[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]





            H.R. ------, THE PROMOTING NEW MANUFACTURING ACT

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 21, 2014

                               __________

                           Serial No. 113-147


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov


                  ______

                         U.S. GOVERNMENT PRINTING OFFICE 

91-228 PDF                     WASHINGTON : 2014 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Printing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001
                          


                    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               FRANK PALLONE, Jr., New Jersey
JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        ANNA G. ESHOO, California
GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
LEE TERRY, Nebraska                  GENE GREEN, Texas
MIKE ROGERS, Michigan                DIANA DeGETTE, Colorado
TIM MURPHY, Pennsylvania             LOIS CAPPS, California
MICHAEL C. BURGESS, Texas            MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee          JANICE D. SCHAKOWSKY, Illinois
  Vice Chairman                      JIM MATHESON, Utah
PHIL GINGREY, Georgia                G.K. BUTTERFIELD, North Carolina
STEVE SCALISE, Louisiana             JOHN BARROW, Georgia
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   DONNA M. CHRISTENSEN, Virgin 
GREGG HARPER, Mississippi            Islands
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BILL CASSIDY, Louisiana              JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky              JERRY McNERNEY, California
PETE OLSON, Texas                    BRUCE L. BRALEY, Iowa
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
CORY GARDNER, Colorado               BEN RAY LUJAN, New Mexico
MIKE POMPEO, Kansas                  PAUL TONKO, New York
ADAM KINZINGER, Illinois             JOHN A. YARMUTH, Kentucky
H. MORGAN GRIFFITH, Virginia
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Ohio
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina

                                 7_____

                    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        JOHN A. YARMUTH, Kentucky
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
ROBERT E. LATTA, Ohio                LOIS CAPPS, California
BILL CASSIDY, Louisiana              MICHAEL F. DOYLE, Pennsylvania
PETE OLSON, Texas                    JOHN BARROW, Georgia
DAVID B. McKINLEY, West Virginia     DORIS O. MATSUI, California
CORY GARDNER, Colorado               DONNA M. CHRISTENSEN, Virgin 
MIKE POMPEO, Kansas                      Islands
ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         JOHN D. DINGELL, Michigan (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)    HENRY A. WAXMAN, California (ex 
                                         officio)

                                  (ii)
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     1
    Prepared statement...........................................     2
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................    10
Hon. Jerry McNerney, a Representative in Congress from the State 
  of California, opening statement...............................    11
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   105
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, prepared statement..............................   106

                               Witnesses

Lorraine Gershman, Director, Regulatory and Technical Affairs, 
  American Chemistry Council.....................................    12
    Prepared statement...........................................    15
Kenneth Weiss, Managing Partner, Global Air Services, 
  Environmental Resources Management.............................    18
    Prepared statement...........................................    20
Collin P. O'Mara, Secretary, Department of Natural Resources and 
  Environmental Control, State of Delaware.......................    24
    Prepared statement...........................................    27
John D. Walke, Senior Attorney and Director, Climate and Clean 
  Air Program, Natural Resources Defense Council.................    36
    Prepared statement...........................................    38
Karen A. Kerrigan, President and Chief Executive Officer, Small 
  Business and Entrepreneurship Council..........................    56
    Prepared statement...........................................    58
Ross Eisenberg, Vice President, Energy and Resources Policy, 
  National Association of Manufacturers..........................    63
    Prepared statement...........................................    65

                           Submitted Material

Discussion Draft, H.R. ------, the Promoting New Manufacturing 
  Act, submitted by Mr. Whitfield................................     4

 
            H.R. ------, THE PROMOTING NEW MANUFACTURING ACT

                              ----------                              


                        WEDNESDAY, MAY 21, 2014

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 2322 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee] presiding.
    Members present: Representatives Whitfield, Scalise, 
Shimkus, Terry, Latta, Cassidy, Olson, McKinley, Griffith, 
Rush, McNerney, Tonko, Barrow, Dingell (ex officio), and Waxman 
(ex officio).
    Staff present: Nick Abraham, Legislative Clerk; Leighton 
Brown, Press Assistant; Allison Busbee, Policy Coordinator, 
Energy and Power; Andy Duberstein, Deputy Press Secretary; Tom 
Hassenboehler, Chief Counsel, Energy and Power; Mary Neumayr, 
Senior Energy Counsel; Chris Sarley, Policy Coordinator, 
Environment and the Economy; Alison Cassady, Democratic Senior 
Professional Staff Member; Caitlin Haberman, Democratic Policy 
Analyst; Bruce Ho, Democratic Counsel; and Alexandra Teitz, 
Democratic Senior Counsel, Environment and Energy.
    Mr. Whitfield. I would like to call this hearing to order. 
Today we are going to look at the regulatory roadblocks to the 
Nation's manufacturing renaissance with a discussion draft of a 
bill entitled the Promoting New Manufacturing Act. And I do 
want to thank all the witnesses for being with us today. We 
look forward to your testimony, and certainly I will be 
introducing each one of you, and we will have questions for you 
a little bit later. At this time I would like to recognize 
myself for a 5-minute opening statement.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Polls have shown that the American people are of the 
opinion that economic growth and job creation is the number one 
issue facing the American people. And I think all of us 
recognize that very slow economic growth over the last 6 years 
has been pretty frustrating for all of us. Now, I know that 
President Obama, and Vice President Biden, and people in his 
administration talk about this issue frequently as well. As a 
matter of fact, the President frequently in public talks about 
the importance of streamlining the permitting process. And yet, 
as is so often the case, he frequently says one thing, but then 
his administration takes actions that are contrary to that. And 
that has certainly been happening at EPA, and many of the other 
regulatory bodies.
    Now, the chemical industry estimated, as of this week, that 
177 projects, manufacturing projects, have been proposed in the 
U.S., representing $112 billion in investment, and over 600,000 
high paying manufacturing jobs. This is an extremely positive 
development, obviously. And also, with the great renaissance 
that we are having in the natural gas arena, we have a unique 
opportunity in America to step out in front and be one of the 
leading competitors in the world, and competing in the world to 
grow this economy, and create jobs.
    But this manufacturing renaissance is far from a done deal, 
especially given the cumbersome permitting process that these 
projects must go through. It would be a great disservice to the 
American people if our Nation's natural gas advantage is 
squandered through an unnecessarily lengthy bureaucratic 
process that delays, or even prevents, these job-creating 
modern new facilities from being built.
    Now, I might add that we invited EPA to testify today, but 
the agency declined our invitation to permit. They did talk to 
us yesterday, and said they look forward to working with us on 
a technical basis as we explore this legislation. And obviously 
we welcome that, that is very important. And even though EPA 
won't be here today, we do have other witnesses who agree with 
EPA's position, and I am sure that they will do a great job of 
explaining precisely the views of their entities, as well as 
probably the way EPA feels about some of these issues.
    I believe this bill contains several commonsense measures 
to increase transparency, and reduce unnecessary permitting 
delays. It increases the amount of public information about the 
number of these permits being issued, how long the process is 
taking, and also requires more information on EPA's 
Environmental Appeals Board process. It reduces permitting 
delays by requiring that the implementing regulations and 
guidance be finalized concurrently with any new or revised 
national ambient air quality standard, rather than doing it 
months, or even years, later. And it also directs EPA to report 
to Congress on steps being taken by the agency to expedite the 
permitting process.
    I might add that none of the substantive requirements under 
the Clean Air Act would be altered in any way under this bill. 
In fact, these new industrial facilities will be considerably 
cleaner, more efficient than those currently in operation in 
the U.S., as well as those operating overseas.
    So, in sum, the discussion draft includes reasonable steps 
to streamline the permitting process, something that the 
administration agrees, at least the President says, needs to be 
addressed. So we are open to all suggestions to improve this 
vehicle as we move forward, and I look forward to the hearing.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared statement of Hon. Ed Whitfield

    The growth in domestic energy production over the last 
decade has truly been a game changer. Oil and natural gas have 
now joined coal as energy sources this Nation possesses in 
great abundance, and the Energy Information Administration 
believes that our energy output can continue increasing in the 
years ahead.
    This ought to be very welcomed news, but at almost every 
turn Federal red tape prevents us from realizing the full 
potential of our energy bounty. This subcommittee has already 
taken action on many of these regulatory impediments, including 
EPA's war on coal, the delays in building Keystone XL and other 
energy infrastructure projects, and the bureaucratic obstacles 
that are holding back natural gas exports. Today, we address 
the regulatory roadblocks to the Nation's manufacturing 
renaissance with a discussion draft of a bill entitled the 
Promoting New Manufacturing Act.
    Plentiful and affordable natural gas supplies have given 
domestic manufacturers a potential advantage over the rest of 
the world. This is especially true for industries that use 
natural gas both as an energy source and a chemical feedstock. 
Indeed, the chemicals industry estimated as of this week that 
177 projects have been proposed in the U.S., representing $112 
billion in investment and over 600,000 high-paying 
manufacturing jobs. This is an extremely positive development, 
especially for an economy that continues to struggle and with 
so many Americans still out of work.
    But this manufacturing renaissance is far from a done deal, 
especially given the cumbersome permitting process that these 
projects must go through. It would be a great disservice to the 
American people if our Nation's natural gas advantage is 
squandered through an unnecessarily lengthy bureaucratic 
process that delays or even prevents these job-creating modern 
new facilities from being built.
    President Obama has expressed the same concerns. In his 
last State of the Union address, he said ``businesses plan to 
invest almost a hundred billion dollars in new factories that 
use natural gas. I'll cut red tape to help States get those 
factories built and put folks to work.'' I look forward to 
working with the administration to turn these words into 
action, and I believe that our discussion draft is an important 
step.
    I might add that we wanted EPA to testify today, but the 
agency declined our invitation to participate. We are sorry 
that EPA is not here to provide input, especially given that 
the President has made permit streamlining for industrial 
facilities a goal of his administration. Nonetheless, we are 
hopeful EPA will provide us with technical assistance as move 
ahead with the Promoting New Manufacturing Act, and we plan to 
continue reaching out to the agency as we move forward.
    I believe this bill contains several commonsense measures 
to increase transparency and reduce unnecessary permitting 
delays for preconstruction permits under the Clean Air Act. It 
increases the amount of public information about the number of 
these permits being issued and how long the process is taking, 
and also requires more information on EPA's Environmental 
Appeals Board process. It reduces permitting delays by 
requiring that the implementing regulations and guidance be 
finalized concurrently with any new or revised National Ambient 
Air Quality Standard (NAAQS) rather than months or even years 
later. And it also directs EPA to report to Congress on steps 
being taken by the agency to expedite the permitting process.
    I might add that none of the substantive requirements under 
the Clean Air Act would be altered in any way by this bill. In 
fact, these new industrial facilities will be considerably 
cleaner and more efficient than those currently in operation in 
the U.S. as well as those operating overseas.
    In sum, the discussion draft includes reasonable steps to 
streamline the permitting process, something that the 
administration agrees needs to be addressed. We are open to all 
suggestions to improve this vehicle so that America's 
manufacturing renaissance can commence as soon as possible.

    [The discussion draft follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Whitfield. At this time, I would like to recognize the 
gentleman from Chicago, Mr. Rush, for a 5-minute opening 
statement.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. I want to thank you, Mr. Chairman. Mr. Chairman, 
the Promoting New Manufacturing Act is billed as legislation 
that will require greater transparency and timeliness in 
obtaining preconstruction permits for new manufacturing 
facilities, as required under the Clean Air Act. Mr. Chairman, 
while I am not opposed to the idea of expediting the permitting 
process in a practical and thoughtful way, I am not convinced 
that the bill before us today as currently drafted is the way 
to go about, in terms of reforming this process.
    One of the main concerns I have, Mr. Chairman, with this 
legislation is that it puts an additional burden, and 
additional responsibility, on the U.S. EPA at a time when 
Congress has been steadily slashing funding for the EPA, making 
it much more difficult, if not impossible for it to carry out 
all of its duties, these new duties, even some of the new 
duties that this bill today requires.
    Additionally, this bill today before us appears to exempt 
new facilities from complying with the revised national ambient 
air quality standards if specific unrealistic conditions are 
not met, without taking into consideration the fact that much 
of the guidance, much of the implementation regulations, are 
enacted on the State level. Specifically, Mr. Chairman, Section 
3 adds a new requirement for the EPA that, when publishing any 
final new or revised national ambient air quality standard, it 
must also concurrently, and I quote, ``publish implementing 
regulations and guidance.''
    However, Mr. Chairman, in many cases State and regulated 
entities already have the tools and the guidance necessary for 
implementing the new national ambient air quality standards, 
and in other cases, this guidance evolves organically as issues 
and questions appear. I feel the consequence of this provision 
in Section 3, either intentionally or unintentionally, is that 
it may lead to an emergence of new lawsuits by industry, 
claiming that the EPA failed to meet this new requirement of 
concurrently issuing all final regulations and guidance, which 
may subsequently lead to detrimental delays in the issuance of 
new protected air quality standards.
    I also have concerns with the provision stating that a new 
or revised--shall not apply to the review and the disposition 
of a preconstructed permit application, unless final 
regulations and guidance concerning the submittal and 
consideration of permit applications have already been 
published. If a new facility is allowed to be built in an 
attainment area, but it does not have to comply with new or 
revised national ambient air quality standards, it is unclear 
how that new facility will impact existing facilities that may 
want to expand. And, in fact, it may push the entire area into 
a non-attainment area under this legislation, Mr. Chairman.
    Additionally, in areas of non-attainment, allowing new 
facilities to be constructed that do not have to meet revised 
national ambient air quality standards may force other existing 
facilities to make even deeper cuts in their pollution 
emissions in order to bring the area into attainment.
    Finally, Mr. Chairman, while I look forward to engaging the 
distinguished panelists before us here today, I think that it 
would serve the members of this subcommittee well, it will 
serve all interested parties well, to hear from, and to 
question the EPA directly on how this legislation would affect 
the permitting processing. Mr. Chairman, I hope that we will 
have the opportunity to do so before we move this bill to 
markup, and I yield back.
    Mr. Whitfield. Thank you, Mr. Rush. Mr. Upton is not here 
this morning. Mr. Shimkus, do you or Mr. Latta have any 
comments? OK. At this time we will recognize the gentleman from 
California, Mr. McNerney, for his opening statement.

 OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. McNerney. Thank you, Mr. Chairman. I wasn't expecting 
to get up this early. I think today's hearing focuses on the 
discussion draft of Promoting New Manufacturing Act, and I 
thank the witnesses for coming here this morning, taking time 
to testify about the proposed legislation. I hope that we will 
have an opportunity to hear from the EPA before we go to 
marking up this bill as well.
    I strongly support promoting new manufacturing in the 
United States, and, in fact, I spent a decade in the 
manufacturing sector, so I sympathize. However, in my humble 
opinion, Mr. Chairman, the bill looks like an attempt to weaken 
the Clean Air Act, so we need some work on this provision.
    Under the current law, the EPA sets national ambient air 
quality standards at levels sufficient to protect public 
health, and with an adequate margin of safety. Essentially, 
these standards identify the level of air pollution that is 
safe to breathe. When a company wants to build a new large 
facility, or expand an existing one, it has to apply for a 
preconstruction permit. States, not the EPA, issue most of 
these permits. To get a permit, a company must commit to 
install appropriate pollution controls, and show that the 
emissions from the new expanded facility will not cause a 
violation of the air quality standards. That is a 
straightforward standard. We shouldn't allow new facilities to 
worsen already dirty air, or make clean air unsafe to breathe.
    Periodically the EPA updates the air quality standards, 
when the scientific evidence shows that it is necessary to 
protect public health. Under the Clean Air Act, new facilities 
need to meet whatever air quality standard is in place, and 
that ensures that the air is healthy to breathe. But this bill 
says that the EPA must issue regulations and guidance for 
implementing a new air quality standard at the same time that 
it issues the standard. If the EPA doesn't do this, then, to 
get a permit, new facilities only have to show that they meet 
the old, less protective standard.
    I represented a part of California's San Joaquin Valley, 
which has some of the Nation's worst air pollution. These 
conditions negatively affect the quality of life, including 
health, safety, and missed days of school and work. In other 
words, air quality isn't just a public health issue, but it is 
an economic issue. In the valley, the district has up to 180 
days to make a determination, but often these cases are 
permitted in just a few hours. Our region has been successful 
in addressing preconstruction permitting.
    However, the bill introduces uncertainty into the 
permitting process, requiring the EPA to issue regulations and 
guidance, but it is not clear what regulations and guidance 
will be sufficient. Also, when a facility gets a permit under 
the old standard, it is unclear whether it would be 
grandfathered in permanently, or whether it would have to go 
back later and install additional pollution controls. Adding 
uncertainty will delay the permitting process.
    The bill also imposes a host of new reporting requirements 
about permitting times, which impacts the States, since the 
States, and not the EPA, actually issue almost all of these 
permits. This reporting burden will be carried by the same 
State and EPA personnel who process the permits. The bill adds 
to their workload, and authorizes no new funding.
    People in my district in the Valley deserve clean air, and 
the Valley has made substantial progress in addressing this 
goal. And, in fact, this year is the cleanest air on record. We 
should continue to build on those efforts, not increase the 
burdens on air pollution controlled districts. We should be 
discussing how we can deliver more funding and resources for 
those agencies, rather than weakening public health 
protections.
    Mr. Chairman, I yield back.
    Mr. Whitfield. Thank you very much, Mr. McNerney. And, once 
again, I want to thank the six witnesses for being with us this 
morning. All of you are quite knowledgeable, and we look 
forward to your testimony.
    Instead of introducing each one of you, and then going back 
and introduce you again, I am just going to introduce you one 
by one as I recognize you for your 5 minutes. So our first 
witness this morning is Ms. Lorraine Gershman, who is the 
Director of Regulatory and Technical Affairs at the American 
Chemistry Council. And, Ms. Gershman, you are recognized for 5 
minutes.

   STATEMENTS OF LORRAINE GERSHMAN, DIRECTOR, REGULATORY AND 
 TECHNICAL AFFAIRS, AMERICAN CHEMISTRY COUNCIL; KENNETH WEISS, 
MANAGING PARTNER, GLOBAL AIR SERVICES, ENVIRONMENTAL RESOURCES 
MANAGEMENT; COLLIN P. O'MARA, SECRETARY, DEPARTMENT OF NATURAL 
RESOURCES AND ENVIRONMENTAL CONTROL, STATE OF DELAWARE; JOHN D. 
  WALKE, SENIOR ATTORNEY AND DIRECTOR, CLIMATE AND CLEAN AIR 
PROGRAM, NATURAL RESOURCES DEFENSE COUNCIL; KAREN A. KERRIGAN, 
   PRESIDENT AND CHIEF EXECUTIVE OFFICER, SMALL BUSINESS AND 
 ENTREPRENEURSHIP COUNCIL; AND ROSS EISENBERG, VICE PRESIDENT, 
     ENERGY AND RESOURCES POLICY, NATIONAL ASSOCIATION OF 
                         MANUFACTURERS

                 STATEMENT OF LORRAINE GERSHMAN

    Ms. Gershman. Thank you. ChairmanWhitfield, Ranking Member 
Rush, members of the subcommittee, thank you for the 
opportunity to testify on behalf of the American Chemistry 
Council in support of the draft legislation Promoting New 
Manufacturing Act. This legislation will improve the regulatory 
permitting process for new and expanded factories, and help 
ensure continued growth in shale related manufacturing in the 
United States.
    ACC represents the leading companies engaged in the 
business of chemistry. We apply the science of chemistry to 
create innovative products and services that help make peoples' 
lives better, healthier, and safer. The U.S. chemical industry 
is a key element of the economy, providing 784,000 skilled, 
good paying jobs all across our country. We are among the 
Nation's largest exporters and investors in R and D. Our 
advanced materials and technologies include many that help save 
energy and reduce greenhouse gas emissions. High performance 
building insulation and windows, solar panels and wind 
turbines, and lightweight packaging and vehicle parts all start 
with chemistry.
    America's chemical industry is undergoing a historic 
expansion made possible by abundant, affordable supplies of 
natural gas and natural gas liquids from shale formations. Due 
to our decisive competitive advantage in the cost and 
availability of energy and feed stock, the United States is 
currently the most attractive place in the world to invest in 
chemical manufacturing. As of this week, 177 chemical industry 
projects, valued at $112 billion in potential new U.S. 
investment, have been announced. Fully 62 percent of this is 
foreign direct investment. Within 10 years, the new investments 
could generate tens of billions of dollars in new chemical 
industry exports, and hundreds of thousands of permanent new 
jobs.
    All of these projects must undergo a lengthy and complex 
environmental permitting process, filled with challenges that 
could derail the investments. Problems include uncertainty as 
to the schedule and process for obtaining a final 
preconstruction permit, and a requirement that companies use 
emission modeling programs that cannot adequately accommodate 
site specific data. Once a project is significantly delayed, 
the project can be scrapped, and companies make plans to 
proceed elsewhere.
    During his State of the Union address this past January, 
President Obama highlighted the important role that domestic 
natural gas is playing in the U.S. economy, and committed his 
administration to facilitate the permitting process for 
manufacturing projects. The President said, ``Businesses plan 
to invest over $100 billion in new factories that use natural 
gas. I will cut red tape to help those States get these 
factories built.'' The White House fact sheet stated, ``The 
administration will help States and localities coordinate 
review of proposed private sector projects to invest in new 
energy intensive U.S. manufacturing plants relying on natural 
gas.''
    Manufacturing facilities must be able to obtain required 
permits in a timely, transparent, and efficient manner. In 
recent years, EPA has tightened a number of NAAQS, including 
ozone in 2008, nitrogen dioxide and sulfur oxides in 2010, and 
fine particulate matter in 2012. A proposed tighter ozone NAAQS 
is expected later this year. Meanwhile, EPA is still working to 
implement these standards, along with some even older NAAQS. 
Lacking clear direction from EPA, State permitting agencies and 
manufacturing facilities have, at times, been left confused 
about the requirements to complete the preconstruction 
permitting process.
    Manufacturing facilities need certainty and transparency in 
the permitting process. The steps required to obtain a 
preconstruction air permit within the Clean Air Act's required 
12 month deadline must be clear to all. EPA must issue 
implementation rules and guidance in tandem with any final 
NAAQS rules. The Promoting New Manufacturing Act will improve 
the permitting process by creating a dashboard showing the 
total number of preconstruction permits issued during the 
fiscal year, the percentage issued within 1 year of 
application, and the average length of the review process, 
requiring EPA to issue guidance concurrent with any new rules 
so that manufacturers fully understand how to comply, and 
directing EPA to prepare an annual report to Congress on 
actions the agency has taken to expedite the permitting 
process.
    The Promoting New Manufacturing Act represents a step 
towards a timely, efficient, and transparent regulatory 
process. We are hopeful that, with continued leadership from 
this committee, and others in the House, that we can pass this 
bill, and expedite the unprecedented chemical industry 
investment planned for the United States. With that, I would be 
happy to take any questions.

    [The prepared statement of Ms. Gershman follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Whitfield. Thank you very much, Ms. Gershman. At this 
time I would like to recognize Mr. Ken Weiss, who is the global 
managing partner for the Air and Climate Change Environmental 
Resource Management Company. And you are recognized for 5 
minutes, Mr. Weiss.


                   STATEMENT OF KENNETH WEISS

    Mr. Weiss. Thank you. Chairman Whitfield, Ranking Member 
Rush, thank you for the opportunity to testify in support of 
the draft legislation Promoting New Manufacturing Act. The 
legislation will remove much uncertainty and related schedule 
delays from the air emissions permitting process for major 
capital projects, and help ensure continued growth in 
manufacturing in the United States.
    ERM is a leading global provider of environmental health 
safety and sustainability related services. We have more than 
5,000 people operating in 40 countries, and about 150 offices 
around the world. Seventy of those offices are in the United 
States. We have about 350 air quality staff in the United 
States. We have worked for about 50 percent of the global 
Fortune 500 in the past 5 years on air quality related 
assignments, and each year we do about 800 air quality related 
assignments.
    Most of our work is in the oil and gas, power, mining, 
chemicals, and manufacturing sectors, across a wide swath of 
American industry, and a significant portion of my practice is 
advising these industries and my clients on the impacts of 
their permitting regulations on major capital projects. My 
experience almost unanimously is that air preconstruction 
permits are typically on the critical path of the vast majority 
of major capital projects, and that about 900 projects a year 
might require these types of permits that would be facilitated 
by the Promoting New Manufacturing Act.
    Companies seeking to execute capital projects need to be 
able to develop realistic and predictable project timelines. 
This would ensure that equipment can be designed, procured, 
installed, and brought online when expected, and also support 
investment decisions. The uncertainty in the permitting process 
creates significant issues for such investment decisions. 
Companies are forced to guess at the amount of additional time 
to build into the permitting cycle for planning, as EPA often 
fails to meet the 1-year time limit allowed in the Clean Air 
Act for processing a permit. For projects that have investment 
needs of billions of dollars, the impact of these delays should 
not be underestimated.
    The Promoting New Manufacturing Act removes much of this 
uncertainty by ensuring that the EPA has issued final guidance 
to permit applicants on the exact manner in which to conduct 
the permitting analyses associated with capital projects. 
Guidance is necessary, as many technical issues must be 
addressed in determining how to conduct the analyses that can 
show compliance with the ambient air quality standards. This is 
particularly important, as EPA is constantly updating the 
ambient air quality standards. EPA recently tightened the NAAQS 
for nitrogen dioxide and sulfur oxides in 2010, and fine 
particle matter in 2012, and is expected to issue a tighter 
ozone standard later this year. At the same time, the agency is 
working to implement these standards, along with some older 
NAAQS, including the 1997 and 2008 ozone NAAQS, and the 1997 
and 2006 particulate matter NAAQS. This disconnect results in 
State permitting agencies and the regulated community in not 
having clear direction from the EPA regarding what needs to be 
done to complete the air preconstruction permitting process.
    EPA's failure to provide final implementation rules and 
guidance to the regulated community and State agencies is 
easily documented. Using the fine particle matter standard as 
an example, it was not until May 16, 2008 that EPA promulgated 
its final rule for implementation of the new source review 
program for fine particle matter, despite having promulgated 
the NAAQS in 1977 and 2006. Importantly, the 2008 rule required 
certain gases to be considered precursor emissions to fine 
particle formation.
    Precursor emissions are emitted as gases, but react in the 
atmosphere to foreign particulate matter, such as sulfate and 
nitrates. Despite having adopted this rule in 2008, even today 
there is no final guidance available from EPA on how to conduct 
a fine particle matter ambient air quality analysis, nor is 
there any approved computer model available to analyze 
emissions surrounding the chemical transformation of precursor 
emissions into particular matter, a major contributor to fine 
particle concentrations in the ambient air.
    The most recent guidance from EPA on how to conduct this 
analysis is labeled draft, and was issued in March of 2013. It 
has not been finalized now, more than a year since its release. 
Affected sources have no choice but to be left with 
uncertainty. We routinely advise clients that obtaining a PSD 
permit can require anywhere from 1 to 3 years, and that a 
minimum of 12 to 18 months need to be allowed in the project 
schedule.
    The types of issues we have seen have included a large 
shale gas fired combustion turbine that was being constructed 
right in the middle of adoption of the PM2.5 NAAQS. The new, 
more stringent, NAAQS could not be met in the area of the 
project location, so there was no way to make the required air 
quality demonstrations. EPA guidance was non-existent, and the 
State did not know how to resolve this issue. This caused 
unnecessary project delays for a major new gas turbine.
    We worked on a steel plant in Louisiana that was delayed 
due to issues surrounding the NO2 ambient air quality standard 
that was adopted during a review of the permit application, and 
more than a year after the application was filed. We currently 
estimate that the lack of guidance added 2 years to the project 
schedule.
    The above examples are just a few of the obstacles we have 
experienced firsthand. The list of obstacles will grow as more 
facilities apply for preconstruction permits, and as the NAAQS 
continue to get more stringent. Additionally, by requiring the 
EPA to determine its track records to meeting the permit 
processing timeline, the agency will have the information 
necessary to act on and remove the underlying causes of project 
delays created unintentionally by the permitting program.
    Thanks for your time. I will be happy to answer any 
questions you may have.
    [The prepared statement of Mr. Weiss follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Whitfield. Thank you. Our next witness is Mr. Colin 
O'Mara, good to see you, who is Secretary of the Delaware 
Department of Natural Resources and Environmental Control. And 
we are glad you are with us, and you are recognized for 5 
minutes.

                 STATEMENT OF COLLIN P. O'MARA

    Mr. O'Mara. Thank you, Mr. Chairman, Ranking Member Rush. I 
greatly appreciate you accommodating me, being a last-minute 
add to this panel, replacing my staff member. I will actually 
be starting a new job in 2 months. This will probably be the 
last time I will be before you in this capacity. I am going to 
become the CEO of the National Wildlife Federation, so you will 
be hearing me to bother you about wildlife issues in the 
future, maybe a little less on the Clean Air Act. But----
    Mr. Rush. Mr. Chairman, I just want to extend 
congratulations to him.
    Mr. O'Mara. Thank you.
    Mr. Rush. What a promotion.
    Mr. O'Mara. I will be in Illinois soon, so----
    Mr. Whitfield. Yes, and we have a lot of issues we want to 
talk to you about on wildlife.
    Mr. O'Mara. Nothing is as sticky as this stuff. Thank you 
very much for having me today. Delaware has a long, proud 
history of manufacturing. You know, companies like DuPont, 
Gore, you know, we have a refinery, all kind, you know, the 
chemical industry in many ways completely grew out of Delaware. 
And we actually agree with the premise of this effort, that 
more efficient permitting, more predictable, more clear and 
certain permitting is obviously a good thing for economic 
growth. We just kind of question the unintended consequences of 
this particular approach, and have maybe a few suggestions for 
a different way to look at it.
    In Delaware, under the leadership of our Governor, Jack 
Markel, we have focused like a laser on trying to improve 
permitting efficiency. You know, and my Air Director is sitting 
behind me, Ali Mirzakhalili, one of the finest Air Directors in 
the county, put his team through an incredible process of value 
stream mapping, trying to reduce permit times. He is gone, you 
know, our permits for kind of major sources take about 4 
months, where in many other States it is more than a year. Our 
minor sources will take 2 months. We are at about 72 days right 
now, compared to about 104 days, about 3 \1/2\ months, about 3 
or 4 years ago. And so we have shown that, by having a better 
process, we can get through the permits more quickly, providing 
the certainty.
    And that is really the key to our approach in Delaware. The 
approach is fairly simple. We want to provide certainty to 
industry by articulating clear standards. We want to deliver 
permits in a timely and efficient manner, so they get the 
decisions they need. And then we actually supplement our 
strategy with one other piece. We actually provide some 
incentives. If folks are willing to go above and beyond 
permitting requirements, we provide, you know, small grants. 
They want, you know, maybe adopting cleaner fuels, or helping 
them get, you know, a gas pipeline to the site, or, you know, 
things that can actually make the facility better long run. And 
it is because we strongly believe in the underlying belief in 
the Clean Air Act, and the tenet of the Clean Air Act, that it 
is much cheaper to reduce emissions during the design of a 
facility than it is to try to retrofit later.
    Now, a lot of these facilities around the country that have 
tried to, you know, add controls later, and you have heard this 
in response to the Toxic Rule and others, the expense and the 
time that folks need to try to do it after the fact. If we can 
figure out ways to incorporate these technologies earlier, it 
is cheaper, and it doesn't create kind of unintended 
consequences in other facilities.
    And I think that the challenge with this bill as proposed, 
and I really appreciate the opportunity to come at the draft 
discussion level, before it is formally introduced, before it 
is marked up, because the unintended consequence of having 
folks go in and apply for permits under an old standard, when a 
new standard has already been promulgated in a meaningful way, 
even though the guidance may not have been issued, puts both 
the State and the regulated entity in an incredibly precarious 
position. The regulated entity is basically knowingly not 
putting the controls that would be necessary for the standard 
that is promulgated that is fully in the Federal Code at that 
point, so there is a potential legal liability there. The 
State, then, has to figure out other places to make up the 
reductions that could have been more cost effectively reduced 
through the controls being put on at this new facility.
    And so what ends up happening is it might help that 
individual facility, if they have to do less on the control 
side. The challenge is those reductions that could have been 
achieved have to be made up somewhere else. And so, as we are 
trying to put together our State implementation plans, we might 
have to go back to an existing industry that has already put on 
a lot of controls, trying to get that extra additional ton out 
of that facility, because this other facility didn't kind of do 
their fair share.
    The other kind of inequity that we could create 
unintentionally is that a new facility that comes in after the 
guidance. So you could have two facilities, same type of 
operation, gas turbine generation, you know, one that comes in 
before the guidance is promulgated, one that comes in 
afterwards. The one that comes in afterwards is going to have 
to meet a higher standard, creating another inequity there, 
where they are doing more to go above and beyond the 
requirements for exactly the same facility in the same State. 
You know, we would much rather see ways to, you know, to really 
kind of incentivize the folks that go above and beyond the 
permit conditions, rather than having this inequity of the 
types of standards that different folks meet.
    And it really comes back to the underlying assumption that 
I will challenge in the bill, that States aren't doing a good 
job figuring this out. EPA has had slow guidance on many of 
these rules. I mean, the 2008 is a good example. But that 
doesn't paralyze the States in any meaningful way. We are 
talking to each other all the time. We are moving ahead. 
Frankly, a lot of times, the way that we issue permits in 
Delaware, and a lot of the East Coast States are actually more 
efficient and more flexible than the way the guidance actually 
comes out later. Like, actually not having the guidance, and 
allowing us to implement under just the rule allows us to be 
more nimble, and actually help industry in a significant way.
    And so, you know, I do respect the intent. I mean, there is 
no one that supports manufacturing more than me, a kid that 
grew up in Upstate New York, in Syracuse. That is, you know, 
kind of the heart of the Rust Belt that needs these kind of 
jobs. But we think we can actually achieve our quality goals in 
a much more efficient way, not have adverse public health 
impacts, because we will have additional pollution if this does 
kind of go into effect, that is going to be very difficult to 
pull out of the system later. And we would love to work with 
you on a more efficient way to do it, because we firmly believe 
that, you know, manufacturing is absolutely critical, but we 
think we can do a little better than this proposal.
    [The prepared statement of Mr. O'Mara follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Whitfield. Thanks very much, Mr. O'Mara. At this time 
our next witness is Mr. John Walke, who is a Senior Attorney 
and Director for the Climate and Clean Air Program at the 
Natural Resources Defense Council. And, Mr. Walke, welcome, and 
you are recognized for 5 minutes.


                   STATEMENT OF JOHN D. WALKE

    Mr. Walke. Thank you, Chairman Whitfield, Ranking Member 
Rush, and members of the subcommittee for the opportunity to 
testify today. The draft legislation before you, in our 
opinion, is a flawed bill that would authorize amnesty from 
national clean air health standards, create red tape, and 
impose unintended burdens on local businesses. Instead of 
reducing permitting burdens, the bill would open up facilities 
to new legal liabilities, higher costs, and regulatory delays. 
I suspect many of these outcomes are unintended consequences of 
the draft bill, but these objectionable substantive elements of 
the draft legislation are coupled with a false premise and lack 
of foundation for its central approach. I would like to take a 
few minutes to discuss the individual sections of the draft 
bill, and why they are problematic.
    Section 3 of the bill is the most problematic part of the 
draft bill. It creates an unjustified amnesty from new or 
revised national clean air health standards during 
preconstruction permitting for individual facilities 
undertaking new construction or modifications. This would harm 
air quality, the health of surrounding communities, and impose 
unfair burdens and costs on other local businesses in the same 
area as the facility receiving the amnesty. The bill would 
create unintended consequences, and increase costs for other 
businesses in that same area. This is because the Clean Air Act 
still would require EPA State and local officials to attain 
national health standards, and to avoid interfering with clean 
air resources in areas that already meet national health 
standards.
    The only way for regulators to accomplish this would be for 
Government regulators to crack down on other businesses in the 
area, or to require the newly permitted facility to either stop 
operating, or undertake potentially costly retrofits to install 
necessary pollution controls. Imposing additional costs and 
control obligations on existing local businesses in order to 
grant amnesty to a newly constructed facility is inequitable, 
and even punitive, in our view. There is no reason to impose 
these terrible choices on facility owners or operators, nor on 
State and local regulators, local businesses, and local 
communities, nor is there any reason for doing damage to the 
Clean Air Act's health safeguards in the manner that we believe 
Section 3 of the bill would.
    None of the written testimony before you today has concrete 
examples of air permits not being issued due to a lack of EPA 
implementing rules or guidance. I am personally unaware of 
situations in which EPA implementation rules or guidance were 
deemed necessary to the issuance of pre-construction permits 
following revisions to national health standards. Pre-
construction permits, as Mr. O'Mara has indicated, continue to 
be issued while national air quality standards are being 
revised and updated. Delays and uncertainty are not welcome, to 
be sure, but uncertainty for corporations should not come at 
the expense of subjecting Americans to the certainty of 
unhealthy and illegal levels of air pollution in the manner 
that the bill's amnesty provision would.
    Turning to Sections 2 and 4 of the draft bill, these 
provisions represent red tape that consume limited agency 
resources in order to compile information mostly in the 
possession of State and local agencies, rather than EPA. These 
sections require EPA to collect information on pre-construction 
permitting, but overlook the fact that over 80 percent of the 
States oversee their own pre-construction permitting. EPA 
rarely permits individual facilities, actually, and it makes 
little sense for Congress to require this information from EPA, 
rather than from individual State and local permitting 
authorities. In light of this permitting landscape, the 
question then becomes whether it makes sense to saddle resource 
constrained State and local governments with red tape at the 
expense of carrying out and enforcing health safeguards that 
protect Americans. We do not think this makes much sense.
    Lastly, the draft legislation manages to run afoul of all 
five Congressional Declarations of Purposes behind the Clean 
Air Act's pre-construction permitting program in clean areas, 
or so-called attainment areas. The Act's pre-construction 
permitting program was written into law by Congress to ensure 
that newly constructed or modified stationary sources do not 
violate national health standards, do not interfere with a 
State's plan for meeting, and continuing to meet those health 
standards, do not harm national parks, and do not impose unfair 
burdens and additional costs on other local businesses in an 
area when a newly permitted facility wishes to construct and 
add higher pollution levels. The draft bill contravenes all of 
these statutory objectives.
    Today's bill, in our view, represents a sharp departure 
from the Clean Air Act, and 37 years of permitting practices. 
EPA updates national health standards when the science shows 
that standards should be strengthened to protect Americans with 
an adequate margin of safety. Providing facilities amnesty from 
national health standards does a disservice to permit holders, 
other local businesses, air quality, and public health. I urge 
the subcommittee not to advance the draft bill. Thank you.
    [The prepared statement of Mr. Walke follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Whitfield. Thank you, Mr. Walke. And our next witness 
is Ms. Karen Kerrigan, who is the President and Chief Executive 
Officer for the Small Business and Entrepreneurship Council. 
And you are recognized for 5 minutes.

                 STATEMENT OF KAREN A. KERRIGAN

    Ms. Kerrigan. Thank you, Chairman Whitfield, and Ranking 
Member Rush, and members of the subcommittee, for the 
opportunity to participate and provide the views of the Small 
Business and Entrepreneurship Council this morning on 
legislative efforts to promote new manufacturing and growth in 
the United States. Again, I am Karen Kerrigan, President and 
CEO of SBE Council. We are a non-profit advocacy, research, and 
training organization dedicated to protecting small business, 
and promoting entrepreneurship. And for 20 years, SBE Council 
and our members have worked to develop and support policies 
that enable business startup and growth. We are pleased to lend 
our support to the Promoting New Manufacturing Act. This draft 
bill is a practical measure that aligns with bipartisan goals 
to improve Government and transparency, and strengthen quality 
job growth and investment in the United States.
    The legislation contains reasonable accountability features 
that will serve to provide businesses with the timely 
information they need to make decisions and plan. Provisions 
that require the EPA to better monitor, make public, and report 
on the timing of permits, and to provide timely and concurrent 
guidance and rules about how to comply with new or revised air 
quality standards, will establish greater clarity and certainty 
for businesses and investors. This is especially critical, 
given the potential for new manufacturing in the U.S., a 
positive development that will lead to quality job growth, and 
opportunities for small businesses and entrepreneurs.
    Now, the figures, as you noted, Chairman, and also provided 
by Ms. Gershman of the American Chemistry Council, are indeed 
impressive, and there is a lot of small business opportunity in 
those projects, opportunities for struggling small businesses, 
and the potential for new business startup and growth. And this 
is an area where our economy needs help. That is, we need more 
entrepreneurship, and growing small businesses that hire full 
time employees. Unfortunately, ongoing reports find that we are 
flailing in this critical area. However, there is one sector 
where we are excelling, and that is in energy.
    Beyond the benefits of transparency and clarity the 
Promoting New Manufacturing Act would bring to the permitting 
process, small businesses in the energy sector would continue 
to benefit from the growth in natural gas demand that new or 
expanded facilities would generate. The tremendous increase in 
domestic natural gas production has been a significant 
development for small business. Entrepreneurship and business 
formation in the energy sector in recent years has been 
extraordinary. In a report released by our organization in June 
of 2013, we found that at the same time that both employment 
and employer firms declined between 2005 and 2010, job growth 
and new business formation grew within the energy sector, and 
continues to this day. I provided those detailed numbers in my 
written testimony, but, again, the growth in new businesses is 
particularly striking among small firms.
    President Obama recognized the opportunities and potential 
in shale gas development in his State of the Union speech this 
past January. He pledged to cut red tape to help States to get 
those factories built referenced in his speech, and based on 
the ACC's numbers, the Promoting New Manufacturing Act is an 
opportunity to advance an initiative that appears aligned with 
the President's pledge. Bringing greater transparency and 
accountability to the pre-construction permit program is one 
way both parties can work together to help revitalize 
manufacturing and strengthen U.S. competitiveness. More growth 
opportunities for small business and new manufacturing 
projects, and the energy sector, will produce a virtual cycle 
of increased investment, enhanced GDP growth, rising incomes, 
and more jobs.
    Thank you again, Chairman and Ranking Member Rush. I look 
forward to questions and discussion.
    [The prepared statement of Ms. Kerrigan follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Whitfield. Thank you, Ms. Kerrigan. And our final 
witness is Mr. Ross Eisenberg, who is the Vice President for 
Energy and Resources Policy at the National Manufacturers 
Association. And thanks for being with us, Mr. Eisenberg. You 
are recognized for 5 minutes.

                  STATEMENT OF ROSS EISENBERG

    Mr. Eisenberg. Of course. Thank you so much. Good morning, 
Chairman Whitfield, Ranking Member Rush, members of the 
subcommittee. As you have heard from the National Association 
of Manufacturers, and our 12,000 members, for many years now, 
the boom in domestic energy production is driving major new 
investment in manufacturing, and contributing to increased U.S. 
competitiveness around the world. For us, for manufacturers, 
this could mean as many as one million new jobs by 2025 as we 
build new iron, steel, cement, fertilizer, chemicals, aluminum, 
plastics, and many other manufacturing facilities, as well as 
the products that are made from these materials, so the future 
is good.
    We understand, as manufacturers, the risks inherent in 
making investments of this magnitude in the United States. We 
understand that, even with our built-in energy advantage, we 
still have a significant disadvantage owing to other policies, 
like taxes, and torts, and regulations. We understand that new 
regulations will be issued while we wait for our permit, moving 
the goalpost, and forcing us to change our entire plan mid-
stream. We understand that often law firms, masquerading as 
public interest groups, will exploit every step of the approval 
process, and drive up project costs, in the hopes that we will 
simply want to walk away.
    We understand that all of this is going to happen, and we 
still take these risks, but it doesn't mean that we don't want 
to do something about it. So with manufacturing on the verge of 
a major comeback, there is really no better time, in our view, 
than now for the subcommittee to examine the permitting 
process, and whether or not it can be improved, and if so, how.
    Manufacturers continue to struggle with the complex 
requirements of the New Source Review program. When I was 
preparing for today's hearing, I sent a note to our members and 
reached out to our members, asking for their feedback on what 
is good and what is bad about the NSR process. What I got back 
is listed in my written testimony. It is long. The intention 
here was not to create a list of horribles, and I do understand 
that that is probably what it looks like, but rather to try to 
give members an honest assessment of what the plant managers, 
the business owners, the EH and S people at my members in the 
field are having to do when they try to build facilities, or 
modify existing ones. Challenges they raised with me in the NSR 
process include changed permit conditions that derail the 
project, a mandatory stay on construction when a project is 
challenged at the EAB level, modeling issues, of which they say 
there are very many, barriers to installation of energy 
efficiency, and combined heat and power that the NSR process 
provides, threats of litigation on the back end, which then 
create delays on the front end as you try to serve judgment, 
improve the permit, uncertainty on how to address remands when 
permits are sent back, and even delays they are finding for 
simple minor source permits that don't even trigger the PSD 
process. And the EPA, to its credit, has listened to 
manufacturers' permit concerns, and it is aware of many of 
these problems, and is actively trying to fix them, but we 
believe Congress can and should be part of the solution as 
well.
    Now I would like to also talk about what appears to be a 
real problem in the functioning of the PSD program for 
greenhouse gases. For several years the NAM and other groups in 
this town have warned the members of the subcommittee that 
extending the PSD permitting program to greenhouse gases could 
act as a deterrent to construction. Based on the numbers of 
permits completed to date, I am concerned that we may have 
actually been correct in that respect.
    When EPA issued the greenhouse gas Tailoring Rule 4 years 
ago, it estimated that even with tailoring, it would have to 
issue about 900 permits per year, so by now about 1,800 
permits. However, recent information from the agency shows that 
in those 3-plus years since PSD was extended to greenhouse 
gases, they have only done 166 permits total, rather than 
1,800, so that is a stunning drop-off, and one for which the 
agency really doesn't seem to have an easy answer. I think we 
should figure out why. We at NAM fear that PSD for greenhouse 
gases may actually be acting as a deterrent to new 
construction.
    So we believe the pre-construction permitting process can 
be improved, but we don't really believe this should be a 
partisan, or even a contentious issue. Many of the problems 
identified can be addressed through a collaborative process 
involving EPA, Congress, and the regulated community in the 
States. Frankly, I am a little surprised by the reaction to 
this bill from some of my colleagues here on the panel. Let us 
be clear about what we are arguing about here. We are talking 
about some additional reporting requirements, and requiring 
that EPA issue a document in a timely fashion. That is really 
it. That is what we are arguing about here.
    So we believe the Promoting New Manufacturing Act takes a 
pragmatic approach to this very complex issue. It diagnoses a 
problem, if one exists, and provides the best available 
information so that EPA and the Congress can then decide if 
steps need to be taken to improve the process, and it requires 
the agency to do its job issuing guidance in a timely fashion. 
Given that a very, very large revision to the ozone NAAQS, 
quite possibly the most expensive new regulation that will ever 
be issued, and I say that in all seriousness, is due by the end 
of next year, this is a relatively small task to require from 
the agency. If the EPA expects implementation of this major new 
reg to begin immediately upon its issuance, then it must, at a 
minimum, issue the tools and develop the tools manufacturers 
are going to need to comply with it.
    So we appreciate the time and attention that the 
subcommittee is giving to the pre-construction permitting 
process. We thank you. Manufacturers look forward to working 
with you, and the entire subcommittee, on this bill, and on 
other measures that will enhance our manufacturing comeback. 
Thank you.
    [The prepared statement of Mr. Eisenberg follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Whitfield. Thank you, and thank all of you for your 
testimony. At this time I would like to recognize myself for 5 
minutes for questions, and then we will go to the other 
members.
    Ms. Gershman, you had mentioned in your testimony, and 
other witnesses also, about the 177 projects, and that 62 
percent of this would be foreign investment. Are you all 
tracking these projects, and could you give us an update on 
your analysis of that?
    Ms. Gershman. Certainly. We have been tracking publicly 
announced projects, so nothing in our--any of our numbers are 
secret. It is all gathered from press releases that companies 
themselves have made. The 177 new projects that I reference 
include projects in the petrochemical, resins, fertilizer, 
chlor-alkali, and organic chemical sectors. There is an even 
larger of announced projects in other industries resulting from 
the use of shale gas, which includes iron, steel, tires, and 
many manufacturing plastic processors and resins as well.
    Mr. Whitfield. Now, you know, one of the frustrating 
things, obviously, about Congress today is that there seems to 
be very little agreement on much of anything, but on expediting 
the permitting process, even the President is talking about the 
need for that. The States come to us frequently and talk about 
the need for that. Mr. O'Mara talks that in Delaware things 
seem to be going relatively well. I mean, Mr. Walke may 
disagree and not think anything really needs to be changed, 
but, Mr. Walke, would I be accurate in saying that, in your 
view, really nothing does need to be changed about this 
permitting process right now?
    Mr. Walke. No. We would support the expediting of permits, 
just not at the expense of granting amnesty from health 
standards. That has been the focus of my testimony.
    Mr. Whitfield. But there are some methods to expedite that 
you all would be supportive of?
    Mr. Walke. Sure. Certainly. We would be happy to join that 
conversation.
    Mr. Whitfield. And Mr. O'Mara, now, you said that you had 
some ideas on this, because, like I said, the States have 
complained to us about lack of direction. We have heard a lot 
of witnesses talk about it, but evidently it is not an issue in 
Delaware. What are some areas that you think we should be 
looking at that maybe we are not looking at right now?
    Mr. O'Mara. I think some of the conversations you 
facilitated last year, actually, I think has some good kind of 
bipartisan ideas around greater communication with EPA. And, I 
mean, one of the hang-ups that happens in some other regions, I 
am fairly blessed in Region Three that we are talking to our 
regional administrator all the time, and----
    Mr. Whitfield. Are you referring to the forums?
    Mr. O'Mara. Yes, the forums that you held.
    Mr. Whitfield. OK.
    Mr. O'Mara. I mean, one area for, you know, greater 
collaboration is working with the EPA prior to submittal. So 
the States will send it back for the final review, and 
sometimes they get sent back, get remanded. You know, that 
process, if there is a greater coordination on the front end, 
can avoid a lot of the misunderstanding. And so you have seen 
some issues in some other States where there isn't that 
coordination up front, and you end up with this kind of 
torturous cycle. You know, if you can actually cut the back 
end, that provides a lot more certainty.
    I also think transparency could really help. You know, we 
try to be very transparent with our applicants, you know, 
about, you know, this is the date the draft permit is going to 
be issued, this is the date of the hearing, this is the date 
the decision will be made, so they can build that into their 
plan, because time is money. I mean, the cost of the permit is 
a fraction of the opportunity cost of not getting implemented. 
So, you know, more transparency there at the State and local 
level though, as Mr. Walke was saying, rather than at EPA's 
level, because really this is a local decision.
    And then the last is actually around money. You know, a lot 
of the cuts to the EPA have been in the air program in the last 
few years, and those are resources that actually pay for much 
of the staff that would be putting out the guidance that we are 
complaining is being delayed. Some of that trickles through to 
the States, because the State grants get cut also, and so then 
we are trying to do more with less, trying to get things out. 
And so having sufficient staff to deliver permitting, more 
transparency, and then encouraging additional investment I 
think would be a good package that everyone could agree to.
    Mr. Whitfield. OK. Mr. Eisenberg, are you personally aware 
of projects that have actually just been abandoned because of 
the complications of this permitting process?
    Mr. Eisenberg. Yes, I am. And the members themselves ask 
that I not reveal who they are, but yes, I mean, without a 
doubt. And this is not, you know, these happen. Sometimes they 
don't happen. So I don't want to make generalizations here, but 
yes, I have members that walked away from projects because the 
permitting process was taking too long, or the modeling got to 
a point where there was no way that they could build this 
facility to meet the standards that were being----
    Mr. Whitfield. You know, I am glad that you raised the 
greenhouse gas issue, because the endangerment finding, and 
even with the tailoring rule, I mean, I think EPA recognizes 
that they are going to have some significant issues, and those 
numbers that you gave about the 900 per year, and they have 
issued, like, 166, and I guess the endangerment finding was in 
2009. So I think that is a very real issue, but I think all of 
us recognize the need to try to come up with a solution, and I 
hope that we have an opportunity, all working together, to do 
that.
    My time has expired, so at this time I recognize Mr. Rush 
for 5 minutes.
    Mr. Rush. I want to thank you, Mr. Chairman.
    Secretary O'Mara, we often hear from regulated industries 
about the importance of regulatory certainty in making 
investment decisions. We even heard from some of the witnesses 
today that this bill would do nothing to enhance regulatory 
certainty. Has your State even been unable to issue 
preconstruction permits because EPA has not issued guidance for 
a new air quality standard, and is this a situation that States 
have the ability to handle?
    Mr. O'Mara. Thank you for the question. You know, we were 
the first State to sign the Constitution, so we have no problem 
kind of blazing ahead. And, frankly, in the case of times where 
there isn't guidance, we keep working hard, we don't wait. And 
so we will coordinate with the EPA, we will make sure they know 
what we are doing, but it is never held us up. And I have 
permitted, you know, hundreds of megawatts of combined gas 
plants. I have permitted big, you know, a restart of a refinery 
permitted, and big expansions of units, all kinds of energy 
projects in our State. And, you know, we are turning around 
permits very, very quickly, and it hasn't slowed us down at 
all, as long as we are communicating during the process.
    Mr. Rush. Do you agree with the assertion that this bill 
will provide greater transparency and timeliness in obtaining 
pre-construction permits for new manufacturing facilities? And, 
secondly, how does the EPA's role differentiate from the State 
role in the process, and how would this bill impact that 
relationship?
    Mr. O'Mara. I think that the concept of transparency is a 
good one, because I do think that there is additional public 
pressure that can be applied to, you know, permits that are 
languishing if it is more clear about, you know, what timelines 
are, and kind of where things are stuck in the process. I think 
it is at the wrong level in the bill, frankly. I mean, you 
know, does EPA headquarters have to have a list on their Web 
site of projects in Delaware, or should Delaware have that 
list?
    And as many of you know, that have served on, you know, 
State and local legislative bodies, I mean, there is nothing 
more effective to expedite, you know, decision-making than 
having folks, and, you know, having those kind of timelines 
public, because folks are held accountable. And so I think, in 
terms of consistency, I think it actually creates more 
confusion, because you will have different standards, and there 
will be lack of clarity for both the regulator and the 
industry, and I think the transparency should really be more 
focused on the State and local level, instead of the Federal 
level.
    Mr. Rush. This bill assumes that it is a huge problem if 
EPA does not issue rules and guidance at the same time as a new 
air quality standard, so the bill allows a facility to obtain a 
pre-construction permit pegged to an old air quality standard 
if the EPA hasn't issued rules and guidance. Does this 
facilitate permitting, or does it create new avenues for 
litigation and delay, in your opinion?
    Mr. Walke. Well, it is important to recognize that, you 
know, in the 37 years of this permitting program, it has been a 
requirement that new facilities meet revised health standards 
after they have been adopted. So the history of the 37 years, 
and I am not going to argue is an ideal history, but it shows 
that we can and do regularly, every year, every month, issue 
pre-construction permits at the same time that there are these 
standards changing.
    What puzzles me about the bill is, by granting amnesty to 
these newly constructed facilities, so for the first time ever 
in the Clean Air Act they don't have to meet updated health 
standards, it poses a dilemma that Mr. O'Mara pointed out. 
These facilities would actually model violations of the new 
standards, and some of the witnesses have indicated that that 
has happened previously. But I don't believe the bill intends 
to grant perpetual amnesty from revised health standards. There 
is some vagueness about the bill that my written testimony 
addresses.
    But if that is the case, then a facility has to come back 
again, after the fact, with an after the fact permitting 
exercise, retrofit control exercise, and in the meantime other 
businesses are suffering the burden of additional pollution 
controls that I think are probably also unintended consequences 
of the bill. So I am not going to argue that this system that 
we have today is perfect, or could not stand improvement, but I 
think this actually takes us backwards. It certainly does on 
the health front. I think it does vis-`-vis permitting of the 
individual facility, and certainly for the other local 
businesses in that area.
    Mr. Rush. I would like to just ask one additional question 
of both you and Mr. O'Mara. When you speak about public health, 
what is the impact on public health if this bill will go 
forward?
    Mr. O'Mara. Right now there are 30 million Americans, 
particularly on the East Coast, that are living with unhealthy 
air. And, you know, and I think, you know, in Delaware, where 
90 percent of our pollution comes from out of State sources, 
you know, the idea of new facilities coming in, being allowed 
to pollute more than cost-effective technology would allow, to 
not capture those reductions that are much cheaper than going 
back to an existing facility, where it might cost, you know, 50 
times as much to add pollution controls to an older facility. 
It is economically inefficient.
    But, I mean, this is what affects kids. I mean, I have a 2-
year-old daughter. I mean, the idea that she is breathing air 
that is unhealthy on a lot of days is painful. Seniors, you 
know, another disadvantaged population. So, at the end of the 
day, it is about people, and I think there are ways to avoid 
some of those impacts.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Whitfield. Gentleman's time has expired. There has been 
some comment about the burden on EPA of posting on its Web 
site. I might note that, in their budget documents, they 
already provide information on the percent of permits that they 
are issuing, so they already have a lot of this information. 
But at this time I will recognize the gentleman from Louisiana, 
Mr. Scalise, for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
having this hearing, and I thank all of the panelists for 
coming and providing the testimony, and for answering our 
questions. I know there are a lot of questions that we have. 
EPA is one of those agencies that we have a lot of questions 
for because, frankly, when you talk to people that are trying 
to create jobs out in the country, I know in South Louisiana, 
unfortunately, the biggest impediment that they tell me about 
when they are sharing their challenges at creating more jobs in 
America are the regulations, and the lack of guidance, the lack 
of obtainable type of standards that are coming out of 
Washington.
    And that is not the way that Government should work. 
Government should not be the impediment to American job 
creation because, and I think a few of us have touched on this, 
I have seen it, many cases, when businesses are making 
decisions of where to make investment, they are not just 
saying, I am going to make it in Louisiana, or I am going to 
make it in Delaware, they are looking at other countries. And 
we are losing some of these jobs to other countries because we 
are not getting clear guidance from Washington. And the EPA is 
one of the worst offenders.
    Now, let us be honest about this. When you look at some of 
the problems that we have seen from EPA, one of the reasons 
that this bill is necessary, and all it says, by the way, is 
that when they come out with some proposed rule, they have to 
concurrently publish regulations and guidance for implementing 
the rule. Just tell people how to implement it. Because a lot 
of times what we see is these rules have nothing to do with 
improving air quality. The rules are designed to literally try 
to inhibit people's ability to get a permit. That is not the 
Government's role, to stop people from making investment in 
this country and creating jobs.
    And, by the way, when those jobs go to those other 
countries, Brazil, or India, or China, you name it, we have got 
a list. When they go to those other countries, they don't use 
the standards that we have today. They emit more carbon. They 
don't follow the same kind of environmental regulations we 
already have. And yet, when these new standards come out, so 
often they are not about improving health and safety, it is 
about denying an industry. The President brags about the war on 
coal, saying he is going to bankrupt the coal industry. He 
doesn't want to see coal plants be more efficient. He wants to 
see them shut down, and he is doing it. That is not the role of 
the Federal Government.
    So when we talk about this, I want to at least get some 
questions answered about this investment that I hear about, 
that others hear about. We hear about over $100 billion of 
investment that is waiting to happen, really good high paying 
jobs in America. Obviously Louisiana would be one of those 
States that would benefit, but so many other States across the 
country would. I want to ask Ms. Kerrigan and Mr. Eisenberg, 
because you all are there on the front lines, can you share 
with us some of the stories you know? I mean, are these numbers 
right? Are they low, maybe high? When we hear about $100 
billion of investment that is waiting, and we just want 
guidance, want clear guidelines so that people can play by the 
rules. If you can share first, Ms. Kerrigan?
    Ms. Kerrigan. One hundred billion dollars is a lot of 
money. Even if it was half of that, I mean, that is 
significant, you know, in terms of investment that could be 
made in this country. And when you, you know, when you look at 
the uncertainty of this issue in general, I mean, it really 
does filter down to the small businesses. You know, the 
individual, you know, firms and small businesses that, you 
know, are planning to work on these projects, or are contracted 
to work on these projects, there is a lot of planning that they 
need to do, in terms of financing, in terms of human capital 
acquisition, in terms of investing in new assets, et cetera.
    So if there is delay, or any type of delay or derailment, I 
mean, this is very costly to business owners and entrepreneurs, 
and could be catastrophic for some, you know, if these 
projects--if they are planning to work on them, they have made 
the investment, and the project falls through. But----
    Mr. Scalise. And Mr. Eisenberg, because I know you talked 
about the, you know, the folks that you have heard directly, I 
have heard directly, of plants that have moved to other 
countries because of the inability to get any kind of guidance 
and direction, and get a permit to move forward and do 
something in a safe and effective manner in this country. I 
mean, can you give me a ballpark of what you think the number 
is that is out there of projects, manufacturing jobs, that are 
ready to go.
    Mr. Eisenberg. Sure. So we have had a couple different 
economists look at this, using the information that is out 
there, publicly available information, and also doing some 
research within the sectors, and there are two that we have put 
out. One is the one that that PWC did a couple years ago that 
said if we actually fully develop the shale resource that we 
have, then, based on the direct sort of upstream, midstream, 
you know, drilling kind of jobs, and then the manufacturing 
facilities that will then build out from all the energy, we 
could be creating, just with the manufacturing, a million jobs 
by 2025.
    We supported as study, as did ACC and a few other groups, 
that IHS Global Insight did a couple years ago, about a year 
ago, that looked at the natural gas value chain and chemicals, 
so it didn't get as far as PWC, but it took a much deeper dive, 
and it forecasted for manufacturing about half a billion new 
jobs by 2025. The numbers have been pretty consistent.
    The amount of development down there is really staggering. 
I mean, anecdotally, I have members come in and say, look, we 
can't build fast enough because we literally can't find the 
people to do it. You know, we have a pipefitter that shows up 
for work one day, and then the guy down the street outbids me 
for him the next day. So there is a lot waiting to happen down 
there if we can figure----
    Mr. Scalise. And I appreciate what you all do in trying to 
create jobs in America. A lot of people up here talk about 
helping small businesses. There are real things we can actually 
do. This bill is one of them. There is no amnesty in this bill. 
This bill just says, if you are going to put a new standard 
out, EPA--I mean, if one of your companies misses a deadline 
for filing the permit, they don't get the permit. EPA has 
missed deadlines over and over again. There just ought to be 
some transparency, and make the standard obtainable. Show how 
you can actually get it done. Don't put a standard out just to 
put somebody out of business and run those jobs to China. That 
is what we are trying to do here, and I thank you, Mr. 
Chairman----
    Mr. Whitfield. Gentleman----
    Mr. Scalise [continuing]. For the hearing. Yield back the 
balance of my time.
    Mr. Rush. Mr. Chairman?
    Mr. Whitfield. Yes?
    Mr. Rush. Mr. Chairman, I want to clarify a statement that 
you made, and----
    Mr. Whitfield. That I made?
    Mr. Rush. Yes, you made, that the EPA has the reporting 
data in its budget document. Mr. Chairman, we asked the EPA 
whether they had data on State permitting times, and EPA 
maintains that a database of the air pollution technology is 
required in major pre-construction permits. They do have a 
database, but it is voluntary. States are not required to 
report on that system, report to the system. Some States report 
voluntarily, other States report their most significant 
permits, and some may not do much reporting at all.
    The EPA estimates that perhaps only 50 percent of all pre-
construction permits make it into that database. Only 50 
percent, Mr. Chairman. This means that to get the data required 
by this bill, the EPA is going to have to impose new mandatory 
reporting requirements on the States. And, Mr. Chairman, I 
don't see how that will speed up State permitting. And if we 
had made it possible for the EPA to testify today, we could 
have heard this from the agency firsthand. And I just wanted to 
clarify those comments that you made a little earlier, Mr. 
Chairman. Thank you very much.
    Mr. Whitfield. Thank you so much for clarifying that. At 
this time I would like to recognize the gentleman from 
Michigan, Mr. Dingell, for 5 minutes.
    Mr. Dingell. Mr. Chairman, I thank you for your courtesy. I 
commend you for this hearing. My questions at first will be for 
Mr. Walke, Director of Climate and Clean Air Program.
    Sir, the Clean Air Act requires EPA to set protective air 
quality standards for pollutants, and States have the primary 
responsibility to meet these standards. The bill before us 
appears to ignore this division of responsibility and labor. 
Section 2 requires EPA to post information about permits issued 
by EPA, State, and local permitting authorities. Section 4 
appears to require that EPA report on permit delays and actions 
EPA is taking to address delays for permits issued not only by 
EPA, but also by State and local permitting authorities.
    Now, Mr. Walke, you have testified that State and local 
permitting authorities, not EPA, issue most of the pre-
construction permits in this country. Does any of the other, or 
do any of the other panelists disagree with that statement? OK, 
thank you, gentlemen and ladies. Now, this means, then, that 
Section 2 is requiring EPA to record an expenditure report on 
what scores of State and local permitting authorities are 
doing. To your knowledge, does EPA currently have the 
information that is required by Section 2, yes or no?
    Mr. Walke. No, sir, I do not believe they do.
    Mr. Dingell. OK. Does anybody disagree with that statement?
    Ms. Gershman. I actually think that there might be a 
question as to what information EPA has versus does not have. 
In the appropriations language for fiscal year 2015, there is a 
performance metric in there for EPA that states that it is 
tracking the number of major permits that are being issued each 
year, and there is a percentage target of 78 percent that are 
issued within a year. But what we do not know is where that 
number comes from.
    Mr. Dingell. Thank you very much. It also appears that 
Section 4 would require EPA to go through public notice and 
comment to prepare an annual report on delays in pre-
construction permits issued not only by EPA, but also by State 
and local permitting authorities. Mr. Secretary, is that right?
    Mr. O'Mara. Yes.
    Mr. Dingell. Now, to your knowledge, does EPA have or 
regularly collect information from State and local permitting 
authorities on the specific reason for delays in issuing 
permits, yes or no?
    Mr. O'Mara. Not formally. There is a lot of conversation, 
but not----
    Mr. Dingell. Now, Mr. Secretary, if EPA doesn't publish 
implementation guidance, or is late in so doing, are State 
permitting agencies equipped to issue pre-construction permits 
in a timely manner, yes or no?
    Mr. O'Mara. Yes.
    Mr. Dingell. Now, Mr. Secretary, the bill creates a 
loophole that could allow a new facility to meet an old air 
quality standard. Will this do anything to help the State of 
Delaware process its permits faster, yes or no?
    Mr. O'Mara. No.
    Mr. Dingell. You would be finding yourself in the awkward 
position of approving permits to an old standard, rather than 
the new one, the current one, is that right?
    Mr. O'Mara. Yes.
    Mr. Dingell. Now, the language of Section 3 is also ripe 
for litigation. Do you agree with that, and if so, could you 
please elaborate?
    Mr. O'Mara. Yes, I do believe that it is, because there is 
an open question about when the new standard is already in 
place, but when the guidance is then finalized, whether the 
facility that was permitted without the guidance under the old 
standard would then have to make immediate retrofit and 
upgrades to it, setting up citizen suits, setting up legal 
challenges, setting up inequity with other firms. So the legal 
uncertainty is significant, we believe.
    Mr. Dingell. So it sort of appears here that we may be 
imposing, by the legislation, additional burdens that are 
unproductive, rather than by reducing the burdens, is that 
correct?
    Mr. O'Mara. Yes.
    Mr. Dingell. Mr. Chairman, I thank you for your 
recognition. I commend our panel. I hope that we have been 
listening to my dear friend, Mr. Rush, who is very wise in 
these matters. And I thank you for your courtesy to me and the 
panel. Thank you for your----
    Mr. Whitfield. Yes, we always listen to him. Thank you, Mr. 
Dingell. At this time I would like to recognize the gentleman 
from Ohio, Mr. Latta, for 5 minutes.
    Mr. Rush. Mr. Chairman.
    Mr. Latta. Well, thank you very much, Mr. Chairman, and 
thanks very much for our panelists for being here today. Just, 
again, I always like to just kind of preface what I am going to 
say with a little bit about my district, and the State of Ohio, 
and also what goes on, I think, in manufacturing. I have got 
60,000 manufacturing jobs in my district. I not only have 
60,000 manufacturing jobs, since my staff actually started 
keeping track, over the last 22 months I have done about 500 
visits in my district to manufacturing facilities, businesses, 
you name it, across it. The number one issue I hear from 
everybody out in my district are Federal regulations.
    And when SBA came out with their statistics a couple years 
ago, showing that in 2011 we had $1.7 trillion of regulations 
out there, that was a problem. But now, when we look at the 
update for this year, in 2014, we are looking at about $1.9 
trillion. I have never had any of my businesses out there that 
I have ever gone through, small, medium, or large, ever say 
that they were against clean air, against clean water. But what 
we are looking at is a problem with trying to comply, and also 
with the EPA always being the number one issue out there.
    Now, one of the things that--I was in one plant, and it was 
a very large manufacturer, and they probably had a table about 
the size of what we see across here, and it was full of all 
these books, and everything else, and they said one thing to 
me. You know, one of the problems we have is trying to comply 
with this, but the problem that they had was the EPA was trying 
to tell them to take a square peg, pound it through a round 
hole, because those regulations didn't even work for their 
plant. So it really comes down to we want to make sure that, 
you know, we have everybody on the same cylinders, because, as 
we have heard from our witnesses today, especially for the 
number of jobs that are out there that we have the in the 
potential in the future are very, very important.
    So, Mr. Eisenberg, if I could start with you, you note in 
your testimony that revisions to the national ambient air 
quality standards can affect the ability to obtain air permits, 
and you specifically referenced the potential revisions to the 
ozone standards. And can you explain?
    Mr. Eisenberg. Yes, thank you. So we are now at a level 
that was put in place in 2008, was recently affirmed by the DC 
Circuit, of 75 parts per billion for national ambient air 
quality standards for ground level ozone. Those levels are 
subject to change every 5 years, subject to revision. We are in 
the middle of one of those cycles right now. EPA is on a 
deadline to put out new ozone NAAQS in December of this year, 
and finalize them by October of next year.
    The last go round, EPA's numbers were about $90 billion a 
year. We are looking at it, and we are thinking that it could 
actually be a little bit higher than it. The reason, quite 
frankly, is that, you know, we have made a lot of progress here 
on ozone, and we are getting to a point where the gains are 
getting a lot more expensive because, quite frankly, a lot of 
the technologies that we are required to get down to some of 
these levels just don't actually exist, and you have to get 
very, very creative, and do things that may be a little 
unconventional, and a lot more expensive, than we would expect.
    If I could take a second, you know, one of the big 
assumptions here that we are making on this bill, in terms of, 
you know, some of the slippery slope downstream problems that 
it could cause is that if you, the Congress, were to tell EPA 
that it has to do the guidance concurrently, then it wouldn't 
do it, and then all these bad things would happen. We hope that 
EPA would do it, and that these problems would be avoided. So, 
you know, again, if EPA just didn't do it, and ignored the 
statute, then yes, you could be creating some unintended 
consequences, and you certainly would do that in the case of 
ozone. We would hope that, certainly for ozone, and for 
something that is going to cost that much, that we could get 
this guidance concurrently, so that we are not just stuck in 
limbo as the goalposts were moved.
    Mr. Latta. Thank you. Ms. Kerrigan, if I could ask, you 
refer in your testimony to the complex and tentative regulatory 
permitting process that businesses face in this country. Do you 
believe that it is important to look for ways to expedite the 
permitting process, and is that critical for job growth in this 
economy that we have?
    Ms. Kerrigan. Absolutely. Look, we have, you know, we have 
heard the other testimony, and the investment dollars that are 
out there, and that are going to be invested in these projects. 
And, from a small business perspective, when I hear numbers 
like the ACC's numbers, in terms of $100 billion, I mean, I 
think small business. I think small business opportunity, new 
business formation, new jobs, all the things that our economy 
needs to get back to robust growth, and back to competitiveness 
again.
    So not only in permitting, but in other areas, if there is, 
you know, if Government can improve, and it can work better, if 
it can work in collaboration with the business community, I 
mean, that is going to get these investment dollars flowing, 
and get our economy back to robust levels of growth again.
    Mr. Latta. Well, thank you very much. And, Mr. Chairman, I 
see my time has expired, and I yield back.
    Mr. Whitfield. At this time the Chair recognizes the 
gentleman from California, Mr. Waxman, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman. I have several 
concerns about this bill. It follows the House Republicans' 
mantra that the way to produce jobs is to weaken environmental 
protections. I don't believe that is the case. It assumes that 
EPA is the problem, even here, where States are issuing almost 
all of these permits. In fact, the bill would likely slow 
permitting by diverting State and EPA resources, and adding 
legal uncertainty.
    But I want to focus on another problem. Section 3 of the 
bill undermines decades of Clean Air Act practice, and weakens 
air quality protections. The Clean Air Act requires a large new 
or expanding industrial facility to get an air pollution permit 
before starting construction. The facility must commit to 
install pollution controls. It must demonstrate that its 
emissions won't produce unhealthy levels of air pollution in 
the area. And if the facility's pollution would cause the area 
to violate an air pollution standard, then the facility must do 
more to reduce or offset its emissions.
    Well, this bill creates a loophole in the law. If EPA fails 
to meet new procedural requirements, the bill would allow a 
facility to get a permit by measuring its emissions against an 
outdated, less stringent air quality standard. Mr. Walke, you 
called this amnesty. What is the practical effect of allowing a 
new facility to be permitted under an outdated standard?
    Mr. Walke. Well, the practical effect is the facility will 
emit pollution at levels that we know to be unhealthy, that 
previously, under 37 years of law, we had required them not to 
emit at in order to protect the public. And Mr. O'Mara, and his 
colleagues across the country, will be left explaining to 
concerned members of the public that Congress forced him, and 
his colleagues, to allow a facility to pollute at unhealthy 
levels that he cannot assure them are protective of air quality 
where they live.
    Mr. Waxman. So a permitting authority might have to issue a 
permit for a high air polluting facility? Mr. Walke, what are 
the public health implications of exempting new or modified 
facilities from more protective air quality standards?
    Mr. Walke. The Clean Air Act, since 1970, has required 
national health standards that are requisite to protect public 
health with an adequate margin of safety, the safety margin, 
primarily to protect children, seniors, asthmatics, and other 
vulnerable parts of the population. This bill wipes away those 
safeguards and says, we are going to allow this facility to 
pollute at levels that are not necessary to protect the public 
with that adequate margin of safety, and it will allow 
excessive and unhealthy levels of pollution that the law 
currently does not allow. We should be very clear about that.
    Mr. Waxman. Secretary O'Mara, what impact could this have 
on States like Delaware, that are downwind from polluting 
sources?
    Mr. O'Mara. Right now we are working, using every vehicle 
in our disposal, to both reduce emissions in the State, and we 
have reduced emissions more than any other State in the country 
over the last 5 years, but also trying to get more reductions 
upwind. By having facilities that could cost-effectively have 
fewer emissions, and not capturing them at that point, you are 
either going to have to find ways to reduce it in other places, 
which would be more expensive, or we just have to suffer worse 
and worse health outcomes. Either outcome is bad for the 
economy, and bad for the environment.
    Mr. Waxman. So the bill shifts the burden of air quality 
improvements from new plants to existing ones, existing 
facilities. Doesn't that raise the cost, when you are trying to 
retrofit an existing? Isn't it more reasonable to say it would 
be less expensive of a new facility that is coming online, that 
is going to be around for a longer period of time, should bear 
the cost of producing the emission reductions?
    Mr. O'Mara. Yes. I mean, study after study shows that it is 
much more cost effective to integrate pollution controls and 
system designs to meet new standards as you are building a 
facility as compared to retrofitting it. And so the idea of 
going back to, you know, a paint shop to make up for, you know, 
emission reductions, because the big facility could have gotten 
30 percent fewer emissions, but they didn't make the 
investments, is going to cost 50 times as much for the small 
guy, I would argue hurt manufacturing more than the avoided 
controls will help it.
    Mr. Waxman. So we raise the overall cost of pollution 
controls, and we harm public health at the same time. That 
doesn't sound like a very good deal to me. Existing industrial 
sources in your State, particularly if a new facility pushes an 
area into violation of the Clean Air Act, would be not just 
more expensive, but that would trigger a lot of other 
consequences as well. Would that be fair and cost effective?
    Mr. O'Mara. Neither fair nor cost effective.
    Mr. Waxman. And I think, Mr. Chairman, this goes against a 
key principle of the Clean Air Act, which requires new sources 
to do more because they will be around longer, it is a lot more 
cost effective to put in pollution controls up front. And if we 
step back and recognize the Clean Air Act works, it protects 
public health, it holds polluters responsible, fosters a State/
Federal partnership, and produces cost effective pollution 
control, as far as I can tell, this bill would do none of those 
things. Thank you. I yield back my----
    Mr. Whitfield. The gentleman's time has expired. At this 
time recognize the gentleman from West Virginia, Mr. McKinley, 
for 5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman. I guess I am working 
under the premise, from what I have read coming into this 
hearing, that some of these delays can be anywhere from a third 
to 40 percent of these pre-construction, or other EPA permits 
can be delayed for over a year. I know of one example, out on 
the West Coast, in Bellingham, Washington, they have been 4 
years trying to get a permit to export coal, 4 years. Four 
years.
    Mr. Walke, in your adult life, have you ever been 
unemployed?
    Mr. Walke. No, sir.
    Mr. McKinley. I am afraid too many people in the Beltway 
don't understand what that must feel like, when you are 
married, your 2-year-old child, you lost your job, and you are 
told they are going to build this other plant, or there is a 
hope for something to happen, but it keeps getting delayed time 
and time and time again. When do we become more caring, as a 
Nation, to find out how we can move these projects forward?
    People want to build construction, or they want to build 
these manufacturing plants. The President has said he wants to 
do that. You say in your testimony that you would like to see 
that. But you seem to be putting perfect in front of just the 
good with this legislation. We are trying to make something 
happen, and we see Government constantly standing in the way. 
It is a dangerous thing that I have noticed here. I have only 
been in Congress for 4 years, but I see well-meaning people 
come to these panels, and their true intent is to stop 
legislation. And they do it very clever, with their words, how 
they twist them around, but the bottom line is not to let 
something happen.
    And all the while there are people in West Virginia, in 
Illinois, in Indiana, and Iowa, that are looking for jobs. They 
need manufacturing to come back to America. And people like you 
stand in the way because you want perfect to be the enemy of 
good. And let me ask you, what would you do to expedite these 
permits so that there is no reason--you and I both know it. I 
am an engineer. I have designed a lot of manufacturing plants. 
I have seen the delays on that. Why should they take over a 
year to get a preconstruction permit?
    Mr. Walke. Mr. McKinley, if I may, you have chosen to spend 
a lot of your time talking about me, and I do care. I am here 
giving my time as a citizen and a witness----
    Mr. McKinley. Would you please answer the question? 
Because----
    Mr. Walke [continuing]. Because----
    Mr. McKinley. OK, that is the way you come across to me.
    Mr. Walke. We have a----
    Mr. McKinley. That is my impression.
    Mr. Walke [continuing]. Public policy----
    Mr. McKinley. Tell me how we are----
    Mr. Walke [continuing]. Disagreement.
    Mr. McKinley [continuing]. Going to get----
    Mr. Walke [continuing]. That there is no need----
    Mr. McKinley. How are we going----
    Mr. Walke [continuing]. To make----
    Mr. McKinley [continuing]. To get this thing----
    Mr. Walke [continuing]. Personal.
    Mr. McKinley [continuing]. Working across America again? 
That is my question. Just how are you going to help us do it?
    Mr. Walke. I think I have answered the question that I am 
willing to answer for you, Mr. McKinley, after your remarks. 
Thank you.
    Mr. McKinley. Well, apparently you don't choose to help us 
out, because we are trying to find a solution, and you seem to 
be putting up roadblocks.
    Mr. Walke. I am here to----
    Mr. McKinley. So----
    Mr. Walke [continuing]. Help, Mr. McKinley----
    Mr. McKinley [continuing]. I am sorry that the--Mr. O'Mara, 
would you find ways that you might be--find that you could help 
us expedite some of these, and find some solutions?
    Mr. O'Mara. Yes. I think we have done a lot of work with 
the value stream mapping, figuring out where the dead spots 
were in the timing of the permits. We issue our permits in 
about 4 months, 4 to 6 months on average in Delaware, which is 
significantly less than the year minimum that is required in 
the law.
    You know, we have better communication, more transparency. 
We fund our programs probably a little better than some other 
States, and we have a lot more collaboration with industry. And 
so, you know, I mean, I think those are all things--and the 
other thing that we have worked on, a lot of the plants are 
looking for access to natural gas, and they can't figure out a 
way always to get access, because a lot of times they have to 
bear the entire burden of the cost of getting the gas pipeline 
to their facility. We have actually helped with the cost of 
that, in many cases, to make the economics better for some of 
these manufacturing plants. But we have a range of things in 
Delaware we would love to share. I mean, I know Randy pretty 
well in West Virginia, my counterpart, and they are doing some 
good things in West Virginia on the permitting side too.
    But, you know, there are a lot of these conversations going 
on among State regulators, and there are things that we can do 
to move things a lot faster.
    Mr. McKinley. And at this time, my concern here, again, as 
you heard from my opening remarks, there are a lot of people 
unemployed that are struggling out there, and I wanted to find 
ways that we can show more caring and compassion to help them 
out. How can we move that along? We have the resources. It is a 
matter of prioritizing the time within the EPA, or wherever it 
is, to make those things happen. And when you, with your 2-
year-old child, and someone else with a 2-, or 4-, or 6-year-
old child, they just want a job. And when they hear someone 
holding up a permit because of a technicality, I find that 
offensive, and it is not good for the welfare of this country. 
So I yield back the balance of my time. Thank you.
    Mr. Whitfield. Gentleman yields back. At this time will 
recognize the gentleman from California, Mr. McNerney, for 5 
minutes.
    Mr. McNerney. Thank you, Mr. Chairman, and I thank the 
witnesses for their testimony. There is a good spectrum of 
opinions that came across this morning. I do want to say that I 
disagree with some of my colleagues' statements that the EPA's 
total purpose is to prevent projects from going. I mean, that 
is not realistic. That is fairly biased, so we will move on 
from that.
    But, you know, from our point of view, when you hear 
testimony, you hear fairly contradictory ideas regarding 
uncertainty. Does this bill, proposed bill, increase 
uncertainty, or does it increase certainty? Does it increase 
State agency burdens, or does it decrease State agency burdens? 
Does it improve air quality, or does it decrease air quality? 
Those are the things that I would like to understand about this 
bill. So I know that these have come up already in some of the 
questions, but I would like to start with the increasing of the 
certainty, or decreasing of the certainty, that this bill would 
provide.
    And I would like to start with Ms. Kerrigan. Would you give 
an opinion about whether this would increase or decrease 
uncertainty in the permitting process for manufacturers?
    Ms. Kerrigan. Sure. I think it would increase and improve 
certainty. The transparency aspect, you know, of the 
legislation, in terms of the posting of the information about 
the permits, the percentage of the permits, the timing of the 
permits, you know, public measurement of that, those type of 
things, tends to improve performance. So----
    Mr. McNerney. How about legal challenges? Would legal 
challenges be enhanced or diminished?
    Ms. Kerrigan. You know, I am not quite sure. That assumes 
that the EPA, as I read this law, wouldn't do its job under 
this legislation, that it wouldn't be doing the concurrent 
guidance and the rules, along with an Act. So, you know, if 
they didn't do what they were supposed to do, then this stuff, 
you know, some of the unintended consequences, the legal 
challenges and things like that, may occur.
    Mr. McNerney. Mr. Walke?
    Mr. Walke. Well, as I have testified, I believe the bill 
probably unintentionally creates greater legal uncertainty and 
vulnerabilities for both the facility that is receiving the 
amnesty under Section 3(b), as well as other local businesses 
that, as Mr. O'Mara has testified, are now going to be facing 
greater and more costlier obligations to retrofit, and to make 
up for that shortfall. I don't think you meant misuse of the 
term uncertainty, but I think the bill does create the 
certainty that unhealthy emission levels will increase in the 
area, and the certainty that local communities will be 
subjected to unhealthy air pollution is just an inescapable 
result of the amnesty.
    Mr. McNerney. Which would increase legal problems for the 
manufacturers?
    Mr. Walke. Well, I suspect that there may be some unhappy 
citizens and groups in those communities that do not wish 
unhealthy air pollution levels to increase, and the bill 
creates, you know, legal uncertainties and vulnerabilities for 
such lawsuits, not only created by the bill, but in the 
background law that allows citizens to hold Government 
accountable when they don't uphold the law.
    Mr. McNerney. Well, thank you. Mr. O'Mara, would Promoting 
New Manufacturing Act place a large burden on States, or would 
it reduce the burden on States?
    Mr. O'Mara. It increases the burden. It increases it in two 
major ways. One is that the regulatory uncertainty of having to 
permit facilities under an old standard, knowing that you are 
going to need to ask existing facilities to make up for their 
shortfall to meet your State goals is a challenge. And then 
some of the report challenges folks--if they were, you know, 
feeding information to the EPA, rather than delivering permits, 
that could slow down the permits as well.
    Mr. McNerney. Does anyone on the panel believe that the 
bill would improve air quality?
    Mr. Eisenberg. If I may, I don't believe that this bill's 
intention is to improve or degrade air quality, one or the 
other, it is just to make the permits happen faster. I mean, no 
manufacturer wants to pollute more, right? I mean, so----
    Mr. McNerney. Clearly.
    Mr. Eisenberg [continuing]. We just want to make----
    Mr. McNerney. If you live in a non-attainment region, you 
certainly don't want to see things get worse, and I have a fear 
that this would make things worse.
    Last question, Mr. O'Mara, do you have specific 
recommendations that would improve the permitting process that 
you would like to share, perhaps in written version later on?
    Mr. O'Mara. Absolutely. Would be happy to share an example.
    Mr. McNerney. All right. Mr. Chairman, I yield back.
    Mr. Whitfield. Gentleman yields back. At this time 
recognize the gentleman from Texas, Mr. Olson, for 5 minutes.
    Mr. Olson. I thank the Chair, and welcome all the 
witnesses. The people back home in Texas 22 want clean air and 
clean water, and they know that we have made great strides in 
improving our environment. Of course, these protections have 
come at a cost. But if we go too far, if we allow regulations 
to become red tape with little benefits, we block economic 
opportunity. We kill jobs. Sometimes I think EPA forgets that 
poverty is a threat to public health too. Rules show that 
economic expansion hurts the most impoverished in Texas. Slow 
economic expansion hurts the most impoverished in Texas, and 
that is why bills like this one before us are so useful.
    As Mr. Eisenberg testified, we will see a new ozone rule. 
It will likely be among the most expensive regulation in our 
country's history. EPA's estimate of a 10-year, $1 trillion 
drag on our economy could be the low end. That doesn't make for 
a merry Christmas. Every State will see tough new permit 
requirements. Creating jobs will be harder.
    With that in mind, it is not unreasonable to demand 
transparency and fairness on New Source Review. We need to get 
this right, and strike the right balance before it gets worse. 
We have almost 10 million unemployed people in this country. I 
wonder what they would give to have a plant, or a job, in their 
hometown.
    My first questions are for Ms. Gershman and Mr. Eisenberg. 
Recently EPA has failed to release updated guidance after it 
published new NAAQ standards. We are giving people a target, 
but leaving them in the dark as to how to get there. That is 
unfair. It brings uncertainty at a time when NAM and ACC 
members are making multibillion-dollar investment decisions. 
How important is a good understanding of timing when a major 
project is on the line? How important is that? Ms. Gershman?
    Ms. Gershman. You are really hitting the nail on the head, 
and I want to emphasize that, you know, the facilities that we 
are building are state of the art. They have pollution 
controls. Nothing in this legislation is doing anything to 
undermine the NAAQS and the permitting process itself. These 
facilities will already have to install the best available 
control technology, or ensure that it has the lowest achievable 
emission rate. None of that is being changed. What we are 
simply here to ask is for EPA to make sure that it has thought 
through some of the implementation challenges that come about 
with these lower standards. That is what we are asking.
    EPA is still working to implement some of these standards 
that they have put in place, with the unintended consequences 
of not having the models available, or not having monitoring 
available to make the designations. Areas that are in limbo 
between standards do not necessarily know how to proceed. This 
holds up permits. A lot of these projects come with a 
substantial amount of financing attached. This financing is not 
available indefinitely, and if these permits aren't issued, 
there are times where the financing will disappear, and the 
projects will therefore not go forward. And that is really what 
we are trying to do here.
    Mr. Olson. Yes, ma'am. Mr. Eisenberg, you as well, sir.
    Mr. Eisenberg. Thank you. I think Ms. Gershman summed it up 
quite well. You know, we wouldn't be talking about this if it 
hadn't become a problem already, and it is a problem that we 
just want solved. You know, you saw in my written testimony the 
list of issues that my members have. There was very little 
editing on my part in that list. I mean, I just said, hey, 
guys, can you send me what you think, and I just put it in 
there, and they have a lot of problems.
    I don't think that they are under the illusion that this is 
ever going to be perfect. They just want it to not be 
impossible, and it is at a point where it is impossible.
    Mr. Eisenberg. And one final question for all the 
panelists, if EPA releases new air quality standards, do you 
believe that the agency should always issue rules and guidance 
in a concurrent or timely fashion, yes or no? Ms. Gershman?
    Ms. Gershman. Yes.
    Mr. Olson. Mr. Weiss? Mr. O'Mara?
    Mr. O'Mara. Yes, but we shouldn't stop the permit if they 
don't.
    Mr. Olson. Mr. Walke?
    Mr. Walke. As warranted.
    Ms. Kerrigan. Yes.
    Mr. Olson. And finally, Mr. Eisenberg?
    Mr. Eisenberg. Yes.
    Mr. Olson. One final question, Mr. Eisenberg, about ozone. 
These new rules would put most of our country in non-
attainment. Doesn't that make sense to make this step right, 
make it more important that this permitting process is correct?
    Mr. Eisenberg. So you raise a very interesting issue there. 
I put some graphics in my testimony where we literally mapped 
out all of the projects that are now on the slate because of 
this new energy resource, and they all fall in areas that would 
presumably be non-attainment at 60, which is the low end of 
what EPA is considering. We are extremely concerned about this, 
and so, at a minimum, we need the permitting fixed on the 
backend, so that if we get hit hard on the front end, we at 
least have a way forward.
    Mr. Olson. I am out of time to get back. By the way, sir, 
five National parks and forests will be attainment with this .6 
parts per billion standard. Five.
    Mr. Whitfield. Thanks for your enthusiasm, Mr. Olson. At 
this time I would like to recognize----
    Mr. Olson. Thanks.
    Mr. Whitfield [continuing]. The gentleman from New York, 
Mr. Tonko, for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair, and welcome, witnesses, 
and let me thank you all for sharing your thoughts with this 
committee. I do find it regrettable, though, if your personal 
integrity is challenged, or when your thoughts are offered, and 
we put you down for that.
    We all support efficient and effective permitting that 
protects public health and our environment without unnecessary 
delays, but this bill won't accomplish that goal, in my 
opinion. Rather than helping State agencies process permits, or 
helping EPA support States, the bill actually distracts the 
very people tasked with writing the permits and implementing 
the law. The bill requires EPA to publish data on permit 
processing times, but EPA doesn't have this information because 
States, not EPA, issue almost all of the permits. My 
understanding is that States voluntarily provide some 
information, but to get all of the information required by the 
bill, EPA is going to have to put new reporting requirements 
upon States.
    Secretary O'Mara, do you think EPA publishing data on 
permitting times will help Delaware issue pre-construction 
permits more quickly?
    Mr. O'Mara. No, because I think, at the end of the day, 
having the local entity, whether it is a local quality 
management district or a State, in our case, having that 
information delivered at the local level, so it is more 
transparent, is actually a better use of time. There is more 
accountability locally than at the national level.
    Mr. Tonko. Thank you. And would it be a distraction for 
your permitting staff if they have to collect information for 
EPA?
    Mr. O'Mara. Well, every minute they are spending on that is 
a minute they are not issuing a permit.
    Mr. Tonko. Thank you. The bill also requires EPA to report 
to Congress every year about the agency's efforts to expedite 
pre-construction permitting. Again, since States are the 
primary permit writers, it is unclear how EPA will be able to 
explain, or commit to resolve, any permitting delays. Secretary 
O'Mara, would this report to Congress help Delaware Expedite 
its pre-construction permitting?
    Mr. O'Mara. No.
    Mr. Tonko. While the core of this bill requires EPA to 
issue guidance and rules concurrently with any new or revised 
air quality standard, putting aside whether or not this is a 
workable or useful requirement, one thing is clear. It would 
require EPA to do still more work on a shorter timely.
    Mr. Walke, what do you think? Do you think this bill's 
reporting requirements will make it easier or harder for EPA to 
issue guidance and rules more quickly?
    Mr. Walke. I think it will make it harder.
    Mr. Tonko. Now, this committee wants EPA to do more, more 
information collection and publication, more actions to 
expedite State permits, and more reports to Congress, more and 
faster rules of guidance for every revised air quality 
standard. Common sense dictates that this would require more 
people and more resources, but the bill fails to provide the 
agency with any new funding. In fact, my Republican colleagues 
have voted time and time again to slash the EPA's budget.
    Mr. Walke, how have budgeted cuts affected EPA's ability to 
implement clean air programs?
    Mr. Walke. We have actual evidence that EPA itself has told 
Federal courts, and has certainly told stakeholders that they 
lack the necessary budget resources today to fully carry out 
the law, and my written testimony has just an example of that 
that occurred in a court case, I think about 2 weeks ago.
    Mr. Tonko. Unfortunately, EPA is not here today to tell us 
how this bill would affect the agency's ability to issue timely 
guidance and rules, while satisfying this bill's reporting 
requirements. I hope we will have a chance to hear from EPA 
before marking up this bill.
    Secretary O'Mara, I will ask you this, as the lone 
Government official on this panel. Would you rather have EPA 
focus its limited resources on implementing air quality 
standards, and providing technical assistance to States, or on 
collecting data and reporting to Congress?
    Mr. O'Mara. We will take any help we can get to have them 
help us issue permits more quickly.
    Mr. Tonko. Thank you. If my Republican colleagues are 
actually interested in making permitting faster and more 
efficient, then they should start by ensuring that EPA and 
State agencies have the resources they need to implement the 
law. And, with that, Mr. Chair, I yield back.
    Mr. Whitfield. The gentleman yields back. At this time I 
would like to recognize the gentleman from Mr. Louisiana, Mr. 
Cassidy, actually, he is not Mr. Louisiana, he is Mr. Cassidy 
from Louisiana, for 5 minutes. I was all set to call on Mr. 
Griffith, and then you--OK. Mr. Griffith, you are----
    Mr. Griffith. All right.
    Mr. Whitfield [continuing]. Next, 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman, I appreciate that. 
Mr. Eisenberg, you were asked earlier if you thought that this 
bill improved air quality, and you said you weren't sure that 
that was the purpose of the bill, but I would submit to you 
that it may be part of the purpose of the bill. It may not have 
been the primary purpose of the bill, and here is the 
reasoning.
    I think Mr. Scalise hit on it earlier, that I think that 
this does actually work to improve air quality. You indicated 
in your prior testimony that while nobody wanted to be named, 
that you had members of your organization who had not opened up 
facilities, or had stopped working on a project because of the 
length of time, and the fact that they weren't certain what was 
going to happen with the permitting process through the EPA 
because of the length of time, and the uncertainties caused by 
the current system.
    And what we know is, according to a NASA study, it takes 10 
days for the air to get from the middle of the Gobi Desert to 
the Eastern Shore of Virginia. When you are talking about air, 
we all share the same air. So either that company chooses, for 
regulatory purposes, to open up their facility in another 
country, which doesn't have the standards that we have, or they 
choose to let their competitors in another country produce the 
product that they could have produced in the United States, 
creating jobs for American citizens, and at the same time those 
countries don't have the regulations that we have in existence 
in our country.
    And the delay in the regulatory process thus means that 
that product, whether it is a Styrofoam cup, or some big piece 
of equipment, is going to be made in some other country, as 
opposed to being made in the United States, thus we have 
damaged the air of the world, particularly the air in the 
Northern Hemisphere, if it goes in the Northern Hemisphere, 
which then directly impacts the air quality in the United 
States. With that reasoning in line, wouldn't you agree, then, 
that this bill, by making the process easier, and encouraging 
manufacturing in the United States, where we do care about our 
air quality, actually does improve air quality? Would you agree 
with me on that?
    Mr. Eisenberg. I would, and thank you for pointing that 
out. You know, and, frankly, if EPA does the job that Congress 
would be requiring in this bill, then the permits are issued 
quickly, and done at the levels that the statute would require. 
And so, yes, it would absolutely improve air quality.
    Mr. Griffith. Yes. And I think that everyone would agree, 
and, Ms. Gershman, if I understood your testimony earlier, your 
folks are doing the best that they can with the state-of-the-
art technology. They don't want to be out here dumping things 
into the air. They are trying to do what is currently 
available, and they just need to know what the regulations are 
going to be, and it is that uncertainty which leads them to 
have frustration, and maybe even, as well, look at perhaps 
using another country, or allowing a competitor to produce the 
product. Is that also true?
    Ms. Gershman. Yes, that is correct. We are already doing 
the state of the art. We are taking the best available 
technologies and installing them on our new facilities.
    Mr. Griffith. And whenever there are delays, that can also 
create costs, which don't help us create new jobs. It creates a 
negative impact on jobs.
    Ms. Gershman. Absolutely.
    Mr. Griffith. So, and I don't know who might want to touch 
on this, maybe Mr. Eisenberg, because I was talking with some 
people this morning, and we went to my old boiler MACT bill 
that I had in a few years back, and they were lamenting 
particularly the timelines not having been passed because of 
the uncertainty. Just like this bill, that bill tried to deal 
with some of the uncertainties, and they were talking about the 
fact that regulations came out in 2004, and a lot of companies 
started--because they had a short time period, they started 
implementing, and spent millions and millions of dollars 
complying with the 2004 regs.
    Then those got overturned in court, and the EPA had to come 
up with new regs, and now they are spending millions and 
millions of dollars to do things. And we heard testimony about 
even from universities. Not just always manufacturers that get 
hit by this, but the universities got hit by this. They spent 
the money to comply, then found out they weren't in compliance, 
and that creates a problem as well, does it not?
    Mr. Eisenberg. It absolutely does.
    Mr. Griffith. And so what we are trying to do here is--
there is a balance, and I appreciate Mr. O'Mara working with us 
on that balance, and all of you all trying to find that 
balance. We all want clean air. We all want clean water. What 
we have to do is try to figure out a way that we can have some 
certainty for those people who are creating the jobs, and at 
the same time make sure that we are moving forward to make our 
country the best that it can be. But that does not mean that we 
have to destroy jobs in the process. Wouldn't you agree with 
that, Mr. Weiss?
    Mr. Weiss. I do agree with that.
    Mr. Griffith. And I do appreciate it. Thank you all so much 
for being here today, and for your testimony today. And, with 
that, Mr. Chairman, I yield back.
    Mr. Whitfield. Gentleman yields back. Mr. Cassidy, you are 
up next, or would you prefer that I go to Mr. Terry?
    Mr. Cassidy. Go to Mr. Terry.
    Mr. Whitfield. OK. I will recognize the gentleman from----
    Mr. Terry. I appreciate----
    Mr. Whitfield [continuing]. Nebraska, Mr. Terry, for 5 
minutes.
    Mr. Terry. Thank you, Mr. Louisiana, I appreciate that. A 
little bit of a mild rant here first, just to kind of set the 
stage why I do think we need to be more specific in timelines, 
just some of my personal experiences with people in my 
district.
    For example, a family owned business, called Magnolia 
Steel, employs about 50 people just a few miles outside of 
Omaha, but the family lives in my district. They wanted to 
expand. They were adding about 20 people. But they had to 
extend the building, and since they pour molten steel into 
parts that are being used in machinery, it took them 2 years 
and $2 million. The addition to the building was a $1 million 
project. So they actually spent more in compliance costs than 
they did for the actual structure. So I hear stories about 
that, and the fact that it took 2 years, and I think, that is a 
broken process, especially on a small--we are not talking a 
Toyota facility. We are talking about a metal shed, basically.
    And then another Omaha business that has another one in 
Ohio, it is a metal fabrication business, spent a similar 
amount of time working with the Feds, the EPA again, on this 
one. Took a long time. Then, once they got all of the EPA and 
Federal permitting, and spent all the money for that, the State 
of Ohio, this plant happened to be in Ohio, they have one in 
Omaha as well, and the State came in and said, ``Yes, but our 
rules are different, and you have to do things differently.'' 
So now we have this conflict between State and Federal.
    And both of those owners told me of their extreme 
frustration, and that is the basis of trying to figure out a 
way to streamline this, to reduce the cost of permitting, 
because the guy that makes the steel parts, the first one I 
talked about, literally said, I was on the verge of just 
shutting everything down and just moving the plant to Mexico. 
That doesn't benefit anybody. So I think it is in everyone's 
best interests that we figure out a better way to streamline 
this.
    Mr. Walke, some of us are very skeptical about the EPA. And 
I had a personal issue, they had a new copper level for the 
State of Nebraska that was actually proposed to be lower than 
the natural copper levels in our water. And when I asked them 
directly, where is the science behind it? They said, well, we 
are just making assumptions due to our modeling, but I will get 
you that, meaning they didn't have it. And then, lo and behold, 
about a year later, they came up with a study that said they 
were right. I love it when they make the numbers first, and 
then back it up with the science later. It leaves me a little 
skeptical.
    And then we can get into the modeling on health, and the 
fact that they say this coal fired plant reduces mercury 
emissions, but yet there hasn't been one instance of high blood 
level of mercury in the citizens that were around that plant 
for 30 years. So sometimes we have to question, and that is our 
role.
    So, with that, one of the things that I hear from, and I am 
going to ask Mr. Weiss this, because no one has asked you a 
question since I have been here----
    Mr. Weiss. I was hoping just to stay here.
    Mr. Terry [continuing]. Very little--you seemed lonely over 
there. So part of this is that time period that we discussed, 
where there is maybe a change in the air quality standard. That 
has changed. They adapt to the new technology, or try to, but 
the guidance from the EPA seems to be non-existent, or slow. 
And I think that is probably the issue Magnolia Steel was 
caught up in, and why it took 2 years, is to get the guidance 
on how they actually comply. Do you see that as part of the 
problem here, as the guidance aspect of it, and what is the 
best way to reduce that?
    Mr. Weiss. I do. From a permitting engineer's viewpoint, 
which is what I do for a living, what I would like to know is 
what do you want me to do to make the demonstration? And right 
now, in a lot of cases, that guidance doesn't exist, and I use 
the fine particle standard as an example. I actually don't know 
how to make the demonstration that EPA wants often. And I issue 
more permits, or do a lot more permitting work than a lot of 
people, and I don't know how to do it.
    And that causes delays on two levels. One, it causes delays 
prior to even filing the application, because we have to go 
meet with permitting authorities, and try and understand what 
they want, and not all State agencies are as good as Delaware. 
They don't really know what they need, and that is a big issue, 
because you go meet, say, how do you want to do this? We don't 
know. Even when the States issue the permits, they follow EPA 
guidance. So the States need EPA guidance as much as the 
regulated community, and it doesn't exist. And I am sure that 
has caused delays, because I have projects that I am working on 
where that has caused delays prior to filing the application. 
We then file an application, and the comment is, well, that 
analysis not good enough. Well, we don't know. We will know 
when we see it. OK, and that is a problem, OK? And that is a 
real problem in the process.
    So the way I read the Act is, let us get the guidance out, 
what do you want us to do? And let us not weaken air quality 
standards. Let us get the guidance out so the permitting 
community knows what we need to get done. And that would 
improve the process.
    Mr. Whitfield. Gentleman's time has expired. At this time 
recognize Mr. Cassidy from Louisiana for 5 minutes.
    Mr. Cassidy. Thank you, Chairman Whitfield. Ladies and 
gentlemen, I apologize, I have been running up and down, so if 
I am asking you redundant questions, it is just because I have 
been running up and down. And just to give a context, the 
context we all know, clearly we have a problem with job growth 
for working class, middle class America, and they have 
traditionally been employed in mining, manufacturing, and 
construction, which shale gas and upstream/downstream creates 
an incredible number of good jobs with good benefits in mining, 
manufacturing, and construction.
    But what I am hearing is that we have met the enemy, and he 
is the EPA. Now, I gather, Mr. O'Mara, you are not sure about 
the spill, but what did I read, as I was obviously quickly 
scanning, that the EPA, in 2011, when it said it was going to 
cover greenhouse gases, forecasted it would need to issue 900 
new preconstruction permits per year, but in the 3 plus, only 
166 have been done in total. This is you, Mr. Eisenberg? How 
many jobs would--and we have all these plans that would be for 
new projected plants. Can you give an estimate of how many jobs 
would have been created, had there been 900 issued?
    Mr. Eisenberg. Frankly, I don't know that I can. You know, 
the real issue there, and I really am just curious about why 
this is happening, I did have a member that said, well, we got 
our permit pretty quickly, I don't know where we fall into 
that, and we just permitted a facility. And he went back and he 
looked, and he said, well, we figured out a way not to trigger 
PSD.
    So what could be happening is that folks are building 
smaller projects that don't trigger things at that threshold. 
Is that a good thing? I honestly don't know the answer to that 
either. I mean, I don't think it is. I think, if we have laws 
that are stopping us from going big, and from building big 
things, that is a problem too.
    Mr. Cassidy. So assuming that there is economy of scale in 
some of these projects, and we are competing globally, and I 
regularly hear that China, with their lax environmental 
standards, are building just to build, to employ people, 
putting us at a competitive disadvantage, losing that economy 
of scale might hurt our workers, correct?
    Mr. Eisenberg. That is correct.
    Mr. Cassidy. That is remarkable. And, Ms. Gershman, I 
gather that you, in turn, are aware of these projects. Again, 
do you have any estimate of how many jobs are on hold because 
of the lack of certainty and timeliness, as regards approval?
    Ms. Gershman. We have heard from some members that every 
day that the permit is not approved after that year timeline, 
they can cost up to $5 million a day. And that is because a lot 
of these facilities have already gone out, and they secured all 
of the construction folks. And they have gone out and they have 
created job creation programs for folks in the community to be 
the operators, and the pipefitters, and the electricians, and 
all of the support staff that goes into running these huge, 
complex facilities. And all of that is on hold while permits 
continue to be hammered out. And that is something that, they 
want to move forward, they are committed to it, and yet they 
can't go ahead and hire those folks until they have work for 
these folks to do.
    Mr. Cassidy. Now, what I know intuitively is that if we 
want to improve wages for folks, and we create a lot of 
competition for construction workers, their wages are going up.
    Ms. Gershman. That is correct.
    Mr. Cassidy. It is just because if you need a top-flight 
welder----
    Ms. Gershman. That is right.
    Mr. Cassidy [continuing]. She is going to be able to bid 
her services, frankly.
    Ms. Gershman. Exactly. And if there are no projects going 
forward, she will be waiting to get those services bid on.
    Mr. Cassidy. Now, Ms. Kerrigan, I sponsored a bill called 
the Energy Consumers Relief Act, which was just focused upon--
we had somebody from EPA the other day making a comment, and I 
am sure he regrets making it, that their economic projections 
are often flawed and unreliable. Well, thanks a lot, we have 
been banking on them for some time. And the whole point of my 
Consumer Relief Act was to bring transparency to these major 
rules.
    Let me just ask, knowing that others have asked it, if all 
you did was bring transparency, OK, this is what you have to go 
on what Mr. Weiss said. I say Weiss, not Weiss. I apologize if 
I--Weiss. Seymour Weiss assassinated Huey P. Long, which 
happens to be how I am so familiar with the name, as long as I 
am Mr. Louisiana. So it looks as if there is transparency. That 
in itself would allow companies to plot out. Well, we know it 
is actually not going to take a year, it will take 18 months, 
and so therefore we can do all our permitting, in light of the 
expanded timeline, something like that. Would you agree with 
that?
    Ms. Kerrigan. Yes, I do. I agree with that. And, again, if 
you have more transparency, and particularly the elements that 
are addressed in this bill, I think that will improve 
performance, in terms of expediting, you know, the permits, and 
then that creates certainty, you know, for businesses and 
investors.
    Mr. Cassidy. And jobs for working Americans.
    Ms. Kerrigan. Absolutely.
    Mr. Cassidy. Mr. Weiss, and I was just intrigued, you do 
all this work, and yet you sometimes don't really know how 
EPA's progressing?
    Mr. Weiss. Well, I don't know how EPA wants us to do the 
analysis.
    Mr. Cassidy. That blows my mind. I mean, because----
    Mr. Weiss. Mine too, so----
    Mr. Cassidy. Yes. It seems fairly straightforward that if 
you are going to say, OK, we are going to have these many 
shale, you know, related mining opportunities, or plants using 
natural gas as a feed stock, that you should be able to say in 
a spreadsheet, we give you this, we give you this, we give you 
this, and here are the variables we will define later. But I 
gather there is nothing such as that?
    Mr. Weiss. Right. Your amazement is the same as my 
clients'.
    Mr. Cassidy. So, again, when it comes to job creation for 
the working Americans, we are having the hardest time. We have 
met the enemy, and it sounds like the enemy could be the EPA. I 
yield back, and thank you.
    Mr. Whitfield. Well, you know, Mr. Cassidy has touched on 
this, Mr. Weiss touched on it, and the crux of the issue is 
that specific point. A new standard is decided on at EPA, and 
EPA has been very aggressive. And then the guidance does not 
come out for some time later, sometimes years later. And so you 
are sitting there, wondering about the modeling, wondering 
about the emissions. The guidance document is extremely 
technical, and so no one has the guidance that they need. And 
that is the crux of the issue.
    So, I mean, is it unreasonable to request EPA to come forth 
with the guidance when they come forth with the new standard, 
or is that something that is impossible to do? Would you all 
make a brief comment on that for me? I mean, what is the big 
issue about trying to do that?
    Mr. Eisenberg. I mean, that is certainly how we look at it. 
I don't see this as being unreasonable at all. We would hope 
that EPA would put it out in a timely fashion, and we would 
hope that there is a way to----
    Mr. Whitfield. I mean, that they don't do it. Do you have 
an idea, Ms. Kerrigan?
    Ms. Kerrigan. I have no idea. I mean, we would love to 
hear, and I am sure you would, from the EPA on this. It seems 
like it is something that can be done. You know, they are good 
at regulating, and, you know, this is what they----
    Mr. Whitfield. But that is what Mr. Terry and others were 
talking about. These manufacturers, or people who want to 
invest, and even the States lack the guidance and----
    Ms. Kerrigan. Um-hum.
    Mr. Whitfield [continuing]. So the uncertainty is there, 
and you are worried about the lawsuits, you are worried about 
spending the money. And, Mr. O'Mara, do you have any thoughts, 
or Mr. Walke, or----
    Mr. Walke. Well, it, unfortunately, takes a lot of time and 
resources to adopt these implementation rules and guidance, and 
you can look at the history of the program from the Reagan 
administration, and Bush. It is not a partisan issue. It is a 
matter of just the amount of time it takes.
    One thing I want to mention that hasn't been mentioned yet 
today is, much of the implementation rules and guidance that 
eventually come out from EPA don't have anything to do with 
permitting at all, so there is a little bit of a disconnect in 
the bill. The bill is written kind of overly broadly to say, if 
EPA fails to issue all, or any, implementation rules or 
guidance, we are going to allow permitting to proceed in 
violation of a newly revised standard. So there is a disconnect 
that kind of augments these unintended consequences that we 
have been talking about.
    But I think the simple answer to your question, Mr. 
Chairman, is it takes a lot of time, and involves a lot of 
consultation. There is complexity. The question is, you know, 
who bears the burden of that? Should the public suffer, you 
know, heavier polluted air, or is there another solution to a 
valid problem?
    Mr. Whitfield. Yes. Mr. O'Mara?
    Mr. O'Mara. Thank you. I mean, there are two different ways 
to look at the lack of guidance in the beginning. I mean, there 
is the way that Delaware has approached it, where we are going 
to go full steam ahead. We are not going to wait for it. We are 
going to, you know, be very clear with industry. We are going 
to, you know, consult close with the EPA, but we are not going 
to wait for them. And there are other places that, you know, 
will ask for guidance all the time, and kind of have this 
paralysis where they won't issue permits until the guidance is 
issued, and I think you have heard some of those nightmare 
stories.
    I mean, I would like to actually see some additional either 
guidance, or, use a different word, some additional direction 
to the States to move ahead. There is no reason to wait for EPA 
guidance, and safe to do that in good faith, with some kind of 
reasonableness to the adherence to the NAAQ standard should 
have some kind of sovereignty, or some kind of deference in the 
decision-making process in the interim period. I mean, a 
process like that would actually achieve air quality goals, and 
give the manufacturers at this table more certainty, and the 
State regulators that have the capacity can work with folks one 
on one, instead of decisions coming out of DC.
    Mr. Whitfield. Yes.
    Mr. O'Mara. And so maybe that is some area of potential 
commonality, because----
    Mr. Whitfield. Yes.
    Mr. O'Mara [continuing]. But you don't want States to feel 
paralyzed, where they don't feel like they can go with a 
permit, and also these other adverse impacts.
    Mr. Whitfield. Right. Mr. Weiss, do you have any comment?
    Mr. Weiss. Thank you. The process of adopting a national 
ambient air quality standard was also a long, and consultative, 
and time consuming process, and I really don't understand why 
the guidance can't be worked on simultaneously during that 
process. They know the standard is coming. In the case of fine 
particles, they knew that precursor emissions were going to be 
a big issue in the fine particle standard. And, really, we 
should have a way of analyzing precursor emissions, because 
they are a major contributor, and that all could have been 
worked on during the adoption of the ambient air quality 
standard, and one shouldn't forget that.
    Mr. Whitfield. Ms. Gershman, do you have a comment?
    Ms. Gershman. Yes. I agree with Mr. Weiss. I think really 
what we are trying to get at here is to require EPA to give a 
little more thought through the entire NAAQ setting process as 
to what happens after that NAAQ number is put out there. And we 
are just looking for some certainty as to----
    Mr. Whitfield. Yes.
    Ms. Gershman [continuing]. What happens at that point.
    Mr. Whitfield. Well, thank you. Mr. Rush, you probably----
    Mr. Rush. Mr. Chairman, the question I have is not to the 
panel, it is to you. Are you going to allow EPA to come before 
this subcommittee prior to a markup? I think that it is very 
important that the EPA be allowed to respond to some of the 
issues raised by members of this subcommittee, and some of the 
panelists. And so it is my opinion that, and the question is, 
whether or not it is unreasonable to allow the EPA to come 
before this subcommittee tomorrow, Thursday, next week, before 
we proceed to marking up this bill? The EPA needs to have an 
opportunity to respond. So is it your intention to allow the 
EPA an opportunity to come to testify before this subcommittee 
on this matter?
    Mr. Whitfield. I don't know if we are going to have another 
hearing for EPA or not, but we are in discussions with EPA. 
They have indicated that they are willing to work with 
technical assistance. And I don't even know when we are looking 
at a markup, but, you know, I personally don't want to mark up 
a bill that is not going to have some genuine support. And some 
of these suggestions about additional sovereignty for States 
and so forth, so that they have more authority, is something 
that I think has some merit, because I think all we are looking 
for is a little certainty. But we look forward to working with 
you as we move forward on it.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Whitfield. Thank you all, and that concludes today's 
hearing. I want to thank all of you for taking your time to 
come up and visit with us, and we appreciate your expertise, 
and your thoughts on this important subject. We will keep the 
record open for 10 days for any additional materials that might 
need to be administered. So that will conclude today's hearing. 
And, by the way, our staffs may be in touch with some of you 
over the next few days or weeks, as we try to see if there are 
ways we can improve this draft bill. So thank you very much. 
Hearing is adjourned.
    [Whereupon, at 12:09 p.m., the subcommittee was adjourned.]
    
    [Material submitted for inclusion in the record follows:]
    
    [GRAPHIC] [TIFF OMITTED]