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



 
 THE AMERICAN ENERGY INITIATIVE, PART 20: A FOCUS ON EPA'S 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 19, 2012

                               __________

                           Serial No. 112-151



      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

                                 _____

                    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....................     1
Prepared statement...............................................     4
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     7
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     8
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     9
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     9
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................   205

                               Witnesses

Robb McKie, President and Chief Executive Officer, American 
  Bakers Association.............................................    11
    Prepared statement...........................................    15
Carl Shaffer, President, Pennsylvania Farm Bureau, and Board 
  Member, American Farm Bureau Federation........................    42
    Prepared statement...........................................    44
Charles Smith, President and Chief Executive Officer, CountryMark 
  Cooperative Holding Corporation................................    53
    Prepared statement...........................................    55
Daniel J. Weiss, Senior Fellow and Director of Climate Strategy, 
  Center for American Progress Action Fund.......................    66
    Prepared statement...........................................    68
William L. Chameides, Dean, Nicholas School of the Environment, 
  Duke University, and Vice Chair, Committee on America's Climate 
  Choices, National Research Council/National Academy of Sciences    88
    Prepared statement...........................................    90
Louis Anthony Cox, Jr., Clinical Professor, Colorado School of 
  Public Health, and President, Cox Associates...................    96
    Prepared statement...........................................    98
Gerry Sweeney, President and Chief Executive Officer, Rain CII 
  Carbon, LLC....................................................   112
    Prepared statement...........................................   114
David A. Wright, Commissioner and Vice Chairman, South Carolina 
  Public Service Commission, on Behalf of the National 
  Association of Regulatory Utility Commissioners................   137
    Prepared statement...........................................   139
David D. Doniger, Policy Director and Senior Attorney, Climate 
  and Clean Air Program, Natural Resources Defense Council.......   160
    Prepared statement...........................................   162
Steven E. Winberg, Vice President, Research and Development, 
  CONSOL Energy, Inc.............................................   172
    Prepared statement...........................................   174
Barbara Walz, Senior Vice President for External Relations and 
  Environmental, Tri-State Generation and Transmission 
  Association, Inc...............................................   181
    Prepared statement...........................................   183

                           Submitted Material

Article, dated June 6, 2012, ``Extraordinary extremes: Climate 
  scientists explain our crazy weather,'' by Donald Wuebbles and 
  Aaron Packman, Chicago Tribune, submitted by Mr. Rush..........   199


 THE AMERICAN ENERGY INITIATIVE, PART 20: A FOCUS ON EPA'S GREENHOUSE 
                            GAS REGULATIONS

                              ----------                              


                         TUESDAY, JUNE 19, 2012

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:09 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Shimkus, 
Walden, Terry, Bilbray, Scalise, Olson, McKinley, Pompeo, 
Griffith, Barton, Upton (ex officio), Rush, Castor, Sarbanes, 
Dingell, Green, Gonzalez, and Waxman (ex officio).
    Staff present: Charlotte Baker, Press Secretary; Maryam 
Brown, Chief Counsel, Energy and Power; Allison Busbee, 
Legislative Clerk; Cory Hicks, Policy Coordinator, Energy and 
Power; Heidi King, Chief Economist; Mary Neumayr, Senior Energy 
Counsel; Michael Aylward, Democratic Professional Staff Member; 
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; Caitlin Haberman, Democratic 
Policy Analyst; Elizabeth Letter, Democratic Assistant Press 
Secretary; and Alexandra Teitz, Democratic Senior Counsel, 
Environment and Energy.

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

    Mr. Whitfield. I would like to call this hearing to order 
this morning and welcome all of our members of the first panel. 
We genuinely appreciate your being with us today and your 
testimony on this very important subject matter of greenhouse 
gas regulations.
    I might say that today is the 20th day of our American 
Energy Initiative, and this morning, as I said, we will focus 
on the Environmental Protection Agency's greenhouse gas 
regulations. Now, there are so many regulations coming out of 
EPA that it is very easy to trivialize the impact of these 
regulations. EPA's greenhouse gas regulations range from rule-
setting new emission standards for cars and trucks to complex 
permitting requirements for donut factories, farmers, to rules 
affecting power plants. These greenhouse gas rules are a 
regulatory overreach in my view and serve as a backdoor cap and 
tax policy that Congress rejected in the last Congress. Any 
action regarding climate change should rest with Congress and 
not unelected and unaccountable bureaucrats at the 
Environmental Protection Agency.
    As a matter of fact, Lisa Jackson as administrator at EPA, 
I think she has unequivocally demonstrated that she intends to 
decide what fuels will be used to produce energy in America. 
The volume of regulations, the underestimated cost of the 
regulations, the direct job loss caused by the regulations, and 
the very brazen legal theories advocated by EPA attorneys has 
demonstrated in my view a callous disregard of some legal 
precedents. And the lack of concern about the families, for 
example, of coalminers who lose their jobs and people who work 
at utilities that burn coal that lose their job and the impact 
that it has on their family is something that I think we 
frequently just sweep under the rug because we are talking 
about how these regulations are going to create new jobs in 
other industries. But what about those people that lose their 
jobs and the impact on them?
    And I would just say that not only Members of Congress and 
others affected by these rules but the courts themselves I 
think are having some rather harsh language about what EPA is 
doing. In the recent Sackett decision, the Supreme Court 
unanimously rejected EPA's effort to deny due process to 
landowners. And one of the Justices in writing the opinion 
said, ``the position taken in this case by the Federal 
Government would have put the property rights of ordinary 
Americans entirely at the mercy of the Environmental Protection 
Agency.'' He further said that ``in a Nation that values due 
process, not to mention private property, such treatment is 
unthinkable.''
    And then in the recent Luminant case, the Fifth Circuit 
Court of Appeals rejected EPA's attempts to disapprove a Texas 
permit program, and said that the EPA's disapproval was based 
on ``purported nonconformity with three extra-statutory 
standards that the EPA created out of whole cloth.''
    And then in the recent Spruce Mine decision, a Federal 
judge rejected EPA's unprecedented attempt to invalidate a West 
Virginia coal mining permit that had been issued many years 
before. The court called EPA's rationale ``magical thinking'' 
and ``a stunning power for an agency to arrogate to itself.''
    And there are many other court decisions pending and we 
will see what the courts hold in those cases, but there seems 
to be a trend of holdings, a lot of holdings about ``magical 
thinking'' at EPA.
    It does seem to be an EPA-fulfilled prophecy that no new 
coal plants will be built in this country. And on our current 
path, it appears to be this Administration's fulfilled prophesy 
that electricity prices are going to go up. It is simply not 
acceptable, and I think we have an obligation and 
responsibility to work tirelessly with our colleagues to stop 
these policies that destroy jobs and will increase consumer 
electricity prices, particularly at this time in our Nation's 
history when we are trying to stimulate our economy.
    Once again, I do appreciate the witnesses being here and we 
look forward to your testimony.
    At this time, I would like to recognize the gentleman from 
Illinois, Mr. Rush, for a 5-minute opening statement.
    [The prepared statement of Mr. Whitfield follows:]


    [GRAPHIC] [TIFF OMITTED] 80625.001
    
    [GRAPHIC] [TIFF OMITTED] 80625.002
    
    [GRAPHIC] [TIFF OMITTED] 80625.003
    
 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.
    Today's hearing continues the concerted effort by those in 
the majority party to whittle the authority of the EPA and to 
de-legitimatize the Agency's regulation as unnecessary job 
killers in an attempt to counteract all of the various 
respected peer-reviewed studies that show that the 
Environmental Protection Agency actually creates jobs and 
stimulates the economy, as well as leading healthier and more 
productive constituencies.
    Today, we will hear more tall tales that attempt to debunk 
these facts and lead us to believe that any policy that 
regulates greenhouse gases will automatically lead to increased 
job losses. However, it is extremely important, Mr. Chairman, 
for all of us to remember that just because a few industry 
sources tell us that regulating greenhouse gases will be costly 
and will yield little to no benefit does not make it true. In 
fact, Mr. Chairman, I would like to submit for the record a 
June 6 Chicago Tribune article entitled ``Extraordinary 
Extremes: Climate Scientists Explain our Crazy Weather.'' This 
is an article written by a former panelist who once appeared 
before this subcommittee, Dr. Donald Wuebbles, a professor in 
the Department of Atmospheric Sciences and Electrical and 
Computer Engineering at the University of Illinois at 
Champaign-Urbana; and Mr. Aaron Packman, a civil and 
environmental engineering professor at Northwestern University. 
These two climate change experts reported that ``in March more 
than 15,000 warm weather records across our country were 
broken.'' My city Chicago had its warmest March in recorded 
history. The National Oceanic and Atmospheric Administration 
received 223 reports of tornadoes; 80 of these tornadoes 
occurred in March alone. Ohio and parts of the Southeast faced 
a string of tornadoes in early March that caused an estimated 
$1.5 million worth of damage.
    Mr. Chairman, these experts note that scientific models 
suggested these types of natural disasters are likely related 
to human-induced climate change, but also they advise 
fortunately that there are steps that we can take to mitigate 
these effects. We can grow America's investment in renewable 
energy, powering more homes with wind and solar energy. We can 
advance energy efficiency policies and use better appliances 
and equipment that avoid wasting energy and save money on 
utility bills. We can manufacture and drive more fuel-efficient 
cars that save money at the gas pump, lessen America's 
dependence on foreign oil, and reduce greenhouse gas pollution.
    Mr. Chairman, my fear for today's debate is that it is 
being framed in a way where we are presented with a false 
choice between implementing environmental standards to protect 
our citizens or allow ``job-killing'' EPA regulations to move 
forward. In fact, history has proven that we could indeed do 
more. We can protect our environment and balance regulations 
that create jobs and new technologies, protecting the public 
health, increase worker productivity, and promote clear air.
    We have done precisely this before and, Mr. Chairman, I am 
certain and I trust that we would do it again.
    With that I yield back the balance of my time.
    Mr. Whitfield. Gentleman's time has expired.
    At this time, I recognize the gentleman from Michigan, Mr. 
Upton, Chairman of the Energy and Commerce Committee, for 
opening statement.

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

    Mr. Upton. Well, thank you, Mr. Chairman.
    It was nearly 3 years ago that cap-and-trade legislation 
was being voted on by this committee and then the full House, 
and few of us who were involved in that debate are likely to 
ever forget it. Cap-and-trade, at least for me and many others, 
was bad news all around, high cost without benefit. 
Nonetheless, proponents made their case in favor of it, and one 
of their arguments is very relevant to today's hearing. At the 
time, EPA Administrator Lisa Jackson and other supporters 
asserted that enacting cap-and-trade legislation was a far less 
costly alternative to piecemeal EPA regulations seeking to 
achieve the same ends.
    I certainly did not agree with the logic that we should 
pass a bad global warming bill in order to avoid worse 
nightmares and regulations, but Administrator Jackson was right 
about one thing--as awful as cap-and-trade energy taxes would 
have been, the Agency's greenhouse gas regs are looking even 
worse. And EPA has only begun to roll out its regulatory 
agenda.
    We are already seeing the Agency's greenhouse gas 
permitting requirements acting as yet another roadblock to the 
economic recovery and job growth. It is a sad irony that the 
very job-creating activities this struggling economy screams 
out for--things like building a new factory or expanding an 
existing one, or boosting electric generating capacity to meet 
demand--are precisely what is being targeted by EPA with these 
burdensome GHG permit requirements. And this new red tape is 
above and beyond the long list of other measures imposed by the 
Clean Air Act and other statutes.
    And there will be more to follow, including New Source 
Performance Standards for GHGs from coal-fired power plants and 
refineries. It is not only the largest employers who are at 
risk; we are also seeing signs of EPA's GHG regs actions 
reverberating throughout the rest of the economy, too. Small 
businesses and farmers that are not directly regulated, at 
least not yet, are going to have to deal with the higher energy 
costs that will be passed on to them by those who are.
    Today, we have a valuable opportunity to listen to the job 
creators, large and small, who have serious concerns with many 
aspects of EPA's greenhouse gas agenda. I was proud to partner 
with Congressman Whitfield and Senator Inhofe, and many others 
on both sides of the aisle, to address those concerns in H.R. 
910, the Energy Tax Prevention Act. And I look forward to 
continued discussions to ensure a pro-jobs, pro-growth, and 
pro-energy future for America.
    And I would yield the balance of my time to Mr. Barton.

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

    Mr. Barton. Thank you, Chairman Upton, and thank you, 
Chairman Whitfield and Ranking Members Waxman and Rush, for 
holding this hearing.
    Today, we are looking at greenhouse gas regulations. 
According to the EPA's own model, if we implement everything 
that they have proposed, we are going to reduce CO2 
concentrations in the upper atmosphere by 2.9 parts per 
million--2.9. This will result, according to their model, in a 
temperature reduction that would otherwise have occurred of 
somewhere between 6 thousandths and 15 thousandths of a degree 
centigrade by the year 2100. Mr. Chairman, that is such a small 
difference that you cannot measure. We don't have the measuring 
ability to discriminate at that level.
    Now, I do not believe that a temperature difference of 
somewhere between 6 thousandths and 15 thousandths of a degree 
centigrade is going to make one iota of difference in any 
individual's health on this planet between now and the year 
2100. However, I do believe that the additional cost incurred 
to reach that magnificent reduction is going to be felt by 
everybody on the planet to the tune estimated of somewhere in 
the neighborhood of $7 trillion--7 trillion.
    To put that in perspective, the very first car that I 
bought in 1968 was a 1967 Ford Mustang. I bought it used for 
about $1,600. Just the additional cost for tailpipe emissions 
on these various regulations are going to cost in the 
neighborhood of $4,000 per car, cost more incrementally per car 
than the first car I bought, admittedly, a used car in 1968. It 
just doesn't make sense, Mr. Chairman. And hopefully, in the 
next Congress and perhaps even in this Congress, we can do 
something to forestall some of these regulations.
    With that I yield back.
    Mr. Whitfield. Thank you. At this time I recognize the 
ranking member of the full committee, Mr. Waxman of California, 
for an opening statement.

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

    Mr. Waxman. Mr. Chairman, today's hearing is no surprise, 
but it is deeply disappointing. The Republican majority is 
holding yet another hearing to condemn EPA action to reduce 
carbon pollution. Eighteen months into this Congress, the 
majority still denies the threat posed by climate change and 
recklessly rejects considering any action to address one of the 
gravest dangers facing the world today.
    When it comes to climate change, the Republicans are giving 
new meaning to the phrase, ``just say no.'' Congressman Rush 
and I have written over 10 times to Chairman Upton and Chairman 
Whitfield urging them to hold hearings on new scientific 
findings about climate change. The chairmen have said no to 
hearings on the harm climate change poses to crop yields and 
the effects of ocean acidification. They have said no to 
hearings on the threat of methane releases and the shrinking 
time left for action. They have said no to hearings on climate 
change reports issued by the International Energy Agency, the 
National Academy of Sciences, and the Vatican.
    Instead of examining the science, House Republicans have 
voted that climate change does not exist, and they have voted 
37 times on the House Floor of this Congress to block efforts 
to prevent climate change. The Republicans have also said no to 
clean energy, which would grow jobs and the economy. They have 
voted 45 times on the House Floor to block investments in clean 
energy and energy efficiency. The Republicans have voted 
against cleaner vehicles that saved consumers money at the pump 
and reduce Americans' dependence on oil. They have even voted 
against better incandescent light bulbs that produce exactly 
the same light with less energy and lower overall cost.
    The House Republicans are trying to deny the laws of 
nature. They have voted to reject the most basic facts and 
scientific findings. They denied basic physics which finds that 
greenhouse gases trap heat. They denied decades of measurements 
showing steadily rising quantities of carbon dioxide in the 
atmosphere. They reject cutting-edge satellite readings showing 
rising temperatures. And they say they know more than the very 
best scientists at the preeminent scientific body in our 
Nation, the National Academies. And I guess that is why they 
are not invited to come and testify.
    Just last week, we learned that the Republican legislators 
in North Carolina are moving a bill that forbids use of 
projected rates of sea level rise that are any higher than 
historical rates for the purposes of State planning. Can you 
imagine that? They are jeopardizing homes along their coast 
because accepting reality would conflict with their political 
ideology.
    The Republican Party has a choice. It could continue down 
the path of science denial and continue to pass bills, 
declaring that the sea won't rise, or it can stop denying the 
science and start grappling with how to respond to climate 
change. We have legitimate disagreements about the best 
response, but science denial is indefensible over the short-
term and unsustainable over the long-term. Already, decades of 
inaction have locked in more warming and higher cost to 
respond. The longer we wait to say yes, the higher the prices 
will be.
    The price of this denial will be paid by the American 
entrepreneurs, workers, and communities that want to 
participate in the clean energy economy of the future. It will 
be paid by the small towns and large cities that have faced 
billions of dollars of infrastructure cost from seas that don't 
heed legislative commands. It will be paid by farmers with less 
productive crops and communities struggling with persistent 
droughts and raging wild fires. It will be paid by over a 
million species of animals and plants that may go extinct. The 
price of this denial will be paid by many generations to come, 
starting with our own children and grandchildren. This is worse 
than disappointing. It is shameful.
    I yield back my time.
    Mr. Whitfield. Gentleman yields back the balance of his 
time. At this time, are there any other opening statements? OK.
    At this time, we welcome the first panel once again. And I 
will introduce all of you at this point. First of all, we have 
Mr. Robb MacKie, who is the president and CEO of the American 
Bakers Association. We have Mr. Carl Shaffer, who is president 
of the Pennsylvania Farm Bureau. We have Mr. Charles Smith, who 
is the president and CEO of CountryMark Cooperative. We have 
Mr. Daniel Weiss, who is the senior fellow and director of 
Climate Strategy at the Center for American Progress. We have 
Dr. William Chameides. Would you pronounce it for me, Doctor?
    Mr. Chameides. It is Chameides, but I am used to lots of 
different variations, as you might expect.
    Mr. Whitfield. Chameides. OK. Well, we thank you for being 
here. And he is the dean at the Nicholas School of the 
Environment at Duke University. We have Dr. Louis Anthony Cox, 
who is the clinical professor of the Colorado School of Public 
Health and president of Cox Associates. And then we have Mr. 
Gerry Sweeney, who is the president and CEO of Rain CII Carbon.
    So, once again, welcome to all of you. Each of you will be 
given 5 minutes to make an opening statement, and once we have 
concluded that then, the panel I am sure will have a lot of 
questions for all of you.
    So, Mr. MacKie, I will recognize you for your 5-minute 
opening statement. And I might just mention that on the table 
there are two little monitors there and, if it is working, a 
little red light will come on when your time has expired. So we 
don't expect you to end immediately, but if you would notice 
that periodically, that would be great.
    So you are recognized, Mr. MacKie.

   STATEMENTS OF ROBB MACKIE, PRESIDENT AND CHIEF EXECUTIVE 
OFFICER, AMERICAN BAKERS ASSOCIATION; CARL SHAFFER, PRESIDENT, 
   PENNSYLVANIA FARM BUREAU, AND BOARD MEMBER, AMERICAN FARM 
BUREAU FEDERATION; CHARLES SMITH, PRESIDENT AND CHIEF EXECUTIVE 
OFFICER, COUNTRYMARK COOPERATIVE HOLDING CORPORATION; DANIEL J. 
 WEISS, SENIOR FELLOW AND DIRECTOR OF CLIMATE STRATEGY, CENTER 
FOR AMERICAN PROGRESS ACTION FUND; WILLIAM L. CHAMEIDES, DEAN, 
 NICHOLAS SCHOOL OF THE ENVIRONMENT, DUKE UNIVERSITY, AND VICE 
    CHAIR, COMMITTEE ON AMERICA'S CLIMATE CHOICES, NATIONAL 
 RESEARCH COUNCIL/NATIONAL ACADEMY OF SCIENCES; LOUIS ANTHONY 
COX, JR., CLINICAL PROFESSOR, COLORADO SCHOOL OF PUBLIC HEALTH, 
AND PRESIDENT, COX ASSOCIATES; AND GERRY SWEENEY, PRESIDENT AND 
         CHIEF EXECUTIVE OFFICER, RAIN CII CARBON, LLC

                    STATEMENT OF ROBB MACKIE

    Mr. MacKie. Great, thank you, Mr. Chairman, members of the 
subcommittee. Good morning and thank you for the opportunity to 
be with you this morning.
    My name is Robb MacKie, and I am president and CEO of the 
American Bakers Association. ABA is the voice of the wholesale 
baking industry in the United States. ABA advocates on behalf 
of more than 700 baking facilities and baking company suppliers 
nationwide. ABA members produce bread, rolls, crackers, bagels, 
sweet goods, tortillas, and many other wholesome, nutritious 
baked products for America's families. The baking industry 
generates more than $102 billion in economic activity annually, 
and we employ over 630,000 highly skilled employees in the 
industry.
    I would like to share our industry's concerns regarding the 
EPA's Tailoring Rule and its impact on the baking industry. If 
the Clean Air Act CO2e trigger thresholds are lowered from 
100,000 tons per year to 250 tons per year, many more bakeries 
will be subjected to expensive and unnecessary Title V 
requirements and Prevention of Significant Deterioration, or 
PSD, regulations. The cost to impacted bakeries could be 
devastating.
    Approximately 20 percent of baking industry is currently 
covered under Title V permits. Many bakers have accepted 
federally enforceable limits on production, otherwise known as 
Synthetic Minor Permits, to minimize their emissions and to 
avoid the cost and regulatory burden of the Title V permit 
program. If the potential CO2e emissions threshold is lowered 
to 250 tons per year, a much larger portion of the baking 
industry would be forced into the Title V process. This would 
needlessly increase compliance cost, seriously constrict 
bakers' ability to respond to market demand, and potentially 
require expensive controls on CO2 emissions despite the 
industry already relying upon clean natural gas for its ovens.
    Importantly, EPA would likely state that its PSD 
regulations also cover so-called biogenic CO2 processes, 
including the natural fermentation of yeast from rising dough. 
In 2009, Administrator Jackson promised that the EPA would not 
regulate ``every cow and Dunkin' Donuts,'' but that is exactly 
what would happen. Let me explain in more detail.
    There are three stages of the baking process. First, 
ingredients such as flour, sugar, yeast, and water are mixed 
together into dough. The dough is then allowed to rest in a 
proofing area where the yeast ferments sugars in the dough to 
create CO2 and ethanol that makes the dough rise. I can 
remember my grandmother getting very upset if I was running 
through the kitchen and disturbed her rising dough and cake in 
her kitchen. While the scale is different, the process is the 
same in a commercial bakery. After rising, the dough is then 
baked in a clean natural gas-fired oven at temperatures ranging 
from 180 to 200 degrees Fahrenheit.
    Many bakery products, particularly breads and sweet goods, 
are made with yeast. Yeast is not an unpronounceable industrial 
chemical; it is a living, breathing organism that creates a 
natural chemical process. Yeast cells use food, moisture, 
warmth, and air to ferment and help the dough rise and create 
CO2 as a byproduct like we do when we breathe.
    Yeast is the most commonly used leavener in bread-making, 
and serves three main functions. First, CO2 production during 
yeast fermentation results in stretching and expansion of the 
dough, giving bread its characteristic open structure, as well 
as the nooks and crannies. Second, yeast fermentation 
strengthens the flour in the dough so it better captures and 
holds the CO2 that is produced. Finally, yeast fermentation 
provides the distinctive flavors, aromas, and texture that make 
baked products so appealing. As bread dough is baked, the CO2 
that was produced by the yeast activity is released.
    The emissions from yeast in bread production are extremely 
difficult to estimate. Any EPA rule that requires precise 
quantification will be technologically challenging and 
exceedingly expensive.
    There are several reasons that the Clean Air Act is a poor 
fit for natural biological processes like yeast fermentation 
and bread-baking. First, bakers make a variety of products that 
have different levels of yeast. These products change 
seasonally and with customer demand. Second, protein levels of 
wheat change dramatically from year to year. If the wheat is 
low or high in protein, then the recipe must be adjusted to 
maintain the proper balance of flour and sugars. Third, there 
is no smokestack, so to speak, at which to measure fermentation 
emissions, but instead, bakers would have to use predictive 
models, altering the inputs every time the product type and 
recipe are modified. And, of course, expensive consultants and 
additional measuring equipment would be needed to accomplish 
these tasks.
    In contrast to natural CO2 emissions, bakers can easily 
determine their fuel usage for ovens and their contribution 
toward the baker's CO2 emissions profile. But as mentioned, 
bakeries already use clean-burning natural gas. Carbon dioxide 
and water vapors are the by-products of efficient and clean 
combustion. While bakers continue to explore the cost and 
technical feasibility of cogeneration and other efficiency 
measures, it is difficult for the industry to find ``greener'' 
ovens to bake product.
    Lowering the Clean Air Act regulatory threshold would sweep 
many bakeries with considerable economic impacts. For purposes 
of illustration, a typical mid-sized bakery might have three 
production lines for bread and roll products. Each line would 
operate an average of 500 hours per month with an average 
production of 2,000 tons of product per month. This bakery 
would consume approximately 7 million cubic feet of natural gas 
per month with annual CO2e emissions just from the fuel alone 
of 4,500 tons per year, well over the 250-ton threshold but 
well below the current 100,000-ton threshold.
    Under the revised Clean Air Act threshold, this bakery 
would now be subject to EPA's onerous PSD rules in under a 
month of operation. In terms of biogenic CO2, the emissions 
from natural yeast fermentation, the bakery could produce 37 
tons of CO2 per month, thus trigger PSD review between 6 and 7 
months of operation.
    Bakeries are already subjected to excessive control 
technology costs for ethanol emissions, which is ironically 
also a natural product of yeast fermentation. To meet current 
Clean Air Act requirements, the cost to larger bakeries for 
adding a catalytic oxidizer on a bread/roll bakery oven got----
    Mr. Whitfield. Mr. MacKie, you are about 2 minutes over. 
So----
    Mr. MacKie. Right.
    Mr. Whitfield [continuing]. If you would conclude.
    Mr. MacKie. I will do that. Sorry, Mr. Chairman.
    The bottom line is the cost of any new overly broad rules 
that regulate natural, agriculture-related CO2 or clean natural 
gas used in baking ovens will ultimately force American 
families to pay more for their baked goods.
    Appreciate the opportunity. I would be happy to answer any 
questions.
    [The prepared statement of Mr. MacKie follows:]
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    Mr. Whitfield. Thank you so much.
    Mr. Shaffer, you are recognized for 5 minutes.

                   STATEMENT OF CARL SHAFFER

    Mr. Shaffer. Mr. Chairman, ranking member, and members of 
the committee, my name is Carl Shaffer. I have the privilege of 
serving on the Board of Directors of the American Farm Bureau 
Federation and as president of the Pennsylvania Farm Bureau. I 
am pleased to offer this testimony on their behalf.
    As you know, EPA is phasing in the application of its 
greenhouse gas regulations through the promulgation of a 
Tailoring Rule under which the permitting requirements will 
apply to the largest emitters first, followed by small emitters 
at some unspecified future date. But even with this phased-in 
approach, farmers and ranchers are already being adversely 
affected by greenhouse gas regulations through increase fuel 
and energy cost passed down by utilities and refineries.
    EPA itself estimated that there are more than 37,000 farms 
and ranches that emit between 100 and 25,000 tons of greenhouse 
gases per year and would likely be subject to Title V or 
operating permit requirements. This is concerning since, in the 
final Tailoring Rule, EPA estimated the average cost to obtain 
a permit would be more than $23,000. Using EPA's own numbers, 
just the expense of obtaining permits will cost agriculture 
more than $866 million. These costs are a significant burden to 
livestock producers.
    While the Tailoring Rule has thus far deferred those 
permitting requirements for agricultural facilities, we still 
have two major concerns with the Tailoring Rule. First, it can 
only defer the permitting requirements for smaller emitters, 
not exempt them completely. The Clean Air Act clearly and 
specifically defines major sources as those emitting more than 
100 tons or 250 tons of regulated pollutants per year. To put 
this in perspective, we are talking about farms with 25 dairy 
cows, 50 beef cattle, or 200 hogs. These numbers represent 
about 90 percent of America's livestock production which would 
be subject to Title V permitting requirements. Even by the 
standards of my father's generation, these numbers do not 
describe large farms. Only Congress can change these 
thresholds.
    A provision in the fiscal year 2012 Interior Appropriations 
Bill prevented EPA from currently regulating greenhouse gas 
emissions from livestock, but there is no assurance that a 
similar provision will be in place for fiscal year 2013. There 
is little or no flexibility in the Clean Air Act to deviate 
from these requirements. Although the EPA administrator has 
expressed an intention not to regulate livestock emissions, 
there is nothing in the statute granting the administrator the 
authority to exempt agriculture from regulation.
    Secondly, the Tailoring Rule is one of several greenhouse 
gas rules that are being challenged in the Court of Appeals for 
the District of Columbia. Oral arguments were heard on all of 
the rules in late February and a decision on the legality of 
these rules is expected in the very near future. A court ruling 
overturning the Tailoring Rule would immediately make the fear 
direct cost described previously become a sudden reality for 
farmers and ranchers across the Nation. This regulatory train 
has already headed down the tracks and is picking up speed.
    I want to thank you for conveying this hearing and the 
invitation to testify, and I welcome taking your questions.
    [The prepared statement of Mr. Shaffer follows:]
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    Mr. Whitfield. Thank you very much.
    Mr. Smith, you are recognized for 5 minutes.

                   STATEMENT OF CHARLES SMITH

    Mr. Smith. Chairman Whitfield, Ranking Member Rush, and 
members of the subcommittee, thank you for giving me the 
opportunity today to testify at the hearing on the American 
Energy Initiative. My name is Charlie Smith, and I am president 
and CEO of CountryMark, and I believe it is important for 
Congress to understand how the process affects companies such 
as CountryMark.
    CountryMark is an oil refinery. We are pretty different 
from any other refinery in the world. We are owned by over 
100,000 farmers. We are leaders in distribution of biodiesel 
and ethanol. The crude we refine is a 100 percent American and 
comes from oilfields in Indiana, Illinois, and Kentucky. We 
refine 27,000 barrels per day of crude, which makes us one of 
the smallest refineries in the country. The other refinery in 
the State of Indiana is 15 times larger than us. We are a very 
small fish in a very big pond.
    My written testimony provides more details into 
CountryMark's position on greenhouse gas regulations. My oral 
testimony today I would like to focus on a few areas.
    The cost of regulatory burdens on our industry are 
dramatically underestimated by the EPA many times. For example, 
the EPA required CountryMark to install continuous emissions 
monitoring systems at our refinery. The EPA's cost estimate was 
that this would cost $9,500 per refinery and would have no 
impact on the refinery. In fact, the EPA did not even convene 
the SBREFA process to look at the cost and the impact on small 
business refiners. In the end, we spent $450,000 to install 
that equipment; we will spend $4 million over the next 10 years 
to operate it. The EPA's cost estimate for that same equipment 
was $10,000.
    The EPA pursues its regulatory goals with multiple rules 
producing harmful uncertainty for our industry. In May 2010, 
the EPA had issued its final rule addressing greenhouse gas 
emissions from stationary sources. Under that Tailoring Rule 
existing facilities with carbon dioxide emissions exceeding 
100,000 metric tons per year are required to obtain an updated 
operating permit. In addition, facilities to implement 
modifications increasing CO2 emissions by 75,000 metric tons 
would require a PSD permit.
    However, of great concern to us is that EPA has then 
indicated they intend to further restrict greenhouse gas 
emissions from the refining sector alone by applying another 
concept called New Source Performance Standards, NSPS. By 
uniquely regulating greenhouse gas emissions from the U.S. 
refining sector, the EPA directly threatens refineries, 
especially the small ones like CountryMark.
    Unlike the Tailoring Rule, meeting NSPS requirements 
involves Best Available Control Technology, which is frequently 
uneconomic in small refineries. If the EPA uses NSPS rulemaking 
to drive greenhouse gas limits to the statutory limits of 250 
metric tons or less, this will be orders of magnitude more 
stringent than the current Tailoring Rule. Because small 
refineries are particularly sensitive to capital cost, the 
additional NSPS requirements to meet the stricter limits would 
make modifications uneconomical. That would limit our ability 
to improve our process, grow our refinery, and it starts to 
threaten the jobs.
    EPA's own rules frequently conflict with each other. For 
example, EPA required CountryMark to spend $85 million to 
reduce sulfur in gasoline and diesel fuel. We spent $6.2 
million per year operating this equipment. Two years after the 
startup of our low sulfur gasoline project, EPA indicated we 
come up with Tier 3 gasoline regulations to further reduce 
sulfur in gasoline. CountryMark has estimated complying with 
this additional requirement will cost another $15 million.
    Reduction in sulfur has been done on the manner that is not 
cost-effective; it has been done piecemeal instead. But 
ironically, these low sulfur mandates require us to utilize 
equipment that increases our greenhouse gas footprint by 15 
percent.
    The cumulative impact of these regulations seriously 
threatens our company. Each regulation EPA promulgates is a 
cost, yet the EPA never examines the collective impact of the 
regulations. By employing rule-by-rule focus to their economic 
analysis, the larger cumulative impact is hidden.Its cumulative 
impacts are true cost and other costs we experience every day. 
They drive up the cost of our products and they threaten our 
long-term viability.
    We operate in a county with 26,000 residents and we employ 
over 300 workers. Each year, we put $30 million of wages and 
benefits a year into that community. We spent $800 million a 
year buying crude oil from 40,000 individual royalty owners in 
Indiana, Illinois and Kentucky. Total economic impact in the 
tri-State area is $2.5 billion per year. That is money that 
stays in America's heartland. It is manufacturing costs. They 
are the jobs that we covet as a Nation both during recessionary 
times and not. If we continue to increase these costs, 
companies like CountryMark will be unable to compete with the 
large multinational oil companies both here and abroad.
    Thank you for the opportunity to be here today. We fully 
support legislation that would impose rational and realistic 
cost analyses, cumulative impact analyses, and congressional 
approval of the EPA's ability to regulate greenhouse gas 
emissions from the refining industry and especially small 
business refiners.
    Thank you.
    [The prepared statement of Mr. Smith follows:]
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    Mr. Whitfield. Thank you.
    Mr. Weiss, you are recognized for 5 minutes.

                  STATEMENT OF DANIEL J. WEISS

    Mr. Weiss. Thank you, Mr. Chairman, Ranking Member Rush, 
and members of the subcommittee. Thank you very much for the 
opportunity to testify today.
    I would like to address several elements of EPA's proposed 
carbon pollution standard. In 2007, the Supreme Court ruled in 
Massachusetts v. EPA that ``greenhouse gases fit well within 
the Clean Air Act's definition of air pollutant.'' Based on 
this decision, EPA must first determine whether carbon 
pollution endangers the public health and welfare.
    In 2008, then-EPA Administrator Stephen Johnson wrote to 
then-President George W. Bush that ``the Supreme Court's 
Massachusetts v. EPA decision combined with the latest science 
of climate change requires the Agency to propose a positive 
endangerment finding. It does not permit a credible finding 
that we need to wait for more research.'' Johnson also 
recommended to the President that EPA begin to regulate carbon 
pollution from major sources.
    President Bush ignored Administrator Johnson in the law. 
After the Obama administration made the endangerment finding, 
it established limits on carbon pollution for motor vehicles 
and addressed permits for large, new, and expanded industrial 
facilities.
    As Congress intended, EPA wisely focused on a relatively 
small number of the largest new industrial sources that emit 
more than 100,000 tons per year of carbon pollution and on 
expanded facilities that increased their emissions by 75,000 
tons per year. This Tailoring Rule includes the sources of 
about 70 percent of industrial carbon pollution. And I would 
just like to note that the American Farm Bureau Federation, the 
American Petroleum Institute, and the National Petrochemical 
and Refiners Association are all plaintiffs in the lawsuit that 
are trying to overturn the Tailoring Rule so that the concerns 
raised by Mr. Shaffer and Mr. Smith will actually come true.
    The Clean Air Act requires that a new facility seek a clean 
air permit. In 2011, there were fewer projects with enough 
pollution to qualify than both industry and EPA predicted. As 
of December of last year, EPA and the State permitting 
authorities have issued 18 permits with carbon pollution limits 
with about 50 other permit applications pending or an average 
of one per State.
    On April 13th, the Environmental Protection Agency proposed 
the first-ever rules that limit carbon pollution from new power 
plants. The proposal will require these plants to emit 40 to 60 
percent less carbon pollution than a typical new coal-fired 
power plant. Richard Morgenstern, a former Reagan and Clinton 
EPA official, predicts that the new carbon pollution will have 
``no net impact'' on employment.
    Americans support reductions of carbon pollution. In March 
2012, a bipartisan poll by the American Lung Association found 
``after listening to a balanced debate with messages both for 
and against setting new carbon standards, 63 percent were in 
favor of action and 33 percent opposed.'' The Republican 
pollster who did the poll concluded that ``there is broad 
support across partisan lines for new carbon regulations on 
power plants.'' In addition, nearly 2 million people have 
already submitted comments to EPA in favor of the proposed 
rule.
    Now, some claimed that there is a war on coal. This is 
untrue. For instance, the Obama administration has made 
significant investments in technologies to reduce carbon 
pollution from coal combustion. The American Recovery and 
Reinvestment Act included $3.4 billion for carbon capture and 
storage technology research including funds to revive the 
FutureGen clean coal pilot project that President George W. 
Bush had scrapped. There was also funds for seven other clean 
coal projects.
    Coal mining employment figures also debunk this mythical 
war. In May, the Charleston Gazette reported that ``employment 
in the Appalachian mining industry is at 14-year high.'' The 
nonpartisan West Virginia Center for Budget and Policy reports 
that coal mining jobs there are rising. Energy Information 
Administration data shows increases in other States, too, 
including Illinois, Pennsylvania, and Virginia. Coal companies 
continue to make huge profits. In 2011, the two largest 
companies, Peabody Energy and Arch Coal, made a combined profit 
of over $1 billion.
    Reducing carbon pollution grows more urgent. For instance, 
on June 16, a few days ago, the San Francisco Chronicle 
reported that Californians face an increase in the West Nile 
virus due to global warming. Now, some in Congress still deny 
that climate change is real or caused by human activity even 
though the National Academy of Sciences found that ``97 to 98 
percent of the climate researchers support the tenets of human-
made climate change.''
    The House of Representatives has been a roadblock to 
cleanup. In this Congress, they had cast 37 votes to block 
climate change action. We urge the House to reduce the climate 
change threat to Americans' health, economy, and jobs by 
heeding the words of General George S. Patton--``lead me, 
follow me, or get out of my way.''
    Thank you very much.
    [The prepared statement of Mr. Weiss follows:]
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    Mr. Whitfield. Thank you.
    Dr. Chameides, you are recognized for 5 minutes.

               STATEMENT OF WILLIAM L. CHAMEIDES

    Mr. Chameides. Chairman Whitfield, Ranking Member Rush, and 
members of the subcommittee, thank you for inviting me here 
today to talk with you. My name is William Chameides, and I am 
the dean of the Nicholas School of the Environment at Duke 
University. I am an atmospheric scientist having spent much of 
my career studying the chemistry of the lower atmosphere and 
the impacts of regional air pollution.
    I am speaking to you today in my role as vice chair of the 
report ``America's Climate Choices'' issued by the National 
Research Council of the National Academy of Sciences. Our 2012 
report was the capstone in a five-report series, and for your 
reading pleasure I brought a copy right here ready for anyone 
who wants to take me up on it. The report was carried out at 
the request of Congress and brought together more than 90 
volunteer experts including top climates, social, and economic 
scientists, as well as leaders from the private sector, former 
office holders at both the Federal and State level. Our reports 
were all prepared according to the stringent National Academy 
guidelines for balance, objectivity, and peer review.
    The report summarized what we know about climate change, 
and what kinds of response choices we face as a Nation. Some 
key take-home points: first, climate change is occurring, and 
the recent change is very likely primarily caused by the 
emissions of greenhouse gases from human activities and poses 
significant risks for a range of human and natural systems. 
Second, the environmental, economic, and humanitarian risks of 
climate change and its impacts indicate a pressing need for 
substantial action to limit the magnitude of climate change and 
to prepare to adapt to its impacts.
    Third, we can always expect to face some uncertainties 
about future climate risks, but uncertainty is not a reason for 
inaction. Indeed, uncertainty cuts both ways. While climate 
change could ultimately prove to be less severe than current 
best estimates indicate, it could easily prove to be more 
severe. And finally, while current response efforts of local, 
State, and private-sector actors are significant, they are not 
likely to yield the degree of progress needed to achieve what 
we need without Federal policies.
    Much of what we know about the climate is a product of more 
than 100 years of research founded on the most basic laws of 
science such as the first law of thermodynamics and grounded by 
observations of the climate system. While climate models play 
an important role in climate research, it would be incorrect to 
characterize global warming as conjecture based on climate 
models or simulations.
    As a context for today's discussion, here are some 
scientifically documented facts about the climate system. 
Thermometer measurements show that the Earth's average surface 
temperature has risen substantially over the past century, 
especially over the last 3 decades, and these data are 
corroborated by a host of independent observations. Carbon 
dioxide concentrations are higher today than they have been for 
at least the past 600,000 years. Most of the recent warming can 
be attributed to fossil fuel burning and other human 
activities. Changes in solar radiation and volcanic activity 
can also influence the climate but observations show that they 
cannot explain the recent warming trends.
    In addition to our careful conclusions about what science 
has shown to be true about climate change, our report also 
highlights some motivating factors for why response efforts 
need to move ahead quickly. First, the faster the emissions are 
reduced, the lower the risks and the less pressure to make 
steeper and potentially more expensive reductions later. 
Second, current energy structure investments could lock in a 
commitment to substantial new emissions for decades to come. 
Enacting relevant policy now will provide crucial guidance for 
investment decisions. And finally, while policies can 
potentially be reversed or scaled back if needed, adverse 
changes in the climate system are likely to be difficult or 
impossible to undo.
    To move ahead, the committee identified five broad areas of 
action: substantially reduce greenhouse gas emissions; begin 
mobilizing new actions for adaptation; invest in science, 
technology, and information systems; participate in 
international climate change response efforts; and coordinate 
national response efforts.
    My written testimony contains more information on these 
initiatives and the reports offer a detailed analysis of many 
different options. ACC has a recommendation to adopt a flexible 
approach that continuously assesses new information, scientific 
knowledge and technology advancers, and adjust responses 
according, an approach we call integrated risk management.
    Members of Congress, with each additional ton of heat-
trapping gases we emit, we commit the world to further climate 
change and greater risks. It is much like a huge debt. Every 
time we emit more carbon dioxide to the atmosphere, we increase 
that debt and we will have to pay it down at some point. Our 
committee believes it is prudent even imperative to act now to 
limit and adapt to climate change.
    Thank you very much for your attention. I will be happy to 
answer your questions.
    [The prepared statement of Mr. Chameides follows:]
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    Mr. Whitfield. Thank you very much.
    And Dr. Cox, you are recognized for 5 minutes.

              STATEMENT OF LOUIS ANTHONY COX, JR.

    Mr. Cox. Chairman Whitfield, Ranking Member Rush, members 
of the subcommittee, thank you for your invitation to be here 
this morning. My name is Tony Cox and I am an expert in risk 
analysis. I am going to discuss health risks related to 
regulation of greenhouse gases.
    Several recent high-profile articles in scientific journals 
and in the press have announced that tighter regulation of air 
emissions will save lives. The claim is that reducing emissions 
of air pollutants including greenhouse gases will quickly 
reduce mortality rates, especially among the elderly. For 
example, a typical headline from earlier this year is, ``Cuts 
in methane soot emissions quickly save lives, climate, and 
crops.'' Mr. Rush earlier alluded to healthier constituents 
from lower emissions. And this is a common perception. I will 
address the truth and certainty of such claims.
    The most important thing to know about them is that these 
predictions are not based on real-world experience showing that 
reducing emissions actually does cause lower mortality rates. 
They do not come from careful causal analysis of real data. 
Instead, they are based on hypothetical computer model 
projections and on unverified statistical assumptions. No real 
health effects caused by current ambient pollutant levels have 
been established.
    For example, the underlying scientific articles suggesting 
health benefits might look at the fact that heart attack rates 
have decreased over many years and arbitrarily assume that some 
or all of this decline is caused by reductions in air 
pollution. Or they might observe that more elderly people die 
in winter when pollution levels are high and assume that a 
large fraction of the deaths are caused by pollution. But more 
careful causal analysis suggests that these conclusions do not 
follow from the data. When testable causal hypotheses about 
pollution health effects are formulated and compared to data, 
they turn out to be mistaken. Predicted physiological changes 
in the individuals and mortality changes in populations do not 
actually occur following changes in pollution levels. What is 
left is a set of ambiguous statistical associations that have 
no clear health implications.
    The second thing to understand is that the raw data on 
pollution and health effects are actually quite ambiguous. They 
do not clearly show that current or recent levels of air 
pollution cause increased mortality or morbidity rates. 
Instead, there is no clear evidence of any causal relation 
between them.
    Some studies report significant positive associations. Many 
others show significant negative associations. For ozone, for 
example, higher concentrations are commonly associated with 
lower morbidity rates. Scientists at EPA and elsewhere have 
ignored such negative associations and chosen to consider only 
positive values in preparing their projections of positive 
health benefits from further reductions in air pollution. They 
assume that positive associations are causal while noting in 
the fine print that this has not actually been established.
    In any case, data on historical associations between past 
levels of pollution and past levels of health effects, such as 
the data that EPA primarily relies on, do not actually address 
the question that policymakers should care about most. They do 
not predict what future changes in health effects would be 
caused by future changes in pollutant levels. Current 
projection of health benefits from further emissions reductions 
rest on a mix of wishful thinking and bad statistics.
    The third thing to know is that it is possible to do better 
using more objective methods of causal analysis. The key to 
obtaining more trustworthy projections is to use rigorously 
validated causal models and objective tests of causal 
hypotheses about health effects of pollutants.
    Many such rigorous tests are now available in computational 
statistics and related fields. They rely on sound principles 
such as that a true cause should help to predict its effects 
and that a true effect should be preceded by its alleged 
causes. But these important required properties are not true 
for the relation between air pollution and mortality rates in 
data that I and others have analyzed.
    In summary, I urge you not to believe claims that reducing 
greenhouse gases and other emissions create large human health 
benefits. These claims rest on unverified assumptions and 
subjective interpretations, not on validated causal models or 
real-world facts. The more care that is taken to use 
appropriate methods of causal analysis the more previous claims 
of beneficial health effects melt away. What is left offers no 
objective reason to believe that ever-lower emission levels 
will cause ever-better health.
    The point of diminishing returns in health benefits was 
probably reached long ago. And now, we should not expect new 
benefits from new emissions reductions. The time has come to 
stop relying on expert judgment and subjective interpretations 
of data and to start applying rigorous objective causal 
analysis. I believe that doing so will show that regulation of 
greenhouse gases cannot confidently be expected to produce 
human health benefits. Careful study of real-world causes and 
effects using objective causal analysis of emissions and health 
effects data will provide a much more trustworthy guide to the 
true probable health consequence of policy decisions than 
today's mix of wishful thinking and dramatic claims.
    Thank you for your attention.
    [The prepared statement of Mr. Cox follows:]
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    Mr. Whitfield. Thank you very much.
    And Mr. Sweeney, you are recognized for 5 minutes.

                   STATEMENT OF GERRY SWEENEY

    Mr. Sweeney. Chairman Whitfield, Ranking Member Rush, and 
subcommittee members, thank you for the opportunity to testify 
before you on EPA greenhouse gas regulation. My name is Gerry 
Sweeney. I am president and CEO of Rain CII Carbon.Rain CII 
Carbon is one of the largest producers in the world of a 
product called calcined petroleum coke. We have seven U.S. 
facilities and employ over 250 workers in highly paid 
industrial jobs here in the United States. We also have 
operations in India and in China. The majority of our U.S. 
product is exported.
    Another aspect of Rain CII's business is energy 
cogeneration. It is important to note that cogeneration of 
energy is very important to our competitiveness. It allows us 
to capture byproduct heat and lower our costs, while reducing 
greenhouse gas emissions. Three of our facilities in the U.S. 
have cogeneration plants and our fourth is under construction 
currently.
    Rain CII and the industrial business community are 
concerned about the existing and future regulation that create 
uncertainty and threaten high costs, both of which stymie 
capital investment, job creation, and impair competitiveness of 
existing facilities. To be clear, the business community is not 
against responsible clean air regulation. What regulation we 
put in place must be necessary and not sacrifice industrial 
competitiveness and jobs.
    Specific to greenhouse gas emissions, policies that provide 
incentives such as investment tax credits, grants, or 
accelerated depreciation are more effective and create jobs and 
are a preference to more regulation. It is a concern that our 
facilities would be regulated under the Clean Air Act Tailoring 
Rule for facilities that emit 100,000 tons per year and would 
require a permit under the Prevention of Significant 
Deterioration, or PSD, Preconstruction Permit Program and Title 
V Operating Permit Program. Both are lengthy and costly 
programs. We know this because we are already regulated under 
them.
    Our experience is that regulations, while well-meaning, can 
be conflicting in purpose, reduce competitiveness, and result 
in less-than-optimal environmental benefit. We believe this 
will be the result when EPA promulgates regulation of 
greenhouse gases under the Clean Air Act.
    EPA greenhouse gas regulations will impact the 
manufacturing sector in two ways: one is from higher costs 
placed directly on our operations, and secondly, through higher 
electricity prices that get passed on to us. A loss of jobs 
will result from both burdensome cost and bureaucratic delay.
    For instance, we sit before you today waiting for a 
determination by EPA on the impact of Acid Rain Program, CAIR, 
and the Cross-State Air Pollution Rule on an existing energy 
cogeneration project now under construction and upon which we 
have had discussions with the EPA over the last 5 months. It is 
an example where the rules have become so complicated and the 
programs so overlapping that significant delay is involved in 
attempting to interpret requirements even though EPA has 
competent and well-meaning professionals examining the project. 
The delay exists even though the project is a ``green'' 
cogeneration facility that will result in significant 
reductions in greenhouse gas and criteria pollutants, increase 
jobs, competitiveness, and generate tax revenue for the 
government.
    Delays and regulatory uncertainty cause industry to avoid 
investment and job creation and renders us uncompetitive 
against other countries. Adding a new EPA Clean Air Act 
greenhouse gas regulation will increase costs and cause further 
delays and bureaucracy. Commercial industrial opportunities 
when they arise must be seized or they disappear in favor of 
more nimble competition abroad.
    As for cost competitiveness, an unlevel regulatory playing 
field against U.S.-based manufacturing production will favor 
production from offshore facilities. By example, our facilities 
in India and China are not burdened by greenhouse gas 
regulation. In addition, our Indian facility has benefited from 
emission credits for adding cogeneration to its process. One 
need only contrast that with the methods that are being 
proposed to be used to regulate greenhouse gas under the Clean 
Air Act for our U.S. facilities, which would represent a burden 
and restriction without incentive.
    There is no question that Clean Air Act regulation of 
greenhouse gas emissions will deter production, investment, and 
job creation in the U.S. in favor of other countries.
    I thank you.
    [The prepared statement of Mr. Sweeney follows:]
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    Mr. Whitfield. Thank you, Mr. Sweeney. And I thank all of 
you for your testimony.
    And at this time, I will recognize myself for 5 minutes of 
questions.
    Dr. Cox, I was looking at your biography or background. You 
have multiple degrees from Harvard, Stanford, MIT. Do you have 
one from Duke as well or----
    Mr. Cox. I have not yet had the privilege.
    Mr. Whitfield. OK. But I understand you also have a Ph.D. 
in risk analysis. You are a member of the National Academies 
Board on Mathematical Sciences and Their Applications, and you 
are an honorary full professor of mathematics at the University 
of Colorado at Denver. Is that correct?
    Mr. Cox. Yes, that is correct.
    Mr. Whitfield. Now, in your professional opinion, and you 
have looked at this closely, are there public health risks from 
greenhouse gas emissions?
    Mr. Cox. No, there are not public health risks from 
inhalation of greenhouse gases. To the extent that greenhouse 
gases affect temperature, there may be effects on public 
health. For example, typically, elderly mortality rates 
decrease as temperature warms. Conversely, typically, elderly 
mortality rates increase if temperatures grow cooler.
    So there could be a temperature-related impact on public 
health but not, I think, a toxic impact on public health.
    Mr. Whitfield. And are you aware of any rigorous risk 
assessment performed for health effects from greenhouse gases?
    Mr. Cox. No. I am aware of many computer simulation studies 
but no rigorous causal analyses.
    Mr. Whitfield. Now, EPA and others, whenever they talk 
about this regulation and many others, they emphasize the 
health benefits. And are there any scientifically provable 
health benefits of the greenhouse gas regulations?
    Mr. Cox. To my knowledge, there is no approved human health 
benefit from such regulation.
    Mr. Whitfield. OK. Thank you.
    Now, Mr. Smith, you are president and CEO of CountryMark, 
and to my understanding, that is a small refinery, is that 
correct?
    Mr. Smith. Yes, sir, it is.
    Mr. Whitfield. And you are a cooperative? You are a not-
for-profit company, is that correct?
    Mr. Smith. That is correct.
    Mr. Whitfield. And you basically provide most of your 
product to the farming community, is that correct?
    Mr. Smith. That is correct.
    Mr. Whitfield. Now, it is my understanding that you have 
spent or will spend nearly $100 million over a 10-year period 
to comply with EPA's low sulfur fuel requirements just to stay 
in business and yet these changes have increased greenhouse gas 
emissions. Is that correct and would----
    Mr. Smith. That is correct.
    Mr. Whitfield [continuing]. You elaborate on that? So you 
spent $100 million to comply and you are increasing greenhouse 
gas emissions?
    Mr. Smith. That is correct. And the increase comes from two 
main areas. The first is we used to burn hydrogen in our 
process heaters, which would result in virtually no greenhouse 
gas emissions. We have had to take that hydrogen and use it to 
desulfurize the fuels, which then replaces it with natural gas, 
which increases CO2 emissions. And, in addition to that, there 
is a variety of other process changes that also increase the 
emissions themselves. It is the way you have to desulfurize 
fuel.
    Mr. Whitfield. Right. OK. Thank you.
    And Mr. Shaffer, we have been talking about this Tailoring 
Rule, and EPA admits in the Tailoring Rule that the Agency 
underestimates the full impact the Clean Air Act greenhouse gas 
regulations would have on farmers. Without the Tailoring Rule--
and there are many people who do not believe that it is legal 
because the statute clearly says 250 tons per year instead of 
100,000--but in the absence of the Tailoring Rule, such 
regulations could affect everything--and I want you to tell me 
if this is correct--everything from manure management, to 
space-heating, to operating pumps for drying and curing, and 
more. And it seems to me that these regulations clearly 
penetrate deep into many phases of the farming process. Would 
you agree with that statement?
    Mr. Shaffer. Very much so. They would have a dramatic 
economic burden on the average-sized or small farms too, all-
sized farms.
    Mr. Whitfield. And if this happens, this would be 
unprecedented for the farming and agricultural community, 
wouldn't it?
    Mr. Shaffer. We have never experienced something like this, 
and to be frank, I honestly don't know how we would be able to 
deal with the cost. We are price-takers naturally, not price-
makers.
    Mr. Whitfield. OK.
    Mr. Shaffer. So we would have to try to absorb that and 
there is just no way they could do it. Our analysis team in 
Pennsylvania did a study last year. There was approximately a 
$1.09, I believe it was, profit per hundredweight in the dairy 
industry. This cost would put that in the red just on the cost 
of the permitting requirement.
    Mr. Whitfield. OK. My time has expired.
    At this time, I recognize the gentleman from Illinois, Mr. 
Rush, for 5 minutes for questions.
    Mr. Rush. Thank you, Mr. Chairman. Dean Chameides----
    Mr. Chameides. Yes, sir.
    Mr. Rush [continuing]. Would you care to take a moment--I 
see you have a number of titles. First of all, you got your 
Ph.D., you are the dean of the Nicholas School of Environment, 
and you vice chair the Committee on America's Climate Choices, 
National Research Council, and you are the vice chair of the 
National Academy of Sciences----
    Mr. Chameides. I am a member of the National Academy of 
Sciences.
    Mr. Rush. Member of National Academy of Sciences. What is 
your academic background?
    Mr. Chameides. I got my undergraduate degree from SUNY-
Binghamton and my graduate degrees, both master and Ph.D., at 
Yale University.
    Mr. Rush. Yale. Now, Dr. Cox has basically told me and 
others that as regards to climate change, one, that it is a 
hoax; two, that it has absolutely no effect on public health. 
So he has told me and others who believe as I do that we have 
really come up with answers that don't have explanations, that 
don't explain their conclusions, that don't conclude. Now, I 
want you to just take some time and you have heard his 
testimony. What do you think about his testimony?
    Mr. Chameides. Thank you. Well, I have a couple of 
observations to make. First of all, talking about air quality, 
for example, and its impact on mortality is a difficult thing 
to do in the sense that if you actually want to prove 
positively that something kills somebody, you have got to kill 
them, and that is not what we do. So you are left with a 
variety of different methodologies of trying to establish that 
cause-and-effect relationship. And in fact, as a community, we 
have done that in many, many, many ways in terms of looking at 
clinical damage as well as statistical results.
    I might point out just in terms of air quality, one study 
that I am familiar with, in 1996, we had the Olympics in 
Atlanta. We shut down much of the transportation system. We had 
a major, major improvement in air quality during that period of 
time and we saw a significant decrease in a number of asthma 
visitations to hospitals. That is an indication of a cause-and-
effect relationship. It is not as obvious as actually putting 
someone in a laboratory and giving them air pollution and 
seeing what happens, but it is pretty good.
    With regard to climate change, I could say lots of things, 
but let me just say that I think we can all agree that heat 
waves kill. In 2003, Europe had a record heat wave, and without 
getting into a discussion about the role of global warming in 
causing that heat wave, for about a week or two, temperatures 
were more or less about 10 degrees above normal. Somewhere 
between 20 and 35,000 people died in Europe during that heat 
wave. That is the kind of risks that we face with global 
warming. And I would say it is a pretty substantial public 
health risk.
    Mr. Rush. Dr. Cox also said that changes in climate are 
only based on computer simulations and not real-world events. 
He asserted there is no evidence that air pollution leads to 
adverse health impacts. As a trained atmospheric scientist, how 
do you respond to those of us who are policymakers who say that 
this whole idea of man contributing to climate changes is again 
some kind of hoax that has been perpetrated on the American 
people? Are there any dangers in policymakers telling the 
American people that climate change is a hoax and therefore it 
is not necessary to implement policies to address this issue?
    Mr. Chameides. Well, Congressman, I don't quite know how to 
respond to a statement that climate change is a hoax, because I 
mean it is just simply not true in my experience, certainly not 
in my personal experience.
    There are two aspects to understanding, for example, what 
the health effects of climate change might be. One is to look 
retrospectively and see what are the kinds of changes that we 
might expect to see in climate change and how they affected 
public health in the past. So, for example, we know that if you 
have major floods due to severe storms, you have major health 
effects because you have water quality problems that can lead 
to morbidity and mortality.
    If we now want to predict how that might happen in the 
future, of course, we have to use models because we are talking 
about the future. But we are very certain that these are the 
kinds of things that will happen. We don't know exactly when or 
how much and the specific time but we know they will happen. 
And they will definitely have public health effects because we 
know they have had in the past.If there is a major flood in 
North Carolina due to a hurricane, we know there are going to 
be water quality effects that are going to lead to sickness and 
death in North Carolina.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Whitfield. The gentleman's time has expired. At this 
time I recognize the gentleman from Texas, Mr. Barton, for 5 
minutes of questions.
    Mr. Barton. Thank you, Mr. Chairman.
    Let me start off with a general statement. I was here in 
the Congress on this committee when we passed the Clean Air Act 
amendments in the early 1990s. It was not intended to apply to 
greenhouse gas emissions. CO2 was not listed as one of the 
criteria pollutants, and I don't recollect that there was much 
of a debate about it. There was some debate, but not much of a 
debate.
    So Dr. Weiss is correct in his statement that we did have 
Massachusetts v. EPA, a five-to-four Supreme Court ruling that 
since the Clean Air Act amendments did not specifically state 
that it wasn't a criteria pollutant, maybe it could be. And he 
was also correct in his statement that the Bush administrator 
at the EPA said that based on that Supreme Court ruling that 
the EPA should conduct a study to determine whether it should 
be regulated.
    It gets pretty fuzzy after that because the Obamas came 
into office and they had their mind made up, and in my opinion, 
their endangerment finding was a preconceived conclusion. And I 
say that because we have emails at the time that basically 
state that.
    Having said that, we are now in the position where the 
Obama administration is--because they couldn't do it through a 
legislative act of this committee or the Congress trying to 
implement by the Executive Branch--greenhouse gas regulations 
and you are seeing what I consider to be the absurdity of the 
application.
    When we put into law back in the early '90s some of these 
levels for major source polluters, those were quantities that 
were designed for those specific pollutants. Greenhouse gases 
are ubiquitous. They are everywhere. We create it. I am 
creating it right now. So to try to say that CO2 has to be 
regulated the same as SO2 or NOx is just simply intellectually, 
in my opinion, a nonstarter. But having said that, once you 
start down the path, it can bite you pretty quickly, can get 
expensive pretty quickly.
    Now, the gentleman that is representing the American Farm 
Bureau in his testimony talks about the cost per cow, $182 per 
cow if you have to get a Title V permit for a major point 
source polluter, $91 per beef cow, $22.75 per hog. Farms are 
going to go out of business. They are just not going to do it. 
So I believe that in the next Congress, if not in this 
Congress, we ought to have a real debate on this committee 
about greenhouse gases as applied to the Clean Air Act. I would 
prefer that we explicitly exempt them by statute. That would be 
my preferred solution. But if we don't have the votes to do 
that, we should at least give some guidance in statute to what 
the standard should be based on greenhouse gases.
    Now, I want to go to Dr. Cox. You were very careful in your 
answer to Mr. Whitfield's question. If I understood you 
correctly, you say that for older people an increase in average 
temperature generally is a good thing and a decrease in average 
temperature generally is a bad thing. Is that correct?
    Mr. Cox. Yes, that is correct. The ill healths in winter 
more than offset the summer heat wave effect. Of the two, cold 
weather deaths are by far the more important.
    Mr. Barton. So, on average, these small increases in 
average global temperature, which is called the greenhouse gas 
effect or climate change, from a health standpoint on average 
would be good not bad. Is that not correct?
    Mr. Cox. I believe that is indeed correct, that on average, 
an increase in temperature will reduce elderly mortality rate.
    Mr. Barton. But as the gentleman next to you has pointed 
out, heat waves do kill.
    Mr. Cox. Heat waves do kill. Cold winter days kill more.
    Mr. Barton. So wouldn't we be better off instead of 
spending trillions of dollars to try to regulate CO2 to have a 
specific give every senior citizen an air conditioner for the 
summer, and give them a space heater in the winter. Wouldn't 
that be much more cost-effective?
    Mr. Cox. I believe it could have a significant public 
health impact.
    Mr. Barton. Thank you.
    Mr. Whitfield. The gentleman's time has expired.
    At this time, I recognize the ranking member, gentleman 
from California, Mr. Waxman, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    The Supreme Court is going to make a decision fairly soon 
and they are going to disappoint a lot of people, whatever they 
do. The Supreme Court made a decision in the Massachusetts 
case. And they said EPA must regulate a pollutant that causes 
harm to health and the environment. I believe those are the 
precise words but something along those lines. And the EPA 
administrator under President George W. Bush made that finding. 
Now, members of the committee may not like the Supreme Court 
decision, but it is the law of the land just like the opening 
up to corporations to buy all the elections. That is the law of 
the land; the Supreme Court decided it, five to four.
    Carbon is not a criteria pollutant, but the Clean Air Act 
provides for EPA regulation over a lot of pollutants other than 
criteria pollutants.
    Over the past 9 months, Mr. Rush and I have written, in 
fact, 12 times to Chairman Upton and Whitfield requesting a 
hearing on climate change, and we have focused on major 
developments in climate change science and on events that 
demonstrate the perils of inaction. These repeated requests 
were met with silence.
    Instead of holding hearings on the science and the risk 
posed by climate change, the majority opted to hold one hearing 
after another bashing EPA for every effort it makes to address 
the problem, no matter how reasonable or cost-effective. 
Republicans on the committee and in the whole House actually 
voted to reject the scientific consensus that climate change is 
occurring, caused largely by human activities, poses 
significant risk for public health and welfare.
    Today, we have Dr. Chameides, a prominent climate scientist 
who can discuss the climate findings and recommendations of the 
National Academy of Sciences where he is a member. The National 
Academy is a preeminent scientific institution in our country. 
Do you disagree with that statement, Dr. Cox, the National 
Academy is a preeminent scientific institution in our country?
    Mr. Cox. As a member of the National Academy of 
Engineering, I would very much like to believe that is true.
    Mr. Waxman. OK. Dr. Chameides, we wrote letters about the 
unprecedented heat wave in March and the January temperatures 
across the country that were 5.5 degrees above normal. We also 
asked for a hearing on the recent Intergovernmental Panel on 
Climate Change report that found it is very likely that the 
length, frequency, and intensity of heat waves will increase 
over most land areas because of climate change.
    The IPCC also warned that the frequency of heavy 
precipitation will likely increase even as droughts intensify. 
How do the National Academy of Sciences findings compared to 
those of the IPCC? Should we expect more extreme weather events 
like the ones we experienced this year?
    Mr. Chameides. Yes. I think by way of background, 
Congressman, I think that of the effects of climate change that 
we foresee, changes in extreme weather and weather patterns is 
probably the one that is most immediate and probably on most of 
America's minds. And the data suggest that we are seeing 
changes in weather patterns and increases in extreme weather 
events. Our understanding of how the climate works indicates 
that that is in fact what we would expect. Establishing that 
cause-and-effect relationship is very, very difficult. It is 
almost impossible to attribute a given cause to a given weather 
event.
    Mr. Waxman. The IEA concluded that we have about 5 years to 
shift from traditional fossil fuel investments to clean, low-
carbon energy to avoid a dangerous climate change. They also 
found that delaying action is a false economy. For every dollar 
of investment avoided in the power sector in this decade, over 
$4 will be needed to be spent after 2020 to compensate for the 
increased emissions with more expensive aggressive technologies 
and policies. What does the National Academy conclude about the 
cost of delaying action on climate change? Do they agree----
    Mr. Chameides. We generally concluded that the longer we 
wait, the more expensive it will be to reach a certain goal in 
terms of carbon dioxide concentrations for a variety of 
reasons, including the fact that there are sunk investments, 
that if we make investments in certain kinds of power plants, 
in energy systems today, those investments will be sunk and it 
will be very difficult to back out from them.
    Mr. Waxman. We requested hearings on the impact of global 
warming on crop yields and the threat of the melting 
permafrost. Are there National Academy findings or new research 
on these issues that we should be aware of?
    Mr. Chameides. Certainly, melting permafrost is an issue 
that continues to concern us, and the evidence suggests that 
there is continuing melting of the permafrost. What we are most 
concerned there is the emissions of the methane trapped in that 
permafrost, which could exacerbate the global warming.
    Mr. Waxman. We rarely hear from scientists about the threat 
of climate change and what could be done to address it. If 
members take one point away from this hearing, what should it 
be?
    Mr. Chameides. The point is that with every time a CO2 that 
we emit to the atmosphere, we are increasing the risk that we 
face and future generations face. And a prudent course of 
action, a wise cause of action is to begin to address that 
problem to reduce the risks that we all face.
    Mr. Waxman. What risks?
    Mr. Chameides. The risks of climate change, which is risk 
to public health, risks of severe weather, risks of having 
clean water and adequate water for people. There are risks in 
terms of geopolitical risks in terms of international 
stability. We sometimes think that if something happens 
somewhere overseas, perhaps in Bangladesh, it is not relevant 
to us. I think it is very relevant to us in a global society. 
It injures every part of our society.
    Mr. Whitfield. The gentleman's time has expired.
    Mr. Waxman. Thank you very much.
    Mr. Whitfield. At this time, I would like to recognize Mr. 
Terry for 5 minutes of questions.
    Mr. Terry. Thank you, Mr. Chairman.
    My opening statement I guess would be I think it is hard to 
take anecdotal evidence of weather and translated into, you 
know, a pattern of increased catastrophes.
    In the State of Nebraska, we are in tornado alley and yet 
we had a record number of fewer tornados this year or hardly 
had any. We barely had severe thunderstorms this year. So if 
you are in Nebraska to sit there and say there is an increase 
in tornados, we are not going to buy into that.
    Secondly, yes, we have had a warmer spring than usual, and 
it is interesting. I think we have had a couple of highs that 
broke records on 2 days. And they broke records from the 1890s. 
So was there a manmade-caused heat wave in 1890?So, you know, I 
guess we can classify that kind of data as more of opinion to 
fit in to a philosophy. I am more concerned about getting 
actual facts that we can rely on.
    But even though I represent Omaha, Nebraska, which is more 
cement than dirt, I come from an ag State. So I would like to 
ask--is it Mr. Shaffer? I can't see from the gentleman from 
Virginia makes a better door than a window.
    Thank you, Mr. Griffith.
    But we have lots of row crops. Can you tell me very quickly 
if you are going to have an average farm of 700 to 800 acres 
with the tilling, the planting, and the harvesting in 1 year 
what the potential greenhouse gas emissions would be?
    Mr. Shaffer. Would you repeat that? What the potential----
    Mr. Terry. Take an average farm in Indiana or Nebraska or 
Pennsylvania, I guess. In Nebraska, it is around 700 to 800 
acres. Say you are planting all corn; what is going to be the 
yearly emissions? Is it going to be under or over 100 or 250 
tons per year of greenhouse gas?
    Mr. Shaffer. It is going to be over.
    Mr. Terry. OK. And that would trigger PSD or Title V?
    Mr. Shaffer. Permitting, operating, and if it is over the 
250 they are talking about would trigger construction permits, 
and that becomes critical at a time when we are urging young 
people to enter into farming and coming back on the farm. So 
when you have a father that wants to allow for a son or 
daughter to enter the operation, most of the time, you have----
    Mr. Terry. I am going to interrupt there because I need to 
get to the next part which is ranching.
    Mr. Shaffer. OK.
    Mr. Terry. Let's just say cattle or in Nebraska we have 
some dairy and lots of hog operations. You went through in your 
testimony how specifically the cost per cow, the cost per pig. 
In your calculations, did you calculate the methane at 25 
times, 26 times, or 72 times? Because all three of them have 
been thrown out in discussion of equating it to greenhouse gas. 
Or was it a one-to-one?
    Mr. Shaffer. It was four times the cow equivalent, for 
instance, on dairy.
    Mr. Terry. OK.
    Mr. Shaffer. That brings you up to the tons of pollutants 
that would be considered.
    Mr. Terry. And in Nebraska, most of our feed lots have 
significantly more than 25; they will have hundreds. What can 
you do to construct, to eliminate, or get the tons below 250 
tons per year in a feed lot?
    Mr. Shaffer. The only thing you can do is reduce the number 
of animals.
    Mr. Terry. What is going to be the impact on food prices 
and farming operations if you have to just take a number of 
feeder cows down to less than, let's say, 10 or 15 cows?
    Mr. Shaffer. The result is the American consumer is going 
to be living off imported food.
    Mr. Terry. Thank you very much. I have more but I will 
wait.
    Mr. Whitfield. Thank you very much.
    At this time, the chair recognizes the gentleman from 
Texas, Mr. Green, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    Before my colleague from Nebraska leaves, I noticed 
yesterday it was actually about 7 degrees hotter in Omaha, 
Nebraska, than it was in Houston, Texas, which is amazing. But 
I was a business major with the law school so we don't deal in 
absolutes. But I also understand that we have an issue that our 
experts and our scientists say we need to deal with, and I 
think our issue ought to be how can Congress do it?
    I know last Congress we passed a cap-and-trade bill that 
couldn't get hardly a majority vote from the Senate, so that is 
not the solution. But we need to look for solutions at how we 
can deal with carbon release over a period of years. And 
hopefully, we will get to that point.
    Mr. Chameides, you served as vice chair of the National 
Research Council panel that produced the America's Climate 
Choices, the report requested by Congress to investigate how 
the United States should respond to the challenge of climate 
change. Your report examined the causes and consequences of 
climate change and made recommendations on how to address that. 
And I would always say that we should be working on the 
solutions like I said earlier, and I think Congress should be 
the lead on developing our policy instead of the EPA.
    Can you explain what role the National Research Council 
recommended for Congress in addressing climate change?
    Mr. Chameides. Certainly, Congressman.
    In looking at the issues with regard to limiting emissions, 
it was our judgment that probably, something that had a market-
based approach would probably be most effective, most efficient 
economically. However, if a market-based approach was not in 
the offing, we felt that there are other mechanisms that would 
make sense, including perhaps using the Clean Air Act to begin 
to limit emissions. We also saw a significant role for Congress 
in trying to organize adaptation processes.
    I might point out that in thinking about responding to 
climate change, we are talking about a process that is going to 
probably take us many, many decades. And we are thinking about 
the first baby steps that we take, and I think that Congress 
can play a significant role. And our committee felt that 
Congress could play a role, specifically, in trying to figure 
out how to level the playing field in the marketplace so that 
the true impacts of carbon emissions would be reflected in its 
price.
    Mr. Green. OK. I know that for a successful policy we need 
to develop, we have to promote economic growth. And again, we 
are in a political system here, so it has to be something we 
have a lot of buy-in from, not only from rural areas, but urban 
areas and Republicans, Democrats, and everyone. But some people 
say that any policy change to address climate change is only 
going to do harm in our economy. Can you respond to that? Your 
report looked at these issues and global competitiveness.
    Mr. Chameides. Sir, I can address it to some extent. I am 
not an economist so I need to be careful. We felt, and I think 
a lot of economists feel, that there are great opportunities 
for American competitiveness in the green technology area, that 
these in fact will be the technologies of the 21st century, and 
that in developing a significant Federal policy around climate 
we could also, at the same time, increase our competitiveness 
on those technologies for example.
    Mr. Green. Well, and I share the concern, for example, from 
the Pennsylvania Farm Bureau that if the United States makes 
these decisions and price our production capability, whether it 
is refineries in my that area or chemical plants or ag 
products, all we do is transfer that to other countries to 
provide that. And that is my concern that we can do some things 
with the political will be have now maybe, but if we are really 
going to solve this problem, we have to have international buy-
in, particularly from the emerging countries like China and 
India, who actually have economic growth that is more important 
than air quality issues. But we also don't want to transfer all 
our capability for production, again, whether it is ag or 
whether it is manufacturing to those countries because, you 
know, then we won't have the economics.
    But I also know in your statement you said that it is 
possibly by the turn of the century, Texas could be looking at 
120 days a year of temperature exceeding 100 degrees. We made a 
pretty good down payment on it last year, and it is almost like 
we are paranoid now because we go a week or 10 days without 
rain we start worrying about whether we are going to have 
another drought like we did last year. So although, in all 
honesty, we have had floods in North Carolina throughout 
recorded history; we have had droughts throughout history in 
Texas. But I think Congress ought to do some things to get us 
on that road. And I think that is where we ought to go from 
this hearing.
    And thank you, Mr. Chairman.
    Mr. Whitfield. Thank you. At this time, the chair 
recognizes the gentleman from West Virginia, Mr. McKinley, for 
5 minutes of questions.
    Mr. McKinley. Thank you, Mr. Chairman.
    I guess let me get you, Mr. Weiss, out of the way first. 
Your comments earlier were disturbing when you say there is no 
war on coal. You know better than that. You know, when the 
President comes out and says, I am going to bankrupt any new 
coal-fired powerhouse, when Steven Chu says that coal is his 
worst nightmare, when the Vice President says that they are not 
going to support clean coal technology, there will not be clean 
coal, when the President slashes the funding for National 
Energy Technology Lab for its work in clean coal technology by 
41 percent, I am astounded that you can sit there and say there 
is no war on coal. When I have a list of 20-some companies, 20-
some powerhouses in just my immediate area that have been shut 
down because of this war on coal, when the thousands of people 
that have lost their jobs at work there know full well that it 
is because of EPA's aggressiveness, I am astounded.
    People in Miami Fort, Beckford, Pickaway, Bay Shore, 
Lakeshore, Avon Lake, Ashtabula, East Lake, Niles, Conesville, 
Muskingum River, Armstrong, New Castle, Shawsville, Titus, 
Portland, El Remora, Albright, Hammer, Reidsville, Willow 
Island, Kanawha, Phillips Ford. I would just suggest, Mr. 
Weiss, you go to those neighborhoods and you tell them this is 
not a war on coal when they are sitting at home without a job.
    Mr. Cox, if I could go to you a little bit on the thing.
    Mr. Cox. Please.
    Mr. McKinley. Your comments have been interesting about 
health, air quality. I am just curious, given that the World 
Health Organization's own statistics have indicated that indoor 
air quality is twice as hazardous, twice the people have died--
actually, excuse me, let me correct that. Twice the number of 
people have died due to indoor air quality than outdoor air 
quality. Are you aware of that?
    Mr. Cox. I don't think that I was, no.
    Mr. McKinley. I am sorry?
    Mr. Cox. No.
    Mr. McKinley. OK. Also, that the EPA came out in their own 
Web site saying that indoor air quality is 96 times worse than 
outdoor air quality. I am trying to understand as an engineer--
someone needs to teach me--then, why are we so focused on 
shutting down our plants and our facilities and putting people 
out of work when the real threat to our health and safety is on 
the indoor air quality?
    Mr. Cox. Yes, I think that there is a natural human 
tendency, as Dr. Chameides illustrated with the Atlanta 
example, to say, well, sometimes things go up, sometimes they 
go down. If only we could control the decrease in mortalities, 
it would be great for constituency; it would be great for 
public health. And what they forget is to look quantitatively 
at questions like, was there a reduction in mortality rate in 
Atlanta, for example, that was any greater from the reductions 
elsewhere that wouldn't have occurred anyway?
    The comparison between indoor and outdoor air pollution is 
similarly a matter of numbers, not a matter of direction or of 
hope. So when I referred to wishful thinking and bad statistics 
as the basis for conclusions such as the false conclusion I 
have drawn from the Atlanta study, the conclusion that the 
Health Effects Institute has recently rejected, and for 
example, I think that a lot of this turns on our intuitive 
feeling that qualitative direction matters and are forgetting 
to look at the numbers and quantities.
    Mr. McKinley. If I could, Dr. Cox, do you think we should 
be spending more time perhaps looking at our indoor air 
quality? Because I am hearing a lot of testimony here over the 
last 18 months about all these premature deaths and the like 
caused by outdoor and these greenhouse gas emissions, but yet 
if the indoor air quality is 96 times worse, how do we 
differentiate that a person got an asthma attack because of 
greenhouse gas emissions as compared to their indoor 
situation----
    Mr. Cox. Yes.
    Mr. McKinley [continuing]. Whether someone in their house 
was smoking a cigarette? How do you differentiate that?
    Mr. Cox. That is an excellent question. For the purposes of 
our tight time constraint here, let me just say that there are 
excellent and readily available quantitative methods for causal 
analysis that allow one to compare indoor and outdoor pollution 
effects, for example. It is not true that this is a very 
difficult matter and causation is ambiguous. All we need to do 
is to look at the issues that you are raising or the issues 
that Dr. Chameides raised using readily available quantitative 
methods. These methods are documented in my written testimony.
    Mr. McKinley. Thank you. I yield back my time.
    Mr. Whitfield. Thank you, Mr. McKinley.
    At this time, the chair recognizes the gentleman from 
Virginia, Mr. Griffith, for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman.
    Let me make it clear that indoor air is not just somebody 
smoking cigarette because everybody wants to vilify cigarettes, 
but oftentimes the problems from indoor air come from cats, 
dogs, human existence, dust, and trapped pollens, tree pollens, 
et cetera. And that is one of the things that we have to deal 
with and why, sometimes, it is better to open your windows up 
and let a little fresh air in. And so I do appreciate my 
colleague from West Virginia pointing out both the war on coal 
and indoor air, but I don't want folks out there who might be 
watching this on C-SPAN to think it is only the cigarette smoke 
that is causing the problem. It is things that every household 
has, depending on the individual and their particular makeup 
that maybe influenced or affected by that.
    That being said, I have to also associate myself with the 
comments of Mr. Green. I think that one of the problems that we 
have, Dr. Chameides, is--and I apologize if I have 
mispronounced that, I am trying to get it right. Thank you.
    One of the problems that I have is, is that if we take 
fixes to global warming that are extremely expensive and chase 
our industries out of this country--they are going to places 
like Bangladesh, China, India where they are not paying 
attention. And you would have to agree with me that we don't 
breathe air that is only circulating around the United States 
of America. We breathe air particularly in the Northern 
Hemisphere but throughout that comes from places in the globe. 
And so without international cooperation where they are doing 
the same kinds of things that we are doing, the problems that 
you see are going to continue to expand no matter what we do, 
is that not true?
    Mr. Chameides. Congressman Griffith----
    Mr. Griffith. Yes.
    Mr. Chameides. Yes, Griffith, right? I got you right.
    Mr. Griffith. You got me right.
    Mr. Chameides. OK. Thank you. You got my name wrong, I got 
yours.
    Clearly, this is an international problem. And if the 
United States acts alone, it will be futile. We must get the 
world to act in unison. Traditionally, I think of America as 
being a world leader and I think we need to do leadership. I 
think there are certain things that we can do within our 
borders. There are certain that we can do to protect our 
economy at the borders in terms of have goods flow inside and 
outside our borders to and from foreign countries. But 
ultimately, we need to lead the world----
    Mr. Griffith. OK.
    Mr. Chameides [continuing]. In terms of this global 
problem.
    Mr. Griffith. But if we put such huge pressures on American 
industries that they take their jobs to these other parts of 
the world, wouldn't you agree with me that intuitively, we are 
actually making the problem worse and that what we ought to be 
looking for are the low-cost fixes and not the high-cost fixes, 
and that the EPA is looking at all kinds of fixes, but 
tremendous numbers of their fixes, the regulations they have 
come out with in the last few years have been very costly, and 
that if we continue down this path with these costly 
regulations, we are going to kill American jobs to no gain? We 
may have the right to put on the mantle of some form of moral 
leadership but we will have lost jobs. Would you not agree with 
that?
    Mr. Chameides. Well, I am not in the position to----
    Mr. Griffith. I hate to do yes or no to you.
    Mr. Chameides. That is fine. But I am not----
    Mr. Griffith. I don't have time--
    Mr. Chameides. I will say a really quick yes or no. I am 
not in a position to talk to you about the cost of these 
regulations. I suspect that there are things that we can do to 
begin to get us down the road towards lowering our greenhouse 
gas emissions and prove ourselves competitively in the global 
market.
    Mr. Griffith. When you indicated----
    Mr. Chameides. Those are the things that we should be 
looking at.
    Mr. Griffith. You indicated in one of your articles 
somewhere that if we had a meatless day, we could actually help 
climate----
    Mr. Chameides. Yes.
    Mr. Griffith [continuing]. Control because we wouldn't have 
as many cows and all the production cost.
    Mr. Chameides. Yes.
    Mr. Griffith. Dr. Cox, in regard to the expense in global 
warming, when I asked Lisa Jackson last year about their 
determination that global warming was harmful, I asked her if 
they studied what happens when people who are poor cannot 
afford to heat their homes properly and doesn't that have a 
health cost? She indicated there were programs for that. My 
people in my district tell me otherwise, that the programs run 
out of money long before winter ends. Would you agree that 
people who are living in areas where it does get cold and who 
do not have adequate heat are more likely to be negatively 
impacted in their health than the temperature warming?
    Mr. Cox. Yes, I would.
    Mr. Griffith. And would you also agree with me that when 
the President said, ``because I am capping greenhouse gases, 
coal power plants, you know, natural gas, you name it, whatever 
the plants were, whatever the industry was, they would have to 
retrofit their operations. That will cost money. They''--
talking about the power plants--``will pass that money on to 
consumers if that is far higher.`` That cost is going to be a 
far bigger burden on the working poor, the elderly, and just 
the poor generally, the unemployed, that it is going to be a 
higher cost on them. And they are more likely to be unable to 
afford to heat their homes in the winter time and thus have 
higher health impacts?
    Mr. Cox. That seems very plausible to me, yes.
    Mr. Griffith. Thank you, gentlemen. I appreciate it and I 
yield back my 4 seconds.
    Mr. Whitfield. Thank you, Mr. Griffith.
    At this time I recognize the gentleman from Kansas, Mr. 
Pompeo, for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman.
    I want to direct my questions to Mr. Shaffer here to start 
with. First of all, I have to say it is interesting to me as a 
regulatory matter that we have got this thing, this CO2, these 
greenhouse gases that aren't mentioned in the Clean Air Act. 
And then when it gets bootstrapped into this to begin to 
regulate it, they find that the capacity to regulate under the 
existing statute is insanity on its face, and thus they create 
the Tailoring Rule to dig themselves out of the hole that they 
created for themselves, how, when they first tried to regulate 
greenhouse gas under statute head, they had no objective to do 
that.
    We heard Mr. Barton talk about the fact that he was here. I 
was not. But I have read the statute. It is pretty clear to me 
that there was no one here thinking or contemplating whether 
this was the appropriate tool to regulate these very greenhouse 
gases.
    Mr. Shaffer, EPA's estimate says that 37,350 or so farm 
generators would be regulated if they got rid of the Tailoring 
Rule, if the Tailoring Rule was kicked out. Tell me what that 
would mean. The day the court kicks the Tailoring Rule out, 
tell me what these farmers, these 37,350 generating facilities 
would be subject to, and what their economic response would be.
    Mr. Shaffer. Well, at that point, we are looking about 
permitting costs nationwide, about $860-some million, and you 
know, the way it is set up, the cost of the permit is based on 
animal numbers up to a maximum permit cost of $180,000-some is 
the maximum it can be. So if you look at small farms in 
Pennsylvania, the cost per cow is about $180. If you look at 
some large dairy farms in California where 40,000 head might be 
on a farm, there the cost per cow comes down because you have 
triggered the maximum, the cap. So now you have created an 
unfair competition even within our own country between farmers 
in one area and another depending on the size.
    So they just cannot afford to come up with the permitting. 
And then it is not only the cost of the permit, we have to 
maintain it and you have to wait for somebody to give you 
permission to operate, you have to wait for somebody to give 
you permission to construct things, so----
    Mr. Pompeo. How many years do you think it would take 
before EPA could get all these permits granted withoutcoming 
back to us and asking for a whole lot more bureaucrats to sit 
in that big old building across the street?
    Mr. Shaffer. The worst part is the permit is only good for 
5 years so you have to start the whole process over again in 5 
years. Every 5 years you have to go through this process. I 
can't see how they will ever get through it and do it. And the 
sad part of it is there is no environmental benefit to getting 
the permit. That is the really sad part of it.
    Mr. Pompeo. Mr. MacKie, tell me what you think. The 
Tailoring Rule goes away; tell me how many bakers go away.
    Mr. MacKie. Well, I think there was some comment earlier 
about being able to offshore, and in the baking industry with a 
4-day shelf life, that really is not an option, not that our 
folks would take it if they could. But, you know, you are 
looking at about a $500,000-per-bakery-line investment to go to 
the new Tailoring Rule threshold. That is $2.19 per loaf of 
bread. That is an awful lot of loaves of bread that you have to 
sell to break even. So the hole gets deeper for the industry. 
So the cost is a significant issue on top of what is already in 
place through the original Clean Air Act amendments.
    Mr. Pompeo. Great. Thank you. With that, Mr. Chairman, I 
yield back.
    Mr. Whitfield. Thank you.
    At this time I recognize the gentleman from Oregon, Mr. 
Walden, for 5 minutes.
    Mr. Walden. Right. I thank you and I appreciate the 
testimony by all the panelists. I served for 2 years on the 
Select Committee on Global Climate Change that Mr. Markey 
chaired and learned a lot along that period of time.
    Mr. Shaffer, I want to go back to you. My dear friend and 
colleague from Nebraska was asking about the effect on farmers. 
And I want to follow up because I represent a district that is 
70,000 square miles of eastern Oregon, larger than any State 
this side of the Mississippi, very, very agrarian, lots of 
small farmers.
    And as I listen to Mr. Terry's very good questions and your 
answers, it strikes me what we are going to have here is a 
government-forced consolidation of small farmers into bigger 
farmers. Am I hearing that right?
    Mr. Shaffer. I believe that will put a tremendous amount of 
pressure on the smaller operations. As I said before----
    Mr. Walden. Yes.
    Mr. Shaffer [continuing]. The price per cow when it is 
based on animal numbers and stuff, that only the larger farmers 
would be in a better position to handle this kind of 
regulation, definitely, more than the smaller numbers. Once 
that cap is met, then the price per animal comes down.
    Mr. Walden. And I guess that is the trouble. I was a small 
business owner with my wife for 22 years. I grew up on a cherry 
orchard, and I am telling you, as I get around my part of 
Oregon at least, we care a lot about the environment. We want 
to do the right thing, but we also need an economy that works. 
I was looking at the new unemployment numbers in my district 
and they are 11, 10, 12, 13, I mean, and I meet with these 
wheat growers, and cattlemen, and cattlewomen, and others and 
they are struggling just now to comply with all the rules or 
regulations of Federal Government.
    Now, some of my dear friends on the other side of the 
aisle, I have heard them proclaim that the new regulations 
being proposed by EPA are actually an economic growth model for 
the country, that this will create jobs. And having been a 
small business owner, I am trying to figure out how that works. 
You got to pay somebody to process the permit and do all that 
but that never seemed to me to be a very good way to create 
economy.
    What are these permit cost going to be, do you think?
    Mr. Shaffer. The permit cost would have a devastating 
effect on the economic----
    Mr. Walden. Yes.
    Mr. Shaffer [continuing]. Viability of these small farms. 
And what a lot of people don't realize too, just by nature, 
farmers invest back into their local communities.
    Mr. Walden. Right.
    Mr. Shaffer. That is where most of their money is spent. 
And so the rippling effect you would have with feed dealers and 
with machinery dealers, things like that, it would just ripple 
down and have a great effect on the economy.
    Mr. Walden. And don't you just eventually end up into just 
big, giant multinational farms, in effect, to be able to comply 
with all this? I mean, I don't know how an individual cattle 
rancher is going to handle all this. And this isn't the only 
thing they are being asked to deal with, by the way. It just is 
phenomenal to me the kinds of cost and permits.
    I was meeting with a farm co-op manager who is building a 
new building, and he was telling me, my hometown, little town 
of 6,800 people, and Pat was telling me, he said, you know, I 
am doing my own stormwater runoff as part of this building. I 
am going to contain it right here, manage it right here. And 
the city is really upset about that because if they could get 
him into the city sewer system, they could get a $30,000 permit 
fee. And they are just not happy that he has figured out a way 
to do this within the code on his own property. I mean that is 
what he was telling me. And he has detailed one thing after 
another with these government permits and fees, and on a $3 
million building, he has got a $150,000 right upfront just in 
permit fees.
    I mean I don't think some of these people understand what 
is happening out there on ground, why this economy is so 
stalled, why small employers are going I don't know that I want 
to grow my business or could afford to, and what is the next 
set of rules and regulations coming down, whether it is to, you 
know, sort of take over healthcare and what that may portend in 
terms of requirements?
    Mr. Sweeney, I want to go to you because I understand you 
do agriculture and do farm and overseas as well, right?
    Mr. Sweeney. Not agriculture, sir. We are industrial. We 
are a manufacturer of carbon.
    Mr. Walden. I am sorry. That is right because it is Mr. 
Shaffer, not Mr. Sweeney. Let me ask you this in terms of the 
manufacturing. When you compete internationally, do you go up 
against companies that operate in countries that don't have 
these kinds of proposed requirements?
    Mr. Sweeney. While we have the overwhelming majority of the 
2.4 million tons of capacity that we have, seven plants are 
here. We have one in India and one in China. So we actually 
look at those economics internally in the company and the 
difference in regulations as far as----
    Mr. Walden. And what is the difference?
    Mr. Sweeney. It is a phenomenal difference.
    Mr. Walden. Which way?
    Mr. Sweeney. That----
    Mr. Walden. A lot easier in China and India?
    Mr. Sweeney. Yes, yes. I will be careful in the way of 
saying easier in the sense. There is certainly less regulation. 
There is much more permitting but my experience has been that 
the cost of that permitting and overall the limitations that it 
puts on the business as far as additional cost earned on the 
business is much less in those countries.
    Mr. Walden. OK.
    Mr. Sweeney. It may be the same bureaucracy in the 
permitting process.
    Mr. Walden. Yes. And I am not saying we should go emulate 
India and China in their environmental policy at all. But 
somewhere in here we are competing internationally and have to 
be cognizant.
    I am sorry. I have overrun my time, Mr. Chairman. Thank you 
for your----
    Mr. Whitfield. Thank you, Mr. Walden.
    At this time, I recognize the gentleman from Texas, Mr. 
Olson. Well, wait a minute, Mr. Sarbanes. I recognize the 
gentleman from Maryland, Mr. Sarbanes, for 5 minutes.
    Mr. Sarbanes. I appreciate it, Mr. Chairman. I am a little 
winded. I have been running from my office. That is what you do 
in this business.
    Anyway, I wanted to ask you, Dr. Chameides. You spoke to 
two responses to climate change. One is mitigation, one is 
adaptation, and both have to be undertaken, obviously, if we 
are going to make progress on this problem. I am concerned 
about the potential for the Federal Government's role in the 
adaptation side of things to diminish. And of course, I applaud 
the EPA's efforts to tackle this issue. But, as you can see, 
there is a fair amount of resistance to it from some quarters 
here in Congress.
    The reason I am particularly interested in the adaptation 
side of this is Maryland, where I hail from, has worked very, 
very hard over the last few years to really explore all 
dimensions of how you respond to adaptation, to climate change, 
and has really taken a lead in that regard. It stands to reason 
when you look at Maryland's geography. We have the Chesapeake 
Bay. We have a huge coastline. I mean this is the largest 
estuary body in the United States.
    So we have this extensive shoreline and we have already had 
instances where there has been significant erosion. Some of the 
statistics are that in the last 100 years, Maryland has 
experienced a 1-foot-in-sea-level rise, which has led to the 
loss of 13 islands in the Chesapeake Bay. And the models that 
you mentioned earlier suggest that an additional 2-to-3-foot 
sea level rise could submerge thousands of acres of tidal 
wetlands, low lying lands, even Smith Island, which is a 
treasure of ours in the Chesapeake Bay.
    And so there is obviously huge potential impact here. So 
what I would like you to address just in the 2-1/2 minutes or 
so that are left is, what are the consequences if the Federal 
Government doesn't step up and really engage in meaningful 
adaptation planning and do that in concert with the States?
    Mr. Chameides. Thank you. It is an excellent question.
    So first of all, with regard to adaptation, let's 
understand that climate change is already happening, and the 
full impacts of the CO2 that we emit into the atmosphere today 
won't manifest themselves fully for another 20 or 30 years. So 
we have to begin thinking about adaptation regardless of what 
we do about what we call mitigation, so it is really, really 
important. And I think that there is a huge role in adaptation 
for local governments, for State governments, for 
municipalities because ultimately, that is where the rubber 
hits the road.
    The role for the Federal Government I think which will be 
very, very key is in coordination, information sharing, 
empowering communities to figure out what needs to happen. 
Sometimes, when we think about working on adaptation, it is 
like when you are going to take a pot of money and a group of 
people, and they are simply going to work on adapting to 
climate. I don't think that is the right way to go about it. I 
think we need to understand that as we make plans on 
infrastructure or anything in this country over the next 30 or 
40 years, a part of that plan needs to take into account 
climate change. It needs to be an integral part of our thinking 
about how we are going to build our future and our 
infrastructure, and I think that is the real key part.
    Mr. Sarbanes. It is analogous I guess to when you are 
building new structures on the West Coast and you have to 
anticipate potential for earthquakes.
    Mr. Chameides. Sure, it----
    Mr. Sarbanes. You start building into your codes and all 
the rest of it what it would take to withstand that, so you are 
saying adaptation ought to be looking ahead, using the models 
figuring out what the most likely scenarios are in terms of 
effects of climate change and then trying to anticipate it.
    Mr. Chameides. Building and resilience. I would use the 
analogy of building a home worrying about fire. I mean 
obviously, the plans around fire, the adaptations to fire 
include the building codes and include the sprinklers; it 
includes an emergency exit, you know, a situation ultimately 
perhaps even moving your home. I mean there is a wide variety 
of things that need to be integrated into how we think about 
the future and how we build our country in the future.
    Mr. Sarbanes. Thanks very much. I yield back.
    Mr. Whitfield. At this time, the chair recognizes the 
gentleman from Texas, Mr. Olson, for 5 minutes.
    Mr. Olson. I thank the chair. And good morning and welcome 
to the witnesses. Thank you for your time and your expertise, 
greatly appreciate it. And as you all can expect I am a Texan, 
a proud Texan from Houston, Texas, the energy capital of the 
world.
    And frankly, some folks back home don't understand how EPA 
can push such an anti-fossil fuel, anti-job, American job 
agenda. You know, using the greenhouse gas endangerment 
findings, Tailoring Rules, and other greenhouse gas rules under 
the Clean Air Act, which was never intended. Congress never 
intended the Clean Air Act to be used to regulate greenhouse 
gases. But EPA is using this authority based upon a Supreme 
Court decision that never said EPA could regulate greenhouse 
gases. They had to regulate greenhouse gases. The people back 
home wonder why the EPA is not required to do a thorough cost-
benefit analysis of increased regulation taking into account 
economics, economic impacts, jobs, weigh it against the health 
benefits. And CSAPR, the Cross-State Air Pollution Rule, is the 
best example of what my people back home are feeling.
    EPA included Texas in the proposed rule 6 months before it 
was supposed to be implemented. It is normally at least a year 
and a half before a State is included in that thing so they 
have time to prepare for it and make some of their comments. 
But we got 6 months. So almost immediately that same week the 
largest producer of coal-powered electricity in Texas, 
Luminant, said they would shut down two power plants, shut them 
down, 400 American jobs going away.
    Texas is the fastest-growing State in the country and we 
picked up four new congressional districts. And we have got 
very little excess power. In fact, our ERCOT, the power 
regulator, said we need to have four to five more power plants 
built before the next 2 to 3 years to sustain electrical 
viability with the growing population.
    And Dr. Chameides--I hope I pronounced that correctly--
said, ``heat waves kill.'' And if Texas has another heat wave 
like we did last year like my colleague, Congressman Green, 
mentioned, you know, over 120 days of 100-degree weather, I 
mean, if we shut down power plants like the CSAPR rule would 
have done, you know, people will die. Elderly people, young 
people will die unnecessarily.
    And so I have introduced a simple bill that requires EPA to 
include economic impacts like job losses, job creation, power-
generating capacity in any new greenhouse gas proposal 
regulation. And I ask all of you--I know you haven't seen this 
bill so it is a surprise to you. But do you agree with the 
folks I work for that having EPA do some sort of economic 
analysis when they propose these regulations is common sense? 
Do you support something like that?
    And I will start out with you at the end there, Mr. MacKie.
    Mr. MacKie. Thank you, Congressman. I think it should be 
just a natural order of doing business on any major regulation 
that there be cost-benefit analysis and there are tools in 
place. It is another excellent tool where the disproportion 
impact on--in my case--smaller bakers would be very helpful.
    Mr. Olson. Mr. Shaffer?
    Mr. Shaffer. I really think that it is vital to do that 
before promulgating any regulation. To have all the facts only 
makes sense before the discussion moves forward.
    Mr. Olson. Common sense, yes, sir. And Mr. Smith?
    Mr. Smith. Yes, sir. I would think that would be highly 
appropriate.
    Mr. Olson. Mr. Weiss?
    Mr. Weiss. The best available control technology Standards 
for the new power plant rules and for permits already includes 
a consideration of economic cost and in fact the back standard 
for getting permits is basically energy efficiency, which will 
save companies money as they use less energy.
    Mr. Olson. OK. Dr. Chameides?
    Mr. Chameides. I don't have a comment.
    Mr. Olson. OK. Thank you, sir. Dr. Cox?
    Mr. Cox. Yes. I agree that sound risk cost-benefit analysis 
can improve public decision-making.
    Mr. Olson. Thank you, sir. Mr. Sweeney?
    Mr. Sweeney. I would agree, sir. In any business it is 
required at the boardroom table as well as any management 
discussion. I think it is absolutely commensurate.
    Mr. Olson. Thank you. I got a little bit of time here. I 
want to talk to Mr. MacKie down there at the end. I mean 
talking with my colleague Joe Barton mentioned some of the 
crazy things that are happening in the agriculture industry 
with these greenhouse gas regulations. I want to talk simply 
about some of the things that happen to bakers' business.
    You testified that EPA and State agencies have forced 
bakeries to consider emissions-control equipment to regulate 
emissions from natural ethanol emissions from yeast and that 
the cost of the equivalent may be up to $80,000 per ton. Can 
you elaborate on that, please?
    Mr. MacKie. That includes just in one facility in 1 year 
what the cost would be and just to try to capture. And the 
issue was that it may not even be technically feasible. Again, 
there is no central location like the stack out of the bakery 
oven where you can grab what you have to do with ethanol. To 
try to capture the ambient yeast emission of CO2 is technically 
very, very challenging, and so the environmental controls that 
have to be put in place are going to be enormously expensive. 
Again, because you can't go to a single source to capture it, 
you have got to capture along the entire production line where 
the dough is rising.
    Mr. Olson. I am out of my time. Sounds like you would be 
losing some jobs, some layoffs necessary.
    Mr. Whitfield. Thank you very much, Mr. Olson. And I want 
to thank all of you, members of the panel. We genuinely 
appreciate your being here and giving us your views and advice 
and answering our questions. And with that, I will dismiss the 
first panel and we will call up the second panel.
    Mr. MacKie. Thank you.
    Mr. Whitfield. Thank you again.
    On the second panel, we have the Hon. David Wright, who is 
commissioner and vice chairman of the Public Service Commission 
of South Carolina, who is actually testifying on behalf of the 
National Association of Regulatory Utility Commissioners. We 
have Mr. David Doniger, who is the policy director for Climate 
and Clean Air Program at the Natural Resources Defense Council. 
We have Mr. Steven Winberg, who is vice president of Research 
and Development, CONSOL Energy. And we have Ms. Barbara Walz, 
who is senior vice president for External Relations and 
Environmental for Tri-State Generation and Transmission 
Association.
    So welcome, all of you. We appreciate your patience this 
morning as we worked through the first panel. And I am going to 
call on each one of you. We will recognize each one of you for 
a period of 5 minutes to make an opening statement.
    And at this time, Mr. Wright, we will begin with you. As I 
said, you are commissioner of Public Service Commission of 
South Carolina, vice chairman, and testifying on behalf of the 
National Association of Regulatory Utility Commissioners. So 
you are recognized for 5 minutes.

  STATEMENTS OF DAVID A. WRIGHT, COMMISSIONER, VICE CHAIRMAN, 
  SOUTH CAROLINA PUBLIC SERVICE COMMISSION, ON BEHALF OF THE 
NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS; DAVID 
 D. DONIGER, POLICY DIRECTOR AND SENIOR ATTORNEY, CLIMATE AND 
CLEAN AIR PROGRAM, NATURAL RESOURCES DEFENSE COUNCIL; STEVEN E. 
   WINBERG, VICE PRESIDENT, RESEARCH AND DEVELOPMENT, CONSOL 
   ENERGY, INC.; AND BARBARA WALZ, SENIOR VICE PRESIDENT FOR 
EXTERNAL RELATIONS AND ENVIRONMENTAL, TRI-STATE GENERATION AND 
                 TRANSMISSION ASSOCIATION, INC.

                  STATEMENT OF DAVID A. WRIGHT

    Mr. Wright. Thank you.
    Good morning, Chairman Whitfield and Ranking Member Rush 
and members of the subcommittee. My name is David Wright. I am 
president of the National Association of Regulatory Utility 
Commissioners and I am vice chair of the South Carolina Public 
Service Commission.
    NARUC understands the significant impact that EPA's 
proposed standards of performance for greenhouse gas emissions 
will have on the power sector and their consumers. Although we 
have not taken a position either in support of or opposition to 
the suite of EPA rulemakings, we believe the rules must 
recognize the need for flexibility and compliance requirements, 
encourage coordination among generation plants, and provide 
continued dialogue between Federal and State regulators.
    The EPA greenhouse gas proposal raises concerns regarding 
resource diversity, consumer costs, and the uncertainty for 
existing resources. On resource diversity, NARUC has encouraged 
EPA to recognize the needs of States and regions to deploy 
diverse resources based on their own characteristics. While EPA 
says it does not preclude new coal-fired capacity, its emission 
standards are based on natural gas combined cycle plants rather 
than maintaining a separate standard for coal units.
    NARUC members are concerned that this will result in an 
overreliance on natural gas. We are fuel neutral but we know 
how important resource diversity is to the power sector. Yes, 
thankfully, the current price of gas is low, but no one can 
predict the future, especially when that future is reliant on a 
historically volatile commodity. A few years ago if you 
remember, natural gas prices exceeded $14 per MMBTUs. Just 
recently, prices sunk to around $2.
    Now, speaking for myself, David Wright, I am very concerned 
about the impact the whole suite of EPA regulations proposed, 
adopted, and under consideration will likely have on utility 
companies and their consumers. As a regulator, I am accountable 
to the ratepayers. When bills go up, I get call from irate 
consumers. While I am not here to criticize specific provisions 
within any of the rules, I am afraid we are setting our utility 
customers up for a perfect storm.
    My written testimony highlights a few studies from EPA and 
others that attempt to quantify the cost impacts of these 
rules. EPA's own assessment of the Mercury and Air Toxic 
Standards Rule estimates cost of $9.6 billion annually for 
compliance. Obviously, when you add the greenhouse gas and 
other rules, the cost will only increase. In fact, studies by 
the National Economic Research Associates put the cost of 
complying with four EPA rules--MATS, the Cross-Air State 
Pollution Rule, and rules covering coal combustion and cooling 
water intake--at approximately $21 billion per year from 2012 
to 2020. According to NERA, retail electricity prices in the 
U.S. would increase by about 6.5 percent over that period with 
certain regions feeling the sting much more than others.
    These estimates do not include the greenhouse gas rule nor 
the billions of dollars needed for upgrading the entire utility 
infrastructure, which some believe will cost more than $2 
trillion over the next 20 years, all coming from ratepayers.
    Additionally, many predict these rules will negatively 
impact grid reliability. The North American Electric 
Reliability Corporation has termed EPA's rules as the number 
one risk to reliability over the next 1 to 5 years. I am 
personally worried that there has never been a formal true 
reliability assessment of EPA's regulations. The agency has 
measured resource adequacy to determine whether the total 
amount of retirements in a particular region will cause reserve 
margins to fall below acceptable levels. But true reliability 
impacts occur locally.
    Some of the units that may be retired as a result of these 
rules are needed for local reliability purposes such as voltage 
support and black-start capacity. If these units are not 
available, the potential for reliability problems could ensue.
    If there is one message I would like for you to remember 
today it is that there must be a better way to do this. I 
understand the need to continue improving the environmental 
performance of the utility industry, but we must do it in a way 
that recognizes the absolute necessity of maintaining 
reliability and stable rates.
    Within NARUC, we have a formal dialogue with the Federal 
Energy Regulatory Commission and EPA officials, and I 
personally want to thank our Federal colleagues for their 
commitment to these discussions. But a dialogue does not 
substitute for the needed study of the reliability and cost 
impacts of these rules.
    Thank you for the opportunity to testify today and I look 
forward answering questions.
    [The prepared statement of Mr. Wright follows:]
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    Mr. Whitfield. Thank you, Mr. Wright.
    And Mr. Doniger, you are recognized for a 5-minute opening 
statement.

                 STATEMENT OF DAVID D. DONIGER

    Mr. Doniger. Thank you, Mr. Chairman and Mr. Rush.
    Nearly two million Americans, more than double the previous 
record, have already raised their voices in comments in support 
of EPA's proposed carbon pollution standard for new power 
plants, and I want to emphasize that the standard that has been 
proposed is for new plants. And more than 60 percent of 
Americans support letting carbon pollution standards be set by 
EPA according to a bipartisan poll conducted for the American 
Lung Association.
    Carbon pollution is imposing staggering health costs 
through heat waves, more smog, and increased extreme weather. 
There are two Supreme Court decisions that confirm now that it 
is EPA's job under the Clean Air Act, as Congress wrote it, to 
protect the American people from carbon pollution from both 
cars and power plants. The second one, which you haven't heard 
about today, is the decision from last June, American Electric 
Power v. Connecticut.
    By proposing standards for new plants under the Clean Air 
Act, EPA is simply following the law and the science. Power 
plants are the largest U.S. source of greenhouse gases, 2.3 
billion metric tons per year of CO2, 40 percent of the U.S. 
total.
    NRDC supports EPA's decision to establish a single category 
for all new plants that perform the same basic function of 
base-load and intermediate-load power generation. However, they 
are fueled. Owners and operators of plants that haven't built 
yet have flexibility to choose among these technologies when 
building the plants needed to serve this function.
    The proposed new standard recognizes that the market has 
already turned away from building new conventional coal plants 
due to low-cost natural gas, strong growth in wind and solar, 
big opportunities to reduce electricity needs through energy 
efficiency, and even the potential for nuclear power. So 
analysts from government, from the power industry, from the 
financial world, from American Electric Power, from Duke Power, 
they all forecast that we will be meeting our electricity needs 
over the next two decades without the need to construct new 
coal-fired plants. Thus, despite all the rhetoric and 
scapegoating, this standard will impose no additional costs on 
the electric industry, no additional costs on ratepayers, and 
have no adverse impact on jobs.
    NRDC agrees that carbon capture and storage-equipped plants 
are technically feasible today and can meet the proposed 
standard. We support provisions that EPA has included to 
facilitate construction of those plants. We have long supported 
well designed legislative measures to accelerate deployment of 
CCS, including tens of billions of dollars of support that 
would have been provided to power companies for adopting CCS 
under the Climate and Energy legislation passed by the House in 
the last Congress.
    The EPA needs to move forward to start the joint Federal 
and State process of cutting the 2.3 billion tons of carbon 
pollution from the existing power plant fleet under Section 
111(d). It is just plain false to claim that existing coal 
plants will be required to meet the new plant standard. The 
criteria and procedures for new and existing plants are 
different. They require EPA to consider costs, achievability, 
affordability, and NRDC believes that significant cost-
effective carbon pollution reductions can and should be made 
within the existing legal framework.
    Thank you.
    [The prepared statement of Mr. Doniger follows:]
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    Mr. Whitfield. Thank you. At this time I recognize Mr. 
Winberg for a 5-minute opening statement.

                 STATEMENT OF STEVEN E. WINBERG

    Mr. Winberg. Thank you, Mr. Chairman.
    My name is Steve Winberg. I am the vice president for 
CONSOL Energy Research & Development. CONSOL Energy is a multi-
energy producer of both coal and natural gas. I am also the 
chairman of the FutureGen Industrial Alliance of 501(c)(3) 
forum to build the world's first commercial-scale, coal-fired, 
near-zero-emission electric generation plant. I will update you 
on that in a moment.
    Carbon capture and storage, or CCS as it is often called, 
is the most important technology development effort underway if 
the world decides to significantly reduce CO2 emissions. It is 
more important than renewable technology development, more 
important than any efficiency improvements, and more important 
than advances in nuclear energy development.
    The reason CCS is so important is because reducing global 
concentrations of greenhouse gas is not a decision that can be 
made by the United States. Rather, it is a decision that must 
be made on a global basis. And according to the International 
Energy Agency, by 2035, 70 percent of the increasing global 
economic output will be by non-OECD countries, with China and 
India leading that growth. The result is that these countries 
will eclipse the United States CO2 emissions because they will 
continue to build coal plants to provide affordable electricity 
to allow them to develop their economies and bring their people 
out of abject poverty.
    With all of this coal generation being built around the 
world, if we are ever to come close to meeting any of the 
greenhouse gas reduction targets, CCS is the most important 
tool we can develop.
    Another point worth noting is that these greenhouse gas 
reduction targets would require CCS on natural gas plants also. 
We cannot reach these targets by just controlling coal. 
Unfortunately, CCS is not yet commercially available. We are 10 
to 15 years away from when CCS suppliers will be able to 
provide guarantees, and that assumes that we have significant 
funding available to commercialize CCS, something that we 
currently do not have.
    EPA's recently proposed greenhouse gas rule would require 
new coal-fueled power stations to meet a 30-year average CO2 
emission of 1,000 pounds per megawatt hour with a maximum CO2 
emission rate of 600 pounds per megawatt hour by year 11 of its 
operation. So in practical terms, this means that a power 
producer would have to begin installing CCS in year 5 to be 
ready by year 11. Power producers will not make a multibillion 
dollar bet that in 5 years CCS technology providers will offer 
commercial guarantees.
    So in effect, what EPA's rule does is eliminate any new 
coal for years to come because EPA is requiring new coal-fueled 
power plants to meet a natural gas equivalent CO2 standard 
before CCS is commercially available. Without guarantees from 
CCS suppliers, power producers cannot get financing. Without 
financing, power producers cannot and will not build.
    We can commercialize CCS and there are three very specific 
advancements that are needed. First, we need to invest in 
breakthrough technologies to reduce the cost of CCS. Second, we 
need to develop a national regulatory framework for storing 
CO2. A State-by-State patchwork of CO2 storage regulations is 
simply not workable. Third, we need to build several 
commercial-scale plants integrated with CCS to understand the 
cost and operability and to demonstrate that we can safely 
store CO2 over the long-term.
    I mentioned earlier that I am the chair of the FutureGen 
Industrial Alliance. The FutureGen project is one of these much 
needed commercial-scale demo projects. The Alliance is a group 
of coal suppliers, power producers, and equipment suppliers 
from around the globe and we are working with DOE and Illinois 
to retrofit a 166 megawatt coal-fired power plant. We will 
capture and sequester more than 1 million tons of CO2 per year 
over a period of at least 20 years.The CO2 will be stored about 
1 mile underground in a deep saline formation where it will be 
extensively and transparently monitored to provide the 
technical knowledge needed to advance clean coal technology. It 
is imperative that projects like FutureGen get built so that we 
can commercialize CCS.
    So in summary, EPA's proposed greenhouse gas regulation 
will prevent new coal plants from being built in the United 
States while it will have virtually no impact on reducing 
global concentrations of greenhouse gases. This proposed 
regulation will further weaken our country's global 
competiveness; prevent us from using coal, a low-cost, abundant 
domestic natural resource; and undercut U.S. job creation just 
at the time the U.S. economy appears to be beginning to claw 
its way out of this deep recession.
    Thank you for your time and attention.
    [The prepared statement of Mr. Winberg follows:]
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    Mr. Whitfield. Thank you very much.
    And Ms. Walz, you are recognized for 5 minutes.

                   STATEMENT OF BARBARA WALZ

    Ms. Walz. Thank you.
    Chairman Whitfield, Ranking Member Rush, and members of the 
subcommittee, my name is Barbara Walz and I am a senior vice 
president for External Relations and Environmental at Tri-State 
Generation and Transmission Association. I appreciate the 
opportunity to testify before you here today on Tri-State's 
views on EPA's new greenhouse gas rules, which regulate carbon 
dioxide emissions for newly constructed power plants.
    Tri-State is a not-for-profit, member-owned co-op based in 
Westminster, Colorado. Our mission is to provide affordable and 
reliable cost-based wholesale power to our 44 not-for-profit 
member systems that serve 1.5 million customers in rural 
Wyoming, Nebraska, New Mexico, and Colorado. Tri-State believes 
in a diversified, all-of-the-above portfolio. We generate or 
purchase power from hydropower, solar, wind, coal, and natural 
gas. However, renewable resources only provide a small fraction 
of our power needs. The bulk of our power comes from our coal-
based power plants in Wyoming, Colorado, Arizona, and New 
Mexico.
    These coal-based power plants are important parts of the 
rural communities in which they reside. For example, the Craig 
power plant in Western Colorado and the coal mines from which 
the coal comes from employs 750 people and provides $73 million 
in annual wages and benefits. Unfortunately, the high-paying 
jobs and tax base that a power plant like Craig provides to 
rural communities will be a thing of the past if this EPA 
greenhouse gas rule for power plants is allowed to stand.
    Simply put, EPA has created barriers that will effectively 
ban the construction of new coal-fired power plants in the 
United States. Banning the construction of new coal-fired power 
plants will have far-reaching and devastating impacts for rural 
communities that depend on coal for affordable and reliable 
electricity and for high-paying jobs.
    EPA provides an illusory concession for Tri-State and other 
companies that currently hold air permits but we must commence 
construction within an arbitrary 1-year timeframe. 
Unfortunately, the newly issued Mercury and Air Toxics 
Standards, or MATS, is a rule that is also a barrier to 
commencing construction within the 1-year timeframe provided in 
the greenhouse gas rule. Pollution control vendors have told 
EPA that they cannot guarantee that their equipment will meet 
the MATS' rule's exceptionally stringent requirements and they 
cannot reliably measure reductions even using the most advanced 
measurement technology.
    Without such guarantees, project developers will find it 
difficult if not impossible to find financing and start 
constructing these new facilities. EPA's greenhouse gas rule 
will impose a de facto ban on construction of new coal. Tri-
State believes this de facto ban is unlawful. For more than 40 
years, EPA has followed the mandate of Congress when regulating 
air emissions from new power plants. Historically, EPA adopted 
one set of standards for gas plants and another set of 
standards for coal plants.
    In this new greenhouse gas rule, EPA drastically departed 
from this Congressional mandate by establishing a new category 
of power plant that includes both coal and gas plants and a 
standard that can only be met by natural gas combined cycle 
turbines, a fact that EPA readily admits.New coal units that do 
not commence construction within the 12-month timeframe would 
have to be abandoned or install carbon capture and storage 
systems, a technology that we have heard today has not been 
demonstrated and is not commercially available.
    EPA seems to have adopted a field-of-dreams mentality 
regarding unproven and unavailable technology. If you mandate 
it, the technology will come. Our situation is so dire that the 
first time in the history of our 60-year-old electric 
cooperative, Tri-State took the significant step of filing 
legal petitions for review for the greenhouse gas rule and the 
MATS rule in the D.C. Circuit Court of Appeals.Tri-State 
supports regulatory requirements to protect public health and 
the environment, but standards must be achievable and 
compliance with them must be measurable.
    We urge the committee to exercise continued oversight over 
the EPA regulatory process because EPA has gone beyond the 
authority granted by Congress under the Clean Air Act by 
promulgating standards that are not based on achievable 
technology. Additional oversight is also necessary so that we 
may continue to offer affordable and reliable electricity to 
our member systems and their member owners.
    Thank you for your time and I would be happy to take any 
questions.
    [The prepared statement of Ms. Walz follows:]
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    Mr. Whitfield. Well, thank you, Ms. Walz. And I thank all 
of you for your testimony.
    I will recognize myself for 5 minutes of questions.
    Mr. Doniger in his statement said that there is no truth to 
claims that grouping all new plants that perform the same 
function whether natural gas or coal-fired in the same category 
under the proposed New Source Standard is a de facto ban on 
constructing new coal-fired plants. Now, I would ask the other 
three of you, do you agree or disagree with that statement?
    Mr. Winberg?
    Mr. Winberg. I disagree because the technology is not 
commercially available to CCS. Coal plants cannot meet the 
natural gas standard or that equivalent without implementing 
CCS. If it is not commercially available, it doesn't happen. In 
addition to that, under the MATS rule--which Ms. Walz 
referenced; that is the hazardous air pollutant rule--the 
emission standards are so stringent that equipment suppliers 
cannot guarantee. So in effect, what EPA has done is they have 
killed the coal twice.
    Mr. Whitfield. All right. And Ms. Walz, do you agree or 
disagree with Mr. Doniger's statement?
    Ms. Walz. I disagree with his statement for the same 
reasons.
    Mr. Whitfield. OK. And Mr. Wright, do you agree or disagree 
with his statement?
    Mr. Wright. I disagree.
    Mr. Whitfield. OK. Mr. Doniger, they disagree with you.
    Now, you know, there are so many issues here and all of us 
are very focused on this issue and we are dealing with very 
complex problems, obviously, and there are no easy solutions, 
but there is developing this animosity between EPA and certain 
Members of Congress and vice versa. But, for example, EPA 
refers to the Mercury and Air Toxic Standard--sometimes 
referred to as Utility MACT--and when Lisa Jackson and others 
in the Administration came up to testify and were selling that 
new regulation, they emphasized that the benefits would come 
from the reduction of mercury.
    And yet, when the analysis of their analysis took place and 
they subsequently admitted that there were negligible benefits 
from mercury reduction, that the majority of the benefits came 
from reduction of particulate matter, which is governed in 
another section of the Clean Air Act. And it is that kind of 
misleading the American people that creates animosity and makes 
it more difficult to deal with some of these issues.
    And particularly, when someone like Lisa Jackson--I don't 
think there is any question but that she has a goal of putting 
coal out of business. I think that is pretty obvious.
    And now, Mr. Wright, you are with the South Carolina 
Commission and one of your responsibilities I am sure is to 
protect ratepayers and also be concerned about reliability. 
Now, from your perspective as a commissioner, are you concerned 
about rate increases and are you concerned about reliability 
because of this greenhouse gas regulation?
    Mr. Wright. Yes, sir, I am very concerned, which led me 
back September of last year to file a 209 petition with the 
FERC to have a study started with us on the impact of all these 
EPA rules because EPA was saying that there hadn't been these 
studies done and they hadn't really been taking to States about 
it. So we started the dialogue. That is what got everything 
cranked I think. And now, we have a dialogue going with FERC 
that EPA is participating in. I am not saying that we have had 
any give yet. We have heard a lot but we are working toward 
that.
    But, yes, I am concerned about the cost to the utility 
companies for compliance which are going to be passed on to 
ratepayers and it is going to impact rates, and they are going 
to go up. I don't care if you go with the low-end number that 
EPA's throwing out there or the high-end that has come in some 
of these studies. It is going to hurt people.
    Mr. Whitfield. Right.
    Mr. Wright. And I have got to keep utilities whole.
    Mr. Whitfield. Yes. Ms. Walz, your company is sort of 
caught in a bind here because you have got to start 
construction within 12 months and then you have also got to 
meet the MATS standard. How much money have you all invested in 
this plant so far?
    Ms. Walz. Today, we have invested $70 million into the 
plant to get to this stage with some early design and air 
permitting.
    Mr. Whitfield. Seventy million?
    Ms. Walz. Correct.
    Mr. Whitfield. And you are not sure what is going to 
happen, I am assuming?
    Ms. Walz. Correct.
    Mr. Whitfield. OK. Well, my time has expired.
    And Mr. Rush, I recognize you for 5 minutes.
    Mr. Rush. Well, thank you, Mr. Chairman.
    Mr. Doniger, do you agree or disagree with your statement?
    Mr. Doniger. The statement we were discussing?
    Mr. Rush. Yes.
    Mr. Doniger. I made the statement that there is no de facto 
ban and I disagree with my colleagues who disagreed with me. 
And the reason there is no such ban is that the market 
realities have already driven the decisions on new power plants 
away from building new conventional coal plants.And I would 
like to quote Brookings economist Peter Wilcoxen who said in 
April, ``to put it simply, the lifecycle costs of coal-fired 
power are considerably higher than gas-fired power. This is not 
a theoretical matter. Over the past decade, the electric power 
sector has responded by adding more than about 200 gigawatts of 
gas-fired capacity, and about 2 gigawatts of coal.''
    And aside from a few plants that were planned some time 
ago, such as the Tri-gen plant, are in this transitional 
category that EPA has gone out of its way to accommodate. There 
are no new coal plants coming and it is market realities that 
they are reason for that. So to scapegoat these regulations is 
just that. It is----
    Mr. Rush. Has the Obama administration, in your opinion, 
ever engaged in a war on coal?
    Mr. Doniger. No. The Obama administration is carrying out 
the Clean Air Act which this Congress passed with a mission to 
protect our health and our environment including our climate 
from the adverse effects of pollution from power generation and 
from other industries. The goal is to clean up the pollution 
and it is a neutral goal. The EPA has gone out of its way to 
provide a pathway for coal with carbon capture and storage, 
which is the only future for coal, for new coal plants to 
prosper under this regulatory framework.
    And contrary to one of the other witnesses, Siemens and 
other companies do provide guarantees for the performance of 
their equipment related to carbon capture and storage. And 
there are other projects underway--the Kemper Plant, for 
example, in Mississippi and two other coal plants--one, the 
Summit Plant in West Texas, and a plant in Southern California 
from hydrogen energy. And in the new carbon capture and storage 
this is something that can be done now.
    Mr. Rush. In my opening statement I cited a June 6 Chicago 
Tribune article entitled ``Extraordinary Extremes: Climate 
Scientists Explain our Crazy Weather,'' written by two 
university professors, Dr. Donald Wuebbles and Mr. Aaron 
Packman. In the article these climate experts reported that in 
March there were over 15,000 warm-weather records that were 
broken across the country. They also reported that the National 
Oceanic and Atmospheric Administration received 223 reports of 
tornadoes where above 80 is the norm for March.
    Mr. Doniger, besides these things that I just mentioned, 
the article also outlined a number of additional extreme 
weather occurrences which they suggested as strongly tied to 
human-related climate change. Are you aware of any 
extraordinary weather patterns associated with climate change, 
whether it be extreme weathers, rising sea levels, coastal 
flooding, or the like? Can you also share with this committee 
how these changes may endanger the health, welfare, and 
livelihoods of ordinary American citizens?
    Mr. Doniger. I can say Americans have had extraordinary 
personal experience with extreme weather in the past year or 
so. In 2011--and these are monthly records. Your article 
referred to daily records. But we have 3,251 broken monthly 
weather records across the country. And we have an online map 
tool on our Web site that tracks these and the destruction they 
caused. Now, 2012 is off to another record-smashing start. 
March 2012 was the hottest March in the contiguous U.S. since 
record keeping began in 1895.And the year from June 2011 to May 
2012 was the warmest 12-month stretch the U.S. has ever had.
    Mr. Whitfield. Thank you. At this time I recognize the 
gentleman from West Virginia, Mr. McKinley, for 5 minutes.
    Mr. McKinley. Thank you again, Mr. Chairman.
    Mr. Doniger, did I hear correctly again, you say there are 
carbon capture commercially available facilities in this 
country?
    Mr. Doniger. What I said was there are manufacturers-
Siemens, Mitsubishi, and GE who----
    Mr. McKinley. But they are none in operation right now that 
are----
    Mr. Doniger. There are three plants in the works in 
addition to the FutureGen Plant. Southern Company is building 
one at Kemper in Mississippi.
    Mr. McKinley. OK. I am just curious about that because we 
have to do it now under this rule. It has to be in----
    Mr. Doniger. No, we have to do it 10 years from now.
    Mr. McKinley. Well, you have to start in the process is 
what I am saying to do it now. The EPA said in November 2010 
that carbon capture and storage should be evaluated but in most 
cases will not be technologically feasible or affordable.
    Mr. Doniger. That is for plants where it would have to 
operate now.
    Mr. McKinley. If I could retain my time because I just had 
to--there seems to be this new something in the water that says 
we are not having a war on coal. I find that startling and 
disturbing that people can make that kind of testimony and try 
to get away with it. Because even Lisa Jackson went on to say 
when she testified here about maybe a month ago about the 
carbon capture that she was going to get back to me with the 
names of the facilities and where they are located and that 
hasn't occurred yet. So I would be real curious to see where we 
go with that.
    Mr. Winberg, if I could with you in a relatively short 
time, you perhaps heard some of the testimony from the previous 
panel. And again there are outrageous claims that there is no 
war on coal. And they are trying to use the argument that 
employment is up in the coalfields. And I just want to say 
right here in the paper in West Virginia we lost 1,400 jobs 
last month in the coal industry. So when you couple that with 
the realization that we are down from 1.2 billion tons now to 
just under a billion tons, we are already using less coal in 
America but we are exporting.
    Exporting coal is up 20 some percent from approximately 50 
million tons to over 100 million tons in just 6 years. Isn't 
that where a lot of the jobs that are being created now, or 
holding on to, is we are exporting it because we can't burn it 
here? There is an attitude coming from the EPA that this 
pushing back against the use of coal-fire facilities and 
threatening them with new regulations, what would you suggest?
    Mr. Winberg. I would suggest that there is a deliberate 
effort to reduce the amount of coal burned in the United 
States. Various estimates are somewhere between, on the low 
side, 40 gigawatts out of 300 gigawatts of coal up to maybe 90 
or 100 gigawatts of coal. That would be about a third of the 
coal fleet. That could be several hundred million tons of coal 
lost here in the United States. So I think there is a very 
deliberate effort by EPA to reduce the amount of coal burned in 
the United States and----
    Mr. McKinley. Are they deliberately distorting numbers? Do 
you think that is what is going on here to keep up this 
message? Because they know there is a war on coal. They know 
that the employment is going to be affected by it. And if they 
are not aware, just in one State, 1,400 jobs just lost last 
month because of the lack of the use of coal in America and we 
are exporting.
    But yet you go to the West Coast where they are actually 
trying to stop the exportation of coal at these ports. And yet 
they try to say with a straight face we don't have a problem 
with coal. Come on. How do you deal with this? I don't 
understand these economists. How are we supposed to not laugh 
when we hear this kind of testimony?
    Mr. Winberg. Well, I think the way we don't laugh is 
because it is simply not funny. It is jobs that are being lost 
here in the United States, sir.
    Mr. McKinley. Thank you. Thank you. I yield back my time.
    Mr. Whitfield. Thank you.
    At this time, I recognize the gentleman from Virginia, Mr. 
Griffith, for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman.
    Ms. Walz, I heard Mr. Doniger say that the EPA had gone out 
of its way to accommodate you all. Your comments on that 
statement, please?
    Ms. Walz. I would say it is simply an illusion. You know, 
they gave you 12 months to commence construction, and you have 
all these other rules that you are facing, MATS being one of 
them that you have comply with as well. And you don't have a 
vendor that can design you equipment to meet the standards, and 
therefore, you don't have financers willing to come forward, 
so----
    Mr. Griffith. So you disagree with that statement?
    Ms. Walz. I disagree, yes.
    Mr. Griffith. And I would have to say to my colleague from 
West Virginia that I think the language on the war on coal 
changed when 40 percent of the Democrats in West Virginia 
decided not to vote for the incumbent in the presidential 
primary. And so suddenly, we have seen the language change.
    My experience also coming from coal country is is that coal 
is under assault and that it is driving up electric prices just 
as Candidate Obama had promised.
    Mr. Wright, if I might ask you, how many applications from 
various companies, energy-producing companies that you all 
regulate, have come in in the last, I don't know, 2 or 3 years 
to reduce the cost to the consumers of energy because these new 
regulations are creating so much prosperity in your State?
    Mr. Wright. That would be zero but we have had a lot come 
in for rate----
    Mr. Griffith. I knew that.
    Mr. Wright [continuing]. Increases. And if you go to a 
night hearing with me, you would learn a lot about your 
heritage when they start fussing at you.
    Mr. Griffith. Yes. And your experience in South Carolina is 
is that they have not asked for any reductions but there have 
been increased requests. Would you say that for most of the 
companies over the last 3 to 5 years that there have been 
multiple increase requests because of their increase costs in 
both providing the fuel to power the plants--and this is my 
experience in Virginia--multiple requests both on the power 
side and on meeting the regulatory requirements? Is that true 
in South Carolina as well?
    Mr. Wright. It is very true. In fact, the last few rate 
cases that have come before us that have been decided, we 
basically limited it to just the environmental compliance 
costs.
    Mr. Griffith. And are your rate cases similar to those in 
my home State of Virginia in that these costs, as President 
Obama said in his famous San Francisco quote, ``these costs 
will be passed on to the consumers?'' Is that true in South 
Carolina as well, that when these costs are added to the 
production of electricity, that gets passed on to the consumer?
    Mr. Wright. As long as it is proven to be just and 
reasonable, yes, sir.
    Mr. Griffith. And would it also be your opinion, as it is 
mine, that the consumers who get hit the hardest are in fact 
the poor, the working poor, and the elderly?
    Mr. Wright. The large majority of our population in South 
Carolina is below the median national income and they are 
getting hit really hard. And it is not just from electric 
sector because all utility sectors are experiencing problems--
the water sector, the gas pipeline sector, the telecom sector, 
and the electricity sector. And it is going to be trillions of 
dollars in the next 15 to 20 years.
    Mr. Griffith. Trillions of dollars? Is that just for South 
Carolina or is that an estimate of the region?
    Mr. Wright. That is in the country.
    Mr. Griffith. In the country?
    Mr. Wright. Um-hum. And that is not including the 
compliance to this new suite of regs. That is just 
infrastructure replacement and upgrades now.
    Mr. Griffith. And that is trillions of dollars that will be 
passed on to the consumers, which will disproportionately hurt 
the working class, the poor, the middle class, and the elderly. 
Isn't that true?
    Mr. Wright. It is. And in the regions that are coal-
reliant, the increase is going to be much more than any 6.5 
percent. It could be multiples of that.
    Mr. Griffith. And that is why it is not funny, isn't that 
right?
    Mr. Wright. There is nothing funny about it.
    Mr. Griffith. Can you explain to me how anybody could be 
that cruel?
    Mr. Wright. I don't really know why it is happening. All I 
know is that we are trying to slow the train wreck down 
somehow. We are not saying don't do it, but we need to find a 
way to do it right.
    Mr. Griffith. And if we have reasonable time to comply and 
find new technologies to make sure that in fact--not just 
theoretically--but in fact that technology was available. 
Everybody wants to move in that direction but if we do it too 
fast, we end up killing the goose that laid the golden egg. 
Would you not agree?
    Mr. Wright. If you try to rush to all of this and everybody 
is trying to push a certain fuel--and we have heard natural 
gas--to try to do the retrofits and do all the upgrades that 
need to happen or even build new generation, you are competing 
for craft labor. It is going to artificially drive up cost in a 
very short term. If you gave a little bit more time for 
compliance, you are going to reduce the impact to ratepayers in 
the long run.
    Mr. Griffith. I yield back, Mr. Chairman.
    Mr. Whitfield. The gentleman yields back.
    Mr. Rush. Mr. Chairman?
    Mr. Whitfield. Yes?
    Mr. Rush. Mr. Chairman, in the course of this hearing I 
referenced an article in the Chicago Tribune dated June 6, 
2012, and I ask unanimous consent that this article by Donald 
Wuebbles and Mr. Aaron Packman be entered into the record.
    Mr. Whitfield. Without objection.
    [The information follows:]
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    [GRAPHIC] [TIFF OMITTED] 80625.144
    
    Mr. Whitfield. At this time, the chair recognizes the 
gentleman from Kansas, Mr. Pompeo, for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman.
    Ms. Walz, you have been trying to build a coal-fired power 
plant in my State for a long time.
    Ms. Walz. Yes, we have.
    Mr. Pompeo. Successfully, so far. Roadblocks have included 
our former governor and the Secretary of Health and Human 
Services, a bunch of environmental groups that have files 
lawsuits, an EPA that you just said a few minutes ago has not 
in fact gone out of its way to help you get it done.I heard a 
minute ago someone contradict that and I actually asked Ms. 
McCarthy at our last hearing if there was technology capable, 
if you could find suppliers who would guarantee that they could 
hit the outcome that is needed to comply with these 
regulations, she said she would get back to me with the names 
of the companies. She has not chosen to do so at least at this 
point in time.
    Although today, Mr. Doniger mentioned Siemens. Have you 
talked to Siemens? You said that you haven't been able to find 
anybody that can do it at your plant either. Talked to Siemens? 
They are operating that big wind plant up there.
    Mr. Doniger. Congressman, I was referring to their 
guarantees about CCS technology.
    Mr. Pompeo. So there is no one you have talked to, Ms. 
Walz, that can help you build your plant that will be in 
compliance with all the regulations that you----
    Ms. Walz. There is not. We have solicited that information.
    Mr. Pompeo. So why don't you just give up? Why don't you 
build a natural gas-fired plant or an algae plant or a wind 
plant instead?
    Ms. Walz. Well, we believe that our mission is to provide 
reliable, affordable electricity. And there is an abundance of 
coal in the western U.S. in our service territory and we 
believe it can be done cleanly. And we have just gotten pushed 
so far with all of these environmental regulations layering on 
top of each other. We have felt compelled, as I have said for 
the first time in the history of the company, to sue EPA.
    Mr. Pompeo. Yes. And the fact that you have got $70 million 
of your own risk capital at stake to add to that, too.
    Ms. Walz. Correct. That would be absorbed by our members, 
the farmers, the ranchers, small businessmen in the rural 
communities.
    Mr. Pompeo. Yes, that is a big deal out in western Kansas.
    I want to ask all three of you, Mr. Doniger made the 
comment that these regulations will have no impact on 
ratepayers, and I just want to see if there is anybody on the 
panel--Mr. Wright, you have already said how much impact you 
thought it had. Mr. Winberg, big impact on ratepayers?
    Mr. Winberg. Yes, sir.
    Mr. Pompeo. Ms. Walz?
    Ms. Walz. Yes, big impact on ratepayers.
    Mr. Pompeo. And so, Mr. Doniger, I will ask you. When a 
utility issues a press release after going through a rate 
review through--and in the case of Kansas, the KCC--and they 
said the reason we wouldn't ask for this rate request was 
because of environmental compliance cost, do you think they are 
wrong or are they lying?
    Mr. Doniger. Well, Congressman, you are mixing up apples 
and oranges. What I came to testify about was the proposed 
standard for power plant carbon pollution. And that will have 
no impact on ratepayers because no one is planning to build 
coal plants.
    Mr. Pompeo. So this is what I thought. Let me just reclaim 
my time----
    Mr. Doniger. On the mercury standard----
    Mr. Pompeo. Let me reclaim my time. I thought that is where 
you would head with that. I appreciate that. So let me get this 
right. So you set forth a set of rules and then you observe 
that the response from the industry is not to build the power 
plants that your very rules deny the opportunity to go build 
them, and then you look at the world and say, gosh, no one is 
building one of those; it certainly must the case that there 
will be no economic impact associated with these rules. It 
would be as if I said to my son, there is a penalty for going 
swimming and I found he was working in the yard consistently. 
And I said, gosh, it is funny; there must be no harm to him 
from not being able to swim because I find him in the yard all 
day.
    Mr. Doniger. Well, Congressman----
    Mr. Pompeo. This is the logic which you present to us, Mr. 
Doniger.
    Mr. Doniger. No, I think not, Congressman. Congressman, the 
reason for the trends in the direction of construction for coal 
and gas is about the economics of natural gas.
    Mr. Pompeo. Today, today, Mr. Doniger.
    Mr. Doniger. Yes, sir.
    Mr. Pompeo. Yes, today.
    Mr. Doniger. And----
    Mr. Pompeo. But perhaps not tomorrow. Your rules----
    Mr. Doniger. And EPA has done an analysis of what would 
happen if the----
    Mr. Pompeo. Mr. Doniger----
    Mr. Doniger [continuing]. Price of natural gas goes south. 
It would have to go up five times----
    Mr. Pompeo. I have got but a minute left. We know that 
the----
    Mr. Doniger [continuing]. In order to affect the economics.
    Mr. Pompeo. Mr. Doniger, I have but a minute left. We know 
that the price of these various inputs varies over time and so 
construction of plants and decisions about the economic players 
will make about the use of the capital would vary over time. To 
put these rules in place not knowing whether we will go back to 
14 bucks in MCF or remain at 2 or 2.50 in MCF is ludicrous on 
its face and to say it doesn't impact ratepayers is silly.
    Mr. Doniger. There is no one that expects----
    Mr. Pompeo. I yield back the balance of my time.
    Mr. Doniger [continuing]. It going back to $14 in the 
next----
    Mr. Whitfield. The gentleman yields back the balance of his 
time. And I see no one else here to ask questions.
    So I want to thank all of you, members of this panel. We 
appreciate your testimony and your thoughts on this important 
subject.
    We will keep the record open for 10 days. And with that, 
the hearing is concluded.
    [Whereupon, at 1:02 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
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