[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

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

                                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

                              ----------                              


                      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:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    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:]
    
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    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:]
    
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    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.]

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