Good morning. I am pleased to be here today for our second meeting this year and our 24th hearing since 1998 on multi-emissions issues.

Today we are here to discuss the Clear Skies Act, which would be the most aggressive clean air proposal ever enacted – a 70 percent reduction of power plant emissions. In just three years, nitrogen oxides would be capped at a reduction level of 59 percent and in five years, at a 59 percent reduction level for sulfur dioxide and 29 percent for mercury. As former EPA Administrator Leavitt stated before my Subcommittee on April 1 of last year, the sulfur dioxide and nitrogen oxides reductions “will result in some $50 billion” investment by power plants.

The beauty of Clear Skies is that the reduction levels and timelines are placed in statute and cannot be delayed. The bill expands the Acid Rain Program – our nation’s most successful clean air initiative, which has had virtually no litigation, 100 percent compliance, and reduced sulfur dioxide emissions by 38 percent below 1990 levels at less than the projected cost.

As I discussed at our hearing last week, it is important that we put multi-emissions legislation in context. We live in a global marketplace. Let us not fool ourselves – environmental and energy policies have a direct impact on our ability to keep and maintain jobs in this country.

We simply cannot continue to rely on natural gas for power generation. Our clean air policies have played a major role in the fact that nearly 88% of the new power plants built since 1992 have been natural gas fired. [CHART 1] As a result of this increased demand, natural gas prices have doubled their historical price and we now have the highest prices in the developed world. As the second largest consumer of natural gas (quote): “The chemical industry’s eight-decade run as a major exporter (ended in 2003) with a $19 billion trade surplus in 1997 becoming a $9.6 billion deficit” (March 17, 2004 Washington Post article).

Tom Mullen from Cleveland Catholic Charities testified in 2002 that we must also consider the devastating impact of increased electricity and home heating costs on the poor and elderly. Annual funding for the LIHEAP program to help low income families with their home heating bills has increased by 73 percent since 1999 due to higher prices.

Clear Skies will keep jobs in America and energy prices stable, by allowing us to keep using coal – our most abundant and cheapest energy source. This legislation is needed now because 509 counties were recently designated as in nonattainment for the new National Ambient Air Quality Standards for ozone and particulate matter. As Cincinnati Chamber of Commerce President Michael Fisher stated in testimony on April 1, 2004, “job growth and capital investment are hindered by the nonattainment designation.” [CHART 2] Under Clear Skies and EPA’s new diesel fuel and engine regulations to reduce sulfur, 90 percent of the counties would come into attainment without any local effort.

These designations are based on stricter standards, not dirtier air. [CHART 3] Since 1970, while our nation and economy have grown substantially, emissions of the six main pollutants have decreased by 51 percent. We need Clear Skies to continue at a higher rate this country’s commitment to cleaning up the environment and protecting public health.

We all want cleaner air – the important question is how we achieve it. Instead of having this debate, false claims are being made that existing programs are better than Clear Skies. Conrad Schneider from Clean Air Task Force testified last week that: (quote) “…existing provisions of the Clean Air Act…could potentially require future emission reductions beyond…” Clear Skies.

‘Could potentially require’? This is exactly the point. We need to stop talking about the ideal world and focus on the real world. The Clean Air Act’s highly litigated and cumbersome provisions make it unclear what or when reductions will be achieved. Critics of Clear Skies point to the Section 126 petitions, NAAQS, and New Source Review programs as effective, but history tells us a different story:

· In 1997, eight Northeastern states petitioned EPA to force Midwestern states to reduce nitrogen oxides. After four federal court decisions and EPA retooling, this culminated in the NOx SIP call, which went into effect not in May 1998 but in May 2004 – seven years after the process began.

· [CHART 4] This chart shows the timeline for when EPA began considering a new standard for ozone and when State Implementation Plans are due. It took 15 years!

· The New Source Review program is far worse. I will quickly run through some of it:
o 20-pages of regulations in 1980 defining NSR has turned into 4,000 pages of guidance documents;
o A 1990 lawsuit and court decision resulted in an EPA rulemaking in 1992;
o Working groups were formed in the 1990s to reform NSR with contradictory proposed changes in 1996 and 1998;
o EPA filed enforcement actions in 1999 of which several are still being litigated and different courts have reached different opinions in two of the cases.
o In 2003, EPA issued two rules to reform the program, both of which have spurred lawsuits. Oral arguments on one of these rules are not expected to occur until at least 2006.
o On top of all this, critics have taken out of context two sentences of a 208 page National Academy of Sciences interim report to claim that the NSR program if unchanged will result in more reductions than Clear Skies. This is ridiculous. Clear Skies caps all power plant pollution immediately while NSR is applied on a case-by-case basis under a standard that now has two different – and litigated – interpretations. With all this lengthy litigation, no one can really tell us what the NSR program will get us – except more lawyers!

Until we get past this rhetoric and the false charges that Clear Skies does less than existing law, we are going to go nowhere. In my opinion, these arguments are just a façade for the real motive of holding up this legislation for the political issue of capping carbon dioxide emissions – which cannot pass the Senate and definitely not the House. This will leave us in this stalemate of lawsuits and uncertainty for businesses – and more importantly uncertainty for our environment and public health.

Time is of the essence. It is either now or never. I met with several of my colleagues on the other side and plan to keep working with them and every member on this Committee to get something done to reduce sulfur dioxide, nitrogen oxides, and mercury emissions substantially.

I look forward to hearing from the witnesses. Thank you.