come because EPA
    is requiring new coal fuel power plants to meet a natural gas
    equivalent CO2 standard before carbon capture and sequestration
    technology is commercially available.
        And I might add that Alpha Coal and Arch Coal recently
    announced mine shutdowns and layoffs in Kentucky. The impact on
    jobs is no longer a matter of conjecture. It is a reality for a
    growing number of miners and others whose employment depends on
    coal.
        Although EPA officials constantly refer to health benefits
    of their multitude of rules, they do not even consider the
    health impact on the families of the coal miners and others who
    lose their jobs. Of course, that is not surprising since, when
    he was a candidate for president, Mr. Obama in a speech in San
    Francisco said that his policies would end up bankrupting the
    coal industry.
        And coal is not the only energy source under siege. A small
    business refiner testified that greenhouse gas regulations
    would result in reduced domestic refining capacity, loss of
    high-paying manufacturing jobs, and higher fuel costs for the
    consumers. So we have a lot of concerns, even though this
    greenhouse gas regulation is not final.
        [The prepared statement of Mr. Whitfield follows:]
        [GRAPHIC] [TIFF OMITTED] T0508.001

        [GRAPHIC] [TIFF OMITTED] T0508.002

        Mr. Whitfield. And I see my time is already expired. So, at
    this time, I would like to recognize the gentleman from
    Illinois, Mr. Rush, for his opening statement.

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

        Mr. Rush. I want to thank you, Mr. Chairman, and I applaud
    you for holding this hearing today, especially in the wake of
    such stunning court defeats, undermining the argument that you
    and the other--the majority side, the other side, has been
    making against the policies of the Obama administration.
        Mr. Chairman, in this case, I am of course referring to the
    DC Circuit Court of Appeals ruling on Tuesday, which, in a
    unanimous decision, the judges strongly and fairly affirmed
    EPA's authority to regulate greenhouse gas emissions.
        Mr. Chairman, I would be remiss if I did not also applaud
    and commend Assist Administrator for Air and Radiation, Miss
    Gina McCarthy, for the expertise, for the professionalism, and
    for the dedication that she has always displayed each time she
    has come before this committee to defend her agency. Although
    she is too much of a professional to admit it, I am sure she
    must take a great amount of personal and professional
    satisfaction in knowing that the courts have once again
    validated the work that she and her agency have been doing on
    behalf of the American people.
        Mr. Chairman, in a resounding and unequivocal victory for
    the EPA and its regulatory authority, the Federal Appeals Court
    decision rebuffed industry arguments against four important
    Obama EPA rulings. The Court upheld EPA's endangerment finding
    which established that greenhouse gases contribute to climate
    change and harm human health; the Tailoring Rule, which narrows
    permitting a requirement to only the heaviest emitting
    industries, exempting smaller facilities; the Tailpipe Rule,
    which allows EPA to create common standards for light-duty
    vehicles, in addition to the National Highway and Traffic
    Safety Administration fuel efficiency standards; and the Timing
    Rule, which requires that greenhouse gas emission standards
    from stationary sources take effect at the same time as the--
    rule.
        Mr. Chairman, in their arguments, the judges ruled that the
    endangerment findings and the Tailpipe Rule were neither
    ``arbitrary'' nor capricious, while also declaring that EPA's
    interpretation of the Clean Air Act was--and again I quote--
    ``unambiguously correct,'' end of quote. And to the chagrin and
    contrary to the decisions of the waves of witnesses that have
    come before this subcommittee, the Court also found that
    industry petitioners had no standing to challenge the Timing
    and Tailoring Rules, because these rules would, in fact,
    benefit rather than harm them.
        Mr. Chairman, today's decision--or Tuesday's decision,
    rather--simply confirms the Supreme Court's 2007 Massachusetts
    v. The EPA ruling that the agency does have the right and
    indeed does have the obligation to regulate carbon since
    greenhouse gas emissions meet the definition of a pollutant
    under the Clean Air Act.
        Despite the talking points that we have heard time upon
    time, countless times, from industry representatives appearing
    before this subcommittee, hopefully these Federal Appeals Court
    rulings to uphold EPA's basis for regulating greenhouse gas
    emissions has deprived the majority party and their industry
    allies of many of their most-often-repeated arguments against
    EPA climate regulations.
        Mr. Chairman, I hope that Tuesday's decision will spur the
    majority party to work with our side to find constructive ways
    to strengthen the provisions on the Clean Air Act and to find
    collaborative ways to address legitimate concerns where they
    may exist.
        Mr. Chairman, with that, I yield back the balance of my
    time.
        Mr. Whitfield. Thank you, Mr. Rush.
        At this time, I would like to recognize the gentleman from
    California, Mr. Waxman, for 5 minutes.

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

        Mr. Waxman. Thank you, Mr. Chairman.
        I am sorry to hear the statement about people losing their
    jobs in the coal industry. I know that is very difficult for
    those people and their families. But I would respectfully
    submit that if they are losing their jobs, it is not because of
    regulation. It is primarily because they are not able to
    compete in the marketplace where natural gas is cheaper.
        But today's hearing continues the 18-month Republican
    attack on the Clean Air Act, EPA regulations, and the science
    that informs our understanding of the effects of air pollution.
    The House Republicans have made this the most anti-environment
    House in history. To date, the Republicans have voted more than
    270 times on the House floor to weaken long-standing public
    health and environmental laws, block environmental regulations,
    defund environmental protections, and oppose clean energy.
        The most shameful aspect of this anti-environment campaign
    is the denial of science. There is no way to govern responsibly
    if you refuse to accept the findings of the National Academy of
    Sciences and the rest of the scientific community. Yet that is
    what is happening on this committee.
        Here is what one of the world's preeminent science
    journals, Nature, wrote about this committee's votes to deny
    the existence of climate change: ``It is hard to escape the
    conclusion that the U.S. Congress has entered the intellectual
    wilderness, a sad state of affairs in a country that has led
    the world in many scientific arenas for so long. Misinformation
    was presented as fact, truth was twisted, and nobody showed any
    inclination to listen to scientists, let alone learn from them.
    It has been an embarrassing display not just for the Republican
    party but also for Congress.''
        This willful blindness may enrich oil companies and other
    big polluters, but it is reckless, and it is dangerous. And I
    would submit that the coal industry is going to suffer even
    more because they are not willing to work with us to try to
    find a way to make coal a viable option in our energy portfolio
    by figuring out the technology to remove the carbon emissions.
        All you need to do, if you doubt my concerns about paying
    attention to scientists, just turn on the news. Wildfires are
    burning hundreds of homes in Colorado. Rains are flooding
    Florida. These extreme weather events will become more common
    as we deny the science and pretend we can ignore the laws of
    nature.
        Earlier this week, the DC Circuit Court of Appeals provided
    a refreshing dose of reality. In a unanimous decision, which
    included Reagan-appointed Chief Judge Sentelle, the panel
    dismissed all the challenges to EPA's endangerment finding,
    tailpipe standards for greenhouse gases, and Tailoring Rule.
        House Republicans have said over and over again that EPA is
    acting without congressional authorization. Here is what the
    Court said about that: EPA's interpretation of the governing
    Clean Air Act provisions is ``unambiguously correct.''
        This decision was a huge victory for science. The Court
    dismissed every challenge to the adequacy of the scientific
    record, supporting the finding that greenhouse gases endanger
    public health and the environment. The Court found that an
    ``ocean of evidence''--that is in quotes because that is their
    term--supported EPA's findings, and it held that EPA was right
    to rely on the work of the National Academy of Sciences and
    other authoritative bodies writing, ``This is how science
    works. EPA is not required to prove the existence of the
    atom.''
        Today, we will hear from Gina McCarthy, who runs the air
    program at EPA. As the Court recognized, she and her agency are
    acting responsibly. They are listening to scientific experts.
    They are crafting responsible policies. Yet all this committee
    tries to do is throw sand in the gears. Our record is a
    deplorable one of denial and obstructionism.
        The question we should be asking is not what we can do to
    stop reasonable regulation but how we can help the families
    whose homes are being burned in Colorado Springs and flooded in
    St. Petersburg and how we can help the families who are losing
    jobs in the coal industry because that industry is refusing to
    recognize reality.
        I yield back the balance of my time.
        Mr. Whitfield. Thank you, Mr. Waxman.
        At this time, I would like to recognize Ms. McCarthy. Thank
    you very much for joining us today, and you are recognized for
    5 minutes for your opening statement.

     STATEMENT OF REGINA MCCARTHY, ASSISTANT ADMINISTRATOR FOR AIR
             AND RADIATION, ENVIRONMENTAL PROTECTION AGENCY

        Ms. McCarthy. Thank you, Chairman Whitfield, Ranking Member
    Rush, and other members of the committee. I appreciate the
    opportunity to testify today on EPA's efforts to reduce carbon
    pollution under the Clean Air Act.
        The Supreme Court held in 2007 that greenhouse gases are
    covered by the Clean Air Act's broad definition of air
    pollutants. Just this week, the U.S. Court of Appeals for the
    DC Circuit confirmed that EPA followed both the science and the
    law in issuing the endangerment finding for greenhouse gases
    and in proceeding to take common sense actions to address
    carbon pollution from vehicles and other large sources. The
    Court found, and I quote, ``that the body of scientific
    evidence marshaled by EPA in support of the endangerment
    finding is substantial.'' End quote.
        The Court confirmed that the Clean Air Act required EPA to
    set greenhouse gas standards for cars and light-duty trucks and
    that the Act unambiguously requires application of stationary
    source permitting programs to greenhouse gases.
        Finally, the Court ruled that EPA's Tailoring Rule
    alleviates burden on industry and the States, and they
    dismissed all challenges to that rule.
        Reducing greenhouse gas pollution is critically important
    to the Americans' public health and the environment upon which
    we depend. As the Court underscored, there is abundant
    scientific evidence that the Earth is warming, that
    anthropogenic carbon pollution is largely responsible for that
    warming, and that if climate change goes unchecked it could
    have devastating impacts on the United States and this planet.
        Climate change resulting from carbon pollution is leading
    to more frequent and intense heat waves and is projected to
    increase ozone pollution over broad areas. It is expected to
    lead to sea level rise, more intense hurricanes and storms,
    heavier and more frequent flooding, increased drought, and more
    severe wildfires, events that can cause deaths, injuries, and
    billions of dollars of damage to property and the Nation's
    infrastructure. Some of these impacts already have been
    observed.
        EPA's first step to reduce harmful greenhouse gas pollution
    have begun with motor vehicles which are responsible for nearly
    a fourth of the U.S. greenhouse gas emissions. At President
    Obama's direction, EPA and the National Highway and Traffic
    Safety Administration have worked together to set greenhouse
    gas and fuel economy standards for model years 2012 to 2016
    passenger vehicles and to propose standards for model years
    2017 to 2025. Over the life of these vehicles, these standards
    will save an estimated $1.7 trillion for consumers and
    businesses and cut America's oil consumption by 12 billion
    barrels, while they reduce greenhouse gas emissions by 6
    billion metric tons. EPA and NHTSA standards for heavy-duty
    trucks and buses, which were issued in August of 2011, present
    a similar success story which is outlined in my written
    testimony.
        In January, 2011, States and EPA initiated Clean Air Act
    permitting of greenhouse gas pollution from the largest and new
    and modified stationary sources. EPA's Tailoring Rule upheld by
    the Court this week phases in these permitting requirements by
    focusing on large industrial sources. To date, dozens of large
    facilities such as cement plants, power plants, refineries, and
    steel mills have already received permits for greenhouse gas.
        On March 27th, 2012, EPA proposed a carbon pollution
    standard for new power plants. Power plants represent the
    single largest source of industrial greenhouse gas emissions in
    the United States, accounting for approximately 40 percent of
    U.S. CO2 emissions. EPA's proposed new standards for power
    plants, just new power plants, could be met by current natural
    gas combined cycle units or by units that are fueled by coal or
    petroleum coke that use carbon capture and sequestration, or
    CCS.
        The Nation's electricity comes from diverse and largely
    domestic energy sources, including coal, natural gas, nuclear,
    and, increasingly, renewable energy sources. The proposed
    standard that we have put on the table for public comment does
    not change that fact. It reflects the ongoing trend in the
    power sector to build cleaner power plants, while providing a
    path forward for coal with CCS.
        Over the past 3 years, EPA has proceeded in a careful and
    deliberate manner to address carbon pollution under the Clean
    Air Act consistent with the resounding body of science as well
    as the law. Our experience during more than 40 years of Clean
    Air Act implementation is that pollution reduction and a
    healthy economy go hand in hand. Together with other policies,
    Clean Air Act measures to reduce carbon pollution can combat
    harmful climate change while at the same time supporting a
    transition to a cleaner, more efficient, and more prosperous
    energy future.
        Again, thank you for allowing me the opportunity to
    testify; and I am happy to take questions.
        [The prepared statement of Ms. McCarthy follows:]
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        Mr. Whitfield. Thank you, Ms. McCarthy.
        Ms. McCarthy, you testified here on March 28th, and you
    testified that--you made the comment that the EPA rules really
    were not a major factor on coal plants because coal plants were
    not going to be built anyway. And Mr. Pompeo asked you the
    question, he asked, is that your theory? Do you actually
    believe that? And you said, that isn't my theory. That is an
    analysis by the Energy Information Office and EIA. They are the
    ones that have done modeling that took a look at what power
    plants are being constructed, and et cetera.
        And then, just a few minutes ago, Mr. Waxman made the
    comment that the coal areas are not facing reality. He said
    they are not being built because of market forces and that
    gasoline prices--natural gas prices are so low. And we
    recognize that natural gas prices are very low.
        But the CBO, in a most recent study, indicated quite
    clearly that, in addition, that one of the major factors
    related to the lack of building additional coal plants was
    about environmental regulations; and they specifically talk
    about greenhouse gases.
        And then, in addition to that, you had referred to EIA,
    that they were the ones saying that we were not going to be
    building additional coal plants because of natural gas prices.
    In EIA's most recent report, they said, ``In the absence of
    greenhouse gas policies there would be 40 gigawatts of new
    coal-fired capacity built from 2011 to 2035.''
        So my point is this: I have had a real problem with EPA. I
    know that you are doing your job. You are trying to meet the
    requirements. But you all continue to mislead the American
    people. Sure, natural gas price is one factor, but I don't know
    how you possibly deny that these regulations--the Utility MACT,
    Cross-State Air Transport Rule, the Boiler MACT, the greenhouse
    gas regulations--all of these, a multitude, how can you say
    that they are not having an impact on coal being competitive in
    the global marketplace and in the marketplace in the United
    States?
        Ms. McCarthy. Mr. Chairman, I believe that EPA and my
    statements have been consistent in saying that we understand
    that there is a market shift in the energy world. We understand
    that there is inexpensive natural gas.
        Mr. Whitfield. But why?
        Ms. McCarthy. Because there is inexpensive natural gas.
        Mr. Whitfield. And what else?
        Ms. McCarthy. And low energy demand.
        No one has ever denied that our regulations aren't a factor
    in----
        Mr. Whitfield. They are a factor. You accept that they are
    a factor?
        Ms. McCarthy. They are a factor. However----
        Mr. Whitfield. That is what I wanted to hear.
        Now, let me just give you another example. When you all
    passed the Utility MACT, you refer to it as Mercury and Air
    Toxic Standards.
        Ms. McCarthy. Yes.
        Mr. Whitfield. And we talked about this before, but that
    was sold on the basis that mercury emissions were going to be
    the primary benefit. There would be benefits because of mercury
    emissions. And all of the analysis--your analysis, independent
    analysis--showed that the primary benefit came from reduction
    of particulate matter, not mercury emission. And every time we
    had a hearing up here, our friends on the other side of the
    aisle specifically talked about, oh, my gosh, we are going--the
    benefits from mercury reduction.
        And my whole point is that is misleading the American
    people. Sure, there were benefits from Utility MACT or mercury
    and air toxic standards, but the primary benefit was not
    mercury reductions. Would you agree with that?
        Ms. McCarthy. No, I would not, sir. What I would----
        Mr. Whitfield. Your own analysis said that.
        Ms. McCarthy. What I would indicate to you is that that
    rule was to follow the Clean Air Act and to regulate a major
    source of toxic pollution. We regulated those toxics. As part
    of that it required controls that would also reduce particulate
    matter.
        Mr. Whitfield. Yes, but your own analysis--your own
    analysis indicate that the primary benefit came not from
    mercury reduction but particulate matter reduction.
        Ms. McCarthy. The distinction I am trying to make, sir, is
    that the primary benefit that we are able to capture through
    cost benefit is particulate matter. That does not mean that
    there isn't significant public health benefit associated with
    reducing toxins.
        Mr. Whitfield. But it was sold based on mercury reduction.
    That is what everybody talked about.
        My time has expired, and at this time I would like to
    recognize the gentleman from Illinois, Mr. Rush, for 5 minutes.
        Mr. Rush. Assistant Administrator McCarthy, I want to thank
    you for being here today; and as I stated in my opening
    statement, I want to thank you for being a true professional
    each time you have been called to appear before this
    subcommittee. And despite the bullying and the criticism that
    you have personally experienced and the viscous attacks against
    the agency that you represent, you have maintained your
    composure, your professionalism and have continued to
    faithfully execute the duties of your office; and I commend you
    and all of your colleagues over at the EPA for continuing to
    stand up for millions of Americans who might not have the money
    nor the political influence that industry has but who still
    expect for their rights and their interests to be protected.
        So, again, I will applaud you, and I am eager to hear what
    you have to say on the implications of Tuesday's Federal Court
    rulings.
        For the record, would you please inform the subcommittee on
    the most important points of the Federal Appeals Court ruling,
    especially as it relates to the charges you heard countless
    times that EPA--here in this subcommittee that the EPA is
    overreaching and exceeding its authority to regulate greenhouse
    gases under the Clean Air Act?
        Ms. McCarthy. I would be happy to.
        First, thank you for your kind words. I consider it a
    privilege to be here. I would perhaps like to be less
    privileged at times, but it is wonderful to be here, and I have
    great respect for this body, so thank you very much.
        In answer to your question, the Court made some tremendous
    statements in support of the substance of the evidence and the
    science that underpinned EPA's decision that carbon pollution
    represents a significant threat to public health and welfare in
    this country. It overwhelmingly said that EPA was following the
    Clean Air Act when it indicated that the Light-Duty Vehicle
    Rule, also that carbon pollution from light-duty vehicles rules
    contribute, and as soon as we made that determination we moved
    forward with the rules that the Clean Air Act did require us to
    then look at the permitting of stationary sources.
        It also indicated that when we did that--and we phased that
    in in a common sense way, just focused on the largest sources,
    and we took a very deliberate and phased approach to looking at
    how we would address any smaller sources. It said that that
    rule did not impose burdens on industry or States. In fact, it
    was a deregulation, and it dismissed all of those charges.
        So it has, in essence, provided tremendous support that we
    were both following the law and the science, which is our jobs
    and what Congress asked EPA and authorized and required us to
    do.
        Mr. Rush. Thank you. I know that it was a resounding
    statement of support for your past activities.
        Can you explain how this decision impacts EPA's work moving
    forward or would it have any effect on your work as you move
    forward?
        Ms. McCarthy. EPA has designed a strategy which continues
    to be a deliberate, common sense approach to regulating carbon
    pollution, which is necessary to protect public health and
    welfare. But we have found a way to do that and a way that,
    again, just focuses on the larger sources. And I think we have
    shown that time and time again not only in how we are issuing
    permits in a timely way under the Tailoring Rule and how we
    have moved forward with the greenhouse gas new source
    performance standard that just addresses new power plants and
    in a way that we can make it consistent with the direction of
    the energy market and with the movement towards clean energy.
        Mr. Rush. Ms. McCarthy, you have been under some pretty
    relentless attacks for, it seems to me, if I can characterize
    the attitudes of some on the other side, that you are a hater
    of this whole industry. How would you respond to those
    accusations that you are a hater or you are anti--that you hate
    the coal industry?
        Ms. McCarthy. I would say that EPA--our job and my job in
    particular is to look at how we can reduce air pollution that
    pose significant threats to public health and welfare. We have
    done that in a way that doesn't single out any fuel supply. It
    is a fuel-neutral response.
        If you look at how we have developed the carbon pollution
    standards for new power plants, we recognized that a standard
    could be established that would accommodate the vast majority
    of new power plants that are being constructed today and
    wouldn't pose a significant lowering of the standard than they
    are able to achieve and have been able to achieve since 2005.
    And we also established an alternative compliance pathway,
    recognizing that coal is a significant source of energy in this
    country now, and it will be in the foreseeable future. And we
    needed to understand that and provide an opportunity for new
    coal facilities, as long as they looked at the most innovative
    technologies available to that and, over time, found a cost-
    effective strategy to achieve that standard.
        So we have done everything we could to design our rules,
    recognizing that there is fuel diversity and protecting that
    fuel diversity moving forward.
        Mr. Whitfield. The gentleman's time is expired.
        At this time, I would like to recognize Mr. Terry, the
    gentleman from Nebraska, for 5 minutes.
        Mr. Terry. I thank the gentleman.
        First, I just want to say that I support clean coal
    technologies. I am a little frustrated that we haven't had the
    pilot rollouts and more permits issued for clean coal. We had a
    hearing one time about how China is able to do it; and even the
    minority's own witness agreed that, in China, they don't have
    the regulatory burdens and pathways to get a clean coal
    facility built. But we have to have coal as part of our
    portfolio.
        But there does--with the myriad of rules that have come out
    that seem to all flow towards controlling emissions from coal-
    fired plants and then the coal ash on top of it--there does
    appear to be a war on coal. And you combine that with
    statements made by both the President when he was running and
    others that are in the administration that seem to agree with
    some of the environmental groups like the Sierra Club that want
    to see all coal use ended. So if there is a perception there--
    there is a perception there, whether the EPA wants to recognize
    it or not. And I don't think that is bullying, by the way,
    pointing that out. If I am bullying you right now, will you
    please let me know.
        Ms. McCarthy. Congressman, you never have, and I don't
    expect you would. I will let you know if you do.
        Mr. Terry. Thank you. I appreciate that.
        And another area that I think is important is reducing
    emissions for models, and that is why I did the Terry Hill bill
    in 2007. Of course, that was in work with environmental groups,
    John Dingell, Nancy Pelosi. We were able to get that into the
    2007 bill. The President took it upon himself to make some
    significant changes to that, but, nonetheless, philosophically
    we are in agreement.
        If we can reduce auto emissions, we should. In fact, I
    drive a Ford hybrid Fusion. I get about 39, sometimes 40,
    depending on whether it is winter or summer, about 40 miles per
    gallon and about 600 per tankful. I love that. To me, that is
    sticking it to the man.
        But I do have to wonder if the 2025 standards that are part
    of this discussion today are, A, achievable without significant
    changes in the industry and usage and whether some of the
    claims like $8,200 in savings is really accurate that is on--
    and I am going to submit this for the record. I think you have
    already mentioned this. This is on the whitehouse.gov--about
    $1.7 trillion.
        So my first question is, on savings of $3,000 or $8,000
    for--fuel savings costs of $8,000 for a 2025 vehicle, is this
    compared to a 2010 vehicle, as I understand?
        Ms. McCarthy. The fuel savings is--my understanding is that
    relates to the savings that would accrue over the lifetime of
    the use of that vehicle, and that would be on the basis of a
    2025 vehicle.
        Mr. Terry. OK. And on the lifetime, can you define lifetime
    for me?
        Ms. McCarthy. It is about the--I am trying to--it is about
    15 years.
        Mr. Terry. OK, I will lead you then and see if you agree.
    To realize the $8,000 in fuel savings, a new car owner in 2025
    has to drive 211,000 miles and a truck owner has to drive
    249,000 miles to achieve the $8,000 in savings. Do you agree
    with that statement?
        Ms. McCarthy. It--yes.
        Mr. Terry. Then in my 8 seconds left, so if you own a Ford
    150, which is the dominant vehicle in Nebraska, unless you
    drive a quarter million miles you don't get the $8,000 fuel
    savings. But how many Americans today are driving their light
    trucks 250,000 in the lifetime?
        Ms. McCarthy. The only thing I would suggest, sir, is that
    the added increase in costs that we projected when we proposed
    the rule was about $2,000 per vehicle. And so the $8,000 really
    is on balance to that $2,000. So we would project that the
    lifetime of that vehicle you would have between $5,200 and
    $6,600 in fuel savings. That would be over the lifetime of the
    one person who held it a long time or two or three.
        Mr. Terry. OK.
        Ms. McCarthy. But it all depends on how you value gasoline,
    what you think the price of gasoline is going to be, and we did
    the best we could to project those figures appropriately.
        Mr. Terry. All right, yield back.
        Mr. Whitfield. The gentleman's time is expired.
        At this time, we recognize the gentleman from Texas, Mr.
    Green, for 5 minutes.
        Mr. Green. Thank you, Mr. Chairman.
        Ms. McCarthy, first of all, thank you for always being here
    and again working with us on a number of issues. I have to
    admit you don't always tell us yes, but at least we can see
    what we can do to work it out.
        With the DC District Court unanimously affirming the EPA's
    right to regulate carbon in the absence of Congress passing
    carbon control legislation, we must turn to ensuring that EPA
    GHG regulations do not put our energy intensive industries in
    economic jeopardy. When do you expect the Tier 3 gasoline
    standards to be released?
        Ms. McCarthy. Congressman, the Tier 3 standard is still a
    rule under development. I don't have any particular time frame
    for that at this point, but we would fully expect that when
    that rule is released it will go through a robust public
    comment process and we will see where we end up.
        Mr. Green. Well, I am sure you know our committee and the
    House passed a bill last week dealing with a number of things,
    and I do have concern with giving time for industry to be able
    to--like 2 years or so, because they can do it. And you know
    the district I represent, five refineries and tons of chemical
    plants.
        Ms. McCarthy. Yes. Well, Congressman, we always have quite
    a significant lead time on when any rulemaking is finalized.
        I think I was trying to indicate that we are in the
    development stage right now. It will take a while to move a
    bill forward, a rule forward, and then we will have significant
    lead time. And, in the meantime, we will be working with the
    industry on what is reasonable and appropriate to propose.
        Mr. Green. The next question is, when do you expect carbon
    standards for refineries?
        Ms. McCarthy. Oh, that also is something we are talking to
    the litigants about. The administrator made it very clear that
    the focus for the agency right now is on new power plants.
        Mr. Green. OK, well, I appreciate that on power plants, and
    hopefully that would apply to refining capacity too, so we
    wouldn't have to go remake something that, you know, has been
    added onto for years.
        As you know, I am concerned about the possibility of both
    of these regulations being issued around the same time and on
    one hand asking refineries to actually increase their carbon
    output by requiring them to lower the sulfur content of gas and
    then on the other hand you are going to ask them to reduce
    their carbon output below what has occurred under current Tier
    2 sulfur standards. I would hope, even though those two are
    different rules, that you would look at the impact of them and
    how long you can have the ability to comply with both of them.
        Ms. McCarthy. We certainly will. We did that with Tier 2 to
    understand what the permitting challenges were, what the
    pollutants might be in terms of increases or decreases. We will
    certainly do the same here.
        Mr. Green. And are you actively in conversation with the
    refining section on both of these issues?
        Ms. McCarthy. We are.
        Mr. Green. In February, EPA proposed to increase the
    availability of mechanisms to streamline permitting for
    greenhouse gas sources. And can you talk about these a little
    bit?
        Of course, I am coming from Texas. I am a little--since
    Texas refused to issue greenhouse gas permits, we have to ask
    EPA to do that, and I have heard a couple of plants in Texas
    are having trouble receiving these type permits. I don't know
    if this is because of administrative changes in Region 6, but,
    hopefully--I will follow up with you separately. If you have a
    comment on if I were a refinery who--in fact, one I heard about
    yesterday, he is not in our district, but he is in North
    Texas--if they needed a carbon or greenhouse permit, it would
    come from the EPA.
        Ms. McCarthy. It would in Texas, yes. That is beginning to
    be very unusual at this point, which is good. Most of the
    States have stepped up and are actually doing the permitting
    themselves. In fact, we have had about 44 permits issued. The
    vast majority of those have been by States and local
    governments, and we are working with Texas. The permitting--on
    the permitting side, it has been a pretty significant success
    story.
        Mr. Green. OK.
        Ms. McCarthy. We have been issuing those permits in the
    timeline under the Clean Air Act, which is 12 months after
    application. In Texas, we have had some difficulty in getting
    the information we need to process those permits.
        Mr. Green. OK.
        Ms. McCarthy. We are continuing to work with the regulated
    community to try to get that information so that we can get
    those permits out.
        Mr. Green. Have there actually been GHG or permits issued
    in Texas by EPA?
        Ms. McCarthy. I am not sure about that.
        Mr. Green. If you can get back with me.
        Ms. McCarthy. Yes.
        Mr. Green. Mr. Chairman, I yield back my 18 seconds. Thank
    you.
        Mr. Whitfield. Thank you.
        At this time, I recognize the gentleman from Texas, Dr.
    Burgess, for 5 minutes.
        Mr. Burgess. I thank the chairman for the recognition.
        I appreciate Ms. McCarthy being here with us again. We have
    had several mornings like this.
        Let me just ask--I mean, there have been other mornings
    when you have come before our committee, and we are grateful
    for those episodes. I have submitted several questions in
    writing for the record, and I am still awaiting responses to
    those questions from other hearings that we have. And I am
    going to be submitting some additional questions for the record
    today. I just wonder if I might expect to get an answer to
    those questions that I will be submitting today, as I haven't
    received answers from any of the other questions that have been
    submitted.
        Ms. McCarthy. Congressman, I am happy to work with your
    staff and see if we have missed an opportunity to respond in a
    timely way. I will take care of that. And any questions you
    ask, we will be sure to respond as quickly as we can.
        Mr. Burgess. Just to refresh your memory, one of the
    questions was on the disposal of over-the-counter asthma
    medications that contain CFCs, and what was the EPA's--what was
    their recommendation to manufacturers for the disposal of those
    asthma medications, as we apparently can't grant a waiver to
    allow those to be utilized by patients? Is the disposal of the
    asthma medication that is going to have to be destroyed, is the
    disposal going to be handled in a way that it will prevent the
    CFCs from entering the environment? Since, apparently, one of
    the thrusts of the EPA, it has been their concern that
    asthmatics in this country are widening the hole in the ozone
    with every puff of a medication.
        Again, I do have some questions for the record, Mr.
    Chairman. I will be submitting those.
        I just would ask in light of your answer, if Mr. Green
    just--in response to a question from Mr. Green, you said that
    there would be--he asked if there would be new standards coming
    for power plants and refineries, and I believe you indicated
    that there would be.
        Ms. McCarthy. What I indicated is that we have proposed
    standards for new power plants, and we are in discussions in
    the refinery world, because we announced early on that we are
    using a common sense approach of looking at the largest sources
    first. But the administrator has made it very clear that we are
    not on a particular timeline at this point on refineries. We
    are focused on new sources for power plants.
        Mr. Burgess. Along those lines, are you going to be looking
    at the alternative natural gas production from the shale
    formations? Are you going to be looking at those activities as
    a source of greenhouse gas production?
        Ms. McCarthy. At this point, the agency issued a regulation
    that looks at driving down volatile organic compounds from oil
    and gas in particular from those wells that use hydraulic
    fracturing, which is the vast majority of new wells. We have
    found a way to reduce volatile organic compounds that also
    significantly reduces methane emissions, which is the
    significant greenhouse gas that is emitted in the oil and gas
    production sector.
        So, at this point, the agency has no plans to do anything
    further on oil and gas, but, as always, we can be petitioned to
    take a look at these issues. And there are many sectors where
    we have received petitions, but we are very clear we are
    looking at new sources for power plants. We are in discussions
    on refineries, but we are quite a ways away. In any other
    sector we will be working with the litigants and the courts to
    make sure that we can continue to address the largest sources
    first.
        Mr. Burgess. Well, you may understand that some of us are
    concerned about the fact that things tend to get larger than
    the original intention. And we are at a place where our economy
    is, depending on who you read, is either continuing to struggle
    to try to recover or is in a very weak recovery mode. My
    concern in my part of the world is that, if this is not done
    carefully, it certainly could have a very negative impact on
    the economy, certainly in North Texas.
        We want these products to be developed safely. We want
    public safety to always be at the forefront, but at the same
    time, historically, some of the activities have seemed to be an
    overreach and, as a consequence, the economic disruption could
    be significant. What I am hearing you say today is, right now,
    there is no plan to do that until you change your mind. Is that
    correct?
        Ms. McCarthy. Well, I would say that we have sent some very
    clear signals on how we are being as deliberate as the law
    allows. We also have proposed a step three in the Tailoring
    Rule which maintains the same level that we have had before.
    And the next step there is to take a look at what streamlining
    opportunities are available to us before we need to consider
    additional step-down. So we are doing everything we can to
    actually reduce necessary carbon pollution, reduce that as much
    as possible, but do it in a way that is very deliberate and
    makes common sense and takes advantage of the cost efficiencies
    that various strategies to reduce carbon can actually accrue.
        Mr. Burgess. Mr. Chairman, I want to submit the questions
    for the record and ask that they be included in the usual and
    customary timeline for response.
        Mr. Whitfield. Absolutely.
        At this time, I would like to recognize the gentlelady from
    Florida, Ms. Castor, for 5 minutes.
        Ms. Castor. Well, thank you, Mr. Chairman, and thank you
    for calling this hearing. It gives us an opportunity, I
    believe, to discuss some good news when it comes to greenhouse
    gases and saving consumers money; and that has to do with the
    progress that we are making when it comes to more fuel-
    efficient vehicles and money back into the pockets of consumers
    at a very critical time.
        The good news is the--this doesn't--you know, this doesn't
    really happen by accident. And I give President Obama and the
    EPA a lot of credit for pushing all of us and industry,
    everyone involved, to make greater progress. And a lot of my
    colleagues here have been at the forefront of that, and my hat
    is off to them too, because now we are seeing real results.
        We are going to reduce the amount of carbon going into the
    atmosphere and greenhouse gases but save consumers money. And
    now you can see that consumers are embracing these more fuel-
    efficient vehicles because they are working better, they have
    greater pickup, the styles are much more interesting for folks,
    and they like to save money. They don't want to stop at the gas
    station. And it has really been a great success story.
        And I notice that last week my Republican colleagues held a
    hearing to receive testimony from various industry sectors
    about EPA's current and pending future greenhouse gas
    regulations. Noticeably absent from that hearing was any
    discussion of the successes that we are having when it comes to
    fuel efficiency and the EPA's initiatives to reduce greenhouse
    gas emissions from motor vehicles.
        You know, in the past, industry has been outspoken. They
    weren't sure that we could improve cars, that consumers in
    America would embrace more fuel-efficient vehicles, even while
    we watched other countries around the world advance beyond
    American industry. Well, that is not the case anymore. This has
    been a great success for American families and businesses; and,
    Ms. McCarthy, the administration and your shop deserves great
    credit for that.
        In April, 2010, the administration finalized fuel
    efficiency and greenhouse gas standards for the model years
    2012 to 2016. These standards will save consumers on average
    more than $3,000 in fuel costs over the life of a new vehicle.
    $3,000. This is the net savings after accounting for any
    increased vehicle costs.
        And I heard what my colleague, Mr. Terry, was saying, gosh,
    these cars right now, sometimes they are a little more
    expensive. If you go out, yes, I know this from family
    experience, sometimes they are going to cost a little more. But
    if you do the math, you are going to save. And it is not that
    you are not going to achieve savings right away. Because you
    are going to bypass that gas station, and that is money right
    into your pocket.
        In fact, I have some notes here. EPA and DOT estimate a
    standard yield net savings of roughly $130 to $180 per year for
    consumers with a 5-year automobile loan. That is real money,
    and this is because the savings on fuel consumption costs
    substantially outweigh slightly higher loan payments for the
    vehicles. EPA projects that on average consumers will save that
    $3,000 net over the life of the vehicle.
        So, Ms. McCarthy, would you talk a little bit more about
    the money back into the pockets of consumers and then how the
    tailpipe standards help shield consumers from price spikes that
    we have seen recently at the gasoline pump?
        Ms. McCarthy. Well, I think one of the most exciting things
    for us in terms of the Light-Duty Vehicle Rule is the broad
    support that that rule actually enjoys. That is everybody from
    the car companies themselves, who signed on and even asked us
    to do more, which is why we are looking at 2017 to 2025. First
    time we have had a national clean car program where we have
    totally aligned with every State in the country. We also have
    enjoyed the support of the United Auto Workers.
        So it is putting people back to work. It is building the
    kind of fuel-efficient vehicles that consumers want to buy. And
    we have not only identified the cost savings to consumers at
    the pump and explained to them that they will also perhaps not
    have to go to gas stations as much, which is a benefit I
    particularly like, but we have also explained to them that it
    is an energy security issue. It allows us to actually reduce
    our dependence on foreign oil, and it actually significantly
    reduces greenhouse gases.
        So I guess the good thing about taking a look at greenhouse
    gases, which really have to be reduced for public health and
    welfare, also provides tremendous opportunities for looking at
    increased efficiency, which almost always saves people money.
        Ms. Castor. Yes, and in addition to the consumer savings, I
    mean, we are talking about greenhouse gases. This program will
    save 1.8 billion barrels of oil and reduce greenhouse gas
    emissions from the U.S. vehicle fleet by 21 percent compared to
    projected emissions without the standard. Is that correct?
        Ms. McCarthy. Yes, that is right.
        Mr. Whitfield. The gentlelady's time is expired.
        At this time, I recognize the gentleman from Kansas, Mr.
    Pompeo, for 5 minutes.
        Mr. Pompeo. Thank you, Mr. Chairman.
        Good morning, Ms. McCarthy. Thank you for coming today.
        I wanted to clarify something that you said in your opening
    statement about the Tailoring Rule and what the Court said
    about the Tailoring Rule. If I understood the opinion
    correctly, all they said was that this particular plaintiff did
    not have standing. They did not approve the Tailoring Rule as
    statutorily authorized. Is that correct?
        Ms. McCarthy. They did not speak to the substance of the
    rule.
        Mr. Pompeo. Right. So they simply said you found the wrong
    plaintiff to walk in the door. We have made no statement about
    the appropriateness or the legality of the Tailoring Rule under
    the Clean Air Act, is that correct?
        Ms. McCarthy. Their decision was that the litigants did not
    have standing in the case, and they dismissed the claim.
        Mr. Pompeo. Thanks. I am not sure that is exactly what you
    said in your opening statement so I wanted to clarify it. Thank
    you.
        In February, you testified in front of the subcommittee
    when I asked you if had received guarantees from companies
    supplying pollution control technology under the Utility MACT
    Rule, you said you had not; you would look into it. I asked you
    again in May a very similar question. You said you were
    reviewing reconsideration petitions that were related to this,
    specifically one by the Institute of Clean Air Companies, which
    had asked for partial reconsideration of the Utility MACT Rule.
    Are you still looking at this? Are you still reviewing this set
    of issues?
        Ms. McCarthy. Yes, we are.
        Mr. Pompeo. Fast forward to today where we are talking
    about the greenhouse gas new source performance standards. You
    have testimony that says that new coal-based units can use
    carbon capture CCS technology to comply with GHG emissions. You
    suggest EPA is being reasonable because you are offering a 30-
    year averaging. The text of the proposed rule talks about this
    30-year proposed averaging. I want to come back to that. But
    the rule makes it abundantly clear that CCS is nowhere near
    ready for mass scale deployment, and yet your own rule states
    that the technology would be jump started by the rule itself.
    Do you have any commitment from any supplier that they can
    produce a coal-fired power plant that would comply with these
    rules?
        Ms. McCarthy. I have not sought such a commitment.
        Mr. Pompeo. Any reason that we would create a set of rules
    that we have no evidence that anybody can actually build one of
    these creatures? In the real world, right? Real people, real
    mechanics, real plumbers, real pipefitters, real human beings
    actually constructing a full scale economically viable coal-
    fired power plant under this set of rules?
        Ms. McCarthy. Well, we have been relying on the information
    on the activity that has gone on and in the technical
    feasibility of each of the steps necessary for carbon capture
    and sequestration, the actual capture of the transportation and
    the storage. Each of those steps is well proven. There are
    pilots that are demonstrating those at commercial scale. And
    there are a number of power plants that are coal-fired that are
    proposing to be constructed using CCS today.
        I think we attempted to establish a standard which gave the
    flexibility for new power plants to be proposed with coal that
    actually wouldn't make a commitment to CCS for over the course
    of as much as 10 years and still be able to achieve the
    standard in the law--in the rule, sorry.
        Mr. Pompeo. I appreciate that. Do you believe that if
    somebody is out trying to finance one of these plants when the
    technology doesn't exist that there is an entity in the world
    that would possibly commit the capital to build one of these
    when they have no idea what the risk is, if in fact their
    technology doesn't pan out, as so often is the case?
        Ms. McCarthy. There are coal-fired power plants being
    proposed today and permitted that are proposing to use CCS, and
    I have to assume that they are doing their due diligence for
    their financing.
        Mr. Pompeo. What happens, what are the penalties if they
    get to year 13 and they don't--it becomes very clear they can't
    make the 30-year, the 30-year option, that it is not going to
    work?
        Ms. McCarthy. I think EPA will be working with these
    companies over what the strategy is and the permitting
    associated with achieving compliance. We will do what we always
    do, which is to work with the company and look at what a
    compliance strategy might look like.
        Mr. Pompeo. Could they be shut down if it turns out, in
    year 2013, it is not working? Could the remedy be that if the
    CCS technology doesn't comply, that the EPA could come in and
    shut this plant down in its entirety after 12 years of
    operation?
        Ms. McCarthy. I believe it is a 30-year averaging, so I do
    not believe that that is a likely scenario, no.
        Mr. Pompeo. So, at 26 years, if they are not making it and
    just everybody stares at it, and we all do the math, and there
    is just you can't get there from here?
        Ms. McCarthy. The way that the regulation proposes is to
    establish a plan with the company. And if they miss any of the
    benchmarks toward a 30-year averaging strategy, that they will
    have to come in and look at how we would adjust that permit and
    establish a compliance strategy.
        Mr. Pompeo. But if they can't, you could shut them down and
    you might?
        Ms. McCarthy. Well, it is true of any company that doesn't
    meet the compliance obligations, but it very seldom has
    happened.
        Mr. Pompeo. Certainly. And I appreciate that. It is just
    very different when you are not talking about existing
    technologies, when you are talking about a technological
    advance that has yet to be demonstrated to make a bet that you
    can get there. Thank you for your testimony.
        And with that, I yield back, Mr. Chairman.
        Mr. Whitfield. The chair recognizes the gentleman from
    California, Mr. Waxman, for 5 minutes.
        Mr. Waxman. Thank you, Mr. Chairman.
        For the past 18 months, we have heard repeated claims that
    EPA's actions on greenhouse gases under the Clean Air Act were
    not authorized by law and would cause calamitous effects. I
    would like to revisit some of these claims now that the DC
    Circuit Court of Appeals has ruled decisively in EPA's favor.
    During part one of this hearing held last Tuesday, we heard
    witnesses and members of this committee describe EPA's actions
    to reduce greenhouse gases as magical thinking and regulatory
    overreach. In previous hearings, members of this committee have
    claimed that EPA is acting without legal authority in
    regulating greenhouse gases. The DC Circuit appears to have
    settled that debate.
        Ms. McCarthy, how does the court's decision compare with
    claims of EPA's regulatory overreach.
        Ms. McCarthy. The court indicated that we were
    unambiguously correct in our interpretation of what is required
    under the Clean Air Act, and we have complied with that.
        Mr. Waxman. Over the past 18 months, this subcommittee also
    has heard many nonscientists opine about the scientific basis
    of EPA's greenhouse gas regulations. At least 12 Republican
    members of the Energy and Commerce Committee have made public
    statements questioning or rejecting the scientific consensus on
    climate change. Others have argued that a few phrases taken out
    of context from hacked emails reveal a conspiracy of bad
    science.
        Ms. McCarthy, what did the court have to say about the
    adequacy of the scientific record that EPA relied upon to find
    that greenhouse gases endanger public health and welfare.
        Ms. McCarthy. The court found that the body of scientific
    evidence that EPA had marshalled to make its endangerment
    finding was substantial. It looked at the petitions for
    reconsideration of that science, and it found that it was
    filled with mischaracterizations, misrepresentations, not
    looking at the 18,000 peer-reviewed studies that provided the
    foundation for that endangerment finding, and it seemed to be a
    clear statement that EPA had done its job on the science as
    science is supposed to be done.
        Mr. Waxman. At the hearing last week, we heard dire
    predictions about the effect of regulating carbon pollution
    under the Clean Air Act. We heard that EPA's rules would place
    a dramatic economic burden on farms and that huge pollution
    control investments would be required for bakeries. The Farm
    Bureau even warned that Americans are, quote, ``going to be
    living off imported food,'' end quote. All of these predictions
    were premised on the assumption that the court would overturn
    the Tailoring Rule, which EPA issued precisely to avoid
    unintended adverse consequences. But the court found that none
    of the industry and State petitioners had standing to challenge
    the Tailoring Rule because they failed to establish that the
    rule caused them any injury or that overturning it would
    redress any injury they had suffered.
        Ms. McCarthy, now that the tailoring rule remains in effect
    can you explain the greenhouse permitting requirements that
    apply to farmers and ranchers?
        Ms. McCarthy. There are no permitting requirements
    associated with farmers and ranchers.
        Mr. Waxman. How about bakeries and other small sources, are
    they subject to greenhouse gas permitting requirements under
    the Clean Air Act?
        Ms. McCarthy. No, they are not. Not at this point, no.
        Mr. Waxman. That is because the Tailoring Rule ensures that
    only the largest sources of greenhouse gases are currently
    subject to permitting requirements.
        Ms. McCarthy. That is correct, and that is where we intend
    to focus all of our attention, yes.
        Mr. Waxman. Others have expressed concerns that EPA plans
    to change the Tailoring Rule thresholds to require permitting
    for much smaller sources.
        Ms. McCarthy, could you speak to these concerns?
        Ms. McCarthy. Yes. The administrator has indicated that in
    no circumstances is she going to be looking at lowering the
    Tailoring Rule to small sources. We also have an obligation to
    do a 5-year review, at which time we are going to propose
    streamlining opportunities. And we have a full work group
    looking at those opportunities at this point. In our most
    recent step three proposal, we are proposing to maintain the
    same level, high level of emissions so that we can continue to
    capture only the largest sources of greenhouse gas emissions.
        Mr. Waxman. Thank you.
        Coal and natural gas are both fuels used to generate
    electricity. They are market competitors. What my republican
    colleagues appear to want is for EPA to treat coal differently
    than other fuels, particularly natural gas. They wanted EPA to
    give coal a pass for the pollution it generates when burned.
        Ms. McCarthy, do the proposed carbon pollution standards
    set a more stringent standard for coal, or do they set the same
    standard for all fossil fuel fired electricity generation and
    let the fuels compete on a level playing field?
        Ms. McCarthy. They set the same standard, one standard.
        Mr. Waxman. Thank you.
        Thank you, Mr. Chairman.
        Mr. Whitfield. The chair recognizes at this time the
    gentleman from West Virginia, Mr. McKinley, for 5 minutes.
        Mr. McKinley. Thank you, Mr. Chairman.
        There are a series of questions I would like to address,
    primarily brought about by some of your comments made by the
    opposition, but also by your comments about that you don't
    think there has been any change, it has been market driven, of
    why companies are using gas rather than coal. And I want to
    remind you back--we had a hearing last year when gas was, gas
    prices were $7 or $8 an MCF. But Purdue University say they
    were switching from coal to gas because of the EPA regulation
    threatening to make the byproduct a hazardous material. So it
    had nothing to do with the price of coal or gas; it was the
    threat of the EPA causing a stigma attached to that product.
    But I want to go--so I know that it is not all founded. And I
    do appreciate your patience because you have been here how many
    times and we have had some interesting--but I want to follow
    back up on what Dr. Burgess asked you. I have asked you, too,
    for some letters. I don't whether it is a--I don't want to say
    it is a conspiracy, but I don't understand why you are not
    answering our letters or answering questions that you say you
    are going to get back to us about. I asked you last year,
    explain to me, in all this discussion of greenhouse gases and
    global warming--again, I want you to tell me why the
    Milankovitch, the physicist Milankovitch and his Milankovitch
    cycle has been--in your mind--discredited.
        I would further like to understand why Hal Lewis and his
    resignation from the American Physical Society, where he says
    in his comment, if I can just call that up, he said it is the
    greatest--the global warming scam ``is the greatest and most
    successful pseudoscientific fraud I have seen in my long life
    as a physicist.'' This is not a politician saying this; this is
    a scientist. This is someone that is the emeritus professor at
    the University of California, Santa Barbara. And he and 200
    other people have signed off on this issue. And I have asked
    for you all to tell me, as an engineer myself, explain to me
    why that is not valid to be part of this discussion. And we
    still don't hear back. Can you get back to us, again, a third,
    fourth time we have asked for that? Will you do that, please?
        Ms. McCarthy. Congressman, if you have written a letter to
    me, I will certainly answer it.
        Mr. McKinley. Not only have we written letters, but we have
    asked you here to get back. And you are very kind. You say you
    will do it, and then like so many other folks here, they just
    get lost somehow, perhaps.
        Further, I want to go back to where you say you don't think
    this has affected the coal fields in this country, when in
    1993, the EPA itself said the byproduct of burning coal is not
    a hazardous material; it should be recycled. In 2000, they came
    out and said the same thing. But yet, again, the EPA under a
    new administration picks that fight back up again after it has
    been disproved twice and is making this threat that the
    byproduct of burning coal could be a hazardous material. How
    much more studies are we going to have? It is that kind of
    uncertainty that is coming out of your office that is causing
    plants, a coal company, a utility company, to maybe just pull
    back, like they did at Purdue University. How would you
    respond? Do you really think we need another--do we need to
    have another study?
        Ms. McCarthy. Well, I think people have asked us when EPA
    proposed its coal ash rule to take a very close look at the
    science, to take a very close look at the options and how it
    applies----
        Mr. McKinley. Has the science changed since 1993 and 2000?
    It is the same compound.
        Ms. McCarthy. I can speak for the science that relate to
    air pollution, and clearly, the science gets more sophisticated
    every day. It gets better every day. The clarity and the
    substance and the robustness of the data, particularly on
    issues of climate, it gets clearer and clearer all the time.
        Mr. McKinley. Well, let me just regain my time. I have only
    got 18 seconds to go. Let me invite again anyone from the EPA
    to please come with us to the coal fields across America and
    talk to the miners and their families when they talk about that
    when it is suggested that it is the price of gas that is
    costing them their jobs, when 700 people at Arch Coal get let
    go. We have got to be more sensitive to the middle class people
    across this country, and particularly those that have mined
    coal, that have made America what it is. So let me extend that
    invitation again to you. I did it to Lisa Jackson last year,
    and she ignored that. Let me ask you again, please, come and
    talk to these people and explain to them how there is a future
    for their industry. Will you do that?
        Ms. McCarthy. Thank you----
        Mr. Whitfield. The gentleman's time is expired.
        Mr. McKinley. Thank you very much.
        Mr. Whitfield. At this time, let me just say we have a
    couple of votes on the House floor. We have got about 9 minutes
    remaining, so I am hoping to get at least two more members to
    ask questions.
        At this time, I would like to recognize the gentleman from
    Massachusetts, Mr. Markey, for 5 minutes.
        Mr. Markey. Thank you, Mr. Chairman, very much.
        On Wednesday Rex Tillerson, the head of ExxonMobil, said
    that he agreed that global warming is real and manmade, a big
    moment. And he said that we should just adapt to its effects.
        And adaptation is possible for certain segments of the
    population, but for many, it is not possible. I mean, obviously
    out in Colorado right now, 30,000 people have just been
    evacuated, so that is their adaptation to those forest fires
    and to this historic drought out there.
        And for people who live on Cape Cod, whose homes might be
    ultimately just swept away, their adaptation might be to move
    to Worcester or Springfield or someplace, just to get away from
    the coastline if that is what adaptation means, which is
    obviously the case.
        So does it make sense right now, Ms. McCarthy, to reduce
    global warming pollution instead of just trying to adapt later
    when the human and economic toll of global warming becomes
    catastrophic? Let's just say, for example, that the Waxman-
    Markey bill, which passed just 3 years ago on Tuesday--it is
    the third anniversary of passing in the House of
    Representatives. If it had passed the Senate as well, would we
    be well on our way now of reducing the totality of greenhouse
    gases in our society and putting the planet on a pathway toward
    an 80 percent reduction in greenhouse gases?
        Ms. McCarthy. Congressman, I would agree with you that we
    need to take action now. And I believe that it is the U.S.
    National Research Council who made that point very recently.
        Mr. Markey. Now, earlier this week, the DC Circuit Court of
    Appeals issued a complete and total repudiation of several
    lawsuits that sought to overturn EPA's regulation of global
    warming pollution under the Clean Air Act. The court said that
    EPA's finding that global warming is dangerous was neither
    arbitrary nor capricious and that EPA's reading of the Clean
    Air Act was unambiguously correct. The court found that EPA's
    scientific evidence of record included support for the
    proposition that greenhouse gases trap heat on earth that would
    otherwise dissipate into space and that this greenhouse effect
    warms the climate, that human activity is contributing to
    increased atmospheric levels of greenhouse gases and that the
    climate system is warming. Do you agree with that court's
    conclusion?
        Ms. McCarthy. Yes, I do.
        Mr. Markey. And do you also agree that the scientific data
    has supported this conclusion for a long time?
        Ms. McCarthy. Yes, I do. I think it is much stronger now
    than it has been, but yes.
        Mr. Markey. Now, it is worth remembering that it was in
    2003 that EPA was first sued for failing to use its Clean Air
    Act authority to curb global warming pollution. That lawsuit
    culminated in the very famous Massachusetts v. EPA decision,
    which directed the Bush administration to cease its unlawful
    refusal to even ask the question of whether global warming
    pollution was dangerous. This set in motion the Bush
    administration EPA scientific finding that yes, global warming
    is dangerous. That was the Bush administration found that yes,
    it was dangerous. And the Bush White House refusal to accept
    this EPA determination and the Obama administration subsequent
    affirmation of this science followed.
        It is also worth reminding everyone here that with the help
    of your strong leadership under four Governors, Ms. McCarthy,
    Massachusetts has been at the forefront of combatting the
    efforts--effects of global warming pollution. During Governor
    Romney's tenure, his administration implemented a long-term
    vision for cutting the State's global warming pollution by
    funding renewable energy and playing a key role in efforts to
    develop a regional northeastern cap and trade system.
        And I congratulated Governor Romney for creating that cap
    and trade system, and I just want to do so again. I think he
    was a visionary in that way, in the same way he was with the
    health care plan that was the model for the national plan that
    the Supreme Court upheld yesterday.
        And Governor Romney, both on cap and trade and on health
    care, was and continues to be a real model for the rest of the
    country to follow, and we just hope that the Republicans
    continue to have him as their leader and follow his
    inspirational leadership in those two areas.
        Indeed, in a July 2003 letter from Governor Romney to
    Governor Pataki on the topic he said, quote, ``climate change
    is beginning to have an effect on our natural resources,'' and
    he described the need to take steps to reduce the, quote,
    ``power plant pollution that is harming our climate.''
        So the science underpinning global warming is nothing new,
    even if Governor Romney seems to have forgotten what he
    believes and what he did 9 years ago. The widespread acceptance
    of this science is nothing new. EPA's authority to act is
    nothing new. The recognition that the effects of global warming
    are happening with increasing intensity is nothing new.
    Regrettably, this subcommittee continues to have hearings that
    deny that which everyone knows in the scientific community with
    a very small number of exceptions to be true. And I thank the
    gentleman.
        Mr. Whitfield. Thank you, Mr. Markey. We will inform Mr.
    Romney that you will probably be voting for him.
        At this time, I would like to recognize the gentleman from
    Oregon, Mr. Walden, for 5 minutes.
        Mr. Walden. Thank you, Mr. Chairman.
        Ms. McCarthy, it is have good to have you back before the
    subcommittee. We always appreciate your candor and your being
    here.
        You know, I hear from people about the agency that, and
    they submit things, and you all don't keep track of it. We
    heard from my colleague, Mr. McKinley, about letters that
    allegedly apparently have gone unanswered. Does EPA even bother
    to track or characterize notices of intent to sue the agency?
        Ms. McCarthy. Yes, we do.
        Mr. Walden. You do. So when they come in, what happens?
    Like, they are going to sue your part of the agency, what
    happens? Do you characterize those? Do you look at them? Do you
    track them? How do you manage that?
        Ms. McCarthy. In a way that a business would manage that.
    We have an office that manages that, a general counsel. We
    track those. We provide information to all the relevant
    individuals, and we meet our obligations under the law.
        Mr. Walden. So you compile them. You format them. I mean,
    you just--they don't go off into some wasteland and you don't
    know what to do with them?
        Ms. McCarthy. No, they do not.
        Mr. Walden. Because when Administrator Jackson testified
    before our committee on February 28th regarding the budget, she
    said the EPA would post on its Web site petitions for
    rulemaking and notices of intent to sue. And then recently, EPA
    wrote to the committee, including myself, and said that you
    don't have the adequate resources to make that information
    publicly available and further said EPA doesn't currently have
    a centralized process to collect, categorize and sort all the
    petitions for rulemaking that the agency receives. And they say
    the same thing when it comes to intent to sue. Now, you have
    just told me you do keep track of that; it is in the counsel's
    office. So which is it?
        Ms. McCarthy. You asked me about notices of intent to sue.
    I receive those notices when they come in, and they are
    tracked. I don't get notices of all petitions that might come
    in relative to rulemaking----
        Mr. Walden. But you do on intent to sue. OK. Good. Because
    what the response back to us from the----
        Ms. McCarthy. I am sorry, I am sorry. I have been reminded
    that the ones I get actually relate to my own business, the air
    program; I do not track everything going through the agency.
        Mr. Walden. No, but I understand that. Does he want to
    testify? I am just curious.
        Ms. McCarthy. Oh, I am sorry, I am sorry. I have been
    reminded that when I say notices of intent, I am thinking of
    those that actually lead to a suit, not just every notice of
    intent that the agency was given. So I am sorry if I have given
    you incorrect information, Congressman. I will do better.
        Mr. Walden. Well, good, because that is the heart of the
    matter of what--it seemed like a pretty simple request to say,
    could you put those notices of intent up for the public to see?
        Ms. McCarthy. Apparently, we get a whole lot that never
    reaches my level and a whole lot that never comes to fruition,
    and I will certainly make sure that I don't misspeak in the
    future.
        Mr. Walden. No, no.
        Well, let's go to the heart of the matter here. What about
    the ones that go to your level since they are categorized, they
    are compiled, you know what they are, could you put those up
    since the public knows.
        Ms. McCarthy. I will certainly go back. I will talk to the
    office of counsel. Those come to me as advisories. I don't know
    whether they are, again, complete in terms of what the agency
    receives.
        Mr. Walden. But here is the real issue that I think the
    American public, a lot of my constituents, are frustrated
    about. All too often, you get what is called the friendly
    lawsuit or a friendly intent to sue. Now I never thought any
    lawsuit was very friendly, but you get an intent to sue. And
    then an agency is able then to settle that lawsuit sort of out
    of any transparent environment. People don't even know that
    somebody filed an intent to sue. And all we are thinking is it
    would be better to have some transparency and accountability in
    your operation. And I am getting really confused signals
    between what you said and your counsel behind you said and what
    the administrator said, and I don't think any of the answers
    are adequate for what I want, what many members on this
    committee seek and what should be simple. If somebody says they
    are going to sue your agency to compel a rulemaking or
    something of that nature, I just don't understand if it gets to
    you, why you can't make that public. If the EPA's Office of the
    General Counsel doesn't track that information, at least what
    you track, can you put up on the Web site?
        Ms. McCarthy. Well, I guess the one thing we can agree on
    is that I don't think of any lawsuit as friendly either.
        Mr. Walden. So you don't agree with me on the transparency
    need or the accountability need?
        Ms. McCarthy. We work very hard at transparency. I do not
    know--I do not believe that I can make a commitment one way or
    another. If the administrator has raised this issue, I am sure
    we are looking at it as closely as we can.
        Mr. Walden. No, they came back to us in a letter and said,
    you can't do it. It is too complicated, too burdensome; you
    don't have the resources; you don't compile, you don't
    characterize; it is just impossible to do. That is really not
    an adequate response from my perspective, because I think this
    is important information. It often leads to a resolution that
    is out of the view of the public until it is done. People don't
    have an adequate way to participate in something that can be
    very meaningful to them. And I am just not--I don't get it. I
    guess you want to keep this stuff under cover and hidden away,
    and I don't know. It is bad government.
        Ms. McCarthy. My understanding is that we are provided
    extensive information of the committee, and we are certainly
    indicated when we have been sued.
        Mr. Walden. I have got the response right here from
    Administrator Jackson where they say you don't have the ability
    to do this.
        Mr. Whitfield. The gentleman's time is expired.
        The time has expired on the first vote, so we are going to
    try to get over there and get that, and then we have a second
    vote. So, as soon as this is over, which it is, we will vote on
    the second, we will be right back. So we should be back within
    15 minutes. And if you wouldn't mind waiting, I would
    appreciate it.
        Ms. McCarthy. Of course not.
        Mr. Whitfield. So we will recess for a period of 15 minutes
    and we will be right back.
        [Recess.]
        Mr. Whitfield. We will reconvene the hearing. And I
    apologize once again for the slight delay.
        At this time, I would like to recognize the gentleman from
    Virginia, Mr. Griffith, for 5 minutes.
        Mr. Griffith. Good morning. Thank you so much for being
    here. And I do appreciate the fact that you are willing to come
    and speak with us on a fairly regular basis. In your testimony,
    you stated that as of June 10th of this year, several dozen
    large industrial sources of greenhouse gases, such as cement
    plants, power plants, refineries and steel mills had received
    permits for greenhouse gasses under these programs, PSD and
    Title V. How many is several dozen?
        Ms. McCarthy. Pardon me?
        Mr. Griffith. How many is several dozen? Are we talking
    about just 24, or is there some other number?
        Ms. McCarthy. Forty-four permits of greenhouse gas limits
    have been issued; 37 by the States, and 7 by EPA, and 29
    permits are pending at EPA.
        Mr. Griffith. And are those permits final, or are some
    subject to appeal?
        Ms. McCarthy. The 44 permits would be final permits. I do
    not have knowledge of whether or not they have been appealed.
        Mr. Griffith. And how many permit applications are pending
    or waiting to be processed?
        Ms. McCarthy. Twenty-nine with EPA.
        Mr. Griffith. There are 29 pending with EPA?
        Ms. McCarthy. Eight pending permits are draft permits
    issued by the State. We have 29 permits pending at EPA; 24 of
    them are greenhouse gas only. That is where the States do the
    rest of the permitting. And five of them are for the full suite
    of pollutants that need to be permitted throughout our PSD
    program.
        Mr. Griffith. And how long does it take to process an
    application?
        Ms. McCarthy. The requirements in the law ask us to
    complete the permit within 12 months of a completed permit
    application. So that is the goal here, and for the most part,
    we have achieved that goal.
        Mr. Griffith. So you are saying it is 12 months, because my
    understanding is at a field hearing in response to a question
    for the record following your testimony last year in Texas, the
    committee asked, how long would it take to process a PSD
    permit, and my understanding was that at that time you
    indicated it would be made in a few weeks for most projects. So
    you are telling me now it is taking somewhere close to a year?
        Ms. McCarthy. The requirement under the Clean Air Act is
    for EPA to expeditiously process them. They recognize a 12-
    month window between a completed application and issuing the
    permit.
        For greenhouse gases, we have in some ways beaten that and
    done it more quickly. Other times, it takes awhile for a
    completed application. And then we have completed it within
    that 12-month period.
        Mr. Griffith. One of my concerns--I am switching gears on
    you. One of my concerns when I hear the testimony, and it is
    not new with you or it is not exclusive to party either, is
    that sometimes people from more affluent areas don't understand
    what is going on in a district like mine, which compared to the
    rest of the country is not that affluent; $36,000 is I believe
    the latest census data on the household income. And so when we
    have new regulations, no matter how well intentioned and how
    much they might save somebody money, when you add $1,000 more
    to the cost of a car by 2016 and a total by $3,000 more by
    2025, you are basically saying that a lot of folks in my
    district won't ever be able to afford to buy a new car. In
    fact, the National Auto Dealers Association says upwards of 6
    million people won't be able to afford a new car because of
    these costs.
        And it is just sometimes when I hear folks talking about
    the cost of electricity, when your boss, Lisa Jackson, was in
    here, and I asked her what happens when people can't afford to
    heat their homes, she indicated there is a program for that.
    But my people back home tell me that in the cold winter, the
    program runs out of money about mid February, and people are
    cold. And I am just wondering why we don't have, or at least
    not have the appearance that the EPA is paying attention to
    some of these numbers, that unemployment does happen? In my
    district, we have two coal-fired power plants that are going to
    be shut down. One of them is going to be retrofitted and
    partially reopened with natural gas.
        And of course, I also hear from my folks who make
    electricity, and one of them who no longer works in the
    industry, he says, we have been through this before where
    natural gas prices go down and everybody thinks that is going
    to be our saviour and inevitably we always have to turn back to
    coal.
        And so you are looking at a lot of different health
    factors; people not being able to heat their homes properly. We
    heard testimony in a different hearing yesterday that
    unemployment is a major factor in determining whether or not
    people are healthy. And yet it does not appear that when the
    EPA is studying these regulations that they look at, so what
    happens in the poorer regions where they can't afford the
    electricity or they can't afford a new car, or it is going to
    create large pockets of unemployment in the region. And we lost
    1,100 jobs in coal in the region, not in my district, but in
    the region in just the last few weeks.
        And you know it just amazes me sometimes that there seems
    to be a disconnect with Washington and with more affluent areas
    of the country who don't understand that they truly are
    relegating the people that I represent to a lower lifestyle, a
    lower health quality standard. And you know, I don't think it
    is intentional, but it sure is real. And I appreciate that, and
    I yield back my time.
        Mr. Whitfield. The gentleman's time is expired.
        At this time, I recognize the gentleman from Colorado, Mr.
    Gardner, for 5 minutes.
        Mr. Gardner. Thank you, Mr. Chairman.
        And thank you, Administrator McCarthy, for being here
    today. And to follow up a little bit on the questions from my
    colleague from Virginia, you mentioned the word
    disproportionate risk in your statement. Is there a
    disproportionate burden on poor when it comes to the rising
    cost of energy?
        Ms. McCarthy. I would assume that--I am sorry, I don't
    necessarily understand. Clearly every dollar matters more to
    somebody who has less dollars than others.
        Mr. Gardner. So it is a disproportionate share, a
    disproportionate burden on the poor when energy prices rise?
        Ms. McCarthy. It certainly is a more significant challenge,
    I would assume.
        Mr. Gardner. So a disproportionate burden, right.
        Ms. McCarthy. I am just being a person.
        Mr. Gardner. Right? I mean, you would say yes to that, a
    disproportionate burden?
        Ms. McCarthy. In my personal opinion, yes.
        Mr. Gardner. Thank you.
        In your testimony, you stated that the EPA has proceeded to
    begin limiting carbon dioxide and other greenhouse gases
    pollution from the largest emitting categories of mobile and
    stationary sources. EPA said that absent the Tailoring Rule
    82,000 sources would need PSD permits annually and over 6
    million sources would need operating permits. Does the EPA
    believe it has the legal authority to regulate all these
    sources?
        Ms. McCarthy. The legal authority to regulate? Yes.
        Mr. Gardner. OK. Yes, the answer is yes. Will EPA be
    expanding the number of sources in future years?
        Ms. McCarthy. It will depend upon the assessment we make,
    and we will do a report on that, and we will see what we can do
    and what streamlining opportunities there are.
        Mr. Gardner. So the answer would be yes, it might expand?
        Ms. McCarthy. I would not want to presume what we are going
    to do in the future. I know what we are doing now and the
    record that we have.
        Mr. Gardner. But the answer is not no?
        Ms. McCarthy. It is not no, correct.
        Mr. Gardner. There are more than 70 source categories and
    subcategories regulated under the NSPS program. Are the over 70
    source categories all potentially subject to greenhouse gas
    NSPS standards?
        Ms. McCarthy. Are they potentially?
        Mr. Gardner. Yes.
        Ms. McCarthy. Yes.
        Mr. Gardner. So they all potentially, all 70 sources, are
    potentially. OK.
        And then the other question I have for you is back in 2008,
    EPA published a notice that listed numerous source categories
    that could be subject to greenhouse gas regulation under the
    Clean Air Act in the Federal Register. Besides utilities and
    refineries, there was a very long list. Are there any of these
    sources that you would exempt from regulation? Utility boilers?
        Ms. McCarthy. We make individual case judgments on where
    the sources of pollution are, the risks they pose, the
    technologies available and whether or not NSPS is a good tool.
        Mr. Gardner. So you wouldn't exempt that, ships, ocean-
    going vessels, aircraft and aircraft engines?
        Ms. McCarthy. We are addressing those issues through
    litigation as well as other responses.
        Mr. Gardner. Locomotives? Nonroad vehicles? What are
    nonroad vehicles?
        Ms. McCarthy. I haven't made that judgment, and we haven't
    made that scientific or technological assessment.
        Mr. Gardner. Motorcycles?
        Ms. McCarthy. I haven't made that assessment.
        Mr. Gardner. Dirt bikes, snow mobiles, any of those that
    you would exempt?
        Ms. McCarthy. I am not in a position to exempt or assess
    any of those at this point.
        Mr. Gardner. Marine, marine engines, all-terrain vehicles,
    ATVs, nothing?
        Ms. McCarthy. I am not going to make an assessment of that,
    and I am not going to indicate what EPA's judgment might be in
    the future. I don't think you would want me to do that.
        Mr. Gardner. Let me read a few more of these. Passenger
    buses, air conditioning cooling systems, highway and nonroad
    fuels, farm tractors, fork lifts, harbor crafts, lawnmowers,
    string lawn trimmers. Would you exempt string lawn trimmers?
        Ms. McCarthy. I am not going to make any judgment about the
    future of EPA's action.
        Mr. Gardner. Portable power generators, handheld lawn care
    equipment, leaf blowers, trimmers, construction equipment,
    cement kilns, iron and steel production facilities, lime
    industry, chemical manufacturing, commercial buildings. These
    are all part of a long list. And the Tailoring Rule ratchets
    down. And so when you talk about the fact that this Tailoring
    Rule, we don't know what is going to happen, that is the
    uncertainty that exists with businesses, that is the
    uncertainty that exists in the economy. And so you are saying
    you are not going to regulate it now, but we don't know what
    you are doing in the future. You say you can't do it now, but
    the Tailoring Rule ratchets down. And so things like lawn
    mowers, things like string lawn trimmers, maybe not today, but
    maybe down the road that is what you are saying, correct?
        Ms. McCarthy. I think we make judgments. And if you look at
    how EPA has applied the new source performance standards, it is
    on the basis of the amount of pollution, whether there are
    control strategies, whether or not the tool should be applied.
    And I think you are asking questions about sectors where those
    judgments haven't been made. But it is very clear the direction
    of this agency. We are going after the largest sources of
    greenhouse gas emissions, those that are heavily regulated
    sources, those where there is now uncertainty that carbon
    regulation and carbon interest has caused, and we are trying to
    address that uncertainty in a reasonable commonsense phased
    approach. That is what we are doing.
        Mr. Gardner. So are you going to stop there? Is that it?
        Ms. McCarthy. We have made a commitment in the Tailoring
    Rule at a 5-year window to take a look at whether or not the
    threshold should be lowered and the type of streamlining
    opportunities that would be available to the agency to address
    greenhouse gases.
        Mr. Gardner. So----
        Mr. Rush. Moving on, Mr. Chairman.
        Mr. Whitfield. The gentleman's time is expired. Sorry. At
    this time, I recognize the gentleman from Texas, Mr. Olson, for
    5 minutes.
        Mr. Olson. I thank the chair for the recognition.
        Welcome, Administrator McCarthy. Thanks for coming today to
    give us your time and expertise. Most of my questions are going
    to focus on the Las Brisas Energy Center in Corpus Christi,
    Texas. They proposed 3,200--no, wait a minute, sorry, 1,320
    megawatt power generator, energy power generator, that is doing
    it with petroleum coke, pet-coke, which is a byproduct of the
    local farming that is done along the Gulf Coast and right there
    in the Corpus Christi area. This project is supposed to provide
    power for 850,000 homes. Construction will provide about 1,300
    jobs, direct jobs, 2,600 indirect jobs, so about 4,000 jobs.
    And once it is operating, it will be about 100 direct jobs and
    200 indirect jobs. So big economic impact in the Corpus
    Christi, Texas area, Nueces County. It is important in Texas
    that we get this plant operating as soon as possible because
    ERCOT, our power regulator in our State, the grid manager, said
    that Texas will have a 2,500 megawatt shortfall by 2014. So
    just a little over 2 years, a 2,500 megawatt shortfall. That is
    850,000 homes. We are at risk of brownouts and blackouts, so it
    is important that the Las Brisas Energy Center gets up on line
    as soon as possible.
        The permit process has been going on for 3 years, and they
    got the final PSD, the Prevention of Significant Deterioration,
    permit from the Texas Council on Environmental Quality just
    this past year. But these new greenhouse gas permitting, the
    new greenhouse gas permits, these rules have been issued after
    the TCEQ got the permit, the PSD permit, approved, may make
    them go through the whole permitting process again. Last year,
    seven Members of Congress and myself wrote Administrator
    Jackson. And she asked Region Six Administrator, former Region
    Six Administrator, Al Armendariz, to respond. He wasn't a
    credible regulator. He had been retained before he became the
    Region Six Administrator to testify against Las Brisas Energy
    Center, and we are still waiting for an objective answer.
        So I have one request. Will you commit to giving me,
    persevering and expediting the Las Brisas PSD permit?
        Ms. McCarthy. I will commit that the agency in each of its
    regions has been committed to expediting these. I do know that
    a permit application is under review by the region. I also know
    that we are waiting for information from Las Brisas at this
    point in order to complete that permit.
        Mr. Olson. Can you give me that list of the information you
    have because I wrote them yesterday, and they will get you
    anything you need like that? So please give that information
    ASAP, and I will get that information to you. They want this,
    because we need to get this thing up and running as quickly as
    possible. My State is in a power shortage, a potential very
    dangerous crisis, because we are the fastest growing State in
    the Union. We have got this heat wave that the Nation is being
    affected right now, but it is a very serious problem. We need
    to address this right now, and this power plant can do--again,
    2,500 megawatts is--with a shortfall we have of 1,320, this
    power plant in and of itself will provide.
        And one more question about Las Brisas, a little
    clarification. It is about the new source performance standards
    for CO2. In March, a couple months ago, EPA proposed new CO2
    standards targeting fossil fuel power plants. Under the new
    standards, power plants would be subject to a maximum CO2
    emissions rate of 1,000 pounds per megawatt hour, a rate that a
    new coal-fired power plant cannot meet without installing
    carbon capture technologies, which doesn't even exist. This
    only applies--my question is this only applies to new sources.
    So it would exempt power plants that have already begun the
    permitting process, is that correct?
        Ms. McCarthy. We are--it would, as long as we have proposed
    a transitional category for those that have permits and can
    begin construction within a year.
        Mr. Olson. Would Las Brisas be included in this
    transitional status?
        Ms. McCarthy. Actually, they have petitioned us to take a
    look at that. I am sure they have responded through comment,
    and we will respond to that petition, and we will take a look
    at it. We did actually solicit comment on this issue to make
    sure that we had the right facilities included in that
    transitional category and to take comment on that 12-month
    window.
        Mr. Olson. OK. Again, please expedite that process because
    we need to get this power plant up and running as soon as
    possible. You know, PEPCO, because we got it all over the Gulf
    Coast there. If we don't use it to produce our power, guess
    what, we got to send it overseas somewhere. We need that. That
    is America energy, American jobs.
        I yield back the balance of my time. Thank you.
        Ms. McCarthy. Thank you.
        Mr. Whitfield. The gentleman's time has almost expired, so
    thank you.
        Mr. Rush, do you have any additional questions or comments?
        Mr. Rush. Mr. Chairman, I just want to thank again Ms.
    McCarthy for her outstanding testimony and for the time that
    she has been here. She waited for us, and so I just want to let
    her know how much we appreciate it.
        Mr. Chairman, with that said, I do have a document I want
    to enter into the record. So I would ask for unanimous consent
    that this report, ``Gearing Up: Smart Standards Create Good
    Jobs Building Cleaner Cars.''
        Mr. Whitfield. Without objection, so ordered.
        [The information is available at: http://
    www.bluegreenalliance.org/news/publications/document/
    AutoReport_Final.pdf]
        Mr. Whitfield. Thank you, Mr. Rush.
        I just want to make one additional comment, to follow up on
    Cory Gardner's line of questioning. I think that the concern
    here is that under the major source definition under the Clean
    Air Act, any emission, 250 tons in some cases, 100 times in
    other cases, you all have the responsibility to regulate. And
    so you issued the Tailoring Rule because of the demand it would
    take if you went down to that level would overwhelm the agency.
    But yet legally you do have a legal responsibility to go down
    to 250 or 100, whatever the case may be. And I think that was
    the point that Mr. Gardner was getting to, is that
    theoretically, if someone did bring a lawsuit and said, you are
    violating the statute and you should be down at 250 instead of
    100,000 or 75,000, that would be a clear violation of the clear
    statement of the law in the Clean Air Act. So I think that is
    where these farm groups and others are concerned, even though
    you are not at that point yet.
        But I also want to thank you very much for coming to be
    with us today. And I want to bring up just one other matter,
    which does not really relate to you personally as much as it
    does the Office of Congressional Affairs and Mr. Arvin Ganesan,
    and so forth. As you know, we have had a lot of hearings, and
    we are going to have a lot of hearings between now and when
    this session ends, and we don't have a lot of days left. And we
    have had some issues on attendance of witnesses in a number of
    hearings. I have got a long list of them here: Alternative
    fuels hearing, we tried three or four different times on Margo
    Oge to try to get dates that she could come, and she couldn't
    come. She has changed them. She couldn't come. Finally, she has
    agreed to a date. On the RIN fraud case, because ONI is having
    hearings, we have some substantive issues that we have want to
    explore on that, and we have had difficulty getting witnesses.
    On a field hearing that we are having relating to new source
    review, greenhouse gas, we are having difficulty getting a
    hearing. And then Dr. Burgess referred to this Primatene Mist
    issue and methobromide issue, which all comes about as a result
    of Montreal Protocol. We have been trying to get a hearing on
    that and have had great difficulty because Oversight and
    Investigation is doing a hearing. And you all have over 17,000
    employees. You have a budget of $8.4 billion, and I hope that
    maybe you would talk to Mr. Ganesan and some others. I know we
    have had a lot of hearings and there has been a lot of demands,
    but we are going to continue to have hearings, and we do hope
    that you all will make every effort to--we have tried to
    accommodate you all, too. It hasn't been a one-way street. But
    we really would appreciate you all making a concerted effort to
    get witnesses here.
        So that would conclude today's hearing. The record will
    remain open for 10 days.
        And once again, Ms. McCarthy, thank you for being with us
    today.
        And that will conclude today's hearing.
        [Whereupon, at 11:12 a.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]
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