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

                           EPA REGULATORY OVERREACH:
                      IMPACTS ON AMERICAN COMPETITIVENESS

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

                                    HEARING

                                   BEFORE THE

                  COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  June 4, 2015

                                   __________

                               Serial No. 114-21

                                   __________

     Printed for the use of the Committee on Science, Space, and Technology

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

           Available via the World Wide Web: http://science.house.gov

                                   ___________

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                  COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                       HON. LAMAR S. SMITH, Texas, Chair
    FRANK D. LUCAS, Oklahoma             EDDIE BERNICE JOHNSON, Texas
    F. JAMES SENSENBRENNER, JR.,         ZOE LOFGREN, California
        Wisconsin                        DANIEL LIPINSKI, Illinois
    DANA ROHRABACHER, California         DONNA F. EDWARDS, Maryland
    RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
    MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
    STEVEN M. PALAZZO, Mississippi       ALAN GRAYSON, Florida
    MO BROOKS, Alabama                   AMI BERA, California
    RANDY HULTGREN, Illinois             ELIZABETH H. ESTY, Connecticut
    BILL POSEY, Florida                  MARC A. VEASEY, TEXAS
    THOMAS MASSIE, Kentucky              KATHERINE M. CLARK, Massachusetts
    JIM BRIDENSTINE, Oklahoma            DON S. BEYER, JR., Virginia
    RANDY K. WEBER, Texas                ED PERLMUTTER, Colorado
    BILL JOHNSON, Ohio                   PAUL TONKO, New York
    JOHN R. MOOLENAAR, Michigan          MARK TAKANO, California
    STEVE KNIGHT, California             BILL FOSTER, Illinois
    BRIAN BABIN, Texas
    BRUCE WESTERMAN, Arkansas
    BARBARA COMSTOCK, Virginia
    DAN NEWHOUSE, Washington
    GARY PALMER, Alabama
    BARRY LOUDERMILK, Georgia

                               C O N T E N T S

                                  June 4, 2015

                                                                       Page
    Witness List.....................................................     2

    Hearing Charter..................................................     3

                               Opening Statements

    Statement by Representative Lamar S. Smith, Chairman, Committee
      on Science, Space, and Technology, U.S. House of
      Representatives................................................     6
        Written Statement............................................     7

    Statement by Representative Eddie Bernice Johnson, Ranking
      Member, Committee on Science, Space, and Technology, U.S. House
      of Representatives.............................................     8
        Written Statement............................................     9

                                   Witnesses:

    Mr. Bob Kerr, President, Kerr Environmental Services Corp.
        Oral Statement...............................................    11
        Written Statement............................................    14

    Mr. Bill Kovacs, Senior Vice President, Environment, Technology
      and Regulatory Affairs, U.S. Chamber of Commerce
        Oral Statement...............................................    26
        Written Statement............................................    28

    Dr. Jerome A. Paulson, FAAP Chair, American Academy of Pediatrics
      Council on Environmental Health Executive Committee
        Oral Statement...............................................    50
        Written Statement............................................    52

    Mr. Ross Eisenberg, Vice President, Energy and Resources Policy,
      National Association of Manufacturers
        Oral Statement...............................................    63
        Written Statement............................................    65

    Discussion.......................................................    90

                 Appendix I: Answers to Post-Hearing Questions

    Mr. Bill Kovacs, Senior Vice President, Environment, Technology
      and Regulatory Affairs, U.S. Chamber of Commerce...............   118

    Dr. Jerome A. Paulson, FAAP Chair, American Academy of Pediatrics
      Council on Environmental Health Executive Committee............   136

    Mr. Ross Eisenberg, Vice President, Energy and Resources Policy,
      National Association of Manufacturers..........................   140

                Appendix II: Additional Material for the Record

    Documents submitted by Representative Lamar S. Smith, Chairman,
      Committee on Science, Space, and Technology, U.S. House of
      Representatives................................................   146

    Documents submitted by Representative Eddie Bernice Johnson,
      Ranking Member, Committee on Science, Space, and Technology,
      U.S. House of Representatives..................................   159

    Documents submitted by Representative Donna F. Edwards, Committee
      on Science, Space, and Technology, U.S. House of
      Representatives................................................   165

    Document submitted by Representative Suzanne Bonamici, Committee
      on Science, Space, and Technology, U.S. House of
      Representatives................................................   174

    Document submitted by Representative Don S. Beyer, Committee on
      Science, Space, and Technology, U.S. House of Representatives..   216

    Document submitted by Representative Mark Tonko, Committee on
      Science, Space, and Technology, U.S. House of Representatives..   219

    Document submitted by Representative Gary Palmer, Committee on
      Science, Space, and Technology, U.S. House of Representatives..   222

                           EPA REGULATORY OVERREACH:
                      IMPACTS ON AMERICAN COMPETITIVENESS

                                  ----------

                             THURSDAY, JUNE 4, 2015

                      House of Representatives,
                   Committee on Science, Space, and Technology,
                                                       Washington, D.C.

        The Committee met, pursuant to call, at 10:09 a.m., in Room
    2318 of the Rayburn House Office Building, Hon. Lamar Smith
    [Chairman of the Committee] presiding.
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Smith. The Committee on Science, Space, and
    Technology will come to order.
        Without objection, the Chair is authorized to declare
    recesses of the Committee at any time.
        Welcome to today's hearing titled ``EPA Regulatory
    Outreach: Impacts on Industry.'' I am going to recognize myself
    for five minutes for an opening statement, and then I'll do the
    same for the Ranking Member.
        Over the last year, the Environmental Protection Agency has
    released some of the most expensive and expansive regulations
    in its history. These rules will cost billions of dollars,
    place a heavy burden on American families, and diminish the
    competitiveness of American industry around the world.
        Today's hearing will examine this Administration's
    unprecedented regulatory agenda and the manner in which EPA has
    used secret science, questionable legal interpretations, and
    flawed analysis to promote these rules. Specifically, we will
    hear from our witnesses about how the Clean Power Plan, the
    Ozone National Ambient Air Quality Standards, and the
    definition of the ``Waters of the United States'' adversely
    impact the American economy with little benefit to our
    environment.
        The so-called Clean Power Plan is a power grab that will
    force states to reach arbitrary and often impossible targets
    for carbon emissions. These measures will impose tremendous
    costs on everyday Americans. It will shut down large numbers of
    affordable power plants, which increases the cost of
    electricity and puts the reliability of the electric grid into
    question. The Clean Power Plan will have an even greater impact
    on those who live on fixed incomes, such as the elderly and the
    poor, who are the most vulnerable to increases in the price for
    some of our most basic necessities like electricity. EPA
    asserts that the Clean Power Plan will help combat climate
    change. However, EPA's own data demonstrates that is not the
    case. The EPA data shows that this regulation would eliminate
    much less than one percent of global carbon emissions and would
    reduce sea-level rise by only 1/100th of an inch, the thickness
    of three sheets of paper. This rule represents massive costs
    without significant benefits. In other words, it's all pain and
    no gain.
        EPA also seeks to impose stricter ozone standards by
    lowering the standard from the current 75 parts per billion to
    between 65-70 ppb. Analysis conducted by EPA shows that this
    rule would cost at least $15 billion annually, and industry
    groups believe the costs will be even greater. Once again,
    these costs come with few benefits. In fact, EPA's own figures
    show that since 1980, ozone levels have decreased by 33
    percent. Today's air quality will continue to improve with the
    expected development of practical new technologies.
        Last week, the EPA submitted its final rule to define the
    ``Waters of the United States.'' This is the EPA's latest
    attempt to expand its jurisdiction and increase its power to
    regulate American waterways, even if that means invading
    Americans' backyards. The rule will make it difficult for
    farmers and others to improve their land and expand their
    businesses. While the draft rule left many questions as to
    which bodies of water the EPA will claim under its
    jurisdiction, the final rule is more specific. As many had
    predicted, EPA has claimed unprecedented jurisdiction over many
    different kinds of water, including those that temporarily
    result from a ``drizzle.'' The EPA actually used that word,
    ``drizzle.'' EPA will now have the authority to oversee
    features such as prairie potholes and even areas that are not
    always filled with water. Under this regulatory regime,
    Americans will be subject to required permits and the constant
    threat of government intervention. The onslaught of EPA
    regulations continues.
        I look forward to hearing from today's witnesses about the
    impact of these burdensome EPA regulations.
        [The prepared statement of Chairman Smith follows:]

                 Prepared Statement of Chairman Lamar S. Smith

        Over the last year, the Environmental Protection Agency (EPA) has
    released some of the most expensive and expansive regulations in its
    history.
        These rules will cost billions of dollars, place a heavy burden on
    American families and diminish the competitiveness of American industry
    around the world.
        Today's hearing will examine this unprecedented regulatory agenda
    and the manner in which EPA has used secret science, questionable legal
    interpretations, and flawed analysis to promulgate these rules.
        Specifically, we will hear from our witnesses about how the Clean
    Power Plan, the Ozone National Ambient Air Quality Standards and the
    definition of the ``Waters of the United States'' unreasonably impact
    the American economy with little benefit to our environment.
        The so-called Clean Power Plan, proposed by EPA last June, is a
    power grab that will force states to reach arbitrary and often
    impossible targets for carbon emissions.
        These measures will impose tremendous costs on everyday Americans.
    It will shut down large numbers of affordable coal-fired power plants,
    which increases the cost of electricity and puts the reliability of the
    electric grid into question.
        The Clean Power Plan will have an even greater impact on those who
    live on fixed incomes, such as the elderly and the poor, who are the
    most vulnerable to increases in the price for some of our most basic
    necessities like electricity.
        EPA asserts that the Clean Power Plan will help combat climate
    change. However, EPA's own data demonstrates that is not the case.
        Even EPA data shows that this regulation would eliminate much less
    than one percent of global carbon emissions and would reduce sea level
    rise by only 1/100th of an inch (according to NERA economic
    consulting), the thickness of three sheets of paper.
        This rule represents massive costs without significant benefits. In
    other words, it's all pain and no gain.
        EPA also seeks to impose stricter ozone standards by lowering the
    standard from the current 75 parts per billion (ppb) to between 65-70
    ppb. Analysis conducted by EPA shows that this rule would cost at least
    $15 billion annually, and industry groups believe the costs will be
    even greater.
        Once again, these costs come with few benefits. In fact, EPA's own
    figures show that since 1980, ozone levels have decreased by 33
    percent.
        Today's air quality will continue to improve with the expected
    development of practical new technologies.
        Just last week, the EPA submitted its final rule to define the
    ``Waters of the United States.''
        This is the EPA's latest attempt to expand its jurisdiction and
    increase its power to regulate American waterways-even if that means
    invading Americans' own backyards.
        The rule will make it difficult for farmers and builders to improve
    their land and expand their businesses.
        While the draft rule left many questions as to which bodies of
    water the EPA will claim under its jurisdiction, the final rule is more
    specific. As many had speculated, EPA has claimed unprecedented
    jurisdiction over many different kinds of water, including those that
    temporarily result from a ``drizzle.''
        EPA will now have the authority to oversee features such as
    ``prairie potholes'' and even areas that are not always filled with
    water.
        Under this regulatory regime, Americans will be subject to
    stringent permitting and the constant threat of government
    intervention. The onslaught of EPA regulations continues.
        I look forward to hearing from today's witnesses about the impact
    of these burdensome EPA regulations.

        Chairman Smith. I now recognize the Ranking Member, the
    gentlewoman from Texas, Ms. Johnson, for her opening statement.
        Ms. Johnson of Texas. Thank you very much, Mr. Chairman.
        Unfortunately, today's hearing is just a continuation of
    the same familiar theme we have heard in this Congress:
    resistance to the EPA's efforts to carry out its mission to
    protect the nation's environment and the public health,
    resistance that is unsupported by scientific evidence.
        It thus should not be a surprise that this hearing, like
    all others on EPA's activities, will fail to offer any
    constructive solutions for lowering ozone and cutting carbon
    emissions. Instead, it will serve as one more platform for
    industry to voice its opposition to regulations that will make
    the air we breathe cleaner, the water we drink safer, and that
    will help address the looming challenge of climate change. Just
    this week, as a matter of fact, about 30 leaders of
    denominations throughout the African American community, the
    national leadership, came to the Congressional Black Caucus to
    announce their national movement to support cleaning up the
    environment.
        And while Congressional oversight of EPA's activities is
    appropriate, the hearings held by this Committee have not met
    standards of serious oversight. For example, this Committee has
    failed to bring the expertise necessary to truly examine the
    research, policies and technologies needed to confront the most
    important environmental issue of our time: climate change.
    Instead, the so-called experts the Majority has brought before
    this Committee too often represent views from outside the
    mainstream of the scientific community and are industry
    opponents with a vested interest in maintaining the status quo.
    It is puzzling to me that our Committee is going down such a
    path just as other nations and many in the business community
    are stepping up to address the challenge presented by climate
    change. Those nations and those businesses are looking to the
    United States government to provide leadership.
        Just last week, six major oil companies, including BP,
    Shell, and Total sent a letter to the United Nations
    recognizing climate change and the role of their companies in
    lowering carbon emissions. In the letter they state: ``For us
    to do more, we need governments across the world to provide us
    with clear, stable, long-term, ambitious policy frameworks.
    This would reduce uncertainty and help stimulate investments in
    the right low-carbon technologies and the right resources at
    the right pace.'' It is unfortunate that instead of
    contributing to the development of this long-term policy that
    these oil companies are asking Congress for, this Committee has
    too often become a forum for climate change denial.
        With respect to today's hearing, it is clear that a cleaner
    environment and a stronger economy are not mutually exclusive.
    Stricter pollution limits have historically led to innovation
    and the creation of new technologies that have wound up
    creating jobs while protecting our environment. I am confident
    American industry will continue that record of innovation and
    job creation as new environmental standards are adopted.
        And finally, I am proud to say that I was a nurse before I
    entered politics, and I can think of no mission of the federal
    government that is more important or noble than EPA's mission
    to protect human health and the environment. I look forward to
    Dr. Paulson's testimony on the public health benefits of the
    environmental regulations we will be discussing today.
        In closing, I look forward to the day when this Congress
    and this Committee will step back from the counterproductive
    opposition to EPA's efforts to carry out its statutorily
    mandated mission. It is not a good use of our time, and I hope
    that we can instead come together to advance our economy and a
    cleaner environment and a healthier public.
        Mr. Chairman, before I yield back, I'd like to enter into
    the record the letter that I mentioned in my remarks. I thank
    you, and I yield back the balance of my time.
        [The prepared statement of Ms. Johnson of Texas follows:]

              Statement submitted by full Committee Ranking Member
                             Eddie Bernice Johnson

        Thank you, Mr. Chairman. Unfortunately today's hearing is
    just a continuation of the same familiar theme we have heard in
    this Congress--resistance to the EPA's efforts to carry out its
    mission to protect the nation's environment and the public
    health--resistance that is unsupported by the scientific
    evidence.
        It thus should not be a surprise that this hearing, like
    all the others on EPA's activities, will fail to offer any
    constructive solutions for lowering ozone or cutting carbon
    emissions. Instead, it will serve as one more platform for
    industry to voice its opposition to regulations that will make
    the air we breathe cleaner, the water we drink safer, and that
    will help address the looming challenge of climate change.
        And while congressional oversight of EPA's activities is
    appropriate, the hearings held by this Committee have not met
    the standard of serious oversight. For example, this Committee
    has failed to bring in the expertise necessary to truly examine
    the research, policies, and technologies needed to confront the
    most important environmental issue of our time--climate change.
    Instead, the so-called experts the Majority has brought before
    this Committee too often represent views from outside the
    mainstream of the scientific community or are industry
    opponents with a vested interest in maintaining the status quo.
        It is puzzling to me that our Committee is going down such
    a path just as other nations and many in the business community
    are stepping up to address the challenge presented by climate
    change. Those nations and those businesses are looking to the
    United States government to provide leadership. Just last week,
    six major oil companies, including BP, Shell, and Total sent a
    letter to the United Nations recognizing climate change and the
    role of their companies in lowering carbon emissions. In the
    letter they state: ``For us to do more, we need governments
    across the world to provide us with clear, stable, long-term,
    ambitious policy frameworks. This would reduce uncertainty and
    help stimulate investments in the right low-carbon technologies
    and theright resources at the right pace.''
        It is unfortunate that instead of contributing to the
    development of the long-term policies that these oil companies
    are asking Congress for, this Committee has too often become a
    forum for climate change denial.
        With respect to today's hearing, it is clear that a cleaner
    environment and a strong economy are not mutually exclusive.
    Stricter pollution limits have historically led to innovation
    and the creation of new technologies that have wound up
    creating jobs while protecting our environment. I am confident
    American industry will continue that record of innovation and
    job creation as new environmental standards are adopted.
        Finally, I am proud to say that I was a nurse before I
    entered politics. And I can think of no mission of the federal
    government that is more important or noble than EPA's mission
    to ``protect human health and the environment." I look forward
    to Dr. Paulson's testimony on the public health benefits of the
    environmental regulations we will be discussing today.
        In closing, I look forward to the day when this Congress
    and this Committee will step back from the counterproductive
    opposition to EPA's efforts to carry out its statutorily
    mandated mission. It is not a good use of our time, and I hope
    that we can instead come together to advance our economy and a
    cleaner environment and healthier public.
        Mr. Chairman, before I yield back I'd like to enter into
    the record the letter that I mentioned in my remarks. Thank you
    and I yield back the balance of my time.

        Chairman Smith. Without objection.
        [The information appears in Appendix II]
        Chairman Smith. And while we're asking unanimous consent to
    put items into the record, I'd like to ask unanimous consent to
    put into the record letters or documents we received from the
    Small Business and Entrepreneurship Council, from the American
    Chemistry Council, and that does it for right now.
        [The information appears in Appendix II]
        Chairman Smith. Thank you, Ms. Johnson, for your opening
    statement.
        Let me go on and introduce our witnesses today. Our first
    witness is Mr. Bob Kerr, President of Kerr Environmental
    Services Corporation. Mr. Kerr has 29 years' experience as an
    environmental consultant specializing in stream and wetland
    mitigation, natural resources consulting, National
    Environmental Policy Act compliance, and environmental
    contaminant studies. Mr. Kerr received his bachelor's degree in
    biology from the State University of New York at Fredonia and
    his master's degree in marine environment studies from Stony
    Brook University.
        Our next witness today is Mr. Bill Kovacs, Senior Vice
    President for Environment, Technology and Regulatory Affairs at
    the U.S. Chamber of Commerce. Mr. Kovacs initiates and leads
    multidimensional national issue campaigns on comprehensive
    energy legislation, complex environmental rulemakings,
    telecommunications reform, emerging technologies, and the
    systematic application of sound science to the federal
    regulatory process. Mr. Kovacs received his bachelor's degree
    from the University of Scranton and his law degree from Ohio
    State University.
        Our next witness is Dr. Jerome Paulson, Chair of the
    American Association of Pediatrics Council on Environmental
    Health Executive Committee. Dr. Paulson also directs the Mid-
    Atlantic Center for Children's Health and Environment, a
    federally funded environmental health specialty unit that
    provides education and outreach to health professionals,
    parents and the community. In addition, Dr. Paulson has served
    as a Special Assistant to the Director of Centers for Disease
    Control's National Center on Environmental Health. Dr. Paulson
    received his bachelor's degree in biochemistry from the
    University of Maryland and his M.D. from Duke University.
        Our final witness today is Mr. Ross Eisenberg, Vice
    President of Energy and Resources Policy at the National
    Association of Manufacturers. Mr. Eisenberg oversees NAM's
    energy and environmental policy work and has expertise on
    issues that range from energy production and use to air and
    water quality, energy efficiency, and environmental regulation.
    Before joining NAM in 2012, Mr. Eisenberg spent more than five
    years as Environmental and Energy Counsel at the U.S. Chamber
    of Commerce. Mr. Eisenberg received his bachelor's degree in
    English and political science from Emery University and his law
    degree from Washington Lee University School of Law.
        We welcome you all and look forward to your testimony
    today, and Mr. Kerr, we'll begin with you. Make sure your mic
    is on there.

                 TESTIMONY OF MR. BOB KERR, PRESIDENT,

                   KERR ENVIRONMENTAL SERVICES CORP.

        Mr. Kerr. Thank you. Chairman Smith, Members of the
    Committee, I appreciate the opportunity to testify today. My
    name is Bob Kerr, and I'm President of Kerr Environmental
    Services, an environmental consulting and water resources
    engineering firm located in Virginia Beach, Virginia. I've
    provided wetlands consulting and permitting assistance
    throughout Virginia and North Carolina for more than 26 years.
        Since 1972, the Clean Water Act has played an important
    role in improving the quality of the nation's water resources
    yet there continues to be frustration and uncertainty over the
    scope of the Act and the appropriate role of the federal
    government in protecting the nation's waters.
        Decades after the enactment of the Clean Water Act, there
    still is no easy way to determine if certain types of waters
    are subject to state law or federal mandates. EPA and the Corps
    recently issued a rule intended to clarify what is subject to
    federal regulation. Unfortunately, the rule does not provide
    the needed predictability and certainty in the permitting
    process. It fails to follow the intent of Congress, ignores
    Supreme Court precedent, and does not respect the authority of
    the state to regulate their land and water resources.
        The agencies claim the rule does not expand federal
    jurisdiction but that's simply not the case. The rule
    establishes a broader definition of ``tributaries,'' which, for
    the first time, includes ditches and streams that only flow
    after it rains. It also allows the agencies to regulate
    intermittent and ephemeral drainages by rule classifying them
    as tributaries whereas before the agencies required an analysis
    of their significant nexus to traditional navigable waters
    before federal jurisdiction could be established. While this
    certainly provides clarity, it does not limit jurisdiction.
        The new definition of ``neighboring'' includes areas that
    were not previously federally regulated such as non-wetlands
    located more than a quarter of a mile from a traditional
    navigable water or similar features located within a floodplain
    and up to 1,500 feet from the feature. Moreover, the agencies
    retain extensive authority to interpret certain ambiguous
    definitions as they see fit. This will allow for the
    inconsistent application of the rule among regulators both
    within a Corps district and across the country. Ultimately, the
    rule will lead to more litigation, project delays, more
    landowners needing permits, and the higher costs of permitting
    avoidance and mitigation.
        You might look at the rule and think it's a dream come true
    for a consultant like me because more regulation will mean more
    business. I fear the exact opposite. Under the new rule, I'll
    need to complete more jurisdictional determinations, will have
    to conduct multiple tests to determine whether a feature
    qualifies as a water of the United States. It'll take
    additional time and resources to complete the tests, and that
    will cost clients more money. Not knowing their permit costs in
    advance increases financial risk for my clients. As such,
    clients may not--may decide not to pursue some projects as a
    result.
        Some cases may also be so complex that they are too time-
    consuming or costly to resolve. In such cases, clients have the
    option to concede federal jurisdiction and proceed with
    permitting and mitigation through a preliminary jurisdictional
    determination, but that isn't a fair program to me nor does it
    keep the legislative intent of the Clean Water Act, and that's
    not good for the economy as a whole.
        To start to fix this, we need a new rule that respects the
    state's role in regulating waters. Many aspects of the Clean
    Water Act are vague but it's clear that Congress intended to
    create a partnership between the federal agencies and state
    government to protect our nation's water resources. The Supreme
    Court has twice affirmed that the Clean Water Act places limits
    on federal authority. There is a point where federal authority
    ends and state authority begins. The final rule published by
    the EPA and Corps would assert jurisdiction over many features
    that are isolated, carry only minor volumes of water, or have
    only theoretical impacts on traditional navigable waters. These
    waters are properly regulated by the states.
        The federal government cannot just assert jurisdiction over
    everything, yet that appears to be the agencies' solution, and
    many of the bright-line limits written into the rule seem so
    large in scale or so vague as to have created no actual
    limitation. Precedent suggests that the courts will again have
    to rein in the overarching rule but only after countless years
    of litigation. The wiser path forward is for Congress to act
    now. Let's get the agencies to withdraw the rule, resolve the
    problems, provide the clarity we need as to what constitutes a
    water of the United States.
        Thank you again for the opportunity to testify today.
        [The prepared statement of Mr. Kerr follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Smith. Thank you very much.
        Mr. Kovacs.

                     TESTIMONY OF MR. BILL KOVACS,

                  SENIOR VICE PRESIDENT, ENVIRONMENT,

                   TECHNOLOGY AND REGULATORY AFFAIRS,

                        U.S. CHAMBER OF COMMERCE

        Mr. Kovacs. Thank you, Chairman Smith and Ranking Member
    Johnson and Members of the Committee.
        For my opening remarks today, I'm going to address the
    question many of us have been asking for a while: How did an
    Environmental Protection Agency acquire such great power over
    energy policy, state waters, land use, and the nation's
    economic development at the expense of states which implement
    over 90 percent of the federally delegated programs and are the
    main point of contact for the regulated community?
        The purpose of regulation is to implement the laws passed
    by Congress in the most efficient way to achieve the
    Congressional intent. In the 1970s, Congress when it enacted
    these environmental laws had very little knowledge of how to
    protect the environment. It also recognized that while it was
    protecting the environment, it would cause, and I emphasize,
    they recognized in 1970 it would cause plants to shut down,
    jobs to be lost, and harm to impacted communities. But to deal
    with this dilemma, Congress gave the EPA very broad authorities
    to protect the environment but also mandated that the EPA
    continuously evaluate the potential loss or shifts in
    employment resulting from the regulations so that Congress
    could make corrections based on actual input.
        Congress also authorized citizen suits by granting access
    to the courts to anyone protecting the environment, in effect
    granting special environmental enforcement authorities to
    private-sector entities. Then in 1984, the Supreme Court
    granted deference to EPA's decisions where Congress was silent
    or vague on any of the statutory provisions in thousands of
    pages of legislation. In essence, the Supreme Court authorized
    EPA to fill in all of the gaps in the legislation. Almost from
    the beginning, EPA missed a high percentage of its
    Congressionally mandated deadlines. Since EPA misses between 84
    percent and 98 percent of its deadlines, depending on which
    study you believe, citizen suits were brought to force the EPA
    to comply with the deadlines. Rather than arguing it had
    discretion in meeting the conflicting priorities, EPA entered
    into consent decrees with advocacy groups agreeing to implement
    the regulations requested, thereby letting these groups set the
    policy for the Agency and the priorities.
        The best illustration of the impact of the sue-and-settle
    process is that between 2000 and 2013 time frame, approximately
    425 agencies issued almost 50,000 regulations but only 30 of
    those regulations were costing over a billion dollars a year to
    the regulated community or to the states, and EPA issued 17 of
    the 30, and those 17 account for 82 percent of all the costs
    for all 30 rules. Beginning in 1980 and onward, Congress passed
    numerous regulatory laws to provide guidance to the agencies as
    to the type of information needed to be developed by the agency
    to ensure that it complied with Congress's intent to have a
    sound rulemaking record based on fact, science and economics.
    These statutes were the Information Quality Act, the Regulatory
    Flexibility Act, and unfunded mandates reform. EPA routinely
    ignores Congressional mandates, and, more importantly, it has
    never started in 35 years a continuing evaluation of the
    employment impacts of its regulations, thereby leaving Congress
    without the information needed to legislate.
        Therefore, the condition we have today and the
    circumstances we find ourselves in is we have an agency that
    has been given broad delegated authority to make policy. You
    have a federal judiciary that has said that anything that you
    don't describe in clear terms, that they have--that based on
    deference, they have the authority to fill in the legislative
    gaps.
        The development of secret sue-and-settle agreements allows
    these advocacy groups to set agency policy, and we have an
    agency that for 35 years has refused to evaluate the impact of
    regulations on employment. We also have an agency that
    routinely ignores Congressional mandates to try to--that fix
    the regulatory record through having the agency talk to small
    businesses, find out what the unfunded mandates are on state
    and local governments, and use sound and science--sound science
    and factual information.
        If Congress wants its laws implicated according to what you
    believe you've legislated, it must ensure that the agency is
    accountable to Congress, that the rulemaking process is
    transparent, that it operates within integrity, and provides
    all of the participants the same rights as they participate in
    the federal rulemaking process.
        Thank you.
        [The prepared statement of Mr. Kovacs follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Smith. Thank you, Mr. Kovacs.
        Dr. Paulson.

                  TESTIMONY OF DR. JEROME A. PAULSON,

               FAAP CHAIR, AMERICAN ACADEMY OF PEDIATRICS

                        COUNCIL ON ENVIRONMENTAL

                       HEALTH EXECUTIVE COMMITTEE

        Dr. Paulson. Good morning, Chairman Smith, Ranking Member
    Johnson and Committee members. Chairman Smith, thank you for
    your kind introduction of me, and I will just add that for 30
    to 35 years I also practiced----
        Ms. Edwards. Mr. Chairman, is the mic on?
        Dr. Paulson. I practiced and taught primary care
    pediatrics, so I was directly involved in the day-to-day
    pediatric care of children.
        And so with the background that you described and my work
    as a pediatrician that I mentioned, I'm going to comment today
    on the child health benefits of the Clean Power Plan and the
    EPA's proposed ozone rule.
        We know very clearly that children are disproportionately
    at risk from environmental pollutants. Children are not little
    adults, and we cannot extrapolate from what we know about
    adults and assume that that information applies to children,
    particularly as it relates to respiratory illnesses. Children
    breathe faster than adults, they have higher levels of physical
    activity, and they spend more time outdoors. Their lungs are
    still developing. Therefore, children have different outcomes
    from exposures to ozone and other air pollutants than adults
    do, and these effects on children last a lifetime. Problems
    that develop in children manifest themselves in adulthood. The
    work of EPA is essential to protecting children from pollutants
    and ensuring that children have an optimal environment in which
    to live, learn and play.
        Reducing carbon emissions of fossil fuel power plants
    represents a major step towards addressing a key component of
    climate change in the United States. According to the World
    Health Organization, over 80 percent of the current health
    burden from the changing climate is on children less than five
    years old, and that's children here in the United States as
    well as globally. These burdens on children include injury and
    death from natural disasters, increases in air pollution-
    related illness, and more heat-related potentially fatal
    illness.
        Reducing carbon pollution will have an immediate impact on
    child health by reducing emissions of other pollutants and the
    resultant creation of harmful ozone. When fully implemented in
    2030, EPA's proposed rule for existing power plants will result
    in 6,600 fewer premature deaths, 150,000 fewer childhood asthma
    attacks, and 180,000 fewer missed school days, 3,700 fewer
    cases of bronchitis. This also means that when children are not
    sick, their parents can go to work, keep their jobs and earn
    money for the family.
        Let me tell you about a phone call that I received from a
    physician about a little girl with asthma. The family and the
    physician were having difficulty keeping her asthma under
    control in spite of adequate medical management. The astute
    mother reported that her daughter's asthma got worse when the
    smoke from the power plant that was located near her home
    changed from white to black. We were able to determine that the
    power plant usually burned natural gas but was approved to burn
    coal under certain circumstances. We believe that this little
    girl's asthma was exacerbated by the coal burning because of
    the increase in particulate and other air pollutants associated
    with that fuel.
        It is also clear and compelling scientific evidence that
    supports the need for a strong ozone standard of 60 parts per
    billion or lower. High levels of ozone in the air including
    levels above 60 parts per billion can lead to decreased lung
    function in children, coughing, burning and shortness of breath
    as well as inflammation and swelling of the airways. In 2025, a
    60-part-per-billion standard could prevent 7,900 premature
    deaths, 1.8 million child asthma attacks, and 1.9 million
    missed school days.
        I know that the distinguished members of this Committee
    have given many speeches over the course of your careers, and I
    am sure that all of you would be horrified, as I was, to look
    out at a crowd that you were addressing to see a woman in the
    audience sobbing but that was my experience during a luncheon
    presentation talking about ozone as a cause of asthma and a
    reason for exacerbation of asthma. This mom was blaming herself
    for being a good mother and encouraging her son to be
    physically active and involved in outdoor sports only to have
    him develop asthma.
        The EPA has a fundamental role in ensuring that the
    environment in which children live, learn and play is safe and
    healthy and allows children to enter adulthood free from
    environmentally related health problems. The Clean Power Plan
    and stronger ozone NAAQS are essential child health policies
    that the AAP strongly supports.
        Thank you.
        [The prepared statement of Dr. Paulson follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Smith. Thank you, Dr. Paulson.
        And Mr. Eisenberg.

                    TESTIMONY OF MR. ROSS EISENBERG,

              VICE PRESIDENT, ENERGY AND RESOURCES POLICY,

                 NATIONAL ASSOCIATION OF MANUFACTURERS

        Mr. Eisenberg. Good morning, Chairman Smith, Ranking Member
    Johnson, members of the Committee. Thank you for the
    opportunity to be here today to present the views of the
    National Association of Manufacturers and our 14,000 members.
        Manufacturers believe regulation is critical to the
    protection of worker safety, public health, and our
    environment. We believe in the mission of the EPA and we
    support reasonable environmental regulation. However, we also
    bear an unmistakably high burden of compliance with the
    Agency's regulations. Manufacturers spend, on average, over
    $19,000 per employee per year on regulatory compliance and over
    $10,000 of this is for environmental regulations. The smaller
    the manufacturer, though, the larger the burden. Manufacturers
    with less than 50 employees spend over $34,000 per employee per
    year and over $20,000 of this is due to environmental
    regulations.
        So when the EPA issues a new regulation with new costs and
    new burdens, manufacturers have to pay these costs not op of
    what we're already doing, the tens of thousands of dollars that
    we've already assumed. So we're not starting from zero. In
    fact, our plants are already equipped with the best available
    pollution control technology. We maximize our efficiency and we
    limit waste and we recycle. And so while we'll always strive
    for improvement, in some cases we're really already pushing up
    against or beyond what technology can deliver, and so we need--
    what we need as manufacturers more than ever are smarter
    regulations.
        We just don't believe we're getting that from the EPA with
    respect to the three regulations that we're here to talk about
    today: ozone, the Cleaner Power Plan, and the ``waters of the
    United States'' definition. In all three cases, the costs and
    burdens placed on manufacturers as a result of these
    regulations are very significant and could make us
    significantly less competitive.
        Manufacturers are committed to reducing ozone levels, and
    we've been doing so for decades. We've been reducing the
    emission that cause ozone by more than half since 1980.
    However, the progress we've made, it also means that both the
    low-hanging fruit and the high-hanging fruit are pretty much
    gone and so the controls that are needed to reduce ozone levels
    are already in place. In fact, with this rule, EPA can only
    identify about 35 percent of the controls and technologies
    needed to achieve this new 65-parts-per-billion standard. You
    heard that right. A solid two-third of the controls that will
    be needed to comply to this are called unknown controls. We
    don't know what they are.
        Economic analysis of this new standard shows that it would
    be the most expensive regulation in history. Second place isn't
    even close. It would cost about $140 billion per year, about
    $1.7 trillion over the next 23 years, placing the equivalent of
    1.4 million jobs in jeopardy each year and reducing annual
    household income--consumption--I'm sorry--by an average of
    about $830 per year. Very few low-cost control options exist
    for this tightening of ozone standard, so if controls aren't
    invented in time, what winds up happening is, manufacturers are
    forced to consider scrapping equipment, scrapping existing
    plants, replacing them, or just plain old shutting them down.
    And then there's nonattainment for ozone, which is essentially
    a synonym for no growth. There has to be a better way for this
    than this, and really there is. The current standard is only
    being implemented. It's going to drive ozone precursor
    emissions, the emissions that cause ozone, down by another 36
    percent over the next decade. We believe we should let that
    standard work before moving the chains one more time.
        On climate, we're committing to addressing climate change
    through improved energy efficiency, greater sustainability and
    reducing our greenhouse gas emissions. We've done that. We
    reduced our emissions ten percent over the past decade, but our
    competitiveness is threatened by the Clean Power Plan as it's
    currently drafted. Independent analysis of this rule places
    total compliance costs as high as about $366 billion through
    2031. Forty-three states could experience double-digit
    electricity prices. That's very difficult for us as we are
    major, major energy users. And even worse, many sectors in my
    membership, manufacturing, are due to get follow-on regulations
    under the Act that will be modeled off of this one, meaning
    we're going to be hit twice.
        We believe EPA needs to fix this rule. We agree that
    adoption of a strong and fair international climate agreement
    should be a priority, but we also must be very careful not to
    lock into place policies that will send production and
    emissions overseas if the rest of the world doesn't play by
    those same rules in Paris in December.
        Finally, manufacturers are disappointed with the final
    Waters of the United States regulation. We would welcome a
    clear rule that resolves disagreement over scope of the Clean
    Water Act. Instead, we ended up with a final regulation that
    fails to do this. It fails to clear up the problems and may
    have even created new ones. The regulation certainly expands
    the scope of the Clean Water Act to areas that are not even
    wet, and it fails to provide clear exclusions as to what
    actually qualifies. We're going to face, manufacturers are
    going to face increased uncertainty, permitting costs, and
    supply-and consumer-chain disruptions. Ambiguities in the new
    regulation will give rise to third-party lawsuits, even in
    cases where EPA agrees with us and believes that it is not a
    water of the United States.
        I assure you, we do not enjoy having to have an adversarial
    position to the EPA on these regulations. We prefer to work
    with them as a partner toward a shared goal of protecting the
    environment. However, we desperately need the EPA to choose a
    different regulatory path.
        Sadly, we are nearing the time where legislation may be our
    only hope, and we ask this Committee for its help in that
    pursuit.
        Thank you.
        [The prepared statement of Mr. Eisenberg follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Smith. Thank you, Mr. Eisenberg, and I'll
    recognize myself for questions, and Mr. Kerr, let me direct my
    first question to you.
        The EPA claims that under the Waters of the United States
    final rule, it does not expand the scope of federal
    jurisdiction. Give me a couple of quick examples as to why it
    does expand jurisdiction.
        Mr. Kerr. Sure. Under the SWANCC Supreme Court ruling, the
    Supreme Court found that isolated wetlands are not under the
    jurisdiction of the Clean Water Act, and if they're to be
    regulated at all, they need to be regulated by the state. Those
    types of isolated wetlands can now be regulated under the Clean
    Water Act. Under the new rule, they can be regulated as an
    adjacent water. So that's one type of situation where scope's
    broadened.
        Chairman Smith. By the way, I'm just curious. Have we seen
    the word ``drizzle'' before, water that's accumulated as a
    result of drizzle?
        Mr. Kerr. Not to my knowledge.
        Chairman Smith. Okay. That might be another example.
        Mr. Kerr. Yeah, and actually I've got three or four others.
    There has never been an adjacent feature regulated under the
    Clean Water Act other than wetlands. The only adjacent feature
    could be a wetland. Under the new rule, a pond can be
    considered adjacent. Virtually any kind of other water of the
    United States can be considered adjacent. That's a new
    precedent and was not dictated by a court decision.
        Ditches flowing into tributaries can now be regulated as a
    jurisdictional water. I've got a lot of concern with that
    because by definition, ditches connect into waters of the
    United States so that they drain agriculture, roads,
    stormwater, you know, a number of features. If they connect to
    a traditionally navigable water or a tributary, the EPA is
    saying they can regulate them now. That creates at a minimum a
    lot of confusion.
        Chairman Smith. And that's another expansion.
        Mr. Kerr, I know you could go on and on and on. Let me see
    if I can get to some other questions.
        Mr. Kovacs, real quickly, you say that the modeling system
    used by the EPA is biased. What's an example, and specifically
    the way that it's biased?
        Mr. Kovacs. Well, I mean, there's several. One is when we
    did our own modeling on costs several years ago, we found that
    the EPA used what they call a limited model where the only
    thing they looked at was what are the impacts on job growth,
    and that was very narrow in the sense that it asked how many
    consultants are you going to have. So when they modeled the
    mackerel, for example, it found that it created 8,000 jobs.
    When we used whole-economy modeling, we found that it lost
    240,000 jobs, and that's one of the huge debates that's going
    on right now with the Science Advisory Board. They've been
    instructed by Congress to determine whether or not EPA is
    modeling's is incorrect.
        Chairman Smith. Okay. Thank you, Mr. Kovacs.
        Dr. Paulson, first of all, you mention in your testimony--I
    just want to bring it out for everybody's information--that
    since 1990, emissions of six common pollutants have dropped by
    41 percent through 2008. I think that's good news.
        You also mention the heartfelt case of a girl with asthma,
    and whenever the smoke from the power plant located near her
    home changed from white to black, when they went from burning
    natural gas to coal, her asthma worsened. We've done some
    research, and our research indicates that typically a coal-
    fired plant produces white smoke, not black smoke, and I'll
    show a couple photographs. Do you know where this plant was
    located that you referred to?
        Dr. Paulson. Yes, sir, I do.
        Chairman Smith. What city or what area? You don't need to
    give anybody's identity. I'm just curious where it's located.
        Dr. Paulson. Washington, D.C.
        Chairman Smith. Okay. And we'll have to check because my
    information is that even when they're burning coal, the smoke
    is white, not black, and that might be of interest. Anyway, I
    just wanted to bring that out. I appreciate that.
        My last question goes to Mr. Eisenberg, and this is, does
    the EPA have the legal authority to implement the proposed
    Clean Power Plan?
        Mr. Eisenberg. Certainly that is an open question, I mean,
    and I fear that if they finalize the rule that they proposed,
    we're going to get some litigation on that. There --we and
    others have posed a number of potential legal obstacles that
    this thing could go through. You know, they have the--they
    certainly have the authority to regulate greenhouse gases.
    That's been settled by the Supreme Court. The issue is, can
    they be using this statute the way they're using it? They've
    certainly made a lot of interesting choices in terms of going--
    --
        Chairman Smith. Do you have a legal opinion yourself as
    to----
        Mr. Eisenberg. You know, it's going to be a complicated
    case. I think, you know, certainly there are a lot of potential
    flaws, legal flaws, in this language.
        Chairman Smith. Okay. What's an example of one?
        Mr. Eisenberg. So a very easy one is whether or not the
    section 111 can be used in light of the fact that they're
    already regulating power plants under section 112 for hazardous
    air pollution, can you actually do that under section 111, and
    if so, can you do that for everybody else. They didn't make an
    independent endangerment finding for this one so they just
    basically said well, cars cause this and so power plants must
    too. There's a lot of stuff they did in there that I think is
    going to be a real challenge.
        Chairman Smith. Thank you, Mr. Eisenberg, and the
    gentlewoman from Texas, the Ranking Member, Ms. Johnson, is
    recognized for her questions.
        Ms. Johnson of Texas. Thank you very much, Mr. Chairman.
        Dr. Paulson, in your--in testimony of Mr. Kovacs, he
    recommended EPA retain the current 2008 ozone standard of 75
    parts per billion, in large part because EPA is just now
    starting to implement the 2008 standard. Those who support
    retaining the current standard say it is unfair for EPA to move
    the goalpost by calling for a more stringent standard. As most
    people know, I'm from Dallas, Texas, an area that is all too
    familiar with poor air quality. Dallas County alone is home to
    more than 60,000 children and over 130,000 adults with asthma
    who are at risk of missing school, missing work, ending up in
    the emergency room or hospital, and even dying prematurely on
    days with dangerous ozone levels at government expense.
        Unfortunately, the State of Texas is not helping to protect
    my constituents nor anybody else's and has been intensely
    opposed to a lower ozone standard. In fact, the chairman of the
    Texas Commission on Environment Quality, Bryan Shaw, has stated
    that there will be little to no public health benefit from
    lowering the current standard. Was the current standard of 75
    parts per billion sufficient to protect public health when it
    was finalized in 2008 is one question, and the second question,
    how has the body of scientific evidence changed since the last
    time the EPA revised the ozone standard, and would it make
    sense based on the science for EPA to retain the current
    standard until the states have fully implemented, as some have
    suggested?
        Dr. Paulson. Ms. Johnson, if the states retain the current
    standard until it's fully implemented, people are going to die
    and people are going to be sick. We knew before the current
    standard was set by EPA based on the science that was available
    prior to that time that that standard was inadequate to protect
    the health of human beings in the United States. We now have
    additional scientific information, both from human
    epidemiologic studies and other research that shows that a
    level of 60 is where health protection starts.
        Ms. Johnson of Texas. Thank you very much.
        Are you likely aware that critics of the Clean Power Plan
    and virtually any other EPA rule often claim that the economy
    and the American consumer will suffer as a result of efforts to
    make our environment cleaner and safer? This ``sky is falling''
    attitude toward protecting the health of Americans runs counter
    to reality. As the economy has tripled in size since the
    adoption of the Clean Air Act in 1970, claims that regulations
    kills jobs are equally misleading. As a matter of fact, I've
    known it to create jobs. In fact, just last year, we heard from
    the witnesses that wise environmental protection and robust
    economic development can and should go hand in hand.
        That being said, one cost is abundantly clear, and that is
    the cost of American lives, if we do not enact regulations to
    protect their public health.
        Now, can you please expand upon the cost to public health
    if we do not act and implement stronger emission regulations
    and what are the costs to the taxpayers, especially medical
    costs, if businesses are allowed to continue to pollute?
        Dr. Paulson. Ms. Johnson, the issues around ozone in
    particular and all of the rest of the air pollutants that come
    under the Clean Power Plan, each and every one of them
    adversely affects human health and therefore cost money, cost
    money in terms of direct out-of-pocket costs for payment of
    medical expenses or the government pays those expenses if it's
    not direct out of pocket or business pays those expenses in
    terms of insurance premiums. Businesses also pay an expense for
    these health problems when their workers can't show up or show
    up sick and can't do the work that they need to do. Businesses
    also pay for these health problems when children are ill
    because their parents need to stay home with the children, need
    to take their children to a healthcare professional, need to
    take their children to an emergency room, or need to sit by
    their child's bedside in the hospital.
        One of my colleagues, Dr. Leonardo Trasande from NYU
    Medical School, and a colleague of his, Dr. Lu, concluded that
    the best estimate of childhood asthma costs in 2008, and
    recognized that they've only gone up since then, that could be
    associated just with environmental factors--this is not the
    total cost of asthma, this is the cost attributable to
    environmental factors--was around $2.2 billion per year in the
    United States with a range from about $728 million to $2.5
    billion.
        So by not protecting our people, there is an extensive
    economic burden on businesses and on the country as a whole.
        Ms. Johnson of Texas. Thank you very much. My time is
    expired.
        Chairman Smith. Thank you, Ms. Johnson.
        And the gentleman from California, Mr. Rohrabacher, is
    recognized.
        Mr. Rohrabacher. Years ago, when I was in high school,
    which seems, really, I guess it was in another century, I
    remember when I was in Los Angeles when in high school, and we
    were not permitted to go out and do strenuous exercises because
    the pollution levels in Los Angeles were so high that perhaps
    once or twice a week they called a pollution emergency. Today,
    I think it happens once or twice a year, so there has been a
    dramatic reduction in the air pollution, at least in southern
    California, and I take it from the testimony that we've heard
    that that's true throughout the rest of the country as well.
        We have to attribute that to the fact that there has been
    regulation that has been successful, and those of who have a
    natural inclination against regulation need to be honest about
    that, and the question is, is whether or not we have come to a
    point or when we did come to that point where such regulation
    actually does not clean the air but there are natural sources
    of pollution when you have to want to maintain a certain
    standard of living for people. If we're going to have
    civilization, there will be-- manufacturing will take place. If
    you do not have manufacturing, people will get sick for other
    reasons other than just the air.
        The question is for you, Dr. Paulson. Has there been a
    decrease in the number of illnesses, air-pollution-related
    illnesses that has been recorded in these last 10, 15 years as
    the pollution level's gone down?
        Dr. Paulson. It depends what pollutant you're looking at
    and what particular health outcome you are looking at, but we
    do know that the pollution levels have come down and we also
    know that the current pollution levels are not healthy,
    actually still----
        Mr. Rohrabacher. Excuse me. You're not answering my
    question, please. I'm asking you specifically, because the
    pollution levels have gone down and now do we see as the
    pollution level's gone down this decrease in the number of
    diseases related to that pollution?
        Dr. Paulson. There's been some leveling off, for example,
    of people with asthma but there are----
        Mr. Rohrabacher. So we have a leveling off and not--there's
    been this dramatic decrease in the pollution but there's only
    been a leveling off, so maybe we have reached a point that the
    pollution level is more of a natural level that human beings
    can relate to. Perhaps maybe the other witnesses----
        Dr. Paulson. There----
        Mr. Rohrabacher. Go right ahead.
        Dr. Paulson. These levels of pollution are dangerous to
    human beings, Mr. Rohrabacher. These levels of pollution are
    produced by human beings and can be controlled by human beings.
        Mr. Rohrabacher. Well, there are also, as we know,
    natural--for example, we are called deniers over here if you
    don't go along with the fact that CO2 is changing
    our climate, but we know that 90 percent of the CO2
    in the air comes from natural sources and not human sources,
    and at some point you have to relate what level of whatever
    we're talking about actually relates directly to people's
    health, and do the other witnesses have any----
        Dr. Paulson. Mr. Rohrabacher----
        Mr. Rohrabacher. Listen, can I ask the other witnesses to
    comment on that as well?
        Mr. Kovacs. We did a study using EPA's own data just to
    figure out that exact question. We asked in each of the studies
    that the EPA was doing in terms of reducing pollution, whether
    it be ozone or mercury or whatever, EPA--let's use mercury.
    EPA--the entire utility MACT was mercury but only $6 million
    out of $10 billion in EPA's claimed benefits came from mercury.
    The rest came from particulate matter, and what's happened is,
    we've taken particulate matter down to whether--where it's 30
    percent below where EPA says it's safe and 20 percent below
    where the World Health Organization says it's safe. We're still
    reducing it, so we're spending billions of dollars to reduce
    something that's already 30 percent below what they say is
    safe.
        Mr. Rohrabacher. So at some point where if you have a
    problem and at some point you come to a position where it is no
    longer cost-effective to do that, to have that activity, and
    while we have to admit that from the time when I was in high
    school until now when the pollution levels are lower, that
    maybe that was very cost-effective and many of the things that
    the good doctor is telling us about has resulted from that but
    maybe we now have reached a point here it's so costly that it's
    counterproductive, and on our side of the aisle at least, we
    believe that entrepreneurs and manufacturers, when you actually
    put them in contest with the bureaucracy, they usually lose,
    and bureaucracy--where manufacturers can give us good products
    to use, usually bureaucracy is able to turn pure energy into
    solid waste, and that's about all.
        Chairman Smith. Thank you, Mr. Rohrabacher.
        Mr. Rohrabacher. Thank you, Mr. Chairman.
        Chairman Smith. The gentlewoman from Maryland, Ms. Edwards,
    is recognized.
        Ms. Edwards. Thank you very much, Mr. Chairman, and thank
    you to the witnesses this morning.
        I just want to make sure that we really understand, because
    I think sometimes there are quite overstatements in these
    hearings, and so I just want to clarify from the EPA that the
    Clean Water Rule does not regulate most ditches. In fact, the
    text of the rule says, and I quote, ``The following are not
    waters of the United States. The following ditches. A. Ditches
    with ephemeral flow that are not relocated tributary or
    excavated in a tributary. B. Ditches with intermittent flow
    that are not relocated tributary excavated in a tributary or
    drain wetlands. And C. Ditches that do not flow either directly
    or through another water into a traditional navigable water,
    interstate water, or territorial seas.''
        And so let's not overstate the regulation of so-called
    ditches. I've heard that so many times and it is completely
    inaccurate.
        Furthermore, the rule doesn't protect any types of waters
    that have not historically been covered by the Clean Water Act.
    Any new requirements for agriculture, in fact, all of the
    agriculture that was exempt before is exempt now under the
    rule, interfere with or change property rights, regulate most
    ditches, as I said, change policy on irrigation or water
    transfers, address land use, cover erosional features such as
    gullies, rills, and non-wetlands swales, and include
    groundwater, shallow subsurface flow, and tidal drains. Those
    are things that the rule does not do, and so we should be
    careful about those overstatements.
        Mr. Chairman, I know also a number of my colleagues on the
    other side also deny that climate change is happening or at
    least that humans are causing it. We've already heard that this
    morning and have adamantly opposed the Obama Administration's
    efforts to lower the nation's carbon emissions. Fortunately,
    according to a recent poll by the Yale Project on Climate
    Change Communication, the majority of Republican voters
    actually support climate action to reduce carbon pollution.
    Additionally, a majority of moderate Republicans support
    setting limits on carbon emissions from coal-fired power
    plants. This poll also shows that not all Republican voters
    oppose EPA's Clean Power Plan.
        And so Mr. Chairman, I'd ask unanimous consent to enter
    these two charts from the Yale Project into the record.
        Chairman Smith. Without objection, that'll be made a part
    of the record.
        [The information appears in Appendix II]
        Ms. Edwards. Thank you.
        I also want to enter into the record a survey by Hart
    Research Associates that actually says that voters in fact
    support the Clean Water Rule and not just that, but an
    overwhelming number of voters trust the EPA and the U.S. Army
    Corps of Engineers to do that and not Congress. I think that we
    should listen to the public.
        Chairman Smith. Without objection--and by the way, I'm
    looking at the poll that you're referring to. The wonder is
    that the answers were not----
        Ms. Edwards. Mr. Chairman, that's----
        Chairman Smith. --100 percent, given the way the questions
    were worded.
        Ms. Edwards. That's my time----
        Chairman Smith. Who's opposed to clean water?
        Ms. Edwards. Are you entering that into the record?
        Chairman Smith. It will be made----
        [The information appears in Appendix II]
        Ms. Edwards. And I'd ask for the remainder of my time to be
    added back to the clock.
        Chairman Smith. I'll give you ten more seconds.
        Ms. Edwards. Thank you.
        Mr. Chairman, I'd also like to add into the record, as
    we've seen this morning again, that our industry
    representatives here make the argument that the cost of
    complying with regulations will ``kill the economy and jobs.''
    But this argument has been proven false over and over again.
    Again, I have a facts sheet from the Pew Charitable Trust
    describing industry's long history of overestimating the cost
    of regulations. According to Pew, compliance costs have been
    less and benefits greater than industry predictions and
    regulation typically poses little challenge to economic
    competitiveness. The fact sheet goes on to outline a number of
    very specific examples of this pattern of the overexaggeration
    from acid rain and airbags to seat belts and catalytic
    converters.
        For example, chemical production plants predicted that
    controlling benzene emissions would cost $350,000 per plant.
    But the chemical plants ended up actually developing a process
    that substituted other chemicals for benzene and virtually
    eliminated control costs. In this instance, as in a number of
    instances, regulation actually drove the kind of innovation,
    Mr. Chairman, that you pointed to.
        I'd ask unanimous consent to enter these facts sheets from
    the Pew Charitable Trust into the record.
        Chairman Smith. Without objection.
        [The information appears in Appendix II]
        Ms. Edwards. Thank you, Mr. Chairman.
        I just want to finish by saying we've had so many of these
    hearings about regulation, and I would suggest that we'd allow
    the rule to go into effect and we don't have any predictions at
    all about what the outcome will be if they are challenged in
    court, but after--especially with the Clean Water Rule. After
    thousands and thousands of comments that have been reviewed,
    changes that were made from the rule on its introduction to the
    final proposed rule, hundreds of witnesses testifying, it's
    time that we move after a decade and a half of twiddling around
    and not knowing what to do and what the rules are to a point
    where we have some certainty that industry has certainty, that
    the public has certainty and that all of us get the clean air
    and the clean water that we deserve.
        Thank you, and I yield.
        Chairman Smith. Thank you, Ms. Edwards.
        The gentleman from California, Mr. Knight, is recognized
    for questions.
        Mr. Knight. Thank you, Mr. Chair.
        I would go on a line of questioning of kind of what we've
    done in California. I think that my statement would be that
    California has probably gone about this as stringent as any
    state in the union as far as our clean air, clean water, clean
    energy, clean everything that we have done, not just of course
    on EPA standards because everyone has to go along with that but
    what the legislature has done in California to go about this.
        So I guess my questions would be, and we can start with Mr.
    Kerr, that we have seen a loss in the last ten years of about
    80,000 manufacturing jobs in California due in part to what we
    have done in California, not just by our regulations but what
    we have mandated on business and how they can interact with the
    air and the water in California. Do you think that--and I think
    Mr. Rohrabacher was going down the right line of questioning.
    Do you think we have hit a line in the road where if we go too
    far, then we're not going to just continue to hemorrhage jobs
    but America and many parts of America will be so uncompetitive
    that businesses' only choice will be to look elsewhere.
        Mr. Kerr. Thank you, Congressman. With regard to the
    question, I have to say I'm not an air pollution consultant so
    I'll just yield my time to the others here who could speak to
    that.
        Mr. Kovacs. Congressman, I think you're going to be
    surprised with my answer. I think we don't know, and the reason
    why I say that is part of--when Congress first legislated these
    acts in the 1970s, you asked for very specific information.
    There was a debate on the Floor that was really fascinating,
    and one of the members--one of the Democrats got up and said,
    you know, I'm tired of this issue being fought in this way--
    this is the end of the world or this is going to protect the
    world. They specifically said we know we're going to impact
    jobs, we know that, but Congress has a major role and we need
    information to come back to us from the Agency. You never got
    that.
        And in the 1980s and the 1990s, Congress again said we're
    going to pass the Information Quality Act, and that said is,
    the Agency has to take information from the public and the
    public has a right to challenge the Agency's information. The
    agencies, not just EPA, have refused to do that. You've asked
    for input under the unfunded mandates and the impact on states.
    States implement 92 percent of all the environmental laws, and
    EPA does not look at unfunded mandates. It generally dismisses
    and says there's no impact on the states. Even for ozone, EPA
    says there's no impact on the states. There's no unfunded
    mandate for a rule that they say is going to cost approximately
    $90 billion a year.
        So you don't know, and one of the things that's really
    needed in this issue is, we fought over the issue for too long.
    We need the information on data quality to work. We need the
    information on 321(a) in the Clean Air Act to tell you how it's
    impacted jobs because regulations aren't just something that
    happens to the whole country. Regulations are something that
    happens to an industry. So if an industry is hit and it's in
    Wisconsin or Idaho or wherever, that industry and that
    community's affected. There may be jobs created elsewhere but
    you still have an industry and a community that's been hurt,
    and you don't have that information and EPA has never given it
    to you.
        Mr. Knight. Thank you very much.
        Mr. Eisenberg. So I'll try to give you a very simple answer
    specifically for manufacturing. You're absolutely right in
    terms of manufacturers. We use about a third of the energy in
    this country. We are extremely energy-intensive. For some
    manufacturers, it is our single largest cost. There is a reason
    why a lot of the new manufacturing that is coming online is
    going to states where energy is cheap. If you are a state that
    does not have cheap energy, that is a very big difference maker
    for a lot of folks in industries that are highly energy
    intensive.
        That is not the driver; it is a driver of why manufacturers
    go into places that may not be California, which absolutely has
    extraordinarily high energy costs.
        Dr. Paulson. Mr. Knight, we know very well that air
    pollution is not confined by political borders. We know this
    very well in the United States, but it is true internationally
    as well, and we can only do what we can do in the United States
    to protect our own citizens, and Congress gave the
    Environmental Protection Agency a responsibility to protect the
    health of human beings in our country, and that is what they
    are attempting to do by lowering these pollutant limits.
        Mr. Knight. Absolutely, Dr. Paulson, and I agree. I just
    think that we possibly--and I wouldn't say ``possibly.'' I
    would say we have achieved a level that is very healthy in this
    country, and going further, we will be hurting this country and
    its ability to economically be a factor.
        And I will say what we have done in California has worked
    very well. We have six of the dirtiest ten cities in this
    country.
        Thank you, Mr. Chair.
        Chairman Smith. Thank you, Mr. Knight.
        The gentlewoman from Oregon, Ms. Bonamici, is recognized
    for questions.
        Ms. Bonamici. Thank you very much, Mr. Chairman, and I'm
    going to follow up on the discussion we were just having, and
    Mr. Chairman, you mentioned this in your opening statement too
    about diminishing the competitiveness of U.S. businesses, and
    we hear these claims that the Clean Power Plan or other
    environmental laws are going to kill jobs, hurt the economy.
    There's a suggestion that our businesses will go overseas.
        I just read this morning that Ikea just pledged a billion
    euros, which is $1.13 billion, to help slow climate change
    through renewable energy and steps to help poor nations cope
    with climate change. They said this is good for customers, good
    for the climate, and good for their company. So they found that
    customers actually value environmental responsibility, and I
    suggest that we look at that and what our customers value.
        And I also want to talk about how the numbers speak for
    themselves. The Union of Concerned Scientists just released an
    analysis that shows that most states are already making
    significant progress toward cutting carbon emissions from power
    plants, and according to that analysis, 31 states including my
    State of Oregon are already more than halfway toward meeting
    the 2020 benchmarks set out by the EPA under the Clean Power
    Plan. All but four states have already made decisions that will
    help cut their power plant emissions. Fourteen states including
    California, Kentucky, Ohio and New York are already ahead of
    the emission rate reduction trajectory because of current
    carbon-cutting decisions and actions.
        I find this very encouraging and again highlights how the
    environmental regulations can bring about positive results. Mr.
    Chairman, I ask unanimous consent to enter this analysis into
    the record.
        Chairman Smith. Without objection.
        [The information appears in Appendix II]
        Ms. Bonamici. Thank you.
        And Mr. Eisenberg, I was glad to hear you say that the
    National Association of Manufacturers believes in the mission
    of the EPA. You say that plants have the best available
    pollution control technologies, and as we were just discussing,
    history shows that regulation drives innovation. Without the
    regulation, those who are working on new technologies don't
    have a market, but with the regulation, they do, and we have
    found that new technologies are developed to meet the needs of
    regulation.
        So I want to ask, Dr. Paulson, you know, many are arguing
    that it's not just worth it, that costs are too high, and as
    you've noted, there's evidence showing that on balance, jobs
    are created, the economy expands following the passage of major
    environmental reforms. For example, in a report to Congress on
    the costs and benefits of federal regulations, OMB estimated
    that major rules promulgated by the EPA in the decade between
    2003 and 2013 had benefits between $165 billion to $850 billion
    compared to costs of $38 to $46 billion. That is a pretty
    significant return on investment.
        So Dr. Paulson, alternatively, we've talked about the costs
    of ignoring our changing climate and the public health risks
    related to increases in global temperatures, and I note that
    the death toll in India is now up to 2,500 people. Tragic over
    there.
        Climate change also has the potential to exacerbate
    existing health conditions as you've discussed such as asthma.
    Now, we've had hearings in this Committee before where we've
    talked about how the EPA is not allowed to consider the costs
    when they, for example, set the standard under the Clean Air
    Act, the ozone standard. That's sort of compared to the idea
    that you're going to make a medical diagnosis depending on how
    much the treatment's going to cost.
        So can you comment on the importance of separating the
    costs associated with attaining an ozone standard from the
    assessment of what level is appropriate to protect public
    health?
        Dr. Paulson. Health needs to be a priority, and as a
    physician, I am sworn and I took an oath long ago and still
    very much believe that oath I took to protect the health of the
    individuals that I work with, and for me, that's the kids but
    it's also their families. I cannot ethically take the
    consideration of cost into account. I certainly work with the
    families to try and make sure that they have or can access the
    financial resources for whatever it is that I or my colleagues
    may be recommending, but my responsibility is to do what is in
    the best interest of children.
        Ms. Bonamici. Thank you. I'm going to try to get one more
    quick question in to you, Dr. Paulson.
        There was a study by Syracuse and Harvard University about
    the major co-pollutants that could be reduced. So can you talk
    about some of the health co-benefits that are likely to result
    from these kinds of carbon regulations?
        Dr. Paulson. Yes. I'm a pediatrician, but let me mention
    something particular to adults, and that relates to particulate
    pollution. We know that when particle levels go up in the air,
    the next day more people are going to be admitted to the
    hospital with heart attack and strokes and die from those heart
    attacks and strokes as a result of that exposure to the
    particulates. So that's just one example.
        Another example is that we know that children grow up in
    areas of the country that have higher air pollution when they
    are finished growing, 18, 20, their lungs are smaller than kids
    who grow up in a less polluted area, and that raises the
    concern of, are these kids then set up for what we think of as
    adult-onset pulmonary disease but actually it goes back to the
    pollution that they were exposed to as children.
        Ms. Bonamici. Thank you very much.
        I see my time is expired. I yield back. Thank you, Mr.
    Chairman.
        Chairman Smith. Thank you, Ms. Bonamici.
        And I'd like unanimous consent to put in the record a New
    York Times article just a few days ago that reveals that the
    EPA solicited positive comments from outside organizations,
    perhaps in violation of lobbying laws. Without objection.
        [The information appears Appendix II]
        Chairman Smith. And the gentleman from Texas, Mr. Babin, is
    recognized.
        Mr. Babin. Yes, sir. Thank you very much, Mr. Chairman, and
    thank you to all you witnesses for being here.
        The EPA Administrator, Ms. McCarthy, Gina McCarthy, wrote
    an op-ed recently saying that the Agency's air standards
    attract new business, new investment and new jobs. I don't
    think that Administrator McCarthy is living in the same world
    as the rest of us.
        I represent the 36th District in the State of Texas, and we
    have one of the largest numbers of petrochemical plants and
    refineries in the country. Most of my district is not in
    attainment with these new regulations. I will also add that
    neither is Yellowstone National Park in attainment with these
    new regulations.
        There is no concrete evidence to support the lower standard
    for ozone that the EPA is calling for, not to mention the cost
    that is associated with it, given the strenuous economic times.
    I would now ask for a slid be placed on the screen to describe
    my district, the State of Texas, District 36. We have the
    largest manufacturing industry in the State of Texas in the
    chemical and refining industry. We directly employ or
    indirectly employ over 10,000 people down there in this portion
    of my district, and we pay $934 million in wages in this
    district with an average wage of nearly $100,000.
        These proposed new rules promise to be the most expensive
    regulations in the history of the United States, likely costing
    us thousands of jobs and prolonging a recession. This is
    bureaucratic overreach in the extreme.
        I would ask Mr. Kovacs and Mr. Eisenberg whether this is
    worth putting all of this at risk with these new regulations.
    Mr. Kovacs?
        Mr. Kovacs. Well, I think in terms of ozone, we've really
    had probably 30 years of what you're describing. I mean, look,
    going back to the early 1980s, many sectors of the economy--
    steel, foundries, carpets, furniture--you pick it, because
    nonattainment areas could not get the credits to stay
    operating, were forced either, one, to other areas of the
    country or two, they were forced overseas. And so that's been
    going on for quite some time.
        Again, I come back to the fact that these are issues that
    really should be resolved, and let me just give you one example
    as to how hard it is to resolve it. We've talked a lot today
    about science and transparency, and we've challenged EPA for
    years, but in 1999, when the Pope and Daugherty study was first
    issued, I wrote a FOIA to EPA and was denied everything. So all
    the scientific basis for a lot of what they're talking about in
    PM and ozone has been denied to the public, and the only people
    who can have access to it are EPA and their researchers.
    Chairman Smith issued a subpoena last year and couldn't get the
    information.
        One of the things that we need to have in this country is
    complete and total transparency. The Agency needs to be able to
    put its models, its science in the record. It needs to
    implement the environmental--or the Informational Quality Act.
    They need to accept information from the public and they need
    to sit down and talk about it. These--if the data's there, then
    they shouldn't be afraid of it. If it's not there then they
    should be afraid of it.
        Mr. Babin. Which is what the Secret Science Act is all
    about we're proposing.
        Mr. Eisenberg.
        Mr. Eisenberg. Thank you. To your question of whether or
    not we believe that this is the right thing for manufacturing,
    no, we don't need them to change the ozone standard if you want
    to have a manufacturing sector. I mean, that is the simple and
    straight answer, and this is not about health for us. We are
    getting the benefits of continued reductions between the
    existing ozone standard and the three dozen other regulations
    that reduce NOX emissions. We're going to be reducing ozone
    precursors by 36 percent over the next decade, so we're going
    to get there. We're going to actually be doing what we need to
    do. The only difference between that and getting--and moving
    the chains now is that you impose a significant amount of
    struggle for manufacturers to try to expand or build things to
    get basically the same result.
        So we're going to get there anyway. We can just get there
    without all of the pain that we would have to face if you don't
    move the chains on us.
        Mr. Babin. Thank you very much, and I yield back my time,
    Mr. Chairman. Thank you.
        Chairman Smith. Thank you, Mr. Beyer--thank you, Mr. Babin.
        Mr. Beyer, the gentleman from Virginia, is recognized.
        Mr. Beyer. Thank you, Mr. Chairman.
        Mr. Chairman, Mr. Eisenberg and Mr. Kovacs both cited a
    study prepared on behalf of NAM in their written testimonies,
    and this study estimates the compliance costs associated with
    an ozone standard of 65 parts per billion.
        I have an article from Bloomberg News that discusses NAM's
    study and a number of groups criticize the study and its
    methodology, saying that the study doesn't include an estimate
    of the anticipated benefits of the 65 standard, it
    overestimates compliance costs, and that it makes ``unrealistic
    assumptions.'' For example, the use of the Cash for Clunkers
    program, with which I'm very familiar, is used as the basis for
    estimating the cost of unknown pollution controls. This is
    described as ``insane and unmoored from economic reality.''
        Also, it's important to understand well what the new
    standards might cost and the savings that might generate.
    Please allow me to point out that the 2001 Supreme Court, the
    same court that put George W. Bush in the White House in Bush
    v. Gore ruled that the Clean Air Act prohibits the EPA from
    considering the cost of compliance with setting National
    Ambient Air Quality Standards.
        So Mr. Chairman, I ask unanimous consent to have this
    article entered into the record.
        Chairman Smith. Without objection.
        [The information appears Appendix II]
        Mr. Beyer. Thank you.
        Dr. Paulson, thank you for being here. The Committee
    received testimony from Dr. Mary Rice on the health impacts of
    ozone, and she indicated that the research has only grown
    stronger since the last time the EPA considered revising the
    current standard, and one area she highlighted was the new
    evidence between higher ozone levels and increased mortality.
        I grew up here in Washington, DC. There will be a number of
    times this coming summer when every TV station will be telling
    us all to stay inside because of high ozone levels. As I
    understand it, the Integrated Science Assessment for Ozone
    states that ``The current body of evidence indicates there's a
    likely causal relationship between short-term exposures to
    ozone and total mortality.'' Can you talk about this evidence?
        Dr. Paulson. Yes. Ozone causes inflammation, irritation,
    particularly in the lungs. I think an analogy that everybody I
    hope can understand is sunburn. Sunburn causes inflammation and
    irritation of the skin, and likewise, ozone does that but it
    does that in the breathing tubes in the lungs, and acutely
    that--if it's a one-time thing, if it's a few-times thing, that
    heals up and goes away just like a sunburn heals up and goes
    away. But on a chronic basis, that leads to permanent changes
    in the breathing tubes in the lung so that they no longer
    function the way they need to function to remove other
    pollutants from the lung. They become scarred. They don't
    transfer oxygen and carbon dioxide the way they should. So
    overall, pulmonary function declines and that impacts on a
    whole range of adult health issues.
        So I think that we need to bring the ozone level down.
    Levels below 60 are much safer than levels above 60, and we
    should have a standard of 60 in the United States.
        Mr. Beyer. Thank you, Dr. Paulson, very much.
        Mr. Kovacs, thank you for being here representing the
    Chamber. I was President of the Falls Church Chamber, on the
    board of Fairfax Chamber. My wife used to work for you guys at
    the U.S. Chamber.
        But I'm having trouble reconciling a number of facts. On
    the one hand, EPA's promulgated regulations in clean air, clean
    water, greenhouse gases, and all allegedly are job killers and
    profit killers. On the other hand, corporate profits are at an
    all-time high, the Dow is over 18,000 last night, 62 straight
    months of job creation, the fastest and best recovery of any
    Western economy since the Great Recession. In fact, Governor
    McCall from Virginia has now created private-sector jobs, not
    him but our economy in Virginia has created more private-sector
    jobs in these first 17 months than any government in Virginia
    history, any governor.
        In my business when we receive a new regulation, we adapt
    and we figure out the most effective way to implement and
    respond to the new rule and then we figure out how to make
    money off of it. To Mr. Knight, who I guess is gone, my
    California dealer friends are the most profitable dealers in
    the country despite their regulations. I would love to be a
    California car dealer.
        My question is, don't you give too little credit to the
    business community, to their imagination, to their operational
    excellence? Can't we have business and job success and better
    health at the same time?
        Mr. Kovacs. Well, thank you for the question. First of all,
    I give tremendous credit to the business community. They are
    extraordinarily innovative, and I am absolutely thrilled that
    your wife worked with the Chamber and you were with the Falls
    Church Chamber.
        Now, having said that, we at the Chamber, we don't really--
    when we talk about job impact and regulatory impact, we talk
    about a system that the United States constantly creates jobs
    and we're constantly creating more jobs and hope we will even
    do better in the future, but when a regulation comes out, it
    actually affects specific industries. When ozone comes out, for
    example, it's going to--initially we have the history of it
    coming out and literally knocking out, let's just say
    California or anyplace else--chemical manufacturing in certain
    areas, oil manufacturing, paint and coatings. And what happens
    is, those people truly are out of jobs, and when you look at
    the fact that if you're over 55 and you're out of a job, your
    chances are only about 25 percent of having a job the rest of
    your life, and what we're trying to impress upon them is, yes,
    it's easy to say wow, we have a lot of great technology
    companies and they're creating a lot of jobs. What's happening
    is, the regulations are putting people and communities out of
    business, and that should be just as much of a concern because
    the health impacts when a community goes out of business is
    drug abuse, heart attacks, hypertension, and all we're trying
    to say is, let's get the facts on the table and let's have an
    honest discussion. Let's put the health-related effects out,
    let's put the job-related effects out. This should not be a
    problem. This should be a problem that Congress can solve. This
    shouldn't be a problem we fight over. That's been my testimony.
        Chairman Smith. Thank you, Mr. Beyer, and the gentleman
    from Ohio, Mr. Johnson, is recognized.
        Mr. Johnson of Ohio. Thank you, Mr. Chairman.
        You know, the discussion that we're having today about the
    EPA's overreach, it's a continuing dialog, and it's disturbing.
        I went to Europe just a few weeks ago and talked with many
    of our friends and allies in Europe about energy policy, and I
    learned something there that I wasn't expecting to learn. Over
    the last 20 years, they have been advancing beyond the United
    States in shutting down coal-fired power and investing in
    renewable energies and those kinds of things, reducing the
    amount of coal that they had in their energy portfolio. When we
    talked energy policy with many of our friends there, we learned
    that a lot of those countries, some of those countries are
    increasing their mix of coal-fired power in their energy
    profiles, and when we asked them why, they said our ratepayers
    are simply unwilling to bear the burden of the high cost of
    providing energy to their homes and to their businesses. Europe
    has learned this lesson, that coal-fired power is still the
    most reliable, affordable energy on the planet.
        Do we need to keep our air clean? Absolutely we do. Do we
    need to keep our water clean? Absolutely we do. Dr. Paulson,
    you made some impassioned comments about the health
    implications. Not everybody, though, Dr. Paulson, agrees with
    some of the statistics that you said. For example, today the
    average life expectancy in the United States is 80 years, one
    of the highest in the world. There's a New York Times article
    that came out October 8, 2014, that said a child born in
    America today will live longer than at any other time in
    history, and these are scientists saying this. That report came
    from the Centers for Disease Control.
        In the USA Today on April 9, 2015, it cites an EPA report
    says the EPA reports that are our air quality has substantially
    improved, aggregate emissions of common pollutants have
    decreased 62 percent between 1980 and 2015. It goes on to say
    it is unlikely that cleaner air is causing an increase in
    asthma.
        So, you know, what I have to wrestle with, and I think what
    the American people are wrestling with is, when is enough
    enough? When does it become--when does the scale tip towards
    irresponsibility to continue trying to cripple the American
    economy and eliminate opportunities for millions of Americans
    just to move the CO2 emission needle a smidgen?
        Folks, I submit that we have reached that breaking point.
    We've passed that breaking point. There are serious legal
    questions to the EPA's jurisdiction and their legal basis for
    their Clean Power Plan, and I think it's something that's got
    to be seriously considered by this body and by the American
    people.
        Let me get to some specific questions. Mr. Kovacs and Mr.
    Eisenberg, by the year 2030, the EPA believes their proposed
    Clean Power Plan will allow the United States to reduce carbon
    emissions from the power sector by 30 percent or below the 2005
    levels, a roughly 17 percent cut from 2013 levels.
        To achieve these reductions, EPA calculated a specific
    emissions rate for each state by totaling the CO2
    emissions produced by each State's electricity-generating units
    and dividing it from the total amount of electricity generated
    by the EGUs. Then the EPA proposed emissions reduction targets
    based on the carbon intensity of each state's electricity
    sector.
        My question to you gentlemen, do you believe the proposed
    performance standards are achievable? Mr. Kovacs?
        Mr. Kovacs. I think the easiest way to address your
    question is to start off with one of your conclusions where
    ``enough is enough,'' and I think at that point in time, I
    don't think you can get to dealing with the present regulatory
    system without a change in the Administrative Procedure Act,
    and Chairman Smith is very familiar with this. But right now
    you can't get the kind of data into the system that you need.
    You can't get the Agency to participate and you can't get the
    Agency to look and talk to the public the way it needs to.
    Until you can get the kind of early-on input where people say
    here's what we think and the Agency says here's what we have,
    and you begin the discussion 90 days before rule, and then you
    begin to have the Information Quality Act put into the system
    where people can actually say oh, this is the data.
        You have--Congress has to find some way to get the process
    to work. There is nothing with the law that court decisions
    have come down on deference and with the way the agencies
    ignore Congress. Congress has to make a fundamental change in
    how rules are made.
        And the last point, because I don't want to just
    filibuster, but the last point is, there are 4,000 rules coming
    out every year. Three thousand seven hundred really work.
    Ninety-five percent of the system works. It's -- we're talking
    two or three or four major rules a year, and most of those
    rules come out of EPA. So when you look at the whole regulatory
    system, you don't need to throw it all away, but for those
    major rules that are over a billion dollars that fundamentally
    change society, you have to have a new way of approaching it.
        Mr. Johnson of Ohio. My time's expired, but Mr. Eisenberg,
    would you want to respond to that?
        Mr. Eisenberg. Sure. I mean, certainly in the case of
    ozone, these rules are not achievable, and it's actually a good
    opportunity to explain what our studies had. Our study actually
    had the same methodology as EPA's study. I mean, it was exactly
    the same. As far as known controls, we used the same stuff,
    same numbers because we believed them. Where we differ with EPA
    is on the 65 percent of controls that you need to comply that
    are unknown controls. You don't have to--it's not--you still
    have to do it. We just had to figure out how to do it at that
    point. I would love to be able to tell you we can innovate, and
    maybe we will, and if we don't----
        Chairman Smith. Mr. Eisenberg, thank you, and Mr. Johnson
    as well.
        The gentleman from New York, Mr. Tonko, is recognized.
        Mr. Tonko. Thank you, Mr. Chair, and thank you to our
    witnesses.
        Mr. Chair, in his testimony, Mr. Eisenberg cites a study, a
    study released by the National Association of Manufacturers
    last September, I believe. It's titled ``The Cost of Federal
    Regulation to the United States Economy, Manufacturing and
    Small Business.'' According to the study, regulations cost the
    economy $2 trillion in 2012. Now, fortunately, a review of that
    study was done. The results of that study indicate clearly that
    that number is not accurate and that number is based on a
    flawed analysis.
        I have here in front of me a review of the National
    Association of Manufacturers study by Professor Kolstad from
    Stanford University. Professor Kolstad in this study was asked
    to grade it and gave it a C minus. In his review of the study,
    he states that the--and I quote--``study reads as an advocacy
    document. The authors focus only on the costs of regulation,
    ignoring the benefits. The authors also don't follow the
    standard in academic practice of discussing uncertainties in
    their analyses and their results are highly uncertain. All of
    these factors make it difficult to determine the quality of the
    responses and lead to the conclusions that the results are
    unreliable.''
        Mr. chair, I ask that--by unanimous consent that the review
    of the National Association of Manufacturers' study be entered
    into the record.
        Chairman Smith. Without objection.
        [The information appears Appendix II]
        Mr. Tonko. Dr. Paulson, as you are well aware, beyond the
    economic costs associated with climate change, there are very
    serious public health risks related to increases in the global
    temperature, for example, longer heat waves, changes in water
    and air quality, and foodborne and insectborne disease. Climate
    change also has the potential to exacerbate existing health
    conditions such as asthma and adversely impact vulnerable
    populations like children that you serve and the elderly.
        What kinds of ongoing health risks are expected if the
    current climate trends continue, and do these risks, in your
    opinion, vary by region of our country?
        Dr. Paulson. Mr. Tonko, yes, they do vary by region. We are
    already seeing significant impacts in terms of injuries and
    deaths among native populations in Alaska because of changes in
    the ice and other factors there. We will and are seeing in the
    rest of the country--we will see more problems with asthma, as
    you have mentioned. We have seen over the last 5 to ten years a
    change in the range, the number of counties and states that--
    where Lyme disease is a problem and as the climate continues to
    change, we will see continued changes in that disease and other
    diseases such as we may begin to see indigenous malaria here in
    the United States. We will start to have problems from sea-
    level rise. We are--I'm a resident of Virginia and I live in
    Mr. Beyer's district, so we don't quite see that so much in
    Alexandria but certainly in the Norfolk region, the Hampton
    Roads region. We are seeing that, and that will continue and
    impact on other parts of the country with sea-level rise. We
    lose quality of water for agriculture and for drinking. So
    there's going to be a vast array of impacts, it will vary by
    part of the country, and it will disproportionately--and these
    impacts will disproportionately fall on children and other
    vulnerable populations.
        Mr. Tonko. Right, and we've also seen some of the
    proposals, the expected impacts on coastal areas of New York
    State.
        How can implementing the Clean Power Plan help states
    address these public health impacts of climate change?
        Dr. Paulson. First and foremost, all reductions in CO2
    production will slow the rate of temperature change associated
    with excess CO2, and if we can get CO2
    levels down in the long run, while some of these issues will
    continue to occur for a while, we can stop the progress of
    climate change in the long run.
        I think that again in the long run, we need to be very
    concerned about food availability and quality of food that's
    going to be impacted from higher temperatures. People are
    literally--and we're seeing this unfortunately now in India,
    people are literally not going to be able to go out and plant
    and harvest when the temperatures are extremely high. The
    plants will not grow and produce the bountiful resources that
    we require and derive from them. The quality of the food may be
    decreased. So there are a lot of impacts that we're going to
    have to deal with.
        Mr. Tonko. I thank you, and with that, Mr. Chair, I yield
    back.
        Chairman Smith. Thank you, Mr. Tonko, and the gentleman
    from Texas, Mr. Neugebauer, is recognized--oh, I'm sorry. I
    skipped over Mr. Loudermilk from Georgia.
        Mr. Loudermilk. Thank you, Mr. Chairman.
        One of the issues that we run into I've found out in my
    brief time here in Congress is getting down to the true facts,
    and part of getting the true facts in science is that getting
    away from presenting facts that justify an end but making your
    end justified off the facts that are before you.
        I live ten miles from one of the largest coal-fired plants
    in the nation, and Mr. Chairman, to your point earlier, this
    plant, you really can't see the smoke when it comes out, but
    what comes out is white but it's steam that's used to cool
    that.
        But Dr. Paulson, you brought up something that was
    concerning to me because I live ten miles from one of the
    largest coal-fired plants in the nation. My one-year-old
    granddaughter lives about 11 miles from it. And you brought up
    in your statement, you said that outdoor air pollution is
    linked to respiratory problems in children including decreased
    lung function, coughing, wheezing, more frequent respiratory
    illnesses and so on, and that is true. A quick check--you are
    absolutely right. It is linked to air pollution. But Dr.
    Paulson, can you tell me what is the greatest contributing
    factor to asthma worldwide according to the World Health
    Organization?
        Dr. Paulson. I don't know exactly what the World Health
    Organization has said is the greatest contributing factor.
    Genetics is certainly an issue. Smoking is clearly issue.
    That's another form of----
        Mr. Loudermilk. Do you know where air pollution ranks?
        Dr. Paulson. No, sir, I don't.
        Mr. Loudermilk. Last. The greatest contributor to asthma--
    and I was surprised to find out that asthma is one of the top
    causes of deaths in children worldwide. I was very shocked. The
    top seven contributors are all related to poor sanitary
    conditions in the home which are linked to poverty. It is
    greatest in the most impoverished nations in the world. Number
    seven is outdoor allergens, which if somebody could do
    something about pollen in Georgia, I'd really appreciate it,
    but the only thing you can do is cut down trees, and we've been
    stopped from doing that as well. Tobacco smoke is number eight.
    Number nine is chemical irritants in the workplace, which again
    goes back to industrialized nations that don't have the
    regulations that we have in place. Number ten and last is air
    pollution.
        I live, as I said, ten miles from the largest coal-fired
    plant in the nation, but it happens to be the cleanest, one of
    the cleanest coal-fired plants in the nation. Georgia Power,
    who runs that plant, has spent twice as much money in cleaning
    up the emissions from that plant as it cost to build the plant
    when it was first constructed.
        But a few years ago, because of this Administration's
    regulations, Georgia Power has to shut down three coal-fired
    plants, which cost 700 jobs. Now, I don't have anything to
    enter into the record, Mr. Chairman, other than what I've seen
    with my own eyes. If you've ever gone into an area, especially
    in our part of Georgia, to where a plant has shut down and a
    lot of cases it's because they couldn't afford to operate
    because of the regulatory environment in this nation, you go
    into those areas where those workers, which are usually factory
    workers who are skilled in that particular job, have no other
    job to go to. When you go in those towns, you start seeing
    these type of issues. You see poor sanitary conditions because
    they're unemployed or they're underemployed or they have no job
    at all. They're doing what they can to scrape by, and we start
    seeing an increase in poverty.
        So my question is, are we throwing out the baby with the
    bathwater because we're focusing on what is the least
    contributing factor toward a disease which would result in a
    greater contributing factor as more Americans lose their jobs,
    as more jobs go overseas? In fact, the President signed an
    agreement with China that they would promise to start limiting
    their emissions by 2030 while we're lowering our emissions
    pushing more jobs overseas.
        So my question to the panel is, am I off base? Are we going
    to lose more jobs in this nation because of the direction we're
    going, which will result in a problem greater than what we have
    right now? Mr. Eisenberg, you're in the manufacturing arena,
    and that's where we've seen the greatest impact?
        Mr. Eisenberg. Look, understand what I'm saying today. In
    almost every case, we're comfortable with regulation but we
    have regulations and those regulations are working, and it's
    really about figuring out where that sweet spot is between
    having a regulation that protects the environment and health
    and making sure that we can actually do our jobs. In the cases
    that we've cited today, they've gone a step too far. We're
    asking them to take a step back towards normalcy.
        Mr. Loudermilk. With that, Mr. Chairman, I see I'm out of
    time. I would love to continue this on but I'll yield back.
        Chairman Smith. Thank you, Mr. Loudermilk. I appreciate
    that.
        The gentleman from Texas, Mr. Neugebauer, is recognized for
    questions.
        Mr. Neugebauer. Thank you, Mr. Chairman.
        Mr. Kerr, you know, since 1986, EPA and the Corps has only
    had jurisdiction over the wetlands adjacent to other
    jurisdictional waters. Can you explain in detail the rule's new
    concept of adjacent waters?
        Mr. Kerr. Yes.
        Mr. Neugebauer. I'm over here in the cheap seats.
        Mr. Kerr. Thank you, Congressman. Yeah, prior to the new
    rule, through court precedent, the Corps regulated wetlands
    that were adjacent to waters that themselves were not wetlands.
    What does that mean? If you go to a major river and there's a
    large wetland next to the river, there's a dike built through
    that wetland, the wetland on the other side of the dike, the
    landward side was regulated. But if there was a small pond that
    had been abandoned because the farmer stopped working a certain
    area or he moved hogs off of that area and that pond was in a
    field that became wooded and he didn't use it for more than
    five years, the Corps would typically consider that an isolated
    water, and that's the way it's been working up until May 27th
    with the new rule. Under the new rule, that pond can now be
    regulated as an adjacent water so it's a change in how they
    approach it.
        The other thing is that there's a site that I worked on
    with a development client where there were several small
    isolated wetlands. The Corps of Engineers back in the late
    1990s confirmed them to be isolated wetlands, and the
    Commonwealth of Virginia regulated those wetlands. Under
    today's rule, those wetlands would also be considered adjacent
    and under the jurisdiction of the federal government. So those
    are two ways that it's changed.
        Mr. Neugebauer. So to your knowledge, is there legal
    precedent for the agencies to establish jurisdiction over these
    waters?
        Mr. Kerr. The short answer is no. There is no court
    decision that required the Corps of Engineers to change how
    adjacency was determined, to my knowledge, and I've been doing
    it for 26 years.
        Mr. Neugebauer. So as a wetlands delineator, or can you
    describe how the new adjacent-waters definitions including the
    neighboring definition will change the way you make your
    jurisdictional determinations?
        Mr. Kerr. Yeah, those two examples are two clear examples.
    The third is the portion, much like manufacturers--I mean,
    there are certain parts of this rule that are understandable,
    they're relatively reasonable. The one issue with adjacency
    that gives me greatest concern is the criteria that says any
    water within 1,500 feet of a traditionally navigable water is
    by definition, by rule adjacent and therefore jurisdictional
    under the Clean Water Act. In the coastal areas--and I come
    from the coastal plain of Virginia--but this goes from Texas
    to, you know, the coast of New York, you are now extending this
    measuring stick out 1,500 feet, and anything that falls within
    that--and you measure 1,500 feet from the innermost limits of
    tidal waters, tidal creeks, tidal bays miles inland from the
    ocean, you extent this measuring stick 1,500 feet, and anything
    within that zone is jurisdictional as an adjacent water by
    rule. That's a dramatic change.
        Mr. Neugebauer. I want to get to talking about ditches, and
    I think one of the things that my agriculture community thinks,
    has concerns that by--those people that believe that EPA has
    exempted some of the ditches from their jurisdiction, or EPA is
    telling, I guess, the agriculture community that. Do you
    believe that's in fact true?
        Mr. Kerr. If I could give you just a little context for my
    opinion on that, our firm just recently completed a delineation
    that involved over 56,000 linear feet of ditches. So just
    around ten miles of ditches. We had to walk them all, and we
    asserted they were non-jurisdictional. It took about a year, I
    think, to get the confirmation that in fact they were non-
    jurisdictional. Under today's rule, I can tell you, I can walk
    you to these ditches that are now jurisdictional. As has been
    said, there are two criteria about ditches that I think are
    fine, and they're the first two. The last one to me is the
    recapture provision, and in fact, I went through the entire
    preamble, 200 pages. I've read what I can find on it, and
    there's not a specific mention of how they arrived at the third
    criteria, and the issue with it is, that it says ditches that
    don't flow through another water are exempt. Ditches virtually
    by definition flow into a water of the United States, and we
    have an example where the water in the United States was a
    channelized stream, was eight feet below grade. There are some
    ditches three feet below grade that, you know, kind of like a
    waterfall discharge into this creek. The water never--you know,
    this ditch does not touch the bottom of that ditch. The water
    falls through the air about five feet, runs down the edge of
    the embankment when there's water. These are intermittent
    streams--or ditches. Those ditches would be regulated as a
    tributary of the United States under this rule. I am sure of
    it.
        Mr. Neugebauer. So there is still confusion out there and
    uncertainty when it comes to the ditches issue?
        Mr. Kerr. Yes, sir. If I could, one suggestion I would
    have, it seems to work in Virginia. I don't want to claim that
    it would work nationally. But I would like to see, as someone
    else here mentioned, an opportunity where the EPA gets a
    roundtable together, a technical advisory committee, and allows
    that technical advisory committee to provide direct input, and
    it would have conservation groups, industry, consultants, the
    entire gamut, work on an issue for--in Virginia it's up to 180
    days before a rule goes out for public comment. So you would
    still have public comment. I think 180 days is better than 90.
    I don't think--I think with these large regulatory issues,
    they're too complicated to do too quickly.
        Chairman Smith. Mr. Kerr, I think that's a good idea. Thank
    you. Thank you, Mr. Neugebauer.
        The gentleman from Texas, Mr. Weber, is recognized.
        Mr. Weber. Thank you.
        Mr. Kerr, you said earlier isolated wetlands were not
    regulated by the EPA according to a Supreme Court case. Can you
    give me the name of that case?
        Mr. Kerr. Yes, SWANCC.
        Mr. Weber. S-w-a-n-k?
        Mr. Kerr. S-W-A-N-C-C, I think, Southern Water -- Southern
    Waste Management Authority. It was a county in Chicago.
        Mr. Weber. Perfect. Thank you.
        Mr. Eisenberg, you said manufacturers use one-third of the
    energy in the United States. You know, I have five ports in
    Texas. We export a whole lot of things and we have a lot of
    petrochemical industry and oil and natural gas and on and on
    and on. When I speak to groups, I often say that the things
    that make America great are the things that America makes. How
    do we do that with a stable, reliable, affordable, dependable
    energy supply? Mr. Kerr, would you agree with that, that
    America is great because of the things we make and we have a
    good energy supply to fuel, for lack of a better word, our
    industry?
        Mr. Kerr. Yes.
        Mr. Weber. Mr. Kovacs, would you agree with that?
        Mr. Kovacs. Yes.
        Mr. Weber. Dr. Paulson, would you agree with that?
        Dr. Paulson. I don't know enough to comment. I think you're
    right but I don't know.
        Mr. Weber. Mr. Eisenberg, would you agree with that?
        Mr. Eisenberg. I do.
        Mr. Weber. Good. Mr. Eisenberg, you also said that 65
    percent of the controls the EPA was mandating were not
    identifiable. Is that true?
        Mr. Eisenberg. Yes. It's EPA term of art. They call them
    unknown controls. They just----
        Mr. Weber. Okay.
        Mr. Eisenberg. --can't tell us what they are.
        Mr. Weber. And Mr. Kovacs, if I remember your testimony,
    you said that the EPA itself said this was going to be the most
    expensive regulation in history but that it wouldn't impact
    states.
        Mr. Kovacs. Yes, that's--they have this technical where if
    it's a mandate, they don't--and the state has to do it, they
    don't count it as----
        Mr. Weber. So that was your comment, right?
        Mr. Kovacs. Yes.
        Mr. Weber. Okay. Good. So let me come back to you, Mr.
    Kovacs. It's the most expensive regulatory rule in history but
    it's not going to impact states. Does that sound commonsensical
    to you, Mr. Kovacs?
        Mr. Kovacs. Well, that's been the point of my testimony,
    that Congress has legislated for years common sense and you
    haven't gotten it.
        Mr. Weber. So is your answer no, it's not commonsensical?
        Mr. Kovacs. It's not common sense.
        Mr. Weber. Mr. Kerr, would you agree that that statement
    doesn't sound commonsensical? It's the most expensive
    regulation in history but it won't impact states.
        Mr. Kerr. I think that's nonsensical.
        Mr. Weber. Dr. Paulson, would you agree with that?
        Dr. Paulson. Sir, I have no idea what the context is so I
    can't comment.
        Mr. Weber. Mr. Eisenberg, would you agree with that?
        Mr. Eisenberg. I would agree.
        Mr. Weber. Mr. Eisenberg, when an energy plant builds a
    plant--and I had a nuclear plant in my district when I was
    state rep. When an energy plant--when someone comes in to build
    an energy plant, permitting and all, the process takes three to
    five years?
        Mr. Eisenberg. If you're lucky.
        Mr. Weber. If we're lucky. Okay. So if it's that hard on us
    and the EPA is making it harder and harder and harder, and it's
    billions of dollars, does it surprise you that some of those
    investors that have that kind of money to invest actually send
    that money overseas? Does that surprise you?
        Mr. Eisenberg. It doesn't at all. Streamlining that process
    is a priority.
        Mr. Weber. Dr. Paulson, does that surprise you?
        Dr. Paulson. Again, that's beyond my expertise, sir.
        Mr. Weber. It's above your pay level, pay grade?
        Dr. Paulson. I don't use that terminology but it's beyond
    my expertise.
        Mr. Weber. Mr. Kovacs, does that surprise you?
        Mr. Kovacs. No.
        Mr. Weber. Mr. Kerr?
        Mr. Kerr. I'll say this is--the energy policy is outside my
    purview.
        Mr. Weber. Okay. You know, when I was a state rep I was on
    the environmental reg committee in Texas and I came up here to
    Congress--D.C.--in March of 2010 to an Energy and Environment
    Committee Meeting, National Conference of State Legislators,
    NCSL. I heard with my own ears an Under Secretary for the EPA
    back then say that they wanted to permit farms because of
    global warming, greenhouse gases, average farm permit $26,500
    per farm. Now, they had done the math, and Doctor, I trust you
    can do math. Okay, good. You didn't seem to want to weigh in on
    most of the other questions. They had calculated the income
    stream--now, this is their words, not mine--a revenue stream of
    $600 million. It turns, you know, that the streams on farms and
    ranches aren't the only streams the EPA is interested in, okay?
    Six hundred million dollars. Now, is the EPA really only
    interested in science when they say they want to permit farms
    and it produces a revenue stream of $600 million? Does that
    sound like they're interested in more than science, Mr.
    Eisenberg?
        Mr. Eisenberg. So I don't know that I can effectively
    answer that one but I mean, they need to find a balance.
        Mr. Weber. They do. They're going to kill our energy supply
    if we're not careful, and Dr. Paulson, we're going to wind up,
    poor kids are going to all be broke. They're going to be
    healthy but we're all going to be broke. That's the danger of
    losing jobs and sending our energy overseas because China and
    Mexico and India are not going to follow suit.
        So I'm going to stop there. That's my editorial, Mr.
    Chairman. I appreciate you letting me go over. I yield back.
        Chairman Smith. Thank you, Mr. Weber, and the gentleman
    from Alabama, Mr. Palmer, is recognized.
        Mr. Palmer. Thank you, Mr. Chairman.
        I want to start out by addressing air quality, and I have
    here the air quality section from a report done by the Alabama
    Policy Institute that shows that since 1980, our GDP has
    increased by 467 percent, vehicle miles traveled up 94 percent.
    The population's grown by 38 percent. Energy consumption is up
    22 percent. But emissions are down 50 percent. When you look at
    the air quality index and the percentage of days per year that
    the air quality index exceeded the standards, we went from
    about 24 percent in 1980 to about two percent. So there's no
    question that we have done an excellent job of improving air
    quality yet the asthma rate has gone up. I think that's been
    mentioned several times.
        I'd also like to point out that there might be other
    factors that cause asthma rates to have gone up, and for
    instance, here's a report from UCLA, University of California,
    Los Angeles, in case anyone wonders what the acronym is. It
    says asthma disproportionately affects low-income populations,
    and the percentages are astonishing, frankly, that it would
    have such a higher prevalence among low-income families when I
    think--and I'll ask my colleague from California, Mr. Knight, I
    believe that higher-income families breathe the same air as the
    low-income families. So, Mr. Chairman, I'd like to enter into
    the record the article and the section from the report on air
    quality, and I'll also point out----
        Chairman Smith. Without objection.
        [The information appears Appendix II]
        Mr. Palmer. Thank you.
        As well that there is an estimate on what the ozone--new
    ozone regulations will cost. I find it interesting, Mr. Kerr,
    that the EPA seems to think that there's not going to be an
    impact. Is it possible in your mind just rationally thinking
    this through that the additional regulations that are being
    imposed on businesses that are going to result in substantial
    job losses, that's going to result in less disposable household
    income, that will result in lower incomes could have a more
    negative effect on health and well-being of people than any
    positive effect that additional regulations would impose,
    considering the improvements that we've made already?
        Mr. Kerr. I'll have to concede to the others because I
    don't do air quality consulting.
        Mr. Palmer. My question is, do the people who work for the
    businesses of the United States and earn income do better in
    terms of health and well-being than people who have no income
    and no job?
        Mr. Kerr. Yes, sir, they do.
        Mr. Palmer. That's part of what I would consider
    commonsense policy.
        In May of--in a May 29, 2015, interview with PBS News Hour,
    EPA Administrator Gina McCarthy stated the following: that
    farmers will know very clearly here we are clearly explaining
    that irrigation ditches are not included. We have clearly said
    in the rule beyond this rule adds absolutely no regulatory or
    permitting issue to agriculture whatsoever. Do you agree with
    that statement?
        Mr. Kerr. No, I don't. If I could get a chance to elaborate
    at some point, I'd like to give you time to ask more questions.
        Mr. Palmer. Okay. We'll come back to that as the last
    opportunity for you to speak.
        Mr. Kerr, former EPA Office of Water Deputy Administrator
    Nancy Stoner previously stated that the rule will not have a
    negative effect on small businesses. She said the Agency sought
    early and wide input from small businesses while developing the
    proposed rule including meetings as far back as 2011. Do you
    agree with this statement, that the rule will not have a
    negative impact on small businesses?
        Mr. Kerr. I disagree with the statement. I've talked to
    small homebuilders. You know, regulatory creep is already
    having an effect.
        Mr. Palmer. Well, that conclusion is consistent with what
    the National Federation of Independent Business concluded. They
    had a Small Business Optimism Index and found that small
    business owners attributed regulations as the single-most
    important problem facing businesses today.
        So you said that you'd like to elaborate on something. You
    may do so.
        Mr. Kerr. Thank you. Well, two parts. When a farmer in
    Chesapeake is looking to sell his land and needs a wetland
    delineation done so that the prospective purchaser can
    determine where they can build, we're walking out into soybean
    fields and looking at areas that show up as moist signatures on
    aerial photographs and looking to see if there might be some
    wetland plants or stunted vegetation in a crop field, and the
    Corps of Engineers before this rule are regulating those areas
    as wetlands. Now, if they're isolated, then the Corps--the
    federal government does not take jurisdiction; the Commonwealth
    of Virginia would. If they're adjacent to a ditch that's
    adjacent to a wetland, all of a sudden they are regulating it.
    Now, that--that has already crept into the procedure, and I've
    argued consistently that it shouldn't because Congress went to
    the Corps back in 1990 and said create what's called a PC
    cropland, prior converted cropland. They had--there was a
    regulatory guidance letter the Corps put out, 90-7, that
    spelled out the procedures for that that exempted agricultural
    fields as long as they didn't pond or flood for 7 to 14 days.
    Any portions that did would be considered a farmed wetland and
    be regulated.
        In 1993, the EPA and the Corps put out a rule that said
    we're codifying regulatory guidance letter 90-7, and you would
    think, I thought--I'm a consultant. I know 90-7. They said they
    codified it, which would have perpetuated this exemption for
    most farm fields that were farmed prior to 1985, don't pond or
    flood for very long duration and have never been abandoned for
    more than five years.
        With that rule in place, they're now telling me that what
    that actually means is that they don't recognize the prior
    converted cropland rule created by the NRCS under the Food
    Subsidy Act and that the Corps doesn't recognize 90-7 anymore
    at all anywhere at any time, and I've repeatedly asked the
    question, and the rule that's just been passed, they simply
    said we're not changing that because we weren't--that's not
    part of our charge. They changed adjacency definition and that
    wasn't part of their charge. I would love to see Congress--to
    me, there's no confusion. In fact, there's a court in Florida
    that's already decided this case, which I brought to the Corps'
    attention, which didn't get any traction, and that judge said
    you can have two different rules that use the same phrase and
    they mean two different things because they fall under two
    federal laws. That's not occurring, and we have farm ditches
    and farmland being regulated today and it'll continue.
        Mr. Palmer. Mr. Chairman, just one last point. I want to
    point out that Dr. Phillip Lloyd, former U.N. International
    Panel on Climate Change lead author, found that global
    temperature change over the last 100 years is well within the
    natural variability of the last 8,000 years. Standard deviation
    over the last 8,000 years is .98 degrees Celsius. I want to
    emphasis point 98----
        Chairman Smith. Thank you----
        Mr. Palmer. Over the last years it's been .85 degrees
    Celsius.
        Chairman Smith. Thank you, Mr. Palmer, and if you would
    give us a document to put into the record as well.
        Mr. Moolenaar, the gentleman from Michigan, is recognized.
        Mr. Moolenaar. Thank you, Mr. Chairman.
        Mr. Kerr, I'd just like to continue following up with you
    and then also talk to Mr. Kovacs and Mr. Eisenberg on some of
    the Waters of the United States issues. What in your judgment--
    there were some court cases. There's the Clean Air Act and
    there was an effort by the EPA to clarify its jurisdiction. Is
    that really how we've gotten to this point?
        Mr. Kerr. Yes. There were a few Supreme Court decisions,
    SWANCC being one, Rapanos being one of the other two or three
    major ones. That's correct.
        Mr. Moolenaar. And so in your judgment, were they trying to
    solve a policy problem that existed out there where people
    throughout the country were saying, you know, there's not
    enough water or--what problem other than the legal issues were
    they trying to solve?
        Mr. Kerr. Two real problems. One is the legal question, and
    there was some ambiguity because of multiple Supreme Court
    decisions that had to be looked at in the field, and then it
    became the practical problem of how do you provide guidance to
    regulatory staff and consultants that's clear, easily
    understandable and could be consistently applied, not only in
    an area but across the entire country. So that was the
    challenge, and they tried to take in science, and in the
    preamble of the rule, they said those are the three compelling
    issues they have to deal with--science, policy and law--and
    they said that science in fact falls short in certain areas,
    and they've got to reach a policy decision that's consistent
    with the law.
        Mr. Moolenaar. And in your judgment, it's gotten actually
    more complicated. Some of these new definitions, rather than
    giving clarity, have really expanded their jurisdiction and
    raised a number of new questions.
        Mr. Kerr. Yeah, they've kind of moved items around, and so
    things that were previously one thing like possibly an isolated
    water that wasn't regulated can become an adjacent water. The
    other thing is, they did create a bright line but the bright
    line--and I'm speaking specifically to rule A8, wetlands that
    show a significant nexus to traditionally navigable waters,
    allows that to be applied to any feature within 4,000 feet of
    an ordinary high-water mark or a tributary.
        Now, we're not talking about rivers, we're not talking
    about streams, we're not talking about creeks. Where I come
    from, there were creaks, then there were smaller ones that were
    cricks. We're not talking about those. We're way up into the
    headwaters of ephemeral and intermittent streams and then going
    4,000 feet out to determine a significant nexus.
        My point is that that includes virtually the entire
    watershed of virtually every place that I've looked. So they
    created a bright line but it includes everything.
        Mr. Moolenaar. So in your judgment, and I wanted to hear
    from Mr. Kovacs and Mr. Eisenberg, do you view this as a
    significant expansion of their jurisdiction, of their
    authority? I mean, is that your conclusion?
        Mr. Kerr. Yeah, and they've--it's not any clearer. They've
    expanded jurisdiction into areas that heretofore may not have
    been regulated or weren't regulated, and the procedures aren't
    any clearer. They provided some bright lines, and some of those
    are commendable but others are just--they kind of grab all
    kinds of things and don't create the simplicity that anyone was
    looking for.
        Mr. Moolenaar. Mr. Kovacs, do you view this as a
    significant expansion of their jurisdiction or authority?
        Mr. Kovacs. Well, it certainly is significant expansion of
    their authority. I think what troubles me the most in this
    whole argument is not once in all the hundreds of pages that
    they have did they ever say that the states weren't doing a
    good job on state waters, which is really remarkable. Second,
    that they never said that the water quality that was
    administered by the states was in any way impaired. That's
    quite remarkable. Under unfunded mandates, they make it very
    clear that they are imposing no mandates on state and local
    governments, and in terms of small business they say there's
    absolutely no impact even though they're greatly enhancing
    jurisdiction.
        This is a shell game, and this is what the whole regulatory
    process has become, and that's why I keep on pleading, Congress
    really needs to take more action and get back in the game.
        Mr. Moolenaar. Let me go to Mr. Eisenberg.
        Mr. Eisenberg. So we just finished our annual fly-in. We
    had 500 manufacturers coming to town. I had dinner two nights
    ago with about 25 of them to talk specifically about water
    issues, water scarcity, waters of the United States, things
    like this, and at the end of the meal I said look, is this--are
    you guys in a better place because of this regulation, and
    every single one of them said no. It is still causing them
    headaches. All we wanted was clarity. Had we gotten clarity, my
    testimony would have been a lot different today. We didn't get
    it.
        Mr. Moolenaar. Thank you, Mr. Chairman.
        Chairman Smith. Thank you, Mr. Moolenaar.
        Before we conclude, Dr. Paulson, I was going to mention to
    you that we contacted the Assistant Director of the Capital
    Power Plant, and he confirmed that whether it burns natural gas
    or coal, the smoke is still white, and while I certainly have
    sympathy for any child who's gotten asthma, you might want to
    check with the doctor about his statement that whenever the
    smoke turned black, the asthma became worse. I'm not sure that
    there's a basis for that. But I look forward to hearing more
    information about it as well.
        Thank you--the gentlewoman from Texas.
        Ms. Johnson of Texas. Thank you, Mr. Chairman. Let me thank
    all the witnesses. I want to ask unanimous consent to put an
    article from the Scientific magazine in the record that speaks
    to the role of science and rulemaking process.
        Chairman Smith. Without objection.
        [The information appears Appendix II]
        Chairman Smith. We thank you all for your testimony today,
    very helpful, very informative, and we stand adjourned.
        [Whereupon, at 11:09 a.m., the Committee was adjourned.]

                                   Appendix I

                                  ----------

                         Answers to Post-Hearing Questions
    Responses by Mr. Bill Kovacs
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Responses by Dr. Jerome A. Paulson
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Responses by Mr. Ross Eisenberg
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                  Appendix II

                                  ----------

                       Additional Material for the Record

                 Documents submitted by Chairman Lamar S. Smith

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

          Documents submitted by Ranking Member Eddie Bernice Johnson

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

          Documents submitted by Representative Donna F. Edwards

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

          Documents submitted by Representative Suzanne Bonamici

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

          Documents submitted by Representative Don S. Beyers

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

          Documents submitted by Representative Paul Tonko

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

          Documents submitted by Representative Gary Palmer

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                     [all]