[Senate Hearing 116-214]
[From the U.S. Government Publishing Office]
S. Hrg. 116-214
HEARING TO EXAMINE S. 2662, THE GROWING AMERICAN INNOVATION NOW
(GAIN) ACT
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HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 6, 2019
__________
Printed for the use of the Committee on Environment and Public Works
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
___________
U.S. GOVERNMENT PUBLISHING OFFICE
40-412 PDF WASHINGTON : 2020
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
JOHN BARRASSO, Wyoming, Chairman
JAMES M. INHOFE, Oklahoma THOMAS R. CARPER, Delaware,
SHELLEY MOORE CAPITO, West Virginia Ranking Member
KEVIN CRAMER, North Dakota BENJAMIN L. CARDIN, Maryland
MIKE BRAUN, Indiana BERNARD SANDERS, Vermont
MIKE ROUNDS, South Dakota SHELDON WHITEHOUSE, Rhode Island
DAN SULLIVAN, Alaska JEFF MERKLEY, Oregon
JOHN BOOZMAN, Arkansas KIRSTEN GILLIBRAND, New York
ROGER WICKER, Mississippi CORY A. BOOKER, New Jersey
RICHARD SHELBY, Alabama EDWARD J. MARKEY, Massachusetts
JONI ERNST, Iowa TAMMY DUCKWORTH, Illinois
CHRIS VAN HOLLEN, Maryland
Richard M. Russell, Majority Staff Director
Mary Frances Repko, Minority Staff Director
C O N T E N T S
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Page
NOVEMBER 6, 2019
OPENING STATEMENTS
Barrasso, Hon. John, U.S. Senator from the State of Wyoming...... 1
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 9
WITNESSES
Alteri, Sean, Deputy Commissioner, Kentucky Department for
Environmental Protection....................................... 12
Prepared statement........................................... 15
Responses to additional questions from Senator Barrasso...... 20
Holmstead, Jeffrey R., Esq., Partner, Bracewell LLC.............. 51
Prepared statement........................................... 53
Responses to additional questions from:
Senator Barrasso......................................... 64
Senator Carper........................................... 66
Walke, John D., Esq., Clean Air Director and Senior Attorney,
Natural Resources Defense Council.............................. 79
Prepared statement........................................... 81
Responses to additional questions from Senator Carper........ 173
HEARING TO EXAMINE S. 2662, THE GROWING AMERICAN INNOVATION NOW (GAIN)
ACT
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WEDNESDAY, NOVEMBER 6, 2019
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The Committee met, pursuant to notice, at 10:06 a.m. in
room 406, Dirksen Senate Office Building, Hon. John Barrasso
(Chairman of the Committee) presiding.
Present: Senators Barrasso, Carper, Inhofe, Capito, Cramer,
Braun, Rounds, Sullivan, Boozman, Ernst, Cardin, Gillibrand,
Markey, and Van Hollen.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM THE STATE OF WYOMING
Senator Barrasso. Good morning. I call this hearing to
order.
Today, we are here to discuss S. 2662, the Growing American
Innovation Now Act, or the GAIN Act. This bill would bring long
overdue legislative reform to the Clean Air Act's New Source
Review program.
The New Source Review program protects air quality when
industrial boilers, factories, and power plants are modified or
newly built. The GAIN Act provides much needed clarity to
factory and power plant owners, as well as to State permitting
officials, about when permits are needed.
The New Source Review program was originally designed to
support pollution control projects and upgrades. It has
actually had the opposite effect.
In its current form, the program is complex, it is costly,
it is time consuming. The program directly slows economic
growth. It slows jobs creation, it slows technical innovation,
as well as the ability to modernize our American industry and
infrastructure.
The Portland Cement Association submitted a letter to the
Committee outlining the extreme burden that New Source Review
places on its members. The association explained that ``A
member company sought a permit to combust alternative fuels.
The EPA Regional Office insisted that permitting to burn
alternative fuels automatically triggered NSR permitting. After
going through a costly, lengthy, and burdensome process, the
EPA Regional Office concluded that the project was not required
to go through NSR permitting. It took 5 years to go through
this process.''
Five years to figure out that you do not need a permit.
Simply unacceptable.
So I ask unanimous consent to enter the letter into the
record.
And without objection, it is done.
[The referenced information follows:]
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Senator Barrasso. Such permitting uncertainty and delays
discourage key upgrades that would otherwise be good for the
economy and the environment. Last year, a group of seven unions
wrote to the Committee urging New Source Review reform
legislation. These seven unions that wrote state, ``The New
Source Review program adversely impacts American workers by
creating a strong disincentive to undertake projects that can
improve the efficiency and productivity of existing utility and
industrial plants, ranging from steel and chemicals to
refineries.''
I am going to enter that letter into the record without
objection as well.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Congress enacted the New Source Review
program more than 40 years ago. It is time for us to streamline
and modernize the program.
When Congress last addressed the New Source Review program,
we didn't have power plants using carbon capture, like we now
have at the Petra Nova project.
At a 2017 hearing before this Committee, NRG Energy
testified that it had to redesign the Petra Nova project in
Texas to avoid triggering New Source Review requirements. This
unnecessary re-design added $100 million to the cost of the
project.
We can't have our environmental regulations pose roadblocks
to critical technologies that would reduce our emissions, and
combat climate change.
The GAIN Act would make much needed changes to the Clean
Air Act. It would provide more clarity about what types of
changes fit the definition of ``modifications,'' and therefore
warrant a New Source Review permit.
The bill would clarify that projects designed to reduce
emissions or improve reliability and safety should not
generally trigger New Source Review permits. Permitting would
no longer be based on annual emissions estimates, which have
been the subject to endless litigation and are very difficult
to project.
So I would like to thank Leader McConnell, Senator Braun,
Senator Capito, Senator Paul, and Senator Inhofe for joining me
on this bill. The GAIN Act is identical--identical--to a
bipartisan bill, the New Source Review Permitting Improvement
Act, that is sponsored in the House by Congressmen Morgan
Griffith and Collin Peterson and Alexander Mooney.
I encourage Senate Democrats to join us in making this bill
bipartisan on this side of the Capitol as well, as we have it
bipartisan in the House. Any Senator who cares about economic
growth, emissions reductions, and clear regulations, I would
encourage to support this legislation.
Now I would like to turn to Ranking Member Carper for his
opening remarks.
OPENING STATEMENT OF HON. THOMAS R. CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. Thanks, Mr. Chairman.
I am going to do something today I don't think I have ever
done in 18 years. I just ask my colleagues to bear with me for
a moment.
We all have military personnel who have served, been
injured, and some killed. I just want to share with you briefly
before I recap my opening comments just a couple of words about
an Army Battalion Ranger from Delaware who was nearly killed 2
months ago today.
He sustained four brain injuries. A log building exploded,
crushed him and some other people. Broke his ribs, broke his
pelvis, broke his leg, right leg. Fractured vertebrae in his
spine, and it is amazing he is alive.
He was miraculously saved there, eventually brought back to
Walter Reed, and has gotten great care there.
He was moved a couple of weeks ago, I talked to him, and he
was moved to the polytrauma center in Tampa, Florida.
His mom lives in Delaware, I talked to her the other day.
She says he is doing well. He has no infections. Apparently, he
is learning to walk again. He needs occupational therapy; he
needs brain stimulation. Four traumatic brain injuries, can you
believe that?
Currently he is having difficulty remembering. He remembers
the incidents and some items, others he loses focus on. But he
has a good attitude. I talked to him, and I told him that, in
the words of Henry Ford, if you think you can and you think you
can't, you are right.
This is a greeting card. His mother said he loves cards.
She said, maybe you can send him one. I am going to send him
one, and ask you all to sign it, all my colleagues. Thank you.
Now I want to say terrible things about this bill.
[Laughter.]
Senator Carper. When I was a Congressman, I used to hold a
lot of town hall meetings. I still have some, not as many as
then.
Every now and then somebody would raise an issue and say,
they would have an idea, or propose an idea which really was
devoid of much value. Rather than just say, That is the dumbest
idea I have ever heard, I would say, Now, there is a germ of a
good idea in what you are proposing, and just focus on that
germ of a good idea.
The issue that the Chairman is raising here is one that is
not new, and we adopted the Clean Air Act, gosh, how many years
ago, many, many years ago. I was involved in 1990 in the
modification of the amendments to the Clean Air Act. So this is
not a new issue.
It is one I would welcome, Mr. Chairman, just a chance to
sit and talk with you and your staff, and to explore, find out
where there is a germ of a good idea. I think there probably
is.
But I am just going to ask that my statement for the record
be entered. Some of you have heard me say this before. I live
in a little State in the northeast, we are the 49th largest
State. But we are surrounded by a lot of other States, where
there is a lot of pollution.
When I was Governor, I could have shut down the economy of
my State, stopped every car on the roads, we still would have
been way out of compliance for Clean Air standards in a lot of
ways because of the pollution that comes to us from other
places.
My fear, one of my fears is that this legislation doesn't
help that situation get any better. We all care about our
States, the quality of the air in our States. This is something
we continue to wrestle with. My fear is this legislation, if
adopted, won't make that any better.
But I would be willing to have a conversation, Mr.
Chairman. In the meantime, I just ask unanimous consent to
enter into the record this statement.
Senator Barrasso. Without objection.
[The prepared statement of Senator Carper follows:]
Statement of Hon. Thomas R. Carper,
U.S. Senator from the State of Delaware
Good morning, everyone.
Today, we are here to discuss Chairman Barrasso's bill, the
``Growing American Innovation Now (GAIN) Act.''
Although this is the first hearing our Committee has held
on this particular piece of legislation, the New Source Review
permitting program has been a topic for discussion for years--
because it has been a target for industry for decades.
The New Source Review program applies to our nation's
largest sources of air pollution--approximately 14,000 sources
nationwide--and requires any new industrial facility to install
state of the art pollution controls. Older facilities built
before 1978, however, only have to install pollution controls
if they make operational or physical upgrades and other changes
that increase their emissions.
These protections were designed to ensure that older
facilities do not make life extending upgrades that ultimately
increase pollution in our communities. Unfortunately, for
decades now, industry has been pushing to weaken the New Source
Review program under the cloak of ``improved efficiencies.''
In fact, one of our witnesses here today, Mr. Holmstead,
tried to make similar changes for the power sector almost two
decades ago when he ran the EPA air office. The Trump EPA also
proposed a similar change in its Dirty Power Plan proposal.
However, those efforts eventually failed or were thrown out
by the courts entirely. That's because the changes sought by
industry would allow aging facilities to operate longer, and in
many cases, without pollution controls, resulting in more human
exposure to dangerous emissions, and also violate Congress's
intent that these sources either keep emissions the same or
install pollution controls.
The bill before us today tries yet again to weaken the New
Source Review program, but it is even more problematic than
past EPA efforts. The GAIN Act would allow an estimated 14,000
of the largest, oldest, dirtiest sources of air pollution to
emit more pollution each year. It would be especially harmful
for downwind States, including my home State of Delaware, which
are already struggling under this Administration to hold upwind
States accountable.
I expect that our Republican friends will use this hearing
to argue that the current New Source Review program is
preventing existing factories, coal plants, and other large
polluters from making upgrades to become more efficient. I
expect that we will hear that this bill will result in
emissions reductions, and therefore help us to addressing the
climate crisis.
On the surface, these arguments may seem compelling and
worth seriously considering.
In fact, I have seriously considered those arguments. As my
colleagues know, I have long been an advocate for reducing air
emissions and increasing efficiency. That is why I implore my
colleagues to take a deeper look into this legislation. Again,
what is being proposed today is not a new idea--and it has been
proven time and again to increase, not decrease, pollution.
If emissions truly went down under this proposal, as our
colleagues claim it would, then changes to New Source Review
would not be necessary. New Source Review is only triggered if
a change at the source causes emissions to significantly
increase. That is the law.
What's more, the legislation before us today applies to all
14,000 regulated emissions sources--not just the power sector.
If industry claims under the bill that an upgrade is
``designed'' for reliability or safety purposes, then
requirements to reduce emissions are waived entirely.
This is all the more troubling when you add in the deluge
of harmful and half-baked deregulatory efforts emanating from
the Trump EPA's air office. Right now, the EPA has proposed or
finalized rules that undermine the Mercury and Air Toxics
Standards, deny downwind States the right to cleaner air,
weaken the Regional Haze Rule and roll back power plant carbon
standards.
This EPA has even floated changes to a nearly 40 year old-
interpretation of what ``ambient air'' is. It sounds laughable,
but it's true: the Trump EPA is considering redefining ``air.''
This Administration isn't even trying to hide its contempt
for clean air. Late last year, in an interview with the
Washington Post, Administrator Wheeler was asked to name three
rules he is working on that would reduce air pollution in
absolute terms. Mr. Wheeler responded by saying, and I quote,
``I'm not sure I'm going to be able to give three off the top
of my head.'' End quote.
Meanwhile, look to the west, to the wildfires currently
ravaging the State of California. The climate crisis demands
our full attention and bold action. Yet all of the actions
taken by this EPA take us in the wrong direction--they will
hurt or even kill thousands of Americans, while imposing
serious costs to our economy and society.
When you take a closer look, it is clear that the GAIN Act
is likely more of the same. At a time when carbon and other
harmful emissions are increasing, and our people are regularly
experiencing the effects of climate change, we simply cannot
afford to make the changes proposed in the GAIN Act.
With that said, I thank the witnesses for being here and
look forward to today's testimony.
Thank you.
Senator Carper. And I would ask my colleagues, if you would
take the time just to write a note on this.
Senator Barrasso. What is his name?
Senator Carper. It is Kyle Robert Montgomery, Ranger.
Senator Barrasso. We would be happy to do it.
Senator Carper. Thank you.
Senator Barrasso. We can start with our No. 1 veteran, and
we can continue throughout. Thank you.
We will now hear from our witnesses. Jeff Holmstead, who is
a partner at Bracewell LLP; we have also Sean Alteri, who is
the Deputy Commissioner of the Kentucky Department for
Environmental Protection; as well as John Walke, who is the
Clean Air Director for the Natural Resources Defense Council.
I would like to remind the witnesses that your full written
testimony will be made part of the official hearing records.
Please keep your statements to 5 minutes, so that we may have
time for questions. I look forward to hearing the testimony of
each of you.
Director Alteri, I think you are first. Will you please
proceed?
STATEMENT OF SEAN ALTERI, DEPUTY COMMISSIONER, KENTUCKY
DEPARTMENT FOR ENVIRONMENTAL PROTECTION
Mr. Alteri. Good morning, Chair Barrasso, Ranking Member
Carper, and members of the Committee. My name is Sean Alteri,
and I currently serve as the Deputy Commissioner for the
Kentucky Department for Environmental Protection. I am honored
to testify today, and I appreciate the opportunity to provide
comments relative to the New Source Review program.
It is important to note that the New Source Review program
is utilized by EPA, State, tribal, and local air pollution
control agencies to attain and maintain compliance with the
National Ambient Air Quality Standards. The New Source Review
program is necessary to protect the health of our citizens and
prevents the significant deterioration of air quality.
Regarding this legislation, the proposed amendments are
narrow in their scope of the New Source Review program. This
bill proposes to amend the definition of modification to
exclude projects that implement efficiency measures, which
reduce the amount of any air pollutant emitted by the source
per unit of production. The proposed amendment also limits the
emissions increases to the maximum achievable hourly emission
rate demonstrated in the last 10 years.
To be certain, this bill does not apply to new major
stationary sources, or new units that exist in major stationary
sources. This bill does not allow the de-bottlenecking of
downstream emission units and does not exempt those emissions
from New Source Review. And this bill does not allow sources of
emissions to violate the National Ambient Air Quality
Standards.
Since 2008, the Cabinet has issued more than 25 New Source
Review permits. These actions allow for economic growth and
development, while requiring major sources of emissions to
install and operate the best available control technologies.
During this same time period, air quality in Kentucky has
improved dramatically.
In the last 10 years, emissions of sulfur dioxide have
decreased more than 83 percent, and emissions of nitrogen
oxides have decreased by more than 70 percent from our coal
fired electric generating units. These tremendous reductions
did not occur as a result of New Source Review.
Due to potential applicability of New Source Review
requirements, facilities have unfortunately foregone efficiency
measures and improvements that can provide substantial
environmental benefits.
This bill will not allow coal fired electric generating
units to violate applicable emissions standards established by
the Cross-State Air Pollution Rule and the Mercury Air Toxics
Standards. However, this bill will allow an existing coal fired
electric generating unit to implement energy efficiency
measures and reduce their emissions of carbon dioxide per
megawatt generated.
Energy efficiency projects at existing coal fired electric
generating units will be necessary to reduce their carbon
dioxide emissions and will be critical for air pollution
control agencies to meet the requirements of the Affordable
Clean Energy rule. A State plan under the ACE rule will
establish carbon dioxide emission limitations from existing
coal fired generating units for the first time.
Balancing environmental protection and economic growth and
development often creates tension between regulated industries
and environmental activists. This tension is most noticeable
and evident in the Clean Air Act's New Source Review program.
When setting forth the statutory authority, Congress
declared the New Source Review program is ``to ensure that
economic growth will occur in a manner consistent with the
preservation of clean air resources.''
Striking the proper balance between economic growth and
protection of our air resources is essential to fulfill our
statutory obligations under the act. To resolve this tension,
final determinations of New Source Review permits are often
administratively challenged and decided through litigation.
In recent years, the New Source Review program has served
as the vehicle to delay the permit process and the construction
of major economic development opportunities.
In Kentucky, third party interest groups challenged or
petitioned EPA to object to eight air quality permits related
to New Source Review in the last 10 years. All of the
challenged air quality permits utilized coal as an energy
resource, and the focus of the challenges centered on coal
fired electric generation.
Ultimately, EPA and the courts found that the air quality
permits issued by the Division for Air Quality contained all
applicable requirements and sufficient monitoring to
demonstrate compliance.
In an effort to resolve the differences of this proposed
legislation, one option would be to further restrict the scope
of the New Source Review amendments to apply only to energy
efficiency projects at existing coal fired electric generating
units. By establishing clear statutory authority, State air
quality regulators will be provided with the regulatory
certainty to establish carbon dioxide emission limitations from
existing coal fired generating units, and again, for the very
first time.
Again, thank you for the opportunity to comment today. I
look forward to any questions you may have regarding my
testimony.
[The prepared statement of Mr. Alteri follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thank you so much for your thoughtful
testimony. We appreciate your coming in from Kentucky to do
that.
Mr. Holmstead.
STATEMENT OF JEFFREY R. HOLMSTEAD, ESQ.,
PARTNER, BRACEWELL LLC
Mr. Holmstead. Thank you very much for giving me the chance
to testify this morning.
Senator Carper. Have you testified here before?
Mr. Holmstead. A few times.
Senator Carper. If you had to guess how many times you have
testified here, how many times would you guess? A dozen or
more?
Mr. Holmstead. Well, maybe close to that number. Yes, quite
a few.
Senator Carper. Welcome back.
Mr. Holmstead. Thank you.
Senator Carper. Don't agree with you on everything.
Mr. Holmstead. I have to say, it is always an honor to be
here.
As some of you know, for almost 30 years, I have devoted my
professional career to working on Clean Air Act issues. As a
staffer in the White House, as the head of the EPA Air office
and as an attorney in private practice. And I have to say that
one of the things I find so frustrating is, it is very hard to
have an honest conversation about the New Source Review
program; what it does, and what it doesn't do.
I had the chance last night to review the testimony from
NRDC. I have to say that I found it dispiriting, even bordering
on dishonest when it comes to coal fired power plants. I want
to just tell you why.
Historically, the pollutants of greatest concern from power
plants have been SO2 and NOX, because of
their impact on human health and the environment. In 1990, when
the modern Clean Air Act was passed, and at least two of you
were involved in that, power plants were far and away the
biggest sources of SO2 in the country, and along
with motor vehicles, the biggest source of NOX.
But since 1990, power plant emissions of SO2
have decreased by 92 percent in our country. And power plant
emissions of NOX have decreased by 84 percent. That
is a remarkable achievement.
If you read the NRDC testimony and didn't know anything
about the Clean Air Act, you would assume that the NSR program
must be responsible for all these pollution reductions, that
all these plants triggered NSR and were forced to install the
best available control technology. But that is simply not the
case.
If you go to the EPA website that tracks power plant
emissions, it says that these dramatic reductions are
attributable to a number of other regulatory programs,
primarily a series of cap and trade programs, starting with the
Acid Rain program, that have imposed increasingly stringent
caps on SO2 and NOX emissions from coal
fired power plants.
NRDC seems to believe that the best way to reduce emissions
is to wait until plants trigger NSR, and they are required to
install BACT. But EPA has learned that it is actually much
better just to issue regulations telling them that they have to
reduce their emissions by how much and by when.
You might be surprised to know that there are many
different Clean Air Act programs that regulate the very same
pollutants from the very same facilities. In fact, power plant
emissions of SO2 and NOX are regulated
under at least 14 different Clean Air Act programs, a
cornucopia of acronyms, that some of you know.
The NRDC testimony gives these programs no credit. But
these are the programs that have actually reduced power plant
emissions by 90 percent over the last 25 years. And these are
the very same programs that will make sure that pollution
continues to go down, regardless of what happens with the NSR
program.
I did a word search last night and found 15 different
places in the NRDC testimony saying that the reforms in the
GAIN Act would lead to either massive or enormous increases in
pollution, and 13 places saying ominously that it would allow
industrial facilities to evade pollution controls. I will say,
in a theoretical world, where there are no other environmental
regulations, and there is unlimited demand for all products,
this might be the case.
But in the real world, even if Congress decided to exempt
all existing power plants from NSR entirely, and that is not
what this bill does, but even if they did, there would not be
an increase in power plant pollution. In fact, because of the
many other programs that regulate the same pollutants from
these facilities, emissions would continue to decrease as they
have been doing since 1990.
The NRDC testimony almost concedes that total emissions
would continue to go down, but suggests that the current NSR
program is needed to ensure that no individual plant can
increase its annual emissions. But this is just plain silly.
The current NSR program does nothing to prevent a facility
from increasing its emissions. Annual emissions from individual
plants go up and down all the time, for reasons entirely
unrelated to NSR and modifications.
The hours that plants run depend entirely on what the
demand is. If the economy heats up, or if other big power
plants in an area shut down for any reason, other plants will
need to operate more hours, and their annual emissions will
increase. That is the way the world works.
The NSR program doesn't prevent this. But thankfully, as
Mr. Alteri said, there are many other regulatory programs that
when there are these increases in annual emissions, they are
not enough to adversely affect air quality or cause health
problems.
In the real world, the current NSR program does make it
difficult for plant owners to make capital investments that
would make their plants more efficient, and it does make it
more difficult to maintain industrial plants in good working
order.
The GAIN Act would remove these disincentives while still
ensuring that when a new industrial facility is built or an
existing facility is expanded, it will be required to install
the best available control technology at that time.
Again, I thank you very much for inviting me here today. I
look forward to answering questions.
[The prepared statement of Mr. Holmstead follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thanks so much for your very thoughtful
testimony. We appreciate your coming back to the Committee
today.
Mr. Walke.
STATEMENT OF JOHN D. WALKE, ESQ., CLEAN AIR DIRECTOR
AND SENIOR ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL
Mr. Walke. Thank you, Chairman Barrasso, Ranking Member
Carper, and Committee members.
I have been a Clean Air attorney for over 25 years. I am
afraid this bill is the most harmful Senate bill to amend the
Clean Air Act I have ever read. This bill allows a greater
amount of air pollution increases from a greater number of
industrial polluters than any Senate bill I have seen.
Indeed, the bill lets industrial facilities increase
dangerous air pollution to higher levels than they ever have
polluted, worsening air quality and evading pollution controls
that today's law requires.
This bill lets facilities increase pollution all the way up
to their worst possible polluting hour in the past 10 years,
and then, incredibly, the bill lets facilities exceed even that
astronomical increase.
Bill supporters say there are other legal limits on these
enormous pollution increases. That begs the question: Why
weaken the law so severely to allow massive pollution
increases, if there are these other limits on actual pollution
increases? The answer is because there are not these other
limits.
My written testimony provides multiple examples why these
other limits on the actual pollution increases do not exist, or
do not limit massive increases.
Notably, the written testimony of my fellow witnesses does
not contain a single example of a single law that limits actual
air pollution increases from a single facility in the country,
much less the many thousands of facilities that this bill would
let increase air pollution.
The main benefit of today's New Source Review safeguards
are to constrain runaway pollution increases.
When my fellow witness, Mr. Holmstead, headed the Bush EPA
Air Office, EPA rejected an approach similar to this bill's
amnesty, saying the approach would mean ``increases in
emissions that would be detrimental to air quality,'' allowing
pollution increases of 100 to 200 percent.
The Bush EPA Enforcement Office found that a single power
plant that had violated the law and evaded pollution controls
would have been able to get away with an astonishing 21,000 ton
per year increase in smog forming pollution under the approach
of this bill, and the approach the Bush EPA rejected.
How bad is a 21,000 ton increase from one plant? That is
greater than the total smog forming pollution from all coal
burning power plants in each of these Committee's States:
Alabama, Arkansas, Delaware, Iowa, Maryland, Mississippi, New
Jersey, Oklahoma, and Oregon.
A 21,000 ton increase is an incredible 7 percent of all
smog forming, nitrogen oxide pollution emitted from all sources
in Indiana, including cars and trucks and industrial and
manufacturing plants.
It is 10 percent of all sources in Kentucky, 12 percent of
all sources in Iowa, and an astounding 91 percent of all
pollution from all sources in Delaware, nitrogen oxides.
When smokestacks are belching more smog pollution from
burning coal or oil, they are also belching more of the brain
poisons lead and mercury, more cancer causing pollution, more
carbon pollution that drives dangerous climate change. A 21,000
ton smog increase would correspond to many millions of tons of
increased carbon pollution.
What about claims that the bill encourages energy
efficiency? What bill supporters claim to incentivize are
marginal improvements in pollution rates that are then allowed
to increase overall air pollution significantly and worsen air
quality significantly. This is not greater efficiency.
But the bill does not even require any efficiency
improvements. Facilities may increase pollution up to and
beyond their worst possible polluting hour in 10 years,
becoming less efficient.
The parents of a child rushed to the ER from an asthma
attack do not care if pollution per product or kilowatt
decreases. What these frantic parents care about is their
daughter's health after overall air pollution worsens, causing
her asthma attacks. That is what this bill's amnesty enables:
more pollution, more asthma attacks.
This bill does helpfully confirm how illegal a proposed
Trump EPA rollback is that pretends the Clean Air Act
authorizes the same rollbacks in this bill. Current law does
nothing of the sort, as even the bill's co-sponsors seem to
realize.
The House is unlikely to pass any version of this bill. The
main thing this bill appears to do now is attempt to give cover
to the proposed Trump EPA rollback. The bill says it is merely
clarifying the Clean Air Act, but that is plainly incorrect, as
all the bill's new text makes clear.
If you want to let industries pollute more, that is what
this bill does. If you want to explain to Americans why we
should let industry pollute all the way up to their worst
possible polluting hour in 10 years, that is what this bill
does. And then pollute even more than that, all the way up to
what they are physically capable of polluting, that is what
this bill does.
Deadly tiny particle pollution has worsened over 5 percent
since 2016. We don't need to go backward further. Senators
should not advance this bill.
Thank you.
[The prepared statement of Mr. Walke follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thank you for your testimony.
I would like to enter into the record a letter of support
for today's hearing, for this bipartisan bill, to point out
that this was bipartisan, submitted from the House of
Representatives, the New Source Review Permitting Act, H.R.
172, the House companion to the GAIN Act.
I would encourage others, in a bipartisan way, to support
the legislation.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Let's go to questioning at this time.
I would like to start with Mr. Holmstead.
To understand how badly we need reform, and you touched on
some of those things in your opening statement, I think it
would be helpful for all the Committee to know the types of
projects that the current New Source Review program complicates
or discourages, makes it harder. Could you walk us through some
examples of projects at a power plant or a factory that the
current program discourages?
Mr. Holmstead. Sure, yes. I would love to do that.
So if you look at all the NSR enforcement cases that groups
like John Walke's has brought, here is what you see. There is a
power plant that has a component, and these components are
called, like an economizer, it is a part of the power plant, it
starts to wear out. And so they replace that component. They
essentially just do the same thing that you would do if you
replaced the water pump in your car.
They are not increasing the output; they are not increasing
the capacity. They are returning the plant to its original
design, to its original operations.
There are hundreds of those projects. That is what the NSR
program has done.
So if you operate a power plant, you have to have teams of
engineers and lawyers to make sure that somehow, you don't run
afoul of this program. That is what all these NSR enforcement
cases are about, is simply letting plants--well, efficiency
improvements is another issue. But for the most part, these
enforcement actions are about allowing plants to replace
components that are part of the way they were originally
designed.
Senator Barrasso. Mr. Alteri, the Trump administration is
pursuing a number of reforms to the New Source Review program
through updated regulations, guidance, memoranda, different
things. In your testimony, you note that the Commonwealth of
Kentucky has supported regulatory reforms to the program. As a
State regulator, who has implemented the Clean Air Act?
You are an administrator who has actually implemented the
Clean Air Act. Can you talk about why legislation is also
necessary?
Mr. Alteri. In Kentucky, we are prohibited from regulating
by policy and guidance. So it is always critical for EPA to go
through the regulatory rulemaking process.
Also, as a regulator, and a former regulation supervisor,
when you have clear statutory authority, then you don't have
the risk of wasted effort when you do promulgate the
regulations, and you can always point back that you have clear
statutory authority.
Senator Barrasso. Mr. Holmstead, back to you. You have
heard the other witnesses testify. I know you read the
testimony previously, and you made some comments about that.
Anything else you have heard from the other witnesses in terms
of things you would like to add to your testimony this morning?
Mr. Holmstead. Again, I would love to wager, Mr. Walke, I
would wager a year's salary that if you pass this bill, there
is not going to be an increase in pollution from power plants.
Just think about it. Power plants operate to provide
electricity to people who demand it.
If you pass this bill, is demand going to go up that is
going to make power plants increase their hours of operation?
No. And all those power plants have limits in their permits, or
because of allowances, that keep their pollution down. So that
claim about these massive pollution increases, again, it is
based on some theoretical world that is nothing like the real
world.
The other thing I wish I could say quickly is, he claims in
his written testimony that there is no evidence that the NSR
program discourages efficiency improvements. I would just
suggest that when Gina McCarthy takes over NRDC that he have a
conversation with her about this. Because she has acknowledged
that that is an issue.
There are dozens and dozens of cases where power plants
have made energy efficiency improvements, and they have been
targeted by NSR enforcement actions. So Mr. Walke claims that
there is no peer reviewed studies to prove that it discourages
energy efficiency projects. But all you have to do is look out
there and see all the plants that have been subject to
enforcement when they do that.
And I just think that is problematic. That is not the way
the law should work.
Senator Barrasso. Mr. Alteri, back to you. Twenty years you
have been with the Kentucky Department for Environmental
Protection, you have implemented a lot of different Clean Air
Act programs. Beyond the New Source Review program that we are
looking at today, could you discuss any other EPA programs that
Congress ought to modernize?
Mr. Alteri. I am always cautious, because I am a huge fan
of the Clean Air Act. It has been successful legislation. But I
think you need to look at it really thoroughly.
I think the way we handle non-attainment areas, and
basically we have a provision where we would withhold
transportation dollars if you don't achieve attainment within a
certain time period, well, that is counter-intuitive to
improving air quality in areas like Cincinnati, Ohio, Los
Angeles, where you need the infrastructure dollars to open up
some corridors, Washington, DC. All the non-attainment areas in
the northeast are up I-95.
So I think that is one area where you want to be thoughtful
and not restrict people from transportation improvements.
Senator Barrasso. Senator Carper.
Senator Carper. Sometimes we have hearings like this, and
on other committees, too, where there are smart people on very
different sides of an issue, and I will ask them to help the
Committee think through where a principle of compromise lies.
I would ask, Mr. Walke, where do you think a principle of
compromise lies in this area? One that is respectful of human
health, clean air, and doing better. Thanks.
Mr. Walke. Sure. We should be encouraging true energy
efficiency improvements that cause us to burn less fuel, save
industries money, reduce carbon pollution, and reduce air
pollution. That is true efficiency. There are improvements that
could be made to New Source Review to improve all of those
fronts.
What this bill does, however, is allow air pollution to
increase, to allow fuel consumption to increase, to allow
carbon pollution to increase, while avoiding the installation
of modern air pollution controls. That is not a reasonable
compromise.
It is something that the Bush EPA rejected under Mr.
Holmstead. It is something that the Bush EPA Enforcement Office
criticized heavily in materials that I submitted to this
record, showing that plants across the country were illegally
evading pollution controls and increasing pollution by
thousands of tons.
That is not the right answer. If we want real energy
efficiency improvements overall, carbon pollution should go
down overall, air pollution should go down, and businesses and
can and will become more efficient.
Senator Carper. Mr. Holmstead, same question, please.
Mr. Holmstead. I am encouraged by what John says. If there
is a way to define, the way he defined energy efficiency
improvements, or efficiency improvements, if those things could
be, if you could know that those things wouldn't trigger NSR,
let's work out a real definition of energy efficiency
improvement. I think that would be a big step in the right
direction. I think that would be a great idea. And I appreciate
the opportunity to have that conversation with Mr. Walke.
Senator Carper. All right.
Are you from Kentucky?
Mr. Alteri. I am, born and raised.
Senator Carper. Kentucky was in the news last night. My
sister lives there.
Mr. Alteri. We beat Michigan State.
Senator Carper. There you go.
[Laughter.]
Mr. Alteri. So I think both of these gentlemen touched on
it; if a boiler or an electric generating unit replaces a
turbine, and it goes from an efficiency of 38 percent to 43
percent, that should be celebrated by everybody.
However, by increasing that efficiency, it is going to
dispatch more often. Then that goes to the annual increase in
emissions. However, you are still making less pollution per
megawatt hour.
Considering that we are a coal State, and affordable
electricity, reliable electricity, is a focus, I think it only
makes sense to improve the efficiency at those existing coal
fired generating units.
Senator Carper. Mr. Walke, do you want to respond to that?
Mr. Walke. Yes, I touched upon this in my opening
statement. Pollution going down per megawatt doesn't help
people who are breathing dirtier air, it doesn't help that
asthmatic child. That is not an improvement to the system; that
is a severe weakening of the rules. It is exactly the type of
thing that New Source Review is supposed to guard against.
Mr. Holmstead said something very interesting in responding
to his question from Senator Barrasso. He said that allowances
keep pollution down in the power sector. Now, allowances may
not be a term familiar to all the Senators, but it is a
pollution credit. In English, it is the permission to pollute.
In a cap and trade program, you buy and sell allowances,
you buy and sell permission to pollute. Allowances don't keep
pollution down from the plant that bought the allowance.
Allowances allow that plant to increase pollution.
There was a plant in Texas last year that increased its
emissions by over 20,000 tons, by 54 percent over the year
before. Why? It had bought allowances. Pollution got worse
around that Texas town and downwind from that plant by 20,000
tons. Allowances don't keep pollution down.
Mr. Holmstead. John, the NSR program didn't stop that,
either. The NSR program doesn't stop plants from increasing
their hours of operation. And you talked about allowances,
there is a limit on the number of allowances. It is a limit on
pollution.
Mr. Walke. If plants modify, and this bill modifies the
definition of modification, and they undertake----
Mr. Holmstead. But that facility you are talking about had
no modification.
Senator Barrasso. Senator Carper, you have the floor.
Senator Carper. I actually welcome the conversation, and
probably would welcome it in other forums as well.
One of the concerns that was raised about the legislation
is that it doesn't address pollution from coal fired utilities,
but also from thousands of other emitters.
Mr. Walke, would you speak to that just briefly, please?
Mr. Walke. Yes, sir. The Trump EPA rollback would just
allow power plants to increase pollution. But this bill would
apply to every major industrial facility in the United States.
There are thousands and thousands and thousands of them that
this bill would grant permission to increase harmful air
pollution. It is hazardous waste incinerators, oil refineries,
chemical plants, cement plants, you name it.
So that is what informs my statement, the top of my oral
statement, that this is the most harmful Clean Air bill that
would worsen air pollution more than any I have seen before.
We don't need to be going backward. This is dangerous air
pollution. We know that it is deadly. We know that it causes
heart attacks and strokes and asthma attacks.
Senator Carper. I am going to ask you to hold it right
there. Thank you.
Just a yes or no, the point that Mr. Walke is trying to
make is that this goes way, way, way beyond the number of
utilities that we are especially concerned about to touch on
thousands of other emitters. Do you think that might be an area
of some agreement?
Mr. Holmstead. Look, I think if we could do something for
power plants, and if that was a compromise that we could reach,
that would be great. I am not--I support the idea that you
would have the same approach for other plants, because I don't
think they would increase their pollution. What we are talking
about is hours of operation here; hours of operation is
determined by demand for product that goes up and down.
I don't think there would be an increase in pollution. But
in the spirit of trying to find a compromise, if we could do it
at least for power plants, that would be a step in the right
direction.
Senator Carper. All right, thank you both. Thank you all
very much.
Senator Barrasso. Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman. Let me help
Senator Carper out with his statistics. We have looked, and you
have appeared before this Committee seven times, just during
the years that I chaired the Committee. So maybe you weren't
too far off. You are experienced here.
Let me just mention that, first of all, I thank the
Chairman for hosting this hearing on the GAIN Act, important
legislation we need to streamline regulatory overreach.
Now, regulatory overreach goes far beyond just the subject
that we are talking about today. In fact, the fact that we have
arguably the best economy that we have had in maybe even in my
lifetime, two things precipitated that. One was that we
lowered--the reduction, but also regulatory relief.
So this is something that we are very sensitive to. I can
remember during the 4 years that you had the Office of Air and
Radiation, we addressed this.
Let me ask you, Mr. Holmstead, we haven't really talked
about job creation, which is one of the things that is supposed
to be accomplished with the New Source Review. So respond to
that, and then also how the GAIN Act reforms help job growth.
Mr. Holmstead. I think the best indication that this would
be good for jobs comes from support from the labor unions. You
mentioned, I think, that there were seven labor unions, and it
is mostly the building trades that are supportive of this,
because they do see the projects that they would be working on
that companies don't do because of NSR. And so I think that in
and of itself is pretty good evidence.
I think it is very hard to come up with numbers. But
because you would reduce the threat of NSR, I think you would
certainly unleash a lot of economic activity, making plants
more efficient.
Senator Inhofe. Mr. Alteri, I came over to introduce myself
to you so I could pronounce your name correctly, and I still
haven't done it.
[Laughter.]
Senator Inhofe. But anyway, as you know, the States are the
primary regulator of the New Source Review program. Your
testimony highlighted that since 2008, Kentucky has issued more
than 25 New Source Review permits.
But during that time, it appears you have also seen the
program used by activists to delay important projects that
would improve both environmental quality and modernization of
facilities.
Mr. Alteri, would you agree that it is possible to protect
air quality while also streamlining the NSR permitting? And
would you agree that the GAIN Act balances those interests?
Mr. Alteri. I think it does. But I think during this
conversation, it has raised issues relative to who else it
would affect. But I think if you have an opportunity to improve
energy efficiency at existing coal fired units, I think you do
have the opportunity to reduce pollution without triggering NSR
and costly litigation.
Senator Inhofe. That is good.
Thank you, Mr. Chairman.
Mr. Chairman, I might also add, we are passing around
something that can be signed by some of the members for an
American hero that Senator Carper had called to our attention.
I will help pass that around.
Senator Carper. Thank you.
Senator Barrasso. Thanks, Senator Inhofe.
Senator Gillibrand.
Senator Gillibrand. Welcome.
The Trump administration's EPA has focused on repealing and
replacing Clean Air laws with weaker standards. These rollbacks
mean more, not less, air pollution falling upon communities
throughout New York and the Adirondacks from coal fired power
plants in the Midwest.
New York's 6 million acre Adirondack Park, its waters,
forests, and communities have suffered the worst acid rain
damage in the United States, including the chemical
sterilization of hundreds of high elevation lakes and ponds.
A review of national emissions data provided by the USEPA
and compiled by the Adirondack Council shows that between 2017
and 2018, emissions of sulfur dioxide increased by more than a
thousand tons at each of the 16 coal fired power plants in 9
States whose emissions create acid rain and smog in New York.
First, Mr. Walke, what types of impacts would the GAIN Act
have on air pollution levels in downwind States like New York?
Mr. Walke. Thank you, Senator. As I testified, this bill
would allow very significant air pollution increases. We know
that the pollution is carried by wind to downwind States. The
Trump administration has denied a pleading request from New
York to protect the air quality in New York from upwind power
plants.
My testimony has at the back maps of the really shocking,
stunning number of coal fired power plants in this country
today that still lack modern air pollution controls like
scrubbers and those for smog. Those plants have been
grandfathered, in many cases since the 1940s and 1950s. And it
is in their economic interest to run longer and harder to
increase air pollution and to continue to evade controls. That
hurts downwind States like New York and Delaware and Maryland.
It hurts the Adirondacks.
This bill would make air pollution worse, not better.
Senator Gillibrand. If enacted, will residents of New York
have to worry about more frequent acid rain events in their
communities?
Mr. Walke. Yes, and the reason is that this bill increases
long term annual air pollution levels of nitrogen oxides and
sulfur dioxide, which contribute to and cause acid rain, as
well as a number of chronic health problems from long term
exposure to these pollutants, including cardiovascular and
respiratory problems, and even premature death.
Senator Gillibrand. I would like to issue a standing
invitation to my Republican colleagues on this Committee to
spend some time with me in the Adirondacks, so you can see why
these impacts would be horrible for that reason.
Mr. Walke, as you know, ground level ozone forms on hot,
sunny days when pollution from cars, power plants, consumer
products, and other sources react with sunlight.
Ozone is most likely to reach harmful levels in urban areas
on hot, sunny days, and has known health effects. People most
at risk from breathing air containing ozone include people with
asthma, children, older Americans, and people who are active
outdoors, especially outdoor workers.
What effect does increased pollution from power plants have
on ozone formation and other air quality problems in States
that are downwind of the emitting source?
Mr. Walke. Coal fired power plants are one of the largest
sources in the United States of a smog forming pollutant called
nitrogen oxides, which in addition to contributing to acid
rain, causes respiratory problems and even premature deaths, we
know from the latest literature on ozone.
We know that the downwind States are suffering from air
pollution that they cannot control from big power plants in the
Midwest and upwind in the southeast as well.
Another dirty little secret of the Clean Air Act, I am
afraid, is that even plants that are equipped with these
controls are allowed to turn them off after they are charging
customers for these controls that they are allowed not to
operate, including on summer days when there are very high
ozone levels that hurt New Yorkers.
Senator Gillibrand. Can you expand on the public health
implications for people in States like New York?
Mr. Walke. Yes. Again, we know that some of these types of
air pollution, fine particle pollution in particular, are
unsafe at any level. So that even in areas that are nominally
meeting these standards, people are dying, people are suffering
heart attacks and strokes. Parts of New York have some of the
highest asthma rates of anywhere in the country, which affects
children in particular.
Then of course, we have a lot of very toxic pollutants like
mercury and lead that come from these power plants that are
landing in waterways. It is a full suite of health problems
that Americans are still suffering, especially from these
large, uncontrolled and poorly controlled coal plants.
Senator Gillibrand. Thank you, Mr. Chairman.
Senator Barrasso. Thank you so very much.
Senator Braun.
Senator Braun. Thank you, Mr. Chair.
No. 1, I think the discussion we are having is pertinent in
the sense that next to the cost of health care needing to be
fixed in an industry that is digging in and fighting almost
everything we are doing to try to help them fix themselves, I
see a pattern of proactivity and interest among the industry.
I think this is a point that can be confusing the most, in
the sense of, if you become more efficient, isn't it close to a
zero sum game in the sense that in this one plant, if you are
more efficient--and this is directed at Mr. Holmstead first,
then I would like Mr. Walke's response.
Wouldn't you be at least holding your own in terms of
emissions? Because demand has been relatively flat, given how
fast the economy has grown for electricity anyway.
So I know that if you would run it more, that particular
plant would be emitting more. But if you are running less
efficient plants less, isn't it close to a zero sum game when
it comes to emissions?
Mr. Holmstead. Thank you for making that point. As you say,
the amount, the number of hours these plants run depends on the
demand for electricity, which has been very flat. So if one
plant becomes more efficient and runs more hours, that means
that another plant is going to run fewer hours. You would have
to look at the emission rate of each plant to see. But in
general, you would expect an overall reduction as you start to
shift generation to more efficient plants.
Senator Braun. Mr. Walke.
Mr. Walke. Senator Braun, that could be an area of
reasonable compromise. If a plant is going to keep its
production flat, there are mechanisms in the law where it can
agree to do so, and it won't increase dangerous air pollution.
That is a reasonable outcome.
If it doesn't increase dangerous air pollution, it won't
require pollution controls, so it can become more efficient, as
you posited. But it can also fail to increase dangerous
pollution.
Unfortunately, that is not what this bill does. So if there
was interest on your part in changing the approach in the bill
to make clear that plants can become more efficient and not
increase dangerous air pollution by agreeing to limits to the
demand that you acknowledge has been flat, that is a very
sensible outcome.
Senator Braun. I think that might occur somewhat naturally,
even without a provision. Because I don't see utilities
producing more than what the demand is. That has been
relatively flat. So maybe that is something that would be a
pleasant outcome without needing a requirement.
Next question. Regardless of what we do here, and anything
impacting climate in the U.S., what do you see, and any of the
panelists, feel free to jump in, what impact does this have on
the world in terms of our impact and percentage, if India and
China keep on the trajectory they are on?
So if we do things that cost a lot in the present, which is
the biggest variable in any financial analysis, what you spend
today, anything that you accrue in terms of benefits is
somewhat of an estimate.
What is the best kind of number out there of how this
impacts what happens around the world? Because we breathe an
atmosphere that diffuses across the world.
Mr. Alteri. In Kentucky, we are a manufacturing State. So
if you drive up electric prices artificially, or through these
regulations, then you would end up shifting that demand, that
manufacturing to countries that do not have the environmental
laws that we have. We have had significant emission reductions.
I think you would lose that gain if you end up shifting jobs to
even Mexico.
Mr. Walke. Senator, I would make two points. In the mid-
1970s, the United States was a world leader in removing lead
from gasoline. That saved a tremendous number of lives and
avoided misery in this country.
That U.S. leadership spread to countries around the globe.
And now we don't have lead in gasoline in most countries in the
world. That is the type of American leadership that we need to
confront the climate crisis.
You are correct, if India and China do not reduce their
emissions, then we are in big trouble. But America needs to get
its house in order first, and address the problems that we have
control over, and to negotiate and to work with other
countries. That is what the Paris Climate Accord was trying to
do, and we know that this Administration has stepped away from
that.
I support your call for American leadership and exporting
American ingenuity to countries around the world.
Senator Braun. Very good. I do want to announce that I am
the first Republican to join the bipartisan Climate Caucus. We
now have three or four others as well. I think this
encapsulizes really in a good fashion the discussion.
I believe if we are not having it, we have seen a little
bit of commonality in terms of even the NSR and other
discussion of how this is a global issue as well. I believe
that it is going to be the driving issue over the next couple
of decades. So I am glad to see folks of different points of
view still seem to be zeroing in on the same outcome.
Thank you.
Senator Barrasso. Thank you, Senator Braun.
Senator Van Hollen.
Senator Van Hollen. Thank you, Mr. Chairman.
Thank all of you for your testimony today.
Senator Cardin and I are both from the State of Maryland.
Maryland is a downwind State. We suffer from some of the same
issues you heard from Senator Gillibrand.
In fact, in November 2016, Maryland filed a petition
concerning air pollution generated by 36 power plants located
in Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia.
The point of that petition was that that pollution coming from
those States was making it harder for Maryland to meet its air
quality goals, and causing more health risks in the State of
Maryland.
So we filed a petition with the EPA in September of last
year. EPA denied Maryland's good neighbor petition. That has
been appealed by our attorney general. So this conversation is
important to Maryland, like other States as well.
Mr. Walke, I am trying to understand one thing. I
understand that the NSR only applies to existing sources if a
facility wants to make changes that will significantly increase
its aggregate annual pollution. Is that right?
Mr. Walke. Correct.
Senator Van Hollen. So maybe I misunderstood you, Mr.
Holmstead. I thought I heard you say that you would bet Mr.
Walke that these changes would not increase the annual
emissions at a plant that took advantage of the changes you are
proposing. Did I misunderstand you?
Mr. Holmstead. What I said is, power plant emissions in the
United States would not increase. Total power plant emissions
would continue to decrease. At an individual power plant,
emissions increase and decrease all the time, every year they
increase and decrease.
Senator Van Hollen. Right.
But the law here only triggers if there is a--let me just
make sure I understand. As I understand it, this law only
applies if air pollution generated at the particular plant in
question will increase. Isn't that true, just yes or no? Is
that true?
Mr. Holmstead. No.
Senator Van Hollen. It is not true?
Mr. Holmstead. It is more complicated.
Senator Van Hollen. Mr. Walke, could you----
Mr. Holmstead. If you would let me answer.
Senator Van Hollen. I only have a certain amount of time.
You said no; I want to hear what Mr. Walke has to say.
Mr. Walke. The answer is absolutely yes, absolutely yes.
Mr. Holmstead. How many cases are there were there has been
an NSR enforcement action against a plant that has reduced its
emissions?
Senator Barrasso. Senator Van Hollen----
Senator Van Hollen. Mr. Walke----
[Simultaneous conversations.]
Senator Barrasso. We will have a second round.
Senator Van Hollen. Mr. Walke, could you explain your
answer to that question?
Mr. Walke. Yes, the law says exactly what you said, Senator
Van Hollen, only if a change in a facility increases emissions
significantly in tons per year from that plant.
What Jeff's answer reveals is that on balance across the
entire United States, the power sector's pollution will go
down. That is no consolation to someone living next to a plant
that has its pollution increase by 10,000 tons per year.
Senator Van Hollen. And it is no consolation, frankly, to
Maryland, if the plants in question are the plants that are
causing pollution to drift to Maryland and impact air quality
in Maryland.
Mr. Walke. That is correct.
Senator Van Hollen. That is what I thought, which is why I
thought the bet was a little strange; you are just betting that
overall pollution from power plants will go down in the United
States. There are lots of reasons for that. But the whole
purpose of this law is directed at the particular power plant.
And as I understood Mr. Walke, if you want to do a deal
with him where you can guarantee in advance that another power
plant may be owned by the same company is going to reduce its
air pollution by more than compensated, maybe that is a
discussion we should have.
But let me just, I understood you earlier, Mr. Walke, to
point out that, trying to frame this bill as a clarification of
existing law obviously flies in the face of the facts, right?
If EPA thought--this current EPA, the Trump administration EPA,
thought that this was compliant with the law, wouldn't they
have included this in their most recent revisions to the Obama
Power Plant Rule?
Mr. Walke. Yes, sir. They clearly failed to finalize that
rule because they were getting advice from lawyers at EPA and
the Justice Department that it was severely problematic.
The first half of this bill essentially kind of replicates
what the Trump EPA is doing, and has just sentence after
sentence after sentence that Congress is adding to the law to
make clear that you can only change the law by amending the
law.
The second half of this bill is frankly so extreme by
allowing unlimited pollution increases in the name of
reliability that not even the Trump administration was
audacious enough to claim that that was allowed under current
law.
Yet this bill calls that too a clarification of the law.
Frankly, it doesn't pass the red face test.
Senator Van Hollen. Thank you.
Thank you, Mr. Chairman.
Senator Barrasso. Thank you, Senator Van Hollen.
Senator Capito.
Senator Capito. Thank you, Mr. Chairman, thank all of you
for being here.
Mr. Holmstead, I am going to give you a chance to respond,
because I understand it is more complicated. But I want to say
a few things before I turn the floor over to you.
First of all, I am a cosponsor of the GAIN Act. I think
because we have a bipartisan--we have several bipartisan pieces
of legislation here that are incenting carbon capture and
utilization with the dual purposes of preserving economy and
also cleaning the environment at the same time.
I was going to ask you to respond to what Mr. Walke said.
But the way I understand this is, if you add on and make a
significant investment with the goal of reducing your
emissions, and you are more efficient, that it would stand to
reason that you would be more economical, and so your plant
would be running more, more time, putting out more production.
Therefore, maybe your per unit emission is less, but your
overall emission may be more, because you are running more
efficiently.
Wouldn't we rather have, since we are, like the Senator
from Indiana said, you are only going to go to a certain
demand, wouldn't we rather have the more efficient, cleaner
plants going than having the less efficient plants keeping
their steady production numbers, but adding to the emission
count at the same time?
Am I understanding that right, and if you could----
Mr. Holmstead. No, no, absolutely. You have explained it
better perhaps than I did, and that is yes, a more efficient
plant would likely run more hours. But that would mean that
other, less efficient plants run fewer hours. And so on an
overall basis, you would expect pollution to decrease.
Now, as I stated before, plants increase and decrease their
annual emissions all the time, based on demand, based on
whether other plants in the area are out of service. And the
NSR program doesn't stop that. But we have all kinds of other
laws in place to make sure that those variations we see on a
year to year basis don't adversely affect public health.
Senator Capito. OK. Another question I have, in your
testimony, and this is conflicting, I think, information that
we have heard in the testimony. You say emission reductions
have dramatically improved the quality of the air that we
breathe. Nobody is pro-pollution. Let's take that off the
table. But according to the EPA's Air Trends Report, since
1990, national concentrations of air pollutants have improved
89 percent for SOX, 80 percent for lead, 74 percent
for CO2, and 57 for NOX and 21 percent
for ozone.
So we are trending down. Is that a correct interpretation
of what your testimony is?
Mr. Holmstead. Yes, no, absolutely. Air quality
improvements over the last 30 years have been pretty dramatic
throughout the country. It has been really a remarkable
achievement that is attributable to the Clean Air Act.
Senator Capito. Well, as for one of those States that the
Senator from Maryland is, I guess he is downwind from West
Virginia, and he is lucky to be there.
[Laughter.]
Senator Capito. But this is an argument, obviously, also
being from a coal producing State.
So in order to get to that goal of keeping our coal miners
working at least efficiently to get to that CCU goal, we have
got to keep moving forward, I think, with encouraging the
investments that are going to keep it, make it more efficient,
No. 1, well, maybe not No. 1, they are tied. More efficient and
more environmentally correct, and improving that and lowering
the emissions. So that to me is the whole point of the GAIN
Act.
I want to ask Mr. Alteri, from Kentucky, you highlight the
fact that Kentucky was repeatedly sued regarding permits
touched off by the NSR program over the past decade. Do you
feel that uncertainty about the convoluted way that the NSR
regulations and guidance are drafted is contributing to these
lawsuits?
Mr. Alteri. I think implementation of the rules and I think
it has been highlighted. So if you were to replace a turbine
and then you run the unit more, then you are going to increase
more than 40 tons per year, and that would trigger NSR. And it
is that improvement in energy efficiency of the turbines that
has been the subject of the litigation between these two.
Senator Capito. But at the same time, while you are
improving the efficiency of the turbine, I am going to assume
that you are cutting emissions at the same time.
Mr. Alteri. Per megawatt hour, yes, ma'am.
Senator Capito. Yes, all right.
Thank you, Mr. Chair.
Senator Barrasso. Thank you.
Senator Cardin.
Senator Cardin. Thank you, Mr. Chairman.
I also appreciate all the panelists and this hearing.
Senator Capito, our constituents breathe exactly the same
air, our border is so intertwined. Sometimes I don't know
whether I am in West Virginia or Maryland. So we share a
similar goal.
I was intrigued by Senator Braun's questioning on trying to
reach some agreement here. I think the confusion, as I
understand it, is that yes, you can make an individual power
plant more efficient as far as its production and pollution.
But if the total mix in the region is increasing because that
plant is not doing what it should be doing, the overall impact
is dirtier air. That is how I understand the dilemma we are in.
So perhaps we have something going on an individual plan if
it doesn't increase its capacity but reduces its emissions,
that may be an area where we could reach some type of an
accord, if I understand what Mr. Walke is saying.
I want to follow up, though, on the point that Senator Van
Hollen made. That is, we are a downwind State, Maryland, there
is no question about it. The Clean Air Act gives us the
opportunity to challenge when there is pollution coming from a
different State, it affects our ability to comply with the
National Ambient Air Quality Standards.
So my concern, and I want to get, Mr. Walke, your view on
this, is that this legislation would make it more difficult for
Maryland to challenge another State's activities in regard to
Maryland's meeting our air quality standards. Is that a concern
I should have?
Mr. Walke. You should, because that is completely correct.
This bill would authorize those pollution increases, and say
they are just fine to occur under the law. Maryland is helpless
to control that increased air pollution that is occurring in
Indiana or another upwind State.
So the burden that falls on Maryland is to crack down on
pollution sources inside Maryland's borders that are not
responsible for the problem.
Maryland has turned to the EPA to plead for help, and they
have consistently denied those requests. Now we have two court
decisions just within the past 2 months that have struck down
the Trump administration's approach to failing to protect
downwind States. They have denied Maryland's petition based
upon one of those faulty legal defenses that the courts have
said is insufficient.
So we need leadership that will protect downwind States,
because the current EPA is not doing so. The Trump EPA rollback
will make things much worse, and this bill would as well.
Senator Cardin. I appreciate that answer. We do have our
challenges, there is no question, with the regulatory
activities of the EPA. Giving legal justification to some of
this through this bill will make it, as you say, more
challenging.
I want to get to a statement that you made that really has
me concerned. I looked at your map, I looked at all the coal
burning plants. I saw how they are surrounding my State. Then
you said many still don't have the scrubbers and the modern
technology to make them as efficient as possible. You said that
this legislation may even make it more challenging for those
types of improvements to be made.
Can you just elaborate as to why you believe we haven't
made more progress in cleaning up those plants?
Mr. Walke. Sure. When Congress adopted this New Source
Review program in 1977, older plants before that date were
grandfathered. And they were only required to install modern
pollution controls when they undertook modifications. That is
the subject of this bill.
Not new plants; there is agreement that new plants have to
install controls, and I think some of the challenges that Sean
may have been facing were from challenges at new plants. That
is not what this bill is about.
So what this bill does is say to those grandfathered power
plants that still lack controls after being built in the 1930s,
1940s, 1950s, and 1960s, that you can continue to run forever
without installing modern pollution controls. You can overhaul
your facility and extend its life by 20, 30, 40 years without
ever installing controls. That to me is just indefensible in
America in 2019.
Then the bill extends it to every industrial facility in
the United States. So again, it is going to make air quality
worse and air pollution problems worse, not just in downwind
States, but in the States where these grandfathered plants are
continuing to operate uncontrolled.
Senator Cardin. Thank you.
Thank you, Mr. Chairman.
Senator Barrasso. Thank you.
Senator Markey.
Senator Markey. Thank you, Mr. Chairman, very much.
The Clean Air Act has been cleaning up America's air since
1970, and we have cut down on dangerous toxins like lead and
mercury and particulates in the air, improving the health of
millions of people across the Nation.
The Clean Air Act's New Source Review program is key to
improving our air quality standards. Any attempts to weaken the
New Source Review pose a major threat to public health, but
would be a big win for dirty coal and energy facilities that
want to be able to put as much pollution into the air as they
want.
Mr. Walke, does the New Source Review program successfully
help to control emissions increases that threaten the health of
communities around sources like power plants?
Mr. Walke. It does. I want to make a point that the role of
the New Source Review plays in the Clean Air Act is to serve as
a sensible constraint on runaway pollution increases. If we
can't agree that industry should not be able to increase air
pollution wildly, then that is a problem.
So New Source Review, I think of it like an iceberg. Seven-
eighths of an iceberg is below the surface. Seven-eighths of
the benefits of New Source Review are preventing runaway
pollution increases. That is what this bill is trying to
attack.
Senator Markey. I agree with you. Unfortunately, the
Growing American Innovation Now Act, the GAIN Act, would allow
facilities to emit more dangerous pollutants and toxins, carbon
monoxide, sulfur dioxide, even mercury and arsenic.
Mr. Walke, is it true that under the GAIN Act, a facility
could essentially have an unlimited license to pollute?
Mr. Walke. It is, under this bill. Mr. Holmstead is correct
that there may be constraints on unlimited emissions increases
in some cases. But there is nothing in this bill that limits
air pollution at all, not even a comma.
Senator Markey. So I was trying to think of an analogy. Say
you smoke one cigarette per day. So you smoke 365 cigarettes a
year. And your doctor says, well, that is OK, one a day.
Cigarettes are bad, but keep it to one a day, your health might
be OK.
But you are physically capable of smoking 10 cigarettes an
hour. Under the GAIN Act rules, applied to cigarettes, you
would be able to smoke 10 cigarettes an hour, 365 days a year,
87,600 cigarettes in 1 year.
Mr. Walke. That is correct.
Senator Markey. Not 365, but 87,600 cigarettes, before your
doctor would be able to tell you to stop, the doctor here being
the EPA. So if you can smoke 87,600 cigarettes a year, it is
probably going to hurt your health.
Mr. Walke. That is right.
Senator Markey. It is probably going to hurt your lungs.
Mr. Holmstead. I will agree with that one.
Senator Markey. Thank you, Jeff. And that is really what
the problem is, that it just opens up this huge loophole.
Unfortunately, smokers need some limits, because we know that
it causes cancer. And the children of America, who could
contract asthma; pregnant women, they need protections as well.
So this just blows open all the protections.
The analogy with cigarettes is something that, from my
perspective, is just so easy to understand, that instead it is
just going to be going out of smokestacks into the lungs of
people all across our country. And the bill would authorize
that massive pollution increase.
We need a cleaner air future, not to go back in time. Four
out of 10 Americans are living with unhealthy air right now.
Minority and low income communities are disproportionately
affected by air pollution. African Americans have a 54 percent
higher health burden in areas affected by air emissions, like
soot. The Trump administration's EPA has been hard at work
trying to dismantle air quality protections across the board.
Mr. Walke, again, do you agree that the GAIN Act would mean
that both new and old facilities, coal plants and other power
plants, could emit more life threatening pollution?
Mr. Walke. Absolutely. As Senator Van Hollen led Mr.
Holmstead to acknowledge, individual power plants, individual
facilities that number in the thousands across the United
States would be allowed to increase pollution under this bill.
Senator Markey. So let me ask you one quick question, Mr.
Walke. Massachusetts doesn't have any remaining coal plants
operating. You testified to the downwind impacts of the GAIN
Act in New York in response to Senator Gillibrand. Can you tell
me what the impact of the GAIN Act would be on the air quality
of residents of the Commonwealth of Massachusetts?
Mr. Walke. Senator, if anything, it would be worse. New
England, Maine, Massachusetts, are often referred to as the end
of the tailpipe in the United States. So the wind patterns are
carrying dangerous coal plant pollution from the southeast and
the Midwest directly into the Commonwealth's back yard.
Senator Markey. Right. So if we weaken the Clean Air Act
with legislation like the GAIN Act, existing facilities in
every State could use loopholes to spew out 20,000 tons per
year of nitric oxides, 200 times what is allowed for new
facilities, and that pollution would be allowed in
Massachusetts and would travel downwind to the Commonwealth of
Massachusetts from other places, just blowing the smoke,
blowing the smoke like a father smoking a cigar in the front
seat, and it is just blowing to the three kids sitting in the
back seat, but the father is going, Hey, I am not responsible
for the impact on kids, in the car with the windows up.
Well, that is what happens with the wind blowing toward the
East Coast, toward Massachusetts and other States. We are the
ones that have to inhale this dangerous and unnecessarily
permissive new law that is being proposed.
So I thank you, Mr. Chairman, thank you for the opportunity
to be able to question the witnesses.
Senator Barrasso. Thank you very much.
Senator Cramer.
Senator Cramer. Thank you, Mr. Chair, and thanks to all of
you for being here today.
I would ask your forgiveness for my tardiness. I preside
over the Senate Wednesday mornings. I thought it seemed like a
good idea when I picked that time. Unfortunately, I miss the
first hour of some really good hearings. But thank you all for
being here.
Absent that first hour, I am just going to throw a couple
things out, maybe, to facilitate some discussion, if that is
OK.
I think some of you know, maybe all of you know that I was
a regulator for 10 years in North Dakota on the Public Service
Commission where we had very broad as well as very deep
regulatory authority over lots of things, not just economics,
but environmental and siting and all of that.
One of the challenges, one of my frustrations with NSR has
always been what seems to me to be a perverse incentive, away
from innovation that would actually be applied, especially to
existing facilities, in the form of modifications that would
actually be cleaner, but the incentive is to not do it, as per
the NSR. I am sure you have discussed some of that.
But let me just throw it out, along with that frustration.
There has to be some bipartisan, wide ranging solutions that
don't perversely incent the wrong activity. Assuming, and I
think we can, that we all support cleaner energy development,
and lowering of emissions, particularly pollutants of all
types.
Do any of you or all of you have just an idea for us,
whether it is the GAIN Act, and I support the GAIN Act; in fact
I will be a cosponsor of it, to try and bring clearer
definition to terms? But is there something we can be doing
together that Senator Carper and I can agree on? Because we
tend to agree more often than people might think.
What is the middle ground? What are some of your thoughts
that anybody could share with us as to how we might be able to
get to the goal that we all share? Is that fair?
Mr. Alteri. Senator, in my testimony, I offered to narrow
the scope even further to just existing coal fired generating
units. That is a known universe; it is not going to grow. If
they were to add a new unit at that existing plant, it would go
through NSR.
And then do not ignore how beneficial the Cross-State Air
Pollution Rule is. We are talking ancient history when we are
talking about tailpipes and downwind States and this thing.
Mobile sources are your problem, marine vessels are your
problem in the northeast.
Kentucky, I don't know that air quality phenomenon that
allows emissions from Kentucky to leap over West Virginia and
then fall down in one concentrated are in Hartford, Maryland. I
just don't know how that works. I really think that marine
vessels, mobile sources, peak demand generators that are
operated on high ozone days, those are the focus, and maybe we
should focus in that arena.
But as far as narrowing the scope of this legislation, you
can do it with existing sources. But do not ignore the great
benefits. The Cross-State Air Pollution Rule, we talked about
allowing areas that are more concentrated in pollutants.
Well, the 2017 update narrowed that to States. Those
allowances are narrowed to the State. So Kentucky cannot emit
more by buying allowances from Georgia or Indiana or somewhere
else. That is old, ancient history.
Senator Cramer. Mr. Holmstead, I know you are very familiar
with Petra Nova, I think you referenced it in your testimony as
well. That is one that we are fairly familiar with up in North
Dakota as well. Is there a way to do this that we all----
Mr. Holmstead. So you raise an interesting point, that if
we really do want coal fired power plants to install carbon
capture and sequestration, coming up with some way to help them
do that without having these regulatory hurdles, burdens like
NSR, I think would be a good thing. And maybe that is an area
where we could come up with some sort of an increase, because
everybody, I believe, supports that kind of an approach. I know
from the Petra Nova experience that NSR was a huge impediment.
The other thing I would offer, and we talked a little bit
about this before you were able to get here, is defining energy
efficiency improvements in a way that everybody would be
comfortable with.
Boy, I just don't know why you would want to have this
regulatory hurdle for people who want to improve the efficiency
of their facilities. Sean mentioned an issue that has come up
in a number of cases, that is, you can now buy more efficient
turbine blades for coal fired power plants. But if you do, you
trigger NSR.
Senator Cramer. Yes.
Mr. Holmstead. So the cost and the expense of triggering
NSR, no one wants to go through that, and as a result, you have
people passing up these energy efficiency opportunities.
Senator Cramer. I know my time is running out, but I would
feel incomplete if I didn't hear from you, John.
Mr. Walke. Thank you, Senator Cramer. That is very kind of
you.
Senator, I don't have a specific idea, but I think most
Americans think that there is a pretty simple, common sense
question that should be answered: Will any reform let plants
pollute more after the reform than they did before? And if the
answer to that is yes, then maybe we should look for other
solutions.
We are in agreement that greater efficiency is a good
thing, less pollution, less carbon pollution is a good thing.
But I think we need to look elsewhere for solutions, since the
answers at this hearing are so clear today that this bill will
let plants pollute more. So maybe that is just not the solution
that we need to try to find a compromise around.
Senator Cramer. Thank you.
Thank you, Mr. Chairman.
Senator Barrasso. Thank you very much.
Senator Carper.
Senator Carper. I thank you.
Before my colleague is going to have to leave, I circulated
earlier today a card to send to an Army Ranger who was almost
killed in Afghanistan 2 months ago today. If you would have a
minute to sign that before you go, that would be great. Thank
you.
Mr. Chairman, as I mentioned to you, I have three unanimous
consent requests to make here. I will just do it right now, if
I may.
I would like to submit for the record data from this
Administration that shows air pollution, including carbon
pollution and energy consumption, in our country are
increasing, not decreasing.
Senator Barrasso. Without objection.
[The referenced information follows:]
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Senator Carper. The second one, I would like to ask
unanimous consent to submit for the record a letter opposing
the GAIN Act by the Clean Air Task Force and the Sierra Club.
The organizations caution that if this bill were enacted, it
would, and I quote their letter, ``allow enormous increases in
air pollution, thereby seriously endangering public health and
the environment,'' and completely eviscerating the Clean Air
Act New Source Review.
Senator Barrasso. Without objection.
Senator Carper. Thank you, Mr. Chairman.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. And one more, this is a broader request. I
ask unanimous consent to submit for the record several
materials, including studies, reports, letters, and more from
the renowned public health organizations of former EPA
officials that show how the GAIN Act and previous and current
proposals by Congress and EPA actually weaken the Clean Air Act
by attempting to completely restructure New Source Review,
ultimately harming our health and the environment. That was a
long sentence.
Senator Barrasso. Without objection.
[The referenced information follows:]
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Senator Carper. Thank you.
A question, if I could; again, our thanks to all of you for
being here, and some of you who have been here many times, for
being here today.
Mr. Walke, if I could, Mr. Holmstead's testimony also says
that the test for an increase in emissions would be the same
for New Source Review as it is for the Clean Air Act's Section
111 New Source Performance Standards provision.
Would you take a moment and speak about the differences
between these two programs, and describe why Congress found it
necessary to add the New Source Review program in the Clean Air
Act Amendments of 1977?
Mr. Walke. Yes, Senator Carper. The New Source performance
standard program that you are referring to was and is viewed to
be unsuccessful at reducing pollution or even constraining
pollution from individual plants. So Congress added the New
Source Review safeguards in 1977 to complement the NSPS
program.
The New Source Performance Standard program is focused on
Federal technology standards, but it doesn't prevent wild
increases in emissions that can hurt people from actual plants.
So that is why we have New Source Review added to the law.
What this bill would do is effectively eliminate New Source
Review and replace it with New Source Performance Standards
that allows plants to increase pollution up to their worst
possible polluting hour in 10 years, and obviously doesn't
protect people living around specific plants or protect people
living in downwind States.
Senator Carper. All right, thank you.
Mr. Alteri, where do you live in Kentucky?
Mr. Alteri. Lawrenceburg.
Senator Carper. Where is that?
Mr. Alteri. It is in between Louisville and Lexington; it
is the home of Wild Turkey and Four Roses.
Senator Carper. Are those dairy products?
[Laughter.]
Mr. Alteri. They will make you feel better.
[Laughter.]
Senator Carper. My sister lives just south of there, in
Winchester. I will mention that you were here.
My question for you, I think it was in 2012; Kentucky's
power plants were some of the largest emitters, as you will
recall, of mercury and other toxic pollutions, I think, in our
country. In your written testimony, you state that coal plants
in Kentucky have greatly reduced their emissions, in part due
to regulations promulgated under Section 112 of the Clean Air
Act, also known as the Mercury and Air Toxics Standard rule, or
MATS.
Would you oppose any efforts to undermine MATS today?
Mr. Alteri. I would.
Senator Carper. Thank you very much.
And Mr. Holmstead, a closing question, if I could, for you
as well. In 2012, while you were running the EPA Air Office,
EPA expressly rejected a change to NSR based on the maximum
hourly emission rate. The George W. Bush EPA, I am told, warned
that using such a test ``could sanction greater actual emission
increases to the environment, often from older facilities,
without any preconstruction review,'' and that such an approach
``could lead to unreviewed increases in emissions that would be
detrimental to air quality.''
My question, Mr. Holmstead, is not a gotcha question, but I
am just wondering, were you wrong then, or do you think you
might be wrong today?
Mr. Holmstead. So let me be clear. We never rejected the,
what, this approach. We didn't adopt it. But I have, and I have
to say, I was amused to read Mr. Walke's quotes. What I will
say is, you emphasized the right words there, that something
like this could allow increases, or might allow increases.
What we know from the real world is that they would not. Or
it is highly unlikely that they would. So if we lived in a
world where NSR was the only regulatory program that applied to
existing facilities, if that were the case, then I would agree
that this bill could allow pollution increases. Although again,
the amount of pollution is not a function of these.
What we are talking about is hours of operation. And hours
of operation depends on demand for your product, right? Plants
don't exist so that they can maximize their pollution; they
exist so they can sell things to people. So whether you are
talking electricity or widgets, that is ultimately what
determines the hours of operations that people run. Whether or
not you modify, whether or not you become more efficient, all
those things, are constrained by demand.
Going back to your question, though, if the NSR program
were the only program, and if demand were essentially
unconstrained, then yes, this would allow more pollution. But
we don't live in a world like that. We live in the real world.
And I have to say, I care a lot about air pollution. But I
also care about doing it in the right way.
And we have learned a lot over the years. And the NSR
program is just not a very effective way to reduce air
pollution. It is good for new sources, because they are
required to install pollution controls; that is what Sean said.
It is good when someone is going to expand a source, because it
is part of that process, you are required to install pollution
controls.
But playing this game of gotcha with existing sources when
they replace a component, and we try to get them to trigger NSR
has proven not to be a very effective way. And it creates sort
of the wrong incentives.
Senator Carper. Thank you for that.
John, take just 30 seconds to close us out, please.
Mr. Walke. Sure. Just two quick points. Despite these
general reassurances from Jeff, let me emphasize that he has
not identified a single law in the United States that would
limit increases in actual emissions from thousands of plants
that this bill covers the way that the NSR modification program
does.
The second point I would make is that Jeff's enforcement
colleagues down the hall in the Bush administration identified
plant after plant after plant that had increased emissions
under the test that EPA rejected. There was nothing theoretical
about it. The air got dirtier, and people got sicker.
Senator Carper. All right, thanks.
Mr. Chairman, this is not a new issue, as we said already.
And it is one we have been talking about, arguing about,
discussing for a long time.
Your legislation, if nothing else, sort of gives us an
opportunity to revisit and maybe to have the start of a
productive conversation. I am not sure, but we will see.
Thank you.
Senator Barrasso. Thank you very much, Senator Carper.
Mr. Alteri, at one point, Mr. Walke was making an answer to
something related to whether it was a new source or an old, and
you shook your head no about what had happened in Kentucky. I
don't recall the specifics of that. Is that something you would
like to clarify?
Mr. Alteri. Mr. Walke was absolutely correct on two new
units, they were coal gasification projects, and they were
located right there at the mines. So I think you are reducing
your carbon footprint by having that direct access to local
fuel sources.
The other actions related to improvements that exist in
facilities. It also included when you put on a scrubber, and
you have a selective catalytic reduction strategy with ammonia
injection, it creates sulfuric acid mist. So that triggers NSR
as well, even though you are having a 95-plus percent reduction
of SO2, just because of the chemistry and the
atmosphere chemistry, you are going to increase sulfuric acid
mist. There is no way to control it.
If you limit your sulfur content in coal, then I think that
would be an opportunity to make NSR reforms where you are not
going to cost litigation costs, as well as going through the
permitting process for something that is a pollution control
project.
Senator Barrasso. Thank you.
Mr. Holmstead, Mr. Walke had described the GAIN Act as
creating a license to pollute. Could you comment on the
accuracy of that statement?
Mr. Holmstead. Well, you won't be surprised that I
disagree. What this rule would do was remove the threat of
triggering NSR that discourages a company from doing the things
that we should want them to do. We should want them to maintain
their facilities. If your boiler tubes wear out, you ought to
be able to repair your facility and return it to the way that
it was.
If you want to improve the efficiency of your facility, why
in the world do you want to have this permitting requirement
that is cumbersome, that takes a long time, that can be very
expensive? Why do you want that?
We have all these other regulatory programs that protect
air quality, and this one has just not worked very well when it
comes to, if you are trying to get plants to actually reduce
their emissions. It just hasn't worked.
And so I am frustrated because I see that we are, as a
country, and this is a small part of our economy, but it is
nevertheless very important. And you talk to manufacturing
facilities, you talk to anybody, and they say, NSR is a
significant problem. And I just wish that we had some way to
fix it. I think this act would be a very sensible way to do
that.
Senator Barrasso. Well, thank you all.
The Committee has received a number of letters in support
of the GAIN Act from a number of groups, including the National
Association of Manufacturers, the Portland Cement Association,
the American Forest and Paper Association, the International
Brotherhood of Boilermakers, the Pennsylvania Chamber of
Business and Industry. Without objection, I ask unanimous
consent to enter these letters into the record.
And it is so done.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. We have heard from our witnesses. I want
to thank all of you for being here with your testimony.
There are no more people to ask questions today at the
hearing, but they may submit written questions. So the hearing
record will remain open for 2 weeks.
I want to thank all of you for being here; we are thankful
for your time. Thank you for your testimony.
[Whereupon, at 11:41 a.m., the hearing was adjourned.]
[all]