[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:]
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    [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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