[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]










A REVIEW OF EPA'S REGULATORY ACTIVITY DURING THE OBAMA ADMINISTRATION: 
                     ENERGY AND INDUSTRIAL SECTORS

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JULY 6, 2016

                               __________

                           Serial No. 114-156






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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                 Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               JERRY McNERNEY, California
JOSEPH R. PITTS, Pennsylvania        PAUL TONKO, New York
ROBERT E. LATTA, Ohio                ELIOT L. ENGEL, New York
GREGG HARPER, Mississippi            GENE GREEN, Texas
DAVID B. McKINLEY, West Virginia     LOIS CAPPS, California
MIKE POMPEO, Kansas                  MICHAEL F. DOYLE, Pennsylvania
ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         JOHN P. SARBANES, Maryland
BILL JOHNSON, Ohio                   PETER WELCH, Vermont
BILLY LONG, Missouri                 JOHN A. YARMUTH, Kentucky
RENEE L. ELLMERS, North Carolina     DAVID LOEBSACK, Iowa
BILL FLORES, Texas                   FRANK PALLONE, Jr., New Jersey (ex 
MARKWAYNE MULLIN, Oklahoma               officio)
RICHARD HUDSON, North Carolina
JOE BARTON, Texas
FRED UPTON, Michigan (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....................     2
    Prepared statement...........................................     3
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     4
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     6
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   156

                               Witnesses

Janet McCabe, Acting Assistant Administrator, Office of Air and 
  Radiation, Environmental Protection Agency.....................     7
    Prepared statement...........................................     9
    Answers to submitted questions...............................   184
Travis Kavulla, President, National Association of Regulatory 
  Utility Commissioners, on Behalf of the National Association of 
  Regulatory Commissioners.......................................    45
    Prepared statement...........................................    48
David Porter, Chairman, Railroad Commission of Texas.............    63
    Prepared statement...........................................    65
Lynn D. Helms, Director, North Dakota Industrial Commission, 
  Department of Mineral Resources................................    81
    Prepared statement...........................................    83
Robert Weissman, President, Public Citizen.......................   101
    Prepared statement...........................................   103
Charles D. McConnell, Executive Director, Energy and Environment 
  Initiative, Rice University....................................   126
    Prepared statement...........................................   128

                           Submitted Material

Letter of December 14, 2011, from Mr. Upton, et al., to Lisa 
  Jackson, Administrator, Environmental Protection Agency, 
  submitted by Mr. Griffith......................................   158
Letter of February 3, 2012, from Gina McCarthty, Assistant 
  Administrator, Environmental Protection Agency, to Mr. Upton, 
  submitted by Mr. Griffith......................................   162
Letter of May 4, 2012, from Arvin Ganesan, Associate 
  Administrator, Environmental Protection Agency, to Mr. Upton, 
  submitted by Mr. Griffith......................................   178
Slide, ``Coal-fired Power Plants Planned and Under 
  Construction,'' Platts Database, energyxxi.org, September 2015, 
  submitted by Mr. Griffith......................................   182
Analysis, ``Estimated Costs and Benefits of Proposed Cement 
  NESHAP,'' Environmental Protection Agency, submitted by Mr. 
  Griffith.......................................................   183

 
A REVIEW OF EPA'S REGULATORY ACTIVITY DURING THE OBAMA ADMINISTRATION: 
                     ENERGY AND INDUSTRIAL SECTORS

                              ----------                              


                        WEDNESDAY, JULY 6, 2016

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:02 a.m., in 
room 2322, Rayburn House Office Building, Hon. Ed Whitfield 
(chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Olson, Barton, 
Shimkus, Latta, Harper, McKinley, Kinzinger, Griffith, Johnson, 
Long, Flores, Mullin, Rush, McNerney, Tonko, Engel, Green, 
Castor, Welch, and Loebsack.
    Staff present: Will Batson, Legislative Clerk, Energy and 
Power; Mike Bloomquist, Deputy Staff Director; Allison Busbee, 
Policy Coordinator, Energy and Power; Tom Hassenboehler, Chief 
Counsel, Energy and Power; A.T. Johnston, Senior Policy 
Advisor; Ben Lieberman, Counsel, Energy and Power; Brandon 
Mooney, Professional Staff Member, Energy and Power; Mary 
Neumayr, Senior Energy Counsel; Annelise Rickert, Legislative 
Associate; Dan Schneider, Press Secretary; Peter Spencer, 
Professional Staff Member, Oversight; Jean Fruci, Democratic 
Energy and Environment Policy Advisor; Caitlin Haberman, 
Democratic Professional Staff Member; Rick Kessler, Democratic 
Senior Advisor and Staff Director, Energy and Environment; John 
Marshall, Democratic Policy Coordinator; and Alexander Ratner, 
Democratic Policy Analyst.
    Mr. Whitfield. I'd like to call the hearing to order this 
morning, and today's hearing is a review of EPA's regulatory 
activity during the Obama administration in the energy/
industrial sector.
    We'll have two panels of witnesses this morning. The first 
one, of course, is Ms. McCabe, who is a frequent visitor to the 
committee, and we welcome you again this morning, Ms. McCabe.
    And then on our second panel I'll introduce each of those 
witnesses when it comes time for them to give their opening 
statement.
    At this time, I would like to recognize myself for 5 
minutes for an opening statement.

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

    During the almost 6 years that I have been chairman of this 
subcommittee, we've had 40 hearings that have looked at various 
EPA rules and proposals that affect or will affect the Nation's 
energy and industrial sectors.
    These are the critical sectors for ensuring our Nation's 
economic productivity and prosperity. The costs and burdens of 
EPA's unrelenting rulemaking upon these sectors have been a 
constant concern.
    We've seen the impact of these rules in scores of shuttered 
coal-fired plants, the delayed and canceled projects, and the 
destruction of thousands of jobs in communities dependent upon 
this abundant energy resource.
    But the impact of compliance costs is only part of the 
story. Our hearing record, which reflects testimony from 
Federal officials, State energy and environmental regulatory, 
legal experts and economists, shows EPA's controversial and 
extreme interpretations of its statutory authorities to 
transform its role from that of environmental regulator to that 
of the Nation's ultimate energy regulator.
    In fact, on the climate change issues, the philosophy seems 
to be that the end justifies the means, whether or not laws are 
violated or not.
    We see this first hand in the EPA's implementation of the 
administration's climate change agenda, which is reflected in 
what is already more than 100 greenhouse gas-related rules.
    EPA's pursuit of greenhouse gas standards for the power 
sector is a case in point. The Agency's new interpretation of 
its authorities have led to a new source standard that 
effectively prohibits the construction of power plants in the 
United States that use the most advanced commercially proven 
clean coal technologies, the kind being built today in Japan 
and around the world.
    In fact, Mr. Shimkus, Mr. Olson and I were in a plant in 
Japan last week. Zero NOx emission, zero SOx emission, 
operating, burning 3 million tons a year, cannot be built in 
America.
    The prospect of this kind of regulation combined with 
utility MACT and related rules has undermined the 
diversification of our Nation's future energy supply. The 
Agency's assertion of new authorities to set energy policy is 
even more troubling with EPA's existing source rule.
    The so-called Clean Power Plan would effectively place EPA 
in the driver's seat over the States and the Federal Energy 
Regulatory Commission in transforming how electricity is 
generated, transmitted and consumed in the United States, an 
influence over State electricity systems never contemplated by 
Congress when it adopted the Clean Air Act.
    And given EPA's preferred reading of its authorities, there 
is only increased influence over energy policy to come. EPA is 
already setting greenhouse gas standards for new and existing 
oil and natural gas production.
    We have to ask what will be the next EPA interpretation of 
its authority. The administration and EPA's Administrator admit 
the goal is to reduce massively the use of fossil fuels. That's 
the goal.
    But that is not the purpose of the Clean Air Act. Congress 
did not write the Clean Air Act to be the vehicle for taking 
command of State energy planning, the efficient and economical 
dispatch of electricity or the production of oil and gas.
    Congress did not write the Clean Air Act to provide EPA 
with the ability to create new regulatory powers and 
authorities so it can transform the Nation's energy system.
    Yet, this is exactly what the Agency is doing. And I might 
add that Congress also rejected the idea of cap-and-trade once, 
yet EPA is pushing a back door cap-and-trade policy without 
congressional approval.
    Under the Clean Power Plan, EPA has interpreted the Clean 
Air Act to give itself the power to plan the resource mix of 
the U.S. power sector.
    EPA has created a de facto fuel and renewable energy 
standard for America. EPA and the administration are emerged 
and engaged in blatant favoritism.
    For example, nuclear power plants receive no credit for 
their continued contribution to carbon emission abatement and 
wind energy by the Interior Department has been given a blanket 
exemption from the Federal Migratory Bird Act and the Eagle 
Protection Act.
    And remember, BP was fined $100 million under the Migratory 
Bird Act for the birds that were killed during the Gulf oil 
spill. So this administration is engaged in favoritism as it 
pursues its carbon future for America.
    I look forward to the testimony of our witnesses today. I 
would remind everyone that 27 States filed a lawsuit against 
the Clean Power Plan, and the Supreme Court issued a stay.
    And don't forget Larry Tribe, when he testified before this 
committee, the constitutional lawyer from Harvard, said the 
Clean Power Plan was like picking up the Constitution and 
tearing it up.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared statement of Hon. Ed Whitfield

    When the Obama administration took office in early 2009, 
Americans were struggling with the worst economic recession in 
a generation.
    There is no question that today many Americans continue to 
struggle to make ends meet. And there's no question that during 
this time period, EPA has continued to promulgate thousands of 
pages of new regulatory requirements each year, with a number 
of major rules imposing annual compliance costs measured in the 
billions of dollars.
    Current estimates put the total EPA's regulatory compliance 
burdens, based on the Agency's own numbers, at more than $380 
billion per year, or 2.1 percent of U.S. GDP. Heritage 
Foundation researchers added up EPA's own estimates and 
determined that annual costs to comply with EPA rules have 
grown by more than $50 billion since 2009.
    During my chairmanship, we have held 40 hearings that have 
looked at various EPA rules and proposals that affect--or will 
affect--the Nation's energy and industrial sectors. These are 
the critical sectors for ensuring our Nation's economic 
productivity and prosperity. The costs and burdens of EPA's 
unrelenting rulemaking upon these sectors have been a constant 
concern. We have seen the impacts of these rules in scores of 
shuttered coal power plants, the delayed and cancelled 
projects, and the destruction of thousands of jobs in 
communities dependent upon this abundant energy resource.
    But the impact of compliance costs is only part of the 
story.
    Our hearing record--which reflects testimony from Federal 
officials, State energy and environmental regulators, legal 
experts, and economists--shows EPA's highly controversial and 
continuously evolving interpretations of its statutory 
authorities to transform its role from that of a traditional 
environmental regulator to that of the Nation's ultimate energy 
regulator.
    We see this firsthand in the EPA's implementation of the 
administration's climate change agenda, which is reflected in 
what is already more than 100 greenhouse gas related rules. 
EPA's pursuit of greenhouse gas standards for the power sector 
is a case in point.
    The Agency's new interpretation of its authorities have led 
to new source standards that effectively prohibit the 
construction of power plants in the United States that use the 
most advanced, commercially proven clean coal technologies--the 
kind being built today in Japan and around the world. The 
prospect of this regulation, combined with Utility MACT and 
related rules, has undermined the diversification of our 
Nation's future energy supply.
    The Agency's assertion of new authorities to set energy 
policy is even more troubling with EPA's existing source rules. 
The so-called Clean Power Plan would effectively place the EPA 
in the driver seat over the States and the Federal Energy 
Regulatory Commission in transforming how electricity is 
generated, transmitted, and consumed in the United States--an 
influence over State electricity systems never contemplated by 
Congress in the Clean Air Act.
    And given EPA's preferred reading of its authorities, there 
is only increased influence over energy policy to come. EPA is 
already setting greenhouse gas standards for new and existing 
oil and natural gas production. We have to ask, what will be 
next under EPA's interpretation of its authorities?
    The administration and EPA's Administrator admit the goal 
is to reduce massively the use of fossil fuels--but that is not 
the purpose of the Clean Air Act. Congress did not write the 
Clean Air Act to be the vehicle for taking command of State 
energy planning, the efficient and economical dispatch of 
electricity, or the production of oil and gas.
    Congress did not write the Clean Air Act to provide EPA 
with the ability to create new regulatory powers and 
authorities so it can ``transform'' the Nation's energy system. 
Yet, this Agency is pursuing these actions.
    And I might add that Congress rejected the idea of cap-and-
trade once, yet this EPA is pursuing a back door cap-and-trade 
policy without Congressional approval.
    Fortunately, the Courts have checked EPA's overreach in 
several recent decisions. The numerous legal infirmities of the 
Clean Power Plan have led to an unprecedented stay of those 
power sector rules by the Supreme Court, pending completion of 
judicial review.
    This morning, we have two panels to discuss the regulatory 
issues and their practical impacts on States and the energy and 
industrial sectors. I'm pleased to welcome back Acting 
Assistant Administrator Janet McCabe, who will testify on EPA's 
regulatory activity during this administration.
    And I particularly look forward to our second panel, which 
will provide us the real world experience with the Agency's 
rules on State energy and environmental regulation.
    Ultimately, it will be up to Congress to ensure EPA stays 
in its statutory lane for environmental standard setting. It 
will also be up to Congress to take a holistic look at the 
statutes that govern our energy and electricity markets, and 
energy policy--to ensure our laws enable a growing, productive 
economy.
    The hearing today will help further develop the record 
necessary to do this.

    Mr. Whitfield. With that, at this time I'd like to 
recognize the gentleman from Chicago, Mr. Rush, for his 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, as the EPA under the Obama administration 
prepares the legally mandated regulations to protect the air, 
protect the land, and protect the water for all Americans, the 
majority party has insisted on digging its heels and fighting 
these rules at every turn.
    Unfortunately, Mr. Chairman, it is impossible to address 
the most pressing issues associated with climate change if we 
simply follow the example of the Republican Party of putting 
our collective heads deep, deep, deep in the sand and kicking 
this serious problem down the proverbial road for the next 
generation to tackle.
    Mr. Chairman, all one has to do is to look at any number of 
articles that are written daily over the past 5 years alone to 
read about a thousand-year flood, read about the floods that 
wiping out parts of South Carolina and West Virginia even as we 
speak.
    Mr. Chairman, pick up a daily newspaper, any daily 
newspaper from anywhere around the country at any time over the 
last year or 2, and you can read about the 100-year-old-
drought-driven areas in the West.
    Mr. Chairman, in fact it seems almost annually that we are 
witnessing drought-fueled wildfires incinerate millions of 
acres of forest at a record pace from Alaska to California, 
claiming the lives of firefighters, innocent people, destroying 
lives and devastating livelihoods.
    Mr. Chairman, we understand that the Republican Party has 
never met a regulation that it did not want to kill. We get it. 
We get it, Mr. Chairman.
    However, at some point, the majority party needs to stop 
simply trying to obstruct and follow the lead of President 
Obama, follow the lead of my allies around the world and indeed 
pretty much every other nation on this planet and heed the 
warning put forth by all of the world's scientists and Mother 
Earth, Mother Nature herself.
    Mr. Chairman, it is not simply enough to rail against the 
EPA for establishing regulations protecting our most sacred 
natural resources of air, water, just because these rules are 
perceived to hurt the profit margin of certain industries.
    Mr. Chairman, this is the United States of America and not 
the United States of Avarice. Mr. Chairman, there are other 
worthwhile benefits to society besides how much money a 
corporation earns in a single quarter.
    In fact, Mr. Chairman, the Clean Air Act and the rules 
associated with it has been one of the most socially, 
environmentally and economically beneficial laws ever enacted 
by this Congress by anybody's standard, rather, period.
    Time and time again, we've heard from our colleagues on the 
other side of the aisle that the EPA has overstepped its 
authority and is promulgating regulations that would hurt 
industry, kill jobs and bring about the downfall of the 
American way of life as we know it.
    We've heard it time and time again. It's an old record. 
It's tired. That dog simply does not hunt anymore, Mr. 
Chairman. And yet, the benefits of the Clean Air Act programs 
have consistently outweighed the costs that we have been warned 
against at each and every time.
    Mr. Chairman, you know as well as I, in a recent report to 
the Congress, the Office of Management and Budget found that in 
the average the 32 major rules promulgated by the EPA between 
2004 and 2014 had benefits between $160 billion and $788 
billion compared to costs of just $38 billion to $45 billion. 
By 2020, Mr. Chairman, the economic benefit of reducing air 
pollution is estimated at almost $2 trillion, exceeding in cost 
by a 30 to 1 ratio.
    So Mr. Chairman, my friend, instead of always crying wolf 
over the EPA rules, I would urge the majority party to work 
with those of us who want to address one of the world's most 
pressing challenges and help find new strategies to address the 
issue of climate change that impacts every man, woman and child 
in this country and around the world--those who are born and 
those who are yet to be born. With that, Mr. Chairman, I yield 
back the balance of my time.
    Mr. Whitfield. The gentleman had no time left but you'll 
get a statement. But Mr. Upton is not going to be with us this 
morning. He's chairing another conference. And is there anyone 
on our side of the aisle that would like to make some comments? 
Mr. Shimkus, recognized for 5 minutes.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. And Mr. Chairman, just to welcome our guests. 
Also kind of raise the point that you raised that we did visit 
a supercritical clean power plant in Japan, the Isogo Thermal 
Power Station, and I think the takeaway from many of us was 
that when we talked to other countries that are involved in 
this debate they really create and incentivize and give 
emissions credits for more efficiencies and lowering 
CO2.
    I think our problem is is that we don't if there was a net 
benefit because of new technology and incentives. Our pathway 
still is using technology that's not available. There is 
technology that will make power plants more efficient.
    This is a 1,200-megawatt two unit system and they broadly 
boast about the reduction in carbon emissions and they use that 
in their calculations and we don't see that coming from the 
administration.
    And to my colleague and friend, Mr. Rush, all our question 
is where does the executive branch get its authority and we 
don't think the legislative branch should excuse the executive 
branch for any reason for illegally breaking the law by 
promulgating rules and regulations that are not founded in 
statutory authority.
    That's part of our debate here today too. So we do welcome 
you. It will be an interesting hearing and I thank you and I 
yield.
    Mr. Whitfield. Will the gentleman yield?
    Mr. Shimkus. I will yield.
    Mr. Whitfield. I might just point out I read this in one of 
the opening statements of one of our witnesses: Former Energy 
Secretary Steven Chu even criticized the Clean Power Plan this 
past month, arguing we should make a Clean Power Plan that's 
based on clean energy, not renewable energy. So even our former 
Secretary of Energy made that comment about the Clean Power 
Plan.
    Mr. Shimkus. I yield back my time.
    Mr. Whitfield. Gentleman yields back. At this time, is 
there anyone on--I see Mr. Pallone is not here. Do any of you 
all want to make any opening statements at this time?
    OK. OK, that concludes the opening statements and we've 
already introduced Janet McCabe, who's the Acting Assistant 
Administrator of the Office of Air and Radiation, U.S. 
Environmental Protection Agency, a native of Indiana, and Ms. 
McCabe, we appreciate your being with us today and you're 
recognized for 5 minutes for your opening statement, and then 
I'm sure there will be a few questions for you.
    So thanks for being with us. You know the drill. The 
microphone, red light, and all that. So thank you.

  STATEMENT OF JANET McCABE, ACTING ASSISTANT ADMINISTRATOR, 
  OFFICE OF AIR AND RADIATION, ENVIRONMENTAL PROTECTION AGENCY

    Ms. McCabe. Thank you, Chairman Whitfield and Ranking 
Member Rush, who had to step away and all the members of the 
subcommittee. Thank you so much for inviting me here to testify 
today on EPA's regulatory efforts under the Clean Air Act.
    The mission of EPA is to protect public health and the 
environment and the Agency's regulatory efforts further those 
goals. We are guided in meeting those goals by science and by 
the law, which serve as the backbone for each of the Agency's 
actions.
    For over four decades we have cut air pollution in this 
country by 70 percent and the economy has more than tripled. I 
will focus my opening statement on providing more detail for 
three rules, which will provide tremendous benefits to public 
health and the environment and they've mostly been mentioned 
already this morning--the Clean Power Plan, the methane 
standards for the oil and gas industry and the ozone national 
ambient air quality standards. Climate change is a tremendous 
environmental and public health challenge. The most vulnerable 
among us including children, older adults, people with heart or 
lung disease and people living in poverty may be most at risk 
from the impacts of climate change.
    Fossil fuel-fired power plants are by far the largest 
stationary source of U.S. CO2 emissions. Using 
authority under the Clean Air Act to address these emissions, 
the EPA finalized the Clean Power Plan last August.
    Although the Clean Power Plan has been stayed by the 
Supreme Court, we are confident that it will be upheld because 
it rests on strong scientific and legal foundations.
    Since the stay was issued, many States have been moving 
forward voluntarily to cut carbon pollution from power plants. 
They have also asked EPA to continue our outreach and 
development of supporting information and tools that will help 
guide States when the Clean Power Plan becomes effective which 
we're doing while ensuring that we fully comply with the stay. 
For example, we recently proposed design details for the 
optional Clean Energy Incentive Program to address State 
requests for additional clarification as States consider their 
options to reduce carbon pollution.
    In May, EPA announced steps to further reduce methane and 
other harmful air pollutants from new and modified sources in 
the oil and gas industry along with the critical first step in 
tackling methane emissions from existing sources.
    These steps will help combat climate change and reduce 
emissions of other harmful air pollutants. These standards 
build on the Agency's 2012 rules by adding requirements that 
the industry reduce emissions of greenhouse gases using readily 
available and cost effective technology and by covering 
hydraulically fractured oil wells along with additional 
equipment and activities that were not covered in the 2012 
rules.
    They also required owners and operators to find and repair 
leaks, which can be a significant source of emissions. These 
final standards reflect significant stakeholder input and in 
particular provide companies a pathway to demonstrate that 
requirements under a State rule are comparable to requirements 
in the final rule.
    This would allow sources to comply with a specific final 
rule requirement by complying with a State regulation. We know 
that existing sources in the oil and gas sector also emit 
substantial amounts of methane and as a first step in the 
regulation of these sources we've issued a proposed information 
collection request, or ICR.
    When finalized, it will require companies with existing 
operations to provide information on technologies and costs 
that are critical to the development of reasonable regulations. 
In addition, EPA plans to seek voluntary information on 
innovative strategies that can accurately and cost effectively 
locate, measure and mitigate methane emissions.
    The draft ICR was published early in June and the first of 
two public comment periods will last for 60 days. Finally, in 
October of last year, the Agency completed the periodic review 
of the national ambient air quality standards, or NAAQS, for 
ground level ozone.
    We have a primary standard directed at protecting public 
health and a secondary standard directed at protecting public 
welfare, for example, trees, plants and ecosystems.
    Exposure to ground level ozone can harm the respiratory 
system, aggravate asthma and lung diseases and is linked to 
premature death. These health impacts impose significant costs 
on Americans and can adversely affect their daily lives through 
missed school and work.
    The Clean Air Act requires EPA to review the NAAQS every 5 
years to make sure the standards continue to protect public 
health with an adequate margin of safety.
    Based on the law, a thorough review of the science, the 
recommendations of the Agency's independent science advisors, 
assessment of EPA experts and after extensive public engagement 
and opportunity to review and comment at many steps along the 
way, the Administrator determined that the appropriate level to 
protect the public health with an adequate margin of safety was 
70 parts per billion.
    The two-step process of a science-based NAAQS review 
followed by implementation is a system that works. EPA and 
State, local and tribal co-regulators share a long history of 
successfully managing and improving air quality.
    For ozone, existing and proposed Federal measures like 
vehicle standards and power plant rules are reducing and will 
continue to further reduce ozone pollution nationwide.
    We expect that the vast majority of counties outside of 
California will meet the 2015 ozone NAAQS by 2025 without 
having to take any additional action beyond those Federal 
measures.
    Again, I thank the subcommittee for inviting me here today 
and I look forward to your questions and the discussion on 
these and other EPA actions.
    [The prepared statement of Ms. McCabe follows:]
    
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    Mr. Whitfield. Ms. McCabe, thank you very much for your 
opening statement and I'll recognize myself for 5 minutes of 
questions.
    When the Clean Power Plan was being discussed, one of the 
comments that was frequently made by any representative of EPA 
was that we were providing maximum flexibility to the States.
    And yet, the reality is that in your so-called building 
blocks where States can go to natural gas or they can go to 
renewable energy they simply don't have that option. It's 
simply not there to the extent necessary.
    So many critics say that that flexibility argument--we're 
giving maximum flexibility to the State--is really a red 
herring, that there is no flexibility for those States that 
have that unique problem facing them.
    I mean, do you agree with that or do you just feel like oh, 
if you work hard enough you can--I mean, you all arbitrarily 
set the CO2 standard for every State. So this 
flexibility argument you honestly believe that these States 
have the flexibility to meet this requirement?
    Ms. McCabe. I do, Mr. Chairman, and I can explain why.
    First of all, I think it's important for me to say that the 
goal for each State was in fact not arbitrarily set. It was set 
after very careful evaluation of----
    Mr. Whitfield. Who set it?
    Ms. McCabe. The EPA rulemaking sector.
    Mr. Whitfield. Yes, EPA set it.
    Ms. McCabe. But not arbitrarily. It was based on 
information and data collected from the industry from States.
    Mr. Whitfield. Well, some States would disagree with that. 
I've talked to many of them, and they view--even though you 
went through a process, that you set the standard.
    Ms. McCabe. Well, there's a difference between who set the 
standard and whether it was set arbitrarily. I was taking issue 
with the use of the word arbitrary, and the record lays out--
people can disagree and certainly do disagree that we made the 
right choice or that we evaluated the data appropriately.
    Mr. Whitfield. Why do you think the Supreme Court issued a 
stay of the Clean Power Plan?
    Ms. McCabe. Because this is a very important issue, and 
they felt that as courts have done before----
    Mr. Whitfield. So you don't feel like that they had any 
questions on the legality of it, that they simply stated 
because it was such an important issue?
    Ms. McCabe. They gave no indication of their reasoning. No 
court has spoken to the substance----
    Mr. Whitfield. But your interpretation is it was so 
important that they stayed it?
    Ms. McCabe. That's how I understand it. This is----
    Mr. Whitfield. That's your understanding.
    Ms. McCabe [continuing]. Courts sometimes do stay 
regulations while they're going through review.
    Mr. Whitfield. Uh-huh. Now, let me ask you this question. 
Despite the stay of the Clean Power Plan, last week EPA 
published a 44-page proposed rule setting forth the details for 
Clean Energy Incentive Program and requesting comments by 
August 29th, 2016.
    The purpose of the program is to incentivize early action 
by States to comply with the Clean Power Plan. Now, if a State 
or affected stakeholder does not comment on this proposed rule 
during the public comment period, will they have foregone their 
right to comment on the rule?
    Ms. McCabe. This is a completely voluntary program, and 
people are welcome to comment on it during the comment period.
    Mr. Whitfield. Well, the rule is not final yet, is it? Or 
is the rule final yet? OK.
    Ms. McCabe. No, it isn't. It's proposed.
    Mr. Whitfield. But you're saying that it's not going to be 
mandatory? It's going to be voluntary?
    Ms. McCabe. Absolutely not mandatory. It's an early action 
opportunity that's provided in the Clean Power Plan. It's not--
--
    Mr. Whitfield. Will there be a final rule?
    Ms. McCabe. If the Agency finalizes it, it will----
    Mr. Whitfield. And does the EPA plan to finalize the rule 
before the end of this administration?
    Ms. McCabe. I can't speak to the schedule. But I expect 
that the Agency will move to finalize the rule.
    Mr. Whitfield. Now, if the EPA does finalize this rule, how 
would this comport with the stay?
    Ms. McCabe. We believe that this is not--taking this action 
is not inconsistent with the stay, and this may come up again 
this morning. We consult regularly with our lawyers at the 
Department of Justice.
    The stay precludes EPA from implementing the Clean Power 
Plan. EPA is doing nothing to implement the Clean Power Plan.
    Mr. Whitfield. Now, do you think there is universal 
agreement to what you just said, or do you think there are 
opposing views to what you just said?
    Ms. McCabe. I wouldn't want to speak for other people. 
There are usually a variety of views on everything that EPA 
does.
    Mr. Whitfield. So that's EPA's view, right?
    Ms. McCabe. It's the EPA's view. It's the Department of 
Justice's view, and we are being very, very careful about this, 
Mr. Chairman.
    Mr. Whitfield. OK. Because I remember you all making very 
strong comments that you had every faith and confidence that a 
stay would not be issued by the Supreme Court.
    Ms. McCabe. We did believe that to be true. I think many 
people believed that to be true.
    Mr. Whitfield. Well, a lot of us did not believe that to be 
true. Anyway, thank you very much, and my time is expired. I 
recognized the gentleman from Illinois, Mr. Rush, for 5 
minutes.
    Mr. Rush. Ms. McCabe, I really appreciate you coming before 
the subcommittee for the umpteenth time to deal with this 
issue, and if one didn't know any better they might think that 
the majority party really, really, really has it out for your 
agency.
    And you're aware the premise of today's hearing is that EPA 
has repeatedly overstepped its authority and is really nearly 
issuing burdensome new rules that will kill jobs and send the 
American economy down the tank.
    You've heard these claims many times before the Republican 
Party cried wolf when it comes to actual cost and benefits 
attributed to Clean Air Act rules and other regulations issued 
by your agency.
    We all understand that facts are not always the driving 
force behind many of these claims, and as a matter of fact it 
seems as though facts are standing in the way of a lot of these 
claims. But they keep coming anyway. I would like for you at 
some point in time during my questions to really focus on 
separating the, for this subcommittee, some of the truth of the 
ever present fiction that's in the room.
    In my opening statement, I stated there were societal 
benefits associated with EPA rules. They go far beyond the 
quarterly earnings of certain industries.
    Can you state some of the additional benefits to the EPA's 
regulatory framework that impacts all Americans?
    Ms. McCabe. Yes, sir. Thank you for the question.
    It's clear that air pollution has significant impacts on 
public health across this country. That includes increased risk 
of asthma attacks, other respiratory illnesses, premature 
death, other sorts of health impacts that mean missed work 
days, missed school days for children and parents need to stay 
home.
    These are real everyday issues that families across the 
country have to deal with. When it comes to climate we know 
that climate is changing, we know that that is having impacts 
that is being reflected in increased wildfires, increased 
droughts, increased flooding, increased violent storms, some of 
the things that you mentioned yourself, Congressman Rush.
    These are having real impacts on people, on their health, 
on their economic well-being and their ability to live their 
lives in this country.
    Mr. Rush. Well, besides the health status of Americans and 
I've noticed for the last 25 years I've seen--I know more and 
more people, more and more families who are victimized by 
asthma over the last 25 or so years.
    So the health issues are really, really troubling and a 
critical stage for our Nation. But what are some of the 
economic benefits associated with the EPA rules, particularly 
in areas of spurring new technology and innovations in 
transportation and electricity and in manufacturing sectors?
    Ms. McCabe. Yes. That's absolutely been the case. The rules 
over the years have spurred the creation and invention of 
pollution control technology which not only employs people here 
in the United States installing and designing that but is an 
exported product that the United States exports around the 
world, which brings, again, value back to the United States.
    Mr. Rush. So from a perspective of the health benefits to 
the Nation and the economic benefits to the Nation, you made an 
overall assessment of the work that the EPA has done in the 
past. Let's just take from the past to the present.
    Ms. McCabe. Well, each time EPA does a rule of economic 
significance we follow OMB requirements and do a cost benefit 
analysis, and as you alluded to in your opening remarks the net 
benefits of the EPA rules have numbered in the billions of 
dollars over time, far outweighing the costs of each one of 
those rules.
    Mr. Rush. Mr. Chairman, I want to thank you for your 
kindness and I yield back.
    Mr. Whitfield. Gentleman yields back. Thank you.
    At this time. I'd like to recognize the gentleman from 
Texas, Mr. Olson, for 5 minutes.
    Mr. Olson. I thank the Chair.
    I thank you, Ms. McCabe, for joining us again today. Hope 
you had a happy 4th of July.
    We sometimes disagree, sometimes strongly. But the folks 
back in Texas 22 appreciate your willingness to come before 
this committee.
    My first question concerns your budget documents. You 
stressed that the Clean Power Plan goes far beyond traditional 
end of the pipe regulation.
    In your fiscal year 2016 submittal to Congress you stated, 
and I quote, ``the breadth and uniqueness of the Clean Power 
Plan rulemakings will require that the Agency devotes 
significant resources to its implementation.
    Traditionally, the EPA's regulatory analysis would focus on 
only emitting sources and end of pipe controls. The existing 
power plant rule requires that the EPA look at the emission 
control strategies that are either shifting generation away 
from higher emitting plants or reducing the need for generation 
in the first place,'' end quote.
    That sounds to me like you all wrote the law. As you know, 
only Congress writes the law. Article one, section one is very 
clear. All legislative powers herein granted shall be invested 
in a Congress of the United States which shall consist of a 
Senate and a House of Representatives.
    Where in the Constitution or statute has Congress 
authorized EPA to go from end of pipe controls to generation 
shifting? Where is this in this document? Please tell me?
    Ms. McCabe. It's actually--Congressman, it's in Section 
111(d) of the Clean Air Act, which is where our authority comes 
from. The--that section directs us to look at the approaches 
and controls that industry uses in order to develop our 
regulations that set reasonable standard for sources under 
111(d).
    It is not misdirected to end of pipe controls and we made--
have studied the ways that the utility industry has found ways 
to reduce not just carbon but other air pollutants over the 
years. And so our rule was grounded very much in the types of 
approaches that that very industry has been using.
    Mr. Olson. But that's a big change. End of pipe to all 
these other things, that's Congress' job. That's our job. 
That's lawmaking. One further question about the rule of law. 
Do you believe the EPA has the authority to compel the future 
generation shifting from natural gas to renewables--not coal 
but natural gas to renewables? Do you have that authority? The 
same authority you're using now?
    Ms. McCabe. Our job is to develop rules that reduce air 
pollution. That's our job under the Clean Air Act, setting 
technology-based standards following the direction that 
Congress gave us in Section 111(d).
    We are not requiring any particular fuel to be used. We are 
providing broad opportunities for the industry to use the kinds 
of approaches that they use and would choose to use.
    Mr. Olson. Well, you're banning one source of power from 
being used--coal--for sure. I mean, you say you're not choosing 
that, but you are, ma'am. The real world says you are choosing 
power sources. You are picking winners and losers.
    My second question is about the technological advancements 
that have allowed our country to emerge as the number-one 
producer in the world of oil. In fact, a study came out from 
Norway this past week.
    A 3-year analysis confirmed that by 2020 America will have 
264 billion barrels of recoverable oil compared to 256 billion 
barrels with Russia and 212 billion barrels with Saudi Arabia. 
We are number one, man.
    America is number one again. My own State of Texas has been 
at the front of this revolution even with today's energy prices 
and that's why I am stunned to see concerns coming from the 
largest and most efficient oil and gas regulators in America, 
the people in Texas, the railroad commission when it comes 
before your agency.
    Is it correct that EPA's new regulations will cause natural 
gas and crude oil production levels to decline? Yes or no?
    Ms. McCabe. I don't believe it will, sir.
    Mr. Olson. Well, ma'am, according to your economic impacts 
discussed in your final rule on Page 35,886, it says it does 
just that. A follow-up question--is it correct that EPA's new 
methane regulations will make the U.S. more reliant on foreign 
energy imports? Yes or no.
    Ms. McCabe. I don't believe that that's correct, sir.
    Mr. Olson. Same thing. Page 35,886. Your final rule says it 
will. I yield back.
    Mr. Whitfield. Gentleman yields back. At this time I 
recognize the gentleman from California, Mr. McNerney, for 5 
minutes.
    Mr. McNerney. I thank the chairman and I also submit with 
due respect that this is really a political hearing. Ms. 
McCabe, I'm going to ask some questions about exceptional 
events.
    How often have public entities filed for exceptional events 
at the EPA?
    Ms. McCabe. I don't have an exact number, Congressman, but 
I would be happy to get you one. It's been a number of times.
    Mr. McNerney. OK. And how often are those approved, those 
exceptional event requests?
    Ms. McCabe. We've approved a number of them, and some of 
them we have not.
    Mr. McNerney. OK. Moving on--there's been talk in this 
committee about exceptional events. My office has talked to 
yours about exceptional events. Is the EPA working on anything 
that would modify exceptional events to take place during 
prolonged droughts and how much can be done on the regulatory 
side.
    So, basically, I'm asking are exceptional droughts going to 
be considered for exceptional events in the future?
    Ms. McCabe. Yes, this is a very challenging situation, 
Congressman, especially as we see more and more drought coming. 
So drought in itself is not considered an exceptional event.
    We are working with the States and with all stakeholders to 
try to find ways to make sure that we make this process as 
reasonable as possible and reflect that there can be situations 
in which there are high dust events that may be able to be 
considered exceptional events.
    Mr. McNerney. Well, that's good because as you know we're 
having a prolonged drought in the valley in California and it's 
making a very challenging situation for our districts.
    Technological advancements on the electrical grid from 
transmission through end use have helped improve efficiency and 
reduced emissions. Many utilities have embraced the Clean Power 
Plan, including those in my own home State of California.
    Can you talk about the Clean Energy Incentive Program and 
how it will help further promote innovative technologies?
    Ms. McCabe. Sure. One of the--one of the strengths that we 
feel of the Clean Power Plan is the openness that States have 
to bring in a use energy efficiency as a way to reduce their 
carbon emissions and there's many, many programs across the 
country many of which have been spawned and encouraged at the 
State and local level that are being very effective in bringing 
not only emissions down but also bringing value to the 
communities in which those technologies are installed.
    Some of these are industrial applications, commercial 
applications and residential applications and we think that 
both through the Clean Energy Incentive Program, which is our 
voluntary early action program, but also throughout the life of 
the Clean Power Plan there--because those types of approaches 
are often very cost effective to implement that States will 
want to choose to invest in those.
    Mr. McNerney. So we're talking about creating jobs through 
developing new technologies?
    Ms. McCabe. Absolutely, and then implementing those 
technologies in our communities.
    Mr. McNerney. Now, I personally believe that implementing 
the Clean Power Plan will not result in a much higher--any 
electricity prices and I see a parallel between this and the 
sulfur dioxide emissions through the cap-and-trade program. Is 
that your thinking as well?
    Ms. McCabe. Well, we looked at that in our regular impact 
analysis and we predicted that in part because of the increased 
use of energy efficiency approaches that electric bills will 
actually go down in 2030 when the program is fully implemented.
    Mr. McNerney. So some of the statements we're hearing might 
actually scare consumers but in reality we expect lower or even 
electricity prices?
    Ms. McCabe. That's what our analysis showed.
    Mr. McNerney. You mentioned a proposed innovative 
collection request--information collection request for oil and 
gas industry related to methane emissions. How difficult is it 
to locate, measure and mitigate methane emissions?
    Ms. McCabe. This is an area of very rapid development the 
industry is working very hard on it and there are many others 
in the research fields as well as at EPA that are working on 
these issues and across the Federal Government. So that's why 
we're going to put out a call for innovative ideas.
    There are great advances in how people can detect emissions 
and it's important to remember that any leak of this material 
is leak of a product that can be sold. It's not just a loss of 
a natural resource. It's actually a valuable product.
    So the industry itself has great incentive to find these 
leaks and fix them. And so detecting leaks and then also on the 
mitigation side.
    Mr. McNerney. Does the EPA currently have any data on that, 
on collection emissions or detecting emissions?
    Ms. McCabe. We do. We do that through our greenhouse gas 
emissions inventory program. Every year we collect information. 
Every year people are finding ways to be more accurate and more 
complete in that information.
    Mr. McNerney. Are emissions, or capturing fugitive 
emissions, is that improving?
    Ms. McCabe. Yes, it is and will continue to, for sure.
    Mr. McNerney. All right. Thank you, Mr. Chairman.
    Mr. Whitfield. The gentleman's time has expired. At this 
time I'll recognize the gentleman from Texas, Mr. Barton, for 5 
minutes.
    Mr. Barton. Thank you, Mr. Chairman.
    Would you define just as concisely as you can what you 
think the mission statement of the EPA is?
    Ms. McCabe. To protect the health and the environment, 
implementing the laws that Congress has passed.
    Mr. Barton. Say that again.
    Ms. McCabe. To protect public health and the environment, 
implementing the laws that Congress has passed.
    Mr. Barton. OK. I'll accept that.
    Do you know how many pages of rules the EPA has issued 
since 2009 to try to be generous to do what you just said?
    Ms. McCabe. I don't know the number of pages, Congressman.
    Mr. Barton. If I were to tell you that according to the 
majority staff it was 33,841 would you accept that?
    Ms. McCabe. I would not disagree with you. I don't have any 
reason to know what the number is.
    Mr. Barton. OK. Well, that's what the majority staff memo 
says: 3,924 rules encompassing 33,841 pages.
    Now, some of the major rules, and again, this is according 
to the majority staff so you can dispute this, the Clean Power 
Plan, the carbon pollution standard for power plants, mercury 
and air toxic standards for power plants, cross-State air 
pollution rules for power plants, coal ash rule for power 
plants, effluent guidelines for power plants, which would be--
which would be water, wouldn't be air--316(b) rule for power 
plants, which again would be a water rule, not an air rule.
    Air rules for the oil and gas industry, actions to reduce 
methane emissions from the oil and gas industry, the Boiler 
MACT, the Cement MACT, the Brick MACT, the Ozone NAAQS, the SO2 
NAAQS, the PM 2.5 MACTS and the RMP rule--those are the major--
the 16 major rules.
    Now, using 2008 as the baseline, can you tell me how all of 
these rules have improved air quality in the United States?
    Ms. McCabe. Well, that's a large variety of rules 
addressing a number of things. They all come from 
requirements----
    Mr. Barton. OK. I'm not asking you where they come from. 
I'm taking you at your word which you say the mission statement 
of the EPA is. I have outlined to you how many rules you--not 
you personally but your agency--has issued. I've outlined the 
major rules according to the majority staff and I've asked you 
a basic question.
    How much have all of those rules improved air quality in 
the united States? Ten percent? Five percent? Zero? You know, 
you can measure it by ozone reduction, particulate matter, 
however.
    Surely, your agency has a metric to track how all of these 
rules are meeting your mission statement. I'm asking you what 
it is.
     Ms. McCabe. We do have metrics and I would be happy to 
provide specific numbers. SO2 emissions have gone done 
considerably in this country. Ozone levels have gone down. 
Ninety-five percent of the areas that did not meet the 1997 
ozone standard now meet it.
    Mr. Barton. So can you give me or give the committee a 
specific--you can do it by rule, you can do it generically. My 
seat-of-the-pants nonscientific estimate is it hasn't had an 
impact. Has not changed the basic air quality 1 percent.
    Ms. McCabe. We would----
    Mr. Barton. Now, you can prove me wrong and I'm happy to 
see it but I want it statistically. I want it engineering 
scientifically proven.
    What I can tell you is that you have impacted--not you 
personally but EPA has impacted the economy by billions of 
dollars. You have killed the coal industry, basically. Killed 
it. Which, to his credit, President Obama said he wanted to do.
    But I want to give you a specific example. This is a power 
plant that's not in my district. It's in Congressman Flores' 
district.
    It's a Big Brown plant right outside of Fairfield, Texas, 
in Freestone County. That is a coal-fired power plant that's 
been there approximately 50 years. It employs about 500 people 
directly and is the single biggest economic generator in 
Freestone County.
    It's probably going to close in the next year or so because 
of some of these rules. It's just--they can't meet the 
compliance costs and they're just going to probably have to 
close the plant.
    If that happens and if you're still at the EPA I want you 
to go to Fairfield, Texas with Congressman Bill Flores and 
explain to those people who've lost their jobs how you've 
improved their environment.
    I want you to do that, because I don't think it's possible. 
And, you know, I voted for the Clean Air Act amendments in 
1991. I want clean air.
    I want clean water. But I don't want an organized attack on 
the energy-producing sector of America because of, to use Mr. 
McNerney's term, a political decision to go after hydrocarbons. 
And with that, Mr. Chairman, I yield back.
    Mr. Whitfield. Gentleman's time is expired. At this time 
I'll recognize the gentleman from Texas, Mr. Green, for 5 
minutes.
    Mr. Green. Thank you, Mr. Chairman and Ranking Member, for 
holding the hearing. I want to thank Acting Administrator 
McCabe for being here and the EPA's regulatory activity is the 
subject of much debate and we're happy to have you before our 
committee once again to discuss the issues.
    The EPA's Clean Power Plan changed significantly from the 
proposed rule and the final product. My understanding was that 
the EPA wanted to be responsive to stakeholder feedback 
including many concerns brought up by industry. The EPA 
proposed Federal implementation plans on October 23rd of 2015.
    The final rule indicated a 90-day comment period that ended 
in January of 2016. Did the Agency extend that comment period?
    Ms. McCabe. I don't believe we did, Congressman, but it's 
closed now. So we're considering all the comments that we got.
    Mr. Green. OK. How many comments had the Agency received?
    Ms. McCabe. Oh, gosh, on the Federal plan I'm not sure. But 
we received many hundreds of thousands of comments on the Clean 
Power Plan and its various pieces over the years.
    Mr. Green. What type of----
    Ms. McCabe. Millions, in fact.
    Mr. Green. OK. What type of feedback has the Agency 
received?
    Ms. McCabe. Well, if you're speaking about the Federal plan 
and the model rules we've got a lot of feedback on the how 
those rules can help States as they design their plans, very 
constructive feedback on how to make the rules workable for 
States while preserving the flexibility that the States have 
under the plan.
    Mr. Green. What did EPA do to respond to those millions of 
comments?
    Ms. McCabe. Well, in the----
    Mr. Green. Just a general--did you modify the plan or did 
you----
    Ms. McCabe. In the Clean Power Plan itself, yes, we made a 
number of changes in response to the comments both on process 
issues, on our evaluation of the underlying data in response to 
additional data that we got, which is a routine occurrence when 
we get good input from people in a rule making.
    Mr. Green. OK. Well, in Texas, obviously, we are an oil and 
gas State, and my Pennsylvania and Ohio friends tell me we 
burnt dirt and call it coal in central and east Texas. But we 
invest significant amounts in wind power--in fact, the largest 
wind power production of any State.
    I'd like to see the same thing done for solar. How does EPA 
envision the Clean Energy Incentive Program encouraging new 
solar construction?
    Ms. McCabe. The way the Clean Energy Incentive Program 
works, which as I've said already this morning is voluntary if 
the State chooses to proceed with it, would incentivize 
renewable energy and also energy efficiency by providing 
additional allowances into the trading system that we expect 
States will set up.
    So it just provides a little extra bump for those 
technologies to get going early in the system and provide the 
energy that is carbon free.
    Mr. Green. OK. The EPA wants to establish credit reserve 
and we're running the verification authenticity issues within 
the renewable fuel standard. I'd prefer not to see that again. 
How does the EPA plan to verify and authenticate credits under 
the CEIP, the Clean Energy Incentive Program?
    Ms. McCabe. Very good question. So there are--because there 
is a lot of work already underway that doesn't have to do with 
EPA for people to generate credits for energy efficiency under 
State programs, there are already systems in place that allow 
people to appropriately verify that the reductions are real and 
we are relying a lot on those systems not creating something 
wholly new.
    Mr. Green. And finally, the EPA had begun collecting 
information on existing oil and gas production wells. Given 
that there are approximately 40,000 oil and gas wells in the 
U.S., what challenge does the EPA foresee in regulating 
existing sources in a correlator that so many of these wells 
are small producing wells that make up maybe 10 percent of the 
total production?
    Is there any discussion in EPA to exempt out those smaller 
wells? Because if they are only 10 percent of the production 
you would think that that would be, you know, not as big a 
problem as the other 90 percent.
    Ms. McCabe. This is exactly why we need to collect this 
information. We are very far from making any decisions or even 
recommendations about what our rule would look like.
    But until we have this kind of information that can help us 
understand where the real significant emissions are, how much 
it will cost and what technologies are available to address 
them, we can't really move forward with those rules which is 
why we've got to collect the information.
    Mr. Green. OK. Mr. Chairman, thank you. I yield back.
    Mr. Whitfield. Gentleman yields back.
    At this time I recognize the gentleman from Illinois, Mr. 
Shimkus, for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman.
    So many questions, so little time. So I'm just going to 
jump into some of the points. I love the hearings because I 
love to pick up where other people have talked about to other 
than what's been prepared for us to ask.
    To my colleague Mr. Barton, he cited one power plant. I can 
cite three in Illinois--Wood River, Baldwin, Newton--all are at 
major risk of closing. That's why--that's why I want to talk 
about this new power plant in Japan.
    If there is a way we could transition and incentivize 
transitioning older generation to new generation then we'd give 
these workers some hope. We'd give coal miners some hope.
    But under the 111(b) standards we can't build this power 
plant and this is the cleanest most perfect plant we can build 
with technology right now. Well, we can't--the Japanese built 
it. OK.
    And so a major coal mining company just announced two days 
ago they're laying off 4,400 workers--4,400. So when we talk 
about the benefits which you laid out, I'm sure maybe we can 
sell some new technology.
    You have to consider the loss. You have to really 
appreciate the job dislocation that's occurring in major coal-
producing areas in our country, and if there's emotions and if 
there's politics behind that's because we're the ones that have 
to talk to the coal-mining families.
    We've got to talk to the mayor and the county board 
chairman who are losing their major source of revenue because 
of power plants going to close.
    So we don't see that in your--we never see that in the 
analysis. When Congressman Barton read the numerous rules and 
regs--I have done that before too--in your analysis you always 
take, like, the Clean Power Plan and say this is the cost, this 
is the benefit, boom.
    You never do the cost of the cumulative aspects of 
regulation. They pile on. In fact, I would say the costs are 
exponential versus additive.
    And so that's the crushing effect that's really occurring 
in coal-fired power plant communities and in coal mining 
communities across this country, and I think the Supreme 
Court--this is the first EPA rule and reg that they stayed.
    This is not like--this was a major deal for them to do 
that, and so the question should be asked is why. The answer is 
because we have successfully made the argument that if a rule 
is being litigated the pencil should go down.
    You can't force compliance when the final decision has been 
made on the legality of the rule or reg because if you force 
them to keep moving they'll shut down. They'll close. And then 
as we saw in other regs, oh no, we were wrong--we illegally 
promulgated this rule.
    So the Supreme Court said no, stay. So that kind of brings 
me to the--one of the questions that I wanted to ask. In the 
wake of the stay, EPA officials have stated that certain 
compliance deadlines in the Clean Power Plan may not be 
penalized should the stay be lifted, the suggestion being here 
that States and other stakeholders should be prudent to being 
voluntarily preparing now for rule implementation in case its 
legality is upheld.
    OK. First of all, pens should go down. You ought to be 
telling people, prepare for a rule that we don't know if it's 
going to be legal or not. So here's the question:
    Should parties granted the stay by the Supreme Court in any 
way be penalized if they take no action on the Clean Power Plan 
or EPA's derivative programs and guidance during pendency of 
the litigation?
    Ms. McCabe. We are absolutely not implementing--there are 
no expectations that any State, down State or not, has any 
obligations currently under the Clean Power Plan.
    Mr. Shimkus. Yes, the question is should they be penalized. 
You still have closing of the windows. You still have comments 
going. What if they say we're not going to make comments until 
we have a final ruling from the Supreme Court?
    Ms. McCabe. But I don't see that as a penalty, Congressman. 
It's their choice whether they want to comment or not. But that 
particular rule----
    Mr. Shimkus. But will you shorten the time frame? I mean, 
are you going to now say you're not prepared to meet it? I'm 
assuming it's not going to be ruled favorably. I'm going to 
assume that it's because you've morphed the Clean Air Act and 
you've provided powers to the Agency that weren't granted under 
the original legislation. So I think the Supreme Court is going 
to say it's illegal.
    But assuming it is, the question is if States say we've got 
to stay, we're not doing anything, many people are concerned 
that you are moving forward regardless of the stay offered by 
the Supreme Court.
    Ms. McCabe. Well, I'll just say again, Congressman, that 
with--in close consultation with the Department of Justice 
there is nothing that we are doing now that implements the 
Clean Power Plan in any way.
    That was what was stayed. The Supreme Court did not stay 
all action on climate. It didn't stay action by States, that 
they may choose to take on climate.
    It didn't stay efforts by EPA to provide assistance to 
States when they ask us for that assistance, which they have 
done, including that we move forward and provide more details 
on the Clean Energy Incentive Program.
    Mr. Shimkus. Thank you very much.
    Mr. Whitfield. The gentleman's time has expired.
    At this time, I will recognize the gentleman from New York, 
Mr. Tonko, for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair, and thank you, 
Administrator McCabe, for your hard work and for your 
appearance here today.
    This is just the latest in a series of hearings to push a 
message that strengthening standards to protect our public 
health and the environment are too costly, unachievable or a 
drag or a drag on our economy.
    Couple of observations--I would think that the greatest--
one of the greatest impacts on the coal-fired industry happens 
to be falling natural gas prices. And then further evidence is 
clear that the public health and environmental benefits of 
Clean Air Act regulations have far outweighed the costs of 
pollution reduction and we owe it to the next generations--
generations unborn to clean our air.
    Because of the Clean Air Act, we have grown our economy, 
created jobs and innovated new solutions to pollution controls. 
In the United States, leaks from oil and gas wells are the 
largest source of methane gas in the atmosphere.
    In April, the EPA released a report that concluded methane 
from oil and gas leaks makes up about a third of total methane 
emissions.
    In May, EPA announced steps to reduce those methane 
emissions. We often hear about carbon emissions but 
Administrator McCabe, can you explain how curbing methane 
emissions will indeed help combat climate change?
    Ms. McCabe. Yes, Congressman. As some of you may know that 
methane is about 25 times more potent as a climate pollutant 
than carbon dioxide. So even though CO2 is emitted 
in far greater amounts, methane is a very serious contributor 
to climate change.
    You correctly noted that the extent of the emissions of 
methane from the oil and gas industry many of those emission 
are unintentional. They are leaks. They are not necessary, and 
there is technology that is available. Several States are well 
on their way to--have already put in place like the ones that 
EPA just finalized to regulate these emissions.
    So that's making a huge contribution to, as you say, our 
health today and future generations.
    Mr. Tonko. Thank you. And when EPA is going through a rule 
making process, are there significant opportunities for 
stakeholders to provide input in the pending regulation?
    Ms. McCabe. There absolutely are. There are, of course, the 
formal opportunities for public comment when we do a proposal.
    But EPA operates routinely in the Office of Air and 
Radiation where I work, by doing extensive outreach to the 
stakeholders which includes the industry, first and foremost. 
We can't develop these rules if we don't have good 
relationships with the industry where we get good information 
from them.
    We also work extensively with the States who are our co-
regulators and actually are on the ground putting these 
programs in place and making sure that they achieve the 
benefits that they are designed to achieve.
    So far before we put pen to paper on a proposal, we have 
had extensive discussions with the industry and other 
stakeholders.
    Mr. Tonko. Well, for the recent--and I thank you for that. 
For the recent methane rule, I am informed that EPA received 
more than 900,000 public comments and held a number of public 
hearings. Is that in fact correct?
    Ms. McCabe. That is correct.
    Mr. Tonko. And the regulation was finalized after giving 
consideration to cost benefit analyses and technical 
justification. Is that correct?
    Ms. McCabe. That is correct and we made adjustments in the 
final rule in response to some of those comments we got.
    Mr. Tonko. OK. Was this methane regulation based on cost 
effectiveness and availability of technology?
    Ms. McCabe. That's correct.
    Mr. Tonko. Well, it sounds like the levels set in this 
regulation are achievable. The total climate benefit for this 
rule or the benefits for this rule are estimated at I'm told 
$690 million. Is that correct?
    Ms. McCabe. That is correct.
    Mr. Tonko. And is this more than the estimated cost? Are 
the benefits----
    Ms. McCabe. From the proposal?
    Mr. Tonko. Yes.
    Ms. McCabe. You know, I don't remember off the top of my 
head but we can get that information for you.
    Mr. Tonko. OK. That would be helpful. On top of that, EPA 
did not factor in the health benefits from reductions in other 
pollutants, which can be difficult to quantify but can have 
serious health consequences, particularly for vulnerable 
populations such as children and the elderly. Can you explain 
the public health benefits of this new regulation?
    Ms. McCabe. Yes, sir. So in addition to the methane 
reductions, which of course are related to climate change, 
these facilities emit sort of the standard--some of the 
standard air pollutants that we worry about, those that 
contribute to ozone formation and fine particles. They also 
emit toxic emissions and, as you know, some of those are very 
difficult to quantify the benefits because the research doesn't 
exist. But these are chemicals that are known to have adverse 
impacts on public health.
    Mr. Tonko. And show themselves in what sort of health 
impact?
    Ms. McCabe. Some of them could be carcinogenic. Some of 
them could affect the respiratory system, the cardiovascular 
system, those sorts of impacts.
    Mr. Tonko. OK. I've exhausted my time. But with that, I 
thank you and yield back, Mr. Chair.
    Mr. Whitfield. The gentleman yields back.
    At this time I will recognize the gentleman from Ohio, Mr. 
Latta, for 5 minutes.
    Mr. Latta. Well, thanks, Mr. Chairman and Acting Assistant 
Administrator. Thanks for being with us again. Really great to 
have you here again and hear the questions being asked, at the 
end of the day.
    Let me ask my first question. Under the current statutory 
framework is it the State environmental regulators or the 
States' energy regulators who are supposed to plan the amount 
of renewables, natural gas, coal and other resources for a 
State's electricity sector?
    Ms. McCabe. The choices about energy policy would be made 
by--generally, I imagine by energy agencies, although every 
State is set up somewhat differently.
    Mr. Latta. OK. When you say that they might be set up 
differently because wouldn't the expertise lie with the State 
energy regulators and not the State environmental regulators? 
Is that correct?
    Ms. McCabe. I wouldn't disagree with that. I just--my point 
is that some agents--some States have energy and environment 
together and some have them separately.
    Mr. Latta. OK. Let me ask this. How is that the Clean Power 
Plan is not usurping the authority and expertise of State 
energy regulators and transferring decision making to the 
environment regulators?
     Ms. McCabe. Because the Clean Power Plan is all about 
carbon emissions, which is an air pollutant as identified by 
the U.S. Supreme Court, and the rule sets standards for 
emissions of air pollution. It leaves the choices of how to 
achieve those reduction up to the States to plan and achieve.
    Mr. Latta. Well, where does the EPA derive its knowledge 
and expertise about how electricity is planned, operated and 
paid for?
    Ms. McCabe. We consult regularly with the energy agencies 
and the energy expertise across the Federal Government. We also 
have long relationships with the regional transmission 
organizations, with State energy regulators as well as 
environmental regulators.
    Mr. Latta. OK. But again, when we're talking about being 
paid for, who ultimately pays for this? Who pays for this?
    Ms. McCabe. I'm sorry. Who pays for what?
    Mr. Latta. Who pays for it? OK. When you are talking about 
when you are--on the expertise and how electricity is planned, 
operated and paid for. But when electricity is generated who is 
paying for it? Because when you put more regulations out there 
and increase the cost because, you know, going back to the 
gentleman from Illinois and the gentleman from Texas and their 
examples--let me give you another one.
    In Ohio, the electric co-ops have built a plant on the Ohio 
River and the--you know, the question for them then is what 
happens to their electricity rates and the competitiveness 
through the plant if all of a sudden the costs are being driven 
up by more regulations of which I know that Mr. Barton had 
pointed out the number of pages that are out there.
    Who's going to pay that? Who's the ultimate--who is going 
to be the ultimate one that has to pay for this?
    Ms. McCabe. Well, Congressman, of course, the consumer pays 
the bill. I think it really is important to note what Mr. Tonko 
said, which is that EPA regulations are not at all the only 
thing that's affecting the energy system in this country and 
that is a very important point, and it gets lost.
    Mr. Latta. And I think it also takes in effect--if you look 
at the number of manufacturing jobs members have in their 
district, and I have about 60,000 and I also have the largest 
farm income producing district in the State.
    So we have a lot of folks out there needing a lot of 
electricity, and when you put the two together and also hearing 
from my folks because if you go back--you know, when you talk 
about you're looking at statistics and things like that I've 
been told and it's been reported that if we had the exact same 
effect that we had in January of 2014, which was one of the 
coldest winters on record in the State of Ohio, we did not go 
into brownouts or blackouts because we had enough existing 
power out there that if we had the exact same conditions today 
we would have those conditions of blackouts and brownouts 
because we have plants closing.
    So I think, you know, one of the concerns out there is when 
you're talking about who's paying for this it's going to be the 
consumer. But it's also the plants out there because they can't 
keep up with the regs.
    Let me move on. In the Clean Power Plan, for existing 
electric-generating units, EPA contends Section 111(d) of the 
Clean Air Act authorizes the Agency to force generation 
shifting away from fossil fuels to renewable energy and 
efficiency programs.
    If EPA can force restructuring of the electricity sector, 
can it also force the restructuring of other sectors?
    Ms. McCabe. Well, I take issue with your use of the word 
force. The Clean Power Plan doesn't force anything. It follows 
the--what the industry is doing. The utility industry and 
electricity supply is very different in the way it operates 
from any other industry.
    Mr. Latta. Well, let me ask this. Are any of these 70 
source categories currently regulated under the Section 111 of 
the Clean Air Act exempt from this type of restructuring?
    Ms. McCabe. I just can't accept the premise of your 
question, Congressman.
    Mr. Latta. But you are saying that you can't accept the 
premise but are--but are any of the 70 source categories 
currently regulated under this section of the Clean Air Act, 
which is 111 of the Clean Air Act, exempt from this type of 
restructuring? So you're saying that you can't accept the 
question?
    Ms. McCabe. Well, I don't agree that we are restructuring 
the energy system through our rule. I also want to draw a 
distinction between the way the energy system works, which is 
a--based on a regional interstate grid, very different from 
other types of industries.
    So the question doesn't really make sense.
    Mr. Latta. Well, you know, if I could, Mr. Chairman, I'd 
like to maybe submit the remainder of my questions to the EPA 
for--because my time has expired.
    Mr. Whitfield. Yes. OK. The gentleman's time has expired 
and you may submit for the record.
    At this time I'd like to recognize the gentlelady from 
Florida, Ms. Castor, for 5 minutes.
    Ms. Castor. Well, thank you very much, Mr. Chairman, for 
calling this hearing to review the benefits of our 
Environmental Protection Agency, especially to our health and 
to our economy and with the focus on the Clean Air Act.
    For those of you in the audience that really like to get 
into the numbers of looking at the costs and benefits relating 
to rules--our important bedrock environmental rules, the 
Congress requires under the Regulatory Right to Know Act that 
the Office of Management and Budget submit to us a report and 
one was just filed in March and it--what if finds is that EPA's 
major rules promulgated between 2004 and 2014 yielded more 
benefits than major rules promulgated by other agencies over 
the same period.
    In the aggregate, the major rules promulgated by EPA have 
benefits between $160 billion and $788 billion compared to 
costs of just $38 billion to $45 billion. Rules promulgated by 
the EPA in fiscal year 2014 alone have resulted in an estimated 
$13 billion worth of benefits, far exceeding the $1 billion in 
costs--in estimated cost and by 2020 the benefits--the economic 
benefit of reducing air pollution is estimated at almost $2 
trillion, exceeding costs by 30 to 1.
    They go into much greater detail. So for those of you that 
like to really dig in to what criteria they look at I encourage 
you to do that.
    You know, it's very difficult for the Congress and the 
public sometimes to focus on impacts over decades of time. 
We're always focused on the here and now. But I'll tell you 
coming--watching the looming cost that we are going to suffer 
if we do not address climate change in a very aggressive it's 
really stark and already in the State of Florida we have local 
governments having and taxpayers--local taxpayers having to 
pony up multimillion dollars to adapt.
    In Miami, they're already spending $500 million, $600 
million because even on sunny days at high tide the streets are 
flooded and they're having now to repair water systems and 
wastewater systems already.
    And here are some of the other costs that really aren't 
discussed. We hear a lot of about cost to the industrial 
sector. But let's talk about our neighbors back home. What they 
predict are rising costs in property insurance from extreme 
weather events, flood insurance--the Congress has grappled with 
flood insurance--the rising cost of flood insurance.
    One global reinsurance giant predicts that extreme weather 
events are going to leave taxpayers on the hook for billions 
and billions of dollars in future years. Florida depends on 
tourism.
    We're going to have to renourish our beaches. That's a very 
significant cost. And the Congress is called upon time and time 
again to respond to emergencies, extreme weather events. So 
let's not lose sight of the true cost to taxpayers and our 
neighbors back home, our small businesses from mom and pop 
shops to all sorts of businesses. That has to be factored in.
    So Administrator McCabe, I was glad to hear in your 
testimony that even though the Clean Power Plan is in--on kind 
of a regulatory hold for now that many States have been moving 
forward voluntarily. Can you give us a quick snapshot of what's 
being done voluntarily even though we're kind of in a temporary 
holding pattern?
    Ms. McCabe. Uh-huh. Yes, absolutely. A number of the States 
that are moving forward are States that have been looking at 
these issues for a number of years.
    They are looking at reasonable restrictions on carbon 
emissions from their utility systems or even more broadly 
across their economies. They're looking at ways to integrate 
their energy planning, their increased investment in wind and 
solar, in energy efficiency and planning those in for a 
carbon--a freer carbon future.
    Ms. Castor. And do I understand that many States in 
partnership with their electric utilities are already close to 
meeting the goals laid out in the Clean Power Plan?
    Ms. McCabe. I believe that that's generally correct. Of 
course, the goals are--in the Clean Power Plan are many years 
out into the future. But yes, there are States and utilities 
that are well on their way, that utilities are increasingly 
investing and relying on wind and solar as a significant 
portion of their portfolio.
    Ms. Castor. And those are job creators. I know EPA doesn't 
really look at that side of the equation but one recent report 
predicts that due to the Clean Power Plan and just the 
significant shift towards renewables that we can anticipate 1 
million new jobs in clean energy by 2030.
    So there is a lot that goes into this cost benefit 
equation. But I think it's plain as day that we have got to act 
now aggressively to address the looming costs of the change in 
climate.
    Thank you, and I yield back.
    Mr. Whitfield. At this time, the Chair recognizes the 
gentleman from West Virginia, Mr. McKinley, for 5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman, and thank you, Ms. 
McCabe, for coming again to this. It just seems like you were 
here not too long ago.
    But let me go back over a little bit to restate that it's 
my understanding that this hearing was to examine the effects 
of major regulations on the energy and the industrial sectors. 
Is that your understanding of the purpose of this hearing?
    Ms. McCabe. I believe so, yes.
    Mr. McKinley. OK. Thank you. Now, so I go to that is that 
these effects of these regulations and there was a report that 
Lisa Jackson used when she came here back 6 years ago. Used to 
wave this report in front of us that was written by Morgenstern 
back in 1999 and it was primarily intended to demonstrate that 
she believed that more regulations actually helped the economy.
    As a matter of fact, she said that from this report that 
one and a half jobs are created for every million dollars spent 
in meeting those regulations. Do you remember that report?
    Ms. McCabe. Not specifically.
    Mr. McKinley. OK. She used to wave this quite often, as 
often as you came or come, she used to come and she used to use 
this all the time. This justifies why we have so many 
regulations.
    So I'm just curious about that because, to me, it appears 
from looking at the kind of three points of some of the things 
these major regulations--there's one about that using this 
about the jobs impact.
    I think we're picking winners and losers because I don't 
see one and a half jobs being created for the hundreds of 
billions of dollars that have been spent.
    It appears more we're picking winners and losers because in 
the coal fields across this country they are struggling with 
it. I know that there have been over 40,000 coal jobs lost--
direct coal jobs--let alone the 300,000 secondary jobs that are 
affected with it.
    So I'm struggling with the premise. So you can't tell me 
whether or not you agree with this report any longer?
    Ms. McCabe. I am not here to speak about that report, 
Congressman, nor am I here to speak about----
    Mr. McKinley. OK.
    Ms. McCabe [continuing]. How much you would value any 
particular regulation.
    Mr. McKinley. Well, I just want--in terms of the economy, 
what it's doing to the economy is these regulations, what have 
happened with it because I think there was an initial premise 
this was going to save jobs or create jobs. I don't think it 
did.
    Then we went--then we went to the environmental--you 
pivoted to the environment and temperature and we talked about 
temperatures were going to be under control if we pass some of 
these rules and regs affecting the coal and the gas industry.
    But yet even under the Clean Power Plan the EPA is 
accepting that it only is going to reduce the temperature or 
lessen it by 15 thousandths of a degree by the year 2100. I 
struggle with that.
    So it doesn't surprise me at all that now the EPA is 
pivoting from the fact that jobs weren't created that there's 
no temperature increase. So now they're--just in March, Gina 
McCarthy was before us and she testified that she said that 
it's not about the environment, it's not about the health and 
safety for the people that we've been passing this.
    She said it's about global leadership and I think wow, that 
was--that was a jaw-dropping revelation that she came out--this 
is not about the environment is why we're passing these--
despite what you just said to Joe Barton that's not what this 
whole idea was about.
    So I'm struggling with it because we've got a chart that 
shows yes, we may be doing it, adhering to it in America but 
the rest of the world is not following our global leadership 
that was being promoted.
    The rest of the world is continuing to use coal and create 
more fossil fuel and CO2 emissions in the atmosphere 
with this. Germany is building 26. India is going to double its 
production with it.
    So, to me, it comes across more as just an effort to have 
bigger, broader, stronger, more intrusive Government as 
compared to really helping people and their economy.
    So we have seen it in the ag community what the EPA is 
affecting, that that part of our sector of our economy, when 
they went after the waters of the United States they went after 
the farm dust rule, if you remember, for a while.
    But then they backed off. Did they back--did you all back 
off because you got push back? Because the science--you were 
saying how it was supposed to be good for your health. But once 
it was promoted on the farm dust you backed off.
    Ms. McCabe. Congressman, respectfully, I have to disagree 
with the way you're characterizing various prior statements of 
the Administrator and others in EPA just on a whole range of 
issues.
    Mr. McKinley. I'm just going from testimony that they gave. 
I'm not characterizing. Then you came out with a water quality 
standard that you didn't even give the States a chance to have 
a comment period.
    You came out with a water advisory that is 70 times more 
stringent than it is in Europe, 20 times more than numbers of 
States. Communities that are struggling in rural America to try 
to meet the water quality are going to spend millions and 
billions of dollars across this country to meet a standard that 
is questionable as to whether or not it's going to have an 
effect with it.
    So I'm going to go back in the remaining time--maybe I've 
lost my time--what's the answer, back to Joe Barton, when we 
talk to a coal miner that lost his job? It's OK because the 
environment is better? Is that what you want to tell him?
    Ms. McCabe. No. No, sir. Not at all. But I think it's 
important to recognize that there's lots of things going on in 
the energy system and coal is not as competitive as it was 
because of natural gas and other things going on in the 
industry.
    Mr. McKinley. But States with natural gas are also into 
recession. I'm sorry I'm going over my time.
    Mr. Whitfield. Yes, the gentleman's time has expired.
    Mr. McKinley. But we've gone over to Louisiana, New Mexico, 
Oklahoma, Illinois, Wisconsin--they are all struggling with 
this thing, and they are not coal-producing States.
    Mr. Whitfield. At this time I would like to recognize the 
gentleman from Iowa, Mr. Loebsack, for 5 minutes.
    Mr. Loebsack. Thank you, Mr. Chair. Good to see you, Madam 
Administrator. It's always good to have you here.
    We're talking about a lot of very important issues here and 
actually in some ways I can identify with some of the things 
that were just said, being from Iowa. We have a lot of issues 
having to do with water, a lot of different things.
    I am confident that we can fight our way through a lot of 
those issues. We're going to have to go to the State level, at 
the local level, at the Federal level.
    I think we're going to have to get all the stakeholders 
together eventually and we're going to have to work through 
this. It's not going to be easy, there's no question about 
that, especially on the water issue.
    But I do want to speak to two different issues, if I may. 
As you might imagine, I want to talk to you about ethanol a 
little bit. I want to talk to you about wind a little bit, two 
things that are very important for the State of Iowa, two 
issues, I think, where we have made tremendous progress over 
the years as well.
    When it comes to ethanol and the RFS, the renewable volume 
obligations--the RVOs--we know because the Department of Energy 
has stated that using ethanol as a vehicle fuel has measurable 
greenhouse gas emissions benefits compared with using gasoline.
    CO2 released when ethanol is used in vehicles is 
offset by CO2 captured when crops that we use for 
the ethanol are grown.
    Given the role that renewable fuels play in cutting down 
greenhouse gases, and I realize it's not universally accepted 
but I believe that that is in fact the case, shouldn't the 
recent RFS or RVOs--the renewable volume obligations--for 2017 
be increased to achieve this goal?
    Why are they at the level that they're at, given that the 
EPA itself has said that this is good for our environment?
    Ms. McCabe. Yes. Yes, sir. Well, you're exactly right. That 
is why Congress passed the renewable fuel standard, one of the 
reasons. Also the other was energy security and we have found 
that there have been increases in a whole range of renewable 
fuels including ethanol that are good for climate change.
    In our proposal we actually did propose an increase from 
the prior year in the amount of renewable fuel that would be 
expected to be used in the transportation system and each year 
as we've done that RVO those numbers have grown.
    We have--our job is to set those expectations and we have 
done that after a careful review of what the system is able to 
accommodate in order for those fuels to be used. Congress 
didn't just want them to be produced and sit somewhere. They 
wanted them to be actually used in the system and replace the 
petroleum fuels.
    Mr. Loebsack. Do you agree that if we have infrastructure 
improvements, especially for E15, that that would help us move 
along a little bit more quickly in terms of trying to get to 
the goal that we're supposed to get to?
    Ms. McCabe. I do think so and I think that that 
infrastructure is growing. It's just taking a little bit longer 
than everybody thought it would.
    Mr. Loebsack. Right, and I won't get too much in detail 
about the methodology used by the EPA but that's always a big 
concern, obviously, that a lot of us have in these States that 
produce ethanol and biodiesel for that matter too. It's not 
just an ethanol issue, as you know.
    So I just want to make sure that we stay on top of this 
because we can in fact accommodate, I think, more production of 
ethanol and biodiesel. We've just go to--in particular we've 
got to deal with the infrastructure issue, I think, going 
forward.
    You know, too, that Iowa is--I know that Congressman Green 
talked about Texas being a wind producer. In Iowa, you know, 
we're well over 30 percent of our electricity now is accounted 
for by wind energy, as you know.
    The concern that a lot of us in Iowa has is the Clean Power 
Plan, which as you know says that we've got to achieve a 32 
percent reduction in carbon pollution.
    But the start date for all of that is January of 2013 and a 
lot of States like Iowa, at least some States and Iowa in 
particular, achieved a tremendous amount of progress prior to 
that date. And I mentioned this to Administrator McCarthy as 
well, kind of gone round and round about this--you know, 32 
percent.
    The Clean Power Plan, I think, makes a lot of sense moving 
forward. It's going to be more difficult for some States than 
others. But Iowa has already made tremendous progress and we're 
not getting an credit for the progress that we made in the past 
by starting that date at 2013.
    Is there any possibility for flexibility for States like 
Iowa to get credit for what we've already done?
    I think it's unfair in some ways to start at that 
particular date and not take into account what States like Iowa 
have already done, especially on wind production.
    Ms. McCabe. Yes. Well, I think this question really 
reflects this debate that folks have been having this morning 
about what is our role under 111(d).
    It is not an energy policy rule. It is technology rule and 
for any technology rule we do under Clean Air Act we have to 
pick a starting point. And you're always going to have people 
on one side or the other that wishes the starting date were a 
different time. We picked ours because of the information that 
we had from sources out of that date.
    It is still the case, however, Congressman, that States 
like Iowa that have been aggressive and are continuing to be 
aggressive in renewable energy are charting themselves a path 
to meet the Clean Power Plan and especially if States choose to 
get into a relationship with one another, in trading 
relationships, that can provide great advantages to a State 
that is really on the leading edge of developing those 
resources.
    Mr. Loebsack. I would just encourage more flexibility 
moving forward on this issue. Thank you, Madam Administrator. 
Thank you, Mr. Chair.
    Mr. Whitfield. At this time the Chair recognizes the 
gentleman from Virginia, Mr. Griffith, for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman, and Madam 
Administrator. I'm going to read to you from Section 321 of the 
Clean Air Act. This provides, quote, ``the Administrator shall 
conduct continuing evaluations of potential loss for shifts of 
employment which may result from the administration or 
enforcement of the provisions of the Clean Air Act and 
applicable implementation plans including where appropriate 
investigating threatened plant closures or reductions in 
employment allegedly resulting from such administration or 
enforcement.''
    Yes or no, does the EPA--I would submit the EPA does not 
conduct these continuing evaluations. Isn't that correct?
    Ms. McCabe. Sir, whenever we do a regulation we look at 
those very characteristics in great detail.
    Mr. Griffith. You look at those characteristics when you 
propose a new regulation but you do not conduct continuing 
evaluations of potential loss through shifts of employment and 
then investigate threatened plant closures or reductions in 
employment allegedly resulting from the administration or 
enforcement of those regulations. Isn't that true? Yes or no.
    Ms. McCabe. There have been a variety of efforts over the 
years, but you're reflecting that there is a difference of 
opinion about our obligations under that study.
    Mr. Griffith. Well, there certainly isn't a difference of 
opinion with ``shall,'' is there? ``Shall'' means you shall do 
it, does it not? There's no wiggle room, is there?
    Ms. McCabe. It does say ``shall,'' but it reflects a set of 
activities that----
    Mr. Griffith. All right.
    Ms. McCabe [continuing]. People could disagree on exactly 
what those were.
    Mr. Griffith. I don't know how you disagree on that, ma'am. 
But we'll just leave that as it is. Despite that plain 
language, I understand that in 2009 in response to a letter 
from Mr. Barton and Mr. Walden, the EPA said it has not 
interpreted the CAA Section 321 to require the EPA to conduct 
employment investigations and taking regulatory actions. Can I 
interpret your prior answers to mean that it's still the 
position of the EPA?
    Ms. McCabe. I wasn't involved in the writing of that 
letter, Congressman. But I'd be happy to provide further 
information on it.
    Mr. Griffith. All right. I will follow up with that.
    According to the American Coalition for Clean Coal 
Electricity by the end of 2016 it is estimated that almost 51 
megawatts of coal-fired generation will retire or convert 
because of EPA policies.
    And I know the EPA was asked to conduct an investigation 
pursuant to 321 of the Clean Air Act with respect to any of 
these plant retirements. But that has not happened, has it?
    Ms. McCabe. As I said, each time we do a rule we look--that 
affects the power industry we do a forecast to get a sense of 
what the impact on the industry may be.
    Mr. Griffith. But when Murray Energy asked you all to do 
this and filed suit on that, you asked that it be dismissed and 
claimed that the energy corporation did not have standing to 
ask you to do that nor had they been harmed by the Clean Air 
Act. Have you looked into the situation at all?
    Ms. McCabe. Sir, I really don't want to speak to ongoing 
litigation, which you understand is very active.
    Mr. Griffith. I understand that. But I will tell you, here 
is the concern I have. My district has lost thousands of jobs. 
I don't have any Murray Energy plants or coal-generating plants 
or coal-production plants in my district.
    But it does concern me when they send out last week a 
notice that they are going to lay off another 4,400 employees. 
According to an article in the Wall Street Journal, a year ago 
they had 8,400 employees.
    Now they have 5,356 and they are laying off 80 percent of 
those, or at least they have sent out the warning notices 
required by law.
    But they may lay off 80 percent of those. While it is true 
that natural gas prices are low, it is also true that 
regulations have killed the coal industry in many, many ways 
and it doesn't seem that you all are following through on your 
Section 321 requirement that your constantly continuing 
evaluations of potential loss or shifts in employment and then 
when there are losses, and Mr. Murray has made it very clear 
there are losses coming. And if you don't want to do that one 
because there's litigation look at Alpha Natural Resources.
    I don't think they're suing you right now. But they are in 
bankruptcy court and they do have a lot of--or had a lot of 
employees in my district. There are still some but not as many 
as there were.
    You have a requirement to follow up on this. I don't 
believe you're doing it. Your answers here today indicate to me 
you're not doing it. The industry is in trouble.
    I will also tell you what's interesting is you talked about 
methane being a whole lot worse than carbon dioxide. Right now 
they are proposing in my region two or three new giant gas 
pipelines.
    Now, I am not against the gas industry. But you have 
indicated there is a lot of leakage when they're both getting 
the natural gas out of the ground, which we have some in the 
district, and then when they are piping it across the country.
    But your policies on coal have pushed people to natural gas 
even before the coal-fired power plants have used up their 
useful life and I think that's a shame because I think you all 
have been penny wise and pound foolish and you certainly have 
not considered the fact that thousands, tens of thousands, of 
people in the coal industry and those industries that supply 
the coal industry have lost their jobs and you all as a group 
have not done your job under Section 321 of the Clean Air Act.
    I yield back.
    Mr. Whitfield. Gentleman's time has expired. The gentleman 
from Illinois is recognized for 5 minutes. Mr. Kinzinger.
    Mr. Kinzinger. Thank you, Mr. Chairman, and Acting 
Assistant Administrator, thank you for being here, and thanks 
for your service to your country.
    I echo the concerns of many of my colleagues about the 
sheer number of regulations that have come out of the EPA 
recently. But I'm more concerned about how our economy and the 
small businesses and manufacturers are supposed to handle all 
these regulations.
    I think many Americans are very concerned, rightly so, 
about the state of our economy and I share those concerns, 
especially in light of the cost of so many of the EPA's 
regulations.
    I just have a few questions. In a recent report by the 
Competitive Enterprise Institute, they estimate the total 
compliance costs for EPA regulations to be about $386 billion 
in 2016. To put that in perspective, that's 2.1 percent of our 
GDP.
    Do you think that the $386 billion estimate is in the 
ballpark and if you don't what is your best estimate of 
compliance costs?
    Ms. McCabe. I really couldn't speak to that number. People 
do various studies. They base their studies on various 
assumptions that may or may not be what's actually borne out by 
the rule. So I really couldn't speak to that.
    What I can say is that we do an evaluation for each one of 
our rules of the expected costs and the expected benefits 
associated with it.
    Mr. Kinzinger. Would you agree that when a manufacturer 
faces a new compliance cost--let's say it's not $386 billion if 
you don't think so, or whatever the number is, there's a 
number--do you think they have to commit resources to comply 
with those rules?
    If a manufacturer has to comply with your rules do they 
have to commit some of their own resources to do it?
    Ms. McCabe. Sure. There would be expectations that they 
would invest in control equipment or other approaches to reduce 
emissions.
    Mr. Kinzinger. So if a manufacturer has to devote resources 
to comply with new EPA rules they have fewer resources 
available to produce or expand production of goods and services 
unless they increase prices?
    Ms. McCabe. Well, I don't know that it's as simple as that, 
and our rules always look at what kinds of approaches are cost 
effective and the impact that they would have, and in fact many 
industries have grown over the years with making investments in 
cleaner technology.
    Mr. Kinzinger. How does the EPA examine the impact of 
higher prices for goods and services? So, I mean, obviously we 
can go back and forth on, you know, whether it's good, bad, 
indifferent.
    But we admit and we understand that there is some level of 
resources that a manufacturer will have to commit, which is 
less invested in expanding or promoting goods.
    How does the EPA examine the impact of higher prices for 
goods and services or less expansion throughout the whole 
economy as a result? Do you guys take that into account?
    Ms. McCabe. So we follow OMB directives and methodologies 
in looking at our economic evaluations. Not everything has 
tools available to look at the impacts and so we work with OMB 
and others to continually develop better tools for that.
    Mr. Kinzinger. Mullin, you have to sit back.
    Ms. McCabe. So that's how we do it. Right now, there aren't 
good tools that you could accurately do whole economy modeling 
such as you described.
    Mr. Kinzinger. So you're saying that there is not--
basically, the second and third order of facts is not taken 
into account. So, you know, basically cost of--if the 
manufacturer has to invest what they are not going to grow by 
that's not taken into account by those models?
    Ms. McCabe. Or how much they are going to grow and be able 
invest more because it's been--it's good for their business.
    Mr. Kinzinger. And for the EPA rule setting carbon dioxide 
standards in the new coal plants did the EPA consult with 
equipment vendors or contractors to determine if a plant could 
be built with carbon capture and storage technology to meet new 
standards?
    Ms. McCabe. We certainly consult with a whole variety of 
people in the industry.
    Mr. Kinzinger. And can you identify any of the vendors that 
made those assurances and if not, why not?
    Ms. McCabe. I'd be happy to get back with you--to you with 
more details on who we spoke to.
    Mr. Kinzinger. OK. But you will be able to do that then? We 
will count on that response.
    Ms. McCabe. Sure.
    Mr. Kinzinger. OK. And for the existing coal plant rule, 
EPA set emission standards that are impossible to achieve at 
units themselves and will require beyond the fence actions. Is 
there any coal-fired electric generating unit in the world that 
can meet carbon dioxide emissions rate that the Agency has set 
for existing power plants?
    Ms. McCabe. Through its own--the coal emissions?
    Mr. Kinzinger. Yes.
    Ms. McCabe. Themselves? No, I don't believe so. But there 
are technologies and techniques that they can use in order to 
reduce their emissions.
    Mr. Kinzinger. And these would be the beyond the fence 
actions?
    Ms. McCabe. Well, CCS would be one way that a coal plant--
fuel mixing is another way that they could reduce their 
emissions.
    Mr. Kinzinger. So the next question and my last one, is 
there any control equipment or work practice that exists today 
that would allow an existing coal-fired unit to meet the 
standard? You think--you say there is.
    Ms. McCabe. Yes.
    Mr. Kinzinger. OK. All right. Well, it will be interesting.
    With that, I yield back. Thank you.
    Mr. Whitfield. At this time I will recognize the gentleman 
from Ohio, Mr. Johnson, for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman, and Ms. McCabe, 
thanks for joining us today. You know, the Congressional Budget 
Office has stated that if we increase the costs of energy it 
increases the cost of goods and services, costs which fall 
disproportionately on low-income households like those that I 
represent in eastern and southeastern Ohio.
    You previously testified that the Agency did not assess the 
full economy wide impacts of the Clean Power Plan. So is EPA 
currently using economy wide modeling to estimate the full 
economy impacts of its rules?
    Ms. McCabe. We don't have tools available to do that kind 
of analysis.
    Mr. Johnson. But the law requires you to do that kind of 
analysis, doesn't it?
    Ms. McCabe. Whole economy modeling? I don't believe so, 
sir. The law requires----
    Mr. Johnson. Aren't you--aren't you supposed to consider 
the economic impacts of the--of the rules that you put out? I 
think that's what I heard just a little bit ago.
    Ms. McCabe. In accordance with the methodologies that the 
Office of Management and Budget sets forth and we follow those 
procedures and----
    Mr. Johnson. But I thought I understood just a little bit 
ago that you're not following those procedures either.
    Ms. McCabe. No, we are.
    Mr. Johnson. OK. Don't you think that the EPA should 
consider those full economy impacts?
    Ms. McCabe. I think these are very, very complicated 
issues.
    Mr. Johnson. Oh, yes. They are complicated. The rules are 
complicated. The regulations that you guys are putting out are 
complicated. It's draining the life blood out of our--out of 
our businesses.
    Between the Clean Power Plan, the Waters of the U.S. and 
others that you folks have gotten, you just heard from my 
colleague, Mr. Kinzinger from Illinois, the hundreds of 
billions of dollars that you guys are sucking out of our 
economy every year that could be going toward job creation.
    You know, the money that is coming out in Federal 
regulations, particularly from the EPA, is like a--is like a 
dadgum permission slip to do business in America. Doesn't 
produce a product, doesn't pay a salary. It doesn't go to any 
company's bottom line. It's like going to the movie theater and 
buying a ticket but you don't get the popcorn or the diet Coke.
    You've got to pay extra to get that stuff and the projector 
doesn't work. It's a ripoff of the American people, and the 
Federal courts have shown and have demonstrated through their 
rulings that you guys are consistently overreaching.
    I think it's absurd. I think it's irresponsible. Quite 
honestly, Ms. McCabe, I think it's un-American. You obviously 
don't have a concern and your department doesn't have a concern 
for the economic well-being of the very people that create jobs 
in this country.
    Let me ask you another question. Is it correct that the EPA 
will not engage the Clean Air Scientific Advisory Committee to 
consider adverse effects of implementing air quality standards?
    Ms. McCabe. It's not correct that we will not. We----
    Mr. Johnson. Have you done so?
    Ms. McCabe. We----
    Mr. Johnson. Have you done so? Yes or no.
    Ms. McCabe. Not in the context----
    Mr. Johnson. OK. So you haven't. So why not? Why not up 
until now?
    Ms. McCabe. The Clean Air Science Advisory Committee has 
focused its attention on the standards, on the standard 
setting.
    Mr. Johnson. No, I'm asking you. I know what they do. I am 
asking you why you haven't consulted with them--why you haven't 
engaged with them.
    Ms. McCabe. We engage with them all the time.
    Mr. Johnson. No. You just told me you didn't engage with 
them, that you haven't up until now. So first you say you 
didn't, now you say you did. That's the same kind of double 
talk that our businesses are getting across the country. Have 
you engaged with the CASAC?
    Ms. McCabe. We have----
    Mr. Johnson. Have you engaged with the CASAC----
    Ms. McCabe. I am trying to answer you, Congressman.
    Mr. Johnson. No, you are not. It is a yes or no question. 
Have you engaged with them?
    Ms. McCabe. Yes, we have engaged with them.
    Mr. Johnson. Why did you just tell me that you haven't?
    Ms. McCabe. Because----
    Mr. Johnson. You said not up until now.
    Ms. McCabe. Because you asked me about a specific topic.
    Mr. Johnson. No, I asked you is it correct that the EPA 
will not engage with the Clean Air Scientific Advisory 
Committee to consider the adverse effects of implementing air 
quality standards. You said it's not true. I said, ``Have you 
engaged with them?'' You said not at this time.
    Ms. McCabe. Not on that topic.
    Mr. Johnson. OK. Well, that's what I am asking you about.
    Ms. McCabe. All right.
    Mr. Johnson. That's why I don't let you ramble on because 
you try to deflect the answer to something that you want to 
talk about instead of what the American people are concerned 
about, why you are not doing your job and why you are not 
considering the implications of the rules that you're putting 
out.
    Is it correct that the EPA does not believe it has to 
investigate jobs losses pursuant to Section 321 of the Clean 
Air Act? Do you think you're supposed to do that?
    Ms. McCabe. As I noted----
    Mr. Johnson. Yes or no? Do you think you are supposed to do 
that? I got six seconds. Do you think you're supposed to do 
that?
    Ms. McCabe. This is a matter in litigation, Congressman. 
So----
    Mr. Johnson. So due to a matter that is in litigation, you 
can't answer whether or not you are supposed to do that?
    Ms. McCabe. We believe that we are discharging our duties 
under the Clean Air Act.
    Mr. Johnson. Are you required to investigate jobs losses 
under Section 321?
    Ms. McCabe. The statute speaks for itself and says what it 
says, and we're ----
    Mr. Johnson. And you are not doing it. It's absurd, Ms. 
McCabe.
    Mr. Rush. Gentleman, order.
    Mr. Whitfield. Gentleman's time has expired. At this time, 
I recognize the gentleman from New York, Mr. Engel, for 5 
minutes.
    Mr. Engel. Thank you. Acting Assistant Administrator 
McCabe, thank you for joining us. I am a little taken aback by 
the hostility that I hear in this room. I just want you to know 
that there are many of us who approve of the work that the EPA 
does.
    Mr. Johnson. Point of personal privilege, Mr. Chairman.
    Mr. Engel. We want--we want--we want clean air.
    Mr. Whitfield. Would the gentleman suspend for just 1 
minute?
    Mr. Engel. Yes.
    Mr. Johnson. You know, I find it absurd that we would be 
challenged on an air of hostility when we are doing what the 
American people require us and request us to do, which is to 
hold the EPA accountable.
    If we are not going to do it then who is going to do it?
    Mr. Rush. Mr. Chairman--Mr. Chairman--Mr. Chairman--Mr. 
Chairman.
    Mr. Johnson. I have the floor. I have been recognized.
    Mr. Engel. You took my time.
    Mr. Johnson. Though I claim back my time. His time was 
over.
    Mr. Whitfield. OK. Let's hold it for just a minute. 
Obviously, climate change and regulations are something we all 
feel very strongly about, and I don't think it's correct to 
question anyone's motives.
    And we all have very strong feelings about this. Mr. 
Johnson is speaking in defense of his constituents. Mr. Engel 
is expressing what he perceives as hostility. What would the 
gentleman like to say?
    Mr. Rush. Mr. Chairman, my side has sat here very patiently 
and calmly while this witness, who by every indication has 
worked tirelessly on behalf of the American people--to be 
called un-American, that is absurd.
    Mr. Whitfield. Well, Mr. Rush----
    Mr. Rush. That is extreme and I said it to you when it was 
mentioned, if you don't agree with the facts, then all of a 
sudden you are called un-American.
    Mr. Chairman, there is no place in this hearing for a 
witness, be it from the EPA or whatever governmental agency 
there is to be called an un-American.
    Mr. Whitfield. He said it was in his opinion un-American. 
He didn't say she was un-American. And there are very strong 
feelings on this issue because many people, and we are speaking 
for our constituents, believe that EPA is exceeding its legal 
authority under the direction of a president who is trying to 
impose his will on climate change around the world. So there 
are strong feelings on the issue, there is no question.
    Mr. Engel, you are recognized. We will give you--you were 
about 4 minutes when we interrupted you.
    Mr. Engel. I think it was more than 4, Mr. Chairman. I 
would like to have my 5 minutes. I really just----
    Mr. Whitfield. Well, I would be happy to give you 5 
minutes.
    Mr. Engel [continuing]. Say anything except welcome the 
witness and----
    Mr. Whitfield. You are recognized for 5 minutes.
    Mr. Engel [continuing]. Let me say that I am not 
questioning anyone's motives. Everybody has the right to 
express their mind. I just question the hostility that the 
questions are being asked. I think you can disagree with a 
witness. You can tear down whatever they have to say. But I am 
a big believer in you do it in a way that doesn't call anyone 
un-American and that you don't question anyone's motives.
    I think that the Administrator is trying to do her job. We 
are trying to do our job, and I think that we can have 
differences of opinion and state the disagreements without 
being hostile. That's all I wanted to say.
    I am a supporter of what you try to do with clean air and 
clean water. I believe the history of the Clean Air Act shows 
that the United States can reduce pollution while creating jobs 
and strengthening the economy, and your testimony and Ranking 
Member Rush's opening statement set forth statistics on how 
EPA's pollution reduction program saved lives and improved 
public health, particularly among children and senior citizens.
    So I won't repeat that here. I'll get to my questions. I 
have about four of them, so if you could keep your answers 
brief I would appreciate it.
    Many of my colleagues criticize the compliance costs of 
EPA's regulations. Please explain the opportunities that 
regulated entities and industries have to communicate concerns 
to regulators during the rulemaking process and please explain 
how those concerns are taken into account.
    Ms. McCabe. Both before we start the rulemaking and 
certainly through formal comment periods we solicit people's 
views on all of the information that we use to develop our 
rules including rules about cost.
    We are constantly looking for ways to adjust the rules to 
provide opportunities for people to comply with them in the 
most cost-effective way possible.
    Mr. Engel. Thank you. In your experience how often are 
major rules adopted where projected costs exceed projected 
benefits?
    Ms. McCabe. Where costs exceed the benefits I am not aware 
of any that I've worked on where the costs exceeded the 
benefits.
    Mr. Engel. Thank you. The U.S. has become a world leader in 
pollution control technology supporting millions of jobs, 
generating hundreds of billions of dollars in revenues and tens 
of billions of dollars in exports every year.
    Has the Clean Air Act contributed to the development of 
that industry here in the United States?
    Ms. McCabe. Yes, sir, it has through our automotive 
technologies as well as other pollution control technologies. 
It absolutely has.
    Mr. Engel. Thank you. The EPA and the National Highway 
Safety and Transportation Agency have proposed new vehicular 
fuel efficiency standards that establish average fleet one 
standards of 40.1 miles per gallon by model year 2021 and 49.6 
MPGs by model year 2025. If possible, please discuss the cost 
benefit consideration associated with this proposal.
    Ms. McCabe. So this proposal is great because it means 
American motorists are using less gas. That means they are 
pumping less. They are saving that money in their pockets and 
everybody appreciates that.
    Mr. Engel. Thank you. On August 8th of 2011, EPA finalized 
a cross-State air pollution rule and after a series of court 
challenges that delayed implementation I understand that the 
EPA now expects to update and finalize the rule by next month, 
August 2016. If possible, could you please discuss the cost 
benefit considerations associated with this rule making?
    Ms. McCabe. Yes, sir. Absolutely.
    This is a rule that's required for upwind States to reduce 
their emissions that contribute to ozone air quality problems 
downwind.
    We reviewed the variety of technologies that are available 
to electric utilities to reduce those emissions of NOx and 
found a number of extremely cost effective approaches--$1,500 
per ton or less--that could be implemented very quickly 
including turning on pollution control technology that has been 
installed but is not being run at this time.
    Mr. Engel. Thank you. On June 22nd, 2010, EPA finalized a 
rule which strengthens the primary sulfur dioxide NAAQS to a 
level of 75 parts per billion. Principal effects would be to 
require additional controls on fossil fuel-fired power plants. 
If possible, could you please discuss the cost benefit 
considerations associated with this rule making?
    Ms. McCabe. So sulfur dioxide has very clear impacts on 
public health. So every time you reduce sulfur dioxide you are 
achieving benefits that can be monetized in terms of people's 
public health.
    There are very well understood technologies, very cost 
effective technologies that are available for facilities to 
reduce their emissions of SO2 and I should note that those very 
same kinds of technologies are helpful in meeting other 
requirements.
    Mr. Engel. Well, again, thank you for your testimony and I 
appreciate the work you do and sorry that you weren't treated 
very courteously.
    Ms. McCabe. Thank you, sir.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Oklahoma, Mr. Mullin, for 5 minutes.
    Mr. Mullin. Thank you, Mr. Chairman. Thank you once again 
for being here. I don't envy your position and unfortunately I 
have lost a tremendous amount of respect for the EPA and what 
their mission statement has turned into.
    From trying to protect our environment, which I'm a big 
advocate for--I am the fourth generation on my farm. We live in 
the same location that, literally, my family stopped walking 
because I'm Cherokee and when we came into Oklahoma, still live 
in the same area. Love it.
    And so we're about protecting it. My kids will grow up on 
the same place. But the EPA has turned into more of an agenda-
driven agency than actually doing its original mission 
statement as you stated earlier.
    And I just want to kind of rehash some things. I mean, you 
have--you have said that you believe that energy costs is going 
to be lower due to the EPA's regulation. Is that correct?
    Ms. McCabe. What I was referring to was our projections in 
the Clean Power Plan, that by the 2030 compliance year because 
of the investment in energy efficiency that we predicted that 
people's bills would go down by about 7 percent.
    Mr. Mullin. So out of those Clean Power Plans, there are 
several regulations specifically to the power plants and by 
fully implementing all of those out of 16 rules it's going to 
cost the industry--now, this is where you are saying it's going 
to lower costs to our consumers--by the time all of these 16 
rules are fully implemented it's going to cost the industry 
$28,912,000,000 a year annually to comply--annually. Now, who's 
going to pay for that?
    Ms. McCabe. Well, I'm not sure where your number comes 
from, Congressman, so----
    Mr. Mullin. This is from you guys. EPA's estimate of 
compliance cost--EPA's--these are yours--so this isn't my 
number. This isn't the majority's number. These are your 
numbers. The 16 rules that you have towards power plants, 
$28,912,000,000 annually--your numbers--to comply. Now, where 
is the cost saving to the consumer? Who is going to pay for 
that?
    Ms. McCabe. This is a very large industry. The utility 
industry----
    Mr. Mullin. No, no, no, no. Who is going to pay the $28 
billion? Let us just round it up to $29 billion because you 
guys usually underestimate because you want to try and make 
your numbers look good. So let's say $29 billion annually. Who 
is going to pay for that?
    Ms. McCabe. What I am trying to say, Congressman, is that 
consumers pay rates which are set through----
    Mr. Mullin. So what you're saying is you expect the 
industry to absorb it?
    Ms. McCabe. I am not saying any--I am not giving you any--
--
    Mr. Mullin. Well, now, you made the claim that the 
consumers' cost was going to go down.
    Ms. McCabe. Yes, sir.
    Mr. Mullin. OK. How are you coming up with that claim if 
you can't answer who is going to pay for the $29 billion that 
you guys estimate it is going to cost annually to comply with 
your regulations?
    Ms. McCabe. This industry invests every year millions and 
millions of dollars----
    Mr. Mullin. This is--no, no, no. This has nothing to do 
with investment. This has to do with complying with your 
regulations.
    Ms. McCabe. Respectfully, Congressman, it does have to do 
with investment.
    Mr. Mullin. No. No, it doesn't. This is to comply.
    Ms. McCabe. Yes, and they're----
    Mr. Mullin. There is a huge difference. I am a business 
owner. There is a cost to implement every regulation that comes 
in. That has to either be absorbed by the company, which can't 
usually absorb it, or it's got to be passed on to the consumer.
    Now, if you are going to sit here and tell me as a witness 
that it is going to lower the cost, you are telling the 
American people that it is going to lower the cost but your 
estimates--your estimates are saying it's going to cost $29 
billion annually for the industry to comply and your only 
answer is that it is going to be absorbed by the industry? You 
are making that assumption?
    Ms. McCabe. The increased use of energy efficiency will 
mean that people are using less energy.
    Mr. Mullin. Now, the last time you were here I went through 
energy efficiency that you guys were claiming and we didn't 
show that. The cost of the compliance of the appliances had 
went up and greatly outpaced the cost of energy savings. So now 
you are saying that it's going to save it because of energy 
savings. So you're making an assumption--you are making a false 
claim then?
    Ms. McCabe. I am not making a false claim.
    Mr. Mullin. No, you are saying that it is going to save the 
consumer dollars. You are making that assumption----
    Ms. McCabe. I am----
    Mr. Mullin [continuing]. And so you are making a false 
claim because there is nothing to back that up.
    Ms. McCabe. What there is to back that up is our regulatory 
impact analysis, which lays out all of this analysis----
    Mr. Mullin. By your own costs it's $29 billion a year. Who 
is going to pay for it?
    Ms. McCabe. Sir, you need to look at the regulatory impact 
analysis that goes through----
    Mr. Mullin. No. What you need to do is understand the 
industry. I read your bio. You have never worked in the 
industry. You have worked against the industry from day one.
    Ms. McCabe. That is absolutely not true, Congressman.
    Mr. Whitfield. The gentleman's time has expired.
    Mr. Rush. Mr. Chairman, a point of order. When are you 
going to stop the badgering of witnesses before this committee? 
And then I respect the prerogatives of every member of this 
committee--every Member of the House. I respect the witnesses. 
Mr. Chairman, if they're asked a question, then they should 
have some reasonable amount of ----
    Mr. Whitfield. Well, I didn't--it's not my opinion that 
Mr.----
    Mr. Rush. Mr. Chairman, please don't cut me off. At least I 
ask for some reasonable assurance that they are going to be 
able to answer the question that they are asked. Now, Mr. 
Chairman, this hearing is getting way out of hand and then you 
have to have some responsibility for it.
    Mr. Whitfield. This hearing is not out of hand.
    Mr. Rush. Yes, the hearing is----
    Mr. Whitfield. People have a right to ask the questions.
    Mr. Rush. This witness has been badgered and badgered----
    Mr. Whitfield. She has not been badgered.
    Mr. Rush [continuing]. And badgered and badgered and 
badgered and badgered, Mr. Chairman.
    Mr. Whitfield. I respectfully disagree with you.
    At this time, I recognize the gentleman from Missouri, Mr. 
Long, for 5 minutes.
    Mr. Long. Thank you, Mr. Chairman. I appreciate and I wish 
there was as much respect on the House floor for the activities 
there as what there are in this room and if you want to look at 
disrespectful look at last Thursday on the floor of the House--
the representatives of the people's House.
    Ms. McCabe, I am sure you're aware in February of this 
year--I moved to the chair. I can see--it's the only one I 
can't see--get him out of here.
    But I'm sure you're aware that in February of this year the 
Supreme Court issued a stay on the implementation of the Clean 
Power Plan. The EPA has stated it will continue to provide 
tools and support for States that seek the Agency's guidance 
and just last month issued a proposed rule on design details 
for a program out of the Clean Power Plan.
    Why does EPA continue to issue implementation guidance on 
the Clean Power Plan in light of the Supreme Court's stay and 
shouldn't the EPA stop issuing guidance for the Clean Power 
Plan?
    Ms. McCabe. Congressman, we are not implementing the Clean 
Power Plan, which is what the court stayed. No State is 
required to do anything under the Clean Power Plan. While that 
is----
    Mr. Long. But you're issuing guidance on it or not?
    Ms. McCabe. We are developing further tools in response to 
requests from States that are voluntarily choosing to go 
forward and work on these issues and the Supreme Court did not 
stay all activity of the Agency. It did not stay activity of 
States that want to do something to address these important 
public health issues.
    Mr. Long. Yes, but it issued a stay on the implementation 
of the Clean Power Plan, correct?
    Ms. McCabe. Which we are--which we are not doing.
    Mr. Long. So you are not issuing guidance on the Clean 
Power Plan?
    Ms. McCabe. Developing tools is not implementing the Clean 
Power Plan, which is what was stayed.
    Mr. Long. What is the EPA's interpretation of the stay of 
the Clean Power Plan?
    Ms. McCabe. Our interpretation is that we cannot require 
any State to take any activity that is required under the Clean 
Power Plan and we are not doing that.
    Mr. Long. OK. Does EPA consider the cumulative impact of 
economically significant rules when proposing additional rules 
and if so what influence does this have on the EPA when 
proposing new rules or updates to current rules?
    Ms. McCabe. Each time we do a rule we take into account all 
the rules that have gone before it and build that into our 
analysis of costs and benefits.
    Mr. Long. OK. Since 2009, the EPA has published nearly 
3,900 final rules--the final answer. Roughly, how many of these 
rules have been considered economically significant, which 
means they have an annual effect on the economy of $100 million 
or more?
    Ms. McCabe. I don't know the answer to that question, 
Congressman. I would be happy to get it for you.
    Mr. Long. I didn't think you would but I was hoping you 
would be able to get it for me. So I----
    Ms. McCabe. Yes. Absolutely. We will gladly get it for you.
    Mr. Long. Yes, I appreciate that. And under the Paris 
climate agreement the United States agreed to revisit its 
greenhouse gas goals in 5 years with the object of making them 
more stringent.
    Will this agreement lead the EPA to more proposed stringent 
standards for the power sector, you think?
    Ms. McCabe. I really can't speak to rules in the future, 
Congressman. But this is a global and challenging problem that 
people will continue to work on.
    Mr. Long. Former climate chief--excuse me, a former chief 
climate counsel of an environmental group recently mentioned 
that there could be newer versions of the Clean Power Plan if 
the Supreme Court rules in favor of the plan.
    Is the EPA currently doing work on a more stringent version 
of the Clean Power Plan for power plants?
    Ms. McCabe. No, we are not.
    Mr. Long. Under Section 111, standards are to be reviewed 
every 8 years. Would more stringent standards be in fact a 
possibility?
    Ms. McCabe. That every 8-year review applies to Section 
111(b), which is the standards for new power plants. So just 
wanted to clarify that.
    But at this moment, we are not looking at any review of the 
111(b) and 111(d) standards.
    Mr. Long. OK. Well, I'd feel, you know, kind of left out if 
I didn't get to raise my voice at least once today. So I want 
to thank you for being here and I yield back.
    Mr. Whitfield. The gentleman yields back and that concludes 
all the questions. So Ms. McCabe, thank you for being with us 
this morning. We look forward to continuing working with you on 
these issues.
    At this time, I would like to call up the second panel of 
witnesses, and on the second panel we have--I am actually just 
going to introduce the second panel as we call them for their 
testimony.
    So if the second panel would come forward and Ms. McCabe 
thank you again. Our actual first witness on the second panel 
will be Mr. Travis Kavulla, who is the president of the 
National Association of Regulatory Utility Commissioners and 
he's the vice chairman of the Montana Public Service 
Commission.
    So we will recognize Mr. Kavulla for his 5-minute opening 
statement, and just make sure that the microphone is on and you 
see the lights on the table. When the 5 minutes is up, the red 
light will come on.
    So at that point, you can start summarizing. But we do 
appreciate all of you being with us this morning and, Mr. 
Kavulla, you are recognized for 5 minutes for an opening 
statement.

 STATEMENTS OF TRAVIS KAVULLA, PRESIDENT, NATIONAL ASSOCIATION 
OF REGULATORY UTILITY COMMISSIONERS, ON BEHALF OF THE NATIONAL 
    ASSOCIATION OF REGULATORY COMMISSIONERS; DAVID PORTER, 
    CHAIRMAN, RAILROAD COMMISSION OF TEXAS; LYNN D. HELMS, 
  DIRECTOR, NORTH DAKOTA INDUSTRIAL COMMISSION, DEPARTMENT OF 
MINERAL RESOURCES; ROBERT WEISSMAN, PRESIDENT, PUBLIC CITIZEN; 
   AND CHARLES D. McCONNELL, EXECUTIVE DIRECTOR, ENERGY AND 
            ENVIRONMENT INITIATIVE, RICE UNIVERSITY

                  STATEMENT OF TRAVIS KAVULLA

    Mr. Kavulla. Thank you very much, Chairman Whitfield and 
Ranking Member Rush and members of the committee, for sitting 
through this hearing today and affording us your attention.
    I am speaking today on behalf of the National Association 
of Regulatory Utility Commissioners, a 127-year-old 
organization that represents the public utility commissions of 
the United States.
    I think it's safe to say that when the rule was--the Clean 
Power Plan was published in the Federal Register October of 
last year it represented the EPA's most far-reaching regulation 
of the electric power sector in the Agency's history.
    NARUC's members are divided on what should be done to 
address carbon dioxide and other greenhouse gases emissions. 
However, NARUC has advocated unambiguously that States' 
traditional regulatory oversight over utility resource planning 
not be eroded and that low-carbon-emitting resources of all 
kind receive credit in the Clean Power Plan.
    In both respects, the EPA's regulation falls short of these 
principles. Traditionally, air quality regulations identify the 
pollutant that they have in mind to abate and then they specify 
the technology which either maximally controls for its 
emissions or is the most cost effective in controlling the 
emission of a pollutant.
    Then the regulation will require the installation of that 
technology or require the facility that emits that pollutant to 
limit its emissions to the same--to the same level.
    In short, traditional environmental regulation revolves 
around installing specific pollution control technologies at 
the facility that produces the emissions and certainly in all 
previous rules issued under Section 111(d) a facility-specific 
technology has been at the core of the regulations emissions 
standard.
    And if you look back at the several regulations issued 
under 111(d), these technologies are fairly modest in scope and 
limited in their applicability to certain industries--for 
instance, spray cross-flow packed scrubbers for the phosphate 
fertilizer industry.
    When the EPA, however, decided to focus on electric power 
generation under Section 111(d), instead of focusing on the 
emitting facility as the--as the point of regulation, the EPA 
instead focused on what it called the complex machine that is 
the North American power system and it identified through a 
system of so-called building blocks a more comprehensive system 
to abate the emission of carbon dioxide.
    The EPA then set about creating State requirements that 
were not limited to reducing emissions from coal-fired 
generators based on facility upgrades but on the idea that if 
only natural gas-fired or renewable generation were more 
prevalent coal plants would dispatch less often, reducing their 
emissions.
    Together, the requirement-setting process leads to a more 
stringent emission standard for coal plants which is impossible 
to achieve at the specific plants using demonstrated 
technology.
    In short, to regulate existing power plants, the EPA is 
effectively requiring the construction of entirely new power 
plants. This novel approach means that EPA has interpreted the 
Clean Air Act to give that agency the power essentially to plan 
the resource mix of the U.S. power sector.
    Effectively, the EPA has created a de facto fuel and 
renewable energy standard. I am concerned about this because 
traditionally making determinations as to the economic, 
environmental and social efficiency of utilities' investments 
to serve retail customers has been for nearly a century the 
province of State utility commissions.
    Regulated utilities that own generation file integrated 
resource plans that are subject to review by State utility 
commissions.
    These are intended to be processes that take a wide ranging 
look at customers' needs, incorporating demand forecasting a 
wide consideration of available resources including energy 
efficiency and indeed environmental externalities.
    In my experience, State utility commissions possess and 
deploy substantial technical resources in analyzing these 
plans.
    But when the EPA adopted a system that encompassed the 
entirety of the State's electric power production what it 
really did was to remove the IRP function of a utility 
commission and replace it with a carbon resource planning 
process undertaken by the State's environmental regulator and 
the Governor's office under Section 111(d).
    It may seem innocuous to transfer one regulator--an 
economic regulator like myself with an environmental regulator, 
but the functional transfer of authority is highly 
consequential for several reasons. It gives a less experienced 
regulator control over a resource planning process. It makes 
the resulting plan a matter of Federal environmental law 
enforceable under it sapping the ability of the industry and 
the regulator to respond nimbly to changing market conditions.
    The scope of the plan, rather than just for a single 
utility, now becomes the entire State's electric resource mix 
with the likelihood that certain parties are favored over 
others and, finally, it introduces a new level of potentially 
self-seeking politics and to have a plan in process.
    Needless to say, Mr. Chairman, with the adoption of the 
Clean Power Plan by the EPA, it fundamentally alters how and by 
who utilities are regulated in the United States.
    Thank you.
    [The prepared statement of Mr. Kavulla follows:]
    
    
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    Mr. Whitfield. Thank you, Mr. Kavulla.
    Our next witness is Mr. David Porter, who is the chairman 
of the Railroad Commission of Texas and, Mr. Porter, thanks for 
being with us today, and you are recognized for 5 minutes.

                   STATEMENT OF DAVID PORTER

    Mr. Porter. Thank you, Chairman Whitfield, Ranking Member 
Rush and members of this committee. For the record, I am David 
Porter, chairman of the Railroad Commission of Texas.
    For those of you who are not familiar with the Railroad 
Commission, we are the State of Texas' chief energy regulator. 
I am one of three statewide elected commissioners, and we 
oversee everything from oil and gas to pipelines, uranium 
exploration, surface coal mining, natural gas, local 
distribution companies and alternative natural gas fuels.
    The Railroad Commission has effectively regulated the oil 
and gas industry in the state of Texas since 1919. It is one of 
the oldest State agencies in the Nation and the most mature 
energy regulatory body in the world.
    Texas is the Nation's largest producer of oil and natural 
gas, and the commission monitors approximately 433,000 oil and 
natural gas wells, more than 335,000 of which are actively 
producing.
    This energy production supports 2 million jobs in Texas and 
about a quarter of the State's economy. The oil and gas 
industry significantly benefits Texas as well as the entire 
United States.
    The recent surge in drilling has considerable bolstered the 
national economy. The result in historical production increases 
have also paid the way for extraordinary geopolitical 
advantages.
    In recent years, the United States has been able to surpass 
Saudi Arabia and Russia as the leading producer of oil and 
natural gas liquids in the world.
    We have also seen a huge shift in the balance of trade 
because of the growing strength of our domestic energy 
industry. Domestic oil production has increased by 4.3 million 
barrels per day since 2006 and correspondingly, because of that 
increase, the trade deficit has been decreased.
    As chairman of the Railroad Commission, it is my job to 
ensure fair and consistent energy regulation in Texas so 
businesses can safely, efficiently and economically produce the 
energy that powers our State and national economies.
    That said, I very much appreciate the opportunity to submit 
this testimony regarding recent rulemaking by the United States 
Environmental Protection Agency under the Clean Air Act.
    In my written testimony, I have detailed the Railroad 
Commission's specific concerns about the recent EPA methane 
rules, the Clean Power Plan and the mercury and air toxic 
standards.
    Time constraints will prevent me from detailing the 
extensive concerns the commission has with the unprecedented 
EPA rulemakings outlined in that testimony. But you will find 
that these concerns are based on scientific fact and sound 
legal and economic analysis.
    You will also find that the underlying themes in EPA 
rulemaking under the Obama administration have been the 
consolidation of increased regulatory power in the Federal 
Government to the detriment of State authority and the 
circumvention of regulatory authority granted to the EPA by 
Congress.
    Clean Air Act rulemaking by the EPA during the Obama 
administration has been characterized by minimal interaction 
and consultation with Texas and other State regulatory 
authorities, underestimated or ignored compliance costs, 
overestimated, unjustified and exaggerated regulatory and 
environmental benefits, increased regulatory and economic 
burden on operation companies, especially the smaller operators 
who make up an overwhelming majority of the oil and gas 
industry in Texas, and the creation of one-size-fits-all 
regulations that ignore economic realities and the significant 
differences in regional operating conditions in State 
regulatory existence.
    History shows that decreases in emissions and improved 
environmental conditions came about as a result of innovative 
technological advances in market-driven efficiencies, not 
through the massive overreach of Federal bureaucrats.
    The Railroad Commission of Texas takes its role as a 
steward of State resources very seriously. Our rulemaking 
decisions are based on sound science and potential economic 
impacts to all Texans, mindful that it is from industry that 
these entrepreneurial ideas emerge.
    When businesses are forced to operate as bureaucracies 
which EPA seems intent on achieving through its unwarranted and 
overreaching rules, innovation is stifled and both consumers 
and the environment pay the price.
    EPA policies under the Obama administration have 
consistently striven to eliminate competitive energy markets 
while ignoring engineering realities, sound science and 
economic impacts.
    Simultaneously, EPA has circumvented both the authorities 
delegated to it by Congress and the rights of State regulatory 
agencies to establish their own rules.
    I believe you will find ample evidence of this in my 
submitted testimony. I respectfully urge this committee to 
prevent this administration from further assuming 
unconstitutional powers and imposing intrusive regulations on 
the States to ensure that our Nation continues to serve as the 
global energy leader we are today.
    Thank you for this opportunity to testify.
    [The prepared statement of Mr. Porter follows:]
    
    
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    Mr. Whitfield. Thank you, Mr. Porter.
    Our next witness is Mr. Lynn Helms, who is the director for 
the North Dakota Industrial Commission at the Department of 
Mineral Resources. Thanks for being with us, and you are 
recognized for 5 minutes.

                   STATEMENT OF LYNN D. HELMS

    Mr. Helms. Good afternoon, Chairman Whitfield and Ranking 
Member Rush, members of the subcommittee. Thank you for this 
opportunity to provide comments from the great State of North 
Dakota on EPA's regulatory activity during the Obama 
administration.
    North Dakota is ranked second in the United States amongst 
all the States in production of oil and gas. We produce 
approximately 430 million barrels of oil and 585 billion cubic 
feet of natural gas each year.
    The North Dakota Industrial Commission and Geological 
Survey oil and gas division regulate operations related to 
production of oil and gas and protection of the State of North 
Dakota's environment.
    I have highlighted in my written testimony nine specific 
actions since 2009 that have had major negative consequences to 
North Dakota regulatory environment and/or economy.
    It needs to be kept in context that those have been done in 
conjunction with seven regulatory actions by the Department of 
the Interior.
    Those nine are the March 2010 to present hydraulic 
fracturing drinking water study, the December 2010 class six 
CO2 rules, the February 2014 hydraulic fracturing 
using diesel fuel rule, the May 2014 hydraulic fracturing 
chemical disclosure rule, the May 2015 waters of the U.S., 
August 2015 Clean Power Plan, May 2016 RCRA lawsuit, June 2016 
methane reduction for new and modified sources and the June 
2016 methane reduction information request on existing sources.
    North Dakota has been left with no choice but to litigate 
three of those actions and we have been involved in that 
litigation. I want to focus the remainder of my time talking 
about two or three of those.
    In June of 2014, with the final rule published in August of 
2015, the Environmental Protection Agency under President 
Obama's climate action plan proposed to cut carbon pollution, 
known as the Clean Power Plan.
    This directly interferes with North Dakota's ability to 
reduce natural gas flaring in the State. In order to build the 
infrastructure to collect and process the natural gas that's 
coming from the Bakken formation, the industry needs 300 
megawatts of new electric generation.
    Instead of granting us the ability to produce or build 300 
megawatts of additional generation, the plan requires that we 
cut or retire 1.3 gigawatts of existing power generation in the 
State.
    The result of that is a cumulative increase of flaring of 
almost a trillion cubic feet of natural gas, a loss to the 
State of over $100 million in gross production tax revenue and 
a loss to the mineral owners of the State of $570 million in 
royalty income.
    North Dakota, along with 26 other States, sought and 
received a stay of this rule. North Dakota's reduction of 
carbon emissions under the proposed rule was 11 percent. That 
was going to be difficult but maybe achievable. Under the final 
rule, it was raised to 45 percent with no warning that that was 
coming.
    No credit for pre-2013 natural gas or wind installations, 
and I can guarantee you that power costs will not go down in 
the State of North Dakota.
    On June 3rd of 2016, a final rule proposing a suite of 
changes to the Clean Air Act for new and modified emission 
sources in the oil and natural gas industry was published in 
the Federal Register.
    This rule contains all sorts of undefined things like 
``technically achievable,'' ``technically feasible,'' 
``technically infeasible.'' It's a direct conflict with rules 
in the State of North Dakota for reducing natural gas flaring.
    The rule does not adhere to the statutory language in the 
Clean Air Act for defining sources of emission. It aggregates 
sources using a new quarter-mile standard which will cause 
problems for the State of North Dakota for regulating how oil 
well sites are placed in the State in order to minimize the 
footprint of those sites on the State's landscape.
    Finally, the proposed rule says it doesn't have any 
federalism implications. But that's not true. The proposed rule 
will conflict with numerous North Dakota current regulations.
    North Dakota is currently filing a petition for review of 
this harmful rule. And then finally, on June 3rd of 2016, the 
proposed information collection effort for oil and gas 
facilities was published in the Federal Register.
    Information requests for tens of thousands, maybe 100,000 
existing facilities, are being distributed across the country. 
Comments on this proposed information collection are due August 
2nd and we plan to submit extensive comments.
    Unfortunately, North Dakota has submitted extensive 
comments on all of these rulemakings and not one of them has 
been accepted by the EPA.
    Thank you for your time.
    [The prepared statement of Mr. Helms follows:]
    
    
    
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    Mr. Whitfield. Thank you, Mr. Helms.
    And our next witness is Mr. Robert Weissman, who is the 
president of Public Citizen, and Mr. Weissman, welcome and you 
are recognized for 5 minutes.

                  STATEMENT OF ROBERT WEISSMAN

    Mr. Weissman. Thank you very much, Mr. Chairman, and thanks 
to the gentleman from Virginia for joining us today and 
tolerating this panel discussion.
    I wanted to make three brief points in my 5 minutes about 
both the regulatory process generally and about the regulatory 
process as regards clean air rules and EPA action.
    The first point is that the overall benefits of regulation 
issued under both the Obama administration and the preceding 
Bush administration massively outweigh the costs. We have heard 
some reference to the best evidence about this earlier in the 
hearing.
    Generally, for overall regulation, in the low end benefits 
outweigh costs two to one but probably as much as fifteen to 
one. In the area of EPA rulemaking, benefits outweigh costs 
four to one or as much as twenty to one.
    And it should be said that I think the members of this 
committee are absolutely right to focus on individuals who may 
be displaced from jobs and recognizes there are real-life 
costs.
    But they ought to also recognize the real-life benefits. 
These aren't just dollars being saved. These are illnesses 
being averted, deaths being prevented, children who are not 
suffering asthma attacks. The benefits are real.
    As I discussed in my written testimony in some detail, 
retrospective looking at cost estimates shows that industry 
routinely overestimates costs and particularly in the 
environmental area and I will come back to that point later.
    Second point I want to make is about the issue of 
regulatory delay. Public Citizen last week issued a new study 
looking at the issue of regulatory delay and showing how slow 
our rulemaking process is.
    I think it's an area that this committee should look at 
because we actually need to do much better at getting rules out 
the door faster both to achieve their protective benefits and 
to avoid the problems of regulatory uncertainty.
    Our study found that economically significant rules are 40 
percent slower to be issued than other rules, that economically 
significant rules that are accompanied by a regularly 
flexibility analysis and an advance notice of proposed 
rulemaking take almost 5 years to issue, longer than the term 
of a president.
    We found that regularly delay as a problem is getting 
worse, considerably worse now under the Obama administration 
than it was previously under the Bush administration. It now 
takes almost 3.8 years for a major rule to be issued.
    We found that EPA and the Department of Energy are two of 
the slowest agencies at issuing rules and also, incidentally, 
that the Obama administration issued about 10 percent fewer 
rules than the Bush administration had done through this period 
of its term in office.
    Lastly, I want to address focusing more specifically on 
clean air rules and looking at those points and drilling down 
as how they relate in the clean air and energy industrial 
sector.
    Again, in this area, the benefits massively outweigh the 
costs, and just to focus on this area of the Clean Power Plan 
because I think there has been some uncertainty about it, the 
Clean Power Plan doesn't just generally have benefits that 
outweigh costs.
    Consumer cost--the consumer electric bill will go down 
under the Clean Power Plan. I'm just talking about the Clean 
Power Plan, and the reason for that is the consumers will be 
using less energy under the Clean Power Plan than they will be 
without the Clean Power Plan.
    So even under the conservative accounting of the EPA, and 
it is conservative accounting, the slight uptick in cost per 
unit will be offset significantly by reduced actual 
consumption.
    Our analysis--Public Citizen's analysis shows that that is 
true not just for the Nation as a whole but in every single 
State. In every single State, consumer electric bills will 
decline under the Clean Power Plan.
    I should say as well that we retrospectively that costs are 
overestimated. The Wall Street Journal talking about the 
mercury rule noted that some industry trade groups has argued 
that the mercury rule would prompt blackouts and skyrocketing 
electricity prices. Already we know by 2015 that neither 
scenario had materialized due largely to increased production 
of natural gas. Again, we see cost estimates oversold.
    If you look at the clean air rules you also see that key 
benefits are not captured in the EPA's regulatory impact 
analyses and that they often don't take the best choice in 
terms of advancing net benefits for society, choosing instead 
to focus on lowering cost, even though they are forsaking 
benefits for the American people.
    Looking at the rules--the actual rules that are issued by 
the EPA--the Clean Power Plan, mercury rule, the ozone rule--
actually you see that the rulemaking process is slower than the 
aggregate statistics I discussed earlier suggests because the 
EPA is so slow to begin rulemaking in the first place. The 
ozone rule is notable. But we just got issued a rule that was 
required actually under statute to initially be issued in 2002.
    And last, I think it's worth saying in the EPA context, as 
you look at the science and you look at the actual rulemaking, 
what is apparent is that the EPA massively trails the science.
    The EPA is not acting nearly fast enough or nearly 
aggressively enough based on what the science says and its 
statutory obligations.
    Thank you very much.
    [The prepared statement of Mr. Weissman follows:]
    
    
    
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    Mr. Whitfield. Thank you, Mr. Weissman.
    Our next witness is Mr. Charles McConnell, who is the 
Executive Director for Energy and Environment Initiative at 
Rice University, and he also was former Assistant Secretary for 
Fossil Energy at the Department of Energy.
    So, Mr. McConnell, welcome, and you are recognized for 5 
minutes.

               STATEMENT OF CHARLES D. McCONNELL

    Mr. McConnell. Thank you, Mr. Chairman and members. Glad to 
be here to testify about the Sections 111(b) and (d) of the 
Clean Air Act and the Clean Power Plan.
    But before I begin, I would like to quote a novelist, Saul 
Bellow, who said a great deal of intelligence can be invested 
in ignorance when the need for illusion is deep.
    And so for me, that is what is summarized by a lot of what 
I have heard most of the day today. I got three key issues that 
I think we need to be real clear about.
    One, these EPA rules, specifically the Clean Power Plan, 
does not serve environmental purposes. Calling this 
environmental regulation is disingenuous.
    Two, we don't have functioning interagency collaboration. I 
personally witnessed that at the DOE. And three, EPA's 
proposals actually harm energy sustainability. So the projected 
chart that hopefully we'll be able to show here will outline 
what the Clean Power Plan really does.
    But I would like to say before we go to that I am not here 
representing a political agenda or a political point of view. I 
believe in climate change. I am not a denier. CO2 is 
a forcing function for climate change.
    It's not solely the forcing function but it is a 
contributor and I think we have an obligation to do something 
about CO2. I served in this administration and 
believe in these fundamentals. But what we have with this plan, 
as this chart indicates in front of you, this gives us a 
worldwide CO2 concentration reduction of .2 percent.
    It is a projected whopping .01 degree impact to global 
temperature rise, and the sea level reduction impact is the 
amount equivalent to two human hairs, and it is all offset by 
three weeks of Chinese emissions. I find this plan stunningly 
unambitious.
    Our EPA Administrator actually acknowledged these facts in 
testimony but said we should not judge this plan by its 
ideological global leadership. It's in fact the cornerstone of 
U.S. climate policy to show the world, and I ask show the world 
what--that we are willing to make our energy more expensive, 
less reliable for de minimis CO2 impact?
    The fact that we have seven States bearing 40 percent of 
this burden? And energy costs will go up. That's according to 
PUC analysis across the country.
    This is a false sense of accomplishment. It is not 
meaningful climate policy, and I won't sit here and recognize 
it as such. It's a forced renewable portfolio standard that is 
a classic case of regulatory overreach.
    The EPA is required to seek expertise through interagency 
collaboration and public notice and comments which actually 
includes those actually conducting business. How could this 
program have been hatched?
    Well, I would submit to you that the interagency 
collaboration is illusionary. I led that office at DOE for 2 
years and bore personal witness to any number of circumstances.
    An example was a specific request made by EPA of my office 
to comment on a term they called resourced adequacy. And what 
is that? It's a theoretical analysis of theoretical installed 
capacity that might be utilized to provide theoretical system 
and supply reliability.
    It's a term to appear insightful but it really isn't. It's 
ideological mumbo jumbo.
    It's forcing closure of coal and eventually gas generation 
that we rely on. So why not ask of our PUCs to analyse real 
reliability and real onstream data? Why not model real 
reliability performance? I would submit it's because of the 
inconvenient truths.
    EPA rules don't promote real energy sustainability either. 
We have a framework at Rice that's being broadcast here where 
we ask three questions--is our energy more accessible, reliable 
and secure?
    Are we making our energy more affordable, cost effective 
and globally competitive and are we being more environmentally 
responsible? You got to answer yes to all three, and the CPP 
fails this miserably.
    I think we need to do three things. One, we need to embrace 
how impactful clean fossil technologies are to our environment. 
Not focus on shutting down the coal mining industry or the oil 
and gas industries that we believe in.
    The second thing we need to do is to meet these climate 
goals. We need carbon capture utilization and storage. It has 
been identified as the IPCC as the most critical technology for 
the world to meet climate targets and the CPP rules deter it.
    And the third thing is we need to encourage public/private 
partnership to enable new transformative technologies, not 
obstructing them with burdensome regulation.
    Let me close with a quote often attributed to Mark Twain 
and recently Laurence Peter from the Peter Principles. The 
question is sometimes I wonder whether the world is being run 
by really smart people who are putting us on or by imbeciles 
who really mean it.
    Thank you.
    [The prepared statement of Mr. McConnell follows:]
    
    
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    Mr. Whitfield. Thank you, Mr. McConnell. I appreciate that.
    At this time, I would like to recognize the gentleman from 
Texas, Mr. Olson, for 5 minutes of questioning.
    Mr. Olson. I thank the chairman, and welcome to our five 
witnesses. I hope you enjoyed the fireworks show from the first 
panel on July 6th the way I did.
    A special howdy to the chairman of the Texas Railroad 
Commission, David Porter, who I found out was born at the same 
hospital I was, the Madigan Army Hospital in Fort Lewis, 
Washington, many months before I was born, with all due 
respect.
    And also a special howdy to Chuck McConnell, the executive 
director of the Energy Environment Initiative at my alma mater, 
Rice University. Wise old owls are always welcome here.
    For Chairman Porter, Mr. Kavulla and Mr. Helms, the 
regulators on our panel, could you describe the--well, first of 
all, you have been in the position of having to implement EPA's 
regulations that address real world issues that either are 
unknown, crop up. It is out of control.
    My question is for all three of you, starting with you, 
Chairman Porter. Can you describe the impact you think the 
methane rules have on Texas energy production and, more 
broadly, can you say anything about Ms. McCabe's testimony that 
you disagreed with and to which you would like to respond to 
correct the record, so to speak?
    Chairman Porter, you are first at bat, sir.
    Mr. Porter. Definitely, and I address it in my written 
testimony. But I think the methane emissions rules would be 
very bad for the oil and gas industry in Texas and one of my 
biggest concerns is the effect that it would have on the small 
operators if they really small stripper wells are not exempted 
from those rules.
    Even a relatively large number of wells is represented by 
the stripper production, which is 10, 15 percent of total 
production but it still is a viable part of the Texas economy, 
particularly in the rural areas and small towns are support by 
the small oil and gas companies that operate there. So the 
economic impact is huge.
    Mr. Olson. Mr. Kavulla, your comments, sir, about what was 
raised or anything you want to straighten out with Ms. McCabe's 
testimony, or a fact check?
    Mr. Kavulla. Yes. Maybe just this persistent assertion that 
has come up that utility bills will lower in cost, which I 
don't find to be a credible assertion.
    I mean, the premise of environmental regulation, whether 
you agree with it or not, is that it serves to restrain some 
kind of economic production to produce public health benefits.
    Here there is an assertion that an industry that is in the 
business of offering its production, sometimes in competitive 
markets but other times under the regulation of PUCs, on a 
least cost basis is not obtaining economic efficiencies that 
you expect them to obtain.
    I don't think it's credible to say that consumers would 
just save money if an environmental regulator would stage an 
intervention into the market. To me, that doesn't make sense, 
and if true it means that utility commissions everywhere are 
not doing their jobs at which I know them for a fact to be 
requiring the low cost acquisition of energy efficiency as a 
matter of law.
    Mr. Olson. And Mr. Helms, back to you. I heard your 
comments in your opening statement about the methane emissions 
so I'm going to talk to Mr. McConnell.
    In your testimony you mentioned that many of EPA's rules 
fall short. They don't live up to the promises. That is 
something I have touched on a lot in recent hearings.
    Can you talk about the impact of the Clean Power Plan, how 
will that impact? Does it hit the target? Or as you put the 
slide up here, is it way off base?
    Mr. McConnell. It's wrapped up to be climate legislation. 
But in fact, as you can see from the chart, it doesn't do 
anything about the climate. I think, Mr. Congressman, in my 
view, the climate story is being written globally.
    Really, much outside the United States, in places like 
China we saw a chart earlier today with all the coal plants 
being developed all over the world, that's a reality. That is 
not something the EPA is going to stop. That is going to 
happen.
    And so for the United States to be a global leader we need 
to provide global technology leadership, not global ideological 
leadership with a plan that's wrapped up to be something that 
it isn't, to punish ourselves for no climate benefit.
    Mr. Olson. Amen. I was just in China and we saw their 
reports in the local press. They're building new power plants 
they know they don't need. They just want the jobs, more coal 
emissions. So, again, it's a global challenge. It's not just 
America's. Let's take care of our country first. I yield back.
    Mr. Whitfield. The gentleman yields back. At this time, I 
recognize the gentleman from Illinois, Mr. Rush, for 5 minutes.
    Mr. Rush. I want to thank you, Mr. Chairman.
    Mr. Weissman, I am quite interested in your views about the 
delays within the regulatory agency that is assigned to protect 
the American people.
    And you stated in your testimony that there have been more 
regs under the Obama administration than under the Bush 
administration. Did I hear you correctly?
    Mr. Weissman. No. Actually, about 10 percent fewer 
regulations under President Obama than President Bush.
    Mr. Rush. Fewer then. But in regards to the delays, what do 
you think that we should be doing about the delays?
    Mr. Weissman. Well, it is----
    Mr. Rush. What?
    Mr. Weissman. Yes, it is a confounding problem. I think the 
single source--single primary source of delay is excessive 
analytical requirements. So the Agency is to issue rules.
    If you actually look at the technical material they put out 
it's astounding in its volume and unfortunately there are 
several proposals in Congress to add analytical requirements, 
which would worsen the delay problem.
    So I think the first thing to look at is how to pare back 
some of the analytic requirements and the second is to hone in 
on the role of the OIRA, the Office of Information and 
Regulatory Analysis, and see how OIRA can be forced at minimum 
to adhere to the standard that the--to the schedule standards 
that it's supposed to abide by. It routinely does not turn 
rules around according to the schedule it's required to under 
the executive order.
    Mr. Rush. What does--what is the impact when the rules are 
designed to protect the environment and public health, safety 
and financial security and then there are also the regulations 
that are taking the longest to finalize and experience the most 
delays in the regulatory process, what is the impact on the 
community?
    Mr. Weissman. Yes. It is quite severe. For one thing, just 
as a business matter it's harmful because of--the biggest 
problem for industry turns out to be regulatory uncertainty, 
not knowing what the rules of the game are. Once the rules are 
established industry actually is pretty adept and nimble at 
adapting.
    But in terms of--but we also lose over time the benefits of 
those regulations. So, for example, the mercury standard is 
projected to save between 4,000 and 11,000 lives every year--
every year.
    If we wait 3 years, we are losing 12,000 lives. And we 
might not know who the names of those people are, but they are 
real people. They are not statistical abstractions.
    Mr. Rush. So are you saying, then, there is very little 
that we can do as a Congress to try to remove some of the 
delays and the hindrances to getting these rules and these 
regulations before the American people quicker?
    Mr. Weissman. No, I think there is a lot that Congress 
could do if it were so inclined. I would focus a lot on the 
role of OIRA and holding that agency to account to make sure it 
speeds the process and it does not needlessly and 
inappropriately delay a rule.
    I would look at the level of analytic requirements and 
reduce what agencies are required to do and I would also look 
at the problem of revolving door where people go from the 
regulated industry into the regulatory agency and then back to 
the regulated industry.
    I think that revolving door creates a culture where 
agencies are inclined to go slow because they are overly 
sympathetic to the regulated industry of which they once were a 
part of and may be seeking employment with in the future.
    Mr. Rush. I want to thank--Mr. Chairman, I yield back.
    Mr. Whitfield. The gentleman yields back. At this time, the 
chair recognizes himself for 5 minutes of questions.
    You know, from the questions of Ms. McCabe, I think it was 
quite obvious to everyone that there is a lot of emotion about 
this issue and when we talk about the Clean Power Plan, I think 
Mr. McConnell really touched on an important point, and that is 
that the result of the Clean Power Plan is so minute that it's 
almost meaningless.
    And yet, it's being pushed by the administration worldwide 
and made a big deal of at the Paris agreement. We signed the 
agreement, we implement this to fulfill our responsibility.
    So it appears the U.S. is being a leader in addressing 
climate change. But in reality, not anything is measurably 
being done to climate change and yet the U.S. is really being 
punished.
    And one of the problems that I have had with the Clean 
Energy Plan is the tortuous route that EPA went through to give 
itself the power to do what it was trying to do. And 
historically, in the U.S., the States, through the public power 
commissions, the utility commissions or whatever, which you 
represent, Mr. Kavulla, have had this authority to deal with 
the energy issues.
    And Ms. McCabe today responded oh, this is not a regulation 
about energy--it's a regulation about emissions.
    But in reality, this does give EPA authority to determine 
what power is being used in the power plants. Is that your 
impression, Mr. Kavulla?
    Mr. Kavulla. Mr. Chairman, I would agree with that 
characterization, yes. I think fundamentally because the rule 
does not rely on an assumption about a particular pollution 
control technology being the benchmark for the emission 
standard that is set for the emitting plants, and it instead 
relies on assumptions that coal plants will produce less often 
if there is simply more wind and natural gas, that it is 
essentially a regulation on the energy system broadly.
    Mr. Whitfield. And Mr. Porter, would you agree with that 
characterization?
    Mr. Porter. I would.
    Mr. Whitfield. And Mr. Helms, would you?
    Mr. Helms. Very definitely, and when you look at the 
methane reduction rules, Mr. Chairman, when you look at them 
policing the fact that you've got to get a Title 5 permit now 
for every multi-well horizontal drilling pad, you now have the 
environmental regulators deciding when and where oil and gas 
wells are going to be drilled as opposed to the oil and gas 
regulators.
    Mr. Whitfield. And Mr. McConnell, would you agree with that 
characterization?
    Mr. McConnell. Yes, I would, and we talked a lot this 
morning about flexibility and how it's really flexible. Well, 
that is disingenuous. It is not flexible.
    If you look at the thresholds and you look at the 
technologies and fuels associated with those thresholds it 
makes you choose wind or solar, period.
    You don't have an option in particularly the seven States 
that are bearing 40 percent of the load of the responsibility.
    Mr. Whitfield. Yes. And Mr. Weissman may not agree with 
this characterization but we all recognize the benefit of the 
Clean Air Act and we all understand the importance of the 
impact on health.
    But this is fundamentally changing the way we regulate 
energy production in America and I think that is one of the 
main reasons why the Supreme Court issued a stay because it was 
kind of done under guise of darkness and no one really focused 
on it, certainly not the public because it's so complicated.
    Some of you mentioned in your testimony how complex this 
is. And so that is the only point that I would make, and I'll 
yield back the balance of my time and recognize Mr. Green for 5 
minutes of questioning.
    Mr. Green. Thank you, Mr. Chairman. I want to thank the 
chair of the Texas Railroad Commission. Having served 20 years 
in the State legislature, I appreciate the work you do, and 
also Charles McConnell, who we flew up yesterday on the plane 
and what you do at Rice University and we talked--I'm on the 
other side of town. I have the University of Houston. So we are 
glad to partner with Rice on lots of things.
    I want to apologize to the panel. We actually have a 
conference committee going on on our main floor, so some of us 
are coming in and out during the hearing for votes and issues 
on that.
    But Chairman Porter, in your testimony, you raised concerns 
about the regulation of low production well sites. Just last 
week, the U.S. Energy Information Administration stated low 
production wells, or as we call them stripper wells, account 
for approximately 10 percent of U.S. production.
    EIA estimated there is approximately 380,000 low production 
wells operating in the U.S. whereas there are 90,000 non-
stripper wells. The production from each well would limit any 
emissions, however. The sheer volume of wells would raise some 
concern about the potential impact. Can you explain a bit more 
about your concerns and why you think EPA should exempt these 
wells?
    Mr. Porter. The reason I think EPA should exempt these 
wells, and there are studies being done at this time, is that 
the impact on each individual well was extremely low because of 
the volume.
    And I think the reason it should be also is the economic 
impacts on both energy production for the Nation and, of 
course, the economic impact on the State of Texas and the small 
communities and the small independent oil men that are the 
backbone of most of rural Texas would be dramatically impacted 
by the cost of complying with the same type of emissions 
standards that you'd have on the large horizontal well at this 
time.
    Mr. Green. Well, and I also understand the difference 
between what traditionally was large horizontal as compared to 
what we are doing with the fracking in south Texas and even 
before there, relatively quick wells that you get production 
out and you move them.
    Director Helms, in your testimony, you write that the State 
of North Dakota is ranked number two in the United States in 
production of oil and gas and I would like to remind everyone 
that Texas is still number one, after North Dakota, California 
and Pennsylvania. So we know a little bit about oil and gas.
    Recently, the EPA identified the next issue of area they 
address as methane from oil and gas production. When I drive 
through south Texas I see there is no one in the oil and gas 
sector that wants to see that flaring because that is product 
going out and the royalty owners and I know the--don't want to 
see that if they are not getting their royalty on it.
    And I also know that the reason companies flare gas is 
because they lack the infrastructure required to capture it or 
send it to the market.
    Can you talk a little bit about the infrastructure 
challenges North Dakota faces and how building, gathering lines 
would help alleviate the issue of methane flaring?
    By the way, I have never not lived on a pipeline easement 
in Houston, Texas in my life and if Texas doesn't have the 
infrastructure then I don't know of anybody who doesn't but we 
do have infrastructure problems with those in south Texas.
    Can you talk about what North Dakota has been trying to 
with the gathering lines?
    Mr. Helms. Yes. Thank you, Representative Green.
    North Dakota was faced with the largest oil field in the 
world, the Bakken aerial extent, and it was discovered fairly 
recently the infrastructure did not exist for gathering and 
processing the natural gas.
    We found ourselves in 2012 flaring 36 percent of the 
natural gas. We needed to encourage----
    Mr. Green. Did the State not receive any tax benefit on 
those either?
    Mr. Helms. Well, no tax benefit, no royalty benefit on 
flared natural gas. Absolutely. And so we implemented rules 
through the industrial commission to reduce that natural gas 
flaring.
    I am happy to report it's down to 8 percent now. But the 
Clean Power Plan and the methane rules are going to interfere 
directly with North Dakota's plan for reducing its gas flaring 
by limiting the power that we have available for powering those 
natural gas processing plants and by changing the configuration 
of the oil field requiring us to add three to four times as 
much pipeline in the ground in order to reach these smaller 
pads that are going to be required under the methane reduction 
rules.
    And so they work exactly counter to the reasonable purpose 
of reducing flared methane and reducing methane leaks.
    Mr. Green. Well, did EPA take into consideration, in my 
last eight seconds, what North Dakota has been doing already in 
reducing it?
    Mr. Helms. Congressman Green, there was not one single bit 
of consideration given to our comments with regards to that 
fact, and therefore we are petitioning them for reconsideration 
of the rule.
    Mr. Green. And, again, for the record, it seems like if you 
are already reducing it and you have a plan that you've done it 
without EPA why would they not accept it?
    Mr. Chairman, I know I'm out of time.
    Mr. Whitfield. I thank the gentleman. I recognize the 
gentleman from Ohio for 5 minutes.
    Mr. Latta. Well, thank you, Mr. Chairman, and thanks to the 
panel for being with us today, this morning, this afternoon. 
Appreciate it.
    Mr. McConnell, if I could ask you the first question. It 
has been said that carbon capture utilization and storage and 
enhanced oil recovery might only be a niche in a full scale 
CO2 storage opportunity to require much more than 
EOR geological opportunities.
    Is CCUS a niche, or is there a greater opportunity, and 
just to follow-up on that, if it is a greater opportunity, what 
kind of actions will it take from us to make the most of this 
opportunity?
    Mr. McConnell. Well, clearly, the answer to your second 
question is we need to encourage the development, set up an 
infrastructure in this country that actually promotes the 
development of a technology that needs continual investment in 
R and D.
    But it's interesting, we're talking about research and 
development and deployment of something that the EPA has 
already determined to be commercially available and that is 
also part of disingenuous conversation because if we still have 
R and D dollars being put against that technology how could it 
be commercially ready?
    It's unimaginable. But to your first question, is it a 
niche? Absolutely not. I took over at the DOE in 2011 as we had 
done the national carbon sequestration mapping across this 
country, looking at storage opportunities.
    But I suggested to our national energy technology 
laboratory that we needed to find where the oil deposits were 
in this country because that is where we could get economic 
benefit from carbon capture, utilization and storage and be 
able to safely and permanently store those CO2 
emissions in that formation.
    So you get a perfect two-fer. You get a business 
development opportunity for jobs, manufacturing and growth and 
you get a climate benefit.
    But instead what we've done is we've looked into these 
regulations with the EPA now putting onerous responsibilities 
onto oil and gas operators that is actually slowing the 
implementation of what the IPCC has already determined to be 
the most important global technology in our march toward 
achieving climate targets globally.
    There are oil opportunities off the shore of China, off the 
North Sea, in the Gulf and around the world where this can be 
deployed and taken globally to make a globally impact.
    Mr. Latta. Thank you very much.
    Chairman Porter, I think you have testified before us 
before. I think you're sitting in the same seat, if I remember 
correctly. But, you know, I would like to just go back to your 
testimony because, again, listening to Ms. McCabe's testimony 
and talking about, you know, going out and talking with a lot 
of folks around the country.
    But you know, looking at your testimony and I know you 
didn't have a chance to run through some of these but I'm going 
to just run through a couple of them real quick.
    Minimal interaction and consultation with Texas and other 
State regulatory authorities underestimated or ignored 
compliance costs, overestimated unjustified exaggerated 
regulatory environmental benefits, increased regulatory and 
economic burden on operating companies in a one-size-fits-all.
    I don't see from your comments that she must have talked to 
you. Was there any kind of a cost benefit that was done for the 
State of Texas of these regulations going into place?
    Mr. Porter. Are you asking about the State of Texas or the 
Federal Government?
    Mr. Latta. Well, I'm just asking if the State of Texas got 
consulted with all these different issues that you brought up 
in your written testimony.
    Mr. Porter. No, not directly. I mean, of course, like 
everyone else we had the opportunity to make comments and we--
the Railroad Commission quite often do make comments on Federal 
regulations and for the most part they seem to be generally 
ignored. Occasionally, something is picked up. But----
    Mr. Latta. So you don't think there was much interaction 
that--or really listening to what you all had put forward to 
the EPA then?
    Mr. Porter. Not a lot. I will say as far as our interaction 
between the EPA I was first elected to office in 2010, came in 
2011. Interaction was very unpleasant with the EPA at that 
point in time between the Railroad Commission.
    In the last few years, it has gotten more civil. I'm not 
saying that they listen to us a lot. But at least the lines of 
communication are a little more open, and it's a little more 
civil than it was when I first came into office 5 and a half 
years ago.
    Mr. Latta. Mr. Helms, how about the same question? Do you 
have a lot of interaction? Do they listen to you?
    Mr. Helms. Congressman Latta, very little interaction, and 
as I stated in my comments, none of our recommendations on any 
of these rules were implemented.
    Speaking to the carbon capture and storage, North Dakota is 
the only State who has applied for primacy. We did that back in 
June of 2013. We have progressed through the entire process, 
and our primacy application has been sitting on the 
Administrator's desk since July 14th of 2014 with no action.
    Mr. Latta. OK. Thank you very much.
    Mr. Chairman, my time has expired and I yield back.
    Mr. Whitfield. I thank the gentleman.
    Now I recognize the gentleman from Missouri, Mr. Long.
    Mr. Long. Thank you, Mr. Chairman.
    Mr. Kavulla, in Missouri we get 80, 85 percent of our power 
from coal, just to say that kind of as a precursor here. But 
you mentioned in your testimony that the EPA has interpreted 
the Clean Air Act to give it the power to plan the resource mix 
for U.S. power sector.
    Could you expand on this? What does this mean for States 
having to implement the Clean Power Plan?
    Mr. Kavulla. So in States like Missouri as well as Montana 
and other heavily coal-dependent States there is no viable 
pathway to come into compliance with the Clean Power Plan's 
goal unless you basically build natural gas and renewable 
infrastructure in order to displace some of your coal output.
    That's the premise of EPA's goal setting or requirement 
process in the regulation and I expect that that would be the 
pathway toward compliance that most utilities would have to 
find themselves in unless and until something like carbon 
capture and sequestration becomes commercially available on a 
wide scale.
    Mr. Long. Are there any functioning plants right now of 
carbon sequestration up and running operations? I know when we 
did this a year, a year and a half ago there weren't any. Are 
there today?
    Mr. Kavulla. In North America, I believe there might be one 
in Saskatchewan. There is one potentially coming online that's 
been the subject of a great deal of media scrutiny recently in 
Mississippi.
    But in general, I wouldn't consider that a commercially 
available technology. I'll put it this way. I am not aware of 
any regulated utility or any utility in the competitive sector 
which is currently proposing to its regulator the adoption of 
carbon capture and sequestration as the least cost alternative.
    Mr. Long. How about the reliability? Can you discuss the 
impact of the Clean Power Plan? What effect it will have on 
electric reliability if many of these coal-fired power plants 
are shut down to comply?
    Mr. Kavulla. In my view, it could be significant and this 
is something where interagency consultation was very important 
and may not have happened as well as it should have between the 
Federal Energy Regulatory Commission and the EPA.
    The FERC is the agency responsible for the reliability of 
the whole electric system and particularly in those areas, 
especially in the eastern United States, that rely on 
competitive wholesale markets to assure enough resources for 
the reliability of the system. The sudden unavailability of 
some of those resources with nothing to step into the breach 
may have real implications.
    Mr. Long. Do you think that the EPA is providing adequate 
flexibility for States to meet the Clean Power Plan standards 
and if not what impact is this having for State utility 
commissions?
    Mr. Kavulla. My own personal view is that they are not. 
Montana has, as a percentage, the most significant reduction 
goal--47 percent reduction in carbon dioxide. And frankly, when 
you have that monumental of a requirement the flexibility is a 
meaningless concept.
    I mean, you can only close down existing coal plants before 
the end of their useful lifespan in order to comply unless 
somehow there are available allowances to sell from others. So 
far, it doesn't necessarily seem that there will be.
    Mr. Long. In the next 5 to 10 years, if the EPA went 
forward with an updated Clean Power Plan with more stringent 
standards, what impact would this have on electric reliability?
    Mr. Kavulla. Congressman, it's hard to say. I mean, it's 
difficult enough to plan just for this regulation, much less 
anticipate what the EPA may or may not do.
    Mr. Long. I know when southwest Missouri down in the Joplin 
area whenever I travel and I look at these power plants where 
they have had to go in and spend hundreds of millions of 
dollars updating to the latest EPA regulations, which might 
take 6 to 8 years before you even know if the regulation is 
going to be implemented or not, it's mind boggling.
    And then I'm also reminded of a recent trip that I made to 
Midland, Texas, to a large oil and gas outfit down there, and, 
after we toured one of their drilling rigs, got up on top of 
that and looked at that, we went and drove down this 2-mile--it 
seemed like 2 miles; not sure it was that long--driveway back 
into where they gather all the gas and oil and sort it out and 
truck it out and pipe it out and whatever they are going to do 
with it.
    And there was a herd of cattle there, about 10 head of 
cattle, in this pretty small area and there was a sheriff's car 
there. And they said, well, what's the sheriff's car doing. So 
then they went, people have been rustling our cattle. I 
thought, how can you rustle 10 head of cattle, you know. But 
anyway, I said, so what are the cattle--they're kind of in 
middle of nowhere.
    They said, well, that's our example, that those 10 cows put 
out more methane gas than our entire operation here of oil, 
gas, drilling, and piping, and sorting it all out.
    So I am out of time. I yield back.
    Mr. Griffith (presiding). I thank the gentleman and now 
recognize myself for 5 minutes. Let me do a little clean-up if 
I can.
    Mr. McConnell, you said earlier that the analysis by PUCs 
across the country show that electric rates would go up for the 
folks back home. PUC is public utility companies or company?
    Mr. McConnell. Yes.
    Mr. Griffith. Yes. And their data indicates that their 
electric rates are going to go up under these regulations. 
Isn't that correct?
    Mr. McConnell. As much as 40 percent in the seven States 
that are going to bear 40 percent of the responsibility. Yes, 
sir.
    Mr. Griffith. And I don't think my State, Virginia, is one 
of those seven States. But our State corporation commission 
indicated previously that this would increase electric rates in 
Virginia as well.
    So that when folks talk about the rates going down you have 
to come up with a formula somewhat like Mr. Weissman did which 
show that while the per unit cost, I believe you said, the cost 
per unit goes up but we anticipate the people will use less 
electricity.
    Do you see any indications that people are going to use 
less electricity with all of these electric cars and electric 
gadgets than----
    Mr. McConnell. It's kind of unimaginable, isn't it, 
Congressman? Yes, and so while we look at people in America and 
consider the fact that we are more energy intensive than we 
ever have been as a society, we will continue to be so. And 
then more importantly, think about all the developing countries 
around the world and how energy intensive they are going to be 
over the next 15 to 20 years.
    And this formula for reduction through the reduction of 
power that people are going to have, kind of unimaginable while 
we all pull out our cellphones and text and do all the things 
that we do now, right.
    Mr. Griffith. Yes, sir. I understand that.
    Now, also I thought it was interesting you talked about 
that there wasn't interagency communication and so forth and I 
know what one of the things that the DOE is talking about now 
is research parity between the fossil fuels and the renewables 
and we're not getting there and in fact there has been some 
push downward.
    And wouldn't that help with what we have been talking about 
with the CCUS, the carbon capture and storage programs? 
Wouldn't it help if we had parity on clean coal technologies? 
Because for places like Montana, as we just heard Mr. Kavulla 
say, it's going to be very difficult for them to meet any of 
these targets because they are so heavily dependent on coal.
    Mr. McConnell. Eighty percent of our energy comes from 
fossil fuel and yet we continue to push research down in the 
fossil area, for some strange reason, and we are doubling down 
on the renewable portfolio, which represents about 3 percent of 
our energy in this country. It is stunning, actually.
    And the other thing that's stunning is while this EPA will 
continue to promote carbon capture, utilization and storage as 
a commercially demonstrated technology, we are still having 
conversations about an R and D budget. That is a bit 
disingenuous, isn't it?
    Mr. Griffith. Well, I will let you do the testifying here 
today. But those who have seen my statements in the past would 
know I'd probably agree with you.
    Let me also talk about ``applied for primacy.'' I just want 
to make sure that folks back home know what that means.
    Mr. Helms, you said earlier that the State of North Dakota 
had--in regard to carbon capture, it had applied for primacy in 
2013. The paperwork was all finished and sitting on the 
Administrator of the EPA's desk in 2014, and yet no action yet. 
What does that mean, ``applied for primacy''?
    Mr. Helms. Well, Mr. Chairman, when you look back at the 
history of EPA, the first 20 years that this Agency existed it 
did almost everything through State primacy programs, and those 
programs were incredibly effective.
    Starting in about 1990, Congress and the EPA chose to go 
with top-down prescriptive regulation through massive one-size-
fits-all national programs. That has not served the Nation 
well.
    Primacy is a situation where the EPA sets a basic 
framework. States apply to regulate under that framework. They 
get approval of their program through EPA in that framework, 
and they move ahead with regulation. That is usually an 
underground injection control, air quality, all of those 
issues.
    Mr. Griffith. And when they talk about this--because my 
time is running out--when they talk about the successes that 
the EPA has had in the first decades of its existence it's been 
done under that process with the primacy of the States, with 
the EPA setting up guidelines and the States following through.
    And now over the last five or six years or so that EPA has 
moved away to a more Washington one-size-fits-all approach. Is 
that what you are saying?
    Mr. Helms. That is absolutely correct, Mr. Chairman, and 
that is exactly why these rules don't work, and they can never 
work because they are not being done State by State through 
primacy programs.
    Mr. Griffith. And I appreciate that.
    I will say just as an editorial comment at the end that I 
appreciate Mr. Weissman's testimony, and while we won't agree 
on everything, there are some things that we would probably 
agree on that might surprise him and others.
    I don't agree on one thing that he said, though. He talked 
about the mercury rules and said that the projections were 
horrible and everything was going to happen, but by 2015 
nothing had happened. The rule didn't fully implement until 
2015. We didn't, fortunately, get a polar vortex this last 
winter like we had in 2013-14.
    I was reading an article this week about the deer 
population in Virginia and how badly it had been affected by 
the polar vortex of 2013-14. I would still submit that some of 
those problems--and I hope we won't get a polar vortex--but 
some of those problems brought about by shutting down our coal-
fired power plants will show up. Should we be so unfortunate as 
a nation to get the same kind of conditions that we had in the 
winter of 2013-14 in the next couple of winters, sure, by 2025 
we'll probably be OK because we will have repaired the damage 
at great cost to the ratepayers.
    With that, my time is up, and I yield back. I do have some 
business to take care of.
    I would like to enter into the record correspondence from 
the committee dated December 14, 2011, to EPA regarding its 
benefit analysis and EPA's written responses dated February 
3rd, 2012, and May 4, 2012. This correspondence relates to 
EPA's use of particulate matter co-benefits in its benefits 
estimates.
    Also, I would ask unanimous consent that the slides that 
were shown on the television today be submitted for the record. 
And then there is some closing language we have to say about 
other stuff in there.
    There we go. And also that the record would remain open for 
10 days for any Members that wish to ask questions or submit 
other documents.
    Mr. Rush. No objection, Mr. Chair.
    Mr. Griffith. Thank you very much. Anything further?
    All right. With that being said, that would end our hearing 
today. Thank you all so much for your testimony.
    [Whereupon, at 1:12 p.m., the committee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    This subcommittee has held a number of hearings on specific 
EPA regulations affecting the energy and industrial sectors, 
but today we are going to take a comprehensive look at the over 
3,900 final rules EPA has published in the Federal Register. 
Many of the regulations on their own threaten jobs and 
affordable energy in Michigan and areas across the country, but 
it's the cumulative effect of regulations that matters most.
    Regulated energy producers, manufacturers, and other job 
creators don't get to pick and choose which EPA requirements to 
comply with--they must meet them all. Likewise, State agencies 
responsible for maintaining affordable and reliable electricity 
supplies and overseeing energy production must somehow find a 
way to implement all of EPA's regulations and mandates, no 
matter how unworkable, costly, or ill-suited to that State's 
particular circumstances.
    Setting aside legal questions raised by certain rules, the 
practical challenges associated with implementing the onslaught 
of new energy-related regulations has never been greater. The 
Clean Power Plan alone imposes an unprecedented set of new 
mandates, and in conjunction with Utility MACT, ozone, and 
other major rules already in place, EPA is dramatically 
expanding the burden on energy producers and users.
    Beyond the costs, EPA is also imposing unprecedented 
control. The Agency has effectively bypassed the Department of 
Energy, the Federal Energy Regulatory Commission, and the North 
American Electric Reliability Corporation, who have 
longstanding statutory roles in setting energy policy. Perhaps 
most concerning, the Agency has sidestepped Congress, which 
never authorized the expansive cap-and-trade scheme that has 
become the centerpiece of the Obama EPA agenda.
    The problem is not just that EPA lacks the statutory 
authority to dictate energy policy, but that is also lacks the 
competence to do so. For example, EPA's current and future 
proposed rules are contributing to an evolving power sector 
transformation and forcing many coal-fired power plants to shut 
down which raises serious concerns about electricity costs and 
reliability that the Agency is not equipped to confront. EPA 
lacks the technical and policy expertise of, and should not be 
substituting its own judgments for, the experts at FERC, NERC, 
and State public utility commissions.
    And, unlike FERC and State public utility commissions, the 
Agency has no obligation to keep electric rates competitive. 
These increases would be even greater if not for affordable 
natural gas--something that is now under threat from stringent 
new EPA regulations targeting emissions from natural gas wells.
    EPA's regulations have also been inundating American 
manufacturers. Not only do they face uncertainty regarding 
future electric rates and reliability, but many also face 
direct regulation under complex and unworkable rules. From 
bricks to cement to automobiles, the Obama administration has 
targeted many made-in-America products. On top of all that, the 
latest ozone rule will further add to operating costs at most 
existing facilities while making it very difficult to open a 
new factory. And it is important to remember that the 
cumulative burden EPA imposes here in the U.S. is far more 
stringent than most of our industrial competitors, so American 
manufacturers are being placed at a global disadvantage.
    The consequences are significant, and President Obama is on 
his way to becoming the first president in modern times to not 
have at least one year of 3 percent economic growth. It is 
important that we understand the impacts of these regulations 
affecting our critical energy and industrial sectors.


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