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






                    EXAMINING THE IMPACTS OF EPA AIR
                  AND WATER REGULATIONS ON THE STATES
                        AND THE AMERICAN PEOPLE

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                              THE INTERIOR

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 26, 2015

                               __________

                           Serial No. 114-20

                               __________

Printed for the use of the Committee on Oversight and Government Reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     JASON CHAFFETZ, Utah, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
TIM WALBERG, Michigan                    Columbia
JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
RON DeSANTIS, Florida                TED LIEU, California
MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
MARK WALKER, North Carolina          MARK DeSAULNIER, California
ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
JODY B. HICE, Georgia                PETER WELCH, Vermont
STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama

                    Sean McLaughlin, Staff Director
                 David Rapallo, Minority Staff Director
                       Joseph Brazauskas, Counsel
               Drew Colliatie, Professional Staff Member
                    Sharon Casey, Deputy Chief Clerk
                      Subcommittee on the Interior

                    Cynthia M. Lummis (WY), Chairman
Paul A. Gosar (AZ)                   Brenda L. Lawrence (MI), Ranking 
Blake Farenthold (TX)                    Member
Ken Buck (CO), Vice Chair            Matt Cartwright (PA)
Steve Russell (OK)                   Stacey E. Plaskett (VI)
Gary J. Palmer (AL)                  Jim Cooper (TN)





















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 26, 2015................................     1

                               WITNESSES

Mr. Tim Fox, Attorney General, State of Montana
    Oral Statement...............................................     5
    Written Statement............................................     8
Ms. Leslie Rutledge, Attorney General, State of Arkansas
    Oral Statement...............................................    13
    Written Statement............................................    15
Ms. Anne E. Smith, Ph.D, Senior Vice President, NERA Economic 
  Consulting
    Oral Statement...............................................    27
    Written Statement............................................    29
Mr. David Harrison, Ph.D, Senior Vice President, NERA Economic 
  Consulting
    Oral Statement...............................................    51
    Written Statement............................................    53
Ms. Susan F. Tierney, Ph.D, Senior Advisor, Analysis Group
    Oral Statement...............................................    80
    Written Statement............................................    82

                                APPENDIX

Statement of Ms. Lummis, Chairwoman of Subcommittee..............   104
Statement of Mrs. Lawrence, Representative.......................   106
2014-06 Henry Waxman ``The Clean Air Act's Track Record''........   109
2015-02-26 National Wildlife Statement...........................   112
2014-06-12 Tsirigotis-EPA to Coyote-Crow MT......................   120
Links to:
    2014-07-31 NERA ``Assessing Economic Impacts of a Stricter 
      National Ambient Air Quality Standard for Ozone''..........   122
    2014-10-16 NERA ``Potential Impacts of the EPA Clean Power 
      Plan''.....................................................   122
    2015-02-26 ``Economic Impacts of a 65 ppb National Ambient 
      Air Quality Standard for Ozone''...........................   122
    2015-02-26 NERA ``Economic Impacts of a 65 ppb National 
      Ambient Air Quality Standard for Ozone''...................   122
2015-02-26 National Association of Realtors Statement............   143
Thomas Easterly-IDEM Statement...................................   159
AG Comments-EPA Carbon Emission Guidelines.......................   162

 
 EXAMINING THE IMPACTS OF EPA AIR AND WATER REGULATIONS ON THE STATES 
                        AND THE AMERICAN PEOPLE

                              ----------                              


                      Thursday, February 26, 2015,

                  House of Representatives,
                      Subcommittee on the Interior,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:07 p.m. in 
room 2154, Rayburn House Office Building, the Honorable Cynthia 
Lummis [chairwoman of the subcommittee], presiding.
    Present: Representatives Lummis, Chaffetz, Buck, Palmer, 
Gosar, Russell, Lawrence, Cartwright, and Plaskett.
    Ms. Lummis. Without objection, the Chair is authorized to 
declare a recess at any time.
    Good afternoon and welcome to the first hearing for the new 
Subcommittee on Interior of the Oversight and Government Reform 
Committee.
    I am pleased to be holding this hearing on the impact on 
the American people of three proposed EPA rules.
    Over the last year, the EPA has issued rules that are 
unprecedented in scope and among the most expensive in history. 
This overreach will impact families and businesses across the 
country.
    The first rule we will examine is the redefinition of the 
term waters of the United States under the Clean Water Act. 
Despite two Supreme Court rulings that define the maximum reach 
of the Clean Water Act, the EPA has proposed a rule that will 
increase its regulatory authority far beyond current policy.
    It would allow the EPA almost unconstrained access to 
regulate and burden landowners with endless environmental 
studies. Even more disturbing, the Waters of the U.S. rule 
still does not provide the regulatory certainty that farmers, 
small businesses and homeowners need.
    Instead, it will result in more red tape, displace local 
management programs and shift limited resources away from 
working environmental programs.
    We will also examine two EPA Clean Air Act rules that would 
fundamentally alter the relationship between States and the 
Federal Government. These rules would result in massive 
consumer electricity price increases and trillions of dollars 
in lost economic activity.
    These rules are particularly damaging to my home State of 
Wyoming where we produce over 40 percent of the Nation's coal. 
They would force the retirement of coal power plants across the 
country, significantly increasing electricity and natural gas 
prices and threatens the reliability of the electric grid.
    The first of these air regulations is called the Clean 
Power Plan. This proposed rule would require the regulation of 
existing power plants and unconstitutionally expand EPAs 
authority into the management of States energy generation.
    It does this through so-called beyond the fence measures 
that regulate more than just power plants. These measures would 
mandate energy efficiency requirements on individual 
households. Compliance costs of the Clean Power Plan could be 
as high as $479 billion by 2030 and 43 States would face double 
digit electric price increases.
    This massive cost comes with extremely limited benefits and 
violates the principles of federalism.
    The second regulation we will examine is the EPAs proposal 
to update the air quality standards for ground level ozone. 
This benign sounding rule is actually widely considered to be 
the most expansive and expensive rule in the history of the 
United States.
    Independent experts estimate the total possible cost of the 
rule at $1.7 trillion and 1.4 million job equivalence lost per 
year. This rule is so burdensome that some national parks, the 
Nation's most pristine environments, will be found to violate 
the new standards.
    Today, we will hear from two State Attorney Generals, who 
will explain the impact these rules will have on the States. 
They will also discuss the EPAs utter lack of consultation with 
Native communities despite clear legal requirements.
    We will also hear from two economists who raise significant 
questions about EPAs cost estimates. Just as importantly, these 
economists will also testify that the EPA is systematically 
overestimating the benefits of these rules by double counting 
benefits from other rules, ignoring basic accounting practices 
and projecting benefits out hundreds of years.
    Ms. Lummis. With that, I would like to thank the witnesses 
in advance of your testimony. We are so grateful that you are 
here.
    I now recognize Mrs. Lawrence, the Ranking Member of the 
Subcommittee on the Interior, for her opening Statement. Mrs. 
Lawrence, I am so pleased to be serving with you. I so enjoyed 
our visit the other night. Welcome to our collaboration. The 
microphone is yours.
    Mrs. Lawrence. It is an honor to be a Member of Congress 
and to sit with the leadership that we have as the Chair for 
this committee.
    Thank you, Madam Chairwoman. I want to thank you for 
holding this hearing.
    I want to thank our witnesses for their testimony today.
    In a special message to Congress in 1970, President Nixon 
stated: ``As concern with the condition of our physical 
environment has intensified, it has become increasingly clear 
that we need to know more about the total environment, land, 
water and air.'' Indeed, the present government structure for 
dealing with environmental pollution often defies effective and 
concerted efforts.
    In proposing that the Environmental Protection Agency be 
set up as a separate, new agency, ``I am making an exception to 
one of my own principles that as a matter of effective and 
orderly administration, additional new, independent agencies 
normally should not be created. Because environmental 
protection cuts across so many jurisdictions and because 
arresting environmental deterioration is of great importance to 
the quality of life in our country and the world, I believe 
that in this case, a strong, independent agency is needed.''
    I want to start by saying that the EPA was not established 
to be red or blue. It was established to be green. It was 
established to help us protect our environment, our citizens 
and our children.
    First, I would like to address the Clean Water Act which 
has been successful in past years ensuring that Americans have 
clean and safe water. Those of us who have been involved and 
informed know that there are some challenges across our country 
that are stepping up now and that we need to address.
    I believe we all agree that clean water is vital to each of 
us for our drinking supply, for safe places to swim, for 
healthy fish, for growing crops, for beverage manufacturing, 
for energy generation and for a host of other uses.
    The proposed EPA rule would improve the process for 
determining what types of water are and are not covered by the 
Clean Water Act. Contrary to the claim of detectors, the rule 
would clarify protection for streams and wetlands that form the 
foundation of the Nation's water resources.
    It will not result in an expansion of Federal authority. 
Only waters that have been historically covered by the Clean 
Water Act are covered by the rule.
    Turning our attention to the dangers of ozone exposure is 
equally important. More than 1,000 new studies demonstrate the 
health and environment harms of ozone. Exposure can cause 
difficulty breathing and airway inflammation. Ozone exposure is 
likely to cause permanent death from lung disease.
    Children often suffer from a disproportionate burden of 
ozone related health impacts because their lungs and other 
organs are still developing. Nearly 26 million people have 
asthma in the United States, including 7.1 million children.
    Fortunately over 40 years ago, Congress passed the Clean 
Air Act to protect public health and the environment.
    Recently, EPA proposed new national air quality standards 
for ozone to lower the ozone in the atmosphere from 75 ppb to a 
range of 65 to 70 ppb by the year 2030. The Clean Power Plan 
has also been proposed in order to limit the amount of carbon 
pollution power plants will emit. Likewise, the Waters of the 
United States rule was proposed to clarify which bodies of 
water are or are not covered by the Clean Water Act.
    History tells us that environmental regulations do not 
cause an economic calamity. In fact, in the past 40 years, the 
CDP has increased by 212 percent since the Clean Air and Clean 
Water Acts were enacted.
    Clean air pollutions have decreased by 70 percent. Instead 
of killing jobs, as some opponents have claimed, the pollution 
control industry has generated more than $300 billion in 
revenue and $44 billion in exports and supported 1.5 million 
jobs.
    None of the inflated costs of implementing these laws ever 
materialized. Industry innovation improved and thrived in 
response to new demands.
    In closing, there have been numerous processes in the past 
few decades to clean up the air and water but more work is 
necessary to adequately protect public health from ozone, 
excessive carbon dioxide and water pollution and to mitigate 
the efforts of climate change.
    I hope that we look at this industry and recognize the 
oppositions of some industries based on really scare mongering. 
History shows us that cleaning the air and water are both good 
for public health, good for our economy and good for our 
country.
    Thank you.
    Ms. Lummis. I thank the gentlelady from Michigan and look 
forward to our collaboration. Our districts just about couldn t 
be more different than two districts in the United States. She 
represents northern areas of Detroit, very urban, and my State 
of Wyoming is the most sparsely populated in the Nation, rich 
in clean air, clean water and natural resources.
    This will be fun. I am very much looking forward to working 
with you. Thank you for your opening remarks.
    I am now pleased to recognize Mr. Chaffetz, the Chairman of 
the full committee, for his Statement. Thank you, Mr. Chairman, 
for creating this subcommittee and giving us an opportunity to 
look at some issues that are so impactful for our citizens. The 
time is yours.
    Mr. Chaffetz. Thank you. I thank you for being the 
chairwoman of this committee. We reconfigured this to give some 
focus not only between the Department of Interior but also the 
Forest Service, the Department of Energy and the EPA so that 
we, as the oversight committee, can look at the far reaching 
breadth rather than just have it siloed in one committee or 
another.
    I appreciate all the members who will participate on these 
panels and in all these discussions.
    I too am from the intermountain west. We are proud 
neighbors of Wyoming. Where we produce a lot of this energy. We 
have an abundance of coal, natural gas and oil shale. Yet every 
time I turn around, there seems to be some reason, some other 
implication that is put out there by the EPA.
    We love the west; we love our mountains, our air, our water 
and our streams. I do think there is a role to create some 
bounds and rules of the road, but I do worry about how severe 
the EPA is in its approach.
    It wasn t too long ago in this very room we found out that 
the person heading up Air and Water Quality, one of the most 
senior people at the EPA, we had a hearing, he had not shown up 
for work in years. He was convicted of fraud and is in jail. He 
had to pay hundreds of thousands of dollars in restitution to 
the government because he was telling his senior leadership 
that he was a CIA agent and that he was overseas in 
Afghanistan.
    It begs the question, if he was so fraudulent that he 
actually went to jail, what about all the regulations that came 
into place for air and water quality during that time. It does 
beg the question.
    We have had the Inspector General here talking about the 
problems they have with sexual harassment in the senior-most 
offices. We have had people here talking about the fact that 
they cannot seem to fire anyone and move them out the door.
    Time and time again, the EPA has routinely been here 
talking about all these problems with mismanagement and waste. 
Yet, they want to go into our States and start telling people 
how to conduct their business.
    Again, we need clean coal and good energy. I buy that. Let 
us also understand that there are very real impacts upon 
economies, jobs and peoples livelihoods. Their job role and 
responsibility is not to just shutdown everyone.
    I really appreciate the panel who I think can give us a 
much broader scope and understanding of all the ramifications 
that come into place when you have the EPA come in. I 
appreciate the Attorney Generals who have taken time out of 
their busy schedule to give us their perspective from across 
the United States.
    I look forward to some robust discussions today. I have 
great optimism for this panel and this subcommittee moving 
forward.
    With that, I yield back.
    Ms. Lummis. I thank the Chairman.
    I will hold open the record for five legislative days for 
any member who would like to submit a written Statement.
    We will now recognize our panel of witnesses. I am pleased 
to welcome the Honorable Tim Fox, Attorney General, State of 
Montana; the Honorable Leslie Rutledge, Attorney General, State 
of Arkansas; Dr. David Harrison, Senior Vice President, NERA 
Economic Consulting; Dr. Anne E. Smith, Ph.D, Senior Vice 
President, NERA Economic Consulting; and Dr. Susan F. Tierney, 
Ph.D, Senior Advisor, Analysis Group. Welcome all.
    Pursuant to committee rules, all witnesses will be sworn 
before they testify. Please rise and raise your right hand.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Ms. Lummis. In order to allow time for discussion, please 
limit your testimony to 5 minutes. Your entire written 
Statement will be made a part of the record.
    I now would like to recognize Attorney General Fox for his 
opening Statement.

                      STATEMENT OF TIM FOX

    Mr. Fox. Chairman Lummis, Congresswoman Lawrence and 
members of the committee, thank you for inviting me to speak 
here today.
    I am Tim Fox, the Attorney General of Montana. Without 
hopefully offending any of the other members of the committee, 
Congresswoman Lawrence, you will be glad to hear that I am 
Detroit Tigers fan--go Tigers.
    I will speak briefly this morning of my concerns with three 
regulatory initiatives by the United States Environmental 
Protection Agency. Two are rulemaking proposals and one 
involves an unprecedented action by EPA to exercise a 
preemptive veto of a Section 404 permit.
    In a proposal published in the Federal Register on April 
21, 2014, EPA proposes to amend the definition of ``waters of 
the U.S.'' in such a way that would extend the reach of the 
Clean Water Act to virtually all interState and intraState 
waters and all lands which could potentially affect such 
waters.
    Montana is, for the most part, a headwater State, blessed 
with waters of exceptional quality. The people of Montana have 
taken steps to fully protect that priceless resource. Those 
steps begin with our State Constitution which provides 
comprehensive protections for our waters.
    We have implemented those constitutional safeguards through 
the 1971 Montana Water Quality Act and regulations to implement 
the Act. Based on its Water Quality Act, Montana sought and was 
granted primacy to implement the Clean Water Act s permit 
system in the State but even beyond the permit protections, the 
Montana DEQ has broad authority to prevent pollution.
    The point is that Montana has taken primary responsibility 
for its land and waters as was assumed by Congress when it 
enacted the Clean Water Act. There is no justification for 
extending the reach of the Clean Water Act in our State.
    The overreach impinges indirectly on our State's 
sovereignty and offends Congress Stated intention in the Clean 
Water Act to recognize, protect and preserve the primary rights 
of the States to manage their lands and water resources.
    The second problematic proposed rule is EPAs June 18, 2014 
existing source proposal under Section 111(d) of the Clean Air 
Act. I join the Attorneys General of 16 other States in 
comments on that proposal, but I also filed separate comments 
with Chairman Darrin Old Coyote of the Crow Nation. I want to 
talk just a minute about those comments.
    I grew up Hardin, Montana on the Crow Reservation and 
developed a deep appreciation both for the Crow people and the 
problems they faced and continue to face. The Crow Nation has 
huge, undeveloped coal reserves and one operating mine, the 
Absaloka Mine which provides two-thirds of the Crow Nation's 
annual non-Federal budget and is by far the largest private 
employer on the reservation.
    Unfortunately, one of the very likely effects of EPA's 
existing source rule would be to kill the market for the coal 
produced by the Absaloka Mine which is nearly all sold to 
Minnesota utilities. This will in turn kill the mine, in turn 
causing drastic loss of services and employment on the Crow 
Reservation.
    EPA has a legal duty under Executive Order 13175 to ensure 
meaningful and timely input by tribal officials in the 
development of regulatory proposals that affect tribes. Aside 
from two ``Dear Tribal Leader'' form letters, nobody from the 
agency contacted the Crow Nation directly in a government to 
government contact as required by Executive Order 13175 and the 
Presidential Memo which implements the Order.
    Given the consequences of the proposed rule to the Crow 
Nation, this doesn't seem a sufficient effort on the part of 
EPA.
    Third and last, the matter I want to address today is EPA's 
involvement and their actions relating to the proposed Pebble 
Mine project in Alaska.
    In 1979, the EPA promulgated a rule providing the 
Administrator could prohibit the specification of a site under 
Section 404(c) before a permit application has been submitted 
to or approved by the Corps or a State.
    This authority up to now has never been used to issue a 
preemptive veto. However, last year, the EPA proposed to use 
the authority to issue a preemptive veto before any formal 
application for a permit had been prepared or filed by the 
developer of the Pebble project.
    As Montana's chief legal officer, it greatly concerns me 
that we can see a situation in our State where the 
Administrator of a Federal agency preemptively vetoes a 
development proposal before we have an opportunity to receive, 
review and comment on an application for permit.
    Chairman Lummis, Congresswoman Lawrence and members of the 
committee, thank you again for giving me some time here today 
to speak on behalf of the people of Montana. I have submitted a 
more comprehensive written testimony for your consideration.
    I am happy to answer any questions you may have. Thank you.
    [Prepared Statement of Mr. Fox follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Ms. Lummis. I thank the gentleman and look forward to 
visiting with him some time about the Purple Cow Restaurant in 
Hardin, Montana that I used to frequent when I was a younger 
gal.
    Mr. Fox. Chairman Lummis, if I may, my mother was the 
hostess at the Purple Cow.
    Ms. Lummis. That was one of my favorite places. I have 
pictures at the Purple Cow.
    The chair now recognizes the Attorney General of the State 
of Arkansas, Ms. Rutledge, for 5 minutes.

    STATEMENT OF LESLIE RUTLEDGE, ATTORNEY GENERAL, STATE OF 
                            ARKANSAS

    Ms. Rutledge. Chairman Lummis, Ranking Member Lawrence and 
members of the committee, thank you for inviting me to speak 
with you all today.
    My name is Leslie Rutledge, Arkansas Attorney General. I am 
here today to give you a sense of our State, one that is rich 
in natural heritage and is known across the Nation as the 
natural State for rolling hills, dense woodlands, miles of 
rivers and lakes and how they will be impacted by overreaching 
regulations of the Environmental Protection Agency.
    Specifically, the EPA exceeds its legal authority in three 
recently proposed rules: the Clean Power Plan, more stringent 
ground level ozone standards and changes to the definitions of 
the waters of the United States.
    As Attorney General, I represent the interests of Arkansas 
utility rate payers. These are hardworking Arkansans, some who 
own their own small businesses, some run multigenerational 
family farms from Fayetteville to Warren to Texarkana to 
Jonesboro, and all points in between. I have heard grave 
concern about the EPA's proposed Clean Power Plan.
    The rule requires Arkansas to meet an almost 45 percent 
reduction in carbon emissions from electric generating units by 
2030. This is the sixth highest rate of reduction in the Nation 
imposed upon a State that ranks 46th in per capita income.
    This is a rule that the EPA does not have the legal 
authority to issue. The EPA regulates coal-fired power plants 
such as the one in Independence County, where I grew up, under 
Section 112 of the Clean Air Act, not Section 111(b).
    The law cannot be clearer. It specifically prohibits the 
EPA from invoking 111(b) where the source category is regulated 
under Section 112. The proposed rule mandates what each State 
must achieve rather than providing guidelines and procedures 
for States to use. This is a serious overreach of the EPA's 
authority and different from the implementation of any other 
limits set under the Clean Air Act.
    My opposition to this rule begs the question whether I am 
for clean air. I certainly am and I can confidently say that 
all Arkansans are in favor of clean air.
    The rule goes beyond the EPA's authority to regulate air 
pollution. It imposes a misguided, national energy policy and 
seeks to control the State's regulation of energy generation 
and usage.
    Also, under the Clean Air Act, the EPA has proposed 
unnecessarily stringent ground level ozone standards. The 
proposed rule reduces the current standard of 75 ppm to 
somewhere between 60 to 70 ppm. A decrease to 60 ppm will have 
a devastating effect on Arkansas. At that level, almost all of 
Arkansas would likely be in non-attainment.
    Anyone who has visited Arkansas would be hard pressed to 
believe that our beautiful mountains have a smog problem. Years 
of nonattainment would directly set back economic recovery that 
we have achieved in the past few years.
    Likewise, the EPA's attempt to clarify the definition of 
the waters of the U.S. is so expansive that it would likely 
control land use activities over most of the United States. As 
Arkansas Attorney General, this is a major concern for me 
because this would drastically impact our farmers and ranchers.
    Rather than clarifying, the rule complicates current law. 
The process for determining jurisdiction becomes a maize for 
both regulators and for the public to navigate. Arkansas' 
agricultural community would be left with increased uncertainty 
over the Clean Water Act.
    Agriculture is essential to our economy. According to the 
Arkansas Farm Bureau, agriculture provides $16 billion annually 
and one out of every six jobs in the State.
    While the EPA and the U.S. Army Corps of Engineers have 
repeatedly offered verbal assurances that agriculture need not 
worry about the scope of the proposed definition of waters of 
the United States, farmers in Arkansas worry because of the 
actions of agencies, not their words.
    For example, in 2014, the Corps took action against a 
Tennessee row crop farm determining that a field was considered 
waters of the U.S. Arkansas farmers worry that every day 
activities such as plowing and applying fertilizer and 
pesticides will subject them, just like our neighboring State 
of Tennessee, to Federal jurisdiction under the Clean Water 
Act.
    While each of these rules would cause great harm to 
Arkansas on their own, the cumulative effect cannot be 
overStated. This Administration is intent on following an 
agenda that ignores the plain language passed by Congress and 
has created a perfect storm of Federal regulation that will 
result in economic disaster for Arkansas.
    Arkansans believe in protecting our environment. We take 
great pride in being the natural State and take pride in 
supplying the world with food and growing jobs in our State.
    I thank Chairman Lummis, Ranking Member Lawrence and other 
members of the committee for the opportunity to address you all 
today. I welcome your questions. Thank you.
    [Prepared Statement of Ms. Rutledge follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Ms. Lummis. Thank you, Attorney General Rutledge.
    Before I recognize Dr. Smith, it appears we may be 
interrupted by votes. We will hear the entirety of Dr. Smith's 
opening Statement for 5 minutes. If votes have been called, 
then we will take a break for about 25 minutes while the 
members of the committee vote and return to hear the opening 
Statements of Drs. Harrison and Tierney.
    With that, Dr. Smith, you are recognized for 5 minutes.

                   STATEMENT OF ANNE E. SMITH

    Ms. Smith. Thank you, Chairwoman Lummis, Ranking Member 
Lawrence and other members of the committee. Thank you for the 
invitation to speak at this hearing.
    I am Anne Smith of NERA Economic Consulting. My testimony 
today is my own and does not represent the position of my 
company or any of my clients.
    This hearing is about the impacts of EPA regulations. I 
will address some insights and issues about the comparisons of 
the benefits and the costs of two major regulations EPA is 
presently proposing.
    The first, the Clean Power Plan, is to reduce electricity 
sector emissions of carbon dioxide. The other is a tightening 
of the ozone national ambient air quality standard, NAAQS.
    My colleague to my left, Dr. Harrison, will be testifying 
on high costs of these regulations and analyses we have done 
together at NERA. I agree with all that he will have to say.
    I am going to focus on EPA's own estimates of the benefits 
of these two rules and how they compare to costs. For these 
comparisons, I will only use EPA's own lower cost estimates.
    My bottom line is that EPA's analyses of both rules offer a 
far weaker case that the benefits of those rules will exceed 
their costs than one would believe from listening to EPA's 
press releases or reading the regulatory impact analyses.
    First, for the Clean Power Plan, EPA's comparisons of the 
costs and benefits of the CPP falsely suggest that climate 
benefits will exceed costs during the period of implementation, 
2020 to 2030.
    When correctly presented, EPA's own estimates reveal that 
it finds the CPP will cost more than $180 billion by 2030, in 
present value terms and that the present value of its 
cumulative climate benefits are not expected to exceed that 
$180 billion of cost until more than 100 years later.
    Furthermore, EPA's estimates of those climate benefits are 
global benefits, all countries of the world and the benefits to 
the U.S., including future U.S. generations, not just current 
U.S. generations, are not expected to exceed that rule's costs, 
even under the most pessimistic projections of potential 
climate impacts that EPA is using in its regulatory impact 
analysis.
    I will now turn to the proposed ozone NAAQS revision. At 
tightening of the current ozone NAAQS could be much more 
expensive than the proposed Clean Power Plan. Yet, for this 
rule, EPA does not estimate this rule's ozone-related benefits 
will exceed its costs, even using EPA's own cost estimates.
    How then can EPA claim that the benefits of the ozone NAAQS 
will ``outweigh it's cost by as much as three to one?'' The 
answer is, they pad the benefits estimates with so-called co-
benefits. Co-benefits are estimates of benefits based on 
projections of coincidental changes in a completely different 
pollutant than ozone, a completely different pollutant than the 
target of the regulation.
    These are coincidental reductions projected to occur in 
fine particulate matter, PM2.5, which are the subject of their 
own regulatory coverage under NAAQS.
    EPA has a long tradition of making rules appear to have 
benefits that exceed their costs by adding such massive doses 
of co-benefits from PM2.5. In fact, these co-benefits also 
appear in the benefit cost analysis for the CPP, the climate 
rule we are talking about.
    The thousands of premature deaths and the hundreds of 
thousands of avoided asthma attacks that EPA has claimed for 
that climate rule are based on PM2.5 co-benefits. They have 
nothing to do with climate benefit estimates whatsoever.
    I have written and testified previously on the problems 
with what I have called EPA's co-benefits habit. I reference 
the writing of that discussed in my written testimony.
    To summarize briefly, even the Administrator s Statements 
about the health benefits of PM2.5 imply that these co-benefits 
may not exist at all. That is because they are based on changes 
in PM2.5 concentrations that are already below the protected 
level of the PM2.5 ambient air quality standard.
    But, even if they did exist, they should not be used to 
promote regulations that have nothing to do with PM2.5 such as 
these two EPA proposals I have talked about which are intended 
not to reduce PM2.5 but to deal with climate impacts and ozone 
exposures.
    Using co-benefits in this way is a recipe for creating 
economically inefficient policies for managing those purported 
risks of PM2.5 while it also misleads the public on the need 
for more costly regulations of these other two pollutants.
    Thank you very much for your attention. I will answer 
questions later if you are interested.
    [Prepared Statement of Ms. Smith follows:]
    
    
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    Ms. Lummis. We are interested, Dr. Smith. Thank you very 
much for your testimony.
    Votes have been called on the floor. The subcommittee will 
reconvene shortly after the end of the last vote. If you could 
all return shortly after the last votes, we would deeply 
appreciate it.
    The subcommittee stands in recess and with bated breath to 
hear the testimony of Drs. Harrison and Tierney.
    [Recess.]
    Ms. Lummis. I thank the panel for its patience with our 
leave of absence to be voting on the floor.
    Our next witness is Dr. Harrison. Thank you for being here. 
We look forward to hearing from you. The floor is yours, Dr. 
Harrison.

                   STATEMENT OF DAVID HARRISON

    Mr. Harrison. Thank you, Chairwoman Lummis and members of 
the subcommittee. Thank you for the opportunity to participate 
in today's hearings.
    I am Dr. David Harrison, Jr. My testimony is my own and 
does not represent my company or any client.
    My comments on the economic impacts of EPA regulations are 
based on two recent NERA studies. One related to the national 
ambient air quality standard for ozone and one related to EPA's 
proposed Clean Power Plan to reduce carbon dioxide emissions 
from the electric utility sector.
    Both studies indicate that these two major environmental 
policies could have very substantial economic impacts on 
individual States and on the U.S. as a whole. Let me start with 
the ozone study.
    My written testimony is based on a July 2014 study we did, 
but today we released an update that reflects EPA's November 
2014 ozone proposal. I believe you have received copies of 
that. I would like to request that it be entered into the 
record.
    Ms. Lummis. Without objection, so ordered.
    Mr. Harrison. Thank you.
    In this updated study, we evaluated a 65 ppb ozone 
standard. We used the same basic methodology as in our earlier 
study, but used EPA's newer released data on the emissions 
control technologies and costs.
    A key finding of our analysis is that more than 60 percent 
of the emission reductions required to reach the 65 ppb 
standard was what EPA refers to as unknown controls. That is, 
controls that EPA did not identify in its analysis.
    These controls, they assumed, would be equal to the same 
$15,000 per ton regardless of the emission source, the State or 
the level of control.
    In contrast, we developed what we have referred to as an 
evidence-based approach to identify the likely nature of these 
controls. We concluded that they would mostly involve closure 
of power plants or turnover of older vehicles and similar 
equipment.
    We found that most of these controls would cost much more 
than the $15,000 per ton that EPA had assumed.
    Using these estimates of compliance costs and NERA's 
macroeconomic model called NewERA, we estimate that a 65 ppb 
ozone standard would reduce U.S. GDP by an average of $140 
billion per year over the period from 2017 to 2040. The present 
value of the cost today would be $1.7 trillion.
    Other impacts were correspondingly large. For example, the 
annual reduction in employment income would be equivalent to 
1.4 million jobs per year. The annual reduction in consumer 
spending power would be about $830 per household.
    Let me briefly turn to the Clean Power Plan Study. We 
evaluated what EPA's preferred option, what they referred to as 
Option 1, which was designed to reduce U.S. power CO2 emissions 
by 30 percent below their 2005 level.
    They set these State level emission rates based on their 
analysis of production from four building blocks. These 
building blocks were energy efficiency, increased utilization 
of natural gas, increases in renewable and nuclear energy and 
increases in end use efficiency.
    We used NERA's NewERA model to evaluate the effects of this 
under two cases. In one case, we assumed the States were able 
to use all four building blocks. In the other case, they would 
only be able to use two building blocks. In the interest of 
time, I will just summarize a few results of the four building 
block scenario. Note that the impacts of the two building block 
scenario were much greater.
    We estimated what the U.S. energy system cost would be 
under the Clean Power Plan under these scenarios. Under the 
four building block scenario, the U.S. energy systems cost 
would increase by more than $360 billion on a present value 
basis over the 15 year period from 2017 to 2031.
    The impacts on individual States of the Clean Power Plan 
would also be substantial. The most substantial impacts were on 
electricity prices. For 44 of the States, delivered electricity 
prices would increase by more than 10 percent per year on 
average over that 15 year period due to the Clean Power Plan.
    In summary, these States indicate that both the proposed 
Federal ozone standard and the proposed Clean Power Plan could 
lead to very substantial costs and economic impacts, both on 
individual States and for the U.S. economy as a whole.
    Thank you again for the opportunity to participate. I look 
forward to answering any questions you might have.
    [Prepared Statement of Mr. Harrison follows:]
    
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    Ms. Lummis. Thank you for your testimony, Dr. Harrison.
    I would now like to recognize Dr. Tierney for 5 minutes. 
Welcome, Dr. Tierney.

                  STATEMENT OF SUSAN F. TIERNEY

    Ms. Tierney. Thank you so much, Chairman Lummis, Ranking 
Member Lawrence and subcommittee members. It is very nice to be 
here today. Thank you very much.
    As you know, the EPA has responsibility under the Clean Air 
Act and the Clean Water Act to protect the public from harmful 
discharges of pollutants into the Nation's air and waterways.
    In the decade since these Federal laws were enacted, they 
have led to improvements in the public s health and protected 
the Nation's natural resources on which our entire economy 
depends. As scientific information has evolved over time, as 
has technology, so has the administration of these Federal 
laws.
    I am a former Environmental Secretary and energy regulator 
in the State of Massachusetts where I was appointed by both 
Republicans and Democrats. I have direct familiarity with 
administering Federal and State laws to protect the environment 
and energy markets.
    Since leaving government, I have been a consultant and 
worked for a wide variety of clients looking at energy markets, 
State environmental laws, Federal environmental laws, local 
economies and impacts on consumers of a variety of different 
public policies.
    The three proposed EPA regulations under discussion today 
are important regulations from a public health point of view, 
but are also important for local economies and economic 
development.
    First, clarifying the scope of Federal jurisdictions and 
consistency of treatment of waterways across the Nation helps 
to provide appropriate signals to private actors about what 
they can expect when States review their economic development 
activities. Lack of clear rules is known to chill economic 
development.
    Second, ensuring that ozone standards remain up to date and 
consistent with the evolving State of knowledge in the 
scientific community is critically important for public health 
and for local economies as well.
    Economic impact analyses that fail to look at the benefits 
to public health are inherently inconsistent with what the 
ozone standard is all about, which is public health.
    Third, the rest of my testimony will focus on the EPA's 
proposed Clean Power Plan. The EPA is required to establish 
emissions controls on the power sector. In doing so, the EPA 
has adopted a regulatory approach that offers significant 
flexibility to the States to fashion their own plans to control 
emissions from power plants in ways that work well for their 
economies.
    Having a reliable and efficient electric industry is 
critically important for Americans and the U.S. economy and so 
is addressing carbon pollution. In that context, the EPA's 
proposal is critically important.
    The Supreme Court has said that greenhouse gases are an air 
pollutant under the Clean Air Act. The American power sector 
represents the Nation's largest source of greenhouse gas 
emissions. Americans are feeling the effects of costly climate 
change already.
    The power sector in the United States emits 1 out of every 
15 tons of pollutants anywhere in the globe. It is a major 
source of the global warming emissions and is costly for 
climate change.
    Equally important is assurance that the electric system is 
reliable and it is affordable. Fortunately, EPA's proposal 
allows States to adopt approaches that minimize the Clean Power 
Plan's cost to consumers.
    In the past year, I have co-authored three reports on EPA's 
proposed impacts on consumers and electric system reliability. 
In researching the newest one of those reports, which we issued 
last week and which I have attached to my testimony, my 
colleagues and I read a significant number of the comments that 
have been filed on the EPA's proposal.
    We found that many studies and comments incorrectly presume 
that the rule will be inflexibly implemented, which is opposite 
to the way it has been designed. The assumptions are worse case 
scenarios and assume that the private sector will idlely stand 
by as will regulators rather than doing their jobs to make sure 
the impacts are at least cost and that there are reliable 
outcomes. There is no historical basis for those sets of 
assumptions.
    The issues will be solved by a dynamic interplay of actions 
by regulators and market participants with solutions proceeding 
in parallel. Indeed, this dynamic interplay is the reason why a 
recent survey of 400 utility executives in the United States 
said they support the proposed Clean Power Plan and the 
emissions targets.
    Finally, the electric industry is undergoing major change 
as we know. Those changes are from the shale gas revolution, 
its price pressure on coal in many parts of the country, the 
domestic supply of renewable energy in vast parts of the United 
States, aging infrastructure and a significant growth in energy 
productivity.
    These shifts are underway and are causing enormous changes 
in the industry. Had the EPA never proposed the Clean Power 
Plan, we would be seeing many and the same kinds of directions 
we are seeing in the U.S. electric sector in any event.
    Thank you very much.
    [Prepared Statement of Ms. Tierney follows:]
    
    
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    Ms. Lummis. I thank the panel. We will now have questions 
from members of this subcommittee. The Chair first recognizes 
herself for 5 minutes.
    I have a quick question for Dr. Harrison. Before I do, Dr. 
Tierney, is it your position that carbon is a pollutant?
    Ms. Tierney. Yes.
    Ms. Lummis. Dr. Harrison, is carbon a pollutant?
    Mr. Harrison. I think the issue is whether it is regulated. 
I guess those are legal issues. I understand that it is 
considered a pollutant in terms of the regulatory process that 
is underway.
    Ms. Lummis. I have a quick question for you about EPA's 
attainment level for ozone. If it is set at 65 ppb, could you 
elucidate me about some of the effects? I think I heard you say 
for 44 States, 10 percent per year for 15 year increase in 
electricity costs, is that correct?
    Mr. Harrison. No. I think at that point I was talking about 
the Clean Power Plan. In terms of the 65 ppb ozone regulation 
that we evaluated, I summarized some of the results. We found 
that the present value of the compliance costs would be over $1 
trillion.
    I think I mentioned in terms of the effects on gross 
domestic product would be around $140 billion per year with a 
present value over the period 2017 to 2040 of $1.7 trillion. 
Those are two examples.
    Our study we just released describes a great many other 
impacts which I would be glad to go into if you like.
    Ms. Lummis. I will come back to you on that so hold that 
thought, please.
    I would like to ask Attorney General Rutledge, given this 
testimony and what you have learned about the EPA's proposed 
regulations, what kind of impacts will there be on your State? 
I am really concerned about lower and middle income residents 
of your State.
    Ms. Rutledge. Thank you for the question.
    These EPA regulations and energy costs that would result 
from 111(d) being implemented, this rule being implemented, 
would significantly raise the cost for all Arkansans and all 
ratepayers.
    It would dramatically hurt the lower income and middle 
income ratepayers because of such a dramatic increase. I would 
be remiss if I did not mention that it would also hurt small 
businesses in Arkansas that are trying to make payroll.
    A $20 increase may not seem like much to those living in 
the seven richest counties in the United States here around the 
Beltway but for those folks living in rural Arkansas trying to 
make a payroll, a $20 increase is a dramatic difference.
    Ms. Lummis. Attorney General Fox, same question, what about 
the impact of these EPA regs affecting both air and water on 
the citizens of Montana?
    Mr. Fox. Thank you for the question.
    First of all, let me say that primarily as the chief legal 
officer of the State of Montana, my appearance here today is 
primarily focusing on the rule of law, the Constitution and 
particularly the separation of powers, cooperative federalism 
as we see in the Clean Air Act and the Clean Water Act and 
their original statutes and intent, and also the limits of 
executive power.
    With that said, as I mentioned earlier in my testimony, if 
I may focus once again on the Crow Nation. That is one area 
where the harm of these regulations, should they be 
implemented, goes without saying but is worth repeating.
    There is a large portion of coal on the Crow Reservation, a 
40 year old coal mine that produces some 7.5 million tons of 
coal, provides $10 million to $20 million of revenue to the 
Crow people, which is three-quarters of their non-Federal 
revenue. The mine employs up to 150 people, 70 percent of those 
are members of the Crow Tribe.
    With the decommissioning of their primary clients in 
Michigan and Minnesota and their coal-fired electric generation 
plants, they will lose their market. When they lose their 
market, the mine will close.
    The tribe estimates that will raise the unemployment rate 
somewhere from 50 percent on the reservation, as it is now, to 
as high as 90 percent. The harm that would cause to the people 
of the Crow Nation and, more generally to the people of 
Montana, is very extreme.
    I think that is an area where we can certainly focus and 
the Administration's failure to follow through on their 
obligation to consult with the tribe really requires them to go 
back to the drawing board.
    I would echo what Attorney General Rutledge says in terms 
of higher rates and the impact on the poor. I think those go 
without saying. Primarily, I am here as a lawyer and the chief 
lawyer of the people of Montana. I really want to stick to that 
expertise.
    Ms. Lummis. I thank the panel.
    The Chair now recognizes the gentleman from Pennsylvania, 
Mr. Cartwright, for 5 minutes.
    Mr. Cartwright. Thank you, Madam Chairwoman.
    Dr. Harrison, thank you for appearing before us today. I 
had a couple of questions for you.
    You said you are appearing today expressing your own 
opinions and those of nobody else, is that correct?
    Mr. Harrison. That is correct.
    Mr. Cartwright. You told us about the results of some 
studies that you did, one about ozone and one about the CPP. My 
first question about the CPP study is that was something your 
company did, NERA Economic Consulting?
    Mr. Harrison. That is right.
    Mr. Cartwright. Can you give us an idea of how much time 
went into that study?
    Mr. Harrison. It was a substantial study. I don't recall 
the exact number of hours, but it was a substantial study using 
our NewERA model to evaluate the effects of the Clean Power 
Plan.
    Mr. Cartwright. It was not a minor study that NERA Economic 
Consulting did. It was a major one, is that correct?
    Mr. Harrison. Yes, we considered it a major study, yes.
    Mr. Cartwright. I was looking at footnote 2 from your 
written testimony. It said that, among others, that study was 
prepared for the American Coalition for Clean Coal and, 
Electricity, the American Fuel and Petrochemical Manufacturers 
and the National Mining Association. Have I read those 
correctly?
    Mr. Harrison. That is correct.
    Mr. Cartwright. In laymans terms, does that mean they 
helped fund the study?
    Mr. Harrison. Yes, we prepared the study for those 
organizations.
    Mr. Cartwright. Dr. Harrison, is it a matter of complete 
indifference to you whether those associations and 
organizations continue to fund studies prepared by NERA 
Economic Consulting?
    Mr. Harrison. When we do studies----
    Mr. Cartwright. It is a yes or no question. Do you care if 
they continue to fund your outfit?
    Mr. Harrison. I think what I prefer to do, if I may, is ask 
what they did ask us to do. They asked us to do a careful, 
independent study of the effects of the Clean Power Plan on the 
U.S. energy markets.
    Mr. Cartwright. Let me ask it this way. What about the 
American Wind Energy Association, did they help fund that 
study?
    Mr. Harrison. No, they did not.
    Mr. Cartwright. What about the Solar Energy Industry 
Association, did they help fund your study?
    Mr. Harrison. No, they did not.
    Mr. Cartwright. Did any sustainable energy association at 
all get involved in funding your study?
    Mr. Harrison. No, it was not funded by those organizations.
    Mr. Cartwright. Dr. Tierney, I have some questions for you 
about the clean water rule.
    The EPA and the U.S. Army Corps of Engineers proposed the 
clean water rule to clarify the definition of waters of the 
United States which are the water resources that under the 
Clean Water Act receive numerous protections against pollution.
    The EPA Stated, ``The agencies are eager to define the 
scope of the Clean Water Act that achieves the goals of 
protecting clean water and public health and promoting jobs and 
the economy.''
    Dr. Tierney, ensuring that the Clean Water Act achieves 
these goals is important, would you agree?
    Ms. Tierney. I would agree with that.
    Mr. Cartwright. The Bureau chief of the Environmental 
Protection and the Office of New York State Attorney General 
Eric T. Schneiderman, recently testified, ``Presently, 
jurisdictional decisions related to waters of the United States 
are made on a case by case basis subject to fractured and 
inconsistent legal interpretation by the courts fostering 
uncertainty, delay and further litigation.''
    The EPA has Stated they have received numerous calls for 
clarification of waters of the United States from a variety of 
stakeholders. Members of Congress, developers, farmers, States 
and local governments, energy companies and many others 
demanded new regulations to make the process of identifying 
waters protected under the Act clearer, simpler and faster.
    Dr. Tierney, in general, Federal regulations that make a 
process clearer, simpler and faster will most likely benefit 
stakeholders, would they not?
    Ms. Tierney. Yes, from my experience in administering such 
environmental laws, that was clearly the case. I can't tell you 
the number of times various parties talked about the need to 
clarify the rules.
    Mr. Cartwright. Clarifying it makes it simpler and easier 
and more effective for everyone, right?
    Ms. Tierney. Yes.
    Mr. Cartwright. Thank you.
    I yield back, Madam Chair.
    Ms. Lummis. I thank the gentleman.
    The Chair now recognizes the gentleman from Oklahoma, Mr. 
Russell, for 5 minutes.
    Mr. Russell. Thank you, Madam Chair.
    Dr. Tierney, are you aware that over 4,000 American eagles, 
red tail hawks, American kestrels and burrowing owls are killed 
every year by wind turbines?
    Ms. Tierney. I did not have that fact at my fingertips. I 
would love to see the reference to it.
    Mr. Russell. I would be happy to provide that to you.
    Do you believe that the destruction of American birds is 
good for the environment?
    Ms. Tierney. No, but I know that energy resources of every 
kind, especially fossil fuels have hazardous impacts of the 
nature you are describing.
    Mr. Russell. Are you aware that solar energy also destroys 
thousands of birds every year, many of them rare species?
    Ms. Tierney. That would really surprise me to learn.
    Mr. Russell. I will show you the videos.
    Do you believe that a depression in a farmer or rancher's 
field that collects rainwater is a navigable waterway?
    Ms. Tierney. I understand that the EPA's proposal is based 
on scientific evidence of the relationship between water 
systems, wetlands and a variety of other things into navigable 
waters of the United States.
    Mr. Russell. In the case of a ranch in my home State, which 
is not connected to any coast, that would be a navigable 
waterway if it was a depression full of rainwater in my 
district?
    Ms. Tierney. I understand there are navigable waterways of 
the United States that are in the interior of the United States 
because they cross interState commerce and a variety of other 
things.
    Mr. Russell. Have you ever navigated on a puddle after a 
rainstorm on a ranch in Oklahoma?
    Ms. Tierney. I think that is a facetious question.
    Mr. Russell. I am just curious because it seems that people 
think this is a navigable waterway.
    Ms. Tierney. I don't have any information about a puddle 
that you are describing. I understand that the EPA's proposal 
is based on scientific evidence.
    Mr. Russell. On scientific evidence--I will try to 
scientifically navigate a puddle after a rainstorm.
    Attorney General Fox, what impact do EPA rules have on 
tribal sovereignty?
    Mr. Fox. They have an impact in actually impeding and 
invading on tribal sovereignty. I think it is important to note 
that under the Executive Order cited earlier and the EPA policy 
promulgated from that order, the executive branch has imposed 
upon itself a very important duty and responsibility to consult 
with each tribe of which there are 566 federally recognized 
tribes in the United States.
    In this case, the EPA sent out a Dear Tribal Leader letter 
a mere 2 days before the promulgation of the rule, the 111(d) 
rule. That Dear Tribal Leader letter referred only to the 
possibility of a tribe having on its reservation a coal-fired 
generation plant that might allow the tribe then to have 
primacy of its own air regulatory program.
    It did not give anyone a heads up, certainly not a timely 
heads up and certainly not the four tribes who have coal and 
minerals on their reservations any indication of the impact 
that rule might have on the sovereignty of that tribe.
    We have seven federally recognized tribes in Montana. I 
think it is very important as a State and a Nation that we 
respect the treaties and agreements we have with those tribes. 
Unfortunately, in this case, the EPA has violated the 
sovereignty of the Crow Nation pertaining to its Absaloka Mine.
    Mr. Russell. I want to thank you for that.
    In my limited time that is left, I will direct this to Dr. 
Harrison. You spoke of $140 billion a year reduction in the GDP 
annually for a 65 ppb rate. Were you aware that the entire 
education budget being proposed this year was $140 billion with 
the Student Success Act?
    Also, were you aware that four times of the entire 
estimated gains of the Trans Pacific Partnership would be that 
number and that one third of the defense budget equals the 
number you cited? What impact would that have on our economy?
    Mr. Harrison. I was not aware of those combinations but I 
guess it is another way of trying to put into perspective these 
estimates.
    Mr. Russell. I appreciate the panel and the testimony here 
today. I think it is important for the Nation to see the 
impacts on people in Montana, Arkansas, Oklahoma--which has 
also joined in some of these lawsuits. We certainly have tribes 
as well.
    I thank you, Madam Chairman, for this time.
    Ms. Lummis. I thank the gentleman.
    The Chair now recognizes the gentlelady from the Virgin 
Islands, Congresswoman Plaskett.
    Ms. Plaskett. Good afternoon and thank you very much, Madam 
Chair.
    Thank you, testifiers for being here.
    I think it is very interesting and should be noted for the 
record that the EPA is not here for this hearing because we are 
in a proposed rulemaking position and therefore, it would be 
inappropriate for them at this time to testify on this matter. 
I think we need to reflect on the fact these are proposals as 
yet and not, in fact, rules.
    It appears this is not a new issue and there is a lot of 
rhetoric in the industry right now about the EPA's proposed 
Clean Water Power Plan, the ozone regulations killing jobs, and 
excessively raising industry compliance costs. Ms. Rutledge 
talked about a perfect storm.
    These sky is falling claims don't appear to be new. As a 
matter of fact, I have from June 2014, which I would like to 
submit to the record, a fact sheet prepared under Ranking 
Member Henry Waxman which gives facts on the Clean Air track 
record and pollution reductions.
    Since its adoption in 1970, there has been a reduction in 
key air pollutants by over 70 percent while the economy has 
more than tripled in size.
    Dr. Tierney, do you think the economic predictions 
currently used by the industry regarding clean power plant and 
ozone rules are reasonable?
    Ms. Tierney. I think there is a problem with many of the 
assumptions about how the industry is going to respond to a 
signal saying that things need to be done differently in the 
future.
    As I mentioned, many of the assumptions of the worst case 
studies are not realistic with what the cost impacts are likely 
to be at the moment. I say that knowing that EPA is very likely 
to make changes in its proposal. We don't know what those 
changes will look like. EPA has been very open in indicating 
they are learning from the millions of comments they have 
received.
    They expect to provide a fundamentally flexible rule for 
people. That flexibility doesn't show up in many of the 
economic studies. That will be the essential way in which 
private investors, developers, homeowners who have drafty homes 
will be able to tighten those up and not use as much energy in 
the future.
    Ms. Plaskett. I live on an island that has to balance clean 
air. The importance of our natural resources is of paramount 
concern to us. At the same time, we also had one of the largest 
oil refineries in the United States which was a balance between 
having jobs for our people as well as protecting our sun and 
sand.
    Dr. Harrison, I wanted to ask you if you have looked at the 
long term economic and social benefits of the rules? Are there 
any, in your opinion?
    Mr. Harrison. As I think I mentioned, our study was 
designed to look at the economic impacts of the rules. I think 
my colleague, Dr. Smith, did comment on some of the benefit 
assessments that have been made in the rules.
    Ms. Plaskett. Do you not believe that there are any because 
an impact would have to look at the negative as well as the 
positive, correct?
    Mr. Harrison. The terminology sometimes can be economic 
terminology but the typical economic terminology for looking at 
economic impacts is to look at the effects on the economy. 
These effects typically are in terms of gross domestic product, 
job and labor market impacts and the like.
    In this study, we did not look at the potential benefits of 
this program.
    Ms. Plaskett. How can you analyze an impact in terms of its 
economic impact negatively if you don't look and determine also 
and measure the economic benefits of that?
    Mr. Harrison. Those can be done. Before coming to NERA, I 
was an Associate Professor at the Kennedy School of Government 
and did many benefit cost analyses. That was not the topic of 
this particular study.
    Ms. Plaskett. Your study was merely to look at the negative 
impacts?
    Mr. Harrison. No, it was not. I think the way I would look 
at it is that it was trying to clarify what is at stake for the 
U.S. economy and individual States. There is certainly very 
useful information to be developed on what the benefits are.
    As I said, my colleague, Dr. Smith, has evaluated both of 
these two proposals in terms of their potential benefits. That 
was not the topic of this particular study. I think you will 
find the studies typically referred to as economic impact 
studies do precisely the same thing, look at what those impacts 
would be on the U.S. economy and individual States.
    Ms. Plaskett. Ms. Tierney, did you see what those social or 
economic benefits were?
    Ms. Tierney. Sure. One would surely want to look at the 
public health impacts of a clean power plant or an ozone 
standard. Certainly the cost of the health care of American 
people is a cost and drag on our economy. Not looking at those 
doesn't provide a balanced picture of the impacts of the ozone 
standard.
    Ms. Plaskett. Thank you. I have exhausted my time and I 
thank you for your indulgence, Madam Chairwoman.
    Ms. Lummis. The gentlelady yields. The Chair now recognizes 
the gentleman from Arizona, Dr. Gosar.
    Dr. Gosar. Thank you, Madam Chair.
    Dr. Tierney, is CO2 a pollutant?
    Ms. Tierney. I understand that the U.S. Supreme Court has 
determined that it is a pollutant.
    Dr. Gosar. No, no, I did not ask that. I asked you.
    Ms. Tierney. Yes and I answered a minute ago that I thought 
it is, yes.
    Dr. Gosar. I will come back to that.
    Attorney General Fox, you love dirty water, don't you?
    Mr. Fox. Say again, sir?
    Dr. Gosar. You love dirty water out in Montana?
    Mr. Fox. No, sir.
    Dr. Gosar. I am from Arizona and we love dirty water. How 
about you, Attorney General Rutledge?
    Ms. Rutledge. No, Doctor, we do not like dirty water in 
Arkansas.
    Dr. Gosar. Let me ask you a question. Did you ask EPA to 
clarify the waters of the U.S., Attorney General Rutledge?
    Ms. Rutledge. I have not personally asked the EPA.
    Dr. Gosar. Are you aware of anything in your State asking 
the EPA for clarification on waters of the U.S.?
    Ms. Rutledge. That would have been under my predecessor.
    Dr. Gosar. How about you, Attorney General Fox?
    Mr. Fox. I am not aware of the State officially asking for 
any clarification. As far as I know, we have not needed any 
clarification under the existing status rules.
    Dr. Gosar. Out in Arizona, we have the same problem. We are 
trying to figure out who these people are asking for 
clarification other than some bureaucrats.
    Dr. Tierney, I am coming back to that conversation about 
CO2. Would you consider it an essential gas?
    Ms. Tierney. Are you asking if it is physically in our 
atmosphere?
    Dr. Gosar. I said, is it an essential gas?
    Ms. Tierney. I don't understand your question.
    Dr. Gosar. Is it an essential gas for this planet?
    Ms. Tierney. Sure, but at high concentrations, we will have 
a greenhouse effect on the planet.
    Dr. Gosar. So you are aware of photosynthesis? I got it.
    Ms. Tierney. Of course I am.
    Dr. Gosar. Good old plants take CO2 and dirty water.
    Ms. Tierney. And they are out of balance right now.
    Dr. Gosar. I think that is negatable.
    Attorney General Fox, are you aware there are four Supreme 
Court rulings defying the EPA for where they want to go with 
the waters of the U.S.?
    Mr. Fox. Yes, I am aware.
    Dr. Gosar. Are you also aware that Congress did not give 
them that authority as well?
    Mr. Fox. I am aware.
    Dr. Gosar. Are you aware of that, Attorney General 
Rutledge?
    Ms. Rutledge. Yes, Doctor.
    Dr. Gosar. Why would we continue to go down this path 
without going through Congress first? It defies me. Does it 
defy you?
    Ms. Rutledge. It certainly does and that is why I am here 
today because of the rule of law, as my colleague from Montana 
mentioned.
    Dr. Gosar. I sat in my office 1 day to look at the hearing 
over at Transportation and Infrastructure. Ms. McCarthy was 
very insistent that they were going to come up with this 
rulemaking by April.
    I find it interesting that my colleague on the other side 
keeps saying that they are not here and they shouldn't be here 
because they are proposing rulemaking. That doesn't make any 
sense because defied by Congress and the Supreme Court from 
actually going there, true?
    Mr. Fox. If you are asking me, I would say yes. If I might 
add, we actually asked, on the 111(d) rules, for the EPA to 
hold a listening session in Montana. We were denied that 
ability.
    Dr. Gosar. Ms. Tierney, I am going to go back to science. I 
love science. By the way, I am a dentist. I also have some 
botany in my background, some water and immunology aspects as 
well.
    What would you say if you actually found out that through 
the EPA and their Clean Air Act, that implications on the 
Navajo generating station actually defied the facts of law?
    Ms. Tierney. I literally could not hear the question.
    Dr. Gosar. What would you think, as a scientist, if the EPA 
and their Clean Air administration in Arizona called the Navajo 
generating station actually defied the rule of science? What 
would you say to that, being a science person?
    Ms. Tierney. I am not a scientist. I have a Ph.D. in 
Regional Planning.
    Dr. Gosar. Oh, interesting. You still have outcomes and 
facts, right?
    Ms. Tierney. Of course, yes.
    Dr. Gosar. If they predicated an example for a Clean Air 
Act based on particulates coming from a certain coal plant.
    Ms. Tierney. I know the plant.
    Dr. Gosar. Say northeast that had implications on the Grand 
Canyon, which it did not, and EPA actually admitted that, would 
you think it was fair that those types of rules would be 
inferred and forced upon Arizona for lack of factual basis?
    Ms. Tierney. One of the things you are asking me, I 
believe, is a legal opinion and I don't believe I am qualified 
to give you a legal opinion.
    Dr. Gosar. I think you are outcomes-based and you have an 
opinion as an individual. You are sitting in front of a 
committee giving your expertise. I think you are more than 
applicable to that. I hope you are not taking the Scott Walker 
application and avoiding the question.
    Ms. Tierney. Come on, sir. I am not a lawyer. I cannot. I 
cannot give a legal opinion.
    Dr. Gosar. I am not a lawyer. I am also a dentist so that 
is why I am asking your personal opinion. Would you find it 
contradictive that we would use facts of science and find they 
are factually biased and factually false and still use those to 
predicate a rule?
    Ms. Tierney. Is this a hypothetical question?
    Dr. Gosar. It is actually a true statement.
    Ms. Tierney. I don't know the truth of it, so it is very 
difficult for me to answer that. I am not evading the question 
in any possible way.
    Dr. Gosar. Thank you, Madam Chair. I will yield back.
    Ms. Lummis. The gentleman yields back. The Chair now 
recognizes the gentleman from Alabama, Mr. Palmer.
    Mr. Palmer. Thank you, Madam Chair.
    Dr. Tierney, I want to ask you some questions about how you 
intend to enforce, say, the water rule, how aggressive you are 
going to be on that?
    Ms. Tierney. There must be an acoustical issue here in a 
bubble. Would you say your question again?
    Mr. Palmer. On the water rules, EPA has been very 
aggressive in enforcement. It has gone from a regulatory agency 
to almost operating like a police State. I will be blunt about 
it. There have been cases where the EPA, your armed division, 
has shown up with body armor and weapons drawn.
    Can you give me some idea of what the threat assessment 
might be that would justify that kind of intervention?
    Ms. Tierney. I don't know about the particular thing you 
are describing, but when I was in State government, we had 
environment enforcement activities where we did have to go in 
and take control of people who were flagrantly violating the 
State and Federal laws. I know it does happen. I don't know 
about the particular case you are describing.
    Mr. Palmer. Are any of the other witnesses aware of any 
cases where the EPA has come in with armed agents? We have had 
at least two of those in Alabama and one in Alaska. I find it 
interesting that the EPA is implementing these rules and 
conducting themselves in a way that is more reflective of a 
police State than a regulatory agency.
    Ms. Tierney. My experience with that in the past is that 
other people are at risk of being exposed to hazardous 
pollutants and a variety of other things.
    Mr. Palmer. I don't think that would justify an armed 
agent. If you think someone has violated a rule, I think the 
first thing you do is send down a regulator and interview 
witnesses. I know specifically of a case where that didn't 
happen.
    They showed up in a relatively small town at their waste 
treatment facility. I have not been to the waste treatment 
facility but I am fairly certain there are no sniper towers or 
machine gun nests or anything there that would justify that 
kind of intervention.
    Let us turn to the Clean Power Plan the EPA is trying to 
impose. It is going to be enormously costly. Have you given any 
thought to the fact that the Department of Energy and the EPA 
would like to see us go to the vast majority of our power 
coming from renewable, that our power grid will not support 
that?
    Ms. Tierney. Sir, there is no evidence that the Clean Power 
Plan will be 100 percent renewable. The Department of Energy 
has not stood for that position, nor has the Clean Power Plan 
at the EPA.
    EPA estimates that at the end of the day, based on their 
analyses, there would be 30 percent of the Nation's power 
produced by coal. That is part of the outlook there. The 
integration of renewable energy is something that today, in the 
absence of the Clean Power Plan, the industry is already 
addressing and coping with and has plans for how they will 
continue to cope with integration of renewable energy.
    Mr. Palmer. From my perspective, it is the intention of the 
EPA, and I think this Administration, to eliminate fossil fuel, 
to shut down the coal industry. They have been fairly 
transparent about it.
    Their plans are to have us at 80 percent renewable in the 
next two or three decades. Our electric grid is not designed 
for that. There is a study out of Cal Tech that indicates it 
will cost $1 trillion to upgrade our grid so it can do that.
    Ms. Tierney. One of the wonderful things about natural gas 
as a fuel is it is very nimble to operate natural gas fire-
powered plants. They integrate wonderfully with renewable 
energy projects.
    A domestic fuel, like natural gas, which is so plentiful as 
a result of the shale gas revolution in providing low cost 
energy to the United States, is helping us with our grid 
reliability.
    Mr. Palmer. Do you realize that when you talk about 
supplementing your renewables with natural gas, you are 
admitting that renewables are not a legitimate or reliable 
source of energy?
    Ms. Tierney. That is absolutely not what I was saying. Both 
of them provide power to the grid, period.
    Mr. Palmer. What we are having right now with wind turbines 
having to dump power because we don't have an economical way of 
storing power. If we go to renewable and back it up with 
natural gas, you are still going to have a major redesign issue 
for the infrastructure.
    Ms. Tierney. One of the wonderful things going on with 
innovation in the United States is tremendous research right 
now on storage. There are breakthroughs going on in small 
scale, large scale storage. That is happening in a variety of 
different places around the country.
    Mr. Palmer. There is a huge disagreement over whether or 
not in a timely manner, it would be an economically sound 
alternative.
    Thank you, Madam Chair.
    Ms. Lummis. The gentleman yields.
    The Chair now recognizes the gentlelady from Michigan, Mrs. 
Lawrence.
    Mrs. Lawrence. Thank you, Madam Chair.
    Ms. Tierney, I feel that we are here today to talk about 
our environment and also to talk about human beings, the impact 
that it has on our quality of life.
    Is it correct that the Clean Air Act requires air qualities 
to be required to protect public health with an adequate margin 
of safety?
    Ms. Tierney. My understanding, having been an implementer 
of the Clean Air Act in Massachusetts for many years, is that 
every 5 years, the law requires the EPA to go through a 
process, advised by its Scientific Advisory Council, with 
regard to the extent to which its ambient air quality standards 
are adequate to protect public health.
    That is the process they have gone through and have 
published proposals and have now revised those to tighten the 
ozone standard because of public health benefits that would 
accrue.
    Mrs. Lawrence. I do want to be clear that today we are 
addressing a proposed language and proposed act. I also want to 
know, is it also true that the air quality standards must 
consider the health of groups of people considered to be most 
at risk, like the 7 million children with asthma and the 
elderly? Is that true?
    Ms. Tierney. That is right. I believe that the tens of 
millions of people who suffer from respiratory disease, 
breathing problems, heart problems, small birth weight, is 
above 100 million according to the American Lung Association. 
We are talking about a significant portion of the population 
which suffers from diseases tied to air quality.
    Mrs. Lawrence. With that being said and the law that 
requires we protect public health and protecting the clean air 
to provide these over 7 million people who are at risk, would 
you agree in proposing to reduce ozone levels to the range of 
65 and 70 ppb that EPA is justified in relying on more than 
1,000 new scientific studies which conclude that the current 
ozone standard is harmful to public health?
    Ms. Tierney. I am going to answer yes, because I know the 
process the EPA uses to examine the literature on what 
scientists are saying about the quality of air and the problems 
it is posing. As a result of that process, the advice they have 
been given has been to tighten the standard from 75 to between 
65 and 70 ppm.
    Mrs. Lawrence. Madam Chair, I am going to yield the rest of 
my time. But I do want to say that this is about the industry, 
our economy, but most important in the priority of the proposed 
language that we are talking about, it must address the human 
needs and the impact on our quality of life in America and that 
we empower the EPA to keep the purpose of their existence, as I 
discussed in my opening remarks when President Nixon proposed 
that we do this.
    Thank you.
    Ms. Lummis. The gentlewoman yields.
    If the panel will indulge another two questions from each 
member, we will do that now. It looks like we have assent to 
that, so thank you.
    The Chair yields herself time to ask two questions.
    The first of my questions is for Dr. Smith about the Clean 
Power Plan. Earlier there was a discussion talking a little bit 
about benefits and quantifying benefits. I want to understand a 
little bit about the EPA's quantification of benefits of the 
Clean Power Plan.
    How far into the future would the rule begin to confer 
benefits? Are these Stated benefits global or domestic?
    Ms. Smith. The benefits for reduction in climate change 
risks in that rule are projected out to 2300. We are looking at 
a present value of damages.
    Ms. Lummis. Not 2030?
    Ms. Smith. So 2300, 300 years from now, a little less than 
300 years from 2030 when the rule is fully implemented. The 
damages are really out far in the future, the projected damages 
that are part of those benefit estimates for that rule.
    The timing of the benefits is way different than the timing 
of the costs. We see about a 100-year to 125-year payback 
period before the costs that have to be spent through 2030 
might be paid back in any kind of expected value of climate 
benefits.
    Ms. Lummis. Thank you, Dr. Smith.
    My second question is for our Attorneys General. To both of 
you, do your States have adequate environmental laws to handle 
the air quality and water quality concerns that are being 
addressed today by the EPA?
    Ms. Rutledge. Yes, Arkansas has the Department of 
Environmental Quality that addresses such. I believe one 
particular issue with the proposed rule is going beyond the 
authority, as I Stated earlier, what the EPA actually has 
authority to do which is to provide guidelines and appropriate 
procedures for the States.
    That way, the Arkansas Department of Environmental Quality 
can work with the EPA in implementing those guidelines that 
were right for the State of Arkansas versus what the EPA is 
attempting to do in going beyond its authority, mandating what 
each State must do.
    Mr. Fox. Chairman Lummis, Montana has been very proactive 
in taking steps legally and practically to protect the 
environment, air, water and everything in between. Our 
constitution in Article 9, Section 3, includes a specific 
provision giving the right to Montanans to a clean and 
healthful environment.
    We have also enacted the Montana Water Quality Act, our own 
version under primacy of our Clean Air Act. I might add that I 
used to be an Assistant Attorney General for the Department of 
Environmental Quality. I am a geologist trained in 
environmental protection.
    I was in charge of the investigation that led to the first 
criminal violation and prosecution of someone under our Water 
Quality Act in Montana which later led, actually, to Federal 
charges on different grounds as well.
    We do a very good job. We are very thorough in making sure 
that we protect our environment. I think it is important to 
note that both the Clean Air Act and the Clean Water Act 
include provisions in the very beginning of both Acts stating 
that it is the primary responsibilities of the States and local 
government to regulate both water and air.
    Again, under principles of cooperative federalism, I think 
that is where we start as a foundation. What EPA proposes to do 
here is way over the line and we need to get back to the 
basics.
    I would welcome Congress debating this because I think that 
is truly where this discussion should be held and ultimately 
where it should be decided.
    Ms. Lummis. I thank the panel.
    The Chair now yields to gentlewoman from Michigan, Mrs. 
Lawrence.
    Mrs. Lawrence. Ms. Tierney, I would like to ask this 
question. The Bureau Chief of Environmental Protection bureau 
recently testified that jurisdictional decisions related to the 
waters of the United States are made on a case by case basis, 
subject to factual and inconsistent legal interpretations 
fostering uncertainty, delay and further litigation.
    Members of the EPA have Stated that they received numerous 
calls for clarification of waters of the United States from 
various stakeholders, including farmers, developers, and State 
and local.
    In general, would you say the proposal making a process 
clearer, simpler and faster will benefit these stakeholders? 
Would you agree with that?
    Ms. Tierney. Yes. As I said, as an administrator of Federal 
and State laws on the environment, it has been my experience 
that when there is gray area and a developer doesn't know or a 
private investor doesn't know how a law will be implemented in 
a particular case, it requires a lot of time and money to 
figure that out and it often does chill development.
    Mrs. Lawrence. Would you say in this proposal that is one 
of the objectives, to provide clarification to the States and 
the stakeholders?
    Ms. Tierney. That is my understanding of the motivation of 
the EPA in doing this, yes.
    Mrs. Lawrence. I yield my time.
    Ms. Lummis. The Chair now recognizes the gentleman from 
Arizona for two more questions, Dr. Gosar.
    Dr. Gosar. Dr. Smith, I have a couple of questions for you. 
You did a Clean Power Plan evaluation for global temperature 
changes. What did you find?
    Ms. Smith. I think it was about a .06 degree change in 
global temperature against a projected change of several 
degrees.
    Dr. Gosar. Was it within the margin of error?
    Ms. Smith. I have to be clear, I don't really remember the 
number but it was very small.
    Dr. Gosar. Point zero zero three.
    Ms. Smith. Thank you. You remember better than I do.
    Dr. Gosar. Statistically, is it an anomaly?
    Ms. Smith. It is simply not very meaningful if that is the 
amount of change anyone is projecting. Yet the benefits being 
attributed to this one rule are deriving benefits off these 
tiny, tiny changes.
    If climate change is going to be changed in any way, very 
much larger increments in emissions reductions need to occur in 
order to get very much larger changes in temperature. That one 
rule does nothing. Yet benefits are being attributed to it.
    The only way to get the benefits is to do far more. That 
rule cannot do it.
    Dr. Gosar. Interesting.
    Attorney General Fox, you are a geologist. Are you aware of 
any climate change in our years past?
    Mr. Fox. Yes, that is one of the first things we learned in 
school in the university, is the effect of the change in 
climate geologically speaking through time.
    Dr. Gosar. History tells us a lot of about that. My dad was 
a geologist. As soon as the sun came up, our car always slowed 
down and we were always talking about this period of time, 
right?
    Mr. Fox. Yes, sir.
    Dr. Gosar. Fossils are kind of a product of that, right?
    Mr. Fox. Yes, sir.
    Dr. Gosar. Coal is kind of a product of that, right?
    Mr. Fox. Yes, sir.
    Dr. Gosar. Gas is a product of that, right?
    Mr. Fox. Yes, sir.
    Dr. Gosar. And oil?
    Mr. Fox. Yes, sir.
    Dr. Gosar. Along those same lines, Attorney General 
Rutledge, what kind of implications can you have on civil 
penalties the EPA has already started to establish? I will 
rephrase that a little bit. Are you aware of civil penalties 
that can be expounded by civil violations of the clean waters 
of the U.S.?
    Ms. Rutledge. Under the proposed rule or currently under 
any by the EPA, yes.
    Dr. Gosar. Some are pretty severe?
    Ms. Rutledge. Absolutely.
    Dr. Gosar. I am aware of a poor rancher in Wyoming that has 
a $75,000 penalty on a stock pond that actually followed State 
regulations of Wyoming ADQ. Still, the EPA thinks they run the 
roost. Do you find that a violation of State sovereignty.
    Ms. Rutledge. Absolutely, and that is the problem that as 
the chief legal officer of the State that I have because it 
prevents me from being able to protect the citizens of 
Arkansas. Because when you have a Federal agency such as the 
EPA overstepping its boundaries, insisting and implementing 
civil penalties on our citizens and our businesses, then we are 
not able to govern ourselves.
    Dr. Gosar. Would you feel the same way, Attorney General 
Fox?
    Mr. Fox. Yes, sir.
    Dr. Gosar. Thank you.
    Ms. Lummis. That was the longest multi-part two question 
effort I have ever seen. Congratulations, Dr. Gosar.
    The Chair now yields to the gentleman from Pennsylvania, 
Mr. Cartwright.
    Mr. Cartwright. Thank you, Madam Chair.
    Dr. Tierney, our Ranking Member, Congresswoman Lawrence, 
brought up a very important point. That is, what are the human 
costs of what we do to our environment?
    You and I talked earlier about the clean water rule and the 
intent of clarifying what waterways and bodies of water the 
Clean Water Act applies to. Under the Clean Water Act, the lack 
of clarity on what waters are and are not subject to the Clean 
Water Act protections could result in higher risk of pollution 
of water resources in the Nation's public health, is that a 
fair statement?
    Ms. Tierney. Certainly, there are countless examples where 
you could find that chain of events occurring where some 
actions one place could have downstream effects on peoples 
health.
    Mr. Cartwright. We have been bandying about estimates of 
costs for all sorts of things today. One thing I wanted to 
mention was the EPA estimated that the proposed rule, the clean 
water rule, would provide annual benefits to the public between 
$388 million to $514 million, which significantly outweighs the 
estimated costs of between $162 million to $278 million for 
mitigating impacts to water resources and taking steps to 
reduce pollution.
    The benefits of this proposed rule include reducing 
flooding, filtering pollution, providing wildlife habitat, 
supporting hunting and fishing and recharging groundwater. 
Broadly, do you agree with those statements?
    Ms. Tierney. I agree with those propositions. I have seen 
those in effect in my experience. Flooding and wetland 
protection is enormously important. If it is damaged from one 
kind of pollutant or another, you have lots of havoc when there 
is storm surge or other kinds of things.
    Mr. Cartwright. Thank you. I am encouraged by the efforts 
of the EPA and the U.S. Army Corps of Engineers to clarify this 
definition and help make the government function more 
efficiently and effectively with rules that are clear and easy 
to follow.
    Madam Chair, I do have a couple UC requests. I request 
unanimous consent to enter into the record a report from the 
National Wildlife Federation entitled statement for the Record 
of the National Wildlife Federation in Support of the Clean 
Water Act, Waters of the United States Rulemaking, dated today, 
February 26, 2015.
    Ms. Lummis. Without objection, so ordered.
    Mr. Cartwright. There was some discussion about whether the 
EPA reached out to the Crow Tribe of Montana. I ask unanimous 
consent to enter into the record a June 12, 2014 letter to 
Darrin Old Coyote, Chairman, Crow Tribe of Montana, from the 
United States Environmental Protection Agency.
    Ms. Lummis. Also without objection, so ordered.
    Mr. Cartwright. I yield.
    Ms. Lummis. The Chair now recognizes the gentlelady from 
the Virgin Islands, Ms. Plaskett.
    Ms. Plaskett. Thank you very much for everyone's patience 
here this evening.
    My question was actually already asked and Ms. Tierney did 
not have time to respond to my question to discuss some of the 
economic and social benefits you see from the ozone rule.
    Ms. Tierney. Thinking of your own island is a great 
example. One of the reasons people are concerned about CO2 
emissions is the growing concentration of those in the 
atmosphere and the clear evidence from the Intergovernmental 
Panel on Climate Change and the U.S. National Climate 
Assessment about the fact we are already seeing the impacts of 
climate change in low lying areas and along coastal regions.
    For example, sea level rise and a number of other things 
are real impacts on local economies. There are real impacts we 
are already picking up. There is no way we are going to avoid 
some continuing impacts associated with climate change. We are 
only talking about taking steps in the United States to do a 
piece of the action.
    I hear and appreciate the concerns of many people that our 
poorest residents around the country are facing higher 
electricity bills, I am also aware they are going to face 
higher temperatures and need for air conditioning under extreme 
climate change events.
    We are really talking about things where we try to protect 
one pocket of health care costs and other kinds of costs with 
another piece of impact on their energy costs. The net effect 
of those is supposed to be these are beneficial actions that 
the EPA is doing to protect Americans.
    Ms. Plaskett. When you look at particularly poor 
communities, quite often the individuals living close to some 
of these places, particularly in my own area, I know there are 
families that have very high incidents of asthma as well as 
just starting to look at cancer registration from some of these 
plants.
    Those also have an enormous economic impact on a society 
and a jurisdiction for having to deal with those kinds of 
issues. Do we measure those things in terms of these Acts?
    Ms. Tierney. I know that EPA's studies take a great care to 
look at the impacts on populations that are especially poor or 
exposed to air quality problems which often happens in poor 
urban areas that are close to cars or a lot of industrial 
activity. Yes, those are things that are trying to be avoided.
    Ms. Plaskett. Thank you.
    I just want to say our own jurisdiction has also feelings 
about paternalism on the part of EPA to striking the correct 
balance and not being unnecessarily helpful to the economy. We 
have to look at the long-term effects of some of these rules.
    Thank you very much.
    Ms. Lummis. I thank the gentlelady.
    I too would like to enter into the record the following: 
The NERA Report on the Clean Power Plan; the NERA Report on the 
Ozone Rule, including the update that was released today; 
testimony regarding Waters of the U.S. Rule submitted for the 
record by the National Association of Realtors; testimony for 
the record from Thomas Easterly, Commissioner of the Indiana 
Department of Environmental Management; comments submitted to 
EPA by the Texas Commission on Environmental Quality regarding 
the Clean Power Plan; comments submitted to EPA by the State of 
Montana and the Crow Nation regarding the Clean Power Plan; and 
comments submitted to EPA by 11 State Attorneys General 
regarding the Clean Power Plan.
    Without objection, so ordered.
    Ms. Lummis. I very much want to thank our witnesses for 
taking the time to appear before us today. We value your 
expertise and the time you have spent with us helping us better 
understand these issues.
    If there is no further business?
    Mrs. Lawrence. I just want to say to Mr. Fox, we are going 
to do it this year. The Tigers are going to do it.
    Mr. Fox. Tigers all the way, Ranking Member, Tigers all the 
way.
    Ms. Lummis. With that, and without objection, the committee 
stands adjourned.
    [Whereupon, at 4:40 p.m., the subcommittee was adjourned.]


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