[Senate Hearing 112-]
[From the U.S. Government Publishing Office]



 
     DEPARTMENT OF THE INTERIOR, ENVIRONMENT, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2013

                              ----------                              


                        WEDNESDAY, MAY 16, 2012

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:36 a.m. in Room SD-124, Dirksen 
Senate Office Building, Hon. Jack Reed, (chairman) presiding.
    Present: Senators Reed, Tester, Murkowski, Cochran, Blunt, 
and Hoeven.

                    ENVIRONMENTAL PROTECTION AGENCY

STATEMENT OF LISA P. JACKSON, ADMINISTRATOR
ACCOMPANIED BY BARBARA J. BENNETT, CHIEF FINANCIAL OFFICER

                 OPENING STATEMENT OF SENATOR JACK REED

    Senator Reed. Let me call the hearing to order. On behalf 
of the Interior, Environment, and Related Agencies 
Appropriations Subcommittee, I'd like to welcome everyone to 
our hearing on the fiscal year 2013 budget request for the 
United States Environmental Protection Agency (EPA).
    I'm very pleased to again welcome Administrator Lisa 
Jackson to testify before us. We're also very glad that you and 
your Chief Financial Officer, Barbara J. Bennett, are here this 
morning to talk about your budget request and related policy 
issues.
    As you know, Administrator Jackson, this subcommittee has 
been ground zero for many of the contentious policy issues that 
you face. And so we all know what a challenging job you have.
    It's hard to address environmental challenges when our 
economy is strong, let alone when our current fiscal situation 
is challenging. That's why I particularly appreciate your 
message that environmental protection is not only compatible, 
but it is, in fact, essential for the economic growth and well-
being of our Nation. That's an important message.
    Of course, balancing environmental protection needs against 
economic constraints isn't limited to policy choices. Turning 
to the budget, we can see the difficult choices that you have 
made.
    Overall, the administration has requested a total of $8.344 
billion for EPA programs. That's a decrease of $105 million or 
about 1 percent less than the fiscal year 2012 enacted level.
    Within this amount, the budget request includes a 5-percent 
increase in EPA's operating programs for a total of $2.8 
billion, which includes major investments in enforcement and 
compliance and chemical safety programs.
    The request also includes a 10-percent increase for grants 
to States and tribes to help them run their environmental 
permitting and monitoring programs, including a large increase 
for State air quality grants.
    I also would like to note that the budget request includes 
$14 million, an $8 million increase, to expand EPA's current 
slate of hydraulic fracturing research to ensure that the 
Nation can continue to access its unconventional oil and gas 
reserves in a safe and environmentally sustainable way.
    I know there is a lot of interest in how EPA plans to use 
these funds as well as interest in new EPA regulations that 
address the effects on air and water quality associated with 
hydraulic fracking. So I expect we'll discuss these issues in 
some length this morning.
    Now, while I agree that the investments I've just discussed 
are very important, I'm very concerned that the water 
infrastructure grant program bears the brunt of cuts in this 
budget.
    Specifically, the budget proposes to cut $359 million or 15 
percent from Clean and Drinking Water State Revolving Fund 
program levels. That would mean a 20-percent cut to the Clean 
Water State Revolving Fund program and a 7-percent cut for the 
Drinking Water State Revolving Fund program.
    These additional cuts mean that the State Revolving Funds 
(SRF)would be cut by more than 40 percent compared to where the 
programs were 3 years ago, and would negatively impact our 
communities in at least two ways.
    First, by EPA's own estimates, our communities face more 
than $600 billion in sewer and drinking water project needs 
over the next two decades. And these needs are far outpacing 
the Federal Government's ability to help communities pay for 
them.
    My own State of Rhode Island has more than $1.6 billion in 
projects waiting for funding on its intended use plan, 
including $1.3 billion in clean water needs. Yet, in the 
President's fiscal year 2013 budget, we are only slated to 
receive about $16 million in SRF grants.
    So I'm concerned that further cuts to SRFs will cause us to 
fall even further behind.
    Second, the SRFs are tremendous job creators, especially 
when our Federal grants are combined with the additional funds 
that States contribute as a matching requirement, or stretched 
even further by leveraging through the bond markets.
    Every $1 we invest in these grants creates more than $2 in 
total investments in actual projects on the ground.
    The bottom line is that cutting these programs means 
cutting construction jobs. And despite the fact that many of 
EPA's programs we'll discuss here today are controversial, 
funding for water infrastructure has bipartisan support.
    So I'm very concerned that the administration is proposing 
to cut one of the few areas of the EPA budget that both sides 
agree is extremely important.
    There are some additional reductions to smaller programs in 
the EPA budget which also concern me, including a proposal to 
cut diesel emission reduction grants by one-half, and to 
eliminate Beach Act coastal monitoring grants and the 
environmental education program.
    As part of our conversation today, I'd like to know why 
these programs were selected for reductions, and I hope you'll 
work with me, Administrator Jackson, and the subcommittee to 
restore these proposed cuts.
    Finally, I'd like to turn to an area of the budget that is 
very important to my home State, if you would allow me.
    For many years, I've worked to protect Rhode Island's 
coastal environment since I became chairman. I've been working 
closely with the EPA to emphasize the need to restore coastal 
watersheds in southern New England like the Narragansett Bay.
    Last year, I directed the EPA through the Interior, 
Environment, and Related Agencies appropriations bill to take a 
leadership role to coordinate and expand restoration programs 
in the region.
    I'm happy that EPA's moving forward with these efforts and 
thank you very much, Madam Administrator, and your Regional 
Administrator Curt Spaulding in Region 1.
    And I'm particularly pleased to see your proposed $2 
million investment in the region as part of your budget 
request. I want to thank you both, Administrator Jackson and 
Ms. Bennett, for your personal attention to this issue. Thank 
you very much.
    And, now, let me turn to my ranking member, Senator 
Murkowski. Senator.

                  STATEMENT OF SENATOR LISA MURKOWSKI

    Senator Murkowski. Thank you, Mr. Chairman.
    Administrator, welcome. Good morning, Ms. Bennett. Thank 
you also for being here.
    Administrator, as you might expect, many of my questions 
today will involve policy issues. But first, I want to 
recognize and thank you for maintaining the Alaskan Native 
Villages Program at $10 million in your budget request.
    The need in rural Alaska for wastewater improvements is 
enormous. I truly appreciate that you've maintained this 
critical program while keeping the overall budget request below 
last year's level. So thank you for that.
    Earlier this month, there was an editorial in the 
Washington Post entitled ``The EPA is Earning a Reputation for 
Abuse''. Not a very complimentary headline there.
    And this was in response to statements that came to light 
from one of your regional administrators concerning the EPA's 
enforcement tactics.
    And the editorial states as follows: ``The most reasonable 
interpretation is also among the most disturbing, that Mr. 
Armendariz preferred to extract harsh punishments on an 
arbitrary number of firms to scare others into cooperating.''
    This sort of talk isn't merely unjust and threatening to 
investors in energy projects, it hurts the EPA. The question 
will remain, is an aggressive attitude like the one Mr. 
Armendariz described common among EPA officials?'' And that's 
the end of that quote.
    I raise these issues because I think these statements are 
somewhat consistent with some of the fears that have been 
expressed by some of my constituents and that I have expressed 
about the EPA.
    That it can sometimes be arrogant, use arbitrary 
enforcement or put in permitting requirements which then in 
turn discourage the market from investing in critical projects 
that are necessary to get folks back to work, invigorate our 
economy.
    There's a couple of examples in Alaska that I will cite too 
that suggest that this attitude has perhaps affected EPA's work 
on issues within my State.
    You are very familiar, of course, with Shell Oil and its 
effort to gain the necessary permits to pursue exploring 
offshore there.
    They've spent more than 5 years and $50 million pursuing 
air permits from the EPA for no more than two drill ships to 
operate in the Arctic Outer Continental Shelf (OCS). At the 
same time, these kinds of permits were issued routinely in the 
Gulf of Mexico in about a 6-week period in air sheds where 
there are many, many more drilling rigs operating year-round, 
and with many more communities in close proximity.
    As you know, I worked with my colleagues last year to 
transfer air permitting authority in the Arctic OCS from the 
EPA to the Department of the Interior who already has the 
permitting responsibilities within the gulf.
    A second case in point is the watershed assessment for 
Bristol Bay. This assessment is in response to a petition to 
block the proposed Pebble Mine under section 404 of the Clean 
Water Act.
    I've heard from a lot of Alaskans on this issue. They're 
concerned about so many different aspects of it, from the 
potential development of a mine affecting our State's 
fisheries, to the need for a fair permitting process and the 
potential economic benefits of mineral development.
    But precisely because this is such a controversial and very 
complex issue, I think that the process used by the EPA must be 
absolutely fair and transparent. And, I've been somewhat 
concerned about the potential for unintended consequences from 
such an assessment.
    Back in February of last year, and again just last month, I 
sent letters to you inquiring what would stop the assessment 
from being used by opponents of other nonmining development in 
Bristol Bay.
    I think that the assessment would be flawed if it doesn't 
contain an answer to that question. So that is something that I 
have asked and hope to get a firm answer on.
    I do want the EPA to do its job in the regular order of 
things.
    You clearly have the responsibility to protect the public 
health. I support that. I respect that, and I respect the 
passion for which you exercise your responsibility. But I do 
believe that it has to be done in a way that the public 
believes is fair and based on objective science.
    And I would hope that you would agree with that. Mr. 
Chairman, again, I thank you.
    Administrator Jackson, I appreciate you being before the 
committee today, and I look forward to our discussions later 
on. Thank you.
    Senator Reed. Before I recognize the Administrator, Senator 
Tester, do you have any comments?
    Senator Tester. No.
    Senator Reed. Thank you very much. Administrator Jackson, 
please.

                  SUMMARY STATEMENT OF LISA P. JACKSON

    Ms. Jackson. Thank you all, and thank you, Mr. Chairman.
    Thank you for inviting me to testify on the President's 
fiscal year 2013 budget for the EPA. And, as you noted, thank 
you. I'm joined by our Chief Financial Officer, Barbara J. 
Bennett.
    EPA's budget request is $8.344 billion, and it focuses on 
fulfilling EPA's core mission that's protecting human health 
and the environment, while making sacrifices and, indeed, tough 
choices that Americans across the country are making every day.
    EPA's budget request fully reflects the President's 
commitment to reducing Government spending. The budget is down 
and finding cost savings in a responsible manner, while still 
supporting clean air, clean water and the innovative safeguards 
that are essential to an America that's built to last.
    In some cases, we have, indeed, had to take a step back 
from programs. This budget reflects a savings of $50 million 
through the elimination of several EPA programs and activities 
that have either met their goals or can be achieved at the 
State or local level or by other Federal agencies.
    I just want to spend a moment discussing a few elements of 
EPA's budget request.
    The budget request recognizes the importance of our 
partners at the State and local and tribal level. As you know, 
they are, indeed, at the front lines of implementing our 
Nation's environmental laws like the Clean Water Act, and the 
Clean Air Act.
    And, in fact, the largest portion, fully 40 percent of 
EPA's funding request, is directed to State and Tribal 
Assistance Grants appropriations. And that's to support their 
efforts.
    Specifically, the budget proposes that $1.2 billion, nearly 
15 percent of EPA's overall budget request, be allocated back 
through categorical grants to the States and tribes. This 
includes funding for State and Local Air Quality Management 
grants, Pollution Control grants, and the Tribal General 
Assistance Program.
    The budget also proposes that a combined $2 billion, fully 
25 percent of EPA's budget request, goes directly to the States 
for the Clean Water and Drinking Water State Revolving Funds.
    As you noted, Sir, this funding will help support 
systemwide investments that are efficient and that develop 
water infrastructure in our communities. We are working 
collaboratively especially to identify opportunities to fund 
green infrastructure, projects that can reduce pollution 
efficiently and much less expensively than traditional grey 
infrastructure.
    Additionally, our budget request would fund the protection 
of the Nation's land and water in local communities, including 
important water such as the Narragansett Bay.
    Reflecting the President's commitment to restoring and 
protecting the Great Lakes, the budget requests that the 
Congress maintain the current funding level of $300 million for 
the Great Lakes Restoration Initiative.
    This support will continue to be used for collaborative 
work with partners at the State, local and tribal level, and 
also with nonprofit and municipal groups.
    The budget also requests support for protection of the 
Chesapeake Bay, and several other treasured and economically 
significant water bodies.
    The budget reflects the importance of cleaning up 
contaminated land requesting $755 million for continued support 
of the Superfund cleanup programs and maintaining EPA's 
emergency preparedness capabilities.
    EPA's budget request makes investments in its science and 
technology account of $807 million, that's almost 10 percent of 
the total request. That includes $576 million for research, 
including $81 million in research grants and fellowships to 
scientists and universities throughout our country for targeted 
research as part of the Science to Achieve Results, or STAR 
program, on areas that include issues like children's health, 
endocrine disruption, and air monitoring research.
    Also, as part of this request, EPA is funding increases in 
areas that include green infrastructure and hydraulic 
fracturing.
    As I've mentioned before, natural gas is an important 
resource abundant in our country, but we must make sure that 
the way we extract it does not jeopardize our water supplies.
    This budget continues EPA's ongoing congressionally 
directed fracking study, which we have taken great steps to 
ensure is independent, peer reviewed, and based on strong and 
scientifically defensible data.
    Building on these ongoing efforts, this budget requests $14 
million in total to work collaboratively with the USGS, the 
Department of Energy (DOE), and other partners to assess 
questions regarding hydraulic fracturing.
    Strong science means finding the answers to tough 
questions, and that's what our budget request is intended to 
do.
    We are making investments to support standards for clean 
energy and energy efficiency in this budget. Specifically, this 
budget supports EPA's efforts to introduce cleaner vehicles and 
fuels, to expand the use of home-grown renewable fuels.
    This includes funding for EPA's Federal Vehicle and Fuel 
Standards and Certification program and compliance testing for 
emissions standards. This also includes implementation of the 
President's historic agreement with the auto industry for 
reducing carbon pollution and increasing fuel economy standards 
through 2025 for cars and light duty vehicles, including 
testing support for NHTSA's fuel economy standards.

                           PREPARED STATEMENT

    Taken together, the administration's standards for cars and 
light trucks are projected to result in $1.7 trillion in fuel 
savings and 12 billion fewer barrels of oil consumed.
    This funding will also help support implementation of the 
first ever carbon pollution and fuel economy standards for 
heavy duty vehicles.
    Mr. Chairman, I thank you for the opportunity to testify. 
While my testimony reflects only a few highlights of EPA's 
budget request, I look forward to answering all questions of 
the subcommittee.
    [The statement follows:]

                 Prepared Statement of Lisa P. Jackson

    Thank you for inviting me to testify on the President's fiscal year 
2013 budget for the Environmental Protection Agency (EPA). I'm joined 
by EPA's chief financial officer, Barbara J. Bennett.
    EPA's budget request of $8.344 billion focuses on fulfilling EPA's 
core mission of protecting public health and the environment, while 
making the sacrifices and tough decisions that Americans across the 
country are making every day.
    EPA's budget request fully reflects the President's commitment to 
reducing Government spending and finding cost savings in a responsible 
manner while supporting clean air, clean water, and the innovative safe 
guards that are essential to an America that's built to last. In some 
cases we have had to take a step back from programs--this budget 
reflects a savings of $50 million through the elimination of several 
EPA programs and activities that have either met their goals, or can be 
achieved at the State or local level or by other Federal agencies.
    Let me spend a moment discussing major elements of EPA's budget 
request.
    This budget recognizes the importance of our partners at the State, 
local, and tribal level. As you know, they are at the front lines of 
implementing our environmental laws like the Clean Water Act, and the 
Clean Air Act. In fact, the largest portion--40 percent of EPA's 
funding request--is directed to the State and Tribal Assistance Grants 
appropriation to support their efforts.
    Specifically, this budget proposes that $1.2 billion--nearly 15 
percent of EPA's overall request--be allocated back to the States and 
tribes, through categorical grants. This includes funding for State and 
Local Air Quality Management grants, Pollution Control grants and the 
tribal general assistance program.
    The budget also proposes that a combined $2 billion--another 25 
percent of EPA's budget request--also goes directly to the States for 
the Clean Water and Drinking Water State Revolving Funds. This funding 
will help support efficient systemwide investments and development of 
water infrastructure in our communities. We are working collaboratively 
to identify opportunities to fund green infrastructure--projects that 
can reduce pollution efficiently and less expensively than traditional 
grey infrastructure.
    Additionally, EPA's budget request would fund the protection of the 
Nation's land and water in local communities. Reflecting the 
President's commitment to restoring and protecting the Great Lakes, 
this budget requests that the Congress maintain the current funding 
level of $300 million for the Great Lakes Restoration Initiative. This 
support will continue to be used for collaborative work with partners 
at the State, local and tribal level, and also with nonprofit and 
municipal groups. The budget also requests support for protection of 
the Chesapeake Bay, and several other treasured and economically 
significant water bodies. The budget reflects the importance of 
cleaning up contaminated land sites in our communities by requesting 
$755 million for continued support of the superfund cleanup programs 
and maintains EPA's emergency preparedness and response capabilities.
    EPA's budget request makes major investments in its science and 
technology account of $807 million, or almost 10 percent of the total 
request. This request includes $576 million for research, including $81 
million in research grants and fellowships to scientists and 
universities throughout the country for targeted research as part of 
the Science to Achieve Results--or STAR--program, including children's 
health, endocrine disruption, and air monitoring research. Also, as 
part of this request, EPA includes funding increases into key areas 
that include green infrastructure and hydraulic fracturing.
    As I've mentioned before, natural gas is an important resource 
which is abundant in the United States, but we must make sure that the 
ways we extract it do not risk the safety of public water supplies. 
This budget continues EPA's ongoing congressionally directed hydraulic 
fracturing study, which we have taken great steps to ensure is 
independent, peer reviewed, and based on strong and scientifically 
defensible data. Building on these ongoing efforts, this budget 
requests $14 million in total to work collaboratively with the United 
States Geological Survey, the Department of Energy and other partners 
to assess questions regarding hydraulic fracturing. Strong science 
means finding the answers to tough questions, and EPA's request does 
that.
    We are making investments to support standards for clean energy and 
efficiency in this budget. Specifically, this budget supports EPA's 
efforts to introduce cleaner vehicles and fuels and to expand the use 
of home-grown renewable fuels. This includes funding for EPA's Federal 
Vehicle and Fuel Standards and Certification program to support 
certification, and compliance testing for all emissions standards. This 
also includes implementation of the President's historic agreement with 
the auto industry for carbon pollution and fuel economy standards 
through 2025 for cars and light duty vehicles, including testing 
support for National Highway Traffic Safety Administration's (NHTSA) 
fuel economy standards. Taken together, NHTSA's standards for cars and 
light trucks are projected to result in $1.7 trillion of fuel savings, 
and 12 billion fewer barrels of oil consumed. This funding will also 
help support implementation of the first ever carbon pollution and fuel 
economy standards for heavy duty trucks.
    Stepping back from EPA's budget request, let me spend a moment 
discussing the impact of a sequester. Mr. Chairman, as you know, as 
part of the Budget Control Act of 2011 (BCA), through a sequestration, 
spending may be forced to be slashed in an irresponsible manner that 
can endanger the public health protections that we rely on and not 
invest in an America that's built to last. By design the sequester is 
bad policy, bringing about deep cuts in defense and nondefense spending 
to act as an incentive for congressional action on deficit reduction.
    Even without the sequester, discretionary spending has already been 
cut in nominal terms for 2 straight years. Under the BCA, it is on a 
path to reach its lowest level as a share of GDP since the Eisenhower 
administration.
    If the sequester were to happen, it would bring another round of 
deep cuts in discretionary spending. Although the administration is 
continuing to analyze the impact of the sequester, CBO has said that in 
2013, the sequester would result in a 7.8-percent cut in nonsecurity 
discretionary accounts that are not exempt from the sequester. It would 
be impossible for us to manage cuts of that magnitude and still achieve 
our fundamental mission to protect human health and the environment.
    The sequester would thus have a devastating effect on our country's 
ability to conduct the following activities over the long haul:
  --A sequester would result in deep cuts to EPA's operating budget, 
        which includes funds for the enforcement of public health and 
        environmental protections.
  --It would significantly harm our ability to help State and local 
        governments finance needed drinking water and wastewater 
        projects that provide communities clean and safe water.
  --A sequester also would slash EPA grants that help States carry out 
        basic functions that protect human health and the environment 
        like water quality permitting and air quality monitoring.
  --The sequester would impair progress on the country's ability to 
        clean up the nation's hazardous waste sites over the long haul.
    The President has been clear that the Congress needs to avoid a 
sequester by passing a balanced deficit reduction--at least as much as 
the BCA required of the Joint Select Committee on Deficit Reduction to 
avoid sequestration. The President's budget reflects such a balanced 
proposal, and we believe the Congress should enact it and cancel the 
sequester.
    Mr. Chairman, thank you for the opportunity to testify today. While 
my testimony reflects only some of the highlights of EPA's budget 
request, I look forward to answering your questions.

    Senator Reed. Thank you very much, Administrator.
    We'll do 6-minute rounds, and I assume that we'll have a 
second round at least and maybe more. But let me begin.

                         STATE REVOLVING FUNDS

    Obviously, with my initial comments about SRFs, I want to 
give you a chance to respond about the deep cuts relative to 
other programs.
    And the two points that I made in my comments, I'll just 
reiterate and ask for you to respond. One is, there are 
numerous projects at the State level that are available, 
billions of dollars and more than 10 years worth of projects 
that have to be funded and we're cutting back on it.
    And this is a program obviously that creates the kind of 
construction jobs and multiplier effect in the local 
communities that is so critical at this moment, particularly, 
up in Rhode Island, and I think every State in the country.
    So, Madam Administrator, I know you had to make tough 
choices, but does it make sense to cut this program this much?
    Ms. Jackson. Well, thank you for recognizing, Chairman, 
that this does represent the kinds of tough choices that we 
have to face.
    This administration really has strongly supported 
investments in drinking water and wastewater infrastructure to 
the tune of $18 billion more than the budgets so far. That 
includes $6 billion that was in the American Reinvestment and 
Recovery Act, of which, 100 percent allocated to States and 
tribes has been obligated.
    So it's important for us, and I think we would love to work 
with you. I understand the concern. There is great need out 
there. It is absolutely true that clean water is the basis for 
economic growth and development, and it's also a clear 
stimulant for jobs and construction.
    We'd like to take a look at what's out there, what has been 
expended and whether there are still monies that will be 
expended over the coming year. Part of this is a recognition 
that we may have money that because of the incredible 
investment, that $18 billion, we can look to make sure that the 
funds are being purposed and put out on the street for jobs.
    Senator Reed. Thank you. Obviously, we'll be following up 
with you to try to get that information and also to continue to 
press the case that this program could, I think, effectively 
use additional funding.

                            NARRAGANSETT BAY

    I want to, as I said before, thank you and Ms. Bennett for 
your work with the coastal watersheds of Region 1, in 
particular, in Narragansett Bay.
    Can you give us an idea of your concept? I know there's $2 
million within the budget for this, and how do you see this not 
only affecting Narragansett Bay, but also being consistent with 
and maybe a model for other watersheds throughout the country?
    Ms. Jackson. Well, thank you, Mr. Chairman.
    I think, as you pointed out, southeast New England faces 
environmental challenges, and the region has typical challenges 
associated with the legacy of some amount of contamination, 
channelized and impounded rivers, and natural systems that have 
been altered.
    Under your leadership and working together, I think we do 
have an opportunity to develop and test and implement best 
practices for restoration and renewal that would benefit the 
entire bi-State areas, the entire areas along that coastline, 
especially Narragansett Bay.
    We, of course, have the National Estuary Program, and we 
worked on that. We have other estuary programs where there is 
some opportunity to work together. But our hope here is to 
bring expertise and commitment on water quality together with 
an intense focus on the Narragansett Bay, in particular, to 
determine what specific levers can be pulled to make the 
largest increases in water quality as well as habitat and 
coastline improvements along the Bay.
    Senator Reed. Thank you.

                   STATE AND LOCAL AIR QUALITY GRANTS

    Let me raise a final question in my first round. And that 
is, I've received letters from the directors of nine State 
environmental agencies, and I think Senator Murkowski and 
others have received the letters.
    And they are responding to your proposal to change the 
formula for State and local air quality grants which would 
essentially change the formula to favor the south and the west 
from the current arrangement.
    And their fear, even though you're increasing funding so 
that there's no immediate decrease, their fear is obviously 
that this fund is locked in. If funding is not increased over 
time consistently, they will begin to receive less and less for 
these important functions.
    One other point I have, and this is just specific to the 
Northeast, one of the ironies of course is that we have to 
monitor a lot of air that comes from the Midwest. So that our 
air quality efforts are not simply a function of, you know, our 
regional or even local output.
    And that I think also is another rationale for maintaining 
the formula. And there is a second issue too. And that is that 
they've raised the point that you are proposing to transfer 
authority for particulate monitoring from section 103 to 
section 105.
    The bottom line is that this transfer requires a State 
match, which means, in the worst case, and generally, they 
think it's the worst case, they're going to see their funds 
decrease. And then another portion of their operations will 
require a State match which is virtually impossible to obtain 
given the reality of the States, all of our States at the 
moment.
    Could you comment?
    Ms. Jackson. Yes, Mr. Chairman, thank you.
    I do think, we have heard some of those concerns and 
received copies of those letters. And I think that once we 
receive our appropriation amount, there is an opportunity for 
us to try to work with States on how the money is allocated 
between section 103 and 105 authorities.
    There is some difference across the country in need. 
Actually, the need is greater than what we can give them. We 
are increasing, and we're very, very proud, we'd love to be 
able to give you even more money.
    But we're increasing because we recognize that States are 
so strapped, and that these monitoring systems for air quality 
are really the basis of determining whether air is healthy or 
not. And, of course, potentially taking action.
    So I think there is opportunity to work to make sure that 
there are no unintended consequences for States. But the 
increase is very real.
    Senator Reed. Well, I appreciate that.
    But, again, taking the longer view, there's a real fear 
that this formula change could significantly disadvantage, as 
well as the shifting of authorities.
    So we will be working with you and looking very closely for 
the justification for these proposals and also to ensure that 
if these concerns are justified, we can respond and make 
appropriate changes.
    With that, let me recognize Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Administrator, as I go around the State meeting with 
constituents, more people ask me questions about EPA than any 
other Federal agency out there.
    And they ask me to intervene. They ask me to do everything 
that I can to help just deal with an agency that they're having 
some difficulty understanding.
    In fact, I had asked my Alaska staff to, as they meet with 
various community leaders, to just kind of keep a running list 
of some of the issues that are coming out of our communities. 
Some of them are what you would certainly expect, concerns 
about Boiler MACT, Utility MACT.
    Others are pretty local, everything from how we get 
different ice melt on airport runways to how animals that are 
on the Alaska marine highway system moving from small island 
community to small island community, how the waste from those 
animals can be dealt with.
    So it's really a range all over the board. What I would ask 
for you this morning is a commitment to have your senior staff 
with operational authority sit down with some of my senior 
advisers within the next few weeks or so to discuss where the 
EPA is on a range of these issues.
    Senator Murkowski. Again, many of them are so very local 
that I don't want to take the subcommittee's time to resolve, 
but exceptionally important to these more isolated and smaller 
communities.
    So I'd ask if you'd be willing to appoint some folks to sit 
with me.
    Ms. Jackson. Of course.
    Senator Murkowski. Thank you.
    [The information follows:]

    Administrator Jackson committed to have senior staff with 
operational authority sit down with some of Senator Murkowski's senior 
advisors within the next few weeks to discuss where the Environmental 
Protection Agency (EPA) is on a range of issues (ice melt on airport 
runways, Boiler Maximum Achievable Control Technology (MACT), Utility 
MACT, animal waste, etc.).
    Senior EPA staff met with staff from Senator Murkowski's office on 
May 31, 2012. The meeting resulted in numerous issue-specific, follow-
up meetings, and an ongoing discussion on specific matters.

                         BRISTOL BAY WATERSHED

    Senator Murkowski. Let me ask you, just a quick question on 
the Bristol Bay watershed. I understand that an announcement on 
that is due out shortly. And, of course, my hope is that in 
addition to the questions that I had posed in my two letters to 
you, that we will not see a pre-emptive veto.
    The concern that I have expressed, and just mentioned in my 
opening, is how far this assessment can be utilized beyond just 
the Pebble project itself.
    Can you legally limit the impact to just EPA's 
consideration of the mining activity? Or, will it impact or 
affect the development decision in the watershed involving 
other issues, whether it's dredge or fill material?
    Of course, the concern is, is that within this area that's 
about the size of the State of West Virginia, if they're not 
going to be able to build a road, build a runway, because of 
this assessment, this is extraordinarily limiting.
    So I'm trying to understand that EPA authority, if you 
could address that for me.
    Ms. Jackson. Yes, Senator. And thank you for your letter.
    [The information follows:]


                                      United States Senate,
                                    Washington, DC, April 18, 2012.
Hon. Lisa P. Jackson,
Environmental Protection Agency,
Washington, DC.
    Dear Administrator Jackson: The Environmental Protection Agency 
(EPA) announced over a year ago that it would undertake a ``scientific 
assessment of the Bristol Bay watershed'' in Alaska in response to a 
petition to preemptively veto development, in that area, under section 
404(c) of the Clean Water Act. These actions materialized in response 
to the potential development of the so-called Pebble Mine.
    Since that project became a possibility, I have encouraged all 
stakeholders to withhold judgment until 1) a detailed development plan 
is released for review and 2) all relevant analyses of that plan arc 
completed. A preemptive veto, just like a preemptive approval, would be 
based purely upon speculation and conjecture. It would deprive relevant 
government agencies and all stakeholders of the specifics needed to 
take an informed position. As I have communicated to you in the past, 
this would be an unacceptable outcome to me.
    Even as the EPA proceeds with its watershed assessment, I have 
continued to hear from many Alaskans about it. They are concerned about 
everything from the potential development of a mine and the importance 
of our State's fisheries to the need for a fair permitting process and 
the potential economic benefits of mineral development. Needless to 
say, I remain apprehensive about EPA's handling of this matter 
generally, but I write today regarding one particular issue.
    Setting aside my opposition to a preemptive veto of a mining 
project that has not yet applied for a permit, I am worried about the 
unintended consequences for other development should the EPA decide to 
take such action. Specifically, I remain concerned that an attempt to 
preemptively veto the Pebble mine would have the practical effect of 
halting any development in the Bristol Bay area that might generate 
dredge or fill material. It remains unclear to me how dredge or fill 
material from a mining operation might be substantively different from 
dredge or fill material generated from any other form of development.
    In my letter to you of February 16, 2011, I raised this issue and 
asked a pair of detailed questions. I was disappointed to find that 
your response of March 21, 2011 did not definitively answer either of 
those questions, both of which appear with the responses that the EPA 
provided in the attachment. Since our exchange, and in continuing to 
hear from my constituents about the EPA's activities in Alaska, I have 
only become more concerned. It was my hope that a recent meeting with 
EPA officials would finally alleviate some of these concerns, but I 
regret that it failed to accomplish that objective as well.
    On March 6th, members of my staff met with EPA's Region Ten 
Administrator, Dennis McLerran. Consistent with my past inquiries, they 
asked Administrator McLerran about the potential impact of a preemptive 
veto of development in the Bristol Bay watershed for not only mining, 
but all other development. They were told that the watershed assessment 
would be narrowly crafted to look at hypothetical mining activities and 
that any preemptive veto would he similarly structured to avoid 
impacting other development. I ask that you provide further, written 
clarification on this matter.
    In particular, I fail to see what grounds the EPA might have for 
asserting that dredge or fill generated by a hypothetical mine and the 
acceptability of impacts resulting from its disposal--is any different 
from dredge or fill material generated by any other hypothetical 
development. Given the EPA's apparent comfort with consideration of 
hypothetical scenarios, and for purposes of more definitively answering 
my previously submitted questions, I ask that you do so again.
    Specifically, please assume that EPA goes ahead with a preemptive 
veto of mineral development in the Bristol Bay area. Having done so, 
please consider the possibility of a subsequent proposal to develop an 
airfield--one that would generate, and require disposal of, dredge or 
fill material--in the same area. If a third-party litigant sued to 
prevent construction of this hypothetical airfield, please describe the 
legal grounds upon which that challenge might he reliably defeated and 
the airfield development allowed to move forward.
    To date, I have not received a satisfactory response to this 
question, no matter how it has been phrased. This makes me very 
concerned, so I appreciate any assistance you might be able to provide 
in clarifying the matter and hope that the more specific example 
provided herein will be helpful to that end. In attempting to answer 
this question, I ask that you do so no later than--and ideally prior 
to--the issuance of the watershed assessment that the EPA has 
undertaken. To be clear: I will view as fatally flawed any assessment 
that does not include, or is not accompanied by, an official legal 
opinion from the administration on this matter. I further ask that your 
analysis be performed in conjunction with the Department of Justice and 
the EPA's Solicitor.
    As the people of my State work to attract investment and create 
jobs, regulatory uncertainty is hampering those efforts and they need 
answers to questions about actions that the EPA is considering. This is 
particularly true when those actions could have a permanent and 
detrimental impact on our ability not only to develop Alaska's 
resources, but also to undertake any other forms of development in our 
State.
    Thank you for your attention to this important matter.
            Sincerely,
                                            Lisa Murkowski,
                                                      U.S. Senator.
    cc: Administrator Dennis McLerran and Attorney General Eric Holder
                                 ______
                                 

                               Attachment

    Question:
    Should a veto be exercised preemptively within the Bristol Bay 
watershed--not in relation to an application to undertake specific 
development in the area--could that decision be interpreted by courts 
or future administrations to extend more broadly to all future 
development proposals (e.g., an airstrip, fish-processing plant, 
refinery, hospital, school, museum) that may require a dredge or fill 
disposal site?
    EPA Response:
    EPA's assessment is not a regulatory action. This assessment will 
help inform consideration of options for improving protection of the 
Bristol Bay watershed. EPA has made no decision at this time to proceed 
with a CWA section 404(c) review in Bristol Bay. As a result, we are 
not prepared to speculate regarding the scope of any action taken under 
this authority.
    Question:
    It seems that a preemptive veto could set a number of highly-
problematic precedents. For example, the Bureau of Land Management, the 
U.S. Forest Service, and other federal agencies have historically been 
tasked with land planning decisions on federal acreage. Similarly, 
state lands are managed by analogous entities. Should the EPA issue a 
preemptive veto of an entire area which, in this case, consists largely 
of state lands, those aforementioned agencies would no longer be able 
to plan for multiple-use activities, but instead he subjected to 
preemptive yes-or-no decisions from the EPA under whatever speculative 
assumptions regarding development the EPA may choose to adopt.
    Has the EPA considered the precedents that would be set by a 
preemptive veto? Has the EPA consulted relevant federal and state 
agencies regarding such a course of action? Could third-party litigants 
cite the veto as precedent in opposing other projects within the 
watershed?
    EPA Response:
    EPA has not made any decision regarding whether or not to initiate 
an advance 404(c) action at this time. As we have emphasized, we have 
instead chosen to work with our federal, state, and tribal partners, 
and the public, to assess the resources in Bristol Bay and identify 
options for improving protections for fisheries in the Bay that depend 
so significantly on clean water and a healthy watershed. We look 
forward to working with federal agencies, corresponding state agencies, 
tribes, and others to take advantage of their experience and 
information to support the Bristol Bay assessment. As part of the 
assessment process, EPA will collaborate with an extensive list of 
federal, state, tribal, and local government agencies and 
organizations; the public; private interests such as mining project 
proponents; and others with an interest in Bristol Bay. EPA's 
assessment process is being conducted in an open and transparent manner 
to allow the issues you have raised to be effectively raised and 
discussed. This information and public discussion will help inform 
decisions following completion of the study.

    Ms. Jackson. I'll lay this out more fully in my response to 
your letter which will be coming very, very shortly. And, 
because your letter was addressed, and copied to the Attorney 
General, we have been also consulting on the legal issues here.
    [The information follows:]

             United States Environmental Protection Agency,
                                      Washington, DC, May 17, 2012.
Hon. Lisa A. Murkowski,
United States Senate,
Washington, DC.
    Dear Senator Murkowski: Thank you for your April 18, 2012, letter 
requesting additional clarification about the U.S. Environmental 
Protection Agency's (EPA) Bristol Bay watershed assessment. I 
appreciate the opportunity to respond to your letter.
    As detailed in my letter of March 21, 2012, EPA undertook this 
assessment after numerous native villages and other organizations in 
Alaska and elsewhere raised concern about potential environmental, 
water quality, fisheries and associated economic and subsistence 
impacts from proposed large-scale mining development in the Bristol Bay 
watershed. Clean Water Act Sections 104(a) and (b) clearly provide the 
Agency with the authority to study the resources of the Bristol Bay 
watershed, evaluate the effect of pollution from large scale mining 
development on those resources, and make such an assessment available 
to the public. Although these groups requested that EPA use its 
authority under Section 404(c) of the Clean Water Act, others argued 
that any action should be based on submission and review of a 
particularized permit application.
    EPA decided it was premature to make any decision on the use of 
Section 404(c). Instead, the Agency opted to undertake a scientific 
assessment to obtain a more informed basis for future decisionmaking. 
The EPA is conducting this assessment in coordination with Federal 
agencies, tribal organizations, and the public. We have also consulted 
with the State of Alaska. We intend to make our draft available for 
public comment and are convening a peer review panel to provide us with 
independent scientific feedback. Our goal is the finalization of a 
robust, technically sound assessment. Only upon its completion will the 
Agency examine regulatory options, including application of404(c), if 
appropriate. We will be happy to brief you and your staff on the draft 
assessment and its implications when it is released.
    Your letter raises an important question about the precedential 
effect of a hypothetical EPA section 404(c) review of mining in Bristol 
Bay on other future development activities in the Bristol Bay 
watershed. Before turning to this issue, I want to be clear that the 
focus of our assessment is on the environmental and water quality 
impacts from discharges of dredged or fill material associated with 
large-scale mining in the watershed. The assessment does not address 
impacts associated with other development activities, such as 
construction of an airfield, which have a wholly different 
environmental footprint from large-scale mining Since this assessment 
focuses only on the impacts of large-scale mining projects to the 
Bristol Bay watershed, use of the assessment in support or in 
opposition to other types of wetland fill activities is not 
appropriate. Therefore, we would not expect the assessment to play a 
significant role should controversy arise about possible regulation of 
development activities unrelated to large-scale mining.
    While your question is hypothetical, and EPA has no plans to use 
404(c) authority unless justified by the full technical assessment, let 
me also assure you that we have a broad range of discretion in our use 
of the 404(c) authority. A final 404(c) action in Bristol Bay 
prohibiting or restricting large scale mining activities would not 
affect other development in the watershed. CWA section 404(c) 
authorizes the EPA to prohibit or restrict discharges in a defined area 
of the waters of the United States when those discharges are determined 
to have unacceptable adverse environmental or water quality impacts. 
Discharges associated with activities outside the focus of a particular 
Section 404(c) decision are not prohibited or restricted by EPA's 
action. As a result, if EPA were to prohibit or restrict certain 
discharges from large-scale mineral development at Bristol Bay, this 
action would not preclude other development or infrastructure such as 
airport construction that had less damaging impacts.
    Historic application of this authority demonstrates that we have 
used it sparingly and only for severe and widespread impacts on 
ecological resources that we felt justified protection of these 
resources. I am unaware of any case where our decision to use 404(c) in 
one situation was interpreted to compel its use in a different set of 
factual circumstances.
    Impacts from the discharge of dredged or fill material vary 
significantly depending on the location, scale, and duration of the 
activity associated with the discharge. The impacts from using clean 
fill material to build a private boat dock are not the same, for 
example, as impacts from placing contaminated fill material to 
construct a large solid waste landfill. EPA carefully considers these 
distinctions in its review under Section 404 to ensure that our actions 
protect against unacceptable adverse impacts to public health and the 
environment while assuring that environmentally responsible development 
may proceed.
    Preparation of this letter was coordinated within the EPA's Office 
of General Counsel and with the Department of Justice. I hope it 
responds effectively to your questions. Please contact me if you have 
any additional questions regarding EPA's Bristol Bay watershed 
assessment or your staff may contact Arvin Ganesan, Associate 
Administrator for Congressional and Intergovernmental Relations, at 
202-564-5200.
            Sincerely,
                                           Lisa P. Jackson,
                                                     Administrator.

    Ms. Jackson. And I feel confident that I can answer that 
the assessment focuses on large-scale mining. And using the 
assessment to oppose or support any other type of project will 
be inappropriate.
    It's a draft assessment. It's going out for public comment 
and then it will go for peer review. So it's early on.
    Senator Murkowski. How long a public comment do you 
anticipate on that?
    Ms. Jackson. I believe it's 60 days, Senator. And we're 
trying to get it out before commercial fishing and other 
successive fishing seasons begin.
    So we do believe that it won't apply to nonmining projects, 
and that will be laid out more fully in the letter.
    Senator Murkowski. Have you requested a legal opinion to 
that effect then?
    Ms. Jackson. Well, we've coordinated with the Attorney 
General's office to ensure that our reading of the law under 
Section 404 of the Clean Water Act is correct and accurate.
    Senator Murkowski. Do you have or will you have anything in 
writing that you can provide to us on that legal opinion?
    Ms. Jackson. Well, I have the letter which will indicate 
our having consulted with our counterparts at the Attorney 
General's office.
    Senator Murkowski. Well, I understand you're going to be 
sending me a written response, and I will await that.
    But I think it's going to be important that it clearly be 
established through legal opinion, or some form of assurance 
out there that, in fact, this can be and will be limited to 
large-scale mining.
    Because again, I think the big unknown here is what this 
potential impact may mean to any other kind of development 
within this region.
    Ms. Jackson. Well, definitely, the letter will reflect the 
concurrence of opinion between EPA, but having consulted with 
the Attorney General's office, not only our internal attorneys, 
but those who would be responsible for interpreting the law.
    And so we do believe that it will do that.
    Senator Murkowski. Well, I will await that letter. But I 
may want to double back with you in just ascertaining where we 
really are.
    Because this is the big issue that we're dealing with, with 
Pebble right now, is how this, the extent of this assessment 
might be interpreted.

                       NEW RULES AND REGULATIONS

    One last question before my time has expired here. A lot of 
concern about the rush toward additional regulations coming out 
of the administration as we come to the end of President 
Obama's first term here.
    And a concern that we're going to see a rush of major, new 
rules and regulations prior to January 20.
    Can you give a list to the subcommittee, for the record, on 
what major rules and regulations are due to be final, by either 
virtue of the statute, or by court order, prior to January 20.
    [The information follows:]

    The Congressional Review Act (CRA) defines a major rule as one that 
``has resulted in or is likely to result in (1) an annual effect on the 
economy of $100 million or more; (2) a major increase in costs or 
prices for consumers, individual industries, Federal, State, or local 
government agencies, or geographic regions; or (3) significant adverse 
effects on competition, employment, investment, productivity, or 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export 
markets.'' (5 U.S.C. 804(2).)
    The Office of Management and Budget (OMB) reviews rules to ensure 
that regulations are consistent with applicable law, the President's 
priorities, and the principles set forth in Executive Order 12866, and 
that decisions made by one agency do not conflict with the policies or 
actions taken or planned by another agency. OMB's Administrator of the 
Office of Information and Regulatory Affairs determines whether a rule 
is classified as ``major''.
    Generally, the Environmental Protection Agency's (EPA) rules that 
have been determined as ``major'' under the CRA are based on the annual 
effect on the economy of $100 million or more'' part of the definition. 
EPA's Semiannual Regulatory Agenda captures information on rules that 
are ``major'' as well as any associated deadlines for the rules in 
question. EPA's Semiannual Regulatory Agenda is available at http://
www.epa.gov/lawsregs/regulations/regagenda.html; please note that a 
more updated Agenda is scheduled to publish in the very near future.
    Executive Order 12866 defines a significant regulatory action as 
one that is likely to result in a rule that may:
  --Have an annual effect on the economy of $100 million or more or 
        adversely affect in a material way the economy, a sector of the 
        economy, productivity, competition, jobs, the environment, 
        public health or safety, or State, local, or tribal governments 
        or communities;
  --Create a serious inconsistency or otherwise interfere with an 
        action taken or planned by another agency;
  --Materially alter the budgetary impact of entitlements, grants, user 
        fees, or loan programs or the rights and obligations of 
        recipients thereof; or
  --Raise novel legal or policy issues arising out of legal mandates, 
        the President's priorities, or the principles set forth in this 
        Executive order. (section 3(f).)
    EPA rules that have been determined as ``significant'' under 
Executive Order 12866 are based on the `` annual effect on the economy 
of $100 million or more'' and ``raise novel, legal or policy issues 
arising out of legal mandates, the President's priorities, or 
principles set forth'' parts of the definition.
    Accordingly, EPA's Semiannual Regulatory Agenda captures 
information on rules that are meet the criteria of ``economically 
significant'' or ``other significant.'' EPA's Semiannual Regulatory 
Agenda is available at http://www.epa.gov/lawsregs/regulations/
regagenda.html; please note that a more updated Agenda is scheduled to 
publish in the very near future.

    Senator Murkowski. And then again, a list as to those 
significant rules that you expect to go final within that same 
timeframe, just so that we understand what it is that we're 
dealing with.
    Ms. Jackson. Most certainly, Senator.
    There are two things though I just need to clarify. We have 
a regulatory agenda that tends to be somewhat broader than what 
actually comes to be in terms of proposed or final regulations.
    And we are right now in the middle of several court cases 
which may change our agenda. So I can certainly give you a 
listing of those things, and they're fairly publicly known 
major regulations that we are working on.
    For example, finalizing the fuel economy standards and 
others. But our regulatory agenda, which we're working on 
updating, is probably the best source of that information, and 
we'll get that updated as soon as we can.
    Senator Murkowski. Thank you.
    Senator Reed. We're going to go back and forth on order of 
arrival. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman. And thank you for 
being here, Administrator Jackson.
    I want to tag onto your statement earlier that clean air 
and clean water is important for economic development. It's 
also the basis of life.
    And I think that as we, whether it's mining for gold or 
drilling for oil, it's critically important we don't sacrifice 
one resource for another.

                          HYDRAULIC FRACTURING

    And along those lines, there is a robust discussion 
regarding hydraulic fracking or fracturing. Fracking is what's 
taken North Dakota to number two in oil production in this 
country.
    And DOE's advisory board, shale and gas production 
subcommittee of the National Petroleum Council, have released 
reports about hydraulic fracturing and domestic production of 
oil and gas.
    These reports provide suggested steps that the government, 
industry and researchers need to take to assure that we have a 
balanced regulatory regime to protect development and citizens.
    Just last week your agency released draft guidance on Class 
2 injection wells and the use of diesel fuel. BLM just released 
their draft regulation of hydraulic fracturing on BLM and 
Tribal Trust lands.
    And from my read, one of the most critical parts of the 
recommendation is the standards for casing and constructing 
wells.
    If there isn't public trust that this technology can be 
used safely, that will inhibit its future development. And I 
believe that the industry is starting to recognize that.
    My question for you is, do you believe that the standards 
provided by American Petroleum Institute (API) and used by the 
BLM are sufficient to protect groundwater and surface water 
contamination both during protection and into the future?
    Ms. Jackson. I believe, based on what we know now, Senator, 
our staff worked--I can't speak about API, as much as I can say 
that our staff at EPA were consulted and reviewed the proposed 
regulations that the Department of Interior put out last week.
    It's obviously their jurisdiction because it's on public 
lands. The only caveat I would offer, Sir, is that we are in 
the middle of this 2-year, congressionally directed study on 
groundwater, on the effect or potential effect of fracking on 
groundwater.
    And anything that we learn as a result of that will be 
available to the private sector, the public sector, States, 
locals, and of course, our colleagues at the Department of the 
Interior.
    Senator Tester. Another major section of the recommendation 
is about disclosure. There are many forms of disclosure.
    Do you believe that the Web site, FracFocus, provides 
sufficient information to the public?
    Ms. Jackson. I believe that the proposal that the 
Department of the Interior put out leaned heavily on the 
information in FracFocus, and that they are probably best able 
to describe how their regulations mesh with the FracFocus 
effort.
    But I do think it is an important effort that the industry 
step forward and recognize that one of the major concerns the 
public has is the lack of awareness and transparency around the 
chemicals being injected.
    Senator Tester. Okay. Thank you very much.

                            FARM FUEL TANKS

    One of the things that I visited with your office before 
about is EPA's implementing new regs on farm fuel tanks to 
prevent fuel spills into rivers and streams.
    My concern is that EPA has not adequately explained the 
rules or educated the public about them, particularly, people 
in production agriculture.
    Look, I don't think farmers have, nor should they, check 
the Federal Register or regularly check the EPA's Web site. 
Although it might be handy, I don't think it's high on their 
list and I don't think it probably should be.
    As EPA implements the regulations, and I think it's EPA's 
responsibility to make sure that the folks out there know 
what's coming. In this particular case, farmers and ranchers, 
and how they can work through the process.
    Many folks in my neck of the woods continue to have 
questions and deadlines. There's good information. There's bad 
information about the certification process, and whether they 
can certify themselves.
    I guess just to cut to the chase, we asked you to hold off. 
What progress has EPA made in conducting outreach to the folks 
in production agriculture? I'm talking farmers and ranchers.
    Ms.  Jackson. And I thank you, Senator.
    And, yes, you're right. Happy to give you an update on our 
progress after we put in place a delay to include additional 
outreach. We met with national agricultural groups who have an 
interest in the issue.
    We've drafted, and it's with their input, new materials 
that can be provided to grower groups, States, and cooperative 
extensions.
    I think just in the last week or so, we had a discussion 
with communication directors at the major grower groups to 
particularly focus and discuss other outreach efforts to make 
sure that the information is clear and useful for farmers.
    Senator Tester. Have you got any feedback from farmers on 
it yet?
    Ms. Jackson. I can certainly check on that, Sir. But I 
don't, I think we are--Let me check on it for you.
    [The information follows:]

    The Environmental Protection Agency has actively engaged in a 
significant number of outreach efforts to ensure the farmer community 
is fully aware of their responsibilities under the Spill Prevention, 
Control, and Countermeasure regulations and have the tools needed to 
meet those requirements. Our efforts have included developing a flyer 
to be used by trade associations and agriculture extension services to 
inform and educate their members; holding webinars for the farming 
community to educate and provide opportunity to ask questions regarding 
their responsibilities; attending fairs and conventions to speak and 
distribute information; compiling a list of outside materials (such as 
articles, videos, blogs, Web sites, etc.) produced by outside groups 
like agriculture centers, universities, trade associations; and 
creating and supporting a Web site with pertinent information and tools 
for farmers. At this time, we have had no additional formal feedback 
from farmers; however, we have received some anecdotal information from 
trade associations and farmers that they are finding this information 
useful.

    Senator Tester. Okay. That's fine.
    In Montana, we pride ourselves on self-sufficiency. Many 
folks in Montana are trying to use biodiesel on their farms to 
help increase energy independence.
    Unfortunately, certifying each batch of biodiesel for small 
producers is cost prohibitive. A while ago, I asked CPA to 
consider an exemption for on-farm/regional biodiesel use.
    I don't think any progress has been made on that, but you 
can correct me if I'm wrong. So I guess what I'm asking you is 
if you can commit to working with me to develop a reasonable 
certification process for small, on-farm regional use of 
biodiesel, I think this could do a lot of things, Administrator 
Jackson.
    I think it can help contribute to our energy independence. 
I also think it could create some jobs in rural America where 
we need a few more.
    Ms. Jackson. Yes, Senator. I'm not aware of what progress, 
if any, we've made. So I'm happy to commit to working with you 
on that issue.
    [The information follows:]

    Fuel and fuel additive registration requirements under 40 CFR part 
79 are not required for producers who make biodiesel fuel for off-road 
use (e.g., in agricultural equipment).

    Senator Tester. All right. Thank you very much for that. 
Thank you for being here.
    Ms. Jackson. Thank you.
    Senator Tester. Mr. Chairman.
    Senator Reed. Thank you, Senator Tester. Senator Blunt, 
please.

                           PREPARED STATEMENT

    Senator Blunt. Thank you, Mr. Chairman. I've got a 
statement for the record I'll submit and I'm sure that EPA will 
want to read it carefully.
    [The statement follows:]
                Prepared Statement of Senator Roy Blunt
    Thank you Chairman Reed and Ranking Member Murkowski for holding 
this hearing today. I appreciate the opportunity to examine not only 
the budgetary needs, but also some of the recent activities of the 
Environmental Protection Agency (EPA). I would also like to thank 
Administrator Jackson and Chief Financial Officer Barbara J. Bennett 
for being here.
    Around this time last year, I pointed out that EPA had issued or 
planned to issue almost 20 different rules placing mandates on 
manufacturing, the power industry, and even our farmers. EPA should not 
be using taxpayer dollars to impose costly and burdensome regulations 
that could severely impact jobs, our economy and the cost of everything 
we do or buy.
    Only one regulation from this list was stopped, and that was the 
expensive tightening of ozone standards that EPA publically supported 
despite the economic toll it would have. Of course this was only 
because the White House scrapped it at the last minute, no doubt 
realizing the impact in a political year.
    There is yet a new medium for EPA regulations, through something 
called ``guidance''. Guidance, in EPA's own words is ``frequently used 
by federal agencies to explain and clarify their understanding of 
existing requirements''. This says to me that guidance can have just as 
far reaching consequences as traditional rulemakings can.
    Yet guidance technically is not ``final'', so affected parties have 
no recourse to appeal the rules. This circumvents the fair procedures 
put in place to safeguard against overreaching agency action, like 
affected parties' ability to appeal to the courts.
    EPA recently came out with guidance that expands the jurisdiction 
of the Clean Water Act--meaning that EPA now can control even a stream 
that EPA ``determines'' has a close enough connection to the navigable 
waters the Clean Water Act traditionally regulates. This could have 
devastating effects for our farmers, miners, and even construction 
workers. Oddly enough, EPA still accepted comments before issuing the 
final guidance document, many of which pleaded with the EPA to use 
notice and comment rulemaking. Yet EPA did not undertake a rulemaking, 
issuing the final guidance soon after.
    This is the most recent example of the dangers of agency overreach. 
The cumulative effects of these rules are vast and probably cannot be 
determined at this time. Even EPA's own cost-benefit analysis used in 
these rules often do not include job losses or what it would mean for 
families if their food and energy prices go up.
    We all can agree that cleaning up and protecting our environment 
are important goals. Yet this must be balanced among economic losses. A 
robust economy doesn't just mean businesses are making more money; it 
means people are employed, and it means consumer choice thrives and 
keeps costs of goods low. Economic and environmental goals must be 
balanced.
    I hope the EPA can stop and consider the multitude of rules coming 
out of the Agency that threaten the economic viability of our country's 
energy, manufacturing, and agricultural sectors.
    Again thank you for your time, and I look forward to your 
testimony.

    Senator Blunt. I've got three questions I want to ask about 
three areas.

                           FUEL HARMONIZATION

    One is fuel harmonization, a fuel harmonization study. I 
sent you a letter in May of last year. The Ranking Member of 
this subcommittee--Senator Murkowski--Senator Cochran, a number 
of my other colleagues signed that letter as well.
    In 2005, in the Energy Policy Act, EPA and DOE were asked 
to do a fuel harmonization study. One of the things we did in 
the Energy Policy Act was give you the ability to waive fuel 
standards under certain difficult situations to where all of 
these different boutique fuels wouldn't all have to be 
available under specific circumstances.
    The most notable time it was used was during Katrina. It 
was used effectively and well for about 6 months. But that's a 
stop-gap solution to trying to figure out how many different 
fuel blends we really need.
    So what I'm asking is, why haven't you done the study? The 
response to the letter we sent in May of last year was pretty 
much nonresponsive. It was basically, we received your letter 
response.
    The 2005 Act asked the Department to do that. You haven't 
been responsible since for all that time. I get that. But can 
you do that study as the Congress requested you to do?
    Ms. Jackson. Well, Sir, just a couple of points.
    I think the reason that there hasn't been a commitment to 
do the study is that on the ground we see that these local fuel 
requirements. They're put in place by State regulators looking 
at smog issues and air pollution issues in their regional 
districts.
    The use of those special fuels has decreased since 2002.
    Senator Blunt. Has decreased?
    Ms. Jackson. Decreased. Yes, Sir.
    Senator Blunt. Yes.
    Ms. Jackson. And that we do know about, the effect on the 
price of gasoline: they add very little to the cost of 
gasoline.
    So we have people using fewer and fewer of these fuels. We 
know that they are not adding significantly to the price of 
gasoline, and we know that they are used in the places where 
there are still remaining summer fuels issues. I know that 
certainly from New Jersey that it is important----
    Senator Blunt. Well, there was a Kansas City Star, there 
was a Kansas City Star article recently that said that their 6-
year study indicates that the average has cost 10 cents more 
per gallon because of their boutique fuel.
    So, you know, if I'm standing there watching that tank and 
every time I fill it up it costs me 10 cents more a gallon and 
I live in Kansas City, I would think that was significant.
    Ms. Jackson. Well, the----
    Senator Blunt. But the question is, can you come up with a 
series of fuels that people could choose from rather than this 
idea that every community has a perfect fuel that's only right 
just for it? That's what the study asked if you could do.
    Ms. Jackson. Yes, Sir. And I think what I'm trying to 
convey is that the market is moving toward fewer and fewer of 
that kind of situation happening.
    More and more, we see some regions that have regional 
blends, but fewer and fewer specialized, local blends. And so, 
the market is taking care of the problem itself.
    What's remaining are those fuels where State regulators 
have determined that there's a need to have a special fuel in 
summer to reduce smog levels because of an increased 
volatilization of gasoline.
    So I understand your concern for the issue. I guess I'm 
offering, respectfully, that I think the issue is, the impact 
on cost is not that high, and that there aren't as many fuels 
that are truly unique in the country.
    Senator Blunt. Well, we capped the number of fuels you 
could have in that same act, so that does have some impact on 
how many more there could be.
    All right. That was not quite as nonresponsive as the 
letter, so I'll accept that.

                            CLEAN WATER ACT

    The Clean Water Act guidance. A lot of concern about 
moving, removing the word ``navigable waters'' from the Clean 
Water Act. Give me some thoughts. Why guidance instead of a 
rule?
    You all have issued some guidance, and I'm not sure anybody 
really quite knows how binding guidance is, or what guidance 
means, except guidance doesn't go through the rulemaking 
process.
    So this guidance, it looks like to me, suggests that 
anything that eventually gets into, extends the authority to 
streams, ponds, or even maybe puddles that the EPA would 
determine has a connection to a larger body of water.
    Not true?
    Ms. Jackson. Not quite, Senator.
    First, to your question as to why guidance? In the wake of 
the two Supreme Court decisions in both 2003 and then 2008, the 
EPA and the Corps of Engineers (COE) jointly issued guidance to 
assist in determining what water bodies were jurisdictional 
under the Clean Water Act.
    That has widely, I think, very widely, been seen as not 
being helpful enough. So COE and EPA have set out, and we have 
not issued final guidance, but we issued draft guidance, I 
believe last year, and took public comment on it.
    And are working to finalize guidance that would replace the 
2003 and 2008 guidances. So that is why, guidance.
    As to your concern about extending jurisdiction. The 
guidance is intended to help answer the question of, in a 
navigable water body, certainly we know what ``navigable'' 
should be or can be, although there have been even disputes 
about ``navigable''.
    But how far up in the watershed do you have to go? Since 
certainly, in order to protect navigable waters, you have to 
protect the streams that feed into them otherwise, you know, 
you don't stand a chance.
    So that's what the guidance is intended to do. It has been 
out in draft and for public comment, and we're working to 
finalize that, Sir.
    Senator Blunt. Well, why guidance rather than a rule?
    Ms. Jackson. Well, the guidance will replace the guidance 
that's currently out there. Certainly, a rulemaking could be 
considered, but we believe it's better to start with the 
guidance and then we can certainly move towards a rule if 
necessary.

                      PORTLAND CEMENT ASSOCIATION

    Senator Blunt. Okay. The last question I had is short and 
can get a short answer I think.
    In mid-April, EPA entered into a proposed settlement 
agreement with the Portland Cement Association. And, do you 
intend to finalize that agreement?
    I think they've accepted the proposed settlement, and are 
waiting for you to accept it as well.
    Ms. Jackson. Yes, Sir. To my knowledge, I don't think 
there's any concern with finalizing our agreement.
    Senator Blunt. Okay. Thank you, Chairman.
    Senator Reed. Thank you, Senator Blunt. Senator Hoeven, 
please.
    Senator Hoeven. Thank you, Mr. Chairman.
    I want to begin by thanking you, Administrator Jackson, for 
your help with North Dakota's State Implementation Plan (SIP) , 
in regard to regional haze. We do appreciate that.
    We're not quite completed. We've resolved it for a number 
of our plants, but there's still some work remaining and I ask 
for your continued help as we continue to fully resolve that 
issue on regional haze as to continuation of the State's SIP 
versus a FIP on some of our plants.
    So thank you for your help. And I ask for your continued 
help in that regard.

                          HYDRAULIC FRACTURING

    My questions, at least my initial questions, relate to 
hydraulic fracturing. As Senator Tester said, North Dakota is 
now in the process of moving into becoming the second-largest 
oil producing State in the country behind Texas.
    The good Senator from Alaska, Senator Murkowski, of course, 
I share her desire to produce much more oil and gas in Alaska. 
I know that's going to happen too.
    So, long term, we know that you're going to be a real 
powerhouse. But the point I want to make is that we can't do it 
without hydraulic fracturing. We cannot produce oil and gas 
without hydraulic fracturing.
    So it's incredibly important to us. And a State-led 
approach is the right approach. It's working very well. It will 
continue to work very well.
    So we're concerned about regulations that you're proposing 
in regard to hydraulic fracturing, and also, we're very 
concerned about how you conduct the study. We are very 
supportive of transparency, good environmental protection, and 
we believe we work very hard to do that.
    But, at the same time, we believe that the State-led 
approach not only provides those things, but also empowers the 
industry to produce more energy for this country.
    So, specifically, I want to ask you about, and it's 
interesting, because Senator Blunt was asking about guidance 
versus rules. And I think he made some very important points as 
to what is guidance mean, and how do we deal with guidance?
    But on May 4 of this year, EPA released a draft permitting 
guidance regarding the use of diesel fuel in hydraulic 
fracturing. Now, on the one hand, in that draft guidance, you 
refer to six chemical abstract service registry numbers. So 
you're specific. And we're working with industry to find out if 
those specific, defining those specific chemicals as diesel is 
a workable situation.
    But then you go on in this draft guidance and you use terms 
like, in addition to those six chemicals. You talk about 
substantially similar. You talk about several others. You talk 
about common synonyms.
    So we go from specifically defining what you're going to 
consider diesel in this guidance. And, as Senator Blunt says, 
we've got to understand, with a State-led approach, what does 
guidance mean?
    In other words, does the State have to follow your guidance 
or you'll step in and take over the program? Or, exactly, what 
do you mean by guidance?
    And, then, second, when you specifically define those 
chemicals by registry number, okay, maybe we can work with 
that. But then, when you start saying, you know, several 
others, substantially similar, common synonyms. Now we get 
vague, and creates ambiguity.
    So my question to you is, in your final guidance, will you 
continue to use language like substantially similar, several 
others, and common synonyms? That's my first question.
    Ms. Jackson. The guidance is out for public comment, Sir. 
And I should note that we worked with industry in the drafting 
of it. But the purpose of the public comment is to get 
information, and I can't really pre-judge what will happen on 
finalization.
    Senator Hoeven. Would you comment as to my point regarding 
the ambiguity and the vagueness and the problems it creates for 
industry if you say, well, it's this chemical. This is diesel, 
but, gee, it could be all these other things and we're not 
going to say what they are.
    Now, industry has to work with that. How would you address 
that?
    Ms. Jackson. Well, I think we're happy to have discussions 
with industry so that there is some clarity. And synonym is 
pretty straightforward.
    If you call it something different by trade name, or some 
other thing, I think, the implication there is clear, that you 
shouldn't be able to name it something different, and 
therefore, not have it subject to the guidance when it is 
finally put in place.
    As far as substantially similar, we certainly can have 
additional comments on that.
    I should just add, Sir, that the reason for that guidance 
is because there was something of a loophole in the exemption 
from regulation for hydraulic fracturing under the underground 
injection control standards.
    And the one thing that wasn't exempt was the injection of 
diesel. And there was great uncertainty in the regulated 
community that whether or not when they injected diesel, they 
needed a permit.
    And in some States, EPA issues those permits, not the 
State. They did not receive delegation or sought it.
    Senator Hoeven. If they don't have primacy, that's correct.
    Ms. Jackson. That's right, Sir.
    So this is not an attempt to change. There are many States 
that already deal with this issue.
    But there was ambiguity and uncertainty as to how to deal 
with those cases where someone was injecting diesel.
    And that's what this guidance is attempting to give 
additional information on for permit writers, as well as the 
regulated community.
    Senator Hoeven. Administrator, I'm trying to get to two 
points here.
    If we're going to empower industry, and if we're going to 
empower investment to produce more energy in this country and 
do it with good environmental stewardship, they need to know 
the rules of the road, and they need consistent enforcement.
    If you say, okay, this is diesel and they can understand 
that, fine. Then perhaps they can work with that. I mean, I 
have to understand what those six chemicals are, and we have to 
get some feedback from them. Hence, the reason for the proposed 
draft guidance.
    So we need to find that out. Maybe that works. We need to 
determine that. But then when you say, or it could be all these 
other things like that, now we're starting to get ambiguity and 
a vagueness that is very hard for industry to work with.
    So we need you to work with us through that process.
    Ms. Jackson. And I'm happy to do that, Sir.
    I mean, we're in public comment, and we will finalize the 
guidance. But part of the reason for the comment is to get 
information and to try to assure that we do remove ambiguity 
from the process.
    We have the same goals, Sir.
    Senator Hoeven. Thank you. And I have more questions, but 
I'll come back to them. I see my time has elapsed.
    Senator Reed. Thank you, Senator Hoeven. We will have a 
second round.
    Let me begin it by continuing the line of questioning that 
both Senator Tester and Senator Hoeven opened up with respect 
to hydraulic fracturing, but from a slightly different 
perspective.

                       HYDRAULIC FRACTURING STUDY

    Your budget includes $40 million to deal with this topic--
an increase of $8 million.
    And I think we all recognize, and it's explicit in the 
comments, that we don't want to trade access to the very 
valuable petroleum and carbon resources at the cost of degraded 
water supplies and environmental problems.
    I think that's our position consistently across the board. 
So your research is absolutely necessary and your collaboration 
with industry is absolutely necessary.
    Your money is part of a larger pool of about $45 million 
that the President has directed throughout several different 
Departments. One thing though that we did in 2010 is we 
directed EPA, specifically, to initiate a multi-year study on 
the potential impacts of hydraulic fracturing on drinking water 
resources, to be specific.
    And I understand the first report for the study is 
scheduled for the end of this year, 2012. Is the EPA still on 
track to meet this timeline, and can you give us sort of a 
preview of what information that might be revealed?
    Ms. Jackson. We are still on track, Sir. And I have not 
been briefed on any preliminary findings, so I'm not in a 
position to give any information at this point.
    Senator Reed. Let me again look at sort of the overall 
approach to the research with respect to hydraulic fracturing.
    On April 13, the President issued an Executive order to 
align all current and future research which, again, I think we 
all say is absolutely necessary for the protection of the 
public, made up of 13 Federal agencies.
    On that same day, EPA joined DOE and the United States 
Geological Survey in signing a Memorandum of Agreement (MOA) 
creating a new steering committee. So we've got what appears to 
be two steering committees here.
    Can you explain these two efforts, does one subsume the 
other? Is one parallel, is one complementary? Can you just give 
us an idea of the approach you're taking administratively?
    Ms. Jackson. Yes, certainly.
    The Department of the Interior, DOE, and EPA are currently, 
obviously at the order of the President, and under the 
direction of the White House, working together to scope out a 
series of studies.
    You're absolutely correct, Mr. Chairman. Of course, EPA 
already had an ongoing 2-year study. That goes on about $6 
million in EPA's fiscal year 2012 enacted budget is for it. 
There's now an $8 million increase, and we would be looking to 
expand the scope potentially, but only working together with 
the other agencies to other issues, maybe ecosystem impacts or 
air quality.
    Some amount of that additional $8 million, that's in the 
fiscal year 2013 budget, would go to those areas.
    Senator Reed. Let me follow up with another related 
question. That is, you have this Memorandum of Understanding 
with USGS which presumably you would allocate the 
responsibilities.
    It appears from the budget request that part of the $8 
million of additional funds you're going to use is for seismic 
risk from hydraulic fracturing practices. And we understand 
that USGS is also studying, no surprise, seismic risk, et 
cetera.
    Can you comment upon this? Is this duplication, or is it 
complementary?
    Ms. Jackson. I want to go back and check on that, Mr. 
Chairman, because in general, my response on seismic issues is, 
it's not us. That's USGS.
    [The information follows:]

    The fiscal year 2013 President's budget requested for hydraulic 
fracturing (HF) research includes $6.1 million to complete the study 
plan on the potential environmental impacts of HF on drinking water; 
and an additional $4.3 million to address questions raised by 
stakeholders regarding the potential environmental impacts of hydraulic 
fracturing on water quality and ecosystems. Of the $4.3 million 
request, less than $100,000 was intended to screen for HF induced 
seismic risks in association with underground injection control wells.
    Subsequent to the submission of the fiscal year 2013 President's 
budget, the MOA between the EPA, DOE, and USGS on Multi-Agency 
Collaboration on Unconventional Oil and Gas Research was developed. 
During the MOA's development, it was determined that the USGS is best 
suited to manage research in induced seismicity. As defined in the MOA, 
EPA will collaborate as appropriate with USGS regarding seismic issues.

    Ms. Jackson. So I don't believe we're doing a lot although 
we may be providing some expertise on the groundwater aquifer 
regimes down there. But they're pretty much the experts in 
USGS.
    Senator Reed. Well, you know, that was my presumption too. 
So I think if you could clarify that, that would be helpful to 
us.
    And, you've already mentioned some of the additional 
resources, about $3.8 million is going to go to air quality 
studies.
    Can you give us an idea of the concept of how you're going 
to spend that money with respect to the hydraulic fracturing 
and air quality?
    Ms. Jackson. I think we would probably be best served if we 
gave you a briefing update. The scoping meetings that have just 
begun to look at the potential ways to scope these research 
studies, are just really beginning.
    I think they've had a couple of meetings so far. So it's a 
little premature. But, obviously, we have the opportunity over 
time to update you on those as well.
    There have been some. Obviously, we just finalized rules on 
air quality issues around oil and gas development. They were 
not loved by everyone, but that's usually okay in our world. 
They were pretty well received.
    And I think one of the things we were doing is trying to 
look at additional information to ensure we're not missing 
something.

                    ENVIRONMENTAL EDUCATION PROGRAM

    Senator Reed. Well, let me change the subject for my final 
and brief comment, which I think will require a brief response 
from you.
    That is, we've had an environmental education program 
through EPA for many, many years. In fact, my distinguished 
predecessor, John Chafee, I think in 1990, through the National 
Environmental Education Act put it in place.
    And the proposed budget would require severe reductions in 
this education program which raises the question, why that 
program?
    The bottom line is, how do you continue to maintain the 
legal requirements under the 1990 legislation?
    Ms. Jackson. Yes, Sir. Let me limit it to two very quick 
things.
    First, I want to assure you, we remain committed to the 
spirit and goal of environmental education and increasing 
environmental literacy.
    What we found from an efficiency standpoint in EPA is when 
we looked at the program as it was being funded, we believe 
there is better opportunity to do more and do it better in the 
programs by each of the programs, air, water, waste, or some 
amount of it, maybe recycling and waste, or energy and air.
    Letting the programs put forth those educations and then 
coordinating their efforts. So there will be resources going 
towards environmental education. They're going from the 
programs.
    I also want to say that we're working really hard to have 
our national environmental education foundation, which was also 
in that law, become more active and vital in helping to promote 
some of those opportunities.
    Senator Reed. Thank you very much.
    With the concurrence of the Ranking Member, Senator Cochran 
has just arrived. We've already had a first round, Senator. If 
you would like to take your first round now, if you're 
prepared.
    Senator Cochran. Well, Mr. Chairman, I do have a question I 
was going to ask the Administrator.
    Senator Reed. Go ahead, Sir.

                             DESOTO COUNTY

    Senator Cochran. In DeSoto County, Mississippi, which is 
our northernmost county in the State, and adjoins the State of 
Tennessee, right at the Memphis metropolitan area, is one of 
those situations where the metropolitan area of Memphis spills 
over into both Arkansas and Mississippi.
    Anyway, the point is, that I wanted to bring to the 
attention of the Department something that really came to my 
attention because the DeSoto County area has been declared by 
EPA to be in a state of nonattainment.
    One of the new bureaucratic words--``Nonattainment''. What 
it means is, you can't build anything or do anything in terms 
of urban growth without jumping through a lot of new hoops and 
abiding by rules that really are beyond the control of local 
elected officials or the population or zoning authorities.
    And I just wanted to bring to the attention of the 
Administrator that this is really, I think it's discrimination 
of the worst kind in terms of rulemaking by the EPA.
    And I just hope that the highest authorities at EPA and in 
the Department can give their attention to this to see what are 
the options for continued growth in that area.
    Anyway, I don't know whether this has reached your desk or 
not, Madam Administrator, but I wanted to bring it to your 
attention. Are you familiar with this? Or has anybody, Ms. 
Jackson, brought this to your attention personally?
    Ms. Jackson. Yes, Sir.
    And I know that area staff at the very highest levels have 
met with Mississippi Department of Environmental Quality staff. 
There was data that was exchanged.
    The nonattainment designation is not a no growth 
designation, Sir. DeSoto County, that part of the county that's 
being designated nonattainment for small growth zone, is really 
part of the municipal area around Memphis.
    And it has to do with commutation patterns and growth in 
terms of primarily automobiles and others within the Memphis 
urban boundary. It's a matter of working with the Memphis 
Metropolitan Planning Organization of which that portion of 
DeSoto County is a part.
    And so we have explained to them that as cars become 
cleaner and more efficient, we do foresee a time when this 
nonattainment issue will, through other Federal rules, become 
less of a concern.
    But the attainment and the nonattainment designations, are 
based on data. And we have to make calls based on what we have 
which show that the area is contributing.
    That's what the law says, whether it contributes to 
nonattainment in the nonattainment area.
    So I believe where things were left is that they met 
recently with Mississippi, and I'm not sure what happened as a 
result, but I can certainly check on that for you.
    Senator Cochran. Well, I would hope that you could give 
this your personal attention to be sure that the obvious intent 
of the rules and the laws are fairly applied particularly in an 
area that is a very popular area for job creation activity and 
business activity, that is not a very serious polluter in and 
of itself.
    Working in an office, you're not going to pollute a lot. 
But office buildings and the like would be attracted to this 
area if it were not for the EPA nonattainment ruling.
    So I hope that you can help ensure that fairness is the 
result rather than arbitrary rulemaking without a basis in 
fact. Thank you, Mr. Chairman.
    Senator Reed. Thank you, Senator Cochran. Senator 
Murkowski, please.

                       HYDRAULIC FRACTURING STUDY

    Senator Murkowski. Thank you, Mr. Chairman.
    Administrator Jackson, I want to follow up with a 
discussion about the hydraulic fracturing study. I've got a 
copy of the actual statute here from 2010.
    And it states, ``The conferees urge the Agency to carry out 
a study on the relationship between hydraulic fracturing and 
drinking water, using a credible approach that relies on the 
best available science, as well as independent sources of 
information. The conferees expect the study to be conducted 
through a transparent, peer-reviewed process that will ensure 
the validity and accuracy of the data. The Agency shall consult 
with other Federal agencies as well as appropriate State and 
interstate regulatory agencies in carrying out the study, which 
should be prepared in accordance with the Agency's quality 
assurance principles.''
    So I guess I'm a little concerned about the scope of the 
study that we're seeing come out. You've just mentioned in 
response to the Chairman here that you're expanding the scope 
of the study to address not only ecosystem but air quality.
    It's my understanding that now part of the study includes 
collecting data on the environmental justice impacts on 
disadvantaged communities.
    It seems to me that the language in the legislation was 
pretty clear in terms of assessing the relationship between 
hydraulic fracturing and contaminated water. And that there has 
been a very stepped up increase and expansion of scope.
    Can you address that part of it?
    Ms. Jackson. I can, Senator.
    And if I misspoke before, I shouldn't have. This is not an 
expansion of the congressionally directed study.
    We have a congressionally directed study. You read the 
scope of it. That is the scope we've kept to. It's been 
publicly scoped. There's been peer review of the actual scope 
of the study.
    The study is ongoing, and we, of course, have had to work 
with industry in order to get access to some of the sites. 
Because if you want to test around hydraulic fracturing sites, 
many of them are in private ownership.
    There is, on the part of the administration, from the 
President, from the White House, a desire to do additional 
science around hydraulic fracturing, partially as someone said 
earlier, because the public's trust in that technology we 
believe is also based on the belief that we are looking to 
bring the very best science to bear to ensure that it remains 
safe.
    I have said over, and over again, that natural gas, 
hydraulic fracturing, and fracturing for oil is an incredibly 
important part of our energy mix, but we need to assure the 
American public that we are stepping up to the challenge in 
getting the best science so that it remains as safe as it 
possibly can be.
    So it is not an expansion of the scope of the study. It's a 
proposal in the President's budget to add funding to do studies 
in additional areas, and those would be done with the 
Department of the Interior and DOE.
    Senator Murkowski. Okay. So I would agree with you in terms 
of the science there. But it's my understanding that part of 
the study now includes collecting data on the environmental 
justice impacts of disadvantaged communities.
    So it seems to me that you're presuming that there is an 
impact. I guess I look at it and say, it would be more 
appropriate to look at these impacts only if you do discover 
that there is a link between fracking and contaminated water 
first.
    So I don't disagree with you that we want to be using best 
science, not only through the study that EPA is doing, but what 
the other agencies are doing as well.
    But it would appear to me that there is an added expansion 
here in terms of the scope. You've indicated that it will be 
peer reviewed as the statute requires, and that industry has 
provided input in terms of giving access to data.
    Will industry and others be permitted to review the study 
before it's released?
    Ms. Jackson. The study will be put out for public comment, 
but it will also be peer reviewed during the process. We can 
get you a briefing on exactly the steps.
    [The information follows:]

    Later this year, we will update our peer-review plan to describe 
the steps we are taking to assure peer review of the specific research 
products comprising the study. In addition, we are forming a new 
Science Advisory Panel (SAB) panel later this year that will consult 
with the Environmental Protection Agency (EPA) periodically on the 
progress of the study and ultimately review the conclusions and 
findings in the 2014 report.
    The public, including members of the oil and gas production and 
service companies and industry associations, as well as other Federal 
agencies, State and interstate regulatory agencies, nongovernmental 
organizations, tribes, the public, and others will have comment 
opportunities built into the workings of this SAB panel.
    In fiscal year 2013, EPA requested a total of $14.1 million for 
hydraulic fracturing. This includes $6.1 million to complete the study 
plan on the potential environmental impacts of hydraulic fracturing on 
drinking water. In response to stakeholders concerns, an additional $8 
million was requested.
    To address the potential environmental impacts of hydraulic 
fracturing water quality and ecosystems, $4.3 million and $3.7 million 
to address questions about the potential impact of hydraulic fracturing 
on air quality.

    Ms. Jackson. I know that original data that comes out will 
go out for public comment to everyone after it's been reviewed.

                         EMISSION CONTROL AREA

    Senator Murkowski. Let me ask you a question about the 
standards that relate to the low sulphur fuel standards rules. 
These are on freight carriers and cruise ships bound for 
Alaska.
    The new standards start this August. It ramps up over a 3-
year period to reduce the sulphur emissions.
    We, as you know, are a State that relies on almost all of 
our freight, everything that comes into the State pretty much 
comes to us by barge, by freight, over the water.
    And there's a great concern that this standard could cause 
what is anticipated to be a 20-percent rise in freight costs. 
If you look at the cost of goods in Alaska already, they're 
astonishingly high. So 20 percent is really a great deal of 
concern.
    We recognize that this is going to increase the cost of 
living in Alaska at a time that we can't handle it. We're also 
concerned because it could have a very serious impact on the 
State's tourism industry.
    Our cruise ships carry 80 percent of the State's summer 
tourists to Alaska and the concern is that this will, these 
standards will increase the cost to those who are coming north.
    There is further concern that we simply won't, or the 
industry won't, be able to meet the deadline because the 
maritime industry won't be able to obtain the 1-percent sulphur 
fuel without blending different types of fuel that increase 
operational and safety issues.
    So there's a real concern about their ability to meet the 
standards in the first place. The marine industry's been 
working with EPA on this issue trying to determine if there's 
an alternative compliance mechanism that could ultimately 
result in lower overall air emissions than even what the EPA 
rule would actually produce.
    There have been efforts. I understand that they have not 
yielded a positive result at this point in time. So the 
question to you is whether or not the EPA will give serious 
consideration to accepting the pending alternative compliance 
proposal and do so soon.
    The cruise industry basically has to set their schedule 
well more than a year out, and the obvious concern is that if 
there isn't discussion and action on this in the very, very 
short term, we're all going to see and suffer the consequences.
    Ms. Jackson. Well, certainly, Senator, EPA will continue to 
give serious consideration to any issues of compliance or fuel 
availability.
    We've been told by fuel suppliers that they expect to make 
fuel available for the August 1 date for 10,000 parts per 
million fuel. Obviously, we'll continue to work with them and 
keep an eye on that.
    This standard was adopted by the International Maritime 
Organization (IMO). And we've made clear that we support the 
use of innovative equivalent methods, but only as long as they 
achieve the same results as the standard that they're intended 
to replace.
    I know that IMO is currently working on guidance to ensure 
that equivalent methods that any country tries to approve are 
based on a common set of criteria.
    And EPA will continue to work with the Coast Guard, we'll 
work with IMO, we'll reach out to the suppliers, and, of 
course, to the folks who use the fuel in meeting the 10,000 
part per million standard in August.
    Senator Murkowski. Well, this is something that we need to 
have further discussion on.

                            AMBIENT TESTING

    There has been no ambient testing done in either Alaska or 
Hawaii. We've been attempting to make that distinction. So far, 
it has not been considered which I think is unfortunate.
    You indicate that the fuel suppliers can make the fuel 
available. Yes, fuel can be made available, but at what cost?
    And, truly, and in an effort to deal with these 
extraordinarily--You cannot put a 20-percent increase on the 
cost of freight that comes into the State of Alaska and expect 
people to be able to continue to buy groceries or lumber or 
whatever it is that they need.
    We've got to have some ability to work with you on this. 
This would be one of those issues that I would hope that your 
senior folks sitting down with our folks can have a further 
discussion on.
    Ms. Jackson. To be clear, Senator. I'm not, I'm certainly 
not saying, well, we don't want to discuss this further with 
you. And I don't know that we necessarily agree with the 
outcome of the study that you cite.
    But I do think we would agree that it has to be affordable 
and it has to be practical.
    Senator Murkowski. Thank you.
    Senator Reed. Thank you, Senator Murkowski.
    Senator Blunt.

                          HYDRAULIC FRACTURING

    Senator Blunt. Thank you, Chairman.
    Let me ask a couple of other questions on this hydraulic 
fracturing issue. You may have answered this already, and I was 
trying to listen and I just may have missed the answer.
    Report language in the fiscal year 2010 appropriations bill 
asked for a study whether there was a link between the 
hydraulic fracturing and drinking water. You're asking for $14 
million more to expand that study, is that right?
    Ms. Jackson. There is an additional $8 million, I believe, 
pulling out my card here. It's a total of $14 million.
    But some of the money is to do the study that was 
authorized in fiscal year 2010. And there's an additional 
request for $8 million to do additional work outside the scope 
of that study.
    Senator Blunt. And when will you expect to get that study 
done, since the fiscal year 2010 study isn't done yet?
    Ms. Jackson. Well, we have just begun meetings with the 
other Federal agencies that will be involved with the studies.
    And so I can't give you details, but we're happy to 
continue as I mentioned earlier.
    Senator Blunt. And does that study stop us from moving 
forward with hydraulic fracturing?
    Ms. Jackson. Well, this is science. This is science. This 
is intended to ask and answer questions related to hydraulic 
fracturing. So it's research, Sir.
    Senator Blunt. So it doesn't set any obstacle in the way of 
hydraulic fracturing anywhere it's going on, or did we have to 
have the drinking water study before certain things could be 
done?
    Ms. Jackson. No, Sir. Hydraulic fracturing, as you heard, 
is continuing apace.
    And what I've said about the drinking water study is that 
if we learn things that teach us better ways to protect 
drinking water, certainly we're going to share that with all 
the people who are out there as our partners trying to protect 
drinking water.
    But we don't have any results yet. The first results will 
be toward the end of this year.
    Senator Blunt. So you are moving forward with the drinking 
water part of the study?
    Ms. Jackson. Yes, Sir. That's the one that we have funding 
for. It was directed by the Congress.
    This is a budget request for additional studies coordinated 
across EPA and other agencies.
    Senator Blunt. And if this budget request isn't met, you 
would still do the drinking water study?
    Ms. Jackson. Provided that portion of the $14 million, and 
I think it's $6 million in fiscal year 2012, that we already 
have then.
    So, yes, the answer to your question.
    Senator Blunt. How much was provided in fiscal year 2010?
    Ms. Jackson. Let us grab the number for you while we sit 
here, but we believe it was $2 or $4 million.
    [The information follows:]

    $1.9 million and three full-time equivalents were provided in 
fiscal year 2010.

    Ms. Jackson. The study on drinking water in fiscal year 
2011 was enacted with $4.3 million and $6.1 million in fiscal 
year 2012.
    And then there's $4.1 million in the present budget for 
fiscal year 2013. But the study is----
    Senator Blunt. So the drinking water study would cost 
around $14 million?
    Ms. Jackson. Four plus six, 12, yes, Sir.
    Senator Blunt. And you've asked for another $8 million to 
start this new series of studies.
    Ms. Jackson. Yes, but other agencies are asking for 
additional funding as well.
    So as the Chairman mentioned, I believe it's $45 million in 
total additional research around hydraulic fracturing.
    Senator Blunt. And what you would hope to find out is that 
even if drinking water wasn't affected, that wastewater 
treatment plants were, or other water sources were?
    Ms. Jackson. The general areas have been air quality, water 
quality, and ecosystems. We have had other issues that States 
have dealt with, or are dealing with. Wastewater, certainly, 
surface water can raise some concerns.
    But the idea is to ask the questions so that the American 
people know that their Government is doing the research to 
ensure we stay in front of any issues before they develop.
    Senator Blunt. And we would expect to see the drinking 
water study, when?
    Ms. Jackson. The initial results would be at the end of 
this calendar year, Sir. But the study goes on an additional 
year after that.
    Senator Blunt. Thank you. Thank you, Chairman.
    Senator Reed. Thank you, Senator.
    Senator Hoeven, please.
    Senator Hoeven. Thank you, Mr. Chairman.
    I would like to follow up on Senator Blunt's question as 
well as Senator Murkowski.
    You're more than doubling your budget for hydraulic 
fracturing.
    How can you make the argument that you're not greatly 
expanding the scope of the study?
    Ms. Jackson. Well, I hope it's not a matter of semantics. I 
just want to be clear.
    The study that we were directed by the Congress to do, we 
are doing. And we're seeking the funding we need, and we 
already have the authority to continue and complete it. That 
will happen.
    But to be, you know, but the President has also said we 
need to do additional science to assure the American people 
that we're looking at hydraulic fracturing. So there is 
additional money proposed in the fiscal year 2013 budget to do 
additional studies.
    Senator Hoeven. So is that broken out between what is 
required to do the study, as defined in scope by the Congress, 
and the additional work that you just referenced?
    Ms. Jackson. Yes, Sir.
    The total funding for research in the fiscal year 2013 
request is $14.1 million. And I believe, I saw a number 
somewhere else, that about $4 million of that is for the study 
that is ongoing.
    Senator Hoeven. This also relates to the earlier question I 
was asking you about guidance.
    When you provide guidance then, because whether it's 
pursuant to this study or proposed rules that you've already 
put out. Like we're talking about, for example, diesel fuel.
    Where we have a State primacy program, which we have with 
hydraulic fracturing, when you issue guidance, is the State 
required to follow that guidance or risk having you take over 
their program?
    Ms. Jackson. First, EPA is not looking to take over the 
State programs.
    But if the State is acting as the primacy agent for the 
underground injection control program, the guidance is intended 
to tell them how to meet the requirements of law under that 
program.
    Many States have their own laws that either supersede, that 
add to, or supersede, or go further than Federal standards.
    But for a State who says, listen, my permit that I issue is 
also intended to be an underground injection control permit, so 
EPA doesn't have to issue a separate one, this is the guidance 
the study is intended to say here is how EPA views the 
injection of diesel, because diesel is not exempt.
    The injection of every other chemical is exempt by law, so 
EPA does not permit that injection. Many States do, but EPA 
does not.
    Senator Hoeven. But it's important to distinguish between a 
rule and between guidance and understand that under a State 
primacy program, the State has the authority to make its own 
determination.
    They can take into account your guidance, but that doesn't 
give EPA the authority to step in front of the State on a State 
primary program.
    You would agree with that?
    Ms. Jackson. Yes, guidance is intended to give a State, 
guidelines to know how EPA believes to meet the requirements of 
the regulation. So the regulation tends to be broader. It talks 
about the injection of any number of things.
    But with respect to diesel and hydraulic fracturing, there 
was an omission. There was nothing that told a State, or in 
some States, EPA does indeed write those permits. What a 
Federal or State permit writer would need to do to assure that 
their meeting the requirements of the Safe Drinking Water Act.
    Senator Hoeven. And as you do this study, and again, we've 
got to look at the scope of the study as was defined by the 
Congress and your funding, it's very important that you are 
specific in the guidance so that States understand it and 
industry understands it, and can use that as a guidepost.
    And you agree with me, it is a guidepost. It is not the 
same as a proposed rule.
    Ms. Jackson. It does not have the same stature as a 
rulemaking, but it is not uncommon for EPA to issue permit 
writers guidance on how to meet the requirements of a law.
    So the EPA does issue guidance often, and it's for Federal 
and State permit writers, but it is not the stature of a 
rulemaking, Sir.
    Senator Hoeven. And if you'll work with us both in terms of 
collaborating with States, with the tribes and with industry, I 
think we can help make that guidance more effective in a way 
that creates some rules of the road that the industry 
understands, again, produce more energy, and have good 
environmental stewardship.
    So we ask for your consultation.
    Ms. Jackson. Absolutely. More than just public comment, our 
State partners and tribal partners, have a special role in 
implementing and understanding these issues. And we want the 
same thing, Senator.
    We want certainty, and we want clarity. And that's not what 
we had before. We had people threatening to sue because diesel 
was being injected, and permits were not issued.
    And so that's what this guidance is intended to address.
    Senator Hoeven. On some of our reservations, particularly, 
Three Affiliated Tribes Reservation in North Dakota doing a 
tremendous amount of drilling. The tribes are doing a fantastic 
job working with industry to do that.
    Their concern is in regard to the Synthetic Miner Source 
Rule. Right now we operate under a consent agreement that 
expires, or the tribe does, excuse me, they're operating under 
a consent agreement, that expires at the end of July.
    And it is very important that we get a workable rule in 
place. Both the tribes and the industry want to be, consult 
with you, in establishing that workable rule. But they need a 
rule by the end of July here.
    Otherwise, unless the consent decree is extended, they 
can't keep drilling wells. So I would strongly encourage you 
assisting Region 8, manager Jim Martin, in making sure that we 
get a solution there.
    Now, I believe there is some dialogue going on. Tex Hall, 
the Three Affiliated Tribes chairman, wants consultation here, 
but we need a workable rule. We need something in place by the 
end of July for both the tribe and the industry.
    And I ask for your help to the Regional Administrator to do 
that, and again, with good consultation.
    Ms. Jackson. Yes, Sir.
    Senator Hoeven. The other item, well, I see my time has 
expired. I have one remaining item.
    Senator Reed. Please, go ahead.
    Senator Hoeven. Thank you, Mr. Chairman.

                        CO2 EMISSIONS

    You have a new source performance standard for 
CO2 emissions on coal-fired plants. This is a 
proposed rule that you issued on April 13, 2012. It sets a 
CO2 emissions limit of 1,000 pounds per megawatt 
hour.
    That is essentially a natural gas fired electric plant 
standard, which no coal plant in the entire country can meet, 
cannot meet it.
    Does this new performance standard that you're proposing 
apply to new plants, only new plants, or does it also apply to 
existing plants?
    And, how do you expect, and I see at the same time, you 
know, you increase your enforcement budget by 20 percent, from 
$27 million to $34 million. And then, you issue this rule which 
no coal plant in the entire country can comply with. How do you 
expect that to work?
    Ms. Jackson. Well, first we can't enforce a rule that isn't 
final. It is only a rule for new plants. It does not apply to 
existing coal plants.
    And, you know, the standard as proposed, creates a path 
forward for technology, for those plants that want to use 
technology, burn coal, and capture their carbon pollution. It 
allows a period during which a plant, if it chooses to, can 
operate and then enact a 10-year period where it doesn't have 
to have the carbon captured and sequestered.
    After 10 years, it has to commit to 50-percent capture of 
its carbon emissions. So, in fact, I personally believe the 
rule does the opposite. It allows a path forward for investment 
in coal-fired power plants that doesn't exist at the current 
time.
    And it's a proposal, Sir. It is not final.
    Senator Hoeven. So your proposal applies to any new plant 
construction, not to existing plants.
    What about any improvement or major renovations to an 
existing plant?
    Ms. Jackson. It does not apply to existing plants, Sir. 
Only new plants, only new.
    Senator Hoeven. All right, thank you.
    Then, we are going to need to work through with you both 
the technological and the economic viability on that rule 
because we need to take a hard look at that.
    If we want to continue to develop clean coal technology, 
we've got to have a realistic rule.
    Ms. Jackson. Thank you, Sir.
    Senator Hoeven. Thank you.
    Senator Reed. Senator Cochran.
    Senator Cochran. I have no further questions.
    Senator Reed. I have some additional questions which will 
be handled in writing.
    Senator Reed. Senator Murkowski, do you have additional 
questions?
    Senator Murkowski. I have just a couple here, if I may.
    Senator Reed. Go right ahead.
    Senator Murkowski. And I hope that they will be quick.

                            PM2.5

    And both of these involve communities in the, well, energy 
impact within the interior.
    Fairbanks, Alaska, our second-largest city, pretty cold up 
there, dealing with the increased standards, or the tightened 
standards on small particulate matter (PM), the 
PM2.5.
    And, as you know, this has been an issue that they've gone 
back and forth with, trying to meet these standards. They're 
providing incentives for citizens to change out their older 
furnaces and their wood stoves and their boilers for new more 
efficient stoves and furnaces.
    The biggest problem that Fairbanks has is they have no 
other options. They can't turn to natural gas because it's not 
available to them. So their options are extraordinarily 
limited.
    EPA has provided grant aid to other larger communities to 
help them meet the PM2.5 issues. Fairbanks has 
received just some very, very minimal grants from the agencies. 
I know they are looking for assistance. Not much in the total 
scheme of things.
    They were seeking initially $3 million to help with this 
wood stove exchange to cut their emissions, $1 million of it is 
still, unfunded.
    So what I get when I go to Fairbanks every time, and I was 
there this weekend, is, what, if anything, can be done to help? 
And we recognize that the budgetary issues are extraordinarily 
debilitating and we appreciate that.
    But given the very unique climate conditions that the 
interior faces, will the Agency look at a possible extension to 
give the community more time, additional time, to meet the new 
standards before the penalty phase kicks in in 2014?
    They are working. They are being aggressive on it. It's not 
as if they're putting their head in the sand. But they are 
really in a difficult, difficult spot because they have no 
other options.
    Again, I'd like you to either give me your sense on this, 
or consider what options Fairbanks might be able to consider.
    Ms. Jackson. How about I promise to look at the options for 
you, both in funding and in compliance. Because that's for the 
existing PM2.5 standard, right, Senator?
    Senator Murkowski. It is the tightened standards that come 
into play in 2014. So they are the new PM2.5 
standards.
    Ms. Jackson. Yes. Well, I'm not sure exactly what you are 
referring to. Why don't I look at both.
    Senator Murkowski. All right.

                         HEALY CLEAN COAL PLANT

    And then, the other one that I would like to bring to your 
attention is the Healy Clean Coal Plant that we have been 
trying to get online since 1991 as an option for the residents 
in the interior to help them meet their energy needs.
    Golden Valley is working with the EPA right now on the 
appropriate terms for renewal of their air permit for the 
plant. They have been aggressive in trying to resolve, go 
through all the hoops, doing what EPA has asked.
    I met with some of the folks just this past weekend. I 
guess, I need your assurance that this is something that EPA is 
going to continue to work with the Golden Valley Electric 
Association to find a fair and hopefully final conclusion on 
this.
    Ms. Jackson. I'm happy to assure that knowing none of the 
facts, but that doesn't seem unreasonable to ask, so we'll 
continue to----
    Senator Murkowski. Okay. We'll put that one on our to-do 
list when we meet.
    Ms. Jackson. We have a lot to do.
    Senator Murkowski. And then, my final question, Mr. 
Chairman, and I will conclude.

                             AVIATION FUEL

    And this relates to the new regulations for aviation fuel. 
As you know, we have more people that fly in Alaska than 
anywhere else in the country, and it's like the family minivan. 
You use it to haul the family around.
    The concern that we have is the advance notice of 
rulemaking that could sharply reduce the lead content in the 
aviation fuels. It's impossible for the engines in older 
aircraft to run without lead being in their fuels.
    It's estimated that up to one-third of all the general 
aviation in the State will have to be pulled from service if in 
fact EPA proceeds with these rules.
    Because, as I understand, it's just not technically 
possible to repower, retrofit the planes. Last December, I was 
informed by Gina McCarthy, that the EPA would likely consider 
changes in the rules over the next one to 2 years.
    So the question to you this afternoon is where you are in 
this study on the air quality impacts of lead in aviation fuel, 
and where does the EPA stand on modifying the proposed rule to 
lessen what we know to be a considerable impact on aviation in 
Alaska?
    Ms. Jackson. Thank you, Senator.
    Yes, to my knowledge, we are still on course. We're looking 
at the study. This issue I saw personally when I visited 
Alaska, the one time I was able to get up to Alaska. Clearly, 
that's how everyone gets around. Clearly, it was a concern 
everywhere I went.
    And so I came back with an understanding that we need to do 
something. I don't have a date for you today, but when we meet, 
we'll put it on the list and give your staff an update.
    Senator Murkowski. I appreciate that. And I hope that your 
voice feels better than normal levels.
    Ms. Jackson. Thank you.
    Senator Murkowski. But I thank you for your testimony and 
your time this morning. Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Reed. Thank you, Senator Murkowski. Thank you, 
Administrator, for your testimony. Thank you, Ms. Bennett for 
all your work with the Administrator.
    I will ask my colleagues to submit any further written 
statements or questions by next Wednesday, the 23d of May.
    And then ask the Administrator to respond as quickly as 
possible with any written questions so we can close the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Agency for response subsequent to the 
hearing:]

                Questions Submitted by Senator Jack Reed

             STATE AND LOCAL AIR QUALITY MANAGEMENT GRANTS

    Question. What are the Environmental Protection Agency's (EPA) 
plans regarding the two proposed funding changes to the State and Local 
Air Quality Grants, which are:
  --changing the formula for allocating the section 105 funds to 
        States; and
  --transitioning funding for particulate monitoring from section 103 
        authority to section 105 authority?

         CHANGING THE FORMULA FOR ALLOCATING SECTION 105 FUNDS

    Answer. EPA has been working with State and local air pollution 
control agencies and State associations since 2006 to revise the 
formula to ensure that grant resources are targeted to address current 
air quality circumstances, priorities, needs, and concerns while also 
protecting gains already achieved. The last comprehensive analysis and 
re-allocation of grants occurred from 1991-1993 to implement the 1990 
Clean Air Act Amendments. The increase in State and Tribal Assistance 
Grant funds requested for fiscal year 2013 would ease implementation of 
an updated allocation approach that would provide increases for each 
region of the country. Increased funding notwithstanding, EPA must 
still assure that funds are targeted to the most pressing air-quality 
problems and that the integrity of State/local air program operations 
is maintained. If funding remains static, shifts will be limited so 
that no region will experience a decline any greater than 5 percent of 
its prior year funding level. This approach will be phased in over a 
multiyear period to minimize any disruptions to State and local program 
operations and can be re-evaluated based upon updated data, changes in 
air quality, or changes in available funding.

   TRANSITIONING PARTICULATE MONITORING FUNDING FROM SECTION 103 TO 
                         SECTION 105 AUTHORITY

    EPA intends to transition 10 percent of the particulate monitoring 
funding in year 1 (fiscal year 2013); 20 percent in year 2; 40 percent 
in year 3; and 60 percent in year 4; and will continue to work closely 
with State/local/tribal agencies on implementing an adequate 
particulate matter (PM)2.5 monitoring network.

                 BEACHES PROTECTION CATEGORICAL GRANTS

    Question. I am concerned that EPA proposed eliminating the Beach 
Grant Program in your fiscal year 2013 budget request. Since 2000, 
Rhode Island has received $2.4 million through the program to monitor 
water quality at beaches and notified the public when recreational 
waters are not safe for swimming. My home State has reported 45 beach 
closures over the past 2 years, so we know firsthand how important 
funding for monitoring is. I am worried that without continued Federal 
funding, States and local governments will not have the capacity to 
continue beach monitoring. Administrator Jackson, can you explain why 
EPA singled out these grants for elimination?
    Answer. To help meet the fiscal challenges of fiscal year 2013, EPA 
has reviewed its programs for areas where any potential efficiencies 
and streamlining can yield savings. EPA is proposing to eliminate 
certain mature program activities that are well-established, well-
understood, and where there is the possibility of maintaining some of 
the human health benefits through implementation at the State and local 
levels.
    EPA's beach program has provided important guidance and significant 
funding to support successfully State and local governments in 
establishing their own programs. Beach monitoring continues to be 
important to protect human health. However, States (including 
territories and tribes) and local governments now have the technical 
expertise and procedures to continue beach monitoring without Federal 
support as a result of the technical guidance and more than $110 
million in financial support EPA has provided over the last decade 
through the beach program. As a result, EPA is proposing that this 
grant program be terminated at the end of fiscal year 2012.

                     DIESEL EMISSIONS REDUCTION ACT

    Question. I would like to talk a little bit about your proposal to 
phase out the Diesel Emission Reduction Act (DERA) program. As you may 
know, I cosponsored the DERA reauthorization in 2010. It is a 
successful program and one that has enjoyed bipartisan support.
    Last year EPA proposed eliminating the program, but this 
subcommittee restored the $30 million funding. You have cut the program 
by one-half in your fiscal year 2013 budget request, for a total of $15 
million, and identify the program for future elimination. Yet EPA has 
estimated that in 2030 there will still be 1.5 million existing diesel 
engines polluting the air. Can you explain why the administration 
thinks this program should be cut back significantly this year and 
eventually phased out given this need?
    Answer. The DERA grant program results in tangible emissions 
reductions, but it is important to strategically target the available 
resources to communities with the greatest need. The funding strategy 
EPA proposes for fiscal year 2013 would do just that--it would provide 
rebates on the purchase of pollution control technology and grants for 
revolving loan programs, and target these funds to communities with the 
greatest need, such as those areas with the highest levels of exposure 
near ports and transportation hubs.
    Second, the DERA program can point to success in retrofitting and 
replacing the oldest, most polluting diesel engines, complementing the 
stringent emissions standards on new diesel engines that EPA 
promulgated in 2007. For example, with the $469 million appropriated by 
the Congress in 2008-2010, EPA has funded projects that reduced 
approximately 203,900 tons of nitrogen oxides (NOX) and 
12,500 tons of PM. States and localities have also established programs 
to address diesel emissions from older engines not subject to current 
regulations, such as the Texas Emissions Reduction Program and the Carl 
Moyer Program in California.
    Question. In the Office of Management and Budget's budget materials 
it says that you will use fiscal year 2013 DERA funding to create 
revolving loan programs that will subsidize retrofits and replacements 
of older engines ``without the need for additional infusions of Federal 
grant dollars.'' I'm not sure how to square this statement with the 
enormous demand for the grants. There is such a pressing demand that 
EPA received seven times more applications for DERA grants than it can 
fund. How does EPA expect to establish a robust revolving loan program 
that will not need additional Federal funding with only $15 million?
    Answer. The DERA program has shown that retrofits and engine 
replacements are effective in reducing emissions and provided valuable 
lessons in how to administer clean diesel programs. Going forward, the 
fiscal year 2013 budget request recognizes the limited availability of 
Federal funding and would transition the program to greater reliance on 
State and local efforts to address diesel emissions from legacy fleets. 
In fiscal year 2013, EPA will pilot a new approach
    That will target specific fleets in high diesel exposure areas such 
as near ports and freight distribution hubs and other 
disproportionately affected communities. The Federal monies spent under 
the $15 million request would be split into two categories. The first 
category would allocate funds to a new rebate program established under 
DERA's reauthorization. The second component would allocate funds 
toward low-cost revolving loans or other financing programs that help 
fleets reduce diesel emissions. We believe the rebate and loan programs 
may allow greater precision in scrapping certain model years of 
vehicles and equipment and assisting public and private fleet owners 
with retrofitting or replacing those engines. This pilot would also 
test financial mechanisms to continue accelerating diesel retrofits 
without ongoing Federal funding. By using grant funds to establish 
revolving loan programs administered by non-Federal parties, EPA would 
be able to have that funding revolve back into the programs (as the 
loans are repaid) to make more loans available on an ongoing basis. For 
the revolving loan mechanism to be successful, it would need to be 
coupled with State or local requirements to phase out the dirtiest 
engines, thereby creating the incentive for fleet managers to seek a 
lower-cost loan to make the necessary upgrades.
    Question. DERA requires that 30 percent of funding be made 
available to support grant and loan programs administered by States. 
What is going to happen to the State formula grants in your proposed 
budget?
    Answer. Under the proposed budget, the State program would not be 
funded in fiscal year 2013.
    Question. You are also starting a new DERA rebate program. Setting 
up a rebate program is an area where EPA doesn't have a lot of 
experience. What is your timeline for setting up this program? Why is a 
rebate program better or more efficient than a grant program? How do 
you plan to operate both a rebate program and a revolving loan fund 
given the cuts in your budget request?
    Answer. The Diesel Emissions Reduction Act of 2010, which modified 
and reauthorized EPA's Diesel Emission Reduction Program through fiscal 
year 2016, added rebates to the grants and loans already authorized 
under the initial authorization of DERA. EPA will utilize rebates and 
grants to establish revolving loan programs under the reauthorized DERA 
language, and match those mechanisms to the needs of fleets and 
communities in their quest to reduce emissions from the legacy diesel 
engines. This will expand the number of options for targeting certain 
types of engines, model years and fleets for retrofit or replacement. 
Use of the rebate option would make DERA funding available directly to 
private fleet owners for retrofit or replacement of older, high-
pollution engines. Similar to how a rebate works in a retail situation, 
EPA would use rebates as an efficient incentive mechanism to turn over 
parts of the existing fleet sooner than through natural attrition. The 
program could specify the most cost-effective and beneficial type of 
engines and technology solutions, in locations of greatest need. EPA 
continues to believe that grants should be used to establish revolving 
loan programs; at the same time rebates offer a specificity and 
simplicity which would be welcomed by stakeholders and policy leaders 
alike.
    EPA plans to initiate the rebate program in the fall of 2013.

                   GREAT LAKES RESTORATION INITIATIVE

    Question. Administrator Jackson, as you know the Great Lakes 
Restoration Initiative (GLRI) has been a huge investment that affects 
the States of a number of members of this subcommittee. I am very 
interested in hearing about the results that have been achieved. Since 
2010, GLRI has received more than $1 billion of funding and you propose 
another $300 million in your fiscal year 2013 budget request. Can you 
tell us what results you have achieved thus far?
    Answer. The investments made under the GLRI are showing promising 
results in addressing the most critical environmental challenges facing 
the Great Lakes. Some of the notable achievements from GLRI include:
  --The Presque Isle, Pennsylvania Area of Concern (AOC) will be 
        delisted this year, now that all necessary management actions 
        are complete. Eighteen Beneficial Use Impairments (BUIs) at 10 
        different AOCs have been removed since GLRI's inception.
  --One million cubic yards of contaminated sediments have been 
        remediated in the basin.
  --GLRI has been central to keeping self-sustaining Asian carp 
        populations out of the Great Lakes. No new invasive species 
        populations have been detected in the Great Lakes.
  --GLRI-funded projects contributed to the delisting of the Lake Erie 
        watersnake under the Endangered Species Act.
  --GLRI-funded projects have contributed to a 5-year low in swimming 
        bans and advisories at Chicago's beaches.
    Additional achievements include:
  --More than 13,000 acres are being managed in order to keep 
        populations of invasive species controlled to a target level.
  --GLRI funding has helped increase the number of acres within the 
        Great Lakes basin subject to the Department of Agriculture 
        conservation practices to approximately 270,000, an increase of 
        more than 50 percent. GLRI funding is now being targeted at 
        three priority subwatersheds to reduce phosphorus contributions 
        from agricultural and urban lands that contribute to harmful 
        algal blooms and other water quality impairments.
  --Hundreds of river-miles have been cleared for fish passage by 
        removing or bypassing barriers. More than 20,000 acres of 
        wetland, coastal, upland, and island habitat have been 
        protected, restored, or enhanced.
  --Rapid response capabilities have been improved:
    --six rapid response actions were performed in the fight against 
            Asian carp; and
    --four States have now updated their Aquatic Nuisance Species 
            Management Plans to include rapid response capabilities.
    Question. GLRI funds--$353 million--have been directed toward toxic 
substances and AOCs to remedy huge underwater sites where contamination 
is especially dangerous. Specifically, what progress has been made 
toward delisting AOCs?
    Answer. Because EPA and its partners have prioritized and 
accelerated AOC work, we expect to meet or exceed our goals to remove a 
cumulative total of 41 BUIs by the end of fiscal year 2013 and to 
complete management actions at a cumulative total of four AOCs. A few 
examples of delisting progress are as follows:
  --As noted above, the Presque Isle, Pennsylvania AOC will be delisted 
        by the end of this year. This will be the first U.S. delisting 
        of an AOC since Oswego River was delisted in 2006.
  --All the management actions necessary for delisting at four 
        additional AOCs (Ashtabula, Ohio; River Raisin, Michigan; White 
        Lake, Michigan; and Sheboygan, Wisconsin) are expected to be 
        completed this year and all the management actions necessary 
        for delisting at an additional AOC (Deer Lake, Michigan) are 
        expected to be completed in 2013.
  --EPA and its partners have started 88 projects to address BUIs at 
        AOCs and we remain on track to start an additional 22 projects 
        to address BUIs at AOCs in fiscal year 2012.
  --Work done at AOCs includes completion of Great Lakes Legacy Act 
        projects at sites in five AOCs. This work has removed 
        contaminated sediments and is reviving waterfronts in the 
        Kinnikinnick River, Wisconsin; Grand Calumet River, Indiana; 
        Ashtabula River, Ohio; Detroit River, Michigan; and Muskegon 
        Lake, Michigan.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein

                              PERCHLORATE

    Question. In February 2011, the Environmental Protection Agency 
(EPA) announced its intention to regulate perchlorate under the Safe 
Drinking Water Act. Given the nearly 300 public drinking water wells 
impacted by perchlorate contamination in California, this was certainly 
welcome news. Can you tell me what is the status of EPA's effort to 
develop perchlorate regulations and when do expect they will be 
finalized?
    Answer. EPA is moving forward with the process to develop a 
national primary drinking water regulation for perchlorate. EPA is 
evaluating the science on perchlorate health effects and exposure to 
develop a proposed Maximum Contaminant Level Goal (MCLG). The MCLG is a 
nonenforceable level in drinking water at which no known or anticipated 
adverse effects on the health of persons occur and which allows an 
adequate margin of safety. EPA also is evaluating treatment 
technologies, analytical methods, and costs and benefits of potential 
Maximum Contaminant Levels (MCLs). The MCL is the enforceable standard 
that is set as close as feasible to the MCLG, taking cost into 
consideration. EPA has a statutory deadline of February 2013 to issue 
the proposed perchlorate rule. EPA is working to develop the proposed 
regulation for public review and comment expeditiously and expects to 
promulgate a final regulation within 18 months of the proposal.
    Question. Will the new perchlorate standard consider pregnant women 
and children as well as potential perchlorate exposure from food 
products?
    Answer. Yes. As EPA works to develop the MCLG, the Agency is 
closely reviewing data on the effects of perchlorate on pregnant women 
and children because these lifestages may be at greater risk of adverse 
effects due to exposure to perchlorate in drinking water. EPA is also 
considering perchlorate exposure from food products in developing the 
MCLG. EPA is currently seeking input from the Science Advisory Board on 
key issues related to the scientific basis for the MCLG. One of the 
questions EPA has asked the SAB for input on is how life stage 
differences should be considered in developing the MCLG.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

                         MERCURY IN AMBIENT AIR

    Question. Administrator Jackson, throughout your fiscal year 2013 
budget justification, I repeatedly see references to the importance of 
having a strong air monitoring network for our Nation's air quality. I 
steadfastly believe in having air monitoring tools to measure and track 
pollutants, to identify pollutant sources, and to inform us how and 
where Americans could be exposed to air pollutants. These are critical 
resources that serve the Nation and should be fully supported by the 
Environmental Protection Agency's (EPA) work.
    I understand that EPA is partnering with utilities to collect 
mercury emission data directly from utilities and that you believe that 
this partnership will allow you to assess the effectiveness of existing 
technologies in meeting current mercury reduction requirements. I am 
curious, though, as to how this partnering will serve those citizens 
who live at a considerable distance from utilities with mercury 
emissions but are nevertheless subject to the regional transport of 
out-of-State sources of mercury. In my home State of Vermont, we have 
collected a continuous sampling of particulate and gaseous mercury air 
levels at the Underhill Air Quality site (VT99), where research 
measurements have been made since 2004. This long-term record is 
necessary for detecting trends, and since 1993 we have established an 
unbroken record of mercury measurements in precipitation. Through this 
monitoring, we have learned many important lessons and have also found 
that the current Community Multi-scale Air Quality model estimates for 
mercury deposition have proven too low for northern Vermont and New 
England. This is the longest continuous mercury deposition record in 
the United States.
    I find it extremely troubling and perplexing that the EPA has made 
cuts in funding to the Atmospheric Mercury Network (AMNet) and VT99, 
which coincides with your December 2011 announcement of new mercury and 
air toxics standards for coal and oil-fired power plants. Can you 
please explain to me your rational for ending this research and long-
term air monitoring program at the exact moment when the need for 
continued monitoring for human health risk and tracking of emission 
levels is most essential?
    Do you agree that measurements of mercury in ambient air are 
necessary to verify the anticipated deposition reductions as a result 
of your newly mandated emissions reductions? If so, we must continue 
the work at VT99 so we can measure progress toward restoration of 
environmental quality.
    Answer. Mercury is a complex and multi-faceted issue that 
necessitates monitoring in all media, including air, water, sediments, 
fish, and wildlife. EPA recognizes the need for comprehensive, long-
term mercury monitoring. EPA has collaborated with Federal, State, and 
tribal agencies, and academic partners to provide a comprehensive 
understanding of mercury in the environment using existing data, 
monitoring capabilities, and resources. In particular, advances have 
been made in developing a national atmospheric mercury monitoring 
program by building, where possible, upon the existing long-term 
monitoring infrastructure which has successfully tracked the 
effectiveness of programs to control emissions of sulfur dioxide 
(SO2) and nitrogen oxides (NOX). Since 2007, EPA 
has worked through the National Atmospheric Deposition Program (NADP) 
to develop AMNet--a North American network that monitors atmospheric 
concentrations of mercury at 20 sites throughout the United States and 
Canada. NADP/AMNet is sponsored by a multi-organizational cooperative 
of Federal, State, and tribal agencies, universities, and private 
companies.
    Many of the AMNet mercury sites were established by different 
organizations to support an array of diverse research and monitoring 
objectives. The Underhill VT99 site is an example of an existing 
atmospheric mercury monitoring site that joined AMNet. Historically, 
these sites operated in an uncoordinated manner, using disparate 
protocols for measurement, data management, and quality assurance. In 
other words, they did not comprise a coordinated network of atmospheric 
mercury monitoring sites providing comparable data to assess 
implementation of a national mercury control program. With the 
development of AMNet, NADP and its partners, including EPA, took an 
opportunity to coordinate existing monitoring sites and collaborate 
with the scientists operating those sites to create a cohesive network 
of standardized measurements complemented by an organized scientific 
community.
    As part of the initial catalyst to establish AMNet, EPA provided a 
small amount of funds, through competitively awarded time-limited 
contracts, to six monitoring groups to operate atmospheric mercury 
sites. With a core set of AMNet sites established, EPA's focus turned 
to facilitating the development and implementation of a centralized 
NADP data management program to assure high quality and comparable 
mercury measurement data across the United States. Toward that end, EPA 
uses its resources to continue supporting AMNet by funding NADP's AMNet 
quality assurance and data management activities.
    EPA served as a catalyst in launching the AMNet collaborative 
mercury monitoring effort. We remain committed to working with NADP and 
our partners in the scientific community to track progress of mercury 
emissions reductions under our air rules. We hope that the atmospheric 
mercury monitoring sites and experts participating in AMNet will 
continue to improve our understanding of mercury in the environment.

                            CHEMICAL SAFETY

    Question. As a cosponsor of the Safe Chemicals Act of 2011 I am 
acutely aware of the need to modernize the Toxic Substances Control Act 
of 1976 (TSCA). It is clear that the EPA desperately needs new tools to 
regulate the health and safety testing of toxic chemicals. Your fiscal 
year 2013 budget justification requests a funding increase of $11 
million for enhancing chemical safety and assessing chemical risks.
    Please tell me what resources EPA proposes to put toward work on 
carbon nanotubes with this requested increase in funding.
    Answer. EPA's fiscal year 2013 President's budget requests a total 
of $67.6 million to support the Chemical Risk Review and Reduction 
(CRRR) program, which includes an $11.1 million increase more than the 
fiscal year 2012 amount appropriated for the CRRR Program account 
($56.5 million). As detailed in the Congressional Budget Justification, 
the fiscal year 2013 CRRR request is divided into four areas of 
activity:
  --$13.9 million to support Existing Chemicals--Obtaining/Managing 
        Data efforts;
  --$14.9 million to support Existing Chemicals--Chemical Assessment 
        efforts;
  --$24.6 million to support Existing Chemicals--Risk Management 
        efforts; and
  --$14.2 million to support the New Chemicals Program.
    Resources supporting EPA's work on carbon nanotubes are housed in 
all four of these activity areas. We should note that EPA does not 
estimate resources on a chemical-by-chemical basis, as would be 
required in order to further specify the amount of funding budgeted for 
carbon nanotube work.
    Question. Does EPA have sufficient resources to truly address and 
assess the risk level from carbon nanotubes and efficiently approve 
nanomaterials that manufacturers have proven minimize or eliminate the 
associated adverse impacts on human health?
    Answer. EPA's fiscal year 2013 President's budget requests the 
resources necessary to continue to gather environmental health and 
safety data, assess risk levels and, as necessary, undertake risk 
management action to address identified risks associated with some of 
the carbon nanotubes already in commerce and to continue to review new 
nanomaterials submitted to EPA through the new chemicals program prior 
to their entry into commerce. As the science of nanomaterials evolves, 
EPA will continue to enhance its approach to obtaining and using 
information to inform both risk assessment and risk management to 
inform decisionmaking. For example, EPA is considering the development 
of categories of nanomaterials, based on shared chemical and 
toxicological properties, which may enable the Agency to make use of 
accumulated data common to each category (such as data on chemical 
hazard, structure, and properties) as well as a history of past 
decisions that may be relevant. In most cases, sufficient history would 
have been accumulated so that testing recommendations would vary little 
among the chemicals within a category.
    Question. What progress can you assure me will occur in EPA's work 
on nanoscale materials? In addition, do you expect that EPA will be 
able to make advances in its work in determining when nanoscale 
materials may require further assessment and when there has been 
sufficient testing without requiring undue additional expenses for 
manufacturers?
    Answer. EPA will continue to pursue a comprehensive regulatory 
approach under TSCA to ensure that both new and existing nanoscale 
materials are manufactured and used in a manner that protects against 
unreasonable risks to human health and the environment. EPA's approach 
includes pre-manufacture notifications; Significant New Use Rules; 
information gathering rules; and test rules. For example, EPA has 
played a leading role in guiding the development of test data and 
harmonized approaches to the testing, assessment, and management of 
nanomaterials with other Federal agencies for several years. EPA will 
continue to work in fiscal year 2013 with other Federal agencies 
through the National Nanotechnology Initiative and internationally with 
other governments to identify and develop these sources of data, with 
an emphasis on providing guidance for applying internationally 
harmonized chemical test guidelines to nanomaterials. EPA is already 
assessing and addressing the potential risk from carbon nanotubes and 
other nanomaterials. As new data are developed for nanomaterials, EPA 
will refine its approach to both risk assessment and risk management. 
EPA will identify those nanomaterials or categories of nanomaterials 
that require additional data development or risk management as well as 
the nanomaterials that do not warrant further testing or other actions.
                                 ______
                                 
               Questions Submitted by Senator Jon Tester

          CAMELINA BIODIESEL AND THE RENEWABLE FUELS STANDARD

    Question. Just over 2 years ago, Environmental Protection Agency 
(EPA) released a final rule setting up the Renewable Fuels Standard 
(RFS2). Every year since then, EPA has had to drastically revise its 
advanced biofuel quotas down, due to the fact that there was no chance 
the biofuel industry could meet them.
    Part of the RFS2 rule was the establishment of a process to approve 
new feedstocks for production of biofuel. However, since the RFS2 was 
established, Canola is the only feedstock that has been approved 
through that process.
    At the same time, I know that Montana producers have been working 
toward approval of biodiesel from camelina and ethanol from barley 
almost since the day the RFS2 was established.
    I have watched with growing concern the lack of newly approved fuel 
pathways eligible for Renewable Identification Numbers (RINs), 
particularly given the backlog of petitions that the EPA is 
considering. EPA did approve a handful of pathways in January, only to 
withdraw that approval shortly thereafter, resulting in yet another 
crop year without recognition of these innovative fuels.
    I am concerned that unless EPA enhances the diversity of fuel 
pathways eligible for RINs, the renewable fuels standard will continue 
to act as a barrier to entry for new and promising feedstocks by 
supporting incumbents that frankly don't need the help.
    To what extent is EPA's inability to approve new fuel pathways 
contributing to the lack of advanced biofuel? What is EPA doing to get 
the petition program for new fuel pathways working as intended?
    Answer. As a clarification, in the past 2 years, EPA has not had to 
reduce the advanced biofuel mandate, only the cellulosic volume 
mandate. Therefore, we do not believe that the new fuel pathway 
approval process is contributing to a shortage of advanced biofuels. 
Since the RFS2 volume standards are nested (with cellulosic fuels being 
a subset of advanced fuels), the total advanced biofuel mandate can 
remain unchanged even if cellulosic volumes are reduced. To date, EPA 
has not reduced the overall advanced volume mandates since our analysis 
has shown that there is a sufficient supply of advanced biofuels. What 
this means is that refiners and blenders have still been obligated to 
acquire sufficient advanced biofuel to fulfill the statutory mandate, 
even though the EPA Administrator lowered the required volume for 
cellulosic biofuel. Biodiesel from camelina and ethanol from barley 
could potentially qualify as advanced biodiesel, if the fuel pathways 
satisfy certain criteria.
    In the final RFS2 rule, EPA developed a petition process to allow 
for new potential pathways to be reviewed and incorporated into the RFS 
program. In the last 2 years, EPA has made significant progress in 
evaluating new feedstocks and fuels under the RFS program. For example, 
EPA has approved canola as a new feedstock and six other new fuel 
pathways through the petition process. In addition, EPA released for 
public comment analysis on six other feedstocks (arundo donax, 
camelina, energy cane, napiergrass, palm oil, and sorghum). EPA 
recognizes the need to review and include new advanced biofuel 
feedstocks to help further the goals of the Energy Independence and 
Security Act. To this end, EPA tried to expedite the approval of arundo 
donax, camelina, energy cane, and napiergrass through a direct final 
rulemaking process. However, EPA received relevant adverse comments as 
part of the public review process and was legally required to withdraw 
the direct final rule and proceed instead with a proposed rule. EPA is 
working to respond to these comments and finalize the analysis of these 
pathways as quickly as possible.

                         ENHANCED OIL RECOVERY

    Question. Administrator Jackson, I understand that your agency is 
in the process of developing guidance for Enhanced Oil Recovery (EOR) 
projects. I am a strong supporter of enhanced oil recovery and believe 
it is a win-win for the storage of CO2 as well as getting 
more oil out of existing fields. EOR helps to localize the impact of 
oil field development, while increasing our energy security with 
domestic production.
    I have heard some concern from some in industry that this proposed 
guidance makes could hinder EOR use and expansion.
    Question. Are you supportive of developing EOR?
    Answer. EPA remains committed to the safe implementation of 
enhanced oil and gas recovery technologies. Since the 1980s, EPA has 
worked with State co-regulators to ensure that injection of 
CO2 (and other fluids) for enhanced oil and gas recovery is 
conducted in an environmentally sound manner that enables increased 
energy security through domestic hydrocarbon production.
    Question. Can you assure me that EPA will continue to work with 
stakeholders to assure that guidance on this program is workable and 
encourage the use of EOR?
    Answer. EPA will continue to work with stakeholders, including 
State co-regulators and industry representatives, to develop this 
guidance and intends to implement it in a manner that is consistent 
with existing EOR regulations and Underground Injection Control program 
authority under the Safe Drinking Water Act.

                     OIL SPILL RESPONSE AND TRIBES

    Question. Administrator Jackson, last year on the Blackfoot 
Reservation in Montana there was a small oil spill from an oil 
distribution pipeline. This occurred about the same time we had the 
larger spill on the Yellowstone River. Unfortunately the small spill 
wasn't found for nearly 1 month because it was in a distribution line.
    In Montana a number of tribes, including the Blackfeet are actively 
developing their traditional energy resources, in particular oil and 
natural gas. Unfortunately, many tribes lack a full staff of people to 
regularly monitor well and develop safeguards for the development of 
energy resources.
    Question. What is EPA doing to provide technical assistance to 
tribes who have expanding energy development to develop safeguards are 
in place to prevent incidents like what happened on Browning?
    Answer. EPA conducts numerous workshops and inspections to provide 
technical assistance to tribes who have expanding energy development 
regarding oil spill prevention and response. EPA routinely includes 
inspections of production facilities on tribal lands with tribal 
environmental personnel to train the tribe on the requirements of the 
SPCC regulation and address facilities the tribe may have concerns 
about. EPA also routinely answers technical questions from the tribal 
environmental office to provide assistance on the requirements of the 
spill prevention control and countermeasure (SPCC) regulation, respond 
to spills and complaints, and address noncompliance.
    The following examples are representative of the types of 
assistance EPA provides to tribes that are developing their traditional 
energy resources:
  --In 2010 and 2011, EPA worked with Fort Berthold officials on spill 
        response capabilities and conducted workshops to improve 
        compliance with SPCC regulations. In previous years, EPA 
        similarly conducted SPCC workshops on the Uintah & Ouray, 
        Southern Ute, and Wind River Reservations.
  --In August 2011, EPA provided technical assistance to the Blackfeet 
        Tribe by conducting interactive SPCC training for nine 
        participants from tribal environmental staff, emergency 
        response staff, and a representative from the Bureau of Indian 
        Affairs (BIA). This training focused on how to identify 
        facilities that could pose a high risk for a spill or that may 
        not be in compliance. EPA also discussed with the tribe 
        concerns they had regarding facilities or spills that had 
        occurred.
  --In June 2011, EPA inspectors were accompanied by tribal personnel 
        during the SPCC inspections conducted on the Fort Berthold 
        reservation. In August 2011, EPA inspectors were accompanied by 
        Blackfeet Tribal environmental and emergency staff, as well as 
        a BIA representative, on SPCC inspections.
  --During Tribal Region Operation Committee meetings held at the 
        Region 8 office, the prevention and preparedness program 
        presented and distributed outreach materials. The region also 
        distributed materials on oil spill prevention during the Denver 
        March Pow Wow.
  --In September 2011, EPA held a 4-day oil response training course 
        for members of the Three Affiliated Tribes. This course is 
        designed for EPA Federal On-Scene-Coordinators (FOSCs), U.S. 
        Coast Guard (USCG) FOSCs, and tribal, State, and local 
        responders who are involved in inland oil spill prevention and 
        cleanup. The course was focused around a hands-on practical oil 
        spill response scenario on fast water usually found in rivers 
        in the western regions of the United States. Course 
        participants learned physical and chemical properties; 
        statutory and regulatory framework; factors affecting response 
        and cleanup decisions; how to read rivers; determine oil 
        recovery locations; determine various methods of boom 
        deployment; and deploy oil recovery methods on fast water 
        rivers.
  --In addition to oil spill prevention and response training, EPA 
        initiated meetings with all 27 tribal governments to create a 
        foundation for open communication and to understand the 
        priorities, risks and vulnerabilities of the Region 8 tribes. 
        The region plans to meet with the tribes in order to conduct an 
        assessment of tribal emergency planning and preparedness 
        capabilities in order to tailor an appropriate technical 
        assistance and training regimen specific to the tribal needs.
  --With oil and gas production being one of the top priorities for the 
        tribes, on June 13, 2012, EPA conducted a workshop to help 
        tribal communities understand potential issues and resources 
        available to prepare for and address environmental accidents, 
        spills, and releases due to oil and gas drilling and production 
        processes. Information included an overview of the production 
        process itself, a summary of the various EPA laws and 
        regulations that cover oil and gas production, and information 
        from other guest speakers including, but not limited to, 
        private industry, the Department of Transportation, and the 
        Bureau of Land Management.
    As with EPA's activities in previous years, there are also plans to 
continue one-on-one outreach, SPCC technical assistance, and joint 
inspections with certain tribes in 2012.
    EPA has a goal to update and create new Area Contingency Plans that 
would include Browning, Montana. As part of this effort, EPA Region 8 
has held meetings with representatives from the tribes, U.S. Fish & 
Wildlife Service, BIA, Army Corps of Engineers, Departments of 
Agriculture and State, and local agencies to discuss subarea 
contingency planning for the Missouri River-Lake Sakakawea area.

                     LIBBY, MONTANA SUPERFUND SITE

    Question. Montana also has some big challenges with Superfund. In 
Montana we have the dubious honor of having 11 Superfund sites on the 
National Priorities List. These are some of the largest and most 
complex in the United States. And Administrator Jackson, as I've said 
each year as you come before this subcommittee it needs your personal 
attention.
    Let me take a moment to talk about Libby, Montana. It has been more 
than 10 years since EPA's work in Libby commenced, and there are still 
a number of unanswered questions and actions with questions. Currently 
the toxicological review of Libby Amphibole Asbestos has a draft form 
and is being circulated.
    Question. When do you believe you will be able to finalize that 
study? And when can you start using the Science Advisory Board's (SAB) 
information to make decisions about if homes are safe or clean for the 
citizens of Libby?
    Answer. EPA currently anticipates completing and posting the 
Integrated Risk Information System (IRIS) Toxicological Review of Libby 
Amphibole Asbestos in fall 2013. EPA's SAB has indicated that they 
expect their peer review advice will be published by November 2012. As 
per the IRIS process, EPA will then conduct any further analyses needed 
to respond to the peer review and revise the draft assessment to 
respond to comments. After internal and interagency reviews, a final 
Toxicological Review of Libby Amphibole Asbestos will be posted on 
IRIS.
    To date, risks from exposure to Libby Amphibole have been 
substantially reduced through cleanup actions at 1,670 properties in 
Libby, including homes, commercial buildings, parks, and other 
recreational spaces. Once the Toxicological Review of Libby Amphibole 
Asbestos is posted on IRIS, the toxicity values can be used for human 
health risk assessments. EPA will evaluate the remaining properties in 
Libby and reassess the properties that have undergone cleanup actions 
to determine whether additional cleanup is required. Region 8 will be 
able to publish a draft cumulative human health risk assessment for the 
Libby Superfund Site approximately 6 months after the IRIS posting of 
the Libby Amphibole toxicity values. The results of the human health 
risk assessment, as well as community opinions and concerns, will be 
considered by EPA as it evaluates alternatives and selects an 
appropriate response to address site risks.

                        CLARK FORK CLEAN UP SITE

    Question. Currently in the State of Montana has great work going on 
the Clark Fork River restoring a watershed. This work will restore 
clean water, fish, and aquatic species habitat and revitalize a 
corridor home to many of Montana's farms and ranches.
    This site, listed in 1985, has waited a long time for clean up.
    The State and EPA have entered into a consent agreement with the 
State as lead agency, a position well deserved after their good work in 
Silver-Bow County and on Milltown Dam.
    There is more than $100 million ready to put people to work in the 
restoration economy in Montana. Unfortunately, as of my last update, 
this work has is still stalled for while lawyers bicker over small 
technicalities and details.
    Question. Can I have your commitment that you will work the lead 
agency, the State of Montana, to get any issues resolved and make sure 
this project commences in a timely fashion so that by this summer we 
can be putting people back to work cleaning up the banks of the Clark 
Fork?
    Answer. EPA remains committed to working with the lead agency, the 
Montana Department of Environmental Quality (Montana DEQ), to help the 
Montana DEQ implement the remedy in an efficient and effective manner. 
Under a 2008 consent decree, the Montana DEQ received $123 million from 
Atlantic Richfield to perform State-lead Superfund remedial design, 
remedial action, and natural resource damage restoration for the Clark 
Fork River Operable Unit (Clark Fork Site) of the Milltown Reservoir 
Sediments/Clark Fork River Superfund Site. EPA has consistently met 
review times requested by the Montana DEQ for deliverables and has 
worked expeditiously to resolve issues to help the Montana DEQ complete 
design and construction on the Clark Fork River.
    The Montana DEQ began construction in 2010 by removing arsenic and 
lead contaminated soil from eight residential properties located on 
East Side Road in Deer Lodge. The Montana DEQ also cleaned up six 
residential properties adjacent to the Clark Fork River in Deer Lodge 
in 2011. Cleanup construction was completed at the Trestle Area Bridge 
in Deer Lodge in fall 2011. Construction firms out of Butte, Missoula, 
and Lincoln, Montana were able to bid successfully on these 
construction projects.
    In addition, engineering firms from Helena and Butte, under 
contract to the Montana DEQ, collected design level data in 2011 at the 
Grant Kohrs Ranch National Historic Park and the Clark Fork Coalition 
Ranch. The Montana DEQ has already incorporated data collected during 
these investigations into Design Summary Reports. Draft preliminary 
designs are anticipated in fall 2012, with final design packages going 
out for construction bids in 2013.
    Finally, the Montana DEQ is currently incorporating design review 
team comments into its final design for cleanup of the first 1.6 miles 
of the Clark Fork River directly below the Warm Springs Ponds (Reach A, 
Phase 1). Montana DEQ will solicit bids later this summer for a multi-
year construction project that will begin in fall 2012.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu

                   DESIGN FOR THE ENVIRONMENT PROGRAM

    Question. Administrator Jackson, I would like to bring to your 
attention some concerns I have with the Design for the Environment 
(DfE) program. This program is intended to identify chemicals for which 
increased margins of safety may be needed and to make suggestions on 
alternative chemicals that would provide increased margins of safety. 
As I understand it, Congress did not explicitly fund or create this 
program, nor did the Environmental Protection Agency (EPA) issue 
regulations outlining any criteria on which to select products for 
which substitutes are sought. Furthermore, there is no criteria that 
exists to define the improved safety of the alternatives. While the 
program may be deemed voluntary, the process will lead to manufacturers 
substituting alternatives, none of which have been approved by a 
government agency as safe for use or by industry as technically or 
commercially viable. Therefore the DfE program can effectively drive 
major structural changes in the chemical industry while avoiding the 
rigor of the regulatory process.
    I am very concerned with the lack of transparency in the 
decisionmaking process and the lack of defined criteria upon which DfE 
chemical evaluations are based.
    Are the chemical evaluations under the DfE program done consistent 
with other EPA chemical evaluations or assessments such as under the 
Integrated Risk Information System (IRIS)?
    Answer. Yes, DfE chemical evaluations are consistent with other EPA 
evaluations, including IRIS, and use similar criteria. For example, the 
IRIS assessment process includes obtaining information through a 
comprehensive literature search and data call in. The IRIS assessment 
process also includes professional EPA science experts evaluating 
research studies on health effects and providing judgments regarding 
issues such as appropriate study choice, characterization of effects, 
and uncertainty factors, among others. Data sources for DfE evaluations 
include the following:
  --Publicly available data obtained from a literature review;
  --Data contained in confidential business information received by 
        EPA;
  --Structure-Activity-Relationship based estimations from EPA's 
        Pollution Prevention Framework and Sustainable Futures 
        predictive methods; and
  --Professional judgment of EPA science experts with decades of 
        chemical review experience.
    When IRIS assessments are available, they are a primary 
consideration for DfE chemical evaluations.
    Question. If chemical evaluations for DfE are not conducted in a 
similar fashion, what is the evaluation process and where is it 
documented?
    Answer. The DfE approach for conducting chemical evaluations is 
similar to evaluations in other EPA programs.

         WASTEWATER OPERATIONS--UNDERGROUND PIPE INFRASTRUCTURE

    Question. Efforts are currently being made by innovative companies 
to assist small- and medium-sized cities to maximize cost savings and 
asset management for their underground pipe infrastructure. Efforts 
involve aggregating data and leveraging information to the benefit of 
municipalities' wastewater operations and financial planning. What is 
EPA currently doing to aggressively compliment or incentivize 
municipalities to embrace this proven, comprehensive, cost savings 
practice?
    Answer. EPA has been in the forefront, especially in the area of 
Asset Management practices, with a whole series of initiatives to 
assist communities in making more efficient and effective long-term, 
life-cycle based decisions regarding water and wastewater 
infrastructure. The key elements in the EPA strategy are based on 
providing training and knowledge transfer and supporting the 
development of new tools and techniques to foster better municipal 
system outcomes. Over the past decade, approximately 60, 2-day ``hands-
on'' workshops have been held with more than 4,500 local water and 
wastewater personnel attending these training sessions. In addition, 
EPA has worked closely with the Water Environment Research Foundation 
to establish a focused research program to address some of the key 
knowledge questions associated with the aging of our water and 
wastewater infrastructure. Much of this work is focused on underground 
pipe infrastructure, where the issues associated with the aging of the 
networks are most prominent. Finally, a number of State SRF programs 
have adopted Asset Management related incentives associated with their 
funding decisions and a few States have started integrating Asset 
Management requirements into their National Pollutant Discharge 
Elimination System permit process.
                                 ______
                                 
             Questions Submitted by Senator Lisa Murkowski

                   INTEGRATED RISK INFORMATION SYSTEM

    Question. In testimony before the Congress in July, 2011, 
Environmental Protection Agency's (EPA) Science Advisor stated that the 
EPA did not intend to implement the reforms identified in chapter 7 of 
the National Academy of Science (NAS) peer review report on the 
formaldehyde Integrated Risk Information System (IRIS) assessment for 
draft assessments that had then been released for peer review but not 
finalized. Since that time, EPA has also chosen not to implement those 
reforms to certain draft assessments subsequently released for peer 
review. EPA's stated rationale for that decision was that NAS did not 
intend to delay IRIS assessments pending development of program-wide 
reforms. However, a review of the specific NAS recommendations for 
improving the formaldehyde assessment demonstrates that they parallel 
the NAS recommendations for longer-term IRIS reform. Clearly, then, NAS 
wanted and expected EPA to implement on a chemical-specific basis going 
forward recommendations comparable to those NAS was recommending that 
EPA develop over a longer-term for the program as a whole.
    Given NAS' conclusion that its recommendations are ``critical for 
the development of a scientifically sound IRIS assessment'' and EPA's 
conclusion that all the NAS' recommendations are warranted, what is 
EPA's justification for implementing those reforms for some chemicals, 
like formaldehyde, but not others in like or earlier stages of 
development than formaldehyde at the time of the NAS report?
    In its recent progress report to the Congress on the status of its 
IRIS reform efforts and elsewhere, EPA has stated that it agrees that 
all the NAS recommendations are scientifically sound and should and 
will be implemented by EPA. However, EPA is applying only a few of 
those reforms to some of the assessments in the pipeline and none of 
them to others now under development.
    Answer. EPA agrees with and is implementing the NAS 
recommendations. Consistent with the advice of the NAS in their 
``Roadmap for Revision'' in chapter 7 of the formaldehyde review 
report, EPA is implementing the recommendations using a phased 
approach. Specifically, the NAS stated that ``the committee recognizes 
that the changes suggested would involve a multiyear process and 
extensive effort by the staff of the National Center for Environmental 
Assessment and input and review by the EPA Science Advisory Board and 
others.'' In implementing the recommendations in a phased approach, EPA 
is making the most extensive changes to documents that are in the 
earlier steps of the assessment development process.
    For assessments that are in the later stages of development, EPA is 
implementing the recommendations without taking the assessments 
backwards to earlier steps of the process. Phase 1 of implementing the 
NAS recommendations has focused on editing and streamlining documents 
and using more tables, figures, and appendices. However, for some 
assessments, EPA went beyond the changes that were slated for Phase 1 
to incorporate changes slated for Phase 2. For example, the final 
dioxin reanalysis (released as part of the Phase 1 batch of 
assessments) included:
  --Evaluation tables for epidemiology study summaries;
  --Health effects study descriptions in an appendix to streamline the 
        main text;
  --Graphical and tabular displays of potential points of departure and 
        oral reference dose candidate values; and
  --Links to the Health and Environmental Research Online (HERO) 
        database for all citations.
    EPA is now in Phase 2 of implementing the NAS recommendations, as 
evidenced by the recent release of the draft IRIS assessment of 
ammonia. This assessment represents a major advancement in implementing 
the NAS recommendations. EPA is using a new document structure, 
including an executive summary presenting major conclusions, a preamble 
describing methods used to develop the assessment, distinct sections on 
Hazard Identification and Dose-Response Analysis, and more tables and 
figures to clearly present data. Additionally, as part of Phase 2, EPA 
is addressing all of the short-term recommendations provided by the 
NAS, including:
  --Eliminating redundancy in format to substantially reduce the volume 
        of text;
  --Adding a preamble to describe the methods of the assessment;
  --Providing detailed information about the literature search and 
        describing how studies were selected for evaluation;
  --Using the HERO database to allow public access to all studies 
        considered and cited in the assessment;
  --Using standardized evidence tables instead of long text 
        descriptions;
  --Conducting a more thorough and standardized evaluation of studies, 
        including strengths and weaknesses;
  --Developing a more integrated synthesis of health information 
        organized by toxicological effect, including a discussion of 
        weight of evidence;
  --Clearly describing all decision points;
  --Presenting candidate reference values for multiple endpoints, where 
        appropriate; and
  --Considering the possibility of combining multiple studies or 
        effects for deriving toxicity values, instead of choosing the 
        most sensitive effect.
    Phase 3 of implementation, which will begin when EPA convenes a 
workshop on weight of evidence, will incorporate the longer-term 
scientific recommendations made by the NAS, including:
  --Incorporating a systematic identification of the relevant evidence;
  --Developing and utilizing criteria for evaluating the strength of 
        the evidence; and
  --Developing language for describing the strength of the evidence of 
        causation so that a standardized approach is used that is 
        comparable among different agents and outcomes.
    Question. Given EPA's concurrence with NAS' conclusion that all 
these reforms are critical to scientifically sound assessments, upon 
what basis has EPA concluded that some assessments now being prepared 
are more deserving of these reforms than others?
    Answer. As discussed in the response to question 1, EPA has used a 
systematic approach to implementing the NAS recommendations in a phased 
manner based on stage of assessment development.
    Question. The recommendations are being applied based on the stage 
of development of the assessment. Thus, those in the earliest stage of 
development are in Phase 3, while those in the later stages are in 
Phases 1 and 2. We did this so as not to unduly delay the release of 
final assessments and to ensure that the effort placed in drafting the 
document was not lost. This is consistent with the advice of the NAS.
    If EPA's basis is that it is important to finalize quickly 
assessments now in the later stages of development, has EPA concluded 
that it is more important to get these assessments prepared quickly 
than it is to get them prepared correctly, that is, in a manner that 
both EPA and NAS have concluded is critical to scientifically sound 
assessments?
    Answer. EPA is working as quickly as possible to finalize 
assessments. However, quality and correctness of assessments are not 
being sacrificed for speed.
    Question. Sound science and independent, open-to-the public, 
scientific peer review are the cornerstones of the IRIS program and the 
foundation upon which IRIS is built. Every IRIS assessment that has 
been finalized has been through rigorous independent external peer 
review and has been revised to address the peer review comments, 
ensuring that EPA is using the best-available sound science.
    The Board on Environmental Studies and Toxicology of NAS recently 
informed the Senate and House Appropriations Committees that it had 
unanimously concluded that in lieu of the two discretionary NAS IRIS 
assessment peer reviews called for by the conference report language 
for EPA's appropriation in title II of Public Law 112-74, it would be 
more productive and valuable for the IRIS program if NAS undertook a 
comprehensive in-depth review of EPA's IRIS report development process 
and the changes in that process contemplated by EPA. Do you concur with 
that conclusion?
    Answer. Yes, EPA agrees that it would be more productive and 
valuable for the IRIS Program if the NAS undertook a comprehensive in-
depth review of the IRIS assessment development process in lieu of peer 
reviewing two draft IRIS assessments. It is most appropriate for the 
NAS to address broad scientific issues rather than conducting reviews 
of individual IRIS assessments.
    Question. EPA is committed to a strong and robust IRIS program. The 
EPA welcomes NAS' review of the IRIS assessment development process and 
looks forward to working with the NAS to continue to strengthen the 
IRIS program.
    We have received several reports of newly developed IRIS toxicity 
values that are well below naturally occurring background levels of the 
chemicals involved to which the public is routinely exposed. If these 
values were scientifically valid, wouldn't one expect to find evidence 
of adverse health effects that to date are not apparent?
    Answer. By definition, a reference dose (RfD) is an estimate (with 
uncertainty spanning perhaps an order of magnitude) of a daily oral 
exposure to the human population (including sensitive subgroups) that 
is likely to be without an appreciable risk of deleterious effects 
during a lifetime. That is, the RfD is the level of exposure that a 
person could experience every day over their entire lifetime without an 
appreciable risk of harmful effects. The derivation of an RfD generally 
includes the use of uncertainty factors that account for limitations in 
scientific information. Therefore, it is designed to be public health 
protective. It is expected that a person's exposure to a certain 
chemical might vary throughout their lifetime, increasing at some 
points and decreasing at others. Exceeding the RfD for one day, or a 
week or more does not necessarily mean that an individual has a greater 
risk of a health effect. As exposure increases above the RfD for 
prolonged periods, then the potential risk for health effects 
increases. It is generally not possible to determine an exact exposure 
level at which the risk of adverse effects will start to increase. Nor 
is it generally possible to determine exactly how many days of exposure 
above the RfD it would take to increase the risk of health effects.
    In addition, the term ``background'' may mean different things, 
such as the production of endogenous compounds or naturally occurring 
substance. Just because something occurs naturally in the environment 
does not mean it is without harm. In some cases, naturally occurring 
substances may lead to adverse health effects in humans. For example, 
people in certain locations outside the U.S. are exposed to high levels 
of naturally occurring arsenic in their drinking water. Health effects, 
such as skin pigmentation and cancer, have been identified in these 
populations. In most cases, however, well-conducted epidemiological 
studies have not been performed to evaluate whether adverse effects are 
occurring at background levels of exposure.
    Finally, the human body does not discern between naturally 
occurring and manmade substances. The toxicity of a chemical is the 
same regardless of the source, and understanding the toxicity of a 
chemical, natural or not, makes for better informed decisions.
    Question. Moreover, in as much as the principal purpose of IRIS 
assessments is to educate the public and risk managers as to 
concentrations of chemicals above which unacceptable risks may exist, 
how useful are these values when they are at levels that risk managers 
and the public cannot rectify?
    Answer. IRIS assessments are useful to risk managers and the 
public. IRIS assessments provide information on the toxicity of 
chemicals. Risk managers use IRIS values, along with information about 
exposure, to characterize the public health risk of chemicals. When 
making decisions, they also take into consideration other factors, such 
as statutory and legal considerations, risk management options, public 
health considerations, cost/benefit considerations, and economic and 
social factors.
    It should also be noted that just because something occurs 
naturally in the environment does not mean it is without harm. The 
human body does not discern between naturally occurring and manmade 
substances. The toxicity of a chemical is the same regardless of the 
source, and understanding the toxicity of a chemical, natural or not, 
makes for better informed decisions. It is important that risk managers 
and the American public have the most up-to-date information on the 
health effects of chemicals in their environment.
    Question. When EPA develops a toxicity value that is lower than 
background levels in such public spaces as urban areas and schools, or 
at people's homes, does it evaluate the implications of such a value on 
public perception of safe levels of chemicals and on use of societal 
resources to address such exceedingly low values?
    Answer. IRIS assessments provide information on the toxicity of 
chemicals. When this information is combined with specific exposure 
information, government and private entities can use IRIS to help 
characterize the public health risks of chemical substances. When risk 
managers make decisions, they consider additional information, such as 
the use of societal resources, statutory and legal considerations, risk 
management options, public health considerations, cost/benefit 
considerations, and economic and social factors.
    Question. The IRIS program is very important to establishing 
credible cleanup standards that touch many people and organizations. 
It's very important that these standards be credible and be based on 
the best-available science. The Congress has asked EPA to implement the 
NAS recommendations with regard to the IRIS program to restore its 
credibility. Yet implementation is slow and reports are still moving 
through the approval process without the benefit of being subjected to 
the rigor recommended by the NAS. Could you explain why you are pushing 
through new standards for individual substances absent the sound 
science approach recommended by NAS?
    Again, our goal is to have the best-possible science guide this 
standard setting.
    Answer. EPA is using a systematic approach to implementing the NAS 
recommendations in a phased manner, based on stage of assessment 
development. Every IRIS assessment that has been finalized has been 
through rigorous independent external peer review and has been revised 
to address the peer review comments, ensuring that EPA is using the 
best-available sound science.
    Question. IRIS assessments and IRIS toxicity values are not 
standards. An IRIS human health assessment is a scientific and 
technical report that provides information on hazard identification and 
dose response. When information from an IRIS assessment is combined 
with specific exposure information, government and private entities can 
use IRIS to help characterize the public health risks of chemical 
substances. It is during the risk management part of the risk 
assessment/risk management paradigm that standards are developed. In 
making risk management decisions, EPA considers the supporting science, 
as well as statutory and legal considerations, risk management options, 
public health considerations, cost/benefit considerations, and economic 
and social factors.
    Could you explain why you are willing to have the IRIS program 
subjected to wide criticism by rushing through standards absent the 
rigor of an NAS type review?
    Many of us on the subcommittee have already heard from constituents 
that have problems with some of the proposals in the works.
    EPA has stated that it does not want its reforms in response to the 
NAS report to delay issuing of IRIS reports.
    Answer. IRIS assessments and IRIS toxicity values are not 
standards. An IRIS human health assessment is a scientific and 
technical report that provides information on hazard identification and 
dose response. When information from an IRIS assessment is combined 
with specific exposure information, government and private entities can 
use IRIS to help characterize the public health risks of chemical 
substances. It is during the risk management part of the risk 
assessment/risk management paradigm that standards are developed. In 
making risk management decisions, EPA considers the supporting science, 
as well as statutory and legal considerations, risk management options, 
public health considerations, cost/benefit considerations, and economic 
and social factors.
    EPA is using a systematic approach to implementing the NAS 
recommendations in a phased manner based on stage of assessment 
development. This is consistent with the advice of the NAS in their 
``Roadmap for Revision'' in chapter 7 of the formaldehyde review 
report. The NAS did not intend for their recommendations to slow down 
or delay issuing IRIS assessments, but rather noted that ``the changes 
suggested would involve a multiyear process and extensive effort by the 
staff of the National Center for Environmental Assessment and input and 
review by the EPA Science Advisory Board and others.''
    Independent, open-to-the public, scientific peer review is a 
cornerstone of the IRIS Program. Every draft IRIS assessment is subject 
to independent, external scientific peer review. Every IRIS assessment 
that has been finalized has been through rigorous independent external 
peer review and has been revised to address the peer review comments, 
ensuring that EPA is using the best-available sound science.
    Question. Given EPA's statement that IRIS documents do not have 
regulatory effect and given EPA's existing statutory authority at 
cleanup sites and for regulatory standards and permitting, are there 
any specific EPA program needs for IRIS values that cannot be met 
through EPA's other existing authorities? If so, please explain these 
needs. If not, please explain why it is sound public policy not to 
carry out the NAS recommendations before issuing IRIS values?
    Answer. IRIS was designed to develop assessment values for use 
throughout EPA, and this remains the case. The IRIS program develops 
health assessments and toxicity values in concert with scientists from 
across EPA's programs and regions. The toxicity values are then added 
to the IRIS database for use by EPA's program and regional offices and 
others. Time and again, EPA's program and regional office have 
indicated their need and strong support for the IRIS program.
    The IRIS program is responsible for developing IRIS health 
assessments and providing the associated toxicity values in the IRIS 
database. EPA's program and regional offices determine which toxicity 
values to use in their work. While we know that IRIS values are widely 
used, the IRIS program does not track what toxicity values the program 
offices use in every aspect of their work. The rigorous assessment 
development process, which includes opportunity for public comment and 
independent external peer review, ensures that EPA decisions will be 
based on the best-available science.

                       REGIONAL HAZE REGULATIONS

    Question. What steps has EPA taken to coordinate more effectively 
with States on regional haze issues in response to the congressional 
directive included in the conference report accompanying the fiscal 
year 2012 Appropriations Act?
    Why is EPA rejecting State Implementation Plans that reduce 
visibility impairment consistent with the Clean Air Act (CAA) and the 
congressional directive to work with the States?
    Answer. Since 1999, EPA has been collaborating with the States and 
with their regional planning organizations on the development of 
regional haze plans. Our preference has always been to allow States 
that are moving forward to complete their work, and then to give due 
deference to the emission controls decisions that they reach based on 
accurate technical information. In fact, we have fully approved the 
plans for the District of Columbia and the following 12 States:
  --California;
  --Delaware;
  --Illinois;
  --Kansas;
  --Maine;
  --Maryland;
  --New Hampshire;
  --New Jersey;
  --Rhode Island;
  --South Dakota;
  --Vermont; and
  --Wisconsin.
    All have proposed to fully approve the Alaska, Colorado, 
Connecticut, Idaho, Massachusetts, and Oregon plans.
    In addition, for the following 10 States, we have fully approved 
the regional haze plans with the single exception that we have adopted 
a simple ``housekeeping'' Federal plan to substitute reliance on the 
Cross State Air Pollution Rule (CSAPR) for these States' earlier 
decision to rely on the Clean Air Interstate Rule, an approach that 
will not result in any additional control requirement for any 
powerplants in these States solely for regional haze purposes:
  --Georgia;
  --Indiana;
  --Iowa;
  --Kentucky;
  --Missouri;
  --Ohio;
  --Pennsylvania;
  --South Carolina;
  --Virginia; and
  --West Virginia.
    We collaborated with these States on this approach of adopting the 
CSAPR-based Federal plan. These States do not need to take any further 
action to meet the current regional haze planning requirements. We 
fully expect to add Tennessee to this group once the State submits and 
we approve a revision to its State Implementation Plan (SIP) for a 
particular source (Eastman Tennessee) so that this source can pursue 
its preferred approach to the regional haze requirements. We have also 
relied on a CSAPR-based Federal plan element in the case of Nebraska, 
such that Nebraska also does not need to make any changes in its SIP. 
North Carolina and Alabama need to amend their SIPs to substitute 
reliance on CSAPR for their original reliance on CAIR, but otherwise we 
have fully approved their plans.
    We have also been collaborating very closely with Florida on staged 
revisions to its plan to address the fact that Florida cannot rely on 
CSAPR to meet all of its regional haze requirements for powerplants. We 
have proposed approval of the revisions submitted to date and 
anticipate proposing approval of the remaining revisions as they are 
submitted. Mississippi also could not rely on CSAPR to meet all of its 
regional haze requirements and therefore we had to disapprove its plan, 
but we were not required to issue a Federal plan so we did not do so. 
We are working with Mississippi to help it address this issue within 
the next 2 years so that a Federal plan can be avoided.
    In Arkansas and Louisiana, we could not fully approve the SIP and 
we were required to take final disapproval action on some portions 
already, but we were not required to issue a Federal plan so we did not 
do so. We are working with these States to help them address the 
disapproval issues within the next 2 years so that a Federal plan can 
be avoided. The same situation will apply for Utah if we finalize our 
proposed disapproval of portions of its SIP.
    In Hawaii, Montana, and the U.S. Virgin Islands, by mutual 
agreement we have developed and proposed complete Regional Haze Federal 
plans because those governments did not have the resources to develop 
SIPs.
    Of the 11 States not mentioned above, final actions remain to be 
taken on 10 States. For these 10 States, if we do not fully approve the 
SIP we are required by a consent decree to adopt a Federal plan.\1\ 
Because of this requirement, we have already adopted final partial 
Federal plans for New Mexico, North Dakota, and Oklahoma. We have 
proposed to disapprove portions of the SIPs for Arizona, Michigan, 
Minnesota, Nevada, New York, and Wyoming, and there is not sufficient 
time remaining for the State to submit new plan revisions. However, we 
are duly considering the comments received from these States on our 
proposed disapprovals. Also, we will collaborate with these States if 
they wish to replace the final Federal plan with a State plan. We have 
negotiated significant consent decree extensions for portions of the 
SIPs from Arizona, Washington, and Oklahoma, and for the entire SIP 
from Texas, and we will take advantage of this time to collaborate with 
these States.
---------------------------------------------------------------------------
    \1\ This distinction in consent decree terms across States stemmed 
from the interaction of the provisions of the Clean Air Act and the 
timing of the actions taken by the States to submit their plans, not 
from any choice on the part of the EPA.
---------------------------------------------------------------------------
    Question. The stringent pollution control equipment being selected 
by EPA as BART under the Regional Haze Rule is that which would 
typically be classified as best-available control technology (BACT) or 
maximum achievable control technology (MACT), which is more stringent 
than typically would be classified as BART.
    What is the basis for this change?
    Answer. EPA assesses all regional haze SIPs in accordance with the 
Regional Haze Rule BART Guidelines, which were issued in 2005. With 
respect to BART determinations, EPA reviews the State's assessment of 
each individual source considering five statutory factors. These five 
factors are:
  --the costs of compliance;
  --the energy and nonair quality environmental impacts of compliance;
  --any existing pollution control technology in use at the source;
  --the remaining useful life of the source; and
  --the degree of improvement in visibility which may reasonably be 
        anticipated to result from the use of such technology.
    As determinations are made on a source-specific basis considering 
all of the five factors, there is no promotion of one control 
technology over another. Similarly, there is no ``bright line'' as to 
what the EPA considers to be cost-effective technology nor is there any 
presupposition that BART is more or less stringent than BACT or MACT 
would be for affected sources. The magnitude of the visibility 
improvement expected may warrant greater emission reductions at a 
higher cost, for example when the visibility improvement is very large. 
Alternatively, a BART determination may require fewer emission 
reductions at a lower cost when the visibility improvement is not as 
significant.
    Question. EPA's regional haze SIP requirements are found in the 
Regional Haze Rules (40 CFR 51.300), Appendix Y to Part 51 (Guidelines 
for BART Determinations under the Regional Haze Rule), and the preamble 
discussion in the Federal Register (70 FR 39104) concerning Appendix Y. 
Appendix Y indicates that NOX control costs more than $1,500 
per ton are not cost effective for BART purposes.
    Is EPA no longer relying on Appendix Y presumptive limits, despite 
being part of the BART guidance relied on by States and companies? If 
so, what is the justification for this disregard for Appendix Y?
    Answer. EPA is still using its guidance on presumptive limits. 
Appendix Y does not indicate that NOX control costs more 
than $1,500 per ton are not cost effective for BART. In Appendix Y, EPA 
states that most sources can meet the presumptive limits for less than 
$1,500 per ton, but the guidelines do not establish that value as a 
threshold for cost effectiveness. States must conduct a proper 
evaluation of the five statutory factors, as required by 40 CFR 
51.308(e)(1)(ii)(A) and section 169A(g) of the CAA, before determining 
whether the presumptive emission limits are the ``best available 
retrofit controls'' for affected units. Because the five factors are 
evaluated separately and weighted accordingly, there are no ``bright 
line'' thresholds for cost effectiveness or visibility improvement.
    Question. When a State has determined that alternatives (Selective 
Non-Catalytic Reduction technology or combustion controls, such as Low 
NOX Burners) could achieve visibility improvements at much 
lower cost with visibility benefits that are on a reasonable path to 
the 2064 goal, what is EPA's legal justification for requiring 
different, more expensive retrofit controls and more stringent 
emissions limits?
    Answer. The overarching goal of section 169A of the CAA is for 
States to submit SIPs that ensure reasonable progress toward remedying 
visibility impairment in Class I areas. Each SIP must include the 
measures necessary to make reasonable progress, including BART limits 
(or alternatives that achieve greater reasonable progress than BART). 
Section 169A of the CAA defines the BART requirements as ``an emission 
limitation based on the degree of reduction achievable through the 
application of the best system of continuous emission reduction for 
each pollutant which is emitted'' by a BART eligible facility, and 
requires that States consider five factors when assessing a control 
determination for BART:
  --the costs of compliance;
  --the energy and nonair quality environmental impacts of compliance;
  --any existing pollution control technology in use at the source;
  --the remaining useful life of the source; and
  --the degree of improvement in visibility which may reasonably be 
        anticipated to result from the use of such technology.
    In considering these five factors, States must use technically 
sound approaches in estimating costs and visibility improvements. 
Assuming that a State does this, the BART requirement is satisfied by 
putting in place emission reduction measures that are reasonable in 
light of the costs and visibility benefits associated with a control 
technology, not by any presumed path between current conditions and 
natural conditions.
    Question. The EPA Air Pollution Control Cost Manual, Sixth Edition, 
was published in 2002 and has been used by EPA in estimating costs in 
its BART determinations.
    Given that it was published in 2002, is it out-of-date? What steps 
are being taken by EPA to update it?
    Answer. The current version of the Control Cost Manual is the sixth 
edition. Revisions of the Control Cost Manual usually include either 
publication of new chapters or substantial revisions to existing ones. 
Given the size of the Control Cost Manual (18 chapters) and the 
reliance by many parties on its contents, EPA limits completion and 
publication of new editions to avoid confusion on the State of the 
contents.
    The current version of the Control Cost Manual includes a well-
recognized control cost methodology that provides consistency for 
States and local agencies in reviewing cost estimates prepared for BART 
and other programs, and offers a foundation for the comparison of cost 
estimates prepared by different sources in different locales. This 
methodology is still well-recognized and valuable today. It should be 
noted that a major reason for EPA disapproval of cost estimates 
included in Regional Haze SIPs has been the failure to follow the 
methodology for cost estimation provided in the Control Cost Manual by 
either including items that are not part of this methodology or not 
including all cost items. EPA has no reason to believe that the 
methodology for cost estimation is out-of-date.
    Question. How does EPA, a State, or a company integrate current 
cost information for purposes of regional haze compliance planning with 
the methodology prescribed by EPA's 2002 cost manual?
    Answer. The Control Cost Manual has considerable cost and other 
information (design and installation, to name two) to serve as a basis 
for the preparation of BART analyses. However, we want to be clear that 
the Control Cost Manual is not the only source of cost information for 
a BART analysis. For instance, the reference to the Control Cost Manual 
in the BART Guidelines, which is an important basis for cost analyses 
to be done for Regional Haze SIPs, clearly recognizes the potential 
limitations of the Manual and the need to consider additional 
information sources.
    A source can use data supplied by an equipment vendor or firm (i.e. 
quotes, bids, or budget estimates) as cost information for a BART 
analysis. The basis for using these data should be clearly documented, 
either by the equipment vendor or firm or by a referenced source (e.g., 
the Control Cost Manual or other recognized source of cost 
information). Thus, where the Control Cost Manual's information is 
valuable and up to date for use in BART analyses, then it should be 
used; where additional equipment cost data is needed to overcome any 
limitations with the Control Cost Manual's data, such information 
should be clearly documented as previously expressed, and should be 
provided to support analyses using the Control Cost Manual's 
methodology.
    Question. Given that the Regional Haze program is a program to 
protect the aesthetics of national parks and national wilderness areas, 
and not human health, should the required visibility improvement be 
discernible?
    Answer. Failing to consider less-than-perceptible improvement in 
visibility impairment would ignore the CAA's intent to have BART 
requirements apply to sources that contribute to, as well as cause, 
such impairment (70 FR 39104; RH Regulations and Guidelines for Best 
Available Retrofit Technology (BART) Determinations, July 6, 2005). A 
perceptible visibility improvement is not a requirement of the BART 
determination as a visibility improvement that is not perceptible may 
still be determined to be significant. The importance of visibility 
impacts below the thresholds of perceptibility from each of a number of 
individual sources cannot be ignored given that regional haze is a 
problem that is produced by a multitude of sources and emissions that 
are distributed across a broad geographic area.
    Question. EPA has used CALPUFF Version 5.8 to conduct visibility 
modeling to analyze the impacts on visibility impairment from proposed 
NOX retrofit technologies.
    How does EPA respond to scholarly, peer-reviewed studies asserting 
that CALPUFF Version 5.8 overestimates visibility improvements?
    Answer. While the studies mentioned are stated to be peer-reviewed, 
they are largely papers included as part of general proceedings at 
conferences, as opposed to a formal peer review associated with 
submission to scientific journals. Therefore, we do not consider these 
references suitable for establishing the validity of a model or 
demonstrating that a model has undergone independent scientific peer 
review in accordance with EPA's Guideline on Air Quality Models 
(published as Appendix W to 40 CFR part 51). These guidelines, which 
oversee the EPA's approach to updating air quality models, require that 
studies supporting the air quality model's validity be appropriately 
peer-reviewed through publication in a professional journal, a panel 
review by subject experts, or other formal and well-documented process.
    That said, in promulgating the BART guidelines, the EPA made the 
decision to recommend the use of the CALPUFF model to estimate the 98th 
percentile visibility impairment rather than the highest daily impact 
value as proposed. This decision acknowledged that the regulatory 
version of the CALPUFF model could lead to modeled over predictions 
and, therefore, provide conservative (higher) results for peak 
impacts.\2\ The decision to use the 98th percentile rather than the 
highest daily value is EPA's adjustment to account for potential 
overestimates.
---------------------------------------------------------------------------
    \2\ ``Most important, the simplified chemistry in the model tends 
to magnify the actual visibility effects of that source. Because of 
these features and the uncertainties associated with the model, we 
believe it is appropriate to use the 98th percentile--a more robust 
approach that does not give undue weight to the extreme tail of the 
distribution.'' 70 FR 39104, 39121.
---------------------------------------------------------------------------
    Question. What does EPA need to do to update CALPUFF Version 5.8? 
Is this underway?
    Answer. In coordination with the Federal Land Mangers (FLMs), EPA 
is currently pursuing updates to the current regulatory version of 
CALPUFF (Version 5.8) to address known ``bugs'' and expects to complete 
these updates later this year. EPA and FLM representatives met with 
WEST Associates and the model developer, TRC, in February 2011 and 
discussed the current status of the regulatory version of CALPUFF and 
the updates implemented by TRC related to underlying model formulation 
and to account for atmospheric chemistry. The information provided to 
EPA at that meeting indicated that the planned updates account for new 
science related to complex chemistry reactions in the atmosphere. 
Because this is a regulatory application for which this model was never 
approved under Appendix W, these changes would necessitate a notice and 
comment rulemaking and not a simple update as previously done to 
address bug-fixes.
    At this time, EPA and the FLM representatives are planning to 
review all available models to determine their suitability for these 
analyses, including updated versions of the CALPUFF modeling system. 
After review of public comment from EPA's 10th Modeling Conference, EPA 
will provide more concrete plans on the process and plans for updating 
Appendix W to address chemistry for individual source impacts on ozone, 
secondary PM2.5 and regional haze/visibility impairment.
    Question. Why is EPA not allowing the use of more recent versions 
of CALPUFF, such as Version 6.4?
    Answer. The newer version(s) of CALPUFF have not received the level 
of review required for use in a regulatory context. Based on EPA's 
review of the available evidence, the models have not been shown to be 
sufficiently documented, technically valid, and reliable for use in a 
BART decisionmaking process. Because of documented concern with the 
science updates in the new CALPUFF versions, which affect air quality 
related values, EPA has not approved these new versions of the CALPUFF 
model as a ``preferred'' model. The use of the regulatory version is 
approved for increment and NAAQS analysis of primary pollutants only. 
Currently, CALPUFF Versions 6.112 and 6.4 have not been approved by EPA 
for even this limited purpose.
    Under the BART guidelines, CALPUFF should be used as a screening 
tool and appropriate consultation with the reviewing authority is 
required to use CALPUFF in a BART determination as part of a SIP or 
FIP. Moreover, Appendix W does not identify a particular modeling 
system as ``preferred'' for modeling conducted in support of State 
implementation plans under 40 CFR 51.308(b) nor for supporting 
secondary particulate matter or visibility assessments. Under this 
general framework, EPA followed the general recommendation in Appendix 
Y to use CALPUFF as a screening technique only subject to Appendix W 
requirements, which include an approved protocol for using the current 
5.8 version.
    Furthermore, it should be noted, that the U.S. Forest Service 
(USFS) and EPA review of CALPUFF (Version 6.4) results for a limited 
set of BART applications clearly indicates that the lower results are 
driven by two input assumptions and not associated with the ``improved 
chemistry.'' Use of the ``full'' ammonia limiting method and finer 
horizontal grid resolution are the primary drivers in reducing modeled 
visibility impacts in CALPUFF (Version 6.4). These input assumptions 
have been previously reviewed by EPA and the FLMs and have been 
rejected based on lack of documentation, adequate peer-review, and 
technical justification and validation.
    Question. In its cost estimates, it appears that EPA is 
substituting the judgment of its experts, the National Park Service, 
and USFS for the cost judgments of the States, utilities and most 
notably expert engineering firms. For example, EPA's cost estimates are 
significantly lower than the cost estimates prepared by Black and 
Veatch, Sargent and Lundy, and Burns and McDonnell--each of whom is 
actively engaged in the business of designing and retrofitting 
Selective Catalytic Reductions (SCR) and other pollution control 
equipment on existing powerplants.
    What is the legal authority for EPA's lower cost estimates?
    What is the legal authority for rejecting cost estimates based on 
actual construction experience and market-supported bid documents?
    Answer. When reviewing State plans, EPA must consider all the cost 
information in the record. However, it would be arbitrary and 
capricious for EPA to accept submitted cost information without any 
analysis of its accuracy or consideration of significant issues raised 
in comments. It would also be arbitrary and capricious for EPA to 
simply reject cost estimation studies submitted by a State or source, 
and we have not done so to date. Where EPA has itself estimated the 
cost of control, this is because of specific flaws in the cost estimate 
submitted by a State, and both our finding that there were flaws and 
our own cost estimates have then been subject to public notice and 
comment.
    Question. How is EPA taking into account the impact of higher 
elevations present in the Western United States over those in the 
Eastern United States in its regional haze retrofit technology 
decisions, and what is the effect of higher elevations on the operation 
of SCRs?
    Answer. A retrofit SCR at high elevation could require a somewhat 
larger unit than what might be required at lower elevations. Any 
differences in costs necessary for larger units would be part of the 
factors considered in making the BART determination. For example, in 
the case of the San Juan Generating Station in New Mexico, which is at 
a particularly high altitude compared to other powerplants, we modified 
our original cost estimates to increase SCR costs in response to 
comments from the owners of the station on this particular point. Cost 
estimates submitted by other Western States, often prepared by the 
affected sources, have not always included an explicit cost adjustment 
for this possibility.
    Question. How is EPA taking into account retrofit challenges 
associated with congested site and equipment layouts of individual 
facilities in its cost estimates of SCRs?
    How is EPA taking into account the need for an affected utility 
company to move and relocate previously installed pollution control 
equipment in order to accommodate SCRs?
    Answer. Where the State has provided reasoned cost estimates of 
equipment staging and other operational or logistical concerns in 
installing retrofits, EPA adopts and approves the State's figures when 
evaluating a SIP for approval. In cases where EPA must estimate these 
costs independently, EPA relies on its engineering judgement and 
experience to make reasoned cost estimates. In some instances, EPA has 
conducted site visits and revised its estimates to accommodate spacing 
concerns and in another case, has invited public comment to better 
estimate costs and compliance timing concerns for a source that was 
faced with several SCR retrofits.
    Question. In computing the cost per ton of emission reductions 
expected to result from adding new controls on a unit, what is the 
legal justification for EPA lowering its cost effectiveness 
determinations by including reductions already achieved by emission 
controls that already exist on that unit?
    For example, if Low NOX Burners already exist on a unit, 
why does EPA assume that emission reductions resulting from those Low 
NOX Burners should instead be attributed to new SCR controls 
and thus result in lower dollars per ton removed amount for the SCR 
controls?
    Answer. These questions address the distinction between what is 
commonly referred to as average versus incremental cost effectiveness 
when evaluating the cost factor for the BART determination. Average 
cost effectiveness is the overall cost per ton of implementing a given 
control option compared to the control (if any) that is in place now or 
was in place as of some historical baseline date. Incremental cost 
effectiveness is the marginal cost per ton of implementing each 
succeeding and more stringent control option. Usually, incremental 
cost/ton will be higher than average cost/ton. The BART Guidelines 
recommend consideration of both types of cost effectiveness metrics 
when making a BART determination. It is a misperception that EPA 
considers only the average cost effectiveness when reviewing regional 
haze SIPs, i.e., that we give credit to SCR for emission reductions 
that could be achieved by Low NOX burners. The records of 
our actions on regional haze SIPs document that EPA has considered both 
metrics when reviewing whether a State has made a technically correct 
and reasoned BART determination, or when EPA makes a BART 
determination. When we use BART outcomes that have been decided in 
other States or for other sources in the same State as benchmarks for 
what costs are reasonable, we logically compare incremental cost/ton 
values to incremental cost/ton values, and average cost/ton values to 
average cost/ton values. EPA does not use a bright line test for either 
the average or the incremental cost/ton.
    Question. CAA requires reasonable progress toward the goal of 
reducing regional haze at national parks and wilderness areas for 2064.
    If EPA requires the most stringent pollution reduction equipment on 
nearby coal plants today, what steps will be left to take in the future 
to achieve this goal?
    Answer. In the regional haze rule, EPA recognized the relatively 
long time horizon necessary to achieve the aggressive statutory goal of 
the prevention of any future, and the remedying of any existing, 
impairment of visibility in Class I areas. CAA, however, neither 
requires States to achieve that goal by 2064 nor does it excuse States 
from adopting reasonable measures that would achieve the goal more 
quickly. EPA adopted an analytical requirement in the regional haze 
rule requiring States to consider the measures necessary to achieve the 
national goal by 2064. The adoption of this analytical requirement does 
not mean that States should delay the adoption of reasonable measures 
such that the national goal is not achieved until 2064.
    States must adopt, in their SIPs, the measures necessary to make 
reasonable progress, which is defined as the emission reduction 
measures that are reasonable to put in place in a given planning period 
in light of costs and visibility benefits, not by any presumed path 
between current conditions and natural conditions. Given the 
significant impact on visibility from many coal plants and the highly 
cost effective control measures, in many cases the installation of 
controls on coal plants is appropriate to ensuring reasonable progress. 
Even with such measures, much additional work will still be necessary 
in future planning periods to meet the national goal.

        INFORMATION TECHNOLOGY EQUIPMENT--EXECUTIVE ORDER 13514

    Question. Executive Order 13514 requires the Federal Government to 
purchase energy-efficient computer equipment that has been approved by 
Electronic Product Environmental Assessment Tool (EPEAT). EPEAT is a 
proprietary list owned by the Green Electronics Council (GEC), which 
certifies information technology equipment to the Institute of 
Electrical and Electronics Engineers (IEEE) 1680 standard. GEC charges 
six-figure fees to manufacturers to certify that their equipment is 
compliant with IEEE 1680 and eligible for government purchase. Other 
testing labs have indicated that they are capable of certifying 
products to IEEE 1680 at a much lower price.
    Is EPA taking any steps to allow for competition, which will reduce 
the prices that the Government pays for computer equipment?
    Answer. EPA is not responsible for the management of EPEAT or GEC, 
but EPA has a representative on the EPEAT Advisory Council who, in that 
capacity, has opportunities to provide suggestions to the GEC on ways 
to improve this green purchasing tool.
    Through its role on the EPEAT Advisory Council, EPA has 
communicated, and the GEC has recognized, the value of increasing 
competition for verification services under the EPEAT Program. In May 
2012, the GEC entered into a formal partnership with four third-party 
certification organizations to expand the breadth and depth of 
verification options available to manufacturers under the EPEAT 
program. These organizations--UL Environment, Intertek, VDE, and DEKRA 
SE--just took part in an extensive training GEC organized on the EPEAT 
system in preparation for their verification of products on the EPEAT 
Registry. For further information, please see http://www.epeat.net/pre-
network.
    By way of clarification, the GEC utilizes a sliding scale under 
which the annual fees that manufacturing companies pay for verification 
services are calibrated according to their sales volume. Thus, smaller 
firms with lower sales volume pay significantly less in annual fees 
than do firms with higher sales. For further information about fees, 
please see http://www.epeat.net/documents/subscriber-resources/epeat-
mse-1680.1-fee-schedule.2011-12.pdf.
                                 ______
                                 
               Questions Submitted by Senator John Hoeven

                       FORT BERTHOLD RESERVATION

    Question. The Environmental Protection Agency's (EPA) Synthetic 
Minor Source rule has the potential to shut down oil and gas drilling 
on the Fort Berthold Reservation if a workable rule is not finalized by 
August 30, 2012. Will EPA have a rule finalized by August 30 to ensure 
the economic activity continues on the Fort Berthold Reservation? If a 
plan is not finalized by August 30, how will EPA provide a pathway to 
compliance for operators to ensure drilling will continue on the 
Reservation?
    Answer. In responding to the question, EPA assumes that the 
``Synthetic Minor Source rule'' refers to the Review of New Sources and 
Modifications in Indian Country Rule (also known as the Tribal Minor 
New Source Review Program) published July 1, 2011 (76 FR 38748). EPA 
does not believe there is the potential to shut down oil and gas 
drilling on the Fort Berthold Reservation. In fact, just the opposite 
is true. For projects in Indian country that exceed major source 
thresholds, EPA has now made ``synthetic minor'' permits available. 
This streamlined permitting mechanism has previously been available in 
States, but only became available in Indian country with the 
publication of the Tribal Minor New Source Review (NSR) Program. 
Without this streamlining mechanism, oil and gas drilling projects on 
Fort Berthold that exceed major source thresholds would be subject to 
permitting under the Prevention of Significant Deterioration (PSD) 
Program.
    Ten companies operating on the Fort Berthold Reservation are 
currently subject to consensual enforcement agreements for drilling 
operations that may have been conducted without first obtaining the 
appropriate permits. EPA is actively working with these companies to 
amend their agreements to allow construction of new wells during July 
and August of 2012 without first obtaining synthetic minor permits from 
EPA. This action will effectively protect the companies through the end 
of August 2012, when the agreements expire.
    We recognize that additional measures are necessary to maintain the 
continued pace of development of oil and gas resources on the Fort 
Berthold Reservation. To accomplish that goal, EPA, in consultation 
with the tribes and the Fort Berthold Reservation operators, is 
developing a targeted rule for the Fort Berthold Reservation that would 
provide enforceable controls on specific oil and gas production 
equipment. For the large majority of oil production sources, these 
controls are likely to be sufficient to limit emissions to below the 
major source PSD thresholds. EPA also proposed synthetic minor permits 
for several of these sources. These proposed permits and the comments 
received regarding them have informed the rule development.
    EPA has committed to develop the Tribal Minor NSR rule in a timely 
manner. Management in both the regional and headquarters offices fully 
support this effort and have already committed substantial technical 
and legal staff resources to the rule. To date, there have been no 
permit-related delays in the development of new oil wells on the 
Reservation. If Fort Berthold operators desire an added layer of 
insurance against operating delays or interruption of activities they 
are encouraged to file synthetic minor permit applications for 
equipment they intend to operate in the near term after August 30, 
2012. EPA does not believe this added insurance is necessary, but will 
process quickly any permits that it receives.

       PERMITTING GUIDANCE--DIESEL FUEL AND HYDRAULIC FRACTURING

    Question. May 4, 2012, EPA released draft permitting guidance for 
using diesel fuel in oil and gas hydraulic fracturing.
    How is EPA going to enforce this guidance with States that have 
primacy?
    Question. In a State with Underground Injection Control primacy, 
will EPA have the ability to over-file against a company that does not 
permit a well that uses diesel?
    Answer. EPA's draft permitting guidance for diesel fuels hydraulic 
fracturing was directed at EPA permit writers where EPA is the 
enforcement authority. As indicated in the draft guidance, it also sets 
forth EPA's best current interpretation of the existing statutory and 
regulatory requirements with respect to diesel fuels hydraulic 
fracturing, and, therefore, may be useful to States. States with 
primacy for the Class II Underground Injection Control program have 
some latitude in designing a permitting program for diesel fuels 
hydraulic fracturing. While in some cases the EPA may have the 
authority to bring an enforcement action in a primacy State, it is not 
the EPA's intention to assume the role of State primacy agencies.

       PERMITTING GUIDANCE--DIESEL FUEL AND HYDRAULIC FRACTURING

    Question. Please identify what is the source of dollars EPA is 
using to complete the study identified by the Congress in EPA's fiscal 
year 2010 budget?
    Answer. EPA is using the funds that the Congress appropriated 
through the Science and Technology (S&T) appropriation in fiscal years 
2010, 2011, and 2012 to continue to study the relationship between 
hydraulic fracturing and drinking water as specified in the 2010 Senate 
Appropriations Committee conference report.
    Question. Please identify the source of dollars the EPA is using 
for any other study of hydraulic fracturing the EPA is a party.
    Answer. Currently, we are not doing any hydraulic fracturing 
research outside of the fiscal year 2010 ``Plan to Study the Potential 
Impacts of Hydraulic Fracturing on Drinking Water Resources''. EPA will 
continue to use the drinking water research S&T appropriated funds to 
complete this study.
    Question. Please identify the source of funds for each individual 
study.
    Answer. The only hydraulic fracturing study EPA is conducting is 
the fiscal year 2010 congressionally requested, ``Plan to Study the 
Potential Impacts of Hydraulic Fracturing on Drinking Water 
Resources.'' All current hydraulic fracturing research falls under the 
purview of this study plan. EPA will continue to use the drinking water 
research S&T appropriated funds to complete this study.

                          SUBCOMMITTEE RECESS

    Senator Reed. If there are no further questions, I will 
conclude the hearing.
    [Whereupon, at 12:07 p.m., Wednesday, May 16, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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