[Senate Hearing 114-243]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 114-243

                      ECONOMY-WIDE IMPLICATIONS OF
                      PRESIDENT OBAMA'S AIR AGENDA

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 29, 2015

                               __________

  Printed for the use of the Committee on Environment and Public Works



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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                    ONE HUNDRED FOURTEENTH CONGRESS
                             FIRST SESSION

                  JAMES M. INHOFE, Oklahoma, Chairman
DAVID VITTER, Louisiana              BARBARA BOXER, California
JOHN BARRASSO, Wyoming               THOMAS R. CARPER, Delaware
SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
JOHN BOOZMAN, Arkansas               SHELDON WHITEHOUSE, Rhode Island
JEFF SESSIONS, Alabama               JEFF MERKLEY, Oregon
ROGER WICKER, Mississippi            KIRSTEN GILLIBRAND, New York
DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
MIKE ROUNDS, South Dakota            EDWARD J. MARKEY, Massachusetts
DAN SULLIVAN, Alaska

                 Ryan Jackson, Majority Staff Director
               Bettina Poirier, Democratic Staff Director
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
                            C O N T E N T S

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                           SEPTEMBER 29, 2015
                           OPENING STATEMENTS

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
Boxer, Hon. Barbara, U.S. Senator from the State of California...     4

                                WITNESS

McCabe Hon. Janet, Acting Assistant Administrator, Office of Air 
  and Radiation, United States Environmental Protection Agency...    10
    Prepared statement...........................................    12
Responses to additional questions from:
    Senator Inhofe...............................................    21
    Senator Boxer................................................    37
    Senator Wicker...............................................    38
    Senator Fischer..............................................    41

 
       ECONOMY-WIDE IMPLICATIONS OF PRESIDENT OBAMA'S AIR AGENDA

                              ----------                              


                      TUESDAY, SEPTEMBER 29, 2015

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The full committee met, pursuant to notice, at 10 a.m. in 
room 406, Dirksen Senate Office Building, Hon. James Inhofe 
[chairman of the full committee] presiding.
    Present: Senators Inhofe, Boxer, Barrasso, Capito, Wicker, 
Fischer, Sullivan, Carper, Whitehouse, Merkley, Gillibrand and 
Markey.

            OPENING STATEMENT OF HON. JAMES INHOFE, 
            U.S. SENATOR FROM THE STATE OF OKLAHOMA

    Senator Inhofe. The meeting will come to order.
    I have shared this with a couple of the members. Some of us 
just came up from the Armed Services Committee. There were 
seven Republicans on the one side that are members of this 
committee and members of the other. So I am going to be asking 
the staff to coordinate with all the members on both sides to 
find a time other than 10 o'clock on Tuesday. Because I have 
given up getting Armed Services to change theirs.
    So we have to very significant, we have the biggest overlap 
of any two committees in these two committees. So we are going 
to try to correct that.
    Acting Assistant Administrator McCabe, thank you for taking 
the time to be here to talk about two of the most expensive and 
intrusive Federal regulations ever put forward in the history 
of this Country: the National Ambient Air Quality Standard, or 
NAAQS, ozone and the recently finalized carbon standards for 
power plants. Your agency is attempting to restructure our 
entire energy system while simultaneously controlling economic 
expansion.
    These regulations would cost hundreds of billions of 
dollars, leaving stakeholders with an economic burden that will 
take generations to pay down. These regulations stand to impact 
every industrial sector and would skyrocket the price of doing 
business in this Country, making us non-competitive. These 
regulations would reduce the domestic investment in associated 
jobs, likely shipping them overseas to countries like China 
with less stringent environmental standards.
    I can remember when Lisa Jackson was first appointed to be 
the Director of the Environmental Protection Agency. She made 
the statement, in response to my question, if we have all these 
standards that we are going to meet in this Country, is this 
going to have the effect of reducing emissions worldwide. She 
said no, because of course, this isn't where the problems is. 
The problem is in China, it is in India.
    So I think we recognize now that it could actually, 
reductions here could cause our manufacturing base to go to 
countries where they don't have any restrictions and it could 
have the effect of increasing and not decreasing it.
    Finally, these regulations could cause the most harm to 
low-income and minority families, as your agency forces a shift 
away from affordable, reliable electricity and limits access to 
jobs in the industry, manufacturing and transportation segment.
    This was brought to our attention several times by the 
chairman of the Black Chamber of Commerce, talking about the 
adverse effect on the very poor and the minorities that this 
have. Those individuals who spend a much larger percentage of 
their expendable income to take care of things that they have 
to have, like heating their homes.
    Overall, the costs and the benefits of these regulations 
are minimal at best. The final Clean Power Plan would cost 
hundreds of billions of dollars each year, while only reducing 
CO2 concentrations by 0.2 percent, global 
temperatures by one one-hundredth of a degree Fahrenheit, and 
sea level rise by the thickness of two human hairs. EPA's ozone 
proposal would cost as much as $1.7 trillion over the life of 
the proposal and result in 1.4 million lost jobs.
    Up to 67 percent of the counties, and that is what we are 
talking about, when we are talking about ozone counties, as 
opposed to States, 67 percent of the counties would fail to 
meet the proposed lower standards. That is assuming the raise 
that they are talking about is between 65 and 70, I believe. In 
my State of Oklahoma, all of our counties, all 77 counties, are 
in attainment. If we went down to 65, none of the 77 counties, 
all 77 counties would be out of attainment. So it is a very 
significant thing personally, to me, and the State of Oklahoma.
    Like many of the EPA's recent proposals, the carbon and 
ozone standards would have negligible environmental benefits, 
are based on questionable health benefits and come with 
unequivocal economic costs. Additionally, they are full of 
unreasonable assumptions and projections, including the EPA's 
projection that renewable generation would account for 28 
percent of electricity production by 2030, when the wind and 
solar currently accounts for less than 5 percent. So you see 
this is something that very likely could not happen.
    These regulatory actions are based on a dubious science and 
an accumulation of improper collusion with extremist 
environmental groups and their sue-and-settle tactics. These 
regulations face major legal obstacles and wide-reaching State 
opposition. For ozone, Colorado Democrats Senator Michael 
Bennet and Governor John Hickenlooper have joined Kentucky 
Governor Steve Beshear and others in voicing their concerns 
about impacts on local economies. Thirty-two States, 32 States 
oppose the proposed Clean Power Plan. Opposition is growing 
against the final version. It is very telling when you have a 
Democrat Senator who is generally supportive of the EPA's 
efforts calling the final rule a slap in the face.
    EPA is essentially cutting corners in a shameless attempt 
to promote President Obama's environmental legacy. I am eager 
to hear why this agency is steamrolling ahead and requesting 
billions of taxpayer dollars be spent on proposals that are not 
only rejected by the States, which is happening today, but 
ignore the will of Congress, rely on unreasonable assumptions, 
cost billions and increase the cost of doing business and do 
nothing to impact public health and global warming.
    On that happy note, I will recognize Senator Boxer.
    [The prepared statement of Senator Inhofe follows:]

            Statement of Hon. James M. Inhofe, U.S. Senator 
                       from the State of Oklahoma

    Acting Assistant Administrator McCabe, thank you for taking 
the time to be here. We are here today to talk about two of the 
most expensive and intrusive Federal regulations ever put 
forward in the history of this country: the National Ambient 
Air Quality Standard for Ozone and the recently finalized 
carbon standards for power plants. Your agency is attempting to 
restructure our entire energy system while simultaneously 
controlling economic expansion.
    These regulations would cost hundreds of billions of 
dollars leaving stakeholders with an economic burden that will 
take generations to pay down. These regulations stand to impact 
every industrial sector and would make the price of doing 
business in this country more expensive. These regulations 
would reduce domestic investment and associated jobs, likely 
shipping them overseas to countries like China with less 
stringent environmental standards. And finally, these 
regulations would cause the most harm to low-income and 
minority families as your agency forces a shift away from 
affordable, reliable electricity and limits access to jobs in 
the energy, manufacturing and transportation sectors.
    For all of these costs, the ``benefits'' of these 
regulations are minimal at best. The final Clean Power Plan 
would cost hundreds of billions of dollars each year while only 
reducing CO2 concentrations by 0.2 percent, global 
temperature by1/100th of a degree Fahrenheit and sea level rise 
by the thickness of two human hairs. EPA's ozone proposal would 
cost as much as $1.7 trillion over the life of the proposal and 
result in 1.4 million lost jobs. Up to 67 percent of counties 
would fail to meet the proposed lower standards, which means 
they would face a legacy of EPA regulatory oversight, stiff 
Federal penalties, lost highway dollars, restrictions on 
infrastructure investment, and increased costs to businesses.
    Like many of the EPA's recent proposals, the carbon and 
ozone standards would have negligible environmental benefits, 
are based on questionable health benefits, and come with 
unequivocal economic costs. Additionally, they are full of 
unreasonable assumptions and projections, including the EPA's 
projection that renewable generation would account for 28 
percent of electricity production by 2030 when wind and solar 
currently account for less than 5 percent, which has taken 
decades to achieve and significant Federal subsidization.
    These regulatory actions are based on dubious science and 
are the culmination of improper collusion with extremist 
environmental groups and their sue-and-settle tactics.
    These regulations face major legal obstacles and wide 
reaching State opposition. For ozone, Colorado Democrats 
Senator Michael Bennet and Governor John Hickenlooper have 
joined Kentucky Governor Steve Beshear and others, in voicing 
their concerns about the impacts on local economies. 32 states 
opposed the proposed Clean Power Plan and opposition is growing 
against the final version. It's very telling when you have a 
Democrat Senator who is generally supportive of the EPA's 
efforts calling the final rule a ``slap in the face.'' (Senator 
Heitkamp's response to the final Clean Power Plan).
    EPA is essentially cutting corners in a shameless attempt 
to promote President Obama's environmental legacy. I'm eager to 
hear why this Agency is steamrolling ahead and requesting 
billions of taxpayer dollars be spent on proposals that are not 
only rejected by states, but ignore the will of Congress, rely 
on unreasonable assumptions, cost billions, increase the cost 
of doing business, and do nothing to impact public health or 
global warming.

OPENING STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM THE 
                      STATE OF CALIFORNIA

    Senator Boxer. Thank you so much, Mr. Chairman.
    Thanks for today's hearing, where we are going to example 
two critically important efforts to protect the health of our 
children and our families: a proposed rule to strengthen the 
ozone standards and the final standards to reduce carbon 
pollution from power plants.
    This week, EPA is expected to issue its final rule to 
strengthen the ozone standard. I am hopeful EPA will issue a 
strong standard that will protect American children, children 
like Jackson Woodward, an eighth-grader, 13 years old, from my 
State, Vacaville, California. Jackson, who suffers from asthma, 
wrote an opinion piece in the Sacramento Bee, explaining why a 
stronger ozone standard is important. This is just the way he 
finished his op-ed: ``I would like to continue playing outdoors 
and competing at a national level in track and field and cross-
country. Having cleaner air will help me achieve my goals. I 
don't want to have to keep telling the EPA to clean up our air. 
I just want to be able to breathe.'' It was called A Plea for 
Clean Air, May 9th, 2015. I ask unanimous consent to put that 
into the record.
    Senator Inhofe. Without objection, so ordered.
    [The referenced information follows:]
   
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    Senator Boxer. I just think that we all agree that this 
child who suffers from asthma should be able to live a normal 
life. But from some of our rhetoric here it seems like we are 
putting other interests ahead of the interests of children like 
Jackson. I don't think that is what this committee is for. We 
are not a committee to represent polluters. We are a committee 
to represent families and fight for families.
    Now, the Clean Air Act requires EPA to set the maximum 
level of an air pollutant such as ozone that is safe for us to 
breathe. Setting an appropriate standard is crucial. Everyone 
has a right to know the air they breathe is safe. As I have 
said many times, maybe you have had this happen, I have not had 
one constituent come up and tell me the air is too clean, stop 
cleaning up the air. They don't say that. On the contrary, they 
say, keep on fighting, keep on going. We need clean air, clean 
water, we need safe drinking water and the rest.
    So despite what some of my friends on the other side may 
claim today, scientists agree that EPA needs to adopt a 
stricter standard to protect the health of our people, 
especially our children and the elderly. If we can't do that, 
what good are we? We have known since 2008 the current ozone 
standard does not provide the necessary health safeguards.
    According to a new American Lung Association poll, an 
overwhelming majority of voter, 73 percent across every party 
line in every area of the Country, supports stricter ozone 
standards. So I don't care if one of my colleagues feels 
differently, that is his right. Good for him. But the important 
thing is to listen to the people, not to each other. Listen to 
the people.
    Fifty-two percent of Republicans support strengthening the 
ozone standards. So why don't we start listening to the people?
    In addition to its efforts to strengthen ozone standards, 
the EPA is working to protect the American people from the 
dangers of unchecked climate change. This hearing comes less 
than a week after the Pope called on Congress to ``avert the 
most serious effects of the environmental deterioration caused 
by human activity.'' I hope we will not ignore his call. And 
this rule is a test as to whether we will heed his call.
    The Obama administration's Clean Power Plan will help 
America lead the way to avert the worst impacts of climate 
change, such as sea level rise, dangerous heat waves, economic 
disruption. One critical way we can address it is to reduce the 
dangerous carbon pollution from the biggest source, power 
plants. The Clean Power Plan will reduce pollution from 
existing power plants and EPA's New Source Performance 
Standards will ensure new power plants apply the best available 
technologies moving forward.
    This is a cornerstone of achieving our international 
commitments and the announcement President Obama made last week 
with the president of China shows that U.S. leadership on 
addressing climate change is working. But it won't work if we 
are divided here. The American people again overwhelmingly 
support action. A Stanford University poll from earlier this 
year found that 83 percent of Americans, including 61 percent 
of Republicans, say that climate change will be a problem in 
the future if nothing is done to reduce carbon pollution. And 
74 percent of Americans say the Federal Government should take 
action to combat climate change.
    Our committee is really in a place where we can listen to 
the American people and move forward. The Clean Power Plan will 
save money, because by 2030, the estimates are that American 
families will save $85 a year on their electricity bills. My 
husband and I put a solar rooftop on our home. And we are 
paying about a quarter of what most of the people in the 
neighborhood are paying who haven't done this. It works. I feel 
it in my pocketbook.
    A huge number of Americans commented on that proposed rule. 
And EPA has issued a strong final rule that will reduce carbon 
pollution by 32 percent over the next 15 years.
    So I commend EPA for issuing these first-ever carbon 
pollution standards for power plants. As I often say, if you 
can't breathe, you can't work or go to school. So people who 
say, oh, we are going to hurt the economy, just look at the 
last Clean Air Act. Look at GDP. Look at employment. It is all 
good news story. And I hope we can stop fighting and start 
working together.
    I thank you, Mr. Chairman.[The prepared statement of 
Senator Boxer follows:]

             Statement of Hon. Barbara Boxer, U.S. Senator 
                      from the State of California

    Today's hearing will examine two critically important 
efforts to protect the health of our children and families--a 
proposed rule to strengthen the ozone standard and the final 
standards to reduce carbon pollution from power plants.
    This week, EPA is expected to issue its final rule to 
strengthen the ozone standard. I am hopeful that EPA will issue 
a strong standard that will protect American children like 
Jaxin Woodward, an eighth-grader from Vacaville, California. 
Jaxin, who suffers from asthma, wrote an op-ed in the 
Sacramento Bee explaining why a stronger ozone standard is so 
important:
    ``I would like to continue playing outdoors and competing 
at a national level in track and field and cross country. 
Having cleaner air will help me to achieve my goals. I don't 
want to have to keep telling the EPA to clean up our air. I 
just want to be able to breathe.''
    I think we can all agree with that. I ask unanimous consent 
to place this op-ed in the record.
    The Clean Air Act requires EPA to set the maximum level of 
an air pollutant, such as ozone, that is safe for us to 
breathe. Setting an appropriate standard is crucial to 
protecting the health of millions of Americans. Everyone has a 
right to know that the air they breathe is safe--and science 
tells us we need a stronger standard.
    Despite what some of my Republican colleagues may claim 
today, scientists overwhelmingly agree that EPA needs to adopt 
a stricter standard to protect the health of the American 
people, especially our children and the elderly. We have known 
since 2008 that the current ozone standard does not provide the 
necessary health safeguards.
    According to a new American Lung Association poll, an 
overwhelming majority of voters--73 percent--across party lines 
and from every region of the country support stricter ozone 
standards. The poll found that 52 percent of Republicans 
support strengthening the standards.
    In addition to its efforts to strengthen the ozone 
standard, EPA is also working to protect the American people 
from the dangers of unchecked climate change. This hearing 
comes less than a week after Pope Francis called on Congress 
``to avert the most serious effects of the environmental 
deterioration caused by human activity.'' I hope we will not 
ignore this call.
    The Obama administration's Clean Power Plan will help 
America lead the way to avert the worst impacts of climate 
change--such as sea level rise, dangerous heat waves, and 
economic disruption.
    One critical way we can address climate change is by 
reducing dangerous carbon pollution from the biggest source--
power plants. The Clean Power Plan will reduce pollution from 
existing power plants, and EPA's New Source Performance 
Standards will ensure new power plants apply the best available 
technologies to limit carbon pollution moving forward.
    This is a cornerstone of achieving our international 
commitments to reduce harmful carbon pollution. The 
announcement President Obama made last week with President XI 
of China shows that US leadership on addressing climate change 
is working and that other countries are willing to act.
    The American people overwhelmingly support action. A 
Stanford University poll from earlier this year found that 83 
percent of Americans, including 61 percent of Republicans, say 
that climate change will be a problem in the future if nothing 
is done to reduce carbon pollution. And 74 percent of Americans 
say the Federal Government should take action to combat climate 
change.
    The Clean Power Plan will save consumers money. By 2030, 
the EPA estimates American families will save, on average, $85 
a year on their electricity bills.
    A huge number of Americans--4.3 million--commented on the 
proposed rule for existing power plants, and EPA has issued a 
strong final rule that will reduce carbon pollution by 32 
percent over the next 15 years.
    I commend EPA for issuing these first ever carbon pollution 
standards for power plants, and I look forward to the final 
ozone rule fulfilling EPA's obligation under the Clean Air Act 
to set a standard that will protect public health.
    I often say, if people can't breathe, they can't go to work 
or school. These two rules will cut air pollution--keep kids 
healthy and in school, keep people out of the emergency room 
and save lives.

    Senator Inhofe. Thank you, Senator Boxer.
    Administrator McCabe, you are recognized.

 STATEMENT OF HON. JANET McCABE, ACTING ADMINISTRATOR FOR THE 
   OFFICE OF AIR AND RADIATION, UNITED STATES ENVIRONMENTAL 
                       PROTECTION AGENCY

    Ms. McCabe. Thank you, Senator, thank you, Senator Boxer, 
members of the committee. I am very pleased to be here with you 
this morning.
    On August 3d, President Obama and EPA Administrator Gina 
McCarthy announced the final Clean Power Plan, a historic and 
important step in reducing carbon pollution from power plants 
that takes concrete action to address climate change, as well 
as final standards limiting carbon pollution from new, modified 
and reconstructed power plants, and a proposal for a Federal 
plan and model rules that demonstrate clear options for how 
States can implement the Clean Power Plan in ways that maximize 
flexibility for power plants in achieving their carbon 
pollution obligations.
    Shaped by a process of unprecedented outreach and public 
engagement that is still ongoing, the final Clean Power Plan is 
fair, flexible and designed to strengthen the fast-growing 
trend toward cleaner and lower-pollution American energy. It 
sets strong but achievable standards for power plants and 
reasonable goals for States to meet in cutting the carbon 
pollution that is driving climate change, tailored to their 
specific mix of sources. It also shows the world that the 
United States is committed to leading global efforts to address 
climate change.
    The final Clean Power Plan mirrors the way electricity 
already moves across the grid. It sets standards that are fair 
and consistent across the Country and they are based on what 
States and utilities are already doing to reduce CO2 
from power plants. It gives States and utilities the time and a 
broad range of options they need to adopt strategies that work 
for them.
    These features of the final rule, along with tools like 
interState trading and emissions averaging, means States and 
power plants can achieve the standards while maintaining an 
ample and reliable electricity supply and keeping power 
affordable. When the Clean Power Plan is fully in place in 
2030, carbon pollution from the power sector will be 32 percent 
below 2005 levels. The transition to cleaner methods of 
generating electricity will better protect Americans from other 
harmful pollution, too, meaning we will avoid thousands of 
premature deaths and suffer thousands fewer asthma attacks and 
hospitalizations in 2030 and every year beyond.
    States and utilities told us they needed more time than the 
proposal gave them, and we responded. In the final rule, the 
compliance period does not kick in until 2022, rather than 
2020. The interim reductions are more gradual. States can 
determine their own glide path, and any State can get up to 3 
years to submit a State plan.
    We heard the concerns about reliability. We listened and we 
consulted with the planning and reliability authorities, with 
FERC and with the Department of Energy. The final Clean Power 
Plan reflects this input and it includes several elements to 
assure that the plan requirements will not compromise system 
reliability.
    In addition, to provide an extra incentive for States to 
move forward with planned investments, we are creating a clean 
energy incentive program that will recognize early progress. 
Since issuing the final Clean Power Plan, EPA has continued to 
engage with States, territories, tribes, industry groups, 
community organizations, health and environmental groups, among 
others. To help States and stakeholders understand the plan and 
to further support States' efforts to create plans that suit 
their needs, EPA has developed a variety of tools and 
resources, largely available on our website. We remain 
committed to assisting States with the development and 
implementation of their plans.
    I also want to mention that the agency, as has been noted, 
is in the process of completing another significant air 
pollution rule. Because the air we breathe is so important to 
our overall health and well-being, the Clean Air Act requires 
EPA to review the National Ambient Air Quality Standards every 
5 years to make sure that they continue to protect public 
health with an adequate margin of safety. Based on the law, a 
thorough review of the science, the recommendations of the 
agency's independent scientific advisors and the assessment of 
EPA's scientists and technical experts, in November, 2014, EPA 
proposed to strengthen the ozone standard to within the range 
of 65 to 70 parts per billion to better protect Americans' 
health and welfare. We invited comments on all aspects of the 
proposal, including on alternative levels, and we will issue a 
final rule by October 1st.
    We are convinced by both our analyses and our experiences 
that both the carbon pollution reduction called for under the 
Clean Power Plan and the attainment of the ozone standard will 
extend the trajectory of the last 40 years when we cut air 
pollution 70 percent across this Country while our economy has 
tripled.
    Again, thank you to the committee for inviting me to speak 
on the agency's work to implement our Nation's environmental 
laws to protect public health and the environment. I look 
forward to your questions. Thank you, Senator Inhofe.
    [The prepared statement of Ms. McCabe follows:]
    
    
    
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    Senator Inhofe. Thank you, Madam Director.
    Before we start the clock here, let me make three unanimous 
consent requests to be entered into the record at this time. 
The first is the Harvard poll of Young Americans, aged 18 
through 29, which was just completed. It found that young 
Americans are often unsupportive of government measures to 
prevent climate change that might harm the economy. Less than 
30 percent of young adult Americans agreed with the statement 
in a poll that ``government should do more to curb climate 
change, even at the expense of economic growth.'' Then it 
further quotes the poll, the Harvard University poll, ``Not 
only are the newest voters less convinced of climate change. As 
a reality, they are also less likely to support government 
funding of climate change solutions.''
    The second one that I will ask unanimous consent to be in 
the record, this was a good one. This was Bloomberg, right 
after the visit of the Pope. And is it good, this good or bad 
direction for the church. They go through all these things. For 
example, the greatest thing that they are concerned about is 
suggesting the Catholic Church do more to harness the energy 
and compassion for women, 84 percent of the people believe 
that. But last in line, chastising those who deny the human 
connection to climate change, only 33 percent think that folks 
should be talking about that.
    Last, and this was a good one, Gallup, because Gallup does 
this every year. They had a poll, and I can remember when 
climate change, at that time before they changed the wording 
and put global warming, it was about always in first or second 
place. Now of 15 concerns that people have in the most recent 
Gallup poll, the very last, number 15 is climate change.
    So I ask unanimous consent that these three polls be made a 
part of the record.
    [The referenced information follows:]
    
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    Senator Inhofe. Ms. McCabe, in June we heard from 
Commissioner Mike McKee from Utah about the challenges 
addressing background and transport ozone. This is something 
that has been a concern for a long time. I think one thing we 
can all agree on is, you can't control what comes into your 
State. Maybe what you generate yourself.
    Now, what can a State do to control naturally occurring and 
trans-continental ozone, since your agency has a poor track 
record in gaining the exceptional events and rural transport? 
These exceptions were in the Clean Air Act and the Clean Air 
exemption, which I hasten to say that I was one of the original 
co-sponsors of the 1990 Clean Air Act exemptions. So I have a 
lot of pride in the successes that we have had, huge successes.
    But what can a State do to control these things that fall 
into the category of exempt events and rural transport 
exceptions built into the Clean Air Act? What can they do? Is 
there anything they can do?
    Ms. McCabe. Senator, you are correct, the Clean Air Act 
does not hold States responsible for pollution that is not 
generated from sources within their borders. And you have 
mentioned exceptional events, that is one very clear tool that 
is in the Clean Air Act to make sure that we can work with the 
States to exclude data that is the result of exceptional 
events. In the last few years, we have worked hard with the 
States to improve and streamline the process to be able to get 
those events documented and approved. And we will continue to 
do that.
    Senator Inhofe. So what you are saying is that in the event 
it is something that falls into this category that you are not 
going to have any kind of a punitive action against States who 
are unable to do something that falls into this category, is 
that correct?
    Ms. McCabe. That is correct.
    Senator Inhofe. On the power plant rules, it is a little 
confusing on how we expect the States to submit their initial 
plans by a date certain, and we are talking about September 6th 
of 2016. Yet the formal State implementation deadline is 2018.
    I would ask the question, why are you requiring an initial 
plan to be submitted by 2016 and is there any chance that in 
the event that 2016 comes up and a State is not complying, 
prior to the time that 2018 is here that there is going to be a 
deadline and there could be Federal action against that? Could 
that happen or is that the intent? Why are we having this 
initial 2016 deadline?
    Ms. McCabe. The way the final rule laid it out is that 
plans are due within 1 year. But we recognize that a lot of 
States have processes, not all of them, but many States have 
processes that will take longer than 1 year. So we set it up so 
that States would have the ability to ask for an extension of 
up to 2 years.
    Senator Inhofe. And that could happen, based on their 
ability to do something that would be impossible to comply 
with?
    Ms. McCabe. Sure. So in order to ask for that extension, 
they submit an initial submittal in which they document three 
relative and straightforward things.
    Senator Inhofe. I think that is a good thing to have in the 
record.
    Now, under your watch, EPA has released several air 
regulations to address emissions for power plants. I want to 
read some of these. Four hundred 11 coal-fired power plants 
totaling 101,000 megawatts generation capacity will close by 
the end of 2016 as a result of the rules. Certainly Senator 
Capito is fully aware of that. The Mercury Rule will cause 
55,000 megawatts of power to go offline and another 46,000 
megawatts will close down due to the Clean Power Plan. With 
additional pressure from the new ozone requirements, a third 
set of power plants will close.
    Has the EPA conducted a cumulative impact analysis to 
determine the effect of all these rules cumulatively? We talk 
about that a lot. Have they?
    Ms. McCabe. We do.
    Senator Inhofe. And who did that?
    Ms. McCabe. We do talk about it a lot. Respectfully, 
Senator, I don't accept your recitation of all of these, the 
choices that are made with respect to power plants all being 
the result of EPA's rules. There are many things that go into a 
power plant's decision about whether it is economical to 
continue running that facility. Undoubtedly, environmental 
rules are part of that, but there are many, many other factors.
    Senator Inhofe. So you have not put together a cumulative 
study about the cumulative effect of these rules? An of these 
rules that the EPA is either projecting or has come out with or 
has already completed?
    Ms. McCabe. As part of our rulemaking, we do not do that. 
Although we take account of changes in the energy system and 
the energy mix. In each rule that we do, we keep up to date 
with EIA and FERC and other agencies that oversee the power 
supply.
    Senator Inhofe. Thank you very much. I do think that we are 
going to be talking about the cumulative effect up here, even 
though the EPA may not see that as advisable.
    Senator Boxer.
    Senator Boxer. Thanks, Mr. Chairman. I would like to also 
put two polls into the record. The American Lung Association 
poll, taken 2 weeks ago, showing 73 percent support stronger 
ozone standards; the New York Times Stanford poll, 77 percent 
say the Federal Government should be doing a substantial amount 
to combat climate change. If I may do that, without objection, 
I hope?
    Senator Inhofe. Without objection, so ordered.
    [The referenced information follows:]
    
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    Senator Boxer. Thank you. I appreciate that, because we now 
have dueling polls in the record, and people can decide which 
one is right.
    Senator Inhofe. The one from the American Lung Association.
    Senator Boxer. The American Lung Association.
    Senator Inhofe. Yes.
    Senator Boxer. You like that?
    Senator Inhofe. Oh, I like it very much, yes. But also I 
like the fact that the Gallup poll is recognized as the 
accepted poll, more than a particular group that is looking at 
the one issue.
    Senator Boxer. Public support for the Clean Power Plan, and 
I know my colleague has named several colleagues and said 
several States are unhappy. I have heard and seen tremendous 
support in my State and other places for the Clean Power Plan. 
So Governors, attorneys general, mayors, even utilities, some 
of them support it. So what feedback has EPA gotten from 
stakeholders regarding that final Clean Power Plan?
    Ms. McCabe. Thank you, Senator Boxer. You are absolutely 
right, that there is certainly a range of views. We have been 
spending a lot of time talking with people either in formal 
settings or less formal settings, and a lot of time talking 
with States. I understand that there are a range of views. But 
for the most part, the State officials that we are talking with 
are starting to dig into thinking about how they are going to 
put their plans together.
    Senator Boxer. And isn't one of the reasons that you have 
given them tremendous flexibility, isn't that correct?
    Ms. McCabe. Yes, we have.
    Senator Boxer. Which I admire. Because one size does not 
fit all, is that correct?
    Ms. McCabe. That is correct.
    Senator Boxer. Ms. McCabe, smog pollution has many health 
impacts, particularly for children and the elderly. I read that 
moving op-ed from one of my constituents, 13 years old. Can you 
describe the benefits of reducing smog pollution and the costs 
of not protecting people against smog pollution? Can you give 
me some numbers here on asthma and so on?
    Ms. McCabe. Sure. There are about 23 million people in this 
Country that have asthma, Senator, as I understand it. Six 
million of those are children, one in 12 children across the 
Country has asthma. That is particularly true in certain 
vulnerable populations. Children in Puerto Rico, for example, 
have quite a high rate of asthma.
    Ozone pollution affects the respiratory system. It can 
exacerbate or bring on an asthma attack. It can cause other 
respiratory symptoms, even in healthy adults, especially when 
they are outdoors and exercising.
    When we bring ozone levels down, we reduce asthma attacks, 
we reduce visits to the emergency room, we reduce missed school 
days, we reduce missed work days, we reduce the costs that are 
associated with it.
    Senator Boxer. I am really glad you said that. Because I 
don't think a lot of my friends factor this benefit into their 
thinking, and I am very pleased that you have that 
documentation.
    Ms. McCabe, over the 40-year history, has been enforcing 
the Clean Air Act. I have the list here of the benefits, and I 
am just going to tell you what they are. If these are 
misstated, would you please let me know?
    Over the last 40 years, since that Clean Air Act, our 
national GDP has risen 207 percent. The total benefits of the 
Clean Air Act amount to more than 40 times the cost, 40 times 
the cost of regulation. For every dollar we spend, we get more 
than $40 of benefits in return. That is from a 2010 speech that 
was made about the Clean Air Act. Do you agree with those 
numbers?
    Ms. McCabe. They sound right, Senator Boxer. I can't swear 
to the precise numbers.
    Senator Boxer. OK. I am going to send this to you, and if 
you could respond.
    In 2010 alone, this particular source has said reductions 
in fine particle pollution and ozone pollution achieved by the 
Clean Air Amendments of 1990 avoided more than 160,000 
premature deaths, avoided 130,000 heart attacks, prevented 
millions of cases of respiratory problems, like acute 
bronchitis and asthma attacks, 86,000 hospital admissions, 
prevented 13 million lost work days, avoided 3.2 million lost 
school days due to respiratory illness and other diseases. The 
source was an EPA study, and this was presented by Lisa 
Jackson. So if I send this to you, could you see whether or not 
there has been any difference in that since that speech?
    Ms. McCabe. Absolutely.
    Senator Boxer. Are you planning on doing another look back? 
Because that was 2010. I think it is time we take a look ahead. 
When are you going to do that? Do you know?
    Ms. McCabe. I don't have a specific plan for that, Senator.
    Senator Boxer. Well, I hope you will consider it. I will 
close with this.
    Ms. McCabe.
    [Remarks off microphone.]
    Senator Boxer. The benefits are not thought about, really. 
And if you have a kid who is able to play sports and you don't 
have to drag him or her to the emergency room, et cetera, that 
is a moral benefit and a financial benefit. My view is that is 
EPA's job and it is our job here. That is why I keep stressing 
the health benefits, because I think they are overlooked. Thank 
you.
    Senator Inhofe. Thank you, Senator Boxer. Senator Wicker?
    Senator Wicker. Thank you very much.
    I have a unanimous consent request, too, before we begin 
the questioning. The Center for Regulatory Solutions has issued 
a paper by Karen Kerrigan, Five Things You Should Know Before 
the Senate EPA Hearing on EPA's Ozone Proposal.
    One of the things that the author mentions is about this 
Lung Association poll. They went back and recast the poll and 
asked an additional question about costs. Once costs were 
factored in, support for the EPA ozone proposal plunged. When 
asked if they would be willing to spend $100 per year, roughly 
half of the support vanished. And when informed that the study 
actually estimated that stricter ozone standards would cost 
$830 per year, a majority of voters opposed the EPA's plan 
outright.
    Also, I would point out that a number of experts have 
weighed in that the additional proposed drop in ozone standards 
does not have any effect on asthma, as has been alleged here. 
Roger McClellan, past chair of the EPA Clean Air Scientific 
Advisory Committee, wrote this: ``The EPA and the environmental 
lobby claim a stricter ozone standard is needed to reduce 
asthma cases. But these claims rely on a much higher ozone 
level from decades ago which we don't experience any more. 
Recent history does not support this claim connection. In fact, 
for well over a decade, asthma cases have increased by 
millions, while ozone concentrations have declined.''
    So Mr. Chairman, I ask for unanimous consent to insert this 
paper into the record also.
    Senator Inhofe. Without objection, so ordered.
    [The referenced information follows:]
    
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    Senator Wicker. Ms. McCabe, you indicated an unprecedented 
outreach effort was made to the stakeholders. I can tell you 
that folks at the Mississippi Department of Environmental 
Quality didn't notice this unprecedented outreach. They say 
there were a couple of internet-based seminars, there were some 
rarely held discussions concerning State-specific information. 
And they complain that you used regional data to impose 
requirements on the States, and did not equip them with 
actually the tools to do this.
    So let me ask you, what do you say, can you give me 
specific examples of how EPA worked with States? Because my 
State director says you didn't. Also, why did you use the 
larger geographic regional data rather than State-specific 
data? Because the requirement is going to be placed on the 
States, not on some regional government.
    Ms. McCabe. Senator, thank you for the question. I am very 
sorry to hear the reports from your DEQ, because it is really 
hard for me to imagine how any State can say that we did not 
make every opportunity available to work with them. I 
personally have been involved in dozens and dozens of 
conversations and meetings with State officials. And we have 
invited, any State that wanted to spend time with us has been 
afforded that time. So it is distressing that it would be 
reported that way.
    In your second point, let me make clear that in the Clean 
Power Plan, we use both regional and State-specific data to 
develop the final goals for the States. We looked broadly at 
the regions across the Country, especially the three 
interconnects, because that is the way the power system 
operates, that is the grid on which the utilities operate. 
Resources, as we know, our electricity resources are not 
confined within State borders. They flow across and among and 
between States.
    So in looking to see what opportunities were available to 
utilities to manage their assets, and indeed, many utilities 
operate in many States, that is the way it made sense to look 
at that data, because that is the way the system works.
    When we got to developing each State's specific target 
under the Clean Power Plan, that is when we took each State's 
specific mix of sources into account and applied our nationally 
consistent emission rates for coal and gas plants to each 
State's particular mix of sources to get a tailored target for 
each State.
    Senator Wicker. Well, let me just say, my 5 minutes is 
expired. This is so complicated that it really doesn't lend 
itself to a series of 5-minute question and answer periods. I 
am going to submit several questions for the record to you, 
outlining the objections of these people with a clean air 
agenda in the State of Mississippi, who feel basically you have 
given them something that cannot work for our State.
    Also, I have questions about one specific power association 
in Mississippi that simply would have to double, double its 
budget to comply with the solar powered requirements that are 
being put on them. I will submit questions for the record. I 
think we have a regulation coming at States and consumers that 
is going to absolutely explode the cost of power and be 
unachievable for people who are trying to work with your agency 
to do the right thing.
    Senator Inhofe. Thank you, Senator Wicker. Senator Carper.
    Senator Carper. Thanks, Mr. Chairman.
    Mr. Chairman, I would like to ask unanimous consent that an 
opening statement be submitted by the record by me.
    Senator Inhofe. Without objection, so ordered.
    [The prepared statement of Senator Carper was not received 
at time of print.]
    Senator Carper. Thanks so much.
    I am going to ask a favor, Ms. McCabe. Welcome, you have a 
tough job. We appreciate your willingness to take it on. I am 
going to ask as a favor if you would submit to Senator Wicker 
just an overview of the kind of outreach that the EPA has done 
to the folks in Mississippi. I think that would be interesting 
and enlightening and appropriate. If you would do that, that 
would be great.
    Ms. McCabe. I would be happy to do that.
    Senator Carper. I think we all want a couple of things. We 
want cleaner air. We want to have a stronger economy. And we 
wanted to involve the States and frankly, the business 
community, utilities in this, in an appropriate, thoughtful 
way. The other thing I would add is I think most of us want to 
do this in a way that where we treat our neighbors the way we 
would want to be treated. That is especially important for 
Delaware and some others who live around us on the east coast.
    Let me start with a review of the basics of the ozone 
rules. I understand that in laymen's terms, this rule is all 
about using the latest science to determine what levels of 
ozone in the air makes us sick. Is that correct, yes or no?
    Ms. McCabe. That is correct.
    Senator Carper. All right. Over the years, as science has 
advanced, we have learned more and more about the human body, 
leading us to understand that lower levels of ozone in our air 
make us sicker than we once thought. Is that correct, yes or 
no?
    Ms. McCabe. That is correct, Senator.
    Senator Carper. The EPA only lowers the ozone health 
standard if the agency determines that the current standard is 
not protecting public health based on the best science 
available, is that correct, yes or no?
    Ms. McCabe. That is correct, Senator.
    Senator Carper. And once a new standard is in place, the 
EPA allows, as I understand, each State to find the most 
economical way to meet the new standard, is that correct, yes 
or no?
    Ms. McCabe. That is correct.
    Senator Carper. In the past years, EPA has tightened the 
ozone standard from time to time, and our economy has continued 
to grow, is that correct, yes or no?
    Ms. McCabe. That is correct.
    Senator Carper. And finally, it is my understanding that if 
EPA picks a standard at the top of the range proposed, that is 
70 parts per billion, there are only an estimated nine counties 
in the Country, outside of California, that will be in non-
attainment by 2025. I am going to say that again. My 
understanding is if EPA picks a standard near the top end of 
the range, 70 parts per billion, there would be only an 
estimated nine counties in the Country outside of California 
that will be in non-attainment by 2025. Is that correct, yes or 
no?
    Ms. McCabe. That is what our modeling shows, Senator, that 
is correct.
    Senator Carper. All right. I would say to my colleagues, do 
you all know how many counties there are in America? I didn't 
know. I asked my staff to find it out. There are over 3,000. In 
fact, there are over 3,100 counties in America. And what the 
science would say to us, if a standard is picked, 70 parts per 
billion, by 2025, there are going to be nine counties out of 
3,000 across America that are going to be in non-attainment. 
Nine counties out of 3,000. Think about that. Doesn't seem like 
a whole lot to me.
    We only have three counties in Delaware. And when I was 
Governor, we were in non-attainment. Not because of our 
pollution but because of pollution by States to the west of us. 
I could have shut down the State of Delaware. I could have shut 
our economy down when I was Governor. We would still be in non-
attainment, because 90 percent of our air pollution came from 
other places.
    And we had to breathe it. We are at the end of America's 
tailpipe, us, Maryland, New York and New Jersey, Pennsylvania. 
It is not fair. Talk about the Golden Rule, treat other people 
the way you wanted to be treated, that is not the way we ought 
to treat anybody, including folks in our part of the Country.
    In my opening remarks, which I have entered for the record, 
I talked about how an estimated 90 percent of our pollution 
comes from out of State. Can you just take a minute or two, Ms. 
McCabe, and talk to us about how ozone pollution can travel 
across State boundaries and impact the air quality of places 
like my home, the first State, of Delaware, and our national 
parks that may have few or any emitters of ozone?
    Ms. McCabe. Yes, Senator, that is certainly true. We have 
seen that over the years. Air pollution doesn't stop at State 
borders. And the northeast corridor, as you have alluded to, is 
a classic area where downwind States receive pollution from 
upwind States.
    The Clean Air Act has a good neighbor provision in it to 
make sure that upwind States take steps to reduce the pollution 
that they are sending downwind that are causing or contributing 
to air pollution violations and poorer health downwind.
    Senator Carper. Can you take just a second and talk to us 
about the impact of international ozone pollution and whether 
it should impact the decisionmaking on the ozone health 
standard, please?
    Ms. McCabe. The ozone health standard is exactly as you 
described it, Senator. It is an information and message to the 
American people what level of ozone is safe for public health 
in this Country. That is a separate issue from the steps that 
everybody needs to take in order to get us there.
    And to the extent that there is internationally transported 
air pollution, the United States is involved in research and 
activities with other countries to try to make sure that those 
countries cleanup their air as well. But there is much that we 
contribute to our own poor air quality in this Country, and 
steps that we can take in a cost-effective and reasonable way 
over time to bring those levels down and improve public health.
    Senator Carper. All right, thanks so much. Thanks, Mr. 
Chairman.
    Senator Inhofe. Thanks, Senator Carper. Senator Fischer?
    Senator Fischer. Thank you, Mr. Chairman, and thank you, 
Ms. McCabe, for being here today.
    Under the final Clean Power Plan rule, Nebraska faces a 40 
percent reduction in its carbon emissions rate. That is a 
significant increase from the proposal that we saw where it was 
26 percent reduction. So now Nebraska is categorized as one of 
the top biggest losers under this rule.
    You know we are the only 100 percent public power State in 
this Country. So when I say that Nebraska is one of the ten 
biggest losers, what I really am saying is that the citizens of 
Nebraska are ranked among the ten biggest losers under this 
rule. It is not some big corporation out there. It is not some 
big company out there. It is the citizens of Nebraska who are 
going to pay for this. As a result, within hours after the 
final rule's release, our AG in the State said that the 
overreach of the Federal Government will have serious 
consequences by driving up electrical costs for Nebraskans all 
across the State.
    There seems to be an underlying theme of uncertainty and 
confusion among my State officials and the local stakeholders 
as well regarding this rule. Senator Wicker alluded to that in 
Mississippi. We face that in Nebraska. Providing consumers with 
affordable and reliable energy requires long-term investment 
plans.
    But the EPA has indicated it could be 3 months between when 
the rule was released in early August to when it appears in the 
Federal Register. Our director of the energy department in 
Nebraska feels that this really is unacceptable. If it is the 
same rule that has been released in August, what is taking so 
long to publish it in the Federal Register? I share that 
frustration.
    Can you shed some light on why it is taking us so long to 
get that published?
    Ms. McCabe. Yes, thank you, Senator. Before I do, I will 
respond to the earlier question about Mississippi. But my staff 
reminded me that we held two specific calls with the State of 
Mississippi----
    Senator Fischer. Don't use my time for Mississippi.
    Ms. McCabe. OK. My apologies. In terms of getting a rule to 
the Federal Register, there is a standard set of steps that 
happens. The rule was signed on August 3d. We submitted it to 
the Federal Register on September 4th. That is actually quicker 
than a number of other major rules from EPA. And we put every 
effort into getting that submitted just as quickly as possible.
    Senator Fischer. And the language will be the same?
    Ms. McCabe. There is a process of doing corrections like 
grammar and typos and that sort of thing, but yes. The 
substance of the rule is the same.
    We then work with the Federal Register office as they get 
the materials ready to publish and we have been doing that back 
and forth in a very routine but from our perspective 
expeditious manner.
    Senator Fischer. According to Nebraska Public Power 
District, which services 86 of our 93 counties in the State, 
the EPA failed to show an emission limitation which is 
achievable or adequately demonstrated in the State of Nebraska. 
NPPD also stated that achieving a 6 percent efficiency rate for 
existing coal plants is virtually impossible and it lacks the 
transportation capacity to run its gas-fired generators at 70 
percent statewide as mandated by that rule.
    Can you describe some of the calculations that were used 
when you set Nebraska's target reduction, particularly in 
relation to efficiency and utilization?
    Ms. McCabe. First I want to make clear that there are 
absolutely no mandates in the rule. There is no requirement 
that any utility do anything specific, nor any State, other 
than meet an overall target.
    Ms. Fischer. Nebraska is now 40 percent reduction.
    Ms. McCabe. Every State has an emission reduction target, 
Senator. Every State has a goal that in 2030 is lower than the 
historical emissions in 2012. Those rates vary depending on the 
mix of sources in those States. The way the final rule works is 
that every coal plant across the Country has the identical 
emission rate. This is the way the New Source Performance 
Standards are traditionally set. And every gas plant has the 
same rate.
    But within the flexibility allowed under Section 111(d), 
and within the flexibility that the interState grid allows, 
utilities will be able to trade and average and use resources 
that they have access to in order to achieve those reductions.
    Senator Fischer. You say there is no mandate. Doesn't the 
Clean Power Plan call for increasing Nebraska's renewable 
generation from 4 percent to 11 percent by 2030?
    Ms. McCabe. There are projections that we use in part based 
on information that we get from other agencies that study these 
things that make projections about increases in renewable 
energy across the Country. But there is no specific requirement 
that any specific State or utility use a specific percentage of 
renewable energy.
    Senator Fischer. So in our States, specifically in 
Nebraska, we can continue to build our own balanced portfolio 
with renewables at the pace that the people of the State 
choose? It doesn't have to be increased from 4 percent to 11 
percent?
    Ms. McCabe. We believe that States will be able to design 
plans, working with their utilities, to achieve that 2030 goal 
and the interim goals in ways that accommodate the kind of 
planning that they want to do.
    Senator Fischer. But the goal itself of 11 percent is 
mandated by the EPA, is that correct?
    Ms. McCabe. There is no goal of 11 percent renewables for 
the State of Nebraska.
    Senator Fischer. I see my time is up. I have some questions 
on ozone which I would like to submit to you for the record. 
Because we did have a hearing in Nebraska on that.
    Again, I have some concerns about very sparsely populated 
counties in my State that will be affected. When we look at the 
Ranking Member's State of California, I understand her concerns 
there because of the non-attainment and the exclusion and 
waivers that are provided to California over, I believe it is a 
20-year period. Because those standards cannot be met. Yet we 
have very sparsely populated counties in Nebraska with less 
than one person per mile where we are going to have to be 
meeting those. So we will submit those for the record.
    Thank you, Mr. Chair.
    Senator Inhofe. Thank you, Senator Fischer. Senator Markey?
    Senator Markey. Thank you, Mr. Chairman, very much.
    The Clean Air Act is one of the most effective public 
health laws in American history. The original 1963 version 
initiated by President Kennedy and signed into law by President 
Johnson empowered the United States Public Health Service to 
address air pollution, 6 years before the creation of the EPA.
    The Clean Air Act's success comes from its requirement to 
use science to protect public health and welfare. The Clean 
Power Plan and the new ozone standard are both cases of the EPA 
acting to protect public health and welfare from proven 
hazards.
    The scientific community has shown the connection between 
ozone and respiratory health problems for decades, and has 
called for an ozone standard of 60 parts per billion since 
2006. Ground level ozone and smog threaten the health of kids 
and other cardiovascular-compromised people. It even has 
negative impacts on healthy adults and agriculture and 
wildlife. Each time science advisory boards have been asked to 
review the latest research on ozone, they find a growing body 
of evidence of its health hazards.
    Then we have the Clean Power plan, first big step toward 
reducing U.S. carbon pollution. The plan will help protect the 
public from the health impacts of climate change and other 
pollutants like sulfur dioxide and nitrogen oxides that will 
also be reduced as a result.
    Earlier this summer, the U.K.'s top medical journal, the 
Lancet, published a major health study that identified climate 
change as the most significant global health threat of the 21st 
century and offered up a number of prescriptions of ways to 
reduce carbon pollution and shift to cleaner sources of energy. 
The Clean Power Plan is one way that we can follow the doctor's 
orders. The science is clear about the ozone and it is clear 
about carbon pollution. These crucial Clean Air Act measures we 
are discussing today will promote health and stimulate our 
economy.
    Before the 2008 ozone standard was finalized, we heard that 
the standard would cripple the economy. But this was just not 
true in Massachusetts. Both air quality and GDP increased, even 
as the ozone standard tightened. I am expecting that this trend 
will continue in Massachusetts as we work to meet the new ozone 
standard.
    Do you believe that other States will also experience 
economic growth while solving their pollution problems?
    Ms. McCabe. Senator, we have seen nothing to suggest that 
improving air quality doesn't improve the economy as it 
improves public health.
    Senator Markey. I look forward to the long-awaited ozone 
standard that will improve life and productivity of families 
impacted by respiratory health problems. I am concerned, 
however, that the standard will stop short of providing the 
required productions. A 70 parts per billion standard would 
still lead to hundreds of thousands of asthma attacks and 
thousands of preventable deaths each year.
    Once the ozone rule is finalized, do you believe that an 
adequate margin of safety which is required by the Clean Air 
Act will be achieved?
    Ms. McCabe. That is our job, Senator, to recommend and for 
the Administrator to make a decision that protects the public 
health with an adequate margin of safety. I don't believe she 
would sign a rule if she didn't feel that is what she was 
signing.
    Senator Markey. Many studies have shown that low-income 
individuals have the least ability to protect themselves from 
the effects of climate change, including air quality, sea level 
rise, flooding, water scarcity, food prices and changing 
economies. The Clean Air Plan does include programs for low-
income families. Do you think the plan will have a net benefit 
for those poor families?
    Ms. McCabe. We think both the Clean Power Plan and the 
ozone standard are particularly important to protect 
vulnerable, low-income and other populations that are 
particularly affected by these issues.
    Senator Markey. And does the history of the Clean Air Act 
environmental regulation show that it does lead to innovation, 
that new emissions technologies emerge that solve the problem 
at a much less expensive cost that had been anticipated, even 
by the experts?
    Ms. McCabe. That is absolutely true, Senator.
    Senator Markey. So we have seen that in the automotive 
sector, we have seen it in other sectors and I think it is 
highly likely to continue in this sector as well. And to those 
who wonder whether or not a goal which is not established for 
Nebraska or any other State might be met, let's just look at 
the facts. Just in America in 2015 and 2016, we are going to 
double the total amount of solar. It is going from 20,000 to 
40,000 total installed solar capacity. And why is that? It is 
because the price is collapsing.
    The same thing is true on the wind side. We are adding 
28,000 new megawatts of wind just in this 2-year period. And 
between wind and solar, by the end of 2016, we are going to 
have 133,000 megawatts of wind and solar installed in the 
United States, largely because of the advance in the technology 
and the collapse in price.
    So I think people should be optimistic that each of the 
States, with the great flexibility you are providing, will be 
able to meet the standard.
    Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Markey. Senator Capito?
    Senator Capito. Thank you, Mr. Chairman, and thank you, 
Administrator McCabe, for coming. I understand you were in West 
Virginia yesterday.
    Ms. McCabe. I was.
    Senator Capito. At the Greenbrier. So I know you found it 
great.
    Ms. McCabe. It is absolutely beautiful there, Senator.
    Senator Capito. Thank you. We have had a lot of talk about 
costs and benefits. I noticed the gentleman's comments earlier 
when he talked about the cost. He didn't talk about the costs 
to the lower and middle income of the price of energy. 
According to studies under this plan, in our State of West 
Virginia, the cost of energy will rise somewhere between 17 and 
22 percent. Right now, we have 430,000 low and middle income 
people in the State of West Virginia whose pay, take-home pay 
is $1,900 a month, they spend 17 percent of their take-home 
money to pay for their energy. When this goes up, say, 20 
percent, this is going to have a cost to them, a human cost to 
them.
    What kind of transparency has EPA brought forward to folks 
who live in areas like my areas that will be deeply affect? 
What kind of transparency have you actually stated is going to 
result in the rise in their energy costs on a daily basis?
    Ms. McCabe. Well, Senator, of course there are a lot of 
numbers out there that people are citing.
    Senator Capito. I am asking for EPA numbers.
    Ms. McCabe. I know, but the numbers that you cited are not 
EPA numbers. I don't know where they come from.
    Senator Capito. Right. That is why I am asking you.
    Ms. McCabe. We did an analysis as we do for every major 
rule where we looked at expected impacts on both the price of 
energy and on bills. Because what matters is how much you write 
that check for every month. And our analysis is all laid out in 
our regulatory impact analysis.
    Senator Capito. What did you find? Just generally.
    Ms. McCabe. We found that by 2030, the average cost of a 
person's electric bill would go down by about 7 percent, and 
that is as a result of increased energy efficiency that we see 
coming into the system. So even though electricity prices might 
go up a little bit, bills will actually go down. That is what 
our analysis shows.
    Senator Capito. This study is from NERA, respected 
consultant and analysis firm. I am sure you are familiar with 
them.
    Ms. McCabe. Yes.
    Senator Capito. And I would take exception to if it goes up 
a little bit, 20 percent, when you are bringing home $1,900, is 
a significant amount.
    My next question is, on your first rule, from the time of 
the first rule to the second rule, 22 States saw an increase, 
some a major increase. West Virginia went from 20 percent 
reduction to 37 percent reduction. Why was that decision made 
to make it the hardest hit of those regions that are the energy 
exporters, such as West Virginia, Wyoming, Kentucky, North 
Dakota?
    Ms. McCabe. So this is all laid out in our discussion, 
Senator. It is all based on the data that we had and that we 
received during the public comment period and on the design of 
the rule, which follows the way the Clean Air Act tell us to do 
these rules, which is to set expectations on industry that are 
uniform across the Country.
    So all the information that we had showed the different 
things that utilities were doing to reduce carbon. And so we 
set an expected emission rate for coal plants across the 
Country.
    Senator Capito. Yes, which no coal plant in my State meets 
that target. Not one.
    Ms. McCabe. But they are not required to meet them 
tomorrow. They are required to meet them overall, over the 
whole system, and by 2030. Using the types of approaches that 
many States are already using and utilities are already using, 
that are bringing those CO2 emissions down, we feel 
confident that every State will be able to achieve that.
    Senator Capito. Let me ask you this. If the State 
implementation plan is not put forward you said they get a 2-
year extension. What happens in 2016 if they put forward their 
idea of a State implementation plan? Is there an implementation 
of a Federal implementation plan after 2018 if the State 
doesn't submit?
    Ms. McCabe. What the Clean Air Act says is that if a State 
doesn't put forward a plan under 111(d), then EPA should step 
in and do a Federal plan.
    Senator Capito. So that would be in 2018 or 2016?
    Ms. McCabe. It would be when a State fails to meet a 
requirement under the rule.
    Senator Capito. So if you don't submit a State plan in 
2016, are you subjected to the Federal implementation plan?
    Ms. McCabe. If a State submits this initial plan that the 
rule asks for and a request for a 2-year extension, that is 
complying with what the rule requires.
    Senator Capito. I know you are well aware that there are 
many States that are considering, many Governors are 
considering not even submitting a State implementation plan at 
all. So are you saying then if they don't submit any kind of 
implementation plan in 2016, they would be subject to the 
Federal implementation plan?
    Ms. McCabe. Following the requirements of the Clean Air 
Act?
    Senator Capito. Yes.
    Ms. McCabe. If a State doesn't submit a plan as required, 
that would trigger the obligation for EPA to do a Federal plan.
    Senator Capito. One last question on the ozone rule. We 
talk about non-attainment. I am happy to report we are in 
attainment in the State of West Virginia. But we are very 
rural, as the gentlelady from Nebraska was talking about. So if 
we reach a point where we are not in attainment, we have no 
offsets to really offer to get ourselves into attainment, where 
maybe a more congested area or a larger metropolitan area, 
larger manufacturing area would have some offsets to offer.
    Is this something you are considering, how to help rural 
areas meet these standards when they are fully implemented?
    Ms. McCabe. Congress actually thought about this, and they 
included something called the Rural Transport Area in the Clean 
Air Act for areas that truly are rural and where the emissions 
creating the high ozone are not from within their county, they 
can be designated a Rural Transport Area. That greatly reduces 
the expectations on that area.
    Senator Capito. So of the nine counties which are not in 
compliance, or let's say, of the other counties that are in 
compliance, not the nine that Senator Carper was talking about, 
are they considered, some of them, Rural Transport Areas?
    Ms. McCabe. We don't actually, I believe, have any areas 
that are so designated now. I actually don't think that we 
would be looking at extremely rural areas in West Virginia 
under a future ozone standard that is in this range. But the 
nine counties that are mentioned, we don't currently have any 
Rural Transport Areas, but that tool would be available in the 
event that a county that meets those criteria had ozone levels 
higher than whatever the standard is.
    Senator Capito. OK, so just so I understand, is the reason 
that designation is not used is because all of rural America is 
meeting the ozone standard that is set right now? Is that the 
reason?
    Ms. McCabe. There are no counties, most rural counties meet 
the ozone standard. Let me put it that way. Most rural counties 
meet the ozone standard. And for any that could be considered 
rural, depending on how you identify that, if they are part of 
an ozone non-attainment area, it is because it makes sense for 
them to be part of that, that there are emissions that are 
contributing to local air quality.
    Senator Capito. OK, I think I get that. Thank you.
    Senator Inhofe. Thank you, Senator Capito. Senator Merkley?
    Senator Merkley. Thank you, Mr. Chair.
    Thank you for your testimony. The report yesterday, the 
news report was that based on the commitments that nations are 
making the Paris conference in December? The temperature of the 
planet would still increase by more than 6 degrees Fahrenheit, 
so essentially above the target that has been around, the 3.6 
degrees Fahrenheit or 2 degrees Celsius target. Is it the 
opinion of the U.S. Government that 6 degrees would be 
catastrophic?
    Ms. McCabe. I think that there is a lot of concern about 
temperature rise at those levels, Senator.
    Senator Merkley. And much of the conversation has been 
about avoiding that, one has to control both carbon dioxide as 
an air pollutant and methane as an air pollutant. I applaud the 
Administration for trying to control fugitive methane as a 
byproduct of drilling for natural gas.
    But essentially, the conversation has been, if you are 
going to reduce enough, you have to leave a lot of the 
identified fossil fuel reserves that have been identified in 
the world in the ground, leave it in the ground, roughly an 
estimate of 80 percent of those. Does the Administration share 
that perspective?
    Ms. McCabe. I am not familiar enough with that kind of 
calculation, Senator, to confirm that or not.
    Senator Merkley. Well, I say that as a framework because 
essentially the Clean Power Plan is a subset of our Nation's 
efforts to control carbon dioxide, because of this broader 
framework of planetary stewardship, which is so important.
    Yesterday Shell announced that they were discontinuing 
their plans for drilling in the Arctic. I would like to thank 
all those who advocated that drilling the Arctic makes little 
sense. Is there a possibility that the United States will use 
its chairmanship of the Arctic Council now to encourage the 
Arctic Council nations to leave the Arctic off limits?
    Ms. McCabe. Senator, I really can't speak to the position 
on the Arctic Council. But I would be happy to take that 
question back and get you a response on it.
    Senator Merkley. I would like to encourage the 
Administration to do that. There is a window of opportunity 
here that is important as part of this worldwide perspective, 
leave it in the ground. You can do all you want in terms of the 
Clean Power Plan. But if one is opening up additional fossil 
fuel reserves to being exploited and burned, it is 
counterproductive and the pieces don't fit together.
    One of the conversations has been that the United States 
shouldn't necessarily act if it is acting alone. Are we seeing 
more engagement by other nations around the world coming to the 
table?
    Ms. McCabe. Yes, we are. In fact, when the Clean Power Plan 
was proposed, it was the talk of the circles internationally. 
There was a lot of attention on the U.S. stepping forward and 
putting some concrete action on the table that we think has 
been very, very helpful in those international discussions.
    Senator Merkley. I was noting that a lot of times people 
say, well, China is not doing anything. But China has committed 
to deploying as much renewable energy in the next 15 years 
equal to all the electricity generated by the United States 
currently, which is sizable. I was struck by the numbers. Their 
goal is to go from 33 gigawatts of solar this year to 70 
gigawatts 2 years from now, and to go from about a little over 
100 gigawatts of wind energy now to 150 gigawatts 2 years from 
now. Does this exceed the rate of expansion of the solar and 
wind that is occurring in the United States?
    Ms. McCabe. Gosh, I am not sure. But it is significant 
growth, and very welcome to see the Chinese commit to this.
    Senator Merkley. They have also announced that they are 
launching a cap and trade system nationally in 2017. 
Specifically, they had proceeded to do seven pilot projects in 
cap and trade, sub-national regional projects. And they are 
taking experience from that, the last of those was launched in 
2014. So they have seven projects on which to draw information 
to launch this national cap and trade system.
    So they are planning to use markets the same way we used 
markets to control sulfur dioxide successfully. Are there any 
insights in this for the United States?
    Ms. McCabe. That is a very welcome announcement from them. 
They have been looking at this and come forward with this plan 
and we are very encouraged by it.
    Senator Merkley. It has been commented now that every major 
carbon producer has put forward a plan except for India. India 
announced that it is going to submit a plan on October 1st 
emphasizing renewables. Do you have any advance information you 
would like to share with us about what India is going to 
announce?
    Ms. McCabe. I don't, actually.
    Senator Merkley. OK. Well, we will look forward to that. I 
think it is impressive how many nations have now under this 
voluntary framework, we had this shift from trying to go from 
an international treaty in which there were mandatory 
reductions to asking each nation to put their best foot 
forward. It seems like nation after nation is saying that yes, 
as part of the global community, we have to take on a 
significant role in global stewardship.
    Ms. McCabe. It is very encouraging, and I think you are 
right, that there is that sense that people are taking 
responsibility for this and realizing that we have to take 
responsibility.
    Senator Merkley. It is in that context that the U.S. should 
not only do its part but be a leader in the stewardship of the 
planet and basically saving us from ourselves. Thank you so 
much for your role in that.
    Ms. McCabe. Thank you, Senator.
    Senator Inhofe. I am going to make an observation, of 
course, I would welcome Senator Boxer to make one too, in 
fairness. Right now there is a hearing going on that we are 
missing in the Armed Services Committee. The whole hearing is 
about how China, what they are doing to us in cybersecurity, 
how they haven't kept their word on any of this stuff, and now 
we are lauding the virtues of China, who is making all these 
commitments on what they are going to do. It is kind of 
interesting. What do you think, Senator Boxer?
    Senator Boxer. Well, I don't trust China. On the other 
hand, that is not my statement. On the other hand, the people 
on your side of the aisle have said, do nothing until China 
pledges to do something. And China pledges to do something and 
you are the same old Johnny One Note here.
    So the bottom line is, I don't trust China and I don't 
trust them with the safety of the world and the planet. 
Therefore it is imperative that regardless of what China says 
or does that America, as the Pope said, not walk away from our 
responsibility. I am frankly shocked that the other side of the 
aisle thinks that we should give up our leadership until China 
and India step up. That has been your call.
    So now they say they are going to step up and now you say, 
well, we can believe them. Whether they step up or not, it's 
God's planet, we have to protect it. I am tired of ducking 
behind the skirts of China. Let's step out and show what 
America is made of, which is true grit and the can-do attitude.
    I just want to close with saying this. My State, which has 
taken the lead, is going gangbusters here. We are doing 
absolutely great. And I am very excited about it. I think if 
you cling to the dirty old energies of the past, you are domed 
in this world. Because the people are not going to support 
dirty energy when they see what it is doing to the planet, to 
their lungs, to their families, to the economy.
    I wish that we could get out from under China's skirts. I 
am glad they said what they did. I don't trust them. I would 
rather they said they were going to do something. They said 
they were going to build a high-speed rail and they did it. So 
maybe they will do it.
    But whether they do it or not, America should lead.
    Senator Inhofe. OK, we should all trust China.
    Senator Boxer. Don't change my words. I said don't trust 
them. Regardless of whether they are going to do this, we 
should take the lead. It is our moral responsibility.
    Senator Inhofe. Senator Merkley?
    Senator Merkley. Thank you, Mr. Chairman. The point has 
often been made here in this room that the U.S. acting alone 
will not have an impact or save us from global warming gases 
and global warming that results from that. This isn't about 
trusting any one particular nation, but it is about observing 
that nations are making, other nations are making substantial 
commitments. It isn't just into the future, we can see what has 
happened the last few years. China has had a dramatic increase 
in its renewable energy in the past few years. So it is on this 
trajectory that it has currently laid out.
    They also have enormous internal motivation to continue, 
because of the tremendous air pollution in that Country. They 
are worried about the citizens rebelling against the government 
because of that air pollution. It is a national security issue 
for them and an internal security issue as well.
    So not only is it becoming very economical in wind and 
solar as compared to fossil, but there is also a huge stability 
issue that is driving the government's motivation.
    Senator Inhofe. Thank you, Senator Merkley. I will know 
better next time.
    [Laughter.]
    Senator Inhofe. Senator Sullivan?
    Senator Sullivan. Thank you, Mr. Chairman. I just feel a 
little bit compelled, I wasn't going to mention anything, but 
since Senator Merkley brought it up, there are a lot of 
Senators who don't think that was a good day yesterday in 
Alaska with what Shell decided to do. I think our regulatory 
system is largely to blame. Seven years, $7 billion to try to 
drill one well in America. The EPA certainly shares some of the 
blame. We are going to undermine our energy security, certainly 
undermine jobs that people need in this Country.
    But one issue that doesn't come up, we are going to 
undermine the environmental protection in the Arctic. What are 
we doing? We are driving investment to Russia, to China, to 
countries that don't have high standards like we do. SO I think 
when we are celebrating this, we need to actually have a better 
understanding of the environment. I certainly will oppose any 
maneuver by the Arctic Council to try to limit responsible 
resource development in the Arctic.
    Administrator McCabe, I want to talk, Senator Carper 
mentioned the importance of clean air, a strong economy, I 
agree with that. But I also think we should all be very 
concerned about making sure your agency follows the directions 
of Congress, follows the rule of law. Do you think that any 
statutory, or any action that you take from a regulatory 
standpoint has to be based in statute?
    Ms. McCabe. Our regulatory actions are based in our 
statutory authorities, Senator.
    Senator Sullivan. Good. I am glad you think that.
    In terms of the Clean Air Act, you have actually lost a 
couple of pretty important Supreme Court cases recently, the 
Utility Air Regulator case, the Michigan v. EPA case. In the 
Utility Air Regulator case, the Supreme Court stated, ``When an 
agency claims to discover a long-extant statute and unheralded 
power to regulate a significant portion of the American 
economy, we typically greet that announcement with a measure of 
skepticism.'' They went on to say ``The EPA's interpretation is 
unreasonable because it would bring about an enormous 
transformative expansion of the EPA's regulatory authority 
without clear congressional authorization.''
    Do you think you have clear congressional authorization to 
undertake this rule?
    Ms. McCabe. We do, and our authority has been supported by 
the Supreme Court finding that carbon pollution endangers 
public health.
    Senator Sullivan. So when you were getting ready to issue 
the WOTUS rule, I asked the Administrator if we could get the 
legal opinion that EPA undertook to show that you have that 
authority. She never granted it, never gave it to me. I think 
that is a clear aspect of our oversight, she refused to do it. 
Do you have a legal opinion? I am not talking about your rule, 
but a detailed legal opinion that shows that you have the legal 
authority to issue the Clean Power rule?
    Ms. McCabe. We do, Senator.
    Senator Sullivan. Can we get that?
    Ms. McCabe. We have a legal memorandum.
    Senator Sullivan. Can we get that?
    Ms. McCabe. Absolutely. It is available right now, today, 
it has been available since August 3d in the docket. We will be 
happy to provide it to you.
    Senator Sullivan. Great. In the Michigan v. EPA case, the 
Supreme Court ruled against EPA's Mercury Rules 3 years after 
their issuance. As such, many power plants had already 
shuttered or retrofitted because of the rule's requirement.
    Earlier this year, the Wall Street Journal ran an editorial 
suggesting that this might be a tactic of the EPA. 
Interestingly, Administrator McCarthy kind of insinuated that 
as well. She was on a TV show and she stated on the eve of this 
ruling, ``We think we are going to win because we did a great 
job.'' This is EPA v. Michigan, which you actually lost. ``But 
even if we don't win, it was 3 years ago we issued the rule. 
Most of them are already in compliance, investments have 
already been made.''
    Do you think that is an arrogant way to approach the rule 
of law in our oversight, saying, hey, even if we lose, we are 
going to win because we forced this on Americans anyway?
    Ms. McCabe. Senator, this agency acts within its 
understanding of the law.
    Senator Sullivan. What do you think of her statement? What 
do you think of that statement? Do you think that is an 
arrogant approach to our oversight or the American people? We 
lost, but you know what? The American people and businesses are 
going to have to abide by it anyway?
    Ms. McCabe. If I can clarify, Senator, the decision from 
the Supreme Court spoke to one very narrow aspect of the 
Mercury and Air Toxics Rule.
    Senator Sullivan. No, I am talking about her statement.
    Ms. McCabe. I understand that, and I am not going to 
comment about the Administrator. I didn't hear her say it, I 
don't know what she was intending to say.
    Senator Sullivan. Mr. Chairman, I think that is an 
incredibly arrogant way to look at the rule of law, to look at 
our oversight of this committee. I think it is something we 
need to look at, because it is a flagrant disregard for the 
rule of law.
    Let me ask one final question. You talk about outreach. 
Thirty-one States, including Alaska, are suing EPA on the WOTUS 
rule. You are losing right now in Federal court. There has been 
an injunction saying it is like that you are going to lose. 
Thirty-two States have opposed the Clean Power Plan.
    Does this disturb you? You talk about all the outreach that 
you do, and yet the majority of the States in the United States 
consistently oppose what the EPA tries to do from a regulatory 
standpoint. Does it disturb you that 31 States are suing on 
WOTUS, 32 are opposing the Clean Power plan, and 16 have 
already requested a regulatory stay but they can't do it 
because you haven't issued the rule? Does that disturb you or 
the Administrator?
    Ms. McCabe. Senator, I can't speak to the WOTUS rule, 
because that is not within my area.
    Senator Sullivan. But you are a senior EPA administrator.
    Ms. McCabe. I am. And our desire always is to work with 
States. There will always be disagreements among States. Even 
within the States that have taken action to litigate against 
the rule or have indicated that they intend to, we are having 
very constructive discussions with those States.
    I think it is oversimplifying to say that X number of 
States oppose the Clean Power Plan.
    Senator Sullivan. When the States sue you, that is usually 
a pretty good indication they don't like the rule.
    Ms. McCabe. I don't think 32 States have sued us.
    Senator Sullivan. They can't sue you yet on this one, 
because you haven't issued the rule.
    Ms. McCabe. And attorneys general are taking certain 
positions, Governors are taking certain positions. But the vast 
majority of the people that I talk to understand, they 
appreciate the adjustments that we made in the final rule that 
were directly responsive to the concerns that they raised to 
us, like providing more time for States to get their plans, and 
providing more time for utilities to accomplish these goals.
    Senator Sullivan. Thank you, Mr. Chairman. I do think it is 
a big issue, whether it is the arrogance that the Administrator 
shows by saying that, hey, even if we lose, we win, because the 
American people are stuck with it anyway. I think it is a 
really big issue that we need to look at to not allow for 
agencies, even when they lose in court, in the Supreme Court, 
to still force a rule down the American people's through and 
have the Administrator essentially say that is part of her 
strategy, in public. I think it is outrageous.
    Senator Inhofe. Thank you, Senator Sullivan.
    Senator Whitehouse.
    Senator Whitehouse. Thank you, Chairman.
    During this hearing, my colleagues have mentioned this 
report prepared for the National Association of Manufacturers 
that claimed that a standard of 65 parts per billion could cost 
as much as $140 billion per year. EPA had estimated that it 
would cost a fraction of what NAM estimates, less than 12 
percent.
    The economic consulting firm SYNAPSE recently analyzed the 
NAM report and found that, ``grossly overstates compliance 
costs, due to major flaws, math errors and unfounded 
assumptions. Among other things, NAM significantly inflated the 
emissions reductions needed to meet the 65 parts per billion 
standard through a series of unfounded and skewed assumptions. 
These assumptions and other flaws led NAM to overState 
compliance costs by more than 700 percent.''
    That is the document that my colleagues are relying on in 
this hearing. I ask unanimous consent that the debunking 
industry claims report be entered into the record.
    Senator Inhofe. Without objection.
    [The referenced information follows:]
    
    
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    Senator Whitehouse. Industry has a long history of muddling 
the science and manufacturing false data and exaggerating 
regulatory costs whenever the development of a new public 
health standard emerges. It is a standard industry game plan. 
We have seen this with climate change denial, we have seen it 
with efforts to address acid rain. We have seen it with efforts 
to cut toxic pollutants, such as mercury, and we have seen it 
with efforts to reduce smog. I am sorry that the National 
Association of Manufactures has associated itself with this 
unfortunate history and this particular report.
    Ms. McCabe, you have decades of experience working on Clean 
Air Act regulations. What is the track record of industry's 
past claims about the cost of health standards adopted under 
the Clean Air Act?
    Ms. McCabe. I would say, Senator, that we have often heard 
on the eve of a regulatory change that there would be 
significant economic impacts, and over time of course, we have 
seen that has not been true. Air quality has improved, public 
health has improved and the economy has also improved.
    Senator Whitehouse. Industry frequently talks about the 
costs of a rule. And when they measure the rule, they talk 
exclusively about the cost to themselves, the cost to polluters 
of meeting the public health standards, while they ignore the 
costs of not meeting the health standards that everybody else 
has to pay for. They ignore the public benefit and only the 
cost.
    Now, EPA estimates the economic benefits from reducing 
premature deaths, asthma attacks, heart attacks and missed 
school days as high as $42.1 billion a year in 2025, 
significantly outweighing the costs. Does this NAM report 
quantify any, any of the societal benefits from updating the 
standard?
    Ms. McCabe. I don't believe it does. I think it focuses 
entirely on costs.
    Senator Whitehouse. Do you agree that we should actually 
look at both sides of the ledger, the costs and the benefits 
together, in evaluating the merits of a rule?
    Ms. McCabe. Absolutely, we should.
    In fact, if you were an accountant and if you looked at 
only one side of the ledger and made a report on it, you would 
probably end up going to jail, wouldn't you?
    Ms. McCabe. Me personally?
    Senator Whitehouse. No, the accountant who reported only 
one side of the ledger.
    Ms. McCabe. That would probably not be a good way to do 
accounting.
    Senator Whitehouse. And yet is the way that industry 
constantly behaves in this hearing room.
    We are a downwind State, Ms. McCabe. It is our oceans that 
are acidifying because of carbon dioxide. It is our coasts that 
are threatened by worsened storms. It is our fisheries that are 
moving away in order to seek the shelter of cooler waters to 
the north. It is our air that is affected by the ozone.
    Rhode Island from time to time has bad air days on a 
perfectly nice summer day, where elderly people and infants and 
people with breathing difficulties are advised to stay indoors. 
Don't go outside and play football, don't go to the beach, stay 
indoors, so that people in other States, upwind of us, can 
continue to pollute.
    There is zero concern from the other side of the aisle 
about what any of that is costing. It is really astounding to 
me. Stage right of this hearing room, every time, every 
regulation, every member, always with industry, always against 
the environment. And I wish it would come to an end. We are 
really in a better place if we can work together to address 
real problems rather than pretend they don't exist.
    Senator Inhofe. Thank you, Senator Whitehouse. Senator 
Barrasso?
    Senator Barrasso. Thank you, Mr. Chairman, and it does 
seem, looking at a map of the places in non-attainment, that it 
is California where a lot of that area is in non-attainment. So 
if the Senator from Rhode Island states that things are moving 
from west to east, we can see the source of significant amounts 
of the problems.
    Senator Whitehouse. That is actually not correct.
    Senator Barrasso. Well, there are significant amounts of 
California that are not in attainment, if you look at a map 
that I looked at a few minutes ago.
    Senator Whitehouse. But if you look at what is coming over 
Rhode Island----
    Senator Inhofe. Senator Whitehouse, we are not going to 
interrupt each other.
    Senator Whitehouse. I am sorry, but when he mentioned me 
specifically I thought it gave me a right to respond.
    Senator Inhofe. Senator Barrasso.
    Senator Barrasso. Thank you, Mr. Chairman.
    Ms. McCabe, I want to followup with some lines of 
questioning that I had with you on February 11th at the hearing 
on the President's Clean Power Plan before this committee. I 
had asked you about the EPA's claiming of co-benefits of 
reduction, sort of the double-counting that I believe is going 
on at the EPA. I asked if the EPA was double-counting health 
benefits, because it sure seems that way to me, in terms of 
reductions in particulate matter, since other EPA air rules 
claim the same reductions in particulate matter, claim the same 
health benefits.
    My point was, you can only reduce the dust once and accrue 
the health benefits of that reduction once, not over and over 
again to justify different rules. You stated that you were not 
double-counting, and you say we are very careful in all our 
regulations to make sure that we don't do this.
    Yet when you take a look at the EPA's own documents, you 
State that you are counting co-benefits of reducing the same PM 
2.5 in other rules before a 111(d) rule for existing power 
plants was even released. EPA stated in its regulatory impact 
analysis for the proposed rule for existing power plants that 
it was possible that the benefits estimated in this RIA, the 
regulatory impact analysis, may account for the same air 
quality improvements as estimated in the illustrative NAAQS 
regulatory impact analysis. The same air quality improvements.
    That is what the EPA is saying, that the same air quality 
improvements from previous regulatory impact analyses are being 
counted again. To me that means double-counting.
    So do you still stand by your testimony in front of this 
committee and reject your own agency's statement about double-
counting the same co-benefits and reductions of air pollutants 
like particulate matter?
    Ms. McCabe. Well, Senator, I am not sure exactly what you 
are referring to. But I assure you again that when we do each 
regulatory impact analysis, we acknowledge the effects of 
previous rules. But the benefits that we associate with each 
regulatory action are the benefits that accrue entirely and 
exclusively because of that regulatory action. They may then be 
additive, on top of prior rules that have come before.
    Senator Barrasso. That is not what the documentation said 
that was sent to me. This sounds like Volkswagen accounting. I 
think government ought to be held to a much better standard 
than what we are seeing coming from this agency and this 
Administration.
    According to the Wyoming Department of Environmental 
Quality, the EPA designated all of one of the counties in 
Wyoming, Sublet County, portions of Lincoln and Sweetwater 
Counties, as ozone non-attainment areas in 2012. Judge Gary 
Moore, President of the National Association of Regional 
Councils, testified at a June 3d hearing, said ``Sublet County, 
Wyoming serves as an example of how the new standard,'' he is 
referring to the new ozone standard, ``could impact economic 
development activities.''
    He goes through Sublet County, the number of residents that 
live there, all of the public land that is involved, a county 
highly dependent on oil and gas development, mining activities. 
``And if the ozone standard is tightened further,'' he says, 
``Sublet County will likely be classified as fully in non-
attainment, severe restrictions on industrial development which 
will limit jobs in the community.''
    So under your new ozone rule, it is likely that more 
counties in Wyoming, more counties around the Country will be 
in non-attainment, including the counties that have not yet 
achieved the previous level for ozone. So given the high cost 
in terms of jobs, regulatory burdens on struggling counties, 
the significant detrimental health impacts to people who lose 
their jobs, chronically unemployed, under what rationale do you 
believe you should be moving the goalpost on counties that have 
not yet even met the current standard?
    Ms. McCabe. Well, Senator, there is a lot in that question. 
I will try to answer a number of those issues.
    In Sublet County, there are increasing levels of ozone 
there that are occurring that are affecting the public health 
there. So that prompts the EPA to look at that county and work 
with the State there in order to address those issues. I want 
to make clear that under any new ozone standard, decisions 
about which counties do and don't attain will be made based on 
air quality, some of which hasn't happened yet, it will be 
based on future air quality, 2014 through 2016.
    So looking at historic levels is not a predictor of which 
counties will and won't be in non-attainment. I can tell you 
that with Wyoming in particular, we are working very closely 
with Wyoming on the emissions related to the oil and gas 
activities. Wyoming is a leader in terms of its State programs 
to encourage and require the companies there to conduct their 
activities in a way that is safe and that minimizes air 
emissions in a cost-effective and very positive way.
    Senator Barrasso. Since you bring up the State, in a 
February 11th hearing, this will be my final question, Mr. 
Chairman, I asked of you if the States had the same access to 
crafting the Clean Power Plan rules as the environmental groups 
do, given the headlines about the NRDC's involvement in 
crafting your rules in the EPA. You stated ``I speak with 
States all the time, they have very good access.'' Well, you 
didn't really answer the question if the States were getting 
the same or better access than the environmental groups.
    So States are going to disagree with you, you say you talk 
to States all the time and they have access. Our own Department 
of Environmental Quality came and testified about what is 
happening. He says, ``In the air programs alone, there have 
been dozens of new rules in the regulation of air quality. 
Therefore, EPA relies heavily on the states to carry out these 
initiatives. We are the boots on the ground that ensures the 
Nation's priority is cleaning up the air, protecting human 
health is achieved. But State resources are being stretched 
even more, as EPA continues to propose regulations at their 
current pace, they must consider the ability of States to meet 
this demand.''
    That doesn't to me sound like States are really getting 
heard in the process as you develop rules and work with the 
environmental extremist groups to develop those rules.
    Ms. McCabe. Senator, we work with all groups, and they 
provide their input to us. We write the rules that we think are 
appropriate. I assure you that in my job, the States are my co-
regulators, are our co-regulators. We take their input 
extremely seriously, as together we implement the National 
Clean Air Act.
    Senator Barrasso. Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Barrasso. Senator 
Gillibrand.
    Senator Gillibrand. Thank you, Mr. Chairman.
    It is regrettable that this committee is meeting again to 
debate the Obama administration's efforts to address climate 
change and protect the air we breathe from harmful pollution, 
including smog. Just last week, Pope Francis called on us in 
Congress to be courageous in protecting our environment and 
protecting the most vulnerable among us.
    It is often the most vulnerable who suffer the effects of 
poor air quality the most, children, the elderly and people 
with illnesses and disabilities. According to the most recent 
statistics, 7.9 percent of children in New York, approximately 
315,000, live with asthma. The total cost of asthma 
hospitalizations in New York is $660 million. That is just New 
York.
    When talking about the cost of action, we must also talk 
about the cost of inaction, which is often borne by those who 
can least afford to pay. Protecting our environment and growing 
our economy is not a zero sum game. We should stop treating it 
as such. In transitioning to a clean energy economy, we can 
unlock the potential for innovation and create new, sustainable 
jobs.
    In New York, we are seeing the benefits already through the 
participation of the Regional Greenhouse Gas Initiative, or 
RGGI. By participating in this market-based program, New York 
has reduced its carbon emissions form power plants by 45 
percent since 2005. At the same time, New York's economy is 
growing. Our employment is the highest it has been at more than 
9 million jobs.
    Can you discuss the costs to the economy in terms of paying 
for natural disasters, damage to infrastructure, and increased 
resiliency measures if we fail to reduce our carbon emissions?
    Ms. McCabe. Yes, I can, Senator. In fact, EPA in the 
spring, late spring or summer, put out a report exactly on that 
issue called the SERA report, which looked at a number of 
different metrics, and looked at the cost to our economy and to 
our society for infrastructure issues in the future and water 
quality issues in the future, and sort of compared how much 
more it would cost if we didn't take action on climate change.
    So on a number of different metrics, it is very clear and 
documented. We would be glad to provide you a copy if you 
haven't seen it.
    Senator Gillibrand. Thank you. And who are the most 
vulnerable to experiencing the effects of ozone pollution, if 
we fail to act?
    Ms. McCabe. In terms of ozone pollution, those who are the 
most vulnerable are children, the elderly and those whose 
respiratory systems are already compromised through some kind 
of respiratory disease.
    Senator Gillibrand. Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Gillibrand.
    And thank you very much, Ms. McCabe, for your 
participation. We are adjourned.
    [Whereupon, at 11:38 a.m., the hearing was adjourned.]

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