[Senate Hearing 112-827]
[From the U.S. Government Publishing Office]







                                                        S. Hrg. 112-827

                         CLEAN AIR ACT AND JOBS

=======================================================================


                             JOINT HEARING

                               BEFORE THE

              SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY

                                AND THE

             SUBCOMMITTEE ON GREEN JOBS AND THE NEW ECONOMY

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 17, 2011

                               __________

 Printed for the use of the Senate Committee on Environment and Public 
                                 Works


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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      ONE HUNDRED TWELFTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
FRANK R. LAUTENBERG, New Jersey      JOHN BARRASSO, Wyoming
BENJAMIN L. CARDIN, Maryland         JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico                MIKE JOHANNS, Nebraska
JEFF MERKLEY, Oregon                 JOHN BOOZMAN, Arkansas
KIRSTEN GILLIBRAND, New York
       Bettina Poirier, Majority Staff Director and Chief Counsel
                 Ruth Van Mark, Minority Staff Director
                                 ------                                

              Subcommittee on Clean Air and Nuclear Safety

                  THOMAS R. CARPER, Delaware, Chairman
MAX BAUCUS, Montana                  JOHN BARRASSO, Wyoming
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont             LAMAR ALEXANDER, Tennessee
JEFF MERKLEY, Oregon                 MIKE JOHANNS, Nebraska
BARBARA BOXER, California, (ex       JAMES M. INHOFE, Oklahoma, (ex 
    officio)                             officio)
                                 ------                                

             Subcommittee on Green Jobs and the New Economy

                   BERNARD SANDERS, Vermont, Chairman
THOMAS R. CARPER, Delaware           JOHN BOOZMAN, Arkansas
JEFF MERKLEY, Oregon                 JEFF SESSIONS, Alabama
BARBARA BOXER, California, (ex       JAMES M. INHOFE, Oklahoma, (ex 
    officio)                             officio)
























                            C O N T E N T S

                              ----------                              
                                                                   Page

                             MARCH 17, 2011

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..     1
Sanders, Hon. Bernard, U.S. Senator from the State of Vermont....     3
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     5
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland     7
Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee..     8
Lautenberg, Frank R., U.S. Senator from the State of New Jersey, 
  prepared statement.............................................   110

                               WITNESSES

Somson, Barbara, legislative director, International Union, 
  United Automobile, Aerospace & Agricultural Implement Workers 
  of America (UAW)...............................................    11
    Prepared statement...........................................    13
    Reports:
        Driving Growth: How Clean Cars and Climate Policy Can 
          Create Jobs, Natural Resources Defense Council, United 
          Auto Workers and Center for American Progress, Alan 
          Baum, The Planning Edge and Daniel Luria, Michigan 
          Manufacturing Technology Center........................    17
        Our Projects, DOE, Loan Programs Office..................    36
        DOE,The Recovery Act: Transforming America's 
          Transportation Sector, Batteries and Electric Vehicles, 
          Wednesday, July 14, 2010...............................    39
Homrighausen, Richard P., mayor, City of Dover, OH...............    47
    Prepared statement...........................................    49
Allen, Paul J., senior vice president of Corporate Affairs and 
  chief environmental officer for Constellation Energy...........    63
    Prepared statement...........................................    65
Montgomery, W. David, Ph.D., vice president, Charles River 
  Associates.....................................................    71
    Prepared statement...........................................    74
Yann, James A., managing director, Alstom Power..................    84
    Prepared statement...........................................    86

 
                         CLEAN AIR ACT AND JOBS

                              ----------                              


                        THURSDAY, MARCH 17, 2011

                               U.S. Senate,
         Committee on Environment and Public Works,
              Subcommittee on Clean Air and Nuclear Safety,
            Subcommittee on Green Jobs and the New Economy,
                                                    Washington, DC.
    The subcommittees, met pursuant to notice, at 10 a.m. in 
room 406, Dirksen Senate Office Building, Hon. Thomas R. 
Carper, (chairman of the Subcommittee on Clean Air and Nuclear 
Safety) presiding.
    Present: Senators Boxer, Inhofe, Carper, Barrasso, Sanders, 
Boozman, Baucus, Lautenberg, Cardin, Merkley, Vitter, Sessions, 
Alexander and Johanns.

STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM THE STATE 
                          OF DELAWARE

    Senator Carper. Good morning, everybody. Happy St. 
Patrick's Day. Welcome to you all. What a beautiful day. What a 
great day. St. Patrick is smiling on us today and you could not 
ask for a lovelier day to hold this hearing.
    We appreciate the effort of all of the witnesses to be with 
us today. I am especially delighted to be co-chairing this 
hearing with my colleague, Bernie Sanders.
    Today's hearing is focused, as you know, on exploring the 
link between the Clean Air Act and the economy. Senators will 
have about 5 minutes for their opening statements and then we 
will recognize our panel of witnesses. Following the panel 
statements, we are going to have a couple of rounds of 
questions, maybe two rounds of questions, of roughly 5 minutes 
each.
    The Government, as some of you have heard me say before, I 
think Government has many roles to play. I think one of the 
most important roles we have to play is to try to provide what 
I call a nurturing environment for job creation, job 
preservation.
    In my State, and frankly in any State in this Country, if 
we have companies who are successful, they are playing by the 
rules, they are being good corporate citizens, they are making 
money, paying taxes, hiring people to work, people coming out 
of college and universities, out of high schools, off of 
welfare rolls, off of unemployment rolls, in my business, if 
you have all of that going for you, the rest is pretty easy. 
The role of Government is not to be the lap dog for business, 
but to try to provide a nurturing environment for job creation.
    For the last 40 years, EPA has tried to do its part to 
enable the Federal Government to play that critical role. EPA 
has sought to foster economic growth while ensuring that 
Americans are protected from life threatening pollution 
including air pollution.
    In 1970, President Nixon signed into law the Clean Air Act. 
This Act established a framework, as we know, to curb, among 
other things, our air pollution. This law was so successful 
that over 200,000 lives were saved between 1970 and 1990.
    In 1990, President George Herbert Walker Bush built upon 
President Nixon's legacy with the Clean Air Act Amendments of 
1990. That is the Act that gave us the clean air laws that we 
live with today.
    Lately, some have sought to make the claim that the Clean 
Air Act has raised costs for consumers and hurt our economy. 
But on closer analysis, the facts tell a somewhat different 
story.
    For example, since 1990, electricity rates, adjusted for 
inflation, have stayed constant in the United States while our 
Real Gross Domestic Product has grown by some 60 percent. At 
the same time, we have saved thousands of lives, tens of 
thousands of lives, and we have ensured that our children, 
along with their parents and grandparents, can breathe cleaner, 
healthier air.
    For 2010 alone, cleaning up soot and smog saved over 
160,000 lives. That is over twice the number of people who live 
where I live in Wilmington, DE. At the same time, our Country 
saved some $1.3 trillion in healthcare costs by savings lives, 
reducing asthma attacks and reducing sick days. Put another 
way, Clean Air Act benefits outweigh the costs by a margin of 
30 to 1. Talk about return on investment. It just does not get 
a whole lot better than that.
    These clean air regulations help us save billions of 
dollars on public health costs while providing a multitude of 
opportunities for good paying American jobs. According to 
recent reports, clean air regulations that will be promulgated 
later this year are expected to create as many as one-half 
million new jobs over the next 5 years, jobs that come at a 
crucial time as our economy continues to recover and begins to 
grow.
    These are American jobs in engineering, American jobs in 
design as well as in manufacturing, installing and operating 
pollution control and clean energy technology that is made in 
America and sold all over the world.
    In closing, let me just leave us all with a quote from 
Harry Truman. President Harry Truman once said, and I am going 
to paraphrase what he said, he said that the only thing that is 
new in the world is the history we have forgotten or never 
learned.
    In closing, I want to invite my colleagues to take a little 
time to actually drill down on what I believe are the facts 
with regards to the Clean Air Act. I believe that once they see 
the facts, they will come to realize that moving our country 
forward cannot mean going backward, certainly not on clean air.
    That having been said, I want to recognize Senator Sanders, 
and then we will move to our Republican colleagues.
    Good morning, Senator Sanders.
    [The prepared statement of Senator Carper follows:]
       Statement of Hon. Thomas R. Carper, U.S. Senator from the 
                           State of Delaware
    Government has many roles to play. Among them, few are as important 
as creating a nurturing environment for job creation and job 
preservation. It is not government's job to be a lap dog for business; 
however, at the end of the day, if businesses large and small are 
making money, playing by the rules, being good corporate citizens, 
paying taxes and hiring people, the rest for somebody in my business is 
pretty easy.
    For the last forty years, the EPA has tried to do its part to 
enable the Federal Government to play that critical role. The EPA has 
sought to foster economic growth while ensuring that Americans are 
protected from life threatening pollution, including air pollution.
    In 1970, President Nixon signed into law the Clean Air Act. This 
Act established a framework to curb our air pollution. This law was so 
successful that over 200,000 lives were saved from 1970-1990. In 1990, 
President George H.W. Bush built upon President Nixon's success with 
the Clean Air Act Amendments of 1990. That Act gave us the clean air 
laws we have today.
    Lately, some have sought to make the claim that the Clean Air Act 
has raised costs for consumers and hurt our economy. But on closer 
analysis, the facts tell a different story.
    For example, since 1990, electricity rates--adjusted for 
inflation--have stayed constant in the United States, while our real 
gross domestic product has grown by 60 percent. At the same time, we 
have saved thousands of lives and ensured that our children--along with 
their parents and grandparents--can breathe cleaner, healthier air.
    For 2010 alone, cleaning up soot and smog saved over 160,000 
American lives. That's over twice the number of people who live in my 
hometown of Wilmington, DE. At the same time, our country saved $1.3 
trillion in health care costs--from lives saved, less kids getting sick 
with asthma and less sick days.
    Put another way, the Clean Air Act benefits outweigh the costs by a 
margin of 30 to 1. Talk about a return on investment. It just doesn't 
get much better than that. These clean air regulations help us save 
billions of dollars on public health costs while providing a multitude 
of opportunities for good-paying American jobs.
    According to recent reports, clean air regulations that will be 
promulgated later this year are expected to create as many as 1.5 
million jobs over the next 5 years, jobs that come at a crucial time as 
our economy continues to recover and begins to grow. These are American 
jobs in engineering and design, as well as in manufacturing, installing 
and operating pollution control and clean energy technology that's made 
in America and sold all over the world.
    In closing, I'd like to leave you with a quote from President Harry 
Truman, who once said, ``The only thing new in this world is the 
history that you don't know.'' Let me invite my colleagues to take a 
little time and actually drill down on what I believe are the facts 
with regards to the Clean Air Act. I believe that once they see the 
facts, they will come to realize that moving our country forward cannot 
mean going backwards on clean air rules.

STATEMENT OF HON. BERNARD SANDERS, U.S. SENATOR FROM THE STATE 
                           OF VERMONT

    Senator Sanders. Thank you very much, Mr. Chairman, and 
thank you to all our panelists for being here today.
    Much of what Senator Carper just said I certainly agree 
with. This issue that we are dealing with today is important 
for several reasons. No. 1, I think it is important to rebut 
the argument that protecting the lives of the people of our 
country and the children through clean air somehow is 
detrimental to our economy. Second of all, the point must be 
made that as we move toward clean air, and do our best to make 
our air as clean as possible, our water as clean as possible, I 
believe that, in fact, we end of creating a substantial number 
of jobs.
    Unfortunately, my Republican colleagues, or at least many 
of them, do not agree with that approach and are bringing forth 
legislation which I think is very, very unfortunate and would 
do very serious harm to our country.
    As I think many people know, the Environmental Protection 
Agency just this past week has announced a new standard to 
clamp down on mercury and arsenic and other hazardous pollution 
from powerplants. This standard will save, we believe, some 
17,000 lives every year. One of the points to be made, and 
Senator Carper touched on this, everybody knows that there has 
been a very vigorous debate about healthcare in the United 
States of America.
    We are concerned about the issues of obesity, we are 
concerned about drug addiction, we are concerned about tobacco. 
If you are concerned about keeping people healthy, out of the 
hospital, premature deaths, you are also concerned about the 
quality of air that our children are breathing and all of us 
are breathing, as well as the water we are drinking. It is a 
health-related issue.
    As I mentioned, the EPA has announced a new standard to 
clamp down on mercury and arsenic. This standard will save some 
17,000 lives every year, as well as thousands of heart attacks, 
hospital visits, asthma attacks and cases of bronchitis.
    At the same time, the Political Economy Research Institute 
at the University of Massachusetts has found this standard, 
coupled with another standard meant to reduce pollution that 
travels from powerplants to downwind States, and I have to tell 
you, I take this personally in my State of Vermont. I visit 
schools very often. When you go into a school, you go in and 
see the school nurse and you say, how are the kids doing? Then 
she talks about the amount of asthma that exists in my State 
and our kids are breathing air that comes from the Midwest, not 
from the State of Vermont. We take that kind of personally.
    In any case, the University of Massachusetts has found that 
the new standard, coupled with another standard meant to reduce 
pollution that travels from powerplants to downward States, 
including those in the Northeast, will create nearly a million 
and a half jobs over 5 years. Meanwhile, a study by Navigant 
Consulting Company in 2005, 2012, found air pollution will 
eliminate 360,000 jobs in downwind States.
    This is what the big polluters do not want the American 
public to know. They have claimed for decades that the Clean 
Air Act kills jobs and destroys the economy. But the truth is 
that pollution is what kills people and kills jobs.
    As Political reported in an article entitled Does Industry 
Cry Wolf on Regs, industry lobbyists predicted, quote, a quiet 
death for businesses across this country if Congress passed the 
Clean Air Amendments to reduce acid rain pollution in 1990. 
They were proven wrong, as a chart that we have shows, our 
economy grew by 210 percent since the Clean Air Act was passed 
in 1970. We created nearly 60 million jobs and at the same 
reduced air pollution 63 percent.
    Let me just conclude. We are engaged here in a mammoth 
struggle, and that is whether we continue the progress, not 
enough, but what progress we have made in cleaning up our air 
and trying to make sure that our children do not come down with 
diseases which are absolutely preventable, at the same time, as 
Senator Carper just indicated, we have the opportunity to 
create a number of pollution control devices which can create 
good paying jobs as we keep our air clean.
    So, with that, Mr. Chairman, I thank you very much.
    Senator Carper. All right, who is the Ranking Member here? 
Senator, do you want to go first? Who would like to go first?
    Senator Boozman. What I would like to do is ask unanimous 
consent, in the interest of time, to put a statement on the 
record and then yield to my Ranking Member, Senator Inhofe.
    Senator Carper. OK. Thank you. Is there any objection? I 
did not hear any. All right, thanks.
    Senator.

STATEMENT OF HON. JAMES INHOFE, U.S. SENATOR FROM THE STATE OF 
                            OKLAHOMA

    Senator Inhofe. OK. Mr. Chairman, and I think that Senator 
Boozman and I both have the same problems in two other 
committees, so I will have to make a statement and have to be 
leaving.
    But I do want to thank these great witnesses for showing 
up. You have a good group here and I appreciate the fact that 
you have held this.
    I think we all embrace the significant air improvements 
that we have had from the Clean Air Act. Yesterday, on the 
floor of the Senate, I went back and kind of relived the 
history of this. There is, somehow, when people think that 
perhaps you are against some of the overregulation that is out 
there that you are against the benefits of the Clean Air Act, 
when in fact it has been a huge success. So, that is something 
that I think is very good.
    I think that some of my colleagues and the Obama EPA 
believe that more regulations, even if draconian, necessarily 
mean more benefits and more jobs. I think, as David Montgomery 
of CRA International has shown from his written statement that 
it is just simply wrong. You do not have to take his word for 
it or my word for it.
    But the testimony of Mayor Homrighausen, did I say that 
right? That is a tough one. Homrighausen. Well, all right. I 
want you to know that I used to have a hard job, too. I was the 
Mayor of a major city and, you know, if you are Mayor, there is 
no hiding place like there is up here. So if they do not like 
the trash system, it ends up in your front yard. Right? Well it 
did in mine.
    So, anyway, I would say this. When I was Mayor of Tulsa, 
the major problem that I had was not prostitution, it was not 
crime, it was unfunded mandates. That is what we are looking at 
right now. As someone who has been considered many times in the 
ranking system as the most conservative member of the U.S. 
Senate, I have always said that in some areas I am a pretty big 
spender, national defense, infrastructure, something that we 
should be doing in our Committee, and I know that Senator 
Carper agrees with that, and unfunded mandates because these 
things are very, very expensive.
    So, we invited the Mayor today because, as he writes his 
testimony, he is from coal country, straight from the heart of 
the industrial Midwest. There are 950 commercial, industrial 
and institutional businesses in Dover. So, the Mayor knows 
first hand that ill-conceived regulations can put jobs at risk. 
In other words, there is a cost to what EPA is doing and it is 
to be borne in East Central Ohio and in communities just like 
it across the Nation.
    I would say this, that, hopefully, help is on its way, 
Mayor, because we introduced yesterday the cumulative, the bill 
to have one place where you do a cumulative effect on the costs 
of these things, not just on business and industry but on our 
communities around the country.
    All too often we have tried several times through the EPA 
to get the cumulative effect of all of these different things 
whether it is the various MACT bills or such things as ozone 
and others, what the cost actually is, not of each one 
individually but the cumulative costs of all of them. That is 
what we want to find out. I think we need to know what those 
costs are. That was introduced by Senator Johanns and myself 
yesterday. It is called the Comprehensive Assessment 
Regulations in Economy or CARE Act.
    Now, I do not know where you are right now, whether you in 
your State, in your community, are out of attainment now in 
terms of ozone, perhaps you will cover that in your opening 
statement, and what would happen if you were to find yourself 
out of attainment. So, all of these things are very significant 
that we need to address.
    We also, I have to mention the Inhofe-Upton Bill, which is 
referred to in the House as the Upton-Inhofe Bill, and it is 
pending right now, it is a regular order on the Floor, and it 
is one that, hopefully, gets a vote on, but it is one that 
would keep more burdensome regulations from our cities and 
towns and our States by returning the regulation of 
CO2 to the Congress where we believe, and most 
Democrats would agree with me on this, it belongs, so that we 
can relive the EPA from that burden.
    So, hopefully we will have a chance to get a vote on that 
sometime, hopefully today, and if not, as soon as we get back.
    I thank you, Mr. Chairman.
    [The prepared statement of Senator Inhofe follows:]
        Statement of Hon. James M. Inhofe, U.S. Senator from the
                           State of Oklahoma
    I want to thank all of the witnesses for attending today, and thank 
you, Sen. Carper and Sen. Sanders, for holding this hearing.
    I think we all embrace the significant air quality improvements 
achieved by businesses and other regulated sources under the Clean Air 
Act since 1970. I think we also agree that we want clean air progress 
to continue. Now here's where we disagree: on the extent, on the pace, 
and on the tools we use to achieve future success in reducing real 
pollution.
    My colleagues and the Obama EPA believe that more regulation, even 
if draconian, necessarily means more benefits and more jobs. As David 
Montgomery of CRA International will show, this is simply wrong. But 
you don't have to take my word for it, or even David's: just listen to 
the testimony of Mayor Homrighausen from the city of Dover, Ohio.
    You see, we invited the mayor today because, as he writes in his 
testimony, he's ``from coal country,'' straight from ``the heart of the 
industrial Midwest.'' There are 950 commercial, industrial, and 
institutional businesses in Dover. So the mayor knows first-hand that 
ill-conceived regulations can put jobs at risk. In other words, there 
is a cost to what EPA is doing--and it will be borne in east-central 
Ohio and in communities just like it across the heartland.
    I should note that the mayor is also the director of the city's 
municipal electric system, Dover Light and Power. From what I've read, 
Dover Light and Power is under siege as it faces an overlapping mess of 
unrealistic EPA mandates. If they are not tempered by reality, Dover 
will have fewer jobs, fewer businesses, and higher electric rates.
    Now, the mayor is very proud of Dover's environmental record, and 
he wants to make greater progress in reducing pollution. But his point 
is well-taken: EPA is doing too much, too fast. One point on which I'm 
sure he'd agree is that EPA has no idea of the cumulative economic 
impact of its regulations covering industrial boilers, coal-fired 
powerplants, coal ash disposal sites, and manufacturing facilities; it 
has no idea of their impact on Dover's jobs, Dover's local revenues, 
and Dover's factories.
    Well, Mr. Mayor, help is on the way. Yesterday, Sen. Johanns (R-
Neb.) and I introduced the Comprehensive Assessment of Regulations on 
the Economy, or CARE Act. The bill puts the Department of Commerce in 
charge of a Federal panel, comprised of several departments and 
agencies, which would conduct a cumulative economic analysis of all the 
rules you're concerned about. The panel must look at impacts on jobs, 
agriculture, manufacturing, coal, electricity, and gasoline prices--all 
of the things that you and mayors like you care about.
    Help also comes in the form of the Energy Tax Prevention Act, also 
known as ``Upton-Inhofe.'' It would stop EPA from regulating greenhouse 
gases under the Clean Air Act. Both this bill and the CARE Act will 
help put a stop to the Obama administration's harmful cap-and-trade 
agenda directed squarely at Dover, Ohio and the heartland of America.

    Senator Carper. Senator Inhofe, thank you so much.
    Senator Cardin, Senator Ben Cardin of Maryland.

  STATEMENT OF HON. BENJAMIN L. CARDIN, U.S. SENATOR FROM THE 
                       STATE OF MARYLAND

    Senator Cardin. First, let me thank our Chairman, Senator 
Carper, for his real leadership on the area of air quality. We 
thank you. The legislation that you filed, I think, is an 
extremely important bill and we do look forward to coming 
together in response to Senator Inhofe.
    I am glad to hear that we all support the Clean Air Act and 
Clean Water Act. I would hope that the common level we would 
all agree on is good science. Not what one side or the other 
says of science, but what good science takes us to. If we do 
that, then I think we can find a common ground here to make 
sure that the public health is protected and that our 
environment is preserved for our future generations. That is 
what I think we all really need to try to come together on.
    I find some of the amendments that are on the floor and 
some of the bills to be threatening. Everyone is entitled to 
their own opinions, but we do need to have a common set of 
facts and I think good science helps us get to that point.
    I really took this time to thank the panelists for being 
here, and particularly Paul Allen, who I know very well from 
Constellation Energy. Paul, welcome to our Committee. 
Constellation Energy is one of Maryland's leading, it is 
Maryland's leading energy provider, and Paul Allen has been a 
very active Maryland person in this regard. Constellation 
Energy is engaged in a variety of environmental stewardships 
and clean energy initiatives and as Constellation's Senior Vice 
President for Government Affairs and Chief Environmental 
Officer, Paul Allen is in the center of these important 
programs.
    In looking at your resume, I now know why you have been so 
passionate in this. Mr. Allen started his career working for 
Senator Dodd. So, that was a good way to get started in 
understanding good policy.
    Mr. Chairman, let me just point out that Maryland's 
experience as a downwind State motivated the Maryland 
Legislature and Governor O'Malley to take firm, decisive 
actions to reduce mercury, SOx and OX emissions in our State by 
implementing the toughest powerplant emissions laws on the East 
Coast, the Healthy Air Act enacted in July 2007. It established 
the ambitious timetable of 3 years for Maryland's powerplants 
to meet a new set of robust clean air standards.
    I must tell you, they are doing that. We are on target of 
meeting those standards. It has been the work of Constellation 
Energy and other major providers in our State that we have been 
able to do things that have achieved these reductions, which is 
going to be good for the health of Maryland and good for the 
health of people who live downwind from Maryland. It is not 
just our State.
    In the process, it has created a lot of jobs in our State. 
A lot of jobs have been created as a result of the 
implementation of these policies. Constellation Energy, at the 
Brandon Shores coal-fired plant, the project invested $1 
billion and nearly 4 million man hours of labor from the 
Baltimore building and construction trade unions. This included 
26 months of work of 2,000 skilled construction workers.
    I point this out because I do think this is a win-win 
situation. We are creating jobs and providing cleaner air for 
the people of our State and leaving a cleaner environment for 
future generations.
    I do not think we can turn the clock back. I really do 
think we need to move forward aggressively in this area. The 
State of Maryland is showing that we as a country can do a lot 
more. I know that Senator Carper and his work in Delaware has 
also shown similar actions, Senator Sanders of Vermont and all 
of my colleagues.
    So I think the States are showing us that we can do a 
better job nationally with the Clean Air Act and we can provide 
cleaner air for the people of our community and I look forward 
to hearing from the witnesses.
    But I, like Senator Inhofe, need to apologize. I have an 
amendment that I am going to be offering on the Small Business 
Bill before the Senate, so I am going to have to excuse myself.
    Senator Carper. We are glad you are here. Thanks very, very 
much for your comments and your leadership.
    Senator Alexander, Lamar Alexander. Good morning, Lamar. 
Happy St. Patrick's Day.

STATEMENT OF HON. LAMAR ALEXANDER, U.S. SENATOR FROM THE STATE 
                          OF TENNESSEE

    Senator Alexander. Thanks, Mr. Chairman. I forgot my green 
tie this morning.
    Welcome to you all. Thank you for coming.
    This is an important topic upon which a lot of us have been 
working for some time. Senator Carper and I, and I commend him 
for his leadership, have introduced over the last 6 years clean 
air legislation that last year, I believe, had 15 co-sponsors, 
an equal number of Republicans and Democrats and one 
Independent. The fundamental was, while we were arguing over 
what to do about carbon, let us go ahead and deal with SOx, NOx 
and mercury. That was the thesis we had because we have 
differences of opinion on carbon, on how to do it, and what to 
do, etcetera. It is a new big subject for most Members of 
Congress and, for the country, even relatively new. But SOx, 
NOx and mercury are not new and we understand the dangers in 
all three and the bill that we had introduced requires a 90 
percent reduction in mercury, which I believe science shows can 
be done at a reasonable cost.
    So, I look forward to working with Senator Carper on clean 
air legislation and hope that in this Congress that it will be 
enacted.
    Now, on the subject of costs, some say we deliberately need 
a high cost energy strategy. There is much talk about putting a 
price on forms of energy to discourage it. I am opposed to 
that. I think we need a low cost clean energy strategy. There 
are ways to do that. As Senator Carper said, what we have seen 
with the regulation of sulfur and nitrogen pollutants from coal 
plants since 1990, that has not added significantly at all to 
the costs of electric bill, or at least electricity has stayed 
stable in its costs.
    So, once we figure out ways to get rid of pollutants that 
damage our health, and we are sensible about it and use common 
sense, we can use those new inventions and technologies to 
improve the cleanliness of our air without adding significantly 
to our costs.
    Of course, we could just say ah-hah, we have a new 
invention here, let us impose it by next week and we could run 
the costs way up and there would be great damage to that. The 
damage would be that it would make it harder and more expensive 
to create jobs.
    I am aware that in new inventions there is always some new 
jobs. We have some of that in Tennessee. I am glad to see the 
presence of Mr. Yann who is here from Knoxville. Alston has a 
presence in Chattanooga and Knoxville. They make pollution 
control equipment which is being used by TVA and others and 
they manufacture gas and steam turbines for nuclear power, 
which is 70 percent of our clean electricity today in the 
United States. So, I welcome them.
    But what we want to do is make sure that we make it 
possible for them to come to Tennessee because in my 
experiences as Governor, recruiting industry, one of the most 
important aspects is lots of cheap, reliable, clean 
electricity. For example, the ALCOA plant, smelting plant that 
my father worked at in my home county is closed now because of 
a dispute between ALCOA and TVA over electricity costs.
    The auto plants which have come to Tennessee and now are 35 
percent of all of our manufacturing, look every day at costs. 
If costs go up too much, they go to Mexico or they go overseas. 
Electricity and power is one of their costs.
    Even the polysilicon plants which have come to make the 
materials for solar, big expensive plants that hire a few 
hundred people, each of them, we have two in Tennessee, use 125 
megawatts of power. That is not going to come from solar 
panels. That is not going to come from windmills. That is going 
to come from nuclear power, coal power or natural gas. Those 
are the only forms of electricity that we have right now that 
can produce large amounts of reliable, clean energy at a cheap 
cost.
    So, it is very important that we go ahead and find ways to 
reduce the air pollution that we have. So I look forward to 
working on clean air in this Congress with Senator Carper and 
others. I want to emphasize that I would like to do it at a 
reasonable cost. I look forward to reviewing the EPA's new 
mercury regulation to see whether it meets that standard and I 
thank the Co-Chairmen for their leadership in having this 
hearing.
    Senator Carper. We thank you for being a part of it. 
Senator Alexander and I have been wingmen on the issue of 
cleaner air, particularly when it comes to SOx, NOx and mercury 
for, as he says, a number of years.
    I come from a State, as does Senator Sanders, where 
sometimes we feel we live at the end of America's tailpipe. We 
have a bunch of States to the west of us who generate 
electricity by burning, in many cases, coal, nothing against 
coal, we need coal, we need really clean coal actually, but put 
bad stuff up in the air and it just blows our way and we end up 
breathing it.
    It is especially frustrating, Lamar mentioned the time he 
served as Governor and I was a little bit after him, but it is 
very frustrating when we are trying to meet our clean air 
requirements to stay in compliance with the guidance of the 
regs and so forth, and for us, I could literally have shut down 
Delaware to try to meet, to be in attainment on some of this 
stuff, and we still would have been out of attainment because 
the folks out to the west of us were putting dirty stuff in the 
air and it came our way. It is just not fair. We had to compete 
with these folks in terms of electricity costs. They are making 
cheap electricity, a lot of times created by coal, and we, it 
is just not fair.
    I am a big believer in the Golden Rule, treat other people 
the way we want to be treated. But what we want to do is make 
sure that happens in this instance.
    All right. Long introductions now for our panel members.
    Paul Allen, you were sort of introduced in a left-handed 
way by Ben Cardin. Are you the same Paul Allen who founded 
Microsoft? Is that you?
    Mr. Allen. [Remarks off microphone.]
    Senator Carper. Maybe you had the mail or again you will 
get the wrong dinner check to go to the wrong Paul Allen or, in 
your case, the right one. Just wanted to check.
    All right. Barbara Somson. Is it Somson? Yes, Barbara 
Somson, Legislative Director of the United Auto Workers. 
Welcome. We used to have a lot of auto workers in Delaware. UAW 
represented Local 1183 at Chrysler and 435 at GM. The GM plant 
is coming back to life and we are going to be starting, late 
next year, to build a bunch of cars by Fisker, beautiful, 
beautiful luxury cars that get 80 miles per gallon. I suspect 
they are going to be built by some of your folks. That is good. 
We are looking forward to that.
    All right. Now, we have here a guy from Dover. Dover, of 
course, is our capital.
    [Laughter.]
    Senator Carper. I used to spend a lot of time in the 
capital of Ohio, Columbus. I was a Buckeye, Ohio State. I have 
actually driven through your city a time or two. So, we are 
glad the other Dover, the Mayor of the other Dover, is here. My 
understanding is that you pronounce your name Homrighausen?
    Mr. Homrighausen. Homrighausen.
    Senator Carper. Hausen, hausen. Has anybody ever 
mispronounced your name?
    Mr. Homrighausen. No.
    [Laughter.]
    Senator Carper. OK. Just checking. Mayor of Dover, welcome.
    Again, Ben has already given Mr. Allen a pretty good 
introduction. We are happy that you are here, Mr. Allen.
    Next we have Mr. David Montgomery, Vice President of 
Charles River Associates. There is a Charles River that runs 
right through Boston, made famous in song. My son, Christopher, 
just graduated from school up there, used to run right along 
that river. We did it many times together. It is nice to have 
you here.
    Finally, James A. Yann. Yann, right? Vice President, no, 
Managing Director of Alstom Power. We are happy to see you and 
welcome one and all.
    Your entire statements will be made part of the record and 
if you would like to summarize, you may feel free to do that. 
But, actually, try to stick to about 5 minutes. If you run a 
little bit over, that is OK. But if you run a lot over, that is 
not OK. I will reign you back in.
    Ms. Somson, why do you not lead these guys off, OK?
    Thanks, and we are glad you are all here.

      STATEMENT OF BARBARA SOMSON, LEGISLATIVE DIRECTOR, 
      INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE & 
        AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW)

    Ms. Somson. Thank you very much, Senator Carper, and thank 
you to Senator Sanders, also, for inviting the UAW to share our 
views on the jobs impact of the Clean Air Act.
    I speak from our experience representing workers in both 
the auto and heavy truck industries. What our experience shows 
is that EPA's regulation of greenhouse gas emissions from 
vehicles under the Clean Air Act is good for our industries and 
good for America jobs.
    We view the regulation of mobile sources as a win-win that 
produces oil independence for our Nation, a cleaner, healthier 
environment for ourselves and our children, and an increased 
number of jobs in the auto sector. The simple equation for how 
this job creation works is that new technology required to meet 
the tailpipe emission standards represents additional net 
content on each vehicle, and bringing that additional content 
to market requires more engineers, more managers, more 
construction and production workers.
    The UAW's membership is concentrated in the vehicle and 
vehicle component sector. The recent crisis in this sector has 
had a devastating impact on jobs. Six hundred and thirty-five 
thousand U.S. auto jobs have been lost since the year 2000, 
despite a rebound of 72,000 jobs since mid-2009.
    To reverse this trend and to assure that cars of the future 
are made in the USA, the UAW and allies in the environmental 
and business communities began building support for Federal 
policies to increase fuel efficiency and reduce greenhouse gas 
emissions from the light-duty vehicle sector, and at the same 
time promote U.S. auto employment. Our work helped enact 
legislation that supports the domestic manufacturing of 
advanced technology vehicles and their key components.
    Provisions in the Energy Independence and Security Act and 
the American Recovery and Reinvestment Act have encouraged and 
leveraged billions of private dollars into the domestic auto 
industry and have helped create tens of thousands of auto 
industry jobs here in the United States.
    For example, nearly 40,000 jobs are, or will be, supported 
by the five loans made to date under section 136 of EISA. 
Included are jobs at Ford and Nissan facilities, and at the new 
innovative startup that Senator Carper referred to, Fisker in 
Delaware, and also Tesla in California. More section 136 loans 
are expected this year, adding to the number of auto jobs.
    The Recovery Act supported the establishment of 30 new 
electric vehicle battery and component manufacturing plants in 
the United States. The construction of these facilities has 
already put many construction workers back on the job and many 
thousands of permanent production jobs will be created when all 
of these plants reach full capacity.
    The success of these job creation policies is depending in 
large measure on the regulation of tailpipe emissions under the 
Clean Air Act which provides regulatory and market certainty 
for manufacturers of advanced technology vehicles.
    Absent continued Federal regulation by EPA and NHTSA, the 
UAW is concerned that we might repeat the troubled history that 
preceded the Obama administration's one National Program in 
2009. Without such Federal regulations, we could experience 
another period of lawsuits, political warfare and public 
campaigns that would distract the industry's attention and 
divert it from the clear and certain path it is on now.
    The UAW and the automakers strongly supported the National 
Program that runs from 2012 to 2016, and we are currently all 
working with EPA and NHTSA on the 2017-2025 standards. The UAW 
does not wish to see this work disrupted.
    In conclusion, the 1 million active and retired members of 
the UAW are also citizens who are affected by the environment 
in which we live and raise our families. We are concerned about 
the effects of human-induced climate change for ourselves and 
future generations.
    The benefits to human health and welfare flowing from the 
regulation of greenhouse gases under the Clean Air Act are 
substantial and they have positive economic effects. The UAW 
believes strongly that the regulation of tailpipe emissions 
under the Clean Air Act will help bring about these benefits 
while also creating jobs and helping to ensure a smooth and 
stable recovery for the auto industry.
    I thank you for considering our views.
    Senator Carper, I ask permission to substitute a corrected 
version of our written testimony, which we submitted by email, 
to the record.
    Senator Carper. Without objection.
    Ms. Somson. Thank you.
    [The prepared statement of Ms. Somson follows:]


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    Senator Carper. Thank you very much for your presence and 
for your testimony.
    Mayor, one question I have for you, Mayor Homrighausen, are 
you Irish?
    [Laughter.]
    Mr. Homrighausen. No, I am not.
    Senator Carper. Just checking. All right. But you are 
recognized and we welcome your testimony.

 STATEMENT OF RICHARD P. HOMRIGHAUSEN, MAYOR, CITY OF DOVER, OH

    Mr. Homrighausen. Senator Carper.
    Senator Carper. Wilkommen.
    Mr. Homrighausen. Good morning. My name is Richard P. 
Homrighausen and I am the Mayor of the city of Dover, OH, the 
inland Dover. Dover is located in the heart of the industrial 
Midwest and I believe our experiences are shared by a great 
number of small to mid-sized municipalities across the region.
    In addition to providing traditional city services, Dover 
owns and operates its own municipal electric system. We are a 
city with a population of just under 13,000, but have over 950 
businesses ranging from mom and pop stores to Fortune 500 
companies. A key factor in attracting and retaining these 
businesses is our local utility and the generation within our 
City limits. During the 2003 Midwest blackout, the lights 
stayed on in Dover.
    Providing reliable and affordable electricity is an 
important mission for the city of Dover. But it has come with 
its challenges. Lately, most of these challenges are from new 
and proposed Clean Air Act regulations. The city of Dover gets 
its electric supply from units directly owned by the City, some 
jointly owned units, as well as electricity purchased through 
our membership in American Municipal Power, or AMP, which has 
helped diversify our power supply portfolio.
    Even with the planned diversification of our electric 
energy, Dover remains highly dependent on Midwest, coal-fired 
generation and the cornerstone of the City's electric system is 
the City-owned 16 megawatt coal-fired base load powerplant. 
Dover's other local generation resources include both natural 
gas and diesel generators. Together with our coal plant, our 
on-site capacity means we can meet approximately 37 percent of 
our electricity locally.
    Unlike large investor-owned utility companies, Dover does 
not own a fleet of large powerplants that we can selectively 
control or shut down in response to new emissions control 
requirements. We have limited response options to such 
regulations. Put simply, the cumulative impact of EPA's 
rulemakings could put us in the position of deciding to either 
spend millions of additional dollars on plant upgrades or shut 
down our local generation. Neither option is acceptable to us. 
But to protect our community, the latter decision is one we 
especially hope to avoid.
    Despite Dover's ongoing investments in our local 
generation, we are struggling to keep up with the rapid pace of 
new EPA rules. Each has a significant impact on us, and the 
cumulative effect is potentially devastating. Compliance with 
three final or pending EPA rules alone is expected to cost the 
city of Dover millions of dollars.
    I commend Senator Inhofe for introducing the CARE Act to 
require a review of the total costs of major EPA regulations. 
Jobs are at risk. The loss of additional high-paying 
manufacturing jobs in local communities already suffering under 
the current economic downturn would be devastating.
    The unemployment rate in Tuscarawas County for January 2011 
was 10.7 percent, up from 9.8 percent the month before and well 
above the national average. While Tuscarawas County is 
currently in attainment for all criteria pollutants, some 
neighboring counties are not as lucky. It could be only a 
matter of time, or wind currents, before our home county could 
also be subject to the economic development limitations that 
come with non-attainment status. Such non-attainment 
limitations would have major impacts, especially on our 
chemical and plastic industries which employ hundreds of 
workers.
    We are particularly concerned about the unknown costs 
associated with compliance with yet-to-be-determined 
regulations to control greenhouse gases. While EPA has touted 
the benefits of carbon capture and storage for coal-fire 
generation, this technology is not commercially available and 
would certainly be uneconomical on a plant our size.
    Increased energy efficiency is one way to reduce emissions. 
However, in order to make energy efficiency a viable option, 
EPA needs to address the current New Source Review Rules that 
prevent electric utilities from modifying the existing plants 
to improve efficiency.
    Given huge uncertainties and potential costs associated 
with greenhouse gas regulation, I applaud Senator Inhofe for 
introducing the Energy Tax Prevention Act of 2011 to preclude 
EPA from using the Clean Air Act to regulate greenhouse gases. 
Instead, any climate change policy should be developed by 
Congress and must balance environmental goals with impacts on 
consumers and the economy.
    While some see natural gas as the fuel that will be used to 
replace lost coal capacity, it certainly cannot provide full 
replacement in the near term. In the long term, increased 
demand will lead to increased prices. Our use of regional coal 
for electricity generation has enabled us to effectively 
contribute to the national economy and create and maintain 
jobs. When 50 percent of our Nation is powered by coal, it 
would be foolish to shut coal out as a resource option.
    All of us share a concern about the environment. As a local 
official, I want to make sure that the Dover of tomorrow is 
even better than the Dover of today. The Clean Air Act has 
resulted in huge improvements in air quality that have 
benefited all of us.
    But environmental regulations must be tempered by economic 
realities. Unfortunately, EPA's recently issued proposed rules 
are creating a regulatory train wreck for electric utilities 
that use coal.
    Thank you for the opportunity to testify and I am happy to 
answer any questions you may have.
    [The prepared statement of Mr. Homrighausen follows:]


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    Senator Carper. Thanks so much.
    Mr. Allen, you may proceed.

STATEMENT OF PAUL J. ALLEN, SENIOR VICE PRESIDENT OF CORPORATE 
   AFFAIRS AND CHIEF ENVIRONMENTAL OFFICER FOR CONSTELLATION 
                             ENERGY

    Mr. Allen. Thank you very much.
    Let me begin by saying that Constellation Energy operates a 
highly-diversified portfolio of electric generating facilities, 
about 12,000 megawatts of installed capacity. In addition to 
five nuclear units, our other generating assets include coal-
fired capacity, natural gas plants, wind, solar, biomass and 
hydroelectric generation. All of our generating assets are 
merchant plants. We believe strongly in competitive markets 
where we need to be a low-cost provider in order to prosper.
    Because of our broad involvement in so many aspects of the 
energy equation, we recognize that the central challenge for 
our industry is balance in the three imperatives of energy, 
affordability, reliability and sustainability. We believe that 
in solving this equation, clean air safeguards can and must be 
compatible with the first two imperatives.
    We know that meeting this challenge requires clear, 
commercially-feasible rules for environmental performance and 
significant capital investment. Of course, many jobs are 
entailed in implementing those investments. To illustrate, I 
will briefly describe our experience at Brandon Shores, a 
powerplant in Maryland where we have constructed a state-of-
the-art air quality control system.
    Brandon Shores is a very large powerplant, two 640 megawatt 
coal-fired units, has a highly efficient turbine closed cycle 
cooling towers, electrostatic precipitators that remove over 99 
percent of particulates contained in the flue gas, selective 
catalytic reduction and other equipment for nitrogen oxide 
reduction, achieving a 90 percent reduction in NOx. We 
beneficially re-use 85 percent of the coal combustion fly ash 
by making it into concrete.
    In short, Brandon Shores was a highly efficient, well 
functioning, environmentally sound electric generation source 
before the State of Maryland, under Governor Bob Ehrlich, 
passed its Healthy Air Act in 2006 which was finalized by the 
O'Malley Administration, as you heard Senator Cardin say, in 
July 2007.
    Working with the Maryland Department of the Environment, 
Brandon Shores now meets all of the requirements of that law, 
which are perhaps the most stringent and most plant-specific 
requirements in the country. The Healthy Air Act aimed to make 
deep reductions in nitrogen oxide and sulfur dioxide emissions 
and aimed to reduce mercury emissions by 90 percent by 2013 
from a 2002 baseline.
    To accomplish these further reductions, Constellation 
constructed an additional, even more comprehensive air quality 
control system at Brandon Shores consisting mainly of a Flue 
Gas Desulfurization System, commonly called a wet scrubber, 
plus a Pulse Jet Fabric Filter, commonly called a bag house, 
with sorbent injection.
    The new scrubber installation and other environmental 
controls have the capability to remove at least 95 percent of 
existing sulfur dioxide, 90 percent of existing mercury, and 
the NOx controls are already in place and at the new targets of 
the Healthy Air Act.
    Construction of this scrubber entailed building a new, 
single 400-foot emissions stack with two flues, capping the two 
existing stacks so that all flue gas must exit through the 
scrubber. We constructed hydrated lime and powder activated 
carbon injection systems for sulfuric acid mist and mercury 
removal.
    One of the really unique features of our project is the use 
of brown water from a neighboring municipal waste treatment 
plant. Of course, many hundreds of feet of the air duct work 
was built and connected to massive fans, pumps and motors.
    Groundbreaking for the construction phase of the project 
began in June 2007. Construction was completed in September 
2009, about 26 months. The total cost was approximately $885 
million. We have spent more than $1 billion in air pollution 
control equipment for our portfolio of coal-fired powerplants 
in Maryland.
    At peak construction, 1,385 personnel were employed on the 
site. These were skilled craft and construction workers 
including boilermakers, steamfitters, pipe fitters, operating 
engineers, millwrights, iron workers, electricians and master 
electricians, as well as carpenters, teamsters and laborers. We 
worked closely with the building trades and other unions to 
accomplish this job in good time and with an outstanding safety 
performance and we met the regulatory timeline.
    Over the course of the 26-month construction phase, we used 
approximately 4.3 million man hours and that equates to about 
1,600 job years. These are the hours worked by the contract 
employees that built the project. It does not reflect the 
manufacturing jobs associated with the technologies and 
equipment that our team assembled.
    The manufacturers of the cranes and vehicles deployed on 
the site, the manufacturers of the many large and small 
components from booster fans, pumps and pump motors to ball 
mills, electronics, wiring, steel, concrete, and specialty tile 
for the flue gas stack certainly employed many thousands of 
individuals to make these goods and operate the companies that 
form the supply chain for this kind of infrastructure.
    Combined with the men and women of Constellation who 
operate our powerplants, the engineers and physicists and the 
BGE linemen and pipeline technicians, the customer care and 
service representatives and the internal teams who support 
these skilled individuals, we create the jobs that are the 
backbone of the grid. Indeed, these are the jobs and careers 
that help form the backbone of the American economy.
    It is this experience, and the empirical evidence of man 
hours hired and paid, emissions measured and lowered, megawatts 
successfully produced and marketed that give us the confidence 
that we, and our sister companies in the electric power 
industry, can continue to deliver affordable electricity with 
the great reliability that all consumers depend upon while also 
meeting the air quality requirements set forth in the Clean Air 
Act.
    I have run over a little. Thank you very much and I will be 
happy to answer questions.
    [The prepared statement of Mr. Allen follows:]


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    Senator Carper. Thank you very much for that testimony and 
I look forward to asking you some questions.
    Mr. Montgomery, you are No. 4, actually our clean-up 
hitter. Go ahead.

   STATEMENT OF W. DAVID MONTGOMERY, Ph.D., VICE PRESIDENT, 
                    CHARLES RIVER ASSOCIATES

    Mr. Montgomery. Thank you, Mr. Chairman and Senator 
Johanns.
    I would like to provide some perspectives on jobs by 
focusing on the macroeconomic impacts that were described in 
EPA's second prospective cost-benefit analysis that was just 
released a few days ago.
    To me, the most important point is that EPA's macroeconomic 
study directly contradicts claims that are being made about 
green jobs. The relevant scenario of the EPA study 
unambiguously finds that increased spending on pollution 
controls will have overall negative economic effects. If EPA 
had reported its model results for labor markets, I am 
confident that this scenario would also have revealed lower 
wages and lower total worker compensation.
    My first recommendation would be that Congress instruct the 
EPA to provide it with these model outputs to see what its 
analysis actually has to say about wages and jobs.
    The green jobs studies and the other witnesses today have 
described the jobs associated with making and using pollution 
controls. I have a quarrel with how they have described that.
    The EPA macroeconomic model asks the logical next question, 
the right question, which is what the workers filling these 
jobs would have been doing otherwise. EPA's analysis finds that 
they would have been producing, in productive jobs producing 
other goods and services so that, on balance, the Clean Air Act 
regulations, by directing them into producing pollution 
control, lowered GDP from what it would otherwise be and 
lowered real income for U.S. consumers.
    EPA then creates another case in which it actually adds 
more workers based on its, actually the other parts of an 
analysis of health effects, and destroys jobs in the healthcare 
industry and, in this scenario, it finds because of the 
increased labor force that there is an increase in GDP and an 
increase in employment, but it is not because of creating job 
opportunities, it is because of putting more healthy people in 
the economy who find jobs doing the normal productive kind of 
activity.
    The third point I would make is that it should be obvious 
that the EPA study provides no information about the likely 
costs of new regulations, be it mercury MACT or greenhouse 
gases. No matter what it says, no study of past regulations can 
logically be used to justify new ones.
    It has also been suggested that environmental regulations 
will enlarge the U.S. pollution control industry. There is 
nothing in the EPA study to support this. I suggest that if 
Congress wants an industrial policy, EPA is not the agency that 
is capable of creating it.
    EPA regulations create a demand for such equipment, but 
they make it less likely that it will be made in the United 
States. There is a global market for pollution controls. Lots 
of other countries are expecting exactly the same thing, that 
they will create pollution control industries that will be 
exporting their goods. Countries like China can offer the 
materials and equipment much more cheaply because they are free 
of the costs of U.S. regulation. EPA cannot prevent this with 
the kind of border measures that were included in last year's 
cap and trade legislation.
    Finally, I would suggest that the prospective study does 
not show that the Clean Air Act toolkit is the best way to 
approach greenhouse gases or any other emerging environmental 
issue. As far as greenhouse gases go, the virtually unanimous 
opinion of economists is that regulating greenhouse gases with 
Clean Air Act tools will not be cost effective, and I will 
return to that at the end.
    I have not found many areas in the macroeconomic analysis 
in EPA's report that cannot be traced back to its input 
assumptions about direct costs and benefits. I think the most 
important is that, for the past several years, EPA has 
consistently failed to provide a satisfactory account of how 
particulate matter and ozone are causally related to mortality. 
I think this puts in question its calculated mortality 
reductions that provide over 93 percent of its direct benefits 
in 2010. Without these assumptions about health benefits, the 
macroeconomic benefits, even in its cost in health case, go 
away.
    There are several other methodologies that I think need to 
be reviewed critically, including those that EPA used to 
estimate other benefits, other air quality benefits, a 
systematic bias downward in its cost calculations, and a flaw 
in the macroeconomic modeling, I think, makes it estimated 
unreasonable economic gain for the petroleum industry.
    I believe that if the cost-benefit analysis were redone to 
address these biases in the costs and benefits, it would 
probably come out showing that the costs and benefits are of 
about the same scale. This suggests that it is very important 
to break out, as EPA was instructed to do, the costs and 
benefits of the individual programs in order to see which are 
providing a positive cost-benefit effect and which a negative 
cost-benefit effect. That is really important for thinking 
about future regulations and where future regulation can 
provide economic benefits and where it is not likely.
    So, let me just end quickly, I know I am out of time, on 
greenhouse gases.
    I believe, and so do many other economists, that imposing, 
that using the Clean Air Act toolkit to regulate greenhouse 
gases would impose unnecessary costs and would have next to no 
health benefits for the United States.
    Before I am accused of ignoring the science, I believe it 
is mainstream science to admit that greenhouse gases are 
different from other criteria pollutants and the United States 
can have only a negligible impact on the global effects, and, 
therefore, can only have negligible health benefits for the 
United States.
    These are the kinds of problems that can only be fixed by 
Congress. Congress can get us off the road toward ineffective 
and thus unnecessary regulations by removing greenhouse gases 
from the Clean Air Act and adopting a uniform no exceptions 
carbon tax with 100 percent of the revenues returned to the 
people. I would encourage you to think about this because the 
optimal policy is really quite simple and abundantly clear.
    Thank you.
    [The prepared statement of Mr. Montgomery follows:]


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    Senator Carper. Mr. Montgomery, thank you for your 
testimony.
    Mr. Yann.

  STATEMENT OF JAMES A. YANN, MANAGING DIRECTOR, ALSTOM POWER

    Mr. Yann. Good morning. I would like to thank Chairman 
Carper and Chairman Sanders for this opportunity to address the 
potential for job creation under the current proposed 
regulatory regime set forth by the U.S. Environmental 
Protection Agency under the Clean Air Act.
    Alstom is a global leader in the power generation, rail 
transportation infrastructure and power transmission and 
distribution industries. Our company sets the bench mark for 
innovative and environmentally friendly technologies. Today, 
Alstom equipment can be found in more than 50 percent of U.S. 
powerplants, while globally it generates more than 25 percent 
of the world's electricity. Alstom is also the world's largest 
air pollution control company.
    Alstom employs more than 93,000 people in 70 countries and 
had sales of approximately $30 billion in 2009-2010. In the 
United States, Alstom employs about 6,000 full-time permanent 
employees in 47 States and the District of Columbia. This 
number can nearly double when accounting for workers hired for 
civic projects.
    Alstom continues to grow and invest in the United States. 
Last year, we inaugurated a $350 million steam facility in 
Chattanooga, TN, and this summer we are opening a new wind 
turbine manufacturing facility in Amarillo, TX.
    We are here today to specifically address the subject of 
potential job creation in the air pollution control industry, 
its supply chain under the current rules affecting the 
industry, most notably the Clean Air Transport Act and other 
rules referred to as HAPs MACTs.
    The actual amount of equipment to be installed is a complex 
question which depends on the timing of each of the rules, 
including possible greenhouse gas regulation, as well as fuel 
availability, pricing and many other factors. We leave it to 
others to explore and finalize the application of these 
factors.
    However, leveraging our knowledge of typical air pollution 
control projects applying a range of technologies and estimates 
provided by industry experts, we can offer insight into the 
typical employment requirements for a nominal 500 to 600 
megawatt unit.
    Let us start with wet flue gas desulfurization, or 
scrubbers as they are commonly called. A standard scrubber 
project will require in excess of 50,000 engineering, 
procurement, project management and support hours, which may 
increase as much as 50 percent including hours for the owner 
and the owner's engineer.
    The typical scrubber is field erected and requires more 
than 2,000 tons of fabricated steel delivered to the site. This 
steel represents more than 40,000 man hours of production. The 
largest single source of manpower is the actual erection of the 
scrubber, which requires a wide variety of trade crafts. This 
typically lasts over 30 months and employs some 700 craft 
people on average during that period.
    Scrubbers consist of a large number of components including 
pumps, demisters, spray nozzles, electrical equipment, wiring, 
controls, emission monitors, crushers/ball mills, conveyors, 
weighing devices and so on. It should be noted that almost all 
of this equipment can be procured from sources in the United 
States.
    In total, a wet flue gas desulfurization project will 
provide the equivalent of about 775 full-time jobs over the 
three plus years of the project, not including jobs involved in 
delivery of the materials and equipment to the site. Estimates 
such as those provided by ICF to the public of some 60 
gigawatts of new FGD projects required under its rules could 
translate into approximately 100 projects over a five to 6 year 
period, representing 77,000 direct job years.
    Based on studies by ICF and others, it is anticipated that 
the nitrogen oxide control market will be less than half the 
size of the sulfur oxide market. These projects, while less 
complex from a process point of view, can be more complex from 
an installation view. Following similar logic to that above, it 
is anticipated that work with nitrogen oxide control projects 
would result in about 35,000 to 40,000 job years over the same 
period.
    Since the HAPs MACT was released yesterday, we have not had 
time to adequately determine actual requirements. It is our 
general belief that some number of fabric filters will be 
required. Given the diverse offerings for collection of mercury 
and other metals, the number of fabric filters required may be 
in the range of 70 gigawatts. Applying the same job creation 
logic, this could spur the creation of approximately 50,000 job 
years over the same five to 6 year period.
    The last area which will create jobs is the supply of 
reagents to these systems. These include ammonia, lime, 
limestone and activated carbon, among others. It is estimated 
by the Institute of Clean Air Companies that this market will 
increase by about $400 million annually to support the 
operation of the equipment installed.
    In summary, it is expected that these regulations will 
create the opportunity to create more than 150,000 job years 
over a span of five to 6 years for implementation alone. This 
does not include jobs created by sub-suppliers of components, 
transportation, commodities, suppliers and the indirect 
multiplier that is normally associated with supporting direct 
jobs. Estimates of industry associations put the total market 
in the range of $4 billion annually until compliance.
    We would like to thank the two subcommittees for this 
opportunity to provide this information.
    [The prepared statement of Mr. Yann follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Senator Carper. Mr. Yann, thank you so much for wrapping us 
up here.
    Good testimony and enlightening testimony and, in some 
cases, the testimony, I almost wish we could let the witnesses 
ask questions of one another. We ought to find a way to do 
that.
    Let me just start off by saying that Delaware is, it does 
not include, in our State, we do not include the Chesapeake 
Bay. But tributaries from Delaware, including Nanticoke River, 
actually lead to the Delaware Bay, excuse me, to the Chesapeake 
Bay. As it turns out, there are tributaries from maybe half a 
dozen or so States that actually, whose waters end up in the 
Chesapeake Bay.
    The Chesapeake Bay has been struggling for a long time with 
sedimentation, all kinds of nutrients and so forth that have 
led to, that are killing parts of, vast parts of the Chesapeake 
Bay. There is just not much going on there in terms of life.
    The folks in the Chesapeake who make their living off of, 
as watermen, do not much like this. They have called on their 
elected officials to work on the rest of us to try to clean up 
our runoff so that they will have, actually, a Chesapeake Bay 
that will be alive and vibrant and provide livelihood for them.
    There are a couple of rivers that flow into my State from 
Pennsylvania. We use those rivers for, the water, when it gets 
to Delaware we use it for drinking water. We treat it, but use 
it for drinking water. There is a great concern about what the 
folks who live upstate from us in Pennsylvania are putting into 
what ultimately becomes our drinking water.
    In our Dover, DE, we end up breathing the air that brings 
with it pollution from Dover, OH. It brings pollution from 
Tennessee and Indiana, West Virginia, Virginia, and we end up 
having to breathe that stuff. We end up having to reduce our 
emissions in order to try to be in compliance with Federal 
environmental guidelines. We end up having to put extra 
pollution devices on our own utilities in order to reduce 
emissions. A lot of the stuff that we are breathing here comes 
from outside of our State.
    Jim Inhofe and I spend about a half an hour together every 
Thursday in the Capitol in a bible study group that is led by 
our Chaplain, Barry Black, who is a retired Navy Admiral, a 
good guy. He is always reminding us to one, try to ask, how 
does your faith guide you in what you do? The other thing, he 
is a big, as Jim knows, Chaplain Black is a big believer in the 
Golden Rule. Treat other people the way we want to be treated. 
He likes to say the Golden Rule is the CliffNotes of the New 
Testament.
    I just want to ask you, in thinking of those example, our 
waters contributing to the pollution problems that they have in 
the Chesapeake, upstream water pollution that comes down and we 
end up having it in our drinking water, and the air that we 
breathe in Dover that is polluted by places as far away as 
Dover, OH and further west than that.
    How does that, how is that consistent with the Golden Rule? 
Mayor?
    Mr. Homrighausen. Well, in Dover's example, we have always 
had a strong commitment to being good stewards of the 
environment. We were the first municipal electric system in the 
United States to install gas-fired co-burners to clean up our 
emissions on startup when we fire up the coal. We also have the 
ability to co-fire with gas. With the price of gas, we do not 
do that. We have switched to a different coal that allows us to 
burn cleaner.
    We have installed a $6.15 million bag house which I do not 
think we bought from Alstom. But our opacity is next to nil. We 
have a very clean operation. We do what we can to do our part 
to clean up the environment and that has always been our 
commitment ever since I have been Mayor since 1992. We do it 
consistently. We are always looking at ways to clean up any 
problem areas that we might have.
    So, I understand that you are getting some kind of 
transport from other areas of the country but I would doubt 
very much that it is coming from Dover, OH.
    Senator Carper. Well, I hope not. We compete for jobs. We 
have a former Mayor up here and a couple of recovering 
Governors and we compete for jobs every day against other 
States and against the rest of the world.
    Among the two driving factors for creating a nurturing 
environment for job creation and job preservation, one of them 
is the cost of power, the cost of electricity, and the other is 
the cost of healthcare. I would just suggest to you that when 
we are trying to compete with States that get much cheaper 
utility costs because they burn dirty fuels and create 
pollution for us, and we have to increase our utility costs in 
part to try to control emissions, and then we end up paying 
higher healthcare costs. It is just not fair. It is just not 
fair.
    I would just ask you to keep that, when the folks in Dover, 
OH are thinking about your pollution and what to do in terms of 
reducing your emissions, I hope you will keep in mind that 
there are folks in other Dovers that end up having to breathe 
the stuff, end up having to pay higher healthcare costs. We 
have thousands of kids that are not in school today because of 
the asthma, because they cannot breathe the air, and it is just 
not fair. I would just ask you to keep that in mind.
    The great thing about this situation we are in is that it 
actually can create jobs. Mr. Montgomery, you seemed to suggest 
it does not. Maybe these folks are working on air pollution 
control devices and installing them in places across the 
country, but they could find other work. The unemployment rate 
in the construction industry is 21 percent today. The folks 
that are doing the work that helps reduce these emissions, they 
are going to say, well, we are not going to reduce SOx, NOx and 
mercury emissions today, we want you to go and find other work, 
you would be gainfully employed.
    The unemployment rate is over 20 percent and it might be 
easy to sit here today in Washington, DC. in this hearing and 
say, well, they could find work someplace else. Well, if they 
could find work someplace else, I suspect they would be doing 
it.
    I will come back to, if I can, to Ms. Somson. I was very 
much involved in the CAFE legislation, trying to come up with 
something that the auto industry could live with and that was 
fair to the rest of us as well.
    Talk to us, if you will, and in CAFE we basically came to a 
bipartisan agreement. Ted Stevens, remember Ted Stevens? A big 
player in all of this for us at the end in getting us to a 
situation where in CAFE 2007 we said by 2020 overall fleet 
average energy efficiency, fuel efficiency, will be 36 miles 
per gallon.
    We still had a problem, though, because there was a 
question of are we going to have a California standard? Are we 
going to have separate standards for different States? The 
current Administration got involved and said, let us just try 
to not have a bunch of different standards, let us just have 
one standard, 36 miles per gallon, we are going to have it by 
2016.
    The auto industry bought in, UAW bought in. Just talk to us 
about why that makes sense, why that is a good idea.
    Ms. Somson. Well, thank you for giving me that opportunity 
and I will point out that under the EPA NHTSA One National 
Program that runs from 2012 to 2016 we will be at 35.5 miles 
per gallon by 2016. So, we moved that up considerably.
    The auto industry is one where planning has to be done 
years and years in advance and the investments are enormous 
capital investments. They need the certainty of what is going 
to be demanded of them in order to develop, to do the research 
and development, to do the retooling of the facilities, to 
train workers, to get the equipment. They need that years out. 
Five years, which is the authority that NHTSA has, is actually 
not even an ideal time for how long ahead we have to be 
planning.
    We definitely need one national standard and not a 
patchwork of different regulations for different parts of the 
country. It would be way too difficult to be manufacturing and 
selling and keeping track of things in different States.
    But if I can take this opportunity to just play off a 
little on what Mr. Montgomery said. I am not an economist and I 
am not going to speak to job growth, green jobs in other parts 
of the economy. But the job growth that we have seen here that 
I testified to here today, these are jobs that would not be in 
this country otherwise.
    Up until a year ago, there was really only one facility in 
the United States that was making the components for advanced 
technology vehicles and that was the White Marsh facility in 
Maryland and it was making them for trucks. So, the advanced 
vehicles, the vehicles of the future and their components, were 
all being imported. Priuses are imported. All of the engines 
and the power trains for the high-tech vehicles that are 
assembled here in the United States, all of them were being 
imported from Japan or Italy or Germany.
    We are now seeing, because of some of the things I 
testified about, the growth of these 30 new plants. We will 
actually be able to make the components, not just assemble from 
parts that are coming in from outside the United States. But 
these are truly new jobs because of the requirements that the 
industry knows they have to meet because of the one national 
standard.
    Senator Carper. Thank you very much. We have been joined by 
Senator Barrasso. Jim, our friend from Nebraska has not had a 
chance to say anything today. Should we go to him first? What 
do you think?
    Senator Inhofe. [Remarks off microphone.]
    Senator Carper. All right. Senator Johanns, please proceed.
    Senator Johanns. Very, very nice of you, but go ahead. I am 
ready to do questioning when it gets to be my turn. You are 
always the gentleman, Mr. Chairman, and I thank you for 
offering me that courtesy, but let us just keep on going.
    Senator Carper. Fair enough. All right. Jim, who should we 
go to next? Do you want to go to Senator Barrasso? What do you 
think?
    Senator Inhofe. You are the Chairman.
    Senator Carper. All right. John, when you are ready.
    Senator Barrasso. Can we just do questions as well or can 
we do opening statements?
    Senator Carper. Well, you can do either one.
    Senator Barrasso. But you have been asking questions?
    Senator Carper. Well, we have done opening statements and 
now we are doing questions.
    Senator Barrasso. All right. Thank you very much, Mr. 
Chairman, and I appreciate this.
    I want to welcome all of the witnesses, including the Mayor 
of Dover, OH. I think you offered a great amount in your 
testimony. I have had a chance to review it in advance.
    We are here to talk about the claims of jobs growth that 
are going to come from massive Government regulations. The 
theory goes that by crushing red, white and blue jobs through 
the EPA regulatory meat grinder that that will actually in some 
way churn out green jobs. I just do not believe that.
    In yesterday's Wall Street Journal there is an article 
entitled, Food Stamps Surge in the West. The article talks 
about how, before the recession hit, Idaho and Nevada and Utah 
had some of the lowest rates of food stamp use in the Nation. 
It was a boom time in that region, and it is a region that has 
always prided itself on self-reliance and a disdain for 
Government handouts.
    But since the recession hit, these three States have the 
fastest growth rates in the Nation of participation in the 
Federal programs. My concern is that with additional rules and 
regulations that are in this region, with the EPA regulatory 
train wreck of regulations, that this is going to increase and 
continue to be a problem.
    When these EPA regulations hit, some of which came out 
yesterday, coal-fired powerplants are either going to close or 
make costly upgrades and pass those costs on to consumers. The 
New York Times, Wall Street Journal and Washington Post today 
all report that the cost to consumers is going to be anywhere 
between $40 and $50 a year in increased electricity costs only 
related to that one regulation that came out yesterday. Now is 
the time that people are having to deal with paying at the 
pump, which is a significant impact on the quality of life of 
families all across this country.
    Last year around this time the Director of GE's Smart Grid, 
I am sorry, the former Director of GE's Smart Grid Initiative, 
wrote an editorial in the Washington Post entitled The Green 
Jobs Myth. In it, this individual states that a clean energy 
economy will not offer a panacea, but those who take great 
pains to tout the job creation potential of the green space 
might just end up including labor pains all around.
    So, Mr. Mayor, I appreciate your being here. I know that 
you stated in your testimony that the benefit of having and 
maintaining local generation comes with significant costs and 
particularly compliance costs related to the ever increasing 
array of environmental regulations on our fossil fuels.
    You stated that these regulations would lead to direct job 
losses at your powerplant and I would just ask if you could 
explain that in terms of how these jobs would be lost.
    Mr. Homrighausen. Well, Senator, if we are forced to go out 
of the coal business in generation, all of the 30 some jobs 
that we have at the powerplant would no longer be needed. We 
would go away from the boiler operators and the dispatchers to 
just maintaining the inflow of electricity from our inner 
connections with the EP and then the outflow going to our 
distribution system. So, we would lose the majority of those 
jobs in the powerplant, and all of the associated----
    Senator Barrasso. I was going to ask you about the 
associated jobs.
    Mr. Homrighausen. The associated jobs, from the coal 
suppliers, if you look at it, one calculation it would have a 
52.5 job impact on just the city of Dover.
    Senator Barrasso. Those jobs, would you consider them good 
paying jobs with benefits?
    Mr. Homrighausen. The lowest paid powerplant worker is, I 
believe, $23 with about 44 percent benefits.
    Senator Barrasso. Are they going to be able to go right to 
green jobs at that same kind of pay?
    Mr. Homrighausen. Not in Dover.
    Senator Barrasso. Thank you.
    One of the things you stated in your testimony was that the 
EPA's rulemaking can put us in an untenable position of 
deciding to either spend millions of dollars on the plant 
upgrades necessary to assure compliance or to deal with these 
issues. The money that you will have to spend to comply with 
the EPA's what I call train wreck of regulations, you know, 
where would that money go if you would not have to do and make 
those expensive changes?
    Mr. Homrighausen. Well, that money could be spent on 
infrastructure for roads, water, wastewater, all of the city 
services that we provide, rather than spending additional 
moneys on compliance measures when Dover has stepped to the 
plate consistently and spent money on pollution controls that 
some of other municipal electric companies in the State have 
not done.
    We were the first ones, as I mentioned earlier, to put in 
gas burners to help with our generation. We also put in the bag 
house that nobody else has put in. So, we are doing our part to 
clean up. Who knows what is going to be coming down the pike 
later.
    Senator Barrasso. Yes. Thank you very much, Mr. Mayor.
    Ms. Somson, I had a question for you. There was a Wall 
Street Journal article, a front page article, on Monday, March 
14th. It was an article entitled, EPA Tangles with New Critic 
Labor. I know that you are representing the United Auto Workers 
here today. It said several unions with strong influence in key 
States are demanding that the Environmental Protection Agency 
soften new regulations aimed at pollution associated with coal-
fired powerplants.
    It goes on to say that their contention, roughly half a 
dozen rules expected to roll out within the next 2 years could 
put thousands of jobs in jeopardy and damage the party's, the 
Democratic Party's, 2012 election prospects.
    In fact, the article references a miner's union study that 
says as many as 250,000 union jobs are at risk. The article 
says many of these jobs are in the utility, mining and railroad 
sectors and it says the heaviest impact will fall on rust belt 
States that have many old coal-fired plants as well as 
electoral votes. They talk about Ohio, particularly.
    So, in spite of your testimony, is it fair to say that 
unions are split on the issue of the job creating ability of 
regulations from the Clean Air Act?
    Ms. Somson. I think that there are, it is true that unions 
do not speak with one voice. I read that article. I know the 
mine workers have very justifiable concerns about how 
regulation would affect their industry. That does not mean that 
they are opposed to regulation. They just want to make sure 
that it is done right. I think that is also true for the 
transit unions that transport the coal.
    But I will note that there was at least one union that was 
mentioned in that article, the steelworkers, that is a part of 
a coalition that the UAW is also a part of called the Blue 
Green Alliance, which is environmental groups and unions trying 
to work together to see how we can do this in a way that is 
both good for the environment and good for jobs.
    The steelworkers did sign on to a statement that was put 
out by the Blue Green Alliance yesterday saying that we think 
we can get there, that we have to do it very thoughtfully, we 
have to be mindful of the impact on jobs for some sectors of 
the labor movement, but that working together and working 
carefully and taking everybody's view into consideration, we 
can get there. We do not have to fail to regulate because of 
those concerns.
    Senator Barrasso. But you are not disputing the figure by 
the miner's union study that says as many as a quarter million 
union jobs are at risk?
    Ms. Somson. I am not in a position to really----
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman. I appreciate it.
    Senator Carper. Senator Inhofe, would you mind questioning 
now?
    Senator Inhofe. Would I mind? I do not mind at all.
    Senator Carper. Go ahead. Thanks for your patience.
    Senator Inhofe. Since we are joined by both Senator Johanns 
and Senator Barrasso, I think it is worthwhile mentioning two 
other very significant pieces of legislation that have to do 
with the subject we are talking about.
    Senator Barrasso goes beyond my bill that I referred to in 
my opening statement having to do with the EPA's regulations of 
greenhouse gases and he gets into all kinds of areas affecting 
the Endangered Species Act, the various MACTs that are out 
there, and I have joined him on these.
    Of course Senator Johanns I mentioned in my opening 
statement. I have joined him on his bill that is going to 
require the EPA or a new commission made up of the Secretaries 
of Energy, I guess the five or six Secretaries already 
existing, as to what the cumulative effect is. Because we have 
been trying to get this from the Environmental Protection 
Agency for literally months because we have different amounts 
that come with each new regulation.
    Now, as far as the one that concerns me the most, and this 
is very timely because it is in the regular order on the floor 
of the Senate today, it is right now pending, and that is my 
bill that I refer to as the Inhofe-Upton Bill, and Upton refers 
to it as the Upton-Inhofe Bill, we have talked about that 
before, that would take away the jurisdiction of the 
Environmental Protection Agency in the regulation of greenhouse 
gases.
    I start off, in your opening statement, Mayor Homrighausen, 
you made the statement that you felt that the EPA was not 
equipped to regulate greenhouse gases. Would you like to 
elaborate anything on that statement?
    Mr. Homrighausen. Yes, Senator. The process that has been 
touted for many years is to inject the gases into the ground 
and that really has not been perfected. AEP in Ohio has been 
doing a study project along the Ohio River. That has not been 
perfected. We just, there is a lot of uncertainty as to what 
you do with this, the greenhouse gases. What happens when it 
gets in the ground and will it affect our water supply? So many 
unanswered questions that I do not feel we are ready to go 
forward with that type of process without the questions being 
answered.
    Senator Inhofe. Well, what do you think, well, let me just 
go ahead. Dr. Montgomery, do you have any comment to make about 
that in terms of the capability to regulate greenhouse gases 
within the Environmental Protection Agency under the Clean Air 
Act?
    Mr. Montgomery. Yes, Senator, thank you for asking.
    I think the Clean Air Act toolkit is entirely inappropriate 
for greenhouse gas emissions. Greenhouse gases are a global 
problem, they are a problem which the United States can only 
have a minuscule effect on through actions that we take within 
our own borders. It is the perfect example, Senator Carper, of 
the Golden Rule that we, that by the time it really matters, 
most of the greenhouse gas emissions that effect us are going 
to be coming from countries like China. So, that is on, kind 
of, the benefit side.
    On the cost side, EPA has a very limited toolkit. Achieving 
the kind of emission reductions that were described last year 
in climate legislation as being required to put the world on a 
path toward stabilizing concentrations at levels that the 
international negotiations aimed for requires massive changes 
in our energy sector. They require changes in the decisions 
that just about every business and industry would be 
undertaking. The only way to mobilize that kind of a change is 
through a consistent and broad economic incentive.
    Bureaucrats in Washington or even in the EPA regions cannot 
know enough about the individual decisions that every business 
and household faces to get at them in any way that is not 
grossly intrusive and grossly inefficient.
    The tools in the EPA toolkit are so limited that what they 
do is produce highly burdensome regulations in the particular 
areas that EPA can work with and do nothing in other areas so 
they add up to a grossly ineffective, I mean, one set of 
calculations I saw that MIT has done recently suggests that a 
regulatory approach to regulating greenhouse gas emissions 
would cost six times as much as the cap and trade approach that 
Congress has already rejected.
    Senator Inhofe. Yes, that is very significant, and I have 
documentation that it would be more. I have been using, and I 
used it on the floor yesterday, in talking about the cost of 
the EPA regulating greenhouse gases to the manufacturing 
sector, the power sector, and everybody else, I have continued 
to use what we originally got from the Kyoto Treaty.
    Now, granted that was a long time ago. But then each year 
after that, we failed, I might add that President Clinton never 
did submit that for ratification, but each year after that we 
had various cap and trade bills, in 2003, 2005, 2007 and then, 
most recently, the Waxman-Markey. In each case, we updated the 
cost. Originally it was, the Wharton School and MIT came out, 
along with CRA and others, and analyzed how much it would cost. 
It has actually remained at least the same by all analyses.
    Now, here we are in the midst of talking about how much, 
what we are trying to do to cut down the deficit and the debt, 
we are coming up with CRs that, we are talking about $1.4 
billion or maybe even $60 billion, and yet the cost of this 
would be between $300 and $400 billion a year. I know we are 
just talking about greenhouse gases right now. Again, we have 
that documented and you just said that by regulation, it would 
actually be more than if we were to pass legislatively a cap 
and trade.
    Why would it be more by regulation than it would be by cap 
and trade?
    Mr. Montgomery. What a cap and trade system does with all 
of its potential defects is make sure that if it costs more in 
one sector to redo the economy, like transportation to reduce 
emissions by a ton than it does in another sector, like 
electric power to reduce emissions by a ton, trading can take 
place between those sectors. The market will adjust to it so 
that across the board in the economy for everyone who is 
regulated, the last ton of emission reductions has the same 
cost.
    When EPA exercises its authorities, they are under a set of 
requirements to apply MACT in one area, to apply BACT in 
another area, to apply a different set of tools in a third 
area, to completely ignore 25 other areas. So, you do not come 
close to equalizing impacts, equalizing the marginal costs 
across all sectors.
    In particular, it grossly overemphasizes very costly 
reductions in emissions in the transportation sector while 
leaving aside very much less costs in emissions in other 
places.
    Senator Inhofe. OK. One thing, and I also mentioned this 
yesterday on the floor of the Senate, is that I was praising 
the Clean Air Act and the amendments to the Clean Air Act, how 
successful they have been, how they have reduced pollutants.
    It was originally designed, though, to go after what I 
refer to, and were referred to at that time, as the six real 
pollutants, and it had nothing to do with CO2. That 
has had a remarkable success rate in bringing that down. I 
always like to say that because I think it is significant. 
Regulation of CO2 is something that is different, 
however.
    Let me ask you, Mayor, one more time, I like to say Mayor 
because it is too hard to pronounce your name.
    [Laughter.]
    Senator Inhofe. I mentioned in my opening remarks that I 
had a hard job once. I was a Mayor, too.
    We know, you have talked about Dover. You have, what about 
the rest of the State? Do you talk to your counterparts, other 
Mayors? Are you just one, isolated area where unemployment is a 
problem as a result of some of these over regulations?
    Mr. Homrighausen. Well, Dover is on the eastern part of the 
State where a lot of the auto industry and steel mills were. 
So, a lot of our unemployment has come from plants being shut 
down, autoworkers being put out of work. But a lot of my 
counterparts in the State also experienced a downturn in the 
economy because of loss of jobs from associated industries that 
have been affected by the economy.
    Now, they do not have some of the problems that Dover has 
because we are only one of five municipals in the State that 
still generates a portion of our electric need. So, the closest 
to us would be Orrville that also has a coal plant and they 
experience a lot of the downturn but, in their favor, they also 
have Schmucker's and Smith Dairy. So, Schmucker's is not going 
to go away.
    Senator Inhofe. Well, OK. Well, let me, I have been waiting 
for this to show up here. Senator Barrasso was talking about 
the jobs and about where the unions are in this. I would only 
mention, and ask if you disagree with this segment of the 
unions, in terms of the boiler MACT up to 800,000 jobs at risk, 
opposed by the United Steelworkers Union, the United 
Steelworkers believes the proposal will be sufficient to 
imperil the operating status of many industrial plants, in the 
union's view, tens of thousands of jobs would be imperiled.
    The utility MACT, they talk about according to the Unions 
for Jobs and Environment, the UJE, an umbrella group for labor 
unions including the Teamsters' Union, United Mine Workers, 16 
coal-fired plants in West Virginia, the top coal producing 
State east of the Mississippi River according to the EIA, 38 in 
Ohio, 32 in Michigan, 24 in Indiana, 21 in Pennsylvania, 21 in 
Wisconsin are at risk of shutting down because of the EPA 
rules.
    Now, I could go on and on but I am out of time. But I would 
only like to ask you, do you disagree with all of these union 
figures that we have been given by these unions?
    Ms. Somson. Are you speaking to me?
    Senator Inhofe. Yes, of course.
    Ms. Somson. I cannot speak for other unions. I can refer, 
and if you like, I could offer to be included in their----
    Senator Inhofe. Well, these are other unions. I think they 
are you, also, they include you, do they not?
    Ms. Somson. The UAW? I do not think so.
    Senator Inhofe. OK, OK, go ahead.
    Ms. Somson. I heard you mention the steelworkers union, but 
I am reading from a press release from yesterday made by Leo 
Girard, the International President of the Steelworkers and a 
Co-Founder of the Blue Green Alliance, saying that the United 
States must be positioned to lead in the global economy of the 
21st Century and thoughtful measures to reduce carbon emissions 
will spur the kind of economic growth needed to put the U.S. 
economy back on track.
    I will include in the record the press release and the two 
page statement that was made and joined by a number of unions 
saying that we should be regulating greenhouse gases, it just 
needs to be done in a very thoughtful way.
    But I would also like to add that the jobs that we are 
seeing, growing, we are regulated. The auto industry's 
greenhouse gas emissions are already regulated by EPA with 
NHTSA. We have seen job growth and the majority of that job 
growth is in States like Ohio, Michigan, Indiana, Illinois. 
That is the belt where the major components are made.
    Senator Inhofe. Right. No, I understand that----
    Senator Carper. Senator, Senator, wait. We are going to 
have another round. We will have another round.
    Senator Inhofe. Well, I will not be here for another round 
and I wanted to just make sure that I have, in the record, 
these statements talking about the effects they are having on 
jobs and how the unions are responding to that.
    By the way, it is NHTSA, not the EPA, that is already doing 
the regulating.
    Senator Carper. The Senator's time has expired. You are 
welcome to come back for a second round.
    Senator Inhofe. Thank you so much.
    Senator Carper. Senator Johanns.
    Senator Johanns. Mr. Chairman, thank you.
    Let me just offer an observation. You are a good panel. The 
discussion that has gone back and forth here has been worth 
everybody's investment of time and we appreciate you being 
here.
    Let me offer a perspective that will lead to a few 
questions. Soon after I arrived in the Senate a couple of years 
ago, and I was a Mayor also at one point in a previous life, 
but soon after I arrived in the Senate the Senate Ag Committee 
had a hearing on the impact of cap and trade on agricultural. 
Of course, if you impact agriculture you impact food prices. I 
guess that is obvious.
    Now, I have always maintained that the average citizen 
feels inflation most in two areas, at the gasoline station and 
at the grocery store, because the options are so limited. You 
must eat and you must gas up the pickup or the car to get to 
work and to get the kids at day care and whatever else is going 
on.
    I will never forget going through this and feeling in my 
mind how insufficient the study was, how inadequate the 
analysis had been. I remember in that hearing asking the 
question, well, how many acres of productive grassland or 
cropland do you anticipate going from productivity to planting 
trees? Gosh, they were struggling to answer that.
    The Secretary was there, the Secretary of Agriculture, Tom 
Vilsack, the Administrator, Lisa Jackson, was there, and I 
never really did get a good answer. Then, many weeks later, it 
came out that it was 50 to 60 million acres. I mean, it was 
stunning. Of course, if you take grassland, which we graze 
cattle on, or productive cropland out of productivity, it is 
going to have an impact on prices and therefore an impact on 
the consumer.
    But at the end of kind of all of this I asked the 
Administrator, Lisa Jackson, a question, and it is on the 
record somewhere, to the effect of, if we do everything, 
describe for me the impact. She said, well, there would not be 
any.
    It dawned on me that global warming is called global 
warming for a purpose. It is not Nebraska warming, or Dover 
warming. It truly is a global issue that we are trying to come 
to grips with. I have traveled extensively as a former 
Secretary of Agriculture to places like China and India and you 
know, gosh, we could crush our economy, not have any impact.
    So, when the witnesses testify about the things that need 
to be done and yes, maybe jobs are created, but I think of 
Nucor Steel in Nebraska, they employ 1,000 people, of course 
they get tangled up in this, those are really high-quality 
jobs. We will not replace those jobs if they go to China. They 
just tell me point blank, Mike, our competition is in China. 
That is who we are competing with.
    All I want is an understanding of what is going on here. It 
is so easy to talk about green jobs, and this is going to 
happen to our economy, and that is going to happen, I just want 
solid analysis as to who wins here, because there probably will 
be some winners, and who loses. If it is the consumer at the 
grocery store that loses, that is very, very troublesome. If it 
is the person that turns on the light switch who loses, that is 
very troublesome.
    So, that is why I think this panel is so important. Because 
I listen and I hear differences of opinion from very, very 
smart people. That tells me that we have not gotten the right 
evidence to decide what are the costs and benefits. That is why 
Senator Inhofe and I have joined together to try to get an 
understanding. We all want to do the right thing, I believe, 
but we want to know what the facts are.
    So, let me, if I might, turn first to you, Mr. Montgomery, 
with that kind of backdrop. One of the things that has appeared 
to me in the analysis that has been done so far, and I have 
certainly not read every page and word of every analysis, but 
what I have studied is that there is tendency to project the 
upside, not very much good information on the downside. Is my 
perception on that accurate? What is your view of the studies 
and the research that has been done out there on that issue?
    Mr. Montgomery. Yes, Senator, I am afraid you are right. I 
think the recent EPA study clearly showed biases in this area 
and I am quite surprised because they took what I would say are 
the most optimistic estimates of the health benefits, 
translated them into a huge increase in the size of the U.S. 
labor force and claimed that would increase our GDP. Well of 
course it would. If there were more people out there working 
productively, the economy will do better.
    I believe they also in a number of ways made assumptions 
that were at the most optimistic end of the range on what the 
costs are. Now, that is not to say that they did not come up 
with a scenario that is possible, but it is at one end of the 
scale. Whenever we have tried to do an analysis like this, we 
try to balance this with the other end of the scale. I think 
there has been a history in these EPA perspective reports of 
putting the very best possible face on the regulations.
    Again, and I agree with Senator Inhofe, many of them 
probably had regulations, many of the past regulations had 
benefits that far exceeded their costs. But others did not. It 
not going to help us to distinguish that.
    I think, in the case of climate change, we do see in the 
professional literature a pretty wide range. But we do not see 
it presented here in the debate in Washington. I think that the 
answer that you can get is that the best that science and 
economics can tell you, within a very broad range. But the 
Administrator is right. Science agrees that we are not going to 
get very much direct benefit for the United States out of 
anything we do here in the United States.
    It is a global problem and the magnitude of the costs and 
the benefits of seeing that global problem range from 
marginally worth doing, if you do it very carefully, and it is 
not worth doing at all if you do it badly, to those who are 
much more convinced of the potential disaster and the 
inefficiency of markets and opportunities for doing something, 
they would say that it is an easy job. But there is that huge 
range there and neither science nor economics is going to be 
able to lower it, reduce it very much, before you have to make 
decisions.
    Senator Johanns. I heard the testimony about how unions 
have a difference of opinion and I think that is a very fair 
statement. If you are in a coal mining region, you are going to 
look at this differently that if you are in another region. But 
that, I was not hearing so much union versus union as I was 
hearing there are truly regional differences here that have an 
economic impact.
    I do not now who I ask here, but is that also a piece of 
what we are looking at that you could hammer, for example, the 
Midwest, although this may turn out awful there is might be 
better in another part of the country?
    Mr. Allen.
    Mr. Allen. If I might. I mean, it is a fact that energy 
issues have always been largely regional in nature. It is a 
fact that if you are downwind, you have economic and health 
consequences that are a result purely of your location.
    I was so glad to hear you say, Senator, that you have 
authentic curiosity about the differences of opinion because, 
as good as this panel has been, and I think we have done our 
level best to give you good information, we have not had the 
opportunity to touch on some very important underlying facts 
here.
    In the business that we are in, which is largely national 
business, we operate in all of the competitive markets in the 
country, the drivers are really very much about underlying 
commodity prices. Right now, because of the Marcellus Shale and 
new technologies, natural gas prices are very low. Because we 
are actually exporting coal to China, coal prices are very 
high. Many of the job impacts that we have been hearing thrown 
around here have as much to do, probably much more to do, with 
those economic realities than they do with the layering on of 
new regulations.
    It is also important to recognize which plants the new 
regulations effect because very small coal-fired powerplants, 
under 25 megawatts for example, actually are not affected by 
the toxics rule that was proposed yesterday.
    So, you know, I just really, it is always a dilemma, I 
think, for policymakers to get a broad enough view of what 
really drives outcomes. If you are a business, you have to take 
all of those variables into effect. If you are a business that 
has, among other things, made a calculation that environmental 
policy needs to be rigorous and science based, and that implies 
certain things about what you need to do, probably should do, 
but need to do in order to comply with those regulations, and 
you make the investments, but your competitor is allowed not to 
or delays it, that creates a fundamental economic unfairness 
and, frankly, a distortion in the marketplace that is bad for 
everybody who needs to make particularly large capital 
investments.
    It affects the credit ratings, it affects the costs of 
capital in ways that hinder American competitiveness. So, we 
would like to see as thorough and as rich a debate as possible. 
But it is also very important not to over compartmentalize 
certain aspects of the economic equation.
    Senator Johanns. Yes. You know, I do not want to abuse the 
privilege of my time, but here is what I would say. What I am 
looking for is a rigorous analysis that will lead to a right 
policy choice. I must admit I think there is rigorous analysis 
going on out there, but here it tends to, I do not know, head 
off in this direction, if you are against this then you are 
against clean air and if, you know, and quite honestly it is 
not a helpful debate. It might be interesting to watch on 
television but it is not a helpful debate.
    Recognizing today that we are in a global environment, and 
we just flat are, if we do something that puts our job creators 
on their knees and they are trying to compete with somebody 
else, well they only have a couple of choices if that somebody 
else is overseas. They either go over there and create the jobs 
in China or India or wherever, or they do not survive. For 
them, it is as stark a reality as that. So, if we choose wrong 
here, the implications are very, very serious.
    That is what I think we need to focus on, is how do we get 
this right and, in the end, at the end of all of this, are we 
even going to have an impact? If we are not, we had better be 
factoring that in, too.
    With that, I want to say thank you to each of you. You 
know, one of the things, Mr. Chairman, that I always like about 
Mayors, they are direct and I always said that filling potholes 
and mowing parks was never a political venture. It just was 
work that needed to be done. I think Mayors are very direct and 
so Mayor, especially to you, thank you for being here today.
    Senator Carper. Senator Johanns, thanks very much for your 
insightful questioning. Thank you very much.
    I want to go back to Mr. Yann, if I could. As you know, in 
this country we have been working on our air, cleaner air, for 
some 40 years. This year, we have several clean air regs that 
are targeting our utilities, all of which are under court-
ordered deadlines.
    Based on your past experience, do you feel that utilities 
can install the control technology that is needed to meet these 
new regulations in the timeframe required?
    Mr. Yann. Senator, we have talked to a number of them and 
worked with them and everything is doable with a plan, and the 
plans are being developed. I think we need to be careful of any 
delay that could put a burden on that timeline and make it a 
more aggressive schedule.
    Senator Carper. Say that again, about a delay----
    Mr. Yann. Any delay would put a burden on this.
    Senator Carper. OK, I understand.
    I remember, gosh, about five or 6 years ago representatives 
from about 10 different utilities came in to see me. They were 
from all over the country. Senator Alexander and I had been 
working on a full pollutant bill dealing with sulfur dioxide, 
nitrogen oxide, mercury and CO2 emissions and trying 
to see if there was some way we could set up a market system, a 
trading system, to harness market forces to reduce SOx, NOx and 
CO2 emissions, but not mercury.
    At the end of the conversation, this one guy from a 
southern based utility, I think it was a southern utility, but 
suddenly he said, talking to me, Senator, why do you not do 
this, you and your colleagues do this, tell us what the rules 
are going to be in terms of reducing emissions, give us a 
reasonable amount of time, give us some flexibility and get out 
of the way. That is what he said. I think that is pretty good 
advice. I still think that is pretty good advice.
    I want to go back to Mr. Allen, if I could. In your 
testimony, you shared with us the example of the Brandon Shores 
facility in Maryland. I believe you said your company installed 
technology to meet a 2006 State reg that took approximately, I 
do not know, 24, 25, 26 months to install all of the technology 
and it was completed a year or two ago, maybe in 2009. Is that 
correct?
    Mr. Allen. Yes.
    Senator Carper. Do you believe this facility will meet 
recent EPA regulations of air toxics and SOx and NOx?
    Mr. Allen. Yes.
    Senator Carper. As you know, we have seen several different 
job studies, I do not know, it is like dueling job studies 
going on here, we have seen several different job studies 
citing job creation with clean air regulations. How does your 
experience at Brandon Shores match up with some of these 
studies? Are they on target or are they off base?
    Mr. Allen. Well, I cannot speak to all of the studies. What 
I can say is that we have numbers that would be very similar to 
what I heard from Alstom in terms of what it takes to do the 
actual construction and installation of the equipment.
    It is harder for me to speak to the jobs in the supply 
chain. But, if you think about who the supply chain is, it 
includes Alstom, it also includes Nucor Steel that we heard 
Senator Johanns mention, it includes Lehigh Cement, which is a 
customer of Constellation Energies. It very importantly 
includes the heavy automotive industry that the United Auto 
Workers works in.
    So, the supply chain contains a great, great, great many 
jobs. Then there are the constructors, the Bechtels, the 
Flores, the Peter Kiewits of the country who we depend upon, 
the Washington International Groups and Shaw and others, and 
then the engineering firms that Charles River consults to, the 
Stone and Websters and the Black and Veatchs and Babcocks and 
Wilcoxes and all of the rest of them. So, yes, it is 
essentially, an American industry.
    I want to say something else about the jobs associated 
because we know who the people are who build these facilities. 
They are, in fact, the same boilermakers and pipe fitters and 
engineers and steamfitters and laborers and teamsters and 
others who manage the outages and the maintenance of all of 
these facilities. These are people who have careers in doing 
the highly-skilled jobs that are associated with the electric 
power industry.
    So, that tells us two things. It tells us that they are 
there to be employed and it also tells us that they need the 
employment in order to pursue their careers. So, I guess I 
just, that is an important thing to consider when you are 
wondering about whether or not there are jobs associated with 
doing the fundamental work of operating the electric power 
system. It seems, I have always thought that the question sort 
of answered itself.
    Senator Carper. All right. Good. I like those questions 
that answer themselves.
    I would come back to you, if I could, Mr. Yann. I have 
heard, I have been told that your company is on the cutting 
edge of carbon capture and storage technology. Is that a fair 
statement?
    Mr. Yann. Yes, Senator, we currently have 12 projects that 
are either in engineering or testing of CCS projects around the 
world and are making progress in that arena.
    Senator Carper. OK. Is your company seeing an uptake in 
interest in this kind of technology with greenhouse gas 
regulations in place?
    Mr. Yann. No, Senator, we are not.
    Senator Carper. OK. Are you seeing a decrease in interest 
in this kind of technology with the new greenhouse gas 
regulations in place? Is the interest going up or down?
    Mr. Yann. I would say it is going down, Senator.
    Senator Carper. So, you are seeing fewer utilities 
expressing an interest in this carbon capture and storage 
technology?
    Mr. Yann. Yes, sir.
    Senator Carper. Why do you think that is?
    Mr. Yann. Utilities are in a complex situation. You know, 
they are trying to serve us, the consumers of power, and trying 
to serve us as the people who are citizens of the United 
States. They are trying to work a balancing act. I think you 
said it very eloquently earlier, please tell us what to do, 
give us a reasonable time to do it, and we will go do it.
    Senator Carper. Does the price of natural gas, the dramatic 
drop in the price of natural gas, is that playing a role here?
    Mr. Yann. It is complicating the issue.
    Senator Carper. OK. Fair enough. Do you believe that 
efficiency, we talked about it, you know, and we are trying to 
get efficiencies in all of our mobile fleets and we are going 
to come close to doubling the requirements for energy 
efficiency within our mobile fleets by 2016. But do you think 
from efficiencies that we can create jobs?
    Mr. Yann. Senator, I do not think there is any silver 
bullet. There is a lot of silver buckshot. I think we have to 
take advantage of every opportunity that we can to reach that 
solution. That is a part of it.
    Senator Carper. All right. We will wrap up by, well, I am 
going to come back and recognize Senator Barrasso again and 
then come back and ask one follow-up question. I will telegraph 
the pitch right now.
    One of the things that I try to focus on here is how do we 
develop consensus. It is a pretty contentious place. We need to 
try to find consensus in a whole lot of areas, deficit 
reduction, in terms of healthcare, better outcomes, less money, 
what are we going to do about the infrastructure and 
transportation infrastructure, all kinds of things, and we need 
to develop consensus to really address these complex and 
difficult issues.
    One of the things I am going to ask you all to do, and it 
will be my last question, is given where you are coming from in 
your testimoneys, where do you think there is agreement among 
this panel? I am just going to ask everybody here.
    Where do you think you agree with respect to cleaner air, 
increasing jobs, decreasing, where do you agree? Where do you 
think that you agree that an action might be helpful to us as 
we try to find consensus on these issues?
    OK? That will be my last question. Think about that. Chew 
on that for a while and, in the meantime, Senator Barrasso is 
going to chew on you.
    [Laughter.]
    Senator Carper. Well, not really.
    Senator Barrasso. Thank you, Mr. Chairman. It really, I 
have to tell you, it is a privilege to work with this guy, an 
absolutely outstanding individual.
    Mr. Montgomery, if I could, the National Petrochemical and 
Refiners Association has estimated that about 70 percent of 
gasoline diesel fuel could end up being imported from 
refineries in China, India, South America, Africa and the 
Middle East by 2025, about 15 years from now, if the United 
States imposes inflexible, unilateral greenhouse gas controls 
under the Clean Air Act.
    To me, that is going to cost hundreds and hundreds of 
thousands of jobs. I believe that is going to increase the cost 
of energy in the United States. What is that going to do in 
terms of jobs in this country with those kind of increased 
costs related to those kinds of imports, but in terms of the 
reduction of production and then any additional impacts that 
you see?
    Mr. Montgomery. Thank you, Senator. I think there certainly 
are jobs that are associated with petroleum refining in the 
United States and if we do not do the refining here, those jobs 
will not be here. It is much like the coal mining jobs will not 
be here if the, if we retire 60 or 80 gigawatts of coal-fired 
generation because it is more economical to do that than to 
install pollution controls and operate it under the threat of 
greenhouse gas emissions.
    But the real loser is the American consumer. The fact is 
that in all of these cases, what we hear are descriptions of 
the jobs that the United Auto Workers care about, descriptions 
of the jobs that are provided by Alstom, description of the 
jobs that are involved in installing pollution controls at 
Constellation Energy, description, in some cases, of the 
benefits that a company will get because its electricity will 
be lower in cost that someone else's under the regulations.
    But the losses are occurring across the board in the 
economy because these are all increases in costs that are borne 
by the American consumer. The American consumer is not 
represented here in Washington by a specific spokesperson who 
can point to everything that is happening because it is spread 
broadly across consumers and across U.S. manufacturing.
    It is that increase in costs which means that essentially 
there is, that the consumer is bearing the cost of higher 
priced, I mean, when there is more labor involved in producing 
a car, that is a cost. That means the price of the new car is 
going up. That means either, I mean, there is more man hours 
per car but there are probably going to be less cars sold. We 
have seen that over and over again over the past couple of 
decades.
    If there are not cars sold, then people are spending more 
on cars and they have less money to spend on something else. 
That is what the effect is and that is the effect of the 
petroleum refineries going offshore as well. There is less for 
consumers, consumers have less real income, if you like, to buy 
things because they are paying for the higher costs of these 
environmental controls. Some are justified, some are not.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    Senator Carper. All right, folks, I telegraphed my pitch. 
You are at the plate. It is a chance to hit one out of the 
park.
    Ms. Somson, do you want to go first?
    Ms. Somson. Certainly. Thank you, Senator. One thing I 
heard today that pleased me was that everybody is not just 
concerned about jobs but about good jobs and that good jobs are 
defined as high-paying jobs and jobs that provide benefits, 
which we see as pensions and healthcare. I am pleased that this 
is bipartisan and everybody on our panel seems to agree that 
that is a high value that we have to keep an eye on because, of 
course, we have a great concern about the loss of those jobs 
and the loss of the middle class.
    I think it is implicit that everybody cares about oil 
savings and that, of course, we are all better off if our 
vehicles, for examples, are more efficient. I would suggest an 
answer to Mr. Montgomery that, although it is true that the 
cost of the vehicle goes up, there are considerable savings to 
the consumer from the advanced technology vehicles. They pay 
less at the pump and that is money that they can take and spend 
elsewhere, which stimulates jobs.
    With respect to Mr. Montgomery saying that we would have 
fewer car sales if we were to have more regulations, I think, 
in fact, that the drop in car sales is because of the economy 
and the economy has led to such a high unemployment rate, so we 
are back again to jobs.
    So, if we all agree that we need jobs and good jobs, that 
we all benefit from oil savings and that we have some benefit, 
even if it might not be, we might argue over how great a 
benefit, to a healthier environment, I think everybody is 
really on the same page. If this led to having Congress, once 
again, take up comprehensive climate change legislation, we 
think that would be a wonderful thing.
    Senator Carper. All right. Thank you. There is a lot of 
pent up demand for buying new cars, trucks and vans, and we 
have gone from a time a few years ago where we were buying in 
this country 16 to 17 million units a year down to as little as 
9 or 10 units. So, there is a lot of pent up demand.
    When the economy comes back, as the economy comes back, and 
people look at their old clunkers in their driveways and 
garages and out on the streets, well, one of the good things 
that is coming out of Detroit and other places too are far more 
energy efficient vehicles. So, hopefully, at a time when folks 
are looking for a new set of wheels, a lot of the sets of 
wheels that are available will be getting 30, 40, 50 miles per 
gallon, even 80 with that new Fisker and Chevrolet Volt.
    All right. Mayor.
    Mr. Homrighausen. Thank you, Senator. I believe that we can 
all agree that we need to do what is in the best interests of 
the entire country in cleaning up our environment. But we also 
have to be very careful on what steps we take. You know, if the 
intent is to get away from burning coal, which is a very 
inexpensive resource, and move it toward natural gas or some 
other higher priced commodity, we have to be cautious because 
increased need will increase the costs of natural gas.
    People cannot afford to heat their homes with increased 
costs. They cannot afford their electricity if the electricity 
price is raised because of natural gas. They cannot afford----
    Senator Carper. I am sorry. I do not understand. You say if 
the electricity prices raise because of natural gas----
    Mr. Homrighausen. Because of the higher cost of natural 
gas. If you have an increased demand, natural gas is going to 
increase in costs. Then also----
    Senator Carper. I see demand is going up but the price is 
going down. I know that seems counterintuitive, but that is 
what is happening.
    Mr. Homrighausen. Well, history shows that the more demand 
for a product, the more it is going to cost.
    Senator Carper. Unless the supply expands, dramatically, 
and that----
    Mr. Homrighausen. Then you have to be wary of what is the 
fracking going to do to water supply, you know, there is whole 
myriad of problems associated with this.
    But several years ago, I believe the Chinese were bringing 
online one new coal-fired powerplant a week. No regulations. 
When they had the Olympics, they had to shut down two 
powerplants so the air could be cleaned up so they could have 
the Olympics which affected Dover Chemical, which one of their 
products is they need phosphate.
    Well, there were two places in the world that they could 
get phosphate, which was from China or Uzbekistan. Since they 
could not have the electricity to mine the phosphate, the 
Chinese raised the prices by 300 percent which put 60 employees 
of Dover Chemical out of work.
    I read a report last week about the beneficial effects of 
the Clean Air Act from 1990 to 2000 and what struck me as very 
interesting, it showed a map where all the pollution points 
were in the United States, and yet it had Canada and Mexico 
with no points on the map. So, I was just wondering if 
pollution follows boundaries.
    Senator Carper. All right. Thank you.
    A comment on that. I was born in West Virginia. My dad 
actually used to work in a coal mine for a while. So, I have a 
soft spot in my heart still for West Virginia and for the coal 
industry. I am not interested in putting coal out of business. 
What I am interested in doing is making sure if we burn it, we 
have a lot of it, as we burn it to create electricity that we 
just burn it in a far more, a far cleaner way, a far cleaner 
way. I will not go the other way because we need to close----
    Mr. Homrighausen. Right. I think in order to do that we 
need to spend some serious dollars on clean coal technology,
    Senator Carper. We have. Now what we need to do is to spend 
some serious dollars on implementing that technology that 
Alstom and others have. So, that is part of our challenge.
    All right. Thank you.
    Mr. Allen? Some closing thoughts?
    Mr. Allen. Well, what I think what you heard is that 
everything is connected to everything else.
    Senator Carper. All right. Thanks very much. Mr. 
Montgomery?
    [Laughter.]
    Senator Carper. No, back to you, Mr. Allen.
    Mr. Allen. I also think that you heard a lot of different 
points of view struggling to understanding, coalesce around, 
the fundamental value proposition of environmental protection 
and, at some point, either you think that value is worth the 
cost or you do not. To the extent that markets can be used to 
do two things, to express the most efficient way to achieve the 
value if you believe it is there, and second to test how much 
consumers are willing to pay for it, then I think you have 
probably the right formula.
    Mr. Montgomery said almost exactly the same thing, if you 
think about it. He said that the costs, sooner or later, flow 
through to consumers. He is absolutely right. The question is 
do consumers want to pay for the value that they get from 
particularly clean air? I think we should leave that to them to 
decide.
    Senator Carper. Going back to the example I used earlier 
between Dover, OH and Dover, DE, the consumers in, the folks 
who are going to benefit most from clean air from Dover, OH are 
folks in Dover, DE because of the transport of the emissions. 
The folks who are going to have to bear, or have been bearing 
for years, higher healthcare costs, are the people on the East 
Coast, the Mid-Atlantic and the Northeast. Investments made, in 
some cases in the Midwest, will actually benefit those of use 
who live in the rest of our country, at least in the Eastern 
part of our country, because our healthcare costs are going to 
go down.
    It is hard for me to make an argument. I am trying to 
compete with a company that is thinking about putting jobs in 
Dover, OH or Dover, DE and they say well, look at the climate 
there, go to Dover, OH, they have cheaper electricity costs and 
their healthcare costs are lower. That is hard for me to 
compete with. We have actually, not to pick on Dover, we have 
actually had those battles and they are hard to win.
    Mr. Allen. I guess I am in the camp of thinking we are all 
in this together.
    Senator Carper. Good. All right. Thanks.
    Mr. Montgomery.
    Mr. Montgomery. Thank you. Well, I think the first thing we 
can probably all agree on is that Ms. Somson and I do not agree 
about the effects of regulation on the auto industry. I propose 
that the referee on that be a book by two economists at a more 
or less Democratic organization, the Brookings Institution, 
Pietro Nivola and Robert Crandall, who I would defer to on that 
subject, but I think that they support my point of view.
    I may be, again, overly optimistic, but I think that we all 
agree that in doing these, any of these environmental 
regulations, it would be very helpful if they are done in a way 
that their stringency and application and timing responds in a 
more or less automatic way to what we find out are the costs of 
doing things, that in many ways we are hearing that it is 
arbitrary schedules and arbitrary, you know, unit-specific 
requirements that are not something that are adjustable because 
of the costs you get the culpability of doing something. That 
is something really to be avoided.
    I would like to believe that that also makes us all agree 
that there are far better ways of dealing with greenhouse gas 
emissions that the Clean Air Act authorities of EPA.
    Finally, I would love to talk to you about TMDL trading in 
the Chesapeake because I think that one way we could deal with 
one of the Golden Rule problems is if Congress took up the 
subject of a six State trading system to improve the way in 
which the runoff is managed. But that is an entirely different 
subject.
    Senator Carper. That is a good one. Maybe we can get 
Senator Cardin to join us in that conversation.
    Thanks. Thanks a lot.
    Mr. Yann.
    Mr. Yann. Thank you, Senator. I think we all believe in 
quality clean air and I think we all believe in quality jobs 
and I think we also believe that the market-based solutions 
provide the best option for addressing these issues. I think, 
quietly, I will end it at that.
    Senator Carper. One of the questions that I think President 
George Herbert Walker Bush faced as he signed into the law the 
1990 Clean Air Act Amendments was how are going to reduce 
sulfur dioxide emissions? We had a real problem with acid rain 
at the time. We do not hear much about that anymore. I think 
they wrestled with the question of whether we were going to use 
a regulatory approach or try to harness market forces and use 
that approach.
    In the end, the approach of using market forces, some of us 
were skeptical as to whether that would actually work, turned 
out it worked pretty well and I am told we actually met our 
sulfur dioxide emission targets in about one-half the time that 
was anticipated and at about one-fifth the cost. Pretty 
impressive.
    I studied a little bit of economics at Ohio State and later 
after I got out of the Navy at the University of Delaware. I 
have always been fascinated by how to harness market forces to 
drive good public policy behaviors. So, I do not know who came 
up with that idea, Mr. Montgomery, you know, with acid rain, 
but I thought it was very clever. Maybe sometime, somewhere 
along the way, we can find that to apply to other things.
    The other thing I want to say, Laura Haines, who is sitting 
right here over my left shoulder, hears me say this about every 
other day. I like to quote Albert Einstein. I am one of the few 
people here who does. But he used to say, in adversity lies 
opportunity.
    I am, by nature, an optimistic person. But I really think 
we face plenty of adversity these days, certainly not on the 
scale of what they face over in Japan right now, but we face 
plenty of adversity. I think our challenge as we deal with that 
adversity is to try to derive from it opportunity, to realize 
opportunity. God knows we need jobs here, we need good paying 
jobs, we need cleaner air, and we need to reduce our dependence 
on fossil fuels, especially on oil, from other countries that 
are undemocratic and unstable.
    So, my hope is that we can figure out around here, the 
reason why, to try to work together and find consensus and that 
is the reason why I asked all of you to answer that last 
question was to maybe help plant some seeds for that consensus.
    So, we very much appreciate your preparation today, your 
participation today. Maybe if you are lucky, we will send you a 
couple of questions, not too many. We would ask you, if you get 
some of those, that you respond to them promptly. We would be 
most grateful.
    With that, this hearing is adjourned. Thanks so much.
    [Whereupon, at 12:08 p.m. the subcommittees were 
adjourned.]
    [Additional statement submitted for the record follows:]
     Statement of Hon. Frank R. Lautenberg, U.S. Senator from the 
                          State of New Jersey
    Madam Chairman, we face a clear and present danger from Tea Party 
politicians who want to reward Big Polluters by crippling the EPA's 
ability to enforce the Clean Air Act. The health benefits of the Clean 
Air Act--particularly for our children--are well-documented. Last year 
alone, the law prevented 1.7 million cases of childhood asthma and more 
than 160,000 premature deaths, according to EPA. But beyond its 
environmental and health benefits, the fact is this law is also a 
critical tool for our economy.
    For many years, I led a business that I co-founded with two 
friends--a New Jersey company that now employs 45,000 people in 23 
countries. As any business person will tell you, virtually nothing is 
more important to a company's productivity than the well-being of its 
employees. Clean air is essential to that well-being. When the air is 
dirty, health care costs climb and productivity plunges. Simply put--
employees who can't breathe are employees who can't work.
    Last year, there were 13 million fewer lost work days in our 
country, thanks to the Clean Air Act. Make no mistake: As pollution 
levels have fallen, the U.S. economy has grown. Overall, the economic 
benefits of the Clean Air Act are estimated at more than 30 times the 
cost of compliance. Our country's gross domestic product--the value of 
all the goods and services we produce--is at least 1.5 percent higher 
today than it would have been without the Clean Air Act, according to 
research from Harvard University.
    This law is also an employment generator. The technology that our 
country has developed to combat air pollution has spawned thousands of 
jobs across a variety of industries. The environmental technology 
industry as a whole does more than 300 billion dollars in business 
every year and has created 1.7 million jobs. America leads the world in 
the export of environmental products--all proudly stamped with the 
``Made in the U.S.A.'' label. But the Tea Party wants to ignore the 
Clean Air Act's success. They want to ignore the Supreme Court and 
scientists at the EPA who agree the Clean Air Act is a tool we must use 
to stop dangerous pollution. All so they can give a free pass to 
polluters. If this happens, we'll see more employees calling in sick, 
more parents taking off work to care for asthmatic children, fewer 
clean energy jobs and fewer business opportunities for the 
environmental tech sector.
    So I look forward to hearing from today's witnesses about how we 
can defend the Clean Air Act--not decimate it--and continue using this 
historic law to protect public health, reduce our dependence on oil and 
produce more clean energy jobs in our country.

                                 
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