[Senate Hearing 112-919]
[From the U.S. Government Publishing Office]





 
                                                        S. Hrg. 112-919

		FEDERAL EFFORTS TO PROTECT PUBLIC HEALTH 
	                BY REDUCING DIESEL EMISSIONS

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


                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR 
                                  SAFETY

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 12, 2011

                               __________

 Printed for the use of the Senate Committee on Environment and Public Works
 
 
 
 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]



       Available via the World Wide Web: http://www.fdsys.gpo.gov

                               __________





                         U.S. GOVERNMENT PUBLISHING OFFICE
88-767 PDF                    WASHINGTON : 2015                         

________________________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, 
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, [email protected].  







               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)

                            C O N T E N T S

                              ----------                              
                                                                   Page

                              MAY 12, 2011

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..     1
Barrasso, Hon. John, U.S. Senator from the State of Wyoming......     5
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma, 
  prepared statement.............................................    76

                               WITNESSES

O'Keefe, Robert, vice president, Health Effects Institute........     7
    Prepared statement...........................................    10
Parfitt, Todd, deputy director, Wyoming Department of 
  Environmental Quality..........................................    15
    Prepared statement...........................................    17
Lanham, Robert, vice president, Williams Brothers Construction Co    21
    Prepared statement...........................................    23
Schaeffer, Allen R., executive director, Diesel Technology Forum.    30
    Prepared statement...........................................    33
    Response to an additional question from Senator Carper.......    40
Schneider, Conrad, advocacy director, Clean Air Task Force.......    43
    Prepared statement...........................................    46

                          ADDITIONAL MATERIAL

Letters:
    Associated General Contractors (AGC) and the Clean Air Task 
      Force (CAFT), dated May 11, 2011...........................    78
    McCarthy, Gina, Assistant Administrator, U.S. Environmental 
      Protection Agency, dated May 9, 2011.......................    80
Statements:
    Regan, Timothy, senior vice president, Corning Incorporated..    83
    Malec-McKenna, Suzanne, commissioner, City of Chicago........    86
    Schafer, Larry, senior advisor, National Biodiesel Board.....    88


 FEDERAL EFFORTS TO PROTECT PUBLIC HEALTH BY REDUCING DIESEL EMISSIONS

                              ----------                              


                         THURSDAY, MAY 12, 2011

                               U.S. Senate,
         Committee on Environment and Public Works,
              Subcommittee on Clean Air and Nuclear Safety,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:30 p.m. in 
room 406, Dirksen Senate Office Building, the Hon. Thomas 
Carper (chairman of the subcommittee) presiding.
    Present: Senators Carper and Barrasso.

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

    Senator Carper. This hearing will come to order.
    I think this might be, I might be mistaken, but I think 
this might be the first time that we have sat side by side in 
open hearings. Am I mistaken?
    Senator Barrasso. It is a great day for America.
    Senator Carper. I would like to think so.
    All right, welcome to our guests and those who are 
testifying and those who are not. But we appreciate the effort 
of all of you to join us here today.
    Today's subcommittee hearing will review the Federal 
efforts, the ongoing Federal efforts to protect public health 
by reducing diesel emissions. Senator Barrasso and I have about 
5 minutes for opening statements, give or take, and then I will 
recognize our panel of witnesses. You will have roughly 5 
minutes for your opening statements. If you go a little beyond 
that, it is OK. If you go way beyond, that is not OK. But your 
entire statements will be made part of the record and we will 
have a couple of rounds of questions after that.
    We just had our last vote of the day and I saw a number of 
Senators streaming for the exits, and I don't think they were 
coming here. They were probably smelling, what is it, aviation 
fuel. So a lot of them are probably heading home by now, but we 
are here and we are very much interested in what you have to 
say and so are the staffs. A lot of the staffs are actually 
watching on television.
    But my colleagues and I were sent to Washington, as I am 
often reminded, to govern, to find common sense solutions to 
the challenges that face our Nation. I don't believe that 
Americans are especially interested in ideas that are Democrat 
or Republican. They want us to come up with ideas that will 
work and that we can all agree on to make our country even 
better, like I like to say. I think I have heard Senator 
Barrasso say this. In the end, we are in this together. We need 
to figure out together how to get to a better place.
    Cleaning up dirty diesel emissions provides us with an 
opportunity to walk across the aisle. That is something we 
don't do enough these days. I remember when George Voinovich 
sat in the seat now occupied by Senator Barrasso and when he 
sat in this seat chairing this subcommittee, one day he said to 
me, you know, we ought to work on reducing diesel emissions in 
our country. They talked about how we could get a payoff, I 
think for every dollar of investment, we would get about a $13 
public benefit. He convinced me in about 5 minutes that this 
was a good thing to do. We have had I think great success for 
our country; a lot of bipartisan support for that. What we are 
doing today actually helps to build on that.
    But our Nation relies heavily on diesel power to transport 
commuters, to harvest our crops and to build our 
infrastructure. One of the good things we always say about the 
diesel engines is that they last a long time. The bad thing 
about diesel engines is that they last a long time.
    Clean diesel engines made today are reaching near zero 
emissions, but that does nothing for the millions of engines 
already in use. They are going to be with us for 20 years and 
more. Despite new engine standards, the EPA estimates that 
there are some 11 million diesel engines in America that are 
lacking the latest pollution control technology, 11 million.
    These older diesel engines emit black carbon and toxic 
particles which we will hear today cause significant harm to 
the environment and to our health. Retrofitting or replacing 
older diesel engines with American-made technology can 
dramatically reduce diesel emissions.
    Unfortunately, there are few direct economic incentives for 
vehicle and equipment owners to retrofit or replace their old 
engines. Programs like the Diesel Emission Reduction Act help 
provide the right incentives to clean up our existing diesel 
fleet.
    An idea that came from my friend Senator Voinovich, as I 
said earlier, DERA is one of the most cost-effective clean air 
Federal programs and it does indeed provide an economic and 
health benefit of some $13 for every dollar of moneys that are 
spent.
    Through voluntary grants and through loans, DERA has 
reduced deadly emissions, saved lives and employed thousands of 
workers who manufacture, sell or who repair diesel vehicles and 
their components in each State. It is really a win-win-win 
situation.
    The other day, I was getting off the train in Delaware and 
trying to rush to get someplace on the riverfront for this big 
dinner we were having to honor outstanding school performers, 
superior superstar performance in some of our schools. I ran to 
my minivan trying to get to the event, and I was late and I 
didn't want it to end before I got there.
    I pulled up trying to get to the Chase Center on the 
riverfront, and I pulled up behind a bus that was just stuck in 
the road right in front of me. The place I needed to turn right 
was just ahead of the bus and the bus wasn't moving. On the 
back of the bus was a sign, and it was one of these Chinese 
buses where you ride for $5 and go from Boston to Philadelphia 
or whatever. I got right behind this bus sitting there, and 
waiting for this bus to turn and hoping it will turn before the 
light turns red.
    But I was sitting there behind the bus and it was a diesel 
bus. There is a sign on the back of the bus and the sign said, 
double happiness. When I think about what we are doing here 
with diesel emission reduction, it is really triple happiness. 
It is really triple happiness.
    Because, one, we can use American technology, put Americans 
to work. We can end up by using something that is already an 
existing asset and diesels make it better. We can reduce 
emissions and make our American people healthy. That is a win-
win-win. It is also triple happiness.
    Last Congress, we reauthorized the DERA Program through 
2016. We made some changes to try to improve DERA's 
effectiveness. Unfortunately, the President's budget for Fiscal 
Year 2012 zeroed out DERA funding. Although I appreciate 
dedication to reducing the Federal deficit, cutting such a 
successful program doesn't make sense. I like to say, if 
something is not working, then we ought to make it better. If 
it is not perfect, make it better. I would like to say as we 
allocate money to do certain things, we ought to ask the 
question: Can we get a better result for less money?
    But in this case with $13 of benefit for every $1 of 
investment, that is a pretty good return and it is one that is 
hard for me to understand why the President would say, you 
know, we are going to zero that program out. It seems kind of 
counterintuitive.
    But I will continue to work with my colleagues, with 
Senator Barrasso and others, to ensure that this program 
continues to be funded at reasonable levels. Although a great 
success, DERA has not been able to greatly reduce emissions 
from our Nation's construction equipment, the bulldozers, 
diggers, backhoes that build our Nation's infrastructure and 
produce some 25 percent of America's mobile diesel emissions.
    At risk are children who live near construction sites, 
commuters stuck in traffic, and workers who operate 
construction equipment. In fact, heavy equipment operators who 
are exposed to diesel exhaust are 47 percent more likely to die 
from a heart attack, 47 percent.
    To better address this problem, today I am introducing the 
Clean Construction Act of 2011. This common sense approach is 
simple. In areas of poor air quality, areas of nonattainment 
for 2.5 ppm, Federal transportation projects should reduce, not 
increase, deadly diesel emissions.
    The Clean Construction Act accomplishes this goal by 
requiring just in those limited places where the nonattainment 
for ppm 2.5, but requires that 1 percent of the cost of the 
transportation project in a particulate matter nonattainment 
area be used to upgrade dirty diesel equipment.
    The bill applies solely to particulate matter in 
nonattainment areas where significant air quality problems 
already exist.
    Some will criticize this bill as diversion of 
transportation dollars. I understand that. However, I am going 
to ask my colleagues to recognize that 1 percent of the cost of 
a small set of projects is a reasonable price to ensure that 
fewer Americans die from diesel soot, and this will do that.
    In closing, we look forward to hearing from our witnesses 
today about the health impacts of diesel emissions and ways to 
get greater diesel emission reductions. I also look forward to 
working with Senator Barrasso, with other colleagues, to reduce 
diesel emissions that threaten our communities and our 
children.
    [The prepared statement of Senator Carper follows:]
 Statement of Hon. Tom Carper, U.S. Senator from the State of Delaware
    My colleagues and I were sent to Washington to govern and to find 
common-sense solutions to the challenges facing our Nation. I don't 
believe Americans are especially interested in Democratic ideas or 
Republican ideas. They want us to come up with ideas that will work and 
we can all agree on to make our country even better.
    Cleaning up dirty diesel emissions provides us an opportunity to 
work across the aisle, something we do too rarely these days. Our 
nation relies heavily on diesel power to transport commuters, harvest 
our crops, and build our infrastructure.
    The good thing about diesel engines is that they last a long time, 
and the bad thing about diesel engines is that they last a long time. 
Clean diesel engines made today are reaching near zero emissions, but 
that does nothing for the millions of engines already in use and will 
be in use for the next 20 years.
    Despite new engine standards, the EPA estimates there are 11 
million diesel engines in America lacking the latest pollution control 
technology. These older diesel engines emit black carbon and toxic 
particles, which we will hear today, cause significant harm to the 
environment and to our health. Retrofitting or replacing older diesel 
engines with American made technology can dramatically reduce diesel 
emissions.
    Unfortunately, there are few direct economic incentives for vehicle 
and equipment owners to retrofit or replace their old engines. Programs 
like the Diesel Emissions Reduction Act (DERA) help provide the right 
incentives to clean up our existing diesel fleet.
    An idea that came from my friend Sen. Voinovich, DERA is one of the 
most cost-effective clean air Federal programs, averaging more than $13 
in health and economic benefits for every $1 in funding. Through 
voluntary grants and loans, DERA has reduced deadly emissions, saved 
lives and employed thousands of workers who manufacture, sell or repair 
diesel vehicles and their components in each state. It is a true win-
win-win.
    Last Congress, we reauthorized the DERA program through 2016 and 
made some changes to try to improve DERA's effectiveness. 
Unfortunately, the President's budget for fiscal year 2012 zeroed out 
DERA funding.
    Although I appreciate dedication to reducing the Federal deficit, 
cutting such a successful program doesn't make sense. I will continue 
to work with my colleagues to ensure this program continues to be 
funded.
    Although a great success, DERA has not been able to greatly reduce 
emissions from our nation's construction equipment. The bulldozers, 
diggers, and backhoes that build our nation's infrastructure produce 25 
percent of America's mobile diesel emissions.
    At risk are children who live near construction sites, commuters 
stuck in traffic, and workers who operate construction machinery. In 
fact, heavy equipment operators who are exposed to diesel exhaust are 
47 percent more likely to die from a heart attack.
    To better address this problem, today I am introducing the Clean 
Construction Act of 2011. This common-sense approach is simple: in 
areas of poor air quality, Federal transportation projects should 
reduce, not increase, deadly diesel emissions.
    The Clean Construction Act accomplishes this goal by requiring that 
1 percent of the cost of a transportation project in a particulate 
matter nonattainment area is used to upgrade dirty diesel equipment. 
The bill applies solely to particulate matter nonattainment areas, 
where significant air quality problems already exist.
    Some will criticize this bill as a diversion of transportation 
dollars. However, I ask my colleagues to recognize that 1 percent of 
the cost of a small set of projects is a reasonable price to ensure 
fewer Americans die from diesel soot.
    In closing, I look forward to hearing from our witnesses today 
about the health impacts of diesel emissions and ways to get greater 
diesel emission reductions. I also look forward to working with my 
colleagues to reduce toxic diesel emissions that threaten our 
communities and our children.

    Senator Carper. Senator Barrasso.

STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR FROM THE STATE OF 
                            WYOMING

    Senator Barrasso. Thank you very much, Mr. Chairman.
    I welcome all the witnesses who have joined us this 
afternoon.
    It is a pleasure to work with you, Mr. Chairman. Mr. 
Chairman, in particular though, I want to recognize two 
constituents of mine from Wyoming, Mr. Todd Parfitt who is 
testifying today, as well as Ms. Jennifer Frazier. Mr. Parfitt 
is the deputy director of Wyoming's Department of Environmental 
Quality, and Ms. Frazier is an air quality engineer with the 
Department. So I want to thank them for traveling all the way 
from Cheyenne, WY.
    Senator Carper. I don't see her. Where is she?
    Welcome. Looks pretty young. So does Mr. Parfitt.
    Senator Barrasso. You should spend more time in Wyoming, 
Mr. Chairman.
    Senator Carper. Maybe I will. I have been there before.
    Senator Barrasso. We would love to have you.
    Senator Carper. I will come back.
    Senator Barrasso. I know of the time commitments both of 
them have made to be here to discuss reducing diesel emissions 
in Wyoming and across the country, so I want to thank them for 
being here.
    I want to thank all of our guests.
    Today's hearing is on the efforts to protect the public 
health by reducing diesel emissions. I didn't have some of the 
statistics that you cited about the increased risk of heart 
attack and for every dollar spent, $13 saved. But obviously, 
the Diesel Emission Reduction Act, or DERA, has been 
instrumental in making those type of efforts successful.
    The program has awarded hundreds of thousands of dollars to 
States like Wyoming to retrofit, and you mentioned the specific 
word retrofit in your comments, retrofit school buses, trucks 
and heavy equipment. The program has our support and has 
bipartisan support. This program to me is a model of how 
environmental progress can be achieved through providing States 
the flexibility that they need to achieve environmental goals.
    This type of flexibility is not found in many of the new 
regulations that are coming out of the EPA these days. Let's 
look at what the Diesel Emission Reduction Act has achieved in 
Wyoming.
    In 2008, DERA awarded Wyoming $196,000 from the EPA through 
the DERA State Grant Program to implement a unique diesel 
emission reduction project. The funds provided for purchasing 
one new hybrid electric diesel-powered school bus for the 
Wyoming Department of Education, which is behind you. That bus 
was delivered and was put into use in Pinedale, WY. It is now 
being used in Green River, WY. It is scheduled to move to 
either Cheyenne or Casper to determine its best uses.
    Emissions and cost savings in fuel use are being tracked 
and the new hybrid electric diesel engine is expected to reduce 
fine particulate material emissions by 90 percent, NOx by 70 
percent, increase fuel mileage by 70 percent, and reduce 
operational costs by at least 50 percent to comparable diesel-
powered school buses.
    In 2009, there was an award of $235,000 to the Wyoming 
Department of Environmental Quality through the DERA State 
Program to purchase a second hybrid electrical diesel-powered 
school bus for the Wyoming Department of Education. This time, 
the bus used a different technology to generate hybrid power. 
This bus is currently being used in Pinedale to compare its use 
to the previous hybrid technology that was tested in 2008. The 
bus is expected to be moved to either Casper or Cheyenne at the 
end of the current school year to gather more urban collection 
of data.
    According to the Wyoming Department of Environmental 
Quality, similar emission reductions and cost savings as the 
first bus are expected and are being tracked for a final 
report.
    Then in 2010, there was a grant of $588,000 to through the 
DERA State Grant Program to match funds with Fremont County to 
purchase a new 2010 emission-compliant bulldozer, an excavator, 
and the picture is behind us. This project was designed to show 
that new diesel engine technology could be applicable for use 
in normally nonregulated off-road diesel engine applications.
    Both pieces of equipment replaced very old equipment and 
had essentially no emissions controls on them, what they 
replaced. The engines were required to be scrapped by the State 
in an effort to get that type of engine out of service. So the 
two pieces of equipment have been delivered and are in use in 
Fremont County today.
    The emission data being collected are expected to show an 
increased fuel efficiency of 25 percent, reductions in NOx by 
20 percent, particulate matter by 51 percent.
    So these are just a couple of examples in Wyoming, by no 
means all of the examples, and I think we will hear from all of 
our people testifying today. Additional funds have been used to 
retrofit dozens of buses, trucks and other heavy equipment 
around our State.
    So I look forward to working with you, Mr. Chairman, and 
the Members of this Committee in a bipartisan way to see that 
programs like this continue to have the support to succeed. I 
thank you, Mr. Chairman, for your interest and commitment to 
this program.
    Senator Carper. Thank you. Thanks for that statement, and I 
look forward to working with you on this and a lot of other 
stuff, too.
    Let me go ahead and introduce or reintroduce our panel, 
starting off with Mr. Robert O'Keefe, vice president of the 
Health Effects Institute. Where is that located? In Boston, OK.
    Next, Mr. Todd Parfitt. Again, as Senator Barrasso said, 
Mr. Parfitt serves as the Deputy Director of the Wyoming 
Department of Environmental Quality.
    Next, Mr. Robert Lanham, vice president of Williams 
Brothers Construction Company, recently awarded the National 
Clean Diesel Camping Pioneer Award by EPA for all his 
leadership to reduce diesel emissions.
    Where are you all from, Texas did you say? Houston. OK.
    Next, Allen Schaeffer. Mr. Schaeffer serves as executive 
director of the Diesel Technology Forum.
    Where are you all located? OK, Frederick, MD.
    Finally, we have Mr. Conrad Schneider, no stranger to this 
subcommittee or this committee, the advocacy director of the 
Clean Air Task Force.
    Very nice to see you, Mr. Schneider.
    Again, roughly 5 minutes for your statements and then the 
full context of your statements will be part of the record, and 
we will get started on the questions.
    Mr. O'Keefe, please proceed.

  STATEMENT OF ROBERT O'KEEFE, VICE PRESIDENT, HEALTH EFFECTS 
                           INSTITUTE

    Mr. O'Keefe. Thank you very much.
    Chairman Carper, Ranking Member Barrasso and other Members 
of the committee who will be reading this testimony later, 
thank you for the opportunity to testify before you today on 
the health effects of exposure to diesel exhaust.
    I am Robert O'Keefe, vice president of the Health Effects 
Institute. We are a nonprofit, independent research institute 
uniquely funded equally by EPA and industry to carry out 
independent research on the health effects of air pollution, 
including diesel exhaust.
    Sources of diesel, as you point out, are pervasive on the 
Nation's highways, and include trucks, buses, and in 
agriculture and construction, as well as rail and shipping. 
Given the numerous sources of diesel exhaust, population 
exposure can be widespread. HEI's 2010 review, Traffic-Related 
Air Pollution and Health, found that those living within 300 to 
500 meters of a major roadway are most likely to be exposed to 
traffic air pollution.
    The review found, remarkably, that 38 percent to 45 percent 
of the population in cities studied in the United States lived 
within this high-exposure zone. Urban industrial areas, 
including truck and bus depots, ports and constructionsites, 
can often have even higher concentrations.
    Diesel exhaust from older engines, as you pointed out, is a 
complex mixture of fine particles, including black carbon, 
thousands of organic and inorganic components and some 40 
hazardous air pollutants. It has been associated with health 
effects, including a range of respiratory symptoms, premature 
mortality, and potential links to lung cancer.
    HEI's traffic review expert panel found a causal connection 
between exposure to traffic-related pollution and asthma 
exacerbation in children and adults. For example, HEI Review 
Committee Member Dr. Bert Brunekreef found in his study that 
children attending schools near roadways with heavy diesel 
truck traffic had significantly higher incidence of wheeze and 
other respiratory ailments than those schools with lower diesel 
exposure.
    Diesel exhaust is also a significant contributor to the 
mixture of fine particles or PM2.5 and black carbon 
in the ambient air. A number of epidemiological studies have 
found associations between exposure to PM and increases in 
illness and premature death. EPA itself has concluded that 
PM2.5 is causally related to cardiovascular 
mortality and morbidity.
    Based on HEI analyses and companion evidence, EPA estimates 
that over 20,000 annual premature deaths could be avoided by 
replacing older diesel technology, on-road and non-road 
engines, with newer, cleaner ones.
    A number of national and international organizations, 
including HEI, have reviewed what we know from workers studies 
and from toxicology about older diesel engine exhaust and its 
possible association with lung cancer. Based on that evidence, 
the International Agency for Research on Cancer, the U.S. 
National Toxicology Program and USEPA have concluded that 
diesel from older engines is a likely human carcinogen.
    Thus, there is an extensive body of literature suggesting 
that particles, including black carbon and other exhaust from 
older technology diesel engines, can have significant effects 
on the lung and the heart.
    Having said that, with the advent of cleaner, low-sulphur 
fuels and new clean diesel technology, the way forward for 
diesel is exceptionally promising. In 2001, EPA promulgated the 
heavy duty on-highway diesel rules requiring significant 
reductions in fuel sulphur and in particle and nitrogen dioxide 
emissions. The diesel industry complied with this new 
regulation by developing advanced diesel technology, new 
particle filters and NOx controls.
    At the same time this occurred, the diesel industry and 
government, including DOE, the EPA and the California Air 
Resources Board, supported a unique product stewardship 
initiative at the Health Effects Institute and the Coordinating 
Research Council. It was called the Advanced Collaborative 
Emissions Study, and it was the most rigorous emissions testing 
ever done on new heavy-duty engines.
    The results of the testing of the emissions of these new 
diesel engines has been nothing short of dramatic. Emissions of 
fine particulate matter have been reduced by 99 percent from 
levels emitted by 2004 engines, only a generation before, and 
early 90 percent lower than the 2007 national emissions 
standards themselves.
    Emissions of carbon monoxide, hydrocarbons and air toxics 
are more than 90 percent lower than 2004 levels, and NOx, which 
of course contributes to the formation of smog, was 
approximately 70 percent lower, with more reductions to follow. 
This substantial over-compliance with EPA standards is a credit 
to industry and regulators alike.
    I have highlighted the negative health consequences of 
exposure to older technology diesel and the dramatic progress 
in producing new cleaner engines with particulate traps and 
advanced NOx controls that over time will penetrate the 
marketplace and result in cleaner air and improved health. 
Similar particle traps in companion technologies have now been 
applied as retrofits to existing vehicles, with similar 
reductions.
    There is a challenge, however. Diesel engines, as you 
pointed out, have a long life expectancy which will slow fleet 
replacement and emissions reductions. Through natural 
replacement, the U.S. EPA does not expect full fleet turnover 
for on-road engines until 2030. This may take even longer for 
non-road. Given the evidence of effects from older diesel 
technology and the fact that retrofit and replacement 
technology exists to reduce these emissions and effects now, 
can action be taken to accelerate this transition?
    Such an acceleration will help protect the current 
generation of Americans from the emissions of the legacy fleet 
of older diesels that will continue to operate on the Nation's 
highways and in its fields and workplaces for years to come.
    Thank you.
    [The prepared statement of Mr. O'Keefe follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Carper. Thanks very much. Those are impressive 
figures.
    Mr. Parfitt, please proceed.

STATEMENT OF TODD PARFITT, DEPUTY DIRECTOR, WYOMING DEPARTMENT 
                    OF ENVIRONMENTAL QUALITY

    Mr. Parfitt. Thank you, Mr. Chairman.
    As was mentioned earlier, my name is Todd Parfitt. I am the 
deputy director for the Wyoming Department of Environmental 
Quality. I would like to thank Chairman Carper and Senator 
Barrasso for the opportunity to be here and testify at this 
hearing today.
    Wyoming is a State rich in natural resources that provide 
significant amounts of the Nation's energy. As such, Wyoming's 
economy is largely dependent upon and driven by the mineral 
exploration and extraction industry. Wyoming recognizes and 
places great value on the protection of its natural resources. 
The mission of the Wyoming DEQ is to protect, conserve and 
enhance the quality of Wyoming's environment for the benefit of 
current and future generations.
    As we carry out our mission, we do so with the 
understanding that it must be done in a balanced manner, 
protecting our natural resources, while maintaining the State's 
economic strength and stability. Oftentimes, new environmental 
regulations fail to adequately recognize the impacts created 
for industries and for the State agencies charged with their 
implementation.
    This is not the case with DERA. Wyoming has successfully 
implemented voluntary programs that achieve reductions in 
diesel emissions from sources that are not covered under 
existing regulations. Voluntary programs like DERA are far less 
costly for the State to implement than traditional regulatory 
programs. This voluntary program has achieved desired 
reductions in air pollution without the negative implementation 
costs to both regulators and the regulated community. The DERA 
Program has been efficiently run by both EPA and the State with 
little negative impacts on State resources.
    Wyoming has implemented four projects through DERA that 
will reduce diesel emissions and yield public health benefits. 
These projects include the purchase of two hybrid electric 
diesel-powered school buses put into use in southwest Wyoming, 
the replacement of heavy equipment utilized at landfills. This 
project was possible because economic incentives to local 
governments were available through DERA at a time when budgets 
would not allow these equipment upgrades.
    The replacement and retrofit of 153 school buses, bringing 
65 percent of the State's bus fleet up to 2010 emissions 
standards. Last, the implementation of emission control 
solutions for non-road construction equipment used by industry 
servicing the natural gas fields in Sublette County, WY.
    Through a combination of DERA funds and industry 
contributions, nonregulated emissions reductions were 
successfully achieved as a result of engine retrofits, removing 
an estimated 744 tons of air pollutants per year.
    Diesel-fired engines were built to last and that is exactly 
what they are doing. All of the Wyoming projects implemented 
under DERA have resulted in the replacement or retrofit of 
older engines, some dating back to the 1980's. The outcome is a 
reduction of air contaminant emissions, including precursors to 
ozone pollution. All of this results in cleaner air and health 
benefits to the citizens of Wyoming.
    The public is exposed to pollutants associated with 
emissions from many sources. The emissions reductions resulting 
from implementation of DERA projects play an important role in 
improving air quality. This has clearly been an effective 
program in Wyoming with voluntary participation and significant 
contributions by both industry and local government.
    The Wyoming DEQ supports the EPA initiative to conduct a 
retrospective review of existing regulations to weed out 
unnecessary and unproductive rules and programs. DERA is not 
one of those programs. We believe that EPA and the States would 
benefit from slowing the pace of new rules to allow for a more 
thorough evaluation of costs and impacts of implementation on 
the States and industry.
    There are currently 99 new or revised rules under 
consideration by EPA in this year alone. EPA initiatives should 
strive to strike a balance between environmental protections 
and economic stability. By providing programs with State 
flexibility, environmental protection can be maximized while 
minimizing impacts to industrial growth and State budgets. DERA 
is a program that meets this criterion.
    When EPA publishes its new ozone standard, which is likely 
to be reduced from the current 75 parts per billion, many more 
areas in the west will be considered in nonattainment of the 
standard. DERA provides needed assistance in reducing one of 
the key ozone precursors, nitrogen oxides. This is an excellent 
example of a program that leads directly to pollution reduction 
and provides an important piece of the solution to meeting a 
new standard.
    With that, I would like to thank Senator Carper and Senator 
Barrasso for the opportunity for this testimony.
    [The prepared statement of Mr. Parfitt follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Carper. Thanks, Mr. Parfitt. Well done.
    Mr. Lanham, please proceed.

 STATEMENT OF ROBERT LANHAM, VICE PRESIDENT, WILLIAMS BROTHERS 
                        CONSTRUCTION CO.

    Mr. Lanham. Mr. Chairman and Members of the committee, 
thank you for the opportunity to present the construction 
industry's perspective on reducing diesel emissions. I have 
said earlier, I am Bob Lanham, vice president of Williams 
Brothers out of Houston, TX. I am here today representing the 
Associated General Contractors of America. I have been AGC's 
Highway Division Chairman in years past. I have also served as 
the association's environmental committee chair.
    I am proud to report, in addition to what you have already 
said, Mr. Chairman, in your kind introduction, that EPA has 
recognized us as a Pioneer in the national clean diesel effort. 
EPA has also recognized us and singles out our company as a 
case study on how to perform emission reduction projects. AGC 
has worked side-by-side with the EPA over the last 10 years in 
every major Federal initiative with regards to clean diesel in 
an effort to improve air quality while trying to protect the 
construction industry from serious economic harm.
    Through all these initiatives, we sought four goals: No 1, 
to identify appropriate incentives for retrofit; No. 2, secure 
Federal funding for such retrofits; No. 3, inform our 
constituency, our member chapters, and get the word out with 
regards to the funds available; and No. 4, to work with the 
Congress to try to enable a Federal tax incentive for diesel 
retrofit.
    Among all these initiatives, AGC also serves as a co-chair 
of a Federal Advisory Non-Road Construction Work Group, so our 
leadership extends on many fronts with regards to the subject. 
ABC was an original supporter and played a significant role in 
the development of DERA, the Diesel Emission Reduction Act. We 
continue to champion amendments to improve the process, make 
more funds available for private sector participation, and 
ensure a full funding of the program.
    AGC chapters have been awarded significant DERA grants to 
aid their particular efforts. Diesel equipment is an essential 
element of a contractor, especially a transportation contractor 
like myself. Investment in equipment ranges from small 
equipment at tens of thousands of dollars to large equipment 
that is in the millions.
    Regardless of the size of the contractor, the majority of 
our net worth is involved in the value of that equipment. Net 
worth provides financial security demanded by our banks and 
bonding companies. Solutions like we are talking about today 
does something special. It preserves that value of equipment; 
preserves our ability to protect our investment; and also give 
us and retains our ability to conduct business, wonderful 
solutions that permit these things.
    Although Federal standards are improving, significant 
emission reductions are now in the new models coming off the 
assembly line. As you said, Mr. Chairman, diesel equipment 
lasts a long time. We think there is ample opportunity as the 
existing fleet develops and exhausts its economic life. There 
is public good that can be derived by addressing those 
emissions. We worked with the Clean Air Task Force to develop 
what we call our clean construction principles. This 
collaboration resulted in agreement which conserves for our 
benefit the competitive bid system in our industry, preserves 
the value of our fleet, and supports our efforts to try to 
address transportation needs, and it compensates businesses for 
any associated cost.
    We are pleased, Mr. Chairman, that this became a big part 
of your bill the Diesel Construction Act of 2011.
    While the economic life of equipment is being exhausted, we 
would also like to encourage as we implement these things, 
based on my experience, and we have done nearly 400 emission 
reduction projects, that there are, as anything new, some 
cautions and concerns or challenges that will be faced.
    Some of these things, one, these technologies are not 
cookie-cutter, not something you can go down to the shop and 
buy. There will be technology challenges, logistical 
challenges. There are also safety considerations that we need 
to address, as well as the essential performance of the piece 
of equipment.
    But despite these challenges, these things with intelligent 
people are problems that can be addressed and overcome. We, 
realizing that, embrace this clean construction proposal 
proposed by Senator Carper. It strikes a careful balance 
between helping pay for installation and ultimately the 
contractors will assume the long-term maintenance of these 
devices, and allow States to apply value-based judgments in 
this program on a case-by-case basis to allow both the owners 
to clean up equipment on public projects and allow it to do it 
in a best possible manner to respect the taxpayers.
    We are pleased, Mr. Chairman, to support the Clean 
Construction Act of 2011 and look forward to working with you 
in the legislative process.
    [The prepared statement of Mr. Lanham follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Carper. That was exactly 5 minutes. Thanks so much. 
Thanks for your encouragement and for your good stewardship and 
for setting a good example for the rest of us.
    Mr. Schaeffer, please.

  STATEMENT OF ALLEN R. SCHAEFFER, EXECUTIVE DIRECTOR, DIESEL 
                        TECHNOLOGY FORUM

    Mr. Schaeffer. Thank you, Chairman Carper, Senator 
Barrasso. Good afternoon. My name is Allen Schaeffer and I am 
executive director of the Diesel Technology Forum. We are a 
not-for-profit educational group representing the Nation's 
leading diesel engine and equipment manufacturers, fuel 
refiners, and companies that make emissions control technology.
    We are here today because diesel is the workhorse of the 
U.S. and global economy. It is the prime mover, powering over 
90 percent of the commercial trucks, more than three-fourths of 
all transit buses, 100 percent of freight locomotives and 
marine work boats, and two-thirds of all farm and construction 
equipment.
    Though not the subject of today's hearing, I would be 
remiss without mentioning the newest generation of clean diesel 
cars, which are providing the greatest effort toward reducing 
oil consumption and greenhouse gases, more than any other 
affordable drive technology today.
    You have our detailed written statement. I am going to 
deviate from that. I would like to focus our attention on two 
attachments to our testimony, the first being these graphs that 
highlight the journey of transformation of clean diesel 
technology. This journey began in 2000 in what was then a time 
of a stretch goal of making diesel engines near zero emissions. 
Ten years later, I am happy to report that manufacturers of 
diesel engines have met the challenge. Along with cleaner 
diesel fuel, they are now delivering technology that is near 
zero emissions for highway trucks, and the same kind of 
technology is coming for the off-road engines and equipment as 
well.
    Thanks to these advancements, in some U.S. cities the air 
coming out of a class 8 heavy-duty clean diesel truck is 
cleaner than the air going into it. Not only are today's diesel 
truck engines near zero emissions, they are, on average, using 
5 percent less fuel.
    There are more challenges ahead and industry is working 
with EPA and NHTSA right now on the first-ever greenhouse gas 
rules for these vehicles.
    A hallmark of diesel engines has been the process of 
continuous improvement, each year making advancements in 
technology. The new generation is certainly far away from the 
older generation. I would like to focus the rest of my remarks 
on the opportunity to make improvements in existing engines and 
equipment, and we believe they are significant ones.
    Mr. Chairman, you and other congressional leaders 
recognized early on, back in April, 2004, this opportunity, and 
the value and importance of diesel engines and equipment to the 
economy. You brought together disparate groups and 
organizations to work together to produce what we know today as 
the Diesel Emissions Reduction Act. You cited its benefits, $13 
of return on investment for every $1 put into it, and a 
leverage factor of $3 on the table after $1 of Federal 
investment.
    This is a really important program because it addresses the 
things that you work hard on here every day, the big Es: 
environment, energy and the economy. In just the first year 
alone, DERA resulted in 46,000 fewer tons of NOx emissions, 
465,000 fewer tons of CO2, and saved 3.2 million 
gallons of diesel fuel, which resulted in a savings of $8 
million to our economy.
    Now, imagine for a moment, if you might, what we could have 
achieved had DERA been fully funded over those first 5 years. 
That would have been a $1 billion Federal investment, leveraged 
to a $3 billion investment; thousands more contractors, 
truckers and others would have upgraded their engines and 
equipment, creating demand for the technology and, in turn, 
creating jobs in manufacturing and service segments, resulting 
in tens, if not hundreds of millions of gallons of fuel savings 
and hundreds of thousands of more tons emissions could have 
been reduced.
    We have heard from Mr. Parfitt about the success stories of 
DERA and there are 49 States' other stories just like that. To 
make sure we keep having these success stories, we have a 
serious challenge ahead, and that is to restore the Diesel 
Emissions Reduction Act and continue this unique program.
    DERA is the one program that should be accelerated, not 
terminated. There is a well-established continuing need for 
DERA. As you have just heard from Bob Lanham, the recent 
recession has substantially altered the economic landscape of 
many large and small businesses and industries that use diesel 
technology as the tools of their trade. Equipment acquisition 
and retention cycles have been adversely affected. For example, 
according to 2010 data from R.L. Polk, over the last 5 years, 
the average age of a class 8 commercial truck has increased by 
1.7 years. As a result, the need for upgrading engines and 
equipment is more important today than it was 5 years ago.
    Voluntary incentive-based programs are important policy 
tools for the future. Given the economic circumstances, we 
believe that voluntary programs make the most sense for moving 
forward with upgrading and modernizing existing engines and 
equipment. Manufacturers of diesel engines and equipment 
recognize and respect the significant value that contractors, 
truckers and other owners place in their equipment and the 
decisions surrounding its purchase and use.
    Equipment managers went flexibility and choice. They want 
the ability to manage their business in a way that enables them 
to be good employers, efficient producers and good stewards of 
the environment. A voluntary incentive-based program has proven 
to be the best way to achieve these goals.
    In conclusion, diesel's combination of power density, fuel 
efficiency, performance reliability, durability and 
environmental performance are still unmatched today by any 
other fuel or technology. Clean diesel technology is now the 
new standard and is positioned to play a role in our 
sustainable future.
    With significant opportunities for preserving the value and 
performance of the many existing out there, DERA works for many 
reasons. Because it is voluntary and incentive-based, it offers 
carrots instead of sticks. It provides flexibility to both 
States and owners and operators of equipment. It is based on a 
results-oriented competitive process. It has fostered 
understanding of the practical issues that lie at the 
intersection of environmental goals and real-world business 
decisions, making distinctions between what is technologically 
possible and economically practical. It encourages private and 
local investment, and finally, rewards the American public with 
a substantial return on its investment, as much as $13 for 
every dollar contributed.
    Congress and you, Mr. Chairman, have played a visionary 
role in establishing this voluntary incentive-based program 
that has proven to be wildly effective. If ever a program made 
sense to continue and has the sustained support of 
environmental, labor, public health and industry groups, this 
is the one.
    We hope that we can work together to retain and restore 
DERA.
    [The prepared statement of Mr. Schaeffer follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Carper. From your lips to God's ears. We will hope 
that the request will be granted. Again, I just want to say, he 
is not here, but George Voinovich, as you know, played a huge 
role in getting DERA on the table, out there, something to be 
debated and voted on.
    I remember he came to me, Senator Barrasso, he came to me I 
want to say maybe 3 or 4 years ago and said he had this idea on 
the Diesel Emission Reduction Act. He was looking for a 
Democrat cosponsor to be the lead Democrat, and it took about 5 
minutes to convince me. We introduced the bill and within 40 
days it was adopted into law. I have never seen anything go 
that fast from a conversation to being enacted into law, so 
pretty amazing. It had the kind of support there which included 
not just George and I, who worked on a lot of stuff together, 
but Jim Inhofe and Barbara Boxer; just an extraordinary 
partnership.
    So we have got to keep it going.
    All right, I almost said Senator Schneider, Conrad 
Schneider.

  STATEMENT OF CONRAD SCHNEIDER, ADVOCACY DIRECTOR, CLEAN AIR 
                           TASK FORCE

    Mr. Schneider. Mr. Chairman, thank you very much, Senator 
Barrasso. Good afternoon. My name is Conrad Schneider. I am the 
advocacy director of the Clean Air Task Force, and I appreciate 
the opportunity to speak to you today.
    Based in Boston, we are a national nonprofit environmental 
advocacy organization whose mission includes reducing adverse 
health and environmental impacts from diesel engines.
    Today, I would like to talk to you about two ways the 
Federal Government can reduce the threat posed by diesel 
exhaust. One is fund DERA and two is enact the Clean 
Construction Act of 2011 as part of the next transportation 
reauthorization bill.
    DERA is a highly successful program, as you have heard, and 
enjoys broad bipartisan support. Clean Construction, which now 
has been endorsed by us, the Clean Air Task Force and the 
Associated General Contractors, provides a unique opportunity 
to integrate and streamline clean air measures into project 
delivery, while delivering support for contractors to clean up 
dirty equipment and protect public health.
    We believe that devoting up to 1 percent of the cost of 
transportation projects to clean air is not too much to ask to 
help protect the health of our citizens. Mr. O'Keefe covered 
the health effects of diesel, so I won't repeat them here 
except to say that fine particle pollution produced by diesels 
causes 21,000 deaths per year, according to our report from 
2005, Diesel and Health in America, and nationally, diesel 
exhaust poses a cancer risk that is three times higher than the 
risk from all the air toxics tracked by EPA combined.
    With respect to DERA, while the U.S. EPA has mandated 
tighter emissions rules on new diesel engines, emissions from 
the current fleet remain uncontrolled. As the Diesel Technology 
Forum has noted, the rate of turnover of the fleet to new 
cleaner engines has been slowed due to the recession, as sales 
of new cleaner diesels have plummeted. As a result, older, 
dirtier diesels will be doing more work and be with us for 
longer than expected, which means more pollution.
    In 2005, Congress sought to provide States and localities 
with new tools to help meet Clean Air Act requirements. DERA 
was passed overwhelmingly and quickly as a federally sponsored 
voluntary retrofit initiative to reduce these emissions. The 
program was initially authorized at $200 million a year for 5 
years, or $1 billion. Since that time, about half that amount 
has been appropriated for DERA, $300 million through the 
Recovery Act.
    However, the President's 2012 budget has proposed to zero 
out the program. We believe that this would be a mistake. Since 
its inception, EPA estimates that the Federal appropriations 
for DERA has cleaned up 50,000 diesel vehicles, resulted in the 
reduction of thousands of tons of fine particulate matter, and 
created 9,000 jobs.
    The continued need for DERA has recently been acknowledged 
by the Obama administration. In her May 9 letter, Senator 
Carper, to you, EPA's Assistant Administrator McCarthy admitted 
that continuing DERA would provide a cost-effective way to 
address the existing fleet and will deliver immediate public 
health benefits. EPA Administrator Jackson recently testified 
similarly in answer to questions before the full committee.
    Throughout the program's history, DERA has enjoyed strong 
bipartisan support, most recently demonstrated last December 
when Congress took the extraordinary step of reauthorizing DERA 
during the lame-duck session. DERA is backed by a uniquely 
broad coalition of environmental, public health, industry, 
labor, State and local government groups. States and 
localities, and all of us, support additional funding for DERA. 
It is our hope that Congress will continue to provide 
leadership on this issue and we urge you to allocate $50 
million to DERA for Fiscal Year 2012, which is equal to the 
2008 level.
    The DERA coalition has also requested that Congress support 
the President's budget request of $300 million for State and 
local air agency grants in helping them to meet Clean Air Act 
requirements and discharge them.
    With respect to clean construction, one sector that has 
been underserved by DERA and other existing programs is the 
construction sector. Construction contractors are not always 
well positioned to take advantage of these programs, which have 
required a competitive grant process.
    There is a better way, we believe: clean construction as 
part of project delivery. Modern pollution control equipment is 
being used today across the country in building transportation 
projects that ensure that no harm is done to the air quality in 
communities where these projects are being accomplished.
    Originating with the Big Dig in Boston, and in the Lower 
Manhattan reconstruction after the attacks of 9/11, today clean 
construction contract specs have been adopted by New York City, 
New York State, Illinois, Rhode Island and most recently by 
Mayor Daley in the city of Chicago and by Governor Christie in 
New Jersey.
    Senator Carper, you crafted the Clean Construction Act of 
2011, which will reduce these emissions by helping to clean up 
on- and off-road construction equipment working on federally 
funded transportation infrastructure projects located in areas 
with poor air quality. The bill accomplishes this by ensuring 
that diesel construction equipment employs modern engine and 
pollution-reduction technology through a requirement and 
funding.
    As a policy road map, the Clean Air Task Force and 
Associated General Contractors distilled a set of clean 
construction principles based on our experiences at the State 
level, and those were embodied in your bill and we both endorse 
and congratulate you on the introduction of the bill today. We 
recommend that Congress adopt this approach as part of the 
transportation bill reauthorization to help provide retrofit 
re-power, upgrade equipment, and provide maximum achievable 
reduction of diesel particulate matter as an eligible project 
expense through a change order process, a process with which 
States and contractors are familiar.
    In conclusion, let me just say that to maintain strict cost 
controls, the bill requires that no more than 1 percent of a 
transportation project's cost must be used by States to upgrade 
this equipment. The Clean Air Task Force has commissioned case 
studies on 10 projects and the results have consistently shown 
that project equipment can be cleaned up for no more than 1 
percent to 1.5 percent of the project cost.
    So in conclusion, let me just say thank you for the 
opportunity to testify in support of clean diesel in these two 
important Federal statutes, and I look forward to working with 
you in securing funding for DERA and including clean 
construction in our Nation's next transportation bill.
    Thank you.
    [The prepared statement of Mr. Schneider follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Carper. All right, Mr. Schneider, thank you very 
much for your testimony, for your enthusiasm, and for your 
encouragement.
    I have a question I would like to lead off with, but before 
I do that, let me ask unanimous consent to enter into the 
record a handful of items here. Let me just read through these 
quickly, but I ask unanimous that the following items be 
submitted for the record: first, a joint letter from the 
Associated General Contractors of America and the Clean Air 
Task Force in support of the Clean Construction Act of 2011; 
and second, a statement by Mr. Timothy Reagan, senior vice 
president of Corning, Incorporated, regarding cost-effective 
ways to reduce diesel emissions; third, a statement from Mrs. 
Suzanne Malec-McKenna, commissioner of the Department of the 
Environment for the city of Chicago regarding similar clean 
diesel construction efforts going in her city as the ones 
proposed in the Clean Construction Act of 2011; fourth, 
responses from the Environmental Protection Agency that we had 
sent them on DERA; and finally, a statement from Mr. Larry 
Schafer, senior advisor to the National Biodiesel Board 
regarding the advancement of biodiesel.
    Without objection, these will be admitted into the record.
    Do I hear objection?
    Senator Barrasso. No objection.
    Senator Carper. Pretty quiet. OK, good. Hearing none, so 
ordered. Thank you.
    [The referenced documents follow on pages 78-95.]
    Senator Carper. OK, first question if I could, a question 
to Mr. O'Keefe and I might follow it up with asking Mr. 
Schaeffer, maybe Mr. Parfitt as well, but the initial question 
to you, Mr. O'Keefe.
    Could you just take a minute or two and discuss why small 
particulate pollution is harmful to our health? Could small 
diesel exhaust particles be especially dangerous to public 
health because they are encased with toxins?
    Mr. O'Keefe. I would be glad to. The particulate component 
of diesel exhaust is PM2.5 and it is a pollutant of 
special concern.
    Senator Carper. Why don't you tell us, why do they call it 
PM2.5?
    Mr. O'Keefe. PM2.5, thank you, goes to the size 
of the particle. The range of particles generally regulated 
goes from ultra-fine particles, which diesel is also a 
significant source of, through PM2.5 which diesels 
also put out, up to what is known as the coarse fraction, the 
difference between PM2.5 and PM10 which 
are larger granular parts of the particulate. They tend to have 
somewhat different health effects, although it is at this point 
somewhat hard to distinguish, particularly between ultra-fine 
and PM2.5. They are generally all known as fine 
particles.
    The simple statement is that fine particles are often made 
of carbon and other toxins. They are small enough that they can 
be absorbed relatively deeply into the lung and can be absorbed 
into the system and have been associated with a range of 
cardiovascular and respiratory effects. These are documented 
both in studies of short-term effects of particles where when 
air pollution goes up or down on a particular day, one can 
observe a corresponding increase or decrease in mortality. 
There is a key HEI study called the National Mortality, 
Morbidity and Air Pollution Study, or NMMAPS, of the 90 largest 
U.S. cities that documented these effects from daily exposure 
to particles.
    But also longer-term studies, chronic studies, as evidenced 
by the American Cancer Society Pope study, which was a study 
originally of over some 400,000 Americans and exposure to long-
term effects of particles. This is really the seminal study for 
regulation that looks at particulates, as I said, of which 
diesel is a major source. It found that there are significant 
cardiovascular and respiratory effects associated with 
particles, including ischemic heart disease, which can reduce 
blood flow to the heart and potentially cause heart attack.
    Senator Carper. All right, thank you.
    Let me just followup on that, if I could, with Mr. 
Schneider and Mr. Parfitt, OK? The followup, could you also 
take maybe a minute apiece and discuss for us how dirty diesel 
engines contribute to nonattainment areas for particulate 
matter and ozone?
    Second, how are the emissions from old diesel engines 
contributing to nonattainment areas, compared to newer 
vehicles, powerplants and other sources?
    Do you want to go first, Mr. Schneider?
    Mr. Schneider. I would be happy to address that, if I can 
go first, thanks.
    First of all, there are many, many different sources of 
particulate matter. You mentioned a few right there. As 
powerplants are getting cleaner as a result of some of the EPA 
regulations that are coming out, diesels are becoming the 
largest fraction of the remaining particulate matter. 
Powerplant pollution has been cleaned up as a result of EPA 
regulations in the east that have to do with health-based 
standards and visibility regulations in the west, to the point 
where they are about half of what they were just 10 years ago. 
We have documented what the health benefits have been from 
that.
    So it is a success story, and through the Clean Air 
Transport Rule, there are going to be even more reductions.
    When we did our study that pegged diesel deaths at about 
21,000, at the time we did it powerplants were responsible for 
about 24,000 deaths. Now, powerplants deaths are about down to 
13,000 deaths and they are going down from there. Over time, as 
you have heard, diesel deaths will go down, too, as the new 
engines come into the system, but it is going to take 30, 40 
years for that to play through, as opposed to the regulations 
on powerplants.
    So if you are a State and you are trying to meet your Clean 
Air Act requirements, attainment goals, those are happening 
right now. Those requirements are in the very near future, not 
20 or 30 years out. So there need to be strategies that address 
diesel particulate pollution to help State regulators who are 
in nonattainment areas deal with those.
    Whether it is DERA or whether it is the Clean Construction 
Act and so forth, you have to deal with each particular sector 
as appropriate for that particular sector and push those 
emissions down to help regulators meet their targets.
    So that is the basic thing, and just the math is such that 
diesel is going to be the biggest quotient that portion is 
going to have to be addressed.
    With respect to the difference between the old and new 
vehicles, Mr. Schaeffer has a great graph on that as a part of 
his presentation materials there. The difference between an 
uncontrolled diesel engine and one that is fitted with a 
particulate filter is really, they are certified at 85 percent 
cleaner for particulate. But our in-use testing has shown 
probably close to 90 percent, 95 percent cleaner as a result of 
that.
    The statement that Mr. Schaeffer made earlier about how the 
air going in sometimes is cleaner coming than it was going in, 
we have actually demonstrated that in the field. These 
particular filters are actually air filters. If you are in a 
polluted area, polluted air goes into the engine and comes out 
cleaner than it was when it went in, which is pretty amazing.
    Senator Carper. When he made that statement, I leaned over 
to Senator Barrasso. I said, you know, if we could get enough 
of those out there and operating, we could have a lot of clean 
air.
    [Laughter.]
    Senator Carper. There is a point of diminishing returns, I 
suppose.
    Mr. Schneider. Yes.
    Senator Carper. Mr. Parfitt, do you want to take a shot at 
that one, please?
    Mr. Parfitt. Yes, thank you, Mr. Chairman.
    With respect to how the replacement and retrofit of engines 
in ozone nonattainment areas is beneficial, the emissions from 
these construction vehicles, heavy equipment, out in the 
nonattainment areas, I am particularly referring to southwest 
Wyoming, related to ozone formation, these pieces of equipment 
emit nitrogen oxides and volatile organic compounds, which are 
precursors to the development of ozone.
    The work that we have done with the retrofit of heavy 
construction equipment in this area has been an important part 
of getting a handle on the reduction of ozone formation amongst 
other things and other programs that we have in place right now 
to address ozone formation. DERA is a key program to addressing 
that. We were able to retrofit 36 engines in that area and 
achieve significant reductions. The point I would like to make 
is that there are several other pieces of equipment that could 
be retrofitted to further reduce those conditions that lead to 
the constituents that are precursors to ozone.
    As far as the old versus the new vehicles, as we have 
demonstrated, there are significant reductions in particulate 
matter, reductions of the 2.5 particulate matter of 90 percent 
in some instances. It really depends on the type of engine that 
you are replacing, but you do realize significant reductions in 
both nitrogen oxides and particulate matter.
    Senator Carper. All right. Thanks so much.
    Senator Barrasso.
    Senator Barrasso. Thank you, Mr. Chairman.
    Mr. Schaeffer, in reading your testimony, you make 
reference to the Wyoming Department of Environmental Quality. I 
know they used $1.1 million of DERA funding and did a $2.3 
million project in Pinedale, WY. The program provided engine 
upgrades in construction equipment serving the natural gas 
fields in Pinedale. As you know, Pinedale has had some air 
quality issues that the State and the community and employers 
are all trying to address.
    I understand that the project resulted in really 
significant reductions in diesel emissions, a reduction of 423 
tons of NOx and 48 tons of particulate matter, and 47 tons of 
hydrocarbons, and 226 tons of carbon monoxide. So I don't know 
if you or maybe Mr. Parfitt would care to elaborate in more 
detail on the success of that effort in providing the cleaner 
air in Pinedale?
    Mr. Schaeffer. If I could, and thank you for the question, 
Senator Barrasso. Just a comment about some aspects of that 
project, and then a broader statement about the solutions that 
are available.
    We think of retrofit in a very broad sense. There are many 
ways to get lower emissions our existing engines and equipment. 
The situation that you are citing specifically in Wyoming 
involved a range of things, including engine re-powers. This is 
an example of preserving the value in machines where we take an 
engine out and put a newer model in that is going from a tier 
zero or perhaps an unregulated machine in some of the very, 
very large equipment, to a tier two or even a tier three level 
technology. Depending on the circumstances, they are different 
in every machine. That yields a tremendous benefit, as you have 
outlined, for emissions reduction.
    The other incredible value there, though, is to the 
operator, because you now you have provided the operator 
substantial value extending the life of his equipment, and he 
is probably getting a much better performance out of the 
equipment and lower fuel consumption. So he is feeling the 
economic benefits. The environment is feeling the clean air 
benefits.
    Senator Barrasso. Mr. Parfitt, I don't know if you want to 
add any more?
    Mr. Parfitt. Yes, thank you, Senator.
    In addition, I would like to add that one of the successes 
of this program, outside of the actual reductions in emissions, 
was the voluntary effort coming forward by the operators. Not 
only did DERA contribute funds to these retrofits and upgrades, 
but also industry made significant contributions through not 
only direct contributions from those operators, but also 
through the Jonah Infill office, which is associated with that 
particular development, to the tune of about 46 percent of the 
total cost of the project.
    Senator Barrasso. You used the words, the voluntary effort, 
in terms of financing. Also I think in your written testimony 
you had said that voluntary programs like DERA are far less 
costly for the State, for you as deputy director of the 
Department of Environmental Quality, less costly for the State 
to implement than traditional regulatory programs or standards 
coming out of Washington. Can you comment on that a little bit?
    Mr. Parfitt. Yes, and I guess I would make two points.
    The first is this is something that has been recognized by 
the States and currently we are engaged in discussions with EPA 
through ECOS, the Environmental Council of States, to look at 
the cost of rules that get passed down to States, and how we 
can take a closer look at that to reduce the impacts to the 
States when it comes to implementation of these programs as 
they are passed down.
    As we have new regulations that get passed down to the 
States, we have to look at what the costs are, and those costs 
are in staffing for compliance and inspections; for developing 
new rules; conducting hearings and so forth. So when we have 
voluntary programs like this, we don't have those associated 
costs that normally come with some of these new regulations.
    Senator Barrasso. That kind of leads to my next question, 
because you talked about in your testimony that oftentimes the 
new environmental regulations fail to really adequately 
recognize the impacts created for industry and for our State 
agencies that are ultimately charged with implementing these 
things.
    So I know you just gave us a couple of examples. Any others 
that you could think of?
    Mr. Parfitt. Well, there is one example where the rule is 
under consideration right now for a sulphur dioxide 1-hour 
standard. Where the proposal is right now is that nonattainment 
zones with the 1-hour standard would be established through 
modeling. This is a deviation from the typical practice of 
establishing nonattainment zones through actual monitoring.
    Our concern with that would be that you can designate an 
area in nonattainment through modeling efforts, but you would 
have to establish monitoring to remove the nonattainment 
status. What that means is that the States would be left with 
the task of setting up monitoring stations, which are very 
expensive, to make those determinations.
    Senator Barrasso. You also mentioned the EPA is soon to be 
issuing new ozone standards, which you said may put many areas 
of the west in nonattainment. I am the Chairman of the 
Republican Western Caucus, so those are obviously issues that 
we have concern about.
    So could you explain for the committee what the standard's 
impact on Wyoming communities and Wyoming's Department of 
Environmental Quality are going to be?
    Mr. Parfitt. Sure. Right now, we have one area in 
southwestern Wyoming where we have had some nonattainment 
issues with ozone. If the standard is lowered, there would be 
more areas of the State, moving over in to the eastern parts of 
Wyoming, that would fall into nonattainment depending on where 
the new standard comes out.
    One of the things that needs to be recognized in the 
western States is that we are dealing with wintertime ozone. 
This is a little bit different than what we are traditionally 
concerned about with ozone, which is summertime in urbanized 
areas. So in recent years, we have been doing a lot of research 
to understand why ozone forms in the wintertime in the areas of 
Wyoming where it does. There are many, many variables involved.
    Senator Barrasso. OK.
    Mr. Schaeffer, if I could, in the testimony earlier, you, 
and I think all of the witnesses, said that DERA is a program 
that works, and it is a program that has been a success. The 
Chairman and I have stated the program is a success. It has 
bipartisan support. It was begun in a bipartisan way. But the 
President has zeroed out funding for the program in Fiscal Year 
2012.
    I don't know if you can explain the phenomenon of what has 
happened here, why this has happened, or if you or anyone on 
the panel can explain this, why we are in this situation?
    Mr. Schaeffer. Thank you for the question, Senator, and 
that is a difficult question, not knowing the priorities in 
decisions that were made within the Administration, both at EPA 
and within the Office of Management and Budget.
    I think, based on our assessment of that, that there is 
really some faulty interpretation. As I pointed out in my 
statement, the continuing need is pretty well justified and 
fairly well documented in terms of the number disparity of what 
DERA was able to accomplish in its first period, the first 5 
years, with regards to what is remaining out there.
    We have 11 million pieces of equipment. I would say that 
not all of those would be eligible for retrofit because they 
may be too old or used in a way that would not provide the 
right technology fit, but it is a big number. We are not sure 
about why that might be. I think at this point, it is really an 
issue of how do we move forward and how do we restore not only 
the goodwill we have with DERA, working with such a broad-based 
coalition, and the Administration, which has been a valued 
partner here.
    I think this is a decision that was looked at only on a 
dollars basis and not on a practical and what-makes-sense 
basis.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    Senator Carper. Let me just followup and question back and 
forth with Senator Barrasso and Mr. Parfitt.
    I asked my staff, other than particulate matter, are there 
other pollutants that have national air quality standards, in 
offering our 2011 construction equipment legislation we are 
unveiling here today? The point is that in order to require 
that up to 1 percent of transportation funds in an area be used 
for air pollution, that requirement cannot be triggered by 
nonattainment in ozone; could not be triggered by nonattainment 
in carbon monoxide or nitrogen oxide or sulphur dioxide or 
lead; only on particulate matter. Is that correct? That is my 
understanding.
    I see people nodding their heads. Yes?
    Mr. Lanham. As I read, yes, sir, I agree with that.
    Senator Carper. Yes, that is the intent. The amount of 
money that could be spent would be a maximum of 1 percent of 
transportation funding, only if it is triggered by 
nonattainment for particulate matter, for PM2.5.
    So if areas are in noncompliance for ozone or carbon 
monoxide or nitrogen oxide or SOx or sulphur dioxide or lead, 
that doesn't trigger the 1 percent requirement. So I just want 
to be clear on that. If the cost for attainment is less than 1 
percent, say half of a percent or something, that is how much 
could be spent.
    Let me just ask a question. For those who might not be 
enamored with the clean construction legislation that we are 
introducing today, would you just share with us what some of 
their concerns might be? Then for the panel, if you feel 
comfortable, how would you address or rebut those concerns?
    Anybody at all? There may not be any concerns that you are 
aware of, so it would be a pretty short answer. Anybody?
    Mr. Schaeffer. Mr. Chairman, we have not seen your 
legislation. It has been introduced today, from what we have 
heard. As we have heard our colleagues testify to here, it 
sounds like a very positive effort and program that would 
expand the benefits of clean diesel technology in the 
construction sector. We would be happy to take a look at it and 
provide some comments to you and your staff.
    Senator Carper. All right. Thanks.
    Anybody? Mr. Lanham?
    Mr. Lanham. Senator, yes sir. Having been involved with 
similar discussion of this in State and local levels and very 
similar, it is easy for us in the policy discussions, and 
technology is extremely sophisticated, and where we find often 
difficulties in implementation. I think we have one mind and 
philosophy on this is the details and getting into the 
technology, is unilateral application.
    We have found, and I think Allen alluded to it, that there 
are some applications that don't fit. As we implement, we need 
to recognize those things and tailor them because we want to 
see this thing succeed. We don't want to see a lot of horror 
stories come back about what didn't work. We want to hear about 
what did work.
    I think if we put our heads together, we can meet some of 
these logistical concerns. We have done 175 re-powers as a 
company and it took us 2\1/2\ years to accomplish that. With 
our equipment support staff and the manufacturers out there 
that were supporting us, it took two and a half years just to 
get that.
    So the infrastructure that exists to support this effort 
has some constraints that give us pause as we full-scale 
implement this. How ready are they to support? There is a ramp-
up concern. There will be some logistics issues that we will 
have to address as we move forward.
    Senator Carper. All right. Great. Thank you.
    I have a question here for Mr. Schaeffer, if I could. In 
your statement, I believe you claim ``Clean diesel technology 
is making a bigger contribution toward reducing oil consumption 
and greenhouse gases, more than any other affordable drive 
technology today.'' That is quite a statement.
    Could you just elaborate on that, please?
    Mr. Schaeffer. I can. As I mentioned at the outset, that is 
not the subject of the hearing today, but the reference is to 
the new generation of clean diesel cars, which are on average 
30 percent more energy efficient than their gasoline 
counterparts. To make a long story short, the clean diesel car 
technology is able to achieve that 30 percent benefit no matter 
where you are driving, whether you are on I-95 from here to 
Wilmington or whether you are in Wilmington and stuck in 
traffic behind that bus, like you were. So it is getting that 
full range of benefit of technology and fuel economy, no matter 
where it is operating.
    Contrast that with hybrid technology that may only get very 
high fuel economy if you are in a lot of urban operation, or 
contrast that with a plug-in hybrid electric which has a very 
limited range, which works well if you are within the range of 
the charging area, but not well if you are driving between 
Wilmington and Wyoming.
    Senator Carper. OK. Do you know how far it is from 
Wilmington to Wyoming?
    Mr. Schaeffer. I should know, but I don't, unfortunately.
    [Laughter.]
    Senator Carper. I have fun with my colleagues Senator 
Barrasso and Senator Enzi, who are from the State of Wyoming, 
but there is a town called Wyoming, DE. Not infrequently, I 
will say to them, like, I was just in Wyoming this past 
weekend, and I will say to them, I was just in Wyoming 
yesterday or the day before yesterday. You were? What were you 
doing in Wyoming? I said, well, I was just coming out of Dover 
and it was like right there to go through.
    But anyway, Wyoming is a great place, and a great place, 
actually, for Little League baseball, if you can believe that.
    I want to ask a followup question if I can, maybe one for 
Mr. Schneider and then one for Mr. Lanham, if I could.
    But for Conrad Schneider, given the limited resources, do 
you believe that the DERA program has been able to adequately 
address dirty diesel emissions from construction equipment on 
transportation projects? I think I know the answer, but let me 
just ask it anyway.
    Mr. Schneider. Thank you for the question, Senator. When we 
began the process of discussing what resulted in the principles 
that we ended up agreeing with AGC on to sort of form the basis 
of this idea, one of the first things that their 
representatives told us that they had really tried very, very 
diligently to access the DERA money, and also under SAFETEA-LU, 
some of the congestion mitigation air quality money.
    Though I think as a result of the joint efforts of pretty 
much people sitting here at the table and others, they have 
been more successful more recently. There haven't been enough 
resources, and that process is pretty difficult because it has 
involved, in both cases, a competitive grant application 
process. A lot of contractors, I think Mr. Lanham's company is 
big enough to be able to have the capacity to be able to do 
some of that, but some of the smaller outfits don't have. They 
don't have grant-writers on staff, let's put it that way. They 
are busy building our infrastructure.
    I think together, we thought there was a better way, a more 
efficient way to streamline this type of thing into project 
delivery though the principles that we negotiated.
    So our basic answer is DERA is a great program. It needs to 
be restored, I think was the word that was used here, and 
funded. But with respect to this particular sector that has 
been historically underserved, we feel this is an additional 
tool would be very helpful.
    Senator Carper. All right.
    Mr. Lanham, did you want to comment on that as well?
    Mr. Lanham. Yes, sir, Senator. I agree with what Conrad 
said. I think our industry has been underserved. Typically, in 
a competitive grant situation, the way they calculate dollars 
per emissions reduced and trying to find an equitable way to 
compete for grant funds, the non-road sector generally does not 
compete well against on-road applications. The bang for the 
buck is better in an on-road application. We find ourselves 
generally on a competitive grant basis on the outside looking 
in.
    Texas does have its own kind of local version of DERA that 
we have been able to avail. It has been around for about 10 
years, and that is how we have been able to have such a track 
record as a firm, using our local program to assist. But we 
have suffered exactly that same dilemma at the State level, 
that the non-road application finds a great difficulty 
competing against on-road. The cost per ton of emissions 
reduced, if that is the benchmark, then competitive grants tend 
to favor on-road applications, and we lose out.
    Senator Carper. All right. I think you sort of answered the 
question I was going to ask you there.
    Let me just throw this one out there for you. One of the 
attractions for Diesel Emission Reduction Act has been the 
report I believe by EPA that for every dollar that we spend to 
reduce diesel emissions, we recognize a benefit, a combined 
health and economic benefit of $13. As I said earlier, in this 
business, that is a pretty good return. I think in any 
business.
    I don't know and I should probably ask Paul Schmidt and 
Laura Haynes about this, and I will later, but have we asked 
EPA or anyone else yet to figure out if the cost-benefit ratio 
on our clean construction legislation that we are introducing, 
what might that be? What might that be? Let me just say, would 
you expect it to be roughly the same? Would you expect it to be 
slightly more, slightly less? Please, anyone.
    Mr. Schneider. I don't believe anyone has asked EPA to do 
that calculation yet. We have done a very rough calculation 
which I would say is not definitive. We have been trying to 
look at this and I think we would welcome having EPA's input to 
that.
    But we would expect it to be probably the same or a little 
lower than that, but still very, very well cost benefit 
justified. I would say somewhere between 6 to 1 and 13 to 1 
would be just a ballpark guess. That would put a program like 
the Clean Construction Act in the top tier in terms of 
performance.
    Senator Carper. All right. Thank you.
    Any other speculators out there who want to take a shot at 
that?
    Mr. Lanham. Intuitively, Senator, I would agree with what 
Conrad said, the same or less just because understanding the 
way equipment operates and where it operates and how it 
operates, and possible exposures. That makes sense.
    Mr. Schneider. Let me just add one thing because one of the 
things that Bob said troubled me. I agree with him, but mis-
impression might have been left. If you are looking at a 
snapshot in terms of what the cost benefit would be, you are 
going to put retrofit or do an upgrade today and you are going 
to see tomorrow what the benefit would be. That is one metric 
and that is the way EPA typically has looked at this.
    But we are talking, as has been established earlier, about 
pieces of construction equipment that are going to last a long 
time. So if you looked at it over a period of time, it is much 
more competitive, much more attractive. You know, if you look 
at over a period of time, there is a lot more to be said in 
terms of the value of upgrading this equipment than could be 
seen just in a quick snapshot. I think that is one of the 
things being missed in the competitive process a bit. That is 
kind of under-weighted in the scale of things.
    So I think that 13 to 1 for DERA, that is a good number, 
but I think if you compared them over, you may be comparing a 
little bit apples to oranges, something that is going to last 5 
years, it is a good benefit. But if you can cleanup something 
that is going to last 30 years, there is a lot of benefit to 
that.
    Senator Carper. All right. Thank you.
    Anyone else on this question? Before you comment, Mr. 
O'Keefe, the last question I am going to ask is, I am going to 
just ask you to, as we wrap up, to just reflect on the 
testimony of your colleagues at the table, and the conversation 
that we have had, the questions asked. Just ask you if there is 
any closing statement. You were asked to make an opening 
statement, and I will just ask you if there is a closing 
thought you would like to leave us with.
    Mr. O'Keefe, would you go ahead? Please proceed.
    Mr. O'Keefe. Sure. Just on this issue of cost-
effectiveness, I think it would be useful to point out that a 
key component of cost-
effectiveness are health benefits, and the pollution mix that 
is provided by off-road diesel vehicles is not dissimilar from 
that that would be seen from on-road vehicles. So one would 
expect a really significant or consistent level of avoided 
health impacts that would occur from the Clean Construction 
Act.
    So that part of this analysis I think would hold quite 
firm.
    Senator Carper. OK. Good. Thank you.
    All right. Maybe one more. Let's see. Oh, yes. Again, Mr. 
Schneider, if you have a thought on this. You talked a little 
bit about this, at least you did, or Mr. Lanham, but I want to 
come back and just ask for the record and ask you to respond to 
it again.
    Diesel retrofits were supposed to receive priority funding 
under the Congestion Mitigation and Air Quality Program. 
However, States have largely avoided using CMAQ funds for these 
retrofits. Can you again just explain why CMAQ may not be a 
good fit for diesel retrofits?
    Mr. Schneider. I think, first of all, going forward, with 
respect to new transportation, it is not clear whether there is 
going to be a CMAQ Program as it has existed in the past. So I 
think part of the idea was to create a program that can fit 
with whatever set of priorities and allocations comes in the 
new transportation bill. So that is first.
    But historically, even though Congress had given a signal 
that it wanted States to prioritize diesel, and it is something 
we supported, diesel retrofits under CMAQ, it hasn't happened. 
So why hasn't it happened?
    So one of the reasons is, as we discussed before, 
contractors typically don't have Federal grant writers on staff 
to be able to access that money. So that was not a great fit 
there.
    No. 2, with respect to the way that rescissions work under 
the transportation programs, sometimes early on the SAFETEA-LU 
process, CMAQ money was one of the first places that States 
would actually return money to the Federal Government when 
there were rescissions. So there was just less money available. 
There were already a lot of competing interests looking to 
access that money. So once again, diesel retrofit sort of lost 
out.
    I think third, I don't think there was very clear guidance 
on this point from the Federal Highway Administration. Frankly, 
I think there was sort of a slip twixt cup and lip between 
Congress' intent and what FHA really said with respect to how 
States should do it. They didn't really know how to do it. They 
didn't get good guidance. As a result, I think it was just 
underserved.
    So I think there were three things working against it, and 
that is not to say it wasn't a good idea. We supported it at 
the time, but the idea is when you live and learn, you learn 
from experience and try to make things better. I think when we 
sat down at the end of SAFETEA-LU, the official end of SAFETEA-
LU a couple of years ago with AGC, we sort of said, OK, what 
didn't work here, and how can we make it better.
    What we came to Congress with was the set of principles we 
negotiated which we hope will provide a platform for a better 
program that will be more effective. We just commend you for 
picking that up and running with it. So thank you.
    Senator Carper. Sure. Thank you for those thoughts.
    OK, I would appreciate each of you making a brief closing 
comment or thought and sharing with us. That would be great.
    Mr. O'Keefe, do you want to lead us off?
    Mr. O'Keefe. Sure. In terms of responding to my fellow 
panelists, as a former State regulator, I have to say that the 
notion of ever-tighter EPA national ambient air quality 
standards, even if they are warranted, pose significant 
challenges in compliance, as has been pointed out. That really 
resonated with me. The PM standard is being tightened. The 
ozone standard looks like it may be tightened.
    Even though PM is the trigger for funding under this rule, 
the rule offers the opportunity to reduce PM, NOx and ozone 
obviously NOx being a precursor to ozone. The clean fuel 
benefits have also already succeeded in reducing SO2 
earlier on by moving to lower sulphur fuel. So there are really 
multiple benefits to moving forward with DERA.
    Second, I think that there are opportunities to target from 
a health-based perspective the next generation of DERA funds. 
While the first generation has been well used, there are areas 
where there are significantly higher exposures. These are 
around ports. These can be around transfer stations. These can 
be around urban canyons. They can be around industrial sites or 
construction sites.
    These are places where the risks are higher, and the 
judicious use of these funds could really yield significant 
health impacts that are greater than just from exposure to 
ambient air alone. Although there would be ancillary benefits 
to ambient air reductions as well. So it just makes a lot of 
sense.
    Senator Carper. That is a very good point. Thank you for 
mentioning that.
    Mr. Parfitt.
    Mr. Parfitt. Yes, thank you, Mr. Chairman. In closing, I 
would say that the DERA Program has been recognized as a 
voluntary program where it has been well received by industry. 
It has been well received by the local governments as an 
opportunity to make these upgrades to their equipment and 
reduce air emissions.
    I think that we have only begun to see the benefits from 
the DERA Program. There are many other opportunities out there 
that we have recognized where this program could be utilized. 
So, I think that the voluntary nature and the significant 
opportunities for additional retrofits and upgrades is 
important and I certainly support the DERA Program.
    Senator Carper. Great. Thanks so much. Thanks for joining 
us today.
    Mr. Lanham.
    Mr. Lanham. Mr. Chairman, it is my first time to ever come 
to Washington to testify. Thank you for the invitation to be 
here today. I am honored. It has been a learning experience for 
me.
    Senator Carper. We have learned from you, too, so it is a 
two-way street.
    Mr. Lanham. I have been involved with this issue, Mr. 
Chairman, a long time, and we have found that collaboration and 
cooperation yields innovative solutions. DERA, your 
legislation, are examples of innovation. It allows creativity, 
flexibility, things done in a manner that can be business-
friendly and accomplish great goals for the environment. All 
those are great opportunities ahead. I thank you for the 
opportunity to be able to participate in that.
    Senator Carper. Great. You have added a lot to the panel 
and we appreciate very much your input. Thanks.
    Mr. Schaeffer.
    Mr. Schaeffer. Thank you, Senator Carper. It has been our 
pleasure at the Diesel Technology Forum to be part of the 
Diesel Emissions Reduction Act history, dating back to the 
original announcement and introduction of legislation here on 
Capitol Hill and seeing the first 5 years of the program be so 
widely successful.
    Our only hope is that going forward, we have that same 
level of commitment and success that we have enjoyed in the 
past. I think we have learned the voluntary, incentive-based 
programs can work. It is an innovative policy. It is not a 
regulation. It is not a mandate. But with the right amount of 
funding, people can come together and work toward common 
solutions, and we have seen that here quite substantially.
    I would say over time we have also learned a lot. 
Particulate matter was the initial focus, and I think since 
then we have learned that upgrading and modernizing existing 
diesel engines and equipment has a lot of collateral benefit, 
reductions in NOx and hydrocarbons, and the fuel savings that 
occur from things like engine re-powers can be quite 
substantial, and that has lowered CO2. As you plot a 
climate strategy ahead, I think those are going to be important 
considerations for the future.
    So we appreciate the opportunity to be involved and you 
have our continued commitment to do so.
    Senator Carper. All right. Great. Thank you for those 
comments.
    Mr. Schneider, you get the last word here.
    Mr. Schneider. I appreciate it, Senator. Thanks for having 
me.
    I guess what I would say is reflecting on the day here and 
the panelists' comments is that out in the hinterland, we get 
the sense that there is pessimism about what Washington can 
actually accomplish sometimes, particularly in the 
environmental area. There seems to be a lot of divisiveness 
around a variety of different environmental topics and so 
forth. It causes one to question whether there is actually a 
potential to get something done.
    Well, here you have two issues where people have come 
together: DERA, which has a track record of people coming 
together and reaching across the aisle; and clean construction, 
where at least two of the major stakeholders that are involved, 
the environmental community and the contractors who are 
actually working the equipment, agree on a pathway forward.
    So it just strikes me that there is an opportunity here to 
actually accomplish something in both these particular areas. 
We would commend you for your leadership and as someone who is 
a problem solver, as someone who is looking for the ability to 
move things forward. We hope that your colleagues will soon 
sign up.
    So thank you very much.
    Senator Carper. Thank you for your kind words.
    Again, I only wish that George Voinovich were here to hear 
all these kind words being said about the efforts that he led 
and I was privileged to join him in leading as well, along with 
a lot of our colleagues.
    I again want to thank all of you for coming, for preparing 
for today, and for responding to the questions from Senator 
Barrasso and myself. Some of our colleagues who aren't here 
will have questions and they will be submitting those. They 
have 2 weeks to submit those questions and materials for the 
record. I would just ask that when you receive the questions, 
that you respond promptly to them.
    As we go forward, I am reminded of the words of Albert 
Einstein. Albert Einstein said from time to time, ``In 
adversity lies opportunity. In adversity lies opportunity.'' We 
have plenty of adversity when we have tens of thousands of 
people dying from breathing air with high levels of particulate 
matter. There is plenty of adversity there.
    But there is also opportunity. I think we have seized on 
that opportunity in enactment of the Diesel Emission Reduction 
Act. I think we have the potential for doing the same with our 
clean construction legislation.
    The legislation as introduced may not be perfect, but 
represents certainly a good effort. Hopefully between now and 
the time we will have a chance before we vote on it, we will 
have a chance to make it better. We would appreciate your 
constructive comments and that of others to make it better 
still.
    I want to express my thanks to our staff, both Democrat and 
Republican, for their work on DERA. A lot of people are part of 
that coalition, and other folks who have helped us in drafting 
and preparing the legislation for clean construction.
    With that said, I believe this hearing is a wrap and we are 
done. Thanks so much.
    We are adjourned.
    [Whereupon, at 4 p.m., the subcommittee was adjourned.]
    [Additional statements submitted for the record follow.]
   Statement of Hon. James M. Inhofe, U.S. Senator from the State of 
                                Oklahoma
    Senator Carper, thank you for holding this hearing.
    Today's hearing touches on one of the few EPA programs that has 
bipartisan support. The Diesel Emissions Reduction Act, a voluntary 
grant and loan program designed to reduce diesel emissions from our 
Nation's ``legacy fleet,'' was first passed as part of the Energy 
Policy Act of 2005 and was reauthorized last Congress by voice vote in 
both chambers. The President signed legislation reauthorizing DERA in 
the last days of the 111th Congress.
    In this context there is great irony in the President's call to 
strip the program of all funding for the upcoming fiscal year. This is 
a classic bait-and-switch--a tactic which this President and this EPA 
are making routine practice. You see, the President knows that Congress 
will restore the funding. So the move allows him to appear fiscally 
responsible, knowing full well that the program will continue.
    But this move also diverts attention from the other, more 
problematic programs and regulations where EPA is aggressively moving 
forward--and with no regard for our Nation's fiscal and economic well-
being.
    Senator Carper, it is in these other areas that this committee 
should focus its time.
    Take, for example, what's happening with greenhouse gas regulation. 
Implementation of EPA's cap-and-trade agenda will have ruinous 
consequences for our economy, with some estimates as high as $400 
Billion in lost GDP. These costs come despite the fact that, as 
Administrator Jackson has confirmed, these rules by themselves will 
have no impact on reducing global greenhouse gas concentrations. Yet 
despite what's at stake, this committee has had no oversight hearings 
on the design or implementation of EPA's GHG rules since they took 
effect this year.
    Another area of great concern is EPA's torrent of rules covering 
the electric power sector. EPA is set to roll out a suite of rules that 
will significantly affect the price and availability of electricity for 
citizens across the United States, including, among others, its Maximum 
Achievable Control Technology (MACT) rule, the Transport Rule, and new 
requirements for fly ash and cooling water. These rules, taken together 
with the agency's greenhouse gas requirements, could cost families and 
businesses over $300 Billion by 2015 according to a recent analysis by 
ICF International and the Edison Electric Institute.
    But even with an estimated 60 to 100 GW of our Nation's coal-fired 
electric generating capacity on the line, and reports that the agency's 
MACT proposal is fraught with technical errors and miscalculations, 
this committee has called no oversight hearings.
    EPA's recently finalized rules governing emissions from industrial 
and commercial boilers (Boiler MACT) are an example of an agency making 
a complete debacle of the rulemaking process. In this case, the agency 
has finalized rules that directly threaten both small and large 
businesses--as well as municipalities, universities and Federal 
facilities--due to impractical, costly regulatory requirements. An 
analysis from Global Insight estimates the rule could put up to 798,250 
jobs at risk and reduce U.S. GDP by as much as $1.2 billion. To date, 
this committee has had no hearings on these rules.
    Indeed, the enormous amount of energy that EPA expended in 2010 
jamming through its cap-and-trade agenda--a program that was not 
statutorily required by the CAA and was discretionary on EPA's part--
left the agency with insufficient resources to accomplish its main 
statutorily required tasks. For example, had the agency not tried to do 
too much at once, it would have had time to correct errors in its 
Utility MACT proposal that reportedly resulted in proposed standards 
that are off by a factor of 1000.
    Other examples of an agency out of control include the ozone NAAQS 
reconsideration: a potentially $670 billion hit to GDP; the Cement 
MACT: $3.4 billion in compliance costs and the potential to shut down 
17 plants across the country. These and a variety of other rules in the 
pipeline--widely and aptly acknowledged as the ``EPA Train Wreck''--all 
point to an agency in pursuit of an ideological agenda with little 
regard for the costs and practical complications of its rules.
    I do appreciate today's hearing. But today I call on you, Senator 
Carper, and Senator Boxer, to fulfill this committee's oversight 
obligations by taking an in-depth look at EPA's ``Train Wreck'' and 
what it will mean for jobs, energy security, consumers, manufacturers, 
small businesses, and economic growth.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 

                                 [all]