House Report 112-50 - ENERGY TAX PREVENTION ACT OF 2011

[House Report 112-50]
[From the U.S. Government Publishing Office]

112th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 112-50

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

ENERGY TAX PREVENTION ACT OF 2011

_______

April 1, 2011.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Upton, from the Committee on Energy and Commerce,
submitted the following

R E P O R T

together with

DISSENTING VIEWS

[To accompany H.R. 910]

[Including cost estimate of the Congressional Budget Office]

The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 910) to amend the Clean Air Act to prohibit the
Administrator of the Environmental Protection Agency from
promulgating any regulation concerning, taking action relating
to, or taking into consideration the emission of a greenhouse
gas to address climate change, and for other purposes, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.

CONTENTS

Page
Purpose and Summary.............................................. 4
Background and Need for Legislation.............................. 4
Hearings......................................................... 15
Committee Consideration.......................................... 16
Committee Votes.................................................. 16
Committee Oversight Findings..................................... 23
Statement of General Performance, Goals and Objectives........... 23
New Budget Authority, Entitlement Authority, and Tax Expenditures 23
Earmark.......................................................... 23
Committee Cost Estimate.......................................... 23
Congressional Budget Office Estimate............................. 23
Federal Mandates Statement....................................... 25
Advisory Committee Statement..................................... 25
Applicability to Legislative Branch.............................. 25
Section-by-Section Analysis of Legislation....................... 25
Changes in Existing Law Made by the Bill, as Reported............ 26
Dissenting Views................................................. 31

Amendment

The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Energy Tax Prevention Act of 2011''.

SEC. 2. NO REGULATION OF EMISSIONS OF GREENHOUSE GASES.

Title III of the Clean Air Act (42 U.S.C. 7601 et seq.) is amended by
adding at the end the following:

``SEC. 330. NO REGULATION OF EMISSIONS OF GREENHOUSE GASES.

``(a) Definition.--In this section, the term `greenhouse gas' means
any of the following:
``(1) Water vapor.
``(2) Carbon dioxide.
``(3) Methane.
``(4) Nitrous oxide.
``(5) Sulfur hexafluoride.
``(6) Hydrofluorocarbons.
``(7) Perfluorocarbons.
``(8) Any other substance subject to, or proposed to be
subject to, regulation, action, or consideration under this Act
to address climate change.
``(b) Limitation on Agency Action.--
``(1) Limitation.--
``(A) In general.--The Administrator may not, under
this Act, promulgate any regulation concerning, take
action relating to, or take into consideration the
emission of a greenhouse gas to address climate change.
``(B) Air pollutant definition.--The definition of
the term `air pollutant' in section 302(g) does not
include a greenhouse gas. Notwithstanding the previous
sentence, such definition may include a greenhouse gas
for purposes of addressing concerns other than climate
change.
``(2) Exceptions.--Paragraph (1) does not prohibit the
following:
``(A) Notwithstanding paragraph (4)(B),
implementation and enforcement of the rule entitled
`Light-Duty Vehicle Greenhouse Gas Emission Standards
and Corporate Average Fuel Economy Standards' (as
published at 75 Fed. Reg. 25324 (May 7, 2010) and
without further revision) and finalization,
implementation, enforcement, and revision of the
proposed rule entitled `Greenhouse Gas Emissions
Standards and Fuel Efficiency Standards for Medium- and
Heavy-Duty Engines and Vehicles' published at 75 Fed.
Reg. 74152 (November 30, 2010).
``(B) Implementation and enforcement of section
211(o).
``(C) Statutorily authorized Federal research,
development, and demonstration programs addressing
climate change.
``(D) Implementation and enforcement of title VI to
the extent such implementation or enforcement only
involves one or more class I substances or class II
substances (as such terms are defined in section 601).
``(E) Implementation and enforcement of section 821
(42 U.S.C. 7651k note) of Public Law 101-549 (commonly
referred to as the `Clean Air Act Amendments of 1990').
``(3) Inapplicability of provisions.--Nothing listed in
paragraph (2) shall cause a greenhouse gas to be subject to
part C of title I (relating to prevention of significant
deterioration of air quality) or considered an air pollutant
for purposes of title V (relating to permits).
``(4) Certain prior agency actions.--The following rules and
actions (including any supplement or revision to such rules and
actions) are repealed and shall have no legal effect:
``(A) `Mandatory Reporting of Greenhouse Gases',
published at 74 Fed. Reg. 56260 (October 30, 2009).
``(B) `Endangerment and Cause or Contribute Findings
for Greenhouse Gases Under Section 202(a) of the Clean
Air Act', published at 74 Fed. Reg. 66496 (December 15,
2009).
``(C) `Reconsideration of Interpretation of
Regulations That Determine Pollutants Covered by Clean
Air Act Permitting Programs', published at 75 Fed. Reg.
17004 (April 2, 2010) and the memorandum from Stephen
L. Johnson, Environmental Protection Agency (EPA)
Administrator, to EPA Regional Administrators,
concerning `EPA's Interpretation of Regulations that
Determine Pollutants Covered by Federal Prevention of
Significant Deterioration (PSD) Permit Program'
(December 18, 2008).
``(D) `Prevention of Significant Deterioration and
Title V Greenhouse Gas Tailoring Rule', published at 75
Fed. Reg. 31514 (June 3, 2010).
``(E) `Action To Ensure Authority To Issue Permits
Under the Prevention of Significant Deterioration
Program to Sources of Greenhouse Gas Emissions: Finding
of Substantial Inadequacy and SIP Call', published at
75 Fed. Reg. 77698 (December 13, 2010).
``(F) `Action To Ensure Authority To Issue Permits
Under the Prevention of Significant Deterioration
Program to Sources of Greenhouse Gas Emissions: Finding
of Failure To Submit State Implementation Plan
Revisions Required for Greenhouse Gases', published at
75 Fed. Reg. 81874 (December 29, 2010).
``(G) `Action to Ensure Authority To Issue Permits
Under the Prevention of Significant Deterioration
Program to Sources of Greenhouse Gas Emissions: Federal
Implementation Plan', published at 75 Fed. Reg. 82246
(December 30, 2010).
``(H) `Action to Ensure Authority to Implement Title
V Permitting Programs Under the Greenhouse Gas
Tailoring Rule', published at 75 Fed. Reg. 82254
(December 30, 2010).
``(I) `Determinations Concerning Need for Error
Correction, Partial Approval and Partial Disapproval,
and Federal Implementation Plan Regarding Texas
Prevention of Significant Deterioration Program',
published at 75 Fed. Reg. 82430 (December 30, 2010).
``(J) `Limitation of Approval of Prevention of
Significant Deterioration Provisions Concerning
Greenhouse Gas Emitting-Sources in State Implementation
Plans', published at 75 Fed. Reg. 82536 (December 30,
2010).
``(K) `Determinations Concerning Need for Error
Correction, Partial Approval and Partial Disapproval,
and Federal Implementation Plan Regarding Texas
Prevention of Significant Deterioration Program;
Proposed Rule', published at 75 Fed. Reg. 82365
(December 30, 2010).
``(L) Except for actions listed in paragraph (2), any
other Federal action under this Act occurring before
the date of enactment of this section that applies a
stationary source permitting requirement or an
emissions standard for a greenhouse gas to address
climate change.
``(5) State action.--
``(A) No limitation.--This section does not limit or
otherwise affect the authority of a State to adopt,
amend, enforce, or repeal State laws and regulations
pertaining to the emission of a greenhouse gas.
``(B) Exception.--
``(i) Rule.--Notwithstanding subparagraph
(A), any provision described in clause (ii)--
``(I) is not federally enforceable;
``(II) is not deemed to be a part of
Federal law; and
``(III) is deemed to be stricken from
the plan described in clause (ii)(I) or
the program or permit described in
clause (ii)(II), as applicable.
``(ii) Provision defined.--For purposes of
clause (i), the term `provision' means any
provision that--
``(I) is contained in a State
implementation plan under section 110
and authorizes or requires a limitation
on, or imposes a permit requirement
for, the emission of a greenhouse gas
to address climate change; or
``(II) is part of an operating permit
program under title V, or a permit
issued pursuant to title V, and
authorizes or requires a limitation on
the emission of a greenhouse gas to
address climate change.
``(C) Action by administrator.--The Administrator may
not approve or make federally enforceable any provision
described in subparagraph (B)(ii).''.

SEC. 3. PRESERVING ONE NATIONAL STANDARD FOR AUTOMOBILES.

Section 209(b) of the Clean Air Act (42 U.S.C. 7543) is amended by
adding at the end the following:
``(4) With respect to standards for emissions of greenhouse gases (as
defined in section 330) for model year 2017 or any subsequent model
year new motor vehicles and new motor vehicle engines--
``(A) the Administrator may not waive application of
subsection (a); and
``(B) no waiver granted prior to the date of enactment of
this paragraph may be construed to waive the application of
subsection (a).''.

SEC. 4. SENSE OF CONGRESS.

It is the sense of the Congress that--
(1) there is established scientific concern over warming of
the climate system based upon evidence from observations of
increases in global average air and ocean temperatures,
widespread melting of snow and ice, and rising global average
sea level;
(2) addressing climate change is an international issue,
involving complex scientific and economic considerations;
(3) the United States has a role to play in resolving global
climate change matters on an international basis; and
(4) Congress should fulfill that role by developing policies
that do not adversely affect the American economy, energy
supplies, and employment.

Purpose and Summary

H.R. 910, the ``Energy Tax Prevention Act of 2011'' was
introduced by Rep. Fred Upton (together with Reps. Barton,
Boren, McKinley, McMorris Rogers, Peterson, Rahall, Sullivan,
Walden and Whitfield) on March 3, 2011. The legislation
prevents the Environmental Protection Agency (EPA) from using
the Clean Air Act (CAA) to implement its global warming
regulatory agenda, thereby avoiding the resultant energy cost
increases, job losses, and overall economic damage. The
regulations have begun to go into effect, with numerous
additional rulemakings pending or expected, and the potential
adverse consequences to gasoline and electricity prices,
household incomes, costs of goods and services, global
competitiveness and employment are likely to increase
considerably unless the agency's lack of authority under the
CAA is clarified.
Key provisions in the bill:
Expressly preclude the Administrator of EPA from
promulgating any rules regulating greenhouse gases under the
CAA to address climate change, subject to limited exceptions,
and clarify that greenhouse gases are not air pollutants under
the statute.
Repeal existing CAA greenhouse gas climate change
rules and programs, including the EPA Administrator's
endangerment finding and regulation of greenhouse gases
emissions from stationary sources under the CAA's Prevention of
Significant Deterioration (PSD) preconstruction and Title V
operating permit programs.
Allow states to undertake climate change policies,
but voids, as a matter of federal law, requirements for states
to regulate greenhouse gases under their PSD and Title V
operating permit programs.
Provide exceptions for light-duty motor vehicle
regulations scheduled to take effect for Model Years 2012
through 2016 and proposed medium and heavy-duty vehicle
provisions for Model Years 2014 through 2018, implementation of
the renewable fuels mandate under CAA Section 211(o), federally
authorized climate change research, utility industry greenhouse
gas reporting requirements, and implementation of the
stratospheric ozone provisions under Title VI of the CAA.

Background and Need for Legislation

America faces rising gasoline and other energy costs, a
weak and nearly-jobless economic recovery, and intense global
competition threatening to further erode the domestic
manufacturing and industrial sectors. Yet the EPA is moving
aggressively to implement a global warming agenda that is
almost certain to be the most far-reaching, costly and
complicated set of regulations in the agency's history. Though
premised by EPA on the Supreme Court's 5 to 4 decision in
Massachusetts v. Environmental Protection Agency, 549 U.S. 497
(2007), the agency's regulations are by no means mandated by
that Supreme Court decision. The Supreme Court Majority
interpreted Congressional intent behind the 1970 CAA and
subsequent amendments, and inferred that greenhouse gases could
fit with the statute's definition of ``air pollutant''; however
the Supreme Court did not require EPA to make an endangerment
finding for greenhouse gases or proceed with its global warming
regulations. Rather, EPA was directed to ground its reasons for
action or inaction in the CAA.
In contrast, Congress has debated global warming directly
on numerous occasions, and has repeatedly rejected legislative
measures that in some respects were less sweeping than EPA's
regulations. In the previous debates over global warming
legislation, and most recently the American Clean Energy and
Security Act of 2009, Congress has created a record regarding
the science and economics of global warming policy that is
highly relevant to the debate over the merits of EPA's efforts
to implement the regulatory equivalent. Three hearings listed
below relating to H.R. 910 further strengthen the conclusion
that EPA's greenhouse gas regulations under the CAA would be an
extremely costly and ineffective means of addressing climate
change. Regardless, EPA is moving expeditiously to promulgate
its regulatory scheme. The initial greenhouse gas regulations
have begun to be issued by the EPA. As the first step, in
December 2009, the Administrator of EPA issued an
``endangerment finding'' concluding that the atmospheric
concentrations of the combination of carbon dioxide and five
other greenhouse gases endanger public health and welfare, and
those emissions of such greenhouse gases from motor vehicles
are contributing to such concentrations and hence endangering
public health and welfare. Subsequently, EPA moved forward with
greenhouse emissions standards from motor vehicles, including
its ``Light Duty Vehicle'' rule which sets greenhouse gas
emissions standards for passenger cars and trucks for Model
Years 2012-2016 and went into effect on January 2, 2011, with
estimated compliance costs of $52 billion. EPA has also
proposed greenhouse gas and fuel economy standards for medium
and heavy duty vehicles for Model Years 2014-2018, with
estimated compliance costs of $7.7 billion. EPA has advised
that it is considering actions to reduce greenhouse emissions
from other transportation sources.
EPA contends that, once it began regulating greenhouse gas
emissions from vehicles, there was an automatic statutory
trigger requiring it to begin regulating such emissions for
stationary sources under two CAA permitting programs. These
programs are known as the Prevention of Significant
Deterioration (PSD) preconstruction permit program, and the
Title V operating permit program. These are permits that
regulated entities must get when they make a major modification
or build new projects. EPA estimates that prior to its new
global warming rules, only 280 sources were required annually
to obtain PSD permits, and that nationwide there are
approximately 15,000 sources that currently have Title V
operating permits. EPA concluded, however, that once the agency
began regulating greenhouse gas emissions from motor vehicles
on Jan. 2, 2011, (i) 82,000 sources would need PSD permits and
to install ``Best Available Control Technology'' or ``BACT''
(determined on a case by case basis); and (ii) 6.1 million
sources would need to obtain Title V permits.
EPA itself called this potential regulatory result
``absurd'' and said it would lead to a grid-locking of the
permit system, as permitting authorities would be swamped with
permit applications and permitting would come to a halt for
both large and small sources. Without permits, facilities
cannot construct or modify, with potentially devastating
economic consequences.
In May 2010, EPA issued its so-called ``Tailoring Rule''
pursuant to which EPA raised the CAA statutory thresholds to
require permitting initially only for the largest industrial
sources of greenhouse gas emissions from 100/250 tons to
100,000 tons per year. In essence, EPA replaced the thresholds
that Congress itself established with much higher thresholds.
EPA has ``tailored'' the CAA permitting requirements to
initially cover large industrial facilities it projects
represent 70% of all U.S. greenhouse gas emissions (e.g., power
plants, large boilers, pulp and paper, cement, iron and steel,
refineries and nitric acid plants). EPA plans to initially
limit permitting requirements to 1,600 PSD permits annually and
15,550 operating permits. EPA estimates the costs of this
permitting avoided by the Tailoring Rule are $78 billion
annually. EPA, however, has already scheduled other rulemakings
to address phasing in permitting for smaller sources, including
rulemakings to be completed in 2012 and 2016.
There has been a great deal of discussion about whether EPA
has the legal authority to ``tailor'' numerical thresholds
established by Congress in this fashion and several causes of
action have been filed challenging EPA's actions.
The first PSD permitting requirements for large industrial
facilities became effective in January 2011 and the first Title
V permit requirements will go into effect in July 2011. To
comply with the permitting requirements, EPA, has issued BACT
Guidance which indicates BACT may mean efficiency measures,
carbon capture and storage (CCS) technologies (which as a
practical matter are not commercially deployed and not expected
to be for years), and leaves open to states whether or not they
may require fuel switching to reduce greenhouse gas emissions.
In addition to PSD and Title V permitting, in the past EPA
has outlined an array of possible additional greenhouse gas
related rulemakings under the CAA. For example, in December
2010, EPA announced it plans to set new greenhouse gas ``New
Source Performance Standards'' specifically for existing
petroleum refineries and fossil fired power plants. EPA has
also previously advised that the agency is also considering
petitions or requests to regulate such emissions from cement
plants, nitric acid plants, utility boilers, oil and gas
production, landfills, and concentrated animal feeding
operations.
In October 2009, EPA also issued mandatory greenhouse gas
reporting rules pursuant to the CAA and appropriations
legislation (FY 2008 Consolidated Appropriations Act, H.R.
2764, Pub. L. 110-161). EPA estimated the costs of the initial
rule to be $132 million in the first year, and $89 million
annually. EPA estimated that over 10,000 facilities in the U.S.
would be covered by the rules and would have to begin annual
reporting requirements. Since October 2009, EPA has
supplemented the reporting rule four times to add more sources.
H.R. 910 would prevent these EPA's expansive regulations of
stationary sources from being implemented by the agency, and
circumventing Congressional intent. It would also return global
warming policymaking responsibility where it belongs--Congress.

Economic Justification

EPA's global warming regulations under the CAA seem almost
tailor-made to exacerbate the very economic problems the nation
now faces. The Subcommittee on Energy and Power held two
hearings that included discussion regarding the economic
implications of the agency's agenda. The hearings echoed those
of past legislative debates over cap and trade energy taxes in
detailing the adverse impact of such measures on energy prices
and employment as well as the likelihood that the high costs
would not be justified by any demonstrable climate change
reduction benefits.

ENERGY COSTS

Fossil fuels--coal, oil, and natural gas--provide this
nation with 85 percent of its energy. They are widely used
because of their availability, reliability and affordability.
There is no question that low-cost energy is the lifeblood of a
strong and free economy--empowering in both the figurative and
literal sense. America's fossil fuel-based energy supplies
already face the world's most stringent regulations, including
numerous air pollution measures under the CAA. Now, EPA is
beginning the process of rolling out a set of new ones based on
addressing carbon dioxide and other greenhouse gas emissions.
It is nothing short of a dramatic transformation of the
American economy via what amounts to a massive energy tax.
Motor fuels are among the impacted energy sources. As it
is, the price of gasoline has nearly doubled since the
beginning of 2009. Although still slightly below the $4.00 per
gallon levels reached in the summer of 2008, today's high
prices are particularly challenging given that many households
are struggling in the current economy. While exogenous events,
namely unrest in North Africa and the Middle East, are a
significant factor in rising oil and motor fuels prices,
federal laws and regulations have long been a contributor as
well. For example, the U.S. remains the only nation in the
world that places substantial domestic oil supplies off limits.
With additional domestic production, prices would be lower and
vulnerability to geopolitical events would be reduced. In
addition to oil production constraints, a long list of
regulations imposed on domestic refiners add to the cost of
turning oil into gasoline and diesel fuel.
Rather than revisiting these costly existing restrictions
with an eye towards modifications that would ease future pain
at the pump, the Obama administration continues adding to the
burden with its global warming agenda. These regulations apply
to domestic refineries and may also add further roadblocks to
domestic oil production. For example, domestic refiners and
producers will come under the PSD and Title V permitting
programs for greenhouse gases. In addition, on December 23,
2010, EPA announced that it will propose New Source Performance
Standards (NSPS) for such emissions from refiners which will
apply to existing as well as new sources. EPA has not conducted
any economic analysis of what these stationary source GHG rules
might cost.
The domestic refining sector has raised concerns about the
impact on the cost of producing motor fuels. On February 9,
2011, the Subcommittee received testimony from the Vice
President of Lion Oil, an Arkansas refiner, who testified that
a major refinery expansion project at his company had been put
on hold, and that ``the uncertainty and potentially prohibitive
costs associated with possible cap-and-trade legislation and
EPA's greenhouse gas regulations were a critical factor leading
us to delay the completion of the expansion.'' With regard to
the ultimate impact of EPA's new regulations on retail prices,
he stated that `` [H.R. 910] is also necessary to protect
consumers, farmers, and truckers from higher gasoline and
diesel fuel prices.'' When asked what EPA regulations he was
most concerned about, he acknowledged that his industry faces
many, but that ``the PSD and the NSPS portions of the
greenhouse gas regulations are the most immediate concern.''
Similar concerns were also raised in letters of support for
H.R. 910 from the National Petrochemical and Refiners
Association (NPRA) and individual companies. The President of
NPRA stated that ``[s]ome of our members have been forced to
stop expansion projects that would have increased our domestic
petrochemical and fuel supply'' because of EPA's greenhouse gas
agenda, which he believes would ``raise consumer fuel costs
further by restricting our domestic energy production.'' A
representative of one of the nation's large refining companies,
Valero, stated that ``every credible economic analysis that has
been performed shows that Americans will pay higher prices at
the pump . . . as a direct result of EPA's action.''
EPA Administrator Lisa Jackson has countered that EPA
regulations may reduce fuel costs and dependence on foreign oil
as a consequence of fuel savings under the new motor vehicle
fuel efficiency standards, which were the first greenhouse gas
regulations to be promulgated by the agency. However, H.R. 910
explicitly exempts these new light duty fuel efficiency
standards, which the Administration agreed in 2009 to
promulgate pursuant to an agreement between EPA, the National
Highway Traffic Safety Administration (NHTSA) and the State of
California. Under H.R. 910, these provisions, which are
applicable to Model Years 2012 through 2016, will still go into
force as planned, as will EPA's proposed standards for medium
and heavy duty engines and vehicles for Model Years 2014
through 2018. Thus, any energy savings from these new standards
are preserved by H.R. 910.
For 2017 and afterwards, H.R. 910 prevents EPA and
California from setting its own further standards for
greenhouse gas tailpipe emissions under the CAA, restoring sole
authority for fuel economy regulations with NHTSA where it has
resided since the 1975 Energy Policy and Conservation Act.
NHTSA can strengthen fuel economy standards for 2017 and beyond
if it believes doing so is in the public interest, and Congress
can also direct stringent standards.
According to an analysis conducted for the National Black
Chamber of Commerce by Charles River Associates, the American
Energy and Security Act of 2009 was estimated to increase
gasoline prices by 19 cents per gallon by 2015 and 95 cents by
2050--above and beyond anything else that may impact prices in
the years ahead. While EPA has provided very few details
regarding what their full greenhouse gas regulatory
requirements will ultimately entail, it is unlikely that the
agency would be satisfied with anything less stringent than the
unsuccessful legislation the regulations are attempting to
replace. Indeed, during the debate over climate legislation in
2009 and 2010, Administrator Jackson warned of higher costs
associated with regulations in order to urge Congress to enact
legislation as the preferred alternative. When asked by Rep.
John Dingell, during an April 22, 2009 Committee on Energy and
Commerce hearing on the American Energy and Security Act,
whether regulating greenhouse gases under the Clean Air Act
would result in a ``glorious mess,'' Administrator Jackson
replied that ``if your point, sir, is that it is more efficient
to do it via a bill, via new legislation like this discussion
draft envisions, then I couldn't agree more.''
Beyond motor fuels, EPA's greenhouse gas regulations also
threaten to raise electricity costs. Coal is used to generate
half of America's electricity, and it is also the energy source
most heavily targeted under EPA's greenhouse gas regulatory
scheme. Electric utilities, manufacturers who rely on
affordable coal-fired generation to compete globally, and the
operators of coal mines who supply this energy source all
testified in favor of H.R. 910. The President and CEO of South
Carolina electricity provider Santee Cooper testified at the
February 9th hearing that EPA's greenhouse gas regulations,
along with others, threaten ``premature shutdown of significant
amounts of the existing U.S. coal fleet; increases in
electricity prices; risks to electric reliability; job losses;
and harm to the U.S. economy.'' He added that the cost of
natural gas fired electricity, responsible for nearly 20
percent of generation, would rise as well. At a March 1, 2011
hearing, the President of the Ohio Coal Association stated that
``[a]llowing the USEPA to regulate greenhouse gases will
increase the cost to power our Country, cause massive transfers
of wealth, and result in huge job losses that will not be
recovered.''
As with gasoline prices, the full impact on electricity
prices cannot be accurately predicted until EPA better explains
what its greenhouse gas agenda would require. A Vice President
of Charles River Associates testified on March 1st that all
pending EPA regulations ``could increase real (i.e. before
inflation) wholesale electricity prices by 35-40% from 2015
onward. Most of this impact is attributable to the greenhouse
gas regulations.''
High energy costs disproportionately burden low income
households and the smallest of businesses. The President and
CEO of the National Black Chamber of Commerce noted at the
February 9th hearing that ``[w]hile paying a higher heating
bill this month or doling out money for gasoline on the way
into the office from McLean or Bethesda may mean little to
government bureaucrats, people living paycheck to paycheck and
small businesses trying to get by simply cannot afford it,
especially now.''

JOBS

Unemployment remains persistently high, and the American
people are demanding policies that will get the nation back to
work. But the record also makes clear that greenhouse gas
regulations reduce rather than create domestic jobs.
As discussed previously, EPA's regulations would raise
gasoline and electricity costs, harming both consumers and
businesses. But energy is only part of the higher costs EPA's
agenda would impose on America's job creators. The costs of
compliance with these new requirements will also be
substantial, though hard to quantify since the agency has yet
to inform the regulated community what technologies would pass
muster. Further, the uncertainty raised by this as-yet-
unspecified regulatory scheme is already having a chilling
effect on plant expansions and other job-creating investments.
Worse, given the backdrop of intense global competition in the
manufacturing sector, these unilateral EPA regulations mean
that jobs will migrate to nations like China, India, and others
who have made clear that they have no plans to impose similar
global warming measures on their industries.
The breadth of the impact is staggering. At the February
9th and March 1st hearings, the Subcommittee heard from a broad
cross section of sectors--manufacturers, energy producers,
small businesses, farmers--testifying against EPA's global
warming regulations. Subsequently, a large number of trade
associations, representing a significant percentage of private
sector employment, have come out in support of H.R. 910. This
includes the American Forest and Paper Association, American
Electric Power, American Iron and Steel Institute, American
Public Power Association, Business Roundtable, Fertilizer
Institute, Industrial Energy Consumers of America, Metalcasters
Alliance, National Association of Realtors, National
Cattlemen's Beef Association, National Petrochemical and
Refiners Association, American Farm Bureau Federation, U.S.
Chamber of Commerce, National Association of Manufacturers,
National Mining Association, and the National Rural Electric
Cooperative Association.
The effects of EPA's regulations are potentially felt most
acutely by manufacturers and by energy intensive and trade
exposed industries competing in a global marketplace. In some
instances, facility expansions have already been delayed as is
occurring with the Lion Oil's Arkansas refinery expansion
project. Their representative noted that ``at the same time
construction jobs were being terminated in El Dorado, Arkansas,
in India, more than 75,000 workers were embarking on a 3-year
project to build a brand-new state-of-the-art refinery designed
purely for export purposes.'' Other projects have been scaled
back considerably as is the case with a Nucor Corporation steel
facility in Louisiana. The General Manager of Environmental
Affairs at Nucor stated at a February 9th hearing that the
original project ``was around 1,000 jobs when the full project
was in, and we are around 150 jobs right now. And there was
about 2,000 construction jobs originally and we are at about
500 construction jobs right now. . . .''
Rather than provide regulatory certainty, EPA's ill-defined
regulatory rollout is creating uncertainty and stifling
investment. The President of the Industrial Energy Consumers of
America stated on March 1st that ``[t]he EPA greenhouse gas
regulation is an example of regulation that creates uncertainty
and discourages investment and when added to the many other new
regulations it is understandable why corporate America is
sitting on $2 trillion of cash.'' Many believe EPA's GHG
policies are a contributor to the slow economic recovery and
lingering high unemployment.
Not only are these policies bad for the American economy
and domestic jobs, but they do little to reduce greenhouse gas
emissions. EPA's rules will chase manufacturing activity to
nations that often have higher greenhouse gas emissions per
unit output (sometimes referred to as ``carbon leakage'').
Nucor said that ``the U.S. steel industry has the lowest CO2
emissions per ton in the world,'' and that ``these very
regulations and practices that are intended to improve the
environment actually result in increased global emissions and
more environmental impact than if the industry had remained in
the United States.'' The Manufacturing Director for chemical
producer FMC similarly testified that ``[t]he current U.S.
approach to regulating greenhouse gases not only fails to
incentivize us to achieve greater efficiency, but over time it
may lead to U.S. natural soda ash producers to lose business to
our off-shore rivals, mainly the Chinese, who produce their
soda ash synthetically. Synthetic soda ash generates an average
of 30 percent greater greenhouse gas emissions per ton than
does soda ash mined from natural resources.'' In sum, there is
little if any environmental gain to justify the economic pain.
Administrator Jackson suggested that small businesses are
not harmed by EPA's greenhouse gas rules because the so-called
Tailoring Rule prevents direct regulation of them, at least at
the outset. However, small business, just like homeowners and
car owners, will face higher energy costs as a consequence of
the burdens imposed on utilities and refineries. Indeed,
despite a large number of pending regulations, the President
and CEO of the National Black Chamber of Commerce, who also
sits on the Board of the U.S. Chamber of Commerce, singled out
EPA's greenhouse gas measures as the top concern of the small
business community. A representative of James River Air
Conditioning, who testified on behalf of the National
Federation of Independent Business (NFIB) on March 1st, added
that many small businesses are contractors for large
construction projects that are being discouraged by EPA's
agenda. Further, he and other small business owners find little
comfort in the Tailoring Rule, as ``it would merely temporarily
delay inevitable and onerous permitting requirements.''
Similar claims that agricultural jobs are unaffected are
also misleading. The President of the Illinois Farm Bureau who
testified on behalf of the American Farm Bureau on February
9th, warned that ``farmers and ranchers receive a double
economic jolt,'' from these regulations. He explained that
``even if this `tailoring' approach were to survive, farmers
and ranchers would still incur the higher costs of compliance
passed down from utilities, refiners and fertilizer
manufacturers that are directly regulated as of January 2,
2011.'' In addition, he was also wary of EPA's so-called
Tailoring Rule, testifying that if the Tailoring Rule fails to
withstand legal challenge, ``[f]or the first time, many farm
and ranch operations will likely be subject to direct new
source review/prevention of significant deterioration
construction permits and Title V permit requirements under the
Clean Air Act.''
The Senior Vice President and Chief Economist for the
American Council for Capital Formation testified on February
9th about the overall impact of EPA's rules on the American
economy. She stated that the uncertainty created by these rules
has discouraged the investment necessary for a robust recovery
and job growth, and estimates that ``in 2014 there would be an
economy wide job loss of 476,000 to 1,400,000 when direct,
indirect, and induced effects are included.'' She added that
these are net job losses, after any so-called green jobs are
taken into account. The last point was reinforced by a
representative of Charles Rivers Associates on March 1st . When
asked about the green jobs, he conceded that firms coming under
EPA's global warming regulations would have to employ people in
order to comply with the new requirements, and would raise
employment amongst companies that make pollution control
equipment or produce carbon-free energy. However, these
policies greatly increase energy and other operating costs,
which destroy far more jobs in the process. He concludes that
``EPA's new regulations will create losses throughout the
economy that more than offset any gains for specific industries
that receive new orders because of EPA regulations.'' Indeed,
this appears to be happening already.

COSTS VERSUS BENEFITS

The debate over H.R 910 is not a debate about the science
of climate change, but rather about whether EPA regulation of
greenhouse gases under the CAA is a sensible solution or not.
It clearly is not the appropriate vehicle.
Those skeptical of the claim that global warming is a dire
crisis are particularly concerned by the staggering costs of
EPA's global warming regulations. But it is not necessary to be
a climate change skeptic to be a skeptic of EPA's regulatory
agenda, as this agenda would not make an appreciable difference
in either the atmospheric concentrations of carbon dioxide and
other greenhouse gases or the earth's future temperature.
As discussed previously, the unilateral nature of EPA's
actions, amidst the backdrop of developing world emissions that
already surpass America's emissions and are growing at a rate
many times faster, raise serious doubts as to the efficacy of
the agency's regulatory scheme. Further, the fact that American
manufacturing activity would likely be outsourced to nations
with higher emissions per unit output raises the possibility
that the rules may prove environmentally counterproductive.
China alone out-emits the United States, and its emissions
growth is projected by the Energy Information Administration to
be several times higher than America's through 2030. At the
February 9th hearing, EPA Administrator Jackson confirmed, as
she did at previous cap and trade hearings, that unilateral
action would be nearly meaningless, conceding that ``we will
not ultimately be able to change the amount of CO2 that is
accumulating in the atmosphere alone. . . .'' She suggested
that EPA should move ahead nevertheless in the hope that other
nations would follow the lead of the United States. Indeed, at
a March 8th Subcommittee hearing entitled ``Climate Science and
EPA's Greenhouse Gas Regulations,'' scientists and public
health experts raised doubts that EPA's agenda would make a
measurable difference, either in emissions, future
temperatures, or the claimed environmental and public health
impacts. When questioned about the impact of EPA's regulations,
the Director of the Earth System Science Center at the
University of Alabama in Huntsville stated that ``[I] have done
several calculations in that regard and the impact is miniscule
to whatever--really both the greenhouse gas concentration total
and what the climate system might do as a result of that
delta.''
In some cases, the predicted harm from global warming may
be outweighed by the harm from EPA's global warming
regulations--a cure potentially worse than the disease. For
example, in response to assertions that continued warming would
harm corn yields, this witness, who is also Alabama's State
Climatologist, noted that ``[w]e grow corn from North Dakota to
Alabama. When it is warm in Alabama, we still get 240 bushels
an acre for irrigated corn, a tremendous amount of corn. The
temperature is not as critical when you know how to farm and
deal with the variations that occur in a particular area. But I
can assure you, because I talk to a lot of farmers and deal
with them, that their fuel costs, their fertilizer costs, they
are complaining a lot right now and just cannot bear to see
those costs go up any more which would happen if a price were
put on carbon like that.''
With regard to claims that EPA's rule would improve public
health, the Professor Emeritus of Tropical Public Health at the
Uniformed Services University of the Health Sciences stated
that ``[l]et us disabuse ourselves of the idea, if it is out
there, that EPA controlling CO2 will improve health outcomes in
the US or elsewhere.'' Indeed, he expressed strong concerns
about the public health implications brought on by EPA's costly
agenda. He stated that ``with greater EPA control over CO2, it
is likely that economic growth will suffer and we will be
poorer as a nation. I have observed in my many years of
scientific research, in both rich and poor countries, the rich
countries can afford to deal with public health problems.'' EPA
confirmed the high costs relative to reductions in temperature
in only regulatory impact analysis of its the light duty
vehicle rule. In its analysis, EPA concluded that the rule
would impose compliance costs of nearly $52 billion dollars but
would only reduce the earth's future temperature by an
estimated 0.006 to 0.015 degrees Celsius (no more than 0.027
degrees Fahrenheit) by 2100. Sea level rise was expected to be
reduced by 0.06 to 0.14 cm (no more than 0.055 inches) by 2100.
If this ratio of costs to benefits applies to the rest of EPA's
regulations, the agency may well be embarking on a trillion
dollar agenda in order to make a difference in the earth's
future temperature of, at most, one or two tenths of a degree
Fahrenheit by 2100 and a comparably trivial difference in sea
level rise--quite possibly the worst deal ever presented to the
American people.

RESTORING THE ROLE OF CONGRESS IN SETTING CLIMATE POLICY

Rather than serving as a departure from the longstanding
Congressional position on climate change, H.R. 910 restores it.
Greenhouse gas emissions controls under the Clean Air Act have
in the past been considered and rejected by Congress. The many
issues now emerging from EPA's greenhouse gas regulatory agenda
confirm that Congress' reluctance was well founded.
Given the sweeping consequences of this agenda on the
American people, it is clear that global warming policy
decisions should be directed by Congress and not a federal
agency. That is what H.R. 910 seeks to accomplish.
Notwithstanding the Supreme Court's decision in
Massachusetts v. EPA, the language of the CAA argues against
its use as a tool to address global warming. Although the CAA
specifically expressly identifies a large number of air
pollutants and details how they will be regulated, the statute
contains no direct authority for the agency to regulate carbon
dioxide or other greenhouse gases. In the debate over the 1990
amendments to the CAA (the last major amendments to this
statute), two significant global warming provisions were
included in the Senate-passed version, S. 1630. However, these
provisions were taken out of the bill that ultimately passed.
The existing provisions now being applied to carbon dioxide
were designed for localized pollution like particulate matter
and lead, but make little sense when addressing greenhouse
gases that are spread evenly throughout the globe, and for
which unregulated foreign emissions are several times more
significant than regulated domestic sources. The end result of
this unilateral scheme cannot help but be ineffective in
addressing climate change.
In the years since the 1990 debate over CAA amendments,
Congress has considered a number of pieces of legislation that
would create authority to regulate greenhouse gases. In fact,
Congress in the last ten years has considered and rejected a
number of such bills--either cap-and-trade legislation, multi-
pollutant bills that included carbon dioxide as a pollutant, or
other measures. The most recent and extensive debate was over
the American Clean Energy and Security Act of 2009, for which
no Senate counterpart was ever brought to a vote in that body.
The fact that members introduced these bills strongly suggests
that they did not believe Congress had already created such
authority when it enacted the original CAA or its 1977 and 1990
amendments. More importantly, the fact that none of these bills
were enacted underscores where Congress stands on the issue.
The very objections Congress has expressed over global
warming measures are precisely those being realized now that
EPA's regulations are coming into force. A clear example of
this can be seen with the 95-0 passage of S. Res. 98, the
Senate Byrd-Hagel Resolution. This 1997 resolution expressed
the sense of the Senate that the U.S. should not become a
signatory to any multilateral global warming treaty that either
exempted developing nations like China or harmed the U.S.
economy. The Kyoto Protocol did both, and indeed neither
President Clinton nor his successors has submitted the treaty
to the Senate for ratification. The very fears raised by the
Senate in its Byrd-Hagel resolution--disproportionate and
significant harm to the American economy--are now being
realized under EPA's regulations.
Proponents of EPA's agenda have stated that the Supreme
Court's decision should be the last word, but this is
incorrect. The Supreme Court did not mandate that the EPA make
an endangerment finding and indeed no administration whether
Democrat or Republican has ever made such an unprecedented
finding. While it is the role of the Supreme Court to interpret
existing legislation such as the CAA, Congress is free to amend
or clarify that legislation if it believes the Supreme Court
concluded wrongly or that circumstances necessitate a change in
the law. Indeed, the current Congress would be remiss if it
ignored the deleterious impact of EPA's regulatory agenda in
favor of a highly controversial 5 to 4 Supreme Court decision
and its interpretation of Congressional intent when the CAA
which was enacted--decades before global warming emerged as an
issue.
Further, it should be noted that in Massachusetts v. EPA
the issue before the Court was standards for motor vehicles and
``whether EPA has the statutory authority to regulate
greenhouse emissions from new motor vehicles'' under Section
202(a) of the Clean Air Act. The Court concluded that EPA had
the authority to regulate such emissions under section
202(a)(1) of the CAA Act ``[i]f EPA makes a finding of
endangerment'' under the provision, stating that ``EPA must
ground its reasons for action or inaction in the statute.'' The
Court never addressed standards for regulation of greenhouse
gases from stationary sources. To the extent that EPA has moved
forward with regulation of motor vehicle emissions, H.R. 910
allows EPA's regulation of greenhouse gases from motor vehicles
under its light-duty vehicle rule and proposed medium and heavy
duty truck rule, while prohibiting the agency's expansion of
such regulation for future years and preventing the agency from
moving forward with its regulation of greenhouse gas emissions
from stationary sources.

Hearings

The Subcommittee on Energy and Power on February 9, 2011
held a legislative hearing on the discussion draft of ``The
Energy Tax Prevention Act'' and received testimony from:
The Honorable James M. Inhofe, U.S. Senator,
Ranking Member, Committee on Environment and Public Works
The Honorable Lisa Jackson, Administrator, U.S.
Environmental Protection Agency
The Honorable Greg Abbott, Attorney General, State
of Texas
Harry C. Alford, President and CEO, National Black
Chamber of Commerce
Steve Rowlan, General Manager, Environmental
Affairs, Nucor Corporation
James Pearce, Director of Manufacturing, FMC
Corporation
Steve Cousins, Vice President, Lion Oil Company
Philip Nelson, President, Illinois Farm Bureau
Lonnie N. Carter, President and CEO, Santee Cooper
Betsey Blaisdell, Senior Manager of Environmental
Stewardship, The Timberland Company
Fred T. Harnack, General Manager, Environmental
Affairs, U.S. Steel Corporation
Peter S. Glaser, Partner, Troutman Sanders LLP
Margo Thorning, Senior Vice President and Chief
Economist, American Council for Capital Formation
Lynn R. Goldman, American Public Health
Association
James N. Goldstene, Executive Officer, California
Air Resources Board
The Subcommittee on Energy and Power on March 1, 2011 held
a hearing on ``EPA's Greenhouse Gas Regulations and Their
Effect on American Jobs.'' The Subcommittee received testimony
from:
Mike Carey, President, Ohio Coal Association
Forrest McConnell, President, McConnell Honda &
Acura (on behalf of the National Automobile Dealers
Association)
Dan Reicher, Professor of Law and Executive
Director of the Steyer-Taylor Center for Energy Policy and
Finance, Stanford Law School
Hugh A. Joyce, President, James River Air
Conditioning Company, Inc. (on behalf of National Federation of
Independent Business)
W. David Montgomery, Vice President, Charles River
Associates
Paul Cicio, President, Industrial Energy Consumers
of America
The Honorable Gina A. McCarthy, Assistant
Administrator, Office of Air and Radiation, U.S. Environmental
Protection Agency
The Subcommittee on Energy and Power on March 8, 2011 held
a hearing on ``Climate Science and EPA's Greenhouse Gas
Regulations.'' The Subcommittee received testimony from:
Dr. Richard Somerville, Distinguished Professor
Emeritus, Scripps Institution of Oceanography, University of
California, San Diego
Dr. Christopher Field, Director, Department of
Global Ecology, Carnegie Institution of Washington
Dr. Francis W. Zwiers, Director, Pacific Climate
Impacts Consortium, University of Victoria
Dr. Donald Roberts, Professor Emeritus, Uniformed
Services University of the Health Sciences
Dr. John R. Christy, Director, Earth System
Science Center, University of Alabama in Huntsville
Dr. Roger Pielke, Sr., Senior Research Scientist,
Cooperative Institute for Research in Environmental Sciences,
University of Colorado at Boulder
Dr. Knute Nadelhoffer, Director, University of
Michigan Biologicial Station, University of Michigan

Committee Consideration

On February 2, 2011, Chairman Fred Upton and Subcommittee
on Energy and Power Chairman Ed Whitfield released a discussion
draft of the Energy Tax Prevention Act of 2011. On March 3,
2011, the proposed legislation was introduced as H.R. 910.
On March 10, the Subcommittee on Energy and Power reported
the bill and favorably recommended it to the full Committee.
During the markup, no amendments were offered.
On March 14, 2011 and March 15, 2011 the Committee on
Energy and Commerce met in open markup session. During the
markup, eleven amendments were offered of which one was
adopted, as amended. On March 15, 2011, the Committee ordered
H.R. 910 favorably reported to the House, amended.

Committee Votes

Clause 3(b) of rule XII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Mr. Upton to order H.R. 910, reported to the House,
as amended, was agreed to by a record vote of 34 yeas and 19
nays. The following reflects the recorded votes taken during
the Committee consideration, including the names of those
Members voting for and against.

Committee Oversight Findings

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee made findings that are
reflected in this report.

Statement of General Performance, Goals and Objectives

H.R. 910 amends the CAA to clarify that the Administrator
of the Environmental Protection Agency does not have the
authority to promulgate any regulation concerning, take action
relating to, or take into consideration the emission of a
greenhouse gas to address climate change, and for other
purposes.

New Budget Authority, Entitlement Authority, and Tax Expenditures

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the committee finds that H.R.
910, the Energy Tax Prevention Act of 2011, would result in no
new or increased budget authority, entitlement authority, or
tax expenditures or revenues.

Earmark

In compliance with clause 9(e), 9(f), and 9(g) of rule XXI,
the committee finds that H.R. 910, the energy Tax Prevention
Act of 2011, contains no earmarks, limited tax benefits, or
limited tariff benefits.

Committee Cost Estimate

The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.

Congressional Budget Office Estimate

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:

March 30, 2011.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 910, the Energy
Tax Prevention Act of 2011.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susanne S.
Mehlman.
Sincerely,
Douglas W. Elmendorf.
Enclosure.

H.R. 910--Energy Tax Prevention Act of 2011

Summary: H.R. 910 would amend the Clean Air Act to prohibit
the Environmental Protection Agency (EPA) from regulating
greenhouse gases (GHGs) to address climate change. The bill
would create exceptions for various programs in current law,
including emission standards for vehicles and EPA's renewable
fuel standard. Because certain EPA activities associated with
regulating GHGs would be prohibited under the bill, CBO
estimates that enacting this legislation would save $57 million
in 2012 and about $250 million over the 2012-2016 period,
assuming that appropriations in those years were reduced
accordingly.
Pay-as-you-go procedures do not apply to H.R. 910 because
the bill would not affect direct spending or revenues.
H.R. 910 contains an intergovernmental mandate as defined
in the Unfunded Mandates Reform Act (UMRA) because it would
expand an existing preemption of state laws that regulate
greenhouse gas emissions from motor vehicles. Although the
preemption would limit the application of state law, CBO
estimates that it would impose no duty on state governments
that would result in additional spending.
The bill contains no new private-sector mandates as defined
in UMRA.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 910 is shown in the following table.
The costs of this legislation fall within budget function 300
(natural resources and environment).

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2012-
2012 2013 2014 2015 2016 2016
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level....................... -57 -58 -59 -60 -62 -296
Estimated Outlays................................... -23 -49 -58 -60 -60 -250
----------------------------------------------------------------------------------------------------------------

Basis of estimate: For this estimate, CBO assumes that H.R.
910 will be enacted by the end of fiscal year 2011, that
appropriations for regulating GHGs will be reduced, and that
resulting outlay savings will follow historical spending
patterns for identical and similar programs.
According to EPA, appropriations allocated to support
activities related to regulating GHGs totaled about $17 million
in 2010. Funding at that annual rate is also provided for 2011
under the Additional Continuing Appropriations Amendments, 2011
(Public Law 112-6).\1\ Based on information from EPA, CBO
estimates that for 2012 the agency will require an additional
$40 million in appropriations under current law to support
various activities related to regulating GHGs, including
promulgating New Source Performance Standards, establishing
permitting requirements, and continuing to support ongoing
efforts associated with the GHG reporting registry. Under this
legislation, such activities would be prohibited. Thus, CBO
estimates that enacting the legislation would reduce the need
for appropriations in 2012 by about $57 million.
---------------------------------------------------------------------------
\1\A full-year appropriation for EPA programs in 2011 has not yet
been enacted. for this estimate, CBO assumes that the partial-year
funding already provided will be increased proportionately--
annualized--to provide full-year funding.
---------------------------------------------------------------------------
In subsequent years, it is not certain whether EPA would
pursue additional activities to meet requirements related to
regulating GHGs under current law or whether current activities
would be maintained. However, assuming funding levels in those
years would remain close to the 2012 level with adjustments for
inflation, CBO estimates that enacting the legislation would
result in savings of $250 million over the 2012-2016 period, if
appropriations for EPA over that period were reduced
accordingly.
Intergovernmental and private-sector impact: H.R. 910
contains an intergovernmental mandate as defined in UMRA
because it would expand an existing preemption of state laws
that regulate GHGs from motor vehicles. Under current law,
California may obtain a waiver from EPA to establish its own
standard for GHGs from motor vehicles. Once EPA has approved
the waiver, other states may adopt the California standard. The
bill would prevent EPA from approving such waivers, thus
expanding the preemption. Although the preemption would limit
the application of state law, CBO estimates that it would
impose no duty on state governments that would result in
additional spending.
The bill contains no new private-sector mandates as defined
in UMRA.
Estimate prepared by: Federal Costs: Susanne S. Mehlman;
Impact on State, Local, and Tribal Governments: Ryan Miller;
Impact on the Private Sector: Amy Petz.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.

Federal Mandates Statement

The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.

Advisory Committee Statement

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.

Applicability to Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the congressional Accountability Act.

Section-by-Section Analysis of Legislation

Section 1. Short title

Section 1 provides the short title for the legislation, the
``Energy Tax Prevention Act of 2011.''

Section 2. No regulation of emissions of greenhouse gases

Section 2 amends the General Provisions of the Clean Air
Act by adding a new Section 330. Section 330(a) expressly
defines the greenhouse gases that are to be excluded from any
climate change-related regulation (e.g., water vapor, carbon
dioxide, and methane). Section 330(b)(1) makes clear that the
Administrator of EPA may not promulgate regulations or take
action with respect to greenhouse gases to address climate
change under the Clean Air Act. The term ``air pollutant'' is
clarified to exclude greenhouse gases for the purposes of
addressing climate change.
Section 330(b)(2) provides for the following
exceptions to the prohibition on the Administrator's greenhouse
gas regulatory authority: H.R. 910 allows EPA to implement
emissions standards already promulgated by the agency for Model
Year 2012-2016 passenger cars and trucks, and proposed by EPA
for Model Years 2014-2018 for medium and heavy-duty trucks.
H.R. 910 allows EPA to carry out statutorily authorized
activities relating to its renewable fuel standard program
which requires that transportation fuel sold in the United
States contain a minimum volume of renewable fuel.
H.R. 910 allows EPA to carry out statutorily
authorized Federal research, development, and demonstration
programs addressing climate change. H.R. 910 allows EPA to
implement Title VI under the CAA which relates to stratospheric
ozone protection and compliance with the Montreal Protocol on
Substances That Deplete the Ozone Layer, to which the United
States is a signatory. H.R. 910 does not preclude EPA from
continuing to participate fully in the Montreal Protocol
process and related international negotiations.
H.R. 910 allows EPA to continue to require
utilities to gather and report information on greenhouse gas
emissions.
Section 330(b)(3) clarifies that the exceptions in (b)(2)
do not trigger regulatory obligations under part C of Title I
(``Prevention of Significant Deterioration of Air Quality'') or
Title V (``Permits'') of the Clean Air Act.
Section 330(b)(4) expressly repeals prior rulemakings by
EPA relating to regulating greenhouse gases to address climate
change.
Section 330(b)(5) states that nothing in the Act affects
State authority to adopt and enforce State laws and regulations
pertaining to greenhouse gases; however, any changes States
have adopted in their State implementation plans and Title V
operating permit programs with respect to greenhouse gases are
not federally enforceable and are deemed stricken.

Section 3. Regulation of automobiles

Section 3 amends Clean Air Act section 209(b) to exclude
greenhouse gases from the Administrator's waiver authority for
new motor vehicles or new motor vehicle engines for Model Year
2017 and any other subsequent model year. Subject to this
limitation, nothing in the Act precludes states from pursuing
their own state greenhouse gas policies or regimes. Further,
nothing in the Act affects the National Highway Traffic Safety
Administration's exclusive authority to set fuel economy
standards for motor vehicles.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):

CLEAN AIR ACT

* * * * * * *

TITLE II--EMISSION STANDARDS FOR MOVING SOURCES

* * * * * * *

Part A--Motor Vehicle Emission and Fuel Standards

* * * * * * *

STATE STANDARDS

Sec. 209. (a) * * *
(b)(1) * * *

* * * * * * *

(4) With respect to standards for emissions of greenhouse
gases (as defined in section 330) for model year 2017 or any
subsequent model year new motor vehicles and new motor vehicle
engines--
(A) the Administrator may not waive application of
subsection (a); and
(B) no waiver granted prior to the date of enactment
of this paragraph may be construed to waive the
application of subsection (a).

* * * * * * *

TITLE III--GENERAL

* * * * * * *

SEC. 330. NO REGULATION OF EMISSIONS OF GREENHOUSE GASES.

(a) Definition.--In this section, the term ``greenhouse gas''
means any of the following:
(1) Water vapor.
(2) Carbon dioxide.
(3) Methane.
(4) Nitrous oxide.
(5) Sulfur hexafluoride.
(6) Hydrofluorocarbons.
(7) Perfluorocarbons.
(8) Any other substance subject to, or proposed to be
subject to, regulation, action, or consideration under
this Act to address climate change.
(b) Limitation on Agency Action.--
(1) Limitation.--
(A) In general.--The Administrator may not,
under this Act, promulgate any regulation
concerning, take action relating to, or take
into consideration the emission of a greenhouse
gas to address climate change.
(B) Air pollutant definition.--The definition
of the term ``air pollutant'' in section 302(g)
does not include a greenhouse gas.
Notwithstanding the previous sentence, such
definition may include a greenhouse gas for
purposes of addressing concerns other than
climate change.
(2) Exceptions.--Paragraph (1) does not prohibit the
following:
(A) Notwithstanding paragraph (4)(B),
implementation and enforcement of the rule
entitled ``Light-Duty Vehicle Greenhouse Gas
Emission Standards and Corporate Average Fuel
Economy Standards'' (as published at 75 Fed.
Reg. 25324 (May 7, 2010) and without further
revision) and finalization, implementation,
enforcement, and revision of the proposed rule
entitled ``Greenhouse Gas Emissions Standards
and Fuel Efficiency Standards for Medium- and
Heavy-Duty Engines and Vehicles'' published at
75 Fed. Reg. 74152 (November 30, 2010).
(B) Implementation and enforcement of section
211(o).
(C) Statutorily authorized Federal research,
development, and demonstration programs
addressing climate change.
(D) Implementation and enforcement of title
VI to the extent such implementation or
enforcement only involves one or more class I
substances or class II substances (as such
terms are defined in section 601).
(E) Implementation and enforcement of section
821 (42 U.S.C. 7651k note) of Public Law 101-
549 (commonly referred to as the ``Clean Air
Act Amendments of 1990'').
(3) Inapplicability of provisions.--Nothing listed in
paragraph (2) shall cause a greenhouse gas to be
subject to part C of title I (relating to prevention of
significant deterioration of air quality) or considered
an air pollutant for purposes of title V (relating to
permits).
(4) Certain prior agency actions.--The following
rules and actions (including any supplement or revision
to such rules and actions) are repealed and shall have
no legal effect:
(A) ``Mandatory Reporting of Greenhouse
Gases'', published at 74 Fed. Reg. 56260
(October 30, 2009).
(B) ``Endangerment and Cause or Contribute
Findings for Greenhouse Gases Under Section
202(a) of the Clean Air Act'', published at 74
Fed. Reg. 66496 (December 15, 2009).
(C) ``Reconsideration of Interpretation of
Regulations That Determine Pollutants Covered
by Clean Air Act Permitting Programs'',
published at 75 Fed. Reg. 17004 (April 2, 2010)
and the memorandum from Stephen L. Johnson,
Environmental Protection Agency (EPA)
Administrator, to EPA Regional Administrators,
concerning ``EPA's Interpretation of
Regulations that Determine Pollutants Covered
by Federal Prevention of Significant
Deterioration (PSD) Permit Program'' (December
18, 2008).
(D) ``Prevention of Significant Deterioration
and Title V Greenhouse Gas Tailoring Rule'',
published at 75 Fed. Reg. 31514 (June 3, 2010).
(E) ``Action To Ensure Authority To Issue
Permits Under the Prevention of Significant
Deterioration Program to Sources of Greenhouse
Gas Emissions: Finding of Substantial
Inadequacy and SIP Call'', published at 75 Fed.
Reg. 77698 (December 13, 2010).
(F) ``Action To Ensure Authority To Issue
Permits Under the Prevention of Significant
Deterioration Program to Sources of Greenhouse
Gas Emissions: Finding of Failure To Submit
State Implementation Plan Revisions Required
for Greenhouse Gases'', published at 75 Fed.
Reg. 81874 (December 29, 2010).
(G) ``Action to Ensure Authority To Issue
Permits Under the Prevention of Significant
Deterioration Program to Sources of Greenhouse
Gas Emissions: Federal Implementation Plan'',
published at 75 Fed. Reg. 82246 (December 30,
2010).
(H) ``Action to Ensure Authority to Implement
Title V Permitting Programs Under the
Greenhouse Gas Tailoring Rule'', published at
75 Fed. Reg. 82254 (December 30, 2010).
(I) ``Determinations Concerning Need for
Error Correction, Partial Approval and Partial
Disapproval, and Federal Implementation Plan
Regarding Texas Prevention of Significant
Deterioration Program'', published at 75 Fed.
Reg. 82430 (December 30, 2010).
(J) ``Limitation of Approval of Prevention of
Significant Deterioration Provisions Concerning
Greenhouse Gas Emitting-Sources in State
Implementation Plans'', published at 75 Fed.
Reg. 82536 (December 30, 2010).
(K) ``Determinations Concerning Need for
Error Correction, Partial Approval and Partial
Disapproval, and Federal Implementation Plan
Regarding Texas Prevention of Significant
Deterioration Program; Proposed Rule'',
published at 75 Fed. Reg. 82365 (December 30,
2010).
(L) Except for actions listed in paragraph
(2), any other Federal action under this Act
occurring before the date of enactment of this
section that applies a stationary source
permitting requirement or an emissions standard
for a greenhouse gas to address climate change.
(5) State action.--
(A) No limitation.--This section does not
limit or otherwise affect the authority of a
State to adopt, amend, enforce, or repeal State
laws and regulations pertaining to the emission
of a greenhouse gas.
(B) Exception.--
(i) Rule.--Notwithstanding
subparagraph (A), any provision
described in clause (ii)--
(I) is not federally
enforceable;
(II) is not deemed to be a
part of Federal law; and
(III) is deemed to be
stricken from the plan
described in clause (ii)(I) or
the program or permit described
in clause (ii)(II), as
applicable.
(ii) Provision defined.--For purposes
of clause (i), the term ``provision''
means any provision that--
(I) is contained in a State
implementation plan under
section 110 and authorizes or
requires a limitation on, or
imposes a permit requirement
for, the emission of a
greenhouse gas to address
climate change; or
(II) is part of an operating
permit program under title V,
or a permit issued pursuant to
title V, and authorizes or
requires a limitation on the
emission of a greenhouse gas to
address climate change.
(C) Action by administrator.--The
Administrator may not approve or make federally
enforceable any provision described in
subparagraph (B)(ii).

* * * * * * *

DISSENTING VIEWS

H.R. 910 was introduced on March 3, 2011, by Chairman Fred
Upton and Subcommittee Chairman Ed Whitfield. Senator James
Inhofe introduced a companion bill in the Senate (S. 482) on
the same date.
The Upton-Inhofe bill reported by the Committee on Energy
and Commerce legislatively repeals a scientific finding by the
Environmental Protection Agency that greenhouse gases endanger
public health and welfare. The Upton-Inhofe bill would also
broadly eliminate EPA's authority to address emissions of
greenhouse gases and the danger of climate change. This is an
unprecedented action by members of Congress to substitute their
opinions for a scientific finding that EPA made based on the
best available scientific research and understanding.
The bill is titled ``The Energy Tax Prevention Act of
2011'' and, according to its sponsors, has a primary purpose of
stopping the Environmental Protection Agency (EPA) from
``imposing a backdoor cap-and-trade tax.''\1\ However, EPA does
not have taxing authority, nor has EPA proposed to establish a
cap and trade program. In fact, EPA officials have recently
stated that they will not establish a cap on carbon
pollution.\2\
---------------------------------------------------------------------------
\1\House Committee on Energy and Commerce, Press Release, Upton,
Whitfield, Inhofe Unveil Energy Tax Prevention Act to Protect America's
Jobs & Families (Feb. 7, 2011) (online at
http://energycommerce.house.gov/news/PRArticle.aspx?NewsID=8178).
\2\EPA Promises to Avoid Cap, But Some Utilities Want Trade, E&E
News (Feb. 4, 2011).
---------------------------------------------------------------------------
The bill sponsors also assert that the purpose of the bill
is to stop rising gas prices, claiming that planned EPA
regulations will restrict oil supplies and cause gas prices to
rise. This claim was labeled ``false'' by Politifact, a project
of the St. Petersburg Times to fact check statements by members
of Congress and other public figures.\3\ The claim is flawed in
multiple respects. First, gas prices are rising now, and there
is widespread consensus that the increase is due to concerns
about unrest in the Middle East.\4\ EPA has not yet even
proposed greenhouse gas regulations that would apply to oil
refineries, and it will take years before any such regulations
are final and require any control of greenhouse gas emissions.
Nor is there any indication that the regulations will be
particularly stringent or burdensome. Also, there is general
agreement that gas prices are largely driven by the price of
oil, which is determined on the world market and is unaffected
by any EPA greenhouse gas regulations.
---------------------------------------------------------------------------
\3\Fred Upton Says Pending Bill to Block EPA Curbs of Greenhouse
Gases Will Stop Rising Gas Prices,' PolitiFact (Mar. 14, 2011) (online
at http://www.politifact.com/truth-o-meter/statements/2011/mar/14/fred-
upton/fred-upton-says-pending-bill-block-epa-curbs-green/).
\4\See, Libyan Unrest Keeps Oil Price on the Boil, Financial Times
(Mar. 7, 2011).
---------------------------------------------------------------------------
In fact, EPA's greenhouse gas regulations will
significantly reduce Americans' spending on gasoline. EPA has
issued greenhouse gas regulations for light-duty vehicles for
model years 2012-2016, and those regulations are projected to
save consumers on average $3,000 at the pump over the life of
the vehicles.\5\ The Upton-Inhofe bill would block EPA from
extending and strengthening these standards for vehicles after
2016, and would even endanger the existing standards by
creating a new legal vulnerability.
---------------------------------------------------------------------------
\5\U.S. EPA, EPA and NHTSA Finalize Historic National Program to
Reduce Greenhouse Gases and Improve Fuel Economy for Cars and Trucks
(Apr. 2010) (online at http://www.epa.gov/otaq/climate/regulations/
420f10014.htm).
---------------------------------------------------------------------------
The bill is also premised on the claim that climate change
is a hoax, as stated by Senator Inhofe, and therefore EPA's
scientific finding of endangerment is invalid and action to
address the problem is unnecessary. At a hearing on climate
science on March 8, 2011, held at the request of Committee
Democrats, eminent climate scientists presented overwhelming
scientific evidence that the earth is warming, that observed
climate change is primarily caused by human activities, and
that harmful and costly impacts of climate change are already
occurring and will become more severe over time.\6\ In an
editorial on this hearing and the Upton-Inhofe legislation, the
editors of Nature, one of the world's two top science journals,
stated ``the legislation is fundamentally anti-science, just as
the rhetoric that supports it is grounded in willful
ignorance.''\7\
---------------------------------------------------------------------------
\6\Energy & Commerce Committee, Energy & Power Subcommittee,
Hearing on Climate Science and EPA's Greenhouse Gas Regulations (Mar.
8, 2011).
\7\Into Ignorance, Nature (Mar. 16, 2011)(online at http://
www.nature.com/nature/journal/v471/n7338/full/471265b.html).
---------------------------------------------------------------------------
In summary, the Upton-Inhofe bill would:
Overturn the Supreme Court's opinion finding that
EPA has the authority to regulate greenhouse gases under the
Clean Air Act.
Overturn EPA's scientific determination that
greenhouse gases endanger human health and the environment.
Prohibit EPA from requiring stationary sources to
reduce greenhouse gas emissions.
Prohibit EPA from requiring additional reductions
of greenhouse gas emissions from motor vehicles and repeal
California's authority to regulate greenhouse gas emissions
from motor vehicles.
Prohibit EPA from requiring reductions of
greenhouse gas emissions from other mobile sources, such as
planes, trains, boats, and large construction equipment.
Prohibit EPA from enforcing existing greenhouse
gas reporting requirements.
Interfere with EPA's implementation of Title VI of
the Clean Air Act, which addresses ozone-depleting chemicals
and substitutes for such chemicals, as well as undermine
Administration negotiating positions under the Montreal
Protocol on Substances that Deplete the Ozone Layer.
Create legal uncertainty about the status of the
recent motor vehicle standards adopted by EPA.
Call into question EPA's authority to implement
voluntary programs to reduce greenhouse gas emissions.
Create new litigation opportunities for opponents
of regulation of conventional pollutants.
The bill is opposed by: the American Lung Association\8\,
American Public Health Association,\9\ American Thoracic
Society; Asthma and Allergy Foundation of America; Physicians
for Social Responsibility; Trust for America's Health;\10\
1,882 doctors, nurses and other medical professionals;\11\
retired high-ranking U.S. military officers;\12\ 2,505
scientists;\13\ Natural Resources Defense Council; League of
Conservation Voters; Center for Biological Diversity;
Environment America; Conservation Law Foundation; National
Audubon Society; The Wilderness Society; Earthjustice; U.S.
Climate Action Network; Center for American Progress Action
Fund; American Rivers; Sierra Club; Defenders of Wildlife;
Environmental Defense Fund; and Union of Concerned Scientists,
among others.\14\
---------------------------------------------------------------------------
\8\Letter from Charles D. Connor, President and CEO of the American
Lung Association, to Rep. Ed Whitfield and Rep. Bobby L. Rush (Mar. 10,
2011) (online at http://edit-democrats.energycommerce.house.gov/sites/
default/files/image_uploads/HR9100ppositi
on_03.10.11_AmericanLungAssociation.pdf).
\9\Letter from Georges C. Benjamin, Executive Director of the
American Public Health Association, to Rep. Ed Whitfield and Rep. Bobby
Rush (Mar. 9, 2011) (online at http://edit-
democrats.energycommerce.house.gov/sites/default/files/image_uploads/
APHAOppositionLetter_03.10.11.pdf).
\10\Letter from Charles Connor, President and CEO of the American
Lung Association; Bill McLin, President and CEO of the Asthma and
Allergy Foundation of America; Georges C. Benjamin, Executive Director
of the American Public Health Association; Peter Wilk, Executive
Director of Physicians for Social Responsibility; Dean E. Schraufnagel,
President of the American Thoracic Society; and Jeffrey Levi, Executive
Director of the Trust for America's Health; to the U.S. House of
Representatives (Mar. 14, 2011) (online at http://
democrats.energycommerce.house.gov/sites/default/files/image_uploads/
HealthOrganizationsOpposeHR910_0.pdf).
\11\Letter from Health and Medical Professionals, to the U.S. House
of Representatives (Feb. 9, 2011) (online at http://
democrats.energycommerce.house.gov/sites/default/files/image_uploads/
House%20Doc%20Letter%20Final_0.pdf).
\12\Letter from Retired US Air Force Lt. General Norman Seip,
Retired US Navy Rear Admiral Stuart Platt, and Retired US Army Maj.
General George Buskirk, to Rep. Henry Waxman (Mar. 10, 2011) (online at
http://democrats.energycommerce.house.gov/sites/default/files/
image_uploads/Military_OpposeUptonInhofe_03.10.11.pdf).
\13\Letter from 2,505 scientists, to the U.S. House of
Representatives (Feb. 2011) (online at http://
democrats.energycommerce.house.gov/sites/defaultf/files/image_uploads/
LettersScientists_03.08.11.pdf).
\14\Letter from the Natural Resources Defense Council, League of
Conservation Voters, Center for Biological Diversity, Environment
America, Conservation Law Foundation, National Audubon Society, The
Wilderness Society, Earthjustice, U.S. Climate Action Network, Center
for American Progress Action Fund, American Rivers, Physicians for
Social Responsibility, Sierra Club, Defenders of Wildlife,
Environmental Defense Fund, and the Union of Concerned Scientists, to
Rep. Ed Whitfield and Rep. Bobby Rush (Mar. 9, 2011) (online at http://
edit-Democrats.energycommerce.house.gov/sites/default/files/
image_uploads/HR910Opposition_03.10.11_Organizations.pdf).
---------------------------------------------------------------------------
In addition, last year 120 public health associations
stated their opposition to ``any efforts to weaken, delay or
block the EPA from protecting the public's health'' from risks
from climate change,\15\ and 255 members of the National
Academy of Sciences affirmed the threat from climate change and
called for action to reduce it.\16\
---------------------------------------------------------------------------
\15\Letter from 120 Public Health Associations, to President Barack
Obama, the U.S. Senate, and the U.S. House of Representatives (Sep. 28,
2010) (online at http://www.apha.org/NR/rdonlyres/2405CEFA-
854D4EE0814E-86C8552A3CBB/0/PHgroupssignonclimatechange92810final.pdf).
\16\255 Members of the National Academy of Sciences, Climate Change
and the Integrity of Science, Science Magazine (May 7, 2010) (online at
http://democrats.energycommerce.house.gov/sites/default/files/
image_uploads/LetterNationalAcademies_03.08.11.pdf).
---------------------------------------------------------------------------
I. Upton-Inhofe Overturns Massachusetts v. EPA
The Upton-Inhofe bill overturns the landmark Supreme Court
case Massachusetts v. EPA, which held that greenhouse gases,
including carbon dioxide, are ``air pollutants'' under the
Clean Air Act that EPA must regulate if they endanger public
health or welfare.\17\ The bill adds a new section 330(b)(1)(B)
to the Clean Air Act that provides that the term ```air
pollutant' . . . does not include a greenhouse gas.''
Additionally, new section 330(b)(1)(A) would amend the Clean
Air Act to state that EPA may not take action on carbon
pollution or even ``take into consideration'' carbon pollution
in the future regardless of the danger it poses to public
health or welfare.
---------------------------------------------------------------------------
\17\Massachusetts v. EPA, 127 S. Ct. 1438 (2007).
---------------------------------------------------------------------------

II. Upton-Inhofe Repeals EPA's Endangerment Finding

New section 330(b)(4)(B) of the Clean Air Act would
legislatively repeal EPA's scientific determination that
greenhouse gases threaten public health and welfare, commonly
known as the endangerment finding. This determination was made
in 2009, when the EPA Administrator found that the current and
projected concentrations of the six key greenhouse gases--
carbon dioxide (CO2), methane (CH4),
nitrous oxide (N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), and sulfur hexafluoride
(SF6)--in the atmosphere threaten the public health
and welfare of current and future generations.\18\
---------------------------------------------------------------------------
\18\Environmental Protection Agency, Endangerment and Cause or
Contribute Findings for Greenhouse Gases Under Section 202(a) of the
Clean Air Act, 74 Fed. Reg. 66496 (Dec. 15, 2009).
---------------------------------------------------------------------------
Legislatively repealing the scientific determination
directly conflicts with the consensus of climate scientists and
the world's most authoritative scientific organizations,
including:
The National Academy of Sciences, which reported
in 2010: ``Climate change is occurring, is caused largely by
human activities, and poses significant risks for--and in many
cases is already affecting--a broad range of human and natural
systems.''\19\
---------------------------------------------------------------------------
\19\National Research Council, Advancing the Science of Climate
Change (2010)(online at http://www.nap.educatalog.php?record_id=12782).
---------------------------------------------------------------------------
The premier scientific institutions of all of the
world's major economies (including the United States, the
United Kingdom, France, Germany, Russia, Japan, China, Brazil,
and India), which have warned that ``[t]he need for urgent
action to address climate change is now indisputable.''\20\
---------------------------------------------------------------------------
\20\G8+5 Academies' joint statement: Climate change and the
transformation of energy technologies for a low carbon future, Academia
Brasileira de Ciencias, Brazil, Indian National Science Academy, India,
Academy of Science of South Africa, South Africa, Royal Society of
Canada, Canada, Accademia Nazionale dei Lincei, Italy, Royal Society,
United Kingdom, Chinese Academy of Sciences, China, Science Council of
Japan, Japan, National Academy of Sciences, United States of America,
Academie des Sciences, France, Academia Mexicana de Ciencias, Mexico,
Deutsche Akademie der Naturforscher Leopoldina, Germany, Russian
Academy of Sciences, Russia (online at http://
www.nationalacademies.org/includes/G8+5energy-climate09.pdf).
---------------------------------------------------------------------------
The American Association for the Advancement of
Science, the American Geophysical Union, and the American
Meteorological Society, along with 15 other leading scientific
organizations, which have stated: ``If we are to avoid the most
severe impacts of climate change, emissions of greenhouse gases
must be dramatically reduced.''\21\
---------------------------------------------------------------------------
\21\Letter to the U.S. Senate from the Presidents and Executive
Directors of American Association for the Advancement of Science,
American Chemical Society, American Geophysical Union, American
Institute of Biological Sciences, American Meteorological Society,
American Society of Agronomy, American Society of Plant Biologists,
American Statistical Association, Association of Ecosystem Research
Centers, Botanical Society of America, Crop Science Society of America,
Ecological Society of America, Natural Science Collections, Alliance
Organization of Biological Field Stations, Society for Industrial and
Applied Mathematics, Society of Systematic Biologists, Soil Science
Society of America, University Corporation for Atmospheric Research
(Oct. 21, 2009) (online at http://www.aaas.org/news/releases/2009/
media/1021climate_letter.pdf).
---------------------------------------------------------------------------
Thirteen federal departments and agencies,
including NASA, the National Science Foundation, and the
Department of Defense, which reported in 2009 that global
warming is ``unequivocal and primarily human-induced'' and that
``widespread climate-related impacts are occurring now and are
expected to increase.''\22\
---------------------------------------------------------------------------
\22\Global Climate Change Impacts in the United States, U.S. Global
Change Research Program (2009) (online at http://globalchange.gov/
publications/reports/scientific-assessments/us-impacts). These agencies
participate in the U.S. Global Change Research Program (USGCRP). The
USGCRP began as a presidential initiative in 1989 and was mandated by
Congress in the Global Change Research Act of 1990 (P.L. 101-606),
which called for ``a comprehensive and integrated United States
research program which will assist the Nation and the world to
understand, assess, predict, and respond to human-induced and natural
processes of global change.''
---------------------------------------------------------------------------
The Intergovernmental Panel on Climate Change
(IPCC), which has reported: ``Warming of the climate system is
unequivocal, as is now evident from observations of increases
in global average air and ocean temperatures, widespread
melting of snow and ice and rising global average sea
level.''\23\
---------------------------------------------------------------------------
\23\Climate Change 2007: Synthesis Report, Intergovernmental Panel
on Climate Change (2007) (online at http://www.ipcc.ch/
publications_and_data/ar4/syr/en/spm.html). The IPCC is the leading
international body for the assessment of climate change. It was
established in 1988 by the World Meteorological Organization (WMO) and
the United Nations Environment Programme (UNEP) to assess the ``risk of
human-induced climate change.'' The Panel is open to all members of the
WMO and UNEP, and includes more than 2500 scientists from around the
world.
---------------------------------------------------------------------------

III. Upton-Inhofe Prohibits EPA from Regulating Stationary Sources

New section 330(b)(1)(A) provides that EPA may not take
action on carbon pollution or even ``take into consideration''
carbon pollution in the future. It states:

The Administrator may not, under [the Clean
Air Act], promulgate any regulation concerning,
take action relating to, or take into
consideration the emission of a greenhouse gas
to address climate change.

This section has two primary effects on EPA authority to
reduce emissions of greenhouse gases from stationary sources.
First, it prohibits EPA from requiring permits to address
greenhouse gases under its ``prevention of significant
deterioration'' (PSD) program.\24\ Second, it blocks EPA from
setting minimum control requirements for major new and existing
sources under the ``new source performance standards'' (NSPS)
provisions.\25\
---------------------------------------------------------------------------
\24\ CAA section 165.
\25\ CAA section 111.
---------------------------------------------------------------------------
A. Impact on the PSD Program
Once EPA regulated greenhouse gases from motor vehicles,
the PSD permit review requirement applied automatically
beginning January 2, 2011. It requires that major new
facilities or existing facilities making major modifications
that significantly increase emissions undergo a review of
options to minimize increases in emissions.\26\ In May 2010,
EPA finalized a ``tailoring rule'' to limit the permit review
requirements to only the largest sources.\27\ Until June 30,
2011, only sources subject to PSD for other pollutants will be
required to consider greenhouse gases in their permits.\28\
From July 1, 2011, to June 30, 2013, only new sources that emit
at least 100,000 tons of greenhouse gases per year or existing
sources that modify and seek to increase pollution by at least
75,000 tons per year will be required to obtain PSD
permits.\29\ EPA has committed to undertake an additional
rulemaking that will be completed before July 1, 2012, which
would consider whether to lower the threshold further, but
would not consider any level below 50,000 tons per year.\30\
---------------------------------------------------------------------------
\26\See CAA sections 165, 169.
\27\U.S. Environmental Protection Agency, Prevention of Significant
Deterioration and Title V Greenhouse Gas Tailoring Rule, Final Rule, 75
Fed. Reg. 31514 (June 3, 2010).
\28\Id. at 31516.
\29\Id.
\30\ Id.; U.S. Environmental Protection Agency, Final Rule:
Prevention of Significant Deterioration and Title V Greenhouse Gas
Tailoring Rule, Fact Sheet (online at: http://www.epa.gov/nsr/
documents/20100413fs.pdf).
---------------------------------------------------------------------------
PSD permit review is done on a case-by-case basis, taking
into account the design and function of the specific facility
undergoing review. The review is carried out by the permitting
authorities, which are typically state or local pollution
control agencies. The process requires consideration of all
options for limiting emissions, followed by the elimination of
those options that are too costly or technically infeasible,
and the selection of the remaining option that permitting
authorities consider to be ``best available control
technology'' (BACT).
In November 2010, EPA issued guidance to state agencies on
implementing the review requirements for greenhouse gases.\31\
The guidance emphasized that the well-established process and
precedents used for other pollutants would also apply to
greenhouse gases. The guidance also clarified what is likely to
be required of sources. It indicated that enemy efficiency
improvements should in most cases constitute BACT for
greenhouse gases.\32\ The guidance suggested that carbon
capture and sequestration would likely be eliminated as an
option for BACT because of high costs.\33\ The guidance further
stated that fuel switching that would fundamentally redefine a
source (such as switching from coal to natural gas) would not
need to be considered as an option.\34\ In addition, EPA has
announced that it intends to modify its policies to provide
that certain permit applications that have been pending with
the agency for a substantial period of time will not need to be
modified to comply with subsequently applicable air quality
requirements, including the greenhouse gas PSD
requirements.\35\
---------------------------------------------------------------------------
\31\ U.S. Environmental Protection Agency, PSD and Title V
Permitting Guidance For Greenhouse Gases (hereinafter Guidance) (Nov.
2010) (online at http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-
0001.pdf); U.S. Environmental Protection Agency, Greenhouse Gas
Permitting Guidance, Summary Slides (hereinafter Summary) (Fall 2010)
(online at: http://epa.gov/air/oaqps/eog/video/pdfs/
GHGPermittingGuidance_Nov18&19Webinars.pdf.)
\32\Guidance at 46; Summary at 17.
\33\Guidance at 36-38; Summary at 24.
\34\Guidance at 29; Summary at 19.
\35\See Declaration of Regina McCarthy, Avenal Power Center, LLC v.
U.S. EPA (Case No.: 1:10-cv-00383-RJL) (Jan. 31, 2011).
---------------------------------------------------------------------------
Forty-nine states have taken actions to ensure that permit
applications could go forward when the greenhouse gas review
requirements went into effect on January 2, 2011.\36\ Only
Texas failed to take the necessary actions. To ensure that
applicants in Texas could receive the necessary pre-
construction permits, EPA issued an interim final rule on
December 23, 2010, to partially disapprove Texas's permitting
program and authorize EPA to issue permits with respect to
greenhouse gases.\37\
---------------------------------------------------------------------------
\36\National Association of Clean Air Agencies, GHG Permitting
Programs Ready to Go by January 2nd (Oct. 28, 2010).
\37\U.S. Environmental Protection Agency, Clean Air Act Permitting
for Greenhouse Gas Emissions--Final Rules Fact Sheet (online at: http:/
/www.epa.gov/nsr/ghgdocs/20101223factsheet.pdf).
---------------------------------------------------------------------------
The Upton-Inhofe bill would eliminate this requirement that
large new or modified sources of greenhouse gases take, or even
consider, any steps to minimize the pollution they will add to
the atmosphere.
B. Impact on the NSPS Program
In December 2010, EPA announced a schedule to establish New
Source Performance Standards (NSPS) for greenhouse gases for
two categories of sources--fossil fuel-fired power plants and
refineries--pursuant to two proposed settlement agreements.
Under the agreements, EPA will propose standards for utilities
and refineries in July 2011 and December 2011 and will finalize
the standards in May 2012 and November 2012, respectively.\38\
---------------------------------------------------------------------------
\38\U.S. Environmental Protection Agency, Settlement Agreements To
Address Greenhouse Gas Emissions From Electric Generating Units and
Refineries, Fact Sheet (online at: www.epa.gov/airquality/pdfs/
settlementfactsheet.pdf).
---------------------------------------------------------------------------
Under an NSPS, EPA establishes performance standards for
new facilities (and modified facilities that significantly
increase emissions) reflecting best demonstrated technology
taking costs into account.\39\ In practice, these standards are
generally less stringent than limits based on best available
control technology. In addition, states must submit plans to
EPA to reduce emissions at existing facilities.\40\ Under these
provisions, states have the flexibility to apply less stringent
standards or longer compliance schedules for various reasons
including costs, remaining useful life of the facility, and
physical impossibility.
---------------------------------------------------------------------------
\39\CAA section 111.
\40\CAA section 111(d).
---------------------------------------------------------------------------
EPA is in the process of conducting five listening sessions
to give stakeholders extensive opportunities to provide their
views to the agency even prior to any NSPS proposal.\41\
Nothing in EPA's history of issuing NSPS or its approach to
date on greenhouse gases suggests that the agency plans to
establish costly or onerous requirements for new sources under
these provisions.
---------------------------------------------------------------------------
\41\U.S. Environmental Protection Agency, Listening Sessions on
Greenhouse Gas Standards for Fossil Fuel Fired Power Plants and
Petroleum Refineries, Webpage, (online at http://www.epa.gov/
airquality/listen.html).
---------------------------------------------------------------------------
The Upton-Inhofe bill would eliminate this EPA authority to
set minimum emissions standards for large fossil-fuel fired
power plants and oil refineries, which are the first and second
largest stationary sources of greenhouse gases respectively.

IV. Upton-Inhofe Prohibits EPA and California from Establishing New
Tailpipe Standards

The Upton-Inhofe bill changes the manner in which motor
vehicles have been regulated in the United States for 40 years.
The Clean Air Act authorizes two sets of standards to control
tailpipe pollution from motor vehicles: (1) federal standards
and (2) state standards established by California, which can
also be adopted by other states. The Upton-Inhofe bill would
terminate both federal and state authority to establish
tailpipe standards for greenhouse gases after vehicle model
year 2016.
A. Impact on EPA Authority
New section 330(b)(2)(A) prevents ``further revision'' of
the 2010 greenhouse gas tailpipe standards. Those standards
apply to vehicle model years 2012 to 2016. This national
program for fuel economy and greenhouse gas emissions was
supported by the automobile industry, the states, and
environmental advocacy groups.\42\ If the Upton-Inhofe bill is
enacted, there will be no federal greenhouse gas tailpipe
standards for cars and trucks after model year 2016.
---------------------------------------------------------------------------
\42\See U.S. Environmental Protection Agency, U.S. Department of
Transportation, National Highway Traffic Safety Administration, Light-
Duty Vehicle Greenhouse Gas Emissions Standards and Corporate Average
Fuel Economy Standards; Final Rule, 75 Fed. Reg. 25324 (May 7, 2010).
---------------------------------------------------------------------------
EPA and the National Highway Traffic Safety Administration
have recently evaluated scenarios representing 3%, 4%, 5%, and
6% annual increases in overall average stringency in tailpipe
standards after model year 2016. These scenarios are roughly
equivalent to 47 to 62 mpg in 2025, if all improvements were
made using fuel economy-improving technology.\43\ Under the
Upton-Inhofe bill, EPA would lose its authority to adopt
standards that promote these technologies.
---------------------------------------------------------------------------
\43\U.S. Environmental Protection Agency and U.S. National Highway
Traffic Safety Administration, Interim Joint Technical Assessment
Report (Oct. 2010) (online at http://www.epa.gov/otaq/climate/
regulations/420fl 0051.htm).
---------------------------------------------------------------------------
NHTSA, acting alone, is highly unlikely to achieve
comparable levels of oil savings and emissions reductions. Of
the benefits achieved by the 2012 to 2016 national standards,
fully one-quarter of the fuel savings and one-third of the
greenhouse gas emissions reductions are produced solely by the
EPA tailpipe standards.\44\ These differences stem in large
part from differences in the underlying statutory authorities
of the two agencies. For example, some manufacturers have
routinely paid civil penalties rather than complying with NHTSA
fuel economy requirements, while this option is not available
as a practical matter under the Clean Air Act.
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\44\See U.S. Environmental Protection Agency, U.S. Department of
Transportation, National Highway Traffic Safety Administration, Light-
Duty Vehicle Greenhouse Gas Emissions Standards and Corporate Average
Fuel Economy Standards; Final Rule, 75 Fed. Reg. 25324, 25343-4, 25347
(May 7, 2010).
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B. Impact on California Authority
Section 209(b) of the Clean Air Act requires EPA to waive
federal preemption for California motor vehicle standards if
the agency determines that California's standards in the
aggregate will be at least as protective of public health and
welfare as federal standards. It also provides that other
states have the option of electing to apply California's
standards. In practice, this has allowed California to set
vehicle standards that are more protective of public health
than the federal standard and has allowed other states to
follow California's example. However, section 3 of the Upton-
Inhofe bill strips the EPA of authority to waive federal
preemption, thereby blocking any state tailpipe standards for
greenhouse gases for model years 2017 or later.

V. Upton-Inhofe Prohibits EPA from Establishing Standards for Other
Mobile Sources

The Upton-Inhofe bill bars EPA from using its existing
authority under Title II of the Clean Air Act to establish
greenhouse gas emissions standards for other mobile sources
such as planes, trains, boats, and heavy construction
equipment.\45\ NHTSA does not have authority to establish
efficiency standards for these sources, which consume over 2
million barrels of oil per day.\46\ Under the Upton-Inhofe
bill, the potential for substantial oil savings and greenhouse
gas emissions reductions from these sources would be forfeited.
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\45\See CAA sections 213, 231.
\46\See U.S. Energy Information Administration, Annual Energy
Outlook 2011 (online at:
http://www.eia.doe.gov/oiaf/aeo/tablebrowser/
#release=AE02011&subject=0-AE02011&table=4509AE02011®ion=0090&cases=r
ef2011-d120810c).
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VI. Upton-Inhofe Prohibits EPA from Enforcing Greenhouse Gas Reporting
Requirements

Congress included provisions in the Clean Air Act
Amendments of 1990 that required power plants to report carbon
dioxide emissions.\47\ In 2007, Congress extended this
reporting requirement to apply to other large sources, as well
as other greenhouse gases, and EPA issued implementing
regulations in 2009.\48\ New section 330(b)(4)(A), however,
would overturn the recently adopted greenhouse gas reporting
requirements for all sources. Power plants would be the only
sources subject to any reporting requirements, and they would
not have to report greenhouse gas emissions other than carbon
dioxide.
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\47\Clean Air Act Amendments of 1990, section 821 (Public Law 101-
549).
\48\Consolidated Appropriations Act, 2008 (H.R. 2764; Public Law
110-161); U.S. Environmental Protection Agency, Mandatory Reporting of
Greenhouse Gases; Final Rule, 74 Fed. Reg. 56260 (Oct. 30, 2009).
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In addition, EPA prepares the inventory of U.S. greenhouse
gas emissions, which is submitted by the United States pursuant
to its treaty obligations under the U.N. Framework Convention
on Climate Change. Section 330(b)(1) may prevent EPA from
conducting this technical work and thus could impair the United
States' ability to carry out its obligations under this
international treaty, which was signed by President George H.
W. Bush and ratified by the U.S. Senate.

VII. Upton-Inhofe Undermines EPA Programs Related to Substitutes for
Ozone-Depleting Chemicals

Under section 612 of the Clean Air Act, companies that wish
to market a new substitute for ozone depleting substances must
apply to EPA for approval. In determining whether to approve a
substitute, EPA compares the overall risk to human health and
the environment posed by the original substance with that of
the potential substitute. The global warming potential of a
substitute can be a significant factor in this analysis. In
fact, a number of U.S. companies, including Dupont, Honeywell,
and GE, have expended significant resources developing
substitutes with very low global warming potential.
New section 330(b)(1) would block EPA from considering
global warming impacts when approving substitutes. While
section 330(b)(2)(D) excepts implementation and enforcement of
Title VI, that exception applies only to the extent that the
implementation or enforcement only involves class I or class II
substances (i.e., ozone depleting substances). However,
recently approved and pending substitutes are not class I or
class II substances. As a result, EPA would appear to be unable
to consider climate change effects in deciding whether to
approve applications for substitutes.
There are other ways in which the Upton-Inhofe bill
interferes with the ozone-depletion provisions of the Clean Air
Act. For the last two years, the United States, in partnership
with Canada and Mexico, has advocated for an amendment to the
Montreal Protocol that would control the global production of
HFCs, which are substitutes for ozone-depleting chemicals that
have high global warming potentials. HFCs are not class I or
class II substances. New section 330(b)(1) would prevent EPA
from implementing such a treaty amendment through the Clean Air
Act. As a result, it would undermine the Administration's
ability to pursue established treaty negotiating positions that
dozens of countries now support.

VIII. Upton-Inhofe Creates Legal Uncertainty for the 2010 Motor Vehicle
Standards

A summary of the Upton-Inhofe bill issued by the majority
Committee staff states that the Act would allow EPA to
implement the light-duty vehicle tailpipe standards for 2012-
2016.\49\ However, the language of the Upton-Inhofe bill may
not effectuate this stated goal.
---------------------------------------------------------------------------
\49\Energy and Commerce Committee Staff, Subcommittee Markup of
H.R. 910, the Energy Tax Prevention Act of 2011 (internal memorandum)
(Mar. 8, 2011).
---------------------------------------------------------------------------
As discussed above, section 330(d)(4)(B) repeals the
endangerment finding. An endangerment finding is an essential
precondition for light-duty tailpipe standards under section
202(a) of the Clean Air Act. Section 330(b)(2)(A) states that
notwithstanding the repeal of the endangerment finding, section
330(b)(1) does not prohibit EPA from implementing and enforcing
the light-duty vehicle tailpipe standards adopted in May 2010.
But the bill does nothing to satisfy or remove the independent
legal requirement for an endangerment finding under section
202(a). In response to questions, majority counsel stated that
the light-duty vehicle tailpipe standards are not affected by
this bill because the bill codifies that rule. There is,
however, no language in the bill that has the legal effect of
codifying the light-duty tailpipe standards rule. Therefore,
repeal of the endangerment finding will provide opponents of
the light-duty vehicle greenhouse gas rule a new legal argument
that the rules are unlawful.

IX. Upton-Inhofe Calls Voluntary Programs into Question

It is unclear whether the Upton-Inhofe bill preserves EPA's
authority under the Clean Air Act to implement many voluntary
programs to reduce greenhouse gases. Clean Air Act section 103
is a primary authority for many of these programs. While
section 330(b)(2)(C) excepts ``research, development and
demonstration programs'' from the prohibition in section
330(b)(1), this language is narrower than the language in
section 103 of the Clean Air Act, which authorizes
``nonregulatory strategies.'' Thus, it is unclear whether the
language of the exception encompasses voluntary programs.
Moreover, EPA could be blocked from relying on section 103,
which authorizes EPA activities with respect to ``air
pollution'' and ``air pollutants,'' as authority for these
voluntary programs because new section 330(b)(1)(B) excludes
greenhouse gases from the definition of ``air pollutant.''
These provisions in the Upton-Inhofe bill call into question
many successful voluntary programs, such as EPA's SmartWay
program, which works with the trucking industry to reduce
emissions, or EPA's participation in the Global Methane
Initiative, an international effort to implement methane
emissions reduction projects and technologies.

X. Upton-Inhofe Creates Litigation Opportunities for Opponents of
Regulation of Conventional Pollutants

The Upton-Inhofe bill appears to create numerous new
litigation opportunities over the regulation of conventional
air pollutants due to legal ambiguities created by drafting
peculiarities. For instance, although ozone is regulated for
its conventional impacts on public health and welfare, it is
also greenhouse gas. Under the Bush Administration, EPA
considered the climate effects of ozone when establishing a
national ambient air quality standard for ozone.\50\ Similarly,
implementation of the existing landfill gas regulations, which
encompass methane and other gases, might be barred as those
regulations were justified at least in part based on climate
change. It is unclear what impact the Upton-Inhofe bill would
have on many clean air actions that address conventional air
pollutants like ozone and landfill gas that also have climate
change impacts.
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\50\EPA, Air Quality Criteria for Ozone and Related Photochemical
Oxidants, Vol. I (Feb. 2006).
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XI. Amendments to H.R. 910

On March 15, 2011, a number of amendments to H.R. 910 were
considered by the full Committee. Three amendments sought to
recognize and accept the scientific underpinning of EPA's
endangerment finding. Each amendment was rejected on a party-
line vote with all Democratic members supporting the amendment
and all Republican members opposing the amendment.
First, Rep. Waxman offered an amendment that would have put
the Committee on record accepting what decades of data has
demonstrated--that the planet is warming. The amendment read as
follows:
At the end of the bill, add the following new section:

SEC. 4. CONGRESSIONAL ACCEPTANCE OF THE SCIENTIFIC FINDINGS OF THE
ENVIRONMENTAL PROTECTION AGENCY.

Congress accepts the scientific finding of the
Environmental Protection Agency that ``Warming of the climate
system is unequivocal, as is now evident from observations of
increases in global average air and ocean temperatures,
widespread melting of snow and ice, and rising global average
sea level.''.
Second, Rep. DeGette offered an amendment that would have
put the Committee on record accepting the scientific consensus
that climate change is caused by human greenhouse gas
emissions. The amendment read as follows:
At the end of the bill, add the following new section:

SEC. 4. CONGRESSIONAL ACCEPTANCE OF THE SCIENTIFIC FINDINGS OF THE
ENVIRONMENTAL PROTECTION AGENCY.

Congress accepts the scientific finding of the
Environmental Protection Agency that the ``scientific evidence
is compelling'' that elevated concentrations of greenhouse
gases resulting from anthropogenic emissions ``are the root
cause of recently observed climate change''.
Third, Rep. Inslee offered an amendment that would have put
the Committee on record accepting the scientific finding that
public health is threatened by climate change. The amendment
read as follows:
At the end of the bill, add the following new section:

SEC. 4. CONGRESSIONAL ACCEPTANCE OF THE SCIENTIFIC FINDINGS OF THE
ENVIRONMENTAL PROTECTION AGENCY.

Congress accepts the scientific finding of the
Environmental Protection Agency that ``the public health of
current generations is endangered and that the threat to public
health for both current and future generations will likely
mount over time as greenhouse gases continue to accumulate in
the atmosphere and result in ever greater rates of climate
change''.
Henry A. Waxman.
Anna G. Eshoo.
Frank Pallone, Jr.
Edward J. Markey.
G.K. Butterfield.
Jan Schakowsky.
Anthony D. Weiner.
Eliot L. Engel.
Charles A. Gonzalez.
Bobby L. Rush.
Doris O. Matsui.
Mike Doyle.
Diana DeGette.
Tammy Baldwin.
Donna M. Christensen.
Jay Inslee.
Lois Capps.
Edolphus Towns.