[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
THE FISCAL YEAR 2016 EPA BUDGET
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND POWER
AND THE
SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 25, 2015
__________
Serial No. 114-11
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
____________
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95-492 PDF WASHINGTON : 2015
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Chairman Emeritus Ranking Member
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania ELIOT L. ENGEL, New York
GREG WALDEN, Oregon GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington KATHY CASTOR, Florida
GREGG HARPER, Mississippi JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky PETER WELCH, Vermont
PETE OLSON, Texas BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia PAUL TONKO, New York
MIKE POMPEO, Kansas JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida KURT SCHRADER, Oregon
BILL JOHNSON, Ohio JOSEPH P. KENNEDY, III,
BILLY LONG, Missouri Massachusetts
RENEE L. ELLMERS, North Carolina TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
(ii)
Subcommittee on Energy and Power
ED WHITFIELD, Kentucky
Chairman
PETE OLSON, Texas BOBBY L. RUSH, Illinois
Vice Chairman Ranking Member
JOHN SHIMKUS, Illinois JERRY McNERNEY, California
JOSEPH R. PITTS, Pennsylvania PAUL TONKO, New York
ROBERT E. LATTA, Ohio ELIOT L. ENGEL, New York
GREGG HARPER, Vice Chairman GENE GREEN, Texas
DAVID B. McKINLEY, West Virginia LOIS CAPPS, California
MIKE POMPEO, Kansas MICHAEL F. DOYLE, Pennsylvania
ADAM KINZINGER, Illinois KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia JOHN P. SARBANES, Maryland
BILL JOHNSON, Ohio PETER WELCH, Vermont
BILLY LONG, Missouri JOHN A. YARMUTH, Kentucky
RENEE L. ELLMERS, North Carolina DAVID LOEBSACK, Iowa
BILL FLORES, Texas FRANK PALLONE, Jr., New Jersey (ex
MARKWAYNE MULLIN, Oklahoma officio)
RICHARD HUDSON, North Carolina
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
------
Subcommittee on Environment and the Economy
JOHN SHIMKUS, Illinois
Chairman
GREGG HARPER, Vice Chairman PAUL TONKO, New York
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky KURT SCHRADER, Oregon
JOSEPH R. PITTS, Pennsylvania GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio LOIS CAPPS, California
DAVID B. McKINLEY, West Virginia MICHAEL F. DOYLE, Pennsylvania
BILL JOHNSON, Ohio JERRY McNERNEY, California
LARRY BUCSHON, Indiana TONY CARDENAS, California
BILL FLORES, Texas FRANK PALLONE, Jr., New Jersey (ex
RICHARD HUDSON, North Carolina officio)
KEVIN CRAMER, North Dakota
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 1
Prepared statement........................................... 2
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 3
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 4
Prepared statement........................................... 6
Hon. Paul Tonko, a Representative in Congress from the State of
New York, opening statement.................................... 7
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 8
Prepared statement........................................... 9
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 9
Witness
Hon. Gina McCarthy, Administrator, Environmental Protection
Agency......................................................... 11
Prepared statement........................................... 13
Answers to submitted questions \1\........................... 79
Submitted Material
Chart, ``EPA Proposed CO2 Rule,'' submitted by Mr.
Shimkus........................................................ 5
Slide, ``Counties Where Measured Ozone is Above Proposed Range of
Standards (65-70 parts per billion),'' submitted by Mr. Olson.. 30
Report, ``Pending 2015 Ozone NAAQS: Implications for Texas,''
Texas Department of Transportation, January 2015, \2\ submitted
by Mr. Olson................................................... 31
Slide, ``Table 4-10. Summary of Known and Unknown Emission
Reductions by Alternative Standard Levels in 2025, Except
California (1,000 tons/year),'' submitted by Mr. Olson......... 32
Slide, ``Ozone 67-99%,'' submitted by Mr. Olson.................. 34
Slide, ``Ratio of U.S. Background to Total Seasonal Mean 03,''
submitted by Mr. Olson......................................... 35
Letter of January 16, 2015, from Steve Hagle, Deputy Director,
Office of Air, Texas Commission on Environmental Quality, to
Mr. Olson, submitted by Mr. Olson.............................. 37
Report of The Beacon Hill Institute at Suffolk University, ``The
Economic Effects of the New EPA Rules on the United States,''
January 2015, \3\ submitted by Mr. Scalise..................... 76
----------
\1\ The information has been retained in committee files and also
is available at http://docs.house.gov/meetings/IF/IF03/
20150225/103014/HHRG-114-IF03-Wstate-McCarthyG-20150225-
SD003.pdf.
\2\ The information has been retained in committee files and also
is available at http://docs.house.gov/meetings/IF/IF03/
20150225/103014/HHRG-114-IF03-20150225-SD011.pdf.
\3\ The information has been retained in committee files and also
is available at http://docs.house.gov/meetings/IF/IF03/
20150225/103014/HHRG-114-IF03-20150225-SD008.pdf.
THE FISCAL YEAR 2016 EPA BUDGET
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WEDNESDAY, FEBRUARY 25, 2015
House of Representatives,
Subcommittee on Energy and Power
joint with the
Subcommittee on Environment and the Economy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittees met, pursuant to call, at 10:00 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Ed
Whitfield (chairman of the subcommittee on Energy and Power)
presiding.
Members present: Representatives Whitfield, Shimkus, Olson,
Harper, Barton, Pitts, Murphy, Latta, McKinley, Pompeo,
Kinzinger, Griffith, Johnson, Bucshon, Flores, Mullin, Hudson,
Cramer, Upton (ex officio), Rush, Green, DeGette, Castor,
Sarbanes, Welch, Yarmuth, Loebsack, Schrader, Cardenas, and
Pallone (ex officio).
Also present: Representative Scalise.
Staff present: Nick Abraham, Legislative Clerk; Gary
Andres, Staff Director; Charlotte Baker, Deputy Communications
Director; Sean Bonyun, Communications Director; Leighton Brown,
Press Assistant; Allison Busbee, Policy Coordinator, Energy and
Power; Jerry Couri, Senior Environmental Policy Advisor;
Patrick Currier, Counsel, Energy and Power; Tom Hassenboehler,
Chief Counsel, Energy and Power; Charles Ingebretson, Chief
Counsel, Oversight and Investigations; Ben Lieberman, Counsel,
Energy and Power; David McCarthy, Chief Counsel, Environment
and the Economy; Brandon Mooney, Professional Staff Member,
Energy and Power; Mary Neumayr, Senior Energy Counsel; Chris
Sarley, Policy Coordinator, Environment and the Economy; Peter
Spencer, Professional Staff Member, Oversight; Michael Goo,
Democratic Senior Counsel, Energy and Environment; Caitlin
Haberman, Democratic Professional Staff Member; and Rick
Kessler, Democratic Senior Advisor and Staff Director, Energy
and Environment.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. I would like to call the hearing to order
this morning. Today the Energy and Power and the Environment
and the Economy Subcommittee will be examining the
Environmental Protection Agency's fiscal year 2016 budget
request. And before you start my time, I certainly want to
welcome Administrator Gina McCarthy. Thank you very much for
being with us today. You have been before our committee many
times, and we certainly enjoy working with you. You are an able
Administrator. We have very significant differences of views on
what you are doing up there, or down there, but we will all
have an opportunity today to ask questions. And thank you, once
again, for taking time to be with us. We appreciate it. And at
this time I recognize myself for 3 minutes for an opening
statement.
I would say, first of all, we all are very much aware that
President Obama has made it very clear that he considers
climate change to be one of the major issues facing mankind
today. I was reading an article just a few days ago how this
administration has spent 14 times more on green energy per year
than embassy security around the world. As a matter of fact,
over the last 5 years the administration has spent roughly $39
billion a year financing grants, subsidizing tax credits,
guaranteeing loans, bailing out solar energy boondoggles, and
otherwise underwriting every renewable energy idea under the
sun.
Now, we all recognize that climate change is occurring. The
fundamental difference is we don't believe it is the number one
issue facing mankind, and the President does. And because of
his going around all over the world and entering into
international agreements that the Congress has not agreed to,
that he has not consulted with Congress about, he is committing
the U.S. to meet certain requirements. And so many of the rules
coming out of EPA which are so controversial are really being
implemented to implement the President's June 2013 speech, in
which he outlined his Climate Action Plan.
So I was reading a legal opinion recently, and it said a
President's speech is certainly not a matter of law. But the
President, making these international agreements, has, through
regulation, pursued his commitments that he is making. But
other countries that are part of these agreements, they are not
doing the same thing, so the U.S. is being penalized because of
these extreme actions.
So what you all are doing, and I am reading from a legal
opinion that Mr. Tribe wrote, you are forcing a select set of
victims, including coal relying consumers, communities,
regions, businesses, and utilities to bear a substantial part
of what is a global problem that even you, and your
predecessor, indicated that these regulations would not solve.
So you are asking for 425 million more dollars than last year.
A lot of that money is going to go to hire additional lawyers
to defend and litigate these extreme regulations. So we look
forward to the opportunity today of exploring this situation
with you.
[The prepared statement of Mr. Whitfield follows:]
Prepared statement of Hon. Ed Whitfield
This morning, the Energy and Power and the Environment and
the Economy Subcommittees will explore the Environmental
Protection Agency's (EPA) FY 2016 budget proposal, and I
welcome Administrator McCarthy to this hearing. The proposed
budget is $8.59 billion, a $452 million increase over last
year's appropriation.
This amount is more than enough to allow the Agency to
perform its required duties under the Clean Air Act and all the
other statutes that it administers. The problem is that the
Obama EPA has strayed well beyond its legitimate functions and
has embarked on an expansive and expensive global warming
regulatory agenda that is on shaky legal ground and is bad
policy for the country.
Most problematic of all is the proposed Clean Power Plan
and the Agency's attempted Federal takeover of State
electricity systems. In that plan, the Agency is seeking to
dictate to States how electricity will be generated,
transmitted, and used. The Agency is regulating far outside its
authority, and reveals as much in its Congressional
justification for the FY 2016 budget. In this document, EPA
refers to the Clean Power Plan as ``unprecedented,
``groundbreaking,'' and ``unique,'' and admits that it
``requires the Agency to tap into technical and policy
expertise not traditionally needed in EPA regulatory
development.'' EPA says these things in order to justify the
considerable outlays needed to pursue this regulatory detour,
but in my view it raises serious questions whether the Agency
has the authority to do so in the first place.
Perhaps the most disturbing admission of all is that the
Agency anticipates the need to hire many new lawyers to
implement this highly complicated rule and defend it against
litigation from States and other opponents. To me, the fact
that EPA thinks it has to lawyer-up to fight State governments
is a sure sign that the Clean Power Plan is not in the best
interests of the American people. I would much prefer that the
Agency work cooperatively with the States and listen to their
concerns rather than try to beat them in court.
The Clean Power Plan for existing power plants is only part
of the Agency's rulemaking agenda targeting coal and increasing
costs to ratepayers. There is also the proposed New Source
Performance Standards that effectively outlaw new coal-fired
generation. There is the very expensive ``Utility MACT'' rule
that is already contributing to power plant shutdowns, as well
as the Cross-State Air Pollution rule, the regional haze
requirements, and others. We will also have a much more
stringent ozone rule, which would adversely affect electricity
generation as well as manufacturing. As a result, we are
already seeing rising electric bills and reliability concerns
due to this anti-coal agenda, and the worst is yet to come.
While the Agency has embarked on its global warming agenda
and other regulatory overreaches, it has dropped the ball badly
on many of its non-discretionary duties. Most notably, EPA has
repeatedly missed the statutorily imposed deadlines for
implementing the Renewable Fuel Standard. The 2014 rule was
supposed to have been finalized by November 30, 2013, so that
regulated companies would know ahead of time what will be
required of them. Instead, the Agency has still not finalized
its rule, and 2014 is already over. Some biofuel companies have
literally gone out of business while EPA has failed to act. The
same is true for many other non-discretionary duties that the
Agency has delayed or ignored.
The Agency's atrocious record meeting its required
deadlines stands in sharp contrast to the front-burner status
given to its discretionary global warming agenda, and now the
administration is requesting even larger sums to expand this
agenda. I cannot help but think that the manpower and dollars
going to global warming is partly responsible for the Agency's
neglect elsewhere. The Obama administration may consider global
warming to be its number one priority, but I certainly don't,
and I am disturbed to see the extent the Agency is willing to
shirk its actual responsibilities to focus on it. As it is,
EPA's agenda is badly out of line with the law and with the
public interest, and unfortunately this budget is a reflection
of that.
Mr. Whitfield. And, with that, we are doing 3 minutes
today, Mr. Rush, so I recognize the gentleman for a 3-minute
opening statement.
OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Rush. Well, thank you, Mr. Chairman. Administrator
McCarthy, it is always a pleasure to see you come before this
subcommittee, and bring great news, and sharing with this
subcommittee all the great work that you all are doing over at
the EPA. And I just want to thank you so much, you and your
Agency, for all of the great work that you do in protecting the
air, and land, and water on behalf of the American people. If
it was appropriate, I would get up and ask for a standing
ovation, but I don't think that that would be appropriate at
this point in time. But you understand how we feel about you on
this side.
While this is a budget hearing, we might as well address
the elephant in the room, and discuss the topic that is on the
minds of many of my colleagues, and that is the proposed Rule
111(d), the Clean Power Plan. Madam Administrator, on behalf of
those of us, which includes most of the American people, who do
not believe that the world's scientists and climatologists have
all conspired together to perpetrate a hoax by saying that
climate change is real, and humans have contributed to it, I
would like to commend the leadership of President Obama,
yourself, for working to address this serious issue that
impacts all of America, all of our citizenry, and indeed
everyone else around the globe.
The Clean Power Plan represents a significant opportunity
to shift away from some of the dirtiest carbon emitting energy
sources that have contributed greatly to polluting the
atmosphere to cleaner, more sustainable forms of energy that
will help pull us back from the brink of disaster, and set us
on a more stable footing. Madam Administrator, I applaud EPA
for striking a flexible, State-based approach that provides
States, utilities, and grid operators with time and options for
finding ways to reduce their CO2 emissions, while
also maintaining a form of reliable energy for consumers.
I just want to thank you, Madam Chairman. I look forward to
engaging with you during the question portion of today's
hearing. And I yield back the balance of my time.
Mr. Whitfield. Thank you, Mr. Rush. At this time I would
like to recognize the gentleman from Illinois, Mr. Shimkus, the
chairman of the Environment and Economy Subcommittee.
OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Shimkus. Thank you, Chairman Whitfield, for recognizing
me, and I do want to welcome Administrator McCarthy. I
appreciate your willingness to work with us in the past on such
things as electronic submission of hazardous waste manifests.
That actually can be very helpful. As I spoke to you earlier,
we look forward in collaborating with you on the coal ash
legislation, and also on Toxic Substance Control Act.
For me, today's hearing is not just an administrative
exercise where we do bean counting. While we don't write the
checks the Agency cashes, most of the major legal authority
that underpins the work delegated to the Agency rests within
this committee. Today's hearing gives us a chance to compare
the Agency's individual budget request with EPA's underlying
statutory authority.
As a legislator, I have many questions where I think more
information is needed to evaluate how statutory mandates are
being carried out. For example, I have questions about the
statutory nexus with the following budget request and policies
that are being implemented, like the Clean Power Plan, the
Climate Ready Water Utilities Program, and regulations under
the Clean Air Act implementing Executive Order 13-650, which I
think is chemical safety.
Legal authority aside, we know these regulations can become
complicated to implement, with unclear guidance adding
unnecessary costs to the regulated industries, and ultimately
to the consumer.
[Chart follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
This chart, we think, shows how cumbersome your proposal on
the Clean Power Plan could be just by itself. Maybe you have a
better chart that makes it a little more simplistic. If this
plan puts reliability at risk, and the base load energy from
sources such as coal and nuclear power in danger, communities
may pay higher costs, and potentially suffer brown-outs when
most in need. We have to ask ourselves if this plan leads to
the energy future Americans expect. I believe there is a better
way, and that we can find solutions to these challenges without
placing the burden on the backs of consumers, or by sacrificing
power plants that provide good paying jobs to families across
the country.
I will also have questions about funding and pace of
activity on chemicals under the Toxic Substances Control Act,
specifically on the Agency's transparency concerning
prioritizing and setting policy choices. These areas will be
particularly important as we look to work across the aisle on
both sides of the cabal to update this law.
Again, I thank the Administrator for being here. I look
forward to today's conversation, and the ones that will follow.
[The prepared statement of Mr. Shimkus follows:]
Prepared statement of Hon. John Shimkus
I thank Chairman Whitfield for recognizing me, and I, too,
want to welcome the Administrator once again to our hearing
here today.
I appreciate the Administrators willingness to work
productively with us in the past on issues such as creating a
legal framework for electronic submission of hazardous waste
manifests. We again look forward to collaborating with you as
we work to enact coal ash legislation and a bill to reform the
Toxic Substances Control Act.
For me, today's hearing is not just an administrative
exercise where we do bean counting. While we don't write the
checks the Agency cashes, most of the major legal authority
that underpins the work delegated to the Agency rests within
this committee. Today's hearing gives us a chance to compare
the Agency's individual budget requests with EPA's underlying
statutory authorities.
As a legislator, I have many questions where I think more
information is needed to evaluate how statutory mandates are
being carried out.
For example, I have questions about the statutory nexus
with the following budget requests and policies they are
implementing:
1. The Clean Power Plan,
2. The Climate Ready Water Utilities program, and
3. Regulations under the Clean Air Act implementing
Executive Order 13650.
Legal authority aside, we know these regulations can become
complicated to implement with unclear guidance, adding
unnecessary costs to the regulated industries and ultimately to
the consumer. This chart shows just how cumbersome EPA's
proposed clean power plan is just by itself. If this plan puts
reliable base load energy from sources such as coal and nuclear
in danger, communities may face higher costs and potentially
suffer brown outs when most in need. We have to ask ourselves
if this path leads to the energy future Americans expect. I
believe there is a better way, and that we can find solutions
to these challenges without placing the burden on the backs of
consumers or by sacrificing power plants that provide good
paying jobs to families across the country.
I also have questions about funding and pace of activity on
chemicals under the Toxic Substances Control Act, specifically
on the Agency's transparency concerning prioritizing and
setting policy choices. These areas will be particularly
important as we look to work across the aisle on both side of
the Capitol to update this law.
Mr. Shimkus. I would like to yield the remainder of my time
to Chairman Emeritus Barton, I think.
Mr. Barton. I am here, all 27 seconds of me.
Mr. Shimkus. You are welcome.
Mr. Barton. Madam Administrator, we are always glad to see
you. You are very accessible, and you are very personable in
public, and when we have private conversations. I am going to
ask you about the China policy the President recently
announced, and I am also going to talk to you about the
renewable fuel standard, and the RINs situation, which, as you
well know, under current law, is simply not workable. But we do
appreciate your accessibility, and look forward to the
interchange.
Mr. Whitfield. Gentleman's time has expired. At this time I
recognize the gentleman from New York, Mr. Tonko, the ranking
member of the Environment and Economy Subcommittee.
OPENING STATEMENT OF HON. PAUL TONKO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Tonko. Thank you, and good morning. Thanks to Chair
Whitfield and Chair Shimkus for holding this hearing on the
Environmental Protection Agency's budget request. And welcome,
Administrator McCarthy. We appreciate your keen intellect, and
I respect your passion to provide sound stewardship for our
environment, all while growing jobs. And I thank you for being
here today to discuss the President's fiscal year 2016 budget
request for the Agency.
The EPA plays a vital role in the lives of our citizens,
and in maintaining the resource base that sustains our society,
and indeed our economy. As you state in the opening of your
testimony, Administrator McCarthy, public health and a clean
environment are inextricably linked. I agree. And the record of
environmental achievement and economic growth over the years
demonstrates that environmental protection is consistent with a
strong and vital economy. In fact, if we are willing to make
investments in vital environmental infrastructure, such as our
drinking water treatment and delivery, source water protection,
sewage treatment, and waste to energy systems, we can create
thousands of jobs, and improve the condition of our rivers, our
lakes, and our coastlines. We are not saving by avoiding these
investments. At best, we are transferring these costs to State
and local governments, to businesses and to individual
citizens. But even worse, by delaying needed maintenance and
repairs, we are raising the costs of the very systems upon
which we depend.
When polluted land and water are not cleaned up, the
resources become unavailable for productive use. A contaminated
property is unoccupied, undeveloped, and generates no revenue
for our economy and for our community. Pollution that is not
attended to spreads, leading to additional problems. And it
does not become less expensive to clean these up at a later
time. The cost only rises. Our failure to repair vital
infrastructure, and to the address the complex challenges of
climate change, has already cost us a great deal.
Infrastructure does not repair itself, and the pace and impact
of climate change, both are increasing. We need to address
these issues now, before the costs rise further.
I know there are many members who believe that cutting the
EPA budget is a good thing for the economy, because a lower
budget will block the Agency from issuing regulations and
enforcing environmental laws. In fact, much of the EPA budget
supports State and local governments, either through grants and
loans, or with information and technical assistance that is so
welcome. Cuts to the EPA budget translate into extra burden on
our States, our local, and tribal governments. The
administration and the Congress should be working together to
ensure that we maintain and improve upon our record of
environmental protection. EPA's budget is an important part of
that effort, and I indeed look forward to your testimony,
Administrator McCarthy, and to working with you to continue our
progress as a Nation in environmental protection. And thank you
again for joining us.
Mr. Whitfield. Gentleman's time has expired. At this time I
would recognize the chairman of the full committee, Mr. Upton,
for 3 minutes.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Thank you, Mr. Chairman, and we do appreciate
the Administrator of EPA for appearing before us today to
discuss the budget requests and priorities. Yes, we have sharp
areas of disagreement, but together, the two of us, we have
never been disagreeable, and I look forward to the continued
relationship.
I am sad to say that the budget request, to me, looks like
we can expect more of the same red tape and costly rules, and
that concerns me, because I think some of these regs are going
to cost American households and families big time. They are
going to cost our businesses, particularly manufacturing.
Manufacturing in Michigan, as you know, and across the country,
finally does have an edge. For the first time in years, major
global manufacturers are eyeing Michigan, and other States, to
set up or relocate operations--is on the side of American
workers, but EPA's regulatory agenda does threaten to raise the
costs, and shift the advantage back to foreign manufacturers.
EPA seems intent on locking in a long list of new regs that
will bind future administrations. Along with the Clean Power
Plan, EPA has proposed new ozone standards that may prove to be
the most expensive rule ever. I would like to see EPA focus on
its current responsibilities before taking on new ones. The
Agency is working on this new ozone rule even though it is well
behind schedule implementing the existing standard. And the
Agency routinely misses its deadlines under the RFS, making
this problematic program even more difficult. And I remember
your testimony last year, when we thought we would have an
answer last spring.
While we do have our clear differences, your testimony
today also presents an opportunity to explore areas of common
ground. For example, we can embrace much of the EPA rule on
coal ash, but go a step further and place permitting authority
in the States. This should work for EPA, making sure that the
EPA's control standards are effectively enforced. This should
also work much better for the States, who will have explicit
benchmarks to meet, and the authority to manage the
implementation. It would also work for the people responsible
for handling the combustion residuals every day, including
plant operators, recyclers, and other job creators, who will be
given the opportunity and the regulatory certainty that they
need.
Likewise, it was clear last year that your goals, and ours,
for TSCA reform overlap. So let us sit down and work together
on good legislation that is bipartisan to improve safety for
the public, and to ensure a robust interstate market for
chemicals and products that contain them. Thanks for being with
us today. Yield back.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Welcome Administrator McCarthy. We appreciate you appearing
before us today to discuss EPA's budget request and priorities.
We do have areas of sharp disagreement, but I am hopeful our
time together will not be disagreeable.
I am sad to say the budget request looks like we can expect
more of the same red tape and costly rules. And that concerns
me because I think these regulations are going to cost American
households and families. They are going to cost our businesses,
particularly manufacturing. Manufacturers in Michigan and
across the country finally have an edge. For the first time in
years, major global manufacturers are eyeing Michigan and other
States to set up or relocate operations. Momentum is on the
side of American workers. But EPA's regulatory agenda threatens
to raise costs and shift the advantage back to foreign
manufacturers.
EPA seems intent on locking-in a long list of new
regulations that will bind future administrations. Along with
the Clean Power Plan, EPA has a proposed new ozone standard
that may prove to be the most expensive rule ever. It may also
propose new measures targeting methane emissions from oil and
natural gas production. The shale revolution has been one of
the few bright spots in the economy in recent years. We should
be focusing on ways to leverage and multiply the benefits--for
example, by creating jobs building energy infrastructure. The
last thing we should do is jeopardize these benefits with rules
that may make drilling in America too expensive.
I'd like to see EPA focus on its current responsibilities
before taking on new ones. The Agency is working on a new ozone
rule even though it is well behind schedule implementing the
existing standard. And the Agency routinely misses its
deadlines under the Renewable Fuel Standard, making this
problematic program even more difficult.
While we do have our clear differences, your testimony
today also presents an opportunity to explore areas of common
ground. For example, we can embrace much of the EPA rule on
coal ash, but go a step further and place permitting authority
in the States. This should work for EPA making sure that the
EPA's control standards are effectively enforced. It should
also work much better for the States who will have explicit
benchmarks to meet and the authority to manage the
implementation. It will also work for the people responsible
for handling the combustion residuals every day, including
plant operators, recyclers, and other job creators who will be
given the regulatory certainty they need.
Likewise, it was clear last year that your goals and ours
for TSCA reform overlap. Let's sit down and work out good
legislation to improve safety for the public and to ensure a
robust interstate market for chemicals and products that
contain them.
Mr. Whitfield. Gentleman yields back. At this time I
recognize the ranking member, Mr. Pallone of New Jersey, for 3
minutes.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairmen Whitfield and Shimkus, and
also our ranking members, Rush and Tonko. And thank you,
Administrator McCarthy, for being here today.
A clean environment is not a luxury. It is essential to
public health, and to a strong economy, and the EPA is on the
front lines of the effort to make our air safer to breathe, and
our water safer to drink. The President's fiscal year 2016
budget funds the EPA at 8.6 billion, an increase of more than
450 million over the fiscal year 2014 enacted level, and that
is the minimum amount, in my opinion, that EPA needs to begin
to address the many environmental challenges we are facing
today, which happen to include the greatest known environmental
threat and challenge to our planet, and that is climate change.
Meanwhile, funds requested for EPA represent a small
portion of the overall Federal budget, less than \1/4\ of 1
percent, yet over 40 percent is shared with the States and
tribes to help them implement Federal environmental laws and
achieve national goals, and those funds support local economies
and communities big and small. For example, the budget includes
significant funding for Superfund and brownfields cleanup. In
addition to protecting human health and the environment, these
cleanup projects are also promoting substantial economic
growth, and gains in community and property value.
According to a recent analysis, on-site businesses and
organizations on current and former Superfund sites in just one
of EPA's nine regions provides over 6,200 jobs, and contribute
an estimated $334 million in annual employment income. Another
study found that properties within three miles of Superfund
sites experienced an 18.6 percent to 24 \1/2\ percent increase
in value when the sites are cleaned up. The fiscal year 2016
budget would also invest in our Nation's aging drinking water
infrastructure by providing over a billion for State revolving
funds under the Safe Drinking Water Act, and these funds will
support needed infrastructure projects for public drinking
water systems well beyond this fiscal year.
Also important, I want to commend the President for
prioritizing actions to reduce the impacts of climate change in
this budget. The budget provides funding for EPA's Clean Power
Plan, including money to help States develop their own
strategies, and request a new Clean Power State Incentive Fund
for State efforts to go above and beyond their carbon pollution
reduction goals in the power sector. Some say the Clean Power
Plan is problematic for an economy, but the reality is that
over the past 40 years, clean air regulations have produced
tremendous public health benefits, while also supporting
America's economic growth.
And close to home, I appreciate the efforts to help smaller
communities build climate resiliency. My district has the
dubious distinction of being one of the hardest hit by Super
Storm Sandy, and the EPA's plan can help communities integrate
climate adaptation planning into their efforts to upgrade their
infrastructure. This planning will be essential to protecting
the economies of communities facing the devastating costs of
climate change.
This is a sound budget. I support it, and I look forward to
learning from Administrator McCarthy. Thank you.
Mr. Whitfield. Thank you very much, Mr. Pallone. At this
time that concludes the opening statements, so, at this time,
Ms. McCarthy, you are recognized for your 5 minutes of
testimony. Thank you.
STATEMENT OF THE HONORABLE GINA MCCARTHY, ADMINISTRATOR,
ENVIRONMENTAL PROTECTION AGENCY
Ms. McCarthy. Thank you, Chairmen Whitfield and Shimkus.
Thank you, Ranking Members Rush and Tonko, and the members of
the committee for giving me the opportunity today to appear
before you to discuss the Environmental Protection Agency's
proposed fiscal year 2016 budget. I am joined by the Agency's
Acting Chief Financial Officer, David Bloom.
The EPA's budget request of $8.592 billion in discretionary
funding for the 2016 fiscal year provides the resources that
are vital to protecting human health and the environment, while
building a solid path forward for sustainable economic growth.
Since 1970, when the EPA was founded, we have seen over and
over again that a safe environment and a strong economy go hand
in hand.
This budget supports essential work to address climate
change, improve air quality, protect our water, safeguard the
public from toxic chemicals, support communities' environmental
health, maintain core enforcement strength, support needed
research, and work towards a sustainable future for all
Americans. Effective environmental protection is a joint effort
of EPA, States, and our tribal partners. We are setting a high
bar for continuing our partnership efforts, and looking for
opportunities for closer collaboration and targeted joint
planning and governance processes through efforts like e-
Enterprise governance approach. That is why the largest part of
our budget, $3.6 billion, or 42 percent, is provided directly
to State and tribal partners.
The fiscal year 2016 request includes an increase of $108
million for State and tribal categorical grants. This budget
requests $1.1 billion to address climate change and improve air
quality. These resources will help protect those most
vulnerable to climate impacts and the harmful health effects of
air pollution through common sense standards, guidelines, and
partnership programs.
Climate change is not just an environmental challenge. It
is a threat to public health, our domestic and global economy,
and to national and international security. The request
supports the President's Climate Action Plan, and in particular
the Clean Power Plan, which establishes carbon pollution
standards for power plants. In addition, the President's budget
calls for a $4 billion Clean Power State Incentive Fund to
support State efforts to accelerate carbon pollution reductions
in the power sector.
Protecting the Nation's waters remains a top priority for
EPA. In fiscal year 2016 we will finalize and support
implementation of the Clean Water Rule, which will clarify the
types of waters covered under the Clean Water Act, and foster
more certain and efficient business decisions to protect the
Nation's waters. Recognizing the need for water infrastructure,
the SRF and related efforts are funded at over $2.3 billion,
and we will work with our partners to help communities by
focusing on issues such as financial planning for future public
infrastructure investments, and expanded efforts with States to
identify financing opportunities for resilient drinking water,
water, and storm water infrastructure. Last month the Agency
launched the Water Infrastructure and Resiliency Finance
Center. It is a key component of our expanded efforts moving
forward.
We are proposing a multifaceted effort to help our
communities, including low-income neighborhoods, rural
communities, and communities of color. This includes targeted
funding, and on the ground community assistance through EPA
regional coordinators, and a network of circuit riders. An
investment of $16.2 million will help local communities improve
safety and security at chemical facilities to prevent and
prepare for oil spills. These efforts represent a shared
commitment among those with a stake in chemical facility safety
and security, ranging from facility owners to first responders.
The fiscal year 2016 budget request will let us continue to
make a real and visible difference to communities every day. It
will give us a foundation to improve infrastructure across the
country, and it will sustain State, tribal, and Federal
environmental efforts all across our programs.
With this proposed budget, the President is not only
sending a clear signal about the resources EPA needs to work
effectively and efficiently with States and tribes to protect
public health and the environment, it is also a part of an
overall Federal budget proposal that does not accept the bad
public policy embodied in sequestration, and does not hold back
needed resources in non-defense spending in order to increase
needed defense spending, or vice versa. Instead, the
President's proposed fiscal year 2016 budget finds a path
forward to avoid sequestration, and properly support both
domestic and national security interests.
Mr. Chairman, I thank you for the opportunity to testify,
and I look forward to answering your questions.
[The prepared statement of Ms. McCarthy follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Well, thank you very much for your
testimony, Ms. McCarthy, and I will recognize myself 5 minutes
for questions.
First question I would just ask you is how confident are
you that you can defend the use of 111(d) to implement the
existing coal plant rule?
Ms. McCarthy. I am sorry, could you repeat that question?
Sorry.
Mr. Whitfield. How confident are you that you can
successfully defend the use of 111(d) to implement the existing
coal plant----
Ms. McCarthy. Thank you.
Mr. Whitfield (continuing). Rule?
Ms. McCarthy. I feel very confident. One of the reasons I
say that is because of the extensive outreach that the Agency
has done to each and every State, to all the stakeholders,
including the environmental and energy stakeholders. I feel
confident that we are seeing plans develop now that will be
very sound, and that we can move this forward in a way that
will both be beneficial----
Mr. Whitfield. So you think the outreach would pre-empt
what the explicit language says? That is your position----
Ms. McCarthy. I think the outreach has helped inform the
explicit language----
Mr. Whitfield. OK.
Ms. McCarthy (continuing). So that it is reasonable and
fair, and it is going to allow states to move forward.
Mr. Whitfield. Now, in your submission, your budget
document, you talk about further efforts are required to put
the country on an emission trajectory consistent with the
President's long term climate goals. Now, I assume that you are
talking about the commitments that he made in Copenhagen and in
China, in which he said that he wanted to reduce carbon dioxide
emissions in America by 17 percent below 2005 levels by 2020,
and then 26 to 28 percent below those level by 2025. Is that
correct?
Ms. McCarthy. I think I am referring to the President's
understanding that climate change is a significant issue that
the administration has the authority and responsibility to
address, and I am trying to make sure that we deliver our
portion of that plan effectively.
Mr. Whitfield. Well, how did they decide on 17 percent
below 2005 levels by 2020?
Ms. McCarthy. That was an international goal that the U.S.
Government put forth in those----
Mr. Whitfield. So the U.S.----
Ms. McCarthy. I----
Mr. Whitfield (continuing). Government presented that? That
was what the goal was?
Ms. McCarthy. Yes, as part of the----
Mr. Whitfield. And how was that determined by the U.S.
Government? How did they reach that conclusion?
Ms. McCarthy. I think you would have to speak with the
Department of State to know the ins and outs of that
discussion.
Mr. Whitfield. Have you had any discussions with them about
that----
Ms. McCarthy. Certainly. We have talked about the rules
that the Agency had underway----
Mr. Whitfield. I mean----
Ms. McCarthy (continuing). At that time, and----
Mr. Whitfield. I mean, I could make the argument it is
pretty arbitrary. Could I make that argument or not?
Ms. McCarthy. I think that what we are talking about now,
and the plan that is before you, the budget plan, is very
concrete. Authorities that the EPA has are responsibilities,
and will be concrete steps moving forward that are measurable.
Mr. Whitfield. Yes, but one thing that bothers us, when you
testified on the Senate in July of 2014, you had mentioned that
this is not about pollution control. You said it in your
statement, this is not about pollution control. So this must be
about honoring the President's commitment.
Ms. McCarthy. My statement was referring to the fact that,
when you seek to address carbon pollution, there are many ways
in which it is an investment opportunity, instead of an end of
pipe pollution control technology.
Mr. Whitfield. So, in other words, this is about investment
opportunities, from your perspective?
Ms. McCarthy. What I am suggesting is that States can look
at this as an opportunity----
Mr. Whitfield. But it is not----
Ms. McCarthy (continuing). To invest in their----
Mr. Whitfield. But it is not about pollution control?
Ms. McCarthy. It is not about the installation of pollution
control technology.
Mr. Whitfield. All right. Would the President's Clean Power
Plan meet his international commitments without the adoption of
these rules that you are proposing?
Ms. McCarthy. I think that the President has established
some aggressive goals for this Nation that are commensurate
with our interests in addressing climate domestically, and also
meeting our commitment internationally to address this issue.
But EPA is not focusing our legal efforts----
Mr. Whitfield. Um-hum.
Ms. McCarthy (continuing). On any particular international
or domestic goal. They are just implementing the authorities
under the Clean Air Act that are given to us.
Mr. Whitfield. See, the reason many of us in Congress are
so upset about this is that the cap and trade system was
rejected by the Congress, and yet the President goes out and
makes international commitments, does not consult with
Congress, comes back, announces, at his Georgetown speech, this
is my plan, and then EPA follows up, and we are going to issue
these regulations to meet the President's plan so that he could
meet his international agreements.
Ms. McCarthy. Well, the Clean Power Plan is a direct
application of the authority that Congress gave us to look at
how to establish a best system of emission reductions for the
power sector to address carbon pollution, which is a regulated
pollutant under the Clean Air Act.
Mr. Whitfield. I want to ask more questions, but my time is
out, so----
Ms. McCarthy. Thank you, sir.
Mr. Whitfield (continuing). At this time I recognize Mr.
Rush for 5 minutes.
Mr. Rush. Again, I am going to thank you, Administrator
McCarthy. Also, I want to express my gratitude for the meeting
that I had with Acting Assistant Administrator Janet McKean
last January, I believe it was, where we discussed my concerns
regarding the nuclear provision in the proposed 111(d) rule.
And as I stated in my opening statement, it is important that
the finalized rule gives new credit to all zero emission
sources of energy, which not only includes renewables such as
solar, wind, hydro, and geothermal, all of which I fully
support, but also nuclear power generation.
As you know, my home State of Illinois is home to the
highest number of nuclear reactors, 11, that provide up to 48
percent of the State's electricity. These carbon-free nuclear
generators run all above 90 percent capacity, which is
extremely efficient in comparison to any other type of energy
source. The goal of the Clean Power Plan is to reduce carbon
emissions, while also ensuring that States can continue to
provide reasonably priced safe, reliable electricity to its
consumers, then nuclear power must play a central role in
helping to achieve this objective.
While I realize that there are other market-based
considerations that are resultant in nuclear being somewhat
less competitive, I feel as though the EPA must work to
finalize a rule that incentivizes States to preserve nuclear
power in their energy portfolios by valuing nuclear generation
on par with other common free sources. It is critical that the
final 111(d) rule helps promote the continued use of zero
emission generation, such as both renewable and nuclear energy
if we are actually going to achieve the carbon reductions that
the regulation was intended to produce.
My question to you, Madam Administrator, would you agree
that nuclear power must play a vital role in the Clean Power
Plan, in that it allows States to provide zero emissions-based
loan power generation that is affordable, safe, and reliable?
Ms. McCarthy. I think it is a part of every State's
strategy moving forward, yes.
Mr. Rush. Can you assure the subcommittee that EPA has
taken into account the concerns of States like Illinois, who
might be negatively impacted if nuclear power is not fully
credited in a State's plan to meet its charted carbon
reductions?
Ms. McCarthy. I certainly agree that nuclear power is zero
carbon, and it is an important part of the base load for many
of the States, and it should be considered by those States
carefully in the development of their plans.
Mr. Rush. I want to thank you. I also would like to
continue to engage your office on this issue----
Ms. McCarthy. Yes.
Mr. Rush (continuing). To make sure that nuclear power is
appropriately valued, due to its carbon-neutral emissions, in
any kind of rule that is proposed.
Moving along, Madam Administrator, another keen priority
for me is the issue of environmental justice, and making sure
that States are provided adequate direction in order to achieve
the interests of low-income and minority communities. In cases
where States may not be sure how to conduct environmental
justice analysis, then I believe that it would be very helpful
if the EPA provided States with guidance, technical assistance,
and resources to help protect their most vulnerable communities
which we all know have the least amount of affluence, and
influence, to help themselves.
Can you speak to this issue and assure me that, one, EPA is
indeed listening, and working with the environmental justice
groups as the Agency prepares to finalize the rule, and two,
the Agency will provide States with tools and resources to help
identify and protect these communities?
Ms. McCarthy. I can assure you of that, Ranking Member, and
I will also point out that our environmental justice budget is
given an increase of $7.3 million this year, which will go a
long way to helping us provide those tools and technical
assistance.
Mr. Rush. Thank you very much.
Mr. Whitfield. Gentleman's time has expired. At this time I
recognize the gentleman from Texas, Mr. Barton, for 5 minutes.
Mr. Barton. Thank you, Mr. Chairman. Thank you again, Madam
Administrator. I could really have some fun with you today, but
you are too nice a person.
Ms. McCarthy. For a short period of time, anyway.
Mr. Barton. Yes. You have always been responsive
professionally, and at least accommodating to take my phone
calls, and to visit with me. So I am not going to grandstand,
but I do have a question that is--there are several, but the
first one, the President made this big announcement about
China, and ballyhooed it as a major breakthrough, and a major
agreement, but I am told there is actually no written
agreement, there is no signed document. Is that true?
Ms. McCarthy. I am not aware that that is the case. I don't
know. I have not verified that.
Mr. Barton. OK. Well, I have it on good authority, from the
professional staff to the majority of this committee, that, in
reality, all it was was a press release. Now, if that is true,
and I am going to say if, that we can't find any copy, nor can
we obtain a copy of any document that was officially signed,
can you check that out, and let us know? It is one thing to
have a disagreement about policy. It is another thing to have a
disagreement over what are in these documents when our
President signs things.
The Kyoto Accord, as you well remember, was signed by the
Vice-President on behalf of President Clinton, but it never was
ratified by the Senate. In this case, we don't even have
something that we can debate the pros and cons of. And, given
the fact that this is a fairly visible issue, I think it is a
fair question. If there is a signed agreement, let us see it.
Do you agree with that?
Ms. McCarthy. Well, my understanding is that it was a
commitment at the highest levels in both countries, and that
the decision was made to ensure that the actions that are
commensurate with those obligations--captured in already
existing agreements that we have with the country, and that we
will have an action plan moving forward developed through our
formal negotiation process.
Mr. Barton. Is that a long answer to say there is no signed
agreement?
Ms. McCarthy. No, there is very much a commitment, and that
was what was----
Mr. Barton. A commitment?
Ms. McCarthy (continuing). Announced, and we have
agreements to work towards that commitment to----
Mr. Barton. OK.
Ms. McCarthy (continuing). Actually put the actions in. And
the work we are already----
Mr. Barton. Well, whatever--I mean, when the President of
the United States, or the Secretary of State, or you, as the
Administrator of the EPA, represent the United States in
international exchanges, if agreements are made, something is
signed. Something is signed. You don't just stand up and say,
you know, we have this agreement, and hug, and everybody just
loves each other. You actually have a document, and if it needs
to be ratified by the Senate or the House, is a commitment.
And what you have here, I am told, is a press release, a
photo op, which is not unusual for this President, I will grant
you. But in this case, a 30-year agreement should actually be
documented. That is all. So if there is something that is
signed, you will get it to the committee?
Ms. McCarthy. Well, I am sure that there was an agreement
that was announced, and I have seen those documents.
Mr. Barton. OK.
Ms. McCarthy. I think----
Mr. Barton. You have seen----
Ms. McCarthy (continuing). At the highest level----
Mr. Barton. You have seen documents that----
Ms. McCarthy (continuing). By those agents.
Mr. Barton (continuing). Obama, and whoever the Chinese
official is, you have actually seen a signed----
Ms. McCarthy. I----
Mr. Barton (continuing). Document?
Ms. McCarthy. I have seen the documents expressing both of
their commitments to this goal, and I am well aware that we
have ongoing----
Mr. Barton. All right. But you haven't seen the signed----
Ms. McCarthy (continuing). Action items can be documented--
--
Mr. Barton. OK.
Ms. McCarthy (continuing). And tracked.
Mr. Barton. I can take you over to the National Archives
and show you the signed Declaration of Independence. I can show
you lots of documents that have signatures on them. You and I
can agree that I am not going to go out and rob a bank. And you
can agree that you are not going to rob a bank, and we can both
hold a press conference, we have agreed we are not going to rob
a bank.
Ms. McCarthy. I don't think that this has been discussed as
that type of a binding agreement. I think it has been discussed
as a path forward that is very----
Mr. Barton. I have got 30 seconds left, so I am going----
Ms. McCarthy. OK.
Mr. Barton (continuing). To switch gears. Renewable fuel
standards, we have a situational mandate that simply can't be
met. You have said publicly and privately that you want to fix
it, and you have promised the chairman of the committee, and I
think even in a hearing, that you would have a program to fix
it. We have yet to see that. When can we expect to see
something that gives some real relief to this RFS mandate that
simply can't be met?
Ms. McCarthy. Well, I think, Congressman, you know that I
have a real commitment to moving this issue forward. I wished
it could have happened last year. The approach that EPA took
received considerable comment, and so you will see something
very soon, in the spring, that will address that issue and
hopefully move us forward on a----
Mr. Barton. Can you give us a date very soon this spring? I
mean, by the end of March?
Ms. McCarthy. I don't have a particular timeline, Senator--
I mean Congressman. I----
Mr. Barton. Yes, don't profane me now.
Ms. McCarthy. I was giving you a little boost. I just want
to make sure that we cross our T's and dot our I's. I know we
were not successful last year as I would like us to be, and I
really want to get this out in a strong way, and make sure that
it looks forward.
Mr. Barton. You are----
Ms. McCarthy. We both have real interest in this.
Mr. Barton. All right. Well, keep us informed.
Mr. Whitfield. Senator's time has expired. At this time I
recognize the gentleman from New York, Mr. Tonko, for 5
minutes.
Mr. Tonko. Thank you, Chair. And, Administrator McCarthy,
again, welcome, and thank you for your leadership, and for
joining us this morning. I want to focus on drinking water
programs.
I am pleased to this year's budget includes a modest
increase over the current year's funding level for the Drinking
Water State Revolving Loan Fund. It seems every week I hear
about significant water main breaks across our country. A few
weeks ago, or over the last few weeks, several have hit my
district, including my hometown of Amsterdam.
While I am pleased the administration is asking for more
funding for the primary account dedicated to supporting
drinking water infrastructure, I am concerned that we are
continuing to fall further and further behind on the
maintenance and upkeep of these systems. It costs far more to
deal with a pipe once it has burst than it is to have a
systematic program of repair and replacement of infrastructure
that takes care of our systems. Also, we have many communities
that are not able to take on more debt, so a loan program isn't
going to do it for them. They do need grants.
So in this Agency's budget, there is mention of new
technologies, and new financing mechanisms that the Agency will
be exploring. For example, the new Water Infrastructure and
Resilience Finance Center won't provide funding, but will
provide assistance to communities seeking outside funding for
their projects. Is that correct? Is my interpretation of that
budget correct?
Ms. McCarthy. For this year we are standing up the program
itself, yes, but we are also looking at what other States and
localities are doing so that we can share that information
effectively, and see if we can't duplicate some of those
public/private partnerships that are happening already.
Mr. Tonko. OK. Well, that is leading us in the right
direction. I have seen estimates of water leakage from drinking
water systems that range anywhere from 30 to 50 percent. This
is treated water that is leaking, so it represents both lost
revenues, because that water is never delivered to a customer,
and it is lost investment, because the utility paid to purify
that water. So water and dollars are flowing out of these
pipes.
Programs like Water Sense, that encourage water
conservation by customers are good, but if the biggest water
loss is from the delivery system, we need to address this. Does
the Agency have some options for helping utilities to identify
these leaks and address them?
Ms. McCarthy. Well, we are--actually a fairly comprehensive
program. It begins with our Office of Research and Development,
that conducts research on what types of technologies are
available to identify where those leaks are happening. And then
we try to provide technical assistance out of our programs to
help identify opportunities for reducing those leaks, so we
will be looking at this.
And you are absolutely right, that as the climate changes,
our water challenges get considerable. And if you look at what
is happening in the western part of the U.S., there is a
desperate need for water conservation, and the last thing any
of us would want to do is to see water that is suitable for
drinking being leaked out of the system.
Mr. Tonko. Right. It is indeed a precious commodity, and we
need to have a good collaborative effort to address those
issues. The best way to address the high cost of treating
drinking water, in my opinion, is to ensure the source water is
as clean as possible to begin with. I support the Waters of the
U.S. rule because I believe it is critical to efforts at source
water protection. What other initiatives is the Agency putting
considering to assist communities with preventing water
pollution and protecting source waters?
Ms. McCarthy. Yes. In a number of different directions. One
of our biggest concerns is that we see a lot of spills near
source waters and in source waters that are challenging us,
from a drinking water perspective. We also see new pollutants
coming in. So we are looking with States to ensure that they
get the guidance they need, and that we do our job, in terms of
setting national standards, so that the States who have the
primacy, in terms of establishing their own water quality
standards, and identifying and categorizing their own waters,
have the information they need to protect themselves.
We know we have had some recent spills that indicate that
it is not enough, so we are trying to identify what other
assistance we can give to States, and we are also trying to get
them to think a little bit more creatively about how they plan
their water infrastructure needs so that drinking water sources
are protected. Plus we also get an opportunity to move forward
with some of the challenging storm water issues that are
contributing to some of the pollution that is entering into our
drinking water supplies.
Mr. Tonko. Well, again, we appreciate the partnership that
the Agency has with the States. When you ask for those dollars
in the budget, the budget increases somewhat. We know that a
lot of those efforts go toward our States, so we appreciate
that. And, again, thank you for your input here this morning.
With that, I yield back, Mr. Chair.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from Illinois, Mr. Shimkus, for 5
minutes.
Mr. Shimkus. Thank you, Mr. Chairman. Administrator, again,
welcome. Do you agree that--there are 84,000 chemicals listed,
approximately, in the TSCA inventories----
Ms. McCarthy. Yes.
Mr. Shimkus (continuing). Is that the number? How many do
you think are currently in commerce? Of the 84 listed, how many
are actually used in commerce?
Ms. McCarthy. I am sorry, I don't have the exact----
Mr. Shimkus. Yes, and, I mean, that is part of the problem.
That is why we are trying to move in a bicameral, bipartisan
nature on TSCA, to try to get a handle on this. If we work with
the industry on chemical data reporting, that should help us
get a better idea of what that number is, do you agree?
Ms. McCarthy. Yes.
Mr. Shimkus. So, in your budget plan, you have--
originally--83 work plan chemical risk assessments that you
want done by 2018. If you--I look at the budget report of--we
have got, like--five are completed, five to 10 in '15, maybe 10
in '16, which gives us 25. Take that from 83, that is still 58
that, budget-wise, we don't seem to be able to get in in a
timely manner.
I just raise this because I appreciate the effort, but,
again, I just want to use this opportunity, as I think we can
get there, and this is a perfect example of how we can work
with you, and work with my colleagues on the other side, to
move this forward. And so--as I mentioned a couple times.
I want to move to 111(d) debate just a little bit. And this
is where we appreciate some of FERC's responsibility, because
there is concern that, under 111(d), coal fired generation,
there is going to be some decommissioning. And, as you know,
they are major generators. They are a base load production.
Across the country nuclear power is also stressed, and you can
look at my own State, the State of Illinois, where the State is
trying to go through some gyrations to make sure that nuclear
power is still online. Has the EPA taken into consideration the
base load loss of not just 111(d), but what could happen if we
lose nuclear power, and what do you think could be used to
supplant that?
Ms. McCarthy. Yes. We actually have looked at that issue,
and we have received a lot of comment on this as well, because
the way in which the 111(d) analysis looks at this issue is it
indicates that there is likely to continue to be over 30
percent generation through coal, even in 2030, at the end of
the target timeline under 111(d).
But base load coal, there is no question that there are
being investments made in that base load in order to make it
cleaner from traditional pollutants, and we expect that base
load to continue. And one of the biggest challenges is to make
sure we don't do this in a way that sends different signals to
the communities we all care about, the energy world that is
bringing reliable and cost-effective energy. I want them, if
they are investing in these facilities, to know that they can
continue, and that investment will not be stranded.
And I think we are looking very closely at that issue
because there are many ways in which we can achieve these goals
that don't result in lower energy generation in base load from
coal, other than what has been projected, which is still going
to be very strong in 2030.
Mr. Shimkus. And we have talked about the mid-term
standards before, and I know you have had a lot of input from
the industry, and I would just hope that you would really look
at those, because that could be a tipping point of moving
things too fast, where if the end goals can be reached without
really upsetting the apple cart in the mid-term, and, you know,
we have talked about it----
Ms. McCarthy. Mr. Chairman----
Mr. Shimkus (continuing). And I know you have had----
Ms. McCarthy. Yes. We have put out some ideas for this, and
we have some great comments in that will allow us to address
this issue pretty effectively.
Mr. Shimkus. And the last thing I want to do is--I also
want to just kind of weigh in on the RFS positively, hoping
that we do get a standard. And I have already talked to the
folks in my district who are concerned, and say '14, '15, and
'16 will have something. I am sure that will be highly fought
and angered on both sides, no matter what that is.
But it brings me to this debate on biodiesel, and the EPA's
authorization of importation of Argentine biodiesel without
really having the CARBIOs established. Is this a point of one
hand not knowing what the other hand is doing, and then how do
we put that supply in as part of the calculation for when you
do '14, '15, and '16?
Ms. McCarthy. Well, RFS is going to be looking at the range
of availability of fuel supplies of the biodiesel fuel supplies
that are available both domestically and internationally, which
is what the rule requires.
In terms of CARBIO itself, you know, that decision, I
think, was a little bit misunderstood, and we can certainly
talk about this, but there was already biodiesel coming in from
Argentina. What we approved was actually a more stringent way
of tracking that to ensure that it was a renewable fuel
consistent with the underlying RFS principles.
And so it was not intended to open up a new market. It was
intended to reflect the way in which the companies were
assuring their compliance in a way that was more stringent than
others had already been doing. And we think it is a model
moving forward to make sure that everybody is bringing into
this country the kind of fuel that we are trying to support
domestically for production purposes.
Mr. Whitfield. Gentleman's time has expired. At this time I
recognize the gentleman from Texas, Mr. Green, for 5 minutes.
Mr. Green. Thank you, Mr. Chairman, and Ranking Member for
holding the hearing. Administrator McCarthy, thank you for
being here today, and it is always good to see you before our
subcommittee. To say that EPA has a lot on its plate is an
understatement. The rules and regulations promulgated by the
Agency seem to affect every sector of our Nation, and I am
happy to ask some questions about the balance we are trying to
strike between protecting the environment, but helping our
business and industrial sector capitalize on what is required
to be done.
On April the 12th the EPA released the new source
performance standards for volatile organic chemicals from the
oil and gas industry. The 2012 NSPS targeted hydraulic
fractured natural gas wells. The rule targeted VOC emissions
reductions through green completion, and expected a yield of 95
percent reduction, including an estimated 1.7 million tons of
methane. My first question is, the VOC in NSPS was supposed to
be implemented in a two-step process. Is this accurate, that
the NSPS won't be implemented until the end of 2015?
Ms. McCarthy. My understanding is--and I am sorry,
Congressman, I may be counting wrong, but I think that is right
for the full implementation we did recognize in that rule that
there was equipment that needed to be manufactured and
installed, and we worked with the industry to make sure we
weren't being overly aggressive about the ability to have the
technologies available for full implementation.
Mr. Green. OK. Has the EPA actually quantified how much of
the VOC reduction the NSPS has actually yielded to this point?
Ms. McCarthy. We do have a good signal from our greenhouse
gas reporting program that it has already been tremendously
effective at reducing carbon pollution, because carbon
pollution is reduced as you are capturing those volatile
organic compounds. So we do have a very good sense that this is
being effective already.
Mr. Green. I understand it is already about 190 to 290,000
tons----
Ms. McCarthy. That is right.
Mr. Green (continuing). Is the estimate. Has the EPA
quantified methane reductions as a co-benefit?
Ms. McCarthy. We have, and I can provide those numbers. I
don't have them at the tip of----
Mr. Green. OK. Well, I----
Ms. McCarthy (continuing). My tongue----
Mr. Green (continuing). Think I have them. It is about 73
percent decrease----
Ms. McCarthy. Excellent.
Mr. Green (continuing). Of that, so--in January of this
year, the White House and EPA released a strategy for reducing
methane and ozone pollution from the oil and gas industries.
The release stated potential sources that would be regulated
are hydraulic fractured oil wells, pneumatic pumps, leaks as
well from well sites and compression stations. Anyone who has
been on a rig knows you put a hole in the ground and find oil,
you are also most likely to find natural gas----
Ms. McCarthy. Yes.
Mr. Green (continuing). And the Energy Information Agency
states that more than half of all completed wells produce both
oil and gas. Does the EPA believe that there is an overlap
between these two rules?
Ms. McCarthy. We believe that there are synergies between
the two rules, and we are going to make sure that we do not
duplicate efforts, but we actually provide a good signal for
those that are both producing oil and natural gas as to what
their regulatory obligations are.
Mr. Green. OK. In 2014 the EPA estimates indicated almost
$200 million in additional gas could be captured and sold----
Ms. McCarthy. Yes.
Mr. Green (continuing). From the natural gas sector.
Recently, producers in West Texas have started using modular
equipment to capture the methane, separate the gas into the
various components, and either sell as a product, or power back
to the producer. This approach has effected an economically
efficient way to encourage change. Methane is a product that we
need to use. Aside from using it on-site, additional capture is
going to require additional pipelines.
In the budget, DOE has set aside some, but not enough,
money to encourage additional investment in modular
applications in pipeline infrastructure. Has the EPA done
anything similar?
Ms. McCarthy. EPA is working with DOE on the Quadrennial
Energy Review to take a look at what pipelines need to be
constructed in order to make sure that we can still continue to
enjoy the inexpensive natural gas and the oil that is making us
solid domestically.
Mr. Green. Recently the White House Council on
Environmental Quality released a revised draft guide, covering
how Federal departments and agents should consider the effects
of the greenhouse gas emissions and climate change in their
NEPA studies. What are your views on how this guideline will
affect what EPA is already doing to measure climate impacts
from major Federal actions under NEPA? Specifically, how will
EPA measure climate impacts under NEPA stemming from the
construction of new natural gas pipelines?
Ms. McCarthy. I think that it provides us an opportunity to
be clear that NEPA is a flexible tool, and that greenhouse
gases should be looked at which it is appropriate to do so, and
when the impacts are significant enough to warrant it, and it
provides us good guidance moving forward so everybody will know
the data that is necessary to move these projects forward.
Mr. Green. Thank you. Mr. Chairman, I have one more
question. I will submit it, on the Superfund budgets for this
year. We have some Superfund sites in my area, and the budget
cuts may impact us being able to clean those up. But I thank
you for your time.
Mr. Whitfield. Thank you. At this time recognize the
gentleman from Texas, Mr. Olson, for 5 minutes.
Mr. Olson. I thank the Chair and welcome Administrator
McCarthy. Pardon me, a little frog in my throat.
Ms. McCarthy. It is good to see you, Congressman.
Mr. Olson. You as well. Ma'am, as you know, your EPA is
taking comments on mass new standards for ozone----
Ms. McCarthy. Yes.
Mr. Olson (continuing). Otherwise known as smog.
Ms. McCarthy. Um-hum.
Mr. Olson. In Houston, we have been fighting this issue for
decades. We have made huge strides in cleaning up our air. But
the proposal the EPA has released will land like a ton of
bricks, ton of foreign smog, on most of the country. Could I
have a slide, please, first slide? If you don't have any of
these slides, I can give you a copy, hard copy, if you can't
read the slides when they come up here.
[Slide follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. Olson This first slide is your estimate of counties
that will violate the proposals you have out there. Any shade
of blue is bad. Blue counties would have a hard time getting
permits for new factories or energy exploration, even highway
construction. I ask unanimous consent to enter into the record
a report from the Texas Department of Transportation,
predicting an infrastructure mess in your proposal. Without
objection, sir, I would like to enter that for the record.
Mr. Whitfield. Without objection. \1\
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\1\ The information has been retained in committee files and also
is available at http://docs.house.gov/meetings/IF/IF03/20150225/
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Mr. Olson. Thank you. I would like to tackle this ozone
issue with some Chairman Dingell-inspired questions that
require yes or no answers. Next slide, please.
[Slide follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. Olson This slide is from page 209 of your regulatory
impact analysis. If you can't see that, ma'am, I have something
for you right here, if you would like to----
Ms. McCarthy. I am having a little bit of a hard time
reading it. And I can't say I recognize it specifically on that
exact page.
Mr. Olson. 209. Yes or no, does this slide show that half
the technology our communities need to meet the 65 parts per
billion standard doesn't yet exist in the eastern part of
America? Yes or no?
Ms. McCarthy. I am sorry, I don't understand the question.
Mr. Olson. The question, ma'am, is if we go to 65 parts per
billion, you can't achieve that with current technology?
Doesn't that slide show this? I mean, look at that slide.
Ms. McCarthy. Actually, the slide--it doesn't indicate
that--the numbers that we look at on ozone are based on 2014 to
2016. That is how this rule would work. And, in fact, it shows
that----
Mr. Olson. I am sorry, ma'am, the question is yes or no. If
you disagree, say no.
Ms. McCarthy. I can't answer it the way you phrased it,
sir. But I do know that with the national rules we are doing,
and the reductions we are achieving in Nox and VOCs, that
almost all counties will achieve an ozone standard at 70, with
the exception of about nine in the State of California will
continue to be challenged, but----
Mr. Olson. OK. I am sorry, ma'am, I have to move on here.
Next----
Ms. McCarthy. OK.
Mr. Olson (continuing). Slide, please.
[Slide follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. Olson Another big issue is background ozone.
Ms. McCarthy. Yes.
Mr. Olson. Smog occurrences can be natural, like forest
fires, but they can be foreign, too, like from Mexican crop
burning annually. The last time I showed you the slide of
Chinese smog pouring into our country. I want to focus on
another slide. Next slide, please.
[Slide follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. Olson This is your map. It shows how much ozone in our
country comes from ``background sources'', compared to American
sources. Anywhere from over 50 to 80 percent of ozone is
outside of our control. You are asking us to do the impossible,
control what we can't control. Look at that map. Again, yes or
no, am I correct that there are almost no parts of the country
where Americans are contributing to more than half the ozone?
Ms. McCarthy. I don't know the answer to that question,
sir.
Mr. Olson. OK. Yes or no, am I correct that Chinese
emissions have increased in recent years, gone up?
Ms. McCarthy. That is true.
Mr. Olson. That is yes?
Ms. McCarthy. That I am aware of.
Mr. Olson. I would like to submit for the record whether
EPA's budget allows more staff to handle petitions on foreign
pollution, like from China. Someone can do that for me?
Ms. McCarthy. Actually, no States are being asked to reduce
emissions that are background levels coming from another
country, so we will be working----
Mr. Olson. You don't know how your budget addresses foreign
sources of ozone? Can I get that from you sometime in the near
future--14 seconds left here, I want to talk about the
exceptional impacts rule.
Ms. McCarthy. Yes.
Mr. Olson. It allows the EPA to remove some natural
resources of ozone from its calculations. And, yes or no, you
rely on the exception rule to make these rules achievable? Is
that a weapon you have to make your new standards viable?
Exception of resources? Can that make these new standards
viable? Because----
Ms. McCarthy. I think you are----
Mr. Olson (continuing). Right now, they are not viable.
Ms. McCarthy. I think you are referring to exceptional
events----
Mr. Olson. Yes, ma'am.
Ms. McCarthy (continuing). Which has been part of our
program since day one, and we are trying to make sure that
States can easily access our ability to have exceptional events
documented so that they can make sure that they don't interfere
with the State plans for implementing the rule.
Mr. Olson. And one question I will submit for the record,
one final thing, Mr. Chairman, I ask unanimous consent to
introduce a document from the Texas Commission on Environmental
Quality that goes into great detail about the exceptional
events process in my home State, the fact that we are 0 for 10
the past 5 years. Only three have been answered. Seven have not
been answered. So, again, that is not viable to control ozone.
In our----
Ms. McCarthy. Well, Congressman, I am----
Mr. Olson (continuing). Real experience in----
Ms. McCarthy (continuing). Happy to work on----
Mr. Olson (continuing). Texas we are 0 for 10.
Ms. McCarthy. OK.
Mr. Whitfield. Without objection.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. At this time I recognize the gentleman from
New Jersey, Mr. Pallone, for 5 minutes.
Mr. Pallone. Thank you, Mr. Chairman. Madam Administrator,
with just a small fraction of the Federal budget, the EPA
tackles the enormous task of protecting communities across the
country, ensuring clean air to breathe and safe water to drink,
and they do all this by partnering with States and localities,
providing essential funds for environmental protection at all
levels. I just wanted to highlight a few of these important
activities.
First, I would like to discuss the work EPA does to clean
up land and protect vulnerable communities. This budget
includes more funding for Superfund cleanups than last year.
What might that funding mean for minority communities and low-
income communities living around Superfund sites? Are there
other resources included in the budget for vulnerable and
overburdened communities also, beyond the Superfund?
Ms. McCarthy. Yes. I think there are significant resources
in this budget to help communities that have been underserved,
or have been left behind in some of our national efforts to
reduce pollution. This will help us get at potentially another
25 sites, moving forward to cleanups that are going to be ready
for the cleanup stage in the coming year. So it is an increase
in our Superfund budget that is going to be significant.
And we all know that many of the communities surrounding
Superfund sites actually are low-income areas. They are
communities of color that deserve to have the same protections
as everybody in this country enjoys. And that is what this is
all about.
Mr. Pallone. I appreciate that. I think this funding is so
important for health safety and the economies of these
communities. And I would suggest to the Chairman that the
committee, at some point, hold a hearing on environmental
justice to learn more about the risks that these communities
face.
Another source of risk for people in these communities, and
all communities, are unsafe and untested chemicals in our
products and our environment, and that is why I believe that
TSCA should be a priority, or strengthening TSCA should be a
priority. This budget includes significant funding for chemical
risk assessment and management, and for computational
toxicology. Can you briefly describe how funding for
computation toxicology and chemical risk assessment will
protect human health and the environment?
Ms. McCarthy. Nice job. Yes, I can. In fiscal year 2016,
EPA is requesting an increase of 12.4 million for computational
toxicology research. I think, you know, that this is an
important step forward because it really strengthens our
ability to get more chemicals assessed in a quick way. It has
potential to significantly eliminate animal testing, which
takes a very long to actually reap the benefits we need to
ensure that we can do these chemical assessments quickly.
It is a significant step forward, and it is cutting-edge
science being done at EPA, and it is a wonderful opportunity
for us to address the toxicity in chemicals and make sure that
our public health is being protected.
Mr. Pallone. Well, thank you. And, again, I would suggest
to the chairman and the committee that there be a hearing on
computational toxicology to better understand these techniques,
and their potential to change the debate on TSCA reform.
Last, I just wanted to touch on one of the greatest, if not
the greatest, environmental challenge of our time. The EPA has
provided tremendous leadership to understand, address, and
mitigate the effects of climate change, and Congress has not
been a partner in those efforts. Instead, Congressional
Republicans have taken every opportunity to undermine them.
So, Administrator McCarthy, we are hearing lots of negative
claims about the Clean Power Plan, and the new ozone standards,
but both of these rules are just in the proposal stage. And at
every turn I hear about how you have an open door policy, and
are a great listener. I also know that industry claims about
costs and economic effects are frequently overstated, and the
benefits of acting are usually understated. I think we need to
act on climate change, and the Clean Power Plan is a key part
of that, but some just want to criticize.
I just want to put you on the spot here and ask you if you
are fully committed to developing a workable plan with States
and industry that ensures reliability of the grid, and will you
work with Members on that, and would you be willing to testify
before the committee about your plan?
Ms. McCarthy. Yes, I am, Mr. Chairman.
Mr. Pallone. All right, I appreciate that. Thank you, Mr.
Chairman. I yield back.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from Pennsylvania, Mr. Pitts, for 5
minutes.
Mr. Pitts. Thank you, Mr. Chairman.
Madam Administrator, when the EPA wrote the rules for RFS 2
in 2010, it acknowledged that the reasons for placing the
compliance obligation on refiners who don't blend renewable
fuel, instead of on blenders who do, was an outdated holdover
from the 2007 RFS 1 rules. Changing the definition of obligated
party could help to advance the goals of the program, and
correct some of the problems we are seeing with the current
program. EPA did a significant amount of work on this issue in
2009 and 2010.
My question is, do you agree it would be timely and useful
to include and accept public comment on a proposal to shift the
compliance obligation as part of the current 2014, 2015, 2016
rulemakings?
Ms. McCarthy. Well, I do know that that is a comment that
we received on the 2014 proposal we put out last year. It is my
interest to make sure that we move forward with the 2014 rule
as quickly as we can. I think it is important for the stability
of the renewable fuel industry. But I am sure we will be
looking at those comments closely as we move forward.
Mr. Pitts. One of the problems with this program is that it
requires the EPA to make predictions each year on two highly
uncertain things, first, how much transportation and fuel will
be consumed in the following year, and second, how much
renewable fuel will be used. When EPA gets these predictions
wrong, as it did in 2013, the result is exorbitant prices for--
economic hardships for merchant refiners, and windfall profits
for blenders. CBO has told us escalating RFS mandates will lead
to higher gas prices at the pump.
EPA's decision to delay the 2014 rule until 2015 created
unnecessary uncertainty for all stakeholders, but there may be
a silver lining. For 2014, EPA won't have to guess how much
transportation or renewable fuel was used. The year will be
over, and EPA can set the standard based on what actually
happened. So my questions are will EPA set the 2014 mandates
based on the actual consumption of transportation and renewable
fuels?
Ms. McCarthy. Actually, sir, I am not able to answer that
question because we are not yet through an interAgency review,
and able to release it finally. But we will be addressing that
question clearly.
Let me just say that the courts have been very clear to us
that we need to follow the direction of the EIA in terms of our
projections, and we have been true to doing that, and we will
make sure that we continue to do that. And we will also move
forward with 2014, recognizing that it wasn't completed as a
final rule in time to generate the incentive to go beyond what
was already generated, and I recognize that.
Mr. Pitts. Will EPA combine the 2014, 2015, 2016 mandate?
If so, do you believe EPA has the statutory authority to do so?
If you do, I would like to have you cite the authority.
Ms. McCarthy. Yes, we do know that the statute requires us
to put out annual levels, but there is a great interest in
making sure that we send signals to the market in a way that
allows all of the participants to be prepared for the numbers
that might come forward.
Mr. Pitts. Earlier this year EPA tied the 2013 compliance
deadline to the issuance of the final 2014 rule, and this
allowed obligated parties to make informed decisions about
using 2013--for 2013--or 2014 compliance. And the rationale for
delaying the 2013 compliance deadline is equally applicable to
2014, and each year following. Will EPA tie the 2014 compliance
deadline to the issuance of a final 2015 rule? And what about
subsequent compliance deadlines?
Ms. McCarthy. As you indicate, Congressman, we know that
this is an issue that is important. We have addressed it
before. We are going to continue to address that issue moving
forward in our proposed rules.
Mr. Pitts. Well, how will the compliance deadline be
impacted if EPA combines the 2014, 2015 rules?
Ms. McCarthy. Those are issues that we would need to
resolve if we intend to do that. I did not indicate that. But
certainly we know that, in a market as large as this, and for
research and investment purposes, it is difficult to always
wait for an annual rule to come out and be finalized, and we
want to make sure that we are providing as much signal as we
can moving forward.
Mr. Pitts. Thank you. My time has expired.
Mr. Whitfield. At this time we will recognize the
gentlelady from California, Ms. Capps, for 5 minutes.
Mrs. Capps. Thank you for recognizing me. And before I
begin, it is always a pleasure to have former colleagues join
us. Pleased to have you in the audience today. Administrator
McCarthy, thank you for your testimony, and for being here
today, and I want to address several topics, mostly around
climate change, the effects of which are far reaching,
interconnected impacts on our environment, human health, and
the economy, and I am pleased that you have made this at EPA
such an important priority. I want to address the fact that
there are both large scale and smaller scale efforts in the
community level, which are important in addressing climate
change.
In your fiscal year 2016 budget for EPA, budget request,
you propose implementing a locally targeted effort, with
regional coordinators, and the so-called circuit riders, to
ensure that communities have the resources. In other words,
being there on the site to see. Will you please briefly
describe this proposal, and how will it help our local
communities?
Ms. McCarthy. I will. This is an effort to try to work with
communities and States, frankly, at the community level to look
at climate resilience. We are learning a lot as we go across
the country and talk about these issues, and we have identified
having circuit riders, which are trained individuals in this
particular field, and have them more nimble and available to go
out to communities moving forward who are considering issues
that would have the wealth of tools at their fingertips that
EPA and others have provided.
We think it is a real opportunity to stretch our resources,
and make them accessible to local communities in a way that
will be much more productive than we have before, and we are
requesting resources to support that.
Mrs. Capps. Thank you. EPA's Clean Power Plan is a very
commendable effort to address both air quality and climate
change. And, you know, there are numerous studies through EPA,
but in other sources too, showing that the Clean Power Plan
will be able to significantly address public health through
reducing carbon pollution, and from the co-benefits of improved
air quality. Can you elaborate? Give us a comparison here. What
are the expected human health benefits from such a Clean Power
Plan?
Ms. McCarthy. Yes. The human health benefits relate to a
number of things. One is that we know that vectors of disease
are changing, in terms of their territories. We know that
allergy seasons are getting larger. We know that ozone is going
to be a more difficult issue moving forward as the weather gets
warmer, and there is more ozone being produced. And all of
these things directly relate to people's health.
So climate change is a significant public health problem.
It should not be looked at as simply a natural resource issue--
--
Mrs. Capps. Um-hum.
Ms. McCarthy (continuing). And it also is clearly an
economic challenge----
Mrs. Capps. Um-hum.
Ms. McCarthy (continuing). Particularly for those families
that are struggling with their kids that have asthma.
Mrs. Capps. Right.
Ms. McCarthy. We have significant responsibility to protect
those children, and give them a future that we can be proud of.
Mrs. Capps. Agreed. And now to address the concerns that
many of my colleagues have raised regarding the costs of
implementation, and the costs of energy that they believe will
affect lower and----
Ms. McCarthy. Yes.
Mrs. Capps (continuing). Middle-class families--income
families. We, of course, want to keep energy affordable, so
could you give us a comparison of the costs and benefits of the
Clean Power Plan?
Ms. McCarthy. In 2030, the benefits of the Clean Power Plan
will range anywhere from $55 to $93 billion in benefits,
compared to costs of $7.3 to $8.3 billion. It is a significant
benefit. And the one thing I want to make clear of, again, is
that I consider these to be investments in the future. I
consider these to be investments in clean economy and job
growth.
Mrs. Capps. Once the investments are made, they keep
giving----
Ms. McCarthy. They certainly----
Mrs. Capps (continuing). And they keep benefitting. Just
one final question. These are important priorities, but also
important is clean drinking water. And, in a way, it relates,
but there are so many challenges today to the availability of
safe drinking water. And I think of the lack of it in
California, where----
Ms. McCarthy. Yes.
Mrs. Capps (continuing). Drought is such a problem. How
does this budget provide for the enhanced resiliency that our
water infrastructure needs in--for various needs across this
Nation, again, highlighting the local communities?
Ms. McCarthy. Yes. Again, we are working with local
communities to help coordinate their response to climate
change, and we are also significantly boosting our contribution
to drinking water SRF funds. Because we know that it is not
just about thinking of these things, it is about actually
supporting it, bringing dollars to the table.
And we are really excited about the new finance center as
well, and our ability to bring private dollars to the table.
This is an economic challenge that isn't just the
responsibility of the Federal, or local, or State governments.
This is the responsibility of the business community as well.
Mrs. Capps. So you----
Mr. Whitfield. Gentlelady's time----
Mrs. Capps. Yes.
Mr. Whitfield (continuing). Has expired.
Mrs. Capps. Sorry. Thank you.
Mr. Whitfield. It is all right. I also want to welcome our
former colleague, Kenny Holchoff. I might say that, since he
has left, I don't think the Republicans have won one baseball
game, but we are delighted he is back today.
At this time I would like to recognize the gentleman from
Pennsylvania, Mr. Murphy, for 5 minutes.
Mr. Murphy. Thank you, Mr. Chairman. Welcome here, ma'am.
Ms. McCarthy. Thank you.
Mr. Murphy. When the EPA came out with their rule on new
source performance standards, you cited a number of examples to
show the EPA's standards are feasible. I want to run over some
of these examples, and let you just respond with a yes or no if
you are aware of them. For example, yes or no, are you aware
that the partially funded Kemper Project is $3 billion over
budget?
Ms. McCarthy. I am aware that it is over budget, yes.
Mr. Murphy. OK. And you are aware that the Future Gen
project in Illinois was discontinued?
Ms. McCarthy. I am aware of that.
Mr. Murphy. OK. And you are aware that the Texas Clean
Energy Project hasn't broken ground yet?
Ms. McCarthy. I am not exactly up to speed on that one,
sorry.
Mr. Murphy. OK. But something that was cited in the report.
You are aware that the Hydrogen Energy California Project
doesn't use coal, but actually uses petroleum coke? Are you
aware of that?
Ms. McCarthy. No, sir.
Mr. Murphy. OK. Are you aware that the final project the
EPA cited for providing techno-feasibility for new coal fired
power plants was a 110 megawatt Boundary Dam facility in
Saskatchewan, Canada? It is not actually a new plant at all,
but is, in fact, a retrofit. Are you aware of that?
Ms. McCarthy. I am aware that it is a good example of one
that is up and operating pretty effectively, and better than
they thought.
Mr. Murphy. But it is a retrofit, and it is not the United
States. And the Canadian Center for Policy Alternatives, which
supports the CCS mandates, issued a report this month stating
that the Boundary Dam project was twice as expensive as
alternate generating methods, which will make it significant
more expensive for families, and may jeopardize the owner's
financial viability to even complete it. Are you aware of that?
Ms. McCarthy. I haven't seen that, sir.
Mr. Murphy. OK. So, in this 2005 Energy Policy Act behind
me, which talks about--it has to be adequately demonstrated.
And references have been made before in the Federal Register--
it said you have to use the best system of emission reduction
adequately demonstrated available to limit pollution. But it
appears in all the projects that I just went over, that are
cited by the EPA, they haven't been completed, some haven't
been started, one has been discontinued, one isn't even in this
country, and none of them are large scale. As to one of them,
for example, only captures 13 percent of the EPA--excuse me, of
the carbon.
So my concern is--and you have said you want to stay true
to the rule, and the courts, et cetera----
Ms. McCarthy. Yes.
Mr. Murphy (continuing). But I am not sure that the EPA is
actually following the law on this. So I want to know, are you
reviewing anything to withdraw the rule and start over, so you
can really adhere to projects which are viable, and can work us
towards this goal?
Ms. McCarthy. I think the projects you identified are a
number of projects that have been moving forward, and we can
talk about each one that I am familiar with, which are most.
But the record that EPA produced in our proposed rule went well
beyond data from those facilities. We feel very confident that
this technology is available. We feel very confident that the
use of CCS technology, at the levels that we are proposing it,
will be a viable option for coal to continue to be part of the
future of this and other countries, and that we are supporting
investment in CCS through our Department of Energy----
Mr. Murphy. Well, and then this is where you go back--and,
Mr. Griffith, could you slide a little bit? This is where you
refer to this investment opportunity issue. I am not sure, what
does investment opportunity translate to?
Ms. McCarthy. It means that----
Mr. Murphy. States putting money in----
Ms. McCarthy. Generally pollutants are captured by end-of-
pipe pollution controls, which are often direct costs for
facilities. We have designed our Clean Power Plan in a way that
allows you to invest in renewable energy, invest in energy
efficiency, make decisions at the State level that are
consistent with----
Mr. Murphy. Well, the key----
Ms. McCarthy (continuing). Your energy economy----
Mr. Murphy (continuing). Operative word here is you invest,
but we want to make sure that things are--these viable, that
people can actually do them.
Ms. McCarthy. That is----
Mr. Murphy. And what you are citing here are projects that
people are saying are either going to bankrupt the company, or
stopped, haven't been going on. So I am not sure, when you say
investment opportunity, with someone else's money, it is a
problem. But let me bring something up, because one of those
agencies that----
Ms. McCarthy (continuing). In new coal, other than
investing in this----
Mr. Murphy. But you have to make investments--things that
can really work. We can make up Alice in Wonderland here, but I
want to make sure it works.
Are you aware that in September 2013 the National Energy
Technology Labs alerted the EPA in writing that your estimates
are outdated? NETL comments, ``We believe current cost of CCS
is not accurately represented.'' They even included update data
for inclusion in the rule. They found that CCS would cost an
average of $170 per megawatt, and at the high end, $213 per
megawatt. That is about 30 to 60 percent higher than the cost
estimate EPA put out there. So I am wondering why you are
ignoring what this other Federal Agency is saying. It would be
facts out there that you should be paying attention to.
Ms. McCarthy. Sir, you are citing a document that was prior
to our putting out the proposal. We worked very closely with
NETL back and forth on how we would best represent the costs
associated with these technologies, and I believe we included
our best judgment. And our technology folks are very good, and
we align very well with the DOE and put the best proposal
forward.
And we are looking at all those comments. You are citing a
proposal, not a final, and we will certainly take consideration
of all those issues as we----
Mr. Murphy. And I hope you will pay attention to law, which
says it has to be adequately demonstrated. And I am not sure we
are there yet, so I look forward to talking with you more.
Ms. McCarthy. I understand.
Mr. Murphy. I will submit more questions for the record.
Mr. Murphy. Gentleman's time----
Ms. McCarthy. Thank you, sir.
Mr. Murphy (continuing). Has expired. At this time we will
recognize the gentlelady from Florida, Ms. Castor, for 5
minutes.
Ms. Castor. Thank you, Mr. Chairman. Administrator
McCarthy, thank you for joining us today, and thank you for
your important work in protecting America's public health, and
our natural environment.
American families and businesses continue to save money at
the gas pump in part because of the improvement in the fuel
economy in the vehicles that we drive. I found this good
infographic from energy.gov that provides a historic look at
the standards, because they are set periodically to ensure that
vehicles are keeping up with the times, and this is a nice
little snapshot. It says 1978 the standard was 18 miles per
gallon. Boy, that seems outdated now. 1985, 27.5 miles per
gallon. Then 2011, up to 30.2 miles per gallon. And 2016, 35.5
miles per gallon.
Now, I really appreciate that the administration has
continued to push here, because what we have seen is
revolutionary in the types of vehicles that are available to
consumers right now. So you have the benefits that, when you
get better gas mileage, you are reducing carbon pollution. The
transportation sector is almost 50 percent of carbon pollution.
You are putting money right back into the pockets of American
families because they are getting more miles per gallon, and
then it is reducing fuel costs for businesses.
Do you have any recent hard data on the savings for
American families and businesses? And then I want to talk about
what the future goals are.
Ms. McCarthy. Well, we certainly can talk about what the
projections are, relative to the rules that we have done in the
first term of this administration. But I think the proof in the
pudding, if you will, is that you can't see a car commercial
where they don't talk about energy efficiency, because the car
companies now know that everyone wants fuel efficient vehicles,
and that we have designed our rules that allow even SUVs to
become more fuel efficient and remain part of the fleet, if
people need the sort of characteristics that those vehicles
provide.
So we know that people are already going further on a
dollar driving their vehicles, and we know that by the end of
2025 we will have doubled the ability to actually make that
dollar go far, to provide essential services to our families,
so----
Ms. Castor. Because the goal for 2025 is 54.5----
Ms. McCarthy. That is right.
Ms. Castor (continuing). And I know the administration has
set the first ever fuel economy standards for medium and heavy
trucks. Just last week----
Ms. McCarthy. Yes.
Ms. Castor (continuing). The President called on EPA to
develop and finalize the next phase of these standards,
building on the success of the initial fuel economy standards
for heavy duty vehicles. What are the expected benefits of the
new standards? What cost savings will consumers see?
Ms. McCarthy. Yes. Well, on the heavy duty vehicles, we put
forth a first phase, if you will, recognizing there was a lot
of ongoing work to make our heavy duty vehicles more efficient.
I think it might surprise people to know that the long term
truckers get about six miles per gallon, so they are dying for
more efficiency in the system as well.
I do not have those exact figures yet, but we know we can
make a significant leap forward. But we are working with the
industry now to put together a proposal that recognizes that
the challenge in this industry is to try to take advantage of
the new technologies that are available that can increase fuel
efficiency, but we also recognize that they are commercial
businesses that need to remain viable and affordable. And we
are trying to make sure that we recognize that balance as we
work with DOT to put these rules forward.
Ms. Castor. Thank you very much. I have another quick
question on your new proposed incentive fund under the Clean
Power Plan. You know, coming from the State of Florida, the
costs of the changing climate are kind of scary as we look out
in future decades.
And I wanted to ask you particularly about water
infrastructure and waste water infrastructure, because--think
of all the coastal areas and local governments in Florida. They
are looking at having to do very significant retrofits. I am
not sure that your new incentive fund would allow us to go to
that pot of money for those kind of water infrastructure, waste
water infrastructure, updates and retrofits. Are we--is that a
possibility, or do we need to look at the more traditional
revolving loan program?
Ms. McCarthy. No. There are actually climate resiliency
funds set aside in other parts of the budget, and why don't I
make sure that I provide you the information? The incentive
fund that I was referring to was to try to make it attractive
and encourage States to go further or faster than the rules
require, because we still want to make sure that they are
reasonable for everybody, but some States are prepared and
ready to move forward faster. And we want to make sure that
those States are rewarded for that.
Ms. Castor. Would that include things like smart meters?
Like, my State has been very slow going in trying to empower
the consumers to control their thermostat, and things like
that.
Ms. McCarthy. We haven't yet defined fully because we want
to make sure we work with States about what the best way to do
it is. But what you have to articulate is that that is an
opportunity to reduce demand----
Ms. Castor. Um-hum.
Ms. McCarthy (continuing). For electricity, or, in other
words, get more efficient, which that clearly would. Or else
you--but there is lots of flexibility to use it for direct
infrastructure improvements as well. So it all just has to be
tied back to that carbon pollution standard.
Mr. Whitfield. Gentlelady's time has expired. At this time
recognize the gentleman from Ohio, Mr. Latta, for 5 minutes.
Mr. Latta. Well, thank you, Mr. Chairman, really appreciate
it. And, Madam Administrator, thanks for being with us today. I
am going to kind of go back to Chairman Emeritus Dingell, if I
could ask you a series of questions real quick. And I think you
have been here when he has asked you the--a yes and no
question.
Ms. McCarthy. I have tried.
Mr. Latta. OK. But under the proposed Clean Power Plan, if
a State does not file a SIP, does EPA claim authority to
regulate the following under a FIP? And the first question is,
does the EPA claim authority to mandate that coal fired
generators run less, and that existing gas fired generators run
more? And that is assumed under the Building Block 2.
Ms. McCarthy. I am sorry, I certainly can answer those
after I give them some thought, but it is hard to do a yes or
no answer to that question.
Mr. Latta. OK. Number two, does the EPA claim authority to
mandate that fossil fuel generators run less, and that
renewable generators run more? And that is assumed under
Building Block 3.
Ms. McCarthy. EPA certainly has the authority, in a Federal
Implementation Plan, to establish standards for carbon
pollution for those individual sources. How they choose to
address those reductions of----
Mr. Latta. Would that be--would you be saying that would be
a yes, then, to the question?
Ms. McCarthy. We have the authority to set a standard. The
facility itself decides how to meet that standard.
Mr. Latta. OK. Let me ask this finally, then. Does the EPA
claim authority to make the general public use less
electricity? And that is assumed under Building Block #4.
Ms. McCarthy. We certainly do not regulate the behavior of
the public sector in this rule.
Mr. Latta. Well, I think, as you have mentioned, especially
going back to the first one, Mr. Chairman, if we could get
those in writing for more of an explanation----
Ms. McCarthy. I am happy to----
Mr. Latta (continuing). I would appreciate it. In 2013 coal
fueled approximately 70 percent of electricity generation in my
home State of Ohio. Under the Clean Power Plan, will EPA grant
a waiver of exception if there is a grid reliability risk or a
high cost to the rate payer issue that would happen?
Ms. McCarthy. Yes. EPA does not see the rule, as it has
currently been proposed, to have an impact on reliability. But
as we have done in the past, we will ensure that the tools are
available to us, should anything arise.
Mr. Latta. So that would be a yes, that there would be
waivers or exceptions granted?
Ms. McCarthy. We would be able to work through the issues.
Whether it is a waiver or another process, the tools are
available to us, and we would----
Mr. Latta. And, again, if we could--if--especially with
those tools, because it is really important, especially in my
State, because of the high usage of coal, that there would be
the waivers necessary. So if you would get back to us on that?
The existing ozone standards were issued in 2008, but are
just now being implemented by States, as guidance was just
released last week. I have major concerns that you are going to
forward proposing stricter standards before the current rule is
even implemented. And then, again, am I correct that States
have not fully complied with those standards from the 2008?
Ms. McCarthy. That is correct. There are--there is quite a
long horizon for States to be able to work on these issues.
Mr. Latta. And what percentage, or how many States would
have complied by now with the 2008----
Ms. McCarthy. I am sorry, sir, I don't have that at my
fingertips, but----
Mr. Latta. OK.
Ms. McCarthy. You know, States go through a designation
process, which we have done. There is an implementation rule
that has been put out as well, so we will be working on that.
And it does not conflict to continue to keep looking, as the
statute requires, at the standard itself and whether it is
sufficiently protective.
Mr. Latta. OK. Well, if you could also get back to the
committee, especially what States have not complied, and which
ones have, that would be very useful to the committee.
EPA has also stated that they do not know the cost to reach
the current standards, and will not know until the State Clean
Air Plans are submitted in 2016. And the question is how can we
have any confidence in the Agency in--estimates of the cost to
implement the new proposed standards?
Ms. McCarthy. Well, we actually do estimate the costs
associated with strategies where we can't particularly identify
it, but we do work very closely with our economists to make a
good faith effort. But, again, what we are doing here is
illustrating what States might do, but the rule itself, the
rule that we are doing to set a standard, is only about what we
believe is necessary to protect public health with an adequate
margin of safety.
Mr. Latta. OK. And finally I would like to just ask this--
back to the Clean Power Plan, Assistant Administrator McCabe
has stated that transmission and distribution efficiency, or
other opportunities to reduce CO2 emissions beyond
the building blocks. Does the EPA claim authority to require
owners of transmission and distribution facilities to increase
their operating efficiency, and if so, by what authority?
Ms. McCarthy. No. I think that Assistant Administrator
McCabe was mentioning the fact that we have provided
flexibility in that Clean Power Plan so that even if it is not
the building blocks that are achieving the reductions in--and
which--those are setting the standard, there are many ways in
which States can achieve those standards outside the boundaries
of those building blocks, and we are encouraging that
flexibility to be considered.
We are not encouraging any State to do anything that they
don't consider that is right, and cost effective, and
reasonable for them to do. There are just lots of choices, and
it is maximum flexibility on what States want to do.
Mr. Latta. Thank you. And, Mr. Chairman, my time has
expired, and I yield back.
Mr. Whitfield. Gentleman's time has expired. At this time
recognize the gentleman from Kentucky, Mr. Yarmuth, for 5
minutes.
Mr. Yarmuth. Thank you very much, Mr. Chairman. Welcome,
Administrator----
Ms. McCarthy. Thank you.
Mr. Yarmuth (continuing). McCarthy. I want to start by
asking you about mountaintop removal mining, which is a process
that poses very serious risk to the health and welfare of
Appalachian communities. I was pleased to note that in your EPA
budget justification you mentioned two recent court victories
concerning mountaintop removal mining, but there is still a lot
to be done. What resources will be available under this budget
to help communities endangered by mountaintop removal mining?
Ms. McCarthy. I am sorry, I don't have it broken down that
way, but I am happy to take a look at this for you, and to work
with your staff on getting you more specific numbers. But it is
an issue that is of concern, and we have been working through
these issues.
Mr. Yarmuth. Yes, I appreciate that very much. Earlier
today the--Chairman Whitfield mentioned the cap and trade bill,
Waxman-Markey, which he characterized as having been rejected
by the Congress, which is one way to characterize it. In fact,
it did receive a majority of votes in both the House and the
Senate. It was only killed because of Republicans in the Senate
who filibustered that bill. Is it fair to say that if Waxman-
Markey had been enacted into law, and not been stopped by
Senate Republicans, that we would not be involved with clean
power rules right now?
Ms. McCarthy. In some ways that might be the case, but I
don't know that for sure, sir, because the Clean Air Act really
is our responsibility to implement. It might have impacted the
choice considerably and the requirements to move forward.
Mr. Yarmuth. Well, I want to talk a little bit more about
the Clean Power Plan, and Kentucky, my home State, and the home
State of the chairman. I was really pleased to see yesterday
Len Peters, who is the Secretary of Energy and the Environment
in Kentucky, praising your work, the Agency's work, in reaching
out with--to the States on the Clean Power Plan. He said, I am
from Kentucky, and I am not a climate science denier, but what
EPA has done with outreach in leading up the proposed
regulation, the outreach they have done, I think is incredible.
He talked about your open door policy. He said, you could call
them, talk to them, meet with them, and we did take advantage.
He went on to say, well, we have already started the
process of determining what a compliance plan would look like.
I truly appreciate the outreach that the EPA has made to
Kentucky and other States, and, obviously, States face very
different challenges in cutting carbon pollution. We in
Kentucky are increasing our use of cleaner and less expensive
fuels, such as natural gas, but we still generate most of our
power from coal. I know that EPA recognizes that this is not a
one-size-fits-all solution. Can you discuss how the funding in
your 2016 budget request will be used to assist States with
implementing the Clean Power Plan?
Ms. McCarthy. Sure. We have, actually, a $25 million
request in our budget to work directly with the States on the
implementation of this rule, and we have an overall request to
ensure that we have the staff available to be able to work with
the States, and to take a look quickly at the plans to make
sure there is no delay in sending all the right signals about
how to move this forward.
Can I just say that Len Peters is a very honorable man? His
advantage in Kentucky is he looks at both energy and
environmental issues together, and I think it provides an
advantage for the State to see that these plans can be done,
and actually will provide benefits to the State, in terms of
the utilization of energy supplies that are both effective for
a reliable and cost-effective supply, but also can be designed
to be effective in reducing pollution that impacts their
health.
Mr. Yarmuth. Um-hum. So you obviously think that States
like Kentucky, which are coal dominated, can benefit from the
funds that would be appropriated----
Ms. McCarthy. They----
Mr. Yarmuth (continuing). Under this budget?
Ms. McCarthy. They absolutely can, as well as the incentive
fund that the President has proposed in this budget, which is
$4 billion. And I think that we have designed this in a way to
recognize that Kentucky doesn't, and shouldn't, have the same
standard that other States that aren't so heavily reliant on
coal have. So we have designed it in a way that we think is
achievable from the get-go, but also is flexible enough to
allow folks like Len Peters to get his arms around it and make
it work.
Mr. Yarmuth. OK. Well, I appreciate the flexibility that
EPA has shown, and, again, the cooperation that you have
exhibited with Kentucky and other States. I appreciate that
very much. I yield back.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from West Virginia, Mr. McKinley, for 5
minutes.
Mr. McKinley. Thank you, Mr. Chairman, and thank you again,
Administrator, for appearing before us. Let me start with a
question, perhaps, directly at--has the EPA ever made a
mistake?
Ms. McCarthy. I am quite sure.
Mr. McKinley. Do you think any of those mistakes have led
to a job loss?
Ms. McCarthy. I can't answer that question. We certainly do
our best not to make mistakes in the first place, and the
data----
Mr. McKinley. OK, but----
Ms. McCarthy (continuing). That we see----
Mr. McKinley (continuing). It is just that----
Ms. McCarthy (continuing). Shows that job loss is not a
consequence of environmental rules.
Mr. McKinley. I want to make sure that you understand, and
the public--I don't think there is a will in Congress to do
away with the EPA.
Ms. McCarthy. That is good----
Mr. McKinley. You hear that a lot. I, you know, some of
the----
Ms. McCarthy. Thank you.
Mr. McKinley. I don't think there is the will to do that. I
think that many of us here recognize that the EPA has helped
lead the way for clean air and clean water. But there is
reaching a point someplace in this balance that we want the EPA
to be more responsible, and to be more receptive to the impact
your decisions are having on families. And I think you are
missing the point. Just two examples with that is--that I could
is that--the timing of your additional regulations, and the
second, the use improper or flawed models that you are using.
Let me just touch on the timing issue. There is an adage
that we use often, and all of us have used in raising families,
is just because you can doesn't mean you should. And we know
the EPA has the ultimate power to issue any regulation, and you
well know that Congress doesn't quite have the--we don't have
the votes here to be able to overturn that. So whatever you are
issuing, it is becoming the law the land with your regulation.
So there is a time and place for everything, and I am just
concerned that maybe the EPA has gotten a little bit more
aggressive than they should be with it.
I come from West Virginia, and that is part of rural
America. That is the main street. Wall Street may be having
great success, but rural America, Main Street, is still
struggling, and yet I keep seeing the EPA putting another
regulation on top of another regulation. And the ozone rule,
they barely have achieved the first--they increased that
standard again. I think what it has led, by these over-
regulation--in rural America it has led to people--their well-
being, their mental health, is all being affected by it. I
think we are having some depression in areas around the country
because of the threats of regulations, what it is doing to
jobs. I think we are seeing more and more people working part
time. They are underemployed. It could go on, and on, and on,
and I really believe it is directly attributed to the
regulatory body with it.
I think all of us know a Mildred Schmidt. She probably
lives right next door to you. She lives next door to me in
Wheeling, and someplace--Mildred Schmidt sits at her kitchen
table, she wants clean air and clean water, but her first and
foremost request, I want a job for my son. I can't find a job
because either the coal mines are pulled back, or the steel
companies, the chemical--something is shut down as a result of
over-regulation. And I am struggling with that. I have
struggled with the second issue, about your poor modeling that
I have heard you--the talk about.
The poor modeling is with the heavy trucks. Back in 2010
you said there was going to be about $3,400, but we are seeing
three times that cost, is what it is going to affect with it.
We see the mercury and air toxic standard, that your prediction
said that there will only be 10 gigawatts of power shut down,
but the Department of Energy and others say it could be six or
10 times that amount is going to be shut down. But yet you
continue to issue more regulations, even though the model is
saying it doesn't work with it. You have had a model that
talked about how CO2 impacts the temperatures around
the globe. We know from the standard, that doesn't work.
So let me just close in the time I have with this that--
there is a George Mason University report, the Mercatus Group,
and they say regulations can affect job creation, wage growth,
and the workforce skill mismatches can result in lower labor
workforce participation, and higher unemployment rate in the
long run. Madam Administrator, I am torn over the disconnect
about how you continue to say at the EPA that it is helping the
economy, when others are saying absolutely the opposite.
We didn't come here to Congress to be bullied by radical
environmentalist policies. You know, we came here, I think, to
serve our Nation, but we want to preserve our economy, and the
regulatory environment that we are facing here is very
destructive. I hope you will take that into consideration.
Mr. Whitfield. Gentleman's time has expired. At this time
recognize the gentleman from Iowa, Mr. Loebsack, for 5 minutes.
Mr. Loebsack. Thank you, Mr. Chair. Great to see you, as
always, Madam Administrator. I do want to take this opportunity
to invite you back to the Iowa State Fair this summer, if you
can make it.
Ms. McCarthy. Terrific.
Mr. Loebsack. It would be wonderful for you to be there. I
know there are a lot of folks, not just in the ag sector, but
others who would love to see you there. I have been going back
and forth between this and another subcommittee, and so the
RFS, I know, probably did come up already, and I hope I am not
repeating what was already asked, and asking you to repeat what
you have already said. But, as you know, that is a really big
issue in my State. We have talked about this in meetings until
both of us were blue in our face, probably, especially just
trying to figure out, you know, what we are going to be doing
going forward.
As you know, EPA is required by law to set mandated levels
for 2008 through 2022 for the different types of renewable
fuels blended into gasoline and diesel, and we had a big issue
over 2014. And now I am kind of--there are a lot of folks, you
know, who are concerned about this. We are reading different
things in the media. There was some article just yesterday, or
the day before, and I don't know where they got their
information, said that the 2014 levels are going to be set
retroactively based on what actually happened in 2014, and then
'15 and '16 are yet to be determined.
So can you give us some clarity as to where we are with
respect to the RFS? I know there are others up here who want to
know about this, and who may not agree with me, necessarily. I
am not going to point out anyone in particular, but we have our
differences up on this panel about this as well.
Ms. McCarthy. Well, we are doing our best to take a look at
how we can move forward with 2015. And you are right, we also
are looking at how we can best send a longer term market
signal. Because the biggest problem we had with not putting out
the rule in 2014 was that we didn't have an opportunity to send
that research signal. And I think that investments, continued
investments in the sector are going to be essential.
Mr. Loebsack. All right.
Ms. McCarthy. So we will get this rule done. We are also
looking at what we can do in the following years. We are
already late in proposing 2015.
Mr. Loebsack. Right.
Ms. McCarthy. We have to play some catch-up here, and do it
in a way that sends a signal that we recognize the statutory
levels that Congress has set, and we need a trajectory to move
forward here. And I think we had problems in 2014 that we have
all learned from, and we will not repeat those problems again.
Mr. Loebsack. Um-hum.
Ms. McCarthy. And we will work with you. And I know how
important it is to your State. I sat down with Governor
Branstad on Friday, who reminded me----
Mr. Loebsack. All right.
Ms. McCarthy (continuing). Again, and so----
Mr. Loebsack. I am sure he did.
Ms. McCarthy (continuing). We will work through these
issues, because I know that there are challenges there that are
difficult for all of us.
Mr. Loebsack. Yes, and it is just--really, as you know, it
is the uncertainty attached to all this. And we are not just
talking about ethanol, obviously. That is the big one that----
Ms. McCarthy. Yes.
Mr. Loebsack (continuing). You know, folks talk about all
the time, and it is not just that. It is biodiesel, it is
second-generation ethanol, cellulostics. It is a lot of
different things that we are talking about here. And it does
get complicated, there are no question, but it is just so
important, you know, for folks to have some kind of certainty
down the road so they know what it is going to be, so they can
plan, you know, for their investments. And we have got a lot of
folks, a lot of great people in Iowa and beyond who are
involved in this industry who are planning in spite of the
uncertainty, and they are doing the best they can----
Ms. McCarthy. They are.
Mr. Loebsack (continuing). Biodiesel folks. That is a tough
issue for them, as you might imagine too. And there we get into
the credit, as well as the RFS. But those are just really tough
issues, and I am just here to advocate, obviously, and push you
as hard as I can to get this rule done, and make sure that we
have some kind of certainty for those folks.
Ms. McCarthy. Thank----
Mr. Loebsack. The second issue--and thank you for your
response. Second issue has to do with the Clean Power Plan,
and--as you know, requires power plants to reduce emissions by
25 percent by 2030, and Iowa has already made some great
strides, taking advantage of alternative energy. One of my
colleagues the other day asked me, well, Iowa, you get about 25
percent of your electricity from wind. I said, 27.3, as a
matter of fact. And I have a lot of wind generating industries
in my Congressional district. And so Iowa has gone pretty far,
in fact. I think not only are we showing others how it has to
be done, but we have cut emissions, and I think we need to
achieve 16 percent to meet the power plan's goal.
The question is, is EPA willing to work with individual
States? Are you willing to take into account, as we go forward,
what individual States have done? And how is that going to play
out, if that is the case?
Ms. McCarthy. Yes. We will work with both individual
States, in terms of the analysis we have done, on a State-by-
State basis. We have also been challenged to look at the
framework, and whether or not we got it quite right. And we are
looking at both of those issues, as you can--you probably know
we received a lot of comments on this----
Mr. Loebsack. Right.
Ms. McCarthy (continuing). But we are going to take our
responsibilities seriously, both to look at the individual
State numbers and the framework itself.
Mr. Loebsack. I mean, there are a lot of folks out there
doing good things. Best practices, you know, there is no
question about that. I am very proud of what we have done in
Iowa, as you might imagine.
Ms. McCarthy. I am amazed at the wind generation in Iowa.
It is quite a success story.
Mr. Loebsack. Thank you, Madam Administrator. Thank you,
Mr. Chair, and I yield back.
Mr. Whitfield. At this time I recognize the gentleman from
Illinois, Mr. Kinzinger, for 5 minutes.
Mr. Kinzinger. Thank you, Mr. Chairman, and thank you for
saying my last name correctly. Hey, everybody. Thank you for
being out here. Thanks for your service. Thanks for taking the
time with us today.
You know, nuclear power plants throughout the country
provide safe, zero carbon emission. The power is--amazingly
reliable source of power, capacity factors running well into
90th percentile worldwide. Unfortunately, we have seen over
4,000 megawatts of nuclear generation retired, with an
additional 10,000 megawatts nationwide being targeted. I
understand there are a number of factors influencing this
portion of the energy industry, but what I don't understand is
the initial emissions rate and goal set out by your
administration through the Clean Power Plan. For some reason,
only six percent of the State's existing nuclear fleet is able
to be utilized, and that leaves States with no reason to look
towards clean nuclear generation in order to comply with your
order.
I know this was touched on a little earlier by my colleague
from Illinois, but is the EPA going to review and modify the
treatment of nuclear in the final rule?
Ms. McCarthy. Well, we certainly have received a lot of
comments, and we did tee up a proposal. I would characterize it
a little differently than you may have, but it was an attempt
to recognize that we realize nuclear base load that is
operating today is a significant source of electricity that is
zero carbon. We wanted to point that out to States. We have
received a lot of comment on that. We will be taking a very
close look at this issue.
Mr. Kinzinger. OK.
Ms. McCarthy. And I do know how important it is for your
State.
Mr. Kinzinger. OK. So do you have any idea why only six
percent was included initially?
Ms. McCarthy. Actually, the six percent was an attempt to
recognize that there are a number of vulnerable base loads----
Mr. Kinzinger. Right.
Ms. McCarthy (continuing). That have not yet committed to
permit renewal. That will ensure that they remain a significant
part of the base load capacity. And that was an attempt to try
to capture that, to indicate that we are building those into
the standard setting process because we believe that they may
be at risk, but they should be staying in, all things being
equal, because we are providing an incentive for a low carbon
future with this rule.
People did not appreciate the way we handled it, many of
them, so we are re-looking at it on the basis of the comments
that came in. But it really was an attempt to recognize the
value of nuclear in the current base load, and the danger of
not recognizing that right now they are competitively
challenged. But there is a need to look at that if you really
want to make sure that we are providing an opportunity for a
transition to a low carbon future that is----
Mr. Kinzinger. Yes, that is right----
Ms. McCarthy (continuing). Reliable and affordable.
Mr. Kinzinger. And especially, you know, if you want to see
the price of energy skyrocket, start watching some nuclear
power plants shut down, so--I appreciate that. And then also
just a couple of quick ones. EPA's budget documents state that
the Clean Power Plan will be implemented throughout State
compliance plans that are submitted to the EPA for review and
approval, with initial submittals beginning in 2016. Does the
EPA plan to require initial State plans in 2016?
Ms. McCarthy. For many. We have also provided opportunities
for longer periods of time if States are looking at doing
things that require legislative approval, like interstate
agreements. So we are trying to be flexible, but we certainly
need a signal in 2016 that the States are making a commitment
to a path moving forward, and we have tried to define what that
would look like in the plan itself.
Mr. Kinzinger. So under the Unfunded Mandates Reform Act,
you are required to estimate the burden on States to develop
that plan? Do you have an estimate of how much it will cost
States to develop these plans? Can you supply those estimates?
Ms. McCarthy. We actually have asked in this budget
proposal for $25 million to support that activity to States,
which is hopefully going to send a signal that if we want to
get this done, we need to work together, and we also need to
support the efforts of the States in moving this forward. But
States are pretty familiar with this type of a planning
process, and I am just hoping that Congress will support that
extra 25 million. But we certainly give support to the States
for these types of air efforts----
Mr. Kinzinger. So the----
Ms. McCarthy (continuing). And we are hoping to expand
that.
Mr. Kinzinger. So the 25 million, will that go directly to
States----
Ms. McCarthy. Yes, it would----
Mr. Kinzinger (continuing). Help them with these plans?
Ms. McCarthy (continuing). In our State grants----
Mr. Kinzinger. And so is your estimate, then, that it is
$25 million to develop State plans, or is that just a piece of
what you hopefully will determine is the overall cost of----
Ms. McCarthy. Well, we think that will provide them an
opportunity to do this without weakening their ability to
continue to do work in other air challenges.
Mr. Kinzinger. OK. And if you get estimates--you may be
highlighting some there, but if you get estimates, if you could
just communicate that with our office, that would be great.
Ms. McCarthy. Yes. I would also point out that the budget
includes $10 million for us to support tools that the States
would readily be able to use in their plan development. So we
are doing the best we can to make sure they have both the
flexibility and the resources to get this done.
Mr. Kinzinger. And you will--with all the comments you are
getting on this, you know, put that in--especially if you made
changes, put that into updating the estimates and whatnot, I
would----
Ms. McCarthy. Yes.
Mr. Kinzinger (continuing). Assume? OK.
Ms. McCarthy. Thank you.
Mr. Kinzinger. Mr. Chairman, thank you so much, and I yield
back.
Mr. Whitfield. Thank you. At this time recognize the
gentleman from Oregon, Mr. Schrader, for 5 minutes.
Mr. Schrader. Thank you, Mr. Chairman. Thank you for being
here, Madam Administrator. Appreciate----
Ms. McCarthy. Great to be here.
Mr. Schrader (continuing). It very much.
Ms. McCarthy. Thank you.
Mr. Schrader. Like to talk a little bit about Superfund
site administration and funding. As you may or may not know,
Portland Harbor is designated a Superfund site as of 2000. It
is a little bit unusual, in that both the business community
people that may have contributed to some of the problems there,
as well as others in the community have stepped up--
collaborative effort to try and deal with this.
It has been, you know, almost 16 years now. We have gone
through 10 different administrators. The goalposts have
changed, depending on which administrator in our region comes
in. The staff, there has been a tremendous turnover in staff,
and it has been difficult to deal with these moving goalposts.
We now have somewhat unrealistic standards regarding fish
consumption, which seems to be the indicator species, that, you
know, we are trying to grapple with, trying to work with the
Agency on, but it is difficult. You know, as a scientist,
veterinarian, I look at these things through a scientific
prism, and want to have these standards based on good science.
But even beyond that, it would appear that the current
regional administration has, you know, their own mindset about
what is going to be done regardless of what is being talked
about by the collaborative partners in our region. And we are
having trouble getting this decision in--I think it was middle
of 2013 there was a promise of additional help from the folks
here in DC to maybe move things along at an accelerated pace.
And again in January there was a discussion with our own
Department of Environmental quality, working with folks in DC
to help augment Region 10's ability to get the job done.
Ms. McCarthy. Yes.
Mr. Schrader. So I guess, basic questions here. You know,
the decision was supposed to be coming here in 2016. We have
heard it is going to be put off to 2017. We have been hearing
this for a lot of years, Madam Administrator, and the
uncertainty creates a big problem for economic development in
our region. If we are trying to get people back to work, for
trying to do the right thing for the environment, the sooner we
get this decision done, the sooner we can decide whether or not
it is economically feasible to work along the Portland Harbor.
I would like to think that both of them are not mutually
exclusive, but, again, what we are hearing from Region 10 would
seem to indicate it is mutually exclusive, going to the highest
cost alternative, in terms of remediation, rather than some of
the other remedial efforts that are actually out there. So
basically, want to know, is 2017 the best case scenario, and
can we hold, with all due respect, the Agency's feet to the
fire, and get a record decision by----
Ms. McCarthy. Yes.
Mr. Schrader (continuing). 2016?
Ms. McCarthy. I know that Portland Harbor was an issue that
came up during my confirmation process, and the interest in
this. And Dennis McDonough, who is our regional administrator,
is actively involved in this issue in a way that tries to make
sure that it is moving forward. And so I know that we are
putting the resources to this, and we will continue with this
discussion. I think we have turned a better corner.
Mr. Schrader. Good.
Ms. McCarthy. I know that we are not only looking at making
sure that we get the cleanup correct--did I say McDonough?
Sorry. Dennis McDonough----
Mr. Schrader. That is----
Ms. McCarthy (continuing). Is the Chief of Staff of the----
Mr. Schrader (continuing). Chief of Staff----
Ms. McCarthy (continuing). President.
Mr. Schrader (continuing). For the President of the United
States.
Ms. McCarthy. He didn't take on added responsibility
during--since my--Dennis McLerran, I apologize. We are looking
at ways that, while we may need more time to explore the final
cleanup, the record of decision on this, that we will have
sites ready and moving forward regardless of when that decision
gets made. So we will get that decision made as quickly as
possible, but we are also getting all the preliminary steps
ready so that we can continue to move forward, and not
sequentially think about these issues. And I think we are
working really hard with Oregon to make sure that that is the
case so that we don't lose any time in this process.
Mr. Schrader. Well, with all due respect, we have lost a
lot----
Ms. McCarthy. Right.
Mr. Schrader (continuing). Of time, and I am not convinced
the current Region 10 administrator shares your enthusiasm for
getting this thing done in a timely manner. And the biggest
concern I have, here you have got a collaborative partnership
willing to step up, and yet they are getting, what I would
perceive, beaten up on a regular basis, with unrealistic
requirements and expectation. Here is a group that could be a
shining example of how the process could actually work, then.
Your continued attention I appreciate.
Ms. McCarthy. You will have it. Thank you.
Mr. Schrader. Another issue in my State, of course, is wood
products.
Ms. McCarthy. Yes.
Mr. Schrader. We are a big--well, we would like to be a big
wood producing State. That doesn't seem to be possible anymore.
That is another topic for discussion. But for the wood that
does come out, there is a wood composite industry that is
pretty viable. I would like it to be more viable, and they have
been waiting for the formaldehyde standards for composite----
Ms. McCarthy. Yes.
Mr. Schrader (continuing). Wood products. The rule was
supposed to be done in 2013. It is now 2 years later. Again,
economic uncertainty is the enemy of business. Most businesses
can adapt, as long as they know what the rules of engagement
are. Can you tell me what the status of the regulation is, when
it is going to be finished, and is the President aware of the
final sign-off yet?
Ms. McCarthy. I certainly am aware of the challenge that we
have been facing in getting this rule finalized, particularly
as it has to do with laminates----
Mr. Schrader. Yes.
Ms. McCarthy (continuing). And our ability to be able to
address what is potentially a significant source of emissions,
but do it in a way that is viable and effective for the
industry moving forward. We are looking very hard at how we
resolve that issue so this rule can come out, and I do know
that we need the certainty that you are discussing. And I will
go back and see if we can continue to address this issue, and
get it out across the finish line.
Mr. Schrader. All right.
Ms. McCarthy. It has been since 2013, but this has not been
without its challenges. And we keep trying to develop a testing
method that will work and be cost-effective, but it remains a
challenge for us. But we will see if we can't get it moving.
Mr. Schrader. Well, thank you very--I work with the
industry. I think they are on your team, in terms of wanting to
get this done, so----
Ms. McCarthy. They sure are.
Mr. Schrader (continuing). Thank you very much, and I yield
back.
Ms. McCarthy. Thanks.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from Virginia, Mr. Griffith, for five--
--
Mr. Griffith. Thank you, Mr. Chairman. Thank you, Ms.
McCarthy, for being here today. Today is February 25, 2015, and
earlier you told Chairman Whitfield that you were confident of
going forward with the Clean Power Plan under 111(d). And I am
just wondering--your document--your budget document also states
the Clean Power Plan is President Obama's top priority for the
EPA, and the central element of the U.S. domestic climate
mitigation agenda. Yes or no, has there ever been a time since
it was announced by the President in June of 2014 that the EPA
has considered not finalizing this rule? Yes or no?
Ms. McCarthy. No.
Mr. Griffith. And has there ever been a time since it was
announced by the President in June of 2014 that you, as the
Administrator of the EPA, have considered not finalizing this
rule?
Ms. McCarthy. No, sir.
Mr. Griffith. So then, in the case of Murray Energy vs. EPA
and Regina McCarthy, when your lawyers said that the EPA may
not adopt the proposal related to final action--propose Section
111(d) related to the Clean Power Plan, your lawyers did not
tell the truth, the whole truth, and nothing but the truth to
the court, isn't that accurate, yes or no?
Ms. McCarthy. Sir, the proposal as proposed may not be what
we move forward with, but there has never been an indication to
me, in comments that were----
Mr. Griffith. OK.
Ms. McCarthy (continuing). Received----
Mr. Griffith. But they said they may not----
Ms. McCarthy (continuing). That would indicate we can't do
that.
Mr. Griffith (continuing). That they may not move forward,
that wouldn't be a complete statement of accuracy, since June
2014 and today you are very confident you are moving forward?
You are moving forward. That was the whole argument in the
case.
Ms. McCarthy. No, many----
Mr. Griffith. Let me move on.
Ms. McCarthy. Many things can happen.
Mr. Griffith. Let me move on.
Ms. McCarthy. You asked about my confidence level, and I
am----
Mr. Griffith. All right.
Ms. McCarthy (continuing). Confident that we can get this
done.
Mr. Griffith. All right. Well, let me move on then, because
it is interesting that your lawyers have taken several
positions on this. In the case of New Jersey vs. EPA, excuse
me, 517 F.3d 574 (2008), in regard to 111(d), the EPA
promulgated CAMR regulations for existing electric generation
units under Section 111(d), but, and I am quoting now from the
opinion, ``But under EPA's own interpretation of the section,
it cannot be used to regulate sources listed under 112. EPA
thus concedes that if the electric generation units remain
listed under Section 112, as we hold, then the CAMR regulations
for existing sources must fall.'' I would submit to you that
the same is going--there your lawyers have already conceded you
don't have the authority to regulate under both 112 and 111(d),
and yet you say you are confident in moving forward.
Ms. McCarthy. I don't agree----
Mr. Griffith. And let me read you----
Ms. McCarthy (continuing). With that----
Mr. Griffith (continuing). The language----
Ms. McCarthy (continuing). Interpretation, sir.
Mr. Griffith. And let me read you the language of the
actual code. 111(d)(1), ``The Administrator shall prescribe
regulations which shall establish a procedure similar to that
provided by Sections 110, under which each State shall submit
to the Administrator a plan which (A) establishes standards of
performance for an existing source for any air pollutant (1)
for which air quality criteria have not been issued, or which
is not included on a list published under Section 108(a),
or''--relevant section--``emitted from a source category which
is regulated under Section 112.''
So it would seem, from the language, from prior court cases
where the EPA conceded the point, that there is not legal
authority to move forward. And I know that you are not an
attorney by training, but I would have to submit to you, as an
attorney by training, that if you are confident of going
forward under 111(d) and being upheld in the courts, your
confidence is misplaced, and your lawyers are not telling you
the truth, the whole truth, and nothing but the truth. Let me
switch to another subject.
Your budget requests tens of millions of dollars to
implement the Clean Power Plan because you all have indicated
you need some expertise. I assume, however, that you do work
well with the Secretary of the Department of Energy. Is that--
yes or no?
Ms. McCarthy. Yes, I do.
Mr. Griffith. I thought you did. And so then I have to ask,
why are we going to spend tens of millions of the taxpayers to
give you all new employees for ``evaluating and capturing these
compliance strategies requires the Agency to tap into technical
and policy expertise not traditionally needed in the EPA, for
example, nuclear, wind, solar, hydroelectric, et cetera,'' when
the DOE already possess this expertise? Why not just work with
them? And I would submit that that is what you ought to do, and
that would save the taxpayers tens of millions of dollars.
Do you agree with me that, if we can use the DOE as
experts, instead of having the EPA open up a whole new branch,
that that would be better for the taxpayers of the United
States of America, yes or no? And I only have a couple seconds.
Ms. McCarthy. I do not agree that there isn't a need for--
--
Mr. Griffith. OK.
Ms. McCarthy (continuing). Expertise at EPA at all.
Mr. Griffith. All right. I think you all can share, but we
disagree on that. And, lastly, you agree that health in the--
and--of people and unemployment are connected with each other,
that people who are employed generally have a better health
standard that the unemployed sometimes don't enjoy? You would
agree with that, I would think. And I would have to say to you
that one of the concerns I have with--you have heard about the
wave after wave of regulation from Mr.----
Ms. McCarthy. Um-hum.
Mr. Griffith (continuing). McKinley, and how that is
hurting employment. I picked up the unemployment statistics in
some of my coal counties, and going in alphabetical order, and
just hitting the first two, Buchanan County, at the height of
the recession, had an 8.9 annual unemployment rate in '09, 8.9.
In '13, at the end of '13, it is 9.8, because of regulations
that are putting hundreds of thousands of coal miners and
related industries, their jobs are gone. This is not even
counting the folks who have just gone ahead and decided to
retire, or shut down their businesses, and are no longer
looking for employment.
That was Buchanan County. Dickinson County, height of the
recession, 2009 annual number, 9.0. Today--or 2013, 10.0. Our
economy is getting worse because of policies coming from your
Agency. And I apologize, I can't let you answer that because I
have to yield back. Thank you, Mr. Chair.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from Maryland, Mr. Sarbanes, for 5
minutes.
Mr. Sarbanes. Thank you, Mr. Chairman. Thank you,
Administrator McCarthy, for being here. Just on the last
exchange, I fear that the legal justification for the
Department's regulations was impugned. I have high confidence,
I want you to know, that there is a strong legal basis for the
regulations and the position that you are taking. And I want to
thank you generally. I want to thank the EPA, and I want to
thank the Obama administration for picking up the slack on the
issue of climate change, and addressing the ravages of climate
change.
Unfortunately, despite the efforts of many of us here to
try to move forward with a statutory response to this issue, it
hasn't happened. Congress has not done the job that it should
do. The EPA, again, I think, with sound legal authority, has
really taken a leadership role. And I also want to salute your
Agency, and the administration generally, for the Climate
Action Plan, which addresses climate change, for the Clean
Power Plan, for these historic international agreements which
are being undertaken, which finally gets us in a position of
momentum, in terms of addressing the issue of climate change.
In doing that, you are reflecting where the public is
increasingly. There is polling that indicates 70 percent of
Americans favor stronger limits on the amount of carbon that is
emitted by power plants because they understand the health
consequences of that, and they understand the impact on climate
change. Over 80 percent of Americans think that the United
States should take action to address climate disruption, based
on a poll in 2013. This is becoming an emerging consensus on
the part of public. I think they are appreciative of the
efforts that you, and your Agency, and the administration are
taking to address this important concern. Now, I understand the
solutions are not simple. Carbon emission reductions have to be
rooted in science. Aggressive goals must be set to avoid the
harshest impacts of climate change, and reasonable, intelligent
folks can differ on how to deliver those results. We will
continue to have the discussion in this committee.
But I think there is a false dichotomy that often gets put
forward, that somehow, in addressing climate change, we are
going to have to undermine our economy, and I don't think that
that is a fair narrative. I think we need to look at the fact
that investing in clean energy infrastructure can actually
produce terrific advances for our economy, and we need to get
on the cutting edge of that, because our peer nations around
the world are beginning to make those investments. We can be in
the position of being the leader, which will actually help our
economy, but not if we are asleep at the switch. So when we
say, why are we doing these things? There are a lot of good
answers. To protect the planet, to protect our health, public
health, to protect our national security, and to protect our
economy, by getting on the front end of these emerging
technologies.
Can you speak to what the Clean Power Act plan, the Clean
Power Plan that you have put forward, and the Agency has put
forward, what you see in terms of the potential positive
economic impact and job creation effect that that can have?
Because it is an important part of the dialogue.
Ms. McCarthy. Thank you for raising that. I know that we
feel very strongly that the way in which we have proposed this
rule, to provide flexibility to use energy efficiency and
renewable energy as part of not just our standard setting
process, but our compliance process, allows tremendous
flexibilities for States to take a look at where their energy
universe is heading. Where is the market? What is the
transition we are seeing towards a clean energy future,
regardless of this Clean Power Plan, and how can we follow
that? How can we allow every State to identify what is best for
them in terms of job growth opportunities, ways to invest in
their economy and grow jobs?
And we believe that, because of the flexibility we
provided, and because we know that the economy, and the energy
system, is transitioning towards a low carbon strategy,
businesses are transitioning already. Government has to follow,
and recognize there are ways of addressing our climate
challenge that can actually bring great economic benefit to
this country, and provide the spark and innovation that we need
to retain international leadership. We see this as being a path
to the future, instead of continued investment in very old
technologies that are not producing more jobs, that are not
being invested in. The investment is in clean technologies.
Mr. Sarbanes. Thank you very much. Thanks for your
outstanding testimony, and your work.
Ms. McCarthy. Thank you.
Mr. Sarbanes. I yield back.
Mr. Whitfield. At this time recognize the gentleman from
Ohio, Mr. Johnson, for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman, and Administrator
McCarthy. Thank you for being here today. I represent much of
Appalachia, Ohio. That is home to several coal mines, and coal
fired power plants, and home to the hard working, tax paying
men and women who work in those facilities to provide for their
families. These proud men and women produce the energy
resources that are keeping the lights on and heating the homes
of the majority of Ohio homes during this very cold winter.
So can you tell us why energy rich Ohio was excluded from
the public hearings on EPA's climate rules?
Ms. McCarthy. Well, as far as I know, sir, those hearings
were strategically placed around the country to ensure that
people could have access to attend those. They were very
heavily----
Mr. Johnson. Yes, it is interesting that they were
strategically placed in places where coal mining and coal
operations don't exist.
Ms. McCarthy. That is not correct, sir.
Mr. Johnson. I have the list----
Ms. McCarthy. Pittsburgh----
Mr. Johnson. I have the list----
Ms. McCarthy (continuing). Pennsylvania's fifth----
Mr. Johnson. How many coal mines are in Pittsburgh? I can
tell you how many coal mines are in eastern and southeastern
Ohio, and there are a number of them. But, you know, we can fix
this.
Ms. McCarthy. No, all I----
Mr. Johnson. I heard my colleague from Iowa say that he
invites you back to the Iowa State Fair. I would like to invite
you to come to Ohio----
Ms. McCarthy. Well----
Mr. Johnson (continuing). Sit down and talk directly to the
Ohioans who work in those coal mines, and in those power
plants, who are likely to lose their jobs as a result of EPA's
actions, your actions, Administrator McCarthy. You know, they
pay your salary, they pay my salary. So let me ask you, will
you meet with them? I will arrange my schedule so that I can be
there to be there with you, and we can have a dialogue with the
people whose lives are being affected by the regulations coming
out of your Agency.
Ms. McCarthy. We have been reaching out all across the
country----
Mr. Johnson. No, I am asking you, will you come with me?
Because I will help set it up.
Ms. McCarthy. Every State is asking me to go to their
State.
Mr. Johnson. I am asking you today. That is a simple
question.
Ms. McCarthy. I really----
Mr. Johnson. Yes or no? Can I get with your----
Ms. McCarthy. I will not make----
Mr. Johnson (continuing). Team?
Ms. McCarthy (continuing). A commitment to go to your State
on specific----
Mr. Johnson. OK. I am going to have my team----
Ms. McCarthy (continuing). Unless you believe----
Mr. Johnson (continuing). Reach out to your office to try
to set up that meeting, then, because I am going to take that
as a yes. Is that what you just said? That you are willing to
meet?
Ms. McCarthy. No, I am always willing to talk to you, sir,
but----
Mr. Johnson. No, I am asking you will you come to Ohio and
meet with the men and women----
Ms. McCarthy (continuing). From----
Mr. Johnson (continuing). Reclaiming my time, Administrator
McCarthy, it is a simple question. Will you arrange your
schedule to come and meet with the people that are being
affected in Ohio by the actions of your administration?
Ms. McCarthy. I am happy to continue to talk to you, sir.
If there is a stakeholder that we have excluded from the
process, I will----
Mr. Johnson. Will you come?
Ms. McCarthy (continuing). In.
Mr. Johnson. You are not going to answer the question, so I
will--on.
Ms. McCarthy. OK.
Mr. Johnson. It is clear why you left those folks out, but
I will set up the meeting, and we will reach out to your team,
and see if we can work that out.
You know, nuclear power is our only high capacity base load
generation source that emits no carbon dioxide. We have talked
about that a little bit, but we are in danger of losing some
units in our existing fleet for multiple of reasons. If any of
them close, overall carbon dioxide emissions increase. That is
a fact, because even if intermittent renewable energy, wind and
solar, were to displace the power, it must be backed up by
natural gas generation. So, therefore, I am concerned about how
the rules treats our existing nuclear fleet. For example,
plants that choose to go through the rigorous re-licensing
process will not be considered the same as new nuclear units
for compliance, and it seems to me that they should be.
So here are my questions. Do you believe that the NRC will
approve each and every nuclear re-licensing application it
receives throughout the compliance period, and do you believe
that every, or even most, operators will want to make the
significant investment to pursue re-licensing? And before you
answer that question, your new rule basically assumes a yes
answer to both of those.
Ms. McCarthy. I do not know the success of the NRC process,
in terms of re-licensing. I do know that we attempted to
address nuclear energy, and point out its value in current base
load, and its value in a low carbon strategy in this
rulemaking, and we received a lot of comments on----
Mr. Johnson. But you have assumed that every nuclear re-
licensing application is going to be approved, and you have
assumed that those nuclear facilities are going to actually go
through that rigorous process, and investment to get there. And
I am going to tell you, I think that is a flaw in your
rulemaking. And it is something that you folks ought to look
very, very closely at. And I apologize, Mr. Chairman, but I
have exhausted my time as well, and I yield back.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from Indiana, Dr. Buchson, for 5
minutes.
Mr. Buchson. Thank you, Mr. Chairman. Excuse me. Thank you
for being here, we appreciate it.
Ms. McCarthy. Thank you.
Mr. Buchson. Climate is changing. It has always been
changing, for centuries. We know that. I think reasonable
people can continue to have a debate about the human impact on
that. That said, I think we all can agree that we should always
be working towards improving our emissions as we generate
power. But my position is that we should be doing this through
innovation and technology development, and not through
overreaching Federal regulation.
Would you agree that, in general, a rule that is proposed,
on any subject, really, should be based on the availability of
the technology to comply with the rule? Or, if the technology
isn't available, would you agree that maybe that rule needs to
be revisited?
Ms. McCarthy. Well, we certainly know that, when we rely on
a technology as part of our standard setting process, that we
have to do our due diligence on that technology.
Mr. Buchson. Well, that said, and I am not going to repeat
what one of my colleagues talked about on carbon capture, the
administration has taken a position that no new coal plants
should be built in the United States unless they are equipped
with CCS technologies, which were earlier pointed out, but
right now there is nothing that has been demonstrable to be
successful to accomplish that. And the one that you are quoting
is not in the United States, and actually may very well not be
financially successful.
But right now you are aware that Germany is building new
coal plants without CCS, as is other countries in Europe, and
in Japan? Does the EPA object to that?
Ms. McCarthy. Well, the EPA certainly is looking to be
able, not just EPA but across the administration, to provide
opportunities for continued advancement of the technology, and
to ensure that coal gets cleaner over time so it is part of a
clean energy future.
Mr. Buchson. And because these countries are building
state-of-the-art new power plants without CCS, shouldn't we
allow them to be built in the United States?
Ms. McCarthy. They have different energy strategies, sir. I
know they are heavily investing in a variety of things, so I am
not----
Mr. Buchson. Actually, they are investing in coal, and
getting out of other energy sources because the other energy
sources, they can't afford them anymore. They are so subsidized
by the Government, the citizens can't afford to pay for the
power, so they are going back to lower cost energy. That is the
truth.
I want to switch gears, though. I want to talk about
another subject. I was a medical doctor before I was in
Congress, and--about medical incinerators. And this has to do
not with just Ebola, but other things, and----
Ms. McCarthy. Um-hum.
Mr. Buchson (continuing). One of the methods recommended by
the CDC for treating infectious medical waste, such as Ebola,
is--and over the past 2 decades, really, the EPA has regulated
hundreds of medical waste incinerators out of existence,
thereby limiting options for hospitals to properly dispose of
extremely dangerous material.
So my question is what are our options? I mean, the EPA has
limited the option. In the name of public health, what
technologies are available for hospitals and first responders
to deal with the threat of medical waste? Ebola waste, for
example, but others? And what resources has the EPA dedicated
to determine such technologies comply with its standards before
we have other problems, potentially other outbreaks?
Ms. McCarthy. Sir, I think EPA standards have ensured that
our medical waste facilities can actually properly manage
waste. I think, if you have been in the industry a long time,
you will know that there are a lot of facilities out there that
weren't properly managing normal medical waste, never mind the
challenge of Ebola contaminated----
Mr. Buchson. Fair enough.
Ms. McCarthy (continuing). Waste. And we are working very
closely across the administration, and with the CDC and others,
to ensure that there is a pathway forward to handle Ebola
waste. And waste incinerators today are capable of handling
that waste very effectively.
Mr. Buchson. And, you know, how many are there in the U.S.,
you know, that can handle that? Do you have any ballpark idea?
Ms. McCarthy. I don't----
Mr. Buchson. I don't off the top of my head, either.
Ms. McCarthy. I certainly will follow up, if you----
Mr. Buchson. Well, this is something, I think, that, you
know, from the medical community standpoint, when you, you
know, that is an issue, and it sounds like the EPA's, you know,
takes that seriously, and wants to----
Ms. McCarthy. And we have brought them----
Mr. Buchson (continuing). Make sure that we----
Ms. McCarthy (continuing). All together to talk about
this----
Mr. Buchson (continuing). Can deal with it.
Ms. McCarthy (continuing). Issue during the crisis, and we
will continue to work with----
Mr. Buchson. Yes.
Ms. McCarthy (continuing). Them on it.
Mr. Buchson. And I would argue that, you know, potentially,
with the threat of ISIS and other organizations that, you know,
dealing with this potential type of outbreak is a national
security issue, and we shouldn't just deal with it on the front
end, but on the back end, you know, if we have to start dealing
with that. And so I would implore you to look into that.
Ms. McCarthy. We will do that.
Mr. Buchson. So, again, you stated earlier, but I want you
to say again, does the EPA plan to revise its proposed rule for
new coal fired power plants to eliminate the CCS mandate, based
on the discussion we had previously about what other countries
are doing, and about the fact that there doesn't appear to be
technology available currently to comply with that mandate?
Ms. McCarthy. There has been no final decision made, sir.
We will look really closely at the comments that have come in.
I understand that many have come in on this very issue, and we
will look closely at them.
Mr. Buchson. Thank you very much. I yield back, Mr.
Chairman.
Mr. Whitfield. Gentleman yields back. At this time
recognize the gentleman from Oklahoma, Mr. Mullin, for 5
minutes.
Mr. Mullin. Thank you, Mr. Chairman. Ma'am, can you just
quickly sum up what the EPA's mission statement is for me?
Ms. McCarthy. Yes. It is to protect public health and the
environment.
Mr. Mullin. But not to raise revenue, or to write fines, or
anything like that? It is just to----
Ms. McCarthy. Not to raise revenue?
Mr. Mullin (continuing). Protect the public health, right?
Ms. McCarthy. Yes.
Mr. Mullin. OK. Can you tell me the total amount of fines
that the EPA assessed--now, this is off your Web site, I got
this directly from you guys--in FY '14?
Ms. McCarthy. I do not have that----
Mr. Mullin. Let me go through this. Administrative penalty
assessed, this is according to your Web site. Fiscal year 2014,
$44 million. Judicial penalties assessed, $56 million. State
and local judicial penalties assessed from joint Federal,
State, local enforcement actions, $7 million. Supplemented
penalties, $11 million. Fiscal year 2012, according to your Web
site, administrative penalties assessed, 52,022,612. Judicial
penalties assessed, $155,539,269. State and local judicial
penalties assessed, $49,000,231. Supplemented penalties,
$4,658,000.
I say all that because it seems like, to me, every time we
are cutting--now, I may make an assumption here, so stay with
me. Your total budget for fiscal year 2014 was $8.2 billion. Is
that not enough to operate the EPA with?
Ms. McCarthy. Sir, it might help to know that those funds
actually go to the Treasury, not to EPA.
Mr. Mullin. Well, then, if that is the case, they why was
Webco Industry fined $387,369 for not filing a TRA report----
Ms. McCarthy. A TRA----
Mr. Mullin (continuing). Which is a one-page paper? Now,
they had never been in problems, or had any issues with the
Administrator. They have had this facility for many, many
years, but they failed to file it one time. Yet on their other
facilities, they had filed it, but this one was an oversight,
and you guys came in and fined them $387,000, which is
astounding to me for a piece of paper, but yet you said if they
paid it in 10 days, you would knock it down to $193,679. And
when they asked if that could be paid--if they--that money
could be used for an environmental project, which is
historically what you guys allow to do when it is a reporting
issue, they were told by your agent, the EPA's agent, no, you
all needed the funding.
Ms. McCarthy. I don't know how that could be accurate, sir,
when we don't get the funding.
Mr. Mullin. But there is an exception to that rule. If you
look at the bill that you are referring to, that the money is
supposed to be going to the Treasury, there is exceptions to
that. Do you know what those exceptions are? If you look at it,
if you look at the statute that you are talking to, there are
areas in there that allows that money, depending on how it is
written, or what it is assessed for, for you guys to keep. So
can you tell me that all this money was surrendered back to the
Treasury?
Ms. McCarthy. That is my understanding, and I know of no--
--
Mr. Mullin. Do you know that for a fact?
Ms. McCarthy. I----
Mr. Mullin. Because we are going through it too, ma'am. And
I say this because we are going through this process of trying
to determine how these fines are even being assessed, how you
come up with the dollars that you are fining individuals. All
this money that I had stated was coming right out of the back
pockets of business owners, coming straight out of the economy,
going where?
Ms. McCarthy. It is going----
Mr. Mullin. And what did it do----
Ms. McCarthy (continuing). Treasury, sir.
Mr. Mullin (continuing). When we are talking about----
Ms. McCarthy. The only thing----
Mr. Mullin (continuing). Protecting the health--ma'am, hold
on. What are we doing when we are talking about protecting the
health of individuals? How does a $387,000 fine protect the
health of somebody when it was a piece of paper? There was
nothing else.
Ms. McCarthy. We are talking about enforcement that allows
us to level the playing field for businesses that are doing
what they are supposed to do, not----
Mr. Mullin. Level the playing field?
Ms. McCarthy (continuing). And that--actually make sure
that we are providing the health benefits that our rules are
anticipating.
Mr. Mullin. How is this leveling the playing field? Who is
it leveling it for, other than punishing a company?
Ms. McCarthy. The only thing I can think of, sir, to go
back to your original question about the law, is that there may
be an exception that you are citing that is for Superfund money
from responsible parties that EPA gets to collect, and then
disperse to pay for the cleanup. That is the only instance in
which I know of that a fine would ever directly benefit our----
Mr. Mullin. And why would you guys give them----
Ms. McCarthy (continuing). Other than----
Mr. Mullin (continuing). 10 days and drop it by $200,000 if
they paid it in 10 days?
Ms. McCarthy. You know, this is----
Mr. Mullin. And that--and, ma'am, this has happened to me
personally too----
Ms. McCarthy. Sir, I am----
Mr. Mullin (continuing). In my company.
Ms. McCarthy (continuing). Happy to sit down and--so you
have a company that has been fined?
Mr. Mullin. Yes. Yes, we have.
Ms. McCarthy. Well, then I am happy to sit down with you in
your current position, or as the person who runs that company,
to walk through that issue.
Mr. Mullin. No, what we are going at is trying to figure
out why we can't even get a sane--and even understanding why
the fines are being assessed the way they are, and yet you guys
are willing to immediately knock it down by $200,000. Now, our
fine wasn't nowhere near this----
Ms. McCarthy. Sir, I will not apologize for this Agency
strongly enforcing the rules that the American public----
Mr. Mullin. No, you are making your own rules up as you go.
Ms. McCarthy. No, sir.
Mr. Whitfield. Gentleman's time has expired. At this time I
would recognize the gentleman from North Dakota, Mr. Cramer,
for 5 minutes.
Mr. Cramer. Thank you, Mr. Chairman, and thank you, Madam
Administrator. Nice to see you again. It is always nice----
Ms. McCarthy. You too.
Mr. Cramer (continuing). To see you.
Ms. McCarthy. You too.
Mr. Cramer. I am having a hard time knowing where to begin,
because I have so many issues, but I think I will start with
the Waters of the U.S. rule----
Ms. McCarthy. OK.
Mr. Cramer (continuing). Because I think it is especially
relevant to the budgets, considering the appropriations.
Ms. McCarthy. Sure.
Mr. Cramer. We have provided some guidance, I think, in the
most recent one. Do you regret not utilizing a small business
advocacy review panel? And realizing you share this with the
Corps of Engineers, but----
Ms. McCarthy. Yes.
Mr. Cramer (continuing). Was that a mistake, to not do a
RFA?
Ms. McCarthy. No, I don't think so, because we actually
have done a tremendous amount of outreach to small businesses
looking at this rule, and I think we have the comments we need
to have a successful final rule.
Mr. Cramer. But the law requires an RFA, does it not? Which
you did not----
Ms. McCarthy. Say that again?
Mr. Cramer. But the law requires you to have done an RFA,
which you----
Ms. McCarthy. Actually----
Mr. Cramer (continuing). Did not do.
Ms. McCarthy (continuing). We went through the process of
looking at whether or not we needed to stand up what we call a
SBREFA panel. We consulted with OMB. That is the final
decision-maker on this, and they both agreed that we had done
the necessary outreach.
Mr. Cramer. So have you responded, then, to the SBA's
Office of Advocacy when they, of course, disagreed with your
certification that it had an insignificant enough impact on
small entities----
Ms. McCarthy. I have not directly spoken to them, but
certainly we have had interagency discussions on this. It is
important to remember that the Clean Water Rule is a
jurisdictional rule. It doesn't result in automatic permit
decisions. It says that there are certain waters that need to
be protected for drinking water, and that the permit decisions
themselves are what actually will be the result of the impact
and the further discussion.
Mr. Cramer. But I think that the rule, as I understand it,
presumes to narrow the jurisdiction, but the SBA Office of
Advocacy concludes that it does, in fact, broaden it. In fact,
the economic analysis doesn't sync with, I guess, your
analysis, or the EPA and the Corps' analysis.
And I have to admit, when it gets to the issue of the lack
of clarity, which the courts have stated, in the definition of
what navigable waters is, I understand that that should be
clarified, but it seems to me, as I look at the seven
categories in the rule, the definition gets cloudier, not more
specific, in my view. And, in fact, you know, if we end
somewhere after, like, three out of the seven, that would be
clear too, wouldn't it? Wouldn't it be just as clear to say
navigable waters are waters that are navigable for interstate
commerce, and leave it at that? Why wouldn't that be clear?
Ms. McCarthy. Yes. Actually, the area that lacks clarity
right now is not the issue of navigable waters. The Supreme
Court actually spoke very definitively that navigable waters
need to be looked at in a way that isn't the traditional
definition. We haven't been looking at navigable waters the
same way. It is a recognition that navigable waters, and their
ability to provide the functions that we look for, are really
severely impacted by the waters that flow into them.
So the challenge we tried to face in the Clean Water Rule
was to take a look at how do we identify those rivers, streams,
tributaries, wetlands that feed into those navigable waters
that we need to understand and protect so that they won't
degrade those waters that are so----
Mr. Cramer. Well, you have just used some new terms, new,
at least, in this rule that----
Ms. McCarthy. Yes.
Mr. Cramer (continuing). Weren't part of the previous one,
and I would add neighboring----
Ms. McCarthy. That is correct.
Mr. Cramer (continuing). Flood plain----
Ms. McCarthy. Yes.
Mr. Cramer (continuing). In addition to--that is adding,
not restricting, jurisdiction, in my view. It looks to me like
you are reaching for more power, as opposed to further
defining. And I just----
Ms. McCarthy. Yes.
Mr. Cramer (continuing). Am concerned that that is not the
role of the EPA but, rather, the role of Congress.
Ms. McCarthy. I appreciate your asking that. I think we are
actually looking at that as a way to be clearer, and to narrow
this, because there is so much uncertainty that there are more
case by case decisions being made than need to be made.
Mr. Cramer. Um-hum.
Ms. McCarthy. So we are trying to provide more clarity, but
we also know there are a lot of questions, in terms of how
people are reading the rule, whether we were clear in our
intent----
Mr. Cramer. Sure.
Ms. McCarthy (continuing). And clear in the language. And
we will work through those issues moving forward so the final
rule addresses some of those uncertainties.
Mr. Cramer. Well, given the little time I have left, I am
just going to make a couple of comments. One about--I hope that
the FERC technical conferences are going well, and that you are
paying close attention those as----
Ms. McCarthy. Yes, we are. Actually, Janet McCabe, my
Assistant Administrator in the air program, has attended those,
and we think they are excellent opportunities for us to
understand what the energy world is----
Mr. Cramer. I think that type of consultation earlier in
the process would have been better, but I am glad to see it is
happening now.
With regard to Mr. Sarbanes' comments about the EPA being
more in synch with the growing population, if you will, or
something to that effect, I would just want to state that the
absence of Congress acting on, say, cap and trade, or choosing
to not pass cap and trade, should not be viewed as neutrality
by the people's House, or by the people's representatives, and
somehow a license, therefore, to go ahead and catch up to the
public, if you will.
Because if public support is increasing for, whether it is
the Climate Action Plan, or Clean Power Rule, I would also
submit to you that the public is well ahead of the EPA, and
more in line with the Congress with regard to, for example, the
Keystone XL pipeline, which, so far, the only Agency that has
even said anything remotely negative has been the EPA, and, by
the way, it wasn't all that negative----
Ms. McCarthy. Thank you.
Mr. Cramer (continuing). Referring to the--that we have to
now consider the lower price of oil. But I would just want to
remind people that the price of oil was roughly what it is
today when TransCanada applied for the Keystone XL pipeline.
And I am over time. Thank you again.
Ms. McCarthy. Thank you.
Mr. Whitfield. Thank you.
Ms. McCarthy. Thank you.
Mr. Whitfield. At this time recognize the gentleman from
Mississippi, Mr. Harper, for 5 minutes.
Mr. Harper. Thank you, Mr. Chairman, and thank you, Ms.
McCarthy, for being here. And I think we are near the end, so
that is a good thing, so----
Ms. McCarthy. That is a thank you too.
Mr. Harper. Yes. If I could talk to you specifically, you
know, we have a number of industries, a number of groups in my
home State of Mississippi that, you know, are greatly impacted
by rules that are promulgated and enforced. And one that I
would like to just touch on for a minute would be our wood and
pellet heating unit manufacturers, and their problems with the
new source performance standards for wood heaters that the EPA
just finalized. You know, it is something that really impacts
us. These are usually small businesses that don't have a lot of
room in their budgets for R and D costs, in addition to testing
lab fees, and those things.
You know, I think with the first stage of this rule that
most companies are going to be OK. They can probably get there,
but the second stage, which I believe is scheduled to be
implemented in 2020, that is going to be extremely costly. It
sets very low emissions targets that I think are going to be
almost impossible to achieve with the current technology that
we have, and the resources. So my question is what budgetary
support does the Agency plan to provide to manufacturers as
part of your goal to deal with the air quality issues that
brought forth this?
Ms. McCarthy. Well, Congressman, I want to first say that I
believe your businesses were engaged in this, but we worked
really hard with the small business constituencies on this, and
the Small Business Administrator's Office for Advocacy. And we
did make substantial changes in the final rule that actually
sought to accommodate their interests, and making sure that
there was fewer impacts, in terms of existing stoves that are
generated and out there for sale, so that they could have
additional time to get those sales out----
Mr. Harper. Um-hum.
Ms. McCarthy (continuing). But also to extend the timeline
for compliance on these phases. So I apologize, I don't know
the specific----
Mr. Harper. Sure.
Ms. McCarthy (continuing). Dates, so I can't confirm, but
we did make a lot of changes. And I would be interested in
hearing from you and working with you to see if they actually
addressed the issues of concern.
Mr. Harper. Well, we will make sure that we communicate
further on that, because I believe it is something that would
necessitate some additional discussion and movement and
fairness. But what do I go back and tell those companies that
are now looking at a large--either lab testing fees, or R and D
costs that they don't really have in their budget to be
profitable? What do I go back and tell them?
Ms. McCarthy. Well, yes, I think we did a good job trying
to make sure that the testing components of these were moderate
enough that they didn't impose a significant cost to the
manufacturers. But the other thing to recognize, and this is
something maybe we can work on together, is in the past EPA and
States and regions have had funds that actually support the
distribution of these cleaner stoves. And I know that there are
States that will be looking at these stoves as being
opportunities for them to meet some of the air quality
standards that they are facing, particularly in the particulate
matter. If I can provide any opportunity for that dialogue to
happen on how we could work together, it would be a pleasure
for me to do that.
Mr. Harper. OK. All right. Thank you for that offer, and I
believe we will follow up on that----
Ms. McCarthy. OK. That would be great.
Mr. Harper (continuing). With you. If I could take just--I
believe the clock hit. I thought I had a little bit of time
left. Maybe a minute and a half?
Mr. Whitfield. Go ahead.
Mr. Harper. We are--feel like the shot clock ran out, so--
but what I would like to do to follow up is--on the issue of
how much implementing the proposed Clean Power Plan will cost
taxpayers. And this is--again, is specific to my home State of
Mississippi. And I checked with our Mississippi Development
Authority, and they indicated that the minimum incremental
capital cost to Mississippi to comply with the proposed rule
will be $14.2 billion----
Ms. McCarthy. Wow.
Mr. Harper (continuing). Which will primarily consist of
constructing generating facilities not likely to be built,
unless compelled by Federal mandate, and the rule will almost
certainly cause the premature closure of existing coal plants
in Mississippi, which would, of course, place upward pressure
on electricity prices. If the cost to Mississippi to implement
the Clean Power Plan would be $14.2 billion, would you agree
that this is too much to ask of Mississippi consumers? Would
the EPA revise the State's targets?
Ms. McCarthy. Well, we certainly--our economic analysis
certainly didn't indicate that that was an amount that would be
necessary for Mississippi to spend. In fact, I think it may
even be lower than what we estimated at our lower range for the
entire United States. So we should be sitting down and talking
through what the options are that we think provided tremendous
flexibility for every State to design a very cost effective
strategy.
Mr. Harper. Do you have a figure for Mississippi?
Ms. McCarthy. I do not. I do not believe we broke it down
by individual State, but we certainly could have those
conversations with the State----
Mr. Harper. OK.
Ms. McCarthy (continuing). About what their underpinnings
were that came up with that number. Because clearly it seems
like it is order of magnitudes larger than one would expect.
Mr. Harper. Thank you, and I think my time expired twice.
Thank you.
Mr. Whitfield. At this time we welcome back Mr. Scalise,
our Majority Whip, and recognize him for 5 minutes.
Mr. Scalise. Thank you, Mr. Chairman, I appreciate. And,
Administrator McCarthy, it is great to see you back here.
Ms. McCarthy. You too.
Mr. Scalise. Thanks for coming to----
Ms. McCarthy. You too.
Mr. Scalise (continuing). Testify about your budget. And,
of course, this is part of our oversight role, to go through
and, obviously, look at some of the proposals that are going to
be----
Ms. McCarthy. Yes.
Mr. Scalise (continuing). Made by the Department throughout
the year. I want to talk to you about some of the proposals
that not only are being proposed, and some of the impacts that
we are seeing, and how they might have some devastating impacts
in our local economies, but also ask about some of the others
in the past. Because, as you make proposals, you also attach to
them what types of impacts it might have in certain ways. And I
want to take, for example, the Mercury and Air Toxics Rule.
Some other Federal agencies, like FERC, when they were
looking at this, said that plant closures would be much higher
than the EPA estimates were going to be. It seemed to me, when
EPA got this information, you all kind of scoffed at it. But,
in retrospect, now that we can look back and see, the
administration's own data concedes that the MATS rule will
actually shutter 10 times more the amount of electricity
generation than you all originally anticipated. How do you
respond to something like that, when even other agencies within
the Obama administration were saying what you were proposing
was going to be devastating to electricity----
Ms. McCarthy. Well, we----
Mr. Scalise (continuing). Generation, and even more than
what you all were anticipating, and it turned out you were way
off? I mean, 10 times off on your estimates.
Ms. McCarthy. Actually, sir, I am not necessarily agreeing
that the mercury and air toxic standard was the precipitator
for all of the closures that we are seeing----
Mr. Scalise. But FERC made that warning too. I mean, are
you disputing what FERC----
Ms. McCarthy. There were----
Mr. Scalise (continuing). Claimed?
Ms. McCarthy. No. There were concerns raised about
closures. There were concerns raised about reliability and
cost, which is why we worked with DOE and FERC to address those
issues together. And, frankly, none of those concerns have
proven to be a reality.
Mr. Scalise. So you are----
Ms. McCarthy. April----
Mr. Scalise (continuing). Disputing that they----
Ms. McCarthy. April is when----
Mr. Scalise (continuing). Had those shutterings of
electricity generation, the 10 times increase in the shuttering
of electricity generation that has occurred since the MATS
rule?
Ms. McCarthy. No, I did not----
Mr. Scalise. Are you disputing that?
Ms. McCarthy (continuing). Say that. I said that there were
a number of closures. Whether they were attributable to the
MATS rule, or the simple fact that the energy world is
transitioning, is the question that I am----
Mr. Scalise. People need more electricity, and then you
come out with a rule that other agencies said were going to
have devastating impacts, much worse than you anticipated, and
those things happen, and then you say, well, yes, it happened,
but maybe it wasn't our fault.
Ms. McCarthy. We factored those issues in when----
Mr. Scalise. Why would they shutter----
Ms. McCarthy (continuing). We did our modeling.
Mr. Scalise (continuing). Those plants?
Ms. McCarthy. The shuttering of those plants was a market
decision that the market made----
Mr. Scalise. A market decision based on unachievable
standards that are coming out of the----
Ms. McCarthy. No, actually----
Mr. Scalise. We are seeing this time and time again.
Ms. McCarthy. The compliance timeline is this April, and we
have not received any request, legitimate request, to extend
that timeline beyond what is already affordable and factored
in.
Mr. Scalise. Well, then maybe you are not factoring enough
things, because you factored in that the MATS rule would only
have a minor impact on electricity bills, and yet Midwest
future electricity capacity prices have already skyrocketed
over 340 percent, largely due to MATS. So that--you said it is
not going to have an increase in rates, and they have had a 340
percent increase in rates in the Midwest. You need to go back
and look at some of the stuff, because--I know the President
loves talking about global warming, and, you know, they are
canceling flights all across the country due to snow blizzards,
and people are trying to heat their homes, and these rules are
having dramatic impacts.
I want you to answer some questions about a study that just
came out by the Beacon Hill Institute at Suffolk University in
Boston. I am not sure if you are familiar----
Ms. McCarthy. I am.
Mr. Scalise (continuing). With the study that just came
out.
Ms. McCarthy. No, I am not----
Mr. Scalise. You--definitely with----
Ms. McCarthy (continuing). Familiar with----
Mr. Scalise (continuing). Suffolk University.
Ms. McCarthy. Yes.
Mr. Scalise. They just came out with an economic impact
study on the effects of the new EPA rules on the United States.
I would ask unanimous consent if we can submit this report into
the----
Mr. Whitfield. Without objection. \1\
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\1\ The information has been retained in committee files and also
is available at http://docs.house.gov/meetings/IF/IF03/20150225/
103014/HHRG-114-IF03-20150225-SD008.pdf.
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Mr. Scalise. In this report, they go through and they break
down not only national impacts, which are devastating, but they
go State by State. So in my State of Louisiana, the Pelican
Institute for Public Policy, which looks at a lot of this
information, and looks at economic data, they went and broke
this down, and looked at the report, and, according to what
they have seen, you would have an impact, in my State of
Louisiana alone, of an increase in utility rates by 22 percent.
Electricity prices would go up 22 percent by 2030. The State of
Louisiana alone would lose over 16,000 jobs, based on these
rules.
And you just have to ask--I will read a quote from Kevin
Kane, who is the President of the Pelican Institute, ``Along
with these significant costs, it is worth noting that the
increases in electricity prices would disproportionately affect
lower income Louisianans, who spend approximately 70
percent''--7-0--``70 percent of their after-tax income on
energy. These costs need to be taken into consideration by
State and Federal policymakers.'' Are you all taking into
consideration devastating impacts like this on rules that you
are proposing, where you would increase people's electricity
rates? Lower income people that would be harmed heavily by
this, by 22 percent, and over 16,000 jobs lost in one State
alone. And, of course, this is national in the impact this
would have.
Ms. McCarthy. I don't know what study you are talking
about, what rules they are looking at----
Mr. Scalise. I will--yes, this is----
Ms. McCarthy (continuing). But I do know that----
Mr. Scalise. This is the Suffolk University study that
looks at the impact of----
Ms. McCarthy. I am happy to take----
Mr. Scalise (continuing). The new EPA rules.
Ms. McCarthy. I am happy to take a look at it, but I know
that Congress has actually charged us to do exactly that, to
take a look at the costs and benefits, and all the economic----
Mr. Scalise. So I would urge you to look at this study----
Ms. McCarthy. And when we have done that----
Mr. Scalise (continuing). And taking them, and if you would
have heard----
Ms. McCarthy. When we have done that, we have not seen the
damage that you are indicating. We have seen that we are
actually----
Mr. Scalise. Well, we have seen that. I just--340----
Ms. McCarthy (continuing). Part and parcel of a growing----
Mr. Scalise (continuing). Percent increase----
Ms. McCarthy (continuing). Economy.
Mr. Scalise (continuing). In electricity prices in the
Midwest alone. It has happened. This isn't a study. That
happened in the Midwest. Anyway, if you can look at this
study----
Ms. McCarthy. I would be more than----
Mr. Scalise (continuing). In relation to these proposed----
Ms. McCarthy. Yes.
Mr. Scalise (continuing). Rules, please----
Ms. McCarthy. Let me do that.
Mr. Scalise (continuing). These jobs.
Ms. McCarthy. OK. That would be great.
Mr. Scalise. Yield back the balance of my time.
Mr. Whitfield. Gentleman's time has expired, and that
concludes the----
Mr. Tonko. Mr. Chair?
Mr. Whitfield. Yes?
Mr. Tonko. If I might, I would just like to thank the
Administrator for her presentation today and her dialogue with
the committee. But I think there were a number of instances
where members had asked the witness questions, and then didn't
give her the opportunity to respond to that, so I think we
should extend the opportunity, if she so chooses, to respond to
any of those situations today, and would also make the plea to
the committee that we interact with these witnesses in a much
more courteous and substantive style so that we can achieve
what we are all hoping to achieve. And I would yield back.
Mr. Whitfield. Well, I think most people were pretty
courteous today, and I do know that there are questions that
were submitted that you said you would be getting back to the
committee with answers. And if there is some response that you
feel like you were not given an opportunity to make, I will be
happy to give you that opportunity now to respond.
Ms. McCarthy. Well, Mr. Chairman, first of all, you are
always a gentleman, and I appreciate that very much, and the
only issue that I didn't get a chance to talk about a little
bit more specifically that I wish I would have is the issue
that Mr. Griffith pointed out, on this 111, 112 issue.
And the only thing I would have pointed out is that he was
quoting from our defense of the Clean Air Mercury Rule. And the
reason why we were defending that way is because the conflict
occurred in CAMR that does not occur in 111(d) in our Clean
Power Plan because that was about the same source category, the
same pollutant, being regulated under two different sections.
We do not have that conflict here, so we do not believe that
that issue is really going to impact the legal viability of the
Clean Power Plan. But I thank you very much for raising this,
and for allowing me the honor to testify before you today.
Mr. Whitfield. Well, I think one thing that is certain is
that courts are unpredictable, and we never know precisely how
they are going to decide, so----
Ms. McCarthy. That is for sure. We can all agree on that.
Mr. Whitfield. But we do thank you for being with us today,
and taking the time to discuss the fiscal year 2016 budget, and
look forward to working with you as we move forward. That will
conclude today's hearing. The record will remain open for 10
days, and we do look forward to getting the responses that you
committed to giving back----
Ms. McCarthy. Thank you, sir.
Mr. Whitfield (continuing). To the committee.
Ms. McCarthy. Thank you.
Mr. Whitfield. Thank you. Meeting is adjourned.
[Whereupon, at 12:52 p.m., the subcommittees were
adjourned.]
[Material submitted for inclusion in the record follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
[Ms. McCarthy's answers to submitted questions have been
retained in committee files and also are available at http://
docs.house.gov/meetings/IF/IF03/20150225/103014/HHRG-114-IF03-
Wstate-McCarthyG-20150225-SD003.pdf.
[all]