[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
EPA'S PROPOSED GHG STANDARDS FOR NEW POWER PLANTS AND H.R. ___,
WHITFIELD-MANCHIN LEGISLATION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND POWER
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 13, 2013
__________
Serial No. 113-94
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
______
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania GENE GREEN, Texas
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee LOIS CAPPS, California
Vice Chairman MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California
CORY GARDNER, Colorado BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Energy and Power
ED WHITFIELD, Kentucky
Chairman
STEVE SCALISE, Louisiana BOBBY L. RUSH, Illinois
Vice Chairman Ranking Member
RALPH M. HALL, Texas JERRY McNERNEY, California
JOHN SHIMKUS, Illinois PAUL TONKO, New York
JOSEPH R. PITTS, Pennsylvania ELIOT L. ENGEL, New York
LEE TERRY, Nebraska GENE GREEN, Texas
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
ROBERT E. LATTA, Ohio MICHAEL F. DOYLE, Pennsylvania
BILL CASSIDY, Louisiana JOHN BARROW, Georgia
PETE OLSON, Texas DORIS O. MATSUI, California
DAVID B. McKINLEY, West Virginia DONNA M. CHRISTENSEN, Virgin
CORY GARDNER, Colorado Islands
MIKE POMPEO, Kansas KATHY CASTOR, Florida
ADAM KINZINGER, Illinois JOHN D. DINGELL, Michigan
H. MORGAN GRIFFITH, Virginia HENRY A. WAXMAN, California (ex
JOE BARTON, Texas officio)
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 1
Prepared statement........................................... 3
Hon. Jerry McNerney, a Representative in Congress from the State
of California, opening statement............................... 4
Hon. Fred Upton, a Representative in Congress from the state of
Michigan, opening statement.................................... 5
Prepared statement........................................... 6
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 7
Witnesses
Joe Manchin, A United States Senator from the State of West
Virginia....................................................... 8
Prepared statement........................................... 11
Janet McCabe, Acting Assistant Administrator for Air and
Radiation, U.S. Environmental Protection Agency................ 15
Prepared statement........................................... 17
Answers to submitted questions............................... 225
E. Scott Pruitt, Attorney General, State of Oklahoma............. 55
Prepared statement........................................... 58
Henry Hale, Mayor, Fulton, Arkansas.............................. 74
Prepared statement........................................... 76
Tony Campbell, President and CEO, East Kentucky Power Cooperative 80
Prepared statement........................................... 83
Susan F. Tierney, Managing Principal, Analysis Group............. 90
Prepared statement........................................... 92
David Hawkins, Director of Climate Programs, Natural Resources
Defense Council................................................ 122
Prepared statement........................................... 124
J. Edward Cichanowicz, Engineering Consultant.................... 149
Prepared statement........................................... 151
Donald R. Van Der Vaart, Chief, Permitting Section, North
Carolina Department of Environment and Natural Resources,
Division of Air Quality........................................ 163
Prepared statement........................................... 165
Ross E. Eisenberg, Vice President, Energy and Resources Policy,
National Association of Manufacturers.......................... 172
Prepared statement........................................... 174
Submitted Material
Letter of November 13, 2013, from the American Coalition for
Clean Coal Electricity to the subcommittee, submitted by Mr.
Whitfield...................................................... 200
Report by John R. Christy, submitted by Mr. McKinley............. 203
Statement of Richard A. Bajura, submitted by Mr. McKinley........ 218
EPA'S PROPOSED GHG STANDARDS FOR NEW POWER PLANTS AND H.R. ----,
WHITFIELD-MANCHIN LEGISLATION
----------
THURSDAY, NOVEMBER 14, 2013
House of Representatives,
Subcommittee on Energy and Power,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 9:39 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Ed
Whitfield (chairman of the subcommittee) presiding.
Members present: Representatives Whitfield, Scalise, Hall,
Shimkus, Terry, Burgess, Latta, Cassidy, Olson, McKinley,
Gardner, Kinzinger, Griffith, Barton, Upton (ex officio),
McNerney, Tonko, Yarmuth, Green, Capps, Barrow, Dingell, and
Waxman (ex officio).
Staff present: Nick Abraham, Legislative Clerk; Gary
Andres, Staff Director; Charlotte Baker, Press Secretary; Sean
Bonyun, Communications Director; Allison Busbee, Policy
Coordinator, Energy and Power; Patrick Currier, Counsel, Energy
and Power; Tom Hassenboehler, Chief Counsel, Energy and Power;
Brandon Mooney, Professional Staff Member; Mary Neumayr, Senior
Energy Counsel; Chris Sarley, Policy Coordinator, Environment
and the Economy; Peter Spencer, Professional Staff, Oversight;
Jean Woodrow, Director, Information Technology; Jeff Baran,
Democratic Senior Counsel; Greg Dotson, Democratic Staff
Director, Energy and Environment; Caitlin Haberman, Democratic
Policy Analyst; and Alexandra Teitz, Senior Counsel, Energy and
Environment.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. I would like to call this hearing to order.
As you know, this morning we are having a hearing on the EPA's
proposed greenhouse gas standards for new coal powered plants,
and also we are going to touch on discussion draft legislation
that has been introduced by myself, Senator Manchin, Morgan
Griffith, David McKinley, John Shimkus, and many others in the
Congress. Because of what many of us view as the extreme
position in this greenhouse gas regulation that EPA has taken,
our legislation would allow EPA to regulate greenhouse gases,
but Congress would set the parameters for that regulation. And
our legislation would apply to new plants, as well as existing
plants, although they would be treated in significantly
different ways.
Just 1 year ago James Wood, the Deputy Assistant Secretary
of the Department of Energy's Office of Clean Coal, made this
statement regarding CCS technologies. ``Unlike the cost
effective advanced technologies that were developed to reduce
emissions of nitrogen, sulfur, mercury and particulates,
technologies to capture and store carbon emissions from
electric power plants are elusive, expensive and, although
there are CO2 separation technologies in use in the
natural gas and chemical processing industries, there has not
yet been deployment in the electric power industry, and there
is little history of the integration of these technologies with
electric generation in reliable or cost-effective modes.'' So
bottom line is we all know that EPA cannot point to a single
completed operational facility that meets the emissions
standard it has set for coal in this proposed regulation, and
all of the demonstration projects that they refer to have
received huge government subsidies. All of them are cost
overruns. None of them are in operation.
Now, Section 111 of the Clean Air Act defines the term
``standard of performance'' as ``a standard for emissions of
air pollutants which reflects the degree of emission limitation
achievable through the application of the best system of
emission reduction which the Administrator determines has been
adequately demonstrated.'' And that is the key word. And I am
sure that Ms. McCabe, who will be testifying later this
morning, would agree, and knows full well, that there is going
to be legal challenges on this proposed rule in the court
system, because they have gone a long way down the road that
they have never traveled before in setting these demonstration
projects as something that is adequately demonstrated that the
technology can work.
So EPA is doing everything it can do, with the backing of
the President, to move us down a road that we may not be yet
ready to move down. As a matter of fact, when Congress
addressed this issue the last time, the Democrats controlled
the House and the Senate, and the Markey-Waxman bill was
rejected by the U.S. Senate. They could not get it through. And
so now they are attempting to do, by regulation, what cannot be
done through legislation. So this morning we find ourselves
living in a country where we are the only country in the world
where you cannot legally build a new coal powered plant because
the technology is not available to meet the emission standard.
Now, I recognize that people are not rushing out to build
new coal powered plants because natural gas prices are so low.
But why in the world would a country, struggling with economic
growth, trying to be competitive in the global marketplace, say
to its citizens, and make a policy decision without a national
debate, that one of our most abundant resources will not be
used in America? Now, people say, well, natural gas prices are
so low, and they are, as I have stated, but what is happening
in Europe? How many of you know that over the last 20 months
they are in the process of closing down 30 gigawatts of new
natural gas plants? Why? Because natural gas coming out of
Russia is so expensive, so what happened last year in Europe?
Well, we view Europe as a green arena, and I am for all of
the above, so they moved quickly down that road. 22 percent of
their electricity is produced from renewables, but gas prices
are so high that last year they imported 45 percent of our coal
export market, which was the largest export market we had had
in about 15 years, and so they are now building coal plants in
Europe because of the high cost of natural gas. So why, in
America, would we make the decision because gas prices are low
now, we are not going to allow a new coal powered plant to be
built? So that is what we are going to try to explore this
morning. I understand there are different views on it, and,
obviously, that is why we have hearings. But I look forward to
the testimony of all our witnesses today on an issue that is
very important.
[The prepared statement of Mr. Whitfield follows:]
Prepared statement of Hon. Ed Whitfield
This morning, we continue our oversight of EPA's numerous
regulations targeting the use of coal. The regulation at issue
today, the proposed greenhouse gas standards for new power
plants, may well be the most damaging one yet in the agency's
all-out attack on one of our nations' most affordable, reliable
energy sources, coal.
There is a great deal about this proposed rule that is
concerning for states and ratepayers. The proposed rule has
serious implications for the affordability, reliability, and
diversity of the nation's electricity portfolio. Today, we will
examine this proposed rule and also discuss a more reasonable
alternative. Senator Joe Manchin and I have released draft
legislation that allows for greenhouse gas emissions
reductions, but it does so in a manner that ensures coal
remains a key part of America's energy mix. It would simply
provide that in setting greenhouse gas standards for new
plants, that EPA base the standards on tested and proven
technologies that are commercially achievable. It would also
provide that Congress set the effective date for any
regulations that EPA develops relating to existing power
plants.
I would like to thank my good friend Senator Manchin for
appearing before us today and for working with me on this
commonsense alternative. Make no mistake--EPA's proposed GHG
New Source Performance Standards would effectively ban new
coal-fired generation. It would essentially require carbon
capture and storage technologies, which are nowhere close to
being commercially viable. Even Charles McConnell, former
Assistant Secretary for Fossil Energy in the Obama
administration, recently testified before Congress that it is
``disingenuous'' to say that CCS is ready.
And while EPA moves to finalize a rule that would spell the
end of new coal-fired generation, it has also pledged to
finalize regulations that go after existing sources--a one-two
punch to eliminate coal as a source of electricity.
Now, I might add that some still claim that there is no
direct attack on coal or fossil fuels in general. They argue
that coal-fired power plant shutdowns are occurring simply
because natural gas is cheaper, and that coal is a victim of
nothing more than market forces. But if that was truly the
case, one wonders why the Obama EPA feels the need to keep
issuing rules that are nowhere close to being achievable by
coalfired power plants. In reality, while the increase in
domestic natural gas production is in itself good news for our
economy, this nation still needs a diversity of supply that
also comes from coal and nuclear as well as renewable sources
of electricity. The generation mix varies greatly across the
country based on what makes sense locally, including my part of
the country in Kentucky which relies heavily on coal.
America has the world's largest coal resources, and EPA's
pending regulations to phase out or eliminate the use of coal
for both new and existing power plants poses extreme risks for
jobs, energy reliability, and energy security. And these
regulations threaten to drive up electric bills in coal-reliant
states and restrict access to energy for many Americans. We
should be pursuing energy policies that will lead to more
energy that is less expensive for people, rather than less
energy that is more expensive for people. And this decision
should be left with the American people, not with EPA to
decide.
Further, many of our largest industrial competitors,
including China, have been rapidly adding coal to their
generation portfolio, and for good reason given its low cost
and reliable performance. And none of these nations are
imposing on themselves anything like EPA's anti-coal agenda.
The global economy is sending us a clear message--the more we
handicap American coal, the more we handicap American
competitiveness.
Prior to the Obama administration, the EPA and states had a
decades-long history of regulating coal in ways that reduced
emissions without abandoning this vital energy source. And I
believe that Sen. Manchin and I have tapped into that tradition
of realistic and achievable regulation with our draft
legislation. Our bipartisan and bicameral proposal is the
commonsense way to ensure that any greenhouse gas regulations
for power plants going forward are achievable.
I would conclude by noting that this hearing is about what
energy policy makes sense for the American people. We need to
keep the lights on and the bills low while creating badly
needed jobs. And it won't happen without coal.
# # #
Mr. Whitfield. At this time I would like to recognize the
gentleman from California, Mr. McNerney, for his 5 minute
opening statement.
OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. McNerney. Thank you, Mr. Chairman. It is a little
chilly in here this morning, so maybe we should turn on the
coal-fired power plants and get things warmed up.
You know, I am glad we are having this hearing, but I want
to make clear that this hearing is about climate change. The
legislation focuses on the Whitfield bill. The draft
legislation would block EPA's ability to issue standards to
limit carbon pollution from new and existing coal-fired power
plants. It effectively rolls back EPA's authority under the
Clean Air Act. The legislation nullifies EPA's proposed carbon
standards for new power plants and prohibits future standards
from being implemented unless at least six units at different
locations have met that standard for 12 continuous months. It
is not clear why utilities would deploy any carbon pollution
control technology in the absence of a requirement to do so. As
a result, the bill's requirements appear to be insurmountable.
In addition, the bill would require Congress to pass new
legislation before the EPA could limit carbon pollution from
existing power plants.
Greenhouse gases pose a significant threat to our economy,
to our public health, and to the environment. We have heard
time and again from the world's leading scientists that
greenhouse gases have negative consequences, and are causing
global warming. I share the view of many of my colleagues, that
we need a comprehensive approach to our nation's energy needs.
Coal can continue to play an important role, but we must
address carbon emissions.
California still relies on coal powered plants for some of
its energy needs. However, California has been a national
leader in clean energy generation, and in reducing greenhouse
gases. A Republican governor established short and long term
greenhouse gas emission reduction targets for California, to
reduce carbon emissions to 1990 levels by 2020, and 80 percent
below 1990 levels by 2050. The State's carbon emissions have
declined for 3 straight years.
The development of carbon capture and storage technologies
is essential to the future of coal. The International Energy
Agency expects carbon capture and storage to rank third among
ways to reduce carbon emissions by 2050, behind energy
efficiency, and the use of renewable sources, and ahead of
nuclear power. As far back as 2009, industry stakeholders were
talking about the benefits of carbon capture and sequestration.
Although work remains to be done on carbon capture and
sequestration, I believe that the current technological
capacity exists to effectively deploy CCS technology on power
plants. Taking away incentives for implementation of carbon
capture and sequestration will stunt the progress that has been
made in this industry to this point. We saw a similar scenario
play out in the wind industry back in the 1990s, that I was
involved in. The United States was building new technology, and
was leading the charge, but proper support went away, and so
did the jobs and the technology. I saw those jobs leave this
country. That set our industry back for years.
As I said at the beginning of my opening statement, this
hearing is about climate change. Either we believe that climate
change is happening, and is caused by human activities, or we
don't. If we do believe that climate change is happening, this
bill is exactly the wrong way to go.
I want to thank the witnesses for their time, and I look
forward to their testimony, and I am interested to hear how we
can support efforts to reduce greenhouse gases, while boosting
energy independence, and protecting public health.
Thank you, Mr. Chairman. I yield back.
Mr. Whitfield. Thank you, Mr. McNerney. At this time
recognize the gentleman from Michigan, Mr. Upton, for 5
minutes.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Well, thank you, Mr. Chairman.
You know, nearly everyone claims to support an all-of-the-
above energy strategy, everybody. And, in my view, all-of-the-
above allows every viable energy resource to compete. It
doesn't take certain options off the table by setting
unachievable Federal regs. Unfortunately, it is the latter that
has been on display by the EPA. EPA's proposed greenhouse gas
rule for new power plants is the latest effort by this
administration to eliminate the use of coal. The President's
energy strategy is the exact opposite of an all of the above
approach, and would limit our energy choices, jeopardize jobs,
raise energy costs, and threaten America's global
competitiveness.
An open all-of-the-above energy strategy is important
because diversity of energy is critical to providing affordable
and reliable electricity to U.S. homes and businesses. The
nation has, for decades, benefitted from a variety of sources
of electricity. The idea that electricity from coal is no
longer needed because we have more natural gas is misguided.
And, while our Nation has become the envy of the world because
of recent breakthroughs unlocking vast amounts of oil and
natural gas, it never makes sense to regulate an entire fuel
category out of the mix. It makes even less sense when the
resource makes up 40 percent of the fuel used for electricity
domestically, while at the same time other nations, from
Germany to China, are continuing to build new state-of-the-art
coal facilities.
Given that the U.S. has the largest coal reserves, and is
the largest producer of coal, it should remain a critical
contributor to a diverse electricity portfolio for decades to
come. Fuel diversity not only gives us the flexibility we need
to keep electricity costs low, it also helps ensure
reliability. As we have heard from many witnesses in previous
hearings, the coal-fired power plant shutdowns already underway
pose a serious threat to reliability in many regions,
particularly in the Midwest. That threat will continue to get
worse if these shutdowns increase in the years ahead while we
limit our options for new base load power.
In sum, fuel diversity gives us a more stable, reliable,
affordable electricity supply, and any threat to coal,
including the EPA's proposed rule, is a threat to that
diversity. I want to applaud both Chairman Whitfield and
Senator Manchin from West Virginia for their efforts in
authoring a workable bipartisan, and bicameral, alternative to
EPA's proposed rule. Their proposal is a good faith effort that
requires a critical check on EPA's misuse of the Clean Air Act
to try and accomplish through regulation what was rejected in
Congress through legislation. Their approach does not prohibit
the EPA for setting the standard for new sources, but instead
focuses on setting standards that have been adequately
demonstrated at geographically diverse locations around the
country, a key ingredient that is missing from EPA's regulatory
proposal. It deserves serious consideration by this committee
and Congress.
And I yield back my time.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Nearly everyone claims to support an all-of-the-above
energy strategy. In my view, all-of-the-above allows every
viable energy resource to compete. It does not take certain
options off the table by setting unachievable federal
regulations. Unfortunately, it is the latter that has been on
display by the Environmental Protection Agency.
EPA's proposed greenhouse gas rule for new power plants is
the latest effort by the Obama administration to eliminate the
use of coal. The president's energy strategy is the exact
opposite of an all-of-the-above approach and would limit our
energy choices, jeopardize jobs, raise energy costs, and
threaten America's global competitiveness.
An open, all-of-the-above energy strategy is important
because diversity of energy is critical to providing affordable
and reliable electricity to U.S. homes and businesses. The
nation has for decades benefitted from a variety of sources of
electricity.
The idea that electricity from coal is no longer needed
because we have more natural gas is misguided. While our nation
has become the envy of the world because of recent
breakthroughs unlocking vast amounts of oil and natural gas, it
never makes sense to regulate an entire fuel category out of
the mix. It makes even less sense when that resource makes up
40 percent of the fuel used for electricity domestically while
at the same time other nations, from Germany to China, are
continuing to build new state-of-the-art coal facilities.
Given that the United States has the world's largest coal
reserves and is the largest producer of coal, it should remain
a critical contributor to a diverse electricity portfolio for
decades to come.
Fuel diversity not only gives us the flexibility to keep
electricity costs low, but it also helps ensure reliability. As
we have heard from many witnesses in previous hearings, the
coal-fired power plant shutdowns already underway pose a
serious threat to reliability in many regions, particularly the
Midwest. That threat will continue to get worse if these
shutdowns increase in the years ahead while we limit our
options for new base load power.
In sum, fuel diversity gives us a more stable, reliable,
and affordable electricity supply. And any threat to coal,
including EPA's proposed rule, is a threat to that diversity.
I would like to applaud both Chairman Whitfield and Senator
Manchin for their efforts in authoring a workable bipartisan
and bicameral alternative to EPA's proposed rule. Their
proposal is a good faith effort that requires a critical check
on EPA's misuse of the Clean Air Act to try to accomplish
through regulation what was rejected in Congress through
legislation. Their approach does not prohibit the EPA from
setting a standard for new sources, but focuses on setting
standards that have been adequately demonstrated at
geographically diverse locations around the country, a key
ingredient missing from EPA's regulatory proposal. It deserves
serious consideration by this committee and Congress as a
whole.
# # #
Mr. Whitfield. Thank you, Mr. Upton. At this time I
recognize the distinguished gentleman from California, Mr.
Waxman, for 5 minutes.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much, Mr. Chairman.
The warning signs of climate change are happening all
around us, but House Republicans are averting their eyes,
denying the science, and jeopardizing the future of our
children and grandchildren. Not only is this committee refusing
to act, we are considering legislation to stop the
administration from acting under existing law. The bill before
us is a recipe for climate disaster.
Last week, the World Meteorological Association reported
that the levels of heat trapping gases in the atmosphere set
new records. The levels are now higher than at any time in the
last 800,000 years. Direct measurements and basic physics tell
us that carbon pollution is warming the planet.
Now, my Republican colleagues deny this scientific reality.
I wish they would open their eyes and escape their
congressional bubble. In my state, firefighters know that
wildfires are getting bigger and more dangerous as heat and
drought become more common. Across the West, foresters are
grappling with dying forests, killed by bark beetles that
thrive in warmer temperatures. Farmers know the weather better
than anyone else, and they say it is different now. Coastal
communities confront ever-rising sea levels, putting them at
risk from extreme storms and ever higher storm surges. And just
last week a super typhoon, perhaps the strongest ever recorded,
demolished entire cities in the Philippines. Extreme weather,
sea level rises, heat waves, droughts, floods, wildfires,
pests. This is what climate change looks like.
So what is this committee doing today? Denying,
obstructing, and weakening the Clean Air Act. We will hear
charges today that the administration is waging a war on coal.
We will hear claims that EPA's rules will block all new coal-
fired power plants. We will be told that we must pass
legislation to effectively repeal EPA's existing authority to
address carbon pollution from power plants under the Clean Air
Act. And we will be told this is a reasonable middle ground.
But we will hear no recognition of the dangers from climate
change, much less any suggestions for dealing with it. EPA's
approach is actually very reasonable. For existing coal-fired
power plants, EPA is starting by listening to stakeholders. EPA
hasn't yet issued a proposal. For new coal-fired plants, EPA
proposes to require partial use of carbon controls that are
technically feasible, have been used in other industrial
applications for years, and have been demonstrated on existing
power plants. Several full scale commercial applications of
carbon capture at coal-fired power plants are currently under
construction.
Of course, these controls are more expensive than dumping
carbon pollution into the air. That is why industry will never
deploy them without government incentives or requirements.
If this committee is truly concerned about the future of
coal, it should be doing everything possible to advance the
carbon capture technologies. That is the path to continued use
of coal in a carbon constrained world.
That is exactly what Democrats tried to do. In 2009 the
Waxman-Markey bill gave utilities certainty about carbon
regulation. It gave utilities with more coal generation extra
allowances to help defray their costs. And it provided $60
billion, $60 billion, to deploy carbon capture technology. That
bill provided a future for coal. We worked with Representative
Boucher, the coal miners, the utility industry, to make sure of
that.
But House Republicans said no.
In the Recovery Act, President Obama provided $3.4 billion
for carbon capture and storage technology. But House
Republicans said no.
So I ask my Republican colleagues, if you don't like
President Obama's approach, if you don't like congressional
Democrats' approach, what is your plan for dealing with climate
change? Just saying no, pretending it doesn't exist, is just a
recipe for climate disaster.
Yield back my time.
Mr. Whitfield. Thank you, Mr. Waxman, and that completes
the opening statements. And we have this morning three panels
of witnesses, and on the first panel we are delighted to
welcome Senator Joe Manchin of the great State of West
Virginia, and he will be our first witness. Senator Manchin is
on the Energy and Natural Resources Committee, and he is also
chairman of the Public Lands, Forest, and Mining Subcomittee.
And I know you are on a lot of other committees as well,
Senator, but we welcome you, and thank you for taking time to
join us this morning.
And I will say that when Senator Manchin finishes his
statement, he has got to get over to a confirmation hearing, so
I know that you all will be disappointed you can't ask him any
questions.
But, Senator Manchin, you are recognized for 5 minutes.
STATEMENT OF HON. JOE MANCHIN, A UNITED STATES SENATOR FROM THE
STATE OF WEST VIRGINIA
Senator Manchin. Thank you for inviting me, and having me
be part of this. My colleague from West Virginia, Congressman
McKinley, good to be with you. And I want to, first of all, say
that I do believe that seven billion people on Mother Earth has
had an impact on the environment. We have a responsibility. We
also have seven billion people that would like to eat and
provide for themselves, and their families, so we have got to
find that balance.
The EPA regulation of greenhouse gas emissions from both
new and existing power plants are what we are talking about in
this legislation that we proposed. Our legislation would
protect Americans' access to reliable and affordable
electricity now, and for decades to come, finding that balance
we talk about. We need a diverse energy portfolio, which, I
think, Mr. Upton, you have talked about, and we sure do need
that, a true all of the above mix of natural gas, nuclear,
renewables, oil, and coal. Unfortunately, the Environmental
Protection Agency has chosen a regulatory path devoid of common
sense that will take us way off course from a future of
abundant, affordable clean energy. Our legislation tries to get
the EPA back on track, but in a way that does nothing to
prevent the EPA from acting in a reasonable and rational way.
Mr. Chairman, EPA's proposed standards for new coal-fired
power plants would effectively prevent any new plants from
being constructed. Their standards require coal-fired power
plants to deploy technologies that are not currently
commercially viable. And though EPA has yet to formally propose
new standards for existing power plants, there is every
indication that these standards will be unachievable as well.
The EPA is holding the coal industry to impossible standards.
And, for the first time ever, the Federal Government is trying
to force an industry to do something that is technologically
impossible to achieve, at least for now. The industry is making
steady progress, but is still a ways off from developing the
carbon capture and storage technologies that the EPA claims are
commercially viable. We don't have a commercially viable plant
right now.
Right now coal provides 37 percent of all electricity
generated in the United States, and the Department of Energy
projects coal will provide at least that much through 2040.
Right now we simply can't make up the difference with
renewables. That is just wishful thinking. So if we just stand
by and do nothing, and let the EPA eliminate coal from the
energy mix, we are going to see stability of our electrical
grid threatened, and see the price of electricity rise
dramatically, jeopardizing America's economy and countless
jobs, with no real environmental benefit, but we are just
standing by.
Our bipartisan, bicameral legislation is part of a national
discussion about our energy future and the proper role of
regulatory bodies like the EPA. Our legislation ensures that
EPA will no longer be able to impose unachievable standards on
coal-fired power plants. It is just common sense that
regulations are based on what is technologically possible at
the time they are proposed. With regulations, if they aren't
feasible, they aren't reasonable.
For new plants, our legislation will require that any EPA
regulation must be categorized by fuel type, coal, or gas. The
EPA can only impose a standard if that standard has been
achieved for 12 consecutive months at six different U.S.
electricity generating plants, operating on a full commercial
basis. For existing plants, any EPA proposed rule will not take
effect until Federal law is enacted specifying the rule's
effective date, and EPA must report to Congress on the economic
impact of the rule.
Mr. Chairman, it is time we strike a balance between
healthy environment and a healthy economy. That is all we have
asked for, is a balance, and that is what our legislation does.
Abundant, reliable, affordable energy made this country the
economic leader of the world. We all wouldn't enjoy the life we
have today if it had not been for the coal, when produced by
the hardworking people of this country. And that is the same
formula that will keep us up at the front. It is time the EPA
started working as our partner, not as our adversary, to
achieve that balance. And the EPA can start by recognizing it
is just common sense that regulations should be based on what
is technologically possible at the time they are proposed. That
is all we have asked for.
Again I want to thank you, Mr. Chairman, and all the
members of the committee here for allowing me to come before
you, and thank you for the opportunity to work with you on this
very important piece of legislation.
[The prepared statement of Senator Manchin follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Well, Senator Manchin, thank you so much for
your testimony. I know all of us look forward to working with
you as we move forward, and we appreciate very much your taking
time to come over and visit us on the House side.
Senator Manchin. Well, it is good to be with you.
Mr. Whitfield. Thank you so much.
Senator Manchin. Thank you.
Mr. Dingell. Mr. Chairman, I would just like to say welcome
to Senator Manchin. Welcome.
Senator Manchin. Thank you, my friend.
Mr. Dingell. I am delighted to see you in the committee
this morning.
Senator Manchin. Thank you, Mr.----
Mr. Dingell. Thank you, sir.
Senator Manchin. Thank you, Mr. Dingell. You are my friend,
I appreciate it. Thank you.
Mr. Whitfield. Thank you, Mr. Dingell.
At this time I would like to call our second panel, and our
second panel consists of one person, and that is the Honorable
Janet McCabe, who is the Acting Assistant Administrator for Air
and Radiation at the Environmental Protection Agency. And I
just discovered, in talking to her before the hearing, that she
has a travel schedule like many of us do. She lives in Indiana
and travels back and forth to Washington. So, Ms. McCabe, thank
you very much for joining us today to talk about the proposed
greenhouse gas regulation, and maybe the discussion draft, and
you are recognized for 5 minutes for an opening statement.
STATEMENT OF HON. JANET MCCABE, ACTING ASSISTANT ADMINISTRATOR
FOR AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY
Ms. McCabe. Well, thank you, Mr. Chairman, and members of
the subcommittee. Thank you for the opportunity to testify
today on EPA's recently issued proposed carbon pollution
standards for new power plants and the related discussion draft
under consideration in the committee.
Responding to climate change is an imperative----
Mr. Whitfield. Is your microphone on, Ms. McCabe?
Ms. McCabe. The green light is on.
Responding to climate change is an imperative that presents
both an economic challenge and an economic opportunity. As
President Obama and Administrator McCarthy have underscored,
both the economy and the environment must provide for current
and future generations. We can and must embrace cutting carbon
pollution as a spark for business innovation, job creation,
clean energy, and broad economic growth.
In June President Obama issued a national climate action
plan, which directs EPA and other Federal agencies to take
steps to mitigate the current and future damage caused by
greenhouse gas emissions, and to prepare for the climate
changes that have already been set in motion. A key element of
the plan is addressing carbon pollution from new and existing
power plants. Power plants are the single largest source of
carbon pollution in the U.S., accounting for about \1/3\ of
U.S. emissions. In March 2012, EPA first proposed carbon
pollution standards for future power plants, and after
receiving 2.7 million comments, we determined to issue a new
proposed rule based on this input and updated information.
In September EPA announced its new proposal. The proposed
standards would establish the first uniform national limits on
carbon pollution from future power plants. They will not apply
to existing power plants. The proposal sets separate national
limits for new natural gas fired turbines, and new coal-fired
units. The standards reflect the demonstrated performance of
efficient lower carbon technologies that are currently being
constructed today. They set the stage for continued public and
private investment in technologies, like efficient natural gas,
and carbon capture and storage. The proposal is currently
available to the public, and the formal comment period will
begin when the rule is published in the Federal Register. We
look forward to robust engagement on the proposal, and will
carefully consider the comments and input we receive as a final
rule is developed.
For existing plants, we are engaged in outreach now to a
broad group of stakeholders who can inform the development of
proposed guidelines, which we expect to issue in June of 2014.
These guidelines will provide guidance to states, which have
the primary role in developing and implementing plans to
address carbon pollution from the existing plants in their
states.
In addition to the proposed carbon pollution standards, I
have been asked to provide testimony on the discussion draft
that has been put forward by Chairman Whitfield and Senator
Manchin. Although the administration does not currently have a
position on the draft, I will offer a few points that I hope
will assist the committee in its deliberations. The draft bill
would delay action and regulatory certainty for future power
plants by repealing the pending proposed carbon pollution
standards. Further, it would indefinitely delay progress in
reducing carbon pollution by discouraging the adoption of
innovative technology that is available and effective today,
and would limit future development of cutting edge
technologies. The draft bill could also prevent timely action
on the largest source of carbon pollution in the country, the
power sector, by prohibiting EPA rules from taking effect until
Congress passes legislation setting the effective date of the
rules.
For over 40 years State and Federal regulators have worked
with stakeholders under the Clean Air Act to substantially
reduce pollution through the development of cutting edge
technologies. Addressing carbon pollution under the Clean Air
Act will not be any different.
Thank you again for the opportunity to testify on this
important subject, and I look forward to answering your
questions.
[The prepared statement of Ms. McCabe follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Well, Ms. McCabe, thanks very much for being
here, as I said, and thanks for your testimony. We will now
have questions for you, and I will recognize myself for 5
minutes for the first questions.
First of all, this legal term, adequately demonstrated,
what is your definition of adequately demonstrated?
Ms. McCabe. Well, thank you for the question, Mr. Chairman.
The EPA, in developing new source performance standards, which
we have done, many, many times under the Clean Air Act, does a
broad review of what technologies are available, feasible, in
use, and being developed. Indeed, that is one of the elements
of Section 111 of the Clean Air Act, is that the new source
performance standards, which apply to plants that are to be
built in the future, are to encourage new cutting edge and
innovative technology. So we look at the broad range of
technologies that are out there. And, in this case, we looked
at the types of technologies that were being used for the
newest generation of clean power plants that are being built,
clean natural gas, and----
Mr. Whitfield. But you----
Ms. McCabe [continuing]. Coal technology.
Mr. Whitfield. But you think the projects that you all have
identified would adequately demonstrate that the technology is
available?
Ms. McCabe. That is what our proposal lays out.
Mr. Whitfield. Now, even though my recollection is the
Federal Government provided about $1.4 billion for those three
projects, that are all in enhanced oil recovery areas, and
there are all cost overruns on them, and none of them are
completed. So how can you issue a regulation that would
dramatically change the possibility of even building a plant on
such speculative processes?
Ms. McCabe. Well, with respect, I wouldn't refer to these
as speculative technologies. Carbon capture and sequestration
has been used in industrial applications for many years.
Mr. Whitfield. But is it commercially available?
Ms. McCabe. It is commercially available----
Mr. Whitfield. Where.
Ms. McCabe [continuing]. And there are?
Mr. Whitfield. Where is the project, then?
Ms. McCabe. There are four projects underway. Two of them
are significantly----
Mr. Whitfield. Have they been completed?
Ms. McCabe. They are very close to completion, \3/4\ of the
way----
Mr. Whitfield. Do you know when they will be completed?
Ms. McCabe. My understanding is that the two that are under
construction now are expected to begin operation in 2014.
Mr. Whitfield. And where are they located?
Ms. McCabe. There is the Kemper plant----
Mr. Whitfield. And all of them have government money
involved in them. Well, we just have some fundamental
disagreements on this, and that is why we have hearings. And
let me ask you this question. I read repeatedly that the carbon
dioxide emissions in America are the lowest that they have been
in 20 years, which I think speaks well of the Clean Air Act,
speaks well of the efforts that you all are making.
But, America, we don't have to take a back seat to any
country in the world on the great progress that we have made in
cleaning up the environment. So if you were at a Rotary Club,
and someone, like, asked me the question the other day, why is
it that in America, with the great success that we have had,
and the lowest emissions in 20 years, why are we unilaterally
saying to ourself that you can't build a new coal plant in
America?
Ms. McCabe. Well, we are not saying you can't build a new
coal plant in America. We are, in fact, providing a path----
Mr. Whitfield. Well, look, let me just say, natural gas
prices are very low, so no one is interested in building a
plant right now. But if they wanted to, people tell us they
would not do it because they cannot meet these requirements.
And that is one of the fundamental differences that we have.
Just like I mentioned, in Europe, they are closing down 30
gigawatts of natural gas, and they are going to coal. Why
should we remove that option here in America? We have a 250
year reserve of coal. It doesn't mean that they are going to be
built immediately, but if the circumstances change, why
shouldn't we be able to do that? Right now we would not be able
to do it.
Ms. McCabe. We agree absolutely that there needs to be a
clear path for coal. Coal is the largest source of energy in
the country now. We expect it to continue to be. There are four
projects underway that are going forward that would use this
technology. So coal plants are moving forward.
Mr. Whitfield. Have you ever had meetings with the
President? I mean, have you ever heard him discuss when he made
that comment how I'll bankrupt the coal industry--have you ever
had a discussion with him about that?
Ms. McCabe. I was not in discussions----
Mr. Whitfield. OK.
Ms. McCabe [continuing]. With the President about that.
Mr. Whitfield. You know, I will make one other comment. In
1965 coal, worldwide, provided 93 percent of the electricity.
2013, coal provides 87 percent of the worldwide electricity. So
it is quite obvious that, while renewables are important, the
base load is going to have to be fossil fuels. Well, thank you
very much, Ms. McCabe. I look forward to continuing our
discussion and working with you on these issues.
At this time I recognize the gentleman from California, Mr.
McNerney.
Mr. McNerney. Thank you, Mr. Chairman.
Ms. McCabe, are there any coal-fired power plants in the
U.S. that don't receive any sort of government money?
Ms. McCabe. Any coal plants in the country that don't
receive any federal----
Mr. McNerney. Any----
Ms. McCabe [continuing]. Money?
Mr. McNerney [continuing]. Kind of government money at all.
Are there any in the country?
Ms. McCabe. I don't know that I know the answer to that
question. There are some coal plants that are receiving
government money, but I can't speak for every coal plant in the
country.
Mr. McNerney. Well, I would say that it is virtually
impossible, given what the legislation proposes, for coal-fired
power plants to use CCS equipment that aren't receiving some
sort of government subsidy, so I think the bill makes it
impossible for EPA to require that in the future.
Ms. McCabe. What I will say is that the history has been
that, as new technologies are developed, they often receive
government subsidies, and that is an important role the
government can play in encouraging research and development of
new technologies that then become part of the mainstream.
Mr. McNerney. Well, thank you. The coal industry, and
critics of the EPA's efforts to control carbon pollution from
power plants are saying that carbon capture and storage
technology is not feasible. We keep hearing that it isn't
ready, and won't be for years, but that is contrary to the
evidence. The coal industry was saying something very different
just four years ago, back in 2009. When the House passed an
energy bill that would have set limits on carbon pollution and
requiring CCS, the coal industry was running ads about how CCS
was the future of coal. Let me show you an example. Here is a
2010 television ad from the Consol Energy, one of the biggest
coal companies in the country.
[Video shown.]
Mr. McNerney. In light of that ad, what do you think the
outlet for carbon capture and sequestration storage technology
is?
Ms. McCabe. Based on the information that we reviewed and
have laid out in our proposal, it is clear that carbon capture
sequestration technology is available, is feasible. It has been
used in applications for many years. It is going forward with
commercial scale coal plants, so we see carbon capture and
sequestration as being a future technology that will be very
much in use.
Mr. McNerney. So was that ad correct in saying that the
industry was using CCS technology four years ago?
Ms. McCabe. There have been industry applications of CCS
for many years.
Mr. McNerney. Well, is carbon capture and storage
technology going to be widely deployed in the United States in
the absence of a requirement to use it, or other strong policy
driver?
Ms. McCabe. The history of development of technologies in
the power sector, and in many other industrial sectors, with
the new source performance standards, which put in place
requirements based on the clean and forward looking
technologies that this country is so good at inventing, that
those then allow those technologies to become widespread, the
cost to come down, and they become routine examples and
standard equipment in the future.
Mr. McNerney. What is your response to the argument that we
should just wait for years, or even decades, before limiting
the amount of carbon pollution that power plants can emit?
Ms. McCabe. Well, as has already been stated by members of
the committee, including yourself, climate change is a serious
health threat to the citizens of this country, and, in fact,
the world. And to delay the steps that we can take reasonably
now would increase the likelihood of significant health
impacts, and would be failing to do what we can do now to
reduce carbon emissions.
Mr. McNerney. Well, thank you. If coal is going to have a
long term future, carbon pollution from those plants must be
reduced significantly, and carbon sequestration and storage is
the only technology we have that can do that, is that right?
Ms. McCabe. Well, that is the key technology for coal-fired
power plants at this time, is carbon capture and sequestration.
Mr. McNerney. OK. Thank you, Mr. Chairman. I yield.
Mr. Whitfield. Thank you. At this time recognize the
gentleman from Louisiana, Mr. Scalise, for 5 minutes.
Mr. Scalise. Thank you, Mr. Chairman. I appreciate you
having this hearing, and I appreciate Senator Manchin being
here earlier, as well as you, Ms. McCabe, coming here to
testify. I think it is very clear that the Obama administration
has a war on coal, and I think their objectives have been
stated over the years, in terms of what they are trying to
achieve, and I think that is unachievable goals that are
designed to ultimately bankrupt the coal industry. We are
seeing it across so many states with job losses, but also with
increased energy costs. And, you know, when you talk about the
impact on low income families, these high energy costs hit low
income families the hardest.
And so, when the administration puts these policies in
place, they are having real consequences negatively not only on
our economy, but on families. So when we bring legislation like
this in a bipartisan way, and, again, I commend the Chairman
for bringing this bill, but also the Senator as well, because
it shows that there is bipartisan interest in ending this war
on coal and getting back to an economy that can function using
all of the available tools that we have, including coal, that
is very low cost and very effective.
So when Senator Manchin says that, under our bill, EPA will
no longer be able to impose unachievable standards, is there
something about that that you disagree with? I mean, do you
think you all should be able to impose the unachievable
standards you have been imposing so far?
Ms. McCabe. The standards that we have proposed, and that
are out for public comment now, are achievable. They are based
on technologies that are available and feasible, based on
experience in the real world, and----
Mr. Scalise. I don't necessarily think they are in the real
world. You mentioned four examples you said that you all point
to----
Ms. McCabe. Yes.
Mr. Scalise [continuing]. In terms of coal-fired power
plants that are adequately demonstrated. What are those four
examples?
Ms. McCabe. The first is the Kemper plant, which is in
Mississippi. It is about 75 percent complete. It is an IGCC
plant.
Mr. Scalise. I am familiar with that. We have had them
testify. What are the other three, if you can run through those
real quickly.
Ms. McCabe. There is the Boundary Dam project in
Saskatchewan. That is a 110 megawatt plant, pulverized coal
plant. It is 75 percent complete. It is designed to capture 90
percent.
Mr. Scalise. All right. Next one?
Ms. McCabe. The next one is the HECA plant in California,
which is also designed to capture 90 percent. That is an IGCC
plant as well. And the Texas Clean Energy Project, a 400
megawatt plant, also designed to capture 90 percent of the
carbon.
Mr. Scalise. Well, first let me start with the Kemper
plant. You use the Kemper plant as one of your poster children
for how CCS works so well. It is adequately demonstrated. We
had the Kemper folks come and testify. Let me read you some of
the statements. Because when you all introduced and announced
your new coal-fired power plant rules, the Southern Company,
making that plant, said, ``Because the unique characteristics
that make the project the right choice for Mississippi cannot
be consistently replicated on a national level, the Kemper
County energy facility should not serve as a primary basis for
new emissions standards impacting all new coal-fired plants.''
The people building the plant are saying it is creating a lot
of problems for them to build it this way, but it is saying it
surely should not be used as some kind of national model. And
yet you are sitting here saying you are using at as a national
model, but the people building it are saying it shouldn't be
used as a national model. First of all, are you aware that they
have said that?
Ms. McCabe. Yes, I am.
Mr. Scalise. Well, then why are you still using it as a
national model?
Ms. McCabe. Well, with respect, Congressman, there are
three other plants that are----
Mr. Scalise. Well, this was the first one you listed, so I
am going to start with this one. Kemper said, the other three I
don't think have testified. Kemper has testified, and their
testimony was they shouldn't be used as a national standard,
and yet you are sitting here, using it as a national standard,
and you know that they said they shouldn't be used as a
standard. So why are you still using it?
Ms. McCabe. Well----
Mr. Scalise. Scratch them off your list.
Ms. McCabe [continuing]. We don't base our rules on the
thoughts and comments of one company. We----
Mr. Scalise. Well, that was the first one you mentioned----
Ms. McCabe. Yes.
Mr. Scalise [continuing]. And you said you are using real
world examples. And the first real world example that you used,
they have testified, saying that they shouldn't even be used as
a standard. So you are not living in the real world. You are
using an example where the people that you are citing have said
they shouldn't be used as a national example because that
doesn't replicate itself nationally. You should be talking
about things that can actually be replicated in the real world
for these standards to exist.
Let me ask you this, because I know the Chairman brought
this up. You know, we have all heard the statement. I don't
know if you have or not. The President, President Obama said,
``So if somebody wants to build a coal powered plant, they can.
It is just that it will bankrupt them.'' Do you agree with the
President's statement that he made, that they can build a
plant, but it will bankrupt them if they build it? Do you agree
with that?
Ms. McCabe. The----
Mr. Scalise. And is that what you all are trying to achieve
with these rules?
Ms. McCabe. No. The Clean Air----
Mr. Scalise. No?
Ms. McCabe [continuing]. Act, over its history, has
regulated the power sector, including coal-fired power plants,
and claims that it would shut the lights off and skyrocket
power prices have been made before, and have been demonstrated
time and again not to be true.
Mr. Scalise. So the President's claim is not true? Because
the President made that claim. Yield back----
Mr. Whitfield. Gentleman's time has expired. At this time I
recognize the gentleman from Michigan, Mr. Dingell, for 5
minutes.
Mr. Dingell. Mr. Chairman, I thank you for that, and I
commend you for this hearing. I want to make it clear that I
agree with my colleague, Mr. Whitfield, that we should do
something to provide clarity on how to regulate greenhouse gas
emissions. However, the bill before us creates a peculiar and
entirely new process for regulations under the Clean Air Act. I
am afraid that this bill will take a long established and
reasonable effective regulatory process, turn it upside down,
to the great detriment to all of those in the industry, and who
are seeking certainty.
Some questions for you, Ms. McCabe. First, I would like to
have you answer a question I asked Administrator McCarthy and
Secretary Moniz at a recent hearing on climate change. Do you
see a future for coal as a viable energy source in light of the
impending greenhouse regulations? Please answer yes or no.
Ms. McCabe. Yes.
Mr. Dingell. Now, this bill requires that no EPA rule
applicable to existing coal-fired power plants may become
effective unless and until the Congress acts to adopt a new
law. Are you aware of any precedent for such provision in the
Clean Air Act? Answer yes or no, if you would please?
Ms. McCabe. No.
Mr. Dingell. Now, the traditional approach is that Congress
passes a law that directs a Federal agency to issue a
regulation, meeting specific criteria. Congress retains its
control over the result by exercising good old fashioned
oversight. If we do not approve of the results, and the agency
is unresponsive to Congress's vigorous exercise of its proper
oversight authority, Congress may then pass a new law to
provide further direction to the agency. This bill would, as a
practical matter, eliminate the delegation of rulemaking
authority to EPA, and set Congress up as a regulatory agency.
Now, Ms. McCabe, by the way, do you agree with that
statement, that the bill would, as a practical matter,
eliminate delegation, rulemaking authority to the EPA?
Ms. McCabe. Yes.
Mr. Dingell. Now, Ms. McCabe, in your view, would the
approach in this bill be effective and workable for regulating
carbon pollution from power plants, yes or no?
Ms. McCabe. No.
Mr. Dingell. Now, I tend to agree with you, since this bill
proposes to change how EPA regulates greenhouse gas emissions,
without amending the Clean Air Act itself. It seems that the
only ideas in this subcommittee of-- brought up before us is to
block and indefinitely delay rules, and propose rules without
providing any alternative solutions on how to address the
problem at hand. Do you agree with that statement?
Ms. McCabe. Yes.
Mr. Dingell. Now, since becoming Acting Administrator, have
you reached out to the stakeholders, including industry, and
all different parts of the industry about components of the
greenhouse gas rule, new and existing sources? Please----
Ms. McCabe. Yes, we----
Mr. Dingell [continuing]. Answer yes or no.
Ms. McCabe. Yes, we have.
Mr. Dingell. Would you submit for the record, not at this
time, but just submit for the record what you have done? Now, I
have always believed that we should build a consensus to create
support for moving legislation forward. I once again offer to
work with my colleagues on both sides to develop legislation
dealing with greenhouse gas emissions that provides both
clarity and certainty to industry and to regulators.
Sometimes things are done in a certain way for a reason.
Sometimes history and experience have something to teach us. I
would urge my friends here to attend to these lessons, and what
we have learned from them, before leaping to the conclusion
that a simplistic change will make things better. All too often
I find that the radical approach proposed in the Congress of
late will do nothing, except create confusion and problems, and
it is my fear that this bill is one of such proposals that is
going to cause us a lot of future difficulties.
I thank you for recognizing me, Mr. Chairman. I yield you
back 48 seconds.
Mr. Whitfield. Thank you so much. I wish you would yield me
that time to respond to you. At this time I recognize the
gentleman from Texas, Mr. Barton, for 5 minutes.
Mr. Barton. Mr. Chairman, I would be happy to let----
Mr. Whitfield. OK.
Mr. Barton [continuing]. Mr. Shimkus go----
Mr. Whitfield. Mr. Shimkus of Illinois for 5 minutes.
Mr. Shimkus. I thank my friend, and it is very emotional,
you know, and this is really the livelihood in a lot of our
districts, so we have great concerns.
First of all, I hate to correct Mr. Dingell, or at least
continue to set the record straight, but the Clean Air Act that
he was involved with in the legislation, there were amendments
offered to make sure that carbon dioxide was not considered a
criteria pollutant. And it was only through a court case, and
litigation, and then, I would argue, a failed endangerment
finding by the EPA that we are even in this mess. So the
process how we got here is not as clear as the Chairman
Emeritus tends to portray in how legislation and regulation
occurs.
The second point, to my friend in California, we do have
power plants that receive no government subsidies, coal-fired
power plants. In fact, they pay local, State, Federal taxes.
They have high wages, they have great benefits, they have
economic development for rural America. So, if there is any
thought that we have got coal-fired power plants that are
getting government subsidies, it is only to try to implement a
CCS standard, which brings me to the question.
The four CCS power plant projects that we have been talking
about, and also in your EPA September 20 proposal, to support
its claim that CCS for coal plants is adequately demonstrated,
each are being built with hundreds of millions of dollars of
government funding. Are any commercial scale CCS power plant
projects going forward right now in the U.S. that aren't
receiving government funding?
Ms. McCabe. The four that we have referred to are the four
that are going forward.
Mr. Shimkus. The question is, are there any commercial
size--and that deals with the ad too, because that is not
commercial size. Are there any commercial scale CCS power plant
projects going forward right now in the U.S. that aren't
receiving government funding?
Ms. McCabe. Not that I am aware of, but the ones that are--
--
Mr. Shimkus. No. You are correct. Does EPA believe it is
appropriate to rely on government subsidized demonstration
projects to show that a technology is adequately demonstrated?
Ms. McCabe. With respect, Congressman, I would not call
these demonstration projects. These are commercial projects
that are going forward, as has often----
Mr. Shimkus. OK. So the question is, do you think that if
it is a government funded project, and then we are trying to
see if it is commercially viable, do you think government
subsidizing a project equates to commercially viable?
Ms. McCabe. I do think that these plants are commercially
viable. They intend to produce power and sell it.
Mr. Shimkus. But commercially viable also talks about the
cost and benefit, and the capital investment, and the risk
assumed in the cost for selling the commodity product. So, if
the Federal Government is subsidizing that, how in the world
can the Federal Government, an agency that is not in a market
system, make believe that they have the capitalistic model that
says, with $100 million plus of government subsidies, this is
going to be a commercially viable project? How do you do that?
It would be more like the Department of Commerce should
probably have an evaluation than you all on the commercial
viability.
Ms. McCabe. As technology is developed, government
subsidies often help. This is not the only circumstance----
Mr. Shimkus. Do you think that every coal-fired power plant
will need millions of dollars of government subsidies on carbon
capture and sequestration?
Ms. McCabe. I do not think so.
Mr. Shimkus. And what is the basis of that analysis?
Ms. McCabe. Experience, and information, and analysis from
the Department of Energy, and other agencies----
Mr. Shimkus. The Kemper----
Ms. McCabe [continuing]. Over time.
Mr. Shimkus. The Kemper facility is how much millions of
dollars over budget?
Ms. McCabe. I don't know.
Mr. Shimkus. It is about $2 billion over budget. And how
long has it been delayed because of this? You see our problem?
Two things. You are saying the technology is available. We are
saying it is not. We are running ads on demonstration projects
that are small scale, and we are talking about large scale
power plants. I have got a new power plant, 1,600 megawatts. To
be able to capture carbon and put it in long term geological
storage on small scale, yes, we can do that in advanced oil
recovery. We can't do it in large scale.
And the administration is gaming the system to say that,
because we have government subsidized power plants at millions
of dollars, that it is commercially viable, is fraudulent, and
it is very disappointing.
I yield back my time.
Mr. Whitfield. At this time recognize the gentleman from
California, Mr. Waxman, for 5 minutes.
Mr. Waxman. Thank you, Mr. Chairman.
Since 1970, when President Nixon signed the Clean Air Act,
we have had a law that had several key features that have
helped make it one of the most successful environmental laws in
the world.
Science-based, health protective standards keep our eyes on
the prize, healthy air for everyone. Cooperative federalism
allows EPA to set the clean air goals, and then the states
decide how best to achieve them.
And the Clean Air Act uses regulatory standards to drive
technological innovation in pollution controls, often called
technology forcing standards. The Act recognizes that it
usually costs less to dump pollution for free than to clean it
up, so businesses generally don't control pollution absent
regulatory requirements.
Ms. McCabe, could you give us some examples of how Clean
Air Act standards have driven air pollution control
technologies?
Ms. McCabe. Certainly, Mr. Waxman. There are a couple of
very appropriate examples that affect the power sector
particularly. The first is the use of scrubbers. So when the
new source performance standards, which is the same rule we are
talking about here, were developed to require the use of
scrubbers, they were not in widespread use. There were only a
couple, in fact, out there, and since that time they have now
become mainstream standard equipment on any new power plants.
Mr. Waxman. And those scrubbers have gotten better, haven't
they?
Ms. McCabe. They have gotten better. They have gotten----
Mr. Waxman. And cheaper?
Ms. McCabe. And they have gotten cheaper, and they have
brought improved public health to millions of American by
reducing SO2 substantially.
Mr. Waxman. So we know, from decades of experience, that
the Clean Air Act drives innovations in pollution control. As
you mentioned, scrubbers, but I know that there are others we
could talk about----
Ms. McCabe. Yes.
Mr. Waxman [continuing]. As well. It drives innovation in
pollution controls, that then become the industry standard.
There is something else we have learned over the past 40
years. Almost every time EPA proposes a significant new
requirement, industry tells us it can't be done. And I have
been around all of these decades, and I have heard it over and
over again. It will cost too much, it will destroy our economy,
it will turn off the lights.
I am not going to show you, but I am going to tell you
about an ad that the American Electric Power System ran in
1974, the year I was elected, opposing requirements for
scrubbers to clean up sulfur dioxide. And it describes
scrubbers as monstrous contraptions that clog the works and
cause prolonged shutdowns, and would produce ``a disposal
nightmare.'' Is that what happened?
Ms. McCabe. Not at all.
Mr. Waxman. The EPA proposed a requirement that we have
these scrubbers, and you just mentioned it. They are now
ubiquitous. They are the standard. They are cheaper, they are
more effective. What did industry say when EPA proposed to
require selective catalytic reduction to clean up nitrogen
oxides, or activated carbon injection to control mercury, and
how did those statements compare with what actually happened?
Ms. McCabe. Those are similar examples, where there were
widespread concerns that it was going to be very detrimental to
the coal industry, and that has turned out not to be the case.
In fact, industry has found cheaper and very reliable ways to
control those pollutants.
Mr. Waxman. So once an air pollution standard is in place,
American industry gets to work and meets it. And along the way
we develop more effective and less expensive pollution control
technologies. Not only is our air cleaner, but we export tens
of billions of dollars of pollution control equipment all over
the world. We have seen that happen over and over again.
But the Whitfield bill would eliminate EPA's ability to
drive pollution control technology, rejecting an approach that
has been successful for over 4 decades.
If this bill had been in effect in 1971, EPA could not have
issued standards based on scrubber technology. Only two power
plants, as you mentioned, had operating scrubbers at the time
the 1971 rule was finalized. And if this bill were adopted now,
EPA likely could never set a standard based on carbon capture
and sequestration.
This bill is a radical rewrite of the Clean Air Act that
would block any real reductions in carbon pollution from coal
plants, and it ignores 40 years of experience.
I want to point out a couple things. There aren't criteria
pollutants spelled out in the Clean Air Act, but the Clean Air
Act requires EPA to deal with other pollutants as well, and
that is not just this one, carbon, but others that are already
being regulated. And to say that there is no subsidy for a
power plant that spews pollution, and hurts the public health,
and causes a great deal of damage, like we are seeing with
climate change, that is a subsidy, because they don't have to
pay for controlling their pollution, we all have to pay, in
more harm to the climate, more harm to the planet, and more
harm to our environment.
Thank you, Mr. Chairman.
Mr. Whitfield. Thank you. At this time recognize the
gentleman from Texas, Mr. Barton, for 5----
Mr. Barton. Thank you, Mr. Chairman, and I don't think it
is news to the committee, but I am a co-sponsor of your
legislation, and I hope we will move to----
Mr. Whitfield. Thank you very much.
Mr. Barton [continuing]. Move towards a hearing, and
hopefully a markup.
We are glad to have you. We are always glad to have our
friends from EPA. Could you tell the subcommittee, to the best
of your knowledge, are CO2 emissions in the United
States up or down?
Ms. McCabe. Well, that is a relative question, Congressman.
CO2 emissions are significant from----
Mr. Barton. I didn't ask the significance of them. I said
are they going up or are they going down.
Ms. McCabe. It depends on where you start. So they have
been----
Mr. Barton. Well, let us start from----
Ms. McCabe [continuing]. Going----
Mr. Barton [continuing]. Five years ago.
Ms. McCabe. They have been going up significantly over
time. In the most recent years there has been a reduction in--
--
Mr. Barton. So they are going down?
Ms. McCabe. There has been a recent reduction, but over
time carbon emissions----
Mr. Barton. They are going down?
Ms. McCabe [continuing]. Are significant.
Mr. Barton. You know that, and I know that. Which country
is number one right now in CO2 emissions, the United
States, or China?
Ms. McCabe. I believe it is China.
Mr. Barton. You believe correctly. Could you tell me what
the cost is per megawatt to build a new coal-fired plant under
existing regulations, as compared to a combined cycle natural
gas plant? Which is most cost effective right now, under
current regulations?
Ms. McCabe. I am sorry, I want to make sure I understand
your question. I am comparing a----
Mr. Barton. A state of the art----
Ms. McCabe. Yes.
Mr. Barton [continuing]. Natural gas fired power plant that
is being built today, compared to a coal-fired power plant that
could be built today under existing regulations. Which is the
most cost effective per megawatt of output?
Ms. McCabe. I believe, Congressman, and if I need to
supplement, I certainly will, but, given the fuel prices today,
the industry is building natural gas fired plants because they
are----
Mr. Barton. They are more cost effective?
Ms. McCabe [continuing]. More cost effective.
Mr. Barton. Yes. You get more output, less input, and the
CO2 emissions are approximately half that of a coal-
fired plant. Could you tell today what the cost of construction
of a coal-fired power plant is today? Do you know that number?
Ms. McCabe. I don't know that number, Congressman.
Mr. Barton. Do you know what percent of the cost of a coal-
fired power plant is directed towards emission control?
Ms. McCabe. I don't have that number with me.
Mr. Barton. It is approximately \2/3\. Two-thirds of the
cost of a new coal-fired power plant is for emission control,
i.e. it is not for efficiency, it is not for power generation.
It is simply to control emissions as a consequence of burning
coal.
If we were to implement the proposed regulations, that
would require carbon capture and sequestration, do you know
what percentage of the total cost those emissions control would
be?
Ms. McCabe. I don't have that number. There----
Mr. Barton. Would you agree with me that you are basically
going to spend approximately three times the cost of the power
plant itself to control the emissions, and capture and
sequester the carbon?
Ms. McCabe. I don't know that to be the case, Congressman.
Mr. Barton. OK. Could you get us the numbers and provide--
--
Ms. McCabe. Absolutely.
Mr. Barton. I may be off, but I am not off orders of
magnitude. I mean, I may be off a little bit, but if the
country adopts these proposed regulations, if you want to
build, you know, anybody that would be crazy enough to try to
build a coal-fired power plant, you would basically be paying
three to four times, for the emission control, what you are
paying to generate the power.
Ms. McCabe. What I can say, Congressman, is, based on the
economic analysis that is laid out in our proposed rule, the
cost of building a coal-fired power plant under the proposed
standards is in line with other non-natural gas power
generation. Biomass, nuclear, and such.
Mr. Barton. Well, since they are non-competitive, that
might be a true statement, yes. Finally, my time is expired,
could you give the committee a summary of all CO2
poisoning incidents in the last 5 years here in the United
States? It is going to be a short piece of paper.
Ms. McCabe. Yes. We are concerned about carbon because of
its effects in the atmosphere and on the climate, which are
well demonstrated.
Mr. Barton. So you accept that nobody has been poisoned as
a result of inhalation or exposure to CO2 in the
United States ever?
Ms. McCabe. CO2 does not work in that way, but
it creates damage to public health without doubt.
Mr. Barton. That is a debatable proposition.
Mr. Whitfield. Gentleman's time has expired. At this time I
will recognize the gentleman from Kentucky, Mr. Yarmuth. Now, I
think, at our last subcommittee hearing, we recognized that he
was a new member of the Energy and Commerce Committee, and Mr.
McNerney and I were talking, and he said, I don't think we
introduced him, and I thought we did. But, Mr. McNerney, would
you like to make some comments?
Mr. McNerney. Well, no, I appreciate that opportunity. Mr.
Yarmuth is a close friend of mine from Kentucky, so he is well
connected to these issues. But, coming from a journalistic
background, he has a lot of insight into how to proceed, and
question witnesses, so I really think he is going to be a
tremendous addition to our committee and our subcommittee.
Thank you.
Mr. Whitfield. Yes. And since Mr. Tonko actually was here
before Mr. Yarmuth, you all now know Mr. Yarmuth, but we are
going to recognize Mr. Tonko of New York for 5 minutes.
Mr. Tonko. Thank you, Mr. Chair. Sorry, Mr. Yarmuth. OK.
Administrator McCabe, welcome. The motivation for this
legislation and the direction of the questions today suggest
there is considerable skepticism about carbon capture and
sequestration technologies. I strongly support moving forward
to address carbon pollution, and I do not believe we can leave
the utilities sector out of that effort. While I believe carbon
capture technologies are technically feasible, I am not as
confident about our ability to sequester the carbon dioxide,
that is, capture. We may need to build new plants in areas that
are not close to a storage reservoir. In light of that, I have
a few questions.
Other than using the captured carbon dioxide for enhanced
oil recovery, are there other options for sequestering carbon
that are being considered?
Ms. McCabe. Well, we know that it is possible to sequester
carbon, even not for enhanced oil recovery. The EPA has
regulations in effect now that provide guidance for people on
how to do that, so it is doable.
Mr. Tonko. OK, thank you. And are there any opportunities
being explored to use biomass as the final sequestration
reservoir for carbon?
Ms. McCabe. I don't know, Congressman, but we would happily
follow up on that question.
Mr. Tonko. Thank you. Is there any opportunity for gaining
further efficiencies in operation of a new coal-fired utility,
or integrating renewable generation, or CHP, for that matter,
with coal-fired generation that would enable a facility to meet
the standard without having to capture and sequester all the
carbon dioxide that is generated?
Ms. McCabe. Well, I should clarify that the proposed rule
does not require that all the carbon be captured. It is based
on a partial carbon capture, about 30 to 50 percent, and this
is all laid out in our proposal, is the point at which
meaningful reductions of carbon can occur at a reasonable cost.
There are other technologies and approaches that the power
sector can use to reduce carbon, and you have named some of
them.
Mr. Tonko. And that integration, you think, is feasible
with other generation, or CHP?
Ms. McCabe. I believe so.
Mr. Tonko. It seems to me we are focusing too much on what
cannot be done, and not investing sufficient research dollars
in solving the problems. Are we investing enough in research?
Ms. McCabe. Hard for me to answer that, Congressman. I
think that there is a lot of work being done to explore a
variety of ways to produce power in a clean way. In addition,
there are many companies that are on the forward edge of their
industry, trying to find ways to reduce harmful pollution,
including carbon. And there is government interest, and
academic interest, in helping to further those technologies.
Mr. Tonko. Well, it is a trillion dollar industry, and a
couple billions of research just may not cut it. I would also
observe that we rarely have a technology ready to go to solve a
problem if there is no certain market for that technology. Is
it the administration's view that regulatory certainty will
move technology development forward more rapidly?
Ms. McCabe. That has been the history of the Clean Air Act,
in developing standards for new plants of any sort, all sorts
of industries, that putting those regulations in place provides
a path for the industry, and those technologies then become
standard.
Mr. Tonko. Well, I assume EPA is working closely with DOE
on this effort. And, while DOE is not here today, I hope we
will have an opportunity to hear from that agency on this topic
also.
And, finally, I would ask, in terms of the instant
legislation that we are reviewing here today, does that move us
closer toward research at a time when we need that research? It
seems to me it is pulling us away from research. It is not
focusing on the element of that research.
Ms. McCabe. Well, the bill, as I understand it, we are
taking a different approach to determining how to set a
standard for future power plants that would not provide the
path for innovation, and moving new technologies into the
market.
Mr. Tonko. Well, it seems we are in a phase of activity
here where R&D is absolutely a compelling factor in order for
us to transition, transform, an arena that is essential to the
growth of this country, and its economy, so I thank you for
your responses today, and it is great to have the agency
represented here.
Ms. McCabe. Thank you.
Mr. Tonko. I yield back, Mr. Chair.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from Nebraska, Mr. Terry for 5 minutes.
Mr. Terry. Thank you, Mr. Chairman, and appreciate you
being here.
I want to follow up on a white paper that was signed by 17
Attorney Generals, including ours from Nebraska. The white
paper was sent to the EPA, as I said, by 17 Attorney Generals,
and it states that, ``The elimination of coal as a fuel for new
electric generation would have highly concerning implications
for electricity prices, and for the economy, and job creation
in general, as well as the competitiveness of American
manufacturing.'' I happen to agree with the Attorney Generals'
statement on this, particularly in Nebraska, where we are a
coal heavy reliant state, and very close to the Powder River
Basin. So it allows us to have very affordable and reliable
electricity generation in our state.
So I want to know, does the EPA maintain that it has legal
authority to eliminate coal as a fuel for new electric
generation?
Ms. McCabe. The proposed rule would not eliminate coal for
new electric generation. In fact, just the opposite. The
proposal would provide a clear regulatory path that coal plants
could follow.
Mr. Terry. Now, I understand that answer, and some would
say that the regulatory issues would, in essence, prevent, the
way that they will be expected to be written and implemented
would make it very difficult and expensive to use coal.
Now, the Attorney Generals also raise concerns that the EPA
will not properly defer to the states in establishing or
implementing standards for existing power plants, and that,
under the guise of ``flexibility'', the EPA will require
existing plants to operate less, or shut down. Can you provide
assurances to the Attorney Generals that in its GHG regulation
of existing plants, EPA will note force the retirement or
reduction of operation of still viable coal-fired plants?
Ms. McCabe. So, Congressman, now you are shifting to the
existing----
Mr. Terry. The new one----
Ms. McCabe [continuing]. Power plant----
Mr. Terry. Yes, exactly.
Ms. McCabe [continuing]. Proposal, which, of course, is not
at a proposal stage yet. It is at the very early stages of
discussion. And the Clean Air Act provision for existing
facilities operates in a very different way from the provision
for setting new source performance standards. It does require
the EPA to set guidelines, and then relies on the states to
develop plans to achieve those guidelines in their states. This
is the very successful and fundamental provision that underlies
the Clean Air Act of the federal/state partnership when it
comes to, especially, existing sources, that states are in the
best position to figure out how best to comply with
environmental targets.
So those are the discussions we are having now, and will be
having. And the ultimate outcome, and what is expected of the
existing fleet, will be very different from what is expected in
a new source performance standard. And, as Administrator
McCarthy has said, there is no expectation that carbon capture
and sequestration would be a technology that would be
appropriate for existing plants.
Mr. Terry. OK. But, in discussions from some of our more
rural coal-fired plant operations, they fear that the standards
for reduction of CO2, that will be extremely costly
to meet, and, therefore, their only options, that is the
quotations around flexibility, is to reduce their operations.
Now, are you receiving feedback from states like Nebraska,
where we do have older coal-fired plants that are going to be
significantly impacted by this rule?
Ms. McCabe. We are having lots of discussions with states
all around the country, including Nebraska and others, and we
are discussing the differences between the new sources standard
and the existing standards. And it is not our expectation that
the existing standards, which, of course, will go through
robust public comment period as well, will require the----
Mr. Terry. So, for example, who would you be communicating
with, or receiving input, at this early stage, from Nebraska?
Is it from the power plants? Is it operators, the companies?
Ms. McCabe. Through our Region XVII office, there have been
discussions both with state officials, and I believe also the
power sector representatives, as well as other stakeholders.
Mr. Terry. OK. Thank you.
Mr. Whitfield. Gentleman's time has expired. At this time
recognize the gentlelady from California, Ms. Capps, for 5
minutes.
Mrs. Capps. Thank you, Mr. Chairman. And welcome, and thank
you for your testimony, Administrator McCabe.
We have heard from my friends across the aisle, and from
Senator Manchin, about the cost of implementing carbon emission
standards, but we have not heard anything yet from them about
the much higher costs that we are already paying for due to
climate change. We are seeing more extreme storms, coastal
erosion, and droughts across this country, not to mention the
broader impacts of things like ocean acidification, and the
increased public health risks. Ms. McCabe, will you elaborate a
bit on this, please? What are some of the costs we are already
paying for because of these unchecked emissions, and what are
some that we will be paying for down the road if we don't take
action now?
Ms. McCabe. Thank you for your question. As you noted,
there are significant impacts already being felt across the
country, and indeed across the globe, as a result of the
changing climate. You mentioned some of them. In this country
we have seen increased wildfires, in both frequency and
severity, that cost, in terms of property damage, in danger to
human health, and indeed sometimes to human life. In addition,
storms like Hurricane Sandy are tremendously costly,
devastating to those communities----
Mrs. Capps. Yes.
Ms. McCabe [continuing]. In terms of the property damage,
the health impacts, which last far beyond the actual events----
Mrs. Capps. Absolutely.
Ms. McCabe [continuing]. Of the storm.
Mrs. Capps. Thank you. I will move on, because----
Ms. McCabe. Sure.
Mrs. Capps [continuing]. I know you could go on and on on
that topic. Given that power plants are the number one source
of carbon pollution, do you see any way to reduce these costs,
the kind that you were talking about, without first reducing
carbon emissions?
Ms. McCabe. Carbon emissions need to be reduced.
Mrs. Capps. Yes. Now, we all know the cost and viability of
carbon capture sequestration technology has been at the core of
this debate. But, again, my friends across the aisle have been
focusing on the cost, but at the same time ignoring the
benefits of using this technology. Whether it is jobs
developing better CCS systems, jobs installing the systems, or
jobs in related industries that purchase the captured
CO2, which is a whole other industry, there are some
benefits to CCS that should not be ignored, right? Now, Ms.
McCabe, did EPA compare the costs and benefits of implementing
CCS in its analysis? If so, can you briefly discuss those
findings?
Ms. McCabe. In our proposal we have an economic analysis
that lays out all these issues, and looks at the expected costs
of the technologies for gas and coal plants, so all that
information is laid out.
Mrs. Capps. Thank you. And that is something that is
available to the public----
Ms. McCabe. Absolutely.
Mrs. Capps [continuing]. So that we can see that there is a
payoff in economic development for doing this.
And a final question. We hear frequently that power
companies would be eagerly building new coal plants, if only it
weren't for the uncertainty created by EPA and these carbon
emission regulations. Setting aside the fact that cheap natural
gas has really been the primary reason behind the recent
decline in coal, which I did hear mentioned in this hearing, I
do want to focus on this uncertainty issue. To me, if there is
one thing for certain in this debate, it is that carbon
emissions must, and will be, regulated, it is just a matter of
how and when. I mean, we regulate everything in energy
generation, don't we?
EPA's authority to regulate carbon emissions from power
plants has been upheld twice by the United States Supreme
Court, and President Obama has made it very clear that these
power plant rules are a top priority for his administration. I
see this discussion draft, and other efforts to derail the
emission standards, as simply delaying the inevitable. So I
want to ask if you think this proposed legislation would
decrease or increase uncertainty regarding the regulation of
carbon emissions. Industry tells me all the time that what they
want is certainty. So I would like to have your comments on
this.
Ms. McCabe. I hear that also, Congresswoman. I have heard
that over the years from industry, that they want regulatory
certainty so that they can plan their investments, and know
what they should be building. And this proposal that we are
going forward with would provide that, as opposed to a delay
and further----
Mrs. Capps. Right.
Ms. McCabe [continuing]. Uncertainty.
Mrs. Capps. And don't you feel that the industries do
recognize that they will be facing, if not sooner, later, some
more regulation as they develop newer and newer technologies?
Ms. McCabe. That is what we have heard from many
industries.
Mrs. Capps. Thank you very much for your testimony.
Mr. Whitfield. Gentlelady's time has expired. At this time
recognize the gentleman from Ohio, Mr. Latta, for 5 minutes.
Mr. Latta. Thank you, Mr. Chairman, and thank you,
Administrator, for being with us today. Really appreciate your
testimony today. And, just to give you a little background
about my neck of the woods, Ohio gets 78 percent of its overall
electricity comes from coal-fired plants. And up in my area of
Northwest Ohio it is even greater than that. According to the
national manufacturers, I have 60,000 manufacturing jobs in my
district, which is the third largest number of manufacturing
jobs on this committee. I also represent the largest number of
farmers, so what it really comes down to that you are hearing
is that we need energy, and we need very competitive energy to
be able to compete. And we are able to compete out there as
long as we can have those things happening. But if all of a
sudden our energy costs start going up we are in trouble.
And also I am blessed because, not only do I have your
traditional large energy companies that are in my state, and
across my district, but I also have electric co-ops, which I
also have the largest number in the State of Ohio in a
congressional district, and I also represent a large number of
municipal utilities. And I also go through a lot of businesses,
and I have gone through over 400-plus businesses over about a
14-month period. And the number one thing I have always heard
from everybody out there, it is on regulatory issues is the
number one concern, but it is also about the EPA. And when we
are talking about the EPA, I have never heard any business out
there ever tell me that they are not for clean air, or for
clean water. But they are very concerned, because one of the
issues, again, that concerns them is that they have got to be
able to be competitive.
And when I look at the proposed bill, especially in section
three, one of the issues that it comes down to, what you would
be looking at, they have to study the economic impacts of such
rural guidelines that affect the potential economic growth,
competitiveness, and jobs on the electric ratepayers out there.
So, again, that is what concerns the people in my district,
and, really on the manufacturing side. And if I could just ask
a few questions, real quickly?
The first is when you are talking about the EPA conducting
listening sessions, willing to plan regulations for existing
power plants, the EPA has really avoided states like Ohio that,
again, rely heavily on coal-fired generation. Can the EPA
provide any assurance that it will defer to states to set the
standards of performance for existing electric generating units
in their states?
Ms. McCabe. What I can tell you, Congressman, is that the
way that this section of the Clean Air Act works is that EPA
establishes guidelines, and then the states develop plans to
implement them. And that is a familiar approach in the Clean
Air Act. Very much our intent is to work with states so that
they have the flexibility to do that. And that is what a lot of
these initial interactions we are having with the states are
all about, is to make sure that we know what is going on
currently in the states, what they are looking forward to in
their own energy policy, so that we can make sure that we
design a guideline that can accommodate that kind of
flexibility.
Mr. Latta. Well, it is very, very important that that
happens, because, again, if you don't hear what is happening in
these businesses out there, we are not going to have those
folks out there that are going to be able to provide these
jobs. And also, can the EPA provide the assurance for the
ratepayers in these states that the electricity rates will not
go up as a result of the EPA regulations?
Ms. McCabe. We have seen over time that pollution control
technology has been able to advance in this country in the
power sector while keeping energy costs low, and that is a very
important consideration for the administration as we move----
Mr. Latta. Well, and again, because I am out talking to
these businesses every week, and again, their number one issue
is we have got to stay competitive. We don't want to see these
jobs going someplace else, because they want to make sure that
they have jobs for their community.
And also, again, because when you look how unique, like
Ohio is, in the Midwest, and Indiana right next door, and I
represent a district that runs right down the Indiana line.
When you look how much energy they get from coal in Indiana,
will the EPA thoroughly look at the regional and local
electricity rate impacts on these regulations?
Ms. McCabe. We will look at those sorts of things, and we
recognize that different states are in different positions.
They have different energy mixes, different fuels, different
energy needs. And all of that can be looked at in the
development of a state specific plan.
Mr. Latta. And finally, some of the discussion was
occurring, especially with Mr. Barton earlier. Could you
provide the committee with a list of the facilities that were
using scrubbers when the standard was implemented and made
final in the late 1970s on the----
Ms. McCabe. Sure.
Mr. Latta [continuing]. Clean Air--we get a list of those
companies, we would appreciate that.
Ms. McCabe. We will follow up with that.
Mr. Latta. OK. Thank you very much. Mr. Chairman, see my
time has expired, and I yield back.
Mr. Whitfield. Gentleman yields back. At this time I will
recognize the gentleman from Kentucky, Mr. Yarmuth, for 5
minutes.
Mr. Yarmuth. I thank you, Mr. Chairman. I appreciate the
welcome, again, and thank you, Mr. McNerney, for your kind
comments. Ms. McCabe, welcome.
There was discussion earlier about whether Congress
intended originally in the Clean Air Act to regulate carbon
emissions, and the comment made that a court basically ruled
that it did. Regardless of how we came to this point, the state
of the law is that not only does EPA have the authority to
regulate carbon emissions, it has the requirement to regulate
carbon emissions, isn't that correct?
Ms. McCabe. That is correct.
Mr. Yarmuth. And this bill, if I am correct, does not
change that requirement in any way. I mean, even if this bill
were to pass, you still have to regulate carbon emissions?
Ms. McCabe. As I understand it.
Mr. Yarmuth. So what this bill basically does is just
eliminate one of the tools that you might have to regulate
carbon emissions to meet the requirement that you have under
the law?
Ms. McCabe. It would significantly change the traditional
approach that we have taken----
Mr. Yarmuth. Right.
Ms. McCabe [continuing]. Under the Act.
Mr. Yarmuth. And we know there was another approach to
doing this, and Mr. Waxman mentioned it in his testimony. And I
want to go back to 2009 for a minute, because, when we were
debating Waxman-Markey at that time, this was a very hard issue
for me and the other members for the delegation from Kentucky.
So we, at least we Democrats, then Ben Chandler and I, and
Baron Hill from Indiana, and others, worked with Representative
Boucher of Virginia to kind of construct a methodology that
would have minimal impact, or the least negative impact on
Kentucky, which generates about 92 percent of its power through
coal, and same in my district in Louisville.
And after we had done that work, and came up with a final
product, before I cast my vote, I talked to all of the big
users of energy in my district. I talked to General Electric,
which has a big manufacturing plant, Ford Motor, which has two
plants. I talked to UPS, where we have the air hub. I talked to
the metro government. I talked to University of Louisville, the
public school system. Every one of those large users of energy
said they were either for or neutral on the bill. They didn't
think any of them, none of them, that it would impact them
negatively. And then I talked to the utility company, which
powers virtually everybody in my district, and they said they
thought the impact on residential customers after 10 years
would be $15 a month additional cost if they did absolutely
nothing. Didn't insulate, didn't change light bulbs, didn't
make any changes on the thermostat.
So, at that point, we were faced with the option of saying,
all right, this looks like it can work. It can actually deal
with carbon emissions in a way that doesn't impact states that
are heavily dependent on coal generated power. The option is to
turn it back to EPA to issue guidelines which may or may not be
particularly sensitive to a state like Kentucky, or a state
like Indiana, or a state like Ohio. And I thought that was a
good vote. And even though House Republicans opposed it, we did
pass it in the House. It died in the Senate.
So my question is, would that kind of methodology still be
an effective way to deal with carbon emissions, and if we had
enacted Waxman-Markey in 2009, would we be here today?
Ms. McCabe. Well, the President has indicated, over a
number of years, that legislation would be an appropriate way
to deal with the situation. But that is not where we are today,
and so we are using the tried and true mechanisms of the Clean
Air Act to achieve the carbon reductions that are necessary.
Mr. Yarmuth. All right. And, to your knowledge, has there
been any proposal made by anybody in the majority party to deal
with carbon emissions in any way?
Ms. McCabe. I don't want to speak for everybody, but I am
not aware of any.
Mr. Yarmuth. Right. Well, thank you very much for your
testimony and your work. I yield back, Mr. Chairman.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from Texas, Mr. Olson, for 5----
Mr. Olson. I thank the Chair. Again, welcome, Administrator
McCabe.
This is not news, but America is on course to resume its
role as the world's energy powerhouse in the 21st century.
There is no better example of that than the port of Corpus
Christi in my home state. A few months ago, for the first time
ever, they exported more oil than they imported. Making this
opportunity a reality requires common sense rules and no
overregulation. Your new power plant rule will require carbon
capture and sequestration. The CCS pilot projects are all near
oil country. Captured carbon is sold, captured, pumped down,
and used to jump start old wells. EOR is critical to viable
CCS, and you recognize that. A quote from your new plant rules
impact analysis, ``The opportunity to sell the captured
CO2 for EOR, rather than paying directly for its
long term storage, strongly improves the overall economics.''
So let us discuss EOR.
Coal is critical for power supply in the Eastern part of
our country. Do you know how many states east of the
Mississippi have a single CO2 pipeline? Any idea
what number?
Ms. McCabe. No, I don't know.
Mr. Olson. The answer is two. There is one in Mississippi,
and a small one on the Michigan/Canadian border. The one in
Mississippi is linked to the Hastings field in my district. It
is run by a company called Denbury. I visited their operations
a few months ago. They spent $2 billion on developments for the
Hastings field. But they also own the Jackson Dome area in
Mississippi, which naturally produces CO2. There is
a power plant in my district as well that captures
CO2 emissions from coal-fired power plants, and uses
them for EOR operations right there, over an existing oil
field.
Ms. McCabe. Yes.
Mr. Olson. My point is that CCS EOR will only work because
of geography and luck. My question is, if a utility decides to
build a coal plant, they want, to use a quote from your impact
analysis, ``to strongly improve the overall economics of CCS.
That means they will need a new pipeline.'' Is it reasonable to
expect utilities to successfully site, permit, finance, and
build an entire new network of CO2 pipelines? Is
that even possible for more than a few test plants?
Ms. McCabe. Well, as you have noted, EOR is a very
important use of captured CO2, does help with the
economics of a plant, but that is not to say that carbon
storage is not feasible in other places, and we expect those
types of projects to develop and be viable as coal plants of
the future are built.
Mr. Olson. But right now they are not viable without EOR,
and that is my point. We have to have some mechanism to get
this carbon dioxide to these power plants. Except for special
circumstances, geography, with the guise of the Denbury people
owning a naturally producing CO2 structure.
My final question is about reliability. And EPA says that
the new plant rule won't impact electric liability. However,
the EPA says one benefit is that, and this is a quote, ``the
proposed rule will also serve as a necessary predicate for the
regulation of existing sources.'' We don't know exactly what
the new existing plant rule will look like, but if past actions
of the Obama administration reflect the future, there will be
new burdens put upon coal. My home state is in desperate need
of more power, and reliability is one of my top concerns. Can
you guarantee that a carbon dioxide rule on existing coal
plants will put grid reliability first?
Ms. McCabe. You are asking about the existing rule?
Mr. Olson. The existing rule, any rule.
Ms. McCabe. For existing power plants?
Mr. Olson. Yes, ma'am.
Ms. McCabe. Yes. I can assure you, Congressman, that in
looking at what the guidelines would be for existing power
plants, we would have grid reliability, cost, and those
considerations very much in our minds as we go forward. And as
I have noted, the implementation of those guidelines is
something that the states will be involved with, and it will be
very much on their minds as well.
Mr. Olson. But first, number one, everything else below? I
mean, because it is important, ma'am. We have to have power to
keep going.
Ms. McCabe. It is absolutely important, and we don't
disagree.
Mr. Olson. OK. Yield back the balance of my time.
Mr. Whitfield. Gentleman's time has expired. At this time I
recognize the gentleman from Virginia, Mr. Griffith, for 5
minutes.
Mr. Griffith. Thank you, Mr. Chairman. I would have to say
that many of the things my colleagues have said I agree with,
and I do have many concerns, particularly in light of the fact
that did hear earlier from the folks who run the Mississippi
plant that that is not a practical plan anywhere else, and it
cost them a billion dollars more than they thought it was, and
only works because they are right next to the fuel source,
which is not your typical coal in the United States.
Switching gears, as established in statute and practice,
the term stationary source has a specific meaning under Section
111 of the Clean Air Act. Is the EPA considering or planning to
redefine what stationary source means for the purposes of its
pending rulemaking activity on existing electric generating
units? And here is my concern. There are some who would
believe, or have us think, that it ought to be the whole state.
So if I have got a plant, which we do, that was just opened
last year in my end of Virginia, and it is doing fine, but the
rest of the state isn't, instead of looking at each individual
plant, that the EPA may be looking at changing its rule, and
going with every state, and then all of a sudden new regs get
put on my clean plant in order to try to help the plants that
aren't as clean in other parts of the state. Is the EPA looking
at changing any of those rules in regard to the stationary
source?
Ms. McCabe. We are not looking at changing the definition
of stationary source, but what we will be doing, through the
111(d), which is the existing source----
Mr. Griffith. Yes.
Ms. McCabe [continuing]. Program, is allowing the states
the flexibility to look at how to meet a target, looking across
all of the plants, and other activities in the state, which
means that new clean plants are a benefit to the states,
because they are already making progress towards reducing
carbon emissions.
Mr. Griffith. But if you have some plants that are cleaner
than others, and the worry that I have is that oftentimes in
the past the EPA has said, well, we are going to let the state
do this, and then the EPA, behind the scenes, and this happened
on storm water management in Virginia, says, you are going to
adopt these regs, you are going to do this, or else we are
going to come in and take it away from you, and we are going to
do it ourselves. That was actual testimony in front of a
committee I used to sit on when I was in the state legislature.
So I am a little concerned that if you are going to let the
states go and look at a statewide project, maybe it is not my
new clean plant, but it is one that is a little bit newer than
some of the others. Is there going to be pressure put on the
states to then say, OK, we don't care if you have one bad
actor, or two bad actors, you have got to ratchet it up on
everybody in order to meet certain standards.
Ms. McCabe. Yes. Well, in the Clean Air Act, which is what
I am familiar with, we have a long history of working with
states, developing plans to implement the federal standards,
and there is certainly room in the process for states to be
looking at what makes the most sense for their states.
Mr. Griffith. Well, and I would like to think that we could
figure out what makes the most sense, but that has not been my
experience in the past with some of the regulations. In context
of 111(d), and regulations for existing power plants, the EPA
frequently refers to the term flexibility. I have not often
found that to be the case. And not with you, ma'am, but with
others. Does this mean flexibility in setting the standards, or
in implementing the standards?
Ms. McCabe. In implementing the standards. It is EPA's role
to set the guideline, the target.
Mr. Griffith. But if flexibility is good, shouldn't it be
good not only for implementing, but also for setting the
standards, to make sure that we are not putting people out of
business, or, as you testified a few minutes ago, making sure
that we have grid reliability? Shouldn't that flexibility be
there on both ends of that equation?
Ms. McCabe. Well, the Clean Air Act's approach over the
last 40 years has been for the Federal Government to set the
expected environmental result, and then for the states to find
flexible and appropriate ways to meet those, and that is the
way that Congress set out those provisions.
Mr. Griffith. And Congress did give, I would think, way too
much flexibility to the EPA, but that is an opinion of mine.
In regard to the Whitfield-Manchin bill, it seems to me
that it is reasonable to set standards based on actual
demonstrable technology. You would agree with that, would you
not?
Ms. McCabe. The Clean Air Act already asks us to set
standards based on----
Mr. Griffith. I am running out of time. I need a yes or no.
But you would agree that actual technology, as opposed to
theorized technology, would be preferable, would you not? Yes
or no?
Ms. McCabe. Actual technology is what we base our rules on.
Mr. Griffith. All right. And would you also agree with me
that there are high efficiency designs for new coal power
plants, such as the super-critical and ultra-critical steam
units, yes or no?
Ms. McCabe. Yes, and those are appropriate technologies,
certainly.
Mr. Griffith. And the Whitfield-Manchin draft legislation
simply requires that, for new electric generating units, the
EPA standards would be based on technologies that have been
demonstrated at operating commercial power plants, and that is
certainly reasonable, isn't it?
Ms. McCabe. That would not----
Mr. Griffith. I am out of time.
Ms. McCabe [continuing]. Be the approach of the Clean Air
Act, that has been proven over the years to work effectively in
developing----
Mr. Griffith. So is that a yes or a no?
Ms. McCabe [continuing]. New technology. I would not agree.
Mr. Griffith. All right.
Mr. Whitfield. Gentleman's time has expired. At this time I
recognize the gentleman from West Virginia, Mr. McKinley, for
5----
Mr. McKinley. Thank you, Mr. Chairman. I have got five
questions at least, if not more, but we will try to see if we
get through some quickly with it. The first is, I am just
curious, some of the earlier statements had been about that
this is commercially viable now.
Ms. McCabe. Yes.
Mr. McKinley. Because I am curious, Lisa Jackson said, back
in November of 2011, that it wouldn't be available for, and her
quote was ``maybe a decade or more.'' So I am curious how that
has moved up on the chain. And DOE put out their own report
that said it is not going to be commercially viable until 2020
as well. But you are saying it is available now. So could you
get back to me explaining why you disagree with Lisa Jackson,
and why you disagree with the Department of Energy, their
projection that it could be available? Could you get back in
writing to me, rather than answer now?
Ms. McCabe. Certainly.
Mr. McKinley. Thank you. Second is, I want to probe a
little further about you saying how coal-fired powerhouse will
be viable. You have answered that, but, as an engineer, I want
to probe a little deeper with that. When you say viable, do you
mean that will maintain that 38 to 40 percent of the portfolio
of this country of energy production?
Ms. McCabe. We expect coal to remain a substantial portion
of the energy portfolio----
Mr. McKinley. No, I asked----
Ms. McCabe [continuing]. Even under these----
Mr. McKinley. No, the question I asked was----
Ms. McCabe [continuing]. Even under the proposed----
Mr. McKinley [continuing]. Thirty-eight to 40 percent?
Ms. McCabe. That is a pretty precise number.
Mr. McKinley. OK, call it 35 to 40 percent, then, where it
is now. Is coal going to lose more under these regulations? OK,
you are the one that used the term viable. I am trying to
define viability. I would say viability is 7 \1/2\ cents per
kilowatt hour in West Virginia. Are you saying that the price
of electricity is going to go up?
Ms. McCabe. Congressman, there are a number of factors that
are affecting the power sector now----
Mr. McKinley. Will the price of electricity go up under
your definition of viability?
Ms. McCabe. I can't give you a----
Mr. McKinley. And you can't define whether or not it is
going to be the 35 to 40 percent?
Ms. McCabe. Well, there are a number of factors that go
into how much of the power in this country----
Mr. McKinley. So we could----
Ms. McCabe [continuing]. Is produced by----
Mr. McKinley [continuing]. Your term of viable, we could
have less and less use of coal. I am just concerned about all
the coal miners, and the people that work in these mines, or
the people in the industry, how they are going to find jobs, if
it is less and less, and you are saying it is viable. I am not
so sure I am into that.
Let me go to a third element very quickly with it. The
United Nations panel came out with a report. They have been
doing it periodically. They talk about that 96 percent of all
CO2 emissions are naturally occurring, and what this
whole fight is all about is just four percent. Do you agree
that it is just four percent?
Ms. McCabe. I don't agree----
Mr. McKinley. Four percent I am saying is anthropogenic.
Ms. McCabe. I don't agree that anthropogenic emissions are
not a significant factor in----
Mr. McKinley. That is not the question. State the question,
please. Do you agree with the United Nations, that said four
percent of all CO2 emissions come from man?
Ms. McCabe. I am not familiar with that statement,
Congressman.
Mr. McKinley. OK. But you will accept that under the, well,
maybe you don't, if you are not familiar with it, but I think
it was the Sierra Club, maybe Earth Justice. I know that Al
Gore has said that 30 percent of all man-made CO2
emissions come from the deforestation of our tropical rain
forests, so that would represent 1.2 percent. If it is four
percent, 1.2 percent would be 30 percent of four. But yet coal-
fired powerhouses only generate, what, do you know the number?
Ms. McCabe. They----
Mr. McKinley. Two tenths of one percent of the
CO2 emissions in the world come from American coal-
fired powerhouses, six times less than the deforestation of our
tropical rainforests. But yet, with all these regulations you
are putting at risk all the American workers in these
powerhouses, and coal mines, and all across this country. Two
tenths of one percent, you are willing to put our economy at
risk for \2/10\ of one percent. I am not comfortable with that.
Mr. McCabe. Coal fired power plants are the largest sources
of carbon in the country.
Mr. McKinley. It is \2/10\ of one percent of the global
emission, six times worse in the deforestation of our tropical
rainforests. So my question is, if we decarbonize America, that
is what you are trying to do, who are you going to blame the
next time there is a snowstorm, or there is another tornado?
Because we won't be producing CO2 in America any
longer, so who is the EPA going to blame next?
Ms. McCabe. There are many steps that need to be taken to
reduce carbon, and if----
Mr. McKinley. Who will you blame next? If we don't produce
CO2, what will be your excuse for the next tornado,
the next Hurricane Sandy? I am sorry, my time has run out.
Mr. Whitfield. Gentleman's time has expired. At this time,
recognize the gentleman from Texas, Mr. Green, for 5 minutes.
Mr. Green. Thank you, Mr. Chairman, and I would like to
thank our witness for being here. And the topics we are
addressing today at this hearing are complicated, and there are
a wide range of views. I believe it when scientists tell us
that man-made global warming is real, personally, I believe to
successfully regulate GHG emissions, Congress should develop a
regulatory program that would promote economic growth, and
provide the responsible path forward. But until Congress moves
to pass meaningful legislation, efforts such as this
legislation are not the correct way to address that issue.
Ms. McCabe, coming from Texas, in the Houston area, I have
been interested, and I know we had Secretary Moniz here a while
back. I know that Secretary Moniz visited the plant in
Mississippi this week and endorsed the technology. At this
point, where are we with that CCS technology?
Ms. McCabe. Yes, the Secretary was there and visited the
plant. The technology at that plant, and several others, is
moving forward, so we are looking forward to those projects
beginning operation, and others considering it.
Mr. Green. OK. My next question would be is CCS
technologically and economically feasible for everyone? Because
I know there have been some problems at the Mississippi plant.
Ms. McCabe. Well, the Mississippi plant has a variety of
other activities going on beyond the CCS. But the technology is
available to plants widely.
Mr. Green. And we know from other EPA studies and proposals
there is always concern about accurate data. Is the EPA 2012
proposal data still accurate enough to be effective?
Ms. McCabe. Well, we always try to base our rules on the
most accurate data, and the transparent and open rulemaking
process make sure that people have an opportunity to give us
the most up to date data. So, before we would finalize any
rule, we would make sure we had the most up to date data.
Mr. Green. Well, and again, coming from Texas, I know our
state agencies are unique, and have important information to
assist them in balancing these economic demands. Keeping that
in mind, how would you characterize the states' regulatory
efforts up to this point, and their importance moving forward?
Ms. McCabe. Well, the states are key regulatory partners in
reducing pollution in this country, and always have been, but
the system that we have relies on national standards being set
for major industries across the country, so that the pathway is
clear so that power plants built all across the country that
are of similar types would meet the same standards, and then
the states very effectively implement those rules.
Mr. Green. I guess I am still skeptical about the economic
feasibility of that. And again, I am looking forward to what
happens in Mississippi, because I represent a refining
community, and we do have storage places in Texas that you can
store the carbon.
But the President recently announced an end to the
financing of overseas coal plants in emerging markets. This,
combined with the EPA actions, are significant measures. And
again, we know what China is doing on coal, and I am sure we
are not providing any overseas financing for that, but in other
areas. Is the administration action enough to really address
climate change without strong mandatory reductions by other
major emitters, including, like, China and India?
Ms. McCabe. Well, this is a global challenge, as you have
indicated, and actions will need to be taken by many people.
Part of the President's climate plan is strong United States
leadership internationally. And one important aspect of being a
credible and strong leader internationally is to be doing the
things we need to do here at home. So the plan includes very
much both of those elements.
Mr. Green. I know the United States has reduced our carbon
emissions over the last few years for lots of reasons. You
know, downturn in the economy, more fuel efficient vehicles.
But we have actually reduced our country, but in Western
Europe, and, of course, in the emerging nations, in the
developing nations, there has been hardly any. In fact, it just
continues to grow. And I hear my colleagues from West Virginia
are concerned. We can do everything we want to in this country
on carbon, but unless our international partners and
competitors are on the same wavelength, it doesn't do us any
good, except maybe price our economy out of the world market,
and that is, I think, a lot of our concern. But I appreciate
you being here.
Thank you, Mr. Chairman. I yield back.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from Louisiana, Dr. Cassidy, for 5
minutes.
Mr. Cassidy. Thank you, Mr. Chairman.
Ms. McCabe, I am over here. Let me build a little bit on
the questions that Mr. Green just asked. Earlier this year I
introduced the Energy Consumers Relief Act to provide greater
relief and transparency about the costs and jobs impact of EPA
regulations that cost at least a billion dollars. Now, first,
let us just, if you will, kind of establish common ground. Do
you agree that EPA rules can affect the economy by raising
electricity rates for consumers, and business, and et cetera?
Ms. McCabe. I agree that it is an important issue to look
at, and a lot of information needs to be evaluated by experts.
Mr. Cassidy. Now, one of the wonderful things we are
hearing about right now is re-shoring, where companies are
bringing jobs back from places like China and India because our
cost of electricity is so much less than theirs. We can't beat
them on the price of labor, we are whacking them on the price
of electricity. So again, building on what Mr. Green said, is
it a concern at EPA that these regulations will effectively
increase the cost of that electricity to the point that we will
not have the same amount of re-shoring, the same number of jobs
being created in these energy intensive enterprises?
Ms. McCabe. We do enjoy very low energy prices in this
country, and that has been the case throughout the history of
the Clean Air Act, and improved efficiency, and lowered
emissions from power plants. So we have been able to maintain
those low prices.
Mr. Cassidy. Now, that is certainly retrospectively, but if
we speak going forward, and a lot of rules are put in which
effectively prejudice against coal, which is now, what, 40
something percent of our energy supply, do we have the risk of
undoing that? That, as we raise the cost of electricity, what
was true in the past will not be true in the future, because of
these regulations, serving as a form of attacks, raising the
cost of electricity, adversely affect the movement of jobs back
from overseas?
Ms. McCabe. The analysis that we do for this rule will be
the kind of analysis that we have done for previous rules. And
I expect that this rule will work in a similar fashion. That
is----
Mr. Cassidy. Now, I have some concern, which is why I put
forward that law, if you will, about encouraging transparency.
Again, do you accept that there should be transparency about
the potential cost of EPA regulations to ratepayers?
Ms. McCabe. EPA follows robust transparency and public
input processes for all of our rulemakings.
Mr. Cassidy. Now, you say that, but during an EPA budget
hearing this past spring, the EPA's Acting Administrator
admitted that EPA had not done sufficient economy-wide modeling
to account for the full economic impacts of its major rules,
including higher rates paid by electricity consumers as a
result of regulations.
So let me ask, will you commit that, for any regulations
relating to existing power plants, including the pending
greenhouse rules, that EPA will conduct economy-wide modeling
to measure the cost of the higher electricity rates on
households, businesses, and its effect upon the re-shoring that
we need to happen in order to recreate good jobs with good
benefits for the working class of America?
Ms. McCabe. In all of our economic analysis that we do for
our rules, EPA follows OMB procedures, and uses appropriate
peer reviewed and transparent analysis and approaches.
Mr. Cassidy. But I am trying to reconcile that with the
Acting Administrator admitting they had not done sufficient
economy-wide modeling to account for the economic impacts of
major rules. So there seems to be a little bit of discordance.
You are saying that you have, and yet he is saying that they
had not.
Ms. McCabe. No, there is no disagreement there. Economy-
wide modeling is an approach that has not been used in our
rules because there are not appropriate analytical methods to
do it.
Mr. Cassidy. Now, on the other hand, I am almost out of
time, but if you don't do that, then that gets back to where I
was going with this. If you don't do the economy-wide, we don't
understand the ripple effect, smushing, if you will, the hope
for re-shoring of jobs.
Ms. McCabe. The agency has engaged with our Science
Advisory Board to undertake right now an inquiry into the types
of appropriate models that would be used.
Mr. Cassidy. So my fear is that if you don't come to a
conclusion before these regulations are put out, the hope for
re-shoring of those jobs will not happen. Your regulations are
creating uncertainty. Business hates uncertainty. They are not
going to come back if, my gosh, all of a sudden our electricity
rates are going up, will they?
Ms. McCabe. The regulations are creating certainty, so that
plants will know----
Mr. Cassidy. But it may be certainty of higher cost. You
have not done your economy-wide modeling, and so, therefore,
you don't know whether or not the energy intensive enterprise
will suddenly find themselves priced out both on labor and on
the cost of energy, correct?
Ms. McCabe. There has been an economic analysis done on the
proposed rule. It is open for comment, and----
Mr. Cassidy. But not economy-wide, you point out.
Ms. McCabe. Because the methodologies for that approach
are----
Mr. Cassidy. So, therefore, we don't know, and so,
therefore, we may be keeping jobs from re-shoring because you
don't know, because we don't have the model. That is my fear.
I am out of time. I yield back.
Mr. Whitfield. Gentleman's time. At this time I recognize
the gentleman from Colorado, Mr. Gardner, for 5----
Mr. Gardner. Thank you, Mr. Chairman, and thank you, Ms.
McCabe, for your time here today and your testimony.
You just mentioned that, and I wanted to follow up with Mr.
Cassidy, that your regulations create certainty. You just said
that. Does your regulation make electricity more or less
affordable?
Ms. McCabe. Our regulation, as required by 111(b) of the
Clean Air Act, is intended to require for future power plants
state of the art technologies----
Mr. Gardner. Well----
Ms. McCabe [continuing]. That will----
Mr. Gardner. If you don't mind, I have a series of these
questions. Does it make electricity more or less affordable?
Ms. McCabe. The rules that we will be requiring will allow
coal plants to proceed in a way that is----
Mr. Gardner. Right, but I am trying to get to the certainty
that you said your regulation creates.
Ms. McCabe. Yes.
Mr. Gardner. If this regulation creates certainty----
Ms. McCabe. Yes.
Mr. Gardner [continuing]. Does your regulation make
electricity more or less affordable?
Ms. McCabe. We do not expect that these rules will make
electricity less affordable in this country----
Mr. Gardner. OK.
Ms. McCabe [continuing]. As plants are able to plan ahead
and build plants that will meet the requirements----
Mr. Gardner. So will it make electricity more or less
expensive, then? Maybe that is a better way to put it.
Ms. McCabe. These are the kinds of things that we look at
in our economic analysis, and----
Mr. Gardner. Right. So----
Ms. McCabe [continuing]. Everybody can----
Mr. Gardner [continuing]. To keep that certainty, and to
keep the certainty that you said these rules provide, does it
make electricity more or less expensive?
Ms. McCabe. The analysis may show that the addition of
additional equipment will increase costs to----
Mr. Gardner. OK, so there is the certainty right there. So
it will increase electricity costs, thank you. You said that
you did economic viability projections analysis. Were you at
the coal hearing in Denver that the EPA held, the listening
session in Denver?
Ms. McCabe. No, I wasn't.
Mr. Gardner. OK. So do you do economic viable studies of
communities where they produce coal?
Ms. McCabe. We do economic analysis of the proposed rules
that we are looking at.
Mr. Gardner. But, do you look at the communities, where
there is a coal mine, and there are employees there? I mean, do
you look at the economic viability of those communities, and
what happens in this rule that you are certain will make
electricity more expensive?
Ms. McCabe. I should amend what I said a minute ago, or
clarify what I said a minute ago. The analysis that we have put
forward on this rule does show that this particular rule will
not increase electricity prices.
Mr. Gardner. OK. Do you believe that overall regulations at
EPA increase the cost of electricity?
Ms. McCabe. I----
Mr. Gardner. Looking at this regulation in combination with
other regulations that have come through on greenhouse gases,
or electricity production from coal?
Ms. McCabe. There are many factors that affect electricity
prices over time, and environmental regulations have been shown
to be a very, very small aspect of what increases prices.
Mr. Gardner. Do you think those price increases have a
larger impact on people who may be on a fixed income?
Ms. McCabe. The price of electricity overall is something
that affects people. But, as I said, the contribution of
environmental regulation to those cost changes is minimal.
Mr. Gardner. All right. Just a couple of other questions.
For existing plants, do you agree that states will have a
primary role in setting performance standards for electric
generating units?
Ms. McCabe. For existing plants, the role that states have
is to design the plan at the state level that will meet the
guidelines that the EPA will establish.
Mr. Gardner. So the states will have a primary role under
the Regional Haze Program, this is what I am getting at, which
is also a program intended to be implemented primarily by the
states, EPA has been routinely disapproving SIP plans, and
seeking to impose federal implementation plans that require
plant owners to spend millions of dollars, or shut down their
units. Where states object, or challenge the EPA, EPA then
proceeds to enforce these federal implementation plans through
litigation. We have got examples of these in Arizona, New
Mexico, Montana, North Dakota, Utah, and Wyoming. Will you
provide me with an assurance the EPA will give states more
deference under its pending greenhouse gas regulations than the
agency has done under the Regional Haze Program?
Ms. McCabe. EPA, in fact, has approved the majority of the
Regional Haze plans.
Mr. Gardner. So, again, the question is will you give
states more deference under its pending greenhouse gas
regulations than the agency has under its Regional Haze
Program?
Ms. McCabe. EPA will work with the states, as we always do,
when they have the authority to design state plans, to make
sure that those state plans meet the federal target.
Mr. Gardner. And I have some additional questions. When we
had Administrator McCarthy before the committee last year, we
talked about new source performance standards for power plants,
and, in our exchange, she testified that she could not rule out
regulation of any of the 70 source categories under EPA's new
source performance standards program, which covered all types
of industrial activities. Is that still your position, that you
cannot rule any source out?
Ms. McCabe. We are focused on the actions laid out in the
President's Climate Action Plan, which has power plants as the
rulemaking that we are----
Mr. Gardner. Yes. Are there any source categories the EPA
can affirmatively rule out of greenhouse gas regulations?
Ms. McCabe. There are many source categories that EPA
regulates that we have----
Mr. Gardner. So you can't rule----
Ms. McCabe [continuing]. No----
Mr. Gardner [continuing]. Any of them out?
Ms. McCabe [continuing]. Present intention of----
Mr. Gardner. If the EPA doesn't pursue regulation of all
these emission sources, can the EPA guarantee that there will
not be lawsuits to compel the regulation?
Ms. McCabe. I can't guarantee that there won't be lawsuits.
The EPA gets sued all the time. But we make our decisions about
what to do based on the science, and priority setting, and
power plants are clearly the largest source of carbon in the
country.
Mr. Gardner. The Chairman has been incredibly indulgent of
my time. And just, finally, one last question. Can the EPA
provide an assurance that there won't be an ever expanding
suite of EPA greenhouse gas regulations?
Ms. McCabe. As I said, we are focused on the source
category that contributes the most carbon pollution in this
country.
Mr. Gardner. So there could continue to be an ever
expanding suite?
Ms. McCabe. There are a number of source categories that I
would not expect us to be looking at, in terms of greenhouse
gas emissions, and we are focused----
Mr. Gardner. Be interested in finding out what those are.
Thank you.
Mr. Whitfield. Gentleman's time has expired. At this time I
recognize the gentleman from Texas, Mr. Hall, for 5 minutes.
Mr. Hall. Thank you, Mr. Chairman.
Ms. McCabe, the Bureau of Labor Statistics reported, back
earlier in November 2013, that there were 11.3 million
Americans unemployed, including 4.1 million long term
unemployed, and they also reported 8.1 million underemployed
individuals, those working part time, or had been cut back on
the work, or couldn't find a full time job. Would you agree
that raising energy prices when we are facing such chronic
levels of unemployment is not in the best interest of the
economy?
Ms. McCabe. Congressman, we are very concerned, as you are,
about jobs in this country, and about----
Mr. Hall. I know you are----
Ms. McCabe [continuing]. The economy of this country----
Mr. Hall [continuing]. That, but just answer my question.
Ms. McCabe. We don't believe that moving forward with these
regulations will be detrimental to the economy of this country.
Mr. Hall. Well, for the last 3 years EPA has been telling
us that they don't intend to implement a cap and trade program
to regulate greenhouse gas emissions. And as recently as May
15, I think, of this year Assistant Administrator McCarthy, who
is testifying just below us here today, stated, in a response
to our committee that, ``Both Former Administrator Jackson and
I have said in the past that EPA has no intention of pursuing a
cap and trade program for greenhouse gases, and I continue to
stand by these statements.''
Yet EPA appears to be contemplating a ``system based
approach'' for regulating existing power plants. In a document
entitled ``Questions for State Partners'', which has to do with
EPA's planned greenhouse gas regulations for existing power
plants, EPA asked questions relating to measures like this:
resource planning requirements, end use energy, efficiency
resource standards, renewable energy portfolio standards, and
appliance and building code energy standards. These measures
seem to me, and maybe I am wrong about it, but they seem to me
that they are the types of programs that were included in the
cap and trade legislation that was rejected by this Congress, I
think, some 2 or 3 years ago, and I think you are aware of
that.
Ms. McCabe. Yes.
Mr. Hall. Looking at EPA's documents, that sounds like a
back door cap and trade. And I will just ask you these
questions, just get right to the point. Talking about the
planned greenhouse regulations for existing plants, is the EPA
considering requiring states to adopt these types of programs?
Ms. McCabe. No, Congressman, this is not a cap and trade
program at all. This is a program that allows states to develop
flexible state plans.
Mr. Hall. Well, you aren't whatever you are acting, in
whatever positions you take. And when EPA says the agency,
``has no intention of pursuing a cap and trade program for
greenhouse gases'', does that just mean at the national level?
Ms. McCabe. Well, it is not up to us to develop the state
plans. We are not developing a cap and trade program, nor will
we require any state to put one in place.
Mr. Hall. Well, that is my next question. I thank you for
answering it. Might EPA effectively require it at the state
level?
Ms. McCabe. It would be entirely up to the state how they
would want to approach----
Mr. Hall. OK.
Ms. McCabe [continuing]. Meeting the target.
Mr. Hall. I think that----
Ms. McCabe. A cap and trade program is not required.
Mr. Hall. I think that is fair enough, and I thank you for
your time.
Mr. Whitfield. Well, thank you, Mr. Hall, and I think that
concludes our questioners, and I am sure the people on the
third panel are delighted with that.
Ms. McCabe, before you go, I want to ask one question, or
just follow up on Mr. Gardner. Is it your opinion, your belief,
that the states have the actual authority to set the
performance standards for existing plants? Or are you saying
EPA will set the standard of performance for existing plants in
the states?
Ms. McCabe. EPA will set the target, but then the states
will have flexibility to meet that in whatever way makes sense
to them. So it does not need to be a unit by unit regulation,
or expectation.
Mr. Whitfield. And you all are working on this already,
even though you are not expected to have it until the summer of
2015, is that correct?
Ms. McCabe. Well, our proposal will be out in June of 2014.
We are gathering information right now in order to inform the
proposal that we will----
Mr. Whitfield. OK.
Ms. McCabe [continuing]. Put together.
Mr. Whitfield. OK. Well, thank you very much, and we look
forward to your coming back and spending more time with us.
Ms. McCabe. All right. Thank you.
Mr. Whitfield. Yes.
At this time I would like to call up the third panel of
witnesses, and I want to thank them for their patience, and for
the long distance that they have come. We appreciate that.
First of all, we have the Honorable Scott Pruitt, who is
the Attorney General from the great State of Oklahoma. We have
the Honorable Henry Hale, who is the mayor of Fulton, Arkansas,
which I believe is the location of the Turk plant, near
Texarkana. We have Mr. Tony Campbell, who is CEO and President
of the East Kentucky Power Cooperative. We have Ms. Susan
Tierney, who is Managing Principal of the Analysis Group. We
have Mr. David Hawkins, who is the Director of Climate Programs
at the Natural Resources Defense Council. We have Mr. Ed
Chichanowicz, who is an engineering consultant. We have Dr.
Donald R. van der Vaart, Chief, Permitting Section, North
Carolina Department of Environment and Natural Resources,
Division of Air Quality. And we have Mr. Ross Eisenberg, who is
Vice-President of Energy and Resources Policy at the National
Association of Manufacturers.
Thank you for being here, and I will recognize each one of
you for 5 minutes for your opening statement, and then we will
have some questions for you.
So, Attorney General Pruitt, we will recognize you first.
Thanks for being with us today, and you are recognized for 5
minutes.
STATEMENTS OF HON. E. SCOTT PRUITT, ATTORNEY GENERAL, STATE OF
OKLAHOMA; HON. HENRY HALE, MAYOR, FULTON, ARKANSAS; TONY
CAMPBELL, PRESIDENT AND CEO, EAST KENTUCKY POWER COOPERATIVE;
SUSAN F. TIERNEY, MANAGING PRINCIPAL, ANALYSIS GROUP; DAVID
HAWKINS, DIRECTOR OF CLIMATE PROGRAMS, NATURAL RESOURCES
DEFENSE COUNCIL; J. EDWARD CICHANOWICZ, ENGINEERING CONSULTANT;
DONALD R. VAN DER VAART, CHIEF, PERMITTING SECTION, NORTH
CAROLINA DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES,
DIVISION OF AIR QUALITY; AND ROSS E. EISENBERG, VICE PRESIDENT,
ENERGY AND RESOURCES POLICY, NATIONAL ASSOCIATION OF
MANUFACTURERS
STATEMENT OF HON. E. SCOTT PRUITT
Mr. Pruitt. Chairman Whitfield, Congressman McNerney, and
members of the subcommittee, good morning, and thank you for
the invitation to join you today to discuss concerns, from a
state perspective, of the EPA's proposed standards of
greenhouse gas emissions on new power plants. This is an issue
of great concern for Oklahoma and other states who were given
authority by Congress to develop and implement emissions
standards from existing power plants.
In recent years the EPA has expressed an unwillingness to
appropriately defer to state authority under the Clean Air Act.
The prospect of aggressive performance standards for coal based
power plants is a cause for serious concern among the various
states. The EPA has indicated a similarly aggressive approach
to existing coal based power plants, for which the President
has directed the EPA to propose standards by June 1 of 2014,
and to finalize those rules by June 1 of 2015.
While the Clean Air Act gives the EPA the authority to
develop the framework for the states to establish emission
standards for existing power plants, the EPA may not dictate to
the states what those standards should be. The states are
allowed to engage in a cost benefit analysis, and consider a
wide range of factors in setting those standards. This is
important to note because the EPA's new emission standard,
under the guise of ``flexible approaches'', mandates new coal
based power plants use costly carbon capture storage
technology. This is technology that likely remains commercially
unviable for at least a decade.
The U.S. Energy Information Administration projects coal-
based electric generation will provide 40 percent of base load
energy in this country in 2014. The elimination of coal based
electric generation would result in higher electricity prices
for our ratepayers. It would be detrimental to the national and
state economies, as well as job creation, and other things.
Increased electricity prices also will hurt the competitiveness
of American manufacturing. I, and the Attorney Generals of 16
other states, recently submitted to the EPA a white paper
outlining those concerns, and our position on both the EPA and
the states' role under Section 111(d) of the Clean Air Act. I
have submitted that white paper to you this morning.
Unfortunately, this is not the only issue at which the
states and the EPA are at odds over the scope of their
respective responsibilities. The Congressman from Colorado
referenced the Regional Haze program. Many states, including
Oklahoma, are actively engaged in legal challenges to thwart
the EPA's attempt to expand its authority under the Regional
Haze program. Under the Clean Air Act's Regional Haze rules, a
target date of 2064 was set to achieve natural visibility in
federally designated areas across the country. Regional Haze
deals with issues of aesthetics, not health, and visibility,
and safety of the public health. As such, the Clean Air Act
gives states the primary role in establishing regulations.
In Oklahoma, stakeholders joined together, worked with
utilities, to construct a plan for Regional Haze, and submitted
that in 2010, that allowed for fuel diversity, and balanced
environmental protection and the need for affordable energy.
Our state plan accomplished those objectives for the Regional
Haze rule, and exceeded the target date of 2064 by nearly 4
decades. The EPA rejected Oklahoma's state implementation plan
in favor of a federal implementation plan, which would cost the
state utilities almost $2 billion within 3 years. What is more,
the federal plan would provide less environmental benefits than
the state plan, and is estimated to increase costs for Oklahoma
ratepayers by as much as 20 percent.
Our state made the decision to sue the EPA over its
decision. This is a case of first impression under the Regional
Haze rule adopted in 2005, and will likely potentially end up
before the U.S. Supreme Court. Many states are monitoring that
case, as the decision will impact their ability to set policy
within their jurisdiction.
There is a great deal of frustration among the states with
the EPA's attitude, that it ignores the proper role of the
states as the agency attempts to expand its authority. The EPA
seems to have a view that the states are merely a vessel to
implement whatever policies and regulations the administration
sees fit, regardless of the wisdom, cost, or efficiency of such
measures. Fortunately, for the states, that is not what the law
allows. Congress clearly intended for the states to have
primacy in the areas of environmental regulation, and for the
EPA to work with the states closely to regulate those issues.
However, the EPA is attempting to usurp the role of the states,
all in the name of imposing the administration's anti-fossil
fuel mentality.
The extent and form of greenhouse gas regulation is
important to the states. The states have the experience,
expertise, and ability to regulate those issues, and must be
allowed to play their proper roles established by Congress. We
hope that by making our concerns known here today and beyond
that the EPA will respect the principles of cooperative
federalism, something that has been talked about here today,
that are all set forth in the Clean Air Act, and take a more
common sense approach to any new regulations, and include the
states in that process. If not, we will attempt to obtain
relief from the courts, and we will certainly welcome
Congressional oversight being brought to bear on these federal
agencies.
I look forward, Mr. Chairman, to answering any questions
you may have today and others, and thank you for the time this
morning.
[The prepared statement of Mr. Pruitt follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Thank you, Mr. Pruitt.
Mayor Hale, you are recognized for 5 minutes, and just be
sure to put your microphone on so we can hear you.
STATEMENT OF HON. HENRY HALE
Mr. Hale. Chairman Whitfield, and members of this
committee, it is a great honor to sit here today and testify
before the committee about the Southwestern Electric Power
Company, a unit of American Electric Power, which began serving
customers back in 1912, made the announcement in 2006 to build
a power plant in Southwest Arkansas, the John W. Turk Plant,
which later became the single largest project ever constructed
in the county where I live, with a capital investment of $1.8
billion. Hempstead County, which had been around for 195 years,
founded in 1818, is eternally grateful to SWEPCO and AEP for
their decision to build just a mile or two up the road from my
hometown. The plant went into commercial operation on December
the 20th, 2012.
SWEPCO went to great length to overcome major environmental
and legal challenges in building Turk, one of the cleanest,
most efficient coal fueled electric generating plants in North
America. It was the culmination of 6 years of successful
engineering, construction, legal, and regulatory effort. Turk
is an example of how well planned teamwork and coordination can
make a project of this magnitude come together. It is the first
power plant in the U.S. to use ultra-supercritical steam
technology, which requires a plant to use less coal, thereby
lower the level of emissions, including carbon dioxide, sulfur
dioxide, nitrogen oxide, and mercury.
The Turk plant is a 600 megawatt facility that provides
operation 24 hours a day to meet the growing electrical needs
of SWEPCO and co-op customers in Arkansas, Louisiana, and
Texas. SWEPCO realizes how important it is to plan for the
future energy supply for our states, community, and customers.
The Turk plant is good for the local economy. While America
was enduring difficult economic times, the Turk plant provided
construction jobs for a peak of over 2,000 workers, and bring
tax revenue to local government. Construction alone generates
$38 million in sale and property revenue. The plan has 109
permanent jobs, with an annual payroll of $9 million. The plant
pays about $6 million in annual school, and county, and
property tax. I certainly appreciate the tax support generated
to the local school district, which I am an employee.
But it is not about the plant. SWEPCO gave the local
college, the University of Arkansas Community College at Hope,
a $1 million grant to start up a power plant technology degree
program early on in the process. Hundreds have graduated, and
many are able to get jobs at Turk Plant, enhancing education in
a part of the State of Arkansas that desperately needed it in
recent years. The Turk team impacts the local community in a
positive way with toy drives, park improvement for nearby Hope,
Fulton, and McNab. Construction workers and SWEPCO employees
also, on site, gave their time, money, and materials to improve
the lives of others in the area.
The Turk Plant has won several awards this year, including
the Edison Award, from Edison Electric Institution, the 2013
Plant of the Year Award from Power Magazine, and 2012 Project
of the Year in the Best Coal Fuel Project category from Power
Plant.
I thank you for allowing me to speak to you this day. Thank
you.
[The prepared statement of Mr. Hale follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Mayor, thanks so much.
And, Mr. Campbell, you are recognized for 5 minutes.
STATEMENT OF TONY CAMPBELL
Mr. Campbell. Chairman Whitfield, Ranking Member McNerney,
and members of the subcommittee, thank you for the opportunity
to appear before you today. My name is Tony Campbell. I am
President and CEO of East Kentucky Power Cooperative, and I
have served in that position since 2009.
East Kentucky Power Cooperative is a generation and
transmission cooperative based in Winchester, Kentucky. East
Kentucky Power Cooperative, and its 16 owner-member
cooperatives, exist to serve the end consumer. East Kentucky
Power Cooperative generates electricity at three base load
power plants fueled by coal, and one peaking plant fueled by
natural gas. More than 90 percent of the power that is
generated is fueled by coal. East Kentucky Power Cooperative's
total generating capacity is about 3,000 megawatts, and we
employ about 700 employees. More than one million Kentucky
residents and businesses in 87 counties depend on the power we
generate. We also serve some of the neediest Kentuckians. The
household income of Kentucky Cooperative members is 7.4 percent
below the state average, and 22 percent below the national
average.
East Kentucky Power Cooperative supports the bipartisan
Whitfield-Manchin discussion draft bill as common sense
legislation that provides important guidelines and parameters
for EPA to follow in developing greenhouse gas regulations for
new and existing power plants without causing irreparable harm
to the U.S. economy. This bipartisan bill is badly needed to
ensure EPA does not promulgate a rule that jeopardizes the
country's energy future, puts electricity reliability at risk,
and severely harms the economy.
While East Kentucky Power Cooperative sympathizes with the
need to address climate change issues on a global scale, we
should not impose immediate changes to this country's electric
infrastructure, forcing utilities to rely on undeveloped
technologies as the answer. That risk may prove greater than
the issue it was intended to solve.
Congress never intended for the Clean Air Act to regulate
greenhouse gas emissions from power plants. This fact is
illustrated by EPA's attempts to promulgate greenhouse gas new
source performance standards under Section 111. The
administration's proposed greenhouse gas performance standards,
first issued in April 2012, demonstrated unequivocally that the
administration seeked to end new coal generation through
regulation. In that proposal, EPA chose not to establish a
separate standard for coal-fired units. Instead, it lumped coal
units together with natural gas fired units into a new new
source performance standard subcategory, and established a
greenhouse gas emission limit that only some natural gas
combined cycle units can achieve.
These proposed Section 111 regulations have already had a
chilling impact on electricity generation in the U.S. While the
current low price of natural gas has contributed to the decline
in coal-fired electricity generation, and the resurgence of
natural gas fired units, EPA's new regulations are an equally
important factor in this trend. In recent years, electric
utilities have faced a daunting array of environmental
regulations on all fronts, air, water, and waste, that have
contributed to the widespread coal-fired unit retirements. Coal
fired generation is essential to ensure energy diversity, and
to keep the electricity prices low.
There is also a significant national security issue that I
would like to highlight for you. In addition to the realities
and risks of rising natural gas prices, it is simply not
feasible or prudent for the nation's entire existing coal-fired
generation capacity to be transitioned to natural gas. Natural
gas generation requires transportation from natural gas wells
to power plants by an intricate network of interstate pipelines
and compressor stations that allow the gas to be constantly
pressurized. These requirements raise not only infrastructure
concerns, but also national security concerns. If a compressor
station were to fail, or become the victim of a terrorist
attack, the nation's electric grid could be placed in jeopardy.
When these natural gas supply requirements are contrasted
with coal, which is plentiful in supply, can be stockpiled at a
30 to 45 day supply, and can be transported by several
different methods without the use of interstate pipelines, it
makes no sense to require wholesale conversions from coal-fired
generation to natural gas, particularly in areas of the country
that are rich in coal resources, and are not located in close
proximity to natural gas wells.
Coal fired power plants in the U.S. only contribute
approximately four percent of the global greenhouse gas
emissions. The U.S. power fleet has already reduced
CO2 emissions by 16 percent below 2005 levels, with
CO2 from coal-fired power plants reduced by almost
25 percent. The EPA should allow coal-fired power plants to
continue to make these reductions in a reasonable manner, and
in response to market pressures, instead of by regulatory fiat.
Furthermore, the regulation at issue will not have a
meaningful impact on global climate change. The minimal impact
that these regulations will have on the environment further
underscores the need for all greenhouse gas regulations to be
economically achievable. While East Kentucky Power Cooperative
has significant concerns with the proposed regulations of the
new sources, particularly the assumptions on carbon capture and
sequestration technology, our greatest concern relates to
regulations for existing sources.
Pursuant to the consent decree with the EPA, East Kentucky
Power Cooperative has invested almost $1 billion in
retrofitting our existing coal-fired power plants over the last
decade with modern air pollution control equipment. In
addition, we have invested more than one billion, and installed
two new cleanest coal-fired units in the country. An existing
source rule that requires carbon capture and sequestration
would leave East Kentucky Power Cooperative with no choice but
to convert these units to natural gas, essentially wasting the
extensive capital investment that we have been forced to make
to lower pollutants from the coal-fired units. This would
result because there is currently no demonstrated technology
that would be able to control greenhouse gas emissions.
Mr. Whitfield. Mr. Campbell, your time really has expired.
If you would just summarize real quick?
Mr. Campbell. I will summarize. Thank you, Mr. Chairman. To
summarize, East Kentucky Power Cooperative appreciates the work
of this committee, and the opportunity to present our views of
the EPA's regulations on greenhouse gas from power plants. I
would like to reaffirm East Kentucky Power Cooperative's
support for the Whitfield-Manchin discussion draft bill.
[The prepared statement of Mr. Campbell follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Thank you very much.
And, Ms. Tierney, you are recognized for 5 minutes.
STATEMENT OF SUSAN F. TIERNEY
Ms. Tierney. Thank you, Mr. Chairman. Representative
McNerney, and members of the subcommittee, I appreciate the
chance to be here. I understand the premise for the bill you
are considering today is a concern that the EPA's actions will
have the effect of barring the ability of coal in new power
plants and existing power plants, and will have a negative
impact on electricity consumers and the economy.
In light of the market realities that we are experiencing
in the United States today and ahead, I think this concern is
misplaced for several reasons. First, various abundant domestic
energy resources are competing to supply affordable, reliable,
and clean electricity supply. That is happening now, and it is
good for Americans.
Second, EPA's taking action under Section 111 will help to
clarify the rules of the road under which coal and natural gas
will compete with each other, and with other power supplies and
technologies in the future. Having clear rules and regulatory
stability will help a positive investment environment at a time
when the nation stands to spend up to a trillion dollars on new
generating capacity in parts of the country.
Third, putting the rules in place will help EPA address
pollutants that have been found to threaten public health, and
the welfare of current and future generations, and they will
allow a pathway for coal and natural gas to be part of our
vibrant energy supply. EPA's action under Section 111 is
important for public health, and is consistent with domestic
energy resource development and use as part of a reliable,
affordable, competitive clean energy supply, and there are
several reasons why I reached that opinion.
First, coal has been the dominant fuel, and remains the
dominant fuel, used to generate electricity in the United
States in no small part because of its affordability in its
price. Second, the level of coal used has varied dramatically
over the years as new developments in technologies and fuel
developments in prices have brought about changes in the supply
mix, including nuclear power, renewable energy, and much more
natural gas.
Until recently, these economic conditions greatly favored
the use of coal, but the shale gas revolution has fundamentally
changed that situation. This other abundant domestic supply is
now economically accessible, can supply 100 years at today's
levels of consumption, and it can play an important role in
helping the U.S. reduce greenhouse gas emissions from power
supply. Abundant domestic supply of renewable energy also can
supply these outcomes.
Currently, low gas prices are putting economic pressure on
coal facilities. We see the forward natural gas prices
continuing to make it attractive to invest in natural gas, as
compared to coal-fired generator facilities. This economic
pressure is lowering, not raising, electricity prices, and has
been the case around the country, and there is more market
pressure on coal as a result of that. This has contributed to
the announcements of retirements of some of the oldest and
least efficient coal-fired generating units, and the economics
of over 100 power plants that had been proposed to be built on
coal have been gradually cancelled because of those poor
economic alternatives. Today the fuel of choice is natural gas
for power generation, as well as renewable power projects. And,
as we have heard today, it is away from coal.
The bottom line for electricity market fundamentals is that
coal and natural gas are in strong competition, will remain so.
They were at head to head to competition, in terms of market
shares, a year ago, in 2012, and coal has regained a small
portion of the competitive share that gas had taken away. These
market dynamics have been important for helping the United
States and the electric industry provide power reliably and
affordably to consumers at low prices, and that will continue.
They are affording the U.S. the opportunity to diversify, not
otherwise, its overall mix of supplies.
The industry's responses to the EPA regulations will
stimulate much needed economic activity and modernization of
the electric system. Again, the investors in this industry need
certainty, and the EPA greenhouse gas rules are providing that,
in light of the fact that they have been expected for many
years, and are on their way. The recent changes in coal use
have taken place at a time when production has remained
relatively strong, in large part because of the export growth
that we have seen.
And, finally, let me just summarize by saying that the
EPA's 111 regulations for new and existing power plants will
allow flexibility, and pathways for coal and gas to play an
important role going forward in our electricity supply.
Thank you.
[The prepared statement of Ms. Tierney follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Thank you.
And, Mr. Hawkins, you are recognized for 5 minutes.
STATEMENT OF DAVID HAWKINS
Mr. Hawkins. Thank you, Mr. Chairman. I would like to offer
a few facts for the subcommittee's consideration.
First, if we continue to use our atmosphere as a dump for
carbon pollution, we will wreck the climate. Now, coal-fired
power plants are the largest carbon pollution source in the
United States, and more than 40 years ago Congress authorized,
in the Clean Air Act, EPA to protect the public against harmful
air pollution, and Supreme Court has confirmed that that
authority includes the authority to regulate harmful carbon
pollution.
EPA is moving ahead to set sensible standards for carbon
pollution from power plants, and it is following an approach
that has been used for 43 years by seven Presidents prior to
President Obama. President Nixon, Ford, Carter, Reagan, George
H.W. Bush, Clinton, and George W. Bush, all of those Presidents
presided over EPA standard setting that looked at available
technologies to control a pollution stream, looked at whether
those technologies were transferable, or already applied in the
category being considered for regulation, and looked at what
the costs would be, and whether those costs would be
reasonable.
That is exactly what EPA has done for the proposed standard
for new coal-fired power plants, and it has based that
technology on gas CO2 capture systems, which have
been demonstrated for decades in other major industry
categories. The power sector has not used that technology yet,
but that is not an argument against EPA's proposed standards,
for the power sector did not use SO2 scrubbers, NOx
controls, or mercury controls until government required them to
use those controls.
Now, a few words about costs. Partial carbon capture, which
is the basis for EPA's standard for new coal plants, can easily
achieve that standard with reasonable added costs. What was
EPA's basis for that? Well, it looked at a number of Department
of Energy studies, and projected that a new coal plant with
partial carbon capture would have electricity production costs
about 20 percent higher than a coal plant with no carbon
capture controls. Now, the cost difference would be much less
if revenues from enhanced oil recovery sales were included.
EPA has also announced a schedule for guidelines to control
carbon pollution from existing power plants, working in
cooperation with state clean air officials. NRDC's own
analyses, using an accepted government and industry model,
demonstrates that we can achieve significant reductions in
carbon pollution from existing power plants with benefits of
about 25 to $60 billion annually, compared to compliance costs
of about $4 billion. Our approach would not require the use of
carbon capture on existing plants, though that, or any other
measure that would reduce carbon pollution, could qualify as a
compliance measure.
Now, the draft legislation by Representative Whitfield and
Senator Manchin would repeal EPA's carbon pollution authority
for existing power plants, and essentially would allow the
power sector to dictate what standards could be adopted for new
coal plants. That is not the way the Clean Air Act was written.
It is not the way any of the seven Presidents before have
implemented it. This legislation would harm Americans by
allowing excess carbon pollution from power plants that would
stay in the air for centuries, disrupting the climate that
sustains our civilization.
Ironically, the legislation would not improve the lot of
coal producers or communities in coal country. Rather, it would
destroy power sector interest in deploying carbon capture and
storage systems, the one technology that could provide a
pathway for a more sustainable use of coal.
Bills to cut Clean Air Act protections against carbon
pollution will not solve the coal sector's problems. Power
companies have choices other than coal, and as long as carbon
policy remains temporarily locked in a closet, the industry
will look elsewhere for their power investments. It makes no
sense to invest billions of dollars in a new coal plant when
there is no resolution of the rules that will apply to its
carbon pollution. Congress cannot make this problem disappear
by forcing EPA to close its eyes.
Thank you very much.
[The prepared statement of Mr. Hawkins follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Thank you, Mr. Hawkins.
And, Mr. Cichanowicz, you are recognized for 5 minutes.
STATEMENT OF J. EDWARD CICHANOWICZ
Mr. Cichanowicz. Chairman Whitfield, and members of the
subcommittee, thank you for the opportunity to speak this
morning. For more than 4 decades I have designed and tested
environmental controls for fossil power stations. This morning
I will summarize my opinion on the status of carbon capture and
sequestration, and present a few graphics to show what the
design challenges are.
CCS differs from all controls previously adopted to power
stations to date. The amount of CO2 removed from the
gas stream is at least 15 times the amount of sulfur dioxide
that is removed by flue gas desulfurization when using a high
sulfur coal. The CO2, once captured, in most cases
must be transported at least dozens of miles, and the ultimate
sink is well below the Earth's surface. All three of these
steps have yet to be conducted at full scale on a coal-fired
power station.
Let us look at a commercial design for one of the three
options to control CO2. Exhibit 1 shows the
preliminary design of a 750 megawatt power station equipped
with post-combustion control. This station was proposed, but
not actually built. The equipment in red shows the boiler and
steam turbine that produce the power. Encircled in green are
the conventional controls for the emissions of sulfur dioxide,
nitrogen oxides, particulate matter, and trace species, such as
mercury. Encircled in blue is the CO2 capture
equipment. The array of towers on the right absorbs
CO2, and those on the left regenerate
CO2. What is noticeable is the size of the
equipment. It is much larger than the conventional
environmental controls. You can appreciate why it is important
to get this design right, and get it right the first time.
The problem is that we have limited data from which to base
a design, so we must do three things with our data. The first
is to scale results from small pilots and early demonstrations
to enable designing a large commercial unit. The second is to
generalize results, or extend what we learned with one coal at
one site to the variety of coals and sites that we will
encounter around the U.S. And the third, most important, is to
make sure that all the individual components work together.
Exhibit 2 helps explain a critical step in scaling. Exhibit
2 shows the largest pilot plant operating in the U.S. right now
that is testing this particular process. It is at Alabama
Power's Plant Barry. This pilot plant treats the gas flow equal
to about 25 megawatts of capacity. The test towers for
CO2 absorption and regeneration are designed to look
like the core, like an apple core, from a commercial reactor.
So if we were designing a system for Exhibit 1 right now, we
would scale this Barry pilot plant results by a factor of 37.
For some steps, this is straightforward, and can be done with
confidence, but for many steps, it cannot be done. There are
two other methods to capture CO2, the pre-combustion
method that is used with gasified coal, and oxycombustion. I
believe all three options, given time, have an equal chance to
be commercially proven.
There are additional pilot plants and demonstrations coming
on line in the next few years, but their numbers are few, and
the results will take a while to acquire. Exhibit 3 shows a
timeline of pilot plants, small commercial, and demonstration
units that I think will influence CCS feasibility in the U.S.
Most of these are in North America, but several are in Europe.
The timeline shows the date when operations begin, and, on the
vertical axis, it shows the size of the test or demonstration
unit, in terms of the equivalent capacity.
I have included both pre-combustion and oxycombustion
options on the chart, and these are distinguished by different
symbols. I have also distinguished between projects that are
operating or under construction. Those are the ones with the
symbols filled in, which I understand you can't see real well,
but they tend to be more in the lower left. The projects that
are not yet financed are represented by the open symbols.
Although the Great Plains Synfuels Unit has operated with pre-
combustion control for years, we need to generalize results
beyond the lignite fuel that it uses and the co-production of
chemicals and power.
The final graphic highlights the utility demonstrations in
the circle on the right. Exhibit 3 shows that only a few
demonstration projects will be operating in the next several
years. And, please, recognize the importance is not the start
date, but the date when we acquire experience that we can use
in coming up with a design, and that will be several years from
startup.
There are equally challenging issues concerning
CO2 sequestration or re-use. These include, for
example, the distribution of CO2 sinks throughout
the U.S., the predicted 5 to 10 year period to confidently map
the details of the site, and the potentially confounding role
of property rights. My written testimony further addresses
these topics.
In summary, CCS, at some time in the future, may prove a
feasible technology to control CO2 emissions. In my
opinion, we need until about 2020 to make this assessment with
a reasonable degree of confidence. CCS is not commercially
proven now. For it to be so, we need to populate that circle on
the right with many more symbols, and the need to be closed,
showing financed operating units not open.
Thank you for your time.
[The prepared statement of Mr. Cichanowicz follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Thank you very much.
And, Dr. van der Vaart, you are recognized for 5 minutes.
STATEMENT OF DONALD R. VAN DER VAART
Mr. van der Vaart. Good morning, Chairman, and members of
the committee. I am with the State of North Carolina. Thank you
for the----
Mr. Whitfield. Your microphone----
Mr. van der Vaart. Sorry. I am with the State of North
Carolina, and I appreciate the opportunity to testify today.
Before I comment on the specifics of EPA's use of Section 111
of the Act, I wanted to note issues that my comments will not
address.
First, my comments are not about the scientific uncertainty
of the impact anthropogenic greenhouse gas emissions have on
climate. My comments do not address the accuracy or inaccuracy
of the IPCC models relied upon by the EPA, or the divergence
between the models' predictions and the actual temperatures
over the past 15 years. These issues are critical to any
decision on whether, in the absence of Congressional
authorization, the EPA should regulate greenhouse gas emissions
from stationary sources.
Against this background, I offer three specific concerns
about EPA's current actions to regulate greenhouse gas
emissions from fossil fuel fired electric generating units.
First, EPA is required by Congress to base any new source
performance standard on the best system of emission reductions
that the Administrator determines has been adequately
demonstrated. The EPA has recently proposed NSPS for utility
units, assumed carbon capture and storage, or CCS, has been
adequately demonstrated. One need only look at the yet to
operate Kemper County Energy Facility in Mississippi, with its
substantial governmental funding, as prima facie evidence that
the EPA's conclusions are unsupported.
Even if a state is blessed with the requisite geologic
formations, facilities would be required to build miles of
pipeline simply to reach the formation. EPA's proposed approach
will pit the reliability of this nation's electricity supply
against the considerable uncertainty of environmental
permitting of these pipelines, superimposed on an unproven
technology of CCS. Sound science, rather than speculation,
should drive environmental regulation.
Second, the traditional function of Section 111 was to
protect, or grandfather, existing facilities to prevent their
migration to less polluted areas of the country. The 1990
amendments to 111(d) were true to this tradition by prohibiting
the overlap of 111(d), for existing sources, with two other
programs in the Act. Section 111(d) prohibits EPA from
regulating pollutants from source categories regulated under
Section 112. In 2011, EPA issued regulations under Section 112
applicable to fossil fuel fired electric generating units,
thereby foreclosing regulation under Section 111(d).
In the past, EPA has suggested that there is a conflict in
the statutory language of Section 111(d) with regard to whether
the 112 prohibition was pollutant specific or source category
specific. This is a false choice, as there is no internal
conflict in Section 111(d). Prior to 1990, Section 112 was
pollutant specific. In 1990, the structure of Section 112 was
changed from one that regulated pollutants to one that
regulated source categories. To prevent overlap with the newly
structured 112 program, 111(d) was augmented to exclude not
only Section 112 pollutants, but also Section 112 regulated
source categories. The two exclusions are entirely self-
consistent, and should not be used to invoke Chevron deference.
Section 111(d) also prohibits regulating pollutants listed
under Section 108. A pollutant must be listed under Section 108
when three criteria are satisfied. Those criteria were
satisfied when EPA published its endangerment finding under
Section 202. While North Carolina takes no position on whether
EPA should establish NAAQS for greenhouse gases, all of the
conditions necessary to list greenhouse gases under Section 108
have already been met. The listing in itself prohibits EPA from
regulating greenhouse gas emissions under Section 111(d).
Indeed, EPA may already be under a pre-existing non-
discretionary duty to issue criteria and simultaneously propose
a natural ambient air quality standard for greenhouse gases.
Finally, in the case where EPA does have authority to
establish emission guidelines under Section 111(d), that
authority is limited. EPA is not authorized to impose emission
standards on existing sources. Rather, EPA can only establish a
unit specific guideline that describes what control
technologies have been demonstrated. Once EPA provides that
guideline, Section 111(d) allows states to develop unit
specific emission standard after considering many factors,
including the cost, physical constraints on installing
controls, and the remaining useful lifetime of the emission
units.
The plain language of the Act, as well as the legal
precedent, precludes EPA and states from designing a standard
that relies on reductions made outside of the emission unit.
Any flexibility in compliance with a standard based on a
specific emission standard resides with the states, who have
the primary responsibility for implementation of this program.
Thank you.
[The prepared statement of Mr. van der Vaart follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Thank you very much.
And, Mr. Eisenberg, you are recognized 5 minutes.
STATEMENT OF ROSS E. EISENBERG
Mr. Eisenberg. Thank you. Good afternoon, Mr. Chairman.
Members of the subcommittee, thank you for having me today, on
behalf of the NAM.
We are at a crossroads on energy and climate. Our nation is
truly awash of every single type of energy, be it oil, gas,
coal, nuclear, renewables, energy efficiency. This robust all
of the above portfolio and policy, and our commitment to it, is
helping fuel a manufacturing resurgence in this country. It is
a good thing.
However, the very same government that is presiding over
this, and is benefitting from this, is perilously close to
enacting policies that would stop us from using most of this
energy, and many of these decisions would be irreversible, and
could limit manufacturers' long term competitiveness.
Now, manufacturers are committed to protecting the
environment through greater environmental sustainability,
increased energy efficiency and conservation, and by reducing
greenhouse gas emissions. We believe that policies to reduce
greenhouse gases, whether legislative or regulatory, must be
done in a thoughtful, deliberative manner, and transparent
process that ensures a competitive, level playing field for
U.S. companies in the global marketplace. And it should focus
on cost effective reductions, be implemented in concert with
all major emitting nations, and take into account all relevant
greenhouse gas sources and sinks.
Unfortunately, our government has settled on a climate
policy that really meets none of these objectives, regulation
under the Clean Air Act. But as inflexible and unforgiving as
the Act tends to be with respect to greenhouse gases, many of
the choices that EPA is making to implement the Act for
greenhouse gases are equally problematic.
We know, from the President's Climate Action Plan, that he
believes the only way to reduce greenhouse gases in the U.S. is
to stop using fossil fuels. We disagree. We believe that we can
use fossil fuels, while also innovating and manufacturing the
technologies needed to limit the resulting emissions. However,
EPA's greenhouse gas NSPS regulation set us on a clear path
toward elimination, and nothing else. And so what really should
be a policy on climate winds up looking suspiciously like a
means to an end.
The standard for new power plants bans conventional coal-
fired power, based on EPA's assertion that partial CCS has been
adequately demonstrated, taking into account costs and energy
requirements. We know this isn't true. We have talked about it
a lot today. While we believe CCS holds great promise as a
technology, and should happen, it is simply not ready to be
deployed the way the EPA insists it will be in the near term.
And because it is not commercially available, this, and all
future NSPS for greenhouse gases are essentially a line drawing
exercise in what energy we can and we can't use. Right now EPA
is drawing that line to eliminate coal, and to allow everything
else. But these standards are reviewable every 8 years, which
means 8 years from now EPA will be redrawing that line, and the
same arguments being used to crowd out coal today could very
well be used to do the exact same thing to natural gas.
Regulations that result in the limitation of coal or gas
could pose serious problems for manufacturers. Coal was
responsible for 37 percent of our nation's electricity in 2012,
followed by gas, at 30 percent. These fuels will remain the
dominant sources of energy in the U.S. for many years, and the
nexus is even more profound at the state level. States where
manufacturing is heaviest, places like Indiana, Michigan,
Louisiana, Kentucky, Kansas, Pennsylvania, Ohio, they use a lot
of coal, and they use a lot of natural gas.
And so now EPA is going to have to draw that line not only
on the new fleet, but on the existing fleet of power plants in
a little more than 6 months. Then it will have to do it for
other industrial sectors, like refineries and chemical
manufacturing, natural gas drilling, iron and steel, aluminum,
cement, pulp and paper, glass, food processing, and many
others. That is why we frequently say that manufacturers will
be hit twice by these regulations, both as users of the energy
being regulated, and as industries considered next in line to
receive similar regulations from EPA on their own plants.
And that is why the choices EPA is making in this rule
matter. The legal issues, like when a technology is adequately
demonstrated, and what constitutes significant endangerment,
matter beyond just this rule, because every sector has a
stretch technology that doesn't make a lot of financial sense
right now, but would theoretically reduce emissions. So is this
now what NSPS is going to require for each of them?
Now, I suspect that the members of this subcommittee, both
Republican and Democrat, would prefer that EPA take a different
approach to greenhouse gases than it has done so far. I still
believe you can do something about it. We at NAM support the
Whitfield-Manchin bill, which allows the EPA to regulate
greenhouse gases, but ensures that the regulations are done
smarter and better.
Now, opponents are calling this a repeal bill. That is not
true. This bill doesn't repeal anything. For new power plants,
it requires separate standards for coal and gas, with sub-
categorization. It provides a reasonable path forward for CCS,
which allows the EPA to require it, but only when it is truly
ready. And, finally, it allows the EPA to craft rules or
guidelines for existing power plants. It doesn't stop them from
doing it. It just gives Congress a say over when they are OK,
and when they can say go.
The Whitfield-Manchin bill, at the end of the day, would
give manufacturers regulatory certainty by preserving an all of
the above policy. Had the proposed rule that we are discussing
today looked like that portion of the Whitfield-Manchin bill, I
think we are having a different conversation. By enacting this
bill, Congress can steer the EPA toward an end result that
accomplishes long term meaningful reductions in greenhouse gas
emissions, while preserving a health and robust manufacturing
sector.
Thanks. I look forward to your questions.
[The prepared statement of Mr. Eisenberg follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Well, thank you, and thank all of you for
taking time to be with us, and for your testimony.
Attorney General Pruitt, Ms. McCabe talked about the
cooperative spirit with the states, and I know that many states
that I have heard from are quite concerned about EPA setting
standards and not working in a cooperative way, becoming more
and more aggressive with states. What has your experience been?
Would you classify your experience with the EPA on recent rules
and regulations in a cooperative way, or has it been an
adversarial way? How would you describe it?
Mr. Pruitt. Well, Mr. Chairman, two responses. I think,
under 111(d), it is very clear that Congress intended that
cooperative federalism be alive and well, as it relates to that
particular section. Our experience with the Regional Haze rule
that I mentioned in my comments demonstrates that the EPA has
taken a different approach respecting the role of the states in
cooperative federalism.
Under that rule, as you know, the states are authorized to
determine the methodology, the process, the plan, to meet the
guidelines that you, in Congress, and the agency has set, which
is natural visibility by the year 2064. Oklahoma did just that
in the year 2010, and beat the deadline by decades. But the EPA
rejected the plan, and simultaneously endeavored to force upon
the State of Oklahoma a federal plan that would cost $2
billion, primarily because, Mr. Chairman, in my estimation,
fuel diversity was maintained. Coal plants, along with natural
gas, were maintained. Fossil fuels were being utilized in the
plan, and the EPA didn't like that, and rejected the plan.
So, though we have talked a lot about that today, and Ms.
McCabe made reference to cooperative federalism, I guess I will
draw upon President Reagan's comment in the '80s about trust,
but verify, with respect to foreign policy. The states have
routinely endeavored to trust and work with the EPA, but, in
response, particularly around the Clean Air Act, and the
Regional Haze Program, it has not been demonstrated that they
are, in fact, respecting the states' role.
Mr. Whitfield. Yes. Well, thank you, Mr. Pruitt.
Mr. Hawkins, and Mr. Eisenberg, I want to thank you for
your comment, but you used the word repeal, that we were
repealing their authority, the EPA's authority, under our
legislation, and we actually don't repeal it. We set some
parameters, and, on the existing plants, the only power that
Congress would have would be to set the effective date.
But in the larger context, all of us understand that coal
is not being used as much today, certainly for new plants,
because natural gas prices are so low. We definitely understand
that. And I think Mr. McKinley made a great point. 805 billion
tons of CO2 emissions each year, about 3.5 percent
of that is man-made, and fossil fuel, U.S. coal plant
emissions, amounts to, like, \2/10\ of a percent.
So then it raises the question of moving forward, we live
in a very unpredictable world. We don't know what is going to
happen. Why should the U.S. be the only country in the world
that has standards so stringent on emissions that practically
you cannot build a new coal powered plant? As I said in my
opening statement, Europe is closing down 30 gigawatts of
natural gas plants, mothballing them, because of high natural
gas prices, and they are building more coal powered plants.
And so why are we taking these extreme efforts that would
basically eliminate coal from new opportunities only in
America? And I would like to hear all of you, if you want to
make it brief. Yes, Mr. Hawkins, you go right ahead.
Mr. Hawkins. Well, to begin, the United States is not the
only country that is requiring carbon capture performance on
coal plants. The United Kingdom does, and our neighbor to the
north, Canada, does. Both of those countries have in place
rules and----
Mr. Whitfield. But are the emission standards as stringent
as here?
Mr. Hawkins. The Canadian standards----
Mr. Whitfield. Could you build a Turk plant in Canada, or--
--
Mr. Hawkins. The Canadian standards apply to new plants and
to existing plants, after they reach 40 years of life.
Mr. Whitfield. Well, let me just say, and we can talk about
this some more, I have had some discussions with people about
that, and it is my understanding that they are significantly
different. But I would just tell you, when \2/10\ of the
emission comes from coal plants in all the emissions worldwide,
this is, in my view, a pretty extreme position. All we are
saying is, with our legislation, we want it to be an option
that people would have the opportunity to utilize it.
Mr. Hawkins. Mr. Chairman, may I say one word about natural
versus man-made? The statistics that you are citing are
confusing what are natural fluxes of hundreds of millions of
tons that go out of the ocean every year, hundreds of billions
of tons that go back into the land every year. There are no net
emissions from those huge transfers. The only net emissions are
caused by human activities, and man is responsible for 100
percent of the increased emissions. These natural fluxes have
nothing to do with----
Mr. Whitfield. Well, all I am saying is that the
Intergovernmental Panel on Climate Change, the Energy
Information Administration, and EPA have said 803 billion tons
total emissions, and man-made, 3.5 percent.
Mr. Hawkins. Yes, but they include equal amounts out and
equal amounts in from the natural system. So those natural
systems that are included in those 800 billion add nothing to
the atmosphere.
Mr. Whitfield. So do you think we might be able to anything
with our legislation that you will support us?
Mr. Hawkins. To do what, sir?
Mr. Whitfield. Do you think we could do anything with our
legislation in which you would support us?
Mr. Hawkins. With your legislation? Yes. You could change
it around so that you would return to some of the provisions
that were in the Waxman-Markey bill, which this committee did
report out, and this House did approve, with seven or eight
Republican votes at the time. You could turn it into a program
that would actually deploy carbon capture and storage. And if
you did, we would support it.
Mr. Whitfield. Thank you.
Mr. McNerney, you are recognized for 5 minutes.
Mr. McNerney. I thank the Chairman, and I thank all the
witnesses. I know it is a long trip, it is a long day, and it
is an issue with a lot of different perspectives.
In 2011, I am going to direct a question to you first, Ms.
Tierney, the American Electric Power proposed to develop a
large CCS plant in West Virginia, but they had to cancel
because, as the CEO explained, without federal carbon pollution
standards, it couldn't get recovery for that investment. You do
work with executives. Is that a typical experience?
Ms. Tierney. Yes. It is common, if a regulated utility does
not see that they are required to do something, they have a
difficult time making the case before regulators about a cost
associated with that. So that was what was behind the AEP
decision to cancel that project.
Mr. McNerney. OK. One more question. In your testimony you
mentioned that the EPA rules will address public health and
help ensure that coal and natural gas remain viable. Would you
expand on that a little bit?
Ms. Tierney. Yes. Right now it is clearly the case that, as
I mentioned, the investment choices that are being made by the
electric industry are for renewables and natural gas projects.
Coal is just simply too expensive, too large a capital
investment to make, and too risky, with regard to what will
happen with controls on carbon in the future.
So having certainty, such as that which EPA will be
introducing with their guidance on existing rules, excuse me,
guidance on existing plants, and their regulations on new
plants, will provide a framework under which people can make
investments, push technology forward, so that eventually we can
find a time when coal and natural gas, with carbon capture and
sequestration, can go forward. And I am speaking of coal when I
say that.
Mr. McNerney. OK. Mr. Hawkins, you mentioned that the
benefits basically outweigh the costs. I think you mentioned a
$20 billion benefit for a specific case, compared to a $4
billion cost. Could you describe that a little bit?
Mr. Hawkins. Yes. This was an analysis that NRDC did of an
approach to regulating existing power plants, and those 25 to
$60 billion benefits were a combination of health benefits
associated with reduced soot and smog pollution from the power
plants whose emissions would be cut, as well as climate
protection benefits based on the administration's earlier
social cost of carbon calculations, on what is the benefit of
reducing a ton of carbon. Those were the earlier benefits
costs, not the current higher costs. So that was the basis of
the conclusion.
It does cost something. It is not a free program. But $4
billion in a several hundred billion dollar a year industry is
definitely a digestible cost. And when you compare that to the
25 to $60 billion in public health and climate protection
benefits, this is a bargain.
Mr. McNerney. Thank you. Well, this next one is going to be
addressed to you as well. In 2008 coal supporters trumpeted new
technologies to reduce carbon emissions from coal, while
providing affordable electricity. Now, there was a lot of
optimism at that point. I would like to show another TV
advertisement that was produced in 2008 from the coal industry.
[Video shown.]
Mr. McNerney. So what that shows is the coal industry was
willing to spend money to put out advertising on TV to promote
this. There was a lot of optimism in 2008. Was the coal
industry right? Did they have the technology ready to go, or
was that a fantasy at that time?
Mr. Hawkins. As far as carbon capture and storage is
concerned, I still believe it.
Mr. McNerney. Where did all that spirit and optimism go?
Mr. Hawkins. Well, unfortunately, when faced with a
requirement to actually perform to these promises, the industry
has taken a very short-sighted view, and basically said, no,
what we want to do is block EPA. And the legislation would
prevent power sector customers of coal to actually be able to
finance plants, because those plants would not be in
anticipation of any future EPA regulation, because EPA couldn't
consider the results if there was any government money in them,
and the financing wouldn't happen unless there were some
government money, because there were no requirements. It is a
perfect catch-22.
Mr. McNerney. Thank you. I yield back.
Mr. Whitfield. Gentleman's time has expired. At this time
recognize the gentleman from Texas, Mr. Olson, for 5----
Mr. Olson. I thank the Chair, and welcome to our witnesses.
I know it has been a long morning, so I would like to pick you
up with a greeting we say in Texas. Howdy, you all.
My first question is to you, Mr. Eisenberg. As you know,
sir, we have the world's strongest economy, and highest quality
of life, because we have cheap, reliable sources of power.
Reliable power is a matter of life and death in many cases for
average Americans. But below that, cheap, reliable power is
critical to the manufacturing revival we are seeing all along
America, and along the Texas Gulf Coast, the whole Gulf Coast.
No company would invest in a multi-billion dollar project if
they have to constantly rely on backup generators, or worry
about the power going out. Can you describe how electric
reliability and rates impact investment decisions?
Mr. Eisenberg. Absolutely. Thank you for the question. For
many manufacturers, and certainly a substantial portion of my
membership, for many of them, energy is their single greatest
expense. So they are going to go, and they are going to build,
and they are going to expand where energy is reliable, where it
is affordable, and, yes, I mean, where they can get it, and
where they can get it cheaply.
I listed, I don't know, five or six states in my testimony
where there is this unbelievably evident nexus between coal,
natural gas, manufacturing. I mean, I could have listed 25
states. I could have listed 35 states. If you look at a map,
that is where the manufacturing is. It is where energy is
inexpensive. And I am not saying that it only has to be those
two. There are plenty of places in the Northeast, and in the
West, in the Pacific Northwest, where we are using hydropower,
renewables, and other things like that, and nuclear.
But energy matters. It matters a lot to manufacturers. It
may not be the only thing that matters, but for a lot of them,
it is a very, very, very large part of why they make a decision
to locate in a certain place, or to expand in a certain place.
Mr. Olson. Thank you for that answer, sir.
Question for you, Mr. Campbell. You mentioned in your
testimony that your utility serves some of the neediest people
in Kentucky. And I know that during the recession, the number
of people behind on their electric bills skyrocketed, exploded.
It is a real cost to consumers, and your consumers in
particular. Can you tell me how price sensitive the residents
you serve are? I mean, how much does it hurt them if prices go
up?
Mr. Campbell. Well, the people we serve are some of the
poorest people in Kentucky, and cooperatives, by their nature,
serve a lot of the poorer part of the country. But let me give
a relation to East Kentucky Power Cooperative. Over the last
decade, we have doubled the price of our power, and a large
portion of that is because of the consent decree that forced us
to put on some of the scrubbers for nitrous oxide and sulfur
dioxide early. We did it early. And they are very sensitive
being able to afford our power.
And if we look at CO2 right now, and I will just
use the President's suggestion of a cap and trade program, and
$38 a ton for CO2, our revenue this year is about
$900 million. And if we had $38 a ton tax on top of that for
every CO2 ton that we released, that would increase
us about $470 million, so that is going to be another 50
percent rate increase on some of the poorest people in the
country. So they are going to have to start to choose, can they
afford medicine, can they afford food, or are they going to
afford electricity?
Mr. Olson. So basically their whole life is impacted
dramatically by these increases in costs? I mean, they might
not buy health care, which means they will be more prone to all
the bad problems we have in our health care industry right now.
They won't have the jobs. I mean, this is not just something
that is in Kentucky. This is all across the country.
Mr. Campbell. That is correct.
Mr. Olson. And my final question, I have got 25 seconds
here, is for you, Dr. van der Vaart. The EPA has very concrete
benefits to claim, few of them, in the proposed new plant rule.
It will, however, help them check an important box. The EPA
crows in the proposal that one benefit is that, and this is a
quote, ``The proposed rule will also serve as a necessary
predicate for the regulation of existing resources.'' This rule
has always been about cutting new plants off at the knees so
they can focus on existing ones. As we look at the costs and
benefits of the new plant rule, should we also be considering
the costs of a sweeping rule on existing plants?
Mr. van der Vaart. Yes. Obviously, under Section 111(d),
the states, when implementing the standard, have the duty to
consider costs. I think that what you raise is an interesting
facet of the new source. It is a required predicate for the EPA
to pursue a 111(d) program for existing sources. I think it is
also a predicate to their true desire, which is a cap and
trade, and they are trying to use a very stringent new source
standard, perhaps, as a bogey for that. And they are trying to
use the word flexibility to hide their desire of including off
the fence, or off the property, reductions that go into a cap
and trade so-called target.
Mr. Olson. Thank you, sir. I am way above my time. I am
much obliged for your answers. Thank you, Mr. Chairman.
Mr. Whitfield. Gentleman's time has expired.
At this time recognize the gentleman from Texas, Mr. Green,
for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. Again thank our panel.
Mr. Eisenberg, there is concern about regulations having
economic impact on manufacturers, and, of course, the cost of
their electricity, like you just said. Are any of your members
manufacturers of CCS technology?
Mr. Eisenberg. They are.
Mr. Green. Are they optimistic about the economic output
related to the manufacture of this technology moving forward?
Mr. Eisenberg. You know, they are. They, like NAM, believe
that we can have this technology, and that it can work. The
issue is when? You know, and one thing that has come up
throughout the course here is, this bill actually is relatively
consistent with what everybody else has been saying as to when
CCS has been available, and a lot of my members are telling me
that as well. EPA, in last year's rule, said that CCS would be
available 8 years from whenever the rule was enacted, 2022.
Waxman-Markey would have required, I think four gigawatts of
demonstrated and achievable CCS, and then wouldn't require it
for 4 years after that. So this is entirely consistent.
So it is a long winded way of getting to our members do
think that we can get there. I think we can get there. I just
don't think we are there right now.
Mr. Green. OK.
Dr. Tierney, the current EPA proposal created separate
categories for natural gas and coal. In this legislation, there
is a further subdivision of coal. Now, if you can't tell from
my accent, I am from Texas, and we burn dirt and call it coal,
but natural gas has been our fuel of choice, and it has grown
substantially. Does the additional category have any economic
cost or benefit to it?
Ms. Tierney. To whom was that addressed?
Mr. Green. Ms. Tierney.
Ms. Tierney. I am sorry. Because I wasn't expecting this to
come to me, did you say at the very end that this raises costs?
Mr. Green. Well, no, I wanted to know, the current EPA
proposal separates categories of natural gas and coal. In this
legislation, the further subdivision of coal, does this
additional category have any economic cost or benefit to it, if
there is a separate----
Ms. Tierney. Yes, I think it does have a benefit to it,
because it allows for a different treatment of coal relative to
natural gas by size and category of technology. So, yes, it
does provide more flexibility inherently with those two
categories.
Mr. Green. Well, that concerns me somewhat.
Mr. Pruitt, in Texas we have lots of natural gas, and we
are discovering more and more each day. And I know Oklahoma is
our neighbor, and, if you all would leave our football players
at home, we would be really happy.
Mr. Pruitt. We don't want to do that, Mr. Green.
Mr. Green. Natural gas continues to expand its footprint
for fuel, for power generation. Can you comment on the role of
natural gas in your state's power generation/fuel mix?
Mr. Pruitt. I mean, as Attorney General, many of us across
the country represent ratepayers----
Mr. Green. Yes.
Mr. Pruitt [continuing]. Before our respective corporation
commissions as these types of discussions ensue. And I think
the most important thing is fuel diversity. I think the
utilities need the ability to choose between natural gas and
coal, other forms of energy, to provide electricity to their
consumers. I think when policy is being used, regulation is
being used, to pick winners and losers, elevating certain
energy over others, it is detrimental, ultimately, to the
consumers in our respective states.
Mr. Green. And I can see that. The other issue is that we
have had environmental laws for many years, and this would
overlay it with carbon. And I know you don't do some of the
things in producing electricity, I mean, like NOx.
That was built into the cost of our utility providers. But
carbon sequestration, or control, would be just added
additional cost.
But if you are comparing coal with natural gas, or wind,
and I don't know Western Oklahoma very well, but I know West
Texas, and parts of South Texas, and the wind power growth has
just been amazing. We know there are no carbon problems with
wind, or even solar, if someday we get to it in our part of the
country. But natural gas is half the carbon footprint of, for
example, coal. So natural gas would probably be the fuel of
choice, if we ended up going more for carbon sequestration.
Mr. Pruitt. And I think that is, in fact, happening, as far
as utility companies, because of the low cost of natural gas
presently.
Mr. Green. Yes. It is based on cost now, not because of the
environmental impact, I guess, of natural gas.
Mr. Pruitt. Perhaps, but I think that base load energy
between coal and natural gas, fossil fuels generally, it is
ultimately very important to utility companies to have the
ability to choose what is the best source of their energy as
they provide the electricity to the consumers.
And Congressman, I think the issue for the states is that
ultimately there is a role for us to play. It has been
recognized here today by Ms. McCabe and others, and we see,
under the Regional Haze Program, and we are concerned about,
under this particular proposed rule, that the state's role will
be diminished, and that the cost benefit analysis will be not
properly addressed by the EPA. And that is the reason we are
concerned about that, prospectively.
Mr. Green. OK. Thank you, Mr. Chairman. I know I am over
time.
Mr. Whitfield. Gentleman's time has expired.
At this time recognize the gentleman from Virginia, Mr.
Griffith, for 5----
Mr. Griffith. Thank you, Mr. Chairman. I would point out
several times folks have said that, obviously, power companies
want to build gas power plants, which is certainly true,
because of the cost of natural gas, but I also think, and, Mr.
Campbell, I am going to direct this question towards you. I
also think that power companies would be looking more at coal
if they thought they could build something that would be
effective, because the price, most recent that I have is
September, is 3.62 per 1,000 cubic feet for natural gas. And
experts have previously testified in front of this committee at
$4 you are at a position where you are breaking even on the
production of the energy between coal and natural gas. And a
couple times this year we have actually gotten up to that $4
level, and people project over the next few years that we
probably will break that $4 level on natural gas.
And isn't it true that most electric power companies like
to have a diversity so that if natural gas prices spike, they
can rely on coal, and if coal prices spike, they can rely on
natural gas, and also look to other resources? Is that not
true? Is my understanding correct?
Mr. Campbell. That is absolutely correct. In fact, our
strategy in Kentucky, at East Kentucky, is to diversify our
portfolio naturally. We will probably go to a little bit more
natural gas, because we realize there are regulatory risks out
there too. But we think a healthy diversity of fuel is good for
all of us.
Mr. Griffith. Now, your headquarters is a little bit
outside of my district, but I do touch Eastern Kentucky, down
on the southwestern end of my district, and I also represent a
lot of folks who are struggling to make ends meet. And you
believe that these new regulations, if we don't pass the
Whitfield-Manchin bill, will cause the electric prices to go up
for those people, don't you?
Mr. Campbell. I do believe that they will naturally make
costs for those people to go up. I believe the new source
performance standards, with low natural gas, if you assume that
will go to gas, that will probably keep the rates steady. But
if you look into the future, and we all have a mad dash to gas
because we are not going to clean our coal plants up with CCS,
carbon capture and sequestration, that is going to drive costs
up.
Mr. Griffith. And the programs, in my area, at least, if we
get a cold winter, the programs that help people heat their
homes who can't afford it, they don't last all winter. Is that
true in your area as well?
Mr. Campbell. We do. They run out of funding, and churches
help, and some people just have to live with less electricity.
Mr. Griffith. And what they do is they end up crowding into
one room, several people, or, if it is an elderly person living
alone, they just heat one room. Isn't that what they do you in
your area as well?
Mr. Campbell. That is correct. Yes, sir.
Mr. Griffith. And that is a shame, isn't it?
Mr. Campbell. Yes, sir.
Mr. Griffith. And policies from the Federal Government
really ought not do that to people, where they make these
choices, isn't that correct?
Mr. Campbell. Yes, sir.
Mr. Griffith. And you have seen studies that also would
show that that affects their health, doesn't it?
Mr. Campbell. It does.
Mr. Griffith. In a negative way, not a positive?
Mr. Campbell. Yes. Electricity has really increased the
life expectancy of the people of the United States. No one can
not say that electricity hasn't improved our lives.
Mr. Griffith. And affordable electricity makes that even
better?
Mr. Campbell. That is correct.
Mr. Griffith. Dr. van der Vaart, if I might ask you, as a
regulator, and as a lawyer, as a legal matter, under Section
111(d), the issue, in terms of setting carbon dioxide standards
of performance, is what is achievable at an existing electric
generating unit. Isn't that correct?
Mr. van der Vaart. That is correct.
Mr. Griffith. And I would ask both you and Attorney General
Pruitt, as regulators, can you discuss your concerns about the
EPA seeking to regulate beyond the scope of its authority in
planned regulations of existing electric generating units?
Mr. van der Vaart. I would just like to say, if it does, in
fact, pass the legal thresholds I referred to, the issue is
that the Clean Air Act only provides authority for a reduction
feasible by the institute of technology on the emission unit.
What I heard earlier today is that a target, which is a
euphemistic way of saying a limit, will be set by the Federal
Government. That is my experience as well. If, however, in
setting that limit the EPA includes the entire system, demand
side management, you are going to have a number that is
absolutely unachievable at a single unit.
Mr. Griffith. And I understand that. Attorney General?
Mr. Pruitt. Congressman, I would say that the EPA may
require the states to adopt standards, the EPA may guide the
states on how to do that procedurally, but ultimately the
states are vested with the legal authority to decide the
ultimate standards. And I think that is what is important, is
we talk about these 111(d) discussions we are having.
Mr. Griffith. Well, I appreciate that very much. In regard
to CCS, I would agree with you, Mr. Eisenberg. We may get there
someday. We are not there yet, and what we are going to do is
we are going to make people in my district, and in Mr.
Campbell's service area, and people all over the United States
pay more for electricity, and that is going to negatively
impact not only the amount of money in their household, but
also, as we have heard today, it is going to affect negatively
their health, and their viability in the world. And so it is a
real shame that some people are opposed to this really good
bill that Chairman Whitfield has introduced.
With that, Mr. Chairman, I yield back.
Mr. Whitfield. At this time recognize the gentleman from
West Virginia, Mr. McKinley, for 5----
Mr. McKinley. Thank you again, Mr. Chairman. Mr. Chairman,
I have got two reports here, two white papers, one by Dr.
Christie and Dr. Bajerob on this subject, and I would ask
unanimous consent they be entered into the record. Mr.
Chairman, ask these reports be entered into the record.
Mr. Whitfield. Without objection, yes.
Mr. McKinley. Thank you. Also, I have come here as an
engineer, and I want to make sure we avoid Washington-speak,
and it happens a lot. It happened in the earlier panel, where
were just trying to get a direct answer about whether or not,
under the new source performance standard, was going to
increase the cost of the production of coal, coal-fired
generated electricity. She wouldn't give us the answer.
So my question, the two of you that are engineers on the
panel, would you say that, if the new source performance
standard goes into effect, will it cost more for those power
plants that use coal?
Mr. van der Vaart. Yes, it definitely will.
Mr. McKinley. Will the cost of electricity increase?
Mr. van der Vaart. Yes.
Mr. McKinley. Thank you. And you?
Mr. Cichanowicz. Absolutely.
Mr. McKinley. Why can't people just say that straight out?
Why is Washington-speak so confusing? Thank you for that.
Mr. van der Vaart, studying your body language in some of
the testimony from Mr. Hawkins, it seemed like you might
disagree with some of his comments. Would you like to expound a
little bit, clarifying some of his statements?
Mr. van der Vaart. I think my comments covered my position
pretty well. Again, I am very concerned whether there is any
legal authority for the EPA to do what they are doing, both in
the existing source category, but also even in the way that
they are promoting the new source requirements.
Mr. McKinley. Let me close in the timeframe I have, maybe
open to the panel. If all of these regulations are imposed, and
we de-carbonize America, who wins? Because the carbon is still
going to be generated around the world. We know that Russia and
China are going to continue. So who wins? Our workers are going
to lose their jobs. Our manufacturing is going to lose its
edge, because the cost of electricity is going to go up. So who
wins?
Mr. Hawkins, can you tell me? Who wins?
Mr. Hawkins. The American people will win.
Mr. McKinley. If they don't have a job they win?
Mr. Hawkins. I will explain why I believe that.
Mr. McKinley. Make sure----
Ms. Hawkins. I will do it quickly. The United States has an
incredibly successful model with the Clean Air Act, and this is
not just theory. We have proven that when the United States
steps out and demonstrates to the rest of the world that it is
possible to use American ingenuity to deploy technology to
clean up our big pollution sources, protect public health, and
improve the economy at the same time, other countries get it,
and they follow, and it helps everyone.
Ms. Tierney. And when you think about the fact that the
United States has put more carbon pollution into the air
cumulatively, compared to any other country, it is our turn to
lead, and we will be able to innovate and move the rest of the
world with us.
Mr. McKinley. OK. I am just curious.
Mr. Campbell, how about you? Who wins?
Mr. Campbell. Well, let me say, long term, I think everyone
could win, but let us just look at the Clean Air Act. And I
understand a lot of people say, boy, if you just do this, the
technology will come. Build it, and they will come. Look, the
Clean Air Act came, Congressman Waxman said this morning, in
1974. That is correct, and it was 40 years, and we had somewhat
of a proven technology. Now we don't have that, and they are
trying to shrink that down on everybody, and we are just going
to do it. And I don't think that can happen, and I think we
will be a loser.
I think we have to keep the economy of the United States
strong so we can find these technologies, so we can help the
world. If you look at nitrous oxide, and sulfur dioxide, and
particulate matter cleanup that we did, China is not building a
lot of those plants with that back-end equipment. I mean, I
have been trying to sell a coal plant that I have right now
overseas. None of them want the back-end equipment.
Mr. McKinley. Thank you, Mr. Campbell.
Mr. Cichanowicz?
Mr. Cichanowicz. Yes. I----
Mr. McKinley. Am I close on that? My question----
Mr. Cichanowicz. Pretty close.
Mr. McKinley [continuing]. In part is not only who wins,
but also, again, your body language, you seem to be concerned
whether or not we have actually demonstrated enough process
that we are ready to implement. You know that Ernie Moniz came
out last week and said, it is ready, we are ready to implement
carbon capture. And I got the sense that you don't agree with
that.
Mr. Cichanowicz. Certainly I don't, and we have had some
comments all morning about how if the power industry would just
get to work on things, the problems would go away. Certainly
you can deploy many advanced technologies. It just takes time.
All these have risk, and you can go back to selective catalytic
reduction in scrubbers. Yes, they are successful now, but
everybody keeps forgetting, that took a while. It took decades
to sort out the problems.
And I think in my testimony I was clear, maybe we will have
an answer in 2020. We don't know yet. But it just takes time to
do the work, and understand the risks, and come up with
possible solutions.
Mr. McKinley. Thank you very much. My time has expired.
Mr. Whitfield. Gentleman's time has expired. Well, that
concludes today's hearing. I want to thank all of you for being
focused on the issue, and for your time and effort. I know many
of you traveled long distances, but we do appreciate it.
And, Mr. McNerney, you have some documents you want to
enter into the record?
Mr. McNerney. Yes. Mr. Chairman, I ask unanimous consent to
enter into the record two letters from organizations expressing
concerns with, and opposition to, the proposed bill, due to its
anticipated negative effects on climate and public health. The
first is a letter from the American Lung Association, American
Public Health Association, and other health and medical
associations. The other is a letter from 79 environmental
groups, and other organizations, on behalf of their members and
supporters.
Mr. Whitfield. Without objections, so ordered. Thank you.
[The information was unavailable at the time of printing.]
Mr. Whitfield. And then I also would like to enter into the
record, I know the NRDC, in their testimony, had included a
proposal relating to these issues, and we had the National
Economic Research Associates do an analysis, and a letter from
the American Coalition for Clean Coal Electricity relating to
that. And then I would also like to enter into the record
letters from the U.S. Chamber, the National Association of
Manufacturers, and the Fertilizer Institute about the
discussion draft.
[The information appears at the conclusion of the hearing.]
Mr. Whitfield. And then did you all get copies of the
documents that Mr. McKinley wanted to introduce? OK.
Mr. McNerney. Yes. Mr. Chairman, we got those late, so we
would like to have a chance to review those.
Mr. Whitfield. OK. So you all can review them, and we will
keep the record open for 10 days. Remind members they have 10
days to submit questions for the record. And I ask the
witnesses all agree to respond to any questions we may have for
you all, if you would.
So, thank you again, and I know that we will be seeing you
again as we go along, working on these issues. The hearing is
adjourned.[Whereupon, at 1:14 p.m., the subcommittee was
adjourned.]
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