[Senate Hearing 112-952]
[From the U.S. Government Publishing Office]
S. Hrg. 112-952
OVERSIGHT: REVIEW OF EPA REGULATIONS
REPLACING THE CLEAN AIR INTERSTATE RULE
(CAIR) AND THE CLEAN AIR MERCURY RULE (CAMR)
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CLEAN AIR
AND NUCLEAR SAFETY
of the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
----------
JUNE 30, 2011
----------
Printed for the use of the Committee on Environment and Public Works
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
S. Hrg. 112-952
OVERSIGHT: REVIEW OF EPA REGULATIONS
REPLACING THE CLEAN AIR INTERSTATE RULE
(CAIR) AND THE CLEAN AIR MERCURY RULE (CAMR)
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CLEAN AIR
AND NUCLEAR SAFETY
of the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
JUNE 30, 2011
__________
Printed for the use of the Committee on Environment and Public Works
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
23-818 PDF WASHINGTON : 2017
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware DAVID VITTER, Louisiana
FRANK R. LAUTENBERG, New Jersey JOHN BARRASSO, Wyoming
BENJAMIN L. CARDIN, Maryland JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico MIKE JOHANNS, Nebraska
JEFF MERKLEY, Oregon JOHN BOOZMAN, Arkansas
KIRSTEN GILLIBRAND, New York
Bettina Poirier, Majority Staff Director and Chief Counsel
Ruth Van Mark, Minority Staff Director
----------
Subcommittee on Clean Air and Nuclear Safety
THOMAS R. CARPER, Delaware, Chairman
MAX BAUCUS, Montana JOHN BARRASSO, Wyoming
FRANK R. LAUTENBERG, New Jersey DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont LAMAR ALEXANDER, Tennessee
JEFF MERKLEY, Oregon MIKE JOHANNS, Nebraska
BARBARA BOXER, California, (ex JAMES M. INHOFE, Oklahoma, (ex
officio) officio)
Bettina Poirier, Majority Staff Director and Chief Counsel
Ruth Van Mark, Minority Staff Director
C O N T E N T S
----------
Page
JUNE 30, 2011
OPENING STATEMENTS
Carper, Hon. Thomas, U.S. Senator from the State of Delaware..... 1
Barrasso, Hon. John, U.S. Senator from the State of Wyoming...... 4
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland 6
Sessions, Hon. Jeff, U.S. Senator from the State of Alabama...... 8
Lautenberg, Hon. Frank R., U.S. Senator from the State of New
Jersey......................................................... 9
Cornyn, Hon. John, U.S. Senator from the State of Texas.......... 11
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma,
prepared statement............................................. 447
WITNESSES
McCarthy, Hon. Gina, Assistant Administrator for the Office of
Air and Radiation, U.S. Environmental Protection Agency........ 13
Prepared statement........................................... 15
Responses to additional questions from:
Senator Carper............................................... 20
Senator Inhofe............................................... 23
O'mara, Collin P., Secretary, Department of Natural Resources and
Environmental Control for the State of Delaware................ 98
Prepared statement........................................... 101
Shaw, Chairman Bryan W., Ph.D., Texas Commission on Environmental
Quality........................................................ 109
Prepared statement........................................... 111
Tierney, Sue, Managing Principal, Analysis Group, Inc............ 126
Prepared statement........................................... 128
Responses to additional questions from Senator Carper........ 151
Walz, Barbara, Senior Vice President Policy and Environmental,
Tri-State Generation and Transmission Association, Inc......... 307
Prepared statement........................................... 309
Carpenter, David O., M.D., Director, Institute for Health and
Environment, University of Albany.............................. 321
Prepared statement........................................... 323
Responses to additional questions from Senator Boxer......... 331
ADDITIONAL MATERIAL
Statements:
Building and Construction Trades Department.................. 449
American Electric Power (AEP)................................ 451
Institute of Clean Air Companies (ICAC)...................... 455
Department of Natural Resources and Environmental Control.... 462
Office of the Governor, State of Delaware.................... 477
Department of Natural Resources & Environmental Control,
Division of Air Quality, State of Delaware................. 483
OVERSIGHT: REVIEW OF EPA REGULATIONS REPLACING THE CLEAN AIR INTERSTATE
RULE (CAIR) AND THE CLEAN AIR MERCURY RULE (CAMR)
----------
TUESDAY, JUNE 30, 2011
U.S. SENATE
Committee on Environment and Public Works,
Subcommittee on Clean Air and Nuclear Safety
Washington, DC.
The committee met, pursuant to notice, at 10 a.m. in room
406, Dirksen Senate Office Building, Hon. Thomas Carper
(chairman of the committee) presiding.
Present: Senators Carper, Lautenberg, Cardin, Merkley,
Barrasso, and Sessions.
Also present: Senator Cornyn.
OPENING STATEMENT OF HON. THOMAS CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. The hearing will come to order. Good
morning, one and all.
Senator Cornyn, nice to see you. We are together in the gym
at the Y in the Senate gym earlier today, and they have a
couple of guys here who work hard to stay in shape, trying to
keep up with them.
We are going to kick this off, and we welcome, certainly,
Senator Cornyn, who is going to introduce one of our witnesses
and make some comments.
We welcome our witnesses.
I will speak for a few minutes and then recognize Senator
Barrasso and other Senators that are here to make an opening
statement, and then call on Senator Cornyn to, in fact, I think
we will ask questions of Senator Cornyn. We are going to flip
things here. He probably is ready.
Today's Subcommittee hearing will review the proposed
replacements of the Clean Air InterState Rule, affectionately
known as CAIR, and the Clean Air Mercury Rule, CAMR, and their
economic, environmental, and health impacts.
Senators, again, will have 5 minutes for opening statements
and I will recognize our panel of witnesses. Each witness will
have about 5 minutes for his or her opening statement, and
following each panel statements we will have one round of
questions.
Since coming to the U.S. Senate a decade or so ago, I have
made it my mission to work with our colleagues to ensure that
EPA has the right tools to clean our air. As some of you may
know, I have worked diligently across the aisle, even with guys
like this guy, on clean air legislation to reduce deadly
emissions of sulfur dioxide, nitrogen oxide, mercury, and other
air toxics in our Country.
Oftentimes, I have been asked why I am so passionate about
clean air and usually start off by giving a couple of reasons.
First of all, I believe most of us in the room believe we ought
to try to treat other people the way we want to be treated, and
as many of you know, air pollution knows no State boundaries.
As Governor of my State in the 1990's, I quickly realized that
one State could do everything in its power to reduce its own
air pollution, but could still itself with dirty air because of
bad neighbors.
Many of you have heard me say that Delaware is at the end
of America's tailpipe. It is not just Delaware, it is Maryland,
it is New Jersey, it is Virginia, it is Pennsylvania. Other
States to the north are less. We are at the end of America's
tailpipe. In fact, our Secretary of Natural Resources and
Environmental Control, who is here today, Collin O'Mara, has
said that up to 90 percent of Delaware's pollution, at least
air pollution, comes from other States.
As Governor, I think I could have just about shut down
every source of pollution in our State and Delaware would have
still been in non-attainment. Think about that. We pretty much
shut down our State and we still would have been in non-
attainment. Christy Whitman, my neighbor in New Jersey, was
mindful of the same thing and equally unhappy about being in
that situation. She and I quickly learned that our neighbors'
dirty air meant higher health care costs for our own States. My
neighbors' dirty air meant difficulty in attracting businesses
to our State of Delaware and my neighbors' dirty air meant that
we were paying the full price for their dirty energy.
And that is when I realized that we had to have a national
solution to address our air quality problems. States can't do
it alone; couldn't do it then and can't do it now. We are all
in this together. We have to work together and we need to work
with the EPA to continue cleaning up our air.
Second, I believe it is critical for us to achieve better
health care results in America for less money. In fact, across
the board, we need to achieve better results in just about
everything, including health care, for less money, too. But
over the 1990 to 2020 time period the EPA estimates that our
Country will see over $12 trillion of health and economic
benefits in the form of longer lives, healthier kids, and
greater work force productivity from the implementation of the
Clean Air Act. Clean Air Act benefits outweigh its costs by
some 30 to 1. Not a bad bang for our buck. And although we have
made great strides in reducing our Nation's air pollution, more
must be done if we want to protect our children and compete in
the emerging global clean energy economy.
Today we discuss two new clean air regulations, the Clean
Air Transport Rule and the Utility Air Toxics Rule. These
regulations target our largest emitters of many known toxics
that cause cancer, brain defects, and respiratory stress:
fossil fuel power plants. And we have a chart over here. This
is a busy chart, but I think it shows in the U.S. power plants
emit, among other things--I am almost tempted to take out my
reading glasses so I can read this stuff--but organics. In
fact, I am going to take out my glasses to read this stuff.
[Laughter.]
Senator Carper. In a true sign of bipartisanship, Senator
Barrasso--these aren't any good.
Senator Barrasso. I have done surgery with these glasses.
Senator Carper. That is what I have heard.
[Laughter.]
Senator Carper. All right, here we go. From power plants,
U.S. power plants, emissions, 60 percent of the arsenic, 60
percent of the SO2, 13 percent of the nitrogen oxide, 30
percent of the nickel, 20 percent of the chromium, 50 percent
of the mercury, and over 50 percent of many acid gases. It is a
good chart if you can read it.
These toxic pollutants know no State boundary and they send
thousands of our children to the hospital every day and
contribute to shorter life spans for thousands every year.
Just one of these rules, the Air Toxics Regulation, we
could see from it some $13 in benefits for every dollar that we
spend in compliance and, again, getting greater health care
results for less money, and that is being demonstrated by a
chart held by one of our--I was going to say one of our
interns, but our interns are sitting over here, making him do
all the work. This is a pretty good chart, I can actually read
this. But we are looking at the billions of dollars in 2010 for
the cost of implementation, it looks like about $11 billion.
The payoff looks like about $145, $146 billion. That is a
pretty good return.
And as we will hear today, these regulations are long
overdue, addressing pollution that should have been cleaned up
years ago, maybe even decades ago. We will also hear today that
we have the technology to meet these new standards, and many
States like Delaware have successfully implemented similar
measures.
I look forward to hearing our testimony today on these
important issues and regulations. We look forward to working
with the Administration and with our colleagues, Democrat and
Republican, to ensure that we have even cleaner air going
forward.
Senator Barrasso, thank you.
[The prepared statement of Senator Carper follows:]
Statement of Hon. Tom Carper, U.S. Senator
from the State of Delaware
Since coming to the U.S. Senate a decade ago, I have made
it my mission to work with my colleagues to ensure that EPA has
the right tools to clean our air. As some of you know, I have
worked diligently across the aisle on clean air legislation to
reduce deadly emissions of sulfur dioxide, nitrogen oxide,
mercury and other air toxics in our country.
Often times, I'm asked why I am so passionate about clean
air. Well here are a few reasons. First, I believe we ought to
treat other people the way we'd want them to treat us. As many
of you know, air pollution knows no State boundary.
As Governor of Delaware in the 1990's, I quickly realized
that one State could do everything in its power to reduce its
air pollution, but could still find itself with dirty air
because of bad neighbors. Many of you have heard me say that
Delaware is at the tailpipe of America. In fact, our Secretary
of Natural Resources, Colin O'Mara who is here today, has said
up to 90 percent of Delaware's pollution comes from other
states.
As Governor, I could have shut down EVERY SOURCE OF
POLLUTION IN THE STATE, and DELAWARE would still have been in
nonattainment. As Governor, I quickly learned that my
neighbor's dirty air meant higher health care costs for my
state. My neighbor's dirty air meant difficulty attracting
businesses to my state. And, my neighbor's dirty air meant WE
were paying the full price of their dirty energy.
That's when I realized we had to have a national solution
to address our air quality problems. States cannot do it alone.
We're all in this together. We've got to work together, and we
need to work with the EPA to continue cleaning up our air.
Second, I believe it's critical for us to achieve better health
care results in America for less money.
Over the 1990 to 2020 time period, the EPA estimates that
our country will see over $12 trillion in health and economic
benefits-- in the form of longer lives, healthier kids, and
greater workforce productivity --from the Clean Air Act. The
Clean Air Act benefits outweigh the costs--30 to 1. That's a
pretty big bang for the buck!
Although we've made great strides in reducing our nation's
air pollution, more must be done if we want to protect our
children and compete in the emerging global clean energy
economy. Today, we discuss two new clean air regulations--the
Clean Air Transport Rule and the Utility Air Toxics Rule. These
regulations target our largest emitters of many known toxics
that cause cancer, brain defects and respiratory stress--
fossil-fuel fired power plants.
These toxic pollutants know no State boundary and send
thousands of our children to the hospital everyday and
contribute to shorter life spans for thousands every year. Just
one of these rules--the air toxics regulation--we could see $13
in benefits for every $1 we spend in compliance. Again getting
greater health care results for less money. And as we will hear
today, these regulations are long overdue, addressing pollution
that should have been cleaned up decades ago.
We will also hear today that we have the technology to meet
these new standards, and many states, like Delaware, have
successfully implemented similar measures. I look forward to
hearing testimony on these important regulations and look
forward to working with the Administration and my colleagues to
ensure we have clean air.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM THE STATE OF WYOMING
Senator Barrasso. Thank you very much, Mr. Chairman. I
appreciate having these hearings today about the regulations
coming out of the EPA. We have held a number of hearings on
these regulations and we have gotten some very useful
testimony. I am happy to see Senator Cornyn here with us, and I
am disappointed that the Chairman has ruled that Senator Cornyn
is not permitted to participate fully and ask his important
questions----
Senator Carper. Hold that just for a second. This doesn't
take away from your time.
I think most of us probably live by the Golden Rule.
Senator Cornyn and I actually talked about this yesterday and I
said, John, do you want to give an opening statement and have
an extended opening statement in your introduction and make
whatever points you want, and he actually said, that is fine, I
would be pretty pleased to do that.
And we talked today and I said, you know, in this further
Golden Rule, when I was in my first year, first 2 years in the
U.S. Senate, I used to go to hearings of the Judiciary
Committee. I wasn't on the committee, but they would actually
let me sit at the dais with the committee, and at the end,
after everybody else on the committee had asked their
questions, if they had any extra time, they would let me ask
questions too, at least for 5 minutes, and I offered that
opportunity to Senator Cornyn. You don't know this, but I
offered that opportunity to Senator Cornyn, and he said what he
would really rather do is chair the hearing. So we have agreed
to do that and I will questions from the dais over here. But I
think we worked this out.
If you want to say that, you can go ahead, but I think we
worked it out.
Senator Barrasso. Well, Mr. Chairman, let me go on, because
there has been a lot of talk about public health benefits of
additional government restrictions on power plants, on
factories, on small businesses, and on other job creators. We
have also discussed the very real fact that American
unemployment stands at 9.1 percent. These are people who are
looking for work and cannot find someone to employ them. The
rest of America wants to keep their jobs, and everyone wants
good public health. The question is do the regulations coming
out of the EPA accomplish all of those goals, and to me the
answer is they do not.
According to the National Economic Research Associates'
recent study, the EPA's Clean Air InterState Rule, the
Transport Rule, and the Clean Air Mercury Rule, known as
Utility MACT, the two rules that we are discussing today, would
alone result in $184 billion in costs to power providers and
consumers and 1.44 million jobs lost, as the poster shows.
Unemployment in this Country is high and the greenest
State, California, where regulations such as these have been
adopted for years, has one of the highest unemployment rates of
all. California's unemployment rate stands at 11.7 percent.
The negative health benefits of high unemployment are also
now well documented. In this very Committee, on June 15th, just
2 weeks ago, Dr. Harvey Brenner of Johns Hopkins University,
testified, ``The unemployment rate is well established as a
risk factor for elevated illness and mortality rates in
epidemiological studies performed since the early 1980's.'' He
also found that ``In addition to influences on mental
disorders, suicide, alcohol abuse, and alcoholism, unemployment
is also an important risk factor in heart disease and overall
decreases in life expectancy.'' In addition, according to the
National Cancer for Health Statistics, we learn that American
children in poverty are 3.6 times more likely than non-poor
children to have poor health and 5 times more likely to die
from an infectious disease.
We have here testifying today Ms. Gina McCarthy, and she
has stated families shouldn't have to choose between a job and
healthy air; they are entitled to both. But families need to be
employed; otherwise, the 9.1 percent who are looking for
worker, the older work in Michigan, the dock worker in
Massachusetts, the fisherman in Connecticut, the miner in
Wyoming, the stay-at-home moms and their children will feel the
negative effects.
If we want to talk about public health, then let's focus on
the major threat to the public, and that is unemployment. We
must face the facts; otherwise, the health costs of not
addressing unemployment will far exceed any health benefits of
the regulations being proposed by the EPA today.
This Administration and this EPA are on the wrong track.
They are doing so by proposing dozens of regulations to drive
up the cost of doing business, and that includes energy costs,
for whole sectors of the American economy that the
Administration has basically shown that they don't like; the
refiners, the coal mines, the rare earth mines, ranchers, dairy
farmers, cement manufacturers, fertilizer producers, coal-fired
nuclear power plants, to name a few. This Administration,
through its policies, is making it harder and more expensive
for the private sector to create jobs. I am looking for ways to
make it cheaper and easier for the private sector to create
jobs.
This Administration has also been subsidizing sectors of
the economy that they favor; renewable energy, manufacturing
and production. In a June 25th Washington Post story entitled,
Obama's Focus on Visiting Clean Tech Companies Raises
Questions, the article went on to State, along with Capitol
Hill fallout, the Administration's attention to certain clean
tech companies has led to some industry concerns. Executives of
some struggling startups ask whether the Administration
rigorously examines companies and their products before
endorsing a favored few.
This is the Washington Post. They give an example. The
article points out that one solar panel manufacturing company
that the President has backed ``used an array of glass tubes
that are expensive to produce, causing investment advisors to
question whether the product could compete with less expensive
Chinese models.'' The company received a $530 million Federal
loan guaranty under the President's stimulus plan.
Many companies in the article said that they only got a
fraction of the money that Obama doled out to those few winners
that could produce much more with less. One CEO is quoted as
saying the Administration is giving some companies massive
advantages over others. And when the President touted the
success of the LED light bulb manufacturer in North Carolina,
he failed to mention that one of the companies he toured was
having significant financial difficulties, the stock value was
cut in half in the last year, and this was despite the company
receiving a $39 million tax credit through the Obama stimulus
plan. And financial analyst Jeffrey Benneck stated that company
would have a hard time competing unless ``anyone can get their
cost down to compete with the Chinese companies.''
Picking winners and losers just doesn't work. This
Administration has had 2 years to get this right and has
failed. Costly job crushing regulations, heavy tax burdens, and
investment in uncompetitive industries does not foster economic
growth; it does not create jobs; it does not promote commerce;
and does not make the public healthier.
Thank you, Mr. Chairman. Look forward to the testimony.
Senator Carper. You are welcome.
Senator Cardin.
OPENING STATEMENT OF HON. BENJAMIN L. CARDIN,
U.S. SENATOR FROM THE STATE OF MARYLAND
Senator Cardin. First, Senator Carper, let me thank you
very much, not just for holding this hearing, but for your
leadership. You have devoted a good part of your career to the
issues of clean air. We are neighboring States and we share the
same challenges of being downwind. So I thank you very much for
your continued leadership in this area. You are making a
difference and I am proud to work with you on these issues.
I must say that I think it is a false dilemma to say that
you have to choose between jobs and good health and clean air.
I can tell you, in my own State of Maryland, we have created
jobs by implementing the toughest standards on clean air in the
region. I feel very fortunate to be a State where the power
companies take responsibility for their actions. It is time
that power companies around the Nation take responsibility for
their actions and stop blaming EPA for doing its job. I might
say if they used the millions of dollars they spend in fighting
these regulations, whether in the courts or in the agencies,
and use that to implement clean air technology, I think we
would be further along today.
In 2007, Maryland experienced, as a downwind State,
motivated the Maryland legislature and our Governor to take
firm and decisive action to reduce mercury, SOx and NOx
emissions in the State by implementing the toughest power plant
emission laws on the East Coast, and we created jobs in doing
that, Mr. Chairman, and we have a healthier environment. But it
is not enough. Using 2002 as a submissions baseline, the
Healthy Air Act has Maryland well on its way to reducing its
inState NOx emissions by 75 percent by 2012, after already
achieving an interim goal of a 70 percent reduction target for
NOx in 2009. SO2 emissions will be reduced by 80 percent this
year, with a second phase of controls in 2013 to achieve an 85
percent reduction of SO2 emissions.
Despite Maryland's success in reducing our emissions, as
you point out, Mr. Chairman, pollution from upwind States
prevents Maryland from reaching attainment under the Clean Air
Act. So we can do all this, but if we don't have a national
standard, we can't achieve the type of clean air necessary for
public health in Maryland.
On most bad air days, somewhere between 50 percent and 75
percent of Maryland's air pollution originates in upwind
States. This June, the Baltimore-Washington Metropolitan Area
experienced 22 moderate and unhealthy air days. More than 2
million Marylanders suffer from respiratory and cardiovascular
diseases like asthma, emphysema, and diabetes. Unhealthy air
days exacerbate the health problems of at-risk populations and
cost Americans billions of dollars in health care costs, loss
of wages due to illness triggered by air days that leads to
absences from work and school.
EPA's newly proposed Transport Rule is a step toward
addressing the persistent clean air issues the Mid-Atlantic and
Northeast States face. The rule's requirement for power plants
to finally install modern pollution control technology across
most of the eastern half of the United States is long overdue.
Baltimore City and Anne Arundel County, Maryland, are two
jurisdictions that are projected to have maintenance problems
even with the new Transport Rule in place. The new rule is an
important first step, but clearly there is more work that needs
to be done.
Fortunately, there are opportunities on the horizon to
achieve emission reductions needed to allow all States to
achieve attainment.
Mr. Chairman, I am committed to working with you, I am
committed to working with all the members of this Committee to
come up with the reasonable ways that we can address these
issues at the national level, make sure the tools are
available. But one thing I believe we can't compromise, and
that is clean air. The Clean Air Act is critically important
for the public health of this Nation. Air knows no geographical
boundaries. We need to work together. This Committee has the
primary jurisdiction and I hope that we will continue to find
ways in which we can help our industries comply with the Clean
Air Act.
I must tell you, to me this is about jobs, it is about
creating the type of economic growth in this Nation that will
allow us to have the job growth and healthy environment. We
should not have to make a choice between the two.
Senator Carper. Thanks very much for your statement. Thanks
for your kind words, and I look forward to working with you in
all this going forward.
All right, Senator Sessions. Good morning.
OPENING STATEMENT OF HON. JEFF SESSIONS,
U.S. SENATOR FROM THE STATE OF ALABAMA
Senator Sessions. Good morning. Thank you.
Mr. Chairman, since its enactment 40 years ago, I do truly
think it is incontestable that the Clean Air Act has produced a
much cleaner environment. In fact, over the past 30 years total
emissions of the six principal pollutants have been decreased
by 57 percent. EPA national emission estimates show that in
1980 there were 267 millions tons per year produced of these
emissions. That number has been decreased dramatically, to 107
million tons in 2009 and progress continues. And all of us on
the Committee want to ensure that we continue that progress,
and I believe that new restrictions can be effective and
reasonable on particularly pollutants like mercury that we have
had some good studies on in Alabama.
But I am concerned about the timing, cost, and manner of
several of EPA's new rules, as well as the cumulative impacts
of these regulations and rules on economic growth and
development in a time of our Country's economic stress.
This chart--maybe you can hold it back so the Chairman can
see too--is a chart produced by the American Legislative
Exchange of State Legislators showing how these regulations are
coming forward in ever-increasing numbers and having
cumulatively a significant impact on American competitiveness
economically throughout the world. So I thank you, Jeff, for
that.
I think it indicates that the complaints I am hearing in
record numbers from people all over my State about excessive
new regulations are valid. There seems to be a train wreck of
regulations and rules coming out of EPA. The ratepayers will be
the ones who pay the cost. The increased cost of energy could
drive companies away from the United States and harm our
economy's ability to rebound from the recent recession. During
this time of high unemployment, 9.1 percent, we really need to
be looking at ways to produce cleaner, cheaper energy, not
driving up costs.
There is no doubt. Those of us who have been involved in
economic development know one of the most important questions
businesses ask about where they are going to site a new plant
and create jobs is how much the energy costs are. We have got
to consider that as we go forward, so I would like to raise
four concerns at the hearing today.
First, EPA issued the Transport Rule after the court cited
concerns with the trading provision of the Bush
administration's Clean Air Rule. However, instead of simply
correcting those deficiencies, the EPA went much further than
was required by the courts and now has decided to impose new
requirements. In addition, regarding the Utility MACT Rule, the
EPA had originally decided to impose new restrictions on
mercury emissions from power plants, but after executing an
agreement with an environmental group, the have decided to
cover all hazardous pollutants, changing the nature of that
review.
Second, I am concerned about the deadlines for compliance
with the Transport Rule and the Utility MACT Rule. Too fast a
change can impose unnecessary costs. I am concerned about the
cumulative impacts and costs from all the rules together and
what impact that would have on job losses and increased
electricity rates. One estimate is that increases in
electricity rates of over 20 percent will occur. This is a tax,
really. The articulate Larry Kudlow keeps talking about when
you get a drop in energy prices, you get a tax cut, and an
increase is a tax increase. It is the kind of thing you can't
avoid, you have to pay, and paying more for the same amount of
energy is the equivalent of a tax increase.
Finally, I want to be sure that EPA is listening to
concerns of the regulated industry concerning the accuracy of
the data that they rely on. I continually hear that EPA has
incorrect data and incorrect calculations. I want to be sure
that they constantly are willing to ensure that they are
accurate in the assumptions they make when they impose new
rules.
Thank you, Mr. Chairman.
Senator Carper. You bet. Thank you, Senator Sessions.
Senator Lautenberg, thanks for joining us.
OPENING STATEMENT OF HON. FRANK R. LAUTENBERG,
U.S. SENATOR FROM THE STATE OF NEW JERSEY
Senator Lautenberg. Thanks, Mr. Chairman, for your
leadership on these issues. I think they rank among the primary
concerns that all of us have.
We face a funny dilemma that says, well, you can choose
between extending life, and I heard the Senator from Alabama
very clearly talk about the benefits that we have gotten from
the Clean Air Act, and I am a living example of what has
happened with longevity in our society. So that has improved,
and I would like it to continue, if that is not too selfish.
But there we are. We see positive results. And I don't
understand why it is that we can't do what we have to do in the
economy as well as for people's health.
Mr. Chairman, I ask that a letter to the Wall Street
Journal dated December 2010 from eight utilities that says we
are OK with EPA's new air quality regulations, and these are
outstanding companies, including Exelon and PSE&G in my State,
other well known companies, and they say it is OK. So we know
that the health of our children depends not only on what we do,
but also on what our neighbors do, and that is why so many of
us have worked so hard to keep second-hand smoke out of
children's lungs. Yet, when the emissions from a power plant in
one State threaten the citizens of another, too often little or
nothing is done about it, and we can't make any mistakes.
Pollution doesn't recognize State boundaries. Dirty air
blows into New Jersey from many other areas as well, including
States in the Midwest, where companies continue to build taller
smoke stacks that shield local residents from health risks, but
put others in danger. The Environmental Protection Agency is
attempting to correct this problem by cutting power plant
emission from 31 upwind States. This could slash sulfur
pollution in half and save as many as 36,000 lives a year. I
don't know how you put a numerical value on that, but it has to
be pretty high.
Power plants are also a major source of air toxics like
dioxins, which can cause birth defects; lead, which damages
nervous systems and reduces children's intelligence levels; and
arsenic, which causes cancer. One of the worst of these air
toxics is mercury. Brain poison for children. Mercury can
seriously damage a child's kidney, liver, and nervous system.
Pregnant women who are exposed to high levels of mercury are
also very vulnerable. And there are newborns; they experience
brain damage, learning disabilities, and hearing loss. So we
don't discover these things until a much later period of time.
The EPA wants to cut the emissions of air toxics like
mercury by as much as 90 percent and I would like them to do
it. The proposed rule has been in the making since 1990, when
both parties came together to pass the Clean Air Act amendment.
But now big polluters and their friends in Congress are
stalling, claiming it is going to cost businesses too much
money to comply, and I believe it is nonsense. EPA simply wants
to hold all companies to the standards used at the cleanest
plants, which have shown that they can succeed by investing in
clean technology.
To our colleagues who claim these measures will be too
costly to businesses, we have to ask what about the health cost
of breathing dirty air? How do you put a price on human life?
EPA's proposed pollution control measures are now more than a
decade overdue and children a paying a price while industry and
its lawyers and lobbyists create delays. The bottom line is
rules and regulations aren't making our children sick;
pollution is making our children sick. And we have to do a heck
of a lot more to protect kids from dangerous of dirty air.
My oldest grandchild, 17 years old, has asthma and we know
what happens with him when the polluted air is heavy. My
daughter, when she takes him to play sports, he is pretty
athletic, she first looks for an emergency clinic to make sure
that, if he starts wheezing, she can get him there on time,
because in our family my sister, who was asthmatic, tried to
get to her car where she had her respirator, from a school
board meeting and she didn't make it out of the parking lot,
collapsed, and died 3 days later from asthma.
So when we have a chance to do something to keep people
healthy, keep them alive, then why look at the dark side? Look
at the positive side.
I look forward to hearing our witnesses about how we can
work together to ensure all Americans have clean, safe air to
breathe, and I thank you, Mr. Chairman.
Senator Carper. Mr. Lautenberg, thank you for sharing that
with us.
The first panel is going to be one witness. On the second
panel we have several witnesses who are going to be testifying.
Senator Cornyn has been good enough to come by to introduce
one of his own, the Chairman of the Texas Commission on
Environmental Quality, Bryan Shaw. Senator Cornyn, you are
recognized at this time. Welcome.
OPENING STATEMENT OF HON. JOHN CORNYN,
U.S. SENATOR FROM THE STATE OF TEXAS
Senator Cornyn. Well, Mr. Chairman, thank you very much. I
appreciate your courtesy. I could only imagine if the Golden
Rule were applied by the Senate and Congress in Washington on a
daily basis, I can't help but think this would be a better
place to work and we would do a better job representing our
constituents. But I appreciate Senator Barrasso and Senator
Inhofe making a formal request for me to participate as though
I were a member of the panel, but as you and I discussed when
you were kind enough to come by my office yesterday, I think my
concerns are going to be adequately expressed by this
statement, and I know the panel members will ask further
questions that will elucidate the matters that I thought needed
covering.
But I want to be here particularly to welcome the Chairman
of the Texas Council on Environmental Quality, Dr. Bryan Shaw,
and to speak on behalf of Texas, who may be significantly
impacted by the Clean Air Transport Rule. I appreciate the
opportunity to speak and I know Dr Shaw will address several
issues concerning EPA's action on the second panel, but I want
to focus my limited time on reports that EPA is planning to
sweep Texas into the final CATR sulfur dioxide program without
due process. And what I mean by due process, I mean simply
notice and the opportunity to be heard, a matter of fundamental
fairness, which I believe, if Texas will be swept into this
rule, will be denied.
I hope this worst kept secret in town proves to be wrong,
or, if it is right, that it is appropriately reconsidered. This
anticipated inclusion was brought to my attention recently, and
I have serious concerns regarding the legality of this action
and the projected harm it will do to electricity producers and
consumers and job creators in my home State. I agree with the
panel that we all want clean air and clean water. We also need
to consider, I don't think it is unreasonable to consider the
impact on consumers who are already suffering from high
gasoline prices, high food prices, and, many places, high
unemployment. So I think it is important to consider all of
those factors in determining the cost-benefit of any rule.
By way of background, the EPA did propose to include Texas
in the CATR nitrogen oxides program, but Texas was not one of
the 28 States EPA proposed to include in the CATR SO2 program.
While EPA did request comments on the hypothetical future
emissions as a basis for potentially including Texas in the SO2
annual standard program, it is critical that the EPA never
altered its original position excluding Texas or proposal for
comment in SO2 emissions budget for Texas or specified any
other type of SO2 requirement, despite issuing three
supplemental notices regarding aspects of the proposed CATR
rule since it was originally published.
My understanding is that if included in the CATR annual
program, the State of Texas will be required to reduce its SO2
emissions by around 45 percent in just 6 months. Forty-five
percent in 6 months, due to several incorrect assumptions about
the State's ability to comply in that period of time. EPA
assumes that most Texas power plants have or will immediately
stop using Texas lignite as fuel and that dramatic reductions
can be achieved with existing and currently planned pollution
controls, or fuel switching, without a significant impact on
the Texas economy and on Texas consumers.
Yet, a diverse group of stakeholders, including union
workers, chemical companies, investor-owned utilities,
municipally owned utilities, and others, have expressed
significant concerns that compliance costs will require
significant capital investment estimated at about $1 billion.
Jobs will be lost due to closures and drastic reductions in
plant operations, and between 7,000 and 13,000 megawatts of
generation would be immediately be at risk in the State, and
the loss of generation would drastically reduce our power
grid's reverse margin.
Earlier this week we had a hot day, and that won't surprise
you, in Texas and the Electricity Reliability Council of Texas,
or ERCOT, issued an energy emergency alert level 1 for power
reserves falling to less than 2300 megawatts. If reserves fall
to less than 1750 megawatts, power loads can be interrupted.
This is only the beginning of the summer, and the EPA's
anticipated rules will force significant base load to shut down
and reserve margins to dip down even further. If we have an
unplanned significant outage due to a storm or other unforeseen
event, many people in Texas could end up without power and air
conditioning on some of the hottest days of the year.
And I would just point out that last week, when I was in
Austin, I was startled by the news that Amarillo, Texas, in the
northern part of Texas, usually a little cooler than the rest
of the State, had temperatures at 111 degrees. So that is a
threat to health and life like some of the other factors that
Senator Lautenberg and others have mentioned.
Any inclusion of Texas in CATR's SO2 program should be done
with a full and open process in compliance with the
Administrative Procedures Act. I believe to include Texas
without notice and an opportunity to be heard would be a
violation of that law. Instead, stakeholders have had to rely
on tidbits from those inside the agency about the fate of our
State. This, if it is true, would be an abuse of power. Every
State deserves to know what is being asked of it and the
opportunity to comment on proposed emission reduction budgets
and other requirements that will impact the lives of its
citizens. This rule will impact the elderly and children who
depend on air conditioning at their homes in a hot summer, and
the livelihoods of millions of hardworking Texas.
My home State has created 37 percent of new jobs in this
Country in the last year. In fact, the one thing I hear over
and over again is the enormous strain that the uncertainty of
regulation is having on job creators not just in my State, but
around the Country.
If EPA believes that Texas should be included in CATR's
annual program, it should demonstrate that inclusion is
necessary, that it is justified, and that it is beneficial
through a transparent process. I know the Administration has
heard from Democrats, this is not a partisan issue, heard from
Democrats, Republicans, members in labor and management, and
other job creators in the State. I am hopeful that the EPA will
reconsider including Texas in the final rule without due
process. The stakes are too high to forego adequate process for
the citizens of our State and, frankly, we deserve better from
the Federal Government and the EPA.
So thank you very much, Mr. Chairman, for allowing me to
make this statement, and I want to thank you for allowing me to
welcome Chairman Shaw for coming here, and I hope you will
enjoy his testimony. Thank you so much.
Senator Carper. Thank you, Senator Cornyn. Good to see you.
Thank you for the introduction.
With that, I think we will turn to our first panel, a one-
woman show. We welcome Gina McCarthy back for this panel. Gina
McCarthy is the Assistant Administrator for the Office of Air
and Radiation at the U.S. Environmental Protection Agency. She
has served in that capacity now for just over 2 years.
Ms. McCarthy, you will have 5 minutes to deliver your
opening statement. The full content of your written statement
will be included in the record, and then we would like to ask
some questions of you . But you are recognized at this time.
Welcome. It is great to have you here. Thank you.
STATEMENT OF HON. GINA MCCARTHY, ASSISTANT ADMINISTRATOR FOR
THE OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION
AGENCY
Ms. McCarthy. Good morning, Chairman Carper, Ranking Member
Barrasso, and members of the Subcommittee. I really appreciate
the opportunity to testify on the need to reduce harmful air
pollution from power plants.
It is time to start cleaning up. That is what the
Administrator told the Edison Electric Institute. The
Administrator discussed the need to begin investing now to
reduce emissions of sulfur dioxide, nitrogen oxides, and
mercury from power plants. But it wasn't Administrator Jackson;
that was Administrator Leavitt, who made those statements more
than 7 years ago.
As acknowledged by the title of this hearing, we are not
the first administration to recognize the need to clean up
power plants and to issue rules to address that need.
Over the years, many power plants have invested in modern
pollution control equipment to reduce their emissions and to
help provide healthier air to all our citizens. Many other
power plants, however, have simply not made those investments.
Effective technologies for controlling SOx, NOx, and
mercury emissions from power plants have been available for
more than 30 years, yet a substantial portion of the coal fleet
lacks these advanced pollution control equipment. For example,
although SO2 scrubbers have been available for 35 years, well
over a third of the coal capacity has yet to apply them. Many
of these uncontrolled units are small and were built before the
Clean Air Act was enacted more than 40 years ago.
Electric power plants today are the Country's largest
source of SO2 and mercury and the largest stationary source of
NOx. These plants cause smog and fine particle pollution, acid
rain, and exposure to mercury and other toxic pollutants which
contribute significantly to a wide variety of public health and
environmental problems. At recent air pollution levels,
exposure to fine particles from all types of sources, including
power plants, is believed to still cause between 130,000 and
320,000 premature deaths each and every year, while smog
exposure prematurely ends the lives of an additional 4700
Americans.
The Bush administration recognized the need to clean up
power plants and issued two rules to do so, the Clean Air
InterState Rule and the Clean Air Mercury Rule. The Court of
Appeals, however, held that these rules did not meet the Clean
Air Act requirements and they told EPA to redo them.
To replace these two overturned rules, we will soon be
issuing two rules, the Clean Air Transport Rule, which we are
talking about today, as well as finalize the Mercury and Air
Toxic Standards in November.
We are not pursuing these rules, however, just because the
Clean Air Act requires it and because the courts told us we had
to do it. We are pursuing these rules because they will
dramatically improve public health. They are affordable and
they are technologically achievable.
The Clean Air Transport Rule is designed to help States
achieve the health-based ambient air quality standards for both
smog and soot. It will require reductions in power plant
emissions in NOx and SO2 in the middle and eastern portions of
the Country.
We have also proposed the Mercury and Air Toxics Standards
to control emissions of toxic air pollutants from power plants.
The Transport Rule and the Mercury Air Toxics Standards are
projected to avoid tens of thousands of premature deaths, heart
attacks, cases of acute bronchitis, hospital and emergency room
department visits, as well as hundreds of thousands of cases of
aggravated asthma and millions of days when people will miss
work or school each and every year.
Some in industry are calling us to move quickly, even more
quickly than they are proposing on these rules. The Clean
Energy Group recently said needed regulatory certainty will
result from EPA's timely implementation of regulations
consistent with the Clean Air Act, which is in the best
interests of the electricity industry, the market, and
customers.
Over the last 40 years, the Clean Air Act has provided a
success story of which all Americans can and should be proud.
Key air pollutants are down more than 60 percent, while our
economy has grown by over 200 percent. Each dollar we have
spent cleaning up the air has given us more than $30 in
benefits. And the investments in the cleaner energy sector
required by these standards will keep people working and it
will create jobs.
The Clean Air Transport Rule and Mercury Air Toxics
Standards are continuing the successful history of the Clean
Air Act and EPA's implementation of it.
Thank you very much.
[The prepared statement of Ms. McCarthy follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Thank you, Ms. McCarthy.
Before we get started with questions, I want to ask
unanimous consent to place into the record two letters to me
from the Institute of Clean Air Companies and the American
Federation of Labor that State that labor availability will in
no way constrain industry from complying with the proposed
Transport Rule or Air Toxics Rule.
I also ask unanimous consent to place into the record a
letter to EPA Administrator Lisa Jackson from Ms. Angela Davis,
mother from Pennsylvania. She writes in support of the Air
Toxics Rule and tells her terrible story of losing her 17 year
old son Cameron to asthma.
If there is no objection, those will be made a part of the
record.
[The referenced documents follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Ms. McCarthy, again, thank you for your
testimony and for your service. I just want to start off by
saying you have the opportunity here, not only Senator Cornyn's
introduction for his Commissioner from Texas, but also to make
some additional comments. Anything that you want to say just in
response to some of Senator Cornyn's comments?
Ms. McCarthy. I would appreciate the opportunity and again,
Senator, thank you for your leadership on these issues.
We have looked extensively and we have met with the company
and we have spoken on the Texas issues and their concerns
related to the Transport Rule. Let me point out just a few
things. One is that the process that we used, the public
process we used related to the Transport Rule thoroughly
addressed both the legal requirements under the Act to look at
the air pollutants that Texas is contributing to their downwind
neighbors. We also did extensive modeling to show what the most
cost-effective emissions could be achieved in Texas
commensurate with what we believe to be the significant
contribution to downwind States.
We are very confident that we not only met our legal
obligation, but we also met the spirit of the law. We actually
identified and sought comments on including Texas for the
variety of pollutants that we were looking at. We actually
received comments from both TCEQ, as well as the regulated
community that talked in detail----
Senator Carper. Comments from what? What was the acronym
you used?
Ms. McCarthy. TCEQ. That is the Texas----
Senator Carper. Council on Environmental Quality?
Ms. McCarthy. I am sorry.
Mr. Shaw. Commission on Environmental Quality.
Ms. McCarthy. Commission on Environmental Quality, TCEQ.
Thank you very much.
Senator Carper. Thank you.
Ms. McCarthy. That was their Chairman, Bryan Shaw.
Senator Carper. Oh, OK.
Ms. McCarthy. And we firmly believe that we have met not
only our legal obligation, but we are basically--the State and
the regulated community provided great comments, and we know
they understand and we will consider those comments in the
final.
Senator Carper. All right, thanks. Thanks for saying that.
Could you take a moment to discuss with us how the Transport
Rule, that is, the one replacing the Clean Air InterState Rule,
tries to ensure that we are all better neighbors when it comes
to air pollution?
Ms. McCarthy. Yes. I believe that--I don't cover this too
much--you are more than familiar with the Clean Air InterState
Rule, but it was a rule that intended to address the clean
neighbor provisions in the Clean Air Act, in other words, that
downwind States shouldn't have to suffer the air pollution from
upwind States that are causing them to be out of air quality
attainment, have bad air quality, or to continue to achieve
that air quality through maintenance operations.
The Clean Air InterState Rule and the Clean Air Mercury
Rule were found by the courts to be failing in terms of meeting
the obligations of the Clean Air Act. The courts told us that
they would remand it back to the agency, but we needed to be
expeditious in terms of replacing those rules with rules that
would meet the test of the Clean Air Act and the courts.
Senator Carper. When can we see a final Transport Rule from
EPA? I am hoping it is going to be soon.
Ms. McCarthy. Next week.
Senator Carper. Next week. All right. That is pretty soon.
Ms. McCarthy. That is soon.
Senator Carper. Monday? Probably not Monday.
Ms. McCarthy. Actually, I will go off over the weekend and
will contemplate it, Senator, but it will be middle of the week
next week.
Senator Carper. Thank you.
Ms. McCarthy. And thank you for your patience.
Senator Carper. Sure. A couple of my colleagues talked to
you about how important energy costs are in driving economic
development or job creation in certain States. As Governor, I
worked for 8 years on economic development and job creation. I
loved it and still do. I describe myself as a recovering
Governor.
And there are any number of factors that companies consider
when they are deciding whether to create jobs, put up shop in a
particular area of a State, grow jobs or not grow jobs. They
look at schools, they look at quality of schools; they look at
access to decisionmakers; they look at look at regulations,
whether or not the regulations use common sense; they look at
access to transportation; they look at crime. They look at all
kinds of stuff. They also look at energy costs, and some of
them look at a lot of energy costs, and a lot of them look at
health care costs, given how much health care costs are.
And, for me, one of the things that drives me crazy is that
we have to compete with States that have lower--for jobs, we
have to compete with other States for jobs where they burn
dirty fuel, they put out a lot of air pollution, they get
cheap, in some cases, coal-created electricity. It is cheap for
them and they send the pollution over to us, and then we have
to take special safeguards that drive up our energy costs to
compensate for the cheap energy costs that our neighbors have.
And, on top of that, we end up with more air pollution in our
State from their State and it drives up our health care costs.
That is just not fair. That is just not fair. Do you have any
comment on that?
Ms. McCarthy. Senator, I would agree with you. The Clean
Air Act actually intended that when national ambient air
quality standards were changed, that this upwind issue, this
interState transport of pollution would be addressed. It simply
hasn't been effectively addressed. It has caused an economic
disparity, where some States that are the receivers of this
pollution have to spend much more money to take a look at eking
out pollution reductions that in upwind States would be much
cheaper to produce for the American public.
And it is a level playing field issue, it is a good
neighbor issue, it is a fairness and equity issue, and it is
time that we took action and moved these rules forward that
will provide everybody equal opportunity for clean air. I have
worked in States, as you have lived in, where I believe that we
could shut the entire State down and still not produce the
clean air that our citizens are looking for. That has to
change.
Senator Carper. Thank you. In 1998, the agency, EPA,
completed a report to Congress on the health impact of air
toxic emissions from utilities and whether utilities should be
regulated under the air toxics framework in the Clean Air Act.
Could you take maybe a minute, that is about what I have left,
and describe this report and the results? I am thinking the
report was due sometime like in 1993. Maybe you can clarify
that for us, if you would, please.
Ms. McCarthy. Yes. There were two reports that were
required in the 1990 Clean Air Act; one had to do with looking
at all of the health and science around the issues of mercury:
Is it a pollutant? Is it a pollutant that is posing significant
risk to public health and the environment? And the other was
specifically looking at the utilities as whether or not they
are a major contributor and should be regulated under the Clean
Air Act.
And those studies were completed in the end of 1997 and
1998; they underpinned the decision of the EPA that mercury is
a toxic constituent; it is a pollutant that threatens, in
particular, the health of our children; that it needed to be
addressed. It also verified that utilities are the major
stationary contributor toward the emissions of mercury in our
atmosphere.
And this decision led to an appropriate necessary decision
that said that utility mercury emissions and emissions of other
hazardous air pollutants should be regulated under the
provisions in which we are now moving forward to regulate it.
And without these there is no Federal standard to control toxic
emissions from this Country's largest stationary source of
emissions without this rule moving forward.
Senator Carper. All right, thank you. Thanks very much for
those responses.
Senator Sessions.
Senator Sessions. Thank you.
You do have a high responsibility, Ms. McCarthy, and I
understand that, but you would acknowledge that, for example,
with regard to mercury, President Bush's regulations would drop
the mercury emissions 70 percent. Now EPA wants to go to 90
percent. Do you know whether or not that extra 20 percent will
cost as much as the first 70? Don't we have an extra cost when
you reduce the emissions closer and closer to zero?
Ms. McCarthy. Senator, I appreciate the question, and EPA
looks very closely at both the costs and the benefits. The
benefits and cost ratio for the Mercury Air Toxics Rule is
going to be very significantly leaning toward many more
benefits as opposed to cost.
Senator Sessions. Well, we have a number of challenges. On
how we achieve those we can disagree. I know the Chairman
shares a belief that nuclear power can be one of our clean
energy sources. Natural gas is cleaner. But both of those
sources--cleaner than coal. Both of those sources are under
environmental attack and it is hard to move forward with them
in a way that would economically make sense for America, it
seems to me.
What is the compliance deadline for the Transport Rule and
the Utility MACT? Are those deadlines mandated by courts, are
they your deadlines, and is there any opportunity to seek
compliance or delays in order to reasonably transition?
Ms. McCarthy. The statutory deadline for the rules related
to MACT, which is our Toxics Standards, are a 3-year window for
compliance. States usually, and often, give a 1-year extra
window, which we would encourage in this rule, and we are
encouraging. That is a 4-year window in order to comply with
the rules from the date of the rule becoming effective.
Senator Sessions. And when would those likely be?
Ms. McCarthy. We are intending to complete the rule in
November of this year, which means the compliance window would
be November 2014 or 2015, depending upon whether the State
gives that extra year.
Senator Sessions. I have learned that some of the EPA
proposed Transport Rule was based on incorrect data and
assumptions. Are you aware of any of those problems and are you
committed to ensuring that the data you actually base a
decision on is accurate?
Ms. McCarthy. We are certainly openly and we will be
reviewing all of the comments and will consider those in the
final. EPA has no interest in basing its decisions on
inaccurate or incomplete data and we believe that we will have
the data sufficient to make this decision.
Senator Sessions. With regard to ozone, we have made some
real progress in ozone reduction; the standards have gone from
125 parts per billion to 75 today. The first drop was to 85,
and then 85 to 75. And now I understand you are considering
ozone standards as low as 60 parts per billion. But one of the
things that is troubling about this to me is the alteration of
the normal standard of evaluation of ozone, the 5-year review
process.
In other words, the last reduction went from 85 to 75. That
is a 13 or so percent reduction. The previous one was from 125
to 85, a 33 percent. But as you get that number lower, there is
a lot of naturally occurring ozone and it is harder to get each
percentage below, I think you would recognize. So EPA's
reconsideration of the 2008 ozone determination is occurring
outside the normal 5-year window, or at least inside it; it is
about 2 years or 3 years instead of the 5-years.
How do you justify that? Don't you think that a rational
policy would be a gradual, sustained, reasonable reduction of
ozone?
Ms. McCarthy. Senator, we are moving forward the 5-year
review of ozone, but when Administrator Jackson came into
office, we were facing litigation requiring the prior
administration's decision to make a determination that 75 ppb
was the appropriate level for ozone. That was outside of the
range of science-based information that the Clean Air Science
Advisory Committee recommended to the agency at that time. The
Administrator decided that rather than litigate, she would work
with the litigants to put that litigation on hold; she would
revisit the science. She didn't believe that the decision that
the Bush administration was actually commensurate with the
science at the time it was made; it was in conflict with the
recommendations of the Clean Air Science Advisory Committee,
and she was appropriate, rather than to defend that standard
and to move forward with it, to reconsider that, and that
decision will be made at the end of July.
Senator Sessions. It is a very significant matter, and
numbers I am seeing are that it costs as much as $90 billion.
And we have to ask ourselves whether the path we are on, a
steady reduction, closer and closer to situations in which
certain days naturally occurring in the summer in my State get
close to 60 parts per billion, I am told, naturally. So I don't
know exactly what that figure is and the appropriate number is,
but I do believe that you are accelerating that beyond what was
expected and it is going to have a great cost and is causing
some concern.
Mr. Chairman, I think Senator Barrasso will be back
shortly, and I thank you for the opportunity to----
Senator Carper. Should we wait for him? What do you think?
Senator Sessions [continuing]. to ask these questions.
Senator Carper. All right. You bet. Thanks.
Senator Sessions raised questions, justifiably so, about
the cost of implementation of these regulations and one of the
things that you may recall that Senator Alexander and I worked
on for years is legislation that would step down over time
emissions of sulfur dioxide, nitrogen oxide, and mercury; and
our goal for mercury was to reduce emissions by as much as 90
percent. I think we asked for and got a GAO study that showed
mercury reductions can be obtained at that level for as low as,
I think, $0.10 a month for families who use electricity, and I
would ask unanimous consent to submit that EPA study for the
record.
Senator Sessions. I would be glad to see that. Thank you.
Senator Carper. Sure.
[The referenced document follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. All right, Senator Lautenberg.
Senator Lautenberg. Thanks, Mr. Chairman. We have this
debate going on here about whether or not things that will
improve health are affordable, and I mentioned before the Wall
Street Journal article, a letter to the editor written by eight
companies, including Public Service Electric & Gas, Calpine
Corporation, National Grid USA, Exelon, Austin Energy Texas
Company, that says we are OK with EPA's new air quality
regulation; and it goes on to suggest that plants are retiring
old plants because of EPA's regulations fails to recognize that
the lower power prices and depressed demand are the primary
retirement drivers.
Contrary to the complaints by the claims that EPA's agenda
will have negative economic consequences, our companies, they
say, experience complying with air quality regulation
demonstrates that regulations can yield important economic
benefits, including job creation, while maintaining
reliability. How do we ignore that evidence, I can't quite
comprehend.
Now, people in my State of New Jersey are suffering because
a coal-fired plant just across the river in Pennsylvania is
pumping dangerous levels of sulfur dioxide into the air. It is
the Portland Generating Station in Pennsylvania, located just
across the Delaware River from New Jersey, and is the primary
source of sulfur dioxide pollution in several New Jersey
counties. In fact, the Portland Generating Station in
Pennsylvania emits more sulfur pollution than all of the power
plants in New Jersey combined.
So we have this problem. Emissions from the plants are
causing some New Jersey counties to exceed Federal limits for
sulfur dioxide that causes serious breathing problems for
children, the elderly, and people with asthma. EPA has proposed
reducing sulfur pollution from the plants by more than 80
percent.
Ms. McCarthy, when will EPA finalize the rule and offer
some relief to those people in New Jersey who are breathing
that polluted air?
Ms. McCarthy. First of all, Senator, I hope you are proud
of your State of New Jersey; they did a wonderful job on the
petition and the data that they presented. We have been working
closely with them. As you know, we have proposed some control
strategies, a Federal implementation plan to address these
pollutants from that particular facility. We have finished the
comment period, we have finished the hearings, and we will be
issuing that final decision this summer.
Senator Lautenberg. This summer?
Ms. McCarthy. Actually, end of summer, potentially
September. But we are moving forward. We want it to be
defensible and we think you have made a very strong case.
Senator Lautenberg. Terrific. Earlier this week OMB
released a report that found EPA rules had cost polluters
roughly $25 billion, while providing as much as $550 billion in
public benefits over the last decade. Should we expect this
pattern of modest cost to polluters, large benefits to the
public to continue if EPA follows through on the rulemakings
you have had in the works?
Ms. McCarthy. Senator, EPA has had 40 years of history in
doing exactly what you suggest, which is to find the most cost-
effective ways to achieve the greatest amount of public health
benefit. What the OMB study showed is that we are still on
track, as we have been for 40 years. We are going to maintain
that track record. And the Clean Air Transport Rule that you
are talking about today is exactly the same rule with high
benefits, low costs. The Mercury Rule is the same. So we are
proud of these and they will continue in the course that we
have set for the Clean Air Act.
Senator Lautenberg. On balance, the benefits far exceed the
costs.
Ms. McCarthy. They do, on a balance of 30 to 1, sir.
Senator Lautenberg. The Clean Air Act requires EPA to issue
air toxic rules that force polluting facilities to operate as
cleanly as other companies in their industry that have already
invested in pollution controls. What message might it send the
companies that invested in technology to reduce the pollution
decades ago if we are going to delay those rules yet again?
Ms. McCarthy. I think the major concern and what you are
hearing from the Clean Energy Group is that for those who have
invested in clean energy, we are not allowing them to run their
units as they are available to run and, instead, basically
investing in the dirty ones by allowing them to make more
profits while the cleaner ones sit by. I think we need to
recognize the public health costs of that pollution and that
cost should be reflected in the way in which we meet our energy
obligations in this Country.
Senator Lautenberg. A former high-ranking EPA official who
left the agency during the Bush administration told the New
York Times that a decade-long delay in air toxic rules says,
``costs thousands of lives.'' Now, you recently put an end to
that delay by proposing limits on the largest sources of air
toxics, but polluting industries continue to lobby to prevent
these long-overdue rules. What would be the impact of further
delaying or weakening these rules in terms of illness and loss
of life? What might we expect?
Ms. McCarthy. The Mercury Air Toxics Rule alone would
reduce premature deaths by 17,000 every year. The Transport
Rule has equal size benefits, and actually even more. We are
talking about lives lost, work days lost. We are talking about
exacerbated asthma levels. We are talking about hospital and
emergency room visits. Those are real costs to American
workers, to American families, and to our children?
Senator Lautenberg. Thank you very much, Ms. McCarthy.
I have to say, Mr. Chairman, that the Massachusetts accent
lends charm to the facts that we are hearing, so well
delivered. Thank you, Ms. McCarthy.
Ms. McCarthy. Thanks, Senator.
Senator Carper. I knew it wasn't Mississippi, that's for
sure.
Maybe we will go another 2 minutes or so, and then we will
go to our newt panel.
Recently, American Electric Power, AEP, stated that they
are retiring, I believe, some 6,000 megawatts in the next
couple of years, and all these retirements are due to recent
clean air regulations proposed under your watch. However,
didn't AEP agree to retrofit or retire most of the megawatts in
question under consent decrees with former President Bush's
EPA? And is it your understanding that AEP's retirement
announcement includes facilities listed in past consent
decrees?
Ms. McCarthy. Many of the facilities that they indicated
would be retiring as a result of our rules have already been
under consent agreements. In fact, 20 of them were already
under consent agreements to retire or upgrade with proper
pollution control equipment.
In addition, as we all know, announcements have been made
that retirements are in the offing for some of these smaller,
inefficient; they simply can't compete in the market. So what
AEP was doing was confusing information by attributing market
conditions and their failure to comply with earlier required
reductions with the impacts of these rules.
Senator Carper. All right, thank you. Another question is
in testimony from an earlier hearing, a company mentioned that
they had several coal-fired units that are currently not being
scrubbed and, therefore, may have to close down or switch to
natural gas, if possible, due to the air toxics regulations.
Many of the sites in question were installed over 50 years ago,
over a half century ago. How efficient are these coal-fired
plants today if they are running on 50-year-old technology?
Ms. McCarthy. I would say, Senator, first, that these rules
seek the most cost-effective ways to make these reductions. Our
coal-fired power plants now are, on average, over 50 years old.
What we see is that those units are at least, the average, 20
percent efficient than the units that are constructed today,
and many of them are nearly 40 percent less efficient. They are
simply not competitive if they have to compete on a level
playing field. But those are market decisions. Our decisions
don't drive those retirements. Our decisions drive the
installation of cost-effective, available pollution control
equipments that save lives.
Senator Carper. Good. A third question, in the 1970 and
1990 Clean Air Act amendments, Congress delayed air control
requirements for older coal plants because apparently we
thought that most of the old plants would still retire. The
thought of investing in new technologies at a plant that
wouldn't be around much longer didn't really seem logical at
the time. But looking back, did many of these coal plants
actually retire? And what would you guess is the average age of
our coal fleet, any idea?
Ms. McCarthy. We did not see the retirements that the Clean
Air Act expected. We now have a coal fleet that, on average, is
over 50 years old. We see them being more inefficient than
current technologies and we see the availability of equipment
that can be installed that will help them reduce the pollution
that was expected under the Clean Air Act. So I would say that
what we are seeing now, though, is, with the change in the
market that inexpensive natural gas has brought to the table,
that you are seeing a change in the position of those, the
marketability of those units and the electricity they generate.
So many retirements are expected just simply as a result of
inexpensive natural gas, but that gives us the opportunity at
this point, frankly, to have an ability to bring cost-effective
reductions to the table.
However, I would also add that it will not reduce, and we
don't predict a significant number of retirements attributable
to these rules. We are talking about 10 gigawatts of coal
retirement. There are 300 gigawatts of coal retirement in the
system today and there is 1,000 gigawatts of electricity
generation today.
So we are talking about a small amount of retirements
attributable to this rule and the installation of pollution
control equipment in the vast majority of those larger units
that are necessary and functioning and competitive, and that is
going to produce the results that we are looking for that will
have such significant public health benefits without increasing
significantly electricity costs.
Senator Carper. OK. Thanks so much.
Senator Merkley, welcome. Good to see you.
Senator Merkley. Thank you very much, Mr. Chair. Good to be
here.
Thank you for your testimony. I wanted to ask for EPA's
perspective on coal plants that have agreed to a negotiated
shutdown but are now making or needing to make new investments
in pollution control technologies. Specifically, we have a
plant in Boardman, Oregon that has negotiated to shut down all
coal firing by 2020. But if they upgrade all their pollution
controls to meet the requirements, then they feel like they
need to keep the plant open longer in order to be able to
recoup the investment in those technologies.
Does EPA have any flexibility on specific pollution
reduction targets if it can also take into consideration a
State-negotiated and federally enforceable shutdown, especially
if that produces a better picture in terms of total emissions
reduction?
Ms. McCarthy. Senator, we are more than happy to sit down
with the folks who have negotiated the settlement and with
Boardman themselves. We think that the agreement that was
reached is quite remarkable. I think that you should be very
proud of them, their attitude in working with all of the
concerned citizens, as well as our regional EPA offices, and
coming up with this agreement, and we are more than happy to
look at what flexibilities are available to us on a one-on-one
basis to take a look at how we can accommodate this agreement
and ensure that they have certainty moving forward.
Senator Merkley. Thank you. I think that would be very
helpful. Thank you.
Thank you, Mr. Chair.
Senator Carper. You are welcome.
Senator Barrasso.
Senator Barrasso. Thank you, Mr. Chairman.
Ms. McCarthy, Senator Cornyn was here, had a couple of
questions. In the Clean Air Transport Rule proposal, EPA
excluded Texas from the SOx trading program, but now sources
say that Texas will be included in the final rule. All EPA did
in the proposal was, in a single sentence, asked for comment on
possibly including Texas. No specific program elements, such as
emission budgets, were provided for public review and comment,
as they were for every other State included in the trading
program. So obviously we have serious concerns that this
violates the Administrative Procedure Act. Is your position
otherwise?
Ms. McCarthy. My position is that Texas was in the CAIR
program, it had requirements and, as you know, the Transport
Rule is replacing the Clean Air InterState Rule. We did provide
sufficient notice that we had concerns about the significant
contribution of Texas. As you indicated, we sought comment on
that issue, which we are required to do under the law.
We will take a look at the comments we received, but I will
tell you that in our record, when that is released with the
Transport Rule as it is released next week, you will see that
the regulated community, as well as the State, did not miss
that sentence; they actually understood the implications. They
provided significant comment and we will make our decision on
the basis of that comment and sound data that we have available
to understand the significant contribution that the State of
Texas might make to their downwind States.
Senator Barrasso. This EPA appears to be rushing to issue
as many new rules and regulations as it possibly can, and it
seems to be making critical mistakes in the analysis that can
have huge impacts on the recovery of our economy. For example,
the Texas Commission on Environmental Quality points to a
number of careless errors in an analysis EPA did provide in
support of its Clean Air Transport Rule, hypothetical
assumption about future Texas emissions. At a plant EPA
predicted to have an increase of more than 15,000 tons per year
in SOx, there actually is an enforceable cap on emissions that
reduces the emissions by more than 27,000 tons per year.
In light of these and other discrepancies, how is it that
the EPA's last minute addition of Texas is not just arbitrary
and capricious when EPA attempts to base a regulatory program
not on what is actually happening, but on flawed data and
mistake-ridden predictions about future emission levels that
don't exist?
Ms. McCarthy. Senator, I would say that we do not believe
that we are rushing to judgment or we will produce a rule that
is based on inaccurate data. We are not rushing; it has been 20
years delay in terms of bringing this rule in addressing the
issues associated with interState pollution. We are not rushing
to judgment. We will take a look at the data that is available
to us and we will make a sound decision, and that decision will
be based on quality data and sound analysis.
Senator Barrasso. So do you dispute the Texas Commission on
Environmental Quality's pointing out the careless errors in the
analysis that the EPA provided in support of your rule in terms
of assumptions that were made?
Ms. McCarthy. I do believe that every rule is a challenge
in terms of getting every number right, and we take that
challenge very seriously. There was an error that was pointed
out to us very early in the process on one computation that had
to do with a small amount of information that had no impact in
terms of the outcome of the decisionmaking for the regulated
community. We took public responsibility for that. We put a
notice out; we correct that very early in the process. I do not
believe that there are substantive data problems in either the
proposal, and we certainly, though, will look at the comments
we have received, and if TCEQ and others point out issues, we
will look at those thoroughly and address them in the final
rule.
Senator Barrasso. Well, thank you for admitting that there
was an error in that, and I know that Texas is going to go on
to continue to address this with you, as will I.
You have often referenced EPA's report of the benefits and
costs of the Clean Air Act from 1990 to 2020 as justification
for saying that today's EPA regulations will provide trillions
in benefits. In congressional testimony before the House Energy
and Commerce Committee on March 24th, you stated, EPA can't
monetize all of the benefits from recent Clean Air Act
regulations. To the extent we can, however, you said, study
indicates that the Clean Air Act will provide $2 trillion in
benefits in 2020, over $30 in benefits for every dollar spent.
The EPA relies upon their own cost-benefit analysis of the
Clean Air Act when they cite this up to $2 trillion in annual
economic benefits by 2020. Are you saying that in the absence
of air quality regulations, that gross domestic product in 2020
would then only be $18 trillion because of the $2 trillion that
you are taking under account?
Ms. McCarthy. Actually, EPA doesn't believe that gross
domestic product is an appropriate measure of the economic
success of the rules that we are doing and the cost-benefits.
The only thing I would tell you, Senator, is that the study
that I was quoting on cost effectiveness of our rules and the
kind of benefits we bring to the American public versus cost
was actually a study that was first envisioned by the
legislature.
It was heavily peer-reviewed by a body that the legislature
asked us to create that has expert panels. It went through
rigorous peer review process. So when you say it was an EPA
cost-benefit study, everything that underpinned that rule went
through scientific rigorous review by professionals in the
field and it is done in accordance with the best economic
practices. So while we filled the data in, it was done
absolutely with everybody's view and peer review, and we
believe it is one of the most credible analytical reports that
you will see today in terms of the cost-benefits of any
rulemaking.
Senator Barrasso. Clearly, the Country is very concerned
about the economy, 9.1 percent unemployment, getting that under
control, getting people back to work, and we need to understand
the true costs and benefits of the regulations coming out of
your agency, but other agencies as well. So could you please
explain why the total benefits in EPA's study are based on
public surveys of how much people are willing to pay to avoid
slightly greater health risks and not more focused on economic
considerations such as the GDP and employment, which I think is
key to getting people back to work?
Ms. McCarthy. I think that the idea of using GDP as a
measure of economic success is fine in the economic world, but
we actually put a value on human life. There needs to be people
out there working in jobs, getting to their jobs, sending their
kids to school. What we have done in the IRAs, in the analysis
of the Mercury and Air Toxics Rule is done a specific cost-
benefit analysis that is not based on a survey or projections
of what someone might want to pay, but actual economic analysis
of the costs and benefits associated with this rule; and when
we do that we see costs of $10.9 billion in 2015, as opposed to
benefits of $59 billion to $140 billion. That is a credible
cost-benefit analysis.
Senator Barrasso. Mr. Chair, my time has expired. I have
some additional questions that perhaps I could submit those for
the record and get a written response.
Senator Carper. OK. Sounds great.
Senator Barrasso. Thank you, Mr. Chairman.
Senator Carper. Thanks so much.
I think that's it. Senator Merkley, anything else?
Senator Merkley. Thank you, Mr. Chair. Since I used only
about 30 seconds of my time, I would like to do one followup
here, which is just to observe that recently a bipartisan
delegation of Senators took a trip to China, 10 of us led by
the majority leader, and what I was tremendously struck by was
that virtually every conversation we had with a diplomat had
some element of the health impact of the air in China on his or
her family. We had one diplomat talking about the fact that----
Senator Carper. Chinese diplomats?
Senator Merkley. American diplomats.
Senator Carper. OK.
Senator Merkley. American diplomats saying that they could
only keep their family in the country for 2 years because of
the advice of their physicians about the impact on the long-
term health of their family. We had another diplomat saying
that the children were all affected by China cough, which
apparently is the term now used by the persistent cough, as if
you were a smoker.
And it took me by back, in a way, to being in Southern
California, in LA, before the full impact to clean up the air
in LA, where your eyes stung and your lungs were irritated, and
I just want to say that I think Americans understand that there
is just an enormous value to our quality of life to take
pollutants out of the air, and thus the widespread support for
clean air. It does have value and we appreciate having an
agency that is recognizing that the environment and the economy
are not at war together; they can be in partnership to make a
better America for all.
Senator Carper. Thanks for that statement.
Ms. McCarthy, you are now excused. Thank you so much. Our
colleagues have 2 weeks to ask some additional questions, and
if someone does I would just ask that you respond promptly.
But, again, we appreciate your presence, your testimony, your
responses, and your service. We look forward to seeing you
soon. Thank you.
Ms. McCarthy. Thank you.
Senator Carper. As our next panel comes to the witness
table, I would observe I think we know, we realize we need
electricity in this Country. Quality of life, if we didn't have
it, frankly, it wouldn't be very good. And we generate
electricity from a lot of different sources. Close to 50
percent of our electricity comes from coal, another 20 percent
comes from nuclear. I would like to personally see that go up a
little bit. We generate a fair amount of electricity from
natural gas-fired power plants and I think we are going to see
that continue to rise. Some comes from hydro. My hope is we
will be generating some electricity off the East Coast here,
including off Rehoboth Beach in a couple of years, about 12
miles out. But we all realize that we need electricity.
We also need to be fair in the way that we generate that
electricity, so that States that are generating electricity for
their own use, for their own people, for their own businesses
don't disadvantage other States that happen to be downwind from
them. And that is what we are trying to get out and trying to
do it in a way that is cost-effective and uses some common
sense.
Someone who is pretty good at using common sense is our
lead off witness here, and his name is Collin O'Mara. He has
been our Secretary of Natural Resources and Environmental
Protection for the State of Delaware, starting, I think, he was
nominated by Jack Markell, Governor, when Jack was, I think,
about 29 years old. I kid with him back home; if I had half his
energy, I would be both president and vice president. This guy
is a dynamo and just a great server to the people of Delaware.
He is also currently the Chairman of the Ozone Transport
Commission and is instrumental in making Delaware a leader in
the global clean energy economy.
We have Bryan Shaw. Bryan has been introduced also by John
Cornyn, but he is the Chairman of the Texas Commission on
Environmental Quality. Welcome, sir. Very nice to see you, Dr.
Shaw.
Sue Tierney, Managing Principal of the Analysis Group,
Incorporated. Ms. Tierney, great to see you. Thank you for
coming.
Barbara Walz, who is the Senior Vice President for Policy
and Environment, Tri-State Generation and Transmission
Incorporated. Welcome.
And Mr. David Carpenter, who is the Director of the
Institute of Health and Environment at the State University of
New York at Albany.
Our oldest son, Christopher, is going to go to work for a
company that actually makes, part of their business model is to
take the concept of the cleanest, most affordable form of
energy is the energy we never use, a company called Honeywell.
Actually, a big part of their business model is based on that
and our son is going to be going to work next Monday, a week
from Monday in that part of the business and is going to be
living and working out of Albany, so you will have a new
neighbor there, a new Carper to join the Carpenters. Welcome,
Dr. Carpenter.
Secretary, I want to welcome you and thank you for your
time. Your testimony will be made part of the record and we
will ask you to use about 5 minutes to do that. I understand
you are under the gun to get to your next engagement back in
Delaware, so we will try to be mindful of your time. Please
proceed.
STATEMENT OF COLLIN P. O'MARA, SECRETARY, DEPARTMENT OF NATURAL
RESOURCES AND ENVIRONMENTAL CONTROL FOR THE STATE OF DELAWARE
Mr. O'Mara. Chairman Carper, Ranking Member Barrasso, thank
you very much for the opportunity to be with you today. Before
I testify to the broader transport challenges, I would first
like to address the Utilities Toxics Rule just briefly.
We believe the toxics rule proposed by EPA on May 3d to set
emissions standards for hazardous air pollution from coal and
oil electrical utility steam generating units will produce
significant and cost-effective public health benefits. We also
believe this is well overdue. The proposed emission standard is
much superior to the existing CAMR trading approach.
Since 2009, Delaware has actually already required that
every coal-fired unit in the State, you control its mercury
emissions by at least 90 percent. We develop our standards in
consultation with industry. Our experience has demonstrates
that controlling toxic metals like mercury on a unit-by-unit
basis is both cost-effective and technologically feasible.
While there are several coal units in Delaware that are
scheduled for shutdown, existing units ranging from 90
megawatts to 400 megawatts in size were all able to achieve
these reductions in a cost-effective and timely manner. We
adopted this approach because we do not believe it is proper to
allow emissions trading or averaging of neurotoxins when cost-
effective and site-specific reductions are possible.
A strong complimentary Transport Rule would make the
incremental lift necessary to meet the goals and requirements
of the Toxics Rule much smaller. For example, acid gas
emissions are eliminated with any level of scrubbing technology
for sulfur dioxide, so we can actually achieve multi-pollutant
reductions at the same time if we do these policies in tandem.
Regarding the Transport Rule itself, as Senator Carper said
earlier, Delaware's air quality challenge is caused by both
local emissions and emissions from upwind sources. In Delaware,
as much as 90 percent, that is 90 percent of our non-attainment
problem comes from out-of-State sources; and, as a result, we
face significant public health consequences, including higher
than average rates of respiratory illness, lung disease, and
asthma.
Primarily due to this pollution transported into our State,
all of Delaware is currently designated as non-attainment, or
out of compliance with the 8-hour ozone National Ambient Air
Quality Standards, the NAAQS. Our most populace county, New
Castle County, up north, is designated non-attainment for
particulate matter as well.
Up to now, Delaware has been able to offset the inadequate
mitigation of transport by requiring additional control of its
local sources above and beyond most States. Delaware has
adopted numerous measures to meet the legal requirements of the
Clean Air Act, including multi-pollutant regulations,
transportation conformity, multiple rounds of control
technology reviews, plus a myriad of other regional measures
like paint regulations, gas cans, and other consumer products.
And these have resulted in significant mitigation of Delaware's
local emissions and improvements in air quality.
However, as we put together our plans to meet the new 75
parts per billions or lower standards, there are virtually no
cost-effective pollution reduction options remaining for the
State. In fact, our modeling shows, as you said earlier, that
we could eliminate all stationary sources in the State of
Delaware and still not achieve attainment under the likely new
standard.
For this reason, it is absolutely imperative that we find
ways to reduce pollution from upwind sources that continue to
impair air quality in Delaware and much of the ozone transport
region. While ozone transport regions, as Senator Cardin said,
of adopting most of the stringent and costly standards in the
Nation and significantly reduced emissions, highly cost-
effective emission reductions in upwind States continue to be
possible even after the implementation of some reductions
through the NOx and CAIR. Delaware and other downwind States
have been a force to adopt more costly control measures to a
large extent because of the Federal failure to fully mitigate
transport.
This inequity in regulatory requirements has significant
consequences and has contributed to relatively higher regional
energy costs for OTR States compared to our counterparts, while
EGUs and upwind States remain able to offer lower cost
electricity which is generated by virtually unregulated units.
This imbalance allows the upwind States to enjoy a competitive
advantage for economic development while the downwind States
are suffering more and more every day. This is particularly
true in the recruitment and retention of manufacturing firms,
which are heavily dependent on energy pricing. The downwind
States are forced to deal with the consequences, both
economically and environmentally, of irresponsible activities
upwind.
In addition, these new upwind industries themselves are
actually contributing to the problem even more because they are
subject to less stringent standards, which means more direct
and indirect emissions will then come our way. This is a double
whammy, so to speak, for the OTR States because they face both
a competitive disadvantage economically from the increased
energy costs in our States compared to the other States, as
well as greater public health costs and environmental costs due
to the lack of regulatory equity. We must address this growing
inequity through this new Transport Rule; it is a matter of
fundamental fairness.
For Delaware to have any chance of shedding its status as
the tailpipe of the Nation and reducing local pollution levels
to comply with the new NAAQS, as required by the Clean Air Act
legally, we will need a strong Federal commitment to achieving
significant reductions through a much more comprehensive and
timely approach than any of the rules that have been proposed
or adopted to date. This is a regional challenge and, as such,
requires a truly regional solution. We propose a handful of
steps that will significantly improve air quality, and we would
be happy to discuss those during the question session.
I thank you for this opportunity to testify before you. I
thank you, Senator Carper, for your incredible leadership on
air quality issues and look forward to working with you to make
sure to make sure that all Delawareans can breathe deeply and
have good public health outcomes. Thank you, sir.
[The prepared statement of Mr. O'Mara follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Thanks so much for your leadership. It is
great to be your partner. Thank you.
Dr. Shaw, welcome. We are delighted to see you. What part
of Texas are you from?
Mr. Shaw. I live in Austin at this time. I grew up in West
Texas, though.
STATEMENT OF CHAIRMAN BRYAN W. SHAW, PH.D., TEXAS COMMISSION ON
ENVIRONMENTAL QUALITY
Mr. Shaw. Thank you, Chairman Carper and Ranking Member
Barrasso. I think he stepped out, but thank you for the
opportunity to address this Committee and to address not only
what are some very important issues from the standpoint of the
particular actions in place today that we are discussing, but
also to shine some light on a larger issue of some issues or
some actions that EPA has taken that have been focused largely
on Texas, but have implications broadly.
EPA has tended to move away from following clearly the
direction that the Federal Clean Air Act and direction from
Congress would require in making certain that the relationship
between State and Federal Government, that is, the State
regulatory agencies and the Federal EPA, follows what is
envisioned by the Clean Air Act and also to adhere to the
directives that this Congress has directed through the Clean
Air Act, the Clean Water Act, and others. And specifically I
want to address what has happened with regard to the Clean Air
Transport Rule and looking at the issues there.
One, I want to say that my State, fortunately, is not one
that contributes to those challenges in the northeast. We
certainly do, and I certainly do support the fact that the
Clean Air Act requires States to address through the rulemaking
process to address interState transport, and that failing
States' ability to avoid impact on those non-attainment areas
outside of their State, that it would be appropriate for this
action to take place through the action such as the Clean Air
Transport Rule.
However, the problems that I want to discuss largely today
discuss with the errors in the methodology that was used, the
errors in the data that were used to come to the conclusions,
and the unintended impacts that these will foretell.
I started talking about some of the EPA actions and their
impact on Texas. I want to briefly discuss that in light of
what happened with the Flexible Permit Program in Texas. EPA
has denied that permitting program after about 13 years of
existence, and in that process EPA failed to follow the Clean
Air Act requirements and, in fact, they were forced by a
lawsuit to make a decision. They are supposed to make decisions
within 18 months of a SIP approval or SIP submittal, and did
not do that until 13 years later, when forced to do so. And in
their Clean Air Federal Register notice having to designate why
the Flexible Permit Program failed to meet Federal
requirements, they were forced to address what those
deficiencies were. We followed up and addressed and expressed
that those deficiencies were unfounded.
We also agreed to an expedited rulemaking process to
clarify and ensure that not only did we meet those
requirements, but that we would continue to meet them going
forward; and, unfortunately, EPA changed their view of the
relationship between State and Federal Government and indicated
that they were not interested in pursuing that further, that
even though they no longer were arguing verbally that it didn't
meet Federal requirements, they then generated another
requirement that they failed to provide notice for and, more
importantly, indicated that they don't like or don't want the
Flexible Permit Program going forward, which I think signaled a
dramatic change in the State-Federal relations, which impacts
these other regulations as well.
We have seen similar failure to allow meaningful public
input through the greenhouse gas tailoring rule, whereby EPA
unilaterally changed the definition in the tailoring rule such
that States no longer had the opportunity to address their
State implementation plans for greenhouse gases, but, instead,
EPA dictated that greenhouse gases would be regulated January
2011.
With regard to how that applies to the Clean Air Transport
Rule and the MACT Standards, EPA has again avoided public
participation, meaningful public participation, and I think the
key there is the definition. While EPA asserts that they did
indeed ask for comment on inclusion of Texas a Group 2 State,
having failed to include information about the adequacy of SO2
budgets, the new unit set-asides, and the variability limits,
those key components to what a regulation would mean, brings
into serious question how meaningful that input was, on top of
the fact that there were several errors associated with the
data collection and the analysis that suggests that there are
other potential errors and that the benefits and requirements
they highlight are unlikely to occur.
Not only do they have that, but if you do look at the data
they have, EPA's own data suggests and indicate that Texas
would not have an impact from PM 2.5 because of the existing
levels of emissions. In fact, only if you follow through with
their scenario of what could and might happen if the cost of
high sulfur coal decreases and low sulfur coal increases, and
Texas somehow able to change the infrastructure necessary, go
through the rigorous permitting process, which is very
demanding and a great daunting task, that somehow we might
increase our SO2 emissions. There were other discussions
earlier that there are emissions reductions that are in place
that EPA failed to take into account. So there is great concern
that not only are those benefits not there, but that the data
to lead to those conclusions were wrong and based on a faulty
scenario.
As you look at the EPA's efforts to include the ozone
deployment of the Clean Air Transport Rule as well, the only
State that is tied to Texas is New Orleans, Baton Rouge,
Louisiana, and the data shows that Texas does not exceed the
levels--I will finish up, sir--and also that area is no longer
non-attainment. So it appears that there is no justification
for continuing inclusion of Texas in either the PM2.5 or ozone
portion of the Clean Air Transport Rule.
And I am happy to answer questions if time permits.
[The prepared statement of Mr. Shaw follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Thanks so much, Dr. Shaw.
Ms. Tierney, please proceed.
STATEMENT OF SUE TIERNEY, MANAGING PRINCIPAL, ANALYSIS GROUP,
INC.
Ms. Tierney. Thank you, Chairman Carper and Ranking Member
Barrasso. Thank you very much for this opportunity to come and
speak to you. I have looked at these issues for 20 years,
during which time I was both a utility commissioner in
Massachusetts, a regulator, and Secretary for the Environment,
and was an original member of the Ozone Transport Commission.
I thought I would look at the question of whether or not
these regulations relating to mercury, air toxics, and sulfur
dioxide and nitrogen oxide are achievable so that Americans can
have both clean air and public health issues, as well as
reliable electricity supplies. And I think very strongly the
answer is yes. Six reasons I want to give you today, and they
are amplified in my written testimony.
One, the industry has a tremendously successful track
record in its mission of providing reliable supply. There are
no circumstances under which there is a situation where the
utilities have allowed a shutdown of a plant for a reason,
including clean air, where there were going to be reliability
considerations.
No. 2, the regulations, as we have heard today, are not a
surprise; they have been in the works for many, many years, and
the technologies that are available in the marketplace are
achievable, they are feasible, and many utilities and electric
companies have considerable options in what to put in place to
comply.
No. 3, many plants are ready to respond. As we have heard,
many States have already moved forward on strict mercury
regulations. There are court orders in place that bring about
the kinds of changes we are likely to see. We have already
talked this morning about the regulations that have affected
American Electric Power. But, additionally, the CEOs of many of
the largest coal-owning fleets indicate that they are ready to
comply with these rules, and those include Excel, Duke, Florida
Power & Light, Wisconsin Energy, Edison, PP&L, NRG, and TVA,
one of the Nation's largest owners of coal plants.
Additionally, the low gas prices that we are enjoying in
the United States have not only lowered prices of electricity
for American consumers in the last few years, but they are
putting pressure on coal plants to retire. We have heard this
morning about the number of older, inefficient, and
uncontrolled units that operate very rarely, and those are
likely to move to retirement.
No. 4, the studies. There have been so many studies in the
last year on whether or not this set of regulations are
achievable by the industry. Many of those studies were
performed prior to the time when EPA had actually issued its
proposed regulations. Now that we see that there is more
flexibility, the range of pessimistic estimates of retirements
are too large. The more reasonable ones indicate that these are
manageable impacts.
No. 5, industry and its regulators have a very robust set
of tools to respond. The system planning organizations, the
grid operators, the transmission organizations do plans. States
require utilities in many parts of the Country to do integrated
resource plans. The wholesale markets in a third of the Country
are very vibrant. We are seeing plants under construction
totaling 42 gigawatts as of today. We are seeing plants in
advanced states of development and permitting, almost 30
gigawatts on top of that.
So there is a very strong, vibrant marketplace. States are
getting prepared. One can avoid some of the costs, as you just
said, Mr. Chairman, through energy efficiency, and many of the
States with the lowest prices for electricity and heavy
reliance on coal actually have the largest opportunity for
energy efficiency and saving customer bills.
Finally, there is very clear market evidence that this is
doable. I already mentioned that CEOs have been reporting to
investments, according to SEC rules that require them to
comment truthfully on their ability to comply. AEP and Duke,
which are part of the PJM interconnection system in the Midwest
and Mid-Atlantic area, have indicated that by 2014 and 2015,
when the rules go into effect, they will be ready. And the PJM
auction for making sure that they have enough power supply in
that time period in the future came forward with many more
offers for both energy efficiency, demand response, and new
generation that would enable the region to comply adequately.
So I want to say with confidence that these regulations are
doable and Americans don't have to choose between clean air and
public health on the one hand and affordable electricity and
reliable electricity on the other. Thank you.
[The prepared statement of Ms. Tierney follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. That was exactly, exactly 5 minutes.
Normally, when witnesses do that well, we give them an extra 15
minutes to talk about anything they want.
[Laughter.]
Senator Carper. Since lunch is bearing down on us, we will
forgo. That was great.
Barbara Walz, welcome. Good to see you. Thank you for
joining us.
STATEMENT OF BARBARA WALZ, SENIOR VICE PRESIDENT POLICY AND
ENVIRONMENTAL, TRI-STATE GENERATION AND TRANSMISSION
ASSOCIATION, INC.
Ms. Walz. Thank you. Chairman Carper, Ranking Member
Barrasso, it is good to be here with you today, and it is
particularly good to be here with you, Senator Barrasso, as you
have been a great friend to the co-op world.
My name is Barbara Walz, and I am Tri-State Generation and
Transmission Association's Senior Vice President for Policy and
Environmental. I hold a bachelor's degree in chemical
engineering and a master's in environmental management.
Tri-State is a not-for-profit member owned rural electric
cooperative based in Colorado. Tri-State is committed to
maintain high environmental standards while providing reliable
cost-based wholesale electricity to our 44 not-for-profit
member systems that serve 1.5 million rural customers in
Wyoming, Nebraska, New Mexico, and Colorado.
To meet our member energy needs, Tri-State generates or
purchases power produced by hydropower, solar, wind, coal, and
natural gas sources. We recently integrated 50 megawatts of
wind and 30 megawatts of solar into our generation mix.
Renewables now constitute about 16 percent of our generation
needs. The bulk of our power comes from coal-based power plants
in Wyoming, Colorado, Arizona, and New Mexico. These plants are
an important part of the rural communities in which they
reside. For example, the Craig Plant in Colorado and the coal
mines that supply it employ 750 people near a town of 10,000
and provides $73 million in wages. The plant is also an
important tax base to Moffat County, paying $9 million in taxes
each year.
Tri-State's generating facilities all have state-of-the-art
emission controls. These plants were primarily built from 1978
through 1983 and were equipped with controls well before the
1990 Clean Air Act came into place. We have scrubbers on our
facilities that remove more than 90 percent of the sulfur
dioxide and bag houses that remove up to 99 percent of the
particulate matter. These controls also result in a co-benefit
mercury emission reduction ranging from 65 to 95 percent.
Even with all of these advanced environmental controls,
Tri-State cannot meet the proposed Utility MACT emission
limits. Significant additional controls will be required and
will result in higher electricity costs for our co-op
consumers. In addition, the Utility MACT emission limits for
new units are set at such low levels that it will be impossible
to construct and operate new coal facilities, even with the
most technologically advanced controls.
Tri-State currently operates in compliance with mercury
regulations in Colorado and New Mexico. These regulations were
negotiated in good faith with State agencies and environmental
groups.
In the Clean Air Act amendments of 1990, Congress treated
electricities different than other industries. The law required
EPA to conduct a study of the hazards to public health that
were reasonably anticipated to occur as a result of emissions.
The study was completed in 1998 and found that mercury
emissions were of greatest concern. Given this determination,
Tri-State believes that EPA's authority is limited to regulate
only mercury at this time.
Particulate matter is already regulated through the
National Ambient Air Quality Standards. Added particulate
matter standards included in the MACT will require Tri-State to
install additional controls at a cost of hundreds of millions
of dollars. These costs will be passed on to our rural electric
co-op consumers. Particulate matter should not be regulated
under this MACT rule.
The EPA cost-benefit analysis found that 90 percent of the
benefits of the rule are based on the reduction of particulate
matter. If this rule is finalized as proposed, it will be
nearly impossible to meet the time lines for installation of
controls by 2014. Utilities need time to design, permit, and
construct retrofit control equipment. There are a limited
number of qualified vendors who have limited skilled labor to
take on these technical projects. And because rural electric
cooperatives are small business, when the deadlines come, co-
ops are not going to be able to get the qualified labor needed
to get the job done because vendors will be bidding on the
bigger jobs of our friends in the investor-owned utility
community.
Tri-State supports and is committed to good environmental
regulations, including full implementation of the 1990 Clean
Air Act, but we firmly believe that the Utility MACT Rule goes
beyond EPA authority and over-regulates coal plants. What
Assistant Administrator McCarthy is saying utilities need to do
Tri-State did 30 years ago, and we have those controls in place
today and they still do not meet the Utility MACT Standard.
Thank you for inviting me to testify here today, and I
would be happy to take any questions.
[The prepared statement of Ms. Walz follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Thanks, Ms. Walz. Thanks so much.
Dr. Carpenter, welcome. Please proceed.
STATEMENT OF DAVID O. CARPENTER, M.D., DIRECTOR, INSTITUTE FOR
HEALTH AND ENVIRONMENT, UNIVERSITY OF ALBANY
Dr. Carpenter. Senators Carper and Barrasso, I thank you
for the opportunity to testify before this Subcommittee on
clean air and nuclear safety. I am a public health physician
and the former Dean of the School of Public Health at the
University at Albany, and, as you know, public health is that
part of the medical profession that is concerned with
prevention, rather than treatment, of disease. I strongly
support the new regulations and changes in the Clean Air
InterState Rule and Clean Air Mercury Rule. These changes, once
implemented, will significantly reduce morbidity and mortality
of U.S. citizens, especially those living downwind of coal-
fired power plants.
There is overwhelming scientific evidence that exposure to
current levels of major air pollutants causes serious disease
and death of thousands of Americans. The risk of sudden death
due to respiratory or cardiovascular failure is dramatically
elevated in older persons on days when concentrations of these
pollutants are elevated.
Air pollutants cause asthma attacks both in children and
adults, and increase the risk of respiratory infections.
Particulate air pollution contains cancer-causing polyaeromatic
hydrocarbons and metals such as arsenic, chromium, and nickel
that are known human carcinogens. Consequently, chronic
exposure to particulate air pollution increases the risk of
lung and other cancers.
The detailed scientific evidence for these statements is
contained in my written testimony.
Let me tell you of studies that I and my colleagues have
recently completed. In New York, we have an excellent data base
that reports to the State Health Department all of the diseases
diagnosed in patients when they are discharged from the
hospital. We have this information on hospitalization for about
2.5 million New Yorkers each year from 1993 to 2008, with
information on age, sex, race, and zip code of residence.
We have compared rates of hospitalization for various
respiratory diseases in New Yorkers who live in a zip code that
contains a fossil fuel-fired power plant, not just coal, as
compared to those that live in a zip code that does not contain
such a power plant. We find that living in a zip code that
contains a power plant is associated with 11 percent greater
frequency of hospitalization for asthma, a 15 percent greater
rate of hospitalization for respiratory infection such as
pneumonia, and a 17 percent greater rate of hospitalization for
chronic obstructive pulmonary disease.
These increases rates reflect only the contribution of
power plants, not the total air pollution contribution,
because, unlike emissions from motor vehicles, power plants are
stationary. In addition, these data do not reflect illnesses
that do not lead to hospitalization, nor the transport of
contaminants into Connecticut, Massachusetts, and Vermont.
Implementation of these changed rules will also
significantly reduce releases of metals that are known to be
carcinogenic and of mercury, a very dangerous metal that is
converted into methylmercury in bodies of water. Methylmercury
bio accumulates in fish and, as a consequence, many fish from
inland lakes and streams, as well as the oceans, are now unsafe
to eat, especially by children and women of reproductive age.
Methylmercury, like lead, is a neurotoxicant. The National
Academy of Sciences concluded in 2000 that methylmercury causes
irreversible reduction of IQ in children exposed before birth
to the methylmercury in their mother's body.
Further results indicate that between 8 and 10 percent of
U.S. women of reproductive age contain levels of methylmercury
in their body as a result of eating fish that poses harm to
their unborn child. The majority of this mercury comes from
releases from coal-fired power plants, and these releases make
fish, an otherwise healthy food, unsafe to eat.
Coal-fired power plants produce more hazardous air
pollution in the United States than any other industrial
source. The Clean Air Act requires control of hazardous air
pollutants from coal-fired power plants, but absent these new
rules no national standards exist to limit these pollutants
from these plants. In the U.S. there are more than 400 coal-
fired power plants located in 46 States across the Country, and
they release in excess of 386,000 tons of hazardous air
pollutants into the atmosphere each year. Hazardous air
pollutants are known to cause sudden death from cardiovascular
and respiratory disease and also cause cancer.
It is the responsibility of all of us to protect the health
of the public, and especially the health of the unborn and of
children. Implementation of these rules, which reduce air
pollutants coming from power plants will help significantly to
reduce the burden of disease and the death of the public.
Thank you very much for the opportunity to testify.
[The prepared statement of Dr. Carpenter follows:]
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Senator Carper. You were right on the money too.
Senator Barrasso, we don't see this every day.
Senator Barrasso. No, we don't.
Senator Carper. It is pretty impressive.
Secretary, I was mentioning to Senator Barrasso today is
also June 13th, the last legislative day, the last day of the
Fiscal Year for a bunch of States. In Dover, Delaware, this is
really a big day for Governors and secretaries of the Natural
Resource and Environmental Control. The legislature convenes at
2 this afternoon and I know there is a Governor back there who
would like to have his Secretary by his side, so I am going to
ask a question or two of Secretary O'Mara, and I said to
Senator Barrasso if he has any questions to ask of you, to feel
free. I think he is not going to, but at that point in time you
would be excused to return in your personal helicopter. No, not
really. We wish. They used to say to me when I was Governor, do
you have your plane? I said, no, we have a glider in Delaware.
All we need.
[Laughter.]
Senator Carper. Secretary, a couple of questions, if I
could, then you will be excused. Do I understand you and Dr.
Shaw are contemporaries from your respective States? Is that
pretty much it?
Mr. O'Mara. Absolutely.
Senator Carper. Have you all met before?
Mr. O'Mara. No, not before.
Senator Carper. Well, good. Secretary O'Mara, before you
go, would you just comment on some of Dr. Shaw's concerns with
EPA's rulemaking process that he has expressed?
Mr. O'Mara. I think one of the challenges that we do face
is that, as you said in your opening remarks, that pollution
doesn't really know State boundaries. So we need to have good
science driving and look at what the attainment area should be.
I obviously can't speak to the mechanics of what was noticed
and what wasn't and the specifics, but I do think that adopting
a regional approach to address a regional problem is absolutely
critical, and having the science drive that.
One of the things that I didn't mention in my comments was
having broader non-attainment areas make a lot of sense and
just making sure that those boundaries are broad enough to
actually be able to resolve the challenge. So while I can't
speak to some of the mechanics of the administrative process, I
generally agree that we need to make sure that we are looking
beyond our State borders for reductions that improve the
quality of life for folks in every individual State.
Senator Carper. All right. Another question for you, if I
could. Two of the witnesses on this panel believe that the
emissions standards for the Transport Rule and the Air Toxics
Rule are too tight and said it would need more time. Could you
just take maybe a minute or two to highlight your experiences
with our own regulations in Delaware and how companies have
been able to respond to tighter emission standards?
Mr. O'Mara. In many ways Delaware is a great example of a
real test case, rather than a theoretical model or some kind of
abstract hypothesis because, like many other States, to achieve
our air quality attainment plan, our SIP goals, we really
needed to do everything we possibly could to reduce emissions
in State. So we have had a very strong mercury rule in place
for several years, and companies in our State found they were
able to, through a fairly cost-effective carbon injection
technology, go from 70, 80, 90 percent emission reductions for
mercury.
Senator Carper. Does that kind of thing cost hundreds of
millions of dollars to have that kind of technology?
Mr. O'Mara. It is in the millions, but in the lower part.
Senator Carper. OK, thank you.
Mr. O'Mara. And these are investments they believe they can
recoup very quickly in the capacity markets and other types of
investments in the PJM grade, of which Delaware is a part.
Senator Carper. But do they find that they had confined in
the work force people, tradesmen and women who could actually
do the work, or is it hard to find them?
Mr. O'Mara. No, absolutely, because one of the--there is a
series of improvements being made right now in the largest coal
unit in Delaware, and under your leadership we were able to
make that successful, about $300 million worth of improvements
to actually put four or 500 tradesmen to work that are working
right now that actually weren't employed otherwise because of
other changes in the broader economy. So we found a good supply
of skilled labor and actually the cost for implementation was a
little lower because of that competition.
Senator Carper. OK. Good. Thanks. One quick followup. Under
the Clean Air Act States have few tools available to them to
hold upwind States accountable. What if we took away these
tools from the States and just had one standard that stood
forever for utilities? How could that affect a State more like
ours, or like New Jersey or Rhode Island, or some of the other
States that are represented here, Maryland?
Mr. O'Mara. We fundamentally agree that the work that you
have been working on in the multi-pollutant regulation of
having some national standards, it is critical to have a
baseline, a floor, if you will, of consistently. At the same
time, we do believe that the States should have some
flexibility to go above and beyond that floor. In many cases
there are local factors that do require and that States will
want to address, smaller cancer causes, more localized
problems.
So we would love to see a national floor that had a
rigorous base to make sure that there aren't these massive
transport issues, while still giving the States some
flexibility to address key issues that might be specific to
their individual State.
Senator Carper. OK.
Senator Barrasso, any questions of Secretary O'Mara?
Senator Barrasso. No. Thank you, Mr. Secretary.
Senator Carper. Do you think he is a keeper? What do you
think?
Senator Barrasso. The people of Delaware are fortunate to
have both of you.
Senator Carper. Oh, you are nice to say that. I would say
you are least half right, with respect to him. Thank you,
Senator.
OK, Secretary O'Mara, good luck. Tell the Governor I said
good luck. Go get them.
Mr. O'Mara. We will give everybody your best in Dover.
Senator Carper. Please do.
Let me yield now, if I could, to Senator Barrasso.
Senator Barrasso. Thank you, Mr. Chairman.
Ms. Walz, it is my understanding Tri-State owns about 24
percent in Basin Electric, which in turn owns the Laramie River
Station Power Plant, and it is the largest employer in the
Wheatland area, about 300 well paid people, great benefits,
good salaries, good jobs, and the taxes paid to the county, to
Platte County, are over half of the county's budget.
What happens to a town, Wheatland, a county like Platte
County, and it is not just them, hundreds of communities around
the Country, if a power plant has to close because of a
combination of EPA regulations? What happens to kids? What
happens to the seniors in the small towns in terms of the
school district, emergency services, police, fire services?
What are the impacts when EPA regulations force the closure of
a power plant?
Ms. Walz. Senator, in my opinion, I will use the example of
Laramie River Station. It is a very critical aspect for the
town of Wheatland. It employs a large number of people with
good paying jobs, good benefits, takes care of family, keeps
produces and services flowing in the community. Basically, I
think if the power plant there had to close, it would be
devastating to that community. I would say significant people
would have to move either out of the area, out of the State,
and find other opportunities because it is a critical key
aspect to the town of Wheatland, and similar to other rural
communities where we have power plant locations.
Senator Barrasso. In your written testimony you stated
that, ``Because we are a not-for-profit cooperative that is
ultimately owned by our consumers, these new compliance costs
are going to be passed on directly to cooperative member owners
in the form of higher rates.'' Please describe for me and for
the Committee how the cooperative member, who they are? Are
they wealthy CEOs? Are we talking about Wall Street financiers?
And will the folks at home feel the impact of higher costs?
Ms. Walz. Yes, Senator. A cooperative is an electric
utility owned by the residents in the communities. You have to
be in a rural area to be considered a rural electric
cooperative. So essentially the people that get the end-use
electricity are farmers, ranchers, small businessmen in the
small towns. Basically, in the event, again, rates were
increased because of costs associated with these controls, all
of those costs are passed on directly to those end-use
customers. It is different than investor-owned, where you have
shareholders and others to absorb the costs.
Additionally, they are absorbing more costs. An example I
can give you for that is if you look at one mile of
transmission line and you look at a cooperative across the
Country, basically you have five consumers per one mile of
transmission line. In Wyoming, it is actually 2.8 consumers, so
even less population there.
Where you have an investor-owned utility, you have about 37
people that are served by one mile. That one mile of
transmission line still has the same costs associated with it
not only for capital investment, for operation and maintenance;
and that is just the transmission line side. If you look at the
generation stations and the cost of additional controls
associated with that and you invest $100 million into a
community where you only serving a much, much smaller
population than like a Chicago or even a Denver, obviously the
costs are more significant for those rural folks; they have a
larger share, if that makes sense.
Senator Barrasso. Do you feel the EPA really understands
how rural co-ops operate, how they work, compared to company-
owned?
Ms. Walz. It has been my experience that we routinely have
to explain the differences on both the Federal and State level,
that I do not think they understand fundamentally the
differences.
Senator Barrasso. Dr. Shaw, in your testimony you said we
question whether it is appropriate for EPA to establish energy
policy for the Country. Could you elaborate a little bit
further on this point and where this issue could be handled
better?
Mr. Shaw. Sure. Clearly, the Clean Air Act gives certain
authority to EPA, and specifically their intent is to derive
the standards and programs to address those environmental
issues. It appears in this rulemaking that EPA is more intent
on changing what the energy fuel makeup of the Nation is
through a misapplication, if you will, of the section of the
Clean Air Act that they are using to justify this. A great deal
of the concerns I have are exactly with that. EPA doesn't seem
to be addressing those requirements for justifying the health-
based concerns associated with the emissions; instead, it is
looking at more trying to assert a different policy using this
as a tool.
Senator Barrasso. Thank you.
Thank you, Mr. Chairman.
Senator Carper. You are welcome.
Two last questions, then I am all done.
Dr. Carpenter, if I could ask a question of you. In
Chairman Shaw's testimony he questions the scientific knowledge
that we have on health effects of mercury exposure. However, in
Texas alone, where I used to live, I was a naval flight officer
stationed at Corpus Christi, lived in Flour Bluff. The only guy
I ever talked to from Texas who knew where Flour Bluff was
George W. Bush.
However, in Texas alone, the Lone Star State has numerous
health advisories against eating mercury-laden fish in Texas
waters. Could you take a minute or two to give us a little more
detail on what we know about airborne mercury particles; how
they can get into our fish and how mercury exposure impacts
developing children's health? And are U.S. coal-fired power
plants a large source of that mercury, are they a significant
source, a small source? Finally, is the scientific data robust?
You will hear us say from time to time we need good
science; we need to work on good science. And when George
Voinovich was here, he chaired this Subcommittee, he and I
actually worked on a proposal to require somebody at a very
high level at EPA to be like their science I won't say czar or
czarina, but just somebody who was there to say we are using
good science, we are just dedicated and committed to good
science. So is the scientific data robust?
Dr. Carpenter. Let me start with the second question you
asked, which is what is the percentage of contribution from
coal-fired power plants, and the best evidence--and I think the
best evidence comes through reports of the National Academy of
Sciences, which has done extensive reports on the issue of
mercury--is that about 50 percent or a little more of the
mercury in fish in U.S. waters comes from coal-fired power
plants.
Senator Carper. A little more than half?
Dr. Carpenter. A little more than half.
Senator Carper. OK.
Dr. Carpenter. Now, mercury is a global pollutant. We get
some mercury from China, because when coal is burned, the
mercury goes into the air; it is the vapor phase of the
elemental mercury and it can be transported for long distances.
On the other hand, there is clear evidence, particularly
studies in Florida, where mercury releases from power plants
were dramatically decreased and mercury levels in local fish
followed over a period of time showed a dramatic reduction.
So while getting all the mercury out of the power plants
isn't going to solve all of the problem--everyone would agree
with that--it is going to solve the majority of the problem.
Now, is the evidence robust? The evidence is overwhelming.
Mercury causes a reduction in IQ of children born through the
mercury in their mother's body. It has been demonstrated in
countries around the world. Again, the National Academy of
Sciences reports are probably the most objective critical
reports in that regard, but there are hundreds of scientific
publications.
So I think it is simply not true that there is any question
about the science, nor any question about the impact. And what
we need here is the will to follow through and reduce the local
mercury releases, which are the majority albeit not all of the
problem.
Senator Carper. All right, thanks.
My final question would be of Ms. Tierney, if I could. We
had a hearing, Senator Brown of Massachusetts asked us to do a
field hearing up in Boston and we focused on an issue involving
Federal financial management up there, and there was a
Congressman named John Tierney who testified. I think he is
maybe from the Third District. Are you from Massachusetts?
Ms. Tierney. I am from Massachusetts. I am married to John
Tierney, but not that one.
[Laughter.]
Senator Carper. It is a small world, isn't it? OK. Well, in
your testimony--I wonder if the other John, Congressman John
Tierney is married to a woman named Sue. Wouldn't that be
something?
Ms. Tierney. They are just all over the place.
Senator Carper. They are. Up there they are.
In your testimony you State that reliability should not be
an issue with the implementation of the Transport Rule or the
Air Toxics Rule. However, in Chairman Dr. Shaw's testimony, he
mentions that the Electric Reliability Council of Texas
recently came out with a report contrary to your findings, I
believe, and I would just ask are you familiar with that report
and could you take a shot at explaining the differences, if
there are any, please?
Ms. Tierney. I would be happy to. ERCOT, which is the
Electric Reliability Council of Texas, very recently came out
with a study, having been asked by the Public Utility
Commission of Texas, to look at this question of whether the
clean air rules would be adversely affecting reliability in
Texas. The ERCOT analysts essentially ran a model of what the
system would look like with these new regulations in place,
with gas prices as they are today and expected to be in the
future, and a number of other assumptions.
The interesting results were that ERCOT did not believe
that coal plants would likely retire as a result of these
rules. They said that some of the oldest thermal gas-fired
power plants might retire and, if that were the case, ERCOT had
not really looked at the question of what would be in place to
replace them.
In Texas, which has one of the most vibrant markets for
power in the Country, there is a tremendous amount of market
interest and development of gas-fired power plants and wind
power plants. There are many in process at the moment, and one
of the interesting things that ERCOT discovered was that in
order to address some of those potential retirements of gas-
fired power plants in the Houston and Dallas-Fort Worth area,
that would enable--when those units would be replaced, that
would avoid transmission investment that would be required
otherwise in that area and there would actually be savings for
Texas consumers.
Senator Carper. All right, thank you.
Senator Barrasso, last questions? Any closing comment,
please.
Senator Barrasso. Yes, thank you, Mr. Chairman, for holding
this hearing.
Dr. Shaw, you said throughout your testimony the EPA rules
are not technologically feasible, that they won't work.
Assistant Administrator McCarthy was here earlier, testified in
the first panel, that effective technologies for controlling
emissions--mercury, NOx, SO2--from power plants ``have been
available for years.'' So what are you seeing that Assistant
Administrator McCarthy isn't seeing?
Mr. Shaw. Thank you. Certainly, while these rules have been
talked about for some time, what we are seeing more recently is
the advent of these controls that they are looking to putting
into a very tight timeframe. Some of what is missed in their
analysis is the, for example, the ERCOT study that was just
talked about did not consider that the Clean Air Transport Rule
would include Texas, even though EPA was taking comment on
that, the models that they applied did not consider those
impacts.
So what we are looking at is, in the State of Texas, due to
our resilient growth in both population and in job creation,
the demand has increased such that even absent some of the
early retirements associated with these rules, we are looking
to not meet the increase in demand required to maintain reserve
capacity. So I think what Ms. McCarthy is seeing is that it
fails to look at some of the control technologies that are
already in place and does not take full account of the costs
associated with not only the capital investment, but also the
operating and changes in infrastructure required for those.
Senator Barrasso. Ms. Tierney, you work with utilities that
seem to support the proposed EPA MACT Rule for the power
sector, along with most of the other rules coming down the pike
that, to me, increase the cost of doing business for coal-fired
facilities. As I understand it, your clients don't use a
significant amount of coal, so their own compliance
expenditures under the rule wouldn't be very much. Those
clients wouldn't need to stand in line for additional
engineering resources for capital and the like. Yet, they kind
of speak with confidence about the rule.
There was an editorial in the Wall Street Journal back in
December that might shed some light on some of the motivation
of those utilities. The Journal wrote, ``Eight leading utility
CEOs responded recently to one of our editorials with a letter
defending the EPA, claiming that the coal retirements are 'long
overdue' and that the regulations would 'yield important
economic benefits.' ''
What they didn't mention is that those benefits were mostly
accrued to the businesses that they happen to head. The Journal
cited actual transcripts of analyst calls with CEOs of those
companies, notably John Rowe at Exelon, Lew Hay at NextEra.
Essentially, they went on to say these companies say that the
rules that are costly for their coal-fired competitors will
cause more consumption of natural gas, thus significantly
increasing the price that consumers can be charged for
electricity in the markets that these two companies serve,
without requiring either company to make any additional
investment. It is called increasing the ``clearing price'' of
energy.
So do you disagree that these clients have an economic and
a competitive motive to embrace what to me are very costly EPA
rules and regulations?
Ms. Tierney. I don't disagree that there will be companies
such as those in the Clean Energy Group who have already made
the investments and are already living in markets where they
have a competitive disadvantage at the moment. That said, I
also work for transmission companies, grid operators, oil
electric co-ops, large and small energy consumers,
environmental groups. I have a very diverse set of clients, and
as a result of that I speak for myself in saying that all of
the issues that I have described here today are based on
analysis of what is going on in the industry. Among those
things that I mentioned are the CEOs' testimony and statements
from companies that are not among the group of companies that
you just described who have coal units who have said that they
are ready and well prepared to live with these new manageable
rules.
Senator Barrasso. Thank you.
Thank you, Mr. Chairman.
Senator Carper. Any closing statement? Do you want just a
quick closing statement?
Senator Barrasso. No. I just continue to be concerned about
an unemployment rate, Mr. Chairman, 9.1 percent, I think we
will get new numbers out tomorrow, and I think that has a
significant impact on the health of people who are looking for
jobs, trying to raise families, trying to put food on the
table.
And I think we can do a lot for people and for the Country
and for the health of individuals by getting people back to
work, and I think that has to be included in a lot of these
discussions, and I wish that the Environmental Protection
Agency would focus a little more on that and a little bit less
on being fixated with eliminating any potential environmental
risks, no matter how small and no matter how costly.
So thank you, Mr. Chairman.
Senator Carper. I would just close, again, thanking all of
you for being here and for preparing to be here with us today
and for your testimony. Just to followup on what Senator
Barrasso has said, the States that are along the Mid-Atlantic
and the Northeastern part of our Country who end up having to
spend more money for our energy because others create cheap
energy and send the pollution our way impedes our ability to
create jobs and retain jobs.
The fact that we may incur greater costs for health care
because our air is dirtier because of the bad air that comes to
us from folks that use, in some cases, old coal-fired plants to
create electricity, that impedes our ability to maintain our
own jobs. Several of our witnesses have said there is an equity
question. There is really a fairness question. It really goes
back to the Golden Rule; we ought to treat other people like we
want to be treated, or, conversely, don't treat others the way
you don't want to be treated. So that is at play here.
And for us the question is how can we address this question
of fairness or unfairness, and it is the health care costs that
underlie it all and the economic disadvantages for some States,
particularly in the Mid-Atlantic and the Northeast. How do we
do that in a way that is cost-effective? How do we do that in a
way that maybe harnesses market forces and uses good science?
We just have to be smart enough to do that, and I think the
two of us are. I think maybe our 98 colleagues are as well. One
of the things, we have a lot of smart people working for us and
we have to be able to figure this out. We tried legislatively
for, gosh, my first 8 years in the Senate to do this
legislatively and harness market forces.
Ultimately, we couldn't do it. We just couldn't summon the
political will to pass what I thought was pretty legislation,
bipartisan legislation. And it falls on EPA to do what we were
unable to do legislatively, and my hope is that, using good
science and taking a lot of comments and advice from folks
around the Country, to use that.
At the end of the day the question is can we have cleaner
air, can we have jobs that actually might be created from
cleaning that air? I think we can do that. I think we can do
that and history would show that we have been able to do that
pretty well for some time.
The folks, our colleagues who haven't come and had the
privilege of hearing your statements and to ask you questions,
they will have a couple of weeks where they can submit
questions, and we would just ask, if you do get those
questions, if you would promptly respond to them, we would be
most grateful. So wherever you have come from across this great
land of ours, thank you for making the trek. It is great to be
with all of you. Happy Fourth of July. Thank you so much.
With that, this hearing is adjourned.
[Whereupon, at 12:23 p.m. the committee was adjourned.]
[Additional material submitted for the record follows.]
Statement of Senator James M. Inhofe, U.S. Senator
from the State of Oklahoma
Chairman Carper, thank you for holding this hearing today
to discuss EPA's proposed Transport and Utility MACT rules. I
would also like to thank the witnesses for being here today.
Let me say at the outset that, when it comes to reducing
real air pollution from power plants, the best way to
accelerate environmental progress and institute certainty for
businesses is through multi-pollutant legislation. And even
though we have fallen short in recent years, it is increasingly
clear that the Clean Air Act needs to be updated and the rules
for electric utilities are the place to start.
This is not something new for me. I supported 3-P
legislation when, as Chairman of EPW, I tried to advance the
Clear Skies bill. Because that effort eventually failed, for
reasons I won't get into now, we received regulations under the
Clean Air Act that the DC Circuit ultimately rejected--
something I predicted would happen. Here's what I said when the
Bush administration's Clean Air InterState Rule was
promulgated: ``This Clean Air InterState Rule is significantly
more vulnerable to court challenges than legislation and will
undoubtedly be held up. Trying to litigate the way to cleaner
air only delays progress, often yields little or no result and
wastes millions in taxpayer dollars.''
So here we sit, debating EPA's replacement regulations that
are onerous and complex and vulnerable to the same lawsuits
that stymied previous attempts to reduce emissions of sulfur
dioxide, nitrogen oxides and mercury.
Most alarming is the effect the rules will have on our
economy. Messy court rulings and bureaucratic overreach have
produced regulations that will harm the economy. As the
National Economic Research Associates (NERA) recently pointed
out, these rules will likely result in electricity costs
increasing by as much as 23 percent and 1.4 million lost jobs
by 2020. Not a recipe for economic recovery.
Of course, these aren't the only hurdles the power sector
faces. Known as the ``train wreck,'' utilities also face moving
and uncertain emissions targets as EPA further tightens
National Ambient Air Quality Standards (NAAQS) for ozone and
Particulate Matter (PM) over the next few years. Combined with
rules for regional haze, new source performance standards, Acid
Rain, and new source review requirements, the Clean Air Act
presents a labyrinth of overlapping and redundant requirements
that drive up electricity costs and hamper our economy.
In my State of Oklahoma, EPA's rules are causing
substantial concern. And we're starting to see the effects
already. Earlier this month, American Electric Power (AEP)
announced it would be forced to close power plants in six
states and lay off 600 workers as a result of EPA's rules. Two
plants are being idled in Oklahoma.
All of this might be great for environmental lawyers who,
incidentally, make money by exploiting the citizen suit
provisions of the nation's environmental laws. That's right,
your tax dollars being used to destroy jobs in your own
community. So you can bet these rules will be challenged, and
we'll be back here next year.
It might also be great for energy companies--who profit by
rising electricity prices. Exelon CEO, John Rowe, has been
quoted as saying that for every $5 dollar increase per megawatt
of power generated, his company makes $700 to $800 million in
additional annual revenue. The regulations we debate here today
could raise electricity prices by as much as 20 percent in some
markets.
But ultimately, it's working families that pay the price.
Of course, there are ways to reduce emissions and help keep
electricity rates low. Perhaps the biggest one would be to
update the Clean Air Act to stop the EPA ``train wreck.''
Reducing emissions doesn't have to be this costly--the Obama
EPA just wants it to be. Recall President Obama's pledge:
``under my plan electricity rates will necessarily skyrocket.''
Last year, Senators Carper and Alexander introduced ``3P''
legislation that began to look at many of the issues we address
here today. I commend them for taking on that challenge. But
that legislation failed to get widespread support because it
did nothing to address the utility ``train wreck.'' It simply
added new requirements on top of old, increasing uncertainty
and costs.
Now, with plant closures on the horizon, workers being laid
off, and electricity prices sure to rise, a coalition of
Congressmen and Senators is coming together to fix the Clean
Air Act. I look forward to working with them. We can and should
continue to reduce emissions, but we should do so in a way that
protects families from skyrocketing electricity prices and
businesses from unachievable requirements.
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